张裕B：2023年半年度财务报告(英文版)

Section 10 Financial Report

1. Audit report

Whether the semiannual report has been audited

□ Yes √ No

2. Financial statement

The unit in the statements of the financial notes is RMB Yuan.

2.1 Consolidated balance sheet

Compiling unit: Yantai Changyu Pioneer Wine Co., Ltd. June 30, 2023 Unit: Yuan

Item	Note	June 30, 2023	December 31, 2022
Current assets:
Monetary fund	7.1	1,661,628,793	1,651,454,115
Settlement reserves
Lending funds
Tradable financial assets
Derivative financial assets
Bills receivable	7.2	684,245	2,712,460
Accounts receivable	7.3	210,175,785	343,982,985
Receivables financing	7.4	308,817,929	309,329,918
Advance payment	7.5	9,251,401	60,415,508
Premium receivable
Reinsurance accounts receivable
Receivable reserves for reinsurance contract
Other receivables	7.6	69,101,039	70,542,398
Including: Interest receivable
Dividends receivable
Redemptory monetary capital for sale
Inventories	7.7	2,926,495,444	2,903,398,515
Contract assets
Assets held for sale
Non-current assets due within one year
Other current assets	7.8	156,044,415	185,337,393
Total current assets		5,342,199,051	5,527,173,292
Non-current assets:
Offering loans and imprest
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments	7.9	38,065,512	41,371,385
Other investments in equity instruments
Other non-current financial assets
Investment real estate	7.10	21,041,320	22,115,318

Item	Note	June 30, 2023	December 31, 2022
Fixed assets	7.11	5,926,395,012	6,028,137,972
Construction in progress	7.12	47,247,490	40,934,161
Productive biological assets	7.13	177,932,255	184,420,741
Oil-and-gas assets
Right-of-use assets	7.14	128,804,715	139,887,159
Intangible assets	7.15	551,495,257	578,240,846
Development expenditure
Goodwill	7.16	107,163,616	107,163,616
Long-term prepaid expenses	7.17	265,783,428	274,699,232
Deferred income tax assets	7.18	215,145,646	227,362,656
Other non-current assets
Total non-current assets		7,479,074,251	7,644,333,086
Total assets		12,821,273,302	13,171,506,378
Current liabilities:
Short-term loans	7.19	348,885,834	389,378,480
Borrowings from the Central Bank
Borrowing funds
Tradable financial liabilities
Derivative financial liabilities
Bills payable
Accounts payable	7.20	417,210,497	503,323,746
Advances from customers
Contract liabilities	7.21	135,643,228	165,727,991
Financial assets sold for repurchase
Deposits from customers and interbank
Receivings from vicariously traded securities
Receivings from vicariously sold securities
Employee remunerations payable	7.22	135,368,771	182,951,538
Taxes and dues payable	7.23	202,463,826	239,695,902
Other payables	7.24	373,745,618	372,608,689
Including: Interest payable			88,889
Dividends payable		393,855	70,317
Handling charges and commissions payable
Dividend payable for reinsurance
Liabilities held for sale
Non-current liabilities due within one year	7.25	143,764,399	144,020,834
Other current liabilities	7.26	17,687,656	18,945,706
Total current liabilities		1,774,769,829	2,016,652,886
Non-current liabilities:
Reserves for insurance contracts
Long-term borrowings	7.27	81,961,226	128,112,115
Bonds payable
Including: Preferred stock
Perpetual bonds
Lease liabilities	7.28	94,469,356	109,505,093

Item	Note	June 30, 2023	December 31, 2022
Long-term accounts payable	7.29	20,000,000	42,000,000
Long-term employee remunerations payable
Estimated liabilities
Deferred income	7.30	34,530,599	38,389,058
Deferred income tax liabilities	7.18	8,934,155	11,266,932
Other non-current liabilities
Total non-current liabilities		239,895,336	329,273,198
Total liabilities		2,014,665,165	2,345,926,084
Owner’s equity:
Capital stock	7.31	685,464,000	685,464,000
Other equity instruments
Including: Preferred stock
Perpetual bonds
Capital surplus	7.32	524,548,552	524,968,760
Minus: Treasury stock
Other comprehensive income	7.33	-11,624,173	-23,760,238
Special reserves
Surplus reserves	7.34	342,732,000	342,732,000
General risk preparation
Undistributed profit	7.35	9,104,759,847	9,049,649,211
Total owner’s equities attributable to the parent company		10,645,880,226	10,579,053,733
Minority equity		160,727,911	246,526,561
Total owner’s equities		10,806,608,137	10,825,580,294
Total liabilities and owner’s equities		12,821,273,302	13,171,506,378

Legal Representative: Zhou Hongjiang Accounting Supervisor: Jiang Jianxun Accounting Department Manager: Guo Cuimei

2.2 Balance sheet of the parent company

Compiling unit: Yantai Changyu Pioneer Wine Co., Ltd. Unit: Yuan

Item	Note	June 30, 2023	December 31, 2022
Current assets:
Monetary fund		768,805,339	874,241,771
Tradable financial assets
Derivative financial assets
Bills receivable		200,000
Accounts receivable	17.1	2,030,036	2,301,505
Receivables financing		24,742,972	41,061,417
Advance payment		364,240	3,518,783
Other receivables	17.2	504,925,159	720,176,320
Including: Interest receivable
Dividends receivable		103,544,695	250,000,000
Inventories		421,364,233	335,031,522
Contract assets
Assets held for sale
Non-current assets due within one year
Other current assets		13,408,491	20,080,844

Item	Note	June 30, 2023	December 31, 2022
Total current assets		1,735,840,470	1,996,412,162
Non-current assets:
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments	17.3	7,684,192,789	7,705,853,378
Other investments in equity instruments
Other non-current financial assets
Investment real estate		21,041,320	22,115,318
Fixed assets		208,383,656	216,651,596
Construction in progress			375,969
Productive biological assets		103,686,699	108,370,882
Oil and gas assets
Right-of-use assets		39,031,011	36,153,799
Intangible assets		73,925,123	75,298,044
Development expenditure
Goodwill
Long-term prepaid expenses
Deferred income tax assets		11,993,062	12,120,605
Other non-current assets		1,894,430,000	1,850,200,000
Total non-current assets		10,036,683,660	10,027,139,591
Total assets		11,772,524,130	12,023,551,753
Current liabilities:
Short-term loans		100,075,000	100,000,000
Tradable financial liabilities
Derivative financial liabilities
Bills payable
Accounts payable		70,184,984	100,583,550
Advances from customers
Contract liabilities
Employee remunerations payable		61,122,195	68,112,832
Taxes and dues payable		4,964,239	39,101,259
Other payables		464,911,457	499,751,275
Including: Interest payable
Dividends payable
Liabilities held for sale
Non-current liabilities due within one year		5,850,588	5,129,607
Other current liabilities
Total current liabilities		707,108,463	812,678,523
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred stock
Perpetual bonds
Lease liabilities		39,997,656	38,757,167

Item	Note	June 30, 2023	December 31, 2022
Long-term accounts payable
Long-term employee remuneration payable
Estimated liabilities
Deferred income		444,505	877,814
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities		40,442,161	39,634,981
Total liabilities		747,550,624	852,313,504
Owner’s equities:
Capital stock		685,464,000	685,464,000
Other equity instruments
Including: Preferred stock
Perpetual bonds
Capital surplus		560,853,535	560,182,235
Minus: Treasury stock
Other comprehensive income
Special reserves
Surplus reserves		342,732,000	342,732,000
Undistributed profit		9,435,923,971	9,582,860,014
Total owner’s equities		11,024,973,506	11,171,238,249
Total liabilities and owner’s equities		11,772,524,130	12,023,551,753

Legal Representative: Zhou Hongjiang Accounting Supervisor: Jiang Jianxun Accounting Department Manager: Guo Cuimei

2.3 Consolidated profit statement

Compiling unit: Yantai Changyu Pioneer Wine Co., Ltd. Unit: Yuan

Item	Note	Sum of this period	Sum of prior period
1. Total operating income		1,966,738,485	1,953,092,135
Including: Operating income	7.36	1,966,738,485	1,953,092,135
Interest income
Earned premium
Handling fee and commission income
2. Total operating costs		1,528,483,622	1,493,458,867
Including: Operating costs	7.36	805,459,392	821,855,466
Interest expenditure
Handling fees and commission expenditure
Premium rebate
Net amount of indemnity expenditure
Net amount of the withdrawn reserve fund for insurance contract
Policy bonus payment
Amortized reinsurance expenditures
Taxes and surcharges	7.37	131,447,066	114,739,618
Selling expenses	7.38	453,001,710	417,764,419
Administrative expenses	7.39	128,695,395	127,504,270
Research and development expenses	7.40	6,653,626	5,509,656

Item	Note	Sum of this period	Sum of prior period
Financial expenses	7.41	3,226,433	6,085,438
Including: Interest expenses		12,325,532	11,201,775
Interest income		9,060,578	10,191,697
Plus: Other profit	7.42	28,971,185	21,629,245
Investment profit (loss is listed with “-”)	7.43	15,614,536	-921,317
Including: Investment profit for joint-run business and joint venture		-932,588	-921,317
Financial assets measured at amortized cost cease to be recognized as income
Exchange income (loss is listed with “-”)
Net exposure hedge income (loss is listed with “-”)
Income from fair value changes (loss is listed with “-”)
Credit impairment loss (loss is listed with “-”)	7.44	-993,494	486,076
Asset impairment loss (loss is listed with “-”)	7.45	-244,434	1,490,900
Income from asset disposal (loss is listed with “-”)	7.46	-298,401	-8,239,072
3. Operating profit (loss is listed with “-”)		481,304,255	474,079,100
Plus: Non-operating income	7.47	1,772,522	2,448,613
Minus: Non-operating expenses	7.48	2,125,945	1,343,532
4. Total profits (total loss is listed with “-”)		480,950,832	475,184,181
Minus: Income tax expenses	7.49	130,350,513	128,189,749
5. Net profit (net loss is listed with “-”)		350,600,319	346,994,432
5.1 Classification by operation continuity
5.1.1 Net profit from continuing operation (net loss is listed with “-”)		350,600,319	346,994,432
5.1.2 Net profit from terminating operation (net loss is listed with “-”)
5.2 Classification by ownership
5.2.1 Net profit attributable to owner of the parent company		363,569,436	358,459,603
5.2.2 Minority interest income		-12,969,117	-11,465,171
6. Net after-tax amount of other comprehensive income	7.50	13,707,142	-7,384,531
Net after-tax amount of other comprehensive income attributable to owner of the parent company		12,136,065	-6,397,496
6.1 Other comprehensive income not to be reclassified into profit and loss later
6.1.1 Changes after remeasuring and resetting the benefit plans
6.1.2 Other comprehensive income not to be reclassified into profit and loss under equity method
6.1.3 Changes in the fair value of other investments in equity instruments
6.1.4 Changes in the fair value of the enterprise’s own credit risk
6.1.5 Other
6.2 Other comprehensive income to be reclassified into profit and loss later		12,136,065	-6,397,496
6.2.1 Other comprehensive income to be reclassified into profit and loss under

Item	Note	Sum of this period	Sum of prior period
equity method
6.2.2 Changes in the fair value of other debt investments
6.2.3 Amount of financial assets reclassified into other comprehensive income
6.2.4 Provision for credit impairment of other credit investments
6.2.5 Provision for cash-flow hedge
6.2.6 Difference in translation of Foreign Currency Financial Statement		12,136,065	-6,397,496
6.2.7 Other
Net after-tax amount of other comprehensive income attributable to minority shareholders		1,571,077	-987,035
7. Total comprehensive income		364,307,461	339,609,901
Attributable to owner of the parent company		375,705,501	352,062,107
Attributable to minority shareholders		-11,398,040	-12,452,206
8. Earnings per share:
8.1 Basic earnings per share		0.53	0.52
8.2 Diluted earnings per share		0.53	0.52

Legal Representative: Zhou Hongjiang Accounting Supervisor: Jiang Jianxun Accounting Department Manager: Guo Cuimei

2.4 Profit statement of the parent company

Compiling unit: Yantai Changyu Pioneer Wine Co., Ltd. Unit: Yuan

Item	Note	Sum of this period	Sum of prior period
1. Operating income	17.4	241,967,096	229,587,143
Minus: Operating costs	17.4	200,913,318	193,114,244
Taxes and surcharges		9,139,640	14,680,577
Selling expenses
Administrative expenses		19,481,354	20,654,280
Research and development expenses		533,807	529,139
Financial expenses		-753,987	-1,835,540
Including: Interest expenses		2,862,882	2,152,536
Interest income		4,368,355	3,670,286
Plus: Other profit		774,925	893,236
Investment profit (loss is listed with “-”)	17.5	149,080,018	328,290,041
Including: Investment profit for joint-run business and joint venture		54,934	-26,539
Financial assets measured at amortized cost cease to be recognized as income (loss is listed with “-”)
Net exposure hedge income (loss is listed with “-”)
Income from fair value changes (loss is listed with “-”)
Credit impairment loss (loss is listed with “-”)		-3,661
Asset impairment loss (loss is listed with “-”)
Income from asset disposal (loss is listed with “-”)		-639,633	30,882

Item	Note	Sum of this period	Sum of prior period
2. Operating profit (loss is listed with “-”)		161,864,613	331,658,602
Plus: Non-operating income		167,110	106,249
Minus: Non-operating expenses		914,209	325,220
3. Total profits (total loss is listed with “-”)		161,117,514	331,439,631
Minus: Income tax expenses		-405,243	2,624,240
4. Net profit (net loss is listed with “-”)		161,522,757	328,815,391
4.1 Net profit from continuing operation (net loss is listed with “-”)		161,522,757	328,815,391
4.2 Net profit from terminating operation (net loss is listed with “-”)
5. Net after-tax amount of other comprehensive income
5.1 Other comprehensive income not to be reclassified into profit and loss later
5.1.1 Changes after remeasuring and resetting the benefit plans
5.1.2 Other comprehensive income not to be reclassified into profit and loss under equity method
5.1.3 Changes in the fair value of other investments in equity instruments
5.1.4 Changes in the fair value of the enterprise’s own credit risk
5.1.5 Other
5.2 Other comprehensive income to be reclassified into profit and loss later
5.2.1 Other comprehensive income to be reclassified into profit and loss under equity method
5.2.2 Changes in the fair value of other debt investments
5.2.3 Amount of financial assets reclassified into other comprehensive income
5.2.4 Provision for credit impairment of other credit investments
5.2.5 Provision for cash-flow hedge
5.2.6 Difference in translation of Foreign Currency Financial Statement
5.2.7 Other
6. Total comprehensive income		161,522,757	328,815,391
7. Earnings per share:
7.1 Basic earnings per share		0.24	0.48
7.2 Diluted earnings per share		0.24	0.48
Legal Representative: Zhou Hongjiang Accounting Supervisor: Jiang Jianxun Accounting Department Manager: Guo Cuimei

2.5 Consolidated cash flow statement

Compiling unit: Yantai Changyu Pioneer Wine Co., Ltd. Unit: Yuan

Item	Note	Sum of this period	Sum of prior period
1. Cash flows from operating activities:
Cash received from sales of goods and rending of services		2,065,105,263	2,087,979,514

Item	Note	Sum of this period	Sum of prior period
Net increase in customer and interbank deposits
Net increase in borrowings from central bank
Net increase in borrowings from other financial institutions
Cash received from receiving insurance premium of original insurance contract
Net cash received from reinsurance business
Net increase in policy holder deposits and investment funds
Cash received from collecting interest, handling fees and commissions
Net increase in borrowing funds
Net increase in repurchasement business funds
Net cash received for buying and selling securities
Tax refund received		29,311,454	165,095,342
Other cash received related to operating activities	7.52	47,251,102	30,136,317
Subtotal of cash flows of operating activities		2,141,667,819	2,283,211,173
Cash paid for goods and services		622,088,864	636,965,411
Net increase in customer loans and advances
Net increase in deposits in central bank and interbank deposits
Cash paid to original insurance contract payments
Net increase in lending funds
Cash paid to interest, handling fees and commissions
Cash paid to policy bonus
Cash paid to and on behalf of employees		241,778,846	266,617,445
Cash paid for taxes and expenses		457,071,706	482,260,853
Other cash paid related to operating activities	7.52	292,808,617	291,093,869
Sub-total of cash outflows of operating activities		1,613,748,033	1,676,937,578
Net cash flow from operating activities		527,919,786	606,273,595
2. Cash flow from investing activities:
Cash received from disinvestment
Cash received from withdrawal of fixed deposits		6,000,000	86,000,000
Cash received from obtaining investment income
Cash received from obtaining interest income		167,919	474,434
Cash received from disposal of fixed assets, intangible assets and other long-term assets		1,431,000	24,186,808
Net cash received from disposal of branch and other business unit		7,238,585
Other cash received related to investing activities		657,049
Subtotal of cash flows of investment activities		15,494,553	110,661,242
Cash paid to acquire fixed assets, intangible assets and other long-term assets		60,515,887	106,892,064
Cash for investment		206,000,000	86,000,000
Cash paid for purchasing fixed deposits
Net increase in hypothecated loan
Net cash paid for acquiring branch and other business unit

Item	Note	Sum of this period	Sum of prior period
Other cash paid related to investment activities
Subtotal of cash outflows of investment activities		266,515,887	192,892,064
Net cash flow from investing activities		-251,021,334	-82,230,822
3. Cash flow from financing activities
Cash received from acquiring investment		13,900,832
Including: cash received from acquiring minority shareholders investment by branch
Cash received from acquiring loans		295,974,371	428,548,896
Other cash received related to financing activities
Subtotal cash flows of financing activities		309,875,203	428,548,896
Cash paid for paying debts		419,615,315	590,123,879
Cash paid for distributing dividend and profit or paying interest		319,861,482	15,360,912
Including: dividend and profit paid to minority shareholders by branch		70,317	1,793,435
Other cash paid related to financing activities		38,007,700	9,765,810
Subtotal of cash outflows of financing activities		777,484,497	615,250,601
Net cash flow from financing activities		-467,609,294	-186,701,705
4. Influences of exchange rate fluctuation on cash and cash equivalents		1,038,021	188,837
5. Net Increase in cash and cash equivalents		-189,672,821	337,529,905
Plus: balance at the beginning of the period of cash and cash equivalents		1,612,753,600	1,502,327,029
6. Balance at the end of the period of cash and cash equivalents		1,423,080,779	1,839,856,934

Legal Representative: Zhou Hongjiang Accounting Supervisor: Jiang Jianxun Accounting Department Manager: Guo Cuimei

2.6 Cash flow statement of the parent company

Compiling unit: Yantai Changyu Pioneer Wine Co., Ltd. Unit: Yuan

Item	Sum of this period	Sum of prior period
1. Cash flows from operating activities:
Cash received from sales of goods and rending of services	245,770,806	264,608,586
Tax refund received
Other cash received related to operating activities	10,820,471	53,941,562
Subtotal of cash flows of operating activities	256,591,277	318,550,148
Cash paid for goods and services	204,180,816	149,862,593
Cash paid to and on behalf of employees	22,218,740	28,951,681
Cash paid for taxes and expenses	43,953,062	22,087,575
Other cash paid related to operating activities	76,577,506	12,091,557
Sub-total of cash outflows of operating activities	346,930,124	212,993,406
Net cash flow from operating activities	-90,338,847	105,556,742
2. Cash flow from investing activities:
Cash received from disinvestment	27,690,000
Cash received from withdrawal of fixed deposits		86,000,000
Cash received from obtaining investment income	325,390,390	321,605,820.39
Cash received from obtaining interest income	167,919	474,433.61
Net cash received from disposal of fixed assets, intangible assets		31,808

Item	Sum of this period	Sum of prior period
and other long-term assets
Net cash received from disposal of branch and other business unit
Other cash received related to investing activities		302,000,000
Subtotal of cash flows of investment activities	353,248,309	710,112,062
Cash paid to acquiring fixed assets, intangible assets and other long-term assets	3,845,079	5,975,121
Cash for investment	20,161,100	110,000,000
Cash paid for purchasing fixed deposits	206,000,000	86,000,000
Net cash paid for acquiring branch and other business unit
Other cash paid related to investment activities	44,230,000	35,700,000
Subtotal of cash outflows of investment activities	274,236,179	237,675,121
Net cash flow from investing activities	79,012,130	472,436,941
3. Cash flow from financing activities:
Cash received from acquiring investment	13,900,832
Cash received from acquiring loans	100,000,000	100,000,000
Other cash received related to financing activities
Subtotal cash flows of financing activities	113,900,832	100,000,000
Cash paid for debts	100,000,000	150,000,000
Cash paid to distribute dividend, profit or pay interest	310,002,967	2,387,083
Other cash paid related to financing activities	4,567,148	4,517,699
Subtotal of cash outflows of financing activities	414,570,115	156,904,782
Net cash flow from financing activities	-300,669,283	-56,904,782
4. Influences of exchange rate fluctuation on cash and cash equivalents
5. Net Increase in cash and cash equivalents	-311,996,000	521,088,901
Plus: balance at the beginning of the period of cash and cash equivalents	843,369,997	513,809,440
6. Balance at the end of the period of cash and cash equivalents	531,373,997	1,034,898,341

Legal Representative: Zhou Hongjiang Accounting Supervisor: Jiang Jianxun Accounting Department Manager: Guo Cuimei

2.7 Consolidated owner’s equity changing list

Unit: Yuan

Item	This period
	Owners’ equity of the parent company													Minority shareholders’ equity	Total owners’ equity
	Capital stock	Other equity instruments			Capital reserves	Minus: Treasury stock	Other comprehensive income	Special reserves	Surplus reserves	General risk preparation	Undistributed profits	Other	Subtotal
		Preferred stock	Perpetual bonds	Other
1. Balance at the end of last year	685,464,000				524,968,760		-23,760,238		342,732,000		9,049,649,211		10,579,053,733	246,526,561	10,825,580,294
Plus: Accounting policies changing
Previous error correction
Business combination under common control
Other
2. Balance at the beginning of this year	685,464,000				524,968,760		-23,760,238		342,732,000		9,049,649,211		10,579,053,733	246,526,561	10,825,580,294
3. Increased or decreased amount in this period (reducing amount is listed with “-”)					-420,208		12,136,065				55,110,636		66,826,493	-85,798,650	-18,972,157
3.1 Total comprehensive income							12,136,065				363,569,436		375,705,501	-11,398,040	364,307,461
3.2 Owners’ invested and reduced capital					-420,208								-420,208	-74,006,755	-74,426,963
3.2.1 Owner’ invested common stock														-42,351,486	-42,351,486
3.2.2 Other equity instrument holders’ invested capital
3.2.3 Amount of shares paid and reckoned in owners’ equity					671,300								671,300		671,300
3.2.4 Other					-1,091,508								-1,091,508	-31,655,269	-32,746,777
3.3 Profit distribution											-308,458,800		-308,458,800	-393,855	-308,852,655
3.3.1 Accrued surplus reserves
3.3.2 Accrued general risk preparation
3.3.3 Distribution to owners (or shareholders)											-308,458,800		-308,458,800	-393,855	-308,852,655
3.3.4 Other

Item

This period

Owners’ equity of the parent company

Minority shareholders’ equity

Total owners’ equity

Capital stock

Other equity instruments

Capital reserves

Minus: Treasury stock

Other comprehensive income

Special reserves

Surplus reserves

General risk preparation

Undistributed profits

Other

Subtotal

Preferred stock

Perpetual bonds

Other

3.4 Internal transfer of owners’ equity

3.4.1 Capital reserves transferred and increased capital (or capital stock)

3.4.2 Surplus reserves transferred and increased capital (or capital stock)

3.4.3 Surplus reserves covering deficit

3.4.4 Retained earnings carried over from the benefit plan variation

3.4.5 Retained earnings carried over from other comprehensive income

3.4.6 Other

3.5 Special reserves

3.5.1 Withdrawal in this period

3.5.2 Usage in this period

3.6 Other

4. Balance at the end of this period

685,464,000

524,548,552

-11,624,173

342,732,000

9,104,759,847

10,645,880,226

160,727,911

10,806,608,137

Unit: Yuan

Item

Last period

Owners’ equity of the parent company

Minority shareholders’ equity

Total owners’ equity

Capital stock

Other equity instruments

Capital reserves

Minus: Treasury stock

Other comprehensive income

Special reserves

Surplus reserves

General risk preparation

Undistributed profits

Other

Subtotal

Preferred stock

Perpetual bonds

Other

1. Balance at the end of last year

685,464,000

524,968,760

-34,707,177

342,732,000

8,929,426,600

10,447,884,183

244,792,421

10,692,676,604

Plus: Accounting policies changing

Previous error correction

Business combination under common control

Other

2. Balance at the beginning of this year

685,464,000

524,968,760

-34,707,177

342,732,000

8,929,426,600

10,447,884,183

244,792,421

10,692,676,604

Item

Last period

Owners’ equity of the parent company

Minority shareholders’ equity

Total owners’ equity

Capital stock

Other equity instruments

Capital reserves

Minus: Treasury stock

Other comprehensive income

Special reserves

Surplus reserves

General risk preparation

Undistributed profits

Other

Subtotal

Preferred stock

Perpetual bonds

Other

3. Increased or decreased amount in this period (reducing amount is listed with “-”)

10,946,939

120,222,611

131,169,550

1,734,140

132,903,690

3.1 Total comprehensive income

10,946,939

428,681,411

439,628,350

4,002,909

443,631,259

3.2 Owners’ invested and reduced capital

3.2.1 Owner’ invested common stock

3.2.2 Other equity instrument holders’ invested capital

3.2.3 Amount of shares paid and reckoned in owners’ equity

3.2.4 Other

3.3 Profit distribution

-308,458,800

-308,458,800

-2,268,769

-310,727,569

3.3.1 Accrued surplus reserves

3.3.2 Accrued general risk preparation

3.3.3 Distribution to owners (or shareholders)

-308,458,800

-308,458,800

-2,268,769

-310,727,569

3.3.4 Other

3.4 Internal transfer of owners’ equity

3.4.1 Capital reserves transferred and increased capital (or capital stock)

3.4.2 Surplus reserves transferred and increased capital (or capital stock)

3.4.3 Surplus reserves covering deficit

3.4.4 Retained earnings carried over from the benefit plan amount

3.4.5 Retained earnings carried over from other comprehensive income

Item

Last period

Owners’ equity of the parent company

Minority shareholders’ equity

Total owners’ equity

Capital stock

Other equity instruments

Capital reserves

Minus: Treasury stock

Other comprehensive income

Special reserves

Surplus reserves

General risk preparation

Undistributed profits

Other

Subtotal

Preferred stock

Perpetual bonds

Other

3.4.6 Other

3.5 Special reserves

3.5.1 Withdrawal in this period

3.5.2 Usage in this period

3.6 Other

4. Balance at the end of this period

685,464,000

524,968,760

-23,760,238

342,732,000

9,049,649,211

10,579,053,733

246,526,561

10,825,580,294

2.8 Owner’s equity changing list of the parent company

Unit: Yuan

Item	This period
	Capital stock	Other equity instruments			Capital reserves	Minus: Treasury stock	Other comprehensive income	Special reserves	Surplus reserves	Undistributed profits	Other	Total owners’ equity
		Preferred stock	Perpetual bonds	Other
1. Balance at the end of last year	685,464,000				560,182,235				342,732,000	9,582,860,014		11,171,238,249
Plus: Accounting policies changing
Previous error correction
Other
2. Balance at the beginning of this year	685,464,000				560,182,235				342,732,000	9,582,860,014		11,171,238,249
3. Increased or decreased amount in this period (reducing amount is listed with “-”)					671,300					-146,936,043		-146,264,743
3.1 Total comprehensive income										161,522,757		161,522,757
3.2 Owners’ invested and reduced capital					671,300							671,300
3.2.1 Owners’ invested common stock
3.2.2 Other equity instrument holder’ invested capital
3.2.3 Amount of shares paid and					671,300							671,300

Item

This period

Capital stock

Other equity instruments

Capital reserves

Minus: Treasury stock

Other comprehensive income

Special reserves

Surplus reserves

Undistributed profits

Other

Total owners’ equity

Preferred stock

Perpetual bonds

Other

reckoned in owners’ equity

3.2.4 Other

3.3 Profit distribution

-308,458,800

-308,458,800

3.3.1 Drew surplus reserves

3.3.2 Distribution to owners (or shareholders)

-308,458,800

-308,458,800

3.3.3 Other

3.4 Internal transfer of owners’ equity

3.4.1 Capital reserves transferred and increased capital (or capital stock)

3.4.2 Surplus reserves transferred and increased capital (or capital stock)

3.4.3 Surplus reserves covering deficit

3.4.4 Retained earnings carried over from the benefit plan amount

3.4.5 Retained earnings carried over from other comprehensive income

3.4.6 Other

3.5 Special reserves

3.5.1 Accrual in this period

3.5.2 Usage in this period

3.6 Other

4. Balance at the end of this period

685,464,000

560,853,535

342,732,000

9,435,923,971

11,024,973,506

Unit: Yuan

Item

Last period

Capital stock

Other equity instruments

Capital reserves

Minus: Treasury stock

Other comprehensive income

Special reserves

Surplus reserves

Undistributed profits

Other

Total owners’ equity

Preferred stock

Perpetual bonds

Other

1. Balance at the end of last year

685,464,000

560,182,235

342,732,000

9,141,561,665

10,729,939,900

Plus: Accounting policies changing

Previous error correction

Other

2. Balance at the beginning of this year

685,464,000

560,182,235

342,732,000

9,141,561,665

10,729,939,900

3. Increased or decreased amount in this period (reducing amount is listed with “-”)

441,298,349

441,298,349

3.1 Total comprehensive income

749,757,149

749,757,149

3.2 Owners’ invested and reduced capital

3.2.1 Owners’ invested common stock

3.2.2 Other equity instrument holder’ invested capital

3.2.3 Amount of shares paid and reckoned in owners’ equity

3.2.4 Other

3.3 Profit distribution

-308,458,800

-308,458,800

3.3.1 Drew surplus reserves

3.3.2 Distribution to owners (or shareholders)

-308,458,800

-308,458,800

3.3.3 Other

3.4 Internal transfer of owners’ equity

3.4.1 Capital reserves transferred and increased capital (or capital stock)

3.4.2 Surplus reserves transferred and increased capital (or capital stock)

3.4.3 Surplus reserves covering deficit

3.4.4 Retained earnings carried over from

Item

Last period

Capital stock

Other equity instruments

Capital reserves

Minus: Treasury stock

Other comprehensive income

Special reserves

Surplus reserves

Undistributed profits

Other

Total owners’ equity

Preferred stock

Perpetual bonds

Other

the benefit plan amount

3.4.5 Retained earnings carried over from other comprehensive income

3.4.6 Other

3.5 Special reserves

3.5.1 Accrual in this period

3.5.2 Usage in this period

3.6 Other

4. Balance at the end of this period

685,464,000

560,182,235

342,732,000

9,582,860,014

11,171,238,249

3. Company profile

Yantai Changyu Pioneer Wine Co., Ltd. (the “Company” or the “Joint-stock Company”) wasincorporated as a joint-stock limited company in accordance with the Company Law of thePeople’s Republic of China (the “PRC”) in the merger and reorganization carried out byYantai Changyu Group Co., Ltd. (“Changyu Group”) with its assets and liabilities in relationto wine business. The Company and its subsidiary companies (hereinafter collectivelyreferred to as the “Group”) are engaged in the production and sale of wine, brandy andsparkling wine, planting and purchase of grapes, development of tourism resources, etc. Theregistered address of the Company is Yantai City, Shandong Province, and the office addressof the headquarters is 56 Dama Road, Zhifu District, Yantai City, Shandong Province.

As at June 30, 2023, the Company issued 685,464,000 shares accumulatively. Refer to Note

7.31 for details.

The parent company of the Group is Changyu Group incorporated in China, which wasultimately and actually controlled by four parties, including Yantai Guofeng InvestmentHolding Co., Ltd., ILLVA Saronno Holding Spa, International Finance Corporation and YantaiYuhua Investment & Development Co., Ltd.

The financial statement and the consolidated financial statement of the Company wereapproved by the Board of Directors on August 29, 2023.

The details of scope of the consolidated financial statement in this period can be seen in Note8 “Equity in other entities”.

4. Preparation basis of financial statement

4.1 Preparation basis

The Company prepares the financial statement on the basis of continuous operation.

4.2 Continuous operation

The Group has appraised the ability of continuous operation for 12 months from June 30,2023, and no issues or situations causing major doubts to this ability are found. Therefore, thisfinancial statement is prepared on the basis of the continuous operation assumption.

5. Main accounting policies and accounting estimates

5.1 Statement on compliance with ASBE

This financial statement fulfills the requirement of Accounting Standards for BusinessEnterprises (ASBE) issued by the Ministry of Finance and gives a true and integrated view ofthe consolidated financial status and the financial status as at June 30, 2023, as well as theconsolidated operating result, the operating result, the consolidated cash flow and the cashflow of the Company from January to June 2023.

In addition, the financial statement of the Company also complies with the related disclosurerequirements for statement and its notes stipulated by Preparation Rules for InformationDisclosure by Companies Offering Securities to the Public No. 15 – General Provisions onFinancial Reports (2014 Revision) by the China Securities Regulatory Commission(hereinafter referred to as the “CSRC”).

5.2 Accounting period

The accounting year is from January 1 to December 31 in Gregorian calendar.

5.3 Operating cycle

The operating cycle refers to the period from the enterprise purchases the assets used forprocessing to the cash or cash equivalent is realized. The operating cycle of the Company is12 months.

5.4 Recording currency

Since Renminbi (RMB) is the currency of the main economic environment in which theCompany and the domestic subsidiary companies thereof are situated, the Company and thesubsidiary companies thereof adopt RMB as the recording currency. The overseas subsidiarycompanies thereof determine EUR, CLP and AUD as the recording currency according to themain economic environment in which they are situated. The currency in this financialstatement prepared by the Group is RMB.

5.5 Accounting treatment method for business combination under common control andnon-common control

5.5.1 Business combination under common control

A business combination under common control is a business combination in which all of thecombining enterprises are ultimately controlled by the same party or same multiple partiesbefore and after the combination, and that control is not transitory. The assets and liabilitiesobtained by the combining party in the business combination shall be measured on the basisof the carrying amount in the ultimate controlling party's consolidated financial statement asat the combination date. Where there is a difference between the carrying amount of the netassets acquired and the carrying amount of the combination consideration paid (or the totalpar value of the shares issued), the stock premium in capital surplus shall be adjusted. If thestock premium in capital surplus is not sufficient to offset, the retained earnings shall beadjusted. The direct related expenses incurred for the business combination shall be includedin the current profit and loss when incurred. The combination date is the date on which thecombining party actually obtains control of the combined party.

5.5.2 Business combination under non-common control

A business combination under non-common control is a business combination in which all ofthe combining parties are not ultimately controlled by the same party or same multiple partiesbefore and after the combination. The sum of fair values of the assets paid by the Group, asthe acquirer, (including the acquiree’s equity the Group held before the acquisition date),

liabilities incurred or assumed, and the equity securities issued on the acquisition date inexchange for the control over the acquiree, deducts the fair value of the acquiree’s identifiablenet assets acquired in the combination on the acquisition date. If the difference is positive, itshall be recognized as goodwill; and if it is negative, it shall be included in the current profitand loss. All the identifiable assets, liabilities and contingent liabilities which are obtainedfrom the acquiree and meet the recognition conditions shall be confirmed by the Group on theacquisition date according to the fair value thereof. The acquisition date is the date on whichthe acquirer actually obtains control of the acquiree.

For a business combination involving entities not under common control and achieved instages, the Group remeasures its previously-held equity interest in the acquiree to itsacquisition-date fair value and recognises any resulting difference between the fair value andthe carrying amount as investment income or other comprehensive income for the currentperiod. In addition, any amount recognised in other comprehensive income that may bereclassified to profit or loss, in prior reporting periods relating to the previously-held equityinterest, and any other changes in the owners’ equity under equity accounting, are transferredto investment income in the period in which the acquisition occurs. If equity interests of theacquiree held before acquisition-date were equity instrument investments measured at fairvalue through other comprehensive income, other comprehensive income recognised shall bemoved to retained earnings on acquisition-date.

5.6 Compiling methods of consolidated financial statement

5.6.1 General principles

The scope of consolidated financial statements is based on control and the consolidatedfinancial statements comprise the Company and its subsidiaries. Control exists when theinvestor has all of following: power over the investee; exposure, or rights, to variable returnsfrom its involvement with the investee and has the ability to affect those returns through itspower over the investee. When assessing whether the Group has power, only substantiverights (held by the Group and other parties) are considered. The financial position, financialperformance and cash flows of subsidiaries are included in the consolidated financialstatements from the date that control commences until the date that control ceases.

Non-controlling interests are presented separately in the consolidated balance sheet withinshareholders’ equity. Net profit or loss attributable to non-controlling shareholders ispresented separately in the consolidated income statement below the net profit line item. Totalcomprehensive income attributable to non-controlling shareholders is presented separately inthe consolidated income statement below the total comprehensive income line item.

When the amount of loss for the current period attributable to the non-controllingshareholders of a subsidiary exceeds the non-controlling shareholders’ share of the openingowners’ equity of the subsidiary, the excess is still allocated against the non-controllinginterests.

When the accounting period or accounting policies of a subsidiary are different from those ofthe Company, the Company makes necessary adjustments to the financial statements of thesubsidiary based on the Company’s own accounting period or accounting policies. Intra-groupbalances and transactions, and any unrealised profit or loss arising from intra-group

transactions, are eliminated when preparing the consolidated financial statements. Unrealisedlosses resulting from intra-group transactions are eliminated in the same way as unrealisedgains, unless they represent impairment losses that are recognised in the financial statements.

5.6.2 Subsidiaries acquired through a business combination

Where a subsidiary was acquired during the reporting period, through a business combinationinvolving entities under common control, the financial statements of the subsidiary areincluded in the consolidated financial statements based on the carrying amounts of the assetsand liabilities of the subsidiary in the financial statements of the ultimate controlling party asif the combination had occurred at the date that the ultimate controlling party first obtainedcontrol. The opening balances and the comparative figures of the consolidated financialstatements are also restated.

Where a subsidiary was acquired during the reporting period, through a business combinationinvolving entities not under common control, the identifiable assets and liabilities of theacquired subsidiaries are included in the scope of consolidation from the date that controlcommences, based on the fair value of those identifiable assets and liabilities at theacquisition date.

5.6.3 Disposal of subsidiaries

When the Group loses control over a subsidiary, any resulting disposal gains or losses arerecognised as investment income for the current period. The remaining equity investment isre-measured at its fair value at the date when control is lost, any resulting gains or losses arealso recognised as investment income for the current period.

When the Group loses control of a subsidiary in multiple transactions in which it disposes ofits long-term equity investment in the subsidiary in stages, the following are considered todetermine whether the Group should account for the multiple transactions as a bundledtransaction:

- arrangements are entered into at the same time or in contemplation of each other;- arrangements work together to achieve an overall commercial effect;- the occurrence of one arrangement is dependent on the occurrence of at least one otherarrangement;- one arrangement considered on its own is not economically justified, but it iseconomically justified when considered together with other arrangements.

If each of the multiple transactions does not form part of a bundled transaction, thetransactions conducted before the loss of control of the subsidiary are accounted for inaccordance with the accounting policy for partial disposal of equity investment in subsidiarieswhere control is retained.

If each of the multiple transactions forms part of a bundled transaction which eventuallyresults in the loss of control in the subsidiary, these multiple transactions are accounted for asa single transaction. In the consolidated financial statements, the difference between theconsideration received and the corresponding proportion of the subsidiary’s net assets(calculated continuously from the acquisition date) in each transaction prior to the loss of

control shall be recognised in other comprehensive income and transferred to profit or losswhen the parent eventually loses control of the subsidiary.

5.6.4 Changes in non-controlling interests

Where the Company acquires a non-controlling interest from a subsidiary’s non-controllingshareholders or disposes of a portion of an interest in a subsidiary without a change in control,the difference between the proportion interests of the subsidiary’s net assets being acquired ordisposed and the amount of the consideration paid or received is adjusted to the capitalreserve (share premium) in the consolidated balance sheet, with any excess adjusted toretained earnings.

5.7 Determination standard of cash and cash equivalents

Cash and cash equivalents comprise cash on hand, demand deposit, and short-term highlyliquid investments which are readily convertible into known amount of cash with aninsignificant risk of changes in value.

5.8 Foreign currency transaction and foreign currency statement translationWhen the Group receives capital in foreign currencies from investors, the capital is translatedto Renminbi at the spot exchange rate at the date of the receipt. Other foreign currencytransactions are, on initial recognition, translated to Renminbi at the spot exchange rates.

Monetary items denominated in foreign currencies are translated to Renminbi at the spotexchange rate at the balance sheet date. The resulting exchange differences are generallyrecognised in profit or loss, unless they arise from the re-translation of the principal andinterest of specific borrowings for the acquisition and construction of qualifying assets.Non-monetary items that are measured at historical cost in foreign currencies are translated toRenminbi using the exchange rate at the transaction date.

In translating the financial statements of a foreign operation, assets and liabilities of foreignoperation are translated to Renminbi at the spot exchange rate at the balance sheet date.Equity items, excluding retained earnings and the translation differences in othercomprehensive income, are translated to Renminbi at the spot exchange rates at thetransaction dates. Income and expenses in the income statement are translated to Renminbi atthe spot exchange rates at the transaction dates. The resulting translation differences arerecognised in other comprehensive income. The translation differences accumulated in othercomprehensive income with respect to a foreign operation are transferred to profit or loss inthe period when the foreign operation is disposed.

5.9 Financial instruments

Financial instruments include cash at bank and on hand, investments in debt and equitysecurities other than those classified as long-term equity investments, receivables, payables,loans and borrowings and share capital.

5.9.1 Recognition and initial measurement of financial assets and financial liabilitiesA financial asset and financial liability is recognised in the balance sheet when the Group

becomes a party to the contractual provisions of a financial instrument.

A financial asset (unless it is a trade receivable without a significant financing component)and financial liability is measured initially at fair value. For financial assets and financialliabilities at fair value through profit or loss, any related directly attributable transaction costsare charged to profit or loss; for other categories of financial assets and financial liabilities,any related directly attributable transaction costs are included in their initial costs.Accounts receivable containing no significant financing component or not consideringfinancing component of contracts that do not exceed one year are measured initially attransaction prices determined by the accounting policies set out in Note 5.22.

5.9.2 Classification and subsequent measurement of financial assets(a) Classification of financial assets

The classification of financial assets is generally based on the business model in which afinancial asset is managed and its contractual cash flow characteristics. On initial recognition,a financial asset is classified as measured at amortised cost, at fair value through othercomprehensive income (“FVOCI”), or at fair value through profit or loss (“FVTPL”).

Financial assets are not reclassified subsequent to their initial recognition unless the Groupchanges its business model for managing financial assets in which case all affected financialassets are reclassified on the first day of the first reporting period following the change in thebusiness model.

A financial asset is measured at amortised cost if it meets both of the following conditions andis not designated as at FVTPL:

- it is held within a business model whose objective is to hold assets to collect contractualcash flows; and- its contractual terms give rise on specified dates to cash flows that are solely payments ofprincipal and interest on the principal amount outstanding.

A debt investment is measured at FVOCI if it meets both of the following conditions and isnot designated as at FVTPL:

- it is held within a business model whose objective is achieved by both collectingcontractual cash flows and selling financial assets; and- its contractual terms give rise on specified dates to cash flows that are solely payments ofprincipal and interest on the principal amount outstanding.

On initial recognition of an equity investment that is not held for trading, the Group mayirrevocably elect to present subsequent changes in the investment’s fair value in othercomprehensive income. This election is made on an investment-by-investment basis. Theinstrument meets the definition of equity from the perspective of the issuer.

All financial assets not classified as measured at amortised cost or FVOCI as described above

are measured at FVTPL. On initial recognition, the Group may irrevocably designate afinancial asset that otherwise meets the requirements to be measured at amortised cost or atFVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatchthat would otherwise arise.

The business model refers to how the Group manages its financial assets in order to generatecash flows. That is, the Group’s business model determines whether cash flows will resultfrom collecting contractual cash flows, selling financial assets or both. The Group determinesthe business model for managing the financial assets according to the facts and based on thespecific business objective for managing the financial assets determined by the Group’s keymanagement personnel.

In assessing whether the contractual cash flows are solely payments of principal and interest,the Group considers the contractual terms of the instrument. For the purposes of thisassessment, ‘principal’ is defined as the fair value of the financial asset on initial recognition.‘Interest’ is defined as consideration for the time value of money and for the credit riskassociated with the principal amount outstanding during a particular period of time and forother basic lending risks and costs, as well as a profit margin. The Group also assesseswhether the financial asset contains a contractual term that could change the timing or amountof contractual cash flows such that it would not meet this condition.

(b) Subsequent measurement of financial assets

- Financial assets at FVTPL

These financial assets are subsequently measured at fair value. Net gains and losses, includingany interest or dividend income, are recognised in profit or loss unless the financial assets arepart of a hedging relationship.

- Financial assets at amortised cost

These assets are subsequently measured at amortised cost using the effective interest method.A gain or loss on a financial asset that is measured at amortised cost and is not part of ahedging relationship shall be recognised in profit or loss when the financial asset isderecognized and reclassified, through the amortisation process or in order to recogniseimpairment gains or losses.

- Debt investments at FVOCI

These assets are subsequently measured at fair value. Interest income calculated using theeffective interest method, impairment and foreign exchange gains and losses are recognised inprofit or loss. Other net gains and losses are recognised in other comprehensive income. Onderecognition, gains and losses accumulated in other comprehensive income are reclassifiedto profit or loss.

- Equity investments at FVOCI

These assets are subsequently measured at fair value. Dividends are recognised as income inprofit or loss. Other net gains and losses are recognised in other comprehensive income. Onderecognition, gains and losses accumulated in other comprehensive income are reclassifiedto retained earnings.

5.9.3 Classification and subsequent measurement of financial liabilitiesFinancial liabilities are classified as measured at FVTPL or amortised cost by the Group.

- Financial liabilities at FVTPL

A financial liability is classified as at FVTPL if it is classified as held-for-trading (includingderivative financial liability) or it is designated as such on initial recognition.

Financial liabilities at FVTPL are subsequently measured at fair value and net gains andlosses, including any interest expense, are recognised in profit or loss, unless the financialliabilities are part of a hedging relationship.

- Financial liabilities at amortised cost

These financial liabilities are subsequently measured at amortised cost using the effectiveinterest method.

5.9.4 Offsetting

Financial assets and financial liabilities are generally presented separately in the balance sheet,and are not offset. However, a financial asset and a financial liability are offset and the netamount is presented in the balance sheet when both of the following conditions are satisfied:

- The Group currently has a legally enforceable right to set off the recognised amounts；- The Group intends either to settle on a net basis, or to realise the financial asset and settlethe financial liability simultaneously.

5.9.5 Derecognition of financial assets and financial liabilities

Financial asset is derecognised when one of the following conditions is met:

- the Group’s contractual rights to the cash flows from the financial asset expire;- the financial asset has been transferred and the Group transfers substantially all of therisks and rewards of ownership of the financial asset; or；- the financial asset has been transferred, although the Group neither transfers nor retainssubstantially all of the risks and rewards of ownership of the financial asset, it does not retaincontrol over the transferred asset.

Where a transfer of a financial asset in its entirety meets the criteria for derecognition, thedifference between the two amounts below is recognised in profit or loss:

- the carrying amount of the financial asset transferred measured at the date of

derecognition;- the sum of the consideration received from the transfer and, when the transferredfinancial asset is a debt investment at FVOCI, any cumulative gain or loss that has beenrecognised directly in other comprehensive income for the part derecognised.

The Group derecognises a financial liability (or part of it) only when its contractual obligation (or partof it) is extinguished.

5.9.6 Impairment

The Group recognises loss allowances for expected credit loss (ECL) on:

- financial assets measured at amortised cost;- financial investments at fair value through other comprehensive income

Financial assets measured at fair value, including debt investments or equity securities atFVPL, equity securities designated at FVOCI and derivative financial assets, are not subjectto the ECL assessment.

Measurement of ECLs

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as thepresent value of all cash shortfalls (i.e. the difference between the cash flows due to the entityin accordance with the contract and the cash flows that the Group expects to receive).

The maximum period considered when estimating ECLs is the maximum contractual period(including extension options) over which the Group is exposed to credit risk.

Lifetime ECLs are the ECLs that result from all possible default events over the expected lifeof a financial instrument.

12-month ECLs are the portion of ECLs that result from default events that are possiblewithin the 12 months after the balance sheet date (or a shorter period if the expected life of theinstrument is less than 12 months).

For accounts receivable, loss allowance always measured at an amount equal to lifetime ECLs.ECLs on these financial assets are estimated using a provision matrix based on the Group’shistorical credit loss experience, adjusted for factors that are specific to the debtors and anassessment of both the current and forecast general economic conditions at the balance sheetdate.

For assets other than accounts receivable that meet one of the following conditions, lossallowance are measured at an amount equal to 12-month ECLs. For all other financialinstruments, the Group recognises a loss allowance equal to lifetime ECLs:

- If the financial instrument is determined to have low credit risk at the balance sheet date;- If the credit risk on a financial instrument has not increased significantly since initial

recognition.

Financial instruments that have low credit risk

The credit risk on a financial instrument is considered low if the financial instrument has alow risk of default, the borrower has a strong capacity to meet its contractual cash flowobligations in the near term and adverse changes in economic and business conditions in thelonger term may, but will not necessarily, reduce the ability of the borrower to fulfil itscontractual cash flow obligations.

Significant increases in credit risk

In assessing whether the credit risk of a financial instrument has increased significantly sinceinitial recognition, the Group compares the risk of default occurring on the financialinstrument assessed at the balance sheet date with that assessed at the date of initialrecognition.

When determining whether the credit risk of a financial asset has increased significantly sinceinitial recognition and when estimating ECL, the Group considers reasonable and supportableinformation that is relevant and available without undue cost or effort, includingforward-looking information. In particular, the following information is taken into account:

- failure to make payments of principal or interest on their contractually due dates;- an actual or expected significant deterioration in a financial instrument’s external orinternal credit rating (if available);- an actual or expected significant deterioration in the operating results of the debtor; and- existing or forecast changes in the technological, market, economic or legal environmentthat have a significant adverse effect on the debtor’s ability to meet its obligation to theGroup.

Depending on the nature of the financial instruments, the assessment of a significant increasein credit risk is performed on either an individual basis or a collective basis. When theassessment is performed on a collective basis, the financial instruments are grouped based onshared credit risk characteristics, such as past due status and credit risk ratings.

The Group assumes that the credit risk on a financial asset has increased significantly if it ismore than 30 days past due.

Credit-impaired financial assets

At each balance sheet date, the Group assesses whether financial assets carried at amortisedcost and debt investments at FVOCI are credit-impaired. A financial asset is ‘credit-impaired’when one or more events that have a detrimental impact on the estimated future cash flows ofthe financial asset have occurred. Evidence that a financial asset is credit-impaired includesthe following observable data:

- significant financial difficulty of the borrower or issuer;- a breach of contract, such as a default or delinquency in interest or principal payments;- for economic or contractual reasons relating to the borrower’s financial difficulty, theGroup having granted to the borrower a concession that would not otherwise consider;- it is probable that the borrower will enter bankruptcy or other financial reorganisation; or- the disappearance of an active market for that financial asset because of financialdifficulties.

Presentation of allowance for ECL

ECLs are remeasured at each balance sheet date to reflect changes in the financialinstrument’s credit risk since initial recognition. Any change in the ECL amount is recognisedas an impairment gain or loss in profit or loss. The Group recognises an impairment gain orloss for all financial instruments with a corresponding adjustment to their carrying amountthrough a loss allowance account, except for debt investments that are measured at FVOCI,for which the loss allowance is recognised in other comprehensive income.

Write-off

The gross carrying amount of a financial asset is written off (either partially or in full) to theextent that there is no realistic prospect of recovery. A write-off constitutes a derecognitionevent. This is generally the case when the Group determines that the debtor does not haveassets or sources of income that could generate sufficient cash flows to repay the amountssubject to the write-off. However, financial assets that are written off could still be subject toenforcement activities in order to comply with the Group’s procedures for recovery ofamounts due.

Subsequent recoveries of an asset that was previously written off are recognised as a reversalof impairment in profit or loss in the period in which the recovery occurs.

5.9.7 Equity instrument

The consideration received from the issuance of equity instruments net of transaction costs isrecognised in shareholders’ equity. Consideration and transaction costs paid by the Companyfor repurchasing self-issued equity instruments are deducted from shareholders’ equity.

When the Company repurchases its own shares, those shares are treated as treasury shares. Allexpenditure relating to the repurchase is recorded in the cost of the treasury shares, with thetransaction recording in the share register. Treasury shares are excluded from profitdistributions and are presented as a deduction under shareholders’ equity in the balance sheet.

5.10 Inventories

5.10.1 Classification and cost

Inventories include raw materials, work in progress and reusable materials. Inventories areinitially measured at cost. Cost of inventories comprises all costs of purchase, costs ofconversion and other expenditure incurred in bringing the inventories to their present location

and condition. In addition to the purchase cost of raw materials, work in progress and finishedgoods include direct labour costs and an appropriate allocation of production overheads.

Agricultural products harvested are reported in accordance with the Accounting Standard forBusiness Enterprises No. 1 - Inventories.

5.10.2 Measurement method of cost of inventories

Cost of inventories is calculated using the weighted average method.

Consumables including low-value consumables and packaging materials are amortised whenthey are used. The amortisation charge is included in the cost of the related assets orrecognised in profit or loss for the current period.

5.10.3 Basis for determining the net realisable value and method for provision forobsolete inventoriesAt the balance sheet date, inventories are carried at the lower of cost and net realisable value.

Net realisable value is the estimated selling price in the ordinary course of business less theestimated costs of completion and the estimated costs necessary to make the sale and relevanttaxes. The net realisable value of materials held for use in the production is measured basedon the net realisable value of the finished goods in which they will be incorporated. The netrealisable value of the inventory held to satisfy sales or service contracts is measured based onthe contract price, to the extent of the quantities specified in sales contracts, and the excessportion of inventories is measured based on general selling prices.

Any excess of the cost over the net realisable value of each item of inventories is recognisedas a provision for impairment, and is recognised in profit or loss.

5.10.4 Inventory count system

The Group maintains a perpetual inventory system.

5.11 Long-term equity investments

5.11.1 Investment cost of long-term equity investments

(a) Long-term equity investments acquired through a business combination

- The initial cost of a long-term equity investment acquired through a business combinationinvolving entities under common control is the Company’s share of the carrying amount ofthe subsidiary’s equity in the consolidated financial statements of the ultimate controllingparty at the combination date. The difference between the initial investment cost and thecarrying amount of the consideration given is adjusted to the share premium in the capitalreserve, with any excess adjusted to retained earnings. For a long-term equity investment in asubsidiary acquired through a business combination achieved in stages which do not form abundled transaction and involving entities under common control, the Company determines

the initial cost of the investment in accordance with the above policies. The differencebetween this initial cost and the sum of the carrying amount of previously-held investmentand the consideration paid for the shares newly acquired is adjusted to capital premium in thecapital reserve, with any excess adjusted to retained earnings.- For a long-term equity investment obtained through a business combination not involvingenterprises under common control, the initial cost comprises the aggregate of the fair value ofassets transferred, liabilities incurred or assumed, and equity securities issued by the Company,in exchange for control of the acquiree. For a long-term equity investment obtained through abusiness combination not involving entities under common control and achieved throughmultiple transactions in stages which do not form a bundled transaction, the initial costcomprises the carrying amount of the previously-held equity investment in the acquireeimmediately before the acquisition date, and the additional investment cost at the acquisitiondate.

(b) Long-term equity investments acquired other than through a business combination

- A long-term equity investment acquired other than through a business combination isinitially recognised at the amount of cash paid if the Group acquires the investment by cash,or at the fair value of the equity securities issued if an investment is acquired by issuingequity securities.

5.11.2 Subsequent measurement of long-term equity investment

(a) Investments in subsidiaries

In the Company’s separate financial statements, long-term equity investments in subsidiariesare accounted for using the cost method unless the investment is classified as held for sale.Except for cash dividends or profit distributions declared but not yet distributed that havebeen included in the price or consideration paid in obtaining the investments, the Companyrecognises its share of the cash dividends or profit distributions declared by the investee asinvestment income for the current period.

The investments in subsidiaries are stated in the balance sheet at cost less accumulatedimpairment losses.

For the impairment of the investments in subsidiaries, refer to Note 5.20.

In the Group’s consolidated financial statements, subsidiaries are accounted for in accordancewith the policies described in Note 5.6.

(b) Investments in joint ventures and associates

A joint venture is an arrangement whereby the Group and other parties have joint control andrights to the net assets of the arrangement.

An associate is an enterprise the Group can exert significant influence on.

A long-term equity investment in a joint venture and associate is accounted for using theequity method for subsequent measurement, unless the investment is classified as held forsale.

The accounting treatments under the equity method adopted by the Group are as follows:

- Where the initial cost of a long-term equity investment exceeds the Group’s interest in thefair value of the investee’s identifiable net assets at the date of acquisition, the investment isinitially recognised at cost. Where the initial investment cost is less than the Group’s interestin the fair value of the investee’s identifiable net assets at the date of acquisition, theinvestment is initially recognised at the investor’s share of the fair value of the investee’sidentifiable net assets, and the difference is recognised in profit or loss.

- After the acquisition of the investment in joint ventures and associates, the Grouprecognises its share of the investee’s profit or loss and other comprehensive income asinvestment income or losses and other comprehensive income respectively, and adjusts thecarrying amount of the investment accordingly. Once the investee declares any cash dividendsor profit distributions, the carrying amount of the investment is reduced by the amountattributable to the Group. Changes in the Group’s share of the investee’s owners’ equity, otherthan those arising from the investee’s net profit or loss, other comprehensive income or profitdistribution (referred to as “other changes in owners’ equity”), is recognised directly in theGroup’s equity, and the carrying amount of the investment is adjusted accordingly.

- In calculating its share of the investee’s net profits or losses, other comprehensive incomeand other changes in owners’ equity, the Group recognises investment income and othercomprehensive income after making appropriate adjustments to align the accounting policiesor accounting periods with those of the Group based on the fair value of the investee’sidentifiable net assets at the date of acquisition. Unrealised profits and losses resulting fromtransactions between the Group and its associates or joint ventures are eliminated to the extentof the Group’s interest in the associates or joint ventures. Unrealised losses resulting fromtransactions between the Group and its associates or joint ventures are eliminated in the sameway as unrealised gains but only to the extent that there is no impairment.

- The Group discontinues recognising its share of further losses of the investee after thecarrying amount of the long-term equity investment and any long-term interest that insubstance forms part of the Group’s net investment in the associate is reduced to zero, exceptto the extent that the Group has an obligation to assume additional losses. If the joint ventureor the associate subsequently reports net profits, the Group resumes recognising its share ofthose profits only after its share of the profits equals the share of losses not recognised.

For the impairment of the investments in joint ventures and associates, refer to Note 5.20.

5.11.3 Criteria for determining the existence of joint control and significant impact overan investeeJoint control is the contractually agreed sharing of control of an arrangement, which existsonly when decisions about the relevant activities (activities with significant impact on thereturns of the arrangement) require the unanimous consent of the parties sharing control.

The following factors are usually considered when assessing whether the Group can exercisejoint control over an investee:

- Whether no single participant party is in a position to control the investee’s relatedactivities unilaterally;- Whether strategic decisions relating to the investee’s related activities require theunanimous consent of all participant parties that sharing of control.

Significant influence is the power to participate in the financial and operating policy decisionsof an investee but does not have control or joint control over those policies.

5.12 Investment properties

Investment properties are properties held either to earn rental income or for capitalappreciation or for both. Investment properties are accounted for using the cost model andstated in the balance sheet at cost less accumulated depreciation, amortisation and impairmentlosses, and adopts a depreciation or amortisation policy for the investment property which isconsistent with that for buildings or land use rights, unless the investment property isclassified as held for sale. For the impairment of the investment properties, refer to Note 5.20.

Category	Estimated useful life (years)	Residual value rate (%)	Annual depreciation rate (%)
Plant and buildings	20-40 years	0 - 5%	2.4%-5.0%

5.13 Fixed assets

5.13.1 Recognition of fixed assets

Fixed assets represent the tangible assets held by the Group for use in production of goods,supply of services, for rental or for administrative purposes with useful lives over oneaccounting year.

The cost of a purchased fixed asset comprises the purchase price, related taxes, and anydirectly attributable expenditure for bringing the asset to working condition for its intendeduse. The cost of self-constructed assets is measured in accordance with the policy set out inNote 5.14.

Where the parts of an item of fixed assets have different useful lives or provide benefits to theGroup in a different pattern, thus necessitating use of different depreciation rates or methods,each part is recognised as a separate fixed asset.

Any subsequent costs including the cost of replacing part of an item of fixed assets arerecognised as assets when it is probable that the economic benefits associated with the costswill flow to the Group, and the carrying amount of the replaced part is derecognised. Thecosts of the day-to-day maintenance of fixed assets are recognised in profit or loss as incurred.

Fixed assets are stated in the balance sheet at cost less accumulated depreciation andimpairment losses.

5.13.2 Depreciation of fixed assets

The cost of a fixed asset, less its estimated residual value and accumulated impairment losses,is depreciated using the straight-line method over its estimated useful life, unless the fixedasset is classified as held for sale.

The estimated useful lives, residual value rates and annual depreciation rates of each class offixed assets are as follows:

Class	Estimated useful life (years)	Residual value rate (%)	Annual depreciation rate (%)
Plant and buildings	20-40 years	0 - 5%	2.4%-5.0%
Machinery equipment	5-30 years	0 - 5%	3.2%-20.0%
Motor vehicles	4-12 years	0 - 5%	7.9%-25.0%

Useful lives, estimated residual values and depreciation methods are reviewed at least at eachyear-end.

5.13.3 For the impairment of the fixed assets, refer to Note 5.20.

5.13.4 Disposal of fixed assets

The carrying amount of a fixed asset is derecognised:

- when the fixed asset is holding for disposal; or- when no future economic benefit is expected to be generated from its use or disposal.

Gains or losses arising from the retirement or disposal of an item of fixed asset are determinedas the difference between the net disposal proceeds and the carrying amount of the item, andare recognised in profit or loss on the date of retirement or disposal.

5.14 Construction in progress

The cost of self-constructed assets includes the cost of materials, direct labour, capitalisedborrowing costs, and any other costs directly attributable to bringing the asset to workingcondition for its intended use.

A self-constructed asset is classified as construction in progress and transferred to fixed assetwhen it is ready for its intended use. No depreciation is provided against construction inprogress.

Construction in progress is stated in the balance sheet at cost less accumulated impairmentlosses (see Note 5.20).

If an enterprise sells products or by-products produced by fixed assets before they reach theirintended usable state to the outside parties, in accordance with the provisions of AccountingStandards for Business Enterprises No. 14 – Revenue and Accounting Standards for BusinessEnterprises No. 1 – Inventories, relevant income and costs shall be accounted for separatelyand included in profit or loss for the current period

5.15 Borrowing costs

Borrowing costs incurred directly attributable to the acquisition, and construction orproduction of a qualifying asset are capitalised as part of the cost of the asset. Otherborrowing costs are recognised as financial expenses when incurred.

During the capitalisation period, the amount of interest (including amortisation of anydiscount or premium on borrowing) to be capitalised in each accounting period is determinedas follows:

- Where funds are borrowed specifically for the acquisition and construction or productionof a qualifying asset, the amount of interest to be capitalised is the interest expense calculatedusing effective interest rates during the period less any interest income earned from depositingthe borrowed funds or any investment income on the temporary investment of those fundsbefore being used on the asset.

- To the extent that the Group borrows funds generally and uses them for the acquisitionand construction or production of a qualifying asset, the amount of borrowing costs eligiblefor capitalisation is determined by applying a capitalisation rate to the weighted average of theexcess amounts of cumulative expenditure on the asset over the above amounts of specificborrowings. The capitalisation rate is the weighted average of the interest rates applicable tothe general-purpose borrowings.

The effective interest rate is determined as the rate that exactly discounts estimated futurecash flow through the expected life of the borrowing or, when appropriate, a shorter period tothe initially recognised amount of the borrowings.

During the capitalisation period, exchange differences related to the principal and interest on aspecific-purpose borrowing denominated in foreign currency are capitalised as part of the costof the qualifying asset. The exchange differences related to the principal and interest onforeign currency borrowings other than a specific-purpose borrowing are recognised as afinancial expense when incurred.

The capitalisation period is the period from the date of commencement of capitalisation ofborrowing costs to the date of cessation of capitalisation, excluding any period over whichcapitalisation is suspended. Capitalisation of borrowing costs commences when expenditurefor the asset is being incurred, borrowing costs are being incurred and activities of acquisition,construction or production that are necessary to prepare the asset for its intended use are inprogress, and ceases when the assets become ready for their intended use. Capitalisation ofborrowing costs should cease when the qualifying asset being constructed or produced hasreached its expected usable or saleable condition. Capitalisation of borrowing costs is

suspended when the acquisition, construction or production activities are interruptedabnormally for a period of more than three months.

5.16 Biological assets

The biological assets of the Group are productive biological assets.

Productive biological assets are those that are held for the purposes of producing agriculturalproduce, rendering of services or rental. Productive biological assets in the Group are vines.Productive biological assets are initially measured at cost. The cost of self-grown or self-bredproductive biological assets represents the necessary directly attributable expenditure incurredbefore satisfying the expected production and operating purpose, including capitalisedborrowing costs.Productive biological assets, after reaching the expected production and operating purpose,are depreciated using the straight-line method over its estimated useful life. The estimateduseful lives, estimated net residual value rates and annual depreciation rates of productivebiological assets are as follows:

Category	Useful life (years)	Estimated net residual rate (%)	Annual depreciation rate (%)
Vines	20 years	0%	5.0%

The Group evaluates the useful life and expected net salvage value by considering the normalproducing life of the productive biological assets.

Useful lives, estimated residual values and depreciation methods of productive biologicalassets are reviewed at least at each year-end. Any changes should be treated as changes inaccounting estimates.

For a productive biological asset that has been sold, damaged, dead or destroyed, anydifference between the disposal proceeds and the carrying amount of the asset (after taxdeduction) should be recognised in profit or loss for the period in which it arises.

5.17 Intangible assets

Intangible assets are stated in the balance sheet at cost less accumulated amortization (wherethe estimated useful life is finite) and impairment losses (see Note 5.20). For an intangibleasset with finite useful life, its cost estimated less residual value and accumulated impairmentlosses is amortised on the straight-line method over its estimated useful life, unless theintangible asset is classified as held for sale.

The respective amortisation periods for intangible assets are as follows:

Item	Amortisation period (years)
Land use rights	40-50 years
Software licenses	5-10 years
Trademark	10 years

An intangible asset is regarded as having an indefinite useful life and is not amortised whenthere is no foreseeable limit to the period over which the asset is expected to generateeconomic benefits for the Group. At the balance sheet date, the Group had intangible assetswith infinite useful lives including the land use rights and trademarks. Land use rights withinfinite useful lives are permanent land use rights with permanent ownership held by theGroup under the relevant Chile and Australian laws arising from the Group’s acquisition ofVi?a Indómita, S.A., Vi?a Dos Andes, S.A., and Bodegas Santa Alicia SpA. (collectivelyreferred to as the “Chile Indomita Wine Group”), and the acquisition of Kilikanoon Estate PtyLtd (hereinafter referred to as the “Australia Kilikanoon Estate”), therefore there was noamortisation. The right to use trademark refers to the trademark held by the Group arisingfrom the acquisition of the Chile Indomita Wine Group and the Australia Kilikanoon Estatewith infinite useful lives. The valuation of trademark was based on the trends in the marketand competitive environment, product cycle, and managing long-term development strategy.Those bases indicated the trademark will provide net cash flows to the Group within anuncertain period. The useful life is indefinite as it was hard to predict the period that thetrademark would bring economic benefits to the Group.

5.18 Goodwill

The initial cost of goodwill represents the excess of cost of acquisition over the acquirer’sinterest in the fair value of the identifiable net assets of the acquiree under a businesscombination not involving entities under common control.

Goodwill is not amortised and is stated in the balance sheet at cost less accumulatedimpairment losses (see Note 5.20). On disposal of an asset group or a set of asset groups, anyattributable goodwill is written off and included in the calculation of the profit or loss ondisposal.

5.19 Long-term deferred expenses

Long-term deferred expenses are amortised using a straight-line method within the benefitperiod. The respective amortisation periods for such expenses are as follows:

Item	Amortisation period
Land requisition fee	50 years
Land lease fee	50 years
Greening fee	5-20 years
Renovation fee	3-5 years
Others	3 years

5.20 Impairment of assets other than inventories and financial assetsThe carrying amounts of the following assets are reviewed at each balance sheet date based oninternal and external sources of information to determine whether there is any indication ofimpairment:

- fixed assets

- construction in progress- right-of-use assets- intangible assets- productive biological asset- investment properties measured using a cost model- long-term equity investments- goodwill- long-term deferred expenses, etc.

If any indication exists, the recoverable amount of the asset is estimated. In addition, theGroup estimates the recoverable amounts of goodwill and intangible assets with infiniteuseful lives at each year-end, irrespective of whether there is any indication of impairment.Goodwill is allocated to each asset group, or set of asset groups, that is expected to benefitfrom the synergies of the combination for the purpose of impairment testing.

The recoverable amount of an asset (or asset group, set of asset groups) is the higher of its fairvalue (see Note 5.21) less costs to sell and its present value of expected future cash flows.

An asset group is composed of assets directly related to cash-generation and is the smallestidentifiable group of assets that generates cash inflows that are largely independent of thecash inflows from other assets or asset groups.

The present value of expected future cash flows of an asset is determined by discounting thefuture cash flows, estimated to be derived from continuing use of the asset and from itsultimate disposal, to their present value using an appropriate pre-tax discount rate.

An impairment loss is recognised in profit or loss when the recoverable amount of an asset isless than its carrying amount. A provision for impairment of the asset is recognisedaccordingly. Impairment losses related to an asset group or a set of asset groups are allocatedfirst to reduce the carrying amount of any goodwill allocated to the asset group or set of assetgroups, and then to reduce the carrying amount of the other assets in the asset group or set ofasset groups on a pro rata basis. However, such allocation would not reduce the carryingamount of an asset below the highest of its fair value less costs to sell (if measurable), itspresent value of expected future cash flows (if determinable) and zero.

Once an impairment loss is recognised, it is not reversed in a subsequent period.

5.21 Fair value measurement

Unless otherwise specified, the Group measures fair value as follows:

Fair value is the price that would be received to sell an asset or paid to transfer a liability in anorderly transaction between market participants at the measurement date.

When measuring fair value, the Group takes into account the characteristics of the particularasset or liability (including the condition and location of the asset and restrictions, if any, onthe sale or use of the asset) that market participants would consider when pricing the asset or

liability at the measurement date, and uses valuation techniques that are appropriate in thecircumstances and for which sufficient data and other information are available to measurefair value. Valuation techniques mainly include the market approach, the income approachand the cost approach.

5.22 Revenue

Revenue refers to the gross inflow of economic benefits formed during the course of theordinary activities of the Group, which may increase the shareholders’ equities and isirrelevant to the invested capital of the shareholders.

The Group recognizes the revenue upon fulfillment of its performance obligations in thecontract, that is, the client obtains control right over the relevant goods or services.

If there are two or more performance obligations under the contact, which shall be fulfilled,the Group will apportion the transaction price to various individual performance obligationsin accordance with the relative proportion of separate selling prices of various goods orservices under these performance obligations on the commencement date of the contract, andmeasure and recognize the revenue in accordance with the transaction prices apportioned tovarious individual performance obligations. The stand-alone selling price refers to the price atwhich the Group sells goods or provides services to customers separately. If the stand-aloneselling price cannot be directly observed, the Group comprehensively considers all therelevant information that can be reasonably obtained, and uses observable input values to thegreatest extent to estimate the stand-alone selling price.

For contracts with quality assurance clauses, the Group analyzes the nature of the qualityassurance provided. If quality assurance provides a separate service in addition to ensuring tothe client that the goods sold meet the established standards, the Group will treat it as anindividual performance obligation. Otherwise, the Group conducts accounting treatment inaccordance with the Accounting Standards for Business Enterprises No. 13 - Contingencies.

The transaction price refers to the amount of consideration that the Group expects to beentitled to receive due to the transfer of goods or services to the client, excluding paymentsreceived on behalf of third parties. The transaction price recognized by the Group does notexceed the amount at which the accumulated recognized revenue will most likely not undergoa significant reversal when the relevant uncertainty is eliminated. In the event that there is asignificant financing part in the contract, the Group determines the transaction price based onthe amount payable in cash when the client obtains control right over the relevant goods orservices. The difference between the transaction price and the contract consideration shall beamortized by the effective interest method during the contract period. From the day of theenforcement of the contract, the Group expects that the interval between the client'sacquisition of control right over the goods or services and the client’s payment of the pricewill not exceed one year, regardless of the significant financing part in the contract.

If the Group meets one of the following conditions, the fulfillment of its performanceobligations in a certain period will be deemed, or the fulfillment of its performanceobligations at a certain time point will be deemed:

- The client obtains and consumes the economic benefits while the Group fulfills theperformance obligation;- The client manages to control the goods in process while the Group fulfills theperformance obligation.- Goods produced during the performance period have irreplaceable purposes and theGroup is entitled to charge money for the performance accumulated and has been finisheduntil the current time within the whole contract period.

For any performance obligations fulfilled in a certain period, the Group will recognizerevenue within the certain period in accordance with the performance progress. If theperformance progress cannot be determined reasonably and costs incurred are expected to becompensated of the Group, the revenue will be ascertained according to the costs incurreduntil the performance progress is determined reasonably.

In terms of performance obligations fulfilled at a certain time point, the Group will recognizerevenue when the client gains control right over the relevant goods or services. When it comesto determining whether a client has acquired the control right over goods or services, theGroup will consider the following conditions:

- The Group has the current right to receive payment for the goods or services;- The Group has transferred the goods in kind to the client;- The Group has transferred the legal ownership of the product or the main risks andrewards of ownership to the client;- The client has accepted the goods or services, etc.

For sales with sales return clauses, when the customer obtains control of the relevant goods,the Group recognizes revenue based on the amount of consideration expected to be entitled toreceive due to the transfer of goods to the customer (that is, does not include the expectedamount to be refunded due to sales return), and recognizes liabilities based on the expectedamount to be refunded due to sales returns. At the same time, based on the book value at thetime of transfer of the goods expected to be returned, the Group recognizes as an asset thebalance after deducting the estimated cost of recovering the goods (including the valueimpairment of the returned goods). Based on the book value of the transferred goods at thetime of transfer, the Group carries over as the cost the net amount after deducting the aboveasset cost. On each balance sheet date, the Group re-estimates the future sales returns. If thereis any change, it shall be treated as a change in accounting estimates.

The Group has transferred the goods or services to the client and thus has the right to receivecorresponding consideration (and the right is dependable on factors other than time lapses) ascontract asset, which is subject to provision of impairment on the basis of expected credit loss.The right enjoyed by the Group (only depends on time lapses) to receive considerationunconditionally from the client shall be presented under account receivables. The Grouppresents the obligation of transferring goods or services for the client due to the considerationreceived or receivable as contract liabilities.

The specific accounting policies related to the main activities of the Group’s revenue aredescribed as follows:

The Group’s sales revenue mainly comes from dealer sales. The revenue will be recognizedwhen the Group transfers control of the related products to the customer. According to thebusiness contract, for these transfers, the time when the product is confirmed and signed bythe customer shall be recognized as the confirming point of the sales revenue.

5.23 Contract cost

Contract cost includes incremental cost for being awarded the contract and performance costof the contract.

Incremental cost for being awarded the contract refers to the cost that the Group would notneed to pay if no such contracts are awarded (e.g. sales commissions, etc.). Where such cost isexpected to be recovered, the Group shall take it as the contract acquisition cost and recognizeit as an asset. Expenses incurred by the Group to be awarded contracts other than incrementalcost expected to be recovered shall be recognized in current profits and losses when incurred.

Any cost incurred by the Group for the performance of any contract that doesn't fall into thescope of other businesses specified in the Standard such as inventory, but meets the followingconditions simultaneously, shall be taken as contract performance cost and recognized as anasset.

– Where such cost is directly related to a current or anticipated contract, including directlabor cost, direct material cost, manufacturing expenses (or similar expenses), costs clearlyspecified to be borne by the customer and other costs incurred solely due to the contract;– Where such cost includes resources to be used by the Group to fulfill future performanceobligations;– Where such cost is expected to be recovered.

Assets recognized for contract acquisition cost and assets recognized for contract performancecost (hereinafter referred to as “assets related to contract cost”) shall be amortized on the samebasis as the revenue recognition of goods or services related to such assets and recognized incurrent profits and losses. Where the amortization period of assets recognized for the contractacquisition cost does not exceed one year, they shall be recognized in current profits andlosses.

Where the book value of assets related to contract costs is higher than the difference betweenthe following two items, the Group shall withdraw the impairment reserves of the excess partand recognize it as the asset impairment loss:

– Residual consideration expected to be obtained arising from the transfer of goods orservices related to the assets by the Group;– Cost estimated to be occurred for the transfer of the relevant goods or services.

5.24 Employee benefits

5.24.1 Short-term employee benefits

Employee wages or salaries, bonuses, social security contributions such as medical insurance,work injury insurance, maternity insurance and housing fund, measured at the amountincurred or accured at the applicable benchmarks and rates, are recognised as a liability as theemployee provides services, with a corresponding charge to profit or loss or included in thecost of assets where appropriate.

5.24.2 Post-employment benefits – defined contribution plans

Pursuant to the relevant laws and regulations of the People’s Republic of China, the Groupparticipated in a defined contribution basic pension insurance plan in the social insurancesystem established and managed by government organisations. The Group makescontributions to basic pension insurance plans based on the applicable benchmarks and ratesstipulated by the government. Basic pension insurance contributions payable are recognisedas a liability as the employee provides services, with a corresponding charge to profit or lossor included in the cost of assets where appropriate.

5.24.3 Termination benefits

When the Group terminates the employment with employees before the employment contractsexpire, or provides compensation under an offer to encourage employees to accept voluntaryredundancy, a provision is recognised with a corresponding expense in profit or loss at theearlier of the following dates:

- When the Group cannot unilaterally withdraw the offer of termination benefits because ofan employee termination plan or a curtailment proposal;- When the Group has a formal detailed restructuring plan involving the payment oftermination benefits and has raised a valid expectation in those affected that it will carry outthe restructuring by starting to implement that plan or announcing its main features to thoseaffected by it.

5.25 Share-based payment

Share-based payment of this Group are transactions in which the Group grants equityinstruments or undertakes equity-instrument-based liabilities in return for services fromemployees. The Group’s share-based payments consist of equity-settled share-based paymentsand cash-settled share-based payments.

The equity-settled share-based payment in return for employee services shall be measured atthe fair value of the equity instruments granted to employees on the grant date. On eachbalance sheet date within the vesting period, the Group, based on the latest information,including the change of vested employees’ number, whether it meets the specifiedperformance conditions, and other subsequent information, makes the best estimates of thenumber of vested equity instruments. On this basis, in accordance with the fair value on thegrant date, the services obtained in the current period shall be included in the relevant costs orexpenses, and the capital reserves shall be increased accordingly. After the vesting date, noadjustment shall be made to the relevant costs or expenses as well as the total amount of theowner’s equities which have been confirmed. If the right may be exercised immediately afterthe grant, however, the fair value shall be included in the relevant costs or expenses on thegrant date, and the capital reserves shall be increased accordingly.

The cash-settled share-based payment shall be measured at the fair value of the liabilitiesundertaken by the Group and determined by shares or other equity instruments. If the rightmay be exercised immediately after the grant, the fair value of the liabilities undertaken shallbe included in the relevant costs or expenses on the grant date, and the liabilities shall beincreased accordingly; if the right may not be exercised until the vesting period comes to anend or until the specified performance conditions are met, on each balance sheet date withinthe vesting period, the sercices obtained in the current period shall, based on the best estimateof the information about the exercisable right, be included in the costs or expenses at the fairvalue of the liabilities undertaken, and the liabilities shall be adjusted accordingly. The fairvalue of the liabilities shall be re-measured on each balance sheet date and balance sheet datebefore the settlement of related liabilities, and the change shall be included in the currentprofits and losses.

When the Group modifies the share-based payment plan, if the modification increases the fairvalue of equity instrument granted, the increase of service shall be recognized according tothe increase of fair value of equity instrument accordingly; if the number of equity instrumentgranted is modified to increase, the Group shall recognized the fair value of equity instrumentincreased as the increase of service obtained. The increase of the fair value of equityinstruments refers to the difference between the fair value of the equity instruments beforeand after the modification on the date of modification. If the revision of vesting conditions isdone in favor of employees, such as vesting period cut-down, modification or cancel ofperformance conditions (rather than market conditions), the Group shall take the modifiedvesting conditions into consideration to deal with vesting conditions. If the modificationdecreases the total amount of share-based payment fair value or adopts other ways which areadverse to the employees to modify terms and conditions of share-based payment plan, unlessthe Group cancels part or all of the granted equity instruments, it shall conduct the furtheraccounting treatment of the services acquired, and it shall be deemed that such change neverhappens.

If the equity instruments granted are cancelled within the vesting period, the Group shall treatthem as accelerated exercise and include the amount to be recognized in the remaining vestingperiod into the current profits and losses immediately, and the capital reserves shall berecognized at the same time. If the employee or other parties can choose to meet thenon-vesting conditions but fails to meet within the vesting period, the Group shall treat it as acancellation of equity instruments.

5.26 Government grants

Government grants are non-reciprocal transfers of monetary or non-monetary assets from thegovernment to the Group except for capital contributions from the government in the capacityas an investor in the Group.

A government grant is recognised when there is reasonable assurance that the grant will bereceived and that the Group will comply with the conditions attaching to the grant.

If a government grant is in the form of a transfer of a monetary asset, it is measured at theamount received or receivable. If a government grant is in the form of a transfer of anon-monetary asset, it is measured at fair value.

Government grants related to assets are grants whose primary condition is that the Groupqualifying for them should purchase, construct or otherwise acquire long-term assets.Government grants related to income are grants other than those related to assets. Agovernment grant related to an asset is recognised as deferred income and amortised over theuseful life of the related asset on a reasonable and systematic manner as other income ornon-operating income. A grant that compensates the Company for expenses or losses to beincurred in the future is recognised as deferred income, and included in other income ornon-operating income in the periods in which the expenses or losses are recognised, orincluded in other income or non-operating income directly.

5.27 Income tax

Current tax and deferred tax are recognised in profit or loss except to the extent that theyrelate to a business combination or items recognised directly in equity (including othercomprehensive income).

Current tax is the expected tax payable calculated at the applicable tax rate on taxable incomefor the year, plus any adjustment to tax payable in respect of previous years.

At the balance sheet date, current tax assets and liabilities are offset only if the Group has alegally enforceable right to set them off and also intends either to settle on a net basis or torealise the asset and settle the liability simultaneously.

Deferred tax assets and deferred tax liabilities arise from deductible and taxable temporarydifferences respectively, being the differences between the carrying amounts of assets andliabilities for financial reporting purposes and their tax bases, which include the deductiblelosses and tax credits carried forward to subsequent periods. Deferred tax assets arerecognised to the extent that it is probable that future taxable profits will be available againstwhich deductible temporary differences can be utilised.

Deferred tax is not recognised for the temporary differences arising from the initialrecognition of assets or liabilities in a transaction that is not a business combination and thataffects neither accounting profit nor taxable profit (or deductible loss). Deferred tax is notrecognised for taxable temporary differences arising from the initial recognition of goodwill.

At the balance sheet date, deferred tax is measured based on the tax consequences that wouldfollow from the expected manner of recovery or settlement of the carrying amounts of theassets and liabilities, using tax rates enacted at the balance sheet date that are expected to beapplied in the period when the asset is recovered or the liability is settled.

The carrying amount of a deferred tax asset is reviewed at each balance sheet date, and isreduced to the extent that it is no longer probable that the related tax benefits will be utilised.Such reduction is reversed to the extent that it becomes probable that sufficient taxable profitswill be available.

At the balance sheet date, deferred tax assets and deferred tax liabilities are offset if all of thefollowing conditions are met:

- the taxable entity has a legally enforceable right to offset current tax liabilities and currenttax assets;- they relate to income taxes levied by the same tax authority on either: the same taxableentity; or different taxable entities which intend either to settle the current tax liabilities andcurrent tax assets on a net basis, or to realise the assets and settle the liabilities simultaneously,in each future period in which significant amounts of deferred tax liabilities or deferred taxassets are expected to be settled or recovered.

5.28 Lease

Lease refers to a contract in which it is agreed that the lessor conveys the use right of anyasset to the lessee for a period of time in exchange for consideration.

On the contract start date, the Group shall evaluate whether the contract is, or contains, a lease.Where either party thereto conveys the right to control the use of one or more identified assetsfor a period of time in exchange for consideration, the contract is, or contains a lease.

To determine whether the contract conveys the right to control the use of identified assets fora period of time, the Group conducts the following assessments:

- Whether the contract involves the use of an identified asset. An identified asset can beeither explicitly specified in a contract, or implicitly when the asset is available to thecustomer and can be a physically distinct portion, or if some capacity or other portion of theasset is not physically distinct but substantially represents the full capacity of the asset, so thatthe customer obtains substantially all of the economic benefits from the use of the asset. If thesupplier of the asset has the practical ability to substitute the asset throughout the period ofuse, the asset is not an identified asset;- Whether the lessee has the right to obtain substantially all of the economic benefits fromthe use of the identified asset throughout the period of use; and- Whether the lessee has the right to direct the use of an identified asset throughout thisperiod of use.

If the contract contains multiple separate leases at the same time, the lessee and lessor willsplit the contract and have each separate lease separately subject to accounting treatment. Ifthe contract includes lease and non-lease parts at the same time, the lessee and the lessor willsplit them separately. When splitting the lease and non-lease parts included in the contract, thelessee shall allocate the contract consideration according to the relative proportion of the sumof the stand-alone price of each lease part and the stand-alone price of each non-lease part.The lessor shall allocate the contract consideration in accordance with the provisions ontransaction price allocation in the accounting policy stated in Note 5.22.

5.28.1 Where the Group is the lessee

Upon the commencement of the lease term, the Group recognizes right-of-use assets and leaseliabilities for leases. The right-of-use assets are initially measured at cost, including initiallymeasured amount of leased liability; amount of lease payments made on or before thecommencement date of the lease term (the related amount of lease incentive having beenenjoyed shall be deducted); initial direct costs incurred and costs that the Group expects toincur to disassemble and remove leased assets, restore the site where leased assets are located

or restore leased assets to the agreed condition under the terms of the lease.

The Group employs the straight-line method to depreciate right-of-use assets. Where it can bereasonably recognized that the ownership of leased assets will be obtained by the Group uponexpiration of the lease term, leased assets will be depreciated during the service life; otherwise,leased assets will be depreciated during the lease term or the remaining service life of suchleased assets by the Group, whichever is shorter. Right-of-use assets shall be provided forimpairment in accordance with the accounting policies stated in Note 5.20.

When initially calculating the present value of the unpaid lease payment at thecommencement date of the lease term, the Group shall employ the interest rate implicit in thelease as the discount rate; where the interest rate implicit in the lease cannot be determined,the incremental lending rate of the Group shall be used as the discount rate.

The Group calculates the interest expense of lease liabilities in each period of the lease termaccording to a fixed periodic rate, which will be included in current profits and losses or assetcost. The variable lease payment not included in the measurement of lease liabilities shall berecognized in current profits and losses and loss or related asset cost when they actually occur.

In case of any of following circumstances after the commencement date of the lease term, theGroup will remeasure lease liabilities at the present value of the lease payment after anychange:

– Where the amount payable anticipated changes according to the guaranteed residualvalue;– Where the index or ratio used for recognizing the lease payment changes;– Where there is a change in the Group's assessment results of the option of purchase,renewal option or option of termination of lease or the actual exercising of the termination ofthe renewal option or option of termination of lease is inconsistent with the originalassessment result.

When the Group remeasures lease liabilities, the book value of right-of-use assets shall beadjusted accordingly. Where the book value of right-of-use assets has been reduced to zero,but lease liabilities still need to be subject to further reduction, the remaining amount shall berecognized in current profits and losses.

The Group does not recognize right-of-use assets and leased liabilities for short-term lease(lease with a lease term within 12 months) and lease of low-value assets. The Group shallinclude related lease payment into the current profits and losses or relevant asset costsaccording to the straight-line method in each period of the lease term.

5.28.2 The Group as the lessor

From the inception of lease, the Group will divide leases into finance lease and operatinglease. Finance lease refers to a lease in which almost all the risks and returns related to theownership of the leased asset are essentially transferred, regardless of whether the ownershipis finally transferred or not. Operating lease refers to other leases except for the finance lease.

When the Group is the sublease lessor, the sublease shall be classified based on theright-of-use assets arising from the original lease rather than the underlying assets of the theoriginal lease. If the original lease is a short-term lease and the Group elects to apply theabove-mentioned simplified treatment of short-term lease to the original lease, the Groupshall classify the sublease as an operating lease.

For finance leases, from the commencement date of the lease term, the Group recognizesfinance lease receivables for finance leases and derecognizes the finance lease assets. TheGroup regards the net investment in a lease as the entry value of finance lease receivables atthe time of initial measurement of finance lease receivables. The net investment in a lease isthe sum of the present value of unguaranteed residual value and rental receipts not receivedyet on the commencement date of the lease term which is subject to discounting at the interestrate implicit in the lease term.

The Group calculates and recognizes the interest income in each period within the lease termaccording to a fixed periodic rate. Derecognition and impairment of finance lease receivablesshall be subject to accounting treatment in accordance with the accounting policies stated inNote 5.9. The variable lease payment which is not included in the net investment in a lease,shall be recognized in current profits and losses when it actually occurs.

During each period of the lease term, the Group recognizes lease receipts from operatingleases as rental revenue by using the straight-line method. The Group capitalizes initial directcosts pertaining to operating leases upon their occurrence, and apportions them as per thesame basis used for recognizing the rental income within the lease term and includes them incurrent profits and losses by period. The variable lease receipts related to operating leases thatare not included in the lease receipts shall be recognized in current profits and losses whenthey actually occur. The variable lease payment which is not included in the lease receipts,shall be recognized in current profits and losses when it actually occurs.

5.29 Assets held for sale

The Group classified a non-current asset or disposal group as held for sale when the carryingamount of a non-current asset or disposal group will be recovered through a sale transactionrather than through continuing use.

A disposal group refers to a group of assets to be disposed of, by sale or otherwise, together asa whole in a single transaction and liabilities directly associated with those assets that will betransferred in the transaction.

A non-current asset or disposal group is classified as held for sale when all the followingcriteria are met:

- According to the customary practices of selling such asset or disposal group in similartransactions, the non-current asset or disposal group must be available for immediate sale intheir present condition subject to terms that are usual and customary for sales of such assets ordisposal groups;- Its sale is highly probable, that is, the Group has made a resolution on a sale plan and has

obtained a firm purchase commitment. The sale is to be completed within one year.

Non-current assets or disposal groups held for sale are stated at the lower of carrying amountand fair value less costs to sell (except financial assets, deferred tax assets and investmentproperties subsequent measured at fair value initially and subsequently. Any excess of thecarrying amount over the fair value less costs to sell is recognised as an impairment loss inprofit or loss.

5.30 Profit distributions

Dividends or profit distributions proposed in the profit appropriation plan, which will beapproved after the balance sheet date, are not recognised as a liability at the balance sheet datebut are disclosed in the notes separately.

5.31 Related parties

If a party has the power to control, jointly control or exercise significant influence overanother party, or vice versa, or where two or more parties are subject to common control orjoint control from another party, they are considered to be related parties. Related parties maybe individuals or enterprises. Enterprises with which the Company is under common controlonly from the State and that have no other related party relationships are not regarded asrelated parties.

In addition to the related parties stated above, the Group determines related parties based onthe disclosure requirements of Administrative Procedures on the Information Disclosures ofListed Companies issued by the CSRC.

5.32 Segment reporting

The Group is principally engaged in the production and sales of wine, brandy, and sparklingwine in China, France, Spain, Chile and Australia. In accordance with the Group's internalorganisation structure, management requirements and internal reporting system, the Group'soperation is divided into four parts: China, Spain, France, Chile and Australia. Themanagement periodically evaluates segment results, in order to allocate resources andevaluate performances. In 2023, over 85% of revenue, more than 96% of profit and over 91%of non-current assets derived from China / are located in China. Therefore the Group does notneed to disclose additional segment report information.

5.33 Significant accounting estimates and judgements

The preparation of the financial statements requires management to make estimates andassumptions that affect the application of accounting policies and the reported amounts ofassets, liabilities, income and expenses. Actual results may differ from these estimates.Estimates as well as underlying assumptions and uncertainties involved are reviewed on anongoing basis. Revisions to accounting estimates are recognised in the period in which theestimate is revised and in any future periods affected.

5.33.1 Significant accounting estimates

For significant accounting estimates of this Company, see Notes 5.3, 7, 11 and 16.

5.34 Changes in significant accounting policies and accounting estimates

5.34.1 Changes in significant accounting policies

Nil

5.34.2 Changes in significant accounting estimates

Nil

6. Taxes

6.1 Main taxes and tax rates are as follows:

6.2 Tax incentives

Ningxia Changyu Grape Growing Co., Ltd. (“Ningxia Growing”), a subsidiary of the Group,whose principal activity is grape growing, is incorporated in Ningxia Huizu AutonomousRegion. According to clause 27 of PRC Corporate Income Tax and clause 86 of PRCCorporate Income Tax Measures for Implementation, Ningxia Growing enjoys an exemptionof corporate income tax.

Yantai Changyu Grape Growing Co., Ltd. (“Grape Growing”), a branch of the Company,whose principal activity is grape growing, is incorporated in Zhifu District, Yantai City,Shandong Province. According to clause 27 of PRC Corporate Income Tax and clause 86 ofPRC Corporate Income Tax Measures for Implementation, Grape Growing enjoys anexemption of corporate income tax.

Grape Planting Branch of Yantai Changyu Wine R&D and Manufacturing Co., Ltd. (“R&Dand Growing”), a branch of the Company, whose principal activity is grape growing, isincorporated in YEDA, Shandong Province. According to Clause 27 of PRC CorporateIncome Tax and Clause 86 of PRC Corporate Income Tax Measures for Implementation, R&Dand Growing enjoys an exemption of corporate income tax.

Beijing Changyu AFIP Agriculture Development Co., Ltd (“Agriculture Development”), asubsidiary of the Group, whose principal activity is grape growing, is incorporated in MiyunCounty, Beijing. According to clause 27 of the Corporate Income Tax Law of the People’s

Tax category	Taxation basis	Tax rates
Value added tax	Levied on the balance between the output tax calculated based on taxable income and the input tax allowed to be deducted in current period	13%, 9%, 6% (China), 20% (France), 21% (Spain), 19% (Chile), 10% (Australia)
Consumption tax	Levied on taxable income	10% of the price, 20% of the price and 1,000 Yuan each ton (China)
City development tax	Levied on circulation tax actually paid	7% (China)
Corporate income tax	Levied on taxable income	25% (China), 25% (France), 28% (Spain), 27% (Chile), 30% (Australia)

Republic of China and clause 86 of the Implementation Rules of Enterprise Income Tax Lawof the People’s Republic of China, Agriculture Development enjoys an exemption of corporateincome tax.

Xinjiang Tianzhu Co., Ltd (“Xinjiang Tianzhu”, disposed in June 2023), a subsidiary of theCompany, is an enterprise of raw wine production and sales incorporated in Shihezi City,Xinjiang Uygur Autonomous Region. In accordance with the Announcement on Continuingthe Enterprise Income Tax Policies for the Large-Scale Development of Western China of theMinistry of Finance, the State Taxation Administration and the National Development andReform Commission (Announcement No. 23 [2020] of the Ministry of Finance), XinjiangTianzhu is qualified to enjoy preferential taxation policies, which means it can pay corporateincome tax at a preferential rate of 15% for the period from 2021 to 2030.

Xinjiang Babao Baron Chateau Co., Ltd. (“Shihezi Chateau”), a subsidiary of the Company, isan enterprise of raw wine production and sales incorporated in Shihezi City, Xinjiang UygurAutonomous Region. In accordance with Announcement on Continuing the Enterprise IncomeTax Policies for the Large-Scale Development of Western China of the Ministry of Finance,the State Taxation Administration and the National Development and Reform Commission(Announcement No. 23 [2020] of the Ministry of Finance), Shihezi Chateau is qualified toenjoy preferential taxation policies, which means it can pay corporate income tax at apreferential rate of 15% for the period from 2021 to 2030.

Ningxia Chateau Changyu Longyu Co., Ltd. (previous name: Chateau Changyu Moser XVCo., Ltd., Ningxia, referred to as “Ningxia Chateau”), a subsidiary of the Company, is anenterprise of raw wine production and sales incorporated in Yinchuan City, Ningxia HuizuAutonomous Region. In accordance with Announcement on Continuing the Enterprise IncomeTax Policies for the Large-Scale Development of Western China of the Ministry of Finance,the State Taxation Administration and the National Development and Reform Commission(Announcement No. 23 [2020] of the Ministry of Finance), Ningxia Chateau is qualified toenjoy preferential taxation policies, which means it can pay corporate income tax at apreferential rate of 15% for the period from 2021 to 2030.

Changyu (Ningxia) Wine Co., Ltd. (“Ningxia Wine”), a subsidiary of the Company, is anenterprise of raw wine production and sales incorporated in Yinchuan City, Ningxia HuizuAutonomous Region. In accordance with Announcement on Continuing the Enterprise IncomeTax Policies for the Large-Scale Development of Western China of the Ministry of Finance,the State Taxation Administration and the National Development and Reform Commission(Announcement No. 23 [2020] of the Ministry of Finance), Ningxia Wine is qualified to enjoypreferential taxation policies, which means it can pay corporate income tax at a preferentialrate of 15% for the period from 2021 to 2030.

According to the provisions of the Announcement of the Ministry of Finance and the StateTaxation Administration on Further Implementing the Preferential Income Tax Policies forMicro and Small Enterprises (Announcement No. 13 of [2022] of the Ministry of Finance andthe State Taxation Administration), the annual taxable income of a small low-profit enterprisethat is not less than 1 Million Yuan and not more than 3 Million Yuan shall be included in itstaxable income at the reduced rate of 25%, with the applicable enterprise income tax rate of20%. Beijing Changyu Wine Industry Marketing Co., Ltd. (“Beijing Allotting”), a subsidiary

of the Group, has been identified as eligible small low-profit enterprise.

According to the provisions of the Announcement of the Ministry of Finance and the StateTaxation Administration on Exempting Small-Scale Value-Added Tax Taxpayers fromValue-Added Tax (Announcement No. 1 of [2023] of the Ministry of Finance and the StateTaxation Administration), from January 1 to December 31, 2023, small-scale VAT taxpayerssubject to a levy rate of 3% on taxable sales income will enjoy a reduced VAT rate of 1%; andprepaid VAT items that are subject to a 3% pre-levy rate will enjoy a reduced VAT prepaymentrate of 1%. Xinjiang Changyu Sales Co., Ltd. Weimeisi Tasting Center Branch has enjoyedthis exemption policy.

According to the provisions of the Announcement of the Ministry of Finance and the StateTaxation Administration on Further Strengthening the Implementation of the PoliciesRegarding the Refund of Term-End Excess Input Value-Added Tax Credits (Announcement No.14 of [2022] of the Ministry of Finance and the State Taxation Administration), it will furtherstrengthen the implementation of the refund of term-end excess input value-added tax creditsand expand the industry scope of the policy of fully refunding the excess input value-addedtax credits. This Company and eligible subsidiaries have enjoyed the refund of term-endexcess input value-added tax credits.

According to the Announcement of the Ministry of Finance and the State TaxationAdministration on Further Implementing the “Six Taxes and Two Fees” Reduction andExemption Policies for Micro and Small Enterprises (Announcement No. 10 of [2022]), asdetermined by the people’s government of a province, autonomous region, or municipalitydirectly under the Central Government in light of the actual circumstances of the local region,from January 1, 2022 to December 31, 2024, a small-scale VAT taxpayer, a small low-profitenterprise or an individual industrial and commercial household may be pay resource tax,urban maintenance and construction tax, property tax, urban land use tax, stamp tax(excluding securities trading stamp tax), farmland occupation tax, educational surtax, or localeducation surcharges at the reduced tax rate of 50% or less. Shandong, Xinjiang, Ningxia,Shaanxi and other provinces (autonomous regions and municipalities) have reduced the “sixtaxes and two fees” by 50%, and some of the Company’s subsidiaries are eligible for thereduction.

7. Notes to items in the consolidated financial statement

7.1 Monetary capital

Unit: Yuan

Item	Ending balance	Beginning balance
Cash on hand	59,243	47,954
Bank deposit	1,654,452,878	1,643,577,420
Other monetary capital	7,116,672	7,828,741
Total	1,661,628,793	1,651,454,115
Including: Total overseas deposits	26,734,678	17,073,210

As at June 30, 2023, the restricted bank deposit details are listed as follows:

Unit: Yuan

Item	Ending balance	Beginning balance
Housing fund of the unit	2,671,774	2,671,774
Total	2,671,774	2,671,774

As at June 30, 2023, the details of other monetary funds are listed as follows:

Unit: Yuan

Item	Ending balance	Beginning balance
Guaranteed deposits paid for the letter of credit	6,000,000	6,000,000
Account balance of Alipay	974,374	1,695,245
Guaranty money for ICBC platform	10,000	10,000
Guaranty money for customs	132,298	123,496
Total	7,116,672	7,828,741

As at June 30, 2023, the bank deposits of the Group including short-term fixed depositsranging from 3 months to 12 months and interests amounted to RMB 228,759,568 Yuan, withthe interest rates ranging from 1.7% to 2.15% (December 31, 2022: RMB 28,200,000 Yuan).

7.2 Bills receivable

Classification of bills receivable

Item	Ending balance	Beginning balance
Bank acceptance bills	684,245	2,712,460
Total	684,245	2,712,460

The above bills receivable are all due within one year.

7.3 Accounts receivable

7.3.1 Accounts receivable disclosed by type

Unit: Yuan

Type	Ending balance					Beginning balance
	Book balance		Provision for bad debts		Book value	Book balance		Provision for bad debts		Book value
	Amount	Proportion	Amount	Accrued proportion		Amount	Proportion	Amount	Accrued proportion
Accounts receivable for which provision for bad debts is accrued on a single item basis
Accounts receivable for which provision for bad debts is accrued on a combined basis	225,725,385	100.0%	15,549,600	6.89%	210,175,785	358,539,091	100%	14,556,106	4.06%	343,982,985
Total	225,725,385	100.0%	15,549,600	6.89%	210,175,785	358,539,091	100%	14,556,106	4.06%	343,982,985

Provision for bad debts accrued on a combined basis:

Unit: Yuan

Name	Ending balance
	Book balance	Provision for bad debts	Accrued proportion
Amounts due from related parties	2,557,331	4,603	0.18%
Amounts due from other customers	223,168,054	15,544,997	6.97%
Total	225,725,385	15,549,600	--

Disclosed by age:

Unit: Yuan

Age	Ending balance
Within 1 year (including 1 year)	214,280,276
1-2 years	11,122,911
2-3 years	322,198
Over 3 years
Total	225,725,385

As at June 30, 2023, the accounts receivable with ownership restrictions were RMB64,860,399 Yuan (December 31, 2022: 59,982,807 Yuan). Please refer to Note 7.19 for details.

7.3.2 Provision for bad debts accrued, withdrawn or transferred back in this periodProvision for bad debts accrued in this period:

Unit: Yuan

Type	Beginning balance of the year	Changes in this period			Ending balance
		Accrued	Withdrawn or transferred back	Cancelled
Accounts receivable for which provision for bad debts is accrued	14,556,106	993,494			15,549,600
Total	14,556,106	993,494			15,549,600

7.3.3 Accounts receivable actually cancelled after verification in this periodNil

7.3.4 Accounts receivable collected by the borrowers of top 5 units ranked by the endingbalance

Unit: Yuan

Unit	Relationship with the Group	Amount	Period	Percentage in total accounts receivable	Ending balance of provision for bad and doubtful debts
Customer 1	Third party	34,036,910	Within 1 year	15.1%	60,724
Customer 2	Third party	9,422,337	Within 1 year	4.2%	586,782
Customer 3	Third party	6,956,313	Within 1 year	3.1%	433,209
Customer 4	Third party	5,004,414	Within 1 year	2.2%	311,653
Customer 5	Third party	4,394,266	Within 1 year	1.9%	273,656
Total	--	59,814,240	--	26.5%	1,666,024

7.3.5 Accounts receivable terminating recognition due to transfer of financial assetsNil

7.3.6 Accounts receivable transferred and included in assets and liabilitiesNil

7.4 Receivables financing

Unit: Yuan

Item	Ending balance	Beginning balance
Bills receivable	308,817,929	309,329,918
Total	308,817,929	309,329,918

7.4.1 The pledged bills receivable of the Group at the end of the yearNil

7.4.2 Outstanding endorsed bills that have not matured at the end of the year

Category	Amount derecognised at end of period
Bank acceptance bills	97,379,122
Total	97,379,122

As at June 30, 2023, bills endorsed by the Group to other parties which are not yet due at theend of the period is RMB 97,379,122 Yuan (December 31, 2022: RMB 500,480,279 Yuan).The notes are used for payment to suppliers and constructions. The Group believes that due togood reputation of bank, the risk of notes not accepting by bank on maturity is very low,therefore derecognise the note receivables endorsed. If the bank is unable to pay the notes onmaturity, according to the relevant laws and regulations of China, the Group would undertakelimited liability for the notes.

7.5 Advance payment

7.5.1 Advance payment listed by age

Unit: Yuan

Age	Ending balance		Beginning sum
	Amount	Proportion	Amount	Proportion
Within 1 year	9,182,282	99.25%	59,426,080	98.40%
1-2 years	69,119	0.75%	989,428	1.60%
2-3 years
More than 3 years
Total	9,251,401	--	60,415,508	--

7.5.2 Advance payment collected by the prepaid parties of top 5 units ranked by theending balance

Unit: Yuan

Category of client	Relationship with the Group	Amount	Age	Reason for unsettlement	Percentage in the total advance payment%
Unit 1	Third party	1,073,128	Within 1 year (including 1 year)	Prepaid electricity	11.6%
Unit 2	Third party	1,000,000	Within 1 year (including 1 year)	Prepaid service charge	10.8%
Unit 3	Third party	750,000	Within 1 year (including 1 year)	Prepaid freight	8.1%
Unit 4	Third party	501,076	Within 1 year (including 1 year)	Prepaid freight	5.4%
Unit 5	Third party	300,000	Within 1 year (including 1 year)	Prepaid payment for goods	3.2%
Total	--	3,624,204	--		39.10%

7.6 Other receivables

Unit: Yuan

Item	Ending balance	Beginning balance
Interests receivable
Dividends receivable
Other receivables	69,101,039	70,542,398
Total	69,101,039	70,542,398

Other receivables

7.6.1 Other receivables classified by nature

Unit: Yuan

Nature	Ending book balance	Beginning book balance
Deposit and guaranty money receivable	3,529,407	5,578,001
Consumption tax and added-value tax export rebate	8,971,546	12,509,201
Imprest receivable	314,172	440,759
Compensation for land acquisition and storage receivable	41,268,902	41,268,902
Other	15,017,012	10,745,535
Total	69,101,039	70,542,398

7.6.2 Disclosed by age

Unit: Yuan

Age	Ending balance
Within 1 year (including 1 year)	65,165,325
1-2 years	1,454,647
2-3 years	411,516
More than 3 years	2,069,551
Total	69,101,039

7.6.3 Provision for bad debts accrued, withdrawn or transferred back in this period

The provision for bad debts accrued in this period was RMB 0 Yuan; and that withdrawn ortransferred back in this period was RMB 0 Yuan.

7.6.4 Other receivables actually cancelled after verification in this periodNil

7.6.5 Other receivables collected by the borrowers of top 5 units ranked by the endingbalance

Unit: Yuan

Unit	Nature	Ending balance	Age	Percentage in total ending balance of other accounts receivable	Ending balance of provision for bad debts
Unit 1	Land acquisition and reserve funds	41,268,902	Within 1 years	59.72%
Unit 2	Value-added tax export rebate	7,762,031	Within 1 years	11.23%
Unit 3	Value-added tax and consumption tax export rebate	1,209,515	Within 1 years	1.75%
Unit 4	Guaranty money	721,657	Within 1 year	1.04%
Unit 5	Guaranty money	572,880	1-2 years	0.83%
Total	--	51,534,985	--	74.58%

7.6.6 Accounts receivable involving government subsidies

Nil

7.6.7 Other receivables that are terminated for recognition due to transfer of financialassetsNil

7.6.8 Other receivables transferred and then included in assets and liabilitiesNil

7.7 Inventories

7.7.1 Inventory classification

Unit: Yuan

Item	Ending balance			Beginning balance
	Book balance	Depreciation provision	Book value	Book balance	Depreciation provision	Book value
Raw materials	86,766,001		86,766,001	258,200,178		258,200,178
Goods in process	2,213,143,868		2,213,143,868	1,986,391,270		1,986,391,270
Commodity stocks	641,193,968	14,608,393	626,585,575	673,171,026	14,363,959	658,807,067
Total	2,941,103,837	14,608,393	2,926,495,444	2,917,762,474	14,363,959	2,903,398,515

7.7.2 Inventory depreciation provision

Unit: Yuan

Item	Beginning balance	Increase in this period		Decrease in this period		Ending balance
		Accrual	Other	Transfer back or write-off	Other
Raw materials
Goods in process
Commodity stocks	14,363,959	14,608,393		14,363,959		14,608,393
Total	14,363,959	14,608,393		14,363,959		14,608,393

7.8 Other current assets

Unit: Yuan

Item	Ending balance	Beginning balance
Trademark use fees	108,931,118	120,930,641
Prepaid corporate income tax	12,985,243	19,102,111
Deductible input tax	31,032,377	44,270,238
Expense to be amortized	3,095,677	1,034,403
Total	156,044,415	185,337,393

7.9 Long-term equity investments

Unit: Yuan

Investee	Beginning balance (book value)	Movements during the period								Ending balance (book value)	Ending balance of provision for impairment
		Increase in capital	Decrease in capita	Losses from investments under equity-method	Other comprehensive income adjustment	Other equity changing	Declare cash dividend or profit	Accrual provision for impairment	Others
1. Joint ventures
SAS L&M Holdings (“L&M Holdings”)	37,970,535			-1,124,340						36,846,195
Subtotal	37,970,535			-1,124,340						36,846,195
2. Associates
Weimeisi (Shanghai) Enterprise Development Co., Ltd. (“Weimeisi Shanghai”)	2,318,351		2,373,285	54,934
Chengdu Yufeng Brand Management Co., Ltd. (“Chengdu Yufeng”) (Note)	420,369			-41,400						378,969
Yantai Guolong Wine Industry Co., Ltd. (“Guolong Wine Industry”) (Note)	662,130			178,218						840,348
Subtotal	3,400,850		2,373,285	191,752						1,219,317
Total	41,371,385		2,373,285	-932,588						38,065,512

Note: The Group has appointed one director to each of these investees.

7.10 Investment real estate

7.10.1 Investment real estate by cost measurement method

Unit: Yuan

Item	Houses and buildings	Land use right	Construction in progress	Total
Ⅰ Original book value
1. Beginning balance	70,954,045			70,954,045
2. Increase in this period
2.1 Outsourcing
2.2 Transfer in from inventories\fixed assets\ construction in progress
2.3 Business merger increase
3. Decrease in this period
3.1 Disposal
3.2 Other transfer out
4. Ending balance	70,954,045			70,954,045
Ⅱ Accumulated depreciation & accumulated amortization
1. Beginning balance	48,838,727			48,838,727
2. Increase in this period	1,073,998			1,073,998
2.1 Accrual or amortization	1,073,998			1,073,998
3. Decrease in this period
3.1 Disposal
3.2 Other transfer out
4. Ending balance	49,912,725			49,912,725
Ⅲ Impairment provision
1. Beginning balance
2. Increase in this period
2.1 Accrual
3. Decrease in this period
3.1 Disposal
3.2 Other transfer out
4. Ending balance
Ⅳ Book value
1. Ending book value	21,041,320			21,041,320
2. Beginning book value	22,115,318			22,115,318

7.11 Fixed assets

Unit: Yuan

Item	Ending balance	Beginning balance
Fixed assets	5,926,395,012	6,028,137,972
Disposal of fixed assets
Total	5,926,395,012	6,028,137,972

7.11.1 Particulars of fixed assets

Unit: Yuan

Item	Houses and buildings	Machinery equipment	Transportation equipment	Total
Ⅰ Original book value:
1. Beginning balance	5,878,199,055	2,793,728,175	25,888,552	8,697,815,782
2. Increase in this period	14,876,612	44,297,900	9,252	59,183,764
2.1 Acquisition	9,161,231	42,571,564	9,252	51,742,047
2.2 Transfer in from construction in progress	5,715,381	1,726,336		7,441,717
2.3 Business merger increase
3. Decrease in this period	6,544,913	34,325,726	1,538,783	42,409,422
3.1 Disposal or retirement		32,763,148	1,286,428	34,049,576
3.2 Others	6,544,913	1,562,578	252,355	8,359,846
4. Ending balance	5,886,530,754	2,803,700,349	24,359,021	8,714,590,124
Ⅱ Accumulated depreciation
1. Beginning balance	1,167,095,365	1,477,263,867	22,633,029	2,666,992,261
2. Increase in this period	77,811,305	77,119,167	953,314	155,883,786
2.1 Accrual	77,811,305	77,119,167	953,314	155,883,786
3. Decrease in this period	3,303,153	30,076,823	1,414,322	34,794,298
3.1 Disposal or retirement		29,248,194	1,174,585	30,422,779
3.2 Others	3,303,153	828,629	239,737	4,371,519
4. Ending balance	1,241,603,517	1,524,306,211	22,172,021	2,788,081,749
Ⅲ Impairment provision
1. Beginning balance		2,685,549		2,685,549
2. Increase in this period
2.1 Accrual
3. Decrease in this period		2,572,186		2,572,186
3.1 Disposal or retirement		2,556,018		2,556,018
3.2 Others		16,168		16,168
4. Ending balance		113,363		113,363
Ⅳ Book value
1. Ending book value	4,644,927,237	1,279,280,775	2,187,000	5,926,395,012
2. Beginning book value	4,711,103,690	1,313,778,759	3,255,523	6,028,137,972

As at June 30, 2023, the net value of the fixed assets with ownership restrictions was RMB294,202,438 Yuan (December 31, 2022: RMB 303,897,124 Yuan). Please refer to Note 7.53for details.

The Company’s disposal of its subsidiary Xinjiang Tianzhu this year was not included in thescope of the consolidated balance sheet at the end of this period. As of the date of loss ofcontrol, the original book value, accumulated depreciation, and depreciation reserves of fixed

assets of Xinjiang Tianzhu are respectively listed in the “Others” item of the current decreasein the original book value, accumulated depreciation, and depreciation reserves of fixedassets.

7.11.2 Particulars of temporarily idle fixed assets

Unit: Yuan

Item	Original book value	Accumulated depreciation	Depreciation reserves	Book value	Remarks
Buildings	16,248,086	8,767,714		7,480,372
Machinery equipment	780,191	627,819	113,363	39,009
Transportation equipment	1,081,789	1,027,699		54,090
Total	18,110,066	10,423,232	113,363	7,573,471

7.11.3 Particulars of fixed assets under finance leases

Nil

7.11.4 Fixed assets under operating lease

Unit: Yuan

Item	Ending book value
Machinery equipment	4,365

7.11.5 Particulars of fixed assets without property certificates

Unit: Yuan

Item	Book value	Reason for not receiving the property certificate
Dormitory Building, Main Building and Reception Building of Chang’an Chateau	261,255,708	Under transaction
Building and Boiler Room of Koya	171,944,719	Under transaction
European Town, Main Building and Service Building of Chateau AFIP	161,661,819	Under transaction
Office Building and Packaging Workshop of Icewine Valley	9,586,292	Under transaction
Wine-making Workshop of Changyu (Jingyang)	4,497,542	Under transaction
Office Building, Laboratory Building and Workshop of Fermentation Center	2,895,534	Under transaction
Finished Goods Warehouse and Workshop of Kylin Packaging	1,988,799	Under transaction
Others	273,112	Under transaction
Total	614,103,525

7.12 Construction in progress

Unit: Yuan

Item	Ending balance	Beginning balance
Construction in progress	47,247,490	40,934,161
Engineering materials
Total	47,247,490	40,934,161

7.12.1 Particulars of construction in progress

Unit: Yuan

Item	Ending balance			Beginning balance
	Book balance	Impairment provision	Book value	Book balance	Impairment provision	Book value
Museum Upgrading and Rebuilding Project	46,036,465		46,036,465	32,981,419		32,981,419
Renovation of Refrigeration Equipment in Xinjiang Chateau Workshop	700,000		700,000	7,065,744		7,065,744
Construction Projects of Other Companies	511,025		511,025	886,998		886,998
Total	47,247,490		47,247,490	40,934,161		40,934,161

7.12.2 Changes of major construction in progress in this period

Unit: Yuan

Item	Budget	Beginning balance	Increase in this period	Transferred to fixed assets in this period	Other decrease in this period	Ending balance	Proportion of accumulative project input in budget	Accumulative capitalized amount of interest	Including: capitalized amount of interest in this period	Capitalization ratio of interest in this period	Capital source
Construction Project of Shihezi Chateau	780,000,000	7,065,744		7,065,744			100.%				Self-raised funds
Museum Upgrading and Rebuilding Project	51,000,000	32,981,419	13,055,046			46,036,465	90.3%				Self-raised funds
Renovation of Refrigeration Equipment in Xinjiang Chateau Workshop	2,980,000		700,000			700,000	23.5%				Self-raised funds

As at June 30, 2023, there was no indication for impairment of construction in progress of the Group, so no provision for impairment was made.

7.13 Productive biological assets

7.13.1 Productive biological assets by cost measurement method

Unit: Yuan

Item	Plantation		Total
	Immature	Mature
Ⅰ Original book value
1. Beginning balance	23,405,557	252,471,374	275,876,931
2. Increase in this period	1,360,198	83,870	1,444,068
2.1 Outsourcing			0
2.2 Self cultivation	1,444,068		1,444,068
The immature turn to the mature	-83,870	83,870
3. Decrease in this period	850,105	130,466	980,571
3.1 Disposal	850,105	130,466	980,571
3.2 Other			0
4. Ending balance	23,915,650	252,424,778	276,340,428
Ⅱ Accumulated depreciation
1. Beginning balance		91,456,190	91,456,190
2. Increase in this period		7,047,318	7,047,318
2.1 Accrual		7,047,318	7,047,318
3. Decrease in this period		95,335	95,335
3.1 Disposal		95,335	95,335
3.2 Other
4. Ending balance		98,408,173	98,408,173
Ⅲ Impairment provision
1. Beginning balance
2. Increase in this period
2.1 Accrual
3. Decrease in this period
3.1 Disposal
3.2 Other
4. Ending balance
Ⅳ Book value
1. Ending book value	23,915,650	154,016,605	177,932,255
2. Beginning book value	23,405,557	161,015,184	184,420,741

As at June 30, 2023, no ownership of the biological assets was restricted.

As at June 30, 2023, there was no indication for impairment of biological assets of the Group,so no provision was made.

7.14 Right-of-use assets

Unit: Yuan

Item	Building	Land	Others	Total
Ⅰ Original book value
1. Beginning balance	84,818,532	137,980,409	1,697,986	224,496,927
2. Increase in this period
3. Decrease in this period
4. Ending balance	84,818,532	137,980,409	1,697,986	224,496,927
Ⅱ Accumulated amortization
1. Beginning balance	33,923,955	49,667,021	1,018,792	84,609,768
2. Increase in this period	8,014,300	2,898,345	169,799	11,082,444
2.1 Accrual	8,014,300	2,898,345	169,799	11,082,444
3. Decrease in this period
3.1 Disposal
4. Ending balance	41,938,255	52,565,366	1,188,591	95,692,212
Ⅲ Impairment provision
1. Beginning balance
2. Increase in this period
2.1 Accrual
3. Decrease in this period
3.1 Disposal
4. Ending balance
Ⅳ Book value
1. Ending book value	42,880,277	85,415,043	509,395	128,804,715
2. Beginning book value	50,894,577	88,313,388	679,194	139,887,159

7.15 Intangible assets

7.15.1 Particulars of intangible assets

Unit: Yuan

Item	Land use right	Software use right	Trademark	Total
Ⅰ Original book value
1. Beginning balance	475,770,881	101,979,429	189,575,068	767,325,378
2. Increase in this period		885,077	198,448	1,083,525
2.1 Acquisition		885,077	198,448	1,083,525
2.2 Internal R&D
2.3 Business merger increase
3. Decrease in this period	26,611,363	289,000		26,900,363
3.1 Disposal
3.2 Others	26,611,363	289,000		26,900,363
4. Ending balance	449,159,518	102,575,506	189,773,516	741,508,540
Ⅱ Accumulated amortization

Item	Land use right	Software use right	Trademark	Total
1. Beginning balance	110,698,068	62,835,583	15,550,881	189,084,532
2. Increase in this period	4,749,952	3,965,405	220,979	8,936,336
2.1 Accrual	4,749,952	3,965,405	220,979	8,936,336
3. Decrease in this period	7,718,585	289,000		8,007,585
3.1 Disposal
3.2 Others	7,718,585	289,000		8,007,585
4. Ending balance	107,729,435	66,511,988	15,771,860	190,013,283
Ⅲ Impairment provision
1. Beginning balance
2. Increase in this period
2.1 Accrual
3. Decrease in this period
3.1 Disposal
3.2 Others
4. Ending balance
Ⅳ Book value
1. Ending book value	341,430,083	36,063,518	174,001,656	551,495,257
2. Beginning book value	365,072,813	39,143,846	174,024,187	578,240,846

As at June 30, 2023, the net value of the intangible assets with ownership restrictions wasRMB 166,920,626 Yuan (December 31, 2022: RMB 169,385,254 Yuan). Please refer to Note

7.53 for details.

The Company’s disposal of the subsidiary Xinjiang Tianzhu this year was not included in thescope of the consolidated balance sheet at the end of this period. As of the date of loss ofcontrol, the original book value and accumulated depreciation of intangible assets of XinjiangTianzhu are respectively listed in the “Others” item of the current decrease in the originalbook value and accumulated depreciation of intangible assets.

7.15.2 Particulars of land use right of that not receiving the property certificate

Nil

7.16 Goodwill

7.16.1 Original book value of goodwill

Unit: Yuan

Name of the invested unit or matter forming goodwill	Beginning balance	Increase in this period		Decrease in this period		Ending balance
		Formed by business merger	Other	Disposal	Other
Etablissements Roullet Fransac (“Roullet Fransac”)	13,112,525					13,112,525
Dicot Partners, S.L (“Atrio Group”)	92,391,901					92,391,901
Indomita Wine Company Chile, SpA	6,870,115					6,870,115
Kilikanoon Estate, Australia	37,063,130					37,063,130
Total	149,437,671					149,437,671

7.16.2 Provision for impairment of goodwill

Unit: Yuan

Name of the invested unit or matter forming goodwill	Beginning balance	Increase in this period		Decrease in this period		Ending balance
		Formed by business merger	Other	Disposal	Other
Etablissements Roullet Fransac (“Roullet Fransac”)
Dicot Partners, S.L (“Atrio Group”)	5,210,925					5,210,925
Indomita Wine Company Chile, SpA
Kilikanoon Estate, Australia	37,063,130					37,063,130
Total	42,274,055					42,274,055

7.17 Long-term unamortized expenses

Unit: Yuan

Item	Beginning balance	Increase in this period	Amortization in this period	Other decrease	Ending balance
Land acquisition fees	45,043,781		736,215		44,307,566
Afforestation fees	118,996,004		4,340,459		114,655,545
Renovation costs	103,895,364		3,431,789		100,463,575
Other	6,764,083	163,971	571,312		6,356,742
Total	274,699,232	163,971	9,079,775		265,783,428

7.18 Deferred income tax assets/liabilities

7.18.1 Un-offset deferred income tax assets

Unit: Yuan

Item	Ending Balance		Beginning Balance
	Deductible temporary difference	Deferred income tax assets	Deductible temporary difference	Deferred income tax assets
Asset impairment provision	30,271,356	7,692,955	31,605,614	8,024,903
Unrealized profits from inter-company transactions	320,491,415	80,122,854	431,328,252	107,832,063
Deductible loss	375,497,265	89,476,843	285,560,642	67,483,931
Unpaid bonus	113,790,791	28,447,698	132,673,269	33,168,317
Dismission welfare	6,441,635	1,610,409	9,422,154	2,355,538
Deferred income	34,530,599	7,449,099	38,389,058	8,288,411
Others	1,383,154	345,788	837,972	209,493
Total	882,406,215	215,145,646	929,816,961	227,362,656

7.18.2 Un-offset deferred income tax liabilities

Unit: Yuan

Item	Ending Balance		Beginning Balance
	Taxable temporary difference	Deferred income tax liabilities	Taxable temporary difference	Deferred income tax liabilities
Assets appraisal appreciation in business merger under non-common control	27,765,399	8,039,285	43,651,105	10,577,065
Others	3,579,479	894,870	2,759,468	689,867
Total	31,344,878	8,934,155	46,410,573	11,266,932

7.18.3 Details of unconfirmed deferred income tax assets

Unit: Yuan

Item	Ending balance	Beginning balance
Deductable temporary difference
Deductible loss	380,781,818	352,775,161
Total	380,781,818	352,775,161

7.18.4 Deductible losses of unconfirmed deferred income tax assets will expire in:

Unit: Yuan

Year	Ending sum	Beginning sum	Remark
2023	22,801,737	22,801,737
2024	42,088,453	42,088,453
2025	75,724,538	75,724,538
2026	72,197,891	72,197,891
2027	139,962,542	139,962,542
2028	28,006,657
Total	380,781,818	352,775,161	--

7.19 Short-term loans

7.19.1 Classification of short-term loans

Unit: Yuan

Item	Ending balance	Beginning balance
Mortgage loan	232,810,003	127,908,137
Guaranteed loan	16,000,831	33,603,541
Fiduciary loan	100,075,000	227,866,802
Total	348,885,834	389,378,480

As at June 30, 2023, EUR mortgage loan was EUR 16,734,045 (equivalent of RMB131,816,526 Yuan) (December 31, 2022: EUR 8,080,778, equivalent of RMB 59,982,807Yuan) of accounts receivable factoring business handled by Hacienday Vi?edos Marques delAtrio, S.L.U (“Atrio”) with banks including Banco de Sabadell, S.A.

As at June 30, 2023, USD mortgage loan was USD 13,625,000 (equivalent of RMB98,541,259 Yuan) (December 31, 2022: USD 9,750,000, equivalent of RMB 67,925,330

Yuan) of loans borrowed by Chile Indomita Wine Group from Banco Scotiabank with thefixed assets as collateral.

On June 30, 2023, AUD guaranteed loan was AUD 3,334,062 (equivalent of RMB16,000,831 Yuan) (December 31, 2022: AUD 7,128,758, equivalent of RMB 33,603,541Yuan) borrowed by Australia Kilikanoon Estate from ANZ Bank, and it is guaranteed by thisCompany.The balance includes 2,527,218 of interest due。

7.20 Accounts payable

7.20.1 List of accounts payable

Unit: Yuan

Item	Ending balance	Beginning balance
Accounts payable for materials, etc.	417,210,497	503,323,746
Total	417,210,497	503,323,746

7.20.2 Explanation of significant accounts payable aged more than one year

Item	Ending balance	Reasons for outstanding or carryover
Unit 1	19,434,600	Payment for parent company
Unit 2	8,073,630	Overseas raw wine suppliers offer a credit period exceeding one year
Total	27,508,230

7.21 Contract liabilities

Unit: Yuan

Item	Ending balance	Beginning balance
Advances from customers	135,643,228	164,437,033
Withholding of goods with sales rebate		1,290,958
Total	135,643,228	165,727,991

7.22 Employee remunerations payable

7.22.1 List of employee remunerations payable

Unit: Yuan

Item	Beginning balance	Increase in this period	Decrease in this period	Ending balance
1. Short-term remuneration	173,197,491	166,002,478	210,292,353	128,907,616
2. Post-employment welfare – defined contribution plan	331,893	27,094,268	27,406,641	19,520
3. Dismission welfare	9,422,154	1,099,333	4,079,852	6,441,635
4.Other welfare due within one year
Total	182,951,538	194,196,079	241,778,846	135,368,771

7.22.2 List of short-term remunerations

Unit: Yuan

Item	Beginning balance	Increase in this period	Decrease in this period	Ending balance
1. Salaries, bonuses, allowances and subsidies	169,643,402	141,156,089	185,471,062	125,328,429
2. Staff welfare	1,460,170	8,240,037	7,894,606	1,805,601
3. Social insurance charges	307,244	8,158,059	8,401,035	64,268
Including: Medical insurance	307,244	7,329,679	7,572,817	64,106
Injury insurance		826,682	826,520	162
Maternity insurance		1,698	1,698
4. Housing fund	38,582	6,402,542	6,394,122	47,002
5. Union fee and staff education fee	1,748,093	2,045,751	2,131,528	1,662,316
6. Short-term compensated absences
7. Short-term profit-sharing plan
Minus: Those divided into non-current liabilities
Total	173,197,491	166,002,478	210,292,353	128,907,616

7.22.3 List of defined contribution plan

Unit: Yuan

Item	Beginning balance	Increase	Decrease	Ending balance
1. Basic endowment insurance	330,660	26,420,976	26,732,216	19,420
2. Unemployment insurance	1,233	673,292	674,425	100
3. Enterprise annuity payment
Total	331,893	27,094,268	27,406,641	19,520

7.22.4 Dismission welfare

Unit: Yuan

Item	Beginning balance	Increase	Decrease	Ending balance
1. Compensation for server of labor relation
2. Compensation for early retirement	9,422,154	1,099,333	4,079,852	6,441,635
Total	9,422,154	1,099,333	4,079,852	6,441,635

7.23 Taxes and dues payable

Unit: Yuan

Item	Ending balance	Beginning balance
Value added tax	26,000,422	42,260,465
Consumption tax	24,511,397	45,524,174
Corporate income tax	134,483,218	131,264,991
Individual income tax	911,690	1,199,990
Urban maintenance and construction tax	3,010,065	1,899,840
Education surcharges	2,217,847	2,731,857
Urban land use tax	2,270,059	6,168,990

Other	9,059,128	8,645,595
Total	202,463,826	239,695,902

7.24 Other payables

Unit: Yuan

Item	Ending balance	Beginning balance
Interest payable		88,889
Dividends payable	393,855	70,317
Other payables	373,351,763	372,449,483
Total	373,745,618	372,608,689

7.24.1 Interest payable

Unit: Yuan

Item	Ending balance	Beginning balance
Interest of long-term loans with interest paid by installment and principal paid on maturity
Interest of corporate bonds
Interest payable of short-term loans		88,889
Interest of preferred shares\ perpetual bonds divided into financial liabilities
Other
Total		88,889

7.24.2 Dividends payable

Unit: Yuan

Item	Ending balance	Beginning balance
Ordinary stock dividends
Preferred stock dividends/sustainable debt dividends divided into equity instruments
Other	393,855	70,317
Total	393,855	70,317

7.24.3 Other payables

7.24.3.1 Other payables listed by nature

Unit: Yuan

Item	Ending balance	Beginning balance
Dealer’s deposit payable	197,378,796	207,492,570
Equipment purchase and construction costs payable	16,165,461	15,976,573
Transportation charges payable	12,339,582	25,894,816
Advertisement expenses payable	40,562,800	40,244,601
Employee cash deposit	508,175	508,175
Supplier’s deposit payable	14,919,515	13,549,010
Contracting fees payable	4,340,562	7,407,093

Other	87,136,872	61,376,645
Total	373,351,763	372,449,483

7.24.3.2 Explanation of significant accounts payable aged more than one yearAs at June 30, 2023, there were no significant accounts payable aged more than one year.

7.25 Non-current liabilities due within one year

Unit: Yuan

Item	Ending balance	Beginning balance
Long-term loans due within one year	98,331,009	103,011,894
Bonds payable due within one year
Long-term accounts payable due within one year	22,000,000	22,000,000
Lease liabilities due within one year	23,433,390	19,008,940
Total	143,764,399	144,020,834

7.26 Other current liabilities

Item	Ending balance	Beginning balance
Unamortized VAT amount	16,989,679	18,945,706
Accrued interest on long-term loans	697,977
Total	17,687,656	18,945,706

7.27 Long-term loans

7.27.1 Classification of long-term loans

Unit: Yuan

Item	Ending balance	Beginning balance
Guaranteed loan	45,437,416	44,781,100
Fiduciary loan	134,854,819	186,342,909
Minus: Long-term loans due within one year	98,331,009	103,011,894
Total	81,961,226	128,112,115

As at June 30, 2023, fiduciary loans (EUR) were EUR 17,119,567 (equivalent of RMB134,854,819 Yuan) (December 31, 2022: EUR 25,103,788, equivalent of RMB 186,342,909Yuan) borrowed by Atrio from Banco Sabadell, Bankia, Banco Santander, BBVA and CajaRural de Navarr etc. Guaranteed loans (AUD) were AUD 9,500,000 (equivalent of RMB45,437,416 Yuan) (December 31, 2022: AUD 9,500,000, equivalent of RMB 44,781,100Yuan) borrowed by Australia Kilikanoon Estate from ANZ Bank and it is guaranteed by thisCompany.

7.28 Lease Liabilities

Unit: Yuan

Item	Ending balance	Beginning balance
Long-term lease liabilities	117,902,746	128,514,033

Minus: Lease liabilities due within one year	23,433,390	19,008,940
Total	94,469,356	109,505,093

7.29 Long-term accounts payable

Unit: Yuan

Item	Ending balance	Beginning balance
Long-term accounts payable	20,000,000	42,000,000
Special accounts payable
Total	20,000,000	42,000,000

7.29.1 Long-term accounts payable listed by nature

Unit: Yuan

Item	Ending balance	Beginning balance
Agricultural Development Fund of China (“CADF”)	42,000,000	64,000,000
Minus: Long-term payables due within one year	22,000,000	22,000,000
Balance of long-term payables	20,000,000	42,000,000

In 2016, Agricultural Development Fund invested RMB 305,000,000 Yuan in the Research,Development & Manufacture Company, accounting for 37.9% of the registered capital.According to the investment agreement, it is agreed that Agricultural Development Fund willtake back the investment fund in ten years and obtain fixed income according to year, whichis 1.2% of the remaining principal. Except for the above fixed income, the AgriculturalDevelopment Fund shall not enjoy other profits of the Research, Development & ManufactureCompany or bear the losses of the Research, Development & Manufacture Company.Accordingly, the investment of the Agricultural Development Fund in the Research,Development & Manufacture Company is equity investment nominally, which is debtinvestment (finance discount interest loan) in deed. The Group included the investment of theAgricultural Development Fund in long-term accounts payable measured by amortized cost.From January to June 2023, the Group gave back the principal of RMB 22,000,000 Yuan.Refer to Note 7.53 for details of mortgaged and pledged assets.

7.30 Deferred income

Unit: Yuan

Item	Beginning balance	Increase in this period	Decrease in this period	Ending balance	Forming reason
Governmental subsidy	41,295,338		4,510,491	36,784,847
Total	41,295,338		4,510,491	36,784,847	--

Projects related to governmental subsidy

Unit: Yuan

Item of liabilities	Beginning balance	Amount of subsidy newly increased in this period	Amount included in non-operating revenue in this period	Amount included in other income in this period	Amount offset the cost expenses	Other changes	Ending balance	Related to assets/ income
Industrial development	16,400,000			2,050,000			14,350,000	Related to

Item of liabilities	Beginning balance	Amount of subsidy newly increased in this period	Amount included in non-operating revenue in this period	Amount included in other income in this period	Amount offset the cost expenses	Other changes	Ending balance	Related to assets/ income
supporting funds								assets
Xinjiang industrial revitalisation and technological transformation project	9,954,000			711,000			9,243,000	Related to assets
Subsidy for retaining wall	5,973,333			319,000			5,654,333	Related to assets
Special funds for cellar maintenance	2,079,711						2,079,711	Related to assets
Wine fermentation capacity construction (Huanren) project	1,600,000			200,000			1,400,000	Related to assets
Special funds for efficient water-saving irrigation project	991,000			81,000			910,000	Related to assets
Information-based system construction engineering technical transformation project	580,000			290,000			290,000	Related to assets
Subsidy for economic and energy-saving technological transformation projects	513,200			64,150			449,050	Related to assets
Subsidy for mechanic development of Penglai Daliuhang Base	90,408			67,590			22,818	Related to assets
Special fund for Yantai City Innovation Driven Development	172,406			68,219			104,187	Related to income
Prize for Yantai Mayor’s Cup Industrial Design Competition	35,000			7,500			27,500	Related to income
Total	38,389,058			3,858,459			34,530,599

7.31 Share capital

Unit: Yuan

	Beginning balance	Increase or decrease (+,-) in this period					Ending balance
		Newly issued shares	Allocated shares	Share transferred from accumulation fund	Other	Subtotal
Total shares	685,464,000						685,464,000

7.32 Capital reserves

Unit: Yuan

Item	Beginning balance	Increase in this period	Decrease in this period	Ending balance
Capital premium (Share capital premium)	519,052,172		1,091,508	517,960,664
Other capital reserves	5,916,588	671,300		6,587,888
Total	524,968,760	671,300	1,091,508	524,548,552

The decrease in capital premium of 1,091,508 Yuan in this period is due to the acquisition ofminority shareholders’ equity; and the increase in other capital reserves of 671,300 Yuan inthis period is due to the recognition of share-based payments.

7.33 Other comprehensive income

Unit: Yuan

Item	Beginning balance	Amount incurred in this period						Ending balance
		Amount incurred before income tax in this period	Minus: amount included in other comprehensive income before and transferred to profit or loss in this period	Minus: amount included in other comprehensive income before and transferred to retained earnings in this period	Minus: income tax expenses	Attributable to parent company after tax	Attributable to minority shareholders after tax
1. Other comprehensive income not to be reclassified into profit and loss later
Including: Changes after remeasuring and resetting the benefit plans
Other comprehensive income not to be reclassified into profit and loss under equity method
Changes in the fair value of other investments in equity instruments
Changes in the fair value of the enterprise’s own credit risk
2. Other comprehensive income to be reclassified into profit and loss later	-23,760,238	13,707,142				12,136,065	1,571,077	-11,624,173
Including: Other comprehensive income to be reclassified into profit and loss under equity method
Changes in the fair value of other debt investments
Amount of financial assets reclassified into other comprehensive income
Provision for credit impairment of other credit investments
Provision for cash-flow hedge
Difference in translation of Foreign Currency Financial Statement	-23,760,238	13,707,142				12,136,065	1,571,077	-11,624,173
Total other comprehensive income	-23,760,238	13,707,142				12,136,065	1,571,077	-11,624,173

7.34 Surplus reserves

Unit: Yuan

Item	Beginning balance	Increase in this period	Decrease in this period	Ending balance
Legal surplus reserves	342,732,000			342,732,000
Free surplus reserves
Reserve fund
Enterprise expansion fund
Other
Total	342,732,000			342,732,000

7.35 Undistributed profit

Unit: Yuan

Item	Ending balance	Beginning balance
Undistributed profit at the end of prior period before adjustment	9,049,649,211	8,929,426,600
Total Undistributed profit at the beginning of the period before adjustment (increase listed with+ , and decrease listed with -)
Undistributed profit at the beginning of the period after adjustment	9,049,649,211	8,929,426,600
Plus: Net profit for owner of the parent company	363,569,436	428,681,411
Minus: Drawn legal surplus
Drawn free surplus
Drawn common risk provision
Common dividend payable	308,458,800	308,458,800
Common dividend transferred to share capital
Undistributed profit at the end of period	9,104,759,847	9,049,649,211

7.36 Operating income and operating cost

7.36.1 Details of operating income

Unit: Yuan

Item	Amount incurred in this period		Amount incurred in prior period
	Income	Cost	Income	Cost
Main business	1,934,472,124	796,260,619	1,929,907,550	817,568,906
Other business	32,266,361	9,198,773	23,184,585	4,286,560
Total	1,966,738,485	805,459,392	1,953,092,135	821,855,466
Including: Income from contracts	1,965,668,542	804,756,028	1,952,022,192	821,152,102
Income from house rents	1,069,943	703,364	1,069,943	703,364

7.36.2 Situation of income from contracts

Unit: Yuan

Contract classification	Amount incurred in this period
Type of merchandise
- Alcoholic beverage	1,934,472,124
- Others	31,196,418
Classified by the time of merchandise transfer
- Revenue recognized at a point in time	1,965,668,542

7.37 Taxes and surcharges

Unit: Yuan

Item	Amount incurred in this period	Amount incurred in prior period
Consumption tax	83,799,789	75,570,111
Urban maintenance and construction tax	13,221,014	11,339,556
Education surcharges	9,591,885	8,217,554
Building tax	17,081,105	13,700,072
Land use tax	5,443,389	5,662,279
Vehicle and vessel use tax	13,298	16,152
Stamp duty	2,190,579	155,653
Other	106,007	78,241
Total	131,447,066	114,739,618

7.38 Selling expenses

Unit: Yuan

Item	Amount incurred in this period	Amount incurred in prior period
Salary and welfare expenses	133,331,239	129,577,551
Marketing expenses	150,784,963	131,324,948
Labor expenses	18,891,110	18,445,967
Depreciation expenses	31,599,626	29,955,199
Storage expenses	13,287,122	13,459,898
Advertisement expenses	25,707,453	24,366,253
Trademark use fees	11,320,305	10,512,100
Travel expenses	12,462,566	9,343,468
Design & production expenses	9,833,969	9,037,718
Conference expenses	4,528,120	3,106,738
Water, electricity and gas charges	4,658,860	5,393,494
Other	36,596,377	33,241,085
Total	453,001,710	417,764,419

7.39 Management expenses

Unit: Yuan

Item	Amount incurred in this period	Amount incurred in prior period
Employee remunerations	30,200,207	32,561,222
Depreciation expenses	50,660,829	39,755,608
Contracting expenses	2,119,800	2,119,800
Repair expenses	1,865,967	6,115,206
Office expenses	10,169,392	10,774,571
Amortization expenses	8,377,335	9,457,449
Afforestation fees	6,950,800	6,811,054
Safe production costs	3,124,162	5,358,613
Business entertainment expenses	1,373,098	1,498,647
Public security & clean-keeping expenses	3,539,193	3,385,138
Travel expenses	1,235,690	832,989
Other	9,078,922	8,833,973
Total	128,695,395	127,504,270

7.40 R&D expenses

Unit: Yuan

Item	Amount incurred in this period	Amount incurred in prior period
R&D expenses	6,653,626	5,509,656
Total	6,653,626	5,509,656

7.41 Financial expenses

Unit: Yuan

Item	Amount incurred in this period	Amount incurred in prior period
Interest expenditure	12,325,532	11,201,775
Minus: Interest income	9,060,578	10,191,697
Plus: Commission charges	662,758	701,200
Exchange gain or loss	-701,279	4,374,160
Total	3,226,433	6,085,438

7.42 Other income

Unit: Yuan

Source of other income	Amount incurred in this period	Amount incurred in prior period
Industrial development supporting funds	2,050,000	2,050,000
Wine fermentation capacity construction (Huanren) project	200,000	200,000
Xinjiang industrial revitalization and technological transformation project	711,000	711,000

Source of other income	Amount incurred in this period	Amount incurred in prior period
Special subsidy for supporting infrastructure		530,000
Other – related to assets	821,740	931,913
Special funds for supporting corporate development	14,840,000	8,222,076
Other – related to income	10,348,445	8,984,256
Total	28,971,185	21,629,245

7.43 Investment income

Unit: Yuan

Item	Amount incurred in this period	Amount incurred in prior period
Investment income from long-term equity by equity method	-932,588	-921,317
Investment income from disposal of long-term equity	16,547,124
Investment income gained from trading financial assets during the holding period
Investment income gained from disposal of trading financial assets
Dividend income gained from other equity instruments during the holding period
Gains generated from the remaining equity remeasured as per fair value after the loss of control
Interest income gained from equity inverstment during the holding period
Interest income gained from other equity inverstments during the holding period
Investment income gained from disposal of other equity inverstments
Total	15,614,536	-921,317

7.44 Loss on impairment of credit

Unit: Yuan

Item	Amount incurred in this period	Amount incurred in prior period
Loss on bad debts of accounts receivable	-993,494	486,076
Total	-993,494	486,076

7.45 Loss on impairment of assets

Unit: Yuan

Item	Amount incurred in this period	Amount incurred in prior period
1. Loss on bad debts
2. Inventory falling price loss and loss on impairment of contrct execution cost	-244,434	1,490,900
3. Loss on impairment of long-term equity investment
4. Loss on impairment of investment real estate
5. Loss on impairment of fixed assets
6. Loss on impairment of engineering materials
7. Loss on impairment of construction in progress
8. Loss on impairment of productive biological

Item	Amount incurred in this period	Amount incurred in prior period
assets
9. Loss on impairment of oil and gas assets
10. Loss on impairment of intangible assets
11. Loss on impairment of goodwill
12. Loss on impairment of contract assets
13. Other
Total	-244,434	1,490,900

7.46 Income from asset disposal

Unit: Yuan

Source of income from asset disposal	Amount incurred in this period	Amount incurred in prior period
Income from disposal of fixed assets	341,232	-8,239,072
Income from productive biological assets	-639,633
Total	-298,401	-8,239,072

7.47 Non-operating income

Unit: Yuan

Item	Amount incurred in this period	Amount incurred in prior period	Amount included in the current non-recurring profits/losses
Gains on exchange of non-monetary assets
Grains on donations
Governmental subsidy
Gains on scrap of non-current assets		9,800
Others	1,772,522	2,438,813	1,772,522
Total	1,772,522	2,448,613	1,772,522

7.48 Non-operating expenses

Unit: Yuan

Item	Amount incurred in this period	Amount incurred in prior period	Amount included in the current non-recurring profits/losses
Loss on exchange of non-monetary assets
Donation	900,000	310,000	900,000
Loss on scrap of non-current assets	20,717	139,401	20,717
Fine, penalty and overdue fine paid due to violation of laws and administrative regulations	104,298	579,688	104,298
Others	1,100,930	314,443	1,100,930
Total	2,125,945	1,343,532	2,125,945

7.49 Income tax expenses

7.49.1 List of income tax expenses

Unit: Yuan

Item

Amount incurred in this period

Amount incurred in prior period

Current income tax expenses	120,466,280	73,145,468
Deferred income tax expenses	9,884,233	55,044,281
Total	130,350,513	128,189,749

7.49.2 Adjustment process of accounting profit and income tax expenses

Unit: Yuan

Item	Amount incurred in this period
Total profit	480,950,832
Income tax expenses calculated according to the legal/applicable tax rate	120,237,708
Influence of different tax rates applicable to subsidiary	403,016
Influence of income tax in the term before adjustment	2,828,018
Influence of nontaxable income
Influence of non-deductible costs, expenses and losses	851,758
Influence of deductible loss from use of unconfirmed deferred income tax assets in prior period	-824,102
Influence of deductible temporary difference or deductible loss of unconfirmed deferred income tax assets in this period	6,854,115
Income tax expense	130,350,513

7.50 Other comprehensive incomes

Refer to Note 7.33 for details.

7.51 Items of cash flow statement

7.51.1 Other cash received related to operating activities

Unit: Yuan

Item	Amount incurred in this period	Amount incurred in prior period
Governmental subsidy income	24,849,782	17,118,754
Interest income	8,892,658	9,195,398
Net amercement income	254,866	276,749
Others	13,253,796	3,545,416
Total	47,251,102	30,136,317

7.51.2 Other cash paid related to operating activities

Unit: Yuan

Item	Amount incurred in this period	Amount incurred in prior period
Selling expenses	242,901,628	232,451,841
Administrative expenses	41,163,720	45,725,346
Others	8,743,269	12,916,682
Total	292,808,617	291,093,869

7.51.3 Other cash received related to investing activities

Unit: Yuan

Item

Amount incurred in this period

Amount incurred in prior period

Net cash received from acquiring subsidiaries	657,049
Total	657,049

7.51.4 Other cash paid related to financing activities

Unit: Yuan

Item	Amount incurred in this period	Amount incurred in prior period
Cash paid for leasing	11,384,300	9,765,810
Cash paid for acquiring minority shareholders’ equity	14,623,400
Capital reduction paid to minority shareholders	12,000,000
Total	38,007,700	9,765,810

7.52 Supplementary information to cash flow statement

7.52.1 Supplementary information to cash flow statement

Unit: Yuan

Supplementary materials	Amount incurred in this period	Amount incurred in prior period
1. Cash flows from operating activities calculated by adjusting the net profit:	--	--
Net profit	350,600,319	346,994,432
Plus: Provision for impairment of assets	1,237,928	-1,976,976
Depreciation of fixed assets, oil-and-gas assets and productive biological assets	164,005,102	157,778,809
Depreciation of right-of-use assets	11,082,444	11,051,483
Amortization of intangible assets	8,936,336	10,000,383
Amortization of long-term deferred expenses	9,079,775	9,845,289
Losses on disposal of fixed assets, intangible assets and other long-term assets (profit listed with “-”)	298,401	8,239,072
Losses on retirement of fixed assets (profit listed with “-”)	20,717	129,601
Losses on fair value change (profit listed with “-”)
Financial costs (profit listed with “-”)	10,419,504	9,960,206
Investment losses (profit listed with “-”)	-15,614,536	921,317
Decrease in deferred income tax assets (increase listed with “-”)	12,217,010	55,773,513
Increase of deferred income tax liabilities (decrease listed with “-”)	-2,332,777	-729,232
Decrease in inventories (increase listed with “-”)	-22,578,567	-29,711,487
Decrease in operating receivables (increase listed with “-”)	217,964,425	389,398,124
Increase in operating payable (decrease listed with “-”)	-218,087,595	-361,400,939
Other	671,300
Net cash flows from operating activities	527,919,786	606,273,595
2. Significant investment and financing activities not involving cash deposit and withdrawal:
Debt transferred into assets
Convertible corporate bond due within 1 year
Fixed assets under financing lease

Supplementary materials	Amount incurred in this period	Amount incurred in prior period
3. Net changes of cash and cash equivalent:
Ending balance of cash	1,423,080,779	1,839,856,934
Minus: Beginning balance of cash	1,612,753,600	1,502,327,029
Plus: Ending balance of cash equivalent
Minus: Beginning balance of cash equivalent
Net increase amount of cash and cash equivalent	-189,672,821	337,529,905

7.52.2 Net cash paid for acquiring subsidiaries in this period

Unit: Yuan

	Amount
Cash and cash equivalents paid in this period for business combinations incurred in this period	5,537,700
Including:
Weimeisi Shanghai	5,537,700
Minus: Cash and cash equivalents held by the subsidiary on acquisition date	6,194,749
Including:
Weimeisi Shanghai	6,194,749
Plus: Cash and cash equivalents paid in this period for business combinations incurred in previous period
Including:
Net cash paid for acquiring subsidiaries	-657,049

7.52.3 Net cash received from disposal of subsidiaries in this period

Unit: Yuan

	Amount
Cash and cash equivalents received in this period from disposal of subsidiaries in this period	9,690,000
Including:
Xinjiang Tianzhu	9,690,000
Minus: Cash and cash equivalents held by the subsidiary on the date of loss of control	2,451,415
Including:
Xinjiang Tianzhu	2,451,415
Plus: Cash and cash equivalents received in this period from disposal of subsidiaries in previous period
Including:
Net cash received from disposing subsidiaries	7,238,585

7.52.4 Composition of cash and cash equivalents

Unit: Yuan

Item	Ending balance	Beginning balance
1. Cash	1,423,080,779	1,612,753,600

Item	Ending balance	Beginning balance
Including: Cash on hand	59,243	47,954
Bank deposits available for payment at any time	1,423,021,536	1,612,705,646
Other monetary funds available for payment at any time
Deposits with central bank available for payment
2. Cash equivalents
Including: Bond investment due within three months
3. Balance of cash and cash equivalents at the end of period	1,423,080,779	1,612,753,600

7.53 Assets with ownership or use right restrictions

Unit: Yuan

Item	Ending book value	Reason for restriction
Monetary capital	9,788,446	L/C deposit, housing fund, etc.
Accounts receivable	64,860,399	Pledge of short-term loans
Fixed assets	294,202,438	Pledge of short-term loans, long-term loans and long-term accounts payable
Intangible assets	166,920,626	Pledge of long-term accounts payable
Total	535,771,909	--

7.54 Monetary items of foreign currency

7.54.1 Monetary items of foreign currency

Item	Ending balance at foreign currency	Converted exchange rate	Ending balance at RMB equivalent
Monetary capital	--	--	3,246,928
Including: USD	449,279	7.2258	3,246,400
EUR	67	7.8771	528
HKD
Accounts receivable	--	--	50,452,445
Including: USD	5,819,882	7.2258	42,053,303
EUR	303,383	7.8771	2,389,778
CAD	1,107	5.4721	6,058
GBP	656,587	9.1432	6,003,306
Short-term borrowing	--	--	98,451,525
Including: USD	13,625,000	7.2258	98,451,525
EUR
HKD
	--	--

7.54.2 The Company’s overseas subsidiaries determine their functional currency based on thecurrency in the main economic environment in which they operate. The functional currency ofAtrio and Francs Champs Participations SAS (“Farshang Holdings”) is Euro, the functional

currency of Chile Indomita Wine Group is Chilean Peso, and the functional currency ofAustralia Kilikanoon Estate is Australian Dollar.

8. Change of scope of consolidation

8.1 Business combination under non-common control

8.1.1 Business combination under non-common control incurred in this period

Unit: Yuan

Name of acquired party	Date of obtaining equity	Cost of obtaining equity	Proportion of obtaining equity	Method of obtaining equity	Acquisition date	Basis for determining acquisition date	Income of acquired party from acquisition date to the end of the period	Net profit of acquired party from acquisition date to the end of the period
Weimeisi Shanghai	February 1, 2023	5,537,000	70%	Cash	February 1, 2023	Actual control		-3,000

8.1.2 Combination cost and goodwill

Unit: Yuan

Combination cost	Amount
--Cash	5,537,700
--Fair value of non-cash assets
--Fair value of liabilities issued or undertaken
--Fair value of equity securities issued
--Fair value of contingent consideration
--Fair value of equity held before acquisition date on acquisition date	2,373,285
--Others
Total combination cost	7,910,985
Minus: Fair value share of identifiable net assets acquired	7,910,985
Amount of goodwill/combination cost less than the fair value share of identifiable net assets acquired

8.1.3 Identifiable assets and liabilities of acquired party on acquisition date

Unit: Yuan

Items	Fair value on acquisition date	Book value on acquisition date
Assets:
Monetary capital	6,390,637	6,390,637
Accounts receivables	44,357	44,357
Inventories	1,356,577	1,356,577
Fixed assets
Intangible assets
Other current assets	124,023

Items	Fair value on acquisition date	Book value on acquisition date
Liabilities:
Borrowings
Accounts payable	4,609	4,609
Deferred income tax liabilities
Net assets	7,910,985	7,910,985
Minus: Minority shareholders’ equity
Net assets acquired	7,910,985	7,910,985

8.1.4 Gains or losses arising from remeasuring equity held before acquisition date at fairvalue

Unit: Yuan

Name of acquired party	Book value of equity originally held before acquisition date on acquisition date	Fair value of equity originally held before acquisition date on acquisition date	Gains or losses arising from remeasuring equity originally held before acquisition date at fair value	Determination method and main assumptions of fair value of equity originally held before acquisition date on acquisition date	Amount transferred from other comprehensive incomes related to equity originally held before acquisition date to investment income
Weimeisi Shanghai	2,373,285	2,373,285

8.2 Disposal of subsidiaries

Unit: Yuan

Name of subsidiary

Price of equity disposal

Proportion of equity disposal

Method of equity disposal

Date of loss of control

Basis for determining date of loss of control

Difference between disposal price and consolidated financial statement level share of the subsidiary’s net assets corresponding to disposal investment

Proportion of remaining equity on the date of loss of control

Book value of remaining equity on the date of loss of control

Fair value of remaining equity on the date of loss of control

Gains or losses arising from remeasuring remaining equity at fair value

Determination method and main assumptions of fair value of remaining equity on the date of loss of control

Amount transferred from other comprehensive incomes related to investment of original subsidiary equity to investment profits and loss

Xinjiang Tianzhu

12,090,000

100%

Transfer

June 30, 2023

Transfer of control

16,547,124

9. Equity in other entities

9.1 Equity in subsidiaries

9.1.1 Constitution of enterprise group

Name of subsidiary	Principal business location	Registration place	Business nature	Proportion of shareholding		Acquisition mode
				Direct	Indirect
Etablissements Roullet Fransac (“Roullet Fransac”)	Cognac, France	Cognac, France	Trading		100%	Acquired from a business combination under non-common control
Dicot Partners, S.L (“Dicot”)	Navarre, Spain	Navarre, Spain	Sales	90%		Acquired from a business combination under non-common control
Vi?a Indómita,S.A.,Vi?a Dos Andes,S.A., and Bodegas Santa Alicia SpA. (“Chile Indomita Wine Group”)	Santiago, Chile	Santiago, Chile	Sales	85%		Acquired by establishment or investment
Kilikanoon Estate Pty Ltd (“Australia Kilikanoon Estate”)	Adelaide, Australia	Adelaide, Australia	Sales	97.5%		Acquired from a business combination under non-common control
Beijing Changyu Sales and Distribution Co., Ltd. (“Beijing Sales”)	Beijing, China	Beijing, China	Sales	100%		Acquired by establishment or investment
Yantai Kylin Packaging Co., Ltd. (“Kylin Packaging”)	Yantai, Shandong, China	Yantai, Shandong, China	Manufacturing	100%		Acquired by establishment or investment
Yantai Chateau Changyu-Castel Co., Ltd. (“Chateau Changyu”) (a)	Yantai, Shandong, China	Yantai, Shandong, China	Manufacturing	70%		Acquired by establishment or investment
Changyu (Jingyang) Wine Co., Ltd. (“Jingyang Wine”)	Xianyang, Shaanxi, China	Xianyang, Shaanxi, China	Manufacturing	90%	10%	Acquired by establishment or investment
Yantai Changyu Pioneer Wine Sales Co., Ltd. (“Sales Company”)	Yantai, Shandong, China	Yantai, Shandong, China	Sales	100%		Acquired by establishment or investment
Langfang Development Zone Castel-Changyu Wine Co., Ltd. (“Langfang Castel”)	Langfang, Hebei, China	Langfang, Hebei, China	Manufacturing	39%	10%	Acquired by establishment or investment
Changyu (Jingyang) Wine Sales Co., Ltd. (“Jingyang Sales”)	Xianyang, Shaanxi, China	Xianyang, Shaanxi, China	Sales	10%	90%	Acquired by establishment or investment
Langfang Changyu Pioneer Wine Sales Co., Ltd. (“Langfang Sales”)	Langfang, Hebei, China	Langfang, Hebei, China	Sales	10%	90%	Acquired by establishment or investment
Shanghai Changyu Sales and Distribution Co., Ltd. (“Shanghai Sales”)	Shanghai, China	Shanghai, China	Sales	100%		Acquired by establishment or investment
Beijing Changyu AFIP Agriculture development Co., Ltd. (“Agriculture Development”)	Miyun, Beijing, China	Miyun, Beijing, China	Sales		100%	Acquired by establishment or investment
Beijing Chateau Changyu AFIP Global Co., Ltd. (“AFIP”) (b)	Beijing, China	Beijing, China	Manufacturing	91.53%		Acquired by establishment or investment
Yantai Changyu Wine Sales Co., Ltd. (“Wines Sales”)	Yantai, Shandong, China	Yantai, Shandong, China	Sales	90%	10%	Acquired by establishment or investment
Yantai Changyu Pioneer International Co., Ltd. (“Pioneer International”)	Yantai, Shandong, China	Yantai, Shandong, China	Sales	70%	30%	Acquired by establishment or investment

Name of subsidiary	Principal business location	Registration place	Business nature	Proportion of shareholding		Acquisition mode
				Direct	Indirect
Hangzhou Changyu Wine Sales Co., Ltd. (“Hangzhou Changyu”)	Hangzhou, Zhejiang, China	Hangzhou, Zhejiang, China	Sales		100%	Acquired by establishment or investment
Ningxia Changyu Grape Growing Co., Ltd. (“Ningxia Growing”)	Yinchuan, Ningxia, China	Ningxia, China	Planting	100%		Acquired by establishment or investment
Huanren Changyu National Wines Sales Co., Ltd. (“National Wines”)	Benxi, Liaoning, China	Benxi, Liaoning, China	Sales	100%		Acquired by establishment or investment
Liaoning Changyu Golden Icewine Valley Co., Ltd. (“Golden Icewine Valley”)	Benxi, Liaoning, China	Benxi, Liaoning, China	Manufacturing	100%		Acquired by establishment or investment
Yantai Development Zone Changyu Trading Co., Ltd. (“Development Zone Trading”)	Yantai, Shandong, China	Yantai, Shandong, China	Sales		100%	Acquired by establishment or investment
Beijing AFIP Meeting Center (“Meeting Center”)	Miyun, Beijing, China	Miyun, Beijing, China	Services		100%	Acquired by establishment or investment
Beijing AFIP Tourism and Culture (“AFIP Tourism”)	Miyun, Beijing, China	Miyun, Beijing, China	Tourism		100%	Acquired by establishment or investment
Changyu (Ningxia) Wine Co., Ltd. (“Ningxia Wine”)	Ningxia, China	Ningxia, China	Manufacturing	100%		Acquired by establishment or investment
Yantai Changyu Chateau Tinlot Co., Ltd. (“Chateau Tinlot”)	Yantai, Shandong, China	Yantai, Shandong, China	Wholesale and retail	65%	35%	Acquired by establishment or investment
Xinjiang Chateau Changyu Baron Balboa Co., Ltd. (“Chateau Shihezi”)	Shihezi, Xinjiang, China	Shihezi, Xinjiang, China	Manufacturing	100%		Acquired by establishment or investment
Ningxia Chateau Changyu Longyu Co., Ltd. (“Chateau Ningxia”)	Yinchuan, Ningxia, China	Yinchuan, Ningxia, China	Manufacturing	100%		Acquired by establishment or investment
Shaanxi Chateau Changyu Rena Co., Ltd. (“Chateau Chang’an”)	Xianyang, Shaanxi, China	Xianyang, Shaanxi, China	Manufacturing	100%		Acquired by establishment or investment
Yantai Changyu Wine Research & Development Centre Co., Ltd. (“R&D Centre”) (c)	Yantai, Shandong, China	Yantai, Shandong, China	Manufacturing	92.25%		Acquired by establishment or investment
Changyu (HuanRen) Wine Co., Ltd. (“Huan Ren Wine”)	Benxi, Liaoning, China	Benxi, Liaoning, China	Wine-making project	100%		Acquired by establishment or investment
Xinjiang Changyu Sales Co., Ltd. (“Xinjiang Sales”)	Shihezi, Xinjiang, China	Shihezi, Xinjiang, China	Sales		100%	Acquired by establishment or investment
Ningxia Changyu Trading Co., Ltd. (“Ningxia Trading”)	Yinchuan, Ningxia, China	Yinchuan, Ningxia, China	Sales		100%	Acquired by establishment or investment
Shaanxi Changyu Rena Wine Sales Co., Ltd. (“Shaanxi Sales”)	Xianyang, Shaanxi, China	Xianyang, Shaanxi, China	Sales		100%	Acquired by establishment or investment
Penglai Changyu Wine Sales Co., Ltd. (“Penglai Wine”)	Penglai, Shandong, China	Penglai, Shandong, China	Sales		100%	Acquired by establishment or investment
Laizhou Changyu Wine Sales	Laizhou, Shandong,	Laizhou, Shandong,	Sales		100%	Acquired by establishment

Name of subsidiary	Principal business location	Registration place	Business nature	Proportion of shareholding		Acquisition mode
				Direct	Indirect
Co., Ltd. (“Laizhou Sales”)	China	China				or investment
Francs Champs Participations SAS (“Francs Champs”)	Cognac, France	Cognac, France	Investment and trading	100%		Acquired by establishment or investment
Yantai Roullet Fransac Wine Sales Co., Ltd. (“Yantai Roullet Fransac”)	Yantai, Shandong, China	Yantai, Shandong, China	Sales		100%	Acquired by establishment or investment
Yantai Changyu Wine Sales Co., Ltd. (“Wine Sales Company”)	Yantai, Shandong, China	Yantai, Shandong, China	Sales	100%		Acquired by establishment or investment
Shaanxi Chateau Changyu Rena Tourism Co., Ltd. (“Chateau Tourism”)	Xianxin, Shaanxi, China	Xianxin, Shaanxi, China	Tourism		100%	Acquired by establishment or investment
Longkou Changyu Wine Sales Co., Ltd. (“Longkou Sales”)	Yantai, Shandong, China	Yantai, Shandong, China	Sales		100%	Acquired by establishment or investment
Yantai Changyu Cultural Tourism Development Co., Ltd. (“Changyu Cultural Tourism Company”)	Yantai, Shandong, China	Yantai, Shandong, China	Tourism	100%		Acquired by establishment or investment
Yantai Changyu Wine Culture Museum Co., Ltd. (“Museum”)	Yantai, Shandong, China	Yantai, Shandong, China	Tourism		100%	Acquired by establishment or investment
Yantai Changyu Cultural Tourism Product Sales Co., Ltd. (“Cultural Sales”)	Yantai, Shandong, China	Yantai, Shandong, China	Tourism		100%	Acquired by establishment or investment
Yantai Changyu Window of International Wine City Co. Ltd. (“Window of Wine City”)	Yantai, Shandong, China	Yantai, Shandong, China	Tourism		100%	Acquired by establishment or investment
Yantai Chateau Koya Brandy Co., Ltd. (“Chateau Koya”)	Yantai, Shandong, China	Yantai, Shandong, China	Manufacturing	100%		Acquired by establishment or investment
Changyu (Shanghai) International Digital Marketing Center Co., Ltd. (“Digital Marketing”)	Shanghai, China	Shanghai, China	Sales	100%		Acquired by establishment or investment
Tianjin Changyu Yixin Digital Technology Co., Ltd. (“Tianjin Yixin”)	Tianjin, China	Tianjin, China	Sales		51%	Acquired by establishment or investment
Shanghai Changyu Yixin Digital Technology Co., Ltd. (“Shanghai Yixin”)	Hongkou District, Shanghai, China	Hongkou District, Shanghai, China	Sales		51%	Acquired by establishment or investment
Shanghai Changyu Guoqu Digital Technology Co., Ltd. (“Shanghai Guoqu”)	Shanghai, China	Shanghai, China	Sales		51%	Acquired by establishment or investment
Yantai Christon Catering Co., Ltd. (“Christon Catering”)	Yantai, Shandong, China	Yantai, Shandong, China	Catering		100%	Acquired by establishment or investment
Weimeisi (Shanghai) Enterprise Development Co., Ltd. (“Weimeisi Shanghai”)	Hongkou District, Shanghai, China	Hongkou District, Shanghai, China	Sales		100%	Business combination under non-common control

Explanation for difference between the proportion of shareholding and proportion of voting

power in the subsidiaries:

(a) Chateau Changyu is a Sino-foreign joint venture established by the Group and a foreigninvestor, accounting for 70% of Changyu Chateau’s equity interest. Through agreementarrangement, the Group has the full power to control Changyu Chateau’s strategic operating,investing and financing policies.

(b) AFIP is a limited liability company jointly established by the Group and Yantai De’an andBeijing Qinglang. In June 2019, Yantai Dean transferred 1.31% of its equity to YantaiChangyu.After the equity change, the Group holds 91.53% of its equity. Through agreementarrangement, the Group has the full power to control AFIP’s strategic operating, investing andfinancing policies. The agreement arrangement will be terminated on September 2, 2024.

(c) The Research, Development & Manufacture Company is a joint venture established by theGroup and Agricultural Development Fund, whose 92.25% of the shares were held by theGroup on June 30, 2023. As stated in Note 7.29, the Group exercises full control over theoperation, investment and financing policies of the Research, Development & ManufactureCompany by contract arrangement. The contract arrangement will expire on May 22, 2026.Up to June 30, 2023, the remaining investment of the Agricultural Development Fundaccounted for 7.75% of the registered capital.

9.1.2 Important non-wholly-owned subsidiaries

Unit: Yuan

Name of subsidiary	Shareholding proportion of minority shareholders	Profit/loss attributable to minority shareholders in this period	Other comprehensive income attributable to minority shareholders in this period	Dividend declared to be distributed to minority shareholders in this period	Balance of minority shareholder’s interest at the end of period
AFIP	8.47%				56,409,393
Indomita Wine	15%	-884,056	1,018,109		57,398,559

Explanation for difference between the proportion of shareholding and proportion of votingpower of the minority shareholders in the subsidiaries: See details in Note 8.1.1.

9.1.3 Main financial information of important non-wholly-owned subsidiaries

Unit: Yuan

Name of subsidiary	Ending balance						Beginning balance
	Current assets	Non-current assets	Total assets	Current liabilities	Non-current liabilities	Total liabilities	Current assets	Non-current assets	Total assets	Current liabilities	Non-current liabilities	Total liabilities
AFIP	278,777,134	392,916,676	671,693,810	36,970,412	3,089,342	40,059,754	251,902,602	399,165,555	651,068,157	22,424,425	3,020,582	25,445,007
Indomita Wine	231,117,642	324,071,744	555,189,386	153,663,101	11,311,586	164,974,687	221,192,234	320,233,623	541,425,857	140,793,252	11,311,586	152,104,838

Unit: Yuan

Name of subsidiary	Amount incurred in this period				Amount incurred in prior period
	Operating income	Net profit	Total comprehensive income	Operating cash flow	Operating income	Net profit	Total comprehensive income	Operating cash flow
AFIP	116,672,301	6,010,906	6,010,906	7,318,097	88,990,033	-365,257	-365,257	1,740,771
Indomita Wine	76,726,600	-5,893,708	893,680	13,656,192	100,634,284	4,315,754	-1,029,729	9,000,393

9.2 Transactions where share of owners’ equity in a subsidiary changes and thesubsidiary is still controlled

9.2.1 Explanation of changes in share of owners’ equity in a subsidiaryThis Company has acquired 49% of the minority shareholders’ equity in the subsidiaryIcewine Valley in this period, with a transfer price of 32,746,777 Yuan. After the completionof acquisition, this Company holds a 100% equity in Icewine Valley.

9.2.2 Impact of transactions on minority shareholders’ equity and owners’ equityattributable to the parent company

Items	Icewine Valley
Acquirement cost/disposal consideration
--Cash	32,746,777
--Fair value of non-cash assets
Total acquirement cost/disposal consideration	32,746,777
Minus: Net asset share of subsidiaries calculated based on the proportion of equity acquirement/disposal	31,655,269
Difference
Including: Adjustment of capital reserves	1,091,508
Adjustment of surplus reserves
Adjustment of undistributed profits

9.3 Equity in joint ventures or associates

Summary financial information of unimportant joint ventures and associates

Unit: Yuan

	Ending balance/ amount incurred in this period	Beginning balance / amount incurred in prior period
Joint ventures	--	--
Total book value of investment	36,846,195	37,970,535
Total of the following items calculated according to the shareholding ratio
-- Net profit	-1,124,340	-798,152
-- Other comprehensive income
-- Total comprehensive income	-1,124,340	-798,152
Associates:
Total book value of investment	1,219,317	3,400,850
Total of the following items calculated

	Ending balance/ amount incurred in this period	Beginning balance / amount incurred in prior period
according to the shareholding ratio
-- Net profit	191,752	-123,165
-- Other comprehensive income
-- Total comprehensive income	191,752	-123,165

10. Risks related to financial instruments

The Group has exposure to the following main risks from its use of financial instruments inthe normal course of the Group’s operations:

- Credit risk- Liquidity risk- Interest rate risk- Foreign currency risk

The following mainly presents information about the Group’s exposure to each of the aboverisks and their sources, their changes during the year, and the Group’s objectives, policies andprocesses for measuring and managing risks, and their changes during the year.

The Group aims to seek appropriate balance between the risks and benefits from its use offinancial instruments and to mitigate the adverse effects that the risks of financial instrumentshave on the Group’s financial performance. Based on such objectives, the Group’s riskmanagement policies are established to identify and analyse the risks faced by the Group, toset appropriate risk limits and controls, and to monitor risks and adherence to limits. Riskmanagement policies and systems are reviewed regularly to reflect changes in marketconditions and the Group’s activities.

10.1 Credit risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for theother party by failing to discharge an obligation. The Group’s credit risk is primarilyattributable to cash at bank, receivables, debt investments and derivative financial instrumentsentered into for hedging purposes. Exposure to these credit risks are monitored bymanagement on an ongoing basis.

The cash at bank of the Group is mainly held with well-known financial institutions.Management does not foresee any significant credit risks from these deposits and does notexpect that these financial institutions may default and cause losses to the Group.

As at June 30, 2023, the Group’s maximum exposure to credit risk which will cause a

financial loss to the Group due to failure to discharge an obligation by the counterparties.

In order to minimise the credit risk, the Group has adopted a policy to ensure that all salescustomers have good credit records. According to the policy of the Group, credit review isrequired for clients who require credit transactions. In addition, the Group continuouslymonitors the balance of account receivable to ensure there’s no exposure to significant baddebt risks. For transactions that are not denominated in the functional currency of the relevantoperating unit, the Group does not offer credit terms without the specific approval of theDepartment of Credit Control in the Group. In addition, the Group reviews the recoverableamount of each individual trade debt at each balance sheet date to ensure that adequateimpairment losses are made for irrecoverable amounts. In this regard, the management of theGroup considers that the Group's credit risk is significantly reduced.

Since the Group trades only with recognised and creditworthy third parties, there is norequirement for collateral. Concentrations of credit risk are managed bycustomer/counterparty, by geographical region and by industry sector. As at June 30, 2023,

26.5% of the Group trade receivables are due from top five customers (December 31, 2022:

48.8%). There is no collateral or other credit enhancement on the balance of the tradereceivables of the Group.

10.2 Liquidity risk

Liquidity risk is the risk that an enterprise will encounter difficulty in meeting obligations thatare settled by delivering cash or another financial asset. The Group and its individualsubsidiaries are responsible for their own cash management, including short-term investmentof cash surpluses and the raising of loans to cover expected cash demands (subject to approvalby the Group’s board when the borrowings exceed certain predetermined levels). The Group’spolicy is to regularly monitor its liquidity requirements and its compliance with lendingcovenants, to ensure that it maintains sufficient reserves of cash, readily realisable marketablesecurities and adequate committed lines of funding from major financial institutions to meetits liquidity requirements in the short and longer term.

10.3 Interest rate risk

Interest-bearing financial instruments at variable rates and at fixed rates expose the Group tocash flow interest rate risk and fair value interest risk, respectively. The Group determines theappropriate weightings of the fixed and floating rate interest-bearing instruments based on thecurrent market conditions and performs regular reviews and monitoring to achieve anappropriate mix of fixed and floating rate exposure.

(1) As at June 30, 2023, the Group held the following interest-bearing financial instruments:

Fixed rate instruments:

Unit: Yuan

Item	June 30, 2023		December 31, 2022
	Effective interest rate	Amounts	Effective interest rate	Amounts
Financial assets
- Monetary capital	1.7%-2.15%	228,200,000	2% - 2.25%	53,200,000
Financial liabilities			?
- Short-term loans	0.65% - 6.76%	-230,357,784	0.65% - 6.76%	-155,774,939
- Long-term loans (including the portion due within one year)	1.50%-3.65%	-8,249,803	1.50% - 3.65%	-183,331,680
- Long-term payable (including the portion due within one year)	1.20%	-42,000,000	1.20%	-64,000,000
- Lease liabilities (including the portion due within one year)	4.65%	-117,902,746	4.65%	-128,514,033
Total		-170,310,333		-478,420,652

Variable rate instruments:

Unit: Yuan

Item	June 30, 2023		December 31, 2022
	Effective interest rate	Amounts	Effective interest rate	Amounts
Financial assets
- Monetary capital	0.3%-1.8225%	1,433,369,550	0.25% - 1.61%	1,598,206,161
Financial liabilities
- Short-term loans	1-year LPR-05	-100,000,000	1-year LPR-05	-200,000,000
- Short-term loans	1.81% - 2.54%	-16,000,832	1.81% - 2.54%	-33,603,542
- Long-term loans (including those due within one year)	2.85%-3.35%?	-126,602,735	2.85%-3.35%?	-3,011,228
- Long-term loans (including those due within one year)	BBSY+1.10%	-45,439,697	BBSY+1.10%	-44,781,100
Total		1,145,326,286		1,316,810,291

(2) Sensitivity analysis

Management of the Group believes interest rate risk on bank deposit is not significant,therefore does not disclose sensitivity analysis for interest rate risk.

As at June 30, 2023, based on assumptions above, it is estimated that a general increase of 50basis points in interest rates, with all other variables held constant, would decrease theGroup’s equity by RMB 540,081 Yuan (2022: RMB 1,055,235 Yuan), and net profit by RMB540,081 Yuan (2022: RMB 1,055,235 Yuan).

The sensitivity analysis above indicates the instantaneous change in the net profit and equitythat would arise assuming that the change in interest rates had occurred at the balance sheetdate and had been applied to re-measure those financial instruments held by the Group whichexpose the Group to fair value interest rate risk at the balance sheet date. In respect of theexposure to cash flow interest rate risk arising from floating rate non-derivative instrumentsheld by the Group at the balance sheet date, the impact on the net profit and equity is

estimated as an annualised impact on interest expense or income of such a change in interestrates.

10.4 Foreign currency risk

In respect of cash at bank and on hand, accounts receivable and payable, short-term loans denominatedin foreign currencies other than the functional currency, the Group ensures that its net exposure is keptto an acceptable level by buying or selling foreign currencies at spot rates when necessary to addressshort-term imbalances.

(1) As at June 30, 2023, the Group’s exposure to currency risk arising from recognised assets orliabilities denominated in foreign currencies is presented in the following tables. For presentationpurposes, the amounts of the exposure are shown in Renminbi, translated using the spot rate at thebalance sheet date. Differences resulting from the translation of the financial statementsdenominated in foreign currency are excluded.

Unit: Yuan

Item	June 30, 2023		December 31, 2022
	Balance at foreign currency	Balance at RMB equivalent	Balance at foreign currency	Balance at RMB equivalent
Monetary capital		3,246,928		76,748
- USD	449,279	3,246,400	10,922	76,068
- EUR	67	528	67	494
- HKD			208	186
Short-term borrowings		98,451,525		95,792,132
- USD	13,625,000	98,451,525	13,750,000	95,792,132

(2) Sensitivity analysis

Assuming all other risk variables remained constant, a 5% strengthening of the Renminbiagainst the US dollar and Euro at June 30, 2023 would have impact on the Group’s equity andnet profit by the amount shown below, whose effect is in Renminbi and translated using thespot rate at the year-end date:

Unit: Yuan

Item	Equity	Net profit
June 30, 2023
USD	4,760,256	4,760,256
EUR	-26	-26
Total	4,760,230	4,760,230
December 31, 2022
USD	3,589,352	3,589,352
EUR	-19	-19
HKD	-7	-7
Total	3,589,326	3,589,326

A 5% weakening of the Renminbi against the US dollar and Euro dollar at June 30, 2023would have had the equal but opposite effect to the amounts shown above, on the basis that allother variables remained constant.

11. Fair value disclosure

All financial assets and financial liabilities held by the Group are carried at amounts notmaterially different from their fair value at June 30, 2023.

12. Related parties and related transactions

12.1 Particulars of the parent company of the Company

Name of parent company	Registration place	Business nature	Registered capital	Proportion of shareholding of the parent company in the Company	Proportion of voting powers of the parent company in the Company
Changyu Group	Yantai City	Manufacturing industry	50,000,000	50.40%	50.40%

From January to June 2023, there was no fluctuation in the registered capital of the parentcompany and its share in equity interest and voting right.

12.2 Particulars of the subsidiaries of the Company

See particulars of the subsidiaries of the Company in Note 8.

12.3 Information about joint ventures and associates of the CompanyOther joint ventures and associates that have related party transactions with the Group duringthis period or that formed balance when having related party transactions with the Groupduring the prior period are as follows:

Name of entity	Relationship with the Company
L&M Holdings	Joint venture of the Group
Chengdu Yufeng	Associates of the Group
Guolong Wine Industry	Associates of the Group

12.4 Particulars of other related parties

Name of other related parties	Relationship between other related parties and the Company
Yantai God Horse Packing Co., Ltd. (“God Horse Packing”)	A company controlled by the same parent company

Name of other related parties	Relationship between other related parties and the Company
Yantai Zhongya Medical Health Wine Co., Ltd. (“Zhongya Medical”)	Enterprise significantly influenced by key management personnel of this Company
Mirefleurs	Subsidiaries of the joint venture
CHATEAU DE LIVERSAN (“LIVERSAN”）	Subsidiaries of the joint venture

12.5 Related transactions

12.5.1 Related transactions of purchasing and selling goods and providing and receivingservicesList of purchasing goods/receiving services

Unit: Yuan

Related parties	Related transactions	Amount incurred in this period	Amount incurred in prior period
God Horse Packing	Purchasing goods	40,209,713	40,568,193
Zhongya Medical	Purchasing goods	13,162	17,879

List of selling goods/providing services

Unit: Yuan

Related parties	Related transactions	Amount incurred in this period	Amount incurred in prior period
Zhongya Medical	Selling goods	1,929,485	3,027,005
God Horse Packing	Selling goods	7,414	31,576
Chengdu Yufeng	Selling goods	190,498	850,304
Weimeisi Shanghai	Selling goods		305,328
Guolong Wine Industry	Selling goods		3,687,055

The price of transactions between the Group and the related parties are based on thenegotiated price.

12.5.2 Related trusteeship/contracting and mandatory administration/outsourcingNil

12.5.3 Leasing with related parties

The Group as a lessor:

Unit: Yuan

Name of the lessee	Type of leased assets	Rental income recognized in this period	Rental income recognized in prior period
God Horse Packing	Office building and plant	774,705	774,705
Zhongya Medical	Office building	295,238	295,238

The Group as a lessee:

Unit: Yuan

Name of the lessor	Type of leased assets	Rental expenses for short-term leases and leases of low-value assets of simplified treatment (if applicable)		Variable lease payments not included in the measurement of lease liabilities (if applicable)		Rent paid		Interest expenses on lease liabilities assumed		Right-of-use assets increased
		Amount incurred in this period	Amount incurred in prior period	Amount incurred in this period	Amount incurred in prior period	Amount incurred in this period	Amount incurred in prior period	Amount incurred in this period	Amount incurred in prior period	Amount incurred in this period	Amount incurred in prior period
Changyu Group	Office building, plant, commercial building					7,480,362	5,980,362	1,103,983	935,678

12.5.4 Related guarantee

Nil

12.5.5 Inter-bank borrowing and lending of related parties

Nil

12.5.6 Asset transfer and debt recombination of related parties

Nil

12.5.7 Other related transactions

Unit: Yuan

Related party	Item	Amount incurred in this period	Amount incurred in prior period
Changyu Group	Trademark use fee	11,320,305	10,512,100

The price of transactions between the Group and the related parties are based on thenegotiated price.

12.6 Accounts receivable and payable of the related parties

12.6.1 Accounts receivable

Unit: Yuan

Item	Related parties	Ending balance		Beginning balance
		Book balance	Provision for bad debts	Book balance	Provision for bad debts
Accounts receivable	Zhongya Medical	2,247,331	4,045	2,627,473	8,091
Accounts receivable	Yantai Guolong			200,000	616
Other current assets	Changyu Group	108,931,118		120,930,641

12.6.2 Accounts payable

Unit: Yuan

Item	Related parties	Ending book balance	Beginning book balance
Accounts payable	God Horse Packing	16,008,923	36,600,233
Accounts payable	Zhongya Medical	813,204	5,365,862
Accounts payable	Changyu Group	19,434,600	19,434,600
Accounts payable	Chengdu Yufeng		143,659
Liabilities of contracts	Chengdu Yufeng	19
Liabilities of contracts	Zhongya Medical		240
Other payable	God Horse Packing		471,869

13. Share-based payment

13.1 Overall situation of share-based payment

Unit: Yuan

Total amount of various equity instruments granted by the Company in this period	6,785,600
Total amount of various equity instruments exercised by the Company in this period
Total amount of various equity instruments invalidated by the Company in this period
Range of exercise prices for equity issued by the Company at the end of the period and the remaining term of contract
Range of exercise prices for other equity instruments issued by the Company at the end of the period and the remaining term of contract	6,785,600 shares of restricted stock were issued, with a grant date of June 26, 2022, and the exercise price of the restricted stock was 15.24 Yuan per share. As of the end of this period, there were 2,035,700 shares with a remaining maturity of 12 months, 2,035,700 shares with a remaining maturity of 24 months, and 2,714,200 shares with a remaining maturity of 36 months.

13.2 Equity-settled share-based payments

Unit: Yuan

Method for determining the fair value of equity instruments on grant date	Restricted stock: stock price on grant date minus grant price
Basis for determining the number of exercisable equity instruments	Management’s best estimate
Reasons for significant differences between the current estimate and the previous estimate
Accumulated amount of equity-settled share-based payments included in capital reserve	671,300
Total amount of expenses recognized as equity-settled share-based payments in this period	671,300

14. Commitment and contingency

14.1 Significant commitment

Unit: Yuan

Item	Ending balance	Beginning balance
Making long-term asset commitments	30,598,000	45,698,000

14.2 Contingency

As of the balance sheet date, the Group didn’t have any contingency to be disclosed.

15. Matters after balance sheet

15.1 Important non-adjusting events

According to the authorization of 2022 annual shareholders’ meeting, the Company held itsfirst interim meeting of directors and first interim meeting of supervisors on June 26, 2023,and reviewed and approved the Proposal on Matters Related to Adjustment of 2023 RestrictedStock Incentive Plan and the Proposal on Granting Restricted Stock to the Incentive Objectsof 2023 Restricted Stock Incentive Plan, granting 6,785,600 shares of restricted commonstock to 203 incentive objects. As of July 20, 2023, the total amount of funds raised by theincentive objects was RMB 103,411,919 Yuan, and the Company’s targeted issuance ofA-share common stocks to the incentive objects has been listed.

16. Other important matters

Nil

17. Notes on major items in financial statements of the parent company

17.1 Accounts receivable

17.1.1 Accounts receivables classified disclosure

Unit: Yuan

Nature	Ending balance					Beginning balance
	Book balance		Bad-debt provision		Book value	Book balance		Bad-debt provision		Book value
	Amount	Proportion	Amount	Proportion of accrual		Amount	Proportion	Amount	Proportion of accrual
Accounts receivable with bad-debt provision accrued on a single item basis
Accounts receivable with bad-debt provision accrued on a combined basis	2,033,697	100%	3,661	0.18%	2,030,036	2,301,505	100%		0%	2,301,505
Total	2,033,697	100%	3,661	0.18%	2,030,036	2,301,505	100%		0%	2,301,505

Disclosed by age

Unit: Yuan

Age	Ending balance
Within 1 year (including 1 year)	2,033,697
1-2 years
2-3 years
More than 3 years
Total	2,033,697

17.1.2 Provision for bad debts accrued, withdrawn or transferred back in this periodParticulars of provision for bad debts accrued in this period:

Unit: Yuan

Category	Beginning balance	Change amount in this period			Ending balance
		Accrued	withdrawn or transferred back	Cancelled after verification
Bad-debt provision accrued on a combined basis		3,661			3,661
Total		3,661			3,661

17.1.3 Accounts receivable actually cancelled after verification in this periodNil

17.1.4 Accounts receivable collected by the borrower of top 5 units ranked by the endingbalance

Unit: Yuan

Unit	Ending balance of accounts receivable	Proportion in the total ending balance of accounts receivable	Ending balance of bad-debts provision
Zhongya Medical	2,033,697	100%	3,661
Total	2,033,697	100%

17.1.5 Accounts receivable derecognized due to transfer of financial assetsNil

17.1.6 Accounts receivable transferred and included in assets and liabilitiesNil

17.2 Other receivables

Unit: Yuan

Item	Ending balance	Beginning balance
Interest receivable
Diveidens receivable	103,544,695	250,000,000
Other receivables	401,380,464	470,176,320
Total	504,925,159	720,176,320

17.2.1 Diveidens receivable

Unit: Yuan

Item (or the invested unit)	Ending balance	Beginning balance
Dividends receivable from subsidiaries	103,544,695	250,000,000
Total	103,544,695	250,000,000

17.2.2 Other receivables

17.2.2.1 Particulars of other receivables classified by nature

Unit: Yuan

Nature	Ending book balance	Beginning book balance
Accounts receivable from subsidiaries	399,716,851	470,128,362
Others	1,663,613	47,958
Total	401,380,464	470,176,320

17.2.2.2 Disclosed by age

Unit: Yuan

Age	Ending balance
Within 1 year (including 1 year)	401,275,991
1-2 years
2-3 years	104,473
More than 3 years
Total	401,380,464

17.2.2.3 Provision for bad debts accrued, withdrawn or transferred back in this periodThe provision for bad debts accrued in this period was RMB 0 Yuan; and the provision forbad debts withdrawn or transferred back in this period was RMB 0 Yuan

17.2.2.4 Other accounts receivable actually cancelled after verification in this periodNil

17.2.2.5 Other accounts receivable collected by the borrower of top 5 units ranked bythe ending balance

Unit: Yuan

Unit	Nature of fund	Ending balance	Age	Percentage in the total ending balance of other accounts receivable	Ending balance of provision for bad debts
Sales company	Accounts receivable from subsidiaries	290,435,378	Within 1 year	72.40%
Atrio Group	Accounts receivable from subsidiaries	80,588,948	Within 1 year	20.10%
Digital marketing	Accounts receivable from subsidiaries	15,811,981	Within 1 year	3.90%
Kilikanoon Estate	Accounts receivable from subsidiaries	7,455,390	Within 1 year	1.90%
Castel	Accounts receivable from subsidiaries	790,482	Within 1 year	0.20%
Total		395,082,179		98.50%

17.2.2.6 Accounts receivable related to governmental subsidy

Nil

17.2.2.7 Other accounts receivable derecognized due to transfer of financial assetsNil

17.2.2.8 Other accounts receivable transferred and included in assets and liabilitiesNil

17.3 Long-term equity investment

Unit: Yuan

Item	Ending balance			Beginning balance
	Book balance	Impairment reserve	Book value	Book balance	Impairment reserve	Book value
Investment in subsidiaries	7,684,192,789		7,684,192,789	7,703,535,027		7,703,535,027
Investment in associated enterprises and joint ventures				2,318,351		2,318,351
Total	7,684,192,789		7,684,192,789	7,705,853,378		7,705,853,378

17.3.1 Investment in subsidiaries

Unit: Yuan

Invested unit	Beginning balance (book value)	Increase and decrease in this period				Ending balance (book value)	Ending balance of provision for impairment
		Increase in investment	Decrease in investment	Provision for impairment accrued	Others
Xinjiang Tianzhu	60,000,000		60,000,000
Kylin Packaging	23,176,063					23,176,063
Changyu Chateau	28,968,100					28,968,100
Pioneer International	3,500,000					3,500,000
Ningxia Growing	36,573,247					36,573,247
National Wine	2,000,000					2,000,000
Icewine Valley	30,440,500		32,746,777			63,187,277
AFIP	588,389,444					588,389,444
Sales Company	7,200,000					7,200,000
Langfang Sales	100,000					100,000

Invested unit	Beginning balance (book value)	Increase and decrease in this period				Ending balance (book value)	Ending balance of provision for impairment
		Increase in investment	Decrease in investment	Provision for impairment accrued	Others
Langfang Castel	19,835,730					19,835,730
Wine Sales	4,500,000					4,500,000
Shanghai Marketing	1,000,000					1,000,000
Beijing Marketing	850,000					850,000
Jingyang Sales	100,000					100,000
Jingyang Wine	900,000					900,000
Ningxia Wine	222,309,388					222,309,388
Ningxia Chateau	453,463,500					453,463,500
Chateau Tinlot	212,039,586					212,039,586
Shihezi Chateau	812,019,770					812,019,770
Chang’an Chateau	803,892,258					803,892,258
R&D Company	3,288,906,445					3,288,906,445
Huanren Wine	22,200,000					22,200,000
Wine Sales Company	5,000,000					5,000,000
Francs Champs	236,025,404					236,025,404
Marques del Atrio	233,142,269					233,142,269
Indomita Wine	274,248,114					274,248,114
Kilikanoon Estate, Australia	129,275,639					129,275,639
Digital Marketing	1,000,000					1,000,000
Changyu Cultural Tourism Company	92,479,570					92,479,570
Chateau Koya	110,000,000					110,000,000
Weimeisi (Shanghai)		7,910,985				7,910,985
Total	7,703,535,027	40,657,762	60,000,000			7,684,192,789

17.3.2 Investment in associates

Unit: Yuan

Invested unit	Beginning balance (book value)	Increase and decrease in this period								Ending balance (book value)	Ending balance of provision for impairment
		Increase in investment	Decrease in investment	Investment gains and losses recognized under the equity method	Other comprehensive income adjustment	Other changes in equity	Declared cash dividend or profit	Provision for impairment accrued	Others
Weimeisi Shanghai	2,318,351		2,373,285	54,934
Total	2,318,351		2,373,285	54,934

17.4 Operating income and operating cost

17.4.1 Details of operating income

Unit: Yuan

Item	Amount incurred in this period		Amount incurred in prior period
	Income	Cost	Income	Income
Main business	211,221,867	173,868,643	200,506,811	166,176,180
Other business	30,745,229	27,044,675	29,080,332	26,938,064
Total	241,967,096	200,913,318	229,587,143	193,114,244
Including: Income from contracts	240,897,153	200,209,954	228,517,200	192,410,880
Income from house rents	1,069,943	703,364	1,069,943	703,364

17.4.2 Situation of income from contracts

Unit: Yuan

Contract classification	Amount incurred in this period	Amount incurred in prior period
Type of merchandise
- Alcoholic beverage	211,221,867	200,506,811
- Others	29,675,286	28,010,389
Classified by the time of merchandise transfer
- Revenue recognized at a point in time	240,897,153	228,517,200

17.5 Investment income

Unit: Yuan

Item	Amount incurred in this period	Amount incurred in prior period
Income from long-term equity investment by cost method	178,935,084	328,316,580
Income from long-term equity investment by equity method	54,934	-26,539
Investment income from disposal of long-term equity investment	-29,910,000
Investment income of the financial assets measured at their fair values and the variation of which is recorded into the current profits and losses during the holding period
Investment income gained from disposal of the financial assets measured at their fair values and the variation of which is recorded into the current profits and losses
Investment income of held-to-maturity investment during the holding period
Investment income of financial assets held for sale during the holding period
Investment income gained from disposal of financial assets held for sale
Gains generated from the remaining equity remeasured as per fair value after the loss of control
Total	149,080,018	328,290,041

18. Supplementary materials

18.1 List of non-current profits/losses in this period

Unit: Yuan

Item	Amount	Remark
Profits/losses on disposal of non-current assets	16,228,006
Tax return, deduction and exemption approved beyond the authority or without formal approval document

Governmental subsidy included in the current profits/losses (excluding thoseclosely related to the enterprise business and enjoyed in accordance with theunified standard quota or ration of the state)

	28,971,185.00
Payment for use of funds by non-financial enterprises included in the current profits/losses
Income obtained when the investment cost obtained by the enterprise from subsidiaries, joint-run business and joint venture is less than the fair value of the net identifiable assets obtained from the invested units when the investment is made
Profits/losses on exchange of non-monetary assets
Profits/losses on entrusting other people to make investment or manage assets
Asset impairment provision accrued due to force majeure such as natural disaster
Profits/losses on debt restructuring

Item	Amount	Remark
Enterprise reorganization expenses such as staffing expenditure and integration expenses, etc.
Profits/losses on those beyond the fair value generated from transactions with unfair transaction price
Current net profits/losses on subsidiaries acquired from a business combination under common control from the beginning to the consolidation date
Profits/losses on contingencies irrelated to the normal business of the Company
Profits/losses on changes of fair value of tradable financial assets, derivative financial assets, tradable financial liabilities and derivative financial liabilities, and investment income from disposal of tradable financial assets, derivative financial assets, tradable financial liabilities, derivative financial liabilities and other investment in creditor's rights, excluding effective hedging operations relevant to the normal business of the Company
Transfer-back of accounts receivable with single impairment test and provision for impairment of contract assets
Profits/losses on external entrusted loans
Profits/losses on fair value changes of investment real estate with fair value mode for follow-up measurement
Influence of the one-time adjustment of the current profits/losses in accordance with tax and accounting laws and regulations on the current profits/losses
Trustee fee income from entrusted operation
Other non-operating income and expenditure besides the above items	-332,706
Other profits/losses conforming to the definition of non-current profits/losses
Minus: Influenced amount of income tax	4,785,509
Influenced amount of minority shareholders’ equity	833,515
Total	39,247,461	--

18.2 Return on net assets and earnings per share

Profit incurred in this period	Weighted average return on net assets	Earnings per share
		Basic EPS (Yuan/Share)	Diluted EPS (Yuan/Share)
Net profit attributable to common shareholders of the Company	3.40%	0.53	0.53
Net profit attributable to common shareholders of the Company deducting non-incidental profits/losses	3.03%	0.47	0.47

18.3 Accounting data difference under domestic and foreign accounting standard

18.3.1 Net profits & net assets difference disclosed in the financial report according tothe international accounting standard and Chinese accounting standard

Unit: Yuan

	Net profits		Net assets
	Amount incurred in this period	Amount incurred in prior period	Ending balance	Beginning balance
In accordance with the Chinese accounting standard	363,569,436	358,459,603	10,645,880,226	10,579,053,733
Item & amount adjusted in accordance with the international accounting standard:
In accordance with the international accounting standard	363,569,436	358,459,603	10,645,880,226	10,579,053,733