张裕Ｂ：2018年年度报告（英文版）

YantaiChangyuPioneerWineCo.Ltd.

2018AnnualReport

Final2019-01

April,2019

Contents

I、ImportantNotice，

ContentsandDefinition ...... 3II、BriefIntroductionfortheCompanyandMainFinancialIndicators ...... 5

III、SummaryoftheCompany’sBusinesses ...... 10

IV、ManagementDiscussionandAnalysis ...... 14

V、Majorissues ...... 35

VI、ChangesinSharesandtheShareholders’Situation ...... 51VII、RelatedSituationofPreferredShares ...... 61

VIII、SituationforDirectors,Supervisors,SeniorExecutivesandStaffs ...... 62

IX、CorporateGovernance ...... 77

X、RelatedSituationofCorporationBonds ...... 85

XI、FinancialReport ...... 86

XII、ReferenceDocument ...... 198

I.ImportantNotice,ContentandDefinition

Theboardofdirectors，theboardofSupervisors，directors,supervisorsandseniorexecutivesoftheCompanyguaranteethetruthfulness,accuracyandcompletenessofthecontentscontainedinthereportwithnofalserecords,misleadingstatementsorsignificantomissions,andundertakeindividualandjointlegalliabilities.Mr.ZhouHongjiang(ChairmanoftheCompany),Mr.JiangJianxun(ChiefFinancialOfficer&FinancialDirector)assurethetruthfulness,accuracyandcompletenessofthefinancialreportintheannualreport.Exceptthefollowingdirectors,allotherdirectorshavepersonallyattendedthemeetingfordeliberatingtheannualreport.

Directornamewithnon-presentinperson	Directorpostwithnon-presentinperson	Reasonfornon-presentinperson	Nameofmandatory
SunLiqiang	Director	Businesstrip	ZhouHongjiang
AntonioAppignani	Director	Businesstrip	AugustoReina

Forward-lookingstatementssuchasfutureplansanddevelopmentstrategiescoveredinthisreportdonotconstituteasubstantialcommitmentoftheCompanytoinvestors.Investorsareadvisedtopayattentiontoinvestmentrisks.Aboutsignificantrisksthatmaybefacedinproductionandoperationprocess,pleasereferto“5.Riskslikelytooccur”partof“9.ExpectationfortheCompany’sFutureDevelopment”intheChapterFour“ManagementDiscussionandAnalysis”ofthereport.Investorsareadvisedtoreadcarefullyandpayattentiontoinvestmentrisks.TheCompany’spreliminaryschemeofprofitdistributiondeliberatedandpassedbytheboardofdirectorsthistimeisshownasfollowing:BasedontheCompany’stotal685,464,000shares,weplantopayCNY6(includingtax)incashasdividendsforevery10sharestoallshareholdersandsend0bonusshare(includingtax).Capitalreservewillnotbetransferredtoequity.

Definition

DefinitionItem	Refersto	DefinitionContent
Company/TheCompany	Refersto	YantaiChangyuPioneerWineCo.Ltd.
ChangyuGroup/ControllingShareholder	Refersto	YantaiChangyuGroupCo.Ltd.
CSRC	Refersto	ChinaSecuritiesRegulatoryCommission
SSE	Refersto	ShenzhenStockExchange
DeloitteHuaYong	Refersto	DeloitteHuaYongCertifiedPublicAccountantsCo.,Ltd(specialgeneralpartnership)
CNY	Refersto	ChineseYuan

II.BriefIntroductionfortheCompanyandMainFinancialIndicators

1.Company’sinformation

StockAbbreviation	ChangyuA,ChangyuB	StockCode	000869,200869
StockAbbreviationafterAlteration	-
PlaceofStockListing	ShenzhenStockExchange
LegalNameinChinese	烟台张裕葡萄酿酒股份有限公司
AbbreviationofChineseName	张裕
LegalNameinEnglish	YANTAICHANGYUPIONEERWINECOMPANYLIMITED
AbbreviationofEnglishName	CHANGYU
LegalRepresentative	Mr.ZhouHongjiang
RegisteredAddress	56DamaRoad,Yantai,Shandong,China
PostalCode	264000
OfficeAddress	56DamaRoad,Yantai,Shandong,China
PostalCode	264000
Website	http://www.changyu.com.cn
E-mail	[e-mail]

2.Contactpersonandinformation

	SecretarytotheBoardofDirectors	AuthorizedRepresentativeofSecuritiesAffairs
Name	Mr.QuWeimin	Mr.LiTingguo
Address	56DamaRoad,Yantai,Shandong,China	56DamaRoad,Yantai,Shandong,China
Tel	0086-535-6633656	0086-535-6633656
Fax	0086-535-6633639	0086-535-6633639
E-mail	[e-mail]	[e-mail]

3.Informationdisclosureandfilinglocation

MedianameforinformationdisclosureselectedbytheCompany	ChinaSecuritiesNewspaper,SecuritiesTimesandHongKongCommercialDaily
WebSiteassignedbyCSRCtocarrytheannualreport	http://www.cninfo.com.cn
FilinglocationoftheCompany’sannualreport	BoardofDirectors’OfficeoftheCompany,56DamaRoad,Yantai,Shandong

4.Registrationchanges

OrganizationCode	913700002671000358
ChangesforthemainbusinessesoftheCompanysinceitwaslisted	ThebusinessscopedeterminedbytheCompanywhenitwasestablishedonSeptember18th,1997isproduction,processingandsalesofwine,distilledliquor,healthyliquor,fruitliquor,non-alcoholbeverage,fruitjam,packingmaterialandwinemakingmachine.OnApril17th,2008,approvedbythe2007shareholders’meeting,theCompany’sbusinessscopeischangedtoproduction,processingandsalesofwine,distilledliquor,medicatedliquor,fruitliquor,non-alcoholbeverage,fruitjam,packingmaterial,winemakingmachinesandlicensedimportandexport.OnMay12th,2010,approvedbythe2009shareholders’meeting,theCompanychangeditsbusinessscopetoproduction,processingandsalesofwine,distilledliquor,medicatedliquor,fruitliquor,non-alcoholbeverage,fruitjam,packingmaterialanditsproducts,winemakingmachine,licensedimportandexportandexternalinvestmentaccordingtonationalpolicy.OnSeptember23rd,2016,approvedbythe2016annual1stInterimshareholders’meeting,theCompanychangeditsoperatingscopetowineandfruitwine(bulkwine,processingandfilling)production,blendingliquorandotherblendingliquors(grapeliqueur)production,otherliquors(otherdistillingliquors)production,production,processingandsalesofpackingmaterialandwinemakingmachine,grapeplantationandprocurement,tourismresourcesdevelopment(excludingtourism),packagedesign,activityofbuildingrental,licensedimportandexport,warehousebusinessandexternalinvestmentaccordingtonationalpolicy.
Changesforallpreviouscontrollingshareholders	No.

5.OtherrelevantinformationTheaccountingfirmappointedbytheCompany

Name	DeloitteHuaYongCertifiedPublicAccountantsCo.,Ltd(specialgeneralpartnership)
Address	No.23ZhenzhiRoad,ChaoyangDistrict,Beijing
Nameofsignatoryaccountants	XieYanfeng,LiYangang

ThesponsorinstitutionappointedbytheCompanytoperformthedutyofcontinuoussupervisionduringthereportperiod□Available?NotavailableThefinancialadviserappointedbytheCompanytoperformthedutyofcontinuoussupervisionduringthereportperiod□Available?Notavailable6.KeyaccountingdataandfinancialindicatorsWhethertheCompanyneedstoretrospectivelyadjustorrestatetheaccountingdataofpreviousfiscalyears.□Yes?No

	2018	2017	MoreorlessthanLastyear(%)	2016
Operatingrevenue(CNY)	5,142,244,740	4,932,545,229	4.25%	4,717,596,472
Netprofitattributedtoshareholdersofthelistedcompany(CNY)	1,042,632,929	1,031,695,056	1.06%	982,460,488
Netprofitattributedtoshareholdersofthelistedcompanyafterdeductingirregulargainsandlosses(CNY)	965,426,238	986,095,872	-2.10%	941,730,478
Netcashflowsfromoperatingactivities(CNY)	975,978,746	973,243,027	0.28%	889,911,970
Basicearningspershare(CNY)	1.52	1.51	0.66%	1.43
Dilutedearningspershare(CNY)	1.52	1.51	0.66%	1.43
Weightedaverageforearningrateofnetassets(CNY)	11.23%	12.14%	-0.91%	12.55%
	December31st,2018	December31st,2017	MoreorlessthanLastyear(%)	December31st,2016
Totalassets(CNY)	13,117,729,052	12,536,755,208	4.63%	11,528,077,971
NetAssetsattributedtoshareholdersofthelistedcompany(CNY)	9,606,099,365	8,906,342,299	7.86%	8,209,010,989

7.DifferencesinaccountingdataunderPRCaccountingstandardsandinternationalaccountingstandards

(1)DifferencesofnetprofitsandnetassetsinthefinancialreportdisclosedaccordingtobothinternationalaccountingstandardsandPRCaccountingstandards□Available?NotavailableTherearenodifferencesofnetprofitsandnetassetsinthefinancialreportdisclosedaccordingtobothinternationalaccountingstandardsandPRCaccountingstandardsduringthereportperiod.

(2)DifferencesofnetprofitsandnetassetsinthefinancialreportdisclosedaccordingtobothforeignaccountingstandardsandPRCaccountingstandards□Available?NotavailableTherearenodifferencesofnetprofitsandnetassetsinthefinancialreportdisclosedaccordingtobothforeignaccountingstandardsandPRCaccountingstandardsduringthereportperiod.

8.Keyfinancialindicatorsbyquarter

Unit：

CNY

	1stQuarter	2ndQuarter	3rdQuarter	4thQuarter
Operatingrevenue	1,804,057,976	1,024,172,088	1,032,328,986	1,281,685,690
Netprofitattributedtoshareholdersofthelistedcompany	479,444,238	156,393,167	133,916,250	272,879,274
Netprofitattributedtoshareholdersofthelistedcompanyafterdeductingirregulargainsandlosses	466,181,564	140,497,155	110,520,695	248,226,824
Netcashflowsfromoperatingactivities	507,263,964	45,489,508	224,087,322	199,137,952

Whethertherearesignificantdifferencesbetweentheabovementionedfinancialindicatorsortheirsumandtherelatedfinancialindicatorsinthequarterlyreportsandsemi-annualreportsdisclosedbytheCompany.□Yes?No9.Itemandamountofnon-recurringprofitandloss?Available□Notavailable

Unit：

CNY

Item		2018	2017	2016	Explanation
Profitsandlossesondisposalofnon-currentassets,includingtheprovisionforassetimpairmentwrite-offpart		11,368,355	-222,586	14,719
Governmentgrantsincludedinthecurrentprofitsandlosses(exceptforthoserecurringgovernmentgrantsthatarecloselyrelatedtotheentity'soperation,inlinewithrelatedregulationsandhaveproperbasisofcalculation)		87,281,434	47,638,384	49,130,643
Otheroperatingrevenuesandexpendituresexcepttheaforementioneditems		3,817,401	13,999,251	4,656,972
Less:	Incometaxeffect	25,157,188	15,523,424	13,072,324
	Minorityshareholders'equityeffect(aftertaxes)	103,311	292,441
Total		77,206,691	45,599,184	40,730,010	--

Thereasonsshallbemadeclearanddefinitelyastothenon-recurringprofitandlossthattheCompanyhasdefinedbyvirtueoftheExplanatoryAnnouncementonPublicCompany’s

InformationDisclosureNo.1-Non-recurringProfitandLossandastoregardingthenon-recurringprofitandlossasrecurrentprofitandlossasspecifiedintheExplanatoryAnnouncementonPublicCompany’sInformationDisclosureNo.1–Non-recurringProfitandLoss.□Available?NotavailableTherearenocasesthatnon-recurringprofitandlossisdefinedandspecifiedasrecurrentprofitandlossinaccordancewiththeExplanatoryAnnouncementonPublicCompany’sInformationDisclosureNo.1-Non-recurringProfitandLossduringthereportperiod.

III.SummaryoftheCompany’sBusinesses

1.MainbusinessesduringthereportperiodWhethertheCompanyneedstofollowdisclosurerequirementsofspecialindustryNoDuringthereportperiod,theCompany’smainbusinessesareproductionandoperationofwineandbrandy,thusprovidingdomesticandforeignconsumerswithhealthyandfashionablealcoholicdrinks.Comparedwithearlierstage,therearenosignificantchangeshappenedtotheCompany’smainbusinesses.ThewineindustrythattheCompanyinvolvedinisstillingrowthstageandthewholedomesticwinemarketisontherisingtrend.TheCompanyisattheforefrontinthedomesticwinemarket.2.Significantchangesofmainassets(1)Significantchangesofmainassets

Mainassets	Explanationofsignificantchanges
Equityasset	Therearenosignificantchangesduringthereportperiod
Fixedasset	Thefixedassetsincreasedby7.89%comparedwiththeinitialstage,owingtopartofconstructionsinprocesshavebeentransferredtofixedassetduringthereportperiod.
Intangibleasset	Therearenosignificantchangesofintangibleassetduringthereportperiod.
Constructioninprocess	Theconstructionsinprocessdecreasedby26%comparedwiththeinitialstage,owingtopartofconstructionsinprocesshavebeentransferredtofixedassetduringthereportperiod.

(2)Mainoverseasassetssituation?Available□Notavailable

Unit：CNY

Detailsofassets	Formationreasons	Assetsscale	Location	Operationmode	Controlmeasuresforsafeguardingofassetsecurity	Earningcondition	ProportionofoverseasassetsintheCompany’snetassets	Whethertherearesignificantimpairmentrisks
HaciendaYVinedosMarquesDelAtrio.SL	Acquisitionofequity	563,501,798	Spain	Independentoperation	TheCompanyparticipatesinmakingimportantdecisionsthroughboardofdirectorsandappointsCFOonfinancialmanagement.	3,811,465	5.87%	No
IndomitaWineCompanyChile,SpA	Establishmentofjointventure	515,753,832	Chile	Independentoperation	TheCompanyparticipatesinmakingimportantdecisionsthroughboardofdirectorsandappointsCFOonfinancialmanagement.	15,934,347	5.37%	No

KilikanoonEstatePtyLtd

Acquisitionofequity

151,394,573

Australia

Independentoperation

TheCompanyparticipatesinmakingimportantdecisionsthroughboardofdirectors.

217,869

1.58%

3.AnalysisofcorecompetitivenessWhethertheCompanyneedstofollowdisclosurerequirementsofspecialindustryNo.ComparedwiththeparticipantsinthearenaoftheChinesewinesector,webelievethattheCompanyiswiththefollowingadvantages:

Firstly,theCompanyhasbeenenjoyingawell-knownwinebrandsince120-oddyears.“Changyu”,“NobleDragon”and“AFIP”areallChinafamousbrandthathavestronginfluenceandgoodreputation.Secondly,theCompanyhassetupanationwidemarketingnetwork,formeda“three-level”marketingnetworksystemmainlycomposedoftheCompany’ssalesmenanddealers,withstrongmarketingabilityandmarketexploitationability.Thirdly,theCompanyhasstrongresearchstrengthandaproductR&Dsystem.Relyingonthecountry’sonly“State-levelWineR&DCenter”,theCompanyhasmasteredadvancedwinemakingtechnologyandproductionprocessesaswellasbeenpowerfulenoughinproductinnovationandperfectqualitycontrolsystem.Fourthly,theCompanyisinpossessionofalotofgrape-growingbasesthatarecompatiblewithitsdevelopmentrequirements.TheCompanyhasdevelopedagreatdealofvineyardsinthemostsuitableareasforwinegrapegrowingsuchasShandong,Ningxia,Xinjiang,Liaoning,HebeiandShanxi,whosescaleandstructurehavegenerallymettheCompany’sneedsfordevelopment.Fifthly,productsinhigh,mediumandlow-gradeaswellasvarietiesandcategoriesareallcomplete.Over100varietiesofseriesproductssuchaswine,brandyandsparklingwinecoversvariousgrades,includinghigh,mediumandlow-grade,whichcanmeetdifferentconsumergroups’demands.TheCompanyhastakenthedominantstatusinthedomesticwineindustrythroughrapiddevelopmentinthepast10-oddyear

andhascomparativeadvantagesinthefuturecompetition.Sixthly,theCompanyhasarelativelyperfectmotivationsystem.MostofCompany’semployeesindirectlyholdtheCompany’sequitythroughcontrollingshareholders.Therearehighconsistencybetweenemployeebenefitsandshareholdersbenefits,infavorofmotivatingemployeestocreatevalueforshareholders.Seventhly,theCompanyhassetupflexibleandefficientdecision-makingmechanism.TheCompany’scoremanagementteamalwaysmaintainsaworkingstyleofunityandpragmaticandflexibleandefficientdecision-makingmechanism,whichmakestheCompanycandealwithmarketchangesmorecalmly.Eighthly,theglobalproductioncapacitylayouthasbeenbasicallycompleted.TheCompanyhascompletedproductioncapacitylayoutinChina,France,Chile,Spain,Australiaandothermajorwineproducingcountriesintheworld,enablingmakingbetteruseofglobalhigh-qualityrawmaterialresources,capital,talentsandadvancedproductionprocessesandtechnologiestoprovideconsumerswithdiversifiedqualityproductsandbetterserveconsumers.Basedontheabovereasons,theCompanyhasformedrelativelystrongcorecompetenceandwillmaintainarelativelydominantpositioninthefuturepredictablemarketcompetition.

IV.ManagementDiscussionandAnalysis

1.SummarizationIn2018,influencedbymanyfactors,suchastheslowdownofdomesticeconomicgrowthandtheincreaseinuncertaintyresultingfromSino-UStradefriction,theoverallsalesamountofdomesticwineindustrywasrelativelystable,butthesalesvolumesofbothimportedwineanddomesticwinedecreased.Asimportedwinecontinuedoccupyingthemarketofdomesticwine,thecompetitionindomesticwinemarketwasverystrong.Furthermore,theincreaseinthepriceofrawmaterialsandpackingmaterialsaswellasincreaseinthedepreciationoffixedassets,freightandlaborcostfurtherincreasedthepressureofthecompany’sincreaseinprofit.Facingquitealotofexternaldisadvantages,theCompanyinsistedintakingthemarketasthecenter,insistedthedevelopmentstrategyof“Focusonmiddle-and-highlevel,Focusonhighquality,Focusonbigproduct”,intensifiedinternalreform,optimizedproductstructureandmarketlayout,quickenedthepaceofnewproductdevelopmentandmarketpromotion,andstrivedtopromoteproductsales,achievinggoodresultsandrealizingoperatingrevenueofCNY5142.24millionwithanincreaseof4.25%comparedwithlastyearandnetprofitofCNY1042.63millionbelongingtotheparentcompany’sshareholderswithanincreaseof1.06%comparedwithlastyear.2.Analysisofmainbusiness

(1)summarization

Description	Increaseordecreaseoftheendoftheperiodovertheendoflastyear	Causeofsignificantchanges
Operatingrevenue	4.25%	Mainlybecauseofincreaseinaveragepriceofproductsresultingfromimprovementofproductmix
Operatingcost	13.76%	Mainlybecauseofincreaseinthepriceofrawmaterialsandpackingmaterials
Salesexpense	0.16%	Mainlybecauseofyear-on-yearincreaseinwage&welfare
Managementexpense	2.12%	Mainlybecauseofyear-on-yearincreaseinwage&welfareanddepreciationofafforestationfees
R&Dexpense	10.72%	Mainlybecauseofincreaseinexpensesfortechnologyresearchanddevelopmentin2018
Financialexpense	93.36%	Mainlybecauseofincreaseinloaninterestexpenditure

Netamountofcashflowgeneratedinoperatingactivities	0.28%	Mainlybecauseofincreaseinreceivedcashfromproductsalesandrenderingofserdeputy
Netamountofcashflowgeneratedininvestmentactivities	38.08%	Mainlybecauseofincreaseinreceivedcashfromtrecoupingtheinvestment
Netamountofcashflowgeneratedincapital-raisingactivities	-77.83%	Mainlybecauseofincreaseinpaymentofcashfordebtrepayment

ReviewandsummaryoftheprocessoftheCompany’searly-discloseddevelopmentstrategyandbusinessplanduringthereportperiodDuringthereportperiod,theCompanyrealizedtheoperatingrevenueofCNY5142.24millionwithanincreaseof4.25%comparedwithlastyear,slightlylowerthanthetargetfixedatthebeginningoftheyearofrealizingoperatingrevenuenolessthanCNY5.2billion.ThenetprofitofCNY1042.63millionbelongingtotheparentcompany’sshareholderswasrealizedwithanincreaseof1.06%comparedwithlastyear.Themainworkduringthereportperiodwereshownasfollowed:

Firstly,theCompanytookthemarketasthemirror,furtherpromotedthestrategyofthreeFocus,strengthenedinternaladjustmentandreformintensity,acceleratedthelaunchofnewproductsandmarketexpansionofcoreproducts,andstrivedtodevelopE-business,achievinggoodresults.Duringthereportperiod,theCompanyreorganizedsalesteam,preliminarilyrealizedthereduceinstaffnumberandtheimproveofefficiency,conductedtheworkof“salesteamjointlybuiltbymanufacturersanddistributors”,activelyexploredtheexpenseinputmanagementandcontrolmodeof“checkandbalancebetweenmanufacturersanddistributors”,andreceivedpreliminaryeffects.Tenprovincialbrandycompanieswerenewlyestablished.Specializedprovincialwinecompaniesandcomprehensiveprovincialcompaniesweresubdivided.Threebusinesssegments,includingprovincesandcitiessuchasZhejiang,Fujian,Guangdong,Jiangsu,Shandong,BeijingandShanghaietcandE-businessandsoon,realizedauthorizedoperation.TheCompanyadjustedthefunctionofVIPcustomerbusiness,peeledoffdistributionbusinessindirectsupplysystem,furtherdefinedtherelationshipbetweentheChangyuparentbrandanditssubsidiarybrands,formedthecorebrandsystemofvariousliquorsandmadedevelopmentplanningofeachbrand.Seriesofnewproducts,suchastheninthgenerationNobleDragon,newZenithwirl,15-yearKoya,10-yearKoya,6-yearKoya,AustralianKilikanoonproductsandChileanIndomitaproductsandsoon,receivedwidepraisesandthedemandofpartialproductsexceedssupplyowingtotheirhotsale.TheCompanyinsistedonthestrategyofthreeFocus,weededout134kindsofwineandcentralizedmostmarketingresourcestobeusedformarketpromotionofmiddle-to-high-endwine,five-starandabovebrandyandimportedwinewithownbrands,makingsalesrevenueofwineandbrandyachievedifferentlevelsofincrease.

Secondly,theCompanytookthequalityasthebasis,regardedproductqualityasanimportantmagicweapontodefeatenemies.Itconductedall-aroundself-examination,self-correctionandoptimizationontheselectionofgrapebase,grapeplantingmode,productionprocessandtechnology,qualitytestingequipmentandproductqualitycontrolsystemetc,formulatedthree-yearplanning,implementationschemeandspecificmeasuresforproductdevelopmentandqualityimprovementinfuturethreeyears,strengthenedtechnicalexchangesathomeandabroadandteamconstructionofwinemakers,focusedonnewproductdevelopmentandtechnicaldifficulties,improvedthequalitytraceabilitysystemandstrengthenedqualitycontrolinthewholeproductionprocess,makingthecompany'stechnicallevelandproductqualityreachanewlevel.TheCompanycarriedout45technologyresearchesandcompletedonesub-projectofnational863project.DraftedstandardsofWine-makingGrapeandOakBarrelpassedthegroupstandardsassessmentbyChinaAlcoholicDrinksAssociation,fillingingapsofdomesticwineindustry.KeyTechnologyResearchandApplicationinIndustrializationofDomesticOakProductswasdeclaredfor2018scientificandtechnologicalprogressawardofChinaAlcoholicDrinksAssociation.KeyTechnologyResearchforPremiumandCharacteristicWine-makingGrapeCabernetGernischtandWineProductionwonscientificandtechnologicalprogressawardofChinaNationalLightIndustryCouncil.In2018IWSC,KilikanoonWinesPtyLtdinAustraliawasawarded“AustralianBestWineProduceroftheYear”andwastheonlyonechateauawardedbyIWSCamongmorethan4000chateauxinAustralia,ofwhich2014KilikanoonEstateSpecialReserveShiraz8Kwonoutstandinggoldmedalwithscoresof93pointsandabove)aswellasthetrophyof“World’sBestShirazoftheYear”while2016KilikanoonEstateWineBlend6Kwongoldmedalwithscoresof90to92.9points.KilikanoonWinesPtyLtdwashonoredwiththetitleof“AustralianBestWineProduceroftheYear”in2018MundusVini.2014KilikanoonEstateSpecialReserveShiraz8KwongoldmedalinDAWAwiththescoreof95.2015MoserFamilyCabernetSauvignonRedWine,2016MoserLegendCabernetSauvignonWhiteWine,2015Golden-labelIcewineofGoldenIcewineValleyand2015Blue-labelIcewineofGoldenIcewineValleywongoldmedalinthe22ndsessionofBerlinerWeinTrophy.ChangyuFive-starFineBrandywongoldmedalin2018SpiritsSelectionbyConcoursMondialdeBruxelles.ChangyuKoya15-yearsXObradnyageinginoakbarrelwonthedesignawardofluxurycategoryin2018PentawardsAwardCeremony.“Water-dropDecanter”ofChangyuKoya10-yearsXOBrandywonthedesignawardofpackagingcategoryin2018iFDesignAwardCeremonyheldatBMWWeltinMunich,Germany.Thirdly,theCompanyrealizedonlineidentificationandorder-drivenmodeofmajorproducts.Duringthereportingperiod,theCompanyissuedAssessmentMeasuresforPerformanceRateofProductionOrder,gavefullplaytoadvantagesofadvancedproductionfacilities,highautomationandinformationizationandfastproductionspeed,optimizedandadjustedbusinessprocesses,andstrengthenedcoordinationofsupply,productionandsales,making27kindsofNobleDragonproductswithhighsalesvolumeandalldomesticchateauwinesachieveorder-drivenmode.Mostdomesticwineproductsachievedonlinetagging,which

improvedproductionefficiencyanddeliveryspeed,dramaticallyreducedproductandcapitalbacklogsandbettersatisfiedthemarketneeds.Fourthly,theCompanyenhancedfinancialmanagementandestablishedandimprovedtheassessmentsystemtakingprofitasprincipalline.Duringthereportperiod,theCompanystrengthenedthemanagementinfinancialbudget,fixedfundsandoverseasenterprises’financialaffairs,enhancedtheauditinpriceexecution,grossprofitmargin,capitaloccupation,keyexpenses,andinvestmentprojects,increasedtheinvestigationofeconomicresponsibility,scientificallyallocatedinternalcapital,vigorouslystrivedforpolicy-basedcapitalloansandcontinuouslyreducethecostofcapital.Itstrengthenedthesimulatedprofitassessmentofauthorizedbusinessunitsandstrivedtoestablishaprofitassessmentsystemcoveringallbusinesssegmentsandrespectiveresponsibilitiesinordertoprovideabasicbasisformorereasonableandefficientperformanceassessmentandtoimproveprofitability.Fifthly,theCompanysuccessfullycompletedtheprocurementofrawmaterialsincludinggrapesandfurtherstrengthenedthemanagementingrapebase.TheCompanycomprehensivelyaccomplishedtheprocurementplanofrawmaterialsexemplifiedasgrapes,improvedthefermentationrateofpremiumwines,furtherdeepenedsortmanagementandsortacquisitionofgrapebasesandcontinuedpromotingthemechanizationprocessinvineyards,loweringtheoperatingcostsofself-supportedgrapebasesandmakingscientificandnormativemanagementingrapebasereachahigherlevel.Itraisedgrapepurchasestandard,improvedrawmaterialquality,activelyconductedtheintroduction,selectivebreedingandimprovementofnewgrapevarietiesandcharacteristicvarietiesandcultivatedalotofnewvarieties,enrichingthevarietyresourceforfutureproductdevelopment.Italsoorganizedorchardisttotakeprofessionaltrainingongrapeplantingtechnology,whichimprovedtheirgrapeplantingandmanagementlevel.Sixthly,theCompanycontinuedpromotinginternationalizationstrategyandsteadilyimplementedoverseasacquisition.Itacquired80%equityofKilikanoonEstatePtyLtdinAustralia.

(2)Revenueandcost

①Compositionofoperatingrevenue

Unit:CNY

	2018		2017		Year-on-yearincreaseordecrease(%)
	Amount	Proportioninoperatingrevenue	Amount	Proportioninoperatingrevenue
Total	5,142,244,740.00	100%	4,932,545,229	100%	4.25%

operatingrevenue
Sector-classified
Sectorofliquorandalcoholicbeverage	5,142,244,740	100%	4,932,545,229	100%	4.25%
Product-classified
Wine	4,000,233,434	77.79%	3,829,326,556	77.63%	0.16%
Brandy	999,207,299	19.43%	989,889,728	20.07%	-0.64%
Others	142,804,007	2.78%	113,328,945	2.30%	0.48%
Area-classified
Domestic	4,486,387,956	87.25%	4,497,288,066	91.18%	-3.93%
Abroad	655,856,784	12.75%	435,257,163	8.82%	3.93%

②Thecasesofindustry,productorareaaccountingforover10%intheCompany’soperatingrevenueoroperatingprofit?Available□NotavailableWhethertheCompanyneedstofollowdisclosurerequirementsofspecialindustryNo

Unit:CNY

	Operatingrevenue	Operatingcost	Grossprofitrate	Year-on-yearincreaseordecrease(%)ofoperatingrevenue	Year-on-yearincreaseordecrease(%)ofoperatingcost	Year-on-yearincreaseordecrease(%)ofgrossprofitrate
Sector-classified
Sectorofliquorandalcoholicbeverage	5,142,244,740	1,901,611,507	63.02%	4.25%	13.76%	-3.09%
Product-classified
Wine	4,000,233,434	1,460,855,413	63.48%	4.46%	15.36%	-3.45%
Brandy	999,207,299	403,699,973	59.60%	0.94%	14.58%	-4.81%
Others	142,804,007	37,056,121	74.05%	26.01%	-29.91%	20.70%
Total	5,142,244,740	1,901,611,507	63.02%	4.25%	13.76%	-3.09%

Area-classified
Domestic	4,486,387,956	1,477,589,238	67.07%	-0.24%	7.17%	-2.27%
Abroad	655,856,784	424,022,269	35.35%	50.68%	44.76%	2.65%

UndertheconditionthatthestatisticalcaliberoftheCompany’smainbusinessdataisadjustedduringthereportperiod,theCompany’smainbusinessdataadjustedonthebasisofcaliberattheendofreportperiodinrecentoneyear.□Available?Notavailable③WhethertheCompany’ssalesrevenueformaterialobjectismorethanlaborserdeputyrevenue?Yes□No

Sector	Project	Unit	2018	2017	Year-on-yearincreaseordecrease(%)
Wine	Salesvolume	Ton	112,600	104,016	8.25%
Brandy	Salesvolume	Ton	39,315	39,130	0.47%

Explanationonthecausesofover30%year-on-yearchangesoftherelatedcomparisondata□Available?Notavailable④ThefulfillmentofmajorsalescontractsignedbytheCompanyuptothereportperiod□Available?Notavailable⑤CompositionofoperatingcostsClassificationofsectorandproduct

Unit:CNY

Sector	Project	2018		2017		Year-on-yearincreaseordecrease(%)
		Amount	Proportionintheoperatingcost(%)	Amount	Proportionintheoperatingcost(%)
Liquorandalcoholicbeverage	Blendingliquor	981,838,789	52.42%	929,487,468	56.48%	-4.06%
	Packingmaterial	633,281,194	33.81%	525,292,149	31.92%	1.89%
	Wages	63,385,522	3.38%	57,733,717	3.51%	-0.12%
	Manufacturingexpenses	194,485,534	10.38%	133,177,282	8.09%	2.29%

Unit:CNY

Sector	Project	2018	2017	Year-on-yearincreaseor

Amount

Proportioninthe

Amount

Proportioninthe

			operatingcost(%)		operatingcost(%)	decrease(%)
Wine	Blendingliquor	759,623,724	52%	711,224,945	56.16%	-4.16%
	Packingmaterial	484,791,303	33.19%	395,026,889	31.19%	1.99%
	Wages	54,718,770	3.75%	47,843,744	3.78%	-0.03%
	Manufacturingexpenses	161,721,616	11.07%	112,295,874	8.87%	2.20%
Brandy	Blendingliquor	217,997,239	54%	204,764,927	58.12%	-4.12%
	Packingmaterial	144,272,064	35.74%	117,982,142	33.49%	2.25%
	Wages	8,666,752	2.15%	9,678,688	2.75%	-0.60%
	Manufacturingcost	32,763,918	8.12%	19,903,211	5.65%	2.47%

⑥Whethertherearechangesofconsolidationscopeduringthereportperiod?Yes□NoAccordingtotheShareSale&PurchaseAgreementsignedbytheCompanyandtheshareholdersofKilikanoonEstatePtyLtdonDecember5

th

,2017,theacquisitionof80%equityofKilikanoonEstatePtyLtdisbasedonAUD20,860,825(equivalenttoCNY107,194,420).TheCompanycompletedtheequitytransferonJanuary18

th

,2018,andobtainedcontroloverthefinancialandoperatingpoliciesofKilikanoonEstatePtyLtd.Thiscompanyisincludedintheconsolidatescopeduringthereportperiod.⑦MajorchangesoradjustmentsoftheCompany’sbusinesses,productsorserdeputysduringthereportperiod□Available?Notavailable⑧InformationofmajorsalescustomersandmajorsuppliersTheCompany’smajorsalescustomers

Thetotalsalesamountofthetopfivecustomers（CNY）	183,898,220
Theproportionthattotalsalesamountofthetopfivecustomersaccountingfortheannualtotalsalesamount（%）	3.58%
Theproportionthatsalesamountoftherelatedpartyinthetotalsalesamountofthetopfivecustomersaccountingfortheannualtotalsalesamount（%）	0%

InformationoftheCompany’s5biggestsalescustomers

No.	Customername	Salesamount（CNY）	Proportionintotalsalesfortheyear（%）
1	ChangyuexinTradingCompanyLimitedinShenzhencity	55,734,499	1.08%
2	HaikouHeshunxinTradingCompanyLimited	35,693,617	0.69%
3	XinbaichengFoodFirminHanjiangdistrictofPutiancity	32,959,410	0.64%
4	FuzhouShengshihanggangTradingCompanyLimited	30,794,332	0.60%
5	FengxiangGroceryStoreinHui’antown	28,716,363	0.56%
Total	--	183,898,221	3.58%

Othersituationexplanationsofmajorcustomers□Available?NotavailableInformationontheCompany’smainsuppliers

Thetotalpurchaseamountofthetop5suppliers	583,902,258
Theproportionofthetotalpurchaseamountofthetop5suppliersintheannualpurchaseamount	37.75%
Theproportionoftherelatedpartypurchaseamountinthetop5supplierpurchaseamountinannualpurchaseamount	11.2%

InformationontheCompany’stop5biggestsuppliers

No.	Suppliername	Purchaseamount(CNY)	Proportionintotalpurchasefortheyear（%）
1	YantaiShenmaPackagingCo.,Ltd.	173,238,289	11.20%
2	YantaiChangyuGlassCo.,Ltd.	123,686,048	8%
3	LiquanSalesDepartmentofShandongYantaiWineryCo.,Ltd.	116,840,313	7.55%
4	XinjiangYuyuanLiquorCo.,Ltd.	108,763,517	7.03%
5	TheXinjiangProductionandConstructionCorpsthe152thGroupofthe8thAgriculturalDivision	61,374,092	3.97%
Total	--	583,902,259	37.75%

Othersituationexplanationsofmainsuppliers□Available?Notavailable

(3)Expense

Unit:CNY

	2018	2017	Year-on-yearincreaseordecrease(%)	Explanationofsignificantchanges
Salesexpense	1,274,599,146	1,272,522,443	0.16%	Mainlybecauseoftheincreaseofsalaryandwelfarecomparedwithlastyear
Managementexpense	343,580,651	336,461,133	2.12%	Mainlybecauseoftheincreaseofsalaryandwelfareaswellasamortizationofamortizationfeescomparedwithlastyear
Financialexpense	35,945,302	18,590,259	93.36%	Mainlybecauseoftheincreaseinloaninterestexpenditure
ResearchandDevelopmentexpense	4,784,118	4,320,825	10.72%	Mainlybecauseoftheincreaseoftechnologydevelopmentexpenditure

(4)Researchanddevelopmentinvestment□Available?Notavailable

(5)Cashflow

Unit:CNY

Item	2018	2017	Year-on-yearincreaseordecrease(%)
Subtotalofcashinflowinoperatingactivities	5,080,363,769	4,965,586,341	2.31%
Subtotalofcashoutflowinoperatingactivities	4,104,385,023	3,992,343,314	2.81%
Netamountofcashflowgeneratedinoperatingactivities	975,978,746	973,243,027	0.28%
Subtotalofcashinflowininvestmentactivities	423,413,326	216,678,355	95.41%
Subtotalofcashoutflowininvestmentactivities	931,261,875	1,036,886,116	-10.19%
Netamountofcashflow	-507,848,549	-820,207,761	38.08%

generatedininvestmentactivities
Subtotalofcashinflowincapital-raisingactivities	1,114,333,670	1,064,892,130	4.64%
Subtotalofcashoutflowincapital-raisingactivities	1,546,641,222	1,307,993,557	18.25%
Netamountofcashflowgeneratedincapital-raisingactivities	-432,307,552	-243,101,427	-77.83%
Netincreaseofcashandcashequivalents	25,971,060	-76,053,030	134.15%

Explanationofmaininfluencefactorscontributingtogreatchangesinrelateddataonyear-on-yearbasis?Available□NotavailableComparedwiththesameperiodoflastyear,duringthereportperiod,thesubtotalofcashinflowininvestmentactivitiesincreasedby95.41%andthenetamountofcashflowgeneratedininvestmentactivitiesincreasedby38.08%,whichismainlyduetotheincreaseincashreceivedfromtherecoveryofinvestment;subtotalofcashoutflowincapital-raisingactivitiesincreasedby18.25%andnetamountofcashflowgeneratedincapital-raisingactivitiesdecreasedby77.83%year-on-year,whichismainlyduetotheincreaseincashpaidfordebtrepayment;netincreaseofcashandcashequivalentsincreasedby134.15%,whichismainlyduetotheincreaseincashreceivedfromtherecoveryofinvestment.ExplanationonthecausesofmajordifferencesbetweenthenetcashflowgeneratedbytheCompany’soperatingactivitiesandnetprofitofthisyearduringthereportperiod.□Available?Notavailable3.Analysistonon-mainbusiness□Available?Notavailable4.Assetsandliabilities(1)Significantchangesofassetscomposition

Unit:CNY

	Attheendof2018		Attheendof2017		Proportionincreaseordecrease(%)	Explanationonsignificantchanges
	Amount	Proportioninthetotalassets(%)	Amount	Proportioninthetotalassets(%)
Monetaryfunds	1,475,700,477	11.25%	1,402,522,509	11.19%	0.06%	Nosignificant

						changes
Receivables	242,153,083	1.85%	263,796,355	2.10%	-0.25%	Nosignificantchanges
Inventory	2,724,591,457	20.77%	2,473,614,046	19.73%	1.04%	Nosignificantchanges
Investmentrealestate	31,572,489	0.24%	18,467,989	0.15%	0.09%	Nosignificantchanges
Long-termequityinvestments		0%		0%	0%	Nosignificantchanges
Fixedassets	5,749,731,667	43.83%	5,329,083,969	42.51%	1.32%	Nosignificantchanges
Constructioninprogress	759,296,591	5.79%	1,026,141,569	8.19%	-2.40%	Nosignificantchanges
Short-termborrowings	688,002,410	5.24%	714,434,286	5.70%	-0.46%	Nosignificantchanges
Long-termborrowings	156,480,662	1.19%	156,125,854	1.25%	-0.06%	Nosignificantchanges

(2)Assetsandliabilitiesmeasuredatfairvalue□Available?Notavailable(3)LimitationsofassetsrightsuptotheendofthereportperiodAttheendofreportperiod,theCompanyhasnoassetssealedup,detainedorfrozen.Forinformationaboutassetsmortgageandpledge,pleaserefertoAnnouncementonExternalGuarantee(announcementnumber:2016-Temporary021),AnnouncementonExternalGuarantee(announcementnumber:2017-Temporary015)andAnnouncementonExternalGuarantee(announcementnumber:2018-Temporary020)disclosedonChinaSecuritiesJournal,SecuritiesTimesandCNINFO(http://www.cninfo.com.cn/)respectivelyonDecember22

nd

,2016,December12

th

,2017andDecember5

th

,2018.5.Investmentcondition

(1)Overallsituation

?Available□Notavailable

Investmentamountduringthereportperiod(CNY)	Investmentamountofthesameperiodoflastyear(CNY)	Variation
450,762,420	634,882,100	-29%

(2)Casesofacquiredsignificantequityinvestmentsduringthereportperiod?Available□Notavailable

Unit:CNY

Investedcompanyname

Mainbusiness

Investmentmode

Investmentamount

Shareholdingratio

Capitalsource

Partner

Investmenthorizon

Producttype

Progressuptobalancesheetdate

Estimatedearnings

Investmentprofitorlossduringthereportperiod

Whetherinvolvedinlitigation

Disclosuredate(ifhave)

Disclosureindex(ifhave)

KilikanoonEstatePtyLtd

Wineproductionandsale

Acquisition

107,194,420

80.00%

Self-owned

PTO7PtyLtd,WoodvaleVintnersPtyLtd,W.J.DuthyHoldingsPtyLtd,WarrickJamesDuthy

50years

Wine

Allacquisitionworkshavebeencompleted

15,000,000

174,295

No

December12th,2017

PleaserefertoAnnouncementonEquityAcquisitionofKilikanoonEstatePtyLtdinAustralidisclosedonChinaSecuritiesJournal,SecuritiesTimesandCNINFO

														(http://www.cninfo.com.cn)
Total	--	--	107,194,420	--	--	--	--	--	--	15,000,000	174,295	--	--	--

(3)Casesofsignificantongoingnon-equityinvestmentsduringthereportperiod?Available□Notavailable

Unit:CNY

Projectname

Investmentmode

Whetherbelongstofixedassetsinvestment

Involvedsectorsofinvestmentprojects

Investmentamountduringthereportperiod

Accumulatedactualinvestmentamountuptotheendofthereportperiod

Capitalsource

Projectprogress

Estimatedearnings

Accumulatedrealizedearningsuptotheendofthereportperiod

Reasonsforunreachedplanningscheduleandestimatedearnings

Disclosuredate(ifhave)

Disclosureindex(ifhave)

YantaiChangyuInternationalWineCityBlendingandCoolingCenter

Self-constructed

Yes

Liquorandalcoholicbeveragesector

217,495,000

1,376,114,100

Ownedfund

100%

0.00

0.00

—

2017.04.22

PleaserefertoResolutionAnnouncementofSeventhSessionBoardofDirectors4thMeetingandResolutionAnnouncementofSeventhSessionBoardofDirectors

YantaiChangyuInternationalWineCityBottlingCenter	Self-constructed	Yes		26,510,000	913,200,000	Ownedfund	100%	0.00	0.00	—	2017.04.22	8thMeetingdisclosedonChinaSecuritiesJournal,SecuritiesTimesandCNINFO(http://www.cninfo.com.cn/)
YantaiChangyuInternationalWineCityLogisticsCenter	Self-constructed	Yes		1,300,000	416,507,200	Ownedfund	100%	0.00	0.00	—	2017.04.22
ChangyuVineandWineResearchInstitute	Self-constructed	Yes		1,214,800	116,974,800	Ownedfund	80%	0.00	0.00	—	2017.04.22
TreasureWineChateau	Self-constructed	Yes		18,830,000	128,820,000	Ownedfund	70%	0.00	0.00	—	2017.04.22
KoyaBrandyChateau	Self-constructed	Yes		11,631,000	147,329,000	Ownedfund	85%	0.00	0.00	—	2017.04.22
GreeningInvestment	Self-constructed	Yes		20,285,000	73,390,700	Ownedfund	100%	0.00	0.00	—	2017.04.22
SAPinformatizationforindustrialproduction	Self-constructed	Yes		26,510,000	37,850,000	Ownedfund	40%	0.00	0.00	—	2018.04.23
Fireprotection	Self-constructed	Yes		4,570,000	4,570,000	Ownedfund	50%	0.00	0.00	—	2018.04.23

engineeringprojectofresearchinstitute
MaintenanceandreconstructionprojectofEtablissementsRoulletFransacChateauinCOGNAC	Self-constructed	Yes		8,790,200	8,790,200	Ownedfund	80%	0.00	0.00	—	2018.04.23
Oakbarrelprocurementproject	Others	Yes		6,432,000	6,432,000	Ownedfund	60%	0.00	0.00	—	2018.04.23
Total	--	--	--	343,568,000	3,229,978,000	--	--	0.00	0.00	--	--	--

(4)Financialassetsinvestment①Securityinvestmentsituation□Available?NotavailableTherearenosecurityinvestmentsfortheCompanyduringthereportperiod.

②Derivativesinvestment□Available?NotavailableTherearenoderivativesinvestmentsfortheCompanyduringthereportperiod.(5)Theusagesituationofraisedcapital□Available?NotavailableTherearenousagesituationsofraisedcapitalfortheCompanyduringthereportperiod.(6)Saleofsignificantassetsandequities①Saleofsignificantassets□Available?NotavailableTherearenosalesofsignificantassetsduringthereportperiod.②Saleofsignificantequities□Available?Notavailable(7)Analysisofmainholdingandjointstockcompanies?Available□NotavailableSituationofmainsubsidiariesandjointstockcompaniesaffectingover10%oftheCompany’snetprofit

Unit:CNY

Companyname	Companytype	Mainbusiness	Registeredcapital	Totalassets	Netassets	Operatingrevenue	Operatingprofit	Netprofit
YantaiChangyu-CastelWineChateauCo.,Ltd	Subsidiary	Development,productionandsaleofwineandsparklingwineandtouristserdeputy	USD5million	255,992,191	84,122,529	121,235,278	5,168,651	3,710,124
ChateauChangyuAFIPGlobal	Subsidiary	Development,productionandsaleofwineandbrandy	CNY642.75million	681,088,671	618,490,126	159,369,783	20,194,892	16,555,846
DicotPartners,S.L.HaciendaYVinedosMarquesDelAtrio.sl	Subsidiary	Productionandoperationofwineandotherliquors	EUR2,385,732	563,501,798	127,321,546	327,550,545	2,162,404	3,811,465
IndomitaWineCompanyChile,SpA	Subsidiary	Productionandoperationofwineandotherliquors	USD47.19million	515,753,832	362,418,343	262,104,563	21,066,614	15,934,347

Acquisitionanddisposalofsubsidiariesduringthereportperiod?Available□Notavailable

Companyname	Modeofacquisitionanddisposalofsubsidiariesduringthereportperiod	Effectonoverallproductionmanagementandperformance
KilikanoonEstatePtyLtd	Equityacquisition	174,295

ExplanationonmainholdingandjointstockcompaniesTheconsolidatedincomeofKilikanoonEstatePtyLtdshowninmainfinancialinformationoftheimportantnon-whollyownedsubsidiarieslistedinfinancialstatement’snote“8.Equitiesinothersubjects”isaloss.Thisisduetothe“Premium”acquisitionwhentheCompanyacquiredKilikanoonEstatePtyLtd.Thevalue-addedportionoftheassetvaluationinthepurchasepriceissubjecttothe“Amortization”oftheasset'susefullife(3-20

years)inaccordancewiththecurrentaccountingstandardswhenChangyuconsolidatingstatements.TheCompany’smainoverseascompanieshavegoodearningsperformanceoftheirown.(8)SituationofthestructuredsubjectscontrolledbytheCompany□Available?Notavailable(9)ExpectationfortheCompany’sfuturedevelopmentOnthebasisofourlimitedexperienceandprofessionalskills,theCompanymakesthefollowingjudgmentsonthewineindustryandfuturedevelopment:

1)ThesectorcompetitionpatternanddevelopmenttrendUnderuncertaintyeffectscausedbytheslowdownofnationalmacroscopiceconomygrowthandtheSino-Americantradefriction,theoveralldemandofChinesewinemarketisstillcomparativelyweak,thesalesgrowthisweak,andtheoperationformoftheCompanyisstillcomparativelysevere.Thechangesofthealcoholconsumptionenvironmentmakethe“fragmentation”ofwinemarketbecomeserious,leadingtodifficultiesinsellinghigh-endproducts.Consumerstendtobemorerational,whichrequiresChangyutomakemoreeffortsinimprovingthecostperformanceofproducts.OwingthatinfluxofplentyofimportedwineswouldfurthercompressthedomesticwinemarketsharesandthenewchannelssuchasE-commercecausesagreatimpactonthetraditionalsaleschannels,thecompetitioninthedomesticwineindustrywillstillbefierceatpresentandinthefuturelongtime.Rawmaterialcost,freightanddepreciationexpenseandotherexpensesarelikelytoincrease,bringingbigpressuretotheCompany’sprofitability.Butinthelongrun,thankstoincreaseintheirincome,moreandmorepeoplewouldpursuehealthandfashionlifemodeandthepeoplewouldbeinmorefavorofwineswhichfitquitewellwiththetrendofconsumption.Thefixedconsumerpopulationofwineisnolongerlimitedtothemiddleclassandhigh-endpeople.Moreandmoreyoungpeoplewilljointhewineconsumptionarmy,andmiddle-agedandoldconsumerswillgraduallyshifttotheranksofdrinkingwineforhealthandhealthconsiderations.“Lessdrinking,drinkinggoodwine,healthydrinking”willbecomethefuturedevelopmenttrend,andthuscontinuouslyexpandthedemandforqualitywine,whichdeterminesthehugemarketdevelopmentpotentialofChinesewineindustry,especiallyforbrandyandwinewithbettercostperformance,whichmaygrowfaster.China'spost-90semergingconsumergroupshavegraduallyrisen,andtheirstronglocalawarenesswillmakedomesticwinespopularwithmoreyoungconsumers.Affectedbytheheadeffect,thecapacityofcontrollingwholeindustrialchainoflarge-scaleenterpriseswillbefurtherenhanced,andtheproductsegmentationspacewillbelargerandlarger,largeandstrong,smallandbeautifulwillcoexistharmoniously.Accuratemarketingrepresentedbycircle-layersocialcontact,private-sphereE-business,membershipsystemwillbethemosteffectivemarketingmode.Insuchacaseoflong-termcoexistenceofopportunitiesandchallenges,thoseenterprisesthatpossessstrongbrandinfluenceandmarketingability,catchtheopportunities,activelytakeadjustments,makefulluseofnewlyemergingandtraditionalsaleschannels,timelysatisfytheconsumers’demandsandprovideproductswithhighcost

performancewillhavetheopportunitytobethefinalwinnerofcompetitions,andthenformanewpatternofthefutureChinesewinemarket.2)TheCompany’sdevelopmentstrategyTheCompanywillinsistthedevelopmentdirectionof“Focusonmiddle-and-highlevel,Focusonhighquality,Focusonbigproduct”,comprehensivelyimplementthedevelopmentstrategyofsameimportancebetweenwineandbrandy,endeavourtopromotetheharmoniousdevelopmentofvariousliquors,activelyexpandthescopeofconsumptionfieldandmarketingmode,industriouslydevelopmiddle-and--high-endwinesandbrandy,strengthenthemarketinglevelofimportedwineandstrivetoprovideconsumerswitharichvarietyofproductswithhighcostperformance.3)ManagementplanforthenewyearIn2019,theCompanywilltryitsbesttorealizeoperatingrevenueofnotlessthanCNY5.3billionandcontrolthemainoperatingcostsandthreeperiodexpensesbelowCNY3.7billion.4)MeasurestobetakenbytheCompanyInordertobettercatchopportunitiesandfacechallenges,theCompanywilltakefulladvantageofself-ownedadvantages,meetchallenges,adheretomarket-orientation,intensifyinternaladjustmentandreformationdegree,acceleratethelaunchofnewproductsandthepaceofmarketdevelopment,implementtheperformanceassessmentmodeofmainlyfocusingongrossprofitrateandprofit,putattentiontodowellinfollowingworksin2019andstrivetoachieveannualoperationtargets.Thefirstistoaroundthedevelopmentstrategyoffocusingonmid-to-highend,focusingonhighquality,andfocusingonbigproduct,acceleratetheinternalreform,andfurtherenhanceprofitability.TheCompanywillfirmlyconsolidatethedominantstatusindomesticwine,establishtheleadingpositionindomesticbrandy,bringtheadvantageofbackwardnessinimportedwine,ensuretriplefocusingstrategycanbeimplementedonthegroundby“constantly,everywhereandeveryone”,andpromotethecomprehensivedevelopmentofvariousbrands,includingwine,brandyandimportedliquor.Besides,theCompanywillfurtherimprovesalesorganizationstructure,improverelativelyindependentsalessystemofeachliquorcategory,establishcompetitivebenchmarkofeachliquorcategoryanddeterminecatch-uptarget.Furthermore,theCompanywillintegrateandoptimizetheorganizationstructureofsalessystem,completethetransformationfrommanagementdealerstoserdeputydealersassoonaspossible,futureclosetomarketandcustomers,uselesspeopletomanagedealers,enablemorepeopletoserveterminalsandcustomerswithdealers,askterminalsforsalesvolumeandaskcultivatingeducatingforgrowth.Dealerteambuildingwillbefurtherstrengthened,constructionofsalesteamwithdealerswillbepromotedandmarkingabilityofdealerswillbeenhanced.“Fundpool”willbebuiltwithdealerstoguaranteemarketinvestmentinplace.Newproductdevelopmentwillbeaccelerated.NewproductsintroducedforwineincludesthenewRena,Castel,AFIP,Tinlotandrepresentativebrandsofwineintermofmidandlow-end,whilenewproductsintroducedforbrandyincludes“KOYA1915”,mid-endChangyuFineBrandyof5starandlow-endPEGASE.Moreover,theCompanywillfurtherimproveauthorizedmanagementsystemofpartialsecondaryunitsandpromoterapid

developmentofauthorizedmanagementunits,establishasimulationprofitassessmentsystematalllevels,strengthengrossprofitrateassessment,andimprovesalesprofitability.Thesecondistoinsiston“originality”spirit,strengthenqualitymanagementandproducethebestproducts.TheCompanywillco-ordinatedomesticandforeignrawmaterialresources,increasethescaleofhigh-qualityrawmaterialbases,establishaquality“lifelong”investigationsystemforrawmaterialsuppliers,andfurtherimproverawmaterialquality.Besides,theCompanywillmakeintellectualizationandinformationtransformationofproductionsystem,strengtheneffortsontechnologicalinnovation,andcomprehensivelyimproveresearchanddevelopmentcapabilities.Furthermore,theCompanywillstrengthentheconstructionofwinemakerteam,establishqualityresponsibilitysystemofwinemakerforbrandsandwiththehelpofoverseasacquisitionofenterpriseplatforms,enhanceexchangesandlearningofwinemakers,improvebrewingtechniquelevel,andrealizebigbreakthroughsofkeylinkssuchasinternalqualityofproducts.Thethirdistofurtheroptimizestaffstructure,compressthescaleofproductionpersonnelandmanagementpersonnel.TheCompanywillimproveincentivemodel,adheretostruggleoriented,resultorientedandinlinewiththeprincipleof“SmallAdjustmentandBigIncentive”,andintensifytheincentivesofkeyemployeesandstrivers.Besides,theCompanywillfurtherestablishandimprovetalentteam,enhancethetrainingandintroductionofprofessionaltalents,createalearningorganization,vigorouslysupportandencourageinnovation,andenhancetheoverallenthusiasm,creativityandcombateffectivenessofstaff.Thefourthistostrictlycontrolthescaleofcapitalexpenditure,insistonnotinvestinginothernewprojectsexceptsafetyproduction,qualityimprovementandstartedprojects.TheCompanywillfurtherrevitalizecurrentassets,makefulluseofadvancedproductioncapacity,moderatelyeliminatebackwardproductioncapacity,optimizeproductioncapacitylayout,strivetoimproveproductionefficiencyandassetutilization,furtherreduceproductioncosts,andbettercreatevalueforshareholders.Thefifthistointensifyauditsupervision,improveinternalcontrolsystem,andpreventoperationalrisks.TheCompanywillpromotethereformofauditsystem,adjustthesetofauditinstitutions,improvedepartureaudit,andimprovetheevaluationsystemforcadres.Besides,theCompanywillintensifytheaudittopriceimplementation,grossprofitmargin,capitaloccupation,keyexpensesandauditoftechnicaltransformationprojects,andincreaseeffortstoeconomicresponsibilityinvestigation.Furthermore,theCompanywillimprovetheassessmentmethodsforresponsibilitysystemofleadinggroupsatalllevelsandstrengthenprofitoriented.Moreover,theCompanywillestablishandimprovethethree-in-onesupervisionsystemofauditing,financeanddisciplinecommitteeandachieve“check”and“prevent”simultaneouslytoreducemanagementrisks.10.TheCompany’sreceptionsofresearch,communication,visitandotheractivitiesActivityregistrationformforreceptionsofresearch,communication,visitandotheractivitiesduringthereportperiod?Available□Notavailable

Receptiontime	Receptionpattern	Typeofreceptionobject	Basicsituationindexofreception
July2nd,2018	Fieldresearch	Institution	YantaiChangyuPioneerWineCo.,Ltd.InvestorRelationsActivationRecordFormoftheCompany’s“InvestorRelationsInformation”onCNINFO(http://www.cninfo.com.cn/)
October20th,2018	Fieldresearch	Individual
October26th,2018	Fieldresearch	Individual
Timesofreception		3
Numberofinstitutionreception		7
Numberofindividualreception		21
Numberofotherobjectsreception		0
Whethertodisclose,revealandleakmaterialnonpublicinformation		No

V.Majorissues

1.TheCompany’sordinaryshareprofitdistributionandincreasingequitywithcapitalreserveOrdinaryshareprofitdistributionpoliciesespeciallypromulgation,implementationoradjustmentofcashdividendspoliciesduringthereportperiod?Available□NotavailableDeliberatedandpassedbythe2017Shareholders’MeetingconvenedonMay24

th

,2018bytheCompany,theCompany’s2017annualprofitdistributionschemeisshownasfollows:

basedontotal685,464,000shares(including453,460,800Asharesand232,003,200Bshares)uptoDecember31

st

,2017,theCompanywouldpaycashdividendtoallshareholdersregisteredontheshareregistrationday:CNY5incashpertenshares.ThistimetheCompanywouldneitherdispatchbonussharesnorincreaseequitywithcapitalreserve.Totalamountofshareshasnotchangedsincethedisclosureofthedistributionplantotheimplementationperiod.OnJune30

th

,2018,theCompanypublishedtheImplementationAnnouncementof2017AnnualEquityDistributiononChinaSecuritiesJournal,SecuritiesTimesandwww.cninfo.com.cn,determiningthattheshareregistrationdayandtheex-dividenddayofASharewasrespectivelyonJuly6

th

,2018andonJuly9

th

,2018;thelasttradingday,theshareregistrationdayandtheex-dividenddayofBSharewasrespectivelyonJuly6

th

,2018,onJuly9

th

,2018andonJuly11

th

,2018.ThistimethedispatchingobjectscontainallAShareshareholdersregisteredatChinaSecuritiesDepositoryandClearingCorporationLimitedShenzhenCompanyafterclosingofShenzhenStockExchangeintheafternoonofJuly6

th

,2018andallBShareshareholdersregisteredatChinaSecuritiesDepositoryandClearingCorporationLimitedShenzhenCompanyafterclosingofShenzhenStockExchangeintheafternoonofJuly11

th

,2018.Thisdispatchinghasalreadybeencompletedinmid-July2018.Theprofitdistributionschemeimplementedthistimeisconsistentwiththeschemedeliberatedandpassedbytheshareholders’meeting.Theimplementationoftheprofitdistributionschemeforthistimeisnotmorethantwomonthsaftertheshareholders'meetingpassingit.

Specialexplanationforthecashdividendspolicy
WhetheritisinaccordancewiththerequirementsoftheregulationintheArticlesofAssociationandtheresolutionofshareholders	Yes
Whetherthedistributionstandardandproportionisclearanddefinite	Yes
Whethertherelevantdecisionprocessandmechanismiscomplete	Yes
Whethertheindependentdirectorsperformtheirresponsibilitiesandplaytheroles	Yes
Whetherthesmallandmiddleshareholdershavethechancetoexpresstheiraddeputysandappeals,aswellastheirlawfulrightandinterestisinanenoughprotection	Yes
Whetheritislegalandtransparentfortheconditionandprocesswhileadjustingandamendingthecashdividendspolicy	Yes

TheCompany’sscheme(preliminaryscheme)ofordinaryshareprofitdistributionandincreasingequitywithcapitalreserveintherecentthreeyears(includingthereportperiod)TheCompany’sprofitdistributionschemein2016isasfollowing:Becausetheleftamountoflegalearnedsurplusreservereaches50%oftheregisteredcapital,whilemakingprofitdistribution,thelegalearnedsurplusreservewillbenotdrawn.BasedontheCompany’s685,464,000sharesattotaluptoDecember31

st

,2016,weplantopayCNY5incashasdividendsforeverytenshares(includingtax)totheCompany’sallshareholders,totalinguptoCNY342,732,000accountingfor34.89%ofthenetprofitCNY982,460,488attributabletotheshareholdersoftheparentcompanyintheconsolidatedstatement,theretainedandundistributedprofitofCNY639,728,488willbereservedforthedistributionofnextyear.TheCompany’sprofitdistributionschemein2017isasfollowing:Becausetheleftamountoflegalearnedsurplusreservereaches50%oftheregisteredcapital,whilemakingprofitdistribution,thelegalearnedsurplusreservewillnotbedrawn.BasedontheCompany’s685,464,000sharesattotaluptoDecember31

st

,2017,weplantopayCNY5incashasdividendsforeverytenshares(includingtax)totheCompany’sallshareholders,totalinguptoCNY342,732,000,accountingfor33.22%ofthenetprofitCNY1,031,695,056attributabletotheshareholdersoftheparentcompanyintheconsolidatedstatement,theretainedandundistributedprofitofCNY688,963,056willbereservedforthedistributionofnextyear.TheCompany’sprofitdistributionschemein2018isasfollowing:Becausetheleftamountoflegalearnedsurplusreservereaches50%ofregisteredcapital,whilemakingprofitdistribution,thelegalearnedsurplusreservewillnotbedrawn.BasedontheCompany’s685,464,000sharesattotaluptoDecember31

st

,2018,weplantopayCNY6incashasdividendsforeverytenshare(includingtax)totheCompany’sallshareholders,totalinguptoCNY411,278,400accountedfor39.45%ofnetprofitsCNY1,042,632,929attributabletoshareholdersofparentcompanyintheconsolidatedstatements.TheretainedandundistributedprofitofCNY631,354,529willbereservedfordistributioninthenextyear.TheCompany’sordinarysharecashdividendrecordinrecentthreeyears(includingthereportperiod)

Unit:CNY

Yearofdistribution	Amountofcashdividend(includingtax)	Netprofitbelongingtothelistedcompany’sshareholdersintheconsolidatedstatementofthedistributionyear	Proportioninthenetprofitbelongingtothelistedcompany’sshareholdersintheconsolidatedstatement(%)	Amountofcashdividends(eg.sharesbuy-back)inotherways	Proportionofcashdividendsinotherways	Amountofcashdividend(includingotherways)	Proportion(includingotherways)inthenetprofitbelongingtothelistedcompany’sshareholdersintheconsolidatedstatement(%)
2018	411,278,400.00	1,042,632,929.00	39.45%	0.00	0.00%	411,278,400.00	39.45%
2017	342,732,000.00	1,031,695,056.00	33.22%	0.00	0.00%	342,732,000.00	33.22%
2016	342,732,000.00	982,460,488.00	34.89%	0.00	0.00%	342,732,000.00	34.89%

Duringthereportperiod,theCompanyearnedprofit,theprofitoftheparentcompanythatcouldbedistributedtoordinaryshareshareholderswaspositivebutwithoutproposingordinarysharecashdividenddistributionpreliminaryscheme.□Available?Notavailable2.TheCompany’spreliminaryschemeofprofitdistributionandpreliminaryschemeofincreasingequitywithcapitalreserveforthereportperiod?Available□Notavailable

Numberofsendingbonussharespertenshares(share)				0
Numberofdividendpayoutpertenshares(CNY)(includingtax)				6
Numberoftransferringpertenshares(share)				0
Thecardinalnumberofthecapitalstocksforthepreliminarydistributionscheme(share)				685,464,000
Totalcashdividenddistribution（CNY）(includingtax)				411,278,400
Amountofcashdividends(eg.sharesbuy-back)（CNY）inotherways				0
Totalcashdividenddistribution（CNY）(includingotherways)				411,278,400
Attributableprofit（CNY）				1,042,632,929
Theproportionofcashdividenddistributioninthetotalprofitdistribution(includingotherways)				100%
Cashdividenddistributionthistime
IftheCompany’sdevelopmentisingrowthstageandmajorcapitalexpenditureisarranged,whilemakingprofitdistribution,theproportionofcashdividendsshouldtakesupnolessthan20%inthisprofitdistribution.
Detailedexplanationforthepreliminaryschemeofprofitdistributionorincreasingequitywithcapitalreserve
Accordingtoregulationof157thitemintheArticlesofAssociation,whichisthat“theCompanycandistributedividendseitherincashorbystock,theprofittobedistributedeachyearisnotlessthan25%ofthedistributableprofitrealizedinthesameyearandtheaccumulatedsumofprofittobedistributedincashinthelastthreeyearsisnotlessthan30%oftheyearlyaveragedistributableprofittoberealizedinthelastthreeyears”.Meanwhile,consideringthelargeamountonthecapitalexpenditurein2019,undertheconditionofnotinfluencingthenormalproductionandoperation,theCompanyputforwardpreliminaryschemeonprofitdistributionin2018asfollowing:Becausetheleftamountoflegalearnedsurplusreservereaches50%oftheregisteredcapital,whilemakingprofitdistribution,thelegalearnedsurplusreservewillnotbedrawn.ThenbasedontheCompany’s685,464,000sharesattotaluptoDecember31st,2018,weplantopayCNY6incashasdividendsforeverytenshares(includingtax)totheCompany’sall

3.Implementationofcommitments(1)CommitmentsthattheCompany’sactualcontrollers,shareholders,relatedparties,acquirersandtheCompanyandotherrelatedcommitmentpartieshaveimplementedduringthereportperiodandhavenotimplementeduptotheendofthereportperiod?Available□Notavailable

stockholders,totalinguptoCNY411,278,400,accountingfor39.45%ofthenetprofitCNY1,042,632,929attributabletotheshareholdersoftheparentcompanyintheconsolidatedstatement;theretainedundistributedprofitofCNY631,354,529willbereservedforthedistributionofnextyear.Thecashdividenddistributedtoshareholdersofdomesticlistedforeignshares(Bshare)ispaidinHongkongdollarconvertedbasedonthemiddleratebetweenCNYandHongkongdollarissuedbythePeople’sBankofChinaonthefirstworkingdayaftertheresolutiondateof2018shareholders’meeting.

Commitments

Commitments	Commitmentparty	Commitmenttype	Commitmentcontent	Commitmenttime	Commitmentperiod	Implementation
Commitmentsatsharereform
Commitmentsmadeinacquisitionreportorequitychangesreport
Commitmentsatassetrestructuring	－		－		－	－
Commitmentsattheinitialpublicofferingorrefinancing	YantaiChangyuGroupCo.Ltd.	Solvehorizontalcompetition	Non-horizontalcompetition	May18th,1997	Forever	Hasbeenperformingstrictly
	YantaiChangyuGroupCo.,Ltd.	Cleartheuseoftrademarkroyalty	AccordingtoTrademarkLicenseContract,thetrademarkroyaltyofChangyuandothertrademarkspaidbytheCompanytoYantaiChangyuGroupCo.,LtdeveryearismainlyusedforadvertisingChangyuandothertrademarksandthiscontract	May18th,1997	Forever	AccordingtoTrademarkLicenseContract,thetrademarkusefeeannuallypaidbytheCompanytoChangyuGroupshallbemainlyusedbyChangyuGrouptopublicizetrademarksandcontractproducts.Except2013to2017duringwhichthecommitmentwasnotstrictlyperformed,YantaiChangyuGroupCo.,Ltd.has

		productsbyYantaiChangyuGroupCo.,Ltd.		beenperformingitscommitment.
Equityincentivecommitments
CommitmentsatmiddleandsmallshareholdersoftheCompany
Commitmentundertimelyimplementationornot	No
Whetherornottohavespecificreasonsoftheunimplementedcommitmentandnextsteps	AccordingtotTrademarkLicenseContract(hereafterreferredtoas“theContract”),ChangyuGrouppromisesthatthetrademarkusefeeannuallypaidbytheCompanytoChangyuGroupshallbemainlyusedbyChangyuGrouptopublicizetrademarksandcontractproducts.Butabove-mentioned‘mainly’isnotaspecificnumber,whichiseasytocausedivergenceduetodifferentunderstandingandleadstoproblemappearanceduringtheimplementationprocess.From2013to2017,ChangyuGroupcollectedatotalofCNY420,883,902trademarkusefee,ofwhich51%wasusedtopublicizetrademarksincludingChangyuandcontractproductswithamountofCNY214,650,790.TheamounthasbeenusedtopublicizetrademarksincludingChangyuandcontractproductsisCNY50,025,181,withabalanceofCNY164,625,609.In2018and2019,thetrademarkusefeecollectedof2017and2018isCNY155,623,907,ofwhich51%isusedtopublicizetrademarksincludingChangyuandcontractproductswithamountofCNY79,368,193.TheamounthasbeenusedtopublicizetrademarksincludingChangyuandcontractproductsisCNY12,225,187,withabalanceofCNY67,143,006.Since2013,theaccumulatedbalanceofChangyuGroupusingtopublicizetrademarksincludingChangyuandcontractproductsisCNY231,768,615.ChangyuGrouppromisesthatthefour-yeartrademarkusefeefrom2019to2022willbeusedforoffset.Ifinsufficient,theshortfallwouldbefilledinonetimein2023.Ifthereisanyexcess,theexcessportionofthetrademarkusefeewouldbecollectedfromtheyearwithexcessoccurrence.IfChangyuGroupisnotabletoimplementtheabove-mentionedcommitmentowingtovariousreasons,theCompanywilltimelysuperviseandurgeChangyuGrouptofulfillitscommitmentandrequestChangyuGrouptoraisefundsthroughbankloaning,assetssalesandequitysalesetcinordertoimplementthecommitment.

(2)TheCompanyshouldmakeastatementontheachievedoriginalprofitforecastofassetsorprojectsanditsreasonifthereisprofitforecastofCompany’sassetsorprojectsandthereportperiodisstillintheprofitforecastperiod□Available?Notavailable4.Non-businesscapitaloccupyingoflistedcompanybycontrollingshareholderanditsrelatedparties

□Available?NotavailableTherearenonon-businesscapitalsoccupyingoflistedcompanybycontrollingshareholderanditsrelatedpartiesduringthereportperiod.5.ExplanationofNon-standardAuditReportgivenbyaccountingfirminthereportperiodfromboardofdirectors,boardofsupervisorsandindependentdirectors(ifhave)□Available?Notavailable6.Comparedwiththelastyear’sfinancialreport,explanationforthechangesofaccountingpolicy,accountingestimationandaccountingmethod□Available?NotavailableThereisnosituationforthechangesofaccountingpolicy,accountingestimationandaccountingmethod.7.Thesituationexplanationforthecorrectionofmajoraccountingerrorswhichneedtoberetrospectandrestatedduringthereportperiod□Available?NotavailableThereisnosituationforthecorrectionofmajoraccountingerrorswhichneedtoberetrospectandrestated.8.Comparedwiththelastyear’sfinancialreport,explanationforthechangesoftheconsolidatedstatementsscope?Available□NotavailableAccordingtoShareSale&PurchaseAgreementsignedonDecember5

th

,2017betweentheCompanyandshareholdersofKilikanoonEstatePtyLtd,theCompanyacquired80%equityofKilikanoonEstatePtyLtdwiththepriceofAUD20,860,825(equivalenceCNY107,194,420)to.TheCompanyhascompletedequitytransferonJanuary18

th

,2018,obtainingcontrolrightsoffinanceandbusinesspolicyforKilikanoonEstatePtyLtd.Duringthereportperiod,thiscompanyhasbeenincludedinthescopeofconsolidatedstatements.9.TheappointmentanddismissalofcertifiedpublicaccountantsCurrentlyappointedaccountingfirm

Domesticaccountingfirmname

DeloitteHuaYongCertifiedPublicAccountants

	Firm(specialgeneralpartnership)
Remunerationfordomesticaccountingfirm(CNY‘0000)	198
Consecutiveperiodfortheauditserdeputysofdomesticaccountingfirm	6
Nameofcertifiedpublicaccountantfortheauditserdeputysofdomesticaccountingfirm	XieYanfeng,LiYangang
Consecutiveperiodforthecertifiedpublicaccountant’sauditserdeputysofdomesticaccountingfirm	－
Overseasaccountingfirmname(ifhave)	0
Remunerationforoverseasaccountingfirm(CNY‘0000)(ifhave)	0
Consecutiveperiodfortheauditserdeputysofoverseasaccountingfirm(ifhave)	－
Nameofcertifiedpublicaccountantfortheauditserdeputysofoverseasaccountingfirm(ifhave)	－
Consecutiveperiodforthecertifiedpublicaccountant’sauditserdeputysofoverseasaccountingfirm(ifhave)	－

Whetherornottodismisstheaccountingfirmduringthereportperiod□Yes?NoToemployinternalcontrolauditaccountingfirms,financialadviserorsponsor.□Available?Notavailable10.Faceofsuspensionandterminationoflistingafterthedisclosureofannualreport□Available?Notavailable11.Bankruptcyreorganization□Available?NotavailableThereisnobankruptcyreorganizationduringthereportperiod.12.Materiallitigationandarbitration□Available?NotavailableTherearenomateriallitigationandarbitrationduringthereportperiod.

13.Penaltyandrectification□Available?NotavailableTherearenopenaltiesorrectificationsduringthereportperiod.14.CreditoftheCompany,holdingshareholdersandactualcontrollers□Available?Notavailable15.ImplementationoftheCompany’sequityinventiveplan,employeestockownershipplanorotheremployeeincentivemeasures□Available?NotavailableTherearenoimplementationoftheCompany’sequityinventiveplan,employeestockownershipplanandotheremployeeincentivemeasuresduringthereportperiod.16.Significantrelatedtransactions(1)Relatedtransactionsinrelationtodailyoperations?Available□Notavailable

(2)Relatedtransactionsinrelationtoacquisitionandsalesofassetsorequity□Available?NotavailableTherearenorelatedtransactionsinrelationtoacquisitionorsalesofassetsorequityduringthereportperiod.

Relatedparty

Relationship

Type

Content

Pricingprinciple

Price

Amount(CNY‘0000)

Proportionaccountingforamountofsimilartransactions

Approvedtransactionquota(CNY‘0000)

Whetherexceedapprovedtransactionquota

Clearingform

Availablemarketpriceofsimilartransactions

Disclosuredate

Disclosureindex

YantaiShenmaPackagingCo.,Ltd.

Controlledbythesameparentcompany

Purchaseandcommissionprocessing

Purchaseandcommissionprocessingpackingmaterials

Agreementpricing

Determinedbyagreement

17,324

9.08%

18,000

No

Cash

No

April23rd,2018

-

YantaiChangyuGroupCo.Ltd.

Parentcompany

Licenseduseofintangibleassets

Licenseduseoftrademarkandpatent

Agreementpricing

Determinedbyagreement

7,398

100.00%

7,600

No

Cash

No

April23rd,2018

-

Total

-

-

24,722

--

25,600

-

-

-

-

-

Detailsofthereturnoflargesales

No

Actualperformanceoftheestimatedtotalamountfordailyoperationsrelatedtransactionsbycategorythatwilloccurduringthisperiod.(ifhave)

No

Reasonforthedeferencebetweentransactionpriceandmarketreferenceprice(ifavailable)

Notavailable

(3)Relatedtransactionsinrelationtocommonforeigninvestment□Available?NotavailableTherearenorelatedtransactionsinrelationtocommonforeigninvestmentduringthereportperiod.(4)Relatedcurrentcreditanddebttransactions?Available□NotavailableWhetherornotexistingnon-operatingrelatedcreditanddebttransactions□Yes?NoTherearenonon-operatingrelatedcreditanddebttransactionsduringthereportperiod.(5)Othermajorrelatedtransactions□Available?NotavailableTherearenoothermajorrelatedtransactionsduringthereportperiod.17.Majorandimportantcontractsandexecutionresults(1)Trusteeship,contractandleaseholdissues?Trusteeshipsituation□Available?NotavailableThereisnotrusteeshipsituationduringthereportperiod.?Contractsituation?Available□NotavailableContractsituationdescriptionDuringthereportperiod,abouttheCompany’scontractoperationsituation,pleasesee“1.ThestructureofEnterprisegroup”inAnnex8“Rightsandinterestsofothersubject”inthefinancialreportofthisreport.ProjectingainsandlossesfortheCompanytoachievemorethan10%ofthetotalprofit□Available?NotavailableTherearenocontractprojectsingainsandlossesfortheCompanytoachievemorethan10%ofthetotalprofitduringthereportperiod.?Leaseholdsituation?Available□Notavailable

LeaseholdsituationdescriptionOnJanuary1

st

,2017,theCompanyrenewedtheSpaceLeaseAgreementwiththecontrollingshareholderChangyuGroup.TheCompanyleasedthespacewith15196.94squaremeterslocatedat174ShihuiyaoRoad,ZhifuDistrict,YantaiCity.TherentperyearisCNY1.4645millionwitharentalperiodof5yearsfromJanuary1

st

,2017toDecember31

st

,2021.OnJanuary1

st

,2017,theCompany’ssubordinateSales&MarketingCo.ofYantaiChangyuPioneerWineCompanyLimited.BrandSalesDepartmentrenewedtheSpaceLeaseAgreementwiththecontrollingshareholderChangyuGroup,leasingthespacewith42552.83squaremeterslocatedat1JichangRoad,ZhifuDistrict,YantaiCityandthespacewith3038squaremeterslocatedat56DamaRoad,ZhifuDistrict,YantaiCity,whichareallunderthenameofcontrollingshareholder.TherentoftheabovespacesperyearisCNY4.3935millionwitharentalperiodof5yearsfromJanuary1st,2017toDecember31

st

,2021.OnJuly1

st

,2017,thiscompanysignedahouse-leasingcontractwithYantaiShenmaPackagingCompanyLimited.Accordingtothiscontract,sinceJuly1

st

,2017,thiscompanyleasedpropertytoYantaiShenmaPackagingCompanyLimitedforabusinesspurposewiththeannualrentofCNY1,626,880.ThiscontractexpiresonJune30

th

,2022.Forotherleaseholdsituation,pleaserefertofinancialreport.notes.ProjectingainsandlossesfortheCompanytoachievemorethan10%ofthetotalprofit□Available?NotavailableTherearenoleaseholdprojectsingainsandlossesfortheCompanytoachievemorethan10%ofthetotalprofitduringthereportperiod.

(2)Majorguarantee

?Available□Notavailable?Guaranteesituation

Unit:CNY’0000

ExternalguaranteeoftheCompanyanditssubsidiaries（excludingguaranteetosubsidiaries）
Guaranteeobjectname	Disclosuredateofrelatedannouncementaboutguaranteequota	Guaranteequota	Actualdateofoccurrence(dateofagreement)	Actualguaranteeamount	Guaranteetype	GuaranteePeriod	Whetherornotcompleteimplementation	Whetherornotbelongtorelated-partyguarantee
YantaiEconomicandTechnologicalDevelopmentZoneManagementCouncil.	2016.12.22	34160	2016.12.21	34160	Mortgage;Pledge	10years	No	No
Totaloftheexternalguaranteequotaapprovedduringthereportperiod(A1)		0		Totaloftheactualexternalguaranteeamountduringthereportperiod(A2)		0
Totaloftheexternalguaranteequotaapprovedbytheendofthereportperiod(A3)		34160		Balanceoftheactualexternalguaranteebytheendofthereportperiod(A4)		34160
GuaranteesituationsbetweentheCompanyandsubsidiaries
Guaranteeobjectname	Disclosuredateofrelatedannouncementaboutguaranteequota	Guaranteequota	Actualdateofoccurrence(dateofagreement)	Actualguaranteeamount	Guaranteetype	GuaranteePeriod	Whetherornotcompleteimplementation	Whetherornotbelongtorelated-partyguarantee
Sales&MarketingCompanyofYantaiChangyu	2016.10.31	10,000	2016.11.05	10,000	Jointliabilityassurance	2years	No	Yes

PioneerWineCompanyLimited
YantaiChangyuPioneerWineCompanyLimited	2016.12.22	11,984	2016.12.21	11,984		Mortgage;Pledge	10years	No	Yes
YantaiChangyuWineResearchandDevelopmentCompanyLimited	2016.12.22	72,176	2016.12.21	72,176		Jointliabilityassurance;Mortgage	10years	No	Yes
KilikanoonEstatePtyLtd	2017.12.12	7100	2018.01.09	7100		Jointliabilityassurance	1year	No	Yes
Totaloftheguaranteequotaapprovedtosubsidiariesduringthereportperiod(B1)		0		Totaloftheactualguaranteeamountforsubsidiariesduringthereportperiod(B2)			7,100
Totaloftheguaranteequotaapprovedtosubsidiariesbytheendofthereportperiod(B3)		89,276		Balanceoftheactualguaranteeforsubsidiariesbytheendofthereportperiod(B4)			89,276
Guaranteesituationsbetweensubsidiaries
Guaranteeobjectname	Disclosuredateofrelatedannouncementaboutguaranteequota	Guaranteequota	Actualdateofoccurrence(dateofagreement)	Actualguaranteeamount		Guaranteetype	GuaranteePeriod	Whetherornotcompleteimplementation	Whetherornotbelongtorelated-partyguarantee
HaciendaYVinedosMarquesDelAtrio.SL	2016.04.29	3,502	2015.10.08	3,502		Mortgage;	Longterm	No	No
IndomitaWineCompanyChile,SpA	2018.04.23	1,986	2018.04.20	1,986		Mortgage;	Longterm	No	No
Totaloftheguaranteequotaapprovedtosubsidiariesduringthereportperiod(C1)		0		Totaloftheactualguaranteeamountforsubsidiariesduringthereportperiod(C2)			5,488
Totaloftheguaranteequotaapprovedtosubsidiariesbytheendofthereportperiod(C3)		5,488		Balanceoftheactualguaranteeforsubsidiariesbytheendofthereportperiod(C4)			5,488
TotalguaranteeamountoftheCompany（Totalofabovethreemajoritems）
Totaloftheapprovedguaranteequotaduringthereportperiod（A1+B1+C1）		0		Totaloftheactualguaranteeamountduringthereportperiod（A2+B2+C2）			12,588
Totaloftheapprovedguaranteequotabytheendofthereportperiod（A3+B3+C3）		128,924		Balanceoftheactualguaranteebytheendofthereportperiod（A4+B4+C4）			128,924
Theproportionofactualtotalguaranteeamount(A4+B4+C4)accountingfortheCompany’snetasset				13.42%
Among:
Theamountofguaranteeforshareholders,actualcontrollersandtheirrelatedparties（D）					0
Theamountofdebtguaranteefortheguaranteedobjectswhoseasset-liabilityratioismorethan70%directlyorindirectly（E）					0
Totalamountofguaranteeofthepartthatexceeds50%ofnetassets（F）					0
Totalamountoftheabove-mentionedthreeitems（D+E+F）					0
Explanationforundueguaranteesthathavehappenedwarrantyliabilityor					No

maytakejointpaybackliabilitiesduringthereportperiod(ifhave)
Explanationforviolatingdueprocesstoprovideexternalguarantee(ifhave)	No

SpecificexplanationonadoptingcomplexguaranteetypeNo.

?Illegalexternalguarantee□Available?NotavailableThereisnoillegalguaranteesituationduringthereportperiod.(3)Entrustingotherstomanagecashassets?Financialmanagemententrustment□Available?NotavailableThereisnofinancialmanagemententrustmentduringthereportperiod.?Loanentrustment□Available?NotavailableThereisnoloanentrustmentduringthereportperiod.

(4)Otherimportantcontracts

□Available?NotavailableTherearenootherimportantcontractsduringthereportperiod.18.SocialResponsibility

(1)SocialresponsibilityperformancePleasereferto2018AnnualSocialResponsibilityReportdisclosedonSecuritiesTimes,ChinaSecuritiesNewspaperandwww.cninfo.com.cnbytheCompany.(2)Targetedpovertyalleviationsocialresponsibilityperformance①TargetedpovertyplanTheCompanyhasreachedthemutualagreementwithZhuqiaoTownPartyCommitteeGovernmentandDaLangyaVillageCommitteetoestablishprofessionalgrapecooperative.Itplanstohelptoconducttheconstructionof100muofvineyardperyearfrom2019to2021withatotalareaof300mandalsotosigngrapepurchasecontractinordertohelplocalvillagerstogetridofpovertyandbecomebetteroff.②SummaryofannualtargetedpovertyRelatedleadersoftheCompanyvisitedthevillagethreetimes,heldmeetingsthreetimesandassistedtodrillthreewells.③TargetedpovertyeffectivenessTheCompanyhascompletedinitialpreparationworkoftargetedpovertyeffectivenessforDaLangyaVillage.④SubsequenttargetedpovertyplanNo(3)EnvironmentalprotectionrelatedsituationWhetherthelistedcompanyanditssubsidiariesbelongtomajorpolluterspublishedbytheenvironmentalprotectiondepartment□Available?NotavailableThemainlypollutantoftheCompanyisthesewagegeneratedintheproductiveprocess,whichhasbeendischargedwithreachedstandards.Thereisnopollutionsituationoccurredduringthisreportperiod.19.OtherMajorissues□Available?NotavailableTherearenoothermajorissuesneedtobeexplainedduringthereportperiod.20.MajorissuesofCompany’ssubsidiaries□Available?Notavailable

VI.ChangesinSharesandtheShareholders’Situation

1.Changesinshares

(1)Changesinshares

Unit:share

	Amountbeforethischange		Change(+,-)					Amountafterthischange
	Amount	Percentage%	Allotnewshare	Distributebonusshare	Transferothercapitaltosharecapital	others	Subtotal	Amount	Percentage%
1、Unrestrictedshares	685,464,000	100.00%						685,464,000	100.00%
(1)、Ashares	453,460,800	66.15%						453,460,800	66.15%
(2)、Bshares	232,003,200	33.85%						232,003,200	33.85%
2、Totalshares	685,464,000	100.00%						685,464,000	100.00%

Causeofsharechange□Available?NotavailableApprovalofsharechange□Available?NotavailableTransferofchangedshares□Available?NotavailableImplementationprogressofsharebuy-back

□Available?NotavailableImplementationprogressofreducingholdingrepurchasedsharethroughthewayofcentralizedbidding□Available?NotavailableTheinfluenceofsharechangeonthefinancialindicatorssuchasbasicearningspershare,dilutedearningspershareofthelatestyearandthelatestperiod,netassetpersharebelongingtotheCompany’scommonshareholders,etc.□Available?NotavailableOthercontentstheCompanythinksnecessaryorsecuritiesregulatorydepartmentsasktomakepublic.□Available?Notavailable(2)Changesinrestrictedshares□Available?Notavailable2.Securitiesissuanceandlistingsituation(1)Securitiesissuance(excludepreferredshare)duringreportperiod□Available?Notavailable(2)ExplanationofchangeinCompany’stotalsharesandshareholdingstructureandchangeinCompany’sassetsandliabilitystructure□Available?Notavailable

(3)Currentemployeeshares

□Available?Notavailable3.Situationforshareholdersandtheactualcontrollers(1)ThenumberofshareholdersoftheCompanyandtheshareholdings

Unit：share

Totalshareholdersinthereportperiod	42,980	Totalnumberofshareholdersbytheendoflastmonthbeforethedisclosuredayoftheannualreport		45,104		Totalnumberofpreferredshareholderrecoveringvotingpowerbytheendofreportperiod(ifhave)(seenote8)		0		Totalnumberofpreferredshareholderrecoveringvotingpowerbytheendoflastmonthbeforethedisclosuredayoftheannualreport(ifhave)(seenote8)			0
Shareholdersholdingmorethan5%orthetop10shareholdersholdingsituation
NameofShareholders	Characterofshareholders		Percentage(%)		Shareshelduntiltheendofthereportperiod		Changesduringthereportperiod		Numberofrestrictedshares		Numberofunrestrictedshares	Pledgedorfrozen
												Sharestatus	Amount
YANTAICHANGYUGROUPCO.LTD.	Domesticnon-state-ownedlegalperson		50.40%		345,473,856						345,473,856		0
GAOLINGFUND,L.P.	Foreignlegalperson		3.08%		21,090,219						21,090,219		0
CHINA	State-ownedlegalperson		2.25%		15,440,794						15,440,794		0

SECURITIESFINANCECORP
BBHBOSS/AFIDELITYFD-CHINAFOCUSFD	Foreignlegalperson	2.22%	15,241,826		15,241,826		0
SHENWANHONGYUANSECURITIES(HONGKONG)LIMITED	Foreignlegalperson	1.22%	8,347,663		8,347,663		0
FIDELITYPURITANTRUST:FIDELITYSERIESINTRINSICOPPORTUNITIESFUND	Foreignlegalperson	0.89%	6,100,762		6,100,762		0
TAIKANGLIFEINSURANCELIMITEDLIABILITYCOMPANY--UNIT–LINKED--INDUSTRYCONFIGURATION	Domesticnon-state-ownedlegalperson	0.75%	5,159,757		5,159,757		0
GUOTAIJUNANSECURITIES(HONGKONG)LIMITED	Foreignlegalperson	0.74%	5,043,507		5,043,507		0
CENTRALHUIJIN	State-ownedlegalperson	0.69%	4,761,200		4,761,200		0

ASSETMANAGEMENTLIMITED

TAIKANGLIFEINSURANCELIMITEDLIABILITYCOMPANY-DIVIDEND-PERSONALDIVIDEND-019L-FH002SHEN

Domesticnon-state-ownedlegalperson

0.69%

4,746,954

4,746,954

0

Strategicinvestorsorlegalresultoftheplacementofnewsharestobecomeatop10shareholders(ifhave)(seenote3)

No

Theexplanationfortheassociatedrelationshipandaccordantaction

Amongthetop10shareholders,thereisassociatedrelationshipbetweenTaikangLifeInsuranceLimitedLiabilityCompany-Unit-linked-IndustryConfigurationandTaikangLifeInsuranceLimitedLiabilityCompany-Dividend-Personaldividend-019L-FH002Shen.YantaiChangyuGroupCompanyLimitedhasnoassociatedrelationshiporaccordantactionrelationshipwiththeother9listedshareholders,andtherelationshipamongtheothershareholdersisunknown.

Thetop10shareholderswithunrestrictedshares

NameofShareholders

Numberofunrestrictedshareshelduntiltheendoftheyear

Typeofshare

Typeofshare

Amount

YANTAICHANGYUGROUPCO.LTD.

345,473,856

A

345,473,856

GAOLINGFUND,L.P.

21,090,219

B

21,090,219

CHINASECURITIESFINANCECORP

15,440,794

A

15,440,794

BBHBOSS/AFIDELITYFD-CHINAFOCUSFD

15,241,826

B

15,241,826

SHENWANHONGYUANSECURITIES(HONGKONG)LIMITED	8,347,663	B	8,347,663
FIDELITYPURITANTRUST:FIDELITYSERIESINTRINSICOPPORTUNITIESFUND	6,100,762	B	6,100,762
TAIKANGLIFEINSURANCELIMITEDLIABILITYCOMPANY--UNIT–LINKED--INDUSTRYCONFIGURATION	5,159,757	A	5,159,757
GUOTAIJUNANSECURITIES(HONGKONG)LIMITED	5,043,507	B	5,043,507
CENTRALHUIJINASSETMANAGEMENTLIMITED	4,761,200	A	4,761,200
TAIKANGLIFEINSURANCELIMITEDLIABILITYCOMPANY-DIVIDEND-PERSONALDIVIDEND-019L-FH002SHEN	4,746,954	A	4,746,954
Theexplanationfortheassociatedrelationshipandaccordantactionofthetop10shareholderswithunrestrictedshares,thetheassociatedrelationshipandaccordantactionbetweenthetop10shareholderswithunrestrictedsharesandthetop10shareholders	Amongthetop10shareholders,thereistheassociatedrelationshipbetweenTaikangLifeInsuranceLimitedLiabilityCompany-Unit-linked-IndustryConfigurationandTaikangLifeInsuranceLimitedLiabilityCompany-Dividend-Personaldividend-019L-FH002Shen.YantaiChangyuGroupCompanyLimitedhasnoassociatedrelationshiporaccordantactionrelationshipwiththeother9listedshareholders,andtherelationshipamongtheothershareholdersisunknown.
Explanationforthetop10shareholderswhoinvolvedinfinancingactivitiesandstocktradingbusiness(ifhave)(seenote4)	Thetop10shareholdersdonotinvolveinfinancingactivitiesandstocktradebusiness.

WhetherornottheCompany’stop10commonshareholdersandshareholderswithunrestrictedsharestakeagreedrepurchasetradingduringthereportperiod□Yes?NoThereisnoagreedrepurchasetradingtakenbytheCompany’stop10commonshareholdersandshareholderswithunrestrictedsharesduringthereportperiod.(2)SituationforthecontrollingshareholdersoftheCompany

Propertyofholdingshareholders:PropertyofholdingmainbodyundefinedTypeofholdingshareholders:Legalrepresentative

Nameofcontrollingshareholder	Legalrepresentative	Establishmentdate	Organizationcode	Mainbusiness
YantaiChangyuGroupCo.Ltd.	ZhouHongjiang	1997.04.27	913706002656458244	Productionanddistributionofwine,healthyliquor,distilledliquorandnon-alcoholbeverages,plantingofagriculturalproductsandexportbusinessunderthescopeofpermission.
Equitysituationfortheotherdomesticlistedcompaniescontrolledorsharedbythecontrollingshareholdersduringthereportperiod	No.

Changesinthecontrollingshareholderduringthereportperiod□Available?NotavailableTherearenochangesinthecontrollingshareholderduringthereportperiod.(3)SituationfortheactualcontrollersoftheCompanyPropertyofactualcontrollers:domesticotherinstitutions;foreignotherinstitutionsTypeofactualcontrollers:Legalrepresentative

Nameofactualcontrollers	Legalrepresentative	Establishmentdate	Organizationcode	Mainbusiness
YantaiYuhuaInvestment	JiangHua	2004.10.28	76779294－7	Understatepermission,propertyinvestment,tenancyofmachineandfacility,

&DevelopmentCo.Ltd				wholesaleandretailofconstructionmaterial,chemicalproducts(chemicalhazardproductsexcluded),hardwareandelectronicalproducts,grapeplantation.
ILLVASaronnoHoldingSpa	AugustoReina	1984.07.25	－	Directlyorindirectlyconducttheproductionanddistributionoffoodproducts(alcoholicproductsincluded)aswellasindustrial,commercial,financialandserdeputyactivitiesofanyotherkindsthroughjoint-stockcompaniesandorganizations
InternationalFinanceCorporation	PhilippeLEHOUEROU	1956.07.25	－	InternationalFinanceCorporationisoneofthemembersofWorldBank,mainlydedicatedtoinvestmentinprivatesectorsofdevelopingcountrieswhileprovidingtechnicalsupportandconsultationserdeputy.Thecorporationisamultilateralfinancialinstitutionthatranksfirstintheworldintermsofprovidingcapitalstockandloanstodevelopingcountries.Itspurposeistopromotesustainableinvestmentsofprivatesectorsofdevelopingcountriesinordertoalleviatepovertyandimprovepeople’slife.
YantaiGuofengInvestmentHoldingsCo.,Ltd	RongFeng	2009.02.12	00426068-6	Operatingmanagementofstate-ownedpropertyright(stockright)authorizedbyState-ownedAssetsSupervisionandAdministrationCommissionofYantaiMunicipalGovernment;Financing,investmentandoperatingmanagementofgovernmentprojects,suchasstrategicinvestmentandindustrialinvestmentandsoon;Capitaloperation(includingacquisition,reintegrationandtransfer,etc)ofstate-ownedpropertyrightandstate-ownedstockrightwithinthescopeofauthorization;Venturecapitalinvestmentbusiness;Agencyofventurecapitalinvestmentbusinessofotherventureinvestmententerprisesorindividuals;Participationintheestablishmentofventurecapitalinvestmententerprisesandventurecapitalinvestmentmanagementconsultantinstitutions;Investmentandfinancingserdeputybusiness;Investmentandfinancingconsultantbusiness;OtherbusinessauthorizedbyState-ownedAssetsSupervisionandAdministrationCommissionofYantaiMunicipalGovernment.(Projectsneedtobe

		authorizedinaccordancewiththelawcouldcarryoutbusinessactivitiesonlyaftertheapprovalofrelevantdepartments)
Equitysituationfortheotherdomesticlistedcompaniescontrolledbytheactualcontrollerduringthereportperiod	No

Changesoftheactualcontrollersduringthereportperiod□Available?NotavailableTherearenochangesinactualcontrollersduringthereportperiod.

IntroductionforpropertyrightandcontrolrelationsbetweentheCompanyanditsactualcontrollers

ActualcontrollercontrolstheCompanythroughatrustorotherassetmanagementways□Available?Notavailable(4)Otherinstitutionalshareholdersholdingmorethan10%shares

□Available?Notavailable(5)Sharesreductionsituationsofholdingshareholders,actualcontrollers,restructuringsideandothercommitmentsubjects□Available?Notavailable

VII.RelatedSituationofPreferredShares

□Available?NotavailableTherearenopreferredsharesduringthereportperiod.

VIII.SituationforDirectors,Supervisors,SeniorExecutivesandStaff1.Changesinshareholdingsofdirectors,supervisorsandseniorexecutives

Name	Post	Status	Gender	Age	Beginningdateofthepost	Endingdateofthepost	Sharesheldatthebeginningoftheperiod	Increasedsharesduringtheperiod	Decreasedsharesduringtheperiod	Otherchangesofsharesheld	Sharesheldattheendoftheperiod
ZhouHongjiang	Chairman	presentincumbent	M	54	2002.05.20	2019.05.27	0	0	0	0	0
SunLiqiang	Director	presentincumbent	M	71	1997.09.18	2019.05.27	0	0	0	0	0
LengBin	Director	presentincumbent	M	56	2000.08.22	2019.05.27	0	0	0	0	0
SunJian	Generalmanager	presentincumbent	M	52	2006.03.22	2019.05.27	0	0	0	0	0
QuWeimin	DirectorandSecretarytotheBoardofDirectors	presentincumbent	M	61	1997.09.18	2019.05.27	0	0	0	0	0
ZhangMing	Director	presentincumbent	M	45	2016.05.26	2019.05.27	0	0	0	0	0
AugustoReina	Director	presentincumbent	M	78	2006.12.07	2019.05.27	0	0	0	0	0
AldinoMarzorati	Director	present	M	66	2006.12.07	2019.05.27	0	0	0	0	0

		incumbent
AntonioAppignani	Director	presentincumbent	M	80	2006.12.07	2019.05.27	0	0	0	0	0
WeiAnning	Director	presentincumbent	M	55	2017.06.15	2019.05.27	0	0	0	0	0
WangZhuquan	Independentdirector	presentincumbent	M	53	2014.05.23	2019.05.27	0	0	0	0	0
WangShigang	Independentdirector	Presentincumbent	M	53	2011.05.10	2019.05.27	0	0	0	0	0
LuoFei	Independentdirector	Presentincumbent	M	66	2016.09.23	2019.05.27	0	0	0	0	0
LiuYan	Independentdirector	Presentincumbent	F	45	2016.09.23	2019.05.27	0	0	0	0	0
GuoGuoqing	Independentdirector	Presentincumbent	M	56	2018.12.04	2019.05.27	0	0	0	0	0
KongQingkun	ChairmantotheBoardofSupervisors	presentincumbent	M	46	2013.05.14.	2019.05.27	0	0	0	0	0
ZhangLanlan	Supervisor	presentincumbent	F	49	2013.05.14.	2019.05.27	0	0	0	0	0
LiuZhijun	Supervisor	presentincumbent	M	38	2016.05.26	2019.05.27	0	0	0	0	0
YangMing	Deputygeneralmanager	Leavingthepost	M	60	1998.08.12	2018.02.28	0	0	0	0	0
LiJiming	Chiefengineer	presentincumbent	M	52	2001.09.14	2019.05.27	0	0	0	0	0
JiangHua	Deputygeneralmanager	presentincumbent	M	55	2001.09.14	2019.05.27	0	0	0	0	0

PengBin	Deputygeneralmanager	presentincumbent	M	52	2018.01.10	2019.05.27	0	0	0	0	0
JiangJianxun	Chieffinancialofficer	presentincumbent	M	52	2018.01.10	2019.05.27	0	0	0	0	0
PanJianfu	Generalmanagerassistant	presentincumbent	M	43	2018.04.19	2019.05.27	0	0	0	0	0
LiuShilu	Generalmanagerassistant	presentincumbent	M	44	2018.04.19	2019.05.27	0	0	0	0	0
XiaoZhenbo	Generalmanagerassistant	presentincumbent	M	42	2018.04.19	2019.05.27	0	0	0	0	0
Total	--	--	--	--	--	--	0	0	0	0	0

2.ChangesintheCompany’sdirectors,supervisorsandseniorexecutives?Available□Notavailable

Name	Position	Type	Date	Reason
SunLiqiang	Chairman	Leavingthepost	2017.12.08	Volunteertoresignaschairmanandnolongerserveaschairman;currentlyserveasdirectoroftheCompany
ZhouHongjiang	DeputyChairman	Leavingthepost	2018.01.10	Volunteertoresignasdeputychairman,nolongerserveasdeputychairmanandbeelectedaschairman;currentlyserveaschairmanoftheCompany
ZhouHongjiang	GeneralManager	Dismission	2018.01.10	Volunteertoresignasgeneralmanagerandnolongerserveasgeneralmanager;currentlyserveaschairmanoftheCompany
ZhouHongjiang	Chairman	Appointmentanddismission	2018.01.10	BeelectedaschairmanoftheCompany
LengBin	Deputygeneralmanager	Dismission	2018.01.10	Volunteertoresignasdeputygeneralmanagerandnolongerserveasdeputygeneralmanager;currentlyserveasdirectoroftheCompany
SunJian	Deputygeneralmanager	Appointmentanddismission	2018.01.10	Beappointedasgeneralmanageranddismissedfromthepostofdeputygeneralmanager;currentlyserveasgeneralmanageroftheCompany

PengBin	Deputygeneralmanager	Appointmentanddismission	2018.01.10	BeappointedasdeputygeneralmanagerandcurrentlyserveasdeputygeneralmanageroftheCompany
JiangJianxun	Chieffinancialofficer	Appointmentanddismission	2018.01.10	BeappointedaschieffinancialofficerandcurrentlyserveaschieffinancialofficerandfinancialmanageroftheCompany
GuoGuoqing	Independentdirector	Appointmentanddismission	2018.12.04	Beappointedasindependentdirector.

3.SituationforworkexperienceTheprofessionalbackground,mainworkexperiencesandpresentpositionsoftheCompany’sdirectors,supervisorsandseniorexecutives(1)MembersofBoardofDirectorsMr.ZhouHongjiang,male,54,Chinese,withdoctordegree,seniorengineer,wastherepresentativeofthe12

th

NationalPeople’sCongress,deputygeneralmanageroftheCompanyandgeneralmanageroftheSaleCompany.From20

th

May,2002to10

th

January,2018,heservedasdirector,deputychairmanandgeneralmanageroftheCompanyandconcurrentlydeputychairmanofChangyuGroup.Heistherepresentativeofthe13

th

NationalPeople’sCongress,chairmanoftheCompany,chairmanandpartysecretaryofChangyuGroupnow.Mr.SunLiqiang,male,71,Chinese,withcollegedegree,senioreconomist,wastherepresentativeofthe10

th

and11

th

NationalPeople’sCongress.From18

th

September,1997to

th

January,2018,heservedaschairmanoftheCompany,andconcurrentlychairmanandgeneralmanagerofChangyuGroup.HeisdirectoroftheCompanynow.Mr.LengBin,male,56,Chinese,withmasterdegree,senioraccountant,wasdeputysectionchiefandsectionchiefofYantaiAuditBureau,heservedasdirectoranddeputygeneralmanageroftheCompanyfrom15

th

June,2000to10

th

January,2018.HeisdirectoroftheCompany,andconcurrentlydeputypartysecretary,directorandgeneralmanagerofChangyuGroupnow.Mr.QuWeimin,male,61,Chinese,bachelorofengineering，senioreconomist,workedatYantaiCommissionforRestructuringtheEconomicSystemandResearchOfficeofYantaiGovernmentandhasmorethan20yearsofexperienceintheaspectofmacroeconomicstudyandenterpriseoperationandmanagement,hewasdeputygeneralmanageroftheCompany.HehasservedasdirectorandconcurrentlysecretarytotheboardofdirectorsoftheCompanysince18

th

September,1997.

Mr.ZhangMing,male,45,Chinese,withbachelordegree,seniorengineer,wasplannerofYantaiSyntheticLeatherGeneralFactory,planspecialistofbusinessdepartment,deputysectionchiefofplanandstatisticsectioninassetsmanagementdepartmentandsectionchiefofplanandstatisticsectioninassetsmanagementdepartmentinYantaiWanhuaSyntheticLeatherGroupCo.,Ltd,riskcontrolsectionchiefofYantaiGuofengInvestmentHoldingCo.,Ltd.andconcurrentlydirectoranddeputygeneralmanagerofYantaiGuoyuFinanceLeaseCo.,Ltd,deputygeneralmanagerandsecretarytotheboardofdirectorsofWanhuaEfficientTechnologyGroupCo.,Ltd.andgeneralmanagerofYantaiState-ownedAssetManagementCo.,Ltd.,chairmanofYantaiGuofengInvestmentHoldingCo.,Ltd.HeisdirectoroftheCompany.Mr.AugustoReina,male,78,Italian,isnowservingaschiefexecutiveofficerofseveralcompaniesincludingIllvaSaronnoHoldingSpAandIllvaSaronnoInvestmentSRL,memberoftheboardofdirectorsofBarberiniSpa,directorofFedervini(ItalianAlcoholsProductionandExportAssociation),directorofIstitutoDelLiquore(WineResearchInstitute),directorofAssovini(SicilyVinicultureandWineProductionAssociation)anddirectorofChangyuGroup.HehasbeendirectoroftheCompanysince27

th

April,2006.Mr.AldinoMarzorati,male,66,Italian,withbachelordegree,isnowthegeneralmanagerofIllvaSaronnoHoldingSpAanddirectoroftheboardofdirectorsofsomebranchesunderthegroupcompanyandthedirectorofChangyuGroup.HehasbeendirectoroftheCompanysince27

th

April,2006.Mr.AntonioAppignani,male,80,Italian,withbachelordegree,isdeputychairmanofItalianBusinessConsultationCommittee,chiefofProfessionalEthicsCommittee,teacherofvocationaltrainingcourseofIndustrialandCommercialConsultationCommittee,memberofEconomicandCommercialCommitteeofthepublicuniversity“G.DAnnunzio”andconcurrentlyservingasmemberoftheboardofdirectorsofdifferentcompaniesandmemberoftheboardofdirectorsofseveralcompaniesunderIllvaGroupandthedirectorofChangyuGroup.Mr.WeiAnning,male,Chinese,55,withdoctordegree,everservedasagriculturaleconomistoftheWorldBank,directorofNorthEastAsiaFood&AgribusinessResearchoftheRabobank,ChinaCEOoftheFortisBankBelgium,executivedeputypresidentoftheNewHopeGroup(Sichuan),presidentofShandongLiuheGroup,directorofHangzhouUnitedRuralCommercialBankCo.,Ltd,directorofXinjiangKuntaiGroupCo.,Ltd.,chairmanoftheShandongChinwhizGroup.Heisgoodatcorporategovernance,enterprisedevelopmentstrategyandequityinvestments.Now,heisservingasexecutivedirectorandgeneralmanagerofShanghaiGuevaFundManagementCo.,LtdCo.,Ltd,executivedirectorofbothNingxiaGuevaFundManagementCo.,LtdandNingboGuevaFundManagementCo.,Ltd,independentdirectorofDachanFood(Asia)Co.,Ltd,OrientSecuritiesCo.,LtdandFortuneSGFundManagementCo.,Ltd.,directorofJiangsuFinancialleasingCo.,Ltd.HeisservingasdirectoroftheCompany.Mr.WangShigang,male,53,Chinese,MBAandCertifiedPublicAccountant,isnowtheboardchairmanofShandongTianhengxinConstructionCostConsultationCo.Ltd..HepreviouslyservedasindependentdirectoroftheCompany.Heactsastheindependentdirectoragainfrom14

th

May,2013.Mr.WangZhuquan,male,53,Chinese,doctorofmanagement(accountancy),firstbatchofnationalaccountingacademicleadingpersonalsofFinancialDepartment,theentrantof

accountantmastercultivationprojectofFinancialDepartment,outstandingteacherofShandongprovince,GovernmentSpecialAllowanceexpert,actedasindependentdirectorfrom13

th

May,2010to12

th

May,2013.NowheistheprofessorandthedoctoralsupervisorsoftheOceanUniversityofChinaaswellasindependentdirectorofthesomelistedcompanieswhichcouldbeexemplifiedasQingdaoDoubleStarCo.,Ltd.HeactsastheindependentdirectoroftheCompanyagainfrom23

rd

May,2014.Mr.LuoFei,male,66,Chinese,withdoctordegree,visitingscholarofUniversityofToronto,doctoralsupervisors,GovernmentSpecialAllowanceexpert,firstbatchoftrans-centurysubject(academic)leadingpersonalsofFinancialDepartment.HesuccessivelyservedasthedeanofaccountingcollegeinZhongnanUniversityofEconomicsandthedeanofaccountingcollegeinZhongnanUniversityofEconomicsandLaw.Hefocusesonthestudyoffinancialaccounting,costaccounting,financialmanagement,andsoon.Hehasworkedincompaniesformanyyearsandhaspracticalworkingexperiencewithcompanies.NowheisservingasindependentdirectoroftheCompany.Ms.LiuYan,female,45,Chinese,withmasterdegree,washonoredasnationaloutstandinglawyerin2005.Hermainpracticeareasincludeissuingandlistingofdomesticandforeignstocks,mergerandacquisitionandforeigninvestment.ShenowisthepartnerofTianYuanLawFirmandservingasindependentdirectoroftheCompany.Mr.GuoGuoqing,male,56,Chinese,winnerofthespecialallowanceoftheStateCouncil.Heservedasacommitteememberofthe7

th

All-ChinaYouthFederation,committeememberofthe8

th

,9

th

and10

th

NationalCommitteeoftheChinesePeople'sPoliticalConsultativeConference,representativeofthe11

th

NationalPeople'sCongress,deputydeanofSchoolofBusinessAdministrationofRenminUniversityofChina,deputysecretarygeneralofZhuhaiMunicipalPeople'sGovernmentofGuangdongProvince,independentdirectorofChinaEverbrightBank,evaluationexpertoftheDepartmentofManagementScienceoftheNationalNaturalScienceFoundationofChina,associateeditoroftheJournalofChineseMarkingandindependentdirectorofChina-TinGroup.HecurrentlyservesasaprofessoranddoctoralsupervisorattheSchoolofBusinessofRenminUniversityofChina,directoroftheChinaMarketingResearchCenterofRenminUniversity,deputypresidentoftheChinaBusinessHistorySociety,directoroftheBrandProfessionalCommitteeoftheChinaBusinessHistorySociety,internationalresearcherofCorporateReputationCenterofTheUniversityofOxford,side-bardoctoraltutorandprofessorofPanyapiwatInstituteofManagement,consultantofChinaUniversityMarketingResearchAssociation,directorofGreeRealEstateandindependentdirectorofMinjiakefengInformationTechnologyCo.,Ltd,NanYueFund,ZhejiangFengrunBiotechCo.,Ltd,VatsLiquorChainStoreManagementJointStockCo.,Ltd.andLivzonPharmaceuticalGroupInc.HeservesasindependentdirectoroftheCompany.(2)MembersofboardofsupervisorsMr.KongQingkun,male,46,Chinese,MBAandeconomist,servedasthesectionmemberofproductiondepartmentinthehealthyliquorbranchoffice,clerkanddeputydirectoranddirectorofgeneralmanageroffice.Ms.ZhangLanlan,female,49,withbachelordegreeandeconomist,servedasdeputy-manageroftheCompany’simport/exportcompany,managerofimportdepartment.Shenowisdirectorofboardofdirectors’office.

Mr.LiuZhijun,male,38,Chinese,withbachelordegree,workedinforeignfundsectionofEconomyandTradeBureauinLongkoueconomicdevelopmentzone,servedasnewssectionmemberofpropagandadepartmentinLongkouMunicipalCommittee,memberofpropagandaandmassworksection,memberofplanningsection,deputydirectormemberofprogrammingdevelopmentandenterprisedistributionsection,deputydirectormemberanddeputychiefofprogrammingdevelopmentsection.HenowissupervisoroftheCompany.

(3)Otherseniorexecutives

Mr.SunJian,male,52,Chinese,MBA,servedasdeputygeneralmanageroftheCompanyfrom22

nd

March,2006to10

th

January,2018.HeservesasgeneralmanageroftheCompanyanddirectorofChangyuGroup.Mr.LiJiming,male,52,Chinese,withdoctordegree,applicationresearcher,hasbeenservingaschiefengineeroftheCompanysince14

th

September,2001andconcurrentlydirectorofChangyuGroup.Mr.JiangHua,male,55,Chinese,withmasterdegree,seniorengineer,hasbeenservingasdeputygeneralmanageroftheCompanysince14

th

September,2001.Mr.PengBin,male,52,MBA,seniorengineer,eversuccessivelyservedasdeputydirectorofwine-blendingworkshopanddirectorofwine-storageworkshopofBrandyCompanyunderYantaiChangyuGroupCompanyLimited,sectionchiefofTechnicalTransformationDepartmentandministerofInvestmentandDevelopmentDepartmentaswellasdeputygeneralmanagerofYantaiChangyuGroupCompanyLimited,generalmanagerassistantofYantaiChangyuPioneerWineCompanyLimited.HeservesasdeputygeneralmanageroftheCompany.Mr.JiangJianxun,male,52,Chinese,MBAandaccountant,servedasFinancialManageroftheCompanyfrom20

th

May,2002to10

th

January,2018.HeservesaschieffinancialofficeroftheCompany.

Postintheshareholder’scompany

?Available□Notavailable

Name	Shareholder’sCompany	Post	Beginningdateofthepost	Endingdateofthepost	Paidbyshareholder’scompanyornot
SunLiqiang	YantaiChangyuGroupCo.Ltd.	Chairmanandgeneralmanager	2013.10.08	2018.01.10	No
ZhouHongjiang	YantaiChangyuGroupCo.Ltd.	Deputychairman	2013.10.08	2018.01.10	No
ZhouHongjiang	YantaiChangyuGroupCo.Ltd.	Chairman	2018.01.10	2022.01.10	No
LengBin	YantaiChangyuGroupCo.Ltd.	Directorandgeneralmanager	2018.01.10	2022.01.10	Yes
LiJiming	YantaiChangyuGroupCo.Ltd.	Director	2013.10.08	2022.01.10	No
SunJian	YantaiChangyuGroupCo.Ltd.	Director	2013.10.08	2022.01.10	No
ZhangMing	YantaiChangyuGroupCo.Ltd.	Director	2013.10.08	2018.11.15	No
AugustoReina	YantaiChangyuGroupCo.Ltd.	Director	2013.10.08	2022.01.10	No
AldinoMarzorati	YantaiChangyuGroupCo.Ltd.	Director	2013.10.08	2022.01.10	No
AntonioAppignani	YantaiChangyuGroupCo.Ltd.	Director	2013.10.08	2022.01.10	No
WeiAnning	YantaiChangyuGroupCo.Ltd.	Director	2017.04.18	2022.01.10	No
Explanationforthepostintheshareholder’scompany	Mr.ZhouHongjiangservesasthepositionofchairmanintheshareholderscompanyfrom10thJanuary,2018to10thJanuary,2022.Mr.LengBinservesasthepositionofgeneralmanagerintheshareholderscompanyfrom10thJanuary,2018to10thJanuary,2022.

Postatothercompanies

?Available□NotAvailable

Name	Other’scompany	Postatothercompany	Beginningdateofthepost	Endingdateofthepost	Paidbyothercompanyornot
LengBin	YantaiChangyuZhongyaMedicine&HealthyLiquorCo.,Ltd	Directorandlegalrepresentative	2012.09.10		No
Explanationforthepostintheshareholder’scompany	No.

Disciplinaryactionstakenbysecuritiesregulatorsinrecent3yearstotheCompany’sdirectors,supervisorsandseniormanagementbothonthejobandleftduringthereportperiod□Available?Notavailable4.Salaryofdirectors,supervisorsandseniorexecutivesDecision-makingprocess,thebasisofdetermination,theactualpaymentofdirectors,supervisorsandseniorexecutivesThesalaryfortheindependentdirectorsispaidaccordingtotheresolutionofshareholders’meeting.Thesalaryforthechairman,directorswithadministrationduty,supervisors,managersandotherseniormanagementshouldbepaidonbasisoftheevaluationresultaccordingtotheProposalonAssessmentMethodsoftheCompany’sSeniorOfficers’Performancefrom2014to2017whichwaspassedduringtheBoardofDirectors’meeting.Salaryofdirectors,supervisorsandseniorexecutivesduringthereportperiod

Unit:CNY’0000

Name	Post	Gender	Age	Status	TotalrewardfromtheCompanybeforetax	WhethergetrewardfromrelatedpartiesoftheCompany
ZhouHongjiang	Chairman	M	54	presentincumbent	154.81	No
SunLiqiang	Director	M	71	presentincumbent	138.89	No
LengBin	Director	M	56	presentincumbent	0	Yes
SunJian	Generalmanager	M	52	presentincumbent	140.41	No
QuWeimin	DirectorandSecretarytotheBoardofDirectors	M	61	presentincumbent	94.31	No
ZhangMing	Director	M	45	presentincumbent	0	No
AugustoReina	Director	M	78	presentincumbent	0	No
AldinoMarzorati	Director	M	66	presentincumbent	0	No
AntonioAppignani	Director	M	80	presentincumbent	0	No
WeiAnning	Director	M	55	presentincumbent	0	No
WangZhuquan	IndependentDirector	M	53	presentincumbent	8	No
WangShigang	IndependentDirector	M	53	presentincumbent	8	No
LuoFei	IndependentDirector	M	66	presentincumbent	8	No
LiuYan	IndependentDirector	F	45	presentincumbent	8	No
GuoGuoqing	IndependentDirector	M	56	presentincumbent	0.67	No

KongQingkun	ChairmantotheBoardofsupervisors	M	46	presentincumbent	71.29	No
ZhangLanlan	supervisor	F	49	presentincumbent	21.06	No
LiuZhijun	supervisor	M	38	presentincumbent	0	No
YangMing	Deputy-generalmanager	M	60	leavingthepost	17.92	No
LiJiming	ChiefEngineer	M	52	presentincumbent	107.19	No
JiangHua	Deputy-generalmanager	M	55	presentincumbent	101.19	No
PengBin	Deputy-generalmanager	M	52	presentincumbent	105.17	No
JiangJianxun	Chieffinancialofficer	M	52	presentincumbent	106.84	No
PanJianfu	Generalmanagerassistant	M	43	presentincumbent	78.26	No
LiuShilu	Generalmanagerassistant	M	44	presentincumbent	48.32	No
XiaoZhenbo	Generalmanagerassistant	M	42	presentincumbent	91.88	No
Total	-	-	-	-	1,310.21	-

Theawardedequityincentivesforthedirectors,supervisorsandseniorexecutivesoftheCompanyduringthereportperiod□Available?Notavailable5.StaffoftheCompany(1)Staffnumber,specialtyconstitutionandeducationdegree

Incumbentstaffnumberofparentcompany(people)	1,339
Incumbentstaffnumberofmajorsubsidiarycompanies(people)	1,894
Totalincumbentstaff(people)	3,233

Totalstaffgettingpaidincurrentperiod(people)	3,233
Retiredstaffnumberwhoseexpensesareundertakenbyparentcompanyorsubsidiarycompanies(people)	0
Specialtyconstitution
Category	Numberofpeople(people)
Administrativestaff	263
Technicalstaff	165
Financialstaff	152
Productionstaff	1,000
Salesstaff	1,653
Total	3,233
Educationdegree
Category	Number(People)
Bachelorandabove	1,125
JuniorCollege	1,118
Technicalsecondaryschool	546
Seniorhighschoolandbelow	444
Total	3,233

(2)Remunerationpolicy

TheCompanybuildsandimprovestheremunerationandwelfaresystem,includingsalarysystem,incentivemechanism,socialsecurityandhealthinsuranceandsoon,tomakesurethatallstaffcouldbeinsured.Inaccordancewiththelaw,theCompanybuyssocialold-ageinsurance,medicalinsurance,occupationalinjuryinsurance,unemploymentinsuranceandmaternityinsurance,andpayhousingfundforstaff.Basedontheprincipleof“distributionaccordingtowork,equalpayforequalwork”,theCompanypaysthestaff’sremunerationtimely.Withtheincrease

oftheCompany’sprofitability,theCompanysteadilyimprovesthestaff’sremunerationandwelfare,andprovidesthecompetitivesalaryincomeanddevelopmentspaceofequalopportunityforstaff.

(3)Trainingplan

Inordertofurtherimprovetheemployees’comprehensivequalityandprofessionalskill,theCompanyplanstoinvestCNY3.02millionin2019foremployeetrainingplanwhichisshownasfollows:

①SeniorandMiddle-levelManagers1)GeneraltrainingEmployprofessionallecturerstothecompanyorthroughremotenetworkvideoforcentralizedlecturescouldbeasmethodsoftraining.Duringtheyear,fourtopicswillbearrangedformiddleandseniormanagementstaffonceforeachquarterandonetotwodaysforeachtraining.2)ProfessionaltrainingBasedontheirrespectivework,organizethemtoattendEntrepreneurHigh-endForumandSummitMeetingandgotodomesticandforeignsuccessfulenterpriseforvisitandstudy;attenduniversitycorrespondence,self-studyexamination,MBAorotherfurthereducationformasterdegree;organizeprofessionalmanagementcadres,toattendvocationalqualificationexaminationforprofessionalcertificate;toattendspecialtrainingatleasttwiceayear,suchassafety,technology,facility,finance,WSET,tourismetcwhichareorganizedbyspecialmanagementdepartment.②Marketingpersonnel1)GeneraltrainingIndependentlystudymarketingtextbooks,mainlyfocusingon‘Growth’,aswellastrainingmaterialsincludingthecompany’srelatedmanagementsystem,productionknowledge,salesresponsibilitysystemetc.2)ProfessionaltrainingProfessionallecturerswouldbeemployedtothecompanyorthroughremoteinternetvideostogivelecturesaboutsuccessfulliquorcases,currenteconomictrendresearchfordomesticandforeignwineindustryandothertopicinordertotaketrainingforpersonnelwhoselevelisorabovemanagerassistantincitymarketingmanagementcompanyonceaquarterandonedayforeachtime;takeclosedtrainingforcitymarketingmanageronhowtoimprovemarketingskillaswellasexecutiveforceofsalespolicyonceatthestartofeachmonthandonedayforeachtime.Forbusinessdirectorsandotherpersonneltakeacombinationtrainingmethodofhiringlecturersandgoingouttovisitforstudying,theycouldbetrainedsuccessfulmarketingcasesandmarketingmanagementconcepts.Thistrainingisconductedonceaquarterandonedayforeachtime.③Productionandmanagementpersonnelwhoselevelarebelowsectionchief1)GeneraltrainingSetcoursesthatareaimingatimprovingemployeemanagementability,innovationabilityandexecutiveability,hireaprofessionallectureroruniversityteachertoteachatthecompanytwotimesayearandonedaypercourse;attendcommon-sensegeneral

trainingincludingcompanyculture,regulatoryframeworkandvariousliquorproductsknowledge,reinforcetrainingintheaspectofhumanresourcesmanagement;independentlystudytrainingmaterialsprovidedbythecompany,suchasGrowthandEmployeeHandbook;attendoutdoorqualityexpansiontrainingonceayear.2)ProfessionaltrainingAttenduniversitycorrespondence,self-studyexamination,MBAorotherfurthereducationformasterdegree;attendvocationalqualificationexaminationforprofessionalcertificate;basedonpersonnelwork,attendspecialtrainingatleasttwiceayear,whichareorganizedbyspecialmanagementdepartment;fordifferenttypesofwork,theCompanywillorganizetoattendtrainingwhichcanimproveprofessionalskillandoperationlevel;technologybackboneswouldbeselectedtoattendoverseastrainingandlearningexchange.

(4)Laboroutsourcing

□Available?Notavailable

IX.CorporateGovernance

1.CurrentCorporateGovernanceSituationoftheCompany(1)Aboutshareholdersandshareholders’meetingTheCompanyhassetuptheDeliberationRulesofShareholders’Meeting,andconvenedtheshareholders’meetingsinstrictaccordancewithrequirementsofstandardopinionofshareholders’meeting,madethegreatefforttoprovideconvenientconditionsformoreshareholderstoparticipatetheshareholders’meeting,andensuredallshareholderstoenjoysameequityandwellexercisedtheirrights.TheCompanydrewgreatattentiontothecommunicationandexchangewithshareholders,activelyrespondedtheshareholders’inquiryandquestions,andwidelylistenedtothesuggestionsandcommentsfromshareholders.(2)AbouttheCompanyandholdingshareholderTheCompanyhasindependentpoweronbusinessandself-management,andalsobeindependentofitsholdingshareholderonbusiness,staff,assets,organizationandfinance.TheBoardofDirectors,BoardofSupervisors,managementteamandalsointernalorganizationsoperatedindependentlyintheCompany.TheholdingshareholderoftheCompanycouldregulateitsactivities,nootherbehaviorwasfoundthatsurpassedtheshareholders’meetingtodirectlyorindirectlyinterferewiththedecision-makingandbusinessactivitiesoftheCompany,oroccupiedanyassetsoftheCompanywhichdamagedtheCompany’sandmedium&smallshareholders’interests.(3)AboutthedirectorandboardofdirectorsTheCompanystrictlyappointsalldirectorsinlightofCompanyLawandArticlesofAssociations.Thequalificationsofalldirectorsareinlinewiththerequirementsoflawsandregulations.InaccordancewiththerequirementsofCorporateGovernanceGuidelines,theCompanyhascarriedoutthecumulativevotingsystem.Atpresent,theCompanyhasfourindependentdirectorsaccountingforaboutonethreeofalldirectors,andthenumberandcompositionofboardofdirectorswasbasicallyinaccordwithrequirementsofregulationsandalsoArticlesandAssociations.AlldirectorsoftheCompanycouldworkinthelightofregulationsincludingRulesofBoardofDirectors’ProcedureandWorkingRulesforIndependentDirectors,punctuallyattendedboardofdirectors’andshareholders’meetings,activelytookpartinrelevantknowledgetraining,knewverywellaboutthelawsandregulationsconcerned,hadadeepknowledgeandlongexperienceofpractitioners,andperformedtheirdutiesaccordingtothelawandregulations.TheBoardofDirectorsconvenedthemeetingsinaccordancewithrelatedrulesandregulations.(4)AboutsupervisorandboardofsupervisorsTheCompanystrictlyelectedallsupervisorsinlightofCompanyLawsandArticlesofAssociations.Atpresent,boardofsupervisorshasthreepeopleamongwhichonesupervisorisrepresentativeforstaff,thenumberandcompositionofboardofsupervisorwasinaccordwithrequirementsofregulationsandrules.AllsupervisorsoftheCompanycouldfollowtherequirementofRulesofBoardofSupervisors’Procedure,insisttheprincipleofresponsibilitytoallshareholders,seriouslyperformtheirduties,effectivelysuperviseand

presenttheirindependentopiniononimportantissues,interrelateddeals,financialstatus,thedutyperformanceofdirectorsandmanagersoftheCompany.(5)AboutperformanceevaluationandincentivesystemTheengagementofmanagerswasopenandtransparent,andaccordedwithlawsandregulations.TheCompanyhasestablishedandgraduallyimprovedtheperformanceevaluationstandardandformedefficientincentivesystem,soastoensurethesalaryofstafftobelinkedwithjobperformance.

(6)Aboutstakeholders

TheCompanycouldfullyrespectandsafeguardthelegalrightsofthepartywithrelevantbenefit,cooperateactivelywiththestakeholders,jointlydrivetheCompanytodevelopcontinuallyandstably,paygreatattentiontotheissuessuchaslocalenvironmentalprotectionandpublicutilitiesetc.,andassumefullresponsibilitiesforthesocialresponsibility.(7)AbouttheinformationdisclosureandtransparencyTheCompanyhasappointedthesecretarytoBoardofDirectorstoberesponsibleforinvestorrelationmanagementincludinginformationdisclosure,investorrelationsmanagementandreceptionofshareholders’visitandconsultation.TheCompanyhasalsoassignedChinaSecuritiesNewspaper,SecuritiesTimes,HonkongCommercialDailyandwebsitehttp://www.cninfo.com.cn/todiscloseinformation,punctually,accuratelyandtrulydisclosedanyinformationinthelightofrequirementofrelevantlawsandrules,andalsoensuredallshareholderstohavesameopportunitytoacquireanyinformation.InordertofurtherperfecttheCompany’sgovernancesystem,duringthereportperiod,theCompanyformulatesandimprovesOpinionofBrandPositioning,AssessmentMethodofProductionOrderFulfillmentRate,AssessmentMethodofSafetyManagement,ImplementationPlanofBrandyInternalQualityImprovementandTechnologicalInnovationProject,ImplementationOpinionofBuildingTechnicalCommunicationPlatformwithOverseasEnterprises,AssessmentandEvaluationMethodofContractedBasesin2018,AssessmentandEvaluationMethodofSelf-supportingVineyardsandsoon.WhetherornotthereissignificantvariancebetweentheCompany’sactualsituationofcorporategovernanceandthenormativedocumentsaboutlistedcompanygovernanceissuedbyChinaSecuritiesRegulatoryCommission.□Yes?NoThereisnosignificantvariancebetweentheCompany’sactualsituationofcorporategovernanceandthenormativedocumentsaboutlistedcompanygovernanceissuedbyChinaSecuritiesRegulatoryCommission.2.Relativetothecontrollingshareholder,independenceoftheCompanyonbusiness,personnel,assets,organizationandfinance

(1)PersonnelArrangement

TheCompany’sgeneralmanager,deputygeneralmanagersandotherseniorofficers,allofwhomwerepaidbytheCompanyanddidnotholdanypostinthecontrollingparties.TheCompanywasentirelyindependentinpersonnelarrangement,conclusionandadjustmentof

laborcontractsthankstoitssoundandindependentsystemforlabor,personalandsalarymanagement.

(2)Assets:

TangibleassetsandIntangibleassetsincludingtrademark,industrialpropertyrightandnon-patenttechnologieswereallclearlydividedbetweentheCompanyandthecontrollingshareholder,andalllegalformalitieswerecompleted.TheCompanybeingalegalindependententityconsistentlyconductedbusinessactivitieslegallyandprovidednoguaranteeinanyformwithitsassetsforitsshareholdersorindividuals’liabilitiesoranyotherlegalpersonsornaturalpersons.TheCompanyownstrademarksincluding“黄金冰谷”,“爱斐堡”,“爱菲堡”,“爱斐”and“AFIP”,etc.However,duetosomeissuesfromthepast,theCompanypermittedtouse“Changyu”etctheintangibleassetssuchaspartoftrademarkownershipandpatentstillheldbythecontrollingshareholders.Exceptpartialtrademarkswhichcannotbepeeledoff“张裕”(Changyu)trademark,trademarksandpatentsthatcouldhavebeenregisteredorappliedbytheCompanybutwereregisteredorappliedbyChangyuGroupwhothenauthorizedtheCompanyforusagewillbetransferredtotheCompanybyChangyuGroupforfreebeforetheendof2019inordertoensuretheindependenceandcompletenessoftheCompany’sassets.

(3)Finance

TheCompanyhasindependentfinancedepartment,chiefaccountandfinancialstaff,andalsocomplete,independentandstandardizedaccountingsystem.TheCompanyhasalsoestablisheditsownbankaccounts,dulyandlegallypayingtaxes,workersinsurancefund.Allfinancialindividualsdonotholdanyconcurrentpostsinassociatedcompaniesandareabletomakefinancialdecisionsindependently.TheCompanyhasitsownauditdepartment,whichisespeciallyresponsiblefortheinternalauditworkoftheCompany.

(4)Offices

TheCompanyhassetupasoundorganizationalframework,inwhichtheBoardofDirectorsandBoardofSupervisorsoperateindependently,nosuperiorandsubordinaterelationshipexistsbetweenthefunctionaldepartmentsofthecontrollingshareholder.TheCompanyhasitsownindependentproduction&businessoffices,allfunctionaldepartmentsareindependenttoexercisetheirpowersandcarryouttheproductionandbusinessactivitiesindependently.

(5)Operations

TheoperationsoftheCompanyareindependentofthecontrollingshareholder.TheCompanyownsitselfcompletelyindependentsystemscoveringresearchanddevelopment,accounting,workforceandlabor,qualitycontrol,rawmaterialspurchase,productionandsales,andispossessedofself-runcapabilities,andhasneitherrelationshipwiththecontrollingshareholderintermsofsupplyandsalesbyproxynorcompetitionwiththeother.3.SituationforHorizontalCompetition□Available?Notavailable4.Informationfortheshareholders’meetingandtemporaryshareholders’meetingheldduringthereportperiod

(1)Informationfortheshareholders’meetingduringthereportperiod

Session	Meetingtype	Participationratioofinvestors	Conveningdate	Disclosuredate	DisclosureIndex
2017AnnualShareholders’Meeting	Annualshareholders’meeting	63.87%	2018.05.24	2018.05.25	http://www.cninfo.com.cnResolutionAnnouncementof2017AnnualShareholders’Meeting(Announcementno.:2018-Temporary15)
2018AnnualFirstInterimShareholders’Meeting	InterimShareholders’Meeting	64.86%	2018.12.26	2018.12.27	http://www.cninfo.com.cnResolutionAnnouncementof2018AnnualFirstInterimShareholders’Meeting(Notificationno.:2018-Temporary22)

(2)Requestforconveningtemporaryshareholders’meetingbypriorityshareholdersowingrecoveredvotingright□Available?Notavailable5.Performanceofindependentdirectorsduringthereportperiod(1)Attendanceofindependentdirectorsfortheboardofdirectorsandtheshareholders’meeting

Attendanceofindependentdirectorsfortheboardofdirectors
Name	Requiredattendancetime	Personalattendance	Communicationattendance	Authorizedattendance	Absence	Whetherornottoattendthemeetingspersonallyforsuccessivetwice	Attendancetimefortheshareholders’meeting
WangShigang	6	1	4	1	0	No	0
WangZhuquan	6	2	4	0	0	No	0
LuoFei	6	2	4	0	0	No	0
LiuYan	6	2	4	0	0	No	0
GuoGuoqing	0	0	0	0	0	No	0

ExplanationforfailedtopersonallyattendtheBoardofDirectors’meetingsforsuccessivetwotimesNo(2)AnyobjectionsfortheCompany’sprojectsfromtheindependentdirectorsWhetherornottheindependentdirectorsraisedanyobjectionfortheCompany’sprojects□Yes?NoDuringthereportperiod,theindependentdirectorsdidnotraiseanyobjectionsfortheCompany’sprojects.(3)Otherexplanationsonindependentdirectors’performanceWhetherornottheindependentdirectors’propositionsareacceptedbytheCompany?Yes□NoExplanationonacceptanceorrefusaloftheindependentdirectors’propositionstotheCompanyDuringthereportperiod,someindependentdirectorsproposesuggestionsonprudentinvestmentintourismprojectofChangyuInternationalWineCity.Theythoughtthatitisahigherriskinthecurrentbackgroundofslowergrowthofdomesticeconomy.TheCompanyacceptedtheindependentdirectors’opinionsanddecidedtosuspendconstructionoftheproject.6.PerformanceofthespecialcommitteesundertheBoardofDirectorsduringthereportperiod①AuditingCommittee:Duringthereportperiod,theCompany’sauditingCommitteeconductedanex-ante,in-process,andpost-eventreviewtorelatedannualreportauditworkandmaderelevantarrangements.TheauditingCommitteebelievedthat2017annualfinancialstatementsissuedbytheCompanymettherequirementofAccountingStandardsforBusinessEnterprisesandtrulyandfairlyreflectedthebalanceconditionuptoDecember31

st

,2017aswellas2017annualbusinessperformanceandcashflow.TherewerenounsolvedmajordivergencesinaccountingandauditingormajorriskissuesaffectingtheCompany'smanagement.TheCompanyoperatedsteadilyandhadtheabilityofcontinuousoperations.Proposalsincluding2017AnnualSelf-assessmentReportonInternalControl,Draftproposalon2017AnnualProfitDistribution,AppointingCertifiedPublicAccountantsFirm,ChangeinAccountingPolicy，2017AnnualReport,2018Semi-annualReportand2018AnnualAuditPlanweredeliberated.Auditingcommitteepassedabove-mentionedproposalsandsubmittedtherelatedproposalstoboardofdirectorsfordeliberation.②EmolumentCommittee:EmolumentCommitteeisresponsibleforassessmentoftheeconomyresponsibilitiesofthedirectorsandtheseniorexecutiveswhoreceivesalariesfromtheCompanyandexaminationofthesalarypolicyandschemedesignedfortheCompany’sdirectorsandseniorexecutives.Duringthereportperiod,theCompanyheldEmolumentCommitteemeetingonce.Proposalon2017AnnualPerformanceAssessmentResultsoftheCompany’sSeniorExecutiveswasdeliberatedandpassedbythemeeting,whothoughtthatthisdocumentwasincompliancewithPerformanceAssessmentMethodsforCompany’sSeniorExecutivefrom2014to2017.EmolumentCommitteeagreedtosubmittherelatedproposalstoBoardofDirectorsfordeliberation.Duringthereportperiod,theBoardofDirectors’EmolumentCommitteealsoexaminedthe2017annualpayrollrecordsofthedirectorsandtheseniormanagerswhoreceivesalariesfromtheCompanyandbelievesthatthesalariesoftheCompany’sdirectors,supervisorsand

seniormanagersreceivedfromtheCompanyisstrictlyassessedanddeliveredbasedontheCompany’seconomicresponsibilityassessmentsystem.ThesalariesdisclosedbytheCompanyareinconformitywiththeactuallypaidamount.7.TheworkoftheBoardofSupervisorsWhetherornottheBoardofSupervisorsfoundanyexistencerisktotheCompanyinoversightactivitiesduringthereportperiod□Yes?NoTheBoardofSupervisorshasnoobjectionstosupervisionmattersduringthereportperiod.8.PerformanceEvaluationandIncentivesituationsofSeniorManagementTheCompanyhasalreadyestablishedasoundsystemforevaluationofachievementofseniormanagementandtherelatedincentivesystemwhichlinkedtherewardwiththeCompany’sbenefitandpersonalachievement.TheEmolumentCommitteeunderBoardofDirectorsassumedtheresponsibilityofstipulatingthepolicyandappraisingtheschemeforsalariesandrewards.BasedontheCompany’sannualbusinessplanninggoals,thiscommitteeexaminedseniorpersonalsandalsotheirresponsiblesubsidiariesordepartmentsaccordingtotheirmanagementachievementandindexandtooktheseascriterionofawardsorpenalties.Duringthereportperiod,becauseofnotfinishingtheannualbusinessplandeliberatedandpassedintheBoardofDirectors’meetingatthebeginningoftheyear,thetotalsalariesandrewardsoftheseniormanagementarebasicallyequaltothatoflastyear.9.InternalControl(1)Specificsituationsforsignificantdefectsoftheinternalcontrolfoundduringthereportperiod□Yes?No(2)Self-assessmentreportoninternalcontrol

Disclosuredateforfulltextoftheinternalcontrolself-assessmentreport	2019.04.20
Disclosureindexforfulltextoftheinternalcontrolself-assessmentreport	2017AnnualSelfAssessmentReportonInternalControland2018AnnualSelfAssessmentReportonInternalControldisclosedonSecuritiesTimes,ChinaSecuritiesJournalandwww.cninfo.com.cnbytheCompanyonApril23rd,2018andApril20th,2019.
PercentageoftotalunitassetsincludedinscopeoftheassessmentaccountingfortheCompany’stotalassetsofconsolidatedfinancialstatements	88.34%
Percentageofunitoperatingincome	90.38%

includedinscopeoftheassessmentaccountingfortheCompany’soperatingincomeofconsolidatedfinancialstatements
StandardsofDefectIdentification
Category	Financialreport		Non-financialreport
Qualitativecriteria	Significantdefects:onedefectofinternalcontrol,individuallyortogetherwithotherdefects,hasthereasonableprobabilitytocausethesignificantmisstatements,whichcannotbepromptlyprevented,orfoundandcorrectedtimelyinthefinancialreport.Forexample:?Company’sDirectors,SupervisorsandSeniorManagementhavefraudulentpractices;?TheCompanymakescorrectionsforthepublishedfinancialreport;?Theauditofexternalintermediaryagentfindssignificantmisstatementexistinginthecurrentfinancialreport,buttheCompanydoesnotrealizeitduringtheoperationprocess;?Negativeinformationfrequentlyappearsinthemediaswithinvolvingawidescope;?TheCompany’sauditcommitteeandinternalauditdepartmentmakesaninefficientsupervisionforinternalcontrol;?Othersituationsmaybecausesignificantmisdirectionwhichguidesthereportuserstomaketherightjudgment.Majordefects：Thedefectofinternalcontrol,individuallyortogetherwithotherdefects,hasthereasonableprobabilitytocausethesignificantmisstatements,whichcannotbepromptlyprevented,orfoundandcorrectedtimelyinthefinancialreport,althoughthemisstatementsneitherachievesnorexceedstheimportancelevelbutstillarisingtheattentionofBoardofDirectorsandmanagementteam.?Failuretoselectandapplyaccountingregulationsinaccordancewithgenerallyacceptedaccountingprinciples;?Failuretoestablishtheanti-fraudproceduresandcontrolmeasures;?Failuretosetupcorrespondingcontrolmechanismortocarryoutandtakecorrespondingcompensatingcontrolfortheaccountingtreatmentswithirregularandspecialdeal;?Negativenewsappearsinthe		Significantdefects:Anysituationslistedbelowappears,itcanberegardedassignificantdefects.?Operation:Unabletoachievealloperationtargetorkeybusinessindex,widelyoutofbudgetinvariousaspects.?Safetyaccidenteffects:Causenolessthanonepersondeath,ormorethan3personseriousinjuries.?Majornegativeeffects:Negativeinformationfrequentlyappearsinthemediaswithinvolvingawidescopeintheinternationalandnationalmainstreammedia.?Environmenteffects:Createirreparabledamagestoenvironment,andcausemassivepubliccomplains.Majordefects:Anysituationslistedbelowappears,itcanberegardedasmajordefects.?Operation:Unabletoachievepartlyoperationtarget,abigmarginoutofbudgetinvariousaspects.?Safetyaccidenteffects:Withoutreachingthepersonlossorthenumberofseriousinjuryofsignificantdefects.?Majornegativeeffects:Negativenewsappearsinthemediawithinfluencingawidescopeintheprovincialmainstreammedia.?Environmenteffects:Causeheavyenvironmentdamagesandmassivepubliccomplains,oughttocarryoutthesignificantremedialmeasures.Generaldefects:Anysituationslistedbelowappears,itcanberegardedasgeneraldefects.?Operation:Othereffectsunabletoconstitutethesignificantdefectsormajordefects.?Safetyaccidenteffects:Personalinjurylessthanthequantitativestandardsofmajordefects.?Majornegativeeffects:Otherdefectsunabletoconstitutethesignificantdefectsormajordefects.?Environmenteffects:Otherenvironmenteffectsunabletoconstitutethesignificant

	mediawithinfluencingawidescope;?Oneormoredefectsexistinthecontrolduringtheprocessoftheendingfinancialreport,andthetargetofachievingtruthfulnessandintegralitycannotbereasonablyguaranteedinthefinancialreport;?Generaldefectsrefertotheothercontroldefects,whichdonotconstitutethesignificantandmajordefects.	defectsormajordefects.
Quantitativecriterion	Fortotalassets/Owner’sequity:?Significantdefects:misstatements≧1%?Majordefects:0.5%≦misstatements<1%?Generaldefects:misstatements<0.5%Foroperationrevenue:?significantdefects:misstatements≧1%?Majordefects:0.5%≦misstatements<1%?Generaldefects:misstatements<0.5%Forpretaxprofit:?Significantdefects:misstatements≧5%?Majordefects:2%≦misstatements<5%?Generaldefects:misstatements<2%	Fordirectpropertyloss:?Significantdefects:MorethanCNY10million?Majordefects:CNY1million-CNY10million(including1million)?Generaldefects:LessthanCNY1million
Numberofsignificantdefectinfinancialreport	0
Numberofsignificantdefectinnon-financialreport	0
Numberofmajordefectinfinancialreport	0
Numberofmajordefectinnon-financialreport	0

10.Internalcontrolauditreport?Available□Notavailable

Auditopinionsoftheinternalcontrolauditreport
WebelievethatYantaiChangyuPioneerWineCo.,Ltd.kepteffectiveinternalcontroltofinancialreportinallsignificantaspectsinaccordancewithGeneralCriteriaofCompany’sInternalControlandotherrelatedrulesonDecember31st,2018.
Disclosureoftheinternalcontrolauditreport	Disclosure

Disclosuredateforthefulltextoftheinternalcontrolauditreport	April20th,2019
Disclosureindexforthefulltextoftheinternalcontrolauditreport	2018AnnualSelfAssessmentReportonInternalControldisclosedonSecuritiesTimes,ChinaSecuritiesJournalandwww.cninfo.com.cnbytheCompany.
Opiniontypeoftheinternalcontrolauditreport	Standardwithoutreservedopinion
Whetherornotexistssignificantdefectsinnon-financialreports	No

Whetherornottheaccountingfirmissuednon-standardopinionsfortheauditreportofinternalcontrol□Yes?NoWhethertheauditreportofinternalcontrolissuedbytheaccountingfirmisinconsistencywiththeself-assessmentreportoftheboardofdirectors?Yes?No

X.RelatedSituationofCorporationBonds

WhetherornottheCompanyhasthecorporationbondsissuedinpublic,listedinthestockexchange,notdueontheannualreport’sauthorizedissuedateorfailedtopayinfullontheduedate.No.

XI.FinancialReport

1.AuditReport

Typeofauditopinion	Standardunqualifiedauditopinion
Datesignedonauditreport	April18th,2019
Auditagencyname	DeloitteHuaYongcertifiedpublicaccountantsco.,Ltd.(specialgeneralpartnership)
AuditreportNo.	DeShiBao(Shen)Zi(19)No.P02452
Certifiedpublicaccountant'sname	JieYanfeng,LiYangang

AUDITOR'SREPORT

DeShiBao(Shen)Zi(19)No.P02452

(Page1of5)TOTHESHAREHOLDERSOFYANTAICHANGYUPIONEERWINECOMPANYLIMITED1.OpinionWehaveauditedthefinancialstatementsofYantaiChangyuPioneerWineCompanyLimited("YantaiChangyuCompany"),whichcomprisetheconsolidatedandCompany'sbalancesheetsasat31December2018,andtheconsolidatedandCompany'sincomestatements,theconsolidatedandCompany'scashflowstatementsandtheconsolidatedandCompany'sstatementsofchangesinowners'equityfortheyearthenended,andthenotestothefinancialstatements.Inouropinion,theaccompanyingfinancialstatementsofYantaiChangyuPioneerWineCompanyLimitedispreparedandpresentfairly,inallmaterialrespects,theconsolidatedandCompany'sfinancialpositionasof31December2018,andtheconsolidatedandtheCompany'sresultsofoperationsandcashflowsfortheyearthenendedinaccordancewithAccountingStandardsforBusinessEnterprises.2.BasisforOpinionWeconductedourauditinaccordancewithChinaStandardsonAuditing.OurresponsibilitiesunderthosestandardsarefurtherdescribedintheAuditor'sResponsibilitiesfortheAuditoftheFinancialStatementssectionofourreport.WeareindependentofYantaiChangyuCompanyinaccordancewiththecodeofethicsforChineseCertifiedPublicAccountants,andwehavefulfilledourotherethicalresponsibilitiesinaccordancewiththeCode.Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforouropinion.3.KeyAuditMattersKeyauditmattersarethosemattersthat,inourprofessionaljudgment,wereofmostsignificanceinourauditofthefinancialstatementsofthecurrentyear.Thesematterswereaddressedinthecontextofourauditofthefinancialstatementsasawhole,andinformingouropinionthereon,andwedonotprovideaseparateopiniononthesematters.Wedeterminethefollowingsarekeyauditmattersinneedofcommunicationinourreport.

AUDITORS’REPORT-continued

DeShiBao(Shen)Zi(19)No.P02452

(Page2of5)3.KeyAuditMatters-continued

Impairmentassessmentofcertainlong-termassets1.Itemdescription

AsstatedinNoteIV“Impairmentoflong-termassets”,theProductionofYantaiChangyu

PioneerWineCompanyLimitedResearchandDevelopmentCo.,Ltd.("R&DCentre"),

subsidiaryoftheCompanyaswellasanewmainproductionbaseoftheCompany,accountsfor

morethan60%oftheGroup’sproductionin2018.Asat31December2018,thebookvaluesof

long-termassetsincludingfixedassets,constructioninprogressandintangibleof"R&DCentre

amountedtoRMB3.5billion,accountingfor26.6%ofthetotalassetsintheconsolidated

financialstatements,whichexertssignificantinfluenceontheconsolidatedfinancialstatements.

Asthereislittlespaceforthedevelopmentofthedomesticwinemarket,themanagementofthe

Companyfacesgreatoperatingpressureswithcertainrisksofimpairmentofrelatedlong-term

assets.Themanagementperformstheimpairmenttestbydeterminingiftherecoverableamountis

lessthanthebookvalueoflong-termassetsanddeterminestherecoverableamountbasedonthe

presentvalueofexpectedfuturecashflows.Intheestimateofthepresentvalueoffuturecash

flows,themanagementisrequiredtomakesignificantjudgementsintheassumptionsincluding

thesalesgrowthrate,futuresellingprice,productioncost,operatingexpensesanddiscountrate.

Fortheabovereasons,weidentifiedthevaluationoftheimpairmentoflong-termassetsasakey

auditmatter.2.Howourauditaddressedthekeyauditmatter

Ourproceduresinrelationtothekeyauditmattermainlyincluded:

(1)Testandevaluatetheeffectivenessofthedesignandimplementationoftheinternal

controlrelatedtothevaluationoftheimpairmentoflong-termassets;

(2)Reviewandevaluatethereasonablenessofkeyassumptionsandjudgementsusedinthe

estimateofthepresentvalueofexpectedfuturecashflowsintheimpairmenttestbasedonthehistoricalrecordsoftheCompanyandourunderstandingofthebusinessandindustryinwhichtheCompanyoperates.

(3)Usingourinternalvaluationspecialists,reviewingtheappropriatenessofthefuturecash

flowsdiscountmodelpreparedbythemanagementandtherationalityofthediscountrateused;

(4)Performingtherecalculationprocedure,checkingtheaccuracyofcalculationsinthe

discountfuturecashflowsmodel.

AUDITORS’REPORT-continued

DeShiBao(Shen)Zi(19)No.P02452

(Page3of5)4.OtherInformationThemanagementofYantaiChangyuPioneerWineCompanyLimitedisresponsibleforotherinformation.TheotherinformationcomprisestheinformationincludedintheYantaiChangyu2018annualreport,butdoesnotincludethefinancialstatementsandourauditor'sreportthereon.Ouropiniononthefinancialstatementsdoesnotcovertheotherinformationandwedonotexpressanyformofassuranceconclusionthereon.Inconnectionwithourauditofthefinancialstatements,ourresponsibilityistoreadtheotherinformationand,indoingso,considerwhethertheotherinformationismateriallyinconsistentwiththefinancialstatementsorourknowledgeobtainedintheauditorotherwiseappearstobemateriallymisstated.If,basedontheworkwehaveperformed,weconcludethatthereisamaterialmisstatementofthisotherinformation,wearerequiredtoreportthatfact.Wehavenothingtoreportinthisregard.5.ResponsibilitiesoftheManagementandThoseChargedwithGovernancefortheFinancial

StatementsThemanagementofYantaiChangyuPioneerWineCompanyLimitedisresponsibleforthepreparationandfairpresentationofthefinancialstatementsinaccordancewithAccountingStandardsforBusinessEnterprises,anddesigning,implementingandmaintaininginternalcontrolthatisnecessarytoenablethefinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror.Inpreparingthefinancialstatements,themanagementisresponsibleforassessingYantaiChangyuCompany’sabilitytocontinueasagoingconcern,disclosing,asapplicable,mattersrelatedtogoingconcernandusingthegoingconcernbasisofaccountingunlessthemanagementeitherintendstoliquidateYantaiChangyuCompanyortoceaseoperations,orhavenorealisticalternativebuttodoso.ThosechargedwithgovernanceareresponsibleforoverseeingYantaiChangyuCompany’sfinancialreportingprocess.6.Auditor'sResponsibilitiesfortheAuditoftheFinancialStatementsOurobjectivesaretoobtainreasonableassuranceaboutwhetherthefinancialstatementsasawholearefreefrommaterialmisstatement,whetherduetofraudorerror,andtoissueanauditor'sreportthatincludesouropinionsolelytoyou.Reasonableassuranceisahighlevelofassurance,butisnotaguaranteethatanauditconductedinaccordancewithChinaStandardsonAuditingwillalwaysdetectamaterialmisstatementwhenitexists.Misstatementscanarisefromfraudorerrorandareconsideredmaterialif,individuallyorintheaggregate,theycouldreasonablybeexpectedtoinfluencetheeconomicdecisionsofuserstakenonthebasisofthesefinancialstatements.

AUDITORS’REPORT-continued

DeShiBao(Shen)Zi(19)No.P02452

(Page4of5)6.Auditor'sResponsibilitiesfortheAuditoftheFinancialStatements-continuedAspartofanauditinaccordancewithChinaStandardsonAuditing,weexerciseprofessionaljudgmentandmaintainprofessionalskepticismthroughouttheaudit.Wealso:

(1)Identifyandassesstherisksofmaterialmisstatementofthefinancialstatements,whetherdue

tofraudorerror,designandperformauditproceduresresponsivetothoserisks,andobtainauditevidencethatissufficientandappropriatetoprovideabasisforouropinion.Theriskofnotdetectingamaterialmisstatementresultingfromfraudishigherthanforoneresultingfromerror,asfraudmayinvolvecollusion,forgery,intentionalomissions,misrepresentations,ortheoverrideofinternalcontrol.(2)Obtainanunderstandingofinternalcontrolrelevanttotheauditinordertodesignaudit

proceduresthatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheinternalcontrol.(3)Evaluatetheappropriatenessofaccountingpoliciesusedandthereasonablenessofaccounting

estimatesandrelateddisclosuresmadebythemanagement.(4)Concludeontheappropriatenessofthemanagement'suseofthegoingconcernbasisof

accountingand,basedontheauditevidenceobtained,whetheramaterialuncertaintyexists

relatedtoeventsorconditionsthatmaycastsignificantdoubtonYantaiChangyuCompany’s

abilitytocontinueasagoingconcern.Ifweconcludethatamaterialuncertaintyexists,weare

requiredtodrawattentioninourauditor'sreporttotherelateddisclosuresinthefinancial

statementsor,ifsuchdisclosuresareinadequate,tomodifyouropinion.Ourconclusionsare

basedontheauditevidenceobtaineduptothedateofourauditor'sreport.However,future

eventsorconditionsmaycausetheYantaiChangyuCompanytoceasetocontinueasagoing

concern.(5)Evaluatetheoverallpresentation,structureandcontentofthefinancialstatements(including

thedisclosures),andwhetherthefinancialstatementsrepresenttheunderlyingtransactionsand

eventsinamannerthatachievesfairpresentation.(6)Obtainsufficientappropriateauditevidenceregardingthefinancialinformationoftheentities

orbusinessactivitieswithintheYantaiChangyuCompanytoexpressanopiniononthe

financialstatements.Weareresponsibleforthedirection,supervisionandperformanceofthe

groupaudit.Weremainsolelyresponsibleforourauditopinion.

AUDITORS’REPORT-continued

DeShiBao(Shen)Zi(19)No.P02452

(Page5of5)6.Auditor'sResponsibilitiesfortheAuditoftheFinancialStatements-continuedWecommunicatewiththosechargedwithgovernanceregarding,amongothermatters,theplannedscopeandtimingoftheauditandsignificantauditfindings,includinganysignificantdeficienciesininternalcontrolthatweidentifyduringouraudit.Wealsoprovidethosechargedwithgovernancewithastatementthatwehavecompliedwithrelevantethicalrequirementsregardingindependence,andtocommunicatewiththemallrelationshipsandothermattersthatmayreasonablybethoughttobearonourindependence,andwhereapplicable,relatedsafeguards.Fromthematterscommunicatedwiththosechargedwithgovernance,wedeterminethosemattersthatwereofmostsignificanceintheauditofthefinancialstatementsofthecurrentyearandarethereforethekeyauditmatters.Wedescribethesemattersinourauditor'sreportunlesslaworregulationprecludespublicdisclosureaboutthematterorwhen,inextremelyrarecircumstances,wedeterminethatamattershouldnotbecommunicatedinourreportbecausetheadverseconsequencesofdoingsowouldreasonablybeexpectedtooutweighthepublicinterestbenefitsofsuchcommunication.DeloitteToucheTohmatsuCPALLPChineseCertifiedPublicAccountant:XieYanfeng

Shanghai,China(Engagementpartner)

ChineseCertifiedPublicAccountant:LiYangang

18April2019

CONSOLIDATEDBALANCESHEETSYEARENDED31DECEMBER2018ASSETSNotes31/12/201831/12/2017

RMBRMBCURRENTASSETS

CashandbankVI-11,475,700,4771,402,522,509NotesandaccountsreceivableVI-2530,821,071508,593,173Including:NotesreceivableVI-2.2288,667,988244,796,818

AccountsreceivableVI-2.3242,153,083263,796,355PrepaymentsVI-34,219,9492,417,931OtherreceivablesVI-422,636,08618,978,422Including:InterestreceivableVI-4.21,332,681240,968InventoriesVI-52,724,591,4572,473,614,046Non-currentassetsheldforsale-2,000,197OthercurrentassetsVI-6258,676,396230,822,759

__________________________Totalcurrentassets5,016,645,4364,638,949,037

__________________________NON-CURRENTASSETS

Available-for-salefinancialassetsVI-7467,251467,251InvestmentpropertiesVI-831,572,48918,467,989FixedassetsVI-95,749,731,6675,329,083,969ConstructioninprogressVI-10759,296,5911,026,141,569BearerbiologicalassetsVI-11209,266,373201,929,888IntangibleassetsVI-12655,473,459655,448,897GoodwillVI-13165,199,111128,135,981Long-termprepaidexpensesVI-14244,640,416230,009,231DeferredtaxassetsVI-15285,436,259308,121,396

__________________________Totalnon-currentassets8,101,083,6167,897,806,171

__________________________Totalassets13,117,729,05212,536,755,208

____________________________________________________

CONSOLIDATEDBALANCESHEETSYEARENDED31DECEMBER2018-continuedLIABILITIESANDEQUITYNotes31/12/201831/12/2017

RMBRMBCURRENTLIABILITIES

Short-termborrowingsVI-16688,002,410714,434,286NotesandaccountspayableVI-17713,572,881666,442,879ReceiptsinadvanceVI-18226,075,244350,894,156EmployeebenefitspayableVI-19212,304,217210,824,234TaxespayableVI-20128,912,790145,094,156OtherpayablesVI-21608,479,890603,735,569Including:Interestpayable712,826771,250

OtherpayablesVI-21.2607,767,064602,964,319DeferredincomeVI-2215,860,25416,878,199Non-currentliabilitiesduewithinoneyearVI-23152,940,788110,954,827

__________________________Totalcurrentliabilities2,746,148,4742,819,258,306

__________________________NON-CURRENTLIABILITIES

Long-termborrowingsVI-24156,480,662156,125,854Long-termpayablesVI-25225,000,000259,000,000DeferredincomeVI-2270,367,03992,918,855DeferredtaxliabilitiesVI-1522,010,64724,264,203Othernon-currentliabilitiesVI-267,234,8537,209,312

__________________________Totalnon-currentliabilities481,093,201539,518,224

__________________________Totalliabilities3,227,241,6753,358,776,530

__________________________

CONSOLIDATEDBALANCESHEETSYEARENDED31DECEMBER2018-continuedLIABILITIESANDEQUITYNotes31/12/201831/12/2017

RMBRMBEQUITY

SharecapitalVI-27685,464,000685,464,000CapitalreserveVI-28565,955,441565,955,441OthercomprehensiveincomeVI-292,965,3773,109,240SurplusreserveVI-30342,732,000342,732,000RetainedearningsVI-318,008,982,5477,309,081,618

__________________________Equityattributabletoshareholders

oftheCompany9,606,099,3658,906,342,299Non-controllinginterests284,388,012271,636,379

__________________________Totalequity9,890,487,3779,177,978,678

__________________________Totalliabilitiesandequity13,117,729,05212,536,755,208

__________________________

__________________________Theaccompanyingnotesformanintegralpartofthesefinancialstatements.Thefinancialstatementsonpages6to107weresignedbythefollowing:

LegalRepresentative

PersoninChargeoftheAccountingBody

ChiefAccountant

BALANCESHEETOFTHECOMPANYYEARENDED31DECEMBER2018ASSETSNotes31/12/201831/12/2017

RMBRMBCURRENTASSETS

CashandbankXIV-1624,588,809559,174,466NotesandaccountsreceivableXIV-241,333,22749,450,536Including:NotesreceivableXIV-2.239,885,25441,645,203

AccountsreceivableXIV-2.31,447,9737,805,333Prepayments22799,673OtherreceivablesXIV-31,025,643,356999,846,643Including:Interestreceivable254,08876,646

DividendreceivablesXIV-3.2500,000,000407,495,922InventoriesXIV-4385,154,740348,042,053Non-currentassetsheldforsale-2,000,197Othercurrentassets24,704,84429,706,058

__________________________Totalcurrentassets2,101,425,2031,988,319,626

__________________________NON-CURRENTASSETS

Long-termequityinvestmentsXIV-57,420,803,0694,511,202,204InvestmentpropertiesVI-831,572,48918,467,989FixedassetsXIV-6265,311,274288,150,901ConstructioninprogressXIV-76,311,7016,756,349ConstructioninprogressXIV-8125,002,793119,572,539IntangibleassetsXIV-967,244,06669,623,219DeferredtaxassetsXIV-1024,194,96728,787,907Othernon-currentassetsXIV-11972,700,0003,718,674,166

__________________________Totalnon-currentassets8,913,140,3598,761,235,274

__________________________Totalassets11,014,565,56210,749,554,900

____________________________________________________

BALANCESHEETOFTHECOMPANYYEARENDED31DECEMBER2018-continuedLIABILITIESANDEQUITYNotes31/12/201831/12/2017

RMBRMBCURRENTLIABILITIES

Short-termborrowingsXIV-12150,000,000600,000,000NotesandaccountspayableXIV-13132,704,30497,833,124Advancesfromcustomers-6,000,000EmployeebenefitspayableXIV-1472,345,17970,108,076TaxespayableXIV-1513,111,43114,569,690OtherpayablesXIV-16607,974,519545,365,672Including:Interestpayable181,250652,500

OtherpayablesXIV-16.2607,793,269544,713,172Deferredincome3,433,0543,953,054

__________________________Totalcurrentliabilities979,568,4871,337,829,616

__________________________NON-CURRENTLIABILITIES

Deferredincome8,910,91812,628,573Othernon-currentliabilitiesXIV-142,710,5752,577,702

__________________________Totalnon-currentliabilities11,621,49315,206,275

__________________________Totalliability991,189,9801,353,035,891

__________________________EQUITY

SharecapitalVI-27685,464,000685,464,000CapitalreserveXIV-17557,222,454557,222,454SurplusreserveVI-30342,732,000342,732,000Retainedearnings8,437,957,1287,811,100,555

__________________________Totalequity10,023,375,5829,396,519,009

__________________________Totalliabilitiesandequity11,014,565,56210,749,554,900

__________________________

__________________________

CONSOLIDATEDINCOMESTATEMENTYEARENDED31DECEMBER2018

Notes20182017

RMBRMBI.RevenueVI-325,142,244,7404,932,545,229

Less:CostofsalesVI-321,901,611,5071,671,592,279

TaxesandsurchargesVI-33276,491,674310,252,023SellingexpensesVI-341,274,599,1461,272,522,443AdministrativeexpensesVI-35343,580,651336,461,133Researchanddevelopmentexpenses4,784,1184,320,825FinancialexpensesVI-3635,945,30218,590,259Including:Interestincome12,086,0079,168,772

Interestexpenses46,354,90226,095,487(Reversalof)ImpairmentlossofassetsVI-37(912,166)8,293,553Add:Income(loss)fromdisposalofassets11,368,355(222,586)

OtherincomeVI-3887,281,43446,038,384

________________________II.Operatingprofit1,404,794,2971,356,328,512

Add:Non-operatingincomeVI-397,353,30917,230,727Less:Non-operatingexpensesVI-403,535,9081,631,476

________________________III.Profitbeforetax1,408,611,6981,371,927,763

Less:IncometaxVI-41367,127,522338,134,245

________________________IV.Profitfortheyear1,041,484,1761,033,793,518

________________________(I)Categorizedbythenatureofcontinuingoperation1.Netprofitfromcontinuingoperations1,041,484,1761,033,793,518

________________________(II)Categorizedbyownership:

1.Profitorlossattributabletonon-controllinginterests(1,148,753)2,098,4622.NetprofitattributabletoownersoftheCompany1,042,632,9291,031,695,056

________________________V.Othercomprehensiveincome(post-tax)(376,524)9,863,872

________________________Othercomprehensiveincomeattributable

toshareholdersoftheCompanyOthercomprehensiveincome

tobereclassifiedtoprofitandloss

Foreigncurrencystatementtranslationdifference(143,863)8,368,254Othercomprehensiveincomeattributabletonon-controllinginterest(232,661)1,495,618

________________________VI.Totalcomprehensiveincome1,041,107,6521,043,657,390

________________________AttributetoshareholdersoftheCompany1,042,489,0661,040,063,310Attributetonon-controllinginterestoftheCompany(1,381,414)3,594,080

________________________

________________________VII.Earningspershare

(I)BasicearningspershareVI-421.521.51

________________________

________________________(II)DilutedearningspershareVI-42N/AN/A

________________________

________________________

INCOMESTATEMENTOFTHECOMPANYYEARENDED31DECEMBER2018

Notes20182017

RMBRMBI.RevenueXIV-18876,447,0701,311,256,854

Less:CostofsalesXIV-18774,487,0311,165,953,408

TaxesandsurchargesXIV-1938,346,76176,570,225AdministrativeexpensesXIV-2090,505,20879,119,135Researchanddevelopmentexpenses887,3551,573,909FinancialexpensesXIV-21(20,292,737)637,568Including:Interestincome41,821,37218,602,199

Interestexpenses16,075,35317,414,181Add:InvestmentincomeXIV-22964,128,659798,877,905

Income(loss)fromdisposalofassets12,411,962(29,625)Otherincome4,237,6555,219,126

________________________II.OperatingProfit973,291,728791,470,015

Add:Non-operatingincome1,483,478686,646Less:Non-operatingexpenses593,694335,237

________________________III.Profitbeforetax974,181,512791,821,424

Less:Incometax4,592,939(1,776,586)

________________________IV.Profitfortheyear969,588,573793,598,010

________________________________________________Netprofitfromcontinuingoperations969,588,573793,598,010

________________________V.Totalcomprehensiveincome969,588,573793,598,010

________________________________________________

CONSOLIDATEDCASHFLOWSTATEMENTYEARENDED31DECEMBER2018

Notes20182017

RMBRMBCASHFLOWSFROMOPERATINGACTIVITIES

Cashreceiptsfromthesaleofgoods

andtherenderingofservices4,950,603,2074,827,152,526Receiptsoftaxrefunds57,056,69053,196,910OthercashreceiptsrelatingtooperatingactivitiesVI-43(1)72,703,87285,236,905

______________________

Sub-totalofcashinflowsfromoperatingactivities5,080,363,7694,965,586,341

______________________

Cashpaymentsforgoodspurchasedandservicesreceived1,383,945,2331,143,840,915Cashpaymentstoandonbehalfofemployees544,742,974512,777,815Paymentofvarioustypesoftaxes1,111,980,4991,260,813,596OthercashpaymentsrelatingtooperatingactivitiesVI-43(2)1,063,716,3171,074,910,988

______________________

Sub-totalofcashoutflowsfromoperatingactivities4,104,385,0233,992,343,314

______________________

NetcashflowsfromoperatingactivitiesVI-44(1)975,978,746973,243,027

______________________

CASHFLOWSFROMINVESTINGACTIVITIES

Cashreceiptsfromdisposalsandrecoveryofinvestments400,000,000205,000,000Proceedsfromreturnoninvestments3,445,8954,084,350Netcashreceiptsfromdisposalsoffixedassets,intangibleassetsandotherlong-termassets19,967,4317,594,005

______________________

Sub-totalofcashinflowsfrominvestingactivities423,413,326216,678,355

______________________

Cashpaidforacquisitionofproperties,plantsandequipment,

intangibleassetsandotherlong-termassets347,384,820435,960,357Cashpaymentstoacquireinvestments478,042,400297,129,216CashpaidforthepurchasesubsidiariesandotherequityVI-43(3)105,834,655303,796,543

______________________

Sub-totalofcashoutflowsfrominvestingactivities931,261,8751,036,886,116

______________________

Netcashflowsfrominvestingactivities(507,848,549)(820,207,761)

______________________

CASHFLOWSFROMFINANCINGACTIVITIES

Cashreceiptsfromcapitalcontributions2,050,00048,396,726

Including:cashreceiptsfromcapitalcontributions

fromminorityownersofsubsidiaries2,050,00048,396,726Cashreceiptsfromborrowings1,049,815,411963,564,600OthercashreceivedfromfinancingactivitiesVI-43(4)62,468,25952,930,804

______________________

Sub-totalofcashinflowsfromfinancingactivities1,114,333,6701,064,892,130

______________________

Cashpaidforborrowings1,103,189,409876,502,273Cashpaidfordividends,profitsandinterests397,351,813369,791,284CashpaidfromotherfinancingactivitiesVI-43(5)46,100,00061,700,000

______________________

Sub-totalofcashoutflowsfromfinancingactivities1,546,641,2221,307,993,557

______________________

Netcashflowsfromfinancingactivities(432,307,552)(243,101,427)

______________________

Effectofforeignexchangeratechanges

oncashandcashequivalents(9,851,585)14,013,131NETINCREASE(DECREASE)OFCASH

ANDCASHEQUIVALENTS25,971,060(76,053,030)Add:cashandcashequivalentsatbeginningoftheyearVI-44(3)1,180,889,2741,256,942,304

______________________

CASHANDCASHEQUIVALENTSATENDOFTHEYEARVI-44(3)1,206,860,3341,180,889,274

____________________________________________

CASHFLOWSTATEMENTOFTHECOMPANYYEARENDED31DECEMBER2018

Notes20182017

RMBRMBCASHFLOWSFROMOPERATINGACTIVITIES

Cashreceiptsfromthesaleofgoods

andtherenderingofservices817,341,175984,103,489Othercashreceiptsrelatingtooperatingactivities177,786,322431,983,092

______________________

Sub-totalofcashinflowsfromoperatingactivities995,127,4971,416,086,581

______________________

Cashpaymentsforgoodspurchasedandservicesreceived608,241,452398,827,772Cashpaymentstoandonbehalfofemployees107,256,44189,894,049Paymentofvarioustypesoftaxes62,066,449207,917,864Othercashpaymentsrelatingtooperatingactivities74,357,324121,377,127

______________________

Sub-totalofcashoutflowsfromoperatingactivities851,921,666818,016,812

______________________

NetcashflowsfromoperatingactivitiesXIV-23(1)143,205,831598,069,769

______________________

CASHFLOWSFROMINVESTINGACTIVITIES

Cashreceiptsfromdisposalsandrecoveryofinvestments370,000,000103,000,000Proceedsfromreturnoninvestments874,520,633827,218,467Netcashreceiptsfromdisposalsoffixedassets,intangibleassetsandotherlong-termassets11,212,19526,760,929

______________________

Sub-totalofcashinflowsfrominvestingactivities1,255,732,828956,979,396

______________________

Cashpaidforacquisitionofproperties,plantsandequipment,

intangibleassetsandotherlong-termassets28,842,91122,527,073Cashpaymentstoacquireinvestments410,000,000105,000,000Cashpaidforthepurchasesubsidiariesandotherequity107,194,420881,056,220

______________________

Sub-totalofcashoutflowsfrominvestingactivities546,037,3311,008,583,293

______________________

Netcashflowsfrominvestingactivities709,695,497(51,603,897)

______________________

CASHFLOWSFROMFINANCINGACTIVITIES

Cashreceiptsfromborrowings200,000,000600,000,000

______________________

Sub-totalofcashinflowsfromfinancingactivities200,000,000600,000,000

______________________

Cashpaidforborrowings650,000,000530,339,600Cashpaidfordividends,profitsandinterests364,085,312360,560,604

______________________

Sub-totalofcashoutflowsfromfinancingactivities1,014,085,312890,900,204

______________________

Netcashflowsfromfinancingactivities(814,085,312)(290,900,204)

______________________

NETINCREASEOFCASH

ANDCASHEQUIVALENTS38,816,016255,565,668Add:cashandcashequivalentsatbeginningoftheyearXIV-24493,568,866238,003,198

______________________

CASHANDCASHEQUIVALENTSATENDOFTHEYEARXIV-24532,384,882493,568,866

____________________________________________

CONSOLIDATEDSATATEMENTOFCHANGESINEQUITYYEARENDED31DECEMBER2018

2018AttributabletoshareholdersoftheCompanyIssuedCapitalOthercomprehensiveSurplusRetainedNon-controllingcapitalsurplusincomereserveearningsinterestsTotalRMBRMBRMBRMBRMBRMBRMBI.1/1/2018685,464,000565,955,4413,109,240342,732,0007,309,081,618271,636,3799,177,978,678

____________________________________________________

II.Changesfortheyear

(I)Totalcomprehensiveincome--(143,863)-1,042,632,929(1,381,414)1,041,107,652(II)Owners’contributionsandreductionincapital

Acquisitionofsubsidiaries(VIII-2)-----17,532,82317,532,823(III)Profitdistribution

Distributionstoshareholders(VI-31,VIII-2)----(342,732,000)(3,399,776)(346,131,776)

____________________________________________________

III.31/12/2018685,464,000565,955,4412,965,377342,732,0008,008,982,547284,388,0129,890,487,377

________________________________________________________________________________________________________

2017AttributabletoshareholdersoftheCompanyIssuedCapitalOthercomprehensiveSurplusRetainedNon-controllingcapitalsurplusincomereserveearningsinterestsTotalRMBRMBRMBRMBRMBRMBRMBI.1/1/2017685,464,000565,955,441(5,259,014)342,732,0006,620,118,562190,473,6978,399,484,686

___________________________________________________

II.Changesfortheyear

(I)Totalcomprehensiveincome--8,368,254-1,031,695,0563,594,0801,043,657,390(II)Owners’contributionsandreductionincapital

Non-controllinginterests'capitalcontribution-----78,236,72678,236,726(III)Profitdistribution

Distributionstoshareholders(VI-31)----(342,732,000)(668,124)(343,400,124)

___________________________________________________

III.31/12/2017685,464,000565,955,4413,109,240342,732,0007,309,081,618271,636,3799,177,978,678

______________________________________________________________________________________________________

STATEMENTOFCHANGESINEQUITYOFTHECOMPANYYEARENDED31DECEMBER2018

2018IssuedcapitalCapitalreserveSurplusreserveRetainedearningsTotal

RMBRMBRMBRMBRMBI.1/1/2018685,464,000557,222,454342,732,0007,811,100,5559,396,519,009

___________________________________________

II.Changesfortheyear(I)Totalcomprehensiveincome---969,588,573969,588,573(II)Profitdistribution

Distributionstoshareholders(VI-31)---(342,732,000)(342,732,000)

___________________________________________

III.31/12/2018685,464,000557,222,454342,732,0008,437,957,12810,023,375,582

______________________________________________________________________________________

2017IssuedcapitalCapitalreserveSurplusreserveRetainedearningsTotal

RMBRMBRMBRMBRMBI.1/1/2017685,464,000557,222,454342,732,0007,360,234,5458,945,652,999

__________________________________________

II.Changesfortheyear(I)Totalcomprehensiveincome---793,598,010793,598,010(II)Profitdistribution

Distributionstoshareholders(VI-31)---(342,732,000)(342,732,000)

__________________________________________

III.31/12/2017685,464,000557,222,454342,732,0007,811,100,5559,396,519,009

____________________________________________________________________________________

NOTESTOFINANCIALSTATEMENTSYEARENDED31DECEMBER2018I.CORPORATEINFORMATION

YantaiChangyuPioneerWineCo.,Ltd.(the"Company")wasincorporatedasajointstocklimitedcompanyinaccordancewiththeCompanyLawofthePeople'sRepublicofChina(the"PRC")inareorganizationcarriedoutbyYantaiChangyuGroupCo.,Ltd.("ChangyuGroupCompany"),inwhichChangyuGroupCompanyinjectedcertainassetsandliabilitiesinrelationtothebrandy,wine,andsparklingwineproductionandsalesbusinessestotheCompany.TheCompanyanditssubsidiaries(the"Group")areprincipallyengagedintheproductionandsalesofwine,brandy,sparklingwine,grapegrowingandacquisition,aswellastravelresourcedevelopment,etc..RegistrationplaceoftheCompanyisYantai,Shandong.HeadquarteroftheCompanyislocatedatNo.56DaMaLu,ZhifuDistrict,Yantai,Shandong,PRC.Asat31December2018thetotalsharesissuedbytheCompanyamountsto685,464,000shares.PleaserefertoNoteVI-27indetail.TheholdingcompanyoftheGroupisChangyuGroupCompany,whichisjointlycontrolledbyYantaiGuoFengInvestmentHoldingLtd,ILLVASARONNOHOLDINGSPA,InternationalFinanceCorporationandYantaiYuhuaInvestmentandDevelopmentCompanyLimited.Thefinancialstatementshavebeenauthorizedbytheboardofdirectorson18April2019.AccordingtotheCompany'sarticlesofassociation,thefinancialstatementswillbereviewedbyshareholdersontheshareholder'smeeting.Forconsolidationscopeoftheyear,pleaserefertoNoteVIII"Equityinotherentities"indetail.Fordetailofchangesinconsolidationscopeoftheyear,pleaserefertoNoteVII"Changeinconsolidationscope".II.BASISOFPREPARATIONOFFINANCIALSTATEMENTS1.Basisofpreparation

TheGrouphasadoptedtheAccountingStandardsforBusinessEnterprises("ASBE")issuedbytheMinistryofFinance("MoF").Inaddition,theGrouphasdisclosedrelevantfinancialinformationinaccordancewithInformationDisclosureandPresentationRulesforCompaniesOfferingSecuritiestothePublicNo.15-GeneralProvisionsonFinancialReporting(Revisedin2014).2.Basisofaccountingandprincipleofmeasurement

TheGrouphasadoptedtheaccrualbasisofaccounting.TheGroupadoptsthehistoricalcostastheprincipleofmeasurementinthefinancialstatements.Whereassetsareimpaired,provisionsforassetimpairmentaremadeinaccordancewithrelevantrequirements.Underthehistoricalcostmeasurement,anassetismeasuredatthefairvalueofconsiderationpaidincashandcashequivalentsatthedateofthepurchase.Liabilityismeasuredatthevalueofassetreceivedthroughtakingcurrentobligation,thecontractvaluefortakingcurrentobligation,orthecashandcashequivalentsvalueestimatedforrepayingdebtindailybusinessactivity.

II.BASISOFPREPARATIONOFFINANCIALSTATEMENTS-continued2.Basisofaccountingandprincipleofmeasurement-continued

Fairvalueisthepricethatwouldbereceivedtosellanassetorpaidtotransferaliabilityinanorderlytransactionbetweenmarketparticipantsatthemeasurementdate,regardlessofwhetherthatpriceisdirectlyobservableorestimatedusinganothervaluationtechnique.Fairvalueformeasurementand/ordisclosurepurposesintheseconsolidatedfinancialstatementsisdeterminedonsuchabasis.FairvaluemeasurementsarecategorisedintoLevel1,2or3basedonthedegreetowhichtheinputstothefairvaluemeasurementsareobservableandthesignificanceoftheinputstothefairvaluemeasurementinitsentirety,whicharedescribedasfollows:

1)Level1inputsarequotedprices(unadjusted)inactivemarketsforidenticalassetsor

liabilitiesthattheentitycanaccessatthemeasurementdate;2)Level2inputsareinputs,otherthanquotedpricesincludedwithinLevel1,thatare

observablefortheassetorliability,eitherdirectlyorindirectly;and3)Level3inputsareunobservableinputsfortheassetorliability.3.Goingconcern

Asat31December2018,theGroupevaluatedtheprofitabilityabilityintheforeseeable12monthsanddidnotnoticeanyeventorcircumstancethatwouldconstitutesignificantdoubtongoingconcernabilityoftheGroup.Therefore,thefinancialstatementshavebeenpreparedonagoingconcernbasis.III.SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESANDACCOUNTING1.DeclarationforimplementingCAS

ThefinancialstatementsarepreparedinaccordancewithCAS,whichshowingatrueandfairviewofthefinancialpositionon31December2018,financialperformanceandcashflowin2018oftheCompanyandtheGroup.2.Accountingyear

TheaccountingyearoftheGroupisfrom1Januaryto31Decemberofeachcalendaryear.3.Businesscycle

Businesscyclereferstotheperiodfrompurchasingassetstobeprocessedtoreceivingcashor

cashequivalentsbytheCompany.ThebusinesscycleoftheCompanyis12months.4.Reportingcurrency

Renminbi("RMB")isthecurrencyoftheprimaryeconomicenvironmentinwhichtheCompany

anditsdomesticsubsidiariesoperate.Therefore,theCompanyanditsdomesticsubsidiaries

chooseRMBastheirfunctionalcurrency.OverseassubsidiariesoftheCompanyadoptCurrency

Euro,ChileanPesoandAustralianDollarastheirfunctionalcurrenciesonthebasisoftheprimary

economicenvironmentinwhichtheyoperate.TheCompanyadoptsRMBtoprepareitsfinancial

statements.

III.SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESANDACCOUNTING

-continued5.Businesscombination

5.1BusinesscombinationsnotinvolvingenterprisesundercommoncontrolandgoodwillAbusinesscombinationnotinvolvingenterprisesundercommoncontrolisabusinesscombinationinwhichallofthecombiningenterprisesarenotultimatelycontrolledbythesamepartyorpartiesbeforeandafterthecombination.Thecostofcombinationistheaggregateofthefairvalues,attheacquisitiondate,oftheassetsgiven,liabilitiesincurredorassumed,andequitysecuritiesissuedbytheacquirerinexchangeforcontroloftheacquiree.Theintermediaryexpensesincurredbytheacquirerinrespectofauditing,legalservices,valuationandconsultancyservices,etc.andotherassociatedadministrativeexpensesattributabletothebusinesscombinationarerecognisedinprofitorlosswhentheyareincurred.Qualifiedidentifiableassets,liabilitiesandcontingentliabilitiesobtainedbyacquirerintheacquisitionaremeasuredusingfairvalueattheacquisitiondate.Wherethecostofcombinationexceedstheacquirer’sinterestinthefairvalueoftheacquiree’sidentifiablenetassets,thedifferenceistreatedasanassetandrecognizedasgoodwill,whichismeasuredatcostoninitialrecognition.Wherethecostofcombinationislessthantheacquirer’sinterestinthefairvalueoftheacquiree’sidentifiablenetassets,theacquirerfirstlyreassessesthemeasurementofthefairvaluesoftheacquiree’sidentifiableassets,liabilitiesandcontingentliabilitiesandmeasurementofthecostofcombination.Ifafterthatreassessment,thecostofcombinationisstilllessthantheacquirer’sinterestinthefairvalueoftheacquiree’sidentifiablenetassets,theacquirerrecognizestheremainingdifferenceimmediatelyinprofitorlossforthecurrentperiod.Goodwillarisingonabusinesscombinationismeasuredatcostlessaccumulatedimpairmentlosses,andispresentedseparatelyintheconsolidatedfinancialstatements.6.Preparationofconsolidatedfinancialstatements

6.1PreparationofconsolidatedfinancialstatementsThescopeofconsolidationintheconsolidatedfinancialstatementsisdeterminedonthebasisofcontrol.Controlisthepowertogovernthefinancialandoperatingpoliciesofanenterprisesoastoobtainbenefitsfromitsoperatingactivities.TheGroupwillre-evaluateifchangesinrelevantfactsandcircumstancesresultsinchangesinrelevantfactorsinvolvedintheabovedefinitionofcontrol.ConsolidationofsubsidiarystartsfromthecontrolonthesubsidiarybytheGroupandendsatthelossofcontrolonthesubsidiarybytheGroup.Forthesubsidiariesthroughbusinesscombinationnotinvolvingenterprisesundercommoncontrol,theresultsofoperationsandcashflowsfromtheacquisitiondaywereproperlyincludedintheconsolidatedincomestatementsandconsolidatedcashflowstatements.

III.SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESANDACCOUNTING

-continued6.Preparationofconsolidatedfinancialstatements-continued

6.1Preparationofconsolidatedfinancialstatements-continuedThesignificantaccountingpoliciesandaccountingperiodsadoptedbythesubsidiariesaredeterminedbasedontheuniformaccountingpoliciesandaccountingperiodssetoutbytheCompany.Allsignificantintra-groupbalancesandtransactionsareeliminatedonconsolidation.Theportionofsubsidiaries'equitythatisnotattributabletotheCompanyistreatedasnon-controllinginterestsandpresentedas"non-controllinginterests"intheconsolidatedbalancesheetwithinshareholders'equity.Theportionofnetprofitsorlossesofsubsidiariesfortheperiodattributabletonon-controllinginterestsispresentedas"non-controllinginterests"intheconsolidatedincomestatementbelowthenetprofitlineitem.Whentheamountoflossfortheperiodattributabletothenon-controllingshareholdersofasubsidiaryexceedsthenon-controllingshareholders'portionoftheopeningbalanceofowners'equityofthesubsidiary,theexcessamountarestillallocatedagainstnon-controllinginterests.7.Cashandcashequivalents

Cashcomprisescashonhandanddepositsthatcanbereadilywithdrawnondemand.CashequivalentsaretheGroup'sshort-term,highlyliquidinvestmentsthatarereadilyconvertibletoknownamountsofcashandwhicharesubjecttoaninsignificantriskofchangesinvalue.8.Translationoftransactionsandfinancialstatementsdenominatedinforeigncurrencies

8.1TransactionsdenominatedinforeigncurrenciesAforeigncurrencytransactionisrecorded,oninitialrecognition,byapplyingthespotexchangerateonthedateofthetransaction.Atthebalancesheetdate,foreigncurrencymonetaryitemsaretranslatedintoRMBusingthespotexchangeratesatthebalancesheetdate.Exchangedifferencesarisingfromthedifferencesbetweenthespotexchangeratesprevailingatthebalancesheetdateandthoseoninitialrecognitionoratthepreviousbalancesheetdatearerecognisedinprofitorlossfortheperiod,exceptthat(1)exchangedifferencesrelatedtoaspecific-purposeborrowingdenominatedinforeigncurrencythatqualifyforcapitalisationarecapitalisedaspartofthecostofthequalifyingassetduringthecapitalisationperiod;(2)exchangedifferencesrelatedtohedginginstrumentsforthepurposeofhedgingagainstforeigncurrencyrisksareaccountedforusinghedgeaccounting;(3)exchangedifferencesarisingfromavailable-for-salenon-monetaryitemsdenominatedinforeigncurrenciesandchangesinthecarryingamountsofavailable-for-salemonetaryitemsarerecognisedasothercomprehensiveincomeandincludedincapitalreserve.

III.SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESANDACCOUNTING

-continued8.Translationoftransactionsandfinancialstatementsdenominatedinforeigncurrencies-continued

8.2Translationoffinancialstatementsdenominatedinforeigncurrencies-continuedForthepurposeofpreparingtheconsolidatedfinancialstatements,financialstatementsofaforeignoperationaretranslatedfromtheforeigncurrencyintoRMBusingthefollowingmethod:

assetsandliabilitiesonthebalancesheetaretranslatedatthespotexchangerateprevailingatthebalancesheetdate;shareholders'equityitemsexceptforretainedearningsaretranslatedatthespotexchangeratesatthedatesonwhichsuchitemsarose;allitemsintheincomestatementaswellasitemsreflectingthedistributionofprofitsaretranslatedatthespotexchangeratesonthedatesofthetransactions;theopeningbalanceofretainedearningsisthetranslatedclosingbalanceofthepreviousyear'sretainedearnings;theclosingbalanceofretainedearningsiscalculatedandpresentedonthebasisofeachtranslatedincomestatementandprofitdistributionitem.Thedifferencebetweenthetranslatedassetsandtheaggregateofliabilitiesandshareholders'equityitemsisseparatelypresentedastheexchangedifferencesarisingontranslationoffinancialstatementsdenominatedinforeigncurrenciesofothercomprehensiveincomeundertheshareholders'equityinthebalancesheet.Cashflowsarisingfromatransactioninforeigncurrencyandthecashflowsofaforeignsubsidiaryaretranslatedatthespotexchangerateonthedateofthecashflows.Theeffectofexchangeratechangesoncashandcashequivalentsisregardedasareconcilingitemandpresentedseparatelyinthecashflowstatementas"effectofexchangeratechangesoncashandcashequivalents".Theopeningbalancesandthecomparativefiguresofpreviousyeararepresentedatthetranslatedamountsinthepreviousyear'sfinancialstatements.9.Financialinstruments

FinancialassetsandfinancialliabilitiesarerecognisedwhentheGroupbecomesapartytothecontractualprovisionsoftheinstrument.Financialassetsandfinancialliabilitiesareinitiallymeasuredatfairvalue.Forotherfinancialassetsandfinancialliabilities,transactioncostsareincludedintheirinitialrecognisedamounts.9.1EffectiveinterestmethodTheeffectiveinterestmethodisamethodofcalculatingtheamortisedcostofafinancialassetorafinancialliability(oragroupoffinancialassetsorfinancialliabilities)andofallocatingtheinterestincomeorinterestexpenseovertherelevantperiod,usingtheeffectiveinterestrate.Theeffectiveinterestrateistheratethatexactlydiscountsestimatedfuturecashflowsthroughtheexpectedlifeofthefinancialassetorfinancialliabilityor,whereappropriate,ashorterperiodtothenetcarryingamountofthefinancialassetorfinancialliability.Whencalculatingtheeffectiveinterestrate,theGroupestimatesfuturecashflowsconsideringallcontractualtermsofthefinancialassetorfinancialliability(withoutconsideringfuturecreditlosses),andalsoconsidersallfeespaidorreceivedbetweenthepartiestothecontractgivingrisetothefinancialassetandfinancialliabilitythatareanintegralpartoftheeffectiveinterestrate,transactioncosts,andpremiumsordiscounts,etc.

III.SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESANDACCOUNTING

-continued9.Financialinstruments-continued

9.2Classification,recognitionandmeasurementoffinancialassetsOninitialrecognition,theGroup'sfinancialassetsareclassifiedintooneofthefourcategories,includingfinancialassetsatfairvaluethroughprofitorloss,held-to-maturityinvestments,loansandreceivables,andavailable-for-salefinancialassets.Allregularwaypurchasesorsalesoffinancialassetsarerecognisedandderecognisedonatradedatebasis.TheGroup'sfinancialassetsareboughtinaconventionalway,andrecognizedandterminatedaccordingtotheaccountingtransactiondate.FinancialassetsoftheGroupareloansandreceivablesandavailable-for-salefinancialassets.9.2.1LoansandreceivablesLoansandreceivablesarenon-derivativefinancialassetswithfixedordeterminablepaymentsthatarenotquotedinanactivemarket.FinancialassetsclassifiedasloansandreceivablesbytheGroupincludecashandbank,notesandaccountsreceivableandotherreceivables,etc.Loansandreceivablesaresubsequentlymeasuredatamortisedcostusingtheeffectiveinterestmethod.Gainorlossarisingfromderecognition,impairmentoramortisationisrecognisedinprofitorloss.9.2.2Available-for-salefinancialassetsAvailable-for-salefinancialassetsincludenon-derivativefinancialassetsthataredesignatedoninitialrecognitionasavailableforsale,andfinancialassetsthatarenotclassifiedasfinancialassetsatfairvaluethroughprofitorloss,loansandreceivablesorheld-to-maturityinvestments.Forinvestmentsinequityinstrumentsthatdonothaveaquotedmarketpriceinanactivemarketandwhosefairvaluecannotbereliablymeasured,theyaremeasuredatcost.9.3ImpairmentoffinancialassetsTheGroupassessesateachbalancesheetdatethecarryingamountsoffinancialassetsotherthanthoseatfairvaluethroughprofitorloss.Ifthereisobjectiveevidencethatafinancialassetisimpaired,theGroupdeterminestheamountofanyimpairmentloss.Objectiveevidencethatafinancialassetisimpairedisevidencethat,arisingfromoneormoreeventsthatoccurredaftertheinitialrecognitionoftheasset,theestimatedfuturecashflowsofthefinancialasset,whichcanbereliablymeasured,havebeenaffected.Objectiveevidencethatafinancialassetisimpairedincludesthefollowingobservableevents:

(1)Significantfinancialdifficultyoftheissuerorobligor;(2)Abreachofcontractbytheborrower,suchasadefaultordelinquencyininterestor

principalpayments;(3)TheGroup,foreconomicorlegalreasonsrelatingtotheborrower'sfinancialdifficulty,

grantingaconcessiontotheborrower;(4)Itbecomingprobablethattheborrowerwillenterbankruptcyorotherfinancial

reorganisations;

III.SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESANDACCOUNTING

-continued9.Financialinstruments-continued

9.3Impairmentoffinancialassets-continued(5)Thedisappearanceofanactivemarketforthatfinancialassetbecauseoffinancial

difficultiesoftheissuer;(6)Uponanoverallassessmentofagroupoffinancialassets,observabledataindicatesthat

thereisameasurabledecreaseintheestimatedfuturecashflowsfromthegroupof

financialassetssincetheinitialrecognitionofthoseassets,althoughthedecreasecannot

yetbeidentifiedwiththeindividualfinancialassetsinthegroup.Suchobservabledata

includes:

-Adversechangesinthepaymentstatusofborrowerinthegroupofassets;

-Economicconditionsinthecountryorregionoftheborrowerwhichmayleadtoa

failuretopaythegroupofassets;(7)Significantadversechangesinthetechnological,market,economicorlegalenvironment

inwhichtheissueroperates,indicatingthatthecostoftheinvestmentintheequityinstrumentmaynotberecoveredbytheinvestor;(8)Asignificantorprolongeddeclineinthefairvalueofaninvestmentinanequity

instrumentbelowitscost;namely,atthebalancesheetdate,iftheinitialcostofanequityinstrumentinvestmentismorethan50%(inclusive)inexcessofthefairvalueofsuchinvestment,ortheperiodinwhichtheinitialcostofanequityinstrumentinvestmentexceedsthefairvalueofsuchinvestmentisover12months(inclusive);(9)Otherobjectiveevidenceindicatingthereisanimpairmentofafinancialasset.

-ImpairmentoffinancialassetsmeasuredatamortisedcostIffinancialassetscarriedatamortisedcostareimpaired,thecarryingamountsofthefinancialassetsarereducedtothepresentvalueofestimatedfuturecashflows(excludingfuturecreditlossesthathavenotbeenincurred)discountedatthefinancialasset'soriginaleffectiveinterestrate.Theamountofreductionisrecognisedasanimpairmentlossinprofitorloss.If,subsequenttotherecognitionofanimpairmentlossonfinancialassetscarriedatamortisedcost,thereisobjectiveevidenceofarecoveryinvalueofthefinancialassetswhichcanberelatedobjectivelytoaneventoccurringaftertheimpairmentisrecognised,thepreviouslyrecognisedimpairmentlossisreversed.However,thereversalismadetotheextentthatthecarryingamountofthefinancialassetatthedatetheimpairmentisreverseddoesnotexceedwhattheamortisedcostwouldhavebeenhadtheimpairmentnotbeenrecognised.Forafinancialassetthatisindividually,theGroupassessestheassetindividuallyforimpairment.-ImpairmentofavailableforsaleassetsmeasuredatcostIfanimpairmentlosshasbeenincurredonaninvestmentinunquotedequityinstrument(withoutaquotedpriceinanactivemarket)whosefairvaluecannotbereliablymeasured,oronaderivativefinancialassetthatislinkedtoandmustbesettledbydeliveryofsuchanunquotedequityinstrument,thecarryingamountofthefinancialassetisreducedtothepresentvalueofestimatedfuturecashflowsdiscountedatthecurrentmarketrateofreturnforasimilarfinancialasset.Theamountofreductionisrecognisedasanimpairmentlossinprofitorloss.Theimpairmentlossonsuchfinancialassetisnotreversedonceitisrecognised.

III.SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESANDACCOUNTING

-continued9.Financialinstruments-continued

9.4TransferoffinancialassetsTheGroupderecognisesafinancialassetifoneofthefollowingconditionsissatisfied:(1)thecontractualrightstothecashflowsfromthefinancialassetexpire;or(2)thefinancialassethasbeentransferredandsubstantiallyalltherisksandrewardsofownershipofthefinancialassetistransferredtothetransferee;or(3)althoughthefinancialassethasbeentransferred,theGroupneithertransfersnorretainssubstantiallyalltherisksandrewardsofownershipofthefinancialassetbuthasnotretainedcontrolofthefinancialasset.Foratransferofafinancialassetinitsentiretythatsatisfiesthederecognitioncriteria,thedifferencebetween(1)thecarryingamountofthefinancialassettransferred;and(2)thesumoftheconsiderationreceivedfromthetransferandanycumulativegainorlossthathasbeenrecognisedinothercomprehensiveincome,isrecognisedinprofitorloss.9.5Classification,recognitionandmeasurementoffinancialliabilitiesDebtandequityinstrumentsissuedbytheGroupareclassifiedintofinancialliabilitiesorequityonthebasisofthesubstanceofthecontractualarrangementsanddefinitionsoffinancialliabilityandequityinstrument.Oninitialrecognition,financialliabilitiesareclassifiedintofinancialliabilitiesatfairvaluethroughprofitorlossandotherfinancialliabilities.Thefinancialliabilitiesingroupareotherfinancialliabilities,includingshort-termborrowings,notespayable,accountpayables,otherpayables,non-currentliabilitiesduewithinoneyearandlong-termpayablesetc.9.5.1OtherfinancialliabilitiesOtherfinancialliabilitiesaresubsequentlymeasuredatamortisedcostusingtheeffectiveinterestmethod,withgainorlossarisingfromderecognitionoramortisationrecognisedinprofitorloss.9.6DerecognitionoffinancialliabilitiesTheGroupderecognisesafinancialliability(orpartofit)onlywhentheunderlyingpresentobligation(orpartofit)isdischarged.WhentheGroupderecognisesafinancialliabilityorapartofit,itrecognisesthedifferencebetweenthecarryingamountofthefinancialliability(orpartofthefinancialliability)derecognisedandtheconsiderationpaid(includinganynon-cashassetstransferredornewfinancialliabilitiesassumed)inprofitorloss.9.7OffsettingfinancialassetsandfinancialliabilitiesWheretheGrouphasalegalrightthatiscurrentlyenforceabletosetofftherecognisedfinancialassetsandfinancialliabilities,andintendseithertosettleonanetbasis,ortorealisethefinancialassetandsettlethefinancialliabilitysimultaneously,afinancialassetandafinancialliabilityshallbeoffsetandthenetamountispresentedinthebalancesheet.Exceptfortheabovecircumstances,financialassetsandfinancialliabilitiesshallbepresentedseparatelyinthebalancesheetandshallnotbeoffset.

III.SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESANDACCOUNTING

-continued9.Financialinstruments-continued

9.8EquityinstrumentsAnequityinstrumentisanycontractthatevidencesaresidualinterestintheassetsoftheGroupafterdeductingallofitsliabilities.TheGroupdoesnotrecogniseanychangesinthefairvalueofequityinstruments.Theequityinstrumentstransactionexpensesdeductedfromequity.TheGrouptreatsdistributiontoequityinstrumentholdersasprofitdistributions.Shareholderequityisnotaffectedbysharedividenddistributed.10.AccountsReceivable

TheGroupbelievesthattheindividualreceivablesareallsignificant,andthecorrespondingreceivablesareindividuallytestedforimpairment,andindividualrecognitionmethodisusedtoconfirmbaddebtprovision.11.Inventories

11.1CategoriesofinventoriesTheGroup'sinventoriesmainlyincluderawmaterials,workinprogressandfinishedgoods.Inventoriesareinitiallymeasuredatcost.Costofinventoriescomprisesallcostsofpurchase,costsofconversionandotherexpendituresincurredinbringingtheinventoriestotheirpresentlocationandcondition.AgriculturalproductsharvestedarereportedinaccordancewiththeCAS1Inventories.11.2ValuationmethodofinventoriesupondeliveryTheactualcostofinventoriesupondeliveryiscalculatedusingtheweightedaveragemethod.11.3BasisfordeterminingnetrealisablevalueofinventoriesandprovisionmethodsfordeclineinvalueofinventoriesAtthebalancesheetdate,inventoriesaremeasuredatthelowerofcostandnetrealisablevalue.Ifthenetrealisablevalueisbelowthecostofinventories,aprovisionfordeclineinvalueofinventoriesismade.Netrealisablevalueistheestimatedsellingpriceintheordinarycourseofbusinesslesstheestimatedcostsofcompletion,theestimatedcostsnecessarytomakethesaleandrelevanttaxes.Netrealisablevalueisdeterminedonthebasisofclearevidenceobtained,andtakesintoconsiderationthepurposesofholdinginventoriesandeffectofpostbalancesheetevents.Provisionfordeclineinvalueofotherinventoriesismadebasedontheexcessofcostofinventoryoveritsnetrealisablevaluebasedoncategoriesofinventories.Aftertheprovisionfordeclineinvalueofinventoriesismade,ifthecircumstancesthatpreviouslycausedinventoriestobewrittendownbelowcostnolongerexistsothatthenetrealisablevalueofinventoriesishigherthantheircost,theoriginalprovisionfordeclineinvalueisreversedandthereversalisincludedinprofitorlossfortheperiod.

III.SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESANDACCOUNTING

-continued11.Inventories-continued

11.4InventorycountsystemTheperpetualinventorysystemismaintainedforstocksystem.11.5Amortisationmethodforlowcostandshort-livedconsumableitemsandpackagingmaterialsPackagingmaterialsandlowcostandshort-livedconsumableitemsareamortisedusingtheimmediatewrite-offmethod.12.Non-currentassetsheldforsale

Non-currentassetsanddisposalgroupsareclassifiedasheldforsalecategorywhentheGrouprecoversthebookvaluethroughasale(includinganexchangeofnonmonetaryassetsthathascommercialsubstance)ratherthancontinuinguse.Non-currentassetsordisposalgroupsclassifiedasheldforsalearerequiredtosatisfythefollowingconditions:(1)theassetordisposalgroupisavailableforimmediatesaleinitspresentconditionsubjectonlytotermsthatareusualandcustomaryforsalesofsuchassetordisposalgroup;(2)thesaleishighlyprobable,i.e.theGrouphasmadearesolutionaboutsellingplanandobtainedaconfirmedpurchasecommitmentandthesaleisexpectedtobecompletedwithinoneyear.TheGroupmeasurestheno-currentassetsordisposalgroupsclassifiedasheldforsaleattheloweroftheircarryingamountandfairvaluelesscoststosell.Wherethecarryingamountishigherthanthenetamountoffairvaluelesscoststosell,carryingamountshouldbereducedtothenetamountoffairvaluelesscoststosell,andsuchreductionisrecognizedinimpairmentlossofassetsandincludedinprofitorlossfortheperiod.Meanwhile,provisionforimpairmentofheld-for-saleassetsaremade.Whenthereisincreaseinthenetamountoffairvalueofnon-currentassetsheldforsalelesscoststosellatthebalancesheetdate,theoriginaldeductionshouldbereversedinimpairmentlossofassetsrecognizedaftertheclassificationofheld-for-salecategory,andthereverseamountisincludeinprofitorlossfortheperiod.Non-currentassetsheldforsaleinnon-currentassetsarenotsubjecttodepreciationoramortization.13.Longtermequityinvestments

13.1Basisfordeterminingcontrol,jointcontrolandsignificantinfluenceControlisthepowertogovernthefinancialandoperatingpoliciesofanentitysoastoobtainbenefitsfromitsactivities.Jointcontrolisthecontractuallyagreedsharingofcontroloveraneconomicactivity,andexistsonlywhenthestrategicfinancialandoperatingpolicydecisionsrelatingtotheactivityrequiretheunanimousconsentofthepartiessharingcontrol.Significantinfluenceisthepowertoparticipateinthefinancialandoperatingpolicydecisionsoftheinvesteebutisnotcontrolorjointcontroloverthosepolicies.Whendeterminingwhetheraninvestingenterpriseisabletoexercisecontrolorsignificantinfluenceoveraninvestee,theeffectofpotentialvotingrightsoftheinvestee(forexample,warrantsandconvertibledebts)heldbythe

investingenterprisesorotherpartiesthatarecurrentlyexercisableorconvertibleshallbeconsidered.

III.SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESANDACCOUNTING

-continued13.Longtermequityinvestments-continued

13.2DeterminationofinitialinvestmentcostForalong-termequityinvestmentacquirednotinvolvingenterprisesundercommoncontrol,theinvestmentcostofthelong-termequityinvestmentisthecostofacquisition.Auditfee,legalservices,consultingfeesandotherrelatedmanagementcostsinacquisitionareexpensedinprofitsandlosseswhenhappened.Otherlong-termequityinvestmentsacquiredfromotherthanacquisitionsarerecognisedusingoriginalcost.13.3Subsequentmeasurementandrecognitionofprofitorloss13.3.1Long-termequityinvestmentaccountedforusingthecostmethodTheGroupaccountsforlong-termequityinvestmentusingthecostmethod.AsubsidiaryisaninvesteethatiscontrolledbytheGroup.Underthecostmethod,along-termequityinvestmentismeasuredatinitialinvestmentcost.Long-termequityinvestmentisadjustedwhencapitalisaddedorrecollected.Investmentincomeisrecognisedintheperiodinaccordancewiththeattributableshareofcashdividendsorprofitdistributionsdeclaredbytheinvestee.13.4Disposaloflong-termequityinvestmentsOndisposalofalongtermequityinvestment,thedifferencebetweentheproceedsactuallyreceivedandreceivableandthecarryingamountisrecognisedinprofitorlossfortheperiod.14.Investmentproperties

Investmentpropertyispropertyheldtoearnrentalsorforcapitalappreciationorboth.Aninvestmentpropertyismeasuredinitiallyatcost.SubsequentexpendituresincurredforsuchinvestmentpropertyareincludedinthecostoftheinvestmentpropertyifitisprobablethateconomicbenefitsassociatedwithaninvestmentpropertywillflowtotheGroupandthesubsequentexpenditurescanbemeasuredreliably.Othersubsequentexpendituresarerecognizedinprofitorlossintheperiodinwhichtheyareincurred.TheGroupusesthecostmodelforsubsequentmeasurementofinvestmentproperty,andadoptsadepreciationoramortizationpolicyfortheinvestmentpropertywhichisconsistentwiththatforbuildingsorlanduserights.Whenaninvestmentpropertyissold,transferred,retiredordamaged,theGrouprecognizestheamountofanyproceedsondisposalnetofthecarryingamountandrelatedtaxesinprofitorlossfortheperiod.

III.SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESANDACCOUNTING

-continued15.Fixedassets

15.1RecognitioncriteriaforfixedassetsFixedassetsaretangibleassetsthatareheldforuseintheproductionorsupplyofgoodsorservices,forrentaltoothers,orforadministrativepurposes,andhaveusefullivesofmorethanoneaccountingyear.AfixedassetisrecognisedonlywhenitisprobablethateconomicbenefitsassociatedwiththeassetwillflowtotheGroupandthecostoftheassetcanbemeasuredreliably.Fixedassetsareinitiallymeasuredatcost.SubsequentexpendituresincurredforthefixedassetareincludedinthecostofthefixedassetandifitisprobablethateconomicbenefitsassociatedwiththeassetwillflowtotheGroupandthesubsequentexpenditurescanbemeasuredreliably.Meanwhilethecarryingamountofthereplacedpartisderecognised.Othersubsequentexpendituresarerecognisedinprofitorlossintheperiodinwhichtheyareincurred.15.2DepreciationofeachcategoryoffixedassetsAfixedassetisdepreciatedoveritsusefullifeusingthestraight-linemethodsincethemonthsubsequenttotheoneinwhichitisreadyforintendeduse.Theusefullife,estimatednetresidualvaluerateandannualdepreciationrateofeachcategoryoffixedassetsareasfollows:

EstimatedEstimatedAnnualusefulliferesidualratedepreciationrateBuildings20-40years0-5%2.4%-5.0%Machinery5-30years0-5%3.2%-20.0%MotorVehicles4-12years0-5%7.9%-25.0%Estimatednetresidualvalueassumesthesituationwhereafixedassetexpireforitsestimatedusefullifeandisinitsexpectedfinalstatus.EstimatednetresidualvalueistheamountthattheGroupcanobtainfromthedisposallessexpecteddisposalfees.15.3OtherexplanationsIfafixedassetisupondisposalornofutureeconomicbenefitsareexpectedtobegeneratedfromitsuseordisposal,thefixedassetisderecognised.Whenafixedassetissold,transferred,retiredordamaged,theamountofanyproceedsondisposaloftheassetnetofthecarryingamountandrelatedtaxesarerecognisedinprofitorlossfortheperiod.TheGroupreviewstheusefullifeandestimatednetresidualvalueofafixedassetandthedepreciationmethodappliedatleastonceateachfinancialyear-end,andaccountforanychangeasachangeinanaccountingestimate.

III.SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESANDACCOUNTING

-continued16.Constructioninprogress

Constructioninprogressismeasuredatitsactualcosts.Theactualcostsincludevariousconstructionexpendituresduringtheconstructionperiod,borrowingcostscapitalisedbeforeitisreadyforintendeduseandotherrelevantcosts.Constructioninprogressisnotdepreciated.Constructioninprogressistransferredtoafixedassetwhenitisreadyforintendeduse.17.Borrowingcosts

Borrowingcostsdirectlyattributabletotheacquisition,constructionorproductionofqualifyingassetarecapitalisedwhenexpendituresforsuchassetandborrowingcostsareincurredandactivitiesrelatingtotheacquisition,constructionorproductionoftheassetthatarenecessarytopreparetheassetforitsintendeduseorsalehavecommenced.Capitalisationofborrowingcostsceaseswhenthequalifyingassetbeingacquired,constructedorproducedbecomesreadyforitsintendeduseorsale.Otherborrowingcostsarerecognisedasanexpenseintheperiodinwhichtheyareincurred.Wherefundsareborrowedunderaspecific-purposeborrowing,theamountofinteresttobecapitalizedistheactualinterestexpenseincurredonthatborrowingfortheperiodlessanybankinterestearnedfromdepositingtheborrowedfundsbeforebeingusedontheassetoranyinvestmentincomeonthetemporaryinvestmentofthosefunds.18.Biologicalassets

TheGroup'sbiologicalassetsarebearerbiologicalassets.18.1BearerbiologicalassetsBearerbiologicalassetsarebiologicalassets,forexample,heldfortheproductionofagriculturalproduce,provisionofservicesorrental,BearerbiologicalassetsintheGrouparevines.Abearerbiologicalassetisinitiallymeasuredatcost.Thecostofabearerbiologicalassetself-grownorself-bredcomprisesthosecostsnecessarilyincurredanddirectlyattributabletotheassetbeforetheassetbecomesavailableforitsintendedproductionandoperatingpurposes,andanyborrowingcostmeetingthecapitalisationcriteria.TheGroupchargedeprecationforproductivebiologicalassetswhichsatisfyexpectedproduction,andrecordthedeprecationinbalancesheetandincomestatement.TheGroupusesstraightlinemethodtocalculatethedeprecation,anddetailsasfollows:

EstimatedEstimatedAnnualCategoryusefulliferesidualratedepreciationrateVines20years-5.0%TheGroupevaluatestheusefullifeandexpectednetsalvagevaluebyconsideringthenormalproducinglifeofthebearerbiologicalassets.

III.SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESANDACCOUNTING

-continued18.Biologicalassets-continued

18.1Bearerbiologicalassets-continuedTheGroupreviewstheusefullifeandestimatednetresidualvalueofbearerbiologicalassetsandthedepreciationmethodappliedatleastonceateachfinancialyear-end,andaccountforanychangeasachangeinanaccountingestimate.Onthesale,identificationofanyshortagesduringstocktaking,deathordamageofbiologicalasset,theproceedsondisposalnetofthecarryingamountandrelevanttaxesisrecognisedinprofitorlossforthecurrentperiod.19.Intangibleassets

Intangibleassetsincludelanduserights,softwareandtrademark,etc.Anintangibleassetismeasuredinitiallyatcostmethod.Whenanintangibleassetwithafiniteusefullifeisavailableforuse,itsoriginalcostlessnetresidualvalueandanyaccumulatedimpairmentlossesisamortisedoveritsestimatedusefullifeusingthestraight-linemethod.Intangibleassetswithindefiniteusefullivesarenotamortized.Theusefullivesoftheintangibleassetsareasfollows:

AnnualItemUsefullifeNetresidualvalueamortizationrateLanduserights40-50years-2.0%-2.5%Software5-10years-10.0%-20.0%Trademark10years-10.0%Exceptfortheaboveintangibleassetswithfiniteusefullives,theGrouphadalsointangibleassetswithinfiniteusefullivesincludingthelanduserightandtrademark.LanduserightswithinfiniteusefullivesarepermanentlanduserightswithpermanentownershipheldbytheGroupundertherelevantChileandAustralianlawsarisingfromtheGroup’sacquisitionofVi?aIndómita,S.A.,Vi?aDosAndes,S.A.,andBodegasSantaAliciaSPA.(collectivelyreferredtoasthe"ChileIndomitaWineGroup"),andtheacquisitionofKilikanoonEstatePtyLtd.(hereinafterreferredtoasthe"AustraliaKilikanoonEstate"),thereforetherewasnoamortization.TherighttousetrademarkreferstothetrademarkheldbytheGrouparisingfromtheacquisitionoftheChileIndomitaWineGroupandtheAustraliaKilikanoonEstatewithinfiniteusefullives.Thevaluationoftrademarkwasbasedonthetrendsinthemarketandcompetitiveenvironment,productcycle,andmanaginglong-termdevelopmentstrategy.ThosebasisindicatedthetrademarkwillprovidenetcashflowstotheGroupwithinanuncertainperiod.TheusefullifeisindefiniteasitwashardtopredicttheperiodthatthetrademarkwouldbringeconomicbenefitstotheGroup.Foranintangibleassetwithadefiniteusefullife,theGroupreviewstheusefullifeandamortisationmethodattheendoftheperiod,andmakesadjustmentswhennecessary.

III.SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESANDACCOUNTING

-continued20.Impairmentoflong-termassets

TheGroupandtheCompanyreviewtheimpairmentstatusoflong-termequityinvestments,fixedassets,investmentproperties,constructioninprogress,bearerbiologicalassetandintangibleassetswithfiniteusefullifeattheendofeachyear.Ifthereisanyindicationforimpairment,theGroupestimatestherecoverableamountoftheasset.Intangibleassetswithindefiniteusefullifeandgoodwillaretestedforimpairmentannually,irrespectiveofwhetherthereisanyindicationthattheassetsmaybeimpaired.Recoverableamountisestimatedonindividualbasis.Ifitisnotpracticaltoestimatetherecoverableamountofanindividualasset,therecoverableamountoftheassetgrouptowhichtheassetbelongswillbeestimated.Therecoverableamountofanassetisthehigherofitsfairvaluelesscostsofdisposalandthepresentvalueofthefuturecashflowsexpectedtobederivedfromtheasset.Ifrecoverableamountofassetsislessthanbookvalue,thedifferenceisrecognisedasimpairmentprovisionandexpensedincurrentperiod.Goodwillistestedforimpairmentatleastattheendofeachyear.Forthepurposeofimpairmenttesting,goodwillisconsideredtogetherwiththerelatedassetsgroup(s),i.e.,goodwillisreasonablyallocatedtotherelatedassetsgroup(s)oreachofassetsgroup(s)expectedtobenefitfromthesynergiesofthecombination.Animpairmentlossisrecognisediftherecoverableamountoftheassetsgrouporsetsofassetsgroups(includinggoodwill)islessthanitscarryingamount.Theimpairmentlossisfirstlyallocatedtoreducethecarryingamountofanygoodwillallocatedtosuchassetsgrouporsetsofassetsgroups,andthentotheotherassetsofthegrouppro-rataonthebasisofthecarryingamountofeachasset(otherthangoodwill)inthegroup.Theimpairmentisrecognisedinprofitorlossfortheperiodinwhichitisincurredandwillnotbereversedinanysubsequentperiod.21.Longtermprepaidexpenses

Long-termprepaidexpensesareamortizedequallyovertheperiodofprojectedearnings.Theamortizationperiodareasfollows:

AmortizationperiodLandrequisitionfee50yearsLandleaseprepayment50yearsGreeningfee5-20yearsLeaseholdimprovement3-5yearsOthers3years

III.SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESANDACCOUNTING

-continued22.Employeebenefits

22.1Short-termemployeebenefitsInanaccountingperiodinwhichanemployeehasrenderedservicetotheGroup,theGrouprecognisestheactualemployeebenefitsforthatserviceasaliability.TheemployeebenefitsoftheGroupareeitherincludedincostofrelatedassetsorchargedtoprofitorlossintheperiodwhentheyareincurred.Non-monetaryemployeebenefitsaremeasuredatfairvalue.Socialinsurancessuchasmedicalinsurance,injuryinsuranceandpregnancyinsurance,housingfunds,laborunionandemployeeeducationfeespaidbytheGroupforemployees,arerecognisedasrelevantliabilityintheperiodinwhichtheemployeesprovideservice,inaccordancewiththeregulatedrecognitionbasisandpercentage.Therelatedexpendituresareeitherincludedincostofrelatedassetsorchargedtoprofitorlossintheperiodwhentheyareincurred.22.2AccountingtreatmentsofretiredbenefitsRetiredbenefitsoftheGroupareallpredeterminedprovisionplan.Intheperiodinwhichtheemployeesprovideservice,theGrouprecogniseliabilityinaccordancewiththeamountstobepaidcalculatedaccordingtothepredeterminedprovisionplan,andtherelatedexpendituresareeitherincludedincostofrelatedassetsorchargedtoprofitorlossintheperiodwhentheyareincurred.22.3AccountingtreatmentsofterminationbenefitsWhenprovidingterminationbenefitstoemployees,theGrouprecogniseemployeebenefitspayrollresultingfromterminationbenefitsattheearlierof:theGroupcannotunilaterallywithdrawfromtheterminationplanortheredundancyoffer;theGrouprecogniserelevantcostsandexpensesrelatedtothepaymentofterminationbenefitsinrestructuring.23.Revenue

23.1RevenuefromsaleofgoodsRevenuefromsaleofgoodsisrecognisedwhentheGrouphastransferredtothebuyerthesignificantrisksandrewardsofownershipofthegoods.TheGroupretainsneithercontinuingmanagerialinvolvementtothedegreeusuallyassociatedwithownershipnoreffectivecontroloverthegoodssold.TheamountofrevenuecanbemeasuredreliablyanditisprobablethattheassociatedeconomicbenefitswillflowtotheGroup.Theassociatedcostsincurredortobeincurredcanbemeasuredreliably.23.2RevenuefromrenderingofservicesWhentheoutcomeofatransactioninvolvingtherenderingofservicescanbeestimatedreliably,revenueassociatedwiththetransactionshallberecognizedbyreferencethestageofcompletionofthetransactionatthereportingdate.Theoutcomeofatransactioncanbeestimatedreliably.

III.SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESANDACCOUNTING

-continued23.Revenue-continued

23.2Revenuefromrenderingofservices-continuedWhentheoutcomeofthetransactioninvolvingtherenderingofservicescannotbeestimatedreliably,revenueisrecognisedonlytotheextentofthecostsincurredthatwillberecoverable,andthecostsincurredarerecognisedasexpensesfortheperiod.Whenitisnotprobablethatthecostsincurredwillberecovered,revenueisnotrecognised.24.Governmentgrants

Governmentgrantsaretransferofmonetaryassetsandnon-monetaryassetsfromthegovernmenttotheGroupatnoconsideration.AgovernmentgrantisrecognisedonlywhentheGroupcancomplywiththeconditionsattachingtothegrantandtheGroupwillreceivethegrant.Monetarygovernmentgrantsaremeasuredbytheamountreceivedorreceivable.24.1GovernmentgrantrelatedtoanassetAgovernmentgrantrelatedtoanassetisrecognisedasdeferredincome,andamortisedtoprofitorlossovertheusefullifeoftherelatedassetonastraightlinebasis.24.2GovernmentgrantrelatedtoincomeForagovernmentgrantrelatedtoincome,ifthegrantisacompensationforrelatedexpensesorlossestobeincurredinsubsequentperiods,thegrantisrecognisedasdeferredincome,andrecognisedinprofitorlossovertheperiodsinwhichtherelatedcostsarerecognised.Ifthegrantisacompensationforrelatedexpensesorlossesalreadyincurred,thegrantisrecognisedimmediatelyinprofitorlossfortheperiod.AgovernmentgrantrelatedtotheGroup'sdailyactivitiesisrecognizedinotherincomebasedonthenatureofeconomicactivities;agovernmentgrantisnotrelatedtotheGroup'sdailyactivitiesisrecognizedinnon-operatingincome.TheCompany'sgovernmentloanswithbelow-marketrateofinterestaredirectlypaidtotheCompany,andtherelatedlowrateinterestwillwriteoffrelatedborrowingcosts.Thegovernmentloanswithbelow-marketrateofinterestobtainedbyothersubsidiariesoftheGrouparegovernmentloans,whichisprovidedbylocalbureauoffinancethroughbankwithbelow-marketrateofinterest.TheactualamountoftheloanreceivedbytheGrouprecognizedasborrowings,andtherelatedborrowingcostsarecalculatedaccordingtotheprincipaloftheloanandthebelow-marketrate.25.Deferredtaxassets/deferredtaxliabilities

Theincometaxexpensesincludecurrentincometaxanddeferredincometax.25.1CurrentincometaxAtthebalancesheetdate,currentincometaxliabilities(orassets)forthecurrentandpriorperiodsaremeasuredattheamountexpectedtobepaid(orrecovered)accordingtotherequirementsoftaxlaws.

III.SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESANDACCOUNTING

-continued25.Deferredtaxassets/deferredtaxliabilities-continued

25.2DeferredtaxassetsanddeferredtaxliabilitiesFortemporarydifferencesbetweenthecarryingamountsofcertainassetsorliabilitiesandtheirtaxbase,orbetweenthenilcarryingamountofthoseitemsthatarenotrecognisedasassetsorliabilitiesandtheirtaxbasethatcanbedeterminedaccordingtotaxlaws,deferredtaxassetsandliabilitiesarerecognisedusingthebalancesheetliabilitymethod.Deferredtaxisgenerallyrecognisedforalltemporarydifferences.Deferredtaxassetsfordeductibletemporarydifferencesarerecognisedtotheextentthatitisprobablethattaxableprofitswillbeavailableagainstwhichthedeductibletemporarydifferencescanbeutilised.However,fortemporarydifferencesassociatedwiththeinitialrecognitionofgoodwillandtheinitialrecognitionofanassetorliabilityarisingfromatransaction(notabusinesscombination)thataffectsneithertheaccountingprofitnortaxableprofits(ordeductiblelosses)atthetimeoftransaction,nodeferredtaxassetorliabilityisrecognised.Fordeductiblelossesandtaxcreditsthatcanbecarriedforward,deferredtaxassetsarerecognisedtotheextentthatitisprobablethatfuturetaxableprofitswillbeavailableagainstwhichthedeductiblelossesandtaxcreditscanbeutilised.Deferredtaxliabilitiesarerecognisedfortaxabletemporarydifferencesassociatedwithinvestmentsinsubsidiariesandassociates,andinterestsinjointventures,exceptwheretheGroupisabletocontrolthetimingofthereversalofthetemporarydifferenceanditisprobablethatthetemporarydifferencewillnotreverseintheforeseeablefuture.Deferredtaxassetsarisingfromdeductibletemporarydifferencesassociatedwithsuchinvestmentsandinterestsareonlyrecognisedtotheextentthatitisprobablethattherewillbetaxableprofitsagainstwhichtoutilisethebenefitsofthetemporarydifferencesandtheyareexpectedtoreverseintheforeseeablefuture.Atthebalancesheetdate,deferredtaxassetsandliabilitiesaremeasuredatthetaxrates,accordingtotaxlaws,thatareexpectedtoapplyintheperiodinwhichtheassetisrealisedortheliabilityissettled.Currentanddeferredtaxexpensesorincomearerecognisedinprofitorlossfortheperiod,exceptwhentheyarisefromtransactionsoreventsthataredirectlyrecognisedinothercomprehensiveincomeorinshareholders'equity,inwhichcasetheyarerecognisedinothercomprehensiveincomeorinshareholders'equity;andwhentheyarisefrombusinesscombinations,inwhichcasetheyadjustthecarryingamountofgoodwill.Atthebalancesheetdate,thecarryingamountofdeferredtaxassetsisreviewedandreducedifitisnolongerprobablethatsufficienttaxableprofitswillbeavailableinthefuturetoallowthebenefitofdeferredtaxassetstobeutilised.Suchreductioninamountisreversedwhenitbecomesprobablethatsufficienttaxableprofitswillbeavailable.

III.SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESANDACCOUNTING

-continued25.Deferredtaxassets/deferredtaxliabilities-continued

25.3NetoffofincometaxesWhentheGrouphasalegalrighttosettleonanetbasisandintendseithertosettleonanetbasisortorealisetheassetsandsettletheliabilitiessimultaneously,currenttaxassetsandcurrenttaxliabilitiesareoffsetandpresentedonanetbasis.WhentheGrouphasalegalrighttosettlecurrenttaxassetsandliabilitiesonanetbasis,anddeferredtaxassetsanddeferredtaxliabilitiesrelatetoincometaxesleviedbythesametaxationauthorityoneitherthesametaxableentityordifferenttaxableentitieswhichintendeithertosettlecurrenttaxassetsandliabilitiesonanetbasisortorealisetheassetsandliabilitiessimultaneously,ineachfutureperiodinwhichsignificantamountsofdeferredtaxassetsorliabilitiesareexpectedtobereversed,deferredtaxassetsanddeferredtaxliabilitiesareoffsetandpresentedonanetbasis.26.Leases

Leasesareclassifiedasfinanceleaseswheneverthetermsoftheleasetransfersubstantiallyalltherisksandrewardsofownershiptothelessee.Allotherleasesareclassifiedasoperatingleases.26.1.Operatingleaseaccountingmethods26.1.1TheGroupaslesseeunderoperatingleasesOperatingleasepaymentsarerecognizedonastraight-linebasisoverthetermoftherelevantlease,andareeitherincludedinthecostofrelatedassetorchargedtoprofitorlossfortheperiod.Initialdirectcostsincurredarechargedtoprofitorlossfortheperiod.26.1.2TheGroupaslessorunderoperatingleasesRentalincomefromoperatingleasesisrecognizedinprofitorlossonastraight-linebasisoverthetermoftherelevantlease.Initialdirectcostswithmorethananinsignificantamountarecapitalizedwhenincurred,andarerecognizedinprofitorlossonthesamebasisasrentalincomeovertheleaseterm.Otherinitialdirectcostswithaninsignificantamountarechargedtoprofitorlossintheperiodinwhichtheyareincurred.Contingentrentsarechargedtoprofitorlossintheperiodinwhichtheyactuallyarise.27.Changesinaccountingpolicies

TheGrouphasadoptedtheNoticeoftheRevisedFormatofFinancialStatementsforGeneralBusinessEnterprisein2018(CaiKuai(2018)No.15,hereinafterreferredtoasthe"CaiKuaiNo.15Document")releasedbytheMoFon15June2018sincethepreparationofthefinancialstatementsfor2018.

III.SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIESANDACCOUNTING

-continued27.Changesinaccountingpolicies-continued

CaiKuaiNo.15Documentrevisedthepresentationitemsonthebalancesheetandtheincomestatement,whichareasfollows:addthelineitemsof"notesandaccountsreceivable","notesandaccountspayable","researchanddevelopmentexpenses";revisethepresentationof"otherpayables","fixedassets","constructioninprogress","otherpayables","long-termpayables"and"administrativeexpenses";lessthelineitemsof"notesreceivable","accountsreceivable","dividendsreceivable"and"interestreceivable","disposaloffixedassets","materialsforconstructionoffixedassets","notespayable","accountspayable","dividendspayable",and"specialpayables",addthelineitemsof"including:interestexpenses"and"interestincome"undertheitemof"financialexpenses";andadjustthepresentationlocationofcertainitemsintheincomestatements.Forchangesofthepresentationitemsstatedabove,theGrouphasappliedretrospectivelyforaccountingtreatmentsandadjustedthecomparabledataoftheprioryearforcomparableperiods.IV.CRITICALJUDGMENTSINAPPLYINGACCOUNTINGPOLICIESANDKEY

ASSUMPTIONSANDUNCERTAINTIESINACCOUNTINGESTIMATESIntheapplicationofaccountingpoliciesassetoutinNoteIII,theGroupisrequiredtomakejudgments,estimatesandassumptionsaboutthecarryingamountsofitemsinthefinancialstatementsthatcannotbemeasuredaccurately,duetotheinternaluncertaintiesoftheoperatingactivities.Thesejudgments,estimatesandassumptionsarebasedonhistoricalexperienceoftheGroup'smanagementaswellasotherfactorsthatareconsideredtoberelevant.Actualresultsmaydifferfromtheseestimates.TheGroupperiodicallyreviewthejudgments,estimatesandassumptionsaboveonagoingconcernbasis.Forthosechangesinaccountingpoliciesthatonlyaffectcurrentfinancialstatements,theinfluencesarerecognizedincurrentperiod.Forthosechangesinaccountingpoliciesthataffectbothcurrentandfuturefinancialstatements,theinfluencesarerecognizedinbothcurrentandprospectiveperiods.KeyassumptionsanduncertaintiesinaccountingestimatesThefollowingarethekeyassumptionsanduncertaintiesinaccountingestimatesattheendofthereportingperiod,thatmayhaveasignificantriskofcausingamaterialadjustmenttothecarryingamountsofassetsandliabilitiesinthefutureperiod.DeferredtaxassetsrecognizedfordeductiblelossesDeferredtaxassetsarerecognizedforallunusedtaxlossestotheextentthatitisprobablethattaxableprofitwillbeavailableagainstwhichthelossescanbeutilized.Significantmanagementjudgmentisrequiredtodeterminetheamountofdeferredtaxassetsthatcanberecognized,baseduponthelikelytimingandleveloffuturetaxableprofitstogetherwithfuturetaxplanningstrategies.

IV.CRITICALJUDGMENTSINAPPLYINGACCOUNTINGPOLICIESANDKEY

ASSUMPTIONSANDUNCERTAINTIESINACCOUNTINGESTIMATES-continuedSignificantaccountingjudgmentsandaccountingestimates-continuedDepreciationoffixedassetsAssetoutinNoteIII-15,thedepreciationiscalculatedonthestraightlinebasistowrite-offthecostofeachitemoffixedassetstoitsresidualvalueoveritsestimatedusefullife.TheGroup'smanagementdeterminestheestimatedusefullivesforitsfixedassets.Thisestimateisbasedonthehistoricalexperienceoftheactualusefullivesoffixedassetsofsimilarnatureandfunctions.Ifthepreviousestimateshavesignificantchanges,anddepreciationexpenseswillbeadjustedinthefutureperiods.Impairmentoflong-termassetsTheGroupassesseswhethertherecoverableamountislowerthanthebookvalue.Ifthereareanyindicatorsthatthebookvalueofnon-currentassetscannotbefullyrecoverable,impairmentlossesshouldberecorded.Therecoverableamountisthehigherofthefairvalueofalong-termassetlesscostsofdisposalandthepresentvalueofthefuturecashflowsexpectedtobederivedfromtheasset.AsitisdifficultfortheGrouptoobtainthequotedmarketpriceofthelong-termassetsconcerned,thefairvalueoftheassetscannotbereliablyestimated.Inassessingthepresentvalueoffuturecashflows,themanagementoftheGroupisrequiredtomakesignificantjudgementsontheassumptionsincludingsalesgrowthrate,futuresellingprice,productioncost,operatingexpensesanddiscountrate,whichareofhighuncertainty.YantaiChangyuPioneerWineCompanyLimitedResearchandDevelopmentCo.,Ltd.("R&DCentre"),subsidiaryoftheCompanystartedproductionattheendof2017beingasanewmainproductionbaseoftheCompany.In2018,theproductionofR&DCentreaccountsformorethan60%oftheGroup’sproduction.R&DCentre’stotalinvestmentbudgetinitslong-termassetsapproximatesRMB4.5billion,whichisalarge-scaleinvestment.Asat31December2018,thebookvaluesofrelevantlong-termassetsincludingfixedassets,constructioninprogressandintangibleamountedtoRMB3.5billion,accountingfor26.6%ofthetotalassetsintheconsolidatedfinancialstatements,whichexertssignificantinfluenceontheconsolidatedfinancialstatements.Asthereislittlespaceforthedevelopmentofthedomesticwinemarket,themanagementoftheCompanyfacesgreatoperatingpressurestoapplytheoff-takepotentialofthenewproductionbaseinanefficientway.Inaddition,therearecertainrisksofimpairmentforsuchlong-termassets.Themanagementperformstheimpairmenttestbydeterminingiftherecoverableamountislessthanthebookvalueoflong-termassetsanddeterminestherecoverableamountbasedonthepresentvalueofexpectedfuturecashflows.Intheassessmentofthefuturecashflows,themanagementisrequiredto,basedonareasonableandsupportablebasis,assessthecashflowsforthefuture5years(“projectingperiod”)andcashflowsaftertheprojectingperiod(“subsequentperiod”)andmakesignificantjudgementsandaccountingestimatesinthediscountrate,salesgrowthrate,futuresellingprice,productioncost,operatingexpensesandotherkeyassumptions.Accordingtotheresultoftheimpairmenttest,themanagementbelievesthatasat31December2018,theabovelong-termassetsoftheGroupwerenotimpaired.Therefore,noimpairmentprovisionismade.

IV.CRITICALJUDGMENTSINAPPLYINGACCOUNTINGPOLICIESANDKEY

ASSUMPTIONSANDUNCERTAINTIESINACCOUNTINGESTIMATES-continuedSignificantaccountingjudgmentsandaccountingestimates-continuedInventoryprovisionbasedonnetrealizablevalueTheinventoriesaremeasuredonthelowerofcarryingvalueandnetrealizablevalue,andprovisionshouldbemadeforimpairmentonobsoleteandslowmovinginventories.Thegroupwillreassesswhetherthenetrealizablevalueislowerthanthecarryingcostattheendofeachyear.Thedeterminationofthefairvalueofidentifiableassetsandliabilitiesassociatedwithbusinesscombination.Forthecostofbusinesscombination,theGroupallocatesthepurchasepricebasedonfairvalueofrelativelyidentifiableassetsandliabilities.Whenthefairvalueofrelativelyidentifiableassetsandliabilitiesareevaluatedbythepresentvalueofitsfuturecashflows,Themanagementneedestimatethegrowthrateofsalesbasedonfuturemarketsupplyanddemandtopredictcashflows,andconsideredtheproperdiscountrateforcalculating,managementneedusemajoraccountingestimatesandjudgmentsintheprogress.

V.TAXES1.Themaintaxesandtaxrateareasfollows:

(1)China

ValueaddedtaxVATisleviedat6%,10%,11%,16%and17%ontheinvoiced

amountafterdeductionofeligibleinputVAT.ConsumptiontaxTheconsumptiontaxofthegroupisleviedongrossrevenue

atratesrangingfrom10%to20%.CitydevelopmenttaxLeviedat7%oftotalbusinesstaxpayment.CorporateincometaxTheGroupissubjecttoacorporateincometaxrateof25%

onitstaxableincome.

(2)France

ValueaddedtaxVATisleviedat20%ontheinvoicedamountafterdeduction

ofeligibleinputVAT.CorporateincometaxTheGroupissubjecttoacorporateincometaxrateof33.3%

onitstaxableincome.(3)Spain

ValueaddedtaxVATisleviedat21%ontheinvoicedamountafterdeduction

ofeligibleinputVAT.CorporateincometaxTheGroupissubjecttoacorporateincometaxrateof28%

onitstaxableincome.(4)Chile

ValueaddedtaxVATisleviedat19%ontheinvoicedamountafterdeduction

ofeligibleinputVAT.CorporateincometaxTheGroupissubjecttoacorporateincometaxrateof27%

onitstaxableincome.

(5)Australia

ValueaddedtaxVATisleviedat10%ontheinvoicedamountafterdeduction

ofeligibleinputVAT.CorporateincometaxTheGroupissubjecttoacorporateincometaxrateof30%

onitstaxableincome.OtherthantaxincentivesstatedinNoteV-2,applicabletaxratesoftheGroupin2018and2017areallstatedasabove.

V.TAXES-continued2.Taxincentivesandrelativepermit

NingxiaChangyuGrapeGrowingCo.,Ltd.("NingxiaGrowing"),asubsidiaryoftheGroup,whoseprincipalactivityisgrapegrowingisincorporatedinNingxiaHuizuAutonomousRegion.Accordingtoclause27ofPRCCorporateIncomeTaxandclause86ofPRCCorporateIncomeTaxMeasuresforImplementation,NingxiaGrowingenjoysanexemptionofcorporateincometax.YantaiChangyuGrapeGrowingCo.,Ltd.("GrapeGrowing"),abranchoftheCompany,whoseprincipalactivityisgrapegrowingisincorporatedinZhifuDistrict,YantaiCity,ShandongProvince.Accordingtoclause27ofPRCCorporateIncomeTaxandclause86ofPRCCorporateIncomeTaxMeasuresforImplementation,GrapeGrowingenjoysanexemptionofcorporateincometax.XinjiangTianzhuCo.,Ltd("XinjiangTianzhu"),asubsidiaryoftheCompany,isanenterpriseofwineproductionandsalesincorporatedinShihezicity,XinjiangWeizuAutonomous.InaccordancewiththeNoticeonTaxPolicyIssuesconcerningFurtherImplementationoftheWesternChinaDevelopmentStrategy(CaiShui[2011]No.58),XinjiangTianzhuisqualifiedtoenjoypreferentialtaxationpolicies,whichmeansitcanpaycorporateincometaxatapreferentialrateof15%fortheperiodfrom2015to2020.XinjiangBabaoBaronChateauCo.,Ltd.("ShiheziChateau"),asubsidiaryoftheCompany,isanenterpriseofwineproductionandsalesincorporatedinShihezicity,XinjiangWeizuAutonomous.InaccordancewiththeNoticeonTaxPolicyIssuesconcerningFurtherImplementationoftheWesternChinaDevelopmentStrategy(CaiShui[2011]No.58),ShiheziChateauisqualifiedtoenjoypreferentialtaxationpolicies,whichmeansitcanpaycorporateincometaxatapreferentialrateof15%fortheperiodfrom2015to2020.VI.NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS1.Cashandbank

31/12/201831/12/2017

RMBRMBCash114,335136,973Bankbalance1,382,399,7491,278,397,711Othercurrencyfund93,186,393123,987,825

________________________Total1,475,700,4771,402,522,509

________________________

________________________At31December2018,thebalanceofrestrictedcashoftheGroupisasfollows:

31/12/201831/12/2017

RMBRMBHomemaintenancefunds2,611,3502,645,410

________________________________________________

VI.NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS-continued1.Cashandbank-continued

Asat31December2018,theGroup'sothermonetaryassetsisasfollows:

31/12/201831/12/2017

RMBRMBResearchandDevelopmentCo.,Ltd("R&DCentre")

pledgeddepositforlong-termpayables46,100,00061,700,000Depositforletterofcredit44,540,85057,946,190Alipayaccountbalance2,483,8164,317,635DepositforCompanycards51,72714,000DepositforICBCplatform10,00010,000

________________________

93,186,393123,987,825________________________________________________Asat31December2018,theGroup'stermdepositswithoriginalmaturityofmorethanthreemonthswhenacquiredisRMB173,042,400withinterestrate1.50%-3.80%(31December2017:RMB95,000,000).2.Notesandaccountsreceivable2.1Presentedbycategories

31/12/201831/12/2017

RMBRMBNotesreceivable288,667,988244,796,818Accountsreceivable242,153,083263,796,355

________________________Total530,821,071508,593,173

________________________________________________2.2Notesreceivable(1)Categoriesofnotesreceivable

31/12/201831/12/2017

RMBRMBBankacceptances288,667,988244,796,818

________________________________________________

VI.NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS-continued2.Notesandaccountsreceivable-continued2.2Notesreceivable-continued(2)Notesreceivablewhichhavebeenpledgedassecurityattheendoftheperiod

Asat31December2018,therewasnopledgednotesreceivable(31December2017:Nil).(3)Notesreceivableendorsedbutarenotyetdueatthebalancesheetdate

31/12/201831/12/2017

RMBRMB

Bankacceptances182,829,674188,855,843

________________________________________________

Asat31December2018,notesendorsedbytheGrouptootherpartieswhicharenotyetdueat

theendoftheperiodisRMB182,829,674(31December2017:RMB188,855,843).Thenotesare

usedforpaymenttosuppliersandconstructions.TheGroupbelievesthatduetogoodreputation

ofbank,theriskofnotesnotacceptingbybankonmaturityisverylow,thereforederecognisethe

notereceivablesendorsed.Ifthebankisunabletopaythenotesonmaturity,accordingtothe

relevantlawsandregulationsofChina,theGroupwouldundertakelimitedliabilityforthenotes.(4)Notesreceivablereclassifiedtoaccountsreceivableduetothedrawers'inabilitytosettlethenote

onmaturity

Asat31December2018,nonotesreceivablewerereclassifiedasaccountsreceivableduetothe

defaultofdrawer(31December2017:Nil).2.3Accountsreceivable(1)Disclosureofaccountsreceivablebycategories:

31/12/201831/12/2017

BaddebtsCarryingBaddebtsCarryingAmountprovisionamountAmountprovisionamountAmountProportionAmountRatioAmountAmountProportionAmountRatioAmount

RMB%RMB%RMBRMB%RMB%RMBAccountsreceivableforwhich

baddebtprovisionhasbeenassessedindividually242,153,083100.0--242,153,083263,796,355100.0--263,796,355

____________________________________________________________________________________________Thenormalcredittermisonemonth,whichcanbeextendedtooneyearforcertaincustomers.Theaccountsreceivableareinterest-free.Asat31December2018,ownershiprestrictedaccountsreceivableisRMB52,015,032(31December2017:RMB46,337,062),referringtoNoteVI-45.

VI.NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS-continued2.Notesandaccountsreceivable-continued2.3Accountsreceivable-continued(1)Disclosureofaccountsreceivablebycategories-continued

Theaginganalysisisasfollows:

31/12/201831/12/2017

RMBRMBWithin1year240,312,773263,112,7141to2years1,566,622683,6412to3years273,688-

________________________

242,153,083263,796,355________________________________________________(2)Recognitions,collectionsandreversalsduringthecurrentyear:

Asat31December2018,therewasnobaddebtprovisionforaccountsreceivable(31December2017:Nil).Therewasnobaddebtprovisionmade,reversedorwritten-offbymanagementin2018(2017:Nil).(3)Topfiveentitieswiththelargestbalancesofaccountsreceivable:

RelationshipPercentageofNamewiththeGroupAmountAgingtotalreceivables

RMB%

Sainsbury'ssupermarketsLtdThirdparty17,428,889Within1year7.2NongongshangSupermarket

(Group)Co.,LtdThirdparty10,928,458Within1year4.5SLIGROB.V.Thirdparty6,732,175Within1year2.8Vi?edosyBodegasLasPircasThirdparty6,430,387Within1year2.7SuguoSupermarketCo.,Ltd.Thirdparty6,415,505Within1year2.6

___________

47,935,41419.8

______________________

3.Prepayments(1)Theaginganalysisisasfollows:

31/12/201831/12/2017AmountRatioAmountRatio

RMB%RMB%Within1year4,219,949100.02,417,931100.0

________________________________________________________

VI.NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS-continued3.Prepayments-continued(2)Asat31December2018,thetopfiveofprepaymentswereasfollows:

ReasonPercentageofRelationshipforbeingtotaladvanceswiththeGroupAmountAgingoutstandingtosuppliers

RMB%ShanghaiBenchu

Trade&DevelopmentCo.,Ltd.Thirdparty345,600Within1yearGoodsnotreceived8.2CarringtonEstateT/AKarikariEstaThirdparty340,498Within1yearGoodsnotreceived8.1DONELLIVINIS.P.A.Thirdparty304,204Within1yearGoodsnotreceived7.2YantaiEconomicandTechnologicalDevelopmentZoneThermalCo.,LtdThirdparty250,000Within1yearPrepaidheatingfees5.9YantaiCihangInternationalFreight

AgentCo.,Ltd.Thirdparty186,392Within1yearPrepaidagencyfees4.4

__________

1,426,69433.8

____________________4.Otherreceivables4.1Presentedbycategories

31/12/201831/12/2017

RMBRMBInterestreceivable1,332,681240,968Otherreceivables21,303,40518,737,454

______________________Total22,636,08618,978,422

______________________

______________________(1)Categoriesofinterestreceivable

31/12/201831/12/2017

RMBRMBInterestreceivableonbankdeposits1,332,681240,968

__________________________________

(2)Overdueinterest

Asat31December2018,therewasnooverdueinterestreceivable(31December2017:Nil).

VI.NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS-continued4.Otherreceivables-continued4.2Otherreceivables(1)Disclosureofotherreceivablesbycategories

31/12/201831/12/2017

BaddebtsCarryingBaddebtsCarryingAmountprovisionamountAmountprovisionamountAmountProportionAmountRatioAmountAmountProportionAmountRatioAmount

RMB%RMB%RMBRMB%RMB%RMBOtherreceivableforwhich

baddebtprovisionhasbeenassessedindividually21,303,405100.0--21,303,40518,737,454100.0--18,737,454

____________________________________________________________________________________________Theaginganalysisisasfollows：

31/12/201831/12/2017

BaddebtsCarryingBaddebtsCarryingAmountprovisionamountAmountprovisionamountAmountProportionAmountAmountAmountProportionAmountAmount

RMB%RMBRMBRMB%RMBRMBWithin1year11,293,90853.0-11,293,90813,214,30170.5-13,214,3011to2years6,693,70231.5-6,693,7021,937,96110.3-1,937,9612to3years1,922,9989.0-1,922,9982,273,59112.2-2,273,591Over3years1,392,7976.5-1,392,7971,311,6017.0-1,311,601

________________________________________________

21,303,405100.0-21,303,40518,737,454100.0-18,737,454

________________________________________________________________________________________________(2)Accrual,reversalandwritten-offduringthecurrentyear

Asat31December2018,nobaddebtprovisionwasmadeforotherreceivables(2017:RMB354,805).(3)Otherreceivableswrittenoffinthecurrentyear

Asat31December2018,theGrouphasnootherreceivableswrittenoff(31December2017:

RMB354,805).(4)Disclosureofotherreceivablesbycategories

31/12/201831/12/2017

RMBRMB

Deposit10,453,62410,075,901

Pettycashreceivable2,274,0382,215,146

Investmentfund-2,050,000

Refundofconsumptiontax,realestatetax6,273,8822,451,188

Others2,301,8611,945,219

________________________

21,303,40518,737,454________________________________________________

VI.NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS-continued4.Otherreceivables-continued4.2Otherreceivables-continued(5)Fiveentitieswiththelargestbalancesofotherreceivables

Asat31December2018,thetopfiveofotherreceivablesareasfollows:

PercentageoftotalBaddebtNatureAmountAgingotherreceivablesClosingbalance

RMB%RMBYantaiDevelopmentZoneConstructionIndustryAssociationConstructiondeposit7,709,477Within3years36.1-ZhejiangTmallTechnologyCo.,Ltd.Shopdeposits867,426Within1year4.1-YantaiShenmaPackagingCo.,Ltd.("ShenmaPackaging")Leasereceivables813,440Within1year3.8-YantaiDevelopmentZone

PowerCompanyDeposit140,000Within3years0.7-YantaiDevelopmentZone

HeatCompanyDeposit130,000Within3years0.6-

______________________

9,660,34345.3-

____________________________________________

5.Inventories(1)Disclosureofinventoriesbycategories

31/12/201831/12/2017

NetcarryingNetcarryingBalanceProvisionamountBalanceProvisionamount

RMBRMBRMBRMBRMBRMBRawmaterial67,267,035-67,267,03566,881,090-66,881,090Workinprogress1,787,819,923-1,787,819,9231,568,230,851-1,568,230,851Finishedgoods894,187,725(24,683,226)869,504,499864,097,497(25,595,392)838,502,105

____________________________________________________

2,749,274,683(24,683,226)2,724,591,4572,499,209,438(25,595,392)2,473,614,046

________________________________________________________________________________________________________

(2)Inventoryprovision

ClosingbalanceRecognizedReversalWrittenoffOpeningbalance

RMBRMBRMBRMBRMBProvisionfordeclinein

valueofinventories25,595,392749,134(1,661,300)-24,683,226

____________________________________________________________________________________6.Othercurrentassets

31/12/201831/12/2017

RMBRMBPrepaidtaxes24,077,32322,911,298PendingdeductVATonpurchase233,087,707206,529,504Prepaidrent1,511,3661,381,957

_______________________

258,676,396230,822,759______________________________________________VI.NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS-continued

7.Available-for-salefinancialassets(1)Available-for-salefinancialassets

31/12/201831/12/2017AmountImpairmentCarryingamountAmountImpairmentCarryingamount

RMBRMBRMBRMBRMBRMBAvailable-for-sale

equityinstrumentsmeasuredatcost467,251-467,251467,251-467,251

________________________________________________________________________________(2)Available-for-salefinancialassetsmeasuredatcost

CarryingamountProvisionforimpairmentlossesProportionofCash

votingpowerdividend

inthefortheInvesteeOpeningIncreaseDecreaseClosingOpeningIncreaseDecreaseClosinginvesteeperiod

RMBRMBRMBRMBRMBRMBRMBRMB(%)RMBOther467,251--467,251----

________________________________________________________________________________TheGroupholdingequityratiosofinvestmentcompaniesarelessthan1%.Investmentcompaniesareallunlistedcompanies,andtheirfairvaluecannotbemeasuredreliably,therefore,theGroupusescostmethodtomeasuretheseavailable-for-salefinancialassets.8.Investmentproperties

Investmentpropertiesmeasuredbycostmethod

Buildings

RMBTotaloriginalcarryingamount31/12/201738,347,283IncreaseTransferfromfixedassets32,606,762

____________31/12/201870,954,045

____________Totalaccumulateddepreciation31/12/201719,879,294IncreaseTransferfromfixedassets17,644,360Additions1,857,902

____________31/12/201839,381,556

____________Totalcarryingamount31/12/201831,572,489

________________________31/12/201718,467,989

________________________

VI.NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS-continued9.Fixedassets

(1)Detailsoffixedassets

BuildingsMachineryMotorVehiclesTotal

RMBRMBRMBRMBTotaloriginalcarryingamount31/12/20174,508,868,6842,247,350,29328,689,4156,784,908,392IncreasePurchase4,490,675235,607,780923,222241,021,677TransferfromCIP252,035,224202,251,6341,708,803455,995,661Acquisitionincrease(VII-1)33,048,30715,981,692-49,029,999DecreaseDisposal(4,409,703)(35,392,585)(4,740,801)(44,543,089)TransfertoInvestment

properties(VI-8)(32,606,762)--(32,606,762)

______________________________________

31/12/20184,761,426,4252,665,798,81426,580,6397,453,805,878

______________________________________

Totalaccumulateddepreciation31/12/2017512,643,486922,944,52020,236,4171,455,824,423IncreaseAdditions126,510,348168,695,4712,632,539297,838,358DecreaseDisposal(242,705)(29,575,754)(2,125,751)(31,944,210)TransfertoInvestment

properties(VI-8)(17,644,360)--(17,644,360)

______________________________________

31/12/2018621,266,7691,062,064,23720,743,2051,704,074,211

______________________________________

Totalcarryingamount31/12/20184,140,159,6561,603,734,5775,837,4345,749,731,667

____________________________________________________________________________

31/12/20173,996,225,1981,324,405,7738,452,9985,329,083,969

____________________________________________________________________________Asat31December2018,fixedassetswithownershiprestrictedareRMB412,006,421(31December2017:RMB145,009,923).PleaserefertoNoteVI-45indetail.Asat31December2018,theGrouphasnetfixedassetsthataretemporarilyidleofRMB59,718,155(31December2017:Nil).TheGrouphasnofixedassetsacquiredunderfinanceleasesorfixedassetsclassifiedasheldforsale(31December2017:RMB2,000,197).(2)Fixedassetsthroughoperatinglease

Amount

RMBMachinery134,111

______________

VI.NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS-continued9.Fixedassets-continued(3)Fixedassetsofwhichcertificatesoftitlehavenotbeenobtained

Asat31December2018,buildingswithoutpropertycertificateareasfollows:

ReasonswhycertificatesAmountoftitlehavenotbeenobtained

RMBResearchandDevelopmentCo,LtdIndustryProductionCentre1,755,472,791ProcessingChanganChateauDormitorybuilding,mainbuilding284,890,228ProcessingBeijingChateauEuropeantown,main,servicebuilding187,565,493ProcessingDingLuoTeChateaumainbuilding83,218,432ProcessingXinjiangTianzhufermentationsandstoragewarehouse17,768,840ProcessingIceWineChateauofficebuildingandpackingworkshop9,198,373ProcessingJingyangfactoryfermentationbuilding4,171,918ProcessingFermentationcentreoffice,experimentbuildingandworkshop3,653,494ProcessingKylinPackagingfinishedgoodswarehouseandworkshop2,396,850ProcessingSalesCompanyofficebuildings1,123,984Processing

__________

2,349,460,403

____________________Thebuildingswithoutpropertycertificateabovehavenosignificantinfluenceonthegroup'smanagement.10.Constructioninprogress

(1)Constructioninprogress:

31/12/201831/12/2017

RMBRMBR&DCentre("ChangyuWineintegrational

Construction")Project608,553,617883,731,540ChanganChateauConstructionProject39,793,89353,290,036NingxiaChateauConstructionProject47,163,86335,711,269ShiheziChateauConstructionProject23,664,12425,463,724SalesCompanyconstructionproject17,985,88211,355,685OthercompaniesconstructionProject22,135,21216,589,315

________________________

759,296,5911,026,141,569________________________________________________

VI.NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS-continued10.Constructioninprogress-continued(2)Changesinsignificantconstructioninprogress:

	Budget	31/12/2017	Addition	TransfertoPPE	Transferto	31/12/2018	Status	TotalaccumulatedCapitalizinginterest	Capitalizinginterestforthisperiod	Interestcapitalizationrate	Financedby
					Lone-termprepaidexpense
	RMB	RMB	RMB	RMB	RMB	RMB		RMB	RMB	%
ChangyuWineintegrationalConstruction"	4,505,780,000	883,731,540	118,142,779	(372,914,273)	(20,406,429)	608,553,617	74.3	14,271,837	5,843,872	1.2%及4.3%	LoansfromfinancialinstitutionsandSelf-raised
ChanganChateauConstructionProject	620,740,000	53,290,036	12,149,197	(25,645,340)	-	39,793,893	108.7	-	-	-	Self-raised
ShiheziChateauConstructionProject	780,000,000	25,463,724	37,629,835	(39,429,435)	-	23,664,124	96.3	-	-	-	Self-raised
NingxiaChateauConstructionProject	414,150,000	35,711,269	14,307,265	(2,854,671)	-	47,163,863	102.1	-	-	-	Self-raised
SalesCompanyconstructionproject	161,350,000	11,355,685	6,893,191	(262,994)	-	17,985,882	97.7	-	-	-	Self-raised

TheinterestcapitalizedinconstructioninprogressisRMB5,843,872in2018(2017:RMB6,138,242).

VI.NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS-continued11.Bearerbiologicalassets

BearerbiologicalassetsareVines,whichmeasuredincostmethod

ImmatureMaturebiologicalassetsbiologicalassetsTotal

RMBRMBRMBTotaloriginalcarryingamount31/12/201712,175,000217,537,353229,712,353IncreaseCultivatedincrease19,371,297-19,371,297Transfertomatureassets(17,708,689)17,708,689-

________________________________31/12/201813,837,608235,246,042249,083,650

________________________________Totalaccumulateddepreciation31/12/2017-27,782,46527,782,465IncreaseAdditions-12,034,81212,034,812

________________________________31/12/2018-39,817,27739,817,277

________________________________Totalnetcarryingamount31/12/201813,837,608195,428,765209,266,373

________________________________

________________________________31/12/201712,175,000189,754,888201,929,888

________________________________

________________________________Asat31December2018,thereisnobiologicalassetwithownershiprestricted.(31December2017:Nil)Asat31December2018,thereisnoindicationthatbiologicalassetsmaybeimpaired,andnoprovisionismade.(31December2017:Nil)

VI.NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS-continued12.Intangibleassets

(1)Intangibleassets

LanduserightsSoftwareuserightsTrademarkTotal

RMBRMBRMBRMB

Totaloriginalcarryingamount31/12/2017521,731,13973,666,754159,702,508755,100,401IncreasePurchase1,596,780922,809105,8272,625,416Acquisitionincrease(VII-1)4,924,9921,232,49410,260,40016,417,886

_______________________________________

31/12/2018528,252,91175,822,057170,068,735774,143,703

_______________________________________

Totalaccumulateddepreciation31/12/201767,547,77221,516,74110,586,99199,651,504Increase

Additions10,523,1385,206,0743,289,52819,018,740

_______________________________________

31/12/201878,070,91026,722,81513,876,519118,670,244

_______________________________________

Totalcarryingamount31/12/2018450,182,00149,099,242156,192,216655,473,459

______________________________________________________________________________

31/12/2017454,183,36752,150,013149,115,517655,448,897

______________________________________________________________________________(2)Landuseright'slocationandyearsareasfollows:

Item31/12/201831/12/2017

RMBRMBInthePRC(within50years)419,300,592428,226,950OutofthePRC(morethan50years)30,881,40925,956,417

_______________________

450,182,001454,183,367______________________________________________Asat31December2018,theGrouphaslanduserightwithinfiniteusefullivesofRMB30,881,409(31December2017:RMB25,956,417),representingthefreeholdlandheldbyChileIndomitaWineGroupandAustraliaKilikanoonEstateunderrelevantChileandAustralialaws,onwhichtheamortizationisnotrequired.Asat31December2018,theGrouphastrademarkwithinfiniteusefullivesofRMB154,150,933(31December2017:143,890,533),whichisheldbyChileIndomitaWineGroupandAustraliaKilikanoonEstate.Therecoverableamountofthetrademarkisdeterminedaccordingtothepresentvalueoftheexpectedfuturecashflowsgeneratedfromtheassetgrouptowhichthesingleassetsoftrademarkrightbelongs.Themanagementpreparesthecashflowprojectionforfuture5years(the"projectingperiod")basedonthelatestfinancialbudgetassumption,andestimatesthecashflowsafterthefuture5years(the"subsequentperiod").Thediscountratesusedinthecashflowprojectionsare9.0%and10.1%,respectively.Akeyassumptionintheestimateoffuturecashflowsistherevenuegrowthrateintheprojectingperiod.SuchrevenuegrowthrateisdeterminedbasedontheindustryandtheexpectedgrowthrateofChileIndomitaWineGroupandAustraliaKilikanoonEstate.Therevenuegrowthratesinthesubsequentperiodare3.0%and2.5%,respectively.

VI.NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS-continued12.Intangibleassets-continued(2)Landuseright'slocationandyearsareasfollows:-continued

TheGrouprecognizesthetrademarkwithinfiniteusefullivesasintangibleassets,theimpairmentassessmentofwhichismadeattheendofeachreportingyear.Themanagementbelievesthatanyreasonablechangeoftheaboveassumptionswillnotresultinthetotalbookvalueoftheassetgrouptowhichthesingleassetsoftrademarkrightbelongsexceedingitsrecoverableamount.Accordingtotheresultofimpairmentassessment,bytheendof31December2018,themanagementbelievesthereisnoimpairmentlossonthosetrademarkwithinfiniteusefullivesoftheGroup.Asat31December2018,theintangibleassetwithrestrictedownershipisRMB218,070,414(December31,2017:RMB164,051,996),PleaserefertoNoteVI-45indetail.13.Goodwill

Investee31/12/2017IncreaseDecrease31/12/2018

RMBRMBRMBRMBEtablissementsRoulletFransac

("FransacSales")13,112,525--13,112,525DicotPartners,S.L

("Dicot")92,391,901--92,391,901SocieteCivileArgricoleDuChateau

DeMirefleurs("Mirefleurs")15,761,440--15,761,440IndomitaWine6,870,115--6,870,115AustraliaKilikanoonEstate-37,063,130-37,063,130

________________________________

Total128,135,98137,063,130-165,199,111

________________________________________________________________TheGroupacquiredFransacSales,DicotandMirefleursandChileIndomitaWineGroupinDecember2013,September2015January2016andJuly2017respectively,resultinginrespectivegoodwillamountingtoRMB13,112,525,RMB92,391,901,RMB15,761,440andRMB6,870,115.TheGroupacquiredAustraliaKilikanoonEstateinJanuary2018,resultinggoodwillamountingtoRMB37,063,130,whichhavebeenallocatedtocorrespondingassetgroupsforimpairmenttesting.Therecoverableamountofthegroupofassetsisdeterminedbythepresentvalueofitsfuturecashflows.Futurecashflowprojectionsaremadebasedontherecentlyfinancialbudgetsforthefuture5yearsperiod(projectingperiod)andpresumethatcashflowsaftertheprojectingperiod(subsequentperiod).DiscountrateusedincalculatingtherecoverableamountsofFransacSales,DicotMirefleurs,IndomitaWineandAustraliaKilikanoonEstateare11.1%,8.9%,11.1%,9.0%and10.1%(2017:10.3%,8.5%,10.3%,9.6%andN/A)respectively.Onekeyassumptioninprojectingfuturecashflowsisthegrowthrateofsalesinprojectingperiod,whichiscomputedbasedontheexpectedgrowthrateoftheindustryandeachgroupofassets.GrowthrateofsalesinsubsequentperiodofFransacSales,Dicot,Mirefleurs,IndomitaWineandAustraliaKilikanoonEstateis2.0%,2.0%,2.0%,3.0%,2.5%(2017:2%,2%,2%,3%andN/A)respectively.ManagementoftheGroupbelievesthatanyreasonablechangesintheaboveassumptionswillnotcausebookvaluesofthesesubsidiariesexceedstheirrecoverableamounts.

VI.NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS-continued13.Goodwill-continued

Accordingtotheassessment,theGroupbelievesthatnoimpairmentprovisionneedtobemadeforgoodwillinthereportingperiod.14.Long-termprepaidexpenses

31/12/2017IncreaseAmortization31/12/2018

RMBRMBRMBRMBLandleaseprepayments56,365,385-(2,147,622)54,217,763Landrequisitionfee43,976,036-(548,297)43,427,739Greeningfee125,628,33424,511,623(8,915,485)141,224,472Leaseholdimprovement873,2633,306(100,922)775,647Others3,166,2132,198,373(369,791)4,994,795

______________________________________

230,009,23126,713,302(12,082,117)244,640,416

____________________________________________________________________________Note:ThegreeningfeetransferredfromCIPtolong-termprepaidexpensesamountedtoRMB20,406,429,refertoNoteVI-10fordetails.15.Deferredtaxassets/liabilities

Deferredtaxassetsanddeferredtaxliabilitiesarenotrelatedtoincometaxofthesametaxauthoritiesofthesametaxsubjects,thusnotpresentedwiththenetamountafternetting.

(1)Deferredtaxassets:

31/12/2018		31/12/2017
Temporarydifferences	Deferredtaxassets	Temporarydifferences	Deferredtaxassets
RMB	RMB	RMB	RMB

Unrealizedprofitfromintra-companytransactions	602,476,583	150,619,145	618,591,681	154,647,920
Unpaidbonus	141,808,257	35,485,814	94,462,722	23,671,611
Retirementbenefit	26,186,243	6,546,561	27,980,857	6,995,214
Assetimpairmentprovision	24,683,226	6,170,807	25,595,392	6,398,848
Deductiblelosses	262,937,999	67,566,387	345,639,059	88,584,337
Deferredincome	86,227,293	18,868,963	109,797,054	24,285,203
Assetsimpairmentloss	661,415	178,582	684,622	184,848
Accruedrebate	-	-	13,413,655	3,353,415
	1,144,981,016	285,436,259	1,236,165,042	308,121,396

VI.NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS-continued15.Deferredtaxassets/liabilities-continued

(2)Deferredtaxliabilities

Item	31/12/2018		31/12/2017
	Taxabletemporarydifference	Deferredtaxliability	Taxabletemporarydifference	Deferredtaxliability
	RMB	RMB	RMB	RMB

Revaluationsurplusinbusinesscombinationnotundercommoncontrol

81,338,130

22,010,647

89,316,823

24,264,203

(3)Deferredtaxassetsandliabilitiesnotrecognized

31/12/201831/12/2017

RMBRMBDeductiblelosses171,430,831150,320,039

______________________________________________(4)Deductiblelossesnotrecognizedasdeferredtaxassetswillexpirein:

31/12/201831/12/2017

RMBRMB2018--20197,311,2737,311,273202045,960,76645,960,766202182,685,21382,685,213202214,362,78714,362,787202321,110,792-

________________________

171,430,831150,320,039________________________________________________16.Short-termborrowings

31/12/201831/12/2017

RMBRMBCreditloans605,202,708648,494,624Mortgagedloans79,467,83265,939,662Guaranteedloan3,331,870-

________________________

688,002,410714,434,286________________________________________________

VI.NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS-continued16.Short-termborrowings-continued

Asat31December2018,short-termborrowingsdetailwereasfollows:

NatureofInterestrateYearendedLoansamountExchangerateRMBinterestincontractInterestrate

%%Creditloans(RMB)400,000,0001.0000400,000,000Floating1yearLPR-0.04(Note1)4.35Creditloans(RMB)150,000,0001.0000150,000,000FloatingAnnualbenchmarkrate4.35Creditloans(EUR)912,4557.84737,160,308Fixed0.86~2.530.86~2.53Creditloans(USD)7,000,0006.863248,042,400Fixed3.97~4.903.97~4.90Mortgagedloans(EUR)6,628,3997.847352,015,032Fixed0.35~0.950.35~0.95Mortgagedloans(USD)4,000,0006.863227,452,800Fixed4.22~4.384.22~4.38Guaranteedloan(AUD)690,5434.82503,331,870Fixed3.003.00

_________

688,002,410

__________________Note1:LPRisthebasicinterestrateofthePeople'sBankofChina.Asat31December2018,mortgagedloanswereHaciendayVinedosMarquesdelAtrio,S.L.U("Atrio")factoringofaccountsreceivablefromBancodeSabadell,S.A.etc.EUR6,628,399(translatedasRMB52,015,032)(31December2017:RMB46,337,062).MortgagedloanswereIndomitaWinemortgagedPeso7,642,470,000(translatedasRMB75,601,849)fixedassetsfromBBVAbankUSD4,000,000(translatedasRMB27,452,800)(December31,2017:RMB19,602,600).AustraliaKilikanoonEstatehasguaranteedloansof690,543Australiandollars(equivalenttoRMB3,331,870)(31December2017:Nil).17.Notesandaccountspayable

Theaginganalysisofaccountspayableareasfollows

31/12/201831/12/2017

RMBRMBWithin1year710,208,269664,020,1761to2years3,091,6592,051,5922to3years121,598371,111Over3years151,355-

________________________

713,572,881666,442,879________________________________________________

VI.NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS-continued18.Advancesfromcustomers

Theaginganalysisofadvancesfromcustomersareasfollows

31/12/201831/12/2017

RMBRMBWithin1year221,022,547340,025,6901to2years1,155,5557,072,2542to3years1,032,609381,463Over3years2,864,5333,414,749

________________________

226,075,244350,894,156________________________________________________19.Employeebenefitspayable(1)Employeebenefitspayableasfollows:

31/12/2017IncreaseDecrease31/12/2018

RMBRMBRMBRMBShort-termpayroll182,545,284481,042,461(477,694,636)185,893,109Post-demissionbenefits

-predeterminedprovisionplan298,09351,503,280(51,576,508)224,865Terminationbenefits27,980,85713,677,216(15,471,830)26,186,243

____________________________________

210,824,234546,222,957(544,742,974)212,304,217

________________________________________________________________________

(2)Employeebenefitspayable:

31/12/2017IncreaseDecrease31/12/2018

RMBRMBRMBRMBSalariesandbonus185,014,318428,052,734(425,381,062)187,685,990Staffbenefit2,116,47517,783,378(16,885,565)3,014,288Staffwelfare524,31620,677,314(20,740,535)461,095Includes:

Medicalinsurance524,31619,045,528(19,109,404)460,440Injuryinsurance-895,750(895,095)655Maternityinsurance-736,036(736,036)-Housingfund39,25610,444,925(10,431,671)52,510Unionfeeandeducationfee2,060,2314,109,651(4,255,803)1,914,079

____________________________________

Total189,754,596481,068,002(477,694,636)193,127,962

____________________________________

Less:Non-currentliabilities7,209,3127,234,853

__________________

Short-termpayroll182,545,284185,893,109

____________________________________

VI.NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS-continued19.Employeebenefitspayable-continued(3)Predeterminedprovisionplan

31/12/2017IncreaseDecrease31/12/2018

RMBRMBRMBRMBPension297,59150,534,986(50,608,044)224,533Unemploymentinsurance502968,294(968,464)332

__________________________________

298,09351,503,280(51,576,508)224,865

____________________________________________________________________TheGroupparticipatesinpensioninsuranceandunemploymentinsuranceplansestablishedbygovernmentinstitution.Accordingtothoseplans,theGrouppayspensionandunemploymentinsuranceeachmonthonthebasisof12%-32%and0.5%-3%lastperiodsalaryrespectively.Apartfromthesemonthlyexpenses,theGroupdoesnotbearanyfurtherpaymentobligation.ThisyeartheGroupshouldpayRMB50,534,986andRMB968,294(2017:RMB48,834,066andRMB1,141,605)respectivelyintopensioninsuranceandunemploymentinsurance.Asat31December2018,theGrouphasunpaidpensionandunemploymentinsuranceofRMB224,533andRMB332respectively(31December2017:RMB297,591andRMB502),whichisduetothepensioninsuranceandunemploymentinsuranceplanattheendofthereportingperiod.Thesepaymentshavebeenpaidaftertheendofthereportingperiod.20.Taxespayable

31/12/201831/12/2017

RMBRMBValueaddedtax36,442,86835,681,696Consumptiontax28,636,64644,961,022Corporationincometax40,869,50738,834,293Urbanlandusetax2,476,5272,645,687Individualincometax5,669,0997,805,917Cityconstructiontax4,337,7125,669,280Propertytax5,165,1284,647,644Others5,315,3034,848,617

________________________

128,912,790145,094,156________________________________________________

VI.NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS-continued21.Otherpayables21.1Presentedbycategories

31/12/201831/12/2017

RMBRMBInterestpayable712,826771,250Otherpayables607,767,064602,964,319

________________________

608,479,890603,735,569________________________________________________21.2Otherpayables(1)Naturesofotherpayablesareasfollows

31/12/201831/12/2017

RMBRMBPayabletodealerdeposit159,191,138139,710,963Payablesforequipmentandconstruction152,825,734130,706,777Payablesfortransportation38,867,72527,847,092Royaltyfee78,414,97877,208,929Advertisingcosts80,715,461118,834,960Withholdingpromotioncosts15,714,40013,413,655Employeedeposit2,806,76613,327,132Depositsfromsuppliers15,901,2103,082,595Payablesforcontractingfee27,070,58438,070,571Others36,259,06840,761,645

________________________

607,767,064602,964,319________________________________________________(2)Descriptionofsignificantotherpayablesagedmorethanoneyear

CompanyAmountReasons

RMBBeijingQinglangAgricultureScienceandTechnologyDevelopmentLimitedCompany("BeijingQinglang")9,493,506PayablesforcontractingfeeVASFCompany4,878,866Payablesforcontractingfee

_________

14,372,372

__________________

VI.NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS-continued22.Deferredincome

31/12/201831/12/2017

RMBRMBGovernmentgrantsCurrentliabilities15,860,25416,878,199Non-currentliabilities70,367,03992,918,855

________________________

86,227,293109,797,054________________________________________________Governmentgrants:

RecognizedinRelatedtoOpeningAdditionnon-operatingincomeClosingAssets/Income

/otherincomeRMBRMBRMBRMBRMBWinebaseliquorbrewageproject4,739,400-(1,434,900)3,304,500AssetsShihezichateauprojectfunds9,276,600-(2,280,000)6,996,600AssetsXinjiangIndustrialRejuvenationandTechnologicalReconstructionProject17,064,000-(1,422,000)15,642,000AssetsSpecialsupportforinfrastructurefacilities5,300,000-(1,060,000)4,240,000AssetsNingxiaindustryrevitalizationand

technologyreconstructionfunds1,086,000-(1,086,000)-AssetsTourismDevelopmentFundSubsidyProject500,000--500,000IncomeSupportenterprisedevelopmentspecialfunds10,200,000-(10,200,000)-Income(Huanren)wineproductionconstructionfunds3,600,000-(400,000)3,200,000AssetsWineelectronictrackingsystem

specificfunds3,192,311-(667,054)2,525,257AssetsMiyunPropagandaDepartmenttransfer888,945-(888,945)-AssetsWineindustryspecificfunds744,000-(186,000)558,000AssetsShandongPeninsulaBlueEconomic

Areaconstructionfunds8,000,000-(2,000,000)6,000,000AssetsInformationsystemconstruction

projecttechnologyfunds3,480,000-(580,000)2,900,000AssetsCross-bordere-Businessprojectssubsidies702,615300,000(122,359)880,256IncomeRedwinephenolicsresearchprojectsfunds284,601-(284,601)-IncomeGrapebaseconstructionproject520,000-(520,000)-AssetsWaterpollutionabatementproject320,132-(113,602)206,530IncomeInfrastructureconstructionproject1,843,750-(125,000)1,718,750AssetsIndustrialdevelopmentsupportproject36,900,000-(4,100,000)32,800,000AssetsSubsidyforupdatingofeconomicand

energy-savingtechnology1,154,700-(128,300)1,026,400AssetsSpecialfundsforefficientwatersaving

irrigationproject-1,720,000(81,000)1,639,000AssetsGuidancefundsforserviceindustrydevelopment-2,000,000-2,000,000IncomeRelocationallowanceforboilerrenovation-100,000(10,000)90,000Income

____________________________

Total109,797,0544,120,000(27,689,761)86,227,293

________________________________________________________

Less:Non-currentliabilitiesduewithinoneyear16,878,19915,860,254

______________

Othernon-currentliabilities92,918,85570,367,039

____________________________Asat31December2018,theGrouprecognisecurrentliabilityfordeferredincometobeaccountedinprofitorlosswithinoneyear,andrecognisenon-currentliabilityfordeferredincometobeaccountedinprofitorlossoveroneyear.

VI.NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS-continued23.Non-currentliabilitiesduewithinoneyear

31/12/201831/12/2017

RMBRMBLong-termborrowingsduewithinoneyear118,940,78876,954,827Long-termpayablesduewithinoneyear34,000,00034,000,000

________________________

152,940,788110,954,827________________________________________________Asat31December2018,Long-termborrowingsduewithinoneyearreferstoNoteVI-24,Long-termpayablesduewithinoneyearreferstoNoteVI-25.24.Long-termborrowings

31/12/201831/12/2017

RMBRMBCreditloan41,805,74668,182,310Mortgagedloan3,924,9166,693,544Guaranteedloan110,750,00081,250,000

________________________

156,480,662156,125,854________________________________________________Asat31December2018,loansdetailisasfollows:

NatureYear-endDuewithinDueoverLoansamountExchangerateAmountofinterestInterestrateborrowingrateoneyearoneyear

RMB%%Guaranteedloan(RMB)(Note)81,250,0001.000081,250,000Floating5yearLPR-0.94.27518,750,00062,500,000Creditloan(EUR)17,734,9547.8473139,171,506Fixed1.00-2.531.00-2.5397,365,76041,805,746Mortgagedloan(EUR)(Note)860,1617.84736,749,944Fixed1.801.802,825,0283,924,916Guaranteedloan(AUD)(Note)10,000,0004.825048,250,000Fixed3.003.00-48,250,000

_____________________

275,421,450118,940,788156,480,662

__________________________________________Note:Asat31December2018,Thesecuredloanisthelong-termloanborrowedbythecompanyforR&DCentrecreditguarantee,RMB81,250,000(31December2017:RMB100,000,000),mortgagedloanswereAtriousingfixedassetsEUR4,264,170(translatedasRMB33,462,225)ascollateralforloansfromPopularEspa?ol,EUR860,161(translatedasRMB6,749,944),(31December2017:RMB9,502,372).Theguaranteedloan(AUD)istheloanofAUD10,000,000borrowedbyAustraliaKilikanoonEstatefromAustralia&NewZealandbanking(translatedasRMB48,250,000)(31December2017:Nil),whichwasguaranteedbytheCompany.

VI.NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS-continued25.Long-termpayables

31/12/201831/12/2017

RMBRMBAgriculturalDevelopmentFundofChina("CADF")225,000,000259,000,000

________________________________________________In2016,RMB305,000,000fromCADFwasinvestedinR&DCentre,CADFaccountedfor37.9%oftheregisteredcapital.Accordingtotheinvestmentagreement,CADFwillrecoveryinvestmentfundsover10years,theinvestmentincomereceivedequalto1.2%oftheremainingunpaidprincipalperannum.Inadditiontothefixedincome,CADFwillnolongerenjoyotherprofitsorbearthelossofR&DCentre.ThereforealthoughtheinvestmentinR&DCentre,nominallyequityinvestment,isactuallyadebtinvestment(Financialdiscountloan).Thegrouptakethisinvestmentaslong-termpayables,whichmeasuredinamortizedcost.TheGrouprepaystheprincipalofRMB34,000,000in2018.RefertoNoteVI-45fordetailsofmortgagedandpledgedassets.

Long-termTerminationdateMortgagedpayablesYieldrateInvestmentdateofrepaymentDuewithin1yearDueafter1yearandpledgedassets

RMBRMBRMB

67,000,0001.2%12January201624December202510,000,00057,000,000Cashandbankand

intangibleassets

176,000,0001.2%29February201628February202622,000,000154,000,000Fixedassetsandintangibleassets16,000,0001.2%16June201622May20262,000,00014,000,000Cashandbank

________________________________

259,000,00034,000,000225,000,000________________________________________________________________

26.Othernon-currentliabilities

31/12/201831/12/2017

RMBRMBEmployeebenefit7,234,8537,209,312

____________________________________Asat31December2018,employeebenefitrepresentsdepositfrombonusaccruedformanagersandabove.Accordingtothebonuspaymentscheduleof2018,thebonusisexpectedtobepaidduring2020to2022.27.Sharecapital

31/12/2017IncreaseDecrease31/12/2018

RMBRMBRMBRMBUnrestrictedsharesAshares453,460,800--453,460,800Bshares232,003,200--232,003,200

________________________________

Totalofunrestrictedshares

andtotalshares685,464,000--685,464,000

________________________________________________________________

VI.NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS-continued28.Capitalreserve

31/12/2017IncreaseDecrease31/12/2018

RMBRMBRMBRMBSharepremium560,038,853--560,038,853Other5,916,588--5,916,588

________________________________

Total565,955,441--565,955,441

________________________________________________________________29.Othercomprehensiveincome

20182018Less:lastyearotherPost-taxPost-tax

OpeningBefore-taxcomprehensiveincomeLess:attributableattributableClosingbalanceamountinP/LcurrentyeartaxexpensetoparenttoNCIbalanceOthercomprehensive

incometobereclassifiedtoprofitandloss3,109,240(376,524)--(143,863)(232,661)2,965,377Foreigncurrencystatement

translationdifference3,109,240(376,524)--(143,863)(232,661)2,965,377

______________________________________________________________________30.Surplusreserve

31/12/2017IncreaseDecrease31/12/2018

RMBRMBRMBRMBStatutorysurplusreserve342,732,000--342,732,000

________________________________________________________________InaccordancewiththeCompanyLawofthePeople'sRepublicofChinaandtheArticlesofAssociationoftheCompany,theCompanyisrequiredtoappropriate10%ofthenetprofittothestatutorysurplusreserveuntiltheaccumulatedbalanceofthestatutorysurplusreservereaches50%oftheregisteredsharecapital.TheCompanydoesnotappropriatenetprofittothesurplusreservein2018.TheCompanycanappropriatediscretionarysurplusreserveafterappropriationofthestatutorysurplusreserve.Discretionarysurplusreservecanbeutilizedtooffsetthedeficitorincreasethesharecapitalafterapproval.31.Retainedearnings

31/12/201831/12/2017

RMBRMBRetainedearningsbroughtforward7,309,081,6186,620,118,562ProfitattributabletoshareholdersoftheCompany1,042,632,9291,031,695,056Less:Dividendspaidinrespectprioryear'sprofit(342,732,000)(342,732,000)

________________________Retainedearningscarriedforward8,008,982,5477,309,081,618

________________________

________________________

VI.NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS-continued31.Retainedearnings-continued(1)Appropriationtosurplusreservebysubsidiaries

Asat31December2018,thebalanceoftheGroup'sunappropriatedprofitsincludeappropriationtosurplusreservebysubsidiariesamountingtoRMB54,336,543(31December2017:RMB51,994,942).(2)Cashdividendsapprovedbygeneralmeeting

Accordingtotheannualgeneralmeetingon25May2018,dividendsdistributionplanhasbeenmade.Onthebasisof685,464,000issuedsharecapital,RMB5.0(includingtaxes)forevery10shareswasdistributedtoshareholders,intotalRMB342,732,000cashdividends.(3)Profitdistributiondecidedafterthebalancesheetdate

Accordingtoaproposaloftheboardofdirectorsapprovedon18April2019,onthebasisof685,464,000issuedsharesin2018,cashdividendsofRMB6.0(includingtaxes)forevery10sharewillbedistributedtoalltheshareholders.TheaggregateamountofcashdividendisRMB411,278,400.Theaboveproposalregardingdividendsdistributionisyettobeapprovedinashareholders'meeting.32.Operatingincomeandcosts

Operatingincomeisanalysedasfollows:

20182017RMBRMBPrincipaloperatingincome5,066,265,0444,856,168,699Otheroperatingincome75,979,69676,376,530

________________________5,142,244,7404,932,545,229________________________________________________Operatingcostisanalysedasfollows:

20182017RMBRMBPrincipaloperatingcost1,872,991,0391,645,690,616Otheroperatingcost28,620,46825,901,663

________________________1,901,611,5071,671,592,279________________________________________________TheoperatingincomefortheGroupismainlyfromthesalesofwine,brandyandsparklingwine.In2018,Over87%(2017:over91%)ofthesalesgeneratedinPRC.

VI.NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS-continued33.Taxesandsurcharges

20182017RMBRMBConsumptiontax157,037,382177,879,324Cityconstructiontax39,655,73852,247,915Educationfeeandsurcharges28,762,50735,831,575Propertytax31,461,70823,113,211Landusetax12,098,79011,874,984Stamptax4,507,7853,945,731Others2,967,7645,359,283

________________________

276,491,674310,252,023________________________________________________FordetailstandardsoftaxratepleaserefertoNoteV.34.Sellingexpenses

20182017RMBRMBMarketingexpenses386,519,123428,828,931Salaryandemployeebenefit297,489,665272,148,620Freight141,756,007139,218,637Trademarkfee73,976,39572,838,612Laborfee72,036,25267,860,856Warehouseleasingexpenses45,668,61353,075,132Depreciationcost41,410,74034,963,089Advertisingfees35,857,27634,753,090Conferenceexpenses32,731,21531,609,123Designcost29,437,75727,226,277Travellingexpenses27,176,27727,709,534Securityandsanitationfee12,896,98612,659,228Waterandelectricityfee11,297,24411,247,163Officeallowance9,707,5186,165,561Packingcost8,195,1607,163,930Taxes7,113,7646,771,337Amortizationoflow-valueconsumables5,756,6024,028,573Businessentertainment5,665,3364,403,750Others29,907,21629,851,000

________________________1,274,599,1461,272,522,443________________________________________________

VI.NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS-continued35.Administrativeexpense

20182017RMBRMBSalaryandemployeebenefit114,473,209106,342,126Depreciation71,978,48571,558,307Maintenancefee25,189,38421,665,024Administrativeexpenses23,766,17622,173,925Amortization18,187,04922,438,364Greeningfeeamortization14,730,80410,667,941Contractingfee13,364,83521,162,623Rentalfees13,012,16712,414,249Safeproductioncost9,692,5747,840,215Securityandsanitationfee8,659,4056,317,723Servicefee6,556,25812,118,257Entertainmentfee5,300,5265,470,001Travellingexpenses3,630,2254,747,256Others15,039,55411,545,122

________________________

343,580,651336,461,133________________________________________________36.Financialexpense

20182017RMBRMBInterestincome(12,086,007)(9,168,772)Exchangeincome(666,323)(182,610)Interestexpenses52,198,77432,233,729Less:Capitalizationofinterests5,843,8726,138,242Bankcharges2,342,7301,846,154

________________________

35,945,30218,590,259________________________________________________37.(Reversalof)Impairmentlossofassets

20182017RMBRMB(Reversalof)Inventoryimpairment(912,166)7,938,748Impairmentlossesfromotherreceivables-354,805

__________________

(912,166)8,293,553

__________________

__________________

VI.NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS-continued38.Otherincome

20182017Assets/incomerelatedProjectSubsidyRMBRMBTaxrefund6,587,77317,765,560IncomeSpecialfundsformanufacturingindustry4,750,0004,100,000IncomeIndustrialdevelopmentsupportproject4,100,000-AssetsNingxiaindustryrevitalizationand

technologyreconstructionfunds1,086,0003,295,000AssetsProjectfunds2,280,0002,280,000AssetsShandongPeninsulaBlueEconomic

Areaconstructionfunds2,000,0002,000,000AssetsSpecialfundsforthedevelopment

ofenterprises42,953,900-IncomeOthers7,493,1996,352,199AssetsOthers16,030,56210,245,625Income

____________________

87,281,43446,038,384________________________________________39.Non-operationincome

Recognizedinextraordinary20182017profitandlossRMBRMBRMBGovernmentgrants-1,600,000-Penaltyincome1,901,5307,993,5711,901,530Others5,451,7797,637,1565,451,779

______________________________

7,353,30917,230,7277,353,309____________________________________________________________40.Non-operationexpenses

Recognizedinextraordinary20182017profitandlossRMBRMBRMBCompensationandpenaltyloss2,576,838347,5282,576,838Donation293,819294,899293,819Others665,251989,049665,251

______________________________

3,535,9081,631,4763,535,908____________________________________________________________

VI.NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS-continued41.Incometax

20182017RMBRMBCurrentincometax352,598,370330,784,002Deferredincometax14,529,1527,350,243

________________________

367,127,522338,134,245________________________________________________Reconciliationbetweenincometaxexpensesandprofitsisasfollows:

20182017RMBRMBProfitbeforetax1,408,611,6981,371,927,763Incometaxexpenseatstatutorytaxrate25%(2017:25%)352,152,925342,981,941Effectofdifferenttaxratesappliedbycertainsubsidiaries(949,634)(9,600,821)Changesinopeningbalancesofdeferredtaxliabilitiesduetotaxrateadjustment-(1,342,916)UnrecognisedDeductibleloss4,642,7273,590,697UtilizationofDeductiblelosseswhichwerenotrecognizedpreviously-(6,157,735)Non-deductibleexpenses5,496,2927,550,095Write-offofdeferredtaxassets5,785,2121,112,984

________________________Incometaxexpenses367,127,522338,134,245

________________________________________________42.Basicanddilutiveearningspershare

ThecalculationofbasicearningspershareisbasedontheconsolidatedprofitattributabletoordinaryshareholdersoftheCompanyduringtheyearandtheweightedaveragenumberofoutstandingordinaryshares.

20182017RMBRMBEarnings

Consolidatedprofitattributabletoordinary

shareholdersoftheCompany1,042,632,9291,031,695,056

________________________Shares

Weightedaveragenumberofoutstanding

ordinaryshares685,464,000685,464,000

________________________Basicearningspershare1.521.51

________________________

________________________

VI.NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS-continued42.Basicanddilutiveearningspershare-continued

TheCompanydoesnothavepotentialdilutiveordinaryshares.Fromthebalancesheetdatetothedateofapprovalofthisreport,therearenosubsequenteventswhichwouldaffectthenumbersoftheweightedaveragenumberofoutstandingofordinaryshares.43.Notestoconsolidatedcashflowstatement(1)Cashreceivedrelatingtootheroperatingactivities:

20182017RMBRMBGovernmentgrants57,123,90020,930,752Interestincome7,871,8533,839,079Penaltyincome1,901,5307,993,571Refundabledepositsofnotespayable-46,900,000Others5,806,5895,573,503

________________________

72,703,87285,236,905________________________________________________(2)Cashpaidrelatingtootheroperatingactivities:

20182017RMBRMBSellingexpenses918,966,855956,902,163Generalandadministrativeexpenses140,112,380107,905,766Refundabledepositsofnotespayable-8,000,000Others4,637,0822,103,059

________________________1,063,716,3171,074,910,988________________________________________________(3)Cashpaidforthepurchasesubsidiariesandotherequity:

20182017RMBRMBCashpaidforacquisitionofAustraliaKilikanoonEstate107,194,420-Less:CashandbankforAustraliaKilikanoonEstate

atacquisitiondate1,359,765-CashpaidforacquisitionofIndomitaWine-318,867,650Less:CashandbankforIndomita

Wineatacquisitiondate-15,071,107

________________________

105,834,655303,796,543________________________________________________

VI.NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS-continued43.Notestoconsolidatedcashflowstatement-continued(4)Cashreceivedrelatingtootherfinancingactivities:

20182017RMBRMBReceivedgovernmentgrantsrelatedtoassets-5,800,000R&DCentrelong-termpayablespledgedtimedeposit61,700,00046,100,000InterestincomefromR&DCentrelong-termpayables

pledgedtimedeposit768,2591,030,804

________________________

62,468,25952,930,804________________________________________________(5)Cashpaidrelatingtootherfinancingactivities:

20182017RMBRMBR&DCentrelong-termpayablespledgedtimedeposit46,100,00061,700,000

________________________________________44.Supplementaryinformationtoconsolidatedcashflowstatement(1)Supplementaryinformationtoconsolidatedcashflowstatement

20182017RMBRMBCashflowsfromoperatingactivities

calculatedbyadjustingthenetprofit:

Netprofit1,041,484,1761,033,793,518Add:Lossfor(reversalof)impairmentofassets(912,166)8,293,553

Depreciationofinvestmentproperties1,857,902590,610Depreciationoffixedassets297,838,358250,264,403Amortizationofintangibleassets19,018,74024,098,781Depreciationofbiologicalassets12,034,81210,160,981Amortizationoflong-termprepaidexpenses12,082,11713,911,581(Gains)lossesondisposalofassets(11,368,355)222,586Financeexpense45,855,74422,381,504Decreaseindeferredtaxassets22,685,13713,315,979Decreaseindeferredtaxliabilities(8,155,985)(5,965,736)Increaseininventories(180,452,933)(138,995,031)Increaseinoperatingreceivables(137,899,294)(180,593,570)Decreaseinoperatingpayables(138,089,507)(78,236,132)

________________________Netcashflowsfromoperatingactivities975,978,746973,243,027

________________________

________________________

VI.NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS-continued44.Supplementaryinformationtoconsolidatedcashflowstatement-continued(2)Significantinvestingandfinancingactivitiesnotinvolvingcashreceiptsandpayments.

20182017RMBRMBPaymentofintangibleassetsandother

long-termassetsbybankacceptances109,378,598140,493,507

________________________________________________

(3)Cashandcashequivalents

31/12/201831/12/2017

RMBRMBClosingbalanceofCashandbank1,475,700,4771,402,522,509Less:

Restrictedbankdeposits2,611,3502,645,410Restrictedothermonetaryfunds93,186,393123,987,825Depositwithaperiodofoverthreemonths173,042,40095,000,000

________________________Closingbalanceofcashandcashequivalents1,206,860,3341,180,889,274

________________________

________________________

31/12/201831/12/2017

RMBRMBCash1,206,860,3341,180,889,274Including:Cashonhand114,335136,973

Bankdepositsondemand1,206,745,9991,180,752,301

________________________Closingbalanceofcashandcashequivalents1,206,860,3341,180,889,274

________________________

________________________45.Assetswithrestrictionofownership

31/12/201831/12/2017

RMBRMBCashandbank95,797,743126,633,235Accountreceivable52,015,03246,337,062Fixedassets412,006,421145,009,923Intangibleassets218,070,414164,051,996

________________________________________________

VI.NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS-continued45Assetswithrestrictionofownership-continued

Asat31December2018,Cashandbankwithrestrictionofownershipasfollows:

31/12/201831/12/2017

RMBRMBR&DCentrelong-termpayablespledgedtimedeposit46,100,00061,700,000Refundabledepositsofletterofcredit44,540,85057,946,190BalanceinAlipayaccount2,483,8164,317,635Homemaintenancefunds2,611,3502,645,410Marginforentitycard51,72714,000DepositforICBCplatform10,00010,000

________________________Total95,797,743126,633,235

________________________

________________________Amongtheaforementioneditems,theamountofRMB2,483,816whichistheblockedbalancesofgoodspaymentinAlipayaccountcanbeunlockedafter15days.Asat31December2018,theamountofaccountsreceivablewithrestrictedownershipisEUR6,628,399(translatedasRMB52,015,032),whichreferstoaccountsreceivableAtrioconductedforfactoringfromBancodeSabadell,S.A.etc.Asat31December2018,fixedassetswithrestrictionofownershipasfollows:

Restrictedreasons31/12/2018CompanyRMBTheCompanyLong-termpayablecollateralfromR&DCentre34,246,887SalesCompanyLong-termpayablecollateralfromR&DCentre39,557,304SalesCompanyLong-termborrowingscollateral33,462,225IndomitaWineShort-termborrowingscollateral75,601,849NingxiaMoser15thChangyuWineChateauCo.,Ltd.("NingxiaChateau")Long-termpayablecollateralfromR&DCentre184,678,629NingxiaWineCo.Ltd.("NingxiaWine").Long-termpayablecollateralfromR&DCentre44,459,527

___________Total412,006,421

______________________

VI.NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS-continued45Assetswithrestrictionofownership-continued

Asat31December2018,Intangibleassetswithrestrictionofownershipasfollows:

Restrictedreasons31/12/2018CompanyRMBTheCompanyLong-termpayablecollateralfromR&DCentre50,902,950R&DCentreLong-termpayablecollateralfromR&DCentre108,913,538NingxiaChateauLong-termpayablecollateralfromR&DCentre8,906,611NingxiaWineLong-termpayablecollateralfromR&DCentre49,347,315

___________Total218,070,414

___________

___________46.Foreignmonetaryitems

(1)Foreignmonetaryitems

TheforeignmonetaryitemslocatedwithinChinaareasfollows:

ClosingforeignExchangeClosingtranslatedcurrencybalancerateRMBbalanceCashandbank

EUR1277.8473997HKD2130.8762187USD7,196,1076.863249,388,322

______________________________________________________

(2)Overseasbusinessentities

TheCompany’soverseassubsidiariesdeterminebookkeepingcurrencybasedontheprimaryeconomicenvironment.ThebookkeepingbasecurrencyofAtrioandFrancsChampsParticipationsSAS("FrancsChamps")areallinEuro,andthebookkeepingbasecurrencyofIndomitaWineisChileanpeso.ThefunctionalcurrencyofAustraliaKilikanoonEstateisAUD.Theforeignmonetaryassetsandliabilitiesoftheoverseassubsidiariesareasfollows:

ClosingforeignExchangeClosingtranslatedcurrencybalancerateRMBbalanceCashandbank

EUR25,3287.8473198,756USD276,1966.86321,895,588Short-termborrowings

USD11,000,0006.863275,495,200

______________________________________________________

VII.CHANGEINCONSOLIDATIONSCOPE1.Businesscombinationunderdifferentcontrol(1)Businesscombinationunderdifferentcontrolincurrentperiod

Nameofacquisitioncompany	Equityacquisitiondate	Equityacquisitioncost	Equityacquisitionratio(%)	Equityacquisitionmethod	Acquisitiondate	Basisofacquisitiondate	Revenuefromacquisitiondatetoyearend	Netprofitfromacquisitiondatetoyearend
							RMB	RMB
AustraliaKilikanoonEstate	18January2018	AUD20,860,825	80%	Purchase	18January2018	Finishpaymentandacquireequity	57,648,905	217,869

Otherdetailinformation:

PursuanttotheAgreementonthedeliveryoftransferredequitiesenteredintobetweentheshareholdersoftheCompanyandAustraliaKilikanoonEstateon5December2017,theCompanyacquired80%equityinterestsofAustraliaKilikanoonEstateattheconsiderationofAUD20,860,825(translatedasRMB107,194,420).TheCompanycompletedtheequitytransferon18January2018andobtainedthecontroloffinancialandoperatingpoliciesoverAustraliaKilikanoonEstate.

(2)ConsiderationandGoodwill

Consideration

AustraliaKilikanoonEstate

RMBCash107,194,420Totalconsideration107,194,420Less:acquiredprovisionalvalueofnetassets70,131,290

___________Goodwill37,063,130

___________

___________(3)Recognisedassetsandliabilitiesofmergeeatacquisitiondate

AustraliaKilikanoonEstateFairvalueBookvalueatacquisitiondateatacquisitiondate

RMBRMBAssetsCashandbank1,359,7651,359,765Accountsreceivable10,366,28110,366,281Prepayment237,174237,174Otherreceivables187,720187,720Inventories69,612,31257,946,312Fixedassets49,029,99938,696,709Intangibleassets16,417,8867,461,624

________________________Totalassets147,211,137116,255,585

________________________

________________________

VII.CHANGEINCONSOLIDATIONSCOPE-continued1.Businesscombinationunderdifferentcontrol-continued(3)Recognisedassetsandliabilitiesofacquireeatacquisitiondate-continued

AustraliaKilikanoonEstateFairvalueBookvalueatacquisitiondateatacquisitiondate

RMBRMBLiabilitiesShort-termborrowings1,282,5501,282,550Accountspayable6,198,8466,198,846Employeebenefitspayable876,987876,987Taxespayable1,789,0931,789,093Long-termborrowings43,497,11943,497,119Deferredtaxliabilities5,902,429-

________________________Totalliabilities59,547,02453,644,595

________________________

________________________Netassets87,664,11362,610,990Less：Non-controllinginterests17,532,82312,522,198

________________________Acquirednetassets70,131,29050,088,792

________________________________________________VIII.INTERESTSINOTHERENTITIES1.StructureoftheGroup

Name	Address	Placeofregistration	Nature	Equityinterestownedbythecompany		Acquisitionmethod
				Direct	Indirect

XinjiangTianzhu(a)	Shihezi,Xinjiang,China	Shihezi,Xinjiang,China	Manufacturing	60%	-	Subsidiaryacquiredinbusinesscombinationundernon-commoncontrol
FransacSales	Cognac,France	Cognac,France	Trading	-	100%	Subsidiaryacquiredinbusinesscombinationundernon-commoncontrol
Mirefleurs	Bordeaux,France	Bordeaux,France	Trading	-	100%	Subsidiaryacquiredinbusinesscombinationundernon-commoncontrol
Atrio	Navarra,Spain	Navarra,Spain	Sales	75%	-	Subsidiaryacquiredinbusinesscombinationundernon-commoncontrol
IWCC	Santiago,Chile	Santiago,Chile	Sales	85%	-	Subsidiariesacquiredbyestablishment
AustraliaKilikanoonEstate	AdelaideAustralia	AdelaideAustralia	Sales	80%	-	Subsidiaryacquiredinbusinesscombinationundernon-commoncontrol
BeijingChangyuSalesanddistributionCo.,Ltd("BeijingSales")	Beijing,China	Beijing,China	Sales	100%	-	Subsidiariesacquiredbyestablishment
YantaiKylinPackagingCo.,Ltd.("KylinPackaging")	Yantai,Shandong,China	Yantai,Shandong,China	Manufacturing	100%	-	Subsidiariesacquiredbyestablishment
YantaiChangyu-CastelWineChateauCo.,Ltd("ChangyuChateau")(b)	Yantai,Shandong,China	Yantai,Shandong,China	Manufacturing	70%	-	Subsidiariesacquiredbyestablishment
Changyu(Jingyang)WineCo.,Ltd.("JingyangWine")	Xianyang,Shanxi,China	Xianyang,Shanxi,China	Manufacturing	90%	10%	Subsidiariesacquiredbyestablishment
YantaiChangyuPioneerWineSalesCo.,Ltd.("SalesCompany")	Yantai,Shandong,China	Yantai,Shandong,China	Sales	100%	-	Subsidiariesacquiredbyestablishment
LangfangDevelopmentZoneCastel-ChangyuWineCo.,Ltd("LangfangCastel")(c)	Lanfang,Hebei,China	Lanfang,Hebei,China	Manufacturing	39%	10%	Subsidiariesacquiredbyestablishment

VIII.INTERESTSINOTHERENTITIES-continued1.StructureoftheGroup-continued

Name	Address	Placeofregistration	Nature	Equityinterestownedbythecompany		Acquisitionmethod
				Direct	Indirect

Changyu(Jingyang)WineSalesCo.,Ltd.("JingyangSales")	Xianyang,Shanxi,China	Xianyang,Shanxi,China	Sales	10%	90%	Subsidiariesacquiredbyestablishment
LangfangChangyuPioneerWineSalesCo.,Ltd("LangfangSales")	Lanfang,Hebei,China	Lanfang,Hebei,China	Sales	10%	90%	Subsidiariesacquiredbyestablishment
ShanghaiChangyuSalesanddistributionCo.,Ltd.("ShanghaiSales")	Shanghai,China	Shanghai,China	Sales	30%	70%	Subsidiariesacquiredbyestablishment
BeijingChangyuAFIPAgriculturedevelopmentCo.,Ltd("AgricultureDevelopment")	Miyun,Beijing,China	Miyun,Beijing,China	Sales	-	100%	Subsidiariesacquiredbyestablishment
BeijingChateau(d)	Beijing,China	Beijing,China	Manufacturing	90%	-	Subsidiariesacquiredbyestablishment
Yantai("BeijingChateau")ChangyuWineSalesCo.,Ltd.("WinesSales")	Yantai,Shandong,China	Yantai,Shandong,China	Sales	90%	10%	Subsidiariesacquiredbyestablishment
YantaiChangyuPioneerInternationalCo.,Ltd.("PioneerInternational")	Yantai,Shandong,China	Yantai,Shandong,China	Sales	70%	30%	Subsidiariesacquiredbyestablishment
HangzhouChangyuWineSalesCo.,Ltd.("HangzhouChangyu")	Hangzhou,Zhejiang,China	Hangzhou,Zhejiang,China	Sales	-	100%	Subsidiariesacquiredbyestablishment
NingxiaGrowing	Yinchuang,Ningxia,China	Yinchuang,Ningxia,China	Planting	100%	-	Subsidiariesacquiredbyestablishment
HuanrenChangyuNationalWinesSalesCo.,Ltd.("NationalWines")	Benxi,Liaoning,China	Benxi,Liaoning,China	Sales	100%	-	Subsidiariesacquiredbyestablishment
LiaoningChangyuIceWineChateauCo.,Ltd.("IceChateau")(e)	Benxi,Liaoning,China	Benxi,Liaoning,China	Manufacturing	51%	-	Subsidiariesacquiredbyestablishment
YantaiDevelopmentZoneChangyuTradingCo.,Ltd("DevelopmentZoneTrading")	Yantai,Shandong,China	Yantai,Shandong,China	Sales	-	100%	Subsidiariesacquiredbyestablishment
ShenzhenChangyuWineMarketingLtd.("ShenzhenMarketing")	Shenzhen,Guangdong,China	Shenzhen,Guangdong,China	Sales	-	100%	Subsidiariesacquiredbyestablishment
YantaiChangyuFushanTradingCompany("FushanTrading")	Yantai,Shandong,China	Yantai,Shandong,China	Sales	-	100%	Subsidiariesacquiredbyestablishment
BeijingAFIPMeetingCenter("MeetingCenter")	Miyun,Beijing,China	Miyun,Beijing,China	Service	-	100%	Subsidiariesacquiredbyestablishment
BeijingAFIPTourismandCulture("AFIPTourism")	Miyun,Beijing,China	Miyun,Beijing,China	Tourism	-	100%	Subsidiariesacquiredbyestablishment
NingxiaWine	Yinchuan,Ningxia,China	Yinchuan,Ningxia,China	Manufacturing	100%	-	Subsidiariesacquiredbyestablishment
YantaiChangyuDingLuoTeChateau.("DingLuoTeChateau")	Yantai,ShandongChina	Yantai,ShandongChina	RetailandSales	65%	35%	Subsidiariesacquiredbyestablishment
QingTongXiaChangyuWineMarketingLtd("QingTongXiaSales")	QingTongXia,Ningxia,China	QingTongXia,Ningxia,China	Sales	-	100%	Subsidiariesacquiredbyestablishment
ShiheziChateau	Shihezi,Xinjiang,China	Shihezi,Xinjiang,China	Manufacturing	100%	-	Subsidiariesacquiredbyestablishment
NingxiaChateau	Yinchuan,Ningxia,China	Yinchuan,Ningxia,China	Manufacturing	100%	-	Subsidiariesacquiredbyestablishment
ShanxiChangyuRinaCastleChateauCo.,Ltd.("Chang'anChateau")	Xianyang,Shanxi,China	Xianyang,Shanxi,China	Manufacturing	100%	-	Subsidiariesacquiredbyestablishment
R&DCentre(f)	Yantai,ShandongChina	Yantai,ShandongChina	Manufacturing	72%	-	Subsidiariesacquiredbyestablishment
Changyu(HuanRen)WineCo.,Ltd("HuanRenWine")	BenxiLiaoNingChina	BenxiLiaoNingChina	WineproductionProjecting	100%	-	Subsidiariesacquiredbyestablishment
XinjiangChangyuSalesCo.,Ltd("XinjiangSales")	ShiheziXinjiangChina	ShiheziXinjiangChina	Sales	-	100%	Subsidiariesacquiredbyestablishment
NingxiaChangyuTradingCo.,Ltd("NingxiaTrading")	YinchuanNingxiaChina	YinchuanNingxiaChina	Sales	-	100%	Subsidiariesacquiredbyestablishment
ShanxiChangyuRinaWineSalesCo.,Ltd("ShanxiSales")	XianyangShanxiChina	XianyangShanxiChina	Sales	-	100%	Subsidiariesacquiredbyestablishment
PenglaiChangyuWineSalesCo.,Ltd("PenglaiSales")	PenglaiShandongChina	PenglaiShandongChina	Sales	-	100%	Subsidiariesacquiredbyestablishment
LaizhouChangyuWineSalesCo.,Ltd("LaizhouSales")	LaizhouShandongChina	LaizhouShandongChina	Sales	-	100%	Subsidiariesacquiredbyestablishment
FrancsChamps	Cognac,France	Cognac,France	Investmentandtrading	100%	-	Subsidiariesacquiredbyestablishment
LanzhouChangyuWineSalesCo.,Ltd("LanzhouSales")	LanzhouGansu,China	LanzhouGansu,China	Sales	-	100%	Subsidiariesacquiredbyestablishment
BeijingRetailingCo.Ltd("BeijingRetailing")	Beijing,China	Beijing,China	Sales	-	100%	Subsidiariesacquiredbyestablishment
TianjinChangyuPioneerSalesCo.,Ltd("TianjinPioneer")	Tianjin,China	Tianjin,China	Sales	-	100%	Subsidiariesacquiredbyestablishment
FuzhouChangyuPioneerSalesCo.,Ltd("FuzhouPioneer")	FuzhouFujian,China	FuzhouFujian,China	Sales	-	100%	Subsidiariesacquiredbyestablishment
NanjingChangyuPioneerSalesCo.,Ltd("NanjingPioneer")	Nanjing,Jiangsu,China	Nanjing,Jiangsu,China	Sales	-	100%	Subsidiariesacquiredbyestablishment
XianyangChangyuPioneerSalesCo.,Ltd("XianyangPioneer")	Xianyang,Shanxi,China	Xianyang,Shanxi,China	Sales	-	100%	Subsidiariesacquiredbyestablishment
ShenyangChangyuPioneerSalesCo.,Ltd("ShenyangPioneer")	Shenyang,Liaoning,China	Shenyang,Liaoning,China	Sales	-	100%	Subsidiariesacquiredbyestablishment
JinanChangyuPioneerSalesCo.,Ltd("JinanPioneer")	Jinan,Shandong,China	Jinan,Shandong,China	Sales	-	100%	Subsidiariesacquiredbyestablishment
ShanghaiChangyuPioneerSalesCo.,Ltd("ShanghaiPioneer")	Shanghai,China	Shanghai,China	Sales	-	100%	Subsidiariesacquiredbyestablishment
FuzhouChangyuPioneerSalesCo.,Ltd("FuzhouPioneer")	Fuzhou,Jiangxi,China	Fuzhou,Jiangxi,China	Sales	-	100%	Subsidiariesacquiredbyestablishment
ShijiazhuangChangyuPioneerSalesCo.,Ltd("ShijiazhuangPioneer")	Shijiazhuang,Hebei,China	Shijiazhuang,Hebei,China	Sales	-	100%	Subsidiariesacquiredbyestablishment
HangzhouYuzefengSalesCo.,Ltd("HangzhouYuzefeng")	Hangzhou,Zhejiang,China	Hangzhou,Zhejiang,China	Sales	-	100%	Subsidiariesacquiredbyestablishment
JilinChangyuPioneerSalesCo.,Ltd("JilinPioneer")	Changchun,Jilin,China	Changchun,Jilin,China	Sales	-	100%	Subsidiariesacquiredbyestablishment

VIII.INTERESTSINOTHERENTITIES-continued1.StructureoftheGroup-continued

Name	Address	Placeofregistration	Nature	Equityinterestownedbythecompany		Acquisitionmethod
				Direct	Indirect

BeijingChangyuPioneerSalesCo.,Ltd("BeijingPioneer")	Beijing,China	Beijing,China	Sales	-	100%	Subsidiariesacquiredbyestablishment
HarbinChangyuPioneerSalesCo.,Ltd("HarbinPioneer")	Harbin,Heilongjiang,China	Harbin,Heilongjiang,China	Sales	-	100%	Subsidiariesacquiredbyestablishment
HunanChangyuPioneerSalesCo.,Ltd("HunanPioneer")	Changsha,Hunan,China	Changsha,Hunan,China	Sales	-	100%	Subsidiariesacquiredbyestablishment
YinchuanChangyuPioneerSalesCo.,Ltd("YinchuanPioneer")	Yinchuan,Ningxia,China	Yinchuan,Ningxia,China	Sales	-	100%	Subsidiariesacquiredbyestablishment
KunmingChangyuPioneerSalesCo.,Ltd("KunmingPioneer")	Kunming,Yunnan,China	Kunming,Yunnan,China	Sales	-	100%	Subsidiariesacquiredbyestablishment
ChongqingChangyuPioneerSalesCo.,Ltd("ChongqingPioneer")	Chongqing,China	Chongqing,China	Sales	-	100%	Subsidiariesacquiredbyestablishment
WuhanChangyuPioneerSalesCo.,Ltd("WuhanPioneer")	Wuhan,Hubei,China	Wuhan,Hubei,China	Sales	-	100%	Subsidiariesacquiredbyestablishment
HohhotChangyuPioneerSalesCo.,Ltd("HohhotPioneer")	HohhotInnerMongolia,China	HohhotInnerMongolia,China	Sales	-	100%	Subsidiariesacquiredbyestablishment
ChengduChangyuPioneerSalesCo.,Ltd("ChengduPioneer")	Chengdu,Sichuan,China	Chengdu,Sichuan,China	Sales	-	100%	Subsidiariesacquiredbyestablishment
NanningChangyuPioneerSalesCo.,Ltd("NanningPioneer")	Nanning,Guangxi,China	Nanning,Guangxi,China	Sales	-	100%	Subsidiariesacquiredbyestablishment
LanzhouChangyuPioneerSalesCo.,Ltd("LanzhouPioneer")	LanzhouGansu,China	LanzhouGansu,China	Sales	-	100%	Subsidiariesacquiredbyestablishment
YantaiFulangduo	YantaiShandong,China	YantaiShandong,China	Sales	-	100%	Subsidiariesacquiredbyestablishment
HefeiChangyuPioneerSalesCo.,Ltd("HefeiPioneer")	Hefei,Anhui,China	Hefei,Anhui,China	Sales	-	100%	Subsidiariesacquiredbyestablishment
UrumchiChangyuPioneerSalesCo.,Ltd("UrumchiPioneer")	UrumchiXinjiang,China	UrumchiXinjiang,China	Sales	-	100%	Subsidiariesacquiredbyestablishment
GuangzhouChangyuPioneerSalesCo.,Ltd("GuangzhouPioneer")	GuangzhouGuangdong,China	GuangzhouGuangdong,China	Sales	-	100%	Subsidiariesacquiredbyestablishment
GrapeWineMarketingLtd.	YantaiShandongChina	YantaiShandongChina	Sales	100%	-	Subsidiariesacquiredbyestablishment

Explanationindifferencebetweenholdinginterestsandvotingrightsinsubsidiaries:

(a)XinjiangTianzhuwasacquiredbytheCompany,accountingfor60%ofXinjiangTianzhu'sequity

interest.Throughagreementarrangement,theCompanyhasthefullpowertocontrolXinjiangTianzhu'sstrategicoperating,investingandfinancingpolicies.Theagreementarrangementwillbeterminatedon6August2017.Upontheexpiryoftheagreementarrangement,thenon-controllinginterestsofXinjiangTianzhuwillnormallyenjoy/commitalltherightsandobligationsoftheshareholdersasstipulatedintheArticlesofAssociation.(b)ChangyuChateauisaSino-foreignjointventureestablishedbytheCompanyandaforeign

investor,accountingfor70%ofChangyuChateau'sequityinterest.Throughagreementarrangement,theCompanyhasthefullpowertocontrolChangyuChateau'sstrategicoperating,investingandfinancingpolicies.Theagreementarrangementwillbeterminatedon31December2022.(c)LangfangChateauisaSino-foreignjointventureestablishedbytheCompanyandaforeign

investor,accountingfor49%ofLangfangChateau'sequityinterestbytheCompanyandsubsidiaries.Throughagreementarrangement,theCompanyhasthefullpowertocontrolLangfangChateau'sstrategicoperating,investingandfinancingpolicies.Theagreementarrangementwasterminatedon31December2017.MinorityshareholdersofLangfangChateauwillbeentitledto/abidedbytherights/obligationsoftheshareholdersasagreedintheArticlesofAssociationupontheduedateoftheagreementarrangement.(d)BeijingChateauisajointventureestablishedbytheCompany,YantaiDe'anandBeijing

Qinglang,andtheCompanyincreasesthecapitalcontributionRMB502,910,000inthisperiod,YantaiDe'anandBeijingQinglangtogetherincreasethecapitalcontributionRMB29,840,000.BeijingChateauhascompelledthebusinessregistrationon22December2017.Aftercapitalcontributionincreased,theCompanyisaccountingfor90%ofBeijingChateau'sequityinterest.TheCompanygetsthecontroloveroperation,investment,andfinancialdecisionofBeijingChateauthroughagreementarrangement,whichwillterminateon2September2019.

VIII.INTERESTSINOTHERENTITIES-continued1.StructureoftheGroup-continued(e)IceChateauisaSino-foreignjointventureestablishedbytheCompanyandaforeigninvestor,

accountingfor51%ofIceChateau'sequityinterest.Throughagreementarrangement,theCompanyhasthefullpowertocontrolIceChateau'sstrategicoperating,investingandfinancingpolicies.Theagreementarrangementwillbeterminatedon31December2021.(f)R&DCentreisajointventureestablishedbytheCompanyandCADF,accountingfor72%of

R&DCentre'sequityinterestat31December2018.TheCompanyhascompletecontrolovertheoperation,investmentandfinancialpoliciesoftheR&DCentresubjecttothecontractarrangementasdescribedinNoteVI-25.Thecontractarrangementwillexpireon22May2026.Asat31December2018,theremaininginvestmentofIFADaccountedfor28%oftheregisteredcapital.2.Non-whollyownedsubsidiaries

Profitandlossbelongs31/12/2018Minoritytonon-controllingDistributionstoAssimilatenon-controllingNameinterestshareholderratiointerestshareholdersnon-controllinginterestinterestXinjiangTianzhu40%(2,760,804)--50,612,648Atrio25%844,190(744,149)-31,726,931ChangyuChateau30%---12,365,016LangfangCastel51%(1,774,541)--20,927,981BeijingChateau10%---65,133,868IceChateau49%---33,319,062IWCC15%2,619,885(2,655,627)-53,079,827AustraliaKilikanoonEstate20%(310,144)-17,532,82317,222,679

____________________________________

(1,381,414)(3,399,776)17,532,823284,388,012

________________________________________________________________________

VIII.INTERESTSINOTHERENTITIES-continued3.Keyfinancialinformationofimportantnon-whollyownedsubsidiaries

Name

31/12/2018

31/12/2017

Currentassets

Non-currentassets

Totalassets

Currentliabilities

Non-currentliabilities

Totalliabilities

Currentassets

Non-currentassets

Totalassets

Currentliabilities

Non-currentliabilities

Totalliabilities

XinjiangTianzhu	27,390,495	66,486,795	93,877,290	-	5,336,114	5,336,114	30,264,441	71,323,940	101,588,381	809,080	5,336,114	6,145,194
ChangyuChateau	141,298,023	114,694,168	255,992,191	171,869,662	-	171,869,662	140,038,021	115,435,985	255,474,006	175,061,601	-	175,061,601
LangfangCastel	17,659,511	16,001,682	33,661,193	3,358,322	-	3,358,322	22,728,536	17,973,719	40,702,255	6,133,909	-	6,133,909
BeijingChateau	219,973,582	461,115,089	681,088,671	62,598,545	-	62,598,545	214,079,274	481,668,050	695,747,324	73,963,043	-	73,963,043
IceChateau	45,194,591	23,920,890	69,115,481	14,974,458	100,000	15,074,458	38,657,358	25,484,359	64,141,717	10,871,695	100,000	10,971,695
Atrio	464,421,130	99,080,668	563,501,798	381,659,315	54,520,937	436,180,252	398,835,959	116,299,504	515,135,463	299,030,002	89,336,338	388,366,340
IWCC	214,784,490	300,969,342	515,753,832	148,359,328	4,976,161	153,335,489	175,669,256	305,664,706	481,333,962	122,023,764	5,206,406	127,230,170
AustraliaKilikanoonEstate	87,634,707	63,759,866	151,394,573	13,387,942	51,893,171	65,281,113	N/A	N/A	N/A	N/A	N/A	N/A

Name	2018				2017
	Revenue	Netprofit(loss)	Totalcomprehensiveincome	Operatingactivitiescashflows	Revenue	Netprofit(loss)	Totalcomprehensiveincome	Operatingactivitiescashflows

XinjiangTianzhu	18,803	(6,902,010)	(6,902,010)	43,112	116,555,588	15,531,513	15,531,513	32,224,800
ChangyuChateau	121,235,278	3,710,124	3,710,124	16,096,447	68,964,230	985,910	985,910	19,629,212
LangfangCastel	5,038,281	(3,479,492)	(3,479,492)	673,422	39,165,527	(1,616,638)	(1,616,638)	(1,554,380)
BeijingChateau	159,369,783	16,555,846	16,555,846	19,627,933	145,103,200	17,475,647	17,475,647	49,964,881
IceChateau	57,290,490	870,994	870,994	289,782	49,643,396	1,241,699	1,241,699	(1,748,535)
Atrio	327,550,545	3,811,465	3,376,761	6,129,923	281,007,167	2,000,682	7,701,416	(32,148,326)
IWCC	262,104,563	15,934,347	17,465,900	3,584,648	157,953,467	28,791,684	31,458,952	16,482,765
AustraliaKilikanoonEstate	57,648,905	217,869	(1,550,720)	(1,522,151)	N/A	N/A	N/A	N/A

*Thisisamountincurredintheperiodbetweenacquisitiondateand31December2018.

IX.FINANCIALINSTRUMENTANDRISKMANAGEMENT

TheGroup'smajorfinancialinstrumentsincludecashandbank,notesandaccountreceivable,otherreceivables,available-for-salefinancialassets,othernon-currentassets,short-termborrowings,accountspayable,otherpayables,interestpayables,andlong-termborrowings.DetailsofthesefinancialinstrumentsaredisclosedinNoteVI.Therisksassociatedwiththesefinancialinstrumentsandthepoliciesonhowtomitigatetheserisksaresetoutbelow.Managementmanagesandmonitorstheseexposurestoensuretherisksaremonitoredatacertainlevel.TheGroupadoptssensitivityanalysistechniquetoanalysehowtheprofitandlossfortheperiodandshareholders'equitywouldhavebeenaffectedbyreasonablypossiblechangesintherelevantriskvariables.Asitisunlikelythatriskvariableswillchangeinanisolatedmanner,andtheinterdependenceamongriskvariableswillhavesignificanteffectontheamountultimatelyinfluencedbythechangesinasingleriskvariable,thefollowingarebasedontheassumptionthatthechangeineachriskvariableisonastand-alonebasis.TheGroup'sriskmanagementobjectivesaretoachieveaproperbalancebetweenrisksandyield,minimisetheadverseimpactsofrisksontheGroup'soperationperformance,andmaximisethebenefitsoftheshareholdersandotherstakeholders.Basedontheseriskmanagementobjectives,theGroup'sbasicriskmanagementstrategyistoidentifyandanalysetheGroup'sexposuretovariousrisks,establishanappropriatemaximumtolerancetorisk,implementriskmanagement,andmonitorsregularlyandeffectivelytheseexposurestoensuretherisksaremonitoredatacertainlevel.1.Riskmanagementobjectivesandpolicies1.1Marketrisk1.1.1Currencyrisk

Currencyriskistheriskthatlosseswilloccurbecauseofchangesinforeignexchangerates.TheGroup'sexposuretothecurrencyriskisprimarilyassociatedwithEURandUSD.SeveraloftheGroup'ssubsidiarieshavepurchasesandsalesdenominatedinEUR,ChileanpesoandAustraliadollar,borrowingsdenominatedinUSD,whiletheGroup'sotherprincipalactivitiesaredenominatedandsettledinRMB.Asat31December2018,exceptthattheassetsandliabilitiesstatedinthetablebelowareforeigncurrencydepositsorexcessofborrowings,theassetsandliabilitiesofeachentityoftheGrouparesettledintheirrespectivefunctionalcurrencies.

31/12/201831/12/2017

RMBRMBBankandcash(EUR)199,7531,190,459Bankandcash(USD)51,283,91034,843,968Short-termborrowings(USD)75,495,20058,807,800

________________________________________________CurrencyriskarisingfromtheassetsandliabilitiesdenominatedinforeigncurrenciesmayhaveimpactontheGroup'sperformance.TheGroupcloselymonitorstheeffectsofchangesintheforeignexchangeratesontheGroup'scurrencyriskexposures.TheGroupcurrentlydoesnottakeanymeasurestohedgecurrencyriskexposures.

IX.FINANCIALINSTRUMENTANDRISKMANAGEMENT-continued1.Riskmanagementobjectivesandpolicies-continued1.1Marketrisk-continued1.1.1Currencyrisk-continued

SensitivityanalysisoncurrencyriskWhereallothervariablesareheldconstant,thereasonablypossiblechangesintheforeignexchangeratemayhavethefollowingpre-taxeffectontheprofitorlossfortheperiodandshareholders'equity:

Domesticentities:

CurrentyearPrioryear

EffectonEffectonshareholders'shareholders'ChangeinexchangerateEffectonprofitequityEffectonprofitequity

RMBRMBRMBRMBEUR5%increaseagainstRMB50505050EUR5%decreaseagainstRMB(50)(50)(50)(50)USD5%increaseagainstRMB2,469,4162,469,4161,456,5251,456,525USD5%increaseagainstRMB(2,469,416)(2,469,416)(1,456,525)(1,456,525)

__________________________________________________________________Overseasentities:

CurrentyearPrioryear

EffectonEffectonshareholders'shareholders'ChangeinexchangerateEffectonprofitequityEffectonprofitequity

RMBRMBRMBRMBUSD5%increaseagainstEUR90090052,69552,695USD5%decreaseagainstEUR(900)(900)(52,695)(52,695)USD15%increaseagainstChilePeso(11,042,641)(11,042,641)(5,275,651)(5,275,651)USD15%decreaseagainstChilePeso11,042,64111,042,6415,275,6515,275,651EUR10%increaseagainstChilePeso19,87619,87658,35058,350EUR10%decreaseagainstChilePeso(19,876)(19,876)(58,350)(58,350)

__________________________________________________________________Note:Asat31December2018,theGroup'smanagementanticipatedachangeof5%in

exchangerateforUSDtoEUR,10%inexchangerateforEURtoChileanPesoand15%inexchangerateforUSDtoChileanPeso.

IX.FINANCIALINSTRUMENTANDRISKMANAGEMENT-continued1.Riskmanagementobjectivesandpolicies-continued1.1Marketrisk-continued1.1.2Interestraterisk-riskofchangesincashflows

TheGroup'scashflowinterestrateriskoffinancialinstrumentsrelatesprimarilytovariable-ratebankborrowings(RefertoNoteVI-1,NoteVI-16andNoteVI-24fordetails).ItistheGroup'spolicytokeepitsborrowingsatfloatingrateofinterestssoastoeliminatethefairvalueinterestraterisk.ThesensitivityanalysisoninterestrateriskThesensitivityanalysisoninterestrateriskisbasedonthechangesinthemarketinterestratemayinfluencetheinterestincomeorexpenseofthevariableratefinancialinstruments.ManagementoftheGroupbelievesinterestrateriskonbankdepositisnotsignificant,thereforedoesnotdisclosesensitivityanalysisforinterestraterisk.Whereallothervariablesareheldconstant,thereasonablypossiblechangesintheinterestratemayhavethefollowingpre-taxeffectontheprofitorlossfortheperiodandshareholders'equity

CurrentyearPrioryear

EffectonEffectonshareholders'shareholders'ChangeininterestrateEffectonprofitequityEffectonprofitequityBankborrowings50%increase(2,016,667)(2,016,667)(2,046,646)(2,046,646)Bankborrowings50%decrease2,016,6672,016,6672,046,6462,046,646

________________________________________________________________Note:Asat13December2018,theGroup'smanagementanticipatedachangeof50basispoints

inthebank'svariableinterestrate.1.2Creditrisk

Asat31December2018,theGroup'smaximumexposuretocreditriskwhichwillcauseafinanciallosstotheGroupduetofailuretodischargeanobligationbythecounterparties.Inordertominimisethecreditrisk,theGrouphasadoptedapolicytoensurethatallsalescustomershavegoodcreditrecords.TheGrouphasdelegatedateamresponsiblefordeterminationofcreditlimits,creditapprovalsandothermonitoringprocedurestoensurethatfollow-upactionistakentorecoveroverduedebts.Fortransactionsthatarenotdenominatedinthefunctionalcurrencyoftherelevantoperatingunit,theGroupdoesnotoffercredittermswithoutthespecificapprovaloftheDepartmentofCreditControlintheGroup.Inaddition,theGroupreviewstherecoverableamountofeachindividualtradedebtateachbalancesheetdatetoensurethatadequateimpairmentlossesaremadeforirrecoverableamounts.Inthisregard,themanagementoftheGroupconsidersthattheGroup'screditriskissignificantlyreduced.

IX.FINANCIALINSTRUMENTANDRISKMANAGEMENT-continued1.Riskmanagementobjectivesandpolicies-continued1.2Creditrisk-continued

SincetheGrouptradesonlywithrecognizedandcreditworthythirdparties,thereisnorequirementforcollateral.Concentrationsofcreditriskaremanagedbycustomer/counterparty,bygeographicalregionandbyindustrysector.Asat31December2018,19.8%oftheGrouptradereceivablesareduefromtopfivecustomers(31December2017:20.7%).ThereisnocollateralorothercreditenhancementonthebalanceofthetradereceivablesoftheGroup.1.3Liquidityrisk

Inthemanagementoftheliquidityrisk,theGroupmonitorsandmaintainsalevelofcashandcashequivalentsdeemedadequatebythemanagementtofinancetheGroup'soperationsandmitigatetheeffectsoffluctuationsincashflows.Themanagementmonitorstheutilisationofbankborrowingsandensurescompliancewithloancovenants.ThefollowingisthematurityanalysisforfinancialassetsandfinancialliabilitiesheldbytheGroupwhichisbasedonundiscountedremainingcontractualobligations:

Non-derivativefinancialliabilities

Lessthanonemonth1-3months3-12months1-5yearsMorethanfiveyearsTotal

RMBRMBRMBRMBRMBRMBShort-termborrowings2,338,69857,691,463641,831,131--701,861,292Accountspayable163,879,578327,759,156221,934,147--713,572,881Otherpayables155,842,255179,896,318256,314,091--592,052,664Interestpayable712,826----712,826Long-termborrowings8,382,99631,970,17085,822,835168,574,037-294,750,038Long-termpayables-22,762,93414,158,433143,555,43390,356,300270,833,100

____________________________________________________

331,156,353620,080,0411,220,060,637312,129,47090,356,3002,573,782,801

________________________________________________________________________________________________________1.4Fairvaluedisclosure-Financialassetsandliabilitiesnotmeasuredusingfairvalue

FairvalueCarryingamountLevel1Level2Level3Total

offairvalueoffairvalueoffairvalueLong-termpayablesmeasured

atamortizedcost259,000,000-223,263,886-223,263,886

______________________________________________________________________________Asat31December2018,ThemanagementoftheGroupbelievesthat,apartfromtheaforementionedlong-termpayables,thecarryingamountsofotherfinancialassetsandfinancialliabilitiesmeasuredatamortisedcostinthefinancialstatementsareclosetothefairvaluesoftheseassetsandliabilities.

X.RELATEDPARTYANDRELATEDPARTYTRANSACTIONS1.Parentcompany

Nameof		Typeof	Placeof	Legal	Scope	Registered	Percentage	Percentage	Incorporate
parentcompany	Relation	enterprise	registration	representative	ofbusiness	capital	ofshares	ofvotingrights	Code
						RMB	%	%

ChangyuGroupCompany

ParentCompany

LimitedCompany

Yantai

ZhouHongjiang

Manufacturing

50,000,000

50.4

50.4

265645824

Duringtheyearended31December2018,thereisnochangeinparentcompany'sregisteredcapital,sharesholdingorvotingpower.2.Subsidiaries:PleaserefertoNoteVIII.3.Otherrelatedparties

NameofrelatedparitiesNatureofrelatedpartiesIncorporatecodeYantaiChangyuWineCultureMuseumCompanycontrolled913706007582586548

Co.,Ltd.("WineCultureMuseum")bythesameparentYantaiChangyuInternationalWindowoftheCompanycontrolled91370600672208146X

WineCityCo.,Ltd.("WindowoftheWineCity)bythesameparentYantaiShenMaPackingCo.,Ltd.Companycontrolled91370600553393350J

("ShenMaPacking")bythesameparentYantaiZhongyaPharmaceuticalTonicCompanycontrolled91370600726203923M

WineCo.,Ltd.("ZhongyaPharmaceutical")bythesameparentYantaiChangyuCultureTourismProductionCompanycontrolled91370602MA3N7A877P

SalesCo.,Ltd.("CultureSales")bythesameparentYantaiChangyuCultureTourismDevelopmentCompanycontrolled91370602MA3N59J300

Co.,Ltd.("CultureDevelopment")bythesameparent

4.Significantrelatedpartytransactions(1)Purchasesfromandsalestorelatedparties

Purchasefromrelatedparties

Thecontentofrelated20182017

partytransactionsRMBRMBShenMaPackingproductpurchase173,238,289145,872,001ZhongyaPharmaceuticalproductpurchase15,690,9309,279,380WineCultureMuseumproductpurchase16,784,7116,336,832WindowoftheWineCityproductpurchase7,913,3422,756,050CultureSalesproductpurchase35,857

______________________

213,663,129164,244,263____________________________________________Allrelatedpartytransactionsarebasedonthenegotiatedprice.In2018,purchasesfromrelatedpartiesaccountedfor11.2%oftheGroup'stotalpurchase(2016:

10.9%)

X.RELATEDPARTYANDRELATEDPARTYTRANSACTIONS-continued4.Significantrelatedpartytransactions-continued(1)Purchasesfromandsalestorelatedparties-continued

Salestorelatedparties

Thecontentofrelated20182017

partytransactionsRMBRMBWineCultureMuseumgoodssales23,515,3798,235,520WindowoftheWineCitygoodssales13,821,55512,205,247ZhongyaPharmaceuticalgoodssales4,552,2692,035,003CultureSalesgoodssales2,914,686-ShenMaPackinggoodssales348,2471,634,883

______________________

45,152,13624,110,653____________________________________________Allrelatedpartytransactionsarebasedonthenegotiatedprice.In2018,salestorelatedpartiesaccountedforlessthan1%oftheGroup'stotalsales(2017:lessthan1%).(2)Propertyleasedfromarelatedparty

TheGroupasLessee

2018AssetsleasedBeginningdateEndingdateRentalexpense

RMBChangyuGroupCompanyofficebuilding1January201631December20201,538,840ChangyuGroupCompanyofficebuildingandfactory1January201731December20211,331,364ChangyuGroupCompanyofficebuildingandfactory1January201731December20213,994,091

_______

6,864,295

______________Allrelatedpartytransactionsarebasedonthenegotiatedprice.TheGroupasLessor

2018AssetsleasedBeginningdateEndingdateRentalincome

RMBShenMaPackingofficebuildingandfactory1July201730June20221,478,982ZhongyaPharmaceuticalofficebuildingandfactory1January201831December2018518,182

_______

1,997,164

______________Allrelatedpartytransactionsarebasedonthenegotiatedprice.

X.RELATEDPARTYANDRELATEDPARTYTRANSACTIONS-continued4.Significantrelatedpartytransactions-continued(3)Othersignificantrelatedpartytransactions

Thecontentofrelated

partytransactionsNote20182017

RMBRMBChangyuGroupCompanyRoyaltyfee(a)73,976,39572,838,612ChangyuGroupCompanyPatentsfee(b)50,00050,000

________________________________________Allrelatedpartytransactionsarebasedonthenegotiatedprice.(a)Royaltyfee

Pursuanttoaroyaltyagreementdated18May1997,startingfrom18September1997,theCompanymayusecertaintrademarksofChangyuGroupCompany,whichhavebeenregisteredwiththePRCTrademarkOffice.Anannualroyaltyfeeat2%oftheGroup'sannualsalesispayabletoChangyuGroupCompany.Thelicenseiseffectiveuntiltheexpiryoftheregistrationofthetrademarks.During2018,royaltyfeepaidtorelatedcompanyaccountedfor100%oftheGroup(2017:

100%).(b)Patentsfee

TheCompanyrenewedthecontracton20August2016for10years.Theannualpatents

usagefeepayablebytheCompanytoChangyuGroupCompanyremainedRMB

50,000.Fortheyearended31December2018,thepatentsusagefeepayabletoChangyu

GroupCompanyisamountedtoRMB50,000(2017:RMB50,000).

During2018,patentfeepaidtorelatedcompanyaccountedfor100%oftheGroup(2017:

100%).(4)Remunerationofthemanagement

20182017RMBRMBRemunerationofthemanagement13,102,00510,309,409

________________________________________________

X.RELATEDPARTYANDRELATEDPARTYTRANSACTIONS-continued5.Balanceduefrom/torelatedparties(1)Balanceduefromrelatedparties

31/12/201831/12/2017AccountsreceivableBalanceProvisionBalanceProvision

RMBRMBRMBRMBZhongyaPharmaceutical2,768,391-8,134,150-ShenMaPacking.17,137-1,342,348-WindowoftheWineCity1,911,157-3,196,095-WineCultureMuseum--34,280-

__________________________________

4,696,685-12,706,873-

____________________________________________________________________

31/12/201831/12/2017OtherreceivableBalanceProvisionBalanceProvision

RMBRMBRMBRMBShenMaPacking.813,440-813,440-

______________________________________________________________(2)Balanceduetorelatedparties

Accountspayable31/12/201831/12/2017

RMBRMBShenMaPacking.55,366,78552,403,056ZhongyaPharmaceutical6,722,6672,051,991WineCultureMuseum4,646,7312,040,860WindowoftheWineCity4,789,6001,485,766

________________________

71,525,78357,981,673________________________________________________Otherpayable31/12/201831/12/2017

RMBRMBShenMaPacking.450,000-ChangyuGroupCompany78,414,97877,208,929

________________________

78,864,97877,208,929________________________________________________Theaboveamountsduetorelatedpartiesareunsecuredandinterest-free.

XI.COMMITMENT1.Importantcommitments

(1)Capitalcommitments

31/12/201831/12/2017

RMB'000RMB'000Capitalcommitmentfor

purchasingnon-currentassets996,6751,246,506

________________________________________________

(2)Operatingleasecommitment

AslesseeSignificantoperatinglease:Totalfutureminimalleasepaymentsundernon-cancelablecontractwithlessorareasfollow:

31/12/201831/12/2017

RMB'000RMB'000Within1year20,57632,2361to2years11,75719,1162to3years10,06411,9433yearsandabove84,09595,342

________________________

126,492158,637________________________________________________2.Contingentliability

TheGroupdonothaveanysignificantcontingentliabilitiesasatbalancesheetdate.XII.POSTBALANCESHEETDATEEVENT1.Profitappropriation

Accordingtotheboardofthedirectorresolutionraisedon18April2019,theCompanyproposed

acashdividendofRMB6.0(includingtaxes)forevery10sharesinrespectof2018basedonthe

issuedsharesof685,464,000.TheaggregateamountofcashdividendisRMB411,278,400.The

resolutionistobeapprovedbytheannualgeneralmeeting.

XIII.OTHERSIGNIFICANTEVENTS

CapitalmanagementThemaintargetofthecapitalmanagementofthegroupistoensurethecontinuousoperationofthegroup,optimizetheportfoliostructureofequityfinancinganddebtfinancing,soastoachievethegoalofmaximizingshareholderbenefits.Thecapitalstructureofthegroupconsistsofthefollowingparts:

(1)Cashandcashequivalents

(2)Sharecapital,capitalreserve,surplusreserveandretainedearningsThemanagementreviewsthegroup'scapitalstructureaccordingtotheinterimoryear-endfinancialreportsandconsidersthecostofcapitalandthecorrespondingrisksofvariouscapitaltypes.Basedonthechoiceofthemanagement,thegroupoptimizestheoverallcapitalstructurebyissuingadditionalsharesandborrowingorrepayingloans.SegmentreportTheGroupisprincipallyengagedintheproductionandsalesofwine,brandy,andchampagneinChina,France,Spain,ChileandAustralia.InaccordancewiththeGroup'sinternalorganizationstructure,managementrequirementsandinternalreportingsystem,theGroup'soperationisdividedintofourparts:China,Spain,France,ChileandAustralia.Themanagementperiodicallyevaluatessegmentresults,inordertoallocateresourcesandevaluateperformances.In2018,morethan87%revenueandmorethan99%profitderivedfromChina,andmorethan92%non-currentassetsarelocatedinChina.ThereforetheGroupdoesnotneedtodiscloseadditionalsegmentreportinformation.XIV.NOTESTOCOMPANYFINANCIALSTATEMENTS1.Cashandbank

31/12/201831/12/2017

RMBRMBCash3,1775,280Bankbalance579,993,055501,208,996Othercurrencyfund44,592,57757,960,190

________________________Total624,588,809559,174,466

________________________

________________________Asat31December2018,thebalanceofrestrictedcashoftheCompanyisRMB2,611,350(31December2017:RMB2,645,410),whichishomemaintenancefunds.Asat31December2018,othercurrencyfundoftheCompanyinclude:depositofRMB44,540,850forletterofcredit(31December2017:RMB57,946,190)anddepositofRMB51,727forentitycard(31December2017:RMB14,000).

XIV.NOTESTOCOMPANYFINANCIALSTATEMENTS-continued1.Cashandbank-continued

Asat31December2018,theCompany'stimedepositsincludetheshort-termdepositswithoriginalmaturityfromsixmonthstotwelvemonthsamountingtoRMB45,000,000(31December2017:RMB5,000,000)withinterestraterangingfrom1.55%to2.03%.2.Notesandaccountreceivable2.1Presentedbycategories

31/12/201831/12/2017

RMBRMBNotesreceivable39,885,25441,645,203Accountsreceivable1,447,9737,805,333

________________________Total41,333,22749,450,536

________________________

________________________2.2Notesreceivable(1)Categoriesofnotesreceivable

31/12/201831/12/2017

RMBRMBBankacceptances39,885,25441,645,203

________________________________________________

(2)Pledgednotesreceivable

Asof31December2018,therewasnopledgednotesreceivable(31December2017:Nil).(3)NotesendorsedbytheGrouptootherpartieswhicharenotyetdueattheendoftheperiod

31/12/201831/12/2017

RMBRMB

Bankacceptances94,755,12472,316,589

________________________________________________

Asat31December2018,notesendorsedbytheCompanytootherpartieswhicharenotyetdueat

theendoftheperiodisRMB94,755,124(31December2017:RMB72,316,589).Itisforthe

paymenttosuppliers.TheCompanybelievesthatduetobankgoodreputation,theriskof

maturitycannotbecashedisverylow,thereforeconfirmtheterminationoftheendorsementnotes

receivable.Ifbankisunabletosettlethenotesonmaturity,accordingtotherelevantlawsand

regulationsofChina,theGroupwouldundertakelimitedliabilityforthenotes.

XIV.NOTESTOCOMPANYFINANCIALSTATEMENTS-continued2.Notesandaccountsreceivable-continued2.2Notesreceivable-continued(4)Notesreceivablewerereclassifiedasaccountsreceivableduetothedefaultofdrawer

Asat31December2018,therewasnonotesreceivablewerereclassifiedasaccountsreceivableduetothedefaultofdrawer(31December2017:Nil).2.3Accountsreceivable(1)Disclosureofaccountsreceivablebycategories:

31/12/201831/12/2017BalanceBaddebtsprovisionsCarryingAmountBalanceBaddebtsprovisionsCarryingAmountAmountProportionAmountProportionAmountAmountProportionAmountProportionAmount

RMB(%)RMB(%)RMBRMB(%)RMB(%)RMBAccountsreceivable

forwhichbaddebtprovisionhasbeenassessedindividually1,447,973100.0--1,447,9737,805,333100.0--7,805,333

____________________________________________________________________________________________Thenormalcredittermoftradereceivablesisonemonth.Thetradereceivablesareinterestfree.Theaginganalysisisasfollows:

31/12/201831/12/2017

RMBRMBWithin1year1,447,9737,805,333

________________________________________________(2)Provision,reversalsandcollectionsduringthecurrentperiod:

Asat31December2018,therewasnoprovisionprovidedfortradereceivables(31December2017:Nil).TheCompanydidnotprovide,reverseorwriteoffanyprovisionduring2018(31December2017:Nil).(3)Thebalanceofaccountsreceivableattheendoftheyear

RelationshipProportionofwiththeGroupAmountAgingtotalreceivablesZhongyaPharmaceuticalOtherrelatedparties1,447,973Within1year100.0

____________________________

XIV.NOTESTOCOMPANYFINANCIALSTATEMENTS-continued3.Otherreceivables3.1Presentedbycategories

31/12/201831/12/2017

RMBRMBInterestreceivable254,08876,646Dividendreceivables500,000,000407,495,922Otherreceivables525,389,268592,274,075

________________________Total1,025,643,356999,846,643

________________________

________________________3.2Dividendreceivables

31/12/2017IncreaseDecrease31/12/2018RMB

RMBRMBRMBWithin1year

Including:SalesCompany402,595,884867,404,116(770,000,000)500,000,000

WinesSales-30,000,000(30,000,000)-LangfangCastel-785,986(785,986)-BeijingChateau-19,850,000(19,850,000)-ShiheziChateau4,900,03815,531,228(20,431,266)-NationalWines-20,000,000(20,000,000)-Langfangsales-1,981,410(1,981,410)-Atrio-2,080,191(2,080,191)-ChileIndomitaWineGroup-6,495,728(6,495,728)-

______________________________________

Total407,495,922964,128,659(871,624,581)500,000,000

____________________________________________________________________________

3.3Otherreceivables(1)Disclosureofotherreceivablesbycategories:

31/12/201831/12/2017BalanceBaddebtsprovisionsCarryingAmountBalanceBaddebtsprovisionsCarryingAmountAmountProportionAmountProportionAmountAmountProportionAmountProportionAmount

RMB(%)RMB(%)RMBRMB(%)RMB(%)RMBOtherreceivablesforwhichbaddebtprovisionhasbeenassessedindividually525,389,268100.0--525,389,268592,274,075100.0--592,274,075

__________________________________________________________________________________

XIV.NOTESTOCOMPANYFINANCIALSTATEMENTS-continued3.Otherreceivables-continued3.3Otherreceivables-continued(1)Disclosureofotherreceivablesbycategories:-continued

Theaginganalysisisasfollows:

31/12/201831/12/2017

BaddebtsCarryingBaddebtsCarryingBalanceprovisionamountBalanceprovisionamountAmountProportionAmountAmountAmountProportionAmountAmount

RMB%RMBRMBRMB%RMBRMBWithin1year491,483,88193.5-491,483,881589,011,10399.5-589,011,1031to2years33,897,0846.5-33,897,0843,006,4880.5-3,006,4882to3years8,303--8,30353,794--53,794Over3years----202,690--202,690

_____________________________________________________

525,389,268100.0-525,389,268592,274,075100.0-592,274,075

__________________________________________________________________________________________________________(2)Accrual,reversalandwritten-offduringthecurrentperiod

Nobaddebtaccruedorreversedin2018(2017:Nil.).(3)Otherreceivableswrittenoffcurrentyear

Nootherreceivableswrittenin2018(2017:Nil.).(4)Disclosureofotherreceivablesbynature

31/12/201831/12/2017

RMBRMB

Receivablefromsubsidiary523,579,831589,897,407

Receivabledeposit12,5002,500

Others1,796,9372,374,168

________________________

525,389,268592,274,075________________________________________________(5)Topfiveentitieswiththelargestbalancesofotherreceivables

Asat31December2018,theparticularsoftopfiveotherreceivablesareasfollows:

ProportionoftotalNatureAmountAgingprepayments

RMB%SalesCompanyInternalbalance369,060,579Within1year70.2R&DCentreInternalbalance120,589,826Within1year23.0YantaiCastelChateauInternalbalance12,404,563Within1year2.4PioneerInternationalInternalbalance10,704,391Within1year2.0NingxiaChateauInternalbalance7,085,540Within1year1.3

____________

519,844,89998.9

________________________

XIV.NOTESTOCOMPANYFINANCIALSTATEMENTS-continued4.Inventories

31/12/201831/12/2017

NetcarryingNetcarryingBalanceProvisionamountBalanceProvisionamount

RMBRMBRMBRMBRMBRMBRawmaterial1,200,528-1,200,5281,841,216-1,841,216Workinprogress358,230,774-358,230,774307,104,357-307,104,357Finishedgoods25,723,438-25,723,43839,096,480-39,096,480

__________________________________________________

385,154,740-385,154,740348,042,053-348,042,053

____________________________________________________________________________________________________5.Long-termequityinvestments

2018Cost31/12/2017fortheyear31/12/2018ShareholdingVotingpowerfortheyear

RMBRMBRMBRMB%%RMBCostMethod

XinjiangTianzhu(a)60,000,00060,000,000-60,000,00060100-KylinPackaging23,176,06323,176,063-23,176,063100100-ChangyuChateau(a)28,968,10028,968,100-28,968,10070100-ChangyuChateau(a)3,500,0003,500,000-3,500,00070100-NingxiaGrowing36,573,24736,573,247-36,573,247100100-NationalWines2,000,0002,000,000-2,000,00010010020,000,000IceChateau(a)30,440,50030,440,500-30,440,50051100-BeijingChateau(a)579,910,000579,910,000-579,910,0009010019,850,000SalesCompany7,200,0007,200,000-7,200,000100100867,404,116LangfangSales(b)100,000100,000-100,000101001,981,410LangfangCastel(a)19,835,73019,835,730-19,835,73039100785,986WineSales4,500,0004,500,000-4,500,00010010030,000,000ShanghaiSales(b)300,000300,000-300,00030100-BeijingSales850,000850,000-850,000100100-JingyangSales(b)100,000100,000-100,00010100-JingyangWine(b)900,000900,000-900,00090100-NingxiaWine222,309,388222,309,388-222,309,388100100-NingxiaChateau443,463,500443,463,50010,000,000453,463,500100100-DingluoteChateau(b)212,039,586212,039,586-212,039,58665100-ShiheziChateau809,019,770809,019,7703,000,000812,019,77010010015,531,228ChanganChateau803,892,258803,892,258-803,892,258100100-R&DCentre(a)500,000,000500,000,0002,788,906,4453,288,906,44572100-HuanrenWine21,700,00021,700,000500,00022,200,000100100-GrapeWineSalesCo.,5,000,000----100-FrancsChamps236,025,404236,025,404-236,025,404100100-Atrio190,150,544190,150,544-190,150,54475752,080,191IWCC274,248,114274,248,114-274,248,11485856,495,728AustraliaKilikanoon

Estate--107,194,420107,194,4208080-

___________________________________

4,516,202,2044,511,202,2042,909,600,8657,420,803,069964,128,659

______________________________________________________________________(a)TheCompanyhas100%votingpowerofthosesubsidiariesbythewayofindirect

controlling,referringtoNoteVIII-1.(b)TheCompanyhas100%votingpowerofthesesubsidiariesbythewayofindirect

controllingthroughwhollyownedsubsidiaries.During2018,therewasnosignificantrestrictionontheremittanceoffundfromtheinvesteestotheCompany.

XIV.NOTESTOCOMPANYFINANCIALSTATEMENTS-continued6.Fixedassets

(1)Fixedassets

BuildingsMachineryMotorvehiclesTotal

RMBRMBRMBRMBTotaloriginalcarryingamount31/12/2017265,340,049475,569,63410,129,313751,038,996IncreasePurchase-9,345,433-9,345,433CIPtransfer8,887,802139,665-9,027,467DecreaseDisposal-(13,137,771)(3,479,487)(16,617,258)TransfertoInvestment

property(VI-8)(32,606,762)--(32,606,762)

____________________________________

31/12/2018241,621,089471,916,9616,649,826720,187,876

____________________________________

Totalaccumulateddepreciation31/12/2017111,607,494346,413,5324,867,069462,888,095IncreaseAdditions7,784,79415,133,656531,63923,450,089DecreaseDisposal(227,951)(12,642,520)(946,751)(13,817,222)TransfertoInvestment

property(VI-8)(17,644,360)--(17,644,360)

____________________________________

31/12/2018101,519,977348,904,6684,451,957454,876,602

____________________________________

Totalnetcarryingamount31/12/2018140,101,112123,012,2932,197,869265,311,274

________________________________________________________________________

31/12/2017153,732,555129,156,1025,262,244288,150,901

________________________________________________________________________Asat31December2018,fixedassetswithrestrictedownershipisRMB34,246,887(December31,2017:RMB36,349,289),referringtoNoteVI-45fordetails.Asat31December2018,theCompanyhasnofixedassetsclassifiedasheldforsale(31December2017:RMB2,000,197),andtheCompanyhasnotemporaryidlefixedassetsandfixedassetsunderfinanceleases.(2)Fixedassetsthroughoperatinglease

Amount

RMB

Machinery134,111

________________

XIV.NOTESTOCOMPANYFINANCIALSTATEMENTS-continued6.Fixedassets-continued(3)Fixedassetsofwhichcertificatesoftitlehavenotbeenobtained

Asat31December2018,buildingswithoutpropertycertificateareasfollows：

ReasonswhycertificatesoftitlehaveAmountnotbeenobtained

RMBFermentationcentreoffice,

experimentbuildingandworkshop3,653,494Processing

____________________7.Constructioninprogress

(1)Constructioninprogress

31/12/201831/12/2017

RMBRMBReconstructionofboilerheatingsystems-3,556,349Drainageproject-3,200,000Non-drystickerlabelingmachineproject4,105,264-Others2,206,437-

________________________

6,311,7016,756,349________________________________________________(2)Currentyearmovementonimportantconstruction:

Budget	31/12/2017	Addition	TransfertoPPE	31/12/2018	Accumulatedexpenditure/budget	Theprogressofconstruction	Financedby
RMB	RMB	RMB	RMB	RMB	%

Reconstructionofboilerheatingsystems	13,000,000	3,556,349	-	(3,556,349)	-	100.0	100.0	Self-raised
Non-drystickerlabelingmachineproject	6,920,000	-	5,431,516	(1,326,252)	4,105,264	78.5	78.5	Self-raised

Therewasnointerestcapitalizedinconstructioninprogressin2018.(3)Asat31December2018,therewasnoprovisionwasmadefortheconstructioninprocess,andno

provisionwasmade(31December2017:Nil).

XIV.NOTESTOCOMPANYFINANCIALSTATEMENTS-continued8Bearerbiologicalassets

Bearerbiologicalassetsaregrapetrees，whichmeasuredincostmethod.

ImmatureMaturebiologicalassetsbiologicalassetsTotal

RMBRMBRMBTotaloriginalcarryingamount31/12/20176,306,963130,929,124137,236,087IncreaseCultivatedincrease12,930,423-12,930,423Transfertomatureassets

fromimmatureassets(9,802,191)9,802,191-

_______________________________31/12/20189,435,195140,731,315150,166,510

_______________________________Totalaccumulateddepreciation31/12/2017-17,663,54817,663,548IncreaseAdditions-7,500,1697,500,169

_______________________________31/12/2018-25,163,71725,163,717

_______________________________Totalnetcarryingamount31/12/20189,435,195115,567,598125,002,793

______________________________________________________________31/12/20176,306,963113,265,576119,572,539

______________________________________________________________Asat31December2018,thereisnobiologicalassetwithownershiprestricted(31December2017:Nil).Asat31December2018,thereisnoindicationthatbiologicalassetsmaybeimpaired,andnoprovisionwasmade.(31December2017:Nil).

XIV.NOTESTOCOMPANYFINANCIALSTATEMENTS-continued9.Intangibleassets

Intangibleassets

Landuseright

RMBTotaloriginalcarryingamount31/12/2017and31/12/201896,594,766

__________Totalaccumulateddepreciation31/12/201726,971,547IncreaseAdditions2,379,153

__________31/12/201829,350,700

__________Totalnetcarryingamount31/12/201867,244,066

__________

__________31/12/201769,623,219

____________________Asat31December2018,IntangibleassetswithrestrictedownershipareRMB50,902,950(December31,2017:RMB52,720,912),PleaserefertoNoteVI-45indetail.10.Deferredtaxassets

Recogniseddeferredtaxassetsnotpresentedatthenetamountafteroffset

Item	31/12/2018		31/12/2017
	DeductibletemporarydifferenceRMB	DeferredtaxassetsRMB	DeductibletemporarydifferenceRMB	DeferredtaxassetsRMB

Unrealizedprofitfromintra-companytransactions	5,897,436	1,474,359	7,163,828	1,790,957
Unpaidbonus	37,973,000	9,493,249	35,822,735	8,955,683
Retirementbenefit	10,143,950	2,535,988	10,057,113	2,514,278
Deductiblelosses	30,421,511	7,605,378	45,526,327	11,381,582
Deferredincome	12,343,972	3,085,993	16,581,627	4,145,407
	96,779,869	24,194,967	115,151,630	28,787,907

11.Othernon-currentassets

31/12/201831/12/2017

RMBRMBReceivablesfromsubsidiaries972,700,0003,718,674,166

________________________________________________

XIV.NOTESTOCOMPANYFINANCIALSTATEMENTS-continued12.Short-termborrowings

31/12/201831/12/2017

RMBRMBCreditloans150,000,000600,000,000

________________________________________________Asat31December2018,creditloansdetailareasfollows:

LoanbankLoansamountLoantermInterestrateincontractInterestrat

RMB%%ICBCYantaibranch150,000,00024May2018–24May2019Annualbenchmarkrate4.35

__________________

13.Notesandaccountspayable

Theaginganalysisofaccountspayableareasfollows

31/12/201831/12/2017

RMBRMBWithin1year132,664,19597,036,1461to2years-556,8832to3years395240,095Over3years39,714-

________________________

132,704,30497,833,124________________________________________________14.Employeebenefitspayable

(1)Employeebenefitspayable

31/12/2017IncreaseDecrease31/12/2018

RMBRMBRMBRMBShort-termsalariesandwelfare60,050,96397,491,895(95,341,628)62,201,230Post-demissionbenefits

-predeterminedprovisionplan-6,785,401(6,785,401)-Terminationbenefit10,057,1135,216,248(5,129,412)10,143,949

____________________________________

70,108,076109,493,544(107,256,441)72,345,179

________________________________________________________________________

XIV.NOTESTOCOMPANYFINANCIALSTATEMENTS-continued14.Employeebenefitspayable-continued(2)Short-termsalariesandwelfare

31/12/2017IncreaseDecrease31/12/2018

RMBRMBRMBRMBSalariesandbonus60,694,62083,892,951(81,609,810)62,977,761Staffbenefit37,1736,191,811(6,191,811)37,173Staffwelfare-4,004,223(4,004,223)-Includes:

Medicalinsurance-3,476,931(3,476,931)-Injuryinsurance-289,904(289,904)-Maternityinsurance-237,388(237,388)-Housingfund-3,005,993(3,005,993)-Unionfeeandeducationfee1,896,872529,790(529,791)1,896,871

____________________________________

Total62,628,66597,624,768(95,341,628)64,911,805

____________________________________

Less:Non-currentliabilities2,577,7022,710,575

__________________

Short-termsalariesandwelfare60,050,96362,201,230

____________________________________(3)Predeterminedprovisionplan

31/12/2017IncreaseDecrease31/12/2018

RMBRMBRMBRMBPension-6,534,445(6,534,445)-Unemploymentinsurance-250,956(250,956)-

____________________________

-6,785,401(6,785,401)-

________________________________________________________TheCompanyparticipatesinpensioninsuranceandunemploymentinsuranceplansestablishedbygovernmentinstitution.Accordingtothoseplans,theCompanypayspensionandunemploymentinsuranceeachmonthonthebasisof18%and0.7%lastperiodsalaryrespectively.Apartfromthesemonthlyexpenses,theCompanydoesnotbearanyfurtherpaymentobligation.ThisyeartheCompanyshouldpayRMB6,534,445andRMB250,956(2017:RMB8,595,215andRMB323,852)respectivelyintopensioninsuranceandunemploymentinsurance.Asat31December2018,theCompanydoesnothaveunpaidpensionandunemploymentinsurance(31December2017:Nil)whichisduetothepensioninsuranceandunemploymentinsuranceplanandnotpaidattheendofthereportingperiod.

XIV.NOTESTOCOMPANYFINANCIALSTATEMENTS-continued15.Taxespayable

31/12/201831/12/2017

RMBRMBValueaddedtax1,686,599-Consumptiontax3,902,7916,450,962Corporationincometax-26,069Urbanlandusetax685,626784,627Individualincometax6,316,0016,630,393Cityconstructiontax36,314345,138Propertytax243,81482,669Others240,286249,832

________________________

13,111,43114,569,690________________________________________________16.Otherpayables16.1Presentedbycategories

31/12/201831/12/2017

RMBRMBInterestpayable181,250652,500Otherpayables607,793,269544,713,172

________________________

607,974,519545,365,672________________________________________________16.2Otherpayables(1)Naturesofotherpayablesareasfollows

31/12/201831/12/2017

RMBRMBPayabletosubsidiaries585,044,038534,530,323Payablesforequipmentandconstruction10,554,4518,538,687Depositsfromsuppliers5,982,500183,000Others6,212,2801,461,162

________________________

607,793,269544,713,172________________________________________________(2)Asat31December2018,therewerenosignificantoutstandingbalanceagedoverthanoneyear.

XIV.NOTESTOCOMPANYFINANCIALSTATEMENTS-continued17.Capitalreserve

201831/12/2017IncreaseDecrease31/12/2018

RMBRMBRMBRMBSharepremium557,222,454--557,222,454

____________________________________________________________________18.Operatingincomeandcosts

Operatingincomeisanalysedasfollows:

20182017RMBRMBPrincipaloperatingincome874,292,0881,310,443,414Otheroperatingincome2,154,982813,440

________________________

876,447,0701,311,256,854________________________________________________Operatingcostisanalysedasfollows:

20182017RMBRMBPrincipaloperatingcost772,497,7691,165,362,798Otheroperatingcost1,989,262590,610

________________________

774,487,0311,165,953,408________________________________________________19.Taxesandsurcharges

20182017RMBRMBConsumptiontax27,262,20953,236,697Cityconstructiontax3,214,54310,190,867Educationfeeandsurcharges2,159,6125,817,116Propertytax1,854,4862,267,901Landusetax3,168,5593,168,559Stamptax310,835603,461Others376,5171,285,624

________________________

38,346,76176,570,225________________________________________________

XIV.NOTESTOCOMPANYFINANCIALSTATEMENTS-continued20.Generalandadministrativeexpense

20182017RMBRMBSalaryandemployeebenefit55,580,88838,430,904Maintenancefee8,396,4326,192,525Officefee3,641,2103,881,091Servicefee3,495,3289,194,005Depreciation3,375,1804,286,164Propertyinsurancefees2,961,7423,080,521Leasingexpenses2,790,3582,276,896Amortization2,379,1532,695,110Shuttlebus1,442,3401,719,660Securityandsanitationfee763,792941,434Travellingexpenses324,566527,464Greeningfeeamortization312,080394,604Others5,042,1395,498,757

________________________

90,505,20879,119,135________________________________________________21.FinancialExpense

20182017RMBRMBInterestincome(41,821,372)(18,602,199)Exchangeloss4,443,1751,040,832Interestexpenses16,075,35317,414,181Bankcharges1,010,107784,754

________________________

(20,292,737)637,568

________________________________________________22.Investmentincome

20182017RMBRMBLong-termequityinvestmentincomeaccounted

forbyusingthecostmethod964,128,659798,877,905

________________________________________________

XIV.NOTESTOCOMPANYFINANCIALSTATEMENTS-continued22.Investmentincome-continued

Amongthelong-termequityinvestmentincomeaccountedforbyusingcostmethod,theinvesteeswithinvestmentincomeaccountingformorethan5%oftheCompany'stotalprofitbeforetaxareasfollows:

Investees20182017

RMBRMBSalesCompany867,404,116577,813,022BeijingChateau-87,000,000WineSales-53,461,029XinjiangTianzhu-48,620,373

________________________

867,404,116766,894,424________________________________________________Asat31December2018andat31December2017,therearenosignificantrestrictionontheremittanceofinvestmentincometotheCompany.23.Supplementtocashflowstatement

20182017RMBRMB(1)Cashflowsfromoperatingactivitiescalculatedby

adjustingthenetprofit:

Netprofit969,588,573793,598,010Add:Depreciationofinvestmentproperties1,857,902590,610

Depreciationoffixedassets23,450,08932,201,177Amortizationofintangibleassets2,379,1532,379,153Depreciationofbiologicalassets7,500,1696,781,447(Gains)Lossesondisposalofassets(12,411,962)29,625Financeexpenses17,808,56918,614,396Investmentincome(964,128,659)(798,877,905)Decrease/(increase)indeferredtaxassets4,592,940(1,802,655)Increase/(decrease)ininventories(37,112,687)444,690,365Decreaseintradereceivables37,072,169103,406,898Increase/(decrease)intradepayables92,609,575(3,541,352)

________________________Netcashflowsfromoperatingactivities143,205,831598,069,769

________________________________________________

XIV.NOTESTOCOMPANYFINANCIALSTATEMENTS-continued23.Supplementtocashflowstatement-continued(2)Significantinvestingandfinancingactivitiesnotinvolvingcashreceiptsandpayments

20182017RMBRMBChangetheclaimonsubsidiariesintoLong-term

equityinvestments2,802,406,4452,386,907,749Increasetheinvestmentinsubsidiaries

withbankacceptances-96,345,678Recovertheinvestmentinsubsidiaries

withbankacceptances-(96,345,678)

________________________2,802,406,4452,386,907,749________________________________________________24.Cashandcashequivalents

20182017RMBRMBClosingbalanceofCashandbank624,588,809559,174,466Less:

Restrictedbankdeposits2,611,3502,645,410Restrictedothermonetaryassets44,592,57757,960,190Depositwithaperiodofoverthreemonths45,000,0005,000,000

________________________Closingbalanceofcashandcashequivalents532,384,882493,568,866

________________________________________________

20182017RMBRMBCashandbank532,384,882493,568,866Including:Cashandbank3,1775,280

Bankdepositsondemand532,381,705493,563,586

________________________Closingbalanceofcashandcashequivalents532,384,882493,568,866

________________________

________________________

XIV.NOTESTOCOMPANYFINANCIALSTATEMENTS-continued25.Relatedpartytransactions

(1)Purchaseofmaterials

20182017RMBRMBSubsidiaries209,808,816352,495,622Otherrelatedparties88,897,12682,394,392

________________________

298,705,942434,890,014________________________________________________

(2)Salesofgoods

20182017RMBRMBSubsidiaries867,995,9601,302,056,254Otherrelatedparties8,451,1109,200,600

________________________

876,447,0701,311,256,854________________________________________________

(3)SalesofFixedassets

20182017RMBRMBSubsidiaries134,44547,843,203Otherrelatedparties-3,934,643

________________________

134,44551,777,846________________________________________________(4)Interestincomefromoccupationoffunds

20182017RMBRMBSubsidiaries35,823,55614,912,649

________________________________________________

(5)Leaseincome

20182017RMBRMBSubsidiaries1,997,164739,491

________________________________________________

XIV.NOTESTOCOMPANYFINANCIALSTATEMENTS-continued25.Relatedpartytransactions-continued

(6)Guarantees

WhetherguaranteesareGuaranteedpartyCurrencyAmountBeginningdateDuedatefulfilledcompletelyR&DCenterRMB500,000,0008March20178March2022NoAustralianKilikanoon

EstateAUD17,000,00013December201813December2023No

26.Receivablesandpayablestorelatedparties

(1)Tradereceivables

Tradereceivables31/12/201831/12/2017

BaddebtsBaddebtsBalanceprovisionBalanceprovision

RMBRMBRMBRMBOtherrelatedparties1,447,973-7,805,333-

____________________________________________________________________Otherreceivables31/12/201831/12/2017

BaddebtsBaddebtsBalanceprovisionBalanceprovision

RMBRMBRMBRMBSubsidiaries523,579,831-589,897,407-Otherrelatedparties813,440-813,440-

__________________________________524,393,271-590,710,847-____________________________________________________________________Othernon-currentassets31/12/201831/12/2017

BaddebtsBaddebtsBalanceprovisionBalanceprovision

RMBRMBRMBRMBSubsidiaries972,700,000-3,718,674,166-

____________________________________________________________________Theabovereceivablesduefromrelatedpartiesareunsecured,havenointerestorfixeddateofrepayment.

XIV.NOTESTOCOMPANYFINANCIALSTATEMENTS-continued26.Receivablesandpayablestorelatedparties-continued

(2)Tradepayables

Tradepayables31/12/201831/12/2017

RMBRMBOtherrelatedparties28,892,58329,145,914

________________________________________________Otherpayables31/12/201831/12/2017

RMBRMBSubsidiaries585,044,038534,530,323Otherrelatedparties450,000-

________________________

585,494,038534,530,323________________________________________________Theabovepayablesduetorelatedpartiesareunsecured,havenointerestorfixeddateofrepayment.

APPENDIXISUPPLEMENTARYINFORMATIONTOFINANCIALSTATEMENTSYEARENDED31DECEMBER2018I.DETAILSOFEXTRAORDINARYPROFITANDLOSS

2018RMBCorporateincometaxeffect11,368,355Governmentgrantscreditedinprofitandloss

(exceptforthoserecurringgovernmentgrantsthatarecloselyrelatedtotheGroup'soperationandhaveproperbasisofcalculation)87,281,434Othernon-operatingincomeandexpense3,817,401Corporateincometaxeffect(25,157,188)Theimpactofnon-controllinginterests'equity(103,311)

__________

77,206,691____________________TheCompany'sextraordinaryprofitandlossitemsarerecognizedinaccordancewiththeregulationsofthe"publicofferingofsecuritiesoftheCompanyDisclosureExplanatoryNoticeNo.1-non-recurringprofitandlosses"(SFC[2008]No.43).II.RETRUNONEQUITY("ROE")ANDEARNINGSPRESHARE("EPS")

TheCompany'sROEandEPSarecalculatedinaccordancewiththeCSRCregulationsofthe"InformationPreparingandDisclosureRulesofPublicCompanyNo.9-calculationanddisclosureofROEandEPS"(Revised2010).

Weightedaverage2018ROEBasicEPS

%RMBNetprofitattributabletoshareholdersoftheCompany11.231.52Netprofitattributabletoshareholders

oftheCompanydeductingextraordinaryprofitandloss10.401.41

__________________TheCompanydidnothaveanypotentialdilutiveshares.

Weightedaverage2017ROEBasicEPS

%RMBNetprofitattributabletoshareholdersoftheCompany12.141.51Netprofitattributabletoshareholders

oftheCompanydeductingextraordinaryprofitandloss11.601.44

__________________TheCompanydidnothaveanypotentialdilutiveshares.

XII.ReferenceDocuments

(1)TheoriginalofAnnualReportautographedbythechairman.(2)TheFinancialStatementsautographedandsignedbythechairman,chiefaccountantandaccountantsincharge.(3)TheProspectusandPublicOfferingAnnouncementforStockBin1997;TheProspectusandTheShares’Change&PublicOfferingAnnouncementforStockAin2000.(4)TheoriginalsofalldocumentsandannouncementsthattheCompanymadepublicduringthereportperiodinthenewspapersdesignatedbyChinaSecuritiesRegulatoryCommission.

YantaiChangyuPioneerWineCo.Ltd.

BoardofDirectors

April20

th

,2019