Anhui Gujing Distillery Company Limited
Annual Report 2024
April 2025
~ 2 ~
Part I Important Notes, Table of Contents and Definitions
The Board of Directors (or the “Board”), the Supervisory Committee as well as thedirectors, supervisors and senior management of Anhui Gujing Distillery CompanyLimited (hereinafter referred to as the “Company”) hereby guarantee the factuality,accuracy and completeness of the contents of this Report and its summary, and shallbe jointly and severally liable for any misrepresentations, misleading statements ormaterial omissions therein.Liang Jinhui, the legal representative, and Zhu Jiafeng, the Deputy Chief Accountantand Board Secretary, hereby guarantee that the financial statements carried in thisReport are factual, accurate and complete.All the Company’s directors have attended the Board meeting for the review of thisReport and its summary.Any plans for the future and other forward-looking statements mentioned in thisReport shall NOT be considered as absolute promises of the Company to investors.Investors, among others, shall be sufficiently aware of the risk and shall differentiatebetween plans/forecasts and promises. Again, investors are kindly reminded to payattention to possible investment risks.Investors’ attention is kindly directed to the detailed description of possible risks inthe Company’s operations in “XI Prospects” under “Part III Management Discussionand Analysis”.The Board has approved a final dividend plan as follows: based on the Company’stotal share capital of 528,600,000 shares, a cash dividend of RMB50.00 (tax inclusive)per 10 shares is to be distributed to the shareholders, with no bonus issue from eitherprofit or capital reserves.This Report and its summary have been prepared in both Chinese and English.Should there be any discrepancies or misunderstandings between the two versions,the Chinese versions shall prevail.
~ 3 ~
Table of Contents
Part I Important Notes, Table of Contents and Definitions 2Part II Corporate Information and Key Financial Information 6Part III Management Discussion and Analysis 11Part IV Corporate Governance 42Part V Environmental and Social Responsibility 62Part VI Significant Events 70Part VII Share Changes and Shareholder Information 74Part VIII Preferred Shares 82Part IX Corporate Bonds 82Part X Financial Statements 83
~ 4 ~
Documents Available for Reference
(I) Financial statements signed and sealed by the Company’s legal representative, theCompany’s Chief Accountant and the head of the Company’s financial department(equivalent to financial manager);(II) The original copy of the Independent Auditor’s Report stamped by the CPA firmas well as signed and stamped by the engagement certified public accountants;(III) All originals of the Company’s documents and announcements that have beenpublicly disclosed in the Reporting Period on the media designated by the ChinaSecurities Regulatory Commission; and(IV) This Report disclosed in other securities markets.
~ 5 ~
Definitions
| Term | Definition |
| The “Company”, “Gu Jing” or “we” | Anhui Gujing Distillery Company Limited inclusive of its consolidated subsidiaries, except where the context otherwise requires |
| Gujing Sales | Bozhou Gujing Sales Co., Ltd. |
| The Company as the parent | Anhui Gujing Distillery Company Limited exclusive of subsidiaries, except where the context otherwise requires |
| Gujing Group | Anhui Gujing Group Co., Ltd. |
| Yellow Crane Tower | Yellow Crane Tower Distillery Co., Ltd. |
| Mingguang | Anhui Mingguang Distillery Co., Ltd. |
| Longrui Glass | Anhui Longrui Glass Co., Ltd. |
| Intelligent Park | The Baijiu Production Intelligent Transformation Project |
~ 6 ~
Part II Corporate Information and Key Financial Information
I Corporate Information
| Stock name | Gujing Distillery, Gujing Distillery-B | Stock code | 000596, 200596 |
| Changed stock name (if any) | |||
| Stock exchange for stock listing | Shenzhen Stock Exchange | ||
| Company name in Chinese | 安徽古井贡酒股份有限公司 | ||
| Abbr. | 古井 | ||
| Company name in English (if any) | ANHUI GUJING DISTILLERY COMPANY LIMITED | ||
| Abbr. (if any) | GU JING | ||
| Legal representative | Liang Jinhui | ||
| Registered address | Gujing Town, Bozhou City, Anhui Province, P.R.China | ||
| Zip code | 236820 | ||
| Change of registered address | N/A | ||
| Office address | Gujing Industrial Park, Gujing Town, Bozhou City, Anhui Province, P.R.China | ||
| Zip code | 236820 | ||
| Company website | http://www.gujing.com | ||
| Email address | gjzqb@gujing.com.cn | ||
II Contact Information
| Board Secretary | Securities Representative | |
| Name | Zhu Jiafeng | Mei Jia |
| Address | Gujing Town, Bozhou City, Anhui Province, P.R.China | Gujing Town, Bozhou City, Anhui Province, P.R.China |
| Tel. | （0558）5712231 | （0558）5710057 |
| Fax | （0558）5710099 | （0558）5710099 |
| Email address | gjzqb@gujing.com.cn | gjzqb@gujing.com.cn |
III Media for Information Disclosure and Place where this Report Is Lodged
| Website of the stock exchange where this Report is | The Shenzhen Stock Exchange（http://www.szse.cn） |
~ 7 ~
| disclosed | |
| Media and website where this Report is disclosed | China Securities Journal, Ta Kung Pao (HK) and http://www.cninfo.com.cn |
| Place where this Report is lodged | The Board Secretary’s Office |
IV Change to Company Registered Information
| Unified social credit code | 913400001519400083 |
| Change to principal activity of the Company since going public (if any) | No change |
| Every change of controlling shareholder since incorporation (if any) | No change |
V Other InformationThe independent audit firm hired by the Company:
| Name | RSM China |
| Office address | Suite 901-22 to 901-26, Wai Jing Mao Building (Tower 1), No. 22 Fuchengmen Wai Street, Xicheng District, Beijing, China |
| Accountants writing signatures | Zhang Liping, and Han Songliang |
The independent sponsor hired by the Company to exercise constant supervision over the Company in the Reporting Period:
? Applicable □ Not applicable
| Sponsor | Office address | Representatives | Supervision period |
| China International Capital Corporation Limited | 27-28/F, China World Office 2, No. 1 Jianguomenwai Avenue, Chaoyang District, Beijing | Fang Lei, and Peng Zhaolian | 2021.7.22-2024.12.31 |
The independent financial advisor hired by the Company to exercise constant supervision over the Company in the Reporting Period:
? Applicable □ Not applicable
| Financial advisor | Office address | Representatives | Supervision period |
| China International Capital Corporation Limited | 27-28/F, China World Office 2, No. 1 Jianguomenwai Avenue, Chaoyang District, Beijing | Fang Lei, and Peng Zhaolian | 2021.7.22-2024.12.31 |
VI Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes ? No
| 2024 | 2023 | 2024-over-2023 | 2022 |
~ 8 ~
| change (%) | ||||
| Operating revenue (RMB) | 23,577,928,065.99 | 20,253,526,598.02 | 16.41% | 16,713,234,153.52 |
| Net profit attributable to the listed company’s shareholders (RMB) | 5,517,251,073.10 | 4,589,164,052.80 | 20.22% | 3,143,144,732.08 |
| Net profit attributable to the listed company’s shareholders before exceptional gains and losses (RMB) | 5,457,155,276.12 | 4,495,219,187.57 | 21.40% | 3,066,543,993.35 |
| Net cash generated from/used in operating activities (RMB) | 4,727,652,873.85 | 4,496,206,034.42 | 5.15% | 3,107,914,579.48 |
| Basic earnings per share (RMB/share) | 10.44 | 8.68 | 20.28% | 5.95 |
| Diluted earnings per share (RMB/share) | 10.44 | 8.68 | 20.28% | 5.95 |
| Weighted average return on equity (%) | 23.89% | 22.92% | 0.97% | 17.93% |
| 31 December 2024 | 31 December 2023 | Change of 31 December 2024 over 31 December 2023 (%) | 31 December 2022 | |
| Total assets (RMB) | 40,522,413,702.09 | 35,420,907,274.99 | 14.40% | 29,789,822,298.65 |
| Equity attributable to the listed company’s shareholders (RMB) | 24,657,023,779.19 | 21,525,309,609.44 | 14.55% | 18,520,757,973.52 |
Indicate by tick mark whether the lower of the net profit attributable to the listed company’s shareholders before and after exceptionalgains and losses was negative for the last three accounting years, and the latest independent auditor’s report indicated that there wasuncertainty about the Company’s ability to continue as a going concern.
□ Yes ? No
Indicate by tick mark whether the lower of the net profit attributable to the listed company’s shareholders before and after exceptionalgains and losses was negative.
□ Yes ? No
VII Accounting Data Differences under China’s Accounting Standards for BusinessEnterprises (CAS) and International Financial Reporting Standards (IFRS) and ForeignAccounting Standards
1. Net Profit and Equity under CAS and IFRS
□ Applicable ? Not applicable
~ 9 ~
No difference for the Reporting Period.
2. Net Profit and Equity under CAS and Foreign Accounting Standards
□ Applicable ? Not applicable
No difference for the Reporting Period.
3. Reasons for Accounting Data Differences Above
□ Applicable ? Not applicable
VIII Key Financial Information by Quarter
Unit: RMB
| Q1 | Q2 | Q3 | Q4 | |
| Operating revenue | 8,286,316,919.20 | 5,519,376,623.15 | 5,262,915,448.33 | 4,509,319,075.31 |
| Net profit attributable to the listed company’s shareholders | 2,065,836,404.82 | 1,506,955,190.33 | 1,173,702,231.04 | 770,757,246.91 |
| Net profit attributable to the listed company’s shareholders before exceptional gains and losses | 2,049,854,347.30 | 1,490,686,559.37 | 1,159,067,061.02 | 757,547,308.43 |
| Net cash generated from/used in operating activities | 2,454,021,334.50 | 1,555,685,120.99 | 1,334,493,602.37 | -616,547,184.01 |
Indicate by tick mark whether any of the quarterly financial data in the table above or their summations differs materially from whathave been disclosed in the Company’s quarterly or interim reports.
□ Yes ? No
IX Exceptional Gains and Losses
? Applicable □ Not applicable
Unit: RMB
| Item | 2024 | 2023 | 2022 | Note |
| Gain or loss on disposal of non-current assets (inclusive of impairment allowance write-offs) | -6,996,040.00 | -2,063,270.90 | -4,666,425.09 | |
| Government grants recognised in profit or loss (exclusive of those that are closely related to the Company’s normal business operations and given in accordance with defined criteria and in compliance with government policies, and have a continuing impact on the Company’s profit or loss) | 47,217,316.71 | 39,946,354.24 | 46,721,259.52 | |
| Gain or loss on fair-value changes in | 2,316,575.85 | 51,603,409.95 | 43,874,800.64 |
~ 10 ~
| financial assets and liabilities held by a non-financial enterprise, as well as on disposal of financial assets and liabilities (exclusive of the effective portion of hedges that is related to the Company’s normal business operations) | ||||
| Reversed portions of impairment allowances for receivables which are tested individually for impairment | 0.00 | 98,239.02 | 423,337.78 | |
| Non-operating income and expense other than the above | 52,210,445.28 | 51,716,611.35 | 23,314,293.08 | |
| Less: Income tax effects | 23,534,161.55 | 34,596,052.57 | 27,082,435.88 | |
| Non-controlling interests effects (net of tax) | 11,118,339.31 | 12,760,425.86 | 5,984,091.32 | |
| Total | 60,095,796.98 | 93,944,865.23 | 76,600,738.73 | -- |
Particulars about other items that meet the definition of exceptional gain/loss:
□ Applicable ? Not applicable
No such cases for the Reporting Period.Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item listed in the Explanatory Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public—Exceptional Gain/Loss Items:
□ Applicable ? Not applicable
No such cases for the Reporting Period.
~ 11 ~
Part III Management Discussion and Analysis
I Industry Overview for the Reporting Period
1. Status of the Baijiu Industry
In 2024, after a period of high-octane activity, the baijiu industry entered a phase where it was attracting diminished attention. Beforethe Spring Festival, the demand for baijiu was strong, but the overall sales slowed down thereafter. In the first half of the year, theindustry as a whole saw an increase in production, revenue growth, improved profits, significant industry differentiation, dualrationality in consumption, and characteristics of the era of stock. In the second half of the year, the trend of strong concentration andstrong differentiation became more evident.According to data released by the National Bureau of Statistics (“NBS”) and the China Alcoholic Drinks Association (“CADA”), in2024, the production of large-scale baijiu enterprises nationwide was 4,144,700 kilolitres, a decrease of 1.80% year-on-year. Salesrevenue reached RMB796,384 million, a year-on-year increase of 5.3%, and total profit was RMB250,865 million, a year-on-yearincrease of 7.76%.In 2025, the baijiu industry is expected to continue to differentiate in a market of stock competition. Leading enterprises willconsolidate their advantages through branding, channels, and innovation, while small and medium-sized ones need to find survivalspace in niche markets. The industry’s growth logic is shifting from “volume growth” to “price increase”, while policies,consumption habits, and technological changes will become key variables.
2. Position of the Company in the Industry
China has a long history of baijiu. There are a large number of baijiu production enterprises in the country, but the regionaldistribution of baijiu consumers is particularly evident. The baijiu industry is characterised by full competition, with a high degree ofmarketization. The market competition is fierce, and the industry adjustments are constantly deepening. In the national market, thecompetitive edges of the enterprises come from their brand influence, product style and marketing & operation models. In a singleregional market, the competitive strengths of the enterprises depend on their brand influence in the region, the recognition of thecompanies by regional consumers and comprehensive marketing capacity.As one of China’s traditional top eight liquor brands, the Company is the first listed baijiu company with both A and B stocks. It islocated in Bozhou City, Anhui Province in China, the hometown of historic figures Cao Cao and Hua Tuo, as well as one of theworld’s top 10 liquor-producing areas. No changes have occurred to the main business of the Company in the Reporting Period. Asthe main product of the Company, the Gujing spirit originated as a “JiuYunChun Spirit”, together with its making secrets, beingpresented as a hometown specialty by Cao Cao, a famous warlord in China’s history, to Emperor Han Xiandi (name: Liu Xie) in A.D.196, and was continually presented to the royal house since then. With crystalline liquid, rich aroma, a fine flavour and a lingeringaftertaste, the Gujing spirit has helped the Company win four national baijiu golden awards, a golden award at the 13th SIAL Paris,the title of China’s “Geographical Indication Product”, the recognition as a “Key Cultural Relics Site under the State Protection”, therecognition with a “National Intangible Cultural Heritage Protection Project”, a Quality Award from the Anhui provincialgovernment, a title of “National Quality Benchmark”, among other honours.In April 2016, Gujing Distillery signed a strategic cooperation agreement with Huanghelou Liquor Co., Ltd., opening a new era ofcooperation in China’s famous liquor industry. Yellow Crane Tower Baijiu is the only famous Chinese liquor in Hubei. Its uniquestyle is “soft, mellow, elegant and cool, and has a long lingering fragrance”. It won the two China gold medal in baijiu appreciation in1984 and 1989. At present, Huanghelou liquor industry has three bases: Wuhan, Xianning and Suizhou. Among them, HuanghelouLiquor Culture Expo Park in Wuhan base has been approved as national AAA scenic spot, and Huanghelou forest wine town inXianning base has been approved as national AAAA scenic spot.
~ 12 ~
In January 2021, Gujing Distillery and Mingguang signed a strategic cooperation agreement. The unique mung bean flavour adds tothe famous liquor family of Gu Jing. The primary products of Mingguang Distillery include Mingguang Jianiang, Mingguang Daqu,Mingguang Youye, Mingguang Tequ, and 53% vol Mingluye. In December 2021, the Old Mingguang Brewing Technique wasselected for the sixth batch of provincial intangible cultural heritage list.
II Principal Activity of the Company in the Reporting Period
The Company is subject to the Guideline No. 14 of the Shenzhen Stock Exchange on Information Disclosure by Industry—for ListedCompanies Engaging in Food and Liquor & Wine Production.The Company primarily produces and markets baijiu. According to the Industry Categorisation Guide for Listed Companies(Revised in 2012) issued by the CSRC, baijiu making belongs to the “liquor, beverage and refined tea making industry” (C15). TheCompany’s principal operations remained unchanged in the Reporting Period.Main sales modelThe Company’s key sales model is dealer model. Under the dealer model, the Company will select one or more dealers for sales of aproduct brand (or product sub-brand) according to the market capacity.Distribution model:
? Applicable □ Not applicable
1. Operating Performance by Distribution Channel and Product Category
Unit: RMB
| By | Operating revenue | Cost of sales | Gross profit margin | YoY change in operating revenue (%) | YoY change in cost of sales (%) | YoY change in gross profit margin (%) |
| Channel | ||||||
| Online | 771,686,684.39 | 182,936,340.33 | 76.29% | 5.81% | -3.13% | 2.18% |
| Offline | 22,806,241,381.60 | 4,555,118,189.01 | 80.03% | 16.81% | 12.44% | 0.78% |
| Total | 23,577,928,065.99 | 4,738,054,529.34 | 79.90% | 16.41% | 11.75% | 0.83% |
| By | Operating revenue | Cost of sales | Gross profit margin | YoY change in operating revenue (%) | YoY change in cost of sales (%) | YoY change in gross profit margin (%) |
| Product series | ||||||
| Original Vintage | 18,085,853,655.05 | 2,510,992,291.37 | 86.12% | 17.31% | 13.47% | 0.47% |
| Gujinggong Liquor | 2,240,744,336.42 | 951,251,966.29 | 57.55% | 11.17% | 13.11% | -0.72% |
| Yellow Crane Tower and others | 2,538,460,722.08 | 713,786,227.33 | 71.88% | 15.08% | -0.04% | 4.25% |
~ 13 ~
| Total | 22,865,058,713.55 | 4,176,030,484.99 | 81.74% | 16.43% | 10.83% | 0.93% |
2. Number of Distributors by Geographical Segment
| Segment | Ending number | Change in the Reporting Period |
| North China | 1,360 | 136 |
| South China | 661 | 68 |
| Central China | 3,041 | 238 |
| International | 27 | 6 |
| Total | 5,089 | 448 |
Proportion of store sales terminal exceeds 10%
□ Applicable ? Not applicable
Online direct sales? Applicable □ Not applicableThe major product varieties sold online are Original Vintage Series, and Gujinggong Liquor Series, among others. The main onlinesales platforms are Gujing Distillery platform, Tmall, JD.com, and Suning.com.Any over 30% YoY movements in the selling price of main products contributing over 10% of current total operating revenue
□ Applicable ? Not applicable
Model and contents of purchaseModel of purchase: The Company primarily adopts the bidding and strategic cooperation models. It also adopts the base plantingmodel in order to ensure the quality of some raw materials.Contents of purchase
| Purchase contents | Purchase model | Amount (RMB’0,000) | |
| 1 | Raw materials | Strategic purchasing | 122,431.86 |
| Tendering purchasing | 197,844.16 | ||
| 2 | Packing materials | Tendering purchasing | 252,476.09 |
| Total | 572,752.11 | ||
The proportion of raw materials purchased from cooperations or farmers to total purchase amount exceeds 30%
□ Applicable ? Not applicable
Any over 30% YoY movements in prices of main purchased raw materials
□ Applicable ? Not applicable
Main production modelThe Company’s existing production model is sales-based production. Specifically, the Logistics Control Centre is responsible forcoordinating the implementation of production plans, release of material production plans, and delivery and tracking of products, andprepares balanced production plans on a quarterly basis according to the product inventory. The logistics distribution system iscoordinated according to the production schedule and inventory with a view to ensuring timely delivery of products.Commissioned production
□ Applicable ? Not applicable
Breakdown of cost of sales
~ 14 ~
| Item | 2024 | 2023 | Change (%) | ||
| Cost of sales (RMB) | As % of total cost of sales | Cost of sales (RMB) | As % of total cost of sales | ||
| Direct materials | 3,413,392,362.86 | 72.04% | 3,053,570,734.57 | 72.02% | 11.78% |
| Direct labour cost | 410,226,875.37 | 8.66% | 372,085,693.59 | 8.78% | 10.25% |
| Manufacturing expenses | 248,318,564.49 | 5.24% | 240,904,845.07 | 5.68% | 3.08% |
| Fuels | 104,092,682.27 | 2.20% | 101,496,426.06 | 2.39% | 2.56% |
| Total | 4,176,030,484.99 | 88.14% | 3,768,057,699.29 | 88.87% | 10.83% |
Output and inventory
1. Output, sales volume and inventory of main products for the Reporting Period and respective YoY changes thereof
Unit: ton
| Main product | Output | Sales volume | inventory | YoY changes of output | YoY changes of sales volume | YoY changes of inventory |
| Original Vintage Series | 71,210.81 | 71,087.43 | 24,776.30 | 12.09% | 11.99% | 0.50% |
| Gujinggong Liquor Series | 31,852.11 | 32,324.21 | 5,184.51 | 18.99% | 8.97% | -8.35% |
| Yellow Crane Tower Liquor Series and other | 24,982.56 | 24,890.00 | 4,320.49 | 3.03% | -1.14% | 2.19% |
2. Ending inventory of finished liquor and semi-product
| Category | Ending quantity (ton) |
| Finished liquor | 34,281.30 |
| Semi-product (including base liquor) | 293,503.56 |
3. Capacity
Unit: ton
| Main product | Designed capacity | Actual capacity | Capacity in progress |
| Finished liquor | 180,000 | 128,045 | 65,000 |
III Core Competitiveness AnalysisNo significant changes occurred to the Company’s core competitiveness in the Reporting Period.IV Analysis of Core Businesses
1. Overview
2024 is a key year for achieving the goals and tasks set out in the 14th Five-Year Plan. It is also a pivotal year in the development of
~ 15 ~
Gujing, marking a significant chapter and serving as a bridge between the past and the future. The Company adheres to Xi Jinping’sThought on Socialism with Chinese Characteristics for a New Era as its guide, fully studying and implementing the spirit of the 20thNational Congress of the Communist Party of China and the Third Plenary Session of the 20th CPC Central Committee, as well asthe important speech of General Secretary Xi Jinping during his inspection of Anhui. The Company is deeply committed to the newdevelopment philosophy, fostering and expanding new productive forces. With the support and trust of all shareholders, the Companyclosely aligns with its strategic goals, adhering to innovation-driven growth and sound management. It focuses on hard work, sayingless and doing more, and implementing practical actions. As a result, all business indicators have seen steady growth.In 2024, the Company achieved operating revenue of RMB 23,578 million, a year-on-year increase of 16.41%, net profit attributableto the parent company of RMB 5,517 million, a year-on-year increase of 20.22%, earnings per share of RMB10.44, a year-on-yearincrease of 20.28%;and net cash flow from operating activities of RMB 4,728 million, a year-on-year increase of 5.15%.The overall operating performance of the Company in the Reporting Period:
(I) The Company strove for more influential “brands” for enhancementThe Company continues to focus on two major media platforms, “CCTV” and “High-Speed Rail”, and deepens its engagement withthe “Spring Festival Gala” IP. We have been a special sponsor for the CCTV Spring Festival Gala, Lantern Festival Gala, and localSpring Festival Galas, as well as sponsoring the Poetry Conference, all of which help enhance the brand’s visibility and reputation.“Gujinggong Liquor ? New Year’s Eve”, as the liquor offered to celebrate China’s successful application for the intangible culturalheritage status of the Spring Festival, continually strengthens the deep connection between baijiu and the Chinese New Year. Thiseffort further enriches the cultural connotations of the Chinese New Year and promotes the brand concept of “Gujinggong Liquor ?Original Vintage, Made in China, Fragrant Worldwide”. At the 16th “Hua Zun Cup” China liquor brand value contest, the brandvalue of “Gujinggong” reached a new high of RMB375,756 million. Gujing’s brand influence continues to expand.(II) The Company strengthened quality management for prosperityThe Company has deepened the implementation of the large-scale quality project, focusing on strengthening quality management andstrictly implementing the quality control guidelines. Through a matrix-style quality control system, the Company has fully adoptedthe “135 Lean Quality” management model, reinforcing quality control throughout the entire process and value chain, from rawmaterial breeding to product dispatch, achieving simultaneous growth in both quantity and quality throughout the year. Theproduction process is strictly enforced, with stringent process controls and meticulous operations at every production stage. Theautomated bottling project is steadily progressing.(III) The Company pursued virtue in conduct for stabilityThe Company is committed to the “agriculture-first, industry-last” approach, increasing “order-based cultivation”, and leveraging itsrole as the “chain leader” in the baijiu industry to drive value co-creation across upstream and downstream enterprises. GujinggongLiquor ? Original Vintage made its appearance at the second China International Supply Chain Expo, showcasing to the world howthe baijiu industry enhances its development “value” by increasing its “green content.”(IV) The Company focused on technological innovation to continuously improve research and development capabilitiesThe Company has partnered with prestigious universities and industry experts to coordinate the operations of the “Four Institutes andOne Laboratory”, namely, the China Baijiu Health Research Institute, the Gujing Liquor ? Original Vintage Grain Research Institute,the Gujing Liquor ? Original Vintage Quality Research Institute, the Gujing Liquor ? Original Vintage Cultural Research Institute,and Anhui Province Key Laboratory of Intelligent Solid-state Fermentation Manufacturing. These efforts are aimed at continuouslyimproving the transformation and application of industry-academia-research achievements, leading to fruitful scientific andtechnological outcomes. One technological achievement was awarded the Second Prize for Scientific and Technological Progress bythe CADA, another was recognised as internationally leading by the China National Light Industry Council after passing theCouncil’s technology achievement appraisal, and three academic papers were honoured with one First Prize and two Third Prizes forExcellent Papers on Scientific and Technological Progress by the CADA respectively.(V) The Company promoted data and intelligence-driven for continuous industrial upgradingDigital empowerment in marketing is being utilized to build a unified sales portal, integrate marketing subsystems, and enable
~ 16 ~
one-stop business processing. This enhances convenience and operational efficiency, ensuring stable and smooth operations of thecore business and guaranteeing a worry-free peak season. The Company has strengthened its two major data foundations, focusing onreal-time analysis of marketing and supply chains. It has introduced a new model of digital decision-making that shifts productionoperations from experience-based to data-driven, using “data” for decisions and “intelligence” for insights, which enhancesmanagement precision and operational efficiency. The Company has been advancing digital transformation and promoting the deepintegration of digital technologies with production and manufacturing, with an aim to create the Gujing 5G fully linked transparentfactory, forge new quality productivity of “green brewing ? intelligent manufacturing” for baijiu, and promote the transformationfrom traditional manufacturing to digital intelligent manufacturing.(VI) The Company utilised reform and innovation to continuously deepen reforms to stimulate new vitalityThe Company has advanced reforms such as the term system and contract system, ensuring they are deepened and implementedeffectively. The competitive selection and evaluation mechanisms have been revitalised, with the implementation of the “one post,one plan” approach, achieving 100% competitive recruitment for grassroots management and general staff positions. The salarydistribution and performance evaluation mechanisms have been revitalised, further improving the evaluation system andimplementation rules for grassroots management personnel, ensuring that evaluation results are rigidly honoured. Additionally, themechanisms for job rotation, internal exit, and performance-based adjustments have been revitalised, allowing for flexibility inemployee entry and exit.(VII) The Company adhered to the guidance of Party building to continuously fulfil corporate social responsibility anddemonstrate a new commitmentThe Company has conscientiously studied and implemented the spirit of the Third Plenary Session of the 20th CPC CentralCommittee and the important speech delivered by General Secretary Xi Jinping during his inspection of Anhui. It promoted the study,publicity, and implementation of these directives at all levels of the Party organisation. The Company has carried out comprehensiveParty discipline education, holding mobilisation and deployment meetings for Party discipline education, special study sessions, andthematic Party lectures. In addition, the Company continues to foster a harmonious and mutually beneficial corporate ecosystem,creating greater value for stakeholders.(VII) In the Reporting Period, the Company was still under pressure and had deficiencies as follow
(1) The consumer demand is insufficient, with a decline in household consumption;
(2) The brand’s influence still needs to be further strengthened;
(3) Internal management requires further reform and efficiency improvements, and the Company’s internal growth potential needs tobe further activated.
2. Revenue and Cost Analysis
(1) Breakdown of Operating Revenue
Unit: RMB
| 2024 | 2023 | Change (%) | |||
| Operating revenue | As % of total operating revenue (%) | Operating revenue | As % of total operating revenue (%) | ||
| Total | 23,577,928,065.99 | 100% | 20,253,526,598.02 | 100% | 16.41% |
| By operating division | |||||
| Manufacturing | 23,577,928,065.99 | 100% | 20,253,526,598.02 | 100.00% | 16.41% |
~ 17 ~
| By product category | |||||
| Baijiu | 22,865,058,713.55 | 96.98% | 19,638,756,672.91 | 96.97% | 16.43% |
| Hotel services | 86,256,197.47 | 0.36% | 83,688,162.68 | 0.41% | 3.07% |
| Other | 626,613,154.97 | 2.66% | 531,081,762.43 | 2.62% | 17.99% |
| By operating segment | |||||
| North China | 1,979,406,985.66 | 8.40% | 1,842,994,377.93 | 9.10% | 7.40% |
| Central China | 20,150,945,972.42 | 85.46% | 17,106,718,631.38 | 84.47% | 17.80% |
| South China | 1,425,975,566.51 | 6.05% | 1,282,816,365.91 | 6.33% | 11.16% |
| Overseas | 21,599,541.40 | 0.09% | 20,997,222.80 | 0.10% | 2.87% |
| By sales model | |||||
| Online | 771,686,684.39 | 3.27% | 729,306,974.15 | 3.60% | 5.81% |
| Offline | 22,806,241,381.60 | 96.73% | 19,524,219,623.87 | 96.40% | 16.81% |
(2) Operating Division, Product Category, Operating Segment or Sales Model Contributing over 10% ofOperating Revenue or Operating Profit? Applicable □ Not applicable
Unit: RMB
| Operating revenue | Cost of sales | Gross profit margin | YoY change in operating revenue (%) | YoY change in cost of sales (%) | YoY change in gross profit margin (%) | |
| By operating division | ||||||
| Manufacturing | 23,577,928,065.99 | 4,738,054,529.34 | 79.90% | 16.41% | 11.75% | 0.83% |
| By product category | ||||||
| Baijiu | 22,865,058,713.55 | 4,176,030,484.99 | 81.74% | 16.43% | 10.83% | 0.93% |
| Hotel services | 86,256,197.47 | 43,558,686.26 | 49.50% | 3.07% | -3.48% | 3.43% |
| Other | 626,613,154.97 | 518,465,358.09 | 17.26% | 17.99% | 21.52% | -2.40% |
| By operating segment | ||||||
| North China | 1,979,406,985.66 | 402,020,125.25 | 79.69% | 7.40% | 7.71% | -0.06% |
| Central China | 20,150,945,972.42 | 4,073,567,182.41 | 79.78% | 17.80% | 11.99% | 1.04% |
| South China | 1,425,975,566.51 | 257,106,035.61 | 81.97% | 11.16% | 14.61% | -0.54% |
| Overseas | 21,599,541.40 | 5,361,186.07 | 75.18% | 2.87% | 13.87% | -2.40% |
| By sales model | ||||||
| Online | 771,686,684.39 | 182,936,340.33 | 76.29% | 5.81% | -3.13% | 2.18% |
| Offline | 22,806,241,381.60 | 4,555,118,189.01 | 80.03% | 16.81% | 12.44% | 0.78% |
Core business data of the prior year restated according to the changed statistical calibre for the Reporting Period:
~ 18 ~
□ Applicable ? Not applicable
(3) Whether Revenue from Physical Sales is Higher than Service Revenue
? Yes □ No
| Operating division | Item | Unit | 2024 | 2023 | Change (%) |
| Baijiu brewage | Sales volume | Ton | 128,301.64 | 118,319.28 | 8.44% |
| Output | Ton | 128,045.48 | 114,545.93 | 11.79% | |
| Inventory | Ton | 34,281.30 | 34,537.46 | -0.74% |
Any over 30% YoY movements in the data above and why:
□ Applicable ? Not applicable
(4) Execution Progress of Major Signed Sales and Purchase Contracts in the Reporting Period
□ Applicable ? Not applicable
(5) Breakdown of Cost of Sales
By operating division
Unit: RMB
| Operating division | Item | 2024 | 2023 | Change (%) | ||
| Cost of sales | As % of total cost of sales (%) | Cost of sales | As % of total cost of sales (%) | |||
| Food manufacturing | Direct materials | 3,413,392,362.86 | 72.04% | 3,053,570,734.57 | 72.02% | 11.78% |
| Food manufacturing | Direct labour cost | 410,226,875.37 | 8.66% | 372,085,693.59 | 8.78% | 10.25% |
| Food manufacturing | Manufacturing expenses | 248,318,564.49 | 5.24% | 240,904,845.07 | 5.68% | 3.08% |
| Food manufacturing | Fuels | 104,092,682.27 | 2.20% | 101,496,426.06 | 2.39% | 2.56% |
(6) Changes in the Scope of Consolidated Financial Statements for the Reporting Period
? Yes □ NoCompared with the prior year, the following subsidiaries were added to the consolidated financial statements of the Reporting Period:
Anhui Guge Cultural Media Co., Ltd., Anhui Gujing Sushuai Liquor Sales Co., Ltd., Ezhou Junya Trading Co., Ltd., and WuhanJuntai Trading Co., Ltd. This period also saw the liquidation of the following subsidiaries: Wuhan Yashibo Technology Co., Ltd.,Hubei Xinjia Testing Technology Co., Ltd., Hubei Junlou Cultural Tourism Co., Ltd., Hubei Yellow Crane Tower Beverage Co., Ltd.,Fengyang Xiaogang Village Ming Wine Distillery Co., Ltd., and Anhui Yangshengtianxia Brand Operation Co., Ltd.
~ 19 ~
(7) Major Changes to the Business Scope or Product or Service Range in the Reporting Period
□ Applicable ? Not applicable
(8) Major Customers and Suppliers
Major customers:
| Total sales to top five customers (RMB) | 2,819,506,670.33 |
| Total sales to top five customers as % of total sales of the Reporting Period (%) | 11.96% |
| Total sales to related parties among top five customers as % of total sales of the Reporting Period (%) | 0.00% |
Information about top five customers:
| No. | Customer | Sales revenue contributed for the Reporting Period (RMB) | As % of total sales revenue (%) |
| 1 | Distributor A | 1,887,510,122.18 | 8.01% |
| 2 | Distributor B | 271,896,311.02 | 1.15% |
| 3 | Distributor C | 254,944,784.83 | 1.08% |
| 4 | Distributor D | 205,425,479.08 | 0.87% |
| 5 | Distributor E | 199,729,973.22 | 0.85% |
| Total | -- | 2,819,506,670.33 | 11.96% |
Other information about major customers:
□ Applicable ? Not applicable
Major suppliers:
| Total purchases from top five suppliers (RMB) | 1,164,893,461.63 |
| Total purchases from top five suppliers as % of total purchases of the Reporting Period (%) | 20.34% |
| Total purchases from related parties among top five suppliers as % of total purchases of the Reporting Period (%) | 0.00% |
Information about top five suppliers:
| No. | Supplier | Purchase in the Reporting Period (RMB) | As % of total purchases (%) |
| 1 | Supplier A | 313,905,952.82 | 5.48% |
| 2 | Supplier B | 264,238,828.48 | 4.61% |
| 3 | Supplier C | 231,261,384.46 | 4.04% |
| 4 | Supplier D | 223,104,200.13 | 3.90% |
| 5 | Supplier E | 132,383,095.74 | 2.31% |
~ 20 ~
| Total | -- | 1,164,893,461.63 | 20.34% |
Other information about major suppliers:
□ Applicable ? Not applicable
In the Reporting Period, revenue from trade business accounted for more than 10% of the total operating revenue:
□ Yes ? No □ Not Applicable
3. Expense
Unit: RMB
| 2024 | 2023 | Change (%) | Reason for any significant change | |
| Selling expense | 6,181,762,995.50 | 5,436,773,057.25 | 13.70% | |
| Administrative expense | 1,442,398,926.31 | 1,367,146,467.89 | 5.50% | |
| Finance costs | -348,824,206.45 | -162,244,024.88 | -115.00% | The main reason is the increase in interest income |
| R&D expense | 78,242,212.58 | 70,947,196.49 | 10.28% |
The Company is subject to the Guideline No. 14 of the Shenzhen Stock Exchange on Information Disclosure by Industry—for ListedCompanies Engaging in Food and Liquor & Wine Production.Breakdown of selling expense:
Unit: RMB
| Item | 2024 | 2023 | Change (%) | Reason |
| Employment benefits | 1,280,868,189.84 | 1,230,880,423.44 | 4.06% | |
| Travel fees | 257,167,425.19 | 223,518,669.30 | 15.05% | |
| Advertisement fees | 1,309,141,466.48 | 1,101,364,892.63 | 18.87% | |
| Comprehensive promotion costs | 2,563,283,912.38 | 2,089,071,299.15 | 22.70% | |
| Service fees | 658,399,995.56 | 656,190,943.27 | 0.34% | |
| Others | 112,902,006.05 | 135,746,829.46 | -16.83% | |
| Total | 6,181,762,995.50 | 5,436,773,057.25 | 13.70% |
Details about advertisement
| No. | Main way | Amount (RMB10,000) |
| 1 | TV | 41,927.70 |
| 2 | Offline | 63,802.84 |
| 3 | Online | 25,183.61 |
| Total | 130,914.15 | |
~ 21 ~
4. R&D Investments
? Applicable □ Not applicable
| Names of main R&D projects | Project objectives | Project progress | Objectives to be achieved | Expected impact on the future development of the Company |
| Research on key technologies for the intelligent control of quinoa cultivation | The intelligent control of the quinoa cultivation process is achieved to establish a high-quality large quinoa fermentation model. | Through an intelligent quinoa room platform, fermentation process parameters are monitored, and door and window switches are controlled in pilot quinoa cultivation rooms. | The Company aims to monitor and adjust quinoa-related parameters online, establish quality standards for key control points in intelligent cultivation, and achieve intelligent control of the cultivation process. | By improving work efficiency and strengthening quality control in the cultivation process, the Company is expected to further enhance the quality of large quinoa and the level of digital and intelligent management. |
| Research on the driving role of “Minglu No. 1” mung beans in the formation of key flavour compounds in Minglu fragrant baijiu | The impact of mung bean varieties on the key flavour compounds in Minglu baiju is determined to study the mechanism of flavour compound formation in Minglu baijiu. | Concluded. | The Company determines the positive and negative impacts of mung beans on the flavour profile of Minglu baijiu through experiments. It applies the developed process to improve the flavour profile of the raw Minglu baijiu during production. | The project is expected to improve the utilisation rate of raw materials and enhance the quality grade of Minglu baijiu, bringing economic and social benefits to the Company. |
| Research on the green and high-value utilisation of by-products from crushing baijiu brewing materials | The impact of by-products from crushing raw materials on high-temperature quinoa quality and raw liquor quality in quinoa production is explored. | The project has been concluded, and the application has been promoted. | The Company aims to improve the comprehensive utilisation value of by-products from crushing baijiu brewing materials. | The project can save costs for the Company, improve economic efficiency, and contribute to the Company’s green development. |
| Research on key technologies for intelligent quinoa cultivation | A basic model for quinoa cultivation is established to explore its impact on large quinoa quality. | Research on index optimisation has been completed, which benefits the enhancement of large quinoa’s sensory characteristics and flavour compounds. | The Company aims to improve the quality of its intelligent quinoa cultivation and assist in its intelligent development. | The project is expected to enhance the intelligence level of labour-intensive processes in the traditional industry, improve key technologies for intelligent quinoa cultivation, and contribute to the development of intelligent brewing technologies for the Company. |
| Research on | The correlation of | The preliminary | The critical points for | The project is expected to |
~ 22 ~
| distillation quality improvement technologies of strongly fragrant baijiu and intelligent distillation rules of baijiu | flavour components during the distillation process is explored. | establishment of a mathematical model for the variation curve of alcohol content in liquor samples over time has been completed. With time increasing, the instantaneous alcohol content shows an exponential decay. | segmented baijiu picking are identified, providing theoretical support for intelligent liquor picking and standardisation of raw liquor quality. | improve the quality of intelligent liquor picking and the standardisation of raw liquor quality. |
| Research on quality standards for crushing brewing grains | Through the optimisation of single-grain crushing degree testing methods, exploration of the current state of grain crushing in the Company, study of crushing conditions, and workshop validation, this project aims to establish evaluation standards for grain crushing. | Concluded. | To determine the optimal range of crushing degrees for brewing grains. | Ensuring that the grain flour reaches the optimal gelatinisation state, thereby promoting an improvement in the quality of the brewing production. |
| Research on the intelligent brewing process and environmental microbial communities | The changes in microbial communities during the intelligent park fermentation process are explored to conduct trace analysis of environmental microbial communities during fermentation. | Methods for collecting workshop environmental samples and genomic extraction have been developed, and sampling of fermenting grains and microbial community testing and analysis for both intelligent and traditional workshops have been completed. | The Company aims to systematically study the changes in microbial communities during the fermentation process of intelligent parks, and compare them with traditional brewing production workshops to analyse the differences in the quality of raw liquor in different factory areas. | The microbial community regulation strategy will provide guidance for improving raw liquor quality and lay the foundation for the stable upgrading of the quality of raw liquor produced in the intelligent park |
Details about R&D personnel:
| 2024 | 2023 | Change (%) | |
| Number of R&D personnel | 1,061 | 1,147 | -7.50% |
| R&D personnel as % of total employees | 7.89% | 8.84% | -0.95% |
~ 23 ~
| Educational background of R&D personnel | —— | —— | —— |
| Bachelor’s degree | 203 | 190 | 6.84% |
| Master’s degree | 89 | 68 | 30.88% |
| Other | 769 | 889 | -13.50% |
| Age structure of R&D personnel | —— | —— | —— |
| Below 30 | 259 | 236 | 9.75% |
| 30~40 | 477 | 458 | 4.15% |
| Over 40 | 325 | 453 | -28.26% |
Details about R&D investments:
| 2024 | 2023 | Change (%) | |
| R&D investments (RMB) | 435,332,086.16 | 366,964,999.32 | 18.63% |
| R&D investments as % of operating revenue | 1.85% | 1.81% | 0.04% |
| Capitalized R&D investments (RMB) | 0.00 | 0.00 | 0.00 |
| Capitalized R&D investments as % of total R&D investments | 0.00% | 0.00% | 0.00% |
Reasons for any significant change to the composition of R&D personnel and the impact:
□ Applicable ? Not applicable
Reasons for any significant YoY change in the percentage of R&D investments in operating revenue:
□ Applicable ? Not applicable
Reasons for any sharp variation in the percentage of capitalized R&D investments and rationale:
□ Applicable ? Not applicable
5. Cash Flows
Unit: RMB
| Item | 2024 | 2023 | Change (%) |
| Subtotal of cash generated from operating activities | 25,419,226,220.25 | 22,245,995,624.12 | 14.26% |
| Subtotal of cash used in operating activities | 20,691,573,346.40 | 17,749,789,589.70 | 16.57% |
| Net cash generated from/used in operating activities | 4,727,652,873.85 | 4,496,206,034.42 | 5.15% |
| Subtotal of cash generated from investing activities | 979,361,059.90 | 1,926,743,407.87 | -49.17% |
~ 24 ~
| Subtotal of cash used in investing activities | 2,712,403,146.80 | 3,204,676,207.01 | -15.36% |
| Net cash generated from/used in investing activities | -1,733,042,086.90 | -1,277,932,799.14 | -35.61% |
| Subtotal of cash generated from financing activities | 146,000,100.00 | 162,200,000.00 | -9.99% |
| Subtotal of cash used in financing activities | 2,623,643,610.12 | 1,809,679,253.14 | 44.98% |
| Net cash generated from/used in financing activities | -2,477,643,510.12 | -1,647,479,253.14 | -50.39% |
| Net increase in cash and cash equivalents | 516,967,276.83 | 1,570,793,982.14 | -67.09% |
Explanation of why any of the data above varies significantly:
? Applicable □ Not applicable
(1) Net cash generated from investing activities stood at RMB-1,733,042,086.90 in the Reporting Period, down 35.61% year-on-year,primarily driven by the decreased cash received from the recovery of investments.
(2) Net cash generated from financing activities stood at RMB-2,477,643,510.12 in the Reporting Period, down 50.39% year-on-year,primarily driven by the increased cash paid for dividend distributions.
(3) The net increase in cash and cash equivalents in the Reporting Period was RMB516,967,276.83, down 67.09% year-on-year,primarily driven by the increased cash paid for dividend distributions.Reasons for any big difference between the net operating cash flow and the net profit for this Reporting Period
□ Applicable ? Not applicable
V Analysis of Non-Core Businesses
□ Applicable ? Not applicable
VI Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Unit: RMB
| 31 December 2024 | 1 January 2024 | Change in percentage (%) | Reason for any significant change | |||
| Amount | As % of total assets | Amount | As % of total assets | |||
| Monetary assets | 15,894,104,466.53 | 39.22% | 15,966,371,744.19 | 45.08% | -5.86% | |
| Accounts receivable | 69,819,734.99 | 0.17% | 68,607,919.27 | 0.19% | -0.02% | |
~ 25 ~
| Inventories | 9,264,220,836.58 | 22.86% | 7,519,682,536.51 | 21.23% | 1.63% | |
| Investment property | 43,893,659.88 | 0.11% | 46,622,910.19 | 0.13% | -0.02% | |
| Long-term equity investments | 11,732,641.44 | 0.03% | 10,367,078.26 | 0.03% | 0.00% | |
| Fixed assets | 7,896,995,404.62 | 19.49% | 4,596,044,056.92 | 12.98% | 6.51% | |
| Construction in progress | 1,038,780,764.86 | 2.56% | 2,910,735,155.39 | 8.22% | -5.66% | |
| Right-of-use assets | 100,293,500.73 | 0.25% | 81,038,100.24 | 0.23% | 0.02% | |
| Short-term borrowings | 50,038,194.44 | 0.12% | 0.00 | 0.00% | 0.12% | |
| Contract liabilities | 3,514,800,038.80 | 8.67% | 1,401,122,249.53 | 3.96% | 4.71% | |
| Long-term borrowings | 41,600,000.00 | 0.10% | 107,106,256.94 | 0.30% | -0.20% | |
| Lease liabilities | 84,453,588.30 | 0.21% | 68,380,767.78 | 0.19% | 0.02% |
Indicate whether overseas account for a larger proportion in the total assets.
□ Applicable ? Not applicable
2. Assets and Liabilities at Fair Value
? Applicable □ Not applicable
Unit: RMB
| Item | Beginning amount | Gain/loss on fair-value changes in the Reporting Period | Cumulative fair-value changes charged to equity | Impairment allowance for the Reporting Period | Purchased in the Reporting Period | Sold in the Reporting Period | Other changes | Ending amount |
| Financial assets | ||||||||
| 1. Held-for-trading financial assets (excluding derivative financial assets) | 719,987,547.42 | 184,353.81 | 0.00 | 285,000,000.00 | 944,987,547.42 | 60,184,353.81 | ||
~ 26 ~
| 2. Derivative financial assets | ||||||||
| 3. Other debt investments | ||||||||
| 4. Other equity investments | 63,105,658.07 | 0.00 | 6,395,172.75 | 0.00 | 0.00 | 69,500,830.82 | ||
| 5. Other non-current financial assets | ||||||||
| Subtotal of financial assets | 783,093,205.49 | 184,353.81 | 6,395,172.75 | 285,000,000.00 | 944,987,547.42 | 129,685,184.63 | ||
| Total of the above | 783,093,205.49 | 184,353.81 | 6,395,172.75 | 285,000,000.00 | 944,987,547.42 | 129,685,184.63 | ||
| Financial liabilities | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
Significant changes to the measurement attributes of the major assets in the Reporting Period:
□ Yes ? No
3. Restricted Asset Rights as at the Period-End
| Item | Ending carrying value | Reason for restriction |
| Monetary assets | 700,969,772.34 | Time deposits and cash deposits that are pledged for issuing bank acceptance bills and other margins. |
| Intangible assets | 75,865,706.76 | Pledged loans. |
| Total | 776,835,479.10 | -- |
~ 27 ~
VII Investments Made
1. Total Investment Amount
□ Applicable ? Not applicable
2. Major Equity Investments Made in the Reporting Period
□ Applicable ? Not applicable
3. Major Non-Equity Investments Ongoing in the Reporting Period
? Applicable □ Not applicable
Unit: RMB
| Item | Way of investment | Fixed assets investment or not | Industry involved | Input amount in the Reporting Period | Accumulative actual input amount as of the period-end | Capital resources | Progress | Estimated return on investment | Accumulative realized revenues as of the period-end | Reason for not reaching the schedule and anticipated income | Disclosure date (if any) | Disclosure index (if any) |
| The smart technology transformation project for liquor production | Self-built | Yes | Liquor production | 1,926,320,026.58 | 7,033,603,177.14 | Self-owned funds and raised funds | 95.00% | N/A | N/A | N/A | 3 March 2020 | For details, please refer to the Announcement on Investment in the Smart |
~ 28 ~
| Technology Transformation Project for Liquor Production disclosed by the Company on the website of Cninfo dated 3 March 2020. | ||||||||||||
| Total | -- | -- | -- | 1,926,320,026.58 | 7,033,603,177.14 | -- | -- | N/A | N/A | -- | -- | -- |
The project is still under construction as of the end of the Reporting Period and has not yet been completed, with the relevant project contract amount exceeding RMB200 million:
□ Yes ? No □ Not Applicable
~ 29 ~
4. Financial Investments
(1) Securities Investments
□ Applicable ? Not applicable
(2) Investments in Derivative Financial Instruments
? Applicable □ Not applicable
1) Investments in derivative financial instruments for the purpose of hedging during the Reporting Period
□ Applicable ? Not applicable
No such cases in the Reporting Period.
2) Investments in derivative financial instruments for the purpose of speculation during the Reporting Period? Applicable □ Not applicable
Unit: RMB’0,000
| Operator | Relationship with the Company | Connected transaction | Type of derivative | Initial investment amount | Starting date | Ending date | Beginning investment amount | Purchased in the Reporting Period | Sold in the Reporting Period | Impairment provision (if any) | Ending investment amount | Proportion of closing investment amount in the Company’s ending net assets | Actual gain/loss in the Reporting Period |
| Reverse repurchase of national | Naught | No | Reverse repurchase of national | 2,519.90 | 25 December 2023 | 11 January 2024 | 2,519.90 | 0.00 | 2,519.90 | 0.00 | 0.00 | 0.00% | 7.13 |
~ 30 ~
| debt | debt | |||||||||||
| Total | 2,519.90 | -- | -- | 2,519.90 | 0.00 | 2,519.90 | 0.00 | 0.00 | 0.00% | 7.13 | ||
| Capital source for derivative investment | Company’s own funds | |||||||||||
| Lawsuits involved (if applicable) | N/A | |||||||||||
| Disclosure date of board announcement approving derivative investment (if any) | 27 April 2024 | |||||||||||
| Disclosure date of shareholders’ meeting announcement approving derivative investment (if any) | N/A | |||||||||||
| Analysis of risks and control measures associated with derivative investments held in the Reporting Period (including but not limited to market risk, liquidity risk, credit risk, operational risk, legal risk, etc.) | N/A | |||||||||||
| Changes in market prices or fair value of derivative investments during the Reporting Period (fair value analysis should include measurement method and related assumptions and parameters) | N/A | |||||||||||
| Explanation of whether there have been significant changes in the Company’s accounting policies and specific accounting principles for derivatives compared to the previous Reporting Period | N/A | |||||||||||
~ 31 ~
5. Use of Funds Raised
? Applicable □ Not applicable
(1) Overall Usage of Funds Raised
? Applicable □ Not applicable
Unit: RMB’0,000
| Year | Way of raising | Listing date of securities | Total funds raised | Net of funds raised (1) | Total funds used in the Current Period | Accumulative fund used (2) | The ratio of funds raised used at the end of the Reporting Period (3) = (2)/(1) | Total funds with usage changed | Accumulative funds with usage changed | Proportion of accumulative funds with usage changed | Total unused funds | The usage and destination of unused funds | Amount of funds raised idle for over two years |
| 2021 | Private placement of stocks | 22 July 2021 | 500,000 | 495,434.21 | 163,961.40 | 472,515.26 | 95.37% | 0.00 | 0.00 | 0.00% | 22,918.95 | Permanent supplementation of working capital | 0.00 |
| Total | -- | -- | 500,000 | 495,434.21 | 163,961.40 | 472,515.26 | 95.37% | 0.00 | 0.00 | 0.00% | 22,918.95 | -- | 0.00 |
| Explanation of overall usage of funds raised | |||||||||||||
| The Company’s fundraising projects have been completed, and the remaining raised funds have been permanently allocated to supplement the Company’s working capital. (For specific details, please refer to the Announcement on the Completion of Fundraising Investment Projects and the Permanent Allocation of Surplus Funds to Supplement Working Capital disclosed by the Company on 31 December 2024 on the CNINFO website). | |||||||||||||
~ 32 ~
(2) Commitment Projects of Fund Raised
? Applicable □ Not applicable
Unit: RMB’0,000
| Financing project name | Listing date of securities | Committed investment project and super raise fund arrangement | Nature of the project | Changed or not (including partial changes) | Committed investment amount | Investment amount after adjustment (1) | Investment amount in the Reporting Period | Accumulative investment amount as of the period-end (2) | Investment schedule as the period-end (3)＝(2)/(1) | Date of reaching intended use of the project | Realized income in the Reporting Period | Cumulative benefits achieved as of the end of the Reporting Period | Whether reached anticipated income | Whether occurred significant changes in project feasibility | |
| Committed investment project | |||||||||||||||
| The smart technology transformation project for liquor production | 22 July 2021 | The smart technology transformation project for liquor production | Production and construction | Not | 495,434.21 | 495,434.21 | 163,961.40 | 472,515.26 | 95.37% | 31 December 2024 | 0.00 | 0.00 | N/A | Not | |
| Subtotal of committed investment project | -- | 495,434.21 | 495,434.21 | 163,961.40 | 472,515.26 | -- | -- | 0.00 | -- | -- | |||||
| Total | -- | 495,434.21 | 495,434.21 | 163,961.40 | 472,515.26 | -- | -- | 0.00 | -- | -- | |||||
| Explanation for each project on the situation and reasons for | N/A | ||||||||||||||
~ 33 ~
| not meeting the planned progress and expected benefits (including the reason for selecting “N/A” for “Whether reached anticipated income”) | |||||
| Notes of condition of significant changes occurred in project feasibility | N/A | ||||
| Amount, usage and schedule of super raise fund | N/A | ||||
| Changes in implementation address of investment | N/A |
~ 34 ~
| project | |||||
| Adjustment of implementation mode of investment project | N/A | ||||
| Advance investments in projects financed with raised funds and swaps of such advance investments with subsequent raised funds | N/A | ||||
| Idle fund supplementing the current capital temporarily | N/A | ||||
| Amount of surplus in project implementation and the reasons | Applicable | ||||
| During the implementation of the fundraising investment projects, the Company strictly follows laws and regulations and uses the raised funds prudently. Based on the actual circumstances of the projects, the Company adopts the principles of rationality, effectiveness, and cost-efficiency, and uses the raised funds in a scientific and prudent manner. | |||||
~ 35 ~
| While ensuring the quality of the fundraising projects, the Company strengthens cost control, supervision, and management at every stage of the project construction, reasonably reducing the total investment in the projects. Additionally, to improve the efficiency of using the raised funds, the Company manages idle funds through cash management, on the premise of ensuring that the construction of fundraising projects and the safety of fundraising funds are not affected, and has generated certain financial management income and interest earnings. | |
| Usage and destination of unused funds | Permanent supplementation of working capital |
| Problems incurred in fund using and disclosure or other condition | N/A |
(3) Raised Funds Re-purposed
□ Applicable ? Not applicable
No such cases in the Reporting Period.VIII Sale of Major Assets and Equity Interests
1. Sale of Major Assets
□ Applicable ? Not applicable
No such cases in the Reporting Period.
2. Sale of Major Equity Interests
□ Applicable ? Not applicable
~ 36 ~
IX Principal Subsidiaries and Joint Stock Companies? Applicable □ Not applicableMain subsidiaries and joint stock companies with an over 10% influence on the Company’s net profits
Unit: RMB
| Company name | Relationship with the Company | Main business scope | Registered capital | Total assets | Net assets | Operating revenues | Operating profit | Net profit |
| Bozhou Gujing Sales Co., Ltd | Subsidiary | Wholesales of baijiu, construction materials, feeds, assistant materials, etc. | 84,864,497.89 | 10,456,159,042.33 | 1,847,206,112.80 | 21,189,413,169.88 | 2,200,627,278.80 | 1,572,961,696.29 |
| Anhui Longrui Glass Co., Ltd | Subsidiary | Manufacture and sale of glass products, etc. | 88,710,268.98 | 625,670,292.89 | 498,362,220.15 | 506,940,966.04 | 50,393,236.31 | 46,354,636.68 |
| Yellow Crane Tower Wine Industry Co., Ltd | Subsidiary | Production and sales of baijiu, etc. | 400,000,000.00 | 1,950,998,834.49 | 1,060,897,560.28 | 2,139,845,657.49 | 325,667,658.21 | 235,967,539.38 |
| Shanghai Gujing Jinhao Hotel Management Co., Ltd. | Subsidiary | Hotel management, house lease, etc. | 54,000,000.00 | 191,051,876.97 | 157,501,716.28 | 71,422,591.72 | 6,816,420.62 | 5,343,969.43 |
Subsidiaries obtained or disposed in the Reporting Period:
? Applicable □ Not applicable
| Subsidiary | How subsidiary was obtained or disposed | Effects on overall operations and performance |
| Anhui Guge Cultural Media Co., Ltd. | Incorporated with investment | Optimising internal operation structure and enhancing |
~ 37 ~
| endogenous impetus | ||
| Anhui Gujing Sushuai Liquor Sales Co., Ltd. | Incorporated with investment | Optimising internal operation structure and enhancing endogenous impetus |
| Ezhou Junya Trading Co., Ltd. | Incorporated with investment | Optimising internal operation structure and enhancing endogenous impetus |
| Wuhan Juntai Trading Co., Ltd. | Incorporated with investment | Optimising internal operation structure and enhancing endogenous impetus |
| Wuhan Yashibo Technology Co., Ltd. | De-registered and liquidated | |
| Hubei Xinjia Testing Technology Co., Ltd. | De-registered and liquidated | |
| Hubei Junlou Cultural Tourism Co., Ltd. | De-registered and liquidated | |
| Hubei Yellow Crane Tower Beverage Co., Ltd. | De-registered and liquidated | |
| Fengyang Xiaogang Village Ming Wine Distillery Co., Ltd. | De-registered and liquidated | |
| Anhui Yangshengtianxia Brand Operation Co., Ltd. | De-registered and liquidated |
Notes to main controlled and joint stock companies:
Not applicable.
~ 38 ~
X Structured Bodies Controlled by the Company
□ Applicable ? Not applicable
XI Prospects
(I) Development Prospect of the Industry the Company is in
1. Era of stock competition: Slower growth becomes the industry consensus
Under the combined effects of the macroeconomic cycle and industrial differentiation, the baijiu industry has bid farewell to theprevious phase of high-speed growth. It has gradually shifted from volume-driven growth to structural growth. In 2024, the baijiuindustry faces issues such as overcapacity, high inventory, price inversion, and intense internal competition, while national baijiuproduction continues to decline year by year. With the dual impact of a gradual slowdown in population growth and stockcompetition within the industry, slower growth has become a consensus within the baijiu industry.
2. Return to productism: Transition from “scale expansion” to “value deepening”
The baijiu industry is experiencing a trend of “return to productism”, which emphasises product quality as the core competitiveadvantage. Liquor enterprises are consolidating their market positions through an extreme pursuit of product quality, preciseunderstanding of consumer needs, and deep exploration of cultural connotations. In 2025, major liquor companies and governmentsin baijiu-producing regions have also adapted to this trend by introducing more targeted and specific policy measures to promote theindustry’s transformation from “scale expansion” to “value deepening”. By fostering collaboration across the industry chain, they aimto drive high-quality development in baijiu-producing regions while firmly expanding markets and promoting stable growth in thebaijiu industry.
3. Clear trend of integrated development: Creating a “Baijiu +” new consumption modelThe shift from selling liquor to selling lifestyle has become a vivid portrayal of the current integrated development of the baijiuindustry. Scene-based consumption, emotional consumption, and quality consumption are increasingly resonating with consumers. Inthe face of stock competition, baijiu-producing regions and enterprises need to create a “Baijiu +” new consumption model and newscenarios to enhance the brand influence of the regions and enterprises. By creating immersive experience consumption scenarios,they aim to deeply integrate brands and culture, creating a completely new consumer experience.
4. Acceleration of digital transformation: “Artificial Intelligence +” will drive the development and upgrading of the baijiuindustryThe rapid advancement of technology and the continuous penetration of new technologies into the baijiu industry chain are drivingthe sector forward. “Artificial Intelligence +” is empowering the current and future development of the baijiu industry with itspowerful capabilities. For example, baijiu brands can use deep data mining and consumer behaviour analysis to track the purchasingpreferences, social dynamics, and trends of younger consumers. The support of AI technology not only helps baijiu brands predicttrends related to consumers’ age, region, gender, and other factors accurately but also allows for dynamic adjustments to marketingstrategies based on individual needs.
5. Acceleration of internationalisation: Opening up new opportunities to integrate into the global market2024 is referred to as the “first year” of Chinese baijiu going overseas. The total export value of Chinese alcoholic beverages reachedUSD1.9 billion, a year-on-year increase of 6.0%. The total export volume was 750 million litres, a 5.1% increase from the previousyear, with baijiu continuing to lead as the largest export category. The 2025 Government Work Report proposes expanding high-levelopening-up and actively stabilising foreign trade and foreign investment, which presents significant development opportunities forChinese liquor companies “going global”. Liquor companies may experience a year of concentrated efforts under the support of bothpolicies and strategies.(II) Development Strategy of the Company
1. Firmly boost “Strategy 5.0, Five-Star Operation” strategy
Comprehensively fulfil Strategy 5.0 and have the “User-Cantered” thought fully and deeply implemented in the Company. Solidlycreate the “Five-Star Operation”, enhance competitive force, improve quality and efficiency, optimise services and promote healthy
~ 39 ~
and efficient operation of the enterprise.
2. Firmly boost reform and innovation strategy
Deeply boost marketing innovation, technological innovation and mechanism innovation and generate endogenous power of theenterprise.
3. Firmly create “Talent Highland” strategy
Intensify talent recruitment and attraction and establish flexible talent attraction and wisdom experience borrowing mechanism.Innovate talent training mode and promote independent cultivation & development and absorption & attraction simultaneously.(III) Operating Revenue Plan of the Company in 2025Total operating income has achieved steady growth compared to the previous year.(IV) Operating Risk of the Company
1. The escalation of global trade protectionism continues, and the adverse impacts from changes in the external environment aredeepening.
2. The industry is experiencing greater differentiation, with slow sales, unstable prices, and a cooling market, entering a new periodof adjustment.(V) Operating Measures
1. Brand Development
The Company will continue to uphold the strategy of “high-profile promotion, external focus with internal integration, and a dualapproach of both internal and external”, actively partnering with mainstream media, leveraging integrated media, and amplifying thevoice of Gujing. It will fully utilise platforms such as short videos and live streaming to enhance brand visibility. It will keepharnessing the power of digital marketing, obtaining attention with more product offerings, creating a synergistic effect amongproducts, and promoting the deep integration of online and offline channels. Thus, product exposure is increased, brand promotion isstrengthened, consumer awareness is enhanced, and customer experience is optimised and upgraded. The Company will createnational brand momentum, comprehensively shaping brand value, and elevating the cultural depth, humanistic warmth, andexperiential richness of the Gujing brand.
2. Marketing
The Company will continue to focus on the “nationalisation and premium segment” strategy, adhering to the implementation path of“setting up flags, drilling wells, cultivating customers, and increasing volume”, and further promoting the “Three ConnectivityProject”. It will implement the policy of “boosting sales, reducing inventory, expanding channels, and stabilising prices”. It willstabilise the existing market while exploring new markets, strengthen the channel network, expand coverage, and seek newopportunities. By deepening cooperation with distributors, the Company will increase efforts in channel development and worktogether to achieve a mutually beneficial and win-win situation.
3. Production Management
The Company will continue to enhance the advancement and applicability of the “Gujing Standard” across the entire supply chain,from raw material supply to production quality, brewing exceptional wines, and co-creating and sharing the value of fine wines. Itwill accelerate the formation of a virtuous interaction among the field, workshop, laboratory, and market, focusing on advantagessuch as fragrance types and production regions, continually improving the product expression system, and increasing consumerrecognition and satisfaction. The Company will strengthen the stable improvement of product quality, and focus on establishing a“quality-price matching” pricing system. It will coordinate the deep operations of the “Four Institutes and One Laboratory”,leveraging resources from cooperating universities and research institutions to provide strong scientific and cultural support forGujing, and promoting the better transformation of research achievements.
4. Digitalisation Construction
The Company will accelerate the digitalisation of Gujing, enhance digital management capabilities, improve digital marketing levels,and optimise digital production models. It will build an integrated smart energy management platform and establish a microgrid torealise intelligent and lean management of the Company’s power system. By promoting the application of AI large-model technologyin various scenarios, the Company will further enhanced monitoring efficiency and the level of intelligence. It will establish a smartmanagement platform for Gujing’s raw material planting bases to systematically control the entire information flow of the raw
~ 40 ~
material planting process, ensuring standardised management, accurate quantity, pure varieties, safety, controllability, trustworthiness,and traceability of the raw material planting process.
5. Safety and Environmental Protection
The Company will strengthen the management of each production stage to ensure food safety. By deepening the implementation ofthe three-year action plan, the Company will address the root causes of production safety, ensuring safe production and long-termmanagement to achieve the “four no’s” goal (no accidents, no violations, no leaks, and no injuries). It will practise green andlow-carbon production, systematically promote energy conservation and emission reduction, and ensure compliance with emissionstandards.
6. Internal Management
The Company will further remove institutional and systemic barriers to unleash the intrinsic potential and vitality of the organisationand individuals. Focusing on building an “agile organisation”, it will implement the talent development strategy, deepen the “TwoPools and Two Paths” approach, and carry out the Inheritance Plan, Talent Programme, and other initiatives. These efforts will helpform a talent management system of “attract, nurture, utilise, and retain”, driving the efficient operation of the enterprise. TheCompany will optimise the organisational structure, improve management systems, and innovate incentive mechanisms to stimulateemployee enthusiasm and creativity, continually enhancing the overall effectiveness of the organisation.
7. Corporate Culture Construction
The Company will continue to adhere to the principle of “Culture as the Stage, Business as the Performance”, combining productconnotations, cultural values, consumer emotions, and brand stories to resonate with consumers’ hearts. With “Truth, Goodness, andBeauty” as the core value, the Company aims to create a “Three-Right Ecological System” and promote the creative transformationand innovative development of corporate and liquor culture, allowing culture to empower product strength.In 2025, the Company will unite even more closely around the Central Committee of the Communist Party of China, with Xi Jinpingat its core. Under the strong leadership of the municipal government of Bozhou, the Company will carry forward the spirit of “dare tobe the first, love to fight and win” and “how many times in life can one fight”, maintaining its high fighting spirit, staying true to thefounding mission of Gujing, upholding the will of the Gujing Iron Army, daring to think and act, facing challenges head-on, andcontinuing to work alongside all shareholders to write a new chapter for Gujing to create more returns for all shareholders.XII Communications with the Investment Community such as Researches, Inquiries andInterviews
□ Applicable ? Not applicable
XIII. Formulation and Implementation of Market Value Management System and ValuationImprovement PlanHas the Company established a market value management system?? Yes □ NoHas the Company disclosed the valuation improvement plan?
□ Yes ? No
On 25 April 2025, the Company held the 10th meeting of the 10th Board of Directors, during which the Proposal on Establishing aMarket Value Management System for the Company was reviewed and approved. To strengthen the Company’s market valuemanagement, further standardise market value management practises, and effectively enhance the Company’s investment value andshareholder return capacity, the Company has formulated the Market Value Management System of Anhui Gujing DistilleryCompany Limited. based on the Company Law of the People’s Republic of China, Securities Law of the People’s Republic of China,Several Opinions of the State Council on Strengthening Supervision, Preventing Risks, and Promoting the High-QualityDevelopment of the Capital Market, Guideline No. 10 on the Supervision of Listed Companies - Market Value Management, andother relevant laws, regulations, normative documents, as well as the Articles of Association. For specific details, please refer to the
~ 41 ~
Market Value Management System of Anhui Gujing Distillery Company Limited. disclosed by the Company on the same day on theCNINFO website.XIV Implementation of the Action Plan for “Dual Enhancement of Quality and Profitability”Indicate whether the Company has disclosed its Action Plan for “Dual Enhancement of Quality and Profitability”.? Yes □ NoIn order to implement the guiding ideology of “to activate the capital market and boost investor confidence” proposed by the meetingof the Political Bureau of the CPC Central Committee and “to vigorously improve the quality and investment value of listedcompanies, and to take more effective and effective measures to stabilise the market and stabilise confidence” proposed by theNational Standing Committee, combined with the company’s development strategy, operating conditions and financial conditions, inorder to safeguard the interests of all shareholders of the company, To enhance investor confidence and promote the long-termhealthy and sustainable development of the company, the company has formulated a “quality return double improvement” action plan.For details, see the Announcement on Promoting the “Double Improvement of Quality Return” action Plan disclosed by the companyon March 7, 2024 (Announcement Number: 2024-001).In accordance with the provisions on profit distribution policy in the Company Law and Articles of Association, combined with thecompany's actual situation and development needs, in order to fully repay shareholders, the company's profit distribution plan for2024 is: based on the total share capital of 528,600,000 shares, a cash dividend of RMB 2,643,000,000.00 will be distributed to allshareholders for every 10 shares (including tax). Combined with the mid-term dividend plan for 2024, the total dividend amount ofthe company in 2024 accounts for 57.49% of the net profit attributable to shareholders of listed companies in this year's consolidatedstatements, and no bonus shares will be paid, and no share capital will be converted from reserve funds. This year, the company'scash dividend ratio increased year-on-year, fully sharing the company's development achievements with investors.
~ 42 ~
Part IV Corporate GovernanceI General Information of Corporate Governance
The Company has enabled the General Meeting, the Board of Directors, the Board of Supervisors and the management to form astandardised and scientific decision-making mechanism of operation to sufficiently protect the rights and interests of investors, andsmall and medium investors in particular, and to intensify the standardised operation of the Company, in strict accordance withrelevant laws and regulations such as the Company Law, the Securities Law, the Code of Corporate Governance for ListedCompanies, the Rules for Stock Listing of Shenzhen Stock Exchange, and Self-Regulatory Guidelines No. 1 for Companies Listed onShenzhen Stock Exchange - Standard Operation of Listed Companies on the Main Board. During the Reporting Period, theCompany’s actual situation of corporate governance met the relevant requirements of the normative documents on the governance oflisted companies issued by the China Securities Regulatory Commission. In strict accordance with the relevant laws and regulations,and the Company’s requirements on internal rules, regulations, and management system, each of the directors, supervisors and seniormanagers of the Company executed his or her rights and obligations, to ensure transparent disclosure of the Company’s information,its operation according to law, and honesty and trustworthiness.
1. Shareholders and General Meeting of Shareholders
The Company regulates the convening, holding, and voting procedures of the general meeting of shareholders in strict accordancewith the provisions and requirements of the Company Law, the Articles of Association, and the Rules of Procedure of the GeneralMeeting. During the Reporting Period, the convening and holding procedures of general meetings of shareholders, the qualificationsof attendants to the meetings and the voting procedures of the meetings all met the provisions of the Company Law, Rules ofProcedure of the General Meeting, and other laws and regulations. The Company equally treated all of its shareholders, and smalland medium shareholders in particular, to ensure full execution of rights of all shareholders.
2. The Company and Controlling Shareholders
The Company’s controlling shareholders are able to strictly regulate their own behaviours, without any violation of provisions ofrelevant laws, regulations, and the Company’s Articles of Association. They have not directly or indirectly interfered with theCompany’s decision-making, and production and operation activities, nor have they occupied the Company’s funds; the Companyhas not provided its controlling shareholders with any form of guarantee.
3. Directors and Board of Directors
The Company’s Board of Directors consists of nine directors, three of whom are independent directors. The number of directors andthe personnel composition of the Board of Directors comply with the requirements of laws, regulations, and the Articles ofAssociation. All directors act in accordance with the Articles of Association, Rules of Procedure of the Board of Directors, and theWork Policy for Independent Directors, etc., attend the meetings of the Board of Directors and general meetings of shareholders,diligently and faithfully perform their duties and obligations. Meanwhile, they actively participate in relevant training, and getfamiliar with relevant laws and legislations. Under the Board of Directors, there are four special committees, i.e., the AuditCommittee, the Nomination Committee, the Remuneration and Appraisal Committee, and the Strategy Committee, which performtheir normal duties, to provide scientific and professional comments and references for decision-making of the Board of Directors.
4. Supervisors and Board of Supervisors
There are five supervisors in the Company’s Board of Supervisors, including two employee supervisors. The number andcomposition of the Board of Supervisors are in compliance with the requirements of laws and regulations. All supervisors are able toconscientiously perform their duties in accordance with the requirements of the Rules of Procedure of the Board of Supervisors,earnestly perform their duties, and supervise the major events, related-party transactions, financial status, law-and-regulationcompliance of performance of duties of directors and senior managers of the Company.
5. The Mechanism of Performance Appraisal, and Incentive and Constraint
~ 43 ~
The procedures for appointment and removal of directors, supervisors, and senior managers of the Company shall be open andtransparent, and in line with the relevant provisions of laws, regulations, and the Articles of Association; the Company’s remunerationappraisal scheme shall specifically stipulate the evaluation to the Company’s management team. The Company shall constantlyimprove the performance evaluation standard and incentive and constraint mechanism of directors, supervisors, and senior managers.
6. Fulfilment of Social Responsibilities, and Stakeholders
The Company is able to fully respect and protect the legitimate rights and interests of relevant stakeholders, achieve a balance ofinterests between the society, shareholders, the Company, suppliers, customers, employees, and other relevant parties, to promote thesustainable, stable, and healthy development of the Company.
7. Information Disclosure and Transparency
The Company faithfully performs the obligation of information disclosure in strict accordance with the Articles of Association of theCompany, Rules for Stock Listing of Shenzhen Stock Exchange, Self-Regulatory Guidelines No. 1 for Companies Listed on ShenzhenStock Exchange - Standard Operation of Listed Companies on the Main Board, Self-regulatory Guidelines No. 5 for CompaniesListed on Shenzhen Stock Exchange - Management of Information Disclosure Affairs, and the relevant laws and regulations of ChinaSecurities Regulatory Commission and Shenzhen Stock Exchange. The Company designates China Securities Journal, ShanghaiSecurities News, Ta Kung Pao, and Cninfo (http://www.cninfo.com.cn) as its information disclosure media and website, to guaranteeinvestors’ right to know, and to ensure that all shareholders of the Company have a fair opportunity to obtain information of theCompany. Meanwhile, the Company has established diversified communication channels for investors, including special telephoneline, exclusive mailbox, and interactive platform for investors, and many other forms, to fully guarantee the right of a large numberof investors to know.
8. The Formulation and Implementation of the Registration and Management System on Inside Information and InsidersIn accordance with the requirements of regulatory authorities, the Company and all of its controlling shareholders have formulatedthe system for registration and record on inside information and insiders, regulated the acts of managing inside information of theCompany and its controlling shareholder, strengthened the classification of inside information, and safeguarded the principle offairness for information disclosure. During the Reporting Period, in strict accordance with the Management System on InsideInformation and Insiders, the Company has made well classification of inside information, and registration and record on insiders.Indicate by tick mark whether there is any material in-compliance with laws, administrative regulations and the regulatory documentsissued by the CSRC governing the governance of listed companies.
□Yes ?No
No such cases in the Reporting Period.
II The Company’s Independence from Its Controlling Shareholder and Actual Controller inBusiness, Personnel, Asset, Organisation and Financial AffairsThe Company and the controlling shareholder, Anhui Gujing Group Co., Ltd., realised five independences in terms of business,personnel, assets, organisations and financial affairs, with separate independent calculation, independent and complete business,independent operation ability, and independent responsibilities and risks. The controlling shareholder cannot surpass the GeneralMeeting of Shareholders to directly or indirectly interfere with the Company’s decisions and legal production as well as operationactivities, and there is no same trade competition state of the same products between the Company and the controlling shareholder.
1. Independence of Business
The Company is mainly engaged in the production and sale of baijiu, and the Company’s business is mutually independent of itscontrolling shareholder Gujing Group and other enterprises controlled by the Group. The issuer owns independent research anddevelopment system, purchasing system, production system, and sale system, forming a complete business chain, all of which do notrely on its shareholders and their subordinate enterprises. Therefore, the issuer’s business is independent of its controllingshareholders.
~ 44 ~
2. Independence of Personnel
The Company has independent management systems of labour, personnel, salary, etc., and independent staff teams, in which thesalary payment and welfare expenditure of the Company are strictly independent of those of its shareholders and related parties. Thedirectors, supervisors and senior managers of the Company are all selected in strict accordance with the relevant provisions of theCompany Law and the Company’s Articles of Association. All senior managers do not take other positions than directors orsupervisors in the controlling shareholders or actual controllers of the Company or other entities controlled by them, nor do theyreceive salary from the controlling shareholders or actual controllers of the Company or other entities controlled by them. None ofthe financial staff members of the Company takes part-time positions in the controlling shareholders or actual controllers of theCompany or other entities controlled by them.
3. Independence of Assets
The Company has its production system, auxiliary production system, and supporting facilities related to its production and operation;and legally has the ownership or use rights of the land, plants, machines, trademarks, and patents in relation to its production andoperation. Therefore, there is not any damage to the Company’s interests in such a way that the assets and funds of the Company areoccupied by the Company’s controlling shareholders and their related parties.
4. Independence of Organisation
The Company has established a sound and integral governance structure of General Meeting of Shareholders, the Board of Directors,and the Board of Supervisors, and formulated the corresponding internal control management system. The Company independentlyexercises the duties and rights of operation and management, in which the Company’s units of production, operation, and office arecompletely separated from the shareholding entities. Therefore, the Company does not make mixed operation and has mixed officewith its shareholding entities; the Company’s shareholding entities and their related entities or persons do not interfere with theCompany’s structural setup; there is not any subordinate relationship between the Company and its controlling shareholders, orbetween their functional departments.
5. Independence of Finance
The Company has set up an independent finance department with full-time personnel; and established an independent accountingsystem and financial management system, independently making financial decisions, and implementing a strict internal audit system.An independent bank account has been opened for the Company, without sharing the account with the Company’s shareholdingentities or any other entity or person. The Company, as an independent taxpayer, declares taxes and fulfils tax payment obligationsindependently according to law, and does not pay taxes together with its shareholding entities.III Horizontal Competition
□ Applicable ? Not applicable
IV Annual and Extraordinary General Meetings Convened during the Reporting Period
1. General Meeting Convened during the Reporting Period
| Meeting | Type | Investor participation ratio | Date of the meeting | Disclosure date | Meeting resolutions |
| The 2023 Annual General Meeting | Annual General Meeting | 59.58% | 29 May 2024 | 30 May 2024 | Announcement on Resolutions of the 2023 Annual General Meeting disclosed on |
~ 45 ~
www.cninfo.com.cn
2. Extraordinary General Meetings Convened at the Request of Preferred Shareholders with ResumedVoting Rights
□ Applicable ? Not applicable
V Directors, Supervisors and Senior Management
1. Basic Information
| Name | Gender | Age | Office title | Incumbent/Former | Start of tenure | End of tenure | Beginning shareholding (share) | Increase in the Reporting Period (share) | Decrease in the Reporting Period (share) | Other increase/decrease (share) | Ending shareholding (share) | Reasons for changes in shareholding |
| Liang Jinhui | Male | 59 | Chairman of the Board | Incumbent | 23 April 2014 | 29 June 2026 | ||||||
| Li Peihui | Male | 52 | Director | Incumbent | 23 August 2016 | 29 June 2026 | ||||||
| Zhou Qingwu | Male | 51 | Director, GM | Incumbent | 23 April 2014 | 29 June 2026 | ||||||
| Yan Lijun | Male | 52 | Director, Executive Deputy GM | Incumbent | 5 August 2016 | 29 June 2026 | ||||||
| Xu Peng | Male | 55 | Director, Deputy GM | Incumbent | 23 August 2016 | 29 June 2026 | ||||||
| Ye Changqing | Male | 51 | Director | Incumbent | 15 December 2011 | 29 June 2026 | ||||||
| Wang Ruihua | Male | 63 | Independent director | Incumbent | 27 September 2019 | 15 January 2025 | ||||||
| Xu Zhihao | Male | 49 | Independent director | Incumbent | 19 June 2020 | 29 June 2026 | ||||||
| Li Jing | Female | 57 | Independent director | Incumbent | 29 June 2023 | 29 June 2026 | ||||||
| Yang Xiaofan | Male | 58 | Chairman of Board of Supervisors | Incumbent | 23 August 2016 | 29 June 2026 |
~ 46 ~
| Song Zifa | Male | 44 | Supervisor | Incumbent | 29 June 2023 | 29 June 2026 | ||||||
| Mu hua | Male | 57 | Supervisor | Incumbent | 19 December 2023 | 29 June 2026 | ||||||
| Cui Yujun | Male | 57 | Employee supervisor | Incumbent | 20 March 2022 | 29 June 2026 | ||||||
| Liu Yongxia | Female | 49 | Employee supervisor | Incumbent | 29 June 2023 | 29 June 2026 | ||||||
| Zhang Lihong | Male | 57 | Deputy GM | Incumbent | 5 August 2016 | 29 June 2026 | ||||||
| Gao Jiakun | Male | 55 | Deputy GM | Incumbent | 28 August 2020 | 29 June 2026 | ||||||
| Li Anjun | Male | 55 | Deputy GM, chief engineer | Incumbent | 28 August 2020 | 29 June 2026 | ||||||
| Zhu Xianghong | Male | 51 | Deputy GM | Incumbent | 28 August 2020 | 29 June 2026 | ||||||
| Kang Lei | Male | 47 | Deputy GM | Incumbent | 23 September 2022 | 29 June 2026 | ||||||
| Zhu Jiafeng | Male | 48 | Deputy GM | Incumbent | 23 September 2022 | 29 June 2026 | ||||||
| Total | -- | -- | -- | -- | -- | -- | -- |
Indicate by tick mark whether any directors or supervisors left or any senior management were disengaged during the ReportingPeriod
□Yes ?No
Change of Directors, Supervisors and Senior Management
□ Applicable ? Not applicable
2. Biographical Information
Professional backgrounds, major work experience and current duties in the Company of the incumbent directors, supervisors andsenior management:
1. Mr. Liang Jinhui, male, born in 1966, member of CPC, is Political Engineer, a deputy to the 13
th
National People’s Congress, adeputy to the 14
thNational People’s Congress and Chinese Brewmaster with MBA degree, incumbent Secretary of CPC and presidentof the Company and president and Secretary of CPC of Gujing Group. He ever took the post of MD, GM, Deputy GM, GM ofBozhou Gujing Sales Co., Ltd., Supervisor of Third Board of Supervisors, Director of the 4
th, 5th
and 6thBoard of Directors andChairman of the 7
th, 8
th
and 9
thBoard of Directors of the Company.
2. Mr. Li Peihui, male, born in 1973, member of CPC, is a holder of master degree. He is a senior accountant, CPA (non-practicing)
~ 47 ~
and member of national leading accounting talents. At present, he acts as the director of the Company and Vice Secretary of CPC andpresident of Gujing Group. He had ever served as deputy GM and GM of Financial Department, deputy chief accountant, chiefaccountant, Secretary of Board of Directors and Director of the Company; Chairman of the Board of Anhui Ruijing Business TravelGroup Co. and Anhui Huixin Financial Investment Group; executive vice president and CFO of Gujing Group; and director of the 7
th
,
th and 9thBoard of Directors.
3. Mr. Zhou Qingwu, male, born in 1974, member of CPC, is a senior engineer, and China Chief Baijiu Taster with educationalexperience of graduate student. At present, he is Vice Secretary of CPC, Director and General Manager of the Company, ViceSecretary of CPC of Gujing Group. He had ever acted as Deputy GM and executive deputy GM of the Company and Director of the
th, 6th
, 7th
, 8th and 9
th
Board of Directors of the Company.
4. Mr. Yan Lijun, male, born in 1973, member of CPC, is a holder of master degree with Senior Taster. Now he is Vice Secretary ofCPC, Director, Executive Deputy GM of the Company, member of CPC Committee of Gujing Group, Chairman of the Board andGM of Bozhou Gujing Sales Co., Ltd. He once worked as a salesman of Sale Company, District Manager, Director of MarketResearch, Vice Manager of Planning Department, Director of Hefei Strategic Operations Centre, Vice GM and director of the 7
th, 8th
and 9thBoard of Directors of the Company.
5. Mr. Xu Peng, male, born in 1970, member of CPC, has educational experience of undergraduate college. He is the member of CPCCommittee, Director and Deputy GM of the Company, member of CPC Committee of Gujing Group. He had ever acted as DeputyDirector and Director of Finance Second Office of Finance Department of the Company, Manager of Finance Department of AnhuiLaobada Co., Ltd., Vice Manager and Manager of Finance Department of the Company, Deputy General Manager and ChiefSupervisor of Market Supervision Department of Bozhou Gujing Sales Co., Ltd., Chairman of the 7
thBoard of Supervisors andDirector of the 7
th, 8th and 9thBoard of Directors of the Company.
6. Mr. Ye Changqing, male, born in 1974, member of CPC, senior accountant, is a member of national leading accounting talentswith master degree and International Certified Internal Auditor. He is the incumbent Director of the Company and CFO of GujingGroup. He had ever acted as Chief Auditor of Audit Department, Vice Manager of Audit Department and Vice Supervisor andSupervisor of Auditing & Supervision Department of Gujing Group; and Supervisor of the 4
thBoard of Supervisors of the Company;Director and Secretary of the 5
th
, 6th, 7th, 8th
and 9thBoard of Directors, and Chief Accountant of the Company.
7. Wang Ruihua, male, born in 1962, member of CPC, is a non-practicing Chinese CPA with a doctor’s degree in managementgranted by Central University of Finance and Economics. Now he acts as the executive dean, a professor and doctoral advisor atCentral University of Finance and Economics, Guangdong-Hong Kong-Macao Greater Bay Area (Huangpu) Research Institute &member of China National MBA Education Supervisory Committee, member of Independent Director Committee of ChinaAssociation for Public Companies, the independent director in the Company, independent director in Bank of Beijing Co., Ltd.,independent director of JD Technology Holding Co., Ltd., independent director of China Post Securities Co., Ltd.
8. Xu Zhihao, male, born in 1976, is a senior economist who holds a doctor’s degree. He received the national May 1 Labour Medal.He is currently Independent Director of the Company, CEO of Geely Technology Group Co., Ltd., and Chairman of QJMOTOR(Stock Code: 000913.SZ).
9. Li Jing, female, born in 1968, holds a master’s degree and is a senior accountant. She is currently serving as an independentdirector at the Company, Kingsignal (300252) and Shunyu Water (301519). Her previous roles include Deputy Manager of theFinance Department, Director of the Audit Centre, Manager of Audit and Internal Control Department, and Director of theSettlement Centre at Beijing District Heating Group Co., Ltd.
10. Mr. Yang Xiaofan, male, born in 1967, member of CPC, is a holder of master degree. At present, he is Chairman of the Board ofSupervisors of the Company and Vice President and member of CPC Committee of Gujing Group. He once acted as Vice Presidentand General Manager of Anhui Gujing Real Estates Group Co., Ltd., Assistant to President of Gujing Group; Director of the 5
th, 6th
and 7
th
Board of Directors of the Company and Supervisor of the 7
th
, 8th and 9thBoard of Supervisors of the Company.
11. Song Zifa, male, born in 1981, is a member of the Communist Party of China and holds a university degree and a senior
~ 48 ~
accountant qualification. He currently occupies the position of Director of the Financial Management Centre at Gujing Group. Hispast appointments include Supervisor and Assistant Director of Audit and Supervision Centre of Gujing Group, Assistant Director ofthe Financial Management Centre of Gujing Group, and General Manager of Anhui Zhongxin Finance Leasing Co., Ltd.
12. Mu Hua, male, born in 1968, is a member of the Communist Party of China with an associate degree. He currently serves as theDeputy Director of the Party Committee Office and Secretary of Party Committee of the Functional Departments at Gujing Group.His previous roles include Deputy Manager and Assistant Director of the President’s Office and Deputy Director at Anhui GujingGroup Co., Ltd.
13. Mr. Cui Yujun, male, born in 1968, member of CPC, is a holder of bachelor degree. He is incumbent the employee supervisor ofthe Company and director of the Production Management Centre. He once worked as the workshop manager, manager, GM Assistant,Deputy Director of the Company’s Production Management Centre and Employee Supervisor of the 9
thBoard of Supervisors of theCompany.
14. Liu Yongxia, female, born in 1976, is educated to university level. She is currently the Vice Chair of the Company’s trade unionand the Vice Chair of the trade union at Gujing Group. She has previously held the positions of Deputy Manager of the ProductionManagement Centre’s Dispatch Centre, and Deputy Manager and Manager of the Production Dispatch Department in the Company’sLogistics Dispatch Centre.
15. Mr. Zhang Lihong, male, born in 1968, member of CPC, is an economist with bachelor degree. He is incumbent Vice Secretaryof CPC and Deputy GM of the Company and full-time deputy secretary of CPC Committee of Gujing Group. He once acted as clerk,Secretary of Operation Department and Market Development Department, Deputy GM, Director of General Office, Director ofService Centre of Bozhou Gujing Sales Co., Ltd., Director of HR Department and Administrative Service Centre and GM Assistantof the Company.
16. Mr. Gao Jiakun, male, born in 1970, member of CPC, is a holder of bachelor degree. He is incumbent member of the CPC andDeputy GM of the Company. He once served as GM of Production Management Department and Vice Director of ProductionManagement Centre of the Company, Chairman of the Board and GM of Bozhou Pairuite Packing Products Co., Ltd., Director ofFinished Products Filling Centre and Production Management Centre, and assistant to GM of the Company.
17. Li Anjun, male, born in 1970, is a member of CPC and professor-level senior engineer with a master’s degree. He is currently amember of the Party Committee, Deputy General Manager and Chief Engineer of the Company. He served as the Deputy Directorand Director of the Company’s Technical Quality Centre.
18. Mr. Zhu Xianghong, male, born in 1974, member of CPC, is a senior Wine Taster with bachelor degree. He is incumbent memberof the Party Committee and Deputy GM of the Company, Secretary of Party Committee and GM of Yellow Crane Tower Distillery.He once acted as GM of Product Department of Bozhou Gujing Sales Co., Ltd., GM of Hefei Office, regional GM of Northern AnhuiProvince, GM of Anhui Operating Centre, executive Deputy GM of Sales Company and assistant to GM of the Company.
19. Kang Lei, male, born in 1978, is a member of CPC and senior accountant with a college degree. He is currently a member of theParty Committee, Deputy GM, and Director of the Enterprise Management Centre of the Company. He served as Deputy Director ofthe Financial Management Centre of Bozhou Gujing Sales Company, Director and Assistant to General Manager of the Company’sAdministrative Service Centre, and Deputy Director of the President’s Executive Office of Gujing Group.
20. Zhu Jiafeng, male, born in 1977, is a member of CPC and senior accountant with a college degree. He is currently a member ofthe Party Committee, Deputy GM, Chief Accountant, Secretary of the Board and Director of the Financial Management Centre of theCompany. He served as the Manager, Deputy Director, assistant to General Manager and Deputy Chief Accountant of the FinancialManagement Centre of the Company.Offices held concurrently in shareholding entities:
? Applicable □ Not applicable
| Name | Shareholding entity | Office held in the | Start of tenure | End of tenure | Remuneration or allowance from the |
~ 49 ~
| shareholding entity | shareholding entity | ||||
| Liang Jinhui | Anhui Gujing Group Co., Ltd. | Chairman of the Board of Directors | 1 May 2014 | Yes | |
| Li Peihui | Anhui Gujing Group Co., Ltd. | President | 31 October 2017 | Yes | |
| Yang Xiaofan | Anhui Gujing Group Co., Ltd. | Vice President | 1 November 2009 | Yes | |
| Ye Changqing | Anhui Gujing Group Co., Ltd. | CFO | 13 August 2021 | Yes | |
| Song Zifa | Anhui Gujing Group Co., Ltd. | Head of Financial Management Centre | 24 January 2018 | Yes | |
| Mu Hua | Anhui Gujing Group Co., Ltd. | Deputy Director of the Party Committee Office | 19 August 2022 | Yes | |
| Liu Yongxia | Anhui Gujing Group Co., Ltd. | Vice Chairman of the Labour Union | June 2018 | Yes | |
| Notes | The above-mentioned personnel, though they take posts in shareholding entities, comply with the relevant employment requirements of Company Law, Securities Law and never disciplined by CSRC, other relevant departments and the Stock Exchange. | ||||
Offices held concurrently in other entities:
? Applicable □ Not applicable
| Name | Other entity | Office held in other entity | Start of tenure | End of tenure | Remuneration or allowance from other entity |
| Wang Ruihua | Central University of Finance and Economics | Professor | July 1983 | Yes | |
| China Medical Health Industry Co., Ltd. | Independent director | May 2023 | Yes | ||
| Bank of Beijing Co., Ltd. | Independent director | December 2019 | December 2025 | Yes | |
| JD Technology Holding Co., Ltd. | Independent director | June 2020 | Yes | ||
| China Post Securities Co., Ltd. | Independent director | February 2023 | Yes |
~ 50 ~
| Xu Zhihao | Geely Technology Group Co., Ltd. | Director and general manager | November 2023 | Yes | |
| Zhejiang Qjiang Motorcycle Co., Ltd. | Chairman of the Board | May 2024 | May 2027 | No | |
| Li Jing | Kingsignal Technology Co., Ltd. | Independent director | October 2024 | October 2027 | Yes |
| Anhui Shunyu Water Co., Ltd. | Independent Director | December 2023 | July 2025 | Yes | |
| Notes | Naught | ||||
Punishments imposed in the recent three years by the securities regulator on the incumbent directors, supervisors and seniormanagement as well as those who left in the Reporting Period:
□Applicable ? Not applicable
3. Remuneration of Directors, Supervisors and Senior Management
Decision-making procedure, determination basis and actual payments of remuneration for directors, supervisors and seniormanagement:
(1) Decision-making procedure of remuneration for Directors, Supervisors and Executive OfficersThe remuneration of independent directors is decided through the general meeting of shareholders, and the remuneration of thedirectors, supervisors, and senior managers assuming positions in the Company is defined in accordance with the relevant regulationsof the State-owned Assets Supervision and Administration Commission (the “SASAC”) of Bozhou Municipal People’s Government,and the relevant policies of the Company.
(2) Determination basis of remuneration for Directors, Supervisors and Executive Officers
Compensation for personnel will be determined in accordance with the Implementation Opinions on Deepening the Reform of theRemuneration System for Leaders of Provincial Enterprises issued by the CPC Anhui Provincial Committee and the AnhuiProvincial People’s Government (W.F. [2015] No. 28) and the Bozhou Municipal Enterprises Leaders’ Salary Management InterimMeasures (G.Z.G. [2017] No. 21), in conjunction with the Company’s annual operational status and performance evaluation results.
(3) Actual payment of remuneration for Directors, Supervisors and Executive Officers
Part of basic remuneration is paid on a monthly basis, and according to appraisal, performance-based remuneration is paid at the endof the year.Remuneration of directors, supervisors and senior management for the Reporting Period
Unit: RMB’0,000
| Name | Gender | Age | Office title | Incumbent/Former | Total before-tax remuneration from the Company | Any remuneration from related party |
| Liang Jinhui | Male | 59 | Chairman of the Board | Incumbent | Yes | |
| Li Peihui | Male | 52 | Director | Incumbent | Yes | |
| Zhou Qingwu | Male | 51 | Director, GM | Incumbent | 251.08 | No |
~ 51 ~
| Yan Lijun | Male | 52 | Director, Executive Deputy GM | Incumbent | 496.53 | No |
| Xu Peng | Male | 55 | Director, Deputy GM | Incumbent | 230.38 | No |
| Ye Changqing | Male | 51 | Director | Incumbent | Yes | |
| Wang Ruihua | Male | 63 | Independent director | Incumbent | 20.00 | No |
| Xu Zhihao | Male | 49 | Independent director | Incumbent | 20.00 | No |
| Li Jing | Female | 57 | Independent director | Incumbent | 20.00 | No |
| Yang Xiaofan | Male | 58 | Chairman of Board of Supervisors | Incumbent | Yes | |
| Song Zifa | Male | 44 | Supervisor | Incumbent | Yes | |
| Mu hua | Male | 57 | Supervisor | Incumbent | Yes | |
| Cui Yujun | Male | 57 | Employee supervisor | Incumbent | 148.00 | No |
| Liu Yongxia | Female | 49 | Employee supervisor | Incumbent | Yes | |
| Zhang Lihong | Male | 57 | Deputy GM | Incumbent | 234.26 | No |
| Gao Jiakun | Male | 55 | Deputy GM | Incumbent | 222.27 | No |
| Li Anjun | Male | 55 | Deputy GM, chief engineer | Incumbent | 221.52 | No |
| Zhu Xianghong | Male | 51 | Deputy GM | Incumbent | 431.24 | No |
| Kang Lei | Male | 47 | Deputy GM | Incumbent | 222.26 | No |
| Zhu Jiafeng | Male | 48 | Deputy GM | Incumbent | 221.69 | No |
| Total | -- | -- | -- | -- | 2,739.23 | -- |
Other notes:
□ Applicable ? Not applicable
VI Performance of Duty by Directors in the Reporting Period
1. Board Meeting Convened during the Reporting Period
| Meeting | Date of the meeting | Disclosure date | Meeting resolutions |
| 5th Meeting of the 10th Board | 26 April 2024 | 27 April 2024 | Announcement on Resolutions of the 5th Meeting of the 10th |
~ 52 ~
| of Directors | Board of Directors of Anhui Gujing Distillery Company Limited (No.: 2024-003) disclosed on the website of Cninfo (www.cninfo.com.cn). | ||
| 6th Meeting of the 10th Board of Directors | 30 August 2024 | 31 August 2024 | Announcement on Resolutions of the 6th Meeting of the 10th Board of Directors of Anhui Gujing Distillery Company Limited (No.: 2024-017) disclosed on the website of Cninfo (www.cninfo.com.cn). |
| 7th Meeting of the 10th Board of Directors | 30 October 2024 | Not applicable | Reviewed and approved the Company’s 2024 Third Quarter Report. |
| 8th Meeting of the 10th Board of Directors | 30 December 2024 | 31 December 2024 | Announcement on Resolutions of the 8th Meeting of the 10th Board of Directors of Anhui Gujing Distillery Company Limited (No.: 2024-022) disclosed on the website of Cninfo (www.cninfo.com.cn). |
2. Attendance of Directors at Board Meetings and General Meetings
| Attendance of directors at board meetings and general meetings | |||||||
| Director | Total number of board meetings the director was eligible to attend | Board meetings attended on site | Board meetings attended by way of telecommunication | Board meetings attended through a proxy | Board meetings the director failed to attend | The director failed to attend two consecutive board meetings (yes/no) | General meetings attended |
| Liang Jinhui | 4 | 1 | 3 | 0 | 0 | No | 1 |
| Li Peihui | 4 | 1 | 3 | 0 | 0 | No | 1 |
| Zhou Qingwu | 4 | 1 | 3 | 0 | 0 | No | 1 |
| Yan Lijun | 4 | 1 | 3 | 0 | 0 | No | 1 |
| Xu Peng | 4 | 1 | 3 | 0 | 0 | No | 1 |
| Ye Changqing | 4 | 1 | 3 | 0 | 0 | No | 1 |
| Wang Ruihua | 4 | 1 | 3 | 0 | 0 | No | 1 |
~ 53 ~
| Xu Zhihao | 4 | 1 | 3 | 0 | 0 | No | 1 |
| Li Jing | 4 | 1 | 3 | 0 | 0 | No | 1 |
3. Objections Raised by Directors on Matters of the Company
Indicate by tick mark whether any independent directors raised any objections on any matter of the Company.
□Yes ?No
No such cases in the Reporting Period.
4. Other Information about the Performance of Duty by Directors
Indicate by tick mark whether any suggestions from directors were adopted by the Company.?Yes □NoSuggestions from directors adopted or not adopted by the CompanyDuring the Reporting Period, the directors of the Company carried out their work diligently and conscientiously in strict accordancewith the Company Law, the Securities Law, the Code of Corporate Governance for Listed Companies, the Self-RegulatoryGuidelines No. 1 for Companies Listed on Shenzhen Stock Exchange - Standard Operation of Listed Companies on the Main Board,the Articles of Association, and Rules of Procedure of the Board of Directors. Based on the Company’s reality, they put forwardrelevant opinions on the Company’s major governance and operation decisions, and reached consensus through full communicationand discussion. They resolutely supervised and promoted the implementation of the resolutions of the Board of Directors to ensurescientific, timely, and efficient decision-making and safeguard the legitimate rights and interests of the Company and all of itsshareholders.
VII Performance of Duty by Special Committees under the Board in the Reporting Period
| Committee | Members | Number of meetings convened | Convened date | Content | Important opinions and suggestions raised | Other information about the performance of duty | Details about issues with objections (if any) |
| Audit Committee of the Board | Wang Ruihua, Xu Zhihao, Li Jing, Xu Peng, Ye Changqing | 1 | 5 February 2024 | Review of the Company’s 2023 annual audit report and communication letter with the governance team, 2023 internal audit work summary and 2024 work plan, review report on the use and placement of raised funds in the fourth quarter of 2023. | Upon full communication and discussion, all proposals were unanimously approved. | ||
| Audit Committee of | Wang Ruihua, Xu Zhihao, Li | 1 | 25 April 2024 | Review of the Company’s 2023 internal control | Upon full communication and |
~ 54 ~
| the Board | Jing, Li Peihui, Ye Changqing | self-assessment report, the 2023 annual report and summary, the first-quarter report for 2024 and its summary, the proposal to hire the 2024 audit agency, special report on the use and placement of raised funds in 2023, 2023 financial final report, and the proposal to revise the implementation rules of the Audit Committee. | discussion, all proposals were unanimously approved. | ||||
| Audit Committee of the Board | Wang Ruihua, Xu Zhihao, Li Jing, Li Peihui, Ye Changqing | 1 | 29 August 2024 | Review of the Company’s 2024 semi-annual report and summary, special report on the use and placement of raised funds in the first half of 2024. | Upon full communication and discussion, all proposals were unanimously approved. | ||
| Audit Committee of the Board | Wang Ruihua, Xu Zhihao, Li Jing, Li Peihui, Ye Changqing | 1 | 28 October 2024 | Review of the Company’s 2024 third-quarter report and the review report on the use and placement of raised funds in the third quarter of 2024. | Upon full communication and discussion, all proposals were unanimously approved. | ||
| Nomination Committee of the Board | Li Jing, Liang Jinhui, Wang Ruihua, Xu Zhihao, Zhou Qingwu | 1 | 25 April 2024 | Review of the proposal to adjust the members of the Audit Committee of the Board. | Upon full communication and discussion, all proposals were unanimously approved. | ||
| Nomination Committee of the Board | Li Jing, Liang Jinhui, Wang Ruihua, Xu Zhihao, Zhou Qingwu | 1 | 30 December 2024 | Review of the proposal to nominate Mr. Zhang Bin as an independent director candidate for the 10th Board of Directors. | Upon full communication and discussion, all proposals were unanimously approved. | ||
| Remuneration and Appraisal Committee of the Board | Xu Zhihao, Wang Ruihua, Li Jing, Zhou Qingwu, Yan Lijun | 1 | 25 April 2024 | Review of the proposal regarding the 2023 compensation and performance assessment of the board members and | Upon full communication and discussion, all proposals were unanimously |
~ 55 ~
| senior executives. | approved. | ||||||
| Strategy Committee of the Board | Liang Jinhui, Wang Ruihua, Xu Zhihao, Li Jing, Li Peihui | 1 | 26 April 2024 | Review of the proposal to use idle self-owned funds for entrusted financial management, the 2024 annual financial budget report, the 2023 annual financial final report, and the proposal to rename the Strategy Committee and revise its procedural rules. | Upon full communication and discussion, all proposals were unanimously approved. |
VIII Performance of Duty by the Board of SupervisorsIndicate by tick mark whether the Board of Supervisors found any risk to the Company during its supervision in the ReportingPeriod.
□Yes ?No
The Board of Supervisors raised no objections in the Reporting Period.IX Employees
1. Number, Functions and Educational Backgrounds of Employees
| Number of in-service employees of the Company as the parent at the period-end | 6,676 |
| Number of in-service employees of major subsidiaries at the period-end | 6,777 |
| Total number of in-service employees | 13,453 |
| Total number of paid employees in the Reporting Period | 13,453 |
| Number of retirees to whom the Company as the parent or its major subsidiaries need to pay retirement pensions | 1,849 |
| Functions | |
| Function | Employees |
| Production | 6,635 |
| Sales | 3,975 |
| Technical | 623 |
| Financial | 200 |
| Administrative | 1,072 |
| Other | 948 |
| Total | 13,453 |
~ 56 ~
| Educational backgrounds | |
| Educational background | Employees |
| Master or above | 228 |
| Bachelor | 4,435 |
| Junior college | 3,397 |
| High school or below | 5,393 |
| Total | 13,453 |
2. Employee Remuneration Policy
The remuneration policy was conducted strictly in line with the related law and regulations of the state, and the plan of operationperformance and profits of the Company and the relevant remuneration management policy.
3. Employee Training Plans
Employee training is significant in the human resource management. The Company always pay high attention to the employeetraining and development, and the Company sets up effective training plan combining with the current situation of the Company,annual plan, nature of the post and the demand of employee learning, which includes new employee induction training, on-jobtraining, front-line employee operating skills training, management improvement training and part-time study. The Company workedto continuously improve the whole quality of the employees, and realise a win-win situation and progress between the Company andthe employees.
4. Labour Outsourcing
? Applicable □ Not applicable
| Total man-hours (hour) | 5,099,135.34 |
| Total remuneration paid (RMB) | 140,459,531.63 |
X Profit Distributions (in the Form of Cash and/or Stock)How the profit distribution policy, especially the cash dividend policy, was formulated, executed or revised in the Reporting Period:
? Applicable □ Not applicableThe 2023 Annual General Meeting held on 29 May 2024 reviewed and approved the Company’s Interest Distribution Scheme in2023 that based on the total shares of 528,600,000 of the Company on 31 December 2023, cash dividends was distributed atRMB45.00 per 10 shares (tax inclusive), and the total cash dividends distributed was RMB2,378,700,000.00 (tax inclusive), whichhas been carried out completely in June 2024.
| Special statement about the cash dividend policy | |
| In compliance with the Company’s Articles of Association and resolution of General Meeting | Yes |
| Specific and clear dividend standard and ratio | Yes |
~ 57 ~
| Complete decision-making procedure and mechanism | Yes |
| Independent directors faithfully performed their duties and played their due role | Yes |
| If the Company has not distributed cash dividends, it should disclose the specific reasons and the measures it plans to take in the next step to enhance investor returns | Not applicable |
| Non-controlling interests are able to fully express their opinion and desire and their legal rights and interests are fully protected | Yes |
| In case of adjusting or changing the cash dividend policy, the conditions and procedures involved are in compliance with applicable regulations and transparent | No adjustments or changes |
Indicate by tick mark whether the Company fails to put forward a cash dividend proposal for shareholders despite the facts that theCompany has made profits in the Reporting Period and the profits of the Company as the parent distributable to shareholders arepositive.
□Applicable ? Not applicable
Final dividend plan for the Reporting Period? Applicable □ Not applicable
| Bonus issue from profit for every 10 shares (share) | 0 |
| Dividend for every 10 shares (RMB) (tax inclusive) | 50.00 |
| Bonus issue from capital reserves for every 10 shares (share) | 0 |
| Total shares as the basis for the final dividend plan (share) | 528,600,000 |
| Total cash dividends (RMB) (tax inclusive) | 2,643,000,000.00 |
| Cash dividends in other ways (such as share repurchase) (RMB) | 0.00 |
| Total cash bonus (including other methods) (RMB) | 2,643,000,000.00 |
| Distributable profits (RMB) | 14,654,488,838.59 |
| Percentage of cash dividends (including other methods) to the total distributed profits | 100.00% |
| Particulars about the cash dividends | |
| If the Company is in a mature development stage and has plans for any significant expenditure, in profit allocation, the ratio of cash dividends in the profit allocation shall be 40% or above. | |
| Details of final dividend plan for the Reporting Period | |
| The Company intends to distribute RMB50.00 (tax included) per 10 shares based on the total shares of 528,600,000 at the end of the year, totalling RMB2,643,000,000.00. In this year, there is no bonus issue from either profit or capital reserves. | |
~ 58 ~
XI Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measures forEmployees
□Applicable ? Not applicable
No such cases in the Reporting Period.
XII Establishment and Execution of the Internal Control System for the Reporting Period
1. Establishment and Execution of the Internal Control System
In accordance with the provisions of the Basic Code for Internal Control of Enterprises and its supporting guidelines, the Companyhas set up a complete procedure system for internal control system, in which the assessment incorporates the entities, business,matters, and high risk fields, covering all major aspects of the Company’s operation and management, without material omissions.The Company’s internal control is designed soundly and reasonably, and basically implemented effectively, without materialomissions. Through the operation, analysis, and assessment of the internal control system, the Company has effectively preventedrisks in operation and management, and promoted the realisation of internal control objectives.
2. Material Internal Control Weaknesses Identified for the Reporting Period
□Yes ? No
XIII Management and Control over Subsidiaries by the Company for the Reporting Period
During the Reporting Period, in accordance with the relevant requirements for standard operation of listed companies, and therelevant internal control system of the Company, and by dispatching directors and supervisors to subsidiary companies to participatein the daily operation of their board of directors and board of supervisors, the Company realised the effective management andsupervision on such matters as overseas investment, related-party transactions, development planning, compliant operation, andhuman resources of subsidiary companies, specified the reporting system and deliberation procedure of major events, and in a timelymanner, followed up such major events as financial status, business operation, and investment operation of subsidiary companies.XIV Internal Control Self-Evaluation Report or Independent Auditor’s Report on InternalControl
1. Internal Control Self-Evaluation Report
| Disclosure date of the internal control self-evaluation report | 28 April 2025 |
| Index to the disclosed internal control self-evaluation report | See www.cninfo.com.cn for the Self-assessment Report of Internal Control of Anhui Gujing Distillery Company Limited. |
| Evaluated entities’ combined assets as % of consolidated total assets | 98.51% |
| Evaluated entities’ combined operating revenue as % of consolidated operating revenue | 99.64% |
~ 59 ~
| Identification standards for internal control weaknesses | ||
| Type | Weaknesses in internal control over financial reporting | Weaknesses in internal control not related to financial reporting |
| Nature standard | Critical defect: Separate defect or other defects that result in failure in preventing, finding out and correcting major wrong reporting in financial report in time. The following circumstances are deemed as critical defects: (1) Ineffective in controlling the environment; (2) Malpractise of directors, supervisors and senior management officers; (3) According to external auditing, there’s major wrong reporting in current financial report, which fails to be found by the Company in its operating process; (4) Critical defects found and reported to the top management fail to be corrected within a reasonable period of time; (5) The supervision of the Audit Committee of the Company and its internal audit department for internal control is ineffective; (6) Other defects that may affect correct judgment of users of statements. Major defect: Separate defect or other defects that result in failure in preventing, finding out and correcting wrong reporting in financial report in time, which shall be noted by the top management despite of not attaining or exceeding critical level. Minor defect: Other internal control defects not constituting critical or major defects. | Any of the following circumstances shall be deemed as a critical defect, and other circumstances shall be deemed as major or minor defects according to their degree of impact. (1) Violate national laws, regulations or standardised documents; (2) Major decision making procedure is not scientific; (3) Lack of systems results in systematic failure; (4) Critical or major defects fail to be rectified; (5) Other circumstances that have major impact on the Company. |
| Quantitative standard | Critical defect: (1) Wrong reporting ≥0.5% of total operating revenue; (2) Wrong reporting ≥5% of total profit; (3) Wrong reporting ≥0.5% of total assets; (4) Wrong reporting ≥0.5% of total owner’s equity. Major defect: (1) Wrong reporting ≥0.2% but <0.5% of total operating revenue; (2) Wrong reporting ≥2% but <5% of total profit; | Critical defect: The defect with direct property loss amounting to over RMB10 million, has great negative impact on the Company and is disclosed in public in the form of announcement. Major defect: The defect with direct property loss amounting to RMB1 million to RMB10 million (included), or is penalised by governmental authority of the country but has not resulted in negative impact on the Company. Minor defect: The defect with direct property loss no more than RMB1 million |
~ 60 ~
| (3) Wrong reporting ≥0.2% but <0.5% of total assets; (4) Wrong reporting ≥0.2% but <0.5% of total owner’s equity. Minor defect: (1) Wrong reporting <0.2% of total operating revenue; (2) Wrong reporting <2% of total profit; (3) Wrong reporting <0.2% of total assets; (4) Wrong reporting <0.2% of total owner’s equity. | (included), or is penalised by governmental authority of the provincial-level or below but has not resulted in negative impact on the Company. | |
| Number of material weaknesses in internal control over financial reporting | 0 | |
| Number of material weaknesses in internal control not related to financial reporting | 0 | |
| Number of serious weaknesses in internal control over financial reporting | 0 | |
| Number of serious weaknesses in internal control not related to financial reporting | 0 | |
2. Independent Auditor’s Report on Internal Control
? Applicable □ Not applicable
| Opinion paragraph in the independent auditor’s report on internal control | |
| We believe that the Company has maintained effective internal control on financial report in all significant respects according to the Basic Code for Internal Control of Enterprises and relevant regulations on 31 December 2024. | |
| Independent auditor’s report on internal control disclosed or not | Disclosed |
| Disclosure date | 28 April 2025 |
| Index to such report disclosed | See www.cninfo.com.cn for Audit Report of Internal Control |
| Type of the auditor’s opinion | Unmodified unqualified opinion |
| Material weaknesses in internal control not related to financial reporting | None |
Indicate by tick mark whether any modified opinion is expressed in the independent auditor’s report on the Company’s internalcontrol.
□Yes ? No
Indicate by tick mark whether the independent auditor’s report on the Company’s internal control is consistent with the internalcontrol self-evaluation report issued by the Company’s Board.? Yes □No
~ 61 ~
XV Rectifications of Problems Identified by Self-inspection in the Special Action for ListedCompany GovernanceThe Company strictly follows the requirements of the Company Law, Securities Law, the Code of Corporate Governance for ListedCompanies, and the relevant laws and regulations of the CSRC and the Shenzhen Stock Exchange. The Company has established andimproved a relatively complete and reasonable corporate governance structure and internal control system. In the future, theCompany will continue to comply with the relevant regulatory requirements, combining these with the Company’s actual situation, tofurther enhance the level of standardised operations and the effectiveness of corporate governance, promoting the Company’scontinuous, healthy, and steady development.
~ 62 ~
Part V Environmental and Social ResponsibilityI Major Environmental IssuesIndicate by tick mark whether the Company or any of its subsidiaries is a heavily polluting business identified by the environmentalprotection authorities of China.? Yes □NoPolicies and industry standards pertaining to environmental protectionThe Company carries out environmental protection work in strict accordance with the requirements of laws and regulations such asEnvironmental Protection Law of the People’s Republic of China, Air Pollution Prevention and Control Law of the People’s Republicof China, Water Pollution Prevention and Control Law of the People’s Republic of China, Solid Waste Pollution Prevention andControl Law of the People’s Republic of China and other laws and regulations, and strictly follows the Management Measures for theDisclosure of Enterprise Environmental Information According to Law and Measures for Self-monitoring and Information Disclosureof National Key Monitoring Enterprises (Trial). The Company discloses environmental information in a timely manner andconsciously accepts social supervision. The Company implements the Emission Standards of Air Pollutants for Boilers(GB13271-2014), Discharge Standard of Water Pollutants for Fermentation Alcohol and Distilled Spirits Industry (GB27631-2011)and Environmental Noise Emission Standards for Industrial Enterprises (GB12348-2008) and other relevant standards.Environmental protection administrative license
| No. | Administrative matter | Serial number | Application time | Expiry date |
| 1 | Sewage discharge permit for Gujing plant | 913400001519400083001V | 19 July 2022 | 18 July 2027 |
| 2 | Sewage discharge permit for Zhangji plant | 913400001519400083002V | 19 July 2022 | 18 July 2027 |
| 3 | Sewage discharge permit for headquarters plant | 913400001519400083003V | 19 July 2022 | 18 July 2027 |
| 4 | Sewage discharge permit for Intelligent Park plant | 913400001519400083004V | 17 October 2022 | 16 October 2027 |
| 5 | Sewage discharge permit for Longrui Glass | 91341600151946047T001U | 24 July 2023 | 23 July 2028 |
| 6 | Sewage discharge permit for Yellow Crane Tower Distillery (Wuhan) | 914201057483467497001R | 6 January 2023 | 5 January 2028 |
| 7 | Sewage discharge permit for Yellow Crane Tower Distillery (Xianning) | 91421200562735332N001V | 25 June 2023 | 24 June 2028 |
| 8 | Sewage discharge permit for Yellow Crane Tower Distillery (Suizhou) | 9142130077756290XJ001V | 29 December 2023 | 28 December 2028 |
| 9 | Sewage discharge permit for Anhui Mingguang Distillery | 91341182781098222U001T | 26 November 2022 | 25 November 2027 |
The regulations for industrial emissions and the detailed information about pollutant emissions associated with production andoperational activities.
| Name of polluter | Type of major | Name of major | Way of discharge | Number of | Distribution of discharge | Discharge concentration/intensity | Discharge standards | Total discharge | Approved total | Excessive discharge |
~ 63 ~
| pollutants | pollutants | discharge outlets | outlets | implemented | discharge | |||||
| Anhui Gujing Distillery Co., Ltd. | Water pollutant | COD | Direct discharge | 3 | Gujing plant | 12.77mg/L | ≦50mg/L | 5.28t | 52.958t/a | Naught |
| Zhangji plant | 28.35mg/L | ≦100mg/L | 3.47t | 26.504t/a | Naught | |||||
| Headquarters plant | 11.96mg/L | ≦100mg/L | 10.39t | 116.0596t/a | Naught | |||||
| Anhui Gujing Distillery Co., Ltd. | Water pollutant | NH3-N | Direct discharge | 3 | Gujing plant | 0.220mg/L | ≦5mg/L | 0.09t | 5.2958t/a | Naught |
| Zhangji plant | 0.212mg/L | ≦10mg/L | 0.03t | 2.6504t/a | Naught | |||||
| Headquarters plant | 0.237mg/L | ≦10mg/L | 0.21t | 11.606t/a | Naught | |||||
| Anhui Gujing Distillery Co., Ltd. | Air pollutant | Smoke | Organised | 2 | Gujing plant | 0.598mg/m? | ≦10mg/m3 | 0.17t | 4.301t/a | Naught |
| Headquarters plant | 0.819mg/m? | ≦10mg/m3 | 0.91t | 5.01t/a | Naught | |||||
| Anhui Gujing Distillery Co., Ltd. | Air pollutant | SO2 | Organised | 2 | Gujing plant | 8.85mg/m? | ≦35mg/m3 | 2.44t | 15.055t/a | Naught |
| Headquarters plant | 4.09mg/m? | ≦35mg/m3 | 4.52t | 17.536t/a | Naught | |||||
| Anhui Gujing Distillery Co., Ltd. | Air pollutant | Nitrogen oxide | Organised | 3 | Gujing plant | 20.10mg/m? | ≦50mg/m3 | 5.55t | 21.056t/a | Naught |
| Zhangji plant | 14.89mg/m? | ≦150mg/ m3 | 0.54t | 10.318t/a | Naught | |||||
| Headquarters plant | 21.42mg/m? | ≦50mg/m3 | 23.67t | 25.051t/a | Naught | |||||
| Anhui Longrui Glass Co., Ltd | Air pollutant | Smoke | Organised | 2 | 1# furnace | 2.24mg/m? | ≦10mg/m? | 0.44t | Naught | |
| 2# furnace | 2.15mg/m? | ≦10mg/m? | 0.72t | Naught | ||||||
| Anhui Longrui Glass Co., Ltd | Air pollutant | SO2 | Organised | 2 | 1# furnace | 18.30mg/m? | ≦50mg/m? | 3.11t | Naught | |
| 2# furnace | 12.35mg/m? | ≦50mg/m? | 5.26t | Naught | ||||||
| Anhui Longrui Glass Co., Ltd | Air pollutant | Nitrogen oxide | Organised | 2 | 1# furnace | 81.78mg/m? | ≦200mg/m? | 16.75t | Naught | |
| 2# furnace | 70.63mg/m? | ≦200mg/m? | 26.03t | Naught | ||||||
| Yellow Crane Tower | Water pollutant | COD | Indirect discharge | 1 | Wuhan plant | 25 mg/L | ≦400mg/L | 0.47t | 11.07t/a | Naught |
~ 64 ~
| Distillery (Wuhan) Co., Ltd. | ||||||||||
| Yellow Crane Tower Distillery (Wuhan) Co., Ltd. | Water pollutant | NH3-N | Indirect discharge | 1 | Wuhan plant | 0.7595mg/L | ≦30mg/L | 0.02t | 4.05t/a | Naught |
| Yellow Crane Tower Distillery (Wuhan) Co., Ltd. | Air pollutant | SO2 | Organised | 1 | Wuhan plant | ND | ≦50mg/ m3 | 0.09t | Naught | |
| Yellow Crane Tower Distillery (Wuhan) Co., Ltd. | Air pollutant | Nitrogen oxide | Organised | 1 | Wuhan plant | 54.38mg/ m3 | ≦150mg/ m3 | 0.30 t | Naught | |
| Yellow Crane Tower Distillery (Xianning) Co., Ltd. | Water pollutant | COD | Indirect discharge | 1 | Xianning plant | 13.502mg/L | ≦350 mg/L | 0.17t | 6t/a | Naught |
| Yellow Crane Tower Distillery (Xianning) Co., Ltd. | Water pollutant | Ammonia nitrogen | Indirect discharge | 1 | Xianning plant | 0.146mg/L | ≦30mg/L | 0.01t | 1t/a | Naught |
| Yellow Crane Tower Distillery (Xianning) Co., Ltd. | Air pollutant | SO2 | Organised | 1 | Xianning plant | ND | ≦50mg/m3 | 0.11t | Naught | |
| Yellow Crane Tower | Air pollutant | Nitrogen oxide | Organised | 1 | Xianning plant | 78mg/ m3 | ≦150mg/ m3 | 0.88t | Naught |
~ 65 ~
| Distillery (Xianning) Co., Ltd. | ||||||||||
| Yellow Crane Tower Distillery (Suizhou) Co., Ltd. | Water pollutant | COD | Indirect discharge | 1 | Suizhou plant | 14.12mg/L | ≦300mg/L | 1.26t | 17.83t/a | Naught |
| Yellow Crane Tower Distillery (Suizhou) Co., Ltd. | Water pollutant | NH3-N | Indirect discharge | 1 | Suizhou plant | 0.38mg/L | ≦25mg/L | 0.04t | 1.783t/a | Naught |
| Yellow Crane Tower Distillery (Suizhou) Co., Ltd. | Air pollutant | SO2 | Organised | 1 | Suizhou plant | 1.5mg/m? | ≦50mg/m? | 0.03t | 0.634t/a | Naught |
| Yellow Crane Tower Distillery (Suizhou) Co., Ltd. | Air pollutant | Nitrogen oxide | Organised | 1 | Suizhou plant | 14.9mg/m? | ≦200mg/m? | 0.91t | 2.966t/a | Naught |
| Anhui Mingguang Distillery Co., Ltd. | Air pollutant | Nitrogen oxide | Organised | 1 | 10t boiler furnace | 19.7mg/m? | ≦50mg/m? | 0.43t | 2.128t/a | Naught |
| Anhui Mingguang Distillery Co., Ltd. | Water pollutant | COD | Indirect discharge | 1 | Outlet outside the plant | 72.5mg/L | ≦400mg/L | 2.14t | 11.107t/a | Naught |
| Anhui Mingguang Distillery Co., Ltd. | Water pollutant | Ammonia nitrogen | Indirect discharge | 1 | Outlet outside the plant | 3.546mg/L | ≦30mg/L | 0.10t | 0.18t/a | Naught |
Treatment of pollutantsIn 2024, the Company and its subsidiaries maintained normal operations of their waste management facilities, effectively achievingstandard emissions for major pollutants. The Company was transparent with its environmental information and successfully fulfilled
~ 66 ~
its social responsibilities. Details are as follows:
1. Construction and operational status of the sewage treatment facilities of the listed company and its subsidiaries
(1) The sewage treatment station in the Gujing plant of the Company employed a sewage treatment process comprising “IC anaerobic+ A?/O aerobic + in-depth treatment” techniques. The facility was designed with a capacity to treat 5,000 tonnes per day. The sewagewas discharged after being treated up to standard. The sewage treatment facility operated normally, discharging a total of 413,437tonnes of treated sewage annually. The treated sewage met the direct discharge requirements set by the GB27631-2011 DischargeStandard of Water Pollutants for Fermentation Alcohol and Distilled Spirits Industry.
(2) The sewage treatment station in the Zhangji plant of the Company employed a sewage treatment process comprising “ICanaerobic + A?/O aerobic + in-depth treatment” techniques. The facility was designed with a capacity to treat 1,500 tonnes per day.The sewage was discharged after being treated up to standard. The sewage treatment facility operated normally, discharging a total of122,307 tonnes of treated sewage annually. The treated sewage met the direct discharge requirements set by the GB27631-2011Discharge Standard of Water Pollutants for Fermentation Alcohol and Distilled Spirits Industry.
(3) The sewage treatment station in the headquarters plant of the Company employed a sewage treatment process comprising “ICanaerobic + A?/O aerobic + in-depth treatment” techniques. The facility was designed with a capacity to treat 8,000 tonnes per day.The sewage was discharged after being treated up to standard. The sewage treatment facility operated normally, discharging a total of868,223 tonnes of treated sewage annually. The treated sewage met the direct discharge requirements set by the GB27631-2011Discharge Standard of Water Pollutants for Fermentation Alcohol and Distilled Spirits Industry.
(4) The production and living sewage of Longrui Glass was discharged indirectly and treated by the sewage treatment station ofZhangji plant under Anhui Gujing Distillery Company Limited, and it was discharged after being treated up to standard. The sewagetreatment facility operated normally,.
(5) The sewage treatment station of Yellow Crane Tower Distillery (Wuhan) Co., Ltd. employed a sewage treatment processcomprising “anaerobic + aerobic treatment” techniques. The facility was designed with a capacity to treat 250 tonnes per day. Thesewage was discharged after being treated up to standard. The sewage treatment facility operated normally, discharging a total of45,371 tonnes of treated sewage annually. The treated sewage met the requirements set by the GB27631-2011 Discharge Standard ofWater Pollutants for Fermentation Alcohol and Distilled Spirits Industry.
(6) The sewage treatment station of Yellow Crane Tower Distillery (Xianning) Co., Ltd. employed a sewage treatment processcomprising “UASB anaerobic + A2/O2” techniques. The facility was designed with a capacity to treat 100 tonnes per day. Thesewage was discharged after being treated up to standard. The sewage treatment facility operated normally, discharging a total of17,079 tonnes of treated sewage annually. The treated sewage met the requirements set by the GB27631-2011 Discharge Standard ofWater Pollutants for Fermentation Alcohol and Distilled Spirits Industry.
(7) The sewage treatment station of Yellow Crane Tower Distillery (Suizhou) Co., Ltd. employed a sewage treatment processcomprising “IC anaerobic + A2/O + in-depth treatment” techniques. The facility was designed with a capacity to treat 1,500 tonnesper day. The sewage was discharged after being treated up to standard. The sewage treatment facility operated normally, discharginga total of 86,749 tonnes of treated sewage annually. The sewage was discharged according to the requirements set by theGB27631-2011 Discharge Standard of Water Pollutants for Fermentation Alcohol and Distilled Spirits Industry.
(8) The sewage treatment station of Mingguang Distillery employed a sewage treatment process comprising “UASB anaerobic +facultative pond + contact oxidation pond” techniques. The facility was designed with a capacity to treat 500 tonnes per day. Thesewage was discharged after being treated up to standard. The sewage treatment facility operated normally, discharging a total of29,369 tonnes of sewage annually. The treated sewage met the indirect discharge requirements set by the GB27631-2011 DischargeStandard of Water Pollutants for Fermentation Alcohol and Distilled Spirits Industry.
2. Construction and operational status of the waste gas treatment facilities of the listed company and its subsidiaries
(1) The power station of Gujing plant of the Company operated two 35t/h coal-fired boilers. The flue gas treatment facilities,designed with a capacity of 100,000 Nm?/h, employed a combination of “baghouse dust removal, limestone-gypsum wetdesulphurisation, SNCR non-catalytic reduction, SCR catalytic reduction, and wet electrostatic precipitation” processes. It also
~ 67 ~
operated two 19t/h gas boilers, with flue gas treatment facilities designed to process 25,000 Nm?/h using “low NOx combustion”techniques. The waste gas treatment facilities operated normally and treated 276.05 million Nm? of flue gases annually, adhering toultra-low emission standards.
(2) The power station of Zhangji plant of the Company operated a 25t/h gas boiler, with flue gas treatment facilities designed tohandle 25,000 Nm?/h using “low NOx combustion” techniques. The waste gas treatment facilities operated normally and treated
35.92 million Nm? of flue gases annually, adhering to the requirements related to gas boilers in GB13271-2014 Emission Standardsof Air Pollutants for Boilers.
(3) The power station of headquarters plant of the Company operated three coal-fired boilers, with flue gas treatment facilitiesdesigned with a capacity of 200,000 Nm?/h using a combination of “baghouse dust removal, limestone-gypsum wet desulphurisation,SNCR non-catalytic reduction, SCR catalytic reduction, and wet electrostatic precipitation” processes. It also operated two 19t/h andfour 40t/h gas boilers, with flue gas treatment facilities designed to respectively process 30,000 Nm?/h and 55,000 Nm?/h using “lowNOx combustion” techniques. The waste gas treatment facilities operated normally and treated 1,104.93 million Nm? of flue gasesannually, adhering to ultra-low emission standards.
(4) Longrui Glass operated two glass kilns with flue gas treatment facilities capable of handling 100,000 Nm?/h. The processincluded “baghouse dust removal, dry desulphurisation, and SCR catalytic reduction.” The waste gas treatment facilities operatednormally and treated 675.81 million Nm? of flue gases annually, meeting the emission requirements for A-level enterprises in theglass industry under the Technical Guide for Emergency Emission Reduction Measures in Key Industries during Heavy PollutionWeather.
(5) Yellow Crane Tower Distillery (Wuhan) Co., Ltd. operated five 1t/h natural gas steam heat sources, with flue gas treatmentfacilities designed to manage 18,000 Nm?/h using “low NOx combustion” techniques. The waste gas treatment facilities operatednormally and treated 4.67 million Nm? of flue gases annually, ensuring compliance with the special emission limits for air pollutantsfrom gas boilers as specified in GB13271-2014 Emission Standards of Air Pollutants for Boilers.
(6) Yellow Crane Tower Distillery (Xianning) Co., Ltd. operated one 3t/h and one 4t/h gas boiler, with flue gas treatment facilitiesdesigned to process 13,000 Nm?/h using “low NOx combustion” techniques. The waste gas treatment facilities operated normally andtreated 21.82 million Nm? of flue gases annually, adhering to the requirements related to gas boilers in GB13271-2014 EmissionStandards of Air Pollutants for Boilers.
(7) Yellow Crane Tower Distillery (Suizhou) Co., Ltd. operated one 15t/h and one 25t/h natural gas boiler, with flue gas treatmentfacilities designed to process 35,000 Nm?/h using “low NOx combustion” techniques. The waste gas treatment facilities operatednormally and treated 40.65 million Nm? of flue gases annually, adhering to the requirements related to gas boilers in GB13271-2014Emission Standards of Air Pollutants for Boilers.
(8) Mingguang Distillery operated one 10t/h gas boiler, with flue gas treatment facilities designed to process 11,000 m?/h using “lowNOx combustion” techniques. The waste gas treatment facilities operated normally and treated 18.76 million Nm? of flue gasesannually, adhering to the requirements related to gas boilers in GB13271-2014 Emission Standards of Air Pollutants for Boilers.Emergency plan for sudden environment affairs
1. The Company has formulated the Emergency Plan of Anhui Gujing Distillery Company Limited for Sudden EnvironmentalPollution Accidents, which has been filed with Bureau of Ecology and Environment of Bozhou (File No. 341602-2024-028-H).Emergency plan drills have been carried out as required.
2. Longrui Glass has formulated the Emergency Plan of Anhui Longrui Glass Co., Ltd. for Sudden Environmental Issues, which hasbeen filed with Bureau of Ecology and Environment of Bozhou (File No. 341602-2023-027-M). Emergency plan drills have beencarried out as required.
3. Yellow Crane Tower Distillery (Wuhan) Co., Ltd. has formulated the Emergency Plan of Yellow Crane Tower Distillery Co., Ltd.for Sudden Environmental Issues, which has been filed with the Hanyang District branch of the Wuhan Municipal Ecology andEnvironment Bureau (File No. 420105-2024-005-L). Emergency plan drills have been carried out as required.
~ 68 ~
4. Yellow Crane Tower Distillery (Xianning) Co., Ltd. has formulated the Emergency Plan of Yellow Crane Tower Distillery(Xianning) Co., Ltd. for Sudden Environmental Issues, which has been filed with the Xianning High-tech District branch of theXianning Municipal Ecology and Environment Bureau (File No. 421201-2024-31-H). Emergency plan drills have been carried out asrequired.
5. Yellow Crane Tower Distillery (Suizhou) Co., Ltd. has formulated the Emergency Plan of Yellow Crane Tower Distillery Co., Ltd.for Sudden Environmental Issues, which has been filed with the High-tech Zone Branch of Suizhou Municipal Ecology andEnvironment Bureau (File No. 421303-2024-003-L). Emergency plan drills have been carried out as required.
6. Mingguang Distillery has formulated the Emergency Plan of Anhui Mingguang Distillery Co., Ltd. for Sudden EnvironmentalIssues, which has been filed with the Mingguang Municipal Ecology and Environment Sub-Bureau (File No. 341182-2024-047-M).Emergency plan drills have been carried out as required.Environmental self-monitoring schemeThe Company and its subsidiaries have formulated their Environmental Self-Monitoring Schemes and published them on the localwebsites for self-monitoring information disclosure.Input in environment governance and protection and payment of environmental protection taxIn 2024, the total investment in environmental governance and protection by the Company and its subsidiaries amounted toRMB46,143,700, with environmental taxes paid totalling RMB154,300.Measures taken to decrease carbon emission in the Reporting Period and corresponding effects? Applicable □ Not applicable
1. Promoted green energy transition: Actively advanced the construction of photovoltaic (PV) projects. In 2024, the use of greenelectricity was approximately 12 million kWh, reducing carbon dioxide emissions by around 6,900 tonnes.
2. Intensified power conservation of the Company:
(1) The Company conserved power in offices, sufficiently utilised natural light, and prohibited lamps from shining all the time,replaced lamps in passageways with sound-controlled types, and strictly implemented the requirements of temperature setting onair-conditioners.
(2) The Company conserved power used by street lamps, and strictly specified turn-off and turn-on time; through theabove-mentioned measures, power wasted in offices has been greatly reduced, which has played an active role in the energyconservation and carbon reduction of the Company.Administrative penalties imposed for environmental issues during the Reporting Period
| Name | Reason | Case | Result | Influence on production and operation | Rectification measures |
| Naught | N/A | N/A | N/A | N/A | N/A |
Other environment information that should be disclosedNaughtOther related environment protection informationNaughtII Social Responsibility
For details, please refer to the Corporate Environmental, Social and Governance (ESG) Report for 2024 disclosed by the Companyon the website Cninfo dated 28 April 2025.
~ 69 ~
III Consolidation and Expansion of Poverty Alleviation Outcomes, and Rural RevitalisationFor details, please refer to the Corporate Environmental, Social and Governance (ESG) Report for 2024 disclosed by the Companyon the website Cninfo dated 28 April 2025.
~ 70 ~
Part VI Significant EventsI Fulfilment of Commitments
1. Commitments of the Company’s Actual Controller, Shareholders, Related Parties and Acquirers, as wellas the Company Itself and other Entities Fulfilled in the Reporting Period or Ongoing at the Period-end
□Applicable ? Not applicable
2. Where There Had Been an Earnings Forecast for an Asset or Project and the Reporting Period Was Stillwithin the Forecast Period, Explain Why the Forecast Has Been Reached for the Reporting Period.
□Applicable ? Not applicable
II Occupation of the Company’s Capital by the Controlling Shareholder or any of Its RelatedParties for Non-Operating Purposes
□Applicable ? Not applicable
III Irregularities in the Provision of Guarantees
□Applicable ? Not applicable
IV Explanations Given by the Board of Directors Regarding the Latest “Modified Opinion”on the Financial Statements
□Applicable ? Not applicable
V Explanations Given by the Board of Directors, the Board of Supervisors and theIndependent Directors (if any) Regarding the Independent Auditor’s “Modified Opinion” onthe Financial Statements of the Reporting Period
□Applicable ? Not applicable
VI YoY Changes to Accounting Policies, Estimates or Correction of Material AccountingErrors?Applicable □ Not applicableFor details, please refer to "III. Significant Accounting Policies and Accounting Estimates" and "31. Changes in SignificantAccounting Policies and Accounting Estimates" in the Notes to the Financial Statements in this report.VII YoY Changes to the Scope of the Consolidated Financial Statements
? Applicable □ Not applicableIn this period, the Company has expanded the scope of its consolidation compared to the previous period with the addition of Anhui
~ 71 ~
Guge Cultural Media Co., Ltd., Anhui Gujing Suhuai Liquor Sales Co., Ltd., Ezhou Junya Trading Co., Ltd., and Wuhan JuntaiTrading Co., Ltd. The following subsidiaries have been deregistered: Wuhan Yashibo Technology Co., Ltd., Hubei Xinjia TestingTechnology Co., Ltd., Hubei Junlou Cultural Tourism Co., Ltd., Hubei Yellow Crane Tower Beverage Co., Ltd., Fengyang XiaogangVillage Ming Wine Distillery Co., Ltd., and Anhui Yangshengtianxia Brand Operation Co., Ltd.VIII Engagement and Disengagement of Independent AuditorCurrent independent auditor
| Name of the domestic independent auditor | RSM China CPA LLP |
| The Company’s payment to the domestic independent auditor (RMB10,000) | 200.00 |
| How many consecutive years the domestic independent auditor has provided audit service for the Company | 6 |
| Names of the certified public accountants from the domestic independent auditor writing signatures on the auditor’s report | Zhang Liping, Han Songliang |
| How many consecutive years the certified public accountants have provided audit service for the Company | 4 years for Zhang Liping and Han Songliang |
Indicate by tick mark whether the independent auditor was changed for the Reporting Period.
□Yes ? No
Independent auditor, financial advisor or sponsor engaged for the audit of internal controls:
? Applicable □ Not applicableIn 2024, the Company engaged RSM China CPA LLP as the internal control auditor.IX Possibility of Delisting after Disclosure of this Report
□Applicable ? Not applicable
X Insolvency and Reorganisation
□Applicable ? Not applicable
XI Major Legal and Arbitration Matters
□Applicable ? Not applicable
XII Punishments and Rectifications
□Applicable ? Not applicable
~ 72 ~
XIII Credit Quality of the Company as well as Its Controlling Shareholder and ActualController
□Applicable ? Not applicable
XIV Major Related-Party Transactions
1. Continuing Related-Party Transactions
□Applicable ? Not applicable
2. Related-Party Transactions Regarding Purchase or Sales of Assets or Equity Interests
□Applicable ? Not applicable
3. Related-Party Transactions Regarding Joint Investments in Third Parties
□Applicable ? Not applicable
4. Credits and Liabilities with Related Parties
□Applicable ? Not applicable
5. Transactions with Related Finance Companies
□Applicable ? Not applicable
6. Transactions with Related Parties by Finance Companies Controlled by the Company
□Applicable ? Not applicable
7. Other Major Related-Party Transactions
□Applicable ? Not applicable
XV Major Contracts and Execution Thereof
1. Entrustment, Contracting and Leases
(1) Entrustment
□Applicable ? Not applicable
~ 73 ~
(2) Contracting
□Applicable ? Not applicable
(3) Leases
□Applicable ? Not applicable
2. Major Guarantees
□Applicable ? Not applicable
3. Cash Entrusted for Wealth Management
(1) Cash Entrusted for Wealth Management
□ Applicable ? Not applicable
(2) Entrusted Loans
□Applicable ? Not applicable
4. Other Major Contracts
□Applicable ? Not applicable
XVI Other Significant Events
□Applicable ? Not applicable
XVII Significant Events of Subsidiaries
□Applicable ? Not applicable
~ 74 ~
Part VII Share Changes and Shareholder InformationI Share Changes
1. Share Changes
Unit: share
| Before | Increase/decrease in the Reporting Period (+/-) | After | |||||||
| Shares | Percentage (%) | New issues | Shares as dividend converted from profit | Shares as dividend converted from capital reserves | Other | Subtotal | Shares | Percentage (%) | |
| I. Restricted shares | |||||||||
| 1. Shares held by the state | |||||||||
| 2. Shares held by state-owned corporations | |||||||||
| 3. Shares held by other domestic investors | |||||||||
| Among which: Shares held by domestic corporations | |||||||||
| Shares held by domestic individuals | |||||||||
| 4. Shares held by foreign investors | |||||||||
| Among which: Shares held by foreign corporations | |||||||||
| Shares held by foreign individuals | |||||||||
| II. Non-restricted shares | 528,600,000 | 100.00% | 528,600,000 | 100.00% | |||||
| 1. RMB ordinary shares | 408,600,000 | 77.30% | 408,600,000 | 77.30% | |||||
| 2. Domestically listed foreign shares | 120,000,000 | 22.70% | 120,000,000 | 22.70% | |||||
~ 75 ~
| 3. Overseas listed foreign shares | |||||||||
| 4. Other | |||||||||
| III. Total shares | 528,600,000 | 100.00% | 528,600,000 | 100.00% |
Reasons for share changes:
□ Applicable ? Not applicable
Approval of share changes:
□ Applicable ? Not applicable
Transfer of share ownership:
□ Applicable ? Not applicable
Effects of share changes on the basic and diluted earnings per share, equity per share attributable to the Company’s ordinaryshareholders and other financial indicators of the prior year and the prior accounting period, respectively:
□ Applicable ? Not applicable
Other information that the Company considers necessary or is required by the securities regulator to be disclosed:
□ Applicable ? Not applicable
2. Changes in Restricted Shares
□ Applicable ? Not applicable
II Issuance and Listing of Securities
1. Securities (Exclusive of Preferred Shares) Issued in the Reporting Period
□ Applicable ? Not applicable
2. Changes to Total Shares, Shareholder Structure and Asset and Liability Structures
□ Applicable ? Not applicable
3. Existing Staff-Held Shares
□ Applicable ? Not applicable
III Shareholders and Actual Controller
1. Shareholders and Their Shareholdings at the Period-End
Unit: share
| Number of ordinary shareholders | 47,512 | Number of ordinary shareholders at | 40,861 | Number of preferred shareholders with | 0 | Number of preferred shareholders with | 0 |
~ 76 ~
| the month-end prior to the disclosure of this Report | resumed voting rights (if any) (see note 8) | resumed voting rights at the month-end prior to the disclosure of this Report (if any) (see note 8) | |||||||||||
| 5% or greater shareholders or top 10 shareholders | |||||||||||||
| Name of shareholder | Nature of shareholder | Shareholding percentage | Total shares held at the period-end | Increase/decrease in the Reporting Period | Restricted shares held | Non-restricted shares held | Shares in pledge, marked or frozen | ||||||
| Status | Shares | ||||||||||||
| ANHUI GUJING GROUP COMPANY LIMITED | State-owned legal person | 51.34% | 271,404,022 | 41,300 | 271,404,022 | In pledge | 30,000,000 | ||||||
| BANK OF CHINA-CHINA MERCHANTS CHINA SECURITIES BAIJIU INDEX CLASSIFICATION SECURITIES INVESTMENT FUND | Other | 2.41% | 12,731,441 | -83,014 | 12,731,441 | N/A | |||||||
| INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED- INVESCO GREAT WALL EMERGING GROWTH HYBRID SECURITIES INVESTMENT FUND | Other | 1.82% | 9,621,200 | -378,751 | 9,621,200 | N/A | |||||||
| CHINA | Foreign | 1.69% | 8,934,853 | 228,324 | 8,934,853 | N/A | |||||||
~ 77 ~
| INTERNATIONAL CAPITAL CORPORATION HONG KONG SECURITIES LTD | legal person | |||||||
| AGRICULTURAL BANK OF CHINA－E FUND CONSUMPTION SECTOR STOCK SECURITIES INVESTMENT FUND | Other | 1.51% | 7,978,008 | -498,800 | 7,978,008 | N/A | ||
| UBS (LUX) EQUITY FUND - CHINA OPPORTUNITY (USD) | Foreign legal person | 1.35% | 7,122,945 | 226,284 | 7,122,945 | N/A | ||
| HONG KONG SECURITIES CLEARING COMPANY LTD. | Foreign legal person | 1.20% | 6,347,671 | -688,701 | 6,347,671 | N/A | ||
| GREENWOODS CHINA ALPHA MASTER FUND | Foreign legal person | 1.14% | 6,049,760 | 6,049,760 | N/A | |||
| BANK OF CHINA- INVESCO GREAT WALL DINGYI HYBRID SECURITIES INVESTMENT FUND (LOF) | Other | 0.85% | 4,500,000 | -400,000 | 4,500,000 | N/A | ||
| 3W GLOBAL | Foreign | 0.77% | 4,051,528 | 4,051,528 | N/A |
~ 78 ~
| FUND | legal person | ||||
| Strategic investor or general legal person becoming a top-10 ordinary shareholder due to rights issue (if any) (see note 3) | N/A | ||||
| Related or acting-in-concert parties among the shareholders above | Among the shareholders above, the Company’s controlling shareholder—Anhui Gujing Group Company Limited—is not a related party of other shareholders; nor are they parties acting in concert as defined in the Administrative Measures on Information Disclosure of Changes in Shareholding of Listed Companies. As for the other shareholders, the Company does not know whether they are related parties or whether they belong to parties acting in concert as defined in the Administrative Measures on Information Disclosure of Changes in Shareholding of Listed Companies. | ||||
| Explain if any of the shareholders above was involved in entrusting/being entrusted with voting rights or waiving voting rights | N/A | ||||
| Special account for share repurchases (if any) among the top 10 shareholders (see note 10) | N/A | ||||
| Top 10 non-restricted shareholders | |||||
| Name of shareholder | Non-restricted shares held at the period-end | Shares by type | |||
| Type | Shares | ||||
| ANHUI GUJING GROUP COMPANY LIMITED | 271,404,022 | RMB-denominated ordinary share | 271,404,022 | ||
| BANK OF CHINA-CHINA MERCHANTS CHINA SECURITIES BAIJIU INDEX CLASSIFICATION SECURITIES INVESTMENT FUND | 12,731,441 | RMB-denominated ordinary share | 12,731,441 | ||
| INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED- INVESCO GREAT WALL EMERGING GROWTH HYBRID SECURITIES INVESTMENT FUND | 9,621,200 | RMB-denominated ordinary share | 9,621,200 | ||
| CHINA INTERNATIONAL CAPITAL CORPORATION HONG KONG SECURITIES LTD | 8,934,853 | Domestically listed foreign share | 8,934,853 | ||
~ 79 ~
| AGRICULTURAL BANK OF CHINA－E FUND CONSUMPTION SECTOR STOCK SECURITIES INVESTMENT FUND | 7,978,008 | RMB-denominated ordinary share | 7,978,008 |
| UBS (LUX) EQUITY FUND - CHINA OPPORTUNITY (USD) | 7,122,945 | Domestically listed foreign share | 7,122,945 |
| HONG KONG SECURITIES CLEARING COMPANY LTD. | 6,347,671 | RMB-denominated ordinary share | 6,347,671 |
| GREENWOODS CHINA ALPHA MASTER FUND | 6,049,760 | Domestically listed foreign share | 6,049,760 |
| BANK OF CHINA- INVESCO GREAT WALL DINGYI HYBRID SECURITIES INVESTMENT FUND (LOF) | 4,500,000 | RMB-denominated ordinary share | 4,500,000 |
| 3W GLOBAL FUND | 4,051,528 | Domestically listed foreign share | 4,051,528 |
| Related or acting-in-concert parties among top 10 unrestricted public shareholders, as well as between top 10 unrestricted public shareholders and top 10 shareholders | Among the shareholders above, the Company’s controlling shareholder—Anhui Gujing Group Company Limited—is not a related party of other shareholders; nor are they parties acting in concert as defined in the Administrative Measures on Information Disclosure of Changes in Shareholding of Listed Companies. As for the other shareholders, the Company does not know whether they are related parties or whether they belong to parties acting in concert as defined in the Administrative Measures on Information Disclosure of Changes in Shareholding of Listed Companies. | ||
| Top 10 ordinary shareholders involved in securities margin trading (if any) (see note 4) | N/A | ||
Shareholders holding more than 5% of shares, the top 10 shareholders and the top 10 shareholders with unrestricted sharesparticipating in the refinancing business to lend shares
□ Applicable ? Not applicable
The top 10 shareholders and the top 10 shareholders of unrestricted shares have changed from the previous period due tolending/returning of refinancing
□ Applicable ? Not applicable
Whether the top 10 ordinary shareholders and the top 10 unrestricted ordinary shareholders of the company made agreed repurchasetransactions during the reporting period
□ Yes ? No
The top 10 ordinary shareholders and the top 10 unrestricted ordinary shareholders of the company did not conduct agreedrepurchase transactions during the reporting period.
2. Controlling Shareholder
Nature of the controlling shareholder: controlled by a local state-owned legal personType of the controlling shareholder: legal person
| Name of controlling shareholder | Legal representative/person | Date of establishment | Unified social credit code | Principal activity |
~ 80 ~
| in charge | ||||
| ANHUI GUJING GROUP COMPANY LIMITED | Liang Jinhui | 16 January 1995 | 91341600151947437P | Commercial trade |
| Controlling shareholder’s holdings in other listed companies at home or abroad in the Reporting Period | As of 31 December 2024, the controlling shareholder ANHUI GUJING GROUP COMPANY LIMITED directly holds 130,000,000 shares of Huaan Securities Co., Ltd. owning the proportion of shares of 2.77%. | |||
Change of the controlling shareholder in the Reporting Period:
□Applicable ? Not applicable
No such cases in the Reporting Period.
3. Information about the Actual Controller and Acting-in-concert Parties
Nature of the actual controller: Local administrator for state-owned assetsType of the actual controller: legal person
| Name of actual controller | Legal representative/person in charge | Date of establishment | Unified social credit code | Principal activity |
| State-owned Assets Supervision and Administration Commission of Bozhou Municipal People’s Government | Zhao Liang | N/A | 113416007316875206 | N/A |
| Other listed companies at home or abroad controlled by the actual controller in the Reporting Period | N/A | |||
Change of the actual controller during the Reporting Period:
□Applicable ? Not applicable
No such cases in the Reporting Period.Ownership and control relations between the actual controller and the Company:
Indicate by tick mark whether the actual controller controls the Company via trust or other ways of asset management.
□Applicable ? Not applicable
~ 81 ~
4. Number of Accumulative Pledged Shares Held by the Company’s Controlling Shareholder or theLargest Shareholder as well as Its Acting-in-Concert Parties Accounts for 80% of All Shares of theCompany Held by Them
□Applicable ? Not applicable
5. Other 10% or Greater Corporate Shareholders
□Applicable ? Not applicable
6. Limitations on Shareholding Decrease by the Company’s Controlling Shareholder, Actual Controller,Reorganiser and Other Commitment Makers
□Applicable ? Not applicable
IV Specific Implementation of Share Repurchase during the Reporting PeriodProgress on any share repurchase
□Applicable ? Not applicable
Progress on reducing the repurchased shares by means of centralised bidding
□Applicable ? Not applicable
~ 82 ~
Part VIII Preference Shares
□ Applicable ? Not applicable
No preference shares in the Reporting Period.
Part IX Corporate Bonds
□ Applicable ? Not applicable
~ 83 ~
Part X Financial StatementsI Independent Auditor’s Report
| Type of auditor’s opinion | Unmodified unqualified opinion |
| Date of signing the auditor’s report | 25 April 2025 |
| Name of the auditor | RSM China CPA LLP |
| No. of the auditor’s report | RSM Auditor’s Report No. [2025] 518Z0733 |
| Name of CPA | Zhang Liping, Han Songliang |
Text of the Auditor’s Report
To the Shareholders of Anhui Gujing Distillery Company Limited:
I. OpinionWe have audited the financial statements of Anhui Gujing Distillery Company Limited. (hereafter referred to as “Anhui Gujing”),which comprises the consolidated and the parent company’s statement of financial position as at 31 December 2024, the consolidatedand the parent company’s statement of profit or loss and other comprehensive income, the consolidated and the parent company’sstatement of cash flows, the consolidated and the parent company’s statement of changes in equity for the year then ended, and thenotes to the financial statements.In our opinion, the accompanying Anhui Gujing’s financial statements present fairly, in all material respects, the consolidated and thecompany’s financial position as at 31 December 2024 and of their financial performance and cash flows for the year then ended inaccordance with Accounting Standards for Business Enterprises.II. Basis for OpinionWe conducted our audit in accordance with Chinese Standards on Auditing (CSAs). Our responsibilities under those standards arefurther described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independentof Anhui Gujing in accordance with the Code of Ethics for Professional Accountants of the Chinese Institute of Certified PublicAccountants, and we have fulfilled our other ethical responsibilities. We believe that the audit evidence we obtained is sufficient andappropriate to provide a basis for our opinion.III. Key Audit MattersKey audit matters are those matters that, in our professional judgment, were of the most significance in our audit of the financialstatements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, andinforming our opinion thereon, and we do not provide a separate opinion on these matters.(I) Revenue recognition
1. Description
Refer to notes to the financial statements “3. 27. Revenue” and “5. 37. Operating Revenue and Cost of Sales”.In 2024, the Company achieved baijiu sales revenue of RMB22,865 million, accounting for 96.98% of operating revenue. Sincebaijiu revenue is one of the key performance indicators of the Company, there may be the risk of material misstatement in whetherthe revenue is recognised in an appropriate accounting period. Therefore, we regard baijiu sales revenue recognition as a key auditmatter.
~ 84 ~
2. Audit response
Our procedures for revenue recognition include:
(1) Understand the internal control process design related to the sales business, and execute the walk-through test, perform thecontrol test on the identified key control points;
(2) Additionally, discussions were held with the management and samples of sales contracts were reviewed to identify clauses andconditions related to the transfer of control over goods. This process is essential for evaluating whether the timing of revenuerecognition complies with corporate accounting standards;
(3) Sampling inspection of supporting documents related to baijiu sales revenue recognition, including sales orders, sales invoices,outbound orders, sales outstanding, etc.;
(4) Compared with the baijiu sales data of other enterprises in the same industry, compared the baijiu sales data of the last period withthe current period, analysed the overall rationality of revenue and gross margin;
(5) For the baijiu sales revenue recognised before and after the balance sheet date, select samples to check the sales orders, salesinvoices, outbound orders, sales outstanding, etc., in order to evaluate whether the sales revenue is recorded in an appropriateaccounting period;
(6) Confirm the amount of baijiu sold and the closing balance of the advance payment to the main distributor by sendingconfirmation letter.(II) Authenticity and completeness of monetary assets
1. Description
Refer to notes to the financial statements “3. 9. Cash and Cash Equivalents” and “5. 1. Monetary Assets”.As of 31 December 2024, the balance of monetary assets for Anhui Gujing was RMB15,894 million, accounting for 39.22% of totalassets. Due to the material amount of monetary assets, and the significant impact of their authenticity and completeness on the overallfairness of the financial statements, we regard the audit of monetary assets as a key audit matter.
2. Audit response
The procedures we performed to verify the authenticity and completeness of monetary assets include:
(1) Understand the reasonableness of the internal control design related to monetary assets management at Anhui Gujing and test theeffectiveness of key internal controls;
(2) Obtain a list of bank accounts opened and reconcile it with the Company’s book records of bank accounts to check thecompleteness of the bank accounts; obtain credit reports to verify whether the monetary assets are subject to any mortgages, pledges,or freezes;
(3) Send confirmation letters to the banks to confirm the balances and restrictions of the Company’s bank accounts, and reconcile theconfirmation results with the Company’s book records;
(4) Perform bidirectional testing of cash flows on significant bank accounts by combining bank statements and bank ledgers, andcheck large receipt and payment transactions;
(5) Conduct physical verification of original time deposits and review information such as the holder of the time deposits;
(6) Review the actual use of the raised funds in the current year for each fundraising project and verify whether it complies withrelevant regulations such as the Management Measures for Raised Funds of Listed Companies issued by the Shenzhen StockExchange.IV. Other InformationManagement of Anhui Gujing (hereinafter referred to as “Management”) is responsible for the other information. The otherinformation comprises the information included in the Annual Report of Anhui Gujing for the year of 2024, but does not include thefinancial 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
~ 85 ~
thereon.In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, considerwhether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit orotherwise appears to be materially misstated.If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are requiredto report that fact. We have nothing to report in this regard.V. Responsibilities of Management and Those Charged with Governance for the Financial StatementsManagement of Anhui Gujing is responsible for the preparation and fair presentation of the financial statements in accordance withAccounting Standards for Business Enterprises, and for the design, implementation and maintenance of such internal control asmanagement determines is necessary to enable the preparation of financial statements that are free from material misstatement,whether due to fraud or error.In preparing the financial statements, management is responsible for assessing Anhui Gujing’s ability to continue as a going concern,disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management eitherintends to liquidate Anhui Gujing or to cease operations, or have no realistic alternative but to do so.Those charged with governance are responsible for overseeing Anhui Gujing’s financial reporting process.VI. Auditor’s Responsibilities for the Audit of the Financial StatementsOur Objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from materialmisstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a highlevel of assurance, but is not a guarantee that an audit conducted in accordance with CSAs will always detect a material misstatementwhen it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they couldreasonably 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 CSAs, we exercise professional judgment and maintain professional scepticism throughout theaudit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design andperform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, asfraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in thecircumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosuresmade by management.
(4) Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidenceobtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on Anhui Gujing’sability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in ourauditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Ourconclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions maycause Anhui Gujing to cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, and whether the financial statements representthe 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 AnhuiGujing to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of thegroup audit. We remain solely responsible for our audit opinion.
~ 86 ~
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit andsignificant audit findings, 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 regardingindependence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on ourindependence, and where applicable, related safeguards.From the matters communicated with those charged with governance, we determine those matters that were of most significance inthe audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in ourauditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, wedetermine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably beexpected to outweigh the public interest benefits of such communication.
| RSM China CPA LLP | [Name of CPA]: Zhang Liping (Engagement Partner) |
| China·Beijing | [Name of CPA]: Han Songliang |
| 25 April 2025 |
~ 87 ~
II Financial StatementsCurrency unit for the financial statements and the notes thereto: RMB
1. Consolidated Balance Sheet
Prepared by Anhui Gujing Distillery Company Limited
31 December 2024
Unit: RMB
| Item | 31 December 2024 | 1 January 2024 |
| Current assets: | ||
| Monetary assets | 15,894,104,466.53 | 15,966,371,744.19 |
| Settlement reserve | ||
| Interbank loans granted | ||
| Held-for-trading financial assets | 60,184,353.81 | 719,987,547.42 |
| Derivative financial assets | ||
| Notes receivable | ||
| Accounts receivable | 69,819,734.99 | 68,607,919.27 |
| Accounts receivable financing | 2,966,732,807.75 | 957,560,115.73 |
| Prepayments | 278,472,276.28 | 91,607,342.18 |
| Premiums receivable | ||
| Reinsurance receivables | ||
| Receivable reinsurance contract reserve | ||
| Other receivables | 86,894,981.69 | 49,178,194.70 |
| Including: Interest receivable | ||
| Dividends receivable | ||
| Financial assets purchased under resale agreements | ||
| Inventories | 9,264,220,836.58 | 7,519,682,536.51 |
| Including: Data resources | ||
| Contract assets | ||
| Assets held for sale | ||
| Current portion of non-current assets | ||
| Other current assets | 191,503,861.97 | 135,071,255.36 |
| Total current assets | 28,811,933,319.60 | 25,508,066,655.36 |
| Non-current assets: | ||
| Loans and advances to customers | ||
| Investments in debt obligations | ||
| Investments in other debt obligations | ||
| Long-term receivables |
~ 88 ~
| Long-term equity investments | 11,732,641.44 | 10,367,078.26 |
| Investments in other equity instruments | 69,500,830.82 | 63,105,658.07 |
| Other non-current financial assets | ||
| Investment property | 43,893,659.88 | 46,622,910.19 |
| Fixed assets | 7,896,995,404.62 | 4,596,044,056.92 |
| Construction in progress | 1,038,780,764.86 | 2,910,735,155.39 |
| Productive living assets | ||
| Oil and gas assets | ||
| Right-of-use assets | 100,293,500.73 | 81,038,100.24 |
| Intangible assets | 1,129,272,763.98 | 1,123,186,836.65 |
| Including: Data resources | ||
| Development costs | ||
| Including: Data resources | ||
| Goodwill | 561,364,385.01 | 561,364,385.01 |
| Long-term prepaid expense | 374,605,387.89 | 59,102,583.98 |
| Deferred income tax assets | 483,333,690.76 | 455,588,567.46 |
| Other non-current assets | 707,352.50 | 5,685,287.46 |
| Total non-current assets | 11,710,480,382.49 | 9,912,840,619.63 |
| Total assets | 40,522,413,702.09 | 35,420,907,274.99 |
| Current liabilities: | ||
| Short-term borrowings | 50,038,194.44 | 0.00 |
| Borrowings from the central bank | ||
| Interbank loans obtained | ||
| Held-for-trading financial liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | 589,364,409.55 | 1,353,187,723.44 |
| Accounts payable | 2,942,339,182.13 | 2,814,192,071.24 |
| Advances from customers | ||
| Contract liabilities | 3,514,800,038.80 | 1,401,122,249.53 |
| Financial assets sold under repurchase agreements | ||
| Customer deposits and interbank deposits | ||
| Payables for acting trading of securities | ||
| Payables for underwriting of securities | ||
| Employee benefits payable | 1,121,224,782.28 | 1,180,605,773.29 |
| Taxes payable | 1,163,171,843.49 | 1,179,368,855.69 |
| Other payables | 3,146,672,513.57 | 3,267,292,222.01 |
| Including: Interest payable |
~ 89 ~
| Dividends payable | ||
| Handling charges and commissions payable | ||
| Reinsurance payables | ||
| Liabilities directly associated with assets held for sale | ||
| Current portion of non-current liabilities | 89,836,200.57 | 80,825,022.51 |
| Other current liabilities | 1,691,188,287.40 | 1,132,018,451.10 |
| Total current liabilities | 14,308,635,452.23 | 12,408,612,368.81 |
| Non-current liabilities: | ||
| Insurance contract reserve | ||
| Long-term borrowings | 41,600,000.00 | 107,106,256.94 |
| Bonds payable | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | 84,453,588.30 | 68,380,767.78 |
| Long-term payables | ||
| Long-term employee benefits payable | ||
| Provisions | ||
| Deferred income | 122,142,913.25 | 100,811,404.82 |
| Deferred income tax liabilities | 271,795,024.98 | 321,723,514.56 |
| Other non-current liabilities | ||
| Total non-current liabilities | 519,991,526.53 | 598,021,944.10 |
| Total liabilities | 14,828,626,978.76 | 13,006,634,312.91 |
| Owners’ equity: | ||
| Share capital | 528,600,000.00 | 528,600,000.00 |
| Other equity instruments | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserves | 6,229,111,206.22 | 6,224,747,667.10 |
| Less: Treasury stock | ||
| Other comprehensive income | -9,604,119.74 | 1,596,322.73 |
| Specific reserve | ||
| Surplus reserves | 269,402,260.27 | 269,402,260.27 |
| General reserve | ||
| Retained earnings | 17,639,514,432.44 | 14,500,963,359.34 |
| Total equity attributable to owners of the Company as the parent | 24,657,023,779.19 | 21,525,309,609.44 |
| Non-controlling interests | 1,036,762,944.14 | 888,963,352.64 |
| Total owners’ equity | 25,693,786,723.33 | 22,414,272,962.08 |
| Total liabilities and owners’ equity | 40,522,413,702.09 | 35,420,907,274.99 |
~ 90 ~
Legal representative: Liang Jinhui The Company’s chief accountant: Zhu JiafengHead of the Company’s financial department: Zhu Jiafeng
2. Balance Sheet of the Company as the Parent
Unit: RMB
| Item | 31 December 2024 | 1 January 2024 |
| Current assets: | ||
| Monetary assets | 7,578,634,079.50 | 7,430,906,530.24 |
| Held-for-trading financial assets | 0.00 | 719,987,547.42 |
| Derivative financial assets | ||
| Notes receivable | 0.00 | 44,669,454.15 |
| Accounts receivable | ||
| Accounts receivable financing | 1,692,337,127.64 | 353,179,776.80 |
| Prepayments | 6,440,878.02 | 64,184,453.89 |
| Other receivables | 505,111,096.18 | 384,878,020.29 |
| Including: Interest receivable | ||
| Dividends receivable | ||
| Inventories | 7,258,975,398.24 | 5,791,297,076.99 |
| Including: Data resources | ||
| Contract assets | ||
| Assets held for sale | ||
| Current portion of non-current assets | ||
| Other current assets | 132,970,178.96 | 70,067,944.53 |
| Total current assets | 17,174,468,758.54 | 14,859,170,804.31 |
| Non-current assets: | ||
| Investments in debt obligations | ||
| Investments in other debt obligations | ||
| Long-term receivables | ||
| Long-term equity investments | 1,648,298,837.80 | 1,602,935,444.04 |
| Investments in other equity instruments | ||
| Other non-current financial assets | ||
| Investment property | 42,562,431.85 | 46,622,910.19 |
| Fixed assets | 6,079,767,997.96 | 3,457,239,038.00 |
| Construction in progress | 928,920,528.47 | 2,081,093,829.00 |
| Productive living assets | ||
| Oil and gas assets | ||
| Right-of-use assets | 100,293,500.73 | 81,038,100.24 |
| Intangible assets | 498,603,502.55 | 494,450,059.46 |
~ 91 ~
| Including: Data resources | ||
| Development costs | ||
| Including: Data resources | ||
| Goodwill | ||
| Long-term prepaid expense | 305,453,097.21 | 22,664,614.49 |
| Deferred income tax assets | 0.00 | 31,803,704.33 |
| Other non-current assets | ||
| Total non-current assets | 9,603,899,896.57 | 7,817,847,699.75 |
| Total assets | 26,778,368,655.11 | 22,677,018,504.06 |
| Current liabilities: | ||
| Short-term borrowings | ||
| Held-for-trading financial liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | ||
| Accounts payable | 2,092,055,042.44 | 1,658,351,501.91 |
| Advances from customers | ||
| Contract liabilities | 794,714,253.43 | 858,057,014.88 |
| Employee benefits payable | 325,195,369.96 | 477,940,588.68 |
| Taxes payable | 735,214,837.75 | 730,264,020.00 |
| Other payables | 882,504,197.38 | 879,518,254.66 |
| Including: Interest payable | ||
| Dividends payable | ||
| Liabilities directly associated with assets held for sale | ||
| Current portion of non-current liabilities | 13,346,230.73 | 10,771,925.29 |
| Other current liabilities | 125,309,809.42 | 134,926,323.61 |
| Total current liabilities | 4,968,339,741.11 | 4,749,829,629.03 |
| Non-current liabilities: | ||
| Long-term borrowings | ||
| Bonds payable | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | 84,453,588.30 | 68,380,767.78 |
| Long-term payables | ||
| Long-term employee benefits payable | ||
| Provisions | ||
| Deferred income | 59,582,910.44 | 35,650,375.64 |
| Deferred income tax liabilities | 49,348,636.55 | 71,944,672.72 |
| Other non-current liabilities | ||
| Total non-current liabilities | 193,385,135.29 | 175,975,816.14 |
~ 92 ~
| Total liabilities | 5,161,724,876.40 | 4,925,805,445.17 |
| Owners’ equity: | ||
| Share capital | 528,600,000.00 | 528,600,000.00 |
| Other equity instruments | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserves | 6,176,504,182.20 | 6,176,504,182.20 |
| Less: Treasury stock | ||
| Other comprehensive income | -7,249,242.08 | -1,993,312.09 |
| Specific reserve | ||
| Surplus reserves | 264,300,000.00 | 264,300,000.00 |
| Retained earnings | 14,654,488,838.59 | 10,783,802,188.78 |
| Total owners’ equity | 21,616,643,778.71 | 17,751,213,058.89 |
| Total liabilities and owners’ equity | 26,778,368,655.11 | 22,677,018,504.06 |
3. Consolidated Income Statement
Unit: RMB
| Item | 2024 | 2023 |
| 1. Revenue | 23,577,928,065.99 | 20,253,526,598.02 |
| Including: Operating revenue | 23,577,928,065.99 | 20,253,526,598.02 |
| Interest revenue | ||
| Insurance premium income | ||
| Handling charge and commission income | ||
| 2. Costs and expenses | 15,831,967,986.27 | 14,002,575,265.55 |
| Including: Cost of sales | 4,738,054,529.34 | 4,239,850,906.91 |
| Interest costs | ||
| Handling charge and commission expense | ||
| Surrenders | ||
| Net insurance claims paid | ||
| Net amount provided as insurance contract reserve | ||
| Expenditure on policy dividends | ||
| Reinsurance premium expense | ||
| Taxes and surcharges | 3,740,333,528.99 | 3,050,101,661.89 |
| Selling expense | 6,181,762,995.50 | 5,436,773,057.25 |
| Administrative expense | 1,442,398,926.31 | 1,367,146,467.89 |
| R&D expense | 78,242,212.58 | 70,947,196.49 |
~ 93 ~
| Finance costs | -348,824,206.45 | -162,244,024.88 |
| Including: Interest costs | 6,145,816.53 | 3,289,772.96 |
| Interest revenue | 367,977,768.88 | 169,297,052.44 |
| Add: Other income | 63,946,740.48 | 48,053,328.37 |
| Return on investment (“-” for loss) | -34,487,487.67 | -6,338,129.69 |
| Including: Share of profit or loss of joint ventures and associates | 1,365,563.18 | 212,842.28 |
| Income from the derecognition of financial assets at amortised cost (“-” for loss) | ||
| Exchange gain (“-” for loss) | ||
| Net gain on exposure hedges (“-” for loss) | ||
| Gain on changes in fair value (“-” for loss) | 184,353.81 | 19,987,547.42 |
| Credit impairment loss (“-” for loss) | -1,645,272.23 | 891,610.40 |
| Asset impairment loss (“-” for loss) | -23,585,609.99 | -31,053,196.87 |
| Asset disposal income (“-” for loss) | -192,200.99 | 437,622.67 |
| 3. Operating profit (“-” for loss) | 7,750,180,603.13 | 6,282,930,114.77 |
| Add: Non-operating income | 60,806,091.26 | 85,066,844.12 |
| Less: Non-operating expense | 15,399,484.99 | 35,851,126.34 |
| 4. Profit before tax (“-” for loss) | 7,795,587,209.40 | 6,332,145,832.55 |
| Less: Income tax expense | 2,088,975,630.59 | 1,605,876,011.66 |
| 5. Net profit (“-” for net loss) | 5,706,611,578.81 | 4,726,269,820.89 |
| 5.1 By operating continuity | ||
| 5.1.1 Net profit from continuing operations (“-” for net loss) | 5,706,611,578.81 | 4,726,269,820.89 |
| 5.1.2 Net profit from discontinued operations (“-” for net loss) | ||
| 5.2 By ownership | ||
| 5.2.1 Net profit attributable to shareholders of the Company as the parent | 5,517,251,073.10 | 4,589,164,052.80 |
| 5.2.2 Net profit attributable to non-controlling interests | 189,360,505.71 | 137,105,768.09 |
| 6. Other comprehensive income, net of tax | -9,181,460.31 | 3,060,072.18 |
| Attributable to owners of the | -11,200,442.47 | 1,187,583.12 |
~ 94 ~
| Company as the parent | ||
| 6.1 Items that will not be reclassified to profit or loss | 2,877,827.74 | 2,996,040.66 |
| 6.1.1 Changes caused by remeasurements on defined benefit schemes | ||
| 6.1.2 Other comprehensive income that will not be reclassified to profit or loss under the equity method | ||
| 6.1.3 Changes in the fair value of investments in other equity instruments | 2,877,827.74 | 2,996,040.66 |
| 6.1.4 Changes in the fair value arising from changes in own credit risk | ||
| 6.1.5 Other | ||
| 6.2 Items that will be reclassified to profit or loss | -14,078,270.21 | -1,808,457.54 |
| 6.2.1 Other comprehensive income that will be reclassified to profit or loss under the equity method | ||
| 6.2.2 Changes in the fair value of investments in other debt obligations | ||
| 6.2.3 Other comprehensive income arising from the reclassification of financial assets | -14,078,270.21 | -1,808,457.54 |
| 6.2.4 Credit impairment allowance for investments in other debt obligations | ||
| 6.2.5 Reserve for cash flow hedges | ||
| 6.2.6 Differences arising from the translation of foreign currency-denominated financial statements | ||
| 6.2.7 Other | ||
| Attributable to non-controlling interests | 2,018,982.16 | 1,872,489.06 |
| 7. Total comprehensive income | 5,697,430,118.50 | 4,729,329,893.07 |
| Attributable to owners of the Company as the parent | 5,506,050,630.63 | 4,590,351,635.92 |
| Attributable to non-controlling interests | 191,379,487.87 | 138,978,257.15 |
| 8. Earnings per share | ||
| 8.1 Basic earnings per share | 10.44 | 8.68 |
~ 95 ~
| 8.2 Diluted earnings per share | 10.44 | 8.68 |
Legal representative: Liang Jinhui The Company’s chief accountant: Zhu JiafengHead of the Company’s financial department: Zhu Jiafeng
4. Income Statement of the Company as the Parent
Unit: RMB
| Item | 2024 | 2023 |
| 1. Operating revenue | 13,011,311,837.05 | 10,625,037,756.73 |
| Less: Cost of sales | 4,240,402,284.96 | 3,708,083,747.47 |
| Taxes and surcharges | 3,125,649,960.09 | 2,575,219,279.98 |
| Selling expense | 53,576,677.10 | 48,250,729.30 |
| Administrative expense | 877,833,183.04 | 940,282,659.56 |
| R&D expense | 29,707,498.92 | 29,954,006.67 |
| Finance costs | -130,747,593.73 | -110,266,407.56 |
| Including: Interest expense | 7,534,658.55 | 1,700,517.02 |
| Interest revenue | 149,932,201.32 | 114,742,716.55 |
| Add: Other income | 14,365,502.63 | 8,532,622.97 |
| Return on investment (“-” for loss) | 2,663,107,259.84 | 143,470,881.11 |
| Including: Share of profit or loss of joint ventures and associates | 1,363,393.76 | 185,830.36 |
| Income from the derecognition of financial assets at amortised cost (“-” for loss) | ||
| Net gain on exposure hedges (“-” for loss) | ||
| Gain on changes in fair value (“-” for loss) | 0.00 | 19,987,547.42 |
| Credit impairment loss (“-” for loss) | -775,857.58 | 165,875.85 |
| Asset impairment loss (“-” for loss) | -16,281,050.12 | -25,391,138.49 |
| Asset disposal income (“-” for loss) | 1,897,869.11 | 232,884.34 |
| 2. Operating profit (“-” for loss) | 7,477,203,550.55 | 3,580,512,414.51 |
| Add: Non-operating income | 36,460,849.92 | 34,681,066.94 |
| Less: Non-operating expense | 7,006,919.47 | 27,568,586.35 |
| 3. Profit before tax (“-” for loss) | 7,506,657,481.00 | 3,587,624,895.10 |
| Less: Income tax expense | 1,257,270,831.19 | 909,045,628.10 |
| 4. Net profit (“-” for net loss) | 6,249,386,649.81 | 2,678,579,267.00 |
| 4.1 Net profit from continuing operations (“-” for net loss) | 6,249,386,649.81 | 2,678,579,267.00 |
~ 96 ~
| 4.2 Net profit from discontinued operations (“-” for net loss) | ||
| 5. Other comprehensive income, net of tax | -5,255,929.99 | -1,463,957.32 |
| 5.1 Items that will not be reclassified to profit or loss | ||
| 5.1.1 Changes caused by remeasurements on defined benefit schemes | ||
| 5.1.2 Other comprehensive income that will not be reclassified to profit or loss under the equity method | ||
| 5.1.3 Changes in the fair value of investments in other equity instruments | ||
| 5.1.4 Changes in the fair value arising from changes in own credit risk | ||
| 5.1.5 Other | ||
| 5.2 Items that will be reclassified to profit or loss | -5,255,929.99 | -1,463,957.32 |
| 5.2.1 Other comprehensive income that will be reclassified to profit or loss under the equity method | ||
| 5.2.2 Changes in the fair value of investments in other debt obligations | ||
| 5.2.3 Other comprehensive income arising from the reclassification of financial assets | -5,255,929.99 | -1,463,957.32 |
| 5.2.4 Credit impairment allowance for investments in other debt obligations | ||
| 5.2.5 Reserve for cash flow hedges | ||
| 5.2.6 Differences arising from the translation of foreign currency-denominated financial statements | ||
| 5.2.7 Other | ||
| 6. Total comprehensive income | 6,244,130,719.82 | 2,677,115,309.68 |
| 7. Earnings per share | ||
| 7.1 Basic earnings per share | 11.82 | 5.07 |
| 7.2 Diluted earnings per share | 11.82 | 5.07 |
5. Consolidated Cash Flow Statement
Unit: RMB
~ 97 ~
| Item | 2024 | 2023 |
| 1. Cash flows from operating activities: | ||
| Proceeds from sale of commodities and rendering of services | 23,210,865,893.05 | 20,796,713,697.12 |
| Net increase in customer deposits and interbank deposits | ||
| Net increase in borrowings from the central bank | ||
| Net increase in loans from other financial institutions | ||
| Premiums received on original insurance contracts | ||
| Net proceeds from reinsurance | ||
| Net increase in deposits and investments of policy holders | ||
| Interest, handling charges and commissions received | ||
| Net increase in interbank loans obtained | ||
| Net increase in proceeds from repurchase transactions | ||
| Net proceeds from acting trading of securities | ||
| Tax rebates | 28,035,855.88 | 25,589,555.96 |
| Cash generated from other operating activities | 2,180,324,471.32 | 1,423,692,371.04 |
| Subtotal of cash generated from operating activities | 25,419,226,220.25 | 22,245,995,624.12 |
| Payments for commodities and services | 4,085,891,932.48 | 3,187,127,580.32 |
| Net increase in loans and advances to customers | ||
| Net increase in deposits in the central bank and in interbank loans granted | ||
| Payments for claims on original insurance contracts | ||
| Net increase in interbank loans granted | ||
| Interest, handling charges and commissions paid | ||
| Policy dividends paid | ||
| Cash paid to and for employees | 4,166,336,969.08 | 3,667,689,324.27 |
| Taxes paid | 8,236,777,809.30 | 6,693,398,014.08 |
| Cash used in other operating activities | 4,202,566,635.54 | 4,201,574,671.03 |
~ 98 ~
| Subtotal of cash used in operating activities | 20,691,573,346.40 | 17,749,789,589.70 |
| Net cash generated from/used in operating activities | 4,727,652,873.85 | 4,496,206,034.42 |
| 2. Cash flows from investing activities: | ||
| Proceeds from disinvestment | 950,199,000.00 | 1,895,000,000.00 |
| Return on investment | 23,252,370.14 | 26,136,797.69 |
| Net proceeds from the disposal of fixed assets, intangible assets and other long-lived assets | 5,909,689.76 | 5,606,610.18 |
| Net proceeds from the disposal of subsidiaries and other business units | ||
| Cash generated from other investing activities | ||
| Subtotal of cash generated from investing activities | 979,361,059.90 | 1,926,743,407.87 |
| Payments for the acquisition of fixed assets, intangible assets and other long-lived assets | 2,427,403,146.80 | 2,381,037,944.96 |
| Payments for investments | 285,000,000.00 | 810,199,000.00 |
| Net increase in pledged loans granted | ||
| Net payments for the acquisition of subsidiaries and other business units | 0.00 | 13,439,262.05 |
| Cash used in other investing activities | ||
| Subtotal of cash used in investing activities | 2,712,403,146.80 | 3,204,676,207.01 |
| Net cash generated from/used in investing activities | -1,733,042,086.90 | -1,277,932,799.14 |
| 3. Cash flows from financing activities: | ||
| Capital contributions received | 26,000,000.00 | 4,000,000.00 |
| Including: Capital contributions by non-controlling interests to subsidiaries | 26,000,000.00 | 4,000,000.00 |
| Borrowings raised | 120,000,100.00 | 158,200,000.00 |
| Cash generated from other financing activities | ||
| Subtotal of cash generated from financing activities | 146,000,100.00 | 162,200,000.00 |
| Repayment of borrowings | 129,000,100.00 | 139,110,000.00 |
| Interest and dividends paid | 2,472,703,924.46 | 1,647,714,435.86 |
| Including: Dividends paid by subsidiaries to non-controlling interests | 79,865,320.11 | 60,232,272.03 |
| Cash used in other financing activities | 21,939,585.66 | 22,854,817.28 |
| Subtotal of cash used in financing | 2,623,643,610.12 | 1,809,679,253.14 |
~ 99 ~
| activities | ||
| Net cash generated from/used in financing activities | -2,477,643,510.12 | -1,647,479,253.14 |
| 4. Effect of foreign exchange rates changes on cash and cash equivalents | ||
| 5. Net increase in cash and cash equivalents | 516,967,276.83 | 1,570,793,982.14 |
| Add: Cash and cash equivalents, beginning of the period | 14,676,167,417.36 | 13,105,373,435.22 |
| 6. Cash and cash equivalents, end of the period | 15,193,134,694.19 | 14,676,167,417.36 |
6. Cash Flow Statement of the Company as the Parent
Unit: RMB
| Item | 2024 | 2023 |
| 1. Cash flows from operating activities: | ||
| Proceeds from sale of commodities and rendering of services | 12,549,758,616.03 | 11,647,556,108.04 |
| Tax rebates | 5,160,883.87 | 554,315.70 |
| Cash generated from other operating activities | 1,627,480,751.47 | 1,945,896,434.51 |
| Subtotal of cash generated from operating activities | 14,182,400,251.37 | 13,594,006,858.25 |
| Payments for commodities and services | 3,066,423,348.26 | 2,966,088,152.22 |
| Cash paid to and for employees | 1,451,425,508.82 | 1,330,813,936.27 |
| Taxes paid | 5,352,859,334.13 | 4,002,592,476.22 |
| Cash used in other operating activities | 1,975,173,936.80 | 2,164,383,676.11 |
| Subtotal of cash used in operating activities | 11,845,882,128.01 | 10,463,878,240.82 |
| Net cash generated from/used in operating activities | 2,336,518,123.36 | 3,130,128,617.43 |
| 2. Cash flows from investing activities: | ||
| Proceeds from disinvestment | 710,199,000.00 | 1,270,000,000.00 |
| Return on investment | 1,657,498,129.72 | 155,367,881.51 |
| Net proceeds from the disposal of fixed assets, intangible assets and other long-lived assets | 193,207,592.28 | 996,472.31 |
| Net proceeds from the disposal of subsidiaries and other business units | ||
| Cash generated from other investing activities |
~ 100 ~
| Subtotal of cash generated from investing activities | 2,560,904,722.00 | 1,426,364,353.82 |
| Payments for the acquisition of fixed assets, intangible assets and other long-lived assets | 2,293,434,362.35 | 2,112,501,571.75 |
| Payments for investments | 44,000,000.00 | 736,199,000.00 |
| Net payments for the acquisition of subsidiaries and other business units | 0.00 | 13,439,262.05 |
| Cash used in other investing activities | ||
| Subtotal of cash used in investing activities | 2,337,434,362.35 | 2,862,139,833.80 |
| Net cash generated from/used in investing activities | 223,470,359.65 | -1,435,775,479.98 |
| 3. Cash flows from financing activities: | ||
| Capital contributions received | ||
| Borrowings raised | ||
| Cash generated from other financing activities | ||
| Subtotal of cash generated from financing activities | ||
| Repayment of borrowings | ||
| Interest and dividends paid | 2,390,321,348.09 | 1,585,800,000.00 |
| Cash used in other financing activities | 21,939,585.66 | 15,930,799.73 |
| Subtotal of cash used in financing activities | 2,412,260,933.75 | 1,601,730,799.73 |
| Net cash generated from/used in financing activities | -2,412,260,933.75 | -1,601,730,799.73 |
| 4. Effect of foreign exchange rates changes on cash and cash equivalents | ||
| 5. Net increase in cash and cash equivalents | 147,727,549.26 | 92,622,337.72 |
| Add: Cash and cash equivalents, beginning of the period | 7,430,906,530.24 | 7,338,284,192.52 |
| 6. Cash and cash equivalents, end of the period | 7,578,634,079.50 | 7,430,906,530.24 |
~ 101 ~
7. Consolidated Statements of Changes in Owners’ Equity
2024
Unit: RMB
| Item | 2024 | ||||||||||||||
| Equity attributable to owners of the Company as the parent | Non-controlling interests | Total owners’ equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserves | General reserve | Retained earnings | Other | Subtotal | |||||
| Preferred shares | Perpetual bonds | Other | |||||||||||||
| 1. Balance as at the end of the prior year | 528,600,000.00 | 6,224,747,667.10 | 1,596,322.73 | 269,402,260.27 | 14,500,963,359.34 | 21,525,309,609.44 | 888,963,352.64 | 22,414,272,962.08 | |||||||
| Add: Adjustment for change in accounting policy | |||||||||||||||
| Adjustment for correction of previous error | |||||||||||||||
| Other adjustments | |||||||||||||||
| 2. Balance as at the beginning of the year | 528,600,000.00 | 6,224,747,667.10 | 1,596,322.73 | 269,402,260.27 | 14,500,963,359.34 | 21,525,309,609.44 | 888,963,352.64 | 22,414,272,962.08 | |||||||
| 3. Increase/ | 4,363,539.12 | -11,200,442.47 | 3,138,551,073.10 | 3,131,714,169.75 | 147,799,591.50 | 3,279,513,761.25 | |||||||||
~ 102 ~
| decrease in the period (“-” for decrease) | |||||||||||||||
| 3.1 Total comprehensive income | -11,200,442.47 | 5,517,251,073.10 | 5,506,050,630.63 | 191,379,487.87 | 5,697,430,118.50 | ||||||||||
| 3.2 Capital increased and reduced by owners | 4,363,539.12 | 4,363,539.12 | 36,285,423.74 | 40,648,962.86 | |||||||||||
| 3.2.1 Ordinary shares increased by owners | 28,050,000.00 | 28,050,000.00 | |||||||||||||
| 3.2.2 Capital increased by holders of other equity instruments | |||||||||||||||
| 3.2.3 Share-based payments included in owners’ equity | |||||||||||||||
| 3.2.4 Other | 4,363,539.12 | 4,363,539.12 | 8,235,423.74 | 12,598,962.86 | |||||||||||
| 3.3 Profit distribution | -2,378,700,000.00 | -2,378,700,000.00 | -79,865,320.11 | -2,458,565,320.11 |
~ 103 ~
| 3.3.1 Appropriation to surplus reserves | |||||||||||||||
| 3.3.2 Appropriation to general reserve | |||||||||||||||
| 3.3.3 Appropriation to owners (or shareholders) | -2,378,700,000.00 | -2,378,700,000.00 | -79,865,320.11 | -2,458,565,320.11 | |||||||||||
| 3.3.4 Other | |||||||||||||||
| 3.4 Transfers within owners’ equity | |||||||||||||||
| 3.4.1 Increase in capital (or share capital) from capital reserves | |||||||||||||||
| 3.4.2 Increase in capital (or share capital) from surplus reserves |
~ 104 ~
| 3.4.3 Loss offset by surplus reserves | |||||||||||||||
| 3.4.4 Changes in defined benefit schemes transferred to retained earnings | |||||||||||||||
| 3.4.5 Other comprehensive income transferred to retained earnings | |||||||||||||||
| 3.4.6 Other | |||||||||||||||
| 3.5 Specific reserve | |||||||||||||||
| 3.5.1 Increase in the period | |||||||||||||||
| 3.5.2 Used in the period | |||||||||||||||
| 3.6 Other |
~ 105 ~
| 4. Balance as at the end of the period | 528,600,000.00 | 6,229,111,206.22 | -9,604,119.74 | 269,402,260.27 | 17,639,514,432.44 | 24,657,023,779.19 | 1,036,762,944.14 | 25,693,786,723.33 |
2023
Unit: RMB
| Item | 2023 | ||||||||||||||
| Equity attributable to owners of the Company as the parent | Non-controlling interests | Total owners’ equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserves | General reserve | Retained earnings | Other | Subtotal | |||||
| Preferred shares | Perpetual bonds | Other | |||||||||||||
| 1. Balance as at the end of the prior year | 528,600,000.00 | 6,224,747,667.10 | 408,739.61 | 269,402,260.27 | 11,497,599,306.54 | 18,520,757,973.52 | 812,095,782.69 | 19,332,853,756.21 | |||||||
| Add: Adjustment for change in accounting policy | |||||||||||||||
| Adjustment for correction of previous error | |||||||||||||||
| Other adjustments | |||||||||||||||
| 2. Balance as at the beginning of the year | 528,600,000.00 | 6,224,747,667.10 | 408,739.61 | 269,402,260.27 | 11,497,599,306.54 | 18,520,757,973.52 | 812,095,782.69 | 19,332,853,756.21 | |||||||
| 3. Increase/ | 1,187,583.12 | 3,003,364,052.80 | 3,004,551,635.92 | 76,867,569.95 | 3,081,419,205.87 | ||||||||||
~ 106 ~
| decrease in the period (“-” for decrease) | |||||||||||||||
| 3.1 Total comprehensive income | 1,187,583.12 | 4,589,164,052.80 | 4,590,351,635.92 | 138,978,257.15 | 4,729,329,893.07 | ||||||||||
| 3.2 Capital increased and reduced by owners | -1,878,415.17 | -1,878,415.17 | |||||||||||||
| 3.2.1 Ordinary shares increased by owners | -1,878,415.17 | -1,878,415.17 | |||||||||||||
| 3.2.2 Capital increased by holders of other equity instruments | |||||||||||||||
| 3.2.3 Share-based payments included in owners’ equity | |||||||||||||||
| 3.2.4 Other | |||||||||||||||
| 3.3 Profit distribution | -1,585,800,000.00 | -1,585,800,000.00 | -60,232,272.03 | -1,646,032,272.03 |
~ 107 ~
| 3.3.1 Appropriation to surplus reserves | |||||||||||||||
| 3.3.2 Appropriation to general reserve | |||||||||||||||
| 3.3.3 Appropriation to owners (or shareholders) | -1,585,800,000.00 | -1,585,800,000.00 | -60,232,272.03 | -1,646,032,272.03 | |||||||||||
| 3.3.4 Other | |||||||||||||||
| 3.4 Transfers within owners’ equity | |||||||||||||||
| 3.4.1 Increase in capital (or share capital) from capital reserves | |||||||||||||||
| 3.4.2 Increase in capital (or share capital) from surplus reserves |
~ 108 ~
| 3.4.3 Loss offset by surplus reserves | |||||||||||||||
| 3.4.4 Changes in defined benefit schemes transferred to retained earnings | |||||||||||||||
| 3.4.5 Other comprehensive income transferred to retained earnings | |||||||||||||||
| 3.4.6 Other | |||||||||||||||
| 3.5 Specific reserve | |||||||||||||||
| 3.5.1 Increase in the period | |||||||||||||||
| 3.5.2 Used in the period | |||||||||||||||
| 3.6 Other | |||||||||||||||
| 4. Balance as at the end of the | 528,600,000.00 | 6,224,747,667.10 | 1,596,322.73 | 269,402,260.27 | 14,500,963,359.34 | 21,525,309,609.44 | 888,963,352.64 | 22,414,272,962.08 |
~ 109 ~
period
8. Statements of Changes in Owners’ Equity of the Company as the Parent
2024
Unit: RMB
| Item | 2024 | |||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserves | Retained earnings | Other | Total owners’ equity | |||
| Preferred shares | Perpetual bonds | Other | ||||||||||
| 1. Balance as at the end of the prior year | 528,600,000.00 | 6,176,504,182.20 | -1,993,312.09 | 264,300,000.00 | 10,783,802,188.78 | 17,751,213,058.89 | ||||||
| Add: Adjustment for change in accounting policy | ||||||||||||
| Adjustment for correction of previous error | ||||||||||||
| Other adjustments | ||||||||||||
| 2. Balance as at the beginning of the year | 528,600,000.00 | 6,176,504,182.20 | -1,993,312.09 | 264,300,000.00 | 10,783,802,188.78 | 17,751,213,058.89 | ||||||
| 3. Increase/ decrease in the period (“-” for decrease) | -5,255,929.99 | 3,870,686,649.81 | 3,865,430,719.82 | |||||||||
~ 110 ~
| 3.1 Total comprehensive income | -5,255,929.99 | 6,249,386,649.81 | 6,244,130,719.82 | |||||||||
| 3.2 Capital increased and reduced by owners | ||||||||||||
| 3.2.1 Ordinary shares increased by owners | ||||||||||||
| 3.2.2 Capital increased by holders of other equity instruments | ||||||||||||
| 3.2.3 Share-based payments included in owners’ equity | ||||||||||||
| 3.2.4 Other | ||||||||||||
| 3.3 Profit distribution | -2,378,700,000.00 | -2,378,700,000.00 | ||||||||||
| 3.3.1 Appropriation to surplus reserves | ||||||||||||
| 3.3.2 Appropriation to | -2,378,700,000.00 | -2,378,700,000.00 |
~ 111 ~
| owners (or shareholders) | ||||||||||||
| 3.3.3 Other | ||||||||||||
| 3.4 Transfers within owners’ equity | ||||||||||||
| 3.4.1 Increase in capital (or share capital) from capital reserves | ||||||||||||
| 3.4.2 Increase in capital (or share capital) from surplus reserves | ||||||||||||
| 3.4.3 Loss offset by surplus reserves | ||||||||||||
| 3.4.4 Changes in defined benefit schemes transferred to retained earnings | ||||||||||||
| 3.4.5 Other comprehensive income transferred to |
~ 112 ~
| retained earnings | ||||||||||||
| 3.4.6 Other | ||||||||||||
| 3.5 Specific reserve | ||||||||||||
| 3.5.1 Increase in the period | ||||||||||||
| 3.5.2 Used in the period | ||||||||||||
| 3.6 Other | ||||||||||||
| 4. Balance as at the end of the period | 528,600,000.00 | 6,176,504,182.20 | -7,249,242.08 | 264,300,000.00 | 14,654,488,838.59 | 21,616,643,778.71 |
2023
Unit: RMB
| Item | 2023 | |||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserves | Retained earnings | Other | Total owners’ equity | |||
| Preferred shares | Perpetual bonds | Other | ||||||||||
| 1. Balance as at the end of the prior year | 528,600,000.00 | 6,176,504,182.20 | -529,354.77 | 264,300,000.00 | 9,691,022,921.78 | 16,659,897,749.21 | ||||||
~ 113 ~
| Add: Adjustment for change in accounting policy | ||||||||||||
| Adjustment for correction of previous error | ||||||||||||
| Other adjustments | ||||||||||||
| 2. Balance as at the beginning of the year | 528,600,000.00 | 6,176,504,182.20 | -529,354.77 | 264,300,000.00 | 9,691,022,921.78 | 16,659,897,749.21 | ||||||
| 3. Increase/ decrease in the period (“-” for decrease) | -1,463,957.32 | 1,092,779,267.00 | 1,091,315,309.68 | |||||||||
| 3.1 Total comprehensive income | -1,463,957.32 | 2,678,579,267.00 | 2,677,115,309.68 | |||||||||
| 3.2 Capital increased and reduced by owners | ||||||||||||
| 3.2.1 |
~ 114 ~
| Ordinary shares increased by owners | ||||||||||||
| 3.2.2 Capital increased by holders of other equity instruments | ||||||||||||
| 3.2.3 Share-based payments included in owners’ equity | ||||||||||||
| 3.2.4 Other | ||||||||||||
| 3.3 Profit distribution | -1,585,800,000.00 | -1,585,800,000.00 | ||||||||||
| 3.3.1 Appropriation to surplus reserves | ||||||||||||
| 3.3.2 Appropriation to owners (or shareholders) | -1,585,800,000.00 | -1,585,800,000.00 | ||||||||||
| 3.3.3 Other | ||||||||||||
| 3.4 Transfers within owners’ equity | ||||||||||||
| 3.4.1 |
~ 115 ~
| Increase in capital (or share capital) from capital reserves | ||||||||||||
| 3.4.2 Increase in capital (or share capital) from surplus reserves | ||||||||||||
| 3.4.3 Loss offset by surplus reserves | ||||||||||||
| 3.4.4 Changes in defined benefit schemes transferred to retained earnings | ||||||||||||
| 3.4.5 Other comprehensive income transferred to retained earnings | ||||||||||||
| 3.4.6 Other | ||||||||||||
| 3.5 Specific reserve | ||||||||||||
| 3.5.1 Increase in the period |
~ 116 ~
| 3.5.2 Used in the period | ||||||||||||
| 3.6 Other | ||||||||||||
| 4. Balance as at the end of the period | 528,600,000.00 | 6,176,504,182.20 | -1,993,312.09 | 264,300,000.00 | 10,783,802,188.78 | 17,751,213,058.89 |
~ 117 ~
Anhui Gujing Distillery Company LimitedNotes to the Financial StatementsFor the year ended 31 December 2024（All amounts are expressed in Renminbi Yuan(“RMB”)unless otherwise stated）
1. BASIC INFORMATION ABOUT THE COMPANY
1.1 Company Profile
The Anhui State-owned Asset Management Bureau approved through WanGuoZiGongZi (1996)No. 053 the incorporation of Anhui Gujing Distillery Company Limited (the Company and GJDistillery) by Anhui Gujing Group Company Limited (GJ Group), as the sole founder, by theoperating assets of Anhui Bozhou Gujing Distillery Factory (GJ Distillery Factory), which is thecore operating unit of GJ Group. The incorporation was further approved by the Anhui People'sGovernment through WanZhengMi (1996) 42. The incorporation General Meeting was held on 28May 1996 and the incorporation was registered with the Anhui Admistration Bureau for Commerceand Industry on 30 May 1996 with the registered address at Bozhou, Anhui, the People’s Republicof China (the PRC). At incorporation, the Company’s total number of shares stood at 155 millionwith a valuation of CNY 377.17million, which was the fair value of the operating assets of GJDistillery Factory upon appraisal.The Company initiated public offering of 60 million domestic listed shares held by foreigninvestors (known as “B share(s)”) in June 1996 and 20 million domestic listed CNY ordinary shares(known as “A share(s)”) in September 1996. The par value of both the B share and A share is CNY
1.00 per share. The B shares and A shares issued were listed on the Shenzhen Stock Exchange.As of the public listing, the Company has 235 million shares in total with the share capital at CNY235 million. The Company’s at public listing comprised 155 million state-owned shares, 60 millionB shares and 20 million A shares. Each of the Company’s shares has a par value at CNY 1.00 pershare.In accordance with the resolution of the General Meeting held on 29 May 2006, the Companyexercised the share reorganisation plan in June 2006. Immediately after the implementation of theshare reorganisation plan, the Company had in total 235 million shares, comprising 147 millionshares with restriction of disposal (equal to 62.55% of total shares) and 88 million free-floatingshares (equal to 37.45% of total shares).Upon the Company’s publication of the Notice of Lifting Restriction of Shares on 27 June 2007, the
~ 118 ~
restriction on disposal on 11.75 million shares was lifted on 29 June 2007. Immediately after thelifting, the Company had in total 235 million shares, comprising 135.25 million shares withrestriction of disposal (equal to 57.55% of total shares) and 99.75 million free-floating shares (equalto 42.45% of total shares).Upon the Company’s publication of the Notice of Lifting Restriction of Shares on 17 July 2008, therestriction on disposal on 11.75 million shares was lifted on 18 July 2008. Immediately after thelifting, the Company had in total 235 million shares, comprising 123.5 million shares withrestriction of disposal (equal to 52.55% of total shares) and 111.5 million free-floating shares (equalto 47.45% of total shares).Upon the Company’s publication of the Notice of Lifting Restriction of Shares on 24 July 2009, therestriction on disposal on 123.5 million shares was lifted on 29 July 2009. Immediately after thelifting, the Company had in total 235 million shares, comprising 235 million free-floating shares(equal to 100% of total shares).Upon approval by the China Securities Regulatory Commission (CSRC) through ZhengJianXuKe[2011] 943, the Company issued on 15 July 2011 through private offering of 16.8 million A shareswith the par value at CNY 1.00 to designated investors. The shares were issued at CNY 75.00 pershare. Gross proceeds from this issuance was CNY 1,260 million and the respective net proceedsafter deduction of the cost of issuance (CNY 32.5 million) was CNY 1,227.5 million. Thesubscription for the issuance was verified by Reanda CPAs Co., Ltd. through Reanda YanZi [2011]No. 1065. Immediately after this private offering, the share capital of the Company increased toCNY 251.8 million.In accordance with the resolution of the Company’s 2011 General Meeting, a bonus issue of 10shares for every 10 shares held at 31 December 2011 through utilisation of capital reserves wasexercised in 2012. 251.8 bonus shares were issued in total. Immediately after the exercise of thebonus issue, the Company’s share capital increased to CNY 503.6 million.Upon approval by the CSRC through ZhengJianXuKe [2021] 1422, the Company issued on 22 July2021 through private offering of 25 million A shares with the par value at CNY 1.00 to designatedinvestors. The shares were issued at CNY 200.00 per share. Gross proceeds from this issuance wasCNY 5,000 million and the respective net proceeds after deduction of the cost of issuance (CNY
45.66 million) was CNY 4,954.34 million. The subscription for the issuance was verified by RSMChina CPAs LLP through RSM Yan [2021] No. 518Z0050. Immediately after this private offering,the share capital of the Company increased to CNY 528.6 million.As of 31 December 2024, total number of the Company’s shares stood at 528.6 million. See Note
5.32 for further details.
The company's headquarters is located in Bozhou City, Anhui Province, Gujing town. Legal
~ 119 ~
representative of the company is Liang Jinhui.The company is mainly engaged in the production and sales of distilled wine, which belongs to thefood manufacturing industry.These financial statements are approved on 25 April 2025 by the Company’s Board of Directors forpublication.
2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS
2.1 Basis of Preparation
Based on going concern, according to actually occurred transactions and events, the Companyprepares its financial statements in accordance with the Accounting Standards for BusinessEnterprises – Basic standards and concrete accounting standards, Accounting Standards forBusiness Enterprises – Application Guidelines, Accounting Standards for Business Enterprises –Interpretations and other relevant provisions (collectively known as “Accounting Standards forBusiness Enterprises, issued by Ministry of Finance of PRC”). In addition, the Company disclosesthe relevant financial information in accordance with "Rules No.15 for the Information Disclosureand Reporting of Companies Offering Securities to the Public - General Requirements for FinancialReporting (2023 Revision)" issued by CSRC.
2.2 Going Concern
The Company has assessed its ability to continually operate for the next twelve months from theend of the reporting period, and no any matters that may result in doubt on its ability as a goingconcern were noted. Therefore, it is reasonable for the Company to prepare financial statements onthe going concern basis.
3. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATESThe following significant accounting policies and accounting estimates of the Company areformulated in accordance with the Accounting Standards for Business Enterprises. Businesses notmentioned are complied with relevant accounting policies of the Accounting Standards for BusinessEnterprises.
3.1 Statement of Compliance with the Accounting Standards for Business EnterprisesThe Company prepares its financial statements in accordance with the requirements of theAccounting Standards for Business Enterprises, truly and completely reflecting the Company’sfinancial position as at 31 December 2024, and its operating results, changes in shareholders' equity,cash flows and other related information for the year then ended.
~ 120 ~
3.2 Accounting Period
The accounting year of the Company is from 1 January to 31 December in calendar year.
3.3 Operating Cycle
The normal operating cycle of the Company is twelve months.
3.4 Functional Currency
The Company takes Renminbi Yuan (“RMB”) as the functional currency.The Company’s overseas subsidiaries choose the currency of the primary economic environment inwhich the subsidiaries operate as the functional currency.
3.5 Determining Factor and Basis of Selection of Materiality
| Item | Factor and basis of materiality |
| Significant write-off of other receivables | Amount greater than 5 million |
| Significant individual provision for bad debt of accounts receivable | Amount greater than 5 million |
| Significant other payables with aging of over one year | More than 0.03% of the total assets |
| Significant accounts payable with aging of over one year | More than 0.03% of the total assets |
| Significant non-wholly owned subsidiaries | Total assets, operating income, and net profit account for more than 5% of the corresponding items in the consolidated financial statements |
| Significant goodwill | Individual amount more than 50 million |
| Significant construction in progress | Individual amount more than 20 million |
3.6 Accounting Treatment of Business Combinations under and not under Common Control(a) Business combinations under common controlThe assets and liabilities that the Company obtains in a business combination under commoncontrol shall be measured at their carrying amount of the acquired entity at the combination date. Ifthe accounting policy and accounting period adopted by the acquired entity is different from thatadopted by the acquiring entity, the acquiring entity shall, according to accounting policy andaccounting period it adopts, adjust the relevant items in the financial statements of the acquiredparty based on the principal of materiality. As for the difference between the carrying amount of thenet assets obtained by the acquiring entity and the carrying amount of the consideration paid by it,the capital reserve (capital premium or share premium) shall be adjusted. If the capital reserve(capital premium or share premium) is not sufficient to absorb the difference, any excess shall beadjusted against retained earnings.
~ 121 ~
For the accounting treatment of business combination under common control by step acquisitions,please refer to Note 3.7 (6).(b) Business combinations not under common controlThe assets and liabilities that the Company obtains in a business combination not under commoncontrol shall be measured at their fair value at the acquisition date. If the accounting policy andaccounting period adopted by the acquired entity is different from that adopted by the acquiringentity, the acquiring entity shall, according to accounting policy and accounting period it adopts,adjust the relevant items in the financial statements of the acquired entity based on the principal ofmateriality. The acquiring entity shall recognise the positive balance between the combination costsand the fair value of the identifiable net assets it obtains from the acquired entity as goodwill. Theacquiring entity shall, pursuant to the following provisions, treat the negative balance between thecombination costs and the fair value of the identifiable net assets it obtains from the acquired entity:
(i) It shall review the measurement of the fair values of the identifiable assets, liabilities andcontingent liabilities it obtains from the acquired entity as well as the combination costs;(ii) If, after the review, the combination costs are still less than the fair value of the identifiable netassets it obtains from the acquired entity, the balance shall be recognised in profit or loss of thereporting period.For the accounting treatment of business combination under the same control by step acquisitions,please refer to Note 3.7 (6).(c) Treatment of business combination related costsThe intermediary costs such as audit, legal services and valuation consulting and other relatedmanagement costs that are directly attributable to the business combination shall be charged inprofit or loss in the period in which they are incurred. The costs to issue equity or debt securities forthe consideration of business combination shall be recorded as a part of the value of the respectequity or debt securities upon initial recognition.
3.7 Judgment of Control and Method of Preparing the Consolidated Financial Statements(a) Judgment of control and consolidation decisionControl exists when the Company has power over the investee, exposure, or rights, to variablereturns from its involvement with the investee and the ability to use its power over the investee toaffect the amount of the returns. The definition of control contains there elements: - power over theinvestee; exposure, or rights to variable returns from the Company’s involvement with the investee;and the ability to use its power over the investee to affect the amount of the investor’s returns. TheCompany controls an investee if and only if the Company has all the above three elements.The scope of consolidated financial statements shall be determined on the basis of control. It not
~ 122 ~
only includes subsidiaries determined based on voting rights (or similar) or together with otherarrangement, but also structured entities under one or more contractual arrangements.Subsidiaries are the entities that controlled by the Company (including enterprise, a divisible part ofthe investee, and structured entity controlled by the enterprise). A structured entity (sometimescalled a Special Purpose Entity) is an entity that has been designed so that voting or similar rightsare not the dominant factor in deciding who controls the entity.(b) Special requirement as the parent company is an investment entityIf the parent company is an investment entity, it should measure its investments in particularsubsidiaries as financial assets at fair value through profit or loss instead of consolidating thosesubsidiaries in its consolidated and separate financial statements. However, as an exception to thisrequirement, if a subsidiary provides investment-related services or activities to the investmententity, it should be consolidated.The parent company is defined as investment entity when meets following conditions:
(i) Obtains funds from one or more investors for the purpose of providing those investors withinvestment management services;(ii) Commits to its investors that its business purpose is to invest funds solely for returns fromcapital appreciation, investment income or both; and(iii) Measures and evaluates the performance of substantially all of its investments on a fair valuebasis.If the parent company becomes an investment entity, it shall cease to consolidate its subsidiaries atthe date of the change in status, except for any subsidiary which provides investment-relatedservices or activities to the investment entity shall be continued to be consolidated. Thedeconsolidation of subsidiaries is accounted for as though the investment entity partially disposedsubsidiaries without loss of control.When the parent company previously classified as an investment entity ceases to be an investmententity, subsidiary that was previously measured at fair value through profit or loss shall be includedin the scope of consolidated financial statements at the date of the change in status. The fair value ofthe subsidiary at the date of change represents the transferred deemed consideration in accordancewith the accounting for business combination not under common control.(c) Method of preparing the consolidated financial statementsThe consolidated financial statements shall be prepared by the Company based on the financialstatements of the Company and its subsidiaries, and using other related information.When preparing consolidated financial statements, the Company shall consider the entire group asan accounting entity, adopt uniform accounting policies and apply the requirements of Accounting
~ 123 ~
Standard for Business Enterprises related to recognition, measurement and presentation. Theconsolidated financial statements shall reflect the overall financial position, operating results andcash flows of the group.(i) Like items of assets, liabilities, equity, income, expenses and cash flows of the parent arecombined with those of the subsidiaries.(ii) The carrying amount of the parent’s investment in each subsidiary is eliminated (off-set) againstthe parent’s portion of equity of each subsidiary.(iii) Eliminate the impact of intragroup transactions between the Company and the subsidiaries orbetween subsidiaries, and when intragroup transactions indicate an impairment of related assets, thelosses shall be recognised in full.(iv) Make adjustments to special transactions from the perspective of the group.(d) Method of preparation of the consolidated financial statements when subsidiaries areacquired or disposed in the reporting period(i) Acquisition of subsidiaries or businessSubsidiaries or business acquired through business combination under common controlWhen preparing consolidated statements of financial position, the opening balance of theconsolidated balance sheet shall be adjusted. Related items of comparative financial statementsshall be adjusted as well, deeming that the combined entity has always existed ever since theultimate controlling party began to control.Incomes, expenses and profits of the subsidiary incurred from the beginning of the reporting periodto the end of the reporting period shall be included into the consolidated statement of profit or loss.Related items of comparative financial statements shall be adjusted as well, deeming that thecombined entity has always existed ever since the ultimate controlling party began to control.Cash flows from the beginning of the reporting period to the end of the reporting period shall beincluded into the consolidated statement of cash flows. Related items of comparative financialstatements shall be adjusted as well, deeming that the combined entity has always existed ever sincethe ultimate controlling party began to control.Subsidiaries or business acquired through business combination not under common controlWhen preparing the consolidated statements of financial position, the opening balance of theconsolidated statements of financial position shall not be adjusted.Incomes, expenses and profits of the subsidiary incurred from the acquisition date to the end of thereporting period shall be included into the consolidated statement of profit or loss.Cash flows from the acquisition date to the end of the reporting period shall be included into theconsolidated statement of cash flows.
~ 124 ~
(ii) Disposal of subsidiaries or businessWhen preparing the consolidated statements of financial position, the opening balance of theconsolidated statements of financial position shall not be adjusted.Incomes, expenses and profits incurred from the beginning of the subsidiary to the disposal dateshall be included into the consolidated statement of profit or loss.Cash flows from the beginning of the subsidiary to the disposal date shall be included into theconsolidated statement of cash flows.(e) Special consideration in consolidation elimination(i) Long-term equity investment held by the subsidiaries to the Company shall be recognised astreasury stock of the Company, which is offset with the owner’s equity, represented as “treasurystock” under “owner’s equity” in the consolidated statement of financial position.Long-term equity investment held by subsidiaries between each other is accounted for takinglong-term equity investment held by the Company to its subsidiaries as reference. That is, thelong-term equity investment is eliminated (off-set) against the portion of the correspondingsubsidiary’s equity.(ii) Due to not belonging to paid-in capital (or share capital) and capital reserve, and being differentfrom retained earnings and undistributed profit, “Specific reserves” and “General risk provision”shall be recovered based on the proportion attributable to owners of the parent company afterlong-term equity investment to the subsidiaries is eliminated with the subsidiaries’ equity.(iii) If temporary timing difference between the book value of the assets and liabilities in theconsolidated statement of financial position and their tax basis is generated as a result of eliminationof unrealized inter-company transaction profit or loss, deferred tax assets of deferred tax liabilitiesshall be recognised, and income tax expense in the consolidated statement of profit or loss shall beadjusted simultaneously, excluding deferred taxes related to transactions or events directlyrecognised in owner’s equity or business combination.(iv) Unrealised inter-company transactions profit or loss generated from the Company selling assetsto its subsidiaries shall be eliminated against “net profit attributed to the owners of the parentcompany” in full. Unrealized inter-company transactions profit or loss generated from thesubsidiaries selling assets to the Company shall be eliminated between “net profit attributed to theowners of the parent company” and “non-controlling interests” pursuant to the proportion of theCompany in the related subsidiaries. Unrealized inter-company transactions profit or loss generatedfrom the assets sales between the subsidiaries shall be eliminated between “net profit attributed tothe owners of the parent company” and “non-controlling interests” pursuant to the proportion of theCompany in the selling subsidiaries.(v) If loss attributed to the minority shareholders of a subsidiary in current period is more than the
~ 125 ~
proportion of non-controlling interest in this subsidiary at the beginning of the period,non-controlling interest is still to be written down.(f) Accounting for Special Transactions(i) Purchasing of non-controlling interestsWhere, the Company purchases non-controlling interests of its subsidiary, in the separate financialstatements of the Company, the cost of the long-term equity investment obtained in purchasingnon-controlling interests is measured at the fair value of the consideration paid. In the consolidatedfinancial statements, difference between the cost of the long-term equity investment newly obtainedin purchasing non-controlling interests and share of the subsidiary’s net assets from the acquisitiondate or combination date continuingly calculated pursuant to the newly acquired shareholdingproportion shall be adjusted into capital reserve (capital premium or share premium). If capitalreserve is not enough to be offset, surplus reserve and undistributed profit shall be offset in turn.(ii) Gaining control over the subsidiary in stages through multiple transactionsBusiness combination under common control in stages through multiple transactionsOn the combination date, in the separate financial statement, initial cost of the long-term equityinvestment is determined according to the share of carrying amount of the acquiree’s net assets inthe ultimate controlling entity’s consolidated financial statements after combination. The differencebetween the initial cost of the long-term equity investment and the carrying amount of the long-term investment held prior of control plus book value of additional consideration paid atacquisition date is adjusted into capital reserve (capital premium or share premium). If the capitalreserve is not enough to absorb the difference, any excess shall be adjusted against surplus reserveand undistributed profit in turn.In the consolidated financial statements, the assets and liabilities acquired during the combinationshould be recognized at their carrying amount in the ultimate controlling entity’s consolidatedfinancial statements on the combination date unless any adjustment is resulted from the differencein accounting policies and accounting period. The difference between the carrying amount of theinvestment held prior of control plus book value of additional consideration paid on the acquisitiondate and the net assets acquired through the combination is adjusted into capital reserve (capitalpremium or share premium). If the capital reserve is not enough to absorb the difference, any excessshall be adjusted against retained earnings.If the acquiring entity holds equity investment in the acquired entity prior to the combination date,related profit or loss, other comprehensive income and other changes in equity which have beenrecognised during the period from the later of the date of the Company obtaining original equityinterest and the date of both the acquirer and the acquiree under common control of the sameultimate controlling party to the combination date should be offset against the opening balance of
~ 126 ~
retained earnings at the comparative financial statements period respectively or the profit or loss forthe current period.Business combination not under common control in stages through multiple transactionsOn the consolidation date, in the separate financial statements, the initial cost of long-term equityinvestment is determined according to the carrying amount of the original long-term investmentplus the cost of new investment.In the consolidated financial statements, the equity interest of the acquired entity held prior to theacquisition date shall be re-measured at its fair value on the acquisition date. If the equity interest inthe acquired entity held prior to the acquisition date is designated as a financial asset measured atfair value with changes recognised in other comprehensive income, the difference between the fairvalue and the carrying amount shall be recognised in retained earnings, and the cumulative fairvalue changes previously recognised in other comprehensive income shall be transferred to retainedearnings. If the equity interest in the acquired entity held prior to the acquisition date is measured atfair value with changes recognised in profit or loss or accounted for as a long-term equityinvestment using the equity method, the difference between the fair value and the carrying amountshall be recognised in investment income for the current period. For equity interests held in theacquired entity prior to the acquisition date that are accounted for under the equity method andinvolve other comprehensive income, as well as other changes in the owner's equity (excluding netprofit or loss, other comprehensive income, and profit distributions), the related othercomprehensive income shall be accounted for on the acquisition date using the same basis as if theinvestee had directly disposed of the related assets or liabilities. The related changes in otherowner's equity shall be reclassified to investment income for the period in which the acquisitiondate falls..(iii) Disposal of investment in subsidiaries without a loss of controlFor partial disposal of the long-term equity investment in the subsidiaries without a loss of control,when the Company prepares consolidated financial statements, difference between considerationreceived from the disposal and the corresponding share of subsidiary’s net assets cumulativelycalculated from the acquisition date or combination date shall be adjusted into capital reserve(capital premium or share premium). If the capital reserve is not enough to absorb the difference,any excess shall be offset against retained earnings.(iv) Disposal of investment in subsidiaries with a loss of controlDisposal through one transactionIf the Company loses control in an investee through partial disposal of the equity investment, whenthe consolidated financial statements are prepared, the retained equity interest should bere-measured at fair value at the date of loss of control. The difference between i) the sum of the
~ 127 ~
consideration received from the disposal and the fair value of the remaining equity interest, and ii)the sum of the share of the net assets of the former subsidiary ( calculated on a cumulative basisfrom the acquisition date or combination date in accordance with the original ownership percentage)and the related goodwill, shall be recognised in investment income for the period in which control islost.Moreover, other comprehensive income related to the equity investment in the former subsidiaryshall be accounted for on the same basis as if the former subsidiary had directly disposed of therelevant assets or liabilities upon the loss of control. Other changes in owners’ equity related to theformer subsidiary that were recognised under the equity method shall be reclassified to profit or lossupon the loss of control.Disposal in stagesIn the consolidated financial statements, whether the transactions should be accounted for as “asingle transaction” needs to be decided firstly.If the disposal in stages should not be classified as “a single transaction”, in the separate financialstatements, for transactions prior of the date of loss of control, carrying amount of each disposal oflong-term equity investment need to be recognized, and the difference between considerationreceived and the carrying amount of long-term equity investment corresponding to the equityinterest disposed should be recognized in current investment income; in the consolidated financialstatements, the disposal transaction should be accounted for according to related policy in “Disposalof long-term equity investment in subsidiaries without a loss of control”.If the disposal in stages should be classified as “a single transaction”, these transactions should beaccounted for as a single transaction of disposal of subsidiary resulting in loss of control. In theseparate financial statements, for each transaction prior of the date of loss of control, differencebetween consideration received and the carrying amount of long-term equity investmentcorresponding to the equity interest disposed should be recognised as other comprehensive incomefirstly, and transferred to profit or loss as a whole when control is lost; in the consolidated financialstatements, for each transaction prior of the date of loss of control, difference between considerationreceived and proportion of the subsidiary’s net assets corresponding to the equity interest disposedshould be recognised in profit or loss as a whole when control is lost.In considering of the terms and conditions of the transactions as well as their economic impact, thepresence of one or more of the following indicators may lead to account for multiple transactions asa single transaction:
? The transactions are entered into simultaneously or in contemplation of one another.? The transactions form a single transaction designed to achieve an overall commercial effect.
~ 128 ~
? The occurrence of one transaction depends on the occurrence of at least one other transaction.? One transaction, when considered on its own merits, does not make economic sense, but when considered
together with the other transaction or transactions would be considered economically justifiable.(v) Diluting equity share of parent company in its subsidiaries due to additional capital
injection by the subsidiaries’ minority shareholders.Other shareholders (minority shareholders) of the subsidiaries inject additional capital in thesubsidiaries, which resulted in the dilution of equity interest of parent company in these subsidiaries.In the consolidated financial statements, difference between share of the corresponding subsidiaries’net assets calculated based on the parent’s equity interest before and after the capital injection shallbe adjusted into capital reserve (capital premium or share premium). If the capital reserve is notenough to absorb the difference, any excess shall be adjusted against retained earnings.
3.8 Classification of Joint Arrangements and Accounting for Joint OperationA joint arrangement is an arrangement of which two or more parties have joint control. Jointarrangement of the Company is classified as either a joint operation or a joint venture.(a) Joint operationA joint operation is a joint arrangement whereby the parties that have joint control of thearrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement.The Company shall recognise the following items in relation to shared interest in a joint operation,and account for them in accordance with relevant accounting standards of the Accounting Standardsfor Business Enterprises:
(i) its assets, including its share of any assets held jointly;(ii) its liabilities, including its share of any liabilities incurred jointly;(iii) its revenue from the sale of its share of the output arising from the joint operation;(iv) its share of the revenue from the sale of the output by the joint operation; and(v) its expenses, including its share of any expenses incurred jointly.(b) Joint ventureA joint venture is a joint arrangement whereby the parties that have joint control of the arrangementhave rights to the net assets of the arrangement.The Company accounts for its investment in the joint venture by applying the equity method oflong-term equity investment.
3.9 Cash and Cash Equivalents
~ 129 ~
Cash comprises cash on hand and deposits that can be readily withdrawn on demand. Cashequivalents include short-term (generally within three months of maturity at acquisition), highlyliquid investments that are readily convertible into known amounts of cash and which are subject toan insignificant risk of changes in value.
3.10 Financial Instruments
Financial instrument is any contract which gives rise to both a financial asset of one entity and afinancial liability or equity instrument of another entity.(a) Recognition and derecognition of financial instrumentA financial asset or a financial liability should be recognised in the statement of financial positionwhen, and only when, an entity becomes party to the contractual provisions of the instrument.A financial asset can only be derecognised when meets one of the following conditions:
(i) The rights to the contractual cash flows from a financial asset expire(ii) The financial asset has been transferred and meets one of the following derecognitionconditions:
Financial liabilities (or part thereof) are derecognised only when the liability is extinguished—i.e.,when the obligation specified in the contract is discharged or cancelled or expires. An exchange ofthe Company (borrower) and lender of debt instruments that carry significantly different terms or asubstantial modification of the terms of an existing liability are both accounted for as anextinguishment of the original financial liability and the recognition of a new financial liability.Purchase or sale of financial assets in a regular-way shall be recognised and derecognised usingtrade date accounting. A regular-way purchase or sale of financial assets is a transaction under acontract whose terms require delivery of the asset within the time frame established generally byregulations or convention in the market place concerned. Trade date is the date at which the entitycommits itself to purchase or sell an asset.(b) Classification and measurement of financial assetsAt initial recognition, the Company classified its financial asset based on both the business modelfor managing the financial asset and the contractual cash flow characteristics of the financial asset:
financial asset at amortised cost, financial asset at fair value through profit or loss (FVTPL) andfinancial asset at fair value through other comprehensive income (FVTOCI). Reclassification offinancial assets is permitted if, and only if, the objective of the entity’s business model formanaging those financial assets changes. In this circumstance, all affected financial assets shall bereclassified on the first day of the first reporting period after the changes in business model;otherwise the financial assets cannot be reclassified after initial recognition.
~ 130 ~
Financial assets shall be measured at initial recognition at fair value. For financial assets measuredat FVTPL, transaction costs are recognised in current profit or loss. For financial assets notmeasured at FVTPL, transaction costs should be included in the initial measurement. Notesreceivable or accounts receivable that arise from sales of goods or rendering of services are initiallymeasured at the transaction price defined in the accounting standard of revenue where thetransaction does not include a significant financing component.Subsequent measurement of financial assets will be based on their categories:
(i)Financial asset at amortised costThe financial asset at amortised cost category of classification applies when both the followingconditions are met: the financial asset is held within the business model whose objective is to holdfinancial assets in order to collect contractual cash flows, and the contractual term of the financialasset gives rise on specified dates to cash flows that are solely payment of principal and interest onthe principal amount outstanding. These financial assets are subsequently measured at amortisedcost by adopting the effective interest rate method. Any gain or loss arising from derecognitionaccording to the amortisation under effective interest rate method or impairment are recognised incurrent profit or loss.(ii)Financial asset at fair value through other comprehensive income (FVTOCI)The financial asset at FVTOCI category of classification applies when both the followingconditions are met: the financial asset is held within the business model whose objective is achievedby both collecting contractual cash flows and selling financial assets, and the contractual term of thefinancial asset gives rise on specified dates to cash flows that are solely payment of principle andinterest on the principal amount outstanding. All changes in fair value are recognised in othercomprehensive income except for gain or loss arising from impairment or exchange differences,which should be recognised in current profit or loss. At derecognition, cumulative gain or losspreviously recognised under OCI is reclassified to current profit or loss. However, interest incomecalculated based on the effective interest rate is included in current profit or loss.The Company make an irrevocable decision to designate part of non-trading equity instrumentinvestments as measured through FVTOCI. All changes in fair value are recognised in othercomprehensive income except for dividend income recognised in current profit or loss. Atderecognition, cumulative gain or loss are reclassified to retained earnings.(iii)Financial asset at fair value through profit or loss (FVTPL)Financial asset except for above mentioned financial asset at amortised cost or financial asset at fairvalue through other comprehensive income (FVTOCI), should be classified as financial asset at fairvalue through profit or loss (FVTPL). These financial assets should be subsequently measured atfair value. All the changes in fair value are included in current profit or loss.
~ 131 ~
(c) Classification and measurement of financial liabilitiesThe Company classified the financial liabilities as financial liabilities at fair value through profit orloss (FVTPL), loan commitments at a below-market interest rate and financial guarantee contractsand financial asset at amortised cost.Subsequent measurement of financial assets will be based on the classification:
(i)Financial liabilities at fair value through profit or loss (FVTPL)Held-for-trading financial liabilities (including derivatives that are financial liabilities) and financialliabilities designated at FVTPL are classified as financial liabilities at FVTP. After initialrecognition, any gain or loss (including interest expense) are recognised in current profit or lossexcept for those hedge accounting is applied. For financial liability that is designated as at FVTPL,changes in the fair value of the financial liability that is attributable to changes in the own credit riskof the issuer shall be presented in other comprehensive income. At derecognition, cumulative gainor loss previously recognised under OCI is reclassified to retained earnings.(ii)Loan commitments and financial guarantee contractsLoan commitment is a commitment by the Company to provide a loan to customer under specifiedcontract terms. The provision of impairment losses of loan commitments shall be recognised basedon expected credit losses model.Financial guarantee contract is a contract that requires the Company to make specified payments toreimburse the holder for a loss it incurs because a specified debtor fails to make payment when duein accordance with the original or modified terms of a debt instrument. Financial guaranteecontracts liability shall be subsequently measured at the higher of: The amount of the lossallowance recognised according to the impairment principles of financial instruments; and theamount initially recognised less the cumulative amount of income recognised in accordance withthe revenue principles.(iii)Financial liabilities at amortised costAfter initial recognition, the Company measured other financial liabilities at amortised cost usingthe effective interest method.Except for special situation, financial liabilities and equity instrument should be classified inaccordance with the following principles:
(i) If the Company has no unconditional right to avoid delivering cash or another financial
instrument to fulfill a contractual obligation, this contractual obligation meet the definition of
financial liabilities. Some financial instruments do not comprise terms and conditions related
to obligations of delivering cash or another financial instrument explicitly, they may include
contractual obligation indirectly through other terms and conditions.
~ 132 ~
(ii) If a financial instrument must or may be settled in the Company's own equity instruments, itshould be considered that the Company’s own equity instruments are alternatives of cash or anotherfinancial instrument, or to entitle the holder of the equity instruments to sharing the remaining rightsover the net assets of the issuer. If the former is the case, the instrument is a liability of the issuer;otherwise, it is an equity instrument of the issuer. Under some circumstances, it is regulated in thecontract that the financial instrument must or may be settled in the Company's own equityinstruments, where, amount of contractual rights and obligations are calculated by multiplying thenumber of the equity instruments to be available or delivered by its fair value upon settlement. Suchcontracts shall be classified as financial liabilities, regardless that the amount of contractual rightsand liabilities is fixed, or fluctuate totally or partially with variables other than market price of theentity’s own equity instruments (such as interest rate, price of some kind of goods or some kind offinancial instrument).(d) Derivatives and embedded derivativesAt initial recognition, derivatives shall be measured at fair value at the date of derivative contractsare signed and subsequently measured at fair value. The derivative with a positive fair value shall berecognized as an asset, and with a negative fair value shall be recognised as a liability.Gains or losses arising from the changes in fair value of derivatives shall be recognised directly intocurrent profit or loss except for the effective portion of cash flow hedges which shall be recognisedin other comprehensive income and reclassified into current profit or loss when the hedged itemsaffect profit or loss.An embedded derivative is a component of a hybrid contract with a financial asset as a host, theCompany shall apply the requirements of financial asset classification to the entire hybrid contract.If a host that is not a financial asset and the hybrid contract is not measured at fair value withchanges in fair value recognised in profit or loss, and the economic characteristics and risks of theembedded derivative are not closely related to the economic characteristics and risks of the host,and a separate instrument with the same terms as the embedded derivative would meet thedefinition of a derivative, the embedded derivative shall be separated from the hybrid instrumentand accounted for as a separate derivative instrument. If the Company is unable to measure the fairvalue of the embedded derivative at the acquisition date or subsequently at the balance sheet date,the entire hybrid contract is designated as financial assets or financial liabilities at fair value throughprofit or loss.(e) Impairment of financial instrumentThe Company shall recognise a loss allowance based on expected credit losses on a financial assetthat is measured at amortised cost, a debt investment at fair value through other comprehensiveincome, a contract asset, a lease receivable, a loan commitment and a financial guarantee contract.(i) Measurement of expected credit losses
~ 133 ~
Expected credit losses are the weighted average of credit losses of the financial instruments with therespective risks of a default occurring as the weights. Credit loss is the difference between allcontractual cash flows that are due to the Company in accordance with the contract and all the cashflows that the Company expects to receive (ie all cash shortfalls), discounted at the originaleffective interest rate or credit- adjusted effective interest rate for purchased or originatedcredit-impaired financial assets.Lifetime expected credit losses are the expected credit losses that result from all possible defaultevents over the expected life of a financial instrument.12-month expected credit losses are the portion of lifetime expected credit losses that represent theexpected credit losses that result from default events on a financial instrument that are possiblewithin the 12 months after the reporting date (or the expected lifetime, if the expected life of afinancial instrument is less than 12 months).At each reporting date, the Company classifies financial instruments into three stages and makesprovisions for expected credit losses accordingly. A financial instrument of which the credit risk hasnot significantly increased since initial recognition is at stage 1. The Company shall measure theloss allowance for that financial instrument at an amount equal to 12-month expected credit losses.A financial instrument with a significant increase in credit risk since initial recognition but is notconsidered to be credit-impaired is at stage 2. The Company shall measure the loss allowance forthat financial instrument at an amount equal to the lifetime expected credit losses. A financialinstrument is considered to be credit-impaired as at the end of the reporting period is at stage 3. TheCompany shall measure the loss allowance for that financial instrument at an amount equal to thelifetime expected credit losses.The Company may assume that the credit risk on a financial instrument has not increasedsignificantly since initial recognition if the financial instrument is determined to have low credit riskat the reporting date and measure the loss allowance for that financial instrument at an amount equalto 12-month expected credit losses.For financial instrument at stage 1, stage 2 and those have low credit risk, the interest revenue shallbe calculated by applying the effective interest rate to the gross carrying amount of a financial asset(ie, impairment loss not been deducted). For financial instrument at stage 3, interest revenue shallbe calculated by applying the effective interest rate to the amortised cost after deducting ofimpairment loss.For notes receivable, accounts receivable and accounts receivable financing, no matter it contains asignificant financing component or not, the Company shall measure the loss allowance at an amountequal to the lifetime expected credit losses.Receivables/Contract assetsFor the notes receivable, accounts receivable, other receivables, accounts receivable financing and
~ 134 ~
long-term receivables which are demonstrated to be impaired by any objective evidence, orapplicable for individual assessment, the Company shall individually assess for impairment andrecognise the loss allowance for expected credit losses. If the Company determines that no objectiveevidence of impairment exists for notes receivable, accounts receivable, other receivables, accountsreceivable financing and long-term receivables, or the expected credit loss of a single financial assetcannot be assessed at reasonable cost, such notes receivable, accounts receivable, other receivables,accounts receivable financing and long-term receivables shall be divided into several groups withsimilar credit risk characteristics and collectively calculated the expected credit loss. Thedetermination basis of groups is as following:
Determination basis of notes receivable is as following:
Group 1: Commercial acceptance billsGroup 2: Bank acceptance billsFor each group, the Company calculates expected credit losses through default exposure and thelifetime expected credit losses rate, taking reference to historical experience for credit losses andconsidering current condition and expectation for the future economic situation.Determination basis of accounts receivable is as following:
Group 1: Related parties within the scope of consolidationGroup 2: Receivables due from third partiesFor each group, the Company calculates expected credit losses through preparing an aging analysisschedule with the lifetime expected credit losses rate, taking reference to historical experience forcredit losses and considering current condition and expectation for the future economic situation.Determination basis of other receivables is as following:
Group 1: Related parties within the scope of consolidationGroup 2: Receivables due from third partiesFor each group, the Company calculates expected credit losses through default exposure and the12-months or lifetime expected credit losses rate, taking reference to historical experience for creditlosses and considering current condition and expectation for the future economic situation.Determination basis of accounts receivable financing is as following:
Group 1: Commercial acceptance billsGroup 2: Bank acceptance billsFor each group, the Company calculates expected credit losses through default exposure and thelifetime expected credit losses rate, taking reference to historical experience for credit losses andconsidering current condition and expectation for the future economic situation.
~ 135 ~
Determination basis of contract assets is as following:
Group 1: Project constructionGroup 2: Undue warrantyFor each group, the Company calculates expected credit losses through default exposure and thelifetime expected credit losses rate, taking reference to historical experience for credit losses andconsidering current condition and expectation for the future economic situation.Determination basis of long-term receivables financing is as following:
Group 1: Project receivables, Lease receivablesGroup 2: OthersFor group 1, the Company calculates expected credit losses through default exposure and thelifetime expected credit losses rate, taking reference to historical experience for credit losses andconsidering current condition and expectation for the future economic situation.For group 2, the Company calculates expected credit losses through default exposure and the12-months or lifetime expected credit losses rate, taking reference to historical experience for creditlosses and considering current condition and expectation for the future economic situation.The Company's aging calculation method of credit risk characteristic combination based on aging isas follows:
| Aging | Accounts receivable Provision ratio | Other receivables provision ratio |
| Within 6 months | 1% | 1% |
| 7 months to 1 years | 5% | 5% |
| 1-2 years | 10% | 10% |
| 2-3 years | 50% | 50% |
| Over 3 years | 100% | 100% |
Debt investment and other debt investmentFor debt investment and other debt investment, the Company shall calculate the expected credit lossthrough the default exposure and the 12-month or lifetime expected credit loss rate based on thenature of the investment, counterparty and the type of risk exposure.(ii) Low credit riskIf the financial instrument has a low risk of default, the borrower has a strong capacity to meet itscontractual cash flow obligations in the near term and adverse changes in economic and businessconditions in the longer term may, but will not necessarily, reduce the ability of the borrower tofulfill its contractual cash flow obligations.(iii) Significant increase in credit risk
~ 136 ~
The Company shall assess whether the credit risk on a financial instrument has increasedsignificantly since initial recognition, using the change in the risk of a default occurring over theexpected life of the financial instrument, through the comparison of the risk of a default occurringon the financial instrument as at the reporting date with the risk of a default occurring on thefinancial instrument as at the date of initial recognition.To make that assessment, the Company shall consider reasonable and supportable information, thatis available without undue cost or effort, and that is indicative of significant increases in credit risksince initial recognition, including forward-looking information. The information considered by theCompany are as following:
? Significant changes in internal price indicators of credit risk as a result of a change in credit risk sinceinception? Existing or forecast adverse change in the business, financial or economic conditions of the borrower thatresults in a significant change in the borrower’s ability to meet its debt obligations；? An actual or expected significant change in the operating results of the borrower; An actual or expected
significant adverse change in the regulatory, economic, or technological environment of the borrower；? Significant changes in the value of the collateral supporting the obligation or in the quality of third-partyguarantees or credit enhancements, which are expected to reduce the borrower’s economic incentive to makescheduled contractual payments or to otherwise influence the probability of a default occurring;? Significant change that are expected to reduce the borrower’s economic incentive to make scheduledcontractual payments;? Expected changes in the loan documentation including an expected breach of contract that may lead tocovenant waivers or amendments, interest payment holidays, interest rate step-ups, requiring additionalcollateral or guarantees, or other changes to the contractual framework of the instrument；? Significant changes in the expected performance and behavior of the borrower；? Contractual payments are more than 30 days past due.
Depending on the nature of the financial instruments, the Company shall assess whether the creditrisk has increased significantly since initial recognition on an individual financial instrument or agroup of financial instruments. When assessed based on a group of financial instruments, theCompany can group financial instruments on the basis of shared credit risk characteristics, forexample, past due information and credit risk rating.Generally, the Company shall determine the credit risk on a financial asset has increasedsignificantly since initial recognition when contractual payments are more than 30 days past due.The Company can only rebut this presumption if the Company has reasonable and supportableinformation that is available without undue cost or effort, that demonstrates that the credit risk has
~ 137 ~
not increased significantly since initial recognition even though the contractual payments are morethan 30 days past due.(iv) Credit-impaired financial assetThe Company shall assess at each reporting date whether the credit impairment has occurred forfinancial asset at amortised cost and debt investment at fair value through other comprehensiveincome. A financial asset is credit-impaired when one or more events that have a detrimental impacton the estimated future cash flows of that financial asset have occurred. Evidences that a financialasset is credit-impaired include observable data about the following events:
Significant financial difficulty of the issuer or the borrower；a breach of contract, such as a defaultor past due event; the lender(s) of the borrower, for economic or contractual reasons relating to theborrower’s financial difficulty, having granted to the borrower a concession(s) that the lender(s)would not otherwise consider；it is becoming probable that the borrower will enter bankruptcy orother financial reorganisation;the disappearance of an active market for that financial asset becauseof financial difficulties；the purchase or origination of a financial asset at a deep discount thatreflects the incurred credit losses.(v) Presentation of impairment of expected credit lossIn order to reflect the changes of credit risk of financial instrument since initial recognition, theCompany shall at each reporting date remeasure the expected credit loss and recognise in profit orloss, as an impairment gain or loss, the amount of expected credit losses addition (or reversal). Forfinancial asset at amortised cost, the loss allowance shall reduce the carrying amount of the financialasset in the statement of financial position; for debt investment at fair value through othercomprehensive income, the loss allowance shall be recognised in other comprehensive income andshall not reduce the carrying amount of the financial asset in the statement of financial position.(vi) Write-offThe Company shall directly reduce the gross carrying amount of a financial asset when theCompany has no reasonable expectations of recovering the contractual cash flow of a financial assetin its entirety or a portion thereof. Such write-off constitutes a derecognition of the financial asset.This circumstance usually occurs when the Company determines that the debtor has no assets orsources of income that could generate sufficient cash flow to repay the write-off amount.Recovery of financial asset written off shall be recognised in profit or loss as reversal of impairmentloss.(f) Transfer of financial assetsTransfer of financial assets refers to following two situations:
? Transfers the contractual rights to receive the cash flows of the financial asset;
~ 138 ~
? Transfers the entire or a part of a financial asset and retains the contractual rights to receive the cash flows ofthe financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients.(i) Derecognition of transferred assetsIf the Company transfers substantially all the risks and rewards of ownership of the financial asset,or neither transfers nor retains substantially all the risks and rewards of ownership of the financialasset but has not retained control of the financial asset, the financial asset shall be derecognised.Whether the Company has retained control of the transferred asset depends on the transferee’sability to sell the asset. If the transferee has the practical ability to sell the asset in its entirety to anunrelated third party and is able to exercise that ability unilaterally and without needing to imposeadditional restrictions on the transfer, the Company has not retained control.The Company judges whether the transfer of financial asset qualifies for derecognition based on thesubstance of the transfer.If the transfer of financial asset qualifies for derecognition in its entirety, the difference between thefollowing shall be recognised in profit or loss:
? The carrying amount of transferred financial asset;? The sum of consideration received and the part derecognised of the cumulative changes in fair valuepreviously recognised in other comprehensive income (The financial assets involved in the transfer areclassified as financial assets at fair value through other comprehensive income in accordance with Article 18of the Accounting Standards for Business Enterprises - Recognition and Measurement of FinancialInstruments).If the transferred asset is a part of a larger financial asset and the part transferred qualifies forderecognition, the previous carrying amount of the larger financial asset shall be allocated betweenthe part that continues to be recognised (For this purpose, a retained servicing asset shall be treatedas a part that continues to be recognised) and the part that is derecognised, based on the relative fairvalues of those parts on the date of the transfer. The difference between following two amounts shallbe recognised in profit or loss:
? The carrying amount (measured at the date of derecognition) allocated to the part derecognised；? The sum of the consideration received for the part derecognised and part derecognised of the cumulative
changes in fair value previously recognised in other comprehensive income (The financial assets involved inthe transfer are classified as financial assets at fair value through other comprehensive income in accordancewith Article 18 of the Accounting Standards for Business Enterprises - Recognition and Measurement ofFinancial Instruments).(ii) Continuing involvement in transferred assetsIf the Company neither transfers nor retains substantially all the risks and rewards of ownership of a
~ 139 ~
transferred asset, and retains control of the transferred asset, the Company shall continue torecognise the transferred asset to the extent of its continuing involvement and also recognise anassociated liability.The extent of the Company’s continuing involvement in the transferred asset is the extent to whichit is exposed to changes in the value of the transferred asset(iii) Continue to recognise the transferred assetsIf the Company retains substantially all the risks and rewards of ownership of the transferredfinancial asset, the Company shall continue to recognise the transferred asset in its entirety and theconsideration received shall be recognised as a financial liability.The financial asset and the associated financial liability shall not be offset. In subsequentaccounting period, the Company shall continuously recognise any income (gain) arising from thetransferred asset and any expense (loss) incurred on the associated liability.(g) Offsetting financial assets and financial liabilitiesFinancial assets and financial liabilities shall be presented separately in the statement of financialposition and shall not be offset. When meets the following conditions, financial assets and financialliabilities shall be offset and the net amount presented in the statement of financial position:
The Company currently has a legally enforceable right to set off the recognised amounts; TheCompany intends either to settle on a net basis, or to realise the asset and settle the liabilitysimultaneously.In accounting for a transfer of a financial asset that does not qualify for derecognition, the Companyshall not offset the transferred asset and the associated liability.(h) Determination of fair value of financial instrumentsDetermination of fair value of financial assets and financial liabilities please refer to Note 3.11.
3.11 Fair Value Measurement
Fair value refers to the price that would be received to sell an asset or paid to transfer a liability inan orderly transaction between market participants at the measurement date.The Company determines fair value of the related assets and liabilities based on market value in theprincipal market, or in the absence of a principal market, in the most advantageous market price forthe related asset or liability. The fair value of an asset or a liability is measured using theassumptions that market participants would use when pricing the asset or liability, assuming thatmarket participants act in their economic best interest.The principal market is the market in which transactions for an asset or liability take place with thegreatest volume and frequency. The most advantageous market is the market which maximizes the
~ 140 ~
value that could be received from selling the asset and minimizes the value which is needed to bepaid in order to transfer a liability, considering the effect of transport costs and transaction costsboth.If the active market of the financial asset or financial liability exists, the Company shall measure thefair value using the quoted price in the active market. If the active market of the financialinstrument is not available, the Company shall measure the fair value using valuation techniques.A fair value measurement of a non-financial asset takes into account a market participant’s abilityto generate economic benefits by using the asset in its highest and best use or by selling it to anothermarket participant that would use the asset in its highest and best use.(i) Valuation techniquesThe Company uses valuation techniques that are appropriate in the circumstances and for whichsufficient data are available to measure fair value, including the market approach, the incomeapproach and the cost approach. The Company shall use valuation techniques consistent with one ormore of those approaches to measure fair value. If multiple valuation techniques are used tomeasure fair value, the results shall be evaluated considering the reasonableness of the range ofvalues indicated by those results. A fair value measurement is the point within that range that ismost representative of fair value in the circumstances.When using the valuation technique, the Company shall give the priority to relevant observableinputs. The unobservable inputs can only be used when relevant observable inputs is not availableor practically would not be obtained. Observable inputs refer to the information which is availablefrom market and reflects the assumptions that market participants would use when pricing the assetor liability. Unobservable Inputs refer to the information which is not available from market and ithas to be developed using the best information available in the circumstances from the assumptionsthat market participants would use when pricing the asset or liability.(ii) Fair value hierarchyTo Company establishes a fair value hierarchy that categorises into three levels the inputs tovaluation techniques used to measure fair value. The fair value hierarchy gives the highest priorityto Level 1 inputs and second to the Level 2 inputs and the lowest priority to Level 3 inputs. Level 1inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that theentity can access at the measurement date. Level 2 inputs are inputs other than quoted pricesincluded within Level 1 that are observable for the asset or liability, either directly or indirectly.Level 3 inputs are unobservable inputs for the asset or liability.
3.12 Inventories
(a) Classification of inventories
~ 141 ~
Inventories are finished goods or products held for sale in the ordinary course of business, in theprocess of production for such sale, or in the form of materials or supplies to be consumed in theproduction process or in the rendering of services, including raw materials, work in progress,semi-finished goods, finished goods, goods in stock, turnover material, etc.(b) Measurement method of cost of inventories sold or usedInventories are measured at actual cost at recognition. The actual cost of an item of inventoriescomprises the purchase cost, cost of processing and other costs. The cost of inventories used or soldis determined on the weighted average basis.(c) Inventory system
The perpetual inventory system is adopted. The inventories should be counted at least once ayear, and surplus or losses of inventory stocktaking shall be included in current profit and loss.(d) Recognition Criteria and Provision for impairment of inventoryInventories are stated at the lower of cost and net realizable value. The excess of cost over netrealizable value of the inventories is recognised as provision for impairment of inventory, andrecognised in current profit or loss.Net realizable value of the inventory should be determined on the basis of reliable evidenceobtained, and factors such as purpose of holding the inventory and impact of post balance sheetevent shall be considered.(i) In normal operation process, finished goods, products and materials for direct sale, their netrealizable values are determined at estimated selling prices less estimated selling expenses andrelevant taxes and surcharges; for inventories held to execute sales contract or service contract, theirnet realizable values are calculated on the basis of contract price. If the quantities of inventoriesspecified in sales contracts are less than the quantities held by the Company, the net realizable valueof the excess portion of inventories shall be based on general selling prices. Net realizable value ofmaterials held for sale shall be measured based on market price.(ii) For materials in stock need to be processed, in the ordinary course of production and business,net realisable value is determined at the estimated selling price less the estimated costs ofcompletion, the estimated selling expenses and relevant taxes. If the net realisable value of thefinished products produced by such materials is higher than the cost, the materials shall bemeasured at cost; if a decline in the price of materials indicates that the cost of the finished productsexceeds its net realisable value, the materials are measured at net realisable value and differencesshall be recognised at the provision for impairment.(iii) Provisions for inventory impairment are generally determined on an individual basis. Forinventories with large quantity and low unit price, the provisions for inventory impairment aredetermined on group basis.
~ 142 ~
(iv) If any factor rendering write-downs of the inventories has been eliminated at the reportingdate, the amounts written down are recovered and reversed to the extent of the inventoryimpairment, which has been provided for. The reversal shall be included in profit or loss.(e) Amortisation method of low-value consumablesLow-value consumables: One-off writing off method is adopted.Package material: One-off writing off method is adopted.
3.13 Contract Assets and Contract Liabilities
The Company shall present contract assets or contract liabilities in the statement of financialposition, depending on the relationship between the Company’s satisfying a performance obligationand the customer’s payment. A contract asset shall be presented if the Company has the right toconsideration in exchange for goods or services that the Company has transferred to a customerwhen that right is conditioned on something other than the passage of time. A contract liability shallbe presented if the Company has the obligation to transfer goods or services to a customer for whichthe Company has received consideration (or the amount is due) from the customer.Method of determination and accounting for expected credit loss for contract assets please refer toNote 3.10.Contract assets and contract liabilities shall be presented separately in the statement of financialposition. The contract asset and contract liability for the same contract shall be presented on a netbasis. A net balance shall be listed in the item of "Contract assets" or "Other non-current assets"according to its liquidity; a credit balance shall be listed in the item of "Contract liabilities" or"Other non-current liabilities" according to its liquidity. Contract assets and contract liabilities fordifferent contracts cannot be offset.
3.14 Contract costs
Contract costs include costs to fulfill a contract and the costs to obtain a contract.The Company shall recognise an asset from the costs incurred to fulfill a contract only if those costsmeet all of the following criteria:
(i) The costs relate directly to a contract or to an anticipated contract, including: direct labour,direct materials, manufacturing costs (or similar costs), costs that are explicitly chargeable to thecustomer under the contract and other costs that are incurred only because an entity entered into thecontract;(ii) The costs enhance resources of the Company that will be used in satisfying performanceobligations in the future; and
~ 143 ~
(iii) The costs are expected to be recovered.The incremental costs of obtaining a contract shall be recognised as an asset if the Company expectsto recover them.An asset related to contract costs shall be amortised on a systematic basis that is consistent with therevenue recognition of the goods or services to which the asset relates. The Company recognises thecontract acquisition costs as an expense when incurred if the amortisation period of the asset thatthe Company otherwise would have recognised is one year or less.The Company shall accrue the provision for impairment, recognise an impairment loss in profit orloss to the extent that the carrying amount of an asset related to the contract cost exceeds thedifference of below two items, and further consider whether the estimated liability related to theonerous contract needs to be accrued:
(i) The remaining amount of consideration that the Company expects to receive in exchange for thegoods or services to which the asset relates; less(ii) The costs that relate directly to providing those goods or services and that have not beenrecognised as expenses.The Company shall recognise in profit or loss a reversal of some or all of an impairment losspreviously recognised when the impairment conditions no longer exist or have improved. Theincreased carrying amount of the asset shall not exceed the amount that would have beendetermined (net of amortisation) if no impairment loss had been recognised previously.Providing that the costs to fulfil a contract satisfy the requirement to be recognised as an asset, theCompany shall present them in the account “Inventory” if the contract has an original expectedduration of one year (or a normal operating cycle) or less, or in the account “Other non-currentassets” if the contract has an original expected duration of more than one year (or a normaloperating cycle).Providing that the costs to obtain a contract satisfy the requirement to be recgonised as an asset, theCompany shall present them in the account “Other current asset” if the contract has an originalexpected duration of one year (or a normal operating cycle) or less, or in the account “Othernon-current assets” if the contract has an original expected duration of more than one year (or anormal operating cycle).
3.15 Long-term Equity Investments
Long-term equity investments refer to equity investments where an investor has control of, orsignificant influence over, an investee, as well as equity investments in joint ventures. Associates ofthe Company are those entities over which the Company has significant influence.
~ 144 ~
(a) Determination basis of joint control or significant influence over the investeeJoint control is the relevant agreed sharing of control over an arrangement, and the arrangedrelevant activity must be decided under unanimous consent of the parties sharing control. Inassessing whether the Company has joint control of an arrangement, the Company shall assess firstwhether all the parties, or a group of the parties, control the arrangement. When all the parties, or agroup of the parties, considered collectively, are able to direct the activities of the arrangement, theparties control the arrangement collectively. Then the Company shall assess whether decisionsabout the relevant activities require the unanimous consent of the parties that collectively controlthe arrangement. If two or more groups of the parties could control the arrangement collectively, itshall not be assessed as have joint control of the arrangement. When assessing the joint control, theprotective rights are not considered.Significant influence is the power to participate in the financial and operating policy decisions ofthe investee but is not control or joint control of those policies. In determination of significantinfluence over an investee, the Company should consider not only the existing voting rights directlyor indirectly held but also the effect of potential voting rights held by the Company and otherentities that could be currently exercised or converted, including the effect of share warrants, shareoptions and convertible corporate bonds that issued by the investee and could be converted incurrent period.If the Company holds, directly or indirectly 20% or more but less than 50% of the voting power ofthe investee, it is presumed that the Company has significant influence of the investee, unless it canbe clearly demonstrated that in such circumstance, the Company cannot participate in thedecision-making in the production and operating of the investee.(b) Determination of initial investment cost(i) Long-term equity investments generated in business combinationsFor a business combination involving enterprises under common control, if the Company makespayment in cash, transfers non-cash assets or bears liabilities as the consideration for the businesscombination, the share of carrying amount of the owners’ equity of the acquiree in the consolidatedfinancial statements of the ultimate controlling party is recognised as the initial cost of thelong-term equity investment on the combination date. The difference between the initial investmentcost and the carrying amount of cash paid, non-cash assets transferred and liabilities assumed shallbe adjusted against the capital reserve; if capital reserve is not enough to be offset, undistributedprofit shall be offset in turn.For a business combination involving enterprises under common control, if the Company issuesequity securities as the consideration for the business combination, the share of carrying amount ofthe owners’ equity of the acquiree in the consolidated financial statements of the ultimatecontrolling party is recognised as the initial cost of the long-term equity investment on the
~ 145 ~
combination date. The total par value of the shares issued is recognised as the share capital. Thedifference between the initial investment cost and the carrying amount of the total par value of theshares issued shall be adjusted against the capital reserve; if capital reserve is not enough to beoffset, undistributed profit shall be offset in turn.For business combination not under common control, the assets paid, liabilities incurred or assumedand the fair value of equity securities issued to obtain the control of the acquiree at the acquisitiondate shall be determined as the cost of the business combination and recognised as the initial cost ofthe long-term equity investment. The audit, legal, valuation and advisory fees, other intermediaryfees, and other relevant general administrative costs incurred for the business combination, shall berecognised in profit or loss as incurred.(ii) Long-term equity investments acquired not through the business combination, the investmentcost shall be determined based on the following requirements:
For long-term equity investments acquired by payments in cash, the initial cost is the actually paidpurchase cost, including the expenses, taxes and other necessary expenditures directly related to theacquisition of long-term equity investments.For long-term equity investments acquired through issuance of equity securities, the initial cost isthe fair value of the issued equity securities.For the long-term equity investments obtained through exchange of non-monetary assets, if theexchange has commercial substance, and the fair values of assets traded out and traded in can bemeasured reliably, the initial cost of long-term equity investment traded in with non-monetaryassets are determined based on the fair values of the assets traded out together with relevant taxes.Difference between fair value and book value of the assets traded out is recorded in current profit orloss. If the exchange of non-monetary assets does not meet the above criterion, the book value ofthe assets traded out and relevant taxes are recognised as the initial investment cost.For long-term equity investment acquired through debt restructuring, the initial cost is determinedbased on the fair value of the equity obtained and the difference between initial investment cost andcarrying amount of debts shall be recorded in current profit or loss.(c) Subsequent measurement and recognition of profit or lossLong-term equity investment to an entity over which the Company has ability of control shall beaccounted for at cost method. Long-term equity investment to a joint venture or an associate shallbe accounted for at equity method.(i) Cost methodFor Long-term equity investment at cost method, cost of the long-term equity investment shall beadjusted when additional amount is invested or a part of it is withdrawn. The Company recognisesits share of cash dividends or profits which have been declared to distribute by the investee as
~ 146 ~
current investment income.(ii) Equity methodIf the initial cost of the investment is in excess of the share of the fair value of the net identifiableassets in the investee at the date of investment, the difference shall not be adjusted to the initial costof long-term equity investment; if the initial cost of the investment is in short of the share of the fairvalue of the net identifiable assets in the investee at the date investment, the difference shall beincluded in the current profit or loss and the initial cost of the long-term equity investment shall beadjusted accordingly.The Company recognises the share of the investee’s net profits or losses, as well as its share of theinvestee’s other comprehensive income, as investment income or losses and other comprehensiveincome respectively, and adjusts the carrying amount of the investment accordingly. The carryingamount of the investment shall be reduced by the share of any profit or cash dividends declared todistribute by the investee. The investor’s share of the investee’s owners’ equity changes, other thanthose arising from the investee’s net profit or loss, other comprehensive income or profitdistribution, shall be recognised in the investor’s equity, and the carrying amount of the long-termequity investment shall be adjusted accordingly. The Company recognises its share of the investee’snet profits or losses after making appropriate adjustments of investee’s net profit based on the fairvalues of the investee’s identifiable net assets at the investment date. If the accounting policy andaccounting period adopted by the investee is not in consistency with the Company, the financialstatements of the investee shall be adjusted according to the Company’s accounting policies andaccounting period, based on which, investment income or loss and other comprehensive income,etc., shall be adjusted. The unrealized profits or losses resulting from inter-company transactionsbetween the company and its associate or joint venture are eliminated in proportion to thecompany’s equity interest in the investee, based on which investment income or losses shall berecognised. Any losses resulting from inter-company transactions between the investor and theinvestee, which belong to asset impairment, shall be recognised in full.Where the Company obtains the power of joint control or significant influence, but not control, overthe investee, due to additional investment or other reason, the relevant long-term equity investmentshall be accounted for by using the equity method, initial cost of which shall be the fair value of theoriginal investment plus the additional investment. Where the original investment is classified asother equity investment, difference between its fair value and the carrying value, in addition to thecumulative changes in fair value previously recorded in other comprehensive income, shall berecogised into retained earnings of the period of using equity method.If the Company loses the joint control or significant influence of the investee for some reasons suchas disposal of equity investment, the retained interest shall be measured at fair value and thedifference between the carrying amount and the fair value at the date of loss the joint control orsignificant influence shall be recognised in profit or loss. When the Company discontinues the use
~ 147 ~
of the equity method, the Company shall account for all amounts previously recognised in othercomprehensive income under equity method in relation to that investment on the same basis aswould have been required if the investee had directly disposed of the related assets or liabilities.(d) Equity investment classified as held for saleAny retained interest in the equity investment not classified as held for sale, shall be accounted forusing equity method.When an equity investment in an associate or a joint venture previously classified as held for saleno longer meets the criteria to be so classified, it shall be accounted for using the equity methodretrospectively as from the date of its classification as held for sale. Financial statements for theperiods since classification as held for sale shall be amended accordingly.(f) Impairment testing and provision for impairment lossFor investment in subsidiaries, associates or a joint ventures, provision for impairment loss pleaserefer to Note 3.22.
3.16 Investment Properties
(a) Classification of investment propertiesInvestment properties are properties to earn rentals or for capital appreciation or both,including:
(i) Land use right leased out(ii) Land held for transfer upon appreciation(iii) Buildings leased out(b) The measurement model of investment propertyThe Company adopts the cost model for subsequent measurement of investment properties.For provision for impairment please refer to Note 3.22.The Company calculates the depreciation or amortisation based on the net amount ofinvestment property cost less the accumulated impairment and the net residual value usingstraight-line method. The estimated useful life and annual depreciation rates which are determinedaccording to the categories, estimated economic useful lives and estimated net residual rates arelisted as followings:
| Category | Estimated useful life (year) | Residual rates (%) | Annual depreciation rates (%) |
| Buildings and constructions | 10.00-30.00 | 3.00-5.00 | 3.17-9.70 |
| Land use right | 40.00-50.00 | 0.00 | 2.00-2.50 |
3.17 Fixed Assets
~ 148 ~
Fixed assets refer to the tangible assets with higher unit price held for the purpose of producingcommodities, rendering services, renting or business management with useful lives exceeding oneyear.
(a) Recognition criteria of fixed assetsFixed assets will only be recognised at the actual cost paid when obtaining as all the followingcriteria are satisfied:
(i) It is probable that the economic benefits relating to the fixed assets will flow into the Company;(ii) The costs of the fixed assets can be measured reliably.
Subsequent expenditure for fixed assets shall be recorded in cost of fixed assets, if recognitioncriteria of fixed assets are satisfied, otherwise the expenditure shall be recorded in current profit orloss when incurred.
(b) Depreciation methods of fixed assetsThe Company begins to depreciate the fixed asset from the next month after it is available forintended use using the straight-line-method. The estimated useful life and annual depreciation rateswhich are determined according to the categories, estimated economic useful lives and estimatednet residual rates of fixed assets are listed as followings:
| Category | Depreciation method | Estimated useful life (year) | Residual rates (%) | Annual depreciation rates (%) |
| Buildings and constructions | straight-line-method | 8.00-35.00 | 3.00-5.00 | 2.71-12.13 |
| Machinery equipment | straight-line-method | 8.00-10.00 | 3.00-5.00 | 9.50-12.13 |
| Transportation vehicles | straight-line-method | 4.00 | 3.00 | 24.25 |
| Administrative and other devices | straight-line-method | 3.00 | 3.00 | 32.33 |
For the fixed assets with impairment provided, the impairment provision should be excluded fromthe cost when calculating depreciation.At the end of reporting period, the Company shall review the useful life, estimated net residualvalue and depreciation method of the fixed assets. Estimated useful life of the fixed assets shall beadjusted if it is changed compared to the original estimation.
3.18 Construction in Progress
(a) Classification of construction in progressConstruction in progress is measured on an individual project basis.
(b) Recognition criteria and timing of transfer from construction in progress to fixedassets
~ 149 ~
The initial book values of the fixed assets are stated at total expenditures incurred before they areready for their intended use, including construction costs, original price of machinery equipment,other necessary expenses incurred to bring the construction in progress to get ready for its intendeduse and borrowing costs of the specific loan for the construction or the proportion of the generalloan used for the constructions incurred before they are ready for their intended use. Theconstruction in progress shall be transferred to fixed asset when the installation or construction isready for the intended use. For construction in progress that has been ready for their intended usebut relevant budgets for the completion of projects have not been completed, the estimated values ofproject budgets, prices, or actual costs should be included in the costs of relevant fixed assets, anddepreciation should be provided according to relevant policies of the Company when the fixedassets are ready for intended use. After the completion of budgets needed for the completion ofprojects, the estimated values should be substituted by actual costs, but depreciation alreadyprovided is not adjusted.The specific criteria and timing of transfer to fixed assets for the Company’s different categories ofconstruction in progress items:
| category | The specific criteria and timing of transfer to fixed assets |
| Houses and buildings | (i) The main construction project and supporting projects have been substantially completed; (ii) After the construction project meets the predetermined design requirements, it shall be inspected and accepted by the survey, design, construction, supervision and other units, and inspected and accepted by the local construction authorities and other relevant units; (iii) If the construction project has reached the predetermined serviceability state but has not yet completed the final accounts, it shall be transferred to the fixed assets at the estimated value according to the actual cost of the project from the date of reaching the predetermined serviceability state. |
| Equipment to be installed and debugged | (i) Relevant equipment and other supporting facilities have been installed; (ii) After debugging, the equipment can maintain normal and stable operation for a period of time, and the production equipment can produce qualified products stably in a period of time; (iii) The equipment management department shall conduct joint inspection with the asset use department, safety management Department, emergency Department, environmental Protection Department and other departments. |
3.19 Right-of-use assets
At the lease commencement date, a right-of-use asset is measured at cost. The cost of aright-of-use asset comprise:
~ 150 ~
(i) The amount of the initial measurement of the lease liability;(ii) Any lease payments made at or before the commencement date, less any lease incentivesreceived;(iii) Any initial direct costs incurred by the Group; and(iv) An estimate of costs to be incurred by the Group in dismantling and removing theunderlying asset, restoring the site on which it is located or restoring the underlying asset to thecondition required by the terms and conditions of the lease, unless those costs are incurred toproduce inventories.A right-of-use asset is subsequently measured at cost. If it is reasonably certain that ownershipof the lease item will transfer to the Group upon expiry of the lease, the leased item is depreciatedover its useful life; if, however, transfer of ownership of the leased item upon expiry of the lease tothe Group cannot be reasonably expected, the leased item is depreciated over the shorter of itsuseful life and the lease term. Where a leased item has recorded impairment, its residual value afterdeducting the impairment allowance is depreciated in accordance the principle described in thisparagraph.
3.20 Borrowing costs
(a) Recognition criteria and period for capitalization of borrowing costsThe Company shall capitalize the borrowing costs that are directly attributable to the acquisition,construction or production of qualifying assets when meet the following conditions:
(i) Expenditures for the asset are being incurred;(ii) Borrowing costs are being incurred, and;(iii) Acquisition, construction or production activities that are necessary to prepare the assets fortheir intended use or sale are in progress.Other borrowing cost, discounts or premiums on borrowings and exchange differences on foreigncurrency borrowings shall be recognized into current profit or loss when incurred.Capitalization of borrowing costs is suspended during periods in which the acquisition, constructionor production of a qualifying asset is interrupted abnormally and the interruption is for a continuousperiod of more than 3 months.
Capitalization of such borrowing costs ceases when the qualifying assets being acquired,constructed or produced become ready for their intended use or sale. The expenditure incurredsubsequently shall be recognised as expenses when incurred.
(b) Capitalization rate and measurement of capitalized amounts of borrowing costsWhen funds are borrowed specifically for purchase, construction or manufacturing of assets eligiblefor capitalization, the Company shall determine the amount of borrowing costs eligible for
~ 151 ~
capitalisation as the actual borrowing costs incurred on that borrowing during the period less anyinterest income on bank deposit or investment income on the temporary investment of thoseborrowings.Where funds allocated for purchase, construction or manufacturing of assets eligible forcapitalization are part of a general borrowing, the eligible amounts are determined by theweighted-average of the cumulative capital expenditures in excess of the specific borrowingmultiplied by the general borrowing capitalization rate. The capitalisation rate will be the weightedaverage of the borrowing costs applicable to the general borrowing.
3.21 Intangible Assets
(a) Measurement method of intangible assetsIntangible assets are recognised at actual cost at acquisition.(b) The useful life and amortisation of intangible assets
(i) The estimated useful lives of the intangible assets with finite useful lives are as follows:
| Category | Estimated useful life | Basis |
| Land use right | 40-50 years | Legal life |
| Patents | 10 years | The service life is determined by reference to the period that can bring economic benefits to the Company |
| Software | 3-5 years | The service life is determined by reference to the period that can bring economic benefits to the Company |
| Trademarks | 10 years | The service life is determined by reference to the period that can bring economic benefits to the Company |
For intangible assets with finite useful life, the estimated useful life and amortisation method arereviewed annually at the end of each reporting period and adjusted when necessary. No change hasincurred in current year in the estimated useful life and amortisation method upon review.(ii) Assets of which the period to bring economic benefits to the Company are unforeseeable areregarded as intangible assets with indefinite useful lives. The Company reassesses the usefullives of those assets at every year end. If the useful lives of those assets are still indefinite,impairment test should be performed on those assets at the balance sheet date.(iii) Amortisation of the intangible assetsFor intangible assets with finite useful lives, their useful lives should be determined upontheir acquisition and systematically amortised on a straight-line basis [units of productionmethod] over the useful life. The amortisation amount shall be recognised into current profitor loss according to the beneficial items. The amount to be amortised is cost deducting residualvalue. For intangible assets which has impaired, the cumulative impairment provision shall bededucted as well. The residual value of an intangible asset with a finite useful life shall beassumed to be zero unless: there is a commitment by a third party to purchase the asset at theend of its useful life; or there is an active market for the asset and residual value can bedetermined by reference to that market; and it is probable that such a market will exist at the
~ 152 ~
end of the asset’s useful life.Intangible assets with indefinite useful lives shall not be amortised. The Company reassessesthe useful lives of those assets at every year end. If there is evidence to indicate that theuseful lives of those assets become finite, the useful lives shall be estimated and the intangibleassets shall be amortised systematically and reasonably within the estimated useful lives.(c) Scope of Research and Development ExpendituresThe Company classifies the expenses directly related to research and development activities asresearch and development expenditures, including remuneration of research and development staff,direct material, depreciation cost and long-term amortised expense, design fee, equipmentcommissioning fee, intangible assets amortisation cost, outsourcing research and developmentcost, and other expenses, etc.(d) Criteria of classifying expenditures on internal research and development projectsinto research phase and development phase
Preparation activities related to materials and other relevant aspects undertaken by the Companyfor the purpose of further development shall be treated as research phase. Expenditures incurredduring the research phase of internal research and development projects shall be recognised inprofit or loss when incurred.Development activities after the research phase of the Company shall be treated as developmentphase.(e) Criteria for capitalization of qualifying expenditures during the development phaseExpenditures arising from development phase on internal research and development projects shallbe recognised as intangible assets only if all of the following conditions have been met:
(i) Technical feasibility of completing the intangible assets so that they will be availablefor use or sale;(ii) Its intention to complete the intangible asset and use or sell it;(iii) The method that the intangible assets generate economic benefits, including the Companycan demonstrate the existence of a market for the output of the intangible assets or the intangibleassets themselves or, if it is to be used internally, the usefulness of the intangible assets;(iv) The availability of adequate technical, financial and other resources to complete thedevelopment and to use or sell the intangible asset; and(v) Its ability to measure reliably the expenditure attributable to the intangible asset.
3.22 Impairment of Long-Term Assets
Impairment loss of long-term equity investment in subsidiaries, associates and joint ventures,investment properties, fixed assets, constructions in progress, and intangible assetssubsequently measured at cost shall be determined according to following method:
The Company shall assess at the end of each reporting period whether there is any indicationthat an asset may be impaired. If any such indication exists, the Company shall estimate therecoverable amount of the asset and test for impairment. Irrespective of whether there is anyindication of impairment, the Company shall test for impairment of goodwill acquired in a business
~ 153 ~
combination, intangible assets with an indefinite useful life or intangible assets not yetavailable for use annually.The recoverable amounts of the long-term assets are the higher of their fair values less coststo dispose and the present values of the estimated future cash flows of the long-term assets.The Company estimate the recoverable amounts on an individual basis. If it is difficult to estimatethe recoverable amount of the individual asset, the Company estimates the recoverable amountof the groups of assets that the individual asset belongs to. Identification of a group of assetis based on whether the cash inflows from it are largely independent of the cash inflows fromother assets or groups of assets.If, and only if, the recoverable amount of an asset or a group of assets is less than its carryingamount, the carrying amount of the asset shall be reduced to its recoverable amount and theprovision for impairment loss shall be recognised accordingly.For the purpose of impairment testing, goodwill acquired in a business combination shall, fromthe acquisition date, be allocated to relevant group of assets based on reasonable method; ifit is difficult to allocate to relevant group of assets, good will shall be allocated to relevantcombination of asset groups. The relevant group of assets or combination of asset groups is agroup of assets or combination of asset groups that is benefit from the synergies of the businesscombination and is not larger than the reporting segment determined by the Company.When test for impairment, if there is an indication that relevant group of assets or combinationof asset groups may be impaired, impairment testing for group of assets or combination of assetgroups excluding goodwill shall be conducted first, and the recoverable amount shall be thencalculated and the impairment loss shall be recognised accordingly. Then the group of assetsor combination of asset groups including goodwill shall be tested for impairment, by comparingthe carrying amount with its recoverable amount. If the recoverable amount is less than thecarrying amount, the Company shall recognise the impairment loss.The mentioned impairment loss will not be reversed in subsequent accounting period once it hadbeen recognised.
3.23 Long-term Deferred Expenses
Long-term deferred expenses are various expenses already incurred, which shall be amortised overcurrent and subsequent periods with the amortisation period exceeding one year.
3.24 Employee Benefits
Employee benefits refer to all forms of consideration or compensation given by the Company inexchange for service rendered by employees or for the termination of employment relationship.Employee benefits include short-term employee benefits, post-employment benefits, terminationbenefits and other long-term employee benefits. Benefits provided to an employee's spouse,children, dependents, family members of decreased employees, or other beneficiaries are alsoemployee benefits.According to liquidity, employee benefits are presented in the statement of financial position as“Employee benefits payable” and “Long-term employee benefits payable”.
~ 154 ~
(a) Short-term employee benefits(i) Employee basic salary (salary, bonus, allowance, subsidy)The Company recognises, in the accounting period in which an employee provides service, actuallyoccurred short-term employee benefits as a liability, with a corresponding charge to current profitexcept for those recognised as capital expenditure based on the requirement of accountingstandards.(ii) Employee welfareThe Company shall recognise the employee welfare based on actual amount when incurred intocurrent profit or loss or related capital expenditure. Employee welfare shall be measured at fairvalue as it is a non-monetary benefits.(iii) Social insurance such as medical insurance, work injury insurance and maternity insurance,housing funds, labor union fund and employee education fundPayments made by the Company of social insurance for employees, such as medical insurance,work injury insurance and maternity insurance, payments of housing funds, and labor union fundand employee education fund accrued in accordance with relevant requirements, in the accountingperiod in which employees provide services, is calculated according to required accrual bases andaccrual ratio in determining the amount of employee benefits and the related liabilities, which shallbe recognised in current profit or loss or the cost of relevant asset.(iv) Short-term paid absencesThe company shall recognise the related employee benefits arising from accumulating paidabsences when the employees render service that increases their entitlement to future paid absences.The additional payable amounts shall be measured at the expected additional payments as a result ofthe unused entitlement that has accumulated. The Company shall recognise relevant employeebenefit of non-accumulating paid absences when the absences actually occurred.(v)Short-term profit-sharing planThe Company shall recognise the related employee benefits payable under a profit-sharing planwhen all of the following conditions are satisfied:
? The Company has a present legal or constructive obligation to make such payments as a result of past
events; and? A reliable estimate of the amounts of employee benefits obligation arising from the profit- sharing plan
can be made.(b) Post-employment benefits(i) Defined contribution plansThe Company shall recognise, in the accounting period in which an employee provides service, the
~ 155 ~
contribution payable to a defined contribution plan as a liability, with a corresponding charge to thecurrent profit or loss or the cost of a relevant asset.When contributions to a defined contribution plan are not expected to be settled wholly beforetwelve months after the end of the annual reporting period in which the employees render therelated service, they shall be discounted using relevant discount rate (market yields at the end of thereporting period on high quality corporate bonds in active market or government bonds with thecurrency and term which shall be consistent with the currency and estimated term of the definedcontribution obligations) to measure employee benefits payable.(ii) Defined benefit planThe present value of defined benefit obligation and current service costsBased on the expected accumulative welfare unit method, the Company shall make estimates aboutdemographic variables and financial variables in adopting the unbiased and consistent actuarialassumptions and measure defined benefit obligation, and determine the obligation period. TheCompany shall discount the obligation arising from defined benefit plan using relevant discount rate(market yields at the end of the reporting period on high quality corporate bonds in active market orgovernment bonds with the currency and term which shall be consistent with the currency andestimated term of the defined benefit obligations) in order to determine the present value of thedefined benefit obligation and the current service cost.The net defined benefit liability or assetThe net defined benefit liability (asset) is the deficit or surplus recognised as the present value ofthe defined benefit obligation less the fair value of plan assets (if any).When the Company has a surplus in a defined benefit plan, it shall measure the net defined benefitasset at the lower of the surplus in the defined benefit plan and the asset ceiling.The amount recognised in the cost of asset or current profit or lossService cost comprises current service cost, past service cost and any gain or loss on settlement.Other service cost shall be recognised in profit or loss unless accounting standards require or allowthe inclusion of current service cost within the cost of assets.Net interest on the net defined benefit liability (asset) comprising interest income on plan assets,interest cost on the defined benefit obligation and interest on the effect of the asset ceiling, shall beincluded in profit or loss.The amount recognised in other comprehensive incomeChanges in the net liability or asset of the defined benefit plan resulting from the remeasurementsincluding:
? Actuarial gains and losses, the changes in the present value of the defined benefit obligation resulting
~ 156 ~
from experience adjustments or the effects of changes in actuarial assumptions;? Return on plan assets, excluding amounts included in net interest on the net defined benefit liability or
asset;? Any change in the effect of the asset ceiling, excluding amounts included in net interest on the net defined
benefit liability (asset).Remeasurements of the net defined benefit liability (asset) recognised in other comprehensiveincome shall not be reclassified to profit or loss in subsequent periods. Upon termination of theoriginal defined benefit plan, the portion previously recognised in other comprehensive incomeshall be reclassified in full to retained earnings within equity.(c) Termination benefitsThe Company providing termination benefits to employees shall recognise an employee benefitsliability for termination benefits, with a corresponding charge to the profit or loss of the reportingperiod, at the earlier of the following dates:
(i) When the Company cannot unilaterally withdraw the offer of termination benefits because ofan employment termination plan or a curtailment proposal.(ii) When the Company recognises costs or expenses related to a restructuring that involves thepayment of termination benefits.If the termination benefits are not expected to be settled wholly before twelve months after the endof the annual reporting period, the Company shall discount the termination benefits using relevantdiscount rate (market yields at the end of the reporting period on high quality corporate bonds inactive market or government bonds with the currency and term which shall be consistent with thecurrency and estimated term of the defined benefit obligations) to measure the employee benefits.(d) Other long-term employee benefits(i) Meet the conditions of the defined contribution planWhen other long-term employee benefits provided by the Company to the employees satisfies theconditions for classifying as a defined contribution plan, all those benefits payable shall beaccounted for as employee benefits payable at their discounted value.(ii) Meet the conditions of the defined benefit planAt the end of the reporting period, the Company recognised the cost of employee benefit from otherlong-term employee benefits as the following components:
? Service costs;? Net interest cost for net liability or asset of other long-term employee benefits
~ 157 ~
? Changes resulting from the remeasurements of the net liability or asset of other long-term employee benefitsIn order to simplify the accounting treatment, the net amount of above items shall be recognised inprofit or loss or relevant cost of assets.
3.25 Lease liabilities
At the commencement date, the Group measures the lease liability at the present value of the leasepayments that are not paid at that date. The lease payments comprise:
(i) Fixed payments, or in-substance fixed payments, less any lease incentives receivable;(ii) Variable lease payments that depend on an index or a rate;(iii) The exercise price of a purchase option if the Group is reasonably certain to exercise thatoption;(iv) Payments of penalties for terminating the lease, if the lease term reflects the Group exercisingan option to terminate the lease; and(v) Amounts expected to be payable by the Group under residual value guarantees.The lease payments shall be discounted using the interest rate implicit in the lease, if that rate canbe readily determined. If that rate cannot be readily determined, the lessee shall use the lessee’sincremental borrowing rate. The excess of the lease payments over its present value is amortisedover the lease term as interest expenses using the discount rate. A variable lease payment which isnot included in the initial measurement of the lease liability is recognised in profit or loss whenincurred.
3.26 Provisions
(a) RecognitionA provision is recognised for an obligation associated with a contingent event when the followingconditions are satisfied:
(i) The obligation is a present obligation assumed by the entity;(ii) It is probable that fulfillment of the obligation will result in outflows of economic benefits fromthe entity;(iii) The amount of the obligation can be reliably measured.(b) MeasurementA provision is initially measured at the best estimate of expenses required for the performance ofrelevant present obligations. The Company, when determining the best estimate, has had acomprehensive consideration of risks with respect to contingencies, uncertainties and the time valueof money. The carrying amount of the provision shall be reviewed at the end of every reporting
~ 158 ~
period. If conclusive evidences indicate that the carrying amount fails to be the best estimate of theprovision, the carrying amount shall be adjusted based on the updated best estimate.
3.27 Revenue
(a) General PrincipleRevenue is defined as the gross inflow of economic benefits arising in the course of the ordinaryactivities of the Company when those inflows result in the increases in shareholders’ equity, otherthan increases relating to contributions from shareholders.The Company shall recognise revenue when it satisfies a performance obligation in the contract asthe customer obtains control of a good or service. Control of a good or service refers to the ability todirect the use of, and obtain substantially all of the remaining economic benefits from, the good orservice.When the contract has two or more obligation performances, the Company shall allocate thetransaction price to each performance obligation in proportion to a relative stand-alone selling priceat contract inception of the promised good or service underlying each performance obligation in thecontract and recognize revenue based on the transaction price allocated to each performanceobligation.The transaction price is the amount of consideration to which the Company expects to be entitled inexchange for transferring promised goods or services to a customer, excluding amounts collected onbehalf of third parties. When determining the transaction price of the contract, if the contractincludes a variable consideration, the Company shall determine the best estimate of the variableconsideration based on the expected value or the most likely amount and include in the transactionprice only to the extent that it is highly probable that a significant reversal in the amount ofcumulative revenue recognised will not occur when the uncertainty associated with the variableconsideration is subsequently resolved. If the contract contains a significant financing component,the Company shall determine the transaction price at an amount that reflects the price that acustomer would have paid for the promised goods or services if the customer had paid cash forthose goods or services when (or as) they transfer to the customer. The difference between thetransaction price and the promised consideration shall be amortised using the effective interestmethod within the contract period. The Company need not consider the effects of a significantfinancing component if the period between when the Company transfers control of a good orservice to a customer and when the customer pays for that good or service will be one year or less.The Company satisfies a performance obligation over time, if one of the following criteria is met;otherwise a performance obligation is satisfied at a point in time:
(i) The customer simultaneously receives and consumes the benefits provided by the Company’s
~ 159 ~
performance as the Company performs;(ii) The Company’s performance creates or enhances an asset (for example, work in progress) thatthe customer controls as the asset is created or enhanced;(iii) The Company’s performance does not create an asset with an alternative use to the Companyand the Company has an enforceable right to payment for performance completed to date.For each performance obligation satisfied over time, the Company shall recognise revenue overtime by measuring the progress towards complete satisfaction of that performance obligation, unlessthose progress cannot be reasonably measured. The Company measures the progress of aperformance obligation for the service rendered using input methods (or output methods). In somecircumstances, the Company cannot be able to reasonably measure the progress of a performanceobligation, but the Company expects to recover the costs incurred in satisfying the performanceobligation. In those circumstances, the Company shall recognise revenue only to the extent of thecosts incurred until such time that it can reasonably measure the progress of the performanceobligation.The Company shall recognise revenue at the point in which a customer obtains control of apromised good or service if a performance obligation is satisfied at a point in time. To determine thepoint in time at which a customer obtains control of a promised good or service, the Company shallconsider indicators of the transfer of control, which include, but are not limited to, the followings:
(i) The Company has a present right to payment for the good or service – a customer is presentlyobliged to pay for the good or service;(ii) The Company has transferred legal title of an asset to a customer - the customer has legal title tothe asset;(iii) The Company has transferred physical possession of an asset to a customer - the customer hasphysical possession of the asset;(iv) The Company has transferred the significant risks and rewards of ownership of the asset to acustomer - the customer has the significant risks and rewards of ownership of the asset;(v) The customer has accepted the asset.(VI) Other indication that the customer has obtained control over the asset.(b) Specific MethodRevenue recognition methods of the Company are as follows:
(i) Contract of sales of goodsAccording to the contract of sales of goods between the Company and the customer, the Company
~ 160 ~
satisfies a performance obligation by transferring goods to the customer, which is a performanceobligation satisfied at a point in time.Revenue from domestic sales of goods can only be recognised when the following conditions aresatisfied: the Company has transferred the promised goods to the customer according to the contractand the customer has accepted the goods; the payment has been received or the receipt voucher hasbeen obtained and it is highly probable that the consideration will be received; the significant risksand rewards of ownership of the asset has been transferred; legal title of the asset has beentransferred.(ii) Contract of rendering servicesThe customer simultaneously receives and consumes the benefits provided by the Company’sperformance as the Company performs，Company satisfies a performance obligation by renderingof services to the customer, which is a performance obligation satisfied over time. For eachperformance obligation satisfied over time, the Company shall recognise revenue over time bymeasuring the progress towards complete satisfaction of that performance obligation.The customer can’t simultaneously receives and consumes the benefits provided by the Company’sperformance as the Company performs, the Company’s performance does not create an asset withan alternative use and the Company has no enforceable right to payment for performance completedto date at all times throughout the duration of the contract, Revenue from rendering of services is aperformance obligation satisfied at a point in time.The company recognizes revenue when thecompany completes technical services in accordance with the contractual agreement(iii) Revenue from usage of assetsRevenue from usage of the Group’s assets is recognised if the revenue can be reliably measured andit is probable that the associated economic benefits will flow to the Group.Revenue from usage of assets mainly includes the income from the leasing of premises andhouses.Revenue measured in accordance with the method determined by the respective contracts.
3.28 Government Grants
(a) Recognition of government grantsA government grant shall not be recgonised until there is reasonable assurance that:
(i) The Company will comply with the conditions attaching to them; and
~ 161 ~
(ii) The grants will be received.(b) Measurement of government grantsMonetary grants from the government shall be measured at amount received or receivable, andnon-monetary grants from the government shall be measured at their fair value or at a nominalvalue of RMB 1.00 when reliable fair value is not available.(c) Accounting for government grants(i) Government grants related to assetsGovernment grants pertinent to assets mean the government grants that are obtained by theCompany used for purchase or construction, or forming the long-term assets by other ways.Government grants pertinent to assets shall be recognised as deferred income, and should berecognised in profit or loss on a systematic basis over the useful lives of the relevant assets. Grantsmeasured at their nominal value shall be directly recognised in profit or loss of the period when thegrants are received. When the relevant assets are sold, transferred, written off or damaged before theassets are terminated, the remaining deferred income shall be transferred into profit or loss of theperiod of disposing relevant assets.(ii) Government grants related to incomeGovernment grants other than related to assets are classified as government grants related to income.Government grants related to income are accounted for in accordance with the following principles:
If the government grants related to income are used to compensate the enterprise’s relevantexpenses or losses in future periods, such government grants shall be recognised as deferred incomeand included into profit or loss (or write down related expenses) in the same period as the relevantexpenses or losses are recognised;If the government grants related to income are used to compensate the enterprise’s relevantexpenses or losses incurred, such government grants are directly recognised into current profit orloss (or write down related expenses).For government grants comprised of part related to assets as well as part related to income, eachpart is accounted for separately; if it is difficult to identify different part, the government grants areaccounted for as government grants related to income as a whole.Government grants related to daily operation activities are recognised in other income (or writedown related expenses) in accordance with the nature of the activities, and government grantsirrelevant to daily operation activities are recognised in non-operating income.(iii) Loan interest subsidyWhen loan interest subsidy is allocated to the bank, and the bank provides a loan at lower-market
~ 162 ~
rate of interest to the Company, the loan is recognised at the actual received amount, and the interestexpense is calculated based on the principal of the loan and the lower-market rate of interest.When loan interest subsidy is directly allocated to the Company, the subsidy shall be recognised asoffsetting the relevant borrowing cost.(iv) Repayment of the government grantsRepayment of the government grants shall be recorded by increasing the carrying amount of theasset if the book value of the asset has been written down, or reducing the balance of relevantdeferred income if deferred income balance exists, any excess will be recognised into current profitor loss; or directly recognised into current profit or loss for other circumstances.
3.29 Deferred Tax Assets and Deferred Tax Liabilities
Temporary differences are differences between the carrying amount of an asset or liability inthe statement of financial position and its tax base at the balance sheet date. The Companyrecognise and measure the effect of taxable temporary differences and deductible temporarydifferences on income tax as deferred tax liabilities or deferred tax assets using liabilitymethod. Deferred tax assets and deferred tax liabilities shall not be discounted.(a) Recognition of deferred tax assetsDeferred tax assets should be recognised for deductible temporary differences, the carryforward ofunused tax losses and the carryforward of unused tax credits to the extent that it is probable thattaxable profit will be available against which the deductible temporary differences, the carryforwardof unused tax losses and the carryforward of unused tax credits can be utilised at the tax rates thatare expected to apply to the period when the asset is realised, unless the deferred tax asset arisesfrom the initial recognition of an asset or liability in a transaction that:
(i) Is not a business combination; and(ii) At the time of the transaction, affects neither accounting profit nor taxable profit (tax loss)However, the exemption from recognising deferred tax liabilities and assets upon initial recognitiondoes not apply to a single transaction that: (a) simultaneously satisfies both of the aforementionedconditions; and (b) generates equal amounts of taxable temporary differences and deductibletemporary differences from the initial recognition of related assets and liabilities. For suchtransactions, the Company recognises corresponding deferred tax liabilities for taxable temporarydifferences and deferred tax assets for deductible temporary differences at the transaction date.The Company shall recognise a deferred tax asset for all deductible temporary differences arisingfrom investments in subsidiaries, associates and joint ventures, only to the extent that, it is probablethat:
~ 163 ~
(i) The temporary difference will reverse in the foreseeable future; and(ii) Taxable profit will be available against which the deductible temporary difference can beutilised.At the end of each reporting period, if there is sufficient evidence that it is probable that taxableprofit will be available against which the deductible temporary difference can be utilized, theCompany recognises a previously unrecognised deferred tax asset.The carrying amount of a deferred tax asset shall be reviewed at the end of each reporting period.The Company shall reduce the carrying amount of a deferred tax asset to the extent that it is nolonger probable that sufficient taxable profit will be available to allow the benefit of part or all ofthat deferred tax asset to be utilised. Any such reduction shall be reversed to the extent that itbecomes probable that sufficient taxable profit will be available.(b) Recognition of deferred tax liabilitiesA deferred tax liability shall be recognised for all taxable temporary differences at the tax rate thatare expected to apply to the period when the liability is settled.(i) No deferred tax liability shall be recognised for taxable temporary differences arising from:
? The initial recognition of goodwill; or
? The initial recognition of an asset or liability in a transaction which: is not a businesscombination; and at the time of the transaction, affects neither accounting profit nor taxable profit(tax loss)(ii) An entity shall recognise a deferred tax liability for all taxable temporary differences associatedwith investments in subsidiaries, associates, and joint ventures, except to the extent that both of thefollowing conditions are satisfied:
? The Company is able to control the timing of the reversal of the temporary difference; and? It is probable that the temporary difference will not reverse in the foreseeable future.(c) Recognition of deferred tax liabilities or assets involved in special transactions or events(i) Deferred tax liabilities or assets related to business combinationFor the taxable temporary difference or deductible temporary difference arising from a businesscombination not under common control, a deferred tax liability or a deferred tax asset shall berecognised, and simultaneously, goodwill recognised in the business combination shall be adjustedbased on relevant deferred tax expense (income).(ii) Items directly recognised in equity
~ 164 ~
Current tax and deferred tax related to items that are recognised directly in equity shall berecognised in equity. Such items include: other comprehensive income generated from fair valuefluctuation of other debt investments; an adjustment to the opening balance of retained earningsresulting from either a change in accounting policy that is applied retrospectively or the correctionof a prior period (significant) error; amounts arising on initial recognition of the equity componentof a compound financial instrument that contains both liability and equity component.(iii) Unused tax losses and unused tax creditsUnused tax losses and unused tax credits generated from daily operation of the Company itselfDeductible loss refers to the loss calculated and permitted according to the requirement of tax lawthat can be offset against taxable income in future periods. The criteria for recognising deferred taxassets arising from the carryforward of unused tax losses and tax credits are the same as the criteriafor recognising deferred tax assets arising from deductible temporary differences. The Companyrecognises a deferred tax asset arising from unused tax losses or tax credits only to the extent thatthere is convincing other evidence that sufficient taxable profit will be available against which theunused tax losses or unused tax credits can be utilised by the Company. Income taxes in currentprofit or loss shall be deducted as well.Unused tax losses and unused tax credits arising from a business combinationUnder a business combination, the acquiree’s deductible temporary differences which do not satisfythe criteria at the acquisition date for recognition of deferred tax asset shall not be recognised.Within 12 months after the acquisition date, if new information regarding the facts andcircumstances exists at the acquisition date and the economic benefit of the acquiree’s deductibletemporary differences at the acquisition is expected to be realised, the Company shall recogniseacquired deferred tax benefits and reduce the carrying amount of any goodwill related to thisacquisition. If goodwill is reduced to zero, any remaining deferred tax benefits shall be recognisedin profit or loss. All other acquired deferred tax benefits realised shall be recognised in profit orloss.(iv) Temporary difference generated in consolidation eliminationWhen preparing consolidated financial statements, if temporary difference between carrying valueof the assets and liabilities in the consolidated financial statements and their taxable bases isgenerated from elimination of inter-company unrealized profit or loss, deferred tax assets ordeferred tax liabilities shall be recognised in the consolidated financial statements, and income taxesexpense in current profit or loss shall be adjusted as well except for deferred tax related totransactions or events recognised directly in equity and business combination.(v) Share-based payment settled by equity
~ 165 ~
If tax authority permits tax deduction that relates to share-based payment, during the period inwhich the expenses are recognised according to the accounting standards, the Company estimatesthe tax base in accordance with available information at the end of the accounting period and thetemporary difference arising from it. Deferred tax shall be recognised when criteria of recognitionare satisfied. If the amount of estimated future tax deduction exceeds the amount of the cumulativeexpenses related to share-based payment recognised according to the accounting standards, the taxeffect of the excess amount shall be recognised directly in equity.(vi)Dividends arising from financial instruments classified as equity instrumentsFor financial instruments classified as equity instruments by the Company as the issuer, whererelated dividend payments are deductible for income tax purposes under applicable tax regulations,the Company recognises the associated income tax effects when dividends payable are recognised.The income tax effects are recognised in profit or loss if the distributed profits arise fromtransactions or events previously recognised in profit or loss. Conversely, if the distributed profitsarise from transactions or events previously recognised in equity, the corresponding income taxeffects are recognised directly in equity items.(d) Basis for deferred income tax assets and deferred income tax liabilities presented on a netbasisThe Company shall offset deferred tax assets and deferred tax liabilities if, and only if:
(i) the Company has a legally enforceable right to set off current tax assets against current taxliabilities; and(ii) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the sametaxation authority on either:
? the same taxable entity; or? different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or torealise the assets and settle the liabilities simultaneously, in each future period in which significantamounts of deferred tax liabilities or assets are expected to be settled or recovered.
3.30 Leases
(a) Identifying a leaseAt inception of a contract, the Company shall assess whether the contract is, or contains, a lease. Acontract is, or contains, a lease if the contract conveys the right to control the use of one or moreidentified assets for a period of time in exchange for consideration. To assess whether a contractconveys the right to control the use of an identified asset for a period of time, the Company shallassess whether, throughout the period of use, the customer has the right to obtain substantially all of
~ 166 ~
the economic benefits from use of the identified asset and to direct the use of the identified asset.(b) Identifying a separate lease componentWhen a contract includes more than one separate lease components, the Company shall separatecomponents of the contract and account for each lease component separately. The right to use anunderlying asset is a separate lease component if both conditions have been satisfied: (i) the lesseecan benefit from use of the underlying asset either on its own or together with other resources thatare readily available to the lessee; (ii) the underlying asset is neither highly dependent on, norhighly interrelated with, the other underlying assets in the contract.(c) The Company as a lesseeAt the commencement date, the Company identifies the lease that has a lease term of 12 months orless and does not contain a purchase option as a short-term lease. A lease qualifies as a lease of alow-value asset if the nature of the asset is such that, when new, the asset is typically of low value.If the Company subleases an asset, or expects to sublease an asset, the head lease does not qualifyas a lease of a low-value asset.For all the short-term leases or leases for which the underlying asset is of low value, the Companyshall recognise the lease payments associated with those leases as cost of relevant asset or expensesin current profit or loss on a straight-line basis over the lease term.Except for the election of simple treatment as short-term lease or lease of a low-value asset asmentioned above, at the commencement date, the Company shall recognise a right-of-use asset anda lease liability.(i) Right-of-use assetA right-of-use asset is an asset that represents a lessee’s right to use an underlying asset for the leaseterm.At the commencement date, the Company shall initially measure the right-of-use asset at cost. Thecost of the right-of-use asset shall comprise:
? the amount of the initial measurement of the lease liability；? any lease payments made at or before the commencement date, less any lease incentives received;? any initial direct costs incurred by the lessee; and? an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoringthe site on which it is located or restoring the underlying asset to the condition required by the terms andconditions of the lease. The Company recognises and measures the cost in accordance with the recognitioncriteria and measurement method for estimated liabilities, details please refer to Notes 3.26. Those costsincurred to produce inventories shall be included in the cost of inventories.
~ 167 ~
The right-of-use asset shall be depreciated according to the categories using straight‐line method.If it is reasonably certain that the ownership of the underlying asset shall be transferred to the lesseeby the end of the lease term, the depreciation rate shall be determined based on the classification ofthe right-of- use asset and estimated residual value rate from the commencement date to the end ofthe useful life of the underlying asset. Otherwise, the depreciation rate shall be determined based onthe classification of the right-of-use asset from the commencement date to the earlier of the end ofthe useful life of the right-of-use asset or the end of the lease term.The depreciation method, estimated useful life, residual rates and annual depreciation rates whichare determined according to the categories of right-of-use asset are listed as followings:
| Category | Depreciation method | Estimated useful life (year) | Residualrates (%) | Annual depreciation rates (%) |
| Buildings and constructions | straight‐line method | 3.00-10.00 | 0.00 | 10.00-33.33 |
| Machinery equipment | straight‐line method | 3.00 | 0.00 | 33.33 |
(ii) Lease liabilityAt the commencement date, the lease liability shall be measured at the present value of the leasepayments that are not paid at that date. The lease payments included in the measurement of the leaseliability comprise the following 5 items:
? fixed payments and in-substance fixed payments, less any lease incentives receivable;? variable lease payments that depend on an index or a rate；? the exercise price of a purchase option if the lessee is reasonably certain to exercise that option；? payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option toterminate the lease；? amounts expected to be payable by the lessee under residual value guarantees.
In order to calculate the present value of the lease payments, interest rate implicit in the lease shallbe used as the discount rate. If that rate cannot be readily determined, the Company shall use theincremental borrowing rate. The difference between the lease payments and its present value shallbe recognised as unrecognised financing charges, calculated bases on the discount rate of thepresent value of the lease payments in each period within the lease term and recorded as interestexpense in current profit or loss. Variable lease payments not included in the measurement of leaseliabilities shall be recognised in current profit or loss when incurred.After the commencement date, the Company shall remeasure the lease liability based on the revisedpresent value of the lease payments and adjust the carrying amount of the right-of-use asset if there
~ 168 ~
is a change in the in-substance fixed payments, or change in the amounts expected to be payableunder a residual value guarantee, or change in an index or a rate used to determine lease payments,or change in the assessment or exercising of an option to purchase the underlying asset, or an optionto extend or terminate the lease.(d) The Company as a lessorAt the commencement date, the Company shall classify a lease as a finance lease if it transferssubstantially all the risks and rewards incidental to ownership of an underlying asset, otherwise itshall be classified as an operating lease.(i) Operating leasesThe Company shall recognise lease payments from operating leases as income on a straight-linebasis over the term of the relevant lease and the initial direct costs incurred in obtaining anoperating lease shall be capitalised and recognised as an expense over the lease term on the samebasis as the lease income. The Company shall recognise the variable lease payments relating to theoperating lease but not included in the measurement of the lease receivables into current profit orloss when incurred.(ii) Finance leasesAt the commencement date, the Company shall recognise the lease receivables at an account equalto the net investment in the lease (the sum of the present value of the unguaranteed residual valuesand the lease payment that are not received at the commencement date discounted at the interest rateimplicit in the lease) and derecognise the asset relating to the finance lease. The Company shallrecognise interest income using the interest rate implicit in the lease over the lease term.The Company shall recognise the variable lease payments relating to the finance lease but notincluded in the measurement of the net investment in the lease into current profit or loss whenincurred.(e) Lease modifications(i) A lease modification accounted for as a separate leaseThe Company shall account for a modification to a lease as a separate lease, if both:
? the modification increases the scope of the lease by adding the right to use one or more underlying assets;and? the consideration for the lease increases by an amount commensurate with the stand-alone price for theincrease in scope.
(ii) A lease modification not accounted for as a separate lease
~ 169 ~
The Company as a lesseeAt the effective date of the lease modification, the Company shall redetermine the lease term of themodified lease and remeasure the lease liability by discounting the revised lease payments using arevised discount rate. The revised discount rate is determined as the interest rate implicit in the leasefor the remainder of the lease term, if that rate can be readily determined, or the incrementalborrowing rate at the effective date of the modification, if the interest rate implicit in the leasecannot be readily determined.The Company shall account for the remeasurement of the lease liability by:
? decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease
for lease modifications that decrease the scope of the lease or shorten the lease term. The Company shallrecognise in profit or loss any gain or loss relating to the partial or full termination of the lease.? Making a corresponding adjustment to the carrying amount of the right-of-use asset for all other leasemodifications.
The Company as a lessorThe Company shall account for a modification to an operating lease as a new lease from theeffective date of the modification, considering any prepaid or accrued lease payments relating to theoriginal lease as part of the lease payments for the new lease.For a modification to a finance lease that is not accounted for as a separate lease, the Company shallaccount for the modification as follows:
? if the lease would have been classified as an operating lease had the modification been in effect at theinception date, the Company shall account for the lease modification as a new lease from the effective date ofthe modification and measure the carrying amount of the underlying asset as the net investment in the leaseimmediately before the effective date of the lease modification;? if the lease would have been classified as a finance lease had the modification been in effect at the inceptiondate, the Company shall account for the lease modification according to the requirements in the modificationor renegotiation of the contract.
(f) Sale and leasebackThe Company shall determine whether the transfer of an asset under the sale and leasebacktransaction is a sale of that asset according to the policies in Note 3.27.(i) The Company as a seller (lessee)If the transfer of the asset is not a sale, the Company shall continue to recognise the transferredasset and shall recognise a financial liability equal to the transfer proceeds. It shall account for thefinancial liability according to Note 3.10. If the transfer of the asset is a sale, the Company shall
~ 170 ~
measure the right-of-use asset arising from the leaseback at the proportion of the previous carryingamount of the asset that relates to the right of use retained by the Company. Accordingly, theCompany shall recognise only the amount of any gain or loss that relates to the rights transferred tothe buyer-lessor.(ii) The Company as a buyer (lessor)If the transfer of the asset is not a sale, the Company shall not recognise the transferred asset andshall recognise a financial asset equal to the transfer proceeds. It shall account for the financial assetaccording to Note 3.10. If the transfer of the asset is a sale, the Company shall account for thepurchase of the asset applying applicable Accounting Standards of Business Enterprises, and for thelease applying the lessor accounting requirements.
3.31 Changes in Significant Accounting Policies and Accounting Estimates(a) Changes in accounting polices(i) Reclassification of assurance-type warranty expensesThe Compilation 2024 of Application Guidance for Enterprise Accounting Standards issued bythe Ministry of Finance in March 2024 and Interpretation of Accounting Standards for BusinessEnterprises No.18 issued on 6 December 2024 require that expenses related to assurance-typewarranties be recognised in cost of sales. The implementation of these provisions had no materialimpact on the Company’s financial statements for the reporting period.(ii) Implementation of Interpretation of Accounting Standards for Business Enterprises No.17On 25 October 2023, the Ministry of Finance issued Interpretation of Accounting Standardsfor Business Enterprises No.17 (Cai Kuai [2023] No. 21) (hereinafter referred to as “InterpretationNo. 17”), which was effective from January 1, 2024. The Company has adopted Interpretation No.17 since 1 January 2024.A. Classification between Current and Non-Current Liabilities
The Company has adopted Interpretation No. 17 on the classification of current liabilities andnon-current liabilities on 1 January 2024. This regulation did not have a significant impact on theCompany's financial position and operating results.
B. Disclosure of Supplier Financing Arrangements
The Company has adopted the disclosure regarding the financing arrangements for supplierson 1 January 2024. This regulation did not have a significant impact on the Company's financialposition and operating results.
C. Accounting Treatment of Sale-and-leaseback Transaction
The Company has adopted the accounting treatment regulations on sale and leasebacktransactions as stipulated in Interpretation No. 17 on 1 January 2024. This regulation did not have a
~ 171 ~
significant impact on the Company's financial position and operating results.(b) Significant changes in accounting estimatesThe Company has no significant changes in accounting estimates for the reporting period.
4. TAXATION
4.1Major Categories of Tax and Tax Rates Applicable to the Company
| Categories of tax | Basis of tax assessment | Tax rate |
| Value added tax (VAT) | Valur added in the course of sales of goods and rendering of services | 13%, 9%, 6% |
| Consumption duty | Taxable revenue | Tax by quantity: CNY 1.00 per kilogram or litre of distrilled wine sold; Tax by revenue: 20% on taxable revenue from sale of distrilled wine |
| Urban maintenance and construction tax | Transaction tax payable | 7%, 5% |
| Education surcharge | Transaction tax payable | 3% |
| Local education surcharge | Transaction tax payable | 2% |
| Corporate income tax (CIT) | Taxable income | 25% |
The basic income tax rate of the company is 25%, and the actual income tax rate of some subsidiariesis shown in the following table:
| Name of Taxpayer | Abbreviation | Rate of Income Tax |
| Anhui Longrui Glass Co., Ltd. | Longrui Glass | 15.00% |
| Anhui Ruisi Weier Technology Co., Ltd. | Ruisi Weier | 15.00% |
| Anhui Runan Xinke Testing Technology Co., Ltd. | Runan Xinke | 15.00% |
| Anhui Gujing Distillery Wine Theme Hotel Management Co., Ltd | Theme Hotel | 20.00% |
| Anhui Gu Qi Distillery Co., Ltd. | Anhui Gu Qi Distillery | 20.00% |
| Baozhou Gujing Guest House Co., Ltd. | GJ Guest House | 20.00% |
| Anhui Jiuhao ChinaRail Construction Engineering Co., Ltd. | Jiuhao ChinaRail | 20.00% |
| Anhui Guge Culture Media Co., LTD. | Guge Culture | 20.00% |
| Hubei Junlou Culture Travel Co., Ltd. | Junlou Culture | 20.00% |
| Hubei HHL Beverage Co., Ltd. | HHL Beverage | 20.00% |
| Wuhan Yashibo Technology Co., Ltd. | Yashibo | 20.00% |
~ 172 ~
| Name of Taxpayer | Abbreviation | Rate of Income Tax |
| Hubei Xinjia Testing Technology Co., Ltd. | Xinjia Testing | 20.00% |
| Ezhou Junya Trading Co., Ltd. | Ezhou Junya Trading | 20.00% |
| Wuhan Juntai Trading Co., Ltd. | Wuhan Juntai Trading | 20.00% |
| Wuhan Gulou Junhe Trading Co., Ltd. | Wuhan Gulou Junhe | 20.00% |
| Wuhan Gulou Juntai Trading Co., Ltd. | Wuhan Gulou Juntai | 20.00% |
| Anhui Gujing Health Technology Co., Ltd | GJ Health Technology | 15.00% |
4.2Tax Preference
(i) Ruisi Weier’s High-Tech Enterprise Status was approved by the Anhui Science and TechnologyDepartment (Anhui STD)bthrough WanKeQiMi [2022] No. 482 and was issued the High-TechEnterprise Certificate (GR202234000476) with the validity term of 3 years. In accordance with theCorporate Income Tax Law of the People’s Republic of China, the CIT rate applicable to RuisiWeier for the period from 1 January 2022 to 31 Decmeber 2024 is 15%.(ii) Longrui Glass’s High-Tech Enterprise Status was jointly approved by the Anhui STD, AnhuiFinance Department (Anhui FiD) and Anhui Tax Office (Anhui PAT) through the "Notice on theFiling and Publicity of the First Batch of High-tech Enterprises Recognized by the Anhui ProvinceCertification Body in 2022" and was issued the High-Tech Enterprise Certificate(GR202234004359) with the validity term of 3 years. In accordance with the Corporate Income TaxLaw of the People’s Republic of China, the CIT rate applicable to Longrui Glass for the period from1 January 2022 to 31 Decemeber 2024 is 15%.(iii) Runan Xinke’s High-Tech Enterprise Status was approved by the relevant provisions of the"Administrative Measures for the Recognition of High-tech Enterprises" (Guo Ke Fa Huo [2016]No. 32) and the "Guidelines for the Administration of the Recognition of High-tech Enterprises"(Guo Ke Fa Huo [2016] No. 195), and was issued the High-Tech Enterprise Certificate(GR202434002657) with the validity term of 3 years. In accordance with the Corporate Income TaxLaw of the People’s Republic of China, the CIT rate applicable to Runan Xinke for the period from1 January 2024 to 31 Decmeber 2026 is 15%.(iv) GJ Health Technology’s High-Tech Enterprise Status was approved by the relevant provisionsof the "Administrative Measures for the Recognition of High-tech Enterprises" (Guo Ke Fa Huo[2016] No. 32) and the "Guidelines for the Administration of the Recognition of High-techEnterprises" (Guo Ke Fa Huo [2016] No. 195), and was issued the High-Tech Enterprise Certificate(GR202434002983) with the validity term of 3 years. In accordance with the Corporate Income TaxLaw of the People’s Republic of China, the CIT rate applicable to GJ Health Technology for theperiod from 1 January 2024 to 31 Decmeber 2026 is 15%.
~ 173 ~
(v) Announcement on Preferential Income Tax Policies for Small and Micro Enterprises andIndividual Industrial and Commercial Households (Announcement No. 12 of 2023 by the GeneralAdministration of Taxation of the Ministry of Finance), from 1 January 2023 to 31 December 2027,the part of the annual taxable income of small and micro profit enterprises that does not exceed 3million yuan shall be included in the taxable income at a reduced rate of 25%. Pay corporate incometax at a rate of 20%. Theme Hotel, GJ Guest House, Gu Qi Distillery, Hubei Junlou Cultural, HHLBeverage, Yashibo, Xinjia Testing, Ezhou Junya Trading ,Wuhan Juntai Trading, Wuhan GulouJunhe, ,Wuhan Gulou Juntai, Anhui Guge Culture and Jiuhao ChinaRail comply with the relevantprovisions of small small profit enterprise income tax preferential policy.
5. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
5.1 Monetary funds
| Items | 31 December 2024 | 31 December 2023 |
| Cash on hand | 62,770.67 | 78,223.44 |
| Cash at bank | 15,830,320,147.70 | 15,674,993,088.76 |
| Other monetary funds | 63,721,548.16 | 291,300,431.99 |
| Total | 15,894,104,466.53 | 15,966,371,744.19 |
Notes: At the end of 2024, the bank deposits were used to pledge thebank acceptance bill of 690.00 million, other restricted funds of cash atbank were 377,800 yuan. 10.59 million of other monetary funds wereused as collateral for the issuance of bank acceptance drafts that couldnot be withdrawn in advance, and 0.0019 million yuan of other restrictedfunds were in other monetary funds. Except for the pre-mentioned,monetary funds as of the statement date was not subject to limitationon usage such as pledging or freezing or risk on recovery.
5.2 Financial Assets Held-for-trading
| Items | 31 December 2024 | 31 December 2023 |
~ 174 ~
| Items | 31 December 2024 | 31 December 2023 |
| Financial assets at fair value through profit or loss | 60,184,353.81 | 719,987,547.42 |
| Including: Structural financial products | 60,184,353.81 | 719,987,547.42 |
| Total | 60,184,353.81 | 719,987,547.42 |
5.3 Accounts Receivable
(a) Accounts receivable by aging
| Aging | 31 December 2024 | 31 December 2023 |
| Within one year | 65,651,524.19 | 68,276,125.36 |
| Including: Within 6 months | 62,227,176.82 | 65,998,078.79 |
| 7 months to 1 years | 3,424,347.37 | 2,278,046.57 |
| 1-2 years | 5,240,767.08 | 1,209,303.29 |
| 2-3 years | 490,019.14 | 7,827,391.86 |
| Over 3 years | 7,921,327.52 | 173,492.54 |
| Subtotal | 79,303,637.93 | 77,486,313.05 |
| Less: provision for bad debt | 9,483,902.94 | 8,878,393.78 |
| Total | 69,819,734.99 | 68,607,919.27 |
(b) Accounts receivable by bad debt provision method
| Category | 31 December 2024 | ||||
| Book balance | Provision for bad debt | Carrying amount | |||
| Amount | Proportion (%) | Amount | Provision ratio (%) | ||
| Provision for bad debt recognised individually | 7,792,783.72 | 9.83 | 7,792,783.72 | 100.00 | - |
| Provision for bad debt recognised by groups | 71,510,854.21 | 90.17 | 1,691,119.22 | 2.36 | 69,819,734.99 |
| Including: Group1 | - | - | - | - | - |
| Group2 | 71,510,854.21 | 90.17 | 1,691,119.22 | 2.36 | 69,819,734.99 |
| Total | 79,303,637.93 | 100.00 | 9,483,902.94 | 11.96 | 69,819,734.99 |
(Continued)
| Category | 31 December 2023 | ||||
| Book balance | Provision for bad debt | Carrying amount | |||
| Amount | Proportion (%) | Amount | Provision ratio (%) | ||
~ 175 ~
| Provision for bad debt recognised individually | 7,792,783.72 | 10.06 | 7,792,783.72 | 100.00 | - |
| Provision for bad debt recognised by groups | 69,693,529.33 | 89.94 | 1,085,610.06 | 1.56 | 68,607,919.27 |
| Including: Group1 | - | - | - | - | - |
| Group2 | 69,693,529.33 | 89.94 | 1,085,610.06 | 1.56 | 68,607,919.27 |
| Total | 77,486,313.05 | 100.00 | 8,878,393.78 | 11.46 | 68,607,919.27 |
As at 31 December 2024, accounts receivable with bad debt provision recognised by group 2
| Aging | 31 December 2024 | ||
| Accounts receivable | Provision for bad debt | Provision ratio (%) | |
| Within one year | 65,651,524.19 | 793,489.14 | 1.21 |
| Including: Within 6 months | 62,227,176.82 | 622,271.77 | 1.00 |
| T/o: 7 months to 1 years | 3,424,347.37 | 171,217.37 | 5.00 |
| 1-2 years | 5,240,767.08 | 524,076.71 | 10.00 |
| 2-3 years | 490,019.14 | 245,009.57 | 50.00 |
| Over 3 years | 128,543.80 | 128,543.80 | 100.00 |
| Total | 71,510,854.21 | 1,691,119.22 | 2.36 |
(Continued)
| Aging | 31 December 2023 | ||
| Accounts receivable | Provision for bad debt | Provision ratio (%) | |
| Within one year | 68,276,125.36 | 773,883.12 | 1.13 |
| Including: Within 6 months | 65,998,078.79 | 659,980.79 | 1.00 |
| T/o: 7 months to 1 years | 2,278,046.57 | 113,902.33 | 5.00 |
| 1-2 years | 1,209,303.29 | 120,930.33 | 10.00 |
| 2-3 years | 34,608.14 | 17,304.07 | 50.00 |
| Over 3 years | 173,492.54 | 173,492.54 | 100.00 |
| Total | 69,693,529.33 | 1,085,610.06 | 1.56 |
Note: For details of recognition criteria and explanation for provision of bad debt by groups, pleaserefer to Notes 3.10.(c) Changes of provision for bad debt during the reporting period
| Category | 31 December | Changes during the reporting period | 31 December |
~ 176 ~
| 2023 | Provision | Business combination not under common control | Recovery or reversal | Elimination or write-off | 2024 | |
| Individually significant receivables subject to individual impairment assessment | 7,792,783.72 | - | - | - | - | 7,792,783.72 |
| Individually insignificant receivables subject to individual impairment assessment | - | - | - | - | - | - |
| Group 2 | 1,085,610.06 | 741,364.58 | - | 135,855.42 | - | 1,691,119.22 |
| Total | 8,878,393.78 | 741,364.58 | - | 135,855.42 | - | 9,483,902.94 |
(d) Accounts receivable written off during the reporting periodNot applicable.(e) Top five closing balances by entity
| Entity name | Balance of accounts receivable as at 31 December 2024 | Balance of contract assets as at 31 December 2024 | Balance of accounts receivable and contract assets as at 31 December 2024 | Proportion of the balance to the total accounts receivable and contract assets (%) | Provision for bad debt of accounts receivable and contract assets |
| Top 1 | 13,565,594.78 | - | 13,565,594.78 | 17.11 | 135,655.95 |
| Top 2 | 9,669,331.99 | - | 9,669,331.99 | 12.19 | 96,693.32 |
| Top 3 | 7,792,783.72 | - | 7,792,783.72 | 9.83 | 7,792,783.72 |
| Top 4 | 6,804,266.61 | - | 6,804,266.61 | 8.58 | 68,042.67 |
| Top 5 | 4,041,150.58 | - | 4,041,150.58 | 5.10 | 40,411.51 |
| Total | 41,873,127.68 | - | 41,873,127.68 | 52.81 | 8,133,587.17 |
5.4 Accounts Receivable Financing
(a) Accounts receivable financing by category
~ 177 ~
| Type | 31 December 2024 | ||
| Book balance | Provision for bad debt | Carrying amount | |
| Bank acceptance bills | 2,966,732,807.75 | - | 2,966,732,807.75 |
| Commercial acceptance bills | - | - | - |
| Total | 2,966,732,807.75 | - | 2,966,732,807.75 |
(Continued)
| Type | 31 December 2023 | ||
| Book balance | Provision for bad debt | Carrying amount | |
| Bank acceptance bills | 957,560,115.73 | - | 957,560,115.73 |
| Commercial acceptance bills | - | ||
| Total | 957,560,115.73 | - | 957,560,115.73 |
(b) Pledged accounts receivable financing at 31 December 2024Not applicable.(c) Accounts receivable financing which were discounted or endorsed but not due at 31December 2024
| Items | Amount derecognised | Amount not derecognised |
| Bank acceptance bills | 7,588,771,057.82 | - |
| Commercial acceptance bills | - | - |
| Total | 7,588,771,057.82 | - |
(d) Accounts receivable financing by loss allowance provision method
| Category | 31 December 2024 | ||||
| Book balance | Provision for bad debt | Carrying amount | |||
| Amount | Proportion (%) | Amount | Provision ratio (%) | ||
| Provision for loss allowance recognised individually | - | - | - | - | - |
| Provision for loss allowance recognised by groups | 2,966,732,807.75 | 100.00 | - | - | 2,966,732,807.75 |
| Including:Group1 | - | - | - | - | - |
| Group2 | 2,966,732,807.75 | 100.00 | - | - | 2,966,732,807.75 |
| Total | 2,966,732,807.75 | 100.00 | - | - | 2,966,732,807.75 |
~ 178 ~
(Continued)
| Category | 31 December 2023 | ||||
| Book balance | Provision for bad debt | Carrying amount | |||
| Amount | Proportion (%) | Amount | Provision ratio (%) | ||
| Provision for loss allowance recognised individually | - | - | - | - | - |
| Provision for loss allowance recognised by groups | 957,560,115.73 | 100.00 | - | - | 957,560,115.73 |
| Including:Group1 | - | - | - | - | - |
| Group2 | 957,560,115.73 | 100.00 | - | - | 957,560,115.73 |
| Total | 957,560,115.73 | 100.00 | - | - | 957,560,115.73 |
(e) Movement of impairment allowanceNot applicable.(f) Accounts receivable financing written off during the reporting periodNot applicable.
5.5 Advances to Suppliers
(a) Advances to suppliers by aging
| Aging | 31 December 2024 | 31 December 2023 | ||
| Amount | Proportion (%) | Amount | Proportion (%) | |
| Within one year | 276,817,824.51 | 99.41 | 90,144,117.89 | 98.40 |
| 1 to 2 years | 1,651,976.53 | 0.59 | 995,545.31 | 1.09 |
| 2 to 3 years | 2,475.24 | - | 467,678.98 | 0.51 |
| Over 3 years | - | - | - | - |
| Total | 278,472,276.28 | 100.00 | 91,607,342.18 | 100.00 |
Note: The book balance of advance payments at the end of 2024 increased by 203.98% comparedwith that at the end of 2023, mainly due to higher prepayments for advertising in 2024.(b) Top five closing balances by entity
| Entity name | Balance as at 31 December 2024 | Proportion of the balance to the total advances to suppliers (%) |
| Top 1 | 206,759,093.44 | 74.25 |
| Top 2 | 16,850,000.00 | 6.05 |
~ 179 ~
| Entity name | Balance as at 31 December 2024 | Proportion of the balance to the total advances to suppliers (%) |
| Top 3 | 4,873,157.22 | 1.75 |
| Top 4 | 4,425,816.07 | 1.59 |
| Top 5 | 3,100,000.00 | 1.11 |
| Total | 236,008,066.73 | 84.75 |
5.6 Other Receivables
(a) Other receivables by category
| Items | 31 December 2024 | 31 December 2023 |
| Interest receivable | - | - |
| Dividend receivable | - | - |
| Other receivables | 86,894,981.69 | 49,178,194.70 |
| Total | 86,894,981.69 | 49,178,194.70 |
(b) Other Receivables(i) Other receivables by aging
| Aging | 31 December 2024 | 31 December 2023 |
| Within one year | 85,852,603.45 | 46,992,878.99 |
| Including: Within 6 months | 83,972,284.84 | 40,097,431.00 |
| 7 months to 1 years | 1,880,318.61 | 6,895,447.99 |
| 1-2 years | 1,935,988.11 | 2,308,597.13 |
| 2-3 years | 467,455.41 | 1,706,650.01 |
| Over 3 years | 7,525,037.31 | 34,652,068.31 |
| Subtotal | 95,781,084.28 | 85,660,194.44 |
| Less: provision for bad debt | 8,886,102.59 | 36,481,999.74 |
| Total | 86,894,981.69 | 49,178,194.70 |
(ii) Other receivables by nature
| Nature | 31 December 2024 | 31 December 2023 |
| Security investments | - | 28,635,660.22 |
| Margin deposits | 22,576,214.35 | 7,558,471.55 |
| Platform promotion fee | 21,949,424.87 | 17,850,424.80 |
| Rentals and utilities receivable | 12,656,104.33 | 8,593,773.81 |
| Others | 38,599,340.73 | 23,021,864.06 |
| Subtotal | 95,781,084.28 | 85,660,194.44 |
~ 180 ~
| Nature | 31 December 2024 | 31 December 2023 |
| Less: provision for bad debt | 8,886,102.59 | 36,481,999.74 |
| Total | 86,894,981.69 | 49,178,194.70 |
(iii) Other receivables by bad debt provision methodA. As at 31 December 2024, provision for bad debt recognised based on three stages model
| Stages | Book balance | Provision for bad debt | Carrying acount |
| Stage 1 | 95,781,084.28 | 8,886,102.59 | 86,894,981.69 |
| Stage 2 | - | - | - |
| Stage 3 | - | - | - |
| Total | 95,781,084.28 | 8,886,102.59 | 86,894,981.69 |
As at 31 December 2024, provision for bad debt at stage 1:
| Category | Book balance | Expected credit loss rate in the next 12 months (%) | Provision for bad debt | Carrying amount |
| Provision for bad debt recognised individually | - | - | - | - |
| Provision for bad debt recognised by groups | 95,781,084.28 | 9.28 | 8,886,102.59 | 86,894,981.69 |
| Including: Group 1 | ||||
| Group 2 | 95,781,084.28 | 9.28 | 8,886,102.59 | 86,894,981.69 |
| Total | 95,781,084.28 | 9.28 | 8,886,102.59 | 86,894,981.69 |
Details of Group 2 receivables as of the statement date
| Age group | 31 December 2024 | ||
| Gross | Impairment allowance | Provision ratio (%) | |
| Within 1 year | 85,852,603.45 | 933,738.76 | 1.09 |
| Including: Within 6 months | 83,972,284.84 | 839,722.83 | 1.00 |
| T/ o: 7 months to 1 years | 1,880,318.61 | 94,015.93 | 5.00 |
| 1 to 2 years | 1,935,988.11 | 193,598.81 | 10.00 |
| 2 to 3 years | 467,455.41 | 233,727.71 | 50.00 |
| Over 3 years | 7,525,037.31 | 7,525,037.31 | 100.00 |
| Total | 95,781,084.28 | 8,886,102.59 | 9.28 |
~ 181 ~
B．As at 31 December 2023, provision for bad debt recognised based on three stages model
| Stages | Book balance | Provision for bad debt | Carrying amount |
| Stage 1 | 57,024,534.22 | 7,846,339.52 | 49,178,194.70 |
| Stage 2 | - | - | - |
| Stage 3 | 28,635,660.22 | 28,635,660.22 | - |
| Total | 85,660,194.44 | 36,481,999.74 | 49,178,194.70 |
As at 31 December 2023, provision for bad debt at stage 1:
| Category | Book balance | Expected credit loss rate in the next 12 months (%) | Provision for bad debt | Carrying amount |
| Provision for bad debt recognised individually | - | - | - | - |
| Provision for bad debt recognised by groups | 57,024,534.22 | 13.76 | 7,846,339.52 | 49,178,194.70 |
| Including: Group 1 | - | - | - | - |
| Group 2 | 57,024,534.22 | 13.76 | 7,846,339.52 | 49,178,194.70 |
| Total | 57,024,534.22 | 13.76 | 7,846,339.52 | 49,178,194.70 |
Details of Group 2 receivables as of the statement date
| Age group | 31 December 2023 | ||
| Gross | Impairment allowance | Provision ratio (%) | |
| Within 1 year | 46,992,878.99 | 745,746.71 | 1.59 |
| Including: Within 6 months | 40,097,431.00 | 400,974.31 | 1.00 |
| T/ o: 7 months to 1 years | 6,895,447.99 | 344,772.40 | 5.00 |
| 1 to 2 years | 2,308,597.13 | 230,859.71 | 10.00 |
| 2 to 3 years | 1,706,650.01 | 853,325.01 | 50.00 |
| Over 3 years | 6,016,408.09 | 6,016,408.09 | 100.00 |
| Total | 57,024,534.22 | 7,846,339.52 | 13.76 |
As at 31 December 2023, provision for bad debt at stage 3:
| Category | Book balance | Expected credit loss ratio (%) over the entire duration | Provision for bad debt | Carrying amount |
~ 182 ~
| Category | Book balance | Expected credit loss ratio (%) over the entire duration | Provision for bad debt | Carrying amount |
| Provision for bad debt recognised individually | 28,635,660.22 | 100.00 | 28,635,660.22 | - |
| Provision for bad debt recognised by groups | - | - | - | - |
| Including: Group 1 | - | - | - | - |
| Group 2 | - | - | - | - |
| Total | 28,635,660.22 | 100.00 | 28,635,660.22 | - |
Details of receivables subject to individual assessment as of 31 December 2023
| Entity name | 31 December 2023 | |||
| Book balance | Provision for bad debt | Provision ratio (%) | Reason for impairment | |
| Hengxin Securities Co., Ltd. | 28,635,660.22 | 28,635,660.22 | 100.00 | In bankruptcy |
| Total | 28,635,660.22 | 28,635,660.22 | 100.00 | - |
(iv) Changes of provision for bad debt during the reporting period
| Category | 31 December 2023 | Changes during the reporting period | 31 December 2024 | |||
| Provision | Business combination not under common control | Recovery or reversal | Elimination or write-off | |||
| Individual assessment | 28,635,660.22 | - | - | - | 28,635,660.22 | - |
| Portfolio assessment | 7,846,339.52 | 1,337,035.77 | - | 297,272.70 | - | 8,886,102.59 |
| Total | 36,481,999.74 | 1,337,035.77 | - | 297,272.70 | 28,635,660.22 | 8,886,102.59 |
(v) Other receivables written off during the reporting period
| Items | Amount |
| Hengxin Securities Co., Ltd. | 28,635,660.22 |
Including: Significant write-off of other receivables:
~ 183 ~
| Entity name | Nature | Amount | Reason | Incurred from related party transaction or not |
| Hengxin Securities Co., Ltd. | Securities investment | 28,635,660.22 | The bankruptcy proceedings have been concluded. | No |
| Total | — | 28,635,660.22 | — | — |
(vi) Top five closing balances by entity
| Entity name | Nature | Balance as at 31 December 2024 | Aging | Proportion of the balance to the total other receivables (%) | Provision for bad debt |
| Top 1 | Platform promotion fee | 14,579,201.88 | Within 6 months | 15.22 | 145,792.02 |
| Top 2 | Deposit and guarantee | 14,119,000.00 | Within 6 months | 14.74 | 141,190.00 |
| Top 3 | Rent and charges for water, electricity, gas and oil | 6,974,423.05 | Within 6 months | 7.28 | 69,744.23 |
| Top 4 | Platform promotion fee | 4,109,477.83 | Within 6 months | 4.29 | 41,094.78 |
| Top 5 | Other | 3,831,335.00 | Within 6 months | 4.00 | 38,313.35 |
| Total | 43,613,437.76 | 45.53 | 436,134.38 |
5.7 Inventories
(a) Inventories by category
| Items | 31 December 2024 | ||
| Book balance | Provision for impairment | Carrying amount | |
| Raw materials and packaging | 381,830,528.63 | 25,390,458.86 | 356,440,069.77 |
| Semi-finished goods and work in progress | 7,473,416,416.09 | - | 7,473,416,416.09 |
| Finished goods | 1,448,501,178.10 | 14,136,827.38 | 1,434,364,350.72 |
| Total | 9,303,748,122.82 | 39,527,286.24 | 9,264,220,836.58 |
(Continued)
| Items | 31 December 2023 | |||
| Book balance | Provision for impairment | Carrying amount | ||
~ 184 ~
| Items | 31 December 2023 | |||
| Book balance | Provision for impairment | Carrying amount | ||
| Raw materials and packaging | 351,787,097.55 | 20,527,645.11 | 331,259,452.44 | |
| Semi-finished goods and work in progress | 5,811,584,229.52 | - | 5,811,584,229.52 | |
| Finished goods | 1,396,536,633.32 | 19,697,778.77 | 1,376,838,854.55 | |
| Total | 7,559,907,960.39 | 40,225,423.88 | 7,519,682,536.51 | |
(b) Provision for impairment
| Items | 31 December 2023 | Increase during the reporting period | Decrease during the reporting period | 31 December 2024 | ||
| Provision | Business combination not under common control | Reversal or elimination | Others | |||
| Raw materials and packaging | 20,527,645.11 | 17,019,537.19 | - | 12,156,723.44 | - | 25,390,458.86 |
| Finished goods | 19,697,778.77 | 6,566,072.80 | - | 12,127,024.19 | - | 14,136,827.38 |
| Total | 40,225,423.88 | 23,585,609.99 | - | 24,283,747.63 | - | 39,527,286.24 |
5.8 Other Current Assets
| Items | 31 December 2024 | 31 December 2023 |
| Pledged Treasury bond reverse repurchase | - | 25,199,000.00 |
| Interests on deposits | 100,070,417.52 | 26,696,206.46 |
| Deductible taxes and tax allowance | 91,433,444.45 | 83,176,048.90 |
| Total | 191,503,861.97 | 135,071,255.36 |
5.9 Long-term Equity Investments
(a) Details of Long-term Equity Investments
| Investees | 31 December 2023 | Changes during the reporting period | ||||
| Additional investment | Decrease in investment | Investment income/(losses) recognised under equity method | Adjustments of other comprehensive income | Changes in other equity | ||
| I. Associates | ||||||
| Beijing Guge | 5,511,537.65 | - | - | 2,169.42 | ||
~ 185 ~
| Investees | 31 December 2023 | Changes during the reporting period | ||||
| Additional investment | Decrease in investment | Investment income/(losses) recognised under equity method | Adjustments of other comprehensive income | Changes in other equity | ||
| Trading Co., Ltd. (Guge Trading) | ||||||
| Anhui Xunfeijiuzhi Technology Co., Ltd | 4,855,540.61 | - | - | 1,363,393.76 | ||
| Total | 10,367,078.26 | - | - | 1,365,563.18 | ||
(Continued)
| Investees | Changes during the reporting period | 31 December 2024 | Provision for impairment | ||
| Declaration of cash dividends or distribution of profit | Provision for impairment | Others | |||
| I. Associates | |||||
| Guge Trading | - | - | - | 5,513,707.07 | - |
| Xunfeijiuzhi | - | - | - | 6,218,934.37 | - |
| Total | - | - | - | 11,732,641.44 | - |
5.10 Other equity instrument investment
| Items | 31 December 2023 | Changes during the reporting period | 31 December 2024 | ||||
| Additional investment | Decrease in investment | Gaines recognised in other comprehensive income | Losses recognised in other comprehensive income | Others | |||
| Anhui Mingguang Village Commercial Bank (Mingguang VCB) | 63,105,658.07 | - | - | 6,395,172.75 | - | - | 69,500,830.82 |
| Total | 63,105,658.07 | - | - | 6,395,172.75 | - | - | 69,500,830.82 |
(Continued)
~ 186 ~
| Items | Dividend income recognised during the reporting period | Cumulative gains recognised in other comprehensive income | Cumulative losses recognised in other comprehensive income | Amount of other comprehensive income transfer to retained earnings | Reason for designated as fair value through other comprehensive income |
| Anhui Mingguang Village Commercial Bank (Mingguang VCB) | 769,616.25 | 15,652,133.02 | For management holding purposes, it is specified as measured at fair value and changes in it are included in other comprehensive income |
5.11 Investment Properties
(a) Investment properties accounted for using cost model
| Items | Houses and buildings | Land use rights | Total |
| Initial cost: | |||
| Balance as at 31 December 2023 | 84,177,952.61 | 2,644,592.00 | 86,822,544.61 |
| Increase during the reporting period | 5,042,432.33 | - | 5,042,432.33 |
| (i) Reclassification from Fixed assets | 5,042,432.33 | - | 5,042,432.33 |
| Decrease during the reporting period | 146,888.55 | - | 146,888.55 |
| (i) Reclassification to Fixed assets | 146,888.55 | - | 146,888.55 |
| Balance as at 31 December 2023 | 89,073,496.39 | 2,644,592.00 | 91,718,088.39 |
| Accumulated depreciation and amortisation: | |||
| Balance as at 31 December 2023 | 39,275,828.32 | 923,806.10 | 40,199,634.42 |
| Increase during the reporting period | 7,638,423.48 | 62,739.19 | 7,701,162.67 |
| (i) Recognition | 3,927,219.18 | 62,739.19 | 3,989,958.37 |
| (ii) Reclassification from Fixed assets | 3,711,204.30 | 3,711,204.30 | |
| Decrease during the reporting period | 76,368.58 | - | 76,368.58 |
| (i) Reclassification to Fixed assets | 76,368.58 | - | 76,368.58 |
| Balance as at 31 December 2024 | 46,837,883.22 | 986,545.29 | 47,824,428.51 |
| Provision for impairment | |||
| Balance as at 31 December 2023 | - | - | - |
| Increase during the reporting period | - | - | - |
| Decrease during the reporting period | - | - | - |
| Balance as at 31 December 2024 | - | - | - |
| Carrying amount: | |||
| Balance as at 31 December 2024 | 42,235,613.17 | 1,658,046.71 | 43,893,659.88 |
~ 187 ~
| Items | Houses and buildings | Land use rights | Total |
| Balance as at 31 December 2023 | 44,902,124.29 | 1,720,785.90 | 46,622,910.19 |
5.12 Fixed Assets
(a) Fixed assets by category
| Items | 31 December 2024 | 31 December 2023 |
| Fixed assets | 7,896,995,404.62 | 4,596,044,056.92 |
| Disposal of fixed assets | - | - |
| Total | 7,896,995,404.62 | 4,596,044,056.92 |
(b) Fixed assets(i) Details of fixed assets
| Items | Houses and buildings | Machinery equipment | Transportation vehicles | Administrative and other devices | Total |
| Initial cost: | |||||
| Balance as at 31 December 2023 | 3,792,284,000.88 | 2,594,999,842.86 | 80,850,726.07 | 514,466,499.76 | 6,982,601,069.57 |
| Increase during the reporting period | 1,963,807,861.89 | 1,234,152,184.71 | 8,298,401.14 | 575,277,098.97 | 3,781,535,546.71 |
| (i) Purchase | - | 21,267,253.13 | 8,298,401.14 | 31,842,622.41 | 61,408,276.68 |
| (ii)Transfer from construction in progress | 1,963,660,973.34 | 1,212,884,931.58 | - | 543,434,476.56 | 3,719,980,381.48 |
| (iii)Transfer from Investment Properties | 146,888.55 | - | - | - | 146,888.55 |
| Decrease during the reporting period | 9,611,617.01 | 21,892,564.82 | 4,673,601.68 | 6,435,989.30 | 42,613,772.81 |
| (i) Disposal | 4,569,184.68 | 21,892,564.82 | 4,673,601.68 | 6,435,989.30 | 37,571,340.48 |
| (ii) Reclassification to Investment properties | 5,042,432.33 | - | - | - | 5,042,432.33 |
| Balance as at 31 December 2024 | 5,746,480,245.76 | 3,807,259,462.75 | 84,475,525.53 | 1,083,307,609.43 | 10,721,522,843.47 |
| Accumulated depreciation: |
~ 188 ~
| Items | Houses and buildings | Machinery equipment | Transportation vehicles | Administrative and other devices | Total |
| Balance as at 31 December 2023 | 1,079,567,698.80 | 952,856,539.12 | 67,485,170.84 | 282,097,904.02 | 2,382,007,312.78 |
| Increase during the reporting period | 181,691,468.66 | 232,101,638.98 | 5,746,083.73 | 54,546,132.21 | 474,085,323.58 |
| (i) Recognition | 181,615,100.08 | 232,101,638.98 | 5,746,083.73 | 54,546,132.21 | 474,008,955.00 |
| (ii) Transfer from Investment Properties | 76,368.58 | - | - | - | 76,368.58 |
| Decrease during the reporting period | 5,522,515.41 | 19,831,286.86 | 3,838,054.69 | 5,502,545.44 | 34,694,402.40 |
| (i) Disposal | 1,811,311.11 | 19,831,286.86 | 3,838,054.69 | 5,502,545.44 | 30,983,198.10 |
| (ii) Reclassification to Investment properties | 3,711,204.30 | - | - | - | 3,711,204.30 |
| Balance as at 31 December 2024 | 1,255,736,652.05 | 1,165,126,891.24 | 69,393,199.88 | 331,141,490.79 | 2,821,398,233.96 |
| Provision for impairment: | |||||
| Balance as at 31 December 2023 | 2,596,209.90 | 1,375,189.67 | - | 578,300.30 | 4,549,699.87 |
| Increase during the reporting period | - | - | - | - | - |
| (i) Recognition | - | - | - | - | - |
| Decrease during the reporting period | 17,030.55 | 825,164.13 | - | 578,300.30 | 1,420,494.98 |
| (i) Disposal | 17,030.55 | 825,164.13 | - | 578,300.30 | 1,420,494.98 |
| Balance as at 31 December 2024 | 2,579,179.35 | 550,025.54 | - | - | 3,129,204.89 |
| Carrying amount: | |||||
| Balance as at 31 December 2024 | 4,488,164,414.36 | 2,641,582,545.97 | 15,082,325.65 | 752,166,118.64 | 7,896,995,404.62 |
| Balance as at 31 December 2023 | 2,710,120,092.18 | 1,640,768,114.07 | 13,365,555.23 | 231,790,295.44 | 4,596,044,056.92 |
(ii) Fixed assets leasing out under operating leases
~ 189 ~
| Items | Carrying amount at 31 December 2024 |
| Houses and buildings | 42,235,613.17 |
| Total | 42,235,613.17 |
(iii) Fixed assets without certificate of title
| Items | Carrying amount | Reason |
| Houses and buildings | 3,154,259,933.45 | Registration in progress |
| Total | 3,154,259,933.45 |
(iv) At the end of the period, there were no fixed assets with limited use due to mortgage.
5.13 Construction in Progress
(a) Construction in progress by category
| Items | 31 December 2024 | 31 December 2023 |
| Construction in progress | 1,038,780,764.86 | 2,910,735,155.39 |
| Construction materials | - | - |
| Total | 1,038,780,764.86 | 2,910,735,155.39 |
(b) Construction in progress(i) Details of construction in progress
| Items | 31 December 2024 | 31 December 2023 | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Smart Zone | 936,206,415.94 | - | 936,206,415.94 | 2,564,788,149.93 | - | 2,564,788,149.93 |
| Theme Hotel | - | - | - | 225,797,376.40 | - | 225,797,376.40 |
| GJ Plant #12 Wine Cellar | - | - | - | 25,626,044.87 | - | 25,626,044.87 |
| Suizhou Plant | - | - | - | 29,094,832.88 | - | 29,094,832.88 |
| Whisky Project | 33,493,322.27 | - | 33,493,322.27 | |||
| Other projects | 69,081,026.65 | - | 69,081,026.65 | 65,428,751.31 | - | 65,428,751.31 |
| Total | 1,038,780,764.86 | - | 1,038,780,764.86 | 2,910,735,155.39 | - | 2,910,735,155.39 |
(ii) Changes in significant projects of construction in progress
| Projects | Budget (million) | 31 December 2023 | Increase during the reporting period | Transfer to fixed asset | Decrease during the reporting period | 31 December 2024 |
| Smart Zone | 8,289.66 | 2,564,788,149.93 | 1,773,345,209.36 | 3,276,733,763.33 | 125,193,180.02 | 936,206,415.94 |
| Theme Hotel | 625.00 | 225,797,376.40 | 43,607,044.69 | 111,408,877.11 | 157,995,543.98 | - |
~ 190 ~
| Projects | Budget (million) | 31 December 2023 | Increase during the reporting period | Transfer to fixed asset | Decrease during the reporting period | 31 December 2024 |
| GJ Plant #12 Wine Cellar | 190.00 | 25,626,044.87 | 2,705,828.85 | 28,331,873.72 | - | - |
| Suizhou Plant | 600.00 | 29,094,832.88 | 36,730,011.13 | 61,468,512.05 | 4,356,331.96 | - |
| Whisky Project | 155.39 | - | 33,493,322.27 | - | - | 33,493,322.27 |
| Other projects | 1,048.08 | 65,428,751.31 | 292,529,036.62 | 242,037,355.27 | 46,839,406.01 | 69,081,026.65 |
| Total | 10,908.13 | 2,910,735,155.39 | 2,182,410,452.92 | 3,719,980,381.48 | 334,384,461.97 | 1,038,780,764.86 |
(Continued)
| Projects | Proportion of project input to budgets (%) | Rate of progress | Cumulative amount of interest capitalisation | Including: interest capitalised during the reporting period | Interest capitalisation rate during the reporting period (%) | Source of funds |
| Smart Zone | 75.99 | 95.00 | - | - | - | Self-funded, public financing |
| Theme Hotel | 87.69 | 100.00 | - | - | - | Self-funded |
| GJ Plant #12 Wine Cellar | 94.86 | 100.00 | - | - | - | Self-funded |
| Suizhou Plant | 96.52 | 100.00 | 8,803,572.05 | 879,034.72 | 3.35 | Self-funded, loans |
| Whisky Project | 21.55 | 46.00 | - | - | - | Self-funded |
| Other projects | 37.84 | 37.84 | - | - | - | Self-funded |
| Total | 8,803,572.05 | 879,034.72 |
Note: The book value of construction in progress at the end of 2024 decreased by 64.31% comparedwith that at the end of 2023, mainly due to the conversion of each construction in progress projectinto fixed assets.
5.14 Right-of-use Assets
(a) General information of right-of-use assets
| Items | Houses and buildings | Machinery equipment | Total |
| Initial cost: | |||
| Balance as at 31 December 2023 | 108,271,565.09 | - | 108,271,565.09 |
| Increase during the reporting period | 27,349,531.89 | 9,723,022.59 | 37,072,554.48 |
| Decrease during the reporting period | 21,418,333.62 | - | 21,418,333.62 |
| Balance as at 31 December 2024 | 114,202,763.36 | 9,723,022.59 | 123,925,785.95 |
~ 191 ~
| Items | Houses and buildings | Machinery equipment | Total |
| Accumulated depreciation: | |||
| Balance as at 31 December 2023 | 27,233,464.85 | - | 27,233,464.85 |
| Increase during the reporting period | 16,182,302.71 | 567,176.32 | 16,749,479.03 |
| Decrease during the reporting period | 20,350,658.66 | - | 20,350,658.66 |
| Balance as at 31 December 2024 | 23,065,108.90 | 567,176.32 | 23,632,285.22 |
| Provision for impairment: | |||
| Balance as at 31 December 2023 | - | - | - |
| Increase during the reporting period | - | - | - |
| Decrease during the reporting period | - | - | - |
| Balance as at 31 December 2024 | - | - | - |
| Carrying amount: | |||
| Balance as at 31 December 2024 | 91,137,654.46 | 9,155,846.27 | 100,293,500.73 |
| Balance as at 31 December 2023 | 81,038,100.24 | - | 81,038,100.24 |
5.15 Intangible Assets
(a) General information of intangible assets
| Items | Land use rights | Software | Patents and trademarks | Total |
| Initial cost: | ||||
| Balance as at 31 December 2023 | 1,136,647,237.75 | 131,841,013.57 | 254,972,753.56 | 1,523,461,004.88 |
| Increase during the reporting period | 20,360,169.96 | 31,450,508.04 | - | 51,810,678.00 |
| (i) Purchase | 5,225,439.06 | 2,300,411.09 | - | 7,525,850.15 |
| (ii) Reclassification from construction in progress | - | 29,150,096.95 | - | 29,150,096.95 |
| (iii) Shareholder investment | 15,134,730.90 | - | - | 15,134,730.90 |
| Decrease during the reporting period | 203,806.93 | 2,386,888.92 | 300,000.00 | 2,890,695.85 |
| (i) Disposal | 203,806.93 | 2,386,888.92 | 300,000.00 | 2,890,695.85 |
| Balance as at 31 December 2024 | 1,156,803,600.78 | 160,904,632.69 | 254,672,753.56 | 1,572,380,987.03 |
| Accumulated amortisation: | ||||
| Balance as at 31 December 2023 | 226,089,125.23 | 101,093,879.40 | 72,924,291.21 | 400,107,295.84 |
| Increase during the reporting | 24,484,542.43 | 20,151,762.31 | 215,026.52 | 44,851,331.26 |
~ 192 ~
| Items | Land use rights | Software | Patents and trademarks | Total |
| period | ||||
| (i) Provision | 24,484,542.43 | 20,151,762.31 | 215,026.52 | 44,851,331.26 |
| Decrease during the reporting period | 49,617.99 | 1,815,158.45 | 152,500.00 | 2,017,276.44 |
| (i) Disposal | 49,617.99 | 1,815,158.45 | 152,500.00 | 2,017,276.44 |
| Balance as at 31 December 2024 | 250,524,049.67 | 119,430,483.26 | 72,986,817.73 | 442,941,350.66 |
| Provision for impairment: | ||||
| Balance as at 31 December 2023 | - | 166,872.39 | - | 166,872.39 |
| Increase during the reporting period | - | - | - | - |
| (i) Provision | - | - | - | - |
| Decrease during the reporting period | - | - | - | - |
| (i) Disposal | - | - | - | - |
| Balance as at 31 December 2024 | - | 166,872.39 | - | 166,872.39 |
| Carrying amount: | ||||
| Balance as at 31 December 2024 | 906,279,551.11 | 41,307,277.04 | 181,685,935.83 | 1,129,272,763.98 |
| Balance as at 31 December 2023 | 910,558,112.52 | 30,580,261.78 | 182,048,462.35 | 1,123,186,836.65 |
Note: The increased land use rights contributed by shareholders in this period refer to the land userights contributed by the minority shareholders of the subsidiary Anhui Longrui Glass Co., Ltd. tofulfill their capital contribution obligations.(b) Intangible assets pledged as of the statement date
| Items | Initial cost | Cumulative amortisation | Provision for impairment | Carrying amount | Note |
| Trademark rights | 79,236,528.71 | 3,370,821.95 | - | 75,865,706.76 | Loan pledge |
| Total | 79,236,528.71 | 3,370,821.95 | - | 75,865,706.76 |
5.16 Goodwill
(a) Initial recognition
~ 193 ~
| Investees or matters that goodwill arising from | 31 December 2023 | Increase during the reporting period | Decrease during the reporting period | 31 December 2024 | ||
| Business combination | Other | Disposal | Other | |||
| HHL Distillery | 478,283,495.29 | - | - | - | - | 478,283,495.29 |
| Mingguang Distillery | 60,686,182.07 | - | - | - | - | 60,686,182.07 |
| Treasure Distillery | 22,394,707.65 | - | - | - | - | 22,394,707.65 |
| Total | 561,364,385.01 | - | - | - | - | 561,364,385.01 |
(b) Provision for impairmentFollowing the impairment test and with reference to the Appraisal Reports(ZhongshuiZhiyuanPingBaoZi [2025] No. 220041 and ZhongshuiZhiyuanPingBaoZi [2025] No.220042) issued by Beijing Zhongshui Zhiyuan Assets Appraisal Co., Ltd., the recoverable amountsof the asset groups were not lower than their respective value inclusive of goodwill as of thestatement date，so no impairment provision was required.(c) Asset groups associated with significant goodwill
| Investee | Composition of asset group | Asset group CNY million | Determination | Whether there has been any change in the current period | |||
| Book value | Allocated goodwill | Unrecognised goodwill attributable to non-controlling interest | Total | ||||
| HHL Distillery | Operating assets of HHL Distillery | 1,366.38 | 478.28 | 459.53 | 2,304.19 | Active markets are available for the products of the asset group to which goodwill is allocated and hence the asset group is capable of generating identifiable separate cash flows. | No |
| Mingguang Distillery | Operating assets of Mingguang Distillery | 305.36 | 60.68 | 40.46 | 406.5 | Active markets are available for the products of the asset group to which goodwill is allocated and hence the asset group is capable of generating identifiable separate cash flows. | No |
(d) Specific determination method of recoverable amount
~ 194 ~
Recoverable amount of an asset group: determined at the present value of the asset group'sprojected future cash flows. Future cash flows are projected on the basis of the financial budgetapproved by management for the above asset group for a five-year period, with sustainable cashflows beyond five years determined at the level of the last year of the detailed forecast period. Thepresent value is calculated at a discount rate that appropriately reflects the current time value ofmoney in the market and the specific risks of the asset group. Other key assumptions used in cashflow forecasting for asset groups include projected operating income, operating costs, growth rates,and related expenses, which are based on the company's operating results from prior years, growthrates, industry levels, and management's expectations for market developments. The discount rateadopted by the Company for 2024 ranges from 15.02% to 17.40%, and the growth rate ranges from
1.24% to 7.71%.
(e) Completion of performance commitments and corresponding goodwill impairmentThe company's goodwill asset group has no performance commitment this year, which has noimpact on the goodwill impairment test.
5.17 Long-term Deferred Expenses
| Items | 31 December 2023 | Increase during the reporting period | Decrease during the reporting period | 31 December 2024 | |
| Amortisation | Other decrease | ||||
| Experience Centre | 5,414,614.07 | - | 4,625,338.07 | - | 789,276.00 |
| Waste Water Plant | 76,885.25 | - | 76,885.25 | - | - |
| Outdoor Plant | 24,727,266.52 | 165,091.02 | 2,924,097.47 | - | 21,968,260.07 |
| Pottery jar | 16,479,992.73 | 50,272,589.41 | 5,149,922.94 | - | 61,602,659.20 |
| Theme hotel project | - | 170,857,424.45 | 8,153,974.28 | - | 162,703,450.17 |
| Public lines and pipelines of the Smart Park project | - | 102,306,204.83 | 3,689,790.69 | - | 98,616,414.14 |
| Other projects with smaller amounts | 12,403,825.41 | 23,026,215.75 | 6,504,712.85 | - | 28,925,328.31 |
| Total | 59,102,583.98 | 346,627,525.46 | 31,124,721.55 | - | 374,605,387.89 |
5.18 Deferred Tax Assets and Deferred Tax Liabilities
(a) Deferred tax assets before offsetting
| Items | 31 December 2024 | 31 December 2023 |
~ 195 ~
| Deductible temporary differences | Deferred tax assets | Deductible temporary differences | Deferred tax assets | |
| Provision for impairment loss | 42,823,363.52 | 10,444,314.97 | 44,941,996.14 | 10,848,316.56 |
| Provision for credit impairment | 18,370,005.53 | 4,535,436.94 | 45,360,393.52 | 11,292,126.66 |
| Unrealised intragroup profit | 76,363,176.92 | 19,090,794.23 | 74,347,126.84 | 18,586,781.71 |
| Deferred income | 122,142,913.25 | 29,876,832.66 | 100,811,404.82 | 24,492,497.96 |
| Deductible losses | 305,845,891.22 | 67,329,794.66 | 356,467,985.56 | 82,136,692.17 |
| Accrued employee benefits | 1,218,851.79 | 182,827.77 | 8,433,254.65 | 1,264,988.20 |
| Accrued expenses and rebates | 1,588,898,781.16 | 395,609,562.74 | 1,229,968,568.55 | 306,212,224.03 |
| Fair value change of accounts receivable financing | 22,244,006.88 | 5,560,090.43 | 3,029,905.06 | 754,940.17 |
| Lease liabilities | 97,799,819.03 | 24,449,954.76 | 79,152,693.07 | 19,788,173.27 |
| Accelerated depreciation variance of fixed assets | 3,416,031.63 | 512,404.74 | - | - |
| Total | 2,279,122,840.93 | 557,592,013.90 | 1,942,513,328.21 | 475,376,740.73 |
(b) Deferred tax liabilities before offsetting
| Items | 31 December 2024 | 31 December 2023 | ||
| Deductible temporary differences | Deferred tax liabilities | Deductible temporary differences | Deferred tax liabilities | |
| Accelerated depreciation variance of fixed assets | 417,629,233.07 | 101,296,567.82 | 348,420,771.63 | 84,243,324.54 |
| Assets appreciation arising from business combination not under common control | 659,325,823.37 | 159,742,363.83 | 677,082,342.46 | 163,643,316.42 |
| Fair value change of financial asset held for trading | 184,353.81 | 46,088.46 | 19,987,547.42 | 4,996,886.86 |
| Unrealised profit | 223,927,678.28 | 55,981,919.57 | 264,217,579.52 | 66,054,394.88 |
| Fair value change of Other equity instrument investments | 15,652,133.02 | 3,913,033.26 | 9,256,960.27 | 2,314,240.07 |
| Right-of-use assets | 100,293,500.73 | 25,073,375.18 | 81,038,100.24 | 20,259,525.06 |
| Total | 1,417,012,722.28 | 346,053,348.12 | 1,400,003,301.54 | 341,511,687.83 |
(c) Net balance of deferred tax liabilities and deferred tax assets after offsetting
| Items | Offset amount at 31 December 2024 | Net balance after offsetting at 31 December 2024 | Offset amount at 31 December 2023 | Net balance after offsetting at 31 December 2023 |
~ 196 ~
| Items | Offset amount at 31 December 2024 | Net balance after offsetting at 31 December 2024 | Offset amount at 31 December 2023 | Net balance after offsetting at 31 December 2023 |
| Deferred tax assets | -74,258,323.14 | 483,333,690.76 | -19,788,173.27 | 455,588,567.46 |
| Deferred tax liabilities | -74,258,323.14 | 271,795,024.98 | -19,788,173.27 | 321,723,514.56 |
(d) Unrecognized deferred tax assets
| Items | 31 December 2024 | 31 December 2023 |
| Deductible losses | 16,314,472.33 | 25,075,547.34 |
| Total | 16,314,472.33 | 25,075,547.34 |
(e) Deductible losses not recognised as deferred tax assets will expire in the following periods: duein one to two years at 18,386.62, in two to three years at 9,664,609.24 and in three to four years at6,631,476.47.
5.19 Other Non-current Assets
| Items | 31 December 2024 | 31 December 2023 |
| Prepayment for construction and machinery | 707,352.50 | 5,685,287.46 |
| Total | 707,352.50 | 5,685,287.46 |
5.20 Short-term Borrowings
| Items | 31 December 2024 | 31 December 2023 |
| Mortgage loans | - | - |
| Guarantee loans | 50,038,194.44 | -- |
| Total | 50,038,194.44 |
5.21 Notes Payable
(a) Disclosure by type
| Category | 31 December 2024 | 31 December 2023 |
| Bank acceptance bills | 571,864,409.55 | 1,332,031,679.44 |
| Commercial acceptance bills | 17,500,000.00 | 21,156,044.00 |
| Total | 589,364,409.55 | 1,353,187,723.44 |
Note: As at 31 December 2024, the Company had no notes payable matured but not yet paid.
5.22 Accounts Payable
~ 197 ~
(a) Accounts payable by nature
| Items | 31 December 2024 | 31 December 2023 |
| Payables for materials | 1,148,583,810.63 | 1,352,488,385.40 |
| Payables for constructions and machinery | 1,293,302,536.42 | 980,033,062.83 |
| Others | 500,452,835.08 | 481,670,623.01 |
| Total | 2,942,339,182.13 | 2,814,192,071.24 |
(b) Significant accounts payable with aging of over one yearNot applicable.
5.23 Contract liabilities
| Items | 31 December 2024 | 31 December 2023 |
| Advances for goods | 3,514,800,038.80 | 1,401,122,249.53 |
| Total | 3,514,800,038.80 | 1,401,122,249.53 |
5.24 Employee Benefits Payable
(a) Details of employee benefits payable
| Items | 31 December 2023 | Increase during the reporting period | Decrease during the reporting period | 31 December 2024 |
| Short-term employee benefits | 1,180,454,095.44 | 3,899,173,941.76 | 3,958,564,996.73 | 1,121,063,040.47 |
| Post-employment benefits-defined contribution plans | 151,677.85 | 260,686,920.99 | 260,676,857.03 | 161,741.81 |
| Termination benefits | - | 458,728.27 | 458,728.27 | - |
| Other benefits due within one year | - | - | - | - |
| Total | 1,180,605,773.29 | 4,160,319,591.02 | 4,219,700,582.03 | 1,121,224,782.28 |
(b) Short-term employee benefits
| Items | 31 December 2023 | Increase during the reporting period | Decrease during the reporting period | 31 December 2024 |
| Salaries, bonuses, allowances and subsidies | 1,102,959,306.93 | 3,335,628,327.24 | 3,391,098,579.13 | 1,047,489,055.04 |
| Employee benefits | - | 115,860,438.39 | 115,860,438.39 | - |
| Social insurance | 481,283.18 | 132,515,881.75 | 132,596,190.31 | 400,974.62 |
| Medical insurance | 478,930.09 | 123,011,372.69 | 123,091,837.37 | 398,465.41 |
| Work-place injury insurance | 2,353.09 | 9,504,509.06 | 9,504,352.94 | 2,509.21 |
| Housing accumulation fund | 8,189,307.02 | 140,057,268.56 | 139,013,157.75 | 9,233,417.83 |
~ 198 ~
| Items | 31 December 2023 | Increase during the reporting period | Decrease during the reporting period | 31 December 2024 |
| Labour union funds and employee education funds | 64,598,761.77 | 44,315,802.66 | 49,713,874.39 | 59,200,690.04 |
| Enterprise annuity | 4,225,436.54 | 130,796,223.16 | 130,282,756.76 | 4,738,902.94 |
| Total | 1,180,454,095.44 | 3,899,173,941.76 | 3,958,564,996.73 | 1,121,063,040.47 |
(c) Defined contribution plans
| Items | 31 December 2023 | Increase during the reporting period | Decrease during the reporting period | 31 December 2024 |
| Basic endowment insurance | 147,081.53 | 248,879,680.84 | 248,869,921.81 | 156,840.56 |
| Unemployment insurance | 4,596.32 | 11,807,240.15 | 11,806,935.22 | 4,901.25 |
| Total | 151,677.85 | 260,686,920.99 | 260,676,857.03 | 161,741.81 |
(d) Termination benefits
| Items | 31 December 2023 | Increase during the reporting period | Decrease during the reporting period | 31 December 2024 |
| Termination benefits | - | 458,728.27 | 458,728.27 | - |
| Total | - | 458,728.27 | 458,728.27 | - |
Note: If the company terminates the labor relationship with the employee before the expiration ofthe labor contract, it shall take one-time compensation, and the amount of compensation fordismissal shall be included in the current profit and loss.
5.25 Taxes Payable
| Items | 31 December 2024 | 31 December 2023 |
| Value added tax (VAT) | 284,337,340.10 | 357,332,008.07 |
| Consumption tax | 390,378,274.62 | 434,932,478.09 |
| Enterprise income tax | 353,803,556.51 | 280,172,679.93 |
| Individual income tax | 39,693,677.73 | 4,436,736.14 |
| City construction tax | 35,169,659.48 | 40,651,189.20 |
| Stamp duty | 4,231,886.04 | 4,531,195.41 |
| Educational surcharge | 34,333,818.77 | 39,534,935.75 |
| Others | 21,223,630.24 | 17,777,633.10 |
| Total | 1,163,171,843.49 | 1,179,368,855.69 |
5.26 Other Payables
(a) Other payables by category
~ 199 ~
| Items | 31 December 2024 | 31 December 2023 |
| Interest payable | - | - |
| Dividend payable | - | - |
| Other payables | 3,146,672,513.57 | 3,267,292,222.01 |
| Total | 3,146,672,513.57 | 3,267,292,222.01 |
(i) Other payables by nature
| Items | 31 December 2024 | 31 December 2023 |
| Margin deposits | 2,545,554,135.19 | 2,567,100,177.13 |
| Quality warranty | 142,353,842.60 | 77,264,459.45 |
| Withheld housing fund payable | 7,439,116.19 | 6,231,182.41 |
| Others | 451,325,419.59 | 616,696,403.02 |
| Total | 3,146,672,513.57 | 3,267,292,222.01 |
Note: Other payables aged over 1 year as of the statement date mainly comprised pre-maturemargin deposits and quality warranty.
5.27 Non-current Liabilities Maturing within One Year
| Items | 31 December 2024 | 31 December 2023 |
| Lease liabilities due within one year | 13,346,230.73 | 10,771,925.29 |
| Long-term borrowings due within one year | 76,489,969.84 | 70,053,097.22 |
| Total | 89,836,200.57 | 80,825,022.51 |
5.28 Other Current Liabilities
| Items | 31 December 2024 | 31 December 2023 |
| Accrued expenses | 1,236,420,776.30 | 951,949,301.38 |
| Pre-mature output VAT | 454,767,511.10 | 180,069,149.72 |
| Total | 1,691,188,287.40 | 1,132,018,451.10 |
5.29 Long-term Borrowings
| Items | 31 December 2024 | 31 December 2023 |
| Credit loans | - | - |
| Guarantee loans | 41,600,000.00 | 107,000,000.00 |
| Interests | - | 106,256.94 |
| Total | 41,600,000.00 | 107,106,256.94 |
5.30 Lease liabilities
~ 200 ~
| Items | 31 December 2024 | 31 December 2023 |
| Lease payments | 112,025,467.10 | 94,538,857.20 |
| Less: Unrealised finance expenses | 14,225,648.07 | 15,386,164.13 |
| Subtotal | 97,799,819.03 | 79,152,693.07 |
| Less: lease liabilities due within one year | 13,346,230.73 | 10,771,925.29 |
| Total | 84,453,588.30 | 68,380,767.78 |
5.31 Deferred Income
| Items | 31 December 2023 | Increase during the reporting period | Decrease during the reporting period | 31 December 2024 | Reason |
| Government grants | 100,811,404.82 | 28,974,000.00 | 7,642,491.57 | 122,142,913.25 | Receipt of asset-related government grants |
| Total | 100,811,404.82 | 28,974,000.00 | 7,642,491.57 | 122,142,913.25 |
5.32 Share Capital
| Items | 31 December 2023 | Changes during the reporting period (+,-) | 31 December 2024 | ||||
| New issues | Bonus issues | Capitalisation of reserves | Others | Subtotal | |||
| Number of total shares | 528,600,000.00 | - | - | - | - | - | 528,600,000.00 |
5.33 Capital Reserves
| Items | 31 December 2023 | Increase during the reporting period | Decrease during the reporting period | 31 December 2024 |
| Capital premium (share premium) | 6,191,894,530.90 | 4,363,539.12 | - | 6,196,258,070.02 |
| Other capital reserves | 32,853,136.20 | - | - | 32,853,136.20 |
| Total | 6,224,747,667.10 | 4,363,539.12 | - | 6,229,111,206.22 |
Note: The capital reserve increased by RMB 4.3635 million in this period. This was mainly due tothe introduction of minority shareholders in the subsidiary Anhui Longrui Glass Co., LTD. Theshareholding ratio of our company decreased from 100.00% to 97.69%. The change in the net assetshare resulting from equity dilution was included in the capital reserve.
5.34 Other Comprehensive Income
~ 201 ~
| Items | 31 December 2023 | Changes during the reporting period | 31 December 2024 | ||||
| Amount before tax | Less: Items previously recognized in other comprehensive income being reclassified to current profit or loss | Less: Income tax expenses | Attributable to owners of the Company | Attributable to non-controlling interest | |||
| (a)Items will not be reclassified to profit or loss | 4,165,632.12 | 6,395,172.75 | - | 1,598,793.18 | 2,877,827.74 | 1,918,551.83 | 7,043,459.86 |
| Including: Changes in fair value of other equity instrument investments | 4,165,632.12 | 6,395,172.75 | - | 1,598,793.18 | 2,877,827.74 | 1,918,551.83 | 7,043,459.86 |
| (b)Items will be reclassified to profit or loss | -2,569,309.39 | -22,244,006.88 | -2,706,076.57 | -5,560,090.43 | -14,078,270.21 | 100,430.33 | -16,647,579.60 |
| Including: Reclassification of financial assets to other comprehensive income | -2,569,309.39 | -22,244,006.88 | -2,706,076.57 | -5,560,090.43 | -14,078,270.21 | 100,430.33 | -16,647,579.60 |
| Total | 1,596,322.73 | -15,848,834.13 | -2,706,076.57 | -3,961,297.25 | -11,200,442.47 | 2,018,982.16 | -9,604,119.74 |
5.35 Surplus Reserves
| Items | 31 December 2023 | Increase during the reporting period | Decrease during the reporting period | 31 December 2024 |
| Statutory surplus reserves | 269,402,260.27 | - | - | 269,402,260.27 |
| Total | 269,402,260.27 | - | - | 269,402,260.27 |
Note: Pursuant to the Company Law of the People's Republic of China and Articles of Association,the Company appropriates 10% of net profit to the statutory surplus reserves. If the accumulativeamount of legal surplus reserve is more than 50% of the registered capital of the Company, it mayno longer be withdrawn.
5.36 Retained Earnings
| Items | 2024 | 2023 |
~ 202 ~
| Items | 2024 | 2023 |
| Balance as at the end of last period before adjustments | 14,500,963,359.34 | 11,497,599,306.54 |
| Adjustments for the opening balance (increase /(decrease)) | ||
| Balance as at the beginning of the reporting period after adjustments | 14,500,963,359.34 | 11,497,599,306.54 |
| Add: net profit attributable to owners of the parent company for the reporting period | 5,517,251,073.10 | 4,589,164,052.80 |
| Less: Transfer to statutory surplus reserves | ||
| Declaration of ordinary share dividends | 2,378,700,000.00 | 1,585,800,000.00 |
| Balance as at the end of the reporting period | 17,639,514,432.44 | 14,500,963,359.34 |
5.37 Revenue and costs of sales
(a) General information
| Items | 2024 | 2023 | ||
| Revenue | Costs of sales | Revenue | Costs of sales | |
| Principal activities | 23,472,061,731.98 | 4,696,076,309.74 | 20,153,237,192.18 | 4,202,683,854.02 |
| Other activities | 105,866,334.01 | 41,978,219.60 | 100,289,405.84 | 37,167,052.89 |
| Total | 23,577,928,065.99 | 4,738,054,529.34 | 20,253,526,598.02 | 4,239,850,906.91 |
(b) Disaggregated information of revenue and costs of sales from Principal operating activities
| Items | 2024 | 2023 | ||
| Revenue | Costs of sales | Revenue | Costs of sales | |
| Revenue by product type: | ||||
| Distilled wine business | 22,865,058,713.55 | 4,176,030,484.99 | 19,638,756,672.91 | 3,768,057,699.29 |
| Others | 712,869,352.44 | 562,024,044.35 | 614,769,925.11 | 471,793,207.62 |
| Total | 23,577,928,065.99 | 4,738,054,529.34 | 20,253,526,598.02 | 4,239,850,906.91 |
| Revenue by operating area: | ||||
| North China | 1,979,406,985.66 | 402,020,125.25 | 1,842,994,377.93 | 373,249,635.06 |
| Central China | 20,150,945,972.42 | 4,073,567,182.41 | 17,106,718,631.38 | 3,637,568,886.44 |
| South China | 1,425,975,566.51 | 257,106,035.61 | 1,282,816,365.91 | 224,324,231.97 |
| Internation | 21,599,541.40 | 5,361,186.07 | 20,997,222.80 | 4,708,153.44 |
| Total | 23,577,928,065.99 | 4,738,054,529.34 | 20,253,526,598.02 | 4,239,850,906.91 |
| Revenue by distribution channel: | ||||
| Online | 771,686,684.39 | 182,936,340.33 | 729,306,974.15 | 188,844,601.39 |
| Offline | 22,806,241,381.60 | 4,555,118,189.01 | 19,524,219,623.87 | 4,051,006,305.52 |
| Total | 23,577,928,065.99 | 4,738,054,529.34 | 20,253,526,598.02 | 4,239,850,906.91 |
~ 203 ~
5.38 Taxes and Surcharges
| Items | 2024 | 2023 |
| Consumption tax | 3,083,395,273.17 | 2,501,645,974.47 |
| City construction tax and educational surcharges | 549,706,175.70 | 458,794,010.60 |
| Property tax | 24,650,465.85 | 23,724,880.08 |
| Land use tax | 37,609,044.30 | 26,384,275.09 |
| Stamp duty | 20,660,554.84 | 18,766,563.10 |
| Others | 24,312,015.13 | 20,785,958.55 |
| Total | 3,740,333,528.99 | 3,050,101,661.89 |
5.39 Selling and Distribution Expenses
| Items | 2024 | 2023 |
| Personnel costs | 1,280,868,189.84 | 1,230,880,423.44 |
| Travel | 257,167,425.19 | 223,518,669.30 |
| Advertisement | 1,309,141,466.48 | 1,101,364,892.63 |
| Comprehensive promotion | 2,563,283,912.38 | 2,089,071,299.15 |
| Services | 658,399,995.56 | 656,190,943.27 |
| Others | 112,902,006.05 | 135,746,829.46 |
| Total | 6,181,762,995.50 | 5,436,773,057.25 |
5.40 General and Administrative Expenses
| Items | 2024 | 2023 |
| Personnel costs | 907,530,864.24 | 933,829,716.03 |
| Office costs | 92,329,482.71 | 74,060,539.94 |
| Repairs | 42,176,635.49 | 52,193,470.08 |
| Depreciation | 118,160,773.51 | 74,338,166.89 |
| Amortisation | 48,881,999.66 | 35,453,212.98 |
| Sewage | 27,937,204.39 | 23,269,601.56 |
| Travel | 14,684,044.79 | 14,824,041.89 |
| Utilities | 12,045,020.09 | 13,289,220.75 |
| Others | 178,652,901.43 | 145,888,497.77 |
| Total | 1,442,398,926.31 | 1,367,146,467.89 |
5.41 Research and Development Expenses
~ 204 ~
| Items | 2024 | 2023 |
| Personnel costs | 53,428,629.50 | 46,310,706.51 |
| Direct costs | 9,409,848.37 | 12,146,049.05 |
| Depreciation | 4,326,031.48 | 3,102,642.32 |
| Other related expenses | 11,077,703.23 | 9,387,798.61 |
| Total | 78,242,212.58 | 70,947,196.49 |
5.42 Finance Costs
| Items | 2024 | 2023 |
| Interest expenses | 6,145,816.53 | 3,289,772.96 |
| Including: Interest expenses for lease liabilities | 3,659,750.15 | 1,748,169.19 |
| Less: Interest income | 367,977,768.88 | 169,297,052.44 |
| Net interest expenses | -361,831,952.35 | -166,007,279.48 |
| Net foreign exchange losses | 11,645,040.10 | 2,682,871.29 |
| Bank charges and others | 1,362,705.80 | 1,080,383.31 |
| Total | -348,824,206.45 | -162,244,024.88 |
5.43 Other Income
| Items | 2024 | 2023 | Related to assets /income |
| (i) Government grant recognised in other income | 59,697,910.87 | 42,104,956.65 | |
| Including: Government grant related to deferred income | 7,642,491.57 | 8,106,974.13 | Related to assets |
| Government grant directly recognised in current profit or loss | 52,055,419.30 | 33,997,982.52 | Related to income |
| (ii) Others related to daily operation activities and recognised in other income | 4,248,829.61 | 5,948,371.72 | |
| Total | 63,946,740.48 | 48,053,328.37 |
5.44 Investment Income/(Losses)
| Items | 2024 | 2023 |
| Investment income from long-term equity investments under equity method | 1,365,563.18 | 212,842.28 |
~ 205 ~
| Items | 2024 | 2023 |
| Gains on disposal of long-term equity investments | 160,169.93 | 30,015.47 |
| Gains on disposal of held-for-trading financial assets | 2,060,910.45 | 31,441,783.21 |
| Gains from other equity instrument investment income during holding period | 769,616.25 | 747,200.50 |
| Gains from disposal of financial assets at fair value through other comprehensive income | -39,278,043.50 | -38,914,035.00 |
| Others | 434,296.02 | 144,063.85 |
| Total | -34,487,487.67 | -6,338,129.69 |
5.45 Gains/(Losses) from Changes in Fair Values
| Sources of gains on changes in fair value | 2024 | 2023 |
| Financial assets held-for-trading | 184,353.81 | 19,987,547.42 |
| Including: Changes in fair value of derivatives | - | - |
| Total | 184,353.81 | 19,987,547.42 |
5.46 Credit Impairment Losses
| Items | 2024 | 2023 |
| Bad debt of notes receivable | - | - |
| Bad debt of accounts receivable | -605,509.16 | 244,557.52 |
| Bad debt of other receivables | -1,039,763.07 | 647,052.88 |
| Total | -1,645,272.23 | 891,610.40 |
5.47 Asset Impairment Losses
| Items | 2024 | 2023 |
| Impairment of inventories | -23,585,609.99 | -30,863,140.12 |
| Impairment of fixed assets | - | -190,056.75 |
| Impairment of intangible assets | - | - |
| Total | -23,585,609.99 | -31,053,196.87 |
5.48 Gains/ (losses) from Disposal of Assets
| Items | 2024 | 2023 |
| Gains/(losses) from disposal of fixed | -192,200.99 | 437,622.67 |
~ 206 ~
| Items | 2024 | 2023 |
| assets, construction in progress, productive biological assets and intangible assets not classified as held for sale | ||
| Including: Fixed assets | -192,200.99 | 437,622.67 |
| Total | -192,200.99 | 437,622.67 |
5.49 Non-operating Income
| Items | 2024 | 2023 | Recognised in current non-recurring profit or loss |
| Gains from damage or scrapping of non-current asset | 143,168.86 | 389,908.44 | 143,168.86 |
| Fine and compensation | 35,902,710.13 | 56,452,237.38 | 35,902,710.13 |
| Sale of scrap | 4,895,677.27 | 5,694,719.36 | 4,895,677.27 |
| Release of payables | 18,278,847.61 | 20,475,919.42 | 18,278,847.61 |
| Others | 1,585,687.39 | 2,054,059.52 | 1,585,687.39 |
| Total | 60,806,091.26 | 85,066,844.12 | 60,806,091.26 |
5.50 Non-operating Expenses
| Items | 2024 | 2023 | Recognised in current non-recurring profit or loss |
| Loss from damage or scrapping of non-current assets | 6,947,007.87 | 2,890,802.01 | 6,947,007.87 |
| Donations | 4,624,000.00 | 24,281,767.24 | 4,624,000.00 |
| Others | 3,828,477.12 | 8,678,557.09 | 3,828,477.12 |
| Total | 15,399,484.99 | 35,851,126.34 | 15,399,484.99 |
5.51 Income Tax Expenses
(a) Details of income tax expenses
| Items | 2024 | 2023 |
| Current tax expenses | 2,163,442,886.40 | 1,596,955,748.41 |
| Deferred tax expenses | -74,467,255.81 | 8,920,263.25 |
| Total | 2,088,975,630.59 | 1,605,876,011.66 |
(b) Reconciliation of accounting profit and income tax expenses
~ 207 ~
| Items | 2024 | 2023 |
| Profit before tax | 7,795,587,209.40 | 6,332,145,832.55 |
| Income tax expense at the statutory /applicable tax rate | 1,948,896,802.35 | 1,583,036,458.14 |
| Effect of different tax rate of subsidiaries | -12,939,119.34 | -10,664,943.74 |
| Adjustments of impact from prior period income tax | 126,256,652.21 | 21,264,002.52 |
| Effect of income that is exempt from taxation | -533,794.86 | -240,010.70 |
| Effect of non-deductible costs, expenses or losses | 41,785,366.02 | 27,197,917.99 |
| Effect of previously unrecognised deductible losses recognised as deferred tax assets | - | - |
| Effect of deductible temporary differences and deductible losses not recognised as deferred tax assets | - | - |
| R&D expenses plus deduction | -14,490,275.79 | -14,717,412.55 |
| Impact of tax rate changes | - | - |
| Exemption | - | - |
| Income tax expenses | 2,088,975,630.59 | 1,605,876,011.66 |
5.52 Notes to the Statement of Cash Flow
(a) Other cash received relating to operating activities
| Items | 2024 | 2023 |
| Margin deposits and quality warranty | 393,976,242.15 | 464,744,709.38 |
| Government grants received | 81,029,419.30 | 41,653,669.06 |
| Bank interests received | 367,977,768.88 | 169,297,052.44 |
| Release of restricted cash | 1,290,204,326.83 | 667,187,706.08 |
| Others | 47,136,714.16 | 80,809,234.08 |
| Total | 2,180,324,471.32 | 1,423,692,371.04 |
(b) Other cash payments relating to operating activities
| Items | 2024 | 2023 |
| Paid expenses | 3,251,430,533.10 | 2,797,006,317.12 |
| Margin deposits and quality warranty | 14,973,516.51 | 3,763,254.60 |
| Cash restricted for bank acceptance and guarantee letters | 700,969,772.34 | 1,290,204,326.83 |
| Others | 235,192,813.59 | 110,600,772.48 |
| Total | 4,202,566,635.54 | 4,201,574,671.03 |
(c) Other cash payments relating to financing activities
| Items | 2024 | 2023 |
~ 208 ~
| Items | 2024 | 2023 |
| Payment of minority shareholder equity | - | 5,878,415.17 |
| Rentals paid | 21,939,585.66 | 16,976,402.11 |
| Total | 21,939,585.66 | 22,854,817.28 |
(i) Changes in liabilities arising from financing activities
| Items | 31 December 2023 | Increase in the current period | Decrease in the current period | 31 December 2024 | ||
| Changes in cash | Changes in non-cash | Changes in cash | Changes in non-cash | |||
| Short-term Borrowings | - | 70,000,100.00 | 606,000.15 | 20,567,905.71 | - | 50,038,194.44 |
| Long-term Borrowings | 107,106,256.94 | 50,000,000.00 | 422,537.19 | 39,438,824.29 | 76,489,969.84 | 41,600,000.00 |
| Lease liabilities | 68,380,767.78 | - | 44,206,279.18 | - | 28,133,458.66 | 84,453,588.30 |
| lease liabilities due within one year | 10,771,925.29 | - | 28,133,458.66 | 20,967,044.39 | 4,592,108.83 | 13,346,230.73 |
| Long-term Borrowings due within one year | 70,053,097.22 | - | 76,489,969.84 | 70,053,097.22 | - | 76,489,969.84 |
| Total | 256,312,047.23 | 120,000,100.00 | 149,858,245.02 | 151,026,871.61 | 109,215,537.33 | 265,927,983.31 |
5.53 Supplementary Information to the Statement of Cash Flows
(a) Supplementary information to the statement of cash flows
| Supplementary information | 2024 | 2023 |
| (i) Adjustments of net profit to cash flows from operating activities: | ||
| Net profit | 5,706,611,578.81 | 4,726,269,820.89 |
| Add: Provisions for impairment of assets | 23,585,609.99 | 31,053,196.87 |
| Impairment Loss of Credit | 1,645,272.23 | -891,610.40 |
| Depreciation of fixed assets, Investment Properties ,oil and gas asset and productive biological assets | 477,998,913.37 | 301,390,656.72 |
| Depreciation of right to use assets | 16,749,479.03 | 15,069,255.81 |
| Amortisation of intangible assets | 44,851,331.26 | 44,249,725.47 |
| Amortisation of long-term deferred expenses | 31,124,721.55 | 28,717,241.10 |
~ 209 ~
| Supplementary information | 2024 | 2023 |
| Losses /(gains) on disposal of fixed assets, intangible assets and other long-term assets | 192,200.99 | -437,622.67 |
| Losses /(gains) on scrapping of fixed assets | 6,803,839.01 | 2,500,893.57 |
| Losses /(gains) on changes in fair value | -184,353.81 | -19,987,547.42 |
| Finance costs /(income) | 17,621,571.61 | 3,289,772.96 |
| Investment losses /(income) | -4,790,555.83 | 6,338,129.69 |
| Decreases /(increases) in deferred tax assets | -22,939,973.04 | -30,468,340.09 |
| Increases /(decreases) in deferred tax liabilities | -51,527,282.77 | 40,550,359.86 |
| Decreases /(increases) in inventories | -1,768,123,910.06 | -1,479,764,803.69 |
| Decreases /(increases) in operating receivables | -2,337,026,097.81 | -1,914,106,758.28 |
| Increases /(decreases) in operating payables | 1,995,825,974.83 | 2,075,245,957.95 |
| Others | 589,234,554.49 | 667,187,706.08 |
| Net cash flows from operating activities | 4,727,652,873.85 | 4,496,206,034.42 |
| (ii) Significant activities not involving cash receipts and payments: | ||
| Conversion of debt into capital | ||
| Convertible corporate bonds maturing within one year | ||
| Fixed asset acquired through financial leasing | ||
| (iii) Net increases in cash and cash equivalents: | ||
| Cash at the end of the reporting period | 15,193,134,694.19 | 14,676,167,417.36 |
| Less: Cash at the beginning of the reporting period | 14,676,167,417.36 | 13,105,373,435.22 |
| Add: Cash equivalents at the end of the reporting period | ||
| Less: Cash equivalents at the beginning of the reporting period | ||
| Net increase in cash and cash equivalents | 516,967,276.83 | 1,570,793,982.14 |
Note: Others represented impact of withdraw restricted cash on the net cash flows from operatingactivities for the period.(b) The components of cash and cash equivalents
| Items | 31 December 2024 | 31 December 2023 |
| (i) Cash | 15,193,134,694.19 | 14,676,167,417.36 |
| Including: Cash on hand | 62,770.67 | 78,223.44 |
| Cash in bank available for immediate use | 15,139,942,337.05 | 14,404,178,940.29 |
| Other monetary funds available for immediate use | 53,129,586.47 | 271,910,253.63 |
~ 210 ~
| Items | 31 December 2024 | 31 December 2023 |
| (ii) Cash equivalents | ||
| Including: Bond investments maturing within three months | ||
| (iii) Cash and cash equivalents at the end of the reporting period | 15,193,134,694.19 | 14,676,167,417.36 |
| Including: Restricted cash and cash equivalents of the parent company and the subsidiaries of the group | - | - |
5.54 Assets with restricted ownership or use rights
| Items | 2024 | Reason |
| Monetary funds | 700,969,772.34 | Fixed term deposits and margin deposits for bank acceptance, etc. |
| Intangible Assets | 75,865,706.76 | Loan pledge |
| Total | 776,835,479.10 | —— |
5.55 Leases
(a) The Company as a lessee
| Items | 2024 |
| Expenses for short-term lease under simplified method | 5,392,317.51 |
| Expenses for lease of low value asset (except for short-term lease) under simplified method | - |
| Interest expense of lease liabilities | 3,659,750.15 |
| Variable lease payments not included in lease liabilities recognised in current profit or loss | - |
| Income from subleasing the right-of-use assets | - |
| Cash outflows related to leases | 93,534,830.31 |
| Profit or loss in sale and leaseback transaction | - |
(b) The Company as a lessor
Operating lease
| Items | 2024 |
| Lease income | 11,564,402.81 |
| Including: income related to variable lease payments not included in lease receivables | - |
~ 211 ~
6. RESEARCH AND DEVELOPMENT EXPENDITURES
6.1 R&D expenditures by nature
| Items | 2024 | 2023 |
| Labor costs | 53,428,629.50 | 46,310,706.51 |
| Material costs | 9,409,848.37 | 12,146,049.05 |
| Depreciation costs | 4,326,031.48 | 3,102,642.32 |
| Others | 11,077,703.23 | 9,387,798.61 |
| Total | 78,242,212.58 | 70,947,196.49 |
| Including：Expensed R&D expenditures | 78,242,212.58 | 70,947,196.49 |
| Capitalized R&D expenditures | - | - |
7. CHANGES IN THE SCOPE OF CONSOLIDATION
7.1 Other Reasons of Changes in the Scope of Consolidation
Compared with the previous period, the company set up new subsidiaries "Anhui Guge CultureMedia Co., Ltd..", "Anhui Gujing Suhuai Wine Sales Co., Ltd..", "Ezhou Junya Trading Co., Ltd.."and "Wuhan Juntai Trading Co., Ltd." This period, the liquidated subsidiaries are "Wuhan Yashi BoTechnology Co., Ltd.", "Hubei Xinjia Testing Technology Co., Ltd.", "Hubei Junlou CulturalTourism Co., Ltd.", " Hubei HHL Beverage Co., Ltd..", " Fengyang Xiaogangcun Mingjiu DistilleryCo., Ltd.." and "Anhui Yangshengtianxia Brand Operation Co. , Ltd."
8. INTERESTS IN OTHER ENTITIES
8.1 Interests in Subsidiaries
(a) Composition of corporate group
| Name of subsidiary | Abbreviation | Principal place of business | Registered Address | Nature of business | Percentage of equity interests by the Company (%) | Ways of acquisition | |
| Direct | Indirect | ||||||
| Bozhou Gujing Sales Co., Ltd. | GJ Sales | Bozhou, Anhui | Bozhou, Anhui | Trading | 100.00 | —— | Incorporation |
| Anhui Longrui Glass Co., Ltd. | Longrui Glass | Bozhou, Anhui | Bozhou, Anhui | Production | 97.69 | —— | Incorporation |
~ 212 ~
| Name of subsidiary | Abbreviation | Principal place of business | Registered Address | Nature of business | Percentage of equity interests by the Company (%) | Ways of acquisition | |
| Direct | Indirect | ||||||
| Anhui Jiuan Electric Equipments Co., Ltd. | Jiuan Electric | Bozhou, Anhui | Bozhou, Anhui | Machinery production | 100.00 | —— | Incorporation |
| Anhui Jinyunlai Culture Media Co., Ltd. | Jinyunlai | Hefei, Anhui | Hefei, Anhui | Advertising | 100.00 | —— | Incorporation |
| Anhui Ruisi Weier Technology Co., Ltd. | Ruisi Weier | Bozhou, Anhui | Bozhou, Anhui | R&D | 100.00 | —— | Incorporation |
| Shanghai Gujing Jinhao Hotel Management Co., Ltd. | Jinhao Hotel | Shanghai | Shanghai | Hotel management | 100.00 | —— | Business combination under common control |
| Baozhou Gujing Guest House Co., Ltd. | GJ Guest House | Bozhou, Anhui | Bozhou, Anhui | Hotel management | 100.00 | —— | Business combination under common control |
| Anhui Yuanqing Environment Protection Co., Ltd. | YQ Environment Protection | Bozhou, Anhui | Bozhou, Anhui | Sewage processing | 100.00 | —— | Incorporation |
| Anhui Gujing Yunshang E-Commerce Co., Ltd. | GJ E-Commerce | Hefei, Anhui | Hefei, Anhui | E-commerce | 100.00 | —— | Incorporation |
| Anhui Runan Xinke Testing Technology Co., Ltd. | Runan Xinke | Bozhou, Anhui | Bozhou, Anhui | Food testing | 100.00 | —— | Incorporation |
| Anhui Jiudao Culture Media Co., Ltd. | Jiudao Media | Hefei, Anhui | Hefei, Anhui | Advertising | 100.00 | —— | Incorporation |
| Anhui Gujing Distillery Wine Theme Hotel Management Co., Ltd | Theme Hotel | Bozhou, Anhui | Bozhou, Anhui | Hotel management | 100.00 | —— | Incorporation |
| Anhui Gu Qi Distillery Co., Ltd. | Anhui Gu Qi Distillery | Bozhou, Anhui | Bozhou, Anhui | Production | 60.00 | —— | Incorporation |
| Anhui Guge Culture | Guge Culture | Bozhou, Anhui | Bozhou, Anhui | Advertising and | 100 | —— | Incorporation |
~ 213 ~
| Name of subsidiary | Abbreviation | Principal place of business | Registered Address | Nature of business | Percentage of equity interests by the Company (%) | Ways of acquisition | |
| Direct | Indirect | ||||||
| Media Co., LTD. | marketing | ||||||
| Anhui Gujing Suhuai Wine Sales Co., LTD. | Gujing Suhuai | Suzhou, Anhui | Suzhou, Anhui | Commercial trade | 100 | —— | Incorporation |
| Huanghelou Distillery Co., Ltd. | HHL Distillery | Wuhan, Hubei | Wuhan, Hubei | Production | 51.00 | —— | Business combination not under common control |
| HHL Distillery (Xianning) Co., Ltd. | HHL Xianning | Xianning, Hubei | Xianning, Hubei | Production | —— | 51.00 | Business combination not under common control |
| HHL Distillery (Suizhou) Co., Ltd. | HHL Suizhou | Suizhou, Hubei | Suizhou, Hubei | Production | —— | 51.00 | Business combination not under common control |
| Hubei Junlou Culture Travel Co., Ltd. | Junlou Culture | Wuhan, Hubei | Wuhan, Hubei | Advertising | —— | 51.00 | Business combination not under common control |
| Hubei HHL Beverage Co., Ltd. | HHL Beverage | Xianning, Hubei | Xianning, Hubei | Production | —— | 51.00 | Incorporation |
| Wuhan Yashibo Technology Co., Ltd. | Yashibo | Wuhan, Hubei | Wuhan, Hubei | R&D | —— | 51.00 | Incorporation |
| Hubei Xinjia Testing Technology Co., Ltd. | Xinjia Testing | Xianning, Hubei | Xianning, Hubei | Food testing | —— | 51.00 | Incorporation |
| Wuhan Tianlong Jindi Technology Development Co., Ltd. | Tianlong Jindi | Wuhan, Hubei | Wuhan, Hubei | Trading | —— | 51.00 | Business combination not under common control |
| Xianning Junhe Sales Co., Ltd. | Xianning Junhe | Xianning, Hubei | Xianning, Hubei | Trading | —— | 51.00 | Business combination not under common control |
| Wuhan Junya Sales Co., Ltd. | Junya Sales | Wuhan, Hubei | Wuhan, Hubei | Trading | —— | 51.00 | Incorporation |
~ 214 ~
| Name of subsidiary | Abbreviation | Principal place of business | Registered Address | Nature of business | Percentage of equity interests by the Company (%) | Ways of acquisition | |
| Direct | Indirect | ||||||
| Suizhou Junhe Trading Co., Ltd. | Suizhou Junhe | Suizhou, Hubei | Suizhou, Hubei | Trading | —— | 51.00 | Incorporation |
| Huanggang Junya Trading Co., Ltd. | Huanggang Junya | Huanggang, Hubei | Huanggang, Hubei | Trading | —— | 51.00 | Incorporation |
| Wuhan Gulou Junhe Trading Co., Ltd. | Wuhan Gulou Junhe | Wuhan, Hubei | Wuhan, Hubei | Trading | —— | 51.00 | Incorporation |
| Wuhan Gulou Juntai Trading Co., Ltd. | Wuhan Gulou Juntai | Wuhan, Hubei | Wuhan, Hubei | Trading | —— | 51.00 | Incorporation |
| Xiaogan Gulou Tiancheng Trading Co., Ltd. | Xiaogan Gulou Tiancheng | Xiaogan, Hubei | Xiaogan, Hubei | Trading | —— | 51.00 | Incorporation |
| Ezhou Junya Trading Co., Ltd. | Ezhou Junya Trading | Ezhou Hubei | Ezhou Hubei | Trading | —— | 51.00 | Incorporation |
| Wuhan Juntai Trading Co., Ltd. | Wuhan Juntai Trading | Wuhan Hubei | Wuhan Hubei | Trading | —— | 51.00 | Incorporation |
| Anhui Mingguang Distillery Co., Ltd. | Mingguang Distillery | Chuzhou, Anhui | Chuzhou, Anhui | Production | 60.00 | —— | Business combination not under common control |
| Mingguang Tiancheng Mingjiu Sales Co., Ltd. | Tiancheng Sales | Chuzhou, Anhui | Chuzhou, Anhui | Trading | —— | 60.00 | Business combination not under common control |
| Fengyang Xiaogangcun Mingjiu Distillery Co., Ltd. | FY Xiaogangcun | Chuzhou, Anhui | Chuzhou, Anhui | Production | —— | 42.00 | Business combination not under common control |
| Anhui Jiuhao ChinaRail Construction Engineering Co., Ltd. | Jiuhao ChinaRail | Bozhou, Anhui | Bozhou, Anhui | Construction | 52.00 | —— | Incorporation |
| Anhui Zhenrui Construction Engineering Co., Ltd. | Zhenrui Construction | Bozhou, Anhui | Bozhou, Anhui | Construction | —— | 52.00 | Incorporation |
| Guizhou Renhuai Maotai Treasure | Treasure Distillery | Guizhou Renhuai | Guizhou Renhuai | Production | 60.00 | —— | Business combination not |
~ 215 ~
| Name of subsidiary | Abbreviation | Principal place of business | Registered Address | Nature of business | Percentage of equity interests by the Company (%) | Ways of acquisition | |
| Direct | Indirect | ||||||
| Distillery Co., Ltd. | under common control | ||||||
| Guizhou Renhuai Maotai Treasure Distillery Sales CO.,Ltd. | Treasure Distillery Sales | Guizhou Renhuai | Guizhou Renhuai | Trading | —— | 60.00 | Incorporation |
| Anhui Gujing Health Technology Co., Ltd | GJ Health Technology | Bozhou, Anhui | Bozhou, Anhui | Production | 60.00 | —— | Business combination not under common control |
| Anhui Maiqi Biotechnology Co., Ltd | Maiqi Biotechnology | Bozhou, Anhui | Bozhou, Anhui | R&D | —— | 60.00 | Business combination not under common control |
| Anhui Yangshengtianxia Brand Operation Co. , Ltd. | Brand Operation | Hefei, Anhui | Hefei, Anhui | Advertising | —— | 60.00 | Business combination not under common control |
| Hainan Yangshengtianxia Biotechnology Development Co., Ltd | Biotechnology | Lingshui, Hainan | Lingshui, Hainan | Trading | —— | 60.00 | Business combination not under common control |
(b) Significant non-wholly owned subsidiaries
| Name of subsidiary | Proportion of ownership interest held by non- controlling interests | Profit or loss attributable to non- controlling interests during the reporting period | Dividends declared to distribute to non-controlling interests during the reporting period | Non-controlling interests at the end of the reporting period |
| HHL Distillery | 49.00 | 113,197,360.63 | 65,186,961.86 | 650,378,400.13 |
(c) Main financial information of significant non-wholly owned subsidiaries
| Name of subsidiary | 31 December 2024 | |||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| HHL Distillery | 1,178,956,874.64 | 1,127,047,720.08 | 2,306,004,594.72 | 789,759,669.36 | 188,942,067.96 | 978,701,737.32 |
~ 216 ~
(Continued)
| Name of subsidiary | 31 December 2023 | |||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| HHL Distillery | 1,269,187,978.69 | 1,167,449,470.70 | 2,436,637,449.39 | 939,863,270.35 | 267,657,052.44 | 1,207,520,322.79 |
| Name of subsidiary | 2024 | |||
| Revenue | Net profit/(loss) | Total comprehensive income | Net cash flows from operating activities | |
| HHL Distillery | 2,139,845,657.49 | 231,015,021.69 | 231,220,346.85 | 216,773,671.76 |
(Continued)
| Name of subsidiary | 2023 | |||
| Revenue | Net profit/(loss) | Total comprehensive income | Net cash flows from operating activities | |
| HHL Distillery | 1,827,457,484.53 | 216,726,429.40 | 216,471,589.84 | 181,674,168.21 |
8.2 Interests in Joint Arrangements or Associates
(a) Significant joint ventures or associatesThe Company had no significant joint venture or associate.(b) Summarized financial information about insignificant joint ventures and associates
| 31 December 2024/2024 | 31 December 2023/2023 | |
| Joint venture： | ||
| Total carrying amount of investments | ||
| The aggregate amount of below items calculated based on proportion of equity interests: | ||
| —Net profit/(loss) | ||
| —Other comprehensive income | ||
| —Total comprehensive income | ||
| Associate： |
~ 217 ~
| 31 December 2024/2024 | 31 December 2023/2023 | |
| Total carrying amount of investments | 11,732,641.44 | 10,367,078.26 |
| The aggregate amount of below items calculated based on proportion of equity interests: | ||
| —Net profit/(loss) | 1,365,563.18 | 212,842.28 |
| —Other comprehensive income | ||
| —Total comprehensive income | 1,365,563.18 | 212,842.28 |
9. GOVERNMENT GTRANTS
9.1 Government grants recognised as receivables
As at 31 December 2024, the amount of government grants recognised as receivables is RMB 0.
9.2 Liability items that involve government grants
| Items presented in the statement of financial position | Balance as at 31 December 2023 | Increase in government grants during the reporting period | Amount recognised in non-operating income during the reporting period | Amount recognised in other income during the reporting period | Other changes during the reporting period | Balance as at 31 December 2024 | Related to assets or income |
| Deferred income | 100,811,404.82 | 28,974,000.00 | - | 7,642,491.57 | - | 122,142,913.25 | Related to assets |
| Total | 100,811,404.82 | 28,974,000.00 | - | 7,642,491.57 | - | 122,142,913.25 |
9.3 Government grants recognised in current profit or loss
| Items presented in income statement | 2024 | 2023 |
| Other income | 59,697,910.87 | 42,104,956.65 |
| Finance costs | -2,329,500.00 | -928,125.00 |
10. RISKS RELATED TO FINANCIAL INSTRUMENTS
Risks related to the financial instruments of the Company arise from the recognition of variousfinancial assets and financial liabilities during its operation, including credit risk, liquidity risk andmarket risk.Management of the Company is responsible for determining risk management objectives and
~ 218 ~
policies related to financial instruments. Operational management is responsible for the daily riskmanagement through functional departments (e.g. credit management department of the Companyreviews each credit sale). Internal audit department is responsible for the daily supervision ofimplementation of the risk management policies and procedures, and report their findings to theaudit committee in a timely manner.Overall risk management objective of the Company is to establish risk management policies tominimize the risks without unduly affecting the competitiveness and resilience of the Company.
10.1 Credit Risk
Credit risk is the risk of one party of the financial instrument face to a financial loss because theother party of the financial instrument fails to fulfill its obligation. The credit risk of the Company isrelated to cash and equivalent, notes receivable, accounts receivables, other receivables andlong-term receivables. Credit risk of these financial assets is derived from the counterparty’s breachof contract. The maximum risk exposure is equal to the carrying amount of these financialinstruments.Cash and cash equivalent of the Company has lower credit risk, as they are mainly deposited insuch financial institutions as commercial bank, of which the Company thinks with higher reputationand financial position. For notes receivable, other receivables and long-term receivables, theCompany establishes related policies to control their credit risk exposure. The Company assessescredit capability of its customers and determines their credit terms based on their financial position,possibility of the guarantee from third party, credit record and other factors (such as current marketstatus, etc.). The Company monitors its customers’ credit record periodically, and for thosecustomers with poor credit record, the Company will take measures such as written call, shorteningor cancelling their credit terms so as to ensure the overall credit risk of the Company is controllable.(i) Determination of significant increases in credit riskThe Company assesses at each reporting date as to whether the credit risk on financial instrumentshas increased significantly since initial recognition. When the Company determines whether thecredit risk has increased significantly since initial recognition, it considers based on reasonable andsupportable information that is available without undue cost or effort, including quantitative andqualitative analysis of historical information, external credit ratings and forward-lookinginformation. The Company determines the changes in the risk of a default occurring over theexpected life of the financial instrument through comparing the risk of a default occurring on thefinancial instrument as at the reporting date with the risk of a default occurring on the financialinstrument as at the date of initial recognition based on individual financial instrument or a group offinancial instruments with the similar credit risk characteristics.When met one or more of the following quantitative or qualitative criteria, the Company determines
~ 219 ~
that the credit risk on financial instruments has increased significantly: the quantitative criteriaapplied mainly because as at the reporting date, the increase in the probability of default occurringover the lifetime is more than a certain percentage since the initial recognition; the qualitativecriteria applied if the debtor has adverse changes in business and economic conditions, earlywarning list of customer, and etc.(ii) Definition of credit-impaired financial assetsThe criteria adopted by the Company for determination of credit impairment are consistent withinternal credit risk management objectives of relevant financial instruments in considering bothquantitative and qualitative indicators.When the Company assesses whether the debtor has incurred the credit impairment, the mainfactors considered are as following: Significant financial difficulty of the issuer or the borrower; abreach of contract, e.g., default or past-due event; a lender having granted a concession to theborrower for economic or contractual reasons relating to the borrower’s financial difficulty that thelender would not otherwise consider; the probability that the borrower will enter bankruptcy orother financial re-organisation; the disappearance of an active market for the financial asset becauseof financial difficulties of the issuer or the borrower; the purchase or origination of a financial assetat a deep discount that reflects the incurred credit losses.(iii) The parameter of expected credit loss measurementThe company measures impairment provision for different assets with the expected credit loss of12-month or the lifetime based on whether there has been a significant increase in credit risk orcredit impairment has occurred. The key parameters for expected credit loss measurement includedefault probability, default loss rate and default risk exposure. The Company sets up the model ofdefault probability, default loss rate and default risk exposure in considering the quantitativeanalysis of historical statistics (such as counterparties’ ratings, guarantee method and collateral type,repayment method, etc.) and forward-looking information.Relevant definitions are as following:
Default probability refers to the probability of the debtor will fail to discharge the repaymentobligation over the next 12 months or the entire remaining lifetime;Default loss rate refers to the Company's expectation of the loss degree of default risk exposure.The default loss rate varies depending on the type of counterparty, recourse method and priority,and the collateral. The default loss rate is the percentage of the risk exposure loss when default hasoccurred and it is calculated over the next 12 months or the entire lifetime;The default risk exposure refers to the amount that the company should be repaid when default hasoccurred in the next 12 months or the entire lifetime. Both the assessment of significant increase incredit risk of forward-looking information and the calculation of expected credit losses involve
~ 220 ~
forward-looking information. Through historical data analysis, the Company identifies keyeconomic indicators that have impact on the credit risk and expected credit losses for each business.The maximum exposure to credit risk of the Company is the carrying amount of each financial assetin the statement of financial position. The Company does not provide any other guarantees that mayexpose the Company to credit risk.For the accounts receivable of the Company, the amount of top 5 clients represents 52.81% of thetotal; for the other receivables, the amount of the top five entities represents 45.53% of the total.
10.2 Liquidity Risk
Liquidity risk is the risk of shortage of funds when fulfilling the obligation of settlement bydelivering cash or other financial assets. The Company is responsible for the capital management ofall of its subsidiaries, including short-term investment of cash surplus and dealing with forecastedcash demand by raising loans. The Company’s policy is to monitor the demand for short-term andlong-term floating capital and whether the requirement of loan contracts is satisfied so as to ensureto maintain adequate cash and cash equivalents.As at 31 December 2024, the maturity profile of the Company’s financial liabilities is as follows:
| Items | 31 December 2024 | |||
| Within -1 year | 1-2 years | 2-3 years | Above 3 years | |
| Short-term loans | 51,250,000.00 | |||
| Notes payable | 589,364,409.55 | |||
| Accounts payable | 2,942,339,182.13 | |||
| Other payables | 3,146,672,513.57 | |||
| Non-current liabilities maturing within one year | 97,742,493.42 | |||
| Other current liabilities | 1,691,188,287.40 | |||
| Long-term loans | 22,231,962.50 | 21,100,825.00 | ||
| Lease liabilities | 19,162,597.68 | 16,968,848.91 | 61,492,196.07 | |
| Total | 8,518,556,886.07 | 41,394,560.18 | 38,069,673.91 | 61,492,196.07 |
(Continued)
| Items | 31 December 2023 | |||
| Within -1 year | 1-2 years | 2-3 years | Above 3 years | |
| Short-term loans | ||||
| Notes payable | 1,353,187,723.44 | |||
| Accounts payable | 2,814,192,071.24 | |||
| Other payables | 3,267,292,222.01 | |||
~ 221 ~
| Items | 31 December 2023 | |||
| Within -1 year | 1-2 years | 2-3 years | Above 3 years | |
| Non-current liabilities maturing within one year | 85,333,845.39 | |||
| Other current liabilities | 1,132,018,451.10 | |||
| Long-term loans | 68,342,975.00 | 22,231,962.50 | 21,100,825.00 | |
| Lease liabilities | 9,767,250.93 | 10,702,071.52 | 64,279,515.29 | |
| Total | 8,652,024,313.18 | 78,110,225.93 | 32,934,034.02 | 85,380,340.29 |
10.3 Market Risk
Market risk of financial instruments refers to the risk that the fair value or future cash flow offinancial instruments will fluctuate due to changes in market prices. Market risk mainly includesforeign exchange risk and interest rate risk.(a) Foreign currency riskForeign currency risk of the Company mainly arise from foreign currency assets and liabilitiesdenominated in currency other than the Company’s functional currency. The main business of theCompany is located in Chinese Mainland, and the main business is settled in RMB. There is only asmall amount of export business, which has a small proportion of income scale and impact, and haslittle exchange rate risk.(b) Interest rate riskInterest risk refers to the risk on the fair value or future cash flows of a financial instrument broughtby the change of market interest rate. Interest risk mainly arises from bank loans. As of thestatement date, the Company had no bank loan with a floating interest rate.(c) Other price riskInvestments held for trading were measured at fair value. As such, these investments are subject tothe risk brought by the change of security prices. The Company controls this risk to the acceptablelevel by utilising multiple investment mix.
11. FAIR VALUE DISCLOSURES
The inputs used in the fair value measurement in its entirety are to be classified in the level of thehierarchy in which the lowest level input that is significant to the measurement is classified.Level 1: Inputs consist of unadjusted quoted prices in active markets for identical assets orliabilities.
~ 222 ~
Level 2: Inputs for the assets or liabilities (other than those included in Level 1) that are eitherdirectly or indirectly observable.Level 3: Inputs are unobservable inputs for the assets or liabilities
11.1 Assets and Liabilities Measured at Fair Value at 31 December 2024
| Items | Fair value at 31 December 2024 | |||
| Level 1 | Level 2 | Level 3 | Total | |
| Recurring fair value measurements | ||||
| (a) financial assets held-for-trading | - | - | 60,184,353.81 | 60,184,353.81 |
| (i) Financial assets at fair value through profit or loss | - | - | 60,184,353.81 | 60,184,353.81 |
| 1.Debt instruments | - | - | - | - |
| 2.Structural financial products | - | - | 60,184,353.81 | 60,184,353.81 |
| (b) Financial assets at fair value through other comprehensive income | - | - | 3,036,233,638.57 | 3,036,233,638.57 |
| 1.Accounts receivable financing | - | - | 2,966,732,807.75 | 2,966,732,807.75 |
| 2.Other equity instrument investment | - | - | 69,500,830.82 | 69,500,830.82 |
| Total assets measured at fair value on a recurring basis | - | - | 3,096,417,992.38 | 3,096,417,992.38 |
The fair value of financial instruments traded in an active market is based on quoted market pricesat the reporting date. The fair value of financial instruments not traded in an active market isdetermined by using valuation techniques. Specific valuation techniques used to value the abovefinancial instruments include discounted cash flow and market approach to comparable companymodel. Inputs in the valuation technique include risk-free interest rates, benchmark interest rates,exchange rates, credit spreads, liquidity premiums, discount for lack of liquidity.
11.2 Fair Value of Financial Assets or Financial Liabilities which are not Measured at FairValueThe financial assets and financial liabilities of the Company measured at amortised cost mainlyinclude: cash and cash equivalents, notes receivable, accounts receivable, other receivables, debtinvestments, short-term borrowings, notes payable, accounts payable, other payables, long-termborrowings maturing within one year, long-term payables, long-term borrowings and bondspayable.
12. RELATED PARTIES AND RELATED PARTY TRANSACTIONSRecognition of related parties: The Company has control or joint control of, or exercise significant
~ 223 ~
influence over another party; or the Company and another party are controlled or jointly controlledby the same third party.
12.1 General Information of the Parent Company
| Name of the parent | Registered address | Nature of the business | Registered capital | Percentage of equity interests in the Company (%) | Voting rights in the Company (%) |
| GJ Group | Bozhou, Anhui | Production of beverage, construction materials, plastic products. | 1,000 million | 51.34 | 51.34 |
The Company’s ultimate controller is the State-owned Asset Management Commission of thePeople's Government of Baozhou, Anhui
12.2 General Information of Subsidiaries
Details of the subsidiaries please refer to Notes 8 INTERESTS IN OTHER ENTITIES.
12.3 Joint Ventures and Associates of the Company
(a) General information of significant joint ventures and associatesDetails of significant joint ventures and associates please refer to Notes 8 INTERESTS IN OTHERENTITIES
12.4 Other Related Parties of the Company
| Name | Relationship with the Company |
| Nanjing Suning Property Development Co., Ltd.(Suning Property Development) | Controlled by ZHANG Guiping, the non-executive director of the Company |
| Anhui Ruijing Shanglv (Group) Co., Ltd. (RJSL Group) | Controlled by the Company's controlling shareholder or ultimate controller |
| Anhui Ruijing Shanglv (Group) Co., Ltd. Hefei Gujing Holiday Inn (RJSL Holiday Inn) | Controlled by the Company's controlling shareholder or ultimate controller |
| Bozhou Gujing Huishenglou Catering Co., Ltd.(GJ Huishenglou Catering) | Controlled by the Company's controlling shareholder or ultimate controller |
| Anhui Haochidian Catering Co., Ltd. (Haochidian Catering) | Controlled by the Company's controlling shareholder or ultimate controller |
| Anhui Ruijing Catering Co., Ltd. (Ruijing Catering) | Controlled by the Company's controlling shareholder or ultimate controller |
~ 224 ~
| Shanghai Beihai Hotel Co., Ltd. (Beihai Hotel) | Controlled by the Company's controlling shareholder or ultimate controller |
| Anhui Gujing Hotel Development Co., Ltd.(GJ Hotel Development) | Controlled by the Company's controlling shareholder or ultimate controller |
| Anhui Huixin Financial Investment Group Co., Ltd.(Huixin Financial Investment) | Controlled by the Company's controlling shareholder or ultimate controller |
| Bozhou Anxin Small Loan Co., Ltd. (Anxin Small Loan) | Controlled by the Company's controlling shareholder or ultimate controller |
| Anhui Hengxin Pawnshop Co., Ltd. (Hengxin Pawnshop) | Controlled by the Company's controlling shareholder or ultimate controller |
| Anhui Ruixin Pawnshop Co., Ltd. (Ruixin Pawnshop) | Controlled by the Company's controlling shareholder or ultimate controller |
| Anhui Zhongxin Financial Leasing Co., Ltd.(Zhongxin Financial Leasing) | Controlled by the Company's controlling shareholder or ultimate controller |
| Anhui Lixin E-Commerce Co., Ltd. (Lixin E-Commerce) | Controlled by the Company's controlling shareholder or ultimate controller |
| Anhui Youxin Financing Guarantee Co, Ltd. (Youxin Guarantee) | Controlled by the Company's controlling shareholder or ultimate controller |
| Hefei Longxin Corporate Management Advisory Co., Ltd. (Longxin Advisory) | Controlled by the Company's controlling shareholder or ultimate controller |
| Anhui Chuangxin Equity Investment Co. Ltd.(Chuangxin Equity Investment) | Controlled by the Company's controlling shareholder or ultimate controller |
| Anhui Lejiu Jiayuan Travel Management Co., Ltd. (Lejiu Jiayuan) | Controlled by the Company's controlling shareholder or ultimate controller |
| Anhui Shenglong Trading Co., Ltd. (Shenglong Trading) | Controlled by the Company's controlling shareholder or ultimate controller |
| Anhui Gujing Health Industry Co., Ltd. (Health Industry) | Controlled by the Company's controlling shareholder or ultimate controller |
| Bozhou Guest House Co., Ltd. (Bozhou Guest House) | Controlled by the Company's controlling shareholder or ultimate controller |
| Dongfang Ruijing Enterprise Investment Co., Ltd.(Dongfang Ruijing) | Controlled by the Company's controlling shareholder or ultimate controller |
| Anhui Gujing International Development Co., Ltd.(GJ International) | Controlled by the Company's controlling shareholder or ultimate controller |
| Dazhongyuan Jiugu Cultural Tourism Development Co., Ltd. (Dazhongyuan Jiugu Cultural) | Controlled by the Company's controlling shareholder or ultimate controller |
| Anhui Jiuan Construction Management Advisory Co., Ltd.(Jiuan Advisory) | Controlled by the Company's controlling shareholder or ultimate controller |
12.5 Related Party Transactions
~ 225 ~
(a) Purchases or sales of goods, rendering or receiving of servicesPurchases of goods, receiving of services:
| Related parties | Nature of the transaction(s) | 2024 | 2023 |
| Bozhou Guest House | Purchases of materials | 8,070.80 | |
| Bozhou Guest House | Receiving catering and accommodation | 8,790,826.60 | 9,206,704.05 |
| GJ Huishenglou Catering | Receiving catering and accommodation | 5,112,486.87 | 6,731,462.40 |
| GJ Hotel Development | Receiving catering and accommodation | 917,799.50 | 1,459,825.47 |
| GJ Hotel Development | Purchases of materials | 593,096.00 | 43,893.81 |
| RJSL Group | Purchase of materials and services | 1,061.95 | 54,513.27 |
| RJSL Group | Receiving catering and accommodation | 8,678.00 | 10,358.79 |
| RJSL Holiday Inn | Receiving catering and accommodation | 369,617.40 | 224,485.38 |
| RJSL Holiday Inn | Purchase of materials and services | 1,553,686.56 | 620,370.39 |
| Dazhongyuan Jiugu Cultural | Purchases of materials | - | 10,399.15 |
| Youxin Guarantee | Receiving services | 186,613.69 | 47,169.81 |
| Jiuan Advisory | Advisory and assurance | 16,399,697.94 | 8,471,196.45 |
| Total | —— | 33,933,564.51 | 26,888,449.77 |
Sales of goods and rendering of services:
| Related parties | Nature of the transaction(s) | 2024 | 2023 |
| Shenglong Trading | Sales of distilled wine | 881,579.63 | 2,525,957.53 |
| Shenglong Trading | Provision of catering and accommodation | 12,363.04 | 11,626.00 |
| Shenglong Trading | Sales of small materials | 1,987.61 | 17,778.77 |
| RJSL Group | Sales of distilled wine | 1,868,853.84 | 31,460.18 |
| RJSL Group | Provision of catering and accommodation | 8,893.39 | 12,299.54 |
| RJSL Group | Sales of small materials | 2,946.90 | 7,962.83 |
| RJSL Holiday Inn | Sales of small materials | 178,315.91 | 19,928.17 |
| RJSL Holiday Inn | Provision of catering and accommodation | - | 1,276.02 |
| RJSL Holiday Inn | Sales of distilled wine | 140,628.33 | 17,690.27 |
| GJ Hotel Development | Sales of distilled wine | 1,459,070.75 | 474,538.92 |
| GJ Hotel Development | Sales of water and electricity | 195,354.91 | 165,580.57 |
| GJ Hotel Development | Provision of catering and accommodation | 94,339.62 | 2,153.31 |
| GJ Hotel Development | Sales of small materials | 34,713.45 | 58,004.73 |
| GJ Group | Provision of catering and accommodation | 330,327.68 | 367,493.10 |
| GJ Group | Sales of small materials | 166,629.10 | 363,835.13 |
| Bozhou Guest House | Sales of small materials | 131,208.76 | 95,301.17 |
| Bozhou Guest House | Sales of distilled wine | 243,911.51 | 24,371.68 |
~ 226 ~
| Related parties | Nature of the transaction(s) | 2024 | 2023 |
| Bozhou Guest House | Provide labor services | 10,905.21 | 707.55 |
| Huixin Financial Investment | Sales of distilled wine | 17,734.51 | 2,309.73 |
| Huixin Financial Investment | Sales of small materials | - | 3,716.81 |
| Huixin Financial Investment | Provision of catering and accommodation | 2,243.40 | - |
| GJ Huishenglou Catering | Sales of distilled wine | 54,716.81 | 15,929.20 |
| GJ Huishenglou Catering | Sales of small materials | 46,791.16 | 18,017.72 |
| Anxin Small Loan | Sales of distilled wine | 28,353.98 | 3,504.42 |
| Anxin Small Loan | Sales of small materials | - | 15,752.21 |
| Haochidian Catering | Provision of catering and accommodation | 72,376.00 | - |
| Haochidian Catering | Sales of distilled wine | 1,632,557.51 | 8,123.89 |
| Haochidian Catering | Sales of small materials | 62,092.93 | 13,538.02 |
| Zhongxin Financial Leasing | Sales of distilled wine | 4,991.15 | 637.17 |
| Zhongxin Financial Leasing | Sales of small materials | - | 1,061.95 |
| Hengxin Pawnshop | Sales of distilled wine | 9,530.98 | 1,274.34 |
| Hengxin Pawnshop | Sales of small materials | - | 2,123.89 |
| Jiuan Advisory | Sales of distilled wine | 44,920.35 | 75,212.40 |
| Jiuan Advisory | Provision of catering and accommodation | 800.00 | 4,597.00 |
| Jiuan Advisory | Sales of small materials | 20,693.37 | 74,286.24 |
| Beihai Hotel | Sales of distilled wine | 133,568.15 | 5,575.22 |
| Beihai Hotel | Sales of small materials | - | 354.00 |
| Lejiu Jiayuan | Sell water and electricity | - | 1,346.46 |
| Ruixin Pawnshop | Sales of distilled wine | 4,991.15 | 637.17 |
| Ruixin Pawnshop | Sales of small materials | - | 1,061.95 |
| Youxin Guarantee | Sales of distilled wine | 4,991.15 | 637.17 |
| Youxin Guarantee | Sales of small materials | - | 1,061.95 |
| Longxin Advisory | Sales of small materials | 2,150.44 | 159.29 |
| Longxin Advisory | Sales of distilled wine | - | 265.49 |
| Dongfang Ruijing | Provision of catering and accommodation | 34,061.79 | 66,037.74 |
| Total | —— | 7,939,594.47 | 4,515,186.90 |
(b) LeasesThe Company as lessor:
| The lessee | Type of assets | 2024 | 2023 |
| GJ Hotel Development | Houses and buildings | 1,095,101.19 | 1,392,871.94 |
| Total | —— | 1,095,101.19 | 1,392,871.94 |
~ 227 ~
The Company as lessee:
| The lessor | Type of assets | 2024 | ||||
| Expenses for short-term lease and lease of low value asset under simplified method | Variable lease payments not included in lease liabilities | Lease payment for current period | Interest expense of lease liabilities | Increase in right-of-use assets | ||
| GJ Group | Houses and buildings | 310,396.56 | - | 1,429,123.73 | 70,810.69 | 4,914,466.32 |
| Suning Property Development | Houses and buildings | - | - | 1,157,625.00 | 252,549.47 | - |
| Dazhongyuan Jiugu Cultural | Houses, buildings and land | - | - | 6,999,238.82 | 521,646.90 | 31,179,563.79 |
| Total | —— | 310,396.56 | - | 9,585,987.55 | 845,007.06 | 36,094,030.11 |
(Continued)
| The lessor | Type of assets | 2023 | ||||
| Expenses for short-term lease and lease of low value asset under simplified method | Variable lease payments not included in lease liabilities | Lease payment for current period | Interest expense of lease liabilities | Increase in right-of-use assets | ||
| GJ Group | Houses and buildings | 931,328.78 | - | 981,843.88 | - | - |
| Suning Property Development | Houses and buildings | - | - | 2,152,500.00 | 558,931.43 | - |
| Total | —— | 931,328.78 | - | 3,134,343.88 | 558,931.43 | - |
(d) Key management personnel compensation
| Items | 2024 | 2023 |
| Key management personnel compensation | 26.79million | 27.67million |
12.6 Receivables and Payables with Related Parties
~ 228 ~
| Items | Related parties | 31 December 2024 | 31 December 2023 |
| Contract liabilities | Bozhou Guest House | 16,131.81 | 15,988.44 |
| Contract liabilities | GJ Huishenglou Catering | 5,070.80 | 5,070.80 |
| Contract liabilities | RJSL Group | 1,529,729.09 | 221.12 |
| Contract liabilities | RJSL Holiday Inn | 566.37 | - |
| Accounts payable | Jiuan Advisory | 172,318.90 | 4,711,062.24 |
| Accounts payable | GJ Hotel Development | 15,558.00 | 6,500.00 |
| Accounts payable | Bozhou Guest House | 155,845.44 | 29,768.32 |
| Accounts payable | RJSL Holiday Inn | 381,170.20 | - |
| Other payables | RJSL Group | 305,533.60 | - |
| Other payables | GJ Hotel Development | 100,000.00 | 50,000.00 |
| Other payables | Jiuan Advisory | 47,877.00 | 18,000.00 |
13. COMMITMENTS AND CONTINGENCIES
13.1 Significant Commitments
As at 31 December 2024, the Company has no significant commitments need to be disclosed.
13.2 Contingencies
As at 31
December 2024, the Company has no significant contingencies need to be disclosed.
14. EVENTS AFTER THE REPORTING PERIOD
14.1 Profit Distribution
The company intends to take the total share capital of 528,600,000 shares at the end of 2024 as thebase, distribute a cash dividend of 50.00 yuan (including tax) for every 10 shares to all shareholders,issue no bonus shares (including tax), and not increase the share capital by converting reservefunds.Other than the above, as at April 25, 2025, the Company had no other post-balance sheet events thatrequired disclosure.
15. OTHER SIGNIFICANT MATTERS
15.1 Segment Information
In accordance with the Company’s internal management and reporting structure, segment reportingis not applicable.
~ 229 ~
16. NOTES TO THE MAIN ITEMS OF THE FINANCIAL STATEMENTS OF THEPARENT COMPANY
16.1 Accounts Receivable
(a) No account receivable as of 31 December 2024.(b) No account receivable as of 31 December 2024.(c) Impairment movement for the period was not applicable for accounts receivable.
16.2 Other Receivables
(a) Other receivables by category
| Items | 31 December 2024 | 31 December 2023 |
| Interest receivable | - | - |
| Dividend receivable | - | - |
| Other receivables | 505,111,096.18 | 384,878,020.29 |
| Total | 505,111,096.18 | 384,878,020.29 |
(b) Other Receivables(i) Other receivables by aging
| Aging | 31 December 2024 | 31 December 2023 |
| Within one year | 312,820,191.46 | 384,298,400.37 |
| Including: Within 6 months | 222,819,167.02 | 384,283,297.37 |
| 7 months to 1 years | 90,001,024.44 | 15,103.00 |
| 1-2 years | 192,491,023.18 | 24,380.80 |
| 2-3 years | 20,500.00 | 1,303,136.00 |
| Over 3 years | 2,408,794.09 | 29,741,318.31 |
| Subtotal | 507,740,508.73 | 415,367,235.48 |
| Less: provision for bad debt | 2,629,412.55 | 30,489,215.19 |
| Total | 505,111,096.18 | 384,878,020.29 |
(ii) Other receivables by nature
| Nature | 31 December 2024 | 31 December 2023 |
| Due from related party within the scope of consolidation | 497,697,675.07 | 374,969,732.31 |
| Security investments | - | 28,635,660.22 |
| Margin deposits | 3,763,589.17 | 3,693,589.17 |
~ 230 ~
| Nature | 31 December 2024 | 31 December 2023 |
| Rentals and utilities receivable | 1,002,533.40 | 1,135,726.76 |
| Others | 5,276,711.09 | 6,932,527.02 |
| Subtotal | 507,740,508.73 | 415,367,235.48 |
| Less: Provision for bad debt | 2,629,412.55 | 30,489,215.19 |
| Total | 505,111,096.18 | 384,878,020.29 |
(iii) Other receivables by bad debt provision methodA. As at 31 December 2024, provision for bad debt recognised based on three stages model
| Stages | Book balance | Provision for bad debt | Carrying acount |
| Stage 1 | 507,740,508.73 | 2,629,412.55 | 505,111,096.18 |
| Stage 2 | - | - | - |
| Stage 3 | - | - | - |
| Total | 507,740,508.73 | 2,629,412.55 | 505,111,096.18 |
As at 31 December 2024, provision for bad debt at stage 1:
| Category | Book balance | Expected credit loss rate in the next 12 months (%) | Provision for bad debt | Carrying amount |
| Provision for bad debt recognised individually | - | - | - | - |
| Provision for bad debt recognised by groups | 507,740,508.73 | 0.52 | 2,629,412.55 | 505,111,096.18 |
| Including: Group 1 | 497,697,675.07 | - | - | 497,697,675.07 |
| Group 2 | 10,042,833.66 | 26.18 | 2,629,412.55 | 7,413,421.11 |
| Total | 507,740,508.73 | 0.52 | 2,629,412.55 | 505,111,096.18 |
Details of Group 2 receivables as of the statement date
| Age group | 31 December 2024 | ||
| Book balance | Provision for bad debt | Provision ratio (%) | |
| Within 1 year | 6,122,516.39 | 61,266.14 | 1.00 |
| Including: Within 6 months | 6,121,491.95 | 61,214.92 | 1.00 |
| 7 months to 1 years | 1,024.44 | 51.22 | 5.00 |
| 1 to 2 years | 1,491,023.18 | 149,102.32 | 10.00 |
~ 231 ~
| Age group | 31 December 2024 | ||
| Book balance | Provision for bad debt | Provision ratio (%) | |
| 2 to 3 years | 20,500.00 | 10,250.00 | 50.00 |
| Over 3 years | 2,408,794.09 | 2,408,794.09 | 100.00 |
| Total | 10,042,833.66 | 2,629,412.55 | 26.18 |
B. As at 31 December 2023, provision for bad debt recognised based on three stages model
| Stages | Book balance | Provision for bad debt | Carrying amount |
| Stage 1 | 386,731,575.26 | 1,853,554.97 | 384,878,020.29 |
| Stage 2 | - | - | - |
| Stage 3 | 28,635,660.22 | 28,635,660.22 | - |
| Total | 415,367,235.48 | 30,489,215.19 | 384,878,020.29 |
As at 31 December 2023, provision for bad debt at stage 1:
| Category | Book balance | Expected credit loss rate in the next 12 months (%) | Provision for bad debt | Carrying amount |
| Provision for bad debt recognised individually | ||||
| Provision for bad debt recognised by groups | 386,731,575.26 | 0.48 | 1,853,554.97 | 384,878,020.29 |
| Including: Group 1 | 374,969,732.31 | - | - | 374,969,732.31 |
| Group 2 | 11,761,842.95 | 15.76 | 1,853,554.97 | 9,908,287.98 |
| Total | 386,731,575.26 | 0.48 | 1,853,554.97 | 384,878,020.29 |
Details of Group 2 receivables as of the statement date
| Age group | 31 December 2023 | ||
| Book balance | Provision for bad debt | Provision ratio (%) | |
| Within 1 year | 9,328,668.06 | 93,890.80 | 1.01 |
| Including: Within 6 months | 9,313,565.06 | 93,135.65 | 1.00 |
| 7 months to 1 years | 15,103.00 | 755.15 | 5.00 |
| 1 to 2 years | 24,380.80 | 2,438.08 | 10.00 |
| 2 to 3 years | 1,303,136.00 | 651,568.00 | 50.00 |
~ 232 ~
| Age group | 31 December 2023 | ||
| Book balance | Provision for bad debt | Provision ratio (%) | |
| Over 3 years | 1,105,658.09 | 1,105,658.09 | 100.00 |
| Total | 11,761,842.95 | 1,853,554.97 | 15.76 |
As at 31 December 2023, provision for bad debt at stage 3:
| Category | Book balance | Expected credit loss ratio (%) over the entire duration | Provision for bad debt | Carrying amount |
| Provision for bad debt recognised individually | 28,635,660.22 | 100.00 | 28,635,660.22 | - |
| Provision for bad debt recognised by groups | - | |||
| Including: Group 1 | - | |||
| Group 2 | - | |||
| Total | 28,635,660.22 | 100.00 | 28,635,660.22 | - |
Details of receivables subject to individual assessment as of 31 December 2023
| Entity name | 31 December 2023 | |||
| Book balance | Provision for bad debt | Provision ratio (%) | Reason for impairment | |
| Hengxin Securities Co., Ltd. | 28,635,660.22 | 28,635,660.22 | 100.00 | In bankruptcy |
| Total | 28,635,660.22 | 28,635,660.22 | 100.00 | - |
(iv) Changes of provision for bad debt during the reporting period
| Category | 31 December 2023 | Changes during the reporting period | 31 December 2024 | ||
| Provision | Recovery or reversal | Elimination or write-off | |||
| Individual assessment | 28,635,660.22 | - | - | 28,635,660.22 | - |
| Portfolio assessment | 1,853,554.97 | 775,857.58 | - | - | 2,629,412.55 |
| Total | 30,489,215.19 | 775,857.58 | - | 28,635,660.22 | 2,629,412.55 |
(v) Other receivables written off during the reporting period
~ 233 ~
| Items | Amount |
| Hengxin Securities Co., Ltd. | 28,635,660.22 |
Including: Significant write-off of other receivables:
| Entity name | Nature | Amount | Reason | Incurred from related party transaction or not |
| Hengxin Securities Co., Ltd. | Securities investment | 28,635,660.22 | The bankruptcy proceedings have been concluded. | No |
| Total | — | 28,635,660.22 | — | — |
(vi) Top five closing balances by entity
| Entity name | Nature | Balance as at 31 December 2023 | Aging | Proportion of the balance to the total other receivables (%) | Provision for bad debt |
| Top 1 | Due from related party within the scope of consolidation | 380,000,000.00 | Within 2 years | 74.84 | - |
| Top 2 | Due from related party within the scope of consolidation | 71,000,000.00 | 1 to 2 years | 13.98 | - |
| Top 3 | Due from related party within the scope of consolidation | 46,197,675.07 | Within 6 months | 9.10 | - |
| Top 4 | Other | 2,919,311.25 | Within 6 months | 0.57 | 29,193.11 |
| Top 5 | Security investment | 1,303,136.00 | Over 3 years | 0.26 | 1,303,136.00 |
| Total | 501,420,122.32 | 98.75 | 1,332,329.11 |
16.3 Long-term Equity Investments
| Items | 31 December 2024 | 31 December 2023 | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Subsidiaries | 1,642,079,903.43 | - | 1,642,079,903.43 | 1,598,079,903.43 | - | 1,598,079,903.43 |
| Associates | 6,218,934.37 | - | 6,218,934.37 | 4,855,540.61 | - | 4,855,540.61 |
~ 234 ~
| Items | 31 December 2024 | 31 December 2023 | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Total | 1,648,298,837.80 | - | 1,648,298,837.80 | 1,602,935,444.04 | - | 1,602,935,444.04 |
(a) Investments in subsidiaries
| Investees | 31 December 2023 | Increase during the reporting period | Decrease during the reporting period | 31 December 2024 | Provision for impairment during the reporting period | Provision for impairment at 31 December 2023 |
| GJ Sales | 68,949,286.89 | - | - | 68,949,286.89 | - | - |
| Longrui Glass | 85,267,453.06 | - | - | 85,267,453.06 | - | - |
| Jinhao Hotel | 49,906,854.63 | - | - | 49,906,854.63 | - | - |
| GJ Guest House | 648,646.80 | - | - | 648,646.80 | - | - |
| Ruisi Weier | 40,000,000.00 | - | - | 40,000,000.00 | - | - |
| YQ Environment Protection | 16,000,000.00 | - | - | 16,000,000.00 | - | - |
| GJ E-Commerce | 5,000,000.00 | - | - | 5,000,000.00 | - | - |
| HHL Distillery | 816,000,000.00 | - | - | 816,000,000.00 | - | - |
| Jinyunlai | 15,000,000.00 | - | - | 15,000,000.00 | - | - |
| Runan Xinke | 10,000,000.00 | - | - | 10,000,000.00 | - | - |
| Jiuan Electric | 10,000,000.00 | - | - | 10,000,000.00 | - | - |
| Mingguang Distillery | 200,200,000.00 | - | - | 200,200,000.00 | - | - |
| Treasure Distillery | 224,723,400.00 | - | - | 224,723,400.00 | - | - |
| Jiuhao ChinaRail | 5,720,000.00 | - | - | 5,720,000.00 | - | - |
| GJ Health Technology | 34,664,262.05 | - | - | 34,664,262.05 | - | - |
| Theme Hotel | 10,000,000.00 | - | 10,000,000.00 | - | - | |
| Anhui Gu Qi Distillery | 6,000,000.00 | 39,000,000.00 | - | 45,000,000.00 | - | - |
| Guge Culture | - | 5,000,000.00 | - | 5,000,000.00 | ||
| Total | 1,598,079,903.43 | 44,000,000.00 | - | 1,642,079,903.43 | - | - |
(b) Investments in associates
| Investees | 31 December 2023 | Changes during the reporting period | ||||
| Increase during the reporting period | Decrease during the reporting period | Gains /(losses) on investments under the equity method | Adjustments of other comprehensive income | Changes in other equity | ||
| (i) Associates | - | - | ||||
~ 235 ~
| Investees | 31 December 2023 | Changes during the reporting period | ||||
| Increase during the reporting period | Decrease during the reporting period | Gains /(losses) on investments under the equity method | Adjustments of other comprehensive income | Changes in other equity | ||
| Xunfeijiuzhi | 4,855,540.61 | - | - | 1,363,393.76 | - | - |
| Total | 4,855,540.61 | - | - | 1,363,393.76 | - | - |
(Continued)
| Investees | Changes during the reporting period | 31 December 2024 | Provision for impairment at 31 December 2024 | ||
| Declaration of cash dividends or distribution of profit | Provision for impairment | Others | |||
| (i)Associates | |||||
| Xunfeijiuzhi | - | - | - | 6,218,934.37 | - |
| Total | - | - | - | 6,218,934.37 | - |
16.4 Revenue and Cost of Sales
| Items | 2024 | 2023 | ||
| Revenue | Costs of sales | Revenue | Costs of sales | |
| Principal activities | 12,868,400,539.49 | 4,152,790,888.94 | 10,501,446,923.20 | 3,628,280,247.93 |
| Other activities | 142,911,297.56 | 87,611,396.02 | 123,590,833.53 | 79,803,499.54 |
| Total | 13,011,311,837.05 | 4,240,402,284.96 | 10,625,037,756.73 | 3,708,083,747.47 |
Note: The company's main business income is distilled wine sales revenue.
16.5 Investment Income
| Items | 2024 | 2023 |
| Investment income from long-term equity investments under cost method | 2,699,374,783.34 | 151,685,778.22 |
| Investment income from long-term equity investments under equity method | 1,363,393.76 | 185,830.36 |
| Gains from disposal of financial assets held-for-trading | 1,330,123.81 | 31,140,435.80 |
| Gains from disposal of financial assets at fair value through other comprehensive income | -39,112,659.61 | -39,556,318.53 |
| Others | 151,618.54 | 15,155.26 |
~ 236 ~
| Items | 2024 | 2023 |
| Total | 2,663,107,259.84 | 143,470,881.11 |
17. SUPPLEMENTARY INFORMATION
17.1 Details of current non-recurring profit or loss
| Items | 2024 | 2023 |
| Gains /(losses) on disposal of non-current assets | -6,996,040.00 | -2,063,270.90 |
| Government grants (except for government grants which are closely related to the ordinary course of business of the Company, in compliance with national policies and regulations, granted in accordance with the determined standards; and influence the profit and loss on an ongoing basis) charged to gains or losses for the period | 47,217,316.71 | 39,946,354.24 |
| Non-financial business’s gains or losses from fair value change arising from financial assets and financial liabilities held and gains or losses from disposal of financial assets and financial liabilities, other than effective value protection hedges relating to the Company’s ordinary course of business | 2,316,575.85 | 51,603,409.95 |
| Reversal of provision for impairment of individually tested receivables | 0.00 | 98,239.02 |
| Other non-operating income/expenses except for items mentioned above | 52,210,445.28 | 51,716,611.35 |
| Total non-recurring profit /(loss) | 94,748,297.84 | 141,301,343.66 |
| Less: Income tax effect | 23,534,161.55 | 34,596,052.57 |
| Less: net non-recurring profit /(loss) attributable to non-controlling interest | 11,118,339.31 | 12,760,425.86 |
| Net non-recurring profit /(loss) attributable to ordinary shareholders | 60,095,796.98 | 93,944,865.23 |
17.2 Return on Net Assets and Earnings Per Share (‘EPS’)
(a) 2024
| Profit for the reporting period | Weighted average return on net assets (%) | EPS | |
| Basic | Diluted | ||
| Net profit attributable to ordinary shareholders | 23.89 | 10.44 | 10.44 |
| Net profit attributable to ordinary shareholders after non-recurring profit or losses | 23.63 | 10.32 | 10.32 |
(b) 2023
| Profit for the reporting period | Weighted average return on net assets (%) | EPS | |
| Basic | Diluted | ||
~ 237 ~
| Profit for the reporting period | Weighted average return on net assets (%) | EPS | |
| Basic | Diluted | ||
| Net profit attributable to ordinary shareholders | 22.92 | 8.68 | 8.68 |
| Net profit attributable to ordinary shareholders after non-recurring profit or loss | 22.45 | 8.50 | 8.50 |
Chairman of the Board:
Anhui Gujing Distillery Company Limited
25 April 2025