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张裕B:2020年半年度报告(英文版) 下载公告
公告日期:2020-08-28

YantaiChangyuPioneerWineCo.,Ltd.

2020Semi-annualReport

Final2020-03

August,2020

Contents

2020Semi-annualReport ...... 1

I.ImportantNotice,ContentsandDefinition..................................................................................3

II.BriefIntroductionfortheCompanyandMainFinancialIndicators....................................5

III.SummaryoftheCompany'sBusinesses..................................................................................9

IV.ManagementDiscussionandAnalysis...................................................................................13

V.Majorissues...............................................................................................................................29

VI.ChangesinSharesandtheShareholders'Situation.............................................................44

VII.RelatedSituationofPreferredShares..................................................................................50

VIII.RelatedSituationofConvertibleCorporateBonds.............................................................50

IX.SituationforDirectors,Supervisors,SeniorExecutives........................................................51

X.RelatedSituationofCorporationBonds.................................................................................53

XI.FinancialReport.........................................................................................................................53

XII.ReferenceDocuments.............................................................................................................165

I.ImportantNotice,ContentsandDefinitionTheboardofdirectors,theboardofsupervisors,directors,supervisorsandseniorexecutivesoftheCompanyguaranteethetruthfulness,accuracyandcompletenessofthecontentscontainedinsemi-annualreportwithnofalserecords,misleadingstatementsorsignificantomissions,andundertakeindividualandjointlegalliabilities.Mr.ZhouHongjiang(PersoninchargeoftheCompany),Mr.JiangJianxun(Personinchargeofaccountingwork)andMs.GuoCuimei(Personinchargeofaccountingorgan&Accountantincharge)assurethetruthfulness,accuracyandcompletenessofthefinancialreportintheannualreport.Exceptfollowingdirectors,otherdirectorshavepersonallyattendedthemeetingfordeliberatingthesemi-annualreport.

Nameofdirectornotattendingthemeetingpersonally

NameofdirectornotattendingthemeetingpersonallyPositionofdirectornotattendingthemeetingpersonallyReasonofnotattendingthemeetingpersonallyNameofentrustee
EnricoSivieriDirectorAffectedbyCOVID-19epidemicZhouHongjiang
StefanoBattioniDirectorAffectedbyCOVID-19epidemicZhouHongjiang
AldinoMarzoratiDirectorAffectedbyCOVID-19epidemicLengBin
LiuQinglinIndependentDirectorDuetoofficialbusinessYuRenzhu

RegardingmajorrisksthattheCompanymayfaceduringtheproductionandmanagementprocess,pleasereferto“10.RisksfacedwithbytheCompanyandresponsemeasures”in“IVManagementDiscussionandAnalysis”inthisreport.Investorsaresuggestedtoreadcarefullyandpayattentiontoinvestmentrisks.TheCompanyhasnoplantodistributecashdividendsandbonussharesandcapitalreservewillnotbetransferredtoequity.

Definition

DefinitionItem

DefinitionItemReferstoDefinitionContent
Company/thisCompanyReferstoYantaiChangyuPioneerWineCo.,Ltd.
ChangyuGroup/ControllingShareholderReferstoYantaiChangyuGroupCo.,Ltd.
CSRCReferstoChinaSecuritiesRegulatoryCommission
SSEReferstoShenzhenStockExchange
KPMGHuazhenReferstoKPMGHuazhenLLP(LimitedLiabilityPartnership)
CNYReferstoChineseYuan

II、BriefIntroductionfortheCompanyandMainFinancialIndicators

1.Company’sinformation

AbbreviationoftheShares:

AbbreviationoftheShares:ChangyuA、ChangyuBCodenumberoftheShares000869、200869
AbbreviationoftheSharesafteralteration-
PlaceoflistingoftheSharesShenzhenStockExchange
LegalNameinChinese烟台张裕葡萄酿酒股份有限公司
AbbreviationofChinesename张裕
LegalNameinEnglishYANTAICHANGYUPIONEERWINECOMPANYLIMITED
AbbreviationofEnglishnameCHANGYU
LegalRepresentativeMr.ZhouHongjiang

2.Contactpersonandinformation

SecretaryofBoardofDirectorsAuthorizedRepresentativeoftheSecuritiesAffairs
NameMr.JiangJianxunMr.LiTingguo
Address56DamaRoad,Yantai,Shandong,China56DamaRoad,Yantai,Shandong,China
Tel0086-535-66027610086-535-6633656
Fax0086-535-66336390086-535-6633639
E-mailjiangjianxun@changyu.com.cnstock@changyu.com.cn

3.Otherinformation

1)TheCompany’scontactinformationWhetherthereisanychangeintheCompany’sregisteredaddress,officeaddress,postcode,websiteande-mailaddressduringthereportperiod.□Available?NotavailableThereisnochangeintheCompany’sofficeaddress,postcode,websiteande-mailaddressduringthereportperiod.Fordetailedinformation,pleasereferto2019annualreport.

2)InformationdisclosureandfilelocationWhetherthereisanychangeintheinformationdisclosureandfilelocationduringthereportperiod.□Available?NotavailableThereisnochangeinthenameofnewspapersinwhichtheCompany’sinformationisdisclosed,thewebsiteassignedbyCSRCtocarrythesemi-annualreportandthelocationoftheCompany’ssemi-annualreportduringthereportperiod.Fordetailedinformation,pleasereferto2019annualreport.

4.KeyaccountingdataandfinancialindicatorsWhethertheCompanymakesretroactiveadjustmentsorrestatestheaccountingdataofpreviousfiscalyears.□Yes?No

Duringthereportperiod

DuringthereportperiodInthesameperiodoflastyearMoreorlessthanlastyear(%)
Businessrevenue(CNY)1,401,606,7922,558,274,785-45.21%
Netprofitattributedtotheshareholdersofthelistedcompany(CNY)307,035,572603,403,789-49.12%
Netprofitattributedtotheshareholdersofthelistedcompanyafterdeductingtheirregularprofitandloss(CNY)266,766,849552,490,695-51.72%
Netcashflowsfromtheoperatingactivities(CNY)-29,652,821499,476,006-105.94%
Basicearningspershare(CNY/share)0.450.88-48.86%
Dilutedearningspershare(CNY/share)0.450.88-48.86%
Weightedaverageforearningrateofthenetassets2.93%6.13%-3.20%
TheendofthisreportperiodTheendoflastyearMoreorlessthanlastyear(%)
Totalassets(CNY)13,286,972,49813,647,932,568-2.64%
NetAssetsattributedtotheshareholdersofthelistedcompany(CNY)10,131,114,31710,308,910,198-1.72%

5.DifferencesinaccountingdataunderPRCaccountingstandardsandinternationalaccountingstandards

1)DifferencesofnetprofitandnetassetinthefinancialreportdisclosedaccordingtobothinternationalaccountingstandardsandPRCaccountingstandards?Available?Notavailable

Unit:CNY

Netprofitattributedtotheshareholdersofthelistedcompany

NetprofitattributedtotheshareholdersofthelistedcompanyNetAssetsattributedtotheshareholdersofthelistedcompany
CurrentperiodLastperiodEndofperiodBeginningofperiod
AccordingtoPRCaccountingstandards307,035,572603,403,78910,131,114,31710,308,910,198
Itemandamountadjustedaccordingtointernationalaccountingstandards
Accordingtointernationalaccountingstandards307,035,572603,403,78910,131,114,31710,308,910,198

2)DifferencesofnetprofitandnetassetinthefinancialreportdisclosedaccordingtobothforeignaccountingstandardsandPRCaccountingstandards□Available?NotavailableTherearenodifferencesofnetprofitandnetassetinthefinancialreportdisclosedaccordingtobothforeignaccountingstandardsandPRCaccountingstandardsduringthereportperiod.

3)Explanationofthedifferencesinaccountingdataunderdomesticandoverseasaccountingstandards□Available?Notavailable

6.Itemandamountofirregulargainsandlosses?Available□Notavailable

Unit:

CNY

ItemAmountExplanation
Profitandlossondisposalofnon-currentassets(includingtheoffsetofprovisionforimpairmentofassets)39,641
Governmentgrantscreditedincurrentprofitandloss(exceptforgovernmentgrantsthatarecloselyrelatedtotheentity'sbusinessandareenjoyedwithaquotaorwithalimitedquantityinaccordancewithnationaluniformstandard49,780,231
Othernon-operatingincomeandexpenditurebesidesabove-mentioneditems3,814,957
Less:Amountaffectedbyincometax13,221,932
Amountaffectedbyminorityequity(aftertax)144,174
Total40,268,723-

ThereasonsshallbemadeclearanddefinitelyastotheirregularprofitandlossthattheCompanyhasdefinedbyvirtueoftheExplanatoryNoticeonPublicCompany’sInformationDisclosureNo.1-IrregularProfitandLossandastoregardingtheirregularprofitandlossasrecurrentprofitandlossasspecifiedintheExplanatoryNoticeonPublicCompany’sInformationDisclosureNo.1-IrregularProfitandLoss.

□Available?NotavailableThereisnosituationthattheirregularprofitandlossisdefinedandspecifiedasrecurrentprofitandlossinaccordancewiththeExplanatoryNoticeonPublicCompany’sInformationDisclosureNo.1-IrregularProfitandLossduringthereportperiod.

III.SummaryoftheCompany’sBusinesses

1.MainbusinessesduringthereportperiodDuringthereportperiod,theCompany’smainbusinessistoproduceandoperatewineandbrandy,thusprovidingthedomesticandforeignconsumerswithhealthyandfashionablealcoholicdrinks.Comparedwithearlierstage,therearenomajorchangesintheCompany’smainbusinesses.ThewineindustrythattheCompanyinvolvedinisstillingrowthstage.Althoughbeingaffectedbymanyfactorsfortheshort-term,especiallytheCOVID-19,plusthefiercecompetitioninthemarket,makingthewineconsumptiontemporarilydeclines,seenfromthelongterm,thewholedomesticwinemarketisontherisingtrend.TheCompanyisattheforefrontinthedomesticwinemarket.

2.Majorchangesofmainassets

1)Majorchangesofmainassets

Mainassets

MainassetsExplanationofmajorchanges
EquityassetNomajorchange
FixedassetNomajorchange
IntangibleassetNomajorchange
ConstructioninprocessIncreasingby14.02%comparedwiththesameperiodoflastyear,mainlyowingtotheincreaseinaccumulatedinvestmentamountoffixedassets

2)Mainoverseasassetscondition?Available□Notavailable

Detailsofassets

DetailsofassetsFormationreasonAssetsscaleLocationOperatingmodeControlmeasuresforsafeguardingassetsecurityEarningpositionProportionofoverseasassetsintheCompany’snetassetsWhethertherearemajorimpairmentrisks
HaciendaYVinedosMarquesDelAtrio,SLAcquisitionofequity509,150,792SpainIndependentoperationThisCompanyparticipatesinmakingimportantdecisionsthroughboardofdirectorsandappointsCFOforfinancialmanagement10,940,9635.03%No
IndomitaWineCompanyChile,SpAEstablishmentbyjointventure504,027,375ChileIndependentoperationThisCompanyparticipatesinmakingimportantdecisionsthroughboardofdirectorsandappointsCFOforfinancialmanagement3,664,2114.97%No
KilikanoonEstatePtyLtdAcquisitionofequity167,190,085AustraliaIndependentoperationThisCompanyparticipatesinmakingimportantdecisionsthroughboardofdirectors890,2661.65%No
FrancsChampsParticipationsSASEstablishmentbysoleproprietorship228,997,008FranceIndependentoperationThisCompanydirectlyappointsseniorexecutivetoconductoperationandmanagement-863,6292.26%No
OtherconditionexplanationNo

3.AnalysisofcorecompetitivenessInthecompetitionpatternofChinesewineindustry,comparedwithotherparticipantsintheindustry,webelievethattheCompanyhasfollowingadvantages:

Firstly,theCompanyhasawell-knownwinebrandwithmorethan120yearsofhistory,“Changyu”,“NobleDragon”and“AFIP”areChinesefamoustrademarksthathavestronginfluenceandgoodreputation.Secondly,theCompanyhassetupanationwidemarketingnetwork.TheCompanyformsa“three-level”marketingnetworksystemmainlycomposedoftwoteamscontainingtheCompany’smarketingpersonnelanddistributors,possessingastrongmarketingabilityandmarketexploitationability.Thirdly,theCompanyownsstrongscientificprowessandaproductR&Dsystem.Relyingonthesole“National-levelWineR&DCenter”,theCompanygraspsadvancedwinemakingtechnologyandproductionprocessesandhasfairlystrongproductinnovationcapacityandperfectqualitycontrolsystem.Fourthly,theCompanyisinpossessionofgrapebasesthatcouldmeettherequirementsofdevelopment.Thescaleandthestructureofgrapebaseslocatinginregionsthatarethemostsuitableforgrowingwine-makinggrapesinChina,suchasShandong,Ningxia,Xinjiang,Liaoning,HebeiandShaanxi,havebasicallymettheCompany’sdemandsfordevelopment.Fifthly,theCompanyhasacompletehigh-end,medium-endandlow-endproductsaswellasvarietiesandcategories.Morethan100varietiesofwine,brandy,sparklingwineetc.,coveringhigh-end,medium-endandlow-endgrades,canmeettheneedsofdifferentconsumergroups.Aftermorethan10yearsofrapiddevelopment,theCompanyhasoccupiedtheleadingpositioninthedomesticwineindustry,whichhascertaincomparativeadvantagesinthefuturecompetition.Sixthly,theCompanyhasarelativelyperfectincentivemechanism.MostofCompany’semployeesindirectlyholdtheCompany’sequitythroughcontrollingshareholders.Therearehighconsistencybetweenemployeebenefitsandshareholderbenefits,infavorofbettermotivatingemployeestocreatevalueforshareholders.Seventhly,theCompanyhasestablishedaflexibleandefficientdecision-makingmechanism.ThecoremanagementoftheCompanyhasbeenmaintainingaunitedandpragmaticworkstyleandflexibleandefficientdecision-makingmechanism,enablingtheCompanytomoreunhurriedlyrespondtomarketchanges.Eighthly,theCompanyhasbasicallycompletedthelayoutofglobalproductioncapacity.TheCompanyhascompletedtheproductioncapacitylayoutintheworldwidemainwine-producingcountries,suchasChina,France,Chile,SpainandAustraliaandsoon,andcanmakebetteruseofglobalhigh-qualityrawmaterialresources,capital,talentsandadvancedproductiontechniquesandtechnologiestoprovideconsumerswithdiversifiedhighqualityproductsandbetterserveconsumers..

Basedonabovereasons,theCompanyhasformedstrongcorecompetitivenessandwillmaintainthiscomparativeadvantageintheforeseeablemarketcompetitioninthefuture.

IV.ManagementDiscussionandAnalysis

1.SummarizationDuringthereportperiod,affectedbymanyfactorssuchastheslowdownofdomesticeconomicgrowth,increaseduncertaintycausedbySino-UStradefrictionsandCOVID-19epidemic,domesticwineconsumptionhasexperiencedasharpdecline,andmarketcompetitionisveryfierce.Thesalesofbothdomesticwineandimportedwinecontinuedthe“doubledecline”trendoverthepasttwoyears.Somewineproductionandoperationenterprisesgotintotrouble.Facingquitealotofunfavorablefactors,whiletakingtheprotectionofthehealthofemployeesandcooperativepartnersasthetoppriorityofthework,theCompanyactivelyresumedallaspectsofworkbasedontheunifiedarrangementsofthestateandtheactualsituation.TheCompanyinsistedintakingthemarketasthecenter,insistedthedevelopmentstrategyof“Focusonhighquality,Focusonmiddle-and-highlevel,Focusonbigproduct”andthemarketingconceptof“Increasingsalesfromtheterminalandcontinuously-cultivatedconsumers”withoutwavering,andstrovetopromoteproductsales.Inthefirsthalfyear,theCompanyrealizedthebusinessincomeofCNY1,401.61millionwithayear-on-yeardecreaseof45.21%andthenetprofitattributabletoshareholdersoftheparentcompanyrealizedCNY307.04millionwithayear-on-yeardecreaseof49.12%.Duringthereportperiod,theCompanymainlydidfollowingwork:

Firstly,theCompanybendedoverbackwardstoraiseanti-epidemicmaterials,carriedoutthepreventionandcontrolmeasures,andfightagainsttheepidemic.Aftertheoutbreak,theCompanyimmediatelyformulatedrelativelystrictepidemicpreventionandcontrolmeasures,regulatedresponsibilitiesatvariouslevels,paidcloseattentiontorelevantpoliciesandmeasuresandepidemicdevelopments,andconductedpublicityandguidanceworktoemployeesandpartnersthroughvarioustoolssuchasWeChat,inordertoguidethemtorespondcorrectly,nottobepanic,nottobelieveandspreadrumorsandtospreadpositiveenergy.Bycontactingoverseasacquisitioncompaniesandoverseaspartners,theCompanypurchasedlargenumbersofanti-epidemicmaterialssuchasmasksandprotectiveclothingthatareshortageindomesticfromeightcountriesincludingAustralia,Spain,Chile,France,SouthKorea,Japan,MalaysiaandThailand,andalsoprovidedalargeamountofanti-epidemicmaterialstotheCompany’soverseasenterpriseswhentheforeignepidemicsituationissevere,bettermeetingtheanti-epidemicneedsofdomesticandforeignemployeesandpartners.Secondly,theCompanyvigorouslyassisteddistributorstoaccelerateproductsales.Aftertheoutbreakoftheepidemic,duetothedrasticreductionindinnergatheringsandtheslowdowninsalesofalcoholicbeverages,thereweregreaterpressuresondistributors’inventory.TheCompanyactivelytookeffortstomakemeasuresandmaintaineddailycommunicationwithdistributorsthroughcalls,SMS,WeChat,FaceTime,etc.tokeepabreastofthemarketsituationandtoensurethenormaldevelopmentofbusinesstothegreatestextent.Afterthecountryreleasedtherestrictionsonpersonnelflow,theCompany’smarketingteamseizedvariousopportunitiesandrushedtothefrontlineofthemarkettocarryoutmarketingactivitieswithinthescopeofthepolicyandmakegreateffortstopromoteproductsales,alleviatingthepressureondistributors’inventoryandfundsandensuringthehealthyoperationinsaleschannels.

Thirdly,theCompanyre-markedbrandpositioning,focusedonstrategicbrandsandimprovedbrandmanagersystem.TheCompanydividedthebrandsofallkindsofalcoholicproductsintofourlevels,strategicbrand,keybrand,cooperativebrandandindependentbrand,accordingtotheresourceinput,teaminputandfuturepursuitgoals.Amongthem,thestrategicbrandisthebrandbuiltwiththestrengthofthewholecompany,whichwillbepromotedbythemainsalesteamandisthemainbrandforfuturesalesgrowth;thekeybrandisthebrandthatremainsthecurrentinvestmentandpoliciesbasicallyunchanged;thecooperativebrandisthebrandthatthecompanydoesnotinvestinresourcesandbasicallydoesnotusethepowerofthesalesteam,whichgrowsmainlyinvirtueofexternalforcesandthroughactivelyseekingcooperationwithlargebusinessmen.Fordomesticwine,theCompanyformed7brandmanagersystems,containingMoser,AFIPandGoldenIceValley,CastelandBaronBalbon,RenaCastle,NobleDragon,ZenithwirlandJ-Lormin.ForBrandy,theCompanyformedamarketingdepartmentsystemforfourmajorbrandsincludingKoya,Five-star,MminniandPagese.Forimportedwine,theCompanyhasformedfourbrandteamsincludingKilikanoon,Indomita,AtrioandMirefleurs.TheCompanyreviewed,summarized,evaluatedandimprovedthemarketingcontentsprovidedbyeachbrandmanagerinordertopracticallyguidethemarket,preliminarilyimprovingthecreationandimplementationofmarketingcontentsofeachbrandsystem.Fourthly,theCompanycorrectlyunderstoodthemarketdevelopmentsituationandfurtherimprovedthemarketingsystem.Duringthereportperiod,withtherapiddevelopmentofITandthepushfromCOVID-19,“onlineshopping”acceleratedtoreplace“offlineshopping”,“experientialscenario”acceleratedtoreplace“traditionalphysicalshop”,“onlinecustomeracquisitionmode”acceleratedtoreplace“traditionalcustomeracquisitionmode”,and“onlineoffice”acceleratedtoreplace“traditionaloffice”.Inordertobetteradapttothenewmarketdevelopmenttrends,whileconsolidatingtheadvantagesoftraditionalchannels,theCompanyvigorouslypromoteddigitalmarketingtransformation,madebetteruseofblockchaintechnology,exploitednewwaysforconsumerstointeractdeeplyonlineandwidelyattractmembercustomersbyvirtueofthebrandappletandSmartRetailMallappletdevelopedbyTencentinordertofurtherenhancecustomerstickiness,empowerdistributors,conductofflinediversionforthem,providebigdataanalysisforregionalconsumersandacceleratetheintegrationofonlineandofflinebusinesses.Adoptingtheideaof“Establishingimagesandmaintainingpricesystemfornationwidebrands,focusingonsalesofbrandsownedbyE-commercecompany”,forNobleDragon,theCompanyproposedtoadopttheonlinemodeof“1+4”thatmadethesalesinexistingE-commercecompanycontinuegrowingstrongerandbiggerandnewlydevelopedfourmajoronlineenterprisesandlaunchedfourindividualsetsofproductstobesoldonline;forBrandyandZenithwirl,theCompanyadoptedthemodeof“MainlybasedonbigonlineenterprisesandsupplementedbytheE-commercecompany”tostrivetoexpandthescaleofonlinesales.Fifthly,theCompanycontinuedstrengtheningqualitymanagementandcontinuouslyimprovedproductquality.Inaccordancewiththequalityimprovementprogramme,theCompanyincreasedinvestmentinkeylinksandkeyequipmentaffectingproductquality.Itestablishedbrandwinemakersystem,completedtheselectionandappointment,salarysettingsandworkproceduressettingsofwinemakersatalllevels,clarifiedthecorerequirementsofwinemakersatalllevelsinproductshelflife,blindtastingresult,internationalawards,externalqualityandpresentationability,andsignedworkcommitmentletterwitheverywinemakertofurtherclarifyingthequalityimprovementresponsibilitiesofwinemakers,givingfullplaytotheprofessionalpotentialofwinemakers.Itstrengthenedtheintegrationof

bothglobalrawmaterialsandglobalwinemakersandselectedfirst-classoutsourcingdesigncompaniesforproductappearancedesigntoreachtherequirementof“notstunning,nottopublic”.Besidesthat,theCompanyestablishedadualqualityevaluationsystemofinternalqualitymanagementdepartmentsplusexternalconsumerstoevaluatethequalityinanall-aroundwayandconnectedtheevaluationresultswiththeincomeofthepersoninchargeofproduction.Sixthly,theCompanystrengthenedfinancialmanagementandinternalaudittopreventoperationalrisks.Duringthereportperiod,theCompanymainlystrengthenedcapitalmanagement,budgetmanagementandtaxplanning,reducedcapitaloccupation,improvedcapitalturnoverefficiencyandenhancedthepertinenceandeffectivenessofbudgetmanagement.Itfurtherimprovedthefinancialmanagementsystemforoverseasenterprisesandfocusedonmonitoringthecashflowtoavoiddebtrepaymentrisks.Itconductedspecialauditinkeyexpenses,conductedoff-officeauditinkeypersonnel,conductedsettlementauditintechnologicaltransformationandinfrastructureprojects,andinvestigatedpersonnelaccountableforeconomiclosses,ensuringthefullimplementationoftheCompany’smanagementandcontrolsystem.Italsoconductedacomprehensiveinvestigation,statisticandanalysistotheinventoryofChangyuproductsheldbydistributors,whichprovidedimportantdecision-makingbasisforoperatingmanagement.Seventhly,theCompanyacceleratedthereformofemploymentsystemandimprovedthecapacityoftheteam.Duringthereportperiod,theCompanyimplementedtheemploymentstrategyof“Strictlycontrolthenumberofnewrecruitsandreleasetherestrictionindemission”,raisedthestandardsforemployingnewrecruits,adoptedthemodeof“survivalofthefittest”,andimprovedtheoverallcapacityofthesalesteamthrough“upgrade,simplificationandabsorption”.InordertoachievethebusinessobjectivessetbytheCompanyatthebeginningoftheyear,theCompanywillfocusonfollowingworkinthesecondhalfof2020:

Firstly,theCompanywilltake“pursuingmarkethealth”asthetopprioritytoimplementdistributor-levelcodescanningduringinboundandoutboundandestablishthetimelyreportingandmonitoringsystemfordistributors’inventory.Itwillestablish“limitedquantity”and“reducedquantity”rulestodistributorssellingcoreproducts,whichwillbeassociatedwithcrossregionsales,salesatlowpriceandonlinesalesandsoon.Inaddition,theCompanywillstrengthentheflightauditinallopatricwarehouses,costanddistributors’inventory.Itwillalsovigorouslycontinuepromotingtheorder-drivensystemtopreventmaliciouscrossregionsales,salesatlowpriceandillegalonlinesalessoastomaintaintheoverallstabilityandsmoothnessoftheCompany’ssalessystem.Secondly,theCompanywillfurtherclarifybrandandproductpositioning,clearlydividestrategicbrands,keybrands,cooperativebrandsandindependentbrands,formulatemarketingschemebasedon“lifetaste+healthconcepts+consumptionguidance”,distributemarketresourcesonthebasisofbrandpositioninganddowellinbrandbuildingandnewproductmarketcultivationinordertobetterplaytheroleofdifferentbrandsinpromotinganddrivingproductsales.Thirdly,theCompanywillstrengthenthemarketingassessment,determinemarket

personnel’sincome,promotionanddismissionthroughconsideringthemarkethealthdegreeandtheindicatorassessmentresults,adheretotheassessmentofproportionofsalaryinsalesamountandproportionofsalesexpenseinpre-taxsalesamount,andpromotetheintegrationofregionallogisticsanddistributioncenterinordertobettercontrolthemarketcosts.Fourthly,theCompanywillfurtherimprovethebrandwinemakersystemandcontinuesignificantlyimprovingproductquality.Itwilltakethebest-sellingproductindomesticandoverseasatthesimilarpriceasthebenchmark,strivetorealizeacomprehensivesurpassinginproductqualityandcostperformance.Fifthly,theCompanywillacceleratethepaceofdigitalmarketingtransformation,workcloselywithTencentandotheroutsourcingunitstodowellintheproductionofproductsintegrating“anti-cross-region-salescode+marketingcode+anti-counterfeitingcode”,launchbrandappletandSmartRetailMallappletandstrengthencooperationwithmajoronlinebusinesssoastoconstantlyexpandthesalesscaleoftheCompany’sonlineproducts.Sixthly,theCompanywillimplementtheYouthExcellentTalentPlanandadoptthewayof“tutorleadingapprentices”fortrackingandtrainingtoprovidemorejobexchangesandmarketpracticeopportunitiesforoutstandingtalents,whichwillenhanceworkingabilityandbroadenpromotionchannels.Seventhly,theCompanywillscientificallyformulatetheprocurementplanofgrapesandotherrawmaterialsaccordingtotheindustrydevelopmenttrendandtheCompany’sfuturedevelopmentinordertofullycompletetheprocurementworkofrawmaterialsthisyear.

2.AnalysisofmainbusinessPleasereferto“1.Summarization”in“ManagementDiscussionandAnalysis”.Changeinmajorfinancialdataonyear-on-yearbasis

Unit:CNY

Inthereportperiod

InthereportperiodInthesameperiodoflastyearMoreorless(%)Reasonforchanges
Operatingrevenue1,401,606,7922,558,274,785-45.21%Mainlyowingtotheyear-on-yeardecreaseinsalesvolumeaffectedbyCOVID-19epidemic
Operatingcosts574,650,677936,252,225-38.62%Mainlyowingtotheyear-on-yeardecreaseinsalesvolumeaffectedbyCOVID-19epidemic
Salesexpenses250,531,046591,970,801-57.68%Mainlyowingtotheyear-on-yeardecreaseinmarketingactivitiesandmarketinginputaffectedbyCOVID-19epidemic
Administrationexpense113,069,869155,552,312-27.31%Mainlyowingtotheyear-on-yeardecreaseinemployeecompensation,repairchargeandadministrativeexpenses
Financialexpense11,961,1028,789,58336.08%Mainlyowingtothesignificant

year-on-yearincreaseinlong-termloan

year-on-yearincreaseinlong-termloan
Incometaxexpense109,689,969210,281,578-47.84%Mainlyowingtothesignificantyear-on-yeardecreaseintotalprofitcausedbythereduceinprofitabilityaffectedbyCOVID-19epidemic
Netcashflowfromoperatingactivities-29,652,821499,476,006-105.94%Mainlyowingtothesignificantyear-on-yeardecreaseinreceivedcashfromsellingproductsandprovidinglaborserviceaffectedbyCOVID-19epidemic
Netcashflowfrominvestmentactivities-39,726,131-114,534,60865.32%Mainlyowingtothesignificantyear-on-yeardecreaseinthecashoutflowforinvestmentactivitiesincludingpurchaseandconstructionoffixedassetsandfixedtimedepositetc
Netcashflowfromfinancingactivities4,704,625-18,128,357125.95%Mainlyowingtotheyear-on-yearincreaseinreceivedcashfromobtainingbankloan
Netincreasedamountofcashandcashequivalents-64,982,286366,866,743-117.71%Mainlyowingtothesignificantyear-on-yeardecreaseinreceivedcashfromsellingproductsandprovidinglaborserviceaffectedbyCOVID-19epidemic

WhetherthereisanymajorchangefortheCompany’sprofitstructureorprofitsourceduringthereportperiod

□Available?NotavailableThereisnomajorchangefortheCompany’sprofitstructureorprofitsourceduringthereportperiod.Compositionofoperatingrevenue

Unit:CNY

ThisreportperiodThesameperiodoflastyearYear-on-yearincreaseordecrease(%)
AmountProportioninoperatingrevenueAmountProportioninoperatingrevenue
Totaloperatingrevenue1,401,606,792100%2,558,274,785100%-45.21%
Sector-classified
Sectorofliquorandalcoholicbeverage1,401,606,792100%2,558,274,785100%-45.21%
Product-classified
Wine993,972,42570.92%1,928,554,26875.38%-48.46%
Brandy372,909,23926.61%563,451,06822.02%-33.82%
Tourism22,217,2641.59%42,604,3821.67%-47.85%

Others

Others12,507,8640.89%23,665,0670.93%-47.15%
Area-classified
Domestic1,183,622,47784.45%2,330,780,05691.11%-49.22%
Overseas217,984,31515.55%227,494,7298.89%-4.18%

Thecasesofindustry,productorareaaccountingforover10%intheCompany’soperatingrevenueoroperatingprofit?Available□Notavailable

Unit:CNY

OperatingrevenueOperatingcostGrossmarginYear-on-yearincreaseordecrease(%)ofoperatingrevenueYear-on-yearincreaseordecrease(%)ofoperatingcostYear-on-yearincreaseordecrease(%)ofgrossprofitrate
Sector-classified
Sectorofliquorandalcoholicbeverage1,401,606,792574,650,67759%-45.21%-38.62%-4.40%
Product-classified
Wine993,972,425397,080,51760.05%-48.46%-41.62%-4.68%
Brandy372,909,239164,881,01655.79%-33.82%-28.22%-3.45%
Tourism22,217,2646,492,00970.78%-47.85%-47.25%-0.33%
Others12,507,8646,197,13550.45%-47.15%-56.10%10.10%
Area-classified
Domestic1,183,622,477442,340,87762.63%-49.22%-44.09%-3.43%
Abroad217,984,315132,309,80039.30%-4.18%-8.84%3.10%

UndertheconditionthatthestatisticalcaliberoftheCompany’smainbusinessdataisadjustedduringthereportperiod,theCompany’smainbusinessdataadjustedonthebasisofcaliberattheendofreportperiodinrecentoneperiod.□Available?NotavailableExplanationonthecausesofover30%year-on-yearchangesoftherelatedcomparisondata?Available□NotavailableDuringthereportperiod,theCompany’soperatingrevenueandoperatingcosts,aswellastheoperatingrevenueandoperatingcostsofwine,brandy,tourismanddomesticbusiness,alldecreasedsignificantlyoverthesameperiodoflastyear,mainlyduetothedeclineinthesalesvolumeofproductsaffectedbyCOVID-19epidemic.

3.Analysistonon-mainbusiness□Available?Notavailable

4.Assetsandliabilitiessituation

1)Majorchangesinassets

Unit:CNY

Theendofthisreportperiod

TheendofthisreportperiodTheendofthesameperiodoflastyearProportionincreaseordecrease(%)Explanationformajorchanges
AmountProportioninthetotalassets(%)AmountProportioninthetotalassets(%)
Monetaryfunds1,476,207,05511.11%1,848,632,95313.81%-2.70%Mainlyowingtotheyear-on-yeardecreaseinthecashinflowforoperatingactivitiesaffectedbyCOVID-19epidemic
Accountreceivable167,738,6331.26%186,131,1921.39%-0.13%Nomajorchange
Inventory2,936,133,26022.10%2,606,781,43619.48%2.62%Mainlyowingtotheyear-on-yearincreaseinwork-in-processincludingbulkwineattheendofreportperiod
Investmentrealestate28,344,6870.21%30,560,4700.23%-0.02%Nomajorchange
Long-termequityinvestment42,810,4450.32%00%0.32%MainlyowingtotheestablishmentofSASL&MHOLDINGS
Fixedassets5,818,499,84543.79%5,684,612,65342.48%1.31%Mainlyowingtothetransfer-inofconstructioninprocessduringthereportperiod
Constructioninprocess647,036,5934.87%789,872,3735.90%-1.03%Mainlyowingtothetransferofconstructioninprocessintofixedassetsduringthereportperiod
Short-termborrowing737,183,7015.55%678,170,6675.07%0.48%Mainlyowingtotheincreaseinshort-termbankloaninthesecondhalfyearoflastyear
Long-termloan218,613,3361.65%165,949,2501.24%0.41%Nomajorchange

2)Measuringassetsandliabilitiesatfairvalue□Available?Notavailable

3)LimitationsofassetsrightsuptotheendofthereportperiodForthelimitationsofassetsrightsuptotheendofthereportperiod,pleaserefertoAnnouncementonExternalGuarantee(Announcementno.:2016-temporary021),AnnouncementonExternalGuarantee(Announcementno.:2018-temporary020),AnnouncementonExternalGuarantee(Announcementno.:2019-temporary038)andAnnouncementonGuaranteeprovidedbySpanishAtrioCompanyforBankLoan(Announcementno.:2020-temporary013)disclosedonChinaSecuritiesJournal,SecuritiesTimesandCNINFO(http://www.cninfo.com.cn/).

5.Investmentsituationanalysis

1)Overallsituation?Available□Notavailable

Amountofinvestmentduringthereport

period(CNY)

Amountofinvestmentduringthereportperiod(CNY)Amountofinvestmentinthesameperiodoflastyear(CNY)Extentofchange
180,460,000210,000,000-14.07%

2)Situationofmajorequityinvestmentsacquiredduringthereportperiod?Available□Notavailable

Unit:CNY

NameoftheinvestedcompanyMainbusinessesInvestmentmodeInvestmentamountShareholdingratioCapitalsourcePartnersInvestmenthorizonProducttypeProgressuptothebalancesheetdateEstimatedprofitInvestmentprofitandlossforcurrentperiodWhetherornottoprosecuteDisclosuredateDisclosureindex
HaciendaYVinedosMarquesProductionandsalesofwinesAcquisition40,460,00015%Self-ownedCompleted00NoApril24th,2020AnnouncementonAcquiring

DelAtrio,SL

DelAtrio,SLPartialEquityofSpanishAtrioCompany(announcementnumber:2020-Temporary14)disclosedonChinaSecuritiesJournal,SecuritiesTimesandCNINFO
Total--40,460,000------00---

3)Situationofongoingmajornon-equityinvestmentsduringthereportperiod?Available□Notavailable

Unit:CNY

ProjectnameInvestmentmodeWhetheritbelongstofixedInvolvedindustryInvestmentamountduringtheAccumulatedactualinvestmentCapitalsourceProcessofprojectEstimatedincomeAccumulatedrealizedincomeupReasonsforunreachedDisclosuredateDisclosureindex

assetsinvestment

assetsinvestmentreportperiodamountuptotheendofthereportperiodtotheendofthereportperiodplanningscheduleandestimatedincome
ConstructionprojectofYantaiChangyuInternationalWineCityblendingandcoolingcenterSelf-constructedYesLiquorandalcoholicbeverageindustry52,760,0001,679,054,100Ownedfund100%00——2017.04.22PleaserefertoAnnouncementonResolutionofSeventhSessionBoardofDirectors4thMeeting,AnnouncementonResolutionofSeventhSessionBoardofDirectors8thMeeting,AnnouncementonResolutionofSeventhSessionBoardofDirectors10thMeetingandAnnouncementonResolutionofEighthSessionBoardof
ConstructionprojectofYantaiChangyuInternationalWineCitybottlingcenterSelf-constructedYesLiquorandalcoholicbeverageindustry79,560,0001,083,760,000Ownedfund100%00——2017.04.22
ConstructionprojectofYantaiChangyuSelf-constructedYesLiquorandalcoholicbeverageindustry0462,677,200Ownedfund100%00——2017.04.22

Directors4th

MeetingdisclosedonChinaSecuritiesJournal,SecuritiesTimesandCNINFO(http://www.cninfo.com.cn/)

InternationalWineCitylogisticscenterDirectors4thMeetingdisclosedonChinaSecuritiesJournal,SecuritiesTimesandCNINFO(http://www.cninfo.com.cn/)
ConstructionprojectofChangyugrapeandwineresearchinstituteSelf-constructedYesLiquorandalcoholicbeverageindustry0122,974,800Ownedfund85%00——2017.04.22
ConstructionprojectoftreasurewinechateauSelf-constructedYesLiquorandalcoholicbeverageindustry0128,820,000Ownedfund75%00——2017.04.22
ConstructionprojectofChateauKoyabrandySelf-constructedYesLiquorandalcoholicbeverageindustry0147,329,000Ownedfund85%00——2017.04.22
OakBarrelProcurementProjectSelf-constructedYesLiquorandalcoholicbeverageindustry00Ownedfund0%00——2020.04.24
ConstructionprojectofindustrialSelf-constructedYesLiquorandalcoholicbeverage850,00041,300,000Ownedfund100%00——2018.04.20

productionSAPinformation

productionSAPinformationindustry
ProcurementprojectofautomaticuniblocequipmentforYantaichateauSelf-constructedYesLiquorandalcoholicbeverageindustry4,650,0004,650,000Ownedfund100%00——2018.04.20
ConstructionprojectofchangyusuppliermanagementplatformandequipmentmanagementplatformSelf-constructedYesLiquorandalcoholicbeverageindustry2,180,0002,180,000Ownedfund60%00——2018.04.20
Total140,000,0003,672,745,10000——----

4)Financialassetsmeasuredatfairvalue

□Available?Notavailable

5)Financialassetsinvestment

(1)Securityinvestment

□Available?NotavailableThereisnosecurityinvestmentfortheCompanyduringthereportperiod.

(2)Derivativeinvestment

□Available?NotavailableThereisnoderivativeinvestmentfortheCompanyduringthereportperiod.

6.Saleofmajorassetsandequities

1)Saleofmajorassets□Available?NotavailableThereisnosaleofmajorassetsduringthereportperiod.

2)Saleofmajorequity□Available?Notavailable

7.Analysistothemajorholdingandjointstockcompanies?Available□NotavailableSituationofmainsubsidiariesaswellasjointstockcompaniesaffectingover10%oftheCompany’snetprofit

Unit:CNY

Company

CompanyCompanyMainbusinessRegisteredcapitalTotalassetsNetassetOperationOperationNetProfit

name

nametyperevenueprofit
ChateauChangyuCastelCo.,Ltd.YANAISubsidiaryDevelopment,productionandsalesofwineandsparklingwineaswellasthetourismserviceUSD5million243,749,06380,551,41715,274,042-444,167-416,327
ChateauChangyuAFIPGlobalWineCo.,Ltd.SubsidiaryDevelopment,productionandsalesofbrandyandwineCNY642.75million691,598,867655,545,91050,688,043-1,813,776-2,919,024
ChateauLiaoningChangyuIceWineCo.,Ltd.SubsidiaryProductionoficewineCNY59.6873million71,856,64744,937,9607,365,586-4,517,358-4,410,928
HaciendaYVinedosMarquesDelAtrio,SLSubsidiaryProductionandmanagementofwineandotherliquorsEUR2.385732million509,150,792137,006,195130,982,53612,630,03610,940,963
IndomitaWineCompanyChile,SpASubsidiaryProductionandmanagementofwineandotherliquorsUSD47.19million504,027,375363,463,69178,507,2272,732,1033,664,211
KilikanoonEstatePtyLtd.SubsidiaryProductionandmanagementofwineandotherliquorsAUD6.529221million167,190,08582,374,25518,928,9101,271,810890,266

Acquisitionanddisposalofsubsidiariesduringthereportperiod?Available□Notavailable

CompanynameModeofAcquisitionanddisposalofsubsidiariesduringthereportperiodEffectonoverallproductionandmanagementaswellasperformance
YantaiChangyuCulturalTourismDevelopmentCo.,Ltd.TransferofequityastransfereeAsasunriseindustrythatChinastronglysupports,tourismhasgreatpotentialfordevelopment.TheCompany’sindustrialtourismbusinesshasafavorabledevelopmentprospect.Beforethen,duetoseparateoperations,itfailstoformajointforce,restrictingdevelopmentandgrowthofbothparties’tourismbusiness.Throughthetransferofequityastransferee,itcouldbetterintegratebothparties’tourismbusiness,enrichandimprovetourismproductsandcreatesynergisticeffects,acceleratingandpromotingthedevelopmentoftheCompany’stourismbusiness

Explanationformainholdingandjointstockcompanies

Duringthereportperiod,ChateauChangyuCastelCo.,Ltd.YANAI,ChateauChangyuAFIPGlobalWineCo.,Ltd.andChateauLiaoningChangyuIceWineCo.,Ltd.incurredoperatinglosses,mainlyowingtothereduceintheproductsalesvolumeaffectedbyCOVID-19.OwingthatabovecompaniessoldtheirproductstotheCompany’ssalesunitsandthentheCompany’ssalesunitssoldproductstoexternalclientsandcustomers,thelossesofabovecompaniesareonlythosearisingfromitsownsaleswithintheCompany.Seenfromtheoverallsituation,ifcombiningtheprofitobtainedfromtheexternalsalesoftheCompany'ssalesunits,theCompany'sproductionandoperationofabove-mentionedcompanies’productsareallprofitable.

8.SituationofstructuredsubjectcontrolledbytheCompany

□Available?Notavailable

9.ForecastfortheoperatingperformancefromJanuarytoSeptemberof2019Cautionandexplanationforthepredictionthatthecumulativenetprofitfromthebeginningoftheyeartotheendofnextreportperiodcouldbeinalossortherewillbeinagreatchangecomparedwiththesameperiodoflastyear.

□Available?Notavailable

10.RisksfacedwithbytheCompanyandresponsemeasures

1)RisksinpricefluctuationofrawmaterialsGrapesaretheCompany’smainrawmaterials.Thegrape’syieldandqualityareaffectedtoacertainextentbythenaturalfactorssuchasdrought,wind,rain,frostandsnow.TheseforcemajeurefactorsgreatlyinfluencetheprocurementquantityandpriceofrawmaterialsandaddtheuncertaintytotheCompany’sproductionandoperation.Therefore,theCompanywilllowerthefluctuationrisksofgrapequalityandpricebymeansofstabilizingtheareaofself-rungrapebases,strengtheningthemanagementofgrapebasesandoptimizingthelayoutofgrapebases.

2)RisksinuncertaintyofmarketinputandoutputTocopewithincreasinglyfiercemarketcompetitionandtomeettheneedsformarketdevelopment,theCompanywillmaintaincertainmarketinput.Theproportionofsalesexpenseintheoperationrevenueisalsohigh.ThesituationofinputandoutputwillaffecttheCompany’sbusinessperformancetoagreatextentandtheremightoccurtheriskthatpartialinputmaynotreachtheexpectations.Therefore,theCompanywillstrengthenmarketresearchandanalysis,enhancemarketforecastaccuracyandcontinueperfectingtheinput-outputevaluationsystemtoensurethemarketinputtoreachtheexpectations.

3)RisksinproducttransportationTheCompany’sproductsarefragileandsoldtoallovertheworldmostlybyseatransportation,railwaytransportationandroadtransportation.Thepeakseasonofsalesisusuallyincoldwinterandisclosetothespringfestivalwhenthereisagreatneedinthemarket.However,atthistime,thedomestictransportationdepartmentsmaybeoverloadedbytheflowofpeopleandlogistics,causingseriousshortageoftransportationcapacity.In

additiontonaturalandhumanfactorssuchassnow,iceandtrafficaccidentsandsoon,thereisapossibilitythatitisdifficulttosafelyandtimelytransportproductstothemarket,thusfacingthepotentialriskofmissingsalespeakseason.Therefore,thecompanywillstrivetoreducesuchrisksbydoingwellsalesforecastsandtheconnectionbetweenproductionandsales,rationallyarrangingproductionandtransportationroutesandreasonablyincreasingoff-siteinventorybeforethecomingofpeakseasonandsoon.

4)RisksininvestmentfaultsAccordingtotheprogramme,theCompanyhasbasicallycompletedtheproductionlayoutathomeandabroad.TheinvestmentamountofYantaiChangyuIndustrialPark(inotherwordsYantaiChangyuInternationalWineCity)islarge,buttherearemanyuncertaintiesindomesticwinemarket,whichmaylengthentheinvestmentrecoveryperiod.Moreover,theintegrationandmanagementofoverseasM&Aprojectsaredifficultanditmightalsobedifficultforsomeindividualprojectstoobtaintheexpectedinvestmentincomeowingtobeingaffectedbyvariousfactors.Therefore,theCompanywillmakesufficientdemonstrationandscientificdecisiononinvestmentprojectsandstrivetoreduceandavoidinvestmentrisks.

5)RiskinmarketfluctuationAffectedbyCOVID-19epidemic,theCompany’sofflinechannelshavebeenseverelyimpacted,traditionalmarketingmethodsweredifficulttobecarriedouteffectively,andproductdemandshaveshrunksharply.TheCompanywillacceleratethepaceofdigitalmarketingtransformation,vigorouslyexpandonlinesalesbusinessandpromoteproductsales.

V.Majorissues

1.InformationfortheShareholders’MeetingandInterimShareholders’Meetingheldduringthereportperiod

1)InformationfortheShareholders’Meetingduringthereportperiod

Session

SessionMeetingtypeParticipationratioofinvestorsConveningdateDisclosuredateDisclosureIndex
2019AnnualShareholders’MeetingAnnualshareholders’meeting58.32%2020.05.272020.05.28AnnouncementonResolutionof2019AnnualShareholders’MeetingdisclosedinChinaSecuritiesJournal,SecuritiesTimesandCNINFO
FirstInterimShareholders’Meetingin2020Interimshareholders’meeting58.33%2020.06.192020.06.20AnnouncementonResolutionofFirstInterimShareholders’Meetingin2020disclosedinChinaSecuritiesJournal,SecuritiesTimesandCNINFO

2)RequestforconveningInterimShareholders’Meetingbypriorityshareholdersowingrecoveredvotingright

□Available?Notavailable

2.Situationofprofitdistributionandcapitalizationofcapitalreserveintosharecapitalduringthereportperiod

□Available?NotavailableTheCompanyplansnottodistributecashdividendsorgivebonussharesormakecapitalizationofcapitalreserveintosharecapital.

3.CommitmentsthattheCompany’sactualcontrollers,shareholders,relatedparties,acquirersandtheCompanyandotherrelatedcommitmentpartieshaveimplementedduringthereportperiodandhavenotimplementeduptotheendofthereportperiod?Available□Notavailable

Commitments

CommitmentsCommitmentpartyCommitmenttypeCommitmentcontentCommitmenttimeCommitmentperiodImplementation
Commitmentsatequityreformation
Commitmentsmadeinacquisitionreportorequitychangereport
Commitmentsatassetrestructuring
CommitmentsattheinitialpublicofferingorYantaiChangyuGroupCo.,Ltd.SolvehorizontalcompetitionNon-horizontalcompetitionMay18th,1997ForeverHasbeenperforming

refinancing

refinancingYantaiChangyuGroupCo.,Ltd.CleartheuseoftrademarkusefeeAccordingtoTrademarkLicenseContract,thetrademarkusefeeofChangyuandothertrademarkspaidbythisCompanytoYantaiChangyuGroupCo.,Ltd.everyyearismainlyusedforadvertisingChangyuandothertrademarksandthecontractualproductsbyYantaiChangyuGroupCo.,Ltd..May18th,1997FromMay18th,1997toApril4th,2019AccordingtoTrademarkLicenseContract,thetrademarkusefeeannuallychargedbyYantaiChangyuGroupCo.,Ltd.shallbemainlyusedtopublicizetrademarksincludingChagnyuandcontractualproducts.Except2013to2017duringwhichthecommitmentwasnotstrictlyperformed,YantaiChangyuGroupCo.,Ltd.hasbeenperformingthecommitment.
Equityincentivecommitments
CommitmentsatmiddleandsmallshareholdersoftheCompanyYantaiChangyuGroupCo.,Ltd.Compensatingunredeemedcommitment
April4th,2019FromApril4th,2019toDecember31st,2023Hasbeenperforming

insufficient,theshortfallwouldbefilledinonetimein2023.Ifthereisanyexcess,theexcessportionofthetrademarkusefeewouldbecollectedfromtheyearwithexcessoccurrence.

insufficient,theshortfallwouldbefilledinonetimein2023.Ifthereisanyexcess,theexcessportionofthetrademarkusefeewouldbecollectedfromtheyearwithexcessoccurrence.
CommitmentundertimelyimplementationornotNo
DetailedexplanationforspecificreasonsofunimplementedcommitmentaswellasnextworkplanifcommitmentisnotcompletedinthecommitmentperiodAccordingtotheTrademarkLicenseContract(hereafterreferredtoas“theContract”),ChangyuGrouppromisesthatthetrademarkusefeeannuallypaidbytheCompanytoChangyuGroupshallbemainlyusedbyChangyuGrouptopublicizetrademarksandcontractualproducts.Butabove-mentioned‘mainly’isnotaspecificnumber,whichiseasytocausedivergenceduetodifferentunderstandingandleadstoproblemappearanceduringtheimplementationprocess.From2013to2017,ChangyuGroupcollectedatotalofCNY420,883,902trademarkusefee,ofwhich51%wasusedtopublicizetrademarksincludingChangyuandcontractproductswithamountofCNY214,650,790.TheamounthasbeenusedtopublicizetrademarksincludingChangyuandcontractproductsisCNY50,025,181,withabalanceofCNY164,625,609.In2018and2019,thetrademarkusefeecollectedof2017and2018isCNY155,623,907,ofwhich51%isusedtopublicizetrademarksincludingChangyuandcontractproductswithamountofCNY79,368,193.TheamounthasbeenusedtopublicizetrademarksincludingChangyuandcontractproductsisCNY12,225,187,withabalanceofCNY67,143,006.Since2013,theaccumulatedbalanceofChangyuGroupusingtopublicizetrademarksincludingChangyuandcontractproductsisCNY231,768,615.ChangyuGrouppromisesthatthefour-yeartrademarkusefeefrom2019to2022willbeusedforoffset.Ifinsufficient,theshortfallwouldbefilledinonetimein2023.Ifthereisanyexcess,theexcessportionofthetrademarkusefeewouldbecollectedfromtheyearwithexcessoccurrence.IfChangyuGroupisnotabletoimplementtheabove-mentionedcommitmentowingtovariousreasons,theCompanywilltimely

superviseandurgeChangyuGrouptofulfillitscommitmentandrequestChangyuGrouptoraisefundsthroughbankloaning,assetssalesandequitysalesetcinordertoimplementthecommitment.Forotherdetails,pleaserefertoAnnouncementonCommitmentIssuesofYantaiChangyuGroupCompanyLimiteddisclosedbytheCompanyonApril4

th,2019.

4.TheappointmentanddismissalofcertifiedpublicaccountantsWhetherthesemi-annualreporthasbeenaudited□Yes?NoThesemi-annualreporthasnotbeenaudited.

5.Explanationfromtheboardofdirectorsandtheboardofsupervisorsforthe“Non-standardAuditReport”duringthisreportperiod?Available?Notavailable

6.Explanationfromtheboardofdirectorsforthe“Non-standardAuditReport”oflastyear?Available?Notavailable

7.Issuesrelatedwithbankruptcyreorganization□Available?NotavailableTherearenorelatedissuesofbankruptcyreorganizationhappenedattheendofthereportperiod.

8.LitigationIssue

Materiallitigationandarbitration□Available?NotavailableTherearenomateriallitigationandarbitrationduringthereportperiod.OtherLitigationIssue

□Available?Notavailable

9.Questionsfrommedia□Available?NotavailableTherearenoquestionsfrommediaduringthereportperiod.

10.Penaltyandrectification

□Available?NotavailableTherearenopenaltyandrectificationduringthereportperiod.

11.CreditoftheCompany,itscontrollingshareholderandactualcontroller?Available?Notavailable

12.ImplementationoftheCompany’sequityinventiveplan,employeestockownershipplanorotheremployeeincentivemeasures

□Available?NotavailableTherearenoimplementationoftheCompany’sequityinventiveplan,employeestockownershipplanandotheremployeeincentivemeasuresduringthereportperiod.

13.Majorrelatedtransactions

1)Relatedtransactionsinrelationtoroutineoperations?Available□Notavailable

Relatedparty

RelatedpartyRelationshipTypeContentPricingprinciplePriceAmount(CNY‘0000)ProportioninsimilartransactionsApprovedtransactionquota(CNY‘0000)WhetherexceedingapprovedtransactionquotaClearingformAvailablemarketpriceofsimilartransactionsDisclosuredateDisclosureindex
YantaiShenmaPackagingCo.,Ltd.ControlledbythesameparentcompanyPurchaseandmanufacturingconsignmentPurchaseandmanufacturingconsignmentofpackagingmaterialsContractualpricingDeterminedbyagreement3,56211.23%10,200NoCashNoApril24th,2020Announcementon2020AnnualRoutineRelatedTransaction(Announcementno.:2020-Temporary08)disclosedinChinaSecuritiesJournal,SecuritiesTimesandCNINFO
Total--3,562-10,200-----
DetailsinformationaboutthereturnoflargesalesNo
Actualperformanceoftheestimatedtotalamountfordailyrelatedtransactionsthatwilloccurduringthisreportperiodbycategory(ifhave)No
Reasonforthebiggerdeferencebetweentransactionpriceandmarketreferenceprice(ifapplicable)No

2)Relatedtransactionsinrelationtoacquisitionandsalesofassetsorequity

□Available?NotavailableTherearenorelatedtransactionsinrelationtoacquisitionorsalesofassetsorequityduringthereportperiod.

3)Relatedtransactionsinrelationtocommonforeigninvestment□Available?NotavailableTherearenorelatedtransactionsinrelationtocommonforeigninvestmentduringthereportperiod.

4)Relatedcreditanddebtdealings?Available□NotavailableWhetherornotexistingnon-operatingrelatedcreditanddebttransactions

□Yes?NoTherearenonon-operatingrelatedcreditanddebttransactionsduringthereportperiod.

5)Othermajorrelatedtransactions?Available□NotavailableDisclosurewebsiteofinterimreportformajorrelatedtransaction

Nameofinterimannouncement

NameofinterimannouncementDisclosuredateofinterimannouncementNameofdisclosurewebsiteforinterimannouncement
Announcementon2020AnnualRoutineRelatedTransactionApril24th,2020http://www.cninfo.com.cn
AnnouncementonTransferringKoyaandotherbrandsofYantaiChangyuGroupCo.,Ltd.asTransfereeApril24th,2020http://www.cninfo.com.cn
AnnouncementonTransferringFullEquityofYantaiChangyuCulturalTourismDevelopmentCo.,Ltd.asTransfereeApril24th,2020http://www.cninfo.com.cn

14.Non-operatingcapitaloccupyingoftheCompanybycontrollingshareholderanditsrelatedparties

□Available?NotavailableThereisnonon-operatingcapitaloccupyingoftheCompanybycontrollingshareholderanditsrelatedpartiesduringthereportperiod.

15.Majorcontractsandexecutioncondition

1)Trusteeship,contractandleaseissues

(1)Trusteeshipsituation

□Available?NotavailableThereisnotrusteeshipsituationduringthereportperiod.

(2)Contractsituation?Available□NotavailableExplanationforcontractsituationFortheCompany’scontractoperationsituationduringthereportperiod,pleasereferto“23.Otherpayables”inNote7“Notesonconsolidatedfinancialstatement”inthefinancialreportofthisreport.ProjectwhoseprofitandlossbroughtfortheCompanyreachmorethan10%ofthetotalprofitduringthereportperiod□Available?NotavailableTherearenocontractprojectswhoseprofitandlossbroughtfortheCompanyreachmorethan10%ofthetotalprofitduringthereportperiod.

(3)Leasesituation?Available□NotavailableExplanationforleasesituationOnJanuary1

st,2017,theCompanyrenewedtheSpaceLeaseAgreementwiththecontrollingshareholderYantaiChangyuGroupCompanyLimited.TheCompanyleasedthespacewith15,196.94squaremeterslocatingatNo.174ShihuiyaoRoad,ZhifuDistrict,YantaiCity.TherentperyearisCNY1.4645millionwitharentalperiodof5yearsfromJanuary1

st

,2017toDecember31

st,2021.OnJanuary1

st,2017,theCompany’ssubordinateSales&MarketingCo.ofYantaiChangyuPioneerWineCompanyLimitedBrandySalesDivisionrenewedtheSpaceLeaseAgreementwiththecontrollingshareholderYantaiChangyuGroupCompanyLimited,leasingthespacewith42,552.83squaremeterslocatingatNo.1JichangRoad,ZhifuDistrict,YantaiCityandthespacewith3,038squaremeterslocatingat56DamaRoad,ZhifuDistrict,YantaiCity,whichareallunderthenameofcontrollingshareholder.TherentofabovespacesperyearisCNY4.3935millionwitharentalperiodof5yearsfromJanuary

st

,2017toDecember31

st,2021.OnJuly1

st,2017,thisCompanysignedahouse-leasingcontractwithYantaiShenmaPackagingCompanyLimited.Accordingtothiscontract,sinceJuly1

st

,2017,thisCompanyleasedpropertytoYantaiShenmaPackagingCompanyLimitedforabusinesspurposewiththeannualrentofCNY1,626,880.ThiscontractexpiresonJune30

th

,2022.ProjectwhoseprofitandlossbroughtfortheCompanyreachmorethan10%ofthetotalprofitduringthereportperiod

□Available?NotavailableTherearenoleaseprojectswhoseprofitandlossbroughtfortheCompanyreachmorethan10%ofthetotalprofitduringthereportperiod.

2)Majorguarantee?Available□Notavailable

(1)Guaranteesituation

Unit:CNY’0000

ExternalguaranteeoftheCompanyanditssubsidiaries(excludingguaranteetosubsidiaries)

ExternalguaranteeoftheCompanyanditssubsidiaries(excludingguaranteetosubsidiaries)
GuaranteeobjectnameDisclosuredateofrelatedannouncementaboutguaranteequotaGuaranteequotaActualdateofoccurrence(dateofagreement)ActualguaranteeamountGuaranteetypeGuaranteePeriodWhetherornotcompleteimplementationWhetherornotbelongtorelated-partyguarantee
YantaiEconomicandTechnologicalDevelopmentZoneManagementCouncil2016.12.2234,1602016.12.2134,160Mortgage;Pledge10yearsNoNo
Totaloftheexternalguaranteequotaapprovedduringthereportperiod(A1)0Totaloftheactualexternalguaranteeamountduringthereportperiod(A2)0
Totaloftheexternalguaranteequotaapprovedattheendofthereportperiod(A3)34,160Balanceoftheactualexternalguaranteeattheendofthereportperiod(A4)34,160
GuaranteesituationsbetweentheCompanyandsubsidiaries
GuaranteeobjectnameDisclosuredateofrelatedannouncementaboutguaranteequotaGuaranteequotaActualdateofoccurrence(dateofagreement)ActualguaranteeamountGuaranteetypeGuaranteePeriodWhetherornotcompleteimplementationWhetherornotbelongtorelated-partyguarantee
YantaiChangyuWineResearchandDevelopmentCompanyLimited2016.12.2272,1762016.12.2172,176Jointliabilityassurance;Mortgage10yearsNoNo
KilikanoonEstatePtyLtd.2018.12.058,5502018.12.068,550Jointliabilityassurance5yearNoNo

Totaloftheapprovedguaranteequotatosubsidiariesduringthereportperiod(B1)

Totaloftheapprovedguaranteequotatosubsidiariesduringthereportperiod(B1)0Totaloftheactualguaranteeamountforsubsidiariesduringthereportperiod(B2)0
Totaloftheapprovedguaranteequotatosubsidiariesattheendofthereportperiod(B3)80,726Balanceoftheactualguaranteeforsubsidiariesattheendofthereportperiod(B4)80,726
Guaranteesituationsbetweensubsidiaries
GuaranteeobjectnameDisclosuredateofrelatedannouncementaboutguaranteequotaGuaranteequotaActualdateofoccurrence(dateofagreement)ActualguaranteeamountGuaranteetypeGuaranteePeriodWhetherornotcompleteimplementationWhetherornotbelongtorelated-partyguarantee
---------
Totaloftheapprovedguaranteequotatosubsidiariesduringthereportperiod(C1)0Totaloftheactualguaranteeamountforsubsidiariesduringthereportperiod(C2)0
Totaloftheapprovedguaranteequotatosubsidiariesattheendofthereportperiod(C3)0Balanceoftheactualguaranteeforsubsidiariesbytheendofthereportperiod(C4)0
TotalguaranteeamountoftheCompany(Totalofabovethreemajoritems)
Totaloftheapprovedguaranteequotaduringthereportperiod(A1+B1+C1)0Totaloftheactualguaranteeamountduringthereportperiod(A2+B2+C2)0
Totaloftheapprovedguaranteequotaattheendofthereportperiod(A3+B3+C3)114,886Balanceoftheactualguaranteebytheendofthereportperiod(A4+B4+C4)114,886
Theproportionofactualtotalguaranteeamount(A4+B4+C4)accountingfortheCompany’snetasset11.34%
Among:
Balanceofguaranteeforshareholders,actualcontrollersandtheirrelatedparties(D)0

Balanceofdirectorindirectdebtguaranteefortheguaranteedobjectswhoseasset-liabilityratioismorethan70%(E)

Balanceofdirectorindirectdebtguaranteefortheguaranteedobjectswhoseasset-liabilityratioismorethan70%(E)0
Amountofthepartintotalguaranteeamountthatexceed50%ofnetassets(F)0
Totalamountoftheabove-mentionedthreeitems(D+E+F)0
ExplanationforundueguaranteesthatmightbearjointandseveralresponsibilitiesforclearingthedebtsduringthereportperiodNo
Explanationforviolatingdueprocesstoprovideexternalguarantee(ifhave)No

ExplanationonspecificsituationsofadaptingguaranteebycomplexmethodsNo.

(2)Illegalexternalguarantee

□Available?NotavailableThereisnoillegalguaranteeduringthereportperiod.

3)Financialmanagemententrustment□Available?NotavailableThereisnofinancialmanagemententrustmentduringthereportperiod.

4)Othermajorcontracts□Available?NotavailableTherearenoothermajorcontractsduringthereportperiod.

16.Situationforsocialresponsibility

1)MajorenvironmentalsituationWhetherthelistedcompanyanditssubsidiariesbelongtomajorpolluterspublishedbytheenvironmentalprotectiondepartmentYes

Nameofcompany

orsubsidiary

NameofcompanyorsubsidiaryNameofmajorpollutantsandparticularpollutantsModeofdischargeQuantityofdischargeoutletDistributionsituationofdischargeoutletDischargeconcentrationImplementedpollutiondischargestandardTotalvolumeofdischargeTotalapprovedvolumeofdischargeConditionofexcessivedischarge
LiaoningChangyuIcewineChateauCo.,Ltd.Organizedexhaustgas,inorganizedexhaustgas,wasterwater,noiseDischargeoutletofboilerchimneyanddischargeoutletoffactorywastewater2ConfirmedinlinewithnationalstandardGraphicalSignsforEnvironmentalProtection(GB15562.1-1995)(GB15562.2-1995)MeetingthenationalstandardsEmissionStandardforAirPollutantsofBoiler(GB13271-2014),EmissionStandardforOdorPollutants(GB14554-93),4ainClass2ofEmissionStandardforEnvironmentalNoiseattheBoundaryof35m3/d120m3/dNo

IndustrialEnterprises(GB12348-2008),,ComprehensiveWastewaterDischargeStandardofLiaoningProvince(DB21/1627-2008)

ConstructionandoperationofpollutionpreventionfacilitiesTheexhaustgas,SO

andNOXproducedbythiscompany'sboileraredischargedthroughceramictubedustremoversandbagdustremovers.Awastewatertreatmentstationhasbeenconstructed.Thewastewatertreatmentprocessadoptsthetreatmentprocessofhydrolysis-aerobiont.Productionwastewateranddomesticsewagearetreatedbythein-plantwastewatertreatmentstationandthendischargedintothewastewatertreatmentplantinBeidianzixiangTown.EnvironmentalimpactassessmentofconstructionprojectsandotherenvironmentalprotectionadministrativepermitsIthasbeenapprovedintheHuanhuanjianzi(2016)No.24issuedbytheEnvironmentalProtectionBureauofHuanrenManchuAutonomousCounty.EmergencyplanforemergentenvironmentalincidentTheCompanyhasformulatedacomprehensiveemergencyplanforemergentenvironmentalincident.Environmentalself-monitoringprogramTheCompanyhasformulatedacompleteenvironmentalself-monitoringprogram.OtherenvironmentalinformationthatshouldbemadepublicNoOtherrelatedenvironmentalinformationNo

2)Situationforcarryingoutsocialresponsibilityoftargetedpovertyalleviation

(1)TargetedpovertyalleviationplanNo

(2)Summaryofsemi-annualtargetedpovertyalleviationNo

(3)EffectivenessoftargetedpovertyalleviationNo

(4)SubsequentplanfortargetedpovertyalleviationNo

17.Explanationforothermajorissues

□Available?NotavailableTherearenoothermajorissuesneedtobeexplainedduringthereportperiod.

18.MajorissuesoftheCompany’ssubsidiaries

□Available?Notavailable

VI.ChangesinSharesandtheShareholders’Situation

1.Changesinshares

1)Changesinshares

Unit:share

Amountbeforethischange

AmountbeforethischangeChangeatthistime(+,-)Amountafterthischange
AmountPercentage%IssuingnewshareDistributebonusshareTransfercapitalreservetosharecapitalothersSubtotalAmountPercentage%
1.Unrestrictedshares685,464,000100%685,464,000100%
(1)Ashares453,460,80066.15%453,460,80066.15%
(2)Bshares232,003,20033.85%232,003,20033.85%
2.Totalshares685,464,000100%685,464,000100%

Reasonofchangesinshares

□Available?NotavailableApprovalofchangesinshares

□Available?Notavailable

Ownershiptransferofchangesinshares□Available?NotavailableImplementationprogressofsharebuy-back□Available?NotavailableImplementationprogressofreducingrepurchasedsharesbythewayofcentralizedbidding□Available?NotavailableTheinfluenceofchangesinsharesonfinancialindicatorsinthemostrecentyearandthemostrecentreportperiod,suchasbasicearningspershare,dilutedearningspershareandnetassetpershareattributabletotheCompany’scommonshareholdersandsoon□Available?NotavailableOthercontentsthattheCompanythinksnecessaryorsecuritiesregulatorydepartmentsasktodisclose.

□Available?Notavailable

2)Changesinrestrictedshares

□Available?Notavailable

2.Securitiesissuanceandlistingsituation

□Available?Notavailable

3.SituationforthenumberofshareholdersandshareholdingsoftheCompany

Unit:

share

Totalcommonshareholdersattheendofreportperiod

Totalcommonshareholdersattheendofreportperiod44,334Totalnumberofpreferredshareholderrecoveringvotingpowerattheendofreportperiod0
Shareholdersholdingmorethan5%orshareholdingsofthetop10commonshareholders
NameofShareholderCharacterofshareholderShareholdingratioCommonshareheldattheendofthereportperiodChangesduringthereportperiodNumberofrestrictedcommonshareNumberofunrestrictedcommonsharePledgedorfrozen
SharestatusAmount
YANTAICHANGYUGROUPCO.,LTD.Domesticnon-state-ownedlegalperson50.40%345,473,85600345,473,856-0
GAOLINGFUND,L.P.Foreignlegalperson3.08%21,090,2190021,090,219-0
CHINASECURITIESFINANCECORPState-ownedlegalperson2.25%15,440,7940015,440,794-0
BBHBOSS/AFIDELITYFD-CHINAFOCUSFDForeignlegalperson2.22%15,241,8260015,241,826-0
SHENWANHONGYUANSECURITIES(HONGKONG)LIMITEDForeignlegalperson1.20%8,235,333-8,00008,235,333-0
HONGKONGSECURITIESCLEANINGCO.,LTD.Foreignlegalperson1.14%7,815,0145,823,27307,815,014-0
FIDELITYPURITANTRUST:FIDELITYForeignlegalperson0.93%6,350,762006,350,762-0

SERIESINTRINSICOPPORTUNITIESFUND

SERIESINTRINSICOPPORTUNITIESFUND
GUOTAIJUNANSECURITIES(HONGKONG)LIMITEDForeignlegalperson0.76%5,224,746414,40105,224,746-0
CENTRALHUIJINASSETMANAGEMENTLTD.State-ownedlegalperson0.69%4,761,200004,761,200-0
HAITONGINTERNATIONALSECURITIESCOMPANYLIMITED-ACCOUNTCLIENTForeignlegalperson0.60%4,139,1871,429,49204,139,187-0
SituationofStrategicinvestorsorgenerallegalpersonbecomingthetop10shareholdersowingtoplacingofnewshares(ifhave)(seenote3)No
Explanationforaboveshareholders’associatedrelationshiporconcertedactionAmongthetop10shareholders,YantaiChangyuGroupCompanyLimitedhasnoassociatedrelationshiporconcertedactionrelationshipwiththeother9circulatingshareholders,andtherelationshipamongtheothershareholdersisunknown.
Shareholdingsoftop10commonshareholderswithunrestrictedshares
NameofShareholdersNumberofunrestrictedsharesheldattheendofthereportperiodTypeofshare
TypeofshareAmount
YANTAICHANGYUGROUPCO.LTD.345,473,856A345,473,856
GAOLINGFUND,L.P.21,090,219B21,090,219

CHINASECURITIESFINANCECORP

CHINASECURITIESFINANCECORP15,440,794A15,440,794
BBHBOSS/AFIDELITYFD-CHINAFOCUSFD15,241,826B15,241,826
SHENWANHONGYUANSECURITIES(HONGKONG)LIMITED8,235,333B8,235,333
HONGKONGSECURITIESCLEANINGCO.,LTD.7,815,014A7,815,014
FIDELITYPURITANTRUST:FIDELITYSERIESINTRINSICOPPORTUNITIESFUND6,350,762B6,350,762
GUOTAIJUNANSECURITIES(HONGKONG)LIMITED5,224,746B5,224,746
CENTRALHUIJINASSETMANAGEMENTLTD.4,761,200A4,761,200
HAITONGINTERNATIONALSECURITIESCOMPANYLIMITED-ACCOUNTCLIENT4,139,187B4,139,187
Explanationforassociatedrelationshiporconcertedactionamongtop10commonshareholderswithunrestrictedsharesandbetweentop10commonshareholderswithunrestrictedsharesandtop10commonshareholdersAmongthetop10shareholders,YantaiChangyuGroupCompanyLimitedhasnoassociatedrelationshiporconcertedactionrelationshipwiththeother9circulatingshareholders,andtherelationshipamongtheothershareholdersisunknown.
Explanationfortop10commonshareholderswhoareinvolvedinsecuritiesmargintradingbusinessThetop10shareholdersarenotinvolvedinsecuritiesmargintradingbusiness.

WhetherornottheCompany’stop10commonshareholdersandtop10shareholderswithunrestrictedsharestakeagreedrepurchasetransactionduringthereportperiod□Yes?NoThereisnoagreedrepurchasetransactiontakenbytheCompany’stop10commonshareholdersandtop10shareholderswithunrestrictedsharesduringthereportperiod.

4.ChangesincontrollingshareholdersoractualcontrollersChangesinthecontrollingshareholdersduringthereportperiod

□Available?NotavailableThereisnoanychangeinthecontrollingshareholdersduringthereportperiod.Changesintheactualcontrollersduringthereportperiod□Available?NotavailableThereisnoanychangeintheactualcontrollersduringthereportperiod.

VII.RelatedSituationofPreferredShares□Available?NotavailableTherearenopreferredsharesduringthereportperiod.

VIII.RelatedSituationofConvertibleCorporateBonds

□Available?NotavailableTherearenoconvertiblecorporatebondsduringthereportperiod.

IX.SituationforDirectors,Supervisors,SeniorExecutives

1.Changesinshareholdingsofdirectors,supervisorsandseniorexecutives?Available?Notavailable

2.PersonnelchangesintheCompany'sdirectors,supervisorsandseniorexecutives?Available□Notavailable

Name

NamePositionStatusNumberofSharesheldatthebeginningperiod(shares)Increasednumberofsharesheldinthecurrentperiod(shares)Decreasednumberofsharesheldinthecurrentperiod(shares)Numberofsharesheldattheendperiod(shares)Numberofrestrictedsharesgrantedatthebeginningperiod(shares)Numberofrestrictedsharesgrantedinthecurrentperiod(shares)Numberofrestrictedsharesgrantedattheendperiod(shares)
ZhouHongjiangChairmanIncumbent025,600025,600000
SunJianDirector,GeneralmanagerIncumbent030,000030,000000
Total--055,600055,600000

Name

NamePositionTypeDateReason
AugustoReinaDirectorOutgoing2020.02.20Dieofillness
WeiAnningIndependentdirectorOutgoing2020.05.11Resigningforpersonalreason
WangZhuquanIndependentdirectorOutgoing2020.05.14ResigningafterservingasanindependentdirectorintheCompanyfor6yearsinsuccession
StefanoBattioniDirectorBeelected2020.05.27BeingelectedasdirectorbytheCompany’sShareholders’Meeting
YuRenzhuIndependentdirectorBeelected2020.05.27BeingelectedasindependentdirectorbytheCompany’sShareholders’Meeting
ZhangYunDirectorBeelected2020.06.19BeingelectedasdirectorbytheCompany’sShareholders’Meeting

X.RelatedSituationofCorporationBonds

WhetherornottherearetheCompany’scorporationbondsissuedinpublicandlistedinthestockexchange,butnotdueontheissuancedateapprovedinthesemi-annualreportorfailingtopayinfullontheduedateNo.

XI.FinancialReport

1.AuditreportWhetherthesemiannualreporthasbeenaudited

□Yes√No

2.FinancialstatementTheunitinthestatementsofthefinancialannotationsisRMBYuan.

2.1ConsolidatedbalancesheetCompilingunit:YantaiChangyuPioneerWineCo.,Ltd.June30,2020Unit:Yuan

Item

ItemNoteJune30,2020December31,2019
Currentassets:
Monetaryfund7.11,476,207,0551,565,783,980
Settlementreserves
Lendingfunds
Tradablefinancialassets
Derivativefinancialassets
Billsreceivable
Accountsreceivable7.2167,738,633266,218,153
Receivablesfinancing7.3222,918,741316,470,229
Advancepayment7.410,200,52767,707,537
Premiumreceivable
Reinsuranceaccountsreceivable
Receivablereservesforreinsurancecontract
Otherreceivables7.525,594,80124,246,812
Including:Interestreceivable698,347148,927
Dividendsreceivable
Redemptorymonetarycapitalforsale
Inventories7.62,936,133,2602,872,410,407
Contractassets
Assetsheldforsale
Non-currentassetsduewithinoneyear
Othercurrentassets7.7262,917,721267,424,938
Totalcurrentassets5,101,710,7385,380,262,056

Item

ItemNoteJune30,2020December31,2019
Non-currentassets:
Offeringloansandimprest
Debtinvestments
Otherdebtinvestments
Long-termreceivables
Long-termequityinvestments7.842,810,44543,981,130
Otherinvestmentsinequityinstruments
Othernon-currentfinancialassets
Investmentrealestate7.928,344,68729,714,586
Fixedassets7.105,818,499,8455,894,068,898
Constructioninprogress7.11647,036,593567,478,833
Productivebiologicalassets7.12196,238,591202,425,286
Oil-and-gasassets
Right-of-useassets
Intangibleassets7.13641,220,580651,946,355
Developmentexpenditure
Goodwill7.14141,859,193141,859,193
Long-termprepaidexpenses7.15270,769,497277,595,408
Deferredincometaxassets7.16214,323,893264,926,503
Othernon-currentassets7.17184,158,436193,674,320
Totalnon-currentassets8,185,261,7608,267,670,512
Totalassets13,286,972,49813,647,932,568
Currentliabilities:
Short-termloans7.18737,183,701754,313,744
BorrowingsfromtheCentralBank
Loansfromotherbanksandotherfinancialinstitutions
Tradablefinancialliabilities
Derivativefinancialliabilities
Billspayable
Accountspayable7.19379,727,980570,252,612
Advancesfromcustomers120,609,499
Contractliabilities7.20100,523,260
Financialassetssoldforrepurchase
Depositsfromcustomersandinterbank
Receivingsfromvicariouslytradedsecurities
Receivingsfromvicariouslysoldsecurities
Employeeremunerationspayable7.21139,862,928234,459,116
Taxesandduespayable7.22154,572,275375,169,971
Otherpayables7.23793,033,613450,532,485
Including:Interestpayable2,167,287758,047
Dividendspayable480,819,9251,366,559
Handlingchargesandcommissionspayable
Dividendpayableforreinsurance
Liabilitiesheldforsale
Non-currentliabilitiesduewithinoneyear7.2498,996,064150,826,221

Item

ItemNoteJune30,2020December31,2019
Othercurrentliabilities13,068,024
Totalcurrentliabilities2,416,967,8452,656,163,648
Non-currentliabilities:
Reservesforinsurancecontracts
Long-termborrowings7.25218,613,336128,892,501
Bondspayable
Including:Preferredstock
Perpetualbonds
Leaseliabilities
Long-termaccountspayable7.26167,000,000191,000,000
Long-termemployeeremunerationspayable
Estimatedliabilities
Deferredincome7.2761,772,90870,701,288
Deferredincometaxliabilities7.1614,303,13714,691,424
Othernon-currentliabilities7.287,645,7777,645,777
Totalnon-currentliabilities469,335,158412,930,990
Totalliabilities2,886,303,0033,069,094,638
Owner’sequity:
Capitalstock7.29685,464,000685,464,000
Otherequityinstruments
Including:Preferredstock
Perpetualbonds
Capitalsurplus7.30565,050,422565,050,422
Minus:Treasurystock
Othercomprehensiveincome7.31-9,242,236-4,235,583
Specialreserves
Surplusreserves7.32342,732,000342,732,000
Generalriskpreparation
Undistributedprofit7.338,547,110,1318,719,899,359
Totalowner’sequitiesattributabletotheparentcompany10,131,114,31710,308,910,198
Minorityequity269,555,178269,927,732
Totalowner’sequities10,400,669,49510,578,837,930
Totalliabilitiesandowner’sequities13,286,972,49813,647,932,568

LegalRepresentative:ZhouHongjiangAccountingSupervisor:JiangJianxunAccountingDepartmentManager:GuoCuimei

2.2Balancesheetoftheparentcompany

Compilingunit:YantaiChangyuPioneerWineCo.,Ltd.Unit:Yuan

ItemNoteJune30,2020December31,2019
Currentassets:
Monetaryfund798,084,475710,505,269
Tradablefinancialassets
Derivativefinancialassets
Billsreceivable
Accountsreceivable17.1302,2601,988,326

Item

ItemNoteJune30,2020December31,2019
Receivablesfinancing34,212,03941,679,635
Advancepayment33,862776,539
Otherreceivables17.2278,883,935586,424,958
Including:Interestreceivable464,61490,355
Dividendsreceivable2,985,375200,000,000
Inventories501,196,687434,007,808
Contractassets
Assetsheldforsale
Non-currentassetsduewithinoneyear
Othercurrentassets37,051,33839,130,466
Totalcurrentassets1,649,764,5961,814,513,001
Non-currentassets:
Debtinvestments
Otherdebtinvestments
Long-termreceivables
Long-termequityinvestments17.37,437,422,6217,432,422,621
Otherinvestmentsinequityinstruments
Othernon-currentfinancialassets
Investmentrealestate28,920,95829,714,586
Fixedassets250,196,215261,137,072
Constructioninprogress
Productivebiologicalassets117,388,982121,414,096
Oilandgasassets
Right-of-useassets
Intangibleassets63,675,33764,864,913
Developmentexpenditure
Goodwill
Long-termprepaidexpenses
Deferredincometaxassets17,961,52016,255,870
Othernon-currentassets1,524,700,0001,427,700,000
Totalnon-currentassets9,440,265,6339,353,509,158
Totalassets11,090,030,22911,168,022,159
Currentliabilities:
Short-termloans150,000,000150,000,000
Tradablefinancialliabilities
Derivativefinancialliabilities
Billspayable
Accountspayable32,575,69363,655,240
Advancesfromcustomers
Contractliabilities
Employeeremunerations57,841,18870,445,847
Taxesandduespayable4,129,5076,052,456
Otherpayables1,038,359,009660,149,563
Including:Interestpayable137,671181,250
Dividendspayable479,824,800

Item

ItemNoteJune30,2020December31,2019
Liabilitiesheldforsale
Non-currentliabilitiesduewithinoneyear
Othercurrentliabilities
Totalcurrentliabilities1,282,905,397950,303,106
Non-currentliabilities:
Long-termborrowings
Bondspayable
Including:Preferredstock
Perpetualbonds
Leaseliabilities
Long-termaccountspayable
Long-termemployeeremunerationpayable
Estimatedliabilities
Deferredincome7,459,7899,176,315
Deferredincometaxliabilities
Othernon-currentliabilities3,146,7063,146,707
Totalnon-currentliabilities10,606,49512,323,022
Totalliabilities1,293,511,892962,626,128
Owner’sequity:
Capitalstock685,464,000685,464,000
Otherequityinstruments
Including:Preferredstock
Perpetualbonds
Capitalsurplus557,222,454557,222,454
Minus:Treasurystock
Othercomprehensiveincome
Specialreserves
Surplusreserves342,732,000342,732,000
Undistributedprofit8,211,099,8838,619,977,577
Totalowner’sequities9,796,518,33710,205,396,031
Totalliabilitiesandowner’sequities11,090,030,22911,168,022,159

LegalRepresentative:ZhouHongjiangAccountingSupervisor:JiangJianxunAccountingDepartmentManager:GuoCuimei

2.3Consolidatedprofitstatement

Compilingunit:YantaiChangyuPioneerWineCo.,Ltd.Unit:Yuan

ItemNoteSumofcurrentperiodSumofpriorperiod
1.Totaloperatingincome1,401,606,7922,558,274,785
Including:Operatingincome7.341,401,606,7922,558,274,785
Interestincome
Earnedpremium
Handlingfeeandcommissionincome
2.Totaloperatingcosts1,040,122,1751,818,822,580
Including:Operatingcosts7.34574,650,677936,252,225
Interestexpenditure

Handlingfeesandcommissionexpenditure

Handlingfeesandcommissionexpenditure
Premiumrebate
Netamountofindemnityexpenditure
Netamountofthewithdrawnreservefundforinsurancecontract
Policybonuspayment
Amortizedreinsuranceexpenditures
ItemNoteSumofcurrentperiodSumofpriorperiod
Taxesandsurcharges7.3588,103,493123,550,848
Sellingexpenses7.36250,531,046591,970,801
Administrativeexpenses7.37113,069,869155,552,312
Researchanddevelopmentexpenses7.381,805,9882,706,811
Financialexpenses7.3911,961,1028,789,583
Including:Interestexpenses14,891,3109,812,560
Interestincome6,088,2814,606,417
Plus:Otherprofit7.4049,780,23164,211,892
Investmentprofit(lossislistedwith"-")7.41-1,170,685
Including:Investmentprofitforjoint-runbusinessandjointventure-1,170,685
Financialassetsmeasuredatamortizedcostceasetoberecognizedasincome(lossislistedwith"-")
Exchangeincome(lossislistedwith"-")
Netexposurehedgeincome(lossislistedwith"-")
Incomefromfairvaluechanges(lossislistedwith"-")
Creditimpairmentloss(lossislistedwith"-")7.42100,835-765,935
Assetimpairmentloss(lossislistedwith"-")7.434,242,8136,148,729
Incomefromassetdisposal(lossislistedwith"-")7.4439,6411,138
3.Operatingprofit(lossislistedwith"-")414,477,452809,048,029
Plus:Non-operatingincome7.454,682,2303,575,914
Minus:Non-operatingexpenses7.46867,273164,050
4.Totalprofits(totallossislistedwith"-")418,292,409812,459,893
Minus:Incometaxexpenses7.47109,689,969210,281,578
5.Netprofit(netlossislistedwith"-")308,602,440602,178,315
5.1Classificationbyoperationcontinuity
5.1.1Netprofitfromcontinuingoperation(netlossislistedwith"-")308,602,440602,178,315
5.1.2Netprofitfromterminatingoperation(netlossislistedwith"-")
5.2Classificationbyownership
5.2.1Netprofitattributabletoowneroftheparentcompany307,035,572603,403,789
5.2.2Minorityinterestincome1,566,868-1,225,474
6.Netafter-taxamountofothercomprehensiveincome7.48-5,765,822-4,657,291
Netafter-taxamountofothercomprehensiveincomeattributabletoowneroftheparentcompany-5,006,653-3,060,721
6.1Othercomprehensiveincomenottobereclassifiedintoprofitandlosslater
6.1.1Changesafterremeasuringandresettingthebenefitplans
6.1.2Othercomprehensiveincomenottobereclassifiedintoprofitandlossunderequitylaw

6.1.3Changesinthefairvalueofotherinvestmentsinequityinstruments

6.1.3Changesinthefairvalueofotherinvestmentsinequityinstruments
6.1.4Changesinthefairvalueoftheenterprise'sowncreditrisk
6.1.5Other
6.2Othercomprehensiveincometobereclassifiedintoprofitandlosslater-5,006,653-3,060,721
6.2.1Othercomprehensiveincometobereclassifiedintoprofitandlossunderequitylaw
6.2.2Changesinthefairvalueofotherdebtinvestments
6.2.3Amountoffinancialassetsreclassifiedintoothercomprehensiveincome
6.2.4Provisionforcreditimpairmentofothercreditinvestments
6.2.5Provisionforcash-flowhedge
6.2.6DifferenceintranslationofForeignCurrencyFinancialStatement-5,006,653-3,060,721
6.2.7Other
Netafter-taxamountofothercomprehensiveincomeattributabletominorityshareholders-759,169-1,596,570
7.Totalcomprehensiveincome302,836,618597,521,024
Attributabletoowneroftheparentcompany302,028,919600,343,068
Attributabletominorityshareholders807,699-2,822,044
8.Earningspershare:
8.1Basicearningspershare0.450.88
8.2Dilutedearningspershare0.450.88

LegalRepresentative:ZhouHongjiangAccountingSupervisor:JiangJianxunAccountingDepartmentManager:GuoCuimei

2.4ProfitstatementoftheparentcompanyCompilingunit:YantaiChangyuPioneerWineCo.,Ltd.Unit:Yuan

ItemNoteSumofcurrentperiodSumofpriorperiod
1.Operatingincome17.4152,950,515352,351,002
Minus:Operatingcosts17.4143,241,194309,570,580
Taxesandsurcharges4,379,36513,140,156
Sellingexpenses
Administrativeexpenses30,150,31139,434,246
Researchanddevelopmentexpenses318,917405,061
Financialexpenses934,777-3,657,370
Including:Interestexpenses2,807,750-2,705,073
Interestincome2,251,2351,470,667
Plus:Otherprofit1,819,8901,716,527
Investmentprofit(lossislistedwith"-")17.587,474,604264,221,755
Including:Investmentprofitforjoint-runbusinessandjointventure
Financialassetsmeasuredatamortizedcostceasetoberecognizedasincome(lossislistedwith"-")
Netexposurehedgeincome(lossislistedwith"-")
Incomefromfairvaluechanges(lossislistedwith"-")
Creditimpairmentloss(lossislistedwith"-")599,632

Assetimpairmentloss(lossislistedwith"-")

Assetimpairmentloss(lossislistedwith"-")
Incomefromassetdisposal(lossislistedwith"-")
2.Operatingprofit(lossislistedwith"-")63,820,077259,396,611
Plus:Non-operatingincome2,007,235703,559
Minus:Non-operatingexpenses525,00097,638
3.Totalprofits(totallossislistedwith"-")65,302,312260,002,532
ItemNoteSumofcurrentperiodSumofpriorperiod
Minus:Incometaxexpenses-5,644,794-726,946
4.Netprofit(netlossislistedwith"-")70,947,106260,729,478
4.1Netprofitfromcontinuingoperation(netlossislistedwith"-")70,947,106260,729,478
4.2Netprofitfromterminatingoperation(netlossislistedwith"-")
5.Netafter-taxamountofothercomprehensiveincome
5.1Othercomprehensiveincomenottobereclassifiedintoprofitandlosslater
5.1.1Changesafterremeasuringandresettingthebenefitplans
5.1.2Othercomprehensiveincomenottobereclassifiedintoprofitandlossunderequitylaw
5.1.3Changesinthefairvalueofotherinvestmentsinequityinstruments
5.1.4Changesinthefairvalueoftheenterprise'sowncreditrisk
5.1.5Other
5.2Othercomprehensiveincometobereclassifiedintoprofitandlosslater
5.2.1Othercomprehensiveincometobereclassifiedintoprofitandlossunderequitylaw
5.2.2Changesinthefairvalueofotherdebtinvestments
5.2.3Amountoffinancialassetsreclassifiedintoothercomprehensiveincome
5.2.4Provisionforcreditimpairmentofothercreditinvestments
5.2.5Provisionforcash-flowhedge
5.2.6DifferenceintranslationofForeignCurrencyFinancialStatement
5.2.7Other
6.Totalcomprehensiveincome70,947,106260,729,478
7.Earningspershare:
7.1Basicearningspershare0.100.38
7.2Dilutedearningspershare0.100.38

LegalRepresentative:ZhouHongjiangAccountingSupervisor:JiangJianxunAccountingDepartmentManager:GuoCuimei

2.5ConsolidatedcashflowstatementCompilingunit:YantaiChangyuPioneerWineCo.,Ltd.Unit:Yuan

ItemNoteSumofcurrentperiodSumofpriorperiod
1.Cashflowsfromoperatingactivities:
Cashreceivedfromsalesofgoodsandrendingofservices1,488,831,1272,399,548,448
Netincreaseincustomerandinterbankdeposits
Netincreaseinborrowingsfromcentralbank

Item

ItemNoteSumofcurrentperiodSumofpriorperiod
Netincreaseinborrowingsfromotherfinancialinstitutions
Cashreceivedfromreceivinginsurancepremiumoforiginalinsurancecontract
Netcashreceivedfromreinsurancebusiness
Netincreaseinpolicyholderdepositsandinvestmentfunds
Cashreceivedfromcollectinginterest,handlingfeesandcommissions
Netincreaseinborrowingfunds
Netincreaseinrepurchasementbusinessfunds
Netcashreceivedforbuyingandsellingsecurities
Taxrefundreceived23,217,78220,038,271
Othercashreceivedrelatedtooperatingactivities7.4948,173,53467,785,620
Subtotalofcashflowsofoperatingactivities1,560,222,4432,487,372,339
Cashpaidforgoodsandservices630,954,042718,093,432
Netincreaseincustomerloansandadvances
Netincreaseindepositsincentralbankandinterbankdeposits
Cashpaidtooriginalinsurancecontractpayments
Netincreaseinlendingfunds
Cashpaidtointerest,handlingfeesandcommissions
Cashpaidtopolicybonus
Cashpaidtoandonbehalfofemployees231,967,796278,638,333
Cashpaidfortaxesandexpenses467,810,691598,384,101
Othercashpaidrelatedtooperatingactivities7.49259,142,735392,780,467
Sub-totalofcashoutflowsofoperatingactivities1,589,875,2641,987,896,333
Netcashflowfromoperatingactivities-29,652,821499,476,006
2.Cashflowfrominvestingactivities:
Cashreceivedfromdisinvestment
Cashreceivedfromwithdrawaloffixeddeposits60,128,600104,597,650
Cashreceivedfromobtaininginvestmentincome
Cashreceivedfromobtaininginterestincome1,160,2441,004,552
Cashreceivedfromdisposaloffixedassets,intangibleassetsandotherlong-termassets131,978175,837
Netcashreceivedfromdisposalofbranchandotherbusinessunit
Othercashreceivedrelatedtoinvestingactivities
Subtotalofcashflowsofinvestmentactivities61,420,822105,778,039
Cashpaidtoacquirefixedassets,intangibleassetsandotherlong-termassets65,946,953135,073,897
Cashforinvestment
Cashpaidforpurchasingfixeddeposits35,200,00085,238,750
Netincreaseinhypothecatedloan
Netcashpaidforacquiringbranchandotherbusinessunit
Othercashpaidrelatedtoinvestmentactivities
Subtotalofcashoutflowsofinvestmentactivities101,146,953220,312,647
Netcashflowfrominvestingactivities-39,726,131-114,534,608
3.Cashflowfromfinancingactivities
Cashreceivedfromacquiringinvestment
Including:cashreceivedfromacquiringminorityshareholders

Item

ItemNoteSumofcurrentperiodSumofpriorperiod
investmentbybranch
Cashreceivedfromacquiringloans778,228,305656,495,139
Othercashreceivedrelatedtofinancingactivities
Subtotalcashflowsoffinancingactivities778,228,305656,495,139
Cashpaidforpayingdebts758,287,985658,033,492
Cashpaidfordistributingdividendandprofitorpayinginterest15,235,69516,590,004
Including:dividendandprofitpaidtominorityshareholdersbybranch1,551,687
Othercashpaidrelatedtofinancingactivities
Subtotalofcashoutflowsoffinancingactivities773,523,680674,623,496
Netcashflowfromfinancingactivities4,704,625-18,128,357
4.Influencesofexchangeratefluctuationoncashandcashequivalents-307,95953,702
5.NetIncreaseincashandcashequivalents-64,982,286366,866,743
Plus:balanceatthebeginningoftheperiodofcashandcashequivalents1,365,772,6751,206,860,334
6.Balanceattheendoftheperiodofcashandcashequivalents1,300,790,3891,573,727,077

LegalRepresentative:ZhouHongjiangAccountingSupervisor:JiangJianxunAccountingDepartmentManager:GuoCuimei

2.6Cashflowstatementoftheparentcompany

Compilingunit:YantaiChangyuPioneerWineCo.,Ltd.Unit:Yuan

ItemSumofcurrentperiodSumofpriorperiod
1.Cashflowsfromoperatingactivities:
Cashreceivedfromsalesofgoodsandrendingofservices176,514,170219,405,421
Taxrefundreceived
Othercashreceivedrelatedtooperatingactivities14,486,37357,674,830
Subtotalofcashflowsofoperatingactivities191,000,543277,080,251
Cashpaidforgoodsandservices149,176,637163,184,301
Cashpaidtoandonbehalfofemployees25,497,87045,116,586
Cashpaidfortaxesandexpenses2,648,46422,530,113
Othercashpaidrelatedtooperatingactivities107,931,895321,847,893
Sub-totalofcashoutflowsofoperatingactivities285,254,866552,678,893
Netcashflowfromoperatingactivities-94,254,323-275,598,642
2.Cashflowfrominvestingactivities:
Cashreceivedfromdisinvestment
Cashreceivedfromwithdrawaloffixeddeposits15,200,00040,000,000
Cashreceivedfromobtaininginvestmentincome287,246,945760,152,668
Cashreceivedfromobtaininginterestincome142,759484,857
Netcashreceivedfromdisposaloffixedassets,intangibleassetsandotherlong-termassets7,519
Netcashreceivedfromdisposalofbranchandotherbusinessunit
Othercashreceivedrelatedtoinvestingactivities
Subtotalofcashflowsofinvestmentactivities302,589,704800,645,044
Cashpaidtoacquiringfixedassets,intangibleassetsandotherlong-termassets1,040,04810,164,233
Cashforinvestment5,000,00013,000,000

Item

ItemSumofcurrentperiodSumofpriorperiod
Cashpaidforpurchasingfixeddeposits15,200,00085,238,750
Netcashpaidforacquiringbranchandotherbusinessunit
Othercashpaidrelatedtoinvestmentactivities97,000,000
Subtotalofcashoutflowsofinvestmentactivities118,240,048108,402,983
Netcashflowfrominvestingactivities184,349,656692,242,061
3.Cashflowfromfinancingactivities
Cashreceivedfromacquiringinvestment
Cashreceivedfromacquiringloans150,000,000
Othercashreceivedrelatedtofinancingactivities
Subtotalcashflowsoffinancingactivities150,000,000
Cashpaidfordebts150,000,000
Cashpaidtodistributedividend,profitorpayinterest2,748,3753,248,000
Othercashpaidrelatedtofinancingactivities
Subtotalofcashoutflowsoffinancingactivities152,748,3753,248,000
Netcashflowfromfinancingactivities-2,748,375-3,248,000
4.Influencesofexchangeratefluctuationoncashandcashequivalents
5.NetIncreaseincashandcashequivalents87,346,958413,395,419
Plus:balanceatthebeginningoftheperiodofcashandcashequivalents623,116,542532,384,882
6.Balanceattheendoftheperiodofcashandcashequivalents710,463,500945,780,301

LegalRepresentative:ZhouHongjiangAccountingSupervisor:JiangJianxunAccountingDepartmentManager:GuoCuimei

2.7Consolidatedowner’sequitychanginglist

Unit:Yuan

Item

ItemThisperiod
Owners’equityoftheparentcompanyMinorityshareholders’equityTotalowners’equity
CapitalstockOtherequityinstrumentsCapitalreservesMinus:TreasurystockOthercomprehensiveincomeSpecialreservesSurplusreservesGeneralriskpreparationUndistributedprofitsOtherSubtotal
PreferredstockPerpetualbondsOther
1.Balanceattheendoflastyear685,464,000565,050,422-4,235,583342,732,0008,719,899,35910,308,910,198269,927,73210,578,837,930
Plus:Accountingpolicieschanging
Previouserrorcorrection
Businesscombinationundercommoncontrol
Other
2.Balanceatthebeginningofthisyear685,464,000565,050,422-4,235,583342,732,0008,719,899,35910,308,910,198269,927,73210,578,837,930
3.Increasedordecreasedamountinthisperiod(reducingamountislistedwith"-")-5,006,653-172,789,228-177,795,881-372,554-178,168,435
3.1Totalcomprehensiveincome-5,006,653307,035,572302,028,919807,699302,836,618
3.2Owners'investedandreducedcapital
3.2.1Owner’investedcommonstock
3.2.2Otherequityinstrumentholders’investedcapital
3.2.3Amountofsharespaidandreckonedin

owners'equity

owners'equity
3.2.4Other
3.3Profitdistribution-479,824,800-479,824,800-1,180,253-481,005,053
3.3.1Accruedsurplusreserves
3.3.2Accruedgeneralriskpreparation
3.3.3Distributiontoowners(orshareholders)-479,824,800-479,824,800-1,180,253-481,005,053
3.3.4Other
3.4Internaltransferofowners'equity
3.4.1Capitalreservestransferredandincreasedcapital(orcapitalstock)
3.4.2Surplusreservestransferredandincreasedcapital(orcapitalstock)
3.4.3Surplusreservescoveringdeficit
3.4.4Retainedearningscarriedoverfromthebenefitplanvariation
3.4.5Retainedearningscarriedoverfromothercomprehensiveincome
3.4.6Other
3.5Specialreserves
3.5.1Withdrawalinthisperiod
3.5.2Usageinthisperiod
3.6Other
4.Balanceattheendofthisperiod685,464,000565,050,422-9,242,236342,732,0008,547,110,13110,131,114,317269,555,17810,400,669,495

Item

ItemLastperiod
Owners’equityoftheparentcompanyMinorityshareholders’equityTotalowners’equity
CapitalstockOtherequityinstrumentsCapitalreservesMinus:TreasurystockOthercomprehensiveincomeSpecialreservesSurplusreservesGeneralriskpreparationUndistributedprofitsOtherSubtotal
PreferredstockPerpetualbondsOther
1.Balanceattheendoflastyear685,464,000565,955,4412,965,377342,732,0008,008,982,5479,606,099,365284,388,0129,890,487,377
Plus:Accountingpolicieschanging-7,540,537-7,540,537-7,540,537
Previouserrorcorrection
Businesscombinationundercommoncontrol
Other
2.Balanceatthebeginningofthisyear685,464,000565,955,4412,965,377342,732,0008,001,442,0109,598,558,828284,388,0129,882,946,840
3.Increasedordecreasedamountinthisperiod(reducingamountislistedwith"-")-905,019-7,200,960718,457,349710,351,370-14,460,280695,891,090
3.1Totalcomprehensiveincome-7,200,9601,129,735,7491,122,534,789-1,368,9531,121,165,836
3.2Owners'investedandreducedcapital-905,019-905,019-10,714,533-11,619,552
3.2.1Owner’investedcommonstock-905,019-905,019-10,714,533-11,619,552
3.2.2Otherequityinstrumentholders’investedcapital
3.2.3Amountofsharespaidandreckonedinowners'equity
3.2.4Other

3.3Profitdistribution

3.3Profitdistribution-411,278,400-411,278,400-2,376,794-413,655,194
3.3.1Accruedsurplusreserves
3.3.2Accruedgeneralriskpreparation
3.3.3Distributiontoowners(orshareholders)-411,278,400-411,278,400-2,376,794-413,655,194
3.3.4Other
3.4Internaltransferofowners'equity
3.4.1Capitalreservestransferredandincreasedcapital(orcapitalstock)
3.4.2Surplusreservestransferredandincreasedcapital(orcapitalstock)
3.4.3Surplusreservescoveringdeficit
3.4.4Retainedearningscarriedoverfromthebenefitplanamount
3.4.5Retainedearningscarriedoverfromothercomprehensiveincome
3.4.6Other
3.5Specialreserves
3.5.1Withdrawalinthisperiod
3.5.2Usageinthisperiod
3.6Other
4.Balanceattheendofthisperiod685,464,000565,050,422-4,235,583342,732,0008,719,899,35910,308,910,198269,927,73210,578,837,930

2.8Owner’sequitychanginglistoftheparentcompany

Unit:Yuan

Item

ItemThisperiod
CapitalstockOtherequityinstrumentsCapitalreservesMinus:TreasurystockOthercomprehensiveincomeSpecialreservesSurplusreservesUndistributedprofitsOtherTotalowners’equity
PreferredstockPerpetualbondsOther
1.Balanceattheendoflastyear685,464,000557,222,454342,732,0008,619,977,57710,205,396,031
Plus:Accountingpolicieschanging
Previouserrorcorrection
Other
2.Balanceatthebeginningofthisyear685,464,000557,222,454342,732,0008,619,977,57710,205,396,031
3.Increasedordecreasedamountinthisperiod(reducingamountislistedwith"-")-408,877,694-408,877,694
3.1Totalcomprehensiveincome70,947,10670,947,106
3.2Owners'investedandreducedcapital
3.2.1Owners’investedcommonstock
3.2.2Otherequityinstrumentholder’investedcapital
3.2.3Amountofsharespaidandreckonedinowners'equity
3.2.4Other
3.3Profitdistribution-479,824,800-479,824,800
3.3.1Drewsurplusreserves
3.3.2Distributiontoowners(orshareholders)-479,824,800-479,824,800
3.3.3Other
3.4Internaltransferofowners'equity
3.4.1Capitalreservestransferredandincreasedcapital(orcapitalstock)
3.4.2Surplusreservestransferredandincreasedcapital(orcapitalstock)

3.4.3Surplusreservescoveringdeficit

3.4.3Surplusreservescoveringdeficit
3.4.4Retainedearningscarriedoverfromthebenefitplanamount
3.4.5Retainedearningscarriedoverfromothercomprehensiveincome
3.4.6Other
3.5Specialreserves
3.5.1Accrualinthisperiod
3.5.2Usageinthisperiod
3.6Other
4.Balanceattheendofthisperiod685,464,000557,222,454342,732,0008,211,099,8839,796,518,337

Unit:Yuan

ItemLastperiod
CapitalstockOtherequityinstrumentsCapitalreservesMinus:TreasurystockOthercomprehensiveincomeSpecialreservesSurplusreservesUndistributedprofitsOtherTotalowners’equity
PreferredstockPerpetualbondsOther
1.Balanceattheendoflastyear685,464,000557,222,454342,732,0008,437,957,12810,023,375,582
Plus:Accountingpolicieschanging
Previouserrorcorrection
Other
2.Balanceatthebeginningofthisyear685,464,000557,222,454342,732,0008,437,957,12810,023,375,582
3.Increasedordecreasedamountinthisperiod(reducingamountislistedwith"-")182,020,449182,020,449
3.1Totalcomprehensiveincome593,298,849593,298,849
3.2Owners'investedandreducedcapital
3.2.1Owners’investedcommonstock
3.2.2Otherequityinstrumentholder’investedcapital
3.2.3Amountofsharespaidandreckonedinowners'equity

3.2.4Other

3.2.4Other
3.3Profitdistribution-411,278,400-411,278,400
3.3.1Drewsurplusreserves
3.3.2Distributiontoowners(orshareholders)-411,278,400-411,278,400
3.3.3Other
3.4Internaltransferofowners'equity
3.4.1Capitalreservestransferredandincreasedcapital(orcapitalstock)
3.4.2Surplusreservestransferredandincreasedcapital(orcapitalstock)
3.4.3Surplusreservescoveringdeficit
3.4.4Retainedearningscarriedoverfromthebenefitplanamount
3.4.5Retainedearningscarriedoverfromothercomprehensiveincome
3.4.6Other
3.5Specialreserves
3.5.1Accrualinthisperiod
3.5.2Usageinthisperiod
3.6Other
4.Balanceattheendofthisperiod685,464,000557,222,454342,732,0008,619,977,57710,205,396,031

3.Companyprofile

YantaiChangyuPioneerWineCo.,Ltd.(the“Company”orthe“Joint-stockCompany”)wasincorporatedasajoint-stocklimitedcompanyinaccordancewiththeCompanyLawofthePeople’sRepublicofChina(the“PRC”)inthemergerandreorganizationcarriedoutbyYantaiChangyuGroupCo.,Ltd.(“ChangyuGroupCompany”)withitsassetsandliabilitiesinrelationtowinebusiness.TheCompanyanditssubsidiarycompanies(hereinaftercollectivelyreferredtoasthe“Group”)areengagedintheproductionandsaleofwine,brandyandchampagne,plantingandpurchaseofgrapes,developmentoftourismresources,etc.TheregisteredaddressoftheCompanyisYantaiCity,ShandongProvince,andtheofficeaddressoftheheadquartersis56DamaRoad,ZhifuDistrict,YantaiCity,ShandongProvince.AsatJune30,2020,theCompanyissued685,464,000sharesaccumulatively.RefertoNote7.29fordetails.TheparentcompanyoftheGroupisChangyuGroupCompanyincorporatedinChina,whichwasultimatelyandactuallycontrolledbyfourparties,includingYantaiGuofengInvestmentHoldingCo.,Ltd.,ILLVASaronnoHoldingSpa,InternationalFinanceCorporationandYantaiYuhuaInvestment&DevelopmentCo.,Ltd.ThefinancialstatementandtheconsolidatedfinancialstatementoftheCompanywereapprovedbytheBoardofDirectorsonAugust26,2020.ThedetailsofscopeoftheconsolidatedfinancialstatementinthisperiodcanbeseeninNote9“Equityinotherentities”.ThedetailsofscopechangesoftheconsolidatedfinancialstatementinthisperiodcanbeseeninNote8“Changesoftheconsolidatedscope”.

4.Preparationbasisoffinancialstatement

4.1Preparationbasis

TheGroupimplementstheAccountingStandardsforBusinessEnterprises(includingthenewandrevisededitionspublishedin2014)(“ASBE”)publishedbytheMinistryofFinanceandrelevant

regulationsthereof.

4.2Continuousoperation

TheGrouphasappraisedtheabilityofcontinuousoperationfor12monthsfromJune30,2020,andnoissuesorsituationscausingmajordoubtstothisabilityarefound.Therefore,thisfinancialstatementispreparedonthebasisofthecontinuousoperationassumption.

5.Mainaccountingpoliciesandaccountingestimates

5.1StatementoncompliancewithASBE

ThisfinancialstatementfulfillstherequirementofASBEissuedbytheMinistryofFinanceandgivesatrueandintegratedviewoftheconsolidatedfinancialstatusandthefinancialstatusasatJune30,2020,aswellastheconsolidatedoperatingresult,theoperatingresult,theconsolidatedcashflowandthecashflowoftheCompanyfromJanuarytoJune2020.Inaddition,thefinancialstatementoftheCompanyalsocomplieswiththerelateddisclosurerequirementsforstatementanditsnotesstipulatedbyPreparationRulesforInformationDisclosurebyCompaniesOfferingSecuritiestothePublicNo.15–GeneralProvisionsonFinancialReports(2014Revision)bytheChinaSecuritiesRegulatoryCommission(hereinafterreferredtoasthe“CSRC”).

5.2Accountingperiod

TheaccountingyearisfromJanuary1toDecember31inGregoriancalendar.

5.3OperatingcycleTheoperatingcyclereferstotheperiodfromtheenterprisepurchasestheassetsusedforprocessingtothecashorcashequivalentisrealized.TheoperatingcycleoftheCompanyis12months.

5.4Recordingcurrency

SinceRenminbi(RMB)isthecurrencyofthemaineconomicenvironmentinwhichtheCompanyandthedomesticsubsidiarycompaniesthereofaresituated,theCompanyandthesubsidiarycompaniesthereofadoptRMBastherecordingcurrency.TheoverseassubsidiarycompaniesthereofdetermineEUR,CLPandAUDastherecordingcurrencyaccordingtothemaineconomicenvironmentinwhichtheyaresituated.ThecurrencyinthisfinancialstatementpreparedbytheGroupisRMB.

5.5Accountingtreatmentmethodforbusinesscombinationundercommoncontrolandnon-commoncontrol

5.5.1BusinesscombinationandgoodwillundercommoncontrolAbusinesscombinationundercommoncontrolisabusinesscombinationinwhichallofthecombiningenterprisesareultimatelycontrolledbythesamepartyorsamemultiplepartiesbeforeandafterthecombination,andthatcontrolisnottransitory.Theassetsandliabilitiesobtainedbythecombiningpartyinthebusinesscombinationshallbemeasuredonthebasisofthecarryingamountintheultimatecontrollingparty'sconsolidatedfinancialstatementasatthecombinationdate.Wherethereisadifferencebetweenthecarryingamountofthenetassetsacquiredandthecarryingamountofthecombinationconsiderationpaid(orthetotalparvalueofthesharesissued),thestockpremiumincapitalsurplusshallbeadjusted.Ifthestockpremiumincapitalsurplusisnotsufficienttooffset,theretainedearningsshallbeadjusted.Thedirectrelatedexpensesincurredforthebusinesscombinationshallbeincludedinthecurrentprofitandlosswhenincurred.Thecombinationdateisthedateonwhichthecombiningpartyactuallyobtainscontrolofthecombinedparty.

5.5.2Businesscombinationundernon-commoncontrol

Abusinesscombinationundernon-commoncontrolisabusinesscombinationinwhichallofthecombiningpartiesarenotultimatelycontrolledbythesamepartyorsamemultiplepartiesbeforeandafterthecombination.ThesumoffairvaluesoftheassetspaidbytheGroup,astheacquirer,(includingtheacquiree’sequitytheGroupheldbeforetheacquisitiondate),liabilitiesincurredorassumed,andtheequitysecuritiesissuedontheacquisitiondateinexchangeforthecontrolovertheacquiree,deductsthefairvalueoftheacquiree’sidentifiablenetassetsacquiredinthecombinationontheacquisitiondate.Ifthedifferenceispositive,itshallberecognizedasgoodwill;andifitisnegative,itshallbeincludedinthecurrentprofitandloss.Alltheidentifiableassets,liabilitiesandcontingentliabilitieswhichareobtainedfromtheacquireeandmeettherecognitionconditionsshallbeconfirmedbytheGroupontheacquisitiondateaccordingtothefairvaluethereof.Theacquisitiondateisthe

dateonwhichtheacquireractuallyobtainscontroloftheacquiree.Forabusinesscombinationinvolvingentitiesnotundercommoncontrolandachievedinstages,theGroupremeasuresitspreviously-heldequityinterestintheacquireetoitsacquisition-datefairvalueandrecognisesanyresultingdifferencebetweenthefairvalueandthecarryingamountasinvestmentincomeorothercomprehensiveincomeforthecurrentperiod.Inaddition,anyamountrecognisedinothercomprehensiveincomethatmaybereclassifiedtoprofitorloss,inpriorreportingperiodsrelatingtothepreviously-heldequityinterest,andanyotherchangesintheowners’equityunderequityaccounting,aretransferredtoinvestmentincomeintheperiodinwhichtheacquisitionoccurs.Ifequityinterestsoftheacquireeheldbeforeacquisition-datewereequityinstrumentinvestmentsmeasuredatfairvaluethroughothercomprehensiveincome,othercomprehensiveincomerecognisedshallbemovedtoretainedearningsonacquisition-date.

5.6Compilingmethodsofconsolidatedfinancialstatement

5.6.1Generalprinciples

ThescopeofconsolidatedfinancialstatementsisbasedoncontrolandtheconsolidatedfinancialstatementscomprisetheCompanyanditssubsidiaries.Controlexistswhentheinvestorhasalloffollowing:powerovertheinvestee;exposure,orrights,tovariablereturnsfromitsinvolvementwiththeinvesteeandhastheabilitytoaffectthosereturnsthroughitspowerovertheinvestee.WhenassessingwhethertheGrouphaspower,onlysubstantiverights(heldbytheGroupandotherparties)areconsidered.Thefinancialposition,financialperformanceandcashflowsofsubsidiariesareincludedintheconsolidatedfinancialstatementsfromthedatethatcontrolcommencesuntilthedatethatcontrolceases.Non-controllinginterestsarepresentedseparatelyintheconsolidatedbalancesheetwithinshareholders’equity.Netprofitorlossattributabletonon-controllingshareholdersispresentedseparatelyintheconsolidatedincomestatementbelowthenetprofitlineitem.Totalcomprehensiveincomeattributabletonon-controllingshareholdersispresentedseparatelyintheconsolidatedincomestatementbelowthetotalcomprehensiveincomelineitem.Whentheamountoflossforthecurrentperiodattributabletothenon-controllingshareholdersofasubsidiaryexceedsthenon-controllingshareholders’shareoftheopeningowners’equityofthesubsidiary,theexcessisstillallocatedagainstthenon-controllinginterests.

WhentheaccountingperiodoraccountingpoliciesofasubsidiaryaredifferentfromthoseoftheCompany,theCompanymakesnecessaryadjustmentstothefinancialstatementsofthesubsidiarybasedontheCompany’sownaccountingperiodoraccountingpolicies.Intra-groupbalancesandtransactions,andanyunrealisedprofitorlossarisingfromintra-grouptransactions,areeliminatedwhenpreparingtheconsolidatedfinancialstatements.Unrealisedlossesresultingfromintra-grouptransactionsareeliminatedinthesamewayasunrealisedgains,unlesstheyrepresentimpairmentlossesthatarerecognisedinthefinancialstatements.

5.6.2Subsidiariesacquiredthroughabusinesscombination

Whereasubsidiarywasacquiredduringthereportingperiod,throughabusinesscombinationinvolvingentitiesundercommoncontrol,thefinancialstatementsofthesubsidiaryareincludedintheconsolidatedfinancialstatementsbasedonthecarryingamountsoftheassetsandliabilitiesofthesubsidiaryinthefinancialstatementsoftheultimatecontrollingpartyasifthecombinationhadoccurredatthedatethattheultimatecontrollingpartyfirstobtainedcontrol.Theopeningbalancesandthecomparativefiguresoftheconsolidatedfinancialstatementsarealsorestated.Whereasubsidiarywasacquiredduringthereportingperiod,throughabusinesscombinationinvolvingentitiesnotundercommoncontrol,theidentifiableassetsandliabilitiesoftheacquiredsubsidiariesareincludedinthescopeofconsolidationfromthedatethatcontrolcommences,basedonthefairvalueofthoseidentifiableassetsandliabilitiesattheacquisitiondate.

5.6.3Disposalofsubsidiaries

WhentheGrouplosescontroloverasubsidiary,anyresultingdisposalgainsorlossesarerecognisedasinvestmentincomeforthecurrentperiod.Theremainingequityinvestmentisre-measuredatitsfairvalueatthedatewhencontrolislost,anyresultinggainsorlossesarealsorecognisedasinvestmentincomeforthecurrentperiod.WhentheGrouplosescontrolofasubsidiaryinmultipletransactionsinwhichitdisposesofitslong-termequityinvestmentinthesubsidiaryinstages,thefollowingareconsideredtodeterminewhethertheGroupshouldaccountforthemultipletransactionsasabundledtransaction:

-arrangementsareenteredintoatthesametimeorincontemplationofeachother;

-arrangementsworktogethertoachieveanoverallcommercialeffect;-theoccurrenceofonearrangementisdependentontheoccurrenceofatleastoneotherarrangement;-onearrangementconsideredonitsownisnoteconomicallyjustified,butitiseconomicallyjustifiedwhenconsideredtogetherwithotherarrangements.Ifeachofthemultipletransactionsdoesnotformpartofabundledtransaction,thetransactionsconductedbeforethelossofcontrolofthesubsidiaryareaccountedforinaccordancewiththeaccountingpolicyforpartialdisposalofequityinvestmentinsubsidiarieswherecontrolisretained.Ifeachofthemultipletransactionsformspartofabundledtransactionwhicheventuallyresultsinthelossofcontrolinthesubsidiary,thesemultipletransactionsareaccountedforasasingletransaction.Intheconsolidatedfinancialstatements,thedifferencebetweentheconsiderationreceivedandthecorrespondingproportionofthesubsidiary’snetassets(calculatedcontinuouslyfromtheacquisitiondate)ineachtransactionpriortothelossofcontrolshallberecognisedinothercomprehensiveincomeandtransferredtoprofitorlosswhentheparenteventuallylosescontrolofthesubsidiary.

5.6.4Changesinnon-controllinginterests

WheretheCompanyacquiresanon-controllinginterestfromasubsidiary’snon-controllingshareholdersordisposesofaportionofaninterestinasubsidiarywithoutachangeincontrol,thedifferencebetweentheproportioninterestsofthesubsidiary’snetassetsbeingacquiredordisposedandtheamountoftheconsiderationpaidorreceivedisadjustedtothecapitalreserve(sharepremium)intheconsolidatedbalancesheet,withanyexcessadjustedtoretainedearnings.

5.7Determinationstandardofcashandcashequivalents

Cashandcashequivalentscomprisecashonhand,demanddeposit,andshort-termhighlyliquidinvestmentswhicharereadilyconvertibleintoknownamountofcashwithaninsignificantriskofchangesinvalue.

5.8Foreigncurrencytransactionandforeigncurrencystatementtranslation

WhentheGroupreceivescapitalinforeigncurrenciesfrominvestors,thecapitalistranslatedto

Renminbiatthespotexchangerateatthedateofthereceipt.Otherforeigncurrencytransactionsare,oninitialrecognition,translatedtoRenminbiatthespotexchangerates.MonetaryitemsdenominatedinforeigncurrenciesaretranslatedtoRenminbiatthespotexchangerateatthebalancesheetdate.Theresultingexchangedifferencesaregenerallyrecognisedinprofitorloss,unlesstheyarisefromthere-translationoftheprincipalandinterestofspecificborrowingsfortheacquisitionandconstructionofqualifyingassets.Non-monetaryitemsthataremeasuredathistoricalcostinforeigncurrenciesaretranslatedtoRenminbiusingtheexchangerateatthetransactiondate.Intranslatingthefinancialstatementsofaforeignoperation,assetsandliabilitiesofforeignoperationaretranslatedtoRenminbiatthespotexchangerateatthebalancesheetdate.Equityitems,excludingretainedearningsandthetranslationdifferencesinothercomprehensiveincome,aretranslatedtoRenminbiatthespotexchangeratesatthetransactiondates.IncomeandexpensesintheincomestatementaretranslatedtoRenminbiatthespotexchangeratesatthetransactiondates.Theresultingtranslationdifferencesarerecognisedinothercomprehensiveincome.Thetranslationdifferencesaccumulatedinothercomprehensiveincomewithrespecttoaforeignoperationaretransferredtoprofitorlossintheperiodwhentheforeignoperationisdisposed.

5.9Financialinstruments

Financialinstrumentsincludecashatbankandonhand,investmentsindebtandequitysecuritiesotherthanthoseclassifiedaslong-termequityinvestments,receivables,payables,loansandborrowingsandsharecapital.

5.9.1RecognitionandinitialmeasurementoffinancialassetsandfinancialliabilitiesAfinancialassetandfinancialliabilityisrecognisedinthebalancesheetwhentheGroupbecomesapartytothecontractualprovisionsofafinancialinstrument.Afinancialassets(unlessitisatradereceivablewithoutasignificantfinancingcomponent)andfinancialliabilitiesismeasuredinitiallyatfairvalue.Forfinancialassetsandfinancialliabilitiesatfairvaluethroughprofitorloss,anyrelateddirectlyattributabletransactioncostsarechargedtoprofitorloss;forothercategoriesoffinancialassetsandfinancialliabilities,anyrelateddirectlyattributabletransactioncostsareincludedintheirinitialcosts.Accountsreceivablecontainingnosignificantfinancingcomponentaremeasuredinitiallyattransactionpricesdeterminedbytheaccountingpolicies

setoutinNote5.22.

5.9.2Classificationandsubsequentmeasurementoffinancialassets

(a)ClassificationoffinancialassetsTheclassificationoffinancialassetsisgenerallybasedonthebusinessmodelinwhichafinancialassetismanagedanditscontractualcashflowcharacteristics.Oninitialrecognition,afinancialassetisclassifiedasmeasuredatamortisedcost,atfairvaluethroughothercomprehensiveincome(“FVOCI”),oratfairvaluethroughprofitorloss(“FVTPL”).FinancialassetsarenotreclassifiedsubsequenttotheirinitialrecognitionunlesstheGroupchangesitsbusinessmodelformanagingfinancialassetsinwhichcaseallaffectedfinancialassetsarereclassifiedonthefirstdayofthefirstreportingperiodfollowingthechangeinthebusinessmodel.AfinancialassetismeasuredatamortisedcostifitmeetsbothofthefollowingconditionsandisnotdesignatedasatFVTPL:

-itisheldwithinabusinessmodelwhoseobjectiveistoholdassetstocollectcontractualcashflows;and-itscontractualtermsgiveriseonspecifieddatestocashflowsthataresolelypaymentsofprincipalandinterestontheprincipalamountoutstanding.AdebtinvestmentismeasuredatFVOCIifitmeetsbothofthefollowingconditionsandisnotdesignatedasatFVTPL:

-itisheldwithinabusinessmodelwhoseobjectiveisachievedbybothcollectingcontractualcashflowsandsellingfinancialassets;and-itscontractualtermsgiveriseonspecifieddatestocashflowsthataresolelypaymentsofprincipalandinterestontheprincipalamountoutstanding.Oninitialrecognitionofanequityinvestmentthatisnotheldfortrading,theGroupmayirrevocablyelecttopresentsubsequentchangesintheinvestment’sfairvalueinothercomprehensiveincome.Thiselectionismadeonaninvestment-by-investmentbasis.Theinstrumentmeetsthedefinitionofequity

fromtheperspectiveoftheissuer.AllfinancialassetsnotclassifiedasmeasuredatamortisedcostorFVOCIasdescribedabovearemeasuredatFVTPL.Oninitialrecognition,theGroupmayirrevocablydesignateafinancialassetthatotherwisemeetstherequirementstobemeasuredatamortisedcostoratFVOCIasatFVTPLifdoingsoeliminatesorsignificantlyreducesanaccountingmismatchthatwouldotherwisearise.ThebusinessmodelreferstohowtheGroupmanagesitsfinancialassetsinordertogeneratecashflows.Thatis,theGroup’sbusinessmodeldetermineswhethercashflowswillresultfromcollectingcontractualcashflows,sellingfinancialassetsorboth.TheGroupdeterminesthebusinessmodelformanagingthefinancialassetsaccordingtothefactsandbasedonthespecificbusinessobjectiveformanagingthefinancialassetsdeterminedbytheGroup’skeymanagementpersonnel.Inassessingwhetherthecontractualcashflowsaresolelypaymentsofprincipalandinterest,theGroupconsidersthecontractualtermsoftheinstrument.Forthepurposesofthisassessment,‘principal’isdefinedasthefairvalueofthefinancialassetoninitialrecognition.‘Interest’isdefinedasconsiderationforthetimevalueofmoneyandforthecreditriskassociatedwiththeprincipalamountoutstandingduringaparticularperiodoftimeandforotherbasiclendingrisksandcosts,aswellasaprofitmargin.TheGroupalsoassesseswhetherthefinancialassetcontainsacontractualtermthatcouldchangethetimingoramountofcontractualcashflowssuchthatitwouldnotmeetthiscondition.(b)Subsequentmeasurementoffinancialassets-FinancialassetsatFVTPLThesefinancialassetsaresubsequentlymeasuredatfairvalue.Netgainsandlosses,includinganyinterestordividendincome,arerecognisedinprofitorlossunlessthefinancialassetsarepartofahedgingrelationship.-FinancialassetsatamortisedcostTheseassetsaresubsequentlymeasuredatamortisedcostusingtheeffectiveinterestmethod.Againorlossonafinancialassetthatismeasuredatamortisedcostandisnotpartofahedgingrelationshipshallberecognisedinprofitorlosswhenthefinancialassetisderecognised,throughtheamortisation

processorinordertorecogniseimpairmentgainsorlosses.-DebtinvestmentsatFVOCITheseassetsaresubsequentlymeasuredatfairvalue.Interestincomecalculatedusingtheeffectiveinterestmethod,impairmentandforeignexchangegainsandlossesarerecognisedinprofitorloss.Othernetgainsandlossesarerecognisedinothercomprehensiveincome.Onderecognition,gainsandlossesaccumulatedinothercomprehensiveincomearereclassifiedtoprofitorloss.-EquityinvestmentsatFVOCITheseassetsaresubsequentlymeasuredatfairvalue.Dividendsarerecognisedasincomeinprofitorloss.Othernetgainsandlossesarerecognisedinothercomprehensiveincome.Onderecognition,gainsandlossesaccumulatedinothercomprehensiveincomearereclassifiedtoretainedearnings.

5.9.3ClassificationandsubsequentmeasurementoffinancialliabilitiesFinancialliabilitiesareclassifiedasmeasuredatFVTPLoramortisedcostbytheGroup.-FinancialliabilitiesatFVTPLAfinancialliabilityisclassifiedasatFVTPLifitisclassifiedasheld-for-trading(includingderivativefinancialliability)oritisdesignatedassuchoninitialrecognition.FinancialliabilitiesatFVTPLaresubsequentlymeasuredatfairvalueandnetgainsandlosses,includinganyinterestexpense,arerecognisedinprofitorloss,unlessthefinancialliabilitiesarepartofahedgingrelationship.-FinancialliabilitiesatamortisedcostThesefinancialliabilitiesaresubsequentlymeasuredatamortisedcostusingtheeffectiveinterestmethod.

5.9.4Offsetting

Financialassetsandfinancialliabilitiesaregenerallypresentedseparatelyinthebalancesheet,andarenotoffset.However,afinancialassetandafinancialliabilityareoffsetandthenetamountispresentedinthebalancesheetwhenbothofthefollowingconditionsaresatisfied:

-TheGroupcurrentlyhasalegallyenforceablerighttosetofftherecognisedamounts;-TheGroupintendseithertosettleonanetbasis,ortorealisethefinancialassetandsettlethefinancialliabilitysimultaneously.

5.9.5DerecognitionoffinancialassetsandfinancialliabilitiesFinancialassetisderecognisedwhenoneofthefollowingconditionsismet:

-theGroup’scontractualrightstothecashflowsfromthefinancialassetexpire;-thefinancialassethasbeentransferredandtheGrouptransferssubstantiallyalloftherisksandrewardsofownershipofthefinancialasset;or;-thefinancialassethasbeentransferred,althoughtheGroupneithertransfersnorretainssubstantiallyalloftherisksandrewardsofownershipofthefinancialasset,itdoesnotretaincontroloverthetransferredasset.Whereatransferofafinancialassetinitsentiretymeetsthecriteriaforderecognition,thedifferencebetweenthetwoamountsbelowisrecognisedinprofitorloss:

-thecarryingamountofthefinancialassettransferredmeasuredatthedateofderecognition;-thesumoftheconsiderationreceivedfromthetransferand,whenthetransferredfinancialassetisadebtinvestmentatFVOCI,anycumulativegainorlossthathasbeenrecogniseddirectlyinothercomprehensiveincomeforthepartderecognised.TheGroupderecognisesafinancialliability(orpartofit)onlywhenitscontractualobligation(orpartofit)isextinguished.

5.9.6Impairment

TheGrouprecogniseslossallowancesforexpectedcreditloss(ECL)on:

-financialassetsmeasuredatamortisedcost;-financialinvestmentsatfairvaluethroughothercomprehensiveincomeFinancialassetsmeasuredatfairvalue,includingdebtinvestmentsorequitysecuritiesatFVPL,equitysecuritiesdesignatedatFVOCIandderivativefinancialassets,arenotsubjecttotheECLassessment.MeasurementofECLsECLsareaprobability-weightedestimateofcreditlosses.Creditlossesaremeasuredasthepresentvalueofallcashshortfalls(i.e.thedifferencebetweenthecashflowsduetotheentityinaccordancewiththecontractandthecashflowsthattheGroupexpectstoreceive).ThemaximumperiodconsideredwhenestimatingECLsisthemaximumcontractualperiod(includingextensionoptions)overwhichtheGroupisexposedtocreditrisk.LifetimeECLsaretheECLsthatresultfromallpossibledefaulteventsovertheexpectedlifeofafinancialinstrument.12-monthECLsaretheportionofECLsthatresultfromdefaulteventsthatarepossiblewithinthe12monthsafterthebalancesheetdate(orashorterperiodiftheexpectedlifeoftheinstrumentislessthan12months).Foraccountsreceivable,lossallowancealwaysmeasuredatanamountequaltolifetimeECLs.ECLsonthesefinancialassetsareestimatedusingaprovisionmatrixbasedontheGroup’shistoricalcreditlossexperience,adjustedforfactorsthatarespecifictothedebtorsandanassessmentofboththecurrentandforecastgeneraleconomicconditionsatthebalancesheetdate.Forassetsotherthanaccountsreceivablethatmeetoneofthefollowingconditions,lossallowancearemeasuredatanamountequalto12-monthECLs.Forallotherfinancialinstruments,theGrouprecognisesalossallowanceequaltolifetimeECLs:

-Ifthefinancialinstrumentisdeterminedtohavelowcreditriskatthebalancesheetdate;

-Ifthecreditriskonafinancialinstrumenthasnotincreasedsignificantlysinceinitialrecognition.FinancialinstrumentsthathavelowcreditriskThecreditriskonafinancialinstrumentisconsideredlowifthefinancialinstrumenthasalowriskofdefault,theborrowerhasastrongcapacitytomeetitscontractualcashflowobligationsintheneartermandadversechangesineconomicandbusinessconditionsinthelongertermmay,butwillnotnecessarily,reducetheabilityoftheborrowertofulfilitscontractualcashflowobligations.SignificantincreasesincreditriskInassessingwhetherthecreditriskofafinancialinstrumenthasincreasedsignificantlysinceinitialrecognition,theGroupcomparestheriskofdefaultoccurringonthefinancialinstrumentassessedatthebalancesheetdatewiththatassessedatthedateofinitialrecognition.WhendeterminingwhetherthecreditriskofafinancialassethasincreasedsignificantlysinceinitialrecognitionandwhenestimatingECL,theGroupconsidersreasonableandsupportableinformationthatisrelevantandavailablewithoutunduecostoreffort,includingforward-lookinginformation.Inparticular,thefollowinginformationistakenintoaccount:

-failuretomakepaymentsofprincipalorinterestontheircontractuallyduedates;-anactualorexpectedsignificantdeteriorationinafinancialinstrument’sexternalorinternalcreditrating(ifavailable);-anactualorexpectedsignificantdeteriorationintheoperatingresultsofthedebtor;and-existingorforecastchangesinthetechnological,market,economicorlegalenvironmentthathaveasignificantadverseeffectonthedebtor’sabilitytomeetitsobligationtotheGroup.Dependingonthenatureofthefinancialinstruments,theassessmentofasignificantincreaseincreditriskisperformedoneitheranindividualbasisoracollectivebasis.Whentheassessmentisperformedonacollectivebasis,thefinancialinstrumentsaregroupedbasedonsharedcreditriskcharacteristics,suchaspastduestatusandcreditriskratings.TheGroupassumesthatthecreditriskonafinancialassethasincreasedsignificantlyifitismorethan30dayspastdue.

Credit-impairedfinancialassetsAteachbalancesheetdate,theGroupassesseswhetherfinancialassetscarriedatamortisedcostanddebtinvestmentsatFVOCIarecredit-impaired.Afinancialassetis‘credit-impaired’whenoneormoreeventsthathaveadetrimentalimpactontheestimatedfuturecashflowsofthefinancialassethaveoccurred.Evidencethatafinancialassetiscredit-impairedincludesthefollowingobservabledata:

-significantfinancialdifficultyoftheborrowerorissuer;-abreachofcontract,suchasadefaultordelinquencyininterestorprincipalpayments;-foreconomicorcontractualreasonsrelatingtotheborrower’sfinancialdifficulty,theGrouphavinggrantedtotheborroweraconcessionthatwouldnototherwiseconsider;-itisprobablethattheborrowerwillenterbankruptcyorotherfinancialreorganisation;or-thedisappearanceofanactivemarketforthatfinancialassetbecauseoffinancialdifficulties.PresentationofallowanceforECLECLsareremeasuredateachbalancesheetdatetoreflectchangesinthefinancialinstrument’screditrisksinceinitialrecognition.AnychangeintheECLamountisrecognisedasanimpairmentgainorlossinprofitorloss.TheGrouprecognisesanimpairmentgainorlossforallfinancialinstrumentswithacorrespondingadjustmenttotheircarryingamountthroughalossallowanceaccount,exceptfordebtinvestmentsthataremeasuredatFVOCI,forwhichthelossallowanceisrecognisedinothercomprehensiveincome.Write-offThegrosscarryingamountofafinancialassetiswrittenoff(eitherpartiallyorinfull)totheextentthatthereisnorealisticprospectofrecovery.Awrite-offconstitutesaderecognitionevent.ThisisgenerallythecasewhentheGroupdeterminesthatthedebtordoesnothaveassetsorsourcesofincomethatcouldgeneratesufficientcashflowstorepaytheamountssubjecttothewrite-off.However,financialassetsthatarewrittenoffcouldstillbesubjecttoenforcementactivitiesinordertocomplywiththeGroup’sproceduresforrecoveryofamountsdue.Subsequentrecoveriesofanassetthatwaspreviouslywrittenoffarerecognisedasareversalofimpairmentinprofitorlossintheperiodinwhichtherecoveryoccurs.

5.9.7Equityinstrument

Theconsiderationreceivedfromtheissuanceofequityinstrumentsnetoftransactioncostsisrecognisedinshareholders’equity.ConsiderationandtransactioncostspaidbytheCompanyforrepurchasingself-issuedequityinstrumentsaredeductedfromshareholders’equity.WhentheCompanyrepurchasesitsownshares,thosesharesaretreatedastreasuryshares.Allexpenditurerelatingtotherepurchaseisrecordedinthecostofthetreasuryshares,withthetransactionrecordingintheshareregister.Treasurysharesareexcludedfromprofitdistributionsandarepresentedasadeductionundershareholders’equityinthebalancesheet.

5.10Inventories

5.10.1Classificationandcost

Inventoriesincluderawmaterials,workinprogressandreusablematerials.Inventoriesareinitiallymeasuredatcost.Costofinventoriescomprisesallcostsofpurchase,costsofconversionandotherexpenditureincurredinbringingtheinventoriestotheirpresentlocationandcondition.Inadditiontothepurchasecostofrawmaterials,workinprogressandfinishedgoodsincludedirectlabourcostsandanappropriateallocationofproductionoverheads.AgriculturalproductsharvestedarereportedinaccordancewiththeCASNo.1-Inventories.

5.10.2Measurementmethodofcostofinventories

Costofinventoriesiscalculatedusingtheweightedaveragemethod.Consumablesincludinglow-valueconsumablesandpackagingmaterialsareamortisedwhentheyareused.Theamortisationchargeisincludedinthecostoftherelatedassetsorrecognisedinprofitorlossforthecurrentperiod.

5.10.3Basisfordeterminingthenetrealisablevalueandmethodforprovisionfor

obsoleteinventoriesAtthebalancesheetdate,inventoriesarecarriedatthelowerofcostandnetrealisablevalue.Netrealisablevalueistheestimatedsellingpriceintheordinarycourseofbusinesslesstheestimatedcostsofcompletionandtheestimatedcostsnecessarytomakethesaleandrelevanttaxes.Thenetrealisablevalueofmaterialsheldforuseintheproductionismeasuredbasedonthenetrealisablevalueofthefinishedgoodsinwhichtheywillbeincorporated.Thenetrealisablevalueoftheinventoryheldtosatisfysalesorservicecontractsismeasuredbasedonthecontractprice,totheextentofthequantitiesspecifiedinsalescontracts,andtheexcessportionofinventoriesismeasuredbasedongeneralsellingprices.Anyexcessofthecostoverthenetrealisablevalueofeachitemofinventoriesisrecognisedasaprovisionforimpairment,andisrecognisedinprofitorloss.

5.10.4Inventorycountsystem

TheGroupmaintainsaperpetualinventorysystem.

5.11Long-termequityinvestments

5.11.1Investmentcostoflong-termequityinvestments(a)Long-termequityinvestmentsacquiredthroughabusinesscombination-Theinitialcostofalong-termequityinvestmentacquiredthroughabusinesscombinationinvolvingentitiesundercommoncontrolistheCompany’sshareofthecarryingamountofthesubsidiary’sequityintheconsolidatedfinancialstatementsoftheultimatecontrollingpartyatthecombinationdate.Thedifferencebetweentheinitialinvestmentcostandthecarryingamountoftheconsiderationgivenisadjustedtothesharepremiuminthecapitalreserve,withanyexcessadjustedtoretainedearnings.Foralong-termequityinvestmentinasubsidiaryacquiredthroughabusinesscombinationachievedinstageswhichdonotformabundledtransactionandinvolvingentitiesundercommoncontrol,theCompanydeterminestheinitialcostoftheinvestmentinaccordancewiththeabovepolicies.Thedifferencebetweenthisinitialcostandthesumofthecarryingamountof

previously-heldinvestmentandtheconsiderationpaidforthesharesnewlyacquiredisadjustedtocapitalpremiuminthecapitalreserve,withanyexcessadjustedtoretainedearnings.-Foralong-termequityinvestmentobtainedthroughabusinesscombinationnotinvolvingenterprisesundercommoncontrol,theinitialcostcomprisestheaggregateofthefairvalueofassetstransferred,liabilitiesincurredorassumed,andequitysecuritiesissuedbytheCompany,inexchangeforcontroloftheacquiree.Foralong-termequityinvestmentobtainedthroughabusinesscombinationnotinvolvingentitiesundercommoncontrolandachievedthroughmultipletransactionsinstageswhichdonotformabundledtransaction,theinitialcostcomprisesthecarryingamountofthepreviously-heldequityinvestmentintheacquireeimmediatelybeforetheacquisitiondate,andtheadditionalinvestmentcostattheacquisitiondate.(b)Long-termequityinvestmentsacquiredotherthanthroughabusinesscombination-Along-termequityinvestmentacquiredotherthanthroughabusinesscombinationisinitiallyrecognisedattheamountofcashpaidiftheGroupacquirestheinvestmentbycash,oratthefairvalueoftheequitysecuritiesissuedifaninvestmentisacquiredbyissuingequitysecurities.

5.11.2Subsequentmeasurementoflong-termequityinvestment

(a)InvestmentsinsubsidiariesIntheCompany’sseparatefinancialstatements,long-termequityinvestmentsinsubsidiariesareaccountedforusingthecostmethodunlesstheinvestmentisclassifiedasheldforsale.Exceptforcashdividendsorprofitdistributionsdeclaredbutnotyetdistributedthathavebeenincludedinthepriceorconsiderationpaidinobtainingtheinvestments,theCompanyrecognisesitsshareofthecashdividendsorprofitdistributionsdeclaredbytheinvesteeasinvestmentincomeforthecurrentperiod.Theinvestmentsinsubsidiariesarestatedinthebalancesheetatcostlessaccumulatedimpairmentlosses.Fortheimpairmentoftheinvestmentsinsubsidiaries,refertoNote5.20.IntheGroup’sconsolidatedfinancialstatements,subsidiariesareaccountedforinaccordancewiththepoliciesdescribedinNote5.6.

(b)InvestmentsinjointventuresAjointventureisanarrangementwherebytheGroupandotherpartieshavejointcontrolandrightstothenetassetsofthearrangement.Along-termequityinvestmentinajointventureisaccountedforusingtheequitymethodforsubsequentmeasurement,unlesstheinvestmentisclassifiedasheldforsale.TheaccountingtreatmentsundertheequitymethodadoptedbytheGroupareasfollows:

-Wheretheinitialcostofalong-termequityinvestmentexceedstheGroup’sinterestinthefairvalueoftheinvestee’sidentifiablenetassetsatthedateofacquisition,theinvestmentisinitiallyrecognisedatcost.WheretheinitialinvestmentcostislessthantheGroup’sinterestinthefairvalueoftheinvestee’sidentifiablenetassetsatthedateofacquisition,theinvestmentisinitiallyrecognisedattheinvestor’sshareofthefairvalueoftheinvestee’sidentifiablenetassets,andthedifferenceisrecognisedinprofitorloss.-Aftertheacquisitionoftheinvestment,theGrouprecognisesitsshareoftheinvestee’sprofitorlossandothercomprehensiveincomeasinvestmentincomeorlossesandothercomprehensiveincomerespectively,andadjuststhecarryingamountoftheinvestmentaccordingly.Oncetheinvesteedeclaresanycashdividendsorprofitdistributions,thecarryingamountoftheinvestmentisreducedbytheamountattributabletotheGroup.ChangesintheGroup’sshareoftheinvestee’sowners’equity,otherthanthosearisingfromtheinvestee’snetprofitorloss,othercomprehensiveincomeorprofitdistribution(referredtoas“otherchangesinowners’equity”),isrecogniseddirectlyintheGroup’sequity,andthecarryingamountoftheinvestmentisadjustedaccordingly.-Incalculatingitsshareoftheinvestee’snetprofitsorlosses,othercomprehensiveincomeandotherchangesinowners’equity,theGrouprecognisesinvestmentincomeandothercomprehensiveincomeaftermakingappropriateadjustmentstoaligntheaccountingpoliciesoraccountingperiodswiththoseoftheGroupbasedonthefairvalueoftheinvestee’sidentifiablenetassetsatthedateofacquisition.UnrealisedprofitsandlossesresultingfromtransactionsbetweentheGroupanditsassociatesorjointventuresareeliminatedtotheextentoftheGroup’sinterestintheassociatesorjointventures.UnrealisedlossesresultingfromtransactionsbetweentheGroupanditsassociatesorjointventuresareeliminatedinthesamewayasunrealisedgainsbutonlytotheextentthatthereisno

impairment.-TheGroupdiscontinuesrecognisingitsshareoffurtherlossesoftheinvesteeafterthecarryingamountofthelong-termequityinvestmentandanylong-terminterestthatinsubstanceformspartoftheGroup’snetinvestmentintheassociateisreducedtozero,excepttotheextentthattheGrouphasanobligationtoassumeadditionallosses.Ifthejointventuresubsequentlyreportsnetprofits,theGroupresumesrecognisingitsshareofthoseprofitsonlyafteritsshareoftheprofitsequalstheshareoflossesnotrecognised.Fortheimpairmentoftheinvestmentsinjointventuresandassociates,refertoNote5.20.

5.11.3CriteriafordeterminingtheexistenceofjointcontroloveraninvesteeJointcontrolisthecontractuallyagreedsharingofcontrolofanarrangement,whichexistsonlywhendecisionsabouttherelevantactivities(activitieswithsignificantimpactonthereturnsofthearrangement)requiretheunanimousconsentofthepartiessharingcontrol.ThefollowingfactorsareusuallyconsideredwhenassessingwhethertheGroupcanexercisejointcontroloveraninvestee:

-Whethernosingleparticipantpartyisinapositiontocontroltheinvestee’srelatedactivitiesunilaterally;-Whetherstrategicdecisionsrelatingtotheinvestee’srelatedactivitiesrequiretheunanimousconsentofallparticipantpartiesthatsharingofcontrol.Significantinfluenceisthepowertoparticipateinthefinancialandoperatingpolicydecisionsofaninvesteebutdoesnothavecontrolorjointcontroloverthosepolicies.

5.12Investmentproperties

Investmentpropertiesarepropertiesheldeithertoearnrentalincomeorforcapitalappreciationorforboth.Investmentpropertiesareaccountedforusingthecostmodelandstatedinthebalancesheetatcostlessaccumulateddepreciation,amortisationandimpairmentlosses,andadoptsadepreciationoramortisationpolicyfortheinvestmentpropertywhichisconsistentwiththatforbuildingsorlanduse

rights,unlesstheinvestmentpropertyisclassifiedasheldforsale.Fortheimpairmentoftheinvestmentproperties,refertoNote5.20.

Category

CategoryEstimatedusefullife(years)Residualvaluerate(%)Depreciationrate(%)
Plantandbuildings20-40years0-5%2.4%-5.0%

5.13Fixedassets

5.13.1Recognitionoffixedassets

FixedassetsrepresentthetangibleassetsheldbytheGroupforuseinproductionofgoods,supplyofservices,forrentalorforadministrativepurposeswithusefullivesoveroneaccountingyear.Thecostofapurchasedfixedassetcomprisesthepurchaseprice,relatedtaxes,andanydirectlyattributableexpenditureforbringingtheassettoworkingconditionforitsintendeduse.Thecostofself-constructedassetsismeasuredinaccordancewiththepolicysetoutinNote5.14.WherethepartsofanitemoffixedassetshavedifferentusefullivesorprovidebenefitstotheGroupinadifferentpattern,thusnecessitatinguseofdifferentdepreciationratesormethods,eachpartisrecognisedasaseparatefixedasset.AnysubsequentcostsincludingthecostofreplacingpartofanitemoffixedassetsarerecognisedasassetswhenitisprobablethattheeconomicbenefitsassociatedwiththecostswillflowtotheGroup,andthecarryingamountofthereplacedpartisderecognised.Thecostsoftheday-to-daymaintenanceoffixedassetsarerecognisedinprofitorlossasincurred.Fixedassetsarestatedinthebalancesheetatcostlessaccumulateddepreciationandimpairmentlosses.

5.13.2DepreciationoffixedassetsThecostofafixedasset,lessitsestimatedresidualvalueandaccumulatedimpairmentlosses,is

depreciatedusingthestraight-linemethodoveritsestimatedusefullife,unlessthefixedassetisclassifiedasheldforsale.Theestimatedusefullives,residualvalueratesanddepreciationratesofeachclassoffixedassetsareasfollows:

Class

ClassEstimatedusefullife(years)Residualvaluerate(%)Depreciationrate(%)
Plantandbuildings20-40years0-5%2.4%-5.0%
Machineryequipment5-30years0-5%3.2%-20.0%
Motorvehicles4-12years0-5%7.9%-25.0%

Usefullives,estimatedresidualvaluesanddepreciationmethodsarereviewedatleastateachyear-end.

5.13.3Fortheimpairmentofthefixedassets,refertoNote5.20.

5.13.4Disposaloffixedassets

Thecarryingamountofafixedassetisderecognised:

-whenthefixedassetisholdingfordisposal;or-whennofutureeconomicbenefitisexpectedtobegeneratedfromitsuseordisposal.Gainsorlossesarisingfromtheretirementordisposalofanitemoffixedassetaredeterminedasthedifferencebetweenthenetdisposalproceedsandthecarryingamountoftheitem,andarerecognisedinprofitorlossonthedateofretirementordisposal.

5.14Constructioninprogress

Thecostofself-constructedassetsincludesthecostofmaterials,directlabour,capitalisedborrowingcosts,andanyothercostsdirectlyattributabletobringingtheassettoworkingconditionforitsintendeduse.

Aself-constructedassetisclassifiedasconstructioninprogressandtransferredtofixedassetwhenitisreadyforitsintendeduse.Nodepreciationisprovidedagainstconstructioninprogress.Constructioninprogressisstatedinthebalancesheetatcostlessaccumulatedimpairmentlosses(seeNote5.20).

5.15Borrowingcosts

Borrowingcostsincurreddirectlyattributabletotheacquisition,andconstructionorproductionofaqualifyingassetarecapitalisedaspartofthecostoftheasset.Otherborrowingcostsarerecognisedasfinancialexpenseswhenincurred.Duringthecapitalisationperiod,theamountofinterest(includingamortisationofanydiscountorpremiumonborrowing)tobecapitalisedineachaccountingperiodisdeterminedasfollows:

-Wherefundsareborrowedspecificallyfortheacquisitionandconstructionorproductionofaqualifyingasset,theamountofinteresttobecapitalisedistheinterestexpensecalculatedusingeffectiveinterestratesduringtheperiodlessanyinterestincomeearnedfromdepositingtheborrowedfundsoranyinvestmentincomeonthetemporaryinvestmentofthosefundsbeforebeingusedontheasset.-TotheextentthattheGroupborrowsfundsgenerallyandusesthemfortheacquisitionandconstructionorproductionofaqualifyingasset,theamountofborrowingcostseligibleforcapitalisationisdeterminedbyapplyingacapitalisationratetotheweightedaverageoftheexcessamountsofcumulativeexpenditureontheassetovertheaboveamountsofspecificborrowings.Thecapitalisationrateistheweightedaverageoftheinterestratesapplicabletothegeneral-purposeborrowings.Theeffectiveinterestrateisdeterminedastheratethatexactlydiscountsestimatedfuturecashflowthroughtheexpectedlifeoftheborrowingor,whenappropriate,ashorterperiodtotheinitiallyrecognisedamountoftheborrowings.Duringthecapitalisationperiod,exchangedifferencesrelatedtotheprincipalandinterestonaspecific-purposeborrowingdenominatedinforeigncurrencyarecapitalisedaspartofthecostofthequalifyingasset.Theexchangedifferencesrelatedtotheprincipalandinterestonforeigncurrency

borrowingsotherthanaspecific-purposeborrowingarerecognisedasafinancialexpensewhenincurred.Thecapitalisationperiodistheperiodfromthedateofcommencementofcapitalisationofborrowingcoststothedateofcessationofcapitalisation,excludinganyperiodoverwhichcapitalisationissuspended.Capitalisationofborrowingcostscommenceswhenexpenditurefortheassetisbeingincurred,borrowingcostsarebeingincurredandactivitiesofacquisition,constructionorproductionthatarenecessarytopreparetheassetforitsintendeduseareinprogress,andceaseswhentheassetsbecomereadyfortheirintendeduse.Capitalisationofborrowingcostsshouldceasewhenthequalifyingassetbeingconstructedorproducedhasreacheditsexpectedusableorsaleablecondition.Capitalisationofborrowingcostsissuspendedwhentheacquisition,constructionorproductionactivitiesareinterruptedabnormallyforaperiodofmorethanthreemonths.

5.16Biologicalassets

ThebiologicalassetsoftheGroupareproductivebiologicalassets.Bearerbiologicalassetsarethosethatareheldforthepurposesofproducingagriculturalproduce,renderingofservicesorrental.BearerbiologicalassetsintheGrouparevines.Bearerbiologicalassetsareinitiallymeasuredatcost.Thecostofself-grownorself-bredbearerbiologicalassetsrepresentsthenecessarydirectlyattributableexpenditureincurredbeforesatisfyingtheexpectedproductionandoperatingpurpose,includingcapitalisedborrowingcosts.Bearerbiologicalassets,afterreachingtheexpectedproductionandoperatingpurpose,aredepreciatedusingthestraight-linemethodoveritsestimatedusefullife.Theestimatedusefullives,estimatednetresidualvalueratesanddepreciationratesofbearerbiologicalassetsareasfollows:

Category

CategoryUsefullife(years)Estimatednetresidualrate(%)Annualdepreciationrate(%)
Vines20years0%5.0%

TheGroupevaluatestheusefullifeandexpectednetsalvagevaluebyconsideringthenormalproducinglifeofthebearerbiologicalassets.

Usefullives,estimatedresidualvaluesanddepreciationmethodsofbearerbiologicalassetsarereviewedatleastateachyear-end.Anychangesshouldbetreatedaschangesinaccountingestimates.Forabearerbiologicalassetthathasbeensold,damaged,deadordestroyed,anydifferencebetweenthedisposalproceedsandthecarryingamountoftheasset(aftertaxdeduction)shouldberecognisedinprofitorlossfortheperiodinwhichitarises.

5.17Intangibleassets

Intangibleassetsarestatedinthebalancesheetatcostlessaccumulatedamortization(wheretheestimatedusefullifeisfinite)andimpairmentlosses(seeNote5.20).Foranintangibleassetwithfiniteusefullife,itscostestimatedlessresidualvalueandaccumulatedimpairmentlossesisamortisedonthestraight-linemethodoveritsestimatedusefullife,unlesstheintangibleassetisclassifiedasheldforsale.Therespectiveamortisationperiodsforintangibleassetsareasfollows:

Item

ItemAmortisationperiod(years)
Landuserights40-50years
Softwarelicenses5-10years
Trademark10years

AnintangibleassetisregardedashavinganindefiniteusefullifeandisnotamortisedwhenthereisnoforeseeablelimittotheperiodoverwhichtheassetisexpectedtogenerateeconomicbenefitsfortheGroup.Atthebalancesheetdate,theGrouphadintangibleassetswithinfiniteusefullivesincludingthelanduserightsandtrademarks.LanduserightswithinfiniteusefullivesarepermanentlanduserightswithpermanentownershipheldbytheGroupundertherelevantChileandAustralianlawsarisingfromtheGroup’sacquisitionofVi?aIndómita,S.A.,Vi?aDosAndes,S.A.,andBodegasSantaAliciaSpA.(collectivelyreferredtoasthe"ChileIndomitaWineGroup"),andtheacquisitionofKilikanoonEstatePtyLtd.(hereinafterreferredtoasthe"AustraliaKilikanoonEstate"),thereforetherewasnoamortisation.TherighttousetrademarkreferstothetrademarkheldbytheGrouparisingfromtheacquisitionoftheChileIndomitaWineGroupandtheAustraliaKilikanoonEstatewithinfiniteusefullives.Thevaluationoftrademarkwasbasedonthetrendsinthemarketandcompetitiveenvironment,productcycle,andmanaginglong-termdevelopmentstrategy.Thosebasesindicatedthe

trademarkwillprovidenetcashflowstotheGroupwithinanuncertainperiod.TheusefullifeisindefiniteasitwashardtopredicttheperiodthatthetrademarkwouldbringeconomicbenefitstotheGroup.

5.18Goodwill

Theinitialcostofgoodwillrepresentstheexcessofcostofacquisitionovertheacquirer’sinterestinthefairvalueoftheidentifiablenetassetsoftheacquireeunderabusinesscombinationnotinvolvingentitiesundercommoncontrol.Goodwillisnotamortisedandisstatedinthebalancesheetatcostlessaccumulatedimpairmentlosses(seeNote5.20).Ondisposalofanassetgrouporasetofassetgroups,anyattributablegoodwilliswrittenoffandincludedinthecalculationoftheprofitorlossondisposal.

5.19Long-termdeferredexpensesLong-termdeferredexpensesareamortisedusingastraight-linemethodwithinthebenefitperiod.Therespectiveamortisationperiodsforsuchexpensesareasfollows:

Item

ItemAmortisationperiod
Landrequisitionfee50years
Landleasefee50years
Greeningfee5-20years
Renovationfee3-5years
Others3years

5.20Impairmentofassetsotherthaninventoriesandfinancialassets

Thecarryingamountsofthefollowingassetsarereviewedateachbalancesheetdatebasedoninternalandexternalsourcesofinformationtodeterminewhetherthereisanyindicationofimpairment:

-fixedassets

-constructioninprogress-intangibleassets-Bearerbiologicalassets-investmentpropertiesmeasuredusingacostmodel-long-termequityinvestments-goodwill-long-termdeferredexpenses,etc.Ifanyindicationexists,therecoverableamountoftheassetisestimated.Inaddition,theGroupestimatestherecoverableamountsofgoodwillandintangibleassetswithinfiniteusefullivesateachyear-end,irrespectiveofwhetherthereisanyindicationofimpairment.Goodwillisallocatedtoeachassetgroup,orsetofassetgroups,thatisexpectedtobenefitfromthesynergiesofthecombinationforthepurposeofimpairmenttesting.Therecoverableamountofanasset(orassetgroup,setofassetgroups)isthehigherofitsfairvalue(seeNote5.21)lesscoststosellanditspresentvalueofexpectedfuturecashflows.Anassetgroupiscomposedofassetsdirectlyrelatedtocash-generationandisthesmallestidentifiablegroupofassetsthatgeneratescashinflowsthatarelargelyindependentofthecashinflowsfromotherassetsorassetgroups.Thepresentvalueofexpectedfuturecashflowsofanassetisdeterminedbydiscountingthefuturecashflows,estimatedtobederivedfromcontinuinguseoftheassetandfromitsultimatedisposal,totheirpresentvalueusinganappropriatepre-taxdiscountrate.Animpairmentlossisrecognisedinprofitorlosswhentherecoverableamountofanassetislessthanitscarryingamount.Aprovisionforimpairmentoftheassetisrecognisedaccordingly.Impairmentlossesrelatedtoanassetgrouporasetofassetgroupsareallocatedfirsttoreducethecarryingamountofanygoodwillallocatedtotheassetgrouporsetofassetgroups,andthentoreducethecarryingamountoftheotherassetsintheassetgrouporsetofassetgroupsonaproratabasis.However,suchallocationwouldnotreducethecarryingamountofanassetbelowthehighestofitsfairvaluelesscoststosell(ifmeasurable),itspresentvalueofexpectedfuturecashflows(ifdeterminable)andzero.Onceanimpairmentlossisrecognised,itisnotreversedinasubsequentperiod.

5.21Fairvaluemeasurement

Unlessotherwisespecified,theGroupmeasuresfairvalueasfollows:

Fairvalueisthepricethatwouldbereceivedtosellanassetorpaidtotransferaliabilityinanorderlytransactionbetweenmarketparticipantsatthemeasurementdate.Whenmeasuringfairvalue,theGrouptakesintoaccountthecharacteristicsoftheparticularassetorliability(includingtheconditionandlocationoftheassetandrestrictions,ifany,onthesaleoruseoftheasset)thatmarketparticipantswouldconsiderwhenpricingtheassetorliabilityatthemeasurementdate,andusesvaluationtechniquesthatareappropriateinthecircumstancesandforwhichsufficientdataandotherinformationareavailabletomeasurefairvalue.Valuationtechniquesmainlyincludethemarketapproach,theincomeapproachandthecostapproach.

5.22Revenue

TheGrouprecognizestherevenueuponfulfillmentofitsperformanceobligationsinthecontract,thatis,theclientobtainscontrolrightovertherelevantgoodsorservices.Iftherearetwoormoreperformanceobligationsunderthecontact,whichshallbefulfilled,theGroupwillapportionthetransactionpricetovariousindividualperformanceobligationsinaccordancewiththerelativeproportionofseparatesellingpricesofvariousgoodsorservicesundertheseperformanceobligationsonthecommencementdateofthecontract,andmeasureandrecognizetherevenueinaccordancewiththetransactionpricesapportionedtovariousindividualperformanceobligations.Forcontractswithqualityassuranceclauses,theGroupanalyzesthenatureofthequalityassuranceprovided.Ifqualityassuranceprovidesaseparateserviceinadditiontoensuringtotheclientthatthegoodssoldmeettheestablishedstandards,theGroupwilltreatitasanindividualperformanceobligation.Otherwise,theGroupconductsaccountingtreatmentinaccordancewiththeAccountingStandardsforBusinessEnterprisesNo.13-Contingencies.ThetransactionpricereferstotheamountofconsiderationthattheGroupexpectstobeentitledtoreceiveduetothetransferofgoodsorservicestotheclient,excludingpaymentsreceivedonbehalfofthirdparties.ThetransactionpricerecognizedbytheGroupdoesnotexceedtheamountatwhichtheaccumulatedrecognizedrevenuewillmostlikelynotundergoasignificantreversalwhentherelevantuncertaintyiseliminated.Itisexpectedthatthemoneyreturnedtotheclientwillberegardedasa

returnliabilityandnotincludedinthetransactionprice.Intheeventthatthereisasignificantfinancingpartinthecontract,theGroupdeterminesthetransactionpricebasedontheamountpayableincashwhentheclientobtainscontrolrightovertherelevantgoodsorservices.Thedifferencebetweenthetransactionpriceandthecontractconsiderationshallbeamortizedbytheeffectiveinterestmethodduringthecontractperiod.Fromthedayoftheenforcementofthecontract,theGroupexpectsthattheintervalbetweentheclient'sacquisitionofcontrolrightoverthegoodsorservicesandtheclient'spaymentofthepricewillnotexceedoneyear,regardlessofthesignificantfinancingpartinthecontract.IftheGroupmeetsoneofthefollowingconditions,thefulfillmentofitsperformanceobligationsinacertainperiodwillbedeemed,orthefulfillmentofitsperformanceobligationsatacertaintimepointwillbedeemed:

-TheclientobtainsandconsumestheeconomicbenefitswhiletheGroupfulfillstheperformanceobligation;-TheclientmanagestocontrolthegoodsinprocesswhiletheGroupfulfillstheperformanceobligation.-GoodsproducedduringtheperformanceperiodhaveirreplaceablepurposesandtheGroupisentitledtochargemoneyfortheperformanceaccumulatedandhasbeenfinisheduntilthecurrenttimewithinthewholecontractperiod.Foranyperformanceobligationsfulfilledinacertainperiod,theGroupwillrecognizerevenuewithinthecertainperiodinaccordancewiththeperformanceprogress.IftheperformanceprogresscannotbedeterminedreasonablyandcostsincurredareexpectedtobecompensatedoftheGroup,therevenuewillbeascertainedaccordingtothecostsincurreduntiltheperformanceprogressisdeterminedreasonably.Intermsofperformanceobligationsfulfilledatacertaintimepoint,theGroupwillrecognizerevenuewhentheclientgainscontrolrightovertherelevantgoodsorservices.Whenitcomestodeterminingwhetheraclienthasacquiredthecontrolrightovergoodsorservices,theGroupwillconsiderthefollowingconditions:

-TheGrouphasthecurrentrighttoreceivepaymentforthegoodsorservices;-TheGrouphastransferredthegoodsinkindtotheclient;-TheGrouphastransferredthelegalownershipoftheproductorthemainrisksandrewardsofownershiptotheclient;-Theclienthasacceptedthegoodsorservices,etc.

TheGrouphastransferredthegoodsorservicestotheclientandthushastherighttoreceivecorrespondingconsideration(andtherightisdependableonfactorsotherthantimelapses)ascontractasset,whichissubjecttoprovisionofimpairmentonthebasisofexpectedcreditloss.TherightenjoyedbytheGroup(onlydependsontimelapses)toreceiveconsiderationunconditionallyfromtheclientshallbepresentedunderaccountreceivables.TheGrouppresentstheobligationoftransferringgoodsorservicesfortheclientduetotheconsiderationreceivedorreceivableascontractliabilities.

5.23Employeebenefits

5.23.1Short-termemployeebenefits

Employeewagesorsalaries,bonuses,socialsecuritycontributionssuchasmedicalinsurance,workinjuryinsurance,maternityinsuranceandhousingfund,measuredattheamountincurredoraccuredattheapplicablebenchmarksandrates,arerecognisedasaliabilityastheemployeeprovidesservices,withacorrespondingchargetoprofitorlossorincludedinthecostofassetswhereappropriate.

5.23.2Post-employmentbenefits–definedcontributionplans

PursuanttotherelevantlawsandregulationsofthePeople’sRepublicofChina,theGroupparticipatedinadefinedcontributionbasicpensioninsuranceplaninthesocialinsurancesystemestablishedandmanagedbygovernmentorganisations.TheGroupmakescontributionstobasicpensioninsuranceplansbasedontheapplicablebenchmarksandratesstipulatedbythegovernment.Basicpensioninsurancecontributionspayablearerecognisedasaliabilityastheemployeeprovidesservices,withacorrespondingchargetoprofitorlossorincludedinthecostofassetswhereappropriate.

5.23.3Terminationbenefits

WhentheGroupterminatestheemploymentwithemployeesbeforetheemploymentcontractsexpire,orprovidescompensationunderanoffertoencourageemployeestoacceptvoluntaryredundancy,aprovisionisrecognisedwithacorrespondingexpenseinprofitorlossattheearlierofthefollowingdates:

-WhentheGroupcannotunilaterallywithdrawtheofferofterminationbenefitsbecauseofan

employeeterminationplanoracurtailmentproposal;-WhentheGrouphasaformaldetailedrestructuringplaninvolvingthepaymentofterminationbenefitsandhasraisedavalidexpectationinthoseaffectedthatitwillcarryouttherestructuringbystartingtoimplementthatplanorannouncingitsmainfeaturestothoseaffectedbyit.

5.24GovernmentgrantsGovernmentgrantsarenon-reciprocaltransfersofmonetaryornon-monetaryassetsfromthegovernmenttotheGroupexceptforcapitalcontributionsfromthegovernmentinthecapacityasaninvestorintheGroup.AgovernmentgrantisrecognisedwhenthereisreasonableassurancethatthegrantwillbereceivedandthattheGroupwillcomplywiththeconditionsattachingtothegrant.Ifagovernmentgrantisintheformofatransferofamonetaryasset,itismeasuredattheamountreceivedorreceivable.Ifagovernmentgrantisintheformofatransferofanon-monetaryasset,itismeasuredatfairvalue.GovernmentgrantsrelatedtoassetsaregrantswhoseprimaryconditionisthattheGroupqualifyingforthemshouldpurchase,constructorotherwiseacquirelong-termassets.Governmentgrantsrelatedtoincomearegrantsotherthanthoserelatedtoassets.Agovernmentgrantrelatedtoanassetisrecognisedasdeferredincomeandamortisedovertheusefullifeoftherelatedassetonareasonableandsystematicmannerasotherincomeornon-operatingincome.AgrantthatcompensatestheCompanyforexpensesorlossestobeincurredinthefutureisrecognisedasdeferredincome,andincludedinotherincomeornon-operatingincomeintheperiodsinwhichtheexpensesorlossesarerecognised,orincludedinotherincomeornon-operatingincomedirectly.

5.25Incometax

Currenttaxanddeferredtaxarerecognisedinprofitorlossexcepttotheextentthattheyrelatetoabusinesscombinationoritemsrecogniseddirectlyinequity(includingothercomprehensiveincome).Currenttaxistheexpectedtaxpayablecalculatedattheapplicabletaxrateontaxableincomefortheyear,plusanyadjustmenttotaxpayableinrespectofpreviousyears.

Atthebalancesheetdate,currenttaxassetsandliabilitiesareoffsetonlyiftheGrouphasalegallyenforceablerighttosetthemoffandalsointendseithertosettleonanetbasisortorealisetheassetandsettletheliabilitysimultaneously.Deferredtaxassetsanddeferredtaxliabilitiesarisefromdeductibleandtaxabletemporarydifferencesrespectively,beingthedifferencesbetweenthecarryingamountsofassetsandliabilitiesforfinancialreportingpurposesandtheirtaxbases,whichincludethedeductiblelossesandtaxcreditscarriedforwardtosubsequentperiods.Deferredtaxassetsarerecognisedtotheextentthatitisprobablethatfuturetaxableprofitswillbeavailableagainstwhichdeductibletemporarydifferencescanbeutilised.Deferredtaxisnotrecognisedforthetemporarydifferencesarisingfromtheinitialrecognitionofassetsorliabilitiesinatransactionthatisnotabusinesscombinationandthataffectsneitheraccountingprofitnortaxableprofit(ordeductibleloss).Deferredtaxisnotrecognisedfortaxabletemporarydifferencesarisingfromtheinitialrecognitionofgoodwill.Atthebalancesheetdate,deferredtaxismeasuredbasedonthetaxconsequencesthatwouldfollowfromtheexpectedmannerofrecoveryorsettlementofthecarryingamountsoftheassetsandliabilities,usingtaxratesenactedatthebalancesheetdatethatareexpectedtobeappliedintheperiodwhentheassetisrecoveredortheliabilityissettled.Thecarryingamountofadeferredtaxassetisreviewedateachbalancesheetdate,andisreducedtotheextentthatitisnolongerprobablethattherelatedtaxbenefitswillbeutilised.Suchreductionisreversedtotheextentthatitbecomesprobablethatsufficienttaxableprofitswillbeavailable.Atthebalancesheetdate,deferredtaxassetsanddeferredtaxliabilitiesareoffsetifallofthefollowingconditionsaremet:

-thetaxableentityhasalegallyenforceablerighttooffsetcurrenttaxliabilitiesandcurrenttaxassets;-theyrelatetoincometaxesleviedbythesametaxauthorityoneither:thesametaxableentity;ordifferenttaxableentitieswhichintendeithertosettlethecurrenttaxliabilitiesandcurrenttaxassetsonanetbasis,ortorealisetheassetsandsettletheliabilitiessimultaneously,ineachfutureperiodinwhichsignificantamountsofdeferredtaxliabilitiesordeferredtaxassetsareexpectedtobesettledorrecovered.

5.26OperatingleasesandfinanceleasesAleaseisclassifiedaseitherafinanceleaseoranoperatinglease.Afinanceleaseisaleasethattransferssubstantiallyalltherisksandrewardsincidentaltoownershipofaleasedassettothelessee,irrespectiveofwhetherthelegaltitletotheassetiseventuallytransferred.Anoperatingleaseisaleaseotherthanafinancelease.

5.26.1OperatingleaseassetsRentalpaymentsunderoperatingleasesarerecognisedaspartofthecostofanotherrelatedassetorasexpensesonastraight-linebasisovertheleaseterm.Contingentrentalpaymentsareexpensedasincurred.

5.26.2AssetsleasedoutunderoperatingleasesFixedassetsleasedoutunderoperatingleases,exceptforinvestmentproperties(seeNote5.12),aredepreciatedinaccordancewiththeGroup’sdepreciationpoliciesdescribedinNote5.13.2.ImpairmentlossesarerecognisedinaccordancewiththeaccountingpolicydescribedinNote5.20.Incomederivedfromoperatingleasesisrecognisedinprofitorlossusingthestraight-linemethodovertheleaseterm.Ifinitialdirectcostsincurredinrespectoftheassetsleasedoutarematerial,thecostsareinitiallycapitalisedandsubsequentlyamortisedinprofitorlossovertheleasetermonthesamebasisastheleaseincome.Otherwise,thecostsarechargedtoprofitorlossimmediately.

5.27Assetsheldforsale

TheGroupclassifiedanon-currentassetordisposalgroupasheldforsalewhenthecarryingamountofanon-currentassetordisposalgroupwillberecoveredthroughasaletransactionratherthanthroughcontinuinguse.Adisposalgroupreferstoagroupofassetstobedisposedof,bysaleorotherwise,togetherasawholeinasingletransactionandliabilitiesdirectlyassociatedwiththoseassetsthatwillbetransferredinthetransaction.

Anon-currentassetordisposalgroupisclassifiedasheldforsalewhenallthefollowingcriteriaaremet:

-Accordingtothecustomarypracticesofsellingsuchassetordisposalgroupinsimilartransactions,thenon-currentassetordisposalgroupmustbeavailableforimmediatesaleintheirpresentconditionsubjecttotermsthatareusualandcustomaryforsalesofsuchassetsordisposalgroups;-Itssaleishighlyprobable,thatis,theGrouphasmadearesolutiononasaleplanandhasobtainedafirmpurchasecommitment.Thesaleistobecompletedwithinoneyear.Non-currentassetsordisposalgroupsheldforsalearestatedatthelowerofcarryingamountandfairvaluelesscoststosell(exceptfinancialassets,deferredtaxassetsandinvestmentpropertiessubsequentmeasuredatfairvalueinitiallyandsubsequently.Anyexcessofthecarryingamountoverthefairvaluelesscoststosellisrecognisedasanimpairmentlossinprofitorloss.

5.28Profitdistributions

Dividendsorprofitdistributionsproposedintheprofitappropriationplan,whichwillbeapprovedafterthebalancesheetdate,arenotrecognisedasaliabilityatthebalancesheetdatebutaredisclosedinthenotesseparately.

5.29RelatedpartiesIfapartyhasthepowertocontrol,jointlycontrolorexercisesignificantinfluenceoveranotherparty,orviceversa,orwheretwoormorepartiesaresubjecttocommoncontrolorjointcontrolfromanotherparty,theyareconsideredtoberelatedparties.Relatedpartiesmaybeindividualsorenterprises.EnterpriseswithwhichtheCompanyisundercommoncontrolonlyfromtheStateandthathavenootherrelatedpartyrelationshipsarenotregardedasrelatedparties.Inadditiontotherelatedpartiesstatedabove,theCompanydeterminesrelatedpartiesbasedonthedisclosurerequirementsofAdministrativeProceduresontheInformationDisclosuresofListedCompaniesissuedbytheCSRC.

5.30Segmentreporting

TheGroupisprincipallyengagedintheproductionandsalesofwine,brandy,andsparklingwineinChina,France,Spain,ChileandAustralia.InaccordancewiththeGroup'sinternalorganisationstructure,managementrequirementsandinternalreportingsystem,theGroup'soperationisdividedintofourparts:China,Spain,France,ChileandAustralia.Themanagementperiodicallyevaluatessegmentresults,inordertoallocateresourcesandevaluateperformances.In2020,over89%ofrevenue,morethan98%ofprofitandover92%ofnon-currentassetsderivedfromChina/arelocatedinChina.ThereforetheGroupdoesnotneedtodiscloseadditionalsegmentreportinformation.

5.31SignificantaccountingestimatesandjudgementsThepreparationofthefinancialstatementsrequiresmanagementtomakeestimatesandassumptionsthataffecttheapplicationofaccountingpoliciesandthereportedamountsofassets,liabilities,incomeandexpenses.Actualresultsmaydifferfromtheseestimates.Estimatesaswellasunderlyingassumptionsanduncertaintiesinvolvedarereviewedonanongoingbasis.Revisionstoaccountingestimatesarerecognisedintheperiodinwhichtheestimateisrevisedandinanyfutureperiodsaffected.

5.31.1Significantaccountingestimates

Exceptforaccountingestimatesrelatingtodepreciationandamortisationofassetssuchasinvestmentproperties,fixedassets,bearerbiologicalassetsandintangibleassets(seeNotes5.12,13,16and17)andprovisionforimpairmentofvarioustypesofassets(seeNotes7.2,5,6,10,11,12,13,14andNotes17.1and3).Othersignificantaccountingestimatesareasfollows:

(i)Note7.16–Recognitionofdeferredtaxasset;(ii)Note11.–Fairvaluemeasurementsoffinancialinstruments.

5.32Changesinsignificantaccountingpoliciesandaccountingestimates

5.32.1Changesinsignificantaccountingpolicies

TheGroupimplementedtheAccountingStandardsforBusinessEnterprisesNo.14-RevenuesrevisedbytheMinistryofFinancein2017onJanuary1,2020.

AccountingStandardsforBusinessEnterprisesNo.14-Revenues(Revision)("NewRevenueStandards")TheNewRevenueStandardsreplacetheoriginalrevenueones.Undertheoriginalrevenuestandards,theGroupusedthetransferofriskpremiumasthecriterionfordeterminingthetimingofrevenuerecognition.TheGroup'srevenuefromsalesofgoodsisrecognizedwhenthefollowingconditionsaremetatthesametime:themainrisksandrewardsofpropertyinthegoodshavebeentransferredtothebuyer,theamountofrevenueandrelatedcostscanbereliablymeasured,andrelatedeconomicbenefitsarelikelytoflowintotheGroup.TheGroupneitherretainsthecontinuingmanagementrightsthatareusuallyassociatedwithownership,nordoesitexerciseeffectivecontroloverthesoldgoods.UndertheNewRevenueStandards,theGroupusedthetransferofcontrolrightasthecriterionfordeterminingthetimingofrevenuerecognition:

-TheGrouprecognizestherevenueuponfulfillmentofitsperformanceobligationsinthecontract,thatis,theclientobtainscontrolrightovertherelevantgoodsorservices.IftheGroupmeetsacertaincondition,thefulfillmentofitsperformanceobligationsinacertainperiodwillbedeemed,orthefulfillmentofitsperformanceobligationsatacertaintimepointwillbedeemed.Iftherearetwoormoreperformanceobligationsunderthecontact,whichshallbefulfilled,theGroupwillapportionthetransactionpricetovariousindividualperformanceobligationsinaccordancewiththerelativeproportionofseparatesellingpricesofvariousgoodsorservicesundertheseperformanceobligationsonthecommencementdateofthecontract,andmeasureandrecognizetherevenueinaccordancewiththetransactionpricesapportionedtovariousindividualperformanceobligations.ThetransactionpricereferstotheamountofconsiderationthattheGroupexpectstobeentitledtoreceiveduetothetransferofgoodsorservicestotheclient,excludingpaymentsreceivedonbehalfofthirdparties.ThetransactionpricerecognizedbytheGroupdoesnotexceedtheamountatwhichtheaccumulatedrecognizedrevenuewillmostlikelynotundergoasignificantreversalwhentherelevantuncertaintyiseliminated.Itisexpectedthatthemoneyreturnedtotheclientwillberegardedasareturnliabilityandnotincludedinthetransactionprice.Intheeventthatthereisasignificantfinancingpartinthecontract,theGroupdeterminesthetransactionpricebasedontheamountpayableincashwhentheclientobtainscontrolrightovertherelevantgoodsorservices.Thedifferencebetweenthetransactionpriceandthecontractconsiderationshallbeamortizedbytheeffectiveinterestmethodduringthecontractperiod.Fromthedayoftheenforcementofthecontract,theGroupexpectsthattheintervalbetweentheclient'sacquisitionofcontrolrightoverthegoodsorservicesandtheclient'spaymentofthepricewillnotexceedoneyear,regardlessofthesignificantfinancingpartinthecontract.

-TheGroupadjustedrelevantaccountingpoliciesinaccordancewiththespecificprovisionsoftheNewRevenueStandardsonspecificmattersortransactions,suchascontractcosts,saleswithsalesreturnclauses,andsalesdivisionswithqualityassuranceclauses.-InaccordancewiththeNewRevenueStandards,theGroup,basedontherelationshipbetweenperformanceobligationsandclientpayments,presentscontractassetsorliabilitiesinthebalancesheet.Atthesametime,theGroupprovidesmoredisclosuresonrevenue-relatedinformationdisclosurerequirementsinaccordancewiththeNewRevenueStandards,suchasrelevantaccountingpolicies,judgmentswithsignificantinfluence(themeasurementofvariableconsideration,themethodofallocatingthetransactionpricetoeachindividualperformanceobligation,theassumptionusedinestimatingthestand-alonesellingpriceofeachindividualperformanceobligation,etc.),informationrelatedtoclientcontracts(revenuerecognitionforthecurrentperiod,contractbalance,performanceobligations,etc.),andinformationonassetsrelatedtocontractcosts.TheGroup,basedonthecumulativeimpactofthefirstimplementationoftheNewRevenueStandards,adjustedtheretainedearningsatthebeginningof2020andtheamountofotherrelateditemsinthefinancialstatements,exceptforcomparativefinancialstatementdata.

5.32.2ChangesinsignificantaccountingestimatesNil

5.32.3Particularsoffirstimplementationofnewincomestandardstoadjustthefirstimplementationofrelateditemsinthefinancialstatementsatthebeginningoftheyear

ConsolidatedBalanceSheet

Unit:Yuan

Item

ItemDecember31,2019January1,2020Adjustments
Currentassets:
Monetaryfund1,565,783,9801,565,783,980
Settlementreserves
Lendingfunds
Tradablefinancialassets
Derivativefinancialassets
Billsreceivable
Accountsreceivable266,218,153266,218,153
Receivablesfinancing316,470,229316,470,229
Advancepayment67,707,53767,707,537
Premiumreceivable

Item

ItemDecember31,2019January1,2020Adjustments
Reinsuranceaccountsreceivable
Receivablereservesforreinsurancecontract
Otherreceivables24,246,81224,246,812
Including:Interestreceivable148,927148,927
Dividendsreceivable
Redemptorymonetarycapitalforsale
Inventories2,872,410,4072,872,410,407
Contractassets
Assetsheldforsale
Non-currentassetsduewithinoneyear
Othercurrentassets267,424,938267,424,938
Totalcurrentassets5,380,262,0565,380,262,056
Non-currentassets:
Offeringloansandimprest
Debtinvestments
Otherdebtinvestments
Long-termreceivables
Long-termequityinvestments43,981,13043,981,130
Otherinvestmentsinequityinstruments
Othernon-currentfinancialassets
Investmentrealestate29,714,58629,714,586
Fixedassets5,894,068,8985,894,068,898
Constructioninprogress567,478,833567,478,833
Productivebiologicalassets202,425,286202,425,286
Oil-and-gasassets
Right-of-useassets
Intangibleassets651,946,355651,946,355
Developmentexpenditure
Goodwill141,859,193141,859,193
Long-termprepaidexpenses277,595,408277,595,408
Deferredincometaxassets264,926,503264,926,503
Othernon-currentassets193,674,320193,674,320
Totalnon-currentassets8,267,670,5128,267,670,512
Totalassets13,647,932,56813,647,932,568
Currentliabilities:
Short-termloans754,313,744754,313,744
BorrowingsfromtheCentralBank
Loansfromotherbanksandotherfinancialinstitutions
Tradablefinancialliabilities
Derivativefinancialliabilities
Billspayable
Accountspayable570,252,612570,252,612
Advancesfromcustomers120,609,499-120,609,499
Contractliabilities106,734,070106,734,070
Financialassetssoldforrepurchase

Item

ItemDecember31,2019January1,2020Adjustments
Depositsfromcustomersandinterbank
Receivingsfromvicariouslytradedsecurities
Receivingsfromvicariouslysoldsecurities
Employeeremunerationspayable234,459,116234,459,116
Taxesandduespayable375,169,971375,169,971
Otherpayables450,532,485450,532,485
Including:Interestpayable758,047758,047
Dividendspayable1,366,5591,366,559
Handlingchargesandcommissionspayable
Dividendpayableforreinsurance
Liabilitiesheldforsale
Non-currentliabilitiesduewithinoneyear150,826,221150,826,221
Othercurrentliabilities13,875,42913,875,429
Totalcurrentliabilities2,656,163,6482,656,163,648
Non-currentliabilities:
Reservesforinsurancecontracts
Long-termborrowings128,892,501128,892,501
Bondspayable
Including:Preferredstock
Perpetualbonds
Leaseliabilities
Long-termaccountspayable191,000,000191,000,000
Long-termemployeeremunerationspayable
Estimatedliabilities
Deferredincome70,701,28870,701,288
Deferredincometaxliabilities14,691,42414,691,424
Othernon-currentliabilities7,645,7777,645,777
Totalnon-currentliabilities412,930,990412,930,990
Totalliabilities3,069,094,6383,069,094,638
Owner’sequity:
Capitalstock685,464,000685,464,000
Otherequityinstruments
Including:Preferredstock
Perpetualbonds
Capitalsurplus565,050,422565,050,422
Minus:Treasurystock
Othercomprehensiveincome-4,235,583-4,235,583
Specialreserves
Surplusreserves342,732,000342,732,000
Generalriskpreparation
Undistributedprofit8,719,899,3598,719,899,359
Totalowner’sequitiesattributabletotheparentcompany10,308,910,19810,308,910,198
Minorityequity269,927,732269,927,732
Totalowner’sequities10,578,837,93010,578,837,930
Totalliabilitiesandowner’sequities13,647,932,56813,647,932,568

BalanceSheetoftheParentCompany

Unit:Yuan

Item

ItemDecember31,2019January1,2020Adjustments
Currentassets:
Monetaryfund710,505,269710,505,269
Tradablefinancialassets
Derivativefinancialassets
Billsreceivable
Accountsreceivable1,988,3261,988,326
Receivablesfinancing41,679,63541,679,635
Advancepayment776,539776,539
Otherreceivables586,424,958586,424,958
Including:Interestreceivable90,35590,355
Dividendsreceivable200,000,000200,000,000
Inventories434,007,808434,007,808
Contractassets
Assetsheldforsale
Non-currentassetsduewithinoneyear
Othercurrentassets39,130,46639,130,466
Totalcurrentassets1,814,513,0011,814,513,001
Non-currentassets:
Debtinvestments
Otherdebtinvestments
Long-termreceivables
Long-termequityinvestments7,432,422,6217,432,422,621
Otherinvestmentsinequityinstruments
Othernon-currentfinancialassets
Investmentrealestate29,714,58629,714,586
Fixedassets261,137,072261,137,072
Constructioninprogress
Productivebiologicalassets121,414,096121,414,096
Oilandgasassets
Right-of-useassets
Intangibleassets64,864,91364,864,913
Developmentexpenditure
Goodwill
Long-termprepaidexpenses
Deferredincometaxassets16,255,87016,255,870
Othernon-currentassets1,427,700,0001,427,700,000
Totalnon-currentassets9,353,509,1589,353,509,158
Totalassets11,168,022,15911,168,022,159
Currentliabilities:
Short-termloans150,000,000150,000,000
Tradablefinancialliabilities
Derivativefinancialliabilities
Billspayable

Item

ItemDecember31,2019January1,2020Adjustments
Accountspayable63,655,24063,655,240
Advancesfromcustomers
Contractliabilities
Employeeremunerations70,445,84770,445,847
Taxesandduespayable6,052,4566,052,456
Otherpayables660,149,563660,149,563
Including:Interestpayable181,250181,250
Dividendspayable
Liabilitiesheldforsale
Non-currentliabilitiesduewithinoneyear
Othercurrentliabilities
Totalcurrentliabilities950,303,106950,303,106
Non-currentliabilities:
Long-termborrowings
Bondspayable
Including:Preferredstock
Perpetualbonds
Leaseliabilities
Long-termaccountspayable
Long-termemployeeremunerationpayable
Estimatedliabilities
Deferredincome9,176,3159,176,315
Deferredincometaxliabilities
Othernon-currentliabilities3,146,7073,146,707
Totalnon-currentliabilities12,323,02212,323,022
Totalliabilities962,626,128962,626,128
Owner’sequity:
Capitalstock685,464,000685,464,000
Otherequityinstruments
Including:Preferredstock
Perpetualbonds
Capitalsurplus557,222,454557,222,454
Minus:Treasurystock
Othercomprehensiveincome
Specialreserves
Surplusreserves342,732,000342,732,000
Undistributedprofit8,619,977,5778,619,977,577
Totalowner’sequities10,205,396,03110,205,396,031
Totalliabilitiesandowner’sequities11,168,022,15911,168,022,159

6.Taxes

6.1Themaintaxesandtaxratesareasfollows:

6.2Taxincentives

NingxiaChangyuGrapeGrowingCo.,Ltd.("NingxiaGrowing"),asubsidiaryoftheGroup,whoseprincipalactivityisgrapegrowing,isincorporatedinNingxiaHuizuAutonomousRegion.Accordingtoclause27ofPRCCorporateIncomeTaxandclause86ofPRCCorporateIncomeTaxMeasuresforImplementation,NingxiaGrowingenjoysanexemptionofcorporateincometax.YantaiChangyuGrapeGrowingCo.,Ltd.("GrapeGrowing"),abranchoftheCompany,whoseprincipalactivityisgrapegrowing,isincorporatedinZhifuDistrict,YantaiCity,ShandongProvince.Accordingtoclause27ofPRCCorporateIncomeTaxandclause86ofPRCCorporateIncomeTaxMeasuresforImplementation,GrapeGrowingenjoysanexemptionofcorporateincometax.BeijingChangyuAFIPAgricultureDevelopmentCo.,Ltd("AgricultureDevelopment"),asubsidiaryoftheGroup,whoseprincipalactivityisgrapegrowing,isincorporatedinMiyunCounty,Beijing.Accordingtoclause27oftheCorporateIncomeTaxLawofthePeople’sRepublicofChinaandclause86oftheImplementationRulesofEnterpriseIncomeTaxLawofthePeople’sRepublicofChina,AgricultureDevelopmentenjoysanexemptionofcorporateincometax.XinjiangTianzhuCo.,Ltd("XinjiangTianzhu"),asubsidiaryoftheCompany,isanenterpriseofwineproductionandsalesincorporatedinShihezicity,XinjiangUygurAutonomousRegion.InaccordancewiththeNoticeonTaxPolicyIssuesconcerningFurtherImplementationoftheWesternChinaDevelopmentStrategy(CaiShui[2011]No.58),XinjiangTianzhuisqualifiedtoenjoypreferentialtaxationpolicies,whichmeansitcanpaycorporateincometaxatapreferentialrateof15%fortheperiodfrom2015to2020.

Taxcategory

TaxcategoryTaxationbasisTaxrates
ValueaddedtaxLeviedonthebalancebetweentheoutputtaxcalculatedbasedontaxableincomeandtheinputtaxallowedtobedeductedincurrentperiod13%,9%,6%(China),20%(France),21%(Spain),19%(Chile),10%(Australia)
ConsumptiontaxLeviedontaxableincome10%oftheprice,20%ofthepriceand1,000Yuaneachton(China)
CitydevelopmenttaxLeviedoncirculationtaxactuallypaid7%(China)
CorporateincometaxLeviedontaxableincome25%(China),28%(France),28%(Spain),27%(Chile),30%(Australia)

XinjiangBabaoBaronChateauCo.,Ltd.("ShiheziChateau"),asubsidiaryoftheCompany,isanenterpriseofwineproductionandsalesincorporatedinShihezicity,XinjiangUygurAutonomousRegion.InaccordancewiththeNoticeonTaxPolicyIssuesconcerningFurtherImplementationoftheWesternChinaDevelopmentStrategy(CaiShui[2011]No.58),ShiheziChateauisqualifiedtoenjoypreferentialtaxationpolicies,whichmeansitcanpaycorporateincometaxatapreferentialrateof15%fortheperiodfrom2015to2020.

7.Notestoitemsintheconsolidatedfinancialstatement

7.1Monetarycapital

Unit:Yuan

Item

ItemEndingbalanceBeginningbalance
Cashonhand38,91059,975
Bankdeposit1,384,635,8851,474,489,177
Othermonetarycapital91,532,26091,234,828
Total1,476,207,0551,565,783,980
Including:Totaloverseasdeposits49,084,61942,752,630

AsatJune30,2020,therestrictedbankdepositdetailsarelistedasfollows:

Unit:Yuan

ItemEndingbalanceBeginningbalance
Housingfundoftheunit2,684,4062,647,877
Total2,684,4062,647,877

AsatJune30,2020,thedetailsofothermonetaryfundsarelistedasfollows:

Unit:Yuan

ItemEndingbalanceBeginningbalance
PledgeoffixeddepositsbyYantaiChangyuWineResearch,DevelopmentandManufactureCo.,Ltd.(“R&DCompany”)46,100,00046,100,000
Guaranteeddepositspaidfortheletterofcredit44,540,85044,540,850
AccountbalanceofAlipay685,691583,978
Guarantymoneyfortheunitcard195,719-
GuarantymoneyforICBCplatform10,00010,000
Total91,532,26091,234,828

AsatJune30,2020,thebankdepositsoftheGroupincludingshort-termfixeddepositsrangingfrom3monthsto12monthsamountedtoRMB81,200,000Yuan(December31,2019:RMB106,128,600),withtheinterestratesrangingfrom1.40%to2.75%.

7.2Billsreceivable

7.2.1Classificationofbillsreceivable

Unit:Yuan

Type

TypeEndingbalanceBeginningbalance
BookbalanceProvisionforbaddebtsBookvalueBookbalanceProvisionforbaddebtsBookvalue
AmountProportionAmountAccruedproportionAmountProportionAmountAccruedproportion
Accountsreceivableforwhichprovisionforbaddebtsisaccruedonasingleitembasis
Accountsreceivableforwhichprovisionforbaddebtsisaccruedonacombinedbasis184,942,173100%17,203,5409.30%167,738,633283,522,528100%17,304,3756.10%266,218,153
Total184,942,173100%17,203,5409.30%167,738,633283,522,528100%17,304,3756.10%266,218,153

Provisionforbaddebtsaccruedonacombinedbasis:

Unit:Yuan

NameEndingbalance
BookbalanceProvisionforbaddebtsAccruedproportion
Amountsduefromrelatedparties2,005,18267,3793.40%
Amountsduefromothercustomers182,936,99117,136,1619.40%
Total184,942,17317,203,5409.30%

Disclosedbyage:

Unit:Yuan

AgeEndingbalance
Within1year(including1year)178,061,481
1-2years5,228,218
2-3years1,652,474
Over3years
Total184,942,173

AsatJune30,2020,theaccountsreceivablewithownershiprestrictionswereRMB31,557,404Yuan(December31,2019:54,663,422Yuan).PleaserefertoNote7.18fordetails.

7.2.2Provisionforbaddebtsaccrued,withdrawnortransferredbackinthisperiod

Provisionforbaddebtsaccruedinthisperiod:

Unit:Yuan

Type

TypeBeginningbalanceoftheyearChangesinthisperiodEndingbalance
AccruedWithdrawnortransferredbackCancelled
Accountsreceivableforwhichprovisionforbaddebtsisaccrued17,304,375100,83517,203,540
Total17,304,375100,83517,203,540

7.2.3Accountsreceivableactuallycancelledafterverificationinthisperiod

Nil

7.2.4Accountsreceivablecollectedbytheborrowersoftop5unitsrankedbytheendingbalance

Unit:Yuan

UnitRelationshipwiththeCompanyAmountPeriodPercentageintotalaccountsreceivableEndingbalanceofprovisionforbadanddoubtfuldebts
LianhuaSupermarketHoldingsCo.,Ltd.Thirdparty12,068,877Within1year6.50%1,821,381
NonggongshangSupermarket(Group)Co.,Ltd.Thirdparty10,822,716Within1year5.90%2,588,499
CIA.ZAFFARICOMERCIOEThirdparty4,962,855Within1year2.70%159,007
TRI-VINIMPORTS,INC.Thirdparty4,729,522Within1year2.60%47,175
KingslandWinesandSpiritsThirdparty4,529,090Within1year2.40%145,109
Total--37,113,060--20.1%4,761,171

7.2.5Accountsreceivableterminatingrecognitionduetotransferoffinancialassets

Nil

7.2.6Accountsreceivabletransferredandincludedinassetsandliabilities

Nil

7.3Receivablesfinancing

Unit:Yuan

ItemEndingbalanceBeginningbalance
Billsreceivable222,918,741316,470,229
Total222,918,741316,470,229

7.3.1ThepledgedbillsreceivableoftheGroupattheendoftheyear

Nil

7.3.2Outstandingendorsedbillsthathavenotmaturedattheendoftheyear

Item

ItemAmountderecognisedatyearend
Bankacceptancebills90,385,572
Total90,385,572

AsatJune30,2020,billsendorsedbytheGrouptootherpartieswhicharenotyetdueattheendoftheperiodisRMB90,385,572Yuan(December31,2019:RMB265,759,455Yuan).Thenotesareusedforpaymenttosuppliersandconstructions.TheGroupbelievesthatduetogoodreputationofbank,theriskofnotesnotacceptingbybankonmaturityisverylow,thereforederecognisethenotereceivablesendorsed.Ifthebankisunabletopaythenotesonmaturity,accordingtotherelevantlawsandregulationsofChina,theGroupwouldundertakelimitedliabilityforthenotes.

7.4Advancepayment

7.4.1Advancepaymentlistedbyage

Unit:Yuan

AgeEndingbalanceBeginningsum
AmountProportionAmountProportion
Within1year10,200,527100%67,441,71399.6%
1-2years265,8240.4%
2-3years
Morethan3years
Total10,200,527100%--67,707,537--

7.4.2Advancepaymentcollectedbytheprepaidpartiesoftop5unitsrankedbytheendingbalance

Unit:Yuan

CategoryofclientRelationshipwiththeGroupAmountAgeReasonforunsettlementPercentageinthetotaladvancepayment%
ChateauDeMirefleursRelatedparty6,429,542Within1yearPrepayments63.0%
ChateauDeLiversanRelatedparty1,632,941Within1Prepayments16.0%

year

year
StateGridShandongElectronicPowerYantaiCompanyThirdparty1,229,571Within1yearPrepaidelectricityfees12.1%
BeijingShanshuiDecorationCompanyThirdparty97,000Within1yearPrepaidmaintenancecost1.0%
SinopecSalesCo.,Ltd.ShandongYantaiPetroleumBranchThirdparty90,000Within1yearPrepaidfuelcost0.9%
Total--9,479,054--93.0%

7.5Otherreceivables

Unit:Yuan

ItemEndingbalanceBeginningbalance
Interestreceivable698,347148,927
Dividendsreceivable
Otherreceivables24,896,45424,097,885
Total25,594,80124,246,812

7.5.1Interestreceivable

Unit:Yuan

ItemEndingbalanceBeginningbalance
Fixeddeposit698,347148,927
Entrustedloan
Bondinvestment
Total698,347148,927

7.5.2Otherreceivables

7.5.2.1Otherreceivablesclassifiedbynature

Unit:Yuan

NatureEndingbookbalanceBeginningbookbalance
Depositandguarantymoneyreceivable8,546,2709,812,027
Imprestreceivable832,2271,741,147
Consumptiontaxandadded-valuetaxexportrebate7,878,0648,937,164
Other7,639,8933,607,547
Total24,896,45424,097,885

7.5.2.2Disclosedbyage

Unit:Yuan

AgeEndingbalance

Age

AgeEndingbalance
Within1year(including1year)16,742,154
1-2years383,863
2-3years721,352
Morethan3years7,049,085
Total24,896,454

7.5.2.3Provisionforbaddebtsaccrued,withdrawnortransferredbackinthisperiod

TheprovisionforbaddebtsaccruedinthisperiodwasRMB0Yuan;andthatwithdrawnortransferredbackinthisperiodwasRMB0Yuan.

7.5.2.4Otherreceivablesactuallycancelledafterverificationinthisperiod

Nil

7.5.2.5Otherreceivablescollectedbytheborrowersoftop5unitsrankedbytheendingbalance

Unit:Yuan

UnitNatureEndingbalanceAgePercentageintotalendingbalanceofotheraccountsreceivableEndingbalanceofprovisionforbaddebts
SerciciodeImpuestosInternosValue-addedtaxrebate6,668,550Within1years26.8%
YEDAFinanceBureauGuarantymoney5,262,324Over3years21.1%
YEDAConstructionIndustryAssociationConstructionguarantymoney1,143,500Over3years4.6%
YantaiGodHorsePackingCo.,Ltd.Leasepaymentreceivable1,626,880Within1year6.5%
ChangyuGroupLeasepaymentpayable3,775,362Within1year15.2%
Total--18,476,616--74.2%

7.5.2.6Accountsreceivableinvolvinggovernmentsubsidies

Nil

7.5.2.7OtherreceivablesthatareterminatedforrecognitionduetotransferoffinancialassetsNil

7.5.2.8Otherreceivablestransferredandthenincludedinassetsandliabilities

Nil

7.6Inventories

7.6.1Inventoryclassification

Unit:Yuan

Item

ItemEndingbalanceBeginningbalance
BookbalanceDepreciationprovisionBookvalueBookbalanceDepreciationprovisionBookvalue
Rawmaterials53,065,31653,065,31671,681,41871,681,418
Goodsinprocess2,282,289,1662,282,289,1662,102,781,5362,102,781,536
Commoditystocks609,349,0918,570,313600,778,778718,127,09020,179,637697,947,453
Total2,944,703,5738,570,3132,936,133,2602,892,590,04420,179,6372,872,410,407

7.6.2Inventorydepreciationprovision

Unit:Yuan

ItemBeginningbalanceIncreaseinthisperiodDecreaseinthisperiodEndingbalance
AccrualOtherTransferbackorwrite-offOther
Rawmaterials
Goodsinprocess
Commoditystocks20,179,63711,609,3248,570,313
Total20,179,63711,609,3248,570,313

7.7Othercurrentassets

Unit:Yuan

ItemEndingbalanceBeginningbalance
Prepaidcorporateincometax26,971,53316,854,091
Deductibleinputtax234,012,096248,975,183
Renttobeamortized1,934,0921,595,664
Total262,917,721267,424,938

7.8Long-termequityinvestments

Unit:Yuan

InvesteeBeginningbalance(bookvalue)MovementsduringtheperiodEndingbalance(bookvalue)Endingbalanceofprovisionforimpairment
IncreaseincapitalDecreaseincapitaLossesfrominvestmentsunderequity-methodOtheromprehensiveincomeadjustmentOtherequitychangingDeclarecashdividendorprofitAccrualprovisionforimpairmentOthers
1.Jointventures
SASL&MHoldings(“L&MHoldings”)43,981,130-1,170,68542,810,445
Subtotal43,981,130-1,170,68542,810,445

OnFebruary22,2019,FrancsChampsParticipationsSAS(“FrancsChamps”),asubsidiaryofthe

Group,signedtheCooperationAgreementwithSCGarriduGaitoestablishL&MHoldings,ajointventure.FrancsChampscontributed100%oftheequityofitssubsidiary,SocieteCivileArgricoleDuChateauDeMirefleurs(“Mirefleurs”),withafairvalueofRMB45,102,058Yuan,accountingfor55%ofthesharesofL&MHoldings.AspertheAgreementandtheArticlesofAssociation,L&MHoldingsisjointlycontrolledbyshareholdersofbothparties.

7.9Investmentrealestate

7.9.1Investmentrealestatebycostmeasurementmethod

Unit:Yuan

Item

ItemHousesandbuildingsLanduserightConstructioninprogressTotal
ⅠOriginalbookvalue
1.Beginningbalance70,954,04570,954,045
2.Increaseinthisperiod
2.1Outsourcing
2.2Transferinfrominventories\fixedassets\constructioninprogress
2.3Businessmergerincrease
3.Decreaseinthisperiod
3.1Disposal
3.2Othertransferout
4.Endingbalance70,954,04570,954,045
ⅡAccumulateddepreciation&accumulatedamortization
1.Beginningbalance41,239,45941,239,459
2.Increaseinthisperiod1,369,8991,369,899
2.1Accrualoramortization1,369,8991,369,899
3.Decreaseinthisperiod
3.1Disposal
3.2Othertransferout
4.Endingbalance42,609,35842,609,358
ⅢImpairmentprovision
1.Beginningbalance
2.Increaseinthisperiod
2.1Accrual
3.Decreaseinthisperiod
3.1Disposal
3.2Othertransferout
4.Endingbalance
ⅣBookvalue
1.Endingbookvalue28,344,68728,344,687
2.Beginningbookvalue29,714,58629,714,586

7.10Fixedassets

Unit:Yuan

Item

ItemEndingbalanceBeginningbalance
Fixedassets5,818,499,8455,894,068,898
Disposaloffixedassets
Total5,818,499,8455,894,068,898

7.10.1Particularsoffixedassets

Unit:Yuan

ItemHousesandbuildingsMachineryequipmentConveyanceTotal
ⅠOriginalbookvalue:
1.Beginningbalance5,093,628,7962,730,306,04126,670,1567,850,604,993
2.Increaseinthisperiod26,435,12132,745,9941,109,02160,290,136
2.1Acquisition16,217,77930,825,6721,109,02148,152,472
2.2Transferinfromconstructioninprogress10,217,3421,920,32212,137,664
2.3Businessmergerincrease
3.Decreaseinthisperiod1,037,3371,037,337
3.1Disposalorretirement1,037,3371,037,337
4.Endingbalance5,120,063,9172,762,014,69827,779,1777,909,857,792
ⅡAccumulateddepreciation
1.Beginningbalance755,115,3441,163,797,94320,144,7811,939,058,068
2.Increaseinthisperiod55,228,29278,723,9261,136,974135,089,192
2.1Accrual55,228,29278,723,9261,136,974135,089,192
3.Decreaseinthisperiod267,340267,340
3.1Disposalorretirement267,340267,340
4.Endingbalance810,343,6361,242,254,52921,281,7552,073,879,920
ⅢImpairmentprovision
1.Beginningbalance17,478,02717,478,027
2.Increaseinthisperiod
2.1Accrual
3.Decreaseinthisperiod
3.1Disposalorretirement
4.Endingbalance17,478,02717,478,027
ⅣBookvalue
1.Endingbookvalue4,309,720,2811,502,282,1426,497,4225,818,499,845
2.Beginningbookvalue4,338,513,4521,549,030,0716,525,3755,894,068,898

AsatJune30,2020,thenetvalueofthefixedassetswithownershiprestrictionswasRMB338,237,400Yuan(December31,2019:RMB344,670,852Yuan).PleaserefertoNote7.51fordetails.

7.10.2Particularsoftemporarilyidlefixedassets

Unit:Yuan

Item

ItemOriginalbookvalueAccumulateddepreciationDepreciationreservesBookvalueRemarks
Buildings47,821,02615,511,66032,309,366
Machineryequipment73,592,53154,095,03017,478,0272,019,474
Otherequipment3,344,5183,176,756167,762
Total124,758,07572,783,44617,478,02734,496,602

7.10.3Particularsoffixedassetsunderfinanceleases

Nil

7.10.4Fixedassetsunderoperatinglease

Unit:Yuan

ItemEndingbookvalue
Machineryequipment64,944

7.10.5Particularsoffixedassetswithoutpropertycertificates

Unit:Yuan

ItemBookvalueReasonfornotreceivingthepropertycertificate
IndustrialProductionCenteroftheR&DCompany1,744,312,701Undertransaction
DormitoryBuilding,MainBuildingandReceptionBuildingofChang’anChateau283,676,202Undertransaction
EuropeanTown,MainBuildingandServiceBuildingofBeijingChateau178,930,935Undertransaction
MainBuildingofYantaiChateauChangyuTinlot78,378,833Undertransaction
FermentationWorkshopandWineStorageWorkshopofXinjiangTianzhu16,802,302Undertransaction
OfficeBuildingandPackagingWorkshopofIcewineValley8,736,650Undertransaction
Wine-makingWorkshopofChangyu(Jingyang)3,707,219Undertransaction
OfficeBuilding,LaboratoryBuildingandWorkshopofFermentationCenter3,400,025Undertransaction
FinishedGoodsWarehouseandWorkshopofKylinPackaging2,260,833Undertransaction
OfficeofSalesCompany2,232,626Undertransaction
Total2,322,438,325Undertransaction

7.11Constructioninprogress

Unit:Yuan

ItemEndingbalanceBeginningbalance

Constructioninprogress

Constructioninprogress647,036,593567,478,833
Engineeringmaterials
Total647,036,593567,478,833

7.11.1Particularsofconstructioninprogress

Unit:Yuan

ItemEndingbalanceBeginningbalance
BookbalanceImpairmentprovisionBookvalueBookbalanceImpairmentprovisionBookvalue
Research,Development&ManufactureCenter(“ChangyuWineCityComplex”)571,245,868571,245,868485,017,326485,017,326
ConstructionProjectofNingxiaChateau46,448,56146,448,56146,448,56146,448,561
ConstructionProjectofChang’anChateau5,002,3675,002,3674,052,8394,052,839
ConstructionProjectofShiheziChateau1,326,3901,326,390877,348877,348
ConstructionProjectofSalesCompany7,925,0627,925,0626,313,9626,313,962
ConstructionProjectsofOtherCompanies15,088,34515,088,34524,768,79724,768,797
Total647,036,593647,036,593567,478,833567,478,833

7.11.2Changesofmajorconstructioninprogressinthisperiod

Item

ItemBudgetBeginningbalanceIncreaseinthisperiodTransferredtofixedassetsinthisperiodOtherdecreaseinthisperiodEndingbalanceProportionofaccumulativeprojectinputinbudgetAccumulativecapitalizedamountofinterestIncluding:capitalizedamountofinterestinthisperiodCapitalizationratioofinterestinthisperiodCapitalsource
ChangyuWineCityComplex4,505,780,000485,017,32692,778,0836,549,541571,245,86879.70%15,824,401411,2991.20%and4.3%Loansformfinancialinstitutionsandself-raisedfunds
ConstructionProjectofNingxiaChateau414,150,00046,448,56146,448,561102.20%Self-raisedfunds
ConstructionProjectofChang’anChateau620,740,0004,052,8396,522,2665,572,7385,002,367111.50%Self-raisedfunds
ConstructionProjectofShiheziChateau780,000,000877,348449,0421,326,39096.50%Self-raisedfunds
ConstructionProjectofSalesCompany161,350,0006,313,9621,611,1007,925,062101.30%Self-raisedfunds
Total6,482,020,000542,710,036101,360,49112,122,279631,948,248--15,824,401411,299--

AsatJune30,2020,therewasnoindicationforimpairmentofconstructioninprogressoftheGroup,sonoprovisionforimpairmentwasmade.

7.12Productivebiologicalassets

7.12.1Productivebiologicalassetsbycostmeasurementmethod

Unit:Yuan

Item

ItemPlantationTotal
ImmatureMature
ⅠOriginalbookvalue
1.Beginningbalance12,828,822240,517,972253,346,794
2.Increaseinthisperiod-5,577,6366,173,226595,590
2.1Outsourcing
2.2Selfcultivation595,590595,590
Theimmatureturntothemature-6,173,2266,173,226
3.Decreaseinthisperiod
3.1Disposal
3.2Other
4.Endingbalance7,251,186246,691,198253,942,384
ⅡAccumulateddepreciation
1.Beginningbalance50,921,50850,921,508
2.Increaseinthisperiod6,782,2856,782,285
2.1Accrual6,782,2856,782,285
3.Decreaseinthisperiod
3.1Disposal
3.2Other
4.Endingbalance57,703,79357,703,793
ⅢImpairmentprovision
1.Beginningbalance
2.Increaseinthisperiod
2.1Accrual
3.Decreaseinthisperiod
3.1Disposal
3.2Other
4.Endingbalance
ⅣBookvalue
1.Endingbookvalue7,251,186188,987,405196,238,591
2.Beginningbookvalue12,828,822189,596,464202,425,286

AsatJune30,2020,noownershipofthebiologicalassetswasrestricted.AsatJune30,2020,therewasnoindicationforimpairmentofbiologicalassetsoftheGroup,sonoprovisionwasmade.

7.13Intangibleassets

7.13.1Particularsofintangibleassets

Unit:Yuan

Item

ItemLanduserightSoftwareuserightTrademarkTotal
ⅠOriginalbookvalue
1.Beginningbalance531,755,70288,258,481170,773,266790,787,449
2.Increaseinthisperiod337,51282,249419,761
2.1Acquisition337,51282,249419,761
2.2InternalR&D
2.3Businessmergerincrease
3.Decreaseinthisperiod
3.1Disposal
4.Endingbalance531,755,70288,595,993170,855,515791,207,210
ⅡAccumulatedamortization
1.Beginningbalance89,333,50635,165,79014,341,798138,841,094
2.Increaseinthisperiod5,353,4875,716,72475,32511,145,536
2.1Accrual5,353,4875,716,72475,32511,145,536
3.Decreaseinthisperiod
3.1Disposal
4.Endingbalance94,686,99340,882,51414,417,123149,986,630
ⅢImpairmentprovision
1.Beginningbalance
2.Increaseinthisperiod
2.1Accrual
3.Decreaseinthisperiod
3.1Disposal
4.Endingbalance
ⅣBookvalue
1.Endingbookvalue437,068,70947,713,479156,438,392641,220,580
2.Beginningbookvalue442,422,19653,092,691156,431,468651,946,355

AsatJune30,2020,thenetvalueoftheintangibleassetswithownershiprestrictionswasRMB209,707,945Yuan(December31,2019:RMB212,495,435).PleaserefertoNote7.51fordetails.

7.13.2Particularsoflanduserightofthatnotreceivingthepropertycertificate

Nil

7.14Goodwill

7.14.1Originalbookvalueofgoodwill

Unit:Yuan

Nameoftheinvestedunitormatterforming

goodwill

NameoftheinvestedunitormatterforminggoodwillBeginningbalanceIncreaseinthisperiodDecreaseinthisperiodEndingbalance
FormedbybusinessmergerOtherDisposalOther
EtablissementsRoulletFransac(“RoulletFransac”)13,112,52513,112,525
DicotPartners,S.L(“AtrioGroup”)92,391,90192,391,901
IndomitaWineCompanyChile,SpA6,870,1156,870,115
KilikanoonEstate,Australia37,063,13037,063,130
Total149,437,671149,437,671

7.14.2Provisionforimpairmentofgoodwill

Unit:Yuan

NameoftheinvestedunitormatterforminggoodwillBeginningbalanceIncreaseinthisperiodDecreaseinthisperiodEndingbalance
FormedbybusinessmergerOtherDisposalOther
EtablissementsRoulletFransac(“RoulletFransac”)
DicotPartners,S.L(“AtrioGroup”)
IndomitaWineCompanyChile,SpA
KilikanoonEstate,Australia7,578,4787,578,478
Total7,578,4787,578,478

7.15Long-termunamortizedexpenses

Unit:Yuan

ItemBeginningbalanceIncreaseinthisperiodAmortizationinthisperiodOtherdecreaseEndingbalance
Landleasefees52,129,414699,68051,429,734
Landacquisitionfees41,460,260575,73440,884,526
Afforestationfees145,952,500787,4314,610,618142,129,313
Renovationcosts32,988,8861,443,98331,544,903
Other5,064,348283,3274,781,021
Total277,595,408787,4317,613,342270,769,497

7.16Deferredincometaxassets/liabilities

7.16.1Un-offsetdeferredincometaxassets

Unit:Yuan

Item

ItemEndingBalanceBeginningBalance
DeductibletemporarydifferenceDeferredincometaxassetsDeductibletemporarydifferenceDeferredincometaxassets
Assetimpairmentprovision43,251,87910,812,97054,771,51913,692,880
Unrealizedprofitsfrominter-companytransactions333,361,87683,340,470479,898,175119,974,545
Deductibleloss286,136,55873,596,023247,147,75263,459,305
Unpaidbonus111,494,80227,873,700184,674,94646,168,736
Dismissionwelfare21,088,2635,272,06624,833,5126,208,378
Deferredincome61,772,90813,428,66470,643,43715,422,659
Total857,106,286214,323,8931,061,969,341264,926,503

7.16.2Un-offsetdeferredincometaxliabilities

Unit:Yuan

ItemEndingBalanceBeginningBalance
TaxabletemporarydifferenceDeferredincometaxliabilitiesTaxabletemporarydifferenceDeferredincometaxliabilities
Assetsappraisalappreciationinbusinessmergerundernon-commoncontrol50,453,76314,303,13751,829,56114,691,424
Total50,453,76314,303,13751,829,56114,691,424

7.16.3Detailsofunconfirmeddeferredincometaxassets

Unit:Yuan

ItemEndingbalanceBeginningbalance
Deductabletemporarydifference
Deductibleloss125,159,701132,081,819
Total125,159,701132,081,819

7.16.4Deductiblelossesofunconfirmeddeferredincometaxassetswillexpirein:

Unit:Yuan

YearEndingsumBeginningsumRemark
20205,718,4545,718,454
202136,741,46536,741,465
202226,609,67426,609,674
20236,987,18231,350,376
20247,726,79031,661,850
202541,376,136
Total125,159,701132,081,819--

7.17Othernon-currentassets

Unit:Yuan

Item

ItemEndingbalanceBeginningbalance
Royalty184,158,436193,674,320
Total184,158,436193,674,320

7.18Short-termloans

7.18.1Classificationofshort-termloans

Unit:Yuan

ItemEndingbalanceBeginningbalance
Pledgeloan
Mortgageloan59,875,40482,568,222
Guaranteedloan11,476,34210,677,905
Fiduciaryloan665,831,955661,067,617
Total737,183,701754,313,744

AsatJune30,2020,mortgagedloanswereHaciendayVi?edosMarquesdelAtrio,S.L.U("Atrio")factoringofaccountsreceivablefrombanksincludingBancodeSabadell,S.A.ofEUR3,964,000(equivalentofRMB31,557,404Yuan)(December31,2019:RMB54,663,422Yuan).MortgagedloanswereIndomitaWinemortgagedUSD4,000,000(equivalentofRMB28,318,000Yuan)ofitsfixedassetstoBBVA(December31,2019:RMB27,904,800Yuan).AustraliaKilikanoonEstatehasguaranteedloansofAUD2,358,621(equivalentofRMB11,476,342Yuan)(December31,2019:

RMB10,677,905Yuan).

7.19Accountspayable

7.19.1Listofaccountspayable

Unit:Yuan

ItemEndingbalanceBeginningbalance
Accountspayableformaterials,etc.379,727,980570,252,612
Total379,727,980570,252,612

7.19.2Explanationofsignificantaccountspayableagedmorethanoneyear

AsatJune30,2020,therewerenosignificantaccountspayableagedmorethanoneyear.

7.20Contractliabilities

Unit:Yuan

ItemEndingbalanceBeginningbalance
Advancesfromcustomers100,523,260106,734,070
Total100,523,260106,734,070

7.21Employeeremunerationspayable

7.21.1Listofemployeeremunerationspayable

Unit:Yuan

Item

ItemBeginningbalanceIncreaseinthisperiodDecreaseinthisperiodEndingbalance
1.Short-termremuneration208,889,457119,601,171210,105,009118,385,619
2.Post-employmentwelfare–definedcontributionplan736,14717,329,39917,676,500389,046
3.Dismissionwelfare24,833,512441,0384,186,28721,088,263
4.Otherwelfareduewithinoneyear
Total234,459,116137,371,608231,967,796139,862,928

7.21.2Listofshort-termremunerations

Unit:Yuan

ItemBeginningbalanceIncreaseinthisperiodDecreaseinthisperiodEndingbalance
1.Salaries,bonuses,allowancesandsubsidies212,017,795104,134,847192,207,416123,945,226
2.Staffwelfare2,001,5892,260,8114,169,00893,392
3.Socialinsurancecharges567,4465,617,6736,121,95963,160
Including:Medicalinsurance567,4464,982,1165,486,40263,160
Injuryinsurance518,934518,934
Maternityinsurance116,623116,623
4.Housingfund14,1955,934,6295,927,97820,846
5.Unionfeeandstaffeducationfee1,934,2091,653,2111,678,6481,908,772
6.Short-termcompensatedabsences
7.Short-termprofit-sharingplan
Minus:Thosedividedintonon-currentliabilities7,645,7777,645,777
Total208,889,457119,601,171210,105,009118,385,619

7.21.3Listofdefinedcontributionplan

Unit:Yuan

ItemBeginningbalanceIncreaseDecreaseEndingbalance
1.Basicendowmentinsurance736,13716,573,75216,920,853389,036
2.Unemploymentinsurance10755,647755,64710
3.Enterpriseannuitypayment
Total736,14717,329,39917,676,500389,046

7.21.4Dismissionwelfare

Unit:Yuan

Item

ItemBeginningbalanceIncreaseDecreaseEndingbalance
1.Compensationforserveroflaborrelation441,038441,038
2.Compensationforearlyretirement24,833,5123,745,24921,088,263
Total24,833,512441,0384,186,28721,088,263

7.22Taxesandduespayable

Unit:Yuan

ItemEndingbalanceBeginningbalance
Valueaddedtax24,637,07388,590,035
Consumptiontax11,731,92948,497,550
Corporateincometax104,903,260216,958,309
Individualincometax391,707840,997
Urbanmaintenanceandconstructiontax2,194,1986,731,772
Educationsurcharges1,589,5104,858,904
Urbanlandusetax2,343,6082,216,390
Other6,780,9906,476,014
Total154,572,275375,169,971

7.23Otherpayables

Unit:Yuan

ItemEndingbalanceBeginningbalance
Interestpayable2,167,287758,047
Dividendspayable480,819,9251,366,559
Otherpayables310,046,401448,407,879
Total793,033,613450,532,485

7.23.1Interestpayable

Unit:Yuan

ItemEndingbalanceBeginningbalance
Interestoflong-termloanswithinterestpaidbyinstallmentandprincipalpaidonmaturity
Interestofcorporatebonds
Interestpayableofshort-termloans2,167,287758,047
Interestofpreferredshares\perpetualbondsdividedintofinancialliabilities
Other
Total2,167,287758,047

7.23.2Dividendspayable

Unit:Yuan

Item

ItemEndingbalanceBeginningbalance
Ordinarystockdividends479,824,800
Preferredstockdividends/sustainabledebtdividendsdividedintoequityinstruments
Other995,1251,366,559
Total480,819,9251,366,559

7.23.3Otherpayables

7.23.3.1Otherpayableslistedbynature

Unit:Yuan

ItemEndingbalanceBeginningbalance
Dealer’sdepositpayable167,342,614164,649,995
Equipmentpurchaseandconstructioncostspayable56,776,51972,004,009
Transportationchargespayable14,043,60331,842,443
Advertisementexpensespayable1,107,87790,741,404
Employeecashdeposit619,2821,866,765
Supplier’sdepositpayable15,231,55013,990,900
Contractingfeespayable11,788,69116,997,685
Other43,136,26556,314,678
Total310,046,401448,407,879

7.24Non-currentliabilitiesduewithinoneyear

Unit:Yuan

ItemEndingbalanceBeginningbalance
Long-termloansduewithinoneyear64,996,064116,826,221
Bondspayableduewithinoneyear
Long-termaccountspayableduewithinoneyear34,000,00034,000,000
Leaseliabilitiesduewithinoneyear
Total98,996,064150,826,221

7.25Long-termloans

7.25.1Classificationoflong-termloans

Unit:Yuan

ItemEndingbalanceBeginningbalance
Mortgageloan2,475,8713,875,992
Guaranteedloan102,138,400105,093,000
Fiduciaryloan178,995,129136,749,730
Less:Long-termloansduewithinoneyear64,996,064116,826,221
Total218,613,336128,892,501

AsatJune30,2020,creditloanswereEUR22,484,000borrowedbyAtriofromBankia,BancoSantander,BBVAandCajaRuraldeNavarretc.(equivalentofRMB178,995,124Yuan)(December31,2019:RMB136,749,730Yuan).Mortgagedloans(RMB)werelong-termborrowingsofRMB43,750,000YuanoftheR&DCentre,asubsidiaryoftheCompany(December31,2019:

RMB56,250,000Yuan).AustraliaKilikanoonEstatehasborrowedAUD12,000,000(equivalentofRMB58,388,400Yuan)(December31,2019:RMB48,843,000Yuan)fromANZBankanditsguaranteedbytheCompany.MortgagedloanswereborrowingsofEUR311,000(equivalentofRMB2,475,871Yuan)formPopularEspa?ol,pledgedwithitslandwhichvaluedEUR2,929,628(equivalentofRMB23,322,769Yuan)(December31,2019:RMB3,875,992Yuan).

7.26Long-termaccountspayable

Item

ItemEndingbalanceBeginningbalance
Long-termaccountspayable167,000,000191,000,000
Specialaccountspayable
Total167,000,000191,000,000

7.26.1Long-termaccountspayablelistedbynature

Unit:Yuan

ItemEndingbalanceBeginningbalance
AgriculturalDevelopmentFundofChina("CADF")201,000,000225,000,000
Less:Long-termpayablesduewithinoneyear34,000,00034,000,000
Balanceoflong-termpayables167,000,000191,000,000

In2016,AgriculturalDevelopmentFundinvestedRMB305,000,000YuanintheResearch,Development&ManufactureCompany,accountingfor37.9%oftheregisteredcapital.Accordingtotheinvestmentagreement,itisagreedthatAgriculturalDevelopmentFundwilltakebacktheinvestmentfundintenyearsandobtainfixedincomeaccordingtoyear,whichis1.2%oftheremainingprincipal.Exceptfortheabovefixedincome,theAgriculturalDevelopmentFundshallnotenjoyotherprofitsoftheResearch,Development&ManufactureCompanyorbearthelossesoftheResearch,Development&ManufactureCompany.Accordingly,theinvestmentoftheAgriculturalDevelopmentFundintheResearch,Development&ManufactureCompanyisequityinvestmentnominally,whichisdebtinvestment(financediscountinterestloan)indeed.TheGroupincludedtheinvestmentoftheAgriculturalDevelopmentFundinlong-termaccountspayablemeasuredbyamortizedcost.FromJanuarytoJune2020,theGroupgavebacktheprincipalofRMB24,000,000Yuan.RefertoNote7.51fordetailsofmortgagedandpledgedassets.

7.27Deferredincome

Unit:Yuan

ItemBeginningbalanceIncreaseinthisperiodDecreaseinthisperiodEndingbalanceFormingreason
Governmentalsubsidy70,701,288445,5369,373,91661,772,908
Total70,701,288445,5369,373,91661,772,908--

Projectsrelatedtogovernmentalsubsidy

Unit:Yuan

Itemofliabilities

ItemofliabilitiesBeginningbalanceAmountofsubsidynewlyincreasedinthisperiodAmountincludedinnon-operatingrevenueinthisperiodAmountincludedinotherincomeinthisperiodAmountoffsetthecostexpensesOtherchangesEndingbalanceRelatedtoassets/income
Industrialdevelopmentsupportproject28,700,0002,050,00026,650,000Relatedtoassets
Xinjiangindustrialrevitalisationandtechnologicaltransformationproject14,220,000711,00013,509,000Relatedtoassets
FixedassetinvestmentrewardofShiheziChateauproject4,716,6001,140,0003,576,600Relatedtoassets
ShandongPeninsulaBlueEconomicAreaconstructionfunds4,000,0001,000,0003,000,000Relatedtoassets
Specialgovernmentgrantforinfrastructure3,180,000530,0002,650,000Relatedtoassets
Rawwinefermentationproject1,869,600717,4501,152,150Relatedtoassets
Winefermentationcapacityconstruction(Huanren)project2,800,000200,0002,600,000Relatedtoassets
Engineeringtechnologytransformationofinformationsystemproject2,320,000290,0002,030,000Relatedtoassets
Liquorelectronictrackingproject1,858,203333,5261,524,677Relatedtoassets
Infrastructureconstructionproject350,000445,53664,378731,158Relatedtoassets
Specialfundforefficientwater-savingirrigationproject1,877,000481,0001,396,000Relatedtoassets
Subsidyforeconomicandenergy-savingtechnologicaltransformationprojects898,10064,150833,950Relatedtoassets
Wineindustrydevelopmentproject372,00093,000279,000Relatedtoassets
SubsidyformechanicdevelopmentofPenglaiDaliuhangBase265,397265,397Relatedtoassets
Coalsubsidy201,50013,000188,500Relatedtoassets
Cross-bordere-commerceproject839,958124,611715,347Relatedtoincome
Travellingdevelopmentfundsubsidyproject560,000560,000Relatedtoincome
Waterpollutioncontrolprojectfund92,93056,80136,129Relatedtoincome
Subsidyforboilerreconstructionanddemolition80,0005,00075,000Relatedtoincome

Specialfundsforthedevelopmentofenterprises

Specialfundsforthedevelopmentofenterprises1,500,0001,500,000Relatedtoincome
Total70,701,288445,5369,373,91661,772,908

7.28Othernon-currentliabilities

Unit:Yuan

ItemEndingbalanceBeginningbalance
Employeeremunerationspayable7,645,7777,645,777
Total7,645,7777,645,777

AsatJune30,2020,theemployeeremunerationspayablereferredtothejobsecuritydepositdeductedfromtheyear-endbonusoftheemployeeshigherthansalesmanageroftheCompanyinproportion,whichwillbepaidfrom2021to2023aspredicted.

7.29Sharecapital

Unit:Yuan

BeginningbalanceIncreaseordecrease(+,-)inthisperiodEndingbalance
NewlyissuedsharesAllocatedsharesSharetransferredfromaccumulationfundOtherSubtotal
Totalshares685,464,000685,464,000

7.30Capitalreserves

Unit:Yuan

ItemBeginningbalanceIncreaseinthisperiodDecreaseinthisperiodEndingbalance
Capitalpremium(Sharecapitalpremium)559,133,834559,133,834
Othercapitalreserves5,916,5885,916,588
Total565,050,422565,050,422

7.31Othercomprehensiveincome

Unit:Yuan

ItemBeginningbalanceAmountincurredinthisperiodEndingbalance
AmountincurredbeforeincometaxinthisperiodMinus:amountincludedinothercomprehensiveincomebeforeandtransferredtoprofitorlossinthisperiodMinus:amountincludedinothercomprehensiveincomebeforeandtransferredtoretainedearningsinthisperiodMinus:incometaxexpensesAttributabletoparentcompanyaftertaxAttributabletominorityshareholdersaftertax
1.Othercomprehensiveincome

Item

ItemBeginningbalanceAmountincurredinthisperiodEndingbalance
AmountincurredbeforeincometaxinthisperiodMinus:amountincludedinothercomprehensiveincomebeforeandtransferredtoprofitorlossinthisperiodMinus:amountincludedinothercomprehensiveincomebeforeandtransferredtoretainedearningsinthisperiodMinus:incometaxexpensesAttributabletoparentcompanyaftertaxAttributabletominorityshareholdersaftertax
nottobereclassifiedintoprofitandlosslater
Including:Changesafterremeasuringandresettingthebenefitplans
Othercomprehensiveincomenottobereclassifiedintoprofitandlossunderequitylaw
Changesinthefairvalueofotherinvestmentsinequityinstruments
Changesinthefairvalueoftheenterprise'sowncreditrisk
2.Othercomprehensiveincometobereclassifiedintoprofitandlosslater-4,235,583-5,765,822-5,006,653-759,169-9,242,236
Including:Othercomprehensiveincometobereclassifiedintoprofitandlossunderequitylaw
Changesinthefairvalueofotherdebtinvestments
Amountoffinancialassetsreclassifiedintoothercomprehensiveincome
Provisionforcreditimpairmentofothercreditinvestments
Provisionforcash-flowhedge
DifferenceintranslationofForeignCurrencyFinancialStatement-4,235,583-5,765,822-5,006,653-759,169-9,242,236
Totalothercomprehensiveincome-4,235,583-5,765,822-5,006,653-759,169-9,242,236

7.32Surplusreserves

Unit:Yuan

Item

ItemBeginningbalanceIncreaseinthisperiodDecreaseinthisperiodEndingbalance
Legalsurplusreserves342,732,000342,732,000
Freesurplusreserves
Reservefund
Enterpriseexpansionfund
Other
Total342,732,000342,732,000

7.33Undistributedprofit

Unit:Yuan

ItemEndingbalanceBeginningbalance
Undistributedprofitattheendofpriorperiodbeforeadjustment8,719,899,3598,008,982,547
TotalUndistributedprofitatthebeginningoftheperiodbeforeadjustment(increaselistedwith+,anddecreaselistedwith-)-7,540,537
Undistributedprofitatthebeginningoftheperiodafteradjustment8,719,899,3598,001,442,010
Plus:Netprofitforowneroftheparentcompany307,035,5721,129,735,749
Minus:Drawnlegalsurplus
Drawnfreesurplus
Drawncommonriskprovision
Commondividendpayable479,824,800411,278,400
Commondividendtransferredtosharecapital
Undistributedprofitattheendofperiod8,547,110,1318,719,899,359

7.34Operatingincomeandoperatingcost

Unit:Yuan

ItemAmountincurredinthisperiodAmountincurredinpriorperiod
IncomeCostIncomeCost
Mainbusiness1,390,770,376569,872,9592,541,459,605927,958,197
Otherbusiness10,836,4164,777,71816,815,1808,294,028
Total1,401,606,792574,650,6772,558,274,785936,252,225

7.35Taxesandsurcharges

Unit:Yuan

ItemAmountincurredinthisperiodAmountincurredinpriorperiod
Consumptiontax49,392,77968,699,658

Urbanmaintenanceandconstructiontax

Urbanmaintenanceandconstructiontax9,360,10118,763,626
Educationsurcharges6,787,56413,670,717
Buildingtax13,946,83614,184,915
Landusetax5,823,9905,478,045
Stampduty2,276,0011,504,356
Other516,2221,249,531
Total88,103,493123,550,848

7.36Sellingexpenses

Unit:Yuan

ItemAmountincurredinthisperiodAmountincurredinpriorperiod
Marketingexpenses54,684,262268,185,487
Employeeremunerations95,885,996130,725,779
Transportationexpenses53,735,626
Trademarkusefees8,953,500
Storageandleaseexpenses17,922,79224,274,917
Depreciationexpenses25,656,68620,476,637
Advertisementexpenses14,084,57126,920,257
Conferenceexpenses2,447,0058,945,999
Design&productionexpenses1,590,9602,365,761
Servicecharges3,608,45811,484,614
Travelexpenses8,356,07511,822,548
Water,electricityandgascharges4,080,1467,697,325
Office&postagecosts1,840,8232,801,706
Packingexpenses2,540,0433,971,486
Publicsecurity&clean-keepingexpenses1,854,4372,214,479
Businessentertainmentexpenses589,4721,763,307
Other6,435,82014,584,873
Total250,531,046591,970,801

7.37Managementexpenses

Unit:Yuan

ItemAmountincurredinthisperiodAmountincurredinpriorperiod
Employeeremunerations27,711,14662,572,295
Depreciationexpenses36,815,08131,887,697
Contractingexpenses6,687,3377,178,106
Repairexpenses4,750,0728,253,897
Officeexpenses5,617,01710,177,651
Amortizationexpenses10,475,5297,677,849
Afforestationfees6,910,3237,682,946
Safeproductioncosts2,506,6812,357,016
Rentalexpenses4,659,2474,766,202
Businessentertainmentexpenses1,480,2132,631,383

Publicsecurity&clean-keepingexpenses

Publicsecurity&clean-keepingexpenses2,957,4753,356,435
Travelexpenses424,4122,971,468
Other2,075,3364,039,367
Total113,069,869155,552,312

7.38R&Dexpenses

Unit:Yuan

ItemAmountincurredinthisperiodAmountincurredinpriorperiod
R&Dexpenses1,805,9882,706,811
Total1,805,9882,706,811

7.39Financialexpenses

Unit:Yuan

ItemAmountincurredinthisperiodAmountincurredinpriorperiod
Interestexpenditure14,891,3109,812,560
Minus:Interestincome6,088,2814,606,417
Plus:Commissioncharges2,182,5021,271,831
Exchangegainorloss975,5712,311,609
Total11,961,1028,789,583

7.40Otherincome

Unit:Yuan

SourceofotherincomeAmountincurredinthisperiodAmountincurredinpriorperiod
Supportingfundforindustrialdevelopment2,050,0002,050,000
Rewardforinvestmentinfixedassets1,140,0001,140,000
Specialfundforconstructionofpeninsulablueeconomiczone1,000,0001,000,000
Other–relatedtoassets3,497,5053,082,627
Specialfundforsupportingcorporatedevelopment38,279,57951,633,350
Other–relatedtoincome3,813,1475,305,915
Total49,780,23164,211,892

7.41Investmentincome

Unit:Yuan

ItemAmountincurredinthisperiodAmountincurredinpriorperiod
Investmentincomefromlong-termequitybyequitymethod-1,170,685
Investmentincomefromdisposaloflong-termequity
Investmentincomegainedfromtradingfinancialassetsduringtheholdingperiod
Investmentincomegainedfromdisposaloftradingfinancialassets
Dividendincomegainedfromotherequityinstruments

Item

ItemAmountincurredinthisperiodAmountincurredinpriorperiod
duringtheholdingperiod
Gainsgeneratedfromtheremainingequityremeasuredasperfairvalueafterthelossofcontrol
Interestincomegainedfromequityinverstmentduringtheholdingperiod
Interestincomegainedfromotherequityinverstmentsduringtheholdingperiod
Investmentincomegainedfromdisposalofotherequityinverstments
Total-1,170,685

7.42Lossonimpairmentofcredit

Unit:Yuan

ItemAmountincurredinthisperiodAmountincurredinpriorperiod
Lossonbaddebtsofaccountsreceivable100,835-765,935
Total100,835-765,935

7.43Lossonimpairmentofassets

Unit:Yuan

ItemAmountincurredinthisperiodAmountincurredinpriorperiod
1.Lossonbaddebts
2.Inventoryfallingpricelossandlossonimpairmentofcontrctexecutioncost4,242,8136,148,729
3.Lossonimpairmentoflong-termequityinvestment
4.Lossonimpairmentofinvestmentrealestate
5.Lossonimpairmentoffixedassets
6.Lossonimpairmentofengineeringmaterials
7.Lossonimpairmentofconstructioninprogress
8.Lossonimpairmentofproductivebiologicalassets
9.Lossonimpairmentofoilandgasassets
10.Lossonimpairmentofintangibleassets
11.Lossonimpairmentofgoodwill
12.Other
Total4,242,8136,148,729

7.44Incomefromassetdisposal

Unit:Yuan

SourceofincomefromassetdisposalAmountincurredinthisperiodAmountincurredinpriorperiod
Incomefromdisposaloffixedassets39,6411,138
Total39,6411,138

7.45Non-operatingincome

Unit:Yuan

Item

ItemAmountincurredinthisperiodAmountincurredinpriorperiodAmountincludedinthecurrentnon-recurringprofits/losses
Gainsondebtrecombination
Gainsonexchangeofnon-monetaryassets
Grainsondonations
Governmentalsubsidy
Other4,682,2303,575,9144,682,230
Total4,682,2303,575,9144,682,230

7.46Non-operatingexpenses

Unit:Yuan

ItemAmountincurredinthisperiodAmountincurredinpriorperiodAmountincludedinthecurrentnon-recurringprofits/losses
Lossondebtrecombination
Lossonexchangeofnon-monetaryassets
Donation500,000500,000
Fine,penaltyandoverduefinepaidduetoviolationoflawsandadministrativeregulations31,12310,81131,123
Other336,150153,239336,150
Total867,273164,050867,273

7.47Incometaxexpenses

7.47.1Listofincometaxexpenses

Unit:Yuan

ItemAmountincurredinthisperiodAmountincurredinpriorperiod
Currentincometaxexpenses59,475,646161,779,976
Deferredincometaxexpenses50,214,32348,501,602
Total109,689,969210,281,578

7.47.2Adjustmentprocessofaccountingprofitandincometaxexpenses

Unit:Yuan

ItemAmountincurredinthisperiod
Totalprofit418,292,409
Incometaxexpensescalculatedaccordingtothelegal/applicabletaxrate104,573,102
Influenceofdifferenttaxratesapplicabletosubsidiary1,151,306

Item

ItemAmountincurredinthisperiod
Influenceofincometaxinthetermbeforeadjustment155,763
Influenceofnontaxableincome
Influenceofnon-deductiblecosts,expensesandlosses1,878,100
Influenceofdeductiblelossfromuseofunconfirmeddeferredincometaxassetsinpriorperiod
Influenceofdeductibletemporarydifferenceordeductiblelossofunconfirmeddeferredincometaxassetsinthisperiod1,931,698
Incometaxexpense109,689,969

7.48Othercomprehensiveincome

RefertoNote7.31fordetails.

7.49Itemsofcashflowstatement

7.49.1Othercashreceivedrelatedtooperatingactivities

Unit:Yuan

ItemAmountincurredinthisperiodAmountincurredinpriorperiod
Governmentalsubsidyincome40,851,85162,580,748
Interestincome3,865,8112,835,438
Netamercementincome269,6941,225,511
Other3,186,1781,143,923
Total48,173,53467,785,620

7.49.2Othercashpaidrelatedtooperatingactivities

Unit:Yuan

ItemAmountincurredinthisperiodAmountincurredinpriorperiod
Sellingexpenses218,880,805348,849,996
Administrativeexpenses37,212,15541,017,612
Other3,049,7752,912,859
Total259,142,735392,780,467

7.50Supplementaryinformationtocashflowstatement

7.50.1Supplementaryinformationtocashflowstatement

Unit:Yuan

SupplementarymaterialsAmountincurredinthisperiodAmountincurredinpriorperiod
1.Cashflowsfromoperatingactivitiescalculatedbyadjustingthenetprofit:----
Netprofit308,602,440602,178,315
Plus:Provisionforimpairmentofassets-4,343,648-5,382,794
Depreciationoffixedassets,oil-and-gasassets143,241,376155,147,729

Supplementarymaterials

SupplementarymaterialsAmountincurredinthisperiodAmountincurredinpriorperiod
andproductivebiologicalassets
Depreciationofright-of-useassets
Amortizationofintangibleassets11,145,5368,438,742
Amortizationoflong-termdeferredexpenses7,613,3426,662,662
Lossesondisposaloffixedassets,intangibleassetsandotherlong-termassets(profitlistedwith“-”)-39,641-1,138
Lossesonretirementoffixedassets(profitlistedwith“-”)2,127
Lossesonfairvaluechange(profitlistedwith“-”)
Financialcosts(profitlistedwith“-”)13,316,86013,987,879
Investmentlosses(profitlistedwith“-”)1,170,685
Decreaseindeferredincometaxassets(increaselistedwith“-”)50,602,61050,789,656
Increaseofdeferredincometaxliabilities(decreaselistedwith“-”)-388,287-3,381,035
Decreaseininventories(increaselistedwith“-”)-52,113,529123,958,750
Decreaseinoperatingreceivables(increaselistedwith“-”)180,626,835-172,662,167
Increaseinoperatingpayable(decreaselistedwith“-”)-689,089,527-280,260,593
Other
Netcashflowsfromoperatingactivities-29,652,821499,476,006
2.Significantinvestmentandfinancingactivitiesnotinvolvingcashdepositandwithdrawal:----
Debttransferredintoassets
Convertiblecorporatebondduewithin1year
Fixedassetsunderfinancinglease
3.Netchangesofcashandcashequivalent:----
Endingbalanceofcash1,300,790,3891,573,727,077
Minus:Beginningbalanceofcash1,365,772,6751,206,860,334
Plus:Endingbalanceofcashequivalent
Minus:Beginningbalanceofcashequivalent
Netincreaseamountofcashandcashequivalent-64,982,286366,866,743

7.50.2Compositionofcashandcashequivalents

Unit:Yuan

ItemEndingbalanceBeginningbalance
1.Cash1,300,790,3891,365,772,675
Including:Cashonhand38,91059,975
Bankdepositsondemand1,300,751,4791,365,712,700
Othermonetarycapitalondemand
Duefromcentralbankavailableforpayment
Duefromtheindustry
Inter-banklending
2.Cashequivalents

Item

ItemEndingbalanceBeginningbalance
Including:Bondinvestmentduewithinthreemonths
3.Balanceofcashandcashequivalentsattheendofperiod1,300,790,3891,365,772,675
Including:Restricteduseofparentcompanyorsubsidiariesinthegroup

7.51Assetswithownershiporuserightrestrictions

ItemEndingbookvalueReasonforrestriction
Monetarycapital94,216,666Loandeposit,L/Cdeposit,frozenbalanceofAlipay,housingfundandguarantymoneyfordepositinunitcard
Billsreceivable31,557,404Pledgeofshort-termloans
Fixedassets338,237,400Pledgeofshort-termloans,long-termloansandlong-termaccountspayable
Intangibleassets209,707,945Pledgeoflong-termaccountspayable
Total673,719,415--

8.Changesinscopeofconsolidation

Nil

9.Equityinotherentities

9.1Equityinthesubsidiaries

9.1.1Constitutionofenterprisegroup

NameofsubsidiaryPrincipalbusinesslocationRegistrationplaceBusinessnatureProportionofshareholdingAcquisitionmode
DirectIndirect
XinjiangTianzhuWineCo.,Ltd.(“XinajingTianzhu”)Shihezi,Xinjiang,ChinaShihezi,Xinjiang,ChinaManufacturing60%Acquiredfromabusinesscombinationundernon-commoncontrol
EtablissementsRoulletFransac(“RoulletFransac”)Cognac,FranceCognac,FranceTrading100%Acquiredfromabusinesscombinationundernon-commoncontrol
DicotPartners,S.L(“Dicot”)Navarre,SpainNavarre,SpainSales75%Acquiredfromabusinesscombinationundernon-commoncontrol
Vi?aIndómita,S.A.,Vi?aDosAndes,S.A.,andBodegasSantaAliciaSpA.(“ChileIndomitaWineGroup”)Santiago,ChileSantiago,ChileSales85%Acquiredbyestablishmentorinvestment
KilikanoonEstatePtyLtd(“AustraliaKilikanoonEstate”)Adelaide,AustraliaAdelaide,AustraliaSales82.50%Acquiredfromabusinesscombinationundernon-commoncontrol
BeijingChangyuSalesandDistributionCo.,LtdBeijing,ChinaBeijing,ChinaSales100%Acquiredbyestablishmentor

Nameofsubsidiary

NameofsubsidiaryPrincipalbusinesslocationRegistrationplaceBusinessnatureProportionofshareholdingAcquisitionmode
DirectIndirect
("BeijingSales")investment
YantaiKylinPackagingCo.,Ltd.("KylinPackaging")Yantai,Shandong,ChinaYantai,Shandong,ChinaManufacturing100%Acquiredbyestablishmentorinvestment
YantaiChateauChangyu-CastelCo.,Ltd("ChateauChangyu")(b)Yantai,Shandong,ChinaYantai,Shandong,ChinaManufacturing70%Acquiredbyestablishmentorinvestment
Changyu(Jingyang)WineCo.,Ltd.("JingyangWine")Xianyang,Shaanxi,ChinaXianyang,Shaanxi,ChinaManufacturing90%10%Acquiredbyestablishmentorinvestment
YantaiChangyuPioneerWineSalesCo.,Ltd.("SalesCompany")Yantai,Shandong,ChinaYantai,Shandong,ChinaSales100%Acquiredbyestablishmentorinvestment
LangfangDevelopmentZoneCastel-ChangyuWineCo.,Ltd("LangfangCastel")Langfang,Hebei,ChinaLangfang,Hebei,ChinaManufacturing39%10%Acquiredbyestablishmentorinvestment
Changyu(Jingyang)WineSalesCo.,Ltd.("JingyangSales")Xianyang,Shaanxi,ChinaXianyang,Shaanxi,ChinaSales10%90%Acquiredbyestablishmentorinvestment
LangfangChangyuPioneerWineSalesCo.,Ltd("LangfangSales")Langfang,Hebei,ChinaLangfang,Hebei,ChinaSales10%90%Acquiredbyestablishmentorinvestment
ShanghaiChangyuSalesandDistributionCo.,Ltd.("ShanghaiSales")Shanghai,ChinaShanghai,ChinaSales30%70%Acquiredbyestablishmentorinvestment
BeijingChangyuAFIPAgriculturedevelopmentCo.,Ltd("AgricultureDevelopment")Miyun,Beijing,ChinaMiyun,Beijing,ChinaSales100%Acquiredbyestablishmentorinvestment
BeijingChateauChangyuAFIPGlobalCo.,Ltd.(“AFIP”)(c)Beijing,ChinaBeijing,ChinaManufacturing91.53%Acquiredbyestablishmentorinvestment
YantaiChangyuWineSalesCo.,Ltd.("WinesSales")Yantai,Shandong,ChinaYantai,Shandong,ChinaSales90%10%Acquiredbyestablishmentorinvestment
YantaiChangyuPioneerInternationalCo.,Ltd.("PioneerInternational")Yantai,Shandong,ChinaYantai,Shandong,ChinaSales70%30%Acquiredbyestablishmentorinvestment
HangzhouChangyuWineSalesCo.,Ltd.("HangzhouChangyu")Hangzhou,Zhejiang,ChinaHangzhou,Zhejiang,ChinaSales100%Acquiredbyestablishmentorinvestment
NingxiaChangyuGrapeGrowingCo.,Ltd.(“NingxiaGrowing”)Yinchuan,Ningxia,ChinaNingxia,ChinaPlanting100%Acquiredbyestablishmentorinvestment
HuanrenChangyuNationalWinesSalesCo.,Ltd.("NationalWines")Benxi,Liaoning,ChinaBenxi,Liaoning,ChinaSales100%Acquiredbyestablishmentorinvestment
LiaoningChangyuGoldenIcewineValleyCo.,Ltd.("GoldenIcewineValley")(d)Benxi,Liaoning,ChinaBenxi,Liaoning,ChinaManufacturing51%Acquiredbyestablishmentorinvestment

Nameofsubsidiary

NameofsubsidiaryPrincipalbusinesslocationRegistrationplaceBusinessnatureProportionofshareholdingAcquisitionmode
DirectIndirect
YantaiDevelopmentZoneChangyuTradingCo.,Ltd.("DevelopmentZoneTrading")Yantai,Shandong,ChinaYantai,Shandong,ChinaSales100%Acquiredbyestablishmentorinvestment
YantaiChangyuFushanTradingCompany("FushanTrading")Yantai,Shandong,ChinaYantai,Shandong,ChinaSales100%Acquiredbyestablishmentorinvestment
BeijingAFIPMeetingCenter("MeetingCenter")Miyun,Beijing,ChinaMiyun,Beijing,ChinaServices100%Acquiredbyestablishmentorinvestment
BeijingAFIPTourismandCulture("AFIPTourism")Miyun,Beijing,ChinaMiyun,Beijing,ChinaTourism100%Acquiredbyestablishmentorinvestment
Changyu(Ningxia)WineCo.,Ltd.(“NingxiaWine”)Ningxia,ChinaNingxia,ChinaManufacturing100%Acquiredbyestablishmentorinvestment
YantaiChangyuChateauTinlotCo.,Ltd.("ChateauTinlot")Yantai,Shandong,ChinaYantai,Shandong,ChinaManufacturing65%35%Acquiredbyestablishmentorinvestment
QingTongXiaChangyuWineMarketingLtd.("QingTongXiaSales")Ningxia,ChinaNingxia,ChinaSales100%Acquiredbyestablishmentorinvestment
XinjiangChateauChangyuBaronBalboaCo.,Ltd.(“ChateauShihezi”)Shihezi,Xinjiang,ChinaShihezi,Xinjiang,ChinaManufacturing100%Acquiredbyestablishmentorinvestment
NingxiaChateauChangyuMoserXVCo.,Ltd.(“ChateauNingxia”)Yinchuan,Ningxia,ChinaYinchuan,Ningxia,ChinaManufacturing100%Acquiredbyestablishmentorinvestment
ShaanxiChateauChangyuRenaCo.,Ltd.(“ChateauChang’an”)Xianyang,Shaanxi,ChinaXianyang,Shaanxi,ChinaManufacturing100%Acquiredbyestablishmentorinvestment
YantaiChangyuWineResearch&DevelopmentCentreCo.,Ltd.(“R&DCentre”)(e)Yantai,Shandong,ChinaYantai,Shandong,ChinaManufacturing72%Acquiredbyestablishmentorinvestment
Changyu(HuanRen)WineCo.,Ltd("HuanRenWine")Benxi,Liaoning,ChinaBenxi,Liaoning,ChinaManufacturing100%Acquiredbyestablishmentorinvestment
XinjiangChangyuSalesCo.,Ltd("XinjiangSales")Shihezi,Xinjiang,ChinaShihezi,Xinjiang,ChinaSales100%Acquiredbyestablishmentorinvestment
NingxiaChangyuTradingCo.,Ltd("NingxiaTrading")Yinchuan,Ningxia,ChinaYinchuan,Ningxia,ChinaSales100%Acquiredbyestablishmentorinvestment
ShaanxiChangyuRenaWineSalesCo.,Ltd("ShaanxiSales")Xianyang,Shaanxi,ChinaXianyang,Shaanxi,ChinaSales100%Acquiredbyestablishmentorinvestment
PenglaiChangyuWineSalesCo.,Ltd("PenglaiWine")Penglai,Shandong,ChinaPenglai,Shandong,ChinaSales100%Acquiredbyestablishmentorinvestment
LaizhouChangyuWineSalesCo.,Ltd("LaizhouSales")Laizhou,Shandong,ChinaLaizhou,Shandong,ChinaSales100%Acquiredbyestablishmentorinvestment

Nameofsubsidiary

NameofsubsidiaryPrincipalbusinesslocationRegistrationplaceBusinessnatureProportionofshareholdingAcquisitionmode
DirectIndirect
FrancsChampsParticipationsSAS(“FrancsChamps”)Cognac,FranceCognac,FranceInvestmentandtrading100%Acquiredbyestablishmentorinvestment
BeijingRetailingCo.Ltd("BeijingRetailing")Beijing,ChinaBeijing,ChinaSales100%Acquiredbyestablishmentorinvestment
TianjinChangyuPioneerSalesCo.,Ltd("TianjinPioneer")(a)Tianjin,ChinaTianjin,ChinaSales100%Acquiredbyestablishmentorinvestment
BeijingChangyuPioneerSalesCo.,Ltd("BeijingPioneer")(a)Beijing,ChinaBeijing,ChinaSales100%Acquiredbyestablishmentorinvestment
YantaiRoulletFransacWineSalesCo.,Ltd.(“YantaiRoulletFransac”)Yantai,Shandong,ChinaYantai,Shandong,ChinaSales100%Acquiredbyestablishmentorinvestment
GuangzhouChangyuPioneerSalesCo.,Ltd("GuangzhouPioneer")(a)Guanghzou,Guangdong,ChinaGuanghzou,Guangdong,ChinaSales100%Acquiredbyestablishmentorinvestment
YantaiChangyuWineSalesCo.,Ltd.("WineSalesCompany")Yantai,Shandong,ChinaYantai,Shandong,ChinaSales100%Acquiredbyestablishmentorinvestment
ShaanxiChateauChangyuRenaTourismCo.,Ltd("ChateauTourism")Xianxin,Shaanxi,ChinaXianxin,Shaanxi,ChinaTourism100%Acquiredbyestablishmentorinvestment
LongkouChangyuWineSalesCo.,Ltd("LongkouSales")Yantai,Shandong,ChinaYantai,Shandong,ChinaSales100%Acquiredbyestablishmentorinvestment

Explanationfordifferencebetweentheproportionofshareholdingandproportionofvotingpowerinthesubsidiaries:

(a)Companiesabovewerederegisteredin2020.(b)ChateauChangyuisaSino-foreignjointventureestablishedbytheCompanyandaforeigninvestor,accountingfor70%ofChangyuChateau'sequityinterest.Throughagreementarrangement,theCompanyhasthefullpowertocontrolChangyuChateau'sstrategicoperating,investingandfinancingpolicies.TheagreementarrangementwillbeterminatedonDecember31,2022.(c)AFIPisalimitedliabilitycompanyjointlyestablishedbytheCompanyandYantaiDe’anandBeijingQinglang.InJune2019,YantaiDeantransferred1.31%ofitsequitytoYantaiChangyu.Aftertheequitychange,theCompanyholds91.53%ofitsequity.Throughagreementarrangement,theCompanyhasthefullpowertocontrolAFIP'sstrategicoperating,investingandfinancingpolicies.TheagreementarrangementwillbeterminatedonSeptember2,2024.(d)IcewineValleyisaSino-foreignjointventureestablishedbytheCompanyandaforeigninvestor,whose51%ofthesharesareheldbytheCompany.TheCompanyexercisesfullcontrolovertheoperation,investmentandfinancingpoliciesofIcewineValleybycontractarrangement.ThecontractarrangementwillexpireonDecember31,2021.(e)TheResearch,Development&ManufactureCompanyisajointventureestablishedbythe

CompanyandAgriculturalDevelopmentFund,whose72%oftheshareswereheldbytheCompanyonDecember31,2019.AsstatedinNote7.27,theCompanyexercisesfullcontrolovertheoperation,investmentandfinancingpoliciesoftheResearch,Development&ManufactureCompanybycontractarrangement.ThecontractarrangementwillexpireonMay22,2026.UptoJune30,2020,theremaininginvestmentoftheAgriculturalDevelopmentFundaccountedfor28.67%oftheregisteredcapital.

9.1.2Importantnon-wholly-ownedsubsidiaries

Unit:Yuan

Nameofsubsidiary

NameofsubsidiaryShareholdingproportionofminorityshareholdersProfit/lossattributabletominorityshareholdersinthisperiodOthercomprehensiveincomeattributabletominorityshareholdersinthisperiodDividenddeclaredtobedistributedtominorityshareholdersinthisperiodBalanceofminorityshareholder’sinterestattheendofperiod
XinjiangTianzhu40%-1,268,45346,315,685
AtrioGroup25%2,735,240538,514995,12534,148,093
ChangyuChateau30%12,365,016
LangfangCastel51%-605,34719,033,761
AFIP8.47%56,409,393
IcewineValley49%33,319,062
IndomitaWine15%549,632-1,094,85353,385,908
KilikanoonEstate,Australia17.50%155,796-202,830185,12814,578,260

Explanationfordifferencebetweentheproportionofshareholdingandproportionofvotingpoweroftheminorityshareholdersinthesubsidiaries:SeedetailsinNote9.1.1.

9.1.3Mainfinancialinformationofimportantnon-wholly-ownedsubsidiaries

Unit:Yuan

Nameofsubsidiary

NameofsubsidiaryEndingbalanceBeginningbalance
CurrentassetsNon-currentassetsTotalassetsCurrentliabilitiesNon-currentliabilitiesTotalliabilitiesCurrentassetsNon-currentassetsTotalassetsCurrentliabilitiesNon-currentliabilitiesTotalliabilities
XinjiangTianzhu25,075,53559,767,79684,843,331140,3645,336,1145,476,47824,829,43561,886,75186,716,18636,1855,336,1145,372,299
ChangyuChateau130,901,716112,847,346243,749,063163,197,646163,197,646142,525,011113,168,202255,693,213174,843,671400,000175,243,671
LangfangCastel15,755,77214,271,09730,026,8701,256,9371,256,93719,021,76614,958,22333,979,9894,023,1014,023,101
BeijingChateau250,019,242441,579,625691,598,86735,864,457188,50036,052,957251,829,164452,444,880704,274,04445,607,611201,50045,809,111
IcewineValley49,358,50722,498,14071,856,64726,818,687100,00026,918,68738,234,72023,291,37561,526,09512,077,206100,00012,177,206
MarquesdelAtrio414,831,78994,319,003509,150,792226,512,338145,632,259372,144,597470,219,32691,571,444561,790,770380,788,88053,110,213433,899,093
IndomitaWine214,245,502289,781,873504,027,375135,350,9825,212,702140,563,684223,722,688291,630,115515,352,803142,365,7495,152,974147,518,723
KilikanoonEstate,Australia105,402,01561,788,070167,190,08524,695,86560,119,96584,815,83094,473,62061,770,599156,244,21921,801,34750,741,98172,543,328

Unit:Yuan

NameofsubsidiaryAmountincurredinthisperiodAmountincurredinpriorperiod
OperatingincomeNetprofitTotalcomprehensiveincomeOperatingcashflowOperatingincomeNetprofitTotalcomprehensiveincomeOperatingcashflow
XinjiangTianzhu-3,171,133-3,171,133-756,855-3,001,571-1,297,212-417,462
ChangyuChateau15,274,042-416,327-416,3279,574,27424,470,842-2,189,871-686,8746,946,282
LangfangCastel116,711-1,186,955-1,186,955-54,248-1,474,975-821,01325,801
BeijingChateau50,688,043-2,919,024-2,919,024-1,954,06290,339,52612,711,98522,752,8239,667,568
IcewineValley7,365,586-4,410,928-4,410,928733,93519,763,387-1,986,710-754,0561,903,734
MarquesdelAtrio130,982,53610,940,96313,095,017-50,830,985129,064,4571,859,381-4,084,674-23,846,960
IndomitaWine78,507,2273,664,211-3,634,80729,108,44986,818,8383,762,5041,880,687-1,725,571
KilikanoonEstate,Australia18,928,910890,266-268,764-6,891,81222,852,809-1,509,147-4,011,4581,024,962

10.Risksrelatedtofinancialinstruments

TheGrouphasexposuretothefollowingmainrisksfromitsuseoffinancialinstrumentsinthenormalcourseoftheGroup’soperations:

-Creditrisk-Liquidityrisk-Interestraterisk-ForeigncurrencyriskThefollowingmainlypresentsinformationabouttheGroup’sexposuretoeachoftheaboverisksandtheirsources,theirchangesduringtheyear,andtheGroup’sobjectives,policiesandprocessesformeasuringandmanagingrisks,andtheirchangesduringtheyear.TheGroupaimstoseekappropriatebalancebetweentherisksandbenefitsfromitsuseoffinancialinstrumentsandtomitigatetheadverseeffectsthattherisksoffinancialinstrumentshaveontheGroup’sfinancialperformance.Basedonsuchobjectives,theGroup’sriskmanagementpoliciesareestablishedtoidentifyandanalysetherisksfacedbytheGroup,tosetappropriaterisklimitsandcontrols,andtomonitorrisksandadherencetolimits.RiskmanagementpoliciesandsystemsarereviewedregularlytoreflectchangesinmarketconditionsandtheGroup’sactivities.

10.1Creditrisk

Creditriskistheriskthatonepartytoafinancialinstrumentwillcauseafinanciallossfortheotherpartybyfailingtodischargeanobligation.TheGroup’screditriskisprimarilyattributabletocashatbank,receivables,debtinvestmentsandderivativefinancialinstrumentsenteredintoforhedgingpurposes.Exposuretothesecreditrisksaremonitoredbymanagementonanongoingbasis.ThecashatbankoftheGroupismainlyheldwithwell-knownfinancialinstitutions.ManagementdoesnotforeseeanysignificantcreditrisksfromthesedepositsanddoesnotexpectthatthesefinancialinstitutionsmaydefaultandcauselossestotheGroup.AsatJune30,2020,theGroup'smaximumexposuretocreditriskwhichwillcauseafinanciallosstotheGroupduetofailuretodischargeanobligationbythecounterparties.

Inordertominimisethecreditrisk,theGrouphasadoptedapolicytoensurethatallsalescustomershavegoodcreditrecords.AccordingtothepolicyoftheGroup,creditreviewisrequiredforclientswhorequirecredittransactions.Inaddition,theGroupcontinuouslymonitorsthebalanceofaccountreceivabletoensurethere’snoexposuretosignificantbaddebtrisks.Fortransactionsthatarenotdenominatedinthefunctionalcurrencyoftherelevantoperatingunit,theGroupdoesnotoffercredittermswithoutthespecificapprovaloftheDepartmentofCreditControlintheGroup.Inaddition,theGroupreviewstherecoverableamountofeachindividualtradedebtateachbalancesheetdatetoensurethatadequateimpairmentlossesaremadeforirrecoverableamounts.Inthisregard,themanagementoftheGroupconsidersthattheGroup'screditriskissignificantlyreduced.SincetheGrouptradesonlywithrecognisedandcreditworthythirdparties,thereisnorequirementforcollateral.Concentrationsofcreditriskaremanagedbycustomer/counterparty,bygeographicalregionandbyindustrysector.AsatJune30,2020,20.1%oftheGrouptradereceivablesareduefromtopfivecustomers(December31,2019:20.3%).ThereisnocollateralorothercreditenhancementonthebalanceofthetradereceivablesoftheGroup.

10.2Liquidityrisk

Liquidityriskistheriskthatanenterprisewillencounterdifficultyinmeetingobligationsthataresettledbydeliveringcashoranotherfinancialasset.TheCompanyanditsindividualsubsidiariesareresponsiblefortheirowncashmanagement,includingshort-terminvestmentofcashsurplusesandtheraisingofloanstocoverexpectedcashdemands(subjecttoapprovalbytheCompany’sboardwhentheborrowingsexceedcertainpredeterminedlevels).TheGroup’spolicyistoregularlymonitoritsliquidityrequirementsanditscompliancewithlendingcovenants,toensurethatitmaintainssufficientreservesofcash,readilyrealisablemarketablesecuritiesandadequatecommittedlinesoffundingfrommajorfinancialinstitutionstomeetitsliquidityrequirementsintheshortandlongerterm.

10.3Interestraterisk

Interest-bearingfinancialinstrumentsatvariableratesandatfixedratesexposetheGrouptocashflowinterestrateriskandfairvalueinterestrisk,respectively.TheGroupdeterminestheappropriateweightingsofthefixedandfloatingrateinterest-bearinginstrumentsbasedonthecurrentmarketconditionsandperformsregularreviewsandmonitoringtoachieveanappropriatemixoffixedandfloatingrateexposure.

(1)AsatJune30,2020,theGroupheldthefollowinginterest-bearingfinancialinstruments:

Fixedrateinstruments:

Unit:Yuan

Item

ItemJune30,2020December31,2019
EffectiveinterestrateAmountsEffectiveinterestrateAmounts
Financialassets
-Cashatbank1.4%-2.75%81,200,0001.1%-2.75%106,128,600
Financialliabilities
-Short-termloans0.35%-4.9%-187,183,7010.35%-4.9%-204,313,744
-Long-termloans(includingtheportionduewithinoneyear)1%-4.275%-239,859,4001%-2.5%-189,468,722
-Long-termpayables(includingtheportionduewithinoneyear)1.20%-201,000,0001.20%-225,000,000
Total-546,843,101-512,653,866

Variablerateinstruments:

Unit:Yuan

ItemJune30,2020December31,2019
EffectiveinterestrateAmountsEffectiveinterestrateAmounts
Financialassets
-Cashatbank0.3%-1.1%1,395,007,0550.3%-1.75%1,459,595,405
Financialliabilities
-Short-termloansLPR-550,000,000LPR-550,000,000
-Long-termloans(includingtheportionduewithinoneyear)90%of5-yearLPR-43,750,00090%of5-yearLPR-56,250,000
Total801,257,055853,345,405

(2)SensitivityanalysisManagementoftheGroupbelievesinterestrateriskonbankdepositisnotsignificant,thereforedoesnotdisclosesensitivityanalysisforinterestraterisk.AsatJune30,2020,basedonassumptionsabove,itisestimatedthatageneralincreaseof50basispointsininterestrates,withallothervariablesheldconstant,woulddecreasetheGroup’sequitybyRMB1,113,281Yuan(2019:RMB2,273,438Yuan),andnetprofitbyRMB1,113,281Yuan(2019:

RMB2,273,438Yuan).Thesensitivityanalysisaboveindicatestheinstantaneouschangeinthenetprofitandequitythatwouldariseassumingthatthechangeininterestrateshadoccurredatthebalancesheetdateandhadbeenappliedtore-measurethosefinancialinstrumentsheldbytheGroupwhichexposetheGroupto

fairvalueinterestrateriskatthebalancesheetdate.Inrespectoftheexposuretocashflowinterestrateriskarisingfromfloatingratenon-derivativeinstrumentsheldbytheGroupatthebalancesheetdate,theimpactonthenetprofitandequityisestimatedasanannualisedimpactoninterestexpenseorincomeofsuchachangeininterestrates.

10.4Foreigncurrencyrisk

Inrespectofcashatbankandonhand,accountsreceivableandpayable,short-termloansdenominatedinforeigncurrenciesotherthanthefunctionalcurrency,theGroupensuresthatitsnetexposureiskepttoanacceptablelevelbybuyingorsellingforeigncurrenciesatspotrateswhennecessarytoaddressshort-termimbalances.

(1)AsatJune30,2020,theGroup’sexposuretocurrencyriskarisingfromrecognisedassetsorliabilitiesdenominatedinforeigncurrenciesispresentedinthefollowingtables.Forpresentationpurposes,theamountsoftheexposureareshowninRenminbi,translatedusingthespotrateatthebalancesheetdate.Differencesresultingfromthetranslationofthefinancialstatementsdenominatedinforeigncurrencyareexcluded.

Unit:Yuan

Item

ItemJune30,2020December31,2019
BalanceatforeigncurrencyBalanceatRMBequivalentBalanceatforeigncurrencyBalanceatRMBequivalent
Cashatbankandonhand5,423,40938,957,6496,662,52546,592,414
-USD4,783,30733,863,4256,525,67345,524,399
-EUR639,8715,094,014136,6281,067,814
-HKD230210224201
Short-termloans12,490,00088,422,95512,490,00087,132,738
-USD12,490,00088,422,95512,490,00087,132,738

(2)SensitivityanalysisAssumingallotherriskvariablesremainedconstant,a5%strengtheningoftheRenminbiagainsttheUSdollar,EuroandHongKongdollaratJune30,2020wouldhaveimpactontheGroup’sequityandnetprofitbytheamountshownbelow,whoseeffectisinRenminbiandtranslatedusingthespotrateattheyear-enddate:

Unit:Yuan

ItemEquityNetprofit
June30,2020
USD2,727,9772,727,9777
EUR-53,391-53,391
HKD
Total2,674,5862,674,586

December31,2019

December31,2019
USD2,080,4172,080,417
EUR-53,391-53,391
HKD-10-10
Total2,027,0162,027,016

A5%weakeningoftheRenminbiagainsttheUSdollar,EuroandHongKongdollaratJune30,2020wouldhavehadtheequalbutoppositeeffecttotheamountsshownabove,onthebasisthatallothervariablesremainedconstant.

11.Fairvaluedisclosure

AllfinancialassetsandfinancialliabilitiesheldbytheGrouparecarriedatamountsnotmateriallydifferentfromtheirfairvalueatJune30,2020.

12.Relatedpartiesandrelatedtransactions

12.1ParticularsoftheparentcompanyoftheCompany

NameofparentcompanyRegistrationplaceBusinessnatureRegisteredcapitalProportionofshareholdingoftheparentcompanyintheCompanyProportionofvotingpowersoftheparentcompanyintheCompany
ChangyuGroupCompanyYantaiCityManufacturingindustry50,000,00050.40%50.40%

FromJanuarytoJune2020,therewasnofluctuationintheregisteredcapitaloftheparentcompanyanditsshareinequityinterestandvotingright.

12.2ParticularsofthesubsidiariesoftheCompany

SeeparticularsofthesubsidiariesoftheCompanyinNote9.

12.3InformationaboutjointventuresandassociatesoftheCompanyOtherjointventuresandassociatesthathaverelatedpartytransactionswiththeCompanyduringthisperiodorthatformedbalancewhenhavingrelatedpartytransactionswiththeCompanyduringthepriorperiodareasfollows:

NameofentityRelationshipwiththeCompany
L&MHoldingsJointventureoftheGroup

12.4Particularsofotherrelatedparties

Nameofotherrelatedparties

NameofotherrelatedpartiesRelationshipbetweenotherrelatedpartiesandtheCompany
YantaiChangyuWineCultureMuseumCo.,Ltd.(“WineCultureMuseum”)Acompanycontrolledbythesameparentcompany
YantaiChangyuWindowofInternationalWineCityCo.Ltd.(“WindowofWineCity”)Acompanycontrolledbythesameparentcompany
YantaiGodHorsePackingCo.,Ltd.(“GodHorsePacking”)Acompanycontrolledbythesameparentcompany
YantaiZhongyaMedicalHealthWineCo.,Ltd.(“ZhongyaMedical”)Acompanycontrolledbythesameparentcompany
YantaiChangyuCulturalTourismProductSalesCo.,Ltd.(“CulturalSales”)Acompanycontrolledbythesameparentcompany
YantaiChangyuCulturalTourismDevelopmentCo.,Ltd.(“CulturalDevelopment”)Acompanycontrolledbythesameparentcompany
L&MHoldingsJointventures
MirefleursSubsidiariesofthejointventure
CHATEAUDELIVERSAN(“LIVERSAN”)Subsidiariesofthejointventure

12.5Relatedtransactions

12.5.1RelatedtransactionsofpurchasingandsellinggoodsandprovidingandreceivingservicesListofpurchasinggoods/receivingservices

Unit:Yuan

RelatedpartiesRelatedtransactionsAmountincurredinthisperiodAmountincurredinpriorperiod
GodHorsePackingPurchasinggoods35,624,51795,990,354
ZhongyaMedicalPurchasinggoods574,7916,037,893
WineCultureMuseumPurchasinggoods5,975,8179,475,159
WindowofWineCityPurchasinggoods1,014,6852,857,130
CulturalSalesPurchasinggoods3,265,703
CulturalDevelopmentPurchasinggoods156,616

Listofsellinggoods/providingservices

Unit:Yuan

RelatedpartiesRelatedtransactionsAmountincurredinthisperiodAmountincurredinpriorperiod
WineCultureMuseumSellinggoods2,765,3143,377,011
WindowofWineCitySellinggoods1,441,1663,891,101
ZhongyaMedicalSellinggoods1,349,0212,559,870

Relatedparties

RelatedpartiesRelatedtransactionsAmountincurredinthisperiodAmountincurredinpriorperiod
GodHorsePackingSellinggoods1,9153,520
CulturalSalesSellinggoods21,6003,873,204
CulturalDevelopmentSellinggoods1,836,4701,847,727

ThepriceoftransactionsbetweentheGroupandtherelatedpartiesarebasedonthenegotiatedprice.

12.5.2Relatedtrusteeship/contractingandmandatoryadministration/outsourcingNil

12.5.3Leasingwithrelatedparties

TheCompanyasalessor:

Unit:Yuan

NameofthelesseeTypeofleasedassetsRentalincomerecognizedinthisperiodRentalincomerecognizedinpriorperiod
GodHorsePackingOfficebuildingandplant746,275742,883
ZhongyaMedicalOfficebuilding260,279

TheCompanyasalessee:

Unit:Yuan

NameofthelessorTypeofleasedassetsRentrecognizedinthisperiodRentrecognizedinpriorperiod
ChangyuGroupCompanyOfficebuildingandplant3,595,5833,447,891

12.5.4Relatedguarantee

Nil

12.5.5Inter-bankborrowingandlendingofrelatedparties

Nil

12.5.6Assettransferanddebtrecombinationofrelatedparties

Nil

12.5.7Otherrelatedtransactions

Unit:Yuan

ItemNoteAmountincurredinthisperiodAmountincurredinpriorperiod
Trademarkusefee(a)8,977,248

ThepriceoftransactionsbetweentheGroupandtherelatedpartiesarebasedonthenegotiatedprice.

12.6Accountsreceivableandpayableoftherelatedparties

12.6.1Accountsreceivable

Unit:Yuan

Item

ItemRelatedpartiesEndingbalanceBeginningbalance
BookbalanceProvisionforbaddebtsBookbalanceProvisionforbaddebts
AccountsreceivableZhongyaMedical2,005,18267,3794,292,38659,268
AccountsreceivableWindowofWineCity1,610,48522,237
OtherreceivableChangyuGroup3,775,362
OtherreceivablesGodHorsePacking1,626,800813,400
Othernon-currentassetsChangyuGroup184,158,436193,674,320
PrepaymentMirefleurs6,429,542
PrepaymentL&MHoldings1,632,941

12.6.2Accountspayable

Unit:Yuan

ItemRelatedpartiesEndingbookbalanceBeginningbookbalance
AccountspayableGodHorsePacking37,075,37639,893,538
AccountspayableZhongyaMedical4,392,3891,024,310
AccountspayableWineCultureMuseum4,874,963
AccountspayableWindowofWineCity3,758,054
AccountspayableCulturalSales297,956
AccountspayableCulturalDevelopment142,610
OtheraccountspayableGodHorsePacking604,000450,000

13.Share-basedpayment

Nil

14.Commitmentandcontingency

14.1Significantcommitment

Unit:Yuan

ItemEndingbalanceBeginningbalance
Makinglong-termassetcommitments539,980,000679,980,000

14.2ContingencyAsofthebalancesheetdate,theGroupdidn’thaveanycontingencytobedisclosed.

15.Mattersafterbalancesheet

15.1Importantnon-adjustingevents

Nil

15.2Profitdistribution

Unit:Yuan

Profitsordividendstobedistributed

Profitsordividendstobedistributed479,824,800
Allocatedprofitsordividendsapprovedtodeclareupondiscussion479,824,800

15.3Otherstatementofeventsafterthebalancesheetdate

AccordingtothedecisionoftheShareholders’MeetingdatedMay17,2020,basedontheissuedcapitalstockof685,464,000sharesin2019,theCompanyallocatedRMB7Yuanincash(includingtax)forevery10sharestoallshareholderswiththetotalcashdividendsofRMB479,824,800Yuan.SuchcashdividendsweredistributedonJuly10,2020andJuly14,2020respectively.

16.Otherimportantmatters

Nil

17.Notesonmajoritemsinfinancialstatementsoftheparentcompany

17.1Accountsreceivable

17.1.1Accountsreceivabledisclosedbytype

Unit:Yuan

TypeEndingbalanceBeginningbalance
BookbalanceProvisionforbaddebtsBookvalueBookbalanceProvisionforbaddebtsBookvalue
AmountProportionAmountAccruedproportionAmountProportionAmountAccruedproportion
Accountsreceivableforwhichprovisionforbaddebtsisaccruedonasingleitembasis

Accountsreceivableforbaddebtsisaccruedonacombinedbasis

Accountsreceivableforbaddebtsisaccruedonacombinedbasis304,238100%1,9780.7%302,2602,589,936100%601,61023.2%1,988,326
Total304,238100%1,9780.7%302,2602,589,936100%601,61023.2%1,988,326

Provisionforbaddebtsaccruedonacombinedbasis:

Unit:Yuan

NameEndingbalance
BookbalanceProvisionforbaddebtsAccruedproportion
Amountsduefromrelatedparties304,2381,9780.7%
Total304,2381,978--

Disclosedbyage:

Unit:Yuan

AgeEndingbalance
Within1year(including1year)304,238
1-2years
2-3years
Over3years
Total304,238

17.1.2Provisionforbaddebtsaccrued,withdrawnortransferredbackinthisperiod

Unit:Yuan

TypeBeginningbalanceChangesinthisperiodEndingbalance
AccruedWithdrawnortransferredbackCancelled
Accountsreceivableforwhichprovisionforbaddebtsisaccruedbycreditriskfeatures601,610599,6321,978
Total601,610599,6321,978

17.1.3Accountsreceivableactuallycancelledafterverificationinthisperiod

Nil

17.1.4Accountsreceivablecollectedbytheborroweroftop5unitsrankedbytheendingbalance

Unit:Yuan

UnitnameEndingbalanceofaccountsreceivableProportionintotalendingbalanceofaccountsreceivableEndingbalanceofbaddebtreserves
ZhongyaMedicineandHealthCareWineCompany304,238100%1,978
Total304,238100%

17.1.5Accountsreceivablederecognizedduetotransferoffinancialassets

Nil

17.1.6AccountsreceivabletransferredandincludedinassetsandliabilitiesNil

17.2Otherreceivables

Unit:Yuan

Item

ItemEndingbalanceBeginningbalance
Interestreceivable464,61490,355
Dividendsreceivable2,985,375200,000,000
Otherreceivables275,433,946386,334,603
Total278,883,935586,424,958

17.2.1Interestreceivable

Unit:Yuan

ItemEndingbalanceBeginningbalance
Fixeddeposit464,61490,355
Entrustedloan
Bondinvestment
Total464,61490,355

17.2.2Dividendsreceivable

Unit:Yuan

Item(ortheinvestedunit)EndingbalanceBeginningbalance
Dividendsreceivablefromsubsidiaries2,985,375200,000,000
Total2,985,375200,000,000

17.2.3Otherreceivables

1)Particularsofotherreceivablesclassifiedbynature

Unit:Yuan

NatureEndingbookbalanceBeginningbookbalance
Accountsreceivablefromsubsidiaries272,221,693385,328,319
Accountsreceivablefromrelatedparties2,359,130813,440
Other853,123192,844
Total275,433,946386,334,603

2)Disclosedbyage

Unit:Yuan

AgeEndingbalance

Age

AgeEndingbalance
Within1year(including1year)275,413,946
1-2years
2-3years
Morethan3years20,000
Total275,433,946

3)Provisionforbaddebtsaccrued,withdrawnortransferredbackinthisperiodTheprovisionforbaddebtsaccruedinthisperiodwasRMB0Yuan.

4)AccountsreceivableactuallycancelledafterverificationinthisperiodNil

5)Otheraccountsreceivablecollectedbytheborroweroftop5unitsrankedbytheendingbalance

Unit:Yuan

UnitNatureoffundEndingbalanceAgePercentageinthetotalendingbalanceofotheraccountsreceivableEndingbalanceofprovisionforbaddebts
SalesCompanyInternalincomingsandoutgoings236,837,358Within1year86.0%
R&DCompanyInternalincomingsandoutgoings19,536,550Within1year7.1%
LongkouSalesInternalincomingsandoutgoings9,692,960Within1year3.5%
GodHorsePackagingInternalincomingsandoutgoings1,626,800Within1year0.6%
GoldenIcewineValleyInternalincomingsandoutgoings774,832Within1year0.3%
Total--268,468,500--97.5%

6)AccountsreceivablerelatedtogovernmentalsubsidyNil

7)OtheraccountsreceivablederecognizedduetotransferoffinancialassetsNil

8)OtheraccountsreceivabletransferredandincludedinassetsandliabilitiesNil

17.3Long-termequityinvestment

Unit:Yuan

Item

ItemEndingbalanceBeginningbalance
BookbalanceImpairmentreserveBookvalueBookbalanceImpairmentreserveBookvalue
Investmentinsubsidiaries7,437,422,6217,437,422,6217,432,422,6217,432,422,621
Investmentinassociatedenterprisesandjointventures
Total7,437,422,6217,437,422,6217,432,422,6217,432,422,621

17.3.1Investmentinsubsidiaries

Unit:Yuan

InvestedunitBeginningbalance(bookvalue)IncreaseanddecreaseinthisperiodEndingbalance(bookvalue)Endingbalanceofprovisionforimpairment
IncreaseininvestmentDecreaseininvestmentProvisionforimpairmentaccruedOthers
XinjiangTianzhu60,000,00060,000,000
KylinPackaging23,176,06323,176,063
ChangyuChateau28,968,10028,968,100
PioneerInternational3,500,0003,500,000
NingxiaGrowing36,573,24736,573,247
NationalWine2,000,0002,000,000
IcewineValley30,440,50030,440,500
BeijingChateau588,389,444588,389,444
SalesCompany7,200,0007,200,000
LangfangSales100,000100,000
LangfangCastel19,835,73019,835,730
WineSales4,500,0004,500,000
ShanghaiMarketing300,000300,000
BeijingMarketing850,000850,000
JingyangSales100,000100,000
JingyangWine900,000900,000
NingxiaWine222,309,388222,309,388
NingxiaChateau453,463,500453,463,500
ChateauTinlot212,039,586212,039,586
ShiheziChateau812,019,770812,019,770
Chang’anChateau803,892,258803,892,258
Research,Development&ManufactureCompany3,288,906,4453,288,906,445
HuanrenWine22,200,00022,200,000
WineSalesCompany5,000,0005,000,000

Investedunit

InvestedunitBeginningbalance(bookvalue)IncreaseanddecreaseinthisperiodEndingbalance(bookvalue)Endingbalanceofprovisionforimpairment
IncreaseininvestmentDecreaseininvestmentProvisionforimpairmentaccruedOthers
FrancsChamps236,025,404236,025,404
MarquesdelAtrio190,150,544190,150,544
IndomitaWine274,248,114274,248,114
KilikanoonEstate,Australia110,334,528110,334,528
Total7,432,422,6215,000,0007,437,422,621

17.4Operatingincomeandoperatingcost

Unit:Yuan

ItemAmountincurredinthisperiodAmountincurredinpriorperiod
IncomeCostIncomeCost
Mainbusiness132,995,774125,288,367334,207,600292,023,685
Otherbusiness19,954,74117,952,82718,143,40217,546,895
Total152,950,515143,241,194352,351,002309,570,580

17.5Investmentincome

Unit:Yuan

ItemAmountincurredinthisperiodAmountincurredinpriorperiod
Incomefromlong-termequityinvestmentbycostmethod87,474,604264,221,755
Incomefromlong-termequityinvestmentbyequitymethod
Investmentincomefromdisposaloflong-termequityinvestment
Investmentincomeofthefinancialassetsmeasuredattheirfairvaluesandthevariationofwhichisrecordedintothecurrentprofitsandlossesduringtheholdingperiod
Investmentincomegainedfromdisposalofthefinancialassetsmeasuredattheirfairvaluesandthevariationofwhichisrecordedintothecurrentprofitsandlosses
Investmentincomeofheld-to-maturityinvestmentduringtheholdingperiod
Investmentincomeoffinancialassetsheldforsaleduringtheholdingperiod
Investmentincomegainedfromdisposaloffinancialassetsheldforsale

Item

ItemAmountincurredinthisperiodAmountincurredinpriorperiod
Gainsgeneratedfromtheremainingequityremeasuredasperfairvalueafterthelossofcontrol
Total87,474,604264,221,755

18.Supplementarymaterials

18.1Listofnon-currentprofits/lossesinthisperiod

Unit:Yuan

ItemAmountRemark
Profits/lossesondisposalofnon-currentassets39,641
Taxreturn,deductionandexemptionapprovedbeyondtheauthorityorwithoutformalapprovaldocument
Governmentalsubsidyincludedinthecurrentprofits/losses(excludingthosecloselyrelatedtotheenterprisebusinessandenjoyedinaccordancewiththeunifiedstandardquotaorrationofthestate)49,780,231
Paymentforuseoffundsbynon-financialenterprisesincludedinthecurrentprofits/losses
Incomeobtainedwhentheinvestmentcostobtainedbytheenterprisefromsubsidiaries,joint-runbusinessandjointventureislessthanthefairvalueofthenetidentifiableassetsobtainedfromtheinvestedunitswhentheinvestmentismade
Profits/lossesonexchangeofnon-monetaryassets
Profits/lossesonentrustingotherpeopletomakeinvestmentormanageassets
Assetimpairmentprovisionaccruedduetoforcemajeuresuchasnaturaldisaster
Profits/lossesondebtrestructuring
Enterprisereorganizationexpensessuchasstaffingexpenditureandintegrationexpenses,etc.
Profits/lossesonthosebeyondthefairvaluegeneratedfromtransactionswithunfairtransactionprice
Currentnetprofits/lossesonsubsidiariesacquiredfromabusinesscombinationundercommoncontrolfromthebeginningtotheconsolidationdate

Item

ItemAmountRemark
Profits/lossesoncontingenciesirrelatedtothenormalbusinessoftheCompany
Profits/lossesonchangesoffairvalueoftradablefinancialassets,derivativefinancialassets,tradablefinancialliabilitiesandderivativefinancialliabilities,andinvestmentincomefromdisposaloftradablefinancialassets,derivativefinancialassets,tradablefinancialliabilities,derivativefinancialliabilitiesandotherinvestmentincreditor'srights,excludingeffectivehedgingoperationsrelevanttothenormalbusinessoftheCompany
Transfer-backofaccountsreceivablewithsingleimpairmenttestandprovisionforimpairmentofcontractassets
Profits/lossesonexternalentrustedloans
Profits/lossesonfairvaluechangesofinvestmentrealestatewithfairvaluemodeforfollow-upmeasurement
Influenceoftheone-timeadjustmentofthecurrentprofits/lossesinaccordancewithtaxandaccountinglawsandregulationsonthecurrentprofits/losses
Trusteefeeincomefromentrustedoperation
Othernon-operatingincomeandexpenditurebesidestheaboveitems3,814,957
Otherprofits/lossesconformingtothedefinitionofnon-currentprofits/losses
Minus:Influencedamountofincometax13,221,932
Influencedamountofminorityshareholders’equity144,174
Total40,268,723--

18.2Returnonnetassetsandearningspershare

ProfitincurredinthisperiodWeightedaveragereturnonnetassetsEarningspershare
BasicEPS(Yuan/Share)DilutedEPS(Yuan/Share)
NetprofitattributabletocommonshareholdersoftheCompany2.96%0.450.45
NetprofitattributabletocommonshareholdersoftheCompanydeductingnon-incidentalprofits/losses2.57%0.390.39

18.3Accountingdatadifferenceunderdomesticandforeignaccountingstandard

18.3.1Netprofits&netassetsdifferencedisclosedinthefinancialreportaccordingtotheinternationalaccountingstandardandChineseaccountingstandard

Unit:Yuan

Netprofits

NetprofitsNetassets
AmountincurredinthisperiodAmountincurredinpriorperiodEndingbalanceBeginningbalance
InaccordancewiththeChineseaccountingstandard307,035,572603,403,78910,131,863,83110,308,910,198
Item&amountadjustedinaccordancewiththeinternationalaccountingstandard:
Inaccordancewiththeinternationalaccountingstandard307,035,572603,403,78910,131,863,83110,308,910,198

XII.ReferenceDocuments

(1)Theoriginalof2020Semi-annualReportautographedbythechairman.

(2)TheFinancialStatementsautographedandsignedbythechairman,chiefaccountantandaccountantsincharge.

(3)TheProspectusandPublicOfferingAnnouncementforStockBin1997;TheProspectusandTheShares’Change&PublicOfferingAnnouncementofStockAforStockAin2000.

(4)TheoriginalsofalldocumentsandannouncementsthattheCompanymadepublicduringthereportperiodinthenewspapersdesignatedbyChinaSecuritiesRegulatoryCommission.

YantaiChangyuPioneerWineCo.,Ltd.

BoardofDirectorsAugust28

th,2020


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