Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
2019 Annual Report
April 2020
Section I Important Statements, Contents and DefinitionsThe board of directors, board of supervisors, directors, supervisors and senior management of JiangsuYanghe Brewery Joint-Stock Co., Ltd. (hereinafter referred to as the Company) hereby guarantee thatthe information presented in this report is free of any false records, misleading statements or materialomissions, and shall individually and together be legally liable for truthfulness, accuracy andcompleteness of its contents.
Mr. Wang Yao, responsible person for the Company, Mr. Cong Xuenian, responsible person foraccounting affairs and Mr. Yin Qiuming, responsible person for accounting department (accountingsupervisor) have warranted that the financial statements in this report are true and complete.
All directors attended the board meeting to review this report.
The future plans and some other forward-looking statements mentioned in this report shall not beconsidered as virtual promises of the Company to investors. Investors and people concerned shouldmaintain adequate risk awareness and understand the difference between plans, predictions andpromises. Investors are kindly reminded to pay attention to possible investment risks.
In the annual report, the possible risks in the operation of the Company are described in detail (see 9.Outlook for the future development of the Company in Section IV Performance Discussion andAnalysis). Investors are kindly reminded to pay attention to relevant content.
The profit distribution plan approved by the board of directors: based on share capital participating inthe dividend on the registration date when the profit distribution plan is implemented in the future, acash dividend of CNY 30.00 (tax inclusive) will be distributed for every 10 existing shares held, 0 sharesof bonus shares (tax inclusive), and reserves would not be converted into share capital.
The Company’s Chinese 2019 Annual Report was publicly disclosed on the Shenzhen Stock Exchangeand www.cninfo.com.cn on 29 April 2020. If there are any differences between the English version andthe Chinese one, please refer to the latter.
Contents
Section I Important Statements, Contents and Definitions ...... 2
Section II Company Profile and Key Financial Results ...... 5
Section III Business Profile ...... 9
Section IV Performance Discussion and Analysis ...... 12
Section V Significant Events ...... 27Section VI Changes in Shares and Information about Shareholders ..... 64Section VII Information about Preference Shares ...... 71
Section VIII Information about Convertible Bonds ...... 72Section IX Profiles of Directors, Supervisory, Senior Management andEmployees ...... 73
Section X Corporate Governance ...... 83
Section XI Information about Corporate Bond ...... 91
Section XII Financial Report ...... 92
Section XIII Documents Available for Preference ...... 216
Definitions
Term | Reference | Definition |
The Company, This Company, Yanghe Joint-Stock | Refer to | Jiangsu Yanghe Brewery Joint-Stock Co., Ltd. |
Yanghe Group, Controlling shareholder | Refer to | Jiangsu Yanghe Group Co.,Ltd. |
The current year, In the reporting period | Refer to | 1 Jan. 2019 to 31 Dec. 2019 |
The report | Refer to | 2019 Annual Report |
Yuan, Ten thousand yuan, A hundred million yuan | Refer to | CNY 0.00, CNY 10,000.00,CNY 100,000,000.00 |
The shareholders' meeting, the board of directors, the board of supervisors | Refer to | The shareholders' general meeting, the board of directors and the board of supervisors of the Company |
Articles of incorporation | Refer to | Articles of incorporation of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd. |
SSE | Refer to | Shenzhen Stock Exchange |
SRC,CSRC | Refer to | China Securities Regulatory Commission |
SASAC of Suqian | Refer to | State-owned Assets Supervision and Administration Commission of Suqian |
Suya Jincheng, Accounting firm | Refer to | Suya Jincheng CPA LLP |
Blue Alliance | Refer to | Jiangsu Blue Alliance Joint-Stock Co., Ltd. |
Yanghe Branch of the Company | Refer to | Jiangsu Yanghe Brewery Joint-Stock Co., Ltd. Yanghe Branch |
Siyang Branch of the Company | Refer to | Jiangsu Yanghe Brewery Joint-Stock Co., Ltd. Siyang Branch |
Shuanggou Distillery | Refer to | Jiangsu Shuanggou Distillery Stock Co.,Ltd. |
Guijiu Company | Refer to | Guizhou Guijiu Co., Ltd. |
Lihuacun Distillery | Refer to | Hubei Lihuacun Distillery Co., Ltd. |
Section II Company Profile and Key Financial Results
1. Corporate information
Stock abbreviation | Yanghe Joint-Stock | Stock code | 002304 |
Stock exchange where the shares of the Company are listed | Shenzhen Stock Exchange | ||
Name of the Company in Chinese | 江苏洋河酒厂股份有限公司 | ||
Abbr. of the Company name in Chinese | 洋河股份 | ||
Name of the Company in English (if any) | Jiangsu Yanghe Brewery Joint-Stock Co., Ltd. | ||
Abbr. of the Company name in English (if any) | Yanghe | ||
Legal representative | Wang Yao | ||
Registered address | No.118 Middle Avenue, Yanghe Town, Suqian City, Jiangsu Province, China | ||
Postal code of registered address | 223800 | ||
Business address | No.118 Middle Avenue, Yanghe Town, Suqian City, Jiangsu Province, China | ||
Postal code of business address | 223800 | ||
Company website | http://www.chinayanghe.com | ||
yanghe002304@vip.163.com |
2. Contact us
Company secretary | Representative for securities affairs | |
Name | Cong Xuenian | Lu Hongzhen, Sun Dali |
Address | No. 18, Feng Hui Avenue, Yuhua Economic Development Zone, Nanjing | |
Tel. | 025-52489218 | |
Fax | 025-52489218 | |
yanghe002304@vip.163.com |
3. Information disclosure and place where the annual report is kept
Newspaper designated by the Company for information disclosure | Securities Times, Shanghai Securities Times, China Securities Journal, Securities Daily |
Website designated by CSRC for the publication of the Annual Report | http://www. cninfo.com.cn |
Place where the Annual Report of the Company is kept | Shareholder reading room, the headquarters of the Company, Suqian City, Jiangsu Province |
4. Company registration and alteration
Organization code | 9132000074557990XP |
Changes in main business activities since the Company was listed (if any) | None |
Changes of controlling shareholders of the Company (if any) | None |
5. Other relevant information
Accounting firm engaged by the Company
Name of the accounting firm | Suya Jincheng CPA LLP |
Business address of the accounting firm | 22-23/F., Central International Plaza, No.105-6 North Zhongshan Road, Nanjing. |
Name of accountants for writing signature | Kan Baoyong, Li Yan |
Sponsors engaged by the Company to continuously perform its supervisory function during thereporting period? Applicable √ N/A?
Financial adviser engaged by the Company to continuously perform its supervisory function during thereporting period? Applicable √ N/A?
6. Key accounting data and financial indicators
Whether the Company performed a retroactive adjustment or restatement of accounting data? Yes √ No
2019 | 2018 | YoY Change | 2017 | |
Operating revenues (CNY) | 23,126,476,885.07 | 24,159,801,994.68 | -4.28% | 19,917,942,238.16 |
Net profits attributable to shareholders of the Company (CNY) | 7,382,822,726.87 | 8,115,189,794.69 | -9.02% | 6,627,169,959.16 |
Net profits attributable to shareholders of the Company before non-recurring gains and losses (CNY) | 6,555,890,029.81 | 7,369,331,605.77 | -11.04% | 6,136,386,923.71 |
Net cash flows from operating activities (CNY) | 6,797,891,871.41 | 9,056,748,816.28 | -24.94% | 6,883,169,799.31 |
Basic earnings per share (CNY/share) | 4.8991 | 5.3850 | -9.02% | 4.3976 |
Diluted earnings per share (CNY/share) | 4.8991 | 5.3850 | -9.02% | 4.3976 |
Weighted average ROE | 21.21% | 25.95% | -4.74% | 24.08% |
At the end of 2019 | At the end of 2018 | YoY Change | At the end of 2017 | |
Total assets (CNY) | 53,455,037,840.98 | 49,563,767,816.22 | 7.85% | 43,258,140,702.38 |
Net assets attributable to shareholders of the Company (CNY) | 36,508,835,491.47 | 33,644,530,266.23 | 8.51% | 29,515,040,285.72 |
7. Differences in accounting data under domestic and overseas
accounting standards
7.1. Differences in the net profits and net assets disclosed in the financial reportsprepared under the international and China accounting standards? Applicable √ N/A?No such differences during this period.
7.2. Differences in the net profits and net assets disclosed in the financial reportsprepared under the outbound and China accounting standards? Applicable √ N/A?No such differences during this period.
8. Key financial results by quarter
Unit: CNY
Q1 | Q2 | Q3 | Q4 | |
Operating revenues | 10,889,633,584.07 | 5,108,949,278.67 | 5,099,149,429.96 | 2,028,744,592.37 |
Net profits attributable to shareholders of the Company | 4,020,764,957.82 | 1,560,940,705.86 | 1,564,626,614.67 | 236,490,448.52 |
Net profits attributable to shareholders of the Company before non-recurring gains and losses | 3,809,771,428.82 | 1,399,214,559.41 | 1,338,015,326.52 | 8,888,715.06 |
Net cash flows from operating activities | 122,965,637.48 | -633,029,399.83 | 2,229,448,446.04 | 5,078,507,187.72 |
Whether there are any material differences between the financial indicators above or their summationsand those which have been disclosed in quarterly or semi-annual reports.? Yes √ No
9. Non-recurring profits and losses
√ Applicable ? N/A
Unit: CNY
Item | 2019 | 2018 | 2017 | Note |
Profit or loss from disposal of non-current assets (including the write-off portion of the impairment provision) | 13,797,266.00 | 22,203,572.96 | -8,598,844.11 | |
Government grants recorded in the profit or loss for the current period (except for the government grants closely related to the business of the Company and given at a fixed amount or quantity in accordance with the State's uniform standards) | 85,605,383.19 | 59,870,221.67 | 44,745,640.94 |
Item | 2019 | 2018 | 2017 | Note |
Except for effectively hedging business related to normal business operations of the Company, profit or loss arising from the changes in the fair value of financial assets held for trading, derivative financial assets, financial liabilities held for trading, derivative financial liabilities, and investment income from disposal of financial assets held for trading, derivative financial assets, financial liabilities held for trading, derivative financial liabilities and investment in other debt instruments. | 973,456,912.43 | 56,995,537.28 | 90,627,738.02 | |
Impairment provision reversal of the accounts receivables and contract assets on which the impairment test is carried out individually | 300,000.00 | |||
Other non-operating income and expenditure except above-mentioned items | 12,845,147.02 | 27,967,026.98 | 11,559,390.23 | |
Other profit and loss items that conform to the definition of non-recurring gains and losses | 1,670,388.78 | 827,837,138.81 | 516,824,879.08 | |
Less: Corporate income tax | 260,122,467.95 | 248,875,376.58 | 164,658,711.09 | |
Minority interests (after tax) | 319,932.41 | 139,932.20 | 17,057.62 | |
Total | 826,932,697.06 | 745,858,188.92 | 490,783,035.45 | -- |
Explain the reasons if the Company classifies an item as a non-recurring profit and loss according tothe definition in the Explanatory Announcement No. 1 on Information Disclosure for Companies OfferingTheir Securities to the Public-Non-Recurring Profits and Losses, or classifies any non-recurring profit orloss item mentioned in the explanatory announcement as a recurring profit or loss item.? Applicable √ N/A?No such cases for the reporting period.
Section III Business Profile
1. Main business scope in the reporting periodThe Company is mainly engaged in the production and sales of liquor. The production of liquor adoptssolid-state fermentation. The sales of liquor mainly adopt two modes, namely distribution and retailing.During the reporting period, the Company's primary business and business mode had not changed.According to the Guidelines for the Industry Classification of Listed Companies (2012 Revision) issuedby CSRC, the Company belongs to C15 Manufacturing industry of liquor, beverages and refined tea.
The Company is a national large-scale liquor production enterprise. Among the enterprises in the liquorindustry, the Company is the only one which has two famous Chinese liquor, namely Yanghe andShuanggou, two Chinese time-honored brands, and six Chinese well-known trademarks. The leadingproducts of the Company are a series of mellow liquor including Dream Blue, Yanghe Blue Classic,Shuanggou Zhenbaofang, Yanghe Daqu, Shuanggou Daqu. They have high brand awareness andreputation throughout the country.
During the reporting period, the development of liquor industry kept growing in the fierce competition.High-end and secondary high-end Liquor both showed obvious development advantages. Theconcentration, branding and premiumisation of the industry continued significantly. According todisclosed liquor industry periodic reports, the Company's operating revenue and profit remained in thethird place in the liquor industry.
2. Significant changes in the main assets
2.1 .Significant changes in the main assets
Main assets | Reasons for any significant change |
Construction in progress | An increase of 70.29% YoY was mainly due to input of 40,000 tons of pottery jar warehouse construction during this period. |
Other non-current financial assets | An increase of 61.67% YoY was mainly due to the increase of purchased trust financial products due over one year during this period. |
2.2 .Main assets overseas
? Applicable √ N/A
3. Analysis of core competitiveness
The Company has obvious advantages in natural environment, quality technology, brand building,marketing network and so on. The Company has formed its unique core competitiveness, which has notchanged during the reporting period.
3.1 Natural environment advantage
The Company is located in Suqian, the capital of liquor with 'three rivers, two lakes and one wetland’.As one of the three famous wetlands in the world, Suqian enjoys equal popularity with the Scotchwhisky producing area and the French Cognac producing area. It is the only natural oxygen bar inJiangsu province without acid rain. The long history and unique ecological environment provide a goodsource of water, soil and air for production of liquor and spirits. Especially the microorganism conditionis significantly beneficial to producing liquor and spirits. The Yanghe brewing originated in the Sui andTang Dynasties, flourished in the Ming and Qing Dynasties. It had been sold in Jianghuai area duringthe period of Yong Zheng of Qing Dynasty. It has a good reputation that 'dainty taste derived fromfortune spring and liquor ocean, which makes Yanghe rank first place in Jianghuai area'. Shuanggoualongside Yanghe has been praised as the origin of Chinese natural liquor by domestic and overseasexperts due to the discovery of drunken ape fossils in Xiacaowan.
3.2 Quality advantage
Considering the diversification and individuation of consumption demand, the Company took the lead inbreaking the traditional classification of liquor flavor. The Company classifies the liquor by taste and putemphasis on taste value. The Company strengthens the mellowness of liquor, puts forward the newstyle of the mellow liquor quality, and deeply meets core demand of target consumers. It successfullyestablishes the system framework of new production technology and mellowness mechanism of mellowliquor catering to market consumption. In June 2008, 'Mellowness' was first written into the nationalstandard in China Protected Geographical Indication Product- Yanghe Daqu (Standard No.GB/T220406-2008).
3.3 Talent advantage
The Company has 31 Masters of Chinese liquor, including 69 provincial liquor tasting committeemembers and 1862 technicians. The Company also has 10 national and provincial technical researchand development platforms. The obvious advantage of technical talents provides technical support forthe continuous improvement of the quality. Dream Six (International Edition) and ShuanggouZhenbaofang (Fengtan Liquor), the representative products of mellow liquor designed by the Company,have won the 2019 China Liquor Body Design Award. In the national liquor taster contest sponsored byChina Alcoholic Drinks Association, the Company is the only one that won three consecutivechampionships among all contestants. It also shows the great advantage of talents.
3.4 Brand advantage
The Company, as one of the old eight famous liquor enterprises, is the only one which has two famousChinese liquors, namely Yanghe and Shuanggou, two Chinese time-honored brands, and six Chinesewell-known trademarks, including Yanghe, Shuanggou, Yanghe Spirit Classic, Zhenbaofang, DreamBlue, and Su. The Company's brands were selected in 2019 Global Liquor Brand Value Top 50 at a
value of USD 9.06 billion by Brand Finance, a world-famous brand value research organization, andand ranked the third place in the world. In 2019, with brands worth CNY 56.08 billion, the Companyranked the No.84 in China's 500 Most Valuable Brands released by World Brand Lab.
3.5 Marketing network advantage
The Company has a marketing team with the largest size, the latest concept and the strongestexecutive force in the industry. The marketing network has penetrated into every county and every citythroughout the country. High speed channel has been basically completed. These laid a solidfoundation for market expansion and extension of the category in the future. The Company obtainedseveral honors such as model enterprise of industrial Internet development in Jiangsu province,software copyright of ‘one item one code’, and service-oriented manufacturing enterprise in Jiangsuprovince. At the same time, as a traditional enterprise, the Company has also insisted on exploring newmarketing mode, and has made some achievements in Internet application innovation.
Section IV Performance Discussion and Analysis
1. Overview
In 2019, faced with the complex and changing macro situation and increasing difficultiesand challenges, the Company thoroughly implemented the general idea of “steadying thehelm when wind changes and setting sail when going forward”, actively responded tochanges, took the initiative to adjusting and transforming, fully implemented the "1246"project, and promoted smooth development of the Company by adjusting andtransforming the sales system. This is mainly manifested in the following four aspects:
First, both stability and progress were realized. In 2019, the Company achieved revenueof CNY 23.126 billion, and net profit attributable to shareholders of CNY 7.383 billion. Itsoverall net profit remained one of the top three in the industry. The Company insisted onconsumer orientation and redefined the connotation of "good liquor". The classificationmode of liquor has achieved a major change. The mellowness of raw liquor has beensignificantly improved, and the aroma and layering have become more prominent. Thefullness and mellowness of liquor has surpassed that in the past. Based on the productindividuation, differentiation, and characteristics, the Company successfully created aseries of good products such as Dream Six plus, Su Toupai Liquor, Yanghe 1949Fengtan Liquor and Shuanggou Zhenbaofang Fengtan Liquor. These products won highpraise from all walks of life.
Second, both internal and external achievements were obtained. In 2019, the Companyestablished the technical system of "large base liquor group", intensified efforts intackling key technical issues and building research platforms, significantly enhanced itsstrategic reserve of base liquor and research and development capability, andcontinuously enlarged its technological innovation advantages. With efficientcommunication as a core, the Company promoted brand classification management,implemented low-cost, accurate and integrated communication, and constantly improvedits brand image. It has successively won the first place in liquor of "China's top 100technology enterprises in light industry" and the "top 100 most valuable Chinese brandsof 2019", which interprets the quality and value of Chinese high-end liquor.
Third, both offense and defense were possessed. In 2019, the Company continued tobreak through the thinking pattern, further promoted innovation drive, and injected newimpetus for sustainable development. Intelligent brewing workshop (version 4.0), MESsystem of intelligent packaging factory and financial information system have been putinto use, and the digital transformation of sales system has achieved remarkable results.The Company adhered to the guidance of profit and efficiency improvement, and createda scientific and efficient management system. The mechanism makes progressspontaneously and steadily. The whole staff improved the closed-loop management. Thelong-term inspection was pragmatic and efficient. The increase in revenue and thereduction in expenditure reached the target. The organization fission and marketing ofamoeba was implemented precisely.
Fourth, both detailed and high-profile events were considered. In 2019, the Companyclosely linked to the working idea of “being first-class” in the cultural construction. TheCompany promoted enterprise culture development to a new level. Yanghe undergroundliquor cellars, old cellars and distilling workshops were included in the national key
cultural relics protection units and national industrial heritage list. The biggest pottery jarwarehouse was completed successfully. The Chinese liquor live museum group with "oneaxis and one band, one core and 14 pavilions" was completed and opened. Thecompany has made significant influence by holding major events. The Company hassuccessfully held "Yanghe 1949, a gift to the motherland" sealing ceremony, "Guyuforum", "China Toupai liquor cellar festival" and other influential cultural feasts in theindustry. Meanwhile, the Company has actively participated in important international anddomestic activities, which has been widely recognized and praised.
2. Analysis of main business
2.1. Overview
Same with the contents presented in “1.Overview” of this section.
2.2. Revenues and cost of sales
2.2.1. Breakdown of operating revenues
Unit:CNY
2019 | 2018 | YoY change | |||
Amount | As a percentage of operating revenues | Amount | As a percentage of operating revenues | ||
Total | 23,126,476,885.07 | 100% | 24,159,801,994.68 | 100% | -4.28% |
By business segment | |||||
Liquor | 22,161,278,307.05 | 95.83% | 23,186,902,149.00 | 95.97% | -4.42% |
Others | 965,198,578.02 | 4.17% | 972,899,845.68 | 4.03% | -0.79% |
By product | |||||
Liquor | 21,967,044,396.58 | 94.99% | 22,913,294,724.76 | 94.84% | -4.13% |
Wine | 194,233,910.47 | 0.84% | 273,607,424.24 | 1.13% | -29.01% |
Others | 965,198,578.02 | 4.17% | 972,899,845.68 | 4.03% | -0.79% |
By geographical segment | |||||
Jiangsu | 11,011,399,137.52 | 47.61% | 12,326,360,162.73 | 51.02% | -10.67% |
Ex-Jiangsu | 12,115,077,747.55 | 52.39% | 11,833,441,831.95 | 48.98% | 2.38% |
2.2.2. Business segment, products or geographical segmentscontributing over 10% of the operating revenues or profits
√ Applicable ? N/A
Unit:CNY
Operating revenues | Cost of sales | Gross profit margin | YoY change of operating revenue | YoY change of cost of sales | YoY change of gross profit margin | |
By business segment | ||||||
Liquor | 22,161,278,307.05 | 5,772,779,588.18 | 73.95% | -4.42% | 4.44% | -2.21% |
By product | ||||||
Liquor | 21,967,044,396.58 | 5,643,498,376.83 | 74.31% | -4.13% | 4.65% | -2.16% |
By geographical segment | ||||||
Jiangsu | 10,299,457,647.02 | 3,007,670,574.12 | 70.80% | -11.30% | 0.77% | -3.50% |
Ex-Jiangsu | 11,861,820,660.03 | 2,765,109,014.06 | 76.69% | 2.48% | 8.74% | -1.34% |
Under the circumstances that the statistical standards for the Company’s main businessdata adjusted in the reporting period, the Company’s main business data in the current
one year is calculated based on adjusted statistical standards at the end of the reportingperiod.? Applicable √ N/A
2.2.3. Whether revenue from physical sales is higher than servicerevenue
√ Yes □ No
Bybusinesssegment
By business segment | Item | Unit | 2019 | 2018 | YoY change |
Liquor | Sales volume | ton | 186,022.52 | 214,051.34 | -13.09% |
Production volume | ton | 179,315.33 | 211,606.75 | -15.26% | |
Inventory volume | ton | 18,156.75 | 24,863.94 | -26.98% | |
Wine | Sales volume | ton | 4,854.36 | 5,288.96 | -8.22% |
Production volume | ton | 4,137.99 | 6,315.57 | -34.48% | |
Inventory volume | ton | 644.25 | 1,360.62 | -52.65% |
Reasons for any over 30% YoY changes in the data above.
√ Applicable ? N/A
The decrease of 34.48% YoY in production volume of wine and the decrease of 52.65%YoY inventory of wine was mainly because the wine was imported with originalpackaging and stock in advance during last period led to large inventory of wine by theend of last period. Meanwhile, both the production volume and sales volume decreasedin this period.
2.2.4. Execution of significant sales contracts in the reporting period
? Applicable √ N/A
2.2.5. Breakdown of cost of sales
By business and product segment
Unit:CNY
By business segment | Item | 2019 | 2018 | YoY change | ||
Amount | As a percentage of cost of sales | Amount | As a percentage of cost of sales | |||
Liquor | 5,772,779,588.18 | 87.12% | 5,527,417,445.92 | 87.00% | 4.44% |
Unit:CNY
By product segment | Item | 2019 | 2018 | YoY Change | ||
Amount | As a percentage of cost of sales | Amount | As a percentage of cost of sales | |||
Liquor | Raw materials | 4,284,348,458.13 | 64.66% | 4,397,294,002.46 | 69.21% | -2.57% |
Liquor | Labor costs | 904,555,426.95 | 13.65% | 597,717,848.21 | 9.41% | 51.33% |
Liquor | Fuels and energy | 226,377,369.91 | 3.42% | 246,871,521.50 | 3.89% | -8.30% |
Liquor | Manufacturing overhead | 357,498,333.19 | 5.40% | 280,144,635.22 | 4.41% | 27.61% |
Liquor | Consumption tax and surcharges | 5,389,438.53 | 0.08% | -100.00% |
Note:
The increase of 51.33% YoY in labor costs was mainly due to an increase in wagesduring this period.The decrease of 100% in consumption tax and surcharges was mainly due to that therewas no manufacturing consignment during this period.
2.2.6. Changes in the scope of the consolidated financial statements forthe reporting period
√ Yes ? No
1. Establishment of subsidiaries
In September 2018, the Company registered and established Yanghe Hong KongDistillery Co., Ltd. in Hong Kong, which was invested in October 2019 and included in theconsolidated financial statements from October 2019.
2. Cancellation of subsidiaries
(1) Jiangsu Guanmeng Information Technology Co., Ltd., the holding subsidiary, wasliquidated and terminated, and on 12 February 2019, it obtained Notice of approval fortermination registration of the company from Suzhou Xiangcheng District MarketSupervision Administration. As of March 2019, it is no longer included in the consolidatedscope of the consolidated financial statements.
(2) Jiangsu Oubaosi International Trade Co., Ltd., the holding subsidiary, was liquidatedand terminated. On 3 January 2019, it obtained Notice of approval for terminationregistration of the company from Nanjing Jiangbei New District Management CommitteeMarket Supervision Administration. As of February 2019, it is no longer included in theconsolidated scope of the consolidated financial statements.
(3) Jiangsu Yanghe Packaging Co., Ltd., the holding subsidiary, was liquidated andterminated, and on 2 February 2019, it obtained Notice of approval for terminationregistration of the company from Suqian Municipal Administration for Industry andCommerce. As of March 2019, it is no longer included in the consolidated scope of theconsolidated financial statements.
(4) Dream Blue Haichuanhui (Shiyan) Trade and Investment Co., Ltd., the holdingsubsidiary, was liquidated and terminated, and on 21 September 2019, it obtained theNotice of approval for termination registration of the company from Shiyan MunicipalAdministration Approval Bureau. As of October 2019, it is no longer included in theconsolidated scope of the consolidated financial statements.
(5) Xuzhou Huaqu Wine Development Co., Ltd., the holding subsidiary, was liquidatedand terminated, and on 24 October 2019, it obtained Notice of approval for terminationregistration of the company from Xuzhou Market Supervision Administration. As of
November 2019, it is no longer included in the consolidated scope of the consolidatedfinancial statements.
2.2.7. Major changes in the business, products or services in thereporting period? Applicable √ N/A
2.2.8. Main customers and suppliers
Sales to major customers of the Company
Total sales from top five customers(CNY)
Total sales from top five customers(CNY) | 950,082,213.94 |
Total sales from top five customers as a percentage of the total sales | 4.11% |
Total sales from related parties among top five customers as a percentage of the total sales | 0.00% |
Information on top five customers
No. | Customer | Sales amount(CNY) | As a percentage of the total sales for the year |
1 | Customer A | 326,401,031.96 | 1.41% |
2 | Customer B | 282,249,356.34 | 1.22% |
3 | Customer C | 129,745,239.50 | 0.56% |
4 | Customer D | 124,090,364.13 | 0.54% |
5 | Customer E | 87,596,222.01 | 0.38% |
Total | -- | 950,082,213.94 | 4.11% |
Other information on major customers? Applicable √ N/AMajor suppliers of the Company
Total purchase from top five suppliers(CNY) | 1,059,848,342.00 |
Total purchase from top five suppliers as a percentage of the total sales | 18.00% |
Total purchase from related parties among top five suppliers as a percentage of the total purchase | 0.00% |
Information on top five suppliers
No. | Supplier | Purchases(CNY) | As a percentage of the total purchase for the year |
1 | Supplier A | 317,383,746.97 | 5.39% |
2 | Supplier B | 214,651,822.49 | 3.64% |
3 | Supplier C | 207,918,354.69 | 3.53% |
4 | Supplier D | 161,007,153.38 | 2.73% |
5 | Supplier E | 158,887,264.47 | 2.71% |
Total | -- | 1,059,848,342.00 | 18.00% |
Other information on major suppliers? Applicable √ N/A
2.3. Expense
Unit:CNY
2019 | 2018 | YoY change | Reason for any significant change | |
Selling and distribution expenses | 2,691,711,170.59 | 2,561,401,628.22 | 5.09% | |
General and administrative expenses | 1,856,491,727.00 | 1,704,265,102.61 | 8.93% | |
Finance expenses | -78,426,551.41 | -65,138,636.76 | -20.40% | |
R&D expenses | 159,965,593.88 | 27,565,217.63 | 480.32% | During this period, 7 raw liquor production and R&D projects were registered by Suqian Municipal Science and Technology Bureau, resulting in a substantial increase in the amount of R&D expenses. |
2.4. R&D input
√ Applicable ? N/A
During the reporting period, the Company has made outstanding achievements infocusing on smart distilling, and the output and quality have reached the test goal. TheCompany focused on the construction of distilling microecology and optimized thedirected aggregation of microorganisms. The Company developed a new mode of rawliquor selection, grading and dynamic management. The Company reshaped themellowness architecture model, and deeply applied the core theory of mellownessmechanism. The Company deeply subdivided the function of liquor body design toconstruct a new liquor body design model. Further study on fermentation mechanismhelped the significant improvement of the mellowness quality.
During the reporting period, the Company won 5 science and technology awards abovethe provincial level, 1 municipal patent first prize, and 3 invention patents.
Information about R&D input
2019 | 2018 | YoY change | |
Number of R&D personnel | 396 | 393 | 0.76% |
R&D personnel as a percentage in total employees | 2.51% | 2.57% | -0.06% |
R&D input(CNY) | 166,917,025.32 | 32,880,110.63 | 407.65% |
R&D input as a percentage in operating revenues | 0.72% | 0.14% | 0.58% |
Capitalized R&D input(CNY) | 6,951,431.44 | 5,314,893.00 | 30.79% |
Capitalized R&D input percentage in total R&D input | 4.16% | 16.16% | -12.00% |
Reasons for any significant YoY change in the ratio of the R&D input to the operatingrevenues.? Applicable √ N/A
Reasons for any sharp variation in the capitalization rate of R&D input and statement ofits rationale.? Applicable √ N/A
2.5. Cash flows
Unit:CNY
Item
Item | 2019 | 2018 | YoY change |
Subtotal of cash inflows from operating activities | 28,418,153,682.08 | 29,598,814,116.52 | -3.99% |
Subtotal of cash outflows from operating activities | 21,620,261,810.67 | 20,542,065,300.24 | 5.25% |
Net cash flows from operating activities | 6,797,891,871.41 | 9,056,748,816.28 | -24.94% |
Subtotal of cash inflows from investing activities | 40,698,105,842.28 | 35,262,332,061.45 | 15.42% |
Subtotal of cash outflows from investing activities | 41,991,320,976.18 | 38,611,674,185.80 | 8.75% |
Net cash flows from investing activities | -1,293,215,133.90 | -3,349,342,124.35 | 61.39% |
Subtotal of cash inflows from financing activities | 1,500,000.00 | -100.00% | |
Subtotal of cash outflows from financing activities | 4,823,150,583.00 | 3,842,859,037.00 | 25.51% |
Net cash flows from financing activities | -4,823,150,583.00 | -3,841,359,037.00 | -25.56% |
Net increase in cash and cash equivalents | 684,796,540.70 | 1,865,395,431.79 | -63.29% |
Explanation of why the data above varied significantly.
√ Applicable □ N/A
(1)The increase of 61.39% YoY of net cash flows from investing activities was mainlybecause the increase in cash inflow from current investing activities was more than theincrease in cash outflow from investing activities, resulting in an increase in net cash flowfrom current investment activities.
(2) The decrease of 100% YoY of net cash flows from financing activities was mainly dueto recovering letter of credit deposit during last period.
(3) The decrease of 63.29% YoY of net increase in cash and cash equivalent was mainlydue to a decrease in net cash flow from current operating activities and a decrease in netcash flow from current financing activities.
Main reasons for the material difference between net cash flows from operating activitiesduring the reporting period and net profit for the year.? Applicable √ N/A
3. Analysis of non-core business
√ Applicable ? N/A
Unit:CNY
Amount | As a percentage of total profits | Reasons | Sustainability | |
Investment income | 850,554,207.62 | 8.71% | Mainly due to the investment income generated by wealth management products | No |
Changes in fair value | 158,679,505.33 | 1.62% | Mainly due to changes in fair value of financial assets held for trading | No |
Asset impairment | -2,248,496.85 | -0.02% | Mainly due to provision for stock obsolescence | No |
Non-operating income | 22,245,954.37 | 0.23% | Mainly due to compensation and liquidated damages income | No |
Non-operating expenses | 13,324,291.70 | 0.14% | Mainly due to losses from retirement of fixed assets and donation expenses | No |
4. Analysis of assets and liabilities
4.1 Significant changes of asset items
The Company implemented the new financial instrument standards, new revenuestandards or new leasing standards for the first time since 2019, and adjusted openingbalance of related items in financial reports due to the first implementation.
√ Applicable ? N/A
Unit:CNY
As at the end of 2019 | As at the beginning of 2019 | Change in percentage | Explanation about any significant changes | |||
Amount | As a percentage of total assets | Amount | As a percentage of total assets | |||
Cash and cash equivalents | 4,300,144,848.67 | 8.04% | 3,615,348,307.97 | 7.23% | 0.81% | |
Accounts receivable | 16,080,618.65 | 0.03% | 5,522,261.31 | 0.01% | 0.02% | |
Inventories | 14,433,244,696.27 | 27.00% | 13,892,118,587.74 | 27.80% | -0.80% | |
Long-term equity investments | 25,361,651.38 | 0.05% | 9,423,328.82 | 0.02% | 0.03% | |
Fixed assets | 7,256,557,503.85 | 13.58% | 7,833,665,282.19 | 15.68% | -2.10% | |
Construction in progress | 263,153,505.12 | 0.49% | 154,535,104.82 | 0.31% | 0.18% | |
Long-term borrowings | 72,723.00 | 109,088.00 |
4.2 Assets and liabilities measured at fair value
√ Applicable □ N/A
Unit:CNY
Item
Item | Opening balance | Changes in fair value recognized in profit or loss | Changes in the cumulative fair value recorded into equity | Provision for impairment | Amount of purchase | Amount of sale | Other changes | Closing balance |
Financial Asset | ||||||||
1. Financial assets held for trading(excluding derivative financial assets) | 21,024,408,530.20 | 158,679,505.33 | 41,652,461,609.88 | 39,807,930,764.80 | 23,027,618,880.61 | |||
Subtotal of financial assets | 21,024,408,530.20 | 158,679,505.33 | 41,652,461,609.88 | 39,807,930,764.80 | 23,027,618,880.61 | |||
Total | 21,024,408,530.20 | 158,679,505.33 | 41,652,461,609.88 | 39,807,930,764.80 | 23,027,618,880.61 | |||
Financial liabilities | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
Other changesWhether measurement attribution of main assets changed significantly during this period.? Yes √ No
4.3 Restricted asset rights as of the end of this reporting period
No
5. Investment
5.1. Total investment
√ Applicable ? N/A
Investment made in the reporting period(CNY) | Investment made in the prior year(CNY) | YoY change |
2,169,877,269.95 | 1,035,447,337.86 | 109.56% |
5.2. Significant equity investment made in the reporting period? Applicable √ N/A
5.3. Significant non-equity investment ongoing in the reporting period? Applicable √ N/A
5.4. Financial assets at a fair value
√Applicable ? N/A
Unit:CNY
Category ofsecurities
Category of securities | Initial investment cost | Changes in fair value recognized in profit or loss | Changes in the cumulative fair value recorded into equity | Amount of purchase | Amount of sale | Accumulated investment income | Closing balance | Capital source |
Stock | 425,350,132.53 | 46,958,683.88 | 0.00 | 0.00 | 0.00 | 9,374,806.02 | 331,714,847.11 | Owned fund |
Trust | 10,528,393,516.12 | 133,962,200.00 | 0.00 | 10,252,307,330.00 | 9,676,955,130.00 | 476,422,000.00 | 10,575,352,200.00 | Owned fund |
Other | 12,055,789,695.46 | -22,241,378.55 | 0.00 | 31,400,154,279.88 | 30,140,906,746.23 | 369,248,567.53 | 12,120,551,833.50 | Owned fund |
Total | 23,009,533,344.11 | 158,679,505.33 | 0.00 | 41,652,461,609.88 | 39,817,861,876.23 | 855,045,373.55 | 23,027,618,880.61 | -- |
5.5. Use of fund-raising
? Applicable √ N/ANo such cases in the reporting period.
6. Sale of major assets and equity Interests
6.1. Sale of major Assets
? Applicable √ N/ANo such cases in the reporting period
6.2. Sale of major equity Interests
? Applicable √ N/A
7. Analysis of major subsidiaries
√ Applicable ? N/A
Main subsidiaries and joint companies with an over 10% influence on the Company’s net profit
Unit:CNY
Company name
Company name | Company type | Business scope | Registered capital | Total assets | Net assets | Operating revenue | Operating profit | Net profit |
Su Wine Trade Group Limited by Share Ltd. | Subsidiary | Wholesaling and retailing of prepackaged food | 334,400,000.00 | 21,099,601,221.40 | 4,684,024,774.74 | 21,974,534,074.41 | 5,003,782,622.22 | 3,819,274,583.70 |
Jiangsu Shuanggou Distillery Stock Co.,Ltd. | Subsidiary | Production and sales of liquor | 110,000,000.00 | 5,804,851,247.65 | 2,145,629,216.48 | 1,738,636,631.76 | 1,741,537,881.85 | 1,775,995,802.91 |
Jiangsu Shuanggou Liquor Operation Co.,Ltd. | Subsidiary | Wholesaling and retailing of prepackaged food | 5,000,000.00 | 3,193,835,892.39 | 1,349,650,903.78 | 4,056,086,681.13 | 1,782,213,618.52 | 1,336,559,275.57 |
Acquisition and disposal of subsidiaries during the reporting period
√ Applicable □ N/A
Subsidiary name | How subsidiary was acquired or disposed during the reporting period | Impact on overall operation and results(CNY) |
Yanghe Hong Kong Distillery Co., Ltd. | Establishment | Tiny |
Jiangsu Guanmeng Information Technology Co., Ltd. | Liquidation and cancellation | Tiny |
Jiangsu Oubaosi International Trade Co., Ltd. | Liquidation and cancellation | Tiny |
Jiangsu Yanghe Packaging Co., Ltd. | Liquidation and cancellation | Tiny |
Dream Blue Haichuanhui (Shiyan) Trade and Investment Co., Ltd. | Liquidation and cancellation | Tiny |
Xuzhou Huaqu Wine Development Co., Ltd. | Liquidation and cancellation | Tiny |
8. Structured entities controlled by the Company
□ Applicable √ N/A
9. Outlook for the future development of the Company
9.1. Analysis of industry situation
First, the liquor industry is developing well. In 2019, benefiting from consumption upgradeand the transformation of consumption structure, liquor industry revenue and profitmaintained steady growth, with profit growth outpacing revenue growth. In 2019, thesales revenue of above-sized liquor enterprises in China reached CNY 561.782 billion,up 8.24% year on year. The total profit before taxes reached CNY 140.409 billion, up
14.54% year on year. In the future, with the increase in the volume and price of high-endand secondary high-end segment and the rise of the middle class, the liquor industry isexpected to further enjoy the benefits of consumption upgrade.
Second, the landscape of liquor industry is gradually forming. In 2019, the competition ofliquor industry became more intensified and developed into extrusion-type. Famousliquor enterprises continuously strengthened their competitive advantages in aspects ofproduct, brand, channel and market. In each of high-end, secondary high-end, middle-end or low-end liquor segments, representative brands in each mainstream price rangehave gradually emerged. The industry structure and competition landscape have beengradually formed, and such situations could be further strengthened in future marketcompetition.
Third, industry differentiation accelerated and the Matthew effect has been more evident.In the first three quarters of 2019, the revenue growth rate of 19 listed liquor enterpriseswas 17%, 7 percentage higher than the overall growth rate of the industry, and therevenue was further concentrated among major enterprises. With the increasingconcentration of liquor industry, leading and famous enterprises with advantages incapital, management, brand, talent and channel are expected to capture more shares inthe future market competition.
9.2. Future development strategy and next business plan
(1)Future development strategy
In 2020, the Company will continue to adhere to the "Wu Du Wu Mi" strategy, and try tobecome a company that understands liquor, brews liquor, and sells liquor the best in theindustry, and a most focused, most professional, and most far-sighted liquor company.The more long-term development goal is to make the Company a leading enterprise thatcan perform well constantly through the life cycle.
(2)2020 business plan
In 2020, facing the complex external environment and increasingly fierce competitionsituation, the Company will implement “12633” work plan, namely focusing on "one goal",inspiring "second entrepreneurship", upgrading "six forces", winning "three major battles",and strengthening "three guarantees". In a decisive battle, the Company will win thebattle of transformation and embark on a new journey of high-quality development in abetter era.A. Focusing on “one goal”. 2020 is a critical year for the Company's adjustment andtransformation. Affected by the epidemic, the Company will make every effort to minimizethe impact of the epidemic, and strive to maintain a flat revenue level in 2020.B. Inspiring "second entrepreneurship". The first is to adhere to strategic thinking. TheCompany will focus on the big picture, prioritize the overall situation, pay attention to thekey points, and raise the "second entrepreneurship" to the strategic height of the overallsituation and development of the enterprise. The second is to stick to long-term thinking.The Company will adhere to the consumer-oriented sense of mission, adhere to thepeople-oriented value concept, adhere to craftsmanship spirit of pursuit of excellence,and commit to making a better life for long term. The third is to adhere to responsibilitythinking. The Company not only achieves business value, but also contributes to theenvironment, responsibility and the safety and healthy development of employees,reflecting the responsibility of the enterprise. The fourth is to adhere to ecological thinking.From the logic of competition to the logic of symbiosis, the Company will createenterprise ecology, do a good job in cooperation, eliminate the information island, andconstantly enhance the co-construction and symbiosis among enterprises, consumers,distributors, suppliers, media and capital markets.C. Upgrading "six forces". The first is to focus on the characteristics of the times, andupgrade the unique product power. The second is to focus on consumer sovereignty, andupgrade the outstanding brand power directly into the people's hearts. The third is tofocus on digital empowerment and upgrade the ultimate channel power that helps win inthe market. The Fourth is to focus on transformation, development, upgrade and thecontinuous innovation power. The fifth is to focus on the adjustment mechanism, andupgrade promising organization power. The sixth is to focus on patriotism, and upgradethe era of cultural power to pursue the dream.D. Winning "three major battles". Resolutely win the "three battles" of marketingtransformation, quality breakthrough and management upgrading: first, based on long-term thinking, comprehensive measures, precise force, the Company will resolutely winthe battle of marketing transformation. The second is to focus on mellowness. TheCompany will spare no effort at all costs to resolutely win the quality breakthrough battle.The third is to improve the quality and efficiency. It needs all hands on deck to resolutelywin the battle of management and upgrading.E. Strengthening "three guarantees". To provide the guarantee of success for enterprisetransformation: The first is to provide the political guarantee for success with theguidance of party construction; The second is that the innovation of mechanism providesthe organization guarantee for success. The third is that cultural remolding provides theideological guarantee for success.
(3)Possible risks
First is the risk of macroeconomic uncertainties. From a global point of view, worldeconomic growth continues to slow down and international economic environment isunpredictable. From a domestic point of view, China is now in the crucial period oftransforming the growth model, optimizing the economic structure and transforming thegrowth drivers. Structural, institutional and cyclical problems are intertwined, anddownward pressure on the economy is mounting.
Second is the risk of intensified market competition. The main competitive enterprisespay more attentions to marketing, increase investment intensity, strengthen channelconstruction, further develop the terminal ends, and further optimize the product mix.Competitive enterprises maintain rapid growth and market competition becomes moreintense.
Third, the epidemic affected the sector-wise sales of liquor. The recent domestic andinternational COVID-19 outbreak has affected the global economic development trend toa certain extent, and then affected the sales of liquor sector periodically.
10. Visits paid to the Company for research, communication,interview, etc.
10.1 Activity register in the reporting period
√ Applicable ? N/A
Date of visit
Date of visit | Way of visit | Type of visitor | Index to main inquiry information |
15 February 2019 | Field survey | Institution | Log Sheet of Investor Relations Activities for 15 February 2019 on www.cninfo.com.cn(No:2019-001) |
8 May 2019 | Field survey | Institution | Log Sheet of Investor Relations Activities for 8 May 2019 on www.cninfo.com.cn(No:2019-002) |
10 May 2019 | Other | Other | Log Sheet of Investor Relations Activities for 10 May 2019 on www.cninfo.com.cn(No:2019-003) |
23 May 2019 | Field survey | Other | Log Sheet of Investor Relations Activities for 23 May 2019 on www.cninfo.com.cn(No:2019-004) |
20 June 2019 | Field survey | Institution | Log Sheet of Investor Relations Activities for 20 June 2019 on www.cninfo.com.cn(No:2019-005) |
17 July 2019 | Field survey | Institution | Log Sheet of Investor Relations |
Date of visit
Date of visit | Way of visit | Type of visitor | Index to main inquiry information |
Activities for 17 July 2019 on www.cninfo.com.cn(No:2019-006) | |||
19 July 2019 | Field survey | Institution | Log Sheet of Investor Relations Activities for 19 July 2019 on www.cninfo.com.cn(No:2019-007) |
30 July 2019 | Field survey | Institution | Log Sheet of Investor Relations Activities for 30 July 2019 on www.cninfo.com.cn(No:2019-008) |
18 September 2019 | Field survey | Institution | Log Sheet of Investor Relations Activities for 18 September 2019,19 September 2019 on www.cninfo.com.cn(No:2019-009) |
19 September 2019 | Field survey | Institution | Log Sheet of Investor Relations Activities for 19 September 2019,19 September 2019 on www.cninfo.com.cn(No:2019-009) |
29 October 2019 | Telephone communication | Institution | Log Sheet of Investor Relations Activities for 29 October 2019,30 October 2019 on www.cninfo.com.cn(No:2019-010) |
30 October 2019 | Telephone communication | Institution | Log Sheet of Investor Relations Activities for 30 October 2019,30 October 2019 on www.cninfo.com.cn(No:2019-010) |
Section V Significant Events
1. Profit distribution and converting capital reserves intoshare capital for common shareholders
Profit distribution policy for common stock during this period, especially formulation,execution or adjustments of cash dividend policy.
√ Applicable ? N/A
On 23 May 2019, the Company held 2018 annual shareholders' meeting, and the plan forprofit distribution for 2018 was reviewed and approved by this meeting. Plan for profitdistribution: Based on its total of 1,506.988 million shares as on 31 December 2018, theCompany distributed a cash dividend of CNY 32 (tax inclusive) per 10 shares. The totalcash dividend is CNY 4,822.3616 million (tax inclusive).
A special statement of cash dividend policy
A special statement of cash dividend policy | |
Whether it meets the requirements of the articles of incorporation or the resolution of shareholders' meeting. | Yes |
Whether the standard and proportion of dividends are definite and clear. | Yes |
Whether the relevant decision-making process and system are complete. | Yes |
Whether non-executive directors perform their duties and play their due role. | Yes |
Whether the minority shareholders have the opportunity to fully express their opinions and appeals and whether their legitimate rights and interests have been adequately protected. | Yes |
Whether the conditions and procedures are compliant and transparent it the cash dividend policy is adjusted or changed. | The Company's cash dividend policy has not been adjusted or changed. |
Plans (or preliminary plans) for profit distribution and converting capital reserves intoshare capital for common shareholders for the recent three years (including the reportingperiod) are as following:
2019: The Company intends to distribute a cash dividend of CNY 30 (tax included) per 10shares to all shareholders with undistributed profits on the basis of the share capitalparticipating in the dividend on the registration date when the profit distribution plan isimplemented in the future. There is no bonus shares and reserves would not beconverted into share capital. According to the implementation rules of the repurchase ofshares of listed companies in Shenzhen Stock Exchange, the repurchase shares held inthe special securities account of the repurchase of shares of listed companies are notentitled to the rights of profit distribution, fund transferred to increase share capital, rightsissue, etc. Assuming the Company's total share capital of 1,506,988,000 shares as at 31December 2019, and excluding 1,500,995,897 shares of 5,992,103 shares in theCompany's special securities account for share repurchase as at 28 April 2020 (the datewhen the board of directors reviewed and adopted the profit distribution plan), the
Company is expected to distribute a cash dividend of no more than CNY 4,502,987,691(tax included) in the current year.
2018: Based on its total of 1,506.988 million shares as at 31 December 2018, theCompany is to distribute a cash dividend of CNY 32 (tax inclusive) per 10 shares. Thetotal cash dividend is CNY 4,822.3616 million (tax inclusive). The registration date was26 June 2019 and the ex-right & ex-dividend day was 27 June 2019.
2017: Based on its total of 1,506.988 million shares as at 31 December 2017, theCompany is to distribute a cash dividend of CNY 25.5 (tax inclusive) per 10 shares. Thetotal cash dividend is CNY 3,842.8194 million (tax inclusive). The registration date was21 June 2018 and the ex-right & ex-dividend day was 22 June 2018.
Cash dividend distribution over the recent three years (including the reporting period)
Unit: CNY
Year
Year | Cash dividends (tax inclusive) | Net profit attributable to common shareholders in the consolidated statement in the year | Ratio to net profit attributable to common shareholders in the consolidated statement in the year | Cash dividends in other forms (e.g. share repurchase) | Ratio of cash dividends in other forms | Total cash dividends (including other forms) | Ratio of cash dividends (including other forms) |
2019 | 4,502,987,691.00 | 7,382,822,726.87 | 60.99% | 0.00 | 0.00% | 4,502,987,691.00 | 60.99% |
2018 | 4,822,361,600.00 | 8,115,189,794.69 | 59.42% | 0.00 | 0.00% | 4,822,361,600.00 | 59.42% |
2017 | 3,842,819,400.00 | 6,627,169,959.16 | 57.99% | 0.00 | 0.00% | 3,842,819,400.00 | 57.99% |
The Company made a profit in the reporting period and the profit distributed to commonshareholders of the parent company was positive, but it did not put forward a preliminaryplan for cash dividend distribution to its common shareholders.? Applicable √ N/A
2. Plan for profit distribution and converting capital reservesinto share capital for the reporting period
√ Applicable ? N/A
Bonus shares for every 10 shares (share) | 0 |
Dividend for every 10 shares (CNY) (tax included) | 30 |
Shares converted from capital reserves for every 10 shares (share) | 0 |
Total shares as the basis for the preliminary plan for profit distribution (share) | 1,500,995,897 |
Total cash dividends (CNY) (tax inclusive) | 4,502,987,691.00 |
Cash dividends in other forms (e.g. share | 0.00 |
repurchase)
repurchase) | |
Total cash dividends (CNY) (including other forms) | 4,502,987,691.00 |
Distributable profit (CNY) | 24,556,878,616.62 |
Percentage of cash dividends in the total distributed profit (including other forms) | 100% |
Information about cash dividends | |
The development stage of the Company is mature and the Company has no major fund expenditure arrangement. When the profit distribution is carried out, the proportion of cash dividends in this profit distribution should at least reach 80%. | |
Details about the preliminary plan for profit distribution and converting capital reserves into share capital | |
As audited by Suya Jincheng CPA LLP, the Company realized a net profit of CNY 7,206,965,587.70 for 2019. It provided CNY 0 as statutory surplus reserves, plus undistributed profit at the beginning of the year of CNY 22,172,274,628.92 and minus the distributed profit of CNY 4,822,361,600, the actual distributable profit would be CNY 24,556,878,616.62. In line with both the long-term development needs of the Company and the principle of giving appropriate returns to shareholders, the Company intends to distribute a cash dividend of CNY 30 (tax included) per 10 shares to all shareholders with undistributed profits on the basis of the share capital participating in the dividend on the registration date when the profit distribution plan is implemented in the future. There is no bonus shares and reserves would not be converted into share capital. The profit distribution conforms to the cash dividend policy stipulated in the articles of association. According to the implementation rules of the repurchase of shares of listed companies in Shenzhen Stock Exchange, the repurchase shares held in the special securities account of the repurchase of shares of listed companies are not entitled to the rights of profit distribution, fund transferred to increase share capital, rights issue, etc. Assuming the Company's total share capital of 1,506,988,000 shares as at 31 December 2019, and excluding 1,500,995,897 shares of 5,992,103 shares in the Company's special securities account for share repurchase as at 28 April 2020 (the date when the board of directors reviewed and adopted the profit distribution plan), the Company is expected to distribute a cash dividend of no more than CNY 4,502,987,691 (tax included) in the current year. |
3. Performance of undertakings
3.1. Undertakings of the Company's actual controller, shareholders,related parties and acquirer, as well as the Company and othercommitment makers fulfilled during the reporting period or ongoing atthe end of this period
√ Applicable ? N/A
Undertaking | Undertaking giver | Type of undertaking | Details of undertaking | Undertaking date | Term | Degree of performance |
Stock reform undertaking | ||||||
Undertaking made in the report of acquisition or change of interest | ||||||
Undertaking made in the reorganization of assets | ||||||
Undertakings given in time of IPO or refinancing | Jiangsu Yanghe Group Co.,Ltd. | Horizontal competition, related transactions and capital occupation | 1. The commitment to avoid horizontal competition: (1) At present, the Company has not engaged in the business of | 26 August 2009 | Long-term | In progress |
Undertaking
Undertaking | Undertaking giver | Type of undertaking | Details of undertaking | Undertaking date | Term | Degree of performance |
competing with the joint stock company. The Company is committed to maintaining the existing business structure and does not directly or indirectly operate any business that competes with the actual operation of the joint stock company or may constitute a competition, or a subsidiary or subsidiary enterprise that is engaged in the above business. (2) If the Company violates the above commitments, the joint stock company has the right to require the company to immediately terminate its business competition and to compensate for the economic losses caused to the joint stock company. At the same time, the Company should pay liquidated damages to the joint stock company for CNY 10 million. (3) The Company has committed itself to the legitimate rights and interests of the shareholders of joint stock companies, other shareholders of joint stock companies and the creditors of joint stock companies without the use of their holding shareholder status in the joint stock company. (4) This undertaking shall enter into force on the date of signing, and shall not be revoked without the consent of the stock company. 2. The commitment to reduce the related transactions: the Company will strictly follow the requirements of the relevant laws as Corporation Law, Securities Law and Code of Corporate Governance for Listed Companies, and further reduce and strictly standardize the various related transactions between the Company and the joint stock companies, so as to ensure that the controlling shareholders and the actual control are |
Undertaking
Undertaking | Undertaking giver | Type of undertaking | Details of undertaking | Undertaking date | Term | Degree of performance |
not used. The status of making a person damages the interests of the shareholders of a joint stock company and other shareholders and does not occur in the case of new share holding companies. | ||||||
Jiangsu Blue Alliance Joint-Stock Co., Ltd. | Horizontal competition, related transactions and capital occupation | The commitment to avoid horizontal competition: 1. The Company is mainly engaged in investment management and does not operate the same or associated business with the issuer. The Company will not engage in the business of the same or associated business with the issuer, without prejudice to the interests of the issuer, nor from the issuer for unfair interests. 2. If the Company violates the above commitment, the issuer has the right to claim compensation for the economic loss resulting from the issuer, and to pay a liquidated penalty of CNY 5 million, and the right to purchase the business item at the market price of the business item or the establishment of a cost price (which is the principle of the lowest value).3. This undertaking shall enter into force on the date of signing, and shall not be revoked without the consent of the issuer. | 23 November 2017 | Long-term | In progress. Blue Alliance merged Blue Sky Trade and Blue Ocean Trade. Blue Alliance carries on relevant commitments | |
Jiangsu Blue Alliance Joint-Stock Co., Ltd. | Share reduction | After a year of trading in the stock exchange, the shares of the issuer will not exceed 25% of the total number of shares held by the issuer, and the issuer's shares and changes in the shares are declared to the issuer in a timely manner. | 23 November 2017 | Long-term | In progress,Blue Alliance merged Blue Sky Trade and Blue Ocean Trade. Blue Alliance Carries on relevant commitments | |
Feng Pantai, Cong Xuenian | Other undertaking | Shareholders of Blue Sky Trade,as directors, supervisors and senior managers, made the commitment: | 23 November 2017 | Long-term | In progress |
Undertaking
Undertaking | Undertaking giver | Type of undertaking | Details of undertaking | Undertaking date | Term | Degree of performance |
1. During the tenure of the issuer, Blue Sky Trade equity transferred annually shall not exceed 25% of the total number of shares held by Blue Sky Trade。 2. If I leave the issuer, I will not transfer the shares of Blue Sky Trade that I have held within six months after my departure. 3. If I leave from the issuer, the number of Blue Sky transferred shares trade within twelve months after six months of departure does not exceed 50% of the total share of Blue Sky Trade. | ||||||
Zhong Yuye | Other undertaking | Shareholders of Blue Ocean Trade,as directors, supervisors and senior managers, made the commitment: 1. During the tenure of the issuer, Blue Ocean Trade equity transferred annually shall not exceed 25% of the total number of shares held by Blue Ocean Trade 2. If I leave the issuer, I will not transfer the shares of Blue Ocean Trade that I have held within six months after my departure. 3. If I leave from the issuer, the number of Blue Ocean transferred shares trade within twelve months after six months of departure does not exceed 50% of the total share of Blue Ocean Trade. | 23 November 2017 | 23 March 2019 | Finish | |
Equity incentive undertaking | ||||||
Other undertakings to non-controlling shareholders | ||||||
Whether the undertaking is fulfilled on time | Yes | |||||
If the undertaking is overdue and not fulfilled, specific reasons for failing to fulfill any undertakings and plan for the next step | N/A |
3.2. Where any earnings forecast was made for any of the Company'sassets or projects and the reporting period is still within the forecast
period, the Company shall explain whether the performance of the assetor project reaches the earnings forecast and why
? Applicable √ N/A
4. Occupation of the Company's capital by the controllingshareholder or its related parties for non-operating purposes? Applicable √ N/A?No such cases in the reporting period.
5. Explanation of the board of directors, the supervisorycommittee and non-executive directors (if any) regarding the"non-standard audit opinion" for the reporting period
? Applicable √ N/A
6. Reasons for changes in accounting policies, accountingestimates and accounting methods as compared to thefinancial report for the prior year
√ Applicable ? N/A
Since 1 January 2019, the Company has implemented the revised by Ministry of Financein 2017: the Accounting Standards for Business Enterprises No. 22 -Recognition andMeasurement of Financial Instruments, the Accounting Standards for BusinessEnterprises No. 23 –Transfer of Financial Assets, the Accounting Standards for BusinessEnterprises No. 24 – Hedge Accounting, and the Accounting Standards for BusinessEnterprises No. 37 – Financial Instruments Presentation (Hereinafter referred to as the“new financial instrument standards”). According to the requirements of the new financialinstrument standards, the Company presents the relevant information of financialinstruments without retroactively adjusting the comparative financial statements. Thisaccounting policy change has been reviewed and approved by the sixth meeting of thesixth board of directors.
7. Reasons for retrospective restatement of major accountingerrors during the reporting period
? Applicable √ N/A?No such cases in the reporting period.
8. Reasons for changes in scope of the consolidated financialstatements as compared to the financial report for the prioryear
√ Applicable ? N/A
8.1 Establishment of subsidiaries
In September 2018, the Company registered and established Yanghe Hong KongDistillery Co., Ltd. in Hong Kong, which was invested in October 2019 and included in theconsolidated financial statements from October 2019.
8.2 Cancellation of subsidiaries
(2) Jiangsu Guanmeng Information Technology Co., Ltd., the holding subsidiary, wasliquidated and cancelled, and on 12 February 2019, it obtained Notice of approval forcancellation registration of the company from Suzhou Xiangcheng District MarketSupervision Administration. As of March 2019, it is no longer included in the consolidatedscope of the consolidated financial statements.
(2) Jiangsu Oubaosi International Trade Co., Ltd., the holding subsidiary, was liquidatedand cancelled. On 3 January 2019, it obtained Notice of approval for cancellationregistration of the company from Nanjing Jiangbei New District Management CommitteeMarket Supervision Administration. As of February 2019, it is no longer included in theconsolidated scope of the consolidated financial statements.
(6) Jiangsu Yanghe Packaging Co., Ltd., the holding subsidiary, was liquidated andcancelled, and on 2 February 2019, it obtained Notice of approval for cancellationregistration of the company from Suqian Municipal Administration for Industry andCommerce. As of March 2019, it is no longer included in the consolidated scope of theconsolidated financial statements.
(7) Dream Blue Haichuanhui (Shiyan) Trade and Investment Co., Ltd., the holdingsubsidiary, was liquidated and cancelled, and on 21 September 2019, it obtained Noticeof approval for cancellation registration of the company from Shiyan MunicipalAdministration Approval Bureau. As of October 2019, it is no longer included in theconsolidated scope of the consolidated financial statements.
(8) Xuzhou Huaqu Wine Development Co., Ltd., the holding subsidiary, was liquidatedand cancelled, and on 24 October 2019, it obtained Notice of approval for cancellationregistration of the company from Xuzhou Market Supervision Administration. As ofNovember 2019, it is no longer included in the consolidated scope of the consolidatedfinancial statements.
9. Engagement and disengagement of accounting firm
Accounting firm at present
Name of the domestic accounting firm
Name of the domestic accounting firm | Suyajincheng CPA LLP |
Remuneration for the domestic accounting firm (CNY ’0,000) | 190.8 |
Consecutive years of the audit serviceprovided by the domestic accounting firm
Consecutive years of the audit service provided by the domestic accounting firm | 13 |
Names of the certified public accountants from the domestic accounting firm | Kan Baoyong, Li Yan |
Consecutive years of the audit service provided by the certified public accountants | Kan Baoyong (3 years), Li Yan (1 years) |
Whether the accounting firm was changed in the current period.?? Yes √ No?
Engagement of any accounting firm for internal control audit, financial adviser or sponsor
√ Applicable ? N/A
This year, the Company hired Suyajincheng CPA LLP as the Company's internal controlaudit accounting firm. The total of CNY 530,000 of internal control audit fees were paidduring the period.
10. Possibility of listing suspension and termination afterdisclosure of this annual report
? Applicable √ N/A
11. Bankruptcy and reorganization
? Applicable √ N/A?No such cases in the reporting period.
12. Material litigation and arbitration
? Applicable √ N/A?No such cases in the reporting period.
13. Punishments and rectifications
? Applicable √ N/A?No such cases in the reporting period.
14. Credit conditions of the company as well as its controllingshareholder and actual controller? Applicable √ N/A?
15. Implementation of any equity incentive plan, employeestock ownership plan or other incentive measures foremployees? Applicable √ N/A?
16. Significant related-party transactions
16.1. Related-party transactions arising from routine operation? Applicable √ N/A?No such cases in the reporting period.
16.2. Related-party transactions regarding purchase or sales of assetsor equity interests? Applicable √ N/A?No such cases in the reporting period.
16.3. Related-party transactions arising from joint investments inexternal parties
? Applicable √ N/A?No such cases in the reporting period.
16.4. Credits and liabilities with related parties
√ Applicable □N/A?
There are no non-operational related creditor's rights and debt transactions.
16.5. Other significant related-party transactions
? Applicable √ N/A?No such cases in the reporting period.
17. Significant contracts and their execution
17.1. Trusteeship, contracting and leasing
17.1.1. Trusteeship
? Applicable √ N/A
No such cases in the reporting period.
17.1.2. Contracting
? Applicable √ N/ANo such cases in the reporting period.
17.1.3. Leasing
? Applicable √ N/ANo such cases in the reporting period.
17.2. Major guarantees
? Applicable √ N/ANo such cases in the reporting period.
17.3. Entrusted cash assets management
17.3.1. Entrust finance management
√ Applicable ? N/A
Entrust finance in the reporting period.
Unit: CNY 10, 000
Product type
Product type | Source of entrust finance | Amount | Undue closing balance | Overdue outstanding amount |
Bank finance | Owned Fund | 786,300 | 786,300 | 0 |
Trust finance | Owned Fund | 1,044,139 | 1,044,139 | 0 |
Broker finance | Owned Fund | 5,000 | 5,000 | 0 |
Other | Owned Fund | 15,000 | 0 | 0 |
Total | 1,850,439 | 1,835,439 | 0 |
Information about significant amount of individual entrust finance or high-risk entrust finance with principle nonguaranteed and poor liquidity.
√ Applicable ? N/A
Unit: CNY 10,000
Name oftrustee
Name of trustee | Trustee type | Product type | Amount | Source of funding | Commencement date | Termination date | Funds allocation | Method of Remuneration | Referenced annualized return | prospective earnings(if applicable) | Actual profit & loss for the period | Actual principal amount recovered for the period | Amount reserved for impairment (if applicable) | Whether it go through statutory procedures | Whether there will be entrust finance plans in the future | Summary and reference(if applicable) |
Zhongrong International Trust Co.,Ltd. | Trust | Zhongrong -Chengan No.26 Collective Fund Trust Plan | 13,000 | Owned fund | 15 March 2019 | 15 March 2021 | It is used to pay the transfer price of the gain right of the specific assets held by Guangzhou Wanda Culture and Tourism City Investment Co., Ltd., and the fund will eventually be used for the development and construction of the C3 block of Guangzhou Sunac Wanda City (located in the government block of Huadu District in Guangzhou) | Cash | 8.70% | 2,265.1 | 901.7 | 365.64 | 0 | Yes | Yes | |
Jiangsu Internation | Trust | Jiangsu Trust- Sunac No.26 | 5,000 | Owned fund | 26 April 2019 | 26 October | It is used for issuing loans | Cash | 9.00% | 676.85 | 306.99 | 225.66 | 0 | Yes | Yes |
Name oftrustee
Name of trustee | Trustee type | Product type | Amount | Source of funding | Commencement date | Termination date | Funds allocation | Method of Remuneration | Referenced annualized return | prospective earnings(if applicable) | Actual profit & loss for the period | Actual principal amount recovered for the period | Amount reserved for impairment (if applicable) | Whether it go through statutory procedures | Whether there will be entrust finance plans in the future | Summary and reference(if applicable) |
al Trust Co.,Ltd. | Collective Fund Trust Plan | 2020 | to Qingdao Wanda Oriental Film Capital Investment Co., Ltd., and it is used for construction of A-4-3 residential project of starlight island which is the core zone of Qingdao west coast new district | |||||||||||||
Avic Trust Co.,Ltd. | Trust | Avic Trust - Apocalypse [2019] No.106 Evergrande Chengdu Collective Fund Trust Plan | 20,000 | Owned fund | 21 June 2019 | 20 June 2020 | It is used for issuing trust loans to Chengdu Yulong No. 1 Real Estate Development Co., Ltd., and the fund is used for the expenses related to the development and construction of Evergrande Chengdu | Cash | 8.50% | 1,700 | 898.9 | 847.67 | 0 | Yes | Yes |
Name oftrustee
Name of trustee | Trustee type | Product type | Amount | Source of funding | Commencement date | Termination date | Funds allocation | Method of Remuneration | Referenced annualized return | prospective earnings(if applicable) | Actual profit & loss for the period | Actual principal amount recovered for the period | Amount reserved for impairment (if applicable) | Whether it go through statutory procedures | Whether there will be entrust finance plans in the future | Summary and reference(if applicable) |
Yulong Tianfeng project (Phase I and Phase II) | ||||||||||||||||
China Foreign Economy and Trade Trust Co., Ltd. | Trust | China Foreign Economy and Trade Trust- Fuxiang No.157 Evergrande New World Collective Fund Trust Plan | 12,000 | Owned fund | 28 June 2019 | 28 June 2020 | It is used to acquire the gain right of specific asset of Evergrande Guiyang New World 3A-4D block project, and obtain the investment income by investing the gain right of specific asset | Cash | 8.50% | 1,022.79 | 519.78 | 489.28 | 0 | Yes | Yes | |
Avic Trust Co.,Ltd. | Trust | Avic Trust - Apocalypse No.556 Tiancheng Jufu Investment Collective Fund Trust Plan | 50,000 | Owned fund | 9 July 2019 | 9 June 2020 | It is used for investment in bank deposit, inter-bank lending, bond reverse repurchase, money market fund, bond fund, exchange and inter-bank market bond, etc. | Cash | 7.50% | 3,452.05 | 1,797.95 | 0 | 0 | Yes | Yes | |
Avic Trust Co.,Ltd. | Trust | Avic Trust-Tianxin bay | 18,000 | Owned fund | 17 July 2019 | 17 January | It is used to subscribe for | Cash | 8.90% | 2,413.97 | 732.97 | 684.69 | 0 | Yes | Yes |
Name oftrustee
Name of trustee | Trustee type | Product type | Amount | Source of funding | Commencement date | Termination date | Funds allocation | Method of Remuneration | Referenced annualized return | prospective earnings(if applicable) | Actual profit & loss for the period | Actual principal amount recovered for the period | Amount reserved for impairment (if applicable) | Whether it go through statutory procedures | Whether there will be entrust finance plans in the future | Summary and reference(if applicable) |
area upgrade No.2 Collective Fund Trust Plan | 2021 | convertible bonds issued by Shenzhen Gangdi Industrial Co., Ltd.in Qianhai equity trading center. The convertible bond [2019006] is eventually used to pay for demolition fee of renewal of east area in Anhua industrial zone, the repayment of partial shareholders' loan and the daily management expenses. | ||||||||||||||
Zhongrong International Trust Co.,Ltd. | Trust | Zhongrong Trust- Shengshi Zunjue No.15 Collective Fund Trust Plan(A9) | 10,000 | Owned fund | 30 July 2019 | 29 July 2020 | It is used to transfer the equity proceeds of 100% shares of Wanda Lanzhou City | Cash | 8.20% | 820 | 345.97 | 0 | 0 | Yes | Yes |
Name oftrustee
Name of trustee | Trustee type | Product type | Amount | Source of funding | Commencement date | Termination date | Funds allocation | Method of Remuneration | Referenced annualized return | prospective earnings(if applicable) | Actual profit & loss for the period | Actual principal amount recovered for the period | Amount reserved for impairment (if applicable) | Whether it go through statutory procedures | Whether there will be entrust finance plans in the future | Summary and reference(if applicable) |
Development Co., Ltd held by Wanda Group Co., Ltd. | ||||||||||||||||
Zhongrong International Trust Co.,Ltd. | Trust | Zhongrong Trust- Shengshi Zunjue No.15 Collective Fund Trust Plan(B9) | 10,000 | Owned fund | 30 July 2019 | 30 January 2021 | It is used to transfer the equity proceeds of 100% shares of Wanda Lanzhou City Development Co., Ltd held by Wanda Group Co., Ltd. | Cash | 8.40% | 1,265.75 | 354.41 | 0 | 0 | Yes | Yes | |
CITIC Trust Co.,Ltd, | Trust | CCITIC Trust Collective Fund Trust Plan | 2,000 | Owned fund | 31 July 2019 | 31 October 2020 | It is used for issuing trust loans to Kaifeng New District Infrastructure Construction Investment Co., Ltd., and the fund is eventually used for supporting facilities project of west lake tourist scenic spot in | Cash | 8.30% | 208.3 | 69.58 | 0 | 0 | Yes | Yes |
Name oftrustee
Name of trustee | Trustee type | Product type | Amount | Source of funding | Commencement date | Termination date | Funds allocation | Method of Remuneration | Referenced annualized return | prospective earnings(if applicable) | Actual profit & loss for the period | Actual principal amount recovered for the period | Amount reserved for impairment (if applicable) | Whether it go through statutory procedures | Whether there will be entrust finance plans in the future | Summary and reference(if applicable) |
Kaifeng new district. | ||||||||||||||||
China MinSheng Trust Co., Ltd | Trust | MinSheng Trust- Zhixin No.618 Sunshine City Beijing Equity Investment Collective Fund Trust Plan | 20,000 | Owned fund | 1 August 2019 | 25 December 2020 | It is used to acquire 49% equity of Beijing Zhende Xingyun Property Co., Ltd. via capital investment and issue trust loans to the project company | Cash | 8.90% | 2,531.56 | 751.56 | 697.17 | 0 | Yes | Yes | |
Avic Trust Co.,Ltd. | Trust | Avic Trust-Apocalypse[2018]No.561 Huabao No.1 Collective Fund Trust Plan | 16,000 | Owned fund | 2 August 2019 | 1 August 2021 | It is used for issuing loans to Shenzhen Jushenghua Co., Ltd. for supplement of liquidity fund gap;It is also used to pay the construction fee of Guangzhou airport high-end storage project | Cash | 9.40% | 3,008 | 622.2 | 576.88 | 0 | Yes | Yes | |
China MinSheng Trust Co., Ltd | Trust | MinSheng Trust- Zhixin No.491 Kaisa City Upgrade | 10,000 | Owned fund | 6 August 2019 | 5 July 2021 | It is used for repayment of shareholder loans and the | Cash | 9.10% | 1,742.71 | 366.49 | 0 | 0 | Yes | Yes |
Name oftrustee
Name of trustee | Trustee type | Product type | Amount | Source of funding | Commencement date | Termination date | Funds allocation | Method of Remuneration | Referenced annualized return | prospective earnings(if applicable) | Actual profit & loss for the period | Actual principal amount recovered for the period | Amount reserved for impairment (if applicable) | Whether it go through statutory procedures | Whether there will be entrust finance plans in the future | Summary and reference(if applicable) |
Collective Fund Trust Plan | development and construction by subsidiaries of Kaisa Real Estate (Shanghai) Co., Ltd. | |||||||||||||||
China Foreign Economy and Trade Trust Co., Ltd. | Trust | China Foreign Economy and Trade Trust- Furong No.158 Taiyuan Evergrande Jinbi Tianxia Collective Fund Trust Plan | 15,000 | Owned fund | 9 August 2019 | 9 February 2021 | It is used for issuing trust loans to Evergrande Real Estate Group Shanxi Co., Ltd., and it is used for the development and construction of Taiyuan Evergrande Jinbi Tianxia project (Phase I) | Cash | 8.50% | 1,921.23 | 503.01 | 464.59 | 0 | Yes | Yes | |
China MinSheng Trust Co., Ltd | Trust | MinSheng Trust- Zhixin No.651 Baoenng Investment Trust Loan Collective Fund Trust Plan | 10,000 | Owned fund | 15 August 2019 | 15 August 2020 | It is used for daily working capital needs and financial institution financing formed by the supplement of daily working capital of | Cash | 8.70% | 872.38 | 328.93 | 314.63 | 0 | Yes | Yes |
Name oftrustee
Name of trustee | Trustee type | Product type | Amount | Source of funding | Commencement date | Termination date | Funds allocation | Method of Remuneration | Referenced annualized return | prospective earnings(if applicable) | Actual profit & loss for the period | Actual principal amount recovered for the period | Amount reserved for impairment (if applicable) | Whether it go through statutory procedures | Whether there will be entrust finance plans in the future | Summary and reference(if applicable) |
Shenzhen Baoneng Investment Group Co., Ltd and its subsidiaries | ||||||||||||||||
Huatai Securities | Broker | Huatai Securities Huanyi No.19066 beneficiary certificate | 5,000 | Owned fund | 22 August 2019 | 20 August 2020 | Non-fixed income | Cash | 5.10% | 254.3 | 91.25 | 0 | 0 | Yes | Yes | |
Avic Trust Co.,Ltd. | Trust | Avic Trust.Apocalypse [2018]No.126 Evergrande Fujian Real Estate Investment Collective Fund Trust Plan | 10,000 | Owned fund | 29 August 2019 | 28 August 2020 | It is used to issue trust loans to Putian Hengsheng Real Estate Co., Ltd. The trust loans are used for repayment of the development and construction loans invested by its shareholders | Cash | 8.00% | 800 | 212.78 | 0 | 0 | Yes | Yes | |
CITIC Trust Co.,Ltd, | Trust | CITIC Trust- Jiahe No.154 Evergrande Guiyang Zhongyu Loan Collective Fund | 20,000 | Owned fund | 29 August 2019 | 28 February 2021 | It is used for issuing trust loans to Guiyang Zhongyu Real Estate | Cash | 8.20% | 2,466.74 | 557.15 | 512.41 | 0 | Yes | Yes |
Name oftrustee
Name of trustee | Trustee type | Product type | Amount | Source of funding | Commencement date | Termination date | Funds allocation | Method of Remuneration | Referenced annualized return | prospective earnings(if applicable) | Actual profit & loss for the period | Actual principal amount recovered for the period | Amount reserved for impairment (if applicable) | Whether it go through statutory procedures | Whether there will be entrust finance plans in the future | Summary and reference(if applicable) |
Trust Plan | Development Co., Ltd., and for the development and construction of the central park BE block and central square ACD block under the name of Guiyang Zhongyu | |||||||||||||||
Chongqing Trust Co.,Ltd. | Trust | Chongqing Trust- Gusu No.2 Collective Fund Trust Plan (Phase IV) | 10.000 | Owned fund | 30 August 2019 | 23 August 2020 | It is used for issuing trust loans to Suzhou Wuxiang Property Co., Ltd., and it is eventually used for the development and construction of Block 59, South Changnan Road and East Wuxing Road, Suxiang Cooperation zone, | Cash | 7.80% | 767.18 | 262.85 | 239.34 | 0 | Yes | Yes |
Name oftrustee
Name of trustee | Trustee type | Product type | Amount | Source of funding | Commencement date | Termination date | Funds allocation | Method of Remuneration | Referenced annualized return | prospective earnings(if applicable) | Actual profit & loss for the period | Actual principal amount recovered for the period | Amount reserved for impairment (if applicable) | Whether it go through statutory procedures | Whether there will be entrust finance plans in the future | Summary and reference(if applicable) |
Xiangcheng District, Suzhou city, Jiangsu province, and repayment of shareholders’ loans | ||||||||||||||||
Chongqing Trust Co.,Ltd. | Trust | Chongqing Trust- Gusu No.2 Collective Fund Trust Plan (Phase V) | 10.000 | Owned fund | 30 August 2019 | 23 August 2021 | It is used for issuing trust loans to Suzhou Wuxiang Property Co., Ltd., and it is eventually used for the development and construction of Block 59, South Changnan Road and East Wuxing Road, Suxiang Cooperation zone, Xiangcheng District, Suzhou city, Jiangsu province, and repayment of | Cash | 8.00% | 1,586.85 | 269.59 | 245.48 | 0 | Yes | Yes |
Name oftrustee
Name of trustee | Trustee type | Product type | Amount | Source of funding | Commencement date | Termination date | Funds allocation | Method of Remuneration | Referenced annualized return | prospective earnings(if applicable) | Actual profit & loss for the period | Actual principal amount recovered for the period | Amount reserved for impairment (if applicable) | Whether it go through statutory procedures | Whether there will be entrust finance plans in the future | Summary and reference(if applicable) |
shareholders’ loans | ||||||||||||||||
CITIC Trust Co.,Ltd, | Trust | CITIC Trust- Beijing Evergrande Loan Collective Fund Trust Plan | 5,000 | Owned fund | 3 September 2019 | 2 September 2020 | It is used for issuing trust loans to Beijing Fuhua Real Estate Development Co., Ltd., and for the follow-up development and construction of the Fuhua block (Phase IV) | Cash | 7.90% | 395 | 128.78 | 118.50 | 0 | Yes | Yes | |
China MinSheng Trust Co., Ltd | Trust | MinSheng Trust- Zhongmin Yongfeng No.1 Collective Fund Trust Plan | 50,000 | Owned fund | 10 September 2019 | 9 June 2020 |
Cash | 5.90% | 2,206.44 | 905.21 | 735.48 | 0 | Yes | Yes | |||||||||
Zhongrong International Trust Co.,Ltd. | Trust | Zhongrong Trust- Jida No.15 Collective Fund | 12,000 | Owned fund | 25 September 2019 | 24 September 2020 | It is used for issuing trust loans to Qingdao Linshi | Cash | 8.10% | 972 | 258.31 | 229.02 | 0 | Yes | Yes |
Name oftrustee
Name of trustee | Trustee type | Product type | Amount | Source of funding | Commencement date | Termination date | Funds allocation | Method of Remuneration | Referenced annualized return | prospective earnings(if applicable) | Actual profit & loss for the period | Actual principal amount recovered for the period | Amount reserved for impairment (if applicable) | Whether it go through statutory procedures | Whether there will be entrust finance plans in the future | Summary and reference(if applicable) |
Trust Plan | Huafu Real Estate Co., Ltd., and for the payment of relocation compensation fees and the construction of resettlement houses for the old village reconstruction project in Zhujiawa community, Qingdao | |||||||||||||||
Zhongrong International Trust Co.,Ltd. | Trust | Zhongrong Trust- Xingchuang No.107 Collective Fund Trust Plan | 10,000 | Owned fund | 27 September 2019 | 26 September 2020 | It is used to transfer the gain right of 48.99% equity of Quanzhou Shimao Ruiying Property Co., Ltd. held by Zhuhai Hengqin Mingsheng Investment Enterprise (Limited Partnership) | Cash | 8.00% | 800 | 208.22 | 184.11 | 0 | Yes | Yes | |
Chongqing Trust | Trust | Chongqing Trust- Gusu | 15,000 | Owned fund | 27 September | 7 August 2021 | It is used for issuing trust | Cash | 7.80% | 2,179.73 | 304.52 | 269.26 | 0 | Yes | Yes |
Name oftrustee
Name of trustee | Trustee type | Product type | Amount | Source of funding | Commencement date | Termination date | Funds allocation | Method of Remuneration | Referenced annualized return | prospective earnings(if applicable) | Actual profit & loss for the period | Actual principal amount recovered for the period | Amount reserved for impairment (if applicable) | Whether it go through statutory procedures | Whether there will be entrust finance plans in the future | Summary and reference(if applicable) |
Co.,Ltd. | No.3 Collective Fund Trust Plan | 2019 | loans to Suzhou Evergrande Real Estate Development Co., Ltd., and eventually used for the development and construction of Block 60, East Fangqiao Road and North of Chunqiu Road, Huangtai town, Xiangcheng District, Suzhou city, Jiangsu province, and the repayment of shareholders’ loans | |||||||||||||
Avic Trust Co.,Ltd. | Trust | Avic Trust - Apocalypse No.556 Tiancheng Jufu Investment Collective Fund Trust Plan | 20,000 | Owned fund | 29 September 2019 | 10 June 2020 | It is used for investment in bank deposit, inter-bank lending, bond reverse repurchase, money market | Cash | 7.50% | 1,047.95 | 382.19 | 0 | 0 | Yes | Yes |
Name oftrustee
Name of trustee | Trustee type | Product type | Amount | Source of funding | Commencement date | Termination date | Funds allocation | Method of Remuneration | Referenced annualized return | prospective earnings(if applicable) | Actual profit & loss for the period | Actual principal amount recovered for the period | Amount reserved for impairment (if applicable) | Whether it go through statutory procedures | Whether there will be entrust finance plans in the future | Summary and reference(if applicable) |
fund, bond fund, exchange and inter-bank market bond, etc. | ||||||||||||||||
China MinSheng Trust Co., Ltd | Trust | MinSheng Trust- Zhixing No.655 Kaisa Nanjing Project Loan Collective Fund Trust Plan | 10,000 | Owned fund | 16 October 2019 | 16 January 2021 | It is used to issue loans to Nanjing Kaisa Jiayu Real Estate Development Co., Ltd., and for repayment of shareholders’ loans generated by Yanranju Project and the subsequent development and construction | Cash | 9.00% | 1,129.32 | 187.4 | 0 | 0 | Yes | Yes | |
China Foreign Economy and Trade Trust Co., Ltd. | Trust | China Foreign Economy and Trade Trust- Furong No.159 Evergrande Harbin Junruifu Project Collective Fund Trust Plan | 12,000 | Owned fund | 23 October 2019 | 23 October 2020 | It is used for issuing trust loans to Harbin Pengye Real Estate Development Co., Ltd., for the development and | Cash | 8.30% | 998.73 | 188.28 | 160.47 | 0 | Yes | Yes |
Name oftrustee
Name of trustee | Trustee type | Product type | Amount | Source of funding | Commencement date | Termination date | Funds allocation | Method of Remuneration | Referenced annualized return | prospective earnings(if applicable) | Actual profit & loss for the period | Actual principal amount recovered for the period | Amount reserved for impairment (if applicable) | Whether it go through statutory procedures | Whether there will be entrust finance plans in the future | Summary and reference(if applicable) |
construction of the Harbin Junruifu Project and the repayment of shareholders’ loans | ||||||||||||||||
Minmetals International Trust Co.,Ltd. | Trust | Minmetals International Trust- Hengxin Gongzhu No.231- Kunyi No.11 Collective Fund Trust Plan | 18,000 | Owned fund | 15 November 2019 | 28 October 2020 | It is used to transfer the gain right of specific asset formed by the "Evergrande Sanshui Zilin Garden" developed by Foshan Sanshui Yingsheng Real Estate Development Co., Ltd and it is eventually used for the development and construction of Sanshui Zilin Garden( Phase I, II,IV) in Sanshui District, Foshan, Guangdong | Cash | 8.60% | 1,475.9 | 195.09 | 148.44 | 0 | Yes | Yes |
Name oftrustee
Name of trustee | Trustee type | Product type | Amount | Source of funding | Commencement date | Termination date | Funds allocation | Method of Remuneration | Referenced annualized return | prospective earnings(if applicable) | Actual profit & loss for the period | Actual principal amount recovered for the period | Amount reserved for impairment (if applicable) | Whether it go through statutory procedures | Whether there will be entrust finance plans in the future | Summary and reference(if applicable) |
province | ||||||||||||||||
Zhongrong International Trust Co.,Ltd. | Trust | Zhongrong Trust- Fengteng No.56 Collective Fund Trust Plan | 16,000 | Owned fund | 15 November 2019 | 15 November 2021 | It is used for issuing operating property loans to Nanchang Wanda City Investment Co., Ltd. | Cash | 8.70% | 2,787.81 | 175.43 | 133.48 | 0 | Yes | Yes | |
Avic Trust Co.,Ltd. | Trust | Avic Trust - Apocalypse No.556 Tiancheng Jufu Investment Collective Fund Trust Plan | 20,000 | Owned fund | 4 December 2019 | 4 June 2020 | It is used for investment in bank deposit, inter-bank lending, bond reverse repurchase, money market fund, bond fund, exchange and inter-bank market bond, etc. | Cash | 7.90% | 792.16 | 116.88 | 0 | 0 | Yes | Yes | |
China MinSheng Trust Co., Ltd | Trust | MinSheng Trust- Zhongmin Yongfeng No.1 Collective Fund Trust Plan | 50,000 | Owned fund | 6 December 2019 | 2 June 2020 | It is used for Investment in bonds traded in the exchange and in the inter-bank market,Money market instruments, money funds, | Cash | 5.90% | 1,446.71 | 202.05 | 0 | 0 | Yes | Yes |
Name oftrustee
Name of trustee | Trustee type | Product type | Amount | Source of funding | Commencement date | Termination date | Funds allocation | Method of Remuneration | Referenced annualized return | prospective earnings(if applicable) | Actual profit & loss for the period | Actual principal amount recovered for the period | Amount reserved for impairment (if applicable) | Whether it go through statutory procedures | Whether there will be entrust finance plans in the future | Summary and reference(if applicable) |
bond funds, etc | ||||||||||||||||
Chongqing Trust Co.,Ltd. | Trust | Chongqing Trust- Qirui No.10 Collective Fund Trust Plan | 15,000 | Owned fund | 12 December 2019 | 8 May 2021 | It is used for participating in Chongqing Trust- Hongrui No.6 Collective Fund Trust Plan | Cash | 7.90% | 1,665.49 | 61.68 | 0 | 0 | Yes | Yes | |
CITIC Trust Co.,Ltd, | Trust | CITIC Trust- Jiahe No.116 Sunac Tianjin Loan Collective Fund Trust Plan | 5,000 | Owned fund | 19 December 2019 | 19 December 2020 | It is used for issuing trust loans to Sunac North China Real Estate Group Co., Ltd., and for the development, construction and operation expenses of residence project in Tianjin Dongli Sunac Park | Cash | 7.80% | 391.07 | 12.82 | 0 | 0 | Yes | Yes | |
Avic Trust Co.,Ltd. | Trust | Avic Trust - Apocalypse No.556 Tiancheng Jufu Investment Collective Fund Trust Plan | 50,000 | Owned fund | 20 December 2019 | 20 May 2020 | It is used for investment in bank deposit, inter-bank lending, bond reverse repurchase, money market fund, bond | Cash | 7.70% | 1,603.29 | 116.03 | 0 | 0 | Yes | Yes |
Name oftrustee
Name of trustee | Trustee type | Product type | Amount | Source of funding | Commencement date | Termination date | Funds allocation | Method of Remuneration | Referenced annualized return | prospective earnings(if applicable) | Actual profit & loss for the period | Actual principal amount recovered for the period | Amount reserved for impairment (if applicable) | Whether it go through statutory procedures | Whether there will be entrust finance plans in the future | Summary and reference(if applicable) |
fund, exchange and inter-bank market bond, etc. | ||||||||||||||||
Total | 574,000 | -- | -- | -- | -- | -- | -- | 49,667.36 | 13,396.22 | -- | 0 | -- | -- | -- |
Entrust finance expected to be failed to recover principle or other situation leading to impairment? Applicable √ N/A
17.3.2 Entrust loans
? Applicable √ N/ANo such cases in the reporting period.
17.4 Other significant contracts
? Applicable √ N/ANo such cases in the reporting period.
18. Social responsibilities
18.1 Information about taking social responsibilities
The information about taking social responsibilities disclosed in 2019 Annual Social Responsibilities Report in detail on www.cninfo.com.cn on 29 April2020.
18.2 Information about targeted poverty alleviation
18.2.1 Targeted poverty alleviation plan
According to the call of Suqian municipal party committee and municipal government on poverty alleviation with the work of "guacun baohu" and"three into three help", the Company actively responded and quickly implemented the relevant requirements with practical actions to practice the spiritof enterprise and take bravely social responsibility.
According to the overall work arrangement of "guacun baohu" by Suqian municipalgovernment, the Company supports Qiuzhuang village in Zhenglou branch, Yanghe newdistrict and is responsible for the assistance work for 177 low-income households inDaguo village and Taiping village, Zhenglou branch, among which 88 households are inTaiping village and 89 in Daguo village. The Company earnestly implements the spirit ofthe 19th National Congress of the Communist Party of China and regards alleviatingpoverty precisely and quickly as its own duty. Combined with the local actual condition ofZhenglou branch, the Company makes the support plan carefully to complete the supportmission. It promotes the rural development, and enhances the farmers' income,strengthens the relationship between cadres and masses, and makes due contributionsto “liang ju yi gao” work.
In 2020, the Company will not stop poverty alleviation until there are no poor householdsin the branch. The Company firmly sticks to responsibility, remains true to originalaspiration with a clear goal and makes greater alleviation efforts. The Companyintegrates resources from all sides, creates a new situation for poverty alleviation,practices the entrepreneurial spirit of "serving the country and serving the people", andshows that the Company has the courage to take responsibilities and is good at it.
18.2.2 Summary of annual targeted poverty alleviation
In 2019, based on the enterprise operation strategy and poverty alleviation planning,combined with local cultural and environmental conditions of Qiuzhuang village inZhenglou branch, Yanghe new district. The Company made good use of the landresources of Qiuzhuang village actively and helped to carry out the land conversionproject. The Company also carried out scientific visits and overall analysis with big datamanagement via Sunlight Poverty Alleviation APP. The Company positively conductedpoverty alleviation for villages and low-income households. Each task for "guacun baohu"was completed successfully in 2019. The average annual income of low-income farmerspaired by the Company has exceeded CNY 6,000 and they have been out of poverty.The collective economic income of Qiuzhuang village paired by the Company reachedCNY 475,000 in 2019, which completed annual task beyond the requirements. TheCompany also continued to provide CNY 2 million of poverty alleviation and educationalfunds for the "masses" of the city, and won the "Suqian special contribution award" again.It made positive contributions to the city's poverty alleviation.
18.2.3 Poverty alleviation achievement
Indicator
Indicator | Unit | Amount/Implementation situation |
A.Overall situation | —— | —— |
Including:1.Fund | CNY 10,000 | 220 |
2.Goods converted into cash | CNY 10,000 | 12 |
3.Establishing card for archives of poor people out of poverty | Person | 718 |
B. Input by project | —— | —— |
1.Industrial development | —— | —— |
2.Transfer and employment | —— | —— |
3.Removal and relocation | —— | —— |
4.Educational poverty alleviation | —— | —— |
Including: 4.1 investment amount to subsidize poor students | CNY 10,000 | 200 |
5.Health poverty alleviation | —— | —— |
6.Ecological protection
6.Ecological protection | —— | —— |
7.Basic guarantee | —— | —— |
8.Social poverty alleviation | —— | —— |
8.2 investment amount of fixed-point poverty alleviation work | CNY 10,000 | 12 |
9.Other project | —— | —— |
Including:9.1.Item | Item | 2 |
9.2.Input amount | CNY 10,000 | 20 |
9.3. The number of registered impoverished people to be out of poverty | Person | 718 |
C. Awards(content and level) | —— | —— |
Suqian | Special contribution award |
18.2.4 Follow-up poverty alleviation plan
In 2020, the Company will continue to consolidate the village-level collective economy,consolidate the income of low-income farmers, systematically plan public welfare andcontinue to build a public-spirited corporate image.The Company will improve production and marketing channel and consolidate the villagecollective economy. In 2020, the Company will continue to strengthen the cooperationwith the "two committees" of the village to actively promote the land transfer project ofQiuzhuang village. It plans to invest another CNY 200,000 in 2020 to help the collectivetransfer land of more than 200 mu of Qiuzhuang village for the establishment or jointestablishment of food planting base. In addition, in order to further solve the problem ofselling farmers' agricultural products, the Company will purchase the grain from thevillage's planting base on the same market price and standard.The Company will intensify poverty alleviation visits and consolidate farmers' incomes.Party organizations at all level will play an important role as a fighting fortress. TheCompany will select the leading cadres with excellent quality and work style, insist on theresponsibility to the person, to the branch, further clarify the concept of "help who" and"who help", stabilize the pair relationship, standardize the poverty alleviation workmechanism. The Company will adhere to walking into village and visiting householdsregularly with high-quality information collection and refinement of poverty alleviation.The Company will ascertain the actual situation and find out problems in the work. Itmakes sure that the policy can be implemented precisely and every low-income familycan be helped.
18.3 Information about environment protection
Whether the listed company and its subsidiaries belong to heavy polluting industries prescribed by the environmental protection departmentsYes
Company
name
Company name | Name of main pollutant and particular pollutant | Discharge type | Amount of discharge outlet | Distribution of discharge outlet | Emission concentration | Pollution discharge standard | Total emission | Approved total emission | Excessive discharge |
Jiangsu Yanghe Brewery Joint-Stock Co., Ltd. | COD Ammonia nitrogen Total phosphorus Total nitrogen | Indirect discharge | 1 | Within site | COD:74.2mg/L;Ammonia nitrogen:0.57mg/L;Total phosphorus:2.1mg/L; Total nitrogen:27.8mg/L | COD:400mg/L;Ammonia nitrogen :30mg/L;Total phosphorus: 3mg/L;Total nitrogen: 50mg/L | COD:128.24 ton; Ammonia nitrogen:0.99 ton;Total phosphorus:3.63 tons; Total nitrogen:48.04 tons | COD:1.018 ton per day;Ammonia nitrogen:0.060 tons per day;Total phosphorus:0.271 tons per day; Total nitrogen:0.023 tons per day | No |
Jiangsu Shuanggou Distillery Stock Co.,Ltd. | COD Ammonia nitrogen Total phosphorus Total nitrogen | Indirect discharge | 2 | New and old factory area | COD:100mg/L;Ammonia nitrogen:5mg/L;Total phosphorus:3 mg/L; Total nitrogen:25 mg/L | COD:400mg/L;Ammonia nitrogen:35mg/L;Total phosphorus:8 mg/L;Total nitrogen:45 mg/L | COD:65.48 tons; Ammonia nitrogen :3.27 tons; Total phosphorus:1.96 mg/L;Total nitrogen:16.37 mg/L | COD:356.48 tons per year;Ammonia nitrogen:31.192 tons per year; Total phosphorus:7.1296 tons per year; Total nitrogen:40.104 tons per year | No |
Jiangsu Yanghe Brewery Joint-Stock Co., Ltd. Siyang Branch | COD Ammonia nitrogen Total phosphorus Total nitrogen | Indirect discharge | 1 | Within site | COD:150 mg/L;Ammonia nitrogen :2.4 mg/L;Total phosphorus:2.8 mg/L; Total nitrogen:23 mg/L | COD:400mg/L;Ammonia nitrogen :30mg/L;Total phosphorus:3 mg/L; Total nitrogen:40 mg/L | COD:119.8 tons; Ammonia nitrogen :1.916 tons; Total phosphorus:2.23 mg/L;Total nitrogen:18.37 mg/L | COD:672 tons per year;Ammonia nitrogen:42 tons per year | No |
Guizhou Guijiu | COD Ammonia | Direct discharge after treatment up | 1 | Within site | COD:40.5 mg/L;Ammonia | COD;100mg/L;Ammonia | COD:2.009 tons;Ammonia | COD:2.057 tons per year;Ammonia | No |
Companyname
Company name | Name of main pollutant and particular pollutant | Discharge type | Amount of discharge outlet | Distribution of discharge outlet | Emission concentration | Pollution discharge standard | Total emission | Approved total emission | Excessive discharge |
Co.,Ltd. | nitrogen Sulfur dioxide | to the standards | nitrogen:1.19 mg/L;Sulfur dioxide:6mg/m? | nitrogen:15mg/L;Sulfur dioxide :50mg/m? | nitrogen:0.059 tons ;Sulfur dioxide :0.00121 tons | nitrogen:0.308 tons per year | |||
Hubei Lihuacun Distillery Co.,Ltd. | COD Ammonia nitrogen | Indirect discharge | 1 | Within site | COD:132.0 mg/L;Ammonia nitrogen:14.1mg/L | COD:400mg/L;Ammonia nitrogen:30mg/L | COD:0.624 tons ;Ammonia nitrogen:0.067 tons | COD:14.2 ton per year;Ammonia nitrogen:1.42 tons per year | No |
Construction and operation of pollution prevention and control facilities
(1) Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.: ①The sewage treatment station’s designed capacity is 10,000 tons per day. The project totalinvestment is CNY 96 million and it covers an area of 19,000 square meters. The sewage treatment adopts physical treatment method, chemicaltreatment method and anaerobic biological treatment method, aerobic biological treatment method, good oxygen treatment method, which achievesthe treatment of high-concentration waste water of 250 tons per hour. It implements the "Fermentation Alcohol and Liquor Industrial PollutantsEmission Standards CB27631-2011" Indirect Emissions Standards. ② In 2019, the sewage treatment station implements efficient investment itemupgrade project, mainly including machine material consumption and maintenance of rain and sewage diversion pipe network in the factory etc. Thetotal investment is CNY 11.39 million. The Company comprehensively improved the basic management level of water and sewage diversion in thefactory, precisely implemented fine environmental protection operation, and comprehensively utilized 83,700 tons of self-produced steam throughoutthe year.
(2) Jiangsu Shuanggou Distillery Stock Co.,Ltd.: ①The sewage treatment station in Shuanggou Distillery New Area was completed with an investmentof CNY 42.5 million and an annual operating cost of CNY 13 million. The sewage treatment station inlet COD and ammonia nitrogen concentration areabout 10000mg/l and 185mg/l respectively. The effluent COD and ammonia nitrogen concentration are about 100mg/l (the discharge standard is400mg/l) and 5mg/l (the discharge standard is 35mg/l), with implementation of "Shuanggou town sewage treatment plant takeover standards". ②
Shuanggou Distillery has set up a hazardous waste warehouse to collect hazardous waste generated in production and living. The warehouse isdivided into: waste battery, desulfurizer, solid waste agent, liquid waste agent, daylight lamp tube, desulfurizer and other areas for classified storageso as to prevent cross-contamination. Shuanggou Distillery shall also declare the hazardous waste information through the dynamic managementsystem of hazardous waste in Jiangsu province, and regularly submit the hazardous waste to qualified companies for legal disposal.
(3) Jiangsu Yanghe Brewery Joint-Stock Co., Ltd. Siyang Branch: ① The sewage treatment station covers an area of about 15,000 square meters,with a total investment of CNY 50 million. The designed treatment capacity is 6000 tons per day. In terms of process treatment, EGSB+AAO+deeptreatment technology is adopted. The high-concentration waste water can be treated up to 250 tons per hour. After treatment, all indicators reachedthe indirect emission standard of "Fermented Alcohol and Liquor Industrial Pollutant Emission Standard CB27631-2011". ② In 2019, Siyang sewagetreatment station ran efficiently. There were several projects with a total investment of CNY 10.0393 million, mainly including year-round onlinemonitoring equipment, anaerobic inlet pipeline adjustment, pipeline intelligent monitoring, fan matching upgrade and pharmaceutical procurement. Theannual output of biogas in the anaerobic treatment unit was 6.931 million cubic meters and that of steam was 94,200 tons.
(4) Guizhou Guijiu Co.,Ltd.: ① The factory is equipped with a sewage treatment system to treat production and household waste water. The sewagetreatment system has a treatment capacity of 250 tons per day. The discharge of waste water shall be in accordance with the Discharge Standards forWater Pollutants in Fermented Alcohol and Liquor Industry GB27631-2011 Table 2 Emission Standards. At the same time, an online detection systemis installed and the facilities are in good condition. ② The boiler operates with natural gas, and the waste gas is discharged directly. The exhaust gasemission shall be in accordance with the "Boiler Air Pollutant Emission Standard" (GB13271-2014) Table 2 Gas Boiler Limited Discharge Standard .
③ The solid waste (distillers) generated in the production is all processed by a third-party qualified company, and the treatment method is integratedutilization for the production of fertilizer. ④ Noise is mainly due to Quyao crusher, boiler room fan, packaging workshop, power distribution. Theequipment is installed with absorption treatment or sound insulation in the room to reduce the impact of noise. The Company uses anaerobic UASB/good oxygen (contact oxidation) to treat mixed sewage in production and living.
(5) Hubei Lihuacun Distillery Co.,Ltd.: The waste water is treated by combined process in the factory; Each workshop is equipped with mufflers andindependent machine room with the independent foundation and sound absorption material and sound insulation material for reducing the noise; Solidwaste is treated by comprehensive treatment method.
Environmental impact assessment of construction projects and other administrative permits for environmental protectionThe Company and each subsidiary’s construction project environmental impact reports and "three at the same time" acceptance materials, pollutantdischarge permit and other materials are complete.
Emergency plan for environmental emergenciesThe Company and its subsidiaries have made emergency plans for environmentalemergencies, among which the Company, Shuanggou Distillery and Siyang Branch ofthe Company have filed with Jiangsu Province Environmental Protection Department.The file numbers are 321300-2019-008-L, 32000020140604, 32000020140594respectively. The emergency plan of environmental emergencies of Guijiu Company hasbeen put on record in the local environmental protection administration and managed byGuizhou Province Environmental Emergencies Center. The emergency plan ofenvironmental emergencies of Lihuacun Distillery has been put on record in the localenvironmental protection administration.
Environmental self-monitoring programmeThe Company and its subsidies have all developed their own environmental monitoringprograms and filed them with the competent authorities according to requirements oflocal environmental protection department. Everyday, The Company, ShuanggouDistillery, Siyang Branch of the Company conduct self-monitoring of the pollutionindicators of COD, ammonia nitrogen, total phosphorus, total nitrogen, PH, etc., andregularly entrust a third party to conduct testing and issue a report. Guijiu Companyregularly entrusts a third party to conduct testing and issue a report. There are severalequipment installed in sewage outlet for automatic online monitoring COD, ammonianitrogen, total phosphorus, total nitrogen, PH, flow meter.
Other environmental information that should be made publicN/A
Other environmental related informationThe Company won the honorary title of "2019 National Green Factory" and the honorarytitle of "2019 Water Saving Enterprise in Jiangsu province".
19. Other significant events
√ Applicable ? N/A
1. The Company indirectly held partnership share of Jiangsu Jiequan Emerging IndustryDevelopment Fund (Limited Partnership) via Jiangsu Xinghe Investment ManagementCo.,Ltd. and Nanjing Xingnahe Venture Capital Investment partnership (LimitedPartnership). Jiangsu Jiequan Emerging Industry Development Fund (LimitedPartnership) completed fund-raising and put on record in AMAC. The record numbers areSCF515 and SCL005. It was disclosed in detail on the Announcement of cooperativeinvestment with professional investment institutions (No: 2017-021) on 30 December2017 and the Announcement of progress of cooperative investment with professionalinvestment institutions (No: 2018-011) on 12 April 2018.
2. Su Wine Wealth Management Co., Ltd., a wholly-owned subsidiary of the Company,subscribed the partnership shares of Suzhou Danqing Phase II InnovativePharmaceutical Industry Investment Partnership (limited partnership). Danqing Phase IIcompleted fund-raising and put on record in AMAC. The record number is SED720. Fordetails, please refer to the Announcement on cooperation and investment withprofessional investment institutions (Announcement No: 2018-021) and Announcementon cooperation, Announcement on cooperation and investment with professionalinvestment institutions (Announcement No: 2018-030) and Announcement on
cooperation and investment with professional investment institutions (Announcement No:
2019-004) disclosed by the Company on 28 April 2018, 16 November 2018 and 11 April2019 respectively.
3. Jiangsu Yanghe Investment Management Co.,Ltd. subscribed the partnership sharesof Panmao (Shanghai) Investment Center (limited partnership). For details, please referto the Announcement on cooperation and investment with professional investmentinstitutions (Announcement No: 2018-025) disclosed by the Company on 22 June 2018.
4. Jiangsu Yanghe Investment Management Co.,Ltd. subscribed the partnership sharesof Jiangsu Zijin Hongyun Health Industry Investment Partnership (limited partnership),Suqian Yida Industry Venture Capital Fund (limited partnership), and Hunan HuayeTiancheng Venture Capital Partnership (limited partnership). For details, please refer tothe Announcement on cooperation and investment with professional investmentinstitutions (Announcement No: 2019-002) disclosed by the Company on 28 March 2019,Announcement on participating in Suqian Yida Industrial Venture Capital Fund andrelated transaction (Announcement No: 2019-012) disclosed by the Company on 30 April2019, and Announcement on the subscription of Hunan Huaye Tiancheng VentureCapital Fund (Announcement No: 2019-021) disclosed by the Company on 6 September2019.
20. Significant events of subsidiaries
? Applicable √ N/A
Section VI Changes in Shares and Information about Shareholders
1. Changes in shares
1.1 Changes in shares
Unit:Share
Before | Changes in this year ( + , - ) | After | |||||||
Number | Proportion | Issuance of new shares | Bonus shares | Capitalization of capital reserves | Other | Subtotal | Number | Proportion | |
I.Restricted shares | 258,502,176 | 17.15% | 0 | 0 | 0 | -453,750 | -453,750 | 258,048,426 | 17.12% |
1.Shares held by the state | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
2.Shares held by state-owned corporations | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
3.Shares held by other domestic investors | 258,502,176 | 17.15% | 0 | 0 | 0 | -453,750 | -453,750 | 258,048,426 | 17.12% |
Including:Shares held by domestic corporations | 249,480,000 | 16.55% | 0 | 0 | 0 | 0 | 0 | 249,480,000 | 16.55% |
Shares held by domestic individuals | 9,022,176 | 0.60% | 0 | 0 | 0 | -453,750 | -453,750 | 8,568,426 | 0.57% |
4.Shares held by foreign investors | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
Including: Shares held by foreign corporations | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
Shares held by foreign individuals | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
II.Non-restricted shares | 1,248,485,824 | 82.85% | 0 | 0 | 0 | 453,750 | 453,750 | 1,248,939,574 | 82.88% |
1.CNY common shares | 1,248,485,824 | 82.85% | 0 | 0 | 0 | 453,750 | 453,750 | 1,248,939,574 | 82.88% |
2.Domestically listed foreign shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
3.Overseas listed foreign shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
4.Others | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
III.Total shares | 1,506,988,000 | 100.00% | 0 | 0 | 0 | 0 | 0 | 1,506,988,000 | 100.00% |
Reasons for the change in shares
√ Applicable ? N/A
The reasons for the change of the Company's shares are mainly caused by changes of the locked shares held by the Company's executives.Approval of share changes? Applicable √N/ATransfer of share ownership? Applicable √N/AImplementation progress of share repurchase
√ Applicable ? N/A
On October 29, 2019, the sixth session of the ninth meeting of the board of directors was held. It reviewed and approved the plan about repurchasingpart of the social public shares, and agreed to use its own funds to repurchase shares through centralized bidding. The total amount of repurchase isnot less than CNY 1 billion (including) and not more than CNY 1.5 billion (including). The repurchase price is not more than CNY 135.00 per share(including). The period of repurchases is within 12 months since the repurchase plan is reviewed and approved by the sixth session of the ninthmeeting of the board of directors. This share repurchased is used to implement equity incentive or employee stock ownership plan for core keyemployees of the Company.The repurchase affairs was disclosed in details in “About the plan of share repurchase from part of public shares”(Announcement No. 2019-026), “Repurchase report” (Announcement No.2019-028), etc. on China Securities Journal, Shanghai Securities News andSecurities Times, Securities Daily and www.cninfo.com.cn on 30 October 2019 and on 5 November 2019.From the repurchase plan disclosed to 31 December 2019, the Company has not implemented the share repurchase.
Implementation progress of share repurchase reduction through centralized bidding? Applicable √N/A
Effects of changes in shares on the basic EPS, diluted EPS, net assets per shareattributable to common shareholders of the Company and other financial indexes overthe last year and the last reporting period?Applicable √N/A
Other contents that the Company considers necessary or is required by the securitiesregulatory authorities to disclose?Applicable √N/A
2. Changes in restricted shares
√Applicable ?N/A
Unit:Share
Name ofshareholder
Name of shareholder | Opening restricted shares | Increase in this period | Unlocked in this period | Closing restricted shares | Reason | Date of unlocking |
Zheng Bujun | 48,750 | 0 | -3,750 | 45,000 | Locked due to current executive position | N/A |
Cong Xuenian | 2,533,718 | 0 | -450,000 | 2,083,718 | Locked due to current executive position | N/A |
Total | 2,582,468 | 0 | -453,750 | 2,128,718 | -- | -- |
2. Issuance and listing of securities
2.1 Securities(excluding preference shares)issued in the reportingperiod?Applicable √N/A
2.2 Changes in total shares of the company and the shareholderstructure, as well as the asset and liability structure?Applicable √N/A
2.3 Existing staff-held shares
?Applicable √N/A
3. Shareholders and actual controller
3.1 Total number of shareholders and their shareholdings
Unit:share
Total number of common shareholders atthe end of the reporting period
Total number of common shareholders at the end of the reporting period | 78,298 | Total number of common shareholders at the prior month-end before the disclosure date of the annual report | 97,466 | Total number of preference shareholders with resumed voting rights at the period-end(if any)(see Note 8) | 0 | Total number of preference shareholders with resumed voting rights at the period-end(if any)(see Note 8) | 0 | |||||
Shareholdings of shareholders with a shareholding percentage over 5% or the top 10 shareholders | ||||||||||||
Name of shareholder | Nature of shareholder | Shareholding percentage | Total shares held at the period-end | Increase/decrease during the reporting period | Number of restricted shares held | Number of non-restricted shares held | Pledged or frozen shares | |||||
Status of shares | Number of shares | |||||||||||
Jiangsu Yanghe Group Co.,Ltd. | State-owned corporation | 34.16% | 514,858,939 | 0 | 0 | 514,858,939 | ||||||
Jiangsu Blue Alliance Joint-Stock Co., Ltd. | Domestic non-state-owned corporation | 21.44% | 323,138,626 | 0 | 249,480,000 | 73,658,626 | ||||||
Shanghai Haiyan Logistics Development Co.,Ltd. | State-owned corporation | 9.67% | 145,708,137 | 0 | 0 | 145,708,137 | ||||||
Hong Kong Securities Clearing Company Ltd. (HKSCC) | Outbound corporation | 7.87% | 118,585,244 | 20,447,821 | 0 | 118,585,244 | ||||||
Shanghai Jieqiang Tobacco Sugar &Wine(Group)Co.,Ltd | State-owned corporation | 4.02% | 60,608,499 | -846,976 | 0 | 60,608,499 | ||||||
Bank of China Co.,Ltd. – Liquor index classification securities investment fund by China Merchants Fund | Domestic non-state-owned corporation | 0.99% | 14,917,557 | 5,683,258 | 0 | 14,917,557 | ||||||
China Securities Finance Corporation limited | State-owned corporation | 0.92% | 13,790,044 | 0 | 0 | 13,790,044 | ||||||
Central Huijin Asset Management Co., Ltd. | Outbound corporation | 0.85% | 12,766,400 | 0 | 0 | 12,766,400 | ||||||
Bank of China Co.,Ltd. – E-funds SME hybrid securities investment funds | Other | 0.50% | 7,480,001 | 4,379,964 | 0 | 7,480,001 | ||||||
Xingyuan Asset Management Co.,Ltd.-clients' capital | Outbound corporation | 0.48% | 7,281,202 | -2,684,900 | 0 | 7,281,202 |
Strategic investors or general corporations to be top-ten shareholders dueto placing of new shares(if any)(see Note 3)
Strategic investors or general corporations to be top-ten shareholders due to placing of new shares(if any)(see Note 3) | N/A | ||
Related-parties or acting-in-concert | N/A | ||
Shareholdings of the top 10 non-restricted shareholders | |||
Name of shareholder | Number of non-restricted shares held in the period end | Type of shares | |
Type | Number | ||
Jiangsu Yanghe Group Co.,Ltd. | 514,858,939 | CNY common shares | 514,858,939 |
Shanghai Haiyan Logistics Development Co.,Ltd. | 145,708,137 | CNY common shares | 145,708,137 |
Hong Kong Securities Clearing Company Ltd. (HKSCC) | 118,585,244 | CNY common shares | 118,585,244 |
Jiangsu Blue Alliance Joint-Stock Co., Ltd. | 73,658,626 | CNY common shares | 73,658,626 |
Shanghai Jieqiang Tobacco Sugar & Wine(Group)Co.,Ltd | 60,608,499 | CNY common shares | 60,608,499 |
Bank of China Co.,Ltd. – Liquor index classification securities investment fund by China Merchants Fund | 14,917,557 | CNY common shares | 14,917,557 |
China Securities Finance Corporation limited | 13,790,044 | CNY common shares | 13,790,044 |
Central Huijin Asset Management Co., Ltd. | 12,766,400 | CNY common shares | 12,766,400 |
Bank of China Co.,Ltd. – E-funds SME hybrid securities investment funds | 7,480,001 | CNY common shares | 7,480,001 |
Xingyuan Asset Management Co.,Ltd.-clients' capital | 7,281,202 | CNY common shares | 7,281,202 |
Strategic investors or general corporations becoming top 10 shareholders due to placing of new shares(if any)(see Notes 3) | N/A | ||
Explanation on the top 10 common shareholders participating in the securities margin trading(if any)(see Notes 4) | N/A |
Whether any of the top 10 common shareholders or the top non-restricted common shareholders of the Company conduct any promissory repurchase
during the reporting period.? Yes √ No
No such cases in the reporting period.
3.2 Controlling shareholder
Nature of controlling shareholder:Local state-ownedType of controlling shareholder:Corporation
Name ofcontrollingshareholder
Name of controlling shareholder | Legal representative/Company principal | Date of establishment | Credibility code | Main business scope |
Jiangsu Yanghe Group Co.,Ltd. | Li Minfu | 8 May 1997 | 91321300142334989Y | Sales of brewing mechanical equipment, Liquor Export, Import of various raw and auxiliary material used for production, equipment and accessories, Industrial investment; municipal public engineering, building engineering, tourism cultural industry investment. |
Shareholdings of the controlling shareholder in other controlled or non-controlled listed companies at home or abroad during the reporting period | N/A |
Change of the controlling shareholder during the reporting period?Applicable √N/ANo such cases in the reporting period.
3.3 Actual controller and its persons acting in concert
Nature of actual controller:Local State-owned Assets Supervision and AdministrationCommissionType of actual controller:Corporation
Name of actual controller | Legal representative/Company principal | Date of establishment | Credibility code | Main business scope |
State-owned Assets Supervision and Administration Commission of Suqian | Zhao Xiaoli | 22 October 2005 | N/A | Execution of duty of state-owned enterprise's investor on behalf of the People's Government of Suqian and implementation of Supervision and Administration of State-owned Assets and State-owned Enterprises. |
Share holdings of the controlling shareholder in other controlled or non-controlled listed companies at home or abroad | N/A |
during thereporting period.
Change of the actual controller during the reporting period?Applicable √N/A
No such cases in the reporting period.Ownership and control relations between the actual controller and the Company
The actual controller control the company via trust or other ways of assets management?Applicable √ N/A
3.4 Other corporate shareholders with a shareholding proportion over 10%
√Applicable ? N/A
during thereporting period.Name of actual controller
Name of actual controller | Legal representative/Company principal | Date of establishment | Registered capital | Main business scope |
Jiangsu Blue Alliance Joint-Stock Co., Ltd. | Zhao Qike | 28 July 2016 | CNY 105,600,000.00 | Sales of daily products, research and development of biology technology, furniture production, Business management consulting service, fruit tree planting, Sales of prepackaging food. |
3.5 Limits on the Company’s shares held by its controlling shareholder,actual controller, restructuring party and other commitment entities.
?Applicable √ N/A
Section VII Information about Preference Shares? Applicable √ N/ANo such cases in the reporting period
Section VIII Information about Convertible Bonds? Applicable √ N/ANo such cases in the reporting period
Section IX Profiles of Directors, Supervisory, Senior Management and Employees
1. Change in shares owned by directors, members of supervisory committee, senior management andemployees
Name
Name | Office title | Incumbent/ Former | Gender | Age | Start date of term | Termination date of term | Shares held at the period-begin (share) | Shares increased at the reporting period (share) | Shares decreased at the reporting period (share) | Other increase/decrease (share) | Shares held at the period-end (share) |
Wang Yao | Chairman of the board | Incumbent | Male | 55 | 10 February 2015 | 29 January 2021 | 30,002 | 0 | 0 | 0 | 30,002 |
Zhong Yu | Vice chairman of the board,President | Incumbent | Male | 56 | 10 February 2015 | 29 January 2021 | 0 | 0 | 0 | 0 | 0 |
Liu Huashuang | Director,executive vice president | Incumbent | Male | 50 | 29 January 2018 | 29 January 2021 | 0 | 0 | 0 | 0 | 0 |
Cong Xuenian | Director,Vice president,Secretary of the board,CFO | Incumbent | Male | 54 | 10 February 2015 | 29 January 2021 | 2,778,291 | 0 | 0 | 0 | 2,778,291 |
Zhou Xinhu | Director,Vice president,Chief engineer | Incumbent | Male | 58 | 10 February 2015 | 29 January 2021 | 2,878,291 | 0 | 0 | 0 | 2,878,291 |
Wang Kai | Director | Incumbent | Male | 43 | 19 May 2017 | 29 January 2021 | 0 | 0 | 0 | 0 | 0 |
Xu Zhijian | Non-executive director | Incumbent | Male | 56 | 10 February 2015 | 29 January 2021 | 0 | 0 | 0 | 0 | 0 |
Cai Yunqing | Non-executive director | Incumbent | Female | 68 | 10 February 2015 | 29 January 2021 | 0 | 0 | 0 | 0 | 0 |
Name
Name | Office title | Incumbent/ Former | Gender | Age | Start date of term | Termination date of term | Shares held at the period-begin (share) | Shares increased at the reporting period (share) | Shares decreased at the reporting period (share) | Other increase/decrease (share) | Shares held at the period-end (share) |
Ji Xueqing | Non-executive director | Incumbent | Male | 49 | 10 February 2015 | 29 January 2021 | 0 | 0 | 0 | 0 | 0 |
Chen Tongguang | Non-executive director | Incumbent | Male | 54 | 10 February 2015 | 29 January 2021 | 0 | 0 | 0 | 0 | 0 |
Feng Pantai | Chairman of supervisory committee | Incumbent | Male | 60 | 10 February 2015 | 29 January 2021 | 5,677,986 | 0 | 0 | 0 | 5,677,986 |
Xu Youheng | Supervisor | Incumbent | Male | 43 | 23 May 2019 | 29 January 2021 | 0 | 0 | 0 | 0 | 0 |
Chen Taiqing | Supervisor | Incumbent | Male | 55 | 10 February 2015 | 29 January 2021 | 0 | 0 | 0 | 0 | 0 |
Chen Taisong | Supervisor | Incumbent | Male | 52 | 10 February 2015 | 29 January 2021 | 0 | 0 | 0 | 0 | 0 |
Zhou Wenqi | Supervisor | Incumbent | Female | 54 | 10 February 2015 | 29 January 2021 | 0 | 0 | 0 | 0 | 0 |
Lin Qing | Vice president | Incumbent | Female | 45 | 10 February 2015 | 29 January 2021 | 0 | 0 | 0 | 0 | 0 |
Zheng Bujun | Vice president | Incumbent | Male | 53 | 10 February 2015 | 29 January 2021 | 60,000 | 0 | 0 | 0 | 60,000 |
Han Feng | Director | Former | Male | 58 | 10 February 2015 | 24 April 2020 | 0 | 0 | 0 | 0 | 0 |
Name
Name | Office title | Incumbent/ Former | Gender | Age | Start date of term | Termination date of term | Shares held at the period-begin (share) | Shares increased at the reporting period (share) | Shares decreased at the reporting period (share) | Other increase/decrease (share) | Shares held at the period-end (share) |
Chen Yiqin | Supervisor | Former | Male | 59 | 10 February 2015 | 11 April 2020 | 0 | 0 | 0 | 0 | 0 |
Zhu Wei | Vice president | Former | Male | 43 | 10 February 2015 | 18 January 2020 | 0 | 0 | 0 | 0 | 0 |
Total | 11,424,570 | 0 | 0 | 0 | 11,424,570 |
2. Changes in directors, supervisors, senior management and employees
√Applicable ? N/A
Name | Office title | Type | Date | Reason |
Chen Yiqin | Supervisor | Former | 11 April 2019 | Job change |
3. Employment information
Professional background, work experience and major duties of directors, supervisors and senior management
3.1 Directors
Mr. Wang Yao, born in December 1965, Master of engineering from Jiangnan University, MBA from Nanjing University, researcher-level seniorengineer, representative of the 19th National Congress of the Communist Party of China, craft-master of Chinese liquor. He used to serve assecretary of the party branch and director of crushing and qu-making workshop of Jiangsu Yanghe Brewery; chairman of the board, general managerand secretary of the party committee of Jiangsu Yanghe Group Color Printing Co.,Ltd.; deputy general manager, deputy secretary of party committee,secretary of the discipline inspection commission of Shuanggou Distillery; deputy general manager, vice secretary of party committee and presidentassistant of Jiangsu Su Wine Industry Co., Ltd.; general manager and vice president of Shuanggou Distillery; chairman of the board and secretary ofthe the party committee of Su Wine Trading Co., Ltd.. At present, he is chairman of the board and secretary of the the party committee of theCompany.
Mr. Zhong Yu, born in May 1964, Master degree, senior engineer, Master of Chinese Liquor and Jiangsu 13
thNPC member. He was the director oftechnology and environmental protection department in Shuanggou Distillery; vice chief engineer, president assistant and director of production andtechnology center of Shuanggou Distillery; vice general manager of Yanghe Branch of the Company; brewing director, president assistant, vicepresident of the Company, general manager of Siyang Branch of the Company. At present, He is a vice chairman of the board, president, vicesecretary of the the party committee of the Company, general manager of Yanghe Branch of the Company and chairman of the board of ShuanggouDistillery.
Mr. Liu Huashuang, born in December 1970, MBA from Fudan University, accountant. He was the director of marketing department and deputygeneral manager of Jiangsu Yanghe Brewing, general manager of Yanghe Blue Classic, general manager of Jiangsu Yanghe Brewing, member of thestanding party committee of Company, director of strategic studies, vice executive general manager and vice secretary of party committee of JiangsuSu Wine Industrial Co., Ltd., secretary of party committee and vice chairman of the board of Su Wine Trade Group. At present, he is a director, viceexecutive president and member of the standing party committee of the Company and secretary of the party committee and chairman of Su WineTrade Group.
Mr. Cong Xuenian, born in January 1966, Master degree, senior economist. He served as a chief accountant and finance director of Yanghe Brewery,finance minister of Yanghe Group; chief accountant, secretary of the board, financial administrator, director and vice president of the Company. Atpresent, he is secretary of the board, financial administrator,director, and vice president of the Company, chairman of the board of Su Wine FortuneManagement Co., Ltd. and chairman of the board of Jiangsu Yanghe Investment Management Co., Ltd..
Mr. Zhou Xinhu, born in August 1962, Master degree, senior engineer, member of the expert group of liquor professional committee of China FoodIndustry Association, Chief liquor taster of China and Master of Chinese liquor critic. He was technician of Yanghe Group, director of quality inspectiondepartment and blending and storage department, vice general manager of Yanghe Brewing, vice chief engineer, chief engineer and vice president ofthe Company. At present, he is a director, vice president and chief engineer of the Company.Mr. Wang Kai was born on August 1977, Bachelor degree, intermediate economist. He was a manager of brand department in marketing center ofShanghai Tobacco Group Co., Ltd., president assistant of Shanghai Haiyan Logistics Development Co., Ltd. At present, he is a director of theCompany and vice general manager of Shanghai Haiyan Logistics Development Co., Ltd.
Mr. Xu Zhijian, born in March 1964, Master and Doctor degree from university professor. He was adirector of China&Netherlands Business Administration Education Center of Nanjing University, directorof EMBA Program of Nanjing University&Cornell University, director of International BusinessAdministration Education Center of Nanjing University, Assistant Dean of Business College of NanjingUniversity, Director of the Department of Business Administration of Nanjing University. At present, heis a non-executive director of the Company, Nanjing Port Co., Ltd., Jiangsu Maysta Chemical Co., Ltd.,Glarun Technology Co., Ltd. and Yangzhou Rixin Biotechnology Co.,Ltd., and a professor of BusinessCollege of Nanjing University.
Ms. Cai Yunqing, born in December 1952, Doctor of medicine, professor and doctoral supervisor. Shewas a director and station-master assistant of food health department of sanitation and antiepidemicstation of Jiangsu province, director of department of nutrition and food hygiene, school of public health,Nanjing Medical University, director of Institute of Nutrition and Food Science. At present, she is a non-executive director of the Company, supervisor of Chinese Nutrition Society, honorary president ofNutrition Society of Jiangsu Province, vice president of Jiangsu Intelligent Aged Research Associationand health food evaluation expert of National Food and Drug Administration.
Mr. Ji Xueqing, born in July 1971, Master degree. He used to be a project manager of China ChuangyeInvestment Group Limited, chairman of the board and president of Nanjing Qinghe Investment GroupCo., Ltd., senior vice president of Yonyou Network Technology Co., Ltd. At present, he is a non-executive director of the Company, non-executive director of Nanjing Balance Network Technology Co.,Ltd. and NanJing Liandi Information Systems Co.,Ltd.,vice chairman of China University Innovation andEntrepreneurship Incubator Alliance, chairman of the board of Nanjing Suhe Venture Capital Center,director of Nanjing Liheng Investment Limited Partnership, supervisor of Xuzhou Zm-Besta Heavy SteelStructure Co., Ltd.,supervisor of Jiangsu Efful Science and Technology Co.,Ltd., partner of China softInvestment Group.
Mr. Chen Tongguang, born in April 1966, Bachelor degree, senior accountant. He was accountant ofJiangsu Huaiyin Electric Company, vice director of finance department of Jiangsu Agricultural College,vice director of Accounting Center and Finance department of Yangzhou University, vice and generalmanager of Yangda company of Yangzhou University Asset Operation Co., Ltd. At present, he is a non-executive director of the Company, director of quality operation and safety management department inYangzhou University and non-executive director of Yangzhou Yangjie Electronic Technology Co., Ltd.
3.2 Supervisors
Mr. Feng Pantai, born in October 1960, College degree, senior economist. He was vice director ofSihong County Food Bureau, vice general manager of Yanghe Group, director and vice president of theCompany. At present, he is the chairman of the supervisory committee, member of standing committee,chairman of labor union, director of Blue Alliance.
Mr. Chen Taiqing, born in May 1965, Master degree, Senior political engineer, member of communistparty of China. He was member of the party committee of Yanghe Group, director of executive office,member of the Company’s party committee, director of human resource department, director of
integrated department, president assistant, vice general manager of Yanghe Branch of the Company,vice general manager and secretary of discipline inspection committee of the Company. At present, heis a supervisor, vice secretary of the party committee, general manager and secretary of the partycommittee of Shuanggou Distillery.
Ms. Zhou Wenqi, born in April 1966, College degree, senior accountant. She was financial director ofShanghai Jieqiang No.3 and No.4 distribution center, financial assistant, deputy manager, manager ofShanghai Jieqiang Tobacco Sugar & Wine (Group) Co., Ltd. At present, she is a supervisor of theCompany and CFO of Shanghai Jieqiang Tobacco Sugar & Wine (Group) Co., Ltd..
Mr. Chen Taisong, born in January 1968, Master degree. He was a member, secretary of Siyang LegalBureau, and secretary, vice section chief, section chief, director assistant, vice director of Siyanggovernment office, alcalde and secretary of the party committee of Chuancheng Town in Siyangcountry, vice secretary of the party committee and secretary of discipline inspection commission andchairman of the supervisory committee of Su Wine Industrial Co., Ltd., vice secretary of disciplineinspection committee of the Company. At present, he is a supervisor, member of standing committee,director of organization department of the Company; vice secretary of the party committee andsecretary of discipline inspection committee and chairman of the supervisory committee of Su WineTrade Group.
Mr.Xu youheng, born in March 1977, Master degree. He has served successively as director oforganization department, director of cadre supervision department, director of cadre educationdepartment, director of office, vice director of the office of leading group for party construction of Suqianmunicipal party committee. At present, he is the Company’s supervisor, vice secretary of the partycommittee and vice general manager of Suqian Industrial Development Group Co., Ltd.
3.3 Senior management
Mr. Zhong Yu, President of the Company, resume as above.Mr. Liu Huashuang, vice president of the Company, resume as above.Mr. Cong xuenian, vice president of the Company, resume as above.Mr. Zhou Xinhu, vice president of the Company, resume as above.Ms. Lin Qing, born in May 1975, Master degree, senior accountant, CPA. She was a vice director ofenterprise department of Suqian Finance Bureau, director assistant of Suqian Price Bureau, memberand vice director of the party committee of National Development and Reform Commission, member ofthe standing committee of the Company, vice president of the Company. At present, she is a memberof the standing committee of the Company, vice president of the Company and director of the internalaudit institution.Mr. Zheng Bujun, born in January 1967, MBA, senior engineer. He was a general manager of YangheGroup, general manager of Suqian State-owned Investment Co., Ltd., vice general manager ofShuanggou Distillery, director of logistics and purchasing and president assistant of the Company. Atpresent, he is a vice president, member of the standing committee of the Company, general managerand secretary of the party committee of Siyang Branch of the Company.
Mr. Fu Hongbin, born in January 1962, Chinese liquor craft master, senior winemaker. He successivelyserved as the director of the management and quality department of Jiangsu Yanghe Group Co., Ltd.,vice chief engineer of the Company, director of the quality department, general manager assistant ofYanghe Branch, the director of the quality department, vice general manager, president assistant of theCompany, and the chairman of the board of directors of Guizhou Guijiu Group Co., Ltd. At present, heis a vice president of the Company, chairman of the board of directors and secretary of the partycommittee of Guizhou Guijiu Group Co., Ltd.
Position in shareholder-holding companies
√ Applicable ? N/A
Name
Name | Name of shareholder holding companies | Position in shareholder holding companies | Beginning date of office term | Ending date of office term | Any remunerations received from shareholder holding companies |
Zhou Wenqi | Shanghai Jieqiang Tobacco Sugar & Wine (Group) Co.,Ltd. | CFO | 1 July 2013 | Yes | |
Wang Kai | Shanghai Haiyan Logistics Development Co.,Ltd. | Vice general manager | 1 March 2017 | Yes | |
Feng Pantai | Jiangsu Blue Alliance Joint-Stock Co., Ltd. | Supervisor | 19 July 2019 | No |
Position in other companies
Name | Name of other companies | Position in other companies | Beginning date | Ending date | Any remunerations received from other companies |
Xu Zhijian | Nanjing University | Professor | 11 November 2003 | Yes | |
Xu Zhijian | Nanjing Port Co., Ltd. | Non-executive director | 30 March 2016 | Yes | |
Xu Zhijian | Jiangsu Maysta Chemical Co., Ltd. | Non-executive director | 4 December 2015 | Yes | |
Xu Zhijian | Glarun Technology Co.,Ltd. | Non-executive director | 12 May 2017 | Yes | |
Xu Zhijian | Yangzhou Rixing Bio-Tech Co., Ltd. | Non-executive director | 12 December 2019 | Yes | |
Cai Yunqing | Chinese Nutrition Society | Supervisor | 1 May 2017 | No | |
Cai Yunqing | Jiangsu Intelligent Aged Research Association | Vice president | 1 March 2017 | No | |
Cai Yunqing | Chinese Nutrition Society | Honorary president | 1 April 2015 | No | |
Cai Yunqing | State Food and Drug Administration | Evaluation experts of health food | 1 August 2008 | No | |
Ji Xueqing | Nanjing Suhe Venture Capital Center (Limited Partnership) | Chairman of the board | 1 January 2017 | No | |
Ji Xueqing | Xuzhou Zm-Besta Heavy Steel Structure Co., Ltd | Supervisor | 1 March 2017 | No | |
Ji Xueqing | China Soft Investment Group | Partner | 1 January 2017 | No | |
Ji Xueqing | Nanjing Balance Network | Non-executive | 1 October 2017 | Yes |
Punishments imposed in the recent three years by the securities regulators on the incumbent directors,supervisors and senior management as well as those who left in the reporting period? Applicable √ N/A
4. Remuneration of directors, supervisors and senior managementThe decision-making procedures, decision basis and actual remuneration payment of directors,supervisors and senior management.
Decision-making procedures: Implementation is based on the "Trial Implementation Measures for theAnnual Salary of General Manager (Revision)” approved by the 9
th
meeting of the second board ofdirectors on 29 December 2008 and "Trial Implementation Measures for the Annual Salary of Chairmanof the Board (Revision)” approved by the first extraordinary general meeting of shareholders on 18January 2009.
Decision basis: Based on the Company's operating conditions and considering the standard of regionaleconomic, industry and market.
Actual remuneration payment: Based on the performance and payment on time according to the salarysystem.
Remuneration of directors, supervisors and senior management during the reporting period
Unit: 0,000CNY
Name
Name | Position | Gender | Age | Incumbent/ Former | Total before-tax remuneration from the Company | Remuneration from related parties of the Company |
Wang Yao | Chairman of the board | Male | 55 | Incumbent | 145.6 | No |
Zhong Yu | Vice Chairman of the board, president | Male | 56 | Incumbent | 131.06 | No |
Liu Huashuang | Director, executive vice president | Male | 50 | Incumbent | 101.65 | No |
Cong Xuenian | Director,vice | Male | 54 | Incumbent | 100.93 | No |
Technology Co., Ltd. | director | ||||
Ji Xueqing | NanJing Liandi Information Systems Co.,Ltd. | Non-executive director | 1 January 2017 | No | |
Ji Xueqing | Jiangsu Efful Science and Technology Co.,Ltd | Supervisor | 1 March 2018 | No | |
Ji Xueqing | China University Innovation and Entrepreneurship Incubator Alliance | Vice president | 1 July 2018 | No | |
Ji Xueqing | Nanjing Liheng Investment Co.,Ltd. | Director | 15 October 2019 | No | |
Chen Tongguang | Quality Operation and Safety Management Department in Yangzhou University | Director | 1 October 2013 | Yes | |
Chen Tongguang | Yangzhou Yangjie Electronic Technology Co.,Ltd. | Non-executive director | 19 June 2017 | Yes |
Name
Name | Position | Gender | Age | Incumbent/ Former | Total before-tax remuneration from the Company | Remuneration from related parties of the Company |
president,secretary of the board,CFO | ||||||
Zhou Xinhu | Director,vice president,chief engineer | Male | 58 | Incumbent | 101.08 | No |
Wang Kai | Director | Male | 43 | Incumbent | 0 | Yes |
Xu Zhijian | Non-executive director | Male | 56 | Incumbent | 6 | No |
Cai Yunqing | Non-executive director | Female | 68 | Incumbent | 6 | No |
Ji Xueqing | Non-executive director | Male | 49 | Incumbent | 6 | No |
Chen Tongguang | Non-executive director | Male | 54 | Incumbent | 6 | No |
Feng Pantai | Chairman of supervisory committee | Male | 60 | Incumbent | 98.18 | No |
Xu Youheng | Supervisor | Male | 43 | Incumbent | 0 | Yes |
Zhou Wenqi | Supervisor | Female | 54 | Incumbent | 0 | Yes |
Chen Taiqing | Supervisor | Male | 55 | Incumbent | 100.66 | No |
Chen Taisong | Supervisor | Male | 52 | Incumbent | 102.74 | No |
Lin Qing | Vice president | Female | 45 | Incumbent | 98.19 | No |
Zheng Bujun | Vice president | Male | 53 | Incumbent | 100.43 | No |
Han Feng | Director | Male | 58 | Former | 0 | Yes |
Chen Yiqin | Supervisor | Male | 59 | Former | 0 | No |
Zhu Wei | Vice president | Male | 43 | Former | 112.34 | No |
Total | 1,216.86 |
Share incentives for directors, supervisors and senior executives in the reporting period? Applicable √N/A
5. Staff in the Company
5.1 Number, functions and educational backgrounds of the staff
Number of in-service staff of the Company | 7,130 |
Number of in-service staff of main subsidiaries | 8,669 |
Total number of in-service staff | 15,799 |
Total number of staff with remuneration during this period | 15,799 |
Number of retirees to whom the Company or its main subsidiaries need to pay retirement pension | 0 |
Functions | |
Function by category | Number of staff |
Production personnel | 6,023 |
Sales personnel | 5,632 |
R&D personnel | 1,862 |
Financial personnel | 219 |
Administrative personnel | 1,797 |
Inner retired personnel | 266 |
Total | 15,799 |
Educational backgrounds | |
Educational background by category | Number of staff |
Master | 298 |
Bachelor | 3,810 |
Junior college | 4,317 |
Senior high school and below | 7,374 |
Total | 15,799 |
5.2 Staff remuneration policy
The remuneration consists of basic payments, performance-related payments and benefit float award.The Company implemented the mechanism of position self-promotion, and prepared the ManagementMeasures for Position Self-promotion. In respect of quantity, quality, efficiency and economic value ofthe work, the Company further improved a quantified and assessable quantitative and qualitativeindicators. It encourages employees to be spontaneous and to improve their work efficiency. It furtherimproves the Company's management level, and achieves a win-win situation between the Companyand employees
5.3 Staff training plans
In 2019, in order to promote the implementation of training effect, the Company has successfullyexplored and innovated Yanghe "2234" training mode centering on "solving problems, improvingefficiency and increasing benefits", and implemented it in each specific training.Over the past year, for key training objects, the Company orderly promoted the "100" talents, strategictalents and leading cadres training projects. In order to ensure that new employees and rotating staffcan quickly adapt to their posts, the Company regularly organized training for new employees and thework of "master leading apprentice". Continuously, the Company improved the management of thetraining system, and prepared the Assessment Method for Students of Yanghe University and theAssessment Method for Lecturers of Yanghe University. Dynamic management of lecturers wasimplemented, and 295 lecturers from Yanghe University were evaluated and selected. The Comapnystandardized the job skill level appraisal and effectively promoted the improvement of production skills.According to the annual training plan, subsidiary companies organized training in marketing, productiontechnology, functional management and other aspects to improve the business skills andcomprehensive quality of employees. Business departments carry out professional training according toits business needs. 766 training sessions were organized and 20,455 employees were trained allaround the year.
5.4 Labor outsourcing
? Applicable √ N/A
Section X Corporate Governance
1. Basic situation of corporate governance
The Company constantly optimizes corporate governance structure and internal control system toenhance the corporate governance level strictly according to the Corporate Law, the Securities Law,The Listed Company Governance Standards, Rules Governing Listing of Stocks on Shenzhen StockExchange and Guidelines on Standard Operation of SME Board Listed Companies on Shenzhen StockExchange and other relevant laws and regulations. The Company operates normatively with soundcorporate governance and normative information disclosure. The situation of corporate governance ofthe Company meets the requirements of authority files of listed company corporate governance byCSRC.
1.1. Shareholders and shareholders’ general meeting
The shareholders' meeting of the Company has clear responsibilities, clear rules of procedure andeffective implementation. According to the regulations such as Articles of Incorporation and CompanyRules of Procedure of The Shareholders’ General Meeting, the Company convenes and holds theshareholders’ general meeting and discusses business affairs in the meeting normatively. TheCompany hires legal advisor to issue the legal opinion for the shareholders’ general meeting; TheCompany can treat all shareholders equally, and especially makes minority shareholders have equalstatus and fully exercise their own power. The board carried out all the decisions made by the annualmeeting of shareholders carefully.
1.2. Directors and board of directors
The responsibilities of the board of directors are clear and all the directors can perform their dutiesconscientiously and responsibly. The directors are elected carefully under the regulations of theCorporate Law and Articles of Incorporation. The board of the Company consists of 11 directorsincluding 4 non-executive directors. The structure of the board of directors satisfies the requirements oflaws and regulations. The board discusses business affairs according to Corporate Law and Articles ofIncorporation. All the directors are able to attend the meeting and take responsibilities diligentlyaccording to the Discussion Rules of the Board of Directors, The Working System of Non-executiveDirectors, and Behavior Guidelines of Directors of SME Board Listed Companies. All the directorsseriously consider proposals and make scientific and reasonable decisions for significant events. Theyalso protect the legal interests of the Company and all shareholders. Strategy Committee, NominationCommittee, Audit Committee, Remuneration and Appraisal Committee are four professionalcommittees set under the board. The Committees have clear division of work and responsibilities andfully play professional role to offer scientific and professional suggestions for the decision-making of theboard.
1.3. Supervisors and board of supervisors
The duties of the board of supervisors are clear and all the supervisors can perform their dutiesconscientiously and responsibly. The supervisors are elected according to the Corporate Law and theArticles of Incorporation. The board of supervisors of the Company consists of 5 supervisors, including
2 staff representative supervisors. The structure of the board of supervisors satisfies the requirementsof laws and regulations. The board of supervisors discusses business affairs according to corporate lawand articles of incorporation. Supervisors can attend the meeting according to the requirements ofRules of Discussion Rules of the Board of Supervisors. They takes their own responsibilities seriously,supervises and makes independent suggestions for the Company’s significant events, financialconditions and the duties of directors and president, thereby, protecting legal interests of the Companyand shareholders.
1.4. Mechanism of evaluation and motivation
The appointment of directors, supervisor and senior managers is open and transparent, which satisfiesthe requirements of relevant regulations and laws. The fair and transparent evaluation mechanism ofthe management has been built. During the reporting period, the management carried out theperformance assessment according to the goal of annual operation plan. The management takes theirresponsibilities seriously and fulfills the duties.
1.5. Relationship between controlling shareholders and listed companyAccording to the requirement of the Company Law, the controlling shareholders take duties and rightsof sponsor. The Company and the controlling shareholders implement independent accounting ofpersonnel, assets, finance, organizations and business. They take responsibilities and risks separately.During the reporting period, controlling shareholders have no priority beyond the rights of shareholders’general meeting to directly and indirectly affect the decision-marking and operation of the Company.There is no situation that controlling shareholders damage the legal interests of other shareholders.There is no significant related party transaction between the Company and the controlling shareholders.There is no situation that controlling shareholders occupy the funds of the listed company and the listedcompany tenders guarantee for controlling shareholders and the subsidiaries.
1.6. Investors relationship management
The Company focuses on the management of investors relationship to protect legal rights of investors.Except for the duties like diligence or honesty, the chairman of the board, the president, the boardsecretary have good communications and interactions with investors through reception of investorinvestigation and participating in performance explanation session and broker strategy meeting online.As the professional organization for investor relationship management, the securities departmentstrengthens the communication with investors through telephone, email and irm.cninfo.com.cn. It fullymakes sure that investors have right to know and protects their legal interests.
1.7. Stakeholders, environmental protection and social responsibilityThe Company fully respects and protects legal interests of stakeholders and fulfills the duties of socialresponsibility. The Company strengthens the awareness of social responsibility and achieves theinterest balance among society, government, shareholders, company, employees,etc. They jointlypromote the harmonious and steady development of the Company. The Company advocates thegovernance concept of "green brewery and ecological enterprise", and integrates ecological andenvironmental protection requirements into the Company's development strategy and corporate
governance process. While maintaining the sustainable development, the Company activelyparticipates in social public welfare and takes social responsibilities.
1.8. Information disclosure and transparency
The information disclosure of the Company is implemented according to the requirements ofsupervision departments. The Company seriously implements the rules including InformationDisclosure Management Rule and Investors Relationship Management Rule. The Company enhancesthe management of information disclosure affairs and takes responsibility of information disclosurelegally and carefully, achieving the accuracy, integrity, fairness, timeliness of information disclosure.The information can be equally obtained by all shareholders.
1.9. Methods of improving internal control system constructionThe Company keeps on enhancing the corporate governance and the internal control system, whichimproves the management to a higher level. The Audit Committee fully examines and supervises thefinancial condition, the efficiency of internal control, the efficiency and rationality of corporategovernance. The audit department of the Company, as an internal audit unit, carries out regular andcontinuous examination on perfection and implement situation of internal control system. It finds theInternal control defects and improves deficiencies timely, thus the effectiveness of internal control canbe guaranteed. The operation management and anti-risk capacity are enhanced.
Any significant incompliance with the regulatory documents issued by the CSRC supervising thecorporate governance of listed companies.?Yes√ NoNo such cases in the reporting period.
2. Independency of businesses, personnel, assets, organizations andfinance which are separate from the controlling shareholder
2.1. In the aspect of business
The Company has independent and integrated business structure and the ability to operateindependently in the market. There is no peer competition between controlling shareholders and theCompany. Besides, there is no such kind of situation that controlling shareholders intervene withoperation of the Company directly or indirectly.
2.2 In the aspect of personnel
The Company has built independent personnel management system and salary management system.Furthermore, the Company signed labor contracts with employees, chairman of the board, the president,vice president, the board secretary and the responsible person for the Company’s financial affairsobtain compensation from the Company rather than the controlling shareholders. The directors, seniormanagers and supervisors do not have positions illegally in other companies that have the same orsimilar business.
2.3 In the aspect of assets
There are clear property relations between the Company and controlling shareholders. The Companyowns the independent land usage right and ownership of buildings. The Company independentlyregisters and manages the properties with setting up accounts and accounting treatment for them.There is no situation that the controlling shareholders occupy and control the assets of the Company orintervene the operation management of the assets.
2.4 In the aspect of organization
The Company has well-structured organization system, including the shareholders’ general meeting,the board of directors, supervisory committee, the management and functional departments. Relatedinternal management and control system is established for clear division of function and interaction witheach other. It forms an organic whole that ensures the legal operation. There is no affiliation withfunctional departments of controlling shareholders.
2.5 In the aspect of finance
Our company has completed and independent organization with professional financial employees.Independent accounting system and financial management are established. The Company sets bankaccountants, pays taxes and makes financial decisions separately. There is no situation that controllingshareholders intervene with the financial management of the Company.
3. Horizontal competition
?Applicable √N/A
4. Annual meeting of shareholders and special meetings ofshareholders convened during the reporting period
4.1. Meetings of shareholders convened during the reporting period
Meeting
Meeting | Type | Investor participation ratio | Convened date | Disclosure date | Disclosure index |
2018 Annual general meeting of shareholders | General meeting of shareholders | 78.45% | 23 May 2019 | 24 May 2019 | Announcement No. 2019-015, disclosed on www.cninfo.com.cn |
2019 First extraordinary general meeting of shareholders | Extraordinary general meeting of shareholders | 76.27% | 20 September 2018 | 21 September 2019 | Announcement No. 2019-022, disclosed on www.cninfo.com.cn |
4.2. Special meetings of shareholders convened at the request of preferenceshareholders with resumed voting rights?Applicable √ N/A
5. Performance of non-executive directors during the reporting period
5.1. Attendance of non-executive directors in board meeting and meeting ofshareholders
Attendance of non-executive directors in board meeting
Attendance of non-executive directors in board meeting | |||||||
Non-executive director | Presence due in the reporting period(times) | Presence on site(times) | Presence by telecommunication(times) | Presence through a proxy(times) | Absence(times) | Absence for two consecutive times | Presence(times) |
Xu Zhijian | 5 | 4 | 1 | 0 | 0 | No | 2 |
Cai Yunqing | 5 | 4 | 1 | 0 | 0 | No | 1 |
Ji Xueqing | 5 | 4 | 1 | 0 | 0 | No | 1 |
Chen Tongguang | 5 | 4 | 1 | 0 | 0 | No | 1 |
Explanation of absence of non-executive directors in meetings of the board for twiceN/A
5.2. Objections from non-executive directors in related issues of the companyWhether there are any objections on related issues of the Company from non-executive directors? Yes √ NoNo such cases in the reporting period.
5.3. Other details about the performance of duties by non-executive directors
Whether there are any suggestions from non-executive directors adopted by the Company?
√ Yes ? No
Explanation about advice of non-executive directors is adopted by the Company or notCompany adopted the advice of non-executive directors.
6. Performance of duties by special committees under the broad duringthe reporting period
1).During the reporting period, the Strategic Committee held 1 meeting. It investigated 2018 the boardwork report in advance, made the 2019 annual work plan, offered scientific and reasonable suggestionsand fulfilled the duties.
2).During the reporting period, the Nominations Committee held 1 meeting. It examined the qualificationof Candidates nominated for senior management to be appointed. The committee fulfilled the duties.
3).During the reporting period, the Audit Committee held 4 meetings. It earnestly urged the internalaudit department to carry out daily audit and special audit, strictly examined the implementation ofinternal control system related to financial report and daily operation, and actively coordinated andsupervised the audit and reappointment of accountants. The committee fulfilled the duties.
4).During the reporting period, the Remuneration and Appraisal Committee held 1 meeting. It examinedand supervised the salary of directors, senior managers and remuneration performance in 2018.Theinformation disclosure of the Company about the salary of directors and senior managers is correct andtrue and as the same as the examination. The committee fulfilled the duties.
7. Performance of duties by the supervisory committeeWhether there are any risks to the Company identified by supervisory committee when performing itsduties during the reporting period.? Yes √ NoNo such cases in the reporting period.
8. Evaluation and motivation mechanism for the senior managementAt the beginning of the establishment of the evaluation and motivation mechanism, it was explicitlyillustrated in Trial Implementation Measures for the Annual Salary of General Manager (Revision). Theevaluation and motivation of senior managers are mainly reflected in annual salary system. The boardof directors evaluates and motivates the senior managers mainly according to the satisfaction of clients,safety index, quality index and financial index. The management implements the annual salary system.The basic part of annual salary is paid monthly on average and the remaining part will be paid at theend of the year according to the results of evaluation. If it does not reach the evaluation index, theremaining parts will not be paid. In 2019, based on the above rules, the Remuneration and AppraisalCommittee examined the situation of the management’s performance in 2018. In 2018, based onstrategic planning for long-term development, the management has achieved the main purpose ofsustainable development.
9. Internal control
9.1. Significant internal control deficiencies found in the reporting period? Yes √ No
9.2. Internal control self-assessment report
Disclosure date of the internalcontrol self-assessment report
Disclosure date of the internal control self-assessment report | 29 April 2020 | |
Disclosure index of the internal control self-assessment report | The internal control self-assessment report disclosed on www.cninfo.com.cn on 29 April 2020 | |
Ratio of the total assets of the appraised entitles to the consolidated total assets | 99.03% | |
Ratio of the operating revenues of the appraised entitles to the consolidated operating revenue | 99.30% | |
Defect identification standard | ||
Type | Financial-report related | Non-financial-report related |
Qualitative standard | (1) The indicators of significant deficiencies of financial report including :i. Corrupt transaction of directors,senior managers and supervisors;ii. The management cannot figure out the significant misstatement during the operation process of operation, but these misstatements are found by others ;iii. Based on the results of evaluation of internal control, the significant deficiencies are not rectified;iv. Audit Committee and Internal Audit Agency are not effective in supervising the internal control.(2) The indicators of material deficiencies including:i. Accounting policy has not been chosen or used under the general accepted accounting principles;ii. The anti-fraud program and control measures have not been built;iii. The controlling system or compensation system of accounting treatment of irregular or special trade has not formed;iv. The control of the process of financial reporting at the period end exist the situation that one or more deficiencies are found and the veracity and accuracy cannot be proved.(3) general control deficiencies refers to the other control defects except for significant defects and important defects above. | If condition below appears, it can be considered as significant deficiencies, others can be divided into material defect or general defect according to impact extent.:(1) The Company suffer from serious mistakes and major property loss due to lake of democratic decision-making procedures or unscientific procedures;(2) Violate national regulations and laws seriously;(3) Lake of important management system or it doesn’t work;(4) Significant or material deficiencies of internal control cannot be regulated in time;(5)Material deficiencies of internal control appear continuously or in quantity. |
Quantitative standard | Significant deficiencies:Misstatement> 3% of total operating revenue;Misstatement > 5% of gross profits;Misstatement > 2% of total assets. Material deficiencies:1% of total operating revenue < Misstatement≤3% of total operating revenue;3% of gross profits< Misstatement≤5% of gross profits; 1% of total assets< Misstatement≤2% of total assets. General deficiencies: Misstatement≤1% of total operating revenue; Misstatement≤3% of net profits;Misstatement≤1% of total assets | Significant deficiencies:ratio of loss of total assets≥1%. Material deficiencies: 0.5%≤ratio of loss of total assets<1% General deficiencies:ratio of loss of total assets<0.5% |
Number of financial-report significant defects | 0 |
Number of non-financial-reportsignificant defects
Number of non-financial-report significant defects | 0 |
Number of important financial-report related defects | 0 |
Number of important Non-financial-report related defects | 0 |
10. Auditor’s report on internal control
Auditor’s report on internal control
Reviewed opinion paragraph in internal control audit report | |
We believe that Yanghe Brewery Joint-Stock maintained effective internal control over financial reporting in all material respects on 31 December 2019 in accordance with the basic standards for corporate internal control and relevant regulations. | |
Disclosure of internal control audit report | Disclosure |
Date of disclosure of internal control audit report | 29 April 2020 |
Index to disclosure of internal control audit reports | The internal control self-assessment report disclosed on www.cninfo.com.cn on 29 April 2020 |
Opinion types of internal control audit report | Standard and unqualified opinion |
Whether there are material deficiencies in non-financial reporting | No |
Whether the accounting firm issues the internal control audit report of the non-standard opinion
□ Yes √ No
Whether the internal control audit report issued by the accounting firm is consistent with the self-evaluation report of the board of directors
√ Yes □ No
Section XI Information about Corporate BondWhether there exists a public issue and listing of corporate bond that is not yet due orfailed to be redeemed at the date of the financial report authorized.No
Section XII Financial Report
I.Auditor’s report
Type of audit report
Type of audit report | Standard and unqualified opinion |
Date of signature | 28 April 2020 |
Name of Audit | Suya Jincheng Certified Public Accountants LLP |
No. of auditor’s report | Suya Audit [2020] No.567 |
Names of auditors | Kan Baoyong, Li Yan |
Auditor’s Report
To the shareholders of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.:
OpinionWe have audited the financial statements of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd. (hereinafter referred to as the “Company”), which comprise the consolidated balancesheet and balance sheet as at 31 December 2019, consolidated income statement andincome statement, consolidated cash flow statement and cash flow statement,consolidated statement of changes in owners' equity and statement of changes inowners' equity for the year then ended and notes to the financial statements.In our opinion, the attached financial statements are prepared, in all material respects, inaccordance with Accounting Standards for Business Enterprises and present fairly thefinancial position of the company as at 31 December 2019 and its operating results andcash flow for the year then ended.
Basis for opinionWe conducted our audit in accordance with China Standards on Auditing (“CSAs”) forCertified Public Accountants. Our responsibilities under those standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Codeof professional ethics for Certified Public Accountants in China (“the Code”), and we havefulfilled our other ethical responsibilities in accordance with the Code. We believe that theaudit evidence we have obtained is sufficient and appropriate to provide a basis for ouropinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of mostsignificance in our audit of the consolidated financial statements of the current period.These matters were addressed in the context of our audit of the consolidated financialstatements as a whole and, in forming our opinion thereon, and we do not provide aseparate opinion on these matters.
1.Recognition of revenue
1.Recognition of revenue | |
Please refer to accounting policies in Note 22 of Notes V. Significant accounting policies and accounting estimates, and Note 31 of Notes Ⅶ.Notes to the main items of the consolidated financial statements. | |
Key audit matters | How our audit addressed the key audit matter |
The Company’s specific condition of revenue recognition is that revenue is recognized after customer acceptance based on payment received or obtaining the rights of claiming payment for goods according to signed sales contracts or agreements. In 2019, the Company’s annual operating revenue was CNY 23.126 billion. The amount substantial and operating revenue is an important component of income statement. Therefore, we identified operating revenue as a key audit matter. | Our procedures in relation to revenue recognition included: (1)Understood, tested and evaluated the effectiveness of internal control of sales and cash receipts cycle designed and executed by the management. (2)Judged whether there is an abnormal fluctuation of revenue in the reporting period with the analytic review of revenue and gross profit margin in combination with product category. (3)Sampling inspection of supporting documents related to revenue recognition including sales contracts or orders, invoices, delivery lists or receiving reports, shipping lists and bank slips. (4)Implemented the external confirmation of selected major franchisers and inspected the payback of account receivables after the reporting period in combination with audit of accounts receivable. (5)Sampling inspection of calculation and accounting treatment of sales discount and sales allowance (6)Chose samples from sales revenue records before and after the balance sheet date, inspected related supporting documents and evaluated whether the revenue recorded in the appropriate accounting period. |
2. Existence, valuation and allocation of inventories | |
Please refer to accounting policies in Note 11 of Notes V.Significant accounting policies and accounting estimates and Note 7 of Notes Ⅶ. Notes to the Main Items of the Consolidated Financial Statements. | |
Key audit matters | How our audit addressed the key audit matter |
As at 31 December 2018, the book value of inventory is CNY 114.433 billion, accounting for 27.00% of the total assets and 38.18% of all current assets. The book value of the inventories at year end is relatively large and accounts for a | Our procedures in relation to existence, valuation, allocation of inventories included: (1)Understood and evaluated the effectiveness of management's design and implementation of inventory-related internal control. (2)Carried out the inventory analysis review |
relatively large proportion of the totalassets at year end. Therefore, theexistence, valuation and apportionmentof inventories are identified as a key auditmatter.
relatively large proportion of the total assets at year end. Therefore, the existence, valuation and apportionment of inventories are identified as a key audit matter. | procedure. (3)Implement stock-taking procedures at the end of the period. (4)Sample check of production cost calculation table and other cost accounting data, and conducted valuation test on inventory, and evaluated the accuracy of closing balance of inventory. (5)Obtained the calculation table of provision for stock obsolescence, conduct the inventory impairment test, reviewed the inventory impairment test process, and checked whether the provision for stock obsolescence is made sufficiently. |
Other information
The directors of the Company are responsible for the other information. The otherinformation comprises the information included in the annual report, but does not includethe financial statements and our auditor’s report thereon.Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.In connection with our audit of the financial statements, our responsibility is to read theother information and, in doing so, consider whether the other information is materiallyinconsistent with the financial statements or our knowledge obtained in the audit orotherwise appears to be materially misstated.If, based on the work we have performed, we conclude that there is a materialmisstatement of this other information; we are required to report that fact. We havenothing to report in this regard.
Responsibilities of directors and those charged with governance for thefinancial statements
The directors of the Company are responsible for the preparation of the financialstatements that give a true and fair view in accordance with the disclosure requirementsof Accounting Standards for Business Enterprises, and designing, implementing andmaintaining internal control that is necessary to ensure the financial statements are freefrom material misstatement, whether due to fraud or error.In preparing the financial statements, the directors are responsible for assessing theCompany’s ability to continue as a going concern, disclosing, as applicable, mattersrelated to going concern and using the going concern basis of accounting unless thedirectors either intend to liquidate the Company or to cease operations, or have norealistic alternative but to do so.Those charged with governance are responsible for overseeing the Company’s financialreporting process.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement, whether due to fraud or error,and to issue an auditor’s report that includes our opinion. Reasonable assurance is ahigh level of assurance, but is not a guarantee that an audit conducted in accordancewith CSAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if, individually or in the aggregate,they could reasonably be expected to influence the economic decisions of users taken onthe basis of these financial statements.As part of an audit in accordance with CSAs, we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
(1)Identify and assess the risks of material misstatement of the financial statements,whether due to fraud or error, design and perform audit procedures responsive to thoserisks, and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error, as fraud may involve collusion, forgery,intentional omissions, misrepresentations, or the override of internal control.
(2)Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances.
(3)Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by the directors.
(4)Conclude on the appropriateness of the directors’ use of the going concern basis ofaccounting and, based on the audit evidence obtained, whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company’sability to continue as a going concern. If we conclude that a material uncertainty exists,we are required to draw attention in our auditor’s report to the related disclosures in thefinancial statements or, if such disclosures are inadequate, to modify our opinion. Ourconclusions are based on the audit evidence obtained up to the date of our auditor’sreport. However, future events or conditions may cause the Company to cease tocontinue as a going concern.
(5)Evaluate the overall presentation, structure and content of the financial statements,including the disclosures, and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.
(6)Obtain sufficient and appropriate audit evidence regarding the financial information ofthe entities or business activities within the Company to express an opinion on thefinancial statements. We are responsible for the direction, supervision and performanceof the group audit. We remain solely responsible for our audit opinion.We communicate with those charged with governance regarding, among other matters,the planned scope and timing of the audit and significant audit findings, including anysignificant deficiencies in internal control that we identify during our audit.We also provide the governance with a statement that we have complied with relevantethical requirements regarding independence, and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence, and where applicable, related safeguards.From the matters communicated with the governance, we determine those matters thatwere of most significance in the audit of the consolidated financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in our
auditor’s report unless law or regulation precludes public disclosure about the matter orwhen, in extremely rare circumstances, we determine that a matter should not becommunicated in our report because the adverse consequences of doing so wouldreasonably be expected to outweigh the public interest benefits of such communication.
Suya Jincheng Certified Public Accountants LLPNanjing, China
Kan BaoyongCertified Public Accountant of China
Li Yan,Certified Public Accountant of China
28 April 2020
II.Financial statementsThe unit of statement in financial notes is: CNYPrepared by: Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Consolidated balance sheetAs at 31 December 2019
Unit: CNY
Item
Item | Balance as at 31 December, 2019 | Balance as at 31 December, 2018 |
Current assets: | ||
Cash and cash equivalents | 4,300,144,848.67 | 3,615,348,307.97 |
Settlement reserves | ||
Lending funds | ||
Financial assets held for trading | 17,976,767,209.45 | |
Financial assets measured at fair value through current profit or loss | ||
Derivative financial assets | ||
Notes receivables | 659,266,780.81 | 242,542,097.76 |
Accounts receivables | 16,080,618.65 | 5,419,314.60 |
Account receivables financing | ||
Prepayment | 200,115,325.19 | 18,984,169.54 |
Premiums receivable | ||
Reinsurance accounts receivable | ||
Reinsurance contract reserve | ||
Other receivables | 37,521,590.52 | 47,908,184.37 |
Including:Interests receivable
Including:Interests receivable | ||
Dividends receivable | ||
Buying back the sale of financial assets | ||
Inventories | 14,433,244,696.27 | 13,892,118,587.74 |
Contract assets | ||
Assets held for sale | ||
Non-current assets due within one year | 1,120,000,000.00 | |
Other current assets | 183,119,654.47 | 16,932,480,348.96 |
Total current assets | 37,806,260,724.03 | 35,874,801,010.94 |
Non-current assets: | ||
Disbursement of loans and advances | ||
Investment in debt instruments | ||
Available-for-sale financial assets | 2,713,455,624.66 | |
Investment in other debt instruments | ||
Held-to-maturity investments | ||
Long-term receivables | ||
Long-term equity investments | 25,361,651.38 | 9,423,328.82 |
Investment in other equity instruments | ||
Other non-current financial assets | 5,050,851,671.16 | |
Investment property | ||
Fixed assets | 7,256,557,503.85 | 7,833,665,282.19 |
Construction in progress | 263,153,505.12 | 154,535,104.82 |
Productive biological assets | ||
Oil and gas assets | ||
Right-of-use asset | ||
Intangible assets | 1,747,134,144.14 | 1,781,961,687.10 |
Development expenses | ||
Goodwill | 276,001,989.95 | 276,001,989.95 |
Long-term deferred expenses | 254,143.60 | 907,636.00 |
Deferred tax assets | 825,064,057.57 | 714,003,966.82 |
Other non-current assets | 204,398,450.18 | 205,012,184.92 |
Total non-current assets | 15,648,777,116.95 | 13,688,966,805.28 |
Total assets | 53,455,037,840.98 | 49,563,767,816.22 |
Current liabilities: | ||
Short-term loans | ||
Borrowings from the central bank | ||
Loans from other banks | ||
Financial liabilities held for trading | ||
Financial liabilities measured at fair value through current profit or loss | ||
Derivative financial liabilities | ||
Notes payable | ||
Accounts payables | 1,330,649,116.82 | 1,261,282,397.89 |
Advance from customer | 6,753,595,187.64 | 4,468,409,150.75 |
Contract liabilities | ||
Financial assets sold for repurchase | ||
Customer brokerage deposits | ||
Securities underwriting brokerage deposits |
Receivings from vicariously soldsecurities
Receivings from vicariously sold securities | ||
Employee benefits payable | 116,094,163.25 | 185,751,373.59 |
Taxes payable | 1,815,288,006.47 | 3,255,458,759.72 |
Other payables | 6,521,146,762.07 | 6,457,301,511.01 |
Including:Interests payable | ||
Dividends payable | ||
Handling charges and commissions payable | ||
Reinsurance accounts payables | ||
Liabilities held for sale | ||
Non-current liabilities due within one year | ||
Other current liabilities | ||
Total current liabilities | 16,536,773,236.25 | 15,628,203,192.96 |
Non-current liabilities: | ||
Insurance contract reserves | ||
Long-term loans | 72,723.00 | 109,088.00 |
Bonds payable | ||
Including: Preference shares | ||
Perpetual bonds | ||
Lease liabilities | ||
Long-term payables | 197,623,728.85 | 198,404,248.85 |
Long-term payroll payables | ||
Accrued liabilities | ||
Deferred income | 89,756,500.00 | 98,513,500.00 |
Deferred tax liabilities | 139,259,083.16 | 14,019,256.05 |
Other non-current liabilities | ||
Total non-current liabilities | 426,712,035.01 | 311,046,092.90 |
Total liabilities | 16,963,485,271.26 | 15,939,249,285.86 |
Shareholders' equity | ||
Share capital | 1,506,988,000.00 | 1,506,988,000.00 |
Other equity instruments | ||
Including: preference shares | ||
Perpetual bonds | ||
Capital reserves | 741,532,550.13 | 741,704,076.44 |
Less: treasury stock | ||
Other comprehensive income | -3,608,771.16 | -141,964,710.15 |
Special reserves | ||
Surplus reserves | 753,494,000.00 | 753,494,000.00 |
General risk reserve | ||
Undistributed profits | 33,510,429,712.50 | 30,784,308,899.94 |
Total equity attributable to owners of the parent company | 36,508,835,491.47 | 33,644,530,266.23 |
Non-controlling interests | -17,282,921.75 | -20,011,735.87 |
Total owners' equity | 36,491,552,569.72 | 33,624,518,530.36 |
Total liabilities and owners' equity | 53,455,037,840.98 | 49,563,767,816.22 |
Legal representative: Wang YaoPerson in charge of accounting affairs: Cong XuenianPerson in charge of accounting department: Yin Qiuming
Balance sheet of parent company
As at 31 December 2019
Unit: CNY
Item
Item | Balance as at 31 December 2019 | Balance as at 31 December 2018 |
Current assets: | ||
Cash and cash equivalents | 3,741,676,596.22 | 1,849,574,170.07 |
Financial assets held for trading | 6,991,814,305.98 | |
Financial assets measured at fair value through current profit or loss | ||
Derivative financial assets | ||
Notes receivables | 493,500.00 | 143,456,446.32 |
Accounts receivables | 900,252,229.11 | 697,277,202.71 |
Account receivables financing | ||
Prepayment | 110,564,280.51 | 250,592,759.90 |
Other receivables | 8,154,899,373.55 | 949,089,213.52 |
Including:Interests receivable | ||
Dividends receivable | 713,143.77 | |
Inventories | 10,476,945,420.09 | 10,378,077,915.50 |
Contract assets | ||
Assets held for sale | ||
Non-current assets due within one year | 700,000,000.00 | |
Other current assets | 303,163.88 | 12,338,796,250.84 |
Total current assets | 30,376,948,869.34 | 27,306,863,958.86 |
Non-current assets: | ||
Investment in debt instruments | ||
Available-for-sale financial assets | 1,231,283,468.30 | |
Investment in other debt instruments | ||
Held-to-maturity investments | ||
Long-term receivables | ||
Long-term equity investments | 7,964,291,378.23 | 7,365,139,180.24 |
Investment in other equity instruments | ||
Other non-current financial assets | 1,467,783,926.91 | |
Investment property | ||
Fixed assets | 4,641,909,489.16 | 5,008,615,512.59 |
Construction in progress | 183,652,813.42 | 92,262,796.92 |
Productive biological assets | ||
Oil and gas assets | ||
Right-of-use asset | ||
Intangible assets | 1,230,216,202.93 | 1,252,482,032.31 |
Development expenses | ||
Goodwill | ||
Long-term deferred expenses | ||
Deferred tax assets | 6,181,509.39 | 5,734,535.64 |
Other non-current assets | 170,318,838.68 | 179,613,182.42 |
Total Non-current Assets | 15,664,354,158.72 | 15,135,130,708.42 |
Total Assets | 46,041,303,028.06 | 42,441,994,667.28 |
Current liabilities: | ||
Short-term loans | ||
Financial liabilities held for trading | ||
Financial liabilities measured at fair value through current profit or loss |
Derivative financial liabilities
Derivative financial liabilities | ||
Notes payable | ||
Accounts payables | 1,066,947,279.95 | 1,159,053,261.86 |
Advance from customer | 16,238,064,053.40 | 14,339,833,591.92 |
Contract liabilities | ||
Employee benefits payable | ||
Taxes payable | 202,771,495.61 | 1,069,550,625.85 |
Other payables | 180,236,563.85 | 183,715,786.65 |
Including:Interests payable | ||
Dividends payable | ||
Liabilities held for sale | ||
Non-current liabilities due within one year | ||
Other current liabilities | ||
Total current liabilities | 17,688,019,392.81 | 16,752,153,266.28 |
Non-current liabilities: | ||
Long-term loans | 72,723.00 | 109,088.00 |
Bonds payable | ||
Including:preference shares | ||
Perpetual bonds | ||
Lease liabilities | ||
Long-term payables | 144,680,616.65 | 145,105,136.65 |
Long-term payroll payables | ||
Provisions | ||
Deferred income | ||
Deferred tax liabilities | 49,541,198.05 | |
Other non-current liabilities | ||
Total non-current liabilities | 194,294,537.70 | 145,214,224.65 |
Total liabilities | 17,882,313,930.51 | 16,897,367,490.93 |
Owners' equity (or shareholders' equity) | ||
Share capital | 1,506,988,000.00 | 1,506,988,000.00 |
Other equity instruments | ||
Including: preference shares | ||
Perpetual bonds | ||
Capital reserves | 1,341,628,480.93 | 1,341,628,480.93 |
Less: treasury stock | ||
Other comprehensive income | ||
Special reserves | ||
Surplus reserves | 753,494,000.00 | 753,494,000.00 |
Undistributed profits | 24,556,878,616.62 | 21,942,516,695.42 |
Total owners' equity | 28,158,989,097.55 | 25,544,627,176.35 |
Total liabilities and owners' equity | 46,041,303,028.06 | 42,441,994,667.28 |
Consolidated Income StatementFor the year ended 31 December 2019
Unit: CNY
Item | Year 2019 | Year 2018 |
1. Total operating revenue | 23,126,476,885.07 | 24,159,801,994.68 |
Including:Operating revenue | 23,126,476,885.07 | 24,159,801,994.68 |
Interest income | ||
Earned premium |
Fee and commission income
Fee and commission income | ||
2. Total operating costs | 14,457,584,017.39 | 14,351,265,484.05 |
Including: cost of sales | 6,626,362,251.24 | 6,353,242,198.27 |
Interest expense | ||
Handling charges and commission expenses | ||
Refunded premiums | ||
Net payments for insurance claims | ||
Net provision for insurance contracts | ||
Bond insurance expense | ||
Reinsurance expenses | ||
Taxes and surcharges | 3,201,479,826.09 | 3,769,929,974.08 |
Selling and distribution expenses | 2,691,711,170.59 | 2,561,401,628.22 |
General and administrative expenses | 1,856,491,727.00 | 1,704,265,102.61 |
Research and Development expenses | 159,965,593.88 | 27,565,217.63 |
Financial expenses | -78,426,551.41 | -65,138,636.76 |
Including:Interest expenses | 2,618.00 | 3,273.00 |
Interest income | 77,589,503.94 | 69,133,580.05 |
Plus: Other income | 84,977,755.15 | 63,352,983.06 |
Investment income ("-" for losses) | 850,554,207.62 | 918,292,794.49 |
Including: income from investment in associates and joint ventures | -4,447,288.34 | 1,819,591.30 |
Disposal of financial instruments at amortised cost ("-" for losses) | ||
Foreign exchange gains ("-" for losses) | ||
Net exposure to hedging gains("-"for loss) | ||
Gains from the changes in fair values (“-“ for losses) | 158,679,505.33 | |
Losses from credit impairment ("-" for losses) | -18,956,346.26 | |
Losses from asset impairment ("-" for losses) | -2,248,496.85 | -1,098,948.45 |
Gains from disposal of assets ("-" for losses) | 19,983,101.67 | 24,568,477.22 |
3. Operating profits ("-" for losses) | 9,761,882,594.34 | 10,813,651,816.95 |
Plus: non-operating income | 22,245,954.37 | 37,931,006.18 |
Less: non-operating expenses | 13,324,291.70 | 12,397,034.29 |
4. Total profits before tax ("-" for total losses) | 9,770,804,257.01 | 10,839,185,788.84 |
Less: income tax expenses | 2,384,713,341.80 | 2,723,855,894.34 |
5. Net profit ("-" for net loss) | 7,386,090,915.21 | 8,115,329,894.50 |
Classification by operating continuity | ||
Net profit from continuing operation ("-" for losses) | 7,386,090,915.21 | 8,115,329,894.50 |
Net profit from discontinued operation ("-" for losses) | ||
Classification by owners | ||
Attributable to owners of the parent company | 7,382,822,726.87 | 8,115,189,794.69 |
Attributable to non-controlling interests | 3,268,188.34 | 140,099.81 |
6.Net of tax from other | -2,228,748.45 | -142,861,056.33 |
comprehensive income
comprehensive income | ||
Net of tax from other comprehensive income to the owner of the parent company | -2,238,030.31 | -142,880,414.18 |
Other comprehensive income cannot reclassified into the profit and loss: | ||
Including: Changes in remeasured defined benefit obligations | ||
Share in other comprehensive income that cannot be classified into profit and loss under equity method | ||
Changes in the fair value of other equity instruments | ||
Fair value changes in enterprise's own credit risk | ||
Others | ||
Other comprehensive income that will be reclassified into the profit and loss | -2,238,030.31 | -142,880,414.18 |
Including: Share in other comprehensive income that will be classified into profit and loss under equity method | 178,619.29 | |
Net gain on debt instruments at fair value through other comprehensive income | ||
Profit and loss of fair value changes of financial assets available for sale | -140,593,969.30 | |
The amount of financial assets reclassified into other comprehensive income | ||
Hold-to-maturity investments are reclassified as gains and losses on financial assets available for sal | ||
Other debt investment credit impairment provision | ||
Cash flow hedging reserve | ||
Balance arising from the translation of foreign currency financial statements | -2,416,649.60 | -2,286,444.88 |
Others | ||
Net of tax from other comprehensive income to non-controlling interests | 9,281.86 | 19,357.85 |
7. Total comprehensive income | 7,383,862,166.76 | 7,972,468,838.17 |
Total comprehensive income attributable to owners of the parent company | 7,380,584,696.56 | 7,972,309,380.51 |
Total comprehensive income attributable to non-controlling interests | 3,277,470.20 | 159,457.66 |
8. Earnings per share | ||
(1) Basic earnings per share | 4.8991 | 5.3850 |
(2) Diluted earnings per share | 4.8991 | 5.3850 |
Where an enterprise is merged under the same control in the current period, the net profitrealized by the merged party before the merger is: CNY 0.00, and the net profit realizedby the merged party in the previous period is: CNY 0.00.Legal representative: Wang YaoPerson in charge of accounting affairs: Cong Xuenian
Person in charge of accounting department: Yin Qiuming
Income statement of parent companyFor the year ended 31 December 2019
Unit: CNY
Item
Item | Year 2019 | Year 2018 |
1. Operating revenue | 9,617,136,329.14 | 9,720,079,677.82 |
Less:Cost of sales | 5,300,856,882.21 | 5,063,636,970.41 |
Taxes and surcharges | 2,584,040,346.46 | 3,135,358,096.00 |
Selling and distribution expenses | 6,153,145.12 | |
General and administrative expenses | 981,489,516.86 | 925,750,206.21 |
Research and Development expenses | 157,807,557.00 | 25,250,014.30 |
Financial expenses | -56,610,787.22 | -39,822,309.22 |
Including: Interest expenses | 2,618.00 | 3,273.00 |
Interest income | 58,715,233.69 | 40,645,696.27 |
Plus: Other income | 15,964,590.12 | 10,553,184.71 |
Investment income ("-" for losses) | 6,858,473,174.64 | 6,719,750,712.77 |
Including: income from investment in associates and joint ventures | ||
Disposal of financial instruments at amortised cost ("-" for losses) | ||
Net exposure to hedging gains ("-"for loss) | ||
Gains from the changes in fair values (“-“ for losses) | -106,912,987.67 | |
Losses from credit impairment ("-" for losses) | -3,495,447.82 | |
Losses from asset impairment ("-" for losses) | -2,248,496.85 | -291,592.62 |
Gains from disposal of assets ("-" for losses) | 9,155,544.78 | 26,210,243.55 |
2. Operating profits ("-" For Losses) | 7,414,336,045.91 | 7,366,129,248.53 |
Plus: non-operating income | 3,926,021.74 | 4,826,890.48 |
Less: non-operating expenses | 4,260,647.57 | 11,501,547.44 |
3. Total profits before tax ("-" For Total Losses) | 7,414,001,420.08 | 7,359,454,591.57 |
Less: income tax expenses | 207,035,832.38 | 311,578,769.83 |
4. Net profit ("-" For Net Loss) | 7,206,965,587.70 | 7,047,875,821.74 |
Net profit from continuing operation ("-" for losses) | 7,206,965,587.70 | 7,047,875,821.74 |
Net profit from discontinued operation ("-" for losses) | ||
5.Net of tax from other comprehensive income | ||
Other comprehensive income cannot reclassified into the profit and loss: | ||
Including: Changes in remeasured defined benefit obligations | ||
Other comprehensive income that cannot be transferred under the equity method |
Net gain on equity instrument at fairvalue through other comprehensiveincome
Net gain on equity instrument at fair value through other comprehensive income | ||
Fair value changes in enterprise's own credit risk | ||
Others | ||
Other comprehensive income that will be reclassified into the profit and loss | ||
Including: Share in other comprehensive income that will be classified into profit and loss under equity method | ||
Net gain on debt instruments at fair value through other comprehensive income | ||
Profit and loss of fair value changes of financial assets available for sale | ||
The amount of financial assets reclassified into other comprehensive income | ||
Hold-to-maturity investments are reclassified as gains and losses on financial assets available for sale | ||
Other debt investment credit impairment provision | ||
Cash flow hedging reserve | ||
Balance arising from the translation of foreign currency financial statements | ||
others | ||
6. Total comprehensive income | 7,206,965,587.70 | 7,047,875,821.74 |
7. Earnings per share | ||
(1)Basic earnings per share | ||
(2)Diluted earnings per share |
Consolidated Statement of Cash Flows
For the year ended 31 December 2019
Unit: CNY
Item | Year 2019 | Year 2018 |
1. Cash flows from operating activities | ||
Cash received from sale of goods and rendering of services | 28,157,803,517.41 | 28,105,243,671.54 |
Net increase in customer bank deposits and placement from banks and other financial institutions | ||
Net increase in loans from central bank | ||
Net increase in loans from other financial institutions | ||
Premiums received from original insurance contracts | ||
Net cash received from reinsurance business |
Net increase in deposits andinvestments from policyholders
Net increase in deposits and investments from policyholders | ||
Cash received from interest, handling charges and commissions | ||
Net increase in placements from other financial institutions | ||
Net capital increase in repurchase business | ||
Net cash received for the sale of securities | ||
Refunds of taxes and surcharges | ||
Cash received from other operating activities | 260,350,164.67 | 1,493,570,444.98 |
Sub-total of cash inflows from operating activities | 28,418,153,682.08 | 29,598,814,116.52 |
Cash paid for goods purchased and services received | 6,764,469,880.73 | 7,042,490,432.34 |
Net increase in loans and advances to customers | ||
Net increase in deposits in central bank and other banks and financial institutions | ||
Cash paid for original insurance contract claims | ||
A net increase in divested funds | ||
Cash paid for interests, handling charges and commissions | ||
Cash paid for policy dividends | ||
Cash paid to and on behalf of employees | 2,248,376,328.48 | 1,786,871,082.15 |
Cash paid for taxes and surcharges | 9,642,918,810.91 | 8,525,778,929.78 |
Cash paid for other operating activities | 2,964,496,790.55 | 3,186,924,855.97 |
Sub-total of cash outflows from operating activities | 21,620,261,810.67 | 20,542,065,300.24 |
Net cash flows from operating activities | 6,797,891,871.41 | 9,056,748,816.28 |
2. Cash flows from investing activities | ||
Cash received from disposal of investments | 39,845,997,675.65 | 34,357,728,481.60 |
Cash received from returns on investments | 828,033,083.69 | 859,477,665.90 |
Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 24,075,082.94 | 45,125,913.95 |
Net cash received from disposal of subsidiaries and other business units | ||
Cash received from other investing activities | ||
Sub-total of cash inflows from investing activities | 40,698,105,842.28 | 35,262,332,061.45 |
Cash paid to acquire and construct fixed assets, intangible assets and other long-term assets | 317,159,366.30 | 471,045,188.55 |
Cash paid for investments | 41,674,161,609.88 | 38,140,628,997.25 |
Net increase in pledge loans
Net increase in pledge loans | ||
Net cash paid to acquire subsidiaries and other business units | ||
Cash paid for other investing activities | ||
Sub-total of cash outflows from investing activities | 41,991,320,976.18 | 38,611,674,185.80 |
Net cash flows from investing activities | -1,293,215,133.90 | -3,349,342,124.35 |
3. Cash flows from financing activities | ||
Cash received from investors | ||
Including: cash received by subsidiaries from investments by minority shareholders | ||
Cash received from borrowings | ||
Cash received from other financing activities | 1,500,000.00 | |
Sub-total of cash inflows from financing activities | 1,500,000.00 | |
Cash paid for debt repayments | 36,365.00 | 36,364.00 |
Cash paid for distribution of dividends and profits or payment of interest | 4,822,364,218.00 | 3,842,822,673.00 |
Including: dividends and profits paid to minority shareholders by subsidiaries | ||
Cash paid for other financing activities | 750,000.00 | |
Sub-total of cash outflows from financing activities | 4,823,150,583.00 | 3,842,859,037.00 |
Net cash flows from financing activities | -4,823,150,583.00 | -3,841,359,037.00 |
4. Effect of fluctuation in exchange rate on cash and cash equivalents | 3,270,386.19 | -652,223.14 |
5. Net increase in cash and cash equivalents | 684,796,540.70 | 1,865,395,431.79 |
Plus: balance of cash and cash equivalents at the beginning of the period | 3,615,348,307.97 | 1,749,952,876.18 |
6. Balance of cash and cash equivalents at the end of the period | 4,300,144,848.67 | 3,615,348,307.97 |
Cash flow statements of parent company
For the year ended 31 December 2019Unit: CNY
Item | Year 2019 | Year 2018 |
1. Cash flows from operating activities | ||
Cash received from sale of goods and rendering of services | 12,584,198,907.24 | 10,544,075,256.24 |
Refunds of taxes and surcharges | ||
Cash received from other operating | 132,079,899.80 | 3,092,072,776.21 |
activities
activities | ||
Sub-total of cash inflows from operating activities | 12,716,278,807.04 | 13,636,148,032.45 |
Cash paid for goods purchased and services received | 4,836,044,878.55 | 5,540,860,474.37 |
Cash paid to and on behalf of employees | 1,068,195,037.31 | 757,469,214.50 |
Cash paid for taxes and surcharges | 4,436,521,595.18 | 3,502,337,711.58 |
Cash paid for other operating activities | 7,532,523,407.67 | 622,232,077.34 |
Sub-total of cash outflows from operating activities | 17,873,284,918.71 | 10,422,899,477.79 |
Net cash flows from operating activities | -5,157,006,111.67 | 3,213,248,554.66 |
2. Cash flows from investing activities | ||
Cash received from disposal of investments | 22,661,938,083.48 | 23,961,387,686.52 |
Cash received from returns on investments | 6,816,504,503.68 | 6,665,894,034.18 |
Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 11,230,158.55 | 43,946,408.08 |
Net cash received from disposal of subsidiaries and other business units | ||
Cash received from other investing activities | ||
Sub-total of cash inflows from investing activities | 29,489,672,745.71 | 30,671,228,128.78 |
Cash paid to acquire and construct fixed assets, intangible assets and other long-term assets | 218,187,673.01 | 217,004,834.57 |
Cash paid for investments | 17,400,106,712.99 | 29,083,948,000.00 |
Net cash paid to acquire subsidiaries and other business units | ||
Cash paid for other investing activities | ||
Sub-total of cash outflows from investing activities | 17,618,294,386.00 | 29,300,952,834.57 |
Net cash flows from investing activities | 11,871,378,359.71 | 1,370,275,294.21 |
3. Cash flows from financing activities | ||
Cash received from investors | ||
Cash received from loans | ||
Cash received from other financing activities | ||
Sub-total of cash inflows from financing activities | ||
Cash paid for debt repayments | 36,365.00 | 36,364.00 |
Cash paid for distribution of dividends and profits or payment of interest | 4,822,364,218.00 | 3,842,822,673.00 |
Cash paid for other financing activities |
Sub-total of cash outflows fromfinancing activities
Sub-total of cash outflows from financing activities | 4,822,400,583.00 | 3,842,859,037.00 |
Net cash flows from financing activities | -4,822,400,583.00 | -3,842,859,037.00 |
4. Effect of fluctuation in exchange rate on cash and cash equivalents | 130,761.11 | -652,488.00 |
5. Net increase in cash and cash equivalents | 1,892,102,426.15 | 740,012,323.87 |
Plus: balance of cash and cash equivalents at the beginning of the period | 1,849,574,170.07 | 1,109,561,846.20 |
6. Balance of cash and cash equivalents at the end of the period | 3,741,676,596.22 | 1,849,574,170.07 |
Consolidated statement of changes in shareholders' equity
For the year ended 31 December 2019
Unit: CNY
Item
Item | Year 2019 | ||||||||||||||
Equity attributable to owners of the parent company | Non-controlling interests | Total shareholders' equity | |||||||||||||
Share capital | Other equity instruments | Capital reserve | Less:Treasury stock | Other Comprehensive Income | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | Others | Subtotal | |||||
Preferred stock | Perpetual bond | Others | |||||||||||||
1. Balance as at 31 December of last year | 1,506,988,000.00 | 741,704,076.44 | -141,964,710.15 | 753,494,000.00 | 30,784,308,899.94 | 33,644,530,266.23 | -20,011,735.87 | 33,624,518,530.36 | |||||||
Plus: adjustments for changes in accounting policies | 140,593,969.30 | 165,659,685.69 | 306,253,654.99 | 29,817.62 | 306,283,472.61 | ||||||||||
Adjustments for correction of accounting errors in prior year | |||||||||||||||
Business combinations under common control | |||||||||||||||
Others | |||||||||||||||
2. Balance as at January 1 of the current | 1,506,988,000.00 | 741,704,076.44 | -1,370,740.85 | 753,494,000.00 | 30,949,968,585.63 | 33,950,783,921.22 | -19,981,918.25 | 33,930,802,002.97 |
year
year | |||||||||||||||
3.Increases/decreases in the current year (“-” for decreases) | -171,526.31 | -2,238,030.31 | 2,560,461,126.87 | 2,558,051,570.25 | 2,698,996.50 | 2,560,750,566.75 | |||||||||
(1) Total comprehensive income | -2,238,030.31 | 7,382,822,726.87 | 7,380,584,696.56 | 3,277,470.20 | 7,383,862,166.76 | ||||||||||
(2) Capital contributed or reduced by owners | -171,526.31 | -171,526.31 | -578,473.70 | -750,000.01 | |||||||||||
Capital contributions by owners | |||||||||||||||
Capital contributions by other equity instruments holders | |||||||||||||||
Amounts of share-based payments recognized in owners' equity | |||||||||||||||
Others | -171,526.31 | -171,526.31 | -578,473.70 | -750,000.01 | |||||||||||
(3) Profit distribution | -4,822,361,600.00 | -4,822,361,600.00 | -4,822,361,600.00 | ||||||||||||
Withdrawal of |
surplusreserves
surplus reserves | |||||||||||||||
Withdrawal of general risk reserve | |||||||||||||||
Profit distributed to owners (or shareholders) | -4,822,361,600.00 | -4,822,361,600.00 | -4,822,361,600.00 | ||||||||||||
Others | |||||||||||||||
(4) Internal carry-forward of owners' equity | |||||||||||||||
Conversion of capital reserves into paid-in capital | |||||||||||||||
Conversion of surplus reserves into paid-in capital | |||||||||||||||
Surplus reserves offsetting losses | |||||||||||||||
Amount of Changes in setting benefit plan transfer to retained earnings | |||||||||||||||
Other |
comprehensive incometransferred toretainedearnings
comprehensive income transferred to retained earnings | |||||||||||||||
Others | |||||||||||||||
(5) Special reserves | |||||||||||||||
Withdrawal for the period | |||||||||||||||
Use for the period | |||||||||||||||
Others | |||||||||||||||
4. Balance as at 31 December of the current year | 1,506,988,000.00 | 741,532,550.13 | -3,608,771.16 | 753,494,000.00 | 33,510,429,712.50 | 36,508,835,491.47 | -17,282,921.75 | 36,491,552,569.72 |
Item | Year 2018 | ||||||||||||||
Equity attributable to owners of the parent company | Non-controlling interests | Total shareholders' equity | |||||||||||||
Share capital | Other equity instruments | Capital reserve | Less:Treasury stock | Other Comprehensive Income | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | Others | Subtotal | |||||
Preferred stock | Perpetual bond | Others | |||||||||||||
1. Balance as at 31 December of last year | 1,506,988,000.00 | 741,704,076.44 | 915,704.03 | 753,494,000.00 | 26,511,938,505.25 | 29,515,040,285.72 | -20,171,193.53 | 29,494,869,092.19 | |||||||
Plus: adjustments for changes in |
accountingpolicies
accounting policies | |||||||||||||||
Adjustments for correction of accounting errors in prior year | |||||||||||||||
Business combinations under common control | |||||||||||||||
Others | |||||||||||||||
2. Balance as at January 1 of the current year | 1,506,988,000.00 | 741,704,076.44 | 915,704.03 | 753,494,000.00 | 26,511,938,505.25 | 29,515,040,285.72 | -20,171,193.53 | 29,494,869,092.19 | |||||||
3.Increases/decreases in the current year (“-” for decreases) | -142,880,414.18 | 4,272,370,394.69 | 4,129,489,980.51 | 159,457.66 | 4,129,649,438.17 | ||||||||||
(1) Total comprehensive income | -142,880,414.18 | 8,115,189,794.69 | 7,972,309,380.51 | 159,457.66 | 7,972,468,838.17 | ||||||||||
(2) Capital contributed or reduced by owners | |||||||||||||||
Capital contributions by owners | |||||||||||||||
Capital contributions |
by otherequityinstrumentsholders
by other equity instruments holders | |||||||||||||||
Amounts of share-based payments recognized in owners' equity | |||||||||||||||
Others | |||||||||||||||
(3) Profit distribution | -3,842,819,400.00 | -3,842,819,400.00 | -3,842,819,400.00 | ||||||||||||
Withdrawal of surplus reserves | |||||||||||||||
Withdrawal of general risk reserve | |||||||||||||||
Profit distributed to owners (or shareholders) | -3,842,819,400.00 | -3,842,819,400.00 | -3,842,819,400.00 | ||||||||||||
Others | |||||||||||||||
(4) Internal carry-forward of owners' equity | |||||||||||||||
Conversion of capital reserves into paid-in capital | |||||||||||||||
Conversion of surplus |
reserves intopaid-in capital
reserves into paid-in capital | |||||||||||||||
Surplus reserves offsetting losses | |||||||||||||||
Carry-forward of retained earnings from changes in defined benefit plans | |||||||||||||||
Other comprehensive income transferred to retained earnings | |||||||||||||||
Others | |||||||||||||||
(5) Special reserves | |||||||||||||||
Withdrawal for the period | |||||||||||||||
Use for the period | |||||||||||||||
(6) Others | |||||||||||||||
4. Balance as at 31 December of the current year | 1,506,988,000.00 | 741,704,076.44 | -141,964,710.15 | 753,494,000.00 | 30,784,308,899.94 | 33,644,530,266.23 | -20,011,735.87 | 33,624,518,530.36 |
Statement of changes in shareholders' equity of parent company
For the year ended 31 December 2019
Unit: CNY
Item
Item | Year 2019 | |||||||||||
Share capital | Other equity instruments | Capital reserve | Less:Treasury stock | Other Comprehensive Income | Special reserve | Surplus reserve | Undistributed profit | Others | Total shareholders' equity | |||
Preferred stock | Perpetual bond | Others | ||||||||||
1. Balance as at 31 December of last year | 1,506,988,000.00 | 1,341,628,480.93 | 753,494,000.00 | 21,942,516,695.42 | 25,544,627,176.35 | |||||||
Plus: adjustments for changes in accounting policies | 229,757,933.50 | 229,757,933.50 | ||||||||||
adjustments for correction of accounting errors in prior year | ||||||||||||
Others | ||||||||||||
2. Balance as at January 1 of the current year | 1,506,988,000.00 | 1,341,628,480.93 | 753,494,000.00 | 22,172,274,628.92 | 25,774,385,109.85 | |||||||
3.Increases/decreases in the current year (“-” for decreases) | 2,384,603,987.70 | 2,384,603,987.70 | ||||||||||
(1) Total comprehensive income | 7,206,965,587.70 | 7,206,965,587.70 | ||||||||||
(2) Capital contributed or reduced by owners | ||||||||||||
Capital contributions by owners (common stock) | ||||||||||||
Capital contributions by other equity instruments holders |
Amounts of share-basedpayments recognized inowners' equity
Amounts of share-based payments recognized in owners' equity | ||||||||||||
Others | ||||||||||||
(3)Profit distribution | -4,822,361,600.00 | -4,822,361,600.00 | ||||||||||
Withdrawal of surplus reserves | ||||||||||||
Profit distributed to owners (or shareholders) | -4,822,361,600.00 | -4,822,361,600.00 | ||||||||||
Others | ||||||||||||
(4) Internal carry-forward of owners' equity | ||||||||||||
Conversion of capital reserves into paid-in capital | ||||||||||||
Conversion of surplus reserves into paid-in capital | ||||||||||||
Surplus reserves offsetting losses | ||||||||||||
Amount of Changes in setting benefit plan transfer to retained earnings | ||||||||||||
Other comprehensive income transferred to retained earnings | ||||||||||||
Others | ||||||||||||
(5) Special reserves | ||||||||||||
Withdrawal for the period |
Use for the period
Use for the period | ||||||||||||
(6) Others | ||||||||||||
4. Balance as at 31 December of the current year | 1,506,988,000.00 | 1,341,628,480.93 | 753,494,000.00 | 24,556,878,616.62 | 28,158,989,097.55 |
Statement of Changes in Shareholders' Equity
For the year ended 31 December 2018
Unit: CNY
Item | Year 2018 | |||||||||||
Share capital | Other equity instruments | Capital reserve | Less:Treasury stock | Other Comprehensive Income | Special reserve | Surplus reserve | Undistributed profit | Others | Total shareholders' equity | |||
Preferred stock | Perpetual bond | Others | ||||||||||
1. Balance as at 31 December of last year | 1,506,988,000.00 | 1,341,628,480.93 | 753,494,000.00 | 18,737,460,273.68 | 22,339,570,754.61 | |||||||
Plus: adjustments for changes in accounting policies | ||||||||||||
adjustments for correction of accounting errors in prior year | ||||||||||||
Others | ||||||||||||
2. Balance as at January 1 of the current year | 1,506,988,000.00 | 1,341,628,480.93 | 753,494,000.00 | 18,737,460,273.68 | 22,339,570,754.61 | |||||||
3.Increases/decreases in the current year (“-” for decreases) | 3,205,056,421.74 | 3,205,056,421.74 | ||||||||||
(1) Total comprehensive income | 7,047,875,821.74 | 7,047,875,821.74 | ||||||||||
(2) Capital contributed or |
reduced by owners
reduced by owners | ||||||||||||
Capital contributions by owners (common stock) | ||||||||||||
Capital contributions by other equity instruments holders | ||||||||||||
Amounts of share-based payments recognized in owners' equity | ||||||||||||
Others | ||||||||||||
(3)Profit distribution | -3,842,819,400.00 | -3,842,819,400.00 | ||||||||||
Withdrawal of surplus reserves | ||||||||||||
Profit distributed to owners (or shareholders) | -3,842,819,400.00 | -3,842,819,400.00 | ||||||||||
Others | ||||||||||||
(4) Internal carry-forward of owners' equity | ||||||||||||
Conversion of capital reserves into paid-in capital | ||||||||||||
Conversion of surplus reserves into paid-in capital | ||||||||||||
Surplus reserves offsetting losses | ||||||||||||
Amount of Changes in setting benefit plan transfer to retained earnings |
Other comprehensiveincome transferred toretained earnings
Other comprehensive income transferred to retained earnings | ||||||||||||
Others | ||||||||||||
(5) Special reserves | ||||||||||||
Withdrawal for the period | ||||||||||||
Use for the period | ||||||||||||
(6) Others | ||||||||||||
4. Balance as at 31 December of the current year | 1,506,988,000.00 | 1,341,628,480.93 | 753,494,000.00 | 21,942,516,695.42 | 25,544,627,176.35 |
III. Company profile
Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.(hereinafter referred to as “the Company”)was established on 26 December 2002, verified by the Government of Jiangsu Province,details referred to Reply on The approval of Establishment of Jiangsu Yanghe BreweryJoint-Stock Co., Ltd. by the provincial government (SuZhengFu [2002]No.155), and itwas a joint-stock company founded by Jiangsu Yanghe Group Co.,Ltd., Shanghai HaiyanLogistics Development Co.,Ltd., Nantong Zongyi Investment Co.,Ltd.,Shanghai JieqiangTobacco Sugar & Wine (Group) Co.,Ltd., Jiangsu Venture Capital Co.,Ltd., ChinaNational Research Institute of Food and Fermentation Industries Co. Ltd., NantongShengfu Industrial Trade Co., Ltd. and Yang Yandong and other totally 14 naturepersons. On 27 December, the Compamy obtained the unified social credit code(91460000201357188U) issued by Jiangsu Provincial Administration for Industry andCommerce. The registered capital was CNY 68 million and the share capital was68,000,000 (CNY 1 per share). According to the documents verified by Jiangsu ProvincialDepartment of Finance (Su Cai Guo Zi [2002] No.178), all the fund capital converts intoshare capital according to the ratio 1:0.65561, among which, Jiangsu Yanghe GroupCo.,Ltd contributed CNY 52,264,100 of evaluated physical assets and CNY 735,900 ofcurrency, covered into 34,747,330 shares, accounting for 51.099% of the total sharecapital; Shanghai Haiyan Logistics Development Co.,Ltd contributed CNY 15,000,000 ofcurrency, convered into 9,834,150 shares, accounting for the 14.462% of the total sharecapital; Nantong Zongyi Investment Co.,Ltd. contributed CNY 15,000,000 of currency,converted into 9,834,150 shares, accounting for 14.462% of the total share capital;ShangHai Jieqiang Tobacco Sugar & Wine (Group) Co.,Ltd. contributed CNY 7,000,000of currency converted into 4,589,270 shares, accounting for 6.749% of the total sharecapital; Jiangsu Venture Capital Co.,Ltd. contributed CNY 3,000,000 of currencyconcerted into 1,966,830 shares, accounting for 2.892% of the total share capital; ChinaNational Research Institute of Food and Fermentation Industries Co. Ltd. contributedCNY 1,000,000 of currency, converted into 655,611 shares, accounting for 0.964% of thetotal share capital; Nantong Shengfu Industrial Trade Co., Ltd. contributed CNY1,000,000 of currency, converted into 655,611 shares, accounting for 0.964% of the totalshare capital; Yang Yandong and other totally 14 nature persons contributed CNY8,720,200 of currency, converted into 5,717,050 shares, accounting for 8.408% of thetotal share capital.On 13 September 2009, the Company was verified by China Securities RegulatoryCommission, according to the document Reply on Approving Initial Public Offering ofJiangsu Yanghe Brewery Joint-Stock Co., Ltd. (Zheng Jian Approval [2009] No.1077).The Company announced the initial public offering of 45,000,000 common shares on 27February 2009 and was listed for transactions in SZSE since 6 November 2009.According to the decisions of 2010 Shareholders’ General Meeting on 23 April 2011,based on the total capital of 450,000,000 shares on 31 December 2010, the capitalreserves per 10 shares were converted into 10 shares. After the conversion, the total
share capital of the Company was 900,000,000 as well as registered capital of CNY900,000,000.According to the decision of 2011 Shareholders’ General Meeting on 17 May 2012,based on the total capital of 900,000,000 shares on 31 December 2011, the capitalreserves per 10 shares were converted into 2 shares. After the conversion, the totalshare capital of the Company was 1,080,000,000 as well as registered capital of CNY108,000,000.According to the Proposal of Initial Share Repurchase of Public Shares approved by2012 Shareholders’ General Meeting on 17 May 2013, the Company used owned fundsto repurchase public shares and the price of public shares was no more than CNY 70.00per share, as well as the total amount of repurchase shares was no more than CNY 10billion. The form of repurchase was centralized competitive bidding approved by SZSE.Until May 2014, the amount of repurchase shares was 3,580,000 and the total amount ofpayment CNY 157,793,218.58. The shares repurchased had been canceled according tothe law with the procedure of capital reduction. After the repurchase, the registeredcapital became CNY 1,076,420,000 and the total share capital of the Company became1,076,420,000.According to the decision of 2014 Shareholders’ General Meeting on 26 May 2015,based on the total capital of 1,076,420,000 shares on 31 December 2014, the capitalreserves per 10 shares were converted into 4 shares. After the conversion, the totalshare capital of the company was 1,506,988,000 as well as the registered capital of CNY1,506,988,000.Registered address of the Company: 118 Middle Avenue,Yanghe Town, Suqian City,Jiangsu ProvinceCompany type: Incorporated company (Listed)Industry of the Company: Brewing food industryBusiness scope of the Company:production and sale of liquor, wholesaling and retailingof prepackaged food,grain purchase, self-operating and agency of import and export ofvarious types of merchandise and technology excluding merchandise and technologylimited or prohibited by the state for import and export, domestic trade, construction of e-commerce platform and online sales.( Business activities of projects needed to beapproved by law must be approved according to related departments)Parent company of the Company:Jiangsu Yanghe Group Co.,Ltd.The scope of the Company's consolidated financial statements is based on control, andall subsidiaries are included in the consolidation scope of the consolidated financialstatements.Changes of the scope of consolidation are as follows:
Subsidiaries that are newly incorporated into the scope of consolidation areshown in the following table:
Name
Name | Measure of acquisition |
Yanghe Hong Kong Distillery Co., Ltd. | Newly establishment |
Subsidiaries that are no longer incorporated into the scope of consolidation areshown in the following table:
Name | Reason |
Jiangsu Guanmeng Information Technology Co., Ltd. | Liquidation and cancellation |
Jiangsu Oubaosi International Trade Co., Ltd. | Liquidation and cancellation |
Jiangsu Yanghe Packaging Co., Ltd. | Liquidation and cancellation |
Dream Blue Haichuanhui (Shiyan) Trade and Investment Co., Ltd. | Liquidation and cancellation |
Xuzhou Huaqu Wine Development Co., Ltd. | Liquidation and cancellation |
Details of the subsidiaries incorporated into the consolidated financial statements showon “Note 8. 1.Interests in subsidiaries”, Changes in the scope of consolidation show on“Note 9. Change in consolidated scope”.
IV.Basis of preparation of financial statements
1. Basis of preparation
The Company has prepared its financial statements on a going concern basis, andrecognized and measured its accounting items in compliance with the AccountingStandards for Business Enterprises—Basic Standards and various concrete accountingstandards, and other relevant provisions on the basis of actual transactions and events.
2. Going concern
The Company has sustainable operation ability for at least 12 months from the end of thereporting period. In addition, there is no significant event affecting going concern.
V. Significant accounting policies and accounting estimates
Whether the Company needs to comply with the requirement of special industryNoThe notes of detailed accounting policies and accounting estimates:
See details in Note V. 27.Changes in significant accounting policies and accountingestimates.
1. Statement of compliance with the ASBE
The financial statements of the Company have been prepared in accordance with ASBE,and present truly and completely, the group’s financial position, the Company’s and
results of operations, and changes in shareholders' equity, cash flows and other relatedinformation for the reporting period.
2. Accounting period
The Company’s accounting period is calendar year as its accounting year, i.e. from 1January to 31 December.
3. Operating cycle
The Company’s accounting period is 12 months.
4. Functional currency
The Company has adopted China Yuan (CNY) as functional currency.
5. The accounting treatment of business combinations involvingenterprises under common control and not under common control
(1) Accounting treatment method for business combination under common controlBusiness combination under common control is accounted for under pooling of interestmethod.Assets and liabilities obtained by the Company through business combination undercommon control shall be measured at the book value as stated in the combine’saccounting record on the combination date. The share of the book value of the mergedparty’s owner’s equity in the consolidated financial statements is taken as the initialinvestment cost of long-term equity investments in individual financial statements. Thecapital reserve (stock premium or capital premium) is adjusted according to thedifference between the book value of net asset acquired through combination and thebook value of consideration paid for the combination (or total par value of shares issued).If the capital reserve (stock premium or capital premium) is insufficient to offset, theretained earnings shall be adjusted.
(2) Accounting treatment method of business combination not under common controlThe Company accounts for business combination not under common control underpurchase method.a)All the net identifiable assets, liabilities or contingent liabilities obtained by theCompany through business combination not under common control shall be measured atfair value. Assets paid, liabilities incurred or assumed and the equity securities issued asconsideration for combination are generally measured at fair value on the acquisition
date, and differences between their fair values and book values shall be included in thecurrent profit and loss.b)The cost of acquisition shall be respectively determined for the following conditions;i.Business combination of a transaction implementation, the combination cost shall be thesum of the fair value of the assets given, the liabilities incurred or assumed and theequity securities issued by the Company in exchange for the control on the acquisitiondate, and contingent considerations meeting the recognition conditions. The combinationcost is the initial investment costs of long-term equity investments in individual financialstatements.ii.Business combination through multiple transactions step by step to realized, thecombination cost shall be the sum of the fair value measurement on the acquisition of theequity investment that holding before the acquisition date and cost of all the newinvestment on the acquisition date. Long-term equity investment cost in individualfinancial statements shall be the sum of the book value of the equity investment thatholding before the acquisition date and cost of all the new investment on the acquisitiondate. A package deal is excluded.The Company, on the acquisition date, allocates the combination costs between theidentifiable assets and liabilities acquiredi.All assets of the acquiree obtained by the Company through business combination(notlimited to those that have been recognized by the acquiree), other than intangible assets,shall be separately recognized and measured at fair value when the future economicbenefits arising thereafter are expected to flow into the Company and the fair value canbe reliably measured.ii.Intangible assets of the acquiree obtained by the Company through businesscombination shall be separately recognized and measured at fair value when their fairvalues can be reliably measured.iii. All liabilities of the acquiree obtained by the Company through business combination,other than contingent liabilities, shall be separately recognized and measured at fairvalue when fulfillment of relevant obligations are expected to bring future economicbenefits to the Company and the fair value can be reliably measured.iv.Contingent liabilities of the acquiree obtained by the Company through businesscombination shall be separately recognized as liabilities and measured at fair value whentheir fair values can be reliably measured.v.When the Company allocates the cost of business combination and recognizes theidentifiable assets and liabilities acquired through combination, it shall not include anygoodwill and deferred income taxes that have been recognized by the acquiree beforethe business combination.c) Treatment of the difference between the business combination costs and the fair valueof net identifiable asset acquired from the acquiree through combination
i.The Company shall recognize the difference of the combination costs in excess of thefair value of the net identifiable asset acquired from the acquiree through combination asgoodwill.ii.The Company shall recognize the difference of the combination costs in short of the fairvalue of the net identifiable asset acquired from the acquiree through combinationaccording to the following provisions:
Review the measurement of fair values of all the identifiable assets, liabilities andcontingent liabilities acquired from the acquiree and the combination costs; After thereview, if the combination costs are still in short of the fair value of the net identifiableasset acquired from the acquiree through combination, include the difference in thecurrent profit and loss.
(3)Treatment of relevant expenses arising from the Company’s business combinationa) Relevant expenses directly arising from the business combination of the Company(including the expenses for audit, legal services, evaluation and consultation or otherintermediary costs for business combination) shall be included in the current profit andloss when they are incurred.b) Commissions, fees and other expenses paid on issuance of bonds and undertaking ofother debts for the business combination shall be included in the initial measurementamount of debt securities.i.Where the bonds are issued at discount or par value, that part of expenses will increasethe amount of the discount;ii.Where the bonds are issued at premium, that part of expenses will decrease theamount of the premium.c) Fees, commissions, and other transaction expenses paid on issuance of equitysecurities as combination consideration in the business combination shall be included inthe initial measurement amount of equity securities.i.Where the equity securities are issued at premium, that part of expenses shall bededucted from capital reserves (stock premium);ii.Where the equity securities are issued at par value or discount, that part of expensesshall be deducted from the retained earnings.
6. Preparation of consolidated financial statements
(1) Consistency of accounting policies and accounting period
All the subsidiaries within the consolidation scope of consolidated financial statementsshall adopt the same accounting policies and accounting periods as those of theCompany. If the accounting policies or accounting periods of a subsidiary are differentfrom those of the Company, the financial statements of the subsidiary, upon preparationof consolidated financial statements, shall be adjusted according to the accounting
policies and accounting periods of the Company.
(2) Preparation method of consolidated financial statements
The consolidated financial statements are based on the financial statements of theCompany and its subsidiaries, and are prepared by the parent company according toother relevant information after the adjustment to long-term equity investments insubsidiaries under the equity method and the elimination of effects of the internaltransactions between the Company and its subsidiaries and between the subsidiaries onthe consolidated financial statement.
(3) Reflection of excess losses incurred to a subsidiary in the consolidated financialstatementsIn the consolidated financial statements, where the current losses undertaken by theparent company are in excess of its share of owners’ equity in the subsidiary at thebeginning of the period, the balance shall reduce the owners’ equity (retained earnings)of the parent company; where the current losses undertaken by a subsidiary’s non-controlling shareholders excess those non-controlling shareholders’ share of owners’equity in the subsidiary at the beginning of the period, the balance shall reduce the non-controlling interests.
(4) Changes in number of subsidiaries during the reporting period
a) Acquisition of subsidiaries during the reporting periodi. Treatment of acquiring subsidiaries from business combination under common controlduring the reporting periodDuring the reporting period, if the Company acquires subsidiaries from the businesscombination under common control, the opening balance in the consolidated balancesheet shall be adjusted. The income, expenses and profits of the newly acquiredsubsidiaries from the beginning to the end of the reporting period shall be included in theconsolidated income statement. The cash flows of the newly acquired subsidiaries fromthe beginning to the end of the reporting period shall be included in the consolidatedstatement of cash flows.ii. Treatment of acquiring subsidiaries from business combination not under commoncontrol during the reporting periodDuring the reporting period, if the Company acquires subsidiaries from the businesscombination not under common control, the opening balance in the consolidated balancesheet shall not be adjusted. The income, expenses and profits of the newly acquiredsubsidiaries from the acquisition date to the end of the reporting period shall be includedin the consolidated income statement. The cash flows of the newly acquired subsidiaries
from the acquisition date to the end of the reporting period shall be included in theconsolidated statement of cash flows.b) Treatment of disposing subsidiaries during the reporting periodDuring the reporting period, if the Company disposes subsidiaries, the opening balancein the consolidated balance sheet shall not be adjusted. The income, expenses andprofits of the newly disposed sub diaries from the beginning to the disposal date shall beincluded in the consolidated income statement. The cash flows from the beginning to thedisposal date shall be included in the consolidated statement of cash flows.
7. Classification of joint venture arrangements and the accountingtreatment method of common operation
(1) Classification of joint venture arrangements
A joint arrangement is classified as either a joint operation or a joint venture. A jointoperation is a joint arrangement whereby the joint operators have rights to the assets,and obligations for the liabilities, relating to the arrangement. A joint venture is a jointarrangement whereby the joint ventures only have the rights to the net assets under thisarrangement.A joint arrangement that is not structured through a separate vehicle shall be classifiedas a joint operation. A separate vehicle refers to a separately identifiable financialstructure, including separate legal entities or entities without a legal personality butrecognized by statute.A joint arrangement that is structured through a separate vehicle is usually classified as ajoint venture. However, when a joint arrangement provides clear evidence that it meetsany of the following requirements and complies with applicable laws and regulations as ajoint operation:
a) The legal form of the joint arrangement indicates that the parties that have joint controlhave rights to the assets, and obligations for the liabilities, relating to the arrangement.b) The terms of the joint arrangement specify that the parties that have joint control havethe rights to the assets, and the obligations for the liabilities, relating to the arrangement.c) Other facts and circumstances indicate that the parties that have joint control haverights to the assets, and the obligations for the liabilities, relating to the arrangement---forexample, the parties that have joint control have rights to substantially all of the output ofthe arrangement, and the arrangement depends on the parties that have joint control ona continuous basis for settling the liabilities of the arrangement.
(2) Accounting treatment of a joint operation
A joint operator shall recognize the following items in relation to its interest in a jointoperation, and account for them in accordance with relevant accounting standards:
a)Its solely-held assets, and its share of any assets held jointly;b)Its solely-assumed liabilities, and its share of any liabilities incurred jointly;c)Its revenue from the sale of its share of the output arising from the joint operation;d)Its share of the revenue from sale of the output by the joint operation; ande)Its solely-incurred expenses and its share of any expenses incurred jointly.
8. Cash and cash equivalents
Cash comprises cash on hand and deposits that can be readily withdrawn on demand.Cash equivalents are the company’s short-term (due within 3 months from purchasedate), highly liquid investments that are readily convertible to known amounts of cash andwhich are subject to an insignificant risk of changes in value.
9. Foreign currency transactions and translation of foreign currencystatements
(1)Accounting method of foreign currency transactions
a)Initial recognition of foreign currency transactionsFor foreign currency transactions incurred, the Company converts the amount in foreigncurrency into the amount in functional currency at the spot exchange rate (middle rate)announced by the People’s Bank of China on the transaction date. Among them, forforeign currency exchange occurred or transaction involving foreign currency exchange,the Company converts at the exchange rate actually adopted on the transaction date.b)Adjustment or settlement on the balance sheet date or settlement dateOn the balance sheet date or the settlement date, the Company handles foreign currencymonetary items and foreign currency non-monetary items separately in accordance withthe following methods:
i. Accounting principles for handling foreign currency monetary itemsFor foreign currency monetary items, on the balance sheet date or the settlement date,the Company converts them by using the spot exchange rate (middle rate) prevailing onthe balance sheet date or settlement date, and adjusts the amount in functional currencyof foreign currency monetary items in respect of the difference arising from exchangerate fluctuations, which shall be treated as exchange difference at the same time. Amongthem, the exchange differences arising from foreign currency loans relating to theacquisition, construction or production of assets eligible for capitalization shall beincluded in the costs of assets eligible for capitalization; other exchange differences shallbe included in the current financial expenses.
ii. Accounting principles for handling foreign currency non-monetary itemsFor foreign currency non-monetary items measured at historical cost, the Company shallconvert them at the spot exchange rate (middle rate) prevailing on the transaction date,with their amounts in functional currency remaining unchanged and no exchangedifferences incurred.
For an inventory that is measured at the lower of its costs or its net realizable values, ifthe net realizable value is determined in foreign currency, the Company, whendetermining the value of the inventory at the end of the period, shall firstly convert the netrealizable value into functional currency and then compare it with the inventory costreflected in functional currency.
Non-monetary items measured at fair value that is reflected in foreign currency at the endof the period, the Company shall firstly translate the foreign currency into the amount infunctional currency at the spot exchange rate on the date when the fair value isdetermined, and then compare it with the original functional currency amount. Differencebetween the translated functional currency amount and the original functional currencyamount is treated as profit or loss from changes in fair value (including changes inexchange rate) and is recognized in current profit and loss.
(2)Accounting treatment method for translation of foreign currency statementsa)The Company shall translate the financial statements of foreign operations inaccordance with the following methods:
i. Assets and liabilities in the balance sheets shall be translated at the spot exchangerates on balance sheet date. Shareholders’ equity items, except for the item of"undistributed profits", are translated at the spot exchange rates on the dates when thetransactions occur.ii. Revenue and expense items in the income statement are translated at the spotexchange rates on the dates when the transactions occur or at the exchange ratedetermined in a systematical and reasonable method and similar to the spot exchangerate on the day when the transactions occur.Differences arising from the above translations of foreign currency financial statementsare separately listed under ‘other comprehensive income’ in the consolidated balancesheet.The translation of comparative financial statements is handled by reference to the aboveapproach.b)The Company shall translate the financial statements of foreign operations that are invirulent inflation economy in accordance with the following methods:
i. The Company restates the items in the balance sheet by using the general price index,and restates the items in the income statement by using the changes in general priceindex, and then converts those items at the spot exchange rate on the latest balancesheet date.ii. Where the foreign operations are no longer in virulent inflation economy, the Companyceases to restate the financial statements and converts the financial statements restatedaccording to the price level on such cease.
c)Where the Company disposes of an overseas business, it shall transfer the foreigncurrency financial statements exchange difference, which relates to the businessdisposed of and is presented under the items of the other comprehensive income in thebalance sheet, from the other comprehensive income item to the gain or loss on disposalfor the current period. If the overseas business is partly disposed of, the foreign currencyfinancial statements exchange difference shall be calculated in proportion to thepercentage of disposal and transferred to gain or loss on disposal for the current period.
10. Financial Instruments
Financial instruments are the financial asset, financial liability or (equity) instrument willbe recognised when the Company became one of the parties under a contract.
(1)Classification of financial instruments
(a)Classification of financial assetsAccording to the company's business model of managing financial assets and thecharacteristics of contract cash flow of financial assets, financial assets are classified intothe following three categories: financial assets measured at amortised cost; financialassets measured at fair value through other comprehensive income (including financialassets directly designated to be measured at fair value through other comprehensiveincome); and financial assets measured at fair value through the current profit or loss.(b)Classification of financial liabilitiesThe Company classifies the financial liabilities into the following two categories: financialliabilities measured at fair value through current profit and loss (including financialliabilities held for trading and financial liabilities directly designated to be at fair valuethrough current profit and loss); and financial liabilities measured at amortized cost.
(2)Recognition basis and measurement method of financial instruments
Recognition basis of financial instrumentsWhen the Company becomes a party to a financial instrument, it shall recognize afinancial asset or financial liability.Measurement method of financial instruments
i.Financial assetsFinancial assets are measured at fair value upon initial recognition. For financial assetsat fair value through profit or loss, relevant transaction costs are directly recognised inprofit or loss for the period. For other categories of financial assets, relevant transactioncosts are included in the amount initially recognised. Accounts receivable or notesreceivable arising from sales of goods or rendering services and without significantfinancing component or the company decided not to consider financing elements for lessthan one year are initially recognised based on the amount of consideration expected tobe entitled to receive.
① Financial assets measured at amortised cost
These assets are subsequently measured at amortised cost using the effective interestmethod after initial recognition. Gains/losses on financial assets that are measured atamortised cost and are not a part of any hedging relationship shall be recognised in profitor loss when the financial asset is derecognised or reclassification or amortised using theeffective interest method or recognized the impairment allowance.
② Financial assets measured at fair value through other comprehensive incomeThese assets are subsequently measured at fair value after initial recognition. Exceptimpairment, foreign exchange gains and losses, interest income calculated using theeffective interest method are recognised in profit or loss; other gains and losses arerecognised in other comprehensive income. On derecognition, gains and lossesaccumulated in other comprehensive income are transferred to profit or loss.In addition, the company designated some non-tradable equity instruments as financialassets measured at fair value through other comprehensive income; the company shallrecognise the relevant dividend income of such financial assets into the current profit andloss, and recognise the change of fair value in other comprehensive income. Onderecognition, the accumulated gains/losses previously recognized in othercomprehensive income shall be transferred to retained earnings and not be recognised incurrent profit and loss.
③ Financial assets measured at fair value through profit or loss
The Company classifies the financial assets, except for financial assets measured atamortized cost or at fair value through other comprehensive income as mentioned above,into the financial assets measured at fair value through profit or loss for the current period.In addition, the company may designate some financial assets as financial assetsmeasured at fair value through profit or loss for the current period upon the initialrecognition to eliminate or significantly reduce accounting mismatch. For such financialassets, the company adopts the fair value for subsequent measurement, and changes infair value are recognized in the profit or loss for the current period.ii.Financial liabilitiesFinancial liabilities shall be classified into financial liabilities measured at fair value
through profit or loss for the current period upon initial recognition and other financialliabilities. For financial liabilities measured at fair value through profit or loss, relevanttransaction costs are directly recognized in the current profit and loss, and the relevanttransaction costs of other financial liabilities are recognized in the initial recognitionamount.
① Financial liabilities measured at fair value through profit or loss
Financial liabilities held for trading (including derivatives of financial liabilities) shall besubsequently measured at the fair value. Except for those related to hedge accounting,changes in the fair value shall be recognized in the profit or loss of the current period. Forfinancial liabilities designated to be at fair value through profit or loss, fair value changescaused by the Company's own credit risk changes which is recognised in othercomprehensive income, when the liability is derecognition, the accumulated change in itsfair value caused by the change in its own credit risk recognized in other comprehensiveincome is transferred to retained earnings, the remaining changes of fair value is recordin profit of loss. If the above treatment of the impact of the change in the credit risk ofsuch financial liabilities will cause or expand the accounting mismatch in the profit andloss, the company will record all the gains/losses of such financial liabilities (including theamount affected by fair value changes in enterprise's own credit risk) into the currentprofit and loss.
② Financial liabilities measured at amortized cost
Except financial liabilities that arise when a transfer of a financial assets does not qualifyfor derecognition or when the continuing involvement approach applies security contractare classified as financial liabilities measured by amortized cost, or financialsubsequently measurement at amortized cost, and record the profits or losses guaranteecontracts recognition or amortization into the current profit and loss.
(3)Financial assets transfer
If the Company transfers substantially all the risks and rewards of ownership of thefinancial asset to the transferee, the Company derecognises the financial asset, therights and obligations arising or retained in the transfer shall be separately recognized asits assets or liabilities; if the Company retains substantially all the risks and rewards ofownership of the financial asset, it continues to recognise the transferred financial assets.If the Company neither transfers nor retains substantially all the risks and rewards ofownership of the financial asset, it is accounted for as follows: if the Company has notretained control, it derecognises the financial asset, the rights and obligations arising orretained in the transfer shall be separately recognized as its assets or liabilities; and if theCompany has retained control, it continues to recognize the financial asset to the extentof its continuing involvement in the transferred financial asset and recognizes therelevant liability.Where transfer of financial assets qualify for derecognition entirety, the differencebetween the following two amounts will be included into current profit or loss: The book
value measured at the date of derecognition; and The sum of the consideration for thederecognition part and the portion of derecognition corresponding to the accumulatedamount of the changes in fair value originally and directly included in OCI (involving thesituation where the financial asset transferred is a debt instrument investment measuredat fair value and recognized in other comprehensive income). The Company transferredthe partial transfer of financial assets which qualify for derecognition, the overall carryingamount of the transferred financial asset shall be apportioned according to theirrespective relative fair value between the portion of derecognition and the remaining.
(4)Derecognition of financial liabilities
If the current obligation of the financial liability (or part thereof) has been discharged, thecompany shall remove financial liability (or part thereof), and the company shallrecognize the difference between its book value and the consideration paid (includingany non-cash assets transferred or liabilities assumed) in the current profit and loss.
(5)Offsetting of financial assets and liabilities
Financial assets and financial liabilities shall be shown separately in the balance sheetand shall not be offset against each other. If the following conditions are met at the sametime, the net value offset each other after amount listed in the balance sheet:
The company has offset the confirmed amount of legal rights of financial assets andfinancial liabilities, and this kind of legal rights is the executable; andThe company plans to net or cash at the same time when the financial assets andliquidation of the financial liability.If the transfer of financial assets does not meet the conditions for derecognition, thetransferor shall not offset the transferred financial assets and related liabilities.
(6)Equity instruments
Equity instruments are contracts that prove ownership of the residual interest in thecompany’s assets after deducting all liabilities. The issuance (including refinancing),repurchase, sale or cancellation of the equity instruments of the company shall be treatedas changes in the equity. The company does not recognize changes in the fair value ofequity instruments, and the transaction fees related to the equity transactions shall bededucted from the equity. Where the equity instrument of the company distributesdividends during the term of its existence, it shall be treated as profit distribution, and thetotal amount of shareholders' equity will not be affected by the stock dividends issued.
(7)Method for determining the fair value of financial assets and financial liabilitiesWhere there is an active market for a financial instrument, the company shall determineits fair value by quoting in the active market. Where there is no active market for thefinancial instrument, the company shall determine its fair value by means of valuationtechnology. In valuation, the company uses valuation techniques applicable in the currentsituation and supported by sufficient available data and other information to select inputvalues consistent with the characteristics of assets or liabilities considered by market
participants in transactions of related assets or liabilities, and gives priority to relevantobservable input values as far as possible. Use unobservable inputs only when relevantobservable inputs cannot be obtained or are impracticable to obtain.Upon initial recognition, the fair value of financial assets or financial liabilities isdetermined by the quoted price of the same assets or liabilities in the active market orother valuation technology that only uses observable market data, the Company defersthe difference between the fair value and the transaction price. After initial recognition,the Company recognizes the deferred difference as gain or loss in the correspondingaccounting period according to the changes of a certain factor in the correspondingaccounting period.
(8)Impairment of Financial Assets
Based on the expected credit loss, the Company shall recognise the impairment loss onfinancial assets measured at amortized cost, debt instrument investment at fair valuethrough other comprehensive income.The approach of recognition loss allowance for expected credit lossesConsidering the reasonable and valid information such as past events, current conditionsand forecast of future economic conditions, and weighted by the risk of default, theCompany calculates the probability weighted amount of the present value of thedifference between the cash flow receivable under the contract and the expected cashflow to be received, and confirms the expected credit loss.General approachThe Company assess whether the credit risk of financial instruments in different stages ateach reporting date has increased significantly. If the financial instruments' credit riskhave not increased significantly after initial recognition, it will be included in phase 1, andthe Company measures the loss allowance for those instruments at an amount equal to12-month expected credit losses; if the financial instruments' credit risk have increasedsignificantly but without objective evidence for impairment after initial recognition, it willbe included in phase 2, and the Company measures the loss allowance of thoseinstruments at an amount equal to lifetime expected credit losses; if the financial assetthat is evidently credit-impaired after initial recognition, it will be included in phase 3, andthe Company measures the loss allowance of those financial instruments at an amountequal to lifetime expected credit losses. For financial instruments with low credit risk onthe balance sheet date (e.g.fixed deposits in commercial banks with higher credit rating,financial instruments with external credit rating above "investment grade"), the Companyassumes that the credit risk has not increased significantly since the initial recognitionand chooses to measure the loss provision according to the expected credit loss in thenext 12 months.Simplified approachFor accounts receivables and notes receivables related to revenues, the Company doesnot include the significant financing component or does not consider the financing
components in contracts less than one year, it will measure the loss allowance accordingto the expected credit loss of the whole duration.Criteria for determining whether credit risk has increased significantly subsequent to theinitial recognitionIf the probability of default of a financial asset in lifetime as determined on the balancesheet date is significantly higher than the probability of default in lifetime as determined atthe initial recognition, the credit risk of the financial asset increases significantly.No matter what method the Company is applied to evaluate whether credit risk hasincreased significantly, it usually inferred that the credit risk of the financial instrumenthas increased significantly if the contract payment delay exceeds 30 days, unless theCompany can get the reasonable and valid information at reasonable cost to evidencethat the credit risk of the financial instrument has not increased significantly since theinitial recognition.Except in special cases, the Company shall use the change of default risk in the next 12months as a reasonable estimate of the change of default risk in lifetime to determinewhether the credit risk has increased significantly to the initial recognitionApproach of assessing expected credit risk on a portfolio basis and determine basisThe company evaluates credit risk individually for the credit risk of significantly differentnotes receivables, accounts receivables and other receivables with the followingcharacteristics. Such as: accounts receivables in dispute with the other party or involvinglitigation or arbitration; notes receivables, accounts receivables that have shown clearsigns that the debtor is likely to be unable to meet repayment obligations.When it is impossible to evaluate the expected credit loss information of an individualfinancial asset at a reasonable cost, the Company divides the receivables into severalportfolio according to the credit risk characteristics, and calculates the expected creditloss on collective basis. The basis for determining the portfolio is as following:
Name
Name | Approach of assessing expected credit risk |
Bank acceptance bill Portfolio; Commercial acceptance bill Portfolio | For notes receivables divided into portfolio, the bank acceptance bill and commercial acceptance bill refer to the historical credit loss experience, and combines the current situation and the forecast of future economic situation respectively.The Company calculates the expected credit loss based on the default risk exposure and the expected credit loss rate of the whole duration. |
Risk Portfolio | For accounts receivables divided into risk portfolio, the Company refers to the historical credit loss experience, and combines the current situation and the forecast of future economic situation, and prepares a comparison table between overdue ages of accounts receivables and expected credit loss rate of the whole duration to calculate the expected credit loss. |
Other Portfolio | The Company classifies items without significant recovery risk receivables as other portfolio such as items from subsidiaries in the consolidation scope, tax |
refunds receivable, collection and withholding of funds. There is no provision forbad debt for them.
The Company shall take the provision or transfer the loss into the current profit and loss.For the debt instrument investment measured at fair value through other comprehensiveincome, the Company shall adjust other comprehensive income while recording theimpairment loss or gain into the current profit and loss.
11. Inventory
(1) Classification of inventory
Inventories are classified as: raw materials, semi-finished goods, stock commodities,consigned processing materials, goods in progress and revolving materials (includinglow-cost consumables), etc.Measurement method of dispatched inventoriesDispatched materials and stock commodities are accounted for by using the weightedaverage method.
(2) Basis to determine net realizable values of inventories and method of provision forstock obsolescencea)Determination basis of net realizable values of inventoriesi. In normal operation process, for merchandise inventories held directly for sale,including stock commodities (finished goods) and materials for sale, their net realizablevalues are determined at their estimated selling prices minus their estimated sellingexpenses and relevant taxes and surcharges.ii. In normal operation process, for material inventories that need further processing, theirnet realizable values are determined at the estimated selling prices of finished goodsminus estimated costs to completion, estimated selling expenses and relevant taxes andsurcharges.iii. For inventories held to execute sales contract or service contract, their net realizablevalues are calculated on the basis of contract price. If the quantities of inventoriesspecified in the sales contracts are less than the quantities held by the Company, the netrealizable value of the excess portion of inventories shall be based on general sellingprices.iv. The materials held for production shall be measured at cost if the net realizable valueof the finished products is higher than the cost. If a decline in the value of materialsshows that the net realizable value of the finished products is lower than the cost, thematerials shall be measured at the net realizable value.
b)Provision for stock obsolescence
i.Provisions for stock obsolescence are made at the lower of costs or net realizablevalues on a single basis.ii.For inventories with large quantity and relatively low unit prices, the provision for stockobsolescence shall be made on the ground of the categories of inventories.
(3) Inventory system
The Company adopts perpetual inventory system and takes physical inventory counts ona regular basis.
(4) Amortization method of revolving materials
A.Amortization method of low-cost consumables:
Low-cost consumables are amortized in full at once.B.Amortization method of packaging materialsPacking materials are amortized in full at once when fetched for use by the Company.
12. Assets held for sale
(1) Scope of held for sale
Held for sale include individual asset and disposal group.Disposal group is a group of assets that are disposed as a whole through sales or otherways in one transaction and liabilities directly related to these assets delivered in thetransaction.
(2) Recognition criteria of held for sale
The Company recognizes its component (or non-current asset) that satisfies the followingconditions as assets held for sale:
a)The assets (or disposal group) must be available for immediate sale in its presentcondition subject only to terms that are usual and customary for sales of such assets (ordisposal groups);b) Its sale must be highly probable. The Company has already made a decision todispose the component and has a commitment from the purchaser, the transfer will becompleted within one year. If it requires shareholders’ approval or supervisors’ approvalaccording to regulations, it has already received approval from the general meeting ofstockholders or relative authority institution.
(3) Accounting treatment and. presentation of assets held-for-sale
a) The non-current asset (or disposal group) is first classified as held for sale, theCompany should measure the non-current assets or assets and liabilities made up ofdisposal group in accordance with relevant accounting standards.b) When the Company measure a non-current asset (or disposal group) held for saleinitially or re-measure at balance sheet date subsequently, the impairment loss should be
recognized if the book value is higher than fair value less costs to sell at the amount ofthe difference of these two in profit and loss, the provision for assets held for sale need tobe recognized at the same time. For the impairment of disposal group, should write offgoodwill if existing, and then write down the related assets proportionally. Depreciation oramortization should cease for the non-current asset held for sale.c) No matter the asset is classified as individual asset held for sale or asset belonging todisposal group, the asset is presented as current assets under “assets held for sale” item;liabilities related to the asset transferred in the disposal group held for sale is presentedas current liabilities under “liabilities held for sale” item in the balance sheet.d) The Company is committed to a sale plan involving loss of control of subsidiary shallclassify all the assets and liabilities of that subsidiary held for sale in consolidatedbalance sheets when the above criteria are met, regardless of whether the Companyretain a non–controlling interests in its former subsidiary after the sale. In the balancesheets of parent company the investment should be classified as held for sale in full.
(4) Discontinued operations
A discontinued operation is a component of an entity that either has been disposed of oris classified as held for sale, and meets one of the follow conditions:
a)It represents either a separate major line of business or a geographical area ofoperations;b)It is part of a single co-ordinated plan to dispose of a separate major line of business orgeographical area of operations; orc)It is a subsidiary acquired exclusively with aim to resale.
13. Long-term equity investment
(1) Recognition of the initial investment costs of long-term equity investmentsa)For long-term equity investments from business combinations, the initial investmentcost shall be recognized in accordance with the provisions mentioned in Note 3.5,Accounting Method for Long-term Equity Investment from Business Combinations underCommon Control and Business Combination not under Common Control.b) Except for the long-term equity investments arising from business combinations, thoseobtained by other means shall recognize their initial investment costs in accordance withthe following provisions:
i.For the long-term equity investments obtained by cash paid, the Company recognizesthe actual purchase price as the initial investment costs. The initial investment costsinclude directly related expense, taxes and other necessary expenses of obtaining long-term equity investments.ii.For the long-term equity investments acquired by the issue of equity securities (equityinstrument), the initial investment cost shall be the fair value of the equity securities(equity instrument) issued. If the fair value of the long-term equity investment obtained ismore reliable than equity securities issued, the initial investment cost shall be the fairvalue of the long-term equity investment made by the investors. The cost directlyattributable to the issue of equity securities (equity instrument), including fees,commissions, etc., write-downs premium price of the issue, if premium price of the issueis insufficient, write-downs surplus reserve and undistributed profit in turn. For the long-
term equity investments acquired by the issue of debt securities (debt instrument) ,reference through the issuance of equity securities (equity instrument).iii. For long-term equity investments obtained by debt restructuring, the Companyrecognizes the fair value of shares of debt-for-equity swap as the initial investment costs.iv.For long-term equity investments obtained by non-monetary assets exchange, underthe condition that an exchange of non-monetary assets is of commerce nature and thefair value of assets exchanged can be reliably measured, non-monetary assets traded inis initially stated at the fair value of the assets traded out, unless there is conclusiveevidence indicating that the fair value of the assets traded in is more reliable; if the aboveconditions are not satisfied, initial investment costs of long-term equity investmentstraded in shall be recognized at the book value of the assets traded out and the relevanttaxes and surcharges payable.Expenses, taxes and other necessary expenses incurred to the Company and that aredirectly related to the obtainment of long-term equity investments shall be recognized asthe initial investment costs of long-term equity investments.For long-term equity investments obtained by the Company by any means, cashdividends or profits declared but not yet distributed in the actual payments or theconsideration actually paid for the investment shall be separately accounted as dividendsreceivable and shall not constitute the costs of long-term equity investments.
(2) Subsequent measurement and recognition of gains and losses of long-term equityinvestmentsa) If the Company can control an investee, namely investment in subsidiary, the long-term equity investment shall be measured under the cost method.For long-term equity investments accounted at the cost method, except cash dividends orprofits declared but not yet distributed which are included in the actual payments or theconsideration actually paid for the investment, the cash dividends or profits declared bythe investee shall be recognized as the investment income irrespective of net profitsrealized by the investee before investment or after investment.b) Long-term equity investments measured under the equity methodi. For the long-term equity investment which has joint control or significant influence overthe investee, the equity method is adopted for accounting.
ii.For long-term equity investments measured at the equity method, if the initialinvestment costs are higher than the investor’s attributable share of the fair value of theinvestee’s identifiable net assets, no adjustment will be made to the initial costs of thelong-term equity investments; if the initial investment costs are lower than the investor’sattributable share of the fair value of the investee’s identifiable net assets, the differenceshall be recognized in current profit and loss and at the same time the adjustment will bemade to the initial costs of the long-term equity investments.
iii.After obtaining the long-term equity investments, the Company shall, according to theshares of net profits and other comprehensive income realized by the investee that shallbe enjoyed or borne by the Company, recognize the profit and loss on the investments
and adjust the book value of the long-term equity investments. When recognizing the netprofits and losses and other comprehensive income of the investee that the Companyshall enjoy or bear, the Company shall make a recognition and calculation based on thenet book profits and losses of the investee after appropriate adjustments. However,where the Company is unable to obtain the relevant information due to failure toreasonably determine the fair value of the investee’s identifiable assets, minor differencebetween the investee’s identifiable assets and the book value thereof or other reasons,the profits or losses on the investments shall be directly calculated and recognized basedon the net book profits and losses of the investee. The Company shall calculate the partdistributed from cash dividends or profits declared by the investee and correspondinglyreduce the book value of the long-term equity investments.
When recognizing the income from investments in associates and joint ventures, theCompany shall write off the part of incomes from internal unrealized transactionsbetween the Company and associates and joint ventures which are attributable to theCompany and recognize the profit and loss on investments on such basis. Where thelosses on internal transactions between the Company and the investee fall into the scopeof losses on assets impairment, full amounts of such losses shall be recognized. Profitand loss from internal unrealized transactions between the Company’s subsidiariesincluded into the combination scope and associates and joint ventures shall be written offaccording to the above principles and the profit and loss on investments thereafter shallbe recognized on such basis.
When the share of net loss of the investee attributable to the Company is recognized, it istreated in the following sequence: Firstly, write off the book value of the long-term equityinvestments; where the book value of the long-term equity investments is insufficient tocover the loss, investment losses are recognized to the extent that book value of long-term equity which form net investment in the investee in other substances and the bookvalue of long-term receivables shall be written off; after all the above treatments, if theCompany still assumes additional obligation according to investment contracts oragreements, the obligation expected to be assumed should be recognized as provisionand included into the investment loss in the current period. If the investee is profitable insubsequent accounting periods, the Company shall treat the loss in reverse order againstthat described above after deducting unrecognized share of loss: i.e. write down the bookvalue of the recognized provision, then restore the book value of long-term interestswhich substantially form net investments in the investee, then restore the book value oflong-term investments, and recognize investment income at the same time.
(3) Basis for judgment of common control or significant influence over the investeea).Basis for judgment of common control over investeeCommon control is the contractually agreed sharing of control of an arrangement, whichexists only when decisions about the relevant activities require the unanimous consent ofthe parties sharing control. Relevant activities of an arrangement usually include sellingand purchasing of goods or services, managing financial assets, acquiring or disposing ofassets, researching and developing activities and financing activities. A joint venture is a
joint arrangement whereby the joint ventures have rights to the net assets of thearrangement. The parties have rights to the assets, and obligations for the liabilities,relating to the arrangement, which is a joint operation, but not a joint venture.
b).Basis for judgment of significant influence over investeeThe term “significant influence” refers to the power to participate in decision-makingon the financial and operating policies of the investee, but with no control or joint controlover the formulation of these policies. Where the Company is able to exert significantinfluence over the investee, the investee is its associate.
14. Fixed assets
(1) Recognition of fixed assets
Fixed assets refer to tangible assets held for the purpose of producing commodities,providing services, renting or business management with useful life exceeding oneaccounting year. Fixed assets are recognized when the following criteria are satisfiedsimultaneously:
a) It is probable that the economic benefits relating to the fixed assets will flow into theCompany;b) The cost of the fixed assets can be measured reliably.
(2) Depreciation of fixed assets
Category
Category | Depreciation method | Estimated useful life (Yr) | Estimated residual value rate (%) | Annual depreciation rate (%) |
Buildings and constructions | Straight-line method | 20~25 | 5 | 3.80~4.75 |
Machinery equipments | Straight-line method | 10 | 5 | 9.50 |
Transportation equipments | Straight-line method | 10 | 5 | 9.50 |
Other equipments | Straight-line method | 8 | 5 | 11.88 |
Except for the fixed assets that have been fully depreciated but are still in use and theland, the Company makes provisions for depreciation of all fixed assets.b) Depreciation of fixed assets of the Company is provided for on a straight-line basisfrom the month immediately following the month when they reach the working conditionfor their intended use. The depreciation amount and depreciation rate shall be calculatedand recognized according to the category, estimated useful lives and estimated netresidual value rate of fixed assets and respectively included into the costs of the relevantassets or the current profit and loss by purpose.
c) When making provision for impairment on fixed assets, the Company shall recalculatethe depreciation rate and depreciation amount according to the book value, the estimatednet residual value rate and useful lives of the fixed assets.d) On the balance sheet date, the Company reviews the estimated useful life, estimatednet residual value rate and depreciation method of the fixed assets. If there is anychange, they shall be treated as changes in accounting estimate.e) Decoration expense of fixed assets that meet the condition of capitalization shall bedepreciated separately by adopting straight-line method within the short period betweentwice decoration and useful life of the fixed assets.
(3) Recognition standard, valuation method and depreciation method for fixed assetsacquired under financing leasea) At the inception of the lease, the Company recognizes the leased fixed assets meetingthe standards for financial leases as fixed assets acquired under financing leases.
b)At the inception of the lease, the Company shall state the assets acquired underfinancing lease at the lower of the fair value of the leased assets or the present value ofthe minimum lease payments, as well as the initial and direct expenses occurred,recognize a long-term payable at the amount of the minimum lease payments, and shallcharge the difference of the lower of the fair value of the leased assets or the presentvalue of the minimum lease payments and the minimum lease payments to unrecognizedfinance expenses. Unrecognized finance expenses shall be amortized at the effectiveinterest rate method in each period during the lease term.
c)Adapt the same depreciation method as the one used on other fixed assets owned bythe company. If there is reasonable assurance that the Company will obtain theownership of the leased assets when the lease term expires, the leased assets should bedepreciated over its useful life; if there is no reasonable assurance that the Company willobtain the ownership of the leased assets when the lease term expires, the leased assetsshould be depreciated over the shorter of the lease term or the useful life of the leasedassets.
15. Construction in progress
(1) Categories of constructions in progress
Constructions in progress are accounted on individual project basis.
(2) Criteria and commencement of conversion of constructions in progress into fixedassets
The book entry values of the fixed assets are stated at total expenditures incurred beforeconstruction in progress reaches the working condition for their intended use. For self-operating projects, total expenditures are measured according to the expenditures ofdirect materials, direct labor, direct measurement mechanical construction costs andother expenditures; for contracting projects, total expenditures are measured accordingto project costs payable and other expenditures. Borrowing costs incurred before theprojects that are undertaking with borrowing costs reach working condition for theirintended use and meeting the condition for capitalization shall be capitalized andincluded into the costs of construction in progress.
For construction in progress that has reached working condition for intended use but forwhich the completion of settlement has not been handled, it shall be transferred into fixedassets at the estimated value according to the project budget, construction price or actualcost, etc. from the date when it reaches the working condition for intended use and thefixed assets shall be depreciated in accordance with the Company’s policy on fixed assetdepreciation; adjustment shall be made to the estimated value based on the actual costafter the completion of settlement is handled, but depreciation already provided will notbe adjusted.
16. Borrowing costs
(1) Scope of borrowing costs
The Company’s borrowing costs include interest thereon, amortization of discounts orpremiums, ancillary expenses and exchange differences incurred from foreign currencyloan, etc.
(2) Recognition principles of capitalization of borrowing costs
The borrowing costs incurred to the Company and directly attributable to the acquisitionand construction or production of assets eligible for capitalization should be capitalizedand recorded into relevant asset costs; other borrowing costs should be recognized ascosts according to the amount incurred and be included into the current profit and loss.Assets eligible for capitalization include fixed assets, investment properties, inventoriesand other assets which may reach the working condition for their intended use or sale byacquisition and construction or production activities for quite long time.
(3) Recognition of capitalization period of borrowing costs
a) Recognition of commencement of capitalization of borrowing costsBorrowing costs may be capitalized when asset disbursements have already beenincurred, borrowing costs have already been incurred and the acquisition and
construction or production activities which are necessary to prepare the assets for theirintended use or sale have already been started. Among which, asset disbursementsinclude those incurred by cash payment, the transfer of non-cash assets or theundertaking of interest-bearing debts for acquiring and constructing or producing assetseligible for capitalization.
b) Recognition of period of capitalization suspension of borrowing costsIf the acquisition and construction or production activities of assets eligible forcapitalization are interrupted abnormally and this condition lasts for more than threemonths, the capitalization of borrowing costs should be suspended. The borrowing costsincurred during interruption are charged to profit or loss for the current period, and thecapitalization of borrowing costs continues when the acquisition and construction orproduction activities of the asset resume. If the interruption is necessary for theacquisition and construction or production to prepare the assets for their intended use orsale, the capitalization of borrowing costs should continue.
c) Recognition of period of capitalization cessation of borrowing costsCapitalization of borrowing costs should cease when the acquired and constructed orproduced assets eligible for capitalization have reached the working condition for theirintended use or sale. Borrowing costs incurred after the assets eligible for capitalizationhave reached the working condition for their intended use or sale should be recognizedas the current profit and loss when they incur.
If all parts of the acquired and constructed or produced assets are completed, each partmay be used or sold externally in the process of continuous construction of other partsand the necessary acquisition or production activities have been substantially completedto make the part of assets reach the working condition for their intended use or sale, thecapitalization of borrowing costs related to the part of assets should be ceased; if all partsof the acquired and constructed or produced assets are completed but the assets cannotbe used or sold externally until overall completion, the capitalization of borrowing costsshould cease at the time of overall completion of the said assets.
(4) Recognition of capitalized amounts of borrowing costs
a) Recognition of capitalized amounts of interest on borrowing costsDuring the period of capitalization, capitalized amount of the interest of each accountingperiod (including amortization of discounts or premiums) shall be recognized according tothe following provisions:
i.As for special loan borrowed for acquiring and constructing or producing assets eligible
for capitalization, borrowing costs of special loan actually incurred in the current periodless the interest income of the loans unused and deposited in bank or return ontemporary investment should be recognized as the capitalization amount of borrowingcosts.ii.As for general loans used for acquiring and constructing or producing assets eligible forcapitalization, the interest of general loans to be capitalized should be calculated bymultiplying the weighted average of asset disbursements of the part of accumulatedasset disbursements in excess of special loans by the capitalization rate of used generalloans. The capitalization rate is calculated by weighted average interest rate of generalloans.iii. Where there are discounts or premiums on loans, the amounts of interest for eachaccounting period should be adjusted taking account of amortizable discount or premiumamounts for the period by effective interest method.iv.During the period of capitalization, the capitalized amount of interest of eachaccounting period shall not exceed the current actual interest of the relevant loans.
b) Recognition of capitalized amounts of auxiliary expenses of loansi.Auxiliary expenses incurred from special loans before the acquired or constructedassets eligible for capitalization reach the working condition for their intended use or saleshould be capitalized when they incur and charged to the costs of assets eligible forcapitalization; those incurred after the acquired or constructed assets eligible forcapitalization reach the working condition for their intended use or sale should berecognized as costs according to the amounts incurred when they incur and charged tothe current profit or loss.ii. Auxiliary expenses incurred from general loans shall be recognized as costs accordingto the amounts incurred when they occur and included in the current profit and loss.
c) Recognition of capitalized amount of exchange differencesDuring the period of capitalization, exchange differences incurred from the principal andinterest of special foreign currency loans should be capitalized and included in the costsof the assets eligible for capitalization.
17. Intangible assets
(1) Measurement, useful life and impairment test
Initial measurement of intangible assetsInitial measurement of outsourcing intangible assetsCosts of outsourcing intangible assets shall be recognized according to the purchaseprice, related taxes and other expenses directly attributed to reaching the working
condition for their intended use. The cost of intangible assets shall be recognized basedon present value of purchase price when deferred payment over normal credit conditionswith financial nature. The difference between actual payment and purchase price, expectfor capitalized amount, shall be included into the current profit and loss in the period ofcredit.
Initial measurement of internally researched and developed intangible assetsCosts of internally researched and developed intangible assets shall be recognizedaccording to the total expenses during the period after the assets are eligible forcapitalization and before they reach the intended purpose and the expenses that havebeen included in the previous periods shall no longer be adjusted.Expenses on the research phase of internally researched and developed intangibleassets shall be included in the current profit and loss when they incur; those on thedevelopment phase ineligible for capitalization shall be included in the current profit andloss; those eligible for capitalization shall be recognized as intangible assets. If it isunable to distinguish expenditure on the research phase and expenditure ondevelopment phase, the research and development expenditures shall be all included inthe current profit and loss.
Subsequent measurement of intangible assetsThe useful lives of intangible assets are analyzed on acquisition. Intangible assetsobtained by the Company are divided into intangible assets with limited useful lives andintangible assets with indefinite useful lives.
Subsequent measurement of intangible assets with limited useful livesThe intangible assets with limited useful lives are amortized on a straight-line basis whenthey reach intended use over their useful lives with no residual value reserved.Amortizations of intangible assets are usually recorded into the current profit and loss;where the economic benefits of an intangible asset are realized by the products or otherassets produced thereafter, the amortizations are recorded into the costs of the relevantassets.
Category, estimated useful life, estimated net residual value rate and annual amortizationrate of intangible assets are shown below:
Category of intangible
assets
Category of intangible assets | Estimated useful life (years) | Estimated net residual value rate (%) | Annual amortization rate (%) |
Land use right | 50 | 0 | 2.00 |
Trademark | 7-10 | 0 | 14.29-10.00 |
Computer software | 10 | 0 | 10.00 |
The useful lives and amortization methods of intangible assets with limited useful lives onthe balance sheet date shall be reviewed.Subsequent measurement of intangible assets with indefinite useful livesIntangible assets with indefinite useful lives are not amortized in the holding period, butimpairment tests are performed at the end of each year.
Estimates of useful lives of intangible assetsa) For intangible assets from any contractual right or other statutory rights, their usefullives shall be recognized according to the period no more than that of the contractual orother statutory rights; when the contractual right or other statutory rights contract isextended due to renewal of contracts and there is evidence that the renewal of theCompany does not need large costs, the renewal period shall be included into the usefullives.
b) Where the contract or the law fails to specify the useful lives, the Company integratessituations in all aspects and determine the period of intangible assets that can bringeconomic benefits for the Company by hiring the relevant experts to demonstrate orcomparing with the situation of the industry as well as referring to the Company’shistorical experience or otherwise.
c) If it is still unable to reasonably determine that intangible assets may bring economicbenefits for the Company according to the above methods, the intangible assets aretaken as intangible assets with indefinite useful lives.
(2) Accounting policies of internal research and development expenditureAccording to the actual situation of the research and development, the Companyclassifies the research and development project into that on the research phase and thaton the development phase.a) Research stageResearch stage is the stage when creative and planned investigations and researchactivities are conducted to acquire and understand new scientific or technologicalknowledge.b) Development stageDevelopment stage is the stage when the research achievements or other knowledge areapplied to a plan or design, prior to the commercial production or use, so as to produceany new or substantially improved material, device or product.Expenditure of an internal research and development project on the research phase shall
be included in current profit and loss when it occurs.Specific criteria for qualifying expenditure on the development phase for capitalizationExpenditure on the development phase of an internal research and development projectshall be recognized as intangible assets only when the following conditions aresimultaneously satisfied:
a) It is technically feasible to finish intangible assets for use or sale;b) It is intended to finish and use or sell the intangible assets;c)The usefulness of intangible assets to generate economic benefits shall be proved,including being able to prove that there is a potential market for the productsmanufactured by applying the intangible assets or there is a potential market for theintangible assets themselves or the intangible assets will be used internally;d) It is able to finish the development of the intangible assets, and able to use or sell theintangible assets, with the support of sufficient technologies, financial resources andother resources;e) The expenditure attributable to the intangible asset during its development phase canbe measured reliably.
18. Non-current assets impairment
If there are impairment indicators of long-term equity investment, investment propertymeasured at cost model, fixed assets, construction in progress, intangible assets withindefinite useful lives and other long-term assets at balance sheet date, impairment testshould be performed. If the result of impairment test shows that recoverable amount isless than its book value, the difference should be provided for impairment and recordedinto impairment loss. The recoverable amount is the higher of fair values less costs ofdisposal and the present values of the future cash flows expected to be derived from theasset. Provision for impairment is calculated and recognized on the basis of individualasset. If recoverable amount of individual asset is difficult to be estimated, the Companyshould recognize the recoverable amount of the asset group which the individual assetbelongs to. Asset group is the minimum asset group which can generate cash inflowseparately.The Company should perform impairment test for goodwill and intangible assets withindefinite life at least at each year end, no matter whether there is impairment indicator.When the Company performs impairment test, book value of goodwill arising frombusiness combination should be amortized to relevant asset group using the reasonablemethod from the date of purchase. If it is difficult to amortize it to relevant asset group,amortize it to relevant asset group portfolio. Apportion book value of goodwill to relevantasset group or asset group portfolio according to the proportion of fair value of assetgroup or asset group portfolio accounting for total amount of relevant asset group orasset group portfolio. If fair value is difficult to be measured reliably, amortize according
to the proportion of book value of asset group or asset group portfolio accounting for totalamount of relevant asset group or asset group portfolio. When perform impairment testfor asset group or asset group portfolio including goodwill, if there is impairment indicatorof asset group or asset group portfolio relevant to goodwill, perform impairment test forasset group or asset group portfolio without goodwill firstly, calculate its recoverableamount, compare with relevant book value and recognize impairment loss. Then performimpairment test for asset group or asset group portfolio including goodwill, compare bookvalue of the asset group or asset group portfolio (including proportional book value ofgoodwill) and its recoverable amount, if recoverable amount of relevant asset group orasset group portfolio is less than its book value, recognize impairment loss of goodwill.Once impairment loss stated above is recognized, reversal is not allowed in thesubsequent accounting periods.
19. Long-term deferred expenses
(1) Scope of long-term deferred expenses
Long-term deferred expenses refer to various expenses which have been alreadyincurred but will be born in this period and in the future with an amortization period ofover 1 year (exclusive).
(2) Initial measurement of long-term deferred expenses
Long-term deferred expenses shall be initially measured according to the actual costsincurred.
(3) Amortization of long-term deferred expenses
Long-term deferred expenses are amortized using the straight-line method over thebeneficial period.
20. Employee benefits
(1) Accounting treatment of short-term benefits
Short-term benefits are the benefits that the Company expect to pay in full within 12months after the reporting period in which the employee provided relevant services,excluding the compensation for employment termination.
Short-term benefits include: wage, bonus, allowance and subsidy; employee welfare,social securities including health insurance and work injury insurance; housing commonreserve fund; union expenditure and employee training expenditure; short-term paidleave; short-term profit-sharing; non-monetary welfare and other short-term benefits.
Actual short term benefits will be recognized as liability during the accounting period inwhich the employee is providing the relevant service to the Company. The liability will beincluded in the current profits and losses or the cost relevant assets.
(2) Accounting treatment of post-employment benefits
The defined contribution plan of the Company include payments of basic pension,unemployment insurance, annuity, etc. that accord to relevant provisions. The amountwhich the Company deposit on balance sheet date in exchange for the service of theemployee during the accounting period will be recognized as employee benefits liabilityand shall be included into the profit or loss for the current period.
(3) Accounting treatment of termination benefits
Termination benefits are the benefits the Company provide to the employee when theCompany terminates the employment before labor contract expires or encouragesvoluntary resignation. Employee benefits liabilities shall be recognized and included intoprofit or loss for the current period on the earlier date of the two following circumstances:
A.When the Company is not able to withdraw the benefits from termination ofemployment or resignation persuasion unilaterally;B.When the Company recognizes costs and fees relevant to reforming the terminationbenefits payment.
(4) Accounting treatment of other long-term employee benefits
Other long-term employee benefits are all employee benefits other than short-termbenefits, post-employment benefits and termination benefits. At the end of reportingperiod, the company will recognize the employee benefits cost from other long-termemployee benefits as the following components:
a)Service cost;b) Net amount of interest from other long-term employee benefits net liabilities or assets;c) Changes from recalculation of the net liabilities or assets from other long-termemployee benefits.In order to simplify related accounting procedure, the net amount of the above subjectsshall be included into current profit or loss or the cost of relevant assets.
21. Provisions
(1) Recognition principles of provision
When obligations related to external guarantees, pending actions or arbitration, product
quality assurance, onerous contracts, reorganization and contingencies satisfy thefollowing three conditions, they shall be recognized as provision:
a)This obligation is a present obligation of the Company;b)The settlement of such obligation is likely to result in outflow of economic benefits fromthe Company; andc) The amount of the obligation can be measured reliably.
(2) Measurement method of provision
The amount of provision is measured at the best estimate of expenses required forcontingencies.a) If there is continuous range for the necessary expenses, and probabilities ofoccurrence of all the outcomes within this range are equal, the best estimate shall bedetermined at the median of the range.b) The best estimate shall be accounted as follows in other cases:
i.If the contingency involves a single item, the best estimate shall be determined at themost likely outcome.ii.If the contingency involves two or more items, the best estimate should be determinedaccording to all the possible outcomes with their relevant probabilities.
22. Revenue
Whether the new revenue standard has been implemented
□ Yes √ No
Operating revenue of the Company mainly includes revenue from sales of goods,revenue from rendering of service and revenue from transfer of asset use right, for whichthe recognition principles are as follows:
(1) Recognition principals of revenue from sales of goods
Revenue from sales of goods is recognized when the Company has transferredsignificant risks and rewards of ownership of the goods to the purchaser; the Companyretains neither continuing managerial involvement usually related to the ownership noreffective control over the sold goods; revenues can be measured reliably; the relevanteconomic benefits are highly likely to flow into the Company; and the relevant costsincurred or to be incurred can be measured reliably.The Company’s specific condition of revenue recognition is that revenue is recognizedafter customer acceptance based on receiving payment or obtaining the rights of claimingpayment for goods according to signed sales contracts or agreements.The Company offers a certain percentage discount to dealers according to marketingpolicies and sales status of dealers of liquor products. The settlement with dealers ismade regularly or irregularly. The sales revenue is recognized based on (net) invoiceamount after discount when the discount is included to invoice. According to accrualbasis principle , the discount incurred but not yet settled shall be recognized in sales
revenue and included to other payables.
(2) Recognition principals of revenue from rendering of service
Recognition principals of revenue from rendering of service under the circumstance thatthe outcome of service transactions can be estimated reliablyThe Company recognizes revenue from rendering of service using the percentage-of-completion method on the balance sheet date when the outcome of service transactionscan be estimated reliably.
When the amount of revenues can be measured reliably, related economic interests arelikely to flow into the company, schedule of completion of the transitions can bemeasured reliably and the cost of transactions incurred or to be incurred can bemeasured reliably, the outcome of service transactions can be estimated reliably.Recognition principals of revenue from rendering of service under the circumstance thatthe outcome of service transactions cannot be estimated reliably
If the outcome of rendering of services on the balance sheet date cannot be measuredreliably, the revenues from rendering of services shall be recognized according to thefollowing three conditions:
a)If the labor costs that have already incurred can be fully compensated, the revenuesfrom rendering of services are recognized at the amounts recovered or expected to berecovered and the labor costs that have already incurred shall be carried forward;b) If the labor costs that have already incurred can be partially compensated, therevenues from rendering of services are recognized at the recoverable amounts ofcompensated labor costs and the labor costs that have already incurred shall be carriedforward;c) If it is expected that all the labor costs that have already incurred cannot becompensated, the labor costs that have already incurred are included into the currentprofit and loss (costs of primary business) and the revenues from rendering of servicesare not recognized.
(3) Recognition principals of revenue from transfer of asset use right
When economic benefits related to transactions are highly likely to flow into the Companyand the amount of revenue can be reliably measured, the revenue from transfer of assetuse right is recognized.
23. Government grants
(1) Types of government grants
Government grants are monetary assets and non-monetary assets acquired free ofcharge by the Company from the government, including government grants related toassets and government grants related to income.Government grants related to assets are government grants that are acquired by theCompany and used for forming long-term assets through purchasing and constructing orother ways.Government grants related to income are government grants other than governmentgrants related to assets.
(2) Recognition principles of government grants
Government grants are recognized when both of the following conditions are met:
a) The Company can meet the attached conditions for the government grants;b) The Company can receive the grants.
(3) Measurement of government grants
a) If a government grant is a monetary asset, it shall be measured in the light of thereceived or receivable amount.b) If a government grant is a non-monetary asset, it shall be measured at its fair value;and if its fair value cannot be obtained in a reliable way, it shall be measured at a nominalamount (a nominal amount is CNY 1).
(4) Accounting treatment method of government grants
a) The government grants related to assets shall be set off of the book value of therelated assets or recognized as deferred income at the actual entry amount onacquisition. Government grants recognized as deferred income shall be allocated evenlyover the useful lives of the relevant assets, and included in the current profit or loss.Government grants measured at the nominal amount shall be directly included in currentprofit and loss.b) Government grants related to income shall be separately handled according to thefollowing circumstances:
i.If government grants related to income are used to compensate the Company’s relevantexpenses or losses in future periods, such government grants should be recognized asdeferred income on acquisition and be included into the current profit and loss or writtenoff of the related costs when the relevant expenses, losses are recognized.ii.If government grants related to income are used to compensate the Company’srelevant expenses or losses incurred, such government grants are directly included intothe current profit and loss on acquisition or written off of the related costs.b) Government grants related to assets and related to income are received together,shall be treated separately. If it is hard to separate, government grants shall be treated asrelated to income as a whole.c) Government grants related to daily operation shall be recoded in other income orwritten off relevant expenses, costs. Government grants unrelated to daily operation shallbe recorded in non-operating income. Financial subsidy funds directly allocated to the
company shall be offset the relevant borrowing costs.d) Government grants already recognized required to be refunded shall be handledaccording to the following circumstances:
i. If the grants have written down the book value of assets, the book value shall beadjusted.ii. If there is related deferred income, the book value of relevant deferred income iswritten down and the exceeding part is recorded in the current profit and loss.iii. If there is no related deferred income, the exceeding part is directly included in thecurrent profit and loss.
24. Deferred tax assets and deferred tax liabilities
The Company adopts the balance sheet liability method to account for income tax.
(1) Recognition of deferred tax assets or deferred tax liabilities
a) The Company recognizes its tax base on acquisition of assets and liabilities. On thebalance sheet date, the Company analyzes and compares the book value of the assetsand liabilities and the tax base. If there are temporary differences in book value of theassets and liabilities and the tax base, under the circumstance that the temporarydifferences incur in the current period and meet the recognition criteria, the Companyshall respectively recognize taxable temporary differences or deductible temporarydifferences as deferred tax liability or deferred tax assets.
b) Recognition basis of deferred tax assetsi. Deferred tax assets incurred from deductible temporary differences are recognized tothe extent that they shall not exceed the taxable income probably obtained in futureperiods to be against the deductible temporary difference. In determining the taxableincome probably obtained in future periods, including the taxable income from normalproduction and operation activities in future periods and the increase of taxable incomedue to the reversal of taxable temporary differences during the period of reversal ofdeductible temporary differences.ii.For deductible losses and tax credits that can be carried forward to the next years, theCompany is likely to recognize the corresponding deferred tax assets to the extent thatthe assets shall not exceed the taxable income in the future for deducting deductiblelosses and tax credits and that are probably obtained by the Company.iii. On the balance sheet date, the Company reviews the book value of deferred taxassets. If it is probably unable to obtain sufficient taxable income in the future period tooffset the benefits of the deferred tax assets, the Company shall write down the bookvalue of the deferred tax assets; when it is probable to obtain sufficient taxable income,the write-downs shall be reversed.
c) Recognition basis of deferred tax liabilities
The Company recognizes the current and previous taxable temporary differencespayable but unpaid as deferred tax liabilities. But they exclude temporary differencesarising from goodwill; transactions which are formed other than from businesscombinations and neither affect the accounting profits nor affect taxable income at thetime of occurrence.
(2) Measurement of deferred tax assets or deferred tax liabilities
a) On the balance sheet date, the deferred tax assets and deferred tax liabilities aremeasured at the applicable tax rate during the period of expected recovery of the assetsor liquidation of the liabilities in accordance with the provisions of the tax law.b) Where the applicable tax rate changes, the Company remeasures deferred tax assetsand deferred tax liabilities recognized, except for those incurred in transactions or eventsdirectly recognized in the owner’s equity, of which the effect shall be included in theincome tax expenses in the current period when the rate changes.c) When the Company measures the deferred tax assets and deferred tax liabilities, thetax rate and tax base in consistent with the expected recovery of assets or liquidation ofliabilities shall be adopted.d) Deferred tax assets and deferred tax liabilities of the Company shall not be discounted.
25. Lease
(1) Accounting treatment method of operating lease
Lessee records rents of operating lease into cost of related assets or current profit or lossusing straight line method in each period of the lease term. Initial direct expensesincurred are recorded into current profit or loss. Contingent rents are recorded intocurrent profit or loss when occur.
Lessor includes assets used for operating lease in the related items of financialstatements. Rent of operating lease is recognized into current profit or loss using straightline method in the various period of the lease term. Initial direct expenses are recordedinto current profit or loss. Depreciate fixed asset in the operating lease using depreciationpolicy of the similar assets. Amortize other operating lease assets using systematicreasonable method. Contingent rent is recorded into current profit or loss when occur.
(2) Accounting treatment method of financing lease
As the lessee, recognize the lower of fair value of lease asset and minimum leasepayment at the beginning day of the lease as the initial value of the asset leased in andthe minimum lease payment as long-term payable, the difference as unrealized financeexpense. Bank charges, lawyer fee, travel allowances, stamp taxes and other initial directexpenses that can be attributable to lease project in the lease negotiation and signing thelease contract are recorded into the asset leased in. Unrealized finance expense isamortized in the period during the lease term and recognized as current finance
expenses using actual effective rate method. Contingent rent is recorded into currentprofit or loss when actually occur.
As the lessor, recognize the total of minimum lease amount received and initial directexpenses as the initial value of finance lease amount receivable and record the residualamount not guaranteed at the same time. Recognize the difference between the total ofminimum lease amount received, initial direct expenses and residual amount notguaranteed and present value of that as unrealized finance income. Amortize unrealizedfinance income in the period during the lease term and use effective interest rate torecognize current finance income. Contingent rent is recorded into current profit or losswhen actually occur.
26. Changes in significant accounting policies and accounting estimates
(1) Changes in significant accounting policies
√ Applicable ? N/A
Content and reason of changes in
accounting policies
Content and reason of changes in accounting policies | Procedure for examination and approval | Notes | ||
The Company shall, from January 1, 2019, implement the accounting standard for business enterprises No.22-Financial instrument recognition and measurement, accounting standard for business enterprises No.23-Financial asset transfer, accounting standard for business enterprises No.24-Hedge accounting, and accounting standard for business enterprises No.37-Presentation of financial instruments revised by Ministry of Finance in 2017. | Reviewed and approved by the sixth meeting of the sixth board of directors. | According to the requirements of the new financial instrument standards, the relevant information of financial instruments shall be presented and the comparative financial statements shall not be retroactively adjusted. | ||
Items | Balance as at 31 December 2018 | Balance as at 1 January 2019 | Adjustment |
Financial assets held for trading | 17,900,259,775.43 | 17,900,259,775.43 | |
Accounts receivables | 5,419,314.60 | 5,522,261.31 | 102,946.71 |
Other receivables | 47,908,184.37 | 51,367,132.22 | 3,458,947.85 |
Non-current assets that mature within one year | 1,120,000,000.00 | -1,120,000,000.00 | |
Other current assets | 16,932,480,348.96 | 146,726,838.22 | -16,785,753,510.74 |
Available-for-sale financial assets | 2,713,455,624.66 | -2,713,455,624.66 |
Other non-current financial assets | 3,124,148,754.77 | 3,124,148,754.77 | |
Deferred tax assets | 714,003,966.82 | 713,088,032.20 | -915,934.62 |
Deferred tax liabilities | 14,019,256.05 | 115,581,138.18 | 101,561,882.13 |
Other comprehensive income | -141,964,710.15 | -1,370,740.85 | 140,593,969.30 |
Undistributed profits | 30,784,308,899.94 | 30,949,968,585.63 | 165,659,685.69 |
Minority equity | -20,011,735.87 | -19,981,918.25 | 29,817.62 |
Note: the above table only presents the items of the affected consolidated financialstatements, excluding the items of the unaffected consolidated financial statements.
(2) Changes in significant accounting estimates
? Applicable √ N/A
(3)Since 2019, the implementation of new financial instrument standards, newrevenue standards or new leasing standards will be adjusted to implement theitems related to financial statements at the beginning of the year
√ Applicable ? N/A
Consolidated Balance Sheet
Unit: CNY
Assets
Assets | Balance as at 31 December 2018 | Balance as at 1 January 2019 | Adjustment |
Current assets: | |||
Cash and cash equivalents | 3,615,348,307.97 | 3,615,348,307.97 | |
Settlement reserves | |||
Lending funds | |||
Financial assets held for trading | 17,900,259,775.43 | 17,900,259,775.43 | |
Financial assets measured at fair value through current profit or loss | |||
Derivative financial assets | |||
Notes receivables | 242,542,097.76 | 242,542,097.76 | |
Accounts receivables | 5,419,314.60 | 5,522,261.31 | 102,946.71 |
Account receivables financing | |||
Prepayment | 18,984,169.54 | 18,984,169.54 | |
Premiums receivable | |||
Reinsurance accounts receivable | |||
Reinsurance contract reserve | |||
Other receivables | 47,908,184.37 | 51,367,132.22 | 3,458,947.85 |
Including:Interests receivable | |||
Dividends receivable | |||
Buying back the sale of financial assets | |||
Inventories | 13,892,118,587.74 | 13,892,118,587.74 | |
Contract assets | |||
Assets held for sale | |||
Non-current assets due within one year | 1,120,000,000.00 | -1,120,000,000.00 | |
Other current assets | 16,932,480,348.96 | 146,726,838.22 | -16,785,753,510.74 |
Total current assets | 35,874,801,010.94 | 35,872,869,170.19 | -1,931,840.75 |
Non-current assets: | |||
Disbursement of loans and advances | |||
Investment in debt instruments | |||
Available-for-sale financial assets | 2,713,455,624.66 | -2,713,455,624.66 | |
Investment in other debt instruments | |||
Held-to-maturity investments | |||
Long-term receivables | |||
Long-term equity investments | 9,423,328.82 | 9,423,328.82 |
Investment in other equityinstruments
Investment in other equity instruments | |||
Other non-current financial assets | 3,124,148,754.77 | 3,124,148,754.77 | |
Investment property | |||
Fixed assets | 7,833,665,282.19 | 7,833,665,282.19 | |
Construction in progress | 154,535,104.82 | 154,535,104.82 | |
Productive biological assets | |||
Oil and gas assets | |||
Right-of-use asset | |||
Intangible assets | 1,781,961,687.10 | 1,781,961,687.10 | |
Development expenses | |||
Goodwill | 276,001,989.95 | 276,001,989.95 | |
Long-term deferred expenses | 907,636.00 | 907,636.00 | |
Deferred tax assets | 714,003,966.82 | 713,088,032.20 | -915,934.62 |
Other non-current assets | 205,012,184.92 | 205,012,184.92 | |
Total non-current assets | 13,688,966,805.28 | 14,098,744,000.77 | 409,777,195.49 |
Total assets | 49,563,767,816.22 | 49,971,613,170.96 | 407,845,354.74 |
Current liabilities: | |||
Short-term loans | |||
Borrowings from the central bank | |||
Loans from other banks | |||
Financial liabilities held for trading | |||
Financial liabilities measured at fair value through current profit or loss | |||
Derivative financial liabilities | |||
Notes payable | |||
Accounts payables | 1,261,282,397.89 | 1,261,282,397.89 | |
Advance from customer | 4,468,409,150.75 | 4,468,409,150.75 | |
Contract liabilities | |||
Financial assets sold for repurchase | |||
Customer brokerage deposits | |||
Securities underwriting brokerage deposits | |||
Receivings from vicariously sold securities | |||
Employee benefits payable | 185,751,373.59 | 185,751,373.59 | |
Taxes payable | 3,255,458,759.72 | 3,255,458,759.72 | |
Other payables | 6,457,301,511.01 | 6,457,301,511.01 | |
Including:Interests payable | |||
Dividends payable | |||
Handling charges and commissions payable | |||
Reinsurance accounts payable | |||
Liabilities held for sale | |||
Non-current liabilities due within one year | |||
Other current liabilities | |||
Total current liabilities | 15,628,203,192.96 | 15,628,203,192.96 | |
Non-current liabilities: | |||
Insurance contract reserves | |||
Long-term loans | 109,088.00 | 109,088.00 | |
Bonds payable |
Including: Preferenceshares
Including: Preference shares | |||
Perpetual bonds | |||
Lease liabilities | |||
Long-term payables | 198,404,248.85 | 198,404,248.85 | |
Long-term payroll payables | |||
Accrued liabilities | |||
Deferred income | 98,513,500.00 | 98,513,500.00 | |
Deferred tax liabilities | 14,019,256.05 | 115,581,138.18 | 101,561,882.13 |
Other non-current liabilities | |||
Total non-current liabilities | 311,046,092.90 | 412,607,975.03 | 101,561,882.13 |
Total liabilities | 15,939,249,285.86 | 16,040,811,167.99 | 101,561,882.13 |
Shareholders' equity | |||
Share capital | 1,506,988,000.00 | 1,506,988,000.00 | |
Other equity instruments | |||
Including: preference shares | |||
Perpetual bonds | |||
Capital reserves | 741,704,076.44 | 741,704,076.44 | |
Less: treasury stock | |||
Other comprehensive income | -141,964,710.15 | -1,370,740.85 | 140,593,969.30 |
Special reserves | |||
Surplus reserves | 753,494,000.00 | 753,494,000.00 | |
General risk reserve | |||
Undistributed profits | 30,784,308,899.94 | 30,949,968,585.63 | 165,659,685.69 |
Total equity attributable to owners of the parent company | 33,644,530,266.23 | 33,950,783,921.22 | 306,253,654.99 |
Non-controlling interests | -20,011,735.87 | -19,981,918.25 | 29,817.62 |
Total owners' equity | 33,624,518,530.36 | 33,930,802,002.97 | 306,283,472.61 |
Total liabilities and owners' equity | 49,563,767,816.22 | 49,971,613,170.96 | 407,845,354.74 |
Adjustment statementThe Company shall, from 1 January 2019, implement the accounting standard forbusiness enterprises No.22-Financial instrument recognition and measurement,accounting standard for business enterprises No.23-Financial asset transfer, accountingstandard for business enterprises No.24-Hedge accounting, and accounting standard forbusiness enterprises No.37-Presentation of financial instruments revised by Ministry ofFinance in 2017. According to the requirements of the new financial instrument standards,the relevant information of financial instruments shall be presented and the comparativefinancial statements shall not be retroactively adjusted. This change of accountingpolicies has been reviewed and approved by the sixth meeting of the sixth board ofdirectors.
Balance sheet of parent company
As at December 31 2019
Unit: CNY
Assets | Balance as at 31 December 2018 | Balance as at 1 January 2019 | Adjustment |
Current assets: | |||
Cash and cash equivalents | 1,849,574,170.07 | 1,849,574,170.07 | |
Financial assets held for trading | 12,993,382,950.99 | 12,993,382,950.99 | |
Financial assets measured |
at fair value throughcurrent profit or loss
at fair value through current profit or loss | |||
Derivative financial assets | |||
Notes receivables | 143,456,446.32 | 143,456,446.32 | |
Accounts receivables | 697,277,202.71 | 697,277,202.71 | |
Account receivables financing | |||
Prepayment | 250,592,759.90 | 250,592,759.90 | |
Other receivables | 949,089,213.52 | 950,355,344.98 | 1,266,131.46 |
Including:Interests receivable | |||
Dividends receivable | 713,143.77 | 713,143.77 | |
Inventories | 10,378,077,915.50 | 10,378,077,915.50 | |
Contract assets | |||
Assets held for sale | |||
Non-current assets due within one year | 700,000,000.00 | -700,000,000.00 | |
Other current assets | 12,338,796,250.84 | 178,129.84 | -12,338,618,121.00 |
Total current assets | 27,306,863,958.86 | 27,262,894,920.31 | -43,969,038.55 |
Non-current assets: | |||
Investment in debt instruments | |||
Available-for-sale financial assets | 1,231,283,468.30 | -1,231,283,468.30 | |
Investment in other debt instruments | |||
Held-to-maturity investments | |||
Long-term receivables | |||
Long-term equity investments | 7,365,139,180.24 | 7,365,139,180.24 | |
Investment in other equity instruments | |||
Other non-current financial assets | 1,581,596,418.19 | 1,581,596,418.19 | |
Investment property | |||
Fixed assets | 5,008,615,512.59 | 5,008,615,512.59 | |
Construction in progress | 92,262,796.92 | 92,262,796.92 | |
Productive biological assets | |||
Oil and gas assets | |||
Right-of-use asset | |||
Intangible assets | 1,252,482,032.31 | 1,252,482,032.31 | |
Development expenses | |||
Goodwill | |||
Long-term deferred expenses | |||
Deferred tax assets | 5,734,535.64 | 5,418,002.77 | -316,532.87 |
Other non-current assets | 179,613,182.42 | 179,613,182.42 | |
Total Non-current Assets | 15,135,130,708.42 | 15,485,127,125.44 | 349,996,417.02 |
Total Assets | 42,441,994,667.28 | 42,748,022,045.75 | 306,027,378.47 |
Current liabilities: | |||
Short-term loans | |||
Financial liabilities held for trading | |||
Financial liabilities measured at fair value through current profit or loss | |||
Derivative financial liabilities | |||
Notes payable |
Accounts payables
Accounts payables | 1,159,053,261.86 | 1,159,053,261.86 | |
Advance from customer | 14,339,833,591.92 | 14,339,833,591.92 | |
Contract liabilities | |||
Employee benefits payable | |||
Taxes payable | 1,069,550,625.85 | 1,069,550,625.85 | |
Other payables | 183,715,786.65 | 183,715,786.65 | |
Including:Interests payable | |||
Dividends payable | |||
Liabilities held for sale | |||
Non-current liabilities due within one year | |||
Other current liabilities | |||
Total current liabilities | 16,752,153,266.28 | 16,752,153,266.28 | |
Non-current liabilities: | |||
Long-term loans | 109,088.00 | 109,088.00 | |
Bonds payable | |||
Including:preference shares | |||
Perpetual bonds | |||
Lease liabilities | |||
Long-term payables | 145,105,136.65 | 145,105,136.65 | |
Long-term payroll payables | |||
Provisions | |||
Deferred income | |||
Deferred tax liabilities | 76,269,444.97 | 76,269,444.97 | |
Other non-current liabilities | |||
Total non-current liabilities | 145,214,224.65 | 221,483,669.62 | 76,269,444.97 |
Total liabilities | 16,897,367,490.93 | 16,973,636,935.90 | 76,269,444.97 |
Owners' equity (or shareholders' equity) | |||
Share capital | 1,506,988,000.00 | 1,506,988,000.00 | |
Other equity instruments | |||
Including: preference shares | |||
Perpetual bonds | |||
Capital reserves | 1,341,628,480.93 | 1,341,628,480.93 | |
Less: treasury stock | |||
Other comprehensive income | |||
Special reserves | |||
Surplus reserves | 753,494,000.00 | 753,494,000.00 | |
Undistributed profits | 21,942,516,695.42 | 22,172,274,628.92 | 229,757,933.50 |
Total owners' equity | 25,544,627,176.35 | 25,774,385,109.85 | 229,757,933.50 |
Total liabilities and owners' equity | 42,441,994,667.28 | 42,748,022,045.75 | 306,027,378.47 |
Adjustment statementThe Company shall, from 1 January 2019, implement the accounting standard forbusiness enterprises No.22-Financial instrument recognition and measurement,accounting standard for business enterprises No.23-Financial asset transfer, accountingstandard for business enterprises No.24-Hedge accounting, and accounting standard forbusiness enterprises No.37-Presentation of financial instruments revised by Ministry ofFinance in 2017. According to the requirements of the new financial instrument standards,the relevant information of financial instruments shall be presented and the comparativefinancial statements shall not be retroactively adjusted. This change of accounting
policies has been reviewed and approved by the sixth meeting of the sixth board ofdirectors.
VI.Taxes
1. Major tax types and rates
Tax type
Tax type | Taxation basis | Tax rate |
Value-added tax (VAT) | Output tax-deductible input tax | 16%、13%、11%、10%、6%、19% |
Consumption tax | Sales revenue or or composite assessable price | |
Urban maintenance and construction tax | Applicable turnover tax amount | 7%、5% |
Corporate income tax | Applicable income tax rate Taxable income | 25%、16.5%、0%、27% |
Disclosure statement if there are various taxpaying bodies with different corporateincome tax rates
Company name | Applicable tax rate |
JSSJ Industry (HK) Holdings Co., Ltd. | 16.50% |
ZYG E-Commerce HK Limited | 16.50% |
Yanghe Hong Kong Distillery Co., Ltd. | 16.50% |
Yanghe Chile SPA | 27% |
YangHe International Investment Ltd, ZYG Ltd | 0 |
ZYG LTD | 0 |
ZYG Technology Investment Ltd | 0 |
2. Other information
1. VAT shall be calculated and paid according to the difference between the currentoutput tax and the current deductible input tax, and the applicable output tax rates shallbe 16%, 13%, 11%, 6% and 19%. Since 1 April 2019, the Company's VAT rate wasadjusted to 13% from 16%, according to the No. 39, 2019 Announcement on DeepeningVAT Reform Policies issued by Ministry of Finance, State Administration of Taxation andGeneral Administration of Customs.The VAT rate of Yanghe Chile SPA is 19%. JSSJ Industry (HK) Holdings Co., Ltd.,Yanghe Hong Kong Distillery Co., Ltd.,ZYG E-Commerce HK Limited, ZYG LTD.,YangHe International Investment Ltd., ZYG Technology Investment Ltd., do not pay VAT.
2. Ad valorem taxation: liquor consumption tax shall be calculated and paid according to20% of the approved sales amount.The taxable liquor commissioned for processing shallbe taxed according to the sales price of similar liquor of the entrusted party, and if thereis no sales price of similar liquor, the taxable liquor shall be computed according to thecomposition assessable price.Consumption tax on red wine (wine) is calculated at 10%of sales.Quantity-based taxation: liquor consumption tax is calculated and paid according to CNY
0.50 per kg.
3. The corporate income tax is calculated and paid at 25% of the taxable income amount.The profits tax rate applicable to JSSJ Industry (HK) Holdings Co., Ltd., ZYG E-Commerce HK Limited and Yanghe Hong Kong Distillery Co., Ltd. is 16.50%, and theincome tax rate applicable to Yanghe Chile SPA is 27%. YangHe International
Investment Ltd, ZYG Ltd and ZYG Technology Investment Ltd are not required to payany taxes to the government according to local laws.
VII. Notes to the main items of the consolidated financialstatements (all currency unit is CNY, except otherstatements)
1. Cash and cash equivalents
Unit: CNY
Item
Item | Closing balance | Opening balance |
Cash | 4,067.27 | 24,103.07 |
Bank deposit | 4,282,803,604.61 | 3,602,515,767.58 |
Other cash and cash equivalents | 17,337,176.79 | 12,808,437.32 |
Total | 4,300,144,848.67 | 3,615,348,307.97 |
Including: total deposit outbound | 62,676,784.36 | 61,636,932.89 |
2. Financial assets held for trading
Unit: CNY
Item | Closing balance | Opening balance |
Financial asset at fair value through profit and loss | 17,976,767,209.45 | 17,900,259,775.43 |
Including: | ||
Equity instrument | 2,012,500.00 | |
Debt instrument | 17,974,754,709.45 | 17,900,259,775.43 |
Including: | ||
Total | 17,976,767,209.45 | 17,900,259,775.43 |
Other notes:
Debt instruments are invested in bank financial products and trust financial products thatmature within one year.
3. Notes receivables
1)Classification of notes receivables
Unit: CNY
Item | Closing balance | Opening balance |
Bank acceptance bill | 659,266,780.81 | 242,542,097.76 |
Total | 659,266,780.81 | 242,542,097.76 |
Unit: CNY
Item
Item | Closing balance | Opening balance | ||||||||
Book balance | Provision for bad debt | Book value | Book balance | Provision for bad debt | Book value | |||||
amount | proportion | amount | proportion | amount | proportion | amount | proportion | |||
Including: | ||||||||||
Provision for bad debt of notes receivables by portfolio | 659,266,780.81 | 100.00% | 659,266,780.81 | 242,542,097.76 | 100.00% | 242,542,097.76 | ||||
Including: | ||||||||||
Bank acceptance bill portfolio | 659,266,780.81 | 100.00% | 659,266,780.81 | 242,542,097.76 | 100.00% | 242,542,097.76 | ||||
Total | 659,266,780.81 | 100.00% | 659,266,780.81 | 242,542,097.76 | 100.00% | 242,542,097.76 |
Provision for bad debt by individual: 0.00
Unit: CNY
Item | Closing balance | |||
Book balance | Provision for bad debt | Proportion | Reason |
Provision for bad debt by individual: 0.00
Unit: CNY
Item | Closing balance | |||
Book balance | Provision for bad debt | Proportion | Reason |
Provision for bad debt by individual: 0.00
Unit: CNY
Item | Closing balance | |||
Book balance | Provision for bad debt | Proportion | Reason |
Provision for bad debt by portfolio:
Unit: CNY
Item | Closing balance | ||
Book balance | Provision for bad debt | Proportion | |
Bank acceptance bill portfolio |
Notes to determine provision for bad debt by portfolio:
Provision for bad debt by portfolio:
Unit: CNY
Item
Item | Closing balance | ||
Book balance | Provision for bad debt | Proportion |
Notes to determine provision for bad debt by portfolio:
If provision for bad debt of notes receivable is calculated according to the general model of expected credit loss, please refer to the disclosure methodof other receivables to disclose the relevant information about provision for bad debt:
□ Applicable √ Not applicable
2) Notes receivable that have been endorsed to other parties by the Company but have not expired at the end of year
Unit: CNY
Item | Derecognition at period end | Not derecognition at period end |
Bank acceptance bill | 34,220,000.00 | |
Total | 34,220,000.00 |
4. Accounts receivables
(1) Disclosed by categories
Unit: CNY
Category | Closing balance | Opening balance | ||||||||
Book balance | Provision for bad debt | Book value | Book balance | Provision for bad debt | Book value | |||||
Amount | Proportion | Amount | Proportion | Amount | Proportion | Amount | Proportion | |||
Including: | ||||||||||
Provision for bad debt by portfolio | 18,852,659.14 | 100.00% | 2,772,040.49 | 14.70% | 16,080,618.65 | 7,711,012.90 | 100.00% | 2,188,751.59 | 28.38% | 5,522,261.31 |
Including: | ||||||||||
Risk portfolio | 18,852,659.14 | 100.00% | 2,772,040.49 | 14.70% | 16,080,618.65 | 7,711,012.90 | 100.00% | 2,188,751.59 | 28.38% | 5,522,261.31 |
Total | 18,852,659.14 | 100.00% | 2,772,040.49 | 16,080,618.65 | 7,711,012.90 | 100.00% | 2,188,751.59 | 28.38% | 5,522,261.31 |
Provision for bad debt by individual:
Unit: CNY
Name of client
Name of client | Closing balance | |||
Book balance | Provision for bad debt | Proportion | Reason |
Provision for bad debts by portfolio: CNY 583,288.90
Unit: CNY
Overdue years | Closing balance | ||
Accounts receivables | Provision for bad debt | Proportion of provision | |
Overdue within 1 year | 15,656,172.67 | 469,685.18 | 3.00% |
Overdue 1-2 years | 60,589.99 | 6,059.00 | 10.00% |
Overdue 2-3 years | 982,028.54 | 196,405.70 | 20.00% |
Overdue more than 3 years | 2,153,867.94 | 2,099,890.61 | 97.49% |
Total | 18,852,659.14 | 2,772,040.49 | -- |
Notes to determine provision for bad debt by portfolio:
Provision for bad debt by portfolio:
Unit: CNY
Item | Closing balance | ||
Book Balance | Provision for bad debt | Proportion |
Notes to determine provision for bad debt by portfolio:
If provision for bad debt of notes receivable is calculated according to the general modelof expected credit loss, please refer to the disclosure method of other receivables todisclose the relevant information about provision for bad debt:
□ Applicable √ Not applicable
Disclosed by aging
Unit: CNY
Aging | Book value |
Within 1 year (including 1 year) | 15,656,172.67 |
1-2 years | 60,589.99 |
2-3 years | 982,028.54 |
Over 3 years | 2,153,867.94 |
3-4 years | 103,011.45 |
4-5 years | 12,358.03 |
Over 5 years | 2,038,498.46 |
Total | 18,852,659.14 |
(2) Provision for bad debt that is accrued, recovered or reversed during this periodProvision for bad debts during this period:
Unit: CNY
Category | Opening balance | Changes in the current period | Closing balance | |||
Provision | Recovered or reversed | Write off | Others | |||
Provision for bad debt of accounts receivables | 2,188,751.59 | 583,288.90 | 2,772,040.49 | |||
Total | 2,188,751.59 | 583,288.90 | 2,772,040.49 |
Significant amount of reversal or recovery during this period
Unit: CNY
Company name | Amount recovered or reversed | Method |
(3)Top five entities with the largest balances of the accounts receivables
Unit: CNY
Company's name
Company's name | Closing balance | Proportion in the total accounts receivables | Provision amount |
First | 8,231,298.10 | 43.66% | 246,938.94 |
Second | 4,617,249.37 | 24.49% | 138,517.48 |
Third | 600,000.00 | 3.18% | 600,000.00 |
Fourth | 529,923.18 | 2.81% | 15,897.70 |
Fifth | 497,284.97 | 2.64% | 14,918.55 |
Total | 14,475,755.62 | 76.78% |
5. Prepayment
(1)Analysis by aging
Unit: CNY
Aging | Closing balance | Opening balance | ||
Amount | Proportion | Amount | Proportion | |
Within 1 year | 198,626,119.93 | 99.26% | 14,556,402.45 | 76.68% |
1-2 years | 972,506.99 | 0.48% | 3,978,336.29 | 20.95% |
2-3 years | 413,485.27 | 0.21% | ||
Over 3 years | 103,213.00 | 0.05% | 449,430.80 | 2.37% |
Total | 200,115,325.19 | -- | 18,984,169.54 | -- |
Significant prepayment aging over 1 year without settlement on time :
No significant prepayment aging over 1 year are recorded in the ending balance.
(2)Top five entities with the largest balances of prepayment
Company’s name | Closing balance | Proportion in the total prepayment (%) |
First | 177,970,000.00 | 88.93 |
Second | 9,081,148.00 | 4.54 |
Third | 2,959,716.80 | 1.48 |
Fourth | 1,710,654.91 | 0.86 |
Fifth | 1,109,424.00 | 0.55 |
Total | 192,830,943.71 | 96.36 |
6. Other receivables
Unit: CNY
Item | Closing balance | Opening balance |
Other receivables | 37,521,590.52 | 51,367,132.22 |
Total | 37,521,590.52 | 51,367,132.22 |
(1)Other receivables
a) Other receivables by nature
Unit: CNY
Nature of other receivables | Closing balance | Opening balance |
Savings deposits (infringement dispute) | 65,747,048.93 | 65,747,048.93 |
Deposit | 15,338,991.78 | 16,812,560.00 |
Cooperation | 3,910,000.00 | 3,910,000.00 |
Business loans, petty cash and others
Business loans, petty cash and others | 28,136,955.41 | 24,873,608.88 |
Total | 113,132,996.12 | 111,343,217.81 |
b)Provision for bad debt
Unit: CNY
Bad debt | Phase 1 | Phase 2 | Phase 3 | Total |
Expected credit losses in the next 12 months | Expected credit loss for lifetime (No credit loss occurred) | Expected credit loss for lifetime (Credit loss occurred) | ||
Balance as at 1 January 2019 | 491,627.89 | 59,484,457.70 | 59,976,085.59 | |
Change of opening balance as at 1 January 2019 in current period | —— | —— | —— | —— |
-- Move to phase 3 | -122,271.81 | 122,271.81 | ||
Provision in 2019 | 116,445.88 | 18,256,611.48 | 18,373,057.36 | |
Write-off in 2019 | 2,080,000.00 | 2,080,000.00 | ||
Other changes | -657,737.35 | -657,737.35 | ||
Balance as at 31 December 2019 | 485,801.96 | 75,125,603.64 | 75,611,405.60 |
Significant changes of loss provision in the book balance during this period.
□ Applicable √ Not applicable
Disclosure by aging
Unit: CNY
Aging | Book value |
Within 1 year(including 1 year) | 10,470,134.36 |
1-2 years | 5,255,906.32 |
2-3 years | 4,830,781.64 |
Over 3 years | 92,576,173.80 |
3-4 years | 297,652.17 |
4-5 years | 1,557,935.70 |
Over 5 years | 90,720,585.93 |
Total | 113,132,996.12 |
c)Provision for bad debt that is accrued, recovered or reversed during this periodProvision for bad debts during this period:
Unit: CNY
Category | Opening balance | Changes in current period | Closing balance | |||
Provision | Recovered or reversed | Write off | Other changes | |||
Other receivables bad debt provision | 59,976,085.59 | 18,373,057.36 | 2,080,000.00 | -657,737.35 | 75,611,405.60 | |
Total | 59,976,085.59 | 18,373,057.36 | 2,080,000.00 | -657,737.35 | 75,611,405.60 |
Significant amount of reversal or recovery during this period:
Unit: CNY
Company Name | Recovery amount | Method |
d)Other receivables actually written off during this period
Unit: CNY
Item
Item | Written off amount |
Other receivables actually written off | 2,080,000.00 |
Significant other receivables actually written off
Unit: CNY
Company’s name | Nature | Amount | Reason | Procedures performed | Arisen from related party transactions or not |
Other statements:
e)Top five entities with the largest balances of other receivables
Unit: CNY
Company’s name | Category | Closing balance | Aging | Proportion in total receivables | Provisioning amount at period end |
Industrial Commercial Bank of China Ltd. Zhengzhou Jiefang Road branch. | Savings deposit (Infringement dispute) | 42,907,124.66 | Over 5 years | 37.93% | 19,872,137.40 |
Industrial Commercial Bank of China Ltd. Kaifeng Haode branch | Savings deposit (Infringement dispute) | 22,839,924.27 | Over 5 years | 20.19% | 22,839,924.27 |
Bankruptcy administrator of Jiangsu Juntai Properties Co.,Ltd., Suqian Guotai Department Store Co.,Ltd. | Deposit | 15,000,000.00 | Over 5 years | 13.26% | 15,000,000.00 |
Nanjing Peilong Sports Culture Co., Ltd. | Cooperation | 3,910,000.00 | Over 5 years | 3.45% | 3,910,000.00 |
Advance money for another | Advance money for another | 2,379,354.55 | 2-3 year | 2.10% | 71,380.64 |
Total | -- | 87,036,403.48 | -- | 76.93% | 61,693,442.31 |
7. Inventories
Whether the Company implement the new revenue standards.
□ Yes √ No
(1)Categories of Inventories
Unit: CNY
Category | Closing balance | Opening balance | ||||
Book balance | Provision for stock obsolescence | Book value | Book balance | Provision for stock obsolescence | Book value | |
Raw material | 394,844,178.61 | 6,710,130.33 | 388,134,048.28 | 389,136,605.04 | 8,125,769.63 | 381,010,835.41 |
Work in progress | 551,503,829.41 | 551,503,829.41 | 530,437,380.46 | 530,437,380.46 | ||
Stocks | 1,704,339,664.69 | 1,704,339,664.69 | 1,637,109,450.86 | 1,637,109,450.86 |
Revolvingmaterials
Revolving materials | 7,316,606.29 | 2,270,576.29 | 5,046,030.00 | |||
semi-finished goods | 11,789,267,153.89 | 11,789,267,153.89 | 11,338,514,891.01 | 11,338,514,891.01 | ||
Total | 14,439,954,826.60 | 6,710,130.33 | 14,433,244,696.27 | 13,902,514,933.66 | 10,396,345.92 | 13,892,118,587.74 |
(2)Provision for stock obsolescence
Unit: CNY
Category | Opening book balance | Increases in current period | Decreases in current period | Closing book balance | ||
Provision | Other | Recovery or reversal | Other | |||
Raw material | 8,125,769.63 | 2,248,496.85 | 3,664,136.15 | 6,710,130.33 | ||
Revolving material | 2,270,576.29 | 2,270,576.29 | ||||
Total | 10,396,345.92 | 2,248,496.85 | 5,934,712.44 | 6,710,130.33 |
8. Other current assets
Whether the Company implement the new revenue standards.
□ Yes √ No
Unit: CNY
Item
Item | Closing balance | Opening balance |
VAT to be deducted | 159,457,511.39 | 116,379,452.59 |
Consumption tax to be deducted | 7,020,885.09 | 21,568,108.81 |
Advance payment of income tax | 16,641,257.99 | 8,779,276.82 |
Total | 183,119,654.47 | 146,726,838.22 |
9. Long-term equity investments
Unit: CNY
Investee | Opening balance | Changes in current period | Closing balance | Closing balance of provision for impairment | |||||||
Increase | Decrease | Profit or loss recognized under equity method | Adjustments of other comprehensive income | Other changes in equity | Cash divided or profit declared | Provision for impairment | Other | ||||
Joint venture | |||||||||||
Diageo International Spirits Company Limited | 18,000,000.00 | -6,220,574.92 | 178,619.29 | -1,436,422.19 | 10,521,622.18 | ||||||
Subtotal | 18,000,000.00 | -6,220,574.92 | 178,619.29 | -1,436,422.19 | 10,521,622.18 | ||||||
Associated enterprise | |||||||||||
Jiangsu Su Wine Culture Transmission Co,Ltd. | 3,265,020.38 | 933,080.63 | -510,000.00 | 453,413.80 | 4,141,514.81 | ||||||
Nanjing | 3,639,991.56 | 405,497.30 | 4,045,488.86 |
HesongCultureTechnologyCo.,Ltd.
Hesong Culture Technology Co.,Ltd. | |||||||||||
Jiangsu Xinghe Investment Management Co.,Ltd. | 2,518,316.88 | 3,700,000.00 | 434,708.65 | 6,653,025.53 | |||||||
Subtotal | 9,423,328.82 | 3,700,000.00 | 1,773,286.58 | -510,000.00 | 453,413.80 | 14,840,029.20 | |||||
Total | 9,423,328.82 | 21,700,000.00 | -4,447,288.34 | 178,619.29 | -510,000.00 | -983,008.39 | 25,361,651.38 |
10. Other non-current financial assets
Unit: CNY
Item | Closing balance | Opening balance |
Equity instrument investment | 3,353,861,013.63 | 2,954,345,741.07 |
Debt instrument investment | 1,696,990,657.53 | 169,803,013.70 |
Total | 5,050,851,671.16 | 3,124,148,754.77 |
11. Fixed assets
Unit: CNY
Item | Closing balance | Opening balance |
Fixed Assets | 7,256,557,503.85 | 7,833,665,282.19 |
Total | 7,256,557,503.85 | 7,833,665,282.19 |
(1)Details of fixed assets
Unit: CNY
Item | Buildings and constructions | Machinery equipment | Transportation equipment | Other equipment | Total |
Original cost of fixed assets | |||||
1.Opening Balance | 7,865,532,249.94 | 3,108,421,413.39 | 65,422,432.44 | 375,598,572.77 | 11,414,974,668.54 |
2.Increase in current period | 53,028,448.79 | 60,408,091.23 | 3,412,539.74 | 40,148,648.11 | 156,997,727.87 |
(1)External purchase | 4,150,356.67 | 32,546,829.31 | 3,412,539.74 | 40,148,648.11 | 80,258,373.83 |
(2)Transfer from construction in progress | 48,878,092.12 | 27,861,261.92 | 76,739,354.04 |
(3) Increase from business combination
(3) Increase from business combination | |||||
3.Decrease in current period | 8,492,400.49 | 14,297,062.81 | 2,288,522.41 | 5,363,766.13 | 30,441,751.84 |
(1)Disposal or retirement | 8,492,400.49 | 14,297,062.81 | 2,288,522.41 | 5,363,766.13 | 30,441,751.84 |
(2)Decrease from business combination | |||||
4.Closing Balance | 7,910,068,298.24 | 3,154,532,441.81 | 66,546,449.77 | 410,383,454.75 | 11,541,530,644.57 |
Accumulated depreciation | |||||
1.Opening Balance | 1,906,007,391.12 | 1,376,632,624.04 | 45,545,370.10 | 253,124,001.09 | 3,581,309,386.35 |
2.Increase in current period | 376,588,559.24 | 284,242,262.56 | 6,903,922.95 | 54,274,521.15 | 722,009,265.90 |
(1)Provision | 376,588,559.24 | 284,242,262.56 | 6,903,922.95 | 54,274,521.15 | 722,009,265.90 |
3.Decrease in current period | 5,162,158.07 | 6,297,808.98 | 2,122,891.02 | 4,762,653.46 | 18,345,511.53 |
(1) Disposal or retirement | 5,162,158.07 | 6,297,808.98 | 2,122,891.02 | 4,762,653.46 | 18,345,511.53 |
4.Closing Balance | 2,277,433,792.29 | 1,654,577,077.62 | 50,326,402.03 | 302,635,868.78 | 4,284,973,140.72 |
Provision for fixed asset impairment | |||||
1.Opening Balance | |||||
2.Increase in current period | |||||
(1)Provision | |||||
3.Decrease in current period | |||||
(1)Disposal or retirement | |||||
4.Closing Balance | |||||
Book value | |||||
1.Closing book value | 5,632,634,505.95 | 1,499,955,364.19 | 16,220,047.74 | 107,747,585.97 | 7,256,557,503.85 |
2.Opening book value | 5,959,524,858.82 | 1,731,788,789.35 | 19,877,062.34 | 122,474,571.68 | 7,833,665,282.19 |
(2)Fixed assets acquired from finance lease
Unit: CNY
Item | Original cost | Accumulated depreciation | Provision for impairment | Book value |
(3)Investment properties without certification of right
Unit: CNY
Item
Item | Book value | Reason for not having the certification of right |
Yanghe Blue-collar workers apartment | 143,409,809.42 | In process |
Yanghe workshop etc. | 84,604,173.30 | In process |
Total | 228,013,982.72 |
12. Construction in progress
Unit: CNY
Item | Closing balance | Opening balance |
Construction in progress | 263,153,505.12 | 153,747,041.24 |
Construction materials | 788,063.58 | |
Total | 263,153,505.12 | 154,535,104.82 |
(1)Details of the construction in progress
Unit: CNY
Item | Closing balance | Opening balance | ||||
Book Balance | Provision for impairment | Book value | Book Balance | Provision for impairment | Book value | |
R&D Center Building project | 330,097.09 | 330,097.09 | 7,668,674.65 | 7,668,674.65 | ||
Packaging logistics project of Shuanggou Distillery industry park | 3,145,312.97 | 3,145,312.97 | 12,080,019.36 | 12,080,019.36 | ||
Shuanggou new area brewing project | 13,132,641.22 | 13,132,641.22 | 13,132,641.22 | 13,132,641.22 | ||
Shuanggou new area supporting project | 492,307.69 | 492,307.69 | 492,307.69 | 492,307.69 | ||
Shuanggou packaging production line | 10,610,699.88 | 10,610,699.88 | 10,610,699.88 | 10,610,699.88 | ||
Intelligent brewing (Mellowness 125 workshop) project | 26,209,114.57 | 26,209,114.57 | 11,167,656.92 | 11,167,656.92 | ||
Siyang base three-dimensional warehouse, packaging production line project | 14,449,560.37 | 14,449,560.37 | 15,581,233.56 | 15,581,233.56 | ||
Qu-making third workshop sesame qu expansion phase II project | 5,955,626.39 | 5,955,626.39 | 5,428,198.28 | 5,428,198.28 | ||
40,000 tons of pottery jar warehouse project | 82,205,504.93 | 82,205,504.93 |
Nanjing operation center building project
Nanjing operation center building project | 40,644,198.33 | 40,644,198.33 | ||||
Other projects | 65,978,441.68 | 65,978,441.68 | 77,585,609.68 | 77,585,609.68 | ||
Total | 263,153,505.12 | 263,153,505.12 | 153,747,041.24 | 153,747,041.24 |
(2)Significant changes in construction in progress
Unit: CNY
Item | Budget | Opening balance | Increase in current period | Transfer into fixed assets | Other decreases | Closing balance | Proportion of accumulative project input in budget (%) | Progress | Interest capitalization rate | Include:Capitalized interest for the period | Capitalization rate for the period | Source of funds |
R&D Center Building project | 260,510,000.00 | 7,668,674.65 | 4,634,381.84 | 11,972,959.40 | 330,097.09 | 197.87% | Late stage | Other | ||||
Shuanggou new area bottle storage and packaging relocation project | 495,000,000.00 | 12,080,019.36 | 2,199,188.86 | 11,133,895.25 | 3,145,312.97 | 207.12% | Late stage | Other | ||||
Shuanggou new area brewing project | 528,180,000.00 | 13,132,641.22 | 13,132,641.22 | 162.55% | Late stage | Other | ||||||
Shuanggou new area supporting project | 70,000,000.00 | 492,307.69 | 492,307.69 | 173.17% | Late stage | Other | ||||||
Shuanggou packaging production line | 120,000,000.00 | 10,610,699.88 | 10,610,699.88 | 89.53% | Late stage | Other | ||||||
Intelligent brewing (Mellowness 125 workshop) project | 45,000,000.00 | 11,167,656.92 | 15,041,457.65 | 26,209,114.57 | 58.24% | Late stage | Other | |||||
Siyang base three-dimensional warehouse, packaging production line project | 41,000,000.00 | 15,581,233.56 | 4,059,801.92 | 5,191,475.11 | 14,449,560.37 | 50.93% | Medium-term | Other | ||||
Qu-making third workshop sesame qu expansion phase II project | 9,800,000.00 | 5,428,198.28 | 527,428.11 | 5,955,626.39 | 60.77% | Medium-term | Other | |||||
40,000 tons of pottery jar warehouse project | 360,000,000.00 | 82,205,504.93 | 82,205,504.93 | 22.83% | Medium-term | Other |
Nanjing operation centerbuilding project
Nanjing operation center building project | 800,000,000.00 | 40,644,198.33 | 40,644,198.33 | 5.08% | Early stage | Other | ||||||
Total | 2,729,490,000.00 | 76,161,431.56 | 149,311,961.64 | 28,298,329.76 | 197,175,063.44 | -- | -- | -- |
(3)Construction materials
Unit: CNY
Item | Closing balance | Opening balance | ||||
Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
Cable | 6,320.03 | 6,320.03 | ||||
Electric equipment | 781,743.55 | 781,743.55 | ||||
Total | 788,063.58 | 788,063.58 |
13. Intangible assets
(1)Details of intangible assets
Unit: CNY
Item | Land use right | Patent right | No-patent right technology | Trademark right | Computer software | Total |
Original cost of intangible assets | ||||||
Opening balance | 1,946,066,638.06 | 399,851,465.43 | 105,654,667.78 | 2,451,572,771.27 | ||
Increase in current period | 5,437,510.08 | 12,793,902.50 | 18,231,412.58 | |||
Including: Acquired | 5,437,510.08 | 12,793,902.50 | 18,231,412.58 | |||
Internally developed | ||||||
Business combination | ||||||
Decrease in current period | ||||||
Including: Disposal | ||||||
Closing balance | 1,951,504,148.14 | 399,851,465.43 | 118,448,570.28 | 2,469,804,183.85 |
Accumulated amortization of intangibleassets
Accumulated amortization of intangible assets | ||||||
Opening balance | 247,135,065.66 | 384,868,550.40 | 37,607,468.11 | 669,611,084.17 | ||
Increase in current period | 39,916,405.50 | 2,241,252.62 | 10,901,297.42 | 53,058,955.54 | ||
Including: Provision | 39,916,405.50 | 2,241,252.62 | 10,901,297.42 | 53,058,955.54 | ||
Decrease in current period | ||||||
Including: Disposal | ||||||
Closing balance | 287,051,471.16 | 387,109,803.02 | 48,508,765.53 | 722,670,039.71 | ||
Provision for impairment | ||||||
Opening balance | ||||||
Increase in current period | ||||||
Including: Provision | ||||||
Decrease in current period | ||||||
Including: Disposal | ||||||
Closing balance | ||||||
Book value of intangible assets | ||||||
Closing book value | 1,664,452,676.98 | 12,741,662.41 | 69,939,804.75 | 1,747,134,144.14 | ||
Opening book value | 1,698,931,572.40 | 14,982,915.03 | 68,047,199.67 | 1,781,961,687.10 |
The proportion of intangible assets formed through internal research and development of the Company in the balance of intangible assets at the endof this period.
14. Goodwill
(1)Original cost of goodwill
Unit: CNY
Investee’s name or items resulting in goodwill | Opening balance | Increase in current period | Decrease in current period | Closing balance | ||
Business combination | Disposal | |||||
Jiangsu Shuanggou Distillery Stock Co.,Ltd. | 276,001,989.95 | 276,001,989.95 | ||||
Jiangsu Zhaiyougou E-commerce Co.,Ltd | 6,940,018.79 | 6,940,018.79 |
Jiangsu Zhaibianli E-commerce Co.,Ltd
Jiangsu Zhaibianli E-commerce Co.,Ltd | 21,250,284.80 | 21,250,284.80 | ||||
Guizhou Guijiu Co.,Ltd. | 18,826,210.01 | 18,826,210.01 | ||||
ZYG TECHNOLOGY INVESTMENT LTD | 5,057,111.19 | 5,057,111.19 | ||||
Guizhou Welcome Drink Stock Co.,Ltd | 11,333,195.25 | 11,333,195.25 | ||||
Dream Blue Chuanhaihui (Shiyan) Trade Investment Co.,Ltd. | 3,405,542.42 | 3,405,542.42 | ||||
Total | 342,814,352.41 | 3,405,542.42 | 339,408,809.99 |
(2)Provision for impairment of goodwill
Unit: CNY
Investee’s name or items resulting in goodwill | Opening balance | Increase in current period | Decrease in current period | Closing balance | ||
Provision | Disposal | |||||
Jiangsu Zhaiyougou E-commerce Co.,Ltd | 6,940,018.79 | 6,940,018.79 | ||||
Jiangsu Zhaibianli E-commerce Co.,Ltd | 21,250,284.80 | 21,250,284.80 | ||||
Guizhou Guijiu Co.,Ltd. | 18,826,210.01 | 18,826,210.01 | ||||
ZYG TECHNOLOGY INVESTMENT LTD | 5,057,111.19 | 5,057,111.19 | ||||
Guizhou Welcome Drink Stock Co.,Ltd | 11,333,195.25 | 11,333,195.25 | ||||
Dream Blue Chuanhaihui (Shiyan) Trade Investment Co.,Ltd. | 3,405,542.42 | 3,405,542.42 | ||||
Total | 66,812,362.46 | 3,405,542.42 | 63,406,820.04 |
Related information of asset groups or asset group portfolio containing goodwillStatement of testing process of impairment of goodwill, key parameters (e.g. the forecastgrowth rate at present value of future cash flows; the growth rate in stable period; profitmargin; the discount rate; predictive period and etc.) and determination methods ofrecognizing goodwill impairment loss.Goodwill impairment test according to the present value of the expected future cash flowof the asset groups, group assets of recent three years based on the actual operationsituation and the future operation of the expectations, the estimated future cash flow ofthe asset group, and according to the pre-tax discount rate of 18.47% discount aftercalculating the recoverable amount of an asset group. After the test, there is no goodwillimpairment resulting from the acquisition of Jiangsu Shuanggou Distillery Stock Co., Ltd.Effect of goodwill impairment testOther statements:
15. Long-term prepaid expenses
Unit: CNY
Item
Item | Opening balance | Increase in the current period | Amortization for the current period | Other decreases | Closing balance |
Renovation costs of rented house | 907,636.00 | 381,215.44 | 1,034,707.84 | 254,143.60 | |
Total | 907,636.00 | 381,215.44 | 1,034,707.84 | 254,143.60 |
16. Deferred tax assets/ deferred tax liabilities
(1)Deferred tax assets before offset
Unit: CNY
Item | Closing balance | Opening balance | ||
Deductible temporary differences | Deferred tax assets | Deductible temporary differences | Deferred tax assets | |
Provision for asset impairment | 81,682,220.18 | 20,415,104.69 | 69,593,195.47 | 16,780,145.22 |
Unrealized profit from internal transaction | 41,036,182.10 | 10,259,045.53 | 49,459,513.99 | 12,364,878.51 |
Deductible losses | 456,081,306.89 | 114,020,326.72 | 298,587,033.87 | 74,646,758.47 |
The difference between book value of debt and tax base | 2,721,478,322.51 | 680,369,580.63 | 2,437,185,000.00 | 609,296,250.00 |
Total | 3,300,278,031.68 | 825,064,057.57 | 2,854,824,743.33 | 713,088,032.20 |
(2)Deferred tax liabilities before offset
Unit: CNY
Item | Closing balance | Opening balance | ||
Taxable temporary differences | Deferred tax liabilities | Taxable temporary differences | Deferred tax liabilities | |
Valuation of appreciation of business combination assets not under common control | 47,048,144.60 | 11,762,036.15 | 56,077,024.20 | 14,019,256.05 |
Changes in fair value of financial assets held for trading | 516,851,327.69 | 127,497,047.01 | 405,199,394.80 | 101,561,882.13 |
Total | 563,899,472.29 | 139,259,083.16 | 461,276,419.00 | 115,581,138.18 |
(3)Deferred tax assets or liabilities presented as net value after offset
Unit: CNY
Item
Item | Offset amount of deferred tax assets and deferred tax liabilities | Closing balance of deferred tax assets or deferred tax liabilities after offset | Opening offset amount of deferred tax assets and deferred tax liabilities | Opening balance of deferred tax assets or deferred tax liabilities after offset |
Deferred tax assets | 825,064,057.57 | 713,088,032.20 | ||
Deferred tax liabilities | 139,259,083.16 | 115,581,138.18 |
(4)Details of unrecognized deferred tax assets
Unit: CNY
Item | Closing balance | Opening balance |
Deductible temporary differences | 97,994,641.66 | 146,980,533.21 |
Deductible losses | 155,606,254.87 | 214,056,848.93 |
Total | 253,600,896.53 | 361,037,382.14 |
(5)Deductible losses from unrecognized deferred tax assets will due on thefollowing years
Unit: CNY
Year | Closing balance | Opening balance | Note |
2020 | 27,264,949.28 | ||
2021 | 50,282,695.77 | 82,161,059.93 | |
2022 | 67,671,298.41 | 67,671,298.41 | |
2023 | 32,435,218.31 | 36,959,541.31 | |
2024 | 5,217,042.38 | ||
Total | 155,606,254.87 | 214,056,848.93 | -- |
17. Other non-current assets
Whether the Company implement the new revenue standards
□ Yes √ No
Unit: CNY
Item | Closing balance | Opening balance |
Compensation for land demolition | 158,606,824.94 | 158,606,824.94 |
Prepayment of construction equipment and house purchase | 45,791,625.24 | 46,405,359.98 |
Total | 204,398,450.18 | 205,012,184.92 |
18. Accounts payables
(1)Presentation of accounts payables
Unit: CNY
Item | Closing balance | Opening balance |
Material purchase | 1,263,490,446.81 | 1,159,829,383.04 |
Construction and equipment payment | 67,158,670.01 | 101,453,014.85 |
Total | 1,330,649,116.82 | 1,261,282,397.89 |
19. Advance from customers
Whether the Company implement the new revenue standards
□ Yes √ No
(1)Presentation of advances from customers
Unit: CNY
Item
Item | Closing balance | Opening balance |
Advance from customers | 6,753,595,187.64 | 4,468,409,150.75 |
Total | 6,753,595,187.64 | 4,468,409,150.75 |
20. Employee benefits payable
(1)Employee benefits payable shown as follows:
Unit: CNY
Item | Opening balance | Increase in current period | Decrease in current period | Closing balance |
Short-term benefits | 185,559,166.78 | 2,031,622,068.19 | 2,101,279,279.03 | 115,901,955.94 |
Post-employment benefits-defined contribution plans | 192,206.81 | 146,921,590.75 | 146,921,590.25 | 192,207.31 |
Termination benefits | 175,459.20 | 175,459.20 | ||
Total | 185,751,373.59 | 2,178,719,118.14 | 2,248,376,328.48 | 116,094,163.25 |
(2)Short-term employee benefits payable shown as follows:
Unit: CNY
Item | Opening balance | Increase in current period | Decrease in current period | Closing balance |
Wages, bonuses, allowances and grants | 181,365,224.92 | 1,778,242,627.14 | 1,843,778,130.83 | 115,829,721.23 |
Employees’ welfare | 97,954,214.71 | 97,954,214.71 | ||
Social insurance premiums | 14,860.09 | 70,992,345.87 | 70,992,345.88 | 14,860.08 |
Including: Medical Insurance | 7,972.00 | 57,944,553.64 | 57,944,553.64 | 7,972.00 |
Work-related injury insurance | 6,875.34 | 4,441,821.67 | 4,441,821.68 | 6,875.33 |
Maternity insurance premium | 12.75 | 8,605,970.56 | 8,605,970.56 | 12.75 |
Housing funds | 1,149,180.80 | 75,697,089.01 | 76,793,610.01 | 52,659.80 |
Labor union expenditures and employee education funds | 3,029,900.97 | 8,735,791.46 | 11,760,977.60 | 4,714.83 |
Total | 185,559,166.78 | 2,031,622,068.19 | 2,101,279,279.03 | 115,901,955.94 |
(3)Defined Contribution Plan shown as follows:
Unit: CNY
Item | Opening balance | Increase in current period | Decrease in current period | Closing balance |
Basic endowment insurance premium | 191,322.73 | 142,700,163.30 | 142,700,162.80 | 191,323.23 |
Unemployment insurance premium | 884.08 | 4,221,427.45 | 4,221,427.45 | 884.08 |
Total | 192,206.81 | 146,921,590.75 | 146,921,590.25 | 192,207.31 |
21. Taxes payable
Unit: CNY
Item | Closing balance | Opening balance |
Value-added tax | 27,126,012.81 | 189,165,872.30 |
Consumption tax
Consumption tax | 184,097,543.52 | 718,733,315.03 |
Enterprise income tax | 1,548,461,975.77 | 2,284,751,258.08 |
Individual Income Tax | 11,273,828.79 | 8,034,721.58 |
Urban maintenance and construction tax | 11,574,124.18 | 16,248,651.42 |
Land use tax | 4,322,610.74 | 13,930,499.24 |
Property tax | 14,349,066.89 | 5,044,392.51 |
Education Surcharge and Local Education Surcharge | 11,016,464.11 | 15,946,560.04 |
Stamp tax | 731,524.41 | 1,271,183.78 |
Integrated fund | 2,954.09 | 560.58 |
Other tax | 2,331,901.16 | 2,331,745.16 |
Total | 1,815,288,006.47 | 3,255,458,759.72 |
22. Other payables
Unit: CNY
Item | Closing balance | Opening balance |
Other payables | 6,521,146,762.07 | 6,457,301,511.01 |
Total | 6,521,146,762.07 | 6,457,301,511.01 |
(1) Other payables
(a)Categories by nature
Unit: CNY
Item | Closing balance | Opening balance |
Dealer unsettled discount | 2,558,631,122.51 | 2,298,765,700.00 |
Dealer deposit | 2,668,012,523.41 | 2,929,101,334.21 |
Dealer risk pledged deposit | 718,922,266.50 | 659,646,746.28 |
Accrued expenses | 306,270,802.86 | 287,765,353.59 |
Quality guarantee deposit and performance deposit | 180,729,458.44 | 188,186,132.55 |
Other payables | 88,580,588.35 | 93,836,244.38 |
Total | 6,521,146,762.07 | 6,457,301,511.01 |
(b) Other important payables aging more than 1 year
Unit: CNY
Item | Closing balance | Reasons for being unpaid or written-off |
Dealer risk pledged deposit and dealer deposit | 632,122,994.05 | Dealer risk pledged deposit and dealer deposit |
Total | 632,122,994.05 | -- |
23. Long-term loans
(1)Long-term loans by category
Unit: CNY
Item | Closing balance | Opening balance |
Credit loans | 72,723.00 | 109,088.00 |
Total | 72,723.00 | 109,088.00 |
24. Long-term payables
Unit: CNY
Item | Closing balance | Opening balance |
Special accounts payables | 197,623,728.85 | 198,404,248.85 |
Total | 197,623,728.85 | 198,404,248.85 |
(1)Long-term payables by nature
Unit: CNY
Item
Item | Closing balance | Opening balance |
(2)Special accounts payables
Unit: CNY
Item | Opening balance | Increase in current period | Decrease in current period | Closing balance | Reason |
Compensation for replacement of employee status | 198,404,248.85 | 780,520.00 | 197,623,728.85 | ||
Total | 198,404,248.85 | 780,520.00 | 197,623,728.85 | -- |
25. Deferred incomes
Unit: CNY
Item | Opening balance | Increase in current period | Decrease in current period | Closing balance | Reason |
Government grants | 98,513,500.00 | 8,757,000.00 | 89,756,500.00 | ||
Total | 98,513,500.00 | 8,757,000.00 | 89,756,500.00 | -- |
Projects involving government grants:
Unit: CNY
Liability item | Opening balance | Increase in current period | Non-operating income in current period | Other income in current period | Cost reduction in current period | Other changes | Closing balance | Relevant to asset or income |
Hubei Lihuacun liquor industry liquor brewing, filling project supporting facilities construction subsidies | 30,310,600.00 | 4,257,000.00 | 26,053,600.00 | Asset | ||||
Special fund for packaging logistics project in Shuanggou new area | 18,000,000.00 | 3,000,000.00 | 15,000,000.00 | Asset | ||||
Special fund for Harbin Binzhou brewery construction project | 41,202,900.00 | 41,202,900.00 | Asset | |||||
Shuanggou sewage treatment project | 9,000,000.00 | 1,500,000.00 | 7,500,000.00 | Asset |
26. Share capital
Unit: Share
Opening balance | Increases/decreases in the current period (+, -) | Closing balance | |||||
Issuance of new shares | Share donation | Conversion of reserves funds into shares | Others | Subtotal | |||
Total number of shares | 1,506,988,000.00 | 1,506,988,000.00 |
27. Capital reserves
Unit: CNY
Item | Opening balance | Increase in current period | Decrease in current period | Closing balance |
Share premium | 741,674,076.44 | 171,526.31 | 741,502,550.13 | |
Other capital reserves | 30,000.00 | 30,000.00 | ||
Total | 741,704,076.44 | 171,526.31 | 741,532,550.13 |
Other statements, including the change in this period and the reasons for the changeDuring this period, the decrease of capital reserves was CNY 171,526.31, resulting fromcapital decrease of minority shareholders of Dream Blue Haichuanhui (Shiyan) TradeInvestment Co.,Ltd., the holding subsidiary of the Company.
28. Other comprehensive incomes
Unit: CNY
Item
Item | Opening balance | Current period | Closing balance | |||||
Amount in current period before income tax | Less: Previously recognized in other comprehensive income transferred to profit or loss | Less: previously recognized in other comprehensive income transferred to retained earnings | Less: income tax | Amount attribute to parent company after tax | Amount attribute to non-controlling shareholders after tax | |||
2.Other consolidate incomes that will be reclassified into profit and loss | -1,370,740.85 | -2,228,748.45 | -2,238,030.31 | 9,281.86 | -3,608,771.16 | |||
Including: other comprehensive income will be reclassified into profits or losses under the equity method | 178,619.29 | 178,619.29 | 178,619.29 | |||||
Difference from translation of financial statements in foreign currency | -1,370,740.85 | -2,407,367.74 | -2,416,649.60 | 9,281.86 | -3,787,390.45 | |||
Total other comprehensive income | -1,370,740.85 | -2,228,748.45 | -2,238,030.31 | 9,281.86 | -3,608,771.16 |
Other statements, including adjustments for valid portion of the gains and or losses from cash flow hedging transferring to initial recognition amount ofprojects hedged.
29. Surplus reserves
Unit: CNY
Item | Opening balance | Increase in current period | Decrease in current period | Closing balance |
Statutory surplus reserves | 753,494,000.00 | 753,494,000.00 | ||
Total | 753,494,000.00 | 753,494,000.00 |
Statements for surplus reserves include increase or decrease changes and change reasons this period:
The statutory surplus reserve has reached 50% of the registered capital, and the statutory surplus reserve will not be accrued during this period.
30. Undistributed profits
Unit: CNY
Item
Item | Current period | Previous period |
Undistributed profit before adjustment at the end of the last year | 30,784,308,899.94 | 26,511,938,505.25 |
Adjustment in the total undistributed profits at the beginning of year | 165,659,685.69 | 0.00 |
Undistributed profit after adjustment at the beginning of year | 30,949,968,585.63 | 26,511,938,505.25 |
Plus: net profit attributable to owners of the parent company for the current period | 7,382,822,726.87 | 8,115,189,794.69 |
Ordinary share dividends payable | 4,822,361,600.00 | 3,842,819,400.00 |
Undistributed profits at the end of the period | 33,510,429,712.50 | 30,784,308,899.94 |
Statements for adjusting undistributed profits at the beginning of the period:
(1)Due to retrospective adjustment according to Accounting Standards for BusinessEnterprises and related new rule, undistributed profit at the beginningincreases/decreases by CNY 165,659,685.69.
(2)Due to changes of accounting policies, undistributed profit at the beginningincreases/decreases by CNY 0.00.
(3)Due to correction of accounting errors, undistributed profit at the beginningincreases/decreases by CNY 0.00.
(4)Due to change of the merged scope, undistributed profit at the beginning of the periodincreases/decreases by CNY 0.00.
(5)Due to other influences, undistributed profit at the beginning totallyincreases/decreases by CNY 0.00.
31. Operating income and operating costs
Unit: CNY
Item | Current period amount | Previous period amount | ||
Operating income | Operating cost | Operating income | Operating cost | |
Primary business | 22,161,278,307.05 | 5,772,779,588.18 | 23,186,902,149.00 | 5,527,417,445.92 |
Other business | 965,198,578.02 | 853,582,663.06 | 972,899,845.68 | 825,824,752.35 |
Total | 23,126,476,885.07 | 6,626,362,251.24 | 24,159,801,994.68 | 6,353,242,198.27 |
Whether the Company implement the new revenue standards
□ Yes √ No
32. Taxes and surcharges
Unit: CNY
Item | Current period amount | Previous period amount |
Consumption tax | 2,605,319,409.77 | 3,052,824,791.60 |
Urban maintenance and construction tax | 254,046,554.00 | 306,402,753.67 |
Educational surcharge | 252,226,373.49 | 304,586,562.85 |
Property tax | 61,403,035.90 | 61,463,159.37 |
Land use tax | 17,976,049.12 | 22,733,353.58 |
Stamp tax | 8,809,094.29 | 10,995,368.32 |
Increment tax on land value | 1,567,679.81 | 10,699,953.12 |
Environmental protection tax | 126,776.37 | 224,031.57 |
Others | 4,853.34 | |
Total | 3,201,479,826.09 | 3,769,929,974.08 |
33. Selling and distribution expenses
Unit: CNY
Item
Item | Current period amount | Previous period amount |
Advertising promotion expense | 1,566,903,873.47 | 1,492,333,124.96 |
Payroll | 502,836,431.55 | 505,358,495.38 |
Shipping and handling cost[Note] | 10,327,005.41 | 5,385,839.29 |
Labor expense | 156,239,051.28 | 94,353,482.05 |
Travel expense | 365,735,100.77 | 371,943,599.53 |
Business entertainment expense | 3,809,795.16 | 2,468,968.74 |
Other expense | 85,859,912.95 | 89,558,118.27 |
Total | 2,691,711,170.59 | 2,561,401,628.22 |
34. General and administrative expenses
Unit: CNY
Item | Current period amount | Previous period amount |
Payroll | 727,031,403.39 | 645,451,421.56 |
Travel expense | 60,829,942.03 | 51,131,089.76 |
Office allowance | 7,528,872.00 | 9,563,500.30 |
Wate, electric and steam expense | 64,916,608.02 | 64,140,517.86 |
Business entertainment expense | 18,999,148.74 | 17,889,974.15 |
Depreciation cost | 489,966,400.69 | 473,056,556.54 |
Rental expense | 2,562,113.84 | 9,114,114.28 |
Repair charge | 54,009,927.49 | 42,487,322.35 |
Amortization of intangible assets | 53,008,955.54 | 50,118,316.96 |
Vehicle use expense | 20,175,918.19 | 19,765,733.87 |
Shipping and handling cost | 41,141,371.90 | 43,220,136.60 |
Other expense | 316,321,065.17 | 278,326,418.38 |
Total | 1,856,491,727.00 | 1,704,265,102.61 |
35. Research & Development expenses
Unit: CNY
Item | Current period amount | Previous period amount |
Material expenses | 85,700,940.30 | 5,487,765.94 |
Payroll | 54,476,101.25 | 13,387,099.46 |
Other expense | 19,788,552.33 | 8,690,352.23 |
Total | 159,965,593.88 | 27,565,217.63 |
Other statements:
During this period, seven raw liquor production R&D projects were newly registered inSuqian Municipal Science and Technology Bureau, resulting in a substantial increase inthe amount of R&D expenses.
36. Financial expenses
Unit: CNY
Item | Current period amount | Previous period amount |
Interest expense | 2,618.00 | 3,273.00 |
Bill discount expense | 633,304.85 | |
Less: Interest income | 77,589,503.94 | 69,133,580.05 |
Plus: Losses from currency exchange (Less: income) | -3,270,386.19 | 652,223.14 |
Plus: Bank charges | 1,797,415.87 | 3,339,447.15 |
Total | -78,426,551.41 | -65,138,636.76 |
37. Other income
Unit: CNY
Sources of other income
Sources of other income | Current period | Previous period |
Government grants received | 83,307,366.37 | 59,870,221.67 |
Withholding personal tax commission | 1,670,388.78 | 3,482,761.39 |
Total | 84,977,755.15 | 63,352,983.06 |
38. Investment income
Unit: CNY
Item | Current period amount | Previous period amount |
Investment income from long-term equity investments under the equity method | -4,447,288.34 | 1,819,591.30 |
Investment income from disposing long-term equity investments | -43,877.59 | |
Investment income from financial assets held for trading during the holding period | 40,267,966.45 | |
Investment income from disposal of financial assets held for trading | 814,777,407.10 | |
Investment income from available-for-sale financial assets during the holding period | 35,123,288.49 | |
Investment income from disposal of available-for-sale financial assets | 56,995,537.28 | |
Other investment income | 824,354,377.42 | |
Total | 850,554,207.62 | 918,292,794.49 |
Other statements:
Other investment income is generated from the financial products purchased by theCompany.
39. Gains/losses of changes in fair value
Unit: CNY
Gains/losses of changes in fair value | Current period amount | Previous period amount |
Financial assets held for trading | 158,679,505.33 | |
Total | 158,679,505.33 |
40. Losses from credit impairment
Unit: CNY
Item | Current period amount | Previous period amount |
Bad debt losses of other receivables | -18,373,057.36 | |
Bad debt losses of accounts receivables | -583,288.90 | |
Total | -18,956,346.26 |
41. Losses from asset impairment
Whether the Company implemented the new revenue standards
□ Yes √ No
Unit: CNY
Item | Current period amount | Previous period amount |
Bad debt losses | -1,098,948.45 | |
Losses from provision for stock obsolescence | -2,248,496.85 | |
Total | -2,248,496.85 | -1,098,948.45 |
42. Gains from disposal of assets
Unit: CNY
Gains from disposal of assets | Current period amount | Previous period amount |
Gains from disposal of fixed assets
Gains from disposal of fixed assets | 19,983,101.67 | 24,568,477.22 |
43. Non-operating income
Unit: CNY
Item | Current period amount | Previous period amount | Amount included in non-recurring profit and loss in current period |
Government grants | 2,298,016.82 | 2,298,016.82 | |
Liquidated damages income | 11,254,294.46 | 15,698,217.08 | 11,254,294.46 |
Compensation payment | 7,819,571.36 | 10,840,761.81 | 7,819,571.36 |
Account payables that are unable to pay | 185,947.97 | 9,540,839.98 | 185,947.97 |
Others | 688,123.76 | 1,851,187.31 | 688,123.76 |
Total | 22,245,954.37 | 37,931,006.18 | 22,245,954.37 |
Government grants included in current profits and losses:
Unit: CNY
Item | Body | Reason | Type | Whether the grants affects current year profit and loss | Whether it is special grant | Current period amount | Previous period amount | Related to assets/related to earnings |
44. Non-operating expenses
Unit: CNY
Item | Current period amount | Previous period amount | Amount included in non-recurring profit and loss in current period |
Donation expenses | 5,546,180.00 | 8,890,000.00 | 5,546,180.00 |
Losses from retirement of fixed asset | 6,141,958.08 | 2,364,904.26 | 6,141,958.08 |
Integrated fund | 79,543.09 | 68,150.83 | |
Reparations | 1,442,510.50 | 227,180.00 | 1,442,510.50 |
Others | 114,100.03 | 846,799.20 | 114,100.03 |
Total | 13,324,291.70 | 12,397,034.29 | 13,244,748.61 |
45. Income tax expense
(1)Statement of income tax expense
Unit: CNY
Item | Current period amount | Previous period amount |
Current period income tax | 2,472,964,546.78 | 2,792,139,209.45 |
Deferred income tax | -88,251,204.98 | -68,283,315.11 |
Total | 2,384,713,341.80 | 2,723,855,894.34 |
(2)Adjustment for accounting profit and income tax expense
Unit: CNY
Item | Current period amount |
Total profit | 9,770,804,257.01 |
Income tax expenses determined by statutory/applicable tax rate | 2,442,701,064.25 |
Impact from subsidiaries’ different tax rates | -531,987.54 |
Adjust for impact from income tax expense in previous period | -10,190,064.58 |
Impact from non-taxable income | 4,164,697.62 |
Non-deductible costs, expenses and losses | 3,890,772.90 |
Deductible from deferred tax assets in previous period | -26,525,499.33 |
Temporary differences due to unrecognized deferred taxasset during current period
Temporary differences due to unrecognized deferred tax asset during current period | 793,275.42 |
Add the effect of the deduction | -29,588,916.94 |
Income tax expense | 2,384,713,341.80 |
46. Net other comprehensive income
Please refer to Note VII-28. for details during this period.
47. Consolidated cash flow items
(1)Cash received from other operation activities
Unit: CNY
Item | Current period amount | Previous period amount |
Risk deposit | 59,275,520.22 | 41,386,027.21 |
Dealer deposit | 2,602,491.66 | 1,078,922,221.42 |
Interest income | 77,589,503.94 | 69,133,580.05 |
Liquidated damages income | 11,254,294.46 | 15,698,217.08 |
Government grants | 76,848,383.19 | 51,034,055.00 |
Commission for withholding tax | 1,670,388.78 | 3,482,761.39 |
Others | 31,109,582.42 | 233,913,582.83 |
Total | 260,350,164.67 | 1,493,570,444.98 |
Statements for cash received from other operation activities:
(2)Cash paid for other operating activities
Unit: CNY
Item | Current period amount | Previous period amount |
Transportation fee | 51,468,377.31 | 73,756,101.88 |
Advertising promotion expense | 1,751,245,676.57 | 1,514,147,166.86 |
Rental expense | 10,604,573.95 | 11,809,301.97 |
Repair charge | 54,113,100.25 | 42,532,923.93 |
Travel expense | 450,385,225.31 | 393,625,149.65 |
Entertainment expense | 22,808,943.90 | 20,358,942.89 |
Insurance expense | 5,386,711.21 | 4,809,096.29 |
Labor expense | 183,149,910.74 | 135,194,429.87 |
Others | 435,334,271.31 | 990,691,742.63 |
Total | 2,964,496,790.55 | 3,186,924,855.97 |
Statements for cash paid for other operating activities:
(3)Cash received from other investing activities
Unit: CNY
Item | Current period amount | Previous period amount |
Statements for cash received from other investing activities:
(4)Cash paid for other investing activities
Unit: CNY
Item | Current period amount | Previous period amount |
Statements for cash paid from other investing activities:
(5)Cash received for other financing activities
Unit: CNY
Item | Current Period Amount | Previous period Amount |
Letter of credit deposit | 1,500,000.00 | |
Total | 1,500,000.00 |
Statements for cash received for other financing activities:
(6)Cash paid for other financing activities
Unit: CNY
Item
Item | Current period amount | Previous period amount |
A cash payment by minority shareholder | 750,000.00 | |
Total | 750,000.00 |
Statements for cash paid for other financing activities:
48. Supplementary information to consolidated statement of cash flow
(1)Supplementary information to consolidated statement of cash flow
Unit: CNY
Item | Current period amount | Previous period amount |
Reconciliation of net profit to cash flow from operating activities | -- | -- |
Net profit | 7,386,090,915.21 | 8,115,329,894.50 |
Add: Provision for asset impairment | 21,204,843.11 | 1,098,948.45 |
Depreciation of fixed asset, oil & gas assets and productive biological assets | 722,009,265.90 | 707,143,699.48 |
Amortization of intangible assets | 53,058,955.54 | 50,118,316.96 |
Amortization of long-term deferred expenses | 1,034,707.84 | 184,008.16 |
Losses from disposal of fixed assets, intangible assets and other long-term Assets | -19,983,101.67 | -24,568,477.22 |
Losses on retirement of fixed assets | 6,141,958.08 | 2,364,904.26 |
Losses from changes in fair value | -158,679,505.33 | |
Financial expense | -3,267,768.19 | 655,496.14 |
Losses on investments | -850,554,207.62 | -918,292,794.49 |
Decrease in deferred tax asset | -111,976,025.37 | -64,344,859.11 |
Increase in deferred tax liabilities | 23,677,944.98 | -3,938,515.05 |
Decrease in inventory | -537,439,892.94 | -1,027,648,654.29 |
Decrease in operation receivables | -612,187,011.25 | 49,163,073.33 |
Increase in operation payables | 878,760,793.12 | 2,169,483,775.16 |
Net cash flow from operating activities | 6,797,891,871.41 | 9,056,748,816.28 |
Significant investing and financing activities not Involving cash flow: | -- | -- |
Net change in cash & cash equivalents | -- | -- |
Closing balance of cash | 4,300,144,848.67 | 3,615,348,307.97 |
Less:opening balance of cash equivalents | 3,615,348,307.97 | 1,749,952,876.18 |
Net change in cash and cash equivalents | 684,796,540.70 | 1,865,395,431.79 |
(2)Composition of cash and cash equivalents
Unit: CNY
Item | Closing balance | Opening balance |
Cash | 4,300,144,848.67 | 3,615,348,307.97 |
Including:cash on hand | 4,067.27 | 24,103.07 |
Unrestricted bank deposit | 4,282,803,604.61 | 3,602,515,767.58 |
Other unrestricted cash & cash equivalents | 17,337,176.79 | 12,808,437.32 |
Closing balance of cash and cash Equivalents | 4,300,144,848.67 | 3,615,348,307.97 |
49. Foreign currency transactions
(1)Foreign currency balance
Unit: CNY
Item
Item | Closing balance in foreign currency | Exchange rate | Closing balance in CNY |
Cash and cash equivalents | -- | -- | 63,771,419.21 |
Including:USD | 5,851,102.50 | 6.9762 | 40,818,461.26 |
EUR | |||
HKD | 2,267,649.63 | 0.89578 | 2,031,315.19 |
CLP | 2,259,388,389.00 | 0.0092599 | 20,921,642.76 |
Receivables | -- | -- | |
Including:USD | |||
EUR | |||
HKD | |||
Other receivables | 423,149.83 | ||
Including:HKD | 472,381.42 | 0.89578 | 423,149.83 |
Other payables | 1,312,830.59 | ||
Including:HKD | 1,465,427.84 | 0.89578 | 1,312,700.95 |
CLP | 14,000.00 | 0.0092599 | 129.64 |
Long-term loans | -- | -- | |
Including:USD | |||
EUR | |||
HKD | |||
(2) Description of the overseas business entity, including the important foreignbusiness entity, which shall disclose its main foreign business place, bookkeepingstandard currency and selection basis, and shall also disclose the reason for thechange of the bookkeeping standard currency.
√ Applicable ? N/A
Foreign business entities | Operation site | Functional currency | Choosing reason |
JSSJ Industry (HK) Holdings Co., Limited | Hong Kong, China | HKD | Currency in the main economic environment of business operations |
ZYG E-Commerce HK Limited | Hong Kong, China | HKD | Currency in the main economic environment of business operations |
ZYG LTD | Cayman Islands | USD | Currency in the main economic environment of business operations |
YangHe International Investment Ltd | British Virgin Islands | USD | Currency in the main economic environment of business operations |
ZYG Technology Investment Ltd | British Virgin Islands | USD | Currency in the main economic environment of business operations |
Yanghe Chile SPA | Santiago, Chile | CLP | Currency in the main economic environment of business operations |
Yanghe Hong Kong Distillery Co., Ltd. | Hong Kong, China | HKD | Currency in the main economic environment of business operations |
50. Government grants
(1)Details of government grants
Unit: CNY
Item | Amount | Presentation | Amount included in profit or loss |
Awards and subsidies for the second batch ofprojects of Suqian guide fund for industrialdevelopment (industrial development) in 2018
Awards and subsidies for the second batch of projects of Suqian guide fund for industrial development (industrial development) in 2018 | 1,500,000.00 | Other income | 1,500,000.00 |
The urgent needed talents for development of north Jiangsu special fund | 1,687,500.00 | Other income | 1,687,500.00 |
Suqian Yanghe new district economic development bureau cash reward funds | 5,543,000.00 | Other income | 5,543,000.00 |
Tap water sewage treatment return | 1,558,900.00 | Other income | 1,558,900.00 |
Pollution discharge subsidies | 3,000,000.00 | Other income | 3,000,000.00 |
2017 Suqian green demonstration enterprise bonus | 300,000.00 | Other income | 300,000.00 |
2018 provincial financial incentive fund for enterprise R&D expenses | 300,000.00 | Other income | 300,000.00 |
Steady position subsidies | 1,565,984.27 | Other income | 1,565,984.27 |
Government tax incentives | 5,290,000.00 | Other income | 5,290,000.00 |
Industrial support fund of Ningxiang economic and technological development zone | 6,710,080.00 | Other income | 6,710,080.00 |
Nanjing Hexi financial cluster development special support funds | 11,714,859.86 | Other income | 11,714,859.86 |
2018 Special fund for industrial and information technology development of Guizhou province (the second batch of energy conservation projects) | 600,000.00 | Other income | 600,000.00 |
Special fund of Encouraging and promoting Sihong county tourism development | 1,000,000.00 | Other income | 1,000,000.00 |
2018 Suqian municipal bureau of industry and information technology municipal guide fund for industrial development (green demonstration enterprise) | 300,000.00 | Other income | 300,000.00 |
Office space rental subsidy | 500,000.00 | Other income | 500,000.00 |
2019 financial incentive fund for enterprise R&D investment | 500,000.00 | Other income | 500,000.00 |
Guiding funds for local industrial development | 30,914,915.24 | Other income | 30,914,915.24 |
Shanggou recruit veterans VAT relief | 1,984,000.00 | Non-operating income | 1,984,000.00 |
Others | 1,879,143.82 | Other income / Non-operating income | 1,879,143.82 |
Transfer of current deferred earnings | 8,757,000.00 | Other income | 8,757,000.00 |
Total | 85,605,383.19 | 85,605,383.19 |
VIII. Changes in consolidated scope
1. Others
Explain the change of merger scope caused by other reasons (such as new subsidiary,liquidation subsidiary, etc.) and the relevant situation:
A. Establishment of subsidiariesIn September 2018, the Company registered and established Yanghe Hong KongDistillery Co., Ltd. in Hong Kong, which was invested in October 2019 and included in theconsolidated financial statements from October 2019.
B. Cancellation of subsidiaries
(1)Jiangsu Guanmeng Information Technology Co., Ltd., the holding subsidiary, wasliquidated and cancelled, and on 12 February 2019, it obtained the Notice of approval forcancellation registration of the company from Suzhou Xiangcheng District MarketSupervision Administration. As of March 2019, it is no longer included in the consolidatedscope of the consolidated financial statements.
(2) Jiangsu Oubaosi International Trade Co., Ltd., the holding subsidiary, was liquidatedand cancelled. On 3 January 2019, it obtained the Notice of approval for cancellationregistration of the company from Nanjing Jiangbei New District Management CommitteeMarket Supervision Administration. As of February 2019, it is no longer included in theconsolidated scope of the consolidated financial statements.
(3) Jiangsu Yanghe Packaging Co., Ltd., the holding subsidiary, was liquidated andcancelled, and on 2 February 2019, it obtained the Notice of approval for cancellationregistration of the company from Suqian Municipal Administration for Industry andCommerce. As of March 2019, it is no longer included in the consolidated scope of theconsolidated financial statements.
(4) Dream Blue Haichuanhui (Shiyan) Trade and Investment Co., Ltd., the holdingsubsidiary, was liquidated and cancelled, and on 21 September 2019, it obtained theNotice of approval for cancellation registration of the company from Shiyan MunicipalAdministration Approval Bureau. As of October 2019, it is no longer included in theconsolidated scope of the consolidated financial statements.
(5) Xuzhou Huaqu Wine Development Co., Ltd., the holding subsidiary, was liquidatedand cancelled, and on 24 October 2019, it obtained the Notice of approval forcancellation registration of the company from Xuzhou Market Supervision Administration.As of November 2019, it is no longer included in the consolidated scope of theconsolidated financial statements.
IX. Interests in other entities
1. Interests in subsidiaries
(1) Group composition:
Name ofsubsidiaries
Name of subsidiaries | Major business location | Place of registration | Nature of business | Shareholding | Acquisition method | |
Direct | Indirect | |||||
Jiangsu Yanghe Package Co., Ltd. | Suqian, Jiangsu province | Suqian, Jiangsu province | Liquor package | 100.00% | Establishment | |
Nanjing Yanghe Blue Classic Co.,Ltd. | Nanjing, Jiangsu province | Nanjing, Jiangsu province | Commerce | 100.00% | Establishment | |
Beijing Yanghe Commerce and Trade Co.,Ltd. | Fengtai,Beijing | Fengtai,Beijing | Commerce | 100.00% | Establishment | |
Jiangsu Huaqu Wine Group Co.,Ltd. | Nanjing, Jiangsu province | Nanjing, Jiangsu province | Commerce | 97.00% | Establishment | |
Suqian Tianhai Commerce and Trade Co.,Ltd. | Suqian, Jiangsu province | Suqian, Jiangsu province | Commerce | 100.00% | Establishment |
Huaian HuaquWine DevelopmentCo.,Ltd.
Huaian Huaqu Wine Development Co.,Ltd. | Huaian, Jiangsu province | Huaian, Jiangsu province | Commerce | 100.00% | Establishment | |
Suqian Yanghe Guibinguan Co.,Ltd. | Suqian, Jiangsu province | Suqian, Jiangsu province | Hotel industry | 100.00% | Establishment | |
Jiangsu Huaqu Wine Group Nanjing Co.,Ltd. | Nanjing, Jiangsu province | Nanjing, Jiangsu province | Commerce | 100.00% | Establishment | |
Su Wine Group Trade Co.,Ltd. | Suqian, Jiangsu province | Suqian, Jiangsu province | Commerce | 83.63% | 16.37% | Establishment |
Wuxi Huaqu Wine Development Co.,Ltd. | Wuxi, Jiangsu province | Wuxi, Jiangsu province | Commerce | 100.00% | Establishment | |
Taizhou Huaqu Wine Development Co.,Ltd. | Taizhou, Jiangsu province | Taizhou, Jiangsu province | Commerce | 100.00% | Establishment | |
Jiangsu Huaqu Wine Group Nantong Co.,Ltd. | Nantong, Jiangsu province | Nantong, Jiangsu province | Commerce | 100.00% | Establishment | |
Jiangsu Huaqu Wine Group Suzhou Co.,Ltd. | Suzhou, Jiangsu province | Suzhou, Jiangsu province | Commerce | 100.00% | Establishment | |
Jiangsu Huaqu Wine Group Yancheng Co.,Ltd. | Yancheng, Jiangsu province | Yancheng, Jiangsu province | Commerce | 100.00% | Establishment | |
Jiangsu Yanghe Liquor Operation Mangement Co.,Ltd. | Suqian, Jiangsu province | Suqian, Jiangsu province | Commerce | 100.00% | Establishment | |
Jiangsu Shuanggou Liquor OperationCo.,Ltd. | Sihong, Jiangsu province | Sihong, Jiangsu province | Commerce | 100.00% | Establishment | |
Jiangsu Dongdi Union International Trade Co.,Ltd. | Suqian, Jiangsu province | Suqian, Jiangsu province | Commerce | 100.00% | Establishment | |
Jiangsu Dongdixinghui International Trade Co.,Ltd. | Suqian, Jiangsu province | Suqian, Jiangsu province | Commerce | 100.00% | Establishment | |
Suqian Blue Dream Trade Co.,Ltd. | Suqian, Jiangsu province | Suqian, Jiangsu province | Commerce | 100.00% | Establishment | |
Siyang Lantu Liquor Operation Co.,Ltd. | Siyang, Jiangsu province | Siyang, Jiangsu province | Commerce | 100.00% | Establishment | |
JSSJ Industry (HK) Holdings Co., Limited | Hong Kong, China | Hong Kong, China | CORP | 100.00% | Establishment | |
Hubei Lihuacun Trade Co.,Ltd. | Shiyan, Hubei province | Yunxian, Hubei province | Commerce | 100.00% | Establishment | |
Jiangsu Shuanggou Distillery Stock Co., Ltd. | Sihong, Jiangsu province | Sihong, Jiangsu province | Liquor manufacture and sales | 99.99% | 0.01% | Business combinations involving enterprises not under common control |
Sihong Shuanggou Antai Waste Recycling Co.,Ltd. | Sihong, Jiangsu province | Sihong, Jiangsu province | Waste material recycle | 100.00% | Business combinations involving enterprises not under common control | |
Hubei Lihuacun Liquor Industry Co.,Ltd. | Shiyan, Hubei province | Yunxian, Hubei province | Process liquor, wine and fruit wine | 100.00% | Business combinations involving enterprises not |
under commoncontrol
under common control | ||||||
Ningxiang Miluochun Liquor Industry Co.,Ltd. | Ningxiang, Hunan province | Ningxiang, Hunan province | Manufacture and sale of liquor and compound wine | 100.00% | Business combinations involving enterprises not under common control | |
Harbin Binzhou Brewery Co.,Ltd. | Binxian, Heilongjiang province | Binxian, Heilongjiang province | Liquor-making | 100.00% | Business combinations involving enterprises not under common control | |
Su Wine Group Jiangsu Wealth Management Co.,Ltd. | Nanjing, Jiangsu province | Nanjing, Jiangsu province | Assets/investment management, information consultation | 100.00% | Establishment | |
Ningxiang Miluochun Trade Co.,Ltd. | Ningxiang, Hunan province | Ningxiang, Hunan province | Commerce | 100.00% | Establishment | |
Jinagsu Kelite Biology Technology Research Institute Co.,Ltd. | Suqian, Jiangsu province | Suqian, Jiangsu province | Biological engineering research, enzyme preparation research and technology transfer | 100.00% | Establishment | |
Xuzhou Huaqu Wine Development Co.,Ltd. | Xuzhou, Jiangsu province | Xuzhou, Jiangsu province | Commerce | 100.00% | Establishment | |
Suqian Sky Blue Trade Co.,Ltd. | Suqian, Jiangsu province | Suqian, Jiangsu province | Commerce | 100.00% | Establishment | |
Shiyan Yunyang Lihuacun Package Service Co.,Ltd. | Shiyan, Hubei province | Shiyan, Hubei province | Liquor, compound wine, health wine packaging service | 100.00% | Establishment | |
Jiangsu Lion and Sheep Network Technology Co.,Ltd. | Nanjing, Jiangsu province | Nanjing, Jiangsu province | Network technology development, technical consultation, technical services; Software development | 100.00% | Establishment | |
Jiangsu Zhaiyougou E-commerce Co.,Ltd | Nanjing, Jiangsu province | Nanjing, Jiangsu province | Commerce | 100.00% | Business combinations involving enterprises not under common control | |
Nanjing Tongmeng City Logistics Co.,Ltd. | Nanjing, Jiangsu province | Nanjing, Jiangsu province | Freight Transport, Warehouse service | 99.99% | Business combinations involving enterprises not under common control | |
Nanjing Jinling Tongmeng City Logistics Co.,Ltd. | Nanjing, Jiangsu province | Nanjing, Jiangsu province | Freight Transport, Warehouse service | 51.00% | Business combinations involving enterprises not under common control | |
Nanjing Oubaosi International Trade | Nanjing, Jiangsu | Nanjing, Jiangsu province | Import and export business | 100.00% | Business combinations |
Co.,Ltd.
Co.,Ltd. | province | of self-run goods, agency goods and technology | involving enterprises not under common control | |||
Huaian Tongmeng City Logistics Co.,Ltd. | Huaian, Jiangsu province | Huaian, Jiangsu province | Freight Transport, Warehouse service | 51.00% | Business combinations involving enterprises not under common control | |
Changzhou Jiezzhong Tongmeng City Logistics Co.,Ltd. | Changzhou, Jiangsu province | Changzhou, Jiangsu province | Freight Transport, Warehouse service | 51.00% | Business combinations involving enterprises not under common control | |
Nantong Tongmeng City Logistics Co.,Ltd. | Nantong, Jiangsu province | Nantong, Jiangsu province | Freight Transport, Warehouse service | 51.00% | Business combinations involving enterprises not under common control | |
Suzhou Tongmeng City Logistics Co.,Ltd. | Suzhou, Jiangsu province | Suzhou, Jiangsu province | Freight Transport, Warehouse service | 51.00% | Business combinations involving enterprises not under common control | |
Taizhou Tongmeng City Logistics Co.,Ltd. | Taizhou, Jiangsu province | Taizhou, Jiangsu province | Freight Transport, Warehouse service | 51.00% | Business combinations involving enterprises not under common control | |
Wuxi Tongmeng City Logistics Co.,Ltd. | Wuxi, Jiangsu province | Wuxi, Jiangsu province | Freight Transport, Warehouse service | 51.00% | Business combinations involving enterprises not under common control | |
Yancheng Tongmeng City Logistics Co.,Ltd. | Yancheng, Jiangsu province | Yancheng, Jiangsu province | Freight Transport, Warehouse service | 51.00% | Business combinations involving enterprises not under common control | |
Zhenjiang Tongmeng City Logistics Co.,Ltd. | Zhenjiang, Jiangsu province | Zhenjiang, Jiangsu province | Freight Transport, Warehouse service | 51.00% | Business combinations involving enterprises not under common control | |
Yangzhou Tongmeng City Logistics Co.,Ltd. | Yangzhou, Jiangsu province | Yangzhou, Jiangsu province | Freight Transport, Warehouse service | 53.00% | Business combinations involving enterprises not under common control | |
Suqian Tongmeng City Logistics Co.,Ltd. | Suqian, Jiangsu province | Suqian, Jiangsu province | Freight Transport, Warehouse service | 51.00% | Business combinations involving enterprises not under common control | |
Pizhou Tongmeng City Logistics Co.,Ltd. | Xuzhou, Jiangsu province | Xuzhou, Jiangsu province | Freight Transport, Warehouse service | 51.00% | Business combinations involving enterprises not under common |
control
control | ||||||
Lianyungang Huaxing Tongmeng City Logistics Co.,Ltd. | Lianyungang, Jiangsu province | Lianyungang, Jiangsu province | Freight Transport, Warehouse service | 51.00% | Business combinations involving enterprises not under common control | |
Jiangsu Zhaibianli E-commerce Co.,Ltd | Nanjing, Jiangsu province | Nanjing, Jiangsu province | Commerce | 100.00% | Business combinations involving enterprises not under common control | |
Hongkong Zhaiyougou International Trade Co.,Ltd | Hong Kong,China | Hong Kong,China | Commerce | 100.00% | Business combinations involving enterprises not under common control | |
Guizhou Guijiu Co.,Ltd. | Guiyang, Guizhou province | Guiyang, Guizhou province | Liquor production; Liquor and alcohol sales | 100.00% | Business combinations involving enterprises not under common control | |
Guizhou Guijiu Liquor Operation Management Co.,Ltd. | Guiyang, Guizhou province | Guiyang, Guizhou province | Commerce | 100.00% | Establishment | |
Guizhou Guijiu Trade Co.,Ltd. | Guiyang, Guizhou province | Guiyang, Guizhou province | Commerce | 100.00% | Establishment | |
Guizhou Guijiu Package Co.,Ltd. | Guiyang, Guizhou province | Guiyang, Guizhou province | Guijiu series liquor, compound wine, health care wine packaging | 100.00% | Establishment | |
Jinagsu Guanmeng Information Technology Co.,Ltd. | Suzhou, Jiangsu province | Suzhou, Jiangsu province | Information technology development | 100.00% | Establishment | |
ZYG E-Commerce HK Limited | Hong Kong,China | Hong Kong,China | Industrial investment | 100.00% | Business combinations involving enterprises not under common control | |
ZYG LTD | Cayman Islands | Cayman Islands | Industrial investment | 69.08% | Business combinations involving enterprises not under common control | |
YangHe International Investment Ltd | British Virgin Islands | British Virgin Islands | Industrial investment | 100.00% | Establishment | |
Jiangsu Shuanggou Healthy Liquor Research institute Co.,Ltd. | Suqian, Jiangsu province | Suqian, Jiangsu province | Healthy wine, nutrition and health food research and development | 100.00% | Establishment | |
ZYG Technology Investment Ltd | British Virgin Islands | British Virgin Islands | Industrial investment | 71.03% | Business combinations involving enterprises not under common control | |
Jiangsu Blue Dream E- | Suqian, Jiangsu | Suqian, Jiangsu province | Commerce | 100.00% | Establishment |
commerce Co.,Ltd.
commerce Co.,Ltd. | province | |||||
Jiangsu Yanghe Weiketang Network Technology Co.,Ltd. | Nanjing, Jiangsu province | Nanjing, Jiangsu province | Network technology development, technical consultation, technical servic | 100.00% | Establishment | |
Guizhou Welcome Drink Stock Co., Ltd. | Renhuai, Guizhou province | Renhuai, Guizhou province | Liquor manufacture and sales | 100.00% | Business combinations involving enterprises not under common control | |
Dream Blue Chuanhaihui (Shiyan) Trade Investment Co.,Ltd. | Shiyan, Hubei province | Shiyan, Hubei province | Industrial investment, Online business consultation | 100.00% | Business combinations involving enterprises not under common control | |
Suqian Su Wine Logistics Co.,Ltd. | Suqian, Jiangsu province | Suqian, Jiangsu province | Road general cargo transport, cargo distribution, freight forwarder | 100.00% | Establishment | |
Yanghe Chile SPA | Santiago, Chile | Santiago, Chile | Movable and real estate investment services, building construction services | 100.00% | Establishment | |
Jiangsu Yanghe Investment Management Co.,Ltd. | Suqian, Jiangsu province | Suqian, Jiangsu province | Foreign investment, Asset management, Investment consulting | 50.00% | 50.00% | Establishment |
Su Wine Group Nanjing Operation Management Co.,Ltd. | Nanjing, Jiangsu province | Nanjing, Jiangsu province | Enterprise management consulting; Industrial investment; Food sales; Gift sales; House lease; Hotel management | 100.00% | Establishment | |
Jiangsu Zhongshiji liquor Co.,Ltd. | Nanjing, Jiangsu province | Nanjing, Jiangsu province | Food sales, Gift sales | 100.00% | Establishment | |
Yanghe Hong Kong Distillery Co., Ltd. | Hong Kong,China | Hong Kong,China | Industrial investment | 100.00% | Establishment |
The shareholding ratio in the subsidiary is different from the voting ratio:
The basis for holding half or less of the voting rights but still controlling the invested entity,and for holding more than half of the voting rights but not controlling the invested entity:
For important structural subjects included in the scope of merging, the basis of control:
Basis for determining whether the company is an agent or a principal:
Other statements:
2. Interests in associates and a joint venture
(1) The impact of the Group’s associates on the Group is not significant.Summarized information is as follows:
Unit: CNY
Closing balance/amount in current period | Opening balance/amount in previous period |
Associates:
Associates: | -- | -- |
Aggregated carrying amount of investments | 10,521,622.18 | |
Aggregate of the following items calculated in proportion to shareholding | -- | -- |
--Net profit | -6,220,574.92 | |
-- Other comprehensive income | 178,619.29 | |
-- Total comprehensive income | -6,041,955.63 | |
Joint ventures: | -- | -- |
Aggregated carrying amount of investments | 14,840,029.20 | 9,423,328.82 |
Aggregate of the following items calculated in proportion to shareholding | -- | -- |
--Net profit | 1,773,286.58 | 1,819,591.30 |
-- Total comprehensive income | 1,773,286.58 | 1,819,591.30 |
X. Risks related to financial instrumentsThe Group is exposed to various financial risks in the ordinary course of business, mainlyincluding: credit risk, liquidity risk, market risk, etc. The Company's management is fullyresponsible for the formulation of risk management objectives and policies, and takesresponsibility for risk management objectives and policies. The objective of theCompany’s risk management is to identify and analysis risk, minimizing the adverseimpact of financial risks without excessive influence on the company's competitivenessand resilience.
1. Credit risks
Credit risk refers to the risk that one party of the financial instruments fails to perform itsobligations and causes the financial losses of the other party. Credit risk mainly related tonotes receivables and accounts receivable, in order to control the risk, the Companytakes the following measures:
(1)Bank deposit
The company's bank deposits are mainly deposited in state-owned holding Banks, largeand medium-sized listed Banks and other commercial banks with high credit. There is nosignificant credit risk and no significant loss caused by default.
(2)Notes receivables and accounts receivables
The Company mainly trades with dealers, according to company credit policy,and adoptsthe way of delivery after the payments finished. For some group purchase business, itonly deals with the reputable group clients, and continuously monitors the balance ofnotes receivables and accounts receivables, as a result, there is no collateral required,and credit risk management concentrates on the clients. The balance of notesreceivables and accounts receivables are small till 31 December 2019. The Companydoes not hold any collateral or other credit enhancement for the balance of accountsreceivables.
(3) Other receivable
The other receivables are mainly saving deposits involving infringement dispute, depositsand petty cash, employee business loan and so on. The Company manages otherreceivables and continuously monitors its balance, to ensure the Company not to facesignificant bad debt risks.
2. Liquidity risk
Liquidity risk refers to the risk of capital shortage when enterprise performs its obligationsrelated to financial liabilities. The Company uses various financing methods such as billclearing and bank loan to optimize the financing structure and maintain the balancebetween financing continuity and flexibility.
The maturity of the financial liabilities held by the Company according to theundiscounted remaining contractual obligations is analyzed as follows:
Item
Item | Closing balance | ||||
Within 1 year | 1-2 years | 2-3 years | Over 3 years | Total | |
Account payables | 1,330,649,116.82 | 1,330,649,116.82 |
Other payables | 6,521,146,762.07 | 6,521,146,762.07 | |||
Long-term loan | 72,723.00 | 72,723.00 |
Long-term payables | 197,623,728.85 | 197,623,728.85 |
(Continued)
Item | Opening balance | ||||
Within 1 year | 1-2 years | 2-3 years | Over 3 years | Total |
Account payables | 1,261,282,397.89 | 1,261,282,397.89 | |||
Other payables | 6,457,301,511.01 | 6,457,301,511.01 | |||
Long-term loan | 109,088.00 | 109,088.00 |
Long-term payables | 198,404,248.85 | 198,404,248.85 |
3. Market risk
Market risk is the fair value of financial instrument or future cash flow fluctuates due tothe fluctuation of market price, and it mainly includes: interest rate risk, foreign exchangerisk, etc.
(1) Interest rate risk
Interest rate risk refers to the fair value of financial instrument or future cash flowfluctuates due to the fluctuation of interest rate. The Company faces the risk of marketinterest rate change mainly related to the Company's borrowing limit.
(2) Foreign exchange risk
Foreign exchange risk arises from fluctuation in exchange rate, relevant to the assetsand liabilities in foreign currency. The less import and export business happened, thelower impact of exchange rate fluctuation on company's operation.
The amount in CNY of the Company’s assets and liabilities shown in foreign currenciesas follows:
Item | Closing balance | Opening balance | ||||
Balance in foreign currency | Exchange rate | Balance in CNY | Balance in foreign currency | Exchange rate | Balance in CNY |
Cash and |
cashequivalents
cash equivalents | ||||||
Include: USD | 5,851,102.50 | 6.9762 | 40,818,461.26 | 5,234,261.55 | 6.8632 | 35,923,783.86 |
HKD | 2,267,649.63 | 0.89578 | 2,031,315.19 | 1,153,729.70 | 0.8762 | 1,010,897.96 |
CLP | 2,259,388,389.00 | 0.0092599 | 20,921,642.76 | 1,356,097,790.00 | 0.0098436 | 13,348,876.41 |
Other receivables | ||||||
Include: USD |
HKD | 472,381.42 | 0.89578 | 423,149.83 | 273,999.76 | 0.8762 | 240,078.59 |
Account payables |
Include: USD | 494,265.45 | 6.8632 | 3,392,242.64 | |||
CLP | 6,139,589.00 | 0.009844 | 60,435.62 |
Other payables | ||||||
Include: HKD | 1,465,427.84 | 0.89578 | 1,312,700.95 | 3,430,385.91 | 0.8762 | 3,005,704.13 |
CLP | 14,000.00 | 0.0092599 | 129.64 | 168,352.00 | 0.009844 | 1,657.19 |
Net amount | 62,881,738.45 | 44,063,597.24 |
The amount of foreign currency financial assets and financial liabilities of the company issmall. Exchange rate fluctuations have little impact on the Company's operatingperformance.
XI.Fair value disclosure
1.Fair value of assets and liabilities measured at fair value asat the end of the period
Unit: CNY
Item | Closing fair value | |||
Within Level 1 of the fair value hierarchy | Within Level 2 of the fair value hierarchy | Within Level 3 of the fair value hierarchy | Total | |
Disclosure of continuous measurement at fair value | -- | -- | -- | -- |
(1)Debt instrument investment | 19,671,745,366.98 | 19,671,745,366.98 | ||
(2)Equity instrument investment | 331,714,847.11 | 3,024,158,666.52 | 3,355,873,513.63 | |
Disclosure of discontinuous measurement at fair value | -- | -- | -- | -- |
2.Determination basis of the market value of items measuredcontinuously and discontinuously within Level 1 of the fair valuehierarchy
Item | Fair value | Active market quote |
Transaction price
Transaction price | Sources | ||
Continuous measurement at fair value | |||
(1) Financial assets held for trading |
Equity instrument investment | 331,714,847.11 | 331,714,847.11 | Local open market closing price |
Total amount of assets measured at fair value continuously | 331,714,847.11 | 331,714,847.11 |
3.Items measured continuously and discontinuously within Level 3 ofthe fair value hierarchy, valuation technique adopted and quantitativeand qualitative information of important parameters
Item | Fair value | Valuation technique |
Continuous measurement at fair value | ||
Financial assets held for trading | ||
Debt instrument investment | 19,671,745,366.98 | The expected rate of return as an important reference to evaluate its fair value |
Equity instrument investment | 3,024,158,666.52 | The investment cost or the net assets of the invested entity at the end of the period are used as an important reference to evaluate its fair value |
Total amount of assets measured at fair value continuously | 22,695,904,033.50 |
XII. Related parties and related party transactions
1. The parent company of the Company
Name of parent company | Registration place | Business nature | Registered capital | Shareholding ratio by the parent company | Voting Ratio by the parent company |
Jiangsu Yanghe Group Co.,Ltd. | Suqian, Jiangsu | Sales of brewing machinery equipment, export of liquor, import of various raw and auxiliary materials, equipment and accessories required for production, industrial investment. | CNY 110.00 million | 34.16% | 34.16% |
Information about the Company’s parent companyThe final control party of the Company is State-owned Assets Supervision andAdministration Commission of Suqian.Other statements:
2. Subsidiaries of the Company:
The information about the subsidiaries of the Company refers to Note IX.1 Interests inSubsidiaries.
3. Joint venture and associate of the Company
The information about the joint venture and associate of the Company refers to the Notes.Other joint ventures and associates whose related party transactions with the Companyin the current period or balance formed from related party transactions with the Companyin the prior period as follows:
Name of joint venture and associate
Name of joint venture and associate | Relationship with the Company |
Diageo International Spirits Company Limited | Joint Venture |
Jiangsu Su Wine Cultural Transmission Co.,Ltd. | Associate |
Nanjing Hesong Culture Technology Co.,Ltd. | Associate |
Jiangsu Xinghe Investment Management Co.,Ltd. | Associate |
Other statements:
4. Other related party
Name of other related party | Relationship with the Company |
Shanghai Haiyan Logistics Development Co.,Ltd. | Holding 9.67% shares |
Suning Consumption Finance Co.,Ltd. | Joint stock company, holding 5% shares |
VSPT, Vi?a San Pedro Tarapacá S.A. | Joint stock company, holding 12.50% shares |
Jiangsu Diageo Wine Co. LTD | Controlled by Diageo International Spirits Company Limited, joint venture of Company |
5. Related party transactions
(1) Related transactions of purchase of goods / supply and receipt of laborservicesTable of purchase of goods / Receipt of labor services
Unit: CNY
Related Party | Transaction Content | Amount in current period | Approved transaction amount | Whether it is over transaction amount or not | Amount in previous period |
VSPT, Vi?a San Pedro Tarapacá S.A | Red wine | 22,491,676.84 | No | 23,075,164.23 | |
Nanjing Hesong Culture Technology Co.,Ltd. | Advertising and general publicity expense | 26,877,500.00 | No | 21,460,376.65 | |
Jiangsu Diageo Wine Co. LTD | Liquor | 9,426,504.96 | No |
Table of sales of goods/ rendering of labor services
Unit: CNY
Related party | Transaction content | Amount in current period | Amount in previous period |
Shanghai Haiyan Logistics Development Co.,Ltd. | Sales of liquor | 21,940,314.79 | 24,698,678.39 |
Jiangsu Su Wine Cultural Transmission Co.,Ltd. | Sales of liquor | 27,033,928.43 | 34,464,141.85 |
Jiangsu Diageo Wine Co. Ltd | Sales of liquor | 11,451,243.61 | |
Nanjing Hesong Culture Technology Co.,Ltd. | Consulting fee income | 165,048.55 |
Description of related transactions in the purchase and sale of goods, provision andreceipt of services
(2) Other related party transactions
Jiangsu Yanghe Investment Management Co., Ltd., a holding subsidiary, recovered CNY30,000.00 of time deposit from Suning Consumer Finance Co., Ltd., and charged CNY9,497,222.22 of deposit interest.
6. Receivables and payables of related parties
(1) Receivables
Unit: CNY
Item
Item | Related party | Closing balance | Opening balance | ||
Book balance | Provision for bad debt | Book balance | Provision for bad debt | ||
Receivables | Jiangsu Diageo Wine Co. Ltd | 8,231,298.10 | 246,938.94 |
(2)Payables
Unit: CNY
Item | Related party | Closing balance | Opening balance |
Advance from customer | Shanghai Haiyan Logistics Development Co.,Ltd. | 3,455,154.28 | 8,427,121.32 |
Advance from customer | Jiangsu Su Wine Cultural Transmission Co.,Ltd. | 7,998,800.00 | 4,541,664.83 |
Other Payables | Shanghai Haiyan Logistics Development Co.,Ltd. | 83,709.60 | 801,624.00 |
Other Payables | Jiangsu Su Wine Cultural Transmission Co.,Ltd. | 900,000.00 | 933,060.00 |
XIII. Commitments and contingencies
1. Significant commitments
Significant commitments existing on the balance sheet dateBy the end of 31 December 2019, there were no significant commitments needed to bedisclosed.
2. Contingencies
(1)Significant contingencies at the balance sheet date:
Regarding the tort liability dispute case of ICBC Zhengzhou Jiefang Road Branch, SuWine Group Trade Co., Ltd. applied for a claim, requesting the defendant to jointly andseverally compensate the plaintiff with CNY 46,025,000.00 of principal and interest lossduring the deposit period (The interest loss is based on CNY 103,250,000.00 and it iscalculated from 21 May 2014 according to the loan interest rate of the People's Bank ofChina in the same period and the same file. Among those, CNY 18,257,000.00 iscalculated till 8 September 2017, CNY 38,968,000.00 is calculated till 13 December 2017,and CNY 46,025,000.00 is calculated till the actual date of payment).
According to the Civil Judgment of Suqian Intermediate People's Court of JiangsuProvince, the defendant was liable for compensation of 70% of the total loss, and thedefendant was ordered to pay the plaintiff Su Wine Group Trade Co., Ltd. loss of interest(the calculation method of interest: the interest rate standard is calculated according tothe one-year fixed deposit interest rate on the day of 21 May 2013 of the Industrial andCommercial Bank of China Zhengzhou Jiefang Road Branch, where CNY 90 million isthe principal from 21 May 2013 to 7 September 2017; CNY 71.7433 million is calculatedfrom 8 September 2017 to 12 December 2017; CNY 32.7775 million is calculated from 13December 2017 to the date of actual payment. The sum of the interest calculated aboveis multiplied by 70%.)
Su Wine Group Trade Co., Ltd. dissatisfied with the above judgment and has appealed tothe Jiangsu Provincial Higher People's Court. On 25 July 2019, Jiangsu Provincial HigherPeople's Court (2019) Su Min Zhong No. 1157 "Notice of Acceptance of the Case" wasreceived. The case is in the process..
Except for the above event, by the end of 31 December 2019, the Company had no othersignificant contingencies required to be disclosed.
(2)If no contingencies that need to be disclosed, statement should be made.The Company has no material contingencies to disclose.
XIV. Post balance sheet event
1.The distribution of profits
Unit: CNY
Profits or dividends planed to be distributed
Profits or dividends planed to be distributed | 4,502,987,691.00 |
XV. Notes to main items of parent company financial statements
1. Accounts receivable
(1) Disclosure of accounts receivable by categories
Unit: CNY
Type
Type | Closing balance | Opening balance | ||||||||
Book balance | Provision for bad debt | Book value | Book balance | Provision for bad debt | Book value | |||||
Amount | Proportion | Amount | Proportion of provision | Amount | Proportion | Amount | Proportion of provision | |||
Including: | ||||||||||
Provision for bad debts by portfolio | 900,499,168.05 | 100.00% | 246,938.94 | 0.03% | 900,252,229.11 | 697,277,202.71 | 100.00% | 697,277,202.71 | ||
Including: | ||||||||||
Risk portfolio | 8,231,298.10 | 0.91% | 246,938.94 | 3.00% | 7,984,359.16 | |||||
Nature portfolio | 892,267,869.95 | 99.09% | 892,267,869.95 | 697,277,202.71 | 100.00% | 697,277,202.71 | ||||
Total | 900,499,168.05 | 100.00% | 246,938.94 | 0.03% | 900,252,229.11 | 697,277,202.71 | 100.00% | 697,277,202.71 |
Provision for bad debts by individual
Unit: CNY
Name of client | Closing balance | |||
Book balance | Provision for bad debts | Proportion | Reason |
Provision for bad debts by portfolio:246,938.94
Unit: CNY
Name of portfolio | Closing balance | ||
Accounts receivables | Provision for bad debt | Proportion | |
Risk portfolio | 8,231,298.10 | 246,938.94 | 3.00% |
Total | 8,231,298.10 | 246,938.94 | -- |
Notes to determine provision for bad debt by portfolio:
Provision for bad debts by portfolio:
Unit: CNY
Name of portfolio | Closing balance |
Accounts receivables
Accounts receivables | Provision for bad debt | Proportion |
Notes to determine provision for bad debt by portfolio:
If the Company uses the accounts receivable provision for bad debts according to thegeneral model of expected credit loss, please disclose the relevant information ofprovision for bad debt by referring to the disclosure method of other receivables:
? Applicable √ N/A
Analysis by aging
Unit: CNY
Aging
Aging | Closing balance |
Within 1 year (including 1 year) | 900,499,168.05 |
Total | 900,499,168.05 |
(2)Provision for bad debts that is accrued, recovered or reversed during this periodProvision for bad debts during current period
Unit: CNY
Category | Opening balance | Changes in the current period | Closing balance | |||
Provision | Recovered or reversed | Write off | Others | |||
Provision for bad debt for Accounts receivables | 246,938.94 | 246,938.94 | ||||
Total | 246,938.94 | 246,938.94 |
Significant amount of reversal or recovery in current period:
Unit: CNY
Company name | Amount recovered or reversed | Ways of recovery |
(3)Top five entities with the largest balances of the accounts receivables
Unit: CNY
Company’s name | Closing balance | Proportion in the total accounts’ receivables (%) | Provision amount |
Jiangsu Yanghe Liquor Operation Management Co.,Ltd | 640,740,847.81 | 71.15% | |
Jiangsu Shuanggou Liquor Co.,Ltd | 118,240,639.81 | 13.13% | |
Hubei Lihuacun Liquor Industry Co.,Ltd. | 99,724,012.12 | 11.07% | |
Siyang Lantu Liquor Operation Co.,Ltd. | 30,783,590.93 | 3.42% | |
Jiangsu Diageo Wine Co. Ltd | 8,231,298.10 | 0.91% | 246,938.94 |
Total | 897,720,388.77 | 99.68% |
2.Other receivables
Unit: CNY
Item | Closing balance | Opening balance |
Dividend receivable | 713,143.77 | |
Other receivables | 8,154,899,373.55 | 949,642,201.21 |
Total | 8,154,899,373.55 | 950,355,344.98 |
(1) Other receivables
1) Disclosure of other receivable by categories
Unit: CNY
Nature of other receivables
Nature of other receivables | Closing balance | Opening balance |
Within the scope of consolidation the subsidiary borrows | 8,153,014,458.45 | 944,080,654.19 |
Cash deposit | 15,020,000.00 | 15,807,031.24 |
Business loans and petty cash | 3,429,429.04 | 3,953,955.18 |
Other receivables | 3,038,490.82 | 1,189,201.13 |
Total | 8,174,502,378.31 | 965,030,841.74 |
2) Provision for bad debt
Unit: CNY
Bad debts | Phase 1 | Phase 2 | Phase 3 | Total |
Expected credit losses in the next 12 months | Expected credit loss for lifetime (No credit loss occurred) | Expected credit loss for lifetime (Credit loss occurred) | ||
Balance as at 1 January 2019 | 161,933.81 | 15,226,706.72 | 15,388,640.53 | |
Change of opening balance as at 1 January 2019 in current period | —— | —— | —— | —— |
-- Return to phase 3 | -44,464.94 | 44,464.94 | ||
Provision in 2019 | 3,298,423.46 | 3,298,423.46 | ||
Reverse in 2019 | 49,914.58 | 49,914.58 | ||
Other changes | 108.15 | 965,747.20 | 965,855.35 | |
Balance as at 31 December 2019 | 67,662.44 | 19,535,342.32 | 19,603,004.76 |
Significant change of the book balance of provision during the period? Applicable √ N/A
Other receivables by aging
Unit: CNY
Aging | Closing balance |
Within 1 year(including 1 year) | 8,149,352,133.73 |
1-2 years | 1,944,798.29 |
2-3 years | 2,278,210.22 |
Over 3 years | 20,927,236.07 |
3-4 years | 150,376.89 |
4-5 years | 1,377,525.00 |
Over 5 years | 19,399,334.18 |
Total | 8,174,502,378.31 |
3) Provision, recovery or reversal for bad debt during this period
Provision for bad debt during this period:
Unit: CNY
Category | Opening balance | Changes in the current period | Closing balance | |||
Provision | Recovered or reversed | Write off | Other changes | |||
Provision for other receivables bad debt | 15,388,640.53 | 3,298,423.46 | 49,914.58 | 965,855.35 | 19,603,004.76 |
Total
Total | 15,388,640.53 | 3,298,423.46 | 49,914.58 | 965,855.35 | 19,603,004.76 |
Significant amount of reversal or recovery during this period:
Unit: CNY
Company name | recovery or reversal | Way of recovery |
(4) Top five entities with the largest balances of the other receivables
Unit: CNY
Company’s Name | Category | Closing balance | Aging | Proportion in total receivables | Provisioning amount at period end |
Jiangsu Yanghe Investment Management Co., Ltd. | Loan | 8,015,094,136.59 | With in 1 year | 98.05% | |
Guizhou Guijiu Co.,Ltd. | Loan | 85,648,130.32 | With in 1 year | 1.05% | |
Hubei Lihuacun Liquor Industry Co,Ltd. | Loan | 25,450,000.00 | With in 1 year | 0.31% | |
Jiangsu Juntai Properties Co.,Lt., Suqian Guotai Department Store Co.,Ltd. bankruptcy administrator deposit | deposit | 15,000,000.00 | Over 5 years | 0.18% | 15,000,000.00 |
Harbin Binzhou Brewery Co.,Ltd. | Loans | 13,717,100.00 | 8,830,000.00 with in 1 year, 848,000.00 in 1 to 2 years, 290,000.00 in 2 to 3 years, 3,749,100.00 over 3 years | 0.17% | |
Total | -- | 8,154,909,366.91 | -- | 99.76% | 15,000,000.00 |
3. Long-term equity investments
Unit: CNY
Item | Closing balance | Opening balance | ||||
Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
Investment in subsidiaries | 7,964,291,378.23 | 7,964,291,378.23 | 7,365,139,180.24 | 7,365,139,180.24 | ||
Total | 7,964,291,378.23 | 7,964,291,378.23 | 7,365,139,180.24 | 7,365,139,180.24 |
(1) Investment in subsidiaries
Unit: CNY
Investee | Opening balance | Increase in the current period | Closing balance | Closing balance of provision for impairment | |||
Increase | Decrease | Provision for impairment | Others | ||||
Jiangsu Yanghe Package | 153,109,422.39 | 153,109,422.39 |
Co.,Ltd.
Co.,Ltd. | |||||||
Suqian Yanghe Guibinguan Co.,Ltd. | 700,000.00 | 700,000.00 | |||||
Jiangsu Shuanggou Distillery Stock Co.,Ltd. | 1,713,152,320.00 | 1,713,152,320.00 | |||||
Su Wine Trade Group Co.,Ltd. | 285,225,078.23 | 285,225,078.23 | |||||
Jiangsu Yanghe Liquor Operation Managment Co.,Ltd | 10,983,280.00 | 10,983,280.00 | |||||
Jiangsu Dongdi Union International Trade Co.,Ltd. | 5,000,000.00 | 5,000,000.00 | |||||
Jiangsu Dongdixinghui International Trade Co.,Ltd | 5,000,000.00 | 5,000,000.00 | |||||
Siyang Lantu Liquor Operation Co.,Ltd. | 3,161,700.00 | 3,161,700.00 | |||||
Hubei Lihuacun Liquor Industry Co.,Ltd. | 3,000,000.00 | 3,000,000.00 | |||||
Ningxiang Miluochun Liquor Industry Co.,Ltd. | 2,129,000.00 | 2,129,000.00 | |||||
Harbin Binzhou Brewery Co.,Ltd. | 2,000,000.00 | 2,000,000.00 | |||||
Su Wine Group Jiangsu Wealth Management Co.,Ltd. | 3,000,000,000.00 | 3,000,000,000.00 | |||||
Jinagsu Kelite Biology Technology Research Institute Co.,Ltd. | 10,000,000.00 | 10,000,000.00 | |||||
Jiangsu Lion and Sheep Network Technology Co.,Ltd. | 5,460,000.00 | 5,460,000.00 | |||||
Guizhou Guijiu Co.,Ltd. | 193,300,000.00 | 750,000,000.00 | 943,300,000.00 | ||||
Jiangsu Yanghe Weiketang Network Technology Co.,Ltd. | 300,000.00 | 300,000.00 | |||||
Dream Blue Haichuanhui (Shiyan) Trade | 15,738,379.62 | 15,738,379.62 |
InvestmentCo.,Ltd.
Investment Co.,Ltd. | |||||||
Yanghe Chile SPA | 456,880,000.00 | 456,880,000.00 | |||||
Jiangsu Yanghe Investment Management Co., Ltd. | 1,500,000,000.00 | 1,500,000,000.00 | |||||
Yanghe Hong Kong Liquor Co., Ltd. | 18,000,000.00 | 18,000,000.00 | |||||
Total | 7,365,139,180.24 | 768,000,000.00 | 168,847,802.01 | 7,964,291,378.23 |
4. Operating revenue and cost of sales
Unit: CNY
Item | Current period | Previous period | ||
Operating revenue | Cost of sales | Operating revenue | Cost of sales | |
Primary business | 8,802,985,205.67 | 4,522,356,318.57 | 8,929,113,755.67 | 4,329,862,499.55 |
Other business | 814,151,123.47 | 778,500,563.64 | 790,965,922.15 | 733,774,470.86 |
Total | 9,617,136,329.14 | 5,300,856,882.21 | 9,720,079,677.82 | 5,063,636,970.41 |
Does the company need to comply with the disclosure requirements of revenue.NoOther statements:
5. Investment income
Unit: CNY
Item | Current period | Previous period |
Investment income from long-term equity investments under the equity method | 6,416,968,211.24 | 6,099,622,529.13 |
Investment income from disposing long-term equity investments | 27,117,336.74 | |
Investment income from financial assets held for trading during the holding period | 6,946,070.62 | |
Investment income from disposal of financial assets held for trading | 407,441,556.04 | |
Investment income from available-for-sale financial assets during the holding period | 16,371,813.72 | |
Investment income from disposal of available-for-sale financial assets | 56,995,537.28 | |
Other investment income | 546,760,832.64 | |
Total | 6,858,473,174.64 | 6,719,750,712.77 |
XVI. Supplementary information
1. Detailed statement of non-recurring profits and losses
?Applicable √ N/A
Unit: CNY
Item | Amount | Notes |
Profit or loss from disposal of non-current assets | 13,797,266.00 | |
Government grants accounted for, in the profit or loss for the current period (except for the government grants | 85,605,383.19 |
closely related to the business of theCompany and given at a fixed amount orquantity in accordance with the state'suniform standards)
In addition to the effective hedging business related to the company's normal business operations, changes in fair value from holding financial assets held for trading, derivative financial assets, financial liabilities held for trading, fair value changes, and investment income from disposal of financial assets held for trading and derivative financial assets, financial liabilities held for trading, derivative financial liabilities and other debt investments | 973,456,912.43 | |
Other non-operating income and expenditure except above-mentioned items | 12,845,147.02 | |
Other profit and loss items that conform to the definition of non-recurring profits and losses | 1,670,388.78 | |
Less: Effect of income tax | 260,122,467.95 | |
Effect of minority equity | 319,932.41 | |
Total | 826,932,697.06 | -- |
Statement for extraordinary gain and loss items that the Company defines according tothe definition in “Explanatory Announcement of Information Disclosure of Company thatIssues Securities publicly No.1- Extraordinary Gain and Loss” and definition of recurrentgain and loss items that are listed as extraordinary gain and loss in the “ExplanatoryAnnouncement of Information Disclosure of Company that Issues Securities publiclyNO.1- Extraordinary Gain and Loss”:
? Applicable √ N/A
2. Return on equity and earnings per share
Profit during reporting period | Weighted average ROE | EPS(CNY/Share) | |
Basic EPS | Diluted EPS | ||
Net profits attributable to ordinary shareholders of the Company | 21.21% | 4.8991 | 4.8991 |
Net profits attributable to ordinary shareholders of the Company after deduction of extraordinary gain and loss | 18.83% | 4.3503 | 4.3503 |
Section XIII Documents Available for Preference
1. Financial statements signed and stamped by the legal representative, the person incharge of accounting affairs and the person in charge of accounting department;
2. The original of the auditor’s report with the seal of the accounting firm, and signed andstamped by CPAs;
3. The originals of all company documents and announcements that are disclosed to thepublic via media designated by CSRC during the reporting period;
4. The original of 2019 annual report signed by chairman.