Luzhou Laojiao Co., Ltd.
2022 Annual Report
April 2023
2022 Annual ReportSection I Important Statements, Contents and DefinitionsThe Board of Directors, Board of Supervisors, directors, supervisors and senior management guaranteethat the information presented in this report is free of any false records, misleading statements ormaterial omissions, and shall individually and together be legally liable for truthfulness, accuracy andcompleteness of its contents.
Liu Miao, responsible person for the Company, Xie Hong, responsible person for accounting work andYan Li, responsible person for the Company’s financial affairs (Accounting Supervisor) have warrantedthat the financial statements in this report are true, accurate and complete.
Other directors attended the board meeting to deliberate this report by themselves except the followingdirectors.
| Name of directors who did not attend the meeting in person | Position of directors who did not attend the meeting in person | Reason for not attending the meeting in person | Name of deputies |
| Liu Miao | Chairman of the board | Work | Lin Feng |
| Qian Xu | Director | Work | Lin Feng |
| Ying Hanjie | Director | Work | Wang Hongbo |
Affected by risks, uncertainties and assumptions, the forward-looking statements concerning businessobjectives and future plans made in this report based on the subjective assumptions and judgments ofthe future policies and economic conditions may be significantly different from the actual results. Suchstatements shall not be considered as virtual promises of the Company to investors, and the investorsand relevant persons shall maintain adequate risk awareness and shall understand the differencesbetween plans, forecasts and commitments.
In the annual report, the potential risks in the operation of the Company have been disclosed. Investorsare kindly reminded to pay attention to possible investment risks.
The profit distribution plan approved by the board of directors: based on the existing total share capitalof 1,471,987,769 shares, a cash dividend of CNY 42.25 (tax inclusive) will be distributed for every 10existing shares held, 0 shares of bonus shares (tax inclusive), and reserves would not be converted intoshare capital.
This Report has been prepared in both Chinese and English. Should there be any discrepancies ormisunderstandings between the two versions, the Chinese version shall prevail.
Contents
Section I Important Statements, Contents and Definitions ...... 2
Section II Company Profile and Key Financial Results ...... 6
Section III Management Discussion and Analysis ...... 11
Section IV Corporate Governance ...... 42
Section V Environmental and Social Responsibility ...... 66
Section VI Significant Events ...... 78
Section VII Changes in Shares and Information about Shareholders ...... 86
Section VIII Preferred Shares ...... 97
Section IX Information about Bond ...... 98
Section X Financial Report ...... 105
Documents Available for Reference
1. Financial statements signed and stamped by the responsible person for the Company, theresponsible person for accounting work and the responsible person for the Company’s financial affairs(Accounting Supervisor);
2. The original of the auditor’s report with the seal of the accounting firm, and signed and stamped byCPAs; and
3. The originals of all company documents and announcements that are disclosed to the public on thewebsite designated by the China Securities Regulatory Commission (CSRC) during the reporting period.
Definitions
| Term | Reference | Definition |
| Company, the Company, Luzhou Laojiao | Refer to | Luzhou Laojiao Co., Ltd. |
| Laojiao Group | Refer to | Luzhou Laojiao Group Co., Ltd. |
| XingLu Group | Refer to | Luzhou XingLu Investment Group Co., Ltd. |
| SASAC of Luzhou | Refer to | State-owned Assets Supervision and Administration Commission of Luzhou |
| Huaxi Securities | Refer to | Huaxi Securities Co., Ltd. |
| Luzhou Bank | Refer to | Luzhou Bank Co., Ltd. |
| Sales Company | Refer to | Luzhou Laojiao Sales Co., Ltd. |
| Brewing Company | Refer to | Luzhou Laojiao Brewing Co., Ltd. |
Section II Company Profile and Key Financial Results
1. Corporate information
| Stock abbreviation | Luzhou Laojiao | Stock code | 000568 |
| Stock exchange where the shares of the Company are listed | Shenzhen Stock Exchange | ||
| Name of the Company in Chinese | 泸州老窖股份有限公司 | ||
| Abbr. of the Company name in Chinese | 泸州老窖 | ||
| Name of the Company in English (if any) | Luzhou Laojiao Co., Ltd. | ||
| Abbr. of the Company name in English (if any) | LZLJ | ||
| Legal representative | Liu Miao | ||
| Registered address | Guojiao Square, Luzhou City, Sichuan Province, China | ||
| Postal code | 646000 | ||
| Past changes of registered address | The Company’s registered address has changed from 46 Guihua Street, Luzhou City, Sichuan Province, China to Guojiao Square, Luzhou City, Sichuan Province, China in 2000. | ||
| Business address | Luzhou Laojiao Marketing Network Command Center, Nanguang Road, Luzhou City, Sichuan Province, China | ||
| Postal code | 646000 | ||
| Company website | www.lzlj.com | ||
| lzlj@lzlj.com | |||
2. Contact us
| Secretary of the board | Representative for securities affairs | |
| Name | Li Yong | Wang Chuan |
| Address | Luzhou Laojiao Marketing Network Command Center, Nanguang Road, Luzhou City, Sichuan Province, China | |
| Tel. | (0830)2398826 | (0830)2398826 |
| Fax | (0830)2398864 | (0830)2398864 |
| dsb@lzlj.com | dsb@lzlj.com | |
3. Information disclosure and place where the annual report is kept
| Stock exchange website where this Report is disclosed | China Securities Journal, Securities Times, Securities Daily |
| Media and website where this Report is disclosed | http://www. cninfo.com.cn |
| Place where the annual report of the Company is kept | Board office |
4. Company registration and alteration
| Unified social credit code | 91510500204706718H |
| Changes in main business activities since the Company was listed (if any) | None |
| Changes of controlling shareholders of the Company (if any) | Before September 2009, the controlling shareholder was the SASAC of Luzhou. After the equity transfer in September 2009, the controlling shareholder was changed to Laojiao Group, but the actual controller is still the SASAC of Luzhou. |
5. Other relevant information
Accounting firm engaged by the Company
| Name of the accounting firm | Sichuan Huaxin (Group) CPA Firm |
| Business address of the accounting firm | 28/F., South Jinmaolidu, NO.18 Ximianqiao Street, Chengdu City, Sichuan Province. |
| Name of accountants for writing signature | Li Wulin, Tang Fangmo, and Fan Bo |
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 duringthe reporting period.? Applicable ? N/A
6. Key accounting data and financial indicators
Whether the Company performed a retroactive adjustment to or restatement of accounting data.? Yes ? No
| 2022 | 2021 | YoY Change | 2020 | |
| Operating revenues (CNY) | 25,123,563,271.62 | 20,642,261,724.37 | 21.71% | 16,652,854,549.80 |
| Net profits attributable to shareholders of the Company (CNY) | 10,365,383,281.80 | 7,955,554,351.73 | 30.29% | 6,005,723,069.36 |
| Net profits attributable to shareholders of the Company before non-recurring gains and losses (CNY) | 10,321,481,236.93 | 7,884,384,055.60 | 30.91% | 5,990,831,793.72 |
| Net cash flows from operating activities (CNY) | 8,262,648,269.72 | 7,698,648,104.51 | 7.33% | 4,916,102,451.30 |
| Basic earnings per share (CNY/share) | 7.06 | 5.43 | 30.02% | 4.10 |
| Diluted earnings per share (CNY/share) | 7.06 | 5.43 | 30.02% | 4.10 |
| Weighted average ROE | 33.32% | 31.15% | 2.17% | 28.27% |
| At the end of 2022 | At the end of 2021 | YoY Change | At the end of 2020 | |
| Total assets (CNY) | 51,385,481,354.52 | 43,211,782,005.68 | 18.92% | 35,009,203,823.45 |
| Net assets attributable to shareholders of the Company (CNY) | 34,207,871,130.03 | 28,040,247,005.94 | 22.00% | 23,074,858,552.59 |
Whether the lower of the net profits attributable to shareholders of the Company before and after non-recurring gains and losses was negative for the last three accounting years, and the latest auditor’sreport indicated that there was uncertainty about the Company’s ability to continue as a goingconcern? Yes ? No
Whether the lower of the net profits attributable to shareholders of the Company before and after non-recurring gains and losses was negative? Yes ? No
7. Differences in accounting data under domestic and overseasaccounting 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/ANo such differences for the reporting period.
7.2. Differences in the net profits and net assets disclosed in the financial reportsprepared under the overseas and China accounting standards
? Applicable ? N/A
No such differences for the reporting period.
8. Key financial results by quarter
Unit: CNY
| Q1 | Q2 | Q3 | Q4 | |
| Operating revenues | 6,311,964,675.84 | 5,352,412,877.10 | 5,860,457,699.51 | 7,598,728,019.17 |
| Net profits attributable to shareholders of the Company | 2,875,658,916.19 | 2,656,267,424.25 | 2,685,377,572.64 | 2,148,079,368.72 |
| Net profits attributable to shareholders of the Company before non-recurring gains and losses | 2,864,799,362.69 | 2,631,466,479.81 | 2,670,975,274.37 | 2,154,240,120.06 |
| Net cash flows from operating activities | 1,131,497,885.76 | 2,945,517,079.58 | 2,235,327,194.79 | 1,950,306,109.59 |
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 | 2022 | 2021 | 2020 | Note |
| Profit or loss from disposal of non-current assets (including the write-off portion of the impairment provision) | 19,805,093.70 | -347,429.88 | 8,123,010.18 | See "Section X Note 7.46" for details. |
| Government grants accounted for, in the profit or loss for the current period (except for the government grants closely related to the business of the Company and consistently given at a fixed amount or quantity in accordance with the national policies or standards) | 34,931,161.52 | 51,756,953.15 | 31,409,825.37 | See "Section X Note 7.42 and 7.47" for details. |
| Gain or loss on fair-value changes on held-for-trading financial assets and liabilities & income from disposal of held-for-trading financial assets and liabilities and available-for-sale financial assets (exclusive of the effective portion of hedges that arise in the Company’s ordinary course of business) | -2,585,156.72 | 6,352,241.79 | See "Section X Note 7.43" for details. | |
| Reversed portions of impairment allowances for receivables which | 80,000,000.00 |
| are tested individually for impairment | ||||
| Other non-operating income and expenditure except above-mentioned items | 7,873,927.25 | -40,241,672.68 | -20,289,086.46 | See "Section X Note 7.47 and 7.48" for details. |
| Less: Corporate income tax | 14,413,895.31 | 24,082,098.59 | 4,512,028.92 | |
| Minority interests (after tax) | 1,709,085.57 | 2,267,697.66 | -159,555.47 | |
| Total | 43,902,044.87 | 71,170,296.13 | 14,891,275.64 | -- |
Other items that meet the definition of non-recurring gain/loss:
? Applicable ? N/ANo such cases for the reporting period.
Explain the reasons if the Company classifies any non-recurring gain/loss item mentioned in theExplanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities tothe Public-Non-Recurring Gains and Losses as a recurring gain/loss item.? Applicable ? N/ANo such cases for the reporting period.
Section III Management Discussion and Analysis
1. Industry overview for the reporting period
In 2022, the Chinese baijiu industry was under multiple pressures such as the economic downturn,spending shrinks and fierce competition, and concentration towards the top baijiu producers wasincreasingly obvious in the industry. Capacity optimisation, quality upgrade, technological innovation,cultural development, consumer experience and service enhancement will become the key themesfor the baijiu industry in the new era of high-quality development.
2. Business scope in the reporting period
The Company shall comply with the disclosure requirements for companies engaging in food & liquorand wine production of the Guidelines No. 3 of the Shenzhen Stock Exchange on Self-regulation ofListed Companies—Industry-specific Information Disclosure.
Holding five food business licenses, the Company operates within the baijiu subdivision industrywhich belongs to the liquor & wine, beverage and refined tea production industry with specializedbaijiu product design, production and sales as its main business model. The Company’s primaryproducts are baijiu series such as "National Cellar 1573" and "Luzhou Laojiao", and its maincomprehensive performance indicators rank high in the baijiu industry. For the reporting period,operating revenue amounted to CNY 25.124 billion, up 21.71% year on year; and the net profitattributable to the shareholders of the listed company reached CNY 10.365 billion, up 30.29% year onyear.
For the Company's brand operations, please refer to "4.1 Overview" under “4. Analysis of mainbusiness” in this section. The Company’s main products are classified as follows:
| Main product types | Classification criteria | Representative brand name |
| Mid- and high-end baijiu | Tax-inclusive sales price ≥ CNY 150 per bottle | National Cellar 1573, Luzhou Laojiao Tequ, and Century-old Luzhou Laojiao Jiaoling Baijiu |
| Other baijiu | Tax-inclusive sales price < CNY 150 per bottle | Luzhou Laojiao Touqu and Luzhou Laojiao · Hey Guys |
Main sales models:
Currently, the Company has two main sales models:
1. Traditional channel operation model: It is mainly authorized distribution of the offline distributors. TheCompany establishes cooperative relationships with the distributors by product lines and regions. TheCompany directly supplies goods to the distributors, and then distributors sell them to consumers andterminal outlets.
2. Emerging channel operation model: It is mainly online sales operations. The Company establishescooperative relationships with e-commerce platforms, self-media and webcasters, and sells the goodsto consumers through flagship stores, specialty stores, live streaming rooms on online platforms andother network terminals.
Distribution models:
? Applicable □N/A
1. Main sales models
Unit: CNY
| Operating revenue | Cost of sales | Gross profit margin | YoY change of operating revenue | YoY change of cost of sales | YoY change of gross profit margin | |
| By sales model | ||||||
| Traditional channel operation model | 23,302,396,093.43 | 2,939,816,887.75 | 87.38% | 19.36% | 9.21% | 1.17% |
| Emerging channel operation model | 1,463,725,905.06 | 274,436,829.16 | 81.25% | 64.17% | 41.65% | 2.98% |
Note: Operating revenue and cost of sales of the emerging channel operation model increased 64.17% and 41.65%respectively year on year. It was mainly due to the increased revenue and cost on e-commerce platforms.
2. Distributors
| Region | Number of distributors at the end of the reporting period | Increased number during the reporting period | Decreased number during the reporting period | YoY change of number of distributors (%) | Reason for any significant change |
| Domestic | 1703 | 47 | 127 | -4.49 | |
| Overseas | 126 | 20 | 42 | -14.86 |
3. Main settlement method for distributors and distribution method
The Company's main settlement method for distributors is payment before delivery. The distributionmethod is authorized distribution.
4. Top five distributors
The Company had no accounts receivable from the top five distributors at the end of the period. Fordetails, please refer to Section III 4.2.8. "Main customers and suppliers".
Store sales terminals accounted for more than 10%
□ Applicable ? N/A
Online direct sales? Applicable □N/AFor the sales of the Company's main products, please refer to Section III 4.2.1. "Breakdown ofoperating revenues". The Company's complete series of products are sold online. Its main cooperationplatforms included JD.com and Tmall.
Sales price of main products contributing over 10% of the total operating revenues for the currentperiod changed by more than 30% from the previous reporting period
□ Applicable ? N/A
Purchase model and purchase content
Unit: CNY
| Purchase model | Purchase content | Amount of main purchase content |
| Organic raw grains are purchased through cooperative model and supplied by organic raw grain bases; other raw grains and packaging | Raw materials | 4,528,482,786.16 |
| materials are purchased through bid invitation | ||
| Purchase based on the unified pricing of the National Development and Reform Commission and the price bureau, and purchase through bid invitation | Fuels and energies | 163,075,514.73 |
| Purchase through bid invitation | Low-value consumables | 55,904,099.15 |
The purchase of raw materials from cooperatives or farmers accounted for more than 30% of the totalpurchase amount
□ Applicable ? N/A
The price of main raw materials purchased externally changed by more than 30% year-on-year
□ Applicable ? N/A
Main production model:
The Company's main production model is self-production.
Commissioned processing and production
□ Applicable ? N/A
Main breakdown items of cost of sales
Unit: CNY
| By business segment | Item | 2022 | 2021 | YoY Change | ||
| Amount | As % of cost of sales | Amount | As % of cost of sales | |||
| Baijiu | Raw materials | 2,757,973,459.70 | 85.80% | 2,502,121,435.16 | 86.71% | 10.23% |
| Baijiu | Labor costs | 208,363,976.36 | 6.48% | 160,836,008.91 | 5.57% | 29.55% |
| Baijiu | Manufacturing overhead | 247,916,280.85 | 7.71% | 222,727,707.56 | 7.72% | 11.31% |
Production volume and inventory
1. Production volume, sales volume and inventory of main products
| Product classification | Production volume (ton) | Sales volume (ton) | Inventory (ton) | YoY change of production volume (%) | YoY change of sales volume (%) | YoY change of inventory | Description of major changes |
Mid- and high-end baijiu
| Mid- and high-end baijiu | 40,823.92 | 37,123.96 | 42,877.01 | -16.11 | 16.87 | 9.44 | |
| Other baijiu | 47,078.68 | 49,058.69 | 11,695.49 | 2.00 | 6.52 | -14.48 |
2. Inventory at the end of the reporting period
Unit: Ton
| Finished baijiu | Semi-finished baijiu (including base baijiu) |
| 54,572.50 | 402,613.83 |
3. Capacity
Unit: Ton
| Main products | Design capacity | Actual capacity | Capacity in progress |
| Baijiu | 170,000 | 170,000 | 80,000 |
3. Analysis of core competitiveness
A. Geographical advantageLuzhou City, where the Company is located, sits in the transitional area between the southern rim of theSichuan Basin and the Yunnan-Guizhou Plateau, featuring a warmer and more humid sub-tropicalclimate compared to other areas at the same latitude, with a temperature above 0℃ throughout theyear. The unique climate and soil are agreeable to grow grains for baijiu brewing. The glutinous redsorghum and soft wheat grown in this area are the primary raw materials for the baijiu of the Company.The cellars in which the Company brews its baijiu are made of the local loessal clay characterized bystrong viscosity, rich minerals and excellent moisture retention. In addition, the abundant and qualitywater in the region creates a unique geographical advantage for the production of the Company’s baijiu.
B. Advantage of cellars and brewing techniqueAged cellars are the most essential condition for a strong aromatic baijiu maker to produce good qualitybaijiu. The Cellars of National Treasure 1573, founded in 1573, was granted by the State Council as thefirst Cultural Relic of National Importance in the industry under the Protection of the State in December1996. 1,619 cellars of Luzhou Laojiao which have been continuously used for over 100 years, togetherwith its 16 ancient brewing workshops and three natural cellar holes, were all selected as the fourthbatch of Cultural Relics of National Importance under the Protection of the State in 2013. They areunique resources that cannot be replicated. In both 2006 and 2012, Luzhou Laojiao Daqu Cellars weretwice selected into the preliminary list of China for World Heritage. In November 2018, Luzhou LaojiaoCellars and Brewing Workshops were selected into China’s Industrial Heritage List. The time-honoredTraditional Brewing Technique of Luzhou Laojiao is a 24-generation inheritance and a classic brewingtechnique for strong aromatic baijiu. This technique was selected as the first batch of NationalIntangible Cultural Heritage in May 2006. The Cellars of National Treasure 1573 and the TraditionalBrewing Technique of Luzhou Laojiao together provide the most essential basis and assurance for thequality of the product series of National Cellar 1573 and Luzhou Laojiao. Additionally, Huangyi BreweryEco-Park has moved into full production in late 2020. Upholding the cultural connotations of
“inheritance of ancient ways, pure-grain brewing, traditional techniques, and intelligent technologies”,the Company carried out brewing technical renovation featuring automatic, intelligent and informationtechnology-based transformation. As such, it has established a baijiu brewery eco-park comprisingbrewing workshops, leaven making workshops, and base baijiu storage cellars, along with energy andsewage treatment facilities. This brewery eco-park brings with it new production capacities of 100,000tons of quality pure-grain solid baijiu and 100,000 tons of leaven in addition to a new storage capacity of380,000 tons of baijiu per year, marking a substantial increase in the Company’s production capacity.
C. Brand advantageBrand is a key business resource for baijiu producers. The Company’s reputation is greatly built on itssuperiority in brand. National Cellar 1573, which is of a connoisseurship level, is a world-famous high-end brand. Luzhou Laojiao Tequ, a classic brand for strong aromatic baijiu, was selected in 1952 by thefirst national tasting competition judges as one of the four most famous baijiu brands in China. It is theonly strong aromatic baijiu brand that won the title of “National Famous Liquor” for five consecutivetimes, as well as the pioneer with regard to the “Tequ” variety of baijiu. In recent years, the Companyhas successfully put in place a brand system of “dual brands, three product series, and major singleproducts” with great clarity and focus. The programs carried out to promote the brand of National Cellar1573 and revive the brand of Luzhou Laojiao have produced remarkable results, with significantimprovement in brand influence. The Company’s baijiu is increasingly known by consumers as anational brand of strong aromatic baijiu and of authentic flavor.
D. Quality and R&D advantageThe Company is committed to producing high-quality baijiu, advocating a healthy lifestyle and “makingthe quality visible”. The first “Organic Sorghum Planting Base” was established and the six-factormanagement system (including organic, quality, safety, environment, measurement and energy) wasbuilt and improved. The research platforms are established, including National Engineering ResearchCenter of Solid-State Brewing, National Liquor Test Center, National Postdoctoral Workstation, etc,which all support the innovation and upgrading of products with their strong technical force. In recentyears, the Company has put in a lot of efforts in researching Tequ production, brewing informatization &automation. Relying on the technological innovation platforms such as the National Industrial DesignCenter, and continuously deepening the cooperation with universities and scientific research institutesincluding the Chinese Academy of Sciences and the Jiangnan University, the Company has undertakendozens of national- or provincial-level projects and has been granted hundreds of invention or utilitymodel patents. And remarkable results have been achieved with respect to improvement of the qualityof base Baijiu, as well as production efficiency improvement.
E. Talent advantageThe Company has 1 inheritor of national intangible cultural heritage, 4 masters of Chinese brewing, 2masters of Chinese baijiu, 2 Chinese liquor connoisseurs, 1 master of Chinese baijiu technique, 11senior professor engineers, 7 experts who receive special allowances from the State Council, 4 nationaltechnicians, 2 national model workers, 5 national Labor Day Medal winners, 3 academic and
technologic leaders of Sichuan province, 1 expert with outstanding contribution in Sichuan province, 1innovation leader of Tianfu, 1 excellent engineer of Tianfu, 3 craftsmen of Tianfu, 2 craftsmen ofSichuan province, 1 technological elite of Tianfu, 4 technicians of Sichuan province, as well ashundreds of highly skilled personnel including national baijiu judges, senior brewing technicians andbrewing technicians. The comprehensive and professional personnel system assures the sounddevelopment of the Company.
4. Analysis of main business
4.1. Overview
In 2022, the Company forged ahead against headwinds and maintained a healthy and rapiddevelopment momentum, establishing a growing pace. For the reporting period, operating revenueamounted to CNY 25.124 billion, up 21.71% year on year; and the net profit attributable to theshareholders of the listed company reached CNY 10.365 billion, up 30.29% year on year. TheCompany’s main operations and the results in the reporting period are summarized as follows:
A. Continued stable growth in salesStrategies were effectively implemented. Empowered by new marketing models and new methods,the system of resource integration plays a powerful driving force. The performance of main singleproducts was outstanding. National Cellar 1573 maintained its leadership, and Luzhou Laojiao'sbrand rejuvenation sped up, with a deep layout of multiple product series and young orientation, andthe formation of new growth poles accelerated. Continuous efforts were made for the core area.The Company further consolidated the base market, made a breakthrough in the highland market andexpanded the opportunity market, resulting in continuous growth in scale by province, city andnumber of customers.
B. A variety of branding highlightsThe brand matrix was continuously improved. Adhering to the strategy of "dual brands, threeproduct series, and major single products", the Company continued to promote the brandrejuvenation plan, and comprehensively enhanced its market influence. Branding activities werevigorously carried out. The Company deeply integrated its brand in top international events such asthe Australian Open and the World Cup, conducted cross-border cooperation with the food, art and
fashion industries, and achieved precise circle communication and brand promotion. A strongerbrand presence was achieved. In 2022, Luzhou Laojiao became the only Chinese company in thebaijiu industry to have two brands listed in the 2022 Kantar BrandZ Top 100 Most Valuable ChineseBrands, and was awarded the third place in the list of 2022 Global Top 50 Most Valuable SpiritsBrands.
C. Solid capacity guaranteeThe capacity guarantee achieved a higher level. The Company has created a high-quality organicraw grain planting base, further optimized the digital business system of the brewery eco-parks andimproved the utilization of brewing resources and production efficiency. The product guarantee wassolid and strong. The completion rate of production guarantee, guarantee rate of package materials,warehousing and logistics efficiency and management system coverage continued to improve, andLuzhou Laojiao's supply chain system showed a new look. The quality assurance continued to beconsolidated. The Company continuously carried out external audits of quality, food safety andorganic systems, with a 100% pass rate. It participated in drafting and revising nine nationalstandards, and released a white paper on quality and safety to the community for six consecutiveyears. Luzhou Laojiao was awarded six national quality awards, including "National Food SafetyIntegrity Demonstration Unit", "National Excellent Case of Food Safety Management Innovation" and"National Quality and Integrity Benchmark Enterprise".
D. Leading technological innovationA historic breakthrough was made in major science and technology awards. The Company wonthe First Prize of Science & Technology Progress of People's Government of Sichuan Province, theFirst Prize of Sichuan Patent Award, and the First Prize of Science & Technology Progress Award ofChina Food Industry Association and China National Light Industry Council. Remarkable workingresults were achieved in terms of intellectual property. The Company passed the review ofnational intellectual property demonstration enterprises and the certification of intellectual propertymanagement system. In addition, it applied for 113 patents, authorized 73 patents and published 31papers. Collaborative technology innovation was effectively promoted. The Company deepenedthe industry-university-research cooperation, made multiple major technological breakthroughs suchas "intelligent brewing" and "low-carbon brewing", with many achievements reaching internationalleading levels.
E. Strong support from the talent teamTalent was introduced through multiple channels. Mature and reserve talent was introducedthrough campus recruitment and social recruitment. Talent was trained from multiple dimensions.The Company continued to build a knowledge management platform, and enhanced the developmentof a training system, course system and teacher system. It was selected as one of the first batch ofkey enterprises to promote the "industry reform" special action in the national light industry. Talentwas selected and appointed by multiple initiatives. The mechanism of open post competition formiddle-level management and department managers of subsidiaries was implementedcomprehensively, and the Luzhou Laojiao assessment officer system was formally implemented tomake the selection and appointment of talent more scientific. In 2022, the Company was awarded"National Model Enterprise of Harmonious Labor Relations" and "Advanced Unit of Talent Work in
Luzhou City". Mr. Liu Miao, Secretary of the Party Committee and Chairman of the Board of theCompany, was awarded the "Baijiu Town Talent - Special Honor Award" in Luzhou City. YangpingBrewery Workshop was awarded the "Craftsman Innovation Workshop in the National Light Industry".
F. Prominent cultural leadershipThe cultural connotations continued to deepen. The "70th Anniversary of Famous Baijiu"exhibition toured China, and books and courses on corporate culture were published and upgraded.The cultural cohesion continued to heighten. The corporate culture knowledge competition of"Strong Flavor Cultural Brewery Cup" was successfully concluded, and the Luzhou Laojiao cultureshaping think tank platform, including the National Cellar 1573 Institute, was successfully built. Thecultural communication covered the whole jurisdiction. New media communication and operationwere optimized, and a matrix communication platform was built. The cultural experience wasinnovated and upgraded. The immersive cultural experience was upgraded, the upgrade of the oldmuseum was completed and the cultural experience services of Luzhou Laojiao continued to climb.
G. Continuous improvement in headquarters capacityInternal controls were constantly optimized. By continuously improving the management systemand sorting out the procedure system, the Company's ability of risk prevention continued to improve.The management innovation was efficiently empowered. The Company was selected as one ofthe first batch of the province and the third batch of the national list of pilot units for electronic VATinvoices, as well as one of the first batch of the national pilot units for the construction of digitalarchives for enterprise groups, ranking among the first camp of national corporate archivemanagement. The safety and environmental protection continued to be consolidated. TheCompany had zero production safety accidents and zero incidence of occupational diseasesthroughout the year, and was awarded as a "tier-one enterprise with standard safety production" anda "provincial healthy enterprise". For three consecutive years, the Company was awarded as aprovincial "environmental integrity enterprise of corporate environmental credit evaluation". Socialwelfare was continuously advanced. The Company supported rural revitalization in pairedassistance regions and was awarded the "Advanced Collective for Paired Assistance" in SichuanProvince. It continued to carry out public welfare projects such as the "Pillars Project" and the"Luzhou Laojiao Teacher's Pointer" to support the development of local education.
4.2. Revenues and cost of sales
4.2.1. Breakdown of operating revenues
Unit：CNY
| 2022 | 2021 | YoY Change | |||
| Amount | As % of operating revenues | Amount | As % of operating revenues | ||
| Total | 25,123,563,271.62 | 100% | 20,642,261,724.37 | 100% | 21.71% |
| By business segment | |||||
| Baijiu | 24,766,121,998.49 | 98.58% | 20,415,170,469.09 | 98.90% | 21.31% |
| Other revenues | 357,441,273.13 | 1.42% | 227,091,255.28 | 1.10% | 57.40% |
| By product | |||||
| Mid- and high-end baijiu | 22,132,546,058.64 | 88.10% | 18,397,360,159.99 | 89.12% | 20.30% |
| Other baijiu | 2,633,575,939.85 | 10.48% | 2,017,810,309.10 | 9.78% | 30.52% |
| Other revenues | 357,441,273.13 | 1.42% | 227,091,255.28 | 1.10% | 57.40% |
| By geographical segment | |||||
| Domestic | 24,970,484,945.58 | 99.39% | 20,558,860,984.10 | 99.60% | 21.46% |
| Overseas | 153,078,326.04 | 0.61% | 83,400,740.27 | 0.40% | 83.55% |
| By sales model | |||||
| Traditional channel operation model | 23,302,396,093.43 | 92.75% | 19,523,560,616.72 | 94.58% | 19.36% |
| Emerging channel operation model | 1,463,725,905.06 | 5.83% | 891,609,852.37 | 4.32% | 64.17% |
| Other revenues | 357,441,273.13 | 1.42% | 227,091,255.28 | 1.10% | 57.40% |
4.2.2. Business segments, products, geographical segments or sales modelscontributing over 10% of the operating revenues or profits? Applicable ? N/A
Unit：CNY
| Operating revenue | 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 | ||||||
| Baijiu | 24,766,121,998.49 | 3,214,253,716.91 | 87.02% | 21.31% | 11.39% | 1.16% |
| By product | ||||||
| Mid- and high-end baijiu | 22,132,546,058.64 | 1,981,044,707.48 | 91.05% | 20.30% | 11.43% | 0.71% |
| Other baijiu | 2,633,575,939.85 | 1,233,209,009.43 | 53.17% | 30.52% | 11.31% | 8.08% |
| By geographical segment | ||||||
| Domestic | 24,970,484,945.58 | 3,349,598,518.23 | 86.59% | 21.46% | 13.94% | 0.89% |
| By sales model | ||||||
| Traditional channel operation model | 23,302,396,093.43 | 2,939,816,887.75 | 87.38% | 19.36% | 9.21% | 1.17% |
Under the circumstances that the statistical standards for the Company’s main business data wereadjusted in the reporting period, the Company’s main business data in the current year is calculatedbased on adjusted statistical standards at the end of the reporting period? Applicable ? N/A
4.2.3. Whether revenue from sales of goods is higher than revenue of renderingservices? Yes ? No
| By business segment | Item | Unit | 2022 | 2021 | YoY Change |
| Baijiu | Sales volume | Ton | 86,182.65 | 77,820.50 | 10.75% |
| Production volume | Ton | 87,902.60 | 94,818.24 | -7.29% | |
| Inventory | Ton | 54,572.50 | 52,852.55 | 3.25% |
Reason for any over 30% YoY movements in the data above? Applicable ? N/A
4.2.4. Execution of significant sales or purchase contracts in the reporting period? Applicable ? N/A
4.2.5. Breakdown of cost of sales
By business segment
Unit：CNY
| By business segment | Item | 2022 | 2021 | YoY Change | ||
| Amount | As % of cost of sales | Amount | As % of cost of sales | |||
| Baijiu | Raw materials | 2,757,973,459.70 | 85.80% | 2,502,121,435.16 | 86.71% | 10.23% |
| Baijiu | Labor costs | 208,363,976.36 | 6.48% | 160,836,008.91 | 5.57% | 29.55% |
| Baijiu | Manufacturing overhead | 247,916,280.85 | 7.71% | 222,727,707.56 | 7.72% | 11.31% |
4.2.6. Change in the scope of the consolidated financial statements for thereporting period
? Yes ? NoSubsidiaries that are newly incorporated into the scope of consolidation in this period
| Name of subsidiary | Reason |
| Luzhou Laojiao International Trade (Hainan) Co., Ltd. | Incorporated through investment |
| Luzhou Laojiao Technology Innovation Co., Ltd. | Incorporated through investment |
Liquidation and cancellation for subsidiaries in this period
| Name of subsidiary | Reason |
| Luzhou Laojiao Bosheng Hengxiang Liquor Sales Co., Ltd. | Liquidation and cancellation |
| Luzhou Laojiao Tourism Culture Co., Ltd. | Liquidation and cancellation |
4.2.7. Major changes in the business, products or services in the reporting period? Applicable ? N/A
4.2.8. Main customers and suppliers
Sales to main customers of the Company
| Total sales to top five customers（CNY） | 16,855,963,269.03 |
| Total sales to top five customers as % of the total sales | 67.09% |
| Total sales to related parties among top five customers as % of the total sales | 0.00% |
Information on top five customers
| No. | Customer | Sales amount (CNY) | As % of the total sales for the year |
| 1 | Customer A | 11,205,287,521.28 | 44.60% |
| 2 | Customer B | 2,532,520,076.72 | 10.08% |
| 3 | Customer C | 1,464,567,730.63 | 5.83% |
| 4 | Customer D | 936,256,733.32 | 3.73% |
| 5 | Customer E | 717,331,207.08 | 2.86% |
| Total | -- | 16,855,963,269.03 | 67.09% |
Other information on main customers? Applicable ? N/A
Main suppliers of the Company
| Total purchases from top five suppliers（CNY） | 1,893,157,453.08 |
| Total purchases from top five suppliers as % of the total purchases | 39.88% |
| Total purchases from related parties among top five suppliers as % of the total purchases | 0.00% |
Information on top five suppliers
| No. | Supplier | Purchases (CNY) | As % of the total purchases for the year |
| 1 | Supplier A | 615,541,310.14 | 12.97% |
| 2 | Supplier B | 430,257,905.90 | 9.06% |
| 3 | Supplier C | 374,360,322.52 | 7.89% |
| 4 | Supplier D | 260,747,023.01 | 5.49% |
| 5 | Supplier E | 212,250,891.52 | 4.47% |
| Total | -- | 1,893,157,453.08 | 39.88% |
Other information on main suppliers? Applicable ? N/A
4.3. Expenses
Unit：CNY
| 2022 | 2021 | YoY Change | Reason for any significant change | |
| Selling and distribution expenses | 3,448,771,046.02 | 3,599,211,604.56 | -4.18% | |
| General and administrative expenses | 1,162,422,257.23 | 1,056,116,367.85 | 10.07% | |
| Finance expenses | -286,376,927.48 | -216,885,999.21 | Mainly due to the increased interest income in the current period | |
| R&D expenses | 206,248,486.57 | 137,712,329.78 | 49.77% | Mainly due to the increased R&D projects in the current period |
The Company shall comply with the disclosure requirements for companies engaging in food & liquorand wine production of the Guidelines No. 3 of the Shenzhen Stock Exchange on Self-regulation ofListed Companies—Industry-specific Information Disclosure.
4.3.1. Breakdown of selling and distribution expenses
Unit：CNY
| Selling and distribution expenses | 2022 | 2021 | YoY Change | Reason for any significant change |
| Advertising expenses | 1,880,179,769.91 | 1,769,053,962.56 | 6.28% | |
| Sales promotion expenses | 712,641,702.96 | 1,139,273,684.38 | -37.45% | Mainly due to the decreased sales promotion expenses in the current period |
| Employee benefits | 355,699,286.88 | 357,659,249.63 | -0.55% | |
| Warehousing and logistics expenses | 138,589,417.94 | 100,059,219.52 | 38.51% | Mainly due to the increased sales revenue from baijiu, leading to a corresponding increase in warehousing and logistics expenses |
| Other | 361,660,868.33 | 233,165,488.47 | 55.11% | Mainly due to the increased share-based payments apportioned in the current period |
4.3.2. Breakdown of advertising expenses
Unit：CNY
| Advertising | Expenses |
| Online advertising (exclusive of TV advertising) | 366,297,010.23 |
| Offline advertising | 459,949,306.81 |
| TV advertising | 601,235,194.18 |
Other (inclusive of branding ideas, exhibitions & showcases, advertising materials,activity planning, etc.)
| Other (inclusive of branding ideas, exhibitions & showcases, advertising materials, activity planning, etc.) | 452,698,258.69 |
4.4. R&D investments
? Applicable ? N/A
| Major R&D projects | Purpose | Progress | Specific objectives | Expected impact on the Company |
| Thermochemical Energy- and Resource-based Coupled Utilization Technology of Brewing Waste | The project is a national key R&D program during the "13th Five-year Plan" period undertaken by the Company, which aims to realize the energy- and resource-based utilization of brewing waste with thermochemical technology, and develop a complete set of intelligent equipment systems for the resource- and energy-based utilization of brewing waste. | Taking brewing waste as the research target and the energy- and resource-based research and development of thermochemical treatment as the technical breakthrough, the project develops and completes one pilot line for drying and pyrolysis of distiller's grains, and realizes the processing capacity of five tons/day for drying and pyrolysis of distiller's grains. Currently, the Company plans to build an industrial demonstration line with a processing capacity of 100,000 tons/year, making a systematic breakthrough in the resource-based utilization technology of brewing waste and industrialization in China. | To develop an intelligent equipment system with packaged technology for the resource- and energy-based utilization of brewing waste, successfully build a demonstration base for the project industrialization, and achieve more than 90% of resource- and energy-based utilization of brewing waste to ensure the low-carbon, green development of the Chinese baijiu industry. | Realize a large-scale resource- and energy-based utilization of brewing waste and achieve both ecological and economic benefits. |
| Study on the Expression Regulation of Key Genes in Leaven Microorganisms in China and Japan and the Improvement of Chinese Leaven Quality | The project is an international project that the Company jointly undertook, which studies the evolution pattern and formation mechanism of microbiomes during the natural leaven-marking and fermentation, and screens for microbial strains with specific functions for the production of functional enhanced leaven. | A study on the diversity of microorganisms in the incised notopterygium has been carried out. Multiple omics analyses including macro-genomic and metabolomic analysis of strong-flavor baijiu were completed. Functional enhanced leaven was developed, and corporate standards for finished strong-flavor baijiu and other products were formulated. | To develop functional leaven according to different quality indicator requirements based on functional leaven-marking microorganisms and key gene expression regulation, systematically evaluate the efficacy of leaven and optimize the process. | Improve the leaven and baijiu quality and enhance the Company's core competitiveness. |
| High-value Patent Incubation Center Project of Luzhou Laojiao | The project is to implement national standards for intellectual property management, and achieve efficient management of the Company in the creation, application and protection of intellectual property. An all-round layout of intellectual property is | The Company has strengthened the close integration of intellectual property creation and protection with the whole process of technological innovation, enhanced the creation of intellectual property at key processes, and formed a series of high-value patent achievements. Its invention patents won the first prize | To pass the "certification of intellectual property management standard" and enhance the awareness of intellectual property creation and protection of all staff. To strengthen the exploration of high-value patents | Improve the Company's intellectual property offensive and defensive capabilities, and become a model and leader in terms of intellectual property work. |
| made around the core key technologies of the industrial chain to promote the creation of high-quality patents and build a patent pool for core technologies. | of Sichuan Patent Award. The certification of enterprise intellectual property management standard has been conducted, an intellectual property management system has been established and improved, and a number of normative documents have been formulated and operated effectively. The Company has successively passed the review of national intellectual property demonstration enterprises and the certification of intellectual property management standard. | and strengthen the operation and protection of high-value patents. | ||
| Establishment of Sichuan Innovation Center for Solid-state Brewing Technologies | The Company took the lead to jointly build the Sichuan Innovation Center for Solid-state Brewing Technologies with several universities and institutes, aiming to overcome a batch of core technological challenges in solid-state brewing and resolve the major problem of "large scale but weak capacity" faced by the solid-state brewing sector. | The Company has developed and improved the policy system for the Innovation Center, perfected the infrastructure of the Innovation Center, and continued to carry out solid-sate brewing technology research, industry exchanges, result transformation and talent training. Innovative resources in the solid-sate brewing sector were gathered to form a "Solid-state Brewing Technology Innovation Alliance in the Chengdu-Chongqing Twin City Economic Circle". More than 50 member enterprises have been absorbed and a meeting of the Alliance Council is in preparation. | To create an innovation alliance in the solid-sate brewing sector, make breakthroughs in core key technologies in the solid-sate brewing sector, and form a science and technology innovation center with national influence. | Successfully build a technological innovation platform, thereby improving the Company's scientific and technological innovation capabilities and level. |
| A Study on the Optimization of Key Intelligent Equipment and the System Control for Brewing | By applying modern technologies such as intelligent sensing, image recognition, spectral technology and bio-chips, the project aims to develop core technologies for each link of brewing production, including fermentation, vinasse-based ingredient making, distillation of grains in retorts and | The Company carries out industry-university-research cooperation with universities and research institutes in the field of intelligent brewing, deeply analyzes traditional production processes and fermentation principles, innovatively applies simulation technology, automation technology, online testing, industrial robots, big data analysis, | To build an intelligent brewing demonstration production line. | Level up the Company's intelligent brewing and promote the transformation and upgrading of the traditional brewing industry. |
| baijiu selection, and build intelligent brewing production lines with independent optimization, production decision-making and execution capabilities to comprehensively upgrade the solid-state brewing technologies in the baijiu industry. | intelligent decision-making and other technologies to the brewing engineering renovation project of Luzhou Laojiao, breaks through the key bottleneck of intelligent brewing technology, and forms the first intelligent baijiu brewing demonstration solution for the whole brewing process in the industry. The project results were appraised by an expert committee with Academician Sun Baoguo as the chairman as "international leading level" and won the First Prize of 2022 Sichuan Science and Technology Progress Award. | |||
| Construction of the Brewing Microbial Resources and Data Platform | The project aims to carry out collection of brewing microbial resources, rapid isolation, authentication, review and transfer of microbial resources in the brewing process of baijiu and development of excellent strains for industrial use, establish a brewing microbial strain library and related enzymology library, and promote the protection, sharing and sustainable utilization of brewing microbial resources. | The Company carries out industry-university-research cooperation with universities, and has screened and obtained a series of new species and key functional microorganisms in the pit mud based on the analysis of the metabolic basics of the microbial flora of the 400-year-old national treasure fermentation pit, analyzed their brewing performance and applied them to brewing production, which has strongly improved the sensory quality and quality of the base baijiu. The relevant achievements have won the First Prize of 2022 Sichuan Patent Award and the First Prize of Science & Technology Progress Award of China Food Industry Association. | To establish a brewing microbial strain bank of a certain scale, which can achieve long-term safe preservation of strains and is supplemented by special information technology to manage strain information. | Master the core resources of baijiu brewing microorganisms and enhance the Company's ability to protect and utilize brewing microbial resources. |
Information about R&D personnel
| 2022 | 2021 | YoY Change | |
| Number of R&D personnel | 480 | 494 | -2.83% |
| R&D personnel as % of total employees | 13.31% | 14.39% | -1.08% |
| Educational backgrounds of R&D personnel | |||
| Bachelor’s degree | 320 | 326 | -1.84% |
| Master’s degree | 133 | 120 | 10.83% |
| Doctoral degree (including postdoctoral workstations) | 27 | 23 | 17.39% |
| Age structure of R&D personnel | |||
| Below 30 | 218 | 220 | -0.91% |
| 30~40 | 219 | 210 | 4.29% |
Information about R&D investments
| 2022 | 2021 | YoY Change | |
| R&D investments (CNY) | 206,248,486.57 | 169,125,528.48 | 21.95% |
| R&D investments as % of operating revenues | 0.82% | 0.82% | 0.00% |
| Capitalized R&D investments (CNY) | 0.00 | 0.00 | 0.00% |
| Capitalized R&D investments as % of total R&D investments | 0.00% | 0.00% | 0.00% |
Reason for any significant change in the composition of R&D personnel and the impact? Applicable ? N/A
Reason for any significant YoY change in the percentage of the R&D investments in the operatingrevenues? Applicable ? N/A
Reason for any sharp variation in the percentage of the capitalized R&D investments and rationale? Applicable ? N/A
4.5. Cash flows
Unit：CNY
| Item | 2022 | 2021 | YoY Change |
| Subtotal of cash inflows from operating activities | 26,877,272,861.82 | 23,520,677,136.09 | 14.27% |
| Subtotal of cash outflows from operating activities | 18,614,624,592.10 | 15,822,029,031.58 | 17.65% |
| Net cash flows from operating activities | 8,262,648,269.72 | 7,698,648,104.51 | 7.33% |
| Subtotal of cash inflows from investing activities | 2,243,596,415.18 | 41,893,415.77 | 5,255.49% |
| Subtotal of cash | 4,117,450,731.91 | 2,719,942,312.51 | 51.38% |
| outflows from investing activities | |||
| Net cash flows from investing activities | -1,873,854,316.73 | -2,678,048,896.74 | |
| Subtotal of cash inflows from financing activities | 5,372,133,945.09 | 8,305,794.84 | 64,579.35% |
| Subtotal of cash outflows from financing activities | 7,450,522,397.49 | 3,190,924,317.15 | 133.49% |
| Net cash flows from financing activities | -2,078,388,452.40 | -3,182,618,522.31 | |
| Net increase in cash and cash equivalents | 4,326,477,650.04 | 1,834,333,879.02 | 135.86% |
Explanation of why the data above varied significantly? Applicable ? N/ANet cash flows from investing activities increased by CNY 804,194,580.01 year-on-year, mainly dueto the decreased cash paid to acquire and construct fixed assets, intangible assets and other long-term assets in the current period.Net cash flows from financing activities increased by CNY 1,104,230,069.91 year-on-year, mainly dueto the receipt of bank loan in the current period.
Explanation of main reasons leading to the material difference between net cash flows from operatingactivities during the reporting period and net profit for the year? Applicable ? N/A
5. Analysis of non-core business
? Applicable ? N/A
6. Assets and liabilities
6.1. Significant change of asset items
Unit：CNY
| At the end of 2022 | At the beginning of 2022 | Change in percentage | Reason for any significant change | |||
| Amount | As % of total assets | Amount | As % of total assets | |||
| Cash and cash equivalents | 17,757,528,211.25 | 34.56% | 13,513,494,580.56 | 31.27% | 3.29% | |
| Accounts receivable | 5,939,420.78 | 0.01% | 1,628,248.55 | 0.00% | 0.01% | |
| Inventories | 9,840,742,374.85 | 19.15% | 7,277,573,166.80 | 16.84% | 2.31% | |
| Investment property | 39,149,454.22 | 0.08% | 0.08% | |||
| Long-term equity investments | 2,667,500,553.17 | 5.19% | 2,626,744,236.25 | 6.08% | -0.89% | |
| Fixed assets | 8,856,258,598.78 | 17.23% | 8,089,487,274.39 | 18.72% | -1.49% | |
| Construction in progress | 808,919,047.21 | 1.57% | 1,259,845,487.50 | 2.92% | -1.35% | |
| Right-of-use assets | 39,952,525.63 | 0.08% | 52,714,810.04 | 0.12% | -0.04% | |
| Contract liabilities | 2,566,374,718.76 | 4.99% | 3,510,110,701.25 | 8.12% | -3.13% | |
| Long-term loans | 3,179,600,000.00 | 6.19% | 6.19% | Mainly due to the receipt of bank loan in the current period | ||
| Lease liabilities | 29,096,969.66 | 0.06% | 40,667,668.08 | 0.09% | -0.03% |
Whether overseas assets account for a larger proportion in total assets? Applicable ? N/A
6.2. Assets and liabilities measured at fair value
? Applicable □ N/A
Unit：CNY
| Item | Opening balance | Changes in fair value through profit or loss | Changes in cumulative fair value recorded into equity | Provision for impairment | Amount of purchase | Amount of sale | Other changes | Closing balance |
| Financial asset | ||||||||
| 1.Held-for-trading financial assets (exclusive of derivative financial assets) | 706,352,241.79 | -12,023,622.50 | 2,500,000,000.00 | 2,120,861,838.92 | 1,073,466,780.37 | |||
| 4.Investments in other equity instruments | 363,312,120.43 | 231,164,476.88 | 489,371,388.31 | 542,285,380.80 | 25,000.00 | 1,136,736,978.11 | ||
| 5. Accounts receivables financing | 4,757,631,778.64 | -174,279,275.27 | 4,583,352,503.37 | |||||
| Subtotal of financial assets | 5,827,296,140.86 | 219,140,854.38 | 489,371,388.31 | 3,042,285,380.80 | 2,120,886,838.92 | -174,279,275.27 | 6,793,556,261.85 | |
| Investment property | 39,149,454.22 | 39,149,454.22 | ||||||
| Total | 5,827,296,140.86 | 219,140,854.38 | 489,371,388.31 | 3,042,285,380.80 | 2,120,886,838.92 | -135,129,821.05 | 6,832,705,716.07 | |
| Financial liability | 0.00 | 0.00 | ||||||
Whether measurement attribution of main assets changes significantly in this year?Yes ? No
6.3. Restricted asset rights as of the end of this reporting period
| Item | Closing balance | Reason |
| Other cash and cash equivalents (CNY) | 10,000,000.00 | Bank guarantees |
| Bank deposits (CNY) | 17,339,936.14 | Accrued interest on term deposits |
| Bank deposits (CNY) | 1,181,683.24 | Frozen by court of law |
| Total | 28,521,619.38 |
Note 1: According to the civil ruling issued by People's Court of Jiangyang District, Luzhou City,Sichuan Province, a total of CNY 516,806.00 bank deposits of Brewing Company, a subsidiary of theCompany, were frozen in accordance with laws for the case of contractual dispute. The first trial ofthe relevant case has been decided on 12 January 2023, based on which Brewing Company was notrequired to pay the relevant liabilities.Note 2: According to the civil ruling issued by People's Court of Dongchangfu District, Liaocheng City,Shandong Province, a total of CNY 664,877.24 bank deposits of Boda Marketing Company, asubsidiary of the Company, were frozen in accordance with laws for the case of contractual dispute.As of 31 December 2022, the case was not decided. Based on the explanation issued by the third-party law firm, it was predicted that the probability of the rejection of the claims of the plaintiff byPeople's Court was over 60%.
7. Investment
7.1. Total investment
? Applicable ? N/A
| Investment made in the reporting period (CNY) | Investment made in the prior year (CNY) | YoY change |
| 4,633,852,571.05 | 1,781,224,057.98 | 160.15%1 |
Note 1: Mainly due to the purchase of collective asset management plan product from securities firmin the current period.
7.2. Significant equity investment made in the reporting period? Applicable ? N/A
7.3. Significant ongoing non-equity investment in the reporting period
? Applicable □ N/A
Unit: CNY
| Item | Investment form | Whether it is a fixed asset | Industry of the investment | Amount of input in the reportin | Accumulated actual input | Capital source | Project progress | Projected income | Accumulated actual income | Reasons for not meetin | Date of disclosure | Disclosure index (if any) |
| investment | project | g period | amount by the end of the reporting period | by the end of the reporting period | g the schedule and projected income | (if any) | ||||||
| Luzhou Laojiao Technical Upgrade Project of Intelligent Brewing (Phase I) | Self-built | Yes | Baijiu | 583,300,245.67 | 583,300,245.67 | Self-financing | 1.00% | 0.00 | 0.00 | N/A | 13 July 2022 | Announcement No. 2022-24 on the Implementation of Luzhou Laojiao Technical Upgrade Project of Intelligent Brewing (Phase I) by Subsidiary on http://www.cninfo.com.cn/ |
| Total | -- | -- | -- | 583,300,245.67 | 583,300,245.67 | -- | -- | 0.00 | 0.00 | -- | -- | -- |
7.4. Financial assets investment
7.4.1. Securities investment
? Applicable □ N/A
Unit: CNY
| Category of securities | Stock code | Abbreviation of securities | Initial investment cost | Accounting measurement model | Beginning book balance | Changes in fair value recognized in profit or loss | Changes in the cumulative fair value recorded into equity | Amount of purchase | Amount of sale | Profit and loss during the reporting period | Closing book balance | Accounting item | Capital source |
| Domestic and foreign stock | 601211 | GTJA | 12,719,156.76 | Fair value measurement | 210,690,476.31 | -50,641,087.10 | 147,330,232.45 | 8,008,357.96 | 160,049,389.21 | Investments in other equity instruments | Own fund | ||
| Domestic and foreign stock | 002246 | SNC | 1,030,000.00 | Fair value measurement | 15,963,896.54 | -1,031,946.30 | 13,901,950.24 | 70,359.97 | 14,931,950.24 | Investments in other equity instruments | Own fund |
| Domestic and foreign stock | 01983 | LZBANK | 51,120,000.00 | Fair value measurement | 102,174,621.71 | 17,983,771.01 | 69,038,392.72 | 120,158,392.72 | Investments in other equity instruments | Own fund | |||
| Domestic and foreign stock | 01880 | CTG Duty-Free | 542,285,380.80 | Fair value measurement | 264,853,739.27 | 264,853,739.27 | 542,285,380.80 | 807,139,120.07 | Investments in other equity instruments | Own fund | |||
| Total | 607,154,537.56 | -- | 328,828,994.56 | 231,164,476.88 | 495,124,314.68 | 542,285,380.80 | 0.00 | 8,078,717.93 | 1,102,278,852.24 | -- | -- | ||
7.4.2. Derivative investment
□Applicable ? N/A
No such cases in the reporting period
7.5. Use of funds raised
? Applicable ? N/A
7.5.1. General use of funds raised
? Applicable □ N/A
Unit：CNY 10,000
| Year | Method | Total amount of funds raised | Total amount of raised funds used in the reporting period | Accumulated amount of raised funds used | Total amount of re-purposed funds raised in the reporting period | Total amount of accumulated re-purposed funds raised | Accumulated re-purposed funds raised as % of total funds raised | Total amount of unused funds raised | Purpose and direction of unused funds raised | Amount of funds raised idle for more than two years |
| 2019 | Public offering of corporate bond | 249,000 | 0 | 253,081.84 | 0 | 0 | 0.00% | 0 | N/A | 0 |
| 2020 | Public offering of corporate bond | 149,400 | 50,443.76 | 86,104.22 | 0 | 0 | 71,435.67 | Deposited in special account for raised funds | 0 | |
| 2022 | Public offering of corporate bond | 149,880 | 149,880 | 149,880 | 0 | 0 | 0.00% | 0 | N/A | 0 |
| Total | -- | 548,280 | 200,323.76 | 489,066.06 | 0 | 0 | 0.00% | 71,435.67 | -- | 0 |
| Notes for general use of funds raised | ||||||||||
The total amounts of used and unused funds raised include interest on the funds.
7.5.2. Fund raised for committed projects
? Applicable □ N/A
Unit：CNY 10,000
| Committed investment projects and direction of over-raised funds | Whether the project has been changed (including partial change) | Total amount of funds raised for committed investment | Adjusted Investment total amount (1) | Investment amount in the reporting period | Accumulated input by the end of the reporting period (2) | Investment progress by the end of reporting period (3)＝(2)/(1) | Date of the projects reach the working condition for their intended use | Realized benefits during the reporting period | Whether the expected benefits have been achieved | Whether the feasibility of the project has changed significantly |
| Committed investment projects | ||||||||||
| Technical Renovation Project of Brewing (Phase II) | No | 398,400 | 398,400 | 45,708.42 | 313,928.63 | 85.14% | 30 June 2021 | N/A | Yes | No |
| Project of Intelligent Upgrading and Building of the Information Management System | No | 4,735.34 | 8,233.89 | N/A | N/A | No | No | |||
| Project of Acquiring Sealing Equipment for the Cellar of Huangyi Brewing Base | No | 0 | 12,043.3 | 30 June 2021 | N/A | Yes | No | |||
| Project of Acquiring Accessory Equipment for Leaven Making for Huangyi Brewing Base | No | 0 | 4,980.25 | 30 June 2021 | N/A | Yes | No | |||
| Subtotal of committed investment projects | -- | 398,4001 | 398,400 | 50,443.76 | 339,186.07 | -- | -- | N/A | -- | -- |
| Use of over-raised funds | ||||||||||
| None | ||||||||||
| Total | -- | 398,400 | 398,400 | 50,443.76 | 339,186.07 | -- | -- | N/A | -- | -- |
| Explain project by project the | N/A | |||||||||
| situation and reason for not reaching plan progress or expected benefits (including reason for inputting “N/A” for “Whether the expected benefits have been achieved”) | |
| Significant changes of project feasibility | N/A |
| Amount, purpose and progress of over-raised funds | N/A |
| Change of implementation site of investment projects | N/A |
| Adjustment of the implementation mode of raised funds investment projects | N/A |
| Situation of advance investment and replacement | Applicable |
| On 14 May 2019, the Company held the First Extraordinary General Meeting of Shareholders of 2019, which considered and approved the Proposal on Requesting the Company’s General Meeting of Shareholders to Fully Authorize Chairman of the Board or Other Personnel Authorized by the Board to Go Through Procedures for the Public Offering of Corporate Bond. According to the Proposal, in the event of inconsistency between the payment of the raised funds and the progress of the project implementation, the Company may make advance investments using other funds (including self-owned funds, bank project loans, etc.) according to the actual situation, and replace fund investment other than capital funds when the raised funds are in place. As of 31 December 2022, the Company had replaced advance investments of self-pooled funds of CNY 573,178,496.64 using the raised funds. | |
| Idle raised funds used for temporary supplementary liquidity | N/A |
| Amount and reason for surplus of funds raised | N/A |
| Purpose and whereabouts of unused funds raised | The idle raised funds are deposited in the special account No. 9550880046723000135 for raised funds in the Chengdu Branch of China Guangfa Bank Co., Ltd., the special account No. 517517460013000000860 for raised funds in the Luzhou Branch of Bank of Communications Co., Ltd., and the special account No. 631395395 for raised funds in the Chengdu Branch of China Minsheng Banking Corp., Ltd. |
| Problems and other situation when raised funds are used and disclosed | N/A |
Note 1: The subtotal of funds raised for committed projects was CNY 3,984 million, which was thecombined amount of CNY 4,000 million (CNY 2,500 million of corporate bonds issued in August 2019plus CNY 1,500 million of corporate bonds issued in March 2020) minus the total issuance costs ofCNY 16 million.
Note 2: Because there are uncertainties in the approval and issue time for bond, in order to ensuresmooth progress of the projects and protect the interests of the Company’s shareholders, theinvestment sequence and specific amounts of the corresponding raised funds should be determinedby the Chairman of the Board as authorized by the general meeting of shareholders or other personsas authorized by the Board of Directors within the scope of the four raised funds investment projectsaccording to the actual needs, provided that the capital funds for each project is no less than 20% ofthe total investment.
Note 3: As of 31 December 2022, the Project of Intelligent Upgrading and Building of the InformationManagement System was in the process.
Note 4: These raised funds investment projects have helped further expand the Company’sproduction and sales, and increase its comprehensive competitiveness. The economic benefits ofthese projects cannot be measured separately.
7.5.3. Re-purposed funds raised
? Applicable ? N/ANo such cases in the reporting period
8. Sale of major assets and equity interests
8.1. Sale of major assets
? Applicable ? N/ANo such cases in the reporting period.
8.2. Sale of major equity interests
? Applicable ? N/A
9. Analysis of major subsidiaries
? Applicable ? N/AMain subsidiaries and joint companies with an over 10% influence on the Company’s net profit
Unit：CNY
| Company name | Company type | Business scope | Registered capital | Total assets | Net assets | Operating Revenue | Operating profit | Net profit |
| Luzhou Laojiao Sales Co., Ltd. | Subsidiary | Luzhou Laojiao series unified package Baijiu sales | 100,000,000.00 | 7,798,894,814.04 | 2,282,135,373.83 | 23,969,748,769.23 | 10,532,594,410.23 | 7,904,562,366.561 |
Note 1: Net profit increased 30.07% year on year, mainly due to the increased sales revenue frombaijiu, leading to a corresponding increase in profit.
Acquisition and disposal of subsidiaries during the reporting period
□ Applicable ? N/A
Notes for major holding companies and joint stock companiesThere were no major holding companies or joint stock companies during the reporting period of whichinformation shall be disclosed.
10. Structured entities controlled by the Company
? Applicable ? N/A
11. Outlook for the future development of the Company
11.1. Industry landscape and trends
A. According to the data released by the National Bureau of Statistics, total production of brewedbaijiu by baijiu producers above the designated size was 6.7124 million kl between January andDecember 2022, down 5.58% year on year; total sales revenues reached CNY 662.645 billion, up
9.64% year on year; total profits of CNY 220.172 billion were realized, up 29.36% year on year.Though the total consumption in the baijiu industry has been shrinking in recent years, the industryconcentration continues to rise, with a clear trend towards high-quality development of the baijiuindustry.
B. With the recovery of the consumption and the rebound of residents' income, the baijiu industry hasopened a new cycle and entered the era of giant competition. The winning elements of thecompetitive landscape have changed, challenging the competitive ability of all systems and thesystematic promotion ability of enterprises. Customer value creation and operational efficiencyimprovement have become the base point for marketing innovation.C. Digital and intelligent technologies have been fully integrated into the production, supply,circulation, communication and consumption of the baijiu industry, forming a new industrial ecologywith technological and digital empowerment, integrated traditional and intelligent brewing techniques,and combined offline and online channels.
11.2. The Company’s development strategy
11.2.1. Development opportunities in the future
A. The value of famous baijiu has been highlighted, consumers' demand for high quality baijiu hasincreased, the proportion of high-end baijiu consumption has continued to rise, and the advantages ofproduction regions and brands of famous baijiu will be further enhanced.B. With social progress, economic development and consumer upgrade, new industries and modelsare emerging. Chinese baijiu, with its fully independent intellectual property and independent pricingrights, has a good opportunity for innovation and breakthrough.C. Domestic industrial policies favorable to the development of baijiu brands continued to beintroduced, which not only enhanced the confidence of consumers and investors in baijiu, but alsoprovided strong momentum for the high-quality development of baijiu. Luzhou Laojiao, as a leadingenterprise in China's baijiu industry, embraces a valuable opportunity of strategic development.D. In recent years, the Company has developed benignly and expanded its operation scale. TheHuangyi Brewery Eco-Park with solid-state baijiu brewing scale, leaven production capacity andintelligent brewing level has been built, and the layout of capacity guarantee has been completedahead of schedule. The Company enhanced the overall corporate governance, making itsmanagement more powerful, scientific, systematic and pragmatic. In the accelerating reshuffle of thebaijiu industry, Luzhou Laojiao has the leading edge and strong strength of maintaining stability whileseeking progress and achieving leapfrog development.
11.2.2. Possible challenges and risks in the future
A. Macroeconomic risk: The global economy will continue to face multiple pressures in 2023. Theongoing Russia-Ukraine conflict has further intensified the impact on the global economy, withsuccessive bank crashes in Europe and the US, which may trigger a contraction in monetary policiesand recession, thereby adversely affecting the domestic consumer market.B. Market competition risk: China's population is experiencing negative growth again, the consumermarket size tends to shrink, and consumption upgrade and downgrade coexist. As the marketconcentration continues to rise, the industry will gradually enter the existing competition stage, andcompetition among baijiu enterprises will become increasingly intense. To this end, the Company willfirmly insist on its strategic goals and seize opportunities to achieve high-quality leapfrogdevelopment.
11.2.3. The Company's "14th five-year" development strategy
No change occurred to the Company’s "14th five-year" development strategy. For details, see the2021 Annual Report.
11.3. Completion of the business plan in 2022
For the reporting period, operating revenue amounted to CNY 25.124 billion, up 21.71% year on year;and the net profit attributable to the shareholders of the listed company reached CNY 10.365 billion,up 30.29% year on year. The Company has successfully completed its business target “to achieve ayear-on-year increase in operating revenue by at least 15%" as set by the Board of Directors at thebeginning of the year.
11.4. Business plan in 2023
According to the Outline of Production and Operation in 2023 reviewed and approved by the Board ofDirectors, the Company will closely center on the development theme of "promoting reform, enhancingcollaboration, focusing on main areas and achieving leapfrog development", and strive to achieve ayear-on-year increase in operating revenue by at least 15% (The business plan in 2023 is formulated bythe Company according to the 14th five-year strategic plan and based on its business capabilities. Itdoes not represent the Company's profit forecast for 2023, and is not a commitment by the Company.Whether it can be achieved depends on many factors such as changes in market conditions and effortsof the operation team. There are great uncertainties. Investors are kindly reminded to pay specialattention).
The main measures are as follows:
A. Promote reform and comprehensively enhance endogenous driving forceReform of idea and work style led by breakthrough and progress. The Company must makeefforts to eliminate three harmful ideas and work styles, namely the ideas and work styles ofpessimism and fear, complacency, and bureaucracy.Reform of the governance model themed by overlapping strengths. The Company will advancethe reform and optimization of the control model, organizational structure and operational mechanismin an orderly manner, continuously enhance collaborative management, and strive to achieveconvergence effects in business management, industrial layout, quality and efficiency, innovationcapability and brand value.Reform of the top-level architecture guaranteed by digital and intelligent support. TheCompany will effectively plan and design the top-level architecture of digitalization and intelligence,promote the digital upgrade of products, consumers, channel customers, employees andorganizations, and financial services, and advance the integration of order, capital, information,logistics and administration.Reform of internal procurement control driven by efficiency improvement. An internal controland management system for the whole procurement process will be established to lay a solidfoundation for the Company to keep pace with and even seize the opportunity in the fierce marketcompetition.
B. Enhance collaboration and comprehensively improve enterprise effectiveness
Enhance strategic collaboration. The Company will develop a three-year development plan, andadhere to the "one map" for current and long-term development, the "one chessboard" for the wholeCompany and the "one network" of national market to complete sales tasks with high quality.Enhance organizational collaboration. The Company will accelerate the development of a modernmanagement model, comprehensively break down organizational barriers, improve organizationaleffectiveness and form an organizational operating system with rapid response, clear tasks andstandardized actions.Enhance PR collaboration. In accordance with the general idea of "overall thinking, forward-lookingplanning, substantial results and collaboration", a three-dimensional and long-term PR system thatcovers all staff will be built to constantly inject power for sales development.
C. Focus on main areas and comprehensively win the battle.Focus on sales breakthrough. The Company will seize core resources, master core tactics, andadhere to the path of brand-leading marketing. It will build core markets, gather core strength,promote national development strategies, advance innovation in product lines and models, and createmore growth poles for Luzhou Laojiao.Focus on the development of a brand culture. The Company will create a pilgrimage site ofbaijiu in the world, seize the first and only brand promotion resources, promote the transformation of
traditional publicity to a new traffic matrix, and build up a new media matrix for Luzhou Laojiaothrough content and form innovation to form the main entrance for converging traffic.Focus on quality assurance. Based on the new "1 + 2 + N" capacity pattern, the Company will insiston quality as life, constantly improve the quality traceability system covering the whole life cycle ofproducts, strengthen scientific and technological research and development and transformation ofachievements, and build a leading technological innovation highland in the industry.
D. Achieve leapfrog development and take the lead in seizing the development highlandAchieve leapfrog development in targeted objectives. The company will make leapfrogbreakthrough in the National Cellar series and maintain high-speed growth. More efforts and anotherbreakthrough will be made for the Luzhou Laojiao series. The marketing layout and marketbreakthrough in the innovation sector will be accelerated to achieve objectives as soon as possible.Achieve leapfrog development in the leadership of party building. The Company will enhanceparty building in terms of politics, ideology, organization, work style and discipline, comprehensivelystrengthen scientific party building, and continue to promote the development of trade unions, theCommunist Youth League and the United Front Work, to form an inspiring pattern that integratesenergy and wisdom.Achieve leapfrog development in talent improvement. The Company will make more efforts in thescale, structure and quality of talent to raise its human-efficiency ratio to a higher level. Bycontinuously enriching the talent ladder, optimizing the talent structure, and improving materialincentives, spiritual incentives and growth incentives, the Company will further stimulate theendogenous driving force for enterprise development.
12. Visits paid to the Company for purposes of research,communication, interview, etc. in the reporting period? Applicable ? N/A
| Date of visit | Place of visit | Way of visit | Type of visitor | Visitor | Main inquiry information and materials provided | Index to main inquiry information |
| 13 May 2022 | Company Headquarters | Field survey | Institution | Institutional investor | Company performance | http://www.cninfo.com.cn/ |
| 13 May 2022 | Company Headquarters | Other | Other | All investors | Company performance | http://www.cninfo.com.cn/ |
| 29 June 2022 | Company Headquarters | Other | Other | Institutional and individual investors and media | Industry trends and company performance | http://www.cninfo.com.cn/ |
| 16 August 2022 | Company Headquarters | Other | Other | Institutional and individual investors and media | Industry trends and company performance | http://www.cninfo.com.cn/ |
| 16 September 2022 | Company Headquarters | Other | Other | All investors | Industry trends and company performance | http://www.cninfo.com.cn/ |
| 8 November 2022 | Company Headquarters | Field survey | Institution | Institutional investor | Company performance | http://www.cninfo.com.cn/ |
Section IV Corporate Governance
1. Basic situation of corporate governance
Since it was listed, in accordance with the Corporate Law, the Securities Law, The Listed CompanyGovernance Standards and other laws, administrative regulations and departmental rules andnormative documents, the Company has constantly perfected corporate governance structure,standardized its operation, established the rules and system on the basis of the Company's articles ofassociation whose main framework is the rules of procedure of the shareholders' general meeting,rules of procedure of the board of directors and rules of procedure of the board of supervisors, whichis formed the management system whose main structure is the shareholders meeting, board ofdirectors, board of supervisors and management. During the reporting period, the Company won anumber of honors and awards, including “The 24
th
Golden Bull Awards—Best Investment ValueAward and Golden Bull Board Secretary Award”, “The 13
th
Tianma Awards—Best Investor RelationsAward”, “The 16
th
Awards of the Value of Listed Companies in China—Top 100 Main Board ListedCompanies by Value, Outstanding Management Team of the Year, and Sunshine Board Secretary”,“Listed Companies Market Capitalisation Ranking—Top 50 Most Popular Listed Companies amongInstitutions”, “Top 10 Influential Listed Companies of the Year, and Value Focus Listed Company ofthe Year”, “The List of Gold Medal Companies—Investment Value Top List”, and “China Associationfor Public Companies—Listed Company Board Office Best Practice”.
Any incompliance with the applicable laws and administrative regulations, as well as regulationsrelated to the governance of listed companies issued by the CSRC? Yes ? NoThere is no incompliance with the applicable laws and administrative regulations, as well asregulations related to the governance of listed companies issued by the CSRC.
2. Independency of assets, personnel, finance, organizations andbusinesses which are separated from the controlling shareholder andthe actual controllerThe Company has an independent and complete production and operation system and independentdecision-making ability. There is no horizontal competition between the Company and the controllingshareholders and its subsidiaries. The Company has daily affiliated transactions with the controllingshareholders and its subsidiaries. Such daily affiliated transactions belong to the need of rationalallocation of resources and do not affect the independence of the Company. For affiliatedtransactions, the Company has strictly fulfilled the relevant decision-making procedures andinformation disclosure obligations, and implemented the system of Non-executive directors' priorexamination and avoidance system of related directors (shareholders).
2.1 In the aspect of assets
Asset integrity. There are clear ownership and independency of the Company's assets invested bycontrolling shareholders. The Company has an independent and complete production, supply, salessystem and auxiliary production system and supporting facilities. The industrial property rights,trademarks and non-patented technology and other intangible assets are owned by the Company.There is no situation that the controlling shareholders occupy and transfer the assets of the company.
2.2. In the aspect of business
Business apart. The Company is totally independent in the operation, production and sales of baijiuseries of “Luzhou Laojiao” and “National Cellar 1573”. It has the ability to operate independently in themarket. The board of directors and the management can independently make production andoperation decisions within the corresponding authority.
2.3 In the aspect of personnel
The Company has built independent labor management, personnel management and salarymanagement. The Company has established a relatively complete labor management system andpost responsibility system. Meanwhile, the Company's senior management personnel all receivesalary in the Company, but not at the controlling shareholders.
2.4 In the aspect of organization
Organization independence. The Company has independent production management organizationand system, independent office and production management place, and independent managementorganization, functional organization and branch.
2.5 In the aspect of finance
Financial independence. The Company has completed and independent financial department.Independent accounting system and financial management are established. The Company separatelysets bank accountants, conducts external settlement and pays taxes according to law.
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 | Type | Investor participation ratio | Convened date | Disclosure date | Resolutions |
| 2021 Annual General Meeting of Shareholders | General Meeting of Shareholders | 63.73% | 29 June 2022 | 30 June 2022 | Announcement on Resolutions of The 2021 Annual General Meeting of |
| Shareholders Announcement No: 2022-22 (http://www.cninfo.com.cn/) | |||||
| The First Special Meeting of Shareholders of 2022 | Special Meeting of Shareholders | 62.15% | 16 August 2022 | 17 August 2022 | Announcement on Resolutions of The First Special Meeting of Shareholders of 2022 Announcement No: 2022-39 (http://www.cninfo.com.cn/) |
4.2. Special meetings of shareholders convened at the request of preferredshareholders with resumed voting rights?Applicable ? N/A
5. Directors, supervisors, and senior management
5.1 General information
| Name | Title | Incumbent/ Former | Gender | Age | Period of service | Shares held by the beginning of the reporting period (share) | Shares increased during the reporting period (share) | Shares decreased during the reporting period (share) | Other increase/ decrease (share) | Shares held by the end of the reporting period (share) | Reason for share changes |
| Liu Miao | Chairman of the board | Incumbent | Male | 53 | 2015.6.30-2024.6.29 | 192,187 | 95,900 | 0 | 0 | 288,087 | Restricted share incentive plan |
| Lin Feng | Director, General manager | Incumbent | Male | 49 | 2015.6.30-2024.6.29 | 0 | 95,900 | 0 | 0 | 95,900 | Restricted share incentive plan |
| Wang Hongbo | Director, Deputy general manager | Incumbent | Male | 59 | 2015.3.6-2024.6.29 | 0 | 76,700 | 0 | 0 | 76,700 | Restricted share incentive plan |
| Xiong Pingting | Director, Deputy general manager | Incumbent | Female | 47 | 2021.6.29-2024.6.29 | 0 | 62,800 | 0 | 0 | 62,800 | Restricted share incentive plan |
| Liu Junhai | Non-executive director | Incumbent | Male | 53 | 2018.6.27-2024.6.29 | 0 | 0 | 0 | 0 | 0 | |
| Chen You’an | Non-executive director | Incumbent | Male | 65 | 2021.6.29-2024.6.29 | 0 | 0 | 0 | 0 | 0 | |
| Lyu Xianpei | Non-executive director | Incumbent | Male | 59 | 2021.6.29-2024.6.29 | 0 | 0 | 0 | 0 | 0 | |
| Li | Non- | Incumb | Male | 59 | 2022.6.29- | 0 | 0 | 0 | 0 | 0 |
| Guowang | executive director | ent | 2024.6.29 | ||||||||
| Qian Xu | External director | Incumbent | Male | 59 | 2015.6.30-2024.6.29 | 0 | 0 | 0 | 0 | 0 | |
| Ying Hanjie | External director | Incumbent | Male | 53 | 2016.9.13-2024.6.29 | 0 | 0 | 0 | 0 | 0 | |
| Gong Zhengying | External director | Incumbent | Female | 53 | 2022.6.29-2024.6.29 | 0 | 0 | 0 | 0 | 0 | |
| Yang Ping | Chairman of the Board of Supervisors | Incumbent | Male | 46 | 2021.6.29-2024.6.29 | 0 | 0 | 0 | 0 | 0 | |
| Li Guangjie | Supervisor | Incumbent | Male | 53 | 2018.6.27-2024.6.29 | 0 | 0 | 0 | 0 | 0 | |
| Li Lunyu | Supervisor | Incumbent | Female | 36 | 2021.6.29-2024.6.29 | 0 | 0 | 0 | 0 | 0 | |
| Tang Shijun | Supervisor | Incumbent | Male | 46 | 2022.6.29-2024.6.29 | 0 | 0 | 0 | 0 | 0 | |
| Ou Fei | Supervisor | Incumbent | Male | 37 | 2022.6.29-2024.6.29 | 0 | 0 | 0 | 0 | 0 | |
| Shen Caihong | Deputy general manager | Incumbent | Male | 57 | 2002.6.30-2024.6.29 | 138,375 | 76,700 | 19,500 | 0 | 195,575 | Restricted share incentive plan and shareholding reduction on the open market |
| Xie Hong | CFO | Incumbent | Female | 53 | 2015.3.6-2024.6.29 | 0 | 76,700 | 0 | 0 | 76,700 | Restricted share incentive plan |
| He Cheng | Deputy general manager | Incumbent | Male | 56 | 2015.6.30-2024.6.29 | 0 | 76,700 | 0 | 0 | 76,700 | Restricted share incentive plan |
| Zhang Suyi | Deputy general manager | Incumbent | Male | 51 | 2015.12.29-2024.6.29 | 0 | 76,700 | 0 | 0 | 76,700 | Restricted share incentive plan |
| Li Yong | Deputy general manager, Secretary of the board | Incumbent | Male | 46 | 2021.9.20-2024.6.29 | 0 | 62,800 | 0 | 0 | 62,800 | Restricted share incentive plan |
| Sun Dongsheng | Non-executive director | Former | Male | 64 | 2021.6.29-2022.6.29 | 0 | 0 | 0 | 0 | 0 | |
| Lian Jing | Supervisor | Former | Male | 53 | 2012.6.27-2022.5.28 | 0 | 0 | 0 | 0 | 0 | |
| Guo Shihua | Supervisor | Former | Female | 44 | 2021.6.29-2022.5.28 | 0 | 19,000 | 0 | 0 | 19,000 | Restricted share incentive plan |
| Total | -- | -- | -- | -- | -- | 330,562 | 719,900 | 19,500 | 0 | 1,030,962 | -- |
Whether any director, supervisor or senior management resigned before the expiry of their periods of
service during the reporting period
□ Yes ? No
Changes in directors, supervisors, and senior management? Applicable □ N/A
| Name | Title | Type | Date | Reason |
| Sun Dongsheng | Independent director | Resignation | 2022.6.29 | Voluntary resignation |
| Shen Caihong | Director | Resignation | 2022.5.31 | Voluntary resignation |
| Lian Jing | Supervisor | Resignation | 2022.5.28 | Voluntary resignation |
| Guo Shihua | Supervisor | Resignation | 2022.5.28 | Voluntary resignation |
5.2 Employment information
Professional background, work experience and major duties of current directors, supervisors andsenior management.Mr. Liu Miao, male, born in 1969, MBA of Wright State University in the USA, Master of ChineseBrewing, senior marketing specialist. He used to serve as planning minister, general manager ofSales Company, general manager assistant, and deputy general manager of the Company. Atpresent, he is secretary of the party committee and chairman of the board in Laojiao Group, secretaryof the party committee and chairman of the board in the Company, as well as chairman of the boardin Luzhou Sanrenxuan Liquor Industry Co., Ltd.
Mr. Lin Feng, male, born in 1973, Master degree, senior marketing specialist. He was deputy generalmanager and general manager of Sales Company, director of marketing, director of human resources,chief dispatcher, deputy general manager of the Company. At present, he is deputy secretary of theparty committee, director, and general manager of the Company.
Mr. Wang Hongbo, male, born in 1964, Master degree. He was director and secretary of partycommittee of Luzhou Commerce Bureau, director of Luzhou Liquor Industry Development Bureau,director of Luzhou branch of China council for the promotion of international trade, deputy secretarygeneral, office director of Luzhou Municipal Party Committee and deputy secretary of the partycommittee of the Company. At present, he is member of the party committee, director, and deputygeneral manager of the Company, chairman of the board of Luzhou Laojiao InternationalDevelopment（Hong Kong）Co., Ltd., as well as executive director of Luzhou Laojiao I & E Co., Ltd.
Ms. Xiong Pingting, female, born in 1975, holds a master's degree and the titles of Human ResourceManagement Professional (grade one), Economist, and Political Mentor. Positions previously held byher include Deputy Director and Director of the Office of Luzhou Laojiao Sales Co., Ltd., DeputyDirector of the Office of Jiangyang District People's Government of Luzhou (temporary), DeputyDirector of the Human Resources Department and Corporate Management Department of LuzhouLaojiao Co., Ltd., General Manager of the Brand Operation Department, Director of the Office(concurrently), Secretary of the general Party branch, and Deputy General Manager of LuzhouLaojiao Sales Co., Ltd. Currently, she serves as Member of the Party Committee, Director, Deputy
General Manager, and Chairman of the Labor Union of the Company.
Mr. Liu Junhai, male, born in 1969, holds a Ph.D. degree in law and is a doctoral supervisor.Positions previously held by him include Assistant to the Director and Researcher at the Institute ofLaw of the Chinese Academy of Social Sciences ("CASS"), Professor at CASS, Vice Chairman ofChina Consumers Association, and Deputy Director Researcher at the Planning Committee under theChina Securities Regulatory Commission ("CSRC"). Currently, he serves as Professor at the LawSchool of Renmin University of China, Director at the Institute of Commercial Law of RenminUniversity of China, Arbitrator at China International Economic and Trade Arbitration Commission andBeijing Arbitration Commission (Beijing International Arbitration Center) (concurrently). He has servedas a non-executive director of the Company since June 2018.
Mr. Chen You'an, male, born in 1958, holds an Eng.D. degree in management science andengineering and is a Senior Engineer. He once took a job at government macro regulation agencies,development financing agencies, and local and national sovereign wealth fund agencies. Besides, heserved as Deputy General Manager of Central Huijin Investment Ltd. and Chairman of China GalaxyFinancial Holdings Co., Ltd. and China Galaxy Securities Co., Ltd. (concurrently). Currently, he isIndependent Director of CPIC Fund Management Co., Ltd., Nomura Orient International SecuritiesCo., Ltd., Hexie Health Insurance Co., Ltd., and Tech-bank Food Co., Ltd. He has served as a non-executive director of the Company since June 2021.
Mr. Lyu Xianpei, male, born in 1964, holds a Ph.D. degree in accounting. Positions previously held byhim include Vice Dean at the School of Accounting and Director at the Auditing Department ofSouthwestern University of Finance and Economics. Currently, he serves as Professor and DoctoralSupervisor at Southwestern University of Finance and Economics, Chairman of Sichuan EducationalAudit Society, as well as Independent Director of Sichuan Teway Food Group Co., Ltd., NorthChemical Industries Co., Ltd., and HuangShan NOVEL Co., Ltd. He has served as a non-executivedirector of the Company since June 2021.
Mr. Li Guowang, male, born in 1963, holds a postgraduate degree and is a senior economist. Heonce served as the Deputy Director of the Information Center of the Ministry of Commerce, DeputyGeneral Manager of Futures Brokerage Co., Ltd. under China Banking and Insurance InformationTechnology Management Co., Ltd., General Manager of the Shanghai Securities BusinessDepartment of China Banking and Insurance Information Technology Management Co., Ltd., Directorof the Strategic Development Department of the R&D Center of China Galaxy Securities Co., Ltd.,General Manager of the R&D Center of Shanghai Securities Co., Ltd., Marketing Director of GalaxyAsset Management Co., Ltd., Director of the Research Institute of Hwa Bao Securities Co., Ltd., ChiefEconomist and Director of the Research Institute of Zhongshan Securities Co., Ltd., and ChiefEconomist of Shanghai Dalu Futures Co., Ltd. At present, he is the Deputy Director of the GreenFinance Committee of the Jiangsu Financial Association, part-time professor at the Law School ofShanghai University, special professor at Qinghai Minzu University, member of the Association ofZhejiang Talent in Shanghai, and Director of Shanghai Jiayan Supply Chain Management Co., Ltd.He has served as a non-executive director of the Company since June 2022.
Mr. Qian Xu, Male, born in 1963, PhD. He was general manager and chairman of the board of BeijingEnterprises Real-Estate Group Co., Ltd.. At present, he is chairman of the board and generalmanager of Beijing Enterprises Urban Development Group Co., Ltd., chairman of the board of BeijingProperties （Holdings） Limited (Listed on the Hong Kong Stock Exchange), non-executive directorof CAQ Holdings Limited (Listed on the Australian Stock Exchange). He has served as a director ofthe Company since June 2015.
Mr. Ying Hanjie, Male, born in 1969, Doctor of Biochemistry, professor, and academician of theChinese Academy of Engineering. He was deputy director of Pharmacy and Life Sciences School ofNanjing University of Technology. At present, he is director of National Biochemical EngineeringTechnology Research Center of Nanjing Tech University, chairman of the board of NanjingBiotogether Co., Ltd., director of Nanjing High Tech University Biological Technology ResearchInstitute Co., Ltd., and director of Jiangsu Institute of Industrial Biotechnology. He has served as adirector of the Company since September 2016.
Ms. Gong Zhengying, female, born in 1969, holds a postgraduate degree and is a senior economist.She once served as the Deputy Head of the Open Development and Social System Section ofLuzhou Economic System Reform Commission, Deputy Head and Head of the Enterprise PropertyRights Supervision Section of Luzhou State-owned Assets Supervision and AdministrationCommission, Party Secretary and Chairman of Luzhou Xinglu Asset Management Co., Ltd.,Chairman of Luzhou Parking Lot Infrastructure Investment Co., Ltd., and Executive Director (legalrepresentative) of Luzhou Qihang Parking Lot Construction Investment Co., Ltd. and Luzhou XingluLantian Market Management Co., Ltd. At present, she is a full-time external director of LuzhouLaojiao Group Co., Ltd., Luzhou Aviation Development Investment Group Co., Ltd., SichuanLutianhua Co., Ltd., Luzhou Industrial Development Investment Group Co., Ltd. and Luzhou YunlongAirport Development Co., Ltd. She has served as a director of the Company since June 2022.
Mr. Yang Ping, male, born in 1976, Professor of Engineering, holds a doctoral degree. Positionspreviously held by him include Deputy Director and Director at the National Cellar Workshop Section,Director at the Production and Technology Department, and Deputy General Manager of LuzhouLaojiao Brewing Co., Ltd. Currently, he is Chairman of the Board of Supervisors of the Company, aswell as Secretary of the Party Committee and General Manager of Luzhou Laojiao Brewing Co., Ltd.
Mr. Li Guangjie, male, born in 1969, Master degree, economist. He was manager of PlanningDepartment of the Company, deputy director of Sales Company, manager of Import and Exportcompany, general manager assistant of Sales Company. At present, he is supervisor and deputygeneral manager of Sales Company.
Ms. Li Lunyu, female, born in 1986, holds a university degree as well as is Assistant Political Mentorand Assistant Engineer. Positions previously held by her include Publicity Officer at the Office of theCPC Luzhou Laojiao Committee, Deputy Head and Manager of Tianjin Division of the BusinessDepartment for Luzhou Laojiao Tequ 60 and 80, Secretary of the CPC National Cellar Section Branch
of Luzhou Laojiao Brewing Co., Ltd., Director of the Office of the CPC Luzhou Laojiao BrewingCommittee, and Director of the Discipline Inspection Department and Vice Chairman of the LaborUnion of Luzhou Laojiao Brewing Co., Ltd. Currently, she is Supervisor, Vice Chairman of the LaborUnion, and Director of the Office of the Labor Union of the Company.
Mr. Tang Shijun, male, born in 1976, holds a bachelor's degree and is a senior accountant. He onceserved as the Head of the Finance Department and Director of the Business Finance Center ofLuzhou Laojiao Lundao Liquor Sales Co., Ltd., Audit Manager of Sichuan Balance C.P.A, ChiefController of Shanghai Pharmaceutical (Luzhou) Co., Ltd., Chief Accountant and Director of LuzhouNaxi District State-owned Assets Management Co., Ltd., and Director of the Financing Department ofLuzhou Huixing Investment Group Co., Ltd. At present, he is a part-time external supervisor ofLuzhou Laojiao Group Co., Ltd., Luzhou Public Transport Group Co., Ltd. and Digital LuzhouIndustrial Investment Group Co., Ltd., as well as Manager of the Finance and Asset ManagementDepartment of Luzhou State Owned Capital Operation Management Co., Ltd. He has served as asupervisor of the Company since June 2022.
Mr. Ou Fei, male, born in 1985, holds a bachelor's degree. He once worked in Guizhou RenhuaiFengzhiji Liquor Co., Ltd., Sichuan Dashan Law Firm and Jiangyang District People's Procuratorate,Luzhou City. At present, he is a full-time external supervisor of Sichuan Lutianhua Co., Ltd., LuzhouIndustrial Development Investment Group Co., Ltd., Sichuan Xinhuoju Chemical Co., Ltd. and LuzhouState Owned Capital Operation Management Co., Ltd. He has served as a supervisor of theCompany since June 2022.
Mr. Shen Caihong, Male, born in 1966, Master degree, professor-level senior engineer, one of thefirst batch of representative inheritors of national intangible cultural heritage, one of the first batch of“Master of Chinese Brewing”, and one of the first batch of "Sichuan craftsmen". He was manager ofthe Company’s leaven-making branch, manager of base baijiu company, general manager assistantand director of production department. At present, he is deputy general manager, chief engineer,director of national solid brewing engineering technology research center and chairman of the boardof Luzhou Pinchuang Technology Co., Ltd.
Ms. Xie Hong, female, born in 1969, Master degree, senior accountant, and senior economist. Shewas section chief of Treasury Section of the Finance Bureau, section chief of Non-tax RevenueCollection Management Section, director of Luzhou Municipal Finance Treasury Payment Center,chief accountant of Luzhou Finance Bureau. At present, she is a member of the party committee andCFO of the Company.
Mr. He Cheng, male, born in 1966, Master of Management Economics of Nanyang TechnologicalUniversity, senior engineer, expert who receives special allowances from the State Council, Master ofChinese Baijiu, and Master of Chinese Brewing. He was chief dispatcher of the Company, generalmanager of Brewing Company, as well as director of the business administration department, directorof the human resources department, director of the quality department, and director of the dispatchingcenter of the Company. At present, he is a member of the party committee, deputy general manager
and chief quality officer of the Company.
Mr. Zhang Suyi, male, born in 1971, PhD, professor-level senior engineer, representative inheritor ofSichuan Intangible Cultural Heritage. He was a worker, production team leader and assistantsuperintendent at Brewing Workshop No. 6, vice director and director of Gouchu Center, and deputychief engineer of the Company, as well as deputy general manager, and director of the Baijiu BodyDesign Centre of Brewing Company. At present, he is deputy general manager, director of safety andenvironmental protection, and chief engineer of baijiu body design of the Company.
Mr. Li Yong, male, born in 1977, holds a postgraduate degree and is a brewing engineer. He onceworked in the education sector at the Party and government organizations at the township level aswell as departments at the county and municipal levels. Also, he used to be Director of the GroupOffice of Luzhou Laojiao Group, Director of the General Manager’s Office of the Company, as well asDeputy Secretary of the Party Committee, Secretary of the Party Committee, and Deputy GeneralManager of Sales Company. Currently, he is Deputy General Manager, Secretary of the Board, andmember of the Discipline Inspection Committee of the Company, as well as Chairman of the Board ofLuzhou Laojiao Technology Innovation Co., Ltd.
Position in shareholder-holding companies? Applicable ? N/A
| Name | Name of shareholder-holding companies | Position in shareholder-holding companies | Beginning date of term | Ending date of term | Any remunerations received from shareholder-holding companies |
| Liu Miao | Laojiao Group | Secretary of the party committee, Chairman of the board | 11 March 2022 | No | |
| Gong Zhengying | Laojiao Group | Director | 15 February 2022 | No | |
| Tang Shijun | Laojiao Group | Supervisor | 15 February 2022 | No |
Position in other companies? Applicable ? N/A
| Name | Name of other companies | Position in other companies | Beginning date of term | Ending date of term | Any remunerations received from other companies |
| Liu Junhai | China International Economic and Trade Arbitration Commission, and Beijing Arbitration Commission (Beijing International Arbitration Center) | Arbitrator | |||
| Liu Junhai | Institute of Commercial Law of | Director |
| Renmin University of China | |||||
| Chen You’an | CPIC Fund, Nomura Oriental International Securities Co., Ltd., Hexie Health Insurance Co., Ltd., and Tech-bank Food Co., Ltd. | Non-executive director | |||
| Lyu Xianpei | Sichuan Education and Audit Society | Chairman | |||
| Lyu Xianpei | Sichuan Teway Food Group Co., Ltd., North Chemical Industries Co., Ltd., and HuangShan NOVEL Co., Ltd. | Non-executive director | |||
| Li Guowang | Green Finance Committee of the Jiangsu Financial Association | Vice chairman | |||
| Li Guowang | Law School of Shanghai University | Adjunct professor | |||
| Li Guowang | Qinghai Minzu University | Distinguished professor | |||
| Li Guowang | Association of Zhejiang Talent in Shanghai | Director | |||
| Li Guowang | Shanghai Jiayan Supply Chain Management Co., Ltd. | Director | |||
| Qian Xu | Beijing Enterprises Urban Development Group Co., Ltd. | Chairman of the board, general manager | |||
| Qian Xu | Beijing Properties （Holdings） Limited | Chairman of the board | |||
| Qian Xu | CAQ Holdings Limited. | Non-executive director | |||
| Ying Hanjie | National Biochemical Engineering Technology Research Center of Nanjing University of Technology | Director | |||
| Ying Hanjie | Nanjing Biotogether Co., Ltd. | Chairman of the board | |||
| Ying Hanjie | Nanjing High Tech University Biological Technology Research Institute Co., Ltd., and Jiangsu Institute of Industrial Biotechnology | Director | |||
| Gong Zhengying | Luzhou Aviation Development Investment Group Co., Ltd., Sichuan Lutianhua Co., Ltd., Luzhou Industrial Development Investment Group Co., Ltd., Luzhou Yunlong Airport Development Co., Ltd. | Director | |||
| Tang Shijun | Luzhou Public Transport Group Co., Ltd., Digital Luzhou Industrial Investment Group Co., Ltd. | Supervisor | |||
| Tang Shijun | Finance and Asset Management Department of Luzhou State Owned Capital Operation Management Co., Ltd. | Manager | |||
| Ou Fei | Sichuan Lutianhua Co., Ltd., Luzhou Industrial Investment Group Co., Ltd., Sichuan Xinhuoju Chemical Co., Ltd., Luzhou State | Supervisor |
Owned Capital OperationManagement Co., Ltd.
Punishments imposed in the recent three years by the securities regulators on the incumbentdirectors, supervisors and senior management as well as those who left in the reporting period? Applicable ? N/A
5.3 Remuneration of directors, supervisors and senior managementThe following describes the decision-making procedures, grounds on which decisions are made andactual remuneration payment of directors, supervisors and senior management.
Decision-making procedures for directors, supervisors and senior management: The remuneration ofnon-executive directors, external directors and external supervisors shall be determined by thegeneral meeting of shareholders, and the remuneration of directors, supervisors and seniormanagement who hold positions within the Company shall be determined by relevant rules of SASACof Luzhou and relevant rules of the Company.
Grounds on which decisions are made of directors, supervisors and senior management: Calculateaccording to the assessment index and weight established at the beginning of the year.
Actual remuneration payment of directors, supervisors and senior management: Details refer to“Remuneration of directors, supervisors and senior management during the reporting period”.
Remuneration of directors, supervisors and senior management during the reporting period
Unit: CNY 10,000
| Name | Position | Gender | Age | Incumbent/ Former | Total before-tax remuneration from the Company | Remuneration from related parties of the Company |
| Liu Miao | Chairman of the board | Male | 53 | Incumbent | 164.63 | No |
| Lin Feng | Director, General manager | Male | 49 | Incumbent | 162.69 | No |
| Wang Hongbo | Director, Deputy general manager | Male | 59 | Incumbent | 130.49 | No |
| Xiong Pingting | Director, Deputy general manager | Female | 47 | Incumbent | 94.34 | No |
| Liu Junhai | Non-executive director | Male | 53 | Incumbent | 9.52 | No |
| Chen You’an | Non-executive director | Male | 65 | Incumbent | 9.52 | No |
| Lyu Xianpei | Non-executive director | Male | 59 | Incumbent | 9.52 | No |
| Li Guowang | Non-executive director | Male | 59 | Incumbent | 4.9 | No |
| Qian Xu | External director | Male | 59 | Incumbent | 9.52 | No |
| Ying Hanjie | External director | Male | 53 | Incumbent | 9.52 | No |
| Gong Zhengying | External director | Female | 53 | Incumbent | 0 | No |
| Yang Ping | Chairman of the Board of Supervisors | Male | 46 | Incumbent | 119.55 | No |
| Li Guangjie | Supervisor | Male | 53 | Incumbent | 100.72 | No |
| Li Lunyu | Supervisor | Female | 36 | Incumbent | 48.49 | No |
| Tang Shijun | Supervisor | Male | 46 | Incumbent | 0 | No |
| Ou Fei | Supervisor | Male | 37 | Incumbent | 0 | No |
| Shen Caihong | Deputy general manager | Male | 57 | Incumbent | 113.04 | No |
| Xie Hong | CFO | Female | 53 | Incumbent | 128.62 | No |
| He Cheng | Deputy general manager | Male | 56 | Incumbent | 110.2 | No |
| Zhang Suyi | Deputy general manager | Male | 51 | Incumbent | 107.28 | No |
| Li Yong | Deputy general manager, Secretary of the board | Male | 46 | Incumbent | 94.34 | No |
| Sun Dongsheng | Non-executive director | Male | 64 | Former | 0 | No |
| Lian Jing | Supervisor | Male | 53 | Former | 0 | No |
| Guo Shihua | Supervisor | Female | 44 | Former | 21.72 | No |
| Total | -- | -- | -- | -- | 1,448.611 | -- |
Note 1: The table above shows the remunerations of directors, supervisors and senior managementfor their periods of service in 2022.
6. Performance of directors during the reporting period
6.1. Board meetings convened during the reporting period
| Meeting | Convened date | Disclosure date | Resolutions |
| The 13th Meeting of the 10th Board of Directors | 28 February 2022 | 1 March 2022 | Announcement on Resolutions of the 13th Meeting of the 10th Board of Directors (Announcement No. 2022-2) (http://www.cninfo.com.cn/) |
| The 14th Meeting of the 10th Board of Directors | 27 April 2022 | 29 April 2022 | Announcement on Resolutions of the 14th Meeting of the 10th Board of Directors (Announcement No. 2022-5) (http://www.cninfo.com.cn/) |
| The 15th Meeting of the 10th Board of Directors | 6 June 2022 | 8 June 2022 | Announcement on Resolutions of the 15th Meeting of the 10th Board of Directors (Announcement No. 2022-17) (http://www.cninfo.com.cn/) |
| The 16th Meeting of the 10th Board of Directors | 29 June 2022 | 30 June 2022 | Announcement on Resolutions of the 16th Meeting of the 10th Board of Directors (Announcement No. 2022-21) (http://www.cninfo.com.cn/) |
| The 17th Meeting of the 10th Board of Directors | 12 July 2022 | 13 July 2022 | Announcement on Resolutions of the 17th Meeting of the 10th Board of Directors (Announcement No. 2022-23) (http://www.cninfo.com.cn/) |
| The 18th Meeting of the 10th Board of Directors | 25 July 2022 | 26 July 2022 | Announcement on Resolutions of the 18th Meeting of the 10th Board of Directors (Announcement No. 2022-26) (http://www.cninfo.com.cn/) |
| The 19th Meeting of the 10th Board of Directors | 28 July 2022 | 30 July 2022 | Announcement on Resolutions of the 19th Meeting of the 10th Board of Directors |
| (Announcement No. 2022-29) (http://www.cninfo.com.cn/) | |||
| The 20th Meeting of the 10th Board of Directors | 1 August 2022 | 1 August 2022 | Announcement on Resolutions of the 20th Meeting of the 10th Board of Directors (Announcement No. 2022-31) (http://www.cninfo.com.cn/) |
| The 21st Meeting of the 10th Board of Directors | 25 August 2022 | 29 August 2022 | Announcement on Resolutions of the 21st Meeting of the 10th Board of Directors (Announcement No. 2022-43) (http://www.cninfo.com.cn/) |
| The 22nd Meeting of the 10th Board of Directors | 2 September 2022 | 3 September 2022 | Announcement on Resolutions of the 22nd Meeting of the 10th Board of Directors (Announcement No. 2022-47) (http://www.cninfo.com.cn/) |
| The 23rd Meeting of the 10th Board of Directors | 18 October 2022 | 19 October 2022 | Announcement on Resolutions of the 23rd Meeting of the 10th Board of Directors (Announcement No. 2022-57) (http://www.cninfo.com.cn/) |
| The 24th Meeting of the 10th Board of Directors | 26 October 2022 | — | — |
| The 25th Meeting of the 10th Board of Directors | 1 December 2022 | 2 December 2022 | Announcement on Resolutions of the 25th Meeting of the 10th Board of Directors (Announcement No. 2022-63) (http://www.cninfo.com.cn/) |
| The 26th Meeting of the 10th Board of Directors | 29 December 2022 | 30 December 2022 | Announcement on Resolutions of the 26th Meeting of the 10th Board of Directors (Announcement No. 2022-65) (http://www.cninfo.com.cn/) |
6.2. Attendance of directors in board meeting and general meeting of shareholders
| Attendance of director in board meeting and general meeting of shareholders | |||||||
| Director | Attendance due in the reporting period (times) | Attendance on site (times) | Attendance by telecommunication (times) | Attendance through a proxy (times) | Absence (times) | Absence for two consecutive times | Attendance at general meeting of shareholders (times) |
| Liu Miao | 14 | 6 | 8 | 0 | 0 | No | 1 |
| Lin Feng | 14 | 5 | 8 | 1 | 0 | No | 2 |
| Wang Hongbo | 14 | 5 | 8 | 1 | 0 | No | 2 |
| Xiong Pingting | 14 | 3 | 8 | 3 | 0 | No | 1 |
| Liu Junhai | 14 | 6 | 8 | 0 | 0 | No | 2 |
| Chen You’an | 14 | 6 | 8 | 0 | 0 | No | 2 |
| Lyu Xianpei | 14 | 6 | 8 | 0 | 0 | No | 1 |
| Li Guowang | 10 | 4 | 6 | 0 | 0 | No | 1 |
| Qian Xu | 14 | 2 | 8 | 4 | 0 | No | 1 |
| Ying Hanjie | 14 | 5 | 8 | 1 | 0 | No | 2 |
| Gong Zhengying | 10 | 3 | 6 | 1 | 0 | No | 2 |
| Shen Caihong | 2 | 1 | 1 | 0 | 0 | No | 0 |
| Sun Dongsheng | 4 | 1 | 2 | 1 | 0 | No | 0 |
6.3. Objections from directors in related issues of the CompanyWere there any objections on related issues of the Company from director? Yes ? NoDirectors have no objection on related issues of the Company during the reporting period.
6.4. Other details about the performance of duties by directorsWas there any advice from directors adopted by the Company?? Yes ? NoExplanation about advice of directors is adopted or not adopted by the Company or notThe Company adopted the advice of non-executive directors in respect of safe production, systemimprovement, and internal control construction.
7. Activities of special committees under the Board of Directors duringthe reporting period
| Committee | Members | Number of meetings convened | Convened date | Topics | Substantial opinion and recommendations | Other information | Details of objections (if any) |
| The Strategy Committee | Liu Miao, Lin Feng, and Wang Hongbo (Sun Dongsheng has ceased to be a member of the Strategy Committee since 29 June 2022) | 6 | 25 February 2022 | Review of the following proposal: The Proposal on Participation in the Incorporation of Luzhou Laojiao Postdoctoral Workstation Technology Innovation Co., Ltd. & the Related-party Transaction | Approved, to be submitted to the Board of Directors for further review | ||
| 17 April 2022 | Review of the following proposals: 1. The Proposal on the De-registration of Luzhou Laojiao Bosheng Hengxiang Liquor Sales Co., Ltd.; and 2. The Proposal on the Investment and Wealth Management with Own Funds | ||||||
| 7 July 2022 | Review of the following proposal: The Proposal on the Implementation of Luzhou Laojiao Technical Upgrade Project of Intelligent Brewing (Phase I) by Subsidiary | ||||||
| 28 July 2022 | Review of the following proposal: The Proposal on the Incorporation of Luzhou Laojiao Innovation and Development Co., Ltd. | ||||||
| 12 October 2022 | Review of the following proposal: The Proposal on the Incorporation of Luzhou Laojiao International Trade (Hainan) Co., Ltd. | ||||||
| 28 November 2022 | Review of the following proposal: The Proposal on the De-registration of Luzhou Baonuo Biotechnology Co., Ltd. | ||||||
| The Nomination Committee | Liu Junhai, Lyu Xianpei and Xiong Pingting (Shen | 2 | 2 June 2022 | Review of the following proposals: 1. The Proposal on the Review of the Qualifications of Mr. Li Guowang as a Non-executive Director Candidate; and | Approved, to be submitted to the Board of Directors |
| Caihong has ceased to be a member of the Nomination Committee since 31 May 2022) | 2. The Proposal on the Review of the Qualifications of Ms. Gong Zhengying as a Non-employee Director Candidate | for further review | |||||
| 28 November 2022 | Review of the following proposal: The Proposal on the Recommendation of Secretary of the Board | ||||||
| The Audit Committee | Lyu Xianpei, Chen You’an and Qian Xu | 4 | 17 April 2022 | Review of the following proposals: 1. The 2021 Annual Financial Report; 2. The 2021 Internal Control Self-assessment Report; 3. The Summary Report of the 2021 Annual Audit of the Audit Committee under the Board of Directors; 4. The Work Plan for the 2022 Internal Audit; and 5. The Q1 2022 Report | Approved, to be submitted to the Board of Directors for further review | ||
| 19 May 2022 | Review of the following proposal: The Proposal on the Re-appointment of CPA Firm | ||||||
| 22 August 2022 | Review of the following proposal: The Proposal on the 2022 Interim Financial Report | ||||||
| 21 October 2022 | Review of the following proposal: The Q3 2022 Report | ||||||
| The Remuneration and Appraisal Committee | Chen You’an, Ying Hanjie, and Li Guowang (Sun Dongsheng has ceased to be a member of the Remuneration and Appraisal Committee since 29 June 2022) | 1 | 10 June 2022 | Review of the following proposals: 1. The Proposal on the Amendments to the Specific Management Rules of Luzhou Laojiao Co., Ltd. for Remunerations of Senior Management and the Specific Management Rules of Luzhou Laojiao Co., Ltd. for Performance Appraisal of Senior Management; 2. The Proposal on the Review of the Remunerations of the Management for 2020; and 3. The Proposal on the Prepayment of the 2021 Annual Salaries for the Management for 2021 | Approved, to be submitted to the Board of Directors for further review |
8. Performance of duties by the board of supervisorsWere there any risks to the Company identified by the board of supervisors when performing its dutiesduring the reporting period? Yes ? NoThe board of supervisors has no objection during the reporting period.
9. Staff in the Company
9.1. Number, functions and educational backgrounds of the staff
| Number of in-service staff of the parent company at the end of the reporting period | 1,292 |
| Number of in-service staff of main subsidiaries at the end of the reporting period | 2,313 |
| Total number of in-service staff at the end of the reporting period | 3,605 |
| Total number of staff with remuneration in the period | 3,605 |
| Number of retirees to whom the Company or its main subsidiaries need to pay retirement pension | 942 |
| Functions | |
| Function by category | Number of staff |
| Production staff | 1,323 |
| Sales staff | 924 |
| R&D staff | 734 |
| Financial staff | 100 |
| Administrative staff | 524 |
| Total | 3,605 |
| Educational backgrounds | |
| Educational background by category | Number of staff |
| Senior high school and below | 510 |
| Junior college | 956 |
| Bachelor | 1,759 |
| Master | 369 |
| Doctor | 11 |
| Total | 3,605 |
9.2. Staff remuneration policy
In 2022, the Company implemented the distribution policy of "sharing benefits, paying for losses,classification and setting, and long-term policy effects", continuously strengthened the digitalassessment, linked individual performance with organizational performance, and highlighted thedistribution according to performance. The Company implemented the post rating wage system andstrengthened the performance management of all employees. According to the following principles:
Link individual performance with organizational performance: The increase of wages is linked to theincrease of the Company's operating performance and profit growth; Under the same caliber, theproportion of increase in salaries shall not exceed the proportion of increase in performance and profitgrowth.
Salary and its changes based on position, ability and performance: The salary of employee shall bedetermined by position and the depth of their expertise. The salary shall be adjusted accordinglywhen the position, ability and performance change. Performance orientation, bonus and forfeit:
Performance assessment is conducted according to the actual contributions of employees, and thesalary distribution is inclined to the employees with excellent performance.
The principle of equal wage negotiation: Abide by the principles that both sides of labor and capitalagrees in collective negotiation, so as to realize the unity of benefit and fairness.
9.3. Staff training plans
In 2022, based on the staff career development system and job qualification standards, the Companyimplemented a targeted training system comprising different levels to meet demands for staff abilityimprovement for different positions and different levels.
Sail Program: The “Sail Program” training was conducted for new employees hired through campusand social recruitment and for other grassroots employees. The purpose was to enhance newemployees’ understanding and recognition of the Company’s core values, familiarize them with theCompany’s production and operation statuses and their work procedures, and allow them to
accumulate professional knowledge and skills and improve their ability to work independently.
Dive Program: The “Dive Program” training was conducted for general employees on specializedlines. The purpose was to strengthen their specialty knowledge and ability to solve specialty problems,enhance their basic management skills, improve their competency and raise their performance. Dueto the huge coverage of trainees across different business segments, the training was conducted inthe form of sub-programs, such as “Happy Learning Sub-program” and “Excellent Frontline ManagerSub-program” to provide specialty knowledge and skills of different systems.
Voyage Program: The “Voyage Program” training was conducted for key personnel with a systematicdesign of three-year development plans and a focus on three themes, including “self-management”,“work management” and “interpersonal management”. The purpose was to enrich employees’knowledge on corporate business management, improve their knowledge structure, and enhancetheir strategic understanding and abilities of work and team management.
Steering Program: The “Steering Program” training was conducted for middle management personneland department experts in the form of online and offline combined, “coming in” and “going out”combined and ability enhancement and work style building combined. Through the learning ofadvanced management concepts and practices, the training aimed to drive employees to broadentheir mind, expand their vision, strengthen their leadership skills and enhance their level of corporatemanagement.
In addition, in terms of professional talents training, in combination with the strategic needs of talentdevelopment and relevant policies of provinces and cities, the Company actively carries out the workof staff title appraisal, skill rating, recommendation and assessment and so on.
9.4. Labor outsourcing
? Applicable ? N/A
10. Profit distribution and converting capital reserves into share capitalFormulation, execution or adjustments of profit distribution policy, especially cash dividend policy, inthe reporting period.? Applicable ? N/A
According to the plan for profit distribution for 2021 deliberated and approved by 2021 annual meetingof shareholders, based on its total of 1,471,615,076 shares, the Company distributed a cash dividendof CNY 32.44 (tax inclusive) per 10 shares to all shareholders. The distribution plan was implementedon 26 August 2022.
| A special statement of the policy of cash dividends | |
| Whether it meets the requirements of the articles of corporation or the resolution of shareholders' meeting: | Yes |
| Whether the standard and proportion of dividends are clear: | Yes |
| Whether the relevant decision-making process and systems 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 and whether the cash dividend policy is adjusted or changed: | The Company's cash dividend policy has not been adjusted or changed in the reporting period |
The Company made a profit in the reporting period and the profit distributable to shareholders of theCompany was positive, but it did not put forward a preliminary plan for cash dividend distribution toshareholders.? Applicable ? N/A
Preliminary plan for profit distribution and converting capital reserves into share capital for thereporting period? Applicable ? N/A
| Bonus shares for every 10 shares (share) | 0 |
| Dividends for every 10 shares (CNY) (tax included) | 42.25 |
| Total shares as the basis for the preliminary plan for profit distribution (share) | 1,471,987,769 |
| Total cash dividends (CNY) (tax included) | 6,219,148,324.03 |
| Cash dividends in other forms (e.g. repurchase share) | 0.00 |
| Total cash dividends (CNY) (including other forms) | 6,219,148,324.03 |
| Distributable profit (CNY) | 26,772,197,213.98 |
| Percentage of cash dividends in the total distributed profit (including other forms) | 100% |
| Information of the 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 of preliminary plan for profit distribution and converting capital reserves into share capital | |
11. Implementation of any equity incentive plan, employee stockownership plan or other incentive measures for employees? Applicable ? N/A
11.1. Equity incentives
A. On 26 September 2021, relevant proposals such as the Proposal on the 2021 Restricted ShareIncentive Plan (Draft) and Summary of Luzhou Laojiao Co., Ltd. were approved at the Seventh Meetingof the 10th Board of Directors and the Third Meeting of the 10th Board of Supervisors of the Company,respectively.B. On 2 December 2021, the Company received the Approval of Luzhou State-owned AssetsSupervision and Administration Commission on the Implementation of the Second Phase of the EquityIncentive Plan for Listed Companies by Luzhou Laojiao Co., Ltd. (L.G.Z.K.P. [2021] No. 62) from theLuzhou State-owned Assets Supervision and Administration Commission, which approved in principleto the implementation of the Restricted Share Incentive Plan by the Company.C. On 24 December 2021, the Board of Supervisors of the Company issued the review opinion, i.e.,Explanation on the Review and Announcement of the List of Awardees of the 2021 Restricted ShareIncentive Plan.D. On 29 December 2021, the relevant proposals such as the Proposal on the 2021 Restricted ShareIncentive Plan (Draft) and Summary of Luzhou Laojiao Co., Ltd. were approved at the FirstExtraordinary General Meeting of Shareholders of 2021. Meanwhile, a self-inspection on the trading ofthe Company's shares by insiders of the Incentive Plan and the proposed awardees was conducted,and the Self-Inspection Report on the Trading of the Company's Shares by Insiders and Awardees inthe 2021 Restricted Share Incentive Plan was disclosed.E. On 29 December 2021, the Company held the 12th Meeting of the 10th Board of Directors and theSixth Meeting of the 10th Board of Supervisors and reviewed and approved the Proposal on the Grantof Restricted Shares to Awardees respectively. The independent directors consented to the relevantmatters.F. On 21 February 2022, the Company disclosed the Announcement on the Completion of Registrationof Restricted Share Grant, completed the registration of the first grant of restricted shares. Upon theregistration of the grant, 6,862,600 restricted shares were granted to 437 objects, the grant price wasCNY 92.71 per share and the listing date was 22 February 2022.G. On 25 July 2022, the Company held the 18th Meeting of the 10th Board of Directors and the NinthMeeting of the 10th Board of Supervisors and reviewed and approved the Proposal on the Grant ofReserved Restricted Shares to Awardees respectively. The independent directors consented to thismatter.H. On 4 August 2022, the Board of Supervisors of the Company issued the review opinion, i.e.,Explanation on the Review and Announcement of the List of Awardees for the Reserved RestrictedShares of the 2021 Restricted Share Incentive Plan.I. On 2 September 2022, the Company held the 22nd Meeting of the 10th Board of Directors and the13th Meeting of the 10th Board of Supervisors, at which the Proposal on the Repurchase andRetirement of Certain Restricted Shares and the Adjustment of Repurchase Price and the Proposal onthe Adjustment of the Granted Price of Reserved Restricted Shares of 2021 Restricted Share IncentivePlan were reviewed and approved respectively. In accordance with the relevant provisions of theincentive plan of the Company and the authorization of the First Extraordinary General Meeting ofShareholders of 2021, the Board of Directors of the Company agreed to adjust the grant price andrepurchase price of the reserved restricted shares under the incentive plan from CNY 92.71 per shareto CNY 89.466 per share in view of the implementation of the Company's profit distribution plan for
2021. The independent directors consented to this matter.J. On 3 September 2022, the Company disclosed the Announcement on the Repurchase andCancellation of Some Restricted Shares to Reduce Registered Capital and Notice to Creditors. By theexpiration of the declaring period, the Company had not received any declaration from the relevantcreditors for early payout of debts or provision of guarantee.K. On 26 September 2022, the Company disclosed the Announcement on the Completion of theRegistration of the Grant of the Reserved Restricted Shares under the 2021 Restricted Share IncentivePlan. Upon the registration of the grant of the reserved restricted shares, 342,334 restricted shareswere granted to 46 objects, the grant price was CNY 89.466 per share and the listing date was 28September 2022.L. On 29 November 2022, the Company disclosed the Announcement on the Completion of theRepurchase and Cancellation of Some Restricted Shares. The Company proposed to repurchase andcancel a total of 62,310 restricted shares granted but not lifted from restricted sales. As at 29 November2022, the Company completed the aforesaid repurchase and cancellation of restricted shares.M. On 29 December 2022, the Company held the 26th Meeting of the 10th Board of Directors and the15th Meeting of the 10th Board of Supervisors and reviewed and approved the Proposal on the Grant ofReserved Restricted Shares to Awardees respectively. The independent directors consented to thismatter.N. On 13 January 2023, the Board of Supervisors of the Company issued the review opinion, i.e.,Explanation on the Review and Announcement of the List of Awardees for the Reserved RestrictedShares of the 2021 Restricted Share Incentive Plan.O. On 16 February 2023, the Company disclosed the Announcement on the Completion of theRegistration of the Grant of the Reserved Restricted Shares under the 2021 Restricted Share IncentivePlan. Upon the registration of the grant of the reserved restricted shares, 92,669 restricted shares weregranted to 17 objects, the grant price was CNY 89.466 per share and the listing date was 17 February2023.
Equity incentives for directors and senior management? Applicable ? N/A
Unit: share
| Name | Office title | Stock options held at the beginning of the reporting period | Stock options granted in the reporting period | Exercisable share options for the reporting period | Exercised share options in the reporting period | Exercise price for exercised share options in the reporting period (CNY / share) | Stock options held at the end of the reporting period | Market price at the end of the reporting period (CNY / share) | Restricted shares held at the beginning of the reporting period | Unlocked shares in the reporting period | Restricted shares granted in the reporting period | Grant price of the restricted shares (CNY/ share) | Restricted shares held at the end of the reporting period |
| Liu Miao | Chairman of the board | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 92.71 | 95,900 |
| Lin Feng | Director, General manager | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 92.71 | 95,900 |
| Wang Hongbo | Director, Deputy general manager | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 92.71 | 76,700 |
| Shen Caihong | Deputy general manager | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 92.71 | 76,700 |
| Xie Hong | CFO | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 92.71 | 76,700 |
| He Cheng | Deputy general manager | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 92.71 | 76,700 |
| Zhang Suyi | Deputy general manager | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 92.71 | 76,700 |
| Xiong Pingting | Deputy general manager | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 92.71 | 62,800 |
| Li Yong | Deputy general manager, Secretary of the board | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 92.71 | 62,800 |
| Total | -- | 0 | 0 | 0 | 0 | -- | 0 | -- | 0 | 0 | 0 | -- | 700,900 |
| Notes (if any) | The first grant date for the 2021 Restricted Share Incentive Plan was 29 December 2021 and the registration date of the grant was 21 February 2022. Therefore, the above personnel were granted a total of 700,900 new restricted shares during the reporting period. | ||||||||||||
Appraisal mechanism and incentives for senior managementFor details, please refer to the 2021 Restricted Share Incentive Plan (Draft) and Summary of LuzhouLaojiao Co., Ltd., the Performance Appraisal Methods for the 2021 Restricted Share Incentive Plan ofLuzhou Laojiao Co., Ltd., and the Management Methods for the 2021 Restricted Share Incentive Planof Luzhou Laojiao Co., Ltd., which have been disclosed by the Company on www.cninfo.com.cn on 26September 2021.
11.2. Implementation of employee stock ownership plans
? Applicable ? N/A
11.3. Other incentive measures for employees
? Applicable ? N/A
12. Establishment and implementation of the internal control systemduring the reporting period
12.1. Establishment and implementation of the internal control systemDuring the reporting period, in accordance with the Basic Rules for Internal Control of Enterprises, theGuidelines of the Shenzhen Stock Exchange for the Internal Control of Listed Companies, relevant laws,administrative regulations, normative documents, and other regulatory requirements concerning internalcontrol, as well as the reality of the Company, the Company consistently improved and optimized itsinternal control systems and established a well-developed system that covered the corporategovernance, administrative management, operations management, financial management, human
resources, production guarantee, and safety and environmental protection. Additionally, it strengthenedthe implementation, supervision, inspection, feedback, and improvement of the internal control systemsin the operations management to ensure that each internal control system is reasonable, complete, andeffective, thereby promoting the sound, sustainable development of the Company.
12.2. Material internal control deficiencies found in the reporting period
□ Yes ? No
13. The Company’s management and control of subsidiaries during thereporting period
| Company name | Consolidation plan | Consolidation progress | Problems arising in consolidation | Solutions taken | Solution implementation progress | Subsequent solutions |
| N/A | ||||||
14. Internal control self-assessment report and auditor report
14.1. Internal control self-assessment report
| Disclosure date of the internal control self-assessment report | 29 April 2023 | |
| Disclosure index of the internal control self-assessment report | 2022 Internal Control Self-assessment Report （http://www.cninfo.com.cn/） | |
| Ratio of the total assets of the appraised entitles to the consolidated total assets | 90.00% | |
| Ratio of the operating revenues of the appraised entitles to the consolidated operating revenue | 90.00% | |
| Deficiencies identification standard | ||
| Type | Financial report | Non-financial report |
| Qualitative standard | Material deficiencies：（1）Correction of material errors in financial reports that have been announced (except retroactive adjustment of previous years due to changes in policies or other objective factors)；（2）Material misstatement of current financial report which was unrecognized but found by the auditor；（3） Corrupt transaction of senior management；（4）Audit committee and internal audit department are not effective to the internal control supervision . | Material deficiencies：（1）violate national regulations and laws；（2）The Company’s decision-making procedures are unscientific；if there is a decision-making misplay, it will result in significant deal failure; （3）The substantial loss of managerial or technical staff；（4）Important business lacks system control or system failure, important economic business has internal control system guidance, but with no effective operation；（5）material deficiencies of internal control cannot be rectified in time. |
| Quantitative standard | 1. Material deficiencies：Misstatement ≥ 5% of total profits；Misstatement ≥ 1% of total assets；Misstatement ≥ 5% of total operating revenue；Misstatement ≥5% of owner's equity 2. Significant deficiencies：3% of gross profits≤Misstatement<5% of gross profits；0.5% of total assets≤Misstatement<1% of total assets；3% of total operating revenue≤Misstatement<5% of total operating revenue；3% of owner's equity≤Misstatement<5% of owner's equity. 3. General deficiencies：Misstatement<3% of gross profits；Misstatement<0.5% of total assets；Misstatement<3% of total operating revenue；Misstatement<3% of owner's equity. | 1. Material deficiencies：loss≥5% of net profits. 2. Significant deficiencies：3% of net profits≤ loss＜5% of net profits. 3. General deficiencies：loss＜3% of net profits |
| Number of financial-report material deficiencies | 0 | |
| Number of non-financial-report material deficiencies | 0 | |
| Number of significant financial-report related deficiencies | 0 | |
| Number of significant Non-financial-report related deficiencies | 0 | |
14.2. Internal control auditor report
? Applicable ? N/A
| Deliberation opinion section in the internal control audit report | |
| In accordance with the Basic Rules for Internal Control of Enterprises, the guidelines for assessment, and the other applicable laws and regulations, the Company has assessed the reasonableness and effectiveness of the design and operation of internal control as of 31 December 2022. During the reporting period, the Company has established internal control over businesses and matters within the assessment scope, which were effectively executed. The internal control objectives have been met, with no material deficiencies. No significant change occurred to the Company’s internal control during the period from the base day of the internal control assessment report to the issue day of the report that had a substantial impact on the conclusion of the assessment report. | |
| Disclosure of internal control audit report | Disclosed |
| Disclosure date of the internal control audit report | 29 April 2023 |
| Disclosure index of the internal control audit report | 2022 Internal Control Auditor Report （http://www.cninfo.com.cn/） |
| Type of the audit’s opinion | Standard unqualified opinion |
| Significant deficiencies found in the non-financial report | No |
The accounting firm issued the internal control audit report of non-standard opinions? Yes ? No
Whether the internal control audit report issued by the accounting firm is consistent with the self-assessment report issued by the board of directors.? Yes ? No
15. Remediation of Problems Identified by Self-inspection in the SpecialCampaign on Listed Company GovernanceNone.
Section V Environmental and Social Responsibility
1. Information about environment protection
Whether the listed company and its subsidiaries belong to heavy polluting industries prescribed bythe environmental protection department? Yes □ No
Policies and industry standards on environmental protectionIn the process of production and operation, the Company strictly follow the laws, regulations andindustry standards related to environmental protection, such as the Environmental Protection Law ofthe People's Republic of China, Policies and Industry Standards on Environmental Protection,Regulations on Environmental Protection of Sichuan Province, Law of the People's Republic of Chinaon Environmental Impact Assessment, Regulations on the Administration of Environmental Protectionof Construction Projects of the People's Republic of China, Law of the People's Republic of China onWater Pollution Prevention and Control, Standards for the Emission of Water Pollutants in theFermented Alcohol and Liquor Industry, Law of the People's Republic of China on AtmosphericPollution Prevention and Control, Regulations on the Prevention and Control of EnvironmentalPollution by Solid Waste in Sichuan Province, Standard for Pollution Control on Hazardous WasteStorage, Regulations on Administration of Pollutant Discharge Permits, and Administrative Measuresfor the Legal Disclosure of Enterprise Environmental Information.
Environmental protection administrative permissionIn 2022, the Company obtained four ecological and environmental administrative permits, including atotal of three permits for change and renewal of discharge permits and one approval of environmentalimpact assessment report.
Ecological Environmental Administrative Permission
| Name of permit | Administrative permit No. | Review and issuance authority | Acquiring time | Valid term | Permitted matter | Remark |
| Discharge Permit for Luzhou Laojiao Co., Ltd. (Xiaoshi Brewery Base) | 91510500204706718H002V | Luzhou Municipal Ecology and Environment Bureau | 29 November 2022 | 5 years | Concentration limit on fugitive emission of air pollutants: 2.0 mg/Nm3 for non-methane hydrocarbon (NMHC) and 20 dimensionless for odor concentration. The noise emission standard is Class 2 in the Emission Standard for Noise of Industrial Enterprises at Boundary (GB12348-2008). | Renewal |
| Environmental Impact Report on Flavoring Baijiu | L.SH.H.J.H. [2022] No. 43 | Luzhou Municipal Ecology and Environment | 18 May 2022 | Permanent | The project aims at technique transformation in the premises of the Brewery Center 7 (formerly Workshop 707) of the Luohan Brewery Eco-Park. | Newly acquired |
| Production Equipment and Engineering Application Research Project of Luzhou Laojiao Co., Ltd. | Bureau | Main construction content: Dismantle the distillation system in the existing Brewery Center 7, re-layout according to the process design, and renovate an area of approximately 14,000 m2; dismantle the original equipment in the distiller's grains drying area, carryout civil engineering renovation according to the process design layout, and renovate a distiller's grains fermentation area of approximately 5,000 m2; add (renovate) a distillation system. After technique transformation, the capacity of the Brewery Center 7 (formerly Workshop 707) was reduced from 40,000 t/a to 14,000 t/a. | ||||
| Discharge Permit for Luzhou Laojiao Co., Ltd. (Huangyi Brewery Eco-Park) | 91510500204706718H004Q | Luzhou Municipal Ecology and Environment Bureau | 20 September 2022 | 5 years | Permitted annual discharge limits for wastewater: 400 t/a for chemical oxygen demand (COD), 30 t/a for ammonia nitrogen, 50 t/a for total nitrogen (TN), and 3 t/a for total phosphorus (TP). Permitted noise limits: Class 3 in the Emission Standard for Noise of Industrial Enterprises at Boundary (GB12348-2008). | Change |
| Discharge Permit for Luzhou Laojiao Co., Ltd. (Luohan Brewery Eco-Park) | 91510500204706718H001V | Luzhou Municipal Ecology and Environment Bureau | 29 November 2022 | 5 years | The permitted annual emission limits for the main emission outlet of waste gas are 3.9 t/a of particulate matter, 11.5 t/a for sulfur dioxide and 45.4 t/a for nitrogen oxides; the permitted annual emission limits for the main emission outlet of waste water are 23.183 t/a for COD, 2.017 t/a for ammonia nitrogen, 5.796 t/a for TN and 0.232 t/a for TP; the east, west and south sides of the noise factory boundary are subject to the Class 2 standard in the Emission Standard for Noise of Industrial Enterprises at Boundary (GB12348-2008), while the north side is subject to the Class 4 standard limit in the Emission Standard for Noise of Industrial Enterprises at Boundary (GB12348-2008). | Renewal |
Industry discharge standards and pollutants in producing and operating activities
| Company name | Type of main pollutant and particular pollutant | Name of main pollutant and particular pollutant | Discharge type | Number of discharge outlet | Distribution of discharge outlet | Emission concentration/intensity | Pollution discharge standard | Total emission | Approved total emission | Excessive discharge |
| Luzhou Laojiao Co., Ltd. | Water pollutant | COD | Direct discharge | 1 | Luohan Brewery Eco-Park | 22.60mg/m3 | 50 mg/L | 9.466t/a | 23.183t/a | No |
| Luzhou Laojiao Co., Ltd. | Water pollutant | Ammonia nitrogen | Direct discharge | 1 | Luohan Brewery | 0.149mg/L | 5 mg/L | 0.062t/a | 2.017t/a | No |
| Eco-Park | ||||||||||
| Luzhou Laojiao Co., Ltd. | Water pollutant | Total nitrogen | Direct discharge | 1 | Luohan Brewery Eco-Park | 5.976 mg/L | 15 mg/L | 2.503t/a | 5.796t/a | No |
| Luzhou Laojiao Co., Ltd. | Water pollutant | Total phosphorus | Direct discharge | 1 | Luohan Brewery Eco-Park | 0.090mg/L | 0.5mg/L | 0.038t/a | 0.232t/a | No |
| Luzhou Laojiao Co., Ltd. | Air pollutant | PM | Organized discharge | 2 | Luohan Brewery Eco-Park | 2.991mg/m3 | 20mg/m3 | 0.0003 | 2.8 t/a | No |
| Luzhou Laojiao Co., Ltd. | Air pollutant | Sulfur dioxide | Organized discharge | 2 | Luohan Brewery Eco-Park | 0.2715mg/m3 | 50mg/m3 | 0.0001 t/a | 4.7 t/a | No |
| Luzhou Laojiao Co., Ltd. | Air pollutant | Oxynitride | Organized discharge | 2 | Luohan Brewery Eco-Park | 26.683 mg/m3 | 150mg/m3 | 0.0032 t/a | 22.1 t/a | No |
| Luzhou Laojiao Co., Ltd. | Water pollutant | COD | Indirect discharge | 1 | Huangyi Brewery Eco-Park | 34.157 mg/L | 400mg/L | 19.184 t/a | 400 t/a | No |
| Luzhou Laojiao Co., Ltd. | Water pollutant | Ammonia nitrogen | Indirect discharge | 1 | Huangyi Brewery Eco-Park | 0.316 mg/L | 30 mg/L | 0.148 t/a | 30 t/a | No |
| Luzhou Laojiao Co., Ltd. | Water pollutant | Total nitrogen | Indirect discharge | 1 | Huangyi Brewery Eco-Park | 11.478 mg/L | 50 mg/L | 6.890 t/a | 50 t/a | No |
| Luzhou Laojiao Co., Ltd. | Water pollutant | Total phosphorus | Indirect discharge | 1 | Huangyi Brewery Eco-Park | 0.515 mg/L | 3 mg/L | 0.316 t/a | 3 t/a | No |
| Luzhou Laojiao Brewing Co., Ltd. | Air pollutant | Smoke and dust | Organized discharge | 2 | Huangyi Brewery Eco-Park | 0.859 mg/m3 | 5 mg/m3 | 0.579 t/a | 5.64t/a | No |
| Luzhou Laojiao Brewing Co., Ltd. | Air pollutant | PM | Organized discharge | 1 | Huangyi Brewery Eco-Park | 1.090 mg/m3 | 20 mg/m3 | 0.027 t/a | 3t/a | No |
| Luzhou Laojiao Brewing Co., Ltd. | Air pollutant | Sulfur dioxide | Organized discharge | 2 | Huangyi Brewery Eco-Park | 0.530 mg/m3 | 35 mg/m3 | 0.331 t/a | 16.68 t/a | No |
| Luzhou Laojiao Brewing Co., Ltd. | Air pollutant | Sulfur dioxide | Organized discharge | 1 | Huangyi Brewery Eco-Park | 0.766 mg/m3 | 50 mg/m3 | 0.010 t/a | 2.2 t/a | No |
| Luzhou Laojiao Brewing Co., Ltd. | Air pollutant | Oxynitride | Organized discharge | 2 | Huangyi Brewery Eco-Park | 39.675 mg/m3 | 100 mg/m3 | 27.44 t/a | 113.4 t/a | No |
| Luzhou Laojiao Brewing Co., Ltd. | Air pollutant | Oxynitride | Organized discharge | 1 | Huangyi Brewery Eco-Park | 44.828mg/m3 | 150 mg/m3 | 1.144 t/a | 22.68 t/a | No |
Treatments of pollutantsA. Waste water: Areas of the Company that produce wastewater are National Cellar, ZaojiaoxiangBrewery Base, Xiaoshi Brewery Base, Anning Technology Park, Luohan Brewery Eco-Park, andHuangyi Brewery Eco-Park. In National Cellar, Zaojiaoxiang Brewery Base, Xiaoshi Brewery Base, andAnning Technology Park, the high-concentration brewing wastewater is temporarily collected in pools(or tanks), and is later transferred to the wastewater treatment station of Huangyi Brewery Eco-Park bytruck for treatment. The wastewater treatment stations of Luohan Brewery Eco-Park and Huangyi
Brewery Eco-Park are equipped with online monitors to automatically monitor COD, ammonia nitrogen,total phosphorus, total nitrogen, pH value and flows, and transmit the monitoring data to the supervisionplatform of the higher authority. The Company's facilities for prevention and control of wastewaterpollution are under normal operations, ensuring up-to-standard discharge through general dischargingoutlets. Compared to 2021, in 2022 the Company reduced suspended matter discharge per unit ofproduct by 63.25%, COD discharge by 12.44%, total nitrogen discharge by 16.94%, total phosphorusdischarge by 23.25% and ammonia nitrogen discharge by 60.46%.
B. Waste gas: Areas of the Company that produce exhaust gas are National Cellar, ZaojiaoxiangBrewery Base, Xiaoshi Brewery Base, Luohan Brewery Eco-Park, and Huangyi Brewery Eco-Park. InNational Cellar Brewery Base, natural gas boilers are used, while in Xiaoshi Brewery Base andZaojiaoxiang Brewery Base, direct-fired bottom boilers are used. The natural gas boilers of LuohanBrewery Eco-Park (20t/h, 30t/h) and the natural gas boilers of Huangyi Brewery Eco-Park (20t/h, 75t/h,75t/h) are equipped with online monitors to automatically monitor exhaust gas, and transmit themonitoring data to the supervision platform of the higher authority. Low NOx combustion technology isadopted for the natural gas boilers. The Company's facilities for prevention and control of exhaust gaspollution are under normal operations, ensuring up-to-standard emission of exhaust gas through outlets.Compared to 2021, the Company reduced PM discharge per unit of product by 40.22% in 2022.
Emergency plan for environmental emergenciesThe Company developed the Contingency Plan for Environmental Emergencies (Revision 2020), theEnvironmental Risk Assessment Report and the Emergency Resources Survey Report, and reported tothe Environmental Emergency Service Center of Luzhou for filing. The Company carried out drills ofcontingency plans, which improved employees' capability to respond to environmental emergencies.
Environmental self-monitoring plan
| Monitoring site | Monitoring indicator | Implementation standard | Emission limit | Monitoring frequency | Monitoring form | 2022 Monitoring compliance rate |
| Unorganized monitoring points 1#-4# for the exhaust gas emission outlets of Luohan Brewery Eco-Park | Odor concentration | Emission Standards for Odor Pollutants (GB14554- 93) | 20 (dimensionless) | 1 time/half-year | Manual | 100% |
| Hydrogen sulfide | 0.06 mg/m3 | |||||
| Ammonia | 1.5 mg/m3 | |||||
| NMHC | Sichuan Emission Control Standard for Volatile Organic Compounds (DB51/2377-2017) | 2 mg/m3 | ||||
| Particulate matters | Integrated Emission Standards for Air Pollutants (GB16297-1996) | 1 mg/m3 | ||||
| Exhaust gas emission outlets DA022, DA021 (unused) and DA020 of Luohan Brewery Eco-Park | Ringelman emittance | Emission Standards for Air Pollutants for Boiler (GB13271-2014) | ≤ 1 | 1 time/quarter | Manual | 100% |
| Nitrogen oxide | 150 mg/m3 | Automatic | ||||
| Particulate matters | 20 mg/m3 | |||||
| Sulfur dioxide: | 50 mg/m3 | |||||
| Exhaust gas emission outlet DA019 of Luohan Brewery Eco-Park | Hydrogen sulfide | Emission Standards for Odor Pollutants (GB14554- 93) | 15,000 / | 1 time/half-year | Manual | 100% |
| Ammonia | / 1.8 kg/h | |||||
| Odor concentration | / 27 kg/h |
| Exhaust gas emission outlet DA018 of Luohan Brewery Eco-Park | Sulfur dioxide: | Integrated Emission Standards for Air Pollutants (GB16297-1996) | 240 mg/m3 0.77 kg/h | 1 time/quarter | Manual | 100% |
| Particulate matters | 120 mg/m3 3.5 kg/h | |||||
| Nitrogen oxide | 550 mg/m3 2.6 kg/h | |||||
| Volatile organic compounds | Sichuan Emission Control Standard for Volatile Organic Compounds (DB51/2377-2017) | 60 mg/m3 3.4 kg/h | ||||
| Exhaust gas emission outlet DA017 of Luohan Brewery Eco-Park | NMHC | Sichuan Emission Control Standard for Volatile Organic Compounds (DB51/2377-2017) | 60 mg/m3 3.4 kg/h | 1 time/quarter | Manual | 100% |
| Exhaust gas emission outlets DA001-DA016 of Luohan Brewery Eco-Park | Particulate matters | Integrated Emission Standards for Air Pollutants (GB16297-1996) | 120 mg/m3 | 1 time/half-year | Manual | 100% |
| Main outlet DW001 of the wastewater treatment station of Luohan Brewery Eco-Park | Flow | Standards for the Emission of Water Pollutants in the Fermented Alcohol and Liquor Industry (GB27931-2011) | / | 1 time/quarter | Automatic | 100% |
| PH value | 6-9 | |||||
| COD | 50 mg/L | |||||
| Ammonia nitrogen | 5 mg/L | |||||
| TP | 0.5 mg/L | |||||
| TN | 15 mg/L | |||||
| Suspended solids | 20 mg/L | 1 time/month | Manual | |||
| Five-day BOD | 20mg/L | |||||
| Chroma | 20 | |||||
| Rainwater outlets DW002-DW006 of Luohan Brewery Eco-Park | Suspended solids | Standards for the Emission of Water Pollutants in the Fermented Alcohol and Liquor Industry (GB2731-2011) | 20 mg/L | 1 time/month (1 time/quarter in case of no abnormalities monitored) | Manual | 100% |
| COD | 50 mg/L | |||||
| Noise monitoring points 1-4# at the boundary of Luohan Brewery Eco-Park | Boundary noise | Emission Standard for Noise of Industrial Enterprises at Boundary (GB12348-2008) | Daytime: 60 dB (A); nighttime: 50 dB (A) | 1 time/quarter | Manual | 100% |
| Circulating cooling water outlet DW002 of the Energy Center of Sichuan Luzhou Baijiu Industrial Park | PH value, COD, TP | / | / | 1 time/quarter | Manual | 100% |
| Wastewater outlet DW001 of the Energy Center of Sichuan Luzhou Baijiu Industrial Park | PH value | Integrated Wastewater Discharge Standard (GB8978-1996) | 6-9 | 1 time/quarter | Manual | 100% |
| Total dissolved solids (TDS) | / | |||||
| Suspended solids | 140 mg/L | |||||
| Five-day BOD | 80 mg/L | |||||
| COD | 400 mg/L | |||||
| TN | 50 mg/L | |||||
| Ammonia nitrogen | 30 mg/L | |||||
| TP | 3 mg/L | |||||
| Boiler exhaust gas vents DA001-DA002 of the Energy Center of Sichuan Luzhou Baijiu Industrial Park | Ringelman emittance | Emission Standard of Air Pollutants for Thermal Power Plants (GB13223-2011) | ≤ 1 | 1 time/quarter | Manual | 100% |
| Nitrogen oxide | 100 mg/m3 | Automatic | ||||
| Soot | 5 mg/m3 | |||||
| Sulfur dioxide: | 35 mg/m3 | |||||
| Boiler exhaust gas vent DA003 of the Energy | Ringelman emittance | Emission Standards for Air Pollutants for Boiler (GB13271- | ≤ 1 | 1 time/quarter | Manual | 100% |
| Nitrogen oxide | 150 mg/m3 | Automatic |
| Center of Sichuan Luzhou Baijiu Industrial Park | Particulate matters | 2014) | 20 mg/m3 | |||
| Sulfur dioxide: | 50 mg/m3 | |||||
| Rainwater outlets DW004-DW010 of Huangyi Brewery Eco-Park | Suspended solids | Standards for the Emission of Water Pollutants in the Fermented Alcohol and Liquor Industry (GB2731-2011) | 50 mg/L | 1 time/month (1 time/quarter in case of no abnormalities monitored) | Manual | 100% |
| COD | 100 mg/L | |||||
| Unorganized monitoring points 1#-4# at the boundary of Huangyi Brewery Eco-Park | Odor concentration | Emission Standards for Odor Pollutants (GB14554-93) | 20 (dimensionless) | 1 time/quarter | Manual | 100% |
| Hydrogen sulfide | 0.06 mg/m3 | |||||
| Ammonia | 1.5 mg/m3 | |||||
| NMHC | Sichuan Emission Control Standard for Volatile Organic Compounds (DB51/2377-2017) | 2 mg/m3 | ||||
| Particulate matters | Integrated Emission Standards for Air Pollutants (GB16297-1996) | 1 mg/m3 | ||||
| DA041 and DA042 of Huangyi Brewery Eco-Park | Odor concentration | Emission Standards for Odor Pollutants (GB14554- 93) | 2,000 (dimensionless) | 1 time/half-year | Manual | 100% |
| Ammonia | 4.9 kg/h | |||||
| Hydrogen sulfide | 0.33 kg/h | |||||
| DA087, DA096-DA097 and DA072-DA075 of Huangyi Brewery Eco-Park | NMHC | Sichuan Emission Control Standard for Volatile Organic Compounds (DB51/2377-2017) | 60 mg/m3 4.76 kg/h | 1 time/quarter | Manual | 100% |
| DA034-DA040, DA043-DA070, DA076-DA086 and DA088-DA095 of Huangyi Brewery Eco-Park | Particulate matters | Integrated Emission Standards for Air Pollutants (GB16297-1996) | 120 mg/m3 | 1 time/half-year | Manual | 100% |
| Main outlet of the wastewater treatment station of Huangyi Brewery Eco-Park | Flow | Standards for the Emission of Water Pollutants in the Fermented Alcohol and Liquor Industry (GB2731-2011) | / | 1 time/quarter | Automatic | 100% |
| PH value | 6-9 | |||||
| COD | 400 mg/L | |||||
| Ammonia nitrogen | 30 mg/L | |||||
| TP | 3 mg/L | |||||
| TN | 50 mg/L | |||||
| Suspended solids | 140 mg/L | 1 time/month | Manual | |||
| Five-day BOD | 80 mg/L | |||||
| Chroma | 80 | |||||
| Noise monitoring points 1-4# at the boundary of Huangyi Brewery Eco-Park | Boundary noise | Emission Standard for Noise of Industrial Enterprises at Boundary (GB12348-2008) | Daytime: 65 dB (A); nighttime: 55 dB (A) | 1 time/quarter | Manual | 100% |
| Unorganized monitoring points 1#-7# at Xiaoshi Brewery Base | Odor concentration | Emission Standards for Odor Pollutants (GB14554- 93) | 20 | 1 time/half-year | Manual | 100% |
| NMHC | Sichuan Emission Control Standard for Volatile Organic Compounds (DB51/2377-2017) | 2.0 mg/m3 | ||||
| Boiler exhaust gas vents DA001-DA010 of Xiaoshi Brewery Base | Ringelman emittance | Emission Standards for Air Pollutants for Boiler (GB13271-2014) | ≤ 1 | 1 time/year | Manual | 100% |
| Soot | 20 mg/m3 | |||||
| Sulfur dioxide: | 50 mg/m3 | |||||
| Nitrogen oxide | 150 mg/m3 | 1 time/month | ||||
| Noise monitoring points at the boundary of Xiaoshi Brewery Base | Boundary noise | Emission Standard for Noise of Industrial Enterprises at Boundary (GB12348-2008) | Daytime: 60 dB (A) | 1 time/quarter | Manual | 100% |
| Unorganized monitoring points of National Cellar and Zaojiaoxiang Brewery Bases | Odor concentration | Emission Standards for Odor Pollutants (GB14554- 93) | 20 | 1 time/half-year | Manual | 100% |
| NMHC | Sichuan Emission Control Standard for Volatile Organic Compounds (DB51/2377-2017) | 2.0 mg/m3 | ||||
| Boiler exhaust gas vents DA001-DA003 of National Cellar and Zaojiaoxiang Brewery Bases | Ringelman emittance | Emission Standards for Air Pollutants for Boiler (GB13271-2014) | ≤ 1 | 1 time/year | Manual | 100% |
| Soot | 20 mg/m3 | |||||
| Sulfur dioxide: | 50 mg/m3 | |||||
| Nitrogen oxide | 150 mg/m3 | 1 time/month | ||||
| Noise monitoring points at the boundary of National Cellar and Zaojiaoxiang Brewery Bases | Boundary noise | Emission Standard for Noise of Industrial Enterprises at Boundary (Class 4 for street frontage) | Daytime: 60 dB (A) | 1 time/quarter | Manual | 100% |
| Rainwater outlet DW003 of National Cellar and Zaojiaoxiang Brewery Bases | Suspended solids | Standards for the Emission of Water Pollutants in the Fermented Alcohol and Liquor Industry (GB2731-2011) | 20 mg/L | 1 time/month (1 time/quarter in case of no abnormalities monitored) | Manual | 100% |
| COD | 50 mg/L |
Input in environmental management and protection and the payment of environmental protection-related taxes
Unit: CNY
| Taxable pollutant | Taxable pollutant | Amount of tax payable | Actual amount paid | Tax deduction |
| Suspended solids, COD, ammonia nitrogen (NH3-N), TP (calculated as P) | Water pollutant | 36,754.91 | 367,54.91 | 0.00 |
| Ammonia, nitrogen oxides, sulfur dioxide, hydrogen sulphide, soot | Air pollutant | 137,932.77 | 137,932.77 | 0.00 |
Measures taken to reduce carbon emissions during the reporting period and the results? Applicable ? N/ALuzhou Laojiao Huangyi Brewery Eco-Park is a green and low-carbon brewery ecological park with thelargest scale of solid-state baijiu brewing, the largest capacity of leaven and the highest level ofautomation and intelligence in the industry. The Company has successfully developed industry-leadingautomated baijiu brewing equipment, and realized the fully automated operation of the entire brewingprocess. A set of green, low-carbon, energy-saving and environment-friendly production, operation anddevelopment mode has been developed using green energy-saving technologies, automated controlmeans and digital management platforms, reducing carbon dioxide emissions. The Company hasdeveloped a unique digital, green and low-carbon development path of Luzhou Laojiao.
Administrative penalties received in the reporting period due to environmental issues
| The Company or subsidiary | Reason for penalties | Regulation violated | Penalties | Impact on the Company | Rectification |
| N/A | |||||
Other information about environmental protection that should be disclosedN/A
Other information about environment protectionN/A
2. Social responsibility
See the 2022 Social Responsibility Report disclosed on the same day with this Annual Report.
3. Efforts in poverty alleviation and rural revitalization
3.1. Work Plan for Rural Revitalization in 2022
In 2022, the Company thoroughly practiced General Secretary Mr. Xi Jinping's important instructions onconsolidating and expanding the achievements of poverty alleviation and rural revitalization,implemented the requirements of the "four no-removals" and the decisions and deployments of thecentral, provincial and municipal committees, and strove to build model and demonstration areas forrural revitalization by fully leveraging its strengths in terms of capital, technology, talent andmanagement in accordance with the general requirements of "prosperous industry, livable ecology,civilized rural style, effective governance and well-off life" to promote its sustainable development.A. Intensified the leadership of organizations and fulfill the assistance responsibility. The Companyfurther improved its political stance, assumed the social responsibility of a state-owned enterprise, andprovided assistance and fulfilled its responsibilities in poverty alleviation. Additionally, to fulfill itsassistance responsibility, the Company promoted the cooperation between its Party branches andassisted villages as well as the training of cadres of the two village Party branches and team membersof the Company stationed in the two villages.B. Promoted the upgrading of industries and income increase through poverty alleviation. Giving fullplay to its advantages in resources and platforms, the Company trained more technological, sales, andmanagement talent in Hongyuan County to enlarge the group of "forgoers in getting rich", therebyencouraging the developed groups to assist backward ones. Besides, it built a brand image for yakproducts in Hongyuan County and increased the inputs in the development of derivatives, so as toenhance the visibility and reputation and lend constant impetus to the development of the assistedvillages.C. Established a long-term mechanism to facilitate rural revitalization. The Company focused on thestandard that rural poor people are free from worries over food and clothing and have access tocompulsory education, basic medical services, and safe housing, strengthened dynamic monitoring ofany trends indicating a return to poverty, and consistently promoted the development of the assistedvillages to share the fruits of poverty alleviation with villagers. Meanwhile, measures including "externalsupport and self-motivation" and "building up self-belief and providing access to education" wereincorporated into the long-term mechanism for rural revitalization.
3.2. Results of the 2022 Rural Revitalization
In 2022, the Company spent a total of CNY 2.5515 million to implement seven projects with high quality,such as infrastructure construction, industrial support, self-belief and education support, and PillarsProject, effectively helping villages to strengthen their special industries, optimize education and culture,and solve development problems with practical strategies and real measures to seek true results. Inrecent years, the Company has won honors and awards, including "The Most Charitable Model" of theThird Sichuan Charity Award, the "Outstanding Contribution Award for Social Poverty Alleviation" ofLuzhou City and the "Advanced Group for Paired Assistance" in Sichuan Province.A. Organizational guarantee continued to be strengthened and the assistance responsibility was fulfilled.In 2022, the Company continued to fulfill its assistance responsibility by holding two party committeemeetings to study paired assistance, carrying out four special exchange seminars, and leadingmembers of the Company's leadership team to the village four times. The steering group stationed inthe village to carry out field research for six days, and selected and assigned two full-time cadres withoutstanding ability for paired assistance. Under the guidance of the Company's Rural RevitalizationSteering Group, cadres stationed in the village fully collaborated with the two village Party branches toprovide organizational guarantee for the comprehensive promotion of rural revitalization.B. Upgrade industrial assistance and increase income through production and marketing linkage. The"self-motivation-based" assistance model was continuously deepened. Based on the construction of thepaddy field fish farming base in Xiangtian Village, the production and operation model of "Party Branch+ Collective Company + Base + Farmers" was continued to achieve "dual-purpose water, multipleharvest from one field, increased food volume and efficiency, and win-win situation for food and fishery",and promote the scale-based development of the rice and fishery industry, integration of ecology andrural landscape. The Company adopted a village-enterprise cooperation approach to help XiangtianVillage sell special agricultural products, totaling CNY 210,000. In the Guntang Village, the Companycoordinated the village and a professional ranch operating company to build a model ranch, anddeveloped an integrated production and marketing chain of "production by farmers in Guntang Village -processing by the agricultural product company - sales by Luzhou Laojiao". The Company used its e-commerce platform, the party group service center and other online and offline vehicles to widelypublicize the products assisted, expanded the unique advantages of the Damaiwa yak as ageographical certified breed, and generated CNY 1,135,400 through activities such as "Creating Wealththrough Sales" and "purchase instead of donation". In addition, the Company created a collectiveeconomic income model of "guaranteed income + profit dividends", incorporated 101 households out ofpoverty into the income chain, allowed the collective and farmers to get cash for breeding, capital forshares buy-in and funds for development, and donated 10% of sales to the collective economy ofGuntang Village, which effectively opened up the "last mile" of the problem with the production andmarketing of poverty-alleviating products, and boosted the production and marketing linkage for ruralrevitalization to achieve substantial results.C. Consistently assist farmers in building up self-belief and provide them with necessary education tostimulate the self-motivation of villages. Adhering to the idea of "teaching people how to fish rather thanjust giving them fish" and aiming to cultivate "four" new types of farmers, the Company used farmers'night schools, special meetings, "Volunteer Activities for the Country People" and other carriers to carryout more than 20 lectures on agricultural knowledge and farming techniques to help farmers improvetheir scientific and cultural quality. By organizing unemployed youths and stable households out ofpoverty to participate in e-commerce training, the Company successfully cultivated a group of newfarmers and herdsmen who are dedicated to agriculture and know technology, as well as rural
revitalization leaders who are good at business and management, effectively driving villagers todevelop a path and increase income, and promoting the material and spiritual poverty alleviation of theassisted villages. The education assistance of "Pillars Project" was continuously implemented, andCNY 170,000 was invested to help 34 fresh high school graduates to attend university. For sevenconsecutive years, the Company has carried out the "Voluntary Education" campaign by sendingcourses, teaching aids and warmth to encourage students in rural areas to pursue their studies andprevent poverty from passing down from generation to generation. In addition, the Company organizedwarmth-sending and invested CNY 180,000 in Spring Festival care-extension activities, through which itsent warmth and care to 230 assisted households and more than 350 common farming households andfurther aroused their enthusiasm and initiative in getting rich.D. Take various steps in terms of infrastructure guarantees to solve the urgent and difficult problems ofthe masses. The Company's leadership team members and members of the rural revitalization groupvisited paired households and poor villagers for research, communicated with villagers face to face andheart to heart. A total of CNY 50,000 was invested throughout the year to upgrade the electricity supplyto 36 poor households to ensure safe utilization of electricity. The Company solidly promoted the pilotreform of the rural road management and maintenance system, assisted the government in promotingthe renovation of dangerous rural houses and earthquake resistant retrofitting, and improved thestandards and specifications for rural housing construction. Focusing on the problem of difficultemployment for the masses, the Company made efforts to coordinate multiple resources to secure 96public service jobs for 96 households out of poverty and low-income families from the assisted village,effectively solving the difficulties of living of unstable households in poverty alleviation and marginalhouseholds prone to poverty. Besides, the Company effectively fulfilled the caring and assistanceresponsibility, promoted the sharing of the fruits of development, and gathered the villagers' strength tomove forward.E. Continue to cultivate civilized rural style and enhance the overall spirit. The Company's experienceand advantages in brand culture promotion were fully leveraged to promote the civilized rural stylecultivation in an integrated manner. In the past two years, the Company has invested a total of CNY588,000 in special expenses to build a cultural square covering an area of 3,500 square meters inGuntang Village. Since the square was officially opened and operated in August 2022, a total of morethan ten activities have been carried out to disseminate intangible cultural heritage such as MaiwaGuozhuang Dance, Maiwa Tibetan Opera and Baiwang Playing and Singing, successfully makingMaiwa Village a popular scenic spot. The Company continuously promoted the formulation of rules andregulations, collaborated with the assisted villages to develop nine reporting requirements for partymembers and cadres to arrange for weddings and funerals, and gave full play to the leading anddemonstration role of party members and cadres to encourage local people to transform outmodedhabits and customs. To continuously expand civilization publicity, based on the characteristics of ethnicareas, the Company publicized filial piety, civilization, politeness and other traditional virtues throughmultiple channels such as regular household publicity by cadres stationed in the village, offline bulletinboards, WeChat group of villagers, broadcasting and telephone reminders. A total of 12 lectures andtraining sessions on grassland fire prevention, health knowledge, prevention of Internet fraud and otherthemes were carried out, and villagers were organized to participate in four special activities such as"moral model lecture", which promoted the mutual integration and promotion of good rural customs andmodern civilization, and the overall spirit of the villagers continued to improve.
3.3. Work Plan for Rural Revitalization in 2023
In 2023, the Company will strictly implement the arrangement of the central, provincial and municipalParty committees regarding effectively connecting consolidation and expansion of poverty alleviationachievements with rural revitalization, coordinate various resources and strengths to improve areas ofweakness, consolidate the achievements, lay the foundation and promote the revitalization, and takemultiple measures to resolutely fulfill the paired assistance responsibility. With greater determination,stronger commitment and more practical measures, the Company will comprehensively promote newprogress in rural revitalization and new levels in agricultural and rural modernization in assisted villages.A. Enhance the leadership of party building and consolidate the rural governance. The party branchesof the Company will continue to collaborate with the party branches of the assisted villages, and partyworkers will be selected to guide the standard implementation of policies such as the "three meetingsand one lecture" and organizational life meetings. The Company will help villages establish and improvea rural governance system that combines autonomy, rule of law and moral governance under theleadership of party organizations, promote grassroots party organizations in rural areas to publicize theParty's ideas, implement the Party's decisions, lead grassroots governance and unite and mobilize themasses, regulate the management of village affairs and support rural revitalization.B. Enhance the building of the assistance team to boost rural revitalization. The Company will strive toconsolidate the responsibilities of the assistance team stationed in the village, continuously improve thecomprehensive ability of the assistance cadres, and build a high-quality and responsible force for ruralrevitalization with excellent work style. In addition, it will strongly cooperate with the "two committees" ofthe village to consolidate and expand the results of poverty eradication, complete rural revitalizationtasks such as rural industrial development and spiritual civilization construction, and contribute to thecomprehensive rural revitalization from industry, talent, culture and ecology.C. Enhance consumption assistance and stimulate industrial development momentum. Relying on theresource and platform advantages, the Company will continue to integrate resources and coordinatethe integrated development of "livestock, production, promotion and sales" around special industriessuch as Maiwa yak, continuously enhance product promotion and development, promote the upgradingof industrial supporting facilities and the improvement of chains, and facilitate the effectivetransformation of the "geographical card" into a "treasure for wealth". It will continue to carry out"purchase instead of donation" campaign, and adopt market-oriented means to sign annual targetedpurchase agreements with the assisted counties for agricultural and sideline products, and bring high-quality agricultural products onto e-commerce platforms.D. Deepen employment assistance and enhance blood-creation momentum. In assisted villages, theCompany will establish a ledger of employment assistance for poverty-alleviation and low-incomefamilies, actively help them compete for public service jobs, and organize training on employment skillssuch as e-commerce and farming techniques to extensively cultivate training groups of wealthy leaders.Fully relying on the assistance projects, the Company will support unstable households in povertyalleviation and marginal households prone to poverty to develop yard economy and work to increaseincome according to local conditions. Additionally, the Company will identify, intervene and assistfarmers who are at risk of returning to poverty as early as possible to firmly guard the bottom line ofpreventing large-scale return to poverty.E. Advocate the transformation of outmoded habits and customs and promote a new style of civilization.The Company will enhance the promotion of the socialist core values and guide party members andcadres in assisted villages to update their ideology and form a diligent, civilized and healthy lifestyle. In
addition, the Company will cooperate with the assisted villages to continue to carry out activities rich inrural culture, such as the Guozhuang Dance and equestrian to enrich the spiritual and cultural life of thevillagers and promote the transformation into a harmonious, aggressive and good society.
Section VI Significant Events
1. Performance of undertakings
1.1. Undertakings of the Company's actual controller, shareholders, related partiesand acquirer, as well as the Company and other commitment makers fulfilled inthe reporting period or ongoing by the end of this reporting period
? Applicable ? N/ANo such cases in the reporting period.
1.2. Where any earnings forecast was made for any of the Company's assets orprojects and the reporting period is still within the forecast period, the Companyshall explain whether the performance of the asset or project reaches the earningsforecast and reasons
? Applicable ? N/A
2. Occupation of the Company's fund by the controlling shareholder orits related parties for non-operating purposes? Applicable ? N/ANo such cases in the reporting period.
3. Irregularities in the provision of guarantees
? Applicable ? N/ANo such cases in the reporting period.
4. Explanation of the board of directors regarding the latest "non-standard audit opinion"? Applicable ? N/A
5. Explanation of the board of directors, the board of supervisors andnon-executive directors (if any) regarding the "non-standard auditopinion" for the reporting period
? Applicable ? N/A
6. Reason for changes in accounting policies and accounting estimates,as well as correction of major accounting errors compared to thefinancial report for the prior year? Applicable □ N/A
| Content and reason for changes in accounting policies | Approval procedure | Remark |
| On 31 December 2021, the Ministry of Finance issued the Interpretation No. 15 of the Accounting Standards for Business Enterprises (C.K. [2021] No. 35), of which the “accounting treatment for the sale of products or by-products produced by an enterprise before the fixed assets reach their intended useable state or during the research and development process” and “judgment on loss-making contracts” were carried out by the Company from 1 January 2022. | N/A | These changes in accounting policies had no material impact on the consolidated financial statements of the Company. |
| On 30 November 2022, the Ministry of Finance issued the Interpretation No. 16 of the Accounting Standards for Business Enterprises (C.K. [2022] No. 31), of which the “accounting treatment of the income tax effects of dividends on financial instruments classified as equity instruments by the issuer” and “accounting treatment of the revision of cash-settled share-based payment to equity-settled share-based payment by an enterprise” were carried out by the Company from the date of publication. | N/A | These changes in accounting policies had no material impact on the consolidated financial statements of the Company. |
7. Reason for changes in scope of the consolidated financial statementscompared to the financial report for the prior year
? Applicable □ N/ASubsidiaries that are newly incorporated into the scope of consolidation in this period
| Name of subsidiary | Reason |
| Luzhou Laojiao International Trade (Hainan) Co., Ltd. | Incorporated through investment |
| Luzhou Laojiao Technology Innovation Co., Ltd. | Incorporated through investment |
Liquidation and cancellation for subsidiaries in this period
| Name of subsidiary | Reason |
| Luzhou Laojiao Bosheng Hengxiang Liquor Sales Co., Ltd. | Liquidation and cancellation |
| Luzhou Laojiao Tourism Culture Co., Ltd. | Liquidation and cancellation |
8. Engagement and disengagement of CPA firm
CPA firm at present
| Name of the domestic CPA firm | Sichuan Huaxin (Group) CPA Firm |
| The Company’s payment for the domestic CPA firm (CNY 10,000) | 98 |
| Consecutive years of the audit service provided by the domestic CPA firm | 24 |
| Names of the certified public accountants from the domestic CPA firm | Li Wulin, Tang Fangmo, Fan Bo |
| Consecutive years of the audit service provided by the certified public accountants | Li Wulin 3 years, Tang Fangmo 4 years, Fan Bo 1 year |
Whether the CPAs firm was changed in the current period? Yes ? No
Engagement of any CPAs firm for internal control audit, financial advisor or sponsor? Applicable ? N/AThe Company appointed Sichuan Huaxin (Group) CPA Firm as the internal control auditor for thisyear. The remuneration of audit in total paid by the Company was CNY 500 thousand.
9. Possibility of delisting after disclosure of this annual report
? Applicable ? N/A
10. Bankruptcy and reorganization
? Applicable ? N/ANo such cases in the reporting period.
11. Material litigation and arbitration
? Applicable ? N/A
| Profile of litigation (arbitration) | Amount involved in the case (CNY 10,000) | Whether it forms an estimate liability | Progress in litigation (arbitration) | Trial results and impacts of litigation (arbitration) | Execution of judgment of litigation (arbitration) | Date of disclosure | Disclosure index |
| The Company filed a lawsuit with ABC Changsha Yingxin Branch over a deposit dispute, and the case has been completed in the first instance of Hunan Province Higher People's Court and the final trial of the Supreme People's | 14,942.5 | No | The second trial has been concluded, and the case is now at the stage of enforcement. | For the losses that the Company cannot recover through criminal execution procedures, 40% shall be borne by ABC Changsha Yingxin Branch, 20% shall be borne by ABC Changsha | The Company applied to Hunan Province Higher People's Court for enforcement of the verdict. Hunan Province Higher People's Court ruled that Hunan Changsha Intermediate | 15 October 2014 | See Section VI “Other significant events” |
| Court. The case is now at the stage of enforcement. | Hongxin Branch and the rest shall be borne by the Company itself. | People’s Court should see to the execution of the verdict. Upon the enforcement, the banks have paid part of the compensations. | |||||
| The Company filed a lawsuit with ICBC Nanyang Zhongzhou Branch over a deposit dispute, and the case has been completed in the first instance of Henan Province Higher People's Court and the final trial of the Supreme People's Court. The case is now at the stage of enforcement. | 15,000 | No | The second trial has been concluded, and the case is now at the stage of enforcement. | ICBC Nanyang Zhongzhou Branch, ICBC Nanyang Branch, and Sanya Rural Commercial Bank Hongsha Branch shall pay compensations of CNY 75 million, CNY 7.5 million and CNY 6.105 million respectively with the relevant interest to the Company, and the rest of the loss shall be borne by the Company itself. | The banks have paid part of the compensations. As there was a dispute over the verdict, the Company applied to Henan Province Higher People's Court for enforcement of the verdict. Henan Province Higher People's Court ruled that Nanyang Intermediate People’s Court should see to the execution of the verdict. The case is now at the stage of enforcement by Nanyang Intermediate People’s Court. | 10 January 2015 | See Section VI “Other significant events” |
12. Punishments and rectifications
? Applicable ? N/ANo such cases in the reporting period.
13. Credit conditions of the Company as well as its controllingshareholder and actual controller
? Applicable ? N/A
14. Significant related party transactions
14.1. Related party transactions arising from routine operation? Applicable ? N/ANo such cases in the reporting period.
14.2. Related party transactions regarding purchase or sales of assets or equityinterests? Applicable ? N/A
No such cases in the reporting period.
14.3. Related party transitions arising from joint investments in external parties? Applicable ? N/ANo such cases in the reporting period.
14.4. Credits and liabilities with related parties
? Applicable ? N/ANo such cases in the reporting period.
14.5. Transactions with related finance companies
? Applicable ? N/AThe Company did not make deposits in, receive loans or credit from and was not involved in anyother finance business with any related finance company or any of its related parties.
14.6. Transactions between finance companies controlled by the Company andrelated parties? Applicable ? N/ANo related parties made deposits in, received loans or credit from or was involved in any otherfinance business with any finance company controlled by the Company.
14.7. Other significant related party transactions
? Applicable ? N/ANo such cases in the reporting period.
15. Significant contracts and their execution
15.1. Trusteeship, contracting and leasing
15.1.1. Trusteeship
? Applicable ? N/ANo such cases in the reporting period.
15.1.2. Contracting
? Applicable ? N/ANo such cases in the reporting period.
15.1.3. Leasing
? Applicable ? N/ANo such cases in the reporting period.
15.2. Major guarantees
? Applicable ? N/ANo such cases in the reporting period.
15.3. Entrusted cash asset management
15.3.1. Entrusted assets management
? Applicable ? N/AEntrusted assets management during the reporting period
Unit: CNY 10,000
| Type | Fund source for entrusted assets management | Amount of entrusted assets management | Undue balance | Overdue outstanding amount | Impairment allowances for the overdue outstanding amount |
| Wealth management product of bank | Own funds | 20,000 | 20,000 | 0 | 0 |
| Wealth management product of securities firm | Own funds | 100,000 | 60,000 | 0 | 0 |
| Wealth management product of trust company | Own funds | 40,000 | 30,000 | 0 | 0 |
| Others | Own funds | 20,000 | 0 | 0 | 0 |
| Total | 180,000 | 110,000 | 0 | 0 | |
Particulars of high risk wealth management products with a significant single amount or low securityor poor liquidity? Applicable ? N/A
Expected inability to recover the principal of entrusted assets management or other circumstancesthat may result in impairment? Applicable ? N/A
15.3.2 Entrust loans
? Applicable ? N/ANo such cases in the reporting period.
15.4. Other significant contracts
? Applicable ? N/ANo such cases in the reporting period.
16. Other significant events
? Applicable ? N/AThe Company disclosed in October 2014 and January 2015 respectively the contract disputesinvolving three savings deposits of CNY 500 million in total with banks including ABC ChangshaYingxin Branch and ICBC Nanyang Zhongzhou Branch. Upon criminal booty recovery, criminal andcivil enforcement, as of 31 December 2022, the Company had recovered a total amount of CNY 371million for the three disputes.
See details in the Company’s announcements:
| Date of announcement | No. | Catalogue | Official website |
15 October 2014
| 15 October 2014 | 2014-35 | Announcement of significant litigation | http://www.cninfo.com.cn/ |
| 12 November 2014 | 2014-41 | Announcement of significant litigation progress | |
| 6 December 2014 | 2014-43 | Announcement of significant litigation progress part II | |
| 10 January 2015 | 2015-1 | Announcement of significant events | |
| 4 February 2015 | 2015-4 | Announcement of significant events progress | |
| 25 March 2015 | 2015-11 | Announcement of significant litigation progress part III | |
| 18 April 2015 | 2015-20 | Announcement of significant litigation progress part IV | |
| 22 April 2015 | 2015-21 | Announcement of significant events progress part II | |
| 24 April 2015 | 2015-25 | Announcement of significant litigation progress part V | |
| 15 July 2015 | 2015-44 | Announcement of significant litigation progress part VI | |
| 22 July 2015 | 2015-45 | Announcement of significant litigation progress part VII | |
| 6 June 2018 | 2018-17 | Announcement of significant litigation progress part VIII | |
| 7 May 2019 | 2019-11 | Announcement of significant litigation progress part IX | |
| 17 May 2019 | 2019-13 | Announcement of significant litigation progress part X | |
| 24 March 2020 | 2020-6 | Announcement of significant litigation progress part XI | |
| 6 May 2020 | 2020-14 | Announcement of significant litigation progress part XII | |
| 7 November 2020 | 2020-34 | Announcement of significant litigation progress part XIII | |
| 6 July 2021 | 2021-30 | Announcement of significant litigation progress part XIV |
| 15 December 2021 | 2021-57 | Announcement of significant litigation progress part XV |
30 December 2021
| 30 December 2021 | 2021-64 | Announcement of significant litigation progress part XVI |
Note: The Company shall disclose other significant events that occurred during the reporting periodas stipulated in the Securities Law and the Administrative Measures for Disclosure of Information byListed Companies, as well as matters that the Board of Directors of the Company judges to besignificant events. If the aforesaid significant events have been disclosed on the designated websiteas current announcements, only the relevant search index of the designated website for informationdisclosure and the date of disclosure need to be stated.
17. Significant events of subsidiaries
? Applicable □ N/AThe Company invested in the technical upgrade program of intelligent brewing (Phase I) with thewholly-owned subsidiary, Brewing Company, as the implementer. The total investment amountapproximated CNY 4,782.5090 million. The program has been approved at the First ExtraordinaryGeneral Meeting of Shareholders of 2022 on 16 August 2022. For further information, seeAnnouncement No. 2022-24 on the Implementation of Luzhou Laojiao Technical Upgrade Project ofIntelligent Brewing (Phase I) by Subsidiary.
Section VII 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 | 247,921 | 0.02% | 7,142,624 | 7,142,624 | 7,390,545 | 0.50% | |||
| 1. Shares held by the state | |||||||||
| 2. Shares held by state-owned corporations | |||||||||
| 3. Shares held by other domestic investors | 247,921 | 0.02% | 7,142,624 | 7,142,624 | 7,390,545 | 0.50% | |||
| Of which: shares held by domestic corporations | |||||||||
| Shares held by domestic individuals | 247,921 | 0.02% | 7,142,624 | 7,142,624 | 7,390,545 | 0.50% | |||
| 4. Shares held by foreign corporations | |||||||||
| Of which: shares held by foreign corporations | |||||||||
| Shares held by foreign individuals | |||||||||
| II. Non-restricted shares | 1,464,504,555 | 99.98% | 0 | 1,464,504,555 | 99.50% | ||||
| 1.CNY common shares | 1,464,504,555 | 99.98% | 0 | 1,464,504,555 | 99.50% | ||||
| 2. Domestically listed foreign shares | |||||||||
| 3. Overseas listed foreign shares | |||||||||
| 4. Other | |||||||||
| III. Total shares | 1,464,752,476 | 100.00% | 7,142,624 | 7,142,624 | 1,471,895,100 | 100.00% |
Reasons for the change in shares?Applicable □ N/AA. On 29 December 2021, the Proposal on the Grant of Restricted Shares to Awardees was deliberatedand approved at the 12th Meeting of the 10th Board of Directors and the Sixth Meeting of the 10thSupervisory Committee. As such, it was decided to grant the restricted shares to eligible awardees andthe grant was completed and registered on 21 February 2022. A total of 6,862,600 restricted shareswere granted to 437 awardees as registered, which were listed on 22 February 2022.B. On 25 July 2022, the Proposal on the Grant of Reserved Restricted Shares to Awardees wasdeliberated and approved at the 18th Meeting of the 10th Board of Directors and the Ninth Meeting ofthe 10th Supervisory Committee, respectively. As such, it was decided to grant the restricted shares toeligible awardees and the grant was completed and registered on 26 September 2022. A total of342,334 restricted shares were granted to 46 awardees as registered, which were listed on 28September 2022.C. On 2 September 2022, the Proposal on the Repurchase and Retirement of Certain RestrictedShares and the Adjustment of Repurchase Price was deliberated and approved at the 22nd Meeting ofthe 10th Board of Directors and the 13th Meeting of the 10th Supervisory Committee. As such, theCompany decided to repurchase and retire the restricted shares held by awardees who were no longereligible which had been granted but not lifted from restricted sales. A total of 62,310 restricted sharesinvolving 7 awardees were repurchased and retired which was completed on 29 November 2022.D. On 29 December 2022, the Proposal on the Grant of Reserved Restricted Shares to Awardees wasdeliberated and approved at the 26th Meeting of the 10th Board of Directors and the 15th Meeting ofthe 10th Supervisory Committee, respectively. As such, it was decided to grant the restricted shares toeligible awardees and the grant was completed and registered on 16 February 2023. A total of 92,669restricted shares were granted to 17 awardees as registered, which were listed on 17 February 2023.
Approval of share changes?Applicable □ N/AA. On 29 December 2021, the Proposal on the Grant of Restricted Shares to Awardees was deliberatedand approved at the 12th Meeting of the 10th Board of Directors and the Sixth Meeting of the 10thSupervisory Committee. As such, it was decided to grant the restricted shares to eligible awardees andthe grant was completed and registered on 21 February 2022. A total of 6,862,600 restricted shareswere granted to 437 awardees as registered, which were listed on 22 February 2022. Upon thecompletion of this grant registration, the total share capital of the Company increased to 1,471,615,076shares from 1,464,752,476.B. On 25 July 2022, the Proposal on the Grant of Reserved Restricted Shares to Awardees wasdeliberated and approved at the 18th Meeting of the 10th Board of Directors and the Ninth Meeting ofthe 10th Supervisory Committee, respectively. As such, it was decided to grant the restricted shares toeligible awardees and the grant was completed and registered on 26 September 2022. A total of342,334 restricted shares were granted to 46 awardees as registered, which were listed on 28September 2022. Upon the completion of this grant registration, the total share capital of the Companyincreased to 1,471,957,410 shares from 1,471,615,076.C. On 2 September 2022, the Proposal on the Repurchase and Retirement of Certain RestrictedShares and the Adjustment of Repurchase Price was deliberated and approved at the 22nd Meeting ofthe 10th Board of Directors and the 13th Meeting of the 10th Supervisory Committee. As such, the
Company decided to repurchase and retire the restricted shares held by awardees who were no longereligible which had been granted but not lifted from restricted sales. A total of 62,310 restricted sharesinvolving 7 awardees were repurchased and retired which was completed on 29 November 2022. Uponthe completion of this grant registration, the total share capital of the Company increased to1,471,895,100 shares from 1,471,957,410.D. On 29 December 2022, the Proposal on the Grant of Reserved Restricted Shares to Awardees wasdeliberated and approved at the 26th Meeting of the 10th Board of Directors and the 15th Meeting ofthe 10th Supervisory Committee, respectively. As such, it was decided to grant the restricted shares toeligible awardees and the grant was completed and registered on 16 February 2023. A total of 92,669restricted shares were granted to 17 awardees as registered, which were listed on 17 February 2023.Upon the completion of this grant registration, the total share capital of the Company increased to1,471,987,769 shares from 1,471,895,100.
Transfer of share ownership? Applicable ? N/A
Effects of changes in shares on the basic EPS, diluted EPS, net assets per share attributable tocommon shareholders of the Company and other financial indexes over the last year and the lastreporting period? Applicable ? N/A
Other contents that the Company considers it necessary or required by the securities regulatoryauthorities to disclose? Applicable ? N/A
1.2 Changes in restricted shares
? Applicable □ N/A
Unit：Share
| Name of shareholder | Number of restricted shares held at the beginning of the reporting period | Increase in restricted shares during the reporting period | Decrease in restricted shares during the reporting period | Number of restricted shares held at the end of the reporting period | Reason for restriction | Date of unlocking |
| 2021 Restricted Share Incentive Plan | 0 | 7,142,624 | 0 | 7,142,624 | Restricted shares for equity incentive | In accordance with the relevant provisions governing lifting the restriction of the Company’s 2021 Restricted Share Incentive Plan |
| Total | 0 | 7,142,624 | 0 | 7,142,624 | -- | -- |
2. Issuance and listing of securities
2.1 Securities (excluding preferred shares) issued in the reporting period?Applicable □ N/A
| Name of stock and derivative securities | Date of offering | Offering price (or interest rate) | Number offered | Date of listing | Number approved for public trading | Date of termination of trading | Index to disclosed information | Date of disclosure |
| Stocks | ||||||||
| First grant of 2021 Restricted Share Incentive Plan | 22 February 2022 | CNY 92.71/share | 6,862,600 | 22 February 2022 | 6,862,600 | Announcement No. 2022-1 on the Completion of the Grant of Restricted Shares disclosed on www.cninfo.com.cn | 21 February 2022 | |
| Grant of reserved restricted shares for 2021 Restricted Share Incentive Plan | 28 September 2022 | CNY 89.466/share | 342,334 | 28 September 2022 | 342,334 | Announcement No. 2022-54 on the Completion of the Grant of Reserved Restricted Shares for 2021 Restricted Share Incentive Plan disclosed on www.cninfo.com.cn | 26 September 2022 | |
| Convertible corporate bonds, convertible corporate bonds with warrants, or corporate debt | ||||||||
| Other derivative securities | ||||||||
Notes to the offering of securities during the reporting periodA. On 29 December 2021, the Proposal on the Grant of Restricted Shares to Awardees was deliberatedand approved at the 12th Meeting of the 10th Board of Directors and the Sixth Meeting of the 10thSupervisory Committee. As such, it was decided to grant the restricted shares to eligible awardees andthe grant was completed and registered on 21 February 2022. A total of 6,862,600 restricted shares
were granted to 437 awardees as registered, which were listed on 22 February 2022. For details, seethe Announcement No. 2022-1 on the Completion of the Grant of Restricted Shares disclosed onwww.cninfo.com.cn.B. On 25 July 2022, the Proposal on the Grant of Reserved Restricted Shares to Awardees wasdeliberated and approved at the 18th Meeting of the 10th Board of Directors and the Ninth Meeting ofthe 10th Supervisory Committee, respectively. As such, it was decided to grant the restricted shares toeligible awardees and the grant was completed and registered on 26 September 2022. A total of342,334 restricted shares were granted to 46 awardees as registered, which were listed on 28September 2022. For details, see the Announcement No. 2022-54 on the Completion of the Grant ofReserved Restricted Shares for 2021 Restricted Share Incentive Plan disclosed on www.cninfo.com.cn.
2.2 Changes in total shares of the Company and the shareholder structure, as wellas the asset and liability structure?Applicable □ N/ADuring the Reporting Period, the total shares of the Company increased by 7,142,624 shares due to theimplementation of the 2021 Restricted Share Incentive Plan, among which, the grant, registration andlisting of 6,862,600 restricted shares for the first time and 342,334 reserved restricted shares werecompleted on 22 February and 28 September 2022, respectively; and the repurchase and retirement of62,310 restricted shares was completed on 29 November 2022.
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 at the end of the reporting period | 111,220 | Total number of common shareholders at the prior month-end before the disclosure date of the annual report | 86,898 | Total number of preferred shareholders with resumed voting rights by the end of the reporting period (if any)(see Note 8) | 0 | Total number of preferred shareholders with resumed voting rights by the end of the reporting period (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 by the end of the reporting period | Increase/decrease during the reporting period | Number of holding restricted shares | Number of holding non-restricted shares | Pledged, marked or frozen shares | |
| Status of shares | Number of shares | |||||||
| Luzhou Laojiao Group Co., Ltd. | State-owned corporation | 25.89% | 381,088,389 | 0 | 0 | 381,088,389 | ||
| Luzhou XingLu Investment Group Co., Ltd. | State-owned corporation | 24.86% | 365,971,142 | 0 | 0 | 365,971,142 | ||
| Bank of China Co., Ltd. – Baijiu index classification securities investment fund by China Merchants Fund | Other | 3.13% | 46,076,226 | -1,019,108 | 0 | 46,076,226 | ||
| Hong Kong Securities Clearing Company Limited | Outbound corporation | 3.10% | 45,612,656 | 10,172,568 | 0 | 45,612,656 | ||
| China Securities Finance Corporation Limited | Other | 2.30% | 33,842,059 | 0 | 0 | 33,842,059 | ||
| Bank of China Co., Ltd.－Blue chip selected hybrid securities investment fund by E Fund | Other | 1.56% | 22,930,000 | -3,070,000 | 0 | 22,930,000 | ||
| Industrial and Commercial Bank of China Co., Ltd.-Newly growth hybrid securities investment fund by Invesco Great Wall | Other | 1.20% | 17,673,777 | -1,526,223 | 0 | 17,673,777 | ||
| Central Huijin Asset Management Co., Ltd. | State-owned corporation | 0.92% | 13,539,862 | 0 | 0 | 13,539,862 | ||
| Agricultural Bank of China Co., Ltd. - Consumption industry stock - based securities investment fund by E | Other | 0.72% | 10,573,293 | 0 | 0 | 10,573,293 | ||
| Fund | ||||||||
| China Life Insurance Company Limited-Tradition-common insurance product-005L－CT001 Shen | Other | 0.58% | 8,594,014 | / | 0 | 8,594,014 | ||
| Strategic investors or general corporations become the top-ten shareholders due to placing of new shares（if any）（see note 3） | N/A | |||||||
| Related parties or acting-in-concert | 1. Luzhou Laojiao Group Co., Ltd. and Luzhou XingLu Investment Group Co., Ltd. are both holding state-owned companies under the jurisdiction of SASAC of Luzhou. The two companies signed the agreement of persons acting in concert on 31 December 2015. For details, please refer to the announcement of the Company on 5 January 2016 - Announcement on the agreement of persons acting in concert signed by shareholders. The announcement number is 2016-1 (http://www.cninfo.com.cn/). The two companies signed the renewed agreement of persons acting in concert on 27 May 2021. For details, please refer to the announcement of the Company on 29 May 2021 - Announcement on the renewed agreement of persons acting in concert signed by shareholders. The announcement number is 2021-18 (http://www.cninfo.com.cn/). 2. In addition, whether there is an association between the remaining shareholders or they belong to persons acting in concert is unknown. | |||||||
| Explain if any of the shareholders above was involved in entrusting/being entrusted with voting rights or waiving voting rights | N/A | |||||||
| Special account for repurchased shares among the top 10 shareholders (if any) (see note 10) | N/A | |||||||
| Shareholdings of the top 10 non-restricted shareholders | ||||||||
| Name of shareholder | Number of non-restricted shares held in by the end of the reporting period | Type of shares | ||||||
| Type | Number | |||||||
| Luzhou Laojiao Group Co., Ltd. | 381,088,389 | CNY common shares | 381,088,389 | |||||
| Luzhou XingLu Investment Group Co., Ltd. | 365,971,142 | CNY common shares | 365,971,142 | |||||
| Bank of China Co., Ltd. – Baijiu index classification securities investment fund by China Merchants Fund | 46,076,226 | CNY common shares | 46,076,226 | |||||
| Hong Kong Securities Clearing Company Limited | 45,612,656 | CNY common shares | 45,612,656 | |||||
| China Securities Finance Corporation Limited | 33,842,059 | CNY common shares | 33,842,059 | |||||
| Bank of China Co., Ltd.－Blue chip selected hybrid securities investment fund by E Fund | 22,930,000 | CNY common shares | 22,930,000 | |||||
| Industrial and Commercial Bank of China Co., Ltd.-Newly growth hybrid securities investment fund by Invesco Great Wall | 17,673,777 | CNY common shares | 17,673,777 | |||||
| Central Huijin Asset Management Co., Ltd. | 13,539,862 | CNY common shares | 13,539,862 | |||||
| Agricultural Bank of China Co., Ltd. - Consumption industry stock - based securities investment fund | 10,573,293 | CNY common shares | 10,573,293 | |||||
| by E Fund | |||
| China Life Insurance Company Limited-Tradition-common insurance product-005L－CT001 Shen | 8,594,014 | CNY common shares | 8,594,014 |
| The statement of association or acting-in-concert between the top 10 shareholders of unrestricted shares and between the top 10 shareholders of unrestricted shares and top 10 shareholders | See the table above | ||
| Top 10 common shareholders participating in securities margin trading (if any) (see note 4) | N/A | ||
Did any of the top 10 common shareholders or the top non-restricted common shareholders of theCompany conduct any promissory repurchase during the reporting period.
□Yes ? No
The top 10 non-restricted common shareholders, the top10 common shareholders did not conduct anypromissory repurchase during the reporting period.
3.2 Controlling shareholder
Nature of controlling shareholder：Local state-ownedType of controlling shareholder：Corporation
| Name of controlling shareholder | Legal representative/Company principal | Date of establishment | Credibility code | Main business scope |
| Luzhou Laojiao Group Co., Ltd. | Liu Miao | 21 December 2000 | 91510500723203346U | General project: Social economy consulting services; business management consulting; financial consulting; business headquarters management; import and export agency; trade brokerage; crops planting services; trees planting operation; elder care services; tourism development project planning and consulting; technical agency services; engineering and technological research and experimental development; display device manufacturing; supply chain management services; technical services, technical development, technical consulting, technical communication, technical transfer, and technical promotion; domestic freight transport agency; and equity fund-invested asset management services. It shall also include licensed projects (business activities can be carried out legally and independently with business license in addition to projects that must be approved by law): Agency bookkeeping; career intermediary activities; food production; food sales; and medical services. (business activities that |
| require approval in accordance with laws can be carried out upon approval of relevant authorities, and the specific business projects shall be subject to the approval document or license of relevant departments) | ||
| Shareholdings of the controlling shareholder in other controlled or non-controlled listed companies at home or abroad during the reporting period | 1. As of 30 June 2022, Laojiao Group holds 70,406,310 shares of Luzhou Xinglu Water (Group) Co., Ltd. (02281.HK), accounting for 8.19% of the total issued shares. 2. As of 30 September 2022, Laojiao Group holds 212,954,666 shares of Hongli Zhihui Group Co., Ltd. (300219.SZ) through its wholly-owned subsidiary, Sichuan Jinduo investment Co., Ltd., accounting for 30.08% of the total issued shares. 3. As of 30 September 2022, Laojiao Group holds 475,940,143 shares of Huaxi Securities Co., Ltd. (002926.SZ), accounting for 18.13% of the total issued shares. 4. As of 31 December 2022, Laojiao Group holds 390,528,000 shares of Luzhou Bank (01983.HK), accounting for 14.37% of the total issued shares. | |
Change of the controlling shareholder during the reporting period
□Applicable ? N/A
No 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 Administration CommissionType of actual controller：Corporation
| Name of actual controller | Legal representative/Company principal | Date of establishment | Credibility code | Main business scope |
| SASAC of Luzhou | Du Lei | 1 March 2005 | 11510400771686813T | State-owned assets supervision and administration department |
| Share holdings of the controlling shareholder in other controlled or non-controlled listed companies at home or abroad during the reporting period. | 1. As of 30 June 2022, XingLu Group, a controlled subsidiary of SASAC of Luzhou, holds 511,654,127 shares of Luzhou Xinglu Water (Group) Co., Ltd. (02281.HK), accounting for 59.51% of the total issued shares. Luzhou Infrastructure Construction Investment Co., Ltd., a holding subsidiary of XingLu Group, holds 62,709,563 shares of Luzhou Xinglu Water (Group) Co., Ltd. (02281.HK), and accounting for 7.29% of the total issued shares. Laojiao Group, a controlled subsidiary under SASAC of Luzhou, holds 70,406,310 shares of Luzhou Xinglu Water (Group) Co., Ltd. (02281.HK), accounting for 8.19% of the total issued shares. 2. As of 30 September 2022, Laojiao Group holds 212,954,666 shares of Hongli Zhihui Group Co., Ltd. (300219.SZ) through its controlled subsidiary, Sichuan Jinduo investment Co., Ltd., accounting for 30.08% of the total shares issued. 3. As of 30 September 2022, Luzhou Industrial Investment Group Co., Ltd., a holding Company under the jurisdiction of SASAC of Luzhou, holds 193,464,610 shares of Sichuan Lutianhua Company Limited (000912.SZ), accounting for 12.34% of the total shares issued. Lutianhua Group Company Limited, a wholly-owned subsidiary of Luzhou Industrial Investment Group Co., Ltd., holds 221,458,993 shares of Sichuan Lutianhua Company Limited (000912.SZ), and accounting for 13.49% of the total issued shares. 4. As of 30 September 2021, Laojiao Group, a controlled subsidiary under SASAC of Luzhou, holds 475,940,143 shares of Huaxi Securities Co., Ltd. (002926.SZ), accounting for 18.13% of the total issued shares. 5. As of 31 December 2022, Laojiao Group, a controlled subsidiary under SASAC of Luzhou, holds 325,440,000 shares of Luzhou Bank (01983.HK), accounting for 14.37% of the total issued shares. XingLu Group, a controlled subsidiary under SASAC of Luzhou, holds 40,549,462 shares of Luzhou Bank (01983.HK), accounting for 1.79% of the total issued shares. | |||
Change of the actual controller during the reporting period
□Applicable ? N/A
The actual controller of the Company has not changed during the reporting period.
Ownership and control relations between the actual controller and the Company
The actual controller control the company through a trust or other ways of assets management
□Applicable ? N/A
3.4 Number of accumulative pledged shares held by the company’s controllingshareholder or the largest shareholder as well as its acting-in-concert partiesaccounts for 80% of all shares of the company held by them
□Applicable ? N/A
3.5 Other corporate shareholders with a shareholding proportion over 10%?Applicable □ N/A
| Name of corporate shareholder | Legal representative/Company principal | Date of establishment | Registered capital (CNY) | Main business scope |
| Luzhou XingLu Investment Group Co., Ltd. | Dai Zhiwei | 28 January 2003 | 4,934,049,244 | Investment and asset management; project management services; self-finance real estate business activities; investment advisory services and financial advisory services (excluding such financial activities as illegal capital raising and collecting public funds) (business activities that require approval in accordance with laws can be carried out upon approval of relevant authorities) |
3.6 Limits on reduction of the Company’s shares held by its controlling shareholder,actual controller, restructuring party and other commitment entities.
□Applicable ? N/A
4. Specific implementation of share repurchase during the reportingperiodImplementation progress of shares repurchases
□Applicable ? N/A
Implementation progress of share buyback reduction through centralized bidding
□Applicable ? N/A
Section VIII Preferred Shares
□Applicable ? N/A
No preferred stock in the Company during the reporting period.
Section IX Information about Bond
? Applicable ? N/A
1. Enterprise bonds
? Applicable ? N/ANo such cases in the reporting period.
2. Corporate bonds
? Applicable ? N/A
2.1. Basic information about the corporate bond
Unit: CNY
| Name | Abbr. | Code | Issue date | Value date | Due date | Bond balance | Interest rate | Way of redemption | Place of trading |
| 2019 Public Offering of Corporate Bond of Luzhou Laojiao Co., Ltd. for Qualified Investors (Phase I) | 19 Lao Jiao 01 | 112959.SZ | 27 August 2019 | 28 August 2019 | 28 August 2022 | 2,500,000,000.00 | 3.58% | Fully redeemed on 29 August 2022 | Shenzhen Stock Exchange |
| 2020 Public Offering of Corporate Bond of Luzhou Laojiao Co., Ltd. for Qualified Investors (Phase I) | 20 Lao Jiao 01 | 149062.SZ | 16 March 2020 | 17 March 2023 | 17 March 2025 | 1,500,000,000.00 | 3.50% | In terms of the bonds of this phase, interests will be paid by year and the principal will be repaid in lump sum at maturity. The interests | Shenzhen Stock Exchange |
| will be paid once every year and the interests for the last installment will be paid together with the principal. | |||||||||
| 2022 Public Offering of Corporate Bond of Luzhou Laojiao Co., Ltd. for Professional Investors (Phase I) | 22 Lao Jiao 01 | 148133.SZ | 2 December 2022 | 2 December 2022 | 2 December 2025 | 1,500,000,000.00 | 2.85% | In terms of the bonds of this phase, interests will be paid by year and the principal will be repaid in lump sum at maturity. The interests will be paid once every year and the interests for the last installment will be paid together with the principal. | Shenzhen Stock Exchange |
| Appropriate arrangement of the investors (if any) | The bonds are applicable to eligible investors who have qualified securities accounts with Shenzhen Branch of China Securities Depository and Clearing Co., Ltd., are permitted to engage in the subscription and transfer of corporate bonds in accordance with the Management Measures for the Issue and Transaction Management of Corporate Bonds, Management Measures for the Suitability of Securities and Futures Investors, Management Measures of Shenzhen Stock Exchange for the Suitability of Securities Market Investors, and relevant laws and regulations, and have the corresponding risk identification and bearing capacity (excluding those prohibited by laws and regulations) | ||||||||
| Trading systems applicable | Tradable by way of bidding, offering, inquiry and agreement | ||||||||
| Risk of termination of listing and trading (if any) and countermeasures | N/A | ||||||||
Overdue bonds
□Applicable ? N/A
2.2. Triggering and execution of issuer or investor option clauses and investorprotection clauses
□Applicable ? N/A
2.3. Information about the intermediaries
| Bond | Intermediary | Office address | Signature accountant | Contact person of intermediary | Contact number |
| 2019 Public Offering of Corporate Bond of Luzhou Laojiao Co., Ltd. for Qualified Investors (Phase I)/ 2020 Public Offering of Corporate Bond of Luzhou Laojiao Co., Ltd. for Qualified Investors (Phase I)/ 2022 Public Offering of Corporate Bond of Luzhou Laojiao Co., Ltd. for Professional Investors (Phase I) | China International Capital Corporation Limited. | 33rd Floor, China World Office 2, No. 1 Jianguomenwai Avenue, Chaoyang District, Beijing | N/A | Qi Qin | (010)65051166 |
| 2019 Public Offering of Corporate Bond of Luzhou Laojiao Co., Ltd. for Qualified Investors (Phase I)/ 2020 Public Offering of Corporate Bond of Luzhou Laojiao Co., Ltd. for Qualified Investors (Phase I) / 2022 Public Offering of Corporate Bond of Luzhou Laojiao Co., Ltd. for Professional Investors (Phase I) | China Chengxin International Credit Rating Co., Ltd. | Building 6, Galaxy SOHO, No.2 Nanzhugan hutong, Chaoyangmennei Avenue, Dongcheng District, Beijing | N/A | Sun Shu | (010)66428877 |
Indicate by tick mark whether above intermediaries changed in the reporting period
□Yes ? No
2.4. List of the usage of the raised funds
Unit: CNY
| Bonds | Total amount | Amount spent | Unused amount | Operation of special account for raised funds (if any) | Rectification of raised funds for violation operation (if any) | Whether is consistent with the usage, using plan and other agreements stipulated in the raising specification |
| 2019 Public Offering of Corporate Bond of Luzhou Laojiao Co., Ltd. for Qualified Investors (Phase I) | 2,500,000,000.00 | 2,530,818,423.111 | 0.00 | Fully redeemed in August 2022. The company has set up a special account to deposit the funds raised and has signed a fund account supervision agreement to clarify it. The special account for fund raising was operating normally during the Reporting Period. (1) Account name: Luzhou Laojiao Co., Ltd.; Opening bank: Guangfa Bank Co., Ltd., Chengdu Branch; Bank account: 9550880046723000135. (2) Account name: Luzhou Laojiao Co., Ltd.; Opening bank: Bank of Communications Co., Ltd., Luzhou Branch; Bank account: 517517460013000000860. (3) Account name: Luzhou Laojiao Co., Ltd.; Opening bank: China Merchants Bank Co., Ltd., Chengdu Fucheng Avenue Sub-branch; Bank account: 028900140410888. (The bonds have been fully redeemed on 29 August 2022) | N/A | Yes |
| 2020 Public Offering of Corporate Bond of Luzhou Laojiao Co., Ltd. for Qualified Investors (Phase I) | 1,500,000,000.00 | 861,042,216.81 | 714,356,703.50 | The company has set up a special account to deposit the funds raised and has signed a fund account supervision agreement to clarify it. The special account for fund raising was operating normally during the Reporting Period. (1) Account name: Luzhou Laojiao Co., Ltd.; Opening bank: Guangfa Bank Co., Ltd., Chengdu Branch; Bank account: 9550880046723000135. (2) | N/A | Yes |
| Account name: Luzhou Laojiao Co., Ltd.; Opening bank: Bank of Communications Co., Ltd., Luzhou Branch; Bank account: 517517460013000000860. (3) Account name: Luzhou Laojiao Co., Ltd.; Opening bank: China Minsheng Bank Co., Ltd., Chengdu Branch; Bank account: 631395395. | ||||||
| 2022 Public Offering of Corporate Bond of Luzhou Laojiao Co., Ltd. for Professional Investors (Phase I) | 1,500,000,000.00 | 1,498,800,000.002 | 0.00 | Luzhou Laojiao Co., Ltd.; Opening bank: China Merchants Bank Co., Ltd., Chengdu Fucheng Avenue Sub-branch; Bank account: 028900140410888. | N/A | Yes |
Note 1: Including accumulated interest income of CNY 40,825,632.44, net of issue costs of CNY10,000,000 and accumulated handling expenses of CNY 7,209.33.Note 2: Deducted the issue costs of CNY 1,200,000.
The raised funds were used for project construction?Applicable □ N/AThe Company raised a fund of CNY 4.0 billion through the issue of corporate bonds respectively on 27August 2019 and 16 March 2020. After deduction of the issue fees, the balance amount was set to usein the technical renovation project of brewing (Phase II), Project of Intelligent Upgrading and Building ofthe Information Management System, Project of Acquiring Sealing Equipment for the Cellar of HuangyiBrewing Base and Project of Acquiring Accessory Equipment for Leaven Making for Huangyi BrewingBase. As of 31 December 2022, CNY 3,391,860,600 of the fund-raising through the issue of corporatebonds had been used.
The Company changed the usage of above funds raised from bonds during the reporting period.
□Applicable ? N/A
2.5. Changes in credit ratings in the reporting period
□Applicable ? N/A
2.6. Execution and changes with respect to guarantees, repayment plans and otherrepayment-ensuring measures in the reporting period, as well as the impact on theinterests of bond holders
□Applicable ? N/A
3. Debt instruments as a non-financial enterprise
□Applicable ? N/A
No such cases in the reporting period.
4. Convertible corporate bonds
□Applicable ? N/A
No such cases in the reporting period.
5. Consolidated loss of the reporting period over 10% of net assets as atthe end of last year
□Applicable ? N/A
6. Matured interest-bearing debt excluding bonds up the period-end
□Applicable ? N/A
7. Whether there was any violation of rules and regulations during thereporting period
□Yes ? No
8. The major accounting data and the financial indicators of the recent 2years of the company as of the end of the reporting period
Unit：CNY 10,000
| Item | 31 December 2022 | 31 December 2021 | Change |
| Current ratio | 3.15 | 2.43 | 29.63% |
| Debt/asset ratio | 33.19% | 34.89% | -1.70% |
| Quick ratio | 2.20 | 1.74 | 26.44% |
| 2022 | 2021 | Change | |
| Net profits before non-recurring gains and losses | 1,032,148.12 | 788,438.41 | 30.91% |
| EBITDA/debt ratio | 235.37% | 277.43% | -42.06% |
| Interest cover (times) | 61.28 | 49.41 | 24.02% |
| EBITDA-to-interest cover (times) | 64.08 | 52.01 | 23.21% |
Section X Financial Report
1. Auditor’s report
| Type of audit report | Standard without reserved opinion |
| Signing date of auditor’s report | 28 April 2023 |
| Name of Audit | Sichuan Huaxin (Group) CPA Firm |
| No. of auditor’s report | Chuan Huaxin Audit [2023] No. 0042 |
| Names of auditors | Li Wulin, Tang Fangmo, Fan Bo |
Auditor’s ReportTo the shareholders of Luzhou Laojiao Co., Ltd.:
OpinionWe have audited the financial statements of Luzhou Laojiao Co., Ltd. (hereinafter referred to as the“Company”), which comprise the consolidated balance sheet and balance sheet as at 31 December2022, consolidated income statement and income statement, consolidated cash flow statement andcash 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, in accordancewith Accounting Standards for Business Enterprises and present fairly the financial position of thecompany as at 31
December 2022 and its operating results and cash flow for the year then ended.
Basis for opinionWe conducted our audit in accordance with China Standards on Auditing (“CSAs”) for Certified PublicAccountants. Our responsibilities under those standards are further described in the Auditor'sResponsibilities for the Audit of the Financial Statements section of our report. We are independent ofthe Company in accordance with the Code of professional ethics for Certified Public Accountants inChina (“the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in ouraudit of the consolidated financial statements of the current period. These matters were addressed inthe context of our audit of the consolidated financial statements as a whole and, in forming our opinionthereon, and we do not provide a separate opinion on these matters. Key audit matters identified in ouraudit are summarized as follows:
| 1. Key audit matters-Recognition of domestic baijiu sales revenue | |
| Key audit matters | How our audit addressed the Key Audit Matter |
| As shown in Note 5.36 in the Financial Statements, the domestic baijiu sales revenue in the Company is CNY 24,613,436,200, accounting for 99.38% of the primary business revenue of CNY 24,766,122,000. It is the main source of the Company's operating profit. For the operating revenue is one of the key results indicators and the inherent risk of its misstatement is relatively high, therefore, we identified the recognition of domestic baijiu sales revenue as a key audit matter. | Our procedures in relation to recognition of domestic baijiu sales revenue included: 1. Understood, evaluated and tested the reasonableness and effectiveness of the internal control design related to the Company's revenue. Particular attention was paid to the appropriateness of specific conditions for recognition of revenue. 2. Compared the key indicators such as sales volume, unit price of sales and gross profit rate of the Company in the current period with those in the previous period, so as to identify the rationality of changes in key indicators and reasons for changes. 3. The income of the top five customers accounted for 67.09% of the total business income. For main customers, we carried out the following audit procedures to verify the occurrence, completeness and accuracy of the revenue recognized by the management: (1) Obtained the sales contract signed by the Company and the customer, carefully read the key terms of the contract, and understand the implementation of the contract; (2) Performed the confirmation procedure. We sent confirmation letters to verify the amount of sales revenue in the reporting period and the closing balance of accounts receivables or contract liabilities during the reporting period. For local customers in Luzhou, we went to their office to carry out confirmation procedure and obtained the situation of purchase, sales and storage of Luzhou Laojiao brand baijiu during the reporting period, so as to analyze and judge whether there are abnormal fluctuations in its inventory and its rationality; For customers outside Luzhou, we mailed confirmation letters and controlled the whole process of reply letter by ourselves. (3) Inquired the customer's business information and key personnel information, and checked whether they are related party of the Company. 4. For other customers, randomly checked sales contracts, customers' purchase orders, shipping documents, transport documents, accounting vouchers, payment receipts, customer signature records and other materials to verify the occurrence, completeness and accuracy of the revenue recognized by the management. 5. Selected the confirmation voucher of large amount of sales before and after the balance sheet date, paid attention to the date of sales invoice and customer receipt, and paid attention to whether there is a large amount of return after the period, so as to verify |
| whether the corresponding revenue is included in the appropriate accounting period. The evidence obtained from the above audit procedures can support the Company's management's recognition of domestic baijiu sales revenue. | |
| 2. Key audit matters-Existence of bank deposits | |
| Key audit matters | How our audit addressed the Key Audit Matter |
| As shown in Note 5.1 in the Financial Statements, as of 31 December 2022, the bank balance of the Company is CNY 17,729,643,100, accounting for 34.50% of the total assets. Bank deposits are high-risk assets. Therefore, we identified the existence of bank deposits as a key audit matter. | Our procedures in relation to existence of bank deposits included: 1. Understood and tested the design and implementation of key internal controls related to the funds management cycle to confirm the effectiveness of relevant internal controls. 2. Accompanied by relevant personnel of the Company, auditors went to the bank by themselves where the Company opens a basic bank account to print the account opening list of the Company and check the account opening information individually. 3. Checked the carrying amount of all bank accounts with the original amount of bank statements and certificates of deposit, and obtained all copies. 4. Based on the results of checking the amount of bank statements, obtained the balance reconciliation of all bank accounts compiled by the Company, and check all the outstanding items, whether there are any important overdue items that are not booked in time. 5. Implemented the confirmation procedure for the Company's bank deposits, the confirmation letters were sent out by mailing after auditors checked the address and the receiver through telephone, network and other public information, and we controlled the whole reply letter process by ourselves. 6. Obtained and reviewed time deposits or structured deposit agreements, identified the types of relevant bank deposits, analyzed the principal and interest recovery risks, and judged the adequacy of the disclosure. 7. Inquired the management and relevant personnel about the purpose of all bank accounts on the Company's books and analyzed whether there are abnormal use or bank accounts opened for unknown reasons. The evidence obtained from the above audit procedures can support the Company's management's assertion of the existence of bank deposits. |
Other informationThe directors of the Company are responsible for the other information. The other informationcomprises the information included in the annual report, but does not include the financial statementsand our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do not express anyform of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent with thefinancial statements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.
If, based on the work we have performed, we conclude that there is a material misstatement of thisother information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of directors and those charged with governance for the financial statementsThe directors of the Company are responsible for the preparation of the financial statements that give atrue and fair view in accordance with the disclosure requirements of Accounting Standards for BusinessEnterprises, and designing, implementing and maintaining internal control that is necessary to ensurethe financial statements are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Company’s abilityto continue as a going concern, disclosing, as applicable, matters related to going concern and usingthe going concern basis of accounting unless the directors either intend to liquidate the Company or tocease operations, or have no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reportingprocess.
Auditor's responsibilities for the audit of the financial statementsOur objectives are to obtain reasonable assurance about whether the financial statements as a wholeare free from material misstatement, whether due to fraud or error, and to issue an auditor’s report thatincludes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that anaudit conducted in accordance with CSAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if, individually or in theaggregate, 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 and maintainprofessional skepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain auditevidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting amaterial misstatement resulting from fraud is higher than for one resulting from error, as fraud mayinvolve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit proceduresthat are appropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of the Company’s internal control.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accountingestimates and related disclosures made by the directors.
(4) Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,based on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Company’s ability to continue as a going concern. Ifwe conclude that a material uncertainty exists, we are required to draw attention in our auditor’s reportto the related disclosures in the financial statements or, if such disclosures are inadequate, to modifyour opinion. Our conclusions 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 to continue as a goingconcern.
(5) Evaluate the overall presentation, structure and content of the financial statements, and whether thefinancial statements represent the underlying transactions and events in a manner that achieves fairpresentation.
(6) Obtain sufficient and appropriate audit evidence regarding the financial information of the entities orbusiness activities within the Company to express an opinion on the financial statements. We areresponsible for the direction, supervision and performance of the group audit. We remain solelyresponsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the plannedscope and timing of the audit and significant audit findings, including any significant deficiencies ininternal control that we identify during our audit.
We also provide the governance with a statement that we have complied with relevant ethicalrequirements regarding independence, and to communicate with them all relationships and othermatters that may reasonably be thought to bear on our independence, and where applicable, relatedsafeguards.
From the matters communicated with the governance, we determine those matters that were of mostsignificance in the audit of the consolidated financial statements of the current period and are thereforethe key audit matters. We describe these matters in our auditor’s report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we determinethat a matter should not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of such communication.
Sichuan Huaxin (Group) CPA Firm Chinese CPA: Li Wulin(Engagement Partner)Chengdu·China Chinese CPA: Tang FangmoChinese CPA: Fan Bo28 April 2023
2. Financial statements
Monetary unit for the financial statements and the notes thereto: CNYPrepared by: Luzhou Laojiao Co., Ltd.
Consolidated balance sheetAs at 31 December 2022
Monetary Unit: CNY
| Item | Balance as at 31 December 2022 | Balance as at 1 January 2022 |
| Current assets: | ||
| Cash and cash equivalents | 17,757,528,211.25 | 13,513,494,580.56 |
| Settlement reserves | ||
| Lending funds | ||
| Held-for-trading financial assets | 1,073,466,780.37 | 706,352,241.79 |
| Derivative financial assets | ||
| Notes receivables | ||
| Accounts receivables | 5,939,420.78 | 1,628,248.55 |
| Accounts receivables financing | 4,583,352,503.37 | 4,757,631,778.64 |
| Prepayment | 114,257,506.26 | 178,087,688.81 |
| Premiums receivable | ||
| Reinsurance accounts receivable | ||
| Reinsurance contract reserve | ||
| Other receivables | 23,396,533.98 | 28,615,361.96 |
| Including：Interests receivable | ||
| Dividends receivable | ||
| Buying back the sale of financial assets | ||
| Inventories | 9,840,742,374.85 | 7,277,573,166.80 |
| Contract assets | ||
| Assets held for sale | ||
| Non-current assets due within one year | ||
| Other current assets | 153,035,946.94 | 111,974,532.91 |
| Total current assets | 33,551,719,277.80 | 26,575,357,600.02 |
| Non-current assets: | ||
| Disbursement of loans and advances | ||
| Investments in debt obligations | ||
| Investments in other debt obligations | ||
| Long-term receivables | ||
| Long-term equity investments | 2,667,500,553.17 | 2,626,744,236.25 |
| Investments in other equity instruments | 1,136,736,978.11 | 363,312,120.43 |
| Other non-current financial assets | ||
| Investment property | 39,149,454.22 | |
| Fixed assets | 8,856,258,598.78 | 8,089,487,274.39 |
| Construction in progress | 808,919,047.21 | 1,259,845,487.50 |
| Productive biological assets |
| Oil and gas assets | ||
| Use right assets | 39,952,525.63 | 52,714,810.04 |
| Intangible assets | 3,083,271,852.79 | 2,606,359,188.72 |
| Development expenses | ||
| Goodwill | ||
| Long-term deferred expenses | 710,010.92 | 1,463,869.21 |
| Deferred tax assets | 1,005,167,353.80 | 986,112,983.42 |
| Other non-current assets | 196,095,702.09 | 650,384,435.70 |
| Total non-current assets | 17,833,762,076.72 | 16,636,424,405.66 |
| Total assets | 51,385,481,354.52 | 43,211,782,005.68 |
| Current liabilities: | ||
| Short-term loans | ||
| Borrowings from the central bank | ||
| Loans from other banks | ||
| Held-for-trading financial liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | ||
| Accounts payable | 2,311,665,585.04 | 2,420,354,469.53 |
| Advance from customer | ||
| Contract liabilities | 2,566,374,718.76 | 3,510,110,701.25 |
| Financial assets sold for repurchase | ||
| Deposits from customers and inter-bank | ||
| Customer brokerage deposits | ||
| Securities underwriting brokerage deposits | ||
| Employee benefits payable | 675,034,885.31 | 648,103,740.96 |
| Taxes payable | 3,481,150,728.98 | 3,173,479,627.79 |
| Other payable | 1,202,409,278.49 | 652,393,292.60 |
| Including：Interests payable | ||
| Dividends payable | 16,594,850.58 | |
| Handling charges and commissions payable | ||
| Reinsurance accounts payable | ||
| Liabilities held for sale | ||
| Non-current liabilities due within one year | 81,879,466.63 | 86,202,215.03 |
| Other current liabilities | 333,627,225.47 | 456,314,391.17 |
| Total current liabilities | 10,652,141,888.68 | 10,946,958,438.33 |
| Non-current liabilities: | ||
| Insurance contract reserves | ||
| Long-term loans | 3,179,600,000.00 | |
| Bonds payable | 2,996,099,571.86 | 3,990,785,742.23 |
| Including：Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | 29,096,969.66 | 40,667,668.08 |
| Long-term payables | ||
| Long-term payroll payables |
| Accrued liabilities | ||
| Deferred income | 33,704,323.80 | 28,531,014.28 |
| Deferred tax liabilities | 166,043,663.88 | 67,578,019.93 |
| Other non-current liabilities | ||
| Total non-current liabilities | 6,404,544,529.20 | 4,127,562,444.52 |
| Total liabilities | 17,056,686,417.88 | 15,074,520,882.85 |
| Owners' equity | ||
| Share capital | 1,471,895,100.00 | 1,464,752,476.00 |
| Other equity instruments | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserves | 4,800,154,468.99 | 3,755,354,665.73 |
| Less: treasury stock | 639,021,998.78 | |
| Other comprehensive income | 330,751,245.84 | 167,527,152.32 |
| Special reserves | ||
| Surplus reserves | 1,471,895,100.00 | 1,464,752,476.00 |
| General risk reserve | ||
| Undistributed profits | 26,772,197,213.98 | 21,187,860,235.89 |
| Total equity attributable to owners of the parent company | 34,207,871,130.03 | 28,040,247,005.94 |
| Non-controlling interests | 120,923,806.61 | 97,014,116.89 |
| Total owners' equity | 34,328,794,936.64 | 28,137,261,122.83 |
| Total liabilities and owners' equity | 51,385,481,354.52 | 43,211,782,005.68 |
Legal representative：Liu MiaoPerson in charge of accounting affairs：Xie HongPerson in charge of accounting department：Yan Li
Balance sheet of parent company
As at 31 December 2022
Monetary Unit: CNY
| Item | Balance as at 31 December 2022 | Balance as at 1 January 2022 |
| Current assets: | ||
| Cash and cash equivalents | 17,009,231,873.64 | 13,038,549,397.55 |
| Held-for-trading financial assets | 974,505,894.18 | 706,352,241.79 |
| Derivative financial assets | ||
| Notes receivables | ||
| Accounts receivables | 47,500.00 | 1,207,477.63 |
| Accounts receivables financing | ||
| Prepayment | 2,141,256.01 | 1,464,893.09 |
| Other receivables | 12,042,401,844.84 | 10,033,554,898.57 |
| Including：Interests receivable | ||
| Dividends receivable | ||
| Inventories | 2,499,333.08 | 3,918,211.13 |
| Contract assets | ||
| Assets held for sale |
| Non-current assets due within one year | ||
| Other current assets | 34,163.66 | |
| Total current assets | 30,030,861,865.41 | 23,785,047,119.76 |
| Non-current assets: | ||
| Investments in debt obligations | ||
| Investments in other debt obligations | ||
| Long-term receivables | ||
| Long-term equity investments | 6,278,966,093.87 | 6,051,400,833.91 |
| Investments in other equity instruments | 1,136,433,056.48 | 362,983,198.80 |
| Other non-current financial assets | ||
| Investment property | 39,149,454.22 | |
| Fixed assets | 1,021,509,077.72 | 1,087,640,695.62 |
| Construction in progress | 49,136,390.14 | 53,881,812.48 |
| Productive biological assets | ||
| Oil and gas assets | ||
| Use right assets | 600,190.05 | 573,800.02 |
| Intangible assets | 617,211,243.56 | 671,147,243.40 |
| Development expenses | ||
| Goodwill | ||
| Long-term deferred expenses | 548,507.41 | 1,364,659.65 |
| Deferred tax assets | 147,351,049.81 | 91,734,925.57 |
| Other non-current assets | 14,808,459.12 | 500,600.00 |
| Total non-current assets | 9,305,713,522.38 | 8,321,227,769.45 |
| Total assets | 39,336,575,387.79 | 32,106,274,889.21 |
| Current liabilities: | ||
| Short-term loans | ||
| Held-for-trading financial liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | ||
| Accounts payable | 51,174,790.68 | 83,724,151.54 |
| Advance from customer | ||
| Contract liabilities | 1,510,508.26 | 2,523,947.74 |
| Employee benefits payable | 241,471,148.70 | 234,008,858.96 |
| Taxes payable | 381,259,266.93 | 285,894,625.64 |
| Other payables | 1,730,335,596.91 | 1,659,106,919.10 |
| Including：Interests payable | ||
| Dividends payable | ||
| Liabilities held for sale | ||
| Non-current liabilities due within one year | 67,673,936.27 | 72,625,138.08 |
| Other current liabilities | 196,366.07 | 328,113.21 |
| Total current liabilities | 2,473,621,613.82 | 2,338,211,754.27 |
| Non-current liabilities: | ||
| Long-term loans | 3,179,600,000.00 | |
| Bonds payable | 2,996,099,571.86 | 3,990,785,742.23 |
| Including：Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | 203,920.20 | 163,523.64 |
| Long-term payables | ||
| Long-term payroll payables | ||
| Accrued liabilities | ||
| Deferred income | ||
| Deferred tax liabilities | 132,565,131.74 | 67,578,019.93 |
| Other non-current liabilities | ||
| Total non-current liabilities | 6,308,468,623.80 | 4,058,527,285.80 |
| Total liabilities | 8,782,090,237.62 | 6,396,739,040.07 |
| Owners' equity | ||
| Share capital | 1,471,895,100.00 | 1,464,752,476.00 |
| Other equity instruments | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserves | 4,789,603,151.65 | 3,739,666,108.27 |
| Less: treasury stock | 639,021,998.78 | |
| Other comprehensive income | 328,542,995.36 | 167,572,013.86 |
| Special reserves | ||
| Surplus reserves | 1,471,895,100.00 | 1,464,752,476.00 |
| Undistributed profits | 23,131,570,801.94 | 18,872,792,775.01 |
| Total owners' equity | 30,554,485,150.17 | 25,709,535,849.14 |
| Total liabilities and owners' equity | 39,336,575,387.79 | 32,106,274,889.21 |
Consolidated income statement
Monetary Unit: CNY
| Item | Year 2022 | Year 2021 |
| 1. Total operating revenue | 25,123,563,271.62 | 20,642,261,724.37 |
| Including: Operating revenue | 25,123,563,271.62 | 20,642,261,724.37 |
| Interest income | ||
| Earned premium | ||
| Fee and commission income | ||
| 2. Total operating costs | 11,424,541,543.84 | 10,393,487,334.14 |
| Including: Cost of sales | 3,369,528,394.02 | 2,952,431,488.31 |
| 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 | 3,523,948,287.48 | 2,864,901,542.85 |
| Selling and distribution expenses | 3,448,771,046.02 | 3,599,211,604.56 |
| General and administrative expenses | 1,162,422,257.23 | 1,056,116,367.85 |
| Research and Development expenses | 206,248,486.57 | 137,712,329.78 |
| Financial expenses | -286,376,927.48 | -216,885,999.21 |
| Including：Interest expenses | 229,673,136.36 | 195,125,786.35 |
| Interest income | 505,746,664.32 | 419,897,541.04 |
| Plus: Other income | 36,524,317.09 | 52,319,231.39 |
| Investment income ("-" for losses) | 104,715,915.31 | 202,205,718.92 |
| Including: income from investment in associates and joint ventures | 84,626,608.53 | 195,543,058.40 |
| Income from the derecognition of financial assets measured at amortized cost (“-” for losses) | ||
| Foreign exchange gains ("-" for losses) | ||
| Net gain on exposure hedges (“-” for losses) | ||
| Gains from the changes in fair values(“-“ for losses) | -12,023,622.50 | 6,352,241.79 |
| Credit impairment losses (“-” for losses) | -1,165,718.34 | 81,126,114.88 |
| Impairment losses(“-“ for losses) | ||
| Gains from disposal of assets("-" for losses) | 19,805,093.70 | -347,429.88 |
| 3. Operating profits ("-" for losses) | 13,846,877,713.04 | 10,590,430,267.33 |
| Plus: non-operating income | 27,833,420.31 | 27,246,707.88 |
| Less: non-operating expenses | 19,959,493.06 | 66,717,487.09 |
| 4. Total profits before tax ("-" for total losses) | 13,854,751,640.29 | 10,550,959,488.12 |
| Less: income tax expenses | 3,444,162,535.86 | 2,613,697,101.19 |
| 5. Net profit ("-" for net loss) | 10,410,589,104.43 | 7,937,262,386.93 |
| 5.1 By operating continuity | ||
| 5.1.1 Net profit from continuing operation ("-" for losses) | 10,410,589,104.43 | 7,937,262,386.93 |
| 5.1.2 Net profit from discontinued operation ("-" for losses) | ||
| 5.2 By ownership | ||
| 1) Attributable to shareholders of the parent company | 10,365,383,281.80 | 7,955,554,351.73 |
| 2) Attributable to non-controlling interests | 45,205,822.63 | -18,291,964.80 |
| 6. Net of tax from other comprehensive income | 165,065,173.42 | -19,081,558.37 |
| Net of tax from other comprehensive income to the owner of the parent company | 163,224,093.52 | -18,536,172.71 |
| 6.1 Other comprehensive income cannot reclassified into the profit and loss: | 173,373,357.69 | 11,707,013.25 |
| 1) Remeasure the variation of net indebtedness or net asset of defined benefit plans | ||
| 2) Share in other comprehensive income that cannot be classified into profit and loss under equity method | ||
| 3) Changes in fair value of investments in other equity instruments | 173,373,357.69 | 11,707,013.25 |
| 4) Changes in fair value of the company’s credit risks | ||
| 5) Other | ||
| 6.2 Other comprehensive income that will be reclassified into the profit and loss | -10,149,264.17 | -30,243,185.96 |
| 1) Share in other comprehensive income that will be classified into profit and loss under equity method | -12,402,376.19 | -29,576,301.94 |
| 2) Changes in fair value of investments in other debt obligations | ||
| 3) Other comprehensive income arising from the reclassification of financial assets | ||
| 4) Allowance for credit impairments in investments in other debt obligations | ||
| 5) Reserve for cash-flow hedge | ||
| 6) Balance arising from the translation of foreign currency financial statements | 2,253,112.02 | -666,884.02 |
| 7) Others | ||
| Net of tax from other comprehensive income to non-controlling interests | 1,841,079.90 | -545,385.66 |
| 7. Total comprehensive income | 10,575,654,277.85 | 7,918,180,828.56 |
| Total comprehensive income attributable to owners of the parent company | 10,528,607,375.32 | 7,937,018,179.02 |
| Total comprehensive income attributable to non-controlling interests | 47,046,902.53 | -18,837,350.46 |
| 8. Earnings per share | ||
| (1) Basic earnings per share | 7.06 | 5.43 |
| (2) Diluted earnings per share | 7.06 | 5.43 |
Legal representative：Liu MiaoPerson in charge of accounting affairs：Xie HongPerson in charge of accounting department：Yan Li
Income statement of parent company
Monetary Unit: CNY
| Item | Year 2022 | Year 2021 |
| 1. Operating revenue | 8,410,433,537.26 | 7,602,627,780.05 |
| Less: Cost of sales | 6,178,065,196.37 | 5,665,157,031.44 |
| Taxes and surcharges | 65,990,094.21 | 48,515,753.23 |
| Selling and distribution expenses | ||
| General and administrative expenses | 963,400,839.26 | 771,788,593.30 |
| Research and Development expenses | 90,299,057.13 | 56,568,184.04 |
| Financial expenses | -465,296,222.32 | -353,442,195.81 |
| Including：Interest expenses | 145,296,657.64 | 156,432,933.96 |
| Interest income | 613,452,430.61 | 511,551,991.26 |
| Plus: Other income | 18,824,179.28 | 32,634,508.70 |
| Investment income ("-" for losses) | 7,842,231,445.15 | 6,474,502,865.88 |
| Including: income from investment in associates and joint ventures | 45,123,842.50 | 171,693,567.56 |
| Income from the derecognition of financial assets at amortized cost (“-” for losses) | ||
| Net gain on exposure hedges (“-” for losses) | ||
| Gains from the changes in fair values(“-“ for losses) | -10,984,508.69 | 6,352,241.79 |
| Credit impairment losses (“-” for losses) | -610,527.84 | 80,203,108.29 |
| Asset impairment losses (“-” for losses) | ||
| Gains from disposal of assets("-" for losses) | 19,786,813.38 | 546,546.66 |
| 2. Operating profits ("-" for losses) | 9,447,221,973.89 | 8,008,279,685.17 |
| Plus: non-operating income | 18,588,745.48 | 15,646,393.45 |
| Less: non-operating expenses | 17,852,225.18 | 61,173,017.79 |
| 3. Total profits before tax ("-" for total losses) | 9,447,958,494.19 | 7,962,753,060.83 |
| Less: income tax expenses | 408,118,536.71 | 391,636,642.56 |
| 4. Net profit ("-" for net loss) | 9,039,839,957.48 | 7,571,116,418.27 |
| 4.1 Net profit from continuing operation ("-" for losses) | 9,039,839,957.48 | 7,571,116,418.27 |
| 4.2 Net profit from discontinued operation ("-" for losses) | ||
| 5. Net of tax from other comprehensive income | 160,970,981.50 | -17,869,288.69 |
| 5.1 Other comprehensive income cannot reclassified into the profit and loss: | 173,373,357.69 | 11,707,013.25 |
| 1) Remeasure the variation of net indebtedness or net asset of defined |
| benefit plans | ||
| 2) Share in other comprehensive income that cannot be classified into profit and loss under equity method | ||
| 3) Changes in fair value of investments in other equity instruments | 173,373,357.69 | 11,707,013.25 |
| 4) Changes in fair value of the company’s credit risks | ||
| 5) Other | ||
| 5.2 Other comprehensive income that will be reclassified into the profit and loss | -12,402,376.19 | -29,576,301.94 |
| 1) Share in other comprehensive income that will be classified into profit and loss under equity method | -12,402,376.19 | -29,576,301.94 |
| 2) Changes in fair value of investments in other debt obligations | ||
| 3) Other comprehensive income arising from the reclassification of financial assets | ||
| 4) Allowance for credit impairments in investments in other debt obligations | ||
| 5) Reserve for cash-flow hedge | ||
| 6) Balance arising from the translation of foreign currency financial statements | ||
| 7) Others | ||
| 6. Total comprehensive income | 9,200,810,938.98 | 7,553,247,129.58 |
| 7. Earnings per share | ||
| (1) Basic earnings per share | ||
| (2) Diluted earnings per share |
Consolidated statement of cash flows
Monetary Unit: CNY
| Item | Year 2022 | Year 2021 |
| 1. Cash flows from operating activities | ||
| Cash received from sale of goods and rendering of services | 25,912,851,214.24 | 22,547,242,658.59 |
| Net increase in customer bank deposits and placement from banks and other financial institutions | ||
| Net increase in loans from central bank | ||
| Net increase in loans from other financial institutions | ||
| Premiums received from original insurance contracts | ||
| Net cash received from reinsurance business |
| Net increase in deposits and investments from policyholders | ||
| Cash received from interest, handling charges and commissions | ||
| Net increase in placements from other financial institutions | ||
| Net capital increase in repurchase business | ||
| Net cash received from customer brokerage deposits | ||
| Refunds of taxes and surcharges | 96,229,396.25 | 3,431,889.01 |
| Cash received from other operating activities | 868,192,251.33 | 970,002,588.49 |
| Subtotal of cash inflows from operating activities | 26,877,272,861.82 | 23,520,677,136.09 |
| Cash paid for goods purchased and services received | 5,224,385,672.55 | 5,071,928,013.73 |
| 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 | ||
| Net increase in lending funds | ||
| Cash paid for interests, handling charges and commissions | ||
| Cash paid for policy dividends | ||
| Cash paid to and on behalf of employees | 1,159,257,102.51 | 1,016,371,335.03 |
| Cash paid for taxes and surcharges | 9,242,016,336.48 | 6,428,760,153.55 |
| Cash paid for other operating activities | 2,988,965,480.56 | 3,304,969,529.27 |
| Subtotal of cash outflows from operating activities | 18,614,624,592.10 | 15,822,029,031.58 |
| Net cash flows from operating activities | 8,262,648,269.72 | 7,698,648,104.51 |
| 2. Cash flows from investing activities | ||
| Cash received from disposal of investments | 2,130,340,931.54 | |
| Cash received from returns on investments | 47,015,525.79 | 38,354,817.50 |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 66,239,957.85 | 3,538,598.27 |
| Net cash received from disposal of subsidiaries and other business units | ||
| Cash received from other investing activities | ||
| Subtotal of cash inflows from investing activities | 2,243,596,415.18 | 41,893,415.77 |
| Cash paid to acquire and construct fixed assets, intangible assets and other long-term assets | 1,035,165,351.11 | 1,979,399,942.51 |
| Cash paid for investments | 3,082,285,380.80 | 740,542,370.00 |
| Net increase in pledge loans | ||
| Net cash paid to acquire subsidiaries and other business units | ||
| Cash paid for other investing activities | ||
| Subtotal of cash outflows from investing activities | 4,117,450,731.91 | 2,719,942,312.51 |
| Net cash flows from investing activities | -1,873,854,316.73 | -2,678,048,896.74 |
| 3. Cash flows from financing activities | ||
| Cash received from investors | 670,224,927.99 | 8,305,794.84 |
| Including: cash received by subsidiaries from investments by minority shareholders | 3,366,028.35 | 8,305,794.84 |
| Cash received from borrowings | 4,700,000,000.00 | |
| Cash received from other financing activities | 1,909,017.10 | |
| Subtotal of cash inflows from financing activities | 5,372,133,945.09 | 8,305,794.84 |
| Cash paid for debt repayments | 2,500,000,000.00 | |
| Cash paid for distribution of dividends and profits or payment of interest | 4,928,927,484.50 | 3,168,553,209.93 |
| Including: dividends and profits paid to minority shareholders by subsidiaries | 14,784,831.00 | |
| Cash paid for other financing activities | 21,594,912.99 | 22,371,107.22 |
| Subtotal of cash outflows from financing activities | 7,450,522,397.49 | 3,190,924,317.15 |
| Net cash flows from financing activities | -2,078,388,452.40 | -3,182,618,522.31 |
| 4. Effect of fluctuation in exchange rate on cash and cash equivalents | 16,072,149.45 | -3,646,806.44 |
| 5. Net increase in cash and cash equivalents | 4,326,477,650.04 | 1,834,333,879.02 |
| Plus: balance of cash and cash equivalents at the beginning of the period | 13,402,528,941.83 | 11,568,195,062.81 |
| 6. Balance of cash and cash equivalents at the end of the period | 17,729,006,591.87 | 13,402,528,941.83 |
Cash flow statements of parent company
Monetary Unit: CNY
| Item | Year 2022 | Year 2021 |
| 1. Cash flows from operating activities | ||
| Cash received from sale of goods | 7,836,045,120.10 | 6,550,150,291.27 |
| and rendering of services | ||
| Refunds of taxes and surcharges | ||
| Cash received from other operating activities | 633,774,675.70 | 625,297,165.56 |
| Subtotal of cash inflows from operating activities | 8,469,819,795.80 | 7,175,447,456.83 |
| Cash paid for goods purchased and services received | 5,463,276,771.05 | 4,522,910,945.39 |
| Cash paid to and on behalf of employees | 994,821,318.51 | 357,239,225.81 |
| Cash paid for taxes and surcharges | 700,305,299.72 | 540,331,615.01 |
| Cash paid for other operating activities | 232,654,650.21 | 280,329,112.79 |
| Subtotal of cash outflows from operating activities | 7,391,058,039.49 | 5,700,810,899.00 |
| Net cash flows from operating activities | 1,078,761,756.31 | 1,474,636,557.83 |
| 2. Cash flows from investing activities | ||
| Cash received from disposal of investments | 2,141,935,199.60 | |
| Cash received from returns on investments | 7,816,398,926.76 | 6,334,501,455.30 |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 50,809,694.44 | 1,087,162.03 |
| Net cash received from disposal of subsidiaries and other business units | ||
| Cash received from other investing activities | ||
| Subtotal of cash inflows from investing activities | 10,009,143,820.80 | 6,335,588,617.33 |
| Cash paid to acquire and construct fixed assets, intangible assets and other long-term assets | 92,415,078.78 | 19,211,172.69 |
| Cash paid for investments | 2,982,285,380.80 | 740,542,370.00 |
| Net cash paid to acquire subsidiaries and other business units | ||
| Cash paid for other investing activities | ||
| Subtotal of cash outflows from investing activities | 3,074,700,459.58 | 759,753,542.69 |
| Net cash flows from investing activities | 6,934,443,361.22 | 5,575,835,074.64 |
| 3. Cash flows from financing activities | ||
| Cash received from investors | 666,858,899.64 | |
| Cash received from loans | 4,700,000,000.00 | |
| Cash received from other financing activities | 110,999,028.72 | |
| Subtotal of cash inflows from financing activities | 5,477,857,928.36 | |
| Cash paid for debt repayments | 2,500,000,000.00 | |
| Cash paid for distribution of dividends and profits or payment of | 4,930,586,734.79 | 3,146,207,328.27 |
| interest | ||
| Cash paid for other financing activities | 2,008,038,082.56 | 2,010,331,534.97 |
| Subtotal of cash outflows from financing activities | 9,438,624,817.35 | 5,156,538,863.24 |
| Net cash flows from financing activities | -3,960,766,888.99 | -5,156,538,863.24 |
| 4. Effect of fluctuation in exchange rate on cash and cash equivalents | 469,950.14 | -943.95 |
| 5. Net increase in cash and cash equivalents | 4,052,908,178.68 | 1,893,931,825.28 |
| Plus: balance of cash and cash equivalents at the beginning of the period | 12,938,983,758.82 | 11,045,051,933.54 |
| 6. Balance of cash and cash equivalents at the end of the period | 16,991,891,937.50 | 12,938,983,758.82 |
Consolidated statement of changes in owners' equity
For the year ended 31 December 2022
Monetary Unit: CNY
| Item | Year 2022 | ||||||||||||||
| Equity attributable to owners of the parent company | Non-controlling interests | Total owners' equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserve | Less：Treasury stock | Other Comprehensive Income | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | Other | Subtotal | |||||
| Preferred stock | Perpetual bond | Other | |||||||||||||
| 1. Balance as at 31 December of last year | 1,464,752,476.00 | 3,755,354,665.73 | 167,527,152.32 | 1,464,752,476.00 | 21,187,860,235.89 | 28,040,247,005.94 | 97,014,116.89 | 28,137,261,122.83 | |||||||
| Plus: adjustments for changes in accounting policies | |||||||||||||||
| Adjustments for correction of accounting errors in prior year | |||||||||||||||
| Business combinations under common control | |||||||||||||||
| Others | |||||||||||||||
| 2. Balance as at 1 January of the current year | 1,464,752,476.00 | 3,755,354,665.73 | 167,527,152.32 | 1,464,752,476.00 | 21,187,860,235.89 | 28,040,247,005.94 | 97,014,116.89 | 28,137,261,122.83 | |||||||
| 3.Increases/decreases in the | 7,142,624. | 1,044,799, | 639,021,99 | 163,224,09 | 7,142,624. | 5,584,336, | 6,167,624, | 23,909,689 | 6,191,533, | ||||||
| current period (“-” for decreases) | 00 | 803.26 | 8.78 | 3.52 | 00 | 978.09 | 124.09 | .72 | 813.81 | ||||||
| (1) Total comprehensive income | 163,224,093.52 | 10,365,383,281.80 | 10,528,607,375.32 | 47,046,902.53 | 10,575,654,277.85 | ||||||||||
| (2) Capital contributed or reduced by owners | 7,142,624.00 | 1,044,799,803.26 | 639,021,998.78 | 412,920,428.48 | 8,242,468.77 | 421,162,897.25 | |||||||||
| Capital contributions by owners | 7,142,624.00 | 654,141,649.18 | 661,284,273.18 | 0 | 3,366,028.35 | 3,366,028.35 | |||||||||
| Capital contributions by other equity instruments holders | |||||||||||||||
| Amounts of share-based payments recognized in owners' equity | 390,658,154.08 | -22,262,274.40 | 412,920,428.48 | 4,876,440.42 | 417,796,868.90 | ||||||||||
| Others | |||||||||||||||
| (3) Profit distribution | 7,142,624.00 | -4,781,061,930.55 | -4,773,919,306.55 | -31,379,681.58 | -4,805,298,988.13 | ||||||||||
| Withdrawal of surplus reserves | 7,142,624.00 | -7,142,624.00 | |||||||||||||
| Withdrawal of general risk reserve | |||||||||||||||
| Profit distributed to owners (or shareholders) | -4,773,919,306.55 | -4,773,919,306.55 | -31,379,681.58 | -4,805,298,988.13 | |||||||||||
| 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 |
| Carry-forward of retained earnings from changes in defined benefit plans | |||||||||||||||
| Carry-forward of retained earnings from other comprehensive income | |||||||||||||||
| Others | |||||||||||||||
| (5) Special reserves | |||||||||||||||
| Withdrawal for the period | |||||||||||||||
| Use for the period | |||||||||||||||
| (6) Others | 15,626.84 | 15,626.84 | 15,626.84 | ||||||||||||
| 4. Balance as at 31 December of the current year | 1,471,895,100.00 | 4,800,154,468.99 | 639,021,998.78 | 330,751,245.84 | 1,471,895,100.00 | 26,772,197,213.98 | 34,207,871,130.03 | 120,923,806.61 | 34,328,794,936.64 |
For the year ended 31 December 2021
Monetary Unit: CNY
| Item | Year 2021 | ||||||||||||||
| Equity attributable to owners of the parent company | Non-controlling interests | Total owners' equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserve | Less：Treasury stock | Other Comprehensive Income | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | Other | Subtotal | |||||
| Preferred stock | Perpetual bond | Other | |||||||||||||
| 1. Balance as at 31 December of last year | 1,464,752,476.00 | 3,722,777,063.13 | 186,063,325.03 | 1,464,752,476.00 | 16,236,513,212.43 | 23,074,858,552.59 | 107,011,321.12 | 23,181,869,873.71 | |||||||
| Plus: adjustments for changes in accounting policies | |||||||||||||||
| Adjustments for correction of accounting errors in prior year | |||||||||||||||
| Business combinations under common control | |||||||||||||||
| Others | |||||||||||||||
| 2. Balance as at 1 January of the current year | 1,464,752,476.00 | 3,722,777,063.13 | 186,063,325.03 | 1,464,752,476.00 | 16,236,513,212.43 | 23,074,858,552.59 | 107,011,321.12 | 23,181,869,873.71 | |||||||
| 3.Increases/decreases in the current period (“-” for decreases) | 32,577,602.60 | -18,536,172.71 | 4,951,347,023.46 | 4,965,388,453.35 | -9,997,204.23 | 4,955,391,249.12 | |||||||||
| (1) Total comprehensive income | -18,536,172.71 | 7,955,554,351.73 | 7,937,018,179.02 | -18,837,350.46 | 7,918,180,828.56 | ||||||||||
| (2) Capital contributed or reduced by owners | 32,577,602.60 | 32,577,602.60 | 8,840,146.23 | 41,417,748.83 | |||||||||||
| Capital contributions by owners | 8,305,794.84 | 8,305,794.84 | |||||||||||||
| Capital contributions by other equity instruments holders | |||||||||||||||
| Amounts of share-based payments recognized in owners' equity | 32,577,602.60 | 32,577,602.60 | 534,351.39 | 33,111,953.99 | |||||||||||
| Others | |||||||||||||||
| (3) Profit distribution | -3,004,207,328.27 | -3,004,207,328.27 | -3,004,207,328.27 | ||||||||||||
| Withdrawal of surplus reserves | |||||||||||||||
| Withdrawal of general risk reserve | |||||||||||||||
| Profit distributed to owners (or shareholders) | -3,004,207,328.27 | -3,004,207,328.27 | -3,004,207,328.27 | ||||||||||||
| 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 | |||||||||||||||
| Carry-forward of retained earnings from changes in defined benefit plans | |||||||||||||||
| Carry-forward of retained earnings from other comprehensive income | |||||||||||||||
| Others | |||||||||||||||
| (5) Special reserves | |||||||||||||||
| Withdrawal for the period | |||||||||||||||
| Use for the period | |||||||||||||||
| (6) Others | |||||||||||||||
| 4. Balance as at 31 December of the current year | 1,464,752,476.00 | 3,755,354,665.73 | 167,527,152.32 | 1,464,752,476.00 | 21,187,860,235.89 | 28,040,247,005.94 | 97,014,116.89 | 28,137,261,122.83 |
Statement of changes in owners' equity of parent company
For the year ended 31 December 2022
Monetary Unit: CNY
| Item | Year 2022 | |||||||||||
| Share capital | Other equity instruments | Capital reserve | Less：Treasury stock | Other Comprehensive Income | Special reserve | Surplus reserve | Undistributed profit | Other | Total owners' equity | |||
| Preferred stock | Perpetual bond | Other | ||||||||||
| 1. Balance as at 31 December of last year | 1,464,752,476.00 | 3,739,666,108.27 | 167,572,013.86 | 1,464,752,476.00 | 18,872,792,775.01 | 25,709,535,849.14 | ||||||
| Plus: adjustments for changes in accounting policies | ||||||||||||
| Adjustments for correction of accounting errors in prior year | ||||||||||||
| Others | ||||||||||||
| 2. Balance as | 1,464,7 | 3,739,6 | 167,57 | 1,464,7 | 18,872, | 25,709, | ||||||
| at January 1 of the current year | 52,476.00 | 66,108.27 | 2,013.86 | 52,476.00 | 792,775.01 | 535,849.14 | ||||||
| 3.Increases/decreases in the current period (“-” for decreases) | 7,142,624.00 | 1,049,937,043.38 | 639,021,998.78 | 160,970,981.50 | 7,142,624.00 | 4,258,778,026.93 | 4,844,949,301.03 | |||||
| (1) Other comprehensive income | 160,970,981.50 | 9,039,839,957.48 | 9,200,810,938.98 | |||||||||
| (2) Capital contributed or reduced by owners | 7,142,624.00 | 1,049,937,043.38 | 639,021,998.78 | 418,057,668.60 | ||||||||
| Capital contributions by owners | 7,142,624.00 | 654,141,649.18 | 661,284,273.18 | 0 | ||||||||
| Capital contributions by other equity instruments holders | ||||||||||||
| Amounts of share-based payments recognized in owners' equity | 395,795,394.20 | -22,262,274.40 | 418,057,668.60 | |||||||||
| Others | ||||||||||||
| (3) Profit distribution | 7,142,624.00 | -4,781,061,930.55 | -4,773,919,306.55 | |||||||||
| Withdrawal of surplus reserves | 7,142,624.00 | -7,142,624.00 | ||||||||||
| Profit distributed to owners (or shareholders) | -4,773,919,306.55 | -4,773,919,306.55 | ||||||||||
| 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 | ||||||||||||
| Carry-forward of retained earnings from changes in defined benefit plans | ||||||||||||
| Carry-forward of retained |
| earnings from other comprehensive income | ||||||||||||
| Others | ||||||||||||
| (5) Special reserves | ||||||||||||
| Withdrawal for the period | ||||||||||||
| Use for the period | ||||||||||||
| (6) Others | ||||||||||||
| 4. Balance as at 31 December of the current year | 1,471,895,100.00 | 4,789,603,151.65 | 639,021,998.78 | 328,542,995.36 | 1,471,895,100.00 | 23,131,570,801.94 | 30,554,485,150.17 |
For the year ended 31 December 2021
Monetary Unit: CNY
| Item | Year 2021 | |||||||||||
| Share capital | Other equity instruments | Capital reserve | Less：Treasury stock | Other Comprehensive Income | Special reserve | Surplus reserve | Undistributed profit | Other | Total owners' equity | |||
| Preferred stock | Perpetual bond | Other | ||||||||||
| 1. Balance as at 31 December of last year | 1,464,752,476.00 | 3,706,816,950.12 | 185,441,302.55 | 1,464,752,476.00 | 14,305,883,685.01 | 21,127,646,889.68 | ||||||
| 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 | 1,464,752,476.00 | 3,706,816,950.12 | 185,441,302.55 | 1,464,752,476.00 | 14,305,883,685.01 | 21,127,646,889.68 | ||||||
| 3.Increases/decreases in the current period (“-” for decreases) | 32,849,158.15 | -17,869,288.69 | 4,566,909,090.00 | 4,581,888,959.46 | ||||||||
| (1) Other comprehensive income | -17,869,288.69 | 7,571,116,418.27 | 7,553,247,129.58 | |||||||||
| (2) Capital contributed or reduced by owners | 32,849,158.15 | 32,849,158.15 | ||||||||||
| Capital contributions by owners | ||||||||||||
| Capital contributions by other equity instruments holders | ||||||||||||
| Amounts of share-based payments recognized in owners' equity | 32,849,158.15 | 32,849,158.15 | ||||||||||
| Others | ||||||||||||
| (3) Profit distribution | -3,004,207,328.27 | -3,004,207,328.27 | ||||||||||
| Withdrawal of surplus reserves | ||||||||||||
| Profit distributed to owners (or shareholders) | -3,004,207,328.27 | -3,004,207,328.27 | ||||||||||
| 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 | ||||||||||||
| Carry-forward of retained earnings from changes in defined benefit plans | ||||||||||||
| Carry-forward of retained earnings from other comprehensive income | ||||||||||||
| Others | ||||||||||||
| (5) Special reserves | ||||||||||||
| Withdrawal for the period | ||||||||||||
| Use for the period | ||||||||||||
| (6) Others | ||||||||||||
| 4. Balance as at 31 December of the current year | 1,464,752,476.00 | 3,739,666,108.27 | 167,572,013.86 | 1,464,752,476.00 | 18,872,792,775.01 | 25,709,535,849.14 |
3. Company Profile
3.1 Company Overview
Luzhou Laojiao Co., Ltd. (hereinafter referred to as "Company" or "the Company"), formerly known asLuzhou Laojiao Brewery, was established in March 1950. On 20 September 1993, Luzhou Laojiaobrewery established a joint-stock limited company with fund-raising exclusively from its operationalassets. On 25 October 1993, the public offering of shares was approved by Sichuan Provincial People'sGovernment and CSRC with two documents of ChuanFuHan (1993) No.673 and FaShenZi (1993)No.108. After the offering, the total share capital was 86,880,000 shares, which were listed and tradedin Shenzhen stock exchange on 9 May 1994.
As the end of 31 December 2004, the Company's total share capital reached 841,399,673 shares aftermultiple rights issues, among which the controlling shareholder, State Assets Management Bureau ofLuzhou (later renamed as State-owned Assets Supervision and Administration Commission of Luzhou,hereinafter referred to as "SASAC of Luzhou") held 585,280,800 shares of the Company, with ashareholding ratio of 69.56%.
On 27 October 2005, the Company implemented the non-tradable share reform. After theimplementation, the total share capital remained unchanged, and the shareholding ratio of SASAC ofLuzhou decreased from 69.56% to 60.43%.
In November 2006, the Company implemented private placement, and the total share capital increasedfrom 841,399,673 shares to 871,399,673 shares. The shareholding ratio of SASAC of Luzhoudecreased from 60.43% to 58.35%.
As the end of 27 February 2007, SASAC of Luzhou sold 42,069,983 shares of the Company, and afterthe sale, it still held 466,375,156 shares of the Company, with its shareholding ratio reduced to 53.52%.
On 19 May 2008, the Company increased 522,839,803 shares of capital stock resulting from capitalreserve and undistributed profits transferred to increase capital stock. After the implementation, the totalshare capital reached 1,394,239,476 shares, among which, SASAC of Luzhou held 746,200,250 sharesof the Company, and the shareholding ratio was still 53.52%.
On 3 September 2009, the 300,000,000 shares and the 280,000,000 shares held by SASAC of Luzhouwere separately transferred to Luzhou Laojiao Group Co., Ltd. (hereinafter referred to as the "LaojiaoGroup") and Luzhou XingLu Investment Group Co., Ltd. (hereinafter referred to as the "Xinglu Group").After the transfer, Laojiao Group, Xinglu Group, and SASAC of Luzhou respectively held 300,000,000shares, 280,000,000 shares and 166,200,250 shares. So far, Laojiao Group became the first majorityshareholder and SASAC of Luzhou was the actual controller.
From 6 June 2012 to 20 November 2013, the first and second phases of the Company's equityincentive plan were exercised. After the exercise, the total share capital of the Company was changedto 1,402,252,476 shares.
On 10 April 2014 and 18 July 2016, SASAC of Luzhou transferred 81,088,320 shares and 84,000,000shares to Laojiao Group and Xinglu Group respectively. In addition, Laojiao Group has increased itsequity stake through the secondary market of 13,137,100 shares. So far, Laojiao Group, Xinglu Groupand SASAC of Luzhou held 394,225,489 shares, 365,971,142 shares and 1,111,930 sharesrespectively, with the shareholding ratios of 28.11%, 26.10% and 0.08% respectively.
On 23 August 2017, the Company issued CNY 62,500,000 ordinary shares (A shares) privately, raisinga total capital of CNY 3,000,000,000. After the additional issuance, the total capital stock of theCompany was changed to 1,464,752,476 shares. In addition, from 2017 to 2018, Laojiao Groupdecreased 13,137,100 shares that were increased through the secondary market from April 2014 toDecember 2015. After share reduction, Laojiao Group, Xinglu Group and SASAC of Luzhou held381,088,389 shares, 365,971,142 shares and 1,111,930 shares respectively, with the shareholdingratios of 26.02%, 24.99% and 0.08% respectively. Laojiao Group still was the first majority shareholderand SASAC of Luzhou still was the actual controller.
In February 2022, the registration of 6,862,600 shares of the Restricted Share Incentive Plan grantedby the Company for the first time were completed; in September 2022, the Company granted 342,334shares of the Restricted Share Incentive Plan for the second time; in September 2022, with sevenawardees no longer eligible, the Company decided to repurchase and retire the 62,310 restrictedshares of them which had been granted but not lifted from restricted sales; so far, the above grant andrepurchase of the Restricted Share Incentive Plan had all been registered and the total shares of theCompany changed to 1,471,895,100 shares. The grant and repurchase of the Restricted ShareIncentive Plan this year caused no changes in the controlling shareholders and the actual controller ofthe Company.
3.2 Registered address of the Company, company type, and headquarter addressRegistered address and headquarter address of the Company are located in Sichuan Luzhou LaojiaoSquare and company type is other incorporated company (Listed).
3.3 Business nature of the Company and main business activity
Industry of the Company is the baijiu subdivision industry of the liquor and wine, beverage and refinedtea production industry.The main activity are research and development, production and sales of “National Cellar1573”,”Luzhou Laojiao” and other baijiu series.The main products are: “National Cellar 1573 Series”, ”Century-old Luzhou Laojiao JiaolingSeries” , ”Luzhou Laojiao Tequ”, ”Touqu”, ”Hey Guys” and other baijiu series.
3.4 The name of the controlling shareholder and the ultimate substantive controller
The controlling shareholder is Luzhou Laojiao Group Co., Ltd.; the ultimate substantive control isSASAC of Luzhou.
3.5 Approval and submission of the financial report and its dateThe financial report is approved and submitted by the board of directors of the Company on 28 April
2023.
3.6 Consolidated financial statement scope and their changes
(1) The 27 subsidiaries included in the consolidated financial statements for the current periodare listed as follows:
| Name of subsidiary | Abbreviation | Shareholding proportion(%) | Voting rights (%) | |
| Direct | Indirect | |||
| Luzhou Laojiao Brewing Co., Ltd. | Brewing Company | 100.00 | 100.00 | |
| Luzhou Red Sorghum Modern Agricultural Development Co., Ltd. | Red Sorghum Company | 60.00 | 60.00 | |
| Luzhou Laojiao Sales Co., Ltd. | Sales Company | 100.00 | 100.00 | |
| Luzhou Laojiao Nostalgic Liquor Marketing Co., Ltd. | Nostalgic Company | 100.00 | 100.00 | |
| Luzhou Laojiao Custom Liquor Co., Ltd. Note 1 | Custom Liquor Company | 15.00 | 60.00 | |
| Luzhou Laojiao Selected Supply Chain Management Co., Ltd. | Selected Company | 100.00 | 100.00 | |
| Guangxi Luzhou Laojiao Imported Liquor Industry Co., Ltd. | Guangxi Imported Liquor Industry | 100.00 | 100.00 | |
| Luzhou Dingli Liquor Industry Co., Ltd. | Dingli Company | 100.00 | 100.00 | |
| Luzhou Dingyi Liquor Industry Sales Co., Ltd. | Dingyi Company | 100.00 | 100.00 | |
| Luzhou Laojiao New Liquor Industry Co., Ltd. | New Liquor Industry Company | 100.00 | 100.00 | |
| Luzhou Laojiao I & E Co., Ltd. | I & E Company | 100.00 | 100.00 | |
| Luzhou Laojiao Boda Liquor Industry Marketing Co., Ltd. | Boda Marketing | 75.00 | 75.00 | |
| Luzhou Laojiao Bosheng Hengxiang Liquor Sales Co., Ltd. Note 4 | Bosheng Hengxiang | 75.00 | 75.00 | |
| Luzhou Laojiao Fruit Wine industry Co., Ltd. Note 2 | Fruit Wine Industry | 41.00 | 60.00 | |
| Mingjiang Co., Ltd. | Mingjiang Company | 54.00 | 54.00 | |
| Luzhou Laojiao International Trade (Hainan) Co., Ltd. Note 5 | Hainan Company | 100.00 | 100.00 | |
| Luzhou Pinchuang Technology Co., Ltd. | Pinchuang Company | 100.00 | 100.00 | |
| Luzhou Laojiao Tourism Culture Co., Ltd. Note 4 | Tourism Culture | 100.00 | 100.00 | |
| Luzhou Laojiao International Development（Hong Kong）Co., Ltd. | Hong Kong Company | 55.00 | 55.00 | |
| Luzhou Laojiao Commercial Development (North America) Co., Ltd. | North America Company | 100.00 | 100.00 | |
| Luzhou Laojiao Electronic Commerce Co., Ltd. | Electronic Commerce Company | 90.00 | 90.00 | |
| Luzhou Laojiao Whitail Liquor Industry Co., Ltd. Note 3 | Whitail Liquor Industry | 35.00 | 60.00 | |
| Luzhou Baonuo Biotechnology Co., Ltd. | Baonuo Biotechnology | 100.00 | 100.00 | |
| Luzhou Laojiao Health Liquor Industry Co., Ltd. | Health Liquor Industry | 100.00 | 100.00 | |
| Luzhou Laojiao Health Sales Co., Ltd. | Health Sales | 100.00 | 100.00 | |
| Luzhou Laojiao New Retail Co., Ltd. | New Retail Company | 40.00 | 100.00 | 100.00 |
| Luzhou Laojiao Technology Innovation Co., Ltd. Note 5 | Technology Innovation Company | 40.00 | 60.00 | 100.00 |
Note 1: Although the Company holds less than 51% of the equity of Custom Liquor Company, among the five membersof the board of directors, the Company has sent three people. The Company has actual control over Custom LiquorCompany, so it is included in the scope of consolidation.Note 2: Although the Company holds less than 51% of the equity of Fruit Wine Industry, among the five members of theboard of directors, the Company has sent three people, and the chairman of the board (legal representative) is thedirector sent by the Company. The Company has actual control over Fruit Wine Industry, so it is included in the scope of
consolidation.Note 3: Although the Company holds less than 51% of the equity of Whitail Liquor Industry, among the five members ofthe board of directors, the Company has sent three people. The Company has actual control over Whitail Liquor Industryand its subsidiaries, so it is included in the scope of consolidation.Note 4: The subsidiary Luzhou Laojiao Tourism Culture Co., Ltd. and Luzhou Laojiao Bosheng Hengxiang Liquor SalesCo., Ltd. completed business and tax cancellation in June 2022.Note 5: Luzhou Laojiao International Trade (Hainan) Co., Ltd. and Luzhou Laojiao Technology Innovation Co., Ltd. werenewly established in December 2022.
Details of the subsidiaries incorporated into the consolidated financial statements show on “7.1.Interests in subsidiaries”
(2) Subsidiaries that are newly incorporated into the scope of consolidation in this period
| Name of subsidiary | Reason |
| Luzhou Laojiao International Trade (Hainan) Co., Ltd. | Incorporated through investment |
| Luzhou Laojiao Technology Innovation Co., Ltd. | Incorporated through investment |
(3) Liquidation and cancellation for subsidiaries in this period
| Name of subsidiary | Reason |
| Luzhou Laojiao Bosheng Hengxiang Liquor Sales Co., Ltd. | Liquidation cancellation |
| Luzhou Laojiao Tourism Culture Co., Ltd. | Liquidation cancellation |
Details of changes in the scope of consolidation show on “6.5. Changes in consolidated scope for otherreasons”.
4. Basis of preparation of financial statements
4.1. Basis of preparation of financial statements
The Company has prepared its financial statements on a going concern basis, and the preparation isbased on actual transactions and events in compliance with Accounting Standards for BusinessEnterprises and relevant guidance and explanation (the following called the ASBE) issued by Ministry ofFinance, and Rules on Company Information Disclosure and Preparation of Publicly Issued SecuritiesNo.15- General Rules on Financial Reporting Rules (2014 Revision) issued by CSRC.
4.2. Going concern
The Company’s business activities have adequate financial support. Based on the current informationobtained by the Company, comprehensively considering factors such as macro-policy risk, marketoperation risk, current or long-term profitability, debt repayment ability of the Company, as well as itsresource of financial support, the Company believes that it is reasonable to prepare the financial
statements on a going concern basis and there are no events or situations resulting in significantdoubts over going concern for at least 12 months.
5. Significant accounting policies and accounting estimatesTips on specific accounting policies and accounting estimates:
N/A
5.1 The declaration about compliance with ASBE
The financial statements of the Company have been prepared in accordance with ASBE, and presenttruly and completely, the financial position and the Company’s and results of operations, changes inshareholders’ equity and cash flows. In addition, in all material respects, the financial statements of theCompany comply with disclosure requirements of the financial statements and their notes inaccordance with Rules on Company Information Disclosure and Preparation of Publicly IssuedSecurities No.15- General Rules on Financial Reporting Rules revised by CSRC in 2014.
5.2 Accounting period
The Company adopts the calendar year as its accounting year, i.e. from 1st January to 31st December.
5.3 Business Cycle
The Company’s business cycle is 12 months.
5.4 Functional currency
The Company has adopted China Yuan (CNY) as functional currency.
5.5 The accounting treatment of business combinations involving enterprises undercommon control and business combinations not involving enterprises undercommon control
(1) Business combination under common control
Assets and liabilities obtained by the Company from the combine through business combination undercommon control shall be measured at the book value as stated in the consolidated financial statementsof ultimate controlling party at the combination date. The share of the book value of the merged party’sowner’s equity in the consolidated financial statements is taken as the initial investment cost of long-term equity investments in individual financial statements. The capital reserve (stock premium or capitalpremium) is adjusted according to the difference between the book value of net asset acquired throughcombination and the book value of consideration paid for the combination (or total par value of sharesissued). If the capital reserve (stock premium or capital premium) is insufficient to offset, the retained
earnings shall be adjusted.
(2) Business combination not under common control
Assets paid, liabilities incurred or assumed and the equity securities issued as consideration forcombination shall be measured based on fair value on the acquisition date, the difference between fairvalue and its book value shall be included in current profit and loss. The Company shall recognize thedifference of the combination costs in excess of the fair value of the net identifiable asset acquired fromthe acquiree through combination as goodwill. After the review, if the combination costs are still in shortof the fair value of the net identifiable asset acquired from the acquiree through combination, includethe difference in the current profit and loss.Fees, commissions, and other transaction expenses paid on issuance of equity securities ascombination consideration in the business combination shall be included in the initial measurementamount of equity securities.
5.6 Preparation of consolidated financial statements
(1) Consolidated Financial Statement Scope
The scope of the Company’s consolidated financial statements is based on control, and all subsidiariescontrolled are included in the consolidation scope of the consolidated financial statements.
(2) Consolidation procedures
The consolidated financial statements are based on the financial statements of the Company and itssubsidiaries, and are prepared by the parent company with other relevant information. When preparingconsolidated financial statement, the Company considers the Group as an accounting entity, adoptsunified accounting policies, and applies the requirements of ASBE related to recognition, measurementand presentation to reflect the Group’s financial position, operating results and cash flows.
All the subsidiaries within the consolidation scope of consolidated financial statements shall adopt thesame accounting policies and accounting periods as those of the Company. If the accounting policies oraccounting periods of a subsidiary are different from those of the Company, the financial statements ofthe subsidiary, upon preparation of consolidated financial statements, shall be made necessaryadjustment based on its own accounting policies and accounting periods of the Company. Forsubsidiaries acquired from the business combination not under common control, the financialstatements shall be adjusted on the basis of the fair value of identifiable net assets on the date ofpurchase. For the subsidiary acquired from the business combination under common control, its assetsand liabilities (including the goodwill formed by the acquisition of the subsidiary by the ultimatecontrolling party) shall be adjusted on the basis of the book value in the consolidated statements of theultimate controlling party.
The portion of a subsidiary’s equity, the current net profit and loss of subsidiaries, and the currentcomprehensive income attributable to non-controlling interests shall be separately presented as non-controlling interests in consolidated balance sheet within owners' equity, below the net profit line itemand below the total comprehensive income line item in the consolidated income statement respectively.When the amount of current loss attributable to non-controlling shareholders of a subsidiary exceedsthe balance of the non-controlling shareholders’ portion in the opening balance of owner's equity of thesubsidiary, the excess shall be allocated against the non-controlling interests.
Acquisition of subsidiaries or businessDuring the reporting period, if the Company acquires subsidiaries from the business combination undercommon control, the opening balance in the consolidated balance sheet shall be adjusted. The income,expenses and profits of the newly acquired subsidiaries from the beginning to the end of the reportingperiod shall be included in the consolidated income statement. The cash flows of the newly acquiredsubsidiaries from the beginning to the end of the reporting period shall be included in the consolidatedstatement of cash flows. At the same time, the relevant items of the comparative information shall beadjusted as the combined entity existed since the control point of the ultimate controlling party.
If the Company can control the investee from the business combination under common control due toadditional investment or other reasons, the parties involved in the combine shall be deemed to adjust inthe current state when the ultimate controlling party starts to control them. For the equity investmentbefore obtaining control of the investee, the recognized relevant profit or loss and other comprehensiveincome and other changes in net assets between the later of acquisition date of previous equity and thedate on which both the investor and the investee are under common control and the combination dateshall respectively write-down the beginning retained earnings or current profits and losses during theperiod of comparative information.
During the reporting period, if the Company acquires subsidiaries from the business combination notunder common control, the opening balance in the consolidated balance sheet shall not be adjusted.The income, expenses and profits of the newly acquired subsidiaries from the acquisition date to theend of the reporting period shall be included in the consolidated income statement. The cash flows ofthe newly acquired subsidiaries from the acquisition date to the end of the reporting period shall beincluded in the consolidated statement of cash flows.
When the Company becomes capable of exercising control over an investee not under common controldue to additional investment or other reasons, the Company shall re-measure the previously held equityinterests to its fair value on the acquisition date, and the difference shall be recognized as investment
income. When the previously held equity investment is accounted for under equity method, any othercomprehensive income previously recognized and other equity changes (excluding othercomprehensive, net profit and loss and profit distribution ) in relation to the acquiree’s equity changesshall be transferred to profit and loss for the current period when acquisition took place, except for othercomprehensive income resulting from changes in net liabilities or net assets due to re-measurement ofdefined benefit plan by investee.
Disposal of subsidiaries and businessGeneral treatmentsDuring the reporting period, if the Company disposes subsidiaries, the income, expenses and profits ofthe newly disposed subsidiaries from the beginning to the disposal date shall be included in theconsolidated income statement. The cash flows from the beginning to the disposal date shall beincluded in the consolidated statement of cash flows.
In case of loss of control over the investee due to partial disposal of the equity investment or otherreasons, the Company shall re-measure the remaining equity investment at its fair value at the date ofloss of control. The amount of the consideration obtained from the disposal of the equity and the fairvalue of the remaining equity, minus the net asset shares calculated continuously from the acquisitiondate based on the previous shareholding proportion and the goodwill, the difference shall be included inthe investment income of the period when the control is lost. Other comprehensive income related tothe former subsidiary’s equity investment of or other changes in owners' equity excluding net profit andloss, other comprehensive income and profit distribution shall be transferred to investment income forthe current period when control is lost. Other comprehensive income resulting from changes in netliabilities or net assets due to re-measurement of defined benefit plan by investee is excluded.
Disposal of subsidiaries by stepIf the Company loses control of a subsidiary is through multiple transactions by steps, the terms,conditions and economic impact of the disposal transaction shall be considered. When one or more ofthe following conditions may indicate that multiple transactions should be treated as a package oftransactions for accounting treatment:
a.These arrangements were entered into at the same time or in contemplation of each other;b.These arrangements work together to achieve an overall commercial effect;c.The occurrence of one arrangement depends on the occurrence of at least one other arrangement;d.One arrangement alone is not economically justified, but it is economically justified when consideredtogether with other arrangements
If the transactions of the disposal of the equity investment of the subsidiary until the loss of control
belong to a package transaction, the Company shall account for as a transaction; However, thedifference between each disposal consideration received and the corresponding proportion of thesubsidiary’s net assets before the loss of control shall be recognized as other comprehensive income inthe consolidated financial statements and transferred into the profit and loss of the current period whenthe control is lost.
If the transactions from the disposal of the equity investment of the subsidiary to the loss of control arenot considered as a package transactions, the accounting treatment shall be conducted according tothe relevant policies on the partial disposal of the equity investment of the subsidiary where control isretained before the loss of control. When the control is lost, the disposal shall be accounted foraccording to the general treatment.
Purchase of non-controlling interestsThe difference between the increase in the cost of long-term equity investment result from acquisition ofnon-controlling shareholders and the share of net assets of the subsidiary calculated continuously fromthe acquisition date or combination date based on newly shareholding proportion shall be adjusted toequity (share) premium of capital reserves in the consolidated balance sheet. If the capital reserve isinsufficient, any excess shall be adjusted against retained earnings.
Partial disposals of equity investment in subsidiaries without loss of controlWhen the Company disposes of a portion of a long-term equity investment in a subsidiary without lossof control, the difference between disposal consideration and net assets of the subsidiary calculatedcontinuously since the acquisition date or the combination date related to the disposal of long-termequity investment shall be adjusted to equity (share) premium of capital reserves in the consolidatedbalance sheet. If the capital reserve is insufficient, any excess shall be adjusted against retainedearnings.
5.7 Classification of joint venture arrangements and the accounting treatmentmethod of common operation
(1) Classification of joint venture arrangements
A joint arrangement is classified as either a joint operation or a joint venture according to the structure,legal form, agreed terms and other facts and conditions of a joint arrangement. A joint arrangement thatis structured through a separate vehicle is usually classified as a joint venture. However, when a jointarrangement provides clear evidence that it meets any of the following requirements and complies withapplicable laws and regulations as a joint operation:
a. The legal form of the joint arrangement indicates that the parties that have joint control have rights tothe assets, and obligations for the liabilities, relating to the arrangement.
b. The terms of the joint arrangement specify that the parties that have joint control have the rights tothe assets, and the obligations for the liabilities, relating to the arrangement.c. Other facts and circumstances indicate that the parties that have joint control have rights to theassets, and the obligations for the liabilities, relating to the arrangement.The parties that have joint control have rights to substantially all of the output of the arrangement, andthe arrangement depends on the parties that have joint control on a continuous basis for settling theliabilities of the arrangement.
(2) Accounting by parties of a joint operator
A joint operator shall recognize the following items in relation to its interest in a joint operation, andaccount 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.
The Company shall only recognize the portion of the profit and loss attributable to other participants inthe joint venture, resulting from investment or sale of assets to the joint venture by the Company(excluding those assets constituting the business), prior to the sale of such assets to a third party. TheCompany shall fully recognize impairment loss when there is any impairment loss of invested or soldassets occurring in accordance with the ASBE No.8-Asset Impairment. The Company shall onlyrecognize the part of the profit and loss attributable to other participants in the joint venture beforeselling the assets and other assets purchased from the joint venture (excluding those assetsconstituting the business) to a third party. When the impairment loss of the purchased assets is inaccordance with the ASBE No.8-Asset Impairment, the Company shall recognize such lossesaccording to its share. When the Company does not have common control over the joint venture, if theCompany enjoys the assets related to the joint venture and assumes the liabilities related to the jointventure, the accounting treatment shall be conducted according to the above principles. Otherwise, theaccounting treatment shall be conducted in accordance with the relevant accounting standards.
5.8 Cash and cash equivalents
When preparing the cash flow statement, the Company recognizes cash on hand and deposits that canbe readily withdrawn on demand as cash. Cash equivalents are the Company’s short-term (due within 3months from purchase date), highly liquid investments that are readily convertible to known amounts ofcash and which are subject to an insignificant risk of changes in value. Restricted bank deposits are notrecognized as cash and cash equivalents in the cash flow statement.
5.9 Foreign currency transactions and translation of foreign currency statements
(1) Foreign currency transactions
At the time of initial recognition of a foreign currency transaction of the Company, the amount in theforeign currency shall be translated into the amount in CNY currency at the spot exchange rate of thetransaction date. For the monetary items of foreign currencies, the translation is done according to spotrate of the balance sheet date. The exchange difference generated from the difference of spot rate ofthe current balance sheet date and the time of initial recognition of a foreign currency or the previousbalance sheet date is charged to the profit or loss of the current period except that the exchangedifference generated from foreign currency borrowings relating to assets of which the acquisition orproduction satisfies the capitalization conditions is capitalized.Non-monetary items measured at fair value that is reflected in foreign currency at the end of the period,the Company shall firstly translate the foreign currency into the amount in functional currency at thespot exchange rate on the date when the fair value is determined, and then compare it with the originalfunctional currency amount. Difference between the translated functional currency amount and theoriginal functional currency amount is treated as profit or loss from changes in fair value (includingchanges in exchange rate) and is recognized in current profit and loss. If there is a non-monetary itemof available-for-sale financial assets, the differences are recorded into other comprehensive income.
(2) Translation of foreign currency statements
Assets and liabilities in the balance sheets shall be translated at the spot exchange rates on balancesheet date. Shareholders’ equity items, except for the item of "undistributed profits", are translated atthe spot exchange rates on the dates when the transactions occur. Revenue and expense items in theincome statement are translated at the spot exchange rates on the dates when the transactions occuror at the exchange rate determined in a systematical and reasonable method and similar to the spotexchange rate on the day when the transactions occur. Differences arising from the above translationsof foreign currency financial statements are separately listed under other comprehensive income in theconsolidated balance sheet. If the overseas business is partly disposed of, the foreign currencyfinancial statements exchange difference shall be calculated in proportion to the percentage of disposaland transferred to gain or loss on disposal for the current period.Foreign currency cash flow and cash flow of foreign subsidiaries shall be translated at approximateexchange rate of spot rate on the date of cash flow.
5.10 Financial Instruments
A financial instrument is a contract that gives rise to a financial asset of one entity and a financialliability or equity instrument of another entity. When the Company becomes a party to a financialinstrument contract, the related financial asset or financial liability should be recognized.
(1) Classification, recognition and measurement of financial assets
Based on the business model of financial asset management and the contract cash flow characteristicsof financial assets, the Company classifies financial assets into: financial assets measured at amortizedcost; financial assets measured at fair value with their changes included into other comprehensiveincome; and financial assets measured at fair value with their changes included into currentprofits/losses.
At the initial recognition, financial assets are measured at fair value. For financial assets measured atfair value with their changes included into current profits/losses, the expenses involved in thetransaction are directly recorded into current profits/losses; for other financial liabilities, the expensesinvolved in the transaction are recorded into the initially recognized amount.
1) Financial assets measured at amortized cost
The business model in which the Company manages financial assets measured at amortized cost aimsto receive contract cash flow. Furthermore, the characteristics of the contract cash flow of such financialassets are consistent with basic borrowing and lending arrangements, which means that cash flowgenerated on a specific date serves only as payment for principal and interests based on the amount ofunpaid principal. The Company adopts the effective interest method for such financial interests,performs subsequent measurement of them at amortized cost, and includes the gains or losses fromderecognition, changes or impairment of them into current profits/losses.
2) Financial assets measured at fair value with their changes included into other comprehensive incomeThe business model in which the Company manages such financial assets both aims to receivecontract cash flow and for the purpose of sale. Furthermore, the characteristics of the contract cashflow of such financial assets are consistent with basic borrowing and lending arrangements. TheCompany measure such financial assets at fair value and include their changes into othercomprehensive income, but record impairment losses or gains, exchange gains or losses and interestincome calculated in the effective interest method into current profits/losses.
At the initial recognition, the Company may specify non-trading equity instrument investment as afinancial asset measured at fair value with its changes included into other comprehensive income andshould recognize the dividend income according to regulations; the specification is irrevocable oncemade. When the financial asset is derecognized, the cumulative gains or losses previously included intoother comprehensive income should be transferred into retained earnings.
3) Financial assets measured at fair value with their changes included into current profits/lossesFor financial assets other than the above financial assets measured at amortized cost and financial
assets measured at fair value with their changes included into other comprehensive income, theCompany classifies them as financial assets measured at fair value with their changes included intocurrent profits/losses. In addition, at the initial recognition, the Company specifies partial financialassets as financial assets measured at fair value with their changes included into current profits/losses,in order to eliminate or substantially reduce accounting mismatch. For such financial assets, theCompany performs subsequent measurement using fair value and records changes in the fair valueinto current profits/losses.
(2) Classification, recognition and measurement of financial liabilities
At their initial recognition, financial liabilities are divided into financial liabilities measured at fair valuewith their changes included into current profits/losses and other financial liabilities. For financialliabilities measured at fair value with their changes included into current profits/losses, the expensesinvolved in the transaction are directly recorded into the current profits/losses. For other financialliabilities, the expenses involved in the transaction are recorded into the initially recognized value.
1) Financial liabilities measured at fair value with their changes included into current profits/lossesFinancial liabilities measured at fair value with their changes included into current profits/losses includetrading financial liabilities (including derivatives classified as financial liabilities) and the financialliabilities specified to be measured at fair value with their changes included into current profits/losses atthe initial recognition.
Trading financial liabilities (including derivatives classified as financial liabilities) are subsequentlymeasured at fair value, with changes in fair value recorded into current profits/losses, except for thoserelated to hedge accounting.
For those specified as financial liabilities measured at fair value with their changes included into currentprofits/losses, changes in the fair value of such liabilities caused by changes in the Company’s owncredit risk should be included into other comprehensive income. In derecognition of such liabilities,cumulative changes in their value caused by the Company’s own credit risk that have been recordedinto other comprehensive income should be transferred into retained earnings. Other changes in theirfair value should be recorded into current profits/losses. If treatment of the impact of the Company’sown credit risk changes of such financial liabilities in the above manner causes or expands accountingmismatch in profits/losses, the Company will include all gains or losses of such financial liabilities(including the amount of the impact of the Company’s own credit risk changes) into currentprofits/losses.
2) Other financial liabilities
Financial liabilities other than those formed from the transfer of financial assets not meetingderecognition conditions or continuous involvement into transferred financial assets and those outsidefinancial guarantee contracts are classified as financial liabilities measured at amortized cost. Suchfinancial liabilities should be subsequently measured at amortized cost and the gains or losses fromderecognition or amortization should be included into current profits/losses.
(3) Recognition basis and measurement method of transfer of financial assetsIf a financial asset meets any of the following conditions, it shall be derecognized: 1)The contractualright for collecting the cash flow of the financial asset has been terminated; 2)The financial asset hasbeen transferred and almost all the risks and remunerations in respect of the ownership of the financialasset has been transferred to the transferee; 3)The financial asset has been transferred, and althoughthe enterprise neither transfers nor retains almost all the risks and remunerations in respect of theownership of the financial asset, it has abandoned its control over the asset.
If the enterprise neither transfers nor retains almost all the risks and remunerations in respect of theownership of the financial asset and does not abandon its control over the asset, the involved financialasset shall be recognized according to the level of continuous involvement of the transferred financialasset and the relevant liabilities shall be recognized accordingly. The level of continuous involvement ofthe transferred financial asset refers to the level of risk faced by the enterprise due to changes in thevalue of the financial asset.
If the overall transfer of the financial asset meets the recognition conditions, the difference between thecarrying value of the transferred financial asset as well as the consideration received from the transferand the cumulative amount of fair value changes originally-recorded into other comprehensive incomesshall be recorded into the current profits/losses.
If partial transfer of the financial asset meets the recognition conditions, the carrying value of thetransferred financial asset shall be apportioned at the relative fair value between the derecognition andunderecognition part. The difference between the summation of the consideration received from thetransfer and the cumulative amount of fair value changes originally-recorded into other comprehensiveincomes that should be apportioned to the derecognition part and the apportioned aforementionedcarrying value shall be recorded into the current profits/losses.
For a financial asset sold with the right of recourse or with the transfer of the financial assetendorsement, the Company shall decide whether almost all the risks and remunerations in respect ofthe ownership of the financial asset should be transferred. If they are transferred, the financial assetshall be derecognized; if they are retained, the financial asset shall not be derecognized; if they are
neither transferred nor retained, the Company will continue to decide whether the enterprise shouldretain control over the asset and perform the accounting treatment according to the principles stated inprevious paragraphs.
(4) Derecognition of financial liabilities
When the current obligation of a financial liability (or a part of it) is relieved, the Company willderecognize the financial liability (or the part of it). When the Company (borrower) signs an agreementwith a lender to replace an original financial liability in the form of bearing a new financial liability andthe contract terms for the new financial liability differ from those for the original in substance, theoriginal financial liability should be derecognized and the new one should be recognized. When theCompany makes substantial changes to the contract terms of an original financial liability (or a part of it),the original financial liability should be derecognized and a new financial liability should be recognizedaccording to the amended contract terms.
When a financial liability (or a part of it) is derecognized, the Company will include the differencebetween its carrying value and the consideration paid (including non-cash assets or liabilities borne thatare transferred out) into current profits/losses.
(5) Offsetting of financial assets and financial liabilities
When the Company has the legal right to offset recognized financial assets and financial liabilities andmay execute the legal right currently and simultaneously, the Company plans to settle orsimultaneously encash the financial assets in net amounts and pay off the financial liabilities, thefinancial assets and the financial liabilities which are presented in the net amount after the mutual offsetin the balance sheet. Other than that, they shall be presented separately in the balance sheet withoutthe mutual offset.
(6) Method of determining the fair value of financial assets and financial liabilitiesFair value refers to the price that a market participant can receive for selling an asset or transferring aliability in an orderly transaction on the measurement date. For an existing financial instrument in anactive market, the Company adopts the quotations in the active market to determine its fair value.Quotations in the active market refer to prices that can be easily obtained from exchanges, brokers,industrial associations and pricing service institutions and represent the actual prices in the markettransactions happening in a fair trade. For a non-existing financial instrument in an active market, theCompany adopts the valuation technique to determine its fair value. The valuation technique includesreferences to familiar situations and the prices used by the parties voluntarily participating in the recentmarket transactions, as well as references to the present fair value of other financial instruments of thesame nature, discounted cash flow method and options pricing model. In the valuation, the Company
uses a valuation technique that is applicable in the current situation with sufficient data available andother information support, chooses input values that are consistent with the asset or liabilitycharacteristics considered by market players in related asset or liability transactions, and makemaximum effort to use related observable input values on a preferential basis. When it is unable orunfeasible to obtain related observable input values, unobservable will be used.
(7) Equity instruments
Equity instruments refer to the contracts that can prove the Company’s residual equity of assets afterthe deduction of all liabilities. The Company’s issuance (including refinancing), repurchase, sale orcancellation of equity instruments serve as the change treatment of equity. Transaction expensesrelated to the equity transactions are deducted from the equity. The Company does not recognizechanges in the fair value of equity instruments.
Dividends from the Company’s equity instruments distributed during the validity (including the “interests”from instruments classified as equity instruments) are treated as profit distribution.
(8) Impairment of financial instruments
Based on the expected credit loss, the Company treats financial assets measured at amortized costand debt instrument investment measured at fair value with its changes included into othercomprehensive income by impairment and recognizes the provision for loss.
Credit loss means the difference between all contract cash flow discounted at the original effectiveinterest rate to be received according to contracts and all contract cash flow expected to be received,namely, the present value of all cash shortage. For a financial asset with credit impairment purchasedby or originated from the Company, it should be discounted by the effective interest rate after creditadjustment to the financial asset.
For accounts receivable that do not contain significant financing components, the Company adoptssimplified measurement to measure loss provisions according to the amount equivalent to the expectedcredit loss for the entire duration.
For a financial asset other than those using the above simplified measurement, the Company assesseson each balance sheet date whether its credit risk has substantially increased since the initialrecognition. If it has not and is in the first stage, the Company will measure the loss provision at theamount equivalent to the expected credit loss for the next 12 months and calculate the interest incomeaccording to the book balance and the effective interest rate; if it has substantially increased since theinitial recognition without credit impairment and is in the second stage, the Company will measure the
loss provision at the amount equivalent to the expected credit loss for the entire duration and calculatethe interest income according to the book balance and the effective interest rate; if credit impairmenthas occurred since the initial recognition and is in the third stage, the Company will measure the lossprovision by the amount equivalent to the expected credit loss for the entire duration and calculate theinterest income according to the amortization cost and the effective interest rate. For financialinstruments with low credit risks on balance sheet dates, the Company assumes that their credit riskshave not substantially increased since the initial recognition.
The Company assesses expected credit losses of financial instruments based on individual and groupassessment. The Company considers the credit risk characteristics of different customers andassesses the expected credit losses of accounts receivable and other receivables based on accountage portfolio. When assessing expected credit losses, the Company considers reasonable and well-founded information on past matters, present conditions and forecast of future economic conditions.
When it no longer reasonably expects to recover all or part of the contract cash flow of financial assets,the Company will directly write down the book balance of such financial assets.
5.11 Notes receivable
The method of determining the expected credit loss of notes receivables and accounting treatmentmethod:
Divide notes receivables into various portfolios according to common risk characteristics based on thecredit risk characteristics of acceptors and determine the accounting estimate policies of expectedcredit loss：
| Portfolio name | Provision method |
| Bank acceptance bill portfolio | The management evaluates that this type has low credit risk and its fixed bad debt provision ratio is 0%. |
| Trade acceptance portfolio | The provision for impairment is made according to the expected loss rate with the same portfolio classification of accounts receivables |
5.12 Accounts receivables
The method of determining the expected credit loss of accounts receivables and accounting treatmentmethod:
As for accounts receivables, regardless of whether there is a significant financing component, theCompany always measures the provision for loss based on the amount equivalent to the expectedcredit loss over the entire life, and the resulting increase or reversal of provision for loss shall beincluded in the current profit or loss as gains or losses on impairment. The accrual method is as follows:
(1) When there is objective evidence showing that an account receivable has incurred credit impairment,
the Company shall make bad debt provision for the account receivable and recognize the expectedcredit loss.
(2) When the information about the expected credit loss of a single financial asset cannot be evaluatedat a reasonable cost, the Company shall divide the accounts receivables portfolio according to creditrisk characteristics and measure the expected credit loss based on portfolios:
| Portfolio name | Provision method |
| Risk portfolio | Expected credit loss |
| Other portfolio | No bad debt provision |
Other portfolio refers to the normal intercourse funds among the Company and businesses under thesame control, the recovery of which are controllable with no risks. Thus, no bad debt provision wasmade.The Company combines the accounts receivables classified as risk portfolio in accordance with similarcredit risk characteristics (aging), and calculates the expected credit loss through the exposure atdefault and expected credit loss rate over the entire life based on the current situation and prediction offuture economic situation consulting historical credit loss experience. The comparative table of thecredit loss rate is as follows:
| Aging | Expected loss provision rate % |
| Within 1 year | 5 |
| 1-2 years | 10 |
| 2-3 years | 20 |
| 3-4 years | 40 |
| 4-5 years | 80 |
| Over 5 years | 100 |
5.13 Accounts receivables financing
The accounts receivables financing of the Company refer to the notes receivables measured at fairvalue through other comprehensive income on the balance sheet date. For more details, see Note 5.10Financial instruments.
5.14 Other receivables
The method of determining the expected credit loss of other receivables and accounting treatmentmethod:
As for other receivables, regardless of whether there is a significant financing component, the Companyalways calculates the expected credit loss through the exposure at default and expected credit loss ratein the next 12 months or over the entire life based on the current situation and prediction of futureeconomic situation consulting historical credit loss experience, and the resulting increase or reversal ofprovision for loss shall be included in the current profit or loss as gains or losses on impairment. Theaccrual method is as follows:
(1) When there is objective evidence showing that the other receivable has incurred credit impairment,the Company shall make bad debt provision for the other receivable and recognize the expected creditloss.
(2) When the information about the expected credit loss of a single financial asset cannot be evaluatedat a reasonable cost, the Company shall divide the other receivables portfolio according to credit riskcharacteristics and measure the expected credit loss based on portfolios.
| Portfolio name | Provision method |
| Risk portfolio | Expected credit loss |
| Other portfolio | No bad debt provision |
Other portfolio refers to the normal intercourse funds among the Company and businesses under thesame control, the recovery of which are controllable with no risks. Thus, no bad debt provision wasmade.The Company combines the other receivables classified as risk portfolio in accordance with similarcredit risk characteristics (aging), and calculates the expected credit loss through the exposure atdefault and expected credit loss rate in the next 12 months or over the entire life based on the currentsituation and prediction of future economic situation consulting historical credit loss experience. Thecomparative table of the credit loss rate is as follows:
| Aging | Expected loss provision rate % |
| Within 1 year | 5 |
| 1-2 years | 10 |
| 2-3 years | 20 |
| 3-4 years | 40 |
| 4-5 years | 80 |
| Over 5 years | 100 |
5.15 Inventory
(1) Classification of inventory
Inventories are classified as: raw materials, goods in progress (including semi-finished goods), stockcommodities, and dispatched inventories.
(2) Measurement method of dispatched inventories
The standard cost is used for daily accounting of raw materials, and the difference of material costshould be carried forward on a monthly basis to adjust the standard cost into the actual cost; The goodsin progress (including semi-finished goods) shall be accounted according to the actual cost, and theweighted average method shall be used when they are received and delivered. The actual cost of theinventory at the end of the month above shall be taken as the standard cost, and the delivery shall bepriced according to the standard cost. At the end of the month, the standard cost of the inventory at theend of the month shall be adjusted into the actual cost through the cost-sharing difference.
(3) Basis to determine net realizable values of inventories and method of provision for stockobsolescenceAt the end of the period, inventory is measured according to the lower of cost and net realizable value.The difference between inventory cost and net realizable value is higher than the provision for stockobsolescence , which is recorded into current profit and loss. For inventories that are related to productranges produced and sold in the same district or used for the same or similar ultimate purpose and aredifficult to be measured separately from other inventories, the Company provides for stockobsolescence as a whole. For inventories that have large quantities but low value, the Companyprovides for stock obsolescence on a category basis.
The materials held for production shall be measured at cost if the net realizable value of the finishedproducts is higher than the cost. If a decline in the value of materials shows that the net realizable valueof the finished products is lower than the cost, the materials shall be measured at the net realizablevalue.
(4) Inventory system
The Company adopts perpetual inventory system.
(5) Amortization method of packing materials and low-cost consumablesIt is amortized in full at once.
5.16 Contract assets
The Company presents contract assets or contract liabilities on the balance sheet according to therelationship between the fulfillment of its contract performance obligations and its customers’ payment.
Considerations that the Company has the right to collect for commodities transferred or servicesprovided to customers (and such right depends on other factors than time lapses) are presented ascontract assets. The Company presents the right possessed to collect consideration from customersunconditionally (only depending on the passing of time) as accounts receivable. Refer to “The methodof determining the expected credit loss of accounts receivables and accounting treatment method” forthe detail on the Company’s method of determining the expected credit loss of contract assets andaccounting treatment method.
5.17 Contract costs
Contract costs comprise incremental costs incurred as the Company obtains a contract, and costs forcontract performance. Incremental costs incurred as the Company obtains a contract refer to those
costs which will not incur without entering into a contract (such as sales commission). If it is expectedthat the costs are recoverable, the Company will recognize the costs incurred to obtain a contract asone form of assets. In case that the term of asset amortization is shorter than one year or one normaloperating cycle, the costs will be recognized as profit and loss of the current period after occurrence.
If the costs incurred from contract performance fall outside the inventory or the scope of otherenterprise accounting standards and satisfy all of the following conditions, the Company will recognizethe costs for contract performance as assets: a) The costs are directly related to one existing contractor contract that is expected to be obtained; b) The costs enrich the Company's resources for futurecontract performance (including continual fulfillment); c) The costs are estimated to be recovered.
Assets recognized from costs incurred to obtain a contract and costs for contract performance(hereinafter referred to as "assets related to contract costs") will be amortized based on the basis thesame with the income from commodities or services related to the assets, and will be recognized asprofit and loss of the current period. In case that the book value of assets related to contract costs ishigher than the difference of the two items below, the Company will set aside provisions for assetsimpairment to deal with the extra part, and recognize that part as impairment losses: a) Estimatedresidual consideration to be obtained from transfer of commodities or services related to the assets; b)Estimated costs incurred from transfer of the relevant commodities or services.
5.18 Assets held for sale
(1) Classification of non-current assets held for sale or disposal groups
The Company shall classify the non-current assets or disposal group meeting the following conditionsinto the held-for-sale category: The assets (or disposal group) must be available for immediate sale inits present condition subject only to terms that are usual and customary for sales of such assets (ordisposal groups); 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 be completed withinone year.
The non-current assets or disposal group acquired by the Company for resale shall be divided into theheld-for-sale category on the acquisition date if it meets the condition that "the sale is expected to becompleted within one year" and if it is likely to meet other conditions for the held-for-sale category withina short period (usually three months).
Due to one of the following reasons that the Company is unable to control, leading to the transactionsuncompleted with non-related party within one year, and the Company still commits to sale non-currentassets or disposal groups, it can continue to account for non-current assets or disposal groups as held-
for-sale: the buyer or any other party accidentally set sale extension condition. The Company has totake action in time according to these conditions and the extension problem is expected to be solvedwithin one year; In rare cases, the Company has taken the necessary steps and re-satisfy the hold forsale category condition within the first year for the new circumstances which caused it unable tocomplete the sale of the non-current assets or disposal group within one year.
(2) Measurement of non-current assets or disposal groups held for sale
a. Initial measurement and subsequent measurementWhen the Company measure a non-current asset or disposal group held for sale initially or re-measureat balance sheet date subsequently, the impairment loss should be recognized if the book value ishigher than fair value less costs to sell at the amount of the difference of these two in profit and loss,the provision for assets held for sale need to be recognized at the same time.
For the non-current assets or disposal groups divided into held-for-sale category on the acquisition date,they shall be measured as the lower of the initial measurement amount and the net amount afterdeducting the selling expenses from the fair value under the assumption that it is not divided into held-for-sale categories at the initial measurement. Except for the non-current assets or the disposal groupsobtained in the enterprise merger, the difference caused by the non-current assets or the disposalgroups taking the net amount after the fair value minus the selling expenses as the initial measurementamount shall be recorded into the current profit and loss.
For the impairment of disposal group, it should write off goodwill if existing, and then write down therelated assets proportionally.
Depreciation or amortization should cease for the non-current asset held for sale. Interest and othercharges on liabilities in the disposal groups held for sale continue to be recognized.
b. Accounting treatment of reversal of impairment lossIf the net amount of the non-current assets held for sale on the subsequent balance sheet dateincreases after the fair value minus the selling expenses, the amount previously written down shall bereversed, and the amount of the impairment loss recognized after being classified as the held-for-saleshall be reversed, and the reversed amount shall be included in the current profit and loss. Theimpairment loss recognized before the classification of the held-for-sale shall not be reversed.
If the net amount of the disposal groups held for sale on the subsequent balance sheet date increasesafter the fair value deducting the selling expenses, the amount previously written down shall bereversed, and the amount of the impairment loss recognized as non-current assets after being
classified as the held-for-sale shall be reversed, and the reversed amount shall be included in thecurrent profit and loss. The book value of the goodwill that has been written down and the impairmentlosses recognized before the classification of the held-for-sale shall not be reversed.
The subsequent reversed amount of the impairment loss recognized by the disposal groups held forsale shall be increased in proportion to the book value of non-current assets except goodwill in thedisposal groups.
c. The accounting treatment that does not continue to be classified as held-for-sale and the terminationof recognitionNon-current assets or disposal groups that are no longer divided into held-for-sale category or non-current assets are removed from disposal groups held for sale because of no longer meeting thecondition of classification of held-for-sale, they are measured at lower of the following two: book valuebefore being classified as the held-for-sale considering depreciation, amortization or impairment thatshould have been recognized under the assumption that it is not divided into held-for-sale categories;and recoverable amount.
When terminating the recognition of the non-current assets held for sale or the disposal groups, theunrecognized gains or losses shall be recorded into the current profit and loss.
5.19. Investments in debt obligations
N/A
5.20 Investments in other debt obligations
N/A
5.21 Long-term receivables
For more details, see Note 5.10 Financial instruments.
5.22 Long-term equity investment
(1) Judgment criteria of common control and significant influence
Common control on an agreement with other participants refers to the Company share control withother participants on an arrangement according to relevant conventions, which exists only whendecisions about the relevant activities require the unanimous consent of the parties sharing control.This arrangement belongs to joint venture. Where the joint venture arrangement is made by a separateentity and the Company is judged to have rights to the net assets of such a separate entity according to
the relevant conventions. Such a separate entity shall be regarded as a joint venture and accounted bythe equity method. If the Company is judged to be not entitled to the net assets of the separate entityaccording to relevant conventions, the separate entity shall be regarded as a joint venture and theCompany shall recognize the items related to the shares of the joint venture and perform accountingtreatment in accordance with relevant accounting standards.The term ‘significant influence’ refers to the power to participate in decision-making on the financial andoperating policies of the investee, but with no control or joint control over the formulation of thesepolicies. The Company judges that it has a significant impact on the invested entity through one or moreof the following situations and taking all the facts and circumstances into consideration:
a. Dispatch representatives to the board of directors or similar authorities of the investee.b. To participate in the financial and business policy making process of the investee.c. Significant transactions with the investee.d. Dispatch management personnel to the investee.e. To provide key technical data to the investee.
(2) Determination of the initial investment cost
a. Long-term equity investment resulting from combinationBusiness combination under common control：
For the long-term equity investments obtained by cash paid, non-monetary assets paid or assumedliabilities and the equity securities issued by the acquirer, on the merger date, the initial investment costof long-term equity investment shall be taken as the share of the owner's equity of the investee in thebook value of the final control party's consolidated financial statements. If the investee under businesscombination under common control can be controlled due to additional investment or other reasons, theinitial investment cost of long-term equity investment shall be determined on the merger date accordingto the share of the net assets of the investee in the book value of the final control party's consolidatedfinancial statements. The difference between the initial investment cost of the long-term equityinvestment on the merger date and sum of the book value of the long-term equity investment before themerger and the new consideration of acquiring shares on the merger date shall be recorded to adjustthe equity premium. If the equity premium is insufficient to be written down, the retained earnings shallbe written down.
Business combination not under common control：The Company takes the initial investment cost oflong-term equity investment as the merger cost determined on the purchase date. If the investee can becontrolled under business combination not under common control due to additional investment or otherreasons, the previous book value of the equity investment held plus the sum of the newly addedinvestment cost shall be taken as the initial investment cost calculated according to the cost method.
b. Long-term equity investment obtained by other meansFor the long-term equity investments obtained by cash paid, the Company recognizes their fair value asthe initial investment costs.
For the long-term equity investments acquired by the issue of equity securities, the initial investmentcost shall be the fair value of the equity securities issued.
For long-term equity investments obtained by non-monetary assets exchange, under the condition thatan exchange of non-monetary assets is of commerce nature and the fair value of assets exchangedcan be reliably measured, non-monetary assets traded in is initially stated at the fair value of the assetstraded out, unless there is conclusive evidence indicating that the fair value of the assets traded in ismore reliable; if the above conditions are not satisfied, initial investment costs of long-term equityinvestments traded in shall be recognized at the book value of the assets traded out and the relevanttaxes and surcharges payable.
For long-term equity investments obtained by debt restructuring, the Company recognizes the fair valueof shares of debt-for-equity swap as the initial investment costs.
(3) Subsequent measurement and recognition of profit and loss
a. Long-term equity investments measured under the cost methodLong-term equity investments that can control the investee are measured under the cost method. Forlong-term equity investments accounted at the cost method, except cash dividends or profits declaredbut not yet distributed which are included in the actual payments or the consideration actually paid forthe investment, the cash dividends or profits declared by the investee shall be recognized as theinvestment income irrespective of net profits realized by the investee before investment or afterinvestment.
b. Long-term equity investments measured under the equity methodFor the long-term equity investment which has joint control or significant influence over the investee, theequity method is adopted for accounting. For long-term equity investments measured at the equitymethod, if the initial investment costs are higher than the investor’s attributable share of the fair value ofthe investee’s identifiable net assets, no adjustment will be made to the initial costs of the long-termequity investments; if the initial investment costs are lower than the investor’s attributable share of thefair value of the investee’s identifiable net assets, the difference shall be recognized in current profit andloss.
The Company shall, according to the shares of net profits and other comprehensive income realized by
the investee that shall be enjoyed or borne by the Company, recognize the profit and loss on theinvestments 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 Company shall enjoy orbear, the Company shall make a recognition and calculation based on the net book profits and losses ofthe investee after appropriate adjustments. However, where the Company is unable to obtain therelevant information due to failure to reasonably determine the fair value of the investee’s identifiableassets, minor difference between the investee’s identifiable assets and the book value thereof or otherreasons, the profits or losses on the investments shall be directly calculated and recognized based onthe net book profits and losses of the investee. The Company shall calculate the part distributed fromcash dividends or profits declared by the investee and correspondingly reduce the book value of thelong-term equity investments. When recognizing the income from investments in associates and jointventures, the Company shall write off the part of incomes from internal unrealized transactions betweenthe Company and associates and joint ventures which are attributable to the Company and recognizethe profit and loss on investments on such basis. Where the losses on internal transactions betweenthe Company and the investee are impairment of related assets, full amounts of such losses shall berecognized. Profit and loss from internal unrealized transactions between the Company’s subsidiariesincluded into the combination scope and associates and joint ventures shall be written off according tothe above principles and the profit and loss on investments thereafter shall be recognized on such basis.When the share of net loss of the investee attributable to the Company is recognized, it is treated in thefollowing sequence: Firstly, write off the book value of the long-term equity investments; where the bookvalue of the long-term equity investments is insufficient to cover the loss, investment losses arerecognized to the extent that book value of long-term equity which form net investment in the investeein other substances and the book value of long-term receivables shall be written off; after all the abovetreatments, if the Company still assumes additional obligation according to investment contracts oragreements, the obligation expected to be assumed should be recognized as provision and includedinto the investment loss in the current period. If the investee is profitable in subsequent accountingperiods, the Company shall treat the loss in reverse order against that described above after deductingunrecognized share of loss: i.e. write down the book value of the recognized provision, then restore thebook value of long-term interests which substantially form net investments in the investee, then restorethe book value of long-term investments, and recognize investment income at the same time.
5.23 Investment property
Investment property is the property that is held to earn rent or capital appreciation or both and can bemeasured and sold separately. The Company’s investment property includes land use right already rent,land use right held for appreciation and then sold, and buildings already rent.
(1) Initial Recognition
When the Company can obtain the rental income or value-added income related to the investmentproperty and the cost of the investment property that can be measured reliably, the Company will
initially measure it according to the actual expenditure of purchase or construction:
The cost of the purchased investment property includes the purchase price and related taxes directlyattributable to the asset;The cost of self-built investment property consists of the necessary expenses incurred before the assetreaches the intended use condition;The cost of the investment property obtained by other means shall be recognized in accordance withrelevant accounting standards.
(2) Subsequent measurement
In general, the Company adopts the cost model to measure the follow-up expenditure of investmentproperty. The depreciation or amortization of investment property shall be carried out in accordancewith the accounting policies for the Company's fixed assets or intangible assets.
If there is solid evidence suggests that the investment property acquired can be measured at fair valuecontinuously and reliably, the Company can use fair value model for subsequent measurement. For theinvestment property measured at fair value model, the Company does not provide depreciation oramortization and adjusts its book value based on the fair value of investment property at the balancesheet date. The difference between the fair value and book value is recorded into current profit or loss.
(3) When the Company changes the use of investment property, the relevant investment property willbe transferred to other assets.
5.24. Fixed assets
(1) Recognition of fixed assets
Fixed assets refer to tangible assets held for the purpose of producing commodities, providing services,renting or business management with useful life exceeding one accounting year. Fixed assets arerecognized when the following criteria are satisfied simultaneously: It is probable that the economicbenefits relating to the fixed assets will flow into the Company; the cost of the fixed assets can bemeasured reliably.
(2) Depreciation of fixed assets
Except for fixed assets still in use after full depreciation, the Company depreciates all fixed assets andcalculates the depreciation in the straight-line depreciation method.Based on the nature and use of fixed assets, the Company determines their service life and estimatednet salvage value and reviews their service life, estimated net salvage value and depreciation methodat the end of the year. Changes in the service life, estimated net salvage value and depreciation
method of the same type of assets are treated as changes in accounting estimation.
Impairment test method and impairment provision accrued method of fixed assetsAt the end of the period, the fixed assets shall be measured at the lower of the book value and therecoverable amount. If the recoverable amount of fixed assets is lower than the book value due to acontinuous decline in the market value, or technological obsolescence, damage, or long-term idleness,a provision for impairment of the fixed assets shall be made for the difference between the recoverableamount and the book value of individual fixed assets. If the recoverable amount of the individual assetis difficult to estimate, the Company will determine the recoverable amount of the asset group based onthe asset group to which the asset belongs. The impairment losses on fixed assets must not bereversed in subsequent accounting periods once recognized.
For fixed assets for which depreciation provision has been made, the depreciation rate and depreciationamount shall be remeasured according to the book value of the fixed assets (the original price of fixedassets minus accumulated depreciation and provision for impairment), and the remaining service life.
On the balance sheet date, the fixed assets shall be measured at the lower of the book value and therecoverable amount. The category, estimated useful life, estimated residual value rate and annualdepreciation rate of fixed assets of the Company are as follows:
| Category | Depreciation method | Estimated useful life (Year) | Estimated residual value rate (%) | Annual depreciation rate (%) |
| Buildings and Constructions | Straight-line method | 10-45 | 5% | 9.50－2.11 |
| Special equipment | Straight-line method | 5-35 | 5% | 19.00－2.71 |
| Universal equipment | Straight-line method | 4-25 | 5% | 23.75－3.80 |
| Transportation equipment | Straight-line method | 6 | 5% | 15.83 |
| Other equipment | Straight-line method | 4-16 | 5% | 23.75－5.94 |
(3) Recognition standard, valuation method and depreciation method for fixed assets acquiredunder financing leaseA finance lease refers to a lease where almost all the risks and rewards, related to the ownership of theleased asset, are substantially transferred, regardless of whether the ownership is eventuallytransferred or not. The policy for the accrual of the depreciation of the leasehold property for the fixedassets acquired under the finance lease was consistent with that adopted for the Company's fixedassets. If there is reasonable assurance that the Company will obtain the ownership of the leasedassets when the lease term expires, the leased assets should be depreciated over its useful life; if thereis no reasonable assurance that the Company will obtain the ownership of the leased assets when thelease term expires, the leased assets should be depreciated over the shorter of the lease term or theuseful life of the leased assets.
5. 25. Construction in progress
(1) Construction in progress refers to various construction and installation works carried out for theconstruction or repair of fixed assets, including the actual expenditure incurred in new construction,reconstruction and expansion, and the net value of fixed assets transferred from the reconstruction andexpansion projects.
(2) Construction in progress is accounted on an individual project basis with actual cost valuationmethod. The borrowing costs incurred before the projects reach the intended use condition shall beincluded in the project cost. The fixed assets shall be carried forward in the month when the project isqualified for acceptance and delivery for use. For those that have reached the intended use conditionbut have not yet completed the final account, from the date of reaching the intended use condition,according to the project budget, construction cost or the actual cost of the project, the cost transferredto the fixed assets shall be determined according to the estimated value, and the depreciation shall berecognized; After the completion of the final account, the original provisional value shall be adjustedaccording to the actual cost, but the amount of depreciation accrued shall not be adjusted.
(3) The loan interest and related expenses incurred during the construction period shall be capitalizedinto the cost of the construction in Progress.
(4) On the balance sheet date, the construction in progress is recognized at the lower of book value andrecoverable amount.
5. 26. Borrowing costs
(1) Scope of borrowing costs and its capitalization conditions
The Company’s borrowing costs capitalized during period of capitalization are relevant loan expensesdirectly attributable to the assets eligible for capitalization, including interest thereon, amortization ofdiscounts or premiums, ancillary expenses and exchange differences incurred from foreign currencyloan, etc.
Borrowing costs are capitalized when the following three conditions are met simultaneously: ① theasset expenditure has occurred, ② the borrowing costs have occurred, ③ the purchase andconstruction activities necessary to make the assets reach the intended use condition have started.
(2) Recognition of capitalized amounts
The capitalized amount of borrowing expenses is calculated as follows: As for special loan borrowed foracquiring and constructing or producing assets eligible for capitalization, borrowing costs of special loanactually incurred in the current period less the interest income of the loans unused and deposited inbank or return on temporary investment should be recognized as the capitalization amount of borrowingcosts. 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 by multiplying theweighted average of asset disbursements of the part of accumulated asset disbursements in excess ofspecial loans by the capitalization rate of used general loans. During the period of capitalization, thecapitalized amount of interest of each accounting period shall not exceed the current actual interest ofthe relevant loans. Where there are discounts or premiums on loans, the amounts of interest for eachaccounting period should be adjusted taking account of amortizable discount or premium amounts forthe period by effective interest method. Auxiliary expenses incurred from special loans before theacquired or constructed assets eligible for capitalization reach the working condition for their intendeduse or sale should be capitalized when they incur and charged to the costs of assets eligible forcapitalization; those incurred after the acquired or constructed assets eligible for capitalization reach theworking condition for their intended use or sale should be recognized as costs according to theamounts incurred when they incur and charged to the current profit or loss.
(3) Recognition of capitalization rate
For a special loan for the purchase and construction of fixed assets, the capitalization rate is theinterest rate of the loan;For more than one special loan for the acquisition and construction of fixed assets, the capitalizationrate is a weighted average interest rate of these loans.
(4) Capitalization suspension of borrowing costs
If the acquisition and construction or production activities of assets eligible for capitalization areinterrupted abnormally and this condition lasts for more than three months, the capitalization ofborrowing costs should be suspended. The borrowing costs incurred during interruption are charged toprofit or loss for the current period, and the capitalization of borrowing costs continues when theacquisition and construction or production activities of the asset resume.
(5) Capitalization cessation of borrowing costs
Capitalization of borrowing costs should cease when the acquired and constructed or produced assetseligible for capitalization have reached the working condition for their intended use or sale. Borrowingcosts incurred after the assets eligible for capitalization have reached the working condition for theirintended use or sale should be recognized as the current profit and loss when they incur. If parts of theacquired and constructed or produced assets are completed separately but the assets cannot be usedor sold externally until overall completion, the capitalization of borrowing costs should cease at the timeof overall completion of the said assets.
5.27. Biological assets
N/A
5.28. Oil and gas assets
N/A
5. 29. Using right assets
Refer to Note 5.42 Lease for the detail.
5. 30. Intangible assets
(1) Measurement method, useful life, impairment test
Intangible assets refer to identifiable non-monetary assets that are owned or controlled by the Companywithout a physical form.Measurement methoda. Costs of intangible assets purchased include purchase price, related tax and expenses and otherexpenditure that can be distributed to the asset directly to reach its expected use.b. Intangible assets invested by investors shall be valued at the value agreed upon in the investmentcontract or agreement;c. Expenses on the research phase of internally researched and developed intangible assets shall beincluded in the current profit and loss when they incur; The expenditures incurred in the developmentstage of the internal research and development projects shall be recognized as intangible assets whenthe following conditions are met; otherwise, they shall be recorded into the current profit and loss whenthey incur.i. It is technically feasible to finish intangible assets for use or sale;ii. It is intended to finish and use or sell the intangible assets;iii. The usefulness of methods for intangible assets to generate economic benefits shall be proved,including being able to prove that there is a potential market for the products manufactured by
applying the intangible assets or there is a potential market for the intangible assets themselves orthe intangible assets will be used internally;iv. It is able to finish the development of the intangible assets, and able to use or sell the intangibleassets, with the support of sufficient technologies, financial resources and other resources.v. The expenditure attributable to the intangible asset during its development phase can bemeasured reliably.d. If payment of the purchase price of intangible assets can be deferred and exceeds normal creditconditions, the purchase has the nature of finance in fact and cost of the intangible asset shall bedetermined on the basis of present value of the purchase price. The difference between the amountactually paid and the present value of the purchase price should be recorded into current profit or lossother than those should be capitalized during the credit period.
Useful life and amortization methodFor intangible assets with limited useful life, amortization shall be carried out according to the straight-line method within the period that brings economic benefits to the enterprise. At the end of each period,the useful life and amortization method of intangible assets with limited service life shall be reviewed. Ifthere are differences with the original estimates, corresponding adjustments shall be made.Intangible assets whose useful life is uncertain shall be regarded as intangible assets if it is impossibleto foresee the term in which intangible assets bring economic benefits to the enterprise. Intangibleassets with uncertain useful life shall not be amortized during the holding period, and the life ofintangible assets shall be reviewed at the end of each period. If it is still uncertain after the review at theend of the period, the impairment test shall continue during each accounting period. At the end of eachperiod, the useful life of intangible assets with uncertain service life shall be reviewed.
Impairment testOn the balance sheet date, intangible assets are valued at the lower of book value and recoverableamount.
(2) Internal research and development expenditure accounting policyThe expenditures incurred in the development stage of the internal research and development projectsshall be recognized as intangible assets when the following conditions are met; otherwise, they shall berecorded into the current profit and loss when they occur.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 methods for intangible assets to generate economic benefits shall be proved,including being able to prove that there is a potential market for the products manufactured by applyingthe intangible assets or there is a potential market for the intangible 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 the intangibleassets, with the support of sufficient technologies, financial resources and other resources.e. The expenditure attributable to the intangible asset during its development phase can be measuredreliably.Development expenditures that have been recorded into profit and loss in previous periods are notrecognized as assets in subsequent periods. The capitalized expenditure in the development stage islisted as development expenditure in the balance sheet, and it will be recorded into intangible assetsfrom the date when the project reaches its intended purpose.
5. 31. Long-term assets impairment
On the balance sheet date, the Company makes a judgment on whether there are signs of possibleimpairment of long-term assets. If there are impairment indicators of non-current assets, the Companyestimates the recoverable amount based on individual asset. If recoverable amount of individual assetis difficult to be estimated, the Company should recognize the recoverable amount of the asset groupwhich the individual asset belongs to.The recoverable amount is the higher of fair values less costs of disposal and the present values of thefuture cash flows expected to be derived from the asset.If the measurement result of recoverable amount shows that recoverable amount of the non-currentassets is less than its book value, the book value shall be written down to the recoverable amount, andthe amount written down shall be recognized as the impairment loss of assets, recorded into the currentprofit and loss, and the corresponding impairment provision of assets shall be made at the same time.Once impairment loss stated above is recognized, reversal is not allowed in the subsequent accountingperiods.After the recognition of the impairment loss, the depreciation or amortization expense of the impairmentasset shall be adjusted accordingly in the future period so as to systematically apportion the adjustedbook value of the asset (deducting the expected net salvage value) within the remaining service life ofthe asset.The Company should perform impairment test for goodwill and intangible assets with indefinite life atleast at each year end, no matter whether there is impairment indicator.Goodwill shall be combined with its related asset group or asset group portfolio so as to perform animpairment test. When the Company performs an impairment test on relevant asset group or assetgroup portfolio including goodwill, if there are signs of impairment, the Company shall firstly perform animpairment test on asset group or asset group portfolio excluding goodwill and calculate therecoverable amount, and compare with the related book value, recognize the corresponding impairmentloss. Then, the Company performs an impairment test on relevant asset group or asset group portfolioincluding goodwill, and compares the book value of the relevant asset groups or asset group portfolio
(including proportional book value of goodwill) with its recoverable amount. If the recoverable amount ofrelevant asset group or asset group portfolio is less than its book value, the Company shall recognizeimpairment loss of goodwill.
5. 32. Long-term deferred expenses
Long-term deferred expenses shall be initially measured according to the actual costs incurred. It isamortized using the straight-line method over the beneficial period. If it cannot benefit the followingaccounting period, the amortized value of the item that has not been amortized will be transferred to thecurrent profit and loss.
5. 33. Contract liabilities
The recognition method of contract liabilities: The Company presents contract assets or contractliabilities on the balance sheet according to the relationship between the fulfillment of its contractperformance obligations and its customers’ payment. Obligations to be fulfilled by the Company oftransferring commodities or providing services to customers, as the Company has received or shouldreceive customers’ considerations, are presented as contract liabilities.
5. 34. Employee benefits
Employee benefits refer to the various forms of remuneration or compensation provided by theCompany in order to obtain services offered by employees or terminate an employment relationship.Employee remuneration mainly includes short-term remuneration, post-employment benefits, dismissalbenefits, and other long-term employee welfare.
(1) Accounting treatment method of short-term benefits
Short-term benefits are the benefits that the Company expects to pay in full within 12 months after thereporting period in which the employee provided relevant services, excluding the compensation foremployment termination. Accrued short term benefits will be recognized as liability during theaccounting period in which the employee is providing the relevant service to the Company. The liabilitywill be included in the current profit and loss or the relevant assets cost.
(2) Accounting treatment method of post-employment benefits
a. Defined contribution planThe defined contribution plan of the Company includes payments of basic pension and unemploymentinsurance calculated according to the local payment base and proportion. The amount shall be includedinto the profit and loss or the relevant assets cost for the accounting period in which the employeeprovides the service to the Company.b. Defined benefit plan
According to the formula determined by the expected accumulative projected unit credit method, theCompany will record the benefit obligation generated by the defined benefit plan belonging to the periodduring in which the employee provides the service into the current profit and loss or the relevant assetscost.The deficit or surplus resulting from the present value minus the fair value of the assets of a definedbenefit plan is recognized as a net liability or net asset of a defined benefit plan. If there is surplus in thedefined benefit plan, the net assets of the defined benefit plan shall be measured at the lower of thesurplus and the upper limit of assets of the defined benefit plan.All defined benefit plan obligations, including those expected to be paid within the twelve monthsfollowing the end of the annual reporting period in which the employee provides the service, arediscounted based on the market yield and high quality corporate bonds in an active market that matchthe duration and currency of defined benefit plan obligations on the balance sheet date.The service costs generated by the defined benefit plan and the net interest on net liabilities or netassets of the defined benefit plan are included in the current profit and loss or relevant assets cost;Changes in net liabilities or net assets generated by the re-measurement of the defined benefit plan areincluded in other comprehensive income and are not reversed to profit and loss in subsequentaccounting periods.At the time of settlement of the defined benefit plan, the settlement gains or losses shall be recognizedaccording to the difference between the present value of the obligations of the defined benefit plan andthe settlement price determined on the settlement date.
(3) Accounting treatment method of termination benefits
Employee benefits liabilities shall be recognized and included into profit or loss for the current period onthe earlier date of the two following circumstances:
a. When the Company is not able to withdraw the benefits from termination of employment orresignation persuasion unilaterally;b. When the Company recognizes costs and fees relevant to reforming the termination benefitspayment.As for the termination benefits that cannot be fully paid within 12 months after the end of the annualreport period, the Company shall choose an appropriate discount rate and record it into current profitand loss based on it.
(4) Accounting treatment method of other long-term employee benefitsOther long-term employee benefits are all employee benefits other than short-term benefits, post-employment benefits and termination benefits.Other long-term employee benefits provided by the Company to the employee that meet the conditionsof the defined contribution plan shall be treated in accordance with the same principles of the defined
contribution plan; If the conditions for defined benefits are met, net liabilities or net assets of other long-term employee benefits shall be recognized and measured in accordance with the relevant principles ofthe defined benefits plan.
5. 35. Lease liabilities
Refer to the Note 5.42 Lease for details.
5. 36. Estimated liabilities
(1) Recognition criteria of estimated liabilities
If the contingent obligations meet the following conditions simultaneously, the Company shall recognizeit as an estimated liability:
This obligation is the Company's current obligation; the performance of this obligation is highly likely toresult in an outflow of economic benefits from the Company; The amount of the obligation can bemeasured reliably.
(2) Measurement method of estimated liabilities
The Company's estimated liabilities are initially measured in terms of the best estimate of theexpenditure of fulfilling the relevant current obligations.For determining the best estimate, the Company takes various factors into account such as the risk,uncertainty and time value of money related to contingencies. If the time value of money has asignificant impact, the best estimate is determined by discounting the relevant future cash outflows.The best estimate is processed as follows:
Where there is a continuous range (or range) of required expenditures and the probability of theoccurrence of various results within the range is same, the best estimate is determined according to themean of the middle value of the range, namely the mean value of the upper and lower limits.Where there is no continuous range (or range) of required expenditures, or where there is a continuousrange but the possibility of various outcomes within the range is different, if the contingencies involve asingle item, the best estimate is determined according to the most likely amount; If the contingenciesinvolve more than one item, the best estimate is calculated and determined according to variouspossible results and relevant probabilities.Where all or part of the expenses required for the liquidation of the estimated liabilities of the Companyare expected to be compensated by a third party, the amount of compensation shall be recognized asan asset when it is basically confirmed that it can be received, and the confirmed amount ofcompensation shall not exceed the book value of the estimated liabilities.
5. 37. Share-based payment
(1) The type of share-based payment
Share-based payment is classified as equity-settled share-based payment and cash-settled share-based payment.
(2) The method of determining the fair value of equity instruments
For equity-settled share-based payment related with employees, the equity instrument is measured atfair value. The cash-settled share-based payment shall be measured according to the fair value of theliabilities calculated and determined on the basis of shares or other equity instruments undertaken bythe Company.For the fair value of the stock option granted, the fair value is determined by using the stock optionpricing model, and the following factors are taken into account: the current price of the underlyingshares, the exercise price of the option, the risk-free interest rate within the period of the option, theoption life, and the expected volatility of the stock price.
(3) Recognition of the best estimate basis of instrument that can be exercisedFor the equity-settled share-based payment settled immediately after the grant, the fair value of theequity instrument shall be included in the relevant costs or expenses on the grant date, and the capitalreserve shall be increased accordingly. Grant date means the date on which the share-paymentagreement is approved.For the equity-settled share-based payment, in which the services during waiting period are completedand the performance conditions are met, in return for services of employees, on each balance sheetdate during waiting period, the current obtained service shall be included in the relevant costs orexpenses and the capital reserves in accordance with the fair value of the equity instruments on thegrant date, based on best estimate of the number of vested equity instruments, and the subsequentchanges in fair value shall not be recognized. On each balance sheet date during waiting period, theCompany makes the best estimate based on the latest available employee number change and othersubsequent information, and modifies the number of equity instruments for the estimated vesting. Onthe vesting date, the final expected number of vesting instruments is the same as the actual number ofvesting instruments.
(4) Relevant accounting treatment of implement, modification and termination of share-based paymentplanFor equity-settled share-based payment, no adjustments will be made to the recognized costs and totalowners' equity after the vesting date. On the vesting date, the Company shall recognize the sharecapital and the equity premium according to the exercise situation, and carry forward the capital reserverecognized in the waiting period.
No matter how it modifies the terms and conditions of the granted equity instruments or it cancels thegranted equity instruments or its settlement, the equity instruments granted by the Company shall berecognized at fair value on the grant date and it measures obtained the corresponding services, unlessit cannot be vested because it cannot meet the vesting conditions of equity instruments (except marketconditions).
5.38. Other financial instruments such as preferred shares and perpetual bonds
N/A
5. 39. Revenue
(1) Basic principles of revenue identification
The Company recognizes revenue when it has fulfilled the performance obligations under the contract,that is, when the customers obtain the control of relevant goods or services, at the transaction priceallocated to the performance obligations.Performance obligations refer to the Company's promise that it will transfer clearly distinguishablegoods or services to customers under the contract.Obtaining control of related goods refers to that customers can control the use of the goods and obtainalmost all the economic benefits from the goods.The Company will evaluate the contract on the contract start date, identify each individual performanceobligation contained in the contract, and judge whether each individual performance obligation will beperformed within a certain period of time or at a certain point in time. If one of the following conditions ismet, and the performance obligation are performed within a certain period of time, the Company willidentify revenue within a period of time according to the performance progress: a. The customers obtainand consume the economic profits while the Company performs the contract. b. The customers cancontrol the products under construction during the performance of the Company; c. The productsproduced during the performance of the Company cannot be replaced, and the Company has the rightto collect payment for the completed performance accumulated during the entire contract period.Otherwise, the Company will identify revenue when the customers obtain control rights of the relevantgoods or services.For the performance obligations performed within a certain period of time, the Company will apply theinput-output method to identify the appropriate performance progress based on the nature of the goodsand services. The input-output method is to identify the performance progress based on the value of thegoods that have been transferred to the customers to the customers. When the performance progresscannot be reasonably identified and the Company's incurred costs are expected to be compensated,the Company will identify the revenue according to the amount of the incurred costs until theperformance progress can be reasonably identified.
(2) The methods of revenue identification
The Company mainly sells alcoholic products, which is a performance obligation performed at a certainpoint in time. The revenue identification of domestic products must meet the following requirements: a.The Company has delivered the products to the purchasers according to the contract and thepurchasers have signed and confirmed the receipts. b. The amount of sales revenue has beenidentified. c. The payment has been received; the receipt of the document of title has been obtainedand the relevant economic benefits are likely to flow in. d. The product-related costs can be reliablycalculated. The following requirements must be met to confirm the revenue of export products: a. TheCompany has declared the products in accordance with the contract, obtained the bills of lading,received the payment or obtained the receipt of payment and related economic benefits that are likelyto flow in. b. The main risks and rewards of the product ownership have been transferred. c. The legalownership of the goods has been transferred.
5. 40. Government grants
Government grants are monetary assets and non-monetary assets acquired free of charge by theCompany from the government like fiscal subsidies.
(1) Judgment basis and accounting treatment method of government grants related to assetsGovernment grants related to assets are government grants that are acquired by the Company andused for forming long-term assets through purchasing and constructing or other ways. If thegovernment documents do not clearly specify the target of the subsidy, the Company shall separatelyexplain judgment basis of classifying the government grants into the government grants related toassets or income.Accounting method: it shall be recognized as deferred income allocated evenly over the useful lives(the period of depreciation and amortization) of the relevant assets from the month of commence ofdepreciation or amortization when the relevant assets reaching the intended use condition, andincluded in the current profit or loss. However, government grants measured at the nominal amountshall be directly included in current profit and loss.
(2) Judgment basis and accounting treatment method of government grants related to incomeGovernment grants related to income are government grants other than government grants related toassets;Accounting method:
a. If it is used to compensate the Company’s relevant expenses or losses in future periods, it should berecognized as deferred income and included into the current profit and loss or written off of the relatedcosts when the relevant expenses, losses are recognized.b. If it is used to compensate the Company’s relevant expenses or losses incurred, it is directly includedinto the current profit and loss on acquisition or written off of the related costs.
c. Recognition time-point of government grantsGovernment grants are recognized when the Company can meet the attached conditions for thegovernment grants and the Company can receive the grants.d. Measurement of government grantsIf a government grant is a monetary asset, it shall be measured in the light of the received or receivableamount. If a government grant is a non-monetary asset, it shall be measured at its fair value; and if itsfair value cannot be obtained in a reliable way, it shall be measured at a nominal amount.
5. 41. Deferred tax assets or deferred tax liabilities
The Company adopts the balance sheet liability method to account for income tax.The Company recognizes deferred tax assets when the following conditions are met simultaneously:
i. Temporary differences are highly likely to be reversed in the foreseeable future;ii. Taxable income that may be used to offset the deductible temporary difference is likely to beobtained in the future and is limited to the amount of taxable income that is likely to be obtained.On each balance sheet date, the current income tax liabilities (or assets) incurred in the current periodor prior periods shall be measured by the Company in light of the expected payable (refundable)amount of income taxes according to the tax law; The deferred income tax assets and deferred incometax liabilities shall be measured at the tax rate applicable to the period during which the assets areexpected to be recovered or the liabilities are expected to be settled.The Company shall review the carrying amount of deferred income tax assets on each balance sheetdate. The current income tax and deferred income tax shall be recorded into the current profit and lossas income tax expense or income, except for the income tax generated from the enterprise merger,transactions or events directly recognized in the owner's equity.
5. 42. Lease
From the effectiveness date of a contract, the Company assessed whether the contract was a lease orincludes any lease. If a party to the contract transferred the right allowing the control over the use ofone or more assets that had been identified within a certain period, in exchange for a consideration,such contract was a lease or includes a lease.
(1) Accounting treatment with the Company as lessee
On the commencement date of the lease term, the Company recognizes the right-of-use assets andlease liabilities for the lease, unless it is a simplified short-term lease or a low-value asset lease.Right-of-use assets are initially measured at costs, including: A. The initial measurement amount oflease liabilities; B. If there is a lease incentive for the lease payment paid on or before the start date ofthe lease term, the relevant amount of the lease incentive already enjoyed shall be deducted; C. Initial
direct expenses incurred by the Company; D. The expected cost to be borne by the Company in orderto dismantle and remove the assets leased, restore original state of the place where the assets leasedare in, or restore the assets leased to the state stipulated in the lease terms.The Company initially measures the lease obligation at the present value of the lease paymentsoutstanding at the commencement date of the lease term. When calculating the present value of leasepayments, the Company uses the interest rate implicit in lease as the rate of discount. If the interestrate implicit in lease cannot be determined, the Company’s incremental lending rate is used as the rateof discount.After the commencement of the lease term, the Company uses the cost model for subsequentmeasurement of right-of-use assets, depreciates right-of-use assets on a straight-line basis, calculatesthe interest expense on the lease liability within the lease term and includes it in the current profit orloss, unless such interest charge is stipulated to be included in the underlying asset cost. Variable leasepayments that are not included in the measurement of the lease obligation should be included in thecurrent profit or loss when they are actually incurred, unless such payments are stipulated to beincluded in the underlying asset cost.After the commencement of the lease term, the Company remeasures the lease liability and adjusts thecorresponding right-of-use asset, and if the carrying value of the right-of-use asset has been reduced tozero but the lease liability is subject to further reduction, the difference is recorded in current profit orloss: (1) When there is a change in the valuation of the purchase option, renewal option or terminationoption, or actual exercise, the Company remeasures the lease liabilities at the present value of thelease payments after the change and the revised discount rate; (2) When there is a change in theactual fixed payment, the estimated payable of the residual value of the guarantee, the index or rateused to confirm the lease payment, the Company calculated the present value based on the changedlease payment amount and the original discount rate to remeasure the lease liabilities. However, wherechanges in lease payments arise from changes in floating interest rates, a revised discount rate wasused to calculate the present value.The Company does not recognize the right-of-use assets and lease liabilities for short-term leases andleases of low-value assets, which are included in the profit or loss for the current period or the cost ofrelevant assets on a straight-line basis during each period of the lease term.
(2) Accounting treatment with the Company as lessor
① Lease classification
The Company classifies leases into finance leases and operating leases at the inception of leases. Afinance lease refers to a lease where almost all the risks and rewards, related to the ownership of theleased asset, are substantially transferred, regardless of whether the ownership is eventuallytransferred or not. All leases other than finance leases are classified as operating leases.
② Accounting treatment of finance leases
On the commencement date of the lease term, the Company recognizes the finance lease receivablesfor the finance lease and derecognizes the leased asset of the finance lease. In the initial measurementof finance lease receivables, the sum of the unsecured residual value and the present value of thelease payments receivable not yet received on the commencement date of the lease term discounted atthe interest rate implicit in lease is the entry value of the finance lease receivables. The Companycalculates and recognizes the interest income in each period within the lease term at a fixed interestrate implicit in the lease. The received variable lease payments that are not included in themeasurement of the net investment in the lease are included in profit or loss for the current period whenthey are actually incurred.
③ Accounting treatment of operating leases
The Company recognizes the lease payments receivable of the operating lease as rental earnings ineach period within the lease term on a straight-line basis or according to other systematic andreasonable methods. The initial direct costs related to the operating lease are capitalized, amortizedwithin the lease term on the same basis as the recognition of rental earnings, and included in profit orloss for the current period. The received variable lease payments related to the operating lease that arenot included in the lease payments receivable are included in profit or loss for the current period whenthey are actually incurred.
5.43. Income tax expenses
The Company adopts the balance sheet liability method to account for income tax.The Company recognizes deferred tax assets when the following conditions are met simultaneously:
1. Temporary differences are highly likely to be reversed in the foreseeable future;
2. Taxable income that may be used to offset the deductible temporary difference is likely to be obtainedin the future and is limited to the amount of taxable income that is likely to be obtained.On each balance sheet date, the current income tax liabilities (or assets) incurred in the current periodor prior periods shall be measured by the Company in light of the expected payable (refundable)amount of income taxes according to the tax law; The deferred income tax assets and deferred incometax liabilities shall be measured at the tax rate applicable to the period during which the assets areexpected to be recovered or the liabilities are expected to be settled.The Company shall review the carrying amount of deferred income tax assets on each balance sheetdate. The current income tax and deferred income tax shall be recorded into the current profit and lossas income tax expense or income, except for the income tax generated from the enterprise merger,transactions or events directly recognized in the owner's equity.
5. 44 Changes in significant accounting policies and accounting estimates
5.44.1. Changes in significant accounting policies
?Applicable □ N/A
| Content and reason of changes | Approval procedures | Note |
| On 31 December 2021, the Ministry of Finance issued the Interpretation No. 15 of the Accounting Standards for Business Enterprises (C.K. [2021] No. 35), of which the “accounting treatment for the sale of products or by-products produced by an enterprise before the fixed assets reach their intended useable state or during the research and development process” and “judgment on loss-making contracts” were carried out by the Company from 1 January 2022. | N/A | This change in accounting policies does not significantly affect the Company’s consolidated financial statements. |
| On 30 November 2022, the Ministry of Finance issued the Interpretation No. 16 of the Accounting Standards for Business Enterprises (C.K. [2022] No. 31), of which the “accounting treatment of the income tax effects of dividends on financial instruments classified as equity instruments by the issuer” and “accounting treatment of the revision of cash-settled share-based payment to equity-settled share-based payment by an enterprise” were carried out by the Company from the date of publication. | N/A | This change in accounting policies does not significantly affect the Company’s consolidated financial statements. |
There was no other change in significant accounting policies in the reporting period other than theabove changes.
5.44.2. Changes in significant accounting estimates
□Applicable ? N/A
5.45. Other
N/A
6. Taxes
6.1. Major tax types and rates
| Tax type | Tax base | Tax rate |
| Value-added tax | Taxable sales income | 13 %, 9%, 6% |
| Urban maintenance and construction tax | Taxable turnover tax | 7% |
| Corporate income tax | Taxable income | 25%, 15%, 16.5%, 9%, 0% |
| Consumption tax (based on price) | Baijiu tax price or ex-factory price | 20% |
| Consumption tax (based on quantity) | Quantity of baijiu | CNY 1.00/kg |
| Education surcharge | Taxable turnover tax | 3% |
| Local education surcharge | Taxable turnover tax | 2% |
| Property tax | Original value of the property*70%; | 1.2%, 12% |
| house rent | ||
| Land use tax | Land area | CNY 5-18.00/m2 |
| Others | According to national regulation |
Tax payment subject using different corporate income tax rates, the corporate income tax rates are asfollows:
| Company name | Corporate income tax rate |
| Luzhou Pinchuang Technology Co., Ltd. | 15% |
| Luzhou Laojiao International Development (Hong Kong) Co., Ltd. | 16.5% |
| Luzhou Laojiao Commercial Development (North America) Co., Ltd. | 21%-40% |
| Mingjiang Co., Ltd. | 21%-40% |
| Luzhou Red Sorghum Modern Agricultural Development Co., Ltd. | Exempted from corporate income tax |
| Guangxi Luzhou Laojiao Imported Liquor Industry Co., Ltd. | 9% |
6.2. Tax preferences
(1) According to Announcement of the Ministry of Finance, State Taxation Administration and NationalDevelopment and Reform Commission on Continuing the Corporate Income Tax Policies Concerningthe Western Development Strategy (No. 23 in 2020, Ministry of Finance), from 1 January 2021 to 31December 2030, companies are located in the western region whose primary business is listed in theCatalogue of Encouraged Industries in the Western Region, and the primary business incomeaccounting for over 60% of the total enterprise income. These companies shall be subject to thecorporate income tax at a reduced rate of 15%. The Company's holding subsidiary, Luzhou PinchuangTechnology Co., Ltd., whose primary business income meet the requirements of scope and standard ofthe Catalogue of Encouraged Industries in the Western Region, is paid at the rate of 15% for corporateincome tax.
(2) According to Article 27 of the Corporate Income Tax Law of the People's Republic of China andArticle 86, Item 1 of the Implementation Regulations of the Corporate Income Tax Law, companies areexempted from enterprise income tax when they engage in agricultural, forestry, animal husbandry andfishery industries. The holding subsidiary of the Company, Luzhou Red Sorghum Modern AgriculturalDevelopment Co., Ltd., is engaged in the cultivation and sale of organic sorghum and enjoys thereduction of corporate income tax preferences.
(3) According to the Article 15, Item 1 of the Provisional Regulations on Value-Added Tax, agriculturalproducers sell self-produced agricultural products exempt from value-added tax. The holding subsidiaryof the Company, Luzhou Red Sorghum Modern Agricultural Development Co., Ltd., is engaged in thecultivation and sale of organic sorghum and enjoys the value-added tax exemption.
(4) According to the Article 3, Item 7 of the Notice on Revise of Interim Measures of Accelerating theDevelopment in Headquarters Economy of China-Malaysia Qinzhou Industrial Park, till 31 December2025, the enterprises in the Qinzhou Industrial Park that enjoy 15% of tax rate of Western Development
with the half reduction in the tax period of preferential policies shall enjoy the local share of corporateincome tax exemption (namely 40% of corporate income tax was exempted, and the proportionadjusted by the state shall be executed according to new proportion); Guangxi Luzhou Laojiao ImportedLiquor Industry Co., Ltd., the wholly-owned subsidiary of the Company, pays corporate income tax atthe rate of 9% according to the tax preference policies.
7. Notes to the main items of the consolidated financial statements (Allcurrency unit is CNY, except other statements)
7.1. Cash and cash equivalents
Monetary Unit: CNY
| Item | Closing Balance | Opening Balance |
| Cash | 28,711.93 | 26,281.86 |
| Bank deposit | 17,729,643,050.90 | 13,490,769,725.71 |
| Other cash and cash equivalents | 27,856,448.42 | 22,698,572.99 |
| Total | 17,757,528,211.25 | 13,513,494,580.56 |
| Including: Total deposit outbound | 68,948,954.39 | 63,993,390.31 |
| Total amount with restriction to use due to mortgage, pledge or freeze | 28,521,619.38 | 110,965,638.73 |
Other statements:
Note 1: The deposit outbound is the balance of cash and cash equivalents of the foreign holdingsubsidiary of the Company.Note 2: The closing balance of other cash and cash equivalents is the balance of CNY 17,856,448.42deposited by the subsidiary, Luzhou Laojiao Electronic Commerce Co., Ltd. on the third-party e-commerce platform, and guaranty letter deposit of CNY 10,000,000.00 by the subsidiary, LuzhouLaojiao Sales Co., Ltd., in the bank.Note 3: There is no special benefit arrangement such as establishing a fund co-management accountwith related parties in the current period.
7.2. Held-for-trading financial assets
Monetary Unit: CNY
| Item | Closing Balance | Opening Balance |
| Financial assets measured at fair value with their changes included into current profits/losses | 1,073,466,780.37 | 706,352,241.79 |
| Including: | ||
| Financial products at fair value through profit or loss | 1,073,466,780.37 | 706,352,241.79 |
| Including: | ||
| Total | 1,073,466,780.37 | 706,352,241.79 |
Other statements:
The closing balance represents the wealth management products of the collective asset managementplan purchased by the Company from securities-type companies and is measured at fair value basedon the amount calculated on the basis of the net unit value of the underlying assets as published on
the official website of the asset manager.
7.3. Accounts receivable
7.3.1. Classification of accounts receivable
Monetary Unit: CNY
| 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 | Amount | Proportion | Amount | Proportion | |||
| Including: | ||||||||||
| Accounts receivable tested for impairment by the portfolio | 6,265,890.81 | 100.00% | 326,470.03 | 5.21% | 5,939,420.78 | 1,713,947.55 | 100.00% | 85,699.00 | 5.00% | 1,628,248.55 |
| Including: | ||||||||||
| Accounts receivable tested for impairment on the portfolio with characteristics of credit risk | 6,265,890.81 | 100.00% | 326,470.03 | 5.21% | 5,939,420.781 | 1,713,947.55 | 100.00% | 85,699.00 | 5.00% | 1,628,248.55 |
| Total | 6,265,890.81 | 100.00% | 326,470.03 | 5.21% | 5,939,420.78 | 1,713,947.55 | 100.00% | 85,699.00 | 5.00% | 1,628,248.55 |
Note: 1 The closing book balance increased by CNY 4,551,943.26, up 265.58% compared with theopening balance, which was mainly due to the impact of the policy about sales on open account of theoverseas business of the Hong Kong Company.
Accounts receivable tested for impairment on the portfolio:
Monetary Unit: CNY
| Name | Closing Balance | ||
| Book balance | Provision for bad debt | Proportion | |
| Risk portfolio | 6,265,890.81 | 326,470.03 | 5.21% |
| Other portfolio | |||
| Total | 6,265,890.81 | 326,470.03 |
Please refer to the relevant information of disclosure of provision for bad debt of other accountsreceivable if adopting the general mode of expected credit loss to withdraw provision for bad debt ofaccounts receivable
□Applicable ? N/A
Disclosure by aging
Monetary Unit: CNY
| Aging | Closing balance |
| Within 1 year (including 1 year) | 6,002,381.01 |
| 1-2 years | 263,509.80 |
| Total | 6,265,890.81 |
7.3.2. Provision and recovery for bad and doubtful debt in the current periodAllowance of provision for bad debt:
Monetary Unit: CNY
| Type | Opening Balance | Current Period | Closing Balance | |||
| Allowance | Reversal or recovery | Write-off | Other | |||
| Provision allowance by risk portfolio | 85,699.00 | 240,771.03 | 326,470.03 | |||
| Total | 85,699.00 | 240,771.03 | 326,470.031 | |||
Note: There is no significant provision in accounts receivable reversed or recovered in the reportingperiod.
7.3.3. Top five entities with the largest balances of accounts receivable
Monetary Unit: CNY
| Company name | Closing Balance | Proportion to total closing balance of accounts receivable | Closing balance of provision for bad debt |
| China Duty Free International LTD | 3,890,598.54 | 62.09% | 194,529.93 |
| Sazerac Distiller LLC | 1,182,640.06 | 18.87% | 59,132.00 |
| BAIWAN WINES INC. | 559,788.31 | 8.93% | 27,989.42 |
| Beijing Secoo Trading Limited | 263,509.80 | 4.21% | 26,350.98 |
| Park Street Imports, LLC | 112,240.94 | 1.79% | 5,612.05 |
| Total | 6,008,777.65 | 95.89% |
7.4. Accounts receivable financing
Monetary Unit: CNY
| Item | Closing Balance | Opening Balance |
| Bank acceptance bill | 4,583,352,503.371 | 4,757,631,778.64 |
| Total | 4,583,352,503.37 | 4,757,631,778.64 |
Note: 1. The business mode to manage notes receivable aims to collect contract cash flow as well asto sell the financial assets, and thus the notes receivable is presented as accounts receivablefinancing; since the timing and price of bills discounted may not be reliably estimated due to the shortmaturity of the bills all being less than one year and the endorsement of the negotiable bills beingvalued at book value, the face value is regarded as the fair value of accounts receivable financing bythe Company.
2. There was no allowance of provision for bad debt at the end of the reporting period.
Changes in accounts receivable financing in the reporting period and fair value:
□Applicable ? N/A
Please refer to the relevant information of disclosure of impairment provision of other accountsreceivable if adopting the general mode of expected credit loss to withdraw impairment provision ofaccounts receivable financing.
□Applicable ? N/A
Other statements:
(1) There was no accounts receivable financing pledge at the end of year.
(2) There is CNY 9,632,933,882.81 as follows of accounts receivable financing that have beenendorsed to other parties by the Company but have not expired at the end of year:
| Item | Derecognition at period-end | Not derecognition at period-end |
| Bank acceptance bill | 9,632,933,882.81 | |
| Subtotal | 9,632,933,882.81 |
Note: The acceptor of the bank acceptance bill is a commercial bank. The probability of not beingpaid due is very low, and the possibility of being recourse is very low, so the confirmation has beenterminated.
(3) There are no accounts receivable financing transferred to accounts receivable due to the non-performance of the agreements by the issuers.
(4) There are no accounts receivable financing actually written off during the reporting period.
7.5. Prepayment
7.5.1. Aging analysis
Monetary Unit: CNY
| Aging | Closing Balance | Opening Balance | ||
| Amount | Proportion | Amount | Proportion | |
| Within 1 year | 108,917,843.70 | 95.33% | 174,252,091.59 | 97.85% |
| 1-2 years | 3,541,174.81 | 3.10% | 3,411,121.11 | 1.92% |
| 2-3 years | 1,633,422.20 | 1.43% | 424,476.11 | 0.24% |
| Over 3 years | 165,065.55 | 0.14% | ||
| Total | 114,257,506.261 | 178,087,688.81 |
Note: 1. The closing balance decreased by CNY 63,830,182.55 compared with opening balance, withan decrease by 35.84%, mainly due to the decrease of prepayments with the decline of productpromotion activities.
Reasons for significant prepayments whose aging is longer than 1 year without timely settlement:
There is no significant prepayment whose aging is longer than 1 year.
7.5.2. Top five entities with the largest balances of prepayment
| Company Name | Closing Balance | Proportion to the total closing balance of prepayment |
| Sports Equipment Center of General Administration of Sport of China | 26,712,328.78 | 23.38% |
| China Railway Chengdu Group Co.,Ltd. | 13,101,150.69 | 11.47% |
| Luzhou Western Gas Co., Ltd. | 12,050,769.30 | 10.55% |
| Luzhou Power Supply Company of State Grid Sichuan Electric Power Company | 6,984,742.47 | 6.11% |
| Sichuan Jiacheng Jingwei Culture Communication Co., Ltd. | 5,342,465.75 | 4.68% |
| Subtotal | 64,191,456.99 | 56.18% |
7.6. Other receivables
Monetary Unit: CNY
| Item | Closing Balance | Opening Balance |
| Other receivables | 23,396,533.981 | 28,615,361.96 |
| Total | 23,396,533.98 | 28,615,361.96 |
Note: 1. Other receivables above-mentioned refer to other receivables after deducted interestreceivable and dividend receivable.
7.6.1. Other receivables
7.6.1.1. Other receivables disclosed by nature
Monetary Unit: CNY
| Nature | Closing book balance | Opening book balance |
| Intercourse funds | 18,516,591.35 | 19,729,613.70 |
| Petty cash | 326,785.39 | 292,228.26 |
| Saving deposits involving contract disputes | 129,049,496.98 | 132,376,912.43 |
| Total | 147,892,873.721 | 152,398,754.39 |
Note 1: The saving deposits involving contract disputes are three deposits amounting to CNY500,000,000.00 with Changsha Yingxin Sub-branch of Agricultural Bank of China and NanyangZhongzhou Sub-branch of Industrial and Commercial Bank of China disclosed by the Company in the2014 Annual Report. The deposits have lost the nature of monetary fund due to their involvement in
contract disputes and have thus been transferred into “other receivables”.
7.6.1.2. Allowance of provision for bad debt
Monetary Unit: CNY
| Provision for bad debt | First stage | Second stage | Third stage | Total |
| Expected credit loss of the next 12 months | Expected loss in the duration (credit impairment not occurred) | Expected loss in the duration (credit impairment occurred) | ||
| Balance of 1 January 2022 | 3,783,392.43 | 120,000,000.00 | 123,783,392.43 | |
| Balance of 1 January 2022 in the current period | ||||
| Allowance of the current period | 924,947.31 | 924,947.31 | ||
| Write-off of the current period | 212,000.00 | 212,000.00 | ||
| Balance of 31 December 2022 | 4,496,339.741 | 120,000,000.00 | 124,496,339.74 |
Note 1: There is no significant amount change of loss provision in the current period.
Changes of book balance with significant amount changed of loss provision in the current period
□Applicable ? N/A
Disclosure by aging
Monetary Unit: CNY
| Aging | Book balance |
| Within 1 year (including 1 year) | 11,192,350.26 |
| 1-2 years | 636,514.08 |
| 2-3 years | 3,542,500.00 |
| Over 3 years | 132,521,509.38 |
| 3-4 years | 122,800.00 |
| 4-5 years | 1,168,807.90 |
| Over 5 years | 131,229,901.48 |
| Total | 147,892,873.72 |
7.6.1.3. Provision and recovery for bad and doubtful other receivables in the current periodAllowance of provision for bad debt:
Monetary Unit: CNY
| Type | Opening Balance | Current Period | Closing Balance | |||
| Allowance | Reversal or recovery | Write-off | Other | |||
| Other receivables tested for impairment | 120,000,000.00 | 120,000,000.00 | ||||
| individually | ||||||
| Other receivables tested for impairment by the portfolio | 3,783,392.43 | 924,947.31 | 212,000.00 | 4,496,339.74 | ||
| Total | 123,783,392.43 | 924,947.31 | 212,000.00 | 124,496,339.74 |
7.6.1.4. Other receivables actually verified in the current period
Monetary Unit: CNY
| Item | Amount |
| Other receivables | 212,000.001 |
Note 1: There are no other receivables actually verified in the current period.
7.6.1.4. Top five entities with the largest balances of the other receivables
Monetary Unit: CNY
| Company Name | Nature | Closing Balance | Aging | Proportion in total receivables | Provisioning amount at period end |
Agricultural Bankof ChinaChangshaYingxin Sub-branch, Industrialand CommercialBank of ChinaNanyangZhongzhou Sub-branch andanother bank
| Saving deposits involving contract disputes | 129,049,496.98 | Over 5 years | 87.26% | 120,000,000.00 | |
| CTS Luzhou Laojiao Cultural Tourism Development Co., Ltd. | Security deposit and intercourse funds | 5,111,743.43 | Within 1 year, 2-3 years | 3.46% | 780,587.17 |
| Longmatan Power Supply Bureau of Luzhou Power Bureau | Security deposit | 1,520,000.00 | Over 5 years | 1.03% | 1,520,000.00 |
| Southwest United Equity Exchange Co., Ltd. | Security deposit | 1,250,000.00 | Within 1 year | 0.85% | 62,500.00 |
| Online Banking (Beijing) Technology Co., Ltd. | Security deposit | 500,000.00 | 1-2 years, 3-4 years | 0.34% | 80,000.00 |
| Total | 137,431,240.41 | 92.93% | 122,443,087.17 |
7.7. Inventories
Whether the Company needs to comply with the disclosure requirements of real estate industryNo
7.7.1. Categories of Inventories
Monetary Unit: CNY
| Category | Closing Balance | Opening Balance | ||||
| Book Balance | Provision for stock obsolescence or impairment provision of contract performance costs | Book Value | Book Balance | Provision for stock obsolescence or impairment provision of contract performance costs | Book Value | |
| Raw materials | 128,252,608.95 | 128,252,608.95 | 123,986,924.38 | 123,986,924.38 | ||
| Goods in progress | 7,305,642,685.28 | 7,305,642,685.28 | 5,255,917,501.41 | 5,255,917,501.41 | ||
| Finished goods | 2,382,939,263.97 | 2,382,939,263.97 | 1,855,731,688.91 | 1,855,731,688.91 | ||
| Goods in transit | 23,907,816.65 | 23,907,816.65 | 41,937,052.10 | 41,937,052.10 | ||
| Total | 9,840,742,374.851 | 9,840,742,374.85 | 7,277,573,166.80 | 7,277,573,166.80 | ||
Note: 1. At the end of the period, it increased by CNY 2,563,169,208.05, up 35.22% compared withthe beginning of the period, which was mainly due to the joint impact of the Company's continuouspromotion of the plan on high-quality liquor production capacity and quality improvement,management requirements for product storage period and increase of the production volume ofproduct.
2. The closing balance of inventories included no capitalized amount of borrowing expenses.
3. The closing balance included no restricted balance.
4. There were no unsettled assets of finished job caused by the construction contract at the end ofthe period.
7.8. Other current assets
Monetary Unit: CNY
| Item | Closing Balance | Opening Balance |
| Value-added tax | 139,165,221.10 | 82,734,324.31 |
| Corporate income tax | 9,447,204.77 | 24,638,887.44 |
| Other taxes | 4,423,521.07 | 4,601,321.16 |
| Total | 153,035,946.94 | 111,974,532.91 |
Other statements:
The value-added tax expected to be deducted in the next fiscal year and corporate income tax andother taxes are disclosed in other current assets.
7.9. Long-term equity investments
Monetary Unit: CNY
| Investee | Opening Balance (book value) | Changes in current period | Closing Balance (book value) | Closing Balance of provision for impairment | |||||||
| Increase | Decrease | Gain or loss recognized under equity method | Adjustments of other comprehensive income | Other changes in equity | Cash divided or profit declared | Provision for impairment | Other | ||||
| 1. Joint Ventures | |||||||||||
| 2. Associate | |||||||||||
| Huaxi Securities Co., Ltd. | 2,493,328,165.33 | 43,897,917.31 | -12,402,376.19 | 27,283,114.40 | 2,497,540,592.05 | 2,567,098.80 | |||||
| Luzhou Laojiao Postdoctoral Workstation Technology Innovation Co., Ltd. | 40,000,000.00 | 185,894.77 | 40,185,894.77 | ||||||||
| Sichuan Development Wine Investment Co., Ltd. | 5,726,848.36 | 162,805.88 | 5,889,654.24 | ||||||||
| Sichuan Tongniang Baijiu Industry Technology Research Institute Co., Ltd. Note | 7,887,461.52 | 199,394.39 | 8,086,855.91 | ||||||||
| CTS Luzhou Laojiao Cultural | 119,801,761.04 | -4,004,204.84 | 115,797,556.20 | ||||||||
| Tourism Development Co., Ltd. | |||||||||||
| Subtotal | 2,626,744,236.25 | 40,000,000.00 | 40,441,807.51 | -12,402,376.19 | 27,283,114.40 | 2,667,500,553.17 | 2,567,098.80 | ||||
| Total | 2,626,744,236.25 | 40,000,000.00 | 40,441,807.51 | -12,402,376.19 | 27,283,114.40 | 2,667,500,553.171 | 2,567,098.80 |
Note: 1. On 10 March 2022, Luzhou Laojiao Postdoctoral Workstation Technology Innovation Co., Ltd.was incorporated, and the Company contributes CNY 40 million with the shareholding ratio as 40.00%measured by equity method; Laojiao Group contributes CNY 51 million with the shareholding ratio as
51.00%; and Luzhou Energy Investment Co., Ltd. contributes CNY 9 million with the shareholding ratioas 9.00%.
7.10. Other equity instrument investment
Monetary Unit: CNY
| Item | Closing Balance | Opening Balance |
| Financial assets designated to be measured at fair value through other comprehensive income | ||
| Including: | ||
| China Tourism Group Duty Free Corporation Limited | 807,139,120.071 | |
| Guotai Junan Securities Co., Ltd. | 160,049,389.21 | 210,690,476.31 |
| Luzhou Bank Co., Ltd. | 120,158,392.72 | 102,174,621.71 |
| Guotai Junan Investment Management Co., Ltd. | 22,611,834.24 | 22,611,834.24 |
| North Chemical Industries Co.,Ltd. | 14,931,950.24 | 15,963,896.54 |
| Guojiu Big Data Co., Ltd. | 10,000,000.00 | 10,000,000.00 |
| Sichuan China Baijiu Golden Triangle Brand Operation Development Co., Ltd. and other equity instrument investments | 1,846,291.63 | 1,871,291.63 |
| Total | 1,136,736,978.11 | 363,312,120.43 |
Note: 1 In August 2022, the Company subscribed 3,928,600 shares of China Tourism Group Duty FreeCorporation Limited at HKD 158 per share; based on the holding intention, the Company classifiedthem as financial assets measured at fair value through other comprehensive income.
Categories of non-trading equity instrument investment in the current period:
Monetary Unit: CNY
| Item | Recognized dividends income | Accumulative gains | Accumulative losses | Amount of other comprehens | Reason for assigning to measure at | Reason of other comprehensiv |
| ive income transferred to retained earnings | fair value and changes recorded into other comprehensive income | e income transferred to retained earnings | ||||
| China Tourism Group Duty Free Corporation Limited | 264,853,739.27 | According to the mode of managing assets by management layer | ||||
| Guotai Junan Securities Co., Ltd. | 8,008,357.96 | 147,330,232.45 | According to the mode of managing assets by management layer | |||
| Luzhou Bank Co., Ltd. | 69,038,392.72 | According to the mode of managing assets by management layer | ||||
| Guotai Junan Investment Management Co., Ltd. | According to the mode of managing assets by management layer | |||||
| North Chemical Industries Co.,Ltd. | 70,359.97 | 13,901,950.24 | According to the mode of managing assets by management layer | |||
| Guojiu Big Data Co., Ltd. | According to the mode of managing assets by management layer | |||||
| Shenzhen Xingangfeng Development Co., Ltd. | 2,354,000.00 | According to the mode of managing assets by management layer | ||||
| Sichuan Deyang Jintai Hotel | 2,000,000.00 | According to the mode of managing assets by management layer | ||||
| Hainan Huitong International Trust | 1,000,000.00 | According to the mode of managing assets by |
| Company | management layer | |||||
| Sichuan China Baijiu Golden Triangle Brand Operation Development Co., Ltd. and other equity instrument investments | 398,926.37 | According to the mode of managing assets by management layer |
7.11. Investment property
7.11.1. Investment property with cost measurement model
?Applicable □ N/A
Monetary Unit: CNY
| Item | Buildings and constructions | Land use right | Construction in progress | Total |
| I. Original cost: | ||||
| 1.Opening balance | ||||
| 2.Increase in current period | 47,321,613.93 | 9,566,480.21 | 56,888,094.14 | |
| (1) External purchase | ||||
| (2) Transfer from inventories/fixed assets/construction in progress | 47,321,613.93 | 9,566,480.21 | 56,888,094.14 | |
| (3) Increase from business combination | ||||
| 3.Decrease in current period | ||||
| (1) Disposal | ||||
| (2) Other transfer out | ||||
| 4.Closing Balance | 47,321,613.93 | 9,566,480.21 | 56,888,094.14 | |
| II. Accumulated depreciation and amortization | ||||
| 1.Opening Balance | ||||
| 2.Increase in current period | 15,125,126.70 | 2,613,513.22 | 17,738,639.92 | |
| (1) Provision or amortization | ||||
| (2) Transfer from fixed assets/intangible assets | 15,125,126.70 | 2,613,513.22 | 17,738,639.92 | |
| 3.Decrease in |
| current period | ||||
| (1) Disposal | ||||
| (2) Other transfer out | ||||
| 4.Closing Balance | 15,125,126.70 | 2,613,513.22 | 17,738,639.92 | |
| III. Provision for impairment | ||||
| 1.Opening Balance | ||||
| 2.Increase in current period | ||||
| (1) Provision | ||||
| 3.Decrease in current period | ||||
| (1) Disposal | ||||
| (2) Other transfer out | ||||
| 4.Closing Balance | ||||
| IV. Book Value | ||||
| 1.Closing Book Value | 32,196,487.23 | 6,952,966.99 | 39,149,454.22 | |
| 2.Opening Book Value |
7.11.2. Investment property without certification of right
Monetary Unit: CNY
| Item | Book value | Reason for not having the certification of right |
| Buildings of the Company | 32,196,487.23 | In procedure |
| Subtotal | 32,196,487.23 |
7.12. Fixed assets
Monetary Unit: CNY
| Item | Closing Balance | Opening Balance |
| Fixed assets | 8,853,348,204.831 | 8,088,216,508.58 |
| Disposal of fixed assets | 2,910,393.95 | 1,270,765.81 |
| Total | 8,856,258,598.78 | 8,089,487,274.39 |
Note 1: The fixed assets listed above refer to the fixed assets deducted those disposed.
7.12.1. Details of fixed assets
Monetary Unit: CNY
| Item | Buildings and constructions | Specialized equipment | General equipment | Transportation equipment | Other equipment | Total |
| I. Original cost: | ||||||
| 1.Opening | 6,810,063,839 | 1,116,825,737 | 894,181,275.8 | 45,071,455.46 | 1,491,462,062 | 10,357,604,37 |
| balance | .38 | .03 | 1 | .44 | 0.12 | |
| 2.Increase in current period | 925,644,723.59 | 110,722,803.23 | 211,188,662.21 | 3,024,012.74 | 128,237,528.28 | 1,378,817,730.05 |
| (1) External purchase | 18,068,453.53 | 11,456,545.13 | 25,381,366.38 | 2,106,828.31 | 3,985,597.83 | 60,998,791.18 |
| (2) Transfer from construction in progress | 598,283,047.90 | 99,983,655.91 | 181,067,493.55 | 909,651.79 | 123,284,209.70 | 1,003,528,058.85 |
| (3) Increase from business combination | ||||||
| (4) Adjustment for completion settlement | 309,293,222.16 | -717,397.81 | 4,593,762.07 | 7,532.64 | 967,720.75 | 314,144,839.81 |
| (5) Transfer from intangible assets | 146,040.21 | 146,040.21 | ||||
| 3.Decrease in current period | 151,567,091.02 | 53,437,448.01 | 12,348,792.39 | 1,730,873.16 | 15,106,335.79 | 234,190,540.37 |
| (1) Disposal or retirement | 104,245,477.09 | 53,437,448.01 | 12,232,385.45 | 1,730,873.16 | 15,106,335.79 | 186,752,519.50 |
| (2) Transfer to investment property | 47,321,613.93 | 47,321,613.93 | ||||
| (3) Transfer to long-term deferred expenses | 116,406.94 | 116,406.94 | ||||
| (4) Transfer to intangible assets | ||||||
| 4.Closing Balance | 7,584,141,471.95 | 1,174,111,092.25 | 1,093,021,145.63 | 46,364,595.04 | 1,604,593,254.93 | 11,502,231,559.80 |
| II. Accumulated depreciation | ||||||
| 1.Opening Balance | 819,228,209.63 | 383,120,514.56 | 327,421,150.75 | 30,623,904.90 | 708,371,141.63 | 2,268,764,921.47 |
| 2.Increase in current period | 232,220,325.76 | 138,186,034.01 | 108,522,159.64 | 3,286,434.42 | 65,524,430.56 | 547,739,384.39 |
| (1) Provision | 232,220,325.76 | 138,186,034.01 | 108,400,989.22 | 3,286,434.42 | 65,524,430.56 | 547,618,213.97 |
| (2) Changes of exchange rates | 121,170.42 | 121,170.42 | ||||
| 3.Decrease in current period | 94,729,431.21 | 50,538,170.92 | 9,048,465.02 | 1,644,329.52 | 12,283,494.29 | 168,243,890.96 |
| (1) Disposal or retirement | 79,604,304.51 | 50,538,170.92 | 9,016,498.18 | 1,644,329.52 | 12,283,494.29 | 153,086,797.42 |
| (2) Transfer to investment property | 15,125,126.70 | 15,125,126.70 | ||||
| (3) Transfer to long-term deferred expenses | 31,966.84 | 31,966.84 |
| 4.Closing Balance | 956,719,104.18 | 470,768,377.65 | 426,894,845.37 | 32,266,009.80 | 761,612,077.90 | 2,648,260,414.90 |
| III. Provision for impairment | ||||||
| 1.Opening Balance | 622,940.07 | 622,940.07 | ||||
| 2.Increase in current period | ||||||
| (1) Provision | ||||||
| 3.Decrease in current period | ||||||
| (1) Disposal or retirement | ||||||
| 4.Closing Balance | 622,940.07 | 622,940.07 | ||||
| IV. Book Value | ||||||
| 1.Closing Book Value | 6,626,799,427.70 | 703,342,714.60 | 666,126,300.26 | 14,098,585.24 | 842,981,177.03 | 8,853,348,204.83 |
| 2.Opening Book Value | 5,990,212,689.68 | 733,705,222.47 | 566,760,125.06 | 14,447,550.56 | 783,090,920.81 | 8,088,216,508.58 |
7.12.2. Fixed assets leased out through operating lease
Monetary Unit: CNY
| Item | Closing book value |
| Buildings and constructions | 25,700,763.32 |
| Subtotal | 25,700,763.32 |
7.12.3. Fixed assets without certification of right
Monetary Unit: CNY
| Item | Book value | Reason for not having the certification of right |
| Buildings of the Company | 23,940,326.21 | The property ownership certificate has not been processed yet for the historical reasons, and it plans to be processed after gradually improving procedures. |
| Buildings of the Company | 266,081,326.56 | In procedure |
| Buildings of the subsidiary-brewing company | 4,411,836,502.14 | In procedure |
| Buildings of the subsidiary- Guangxi Imported Liquor Industry | 59,132,570.34 | In procedure |
| Subtotal | 4,760,990,725.25 |
7.12.4. Disposal of fixed assets
Monetary Unit: CNY
| Item | Closing Balance | Opening Balance |
| Disposal and retirement of assets | 2,910,393.95 | 1,270,765.81 |
| Total | 2,910,393.95 | 1,270,765.81 |
7.13. Construction in progress
Monetary Unit: CNY
| Item | Closing Balance | Opening Balance |
| Construction in progress | 808,919,047.21 | 1,259,845,487.50 |
| Total | 808,919,047.21 | 1,259,845,487.50 |
7.13.1. Details of the construction in progress
Monetary Unit: CNY
| Item | Closing Balance | Opening Balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
| Improvement and technical renovation project of Luzhou Laojiao production supporting | 563,063,821.82 | 563,063,821.82 | ||||
| Technical renovation of Luzhou Laojiao Intelligent packaging center | 638,798,849.16 | 638,798,849.16 | 301,985,162.65 | 301,985,162.65 | ||
| Landscape improvement project of Luzhou Laojiao Huangyi Brewing Ecological Park | 149,089,445.94 | 149,089,445.94 | ||||
| Technical renovation project of Luzhou Laojiao intelligent brewing (I) | 12,284,062.35 | 12,284,062.35 | ||||
| Other projects | 157,836,135.70 | 157,836,135.70 | 245,707,057.09 | 245,707,057.09 | ||
| Total | 808,919,047.211 | 808,919,047.21 | 1,259,845,487.50 | 1,259,845,487.50 | ||
Note: 1. The closing balance decreased CNY 450,926,440.29 compared with the opening balance, witha decrease by 35.79%, because of the carry forward of the project for completion in the current period.
7.13.2. Significant changes in construction in progress
Monetary 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 (%) | Accumulative capitalized interest | Including: Capitalized interest for the period | Capitalization rate for the period (%) | Source of funds |
| Improvement and technical renovation project of Luzhou Laojiao production supporting | 669,321,561.00 | 563,063,821.82 | 1,724,916.35 | 561,400,497.60 | 3,388,240.57 | 91.57% | 100.00% | Other | ||||
| Technical renovation of Luzhou Laojiao Intelligent packaging center | 1,886,176,000.00 | 301,985,162.65 | 337,766,482.97 | 685,771.68 | 267,024.78 | 638,798,849.16 | 36.54% | 40.00% | 150,769.29 | 150,769.29 | 3.59% | Other |
| Landscape improvement project of Luzhou Laojiao Huangyi | 200,065,400.00 | 149,089,445.94 | 28,259,956.65 | 177,345,748.65 | 3,653.94 | 95.16% | 100.00% | Other |
| Brewing Ecological Park | ||||||||||||
| Technical renovation project of Luzhou Laojiao intelligent brewing (I) | 4,782,509,000.00 | 583,300,245.67 | 571,016,183.32 | 12,284,062.35 | 12.20% | 1.00% | Other | |||||
| Total | 7,538,071,961.00 | 1,014,138,430.41 | 951,051,601.64 | 739,432,017.93 | 574,675,102.61 | 651,082,911.511 | 150,769.29 | 150,769.29 | 3.59% |
Note: 1. Other decreases refer to land use rights, software and low priced and easily worn articlestransferred to intangible assets.
7.14. Right-of-use assets
Monetary Unit: CNY
| Item | Land use right | Buildings and constructions | Total |
| I. Original cost | |||
| 1. Opening Balance | 32,680,786.33 | 32,890,490.67 | 65,571,277.00 |
| 2. Increase in current period | 4,759,660.94 | 4,759,660.94 | |
| (1) Lease in | 3,237,563.67 | 3,237,563.67 | |
| (2) Changes of exchange rates | 1,522,097.27 | 1,522,097.27 | |
| 3. Decrease in current period | 12,753,514.58 | 12,753,514.58 | |
| (1) Adjustment for change of lease term | 12,753,514.58 | 12,753,514.58 | |
| 4. Closing Balance | 32,680,786.33 | 24,896,637.03 | 57,577,423.36 |
| II. Accumulated amortization | |||
| 1. Opening Balance | 3,634,912.70 | 9,221,554.26 | 12,856,466.96 |
| 2. Increase in current period | 3,634,912.70 | 11,832,498.22 | 15,467,410.92 |
| (1) Provision | 3,634,912.70 | 11,003,664.32 | 14,638,577.02 |
| (2) Changes of exchange rates | 828,833.90 | 828,833.90 | |
| 3. Decrease in current period | 10,698,980.15 | 10,698,980.15 | |
| (1) Disposal | |||
| (1) Adjustment for change | 10,698,980.15 | 10,698,980.15 |
| of lease term | |||
| 4. Closing Balance | 7,269,825.40 | 10,355,072.33 | 17,624,897.73 |
| III. Provision for impairment | |||
| 1. Opening Balance | |||
| 2. Increase in current period | |||
| (1) Provision | |||
| 3. Decrease in current period | |||
| (1) Disposal | |||
| 4. Closing Balance | |||
| IV. Book Value | |||
| 1. Closing Book Value | 25,410,960.93 | 14,541,564.70 | 39,952,525.63 |
| 2. Opening Book Value | 29,045,873.63 | 23,668,936.41 | 52,714,810.04 |
7.15. Intangible assets
7.15.1. Details of intangible assets
Monetary Unit: CNY
| Item | Land use right | Patent right | No-patent right technology | Computer software | Trademark right | Total |
| I. Original cost | ||||||
| 1. Opening Balance | 2,744,202,317.34 | 1,700,050.44 | 60,715,751.05 | 1,890,746.08 | 2,808,508,864.91 | |
| 2. Increase in current period | 589,960,901.10 | 2,620,476.67 | 224,168.74 | 592,805,546.51 | ||
| (1) Acquired | 6,754,009.86 | 2,545,221.23 | 224,168.74 | 9,523,399.83 | ||
| (2) Internal developed | ||||||
| (3) Business combination | ||||||
| (4) Transferred from construction in progress | 582,258,391.12 | 75,255.44 | 582,333,646.56 | |||
| (5) Adjustment for completion settlement | 948,500.12 | 948,500.12 | ||||
| 3. Decrease in current period | 46,020,547.15 | 46,020,547.15 | ||||
| (1) Disposal | 36,454,066.94 | 36,454,066.94 | ||||
| (2) Transfer to investment property | 9,566,480.21 | 9,566,480.21 | ||||
| 4. Closing Balance | 3,288,142,671.29 | 1,700,050.44 | 63,336,227.72 | 2,114,914.82 | 3,355,293,864.27 | |
| II. Accumulated |
| amortization | ||||||
| 1. Opening Balance | 171,347,186.40 | 700,604.04 | 28,303,256.02 | 1,798,629.73 | 202,149,676.19 | |
| 2. Increase in current period | 76,292,727.98 | 130,005.05 | 4,104,831.25 | 76,477.68 | 80,604,041.96 | |
| (1) Provision | 76,292,727.98 | 130,005.05 | 4,104,831.25 | 76,477.68 | 80,604,041.96 | |
| 3. Decrease in current period | 10,731,706.67 | 10,731,706.67 | ||||
| (1) Disposal | 8,118,193.45 | 8,118,193.45 | ||||
| (2) Transfer to investment property | 2,613,513.22 | 2,613,513.22 | ||||
| 4. Closing Balance | 236,908,207.71 | 830,609.09 | 32,408,087.27 | 1,875,107.41 | 272,022,011.48 | |
| III. Provision for impairment | ||||||
| 1. Opening Balance | ||||||
| 2. Increase in current period | ||||||
| (1) Provision | ||||||
| 3. Decrease in current period | ||||||
| (1) Disposal | ||||||
| 4. Closing Balance | ||||||
| IV. Book Value | ||||||
| 1. Closing Book Value | 3,051,234,463.58 | 869,441.35 | 30,928,140.45 | 239,807.41 | 3,083,271,852.79 | |
| 2. Opening Book Value | 2,572,855,130.94 | 999,446.40 | 32,412,495.03 | 92,116.35 | 2,606,359,188.72 |
There is no proportion of intangible assets formed by internal development to the balance of intangibleassets at the period-end.
7.16. Long-term deferred expense
Monetary Unit: CNY
| Item | Opening Balance | Increase | Amortization | Other decrease | Closing Balance |
| Improvement expense of rented fixed assets | 1,463,869.21 | 116,406.94 | 872,334.97 | -2,069.74 | 710,010.92 |
| Total | 1,463,869.21 | 116,406.94 | 872,334.97 | -2,069.741 | 710,010.92 |
Note: 1 Other decrease was generated from changes of exchange rates.
7.17. Deferred tax assets/ deferred tax liabilities
7.17.1. Deferred tax assets before offset
Monetary Unit: CNY
| Item | Closing Balance | Opening Balance | ||
| Deductible temporary differences | Deferred tax assets | Deductible temporary differences | Deferred tax assets | |
| Provision for asset impairment | 128,012,783.36 | 31,895,371.12 | 127,059,130.30 | 31,755,535.22 |
| Unrealized profits from internal transactions | 2,839,779,249.07 | 709,944,812.27 | 3,161,541,177.98 | 790,385,294.49 |
| Deductible losses | 9,551,262.70 | 2,312,572.68 | 5,716,197.58 | 1,429,049.40 |
| Impact from salary | 630,936,117.63 | 155,191,186.34 | 591,456,408.66 | 145,429,434.14 |
| Impact from deferred earnings | 33,704,323.80 | 8,426,080.95 | 28,531,014.28 | 7,132,753.57 |
| Impact from fixed assets depreciation | 227,859.62 | 37,596.84 | 529,787.16 | 96,441.51 |
| Recognition costs of restricted shares for equity incentive in the vesting period | 367,875,588.321 | 89,288,197.09 | 34,895,071.18 | 8,446,243.50 |
| Impact from fair value changes of other equity instrument investment | 5,752,926.37 | 1,438,231.59 | 5,752,926.37 | 1,438,231.59 |
| Impact of income tax from fair value changes of held-for-trading financial assets | 26,533,219.63 | 6,633,304.92 | ||
| Total | 4,042,373,330.50 | 1,005,167,353.80 | 3,955,481,713.51 | 986,112,983.42 |
Note: 1. Deductible temporary differences of CNY 367,875,588.32 of costs and expenses recognizedduring the vesting period of restricted shares for share incentives represent the estimated future pre-taxdeductible amounts based on the Company's share price less the grant price at the end of the period.
7.17.2. Deferred tax liabilities before offset
Monetary Unit: CNY
| Item | Closing Balance | Opening Balance | ||
| Taxable temporary differences | Deferred tax liabilities | Taxable temporary differences | Deferred tax liabilities | |
| Fair value changes of other equity instrument investment | 495,124,314.68 | 123,781,078.67 | 263,959,837.80 | 65,989,959.48 |
| Fair value changes of held-for-trading financial assets | 6,352,241.79 | 1,588,060.45 | ||
| Impact from the policy of one-time pre-tax deduction of | 172,516,000.07 | 42,262,585.21 | ||
| fixed assets | ||||
| Total | 667,640,314.75 | 166,043,663.88 | 270,312,079.59 | 67,578,019.93 |
7.17.3. Details of unrecognized deferred tax assets
Monetary Unit: CNY
| Item | Closing Balance | Opening Balance |
| Deductible losses | 72,503,754.75 | 201,219,210.53 |
| Credit impairment losses and Asset impairment losses | 65.28 | |
| Impact from employee benefits payable | 2,369,328.86 | 139,023.54 |
| Total | 74,873,148.89 | 201,358,234.07 |
7.17.4. Deductible losses from unrecognized deferred tax assets will due on the following years
Monetary Unit: CNY
| Year | Closing Amount | Opening Amount | Notes |
| The 1st year | 6,496,423.50 | ||
| The 2nd year | 14,491,365.44 | 6,713,657.39 | |
| The 3rd year | 21,651,366.58 | 14,491,365.44 | |
| The 4th year | 11,572,224.60 | 108,989,982.02 | |
| The 5th year | 18,292,374.63 | 71,024,205.68 | |
| Total | 72,503,754.75 | 201,219,210.53 |
7.18. Other non-current assets
Monetary Unit: CNY
| Item | Closing Balance | Opening Balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
| Prepaid equipment and land expense | 196,095,702.09 | 196,095,702.091 | 650,384,435.70 | 650,384,435.70 | ||
| Total | 196,095,702.09 | 196,095,702.09 | 650,384,435.70 | 650,384,435.70 | ||
Note: 1. At the end of the period, it decreased by CNY 454,288,733.61, down 69.85%, which wasmainly due to the impact of the completion and transfer to fixed assets of construction in progress andthe settlement of project device prepayment of Brewing Company as the Company's subsidiary.
7.19. Accounts payable
7.19.1. Presentation of accounts payable
Monetary Unit: CNY
| Category | Closing Balance | Opening Balance |
| Materials and service expense | 1,042,394,395.05 | 1,171,595,976.46 |
| Engineering equipment expense | 1,269,271,189.99 | 1,248,758,493.07 |
| Total | 2,311,665,585.04 | 2,420,354,469.53 |
7.19.2. Significant accounts payable whose aging is longer than 1 year
Monetary Unit: CNY
| Category | Closing Balance | Reason for not payment or carrying forward |
| China Construction First Group Corporation Limited | 257,461,125.73 | Within the contract settlement period |
| Total | 257,461,125.73 |
7.20. Contract liabilities
Monetary Unit: CNY
| Category | Closing Balance | Opening Balance |
| Within 1 year | 2,540,635,630.98 | 3,484,385,115.64 |
| 1-2 years | 10,654,577.66 | 4,042,470.18 |
| 2-3 years | 1,199,843.23 | 1,569,941.86 |
| Over 3 years | 13,884,666.89 | 20,113,173.57 |
| Total | 2,566,374,718.761 | 3,510,110,701.25 |
Note: 1. There is no significant contract liability whose aging is longer than 1 year.
7.21. Employee benefits payable
7.21.1. Employee benefits payable shown as follows
Monetary Unit: CNY
| Item | Opening Balance | Increase in current period | Decrease in current period | Closing Balance |
| 1. Short-term benefits | 611,190,565.92 | 1,061,312,546.58 | 1,016,890,980.76 | 655,612,131.74 |
| 2. Post-employment benefits- defined contribution plans | 36,904,203.51 | 122,740,481.69 | 140,230,903.16 | 19,413,782.04 |
| 3. Termination benefits | 8,971.53 | 268,397.42 | 268,397.42 | 8,971.53 |
| Total | 648,103,740.96 | 1,184,321,425.69 | 1,157,390,281.34 | 675,034,885.31 |
7.21.2. Short-term employee benefits payable shown as follows
Monetary Unit: CNY
| Item | Opening Balance | Increase in current period | Decrease in current period | Closing Balance |
| 1. Wages, bonuses, allowances and grants | 549,316,255.45 | 901,369,990.30 | 838,840,852.30 | 611,845,393.45 |
| 2. Employees’ welfare | 19,745,831.50 | 19,745,831.50 |
| 3. Social insurance premiums | 5,366,001.71 | 61,808,037.97 | 65,136,740.21 | 2,037,299.47 |
| Work-related injury insurance | 1,409,665.57 | 1,615,456.21 | 2,514,871.07 | 510,250.71 |
| Medical and maternity insurance premium | 3,956,336.14 | 60,192,581.76 | 62,621,869.14 | 1,527,048.76 |
| 4. Housing funds | 9,230,529.23 | 58,371,693.30 | 65,513,976.94 | 2,088,245.59 |
| 5. Labor union expenditures and employee education funds | 47,277,779.53 | 20,016,993.51 | 27,653,579.81 | 39,641,193.23 |
| Total | 611,190,565.92 | 1,061,312,546.58 | 1,016,890,980.76 | 655,612,131.74 |
7.21.3. Defined contribution plan shown as follows
Monetary Unit: CNY
| Item | Opening Balance | Increase in current period | Decrease in current period | Closing Balance |
| 1. Basic endowment insurance premium | 17,650,834.85 | 87,225,437.36 | 86,514,493.25 | 18,361,778.96 |
| 2. Unemployment insurance premium | 5,993,266.59 | 559,321.55 | 6,225,768.28 | 326,819.86 |
| 3. Enterprise annuity | 13,260,102.07 | 34,955,722.78 | 47,490,641.63 | 725,183.22 |
| Total | 36,904,203.51 | 122,740,481.69 | 140,230,903.16 | 19,413,782.04 |
7.22. Taxes payable
Monetary Unit: CNY
| Item | Closing Balance | Opening Balance |
| Value-added tax | 502,641,326.22 | 421,216,223.94 |
| Consumption tax | 1,386,271,621.60 | 1,263,440,836.05 |
| Enterprise income tax | 1,345,243,541.07 | 1,327,750,786.20 |
| Individual income tax | 10,295,445.63 | 10,467,970.24 |
| Urban maintenance and construction tax | 131,841,222.44 | 82,437,545.17 |
| Education surcharge | 56,445,651.96 | 35,234,596.27 |
| Local education surcharge | 37,733,654.17 | 23,651,376.27 |
| Stamp duty | 9,937,931.91 | 8,490,523.62 |
| Land use tax | 437,618.74 | 437,619.35 |
| Others | 302,715.24 | 352,150.68 |
| Total | 3,481,150,728.98 | 3,173,479,627.79 |
7.23. Other payables
Monetary Unit: CNY
| Item | Closing Balance | Opening Balance |
| Dividend payable | 16,594,850.58 | |
| Other payables | 1,185,814,427.911 | 652,393,292.60 |
| Total | 1,202,409,278.49 | 652,393,292.60 |
Note: 1. Other payables listed in the above table are other payables minus interest payable anddividend payable.
2. At the end of the period, the closing balance of other payables increased by CNY 533,421,135.31, up
81.76% compared with the opening balance, which was mainly due to the impact of liabilities of CNY639,021,998.78 recognized for repurchase obligations under the restricted share incentive plan.
7.23.1. Dividend payable
Monetary Unit: CNY
| Item | Closing Balance | Opening Balance |
| Ordinary share dividends | 16,594,850.581 | |
| Total | 16,594,850.58 |
Note: 1. The closing balance refer to the dividends distributed but not yet paid to minority shareholdersof the Company’s subsidiary Boda Marketing Company.
7.23.2. Other payables
7.23.2.1. Categories by nature
Monetary Unit: CNY
| Item | Closing Balance | Opening Balance |
| Security deposit | 527,881,969.37 | 628,174,772.12 |
| Intercourse funds | 10,226,769.10 | 17,757,284.78 |
| Repurchase obligations of restricted shares | 639,021,998.78 | |
| Others | 8,683,690.66 | 6,461,235.70 |
| Total | 1,185,814,427.91 | 652,393,292.60 |
7.23.2.2. Significant other payables whose aging are longer than 1 yearOther statements:
Other payables whose aging are longer than 1 year are mainly security deposits collected from dealers.
7.24. Non-current liabilities due within one year
Monetary Unit: CNY
| Item | Closing Balance | Opening Balance |
| Long-term loans due within one year | 20,400,000.00 | |
| Lease liabilities due within one year | 14,530,370.36 | 13,983,036.95 |
| Interest of long-term loans due within one year | 1,984,027.78 | |
| Interest of bonds payable due within one year | 44,965,068.49 | 72,219,178.08 |
| Total | 81,879,466.63 | 86,202,215.03 |
7.25. Other current liabilities
Monetary Unit: CNY
| Item | Closing Balance | Opening Balance |
| Output VAT to be transferred | 333,627,225.47 | 456,314,391.17 |
| Total | 333,627,225.47 | 456,314,391.17 |
7.26. Long-term loans
7.26.1. Long-term loans
Monetary Unit: CNY
| Item | Closing Balance | Opening Balance |
| Credit loans | 3,200,000,000.00 | |
| Less: Long-term loans due within one year | -20,400,000.00 | |
| Total | 3,179,600,000.00 |
7.27. Bonds payable
7.27.1. Bonds payable
Monetary Unit: CNY
| Item | Closing Balance | Opening Balance |
| Corporate bonds in 2019 (Phase I) | 2,494,539,629.08 | |
| Corporate bonds in 2020 (Phase I) | 1,497,461,348.61 | 1,496,246,113.15 |
| Corporate bonds in 2022 (Phase I) | 1,498,638,223.25 | |
| Total | 2,996,099,571.86 | 3,990,785,742.23 |
7.27.2. Increase/decrease of bonds payable (excluding other financial instrument classified asfinancial liabilities such as preferred shares and perpetual bonds)
Monetary Unit: CNY
| Bond name | Par value | Issuing date | Duration | Issuing amount | Opening Balance | Issued in the current period | Withdrawal of interest by par value | Amortization of premium and depreciation | Repayment in the reporting period | Closing Balance |
| Corporate bonds in 2019 (Phase I) | 2,500,000,000.00 | 27 August 2019 | 3+2 | 2,490,000,000.00 | 2,494,539,629.08 | 58,849,315.07 | 5,460,370.92 | 2,500,000,000.00 | ||
| Corporate bonds in 2020 (Phase | 1,500,000,000.00 | 16 March 2020 | 5 | 1,494,000,000.00 | 1,496,246,113.15 | 52,500,000.00 | 1,215,235.46 | 1,497,461,348.61 |
| I) | ||||||||||
| Corporate bonds in 2022 (Phase I) | 1,500,000,000.00 | 2 December 2022 | 3 | 1,498,800,000.00 | 1,498,800,000.00 | 3,562,500.00 | -161,776.75 | 1,498,638,223.25 | ||
| Total | —— | 5,482,800,000.00 | 3,990,785,742.23 | 1,498,800,000.00 | 114,911,815.07 | 6,513,829.63 | 2,500,000,000.00 | 2,996,099,571.86 | ||
7.28. Lease liabilities
Monetary Unit: CNY
| Item | Closing Balance | Opening Balance |
| Lease payment | 48,776,000.46 | 61,305,700.55 |
| Less: unrecognized financing cost | -5,148,660.44 | -6,654,995.52 |
| Lease liabilities due within one year | -14,530,370.36 | -13,983,036.95 |
| Total | 29,096,969.66 | 40,667,668.08 |
7.29. Deferred income
Monetary Unit: CNY
| Item | Opening Balance | Increase in current period | Decrease in current period | Closing Balance | Reason |
| Government grants | 28,531,014.28 | 11,800,000.00 | 6,626,690.48 | 33,704,323.80 | Reception of financial allocation |
| Total | 28,531,014.28 | 11,800,000.00 | 6,626,690.48 | 33,704,323.80 | -- |
Details:
Monetary 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 | Related to assets/ income |
| New mode application project of digital workshop for solid state baijiu production | 6,070,300.00 | 1,386,000.00 | 4,684,300.00 | Related to assets | ||||
| Construction project of spirit room of Luzhou Laojiao brewing | 5,950,000.00 | 1,400,000.00 | 4,550,000.00 | Related to assets |
| technical renovation | ||||||||
| Luzhou Laojiao automatic wine production line technical renovation project | 425,000.00 | 830,000.00 | 119,761.90 | 1,135,238.10 | Related to assets | |||
| Boiler reconstruction project of Luohan Brewing Base of Luzhou Laojiao | 7,585,714.28 | 1,264,285.72 | 6,321,428.56 | Related to assets | ||||
| Brewing wastewater treatment project | 8,500,000.00 | 5,000,000.00 | 2,357,142.86 | 11,142,857.14 | Related to assets | |||
| Improvement and technical renovation project of Luzhou Laojiao production supporting | 5,970,000.00 | 99,500.00 | 5,870,500.00 | Related to assets |
7.30. Share capital
Monetary Unit: CNY
| Opening Balance | Increases/decreases in the current period (+, -) | Closing Balance | |||||
| Issuance of new shares | Bonds share | Conversion of reserves funds into shares | Others | Subtotal | |||
| Total number of shares | 1,464,752,476.00 | 7,142,624.00 | 7,142,624.001 | 1,471,895,100.00 | |||
Note: 1. In February 2022, the registration of 6,862,600 shares of the Restricted Share Incentive Plangranted by the Company for the first time were completed; in September 2022, the Company granted342,334 shares of the Restricted Share Incentive Plan for the second time; in September 2022, withseven awardees no longer eligible, the Company decided to repurchase and retire the 62,310 restrictedshares of them which had been granted but not lifted from restricted sales; so far, the above grant andrepurchase of the Restricted Share Incentive Plan had all been registered and the total shares of the
Company changed to 1,471,895,100 shares.
7.31. Capital reserves
Monetary Unit: CNY
| Item | Opening Balance | Increase in current period | Decrease in current period | Closing Balance |
| Share premium (capital premium) | 3,542,967,507.48 | 659,653,965.64 | 5,512,316.46 | 4,197,109,156.66 |
| Other capital reserves | 212,387,158.25 | 390,658,154.08 | 603,045,312.33 | |
| Total | 3,755,354,665.73 | 1,050,312,119.72 | 5,512,316.46 | 4,800,154,468.99 |
Other statements, including increase/decrease and reasons thereof:
Note 1: The increase and decrease of capital premium of the period is the premium payment receivedand paid for the grant and repurchase of restricted shares.Note 2: The increase in other capital reserves for the period was mainly due to the impact of theincome tax of the costs and expenses to be recognized in the period for the issuance of restrictedshares and the expected pre-tax deductible amount in future periods in excess of the recognizedcosts and expenses.
7.32. Treasury shares
Monetary Unit: CNY
| Item | Opening Balance | Increase in current period | Decrease in current period | Closing Balance |
| Perform the repurchase obligations under the equity incentive | 666,858,899.64 | 27,836,900.86 | 639,021,998.78 | |
| Total | 666,858,899.64 | 27,836,900.86 | 639,021,998.78 |
Other statements, including notes to increase and decrease during the reporting period and thereasons for changes:
Note: The Company recognized restricted shares repurchase obligations in the current period, raisingthe treasury stock by CNY 666,858,899.64; the Company repurchased and retired restricted shares inthe current period, declining the treasury stock by CNY 5,574,626.46; and the treasury stock wasdown by CNY 22,262,274.40 due to the expected cash dividend of unlockable restricted shares.
7.33. Other comprehensive income
Monetary Unit: CNY
| Item | Opening Balance | Current Period | Closing Balance | |||||
| Amount in current period before income tax | Less: Previously recognized in other comprehensive income transferred to profit | Less: Previously recognized in other comprehensive income transferred to | Less: Income tax | Amount attribute to parent company after tax | Amount attribute to non-controlling shareholders after tax | |||
| and loss | retained earnings | |||||||
| I. Other comprehensive income that will not be reclassified into profit and loss | 193,605,183.54 | 173,373,357.69 | 173,373,357.69 | 366,978,541.23 | ||||
| Fair value changes of other equity instrument investment | 193,605,183.54 | 173,373,357.69 | 173,373,357.69 | 366,978,541.23 | ||||
| II. Other comprehensive income that will be reclassified into profit and loss | -26,078,031.22 | -8,308,184.27 | -10,149,264.17 | 1,841,079.90 | -36,227,295.39 | |||
| Including: Other comprehensive income that will be reclassified into profit and loss under equity method | -26,382,364.46 | -12,402,376.19 | -12,402,376.19 | -38,784,740.65 | ||||
| Difference from conversion of financial statements in foreign currency | 304,333.24 | 4,094,191.92 | 2,253,112.02 | 1,841,079.90 | 2,557,445.26 | |||
| Total | 167,527,152.32 | 165,065,173.42 | 163,224,093.52 | 1,841,079.90 | 330,751,245.84 |
7.34. Surplus reserves
Monetary Unit: CNY
| Item | Opening Balance | Increase in current period | Decrease in current period | Closing Balance |
| Statutory surplus reserves | 1,464,752,476.00 | 7,142,624.00 | 1,471,895,100.00 | |
| Total | 1,464,752,476.00 | 7,142,624.00 | 1,471,895,100.00 |
7.35. Undistributed profits
Monetary Unit: CNY
| Item | Current Period | Previous Period |
| Undistributed profit before adjustment at the end of the last year | 21,187,860,235.89 | 16,236,513,212.43 |
| Undistributed profit after adjustment at the beginning of year | 21,187,860,235.89 | 16,236,513,212.43 |
| Plus: Net profit attributable to owners of the parent company for the current period | 10,365,383,281.80 | 7,955,554,351.73 |
| Less: Provision of statutory surplus reserves | 7,142,624.00 | |
| Ordinary share dividends payable | 4,773,919,306.55 | 3,004,207,328.27 |
| Plus: Other transfer in | 15,626.841 | |
| Undistributed profits at the end of the period | 26,772,197,213.98 | 21,187,860,235.89 |
Note: 1. Other transfers were the investment of the disposal of other equity instruments of TourismCompany as the subsidiary of the Company in the current period, which was due to the impact oftransfers to retained earnings of relevant changes in fair value.
7.36. Operating revenue and cost of sales
Monetary Unit: CNY
| Item | Current Period | Previous Period | ||
| Revenue | Cost of sales | Revenue | Cost of sales | |
| Primary business | 24,766,121,998.49 | 3,214,253,716.91 | 20,415,170,469.09 | 2,885,685,151.63 |
| Other business | 357,441,273.13 | 155,274,677.11 | 227,091,255.28 | 66,746,336.68 |
| Total | 25,123,563,271.62 | 3,369,528,394.02 | 20,642,261,724.37 | 2,952,431,488.31 |
Whether the lower of the net profit before and after deduction of non-recurring gains and losses throughaudit is negative
□Yes ? No
Details:
Monetary Unit: CNY
| Contract category | Liquor sales | Total |
| Commodity type | ||
| Including: | ||
| Medium and high grade liquor | 22,132,546,058.64 | 22,132,546,058.64 |
| Other liquor | 2,633,575,939.85 | 2,633,575,939.85 |
| By operating segment | ||
| Including: | ||
| Domestic | 24,613,436,212.24 | 24,613,436,212.24 |
| Outbound | 152,685,786.25 | 152,685,786.25 |
| Market or customer type |
| Including: | ||
| Contract type | ||
| Including: | ||
| Commodity sales contract | 24,766,121,998.49 | 24,766,121,998.49 |
| By commodity transfer time | ||
| Including: | ||
| By contract term | ||
| Including: | ||
| By sales channel | ||
| Including: | ||
| Total | 24,766,121,998.49 | 24,766,121,998.49 |
7.37. Business taxes and surcharges
Monetary Unit: CNY
| Item | Current Period | Previous Period |
| Consumption tax | 2,753,367,764.57 | 2,251,935,882.19 |
| Urban maintenance and construction tax | 370,928,389.23 | 286,067,925.02 |
| Educational surcharge | 158,966,546.28 | 122,600,539.31 |
| Property tax | 75,661,405.90 | 74,979,375.32 |
| Land use tax | 35,777,691.90 | 30,117,077.49 |
| Stamp duty | 23,111,385.94 | 17,354,822.83 |
| Local education surcharge | 105,978,159.07 | 81,733,692.89 |
| Others | 156,944.59 | 112,227.80 |
| Total | 3,523,948,287.48 | 2,864,901,542.85 |
7.38. Selling and distribution expenses
Monetary Unit: CNY
| Item | Current Period | Previous Period |
| Advertising promotion expense | 1,880,179,769.91 | 1,769,053,962.56 |
| Promotion expense | 712,641,702.96 | 1,139,273,684.38 |
| Employee compensation | 355,699,286.88 | 357,659,249.63 |
| Storage and logistics costs | 138,589,417.94 | 100,059,219.52 |
| Others | 361,660,868.33 | 233,165,488.47 |
| Total | 3,448,771,046.02 | 3,599,211,604.56 |
7.39. General and administrative expenses
Monetary Unit: CNY
| Item | Current Period | Previous Period |
| Employee compensation | 467,979,805.98 | 540,848,428.46 |
| Depreciation and amortization | 132,084,757.27 | 128,396,634.90 |
| Management fee and service expense | 115,361,022.69 | 73,918,283.32 |
| Others | 446,996,671.29 | 312,953,021.17 |
| Total | 1,162,422,257.23 | 1,056,116,367.85 |
7.40. Research and development expenses
Monetary Unit: CNY
| Item | Current Period | Previous Period |
| Comprehensive research and development expenses | 206,248,486.571 | 137,712,329.78 |
| Total | 206,248,486.57 | 137,712,329.78 |
Note: 1. The current period increased CNY 68,536,156.79 compared with previous period with anincrease by 49.77%, mainly due to increase in research and development projects.
7.41. Financial expenses
Monetary Unit: CNY
| Item | Current Period | Previous Period |
| Interest expenses | 229,673,136.36 | 195,125,786.35 |
| Less: Interest income | 505,746,664.32 | 419,897,541.04 |
| Losses from currency exchange | -16,072,149.45 | 3,646,806.44 |
| Handling charges | 4,070,627.61 | 2,280,061.14 |
| Amortization of unrecognized financing costs | 1,698,122.32 | 1,958,887.90 |
| Total | -286,376,927.481 | -216,885,999.21 |
Note: The current period decreased CNY 69,490,928.27 compared with previous period with adecrease by 32.04%, mainly due to increase in interest income of capital.
7.42. Other income
Monetary Unit: CNY
| Item | Current Period | Previous Period |
| Government grants | 34,931,161.52 | 50,986,059.68 |
| Individual income tax commission refund | 1,593,155.57 | 1,333,171.71 |
7.43. Investment income
Monetary Unit: CNY
| Item | Current Period | Previous Period |
| Investment income from long-term equity investments under the equity method | 84,626,608.53 | 195,543,058.40 |
| Investment income gained during the | 6,813,617.83 |
| period of holding held-for-trading financial assets | ||
| Investment income from disposal of held-for-trading financial assets | 9,438,465.78 | |
| Dividend income gained during the period of holding other equity instrument investment | 8,078,717.93 | 6,662,660.52 |
| Investment income from early redemption of bonds | -4,241,494.76 | |
| Total | 104,715,915.31 | 202,205,718.92 |
Other statements:
Note: There is no major restriction on the repatriation of the Company's investment income.
Including: investment income from long-term equity investments under the equity method:
| Item | Current Period | Previous Period |
| Huaxi Securities Co., Ltd. | 43,897,917.31 | 169,638,351.75 |
| Luzhou Laojiao Postdoctoral Workstation Technology Innovation Co., Ltd. | 185,894.77 | |
| Sichuan Development Wine Investment Co., Ltd. | 162,805.88 | -1,127,623.31 |
| Sichuan Tongniang Baijiu Industry Technology Research Institute Co., Ltd. | 199,394.39 | -122,437.28 |
| CTS Luzhou Laojiao Cultural Tourism Development Co., Ltd. | 40,180,596.18 | 27,154,767.24 |
| Subtotal | 84,626,608.53 | 195,543,058.40 |
Including: dividend income gained during the period of holding other equity instrument investment:
| Item | Current Period | Previous Period |
| North Chemical Industries Co., Ltd. | 70,359.97 | 62,542.20 |
| Guotai Junan Securities Co., Ltd. | 8,008,357.96 | 6,595,118.32 |
| Luzhou Zunchi Automobile Service Co., Ltd. | 5,000.00 | |
| Subtotal | 8,078,717.93 | 6,662,660.52 |
7.44. Gain on changes in fair value
Monetary Unit: CNY
| Item | Current Period | Previous Period |
| Held-for-trading financial assets | -12,023,622.50 | 6,352,241.79 |
| Total | -12,023,622.50 | 6,352,241.79 |
7.45. Credit impairment loss
Monetary Unit: CNY
| Item | Current Period | Previous Period |
| Bad debt loss of other receivables | -924,947.31 | 81,132,441.19 |
| Bad debt loss of accounts receivable | -240,771.03 | -6,326.31 |
| Total | -1,165,718.34 | 81,126,114.88 |
7.46. Gains from disposal of assets
Monetary Unit: CNY
| Item | Current Period | Previous Period |
| Gains from disposal of non-current assets | 19,805,093.70 | -347,429.88 |
| Including: Gains from disposal of fixed assets | 24,600.37 | -347,429.88 |
| Gains from disposal of intangible assets | 19,786,813.38 | |
| Gains from disposal of use right assets | -6,320.05 |
7.47. Non-operating income
Monetary Unit: CNY
| Item | Current Period | Previous Period | The amount included in the extraordinary gains and losses of the current period |
| Government grants | 770,893.47 | ||
| Others | 8,326,631.57 | 6,916,063.05 | 8,326,631.57 |
| Compensation for default | 19,506,788.74 | 19,559,751.36 | 19,506,788.74 |
| Total | 27,833,420.31 | 27,246,707.88 | 27,833,420.31 |
7.48. Non-operating costs
Monetary Unit: CNY
| Item | Current Period | Previous Period | The amount included in the extraordinary gains and losses of the current period |
| Donation | 8,710,000.00 | 60,835,600.00 | 8,710,000.00 |
| Losses from damage retirement of non-current assets | 10,778,148.07 | 806,635.52 | 10,778,148.07 |
| Others | 471,344.99 | 5,075,251.57 | 471,344.99 |
| Total | 19,959,493.06 | 66,717,487.09 | 19,959,493.06 |
7.49. Income tax expense
7.49.1. Statement of income tax expense
Monetary Unit: CNY
| Item | Current Period | Previous Period |
| Current period income tax | 3,422,712,211.76 | 2,872,508,387.20 |
| Deferred income tax | 21,450,324.10 | -258,811,286.01 |
| Total | 3,444,162,535.861 | 2,613,697,101.19 |
Note: 1. The current period increased CNY 830,465,434.67 compared with previous period with anincrease by 31.77%, mainly due to the increase in corporate income tax with the increase in profits.
2. Details of income tax rates were shown on “6. Taxes”.
7.49.2. Adjustment for accounting profit and income tax expense
Monetary Unit: CNY
| Item | Current Period |
| Total profit | 13,854,751,640.29 |
| Income tax expenses determined by statutory/applicable tax rate | 3,463,687,910.07 |
| Impact from subsidiaries’ different tax rates | -2,160,306.98 |
| Impact from adjust for impact from income tax expense in previous period | 704,999.35 |
| Impact from non-taxable income | -13,330,549.27 |
| Impact from non-deductible costs, expenses and losses | 5,127,246.40 |
| Impact from deductible loss of unrecognized deferred income tax assets in prior period | -21,129,993.66 |
| Impact from deductible temporary difference or losses due to unrecognized deferred tax asset in current period | 4,606,437.70 |
| Income tax impact of expected pre-tax deductible amounts of restricted shares in future periods that are less than the recognized cost and expenses | 6,656,792.25 |
| Income tax expense | 3,444,162,535.86 |
7.50. Other comprehensive income
Details in Note 7.33. Other comprehensive income.
7.51. Notes to the statement of cash flow
7.51.1. Cash received from other operation activities
Monetary Unit: CNY
| Item | Current Period | Previous Period |
| Recovery of saving deposits involving contract disputes | 3,327,415.45 | 152,667,999.25 |
| Government grants | 40,104,471.04 | 50,548,967.43 |
| Interest income from bank deposit | 582,623,274.18 | 376,116,197.20 |
| Others | 242,137,090.66 | 390,669,424.61 |
| Total | 868,192,251.33 | 970,002,588.49 |
7.51.2. Cash paid for other operating activities
Monetary Unit: CNY
| Item | Current Period | Previous Period |
| Cash paid for expenses | 2,987,783,797.32 | 3,304,969,529.27 |
| Restricted court frozen funds paid | 1,181,683.24 | |
| Total | 2,988,965,480.56 | 3,304,969,529.27 |
7.51.3. Cash received from other financing activities
Monetary Unit: CNY
| Item | Current Period | Previous Period |
| Cash deposits received for L/G | 509,017.10 | |
| Cash deposits received for travel | 1,400,000.00 | |
| Total | 1,909,017.10 |
7.51.4. Cash paid for other financing activities
Monetary Unit: CNY
| Item | Current Period | Previous Period |
| Cash paid for reducing registered capital | 5,574,626.46 | |
| Rating and registration fee for issuing bonds | 1,394,339.62 | |
| Net losses from early redemption of bonds | 117,924.53 | |
| Cash paid for rent of right-of-use assets | 14,508,022.38 | 11,862,090.12 |
| Cash deposits paid for L/G | 10,509,017.10 | |
| Total | 21,594,912.99 | 22,371,107.22 |
7.52. Supplementary information to statement of cash flow
7.52.1. Supplementary information to statement of cash flow
Monetary Unit: CNY
| Item | Current Period | Previous Period |
| 1. Reconciliation of net profit to cash flow from operating activities: | ||
| Net profit | 10,410,589,104.43 | 7,937,262,386.93 |
| Plus: Provision for asset impairment | 1,165,718.34 | -81,126,114.88 |
| Depreciation of fixed asset, oil and gas assets and productive biological assets | 547,618,213.97 | 486,856,196.13 |
| Depreciation of right-of-use assets | 14,638,577.02 | 12,910,912.35 |
| Amortization of intangible assets | 80,604,041.96 | 64,178,235.56 |
| Amortization of long-term deferred expense | 872,334.97 | 842,033.00 |
| Losses from disposal of fixed assets, intangible assets and other long-term assets (Gains use “-”) | -19,805,093.70 | 347,429.88 |
| Losses from retirement of fixed assets (Gains use “-”) | 10,778,148.07 | 806,635.52 |
| Losses from change in fair value (Gains use “-”) | 12,023,622.50 | -6,352,241.79 |
| Financial expenses (Gains use “-”) | 114,617,073.40 | 128,173,454.89 |
| Losses on investments (Gains use “-”) | -104,715,915.31 | -202,205,718.92 |
| Decrease in deferred income tax assets (Increase uses “-”) | -19,224,200.66 | -260,399,346.46 |
| Increase in deferred income tax liabilities (Decrease uses “-”) | 40,674,524.76 | 1,588,060.45 |
| Decrease in inventories (Increase use “-”) | -2,563,169,208.05 | -2,581,909,735.55 |
| Decrease in operating receivables (Increase use “-”) | 279,234,000.55 | -1,483,346,245.17 |
| Increase in operating payables (Decrease use “-”) | -543,252,672.53 | 3,681,022,162.57 |
| Others | ||
| Net cash flows from operating activities | 8,262,648,269.72 | 7,698,648,104.51 |
| 2. Significant investing and financing activities not involving cash: | ||
| Conversion of debt into capital | ||
| Convertible corporate bonds due within one year | ||
| Fixed assets under financing lease | ||
| 3.Net change in cash and cash equivalents: | ||
| Closing balance of cash | 17,729,006,591.87 | 13,402,528,941.83 |
| Less: Opening balance of cash | 13,402,528,941.83 | 11,568,195,062.81 |
| Plus: Closing balance of cash equivalents | ||
| Less: Opening balance of cash equivalents | ||
| Net change in cash and cash equivalents | 4,326,477,650.04 | 1,834,333,879.02 |
7.52.2. Composition of cash and cash equivalent
Monetary Unit: CNY
| Item | Opening Balance | Closing Balance |
| 1. Cash | 17,729,006,591.87 | 13,402,528,941.83 |
| Including: Cash on hand | 28,711.93 | 26,281.86 |
| Unrestricted bank deposit | 17,711,121,431.52 | 13,391,713,104.08 |
| Other unrestricted cash and cash equivalents | 17,856,448.42 | 10,789,555.89 |
| 3. Closing balance of cash and cash equivalents | 17,729,006,591.87 | 13,402,528,941.83 |
| Including: Cash and cash equivalent with restriction to use of parent company and subsidiaries | 28,521,619.381 | 110,965,638.73 |
Note: 1. The cash and cash equivalent with restriction to use are CNY 28,521,619.38, of which, CNY10,000,000.00 is the bank cash deposits for L/G, CNY 17,339,936.14 is provision for fixed depositinterest on an accrual basis and CNY 1,181,683.24 is the frozen fund by the court.2: The amount of direct payment for goods and long-term assets (not involving cash flows) by theendorsement of bank acceptances receivable in the current and previous periods was CNY1,074,632,849.98 and CNY 80,496,017.45, respectively, which were not included in "cash receivedfrom sales of goods or rendering of services", "cash paid for goods and services" and "cash paid for thepurchase of fixed assets, intangible assets and other long-term assets" of the cash flow budget.
7.53. Assets with restricted ownership or use rights
Monetary Unit: CNY
| Item | Closing book balance | Reason for restriction |
| Cash and cash equivalents | 17,339,936.14 | Provision for fixed deposit interest on |
| an accrual basis | ||
| Cash and cash equivalents | 10,000,000.00 | Bank cash deposits for L/G |
| Cash and cash equivalents | 1,181,683.241 | Frozen fund by the court |
| Total | 28,521,619.38 |
Note: 1. According to the civil ruling issued by People's Court of Jiangyang District, Luzhou City,Sichuan Province, a total of CNY 516,806.00 bank deposits of Brewing Company, a subsidiary of theCompany, were frozen in accordance with laws for the case of contractual dispute. The first trial of therelevant case has been decided on 12 January 2023, based on which Brewing Company was notrequired to pay the relevant liabilities. 2 According to the civil ruling issued by People's Court ofDongchangfu District, Liaocheng City, Shandong Province, a total of CNY 664,877.24 bank deposits ofBoda Marketing Company, a subsidiary of the Company, were frozen in accordance with laws for thecase of contractual dispute. As of 31 December 2022, the case was not decided. Based on theexplanation issued by the third-party law firm, it was predicted that the probability of the rejection of theclaims of the plaintiff by People's Court was over 60%.
7.54. Foreign currency transactions
7.54.1. Foreign currency transactions
Monetary Unit: CNY
| Item | Closing Balance in Foreign Currency | Exchange Rate | Closing Balance in CNY |
| Cash at Bank and on Hand | |||
| Including: USD | 28,705,752.99 | 6.9646 | 199,924,087.27 |
| EUR | 189,276.07 | 7.4229 | 1,404,977.34 |
| HKD | 4,867,957.63 | 0.89327 | 4,348,400.51 |
| GBP | 140,099.22 | 8.3941 | 1,176,006.86 |
| AUD | 2,367.12 | 4.7138 | 11,158.13 |
| Accounts Receivable | |||
| Including: USD | 185,923.24 | 6.9646 | 1,294,881.00 |
| EUR | |||
| HKD | 4,982,129.53 | 0.89327 | 4,450,386.85 |
| Long-term Loans | |||
| Including: USD | |||
| EUR | |||
| HKD | |||
| Other Receivables | |||
| Including: HKD | 1,531,409.56 | 0.89327 | 1,367,962.22 |
| Accounts Payable | |||
| Including: USD | 305,139.48 | 6.9646 | 2,125,174.42 |
| HKD | 2,335,432.69 | 0.89327 | 2,086,171.96 |
| Other Payables | |||
| Including: USD | 185,610.39 | 6.9646 | 1,292,702.12 |
| HKD | 33,389,449.95 | 0.89327 | 29,825,793.96 |
| Non-current liabilities due within one year | |||
| Including: USD | 66,782.74 | 6.9646 | 465,115.07 |
| HKD | 4,375,620.00 | 0.89327 | 3,908,610.08 |
| Lease liabilities | |||
| Including: USD | 201,558.98 | 6.9646 | 1,403,777.67 |
| HKD | 647,342.20 | 0.89327 | 578,251.37 |
7.54.2. Description of the foreign business entity, including the important foreign businessentity, shall disclose its main foreign business place, bookkeeping standard currency andselection basis, and shall also disclose the reason for the change of the bookkeeping standardcurrency? Applicable □ N/A
| Company | Operation site | Bookkeeping currency | Choosing Reason |
| Luzhou Laojiao International Development (Hong Kong) Co., Ltd. | Hong Kong, China | HKD | Currency in the registration place |
| Luzhou Laojiao Commercial Development (North America) Co., Ltd. | USA | USD | Currency in the registration place |
| Mingjiang Co., Ltd. | USA | USD | Currency in the registration place |
7.55. Government grants
7.55.1. Details of government grants
Monetary Unit: CNY
| Item | Amount | Presentation | Amount included in profit or loss of the current period |
| Related to assets | 33,704,323.80 | Deferred income | 6,626,690.48 |
| Related to income | 28,304,471.04 | Other income | 28,304,471.04 |
| Total | 62,008,794.84 | 34,931,161.52 |
7.55.2. Return of government grants
□Applicable ? N/A
8. Changes in consolidated scope
8.1. Business combination under common control
8.1.1. Business combination under common control during current periodThere is no business combination under common control during current period.
8.2. Reverse purchase
The basic information of the transaction, the basis of the transaction constitutes the reverse purchase,whether the assets and liabilities retained by the listed company constitute the business and its basis,the determination of the merger cost, and the adjustment of the equity amount and its calculationaccording to the equity transaction:
There is no reverse purchase during current period.
8.3. Disposing subsidiaries
Whether there is a situation of losing control after disposing the investment in the subsidiary only once
□ Yes ?No
Whether there is a situation of disposing the investment in the subsidiary through several transactionsstep by step and losing control during the period
□ Yes ?No
8.4. Consolidated scope changes due to other reasons
Explain other reasons for changing consolidated scope (such as establishing a new subsidiary,liquidating a subsidiary) and its related situation:
As the Note 3.6, two subsidiaries were newly established in the reporting period: Luzhou LaojiaoInternational Trade (Hainan) Co., Ltd. and Luzhou Laojiao Technology Innovation Co., Ltd.; twosubsidiaries were liquidated and cancelled: Luzhou Laojiao Bosheng Hengxiang Liquor Sales Co., Ltd.and Luzhou Laojiao Tourism Culture Co., Ltd.
9. Interests in other entities
9.1. Interests in subsidiaries
9.1.1. Group composition
| Name of Subsidiaries | Major business location | Place of registration | Nature of business | Shareholding Proportion | Acquisition method | |
| Direct | Indirect | |||||
| Luzhou Laojiao Brewing Co., Ltd. | Luzhou | Luzhou | Baijiu manufacture and sales | 100.00% | Investment | |
| Luzhou Red Sorghum Modern Agricultural Development Co., Ltd. | Luzhou | Luzhou | Agricultural product planting and sales | 60.00% | Business combination under common control | |
| Luzhou Laojiao Sales | Luzhou | Luzhou | Baijiu sales | 100.00% | Investment | |
| Co., Ltd. | ||||||
| Luzhou Laojiao Nostalgic Liquor Marketing Co., Ltd. | Luzhou | Luzhou | Baijiu sales | 100.00% | Investment | |
| Luzhou Laojiao Custom Liquor Co., Ltd. | Luzhou | Luzhou | Baijiu sales | 15.00% | Investment | |
| Luzhou Laojiao Selected Supply Chain Management Co., Ltd. | Luzhou | Luzhou | Baijiu sales | 100.00% | Investment | |
| Guangxi Luzhou Laojiao Imported Liquor Industry Co., Ltd. | Qinzhou | Qinzhou | Red wine production and sales | 100.00% | Investment | |
| Luzhou Dingli Liquor Industry Co., Ltd. | Luzhou | Luzhou | Baijiu sales | 100.00% | Investment | |
| Luzhou Dingyi Liquor Industry Sales Co., Ltd. | Luzhou | Luzhou | Baijiu sales | 100.00% | Investment | |
| Luzhou Laojiao New Liquor Industry Co., Ltd. | Luzhou | Luzhou | Baijiu sales | 100.00% | Investment | |
| Luzhou Laojiao I & E Co., Ltd. | Luzhou | Luzhou | Wine import and export trade | 100.00% | Investment | |
| Luzhou Laojiao Boda Liquor Industry Marketing Co., Ltd. | Luzhou | Luzhou | Baijiu sales | 75.00% | Investment | |
| Luzhou Laojiao Bosheng Hengxiang Liquor Sales Co., Ltd. | Luzhou | Luzhou | Baijiu sales | 75.00% | Investment | |
| Luzhou Laojiao Fruit Wine Industry Co., Ltd. | Luzhou | Luzhou | Fruit wine sales | 41.00% | Investment | |
| Mingjiang Co., Ltd. | America | America | Baijiu sales | 54.00% | Investment | |
| Luzhou Laojiao International | Hainan | Hainan | Food import and export | 100.00% | Investment |
| Trade (Hainan) Co., Ltd. | ||||||
| Luzhou Pinchuang Technology Co., Ltd. | Luzhou | Luzhou | Technology development and service | 100.00% | Investment | |
| Luzhou Laojiao Tourism Culture Co., Ltd. | Luzhou | Luzhou | Baijiu sales, tourism | 100.00% | Investment | |
| Luzhou Laojiao International Development (Hong Kong) Co., Ltd. | Hong Kong | Hong Kong | Wine sales | 55.00% | Investment | |
| Luzhou Laojiao Commercial Development (North America) Co., Ltd. | America | America | Business development | 100.00% | Investment | |
| Luzhou Laojiao Electronic Commerce Co., Ltd. | Luzhou | Luzhou | Wine sales | 90.00% | Investment | |
| Luzhou Laojiao Whitail Liquor Industry Co., Ltd. Note | Luzhou | Luzhou | Wine sales | 35.00% | Investment | |
| Luzhou Baonuo Biotechnology Co., Ltd. | Luzhou | Luzhou | Fermented product manufacture | 100.00% | Investment | |
| Luzhou Laojiao Health Liquor Industry Co.,Ltd. | Luzhou | Luzhou | Health care wine manufacture and sales | 100.00% | Business combination under common control | |
| Luzhou Laojiao Health Sales Co., Ltd. | Luzhou | Luzhou | Health care wine sales | 100.00% | Business combination under common control | |
| Luzhou Laojiao New Retail Co., Ltd. | Luzhou | Luzhou | Baijiu sales | 40.00% | 100.00% | Investment |
| Luzhou Laojiao Technology Innovation Co., Ltd. | Chengdu | Chengdu | Technology development and service | 40.00% | 60.00% | Investment |
Statement for that the proportion of share-holding is different from the proportion of voting rights:
As the Note 3.6, the Company holds less than 51% shares of Luzhou Laojiao Custom Liquor Co., Ltd.,Luzhou Laojiao Fruit Liquor Industry Co., Ltd., and Luzhou Laojiao Whitail Liquor Industry Co., Ltd. but
in these companies’ board, among the five members, the Company has sent three persons, which is inthe majority. The Company has substantial control over these companies, so they are included in theconsolidation scope.
9.1.2. Important non-wholly-owned subsidiaries
Monetary Unit: CNY
| Name of subsidiary | Proportion of share holdings of non-Controlling shareholders | Gains and losses attributable to non-Controlling shareholders during current period | Dividends paid to non-controlling shareholders during current period | Closing balance of non-controlling shareholders interest |
| Luzhou Laojiao Boda Liquor Industry Marketing Co., Ltd. | 25.00% | 17,783,639.47 | 16,594,850.58 | 61,843,872.29 |
| Total | 17,783,639.47 | 16,594,850.58 | 61,843,872.29 |
9.1.3. Major financial information of important non-wholly-owned subsidiaries
Monetary Unit: CNY
| Name of subsidiary | Closing Balance | Opening Balance | ||||||||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Luzhou Laojiao Boda Liquor Industry Marketing Co., Ltd. | 275,419,421.12 | 275,419,421.12 | 28,043,931.97 | 28,043,931.97 | 384,313,678.76 | 664,998.84 | 384,978,677.60 | 142,358,344.01 | 142,358,344.01 | |||
Monetary Unit: CNY
| Name of subsidiary | Current Period | Previous Period | ||||||
| Operating revenue | Net profit | Total comprehensive income | Operating cash flow | Operating revenue | Net profit | Total comprehensive income | Operating cash flow | |
| Luzhou Laojiao Boda Liquor Industry Marketing Co., Ltd. | 64,698,451.93 | 71,134,557.89 | 71,134,557.89 | 99,816,980.78 | 789,612,097.04 | -35,909,069.79 | -35,909,069.79 | 209,462,320.40 |
9.1.4. Significant restrictions on using the assets and liquidating the liabilities of the CompanyNo such cases for the reporting period.
9.1.5. Financial support or other supports provided to structural entities incorporated into thescope of consolidated financial statementsThere is no structural entity incorporated into the scope of consolidated financial statements in thereporting period.
9.2. Interests in joint ventures and associates
9.2.1. Important joint ventures and associates
| Name of joint venture/associates | Major business location | Place of registration | Business nature | Shareholding proportion | Accounting Method | |
| Direct | Indirect | |||||
| Important joint ventures: none | ||||||
| Important associates: | ||||||
| Huaxi Securities Co., Ltd. | Chengdu, Sichuan | Chengdu, Sichuan | Securities | 10.39% | Equity method | |
Note: 1. The Company has the substantive decision-making power, so the Company still has significantinfluence on Huaxi Securities.
9.2.2. Major financial information of important associates
Monetary Unit: CNY
| Closing Balance/Amount in current period | Opening Balance/Amount in previous period | |
| Current assets | 89,547,378,203.44 | 86,844,635,628.06 |
| Non-current assets | 8,199,779,781.47 | 8,950,278,369.10 |
| Total assets | 97,747,157,984.91 | 95,794,913,997.16 |
| Current liabilities | 54,767,331,978.36 | 57,157,134,622.07 |
| Non-current liabilities | 20,539,402,724.68 | 16,233,476,784.79 |
| Total liabilities | 75,306,734,703.04 | 73,390,611,406.86 |
| Non-controlling shareholder interest | 22,000,726.84 | 26,409,206.44 |
| Shareholder interest attributable to parent company | 22,418,422,555.03 | 22,377,893,383.86 |
| Share of net assets calculated based on shareholding proportion | 2,330,073,856.15 | 2,325,861,429.43 |
| Adjusted | ||
| --Goodwill | ||
| --Unrealized profits of internal transactions | ||
| --Others | 167,466,735.90 | 167,466,735.90 |
| Book value of equity investments in associate companies | 2,497,540,592.05 | 2,493,328,165.33 |
| Fair value of equity investments in associate companies that have public | 2,054,418,514.32 | 2,687,386,768.40 |
| quote | ||
| Operating revenue | 3,375,583,530.03 | 5,121,995,492.55 |
| Net profit | 422,356,594.84 | 1,632,123,985.51 |
| Net profit from discontinued operation | ||
| Other comprehensive income | -119,327,423.67 | -284,563,526.94 |
| Total comprehensive income | 303,029,171.17 | 1,347,560,458.57 |
| Dividends from associate companies this year | 27,283,114.40 | 30,284,256.98 |
9.2.3. Financial information summarized of unimportant joint ventures and associate companies
Monetary Unit: CNY
| Closing Balance/Amount in current period | Opening Balance/Amount in previous period | |
| Joint ventures: | ||
| Total following items calculated on the basis of shareholding proportion | ||
| Associate companies: | ||
| Total book value of investments | 169,959,961.12 | 133,416,070.92 |
| Total following items calculated on the basis of shareholding proportion | ||
| --Net profit | -3,456,109.80 | -8,112,270.24 |
| -- Total comprehensive income | -3,456,109.80 | -8,112,270.24 |
Other statements:
Unimportant associate companies refer to Luzhou Laojiao Postdoctoral Workstation TechnologyInnovation Co., Ltd., Sichuan Development Wine Investment Co., Ltd., Sichuan Tongniang BaijiuIndustry Technology Research Institute Co., Ltd. and CTS Luzhou Laojiao Cultural TourismDevelopment Co., Ltd.
9.2.4. Notes to the significant restrictions on the ability of joint ventures or associate companiesto transfer funds to the CompanyNone
9.2.5. The excess loss of joint ventures or associate companies
None
9.2.6. The unrecognized commitment related to investment to joint venturesNone
9.2.7. Contingent liabilities related to investment to joint ventures or associate companiesNone
10. Risks related to financial instruments
The Company's primary financial instruments include monetary capital, trading financial assets,accounts receivable, receivables financing, receivables other than tax refundable, other equityinstruments, bills payable, accounts payable, other payables, lease liabilities, some other currentliabilities and loans. A detailed description of each financial instrument is set out in Note V and notes tothe Consolidated Financial Statement.Risks related to these financial instruments, and risk management policies the Company has adoptedto reduce these risks are described as follows. The Company management manages and monitors therisk exposure to ensure the above risks are controlled in a limited scope.The Company adopts sensitivity analysis technology to analyze the possible impact of reasonable andpossible changes of risk variables on current profits/losses or shareholders' equity. As any risk variablerarely changes in isolation, and the correlation between variables will have a significant effect on thefinal impact amount of the change of a risk variable, the following content is based on the assumptionthat the change of each variable is independent.Risk management objective: The Company strikes an appropriate balance between risk and return, andstrives to minimize the negative impact of risk on the Company's operating performance and maximizethe interests of shareholders and other equity investors.Risk management policy: The Board of Directors shall be responsible for planning and establishing arisk management framework, formulating risk management policies and related guidelines, andsupervising the implementation of risk management measures. The Risk Management Committee shallcarry out risk management through close collaboration (including the identification, evaluation andavoidance of relevant risks) with other business units of the Company in accordance with the policiesapproved by the Board of Directors. The internal audit department shall conduct regular audits on riskmanagement controls and procedures and report the results to the Audit Committee.The Company has formulated risk management policies to identify and analyze the risks it faces,clarifying specific risks and covering many aspects such as credit risk, liquidity risk and market riskmanagement. On a regular basis, the Company evaluates the specific marketing environment andvarious changes in the Company's business operations to determine whether any risk managementpolicy and system should be updated. The Company diversifies the risks to financial instrumentsthrough appropriately diversified investments and business portfolios, and reduces the risk ofconcentration in any single industry, specific geographic area or specific counterparty by formulatingappropriate risk management policies.
10.1. Credit risk
Credit risk refers to the risk that one party to a financial instrument cannot perform its obligations,causing financial losses to the other party. The Company only trades with recognized, reputable, andlarge third parties. In accordance with the Company's policy, the terms of sale with customers arebased on transactions of payment before delivery, with only a small amount of credit transactions, and
credit review for all customers who require credit to trade. In addition, the Company continuouslymonitors and controls the balance of the receivables to ensure that the Company does not facesignificant bad debt risks. In addition, the Company makes full provision for expected credit losses ateach balance sheet date based on the collection of receivables. Therefore, the Company'smanagement believes that the Company's credit risk has been greatly reduced.The Company's working capital is deposited in banks with high credit rating, so the credit risk of workingcapital is low.The Company's risk exposures are spread across multiple contract parties and customers in multiplegeographies, with customers in the commerce industry in addition to the alcohol distribution industry(the main industry). No systemic risk has been identified in the relevant industries. Therefore, theCompany has no significant credit concentration risk. As at 31 December 2022, the balance of the topfive customers of the Company's accounts receivable amounted to CNY 6,008,800, accounting for
95.90% of the balance of the Company's accounts receivable.
10.2. Liquidity risk
Liquidity risk refers to the risk unable to obtain sufficient funds in time to meet business developmentneeds or to repay debts due and other payment obligations. The Company has sufficient workingcapital. The liquidity risk is extremely small. The Company's objective is to use a variety of financinginstruments such as bank clearing and bank loans to maintain a balance between financingsustainability and flexibility. As at 31 December 2022, the Company has been able to meet its owncontinuing operation requirements through the use of cash flow from operations.The analysis of the financial liabilities held by the Company based on the maturity period of theundiscounted remaining contractual obligations is as follows:
| Item | Closing Balance | |||||
| Book value | Contract amount not discounted | Within 1 year | 1-2 years | 2-3 years | Over 3 years | |
| Notes payable | 0 | |||||
| Accounts payable | 2,311,665,585.04 | 2,311,665,585.04 | 2,311,665,585.04 | |||
| Other payable | 1,185,814,427.91 | 1,185,814,427.91 | 1,185,814,427.91 | |||
| Non-current liabilities due within one year | 81,879,466.63 | 81,879,466.63 | 81,879,466.63 | |||
| Other current liabilities | 333,627,225.47 | 333,627,225.47 | 333,627,225.47 | |||
| Long-term loans | 3,179,600,000.00 | 3,179,600,000.00 | 20,400,000.00 | 1,919,200,000.00 | 1,240,000,000.00 | |
| Bonds payable | 2,996,099,571.86 | 3,000,000,000.00 | 3,000,000,000.00 | |||
| Lease liabilities | 29,096,969.66 | 34,245,630.10 | 8,424,462.32 | 5,154,370.00 | 20,666,797.78 | |
| Subtotal | 10,117,783,246.57 | 10,126,832,335.15 | 3,912,986,705.05 | 28,824,462.32 | 4,924,354,370.00 | 1,260,666,797.78 |
10.3. Market risk
10.3.1. Foreign exchange risk
The foreign exchange risk refers to the risk of loss due to exchange rate changes. Apart from the threesubsidiaries of the Company which make purchases and sales in USD and HKD, the other majorbusiness activities are denominated and settled in CNY. The Company closely monitors the impact ofexchange rate movements on the Company's foreign exchange risk. As at 31 December 2022, theCompany's assets and liabilities are mainly in CNY balance. The Company's management considersthe impact of changes in foreign exchange risk on the Company's financial statements to be minimal.
10.3.2. Rate risk
The Company's interest rate risk mainly arises from the borrowings. Financial liabilities based on thefloating interest rate will cause the cash flow interest rate risk to the Company, and financial liabilitiesbased on the fixed interest rate the fair value interest rate risk. The Company will determine thecorresponding proportion between the contracts with fixed interest rate and those with floating interestrate in combination with current market condition.
10.3.3. Other price risks
Other price risk refers to the risk of fluctuation caused by market price changes other than foreignexchange risk and interest rate risk, whether these changes are caused by factors related to a singlefinancial instrument or its issuer or all similar financial instruments traded in the market. Other pricerisks faced by the Company mainly come from investments in other equity instruments measured at fairvalue.
11. Fair value disclosure
11.1. Closing fair value of assets and liabilities measured at fair value
Monetary Unit: CNY
| Item | Closing fair value | |||
| Level 1 | Level 2 | Level 3 | Total | |
| 1. Continuous measurement at fair value | -- | -- | -- | -- |
| 1.1 Held-for-trading financial assets | 1,073,466,780.37 | 1,073,466,780.37 | ||
| 1.1.1 Financial assets measured at fair value with their changes included into current profits/losses | 1,073,466,780.37 | 1,073,466,780.37 | ||
| 1.1.1.4 Wealth management products | 1,073,466,780.37 | 1,073,466,780.37 | ||
| 1.3 Investments in other equity instruments | 1,102,278,852.24 | 34,458,125.87 | 1,136,736,978.11 | |
| 1.6 Accounts receivable financing | 4,583,352,503.37 | 4,583,352,503.37 | ||
| Total assets continuously measured at fair value | 1,102,278,852.24 | 5,691,277,409.61 | 6,793,556,261.85 | |
| 2. Discontinuous measurement at fair value | -- | -- | -- | -- |
11.2. Determination basis of the market value of items measured continuously anddiscontinuously within Level 1 of the fair value hierarchy
The listed companies in mainland China determine the fair value of other equity instrument investmentaccording to the closing price on the last trading day of Shenzhen Stock Exchange or Shanghai StockExchange at the period-end. The companies listed in Hong Kong determine the fair value of otherequity instrument investment according to the closing price of Hong Kong Dollar on the last trading dayof Hong Kong Stock Exchange at the period-end and the median price of CNY exchange rate disclosedon the same day by China Foreign Exchange Trade System.
11.3. Valuation technique adopted and nature and amount determination ofimportant parameters for continuously and discontinuously within Level 2 of the fairvalue hierarchy
None
11.4. Valuation technique adopted and nature and amount determination ofimportant parameters for continuously and discontinuously within Level 3 of the fairvalue hierarchy
Trading financial assets are wealth management products of the collective asset management plan andare measured at fair value based on the amount calculated on the basis of the net unit value of theunderlying assets as published on the official website of the asset manager.
Accounts receivable financing: As the timing and price of bills discounted may not be reliably estimateddue to the short maturity of the bills all being less than one year and the endorsement of the negotiablebills being valued at book value, the Company measures the bills receivable at their book value as areasonable estimate of fair value.
Other equity instrument investment: Due to no significant changes in business environment, businesscondition and financial situation of invested companies, the Company shall measure the fair valueaccording to the lower one between investment cost and the share of net assets enjoyed by investedcompanies on the base date as the reasonable estimation.
11.5. Continuous fair value measurement items at level 3, adjustment between thebeginning carrying value and the ending carrying value and sensitivity analysis onunobservable parameters
None
11.6. Explain the reason for conversion and the policy governing when theconversion happens if conversion happens among continuous fair valuemeasurement items at different levelNone
11.7. Changes in valuation techniques in the reporting period and reasons for thechanges
None
11.8. Fair value of financial assets and liabilities not measured at fair valueNone
12. Related parties and related party transactions
12.1. The parent company of the Company
| Parent company | Registration place | Business nature | Registered capital | Shareholding proportion by the parent company | Voting rights proportion by the parent company |
| Luzhou Laojiao Group Co., Ltd. | Luzhou, Sichuan | Investment and asset management | 2,798,818,800.00 | 25.89% | 50.75% |
Statements for situation of parent company:
Note: The reason for the inconsistency between the shareholding proportion and voting rightsproportion by the parent company is that on 27 May 2021, Laojiao Group and XingLu InvestmentGroup, the second biggest shareholder, renewed the concerted action agreement which is valid as of1 June 2021 and ends on 31 May 2024. The agreement: when the parties in deal with the Company’sbusiness development and make decisions by shareholders meeting and board of directors accordingto the company law and other relevant laws and regulations and the articles of association, theparties should adopt the consistent actions. During the effective period of this agreement, before anyparty submits proposals involving the major issues of the Company's business development to theshareholders meeting or exercise the voting rights at the shareholders meeting and the board ofdirectors, the internal coordination for relevant proposals and voting events shall be conducted bypersons acting in concert. If there are different opinions, it will be subject to Laojiao Group’s opinion.The nature of parent company: Limited liability company (state-owned); Registration place: AiRentang Square, China Baijiu Golden Triangle Liquor Industry Park, Luzhou, Sichuan Province;Business Scope: General project: Social economy consulting services; business managementconsulting; financial consulting; business headquarters management; import and export agency; tradebrokerage; crops planting services; trees planting operation; elder care services; tourismdevelopment project planning and consulting; technical agency services; engineering andtechnological research and experimental development; display device manufacturing; supply chainmanagement services; technical services, technical development, technical consulting, technical
communication, technical transfer, and technical promotion; domestic freight transport agency; andequity fund-invested asset management services. It shall also include licensed projects (businessactivities can be carried out legally and independently with business license in addition to projectsthat must be approved by law): Agency bookkeeping; career intermediary activities; food production;food sales; and medical services. (business activities that require approval in accordance with lawscan be carried out upon approval of relevant authorities, and the specific business projects shall besubject to the approval document or license of relevant departments)
The final control party of the Company is SASAC of Luzhou.
12.2. Subsidiaries of the Company
For details please see Note 9.1. Interests in subsidiaries.
12.3. Joint ventures and associates of the Company
For details please see Note 9.3. Interests in joint ventures and associates.Other statements:
There are no other joint ventures or associates that have related party transactions with the Companyin the current period or in the previous period and result in balance.
12.4. Other related party of the Company
| Name of Other Related Party | Relationship with the Company |
| Luzhou Jiachuang Wine Supply Chain Management Co., Ltd. | The same parent company |
| Luzhou Laojiao Zhitong Trading Co., Ltd. | The same parent company |
| Sichuan Hongxin Financing Guarantee Co., Ltd. | The same parent company |
| Sichuan Lianzhong Supply Chain Service Co., Ltd. | The same parent company |
| New Shottes Brook Private Company | The same parent company |
| Guangzhou Zhongying Gongyuan Energy Saving Technology Co., Ltd. | Sub-subsidiary of parent company |
| Sichuan Yukun Logistics Co., Ltd. | Sub-subsidiary of parent company |
| Sichuan Kangrun Group Construction and Installation Engineering Co., Ltd. | Sub-subsidiary of parent company |
| Luzhou Qingxigu Scenic Area Management Co., Ltd. | Sub-subsidiary of parent company |
| Luzhou Yuanhai Lianzhong Supply Chain Co., Ltd. | Sub-subsidiary of parent company |
| Luzhou Sanrenxuan Liquor Industry Co., Ltd. | Joint venture of parent company |
| CTS Luzhou Laojiao Cultural Tourism Development Co., Ltd. | Joint venture |
| Luzhou XingLu Water (Group) Co., Ltd. | Subsidiary of the second largest shareholder |
| Luzhou China Resources Xinglu Gas Co., Ltd. | Subsidiary of the second largest shareholder |
| Luzhou XingLu Property Management Co., Ltd. | Subsidiary of the second largest shareholder |
| Sichuan Meihe Winery Industry Co.,Ltd. | Minority shareholder of the subsidiary Fruit Wine Industry |
| Luzhou Public Transport Group Co., Ltd. | Subsidiary of the second largest shareholder |
| Other subsidiaries of Luzhou XingLu Investment Group Co., Ltd. | Other subsidiary of the second largest shareholder |
| Other subsidiaries of Luzhou Laojiao Group Co., Ltd. | Other subsidiary of parent company |
Other statements:
Note: As the Note 10.1, the Company will disclose the transactions with XingLu Investment Group andits controlling enterprises as other related parties of the Company.
12.5. Related transactions
12.5.1. Related transactions of purchase and sales of goods / rendering and receipt of servicesTable of purchase of goods / receipt of services
Monetary Unit: CNY
| Name of Related Party | Transaction | Amount in current period | Approved trading amount | Whether over approved trading amount | Amount in previous period |
| Receipt of services: | |||||
| Luzhou XingLu Investment Group Co., Ltd. and its other subsidiaries | Property service, advertising service, etc. | 26,186,859.88 | 13,609,282.77 | ||
| Laojiao Group and its other subsidiaries | Loading and unloading transportation, technical services, installation services, etc. | 27,895,483.79 | 28,428,157.86 | ||
| CTS Luzhou Laojiao Cultural Tourism Development Co., Ltd. | Conference fees, travel service fee, etc. | 9,296,122.35 | 5,512,511.56 | ||
| Purchase of goods: | |||||
| Laojiao Group and its other subsidiaries | Raw materials, water, power, etc. | 106,345,871.05 | 21,190,526.05 | ||
| Luzhou XingLu Investment Group Co., Ltd. and its other subsidiaries | Gas, water | 11,773,961.98 | 11,547,390.36 | ||
| Sichuan Meihe Winery Industry Co.,Ltd. | Other wine | 976,637.50 | |||
| Total | 181,498,299.05 | 81,264,506.10 |
Table of sales of goods and rendering of service
Monetary Unit: CNY
| Name of Related Party | Transaction | Amount in current period | Amount in previous period |
| Sales of goods: | |||
| Laojiao Group and its subsidiaries | Wine | 52,481,609.52 | 6,885,203.34 |
| XingLu Investment Group and its subsidiaries | Wine | 2,880.00 |
| CTS Luzhou Laojiao Cultural Tourism Development Co., Ltd. | Wine | 134,111,657.39 | 84,299,013.96 |
| Luzhou Sanrenxuan Liquor Industry Co., Ltd. | Wine | 162,125,345.72 | 47,171,605.12 |
| Rendering of service: | |||
| Luzhou Sanrenxuan Liquor Industry Co., Ltd. | Rendering of service | 496,500.00 | |
| Total | 348,718,612.63 | 138,855,202.42 |
12.5.2. Related party leasing
The Company as lessor:
Monetary Unit: CNY
| Name of lessee | Type of leased asset | Leasing income recognized during current period | Leasing income recognized during previous period |
| Laojiao Group and its subsidiaries | House lease | 1,681,340.00 | 2,690,880.00 |
| Total | 1,681,340.00 | 2,690,880.00 |
The Company as lessee:
Monetary Unit: CNY
| Name of lessor | Type of assets leased | Rental expenses of short-term lease simplified treated and low-value asset lease (if applicable) | Variable lease payments not included in the measurement of lease liabilities (if applicable) | Paid rent | Income expense of lease liabilities undertaken | Increased use right assets | |||||
| Amount in current period | Amount in previous period | Amount in current period | Amount in previous period | Amount in current period | Amount in previous period | Amount in current period | Amount in previous period | Amount in current period | Amount in previous period | ||
| Laojiao Group and its subsidiaries | House lease | 1,924,834.44 | 2,926,313.09 | ||||||||
| Total | 1,924,834.44 | 2,926,313.09 | |||||||||
12.5.3. Key management compensation
Monetary Unit: CNY
| Item | Amount in current period | Amount in previous period |
| Key management | 14,486,473.15 | 13,798,986.32 |
12.5.4. Other related transactions
As the Note 7.9, on 10 March 2022, the Company and Luzhou Energy Investment Co., Ltd. jointlyincorporated Luzhou Laojiao Postdoctoral Workstation Technology Innovation Co., Ltd. The Company’s
shareholding ratio is 40.00% measured by equity method; Laojiao Group’s shareholding ratio is 51.00%;and Luzhou Energy Investment Co., Ltd.’s shareholding ratio is 9.00%.
12.6. Receivables and payables of related parties
12.6.1. Receivables
Monetary Unit: CNY
| Item | Related party | Closing Balance | Opening Balance | ||
| Book value | Provision for bad debt | Book value | Provision for bad debt | ||
| Prepayment | Sichuan Meihe Winery Industry Co.,Ltd. | 2,961,479.50 | 2,961,479.50 | ||
| Prepayment | CTS Luzhou Laojiao Cultural Tourism Development Co., Ltd. | 2,379.50 | |||
| Prepayment | Luzhou XingLu Water (Group) Co., Ltd. | 690,115.49 | |||
| Prepayment | New Shottes Brook private company | 611,542.54 | |||
| Prepayment | Luzhou China Resources Xinglu Gas Co., Ltd. | 19,536.30 | |||
| Other receivables | CTS Luzhou Laojiao Cultural Tourism Development Co., Ltd. | 5,111,743.43 | 780,587.17 | 3,590,790.65 | 354,539.53 |
12.6.2. Payables
Monetary Unit: CNY
| Item | Related party | Closing Balance | Opening Balance |
| Accounts payable | Sichuan Lianzhong Supply Chain Service Co., Ltd. | 6,993,503.13 | 3,679.25 |
| Accounts payable | Luzhou Public Transport Group Co., Ltd. | 469,479.45 | |
| Accounts payable | Guangzhou Zhongying Gongyuan Energy Saving Technology Co., Ltd. | 355,312.88 | |
| Accounts payable | Luzhou XingLu Property Management Co., Ltd. | 130,000.00 | |
| Accounts payable | CTS Luzhou Laojiao Cultural Tourism Development Co., Ltd. | 10,838.00 | |
| Accounts payable | Sichuan Yukun Logistics Co., Ltd. | 3,851.28 | |
| Contractual liabilities (tax inclusive) | CTS Luzhou Laojiao Cultural Tourism | 6,070,341.82 | 19,017,274.30 |
| Development Co., Ltd. | |||
| Contractual liabilities (tax inclusive) | Luzhou Jiachuang Wine Supply Chain Management Co., Ltd. | 4,525,508.00 | |
| Contractual liabilities (tax inclusive) | Luzhou Sanrenxuan Liquor Industry Co., Ltd. | 1,621,994.29 | 14,745,240.00 |
| Contractual liabilities (tax inclusive) | Sichuan Lianzhong Supply Chain Service Co., Ltd. | 51,114.78 | 158,295.76 |
| Contractual liabilities (tax inclusive) | Luzhou Laojiao Zhitong Trading Co., Ltd. | 0.00 | 55,586.00 |
| Contractual liabilities (tax inclusive) | Luzhou Laojiao Group Co., Ltd. | 0.00 | 523,760.03 |
| Contractual liabilities (tax inclusive) | Luzhou Yuanhai Lianzhong Supply Chain Co., Ltd. | 37,762.51 | |
| Contractual liabilities (tax inclusive) | Sichuan Kangrun Group Construction and Installation Engineering Co., Ltd. | 6,144.00 | |
| Contractual liabilities (tax inclusive) | Sichuan Hongxin Financing Guarantee Co., Ltd. | 3,072.00 | |
| Contractual liabilities (tax inclusive) | Luzhou Qingxigu Scenic Area Management Co., Ltd. | 460.80 | |
| Other payables | Sichuan Lianzhong Supply Chain Service Co., Ltd. | 17,633,148.00 | 1,684,148.00 |
| Other payables | CTS Luzhou Laojiao Cultural Tourism Development Co., Ltd. | 750,000.00 | 396,000.00 |
| Other payables | Luzhou Jiachuang Wine Supply Chain Management Co., Ltd. | 360,000.00 | 1,500,000.00 |
| Other payables | Luzhou Sanrenxuan Liquor Industry Co., Ltd. | 150,000.00 | 150,000.00 |
| Other payables | Guangzhou Zhongying Gongyuan Energy Saving Technology Co., Ltd. | 140,444.35 | |
| Other payables | Luzhou Laojiao Group Co., Ltd. | 80,000.00 | |
| Other payables | Luzhou Yuanhai Lianzhong Supply Chain Co., Ltd. | 50,200.00 | |
| Other payables | Sichuan Kangrun Group Construction and Installation Engineering Co., Ltd. | 34,175.78 |
13. Stock payment
13.1. The overall situation of share-based payments
? Applicable □ N/A
Unit: Share
| Total equity instruments granted by the Company in the reporting period | 435,003.00 |
| Total equity instruments exercised by the Company in the reporting period | 0.00 |
| Total equity instruments of the Company expired in the reporting period | 128,310.00 |
| Scope of the exercise price of outstanding stock options of the Company at the end of the reporting period and remaining contract term | N/A |
| Scope of the exercise price of other outstanding equity instruments of the Company at the end of the reporting period and remaining contract term | N/A |
Other statements:
Note 1: In September 2022, the Company granted 342,334 shares of the Restricted Share IncentivePlan for the second time; in December 2022, the Company granted 92,669 shares of the RestrictedShare Incentive Plan for the third time (not registered); the total granted shares of the period were435,003 shares.Note 2: In December 2021, the Company granted 6,928,600 shares of the Restricted Share IncentivePlan for the first time, and in January 2022, during the payment process after the grant date wasdetermined, four awardees chose to waive a total of 66,000 restricted shares that the Company hadintended to grant to them due to personal reasons; in September 2022, with seven awardees no longereligible, the Company decided to repurchase and retire the 62,310 restricted shares of them which hadbeen granted but not lifted from restricted sales; the total invalid shares in the period were 128,310shares.
13.2. Equity-settled share-based payments
? Applicable □ N/A
Monetary Unit: CNY
| Method of determining the fair value of equity instruments on the grant date | The closing price of restricted stocks on the grant date deducted the grant price thereof |
| Basis to determine number of equity instrument that can be exercised | Making the best estimate based on the latest number of persons who can exercise rights |
| Reason for remarkable difference between the estimate of the current period and that of previous period | N/A |
| Total amount of equity-settled share-based payments included into capital reserves | 1,077,377,405.86 |
| Total costs of recognizing equity-settled share-based payments in the current period | 396,102,725.02 |
13.3. Cash-settled share-based payments
□ Applicable ? N/A
13.4. Modification and termination of share-based payments
According to the 22nd Meeting of the 10th Board of Directors of the Company held on 2 September2022, the Proposal on the Adjustment of the Granted Price of Reserved Restricted Shares of 2021Restricted Share Incentive Plan was deliberated and approved. With the implementation of the 2021profit distribution plan of the Company completed, the Company agreed to adjust the granted price ofreserved restricted shares from CNY 92.71 per share to CNY 89.466 per share based on the 2021
Restricted Share Incentive Plan (Draft) of Luzhou Laojiao Co., Ltd. Other than that, all are consistentwith relevant contents in the disclosed Incentive Plan.
14. Commitments and contingencies
14.1. Commitments
14.1.1. Significant contingencies at the balance sheet date
On 15 October 2014 and 10 January 2015, the Company disclosed three saving deposits involvingcontract disputes in Agricultural Bank of China Changsha Yingxin Sub-branch, Industrial andCommercial Bank of China Nanyang Zhongzhou Sub-branch and another bank, with a total amount ofCNY 500 million. The public security organization has investigated, and the investigation of relatedcases and the preservation of assets are under way. The Company has initiated a civil procedure torecover the loss from the responsible unit. As of the period-end, the Company has recovered theabovementioned saving deposits involving contract disputes with CNY 370,950,500.
Except for the above matters, the Company has no other significant contingencies that need to bedisclosed as the end of 31 December 2022.
14.1.2. Explanation shall be given even if there is no significant contingency for the Company todiscloseThere was no significant contingency in the Company to disclose.
15. Post balance sheet event
15.1. Profit distribution
Monetary Unit: CNY
| Profits or dividends planned to distribute | 6,219,148,324.03 |
| Reviewed and approved profits or dividends declared to distribute | 6,219,148,324.03 |
| Profit distribution plan | Upon the resolution of the Board of Directors, the 2022 profit distribution plan was approved: Based on the current 1,471,987,769 shares, a cash dividend of CNY 42.25 (tax included) will be distributed for every 10 existing shares held, representing a total cash dividend amount of CNY 6,219,148,324.03 (tax included). Where any change occurs to the Company's total share capital before the implementation of the distribution plan, relevant adjustments shall be made with the same total distribution amount. |
15.2. Sales return
There are no important sales returning after balance sheet date.
15.3. Statement for other post balance sheet events
Completing the payment and registration of reserved restricted sharesAccording to the 26th Meeting of the 10th Board of Directors of the Company held on 29 December2022, the Board of Directors considered that the grant of reserved restricted shares for this period metthe requirements of Administrative Measures for Equity Incentive of Listed Companies and otherrelevant laws and the 2021 Restricted Share Incentive Plan (Draft) of Luzhou Laojiao Co., Ltd., theconditions for the reserved grant under the Restricted Share Incentive Plan had been fulfilled, and theawardees met the requirements of relevant laws, administrative rules, departmental regulations andnormative document and their qualifications of the awardees of Restricted Share Incentive Plan arelegal and valid. Therefore, the Board agreed to grant 92,669 restricted shares to 17 eligible awardees atCNY 89.466 per share with 29 December 2022 as the date of grant. The Company issued an actualamount of 92,669 shares to 17 awardees through private offering in the period at a price of CNY 89.466per share, with a total of CNY 8,290,724.74 granted restricted shares.As of 15 January 2023, the Company has received a total of CNY 8,290,724.74 from the above 17awardees for the subscription of restricted shares in monetary capital, of which CNY 92,669.00 wasincluded in share capital and CNY 8,198,055.74 was included in capital reserve. The listing date of thegranted shares is 17 February 2023. Upon completion of the grant registration, the total number ofshares of the Company increased from 1,471,895,100 to 1,471,987,769, which will not change thecontrolling shareholder and the actual controller of the Company.
Except for the above matters, the Company has no other post balance sheet events that need to bedisclosed as of 31 December 2022.
16. Other important information
16.1. Annuity plan
The Company carried out the enterprise annuity payment work normally during the reporting period.The enterprise annuity funds are paid by both the Company and employees. The Company'scontribution shall not exceed 8% of the Company's total salary in the previous year as stipulated by thestate, and the individual contribution shall be withheld by the Company according to 1% of total salaryof the employee in the previous year.
16.2. Segment information
16.2.1 Recognition basis and accounting policies of reportable segmentExcept for the business on wine sales, the Company does not operate other businesses that have asignificant impact on operation results. In addition, the Company operates mainly from China and mainassets also located in China, so the Company does not need to disclose segment data.
16.3. Lease
16.3.1 The Company as the lessee
| Item | Amount |
| Interest expenses of lease liabilities | 1,698,122.32 |
| Simplistically treated short-term lease expenses included into related asset costs or the current profits/losses | 8,551,460.53 |
| Simplistically treated low-value asset lease expenses included into related asset costs or the current profits/losses (except the short-term lease expenses of low-value assets) | |
| Variable lease payments included into related asset costs or the current profits/losses but not included into lease liabilities to measure | |
| Income from the sublease of right-of-use assets | |
| Total cash outflow related to leases | 23,059,482.91 |
| Profits/losses generated from sale and leaseback transactions |
The leased assets of the Company include the buildings and constructions and the land use rightinvolved in operation. The leasing period of land use right is normally 15-30 years and the leasecontract of land use right generally includes the renewal option clause.
16.3.2 See “Note X. Risks Related to Financial Instruments” for information about the lease liabilitiesmaturity analysis and corresponding liquidity risk management.
16.4. Other significant events that can affect investors’ decision
16.4.1. Saving deposits involving contract disputes
As stated in Note 12.2, three saving deposits involved contract disputes in Agricultural Bank of ChinaChangsha Yingxin Sub-branch, Industrial and Commercial Bank of China Nanyang Zhongzhou Sub-branch and another bank, with a total amount of CNY 500 million. At present, the investigation ofrelated cases and the preservation of assets have been under way. The Company has initiated a civilprocedure to recover the loss from the responsible unit.
Taking into account the current amount of assets preserved by the public security authorities and thecontents of the professional legal opinion issued by Beijing Weiheng (Chengdu) Law Firm on 24February 2023 that “given that since the issuance of the previous legal opinion, a few recovery hasbeen achieved through the criminal and civil execution, totalling CNY 371 million. At the same time, it issuggested that the total amount of bad debt provision for the three aforementioned places remain CNY120 million”, the Company has made a bad debt provision of CNY 120 million for savings depositinvolved in contractual disputes as of the end of the period, and the amount of the bad debt provisionmay be adjusted in the future based on the litigation process and recovery.
16.4.2. Deliberating and approving the Proposal on the De-registration of Luzhou BaonuoBiotechnology Co., Ltd.
On 2 December 2022, the Proposal on the De-registration of Luzhou Baonuo Biotechnology Co., Ltd.was deliberated and approved on the 25th Meeting of the 10th Board of Directors. Luzhou BaonuoBiotechnology Co., Ltd. (hereinafter referred to as “Baonuo”) is wholly owned by the Company andmainly takes charge of the comprehensive use and research as well as result transformation of brewingby-product and waste. According to the position and schedule of the scientific and technologicalresearch and innovation of the brewing production system of the Company, relevant business ofBaonuo will be taken over by Brewing Company, a subsidiary of the Company, based on which theCompany decided to cancel Baonuo.
Except for the above matters, the Company has no other significant events that can affect investors’decision that need to be disclosed as of 31 December 2022.
17. Notes to the main Items of the financial statements of parentcompany (all currency unit is CNY, except other statements)
17.1. Accounts receivable
17.1.1. Analysis by categories
Monetary Unit: CNY
| 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 | Amount | Proportion | Amount | Proportion | |||
| Including: | ||||||||||
| Accounts receivables tested for impairment by the portfolio | 50,000.00 | 100.00% | 2,500.00 | 5.00% | 47,500.00 | 1,209,701.49 | 100.00% | 2,223.86 | 0.18% | 1,207,477.63 |
| Including: | ||||||||||
| Accounts receivables tested for impairment on the portfolio with charact | 50,000.00 | 100.00% | 2,500.00 | 5.00% | 47,500.00 | 1,209,701.49 | 100.00% | 2,223.86 | 0.18% | 1,207,477.63 |
| eristics of credit risk | ||||||||||
| Total | 50,000.00 | 100.00% | 2,500.00 | 5.00% | 47,500.00 | 1,209,701.49 | 100.00% | 2,223.86 | 0.18% | 1,207,477.63 |
Accounts receivables tested for impairment by the portfolio:
Monetary Unit: CNY
| Item | Closing Balance | ||
| Book balance | Provision for bad debt | Proportion | |
| Risk portfolio | 50,000.00 | 2,500.00 | 5.00% |
| Other portfolios | |||
| Total | 50,000.00 | 2,500.00 | |
Please refer to the relevant information of disclosure of provision for bad debt of other accountsreceivable if adopting the general mode of expected credit loss to withdraw provision for bad debt ofaccounts receivable.
□ Applicable ? N/A
Disclosure by aging
Monetary Unit: CNY
| Aging | Book balance |
| Within 1 year (including 1 year) | 50,000.00 |
| Total | 50,000.00 |
17.1.2. Provision and recovery for bad and doubtful debt in the current periodAllowance of provision for bad debt:
Monetary Unit: CNY
| Type | Opening Balance | Current Period | Closing Balance | |||
| Allowance | Reversal or recovery | Write-off | Other | |||
| Accounts receivables tested for impairment by the portfolio | 2,223.86 | 276.14 | 2,500.00 | |||
| Total | 2,223.86 | 276.14 | 2,500.00 | |||
Note: There is no accounts receivable reversed or recovered with significant amount during thereporting period.
17.1. 3. Top five entities with the largest balances of accounts receivable
Monetary Unit: CNY
| Company Name | Closing Balance | Proportion to total closing balance of accounts receivable | Closing Balance of provision for bad debt |
| One-time sporadic customers | 50,000.00 | 100.00% | 2,500.00 |
| Total | 50,000.00 | 100.00% |
17.1. 4. Accounts receivable derecognized due to the transfer of financial assetsThere are no assets and liabilities formed from the transfer of accounts receivable and continuedinvolvement during the reporting period.
17.2. Other receivables
Monetary Unit: CNY
| Item | Closing Balance | Opening Balance |
| Other receivables | 12,042,401,844.84 | 10,033,554,898.57 |
| Total | 12,042,401,844.84 | 10,033,554,898.57 |
17.2.1. Other receivables
17.2.1.1. Other receivables disclosed by nature
Monetary Unit: CNY
| Nature | Closing book balance | Opening book balance |
| Intercourse funds of subsidiaries receivable | 12,023,243,459.84 | 10,015,555,743.27 |
| Intercourse funds and others | 11,257,616.61 | 6,158,145.13 |
| Petty cash | 2,574.63 | |
| Saving deposits involving contract disputes | 129,049,496.981 | 132,376,912.43 |
| Total | 12,163,550,573.43 | 10,154,093,375.46 |
Note: 1. The saving deposits involving contract disputes refer to three deposits amounting to CNY500,000,000.00 with Changsha Yingxin Sub-branch of Agricultural Bank of China and NanyangZhongzhou Sub-branch of Industrial and Commercial Bank of China disclosed by the Company in the2014 Annual Report. The deposits have lost the nature of monetary fund due to their involvement incontract disputes and have thus been transferred into “other receivables”. As of 31 December 2022, theclosing balance of that fund was CNY 129,049,496.98.
17.2.1.2. Provision for bad and doubtful other receivables in the current period
Monetary Unit: CNY
| Provision for bad debt | First stage | Second stage | Third stage | Total |
| Expected credit loss of the next 12 months | Expected loss in the duration (credit impairment not occurred) | Expected loss in the duration (credit impairment occurred) | ||
| Balance of 1 January 2022 | 538,476.89 | 120,000,000.00 | 120,538,476.89 | |
| Balance of 1 January 2022 in the current period | ||||
| Allowance | 610,251.70 | 610,251.70 | ||
| Balance of 31 December 2022 | 1,148,728.59 | 120,000,000.00 | 121,148,728.59 |
Changes of carrying amount with significant amount changed of loss provision in the current period
□ Applicable ? N/A
Disclosure by aging
Monetary Unit: CNY
| Aging | Closing balance |
| Within 1 year (including 1 year) | 12,030,843,921.37 |
| 1-2 years | 72,855.08 |
| 2-3 years | 3,511,500.00 |
| Over 3 years | 129,122,296.98 |
| 3-4 years | 22,800.00 |
| Over 5 years | 129,099,496.98 |
| Total | 12,163,550,573.43 |
17.2.1.3. Provision and recovery for bad and doubtful other receivables in the current periodAllowance of provision for bad debt:
Monetary Unit: CNY
| Type | Opening Balance | Current Period | Closing Balance | |||
| Allowance | Reversal or recovery | Write-off | Other | |||
| Other receivables tested for impairment individually | 120,000,000.00 | 120,000,000.00 | ||||
| Other receivables tested for impairment by the portfolio | 538,476.89 | 610,251.70 | 1,148,728.59 | |||
| Total | 120,538,476.89 | 610,251.70 | 121,148,728.59 | |||
17.2.1.4. Other receivables with actual verification in the current periodNo such cases for the reporting period.
17.2.1.5. Top five entities with the largest balances of the other receivables
Monetary Unit: CNY
| Company Name | Nature | Closing Balance | Aging | Proportion in total receivables | Provisioning amount at period end |
| Luzhou Laojiao Brewing Co., Ltd. | Internal transactions | 10,107,795,765.44 | Within 1 year | 83.10% | |
| Luzhou Laojiao Sales Co., Ltd. | Internal transactions | 1,028,552,748.43 | Within 1 year | 8.46% | |
| Luzhou Dingyi Liquor Industry Sales Co., Ltd. | Internal transactions | 418,929,316.46 | Within 1 year | 3.44% | |
| Luzhou Laojiao Electronic | Internal | 150,162,478.49 | Within 1 year | 1.23% |
| Commerce Co., Ltd. | transactions | ||||
| Agricultural Bank of China Changsha Yingxin Sub-branch, Industrial and Commercial Bank of China Nanyang Zhongzhou Sub-branch and another bank. | Saving deposits involving contract disputes | 129,049,496.98 | Over 5 years | 1.06% | 120,000,000.00 |
| Total | 11,834,489,805.80 | 97.29% | 120,000,000.00 |
17.2.1.6. Accounts receivable involving government grants
There is no accounts receivable involving government grants in the current period.
17.2.1.7. Other receivables derecognized due to the transfer of financial assetsThere are no other receivables derecognized due to the transfer of financial assets in the current period.
17.2.1.8. The amount of the assets and liabilities formed due to the transfer and continuedinvolvement of accounts receivableNo such cases for the reporting period.
17.3. Long-term equity investments
Monetary Unit: CNY
| Item | Closing Balance | Opening Balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
| Investment in subsidiary | 3,611,563,148.96 | 3,611,563,148.96 | 3,429,436,240.91 | 3,429,436,240.91 | ||
| Investment in associates and joint venture | 2,669,970,043.71 | 2,567,098.80 | 2,667,402,944.91 | 2,624,531,691.80 | 2,567,098.80 | 2,621,964,593.00 |
| Total | 6,281,533,192.67 | 2,567,098.80 | 6,278,966,093.87 | 6,053,967,932.71 | 2,567,098.80 | 6,051,400,833.91 |
17.3.1. Investment in subsidiary
Monetary Unit: CNY
| Investee | Opening Balance (book value) | Changes in current period | Closing Balance (book value) | Closing balance of provision for impairment | |||
| Increase | Decrease | Provision for impairment | Other | ||||
| Luzhou Pinchuang | 59,136,031.69 | 17,817,693.63 | 76,953,725.32 | ||||
| Technology Co., Ltd. | |||||||
| Luzhou Laojiao Sales Co., Ltd. | 110,966,255.34 | 94,798,800.22 | 205,765,055.56 | ||||
| Luzhou Laojiao Brewing Co., Ltd. | 3,176,693,836.28 | 57,485,392.03 | 3,234,179,228.31 | ||||
| Luzhou Laojiao International Development (Hong Kong) Co., Ltd. | 5,706,190.40 | 3,317,446.56 | 9,023,636.96 | ||||
| Luzhou Laojiao Electronic Commerce Co., Ltd. | 52,525,326.26 | 7,423,061.08 | 59,948,387.34 | ||||
| Luzhou Baonuo Biotechnology Co., Ltd. | 20,000,000.00 | 20,000,000.00 | |||||
| Luzhou Laojiao Tourism Culture Co., Ltd. | 4,000,000.00 | 4,000,000.00 | |||||
| Luzhou Laojiao Health Liquor Industry Co., Ltd. Note | 408,600.94 | 5,284,514.53 | 5,693,115.47 | ||||
| Total | 3,429,436,240.91 | 4,000,000.00 | 186,126,908.05 | 3,611,563,148.96 |
17.3.2. Investment in associate and joint venture
Monetary Unit: CNY
| Investee | Opening Balance (book value) | Changes in current period | Closing Balance (book value) | Closing Balance of provision for impairment | |||||||
| Increase | Decrease | Gain or loss recognized under equity method | Adjustments of other comprehensive income | Changes in other equity | Cash divided or profit declared | Provision for impairment | Other | ||||
| 1. Joint Venture | |||||||||||
| 2. Associate | |||||||||||
| Huaxi Securities Co., | 2,493,328,165.33 | 43,897,917.31 | -12,402,376.19 | 27,283,114.40 | 2,497,540,592.05 | 2,567,098.80 | |||||
| Ltd. | |||||||||||
| Luzhou Laojiao Postdoctoral Workstation Technology Innovation Co., Ltd. | 40,000,000.00 | 185,894.77 | 40,185,894.77 | ||||||||
| Sichuan Development Wine Investment Co., Ltd. | 5,726,848.36 | 162,805.88 | 5,889,654.24 | ||||||||
| CTS Luzhou Laojiao Cultural Tourism Development Co., Ltd. | 122,909,579.31 | 877,224.54 | 123,786,803.85 | ||||||||
| Subtotal | 2,621,964,593.00 | 40,000,000.00 | 45,123,842.50 | -12,402,376.19 | 27,283,114.40 | 2,667,402,944.91 | 2,567,098.80 | ||||
| Total | 2,621,964,593.00 | 40,000,000.00 | 45,123,842.50 | -12,402,376.19 | 27,283,114.40 | 2,667,402,944.91 | 2,567,098.80 |
17.4. Operating revenue and cost of sales
Monetary Unit: CNY
| Item | Current Period | Previous Period | ||
| Revenue | Cost of sales | Revenue | Cost of sales | |
| Primary business | 8,390,524,714.12 | 6,176,755,863.73 | 7,558,340,885.88 | 5,664,019,938.24 |
| Other business | 19,908,823.14 | 1,309,332.64 | 44,286,894.17 | 1,137,093.20 |
| Total | 8,410,433,537.26 | 6,178,065,196.37 | 7,602,627,780.05 | 5,665,157,031.44 |
Details:
Monetary Unit: CNY
| Contract category | Liquor sales | Total |
| Commodity type | ||
| Including: |
| Medium and high grade liquor | 8,361,787,830.28 | 8,361,787,830.28 |
| Other liquor | 28,736,883.84 | 28,736,883.84 |
| By operating segment | ||
| Including: | ||
| Domestic | 8,390,524,714.12 | 8,390,524,714.12 |
| Outbound | ||
| Market or customer type | ||
| Including: | ||
| Contract type | ||
| Including: | ||
| Commodity sales contract | 8,390,524,714.12 | 8,390,524,714.12 |
| By commodity transfer time | ||
| Including: | ||
| By contract term | ||
| Including: | ||
| By sales channel | ||
| Including: | ||
| Total | 8,390,524,714.12 | 8,390,524,714.12 |
17.5. Investment income
Monetary Unit: CNY
| Item | Current Period | Previous Period |
| Investment income from long-term equity investments under cost method | 7,777,018,295.87 | 6,296,151,637.80 |
| Investment income from long-term equity investments under equity method | 45,123,842.50 | 171,693,567.56 |
| Investment income gained during the period of holding held-for-trading financial assets | 6,813,617.83 | |
| Investment income from disposal of held-for-trading financial assets | 9,438,465.78 | |
| Dividends income gained during the period of holding other equity instrument investment | 8,078,717.93 | 6,657,660.52 |
| Investment income from early redemption of bonds | -4,241,494.76 | |
| Total | 7,842,231,445.15 | 6,474,502,865.88 |
17.6. Other
Note: There is no major restriction on the repatriation of the Company's investment income.
Including: investment income from long-term equity investments under the cost method:
| Item | Current Period | Previous Period |
| Luzhou Laojiao Sales Co., Ltd. | 7,709,806,254.66 | 6,269,283,588.58 |
| Luzhou Baonuo Biotechnology Co., Ltd. | 10,515,293.70 | |
| Luzhou Pinchuang Technology Co., Ltd. | 30,991,503.61 | 26,868,049.22 |
| Luzhou Laojiao International Development（Hong Kong）Co., Ltd. | 18,070,349.00 | |
| Luzhou Laojiao Tourism Culture Co., Ltd. | 7,634,894.90 | |
| Subtotal | 7,777,018,295.87 | 6,296,151,637.80 |
Including: investment income from long-term equity investments under the equity method:
| Item | Current Period | Previous Period |
| Huaxi Securities Co.,Ltd. | 43,897,917.31 | 169,638,351.75 |
| Luzhou Laojiao Postdoctoral Workstation Technology Innovation Co., Ltd. | 185,894.77 | |
| Sichuan Development Wine Investment Co., Ltd. | 162,805.88 | -1,127,623.31 |
| CTS Luzhou Laojiao Cultural Tourism Development Co., Ltd. | 877,224.54 | 3,182,839.12 |
| Subtotal | 45,123,842.50 | 171,693,567.56 |
Including: dividend income gained during the period of holding other equity instrument investment:
| Item | Current Period | Previous Period |
| North Chemical Industries Co.,Ltd. | 70,359.97 | 62,542.20 |
| Guotai Junan Securities Co.,Ltd. | 8,008,357.96 | 6,595,118.32 |
| Subtotal | 8,078,717.93 | 6,657,660.52 |
18. Supplementary information
18.1. Detailed statement of extraordinary gain and loss in the current period (+ forgain, - for loss)? Applicable □ N/A
Monetary Unit: CNY
| Item | Amount | Note |
| Gains or losses on disposal non-current assets | 19,805,093.70 | For details please see Note 7.46 |
| Government grants included into current profits and losses (other than government grants closely related to enterprise business and granted by quota or quantity according to national unified standard) | 34,931,161.52 | For details please see Note 7.42 and Note 7.47 |
| Gain or loss on fair-value changes on held-for-trading financial assets and | -2,585,156.72 | For details please see Note 7.43 |
| liabilities & income from disposal of held-for-trading financial assets and liabilities and available-for-sale financial assets (exclusive of the effective portion of hedges that arise in the Company’s ordinary course of business) | ||
| Other non-operating income and costs other than above items | 7,873,927.25 | For details please see Note 7.47 and Note 7.48 |
| Less: Impact from income tax | 14,413,895.31 | |
| Impact from non-controlling shareholders’ equity | 1,709,085.57 | |
| Total | 43,902,044.87 | -- |
Other items that meet the definition of non-recurring gain/loss:
□ Applicable ? N/A
No such cases for the reporting period.
Explain the reasons if the Company classifies any non-recurring gain/loss item mentioned in theExplanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securitiesto the Public-Non-Recurring Gains and Losses as a recurring gain/loss item.
□ Applicable ? N/A
18.2. 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 common shareholders of the Company | 33.32% | 7.06 | 7.06 |
| Net profits attributable to common shareholders of the Company before non-recurring gains and losses | 33.18% | 7.03 | 7.03 |
18.3. Differences between accounting data under domestic and overseasaccounting standards
18.3.1. Differences of net profit and net assets disclosed in financial reports prepared underinternational and Chinese accounting standards
□ Applicable ? N/A
18.3.2. Differences of net profit and net assets disclosed in financial reports prepared underoverseas and Chinese accounting standards
□ Applicable ? N/A