The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
2017 Annual Report
April 2018
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Section I Important Statements, Contents and Definitions
The Board of Directors, Board of Supervisors, directors, supervisors and senior management of Jiangsu
Yanghe Brewery Joint-Stock Co., Ltd. (hereinafter referred to as the Company) hereby guarantee that
the information presented in this report is free of any false records, misleading statements or material
omissions, and shall Individually and together be legally liable for truthfulness, accuracy and
completeness of its contents.
Mr. Wang Yao, responsible person for the Company, Mr. Cong Xuenian, responsible person for
accounting work and Mr. Yin Qiuming, responsible person for the Company’s financial affairs
(Accounting Supervisor) have warranted that the financial statements in this report are true and
complete.
All directors all attended the board meeting to deliberate this report.
The future plans and some other forward-looking statements mentioned in this report shall not be
considered as virtual promises of the Company to investors. Therefore investors are kindly reminded to
pay attention to possible investment risks.
In the annual report, the risks and countermeasures in the operation of the company are described in
detail (see 9. Outlook for the Future Development of the Company in Section IV Performance Discussion
and Analysis). Investors are kindly reminded to to pay attention to possible investment risks.
The profit distribution plan approved by the board of directors: based on 1,506,988,000 shares, a cash
dividend of RMB 25.50 will be distributed for every 10 existing shares held, 0 shares of Bonus shares
(Tax inclusive), and reserves would not be converted into share capital.
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Contents
Section I Important Statements, Contents and Definitions ........................ 2
Section II Company Profile and Key Financial Results .............................. 5
Section III Business Profile ......................................................................... 10
Section IV Performance Discussion and Analysis.................................... 13
Section V Significant Events ....................................................................... 29
Section VI Changes in shares and information about Shareholders ...... 68
Section VII Preference Shares .................................................................... 78
Section VIII Profiles of Directors, Members of Supervisory Committee,
Senior Management and Employees.......................................................... 79
Section IX Corporate Governance .............................................................. 91
Section X Information about Corporate Bond ......................................... 100
Section XI Financial Report ...................................................................... 101
Section XII Documents Available for Preference .................................... 232
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Definitions
Term Reference Definition
The company, this company, Yanghe Jiangsu Yanghe Brewery Joint-Stock Co.,
Refer to
Joint-Stock Ltd.
Yanghe Group, Controlling shareholder Refer to Jiangsu Yanghe Group Co.,Ltd.
The current year, In the reporting period Refer to 1 Jan. 2017 to 31 Dec. 2017
The report Refer to 2017 Annual Report
Yuan, Ten thousand yuan,A hundred million RMB 0.00, RMB 10,000,RMB
Refer to
yuan 10,000,000.00
The shareholders' general meeting, the
The shareholders' meeting, the board of
Refer to board of directors and the board of
directors, the board of supervisors
supervisors of the Company
Articles of incorporation of Jiangsu
Articles of incorporation Refer to
Yanghe Brewery Joint-Stock Co., Ltd.
SSE Refer to Shenzhen Stock Exchange
SRC,CSRC Refer to China Securities Regulatory Commission
Jiangsu Suya, Suyajincheng, Accounting
Refer to Jiangsu Suyajincheng CPA LLP
firm
Blue Alliance Refer to Jiangsu Blue Alliance Joint-Stock Co., Ltd.
Blue Sky Trade Refer to Suqian Blue Sky Trade Co.,Ltd.
Blue Ocean Trade Refer to Suqian Blue Ocean Trade Co.,Ltd.
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Section II Company Profile and Key Financial Results
1. Corporate Information
Stock abbreviation Yanghe Joint-Stock Stock code
Stock exchange where
Shenzhen Stock Exchange
the shares of the
Company are listed
Name of the Company
江苏洋河酒厂股份有限公司
in Chinese
Abbr. of the Company
洋河股份
name in Chinese
Name of the Company
Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
in English (if any)
Abbr. of the Company
Yanghe
name in English (if any)
Legal representative Wang Yao
Registered address No.118 Middle Avenue, Yanghe Town, Suqian City, Jiangsu Province, China
Postal code
Business address No.118 Middle Avenue, Yanghe Town, Suqian City, Jiangsu Province, China
Postal code
Company website http://www.chinayanghe.com
E-mail yanghe002304@vip.163.com
2. Contact us
Representative for Securities
Company Secretary
Affairs
Name Cong Xuenian Lu Hongzhen, Sun Dali
No. 18, Feng Hui Avenue, Yuhua Economic Development Zone,
Address
Nanjing
Tel. 025-52489218 025-52489218
Fax 025-52489218 025-52489218
E-mail yanghe002304@vip.163.com yanghe002304@vip.163.com
3. Information Disclosure and Place Where the Annual Report Is Kept
Newspaper designated by the Company Securities Times, Shanghai Securities Times, China Sec
for information disclosure urities Journal, Securities Daily
Website designated by the China
Securities Regulatory Commission
http://www. cninfo.com.cn
(CSRC) for the publication of the Annual
Report
Place where the Annual Report of the shareholder reading room, No.118 Middle Avenue, Yanghe
Company is kept Town, Suqian City, Jiangsu Province
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
4. Company Registration and Alteration
Organization code 9132000074557990XP
Changes in main business
activities since the Company was None
listed (if any)
Changes of controlling
shareholders of the Company (if None
any)
5. Other Relevant Information
Accounting firm engaged by the Company
Name of the accounting firm Jiangsu Suyajincheng CPA LLP
Business address of the 22-23/F., Central International Plaza, NO.105-6 Zhongshan North Road,
accounting firm Nanjing.
Name of accountants for
Xu Xuzhen, Kan Baoyong
writing signature
Sponsors engaged by the Company to continuously perform its supervisory function during the
Reporting Period
□ Applicable √ N/A
Financial advisor engaged by the Company to continuously perform its supervisory function during the
Reporting Period 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 due to
changes of accounting policies and correction of accounting errors
□ Yes √ No
YoY
2017 2016 Change
Operating revenues (RMB) 19,917,942,238.16 17,183,109,620.08 15.92% 16,052,444,099.28
Net profits attributable to
shareholders of the 6,627,169,959.16 5,827,168,870.88 13.73% 5,365,185,534.99
Company (RMB)
Net profits attributable to
shareholders of the
Company before 6,136,386,923.71 5,406,580,095.74 13.50% 4,915,933,247.98
non-recurring gains and
losses (RMB)
Net cash flows from
6,883,169,799.31 7,405,044,600.62 -7.05% 5,836,355,328.67
operating activities (RMB)
Basic earnings per share 4.40 3.87 13.70% 3.56
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
(RMB/share)
Diluted earnings per share
4.40 3.87 13.70% 3.56
(RMB/share)
Weighted average ROE 24.08% 24.01% 0.07% 25.37%
YoY
At the end of 2017 At the end of 2016 At the end of 2015
Change
Total assets (RMB) 43,258,140,702.38 38,804,062,249.63 11.48% 33,860,320,967.06
Net assets attributable to
shareholders of the 29,515,040,285.72 26,052,771,070.00 13.29% 22,937,096,378.95
Company (RMB)
7. Differences in Accounting Data under Domestic and Overseas Accounting
Standards
7.1. Differences in the net profits and net assets disclosed in the financial reports
prepared under the international and China accounting standards
□ Applicable √ N/A
No such differences for the Reporting Period.
7.2. Differences in the net profits and net assets disclosed in the financial reports
prepared under the overseas and China accounting standards
□ Applicable √ N/A
No such differences for the Reporting Period.
8. Key Financial Results by Quarter
Unit:RMB
Q1 Q2 Q3 Q4
Operating revenues 7,588,577,705.68 3,941,913,368.50 5,347,834,958.10 3,039,616,205.88
Net profits attributable to
shareholders of the 2,742,957,007.05 1,165,303,467.90 1,673,401,613.10 1,045,507,871.11
Company
Net profits attributable to
shareholders of the
Company before 2,659,071,451.71 1,055,711,871.31 1,590,617,648.83 830,985,951.86
non-recurring gains and
losses
Net cash flows from
1,170,374,437.00 -294,040,969.09 3,413,052,676.10 2,593,783,655.30
operating activities
Whether there are any material differences between the financial indicators above or their summations
and those which have been disclosed in quarterly or semi-annual reports
□ Yes √ No
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
9. Non-recurring Profits and Losses
√ Applicable □ N/A
Unit:RMB
Item 2017 2016 2015 Note
Profit or loss from disposal of
-8,598,844.11 -5,823,628.96 975,736.62
non-current assets
Government grants accounted for,
in the profit or loss for the current
period (except for the government
grants closely related to the
44,745,640.94 29,064,221.47 18,262,639.04
business of the Company and given
at a fixed amount or quantity in
accordance with the State's uniform
standards)
Except for effectively hedging
business related to normal business
operations of the company, profit or
Profit from
loss arising from the change in the
the disposal
fair value of held-for-trading
of
financial assets and liabilities, as 90,627,738.02 128,763,897.76 448,386,160.59
available-for-
well as investment profit or loss
sale financial
produced from the disposal of
assets
held-for-trading financial assets and
liabilities and available-for-sale
financial assets
Impairment provision reversal of the
accounts receivable on which the
300,000.00 165,859.73
impairment test is carried out
separately
Other non-operating income and
expenditure except 11,559,390.23 10,469,328.20 6,151,424.76
above-mentioned items
Other profit and loss items that
conform to the definition of 516,824,879.08 398,923,011.53 125,736,753.20
non-recurring gains and losses
Less: Corporate income tax 164,658,711.09 140,783,607.73 150,252,775.39
Minority interests (after tax) 17,057.62 190,306.86 7,651.81
Total 490,783,035.45 420,588,775.14 449,252,287.01 --
Explain the reasons if the Company classifies an item as a non-recurring profit/loss according to the
definition in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering
Their Securities to the Public-Non-Recurring Profits and Losses, or classifies any non-recurring
profit/loss item mentioned in the said explanatory announcement as a recurring profit/loss item.
□ Applicable √ N/A
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
No such cases for the Reporting Period.
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Section III Business Profile
1. Business Scope in the Reporting Period
Whether the Company needs to comply with the requirement disclosure of special industry.
No
The Company is mainly engaged in the production and sales of liquor. The production of liquor adopts
solid-state fermentation, mainly including starter-making, brewing, stocking, packaging and so on. The
sales of liquor mainly adopts two modes, namely distribution and retailing. During the reporting period,
the company's primary business and business mode had not changed. According to the Guidelines for
the Industry Classification of Listed Companies (2012 Revision) issued by CSRC, the Company belongs
to C15 Manufacturing industry of liquor, beverages and refined tea.
The company is the national large-scale liquor production enterprise. Among the enterprises in the liquor
industry, the Company is the only one that has two China' time-honored brands, the two famous Chinese
liquor, namely Yanghe and Shuanggou. and the Company has six China' well-known trademarks. The
leading products of the Company are a series of mellow liquor including Dream Blue, Yanghe Blue
Classic, Shuanggou Zhenbaofang, Yanghe Daqu, Shuanggou Daqu. They have high brand awareness
and reputation throughout the country.
During the reporting period, there was a new round of growth period in the liquor industry after the deep
adjustment. The consumption of liquor market is obviously upgraded. High-end and secondary high-end
Liquor showed the simultaneously rising of volume and price during the year. The concentration of the
industry has accelerated significantly, and the famous liquor enterprises developed better. According to
the disclosed liquor industry periodic report, the Company's revenue and profit ranked third in the liquor
industry.
2. Significant Changes in the Main Assets
2.1 .Significant Changes in the main assets
Reasons for any significant change
Main assets
A decrease of 90.58% YOY for equity investment was mainly due to
the reduction of capital of Dream Blue Haichuanhui (Shiyan) Trade
Equity assets
Investment Co., Ltd., forming the business combination not involving
enterprises under common control.
An increase of 32.73% for available-for sale financial assets was
mainly due to the increase of equity investment
Fixed assets
N/A
Intangible assets
N/A
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Construction in progress
A fall 56.96%YOY was mainly due to the carry-forward to fixed assets
that reach the using condition
2.2 .Main Assets Overseas
□ Applicable √ N/A
3. Analysis of Core Competitiveness
Whether the Company needs to comply with the requirement disclosure of special industry.
No
The Company has obvious advantages in natural environment, quality technology, brand influence,
sales network and so on. Those are the Company’s unique core competitiveness. The core
competitiveness of the company has not changed during the reporting period.
3.1 .Natural Environment Advantage
The Company is based in Suqian, the capital of Chinese liquor with 'three rivers, two lakes and one
wetland'. Suqian is one of the three famous wetland liquor producing areas in the world, enjoying equal
popularity with the Scotch Whisky producing area and the French Cognac producing area. It is the only
natural oxygen bar in Jiangsu province without acid rain. The long history and unique ecological
environment provide a good source of water, soil and air for production of liquor and spirits. Especially
the microorganism condition significantly benefits the production of liquor and spirits. The Yanghe
brewing originated in the Sui and Tang Dynasties, flourished in the Ming and Qing Dynasties. It had been
sold in Jianghuai area during the period of Yong Zheng of Qing Dynasty. It has a good reputation that
'Dainty taste derived from fortune spring and liquor ocean, which makes Yanghe rank first place in
Jianghuai area'. Shuanggou alongside Yanghe has been praised as the origin of Chinese natural liquor
by domestic and overseas experts due to the discovery of drunken ape fossils in Xiacaowan.
3.2 .Quality Advantage
Considering the diversification and individuation of consumption demand, the Company took the lead in
breaking the traditional classification of liquor flavor. The Company classifies the liquor by taste and put
emphasis on taste value. The Company strengthens the mellowness of liquor, puts forward the new style
of the mellow liquor quality, and deeply meets the core demand of the target consumers. It successfully
establishes the system framework of new production technology and mellowness mechanism of mellow
liquor catering to market consumption. In June 2008, 'Mellowness' was first written into the national
standard in China Protected Geographical Indication Product- Yanghe Daqu ( Standard No.
GB/T220406-2008).
3.3 .Talent Advantage
The Company has 26 National Liquor Tasting Committee members, 69 Provincial Liquor Tasting
Committee members and 1845 technicians. The Company also has a number of national and provincial
technical research and development platforms. The obvious advantage of technical talents provides
technical support for the continuous improvement of the quality. Dream Blue and Mellow Sujiu, the
representative products of mellow liquor, have won the national quality awards, such as National Best
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Quality Award, Liquor and Spirits Design Award and National Liquor and Spirits Sensory Quality Award.
In 2017, in the national liquor taster contest sponsored by China Alcoholic Drinks Association, the
national liquor taster Zhu Fanggang from the Company, standing out from more than 120 contestants,
ranked the first place in the contest. 3 prize-winners of the top 10 were from the Company. The Company
has the most prize-winners in the Top 10 enterprises. It highlights the strong talent advantage of the
Company again.
3.4 .Brand Advantage
The Company, as one of the eight old famous liquor enterprises, is the only one that has two China'
time-honored brands, the two famous Chinese liquor, namely Yanghe and Shuanggou and the Company
has six China' well-known trademarks, including Yanghe, Shuanggou, Yanghe Blue Classic,
Zhenbaofang, Dream Blue, Su. The Company whose brand worth $4.281 billion has been selected in
2017 Global Liquor Brand Value Top 50 and ranked third/second globally/in China by Brand Finance, a
world-famous brand value research organization. In 2017, the Company whose brand worth RMB
35.526 billion ranked the top 100 in China's 500 Most Valuable Brands released by World Brand Lab.
The Company also was listed in the Global Top 2000 World listed companies published by Forbes, the
world finance and economics magazine. Dream Blue was selected as one of the top 10 brands in CCTV
National Brand Plan.
3.5. Marketing Network Advantage
The Company has a sales and marketing team with the largest number of personnel, the latest concept
and the strongest executive force in the industry. The Company has cooperated with more than 8000
distributors, has more than 30 thousand ground promotion employees, and continues to enhance the
deep distribution mode. At present, the Company has the most powerful marketing network platform in
the Chinese liquor industry. It has penetrated into every county and city throughout the country. High
speed channel has been basically established, laying a solid foundation for market expansion and
category extension in the future. At the same time, as a traditional enterprise, the Company has also
insisted on exploring new marketing mode, and has made certain achievements in internet application
innovation.
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Section IV Performance Discussion and Analysis
1. Overview
In 2017, the Company made solid progress in all aspects of work according to laws and regulations such
as Corporation Law, Securities Law, Articles of Incorporation, Rules Governing Listing of Stocks on
Shenzhen Stock Exchange and Guidelines on standard operation of SME Board Listed Companies on
Shenzhen Stock Exchange and achieved sustainable and healthy development. During the year, the
Company achieved operating revenue of RMB 19.918 billion, up 15.92% from last year; and net profit
attributable to shareholders of the listed company of RMB 6.627 billion, a 13.73% year-on-year increase.
During the reporting period, the Company carried out main tasks and performance including the
following six aspects:
1.1 Focused on excellent execution and channel deepening to improve sales and marketing to a higher
level with indomitable struggle attitude. Firstly, marketing was significantly enhanced through laying a
solid foundation and storing potential energy. Core products’ prices were steadily raised through precise
positioning of marketing strategy and strictly execution and control. New breakthroughs of group
purchase and attracting investment were achieved through taking further selected policy. Grabbing
opportunity of consumption upgrade and accelerated volume-driven growth of Dream Blue improved
marketing performance to a higher level. Secondly, focusing on resource and telling good stories to
enhance brand building. “China Dream, Dream Blue” sounded the strongest voice at the New Year’s
Concert in the National Centre For The Performing Arts. Dream Blue obtained the naming right of Boao
Forum and held auctions for dealership of “Dream Blue Handcraft Class” successfully. “Blue Dream
Manual Class” was widely praised for “Excellent Quality and Creative Design”. High-end brand
connotation was manifested and brand influence was enhanced through a series of creative event
marketing such as “CCTV National Brand Experience Day— state-run media into Yanghe”, “Guyu
Forum” and “Open Toupai Liquor Cellar Festival”.
1.2 Focused on “Quality First”, striving for benchmarking and making liquor quality better with
painstaking craftsman’s attitude. Firstly, “Quality First” made liquor quality better. Focusing on the overall
requirements of “strengthening soft feeling and satisfaction” and the orientation of quality improvement,
base liquor quality and soft degree were steadily enhanced through optimizing process parameters
scientifically. Meanwhile, core product quality was overall upgraded through large-scale market research
and multiple inferior-quality product selection, in order to improve consumer experience further. Secondly,
deepening scientific research guided by technology. Among 5 categories 21 research projects, most
achieved good results though comprehensive advance and priority breakthrough at difficult points. The
Company positively participated in establishing industry standards and achieved the transformation from
“guiding the company” to “leading the industry”.
1.3 Focused on “San Xing jiu Hua”, solidifying foundation, enhancing efficiency and improving
management with unremitting effort. Firstly, focused on upper and lower linkage and exemplary role;
issued and implemented “Sujiu Basic Law”, which became the staff’s basic code of conduct. The
Company comprehensively optimized working standard and content related to employees. Execution
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
was further enhanced through deepening the movement and strengthening work-style construction.
Secondly, linking work at selected spots with that in entire areas and stimulating vitality comprehensively.
The Company insisted on the orientation of question and the core of rectifying and reforming, promoted
long-term management and achieved sharp decline of recurrence rate of all types of problems. The
Company pushed forward the progress of improvement projects to further improve operating efficiency
and performance. Thirdly, \"unity of knowledge and practice\" and highlighting initiative. The Company
pushed forward initiative management to a higher level through creating atmosphere, improving
mechanism and optimizing environment. Meanwhile, as deepening “San Xing jiu Hua”, the Company
achieved the steady improvement of basic management.
1.4 Focused on service upgrade, precise development and enhancing supply-guarantee capacity with
sustaining and high efficiency. Firstly, supply-guarantee capacity was enhanced during peak season.
Linkage between production and sales was improved efficiently. The Company devoted to “internal
enhancing efficiency and external synergy”. Detailed programme smoothed the pace and overall
arrangements. Accurate plan made inventory appropriate and smoothed production. Flexible scheduling
boosted production and enhancing safeguarding capacity. Paying attention to improvement decreased
cost, enhanced performance and smoothed production, which reduced cost of around RMB 10 million.
Secondly, deepening projects brought about good results and the effect of supply chain management
was significant. The Company carried out 7 research projects efficiently and positively pushed forward
the supply chain management improvement project. Overall optimization process and innovative
management mode improved the performance of economy and management.
1.5 Focused on concept interaction, multidimensional deepening and promoting culture construction with
using the lion sheep effect. Firstly, further expand cultural atmosphere. Employees’ pride and honor and
team cohesion and centripetal forces were enhanced though organizing festival art performance at
Spring Festival, Mid-autumn Festival, Lantern Festival and so on. Art performance told stories of
craftsmen, promoted enterprise spirit and showed employees’ style through the form of song, cross talk,
comedy sketches, reciting and so on. Secondly, further enhancing cultural diffusion. The Company
attracted more and more audiences and fans through online and offline activities based on “First Class”
cultural construction standard. During the sealed ceremony, the Company elucidated and diffused the
stories of craftsmen and their spirits and skills based on the theme of “Ingenuity, Dream Blue”. The sales
rose more than expected and public praise effect achieved the desired goal. Thirdly, further deepening
interaction culture. During the year, the Company helped 300 needy workers and succored 133 poor
families. Employees’ sense of gain was enhanced by health examination and gratuitous treatment.
Employees’ skill level was improved by skill competitions and business contests. The Company further
promoted the enterprise spirit and ingenuity through setting up typical examples of dedicated advanced
employees.
1.6 Focused on thinking leading, taking a giant leap, improving new business to a higher level with
development trend of creativity and Innovation. Firstly, focused on Innovation and steady upgrade of
Internet transformation. The Phase I of Overall Marketing Project was successfully online on a trial basis.
FFC and Eco-sphere Project over-fulfilled the annual sale quota. The Banquet Platform Project, internet
business research and IT projects were further deepened. These work brought about significant data
application effect, pushed forward the channel management optimization and lay a solid foundation for
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
accurate marketing control. The Company focused on “Guide Platform” and “Interactive Product”. These
two business modules successfully bred “WeChat Business Project Team” and “Customer Management
Project Team”. Secondly, steady improvement of capital operation with great concentration. The
Company built Maotai-flavor liquor production and management platform and invested in a wine
company whose comprehensive strength ranked No.2 in Chile. It laid a solid foundation for improving
wine quality and the investment maintained a good income level for three consecutive years.
2. Analysis of Main Business
2.1. Overview
Same with the contents presented in “1.Overview” of this section
2.2. Revenues and Costs
2.2.1. Breakdown of Operating Revenues
Unit：RMB
2017
As a
As a percentage
percentage YoY Change(%)
Amount Amount of operating
of operating
revenues (%)
revenues (%)
Total 19,917,942,238.16 100% 17,183,109,620.08 100% 15.92%
By business segment
Alcoholic
19,468,365,663.88 97.74% 16,782,694,581.25 97.67% 16.00%
beverage
Other 449,576,574.28 2.26% 400,415,038.83 2.33% 12.28%
By product
Liquor 19,183,149,960.51 96.31% 16,499,265,778.30 96.02% 16.27%
Wine 285,215,703.37 1.43% 283,428,802.95 1.65% 0.63%
Other 449,576,574.28 2.26% 400,415,038.83 2.33% 12.28%
By geographical segment
Jiangsu 10,630,640,220.89 53.37% 9,453,996,756.17 55.02% 12.45%
Outside
9,287,302,017.27 46.63% 7,729,112,863.91 44.98% 20.16%
Jiangsu
2.2.2. Business Segment, Products or Geographical Segments Contributing over
10% of the Operating Revenues or Profits
√ Applicable □ N/A
Whether the Company needs to comply with disclosure requirements of special industry
No
Unit：RMB
YoY change YoY change YoY change
Operating Gross profit
Operating costs of operating of operating of gross profit
Revenue margin
revenue (%) costs (%) margin (%)
By business segment
Alcoholic 19,468,365,663.8 6,285,763,095.9 67.71% 16.00% 7.87% 2.43%
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
beverage 8
By product
19,183,149,960.5 6,152,292,657.6
Liquor 67.93% 16.27% 7.78% 2.53%
1
By geographical segment
10,229,347,294.3 3,458,623,474.9
Jiangsu 66.19% 11.18% 9.15% 0.63%
9
Outside 2,827,139,621.0
9,239,018,369.49 69.40% 21.86% 6.34% 4.47%
Jiangsu
Under the circumstances that the statistical standards for the Company’s main business data adjusted in
the Reporting Period, the Company’s main business data in the current year is calculated based on
adjusted statistical standards at the end of the Reporting Period
□ Applicable √ N/A
2.2.3. Whether Revenue from Physical Sales is higher than Service Revenue
√ Yes □ No
By business YoY Change
Item Unit 2017
segment (%)
Sale volume ton 215,950.8 198,198.83 8.96%
Liquor Output volume ton 220,136.14 204,470.02 7.66%
Inventory ton 27,308.53 23,123.19 18.10%
Sale volume ton 5,212.34 5,158.93 1.04%
Wine Output volume ton 5,283.01 5,038.31 4.86%
Inventory ton 334.01 263.34 26.84%
Reason for any over 30% YoY movements in the data above
□ Applicable √ N/A
2.2.4. Execution of Significant Sales Contracts in the Reporting Period
□ Applicable √ N/A
2.2.5. Breakdown of Operating Costs
By business and product segment
Unit：RMB
2017
As a As a
By business YoY
Item percentage of percentage of
segment Amount Amount Change(%)
operating operating
costs(%) costs(%)
Alcoholic 6,285,763,095.9 5,827,106,186.4
94.08% 93.94% 7.87%
beverage 7
Unit：RMB
2017 2016 YoY
By product
Item As a As a Change(%
segment Amount Amount
percentage percentage of )
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
of operating operating
costs(%) costs(%)
Alcoholic Raw
4,243,329,762.51 63.51% 3,453,636,775.70 55.68% 22.87%
beverage materials
Alcoholic
Labor costs 541,519,432.79 8.11% 453,949,036.71 7.32% 19.29%
beverage
Alcoholic Fuels and
212,403,387.26 3.18% 164,151,899.51 2.65% 29.39%
beverage energy
Alcoholic manufacturin
263,652,646.09 3.95% 242,199,036.34 3.90% 8.86%
beverage g overhead
Consumptio
Alcoholic
n tax and 1,024,857,867.32 15.34% 1,513,169,438.22 24.39% -32.27%
beverage
surcharges
Note:
The 32.27% decrease in consumption tax and surcharges was mainly due to the change of tax paying
method from withholding and remitting tax by trustee to direct payment by the Company on September 1,
2017. In addition, the accounting method of consumption tax changed from the cost of production of
manufacturing consignment to the taxes and surcharges generated from producing and selling liquor by
the company.
2.2.6. Change in the Scope of the Consolidated Financial Statements for the
Reporting Period
√ Yes □ No
①The subsidiary corporations newly consolidated in the current year
Name Measure of gaining
ZYG TECHNOLOGY INVESTMENT LTD Merger of enterprises under different
controlling group
Guizhou Welcome Drink Stock Co.,Ltd Merger of enterprises under different
controlling group
Dream Blue Chuanhaihui (Shiyan) Trade Investment Merger of enterprises under different
Co.,Ltd. controlling group
Suqian Sujiu Logistics Co.,Ltd. Establishment
Jiangsu Blue Dream E-commerce Co.,Ltd. Establishment
Jiangsu Yanghe Weiketang Network Technology Establishment
Co.,Ltd.
YANGHE CHILE SPA Establishment
②The subsidiary corporations no longer consolidated in the current year
Name Reason
Taizhou Mengye Trading Co.,Ltd. Liquidation and cancellation
Siyang Yanghe Package Service Co.,Ltd. Liquidation and cancellation
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
2.2.7. Major Changes in the Business, Products or Services in the Reporting Period
□ Applicable √ N/A
2.2.8. Main Customers and Suppliers
Sales to major customers of the Company
Total sales to top five customers（RMB） 687,470,036.10
Total sales to top five customers as a
3.45%
percentage of the total sales for the year(%)
Total sales to related parties among top five
customers as a percentage of the total sales 0.00%
for the year(%)
Information on top five customers
Sales As a percentage of the total sales for
No. Customer
amount(RMB) the year(%)
1 Customer A 287,461,741.63 1.44%
2 Customer B 114,647,993.35 0.58%
3 Customer C 113,743,537.26 0.57%
4 Customer D 86,293,109.97 0.43%
5 Customer E 85,323,653.89 0.43%
Total -- 687,470,036.10 3.45%
Other information on major customers
□ Applicable √ N/A
Major suppliers of the Company
Total sales to top five suppliers（RMB） 1,268,441,014.78
Total sales to top five suppliers as a
22.98%
percentage of the total sales for the year(%)
Total sales to related parties among top five
suppliers as a percentage of the total sales 0.00%
for the year(%)
Information on top five suppliers
As a percentage of the total
No. Supplier Purchases(RMB)
purchase for the year(%)
1 Supplier A 449,255,761.82 8.14%
2 Supplier B 249,120,685.48 4.51%
3 Supplier C 203,713,954.46 3.69%
4 Supplier D 186,513,439.98 3.38%
5 Supplier E 179,837,173.04 3.26%
Total -- 1,268,441,014.78 22.98%
Other information on major suppliers
□ Applicable √ N/A
2.3. Expense
Unit：RMB
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
YoY Reason for any significant
2017
Change(%) change
Selling and
2,387,447,107.0 1,869,001,821.5
distribution 27.74%
5
expenses
General and
1,532,148,106.9 1,582,435,251.4
Administrative -3.18%
3
expenses
Increased interest income on
deposit and decreased note
Finance costs -33,912,331.47 -8,947,212.14 -279.03%
discount expense in the
current period
2.4. R&D input
√ Applicable □ N/A
In the Reporting Period, the Company continued to push forward technology research and development.
The Company achieved significant results from twenty-one research projects in five areas. Through
conducting a systematic research on healthy liquor in Health Liquor Theory System Project. Healthy
functional substances in Yanghe Liquor have been found and some good results in health experience
have been achieved. Beneficial Elements of Brewing By-product Project achieved deep utilization of
fermented grains and this project was successfully selected for key research and development plan of
Jiangsu Province. Solid State Fermentation of Fermented Grains Testing Project obtained industry
standard approval and achieved the transformation from “guiding the company” to “leading the industry”.
Meanwhile, focused on the overall requirements of “strengthening soft feeling and satisfaction” and the
orientation of quality improvement, base liquor quality and soft degree were steadily enhanced through
optimizing process parameters scientifically
Information about R&D input
2017 2016 YoY Change(%)
Number of R&D
348 355 -1.97%
personnel
R&D personnel as a
percentage in total 2.32% 2.38% -0.06%
employees
R&D input(RMB) 37,807,634.80 36,735,345.28 2.92%
R&D personnel as a
percentage in operating 0.19% 0.21% -0.02%
revenues
Capitalized R&D
12,062,387.60 10,339,739.27 16.66%
input(RMB)
Capitalized R&D input
percentage in total R&D 31.90% 28.15% 3.75%
input
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Reason for any significant YPY change in the percentage of the R&D input in the operating revenues
□ Applicable √ N/A
Reason for any sharp variation in the percentage of the capitalized R&D input and rationale
□ Applicable √ N/A
2.5. Cash Flows
Unit：RMB
Item 2017 2016 YoY Change(%)
Subtotal of cash inflows
24,139,022,765.44 22,990,557,358.58 5.00%
from operating activities
Subtotal of cash outflows
due to operating 17,255,852,966.13 15,585,512,757.96 10.72%
activities
Net cash flows from
6,883,169,799.31 7,405,044,600.62 -7.05%
operating activities
Subtotal of cash inflows
30,970,188,282.84 8,465,713,608.96 265.83%
from investing activities
Subtotal of cash outflows
35,131,210,561.81 14,430,046,744.26 143.46%
due to investing activities
Net cash flows from
-4,161,022,278.97 -5,964,333,135.30 30.23%
investing activities
Subtotal of cash outflows
3,417,116,090.61 3,697,079,125.01 -7.57%
due to financing activities
Net cash flows from
-3,417,116,090.61 -3,697,079,125.01 7.57%
financing activities
Net increase in cash and
-706,674,482.79 -2,251,169,180.44 68.61%
cash equivalent
Explanation of why the data above varied significantly
√ Applicable □ N/A
a. Mainly due to the increased cash received from returns on investment, cash inflows from investing
activities increased 265.83% from last year.
b. Mainly due to the increased cash paid for investments, cash outflows due to investing activities
increased 143.46% from last year.
c. Mainly due to more increased cash received from returns on investment than the increased cash paid
for investments, net cash flows from investing activities increased 30.23% from last year.
d. Mainly due to the positive net cash flows from investing activities and net cash flows from financing
activities as compared with last year, in cash and cash equivalent increased 68.61% from last year.
Explanation of main reasons leading to the material difference between net cash flows from operating
activities during the Reporting Period and net profit for the year
□ Applicable √ N/A
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
3. Analysis of Non-Core Business
√ Applicable □ N/A
Unit：RMB
As a percentage
Amount of total Formation reasons Sustainability
profits(%)
Holding and disposal of
Investment available-for-sale
623,953,064.97 7.05% No
income financial assets and
financial management
Preparation of
provision for goodwill
Impairment impairments, bad debt
22,867,778.12 0.26% No
losses of account receivables,
depreciation of
inventory
Mainly due to default
Non-operating
19,822,054.76 0.22% fine, indemnity income No
income
etc.
Non-operating Expenditures for
8,340,532.81 0.09% No
expense donations etc.
Other income 44,745,640.94 0.51% Government subsidy No
4.Assets and Liabilities
4.1 Material Change of Asset Items
Unit：RMB
As at the end of 2017 As at the end of 2016
As a Explanation
As a Change in
percentag about any
percentag percentage
Amount e of total Amount material
e of total (%)
assets change
assets (%)
(%)
Cash at bank
1,751,452,876.18 4.05% 2,456,627,358.97 6.33% -2.28%
and on hand
Accounts
8,485,382.83 0.02% 10,824,186.90 0.03% -0.01%
receivable
Inventories 12,861,503,434.11 29.73% 12,221,515,305.37 31.50% -1.77%
Long-term
equity 1,980,046.94 21,029,470.42 0.05% -0.05%
investments
Fixed assets 8,249,559,468.26 19.07% 7,970,035,119.29 20.54% -1.47%
Construction
234,431,457.83 0.54% 544,670,924.38 1.40% -0.86%
in progress
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Long-term
145,452.00 181,816.00
borrowings
4.2 Assets and liabilities measured at fair value
□ Applicable √ N/A
4.3 Restricted Asset Rights as of the end of this Reporting Period
There was letter of credit deposit of RMB 1.5 million in cash at bank and on hand. The right was
restricted.
5. Investment Made
5.1. Total Investment Made
√ Applicable □ N/A
Investment made in the Reporting Investment made in the prior
YoY Change
Period(RMB) year(RMB)
636,340,416.13 414,283,740.11 53.60%
5.2. Significant Equity Investment Made in the Reporting Period
□ Applicable √ N/A
5.3. Significant Non-equity Investment ongoing in the Reporting Period
□ Applicable √ N/A
5.4. Financial Assets at a Fair Value
□ Applicable √ N/A
5.5. Use of Funds Raised
□ Applicable √ N/A
No such cases in the Reporting Period
6. Sale of Major Assets and Equity Interests
6.1. Sale of Major Assets
□ Applicable √ N/A
No such cases in the Reporting Period
6.2. Sale of Major Equity Interests
□ Applicable √ N/A
7. Analysis of Major Subsidiaries
√ Applicable □ N/A
Main subsidiaries and joint companies with an over 10% influence on the Company’s net profit
Unit：RMB
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Company Company Business Registere Total Operating Operating
Net assets Net profit
name type scope d capital assets Revenue profit
Su Liquor Wholesaling
Trade and retailing
25,422,035, 5,041,358,0 19,357,324, 5,596,701,9 4,211,512,5
Group Subsidiary of 334,400,00
451.92 65.32 408.80 95.12 05.23
Limited by prepackaged 0.00
Share Ltd food
Jiangsu
Production
Shuanggou
and sales of 5,244,345,6 1,926,340,3 2,580,125,8 1,738,155,6 1,556,718,1
Distillery Subsidiary 110,000,00
liquor and 85.22 04.48 13.82 34.05 68.28
Stock 0.00
spirit
Co.,ltd.
Jiangsu
Yanghe Wholesaling
Liquor of 7,660,821,1 762,656,12 5,965,176,5 938,241,99 703,678,78
Subsidiary 10,000,000
Operation prepackaged 37.07 8.10 20.81 4.22 3.25
.00
Manageme food
nt Co.,Ltd
Jiangsu Wholesaling
Shuanggou and retailing
5,000,000. 435,914,61 405,141,57 1,754,610,9 523,104,04 392,049,94
Liquor Subsidiary of
00 5.18 6.73 76.83 1.91 8.52
Operation prepackaged
Co.,Ltd food
Acquisition and disposal of subsidiaries during the Reporting Period
√ Applicable □ N/A
How subsidiary was acquired or Impact on overall
Subsidiary name disposed during the Reporting operation and
Period results(RMB)
ZYG TECHNOLOGY INVESTMENT Merger of enterprises under
Tiny
LTD different controlling group
Merger of enterprises under
Guizhou Welcome Drink Stock Co.,Ltd Tiny
different controlling group
Dream Blue Chuanhaihui (Shiyan) Merger of enterprises under
Tiny
Trade Investment Co.,Ltd. different controlling group
Suqian Sujiu Logistics Co.,Ltd. Establishment Tiny
Jiangsu Blue Dream E-commerce
Establishment less
Co.,Ltd.
Jiangsu Yanghe Weiketang Network
Establishment Tiny
Technology Co.,Ltd.
YANGHE CHILE SPA Establishment Tiny
Taizhou Mengye Trading Co.,Ltd. Canceled Tiny
Siyang Yanghe Package Service
Canceled Tiny
Co.,Ltd.
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
8. Structured Bodies Controlled by the Company
□ Applicable √ N/A
9. Outlook for the Future Development of the Company
9.1. Analysis of Industry Situation
First, accelerated development and rapid growth of liquor industry profit. In 2017, the revenue and profit
of liquor industry continued to maintain the rapid growth benefited from mass consumption upgrade,
consumption structure shift and so on. According to statistic data published by National Bureau of
Statistics, during the year, liquor enterprise above designated size accumulatively achieved revenues of
RMB 565.442 billion, up 14.42% from last year and accumulatively achieved total profit before tax of
RMB 102.848 billion, up 35.79% from last year. In the future, liquor industry will benefit from
consumption upgrade dividend further with simultaneously rising of volume and price of high-end and
secondary high-end products and the rise of middle class.
Second, increased competition and gradual formation of liquor industry structure. In 2017, with the
further intensification of liquor market, the industry comprehensively entered the era of squeeze
competition. Famous liquor enterprises constantly strengthened the advantage of products, brand,
channel and market. In each product segments – high-end, secondary high-end, mid-/low-end and
small-packaged products, national brands or representative brands in different mainstream consumption
price ranges have preliminarily emerged. The liquor industry development structure and competitive
situation are being gradually formed and it will be further enhanced in the further market competition.
Third, divergence accelerated and strong players turn stronger. In 2017, the high-end and secondary
high-end products benefited from the rapid growth of market size. It showed the prosperity of
simultaneously rising of volume and price during the year. The growth rate of famous liquor enterprises
that had great capacity of product, brand and channel was significantly higher than industry average
level. With continued rising trend of merger and acquisition and industry concentration，famous liquor
enterprises that had great advantage in capital, management, brand, talent and channel will win out in
the liquor market competition and obtain more market share in the future.
9.2 The company's future development strategy and next operating plan
9.2.1 Further Development Strategy
In 2018, the Company continued to adhere to the strategy of “Wu Du Wu Mi”. The Company tried to be
the most dedicated, professional and far-sighted liquor enterprise that understands, distills and sells
liquor. The further development goal is to become a long-lasting leading enterprise across the life cycle
constantly.
9.2.2 2018 Operating Plan
In 2018, the general work vision is to develop better, comprehensively push forward “One Six Eight”
Strategy and strive for achieving more than 20% year-on-year growth of operating revenue.
The meaning of so-called “One Six Eight” Strategy as follows:
“One” refers to focusing on one growth target and striving for leading position in the industry.
“Six” refers to adhering to six principles: trend position principle, Internet plus principle, quality
breakthrough principle, high-end breakthrough principle, foundation reinforcement principle and bottom
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
line improving principle.
“Eight” refers to pushing forward eight projects:
First, marketing innovation project. The Company pushes forward brand strategy innovation, focuses on
content production and transmission mode, tells brand stories and improves brand value through big
event and public benefit marketing. The Company pushes forward product innovation and brand
upgrade of “Dream Blue” while constantly improving the product image of “Sea Blue” and “Sky Blue” and
releasing the potential of “Shuanggou”. The Company enhances marketing strategy innovation and
pushed forward the dynamic and precis control of marketing, thus creating powerful potential energy of
marketing.
Second, intelligent manufacturing project. The Company proactively pushes forward “integration of
informatization and industrialization” and establishes the intelligent brewery with brewing network as
principal line. The brewery has clear hierarchy including equipment, craft, control, management,
decision-making analysis and etc. It achieves integration of management and control and optimum
distribution of resources. The Company establishes new generation intelligent brewery that achieves
digitization, visualization, integration and intelligence, leading to intelligent production and
manufacturing.
Third, technology research and development project. The Company comprehensively pushes forward
the upgrade of six key projects including mellow quality, health examination,research topic selection and
application of results. The Company endeavour to complete the six projects including the meaning of
mellow health and database of microorganism, focuses on health mechanism analysis of mellow spirit
and leads the healthy development direction of mellow spirit.
Fourth, management optimization project. The Company focuses on quality management and control,
financial auditing and team building. The Company pushes forward making “San Xing jiu hua”, long-term
management, new mode of financial management and control, management auditing and automation of
mechanism practicable. The Company puts emphasis on high-level talent training, provides a
competitive platform for the promotion, fully designs a scientific assessment scheme and establishes
more flexible incentive mechanism of market-oriented employment.
Fifth, digital transformation project. The Company deepens the data business development, completes
the establishment of front-end business scenario of community and user program and further deeps
sustainable operation of micronet business. The Company focuses on application breakthrough and
achieves Information exchange and sharing, focuses on transformation breakthrough and achieves
preliminary digitization to support “Weiketang” ecosphere, focuses on system breakthrough and builds
user-centered operation strategy mechanism with multidimensional convergence of product, content,
scenario, community and data, focuses on program breakthrough and improves platform service ability
of overall marketing program, thus achieving digital transformation.
Sixth, capital strategy project. The Company focuses on consumption upgrade and Internet
transformation opportunity, pushes forward making core business, development business and financial
investment program practicable, carries out research and analysis on unmanned retail business mode
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
and current situation and development trend of new retailing, conducts a study on “big health” and
consumption upgrade, looks for new channel and operation mode, pushes forward resources sharing
between Yanghe and Interested parties, thus establishing a multidimensional ecosphere of symbiosis,
alternation and recycle.
Seventh, the Party building project. The Company takes the Thought on Socialism with Chinese
Characteristics for a New Era as a guide to action, studies spirit of the 19th CPC National Congress
thoroughly and firmly, comprehends the instructions and spirit of plenary session of provincial Party
committee and municipal Party committee, disaggregates and implements spirit of the meeting of the
Company’s party committee, trade union and youth league. The Company improves the Party building
project to higher level through pushing forward the Party building and talent organization based on today
and future.
Eighth, culture-shaping project. The Company enhances characteristic culture construction, pushes
forward Shuanggou sealed ceremony, ensures the improvement of reputation and marketing, improves
sense of ritual and experience of “Open Toupai Liquor Cellar Festival” and enhances the brand
reputation. The Company pushes forward making “Ten Thousand People Brand Plan” practicable, telling
good stories of Sujiu based on reputation and characteristic, cultivating multilevel fans and absorbing
more Sujiu fans. The Company creates the career development platform that helps employee growth
and promotion, thus achieving the common growth and development of employees and the Company.
9.2.3 Potential Risk Faced
First, uncertain risk of macro-economy. Nowadays, the external International economic development
environment is unpredictable. It may have some influence on sustainable medium-to-high speed growth
of China economy. Once there is unpredictable or uncontrolled change of domestic macroeconomic
environment or industrial policy, it brings some risks to the healthy development of liquor industry or
liquor enterprises.
Second, increased market competition risk. Nowadays, liquor market starts a new round of market
competition. Famous liquor enterprises recover rapid growth, optimize product structure, Intensify efforts
to attract investment, enhance channel construction and further deepen terminal, leading to more
tensive market competition. Meanwhile, liquor industry faces reconstruction of price, channel and
service system. It poses a serious challenge to enterprises whether they can adapt to the new
transformational change.
Third, risk of consumption concept change. Nowadays, in daily life, the preference of spirit consumers
decreases and there is a diversified development trend of liquor consumption as consumers pay more
attention to healthy life concept, promote moderate drinking and the age structure adjustment of liquor
consumers. The liquor industry and liquor enterprises need to face a realistic problem that how they
precisely grasp the consumption change and lead the future spirit consumption trend.
10. Visits Paid to the Company for Purposes of Research, Communication, Interview,
etc.
10.1 In the Reporting Period
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
√ Applicable □ N/A
Index to main inquiry
Date of visit Way of visit Type of visitor
information
Log Sheet of Investor Relations
Activities for 13 January 2017
13 January 2017 Field survey Institution
on www.cninfo.com.cn（No：
2017-001）
Log Sheet of Investor Relations
Activities for 1 March 2017 on
1 March 2017 Field survey Institution
www.cninfo.com.cn（No：
2017-002）
Log Sheet of Investor Relations
Activities for 7 March 2017 on
7 March 2017 Field survey Institution
www.cninfo.com.cn（No：
2017-003）
Log Sheet of Investor Relations
Activities for 10 March 2017 on
10 March 2017 Field survey Institution
www.cninfo.com.cn（No：
2017-004）
Log Sheet of Investor Relations
Telephone Activities for 16 March 2017 on
16 March 2017 Institution
communication www.cninfo.com.cn（No：
2017-005）
Log Sheet of Investor Relations
Telephone Activities for 2 May 2017 on
2 May 2017 Institution
communication www.cninfo.com.cn（No：
2017-006）
Log Sheet of Investor Relations
Activities for 5 May 2017 on
5 May 2017 Other Other
www.cninfo.com.cn（No：
2017-007）
Log Sheet of Investor Relations
Activities for 19 May 2017 on
19 May 2017 Field survey Other
www.cninfo.com.cn（No：
2017-008）
Log Sheet of Investor Relations
Activities for 29 August 2017 on
29 August 2017 Field survey Institution
www.cninfo.com.cn（No：
2017-009）
Log Sheet of Investor Relations
Telephone Activities for 29 August 2017 on
29 August 2017 Institution
communication www.cninfo.com.cn（No：
2017-010）
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Log Sheet of Investor Relations
Activities for 22 September
22 September 2017 Field survey Institution
2017 on www.cninfo.com.cn
（No：2017-011）
Log Sheet of Investor Relations
Activities for 7 November 2017
7 November 2017 Field survey Institution
on www.cninfo.com.cn（No：
2017-012）
Log Sheet of Investor Relations
Telephone Activities for 9 November 2017
9 November 2017 Institution
communication on www.cninfo.com.cn（No：
2017-013）
Log Sheet of Investor Relations
Activities for 25 December 2017
25 December 2017 Field survey Institution
on www.cninfo.com.cn（No：
2017-014）
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Section V Significant Events
1.Profit Distribution and Converting Capital Reserves into Share Capital
for Common Shareholders
Formulation, execution or adjustments of profit distribution policy, especially cash
dividend policy, for common shareholders in the Reporting Period
□ Applicable √ N/A
On May 19, 2017, the Company held 2016 annual shareholders' meeting, and the plan for
profit distribution for 2016 was deliberated and approved by this meeting. Plan for profit
distribution for 2016: Based on its total of 1506.988 million shares as at 31 December
2016, the company distributed a cash dividend of RMB 21 (tax inclusive) per 10 shares to
all shareholders. The total cash dividend is RMB 3164.6748 million (including tax). The
book closure day was 15 June 2016 and the ex-right & ex-dividend day 16 June 2016.
A special statement of the policy of cash dividends
Whether it meets the requirements of the articles of
incorporation or the resolution of shareholders' Yes
meeting.
Whether the standard and proportion of dividends
Yes
are clear.
Whether the relevant decision-making process and
Yes
systems are complete.
Whether independent directors perform their duties
Yes
and play their due role.
Whether the minority shareholders have the
opportunity to fully express their opinions and
Yes
appeals and whether their legitimate rights and
interests have been adequately protected.
Whether the conditions and procedures are
The company's cash dividend policy
compliant and transparent it the cash dividend
has not been adjusted or changed.
policy is adjusted or changed.
Plans (or preliminary plans) for profit distribution and converting capital reserves into
share capital for common shareholders for the recent three years (including the Reporting
Period) are as following:
Preliminary plan for profit distribution for 2017: Based on its total of 1506.988 million
shares as at 31 December 2017, the company is to distribute a cash dividend of RMB
25.5 (tax inclusive) per 10 shares to all shareholders. The total cash dividend is RMB
3842.8194 million (including tax).
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Plan for profit distribution for 2016: Based on its total of 1506.988 million shares as at 31
December 2016, the company distributed a cash dividend of RMB 21 (tax inclusive) per
10 shares to all shareholders. The total cash dividend is RMB 3164.6748 million (including
tax). The book closure day was 15 June 2016 and the ex-right & ex-dividend day was 16
June 2016.
Plan for profit distribution for 2015: Based on its total of 1506.988 million shares as at 31
December 2015, the company distributed a cash dividend of RMB 18 (tax inclusive) per
10 shares to all shareholders. The total cash dividend is RMB 2712.584 million (including
tax). The book closure day was 16 June 2015 and the ex-right & ex-dividend day was 17
June 2015.
Cash dividend distribution over the recent three years (including the Reporting Period)
Unit: RMB
Net profit attributable Ratio to net profit
to common attributable to common Cash Ratio of cash
Cash dividends
shareholders in the shareholders in the dividends in dividends in
Year (tax included)
consolidated consolidated statement other forms other forms
statement in the year in the year
2017 3,842,819,400.00 6,627,169,959.16 57.99% 0.00 0.00%
2016 3,164,674,800.00 5,827,168,870.88 54.31% 0.00 0.00%
2015 2,712,578,400.00 5,365,185,534.99 50.56% 0.00 0.00%
The Company made a profit in the Reporting Period and the profit distributed to common
shareholders of the Company (without subsidiaries) was positive, but it did not put forward
a preliminary plan for cash dividend distribution to its common shareholders
□ Applicable √ N/A
2.Preliminary Plan for Profit Distribution and Converting Capital Reserves
into Share Capital for the Reporting Period
√ Applicable □ N/A
Bonus shares for every 10 shares
(share)
Dividend for every 10 shares (RMB) (tax
included) 25.50
Additional shares converted from capital
reserves for every 10 shares (share) 0
Total shares as the basis for the
preliminary plan for profit distribution 1,506,988,000
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
(share)
Total cash dividends (RMB) (tax
included)
3,842,819,400.00
Distributable profit (RMB)
18,737,460,273.68
Percentage of cash dividends in the
total distributed profit (%)
100%
Cash dividend policy
The development stage of the company is mature and the Company has no major fund
expenditure arrangement. When the profit distribution is carried out, the proportion of
cash dividends in this profit distribution should at least reach 80%.
Details about the preliminary plan for profit distribution and converting capital reserves
into share capital
As audited by Jiangsu Suyajincheng CPA LLP, the Company realized a net profit of RMB
5,686,271,702.98 for 2017 (consolidated statements attributable to shareholders of the
parent company net profit of RMB 6,627,169,959.16). It provided RMB0 as statutory
surplus reserves. Plus undistributed profit at the beginning of the year of
RMB16,215,863,370.70 and minus the distributed profit of RMB3,164,674,800, the actual
distributable profit would be RMB18,737,460,273.68. In line with both the long-term
development needs of the company and the principle of giving appropriate returns to
shareholders, based on its total of 150,6.99 million shares as at 31 December 2017, the
company is to distribute a cash dividend of RMB 25.5 (tax inclusive) per 10 shares to all
shareholders. The total cash dividend is RMB 3,842,819,400 (including tax). The
remaining undistributed profit shall be carried forward for future distribution.
3.Performance of Undertakings
3.1. Undertakings of the Company's Actual Controller, Shareholders,
Related Parties and Acquirer, as well as the Company and Other
Commitment Makers Fulfilled in the Reporting Period or ongoing at the
Period-end
√ Applicable □ N/A
Particular
Type of s on the
Undertakin Details of
Undertaking undertakin Undertaking date Term performa
g giver undertaking
g nce
Stock reform
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
undertaking
Undertaking
made in the
report of
acquisition or
change of
interest
Undertaking
made in the
reorganization
of assets
1. The commitment
to avoid competition
in the industry:
(1) At present, the
company has not
engaged in the
business of
competing with the
joint stock company.
The company is
committed to
maintaining the
existing business
There
Interbank structure and does
has been
competitio not directly or
Undertakings Jiangsu no
n, related indirectly operate
given in time Yanghe Long-standi violation
transaction any business that 2009.08.26
of IPO or Group ng of this
s and competes with the
refinancing Co.,Ltd. undertaki
capital actual operation of
ng.
occupation the joint stock
company or may
constitute a
competition, or a
subsidiary or
subsidiary enterprise
that is engaged in
the above business.
(2) If the company
violates the above
commitments, the
joint stock company
has the right to
require the company
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
to immediately
terminate its
business
competition and to
compensate for the
economic losses
caused to the joint
stock company. At
the same time, the
company should pay
liquidated damages
to the joint stock
company for RMB
10 million.
(3) The company
has committed itself
to the legitimate
rights and interests
of the shareholders
of joint-stock
companies, other
shareholders of
joint-stock
companies and the
creditors of
joint-stock
companies without
the use of their
holding shareholder
status in the joint
stock company.
(4) This undertaking
shall enter into force
on the date of
signing, and shall
not be revoked
without the consent
of the stock
company.
2. The commitment
to reduce the related
transactions: the
company will strictly
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
follow the
requirements of the
relevant laws as
Corporation Law,
Securities Law and
Code of Corporate
Governance for
Listed Companies,
and further reduce
and strictly
standardize the
various related
transactions
between the
company and the
joint stock
companies, so as to
ensure that the
controlling
shareholders and
the actual control are
not used. The status
of making a person
damages the
interests of the
shareholders of a
joint stock company
and other
shareholders and
does not occur in the
case of new share
holding companies.
After a year of Stock This
Suqian trading in stock undertaki
Blue Sky exchange, the ng has
Trade shares of the issuer expired
will not exceed 25% and there
Co.,Ltd. ，
Share of the total number 2009.08.26- has been
2009.08.26
Suqian reduction of shares held by the 2017.11.23 no
Blue issuer, and the violation
Ocean issuer's shares and of this
Trade changes in the undertaki
Co.,Ltd. shares are declared ng.
to the issuer in a
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
timely manner.
The commitment to
avoid competition in
the industry:
1. The company is
mainly engaged in
investment
management and
does not operate the
same or associated
business with the
issuer. The company
will not engage in
the business of the
same or associated
business with the
issuer, without
prejudice to the This
Suqian
interests of the undertaki
Blue Sky
Interbank issuer, nor from the ng has
Trade
competitio issuer for unfair expired
Co.,Ltd. ， n, related interests. and there
2009.08.26-
transaction 2. If the company 2009.08.26 has been
Suqian 2017.11.23
s and violates the above no
Blue
capital commitment, the violation
Ocean
occupation issuer has the right of this
Trade
to claim undertaki
Co.,Ltd.
compensation for the ng.
economic loss
resulting from the
issuer, and to pay a
liquidated penalty of
RMB 5 million, and
the right to purchase
the business item at
the market price of
the business item or
the establishment of
a cost price (which is
the principle of the
lowest value).3. This
undertaking shall
enter into force on
the date of signing,
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
and shall not be
revoked without the
consent of the
issuer.
After a year of
trading in the stock
exchange, the
shares of the issuer There
Jiangsu will not exceed 25% has been
Blue of the total number no
Share Long-standi
Alliance of shares held by the 2017.11.23 violation
reduction ng
Joint-Stock issuer, and the of this
Co., Ltd. issuer's shares and undertaki
changes in the ng.
shares are declared
to the issuer in a
timely manner.
The commitment to
avoid competition in
the industry:
1. The company is
mainly engaged in
investment
management and
does not operate the
same or associated
business with the
Interbank issuer. The company There
Jiangsu competitio will not engage in has been
Blue n, related the business of the no
Long-standi
Alliance transaction same or associated 2017.11.23 violation
ng
Joint-Stock s and business with the of this
Co., Ltd. capital issuer, without undertaki
occupation prejudice to the ng.
interests of the
issuer, nor from the
issuer for unfair
interests.
2. If the company
violates the above
commitment, the
issuer has the right
to claim
compensation for the
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
economic loss
resulting from the
issuer, and to pay a
liquidated penalty of
RMB 5 million, and
the right to purchase
the business item at
the market price of
the business item or
the establishment of
a cost price (which is
the principle of the
lowest value).
3. This undertaking
shall enter into force
on the date of
signing, and shall
not be revoked
without the consent
of the issuer.
Shareholders of
Blue Sky Trade,as
directors,
supervisors and
senior managers,
made the
commitment:
This
1. During the tenure
undertaki
of the issuer, Blue
ng has
Sky Trade equity
expired
Zhu transferred annually
Other and there
Guangshe shall not exceed 2009.08.26-
undertakin 2009.08.26 has been
ng, Cong 25% of the total 2017.11.23
g no
Xuenian number of shares
violation
held by Blue Sky
of this
Trade。 undertaki
ng.
2. If I leave the
issuer, I will not
transfer the shares
of Blue Sky Trade
that I have held
within six months
after my departure.
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
3. If I leave from the
issuer, the number of
Blue Sky transferred
shares trade within
twelve months after
six months of
departure does not
exceed 50% of the
total share of Blue
Sky Trade.
Shareholders of
Blue Ocean
Trade,as directors,
supervisors and
senior managers,
made the
commitment:
1. During the tenure
of the issuer, Blue
Ocean Trade equity
transferred annually
shall not exceed
This
25% of the total
undertaki
number of shares
ng has
held by .Blue Ocean
expired
Trade
Zhong Other and there
2. If I leave the 2009.08.26-
Yuye, Feng undertakin 2009.08.26 has been
issuer, I will not 2017.11.23
Pantai g no
transfer the shares
violation
of Blue Ocean Trade
of this
that I have held
undertaki
within six months
ng.
after my departure.
3. If I leave from the
issuer, the number of
Blue Ocean
transferred shares
trade within twelve
months after six
months of departure
does not exceed
50% of the total
share of Blue Ocean
Trade.
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Shareholders of
Blue Alliance, as
directors,
supervisors and
senior managers,
made the
commitment:
1. During the tenure
of the issuer, Blue
Alliance equity
transferred annually
shall not exceed
25% of the total
number of shares
There
held by Blue
Zhong has been
Alliance.
Yuye, Feng Other no
2. If I leave the Long-standi
Pantai, undertakin 2017.11.23 violation
issuer, I will not ng
Cong g of this
transfer the shares
Xuenian undertaki
of Blue Alliance that I
ng.
have held within six
months after my
departure.
3. If I leave from the
issuer, the number of
Blue Alliance
transferred shares
trade within twelve
months after six
months of departure
does not exceed
50% of the total
share of Blue
Alliance.
Equity
incentive
commitment
Jiangsu 1. From January 15, There
Yanghe 2016 to January 15, has been
Equity Group 2017, it does not no
Share 2016.01.15-
incentive Co.,Ltd., reduce the shares 2016. 01.15 violation
reduction 2017.01.15
undertaking Zhong held by any of this
Yuye, Feng company in any way. undertaki
Pantai, 2. If the above ng.
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Cong undertakings are
Xuenian,Zh violated, all
ou Xinhu, proceeds from the
Zheng reduction of shares
Bujun shall be owned by
the company.
Whether the
undertaking is
fulfilled on Yes
time
Specific
reasons for
failing to fulfill
any
N/A
undertaking
and plan for
the next step
3.2. Where any Earnings Forecast was Made for any of the Company's
Assets or Projects and the Reporting Period is still within the Forecast
Period, the Company Shall Explain Whether the Performance of the
Asset or Project Reaches the Earnings Forecast and Why
□ Applicable √ N/A
4.Occupation of the Company's Capital by the Controlling Shareholder or
Its Related Parties for Non-Operating Purposes
□ Applicable √ N/A
No such cases in the Reporting Period.
5.Explanation of the Board of Directors, the Supervisory Committee and
Independent Directors (If Any) Regarding the \"Non-standard Audit
Opinion\" for the Reporting Period
□ Applicable √ N/A
6.Reason for Changes in Accounting Policies, Accounting Estimates and
Accounting Methods as Compared to the Financial Report for the Prior
Year
√ Applicable □ N/A
In 2017, the Ministry of Finance issued The Accounting Standards for Enterprises No.42-
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Non-current assets held for sale, disposal group and termination of operation. It has been
implemented since 28 May 2017. The non-current assets, disposal group and termination
of operation existing in the implement date are treated by prospective application.
In 2017, the Ministry of Finance revised The Accounting Standards for Enterprises No. 16-
Government Grants. Since 12 June 2017, the government grants existing in 1 January
have been treated by prospective application. The recent government grants from 1
January 2017 to the implementation date are adjusted according to the revised standard.
In 2017, the Ministry of Finance issued Notice of the Ministry of Finance on Revising the
format of general corporate financial statements. It revises the formation of general
corporate financial statements, which is applicable for financial statements of fiscal year
2017 and subsequent periods.
The above changes in significant accounting policies were approved by sixth session of
the third meeting of the board of directors. The adjustment was made by the Company
based on requirements of the above standards and notices. The impact of items and
amounts in financial report stated as follows:
Content and reason of Name of affected Affected amount Affected amount in
changes in accounting report items in the current the same period last
policies period year
（1）Since 1 January 2017, Non-operating -44,745,640.94 N/A
the government grants income
related to the Company’s Other income 44,745,640.94
daily activities has been
adjusted from “Non-operating
income” to “Other income”.
Comparative data was not
adjusted.
（2） Disposal gains and Non-operating -43,724.37 -727,962.06
losses from assets originally income
listed in “Non-operating Non-operating -8,642,568.48 -6,551,591.02
income” and “Non-operating expenses
expenses” were reclassified Gains from -8,598,844.11 -5,823,628.96
to the new item “Gains from disposable assets
disposable assets” in the
income statement.
Comparative data was
adjusted.
7.Reason for Retrospective Restatement of Major Accounting Errors
during the Reporting Period
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
□ Applicable √ N/A
No such cases in the Reporting Period.
8.Reason for Changes in Scope of the Consolidated Financial
Statements as Compared to the Financial Report for the Prior Year
√ Applicable □ N/A
Newly incorporated subsidiaries in this period
Name Acquisition mode
ZYG TECHNOLOGY INVESTMENT Merger of enterprises under different controlling
LTD group
Guizhou Welcome Drink Stock Co.,Ltd Merger of enterprises under different controlling
group
Dream Blue Chuanhaihui (Shiyan) Trade Merger of enterprises under different controlling
Investment Co.,Ltd. group
Suqian Sujiu Logistics Co.,Ltd. Establishment
Jiangsu Blue Dream E-commerce Establishment
Co.,Ltd.
Jiangsu Yanghe Weiketang Network Establishment
Technology Co.,Ltd.
YANGHE CHILE SPA Establishment
Subsidiaries that is no longer included in the consolidated range from this period
Name Reasons for not incorporating the scope of the merger
Taizhou Mengye Trading Co.,Ltd. Liquidation and cancellation
Siyang Yanghe Package Service Liquidation and cancellation
Co.,Ltd.
9.Engagement and Disengagement of CPAs Firm
CPAs firm at present
Name of the domestic CPAs firm
Jiangsu Suyajincheng CPA LLP
The Company’s payment for the domestic
CPAs firm (RMB’0,000)
Consecutive years of the audit service
provided by the domestic CPAs firm 11
Names of the certified public accountants
from the domestic CPAs firm Xu Xuzhen, Kan Baoyong
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Consecutive years of the audit service
Xu Xuzhen(4years), Kan Baoyong(1 year)
provided by the certified public accountants
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/A
The Company appointed Jiangsu Suyajincheng CPA LLP as the internal control auditor for
this year. The remuneration in total paid by the Company to Jiangsu Suyajincheng CPA
LLP for its audit of the Company’s financial report and internal control conditions for 2017
was RMB530 thousand.
10.Possibility of Listing Suspension and Termination after Disclosure of
this Annual Report
□ Applicable √ N/A
11.Bankruptcy and Reorganization
□ Applicable √ N/A
No such cases in the Reporting Period.
12.Material Litigation and Arbitration
□ Applicable √ N/A
No such cases in the Reporting Period.
13.Punishments and Rectifications
□ Applicable √ N/A
No such cases in the Reporting Period.
14.Credit Conditions of the Company as well as Its Controlling
Shareholder and Actual Controller
□ Applicable √ N/A
15.Implementation of any Equity Incentive Plan, Employee Stock
Ownership Plan or Other Incentive Measures for Employees
□ Applicable √ N/A
16. Significant Related-Party Transactions
16.1. Related-party Transactions Arising from Routine Operation
□ Applicable √ N/A
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
No such cases in the Reporting Period.
16.2. Related-party Transactions Regarding Purchase or Sales of Assets
or Equity Interests
□ Applicable √ N/A
No such cases in the Reporting Period.
16.3. Related-party Transitions Arising from Joint Investments in
External Parties
□ Applicable √ N/A
No such cases in the Reporting Period.
16.4. Credits and Liabilities with Related Parties
□ Applicable √ N/A
No such cases in the Reporting Period.
16.5. Other Significant Related-party Transactions
□ Applicable √ N/A
No such cases in the Reporting Period.
17. Significant Contracts and Their Execution
17.1. Trusteeship, Contracting and Leasing
17.1.1. Trusteeship
□ Applicable √ N/A
No such cases in the Reporting Period.
17.1.2. Contracting
□ Applicable √ N/A
No such cases in the Reporting Period.
17.1.3. Leasing
□ Applicable √ N/A
No such cases in the Reporting Period.
17.2. Major Guarantees
□ Applicable √ N/A
No such cases in the Reporting Period.
17.3. Entrusted Cash Asset Management
17.3.1. Entrust assets management
√ Applicable □ N/A
Entrust assets in the Reporting Period.
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Unit： RMB0, 000
Overdue
Source of Undue amountat
Product type Amount outstanding
entrusted assets the end of 2017
amount
Bank finance Equity Fund 717,588.63 717,588.63
Trust finance Equity Fund 677,466 677,466
Broker finance Equity Fund 60,000 60,000
Other Equity Fund 96,000 35,000
Total 1,551,054.63 1,490,054.63
Information about significant amount of individual entrust finance or high-risk entrust
finance with principle unguranteed and poor liquidity.
√ Applicable □ N/A
Unit： RMB0,000
Whet
Actu her
Amo
al Whet there
Me Ref pros Actu unt Sum
princi her it will
tho ere pecti al reser mary
pal go be
Com Ter d nce ve profit ved and
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Trus men min of d earni & for refer
e of Produc Amo ce of Funds unt gh st
tee cem atio Re ann ngs loss impa ece
trust t type unt fundi allocation reco statu finan
type ent n mu uali （if for irme （if
ee ng vere tory ce
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perio es the
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Subscribi
ng trust
plan or
transferri
Avic ng trust
Trust-T usufruct
ainxin 28 held by
Avic
No.98 Equit April beneficia
Trust Trus 10,0 April Ca 7.5 1,50 750.
Collecti y 201 ry under 750 0 Yes Yes
Co.,L t 00 2016 sh 0% 0
ve Fund 8 the trust
td.
Fund plan
Trust managed
Plan by trust
company
Idle fund
is
operated
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
in the
form of
deposit
in bank
Subscribi
ng
insuranc
e funds
with 1%
of
subscripti
on of
cash
asset,
Xingye
Xing fixed-inc
Trust
ye ome
Yuan
Inter 7 7 assets,b
ding
natio Equit Nove May anking
Trus No.3 20,0 Ca 5.3 1,46 930. 930.
nal y mber 201 credit 0 Yes Yes
t Colle 00 sh 0% 8.96 44 44
Fiduc Fund 2016 8 assets.tr
ctive
iary ansferred
Fund
Co.,L asset in
Trust
td. register
Plan
transfer
center,pr
oduct
with high
liquidity
and
standardi
zed
underlyin
g assets.
Wester Used for
nTrust- Zhengzh
Evergr ou
West ande 15 Evergran
Aug
ern Guang Equit Nove de
Trus 10,0 ust Ca 7.5 1,31 750.
Trust he y mber Feicuihu 750 0 Yes Yes
t 00 201 sh 0% 0.96
Co.,L Receiv Fund 2016 ating
td. able Project
Claim develop
Collecti ment and
ve construct
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Fund ion
Trust
Plan
Taiyuan
New
Wester Southern
nTrust- City Real
Sunshi Estate
ne City Develop
Jade ment
West Beauty 10 Co.,Ltd.
Dec
ern Bay Equit Marc will use
Trus 15,0 emb Ca 7.0 1,84 822. 822.
Trust Receiv y h the fund 0 Yes Yes
t 00 er sh 0% 1.1 74 74
Co.,L able Fund 2017 for
td. Claim develop
Collecti ment and
ve construct
Fund ion
Trust Emerald
Plan Bay
Project
Phrase II
Used for
offering
working
Pingan capital
Fortun loans to
Ping e-Hong 10 Jiangsu
Mar
an taiNo.1 Equit Octo Jintan
Trus 7,00 ch Ca 6.0
Trust 89Colle y ber Chenlin 840 00 0 Yes Yes
t 0 201 sh 0%
Co.,L ctive Fund 2017 Economi
td. Fund c
Trust Technolo
Plan gy
Develop
ment
Co.,Ltd.
Wester Used for
West nTrust- 1 capital
ern HNA Equit July increase
Trus 20,0 April Ca 7.0 1,74 1,00 1,00
Trust Industr y 201 of HNA 0 Yes Yes
t 00 2017 sh 0% 9.04 8.77 8.77
Co.,L y No.3 Fund 8 Industry
td. Collecti Group
ve and
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Fund working
Trust capital
Plan supplem
ent of
HNA
Industry
Used for
subscribi
ng
insuranc
e funds
with 1%
of
subscripti
on of
Xingye cash
Xing
Trust asset,
ye
Yuan fixed-inc
Inter
ding 5 ome
natio Equit July
Trus No.3 10,0 April assets,b Ca 5.2 528. 261. 261.
nal y 201 0 Yes Yes
t Colle 00 2017 anking sh 5% 13 42 42
Fiduc Fund
ctive credit
iary
Fund assets.tr
Co.,L
Trust ansferred
td.
Plan asset in
register
transfer
center,pr
oduct
with high
liquidity
and
underlyin
g assets
Wester
nTrust-
Used for
HNA
West capital
Invest 9 Aug
ern Equit increase
Trus ment 6,00 May ust Ca 6.9 518.
Trust y of HNA 00 0 Yes Yes
t No.3 0 2017 201 sh 0% 35
Co.,L Fund Investme
Collecti
td. nt
ve
Holdings
Fund
Trust
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Plan
Used for
the
fellow-up
develop
ment and
construct
ion of
Road
King
Lanshanl
Shan an
ghai Shang Project
Inter hai Phase V
natio Xintuo- 12 and
nal Road Equit May Phase
Trus 10,0 May Ca 5.9 1,18
Xintu King y 201 VI. The 00 0 Yes Yes
t 00 2017 sh 0% 0
o Credito Fund 9 idle
Trad rs' funds
e Invest can be
Com ment used to
pany invest
deposit
in bank,
Cash
Fengli
and
Ruby
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ay
Product
Zhongr Used for
ong subscribi
Zhon
Trust－ ng
gron
Guaran 23 financial
g
tee-ass 23 Jun investme
Inter Equit
Trus istant 15,0 June e nt Ca 7.4 2,22
natio y 00 0 Yes Yes
t Fund 00 2017 201 products sh 0% 0
nal Fund
No.190 9 or other
Trust
Collecti projects
Co.,L
ve permitted
td.
Fund by the
Trust laws and
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Plan regulatio
ns such
as
deposit
in bank,
money
market
fund and
corporate
bonds
RMB
12.8282
million
was used
for
gaining
49%
equity of
Dasheng
Group
Zhongr
Shandon
ong
Zhon g
Trust-T
gron Property
he
g Co., Ltd.
Glory 30 Jun
Inter Equit The
Trus of the 10,0 June e Ca 7.6 1,52
natio y surplus 00 0 Yes Yes
t World 00 2017 201 sh 0% 0
nal Fund funds
No.26C
Trust deducted
ollectiv
Co.,L related
e Fund
td. expense
Trust
s and
Plan
credit
insuranc
e fund
flowed
into
project
company
as a
sharehol
der loan
West Wester Equit 5 5 Capital
Trus 10,0 Ca 7.4 1,66 342. 342.
ern nTrust- y July Oct increase 0 Yes Yes
t 00 sh 0% 6.52 63 63
Trust Evergr Fund 2017 ober for
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Co.,L ande 201 Evergran
td. Enping 9 de Real
Equity Estate
Invest Group
ment Enping
Collecti Co.,Ltd.
ve and
Fund construct
Trust ion of
Plan Evergran
de Spring
Cpaital
Residenti
al Project
Phase III
and
Phase IV
Deposit
in bank,
Bond
reverse
repurcha
se,
money
Avic
market
Trust.A
fund,
pocaly
30 bond
Avic pse Aug
Equit Augu fund and
Trust Trus No.556 13,0 ust Ca 7.0 907.
y st other 00 0 Yes Yes
Co.,L t Tianch 00 201 sh 0% 51
Fund 2017 fixed-inc
td. engjufu
ome
Invest
products
ment
with high
Fund
security
and
permitted
by the
laws and
regulatio
ns
West Wester 11 11 Used for
Equit
ern Trus Trust 12,0 Sept Sep develop Ca 6.8 1,63
y 00 0 Yes Yes
Trust t -TAN 00 emb tem ment and sh 0% 2
Fund
Co.,L DE er ber construct
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
td. (Pha 2017 201 ion of
se V) 9 Qujiangxi
Colle angdu
ctive Block C
Fund Project
Trust by Xi’an
Plan Tiandiyu
an Real
Estate
Develop
ment
Co., Ltd.
and
replacem
ent of
external
financing
China Used for
Touris develop
Chin m ment and
a Internat construct
Touri ional ion of
sm Trust-Z Evergran
Inter hixin 14 de
Sep
natio No.374 Sept Nanjing
Equit tem
nal Trus Evergr 10,0 emb Feicuihu Ca 7.5 189. 189.
y ber 750 0 Yes Yes
Fiduc t ande 00 er ating sh 0% 14 14
Fund
iary Nanjing 2017 Project
Inves Feicuih and
tmen uating repaying
t Collecti the
Co.,L ve financial
td. Fund institution
Trust borrowin
Plan g
Shaanx Used for
Shaa
i 27 develop
nxi
Internat Sep ment and
Inter Sept
ional Equit tem construct
natio Trus 10,0 emb Ca 7.6 1,52 181. 181.
Trust y ber ion of 0 Yes Yes
nal t 00 er sh 0% 0 56 56
Wuxi Fund 201 Tainyu
Trust
Railwa 9 Garden
Co.,L
y Residenti
td.
Station al Project
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
North Phase I
Square and
A Block Phase II
Project 3-7#
Loan Building
Collecti in Wuxi
ve Railway
Fund Station
Trust North
Plan Square A
Block in
Liangxi
Direct,
Wuxi City
by Wuxi
Shimao
Real
Estate
Develop
ment and
Construc
tion
Co.,Ltd
Used for
working
capital
supplem
ent of
Shang
Shan Ningbo
hai
ghai Zhedao
Xintuo-
Inter Investme
HAILIA
natio 19 nt
NG
nal Equit Oct Holdings
Trus GROU 10,0 Octo Ca 6.2
Xintu y ober Co.,Ltd. 620 00 0 Yes Yes
t P 00 ber sh 0%
o Fund 201 Idle
Credito
Trad 8 funds
rs '
e can be
Invest
Com used for
ment
pany investme
No.2
nt in
deposit
in bank,
Cash
Fengli
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
and ruby
series
product
issued by
Shanghai
Internatio
nal
Xintuo
Trade
Compan
y
China
Chin Touris
a m
Touri Internat Used for
sm ional develop
Inter TrustZ 27 ment and
natio hixin Oct construct
Equit Octo
nal Trus No.358 1,50 ober ion of Ca 7.3 109.
y ber 00 0 Yes Yes
Fiduc t Zhongti 0 201 Future sh 0% 5
Fund 2017
iary an 8 Ark
Inves Future Project
tmen ArkColl F10
t ective Group
Co.,L Fund
td. Trust
Plan
China
Touris
Chin
m
a
Internat
Touri Used for
ional
sm develop
TrustZ
Inter ment and
hixin 27 27
natio construct
No.358 Equit Octo April
nal Trus 8,50 ion of Ca 7.4 942. 99.2 99.2
Zhongti y ber 201 0 Yes Yes
Fiduc t 0 Future sh 0% 64 44
an Fund 2017 9
iary Ark
Future
Inves Project
Ark
tmen F10
Collecti
t Group
ve
Co.,L
Fund
td.
Trust
Plan
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Shaanx
i
Used for
Internat
working
ional
capital
Shaa TrusG
supplem
nxi reen
31 ent of
Inter Source Oct
Equit Octo offering
natio Trus farmers 10,0 ober Ca 7.7 1,54
y ber trust 00 0 Yes Yes
nal t market 00 201 sh 0% 0
Fund 2017 loans to
Trust Trust
Green
Co.,L Loan
Source
td. Collecti
farmers
ve
market
Fund
Co.,Ltd.
Trust
Plan
Used for
Huatai
Huat working
Securiti 1 1
ai capital
Sec es Equit Nove May
Secu 10,0 supplem Ca 4.9 242.
uriti -Huatai y mber 201 00 Yes Yes
rities 00 ent of sh 0% 99
es Hengyi Fund 2017 8
Co.,L Huatai
No.170
td. Securitie
s Co.,Ltd.
Used for
Wester
1 fellow-up
nTrust.
West 1 Feb construct
Sunshi
ern Equit Nove ruar ion of
Trus ne City 15,0 Ca 7.8 1,46 160. 160.
Trust y mber y Sunshine 0 Yes Yes
t Yujing 00 sh 0% 4.9 27 27
Co.,L Fund 2017 201 City
Special
td. 9 Yujing
Asset
Garden
Trust
Project
Shan Shang Used for
ghai hai develop
Inter Xintuo- ment and
natio Ocean 9 construct
nal wide Equit Nove ion of
Trus 10,0 May Ca 6.5 972.
Xintu Wuhan y mber Yunhai 00 0 Yes Yes
t 00 201 sh 0% 33
o Yunhai Fund 2017 Garden
Trad Garden Project
e Collecti (Block
Com ve 24-1) by
pany Trust Wuhan
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
CBD
Investme
nt&Devel
opment
Co.,Ltd.
Zhongr Used for
Zhon
ong offering
gron
Trust-X working
g 14 Nov
iangron capital
Inter Equit Nove emb
Trus g No. 15,0 loans to Ca 7.4 1,11 109. 109.
natio y mber er 0 Yes Yes
t 166Coll 00 Chuying sh 0% 0 48 48
nal Fund 2017 201
ective Agro-Pas
Trust
Fund toral
Co.,L
Trust Group
td.
Plan Co.,Ltd.
China
Touris
Chin
m
a Used for
Internat
Touri offering
ional
sm financing
Trust-Z
Inter capital to
hixin 22 Nov
natio Beijing
No.359 Equit Nove emb
nal Trus 20,0 Fuhuyunt Ca 7.2 1,44 92.0
Shimao y mber er 92 0 Yes Yes
Fiduc t 00 ong Real sh 0% 0 0
Beijing Fund 2017 201
iary Estate
Tongzh
Inves Develop
ou
tmen ment
Project
t Co.,Ltd.
Collecti
Co.,L
ve
td.
Fund
Trust
Used for
Subscribi
Avic ng trust
Trust-Ti plan or
2 Dec
Avic anxin transfer
Equit Dece emb
Trust Trus No.38C 20,0 trust Ca 7.5 1,57 78.0 78.0
y mber er 0 Yes Yes
Co.,L t ollectiv 00 usufruct sh 0% 3.97 88
Fund 2017 201
td. e Fund held by
Phase beneficia
IV ry under
the trust
plan
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
managed
by trust
company
andidle
fund is
operated
in the
form of
deposit
in bank
Used for
Chin offering
a trust
Touri China loans to
sm Touris Shanghai
Inter m Fukong
14 Dec
natio Internat Interactiv
Equit Dece emb
nal Trus ional 20,0 e Ca 8.0 1,60
y mber er 00 0 Yes Yes
Fiduc t Trust.Z 00 Entertain sh 0% 0
Fund 2017 201
iary hixin ment
Inves No.423 Co.,Ltd
tmen Fukong and
t Trust supplem
Co.,L ent of
td. working
capital
Used for
Subscribi
ng trust
plan or
transferri
Avic ng trust
Trust-Ti usufruct
14 Dec
Avic anxin held by
Equit Dece emb
Trust Trus No.38C 10,0 beneficia Ca 7.5 762. 12.3 12.3
y mber er 0 Yes Yes
Co.,L t ollectiv 00 ry under sh 0% 33 33
Fund 2017 201
td. e Fund the trust
Phase plan
V managed
by trust
company
and idle
fund is
operated
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
in the
form of
deposit
in bank
West Used for
ern develop
TrustS ment and
unshin construct
e City ion of
Qingyu 15 Qingyun
West
n Park 15 Dec Park
ern Equit
Trus Accoun 10,0 Dece emb Phase II Ca 7.9
Trust y 790 00 0 Yes Yes
t t 00 mber er project sh 0%
Co.,L Fund
Receiv 2017 201 by
td.
ables 8 Changsh
Collecti a
ve Zhongfan
Fund Real
Trust Estate
Plan Co.,Ltd.
Used for
subscribi
ng
financial
investme
nt
products
Avic or other
Trust.A projects
pocaly 15 and
Avic pse 15 Dec products
Equit
Trust Trus No.556 20,0 Dece emb permitted Ca 7.2 1,44
y 00 0 Yes Yes
Co.,L t Tianch 00 mber er by the sh 0% 0
Fund
td. engjufu 2017 201 laws and
Invest 8 regulatio
ment ns such
Fund as
deposit
in bank,
money
market
fund and
corporate
bonds
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Shanghai
Jiangnan
(Group)
Co., Ltd.
used the
funds to
repay
Zhon existing
gron debts
g Zhongr 15 and
Dec
Inter ong-Ju Equit Dece acquire
Trus 15,0 emb Ca 8.0 2,40
natio ndun y mber equity 00 0 Yes Yes
t 00 er sh 0% 0
nal No.1Tr Fund 2017 shares of
Trust ust Sichuan
Co.,L Tengdun
td.t Technolo
gy
Co.,Ltd.
And its
operation
service
company
.
Used for
develop
ment and
construct
ion of
Wester Nanjing
nTru courtyard
st.C project
West AC 18 by
ern Grou Equit Mar Nanjing
Trus 20,0 Dece Ca 7.9 1,96
Trust p y ch Jiqin 00 0 Yes Yes
t 00 mber sh 0% 9.59
Co.,L Credi Fund 201 Real
td. tors ' 9 Estate
Inves Co.,Ltd.
tm wholly-o
Trust wned by
Fuzhou
Taihe
Real
Estate
Develop
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
ment
Co.,Ltd.
Deposit
in bank,
money
fund,
open
capital
manage
ment
plan,
Chin short-ter
a m current
China
Touri asset,
Touris
sm China
m
Inter Tourism
Internat
natio 26 2 Internatio
ional Equit
nal Fun 20,0 Dece July nal Ca 7.0 721.
Fortun y 00 0 Yes Yes
Fiduc d 00 mber 201 self-colle sh 0% 1
e Enjoy Fund
iary 2017 8 ctive
No.5
Inves fund trust
Invest
tmen plan
ment
t investme
Fund
Co.,L nt
td. including
governm
ent
credit,
real
estate
and
pledge of
stock
right
Wester
Used for
nTru
develop
st-Hu
West ment and
aibei 28 Dec
ern Equit construct
Trus Ever 10,0 Dece emb Ca 8.5
Trust y ion of 850 00 0 Yes Yes
t gran 00 mber er sh 0%
Co.,L Fund Huaibei
de 2017 201
td. Evergran
Bayv
de
iew
Bayview
Trust
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Used for
develop
ment and
construct
Xing ion of
ye Baima
Xingye
Inter Road
Trust 29 Dec
natio Equit East
Trus -Xing 10,0 Dece emb Ca 7.0
nal y G102 700 00 0 Yes Yes
t hui 00 mber er sh 0%
Fiduc Fund Block by
No.T 2017 201
iary Nanjing
rust
Co.,L Huiyao
td. Real
Estate
Develop
ment
Co.,Ltd.
42,4
443, 5,78
Total -- -- -- -- -- -- 01.9 -- 0 -- -- --
000 8.1
Entrust finance expected to be failed to recover principle or other situation leading to
impairment
□ Applicable √ N/A
17.3.2 Entrust Loans
□ Applicable √ N/A
No such cases in the Reporting Period.
17.4 Other Significant Contracts
□ Applicable √ N/A
No such cases in the Reporting Period.
18. Social Responsibilities
18.1 Information about Taking Social Responsibilities
The information about taking social responsibilities disclosed in 2017 Annual Social
Responsibilities Report in detail on www.cninfo.com.cn on 27 April 2018.
18.2 Information about Targeted Poverty Alleviation
18.2.1 Targeted Poverty Alleviation plan
According to the overall arrangement of overcoming poverty and achieving prosperity
(work of “Gua Cun Bao Hu”) by Suqian municipal committee and municipal government,
the Company actively responded the municipal appeal and made the work practicable.
The Company’s counterpart support objects were Qiuzhuang village and 200 low-income
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
families living in Dagou village and Taiping village, Zhenglou Town, Yanghe New District.
The goal of target poverty alleviation is to achieve that the collective economic income of
reaches more than 180 thousand by the end of 2019 and 200 low-income families living in
Dagou village and Taiping village out of poverty.
18.2.2 Summary of Annual Targeted Poverty Alleviation
The Company has continued to work hard for counterpart support( work of “Gua Cun Bao
Hu” and “San Jin San Bang”) since 2017 as follows:
First, the Company worked hard for counterpart support (work of “Gua Cun Bao Hu” and
“San Jin San Bang”) required by municipal government including poverty alleviation
information submission, feedback on problems shown on the public number (Jiangsu Visit)
and concerns raised by farmers, “Gua Cun Bao Hu ”-Plan,Progress and Performance,
“Zoujiceng, Tiaojiegou, Zhusanxia” ,mass poverty alleviation fellowship, “Sunshine
alleviation”. The donation of mass poverty alleviation fellowship amounted to RMB 3
million by the Company and employees. The Dream Blue charitable foundation financed
poor college students and helped poor students attend university. The Company
advocated setting up “Yuanmeng Plan” education fund with Suqian chamber of commerce
in Nanjing. The donation amounted RMB 500 thousand and helped 50 college freshmen
from poor families in Suqian.
Second, the Company pushed forward the annual work plan of (work of “Gua Cun Bao
Hu”) and helped poor families out of poverty. The total donation amounted more than
RMB 100 thousand by cadres and Party members. The Company assisted the villages in
industrial restructuring and leveling 700 mu of land for circulation. The Company also
helped the villages pave more than 400 meters cement road, established a convenient
service center. The air-conditioning in Party member activity room was installed to
improve the condition. In particular, the Company donated RMB 400 thousand taken from
the party membership dues to set up party group service center for 8 poor rural party
branches in Suqian in order to actively respond to the “party membership dues warm
grass roots activity” organized by organization department of the provincial party
committee. The Company donated RMB 100 thousand to help Qiuzhaung village build
infrastructure and donated RMB 100 thousand to help 200 low-income families living in
Dagou village and Taiping village in order to make the work of “Gua Cun Bao Hu” and
“San Jin San Bang” practicable. By the end of 2017, there were 87 families out of poverty
among 101 families in Dagou village and the year-over-year increase of annual income
per head of other families reached more than RMB 500. There were 66 families out of
poverty among 99 families in Taiping village and the year-over-year increase of annual
income per head of other families reached more than RMB 500. The collective economic
income of Qiuzhuang village reached RMB 185.2 thousand and fulfilled the annual task
requirement.
Third, the Company organized featured activities related to poverty alleviation including
the special activity of Dragon Boat Festival (“Thousands of words are always friendship”)
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
and organizing young volunteers to visit nursing home in Zhenglou Town for caring
activities. The Company took the opportunity of celebrating the 96th birthday of the CPC
and institutionalization and normalization of the party building studies mechanism to bring
the work of “Gua Cun Bao Hu” and “San Jin San Bang” into a series of activities and
education content and to organize new Party members to have an oath ceremony in
Qiuzhuang village.
18.2.3 Poverty Alleviation Achievement
Indicator Unit Amount/Implementation Situation
A,Overall situation —— ——
Ten thousand
Including：1.Fund 361.86
yuan
2.Goods converted into Ten thousand
10.78
cash yuan
3.Establishing card for
Person
archives of poor people out of poverty
B,Input by project —— ——
1.Industrial development —— ——
2.Transfer and employment —— ——
3.Removal and relocation —— ——
4.Educational poverty alleviation —— ——
Ten thousand
Including：4.1 Aiding poor students
yuan
5.Health poverty alleviation —— ——
6.Ecological protection —— ——
7.Basic guarantee —— ——
8.Social poverty alleviation —— ——
9.Other project —— ——
Including：9.1.Item ——
Ten thousand
9.2.Input amount 22.64
yuan
C,Awards（content and level） —— ——
18.2.4 Fellow-up Poverty Alleviation Plan
In 2018, the Company will studies spirit of the 19th CPC National Congress thoroughly
and firmly. The Company will take targeted poverty alleviation and accelerating poverty
eradication as its own duty and continue to make counterpart support plan seriously
based on the task of poverty alleviation. The Company will push forward the poverty
alleviation plan and work hard to complete the annual task of counterpart support. The
Company will push forward the work of “Gua Cun Bao Hu” and “San Jin San Bang” with
high quality and efficiency in order to enhance the rural development, enrich the people,
build closer relationship between cadres and the masses and make a contribution to
“Liang Ju Yi Gao”.
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
18.3 Information about Environment Protection
Whether the listed company and its subsidiaries belong to heavy polluting industries
prescribed by the environmental protection departments of China
Name of Distrib
Appro
main Disc Amount ution Excessi
Emission Pollution Total ved
Company pollutant harg of of ve
concentra discharge emissi total
name and e discharg discha dischar
tion standard on emiss
particular type e outlet rge ge
ion
pollutant outlet
COD：
COD： 1960
Discharge
188.6 tons
standard
ton per per
Jiangsu COD： of water
Indir year,A year,
Yanghe 50-200m pollutants
COD ect mmoni Amm
Brewery Within g/L,Amm for liquor
Ammonia disc 1 a onia No
Joint-Sto site onia and spirit
nitrogen harg nitroge nitrog
ck Co., nitrogen： industry
e n：22 en：
Ltd. 1-20mg/L Sheet 2
tons 174.3t
indirect
per ons
discharge
year per
year
COD：
COD:8 540.6
2.94to 1tons
Pipeline n per per
Jiangsu
COD： standard year,A year,
Shuangg
COD 130mg/L, of water mmoni Amm
ou Within
Ammonia Pipel 2 Ammonia pollutants a onia No
Distillery site
nitrogen ine nitrogen： for nitroge nitrog
Stock
5mg/L Shuanggo n：3.19 en：
Co.,ltd.
u Town tons 56.31t
per on
year per
year
Discharge COD:1 COD:
standard .97ton 2.04
Dire COD:100 of water per tons
Guizhou COD ct mg/L,Am pollutants year,A per
Within
Guijiu Ammonia disc 1 monia for liquor mmoni year, No
site
Co.,Ltd. nitrogen harg nitrogen： and spirit a Amm
e 10mg/L industry nitroge onia
Sheet 2 n： nitrog
Direct 0.275 en：
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
discharge tons 0.308
per tons
year per
year
Information about construction and operation of anti-pollution installations
18.3.1 Waste water treatment: In 2017, sewage treatment stations of the Company and
subsidiaries worked properly and efficiently and effluent quality was superior to related
industry standards.
18.3.2 Solid waste treatment: the solid waste of the Company and subsidiaries mainly
included vinasse, sludge and household garbage. The Company entrusted Jiangsu Gugui
New Material Joint-Stock Co.,Ltd., Guizhou Maifeng Biology Co.,Ltd., Jiangsu Woye
Biology Technology Development Co.,Ltd., Sihong County Hengli Property Management
Co.,Ltd. and local office of environment and sanitation to dispose the above solid waste.
Information about environmental impact assessment of construction project and other
authorization from the administrative department in charge of environmental protection
The Company and subsidiaries have all necessary licenses and certificates including
environmental impact assessment report of construction project, “San Tong Shi” materials
examination and acceptance report and waste discharge permit.
The prepared plan for environmental emergencies
The Company and subsidiaries made prepared plan for environmental emergencies
respectively and have all necessary licenses and certificates related to the contingency
plan. They were put on record by Jiangsu Provincial Environmental Protection Office and
Guizhou Provincial Environmental Protection Office. In 2017, the Company and
subsidiaries carried out emergency exercises about operating trouble of waste water
treatment and pipe network blocking. 6 emergency exercises were carried out during the
year and environment emergency response capability was enhanced.
Environment self-monitoring scheme
The Company and subsidiaries respectively prepared environment self-monitoring
schemes based on requirement in order to achieve the quality control and guarantee of
overall process of pollutant source monitoring. The schemes were put on record by
Suqian environmental monitor station and Xiuwen County environmental monitor station.
The Company entrusted Taike Detection Technology Jiangsu Co.,Ltd., Sihong
environmental monitor station and Xiuwen County environmental monitor station as the
third party to conduct sewage testing monthly and the testing results were timely issued
on information distributing platform.
Other environment information should be disclosed
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
N/A
Other information about environment protection
Information about emissions and saving energy
A.In 2017, the Company and subsidiaries spent more than RMB 3.8 million upgrading and
rebuilding the sewage treatment stations. Air environmental quality within site was greatly
improved and the indicators were superior to related standards.
B.The performance of recovery and comprehensive utilization of marsh gas was
significant and the steam output from marsh gas burning was more than 43 thousand tons.
It achieved the economic result valued more than 7.9 million.
C.The Company actively responded to state and local requirements and shut down 2
coal-fired boilers (20 tons) and 1 coal-fired boilers (10 tons). The Company adopted
centralized heating and the environment performance was greatly improved. It saved
more than 25 thousand tons of coal and reduced 50.88 tons of sulfur dioxide, 55 tons of
oxynitride, 9.9 tons of dust particles, more than 12 thousand tons of slag and 58 thousand
tons of greenhouse gas.
D.In 2017, the environment protection work was professionally recognized and was
awarded honorary title of “All-China Excellent Enterprise in Environment Protection”
issued by All-China Environment Federation.
19. Other Significant Events
√ Applicable □ N/A
19.1 Suqian Blue Sky Trade Co., Ltd. was the company’s second-largest shareholder and
held 166,702,906 shares. The shareholding ratio is 11.06%; Suqian Blue Ocean Trade
Co., Ltd. was the company’s third-largest shareholder and held 156,435,720 shares. The
shareholding ratio is 10.38%. On 16 August 2016, Jiangsu Blue Alliance Joint-Stock Co.,
Ltd., Suqian Blue Sky Trade Co., Ltd. and Suqian Blue Ocean Trade Co., Ltd. signed a
merger agreement. The shares held by Suqian Blue Sky Trade Co., Ltd. and Suqian Blue
Ocean Trade Co., Ltd. was succeeded to Jiangsu Blue Alliance Joint-Stock Co., Ltd. after
merger. The Company issued a prompted announcement of changes in equity (No.
2016-021), a detailed report of change in equity and 2 simplified report of change in equity
on 18 August 2016. The Company disclosed the announcement of completion of
registration of shares held by more than 5% shareholders. The negotiability registration
was completed by Blue Alliance, Blue Sky Trade and Blue Ocean Trade.
19.2 The Company indirectly held partnership share of Jiangsu Jiequan Emerging
Industry Development Fund (Limited Partnership) via Jiangsu Xinghe Investment
Management Co.,Ltd. and Nanjing Xingnahe Venture Capital Investment partnership
(Limited Partnership). Jiangsu Jiequan Emerging Industry Development Fund (Limited
Partnership) completed fund-raising and put in record in AMAC. The record numbers are
SCF515 and SCL005. It was disclosed in detail on the announcement of cooperative
investment with professional investment institutions (No: 2017-021) on 30 December
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
2017 and the announcement of progress of cooperative investment with professional
investment institutions (No: 2018-011) on 12 April 2018.
20.Significant Events of Subsidiaries
□ Applicable √ N/A
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Section VI Changes in shares and information about
Shareholders
1. Changes in Shares
Unit：Share
Before ＋，－ After
Issuan Bonu Capitalizati
Proporti ce of s on of Proporti
Number Other Subtotal Number
on (%) new share capital on (%)
shares s reserves
1.Restricted 266,271,99 -1,478,0 -1,478,0 264,793,98
17.67% 0 0 0 17.57%
shares 0 03 03
1.Shares
held by the 0 0.00% 0 0 0 0 0 0 0.00%
state
2.Shares
held by
0 0.00% 0 0 0 0 0 0 0.00%
state-owned
corporations
3.Shares
held by other 266,271,99 -1,478,0 -1,478,0 264,793,98
17.67% 0 0 0 17.57%
domestic 0 03 03
investors
Among
which：
249,480,00 249,480,00
Shares held 16.55% 0 0 0 0 0 16.55%
0
by domestic
corporations
Shares held -1,478,0 -1,478,0
16,791,990 1.12% 0 0 0 15,313,987 1.02%
by domestic 03
individuals
4.Shares
held by
0 0.00% 0 0 0 0 0 0 0.00%
foreign
investors
Among
which：
Shares held 0 0.00% 0 0 0 0 0 0 0.00%
by foreign
corporations
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Shares held
0 0.00% 0 0 0 0 0 0 0.00%
by foreign
individuals
2.Non-restric 1,240,716,0 1,478,00 1,478,00 1,242,194,0
82.33% 0 0 0 82.43%
ted shares 10 3 3
1.RMB
1,240,716,0 1,478,00 1,478,00 1,242,194,0
common 82.33% 0 0 0 82.43%
10 3 3
shares
2.Domestical
ly listed
0 0.00% 0 0 0 0 0 0 0.00%
foreign
shares
3.Overseas
listed foreign 0 0.00% 0 0 0 0 0 0 0.00%
shares
4.Others 0 0.00% 0 0 0 0 0 0 0.00%
3.Total 1,506,988,0 100.00 1,506,988,0 100.00
0 0 0 0
shares 00 % 00 %
Reasons for the change in shares
√ Applicable □ N/A
The main reason for the change in shares is that the shares of directors and top managers
are locked.
Approval of share changes
□Applicable √N/A
Transfer of share ownership
√Applicable □N/A
Blue Alliance merged and signed the Merger Agreement with Blue Sky Trade and Blue
Ocean Trade.After the merger, there was existence of Blue Alliance and cancellation of
Blue Sky Trade and Blue Ocean Trade. Blue Alliance took up the rights and obligations of
Blue Sky Trade and Blue Ocean Trade. 166,702,906 shares (including 37,993,906
circulation stock and 128,709,000 restricted shares before IPO) held by Blue Sky Trade
and 156,435,720 shares （ including 35,664,720 circulation stock and 120,771,000
restricted shares before IPO）were fully transferred to Blue Alliance on 23 November
2017.
Effects of changes in shares on the basic EPS, diluted EPS, net assets per share
attributable to common shareholders of the Company and other financial indexes over the
last year and the last Reporting period
□Applicable √N/A
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Other contents that the Company considers necessary or is required by the securities
regulatory authorities to disclose
□Applicable √N/A
2. Changes in Restricted Shares
√Applicable □N/A
Unit：Share
Opening Closing in
Name of Unlocked in Increased in Reason for Date of
restricted restricted
shareholder current period current period change unlocking
shares shares
Locked up
due to his
Wang Yao 22,502 -1 0 22,501 chairman of N/A
the board
position
50% of
restricted
shares were
Locked up
released on
due to his
23 March
Zhong Yuye 4,434,007 0 1,478,004 5,912,011 former
2018. The
director and
left will be
CEO position
released on
23 March
2019.
Unlocked due
to expiration
Zhu of his former
2,956,006 -2,956,006 0 0 201-7-8
Guangsheng senior
management
position
Merger of
Jiangsu Blue Blue Sky
Alliance Trade and
0 0 249,480,000 249,480,000 N/A
Joint-Stock Co., Blue Ocean
Ltd. Trade , share
transfer
Suqian Blue 120,771,0 Consolidated
-120,771,000 0 0 N/A
Ocean Trade 00 by Blue
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Co.,Ltd. Alliance,
share transfer
Consolidated
Suqian Blue Sky 128,709,0 by Blue
-128,709,000 0 0 N/A
Trade Co.,Ltd. 00 Alliance,
share transfer
256,892,5
Total -252,436,007 250,958,004 255,414,512 -- --
2.Issuance and Listing of Securities
2.1 Securities（excluding preference shares） Issued in the Reporting
Period
□Applicable √N/A
2.2 Changes in Total Shares of the Company and the Shareholder
Structure, as well as the Asset and Liability Structure
□Applicable √N/A
2.3 Existing Staff-held Shares
□Applicable √N/A
3. Shareholders and Actual Controller
3.1 Total Number of Shareholders and Their Shareholdings
Unit：Share
Total
number of
preference
Total number of Total number of
Total number shareholde
common preference
of common rs with
shareholders at the shareholders with
shareholders resumed
24,648 prior month-end 26,637 resumed voting 0
at the end of voting
before the rights at the
the Reporting rights at
disclosure date of period-end(if
Period the
the annual report any)(see note 8)
period-end
(if any)(see
note 8)
Shareholdings of shareholders with a shareholding percentage over 5% or the top 10 shareholders
Number Pledged or
Total Increase/ Number
Shareholdi of frozen shares
shares decrease of
Name of Nature of ng non-restri Status
held at the during the restricte
shareholder shareholder percentag cted of Number
period-en Reporting d shares
e shares share of shares
d Period held
held s
Jiangsu Yanghe State-owne 514,858,9 514,858, Froze
34.16% 0 0 3,400,000
Group Co.,Ltd. d 39 939 n
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
corporation
Jiangsu Blue Domestic
Alliance non-state-o 323,138,6 323,138,6 249,480, 73,658,6
21.44%
Joint-Stock Co., wned 26 26 000 26
Ltd. corporation
Shanghai Haiyan
State-owne
Logistics 145,708,1 145,708,
d 9.67% 0
Development 37
corporation
Co.,Ltd.
ShangHai
jieqiang Tobacco State-owne
65,827,14 65,827,1
Sugar d 4.37% 0
7
&wine(Group)Co. corporation
,Ltd
Hong Kong
Securities
Foreign 61,943,62 61,943,6
Clearing 4.11%
corporation 3
Company Ltd.
(HKSCC)
Domestic
Nantong Zongyi
non-state-o 22,050,00 -13,261,6 22,050,0 Pledg 15,000,00
Investment 1.46%
wned 0 00 00 ed
Co.,Ltd.
corporation
China Securities Domestic
Finance non-state-o 13,736,57 13,736,57 13,736,5
0.91%
Corporation wned 00
limited corporation
Central Huijin
State-owne
Asset 12,766,40 12,766,4
d 0.85% 0
Management 0
corporation
Co., Ltd.
Xingyuan Asset
Management Domestic 11,119,29 -3,355,70 11,119,29
0.74%
Co.,Ltd.－clients' corporation 80
capital
Foreign 10,951,23 -4,248,30 10,951,2
UBS AG 0.73%
corporation 63
Strategic investors or general
corporations becoming top-ten
shareholders due to placing of N/A
new shares（if any）（see note
3）
Related-parties or
N/A
acting-in-concert
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Shareholdings of the top 10 non-restricted shareholders
Number of non-restricted shares held in the period Type of shares
Name of shareholder
end Type Number
RMB
comm
Jiangsu Yanghe Group 514,858,9
514,858,939 on
Co.,Ltd.
share
s
RMB
comm
Shanghai Haiyan Logistics 145,708,1
145,708,137 on
Development Co.,Ltd.
share
s
RMB
comm
Jiangsu Blue Alliance 73,658,62
73,658,626 on
Joint-Stock Co., Ltd.
share
s
RMB
comm
ShangHai jieqiang Tobacco 65,827,14
65,827,147 on
Sugar &wine(Group)Co.,Ltd
share
s
RMB
comm
Hong Kong Securities Clearing 61,943,62
61,943,623 on
Company Ltd. (HKSCC)
share
s
RMB
comm
Nantong Zongyi Investment 22,050,00
22,050,000 on
Co.,Ltd.
share
s
RMB
comm
China Securities Finance 13,736,57
13,736,570 on
Corporation Limited
share
s
RMB
comm
Central Huijin Asset 12,766,40
12,766,400 on
Management Co., Ltd.
share
s
Xingyuan Asset Management 11,119,298 RMB 11,119,29
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Co.,Ltd.－clients' capital comm
on
share
s
RMB
comm
10,951,23
UBS AG 10,951,236 on
share
s
Strategic investors or general
corporations becoming top-ten
shareholders due to placing of N/A
new shares(if any)(see notes
3)
Explanation on the top 10
common shareholders
participating in the securities N/A
margin trading（if any）(see
notes 4)
Did any of the top 10 common shareholders or the top non-restricted common
shareholders of the Company conduct any promissory repurchase during the Reporting
Period.
□ Yes √ No
The top 10 non-restricted common shareholders,the top10 common shareholders did not
conduct any promissory repurchase during the Reporting Period.
3.2 Controlling Shareholder
Nature of controlling shareholder：Local state-owned
Type of controlling shareholder：Corporation
Legal
Name of
representative/C Date of Main business
controlling Credibility code
ompany establishment scope
shareholder
principal
Sales of brewing
mechanical
equipment,
Jiangsu Yanghe Liquor Export,
Brewery 9132130014233 Import of various
Han Feng 1997-05-08
Joint-Stock Co., 4989Y raw and auxiliary
Ltd material used for
production,
equipment and
accessories,
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Industrial
investment;
municipal public
engineering,
building
engineering,
tourism cultural
industry
investment.
Shareholdings of
the controlling
shareholder in
other controlled or
non-controlled N/A
listed companies
at home or
abroad during the
Reporting Period
Change of the controlling shareholder during the Reporting Period
□Applicable √N/A
No such cases in the Reporting Period
3.3 Actual Controller
Nature of actual controller：Local State-owned Assets Supervision and Administration
Commission
Type of actual controller：Corporation
Legal
Name of actual representative/C Date of Main business
Credibility code
controller ompany establishment scope
principal
Execution of duty
of state-owned
enterprise's
investor on
State-owned behalf of the
Assets people's
Supervision and government of
Ye Feng 2005-10-22 N/A
Administration suqian and
Commission of implement of
Suqian supervision and
administration of
state-owned
assets and
state-owned
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
enterprises.
Share holdings of
the controlling
shareholder in
other controlled or
non-controlled N/A
listed companies
at home or
abroad during the
Reporting Period.
Change of the actual controller during the Reporting Period
□Applicable √N/A
No such cases in the Reporting Period.
Ownership and control relations between the actual controller and the Company
State-owned Assets Supervision and Administration Commission of Suqian
100%
Jiangsu Yanghe Group Co.,Ltd.
100%
Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
The actual controller control the company via trust or other ways of assets management
□Applicable √ N/A
3.4 Other Corporate Shareholders with a Shareholding Percentage
Above 10%
√Applicable □ N/A
Legal
Date of
Name of actual representative/ Registered Main business
establishmen
controller Company capital scope
t
principal
Sales of daily
products, research
RMB
Jiangsu Blue Alliance 2016-07-2 and development
Zhang Yubai 104,544,000.0
Joint-Stock Co., Ltd. 8 of biology
technology,
furniture
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
production,Busines
s management
consulting service,
planting fruit
tree,sales of
prepackaging food.
3.5 Limits on the Company’s Shares Held by its Controlling Shareholder,
Actual Controller, Restructuring party and Other Commitment Subjects.
□Applicable √ N/A
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Section VII Preference Shares
□ Applicable √ N/A
No such cases in the Reporting Period
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Section VIII Profiles of Directors, Supervisory, Senior
Management and Employees
1. Change in Shares own by Directors, Members of Supervisory
Committee, Senior Management and Employees
Share
s
Share
increa Shares Other
s held
Incum Period sed at decrease increa Shares held
at the
Office bent/ Gen Ag of the d at the se/dec at the
Name year-
title Form der e servic Report Reportin rease period-end
begin
er e ing g Period (share (share)
(shar
Period (share) )
e)
(share
)
2015.2
Wang Chair Incum Mal .10-20 30,00
53 0 0 0 30,002
Yao man bent e 21.1.2
Deput
y 2015.2
Zhon Chair Incum Mal .10-20
54 0 0 0 0
g Yu man,P bent e 21.1.2
reside
nt
2015.2
Han Direct Incum Mal .10-20
56 0 0 0 0
Feng or bent e 21.1.2
Direct
or,Vice
Presid 2015.2
Cong
ent,Se Incum Mal .10-20 3,378
Xueni 52 0 0 0 3,378,291
cretary bent e 21.1.2 ,291
an
of the
Board,
CFO
Direct
or,Vice 2015.2
Zhou Presid Incum Mal .10-20 3,378
56 0 500,000 0 2,878,291
Xinhu ent,Ch bent e 21.1.2 ,291
ief
Engin
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
eer
Liu 2018.1
Huas Direct Incum Mal .29-20
48 0 0 0 0
huan or bent e 21.1.2
g
2017.5
Wang Direct Incum Mal .19-20
41 0 0 0 0
Kai or bent e 21.1.2
Indepe 2015.2
Xu
ndent Incum Mal .10-20
Zhijia 54 0 0 0 0
Direct bent e 21.1.2
n
or
Indepe 2015.2
Cai
ndent Incum Fem .10-20
Yunqi 66 0 0 0 0
Direct bent ale 21.1.2
ng
or
Indepe 2015.2
Ji
ndent Incum Mal .10-20
Xueqi 47 0 0 0 0
Direct bent e 21.1.2
ng
or
Chen Indepe 2015.2
Tong ndent Incum Mal .10-20
52 0 0 0 0
guan Direct bent e 21.1.2
g or
Chair
man of 2015.2
Feng
Super Incum Mal .10-20 5,677
Panta 58 0 0 0 5,677,986
visory bent e 21.1.2 ,986
i
Comm
ittee
Memb
er of 2015.2
Chen Super Incum Mal .10-20
57 0 0 0 0
Yiqin visory bent e 21.1.2
Comm
ittee
Memb
er of 2015.2
Chen
Super Incum Mal .10-20
Taiqin 53 0 0 0 0
visory bent e 21.1.2
g
Comm
ittee
Chen Memb Incum Mal 50 2015.2 0 0 0 0
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Taiso er of bent e .10-20
ng Super 21.1.2
visory
Comm
ittee
Memb
er of 2015.2
Zhou
Super Incum Fem .10-20
Wenq 52 0 0 0 0
visory bent ale 21.1.2
i
Comm
ittee
2015.2
Vice
Lin Incum Fem .10-20
Presid 43 0 0 0 0
Qing bent ale 21.1.2
ent
2015.2
Vice
Zhen Incum Mal .10-20 71,40
Presid 51 0 6,400 0 65,000
Bujun bent e 21.1.2 0
ent
2015.2
Vice
Zhu Incum Mal .10-20
Presid 41 0 0 0 0
Wei bent e 21.1.2
ent
2016.5
Tang Direct Form Mal
48 .31-20 0 0 0 0
Jian or er e
17.4.1
Direct
2015.2
Zhon or,Exe
Form Mal .10-20 5,912
g cutive 61 0 0 0 5,912,011
er e 17.9.2 ,011
Yuye Presid
ent
18,44
Total 0 506,400 0 17,941,581
7,981
2. Change in Directors, Members of Supervisory Committee, Senior
Management and Employees
Name Office title State of Position Date Reason
Tang Jian Director Dimission 2017.4.1 Resign
Zhong Yuye Director,Executive President Dimission 2017.9.23 Retire
3. Basic Information
Professional background, work experience and major position of directors, members of
supervisory Committee, senior management.
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
3.1 Directors
Mr. Wang Yao, born in December 1965, Master of engineering of Jiangnan University,
Master of Business Administration of Nanjing University, Senior Engineer of the
researcher level, Representative of the 19th National Congress of the Communist Party of
China, Craft master of Chinese liquor. He used to serve as Secretary of the Party branch
and Director of crushing and starter-making workshop of Jiangsu Yanghe Brewery
Joint-Stock Co., Ltd., Chairman, General Manager and Secretary of the Party Committee
of Jiangsu Yanghe Group Color Printing CO.,Ltd., Deputy General Manager, Vice
Secretary of Party Committee, Secretary of the Discipline Inspection Commission of
Jiangsu Shuanggou Co., Ltd., Deputy General Manager, Vice Secretary of Party
Committee and President Assistant of Jiangsu Su Wine industry Co., LTD., General
Manager and Vice President of Jiangsu Shuanggou Brewery Co., Ltd., Chairman and
Secretary of the the Party Committee Su Wine Trading Co., Ltd.. He is Chairman and
Secretary of the the Party Committee of the Company, Chairman of Su Wine Trading Co.,
Ltd., Director of Blue Alliance currently.
Mr. Zhong Yu, born in May 1964, Master Degree, Senior Engineer, Master of Chinese
liquor. He was the Director of Technology and Environmental Protection Department of
Jiangsu Shuanggou Brewery; Vice Chief Engineer, President Assistant and Director of
Production and Technology Center of Jiangsu Shuanggou Brewery Co., Ltd., Vice
General Manager of Yanghe Branch of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.,
Brewing Director, President Assistant, Vice President of the Company, General Manager
of Siyang Branch. Currently, He is Deputy Chairman, President, Vice Secretary of the the
Party Committee of Yanghe, General Manager of Yanghe Branch and Chairman of
Jiangsu Shuanggou Brewery Co., Ltd.
Mr. Han Feng, born in October 1962, Master Degree. He served as Deputy Head of
Siyang County in Jiangsu province, Member of the Party Committee, Member of standing
Committee of Siyang, Chairman of Jiangsu Yanghe Group CO., Ltd. and Jiangsu
Shuanggou Group CO., Ltd. At present, he is Director of Yanghe, Chairman and Secretary
of the the Party Committee of Suqian Industry Development Group CO., Ltd., Chairman,
General Manager of Jiangsu Yanghe Group CO., Ltd. and Jiangsu Shuanggou Group CO.,
Ltd.
Mr. Wang Kai was born on August 1977, Bachelor Degree, Intermediate Economist. He
was Manager of Brand department in Marketing Center of SHANGHAI TOBACCO
GROUP CO., Ltd., President Assistant of Shanghai Haiyan Logistics Development CO.,
Ltd. He is one of the Directors of Yanghe and Vice General Manager of Shanghai Haiyan
Logistics Development CO., Ltd.
Mr. Cong Xuenian, born in January 1966, Master Degree, Senior Economist. He served
as Chief Accountant and Finance Director Jiangsu Yanghe Brewery, Finance Minister of
Yanghe Group, Secretary of the Board, Financial Administrator, Director and vice
President of the Company. At present, he is Secretary of the Board, Financial
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Administrator, Director, and Vice President of the Company, Chairman of Su Wine Fortune
management Co., Ltd. and Diector of Blue Alliance.
Mr. Zhou Xinhu, born in August 1962, Master Degree, Senior Engineer, Member of the
Expert group of Liquor professional Committee of China Food Industry Association, Chief
wine taster of China and Master of Chinese Wine Critic. He was Technician of Yanghe
Group, Director of Quality Inspection department and Storage department, Vice General
Manager of Jiangsu Yanghe Liquor Co., Ltd., Vice Chief Engineer, Chief Engineer and
Vice President of Company. At present, he is Director, Vice President and Chief Engineer
of Company.
Mr. Liu Huashuang was born on December 1970, Master of Business Administration of
Fudan University, Accountant. He was the Director of Marketing department and Vice
General Manager of Jiangsu Yanghe Liquor Co., Ltd., General Manager of Yanghe Blue
Classic, General Manager of Jiangsu Yanghe Liquor Co., Ltd., Member of the Standing
Party Committee of Company, Deputy General Manager and Vice Secretary of Party
Committee of Jiangsu Su wine industrial Co., Ltd., Vice Chairman of Su wine trade group
Limited by Share Ltd. He is the Member of the Standing Party Committee of Company and
Director of Strategic Studies, Secretary of the Party Committee and Vice Chairman of Su
wine trade group Limited by Share Ltd. now.
Mr. Xu Zhijian was born on March 1964, Master and Doctor Degree, Professor. He was
Director of China&Netherlands Business Administration Education Center of Nanjing
University, Director of EMBA Program of Nanjing University& Cornell University, Director
of International Business Administration Education Center of Nanjing University, Assistant
Dean of Business College of Nanjing University, Director of the Department of Business
Administration of Nanjing University. At present, he is Independent Director of Yanghe,
Nanjing Port Co., Ltd., Jiangsu Maysta Chemical Co., Ltd. and Glarun Technology Co.,
Ltd., Professor of Business College of Nanjing University.
Ms. Cai Yunqing, born in December 1952, Doctor of Medicine, Professor and Doctoral
Supervisor. She was Director of Food Health department and Assistant Station-Master of
Jiangse Sanitation and Antiepidemic Station, Director of department of nutrition and food
hygiene, school of public health, Nanjing Medical University, Director of Institute of
nutrition and food science. At present, she is Independent Director of company,
Supervisor of Chinese Nutrition Society, Honorary President of Nutrition Society of
Jiangsu Province, Vice President of Jiangsu Intelligent aged Research Association and
Health food evaluation Expert of National food and drug Administration.
Mr. Ji Xueqing was born on July 1971, Master degree. He used to be the Project Manager
of China Chuangye Investment Group Limited, Chairman and President of Nanjing
Qinghe Investment Group Co., Ltd., Executive Director of Nanjing Shuijinshi Investment
Group Co., Ltd., Senior Vice President of Yonyou Network Technology Co., Ltd. At present,
he is Independent Director of Yanghe, Independent Director of Nanjing Balance Network
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Technology Co., Ltd., Chairman of Nanjing Suhe Venture Capital Center, Director of
Nanjing Liheng Investment Limited Partnership, Supervisor of Xuzhou Zm-Besta Heavy
Steel Structure Co., Ltd., Partner of China soft Investment Group.
Mr. Chen Tongguang, borm in April 1966, Bachelor Degree. He was Accountant of
Jiangsu Huaiyin Electric Company, Vice Director of Finance department of Jiangsu
Agricultural College, Vice Director of Accounting Center and Finance department of
Yangzhou University, Vice and General Manager Yangda branch of Yangzhou University
Asset Operation Co., Ltd. At present, he is Independent Director of Yanghe, General
Manager Yangda branch of Yangzhou University Asset Operation Co., Ltd. and
Independent Director of Yangzhou Yangjie Electronic Technology Co., Ltd.
3.2 Supervisory
Mr. Feng Pantai was born on October 1960, College degree, Senior Economist. He was
Vice Director of Sihong Food Bureau, Vice General Manager of Yanghe Group, Director
and Vice President of Company. He has been Chairman of the Supervisory Committee,
Member of Standing Committee, Chairman of Trade Union, Director of Blue Alliance.
Mr. Chen Taiqing, born in May 1965, Master degree, Senior Political Engineer, Member of
Communist Party of China. He was Member of the Party Committee of Jiangsu Yanghe
Group Co., Ltd., Director of Executive Office, Member of the Party Committee, Director of
Human Resource Department, Director of Integrated Department, President Assistant,
Vice General Manager of Yanghe branch and Secretary of Discipline Inspection
Commission of Yanghe. At present, he is Supervisory, Vice Secretary of the Party
Committee, General Manager and Secretary of the Party Committee of Jiangsu
Shuanggou Distillery Stock Co., Ltd.
Mr. Chen Yiqin, born in August 1961, College degree, Auditor, Certified Public Accountant.
He was Director of the Suqian Municipal Audit Bureau, CFO of Suqian Water Investment
Company, Financial Director of Suqian Industry Development Group Co., Ltd. At present,
he is Supervisory of Yanghe and Chairman of the Supervisory Committee of Suqian
Industry Development Group Co., Ltd.
Ms. Zhou Wenqi, born in April 1966, College degree, Senior Accountant. She was
Financial Director of Shanghai Jieqiang No.3 and No.4 distribution center, Financial
Assistant, Deputy Manager, Manager of ShangHai jieqiang Tobacco Sugar &wine (Group)
Co., Ltd. She is Supervisory of Yanghe and CFO of ShangHai jieqiang Tobacco Sugar
&wine (Group) Co., Ltd. currently.
Mr. Chen Taisong, born in January 1968, Master degree. He was Member, Secretary of
Siyang Legal Bureau of, secretary, Vice Section Chief, Section Chief, Director Assistant,
Vice Director of Siyang Government Office, Alcalde and Secretary of the Party Committee
of Chuancheng town in Siyang country, Vice Secretary of the Party Committee and
Secretary of Discipline Inspection Commission and Chairman of the Supervisory
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Committee of Su wine industrial Co., Ltd., Vice Secretary of Discipline Inspection
Commission of Yanghe. At present, he is Supervisory, Member of Standing Committee,
Director of Organization department of company, Vice Secretary of the Party Committee
and Secretary of Discipline Inspection Commission and Chairman of the Supervisory
Committee of Su wine trade group Limited by Share Ltd.
3.3 Senior Executives
Mr. Zhong Li, President of company, resume as above.
Mr. Cong Xuenian, Vice-President of company, resume as above.
Mr. Zhou Xinhu, Vice-President of company, resume as above.
Ms. Lin Qing, born in May 1975, Master degree, Senior Accountant, Certified Public
Accountant. She was Deputy Director of Enterprise department of Suqian Finance Bureau,
Director Assistant of Suqian Price Bureau, Member and Vice Director of the Party
Committee of National Development and Reform Commission, Member of the Standing
Committee of Yanghe, Vice-President of company. At present, she is a member of the
Standing Committee of Yanghe and Vice-President of company
Mr. Zhen Bujun, born in January 1967, Master of Business Administration, Senior
Engineer. He was General Manager of Jiangsu Yanghe Group Co., Ltd., General Manager
of Suqian State-owned Investment Co., Ltd., Vice General Manager of Jiangsu
Shuanggou Distillery Stock Co., Ltd., Logistics & Purchasing Director and President
Assistant of Yanghe. At present, he is Vice-President, member of the Standing Committee
of company, General Manager and Secretary of the Party Committee of Siyang branch.
Mr. Zhu Wei, born in May 1977, Master of Nanjing University. He was Director of Human
Resource department of company, Director of Marketing department, Chief Marketing
Officer and Vice General Manager of Su wine trade group Limited by Share Ltd., Director
of Strategy of company, Vice General Manager of Su wine trade group Limited by Share
Ltd. He is Vice President of Yanghe and General Manager of Su wine trade group Limited
by Share Ltd. currently.
Position in Shareholder-Holding Companies
√ Applicable □ N/A
Any
Position in Beginning remunerations
Name of Ending
Shareholder- Date of received
Name Shareholder-Holding Date of
Holding office from
Companies office term
Companies term Shareholder-Holdin
g Companies
Han Feng Jiangsu Yanghe Group Chairman,Ge 2012.03.0 NO
Co.,Ltd. neral
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Manager
Zhou Wenqi ShangHai jieqiang CFO 2013.07.0 YES
Tobacco Sugar &wine
(Group) Co.,Ltd.
Wang Kai Shanghai Haiyan Vice General 2017.03.0 YES
Logistics Development Manager
Co.,Ltd.
Wang Yao Jiangsu Blue Alliance Director 2016.07.2 NO
Joint-Stock Co., Ltd.
Feng Pantai Jiangsu Blue Alliance Director 2016.07.2 NO
Joint-Stock Co., Ltd.
Cong Jiangsu Blue Alliance Director 2016.07.2 NO
Xuenian Joint-Stock Co., Ltd.
Position in Other Companies
√ Applicable □ N/A
Any
Position in
remunerations
Name of Other Other Beginning Ending
Name received
Companies Companie Date Date
from Other
s
Companies
Han Feng Suqian Industry Chairman 2011.09.05 YES
Development Group
Co.,Ltd.
Han Feng Jiangsu Shuanggou Chairman, 2012.03.08 NO
Group Co.,Ltd. General
Manager
Chen Yiqin Suqian Industry Chairman 2014.01.28 YES
Development Group of the
Co.,Ltd. Supervisor
y
Committee
Xu Zhijian Nanjing University Professor 2003.11.11 YES
Xu Zhijian Nanjing Port Co., Ltd. Independe 2016.03.30 YES
nt Director
Xu Zhijian Jiangsu Maysta Chemical Independe 2015.12.04 YES
Co., Ltd. nt Director
Xu Zhijian Glarun Technology Independe 2017.05.12 YES
Co.,Ltd. nt Director
Cai Chinese Nutrition Society Supervisor 2017.05.01 NO
Yunqing y
Cai Jiangsu Intelligent aged Vice 2017.03.01 NO
Yunqing Research Association President
Cai Chinese Nutrition Society Honorary 2015.04.01 NO
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Yunqing President
Cai State Food and Drug Evaluation 2008.08.01 NO
Yunqing Administration Experts of
Health-Fo
od
Ji Xueqing Nanjing Suhe Venture Chairman 2017.01.01 NO
Capital Center (Limited
Partnership)
Ji Xueqing Xuzhou Zm-Besta Heavy Supervisor 2017.03.01 NO
Steel Structure Co., Ltd y
Ji Xueqing China soft Investment Partner 2017.01.01 NO
Group
Ji Xueqing Nanjing Balance Network Independe 2017.10.01 NO
Technology Co., Ltd. nt Director
Ji Xueqing Nanjing Li Heng Director 2017.01.01 NO
Investment Limited
Partnership
Chen Yangzhou University General 2013.10.01 YES
Tongguang Yangda Branch Manager
Chen Yangzhou Yangjie Independe 2017.06.19 YES
Tongguang Electronic Technology nt Director
Co.,Ltd.
Punishments imposed in the recent three years by the securities regulators on the
incumbent directors, supervisors and senior management as well as those who left in the
Reporting Period
□ Applicable √ N/A
4. Remuneration of Directors, Supervisors and Senior Executives
The following describes the decision-making procedures, grounds on which decisions are
made and actual remuneration payment of directors, supervisors and senior executives.
Decision-making procedures for directors, supervisors and senior executives: Based on
the \"trial implementation measures for the annual salary of general manager (amended)”
proposed by the second session and 9th meeting of the board of directors on December
29, 2008, \"trial method about the annual salary system of chairman (amended)” proposed
by the first interim shareholders' meeting on January 18, 2009.
Grounds on which decisions are made of directors, supervisors and senior executives:
Based on the Company's operating conditions, refer to the standard of regional economic,
industry and market.
Actual remuneration payment of directors, supervisors and senior executives: According
to the performance and salary system and pay on time.
Remuneration of directors, supervisors and senior executives during the Reporting Period
Unit: RMB
Name Position Gender Age Incumbent/ Total Remuneration
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Former before-tax from related
remuneration parties of the
from the Company
Company
Wang Yao Chairman Male 53 Incumbent 128.19 NO
Zhong Yu Deputy
Male 54 Incumbent 121.49 NO
Chairman,President
Han Feng Director Male 56 Incumbent 0 YES
Wang Kai Director Male 41 Incumbent 0 YES
Cong Director,Vice
Xuenian President,Secretary Male 52 Incumbent 91.25 NO
of the Board,CFO
Zhou Xinhu Director,Vice
President,Chief Male 56 Incumbent 92.04 NO
Engineer
Xu Zhijian Independent Director Male 54 Incumbent 6 NO
Cai
Independent Director Female 66 Incumbent 6 NO
Yunqing
Ji Xueqing Independent Director Male 47 Incumbent 6 NO
Chen
Independent Director Male 52 Incumbent 6 NO
Guangtong
Feng Chairman of
Pantai Supervisory Male 58 Incumbent 91.92 NO
Committee
Chen
Supervisory Male 53 Incumbent 91.01 NO
Taiqing
Chen Yiqin Supervisory Male 57 Incumbent 0 YES
Zhou
Supervisory Female 52 Incumbent 0 YES
Wenqi
Chen
Supervisory Male 50 Incumbent 87.91 NO
Taisong
Lin Qing Vice President Female 43 Incumbent 91.96 NO
Zhen Bujun Vice President Male 51 Incumbent 91.63 NO
Zhu Wei Director Male 41 Incumbent 96.64 NO
Zhong
Director Male 61 Former 103.46 NO
Yuye
Tang Jian Director,Executive
Male 48 Former 0 YES
President
Total 1,111.5
Share incentives for directors, supervisors and senior executives in the Reporting Period
√ Applicable □ N/A
5. Staff in the Company
5.1 Number, Functions and Educational Backgrounds of the Staff
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Number of in-service staff of the Company 6,914
Number of in-service staff of main subsidiaries 8,112
Total number of in-service staff 15,026
Total number of staff with remuneration in the period 15,026
Number of retirees to whom the Company or its main subsidiaries need to pay
retirement pension
Functions
Function Number of staff
Production 5,866
Sales 5,036
R&D 1,845
Financial
Administrative 1,625
Inner Retired
Total 15,026
Educational backgrounds
Educational background Number of staff
Master and doctor
Bachelor 3,421
College, technical secondary school 4,049
Senior high school 3,579
Junior high school and under 3,743
Total 15,026
5.2 Staff Remuneration Policy
The remuneration consists of basic payments performance-related payments and benefit
float award. The company implemented the mechanism of self-promotion of positions in
2017, and prepared the measures for the management of position automatic management.
According to the the main working responsibilities, working content of the department, the
quality, efficiency and economic value of employees, the company aimed to establish an
adequate evaluation index of employees’ performance. Based on this remuneration policy,
employees were capable to be self-motivated and highly efficient. Therefore, the
management of the company would be improved and achieve the win-win goal with staff.
5.3 Staff Training Plans
The staff training can divide into three levels in 2017: company training, subsidiary training
and department training, they are carried out by training department of human recourse
center, human recourse department and various departments respectively. Company
training includes special training for su wine ecosphere leading talents, special training for
Internet business, win at the middle-level learning project (level 1 strategic reserve talent),
primary action learning project (level 2 strategic reserve talent), \"soldier assault\" talent
training program for excellent employees at the grassroots level (level 3 strategic reserve
talent), TTT project for internal trainer training, maintenance personnel training program in
production base and so on. Subsidiary training contains packaging, wine making and staff
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
comprehensive quality improvement training, etc. Department training mainly focuses on
the professional training of department business.
In the past one year, the training carried out in an orderly manner according to
management methods and other relevant regulations. Classes and courses were based
on the characters of enterprise talents, reserved strategic talents from three levels,
specific training of Internet talents. During the year, there were 371 training sessions,
28,228 participants, with an average attendance of 11.27 hours per person.
5.4 Labor Outsourcing
□ Applicable √ N/A
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Section IX Corporate Governance
1. Basic Situation of Corporate Governance
The Company constantly perfects corporate governance structure and internal control
system to enhance the corporate governance level strictly according to the Corporate Law,
the Securities Law, The Listed Company Governance Standards, Rules Governing Listing
of Stocks on Shenzhen Stock Exchange and Guidelines on Standard Operation of SME
Board Listed Companies on Shenzhen Stock Exchange and other relevant Laws and
regulations. The Company operates normatively with sound corporate governance and
normative information disclosure. The situation of corporate governance of the Company
meet the requirements of authority files of listed company corporate governance by
CSRC.
1.1. Shareholders and Shareholders’ General Meeting
According to the regulations such as Articles of Incorporation, Company Rules of
Procedure of The Shareholders’ General Meeting. the Company convenes and holds the
shareholders’ general meeting and discusses business affairs in the meeting normatively.
The Company hires legal advisor to issue the legal opinion for the shareholders’ general
meeting; The Company can treat all shareholders equally, especially makes minority
shareholders have equal status and fully exercise their own power. During the reporting
period，the overall requirements of the Party building work were added in the articles of
incorporation; During the reporting period, the Company held 1 shareholders’ general
meeting and 8 proposals were passed in the meeting. The board carried out all the
decisions made by the annual meeting of shareholders carefully. The board carried out
the decisions made by shareholders’ general meeting seriously.
1.2. Relationship between Controlling Shareholders and the Company
According to the requirement of the Company Law, the controlling shareholders take
duties of sponsor and undertake commitments. During the reporting period, controlling
shareholders have no priority beyond the rights of shareholders’ general meeting that
directly and indirectly affect the decision-marking and operation of the Company. There is
no situation that controlling shareholders damage the legal interests of other shareholders.
The Company and the controlling shareholders implement independent accounting of
personnel, assets, finance, organizations and business. They take responsibilities and
risks separately. There is no significant related party transaction between the Company
and the controlling shareholders. There is on situation that controlling shareholders
occupy the funds of the listed company and the listed company tenders guarantee for
controlling shareholders and the subsidiaries.
1.3. Directors and Board of Directors
The directors are elected seriously under the regulations of the Corporate Law and
Articles of Incorporation. The board of the Company consists of 11 directors including 4
independent directors. The structure of the board of directors satisfies the requirements of
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
laws and regulations. The board discusses business affairs according to corporate law
and articles of incorporation. All the directors are able to attend the meeting and take
responsibilities diligently according to the Discussion Rules of the Board of Directors and
The Working System of Independent Director, Behavior Guidelines of Directors of SME
Board Listed Companies. All the directors seriously consider proposals and make
scientific and reasonable decisions for significant events. They also protect the legal
interests of the Company and all shareholders. Strategy Committee, Nomination
Committee, Audit Committee, Remuneration and Appraisal Committee are 4 professional
committees set under the board. The Committees have clear division of work and
responsibilities and fully play professional role to offer scientific and professional
suggestions for the decision-making of the board.
1.4. Supervisors and Board of Supervisors
The supervisors are elected according to the Corporate Law and the Articles of
Incorporation. The board of supervisors of the Company consists of 5 supervisors,
including 2 stuff representative supervisors. The structure of the board of supervisors
satisfies the requirements of laws and regulations. The board of supervisors discusses
business affairs according to corporate law and articles of incorporation. Supervisors can
attend the meeting according to the requirements of Rules of Discussion Rules of the
Board of Supervisors. They takes their own responsibilities seriously, supervise and make
independent suggestions for the Company’s significant events, financial conditions and
the duties of directors and CEO, thereby, protecting legal interests of the Company and
shareholders.
1.5. Mechanism of Evaluation and Motivation
The Company keeps improving the mechanism of evaluation and motivation. The
appointment of directors, supervisor and senior managers is open and transparent, which
satisfies the requirements of relevant regulations and laws. The fair and transparent
evaluation mechanism of the management has been built. During the reporting period, the
management carried out the performance assessment according to the goal of annual
operation plan. The management takes their responsibilities seriously and fulfills the
duties and completed the operation management tasks arranged by the board of
directors.
1.6. Stakeholders
The Company fully respects and protects legal interests of stakeholders and fulfills the
duties of social responsibility. The Company strengthens the awareness of social
responsibility and achieves the interest balance among society, shareholders, company
and employees. The clients and suppliers can be treated honestly and every employee is
trained seriously. The Company adheres to principles of win-win of stakeholders and
pushes forward the harmonious and sound development.
1.7. Information Disclosure and Transparency
The information disclosure of the Company is implemented according to the requirements
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
of supervision departments. The Company seriously implement the rules including
information disclosure management rule and investors relationship management rule. The
Company enhances the management of information disclosure affairs and takes
responsibility of information disclosure legally and carefully, achieving the accuracy,
integrity, fairness, timeliness of information disclosure. The information can be equally
obtained by all shareholders. The media of public disclosure for the Company are
Securities Times, Shanghai Securities News, China Securities Journal, Securities Daily,
www.cninfo.com.cn.
1.8. Investors Relationship Management
The Company focuses on the management of investors relationship to protect legal rights
of investors. Except for the duties like diligence or honesty, the Chairman, the CEO, the
Board Secretary have good communications and interactions with investors through
reception of investor investigation and participating in performance explanation session
and broker strategy meeting online. As the professional organization for investor
relationship management, the securities department strengthens the communication with
investors through telephone, email and irm.cninfo.com.cn. It fully makes sure that
investors have right to know and protects their legal interests.
1.9. Methods of Improving Internal Control System Construction
The Company keeps on enhancing the corporate governance and the internal control
system, which improves the management to a higher level. The Audit Committee fully
examines and supervises the financial condition,the efficiency of internal control,the
efficiency and rationality of corporate governance. The audit department of the Company,
as an internal audit unit, carries out regular and continuous examination on perfection and
implement situation of internal control system. It finds the Internal control defects and
improves deficiencies timely, thus the effectiveness of internal control can be guaranteed.
The operation management and anti-risk capacity are enhanced.
Any incompliance with the regulatory documents issued by the CSRC governing the
governance of listed companies
□Yes√ No
There is no incompliance with the regulatory documents issued by the CSRC governing
the governance of listed companies
2. Independency of Businesses, Personnel, Assets, Organizations and
Finance which are Separate from the Controlling Shareholder
2.1. In the Aspect of Business
The Company has independent and integrated business structure and the ability to
operate independently in the market. There is no horizontal competition between
controlling shareholders and the Company. Besides, there is no such kind of situation that
controlling shareholders intervene with operation of the company directly or indirectly.
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
2.2 In the Aspect of Personnel
The Company has built independent personnel management system and salary
management system. Futhremore, the Company signed labor contracts with employees.
Chairman of the board, the CEO, Vice-president, the Board Secretary and the responsible
person for the Company’s financial affairs obtain compensation from the Company rather
than the controlling shareholders. The directors, senior managers and supervisors do not
have positions illegally in other companies that have the same or similar business.
2.3 In the Aspect of Assets
There are clear property relations between the Company and controlling shareholders.
The Company owns the independent land usage right and ownership of buildings. The
Company independently registers and manages the properties with setting up accounts
and accounting treatment for them. There is no situation that the controlling shareholders
occupy and control the assets of the Company or intervene the operation management of
the assets.
2.4 In the Aspect of Organization
The Company has well-structured organization system ， including the shareholders’
general meeting, the board of directors, supervisory committee, the management and
functional departments. Related internal management and control system is established
for clear division of function and interaction with each other. It forms an organic whole that
ensures the legal operation.There is no affiliation with functional departments of
controlling shareholders.
2.5 In the Aspect of Finance
Our company has completed and independent organization with professional financial
employees. Independent accounting system and financial management are established.
The Company sets bank accountants, pays taxes and makes financial decisions
separately. There is no situation that controlling shareholders affect the financial
management.
3. Horizontal Competition
□Applicable √N/A
4. Annual Meeting of Shareholders and Special Meetings of Shareholders
Convened during the Reporting Period
4.1. Meetings of Shareholders Convened during the Reporting Period
Investor
Meeting Type participation Convened date Disclosure Date Disclosure Index
ratio
2016 Annual General Meeting 75.18% 2017-05-19 2017-05-20 Announcement
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
General Meeting of shareholders No,2017-011,
of shareholders disclosed on
www.cninfo.com
.cn
4.2. Special Meetings of Shareholders Convened at the Request of
Preference Shareholders with Resumed Voting Rights
□Applicable √ N/A
5. Performance of Independent Directors during the Reporting Period
5.1.Attendance of Independent Directors in Board Meeting and Meeting
of Shareholders
Attendance of independent directors in Board meeting
Presence Presence
Presence Absence for
due in the Presence by
Independent through a Absence(ti two Presence(ti
Reporting on telecommu
director proxy(times mes) consecutive mes)
Period(time site(times) nication(tim
) times
s) es)
Wu Zhijian 3 3 0 0 0 No
Cai Yunqing 3 3 0 0 0 No
Ji Xueqing 3 3 0 0 0 No
Chen
3 3 0 0 0 No
Tongguang
Explanation of absence of independent directors in meetings of the board for twice
N/A
5.2. Objections from Independent Directors in Related Issues of the
Company
Were there any objections on related issues of the Company from independent director
□ Yes √ No
Independent director has no objection on related issues of the Company during the
Reporting Period.
5.3. Other Details about the Performance of Duties by Independent
Directors
Were there any suggestions from independent directors adopted by the Company
√ Yes □ No
Details about advice of independent directors adopted by the Company
Company adopted the advice of independent directors.
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
6. Performance of Duties by Special Committees under the Broad during
the Reporting Period
1.During the reporting period, the Strategic Committee held 1 meeting. It investigated the
Board work report in advance, made the 2017 annual wok plan, offered scientific and
reasonable suggestions and fulfilled the duties.
2. During the reporting period, the Nominations Committee held 1 meeting. It examined
the qualification of director candidates nominated in fifth session of the eighth board of
directors and formed the consensus. The committee fulfilled the duties.
3. During the reporting period, the Audit Committee held 4 meetings. It considers the
affairs seriously including periodic reports, regular audit by internal audit department and
special audit. It knows about the financial and operational conditions in detail and
examines the execution of internal control system. It plays a effective role in guidance and
supervision. The committee fulfilled the duties.
4. During the reporting period, the Remuneration and Appraisal Committee held 1
meeting. It examines the salary of directors and senior managers in 2016.The information
disclosure of the Company about the salary of directors and senior managers is correct
and true and as the same as the examination.
7. Performance of Duties by the Supervisory Committee
Were there any risks to the Company identified by Supervisory Committee when
performing its duties during the Reporting Period
□ Yes √ No
The Supervisory Committee has no objection during the Reporting Period.
8. Evaluation and motivation Mechanism for the Senior Management
At the beginning of the establishment of the evaluation and motivation mechanism, it was
explicitly illustrated in Proposed Regulation of Annual Salary System of General Manager.
The evaluation and motivation of senior managers are mainly reflected in annual salary
system. The board of directors evaluates and motivates the senior managers mainly
according to the satisfaction of clients, safety index, quality index and financial index. The
management implements the annual salary system. The basic part of annual salary is
paid monthly on average and the remaining part will be paid at the end of the year
according to the results of evaluation. If it does not reach the evaluation index, the
remining parts will not be paid. In 2017, the Remuneration and Appraisal Committee
examined the situation of the management’s performance. In the opinion of the
committee：During the reporting period，the Management has achieved the main purpose
of sustainable development.
9. Internal Control
9.1. Serious Internal Control Defects Found in the Reporting Period
□ Yes √ No
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
9.2. Self-evaluation Report in Internal Control
Disclosure date of the internal
2018-04-27
control self-evaluation report
Index to the disclosed internal For details, please refer to the 2018-4-27 Audit’s Report on the
control self-evaluation report internal Control, which has been disclosed on www.cninfo.com.cn
Ratio of the total assets of the
appraised entitles to the 92.23%
consolidated total assets
Ratio of the operating revenues of
the appraised entitles to the 95.78%
consolidated operating revenue
Defect identification standard
Type Financial-report related Non-financial-report related
（1）The clue of serious defect of
financial report including ： Corrupt
transaction of directors,senior
manager and supervisors；ii. The
managers cannot figure out the
serious misstatement, but these
misstatements are found by
If condition below appear, it can
others ；iii. The results of evaluation
be considered as serious defect,
of internal control, the serious
others can be divided into
defect is still existing ； iv. Audit
important defect or normal
committee and Internal audit
defect according to affection.：
agency are not effective to the
（1）The Company suffer from
internal control.（2）The important
serious loss due to Lake of
defects including ： i. Accounting
democratic decision-making
policy has not been chosen or used
system ； （ 2 ） Obey national
Nature standard under the general accepted
regulations and laws seriously；
accounting principles；ii. The fraud
（3）Lake of important manage
program and control methods have
regulations or system doesn’t
not been built；iii. The controlling
work；（4）Important defects of
system or compensation system of
internal control or serious
accounting treatment of irregular or
defects of internal control cannot
special trade has not formed；iv.
be regulated in time；（5）A lot of
The control of the process of Final
important or serious defects of
Financial Reporting exist the
the company appear.
situation that one or more
advantages are found and the
Veracity and Accuracy of Financial
Report cannot be proved.（3）Other
control defects except for serious
defects, important defects are
called normal defects.
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Serious defect：Misstatement> 3%
of total operating revenue ；
Misstatement > 5% of total profits；
Misstatement > 2% of total assets。
Important defect ： 1% of total
operating revenue < Serious defect：ratio of loss of
Misstatement≤3% of total operating total assets≥1%.Important
Quantitative standard revenue ； 3% of total profits< defect：0.5%≤ratio of loss of total
Misstatement≤5% of total profits； assets＜1% Normal defect：ratio
1% of total assets< of loss of total assets＜0.5%
Misstatement≤2% of total assts 。
Normal defect：Misstatement≤1% of
total operating revenue ；
Misstatement≤3% of net profits ；
Misstatement≤1% of total assets
Number of serious financial-report
related defects
Number of serious
Non-financial-report related 0
defects
Number of important
financial-report related defects
Number of important
Non-financial-report related 0
defects
10. Auditor’s Report on Internal Control
Auditor’s Report on Internal Control
Opinion paragraph in the audit’s report on internal control
The internal control auditor holds the view that on 31 December 2017, the company maintained an
effective internal control of a financial report in all significant aspects based on the General Specifications
of Company Internal Control and relevant specification.
Auditor’s report on internal
Disclosed
control disclosed or not
Date of disclosing the full
text of the auditor’s report on 2018.04.27
internal control
Index to the disclosed full
For details, please refer to the 2018-4-27 Audit’s Report on the internal
text of the auditor’s report on
Control, which has been disclosed on www.cninfo.com.cn
internal control
Type of the audit’s opinion Standard unqualified opinion
Serious
No
non-financial-related defects
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Whether any modified opinions are expressed by the accounting firm in its auditor’s report
on the Company’s internal control
□ Yes √ No
Whether the auditor’s report on the company’s internal control issued by the accounting
firm is consistent with the self-evaluation report of the Board
√ Yes □ No
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Section X Information about Corporate Bond
Whether there exists a public issue and listing of corporate bond that is not yet due or
failed to be redeemed at the date of the financial report authorized.
No
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Section XI Financial Report
1.Auditor’s report
Type of audit report Standard & unqualified
Signing date of auditor’s report 2018-04-26
Jiangsu Suya Jincheng Certified Public
Name of Audit
Accountants LLP
No. of auditor’s report SUYASHEN[2018]No.778
Names of auditors Xu Xuzheng, Kan Baoyong
Text of Auditor’s Report
Auditor’s Report
To the shareholders of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.:
Opinion
We have audited the accompanying financial statements of Jiangsu Yanghe Brewery
Joint-Stock Co., Ltd. (hereinafter referred to as the“Company”), which comprise the
consolidated balance sheet and balance sheet as at December 31st 2017; consolidated
income statement and income statement, consolidated statement of cash flows and
statement of cash flows, consolidated statement of changes in owners’ equity and
statement of changes in owners’ equity for the year then ended; and notes to the financial
statements.
In our opinion, the financial statements of the Company are prepared, in all material
respects, in accordance with Accounting Standards for Business Enterprises and present
fairly the financial position of the Company as at December 31st 2017 and its operating
results and cash flows for the year then ended.
Basis for Our Opinion
We conducted our audit in accordance with the Auditing Standards for Certificated Public
Accountants in China. Our responsibilities under those standards are further described in
the Auditor’s Responsibilities for the Audit of the Financial Statements section of our
report. According to the Code of Ethics for Chinese CPA, we are independent of the
Company in accordance with the Code of Ethics for Chinese CPA and we have fulfilled
our other ethical responsibilities in accordance with these requirements. We believe that
the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most
significant in our audit of the financial statements of the current period. These matters
were addressed in the context of our audit of the financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
1.Recognition of Revenue
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Please refer to Notes 3.23 and Notes 5.34 of the Financial Statements
Key audit matter How our audit addressed the matter
The Company’s specific condition of
We implemented the main audit procedures in
revenue recognition is that revenue is respect of revenue recognition:
recognized after customer acceptance
1.Understood, tested and evaluated the
based on receiving payment or
effectiveness of internal control of sales and cash
obtaining the rights of claiming payment
receipts cycle designed and executed by the
for goods according to signed sales
management.
contracts or agreements. In 2017, the
2.Judged whether there is an abnormal
Company’s annual operating revenue
fluctuation of revenue in the reporting period with
was RMB 19,917,942,238.16, up
the analytic review of revenue and gross profit
15.92% from last year. It increased
margin in combination with product category.
greatly. Operating revenue is an
3.Sampling inspection of supporting documents
important component of income
related to revenue recognition including sales
statement. Therefore, we identified
contracts or orders, invoices, delivery lists or
operating revenue as a key audit
receiving reports, shipping lists and bank slips.
matter.
4.Implemented the external confirmation of
selected major franchisers and inspected the
payback of account receivables after the
reporting period in combination with audit of
account receivable.
5.Sampling inspection of calculation and
accounting treatment of sales discount and sales
allowance
6.Chose samples from sales revenue records
before and after the balance sheet date,
inspected related supporting documents and
evaluated whether the revenue recorded in the
appropriate accounting period.
2.Calculation of Consumption Tax and Change of Tax Payment
Please refer to Notes 4 and Notes 5.35 of the Financial Statements
Key audit matter How our audit addressed the matter
According to Notice on further
We implemented the main audit procedures in
Strengthening the Collection and respect of calculation of consumption tax and
Management of Liquor Consumption change of tax payment:
Tax (Guoshuihan (2017) No. 144) 1.Understood, tested and evaluated the
issued by the State Administration of Company’s key control procedures related to
Taxation(SAT) issued, if a liquor calculation of consumption tax and change of tax
manufacturing enterprise sets up payment.
muti-level sales units selling liquor, the 2.Obtained the consumption tax return and
SAT should verify the lowest checked the carrying amount.
assessable price of the manufacturing 3.Obtained the lowest tax assessable price sheet
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
enterprise based on external sales price and conducted a sampling inspection.
of final sales unit. Since 1 May 2017, 4.Chose samples to review the calculation
the lowest assessable price of liquor process and results of consumption tax.
consumption tax has been adjusted to 5.Chose samples to inspect the actual
60% uniformly from 50% to 70%. The consumption tax payment
tax payment of the Company’s liquor
consumption tax has been changed
from withholding and remitting tax by
trustee from direct payment by the
liquor manufacturing enterprise since 1
September 2017. The accounting
method of consumption tax was
changed from manufacturing
consignment reckoned in cost of liquor
production to self-production and
self-sale reckoned in consumption
taxes and surcharges. The tax price of
liquor consumption tax with ad valorem
taxation has been changed from
composite assessable price to the
lowest assessable price of the
manufacturing enterprise based on
external sales price of final sales unit
since 1 May 2017.The above
calculation of consumption tax and
change of tax payment is important for
the Company. Taxes and surcharges is
an important component of income
statement. Therefore, we identified
calculation of consumption tax and
change of tax payment as a key audit
matter.
Other Information
The Company’s management (hereinafter referred to as “management”) is responsible for
the other information. The other information comprises all of the information included in
the Company’s 2017 Annual Report other than the financial statements and our auditor’s
report thereon.
Our opinion on the financial statements does not cover the other information and we do
not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the
other information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the audit or
otherwise appears to be materially misstated. If, based on the work we have performed,
we conclude that there is a material misstatement of this other information, we are
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance
for the Financial Statements
The Company's management is responsible for preparing the financial statements in
accordance with the requirements of Accounting Standards for Business Enterprises to
achieve a fair presentation, and for designing, implementing and maintaining internal
control that is necessary to ensure that the financial statements are free from material
misstatements, whether due to frauds or errors.
In preparing the financial statements, management of the Company is responsible for
assessing the Company's ability to continue as a going concern, disclosing matters
related to going concern and using the going concern basis of accounting unless
management either intends to liquidate the Company or to cease operations, or has no
realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company's financial
reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to
issue an auditor's report that includes our opinion. Reasonable assurance is a high level
of assurance, but is not a guarantee that an audit conducted in accordance with the audit
standards will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and
maintain professional scepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those
risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement resulting from fraud is higher
than for one resulting from error, as fraud may involve collusion, forgery, omissions,
misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management of the Company.
(4) Conclude on the appropriateness of using the going concern assumption by the
management of the Company, and conclude, based on the audit evidence obtained,
whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Company's ability to continue as a going concern. If we conclude
that a material uncertainty exists, we are required to draw attention in our auditor's report
to the related disclosures in the financial statements or, if such disclosures are inadequate,
to modify our opinion. Our conclusions are based on the audit evidence obtained up to the
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
date of our auditor's report. However, future events or conditions may cause the Company
to cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements,
including the disclosures, and whether the financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the
entities or business activities within the Company to express an opinion on the financial
statements and bear all liability for the opinion. We communicate with those charged with
governance regarding, among other matters, the planned scope and timing of the audit
and significant audit matters, including any significant deficiencies in internal control that
we identify during our audit.
We also provide those charged with governance with a statement that we have complied
with relevant ethical requirements regarding independence, and to communicate with
them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards. From the matters
communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the financial statements of the current period and
are therefore the key audit matters. We describe these matters in our auditor's report
unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in
our report because the adverse consequences of doing so would reasonably be expected
to outweigh the public interest benefits of such communication.
Jiangsu Suya Jincheng Certified Public Accountants LLP
Nanjing, China
Kan Baoyong
Certified Public Accountant of China
Xu Xuzheng,
Certified Public Accountant of China
April 26th, 2018
2.Financial Statements
Monetary Unit: RMB
2.1. Consolidated Balance Sheet
As at December 31, 2017
Prepared by: Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Monetary Unit: RMB
Assets Balance as at December 31,
Balance as at December 31, 2016
Current assets:
Cash and cash
1,751,452,876.18 2,456,627,358.97
equivalents
Settlement funds
Lending funds
Financial assets
measured at fair value
through profit or loss
Derivative financial
assets
Notes receivable 212,812,236.57 151,616,983.85
Accounts receivable 8,485,382.83 10,824,186.90
Prepayment 86,661,808.28 69,319,933.22
Premium receivable
Reinsurance accounts
receivable
Provision of cession
receivable
Interests receivable
Dividends receivable
Other receivables 57,084,601.83 110,535,658.50
Redemptory monetary
capital for sale
Inventories 12,861,503,434.11 12,221,515,305.37
Assets held for sale
Non-current assets
552,200,000.00 238,900,000.00
maturing within one year
Other current assets 12,996,375,380.41 10,065,235,053.84
Total current assets 28,526,575,720.21 25,324,574,480.65
Non-current assets:
Disbursement of loans
and advances
Available-for-sale
3,460,279,142.76 1,458,069,647.18
financial assets
Held-to-maturity
investments
Long-term receivables
Long-term equity
1,980,046.94 21,029,470.42
investments
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Investment properties
Fixed assets 8,249,559,468.26 7,970,035,119.29
Construction in progress 234,431,457.83 544,670,924.38
Project materials 788,063.58 788,063.58
Disposal of fixed assets
Productive biological
assets
Oil and gas assets
Intangible assets 1,653,546,427.07 1,634,624,841.57
Development expenses
Goodwill 276,001,989.95 276,001,989.95
Long-term deferred
1,091,644.16 2,158,153.24
expenses
Deferred tax assets 649,659,107.71 568,074,960.43
Other non-current
204,227,633.91 1,004,034,598.94
assets
Total non-current
14,731,564,982.17 13,479,487,768.98
assets
Total assets 43,258,140,702.38 38,804,062,249.63
Current liabilities:
Short-term loans
Borrowings from central
bank
Customer deposits and
deposits from banks and
other financial
institutions
Borrowing funds
Financial liabilities
measured at fair value
through current profit or
loss
Derivative financial
liabilities
Notes payable 8,200,000.00 960,000,000.00
Accounts payable 1,111,403,574.47 784,213,000.76
Advances from
4,199,846,323.30 3,847,491,823.75
customers
Financial assets sold
under repurchase
agreements
Handling charges and
commissions payable
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Employee benefits
209,658,648.29 165,454,185.74
payable
Taxes and surcharges
2,289,562,127.67 1,807,842,582.92
payable
Interest payable
Dividends payable 4,696,611.20
Other payables 5,620,040,515.94 4,867,632,425.33
Dividend payable for
reinsurance
Reserve fund for
insurance contracts
Receivings from
vicariously traded
securities
Receivings from
vicariously sold
securities
Liabilities held for sale
Non-current liabilities
maturing within one year
Other current liabilities
Total current liabilities 13,438,711,189.67 12,437,330,629.70
Non-current liabilities:
Long-term loans 145,452.00 181,816.00
Bonds payable
Including:Preferred
stock
Perpetual bond
Long-term payables
Long-term employee
benefits payable
Payables for specific
199,107,530.75 199,978,943.07
projects
Provisions
Deferred income 107,349,666.67 111,085,666.67
Deferred tax liabilities 17,957,771.10 18,499,326.73
Other non-current
liabilities
Total non-current
324,560,420.52 329,745,752.47
liabilities
Total liabilities 13,763,271,610.19 12,767,076,382.17
Owners' equity (or
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
shareholders' equity)：
Share capital 1,506,988,000.00 1,506,988,000.00
Other equity instruments
Including:Preferred
stock
Perpetual bond
Capital reserves 741,704,076.44 741,704,076.44
Less: treasury stock
Other comprehensive
915,704.03 1,141,647.47
income
Special reserves
Surplus reserves 753,494,000.00 753,494,000.00
General risk reserve
Undistributed profits 26,511,938,505.25 23,049,443,346.09
Total equity
attributable to owners 29,515,040,285.72 26,052,771,070.00
of the parent company
Non-controlling interests -20,171,193.53 -15,785,202.54
Total owners' equity
(or shareholders' 29,494,869,092.19 26,036,985,867.46
equity)
Total liabilities and
owners' equity (or 43,258,140,702.38 38,804,062,249.63
shareholders' equity)
Legal representative: Wang Yao
Person in charge of accounting affairs: Cong Xuenian
Person in charge of accounting department: Yin Qiuming
2.2. Balance Sheet
Monetary Unit: RMB
Assets Balance as at December 31, 2017 Balance as at December 31, 2016
Current assets:
Cash and cash
1,109,561,846.20 1,570,426,948.87
equivalents
Financial assets
measured at fair value
through current profit or
loss
Derivative financial
assets
Notes receivable 162,947,960.82 63,202,344.00
Accounts receivable 7,526,709,429.22 1,855,067,908.49
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Prepayment 2,635,654.78 2,276,112.00
Interests receivable
Dividends receivable 2,605,425,138.06 5,170,157,529.06
Other receivables 1,160,366,132.04 10,362,461,481.74
Inventories 9,944,024,331.15 9,636,992,631.75
Assets held for sale
Non-current assets
150,000,000.00
maturing within one year
Other current assets 8,803,227,424.95 1,707,917,932.03
Total current assets 31,464,897,917.22 30,368,502,887.94
Non-current assets:
Available-for-sale
2,038,625,617.54 810,770,442.49
financial assets
Held-to-maturity
investments
Long-term receivables
Long-term equity
5,408,241,180.24 2,614,965,815.66
investments
Investment properties
Fixed assets 5,402,239,827.59 5,131,698,753.07
Construction in progress 49,968,361.62 338,015,916.65
Project materials 788,063.58 788,063.58
Disposal of fixed assets
Productive biological
assets
Oil and gas assets
Intangible assets 1,275,763,366.60 1,292,239,478.41
Development expenses
Goodwill
Long-term deferred
expenses
Deferred tax assets 6,093,941.15 6,365,178.40
Other non-current assets 165,885,624.34 410,334,832.94
Total non-current
14,347,605,982.66 10,605,178,481.20
assets
Total assets 45,812,503,899.88 40,973,681,369.14
Current liabilities:
Short-term loans
Financial liabilities
measured at fair value
through current profit or
loss
Derivative financial
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
liabilities
Notes payable
Accounts payable 1,166,484,374.31 1,494,301,071.17
Advances from
21,608,300,346.42 19,234,222,657.20
customers
Employee benefits
4,288,922.68
payable
Taxes and surcharges
383,026,142.73 102,989,580.63
payable
Interest payable
Dividends payable
Other payables 169,460,166.49 173,587,366.51
Liabilities held for sale
Non-current liabilities
maturing within one year
Other current liabilities
Total current
23,327,271,029.95 21,009,389,598.19
liabilities
Non-current liabilities:
Long-term loans 145,452.00 181,816.00
Bonds payable
Including：Preferred
stock
Perpetual
bond
Long-term payables
Long-term employee
benefits payable
Payables for specific
145,437,496.65 145,961,936.65
projects
Estimated Liabilities
Deferred income 79,166.67 174,166.67
Deferred tax liabilities
Other non-current
liabilities
Total non-current
145,662,115.32 146,317,919.32
liabilities
Total liabilities 23,472,933,145.27 21,155,707,517.51
Owners' equity (or
shareholders' equity)：
Share capital 1,506,988,000.00 1,506,988,000.00
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Other equity
instruments
Including：
Preferred stock
Perpetual
bond
Capital reserves 1,341,628,480.93 1,341,628,480.93
Less: treasury stock
Other comprehensive
income
Special reserves
Surplus reserves 753,494,000.00 753,494,000.00
General risk reserve 18,737,460,273.68 16,215,863,370.70
Total owners' equity
(or shareholders' 22,339,570,754.61 19,817,973,851.63
equity)
Total liabilities and
owners' equity (or 45,812,503,899.88 40,973,681,369.14
shareholders' equity)
2.3. Consolidated Income Statement
Monetary Unit: RMB
Item Year 2017 Year 2016
1. Total operating income 19,917,942,238.16 17,183,109,620.08
Including: operating income 19,917,942,238.16 17,183,109,620.08
Interest income
Earned premium
Fee and commission
income
2. Total operating costs 11,741,569,054.09 10,003,035,000.07
Including: operating costs 6,681,148,562.16 6,202,978,828.59
Interest expenses
Fee and commission
expenses
Surrender value
Net payments for
insurance claims
Net peovision insurance
contracts
Bond insurance expense
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Reinsurance Expenses
Taxes and surcharges 1,151,869,831.30 309,567,399.64
Selling and distribution
2,387,447,107.05 1,869,001,821.53
expenses
General and administrative
1,532,148,106.93 1,582,435,251.45
expenses
Financial expenses -33,912,331.47 -8,947,212.14
Impairment losses 22,867,778.12 47,998,911.00
Plus: gains from changes in fair
value (\"-\" for losses)
Investment income (\"-\" for
623,953,064.97 547,210,021.50
losses)
Including: income from
investment in associates and joint -1,299,882.30 -3,893,529.35
ventures
Foreign exchange gains (\"-\"
For Losses)
Asset disposal income (\"-\"
-8,598,844.11 -5,823,628.96
For Losses)
Other income 44,745,640.94
3. Operating profits (\"-\" For
8,836,473,045.87 7,721,461,012.55
Losses)
Plus: non-operating income 19,822,054.76 45,149,806.09
Less: non-operating expenses 8,340,532.81 5,645,254.90
4. Total profits before tax (\"-\" For
8,847,954,567.82 7,760,965,563.74
Total Losses)
Less: income tax expenses 2,229,168,424.15 1,956,036,449.75
5. Net profit (\"-\" For Net Loss) 6,618,786,143.67 5,804,929,113.99
5.1 Net income from continuing
6,618,786,143.67 5,804,929,113.99
operations (\"-\" For net deficiency)
5.2 Net income from discontinued
operations (\"-\" For net deficiency)
Attributable to owners of the
6,627,169,959.16 5,827,168,870.88
parent company
Attributable to Minority interest
-8,383,815.49 -22,239,756.89
income
6. Net of tax from other
-226,957.05 1,143,061.03
comprehensive income
Net of tax from other comprehensive
income to the owner of the parent -225,943.44 1,125,312.56
company
6.1 Other comprehensive income
cannot reclassified into the profit and
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
loss:
Including: Re-measure the variation
of net indebtedness or net asset of
defined benefit plans
Share in other
comprehensive income that cannot be
classified into profit and loss under
equity method
6.2 Other comprehensive income that
will be reclassified into the profit and -225,943.44 1,125,312.56
loss
Including: Share in other
comprehensive income that will be
classified into profit and loss under
equity method
Changes in fair value of
available-for-sale financial assets
Held-to-maturity
investment reclassified into
available-for sale financial assets
Effective part of cash-flow
hedge profit and loss
Balance arising from the
translation of foreign currency -225,943.44 1,125,312.56
financial statements
Others
Net of tax from other comprehensive
-1,013.61 17,748.47
income to minority shareholders
7. Total comprehensive income 6,618,559,186.62 5,806,072,175.02
Total comprehensive income
attributable to owners of the parent 6,626,944,015.72 5,828,294,183.44
company
Total comprehensive income
-8,384,829.10 -22,222,008.42
attributable to minority shareholders
8. Earnings per share
(1)Basic earnings per share 4.40 3.87
(2)Diluted earnings per share 4.40 3.87
Legal representative: Wang Yao
Person in charge of accounting affairs: Cong Xuenian Person in
charge of accounting department: Yin Qiuming
2.4. Income Statement
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Monetary Unit: RMB
Item Year 2017 Year 2016
1. Operating income 7,287,432,948.05 6,894,824,928.20
Less: operating costs 6,025,125,159.75 6,007,511,662.33
Business taxes and
790,967,616.84 73,103,638.46
surcharges
Selling and distribution
expenses
General and
813,483,459.91 879,948,170.35
administrative expenses
Financial expenses -129,591,360.68 -250,219,369.17
Impairment losses 480,654.94 1,062,334.79
Plus: gains from changes in
fair value (\"-\" for losses)
Investment income (\"-\"
5,917,308,205.89 4,854,529,199.01
for losses)
Including: income from
investment in associates and -2,074,635.42 -4,128,507.78
joint ventures
Asset disposal
-547,317.20 -4,967,642.85
income (\"-\" For Total Losses)
Other income 12,565,700.00
2. Operating profits (\"-\" For
5,716,294,005.98 5,032,980,047.60
Losses)
Plus: non-operating income 2,466,263.97 7,268,092.83
Less: non-operating
4,200,000.00 1,671,313.14
expenses
3. Total profits before tax
5,714,560,269.95 5,038,576,827.29
(\"-\" For Total Losses)
Less: income tax expenses 28,288,566.97 88,390,042.91
4. Net profit (\"-\" For Net
5,686,271,702.98 4,950,186,784.38
Loss)
4.1Net income from
continuing operations (\"-\" For 5,686,271,702.98 4,950,186,784.38
net deficiency)
4.2 Net income from
discontinued operations (\"-\"
For net deficiency)
5. Net of tax from other
comprehensive income
（1）Other comprehensive
income cannot reclassified
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
into the profit and loss:
Including: Re-measure the
variation of net indebtedness
or net asset of defined benefit
plans
Share in other
comprehensive income that
cannot be classified into profit
and loss under equity method
（2）Other comprehensive
income that will be reclassified
into the profit and loss
Including: Share in other
comprehensive income that
will be classified into profit and
loss under equity method
Changes in fair
value of available-for-sale
financial assets
Held-to-maturity
investment reclassified into
available-for sale financial
assets
Effective part of
cash-flow hedge profit and
loss
Balance arising
from the translation of foreign
currency financial statements
Others
6. Total comprehensive
5,686,271,702.98 4,950,186,784.38
income
7. Earnings per share
7.1 Basic earnings per share
7.2 Diluted earnings per share
2.5 Consolidated Statement of Cash Flows
Monetary Unit: RMB
Item Year 2017 Year 2016
1. Cash flows from operating activities
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Cash received from sale of goods and
23,711,590,313.33 22,869,510,223.76
rendering of services
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
Net increase from disposal of financial
assets held for trading
Cash received from interest, handling
charges and commissions
Net increase in loans from banks and
other financial institutions
Net capital increase in repurchase
business
Refunds of taxes and surcharges
Cash received from other operating
427,432,452.11 121,047,134.82
activities
Sub-total of cash inflows from operating
24,139,022,765.44 22,990,557,358.58
activities
Cash paid for goods purchased and
6,973,376,753.35 6,203,990,821.87
services received
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
Cash paid for interests, handling
charges and commissions
Cash paid for policy dividends
Cash paid to and on behalf of
1,532,216,356.37 1,510,429,701.30
employees
Cash paid for taxes and surcharges 6,535,601,442.87 5,758,348,700.63
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Cash paid for other operating activities 2,214,658,413.54 2,112,743,534.16
Sub-total of cash outflows from
17,255,852,966.13 15,585,512,757.96
operating activities
Net cash flows from operating activities 6,883,169,799.31 7,405,044,600.62
2. Cash flows from investing activities
Cash received from disposal of
30,400,345,558.70 8,035,647,871.18
investments
Cash received from returns on
564,117,891.26 422,339,653.09
investments
Net cash received from disposal of
fixed assets, intangible assets and other 608,832.88 7,726,084.69
long-term assets
Net cash received from disposal of
subsidiaries and other business units
Cash received from other investing
5,116,000.00
activities
Sub-total of cash inflows from investing
30,970,188,282.84 8,465,713,608.96
activities
Cash paid to acquire and construct
fixed assets, intangible assets and other 325,345,429.44 480,211,104.59
long-term assets
Cash paid for investments 34,805,329,229.53 13,758,155,971.19
Net increase in pledge loans
Net cash paid to acquire subsidiaries
535,902.84 191,679,668.48
and other business units
Cash paid for other investing activities
Sub-total of cash outflows from investing
35,131,210,561.81 14,430,046,744.26
activities
Net cash flows from investing activities -4,161,022,278.97 -5,964,333,135.30
3. Cash flows from financing activities
Cash received from investors
Including: cash received by
subsidiaries from investments by
minority shareholders
Cash received from borrowings
Cash received from bonds issue
Cash received from other financing
activities
Sub-total of cash inflows from financing
activities
Cash paid for debt repayments 36,364.00 83,536,364.00
Cash paid for distribution of dividends
3,169,375,338.20 2,713,542,761.01
and profits or payment of interest
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Including: dividends and profits paid to
4,696,611.20 80,672.15
minority shareholders by subsidiaries
Cash paid for other financing activities 247,704,388.41 900,000,000.00
Sub-total of cash outflows from financing
3,417,116,090.61 3,697,079,125.01
activities
Net cash flows from financing activities -3,417,116,090.61 -3,697,079,125.01
4. Effect of fluctuation in exchange rate
-11,705,912.52 5,198,479.25
on cash and cash equivalents
5. Net increase in cash and cash
-706,674,482.79 -2,251,169,180.44
equivalents
Plus: balance of cash and cash
equivalents at the beginning of the 2,456,627,358.97 4,707,796,539.41
period
6. Balance of cash and cash equivalents
1,749,952,876.18 2,456,627,358.97
at the end of the period
2.6. Statement of Cash Flows
Monetary Unit: RMB
Item Year 2017 Year 2016
1. Cash flows from operating activities
Refunds of taxes and surcharges 4,993,174,559.67 11,515,039,389.71
Cash received from other operating
activities
Cash received from other operating
9,395,953,342.76 260,746,751.78
activities
Sub-total of cash inflows from operating
14,389,127,902.43 11,775,786,141.49
activities
Cash paid for goods purchased and
6,084,319,424.50 5,870,321,906.28
services received
Cash paid to and on behalf of
628,353,375.71 525,173,610.23
employees
Cash paid for taxes and surcharges 1,959,696,424.05 1,711,283,007.62
Cash paid for other operating activities 153,591,847.77 4,412,432,440.40
Sub-total of cash outflows from
8,825,961,072.03 12,519,210,964.53
operating activities
Net cash flows from operating activities 5,563,166,830.40 -743,424,823.04
2. Cash flows from investing activities
Cash received from disposal of
13,595,278,733.32 3,672,690,576.05
investments
Cash received from returns on
8,423,249,140.68 4,013,672,891.09
investments
Net cash received from disposal of
16,755,029.89 11,965,331.46
fixed assets, intangible assets and other
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
long-term assets
Net cash received from disposal of
subsidiaries and other business units
Cash received from other investing
activities
Sub-total of cash inflows from investing
22,035,282,903.89 7,698,328,798.60
activities
Cash paid to acquire and construct
fixed assets, intangible assets and other 325,294,764.78 312,984,934.17
long-term assets
Cash paid for investments 24,564,483,908.37 3,216,081,257.61
Net cash paid to acquire subsidiaries
and other business units
Cash paid for other investing activities
Sub-total of cash outflows from investing
24,889,778,673.15 3,529,066,191.78
activities
Net cash flows from investing activities -2,854,495,769.26 4,169,262,606.82
3. Cash flows from financing activities
Cash received from investors
Cash received from borrowings
Cash received from bonds issue
Cash received from other financing
activities
Sub-total of cash inflows from financing
activities
Cash paid for debt repayments 36,364.00 36,364.00
Cash paid for distribution of dividends
3,164,678,727.00 2,712,585,527.00
and profits or payment of interest
Cash paid for other financing activities
Sub-total of cash outflows from financing
3,164,715,091.00 2,712,621,891.00
activities
Net cash flows from financing activities -3,164,715,091.00 -2,712,621,891.00
4. Effect of fluctuation in exchange rate
-4,821,072.81 55,948.78
on cash and cash equivalents
5. Net increase in cash and cash
-460,865,102.67 713,271,841.56
equivalents
Plus: balance of cash and cash
equivalents at the beginning of the 1,570,426,948.87 857,155,107.31
period
6. Balance of cash and cash equivalents
1,109,561,846.20 1,570,426,948.87
at the end of the period
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
2.7. Consolidated Statement of Changes in Shareholders' Equity
Monetary Unit: RMB
Year 2017
Equity attributable to owners of the parent company
Other equity Total
Item instruments Other Non-controllin
Less： General shareholders'
Share Perp Capital Compreh Special Surplus Undistributed g interests
Prefe Treasury ensive risk equity
capital etual reserve reserve reserve profit
rred Other stock reserve
bon Income
stock
d
1. Balance as at
1,506,988,0 741,704,07 1,141,647 753,494,
December 31 of last 23,049,443,346.09 -15,785,202.54 26,036,985,867.46
00.00 6.44 .47 000.00
year
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
1,506,988,0 741,704,07 1,141,647 753,494,
January 1 of the 23,049,443,346.09 -15,785,202.54 26,036,985,867.46
00.00 6.44 .47 000.00
current year
3.
Increases/decreases -225,943.
3,462,495,159.16 -4,385,990.99 3,457,883,224.73
in the current year
(“-” for decreases)
(1) Total
-225,943.
comprehensive 6,627,169,959.16 -8,384,829.10 6,618,559,186.62
income
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
(2) Capital contributed
3,998,838.11 3,998,838.11
or reduced by owners
a. Capital contributions
by owners
b. Capital contributions
by other equity
instruments holders
c. Amounts of
share-based
payments recognized
in owners' equity
d. Others 3,998,838.11 3,998,838.11
(3) Profit distribution -3,164,674,800.00 -3,164,674,800.00
a. Withdrawal of
surplus reserves
b. Withdrawal of
general risk reserve
c. Profit distributed to
owners (or -3,164,674,800.00 -3,164,674,800.00
shareholders)
d. Others
(4) Internal
carry-forward of
owners' equity
a. Conversion of
capital reserves into
paid-in capital (or
share capital)
b. Conversion of
surplus reserves into
paid-in capital (or
share capital)
c. Surplus reserves
offsetting losses
d . Others
(5) Special reserves
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
a. Withdrawal for the
period
b. Use for the period
(6) Others
4. Balance as at
December 31 of the
current year 1,506,988,0 741,704,07 915,704.0 753,494,
26,511,938,505.25 -20,171,193.53 29,494,869,092.19
00.00 6.44 3 000.00
Monetary Unit: RMB
Year 2016
Equity attributable to owners of the parent company
Other equity
Item instruments Total
Other Non-controlli
Per Less： Genera shareholders'
Share Prefe Capital Compre Special Surplus Undistributed ng interests
petu Ot Treasury hensive reserve reserve l risk equity
capital rred reserve profit
al he stock Income reserve
stoc
bon r
k
d
1. Balance as at
1,506,988, 741,745,168 16,334.9 753,494, 19,934,852,875.
December 31 of 4,384,481.94 22,941,480,860.89
000.00 .83 1 000.00
last year
Plus: adjustments
for changes in
accounting policies
Adjustments for
correction of
accounting errors in
prior year
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Business
Combinations Under
Common Control
Others
2. Balance as at
1,506,988, 741,745,168 16,334.9 753,494, 19,934,852,875.
January 1 of the 4,384,481.94 22,941,480,860.89
000.00 .83 1 000.00
current year
3.
Increases/decreas
1,125,31 3,114,590,470.8 -20,169,684.4
es in the current -41,092.39 3,095,505,006.57
2.56 8
year (“-” for
decreases)
(1) Total
1,125,31 5,827,168,870.8 -22,222,008.4
comprehensive 5,806,072,175.02
2.56 8
income
(2) Capital
contributed or -41,092.39 2,132,996.09 2,091,903.70
reduced by owners
a. Capital
contributions by
owners
b. Capital
contributions by
other equity
instruments holders
c. Amounts of
share-based
payments
recognized in
owners' equity
d. Others -41,092.39 2,132,996.09 2,091,903.70
-2,712,578,400.0
(3) Profit distribution -80,672.15 -2,712,659,072.15
a. Withdrawal of
surplus reserves
b. Withdrawal of
general risk reserve
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
c. Profit distributed
-2,712,578,400.0
to owners (or -80,672.15 -2,712,659,072.15
shareholders)
d. Others
(4) Internal
carry-forward of
owners' equity
a. Conversion of
capital reserves into
paid-in capital (or
share capital)
b. Conversion of
surplus reserves
into paid-in capital
(or share capital)
c. Surplus reserves
offsetting losses
d . Others
(5) Special reserves
a. Withdrawal for the
period
b. Use for the period
(6) Others
4. Balance as at
December 31 of
the current year 1,506,988, 741,704,076 1,141,64 753,494, 23,049,443,346. -15,785,202.5
26,036,985,867.46
000.00 .44 7.47 000.00 09
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
2.8.Statement of Changes in Shareholders' Equity
Monetary Unit: RMB
Year 2017
Other equity
instruments
Item Less： Other Total
Share Special Surplus Undistributed
Capital reserve Treasury Comprehens reserve shareholders'
capital reserve profit
Pre Per stock ive Income equity
ferr petu
Oth
ed al
er
sto bon
ck d
1. Balance as at
1,506,988,0 753,494,000.0
December 31 of 1,341,628,480.93 16,215,863,370.70 19,817,973,851.63
00.00
last year
Plus: adjustments
for changes in
accounting policies
Adjustments for
correction of
accounting errors in
prior year
Others
2. Balance as at
1,506,988,0 753,494,000.0
January 1 of the 1,341,628,480.93 16,215,863,370.70 19,817,973,851.63
00.00
current year
3.
Increases/decreas
es in the current 2,521,596,902.98 2,521,596,902.98
year (“-” for
decreases)
(1) Total 5,686,271,702.98 5,686,271,702.98
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
comprehensive
income
(2) Capital
contributed or
reduced by owners
a. Capital
contributions by
owners
b. Capital
contributions by
other equity
instruments holders
c. Amounts of
share-based
payments
recognized in
owners' equity
d. Others
(3) Profit distribution -3,164,674,800.00 -3,164,674,800.00
a. Withdrawal of
surplus reserves
b. Profit distributed
to owners (or -3,164,674,800.00 -3,164,674,800.00
shareholders)
c. Others
(4) Internal
carry-forward of
owners' equity
a. Conversion of
capital reserves into
paid-in capital (or
share capital)
b. Conversion of
surplus reserves
into paid-in capital
(or share capital)
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
c. Surplus reserves
offsetting losses
d. Others
(5) Special reserves
a. Withdrawal for the
period
b. Use for the period
(6) Others
4. Balance as at
1,506,988,0 753,494,000.0
December 31 of 1,341,628,480.93 18,737,460,273.68 22,339,570,754.61
00.00
the current year
Year 2016
Other equity
instruments
Other
Item Per Less：
Share Prefe Capital Compre Special Surplus
petu Treasur hensive reserve Undistributed profit Total shareholders' equity
capital rred Othe reserve reserve
al y stock Income
stoc r
bon
k
d
1. Balance as at
1,506,988, 1,341,628,
December 31 of 753,494,000.00 13,978,254,986.32 17,580,365,467.25
000.00 480.93
last year
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
Plus: adjustments
for changes in
accounting policies
Adjustments for
correction of
accounting errors in
prior year
Others
2. Balance as at
1,506,988, 1,341,628,
January 1 of the 753,494,000.00 13,978,254,986.32 17,580,365,467.25
000.00 480.93
current year
3.
Increases/decreas
es in the current 2,237,608,384.38 2,237,608,384.38
year (“-” for
decreases)
(1) Total
comprehensive 4,950,186,784.38 4,950,186,784.38
income
(2) Capital
contributed or
reduced by owners
a. Capital
contributions by
owners
b. Capital
contributions by
other equity
instruments holders
c. Amounts of
share-based
payments
recognized in
owners' equity
d. Others
(3) Profit distribution -2,712,578,400.00 -2,712,578,400.00
a. Withdrawal of
surplus reserves
b. Profit distributed -2,712,578,400.00 -2,712,578,400.00
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd.
to owners (or
shareholders)
c. Others
(4) Internal
carry-forward of
owners' equity
a. Conversion of
capital reserves into
paid-in capital (or
share capital)
b. Conversion of
surplus reserves
into paid-in capital
(or share capital)
c. Surplus reserves
offsetting losses
d. Others
(5) Special reserves
a. Withdrawal for the
period
b. Use for the period
(6) Others
4. Balance as at
1,506,988, 1,341,628,
December 31 of 753,494,000.00 16,215,863,370.70 19,817,973,851.63
000.00 480.93
the current year
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd
3. Basic Situation of the Company
Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.(hereinafter referred to as “the Company”)was established
in 26 December 2002, verified by the Government of Jiangsu Province, details referred to Reply on The
approval of Establishment of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd. by the provincial
government (SuZhengFu [2002]No.155)，and was a joint-stock company founded by Jiangsu Yanghe
Group Co.,Ltd, Shanghai Haiyan Logistics Development Co.,Ltd, Nantong Zongyi Investment
Co.,Ltd.,Shanghai Jieqiang Tobacco Sugar & Wine (Group) Co.,Ltd, Jiangsu Venture Capital Co.,Ltd,
China National Research Institute of Food and Fermentation Industries Co. Ltd, Nantong Shengfu
Industrial Trade Co., Ltd and Yang Yandong and other totally 14 nature persons. On 27 December, the
Compamy obtained the unified social credit code (91460000201357188U) issued by Jiangsu Provincial
Administration for Industry and Commerce. The registered capital was RMB 68 million and the share
capital was 68,000,000 (1 yuan per share). According to the documents verified by Jiangsu Provincial
Department of Finance (Su Cai Guo Zi [2002] No.178), all the fund capital converts into share capital
according to the ratio 1:0.65561,among which, Jiangsu Yanghe Group Co.,Ltd contributed RMB
52,264,100 of evaluated physical assets and RMB 735,900 of currency, covered into 34,747,330 shares,
accounting for 51.099% of the total share capital；Shanghai Haiyan Logistics Development Co.,Ltd
contributed RMB 15,000,000 of currency, convered into 9,834,150 shares, accounting for the 14.462%
of the total share capital; Nantong Zongyi Investment Co.,Ltd contributed RMB 15,000,000 of currency,
converted into 9,834,150 shares, accounting for 14.462% of the total share capital; ShangHai Jieqiang
Tobacco Sugar & Wine (Group) Co.,Ltd contributed RMB 7,000,000 of currency converted into
4,589,270 shares, accounting for 6.749% of the total share capital; Jiangsu Venture Capital Co.,Ltd
contributed RMB 3,000,000 of currency concerted into 1,966,830 shares, accounting for 2.892% of the
total share capital; China National Research Institute of Food and Fermentation Industries Co. Ltd
contributed RMB 1,000,000 of currency, converted into 655,611 shares, accounting for 0.964% of the
total share capital; Nantong Shengfu Industrial Trade Co., Ltd contributed RMB 1,000,000 of currency,
converted into 655,611 shares, accounting for 0.964% of the total share capital; Yang Yandong and
other totally 14 nature persons contributed RMB 8,720,200 of currency, converted into 5,717,050 shares,
accounting for 8.408% of the total share capital.
On 13 September 2009, the Company was verified by China Securities Regulatory Commission,
according to the document Reply on Approving Initial Public Offering of Jiangsu Yanghe Brewery
Joint-Stock Co., Ltd. （Zheng Jian Approval [2009] No.1077）.The Company announced the initial public
offering of 45,000,000 common shares on 27 February 2009 and was listed for transactions in SZSE
since 6 November 2009.
According to the decisions of 2010 Shareholders’ General Meeting on 23 April 2011, based on the total
capital of 450,000,000 shares on 31 December 2010, the capital reserves per 10 shares were converted
into 10 shares. After the conversion, the total share capital of the Company was 900,000,000 as well as
registered capital of RMB 900,000,000.
According to the decision of 2011 Shareholders’ General Meeting on 17 May 2012, based on the total
capital of 900,000,000 shares on 31 December 2011, the capital reserves per 10 shares were converted
into 2 shares. After the conversion, the total share capital of the Company was 1,080,000,000 as well as
registered capital of RMB 108,000,000.
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd
According to the Proposal of Initial Share Repurchase of Public Shares approved by 2012 Shareholders’
General Meeting on 17 May 2013, the Company used own funds to repurchase public shares and the
price of public shares was no more than RMB 70.00 per share, as well as the total amount of repurchase
shares was no more than RMB 10 billion. The way of repurchase was centralized competitive bidding
approved by SZSE. Until May 2014, the amount of repurchase shares was 3,580,000 and the total
amount of payment RMB 157,793,218.58. The shares repurchased had been canceled according to the
law with the procedure of capital reduction. After the repurchase, the registered capital became RMB
1,076,420,000 and the total share capital of the Company became 1,076,420,000.
According to the decision of 2014 Shareholders’ General Meeting on 26 May 2015, based on the total
capital of 1,076,420,000 shares on 31 December 2011, the capital reserves per 10 shares were
converted into 4 shares. After the conversion, the total share capital of the company was 1,506,988,000
as well as the registered capital of RMB 1,506,988,000.
Registered address of the Company：118 Middle Avenue,Yanghe Town, Suqian City, Jiangsu Province
Company type： Incorporated company (Listed)
Industry of the Company: Brewing food industry
Business scope of the Company：production and sale of liquor, wholesaling and retailing of prepackaged
food,grain purchase, self-operating and agency of import and export of various types of merchandise
and technology excluding merchandise and technology limited or prohibited by the state for import and
export, domestic trade, construction of e-commerce platform and online sales.( Business activities of
projects needed to be approved by law must be approved according to related departments）
Parent company of the Company：Jiangsu Yanghe Group Co.,Ltd.
The scope of the Company's consolidated financial statements is based on control, and all subsidiaries
are included in the consolidation scope of the consolidated financial statements.
Changes of the scope of consolidation are as follows:
3.1 Subsidiaries that are newly incorporated into the scope of consolidation are shown in the following
table:
Name Measure of gaining
ZYG TECHNOLOGY INVESTMENT LTD Merger of enterprises under different
controlling group
Guizhou Welcome Drink Stock Co.,Ltd Merger of enterprises under different
controlling group
Dream Blue Chuanhaihui (Shiyan) Trade Investment Merger of enterprises under different
Co.,Ltd. controlling group
Suqian Sujiu Logistics Co.,Ltd. Establishment
Jiangsu Blue Dream E-commerce Co.,Ltd. Establishment
Jiangsu Yanghe Weiketang Network Technology Co.,Ltd. Establishment
3.2 Subsidiaries that are no longer incorporated into the scope of consolidation are shown in the
following table:
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd
Name Reason
Taizhou Mengye Trading Co.,Ltd. Liquidation and cancellation
Siyang Yanghe Package Service Co.,Ltd. Liquidation and cancellation
Details of the subsidiaries incorporated into the consolidated financial statements show on ‘9. Interests
in subsidiaries’, Changes in the scope of consolidation show on ‘8, change in consolidated scope’.
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 recognized and
measured its accounting items in compliance with the Accounting Standards for Business
Enterprises—Basic Standards and various concrete accounting standards, and other relevant provisions
on the basis of actual transactions and events.
4.2. Going concern
The Company has sustainable operation ability for at least 12 months from the end of the reporting
period. In addition, there is no significant event affecting going concern.
5.Significant accounting policies and accounting estimates
Whether the Company needs to comply with the requirement of special industry
No
The notes of detailed accounting policies and accounting estimates:
Refer to Note 5 the Change of significant accounting policies and accounting estimates
5.1. Statement of compliance with the ASBE
The financial statements of the company have been prepared in accordance with ASBE, and present
truly and completely, the group’s financial position, the Company’s and results of operations, and
changes in shareholders' equity, cash flows and other related information for the reporting period.
5.2. Accounting period
The Company’s accounting period is calendar year as its accounting year, i.e. from January 1st to
December 31st.
5.3. Operating cycle
The Company’s accounting period is 12 months.
5.4. Functional currency
The Company has adopted China Yuan (RMB) as functional currency.
5.5. The accounting treatment of business combinations involving enterprises under
common control and not under common control
5.5.1. Accounting treatment method for business combination under common
control
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd
Business combination under common control is accounted for under pooling of interest method. Assets
and liabilities obtained by the Company through business combination under common control shall be
measured at the book value as stated in the combine’s accounting record on the combination date. The
share of the book value of the merged party’s owner’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 capital premium) is adjusted according to the difference between
initial investment cost and the book value of consideration paid for the combination (including paid cash,
transferred non-cash assets, book value of liabilities incurred or assumed or total par value of shares
issued). If the capital reserve (stock premium or capital premium) is insufficient to offset, the retained
earnings shall be adjusted.
5.5.2. Accounting treatment method of business combination not under common
control
The Company accounts for business combination not under common control under purchase method.
All the net identifiable assets, liabilities or contingent liabilities obtained by the Company through
business combination not under common control shall be measured based on the fair values of assets
paid, liabilities incurred or assumed and the equity securities issued as consideration for combination on
the acquisition date, and differences between their fair values and book values shall be included in the
current profit and loss.
A.The cost of acquisition shall be respectively determined for the following conditions;
1.Business combination of a transaction implementation, the combination cost shall be the sum of the
fair values of the assets given, the liabilities incurred or assumed and the equity securities issued by the
Company in exchange for the control on the acquisition date, and contingent considerations meeting the
recognition conditions. The combination cost is the initial investment costs of long-term equity
investments.
2.Business combination through multiple transactions step by step to realized, the combination cost shall
be the sum of the fair value measurement on the acquisition of the equity investment that holding before
the acquisition date and cost of all the new investment on the acquisition date. Long-term equity
investment cost in individual financial statements shall be the sum of the book value of the equity
investment that holding before the acquisition date and cost of all the new investment on the acquisition
date. Except for a single transaction.
B.The Company, on the acquisition date, allocates the combination costs between the identifiable assets
and liabilities acquired
1.All assets of the acquiree obtained by the Company through business combination(not limited to those
that have been recognized by the acquiree), other than intangible assets, shall be separately recognized
and measured at fair value when the future economic benefits arising thereafter are expected to flow into
the Company and the fair value can be reliably measured.
2.Intangible assets of the acquiree obtained by the Company through business combination shall be
separately recognized and measured at fair value when their fair values can be reliably measured.
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd
3.All liabilities of the acquiree obtained by the Company through business combination, other than
contingent liabilities, shall be separately recognized and measured at fair value when fulfillment of
relevant obligations are expected to bring future economic benefits to the Company and the fair value
can be reliably measured.
4.Contingent liabilities of the acquiree obtained by the Company through business combination shall be
separately recognized as liabilities and measured at fair value when their fair values can be reliably
measured.
5.When the Company allocates the cost of business combination and recognizes the identifiable assets
and liabilities acquired through combination, it shall not include any goodwill and deferred income taxes
that have been recognized by the acquiree before the business combination.
C.Treatment of the difference between the business combination costs and the fair value of net
identifiable asset acquired from the acquiree through combination
1.The Company shall recognize the difference of the combination costs in excess of the fair value of the
net identifiable asset acquired from the acquiree through combination as goodwill. The Company shall
not amortize the goodwill after initial recognition, but shall conduct impairment test at the end of the year.
The goodwill is measured at the amount of its cost minus accumulated provision for the impairment.
2.The Company shall recognize the difference of the combination costs in short of the fair value of the
net identifiable asset acquired from the acquiree through combination according to the following
provisions:
2.1Review the measurement of fair values of all the identifiable assets, liabilities and contingent liabilities
acquired from the acquiree and the combination costs;
2.2After the review, if the combination costs are still in short of the fair value of the net identifiable asset
acquired from the acquiree through combination, include the difference in the current profit and loss.
5.5.3. Treatment of relevant expenses arising from the Company’s business
combination
A.Relevant expenses directly arising from the business combination of the Company (including the
expenses for audit, legal services, evaluation and consultation or other intermediary costs for business
combination) shall be included in the current profit and loss when they are incurred.
B.Commissions, fees and other expenses paid on issuance of bonds and undertaking of other debts for
the business combination shall be included in the initial measurement amount of debt securities.
1.Where the bonds are issued at discount or par value, that part of expenses will increase the amount of
the discount;
2.Where the bonds are issued at premium, that part of expenses will decrease the amount of the
premium.
C.Fees, commissions, and other transaction expenses paid on issuance of equity securities as
combination consideration in the business combination shall be included in the initial measurement
amount of equity securities.
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd
1.Where the equity securities are issued at premium, that part of expenses shall be deducted from
capital reserves (stock premium);
2.Where the equity securities are issued at par value or discount, that part of expenses shall be
deducted from the retained earnings.
5.6.Preparation of consolidated financial statements.
5.6.1. Consistency of accounting policies and accounting period
All the subsidiaries within the consolidation scope of consolidated financial statements shall adopt the
same accounting policies and accounting periods as those of the Company. If the accounting policies or
accounting periods of a subsidiary are different from those of the Company, the financial statements of
the subsidiary, upon preparation of consolidated financial statements, shall be adjusted according to the
accounting policies and accounting periods of the Company.
5.6.2. Preparation method of consolidated financial statements
The consolidated financial statements are based on the financial statements of the Company and its
subsidiaries, and are prepared by the parent company according to other relevant information after the
adjustment to long-term equity investments in subsidiaries under the equity method and the elimination
of effects of the internal transactions between the Company and its subsidiaries and between the
subsidiaries on the consolidated financial statement.
5.6.3. Reflection of excess losses incurred to a subsidiary in the consolidated
financial statements
In the consolidated financial statements, where the current losses undertaken by the parent company
are in excess of its share of owners’ equity in the subsidiary at the beginning of the period, the balance
shall reduce the owners’ equity (retained earnings) of the parent company; where the current losses
undertaken by a subsidiary’s non-controlling shareholders excess those non-controlling shareholders’
share of owners’ equity in the subsidiary at the beginning of the period, the balance shall reduce the
non-controlling interests.
5.6.4. Changes in number of subsidiaries during the reporting period
A.Acquisition of subsidiaries during the reporting period
1.Treatment of acquiring subsidiaries from business combination under common control during the
reporting period
During the reporting period, if the Company acquires subsidiaries from the business combination under
common control, the beginning balance in the consolidated balance sheet shall be adjusted. The income,
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd
expenses and profits of the newly acquired subsidiaries from the beginning to the end of the reporting
period shall be included in the consolidated income statement. The cash flows of the newly acquired
subsidiaries from the beginning to the end of the reporting period shall be included in the consolidated
statement of cash flows.
2.Treatment of acquiring subsidiaries from business combination not under common control during the
reporting period
During the reporting period, if the Company acquires subsidiaries from the business combination not
under common control, the beginning balance in the consolidated balance sheet shall not be adjusted.
The income, expenses and profits of the newly acquired subsidiaries from the acquisition date to the end
of the reporting period shall be included in the consolidated income statement. The cash flows of the
newly acquired subsidiaries from the acquisition date to the end of the reporting period shall be included
in the consolidated statement of cash flows.
B.Treatment of disposing subsidiaries during the reporting period
During the reporting period, if the Company disposes subsidiaries, the beginning balance in the
consolidated balance sheet shall not be adjusted. The income, expenses and profits of the newly
disposed sub diaries from the beginning to the disposal date shall be included in the consolidated
income statement. The cash flows from the beginning to the disposal date shall be included in the
consolidated statement of cash flows.
5.7.Classification of joint venture arrangements and the accounting treatment
method of common operation
5.7.1. Classification of joint venture arrangements
A joint arrangement is classified as either a joint operation or a joint venture. A joint operation is a joint
arrangement whereby the joint operators have rights to the assets, and obligations for the liabilities,
relating to the arrangement. A joint venture is a joint arrangement whereby the joint ventures only have
the rights to the net assets under this arrangement.
A joint arrangement that is not structured through a separate vehicle shall be classified as a joint
operation. A separate vehicle refers to a separately identifiable financial structure, including separate
legal entities or entities without a legal personality but recognized by statute.
A joint arrangement that is structured through a separate vehicle is usually classified as a joint venture.
However, when a joint arrangement provides clear evidence that it meets any of the following
requirements and complies with applicable laws and regulations as a joint operation:
a) The legal form of the joint arrangement indicates that the parties that have joint control have
rights to the assets, and obligations for the liabilities, relating to the arrangement.
b) The terms of the joint arrangement specify that the parties that have joint control have the rights
to the assets, and the obligations for the liabilities, relating to the arrangement.
c) Other facts and circumstances indicate that the parties that have joint control have rights to the
assets, and the obligations for the liabilities, relating to the arrangement---for example, the parties that
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd
have joint control have rights to substantially all of the output of the arrangement, and the arrangement
depends on the parties that have joint control on a continuous basis for settling the liabilities of the
arrangement.
5.7.2. Accounting treatment of a joint operation
A joint operator shall recognize the following items in relation to its interest in a joint operation, and
account 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; and
e) Its solely-incurred expenses and its share of any expenses incurred jointly.
5.8.Cash and cash equivalents
Cash comprises cash on hand and deposits that can be readily withdrawn on demand.
Cash equivalents are the company’s short-term (due within 3 months from purchase date), highly liquid
investments that are readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value.
5.9.Foreign currency transactions and translation of foreign currency statements
5.9.1. Accounting method of foreign currency transactions
A.Initial recognition of foreign currency transactions
For foreign currency transactions incurred, the Company converts the amount in foreign currency into
the amount in functional currency at the spot exchange rate (middle rate) announced by the People’s
Bank of China on the transaction date. Among them, for foreign currency exchange occurred or
transaction involving foreign currency exchange, the Company converts at the exchange rate actually
adopted on the transaction date.
B.Adjustment or settlement on the balance sheet date or settlement date
On the balance sheet date or the settlement date, the Company handles foreign currency monetary
items and foreign currency non-monetary items separately in accordance with the following methods:
1.Accounting principles for handling foreign currency monetary items
For foreign currency monetary items, on the balance sheet date or the settlement date, the Company
converts them by using the spot exchange rate (middle rate) prevailing on the balance sheet date or
settlement date, and adjusts the amount in functional currency of foreign currency monetary items in
respect of the difference arising from exchange rate fluctuations, which shall be treated as exchange
difference at the same time. Among them, the exchange differences arising from foreign currency loans
relating to the acquisition, construction or production of assets eligible for capitalization shall be included
in the costs of assets eligible for capitalization; other exchange differences shall be included in the
current financial expenses.
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd
2.Accounting principles for handling foreign currency non-monetary items
a) For foreign currency non-monetary items measured at historical cost, the Company shall convert
them at the spot exchange rate (middle rate) prevailing on the transaction date, with their amounts in
functional currency remaining unchanged and no exchange differences incurred.
b) For an inventory that is measured at the lower of its costs or its net realizable values, if the net
realizable value is determined in foreign currency, the Company, when determining the value of the
inventory at the end of the period, shall firstly convert the net realizable value into functional currency
and then compare it with the inventory cost reflected in functional currency.
c)Non-monetary items measured at fair value that is reflected in foreign currency at the end of the period,
the Company shall firstly translate the foreign currency into the amount in functional currency at the spot
exchange rate on the date when the fair value is determined, and then compare it with the original
functional currency amount. Difference between the translated functional currency amount and the
original functional currency amount is treated as profit or loss from changes in fair value (including
changes in exchange rate) and is recognized in current profit and loss.
5.9.2. Accounting treatment method for translation of foreign currency statements
A.The Company shall translate the financial statements of foreign operations in accordance with the
following methods:
1.Assets and liabilities in the balance sheets shall be translated at the spot exchange rates on balance
sheet date. Shareholders’ equity items, except for the item of \"undistributed profits\", are translated at the
spot exchange rates on the dates when the transactions occur.
2.Revenue and expense items in the income statement are translated at the spot exchange rates on the
dates when the transactions occur or at the exchange rate determined in a systematical and reasonable
method and similar to the spot exchange rate on the day when the transactions occur.
3.Differences arising from the above translations of foreign currency financial statements are separately
listed under ‘other comprehensive income’ in the consolidated balance sheet.
a) The Company shall translate the financial statements of foreign operations that are in virulent inflation
economy in accordance with the following methods:
i.The Company restates the items in the balance sheet by using the general price index, and restates the
items in the income statement by using the changes in general price index, and then converts those
items at the spot exchange rate on the latest balance sheet date.
ii. Where the foreign operations are no longer in virulent inflation economy, the Company ceases to
restate the financial statements and converts the financial statements restated according to the price
level on such cease.
b) Where the Company disposes of an overseas business, it shall transfer the foreign currency financial
statements exchange difference, which relates to the business disposed of and is presented under the
items of the other comprehensive income in the balance sheet, from the other comprehensive income
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd
item to the gain or loss on disposal for the current period. If the overseas business is partly disposed of,
the foreign currency financial statements exchange difference shall be calculated in proportion to the
percentage of disposal and transferred to gain or loss on disposal for the current period.
5.10. Financial Instruments
Financial instruments include financial assets, financial liabilities and equity instruments.
5.10.1. Classification of financial instruments
A.Classification of financial assets
Based on business characteristics, investment strategies and risk management requirements, the
Company classifies the financial assets it has obtained into the following four categories: (1) financial
assets measured at fair value through current profit and loss; (2) held-to-maturity investments; (3) loans
and receivables; and (4) available-for-sale financial assets.
Financial assets measured at fair value through current profit and loss include: (1) financial assets held
for trading ; (2)financial assets directly designated to be measured at fair value through current profit and
loss; (3)investments in subsidiaries that shall not be consolidated by the investment entities ;
(4)investments held by venture capital organizations, mutual funds or similar entities.
The equity investment which hasn’t control , joint control or significant influence over the investee, based
on business characteristics, investment strategies and risk management requirements, can be divided
into the first kind of financial assets measured at fair value through current profit and loss or the fourth
kind of available-for-sale financial assets. In some special cases, the equity investment can be
measured under the cost method.
B.Classification of financial liabilities
Based on business characteristics and risk management requirements, the Company classifies the
financial liabilities it undertakes into the following two categories: (1) financial liabilities measured at fair
value through current profit and loss (including financial liabilities held for trading and financial liabilities
directly designated to be measured at fair value through current profit and loss); and (2) other financial
liabilities.
5.10.2. Recognition basis and measurement method of financial instruments
A. Recognition basis of financial instruments
When the Company becomes a party to a financial instrument, it shall recognize a financial asset or
financial liability.
B.Measurement method of financial instruments
1.Financial assets or financial liabilities measured at fair value through current profit and loss: they are
initially measured at the amount of fair value upon acquisition, and relevant transaction expenses are
included in the current profit and loss when incurred. For cash dividends declared but not distributed or
bond interest matured but not drawn that have been included in the actual price paid, they shall be
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd
separately recognized as dividends receivable or interest receivable. Cash dividends or bond interest
gained during the holding period shall be recognized as investment income. On the balance sheet date,
they shall be measured at fair values and the changes in their fair values shall be included in current
profit or loss. When disposing of a financial asset held for trading, the Company recognizes the
difference between the payment actually received (dividends receivable or interest receivable, if any,
shall be deducted) and the book value of the financial asset held for trading on the disposal date, and
transfers the accumulative amount previously included in profit or loss on changes in fair value to the
investment income.
2.Held-to-maturity investments: they are initially measured at the total amount of their fair values upon
acquisition and related transaction expenses. For bond interest matured but not drawn that is included in
the actual price paid, they are independently recognized as interest receivable. Interest income is
calculated and recognized during the holding period according to the amortized cost and effective
interest rates, and included in the investment income. The effective interest rate is determined upon
acquisition, and remains unchanged during the expected duration or any applicable shorter period. On
the balance sheet date, they are measured at amortized costs. Upon disposal, the difference between
the actual proceeds (interest receivable, if any, shall be deducted) and the book value of the
held-to-maturity investment is recognized as investment income.
3.Loans and receivables: mainly refer to the loans issued by financial enterprises and creditor’s rights
receivable arising from external sales of goods or rendering of service by enterprises. It is measured
based on amortized cost by adopting effective interest method. The sum of principal and related trading
expenses of loans issued by financial enterprises according to current market conditions is recognized
as initial recognition amount. For creditor’s rights receivable arising from external sales of goods or
rendering of service by enterprises, their initial recognition amounts shall be the contract price or
agreement price receivable from the purchaser. Receivables’ interest income is recognized under the
effective interest method. Upon recovery or disposal, the difference between the price received and the
book value of a receivable is included in the current profit and loss.
4.Available-for-sale financial assets: they are initially recognized at the sum of fair value upon acquisition
and relevant transaction expenses. For cash dividends declared but not distributed or bond interest
matured but not drawn that has been included in the actual price paid, it shall be separately recognized
as dividends receivable or interest receivable. Cash dividends or bond interest gained during the holding
period shall be recognized as investment income. On the balance sheet date, the available-for-sale
financial assets are measured at fair values and the changes in their fair values are included in other
comprehensive income. Upon disposal, the difference between the payment actually received (dividends
receivable or interest receivable, if any, shall be deducted) and the book value of an available-for-sale
financial asset shall be included in investment income; and meanwhile, the amount arising from the
accumulated changes in fair value, which have been previously included in other comprehensive income,
shall be transferred out and included in the investment profit or loss.
5.Other financial liabilities: they are initially recognized at fair values at the time of occurrence plus
related transaction costs. Other financial liabilities, whose interest expenses are recognized by using the
effective interest method, are measured at their amortized costs on the balance sheet date.
5.10.3. Recognition basis and measurement method of transfer of financial assets
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A.Derecognition criteria of financial assets
When transfer of financial assets occurs, if nearly all of the risks and rewards of ownership of the
financial assets have been transferred to the transferee, the Company derecognizes the financial assets;
if nearly all of the risks and rewards of ownership of the financial assets are retained, the Company shall
not derecognize the financial assets.
When determining whether the transfer of a financial asset meets the above derecognition criteria of
financial assets, the Company adopts the principle of substance over form.
B.Treatment of transfer of financial assets satisfying the criteria of derecognition
The Company classifies the transfer of a financial asset into the entire transfer and the partial transfer of
financial asset.
1.If the entire transfer of financial asset satisfies the criteria of derecognition, the difference between the
amounts of the following two items shall be included in the current profit and loss:
a) The book value of the transferred financial asset;
b) The sum of the consideration received from the transfer and the accumulated amount of the changes
in fair value originally and directly included in other comprehensive income (the situation where the
financial asset transferred is an available-for-sale financial asset is involved in).
2.If the partial transfer of financial asset satisfies the criteria of derecognition, the entire book value of the
transferred financial asset shall be divided between the derecognized and recognized parts according to
their respective fair values and the difference between the amounts of the following two items shall be
included in the current profit and loss:
a) The book value of derecognized part;
b)The sum of the consideration for the derecognized part and the portion of derecognition corresponding
to the accumulated amount of the changes in fair value originally and directly included in other
comprehensive income (the situation where the financial asset transferred is an available-for-sale
financial asset is involved in).
3.Treatment of transfer of financial assets not satisfying the criteria of derecognition
If the transfer of financial assets does not meet the derecognition criteria, the financial assets shall
continue to be recognized, and the consideration received will be recognized as a financial liability.
5.10.4. Derecognition criteria of financial liabilities
A.A financial liability shall be wholly or partly derecognized if its present obligations are wholly or partly
dissolved. Where the Company enters into an agreement with a creditor so as to substitute the existing
financial liabilities with any new financial liability, and the new financial liability is substantially different
from the contractual stipulations regarding the existing financial liability, it shall derecognize the existing
financial liability, and recognize a new one at the same time.
B.Where substantial revisions are made to some or all of the contractual stipulations of the existing
financial liability, the Company shall derecognize the existing financial liability wholly or partly, and at the
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd
same time recognize the financial liability with revised contractual stipulations as a new financial liability.
C.Upon whole or partial derecognition of financial liabilities, the difference between the book value of the
financial liabilities derecognized and the consideration paid (including non-cash assets surrendered or
new financial liabilities assumed) shall be included in the current profit and loss.
D.Where the Company repurchases part of its financial liabilities, it shall, on the repurchase date,
allocate the entire book value of financial liabilities according to the comparative fair value of the part that
continues to be recognized and derecognized part. The difference between the book value allocated to
the derecognized part and the considerations paid (including non-cash assets surrendered and the new
financial liabilities assumed) shall be included in the current profit and loss.
5.10.5. Method to determine the fair value of financial instrument
A.The fair value of a financial asset or financial liability for which there is an active market shall be
determined in accordance with the quoted price in such active market at the measurement date.
B.The fair value of a financial asset or financial liability for which there isn’t an active market shall be
using valuation techniques. The recognition of the specific principles and methods are dealt with under
“Accounting Standard for Business Enterprises No.39—Fair Value Measurement”.
5.10.6. Criteria to identify, way to test and method to provide for the impairment of
financial assets (excluding receivables)
On the balance sheet date, the Company shall check the book values of its financial assets (excluding
the financial assets measured at fair value through current profit and loss), whether on an individual
basis or on a combination basis, recognizes impairment losses on the financial assets with objective
evidence of impairment, and provides reserves for the impairment. The objective evidence of impairment
of a financial asset includes the serious financial difficulties faced by the issuer or debtor, potential
bankruptcy or other financial reorganization incurred to the debtor, and the incapability of the financial
asset to be continuously traded in active market caused by the serious financial difficulties incurred to
the issuer, severe or prolonged decline in the fair value of equity instrument investment and other
adverse situations.
Methods to test and make provision for impairment of held-to-maturity investment
On the balance sheet date, if there is any objective evidence showing that any impairment has occurred
to a held-to-maturity investment, the impairment loss is recognized at the difference between its book
value and its present value of estimated future cash flows.
1.For a held-to-maturity investment that is individually significant, the Company conducts separate
impairment test. If there is any objective evidence of impairment, the Company recognizes the
impairment losses at the difference of its present value of estimated future cash flows in short of its book
value, and shall accordingly make the provision for such impairment.
2.For held-to-maturity investments that are individually insignificant and held-to-maturity investments
that are individually significant but have no impairment according to the separate test, they are divided
into several groups according to similar credit risk characteristics. The impairment losses and provisions
for impairment of these groups are calculated and determined based on certain proportions of their
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd
balances on the balance sheet date.
3.Methods to test and make provision for impairment of available-for-sale financial asset
On the balance sheet date, if there is any objective evidence showing that an available-for-sale financial
asset is impaired, the impairment provision shall be accrued and the impairment loss shall be recognized.
For an equity instrument investment, if significant or non-temporary decline in fair value of the
available-for-sale equity investment is found after giving comprehensive consideration to relevant factors,
it can be concluded that the available-for-sale equity investment is impaired. The \"significant decline\"
refers to a cumulative decline in the fair value exceeding 50% of the cost; and the \"non-temporary
decline\" refers to a continuous decline in the fair value of more than 12 months.
When making provision for the impairment of an available-for-sale financial asset, the accumulated loss
arising from the decline in fair value that is previously included in other comprehensive income shall be
transferred out and included in the current profit and loss. The accumulated loss transferred out shall be
balance of the available-for-sale financial asset’s initial acquisition cost after deducting the principal
recovered and amortized amount, present fair value and impairment loss previously recorded in profit or
loss.
After the recognition of an impairment loss, if there is objective evidence showing that the value of
financial assets has been recovered and such recovery is objectively related to the events occurring
after the recognition of such loss, the impairment loss previously recognized shall be reversed, the
impairment loss of available-for-sale equity investment shall be reversed and recognized as other
comprehensive income, and the impairment loss of available-for-sale debt instrument shall be reversed
and included in the current profit and loss.
For an equity instrument investment that has no quoted price in active market and whose fair value
cannot be reliably measured, or a derivative financial asset that is linked to the equity instrument and
settled through delivery of such equity instrument, when they are impaired, the difference between the
book value of the financial asset and the present value of future cash flows discounted based on the
prevailing market rate of return for a similar financial asset shall be recognized as an impairment loss
and included in the current profit and loss. Once recognized, the impairment loss shall not be reversed.
5.10.7. Accounting treatment method of reclassifying the undue held-to-maturity
investments as available-for-sale financial assets
Where it is not suitable to classify one investment as a held-to-maturity investment any more due to the
change in intention or ability to hold the investment, the Company shall reclassify such investment as
available-for-sale financial assets; where the Company partly disposes or reclassifies a held-to-maturity
investment large in amount, and such disposal or reclassification does not arise from any independent
event that is not under the control of the Company, not expected to recur and difficult to reasonably
anticipated, the remaining portion of the investment shall also be classified as available-for-sale financial
asset.
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd
5.11.Receivables
5.11.1. Individually significant receivables whose provisions are made separately
Individually significant receivables refer to accounts
Recognition criteria of individually significant receivables receivable whose ending balances are over RMB5,000,
000.
On the balance sheet date, the Company separately
conducts impairment tests on those individually significant
receivables. If there is any objective evidence of
impairment, an impairment loss is recognized and a
provision for bad debt is made, according to the difference
of the present value of estimated future cash flows in short
of the book value; Individually significant receivables that
are proved to be not impaired according to the tests shall be
incorporated into other individually insignificant receivables,
Provision method of individually significant receivables
and their provisions for bad debts shall be made by using
the aging analysis method based on their ending balances.
Objective evidence of impairment incurred to receivables
includes: (1) the debtor has significant financial difficulty; (2)
the debtor violates contractual terms (such as the breach of
contract or delay in repaying interest or principal); (3) a
concession is made to the debtor in financial difficulty after
considering economic or legal reasons; (4) the debtor is
likely to face bankruptcy or other debt restructuring.
5.11.2. Receivables whose bad debt provisions are made by portfolio
Portfolio name Provision method of bad debt
Aging Portfolios Aging analysis method
Other Portfolios Other method
Among portfolios, adopting aging analysis method：
√ Applicable □ N/A
Proportion of provision for Proportion of provision for other
Aging
accounts receivable (%) receivables (%)
Within 1 Year (Inclusive) 5.00% 5.00%
1-2 years 10.00% 10.00%
2-3 Years 30.00% 30.00%
3-4 Years 50.00% 50.00%
4-5 Years 80.00% 80.00%
Over 5 Years 100.00% 100.00%
Among portfolios, adopting percentage of balance method:
□ Applicable √ N/A
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd
Among portfolios, adopting other method:
□Applicable √ N/A
5.11.3. Individually insignificant receivables whose provisions are made separately
Individually insignificant receivables refer to
Reason for making provision for bad debt
accounts receivable whose ending balances are
separately
less than RMB5,000, 000.
The Company carries out separate impairment
tests on receivables that are individually
insignificant but have the following characteristics
(such as receivables involved in dispute or
litigation with the debtor and requiring arbitration;
and receivables for which there are clear
indications that the debtor is unable to fulfill the
repayment obligations). If there is any objective
evidence of impairment, the Company shall
Provision method of bad debt
recognize the impairment loss and make the bad
debt provision according to the difference of the
present value of future cash flows in short of the
book value. Meanwhile, for receivables that are
individually insignificant after the bad debt
provisions separately made are deducted, their
bad debt provisions shall be made according to
principles applied to portfolios of receivables with
similar credit risk characteristics by aging.
5.12.Inventory
Whether the Company needs to comply with the disclosure requirement of special industry.
No
5.12.1. Classification of inventory
Inventories are classified as: raw materials, goods in progress, stock commodities, consigned
processing materials, revolving materials (including low-cost consumables, etc.
Measurement method of dispatched inventories
Dispatched materials and stock commodities are accounted for by using the weighted average method.
5.12.2. Basis to determine net realizable values of inventories and method of
provision for diminution value of inventories
A.Determination basis of net realizable values of inventories
1.In normal operation process, for merchandise inventories held directly for sale, including stock
commodities (finished goods) and materials for sale, their net realizable values are determined at their
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd
estimated selling prices minus their estimated selling expenses and relevant taxes and surcharges.
2.In normal operation process, for material inventories that need further processing, their net realizable
values are determined at the estimated selling prices of finished goods minus estimated costs to
completion, estimated selling expenses and relevant taxes and surcharges.
3.For inventories held to execute sales contract or service contract, their net realizable values are
calculated on the basis of contract price. If the quantities of inventories specified in the sales contracts
are less than the quantities held by the Company, the net realizable value of the excess portion of
inventories shall be based on general selling prices.
4.The materials held for production shall be measured at cost if the net realizable value of the finished
products is higher than the cost. If a decline in the value of materials shows that the net realizable value
of the finished products is lower than the cost, the materials shall be measured at the net realizable
value.
B.Provision for diminution in value of inventory
Provisions for diminution in value of inventory are made at the lower of costs or net realizable values on
a single basis. For inventories with large quantity and relatively low unit prices, the provision for loss on
decline in value of inventories shall be made on the ground of the categories of inventories.
5.12.3. Inventory system
The Company adopts perpetual inventory system and takes physical inventory counts on a regular
basis.
5.12.4. Amortization method of revolving materials
A.Amortization method of low-cost consumables:
Low-cost consumables are amortized in full at once.
B.Amortization method of packaging materials
Packing materials are amortized in full at once when fetched for use by the Company.
5.13. Assets held for sale
A.Scope of assets held for sale and disposal groups
The Company will classify the non-current asset or disposal groups as asset held for sale when the
Company recover the book value of non-current or disposal group mainly by selling (including exchange
of non-monetary assets with commercial nature ) rather than continuous usage.
Disposal group refers to a group of assets recognized as a whole to be sold or disposed by other ways in
a transformation and the liabilities directly related to these assets in this transformation.
B.Recognition condition of assets held for sale and disposal groups
The Company recognizes the non-current assets or disposal groups which meet with the following
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd
conditions as assets held for sale:
The assets or disposal groups will be immediately sold according to the usual terms of selling this kind of
components under the current conditions;The transformation will most likely occur,and namely the
Company had made a decision on the transformation and obtained certain purchase commitments. The
transformations should be completed within 1 years. The components shall be sold after gaining the
approval from the relevant authority institutions of the Company or supervision department according to
the regulations
C.Accounting treatment method and presentation of assets held for sale and disposal group
The Company measures the book value of the non-current assets or disposal groups according to
relevant accounting standards before classifying them as assets held for sale for the first time.
When the Company initially measures or remeasures the non-current assets or disposal groups held for
sale on the balance sheet date, if the book value is higher than its fair value minus selling expenses, the
book value shall be written down to the fair value minus selling expenses. The amount written down is
recognized as an impairment loss and it is included in current profits and losses. Meanwhile, the
provision for assets held for sale shall be made. For the amount of impairment losses of disposal groups
held for sale, firstly it deducts the book value of goodwill in the disposal groups,and then deducts the
book value in proportion according to the proportion of the book value of each non-current asset to the
total book value. The non-current assets held for sale are not depreciated or amortized.
The non-current assets held for sale or assets in the disposal groups held for sale cannot offset the
liabilities in the disposal groups. They should be separately listed as current assets and current liabilities.
For the Company that loses control of its subsidiaries because of selling its investment in subsidiaries,
whether the Company retain a part of equity investment or not, the investment in subsidiaries shall be
classified as assets held for sale as whole in the individual financial statements of the parent company
and all assets and liabilities of the subsidiaries shall be classified as assets held for sale in the
consolidated financial statement, when the investment in subsidiaries planned to be sold meets the
classifying conditions of the assets held for sale.
5.14. Long-Term Equity Investment
5.14.1. Recognition of the initial investment costs of long-term equity investments
A.For long-term equity investments from business combinations, the initial investment cost shall be
recognized in accordance with the provisions mentioned in Note 3.5, Accounting Method for Long-term
Equity Investment from Business Combinations under Common Control and Business Combination not
under Common Control.
B.Except for the long-term equity investments arising from business combinations, those obtained by
other means shall recognize their initial investment costs in accordance with the following provisions:
1.For the long-term equity investments obtained by cash paid, the Company recognizes the actual
purchase price as the initial investment costs. The initial investment costs include directly related
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd
expense, taxes and other necessary expenses of obtaining long-term equity investments.
2.For the long-term equity investments acquired by the issue of equity securities (equity instrument), the
initial investment cost shall be the fair value of the equity securities (equity instrument) issued. If the fair
value of the long-term equity investment obtained is more reliable than equity securities issued, the initial
investment cost shall be the fair value of the long-term equity investment made by the investors. The
cost directly attributable to the issue of equity securities (equity instrument), including fees, commissions,
etc., write-downs premium price of the issue, if premium price of the issue is insufficient, write-downs
surplus reserve and undistributed profit in turn. For the long-term equity investments acquired by the
issue of debt securities (debt instrument) , reference through the issuance of equity securities (equity
instrument).
3.For long-term equity investments obtained by debt restructuring, the Company recognizes the fair
value of shares of debt-for-equity swap as the initial investment costs.
4.For long-term equity investments obtained by non-monetary assets exchange, under the condition that
an exchange of non-monetary assets is of commerce nature and the fair value of assets exchanged can
be reliably measured, non-monetary assets traded in is initially stated at the fair value of the assets
traded out, unless there is conclusive evidence indicating that the fair value of the assets traded in is
more reliable; if the above conditions are not satisfied, initial investment costs of long-term equity
investments traded in shall be recognized at the book value of the assets traded out and the relevant
taxes and surcharges payable.
Expenses, taxes and other necessary expenses incurred to the Company and that are directly related to
the obtainment of long-term equity investments shall be recognized as the initial investment costs of
long-term equity investments.
For long-term equity investments obtained by the Company by any means, cash dividends or profits
declared but not yet distributed in the actual payments or the consideration actually paid for the
investment shall be separately accounted as dividends receivable and shall not constitute the costs of
long-term equity investments.
5.14.2. Subsequent measurement and recognition of gains and losses of long-term
equity investments
A.If the Company can control an investee, namely investment in subsidiary, the long-term equity
investment shall be measured under the cost method.
For long-term equity investments accounted at the cost method, except cash dividends or profits
declared but not yet distributed which are included in the actual payments or the consideration actually
paid for the investment, the cash dividends or profits declared by the investee shall be recognized as the
investment income irrespective of net profits realized by the investee before investment or after
investment.
B.Long-term equity investments measured under the equity method
1.For the long-term equity investment which has joint control or significant influence over the investee,
the equity method is adopted for accounting.
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd
2.For long-term equity investments measured at the equity method, if the initial investment costs are
higher than the investor’s attributable share of the fair value of the investee’s identifiable net assets, no
adjustment will be made to the initial costs of the long-term equity investments; if the initial investment
costs are lower than the investor’s attributable share of the fair value of the investee’s identifiable net
assets, the difference shall be recognized in current profit and loss and at the same time the adjustment
will be made to the initial costs of the long-term equity investments.
3.After obtaining the long-term equity investments, 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 the investments and adjust the book value of the long-term
equity investments. When recognizing the net profits and losses and other comprehensive income of the
investee that the Company shall enjoy or bear, the Company shall make a recognition and calculation
based on the net book profits and losses of the investee after appropriate adjustments. However, where
the Company is unable to obtain the relevant information due to failure to reasonably determine the fair
value of the investee’s identifiable assets, minor difference between the investee’s identifiable assets
and the book value thereof or other reasons, the profits or losses on the investments shall be directly
calculated and recognized based on the net book profits and losses of the investee. The Company shall
calculate the part distributed from cash dividends or profits declared by the investee and correspondingly
reduce the book value of the long-term equity investments.
When recognizing the income from investments in associates and joint ventures, the Company shall
write off the part of incomes from internal unrealized transactions between the Company and associates
and joint ventures which are attributable to the Company and recognize the profit and loss on
investments on such basis. Where the losses on internal transactions between the Company and the
investee fall into the scope of losses on assets impairment, full amounts of such losses shall be
recognized. Profit and loss from internal unrealized transactions between the Company’s subsidiaries
included into the combination scope and associates and joint ventures shall be written off according to
the 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 the
following sequence: Firstly, write off the book value of the long-term equity investments; where the book
value of the long-term equity investments is insufficient to cover the loss, investment losses are
recognized to the extent that book value of long-term equity which form net investment in the investee in
other substances and the book value of long-term receivables shall be written off; after all the above
treatments, if the Company still assumes additional obligation according to investment contracts or
agreements, the obligation expected to be assumed should be recognized as provision and included into
the investment loss in the current period. If the investee is profitable in subsequent accounting periods,
the Company shall treat the loss in reverse order against that described above after deducting
unrecognized share of loss: i.e. write down the book value of the recognized provision, then restore the
book value of long-term interests which substantially form net investments in the investee, then restore
the book value of long-term investments, and recognize investment income at the same time.
5.14.3. Basis for judgment of common control or significant influence over the
investee
A.Basis for judgment of common control over investee
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd
Common control is the contractually agreed sharing of control of an arrangement, which exists only
when decisions about the relevant activities require the unanimous consent of the parties sharing control.
Relevant activities of an arrangement usually include selling and purchasing of goods or services,
managing financial assets, acquiring or disposing of assets, researching and developing activities and
financing activities. A joint venture is a joint arrangement whereby the joint ventures have rights to the
net assets of the arrangement. The parties have rights to the assets, and obligations for the liabilities,
relating to the arrangement, which is a joint operation, but not a joint venture.
B.Basis for judgment of significant influence over investee
The term ‘significant influence’ refers to the power to participate in decision-making on the financial and
operating policies of the investee, but with no control or joint control over the formulation of these policies.
Where the Company is able to exert significant influence over the investee, the investee is its associate.
5.15. Fixed assets
5.15.1. 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 are
recognized when the following criteria are satisfied simultaneously:
A.It is probable that the economic benefits relating to the fixed assets will flow into the Company;
B.The cost of the fixed assets can be measured reliably.
5.15.2. Depreciation of fixed assets
Estimated Annual
Estimated Useful Estimated Useful
Category Residual Value Depreciation
Life (Yr) Life (Yr)
Rate (%) Rate (%)
Buildings&
Straight-line method 20～25 5 3.80～4.75
Constructions
Machinery Equipments Straight-line method 10 5 9.50
Transportation
Straight-line method 10 5 9.50
Equipments
Other Equipments Straight-line method 8 5 11.88
A.Except for the fixed assets that have been fully depreciated but are still in use and the land, the
Company makes provisions for depreciation of all fixed assets.
B.Depreciation of fixed assets of the Company is provided for on a straight-line basis from the month
immediately following the month when they reach the working condition for their intended use. The
depreciation amount and depreciation rate shall be calculated and recognized according to the category,
estimated useful lives and estimated net residual value rate of fixed assets and respectively included into
the costs of the relevant assets or the current profit and loss by purpose.
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd
C.When making provision for impairment on fixed assets, the Company shall recalculate the
depreciation rate and depreciation amount according to the book value, the estimated net residual value
rate and useful lives of the fixed assets.
D.On the balance sheet date, the Company reviews the estimated useful life, estimated net residual
value rate and depreciation method of the fixed assets. If there is any change, they shall be treated as
changes in accounting estimate.
E.Decoration expense of fixed assets that meet the condition of capitalization shall be depreciated
separately by adopting straight-line method within the short period between twice decoration and useful
life of the fixed assets.
5.15.3. Recognition standard, valuation method and depreciation method for fixed
assets acquired under financing lease
A.At the inception of the lease, the Company recognizes the leased fixed assets meeting the standards
for financial leases as fixed assets acquired under financing leases.
B.At the inception of the lease, the Company shall state the assets acquired under financing lease at the
lower of the fair value of the leased assets or the present value of the minimum lease payments, as well
as the initial and direct expenses occurred, recognize a long-term payable at the amount of the minimum
lease payments, and shall charge the difference of the lower of the fair value of the leased assets or the
present value of the minimum lease payments and the minimum lease payments to unrecognized
finance expenses. Unrecognized finance expenses shall be amortized at the effective interest rate
method in each period during the lease term.
C.Adapt the same depreciation method as the one used on other fixed assets owned by the company. If
there is reasonable assurance that the Company will obtain the ownership of the leased assets when the
lease term expires, the leased assets should be depreciated over its useful life; if there is no reasonable
assurance that the Company will obtain the ownership of the leased assets when the lease term expires,
the leased assets should be depreciated over the shorter of the lease term or the useful life of the leased
assets.
5.16. Construction in Progress
Whether the Company needs to comply with the disclosure requirement of special industry.
No
5.16.1. Categories of Constructions in Progress
Constructions in progress are accounted on individual project basis.
5.16.2. Criteria and Commencement of Conversion of Constructions in Progress into
Fixed Assets
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd
The book entry values of the fixed assets are stated at total expenditures incurred before construction in
progress reaches the working condition for their intended use. For self-operating projects, total
expenditures are measured according to the expenditures of direct materials, direct labor, direct
measurement mechanical construction costs and other expenditures; for contracting projects, total
expenditures are measured according to project costs payable and other expenditures. Borrowing costs
incurred before the projects that are undertaking with borrowing costs reach working condition for their
intended use and meeting the condition for capitalization shall be capitalized and included into the costs
of construction in progress.
For construction in progress that has reached working condition for intended use but for which the
completion of settlement has not been handled, it shall be transferred into fixed assets at the estimated
value according to the project budget, construction price or actual cost, etc. from the date when it
reaches the working condition for intended use and the fixed assets shall be depreciated in accordance
with the Company’s policy on fixed asset depreciation; adjustment shall be made to the estimated value
based on the actual cost after the completion of settlement is handled, but depreciation already provided
will not be adjusted.
5.17. Borrowing costs
5.17.1. Scope of borrowing costs
The Company’s borrowing costs include interest thereon, amortization of discounts or premiums,
ancillary expenses and exchange differences incurred from foreign currency loan, etc.
5.17.2. Recognition principles of capitalization of borrowing costs
The borrowing costs incurred to the Company and directly attributable to the acquisition and construction
or production of assets eligible for capitalization should be capitalized and recorded into relevant asset
costs; other borrowing costs should be recognized as costs according to the amount incurred and be
included into the current profit and loss.
Assets eligible for capitalization include fixed assets, investment properties, inventories and other assets
which may reach the working condition for their intended use or sale by acquisition and construction or
production activities for quite long time.
5.17.3. Recognition of capitalization period of borrowing costs
A.Recognition of commencement of capitalization of borrowing costs
Borrowing costs may be capitalized when asset disbursements have already been incurred, borrowing
costs have already been incurred and the acquisition and construction or production activities which are
necessary to prepare the assets for their intended use or sale have already been started. Among which,
asset disbursements include those incurred by cash payment, the transfer of non-cash assets or the
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd
undertaking of interest-bearing debts for acquiring and constructing or producing assets eligible for
capitalization.
B.Recognition of period of capitalization suspension of borrowing costs
If the acquisition and construction or production activities of assets eligible for capitalization are
interrupted abnormally and this condition lasts for more than three months, the capitalization of
borrowing costs should be suspended. The borrowing costs incurred during interruption are charged to
profit or loss for the current period, and the capitalization of borrowing costs continues when the
acquisition and construction or production activities of the asset resume. If the interruption is necessary
for the acquisition and construction or production to prepare the assets for their intended use or sale, the
capitalization of borrowing costs should continue.
C.Recognition of period of capitalization cessation of borrowing costs
Capitalization of borrowing costs should cease when the acquired and constructed or produced assets
eligible for capitalization have reached the working condition for their intended use or sale. Borrowing
costs incurred after the assets eligible for capitalization have reached the working condition for their
intended use or sale should be recognized as the current profit and loss when they incur.
If all parts of the acquired and constructed or produced assets are completed, each part may be used or
sold externally in the process of continuous construction of other parts and the necessary acquisition or
production activities have been substantially completed to make the part of assets reach the working
condition for their intended use or sale, the capitalization of borrowing costs related to the part of assets
should be ceased; if all parts of the acquired and constructed or produced assets are completed but the
assets cannot be used or sold externally until overall completion, the capitalization of borrowing costs
should cease at the time of overall completion of the said assets.
5.17.4. Recognition of capitalized amounts of borrowing costs
A.Recognition of capitalized amounts of interest on borrowing costs
During the period of capitalization, capitalized amount of the interest of each accounting period
(including amortization of discounts or premiums) shall be recognized according to the following
provisions:
1.As for special loan borrowed for acquiring and constructing or producing assets eligible for
capitalization, borrowing costs of special loan actually incurred in the current period less the interest
income of the loans unused and deposited in bank or return on temporary investment should be
recognized as the capitalization amount of borrowing costs.
2.As for general loans used for acquiring and constructing or producing assets eligible for capitalization,
the interest of general loans to be capitalized should be calculated by multiplying the weighted average
of asset disbursements of the part of accumulated asset disbursements in excess of special loans by the
capitalization rate of used general loans. The capitalization rate is calculated by weighted average
interest rate of general loans.
3.Where there are discounts or premiums on loans, the amounts of interest for each accounting period
should be adjusted taking account of amortizable discount or premium amounts for the period by
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd
effective interest method.
4.During the period of capitalization, the capitalized amount of interest of each accounting period shall
not exceed the current actual interest of the relevant loans.
B.Recognition of capitalized amounts of auxiliary expenses of loans
1.Auxiliary expenses incurred from special loans before the acquired or constructed assets eligible for
capitalization reach the working condition for their intended use or sale should be capitalized when they
incur and charged to the costs of assets eligible for capitalization; those incurred after the acquired or
constructed assets eligible for capitalization reach the working condition for their intended use or sale
should be recognized as costs according to the amounts incurred when they incur and charged to the
current profit or loss.
2.Auxiliary expenses incurred from general loans shall be recognized as costs according to the amounts
incurred when they occur and included in the current profit and loss.
C.Recognition of capitalized amount of exchange differences
During the period of capitalization, exchange differences incurred from the principal and interest of
special foreign currency loans should be capitalized and included in the costs of the assets eligible for
capitalization.
5.18. Intangible Assets
5.18.1. Measurement, Useful Life and Impairment Test
A.Initial measurement of intangible assets
Initial measurement of outsourcing intangible assets
Costs of outsourcing intangible assets shall be recognized according to the purchase price, related taxes
and other expenses directly attributed to reaching the working condition for their intended use. The cost
of intangible assets shall be recognized based on present value of purchase price when deferred
payment over normal credit conditions with financial nature. The difference between actual payment and
purchase price, expect for capitalized amount, shall be included into the current profit and loss in the
period of credit.
Initial measurement of internally researched and developed intangible assets
Costs of internally researched and developed intangible assets shall be recognized according to the total
expenses during the period after the assets are eligible for capitalization and before they reach the
intended purpose and the expenses that have been included in the previous periods shall no longer be
adjusted.
Expenses on the research phase of internally researched and developed intangible assets shall be
included in the current profit and loss when they incur; those on the development phase ineligible for
capitalization shall be included in the current profit and loss; those eligible for capitalization shall be
recognized as intangible assets. If it is unable to distinguish expenditure on the research phase and
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd
expenditure on development phase, the research and development expenditures shall be all included in
the current profit and loss.
B.Subsequent measurement of intangible assets
The useful lives of intangible assets are analyzed on acquisition. Intangible assets obtained by the
Company are divided into intangible assets with limited useful lives and intangible assets with indefinite
useful lives.
1.Subsequent measurement of intangible assets with limited useful lives
The intangible assets with limited useful lives are amortized on a straight-line basis when they reach
intended use over their useful lives with no residual value reserved. Amortizations of intangible assets
are usually recorded into the current profit and loss; where the economic benefits of an intangible asset
are realized by the products or other assets produced thereafter, the amortizations are recorded into the
costs of the relevant assets.
Category, estimated useful life, estimated net residual value rate and annual amortization rate of
intangible assets are shown below:
Estimated net residual value Annual amortization rate
Category of intangible assets Estimated useful life (years)
rate (%) (%)
Land use right 50 0 2.00
Trademark 7-10 0 14.29-10.00
Computer software 10 0 10.00
The useful lives and amortization methods of intangible assets with limited useful lives on the balance
sheet date shall be reviewed.
2.Subsequent measurement of intangible assets with indefinite useful lives
Intangible assets with indefinite useful lives are not amortized in the holding period, but impairment tests
are performed at the end of each year.
3.Estimates of useful lives of intangible assets
a) For intangible assets from any contractual right or other statutory rights, their useful lives shall be
recognized according to the period no more than that of the contractual or other statutory rights; when
the contractual right or other statutory rights contract is extended due to renewal of contracts and there is
evidence that the renewal of the Company does not need large costs, the renewal period shall be
included into the useful lives.
b)Where the contract or the law fails to specify the useful lives, the Company integrates situations in all
aspects and determine the period of intangible assets that can bring economic benefits for the Company
by hiring the relevant experts to demonstrate or comparing with the situation of the industry as well as
referring to the Company’s historical experience or otherwise.
c)If it is still unable to reasonably determine that intangible assets may bring economic benefits for the
Company according to the above methods, the intangible assets are taken as intangible assets with
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd
indefinite useful lives.
5.18.2. Accounting policies of internal research and development expenditure
According to the actual situation of the research and development, the Company classifies the research
and development project into that on the research phase and that on the development phase.
a)Research stage
Research stage is the stage when creative and planned investigations and research activities are
conducted to acquire and understand new scientific or technological knowledge.
b)Development stage
Development stage is the stage when the research achievements or other knowledge are applied to a
plan or design, prior to the commercial production or use, so as to produce any new or substantially
improved material, device or product.
Expenditure of an internal research and development project on the research phase shall be included in
current profit and loss when it occurs.
Specific criteria for qualifying expenditure on the development phase for capitalization
Expenditure on the development phase of an internal research and development project shall be
recognized as intangible assets only when the following conditions are simultaneously satisfied:
a)It is technically feasible to finish intangible assets for use or sale;
b)It is intended to finish and use or sell the intangible assets;
c)The usefulness of intangible assets to generate economic benefits shall be proved, including being
able to prove that there is a potential market for the products manufactured by applying the 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 intangible assets,
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 measured
reliably.
5.19. Impairment of long-term assets
For the long-term equity investments, investment properties measured at cost model,fixed assets,
construction in progress and intangible assets with limited useful lives,if there are signs of impairment,
an impairment test will be conducted on the balance sheet date. If the result of impairment test indicates
that recoverable amount of the asset is lower than its book value, the difference should be recognized as
a provision for impairment and recognized in impairment losses. The recoverable amount of the asset is
the higher of the net amount of its fair value less disposal expenses and the present value of its
estimated future cash flows. The provision for impairment shall be calculated and recognized based on
individual assets. If it is difficult to estimate the recoverable amount of the individual asset, the Company
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd
will estimate the recoverable amount of the asset group that the individual asset belongs to.
Asset group is the smallest asset portfolio that is able to generate independent cash flow.
The Company should conduct an impairment test on goodwill and intangible assets with indefinite useful
lives at least at the end of each year whether there is an indication of impairment.
When the Company conducts an impairment test on assets, the book value of goodwill formed by
business combination shall be apportioned to related asset groups by reasonable method from the date
of purchase. If it is difficult to be apportioned to relevant asset groups, it shall be apportioned to relevant
portfolio of asset groups. When apportioning the book value of goodwill to relevant asset groups or
portfolio of asset groups, it shall be apportioned on the basis of the proportion of the fair value of each
asset group or portfolio of asset groups to the total fair value of the relevant asset groups or portfolio of
asset groups. If the fair value is difficult to be measured reliably, it shall be apportioned on the basis of
the proportion of the book value of each asset group or portfolio of asset groups to the total book value of
the relevant asset groups or portfolios of asset groups. When conducting an impairment test on the
relevant asset groups or portfolio of asset groups containing goodwill, if there is an an indication of
impairment of asset groups or portfolio of asset groups related to the goodwill, the Company shall first
conduct an impairment test on the asset groups or portfolio of asset groups, calculate the recoverable
amount, compare it with the relevant book value and recognize the corresponding impairment loss. Then
the Company shall conduct an impairment on the asset groups or portfolio of asset groups containing
goodwill, and compare the book value of these relevant asset groups or portfolio of asset
groups(including apportioned part of the book value of goodwill) with the recoverable amount. If the
recoverable amount of relevant asset groups or portfolio of asset groups is lower than its book value, the
impairment loss of the goodwill shall be recognized.
Once the above impairment losses are recognized, it is not allowed to be reversed in subsequent period.
5.20. Long-term deferred expenses
5.20.1. Scope of long-term deferred expenses
Long-term deferred expenses refer to various expenses which have been already incurred but will be
born in this period and in the future with an amortization period of over 1 year (exclusive).
5.20.2. Initial measurement of long-term deferred expenses
Long-term deferred expenses shall be initially measured according to the actual costs incurred.
5.20.3. Amortization of long-term deferred expenses
Long-term deferred expenses are amortized using the straight-line method over the beneficial period.
5.21. Employee benefits
5.21.1. Accounting Treatment of Short-term Benefits
Short-term benefits are the benefits that the Company expect to pay in full within 12 months after the
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd
reporting period in which the employee provided relevant services, excluding the compensation for
employment termination.
Short-term benefits include: wage, bonus, allowance and subsidy; employee welfare, social securities
including health insurance and work injury insurance; housing common reserve fund; union expenditure
and employee training expenditure; short-term paid leave; short-term profit-sharing; non-monetary
welfare and other short-term benefits.
Actual short term benefits will be recognized as liability during the accounting period in which the
employee is providing the relevant service to the Company. The liability will be included in the current
profits and losses or the cost relevant assets.
5.21.2. Accounting Treatment of Post-employment Benefits
The defined contribution plan of the Company include payments of basic pension, unemployment
insurance, annuity, etc. that accord to relevant provisions. The amount which the Company deposit on
balance sheet date in exchange for the service of the employee during the accounting period will be
recognized as employee benefits liability and shall be included into the profit or loss for the current
period.
5.21.3. Accounting Treatment of Termination benefits
Termination benefits are the benefits the Company provide to the employee when the Company
terminates the employment before labor contract expires or encourages voluntary resignation. Employee
benefits liabilities shall be recognized and included into profit or loss for the current period on the earlier
date of the two following circumstances:
A.When the Company is not able to withdraw the benefits from termination of employment or resignation
persuasion unilaterally;
B.When the Company recognizes costs and fees relevant to reforming the termination benefits payment.
5.21.4. Accounting Treatment of Other long-term employee benefits
Other long-term employee benefits are all employee benefits other than short-term benefits,
post-employment benefits and termination benefits. At the end of reporting period, the company will
recognize the employee benefits cost from other long-term employee benefits as the following
components:
A.Service cost;
B.Net amount of interest from other long-term employee benefits net liabilities or assets;
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd
C.Changes from recalculation of the net liabilities or assets from other long-term employee benefits.
In order to simplify related accounting procedure, the net amount of the above subjects shall be included
into current profit or loss or the cost of relevant assets.
5.22. Provisions
A.Recognition principals of provisions.
The Company should recognize provisions. When the related obligation of contingent events including
external guarantee, pending litigation or arbitration, product quality assurance, onerous contract and
restructuring meets the following three conditions:
1. The obligation is a present obligation of enterprise
2. it is probable to have an outflow of economic benefits of the enterprise since implementation of
obligation.
A reliable estimate can be made of the amount of the obligation.
B. Measurement method of estimated liability
The amount of estimated liability should be the best estimate of the expenditure required to settle the
liability. Where there is a range of possible amounts of expenditure required to settle the liability, the best
estimate should be determined according to the average of the lower and upper limit of the range.
Under other circumstance, the best estimate should be determined in accordance with the following
methods:
1.Where the contingency involves a single item, the best estimate should be determined according to the
most likely outcome;
2,Where the contingency involves several items, the best estimate should be determined by weighting
all possible outcomes by their associated probabilities of occurrence.
5.23. Revenue
Whether the Company needs to comply with the requirement disclosure of special industry
No
Operating revenue of the Company mainly includes revenue from sales of goods, revenue from
rendering of service and revenue from transfer of asset use right, for which the recognition principles are
as follows:
5.23.1. Recognition principals of revenue from sales of goods
Revenue from sales of goods is recognized when the Company has transferred significant risks and
rewards of ownership of the goods to the purchaser; the Company retains neither continuing managerial
involvement usually related to the ownership nor effective control over the sold goods; revenues can be
measured reliably; the relevant economic benefits are highly likely to flow into the Company; and the
relevant costs incurred or to be incurred can be measured reliably.
The Company’s specific condition of revenue recognition is that revenue is recognized after customer
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd
acceptance based on receiving payment or obtaining the rights of claiming payment for goods
according to signed sales contracts or agreements.
The Company offers a certain percentage discount to dealers according to marketing policies and sales
status of dealers of liquor products. The settlement with dealers is made regularly or irregularly. The
sales revenue is recognized based on (net) invoice amount after discount when the discount is included
to invoice. According to accrual basis principle , the discount incurred but not yet settled shall be
recognized in sales revenue and included to other payables.
5.23.2. Recognition principals of revenue from rendering of service
Recognition principals of revenue from rendering of service under the circumstance that the outcome of
service transactions can be estimated reliably
The Company recognizes revenue from rendering of service using the percentage-of-completion method
on the balance sheet date when the outcome of service transactions can be estimated reliably.
When the amount of revenues can be measured reliably, related economic interests are likely to flow into
the company, schedule of completion of the transitions can be measured reliably and the cost of
transactions incurred or to be incurred can be measured reliably, the outcome of service transactions
can be estimated reliably.
Recognition principals of revenue from rendering of service under the circumstance that the outcome of
service transactions cannot be estimated reliably
If the outcome of rendering of services on the balance sheet date cannot be measured reliably, the
revenues from rendering of services shall be recognized according to the following three conditions:
A.If the labor costs that have already incurred can be fully compensated, the revenues from rendering of
services are recognized at the amounts recovered or expected to be recovered and the labor costs that
have already incurred shall be carried forward;
B.If the labor costs that have already incurred can be partially compensated, the revenues from
rendering of services are recognized at the recoverable amounts of compensated labor costs and the
labor costs that have already incurred shall be carried forward;
C.If it is expected that all the labor costs that have already incurred cannot be compensated, the labor
costs that have already incurred are included into the current profit and loss (costs of primary business)
and the revenues from rendering of services are not recognized.
5.23.3. Recognition principals of revenue from transfer of asset use right
When economic benefits related to transactions are highly likely to flow into the Company and the
amount of revenue can be reliably measured, the revenue from transfer of asset use right is recognized.
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd
5.24. Government grants
5.24.1. Judgement basis and accounting treatment method of government grants
related to assets
Government grants related to assets refer to the government grants obtained by enterprises for the
purchase and construction of long-term assets or other ways to form the long-term assets.
The government grants related to assets shall be recognized to write down the book value of related
assets or as deferred income at the actual entry amount on acquisition. The latter shall be allocated
evenly over the useful lives of the relevant assets, and included in the current profit or loss. Government
grants measured at the nominal amount shall be directly included in current profit and loss.
5.24.2. Judgement basis and accounting treatment method of government grants
related to income
Government grants related to income refer to the government grants beyond the scope of government
grants related to assets.
Government grants related to income shall be separately handled according to the following
circumstances:
A. If government grants related to income are used to compensate the Company’s relevant expenses or
losses in future periods, such government grants should be recognized as deferred income on
acquisition and be included into the current profit and loss or to write down related expenses during the
period of recognition of the relevant expenses.
B.
B..If government grants related to income are used to compensate the Company’s relevant expenses or
losses incurred, such government grants are directly included into the current profit and loss or to write
down related expenses on acquisition.
5.25. Deferred tax assets and deferred tax liabilities
The Company adopts the balance sheet liability method to account for income tax.
5.25.1. Recognition of deferred tax assets or deferred tax liabilities
A.The Company recognizes its tax base on acquisition of assets and liabilities. On the balance sheet
date, the Company analyzes and compares the book value of the assets and liabilities and the tax base.
If there are temporary differences in book value of the assets and liabilities and the tax base, under the
circumstance that the temporary differences incur in the current period and meet the recognition criteria,
the Company shall respectively recognize taxable temporary differences or deductible temporary
differences as deferred tax liability or deferred tax assets.
B.Recognition basis of deferred tax assets
1.Deferred tax assets incurred from deductible temporary differences are recognized to the extent that
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd
they shall not exceed the taxable income probably obtained in future periods to be against the deductible
temporary difference. In determining the taxable income probably obtained in future periods, including
the taxable income from normal production and operation activities in future periods and the increase of
taxable income due to the reversal of taxable temporary differences during the period of reversal of
deductible temporary differences.
2.For deductible losses and tax credits that can be carried forward to the next years, the Company is
likely to recognize the corresponding deferred tax assets to the extent that the assets shall not exceed
the taxable income in the future for deducting deductible losses and tax credits and that are probably
obtained by the Company.
3.On the balance sheet date, the Company reviews the book value of deferred tax assets. If it is
probably unable to obtain sufficient taxable income in the future period to offset the benefits of the
deferred tax assets, the Company shall write down the book value of the deferred tax assets; when it is
probable to obtain sufficient taxable income, the write-downs shall be reversed.
C.Recognition basis of deferred tax liabilities
The Company recognizes the current and previous taxable temporary differences payable but unpaid as
deferred tax liabilities. But they exclude temporary differences arising from goodwill; transactions which
are formed other than from business combinations and neither affect the accounting profits nor affect
taxable income at the time of occurrence.
5.25.2. Measurement of deferred tax assets or deferred tax liabilities
A.On the balance sheet date, the deferred tax assets and deferred tax liabilities are measured at the
applicable tax rate during the period of expected recovery of the assets or liquidation of the liabilities in
accordance with the provisions of the tax law.
B.Where the applicable tax rate changes, the Company remeasures deferred tax assets and deferred
tax liabilities recognized, except for those incurred in transactions or events directly recognized in the
owner’s equity, of which the effect shall be included in the income tax expenses in the current period
when the rate changes.
C. When the Company measures the deferred tax assets and deferred tax liabilities, the tax rate and tax
base in consistent with the expected recovery of assets or liquidation of liabilities shall be adopted.
D.Deferred tax assets and deferred tax liabilities of the Company shall not be discounted.
5.26. Lease
5.26.1. Accounting treatment method of operating lease
The rents from operating leases shall be recorded by the lessee in the relevant asset costs or profits and
losses of the current period by using the straight-line method over each period of the lease term. The
initial direct costs incurred shall be recognized as the profits and losses of the current period. The
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd
contingent rents shall be recorded into the profits and losses of the current period in which they actually
arise.
A lessor shall include the assets subject to operating leases in relevant items of its balance sheets in
light of the nature of the asset. The rents from operating leases shall be recorded in the profits and
losses of the current period by using the straight-line method over each period of the lease term. The
initial direct costs incurred to a lessor shall be recorded into the profits and losses of the current period.
As for the fixed assets subject to operating leases, the lessor shall calculate the depreciation of it by
adopting depreciation policy for similar assets. As for other leased assets, systematic and reasonable
methods shall be adopted for its amortization. The contingent rents shall be recorded in the profits and
losses of the period in which they actually arise.
5.26.2. Accounting treatment method of financing lease
On the lease beginning date, a lessee shall record the lower one of the fair value of the leased asset and
the present value of the minimum lease payments on the lease beginning date as the entering value in
an account, recognize the amount of the minimum lease payments as the entering value in an account of
long-term account payable, and treat the balance between the recorded amount of the leased asset and
the long-term account payable as unrecognized financing charges. The initial direct costs such as
commissions, attorney’s fees and travelling expenses, stamp duties directly attributable to the leased
item incurred during the process of lease negotiating and signing the leasing agreement shall be
recorded in the asset value of the current period. Unrecognized financing charges are apportioned in
each period of lease term. The lessee shall adopt the effective interest rate method to calculate and
recognize the financing charge in the current period. Contingent rents shall be recognized as an
expense in the period in which they are actually incurred.
On the beginning date of the lease term, a lessor shall recognize the sum of the minimum lease receipts
on the lease beginning date and the initial direct costs as the entering value in an account of the
financing lease values receivables, and record the unguaranteed residual value at the same time. The
balance between the sums of the minimum lease receipts, the initial direct costs and the unguaranteed
residual value, and the sum of their present values shall be recognized as unrealized financing
income.Unrealized financing income is apportioned in each period of lease term. The lessor shall
calculate the financing income at the current period by adopting the effective interest rate method.
Contingent rents shall be recorded into the profits and losses of the period in which they actually arise.
27,Changes in significant accounting policies and accounting estimates
27.1 Changes in significant accounting policies
√ Applicable □ N/A
Content and reason of changes in Procedure for examination and
Notes
accounting policies approval
1,Since 1 January 2017, the
Deliberations of the third session
government grants related to the
of the sixth board of directors
Company’s daily activities has
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd
been adjusted from
“Non-operating expenses” to
“Other income”. Comparative
data was not adjusted. 2,
Disposal gains and losses from
assets originally listed in
“Non-operating income” and
“Non-operating expenses” were
reclassified to the newly added
item “Asset disposal income” in
the income statement.
Comparative data was adjusted.
In 2017, the Ministry of Finance issued The Accounting Standards for Enterprises No.42- Non-current
assets held for sale, disposal group and termination of operation. It has been implemented since 28 May
2017. The non-current assets, disposal group and termination of operation existing in the implement
date are treated by prospective application.
In 2017, the Ministry of Finance revised The Accounting Standards for Enterprises No. 16- Government
Grants. Since 12 June 2017, the government grants existing in 1 January have been treated by
prospective application. The newly added government grants from 1 January 2017 to the implementation
date are adjusted according to the revised standard.
In 2017, the Ministry of Finance issued Notice of the Ministry of Finance on Revising the format of
general corporate financial statements. It revises the formation of general corporate financial statements.
It is applicable for financial statements of fiscal year 2017 and subsequent periods.
The above changes in significant accounting policies were approved by the third session of the sixth
board of directors. The adjustment were made by the Company based on requirements of the above
standards and notices. The financial report items and affected amounts as follows:
Content and reason of changes in Name of affected Affected amount Affected amount in the
accounting policies report items in the current same period last year
period
（1）Since 1 January 2017, the Non-operating -44,745,640.94 N/A
government grants related to the income
Company’s daily activities has been Other income 44,745,640.94
adjusted from “Non-operating
expenses” to “Other income”.
Comparative data was not adjusted.
（2） Disposal gains and losses from Non-operating -43,724.37 -727,962.06
assets originally listed in income
“Non-operating income” and non-operating -8,642,568.48 -6,551,591.02
“Non-operating expenses” were expenses
reclassified to the newly added item Asset disposal -8,598,844.11 -5,823,628.96
“Asset disposal income” in the income income
statement. Comparative data was
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd
adjusted.
5.27.2. Changes in significant accounting estimates
□ Applicable √ N/A
6.Taxes
6.1.Major tax types and rates
Tax Type Taxation Basis Tax Rate
Output VAT－Deductible input
Value-added tax (VAT) [Note1]17%,13%,11%,6%,19%
VAT
Sales or composite assessable
Consumption tax [Note2]
price
Utility maintenance tax Applicable turnover tax amount 7%,5%
Cororate income tax Applicable income tax rate 25%,16.5%,0%,27%
Disclosure statement if there are various taxpaying bodies with different corporate income tax rates
Company Name Applicable Tax Rate
JSSJ Industry （HK） Holdings Co., Limited 16.5%
ZYG E-Commerce HK Limited 16.5%
YANGHE CHILE SPA 27%
YangHe International Investment Ltd,ZYG LTD 0%
ZYG TECHNOLOGY INVESTMENT LTD 0%
6.2. Other information
[Note 1] Value-added tax is calculated and levied according to the difference between output VAT and
deductible input. The applicable tax rates are 17%， 13%， 11%， 6% and 19%. According to Notice on
trial implementation of the assessment of the deduction method of VAT input tax of agricultural products
in some industries (Cai Shui [2012] No.38) issued by the Ministry of Finance and the State
Administration of Taxation, general VAT payers with purchasing agricultural products as raw material to
produce and sell liquid milk and dairy products, alcohol and alcohol, vegetable oil are involved into the
pilot scope of deduction of VAT input tax of agricultural products. Whether the purchased agricultural
products are used for production of above products or not, input VAT shall be deducted according to
Pilot implementation measures of assessment of the deduction of VAT input tax of agricultural products.
It is no longer deducted by VAT deduction certificate. The input VAT of purchased goods, taxable labor
service and taxable service excluding agricultural products is deducted according to current related
rules.
The Company adopted input-output method to calculate permitted deductible VAT input of agricultural
products according to consumed amount of outsourcing agricultural products per sale based on national
and industrial standards.The VAT rate of YANGHE CHILE SPA is 19%. JSSJ Industry （HK） Holdings
Co., Limited,ZYG E-Commerce HK Limited,ZYG LTD,YangHe International Investment Ltd,ZYG
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd
TECHNOLOGY INVESTMENT LTD do not pay VAT.
[Note 2] 1.Ad valorem taxation ：Consumption tax of liquor is calculated and levied according to 20% of
sales. For taxable liquor with manufacturing consignment, it is calculated and levied according to sale
price of trustees’ congeneric liquor. If there is no sale price of congeneric liquor, it is calculated and
levied according to composite assessable price. Consumption tax of wine is calculated and levied
according to 10% of sales
According to Notice on further Strengthening the Collection and Management of Liquor Consumption
Tax (Guoshuihan [2017] No. 144) issued by the State Administration of Taxation(SAT) issued, if a liquor
manufacturing enterprise sets up muti-level sales units selling liquor, the SAT should verify the lowest
assessable price of the manufacturing enterprise based on external sales price of final sales unit. Since
1 May 2017, the lowest assessable price of liquor consumption tax has been adjusted to 60% uniformly
from 50% to 70%. The tax payment of the Company’s liquor consumption tax has been changed from
withholding and remitting tax by trustee from direct payment by the liquor manufacturing enterprise since
1 September 2017. The accounting method of consumption tax was changed from manufacturing
consignment reckoned in cost of liquor production to self-production and self-sale reckoned in
consumption taxes and surcharges. The tax price of liquor consumption tax with ad valorem taxation has
bee changed from composite assessable price to the lowest assessable price of the manufacturing
enterprise based on external sales price of final sales unit since 1 May 2017.
2.Volume-based taxation：Consumption tax of liquor is calculated and levied according to RMB 0.50 per
kg
7.Notes to the consolidated financial statements
7.1. Cash at bank and on hand
Item Ending Balance Beginning Balance
Cash 4,883.33 9,416.09
Bank deposit 1,726,983,843.15 2,454,194,648.21
Other cash and cash equivalents 24,464,149.70 2,423,294.67
Total 1,751,452,876.18 2,456,627,358.97
Including: Total overseas deosits 343,070,375.12 16,859,599.01
7.2. Notes receivable
7.2.1. Classification of notes receivable
Item Ending balance Beginning balance
Bank acceptances 212,812,236.57 151,616,983.85
Total 212,812,236.57 151,616,983.85
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd
7.2.2 Notes receivable that have been endorsed to other parties by the Company but
have not expired at the end of year
Item Recognition stopped at ending Recognition continue at ending
Bank acceptance bill 40,889,186.00
Total 40,889,186.00
7.3. Accounts receivable
7.3.1 An analysis of accounts receivable by categories
Ending balance Beginning balance
Provision for bad Provision for bad
Book balance Book balance
Type debt Book debt Book
Proporti Proporti value Amoun Proporti Proportion value
Amount Amount Amount
on (%) on (%) t on (%) (%)
Accounts
13,526
receivable tested 10,833,5 100.00 2,348,17 8,485,38 100.00 2,702,23 10,824,18
21.67% ,425.0 19.98%
for impairment on a 55.19 % 2.36 2.83 % 8.10 6.90
portfolio basis
13,526
10,833,5 100.00 2,348,17 8,485,38 100.00 2,702,23 10,824,18
Total 21.67% ,425.0 19.98%
55.19 % 2.36 2.83 % 8.10 6.90
With amounts that are individually significant and that the related provision for bad debts is provided on
the individual basis：
□ Applicable √ N/A
Accounts receivable that the related provision for bad debts is provided on grouping basis using the
ageing analysis method：
√ Applicable □ N/A
Ending balance
Aging
Accounts receivable Provision for bad debt Proportion
Within 1 year 5,149,816.55 257,490.82 5.00%
1-2 years 3,621,893.85 362,189.39 10.00%
2-3 years 12,493.33 3,748.00 30.00%
3-4 years 634,408.63 317,204.32 50.00%
4-5years 37,015.00 29,612.00 80.00%
Over 5 years 1,377,927.83 1,377,927.83 100.00%
Total 10,833,555.19 2,348,172.36 21.67%
Explanation of the determination of the portfolio basis：
Accounts receivable that the related provision for bad debts is based on the proportion of ending
balance：
□ Applicable √ N/A
Accounts receivable that the related provision for bad debts is based on other methods：
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd
□ Applicable √ N/A
7.3.2. Provision and recovery for bad and doubtful debt in the current period
Provision for bad debt in current period is 0.00 yuan；Provision and recovery for bad is 354,065.74 yuan.
Items of recovery that are important in this term are as follows:
Company Name Recovery amount Method
None
7.3.3. Top five entities with the largest balances of the account receivables
Company name Ending Balance Proportion in the total Provision Amount
(%)
First 2,007,251.49 18.53 100,362.57
Second 600,000.00 5.54 300,000.00
Third 454,356.93 4.19 454,356.93
Fourth 319,041.73 2.95 15,952.09
Fifth 292,730.90 2.70 14,636.55
Total 3,673,381.05 33.91 885,308.14
7.4 Prepayment
7.4.1 Aging analysis
Aging Ending balance Beginning balance
Amount Proportion (%) Amount Proportion (%)
Within 1 year 85,033,318.92 98.12% 66,079,124.96 95.32%
1-2 years 341,247.89 0.40% 1,676,635.79 2.42%
2-3 years 1,197,641.47 1.38%
Over 3 years 89,600.00 0.10% 1,564,172.47 2.26%
Total 86,661,808.28 -- 69,319,933.22 --
Explanation of prepayment with age longer than 1 year:
There is no prepayment with age longer than 1 year.
7.4.2. Top five entities with the largest balances of prepayments
Company name Ending balance Proportion in the total (%)
First 71,240,000.00 82.20
Second 2,410,000.00 2.78
Third 1,950,148.44 2.25
Fourth 1,850,000.00 2.14
Fifth 1,500,000.00 1.73
Total 78,950,148.44 91.10
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd
7.5. Other receivables
7.5.1. Other receivables disclosed by categories
Ending Balance Beginning Balance
Provision for bad Provision for bad
Book Balance Book Balance
Category debt Book debt Book
Proporti Proporti Value Amoun Proporti Proportion Value
Amount Amount Amount
on (%) on (%) t on (%) (%)
Other receivables
with significant
138,10
single amount and 80,747,0 47,839,9 32,907,1 48,139,9 89,966,26
67.33% 59.25% 6,189. 81.31% 34.86%
tested for 48.93 24.27 24.66 24.27 4.93
impairment
individually
Portfolio under the 31,751
39,188,9 15,011,4 24,177,4 11,181,9 20,569,39
aging analysis 32.67% 38.31% ,310.2 18.69% 35.22%
22.37 45.20 77.17 16.68 3.57
method
169,85
119,935, 100.00 62,851,3 100.00 57,084,6 100.00 59,321,8 110,535,6
Total 7,499. 100.00%
971.30 % 69.47 % 01.83 % 40.95 58.50
Other receivables with significant single amount and tested for impairment individually
√ Applicable □ N/A
Ending Balance
Company Name Book Balance Provision balance for Proportion of Provision Reason
bad debt (%)
Industrial Commercial
Bank of China Ltd.
42,907,124.66 10,000,000.00 23.31% Tort liability
Zhengzhou Jiefang
road branch.
Industrial Commercial
Bank of China Ltd. 22,839,924.27 22,839,924.27 100.00% Tort liability
Kaifeng Haode branch
Bankruptcy
administrator
ofJiangsu Juntai
Properties Co.,Ltd., 15,000,000.00 15,000,000.00 100.00% Estimated uncollectible
Suqian Guotai
Department Store
Co.,Ltd.
Total 80,747,048.93 47,839,924.27 -- --
Analysis of provision under the aging analysis method：
√ Applicable □ N/A
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd
Ending Balance
Aging
Other receivables Provision for bad debt Proportion of Provision
Within 1 year 14,638,635.49 731,931.78 5.00%
1-2 years 2,497,442.07 249,744.21 10.00%
2-3 years 7,213,051.26 2,163,915.38 30.00%
3-4 years 5,313,489.29 2,656,744.65 50.00%
4-5 years 1,585,975.38 1,268,780.30 80.00%
Over 5 years 7,940,328.88 7,940,328.88 100.00%
Total 39,188,922.37 15,011,445.20 38.31%
Explanation of the determination of the portfolio basis:
Other receivables that the related provision for bad debts is based on the proportion of ending balance：
□ Applicable √ N/A
Other receivables that the related provision for bad debts is based on other methods：
□ Applicable √ N/A
7.5.2. Provision and recovery for bad and doubtful debt in the current period
Provision for bad debt in current period is 2,805,205.95 Yuan; Provision and recovery for bad is
300,000.00 Yuan.
Items of recovery that are important in this term are as follows:
Company Name Recovery amount Method
No
7.5.3. Other actual receivable write-off in this period
Item Amount of write off
Amount of other receivables that are actually written off 262,956.32
The important write off of accounts receivable are as follows:
Whether the
amount of money
Reasons for Write
Company Name Category Amount of write off Write off procedure generated by the
off
related party
transactions
None
7.5.4. Analysis of other receivables by category
Category Ending Book Balance Beginning Book Balance
Cash reserve 65,747,048.93 123,106,189.20
Security deposit 23,738,248.46 21,428,842.17
Cooperation payment 3,910,000.00 3,910,000.00
Business loans, Petty cash and other. 26,540,673.91 21,412,468.08
Total 119,935,971.30 169,857,499.45
The 2017 Annual Report of Jiangsu Yanghe Brewery Joint-Stock Co.,Ltd
7.5.5. Top five entities with the largest balances of the other receivables
Provisioning
Proportion in total
Company Name Category Ending Balance Aging amount at period
receivables (%)
end
Industrial
Commercial Bank
of China Ltd. Saving Deposits 42,907,124.66 3-4 years 35.78% 10,000,000.00
Zhengzhou Jiefang
road branch.
Industrial
Commercial Bank
of China Ltd. Saving Deposits 22,839,924.27 3-4 years 19.04% 22,839,924.27
Kaifeng Haode
branch
Bankruptcy
administrator of
Jiangsu Juntai
Properties Security deposit 15,000,000.00 Over 5 years 12.51% 15,000,000.00
Co.,Ltd., Suqian
Guotai Department
Store Co.,Ltd.
Ningxiang
Financial
Security deposit 4,487,500.00 2-3 years 3.74% 1,346,250.00
Administration
Bureau
Nanjing Peilong
Cooperation
sports culture Co., 3,910,000.00 Over 5 years 3.26% 3,910,000.00
payment
Ltd.
Total -- 89,144,548.93 -- 74.33% 53,096,174.27
7.6. Inventories
Does the company need to comply with the disclosure requirements of real estate industry.
No
7.6.1. Categories of Inventory
Ending Balance Beginning Balance
Category
Provision for Provision for
