Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
2018 Annual Report
April 2019
Section I Important Statements, Contents and Definitions
The Board of Directors, Board of Supervisors, directors, supervisors and senior management ofJiangsu Yanghe Brewery Joint-Stock Co., Ltd. (hereinafter referred to as the Company) herebyguarantee that the information presented in this report is free of any false records, misleadingstatements or material omissions, and shall individually and together be legally liable for truthfulness,accuracy and completeness of its contents.
Mr. Wang Yao, responsible person for the Company, Mr. Cong Xuenian, responsible person foraccounting work and Mr. Yin Qiuming, responsible person for the Company’s financial affairs(Accounting Supervisor) have warranted that the financial statements in this report are true andcomplete.
All directors all attended the board meeting to deliberate this report.
The future plans and some other forward-looking statements mentioned in this report shall not beconsidered as virtual promises of the Company to investors. Therefore investors are kindly reminded topay attention to possible investment risks.
In the annual report, the risks and countermeasures in the operation of the company are described indetail (see 9.Outlook for the future development of the Company in Section IV Performance Discussionand Analysis). Investors are kindly reminded to pay attention to possible investment risks.
The profit distribution plan approved by the board of directors: based on 1,506,988,000 shares, a cashdividend of CNY 32.00 will be distributed for every 10 existing shares held, 0 shares of bonus shares(tax inclusive), and reserves would not be converted into share capital.
The company’s Chinese 2018 Annual Report was publicly disclosed on the ShenzhenStock Exchange and Juchao Info Net (www.cninfo .com.cn) on 30 April 2019. If there isany variances between this English version and the Chinese one, please refer to the latter.
Contents
Section I Important Statements, Contents and Definitions ...... 2
Section II Company Profile and Key Financial Results ...... 5
Section III Business Profile ...... 9
Section IV Performance Discussion and Analysis ...... 12
Section V Significant Events ...... 28Section VI Changes in Shares and Information about Shareholders ..... 58Section VII Preference Shares ...... 66
Section VIII Profiles of Directors, Supervisory, Senior Management andEmployees ...... 67
Section IX Corporate Governance ...... 77
Section X Information about Corporate Bond ...... 85
Section XI Financial Report ...... 86
Section XII Documents Available for Preference ...... 220
Definitions
Term | Reference | Definition |
The Company, this Company, Yanghe Joint-Stock | Refer to | Jiangsu Yanghe Brewery Joint-Stock Co., Ltd. |
Yanghe Group, Controlling shareholder | Refer to | Jiangsu Yanghe Group Co.,Ltd. |
The current year, In the reporting period | Refer to | 1 Jan. 2018 to 31 Dec. 2018 |
The report | Refer to | 2018 Annual Report |
Yuan, Ten thousand yuan, A hundred million yuan | Refer to | CNY 0.00, CNY 10,000,CNY 10,000,000.00 |
The shareholders' meeting, the board of directors, the board of supervisors | Refer to | The shareholders' general meeting, the board of directors and the board of supervisors of the Company |
Articles of incorporation | Refer to | Articles of incorporation of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd. |
SSE | Refer to | Shenzhen Stock Exchange |
SRC,CSRC | Refer to | China Securities Regulatory Commission |
SASAC of Suqian | Refer to | State-owned Assets Supervision and Administration Commission of Suqian |
Jiangsu Suya, Suya Jincheng, Accounting firm | Refer to | Jiangsu Suya Jincheng CPA LLP |
Blue Alliance | Refer to | Jiangsu Blue Alliance Joint-Stock Co., Ltd. |
Yanghe Branch of the Company | Refer to | Jiangsu Yanghe Brewery Joint-Stock Co., Ltd. Yanghe Branch |
Siyang Branch of the Company | Refer to | Jiangsu Yanghe Brewery Joint-Stock Co., Ltd. Siyang Branch |
Shuanggou Distillery | Refer to | Jiangsu Shuanggou Distillery Stock Co.,Ltd. |
Guijiu Company | Refer to | Guizhou Guijiu Co., Ltd. |
Lihuacun Liquor | Refer to | Hubei Lihuacun Liquor Industry Co., Ltd. |
Section II Company Profile and Key Financial Results
1. Corporate information
Stock abbreviation | Yanghe Joint-Stock | Stock code | 002304 |
Stock exchange where the shares of the Company are listed | Shenzhen Stock Exchange | ||
Name of the Company in Chinese | 江苏洋河酒厂股份有限公司 | ||
Abbr. of the Company name in Chinese | 洋河股份 | ||
Name of the Company in English (if any) | Jiangsu Yanghe Brewery Joint-Stock Co., Ltd. | ||
Abbr. of the Company name in English (if any) | Yanghe | ||
Legal representative | Wang Yao | ||
Registered address | No.118 Middle Avenue, Yanghe Town, Suqian City, Jiangsu Province, China | ||
Postal code | 223800 | ||
Business address | No.118 Middle Avenue, Yanghe Town, Suqian City, Jiangsu Province, China | ||
Postal code | 223800 | ||
Company website | http://www.chinayanghe.com | ||
yanghe002304@vip.163.com |
2. Contact us
Company Secretary | Representative for Securities Affairs | |
Name | Cong Xuenian | Lu Hongzhen, Sun Dali |
Address | No. 18, Feng Hui Avenue, Yuhua Economic Development Zone, Nanjing | |
Tel. | 025-52489218 | 025-52489218 |
Fax | 025-52489218 | 025-52489218 |
yanghe002304@vip.163.com | yanghe002304@vip.163.com |
3. Information disclosure and place where the annual report is kept
Newspaper designated by the Company for information disclosure | Securities Times, Shanghai Securities Times, China Securities Journal, Securities Daily |
Website designated by CSRC for the publication of the Annual Report | http://www. cninfo.com.cn |
Place where the Annual Report of the Company is kept | shareholder reading room, No.118 Middle Avenue, Yanghe Town, Suqian City, Jiangsu Province |
4. Company registration and alteration
Organization code | 9132000074557990XP |
Changes in main business activities since the Company was listed (if any) | None |
Changes of controlling shareholders of the Company (if any) | None |
5. Other relevant information
Accounting firm engaged by the Company
Name of the accounting firm | Jiangsu Suya Jincheng CPA LLP |
Business address of the accounting firm | 22-23/F., Central International Plaza, NO.105-6 North Zhongshan Road, Nanjing. |
Name of accountants for writing signature | Xu Xuzhen, Kan Baoyong |
Sponsors engaged by the Company to continuously perform its supervisory function during thereporting period? Applicable √ N/A?
Financial adviser engaged by the Company to continuously perform its supervisory function during thereporting period? Applicable √ N/A?
6. Key accounting data and financial indicators
Whether the Company performed a retroactive adjustment to or restatement of accounting data due tochanges of accounting policies and correction of accounting errors? Yes √ No
2018 | 2017 | YoY Change | 2016 | |
Operating revenues (CNY) | 24,159,801,994.68 | 19,917,942,238.16 | 21.30% | 17,183,109,620.08 |
Net profits attributable to shareholders of the Company (CNY) | 8,115,189,794.69 | 6,627,169,959.16 | 22.45% | 5,827,168,870.88 |
Net profits attributable to share holders of the Company before non-recurring gains and losses (CNY) | 7,369,331,605.77 | 6,136,386,923.71 | 20.09% | 5,406,580,095.74 |
Net cash flows from operating activities (CNY) | 9,056,748,816.28 | 6,883,169,799.31 | 31.58% | 7,405,044,600.62 |
Basic earnings per share (CNY/share) | 5.3850 | 4.3976 | 22.45% | 3.8668 |
Diluted earnings per share (CNY/share) | 5.3850 | 4.3976 | 22.45% | 3.8668 |
Weighted average ROE | 25.95% | 24.08% | 1.87% | 24.01% |
At the end of 2018 | At the end of 2017 | YoY Change | At the end of 2016 | |
Total assets (CNY) | 49,563,767,816.22 | 43,258,140,702.38 | 14.58% | 38,804,062,249.63 |
Net assets attributable to shareholders of the Company (CNY) | 33,644,530,266.23 | 29,515,040,285.72 | 13.99% | 26,052,771,070.00 |
7. Differences in accounting data under domestic and overseas
accounting standards
7.1. Differences in the net profits and net assets disclosed in the financial reportsprepared under the international and China accounting standards
? Applicable √ N/A?No such differences for the reporting period.
7.2. Differences in the net profits and net assets disclosed in the financial reportsprepared under the outbound and China accounting standards
? Applicable √ N/A?No such differences for the reporting period.
8. Key financial results by quarter
Unit: CNY
Q1 | Q2 | Q3 | Q4 | |
Operating revenues | 9,537,587,047.10 | 5,004,992,728.51 | 6,423,080,855.11 | 3,194,141,363.96 |
Net profits attributable to shareholders of the Company | 3,475,147,603.50 | 1,529,844,167.72 | 2,033,763,138.67 | 1,076,434,884.80 |
Net profits attributable to shareholders of the Company before non-recurring gains and losses | 3,333,849,279.90 | 1,351,770,013.96 | 1,853,153,948.51 | 830,558,363.40 |
Net cash flows from operating activities | 1,891,759,702.63 | -232,993,935.52 | 4,215,706,857.52 | 3,182,276,191.65 |
Whether there are any material differences between the financial indicators above or their summationsand those which have been disclosed in quarterly or semi-annual reports? Yes √ No
9. Non-recurring profits and losses
√ Applicable ? N/A
Unit: CNY
Item | 2018 | 2017 | 2016 | Note |
Profit or loss from disposal of non-current assets (including the write-off portion of the impairment provision) | 22,203,572.96 | -8,598,844.11 | -5,823,628.96 | |
Government grants recorded in the profit or loss for the current period (except for the government grants closely related to the business of the Company and given at a fixed amount or quantity in accordance with the State's uniform standards) | 59,870,221.67 | 44,745,640.94 | 29,064,221.47 | |
Except for effectively hedging business related to normal business operations of the company, profit or loss arising from the change in the fair value of held-for-trading financial assets and liabilities, as well as investment profit or loss produced from the disposal of held-for-trading financial assets and liabilities and available-for-sale financial assets | 56,995,537.28 | 90,627,738.02 | 128,763,897.76 | Profit from the disposal of available-for-sale financial assets |
Impairment provision reversal of the accounts receivable on which the impairment test is carried out separately | 300,000.00 | 165,859.73 | ||
Other non-operating income and expenditure except above-mentioned items | 27,967,026.98 | 11,559,390.23 | 10,469,328.20 | |
Other profit and loss items that conform to the definition of non-recurring gains and losses | 827,837,138.81 | 516,824,879.08 | 398,923,011.53 | |
Less: Corporate income tax | 248,875,376.58 | 164,658,711.09 | 140,783,607.73 | |
Minority interests (after tax) | 139,932.20 | 17,057.62 | 190,306.86 | |
Total | 745,858,188.92 | 490,783,035.45 | 420,588,775.14 | -- |
Explain the reasons if the Company classifies an item as a non-recurring profit and loss according tothe definition in the Explanatory Announcement No. 1 on Information Disclosure for Companies OfferingTheir Securities to the Public-Non-Recurring Profits and Losses, or classifies any non-recurring profit orloss item mentioned in the said explanatory announcement as a recurring profit/loss item.? Applicable √ N/A?No such cases for the reporting period.
Section III Business Profile
1. Business scope in the reporting period
Whether the Company needs to comply with the requirement disclosure of special industry.NoThe Company is mainly engaged in the production and sales of liquor. The production of liquor adoptssolid-state fermentation, mainly including qu-making, brewing, blending and stocking, packaging and soon. The sales of liquor mainly adopt two modes, namely distribution and retailing. During the reportingperiod, the Company's primary business and business mode had not changed. According to theGuidelines for the Industry Classification of Listed Companies (2012 Revision) issued by CSRC, theCompany belongs to C15 Manufacturing industry of liquor, beverages and refined tea.
The Company is a national large-scale liquor production enterprise. Among the enterprises in the liquorindustry, the Company is the only one which has two Chinese time-honored brands, two famousChinese liquor, namely Yanghe and Shuanggou and six Chinese well-known trademarks. The leadingproducts of the Company are a series of mellow liquor including Dream Blue, Yanghe Spirit Classic,Shuanggou Zhenbaofang, Yanghe Daqu, Shuanggou Daqu, which have high brand awareness andreputation throughout the country.
During the reporting period, the development of liquor industry keeps growing in the fierce competition.High-end and secondary high-end Liquor both show obvious development advantages. Theconcentration and high-end orientation of the industry has accelerated significantly. According to thedisclosed liquor industry periodic report, the Company's revenue and profit scale ranked the third placein the liquor industry.
2. Significant changes in the main assets
2.1 .Significant changes in the main assets
Main assets | Reasons for any significant change |
Construction in progress | A decrease of 34.30% YoY was mainly due to construction in progress reaching the intended use condition and carried forward to fixed assets |
Cash and cash equivalents | An increase of 106.42% YoY was mainly due to the increase of sales revenue in the current period and the increase of net cash flow generated from operating activities. |
Non-current assets due within one year | An increase of 102.83% YoY was mainly due to the increase of trust financial products due within one year by the end of this period. |
Other current assets | An increase of 30.29% YoY was mainly due to the increase of short- |
2.2 .Main assets overseas
? Applicable √ N/A
3. Analysis of core competitiveness
Whether the Company needs to comply with disclosure requirements of special industriesNo
The Company has obvious advantages in natural environment, quality technology, brand influence,marketing network and so on. It has formed the unique core competitiveness of the Company. The corecompetitiveness of the Company has not changed during the reporting period.
3.1 Natural environment advantage
The Company is located in Suqian, the capital of liquor with three rivers, two lakes and one wetland’. Itis one of the three famous wetlands in the world, which enjoys equal popularity with the Scotch whiskyproducing area and the French Cognac producing area. It is the only natural oxygen bar in Jiangsuprovince without acid rain. The long history and unique ecological environment provide a good sourceof water, soil and air for production of liquor and spirits. Especially the microorganism condition issignificantly beneficial to producing liquor and spirits. The Yanghe brewing originated in the Sui andTang Dynasties, flourished in the Ming and Qing Dynasties. It had been sold in Jianghuai area duringthe period of Yong Zheng of Qing Dynasty. It has a good reputation that 'Dainty taste derived fromfortune spring and Liquor Ocean, which makes Yanghe rank first place in Jianghuai area'. Shuanggoualongside Yanghe has been praised as the origin of Chinese natural liquor by domestic and overseas
experts due to the discovery of drunken ape fossils in Xiacaowan.
3.2 Quality advantage
Considering the diversification and individuation of consumption demand, the Company took the lead inbreaking the traditional classification of liquor flavor. The Company classifies the liquor by taste and putemphasis on taste value. The Company strengthens the mellowness of liquor, puts forward the newstyle of the mellow liquor quality, and deeply meets the core demand of the target consumers. Itsuccessfully establishes the system framework of new production technology and mellownessmechanism of mellow liquor catering to market consumption. In June 2008, 'Mellowness' was firstwritten into the national standard in China Protected Geographical Indication Product- Yanghe Daqu( Standard No. GB/T220406-2008).
3.3 Talent advantage
The Company has 31Masters of Chinese Liquor, including 2core members of National liquor jury, 69Provincial Liquor Tasting Committee members and 1845 technicians. The Company also has a number
of national and provincial technical research and development platforms. The obvious advantage oftechnical talents provides technical support for the continuous improvement of the quality. Dream Blueand Mellow Sujiu, the representative products of mellow liquor, have won the national quality awards,such as National Best Quality Award, Liquor and Spirits Design Award and National Liquor and SpiritsSensory Quality Award. In 2018, in the national liquor taster contest sponsored by China AlcoholicDrinks Association, Chen Li, a contestant from the Company, stood out from other contestants, rankedthe first place in the contest. It highlights the strong talent advantage of the Company again.
3.4 Brand advantage
The Company, as one of the old eight famous liquor enterprises, is the only one which has two Chinesetime-honored brands, the two famous Chinese liquor, namely Yanghe and Shuanggou, and theCompany has six Chinese well-known trademarks, including Yanghe, Shuanggou, Yanghe SpiritClassic, Zhenbaofang, Dream Blue, and Su.The company ranked the third place in 2018Top 50 MostValuable Spirits Brands published by Brand Finance, a world-famous branded business valuationconsultancy, with a brand value of $7.795 billion. In 2018, with brand worth CNY45.615 billion, theCompany ranked the top 86 in China's 500 Most Valuable Brands released by World Brand Lab.
3.5 Marketing network advantage
The Company has a marketing team with the largest number of personnel, the latest concept and thestrongest executive force in the industry . The Company has cooperated with nearly 10,000 distributors,has more than 30 thousand promotion employees, and continues to enhance the deep distributionmode. At present, the Company has the most powerful marketing network platform in the Chineseliquor industry. It has penetrated into every county and city throughout the country. High speed channelhas been basically completed, laying a solid foundation for market expansion and extension of thecategory in the future. At the same time, as a traditional enterprise, the Company has also insisted onexploring new marketing mode, and has made certain achievements in Internet application innovation.
Section IV Performance Discussion and Analysis
1. Overview
In 2018, the Company insisted on Xi Jinping Thought on Socialism with Chinesecharacteristics for a New Era as the guidance. The Company deepened theimplementation of the "Six good" strategic thinking, comprehensively promoted thedeployment of the “One Six Eight” Strategy, effectively implemented all decisions andwork, and promoted high-quality and sustainable development.
First, "Good industrial policy" leads the way and casts glory. In 2018, the Companyfocused on "development and transformation" and "consumption upgrading",comprehensively strengthened innovation and execution, and continuously improvedcomprehensive competitiveness. The annual operating revenue was CNY 24.16 billion,up 21.3% year on year. The net profit attributable to shareholders of the listed companywas CNY 8.115 billion, up 22.45% year on year. Dream Blue sales strongly climbed andDream Blue high-end brand image was further improved.
Second, "Good products” shows artisan skills. In 2018, the Company actively promotedhealth, experience and other key technical changes, further accelerated the speed ofnew technologies, new processes and application of new achievements. The base liquorquality comprehensively outstripped the recorded levels with steady upgrade of theleading products such as Celestial Blue and Oceanic Blue. It obtained recognition andfavor from consumers and industry experts. The Company was selected into"2018 Top500 World Most Valuable Brands”, up 175 places from the previous year.
Third, "Good stories" spreads widely. In 2018, the Company promoted theimplementation of the "ten thousand people brand plan", focused on hot events andtheme activities, innovated brand communication forms. Brand stories deeply rooted inthe hearts of the people, which further enhanced the brand occupation; Dream Bluebrand appeared in the "Shanghai Cooperation Summit in Qingdao", walked into OlympicWinter Games, and its fragrance filled in Buckingham Palace. It helped the third "ReadingChina" international conference, and built a bridge of friendship with mellowness.
Fourth, "Good channels" sharpens the ambition. In 2018, the Company promoted theperfection of distribution channels. Group purchasing and family banquets werecontinuously expanded. “Dream gathering” and other activities were continuouslydeepened. Meanwhile, price control and quota management were continuouslystrengthened. Rigid implementation and efficient implementation were effectivelypromoted. It helped the overall improvement of the market atmosphere.
Fifth, "Good self" firmly enhances self-confidence. In 2018, a group of marketingrepresentatives who have successfully cultivated the market and overcome difficulties,young and promising technical representatives who are determined to succeed, andaltruistic brewers who have inherited the ingenuity stood out from the Company. In 2018,in the national liquor taster contest, Chen Li won the champion and the Company's teamwon the first place. The Company occupied four places in the Top Ten, which showedthe strong technical strength. The activities such as cellar opening festival and sealingceremony were highly praised by the guests inside and outside the industry, andShuanggou Distillery was awarded the title of "world famous wetland liquor".
Sixth, "Good mechanism" stimulates vitality. In 2018, the Company realized the fullcoverage of spontaneous work, steadily improved work efficiency and quality, andsignificantly enhanced the employees' awareness of initiative. Annual perfection projectachieves cost reduction of CNY 22.32 million. The continuous improvement of all staffrealized financial income of CNY 43.58 million. The logistics system was accuratelyoperated to ensure continuous optimization, which fully achieved the goal of "no productsout of stock and no overstock".
2. Analysis of main business
2.1. Overview
Same with the contents presented in “1.Overview” of this section.
2.2. Revenues and cost of sales2.2.1. Breakdown of operating revenues
Unit:CNY
2018 | 2017 | YoY Change | |||
Amount | As a percentage of operating revenues | Amount | As a percentage of operating revenues | ||
Total | 24,159,801,994.68 | 100% | 19,917,942,238.16 | 100% | 21.30% |
By business segment | |||||
Liquor | 23,186,902,149.00 | 95.97% | 19,468,365,663.88 | 97.74% | 19.10% |
Others | 972,899,845.68 | 4.03% | 449,576,574.28 | 2.26% | 116.40% |
By product | |||||
Liquor | 22,913,294,724.76 | 94.84% | 19,183,149,960.51 | 96.31% | 19.44% |
Wine | 273,607,424.24 | 1.13% | 285,215,703.37 | 1.43% | -4.07% |
Others | 972,899,845.68 | 4.03% | 449,576,574.28 | 2.26% | 116.40% |
By geographical segment | |||||
Jiangsu | 12,326,360,162.73 | 51.02% | 10,630,640,220.89 | 53.37% | 15.95% |
Outside Jiangsu | 11,833,441,831.95 | 48.98% | 9,287,302,017.27 | 46.63% | 27.42% |
2.2.2. Business segment, products or geographical segmentscontributing over 10% of the operating revenues or profits
√ Applicable ? N/AWhether the Company needs to comply with disclosure requirements of special industryNo
Unit:CNY
Operating revenues | Cost of sales | Gross profit margin | YoY change of operating revenue | YoY change of cost of sales | YoY change of gross profit margin | |
By business segment | ||||||
Liquor | 23,186,902,149.00 | 5,527,417,445.92 | 76.16% | 19.10% | -12.06% | 8.45% |
By product | ||||||
Liquor | 22,913,294,724.76 | 5,392,639,632.08 | 76.47% | 19.44% | -12.35% | 8.54% |
By geographical segment |
Jiangsu
Jiangsu | 11,612,135,696.98 | 2,984,613,499.51 | 74.30% | 13.52% | -13.71% | 8.11% |
Outside Jiangsu | 11,574,766,452.02 | 2,542,803,946.41 | 78.03% | 25.28% | -10.06% | 8.63% |
Under the circumstances that the statistical standards for the Company’s main businessdata adjusted in the reporting period, the Company’s main business data in the currentone year is calculated based on adjusted statistical standards at the end of the reportingperiod? Applicable √ N/A
2.2.3. Whether revenue from physical sales is higher than servicerevenue
√ Yes □ No
By business segment | Item | Unit | 2018 | 2017 | YoY Change |
Liquor | Sale volume | ton | 214,051.34 | 215,950.8 | -0.88% |
Output volume | ton | 211,606.75 | 220,136.14 | -3.87% | |
Stock | ton | 24,863.94 | 27,308.53 | -8.95% | |
Wine | Sale volume | ton | 5,288.96 | 5,212.34 | 1.47% |
Output volume | ton | 6,315.57 | 5,283.01 | 19.54% | |
Stock | ton | 1,360.62 | 334.01 | 307.36% |
Reason for any over 30% YoY movements in the data above√ Applicable ? N/AThe increase of 307.36% YoY in inventory of wine was mainly due to the wine importedwith original packaging and stock in advance by the end of this period.
2.2.4. Execution of significant sales contracts in the reporting period
? Applicable √ N/A
2.2.5. Breakdown of cost of sales
By business and product segment
Unit:CNY
By business segment | Item | 2018 | 2017 | YoY Change | ||
Amount | As a percentage of cost of sales | Amount | As a percentage of cost of sales | |||
Liquor | 5,527,417,445.92 | 87.00% | 6,285,763,095.97 | 94.08% | -12.06% |
Unit:CNY
By product segment | Item | 2018 | 2017 | YoY Change | ||
Amount | As a percentage of cost of sales | Amount | As a percentage of cost of sales | |||
Liquor | Raw materials | 4,397,294,002.46 | 69.21% | 4,243,329,762.51 | 63.51% | 3.63% |
Liquor | Labor costs | 597,717,848.21 | 9.41% | 541,519,432.79 | 8.11% | 10.38% |
Liquor | Fuels and energy | 246,871,521.50 | 3.89% | 212,403,387.26 | 3.18% | 16.23% |
Liquor | manufacturing overhead | 280,144,635.22 | 4.41% | 263,652,646.09 | 3.95% | 6.26% |
Liquor | Consumption tax and | 5,389,438.53 | 0.08% | 1,024,857,867.32 | 15.34% | -99.47% |
surcharges
Note:
The change of consumption tax paying method from withholding and remitting tax bytrustee to direct payment by the Company required by the government took effect fromSeptember 1, 2017. In addition, the accounting method of consumption tax changed fromthe cost of production of manufacturing consignment to the taxes and surchargesgenerated from producing and selling liquor by the company. It results in that theconsumption tax and additional proportion of alcohol operating costs have been greatlyreduced in the reporting period.
2.2.6.Changes in the scope of the consolidated financial statements forthe reporting period
√ Yes ? NoThe subsidiary newly consolidated in current year
surchargesName
Name | Measure of acquisition |
Jiangsu Yanghe Investment Management Co.,Ltd. | Newly establishment |
Su Wine Group Nanjing Operation Management Co.,Ltd. | Newly establishment |
Jiangsu Zhongshiji Wine Industry Co.,Ltd. | Newly establishment |
The subsidiary corporation no longer consolidated in current year
Name | Reason |
Sihong Shuangtai Package Co.,Ltd. | Liquidation and cancellation |
Nanjing Huiteng Media Technology Co.,Ltd. | Merger and cancellation |
2.2.7. Major changes in the business, products or services in thereporting period
? Applicable √ N/A
2.2.8. Main customers and suppliers
Sales to major customers of the Company
Total sales from top five customers(CNY) | 1,026,614,241.91 |
Total sales from top five customers as a percentage of the total sales | 4.24% |
Total sales from related parties among top five customers as a percentage of the total sales | 0.00% |
Information on top five customers
No. | Customer | Sales amount(CNY) | As a percentage of the total sales for the year |
1 | Customer A | 372,603,918.77 | 1.54% |
2 | Customer B | 278,972,563.82 | 1.15% |
3 | Customer C | 147,781,342.09 | 0.61% |
4 | Customer D | 114,297,391.06 | 0.47% |
5 | Customer E | 112,959,026.17 | 0.47% |
Total | -- | 1,026,614,241.91 | 4.24% |
Other information on major customers? Applicable √ N/A
Major suppliers of the Company
Total purchase from top five suppliers(CNY) | 1,359,969,302.30 |
Total purchase from top five suppliers as a percentage of the total sales | 32.37% |
Total purchase from related parties among top five suppliers as a percentage of the total purchase | 0.00% |
Information on top five suppliers
No. | Supplier | Purchases(CNY) | As a percentage of the total purchase for the year |
1 | Supplier A | 480,481,683.60 | 11.44% |
2 | Supplier B | 266,134,208.40 | 6.33% |
3 | Supplier C | 254,419,918.30 | 6.06% |
4 | Supplier D | 196,368,731.20 | 4.67% |
5 | Supplier E | 162,564,760.80 | 3.87% |
Total | -- | 1,359,969,302.30 | 32.37% |
Other information on major suppliers? Applicable √ N/A
2.3. Expense
Unit:CNY
2018 | 2017 | YoY Change | Reason for any significant change | |
Selling and distribution expenses | 2,561,401,628.22 | 2,387,447,107.05 | 7.29% | |
General and administrative expenses | 1,704,265,102.61 | 1,506,402,859.73 | 13.13% | |
Finance expenses | -65,138,636.76 | -33,912,331.47 | -92.08% | Increased cash and cash equivalents leads to increased interest income on deposits in the current period, which makes finance expenses decline. |
R&D expenses | 27,565,217.63 | 25,745,247.20 | 7.07% |
2.4. R&D input
√ Applicable ? N/A
During the reporting period, the Company established the microbiological database ofbrewing microecology in Yanghe region, promoted the in-depth research on the healthysubstances of mellow liquor, optimized the production process parameters of raw liquor,established the new selection method, and realized the great improvement of the liquorbody fullness and mellow thickness. At the same time, in the aspect of intelligent brewing,the Company has made top-level design in advance and established six standardprocess modules to promote the Company's transformation to intelligent manufacturing.
During the reporting period, the Company won 6 provincial science and technologyawards and 2 invention patents. Two scientific and technological achievements, such as"Dream-blue handcraft class health effect research and application", have passed thenational appraisal, and the technical level has been highly evaluated by academiciansand experts, which is of great significance to the industry development and liquor healthresearch.
Information about R&D input
2018 | 2017 | YoY Change | |
Number of R&D personnel | 393 | 348 | 12.93% |
R&D personnel as a percentage in total employees | 2.57% | 2.32% | 0.25% |
R&D input(CNY) | 32,880,110.63 | 37,807,634.80 | -13.03% |
R&D input as a percentage in operating revenues | 0.14% | 0.19% | -0.05% |
Capitalized R&D input(CNY) | 5,314,893.00 | 12,062,387.60 | -55.94% |
Capitalized R&D input (as a) percentage in total R&D input | 16.16% | 31.90% | -15.74% |
Reasons for any significant YoY change in the percentage of the R&D input in theoperating revenues? Applicable √ N/A
Reason for any sharp variation in the percentage of the capitalized R&D input andrationale? Applicable √ N/A
2.5. Cash flows
Unit:CNY
Item | 2018 | 2017 | YoY Change |
Subtotal of cash inflows from operating activities | 29,598,814,116.52 | 24,139,022,765.44 | 22.62% |
Subtotal of cash outflowsfrom operating activities
Subtotal of cash outflows from operating activities | 20,542,065,300.24 | 17,255,852,966.13 | 19.04% |
Net cash flows from operating activities | 9,056,748,816.28 | 6,883,169,799.31 | 31.58% |
Subtotal of cash inflows from investing activities | 35,262,332,061.45 | 30,970,188,282.84 | 13.86% |
Subtotal of cash outflows from investing activities | 38,611,674,185.80 | 35,131,210,561.81 | 9.91% |
Net cash flows from investing activities | -3,349,342,124.35 | -4,161,022,278.97 | 19.51% |
Subtotal of cash inflows from financing activities | 1,500,000.00 | ||
Subtotal of cash outflows from financing activities | 3,842,859,037.00 | 3,417,116,090.61 | 12.46% |
Net cash flows from financing activities | -3,841,359,037.00 | -3,417,116,090.61 | -12.42% |
Net increase in cash and cash equivalents | 1,865,395,431.79 | -706,674,482.79 | 363.97% |
Explanation of why the data above varied significantly√ Applicable □ N/A
The increase of 31.58% YoY of net cash flows from operating activities was mainly dueto the increase of sales revenue in the current period which resulted in the increase ofcash inflows from operating activities is more than cash outflows from operating activities.
The increase of 363.97% YoY of net increase in cash and cash equivalent was mainlydue to the increase of sales revenue in the current period which resulted in the increaseof net cash flows from operating activities, and the decrease of net cash flows frominvesting activities compared to last year.
Explanation of main reasons leading to the material difference between net cash flowsfrom operating activities during the reporting period and net profit for the year? Applicable √ N/A
3. Analysis of non-corebusiness
√ Applicable ? N/A
Unit:CNY
Amount | As a percentage of total profits | Formation reasons | Sustainability | |
Investment income | 918,292,794.49 | 8.47% | Mainly due to the investment income generated by financial management and the investment income | No |
generated by theholding and disposal ofavailable-for-salefinancial assets
4.Assets and liabilities
4.1 Significant changes of asset items
Unit:CNY
generated by theholding and disposal ofavailable-for-salefinancial assets
As at the end of 2018 | As at the end of 2017 | Change in percentage | Explanation about any significant changes | |||
Amount | As a percentage of total assets | Amount | As a percentage of total assets | |||
Cash and cash equivalents | 3,615,348,307.97 | 7.29% | 1,751,452,876.18 | 4.05% | 3.24% | |
Accounts receivable | 5,419,314.60 | 0.01% | 8,485,382.83 | 0.02% | -0.01% | |
Inventories | 13,892,118,587.74 | 28.03% | 12,861,503,434.11 | 29.73% | -1.70% | |
Long-term equity investments | 9,423,328.82 | 0.02% | 1,980,046.94 | 0.00% | 0.02% | |
Fixed assets | 7,833,665,282.19 | 15.81% | 8,249,559,468.26 | 19.07% | -3.26% | |
Construction in progress | 154,535,104.82 | 0.31% | 235,219,521.41 | 0.54% | -0.23% | |
Long-term borrowings | 109,088.00 | 0.00% | 145,452.00 | 0.00% | 0.00% |
4.2 Assets and liabilities measured at fair value
√Applicable □ N/A
Unit:CNY
Item | Opening balance | Changes in fair value recognized in profit or loss | Changes in the cumulative fair value recorded into equity | Provision for impairment | Amount of purchase | Amount of sale | Closing balance |
Financial Asset | |||||||
3.Available-for-sale financial assets | 0.00 | -140,593,969.30 | -140,593,969.30 | 425,350,132.53 | 284,756,163.23 | ||
Subtotal of financial assets | 0.00 | -140,593,969.30 | -140,593,969.30 | 425,350,132.53 | 284,756,163.23 | ||
Total | 0.00 | -140,593,969.30 | -140,593,969.30 | 425,350,132.53 | 284,756,163.23 | ||
Financial liabilities | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
Whether measurement attribution of main assets changes significantly for the year? Applicable √ N/A
4.3 Restricted asset rights as of the end of this reporting period
No
5. Investment
5.1. Total investment
√ Applicable ? N/A
Investment made in the reporting
period(CNY)
Investment made in the reporting period(CNY) | Investment made in the prior year(CNY) | YoY Change |
1,035,447,337.86 | 636,340,416.13 | 62.72% |
5.2. Significant equity investment made in the reporting period
? Applicable √ N/A
5.3. Significant non-equity investment ongoing in the reporting period
? Applicable √ N/A
5.4. Financial assets at a fair value
√Applicable ? N/A
Unit:CNY
Category of
securities
Category of securities | Initial investment cost | Changes in fair value recognized in profit or loss | Changes in the cumulative fair value recorded into equity | Amount of purchase | Amount of sale | Accumulated investment income | Closing g balance | Capital source |
Stock | 425,350,132.53 | -140,593,969.30 | -140,593,969.30 | 425,350,132.53 | 0.00 | 16,308,806.79 | 284,756,163.23 | Owned fund |
Total | 425,350,132.53 | -140,593,969.30 | -140,593,969.30 | 425,350,132.53 | 0.00 | 16,308,806.79 | 284,756,163.23 | -- |
5.5. Use of fund-raising
? Applicable √ N/ANo such cases in the reporting period
6. Sale of major assets and equity Interests
6.1. Sale of major Assets
? Applicable √ N/ANo such cases in the reporting period
6.2. Sale of major equity Interests
? Applicable √ N/A
7. Analysis of major subsidiaries
√ Applicable ? N/A
Main subsidiaries and joint companies with an over 10% influence on the Company’s net profit
Unit:CNY
Company name
Company name | Company type | Business scope | Registered capital | Total assets | Net assets | Operating revenue | Operating profit | Net profit |
Su Wine Trade Group Limited by Share Ltd | Subsidiary | Wholesaling and retailing of prepackaged food | 334,400,000.00 | 20,919,000,581.47 | 6,304,466,480.18 | 23,255,391,278.03 | 7,162,512,056.56 | 5,451,435,460.35 |
Jiangsu Shuanggou Distillery Stock Co.,Ltd. | Subsidiary | Production and sales of liquor and spirit | 110,000,000.00 | 5,555,777,196.12 | 1,230,608,893.73 | 1,327,090,626.35 | 795,195,752.50 | 860,986,757.53 |
Jiangsu Shuanggou Liquor Operation Co.,Ltd | Subsidiary | Wholesaling and retailing of prepackaged food | 5,000,000.00 | 3,936,234,566.37 | 996,006,490.09 | 2,989,316,863.12 | 1,310,202,119.41 | 982,914,861.88 |
Acquisition and disposal of subsidiaries during the reporting period√ Applicable □ N/A
Subsidiary name | How subsidiary was acquired or disposed during the reporting period | Impact on overall operation and results(CNY) |
Jiangsu Yanghe Investment Management Co.,Ltd. | Establishment | Tiny |
Su Wine Group Nanjing Operation Management Co.,Ltd. | Establishment | Tiny |
Jiangsu Zhongshiji Wine Industry Co.,Ltd. | Establishment | Tiny |
Sihong Shuangtai Package Co.,Ltd. | Liquidation and cancellation | No |
Nanjing Huiteng Media Technology Co.,Ltd. | Merger and cancellation | No |
8. Structured entities controlled by the Company
? Applicable √ N/A
9. Outlook for the future development of the Company
9.1. Analysis of industry situation
First, the liquor industry is developing well. In 2018, benefiting from the expansion andupgrading of consumption and the structural transformation, the liquor industry hasshown a good development trend of steady increase in production and marketing withimproved efficiency and optimized structure. According to the statistics released by theNational Bureau of Statistics, the total output of liquor enterprises above designated sizewas 8,712 thousand liters, up by 3.14% year on year. The accumulated sales revenuereached CNY 536.3 billion, up 12.86% year on year. The cumulative profit reached CNY125 billion, up 29.98% year on year. The liquor industry has entered a new stage ofsteady growth and further optimized its structure.
Second, the pattern of liquor industry gradually formed. In 2018, the competition of liquorindustry market became more intensified. Famous liquor enterprises continuouslystrengthened its competitive advantages in aspects of product, brand, channel andmarket. Whether it is high-end, secondary high-end, middle-end or low-end, theenterprises have gradually achieved nationalization, or formed the representative brandsin each mainstream of consumption level. The development of liquor industry structureand competition situation is gradually formed, and it will be further strengthened in futuremarket competition.
Third, the trend of liquor industry concentration is increased obviously. In 2018, theMatthew effect of liquor industry was highlighted, and leading liquor enterprisescontinued to maintain rapid growth with the growth rate significantly higher than theaverage level of the industry. The total operating revenue and profit of the top threeleading enterprises accounted for 25.70% and 64.22% of the total operating revenue andprofit of liquor enterprises above the designated size, which increased by 2.9% and0.81% respectively in 2017. With the increasing concentration of liquor industry, leadingenterprises are expected to seize more shares in the future market competition.
9.2. Future development strategy and next business plan
(1)Future development strategyIn 2019, the Company will continue to adhere to the "Wu Du Wu Mi" strategy, aiming tobecome the most knowledgeable, most brewing, most selling companies, the mostdedicated, the most professional and the most far-sighted liquor company in the industryThe more long-term development goal is to make the Company become a leader thatcontinuously crosses the life cycle and has a long-lasting satisfactory performance.
(2)2019 business plan
In 2019, facing the complex and changeable development situation, the Company'soverall working idea is to become more stable at the helm and to go far with full sail. Itfully implements the "1246 project", and promotes the high-quality, healthy andsustainable development of the enterprise.
The so-called "1246" project: "1" is to firmly establish a stand. The Company adheres tothe law of brand growth cycle, implements of various strategies with innovation, andpromotes better and faster development of the market.
"2"refers to going all out for two big goals. First, the Company aim to make arevolutionary breakthrough in the mellowness of liquor. Focusing on the in-depthapplication of mellowness mechanism, the Company comprehensively improves theproduct personalization, specialization and post-drinking comfort, which leads the liquormarket consumption trend, and creates the touching and pleasure of consumers. Thesecond goal is to realize a 12%+ year on year increase in 2019 revenue.
"4" refers to the four cores of deliberate transformation. The first is consumptionupgrading. In line with the development trend of consumption upgrading, the Companythinks deeply and studies the consumer psychology, and accurately grasps the directionof consumption upgrading. The second is industry differentiation. The Company seizesthe opportunity of industry differentiation, grabs the terminal consumers, and furtherimproves the market share. Third, information overload. In view of the mediacharacteristics in the information flooding era, the Company conducts in-depth researchand improves the communication efficiency, and tells a good brand and quality storycomprehensively. Fourth high-dimensional competition. The Company finds and entersthe high-dimensional blue sea of competition by means of advantage reengineering,pattern innovation and ecosphere construction.
"6" refers to the six powers of perseverance. One is to achieve the best product force.The Company strives for improvement in quality, breakthroughs in technology, andcharacteristic creation in image, coverage in layout. The Company promotes theapplication of mellowness mechanism, and achieves continuous improvement in mellowquality. Second is to form the deeply-rooted brand power. Focused on new brands, newmarketing, and new content, the Company optimizes the mode of communication anduses of efficient media to create a deeply-rooted brand power, and helps the steadydevelopment of marketing. Third is to shape both offensive and defensive channelselaborately. The Company adheres to taking up more market share in the long run bycreating more incremental amount, and actively does a good job in the high-endbreakthrough. The Company promotes the transformation of channels and createscomprehensive channel perfection. Fourth is to approve the strong and reliablesupporting forces continuously. The Company establishes a more scientific andreasonable assessment system to promote accurate marketing assessment, deepenslong-term management, and improves basic management level comprehensively, so asto provide strong guarantee for the front line of marketing; The fifth is to enhanceinnovation ability to prepare the Company for the future. The Company adheres to a highsense of crisis and advanced planning, with focusing on digital operations, strategicresearch, capital management, supply chain management and other work. It creates anew driving force for enterprise development. Sixth is to form high-spirited state ofcultural power elaborately. The Company strengthens the height of political stand,adheres to the scientific and pragmatic attitude, and stimulates the spirit of striving for thefirst. These works are done for the well-being of the staff, the interests of share holders,
the development of enterprises, making contributions to the society, andcomprehensively sublimating the cultural power of common prosperity and sharing.
(3)Possible risks
First is the risk of macroeconomic uncertainty. International economic environment isunpredictable, and domestic economic downward pressure is still. Adjustment andchange of Liquor industry policy may affect the healthy growth of liquor enterprises.
Second is the risk of intensified market competition. The main competitive enterprisespay more attentions to marketing work, increase investment intensity, strengthen channelconstruction, further develop the terminal, which makes the market competition moreintense.
Third is the risk of new channel impact. At present, the liquor circulation enterprisesrepresented by 1919 and liquor convenience have developed rapidly, including thedevelopment of new Internet retail, which brings uncertainty to the channel constructionof liquor enterprises.
Fourth is the risk of consumption concept change. Consumers pay more attention to theconcept of healthy life. At the same time, with the adjustment of the age structure of thedrinking population, the liquor consumption preference in daily life has decreased, andthe liquor consumption shows a trend of diversified development.
10. Visits paid to the Company for research, communication,interview, etc.
10.1 Activity register in the reporting period
√ Applicable ? N/A
Date of visit
Date of visit | Way of visit | Type of visitor | Index to main inquiry information |
30 January 2018 | Field survey | Institution | Log Sheet of Investor Relations Activities for 30 January 2018 on www.cninfo.com.cn(No:2018-001) |
5 March 2018 | Field survey | Institution | Log Sheet of Investor Relations Activities for 5 March 2018 on www.cninfo.com.cn(No:2018-002) |
2 May 2018 | Telephone communication | Institution | Log Sheet of Investor Relations Activities for 2 May 2018 on www.cninfo.com.cn(No:2018-003) |
7 May 2018 | Other | Other | Log Sheet of Investor Relations Activities for 7 May 2018 on |
Date of visit
Date of visit | Way of visit | Type of visitor | Index to main inquiry information |
www.cninfo.com.cn(No:2018-004) | |||
15 May 2018 | Telephone communication | Institution | Log Sheet of Investor Relations Activities for 15 May 2018 on www.cninfo.com.cn(No:2018-005) |
23 May 2018 | Field survey | Other | Log Sheet of Investor Relations Activities for 23 May 2018 on www.cninfo.com.cn(No:2018-006) |
19 July 2018 | Field survey | Institution | Log Sheet of Investor Relations Activities for 19 July 2018 on www.cninfo.com.cn(No:2018-007) |
7 September 2018 | Field survey | Institution | Log Sheet of Investor Relations Activities for 7 September 2018 on www.cninfo.com.cn(No:2018-008) |
13 September 2018 | Field survey | Institution | Log Sheet of Investor Relations Activities for 13 September 2018 on www.cninfo.com.cn(No:2018-009) |
20 September 2018 | Field survey | Institution | Log Sheet of Investor Relations Activities for 20 September 2018 on www.cninfo.com.cn(No:2018-010) |
7 November 2018 | Field survey | Institution | Log Sheet of Investor Relations Activities for 7 November 2018 on www.cninfo.com.cn(No:2018-011) |
Section V Significant Events
1. Profit distribution and converting capital reserves intoshare capital for common shareholders
Formulation, execution or adjustments of profit distribution policy, especially cashdividend policy, for common shareholders in the reporting period√ Applicable ? N/A
On 23 May 2018, the Company held 2017 annual shareholders' meeting, and the plan forprofit distribution for 2017 was reviewed and approved by this meeting. Plan for profitdistribution: Based on its total of 1,506.988 million shares as on 31 December 2017, theCompany distributed a cash dividend of CNY25.5 (tax inclusive) per 10 shares to allshareholders. The total cash dividend is CNY 3,842.8194 million (tax inclusive). The bookclosure day was 21 June 2018 and the ex-right & ex-dividend day 22 June 2018.
A special statement of the policy of cash dividends
A special statement of the policy of cash dividends | |
Whether it meets the requirements of the articles of incorporation or the resolution of shareholders' meeting. | Yes |
Whether the standard and proportion of dividends are clear. | Yes |
Whether the relevant decision-making process and systems are complete. | Yes |
Whether non-executive directors perform their duties and play their due role. | Yes |
Whether the minority shareholders have the opportunity to fully express their opinions and appeals and whether their legitimate rights and interests have been adequately protected. | Yes |
Whether the conditions and procedures are compliant and transparent it the cash dividend policy is adjusted or changed. | The Company's cash dividend policy has not been adjusted or changed. |
Plans (or preliminary plans) for profit distribution and converting capital reserves intoshare capital for common shareholders for the recent three years (including the reportingperiod) are as following:
Preliminary plan for profit distribution for 2018: Based on its total of 1,506.988 millionshares as at 31 December 2018, the Company is to distribute a cash dividend of CNY32(tax inclusive) per 10 shares to all shareholders. The total cash dividend isCNY4,822.3616 million (tax inclusive).
Plan for profit distribution for 2017: Based on its total of 1,506.988 million shares as at 31December 2017, the Company is to distribute a cash dividend of CNY 25.5 (tax inclusive)per 10 shares to all shareholders. The total cash dividend is CNY 3,842.8194 million (taxinclusive).The book closure day was 6 June 2018 and the ex-right & ex-dividend day was21 June 2018.
Plan for profit distribution for 2016: Based on its total of 1,506.988 million shares as at 31December 2016, the Company distributed a cash dividend of CNY 21 (tax inclusive) per10 shares to all shareholders. The total cash dividend is CNY 3,164.6748 million (taxinclusive). The book closure day was 15 June 2017 and the ex-right & ex-dividend daywas 16 June 2017.
Cash dividend distribution over the recent three years (including the reporting period)
Unit: CNY
Year
Year | Cash dividends (tax inclusive) | Net profit attributable to common shareholders in the consolidated statement in the year | Ratio to net profit attributable to common shareholders in the consolidated statement in the year | Cash dividends in other forms | Ratio of cash dividends in other forms | Total cash dividends (including other forms) | Ratio of cash dividends (including other forms) |
2018 | 4,822,361,600.00 | 8,115,189,794.69 | 59.42% | 0.00 | 0.00% | 4,822,361,600.00 | 59.42% |
2017 | 3,842,819,400.00 | 6,627,169,959.16 | 57.99% | 0.00 | 0.00% | 3,842,819,400.00 | 57.99% |
2016 | 3,164,674,800.00 | 5,827,168,870.88 | 54.31% | 0.00 | 0.00% | 3,164,674,800.00 | 54.31% |
The Company made a profit in the reporting period and the profit distributed to commonshareholders of the Company was positive, but it did not put forward a preliminary planfor cash dividend distribution to its common shareholders.? Applicable √ N/A
2. Preliminary plan for profit distribution and convertingcapital reserves into share capital for the reporting period
√ Applicable ? N/A
Bonus shares for every 10 shares (share) | 0 |
Dividend for every 10 shares (CNY) (tax included) | 32.00 |
Additional shares converted from capital reserves for every 10 shares (share) | 0 |
Total shares as the basis for the preliminary plan for profit distribution (share) | 1,506,988,000 |
Total cash dividends (CNY) (tax inclusive) | 4,822,361,600.00 |
Cash dividends in other forms (e.g. repurchase share) | 0.00 |
Total cash dividends (CNY) (including other forms) | 4,822,361,600 |
Distributable profit (CNY) | 21,942,516,695.42 |
Percentage of cash dividends in the total distributed profit (including other forms) | 100% |
Information of the cash dividends
Information of the cash dividends |
The development stage of the Company is mature and the Company has no major fund expenditure arrangement. When the profit distribution is carried out, the proportion of cash dividends in this profit distribution should at least reach 80%. |
Details about the preliminary plan for profit distribution and converting capital reserves into share capital |
As audited by Jiangsu Suya Jincheng CPA LLP, the Company realized a net profit of CNY 7,047,875,821.74 for 2018 (consolidated statements attributable to shareholders of the parent company net profit of CNY 8,115,189,794.69). It provided CNY 0 as statutory surplus reserves. Plus undistributed profit at the beginning of the year of CNY 18,737,460,273.68 and minus the distributed profit of CNY 3,842,819,400, the actual distributable profit would be CNY 21,942,516,695.42. In line with both the long-term development needs of the Company and the principle of giving appropriate returns to shareholders, based on its total of 150,6.99 million shares, the Company is to distribute a cash dividend of CNY 32 (tax inclusive) per 10 shares to all shareholders. The total cash dividend is CNY 17,120,155,095.42. Accounting for 59.42% of the net profit attributable to the parent company's shareholders. The remaining undistributed profit of CNY 17,120,155,095.42shall be carried forward for future distribution. |
3. Performance of undertakings
3.1. Undertakings of the Company's actual controller, shareholders,related parties and acquirer, as well as the company and othercommitment makers fulfilled in the reporting period or ongoing at theperiod-end
√ Applicable ? N/A
Undertaking | Undertaking giver | Type of undertaking | Details of undertaking | Undertaking date | Term | Degree of performance |
Stock reform undertaking | ||||||
Undertaking made in the report of acquisition or change of interest | ||||||
Undertaking made in the reorganization of assets | ||||||
Undertakings given in time of IPO or refinancing | Jiangsu Yanghe Group Co.,Ltd. | Horizontal competition, related transactions and capital occupation | 1. The commitment to avoid horizontal competition: (1) At present, the company has not engaged in the business of competing with the joint stock company. The company is committed to maintaining the existing business structure and does not directly or indirectly operate any business that competes with the actual operation of the joint stock company or may constitute a competition, or a | 2009.08.26 | Long-term | In progress |
Undertaking
Undertaking | Undertaking giver | Type of undertaking | Details of undertaking | Undertaking date | Term | Degree of performance |
subsidiary or subsidiary enterprise that is engaged in the above business. (2) If the company violates the above commitments, the joint stock company has the right to require the company to immediately terminate its business competition and to compensate for the economic losses caused to the joint stock company. At the same time, the company should pay liquidated damages to the joint stock company for CNY 10 million. (3) The company has committed itself to the legitimate rights and interests of the shareholders of joint-stock companies, other shareholders of joint-stock companies and the creditors of joint-stock companies without the use of their holding shareholder status in the joint stock company. (4) This undertaking shall enter into force on the date of signing, and shall not be revoked without the consent of the stock company. 2. The commitment to reduce the related transactions: the company will strictly follow the requirements of the relevant laws as Corporation Law, Securities Law and Code of Corporate Governance for Listed Companies, and further reduce and strictly standardize the various related transactions between the company and the joint stock companies, so as to ensure that the controlling shareholders and the actual control are not used. The status of making a person damages the interests of the shareholders of a joint stock company and other shareholders and does not occur in the case of new share holding companies. | ||||||
Jiangsu Blue Alliance Joint-Stock Co., Ltd. | Horizontal competition, related transactions | The commitment to avoid horizontal competition: 1. The company is mainly | 2017.11.23 | Long-term | In progress. |
Undertaking
Undertaking | Undertaking giver | Type of undertaking | Details of undertaking | Undertaking date | Term | Degree of performance |
and capital occupation | engaged in investment management and does not operate the same or associated business with the issuer. The company will not engage in the business of the same or associated business with the issuer, without prejudice to the interests of the issuer, nor from the issuer for unfair interests. 2. If the company violates the above commitment, the issuer has the right to claim compensation for the economic loss resulting from the issuer, and to pay a liquidated penalty of CNY 5 million, and the right to purchase the business item at the market price of the business item or the establishment of a cost price (which is the principle of the lowest value).3. This undertaking shall enter into force on the date of signing, and shall not be revoked without the consent of the issuer. | Blue Alliance merged Blue Sky Trade and Blue Ocean Trade. Blue Alliance carries on relevant commitments | ||||
Jiangsu Blue Alliance Joint-Stock Co., Ltd. | Share reduction | After a year of trading in the stock exchange, the shares of the issuer will not exceed 25% of the total number of shares held by the issuer, and the issuer's shares and changes in the shares are declared to the issuer in a timely manner. | 2017.11.23 | Long-term | In progress,Blue Alliance merged Blue Sky Trade and Blue Ocean Trade. Blue Alliance Carries on relevant commitments | |
Feng Pantai, Cong Xuenian | Other undertaking | Shareholders of Blue Sky Trade,as directors, supervisors and senior managers, made the commitment: 1. During the tenure of the issuer, Blue Sky Trade equity transferred annually shall not exceed 25% of the total number of shares held by Blue Sky Trade。 2. If I leave the issuer, I will not transfer the shares of Blue Sky Trade that I have held within six months after my departure. | 2017.11.23 | Long-term | In progress |
Undertaking
Undertaking | Undertaking giver | Type of undertaking | Details of undertaking | Undertaking date | Term | Degree of performance |
3. If I leave from the issuer, the number of Blue Sky transferred shares trade within twelve months after six months of departure does not exceed 50% of the total share of Blue Sky Trade. | ||||||
Zhong Yuye | Other undertaking | Shareholders of Blue Ocean Trade,as directors, supervisors and senior managers, made the commitment: 1. During the tenure of the issuer, Blue Ocean Trade equity transferred annually shall not exceed 25% of the total number of shares held by Blue Ocean Trade 2. If I leave the issuer, I will not transfer the shares of Blue Ocean Trade that I have held within six months after my departure. 3. If I leave from the issuer, the number of Blue Ocean transferred shares trade within twelve months after six months of departure does not exceed 50% of the total share of Blue Ocean Trade. | 2017.11.23 | 2019.03.23 | In progress | |
Equity incentive commitment | ||||||
Other undertakings to non-controlling shareholders | ||||||
Whether the undertaking is fulfilled on time | Yes | |||||
Specific reasons for failing to fulfill any undertaking and plan for the next step | None |
3.2. Where any earnings forecast was made for any of the Company'sassets or projects and the reporting period is still within the forecastperiod, the Company shall explain whether the performance of the assetor project reaches the earnings forecast and why
? Applicable √ N/A
4. Occupation of the company's capital by the controllingshareholder or its related parties for non-operating purposes
? Applicable √ N/A?No such cases in the reporting period.
5. Explanation of the board of directors, the supervisorycommittee and non-executive directors (if any) regarding the"non-standard audit opinion" for the reporting period
? Applicable √ N/A
6. Reasons for changes in accounting policies, accountingestimates and accounting methods as compared to thefinancial report for the prior year
√ Applicable ? N/A
According to the notice of the ministry of finance on the Revision and Issuance of theGeneral Corporate Financial Statement Format for 2018 issued on June 15, 2018(CaiKuai [2018] No. 15), the Company has revised the financial statement format asfollows:
1. Balance sheet: merge the original "notes receivables" and "accounts receivables"items into "notes and accounts receivables";Merge the original items of "interestreceivables", "dividend receivables" and "other receivables" into "otherreceivables";Merge the original "fixed assets" and "fixed assets liquidation" projects into"fixed assets";Merge the original "project materials" and "construction in progress" into"construction in progress";Merge the original "notes payable" and "accounts payable"items into "notes and accounts payables";Merge the original "interest payable","dividends payable" and "other payables" into "other payables";Merge the original "long-term payables" and "special payables" into "long-term payables".2. Income statement: separate the "general and administrative expenses " project intothe "general and administrative expenses " and the "research and developmentexpenses";Add "interest expenses" and "interest income" under "financial expenses" inthe income statement.3. Statement of changes in owners' equity: add the item "change in defined benefit plancarried forward retained earnings".The event of changes in Accounting Policies has been reviewed and approved by thesixth meeting of the sixth board of directors.Details of the affected items in the financial statements at the beginning and last period(December 31, 2017 /2017 year) are as follows:
Before the adjustment
Before the adjustment | After the adjustment | ||
Item | Amount (CNY) | Item | Amount (CNY) |
Notes receivables | 212,812,236.57 | Notes and accounts receivables | 221,297,619.40 |
accounts receivables | 8,485,382.83 | ||
Construction in progress | 234,431,457.83 | Construction in progress | 235,219,521.41 |
Project materials | 788,063.58 | ||
Notes payables | 8,200,000.00 | Notes and accounts payables | 1,119,603,574.47 |
Accounts payables | 1,111,403,574.47 |
Before the adjustment
Before the adjustment | After the adjustment | ||
Item | Amount (CNY) | Item | Amount (CNY) |
General and administrative expenses | 1,532,148,106.93 | General and administrative expenses | 1,506,402,859.73 |
Research and development expenses | 25,745,247.20 |
7. Reasons for retrospective restatement of major accountingerrors during the reporting period
? Applicable √ N/A?No such cases in the reporting period
8. Reasons for changes in scope of the consolidated financialstatements as compared to the financial report for the prioryear
√ Applicable ? N/A
1. Establishment of subsidiaries
In June 2018, the Company and its owned subsidiary Su Wine Group Jiangsu WealthManagement Co.,Ltd. respectively subscribed CNY 150,000 to set up Jiangsu YangheInvestment Management Co.,Ltd.. It will be included in the consolidated financialstatements from June 2018.
In May 2018, the owned subsidiary Su Wine Group Trade Co., Ltd. subscribed CNY50,000 to set up Su Wine Group Nanjing Operation Management Co.,Ltd.. It will beincluded in the consolidated financial statements from May 2018.
On 7 November 2018, the owned subsidiary Su Wine Group Trade Co., Ltd. subscribedCNY 10 million to set up Jiangsu Zhongshiji Wine Industry Co.,Ltd.. As of December 31,2018, it has not made any actual investment. It will be included in the consolidatedfinancial statements from November 2018.
2. Cancellation of subsidiaries
Sihong Shuangtai Package Co.,Ltd., the owned subsidiary in this period, conductedliquidation and cancellation. On May 29, 2018, it obtained the notice of companyapproval for cancellation registration issued by Sihong County Market Supervision andAdministration Bureau. It will no longer be included in the consolidated financialstatements from June 2018.
The owned subsidiary, Sue Wine Group Trade Co., Ltd. merged Nanjing Huiteng MediaTechnology Co.,Ltd.. On November 7, 2018, it obtained the notice of company approval
for cancellation registration issued by Nanjing Jianye District Market Supervision andAdministration Bureau.
9. Engagement and disengagement of CPAs firm
CPAs firm at present
Name of the domestic CPAs firm
Name of the domestic CPAs firm | Jiangsu Suyajincheng CPA LLP |
The Company’s payment for the domestic CPAs firm (CNY’0,000) | 190.8 |
Consecutive years of the audit service provided by the domestic CPAs firm | 12 |
Names of the certified public accountants from the domestic CPAs firm | Xu Xuzhen, Kan Baoyong |
Consecutive years of the audit service provided by the certified public accountants | Xu Xuzhen (5 years), Kan Baoyong (2 years) |
Whether the CPAs firm was changed in the current period?? Yes √ No?
Engagement of any CPAs firm for internal control audit, financial adviser or sponsor? Applicable √ N/A
10. Possibility of listing suspension and termination afterdisclosure of this annual report
? Applicable √ N/A
11. Bankruptcy and reorganization
? Applicable √ N/A?No such cases in the reporting period.
12. Material litigation and arbitration
? Applicable √ N/A?No such cases in the reporting period.
13. Punishments and rectifications
? Applicable √ N/A?No such cases in the reporting period.
14. Credit conditions of the company as well as its controllingshareholder and actual controller
? Applicable √ N/A?
15. Implementation of any equity incentive plan, employeestock ownership plan or other incentive measures foremployees
? Applicable √ N/A?
16. Significant related-party transactions
16.1. Related-party transactions arising from routine operation
? Applicable √ N/A?No such cases in the reporting period.
16.2. Related-party transactions regarding purchase or sales of assetsor equity interests
? Applicable √ N/A?No such cases in the reporting period.
16.3. Related-party transactions arising from joint investments inexternal parties
? Applicable √ N/A?No such cases in the reporting period.
16.4. Credits and liabilities with related parties
√Applicable □N/A?Whether there are non-operational related creditor's rights and debt transactions? Applicable √ N/A?No such cases in the reporting period.
16.5. Other significant related-party transactions
? Applicable √ N/A?No such cases in the reporting period.
17. Significant contracts and their execution
17.1. Trusteeship, contracting and leasing17.1.1. Trusteeship
? Applicable √ N/A
No such cases in the reporting period.
17.1.2. Contracting
? Applicable √ N/A
No such cases in the reporting period.
17.1.3. Leasing
? Applicable √ N/A
No such cases in the reporting period.
17.2. Major guarantees
? Applicable √ N/A
No such cases in the reporting period.
17.3. Entrusted cash asset management17.3.1. Entrust assets management
√ Applicable ? N/A
Entrust assets in the reporting period.
Unit:CNY10, 000
Product type
Product type | Source of entrusted assets | Amount | Undue amount at the end of 2017 | Overdue outstanding amount |
Bank finance | Owned Fund | 1,004,000 | 888,864.99 | 0 |
Trust finance | Owned Fund | 856,710.36 | 856,710.36 | 0 |
Broker finance | Owned Fund | 90,000 | 0 | 0 |
Other | Owned Fund | 45,000 | 45,000 | 0 |
Total | 1,995,710.36 | 1,790,575.35 | 0 |
Information about significant amount of individual entrust finance or high-risk entrust finance with principle nonguaranteed and poor liquidity.√ Applicable ? N/A
Unit:CNY10,000
Name oftrustee
Name of trustee | Trustee type | Product type | Amount | Source of funding | Commencement date | Termination date | Funds allocation | Method of Remuneration | Referenced annualized return | prospective earnings(if applicable) | Actual profit & loss for the period | Actual principal amount recovered for the period | Amount reserved for impairment (if applicable) | Whether it go through statutory procedures | Whether there will be entrust finance plans in the future | Summary and reference(if applicable) |
Zhongrong International Trust Co.,Ltd. | Trust | Zhongrong -Assistant Fund No.190 Trust | 15,000 | Owned fund | 23 June 2017 | 23 June 2019 | Used for subscribing financial investment products | Cash | 7.40% | 2,220 | 1,106.96 | 0 | 0 | Yes | Yes | |
Zhongrong International Trust Co.,Ltd. | Trust | Zhongrong Trust-The Glory of the World No.26 Trust | 10,000 | Owned fund | 30 June 2017 | 30 June 2019 | CNY 12.8282 million was used for gaining 49% equity of Dasheng Group Shandong Property Co., Ltd.. The surplus funds deducting related expenses and credit insurance fund flowed into project company as a | Cash | 7.60% | 1,520 | 757.92 | 760 | 0 | Yes | Yes |
Name oftrustee
Name of trustee | Trustee type | Product type | Amount | Source of funding | Commencement date | Termination date | Funds allocation | Method of Remuneration | Referenced annualized return | prospective earnings(if applicable) | Actual profit & loss for the period | Actual principal amount recovered for the period | Amount reserved for impairment (if applicable) | Whether it go through statutory procedures | Whether there will be entrust finance plans in the future | Summary and reference(if applicable) |
shareholder loan | ||||||||||||||||
Western Trust Co.,Ltd. | Trust | Western Trust- Evergrande Enping Equity Investment Collective Fund Trust Plan | 10,000 | Owned fund | 5 July 2017 | 5 October 2019 | Used for capital increase in Evergrande Real Estate Group Enping Co.,Ltd. | Cash | 7.40% | 1,666.52 | 737.97 | 716.59 | 0 | Yes | Yes | |
Western Trust Co.,Ltd. | Trust | Western Trust-Tiandiyuan (Phase V) Collective Fund Trust Plan | 12,000 | Owned fund | 11 September 2017 | 11 September 2019 | Used for development and construction of Qujiangxiangdu Block C Project by Xi’an Tiandiyuan Real Estate Development Co., Ltd. and replacement of external financing | Cash | 6.80% | 1,632 | 813.76 | 797.55 | 0 | Yes | Yes | |
Shanxi International Trust Co.,Ltd. | Trust | Shanxi International Trust·Wuxi Railway | 10,000 | Owned fund | 27 September 2017 | 27 September 2019 | Used for development and constructio | Cash | 7.60% | 1,520 | 757.92 | 745.45 | 0 | Yes | Yes |
Name oftrustee
Name of trustee | Trustee type | Product type | Amount | Source of funding | Commencement date | Termination date | Funds allocation | Method of Remuneration | Referenced annualized return | prospective earnings(if applicable) | Actual profit & loss for the period | Actual principal amount recovered for the period | Amount reserved for impairment (if applicable) | Whether it go through statutory procedures | Whether there will be entrust finance plans in the future | Summary and reference(if applicable) |
Station North Square A Block Project Loan Collective Fund Trust Plan | n of Tainyu Garden Residential Project Phase I and Phase II 3-7# Building in Wuxi Railway Station North Square A Block in Liangxi Direct, Wuxi City by Wuxi Shimao Real Estate Development and Construction Co.,Ltd | |||||||||||||||
Shanxi International Trust Co.,Ltd. | Trust | Shanxi International Trust·Green Source Farmers Market Trust Loan Collective Fund Trust | 10,000 | Owned fund | 31 October 2017 | 31 October 2019 | Used for working capital supplement of offering trust loans to Green Source | Cash | 7.70% | 1,540 | 767.89 | 373.33 | 0 | Yes | Yes |
Name oftrustee
Name of trustee | Trustee type | Product type | Amount | Source of funding | Commencement date | Termination date | Funds allocation | Method of Remuneration | Referenced annualized return | prospective earnings(if applicable) | Actual profit & loss for the period | Actual principal amount recovered for the period | Amount reserved for impairment (if applicable) | Whether it go through statutory procedures | Whether there will be entrust finance plans in the future | Summary and reference(if applicable) |
Plan | Farmers Market Co.,Ltd. | |||||||||||||||
Shanghai International Xintuo Trade Company | Trust | Shanghai Xintuo-Oceanwide Wuhan Yunhai Garden Collective Trust | 10,000 | Owned fund | 9 November 2017 | 9 May 2019 | Used for development and construction of Yunhai Garden Project (Block 24-1) by Wuhan CBD Investment&Development Co.,Ltd. | Cash | 6.50% | 972.33 | 648.22 | 0 | 0 | Yes | Yes | |
Zhongrong International Trust Co.,Ltd. | Trust | Zhongrong- Junzun No.1 Trust | 15,000 | Owned fund | 15 December 2017 | 15 December 2019 | Shanghai Jiangnan (Group) Co., Ltd. used the funds to repay existing debts and acquire equity shares of Sichuan Tengdun Technology Co.,Ltd. | Cash | 8.00% | 2,400 | 1,196.71 | 1176.99 | 0 | Yes | Yes |
Name oftrustee
Name of trustee | Trustee type | Product type | Amount | Source of funding | Commencement date | Termination date | Funds allocation | Method of Remuneration | Referenced annualized return | prospective earnings(if applicable) | Actual profit & loss for the period | Actual principal amount recovered for the period | Amount reserved for impairment (if applicable) | Whether it go through statutory procedures | Whether there will be entrust finance plans in the future | Summary and reference(if applicable) |
and its operation service company | ||||||||||||||||
Huarong International Trust Co.,Ltd, | Trust | Huarong -Lianyungang Tongke Equity Investment Collective Trust Plan | 2,000 | Owned fund | 1 March 2018 | 1 March2020 | Used for the development and construction of the "Lianyungang Excellence Blue Coast " project of Tianqian Real Estate Company under Tongke Group | Cash | 9.00% | 360.49 | 150.41 | 144.27 | 0 | Yes | Yes | |
Western Trust Co.,Ltd. | Trust | Western Trust ·Rongxin Bowan Collection Fund Trust Plan | 10,000 | Owned fund | 27 March2018 | 27 June 2019 | Used for the Xiamen Rongxin ·RongxinBowan project development of rongxin new field (Xiamen) Real Estate | Cash | 8.80% | 1,101.81 | 672.66 | 636.11 | 0 | Yes | Yes |
Name oftrustee
Name of trustee | Trustee type | Product type | Amount | Source of funding | Commencement date | Termination date | Funds allocation | Method of Remuneration | Referenced annualized return | prospective earnings(if applicable) | Actual profit & loss for the period | Actual principal amount recovered for the period | Amount reserved for impairment (if applicable) | Whether it go through statutory procedures | Whether there will be entrust finance plans in the future | Summary and reference(if applicable) |
Development Co., Ltd. | ||||||||||||||||
Avic Trust Co.,Ltd. | Trust | Avic Trust [2018]No.92Century Huatong Stock Pledge Fund Trust Plan | 15,000 | Owned fund | 14 May 2018 | 14 May 2019 | Used for stock pledge of the outstanding shares of Century Huatong (SZ. 002602), a listed company. | Cash | 8.40% | 1,260 | 797.42 | 0 | 0 | Yes | Yes | |
Shanxi International Trust Co.,Ltd. | Trust | Shanxi International Trust-Qidong HengdaOffshore Venice Collection Fund Trust Plan | 15,000 | Owned fund | 25 May 2018 | 25 May 2019 | Used for the transfer of the right to specific assets of Qidong HengdaOffshore Venice 4-3 parcel project legally held by Qidong Qinsheng real estate Co., Ltd. | Cash | 8.60% | 1,290 | 777.53 | 738.66 | 0 | Yes | Yes | |
Minmetals International Trust Co.,Ltd. | Trust | Minmetals International Trust-Unitrust No.32 - | 15,000 | Owned fund | 27 June 2018 | 27 June 2019 | Used for the development and | Cash | 8.50% | 1,275 | 614.79 | 614.79 | 0 | Yes | Yes |
Name oftrustee
Name of trustee | Trustee type | Product type | Amount | Source of funding | Commencement date | Termination date | Funds allocation | Method of Remuneration | Referenced annualized return | prospective earnings(if applicable) | Actual profit & loss for the period | Actual principal amount recovered for the period | Amount reserved for impairment (if applicable) | Whether it go through statutory procedures | Whether there will be entrust finance plans in the future | Summary and reference(if applicable) |
Changli Wenzeng No.66 Collection Fund trust Plan | construction of Nanjing Pukou Pujiang Street G24 plot under the name of Nanjing Shirong Real Estate Co., Ltd. | |||||||||||||||
Shanghai International Xintuo Trade Company | Trust | Shanghai International Xintuo-Wuxi Huajun Bond Investment Fund Trust Plan | 5,000 | Owned fund | 27 September 2018 | 26 September 2019 | To invest in the special creditor's rights of Wuxi Huajun Real Estate Development Co., Ltd., a subsidiary of zhuhai Huafa Industrial Co., Ltd., as the debtor | Cash | 7.20% | 360 | 0 | 0 | 0 | Yes | Yes | |
Avic Trust Co.,Ltd. | Trust | Avic Trust.Apocaly | 10,000 | Owned fund | 28 September | 27 Septemb | Used for granting | Cash | 9.00% | 900 | 204.66 | 204.66 | 0 | Yes | Yes |
Name oftrustee
Name of trustee | Trustee type | Product type | Amount | Source of funding | Commencement date | Termination date | Funds allocation | Method of Remuneration | Referenced annualized return | prospective earnings(if applicable) | Actual profit & loss for the period | Actual principal amount recovered for the period | Amount reserved for impairment (if applicable) | Whether it go through statutory procedures | Whether there will be entrust finance plans in the future | Summary and reference(if applicable) |
pse [2017] No.675 Kunming Longxi Huating Trust Loan Collection Fund Trust Plan | 2018 | er 2019 | trust loans to Yunnan Kaimou Real Estate Development Co., Ltd., specifically for the "Evergrande Longxi Huating" project in the main urban area of Kunming | |||||||||||||
Avic Trust Co.,Ltd. | Trust | Avic Trust.Apocalypse No.556Tianchengjufu Investment Fund | 40,000 | Owned fund | 19 December 2018 | 19 June 2019 | Used for subscribing financial investment products or other projects and products permitted by the laws and regulations such as deposit in bank, money | Cash | 7.80% | 1,555.73 | 102.58 | 0 | 0 | Yes | Yes |
Name oftrustee
Name of trustee | Trustee type | Product type | Amount | Source of funding | Commencement date | Termination date | Funds allocation | Method of Remuneration | Referenced annualized return | prospective earnings(if applicable) | Actual profit & loss for the period | Actual principal amount recovered for the period | Amount reserved for impairment (if applicable) | Whether it go through statutory procedures | Whether there will be entrust finance plans in the future | Summary and reference(if applicable) |
market fund and corporate bonds | ||||||||||||||||
Total | -- | 204,000 | -- | -- | -- | -- | -- | -- | 21,573.88 | 10,107.40 | -- | 0 | -- | -- | -- |
Entrust finance expected to be failed to recover principle or other situation leading to impairment? Applicable √ N/A
17.3.2 Entrust loans
? Applicable √ N/ANo such cases in the reporting period.
17.4 Other significant contracts
? Applicable √ N/ANo such cases in the reporting period.
18. Social responsibilities
18.1 Information about taking social responsibilities
The information about taking social responsibilities disclosed in 2018 Annual Social Responsibilities Report in detail on www.cninfo.com.cn on 30 April2019.
18.2 Information about targeted poverty alleviation18.2.1 Targeted poverty alleviation plan
According to the overall arrangement of the Suqian municipal party committee and the municipal government on poverty alleviation and building awell-off society with the work of "guancun baohu" and "three into three help", the Company actively responded to the call and quickly implemented therelevant requirements with practical actions to practice the spirit of enterprise and take bravely social responsibility.
In 2018, the Company earnestly implement the spirit of the 19th National Congress of the Communist Party of China with precision in povertyalleviation and speeding up poverty as own duty, around support mission support plan carefully. The Company established village collective project -cattle farm for Qiuzhaung village. On each quarter, the Company visited 200 farmers from Taiping village and Dagou village in depth so as to collectinformation on the application called Sunny Poverty Alleviation and ensure that the "gucun baohu" work with high quality and efficiency. It promotesthe rural development, and enhances the farmers' income, strengthens the relationship between cadres and masses, and makes due contributions to“liang ju yi gao” work.
18.2.2 Summary of annual targeted poverty alleviation
According to the requirements of the municipal poverty relief office and sunshine office,the Company has done a good job in "guancun baohu" work. The Company has linkedup with Qiuzhuang village in Yanghe New District, and each branch is responsible for theassistance work for 200 low-income households in Daguo village and Taiping village,among which 99 households are in Taiping village and 101 in Daguo village. After threeconsecutive years of assistance, by the end of 2018, the tasks of pairing assistance werecompleted according to the schedule. The collective economic income of Qiuzhuangvillage was CNY 240,000 in 2018, exceeding the annual task requirement. At the sametime, the Company organized and carried out special poverty alleviation activities, suchas "taking the grassroots level, emphasizing policies, adjusting structures, helping thethree summers", and consoling with party members in difficulties or being ill.
18.2.3 Poverty alleviation achievement
Indicator
Indicator | Unit | Amount/Implementation Situation |
A.Overall situation | —— | —— |
Including:1.Fund | CNY 10,000 | 479.5 |
2.Goods converted into cash | CNY 10,000 | 7.13 |
3.Establishing card for archives of poor people out of poverty | Person | 201 |
B. Input by project | —— | —— |
1.Industrial development | —— | —— |
Including:1.1 Types of poverty alleviation projects for industrial development | —— | Poverty alleviation through agriculture and forestry |
1.2Number of poverty alleviation projects for industrial development | Item | 1 |
1.3Amount invested in poverty alleviation projects for industrial development | CNY 10,000 | 15 |
2.Transfer and employment | —— | —— |
3.Removal and relocation | —— | —— |
4.Educational poverty alleviation | —— | —— |
5.Health poverty alleviation | —— | —— |
6.Ecological protection | —— | —— |
7.Basic guarantee | —— | —— |
8.Social poverty alleviation | —— | —— |
9.Other project | —— | —— |
Including:9.1.Item | Item | 5 |
9.2.Input amount | CNY 10,000 | 471.63 |
C. Awards(content and level) | —— | —— |
18.2.4 Follow-up poverty alleviation plan
a. Key follow-up the guacun work. The project helps promote "hematopoietic" povertyalleviation. It mainly follows up the collective economic assistance project of Qiuzhuangvillage in the linked village -- the contracted operation project of cattle farm, and strives toachieve the expected results. Taking "Party member activity day" and "National povertyalleviation day" as the starting point, the Company gives full play to the leading role ofparty members and cadres, and timely provides technical and operational support for thecattle farm project. With the village committees, the Company will comb the villageeconomic development projects in new year, revitalize the existing village collectiveassets, mobilize the enthusiasm of every villager. In addition, it plans to invest CNY200,000 to help Qiuzhuang village transfer 200 mu of collective land, and establishcollective estate and create new collective economic growth point.
b. Carry out the “Baohu” work in depth. In 2019, the Company will continue to carry outthe pairing support work. In the process, the Company will strengthen organizationalleadership, clear work task, adhere to carrying out the task and taking the responsibilitywith poverty alleviation funds, and seriously implement the support work. The Companywill mobilize the person in charge of each branch to conduct a detailed investigation intobasic information of pairing families, children of unemployment situation, their children toschool, the causes for the extremely poor farmers poverty and income situation throughholding seminars and visiting the masses, which helps solve their difficulties in productionand living.
c. Create profile and dynamic tracking. With the application called Sunny PovertyAlleviation, the Company will establish a basic information database for helping andsupporting households, which forms a dynamic information feedback mechanism withtimely follow-up and upgrade. According to the dynamic tracking of information obtainedby each visiting such as basic information of pairing families, children of unemploymentsituation, their children to school, the causes for the poverty of extremely poor farmers,the Company deeply understands the number of difficult farmers, the cause for poverty,difficulty level, farmers’ specialty and employment demand. According to the differentsituation of each pair at different times, the Company makes more reasonable andeffective support measures in time, and timely implement relevant policies in supportingthese households.
d. Responsibility to person and long-term management. Pairing-in relationship isrelatively stable. In principle, the Company holds on straight to the end for povertyalleviation. At the same time, the supervision, inspection and assessment of the personresponsible for helping the poor should be strengthened, and the poverty alleviation workshould be included in the company's "Gold party branch" assessment. Party members orbranches that have achieved remarkable results in helping the poor and can play anexemplary role in the branch should be commended, so as to mobilize the enthusiasm ofthe branch in helping the poor and ensure the high-quality and efficient "one-to-one help".At the same time, "trace management" is implemented to help establish the work ledger.It is required that the person responsible for the assistance should fill in the interviewrecord and other relevant information in the poverty alleviation manual and other relevantmaterials for later inspection when they carry out the visit and investigation. The party
committee of the Company shall conduct random inspection on the visits of the personsresponsible for the assistance every quarter, collect and listen to the comments on thepersons in charge by poor villagers, and check the work ledger of the assistance.
e. Targeted policies and targeted poverty alleviation. According to difficulties ofovercoming poverty and urgent measures, the Company develops a feasible plan againstpoverty and analyzes the poverty alleviation situation in the process. For "one-to-one"assistance, the responsible persons for assistance are mobilized to conduct in-depthcommunication in the homes of paired families to truly understand where poverty iscaused, and the responsible persons for assistance are urged to make targeted policiesaccording to the actual situation of the objects of assistance. In line with the principle of"what youlack and what is supplied, what you need and what is helped", the Companyexplores ways to address both symptoms and root causes, comprehensively developnew approaches, broaden the thinking and provide accurate help.
18.3 Information about environment protection
Whether the listed company and its subsidiaries belong to heavy polluting industries prescribed by the environmental protection departmentsYes
Company
name
Company name | Name of main pollutant and particular pollutant | Discharge type | Amount of discharge outlet | Distribution of discharge outlet | Emission concentration | Pollution discharge standard | Total emission | Approved total emission | Excessive discharge |
Jiangsu Yanghe Brewery Joint-Stock Co., Ltd. | COD Ammonia nitrogen Total nitrogen Total phosphorus | Indirect discharge | 1 | Within site | COD:107mg/L;Ammonia nitrogen:5.8mg/L;Total nitrogen:24.3mg/L;Total phosphorus:2.1mg/L | COD:400mg/L;Ammonia nitrogen :30mg/L;Total nitrogen:50mg/L;Total phosphorus:3mg/L | COD:260.72 ton; Ammonia nitrogen:15.38ton;Total nitrogen:69.42 tons;Total phosphorus:5.76 tons(2018) | COD:293 ton per year;Ammonia nitrogen:17.2 tons per year;Total nitrogen:78 tons per year;Total phosphorus:6.62 tons per year | No |
Jiangsu Shuanggou Distillery Stock Co.,ltd. | COD Ammonia nitrogen | Indirect discharge | 2 | New and old factory area | COD:130mg/L;Ammonia nitrogen:5mg/L | COD:400mg/L;Ammonia nitrogen:35mg/L | COD:67.34 tons; Ammonia nitrogen :2.59 tons(2018) | COD:540.61tons per year;Ammonia nitrogen:56.31tons per year | No |
Jiangsu Yanghe Brewery Joint-Stock Co., Ltd. Siyang Branch | COD Ammonia nitrogen Total nitrogen Total phosphorus | Indirect discharge | 1 | Within site | COD:160mg/L;Ammonia nitrogen :9mg/L;Total nitrogen:35mg/L;Total phosphorus:1.5mg/L | COD:400mg/L;Ammonia nitrogen :30mg/L;Total nitrogen:40mg/L;Total phosphorus:3mg/L | COD:118.2 tons;Ammonia nitrogen:12.56 tons;Total nitrogen:29.56 tons;Total phosphorus:2.21 tons(2018) | COD:672 tons per year;Ammonia nitrogen:42 tons per year | No |
Guizhou Guijiu Co.,Ltd. | COD Ammonia nitrogen Sulfur dioxide | Direct discharge after treatment up to the standards | 1 | Within site | COD:21mg/L;Ammonia nitrogen:0.64mg/L;S | COD;100mg/L;Ammonia nitrogen:15mg/L;Sulfur | COD:1.6 tons;Ammonia nitrogen:0.05 tons ;Sulfur | COD:2.06 tons per year;Ammonia nitrogen:0.31tons per year;Sulfur | No |
Company
name
Company name | Name of main pollutant and particular pollutant | Discharge type | Amount of discharge outlet | Distribution of discharge outlet | Emission concentration | Pollution discharge standard | Total emission | Approved total emission | Excessive discharge |
Nitrogen oxide | ulfur dioxide:0.1mg/L;Nitrogen oxide:88.5mg/L | dioxide :550mg/L;Nitrogen oxide:400mg/L | dioxide :0.001tons;Nitrogen oxide:3.28 tons (2018) | dioxide :52.5 tons per year;Nitrogen oxide:17.2 tons per year | |||||
Hubei Lihuacun Liquor Industry Co.,Ltd. | COD Ammonia nitrogen | Indirect discharge | 1 | Within site | COD:132mg/L;Ammonia nitrogen:14.1mg/L | COD:400mg/L;Ammonia nitrogen:30mg/L | COD:0.492 ton;Ammonia nitrogen:0.0525 ton(2018) | COD:14.2 ton per year;Ammonia nitrogen:1.42 tons per year | No |
Construction and operation of pollution prevention and control facilitiesa. The sewage treatment station’s designed capacity is 10,000 tons per day. The project total investment is CNY 96 million and it covers an area of19,000 square meters. The sewage treatment adopts physical treatment method, chemical treatment method and anaerobic biological treatmentmethod, aerobic biological treatment method, good oxygen treatment method, which achieves the treatment of high-concentration waste water of 250tons per hour. It implements the"Fermentation Alcohol and Liquor Industrial Pollutants Emission Standards CB27631-2011" Indirect EmissionsStandards. In 2018, the sewage treatment station implements efficient investment item upgrade project, mainly including anaerobic maintenance,cooling of biochemical pool, upgrade of intelligent parameter monitoring and total nitrogen etc. The total investment is CNY 10.871 million. After theimplementation, the anaerobic treatment unit of the sewage treatment station can produce 4.417 million stere biogas per year. The steam productioncan reach 60,900 tons. The annual economic benefit from steam production is CNY 12 million. The annual amount of biogas increased 36.82% yearon year and steam production increased 37.22% year on year.
b. The sewage treatment station in Shuanggou Distillery New Area was completed and put into use at the end of September 2013, with a totalinvestment of CNY 42.5 million and an annual operating cost of CNY 13 million. The sewage treatment station inlet COD and ammonia nitrogenconcentration are about 10000mg/l and 130mg/l respectively. The effluent COD and ammonia nitrogen concentration are about 130mg/l (thedischarge standard is 400mg/l) and 5mg/l (the discharge standard is 35mg/l), with implementation of "Shuanggou town sewage treatment planttakeover standards". In the past three years, there have been no environmental pollution accidents or penalties by environmental protectiondepartments in Shuanggou Distillery. Shuanggou Distillery has set up a hazardous waste warehouse to collect hazardous waste generated in
production and living. The warehouse is divided into: waste battery, desulfurizer, solid waste agent, liquid waste agent, daylight lamp tube, desulfurizerand other areas for classified storage so as to prevent cross-contamination. Shuanggou Distillery shall also declare the hazardous waste informationthrough the dynamic management system of hazardous waste in Jiangsu province, and regularly submit the hazardous waste to qualified companiesfor legal disposal.
c. The sewage treatment station of Siyang Branch of the Company covers an area of about 15,000 square meters, with a total investment of CNY 50million. The construction started in April 2014 and was completed in June 2015. On December 28, 2015, it was officially accepted by theenvironmental protection department. The designed treatment capacity is 6000 tons per day. In terms of process treatment, EGSB+AAO+ deeptreatment technology is adopted. The high-concentration waste water can be treated up to 250 tons per hour. After treatment, all indicators reachedthe indirect emission standard of "Fermented Alcohol and Liquor Industrial Pollutant Emission Standard CB27631-2011". In 2018, Siyang sewagetreatment station implements efficient investment item upgrade project, mainly including anaerobic maintenance, cooling of biochemical pool ,upgrade of intelligent parameter monitoring and total nitrogen etc.. After the implementation, the anaerobic treatment unit of the sewage treatmentstation can produce 4.67 million stere biogas per year. The steam production can reach 63,000 tons. The annual economic benefits from steamproduction is CNY 12.7468 million. The annual amount of biogas increased 24.5% year on year and steam production increased 24.5% year on year.
d. The sewage treatment system of Guijiu Company has a treatment capacity of 250 tons per day. The discharge of waste water shall be inaccordance with the Discharge Standards for Water Pollutants in Fermented Alcohol and Liquor Industry GB27631-2011 Table 2 Emission Standards.At the same time, an online detection system is installed and the facilities are in good condition. The boiler operates with natural gas, and the wastegas is discharged directly. The exhaust gas emission shall be in accordance with the "Boiler Air Pollutant Emission Standard" (GB13271-2014) Table2 Gas Boiler Limited Discharge Standard . The solid waste (distillers' grains) generated in the production is all processed by a third-party qualifiedcompany, and the treatment method is integrated utilization for the production of fertilizer. Noise is mainly due to Quyao crusher, boiler room fan,packaging workshop, power distribution. The equipment is installed with absorption treatment or sound insulation in the room to reduce the impact ofnoise. At the same time, the planting around the high-noise buildings is strengthened to achieve the goal of noise reduction. The Company usesanaerobic UASB /good oxygen (contact oxidation) to treat mixed sewage in production and living. At the same time, the Company installed COD,ammonia nitrogen, PH, and flow meter automatic monitoring instrument, and prepared ledgers for all operating facilities and equipment; Theequipment is in good condition.
e. The waste water of Lihuacun Liquor Industry is treated by combined process; Each workshop is equipped with mufflers and independent machineroom with the independent foundation and sound absorption material and sound insulation material for reducing the noise; Solid waste is treated bycomprehensive treatment method.
Environmental impact assessment of construction projects and other administrative permits for environmental protectionThe Company and each subsidiary’s construction project environmental impact reports and "three at the same time" acceptance materials, pollutantdischarge permit and other materials are complete.
Emergency plan for environmental emergenciesThe Company and its subsidiaries have made emergency plans for environmentalemergencies, among which the Company, Shuanggou Distillery and Siyang Branch ofthe Company have filed with Jiangsu Province Environmental Protection Department.The file numbers are 32000020140595, 32000020140604 and 32000020140594respectively. The emergency plan of environmental emergencies of Guijiu Company shallbe put on record in the environmental supervision brigade of Xiuwen County andmanaged by Guizhou Province Environmental Emergencies Center. Lihuacun LiquorIndustry has formulated the emergency plan for environmental pollution accidents, whichwill be filed with Yunyang District Environmental Protection Bureau on September 2018.
Environmental self-monitoring programmeThe Company, Shuanggou Distillery, Siyang Branch of the Company and GuijiuCompany have all developed their own environmental monitoring programs and filedthem with the competent authorities; Lihuacun Liquor Industry failed to meet theminimum standards of the local environmental protection department (Yunyang DistrictEnvironmental Protection Bureau) in terms of the scale of water used for production, andfailed to develop an environmental self-monitoring plan.
Other environmental information that should be made publicN/A
Other environmental related informationa. Due to the online detection instrument failure of chemical oxygen demand (COD), theCompany has four excess COD data in the monitoring platform of the environmentalprotection department, namely three on March 19, 2018 and one on May 5, 2018, whichhave been reported to the Suqian Environmental Protection Bureau by the third-partymaintenance unit.
b. On November 15 2017, Jiangsu Province Environmental Protection Bureau inspectedthe sludge disposal and transfer in Siyang Branch of the Company according to “Theproduction and use of industrial sludge disposal unit checklist (try out)". On February 23,2018, the bureau released The situation of the province of hazardous wastestandardization management examination in 2017 bulletin (Su Huan Ban (2018) No. 58),which mentioned the the problem of nonstandard parameter records of sludge in SiyangBranch of the Company. The Environmental Protection Department of Jiangsu Provincerequired the local environmental protection department to urge the enterprises to makerectification. The Siyang Branch of the Company quickly made the rectification plan andcompleted the rectification on May 30 2018. The rectification situation was timelyreported to the Siyang County Environmental Protection Bureau, and the rectificationmeasures and results met the requirements of the bureau.
c. In January 2018, the Company and Jiangsu Shuanggou Distillery Stock Co.,Ltd. wereawarded the honorary title of Suqian Green Demonstration Enterprise. In December 2018,the Company was awarded the title of “Jiangsu Province Water-Saving Enterprise” again.
19. Other significant events
√ Applicable ? N/A
1. The Company indirectly held partnership share of Jiangsu Jiequan Emerging IndustryDevelopment Fund (Limited Partnership) via Jiangsu Xinghe Investment ManagementCo.,Ltd. and Nanjing Xingnahe Venture Capital Investment partnership (LimitedPartnership). Jiangsu Jiequan Emerging Industry Development Fund (LimitedPartnership) completed fund-raising and put in record in AMAC. The record numbers areSCF515 and SCL005. It was disclosed in detail on the Announcement of cooperativeinvestment with professional investment institutions (No: 2017-021) on 30 December2017 and the Announcement of progress of cooperative investment with professionalinvestment institutions (No: 2018-011) on 12 April 2018.
2. Su Wine Wealth Management Co., Ltd., a wholly-owned subsidiary of the Company,has subscribed the partnership shares of Suzhou Danqing Phase II InnovativePharmaceutical Industry Investment Partnership (limited partnership). For details, pleaserefer to the Announcement on cooperation and investment with professional investmentinstitutions (Announcement No: 2018-021) and Announcement on cooperation andinvestment with professional investment institutions (Announcement No: 2018-030)disclosed by the Company on April 28 2018 and November 16 2018.
3. Jiangsu Yanghe Investment Management Co.,Ltd. will subscribed the partnershipshares of Panmao (Shanghai) Investment Center (limited partnership). For details,please refer to the announcement on cooperation and investment with professionalinvestment institutions (Announcement No: 2018-025) disclosed by the Company onJune 22 2018.
20. Significant events of subsidiaries
? Applicable √ N/A
Section VI Changes in Shares and Information about Shareholders
1. Changes in shares
1.1 Changes in shares
Unit:Share
Before | Changes in this year ( + , - ) | After | |||||||
Number | Proportion | Issuance of new shares | Bonus shares | Capitalization of capital reserves | Other | Subtotal | Number | Proportion | |
I.Restricted shares | 264,793,987 | 17.57% | 0 | 0 | 0 | -6,291,811 | -6,291,811 | 258,502,176 | 17.15% |
1.Shares held by the state | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
2.Shares held by state-owned corporations | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
3.Shares held by other domestic investors | 264,793,987 | 17.57% | 0 | 0 | 0 | -6,291,811 | -6,291,811 | 258,502,176 | 17.15% |
Among which:Shares held by domestic corporations | 249,480,000 | 16.55% | 0 | 0 | 0 | 0 | 0 | 249,480,000 | 16.55% |
Shares held by domestic individuals | 15,313,987 | 1.02% | 0 | 0 | 0 | -6,291,811 | -6,291,811 | 9,022,176 | 0.60% |
4.Shares held by foreign investors | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
Among which: Shares held by foreign corporations | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
Shares held by foreign individuals | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
II.Non-restricted shares | 1,242,194,013 | 82.43% | 0 | 0 | 0 | 6,291,811 | 6,291,811 | 1,248,485,824 | 82.85% |
1.CNY common shares | 1,242,194,013 | 82.43% | 0 | 0 | 0 | 6,291,811 | 6,291,811 | 1,248,485,824 | 82.85% |
2.Domestically listed foreign shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
3.Overseas listed foreign shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
4.Others | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
III.Total shares | 1,506,988,000 | 100.00% | 0 | 0 | 0 | 0 | 0 | 1,506,988,000 | 100.00% |
Reasons for the change in shares√ Applicable ? N/A
The reasons for the change of the Company's shares are mainly caused by the unlocked shares held by the Company's directors who left and the lockchanges of shares held by some of current directors and executives during the reporting period after the reduction of their shares.
Approval of share changes?Applicable √N/ATransfer of share ownership?Applicable √N/AImplementation progress of share repurchases?Applicable √N/AImplementation progress of share buyback reduction through centralized bidding?Applicable √N/A
Effects of changes in shares on the basic EPS, diluted EPS, net assets per shareattributable to common shareholders of the Company and other financial indexes overthe last year and the last reporting period?Applicable √N/A
Other contents that the Company considers necessary or is required by the securitiesregulatory authorities to disclose?Applicable √N/A
2. Changes in restricted shares
√Applicable ?N/AUnit:Share
Name ofshareholder
Name of shareholder | Opening restricted shares | Unlocked in this period | Increased in this period | Closing restricted shares | Reason for change | Date of unlocking |
Zhou Xinhu | 2,533,718 | -375,000 | 0 | 2,158,718 | Locked up due to current director position | N/A |
Zhen Bujun | 53,550 | -4,800 | 0 | 48,750 | Locked up due to current senior management position | N/A |
Zhong Yuye | 5,912,011 | -5,912,011 | 0 | 0 | Unlocked due to leavethe director position | 2018-8-9 |
Total | 8,499,279 | -6,291,811 | 0 | 2,207,468 | -- | -- |
2. Issuance and listing of securities
2.1 Securities(excluding preference shares) issued in the reportingperiod
?Applicable √N/A
2.2 Changes in total shares of the company and the shareholderstructure, as well as the asset and liability structure
?Applicable √N/A
2.3 Existing staff-held shares
?Applicable √N/A
3. Shareholders and actual controller
3.1 Total number of shareholders and their shareholdings
Unit:share
Total number of common shareholders atthe end of the reporting period
Total number of common shareholders at the end of the reporting period | 36,382 | Total number of common shareholders at the prior month-end before the disclosure date of the annual report | 33,267 | Total number of preference shareholders with resumed voting rights at the period-end(if any)(see note 8) | 0 | Total number of preference shareholders with resumed voting rights at the period-end(if any)(see note 8) | 0 | |||||
Shareholdings of shareholders with a shareholding percentage over 5% or the top 10 shareholders | ||||||||||||
Name of shareholder | Nature of shareholder | Shareholding percentage | Total shares held at the period-end | Increase/decrease during the reporting period | Number of restricted shares held | Number of non-restricted shares held | Pledged or frozen shares | |||||
Status of shares | Number of shares | |||||||||||
Jiangsu Yanghe Group Co.,Ltd. | State-owned corporation | 34.16% | 514,858,939 | 0 | 0 | 514,858,939 | Frozen | 403,100 | ||||
Jiangsu Blue Alliance Joint-Stock Co., Ltd. | Domestic non-state-owned corporation | 21.44% | 323,138,626 | 0 | 249,480,000 | 73,658,626 | ||||||
Shanghai Haiyan Logistics Development Co.,Ltd. | State-owned corporation | 9.67% | 145,708,137 | 0 | 0 | 145,708,137 | ||||||
Hong Kong Securities Clearing Company Ltd. (HKSCC) | Outboundcorporation | 6.51% | 98,137,423 | 36,193,800 | 0 | 98,137,423 | ||||||
Shanghai Jieqiang Tobacco Sugar &Wine(Group)Co.,Ltd | State-owned corporation | 4.08% | 61,455,475 | -4,371,672 | 0 | 61,455,475 | ||||||
China Securities Finance Corporation limited | Domestic non-state-owned corporation | 0.92% | 13,790,044 | 53,474 | 0 | 13,790,044 | ||||||
Central Huijin Asset Management Co., Ltd. | State-owned corporation | 0.85% | 12,766,400 | 0 | 0 | 12,766,400 | ||||||
Xingyuan Asset Management Co.,Ltd.-clients' capital | Outbound corporation | 0.66% | 9,966,102 | -1,153,196 | 0 | 9,966,102 | ||||||
Bank of China Co.,Ltd. – Liquor index classification securities investment fund by | Other | 0.61% | 9,234,299 | 2,489,116 | 0 | 9,234,299 |
China Merchants Fund
China Merchants Fund | ||||||||||
Platinum Investment Management Co.,Ltd. | Outbound corporation | 0.56% | 8,419,532 | -997,268 | 0 | 8,419,532 | ||||
Strategic investors or general corporations becoming top-ten shareholders due to placing of new shares(if any)(see note 3) | N/A | |||||||||
Related-parties or acting-in-concert | N/A | |||||||||
Shareholdings of the top 10 non-restricted shareholders | ||||||||||
Name of shareholder | Number of non-restricted shares held in the period end | Type of shares | ||||||||
Type | Number | |||||||||
Jiangsu Yanghe Group Co.,Ltd. | 514,858,939 | CNY common shares | 514,858,939 | |||||||
Shanghai Haiyan Logistics Development Co.,Ltd. | 145,708,137 | CNY common shares | 145,708,137 | |||||||
Hong Kong Securities Clearing Company Ltd. (HKSCC) | 98,137,423 | CNY common shares | 98,137,423 | |||||||
Jiangsu Blue Alliance Joint-Stock Co., Ltd. | 73,658,626 | CNY common shares | 73,658,626 | |||||||
Shanghai Jieqiang Tobacco Sugar & Wine(Group)Co.,Ltd | 61,455,475 | CNY common shares | 61,455,475 | |||||||
China Securities Finance Corporation Limited | 13,790,044 | CNY common shares | 13,790,044 | |||||||
Central Huijin Asset Management Co., Ltd. | 12,766,400 | CNY common shares | 12,766,400 | |||||||
Xingyuan Asset Management Co.,Ltd.-clients' capital | 9,966,102 | CNY common shares | 9,966,102 | |||||||
Bank of China Co.,Ltd. – Liquor index classification securities investment fund by China Merchants Fund | 9,234,299 | CNY common shares | 9,234,299 | |||||||
Platinum Investment Management Co.,Ltd. | 8,419,532 | CNY common shares | 8,419,532 | |||||||
Strategic investors or general corporations becoming top-ten shareholders due to placing of new shares(if any)(see notes 3) | N/A | |||||||||
Explanation on the top 10 common shareholders participating in the securities margin trading(if any)(see notes 4) | N/A |
Did any of the top 10 common shareholders or the top non-restricted common shareholders of the Company conduct any promissory repurchase
during the reporting period.? Yes √ No
The top 10 non-restricted common shareholders, the top10 common shareholders did not conduct any promissory repurchase during the reportingperiod.
3.2 Controlling shareholder
Nature of controlling shareholder:Local state-ownedType of controlling shareholder:Corporation
Name ofcontrollingshareholder
Name of controlling shareholder | Legal representative/Company principal | Date of establishment | Credibility code | Main business scope |
Jiangsu Yanghe Group Co.,Ltd. | Han Feng | 1997-05-08 | 91321300142334989Y | Sales of brewing mechanical equipment, Liquor Export, Import of various raw and auxiliary material used for production, equipment and accessories, Industrial investment; municipal public engineering, building engineering, tourism cultural industry investment. |
Shareholdings of the controlling shareholder in other controlled or non-controlled listed companies at home or abroad during the reporting period | N/A |
Change of the controlling shareholder during the reporting period?Applicable √N/ANo such cases in the reporting period
3.3 Actual controller and its persons acting in concert
Nature of actual controller:Local State-owned Assets Supervision and AdministrationCommissionType of actual controller:Corporation
Name of actual controller | Legal representative/Company principal | Date of establishment | Credibility code | Main business scope |
State-owned Assets Supervision and Administration Commission of Suqian | Zhao Xiaoli | 2005-10-22 | N/A | Execution of duty of state-owned enterprise's investor on behalf of the People's Government of Suqian and implementation of Supervision and Administration of State-owned Assets and State-owned Enterprises. |
Share holdings of the controlling shareholder in other controlled or non-controlled listed companies at home | N/A |
or abroad during thereporting period.
Change of the actual controller during the reporting period?Applicable √N/A
No such cases in the reporting period.Ownership and control relations between the actual controller and the Company
The actual controller control the company via trust or other ways of assets management?Applicable √ N/A
3.4 Other corporate shareholders with a shareholding proportionover10%
√Applicable ? N/A
or abroad during thereporting period.
Name of actual controller
Name of actual controller | Legal representative/Company principal | Date of establishment | Registered capital | Main business scope |
Jiangsu Blue Alliance Joint-Stock Co., Ltd. | Zhang Yubai | 2016-07-28 | CNY 105,600,000.00 | Sales of daily products, research and development of biology technology, furniture production, Business management consulting service, fruit tree planting, Sales of prepackaging food. |
3.5 Limits on the Company’s shares held by its controlling shareholder,actual controller, restructuring party and other commitment entities.
?Applicable √ N/A
Jiangsu Yanghe Group Co.,Ltd.
Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.34.16%
34.16%
State-owned Assets Supervision and Administration Commission of Suqian
State-owned Assets Supervision and Administration Commission of Suqian100%
Section VII Preference Shares
? Applicable √ N/ANo such cases in the reporting period
Section VIII Profiles of Directors, Supervisory, Senior Management and Employees
1. Change in shares owned by directors, members of supervisory committee, senior management and
employees
Name
Name | Office title | Incumbent/ Former | Gender | Age | Period of service | Shares held at the period-begin (share) | Shares increased at the reporting period (share) | Shares decreased at the reporting period (share) | Other increase/decrease (share) | Shares held at the period-end (share) |
Wang Yao | Chairman of the board | Incumbent | Male | 54 | 2015.2.10-2021.1.29 | 30,002 | 0 | 0 | 0 | 30,002 |
Zhong Yu | Deputy chairman of the board,President | Incumbent | Male | 55 | 2015.2.10-2021.1.29 | 0 | 0 | 0 | 0 | 0 |
Han Feng | Director | Incumbent | Male | 57 | 2015.2.10-2021.1.29 | 0 | 0 | 0 | 0 | 0 |
Cong Xuenian | Director,Vice president,Secretary of the board,CFO | Incumbent | Male | 53 | 2015.2.10-2021.1.29 | 3,378,291 | 0 | 600,000 | 0 | 2,778,291 |
Zhou Xinhu | Director,Vice president,Chief engineer | Incumbent | Male | 57 | 2015.2.10-2021.1.29 | 2,878,291 | 0 | 0 | 0 | 2,878,291 |
Liu Huashuang | Director | Incumbent | Male | 49 | 2018.1.29-2021.1.29 | 0 | 0 | 0 | 0 | 0 |
Wang Kai | Director | Incumbent | Male | 42 | 2017.5.19-2021.1.29 | 0 | 0 | 0 | 0 | 0 |
Xu Zhijian | Non-executivedirector | Incumbent | Male | 55 | 2015.2.10-2021.1.29 | 0 | 0 | 0 | 0 | 0 |
Cai Yunqing | Non-executivedirector | Incumbent | Female | 67 | 2015.2.10-2021.1.29 | 0 | 0 | 0 | 0 | 0 |
Ji Xueqing | Non-executivedirector | Incumbent | Male | 48 | 2015.2.10-2021.1.29 | 0 | 0 | 0 | 0 | 0 |
Chen Tongguang | Non-executivedirector | Incumbent | Male | 53 | 2015.2.10-2021.1.29 | 0 | 0 | 0 | 0 | 0 |
Feng Pantai | Chairman of supervisory committee | Incumbent | Male | 59 | 2015.2.10-2021.1.29 | 5,677,986 | 0 | 0 | 0 | 5,677,986 |
Chen Yiqin | Supervisor | Former | Male | 58 | 2015.2.10-2019.4.11 | 0 | 0 | 0 | 0 | 0 |
Chen Taiqing | Supervisor | Incumbent | Male | 54 | 2015.2.10-2021.1.29 | 0 | 0 | 0 | 0 | 0 |
Chen Taisong | Supervisor | Incumbent | Male | 51 | 2015.2.10-2021.1.29 | 0 | 0 | 0 | 0 | 0 |
Zhou Wenqi | Supervisor | Incumbent | Female | 53 | 2015.2.10-2021.1.29 | 0 | 0 | 0 | 0 | 0 |
Name
Name | Office title | Incumbent/ Former | Gender | Age | Period of service | Shares held at the period-begin (share) | Shares increased at the reporting period (share) | Shares decreased at the reporting period (share) | Other increase/decrease (share) | Shares held at the period-end (share) |
Lin Qing | Vice president | Incumbent | Female | 44 | 2015.2.10-2021.1.29 | 0 | 0 | 0 | 0 | 0 |
Zhen Bujun | Vice president | Incumbent | Male | 52 | 2015.2.10-2021.1.29 | 65,000 | 0 | 5,000 | 0 | 60,000 |
Zhu Wei | Vice president | Incumbent | Male | 42 | 2015.2.10-2021.1.29 | 0 | 0 | 0 | 0 | 0 |
Total | 12,029,570 | 0 | 605,000 | 0 | 11,424,570 |
2. Changes in directors,supervisors, senior management and employees
? Applicable √ N/A
3. Employment information
Professional background, work experience and major duties of directors, supervisors and senior management
3.1 Directors
Mr. Wang Yao, born in December 1965, Master of Engineering of Jiangnan University, MBA of Nanjing University, Researcher-level Senior Engineer,representative of the 19th National Congress of the Communist Party of China, craft master of Chinese liquor. He used to serve as secretary of theparty branch and Director of crushing and qu-making workshop of Jiangsu Yanghe Brewery, chairman of the board, general manager and secretary ofthe party committee of Jiangsu Yanghe Group Color Printing Co.,Ltd., deputygeneral manager, deputysecretary of party committee, secretary of thediscipline inspection commission of Shuanggou Distillery, deputy general manager, vice secretary of party committee and president assistant ofJiangsu Su Wine industry Co., Ltd., general manager and vice president of Shuanggou Distillery, chairman of the board and secretary of the the partycommittee of Su Wine Trading Co., Ltd.. He is chairman of the board and secretary of the the party committee of the Company, chairman of the boardof Su Wine Trading Co., Ltd., Director of Blue Alliance currently.
Mr. Zhong Yu, born in May 1964, Master degree, Senior Engineer and Master of Chinese liquor. He was the director of technology and environmentalprotection department inShuanggou Distillery; vice chief engineer, president assistant and director of production and technology center of ShuanggouDistillery, deputygeneral manager of Yanghe Branch of the Company, brewing director, president assistant, vice president of the Company, generalmanager of Siyang Branch of the Company. Currently, He is deputy chairman of the board, president, vice secretary of the the party committee ofYanghe, general manager of Yanghe Branch of the Company and chairman of the board of Shuanggou Distillery.
Mr. Han Feng, born in October 1962, Master degree. He served as deputy head of Siyang County in Jiangsu province, member of the party committee,member of standing committee of Siyang, chairman of the board of Yanghe Group, and Shuanggou Group. At present, he is director of the Company,chairman of the board and secretary of the the party committee of Suqian Industry Development Group Co., Ltd., chairman of the board, generalmanager of Yanghe Group and Shuanggou Group.
Mr. Wang Kai was born on August 1977, Bachelor Degree, Intermediate Economist. He was manager of brand department in marketing center ofShanghai TobaccoGroup Co., Ltd., president assistant of Shanghai Haiyan Logistics Development Co., Ltd. He is director of the Company anddeputygeneral manager of Shanghai Haiyan Logistics Development Co., Ltd.
Mr. Cong Xuenian, born in January 1966, Master degree, Senior Economist. He served as chief accountant and finance director of Yanghe Brewery,finance minister of Yanghe Group, secretary of the board, financial administrator, director and vice president of the Company. At present, he issecretary of the board, financial administrator, Director, and Vice President of the Company, chairman of the board of Su Wine Fortune ManagementCo., Ltd. and director of Blue Alliance.
Mr. Zhou Xinhu, born in August 1962, Master Degree, Senior Engineer, Member of the expert group of liquor professional committee of China FoodIndustry Association, Chief liquor taster of China and Master of Chinese liquorcritic. He was technician of Yanghe Group, director of quality inspectiondepartment and blending and storage department, deputygeneral manager of Yanghe Brewing, vice chief engineer, chief engineer and vice presidentof Company. At present, he is director, vice president and chief engineer of Company.
Mr. Liu Huashuang, born in December 1970, MBA of Fudan University, Accountant. He was the director of marketing department and deputygeneralmanager of Yanghe Brewing, general manager of Yanghe Blue Classic, general manager of Yanghe Brewing, member of the standing partycommittee of Company, deputy general manager and vice secretary of party committee of Jiangsu Su wine industrial Co., Ltd., vice chairman of theboard of Su Wine Trade Group. At present, he is the member of the standing party committee of the Company and director of strategic studies,secretary of the party committee and vice chairman of Su Wine Trade Group.
Mr. Xu Zhijian, born in March 1964, Master and Doctor degree, professor. He wasdirector of China Netherlands Business Administration Education Center of NanjingUniversity, director of EMBA Program of Nanjing University& Cornell University, directorof International Business Administration Education Center of Nanjing University,Assistant Dean of Business College of Nanjing University, Director of the Department ofBusiness Administration of Nanjing University. At present, he is non-executive director ofYanghe, Nanjing Port Co., Ltd., Jiangsu Maysta Chemical Co., Ltd. and GlarunTechnology Co., Ltd., Professor of Business College of Nanjing University.
Ms. Cai Yunqing, born in December 1952, Doctor of Medicine, professor and doctoralsupervisor. She was director and station-master assistant of food health department ofsanitation and antiepidemic station of Jiangsu province, director of department of nutritionand food hygiene, school of public health, Nanjing Medical University, director of Instituteof Nutrition and Food Science. At present, she is non-executive director of the Company,supervisor of Chinese Nutrition Society, honorary president of Nutrition Society ofJiangsu Province, vice president of Jiangsu Intelligent Aged Research Association andhealth food evaluation expert of National Food and Drug Administration.
Mr. Ji Xueqing, born in July 1971, Master degree. He used to be the Project Manager ofChina Chuangye Investment Group Limited, chairman of the board and president ofNanjing Qinghe Investment Group Co., Ltd., executive director of Nanjing ShuijinshiInvestment Group Co., Ltd., senior vice president of Yonyou Network Technology Co.,Ltd. At present, he is non-executive director of Yanghe, non-executive director of NanjingBalance Network Technology Co., Ltd., chairman of the board of Nanjing Suhe VentureCapital Center, director of Nanjing Li Heng Investment Limited Partnership, supervisor ofXuzhou Zm-Besta Heavy Steel Structure Co., Ltd., supervisor of Jiangsu Efful Scienceand Technology Co.,Ltd.,partner of China soft Investment Group.
Mr. Chen Tongguang, born in April 1966, Bachelor degree. He was accountant ofJiangsu Huaiyin Electric Company, vice director of finance department of JiangsuAgricultural College, vice director of Accounting Center and Finance department ofYangzhou University, vice and general manager of Yangda company of YangzhouUniversity Asset Operation Co., Ltd. At present, he is non-executive director of Yanghe,general manager of Yangda company of Yangzhou University Asset Operation Co., Ltd.and non-executive director of Yangzhou Yangjie Electronic Technology Co., Ltd.
3.2 Supervisors
Mr. Feng Pantai, born in October 1960, College degree, Senior Economist. He wasdeputydirector of Sihong County Food Bureau, deputygeneral manager of Yanghe Group,Director and vice president of Company. At present, he ischairman of the supervisorycommittee, member of standing committee, chairman oflaborunion, director of BlueAlliance.
Mr. Chen Taiqing, born in May 1965, Master degree, Senior Political Engineer, memberof communist party of China. He was member of the party committee of Yanghe Group,
director of executive office, member of the Company’s party committee, director ofhuman resource department, director of integrated department, president assistant,deputygeneral manager of Yanghe Branch of the Company and secretary of disciplineinspection committee of Yanghe. At present, he is supervisor, vice secretary of the partycommittee, general manager and secretary of the party committee of ShuanggouDistillery.
Ms. Zhou Wenqi, born in April 1966, College degree, Senior Accountant. She wasfinancial director of Shanghai Jieqiang No.3 and No.4 distribution center, financialassistant, deputy manager, manager of Shanghai Jieqiang Tobacco Sugar & Wine(Group) Co., Ltd. She is Supervisor of Yanghe and CFO of Shanghai Jieqiang TobaccoSugar & Wine (Group) Co., Ltd. currently.
Mr. Chen Taisong, born in January 1968, Master degree. He was member, secretary ofSiyang Legal Bureau, and secretary,deputysection chief, section chief, director assistant,deputydirector of Siyang Government Office, alcalde and secretary of the partycommittee of Chuancheng Town in Siyang Country, vice secretary of the party committeeand secretary of discipline inspection commission and chairman of the supervisorycommittee of Su Wine Industrial Co., Ltd., vice secretary of discipline inspectioncommittee of Yanghe. At present, he is supervisor, member of standing committee,director of organization department of the Company, vice secretary of the partycommittee and secretary of discipline inspection committee and chairman of thesupervisory committee of Su Wine Trade Group.
3.3 Senior management
Mr. Zhong Li, President of the Company, resume as above.Mr. Cong Xuenian, vice president of the Company, resume as above.Mr. Zhou Xinhu, vice president of the Company, resume as above.Ms. Lin Qing, born in May 1975, Master degree, Senior Accountant, Certified PublicAccountant. She was deputy director of enterprise department of Suqian Finance Bureau,director assistant of Suqian Price Bureau, member and vice director of the partycommittee of National Development and Reform Commission, member of the standingcommittee of Yanghe, vice president of the Company. At present, she is member of thestanding committee of Yanghe and vice president of the Company.
Mr. Zhen Bujun, born in January 1967, MBA, Senior Engineer. He was general Managerof Yanghe Group, general manager of Suqian State-owned Investment Co., Ltd.,deputygeneral manager of Shuanggou Distillery, logistics andpurchasing director andpresident assistant of Yanghe. At present, he is vice president, member of the standingcommittee of the Company, general manager and secretary of the party committee ofSiyang Branch of the Company.
Mr. Zhu Wei, born in May 1977, Master of Nanjing University. He was director of humanresource department of the Company, director of marketing department, chief marketing
officer and deputygeneral manager of Su Wine Trade Group, director of strategy studies,deputygeneral manager of Su Wine Trade Group. At present, he is vice president ofYanghe and general manager of Su Wine Trade Group.
Position in Shareholder-Holding Companies√ Applicable ? N/A
Name
Name | Name of Shareholder-Holding Companies | Positionin ShareholderHolding Companies | Beginning Date of office term | Ending Date of office term | AnyremunerationsreceivedfromShareholder-Holding Companies |
Han Feng | Jiangsu Yanghe Group Co.,Ltd. | Chairman of the board,general manager | 2012.03.08 | NO | |
Zhou Wenqi | ShangHai jieqiang Tobacco Sugar & Wine (Group) Co.,Ltd. | CFO | 2013.07.01 | YES | |
Wang Kai | Shanghai Haiyan Logistics Development Co.,Ltd. | Deputygeneral manager | 2017.03.01 | YES | |
Wang Yao | Jiangsu Blue Alliance Joint-Stock Co., Ltd. | Director | 2016.07.26 | NO | |
Feng Pantai | Jiangsu Blue Alliance Joint-Stock Co., Ltd. | Director | 2016.07.26 | NO | |
Cong Xuenian | Jiangsu Blue Alliance Joint-Stock Co., Ltd. | Director | 2016.07.26 | NO |
Position in Other Companies√ Applicable ? N/A
Name | Name of Other Companies | Position in Other Companies | Beginning Date | Ending Date | Anyremunerationsreceivedfrom Other Companies |
Han Feng | Suqian Industry Development Group Co.,Ltd. | Chairman of the board, secretary of the the party committee | 2011.09.05 | YES | |
Han Feng | Jiangsu Yanghe Group Co.,Ltd. | Chairman of the board,general manager | 2012.03.08 | NO | |
Han Feng | Jiangsu Shuanggou Group Co.,Ltd. | Chairman of the board,General Manager | 2012.03.08 | NO | |
Xu Zhijian | Nanjing University | Professor | 2003.11.11 | YES | |
Xu Zhijian | Nanjing Port Co., Ltd. | Non-executivedirector | 2016.03.30 | YES | |
Xu Zhijian | Jiangsu Maysta Chemical Co., Ltd. | Non-executivedirector | 2015.12.04 | YES | |
Xu Zhijian | Glarun Technology Co.,Ltd. | Non-executivedirector | 2017.05.12 | YES | |
Xu Zhijian | Yangzhou Rixing Bio-Tech Co., Ltd. | Non-executivedirector | 2019.02.12 | YES | |
Cai Yunqing | Chinese Nutrition Society | Supervisor | 2017.05.01 | NO | |
Cai Yunqing | Jiangsu Intelligent Aged Research Association | Vice president | 2017.03.01 | NO | |
Cai Yunqing | Chinese Nutrition Society | Honorary president | 2015.04.01 | NO | |
Cai Yunqing | State Food and Drug Administration | Evaluation experts of health food | 2008.08.01 | NO | |
Ji Xueqing | Nanjing Suhe Venture Capital Center (Limited Partnership) | Chairman of the board | 2017.01.01 | NO | |
Ji Xueqing | Xuzhou Zm-Besta Heavy Steel Structure Co., Ltd | Supervisor | 2017.03.01 | NO | |
Ji Xueqing | China Soft Investment Group | Partner | 2017.01.01 | NO | |
Ji Xueqing | Nanjing Balance Network Technology Co., Ltd. | Non-executivedirector | 2017.10.01 | YES | |
Ji | Nanjing Li Heng Investment | Director | 2017.01.01 | NO |
Name
Name | Name of Other Companies | Position in Other Companies | Beginning Date | Ending Date | Anyremunerationsreceivedfrom Other Companies |
Xueqing | Limited Partnership | ||||
Ji Xueqing | Jiangsu Efful Science and Technology Co.,Ltd | Supervisor | 2018.03.01 | NO | |
Ji Xueqing | China University Innovation and Entrepreneurship Incubator Alliance | Vice president | 2018.07.01 | NO | |
Chen Tongguang | Yangzhou University Yangda Branch | General manager | 2013.10.01 | YES | |
Chen Tongguang | Yangzhou Yangjie Electronic Technology Co.,Ltd. | Non-executivedirector | 2017.06.19 | YES |
Punishments imposed in the recent three years by the securities regulators on theincumbent directors, supervisors and senior management as well as those who left in thereporting period? Applicable √ N/A
4. Remuneration of directors, supervisors and seniormanagement
Thedecision-making procedures, decision basis and actual remuneration payment ofdirectors, supervisors and senior management.
Decision-making procedures: Implementation is based on the "Trial ImplementationMeasures for the Annual Salary of General Manager (Revision)” approved by the 9
th
meeting of the second board of directors on 29 December 2008 and "TrialImplementation Measures for the Annual Salary of Chairman of the Board (Revision)”approved by the first extraordinary general meeting of shareholders on 18 January 2009.
Decision basis: Based on the Company's operating conditions and considering thestandard of regional economic, industry and market.
Actual remuneration payment: Based on the performance and payment on timeaccording to the salary system.
Remuneration of directors, supervisors and senior management during the reportingperiod
Unit: 0,000CNY
Name | Position | Gender | Age | Incumbent/ Former | Total before-tax remuneration from the Company | Remuneration from related parties of the Company |
Wang Yao | Chairman of the board | Male | 54 | Incumbent | 142.62 | No |
Zhong Yu | Deputy Chairman of the board, president | Male | 55 | Incumbent | 145.89 | No |
Han Feng | Director | Male | 57 | Incumbent | 0 | Yes |
Wang Kai | Director | Male | 42 | Incumbent | 0 | Yes |
Cong | Director,vice | Male | 53 | Incumbent | 109.52 | No |
Name
Name | Position | Gender | Age | Incumbent/ Former | Total before-tax remuneration from the Company | Remuneration from related parties of the Company |
Xuenian | president,secretary of the board,CFO | |||||
Zhou Xinhu | Director,vice president,chief engineer | Male | 57 | Incumbent | 109.36 | No |
Liu Huashuang | director | Male | 49 | Incumbent | 110.52 | No |
Xu Zhijian | Non-executive director | Male | 55 | Incumbent | 6 | No |
Cai Yunqing | Non-executive director | Female | 67 | Incumbent | 6 | No |
Ji Xueqing | Non-executive director | Male | 48 | Incumbent | 6 | No |
Chen Guangtong | Non-executive director | Male | 53 | Incumbent | 6 | No |
Feng Pantai | Chairman of supervisory committee | Male | 59 | Incumbent | 107.06 | No |
Chen Taiqing | Supervisor | Male | 54 | Incumbent | 104.6 | No |
Chen Yiqin | Supervisor | Male | 58 | Former | 0 | Yes |
Zhou Wenqi | Supervisor | Female | 53 | Incumbent | 0 | Yes |
Chen Taisong | Supervisor | Male | 51 | Incumbent | 108.22 | No |
Lin Qing | Vice president | Female | 44 | Incumbent | 102.05 | No |
Zhen Bujun | Vice president | Male | 52 | Incumbent | 107.36 | No |
Zhu Wei | Vice president | Male | 42 | Incumbent | 109.54 | No |
Total | 1,280.74 |
Share incentives for directors, supervisors and senior executives in the reporting period√ Applicable ? N/A
5. Staff in the Company
5.1 Number, functions and educational backgrounds of the staff
Number of in-service staff of the Company | 7,081 |
Number of in-service staff of main subsidiaries | 8,209 |
Total number of in-service staff | 15,290 |
Total number of staff with remuneration in the period | 15,290 |
Number of retirees to whom the Company or its main subsidiaries need to pay retirement pension | 0 |
Functions | |
Function by category | Number of staff |
Production | 5,957 |
Sales | 5,259 |
R&D | 1,861 |
Financial | 221 |
Administrative | 1,661 |
Inner Retired
Inner Retired | 331 |
Total | 15,290 |
Educational backgrounds | |
Educational background by category | Number of staff |
Master | 260 |
Bachelor | 3,605 |
Junior college | 4,079 |
Senior high school | 3,476 |
Junior high school and below | 3,870 |
Total | 15,290 |
5.2 Staff remuneration policy
The remuneration consists of basic payments, performance-related payments and benefitfloat award. The Company implemented the mechanism of position self-promotion, andprepared the Management Measures for Position Self-promotion. According to the thepositions and duties, major work of the department, andin respect of quantity, quality,efficiency and economic value, the Company aimed to establish a quantified andassessable quantitative and qualitative indicators. The compensation and welfare ofemployees was adjusted in 2018 to further reflect the principles of "to each according tohis work" and "more pay for more work”. It encourages employees to be spontaneousand to improve their work efficiency. It further improves the Company's managementlevel, and achieves a win-win situation between the Company and employees
5.3 Staff training plans
In 2018, the Company will lay a solid foundation for training from three aspects: lecturer,curriculum and educational affairs. In terms of lecturers, dynamic management is realized.On the basis of the original lecturers, 365 lecturers at all levels are employed throughassessment, selection, elimination and promotion; In terms of curriculum, curriculumdevelopment and case extraction were used. 24 basic courses, 10 travel and studycourses, 14 professional technical courseswere developed throughout the year, and 80excellent cases were selected, among which 24 cases won awards. In terms ofeducational affairs, double teacher system teaching is actively promoted to facilitatetraining effects.
Over the past year, the Company has successfully built a panoramic and immersiveteaching platform for business learning, which has enriched the Company's trainingresources. Through this platform and external lecturers, the Company has implementedstrategic reserve talents program, hundreds of talents program, dealer training programand so on. According to the annual training plan, subsidiary companies organize trainingin marketing, production technology, functional management and other aspects toimprove the business skills and comprehensive quality of employees. Businessdepartments carry out professional training according to its business needs. 766 trainingsessions were organized and 38,939 employees were trained all around the year.
5.4 Labor outsourcing
? Applicable √ N/A
Section IX Corporate Governance
1. Basic situation of corporate governance
The Company constantly perfects corporate governance structure and internal controlsystem to enhance the corporate governance level strictly according to the CorporateLaw, the Securities Law, The Listed Company Governance Standards, Rules GoverningListing of Stocks on Shenzhen Stock Exchange and Guidelines on Standard Operation ofSME Board Listed Companies on Shenzhen Stock Exchange and other relevant lawsand regulations. The Company operates normatively with sound corporate governanceand normative information disclosure. The situation of corporate governance of theCompany meets the requirements of authority files of listed company corporategovernance by CSRC.
1.1. Shareholders and shareholders’ general meeting
According to the regulations such as Articles of Incorporation, Company Rules ofProcedure of The Shareholders’ General Meeting,the Company convenes and holds theshareholders’ general meeting and discusses business affairs in the meeting normatively.The Company hires legal advisor to issue the legal opinion for the shareholders’ generalmeeting; The Company can treat all shareholders equally, and especially makes minorityshareholders have equal status and fully exercise their own power. During the reportingperiod, the Company held 2 shareholders’ general meeting and 10 proposals werepassed in the meeting. The board carried out all the decisions made by the annualmeeting of shareholders carefully.
1.2. Relationship between controlling shareholders and listed company
According to the requirement of the Company Law, the controlling shareholders takeduties of sponsor and undertake commitments. During the reporting period, controllingshareholders have no priority beyond the rights of shareholders’ general meeting todirectly and indirectly affect the decision-marking and operation of the Company. There isno situation that controlling shareholders damage the legal interests of othershareholders. The Company and the controlling shareholders implement independentaccounting of personnel, assets, finance, organizations and business. They takeresponsibilities and risks separately. There is no significant related party transactionbetween the Company and the controlling shareholders. There is no situation thatcontrolling shareholders occupy the funds of the listed company and the listed companytenders guarantee for controlling shareholders and the subsidiaries.
1.3. Directors and board of directors
The directors are elected seriously under the regulations of the Corporate Law andArticles of Incorporation. The board of the Company consists of 11 directors including 4non-executive directors. The structure of the board of directors satisfies the requirementsof laws and regulations. The board discusses business affairs according to CorporateLaw and Articles of Incorporation. All the directors are able to attend the meeting andtake responsibilities diligently according to the Discussion Rules of the Board of Directors,The Working System of Non-executive Directors, and Behavior Guidelines of Directors of
SME Board Listed Companies. All the directors seriously consider proposals and makescientific and reasonable decisions for significant events. They also protect the legalinterests of the Company and all shareholders. Strategy Committee, NominationCommittee, Audit Committee, Remuneration and Appraisal Committee are 4 professionalcommittees set under the board. The Committees have clear division of work andresponsibilities and fully play professional role to offer scientific and professionalsuggestions for the decision-making of the board.
1.4. Supervisors and board of supervisors
The supervisors are elected according to the Corporate Law and the Articles ofIncorporation. The board of supervisors of the Company consists of 5 supervisors,including 2 staff representative supervisors. The structure of the board of supervisorssatisfies the requirements of laws and regulations. The board of supervisors discussesbusiness affairs according to corporate law and articles of incorporation. Supervisors canattend the meeting according to the requirements of Rules of Discussion Rules of theBoard of Supervisors. They takes their own responsibilities seriously, supervises andmakes independent suggestions for the Company’s significant events, financialconditions and the duties of directors and CEO, thereby, protecting legal interests of theCompany and shareholders.
1.5. Mechanism of evaluation and motivation
The Company keeps improving the mechanism of evaluation and motivation. Theappointment of directors, supervisor and senior managers is open and transparent, whichsatisfies the requirements of relevant regulations and laws. The fair and transparentevaluation mechanism of the management has been built. During the reporting period,the management carried out the performance assessment according to the goal ofannual operation plan. The management takes their responsibilities seriously and fulfillsthe duties and completed the operation management tasks arranged by the board ofdirectors.
1.6. Stakeholders
The Company fully respects and protects legal interests of stakeholders and fulfills theduties of social responsibility. The Company strengthens the awareness of socialresponsibility and achieves the interest balance among society, shareholders, companyand employees. The clients and suppliers can be treated honestly and every employee istrained seriously. The Company adheres to principles of win-win of stakeholders andpushes forward the harmonious and sound development.
1.7. Information disclosure and transparency
The information disclosure of the Company is implemented according to therequirements of supervision departments. The Company seriously implements the rulesincluding Information Disclosure Management Rule and Investors RelationshipManagement Rule. The Company enhances the management of information disclosureaffairs and takes responsibility of information disclosure legally and carefully, achieving
the accuracy, integrity, fairness, timeliness of information disclosure. The information canbe equally obtained by all shareholders. The media of public disclosure for the Companyare Securities Times, Shanghai Securities News, China Securities Journal, SecuritiesDaily, www.cninfo.com.cn.
1.8. Investors relationship management
The Company focuses on the management of investors relationship to protect legal rightsof investors. Except for the duties like diligence or honesty, the Chairman of the board,the president, the board secretary have good communications and interactions withinvestors through reception of investor investigation and participating in performanceexplanation session and broker strategy meeting online. As the professional organizationfor investor relationship management, the securities department strengthens thecommunication with investors through telephone, email and irm.cninfo.com.cn. It fullymakes sure that investors have right to know and protects their legal interests.
1.9. Methods of improving internal control system construction
The Company keeps on enhancing the corporate governance and the internal controlsystem, which improves the management to a higher level. The Audit Committee fullyexamines and supervises the financial condition,the efficiency of internal control,theefficiency and rationality of corporate governance. The audit department of the Company,as an internal audit unit, carries out regular and continuous examination on perfectionand implement situation of internal control system. It finds the Internal control defects andimproves deficiencies timely, thus the effectiveness of internal control can be guaranteed.The operation management and anti-risk capacity are enhanced.
Any incompliance with the regulatory documents issued by the CSRC governing thegovernance of listed companies?Yes√ No
There is no incompliance with the regulatory documents issued by the CSRC governingthe governance of listed companies
2. Independency of businesses, personnel, assets,organizations and finance which are separate from thecontrolling shareholder
2.1. In the aspect of business
The Company has independent and integrated business structure and the ability tooperate independently in the market. There is no horizontal competition betweencontrolling shareholders and the Company. Besides, there is no such kind of situationthat controlling shareholders intervene with operation of the Company directly orindirectly.
2.2 In the aspect of personnel
The Company has built independent personnel management system and salarymanagement system. Furthermore, the Company signed labor contracts with employees.Chairman of the board, the president, vicepresident, the board secretary and theresponsible person for the Company’s financial affairs obtain compensation from theCompany rather than the controlling shareholders. The directors, senior managers andsupervisors do not have positions illegally in other companies that have the same orsimilar business.
2.3 In the aspect of assets
There are clear property relations between the Company and controlling shareholders.The Company owns the independent land usage right and ownership of buildings. TheCompany independently registers and manages the properties with setting up accountsand accounting treatment for them. There is no situation that the controlling shareholdersoccupy and control the assets of the Company or intervene the operation management ofthe assets.
2.4 In the aspect of organization
The Company has well-structured organization system, including the shareholders’general meeting, the board of directors, supervisory committee, the management andfunctional departments. Related internal management and control system is establishedfor clear division of function and interaction with each other. It forms an organic wholethat ensures the legal operation.There is no affiliation with functional departments ofcontrolling shareholders.
2.5 In the aspect of finance
Our company has completed and independent organization with professional financialemployees. Independent accounting system and financial management are established.The Company sets bank accountants, pays taxes and makes financial decisionsseparately. There is no situation that controlling shareholders affect the financialmanagement.
3. Horizontal competition
?Applicable √N/A
4. Annual meeting of shareholders and special meetings ofshareholders convened during the reporting period
4.1. Meetings of shareholders convened during the reporting period
Meeting
Meeting | Type | Investor participation ratio | Convened date | Disclosure Date | Disclosure Index |
2018 First Extraordinary General Meeting of shareholders | Extraordinary General Meeting of shareholders | 75.55% | 29 January 2018 | 30 January 2018 | Announcement No. 2018-005, disclosed on www.cninfo.com.cn |
2017 Annual | General Meeting | 77.43% | 23 May 2018 | 24 Nay | Announcement No. |
General Meetingof shareholders
General Meeting of shareholders | of shareholders | 2018 | 2018-022, disclosed on www.cninfo.com.cn |
4.2. Special meetings of shareholders convened at the request ofpreference shareholders with resumed voting rights
?Applicable √ N/A
5. Performance of non-executive directors during thereporting period
5.1. Attendance of non-executive directors in board meeting andmeeting of shareholders
Attendance of non-executive directors in board meeting | |||||||
Non-executive director | Presence due in the reporting period(times) | Presence on site(times) | Presence by telecommunication(times) | Presence through a proxy(times) | Absence(times) | Absence for two consecutive times | Presence(times) |
Xu Zhijian | 6 | 4 | 1 | 1 | 0 | No | 2 |
Cai Yunqing | 6 | 5 | 1 | 0 | 0 | No | 2 |
Ji Xueqing | 6 | 5 | 1 | 0 | 0 | No | 2 |
Chen Tongguang | 6 | 5 | 1 | 0 | 0 | No | 2 |
Explanation of absence of non-executive directors in meetings of the board for twiceN/A
5.2. Objections from non-executive directors in related issues of thecompany
Were there any objections on related issues of the Company from non-executivedirectors?? Yes √ NoNon-executive director has no objection on related issues of the Company during thereporting period.
5.3. Other details about the performance of duties by non-executivedirectors
Were there any suggestions from non-executive directors adopted by the Company?√ Yes ? NoExplanation about advice of non-executive directors is adopted by the Company or notCompany adopted the advice of non-executive directors.
6. Performance of duties by special committees under thebroad during the reporting period
1).During the reporting period, the Strategic Committee held 1 meeting. It investigated2017 the board work report in advance, made the 2018 annual work plan, offeredscientific and reasonable suggestions and fulfilled the duties.2).During the reporting period, the Nominations Committee held 2 meeting. It examinedthe qualification of Candidates nominatedfor directors at the general election of the boardof directors and persons nominated in charge of the internal audit institution. Thecommittee fulfilled the duties.3).During the reporting period, the Audit Committee held 5 meetings. It reviewed theaffairs seriously including periodic reports, regular audit by internal audit department andspecial audit. It knows about the financial and operational conditions in detail andexamines the execution of internal control system. It plays a effective role in guidanceand supervision. The committee fulfilled the duties.4).During the reporting period, the Remuneration and Appraisal Committee held 1meeting. It examines the salary of directors and senior managers in 2017.The informationdisclosure of the Company about the salary of directors and senior managers is correctand true and as the same as the examination.
7. Performance of duties by the supervisory committee
Were there any risks to the Company identified by Supervisory Committee whenperforming its duties during the reporting period? Yes √ NoThe Supervisory Committee has no objection during the reporting period.
8. Evaluation and motivation mechanism for the senior management
At the beginning of the establishment of the evaluation and motivation mechanism, it wasexplicitly illustrated in Trial Implementation Measures for the Annual Salary of GeneralManager (Revision). The evaluation and motivation of senior managers are mainlyreflected in annual salary system. The board of directors evaluates and motivates thesenior managers mainly according to the satisfaction of clients, safety index, quality indexand financial index. The management implements the annual salary system. The basicpart of annual salary is paid monthly on average and the remaining part will be paid atthe end of the year according to the results of evaluation. If it does not reach theevaluation index, the remaining parts will not be paid. In 2018, the Remuneration andAppraisal Committee examined the situation of the management’s performance in 2017.In the opinion of the committee, during the reporting period, the management hasachieved the main purpose of sustainable development.
9. Internal control
9.1. Significant internal control deficiencies found in the reportingperiod
? Yes √ No
9.2. Internal control self-assessment report
Disclosure date of the internalcontrol self-assessment report
Disclosure date of the internal control self-assessment report | 2019-04-30 | |
Disclosure index of the internal control self-assessment report | For details, please refer to the internal control self-assessment report disclosed on www.cninfo.com.cn on 30 April 2019 | |
Ratio of the total assets of the appraised entitles to the consolidated total assets | 99.08% | |
Ratio of the operating revenues of the appraised entitles to the consolidated operating revenue | 99.52% | |
Defect identification standard | ||
Type | Financial-report related | Non-financial-report related |
Qualitative standard | (1) The indicators of significantdeficiencies of financial report including :i. Corrupt transaction of directors,senior managers and supervisors;ii. The management cannot figure out the significant misstatement during the operation process of operation, but these misstatements are found by others ;iii. Based on the results of evaluation of internal control, the significantdeficienciesare not rectified;iv. Audit Committee and Internal Audit Agency are not effective in supervising the internal control.(2) The indicators ofmaterialdeficiencies including:i. Accounting policy has not been chosen or used under the general accepted accounting principles;ii. The anti-fraud program and control measures have not been built;iii. The controlling system or compensation system of accounting treatment of irregular or special trade has not formed;iv. The control of the process of financial reporting at the period end exist the situation that one or more deficiencies are found and the veracity and accuracy cannot be proved.(3) general control deficiencies refers to the other control defects except for significant defects and important defects above. | If condition below appears, it can be considered as significantdeficiencies, others can be divided into material defect or general defect according to impact extent.:(1) The Company suffer from serious mistakes and major property loss due to lake of democratic decision-making procedures or unscientific procedures;(2) Violate national regulations and laws seriously;(3) Lake of important management system or it doesn’t work;(4) Significant or materialdeficiencies of internal control cannot be regulated in time;(5)Materialdeficiencies of internal control appear continuously or in quantity. |
Quantitative standard | Significantdeficiencies:Misstatement> 3% of total operating revenue;Misstatement > 5% of gross profits;Misstatement > 2% of total assets. Materialdeficiencies:1% of total operating revenue < Misstatement≤3% of total operating revenue;3% of gross profits< Misstatement≤5% of gross profits; 1% of | Significantdeficiencies:ratio of loss of total assets≥1%. Materialdeficiencies: 0.5%≤ratio of loss of total assets<1% Generaldeficiencies:ratio of loss of total assets<0.5% |
total assets< Misstatement≤2% of totalassets.Generaldeficiencies: Misstatement≤1% oftotal operating revenue; Misstatement≤3%of net profits;Misstatement≤1% of totalassets
total assets< Misstatement≤2% of total assets. Generaldeficiencies: Misstatement≤1% of total operating revenue; Misstatement≤3% of net profits;Misstatement≤1% of total assets | ||
Number of financial-report significant defects | 0 | |
Number of non-financial-report significant defects | 0 | |
Number of important financial-report related defects | 0 | |
Number of important Non-financial-report related defects | 0 |
10. Auditor’s report on internal control
N/A
Section X Information about Corporate Bond
Whether there exists a public issue and listing of corporate bond that is not yet due orfailed to be redeemed at the date of the financial report authorized.No
Section XI Financial Report
I.Auditor’s report
Type of audit report
Type of audit report | Standard without reserved opinion |
Signing date of auditor’s report | 2019-04-29 |
Name of Audit | Jiangsu Suya Jincheng Certified Public Accountants LLP |
No. of auditor’s report | Suya Audit [2019] No.783 |
Names of auditors | Xu Xuzheng, Kan Baoyong |
Auditor’s Report
To the shareholders of Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.:
Opinion
We have audited the financial statements of Jiangsu Yanghe Brewery Joint-Stock Co.,
Ltd. (hereinafter referred to as the “Company”), which comprise the consolidated balance
sheet and balance sheet as at 31 December 2018, consolidated income statement andincome statement, consolidated cash flow statement and cash flow statement,consolidated statement of changes in owners' equity and statement of changes inowners' equity for the year then ended; and notes to the financial statements.In our opinion, the attached financial statements are prepared, in all material respects, inaccordance with Accounting Standards for Business Enterprises and present fairly thefinancial position of the company as at 31 December 2018 and its operating results andcash flow for the year then ended.
Basis for opinion
We conducted our audit in accordance with China Standards on Auditing (“CSAs”) forCertified Public Accountants. Our responsibilities under those standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Codeof professional ethics for Certified Public Accountants in China (“the Code”), and we havefulfilled our other ethical responsibilities in accordance with the Code. We believe that theaudit evidence we have obtained is sufficient and appropriate to provide a basis for ouropinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of mostsignificance in our audit of the consolidated financial statements of the current period.These matters were addressed in the context of our audit of the consolidated financialstatements as a whole and, in forming our opinion thereon, and we do not provide aseparate opinion on these matters. Key audit matters identified in our audit aresummarized as follows:
1.Recognition of revenue
1.Recognition of revenue | |
Please refer to accounting policies in note 3 of Notes III.Significant accounting policies and accounting estimates and Notes V. Notes to the Main Items of the Consolidated Financial Statements 29 | |
Key audit matters | How our audit addressed the Key Audit Matter |
The Company’s specific condition of revenue recognition is that revenue is recognized after customer acceptance based on payment received or obtaining the rights of claiming payment for goods according to signed sales contracts or agreements. In 2018, the Company’s annual operating revenue was CNY 24.16 billion, up 21.30% from last year. It increased greatly andoperating revenue is an important component of income statement. Therefore, we identified operating revenue as a key audit matter. | Our procedures in relation to revenue recognition included: (1)Understood, tested and evaluated the effectiveness of internal control of sales and cash receipts cycle designed and executed by the management. (2)Judged whether there is an abnormal fluctuation of revenue in the reporting period with the analytic review of revenue and gross profit margin in combination with product category. (3)Sampling inspection of supporting documents related to revenue recognition including sales contracts or orders, invoices, delivery lists or receiving reports, shipping lists and bank slips. (4)Implemented the external confirmation of selected major franchisers and inspected the payback of account receivables after the reporting period in combination with audit of accounts receivable. (5)Sampling inspection of calculation and accounting treatment of sales discount and sales allowance (6)Chose samples from sales revenue records before and after the balance sheet date, inspected related supporting documents and evaluated whether the revenue recorded in the appropriate accounting period. |
2. Existence, valuation and allocation of inventories | |
Please refer to accounting policies in note 12 of Notes III.Significant accounting policies and accounting estimates and Notes V. Notes to the Main Items of the Consolidated Financial Statements 5 | |
Key audit matters | How our audit addressed the Key Audit Matter |
As of December 31, 2018, the book value of inventory is CNY 13.892 billion, accounting for 28.03% of the total assets and 38.72% of all current assets. The book value of the inventories at year end is relatively large and accounts for a | Our procedures in relation to existence, valuation, allocation of inventories included: (1)Understood and evaluated the effectiveness of management's design and implementation of inventory-related internal control. (2)Carried out the inventory analysis review |
relatively large proportion of the totalassets at year end. Therefore, theexistence, valuation and apportionmentof inventories are identified as a key auditmatter.
relatively large proportion of the total assets at year end. Therefore, the existence, valuation and apportionment of inventories are identified as a key audit matter. | procedure. (3)Implement stock-taking procedures at the end of the period. (4)Sample check of production cost calculation table and other cost accounting data, and conducted valuation test on inventory, and evaluated the accuracy of closing balance of inventory. (5)Obtained the calculation table of inventory depreciation reserve, conduct the inventory impairment test, reviewed the inventory impairment test process, and checked whether the provision for inventory is made sufficiently. |
Other information
The directors of the Company are responsible for the other information. The otherinformation comprises the information included in the annual report, but does not includethe financial statements and our auditor’s report thereon.Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.In connection with our audit of the financial statements, our responsibility is to read theother information and, in doing so, consider whether the other information is materiallyinconsistent with the financial statements or our knowledge obtained in the audit orotherwise appears to be materially misstated.If, based on the work we have performed, we conclude that there is a materialmisstatement of this other information; we are required to report that fact. We havenothing to report in this regard.
Responsibilities of directors and those charged with governance for thefinancial statements
The directors of the Company are responsible for the preparation of the financialstatements that give a true and fair view in accordance with the disclosure requirementsof Accounting Standards for Business Enterprises, and designing, implementing andmaintaining internal control that is necessary to ensure the financial statements are freefrom material misstatement, whether due to fraud or error.In preparing the financial statements, the directors are responsible for assessing theCompany’s ability to continue as a going concern, disclosing, as applicable, mattersrelated to going concern and using the going concern basis of accounting unless thedirectors either intend to liquidate the Company or to cease operations, or have norealistic alternative but to do so.Those charged with governance are responsible for overseeing the Company’s financialreporting process.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement, whether due to fraud or error,and to issue an auditor’s report that includes our opinion. Reasonable assurance is ahigh level of assurance, but is not a guarantee that an audit conducted in accordancewith CSAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if, individually or in the aggregate,they could reasonably be expected to influence the economic decisions of users taken onthe basis of these financial statements.
As part of an audit in accordance with CSAs, we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
(1)Identify and assess the risks of material misstatement of the financial statements,whether due to fraud or error, design and perform audit procedures responsive to thoserisks, and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error, as fraud may involve collusion, forgery,intentional omissions, misrepresentations, or the override of internal control.(2)Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances, but not for the purpose ofexpressing an opinion on the effectiveness of the Company’s internal control.(3)Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by the directors.(4)Conclude on the appropriateness of the directors’ use of the going concern basis ofaccounting and, based on the audit evidence obtained, whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company’sability to continue as a going concern. If we conclude that a material uncertainty exists,we are required to draw attention in our auditor’s report to the related disclosures in thefinancial statements or, if such disclosures are inadequate, to modify our opinion. Ourconclusions are based on the audit evidence obtained up to the date of our auditor’sreport. However, future events or conditions may cause the Company to cease tocontinue as a going concern.(5)Evaluate the overall presentation, structure and content of the financial statements,including the disclosures, and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.(6)Obtain sufficient and appropriate audit evidence regarding the financial information ofthe entities or business activities within the Company to express an opinion on thefinancial statements. We are responsible for the direction, supervision and performanceof the group audit. We remain solely responsible for our audit opinion.We communicate with those charged with governance regarding, among other matters,the planned scope and timing of the audit and significant audit findings, including anysignificant deficiencies in internal control that we identify during our audit.We also provide the governance with a statement that we have complied with relevantethical requirements regarding independence, and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence, and where applicable, related safeguards.
From the matters communicated with the governance, we determine those matters thatwere of most significance in the audit of the consolidated financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor’s report unless law or regulation precludes public disclosure about the matter orwhen, in extremely rare circumstances, we determine that a matter should not becommunicated in our report because the adverse consequences of doing so wouldreasonably be expected to outweigh the public interest benefits of such communication.
Jiangsu Suya Jincheng Certified Public Accountants LLPNanjing, China
Kan BaoyongCertified Public Accountant of China
Xu Xuzheng,Certified Public Accountant of China
29 April 2019
II.Financial statements
Prepared by: Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.
Consolidated balance sheet
As at December 31, 2018
Unit: CNY
Item
Item | Balance as at 31 December 2018 | Balance as at 31 December 2017 |
Current assets: | ||
Cash and cash equivalents | 3,615,348,307.97 | 1,751,452,876.18 |
Settlement reserves | ||
Lending funds | ||
Financial assets measured at fair value through current profit or loss | ||
Derivative financial assets | ||
Notes and accounts receivables | 247,961,412.36 | 221,297,619.40 |
Including: Notes receivables | 242,542,097.76 | 212,812,236.57 |
Accounts receivables | 5,419,314.60 | 8,485,382.83 |
Prepayment | 18,984,169.54 | 86,661,808.28 |
Premiums receivable | ||
Reinsurance accounts receivable | ||
Reinsurance contract reserve | ||
Other receivables | 47,908,184.37 | 57,084,601.83 |
Including:Interests receivable | ||
Dividends receivable | ||
Buying back the sale of financial assets | ||
Inventories | 13,892,118,587.74 | 12,861,503,434.11 |
Item
Item | Balance as at 31 December 2018 | Balance as at 31 December 2017 |
Assets held for sale | ||
Non-current assets due within one year | 1,120,000,000.00 | 552,200,000.00 |
Other current assets | 16,932,480,348.96 | 12,996,375,380.41 |
Total current assets | 35,874,801,010.94 | 28,526,575,720.21 |
Non-current assets: | ||
Disbursement of loans and advances | ||
Available-for-sale financial assets | 2,713,455,624.66 | 3,460,279,142.76 |
Held-to-maturity investments | ||
Long-term receivables | ||
Long-term equity investments | 9,423,328.82 | 1,980,046.94 |
Investment property | ||
Fixed assets | 7,833,665,282.19 | 8,249,559,468.26 |
Construction in progress | 154,535,104.82 | 235,219,521.41 |
Productive biological assets | ||
Oil and gas assets | ||
Intangible assets | 1,781,961,687.10 | 1,653,546,427.07 |
Development expenses | ||
Goodwill | 276,001,989.95 | 276,001,989.95 |
Long-term deferred expenses | 907,636.00 | 1,091,644.16 |
Deferred tax assets | 714,003,966.82 | 649,659,107.71 |
Other non-current assets | 205,012,184.92 | 204,227,633.91 |
Total non-current assets | 13,688,966,805.28 | 14,731,564,982.17 |
Total assets | 49,563,767,816.22 | 43,258,140,702.38 |
Current liabilities: | ||
Short-term loans | ||
Borrowings from the central bank | ||
Deposits from customers and inter-bank | ||
Loans from other banks | ||
Financial liabilities measured at fair value through current profit or loss | ||
Derivative financial liabilities | ||
Notes and accounts payable | 1,261,282,397.89 | 1,119,603,574.47 |
Advance from customer | 4,468,409,150.75 | 4,199,846,323.30 |
Financial assets sold for repurchase | ||
Handling charges and commissions payable | ||
Employee benefits payable | 185,751,373.59 | 209,658,648.29 |
Taxes payable | 3,255,458,759.72 | 2,289,562,127.67 |
Other payable | 6,457,301,511.01 | 5,620,040,515.94 |
Including:Interests payable | ||
Dividends payable | ||
Reinsurance accounts payable | ||
Insurance contract reserves | ||
Customer brokerage deposits | ||
Securities underwriting brokerage deposits | ||
Liabilities held for sale | ||
Non-current liabilities due within one year | ||
Other current liabilities | ||
Total current liabilities | 15,628,203,192.96 | 13,438,711,189.67 |
Non-current liabilities: | ||
Long-term loans | 109,088.00 | 145,452.00 |
Bonds payable |
Item
Item | Balance as at 31 December 2018 | Balance as at 31 December 2017 |
Including: Preference shares | ||
Perpetual bonds | ||
Long-term payables | 198,404,248.85 | 199,107,530.75 |
Long-term payroll payables | ||
Accrued liabilities | ||
Deferred income | 98,513,500.00 | 107,349,666.67 |
Deferred tax liabilities | 14,019,256.05 | 17,957,771.10 |
Other non-current liabilities | ||
Total non-current liabilities | 311,046,092.90 | 324,560,420.52 |
Total liabilities | 15,939,249,285.86 | 13,763,271,610.19 |
Shareholders' equity | ||
Share capital | 1,506,988,000.00 | 1,506,988,000.00 |
Other equity instruments | ||
Including: preference shares | ||
Perpetual bonds | ||
Capital reserves | 741,704,076.44 | 741,704,076.44 |
Less: treasury stock | ||
Other comprehensive income | -141,964,710.15 | 915,704.03 |
Special reserves | ||
Surplus reserves | 753,494,000.00 | 753,494,000.00 |
General risk reserve | ||
Undistributed profits | 30,784,308,899.94 | 26,511,938,505.25 |
Total equity attributable to owners of the parent company | 33,644,530,266.23 | 29,515,040,285.72 |
Non-controlling interests | -20,011,735.87 | -20,171,193.53 |
Total owners' equity | 33,624,518,530.36 | 29,494,869,092.19 |
Total liabilities and owners' equity | 49,563,767,816.22 | 43,258,140,702.38 |
Legal representative: Wang YaoPerson in charge of accounting affairs: Cong XuenianPerson in charge of accounting department: Yin Qiuming
Balance sheet of parent company
As at December 31, 2018
Unit: CNY
Item | Balance as at 31 December2018 | Balance as at 31 December2017 |
Current assets: | ||
Cash and cash equivalents | 1,849,574,170.07 | 1,109,561,846.20 |
Financial assets measured at fair value through current profit or loss | ||
Derivative financial assets | ||
Notes and accounts receivables | 840,733,649.03 | 7,689,657,390.04 |
Including:Notes receivables | 143,456,446.32 | 162,947,960.82 |
Accounts receivables | 697,277,202.71 | 7,526,709,429.22 |
Prepayment | 250,592,759.90 | 2,635,654.78 |
Other receivables | 949,089,213.52 | 3,765,791,270.10 |
Including:Interests receivable | ||
Dividends receivable | 713,143.77 | 2,605,425,138.06 |
Inventories | 10,378,077,915.50 | 9,944,024,331.15 |
Assets held for sale | ||
Non-current assets due within one year | 700,000,000.00 | 150,000,000.00 |
Other current assets | 12,338,796,250.84 | 8,803,227,424.95 |
Total current assets | 27,306,863,958.86 | 31,464,897,917.22 |
Item
Item | Balance as at 31 December2018 | Balance as at 31 December2017 |
Non-current assets: | ||
Available-for-sale financial assets | 1,231,283,468.30 | 2,038,625,617.54 |
Held-to-maturity investments | ||
Long-term receivables | ||
Long-term equity investments | 7,365,139,180.24 | 5,408,241,180.24 |
Investment property | ||
Fixed assets | 5,008,615,512.59 | 5,402,239,827.59 |
Construction in progress | 92,262,796.92 | 50,756,425.20 |
Productive biological assets | ||
Oil and gas assets | ||
Intangible assets | 1,252,482,032.31 | 1,275,763,366.60 |
Development expenses | ||
Goodwill | ||
Long-term deferred expenses | ||
Deferred tax assets | 5,734,535.64 | 6,093,941.15 |
Other non-current assets | 179,613,182.42 | 165,885,624.34 |
Total non-current assets | 15,135,130,708.42 | 14,347,605,982.66 |
Total assets | 42,441,994,667.28 | 45,812,503,899.88 |
Current liabilities: | ||
Short-term loans | ||
Financial liabilities measured at fair value through current profit or loss | ||
Derivative financial liabilities | ||
Notes and accounts payables | 1,159,053,261.86 | 1,166,484,374.31 |
Advance from customer | 14,339,833,591.92 | 21,608,300,346.42 |
Employee benefits payable | ||
Taxes payable | 1,069,550,625.85 | 383,026,142.73 |
Other payables | 183,715,786.65 | 169,460,166.49 |
Including: Interests payable | ||
Dividends payable | ||
Liabilities held for sale | ||
Non-current liabilities due within one year | ||
Other current liabilities | ||
Total current liabilities | 16,752,153,266.28 | 23,327,271,029.95 |
Non-current liabilities: | ||
Long-term loans | 109,088.00 | 145,452.00 |
Bonds payable | ||
Including: Preference shares | ||
Perpetual bonds | ||
Long-term payables | 145,105,136.65 | 145,437,496.65 |
Long-term payroll payables | ||
Accrued liabilities | ||
Deferred income | 79,166.67 | |
Deferred tax liabilities | ||
Other non-current liabilities | ||
Total non-current liabilities | 145,214,224.65 | 145,662,115.32 |
Total liabilities | 16,897,367,490.93 | 23,472,933,145.27 |
Shareholders' equity | ||
Share capital | 1,506,988,000.00 | 1,506,988,000.00 |
Other equity instruments | ||
Including: preference shares | ||
Perpetual bonds | ||
Capital reserves | 1,341,628,480.93 | 1,341,628,480.93 |
Less: treasury stock |
Item
Item | Balance as at 31 December2018 | Balance as at 31 December2017 |
Other comprehensive income | ||
Special reserves | ||
Surplus reserves | 753,494,000.00 | 753,494,000.00 |
Undistributed profits | 21,942,516,695.42 | 18,737,460,273.68 |
Total owners' equity | 25,544,627,176.35 | 22,339,570,754.61 |
Total liabilities and owners' equity | 42,441,994,667.28 | 45,812,503,899.88 |
Consolidated income statement
Unit: CNY
Item | Year 2018 | Year 2017 |
1. Total operating revenue | 24,159,801,994.68 | 19,917,942,238.16 |
Including:Operating revenue | 24,159,801,994.68 | 19,917,942,238.16 |
Interest income | ||
Earned premium | ||
Fee and commission income | ||
2. Total operating costs | 14,352,364,432.50 | 11,741,569,054.09 |
Including:cost of sales | 6,353,242,198.27 | 6,681,148,562.16 |
Interest expense | ||
Handling charges and commission expenses | ||
Refunded premiums | ||
Net payments for insurance claims | ||
Net provision for insurance contracts | ||
Bond insurance expense | ||
Reinsurance expenses | ||
Taxes and surcharges | 3,769,929,974.08 | 1,151,869,831.30 |
Selling and distribution expenses | 2,561,401,628.22 | 2,387,447,107.05 |
General and administrative expenses | 1,704,265,102.61 | 1,506,402,859.73 |
Research and Development expenses | 27,565,217.63 | 25,745,247.20 |
Financial expenses | -65,138,636.76 | -33,912,331.47 |
Including:Interest expenses | 3,273.00 | 3,927.00 |
Interest income | 69,133,580.05 | 48,793,842.12 |
Impairment losses | 1,098,948.45 | 22,867,778.12 |
Plus: Other income | 63,352,983.06 | 44,745,640.94 |
Investment income ("-" for losses) | 918,292,794.49 | 623,953,064.97 |
Including: income from investment in associates and joint ventures | 1,819,591.30 | -1,299,882.30 |
Gains from the changes in fair values(“-“ for losses) | ||
Foreign exchange gains ("-"for losses) | ||
Gains from disposal of assets("-" for losses) | 24,568,477.22 | -8,598,844.11 |
3. Operating profits ("-"for losses) | 10,813,651,816.95 | 8,836,473,045.87 |
Plus: non-operating income | 37,931,006.18 | 19,822,054.76 |
Less: non-operating expenses | 12,397,034.29 | 8,340,532.81 |
4. Total profits before tax ("-"for total losses) | 10,839,185,788.84 | 8,847,954,567.82 |
Less: income tax expenses | 2,723,855,894.34 | 2,229,168,424.15 |
Item
Item | Year 2018 | Year 2017 |
5. Net profit ("-"for net loss) | 8,115,329,894.50 | 6,618,786,143.67 |
(1)Net profit from continuing operation ("-" for losses) | 8,115,329,894.50 | 6,618,786,143.67 |
(2) Net profit from discontinued operation ("-" for losses) | ||
Attributable to owners of the parent company | 8,115,189,794.69 | 6,627,169,959.16 |
Attributable to non-controlling interests | 140,099.81 | -8,383,815.49 |
6.Net of tax from other comprehensive income | -142,861,056.33 | -226,957.05 |
Net of tax from other comprehensive income to the owner of the parent company | -142,880,414.18 | -225,943.44 |
(1)Other comprehensive income cannot reclassified into the profit and loss: | ||
Including: Remeasure the variation of net indebtedness or net asset of defined benefit plans | ||
Share in other comprehensive income that cannot be classified into profit and loss under equity method | ||
(2)Other comprehensive income that will be reclassified into the profit and loss | -142,880,414.18 | -225,943.44 |
Including: Share in other comprehensive income that will be classified into profit and loss under equity method | ||
Changes in fair value of available-for-sale financial assets | -140,593,969.30 | |
Held-to-maturity investment reclassified into available-for sale financial assets | ||
Effective part of cash-flow hedge profit and loss | ||
Balance arising from the translation of foreign currency financial statements | -2,286,444.88 | -225,943.44 |
Others | ||
Net of tax from other comprehensive income to non-controlling interests | 19,357.85 | -1,013.61 |
7. Total comprehensive income | 7,972,468,838.17 | 6,618,559,186.62 |
Total comprehensive income attributable to owners of the parent company | 7,972,309,380.51 | 6,626,944,015.72 |
Total comprehensive income attributable to non-controlling interests | 159,457.66 | -8,384,829.10 |
8. Earnings per share | ||
(1)Basic earnings per share | 5.3850 | 4.3976 |
(2)Diluted earnings per share | 5.3850 | 4.3976 |
Legal representative: Wang YaoPerson in charge of accounting affairs: Cong XuenianPerson in charge of accounting department: Yin Qiuming
Income statement of parent company
Unit: CNY
Item | Year 2018 | Year 2017 |
1. Operating revenue | 9,720,079,677.82 | 7,287,432,948.05 |
Less: Cost of sales | 5,063,636,970.41 | 6,025,125,159.75 |
Taxes and surcharges | 3,135,358,096.00 | 790,967,616.84 |
Selling and distribution expenses |
Item
Item | Year 2018 | Year 2017 |
General and administrative expenses | 925,750,206.21 | 790,164,204.69 |
Research and Development expenses | 25,250,014.30 | 23,319,255.22 |
Financial expenses | -39,822,309.22 | -129,591,360.68 |
Including: Interest expenses | 3,273.00 | 3,927.00 |
Interest income | 40,645,696.27 | 136,991,923.30 |
Impairment losses | 291,592.62 | 480,654.94 |
Plus: Other income | 10,553,184.71 | 12,565,700.00 |
Investment income ("-" for losses) | 6,719,750,712.77 | 5,917,308,205.89 |
Including: income from investment in associates and joint ventures | -2,074,635.42 | |
Gains from the changes in fair values(“-“ for losses) | ||
Gains from disposal of assets("-" for losses) | 26,210,243.55 | -547,317.20 |
2. Operating profits ("-"for losses) | 7,366,129,248.53 | 5,716,294,005.98 |
Plus: non-operating income | 4,826,890.48 | 2,466,263.97 |
Less: non-operating expenses | 11,501,547.44 | 4,200,000.00 |
3. Total profits before tax ("-"for total losses) | 7,359,454,591.57 | 5,714,560,269.95 |
Less: income tax expenses | 311,578,769.83 | 28,288,566.97 |
4. Net profit ("-"for net loss) | 7,047,875,821.74 | 5,686,271,702.98 |
(1)Net profit from continuing operation ("-" for losses) | 7,047,875,821.74 | 5,686,271,702.98 |
(2)Net profit from discontinued operation ("-" for losses) | ||
5.Net of tax from other comprehensive income | ||
(1)Other comprehensive income cannot reclassified into the profit and loss: | ||
Including: Remeasure the variation of net indebtedness or net asset of defined benefit plans | ||
Share in other comprehensive income that cannot be classified into profit and loss under equity method | ||
(2)Other comprehensive income that will be reclassified into the profit and loss | ||
Including: Share in other comprehensive income that will be classified into profit and loss under equity method | ||
Changes in fair value of available-for-sale financial assets | ||
Held-to-maturity investment reclassified into available-for sale financial assets | ||
Effective part of cash-flow hedge profit and loss | ||
Balance arising from the translation of foreign currency financial statements | ||
Others | ||
6. Total comprehensive income | 7,047,875,821.74 | 5,686,271,702.98 |
7. Earnings per share | ||
(1)Basic earnings per share | ||
(2)Diluted earnings per share |
Consolidated Statement of Cash Flows
Unit: CNY
Item | Year 2018 | Year 2017 |
1. Cash flows from operating activities | ||
Cash received from sale of goods and rendering of services | 28,105,243,671.54 | 23,711,590,313.33 |
Net increase in customer bank deposits and placement from banks and other financial institutions | ||
Net increase in loans from central bank |
Item
Item | Year 2018 | Year 2017 |
Net increase in loans from other financial institutions | ||
Premiums received from original insurance contracts | ||
Net cash received from reinsurance business | ||
Net increase in deposits and investments from policyholders | ||
Net increase for disposal of financial assets measured at their fair values and of which the changes are recorded into the current profits and losses | ||
Cash received from interest, handling charges and commissions | ||
Net increase in placements from other financial institutions | ||
Net capital increase in repurchase business | ||
Refunds of taxes and surcharges | ||
Cash received from other operating activities | 1,493,570,444.98 | 427,432,452.11 |
Sub-total of cash inflows from operating activities | 29,598,814,116.52 | 24,139,022,765.44 |
Cash paid for goods purchased and services received | 7,042,490,432.34 | 6,973,376,753.35 |
Net increase in loans and advances to customers | ||
Net increase in deposits in central bank and other banks and financial institutions | ||
Cash paid for original insurance contract claims | ||
Cash paid for interests, handling charges and commissions | ||
Cash paid for policy dividends | ||
Cash paid to and on behalf of employees | 1,786,871,082.15 | 1,532,216,356.37 |
Cash paid for taxes and surcharges | 8,525,778,929.78 | 6,535,601,442.87 |
Cash paid for other operating activities | 3,186,924,855.97 | 2,214,658,413.54 |
Sub-total of cash outflows from operating activities | 20,542,065,300.24 | 17,255,852,966.13 |
Net cash flows from operating activities | 9,056,748,816.28 | 6,883,169,799.31 |
2. Cash flows from investing activities | ||
Cash received from disposal of investments | 34,357,728,481.60 | 30,400,345,558.70 |
Cash received from returns on investments | 859,477,665.90 | 564,117,891.26 |
Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 45,125,913.95 | 608,832.88 |
Net cash received from disposal of subsidiaries and other business units | ||
Cash received from other investing activities | 5,116,000.00 | |
Sub-total of cash inflows from investing activities | 35,262,332,061.45 | 30,970,188,282.84 |
Cash paid to acquire and construct fixed assets, intangible assets and other long-term assets | 471,045,188.55 | 325,345,429.44 |
Cash paid for investments | 38,140,628,997.25 | 34,805,329,229.53 |
Net increase in pledge loans | ||
Net cash paid to acquire subsidiaries and other business units | 535,902.84 | |
Cash paid for other investing activities | ||
Sub-total of cash outflows from investing activities | 38,611,674,185.80 | 35,131,210,561.81 |
Net cash flows from investing activities | -3,349,342,124.35 | -4,161,022,278.97 |
3. Cash flows from financing activities | ||
Cash received from investors | ||
Including: cash received by subsidiaries from investments by minority shareholders | ||
Cash received from borrowings | ||
Cash received from bonds issue | ||
Cash received from other financing activities | 1,500,000.00 |
Item
Item | Year 2018 | Year 2017 |
Sub-total of cash inflows from financing activities | 1,500,000.00 | |
Cash paid for debt repayments | 36,364.00 | 36,364.00 |
Cash paid for distribution of dividends and profits or payment of interest | 3,842,822,673.00 | 3,169,375,338.20 |
Including: dividends and profits paid to minority shareholders by subsidiaries | 4,696,611.20 | |
Cash paid for other financing activities | 247,704,388.41 | |
Sub-total of cash outflows from financing activities | 3,842,859,037.00 | 3,417,116,090.61 |
Net cash flows from financing activities | -3,841,359,037.00 | -3,417,116,090.61 |
4. Effect of fluctuation in exchange rate on cash and cash equivalents | -652,223.14 | -11,705,912.52 |
5. Net increase in cash and cash equivalents | 1,865,395,431.79 | -706,674,482.79 |
Plus: balance of cash and cash equivalents at the beginning of the period | 1,749,952,876.18 | 2,456,627,358.97 |
6. Balance of cash and cash equivalents at the end of the period | 3,615,348,307.97 | 1,749,952,876.18 |
Cash flow statements of parent company
Unit: CNY
Item | Year 2018 | Year 2017 |
1. Cash flows from operating activities | ||
Cash received from sale of goods and rendering of services | 10,544,075,256.24 | 4,993,174,559.67 |
Refunds of taxes and surcharges | ||
Cash received from other operating activities | 3,092,072,776.21 | 9,395,953,342.76 |
Sub-total of cash inflows from operating activities | 13,636,148,032.45 | 14,389,127,902.43 |
Cash paid for goods purchased and services received | 5,540,860,474.37 | 6,084,319,424.50 |
Cash paid to and on behalf of employees | 757,469,214.50 | 628,353,375.71 |
Cash paid for taxes and surcharges | 3,502,337,711.58 | 1,959,696,424.05 |
Cash paid for other operating activities | 622,232,077.34 | 153,591,847.77 |
Sub-total of cash outflows from operating activities | 10,422,899,477.79 | 8,825,961,072.03 |
Net cash flows from operating activities | 3,213,248,554.66 | 5,563,166,830.40 |
2. Cash flows from investing activities | ||
Cash received from disposal of investments | 23,961,387,686.52 | 13,595,278,733.32 |
Cash received from returns on investments | 6,665,894,034.18 | 8,423,249,140.68 |
Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 43,946,408.08 | 16,755,029.89 |
Net cash received from disposal of subsidiaries and other business units | ||
Cash received from other investing activities | ||
Sub-total of cash inflows from investing activities | 30,671,228,128.78 | 22,035,282,903.89 |
Cash paid to acquire and construct fixed assets, intangible assets and other long-term assets | 217,004,834.57 | 325,294,764.78 |
Cash paid for investments | 29,083,948,000.00 | 24,564,483,908.37 |
Net cash paid to acquire subsidiaries and other business units | ||
Cash paid for other investing activities | ||
Sub-total of cash outflows from investing activities | 29,300,952,834.57 | 24,889,778,673.15 |
Net cash flows from investing activities | 1,370,275,294.21 | -2,854,495,769.26 |
3. Cash flows from financing activities |
Item
Item | Year 2018 | Year 2017 |
Cash received from investors | ||
Cash received from loans | ||
Cash received from bonds issue | ||
Cash received from other financing activities | ||
Sub-total of cash inflows from financing activities | ||
Cash paid for debt repayments | 36,364.00 | 36,364.00 |
Cash paid for distribution of dividends and profits or payment of interest | 3,842,822,673.00 | 3,164,678,727.00 |
Cash paid for other financing activities | ||
Sub-total of cash outflows from financing activities | 3,842,859,037.00 | 3,164,715,091.00 |
Net cash flows from financing activities | -3,842,859,037.00 | -3,164,715,091.00 |
4. Effect of fluctuation in exchange rate on cash and cash equivalents | -652,488.00 | -4,821,072.81 |
5. Net increase in cash and cash equivalents | 740,012,323.87 | -460,865,102.67 |
Plus: balance of cash and cash equivalents at the beginning of the period | 1,109,561,846.20 | 1,570,426,948.87 |
6. Balance of cash and cash equivalents at the end of the period | 1,849,574,170.07 | 1,109,561,846.20 |
Consolidated statement of changes in shareholders' equity
For the year ended 31 December, 2018
Unit: CNY
Item
Item | Year 2018 | ||||||||||||
Equity attributable to owners of the parent company | Non-controlling interests | Total shareholders' equity | |||||||||||
Share capital | Other equity instruments | Capital reserve | Less:Treasury stock | Other Comprehensive Income | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | |||||
Preferred stock | Perpetual bond | Other | |||||||||||
1. Balance as at 31 December of last year | 1,506,988,000.00 | 741,704,076.44 | 915,704.03 | 753,494,000.00 | 26,511,938,505.25 | -20,171,193.53 | 29,494,869,092.19 | ||||||
Plus: adjustments for changes in accounting policies | |||||||||||||
Adjustments for correction of accounting errors in prior year | |||||||||||||
Business combinations under common control |
Item
Item | Year 2018 | ||||||||||||
Equity attributable to owners of the parent company | Non-controlling interests | Total shareholders' equity | |||||||||||
Share capital | Other equity instruments | Capital reserve | Less:Treasury stock | Other Comprehensive Income | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | |||||
Preferred stock | Perpetual bond | Other | |||||||||||
Others | |||||||||||||
2. Balance as at January 1 of the current year | 1,506,988,000.00 | 741,704,076.44 | 915,704.03 | 753,494,000.00 | 26,511,938,505.25 | -20,171,193.53 | 29,494,869,092.19 | ||||||
3.Increases/decreases in the current year (“-” for decreases) | -142,880,414.18 | 4,272,370,394.69 | 159,457.66 | 4,129,649,438.17 | |||||||||
(1) Total comprehensive income | -142,880,414.18 | 8,115,189,794.69 | 159,457.66 | 7,972,468,838.17 | |||||||||
(2) Capital contributed or reduced by owners | |||||||||||||
Capital contributions by owners |
Item
Item | Year 2018 | ||||||||||||
Equity attributable to owners of the parent company | Non-controlling interests | Total shareholders' equity | |||||||||||
Share capital | Other equity instruments | Capital reserve | Less:Treasury stock | Other Comprehensive Income | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | |||||
Preferred stock | Perpetual bond | Other | |||||||||||
Capital contributions by other equity instruments holders | |||||||||||||
Amounts of share-based payments recognized in owners' equity | |||||||||||||
Others | |||||||||||||
(3) Profit distribution | -3,842,819,400.00 | -3,842,819,400.00 | |||||||||||
Withdrawal of surplus reserves | |||||||||||||
Withdrawal of general risk reserve | |||||||||||||
Profit distributed to owners (or | -3,842,819,400.00 | -3,842,819,400.00 |
Item
Item | Year 2018 | ||||||||||||
Equity attributable to owners of the parent company | Non-controlling interests | Total shareholders' equity | |||||||||||
Share capital | Other equity instruments | Capital reserve | Less:Treasury stock | Other Comprehensive Income | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | |||||
Preferred stock | Perpetual bond | Other | |||||||||||
shareholders) | |||||||||||||
Others | |||||||||||||
(4) Internal carry-forward of owners' equity | |||||||||||||
Conversion of capital reserves into paid-in capital | |||||||||||||
Conversion of surplus reserves into paid-in capital | |||||||||||||
Surplus reserves offsetting losses | |||||||||||||
Carry-forward of retained earnings |
Item
Item | Year 2018 | ||||||||||||
Equity attributable to owners of the parent company | Non-controlling interests | Total shareholders' equity | |||||||||||
Share capital | Other equity instruments | Capital reserve | Less:Treasury stock | Other Comprehensive Income | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | |||||
Preferred stock | Perpetual bond | Other | |||||||||||
from changes in defined benefit plans | |||||||||||||
Others | |||||||||||||
(5) Special reserves | |||||||||||||
Withdrawal for the period | |||||||||||||
Use for the period | |||||||||||||
(6) Others | |||||||||||||
4. Balance as at 31 December of the current year | 1,506,988,000.00 | 741,704,076.44 | -141,964,710.15 | 753,494,000.00 | 30,784,308,899.94 | -20,011,735.87 | 33,624,518,530.36 |
For the year ended 31 December, 2017
Unit: CNY
Item | Year 2017 | ||||||||||
Equity attributable to owners of the parent company | Non-controlling | Total shareholders' | |||||||||
Share capital | Other equity instruments | Capital | Less: | Other | Special | Surplus | General | Undistributed |
Preferred stock
Preferred stock | Perpetual bond | Other | reserve | Treasury stock | Comprehensive Income | reserve | reserve | risk reserve | profit | interests | equity | ||
1. Balance as at 31 December of last year | 1,506,988,000.00 | 741,704,076.44 | 1,141,647.47 | 753,494,000.00 | 23,049,443,346.09 | -15,785,202.54 | 26,036,985,867.46 | ||||||
Plus: adjustments for changes in accounting policies | |||||||||||||
Adjustments for correction of accounting errors in prior year | |||||||||||||
Business combinations under common control | |||||||||||||
Others | |||||||||||||
2. Balance as at January 1 of the current year | 1,506,988,000.00 | 741,704,076.44 | 1,141,647.47 | 753,494,000.00 | 23,049,443,346.09 | -15,785,202.54 | 26,036,985,867.46 | ||||||
3.Increase | -225,943.44 | 3,462,495,159.16 | -4,385,990.99 | 3,457,883,224.73 |
Item
Item | Year 2017 | ||||||||||||
Equity attributable to owners of the parent company | Non-controlling interests | Total shareholders' equity | |||||||||||
Share capital | Other equity instruments | Capital reserve | Less:Treasury stock | Other Comprehensive Income | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | |||||
Preferred stock | Perpetual bond | Other | |||||||||||
s/decreases in the current year (“-” for decreases) | |||||||||||||
(1) Total comprehensive income | -225,943.44 | 6,627,169,959.16 | -8,384,829.10 | 6,618,559,186.62 | |||||||||
(2) Capital contributed or reduced by owners | 3,998,838.11 | 3,998,838.11 | |||||||||||
Capital contributions by owners | |||||||||||||
Capital contributions by other equity instruments holders | |||||||||||||
Amounts of share- |
Item
Item | Year 2017 | ||||||||||||
Equity attributable to owners of the parent company | Non-controlling interests | Total shareholders' equity | |||||||||||
Share capital | Other equity instruments | Capital reserve | Less:Treasury stock | Other Comprehensive Income | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | |||||
Preferred stock | Perpetual bond | Other | |||||||||||
based payments recognized in owners' equity | |||||||||||||
Others | 3,998,838.11 | 3,998,838.11 | |||||||||||
(3) Profit distribution | -3,164,674,800.00 | -3,164,674,800.00 | |||||||||||
Withdrawal of surplus reserves | |||||||||||||
Withdrawal of general risk reserve | |||||||||||||
Profit distributed to owners (or shareholders) | -3,164,674,800.00 | -3,164,674,800.00 | |||||||||||
Others | |||||||||||||
(4) Internal carry-forward of owners' equity |
Item
Item | Year 2017 | ||||||||||||
Equity attributable to owners of the parent company | Non-controlling interests | Total shareholders' equity | |||||||||||
Share capital | Other equity instruments | Capital reserve | Less:Treasury stock | Other Comprehensive Income | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | |||||
Preferred stock | Perpetual bond | Other | |||||||||||
Conversion of capital reserves into paid-in capital | |||||||||||||
Conversion of surplus reserves into paid-in capital | |||||||||||||
Surplus reserves offsetting losses | |||||||||||||
Carry-forward of retained earnings from changes in defined benefit plans | |||||||||||||
Others | |||||||||||||
(5) Special reserves |
Item
Item | Year 2017 | ||||||||||||
Equity attributable to owners of the parent company | Non-controlling interests | Total shareholders' equity | |||||||||||
Share capital | Other equity instruments | Capital reserve | Less:Treasury stock | Other Comprehensive Income | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | |||||
Preferred stock | Perpetual bond | Other | |||||||||||
Withdrawal for the period | |||||||||||||
Use for the period | |||||||||||||
(6) Others | |||||||||||||
4. Balance as at 31 December of the current year | 1,506,988,000.00 | 741,704,076.44 | 915,704.03 | 753,494,000.00 | 26,511,938,505.25 | -20,171,193.53 | 29,494,869,092.19 |
Statement of changes in shareholders' equity of parent company
For the year ended 31 December, 2018
Unit: CNY
Item | Year 2018 | ||||||||||
Share capital | Other equity instruments | Capital reserve | Less:Treasury stock | Other Comprehensive Income | Special reserve | Surplus reserve | Undistributed profit | Total shareholders' equity | |||
Preferred stock | Perpetual bond | Other | |||||||||
1. Balance as at 31 December of last year | 1,506,988,000.00 | 1,341,628,480.93 | 753,494,000.00 | 18,737,460,273.68 | 22,339,570,754.61 | ||||||
Plus: |
Item
Item | Year 2018 | ||||||||||
Share capital | Other equity instruments | Capital reserve | Less:Treasury stock | Other Comprehensive Income | Special reserve | Surplus reserve | Undistributed profit | Total shareholders' equity | |||
Preferred stock | Perpetual bond | Other | |||||||||
adjustments for changes in accounting policies | |||||||||||
adjustments for correction of accounting errors in prior year | |||||||||||
Others | |||||||||||
2. Balance as at January 1 of the current year | 1,506,988,000.00 | 1,341,628,480.93 | 753,494,000.00 | 18,737,460,273.68 | 22,339,570,754.61 | ||||||
3.Increases/decreases in the current year (“-” for decreases) | 3,205,056,421.74 | 3,205,056,421.74 | |||||||||
(1) Net profit | 7,047,875,821.74 | 7,047,875,821.74 | |||||||||
(2)Capital contributed or reduced by owners | |||||||||||
Capital contributions by owners | |||||||||||
Capital contributions by |
Item
Item | Year 2018 | ||||||||||
Share capital | Other equity instruments | Capital reserve | Less:Treasury stock | Other Comprehensive Income | Special reserve | Surplus reserve | Undistributed profit | Total shareholders' equity | |||
Preferred stock | Perpetual bond | Other | |||||||||
other equity instruments holders | |||||||||||
Amounts of share-based payments recognized in owners' equity | |||||||||||
Others | |||||||||||
(3)Profit distribution | -3,842,819,400.00 | -3,842,819,400.00 | |||||||||
Withdrawal of surplus reserves | |||||||||||
Profit distributed to owners (or shareholders) | -3,842,819,400.00 | -3,842,819,400.00 | |||||||||
Others | |||||||||||
(4) Internal carry-forward of owners' equity | |||||||||||
Conversion of capital reserves into paid-in capital | |||||||||||
Conversion of surplus reserves into paid-in capital | |||||||||||
Surplus |
Item
Item | Year 2018 | ||||||||||
Share capital | Other equity instruments | Capital reserve | Less:Treasury stock | Other Comprehensive Income | Special reserve | Surplus reserve | Undistributed profit | Total shareholders' equity | |||
Preferred stock | Perpetual bond | Other | |||||||||
reserves offsetting losses | |||||||||||
Carry-forward of retained earnings from changes in defined benefit plans | |||||||||||
Others | |||||||||||
(5) Special reserves | |||||||||||
Withdrawal for the period | |||||||||||
Use for the period | |||||||||||
(6) Others | |||||||||||
4. Balance as at 31 December of the current year | 1,506,988,000.00 | 1,341,628,480.93 | 753,494,000.00 | 21,942,516,695.42 | 25,544,627,176.35 |
For the year ended 31 December, 2017
Unit: CNY
Item | Year 2017 | ||||||||||
Share capital | Other equity instruments | Capital reserve | Less:Treasury stock | Other Comprehensive Income | Special reserve | Surplus reserve | Undistributed profit | Total shareholders' equity | |||
Preferred stock | Perpetual bond | Other | |||||||||
1. Balance as | 1,506,988,000.00 | 1,341,628,480.93 | 753,494,000.00 | 16,215,863,370.70 | 19,817,973,851.63 |
Item
Item | Year 2017 | ||||||||||
Share capital | Other equity instruments | Capital reserve | Less:Treasury stock | Other Comprehensive Income | Special reserve | Surplus reserve | Undistributed profit | Total shareholders' equity | |||
Preferred stock | Perpetual bond | Other | |||||||||
at 31 December of last year | |||||||||||
Plus: adjustments for changes in accounting policies | |||||||||||
adjustments for correction of accounting errors in prior year | |||||||||||
Others | |||||||||||
2. Balance as at January 1 of the current year | 1,506,988,000.00 | 1,341,628,480.93 | 753,494,000.00 | 16,215,863,370.70 | 19,817,973,851.63 | ||||||
3.Increases/decreases in the current year (“-” for decreases) | 2,521,596,902.98 | 2,521,596,902.98 | |||||||||
(1) Net profit | 5,686,271,702.98 | 5,686,271,702.98 | |||||||||
(2)Capital contributed or reduced by owners | |||||||||||
Capital |
Item
Item | Year 2017 | ||||||||||
Share capital | Other equity instruments | Capital reserve | Less:Treasury stock | Other Comprehensive Income | Special reserve | Surplus reserve | Undistributed profit | Total shareholders' equity | |||
Preferred stock | Perpetual bond | Other | |||||||||
contributions by owners | |||||||||||
Capital contributions by other equity instruments holders | |||||||||||
Amounts of share-based payments recognized in owners' equity | |||||||||||
Others | |||||||||||
(3)Profit distribution | -3,164,674,800.00 | -3,164,674,800.00 | |||||||||
Withdrawal of surplus reserves | |||||||||||
Profit distributed to owners (or shareholders) | -3,164,674,800.00 | -3,164,674,800.00 | |||||||||
Others | |||||||||||
(4) Internal carry-forward of owners' equity | |||||||||||
Conversion of capital reserves into paid-in capital |
Item
Item | Year 2017 | ||||||||||
Share capital | Other equity instruments | Capital reserve | Less:Treasury stock | Other Comprehensive Income | Special reserve | Surplus reserve | Undistributed profit | Total shareholders' equity | |||
Preferred stock | Perpetual bond | Other | |||||||||
Conversion of surplus reserves into paid-in capital | |||||||||||
Surplus reserves offsetting losses | |||||||||||
Carry-forward of retained earnings from changes in defined benefit plans | |||||||||||
Others | |||||||||||
(5) Special reserves | |||||||||||
Withdrawal for the period | |||||||||||
Use for the period | |||||||||||
(6) Others | |||||||||||
4. Balance as at 31 December of the current year | 1,506,988,000.00 | 1,341,628,480.93 | 753,494,000.00 | 18,737,460,273.68 | 22,339,570,754.61 |
III. Company profile
Jiangsu Yanghe Brewery Joint-Stock Co., Ltd.(hereinafter referred to as “theCompany”)was established on 26 December 2002, verified by the Government ofJiangsu Province, details referred to Reply on The approval of Establishment of JiangsuYanghe Brewery Joint-Stock Co., Ltd. by the provincial government (SuZhengFu[2002]No.155), and it was a joint-stock company founded by Jiangsu Yanghe GroupCo.,Ltd., Shanghai Haiyan Logistics Development Co.,Ltd., Nantong Zongyi InvestmentCo.,Ltd.,Shanghai Jieqiang Tobacco Sugar & Wine (Group) Co.,Ltd., Jiangsu VentureCapital Co.,Ltd., China National Research Institute of Food and Fermentation IndustriesCo. Ltd., Nantong Shengfu Industrial Trade Co., Ltd. and Yang Yandong and other totally14 nature persons. On 27 December, the Compamy obtained the unified social creditcode (91460000201357188U) issued by Jiangsu Provincial Administration for Industryand Commerce. The registered capital was CNY 68 million and the share capital was68,000,000 (CNY 1 per share). According to the documents verified by Jiangsu ProvincialDepartment of Finance (Su Cai Guo Zi [2002] No.178), all the fund capital converts intoshare capital according to the ratio 1:0.65561,among which, Jiangsu Yanghe GroupCo.,Ltd contributed CNY 52,264,100 of evaluated physical assets and CNY 735,900 ofcurrency, covered into 34,747,330 shares, accounting for 51.099% of the total sharecapital; Shanghai Haiyan Logistics Development Co.,Ltd contributed CNY 15,000,000 ofcurrency, convered into 9,834,150 shares, accounting for the 14.462% of the total sharecapital; Nantong Zongyi Investment Co.,Ltd. contributed CNY 15,000,000 of currency,converted into 9,834,150 shares, accounting for 14.462% of the total share capital;ShangHai Jieqiang Tobacco Sugar & Wine (Group) Co.,Ltd. contributed CNY 7,000,000of currency converted into 4,589,270 shares, accounting for 6.749% of the total sharecapital; Jiangsu Venture Capital Co.,Ltd. contributed CNY 3,000,000 of currencyconcerted into 1,966,830 shares, accounting for 2.892% of the total share capital; ChinaNational Research Institute of Food and Fermentation Industries Co. Ltd. contributedCNY 1,000,000 of currency, converted into 655,611 shares, accounting for 0.964% of thetotal share capital; Nantong Shengfu Industrial Trade Co., Ltd. contributed CNY1,000,000 of currency, converted into 655,611 shares, accounting for 0.964% of the totalshare capital; Yang Yandong and other totally 14 nature persons contributed CNY8,720,200 of currency, converted into 5,717,050 shares, accounting for 8.408% of thetotal share capital.
On 13 September 2009, the Company was verified by China Securities RegulatoryCommission, according to the document Reply on Approving Initial Public Offering ofJiangsu Yanghe Brewery Joint-Stock Co., Ltd.(Zheng Jian Approval [2009]No.1077).The Company announced the initial public offering of 45,000,000 commonshares on 27 February 2009 and was listed for transactions in SZSE since 6 November2009.
According to the decisions of 2010 Shareholders’ General Meeting on 23 April 2011,based on the total capital of 450,000,000 shares on 31 December 2010, the capitalreserves per 10 shares were converted into 10 shares. After the conversion, the totalshare capital of the Company was 900,000,000 as well as registered capital of CNY900,000,000.
According to the decision of 2011 Shareholders’ General Meeting on 17 May 2012,based on the total capital of 900,000,000 shares on 31 December 2011, the capitalreserves per 10 shares were converted into 2 shares. After the conversion, the totalshare capital of the Company was 1,080,000,000 as well as registered capital of CNY108,000,000.
According to the Proposal of Initial Share Repurchase of Public Shares approved by2012 Shareholders’ General Meeting on 17 May 2013, the Company used owned fundsto repurchase public shares and the price of public shares was no more than CNY 70.00per share, as well as the total amount of repurchase shares was no more than CNY 10billion. The form of repurchase was centralized competitive bidding approved by SZSE.Until May 2014, the amount of repurchase shares was 3,580,000 and the total amount ofpayment CNY 157,793,218.58. The shares repurchased had been canceled according tothe law with the procedure of capital reduction. After the repurchase, the registeredcapital became CNY 1,076,420,000 and the total share capital of the Company became1,076,420,000.
According to the decision of 2014 Shareholders’ General Meeting on 26 May 2015,based on the total capital of 1,076,420,000 shares on 31 December 2011, the capitalreserves per 10 shares were converted into 4 shares. After the conversion, the totalshare capital of the company was 1,506,988,000 as well as the registered capital of CNY1,506,988,000.
Registered address of the Company: 118 Middle Avenue,Yanghe Town, Suqian City,Jiangsu ProvinceCompany type: Incorporated company (Listed)Industry of the Company: Brewing food industryBusiness scope of the Company:production and sale of liquor, wholesaling and retailingof prepackaged food,grain purchase, self-operating and agency of import and export ofvarious types of merchandise and technology excluding merchandise and technologylimited or prohibited by the state for import and export, domestic trade, construction of e-commerce platform and online sales.( Business activities of projects needed to beapproved by law must be approved according to related departments)
Parent company of the Company:Jiangsu Yanghe Group Co.,Ltd.The scope of the Company's consolidated financial statements is based on control, andall subsidiaries are included in the consolidation scope of the consolidated financialstatements.
Changes of the scope of consolidation are as follows:
Subsidiaries that are newly incorporated into the scope of consolidation areshown in the following table:
Name
Name | Measure of acquisition |
Jiangsu Yanghe Investment Management Co.,Ltd. | Newly establishment |
Su Wine Group Nanjing Operation Management Co.,Ltd. | Newly establishment |
Jiangsu Zhongshiji Wine Industry Co.,Ltd. | Newly establishment |
Subsidiaries that are no longer incorporated into the scope of consolidation areshown in the following table:
Name | Reason |
Sihong Shuangtai Package Co.,Ltd. | Liquidation and cancellation |
Nanjing Huiteng Media Technology Co.,Ltd. | Merger and cancellation |
Details of the subsidiaries incorporated into the consolidated financial statements showon “9. Interests in subsidiaries”, Changes in the scope of consolidation show on “8.change in consolidated scope”.
IV.Basis of preparation of financial statements
1. Basis of preparation
The Company has prepared its financial statements on a going concern basis, andrecognized and measured its accounting items in compliance with the AccountingStandards for Business Enterprises—Basic Standards and various concrete accountingstandards, and other relevant provisions on the basis of actual transactions and events.
2. Going concern
The Company has sustainable operation ability for at least 12 months from the end of thereporting period. In addition, there is no significant event affecting going concern.
V. Significant accounting policies and accounting estimates
Whether the Company needs to comply with the requirement of special industryNo
The notes of detailed accounting policies and accounting estimates:
See details in Note V. 27.Changes in significant accounting policies and accountingestimates.
1. Statement of compliance with the ASBE
The financial statements of the Company have been prepared in accordance with ASBE,and present truly and completely, the group’s financial position, the Company’s andresults of operations, and changes in shareholders' equity, cash flows and other relatedinformation for the reporting period.
2. Accounting period
The Company’s accounting period is calendar year as its accounting year, i.e. fromJanuary 1st to December 31st.
3. Operating cycle
The Company’s accounting period is 12 months.
4. Functional currency
The Company has adopted China Yuan (CNY) as functional currency.
5. The accounting treatment of business combinations involvingenterprises under common control and not under common control
(1) Accounting treatment method for business combination under common control
Business combination under common control is accounted for under pooling ofinterest method.Assets and liabilities obtained by the Company through business combination undercommon control shall be measured at the book value as stated in the combine’saccounting record on the combination date. The share of the book value of themerged party’s owner’s equity in the consolidated financial statements is taken asthe initial investment cost of long-term equity investments in individual financialstatements. The capital reserve (stock premium or capital premium) is adjustedaccording to the difference between the book value of net asset acquired throughcombination and the book value of consideration paid for the combination (or totalpar value of shares issued). If the capital reserve (stock premium or capital premium)is insufficient to offset, the retained earnings shall be adjusted.
(2) Accounting treatment method of business combination not under common control
The Company accounts for business combination not under common control underpurchase method.a) All the net identifiable assets, liabilities or contingent liabilities obtained by theCompany through business combination not under common control shall bemeasured at fair value. Assets paid, liabilities incurred or assumed and the equitysecurities issued as consideration for combination are generally measured at fairvalue on the acquisition date, and differences between their fair values and bookvalues shall be included in the current profit and loss.b) The cost of acquisition shall be respectively determined for the followingconditions;
i.Business combination of a transaction implementation, the combination costshall be the sum of the fair value of the assets given, the liabilities incurred orassumed and the equity securities issued by the Company in exchange for thecontrol on the acquisition date, and contingent considerations meeting therecognition conditions. The combination cost is the initial investment costs oflong-term equity investments in individual financial statements.ii.Business combination through multiple transactions step by step to realized,the combination cost shall be the sum of the fair value measurement on theacquisition of the equity investment that holding before the acquisition date andcost of all the new investment on the acquisition date. Long-term equityinvestment cost in individual financial statements shall be the sum of the bookvalue of the equity investment that holding before the acquisition date and costof all the new investment on the acquisition date. A package deal is excluded.The Company, on the acquisition date, allocates the combination costs between theidentifiable assets and liabilities acquired
i.All assets of the acquiree obtained by the Company through businesscombination(not limited to those that have been recognized by the acquiree),other than intangible assets, shall be separately recognized and measured atfair value when the future economic benefits arising thereafter are expected toflow into the Company and the fair value can be reliably measured.ii.Intangible assets of the acquiree obtained by the Company through businesscombination shall be separately recognized and measured at fair value whentheir fair values can be reliably measured.iii. All liabilities of the acquiree obtained by the Company through businesscombination, other than contingent liabilities, shall be separately recognizedand measured at fair value when fulfillment of relevant obligations are expectedto bring future economic benefits to the Company and the fair value can bereliably measured.
iv.Contingent liabilities of the acquiree obtained by the Company throughbusiness combination shall be separately recognized as liabilities andmeasured at fair value when their fair values can be reliably measured.v.When the Company allocates the cost of business combination andrecognizes the identifiable assets and liabilities acquired through combination, itshall not include any goodwill and deferred income taxes that have beenrecognized by the acquiree before the business combination.c) Treatment of the difference between the business combination costs and the fairvalue of net identifiable asset acquired from the acquiree through combination
i.The Company shall recognize the difference of the combination costs inexcess of the fair value of the net identifiable asset acquired from the acquireethrough combination as goodwill.ii.The Company shall recognize the difference of the combination costs in shortof the fair value of the net identifiable asset acquired from the acquiree throughcombination according to the following provisions:
Review the measurement of fair values of all the identifiable assets, liabilitiesand contingent liabilities acquired from the acquiree and the combination costs;After the review, if the combination costs are still in short of the fair value of thenet identifiable asset acquired from the acquiree through combination, includethe difference in the current profit and loss.(3)Treatment of relevant expenses arising from the Company’s business combination
a) Relevant expenses directly arising from the business combination of theCompany (including the expenses for audit, legal services, evaluation andconsultation or other intermediary costs for business combination) shall be includedin the current profit and loss when they are incurred.b) Commissions, fees and other expenses paid on issuance of bonds andundertaking of other debts for the business combination shall be included in theinitial measurement amount of debt securities.
i.Where the bonds are issued at discount or par value, that part of expenses willincrease the amount of the discount;ii.Where the bonds are issued at premium, that part of expenses will decreasethe amount of the premium.c) Fees, commissions, and other transaction expenses paid on issuance of equitysecurities as combination consideration in the business combination shall beincluded in the initial measurement amount of equity securities.
i.Where the equity securities are issued at premium, that part of expenses shallbe deducted from capital reserves (stock premium);
ii.Where the equity securities are issued at par value or discount, that part ofexpenses shall be deducted from the retained earnings.
6. Preparation of consolidated financial statements
(1) Consistency of accounting policies and accounting periodAll the subsidiaries within the consolidation scope of consolidated financial statementsshall adopt the same accounting policies and accounting periods as those of theCompany. If the accounting policies or accounting periods of a subsidiary are differentfrom those of the Company, the financial statements of the subsidiary, upon preparationof consolidated financial statements, shall be adjusted according to the accountingpolicies and accounting periods of the Company.
(2) Preparation method of consolidated financial statementsThe consolidated financial statements are based on the financial statements of theCompany and its subsidiaries, and are prepared by the parent company according toother relevant information after the adjustment to long-term equity investments insubsidiaries under the equity method and the elimination of effects of the internaltransactions between the Company and its subsidiaries and between the subsidiaries onthe consolidated financial statement.
(3) Reflection of excess losses incurred to a subsidiary in the consolidated financialstatementsIn the consolidated financial statements, where the current losses undertaken by theparent company are in excess of its share of owners’ equity in the subsidiary at thebeginning of the period, the balance shall reduce the owners’ equity (retained earnings)of the parent company; where the current losses undertaken by a subsidiary’s non-controlling shareholders excess those non-controlling shareholders’ share of owners’equity in the subsidiary at the beginning of the period, the balance shall reduce the non-controlling interests.
(4) Changes in number of subsidiaries during the reporting period
a) Acquisition of subsidiaries during the reporting period
i. Treatment of acquiring subsidiaries from business combination undercommon control during the reporting periodDuring the reporting period, if the Company acquires subsidiaries from thebusiness combination under common control, the opening balance in theconsolidated balance sheet shall be adjusted. The income, expenses and
profits of the newly acquired subsidiaries from the beginning to the end of thereporting period shall be included in the consolidated income statement. Thecash flows of the newly acquired subsidiaries from the beginning to the end ofthe reporting period shall be included in the consolidated statement of cashflows.ii. Treatment of acquiring subsidiaries from business combination not undercommon control during the reporting periodDuring the reporting period, if the Company acquires subsidiaries from thebusiness combination not under common control, the opening balance in theconsolidated balance sheet shall not be adjusted. The income, expenses andprofits of the newly acquired subsidiaries from the acquisition date to the end ofthe reporting period shall be included in the consolidated income statement.The cash flows of the newly acquired subsidiaries from the acquisition date tothe end of the reporting period shall be included in the consolidated statementof cash flows.b) Treatment of disposing subsidiaries during the reporting periodDuring the reporting period, if the Company disposes subsidiaries, the openingbalance in the consolidated balance sheet shall not be adjusted. The income,expenses and profits of the newly disposed sub diaries from the beginning to thedisposal date shall be included in the consolidated income statement. The cashflows from the beginning to the disposal date shall be included in the consolidatedstatement of cash flows.
7. Classification of joint venture arrangements and the accountingtreatment method of common operation
(1) Classification of joint venture arrangementsA joint arrangement is classified as either a joint operation or a joint venture. A jointoperation is a joint arrangement whereby the joint operators have rights to the assets,and obligations for the liabilities, relating to the arrangement. A joint venture is a jointarrangement whereby the joint ventures only have the rights to the net assets under thisarrangement.A joint arrangement that is not structured through a separate vehicle shall be classifiedas a joint operation. A separate vehicle refers to a separately identifiable financialstructure, including separate legal entities or entities without a legal personality butrecognized by statute.A joint arrangement that is structured through a separate vehicle is usually classified as ajoint venture. However, when a joint arrangement provides clear evidence that it meetsany of the following requirements and complies with applicable laws and regulations as ajoint operation:
a) The legal form of the joint arrangement indicates that the parties that have jointcontrol have rights to the assets, and obligations for the liabilities, relating to thearrangement.b) The terms of the joint arrangement specify that the parties that have joint controlhave the rights to the assets, and the obligations for the liabilities, relating to thearrangement.c) Other facts and circumstances indicate that the parties that have joint controlhave rights to the assets, and the obligations for the liabilities, relating to thearrangement---for example, the parties that have joint control have rights tosubstantially all of the output of the arrangement, and the arrangement depends onthe parties that have joint control on a continuous basis for settling the liabilities ofthe arrangement.
(2) Accounting treatment of a joint operationA joint operator shall recognize the following items in relation to its interest in a jointoperation, and account for them in accordance with relevant accounting standards:
a) Its solely-held assets, and its share of any assets held jointly;b) Its solely-assumed liabilities, and its share of any liabilities incurred jointly;c) Its revenue from the sale of its share of the output arising from the joint operation;d) Its share of the revenue from sale of the output by the joint operation; ande) Its solely-incurred expenses and its share of any expenses incurred jointly.
8. Cash and cash equivalents
Cash comprises cash on hand and deposits that can be readily withdrawn on demand.Cash equivalents are the company’s short-term (due within 3 months from purchasedate), highly liquid investments that are readily convertible to known amounts of cash andwhich are subject to an insignificant risk of changes in value.
9. Foreign currency transactions and translation of foreign currencystatements
(1) Accounting method of foreign currency transactions
a) Initial recognition of foreign currency transactionsFor foreign currency transactions incurred, the Company converts the amount inforeign currency into the amount in functional currency at the spot exchange rate(middle rate) announced by the People’s Bank of China on the transaction date.Among them, for foreign currency exchange occurred or transaction involving
foreign currency exchange, the Company converts at the exchange rate actuallyadopted on the transaction date.b) Adjustment or settlement on the balance sheet date or settlement dateOn the balance sheet date or the settlement date, the Company handles foreigncurrency monetary items and foreign currency non-monetary items separately inaccordance with the following methods:
i. Accounting principles for handling foreign currency monetary itemsFor foreign currency monetary items, on the balance sheet date or thesettlement date, the Company converts them by using the spot exchange rate(middle rate) prevailing on the balance sheet date or settlement date, andadjusts the amount in functional currency of foreign currency monetary items inrespect of the difference arising from exchange rate fluctuations, which shall betreated as exchange difference at the same time. Among them, the exchangedifferences arising from foreign currency loans relating to the acquisition,construction or production of assets eligible for capitalization shall be includedin the costs of assets eligible for capitalization; other exchange differences shallbe included in the current financial expenses.
ii. Accounting principles for handling foreign currency non-monetary itemsFor foreign currency non-monetary items measured at historical cost, theCompany shall convert them at the spot exchange rate (middle rate) prevailingon the transaction date, with their amounts in functional currency remainingunchanged and no exchange differences incurred.
For an inventory that is measured at the lower of its costs or its net realizablevalues, if the net realizable value is determined in foreign currency, theCompany, when determining the value of the inventory at the end of the period,shall firstly convert the net realizable value into functional currency and thencompare it with the inventory cost reflected in functional currency.
Non-monetary items measured at fair value that is reflected in foreign currencyat the end of the period, the Company shall firstly translate the foreign currencyinto the amount in functional currency at the spot exchange rate on the datewhen the fair value is determined, and then compare it with the originalfunctional currency amount. Difference between the translated functionalcurrency amount and the original functional currency amount is treated as profitor loss from changes in fair value (including changes in exchange rate) and isrecognized in current profit and loss.
(2) Accounting treatment method for translation of foreign currency statements
a)The Company shall translate the financial statements of foreign operations inaccordance with the following methods:
i. Assets and liabilities in the balance sheets shall be translated at the spotexchange rates on balance sheet date. Shareholders’ equity items, except forthe item of "undistributed profits", are translated at the spot exchange rates onthe dates when the transactions occur.ii. Revenue and expense items in the income statement are translated at thespot exchange rates on the dates when the transactions occur or at theexchange rate determined in a systematical and reasonable method and similarto the spot exchange rate on the day when the transactions occur.Differences arising from the above translations of foreign currency financialstatements are separately listed under ‘other comprehensive income’ in theconsolidated balance sheet.The translation of comparative financial statements is handled by reference tothe above approach.b) The Company shall translate the financial statements of foreign operations thatare in virulent inflation economy in accordance with the following methods:
i. The Company restates the items in the balance sheet by using the generalprice index, and restates the items in the income statement by using thechanges in general price index, and then converts those items at the spotexchange rate on the latest balance sheet date.ii. Where the foreign operations are no longer in virulent inflation economy, theCompany ceases to restate the financial statements and converts the financialstatements restated according to the price level on such cease.
c) Where the Company disposes of an overseas business, it shall transfer theforeign currency financial statements exchange difference, which relates to thebusiness disposed of and is presented under the items of the other comprehensiveincome in the balance sheet, from the other comprehensive income item to the gainor loss on disposal for the current period. If the overseas business is partly disposedof, the foreign currency financial statements exchange difference shall be calculatedin proportion to the percentage of disposal and transferred to gain or loss ondisposal for the current period.
10. Financial Instruments
Financial instruments include financial assets, financial liabilities and equity instruments.(1) Classification of financial instruments
a) Classification of financial assetsBased on business characteristics, investment strategies and risk managementrequirements, the Company classifies the financial assets it has obtained into thefollowing four categories: (1) financial assets measured at fair value through currentprofit and loss; (2) held-to-maturity investments; (3) loans and receivables; and (4)available-for-sale financial assets.
Financial assets measured at fair value through current profit and loss include: (1)financial assets held for trading ; (2)financial assets directly designated to bemeasured at fair value through current profit and loss; (3)investments in subsidiariesthat shall not be consolidated by the investment entities ; (4)investments held byventure capital organizations, mutual funds or similar entities.
The equity investment which hasn’t control , joint control or significant influence overthe investee, based on business characteristics, investment strategies and riskmanagement requirements, can be divided into the first kind of financial assetsmeasured at fair value through current profit and loss or the fourth kind of available-for-sale financial assets. In some special cases, the equity investment can bemeasured under the cost method.
b) Classification of financial liabilitiesBased on business characteristics and risk management requirements, theCompany classifies the financial liabilities it undertakes into the following twocategories: (1) financial liabilities measured at fair value through current profit andloss (including financial liabilities held for trading and financial liabilities directlydesignated to be measured at fair value through current profit and loss); and (2)other financial liabilities.
(2) Recognition basis and measurement method of financial instruments
a) Recognition basis of financial instrumentsWhen the Company becomes a party to a financial instrument, it shall recognize afinancial asset or financial liability.b) Measurement method of financial instruments
i. Financial assets or financial liabilities measured at fair value through currentprofit and loss: they are initially measured at the amount of fair value uponacquisition, and relevant transaction expenses are included in the current profitand loss when incurred. For cash dividends declared but not distributed or bondinterest matured but not drawn that have been included in the actual price paid,
they shall be separately recognized as dividends receivable or interestreceivable. Cash dividends or bond interest gained during the holding periodshall be recognized as investment income. On the balance sheet date, theyshall be measured at fair values and the changes in their fair values shall beincluded in current profit or loss. When disposing of a financial asset held fortrading, the Company recognizes the difference between the payment actuallyreceived (dividends receivable or interest receivable, if any, shall be deducted)and the book value of the financial asset held for trading on the disposal date,and transfers the accumulative amount previously included in profit or loss onchanges in fair value to the investment income.ii. Held-to-maturity investments: they are initially measured at the total amountof their fair values upon acquisition and related transaction expenses. For bondinterest matured but not drawn that is included in the actual price paid, they areindependently recognized as interest receivable. Interest income is calculatedand recognized during the holding period according to the amortized cost andeffective interest rates, and included in the investment income. The effectiveinterest rate is determined upon acquisition, and remains unchanged during theexpected duration or any applicable shorter period. On the balance sheet date,they are measured at amortized costs. Upon disposal, the difference betweenthe actual proceeds (interest receivable, if any, shall be deducted) and the bookvalue of the held-to-maturity investment is recognized as investment income.
iii.Loans and receivables: mainly refer to the loans issued by financialenterprises and creditor’s rights receivable arising from external sales of goodsor rendering of service by enterprises. It is measured based on amortized costby adopting effective interest method. The sum of principal and related tradingexpenses of loans issued by financial enterprises according to current marketconditions is recognized as initial recognition amount. For creditor’s rightsreceivable arising from external sales of goods or rendering of service byenterprises, their initial recognition amounts shall be the contract price oragreement price receivable from the purchaser. Receivables’ interest income isrecognized under the effective interest method. Upon recovery or disposal, thedifference between the price received and the book value of a receivable isincluded in the current profit and loss.
iv. Available-for-sale financial assets: they are initially recognized at the sum offair value upon acquisition and relevant transaction expenses. For cashdividends declared but not distributed or bond interest matured but not drawnthat has been included in the actual price paid, it shall be separately recognizedas dividends receivable or interest receivable. Cash dividends or bond interestgained during the holding period shall be recognized as investment income. On
the balance sheet date, the available-for-sale financial assets are measured atfair values and the changes in their fair values are included in othercomprehensive income. Upon disposal, the difference between the paymentactually received (dividends receivable or interest receivable, if any, shall bededucted) and the book value of an available-for-sale financial asset shall beincluded in investment income; and meanwhile, the amount arising from theaccumulated changes in fair value, which have been previously included inother comprehensive income, shall be transferred out and included in theinvestment profit or loss.
v. Other financial liabilities: they are initially recognized at fair values at the timeof occurrence plus related transaction costs. Other financial liabilities, whoseinterest expenses are recognized by using the effective interest method, aremeasured at their amortized costs on the balance sheet date.
(3) Recognition basis and measurement method of transfer of financial assets
a) Derecognition criteria of financial assetsWhen transfer of financial assets occurs, if nearly all of the risks and rewards ofownership of the financial assets have been transferred to the transferee, theCompany derecognizes the financial assets; if nearly all of the risks and rewards ofownership of the financial assets are retained, the Company shall not derecognizethe financial assets.When determining whether the transfer of a financial asset meets the abovederecognition criteria of financial assets, the Company adopts the principle ofsubstance over form.
b) Treatment of transfer of financial assets satisfying the criteria of derecognitionThe Company classifies the transfer of a financial asset into the entire transfer andthe partial transfer of financial asset.
i. If the entire transfer of financial asset satisfies the criteria of derecognition, thedifference between the amounts of the following two items shall be included inthe current profit and loss:
a) The book value of the transferred financial asset;b) The sum of the consideration received from the transfer and the accumulatedamount of the changes in fair value originally and directly included in othercomprehensive income (the situation where the financial asset transferred is anavailable-for-sale financial asset is involved in).ii. If the partial transfer of financial asset satisfies the criteria of derecognition,
the entire book value of the transferred financial asset shall be divided betweenthe derecognized and recognized parts according to their respective fair valuesand the difference between the amounts of the following two items shall beincluded in the current profit and loss:
The book value of derecognized part;The sum of the consideration for the derecognized part and the portion ofderecognition corresponding to the accumulated amount of the changes in fairvalue originally and directly included in other comprehensive income (thesituation where the financial asset transferred is an available-for-sale financialasset is involved in).c) Treatment of transfer of financial assets not satisfying the criteria of derecognitionIf the transfer of financial assets does not meet the derecognition criteria, thefinancial assets shall continue to be recognized, and the consideration received willbe recognized as a financial liability.
(4) Derecognition criteria of financial liabilities
a) A financial liability shall be wholly or partly derecognized if its present obligationsare wholly or partly dissolved. Where the Company enters into an agreement with acreditor so as to substitute the existing financial liabilities with any new financialliability, and the new financial liability is substantially different from the contractualstipulations regarding the existing financial liability, it shall derecognize the existingfinancial liability, and recognize a new one at the same time.b) Where substantial revisions are made to some or all of the contractual stipulationsof the existing financial liability, the Company shall derecognize the existing financialliability wholly or partly, and at the same time recognize the financial liability withrevised contractual stipulations as a new financial liability.c) Upon whole or partial derecognition of financial liabilities, the difference betweenthe book value of the financial liabilities derecognized and the consideration paid(including non-cash assets surrendered or new financial liabilities assumed) shall beincluded in the current profit and loss.d) Where the Company repurchases part of its financial liabilities, it shall, on therepurchase date, allocate the entire book value of financial liabilities according to thecomparative fair value of the part that continues to be recognized and derecognizedpart. The difference between the book value allocated to the derecognized part andthe considerations paid (including non-cash assets surrendered and the newfinancial liabilities assumed) shall be included in the current profit and loss.
(5) Method to determine the fair value of financial instrument
a). The fair value of a financial asset or financial liability for which there is an activemarket shall be determined in accordance with the quoted price in such activemarket at the measurement date.b).The fair value of a financial asset or financial liability for which there isn’t an activemarket shall be using valuation techniques. The recognition of the specific principlesand methods are dealt with under “Accounting Standard for Business EnterprisesNo.39—Fair Value Measurement”.
(6) Criteria to identify, way to test and method to provide for the impairment of financialassets (excluding receivables)
On the balance sheet date, the Company shall check the book values of its financialassets (excluding the financial assets measured at fair value through current profitand loss), whether on an individual basis or on a combination basis, recognizesimpairment losses on the financial assets with objective evidence of impairment, andprovides reserves for the impairment. The objective evidence of impairment of afinancial asset includes the serious financial difficulties faced by the issuer or debtor,potential bankruptcy or other financial reorganization incurred to the debtor, and theincapability of the financial asset to be continuously traded in active market causedby the serious financial difficulties incurred to the issuer, severe or prolonged declinein the fair value of equity instrument investment and other adverse situations.a) Methods to test and make provision for impairment of held-to-maturity investmentOn the balance sheet date, if there is any objective evidence showing that anyimpairment has occurred to a held-to-maturity investment, the impairment loss isrecognized at the difference between its book value and its present value ofestimated future cash flows.
i. For a held-to-maturity investment that is individually significant, the Companyconducts separate impairment test. If there is any objective evidence ofimpairment, the Company recognizes the impairment losses at the difference ofits present value of estimated future cash flows in short of its book value, andshall accordingly make the provision for such impairment.ii. For held-to-maturity investments that are individually insignificant and held-to-maturity investments that are individually significant but have no impairmentaccording to the separate test, they are divided into several groups according tosimilar credit risk characteristics. The impairment losses and provisions forimpairment of these groups are calculated and determined based on certainproportions of their balances on the balance sheet date.
b) Methods to test and make provision for impairment of available-for-sale financialasset
On the balance sheet date, if there is any objective evidence showing that anavailable-for-sale financial asset is impaired, the impairment provision shall beaccrued and the impairment loss shall be recognized. For an equity instrumentinvestment, if significant or non-temporary decline in fair value of the available-for-sale equity investment is found after giving comprehensive consideration to relevantfactors, it can be concluded that the available-for-sale equity investment is impaired.The "significant decline" refers to a cumulative decline in the fair value exceeding50% of the cost; and the "non-temporary decline" refers to a continuous decline inthe fair value of more than 12 months.When making provision for the impairment of an available-for-sale financial asset,the accumulated loss arising from the decline in fair value that is previously includedin other comprehensive income shall be transferred out and included in the currentprofit and loss. The accumulated loss transferred out shall be balance of theavailable-for-sale financial asset’s initial acquisition cost after deducting the principalrecovered and amortized amount, present fair value and impairment loss previouslyrecorded in profit or loss.After the recognition of an impairment loss, if there is objective evidence showingthat the value of financial assets has been recovered and such recovery isobjectively related to the events occurring after the recognition of such loss, theimpairment loss previously recognized shall be reversed, the impairment loss ofavailable-for-sale equity investment shall be reversed and recognized as othercomprehensive income, and the impairment loss of available-for-sale debtinstrument shall be reversed and included in the current profit and loss.
For an equity instrument investment that has no quoted price in active market andwhose fair value cannot be reliably measured, or a derivative financial asset that islinked to the equity instrument and settled through delivery of such equity instrument,when they are impaired, the difference between the book value of the financial assetand the present value of future cash flows discounted based on the prevailingmarket rate of return for a similar financial asset shall be recognized as animpairment loss and included in the current profit and loss. Once recognized, theimpairment loss shall not be reversed.
(7) Accounting treatment method of reclassifying the undue held-to-maturity investmentsas available-for-sale financial assetsWhere it is not suitable to classify one investment as a held-to-maturity investment anymore due to the change in intention or ability to hold the investment, the Company shallreclassify such investment as available-for-sale financial assets; where the Companypartly disposes or reclassifies a held-to-maturity investment large in amount, and suchdisposal or reclassification does not arise from any independent event that is not under
the control of the Company, not expected to recur and difficult to reasonably anticipated,the remaining portion of the investment shall also be classified as available-for-salefinancial asset.
11. Receivables
(1)Individually significant receivables whose provisions are made separately
Recognition criteria of individuallysignificant receivables
Recognition criteria of individually significant receivables | Individually significant receivables refer to accounts receivable whose closing balances are over CNY5,000, 000. |
Provision method of individually significant receivables | On the balance sheet date, the Company separately conducts impairment tests on those individually significant receivables. If there is any objective evidence of impairment, an impairment loss is recognized and a provision for bad debt is made, according to the difference of the present value of estimated future cash flows in short of the book value; Individually significant receivables that are proved to be not impaired according to the tests shall be incorporated into other individually insignificant receivables, and their provisions for bad debts shall be made by using the aging analysis method based on their closing balances. Objective evidence of impairment incurred to receivables includes: (1) the debtor has significant financial difficulty; (2) the debtor violates contractual terms (such as the breach of contract or delay in repaying interest or principal); (3) a concession is made to the debtor in financial difficulty after considering economic or legal reasons; (4) the debtor is likely to face bankruptcy or other debt restructuring. |
(2) Receivables whose bad debt provisions are made by portfolio
Portfolio name | Provision method of bad debt |
Aging Portfolios | Aging analysis method |
Other Portfolios | Other method |
Among portfolios, adopting aging analysis method:
√ Applicable ? N/A
Aging | Proportion of provision for accounts receivable | Proportion of provision for other receivables |
Within 1 Year (Inclusive) | 5.00% | 5.00% |
1-2 years | 10.00% | 10.00% |
2-3 Years | 30.00% | 30.00% |
3-4 Years | 50.00% | 50.00% |
4-5 Years | 80.00% | 80.00% |
Over 5 Years | 100.00% | 100.00% |
Among portfolios, adopting percentage of balance method:
? Applicable √ N/AAmong portfolios, adopting other method:
?Applicable √ N/A
(3) Individually insignificant receivables whose provisions are made separately
Reason for making provision for bad debtseparately
Reason for making provision for bad debt separately | Individually insignificant receivables refer to accounts receivable,itsclosing balances are less than CNY5,000, 000. |
Provision method of bad debt | The Company carries out separate impairment tests on receivables that are individually insignificant but have the following characteristics (such as receivables involved in dispute or litigation with the debtor and requiring arbitration; and receivables for which there are clear indications that the debtor is unable to fulfill the repayment obligations). If there is any objective evidence of impairment, the Company shall recognize the impairment loss and make the bad debt provision according to the difference of the present value of future cash flows in short of the book value. Meanwhile, for receivables that are individually insignificant after the bad debt provisions separately made are deducted, their bad debt provisions shall be made according to principles applied to portfolios of receivables with similar credit risk characteristics by aging. |
12. Inventory
Whether the Company needs to comply with the disclosure requirement of specialindustry.No
(1) Classification of inventoryInventories are classified as: raw materials, semi-finished goods, stock commodities,consigned processing materials, goods in progress and revolving materials (includinglow-cost consumables), etc.
(2) Measurement method of dispatched inventoriesDispatched materials and stock commodities are accounted for by using the weightedaverage method.
(3) Basis to determine net realizable values of inventories and method of provision forstock obsolescence
a) Determination basis of net realizable values of inventories
i. In normal operation process, for merchandise inventories held directly for sale,including stock commodities (finished goods) and materials for sale, their netrealizable values are determined at their estimated selling prices minus theirestimated selling expenses and relevant taxes and surcharges.ii. In normal operation process, for material inventories that need furtherprocessing, their net realizable values are determined at the estimated selling
prices of finished goods minus estimated costs to completion, estimated sellingexpenses and relevant taxes and surcharges.iii. For inventories held to execute sales contract or service contract, their netrealizable values are calculated on the basis of contract price. If the quantitiesof inventories specified in the sales contracts are less than the quantities heldby the Company, the net realizable value of the excess portion of inventoriesshall be based on general selling prices.iv. The materials held for production shall be measured at cost if the netrealizable value of the finished products is higher than the cost. If a decline inthe value of materials shows that the net realizable value of the finishedproducts is lower than the cost, the materials shall be measured at the netrealizable value.
b) Provision for stock obsolescenceProvisions for stock obsolescence are made at the lower of costs or net realizablevalues on a single basis.For inventories with large quantity and relatively low unit prices, the provision forstock obsolescence shall be made on the ground of the categories of inventories.
(4) Inventory system
The Company adopts perpetual inventory system and takes physical inventory counts ona regular basis.
(5) Amortization method of revolving materialsA.Amortization method of low-cost consumables:
Low-cost consumables are amortized in full at once.B.Amortization method of packaging materialsPacking materials are amortized in full at once when fetched for use by the Company.
13. Assets held for sale
(1) Scope of held for sale
Held for sale include individual asset and disposal group.Disposal group is a group of assets that are disposed as a whole through sales or otherways in one transaction and liabilities directly related to these assets delivered in thetransaction.(2) Recognition criteria of held for sale
The Company recognizes its component (or non-current asset) that satisfies the followingconditions as assets held for sale:
a)The assets (or disposal group) must be available for immediate sale in its presentcondition subject only to terms that are usual and customary for sales of such assets(or disposal groups);b) Its sale must be highly probable. The Company has already made a decision todispose the component and has a commitment from the purchaser, the transfer willbe completed within one year. If it requires shareholders’ approval or supervisors’approval according to regulations, it has already received approval from the generalmeeting of stockholders or relative authority institution.(3) Accounting treatment and. presentation of assets held-for-sale
a) The non-current asset (or disposal group) is first classified as held for sale, theCompany should measure the non-current assets or assets and liabilities made upof disposal group in accordance with relevant accounting standards.b) When the Company measure a non-current asset (or disposal group) held for saleinitially or re-measure at balance sheet date subsequently, the impairment lossshould be recognized if the book value is higher than fair value lee costs to sell atthe amount of the difference of these two in profit and loss, the provision for assetsheld for sale need to be recognized at the same time. For the impairment of disposalgroup, should write off goodwill if existing, and then write down the related assetsproportionally. Depreciation or amortization should cease for the non-current assetheld for sale.c) No matter the asset is classified as individual asset held for sale or assetbelonging to disposal group, the asset is presented as current assets under “assetsheld for sale” item; liabilities related to the asset transferred in the disposal groupheld for sale is presented as current liabilities under “liabilities held for sale” item inthe balance sheet.d) The company is committed to a sale plan involving loss of control of subsidiaryshall classify all the assets and liabilities of that subsidiary held for sale inconsolidated balance sheets when the above criteria are met, regardless of whetherthe Company retain a non–controlling interests in its former subsidiary after the sale.In the balance sheets of parent company the investment should be classified as heldfor sale in full.
14. Long-term equity investment
(1) Recognition of the initial investment costs of long-term equity investments
a) For long-term equity investments from business combinations, the initialinvestment cost shall be recognized in accordance with the provisions mentioned inNote 3.5, Accounting Method for Long-term Equity Investment from BusinessCombinations under Common Control and Business Combination not underCommon Control.b) Except for the long-term equity investments arising from business combinations,those obtained by other means shall recognize their initial investment costs in
accordance with the following provisions:
i.For the long-term equity investments obtained by cash paid, the Companyrecognizes the actual purchase price as the initial investment costs. The initialinvestment costs include directly related expense, taxes and other necessaryexpenses of obtaining long-term equity investments.ii.For the long-term equity investments acquired by the issue of equity securities(equity instrument), the initial investment cost shall be the fair value of theequity securities (equity instrument) issued. If the fair value of the long-termequity investment obtained is more reliable than equity securities issued, theinitial investment cost shall be the fair value of the long-term equity investmentmade by the investors. The cost directly attributable to the issue of equitysecurities (equity instrument), including fees, commissions, etc., write-downspremium price of the issue, if premium price of the issue is insufficient, write-downs surplus reserve and undistributed profit in turn. For the long-term equityinvestments acquired by the issue of debt securities (debt instrument) ,reference through the issuance of equity securities (equity instrument).iii. For long-term equity investments obtained by debt restructuring, theCompany recognizes the fair value of shares of debt-for-equity swap as theinitial investment costs.iv.For long-term equity investments obtained by non-monetary assets exchange,under the condition that an exchange of non-monetary assets is of commercenature and the fair value of assets exchanged can be reliably measured, non-monetary assets traded in is initially stated at the fair value of the assets tradedout, unless there is conclusive evidence indicating that the fair value of theassets traded in is more reliable; if the above conditions are not satisfied, initialinvestment costs of long-term equity investments traded in shall be recognizedat the book value of the assets traded out and the relevant taxes andsurcharges payable.Expenses, taxes and other necessary expenses incurred to the Company andthat are directly related to the obtainment of long-term equity investments shallbe recognized as the initial investment costs of long-term equity investments.For long-term equity investments obtained by the Company by any means,cash dividends or profits declared but not yet distributed in the actual paymentsor the consideration actually paid for the investment shall be separatelyaccounted as dividends receivable and shall not constitute the costs of long-term equity investments.
(2) Subsequent measurement and recognition of gains and losses of long-term equityinvestments
a) If the Company can control an investee, namely investment in subsidiary, the
long-term equity investment shall be measured under the cost method.For long-term equity investments accounted at the cost method, except cashdividends or profits declared but not yet distributed which are included in the actualpayments or the consideration actually paid for the investment, the cash dividendsor profits declared by the investee shall be recognized as the investment incomeirrespective of net profits realized by the investee before investment or afterinvestment.b) Long-term equity investments measured under the equity method
i. For the long-term equity investment which has joint control or significantinfluence over the investee, the equity method is adopted for accounting.
ii.For long-term equity investments measured at the equity method, if the initialinvestment costs are higher than the investor’s attributable share of the fairvalue of the investee’s identifiable net assets, no adjustment will be made to theinitial costs of the long-term equity investments; if the initial investment costsare lower than the investor’s attributable share of the fair value of the investee’sidentifiable net assets, the difference shall be recognized in current profit andloss and at the same time the adjustment will be made to the initial costs of thelong-term equity investments.
iii.After obtaining the long-term equity investments, the Company shall,according to the shares of net profits and other comprehensive income realizedby the investee that shall be enjoyed or borne by the Company, recognize theprofit and loss on the investments and adjust the book value of the long-termequity investments. When recognizing the net profits and losses and othercomprehensive income of the investee that the Company shall enjoy or bear,the Company shall make a recognition and calculation based on the net bookprofits and losses of the investee after appropriate adjustments. However,where the Company is unable to obtain the relevant information due to failure toreasonably determine the fair value of the investee’s identifiable assets, minordifference between the investee’s identifiable assets and the book value thereofor other reasons, the profits or losses on the investments shall be directlycalculated and recognized based on the net book profits and losses of theinvestee. The Company shall calculate the part distributed from cash dividendsor profits declared by the investee and correspondingly reduce the book valueof the long-term equity investments.
When recognizing the income from investments in associates and joint ventures,the Company shall write off the part of incomes from internal unrealizedtransactions between the Company and associates and joint ventures which are
attributable to the Company and recognize the profit and loss on investmentson such basis. Where the losses on internal transactions between the Companyand the investee fall into the scope of losses on assets impairment, full amountsof such losses shall be recognized. Profit and loss from internal unrealizedtransactions between the Company’s subsidiaries included into the combinationscope and associates and joint ventures shall be written off according to theabove principles and the profit and loss on investments thereafter shall berecognized on such basis.
When the share of net loss of the investee attributable to the Company isrecognized, it is treated in the following sequence: Firstly, write off the bookvalue of the long-term equity investments; where the book value of the long-term equity investments is insufficient to cover the loss, investment losses arerecognized to the extent that book value of long-term equity which form netinvestment in the investee in other substances and the book value of long-termreceivables shall be written off; after all the above treatments, if the Companystill assumes additional obligation according to investment contracts oragreements, the obligation expected to be assumed should be recognized asprovision and included into the investment loss in the current period. If theinvestee is profitable in subsequent accounting periods, the Company shalltreat the loss in reverse order against that described above after deductingunrecognized share of loss: i.e. write down the book value of the recognizedprovision, then restore the book value of long-term interests which substantiallyform net investments in the investee, then restore the book value of long-terminvestments, and recognize investment income at the same time.
(3) Basis for judgment of common control or significant influence over the investee
a).Basis for judgment of common control over investeeCommon control is the contractually agreed sharing of control of an arrangement,which exists only when decisions about the relevant activities require the unanimousconsent of the parties sharing control. Relevant activities of an arrangement usuallyinclude selling and purchasing of goods or services, managing financial assets,acquiring or disposing of assets, researching and developing activities and financingactivities. A joint venture is a joint arrangement whereby the joint ventures haverights to the net assets of the arrangement. The parties have rights to the assets,and obligations for the liabilities, relating to the arrangement, which is a jointoperation, but not a joint venture.
b).Basis for judgment of significant influence over investee
The term “significant influence” refers to the power to participate in decision-makingon the financial and operating policies of the investee, but with no control or jointcontrol over the formulation of these policies. Where the Company is able to exertsignificant influence over the investee, the investee is its associate.
15. Fixed assets
(1) Recognition of fixed assetsFixed assets refer to tangible assets held for the purpose of producing commodities,providing services, renting or business management with useful life exceeding oneaccounting year. Fixed assets are recognized when the following criteria are satisfiedsimultaneously:
a) It is probable that the economic benefits relating to the fixed assets will flow intothe Company;b) The cost of the fixed assets can be measured reliably.
(2) Depreciation of fixed assets
Category
Category | Depreciation method | Estimated useful life (Yr) | Estimated residual value rate (%) | Annual depreciation rate (%) |
Buildings andconstructions | Straight-line method | 20~25 | 5 | 3.80~4.75 |
Machinery equipments | Straight-line method | 10 | 5 | 9.50 |
Transportation equipments | Straight-line method | 10 | 5 | 9.50 |
Other equipments | Straight-line method | 8 | 5 | 11.88 |
a) Except for the fixed assets that have been fully depreciated but are still in use andthe land, the Company makes provisions for depreciation of all fixed assets.b) Depreciation of fixed assets of the Company is provided for on a straight-linebasis from the month immediately following the month when they reach the workingcondition for their intended use. The depreciation amount and depreciation rate shallbe calculated and recognized according to the category, estimated useful lives andestimated net residual value rate of fixed assets and respectively included into thecosts of the relevant assets or the current profit and loss by purpose.c) When making provision for impairment on fixed assets, the Company shallrecalculate the depreciation rate and depreciation amount according to the bookvalue, the estimated net residual value rate and useful lives of the fixed assets.d) On the balance sheet date, the Company reviews the estimated useful life,estimated net residual value rate and depreciation method of the fixed assets. Ifthere is any change, they shall be treated as changes in accounting estimate.
e) Decoration expense of fixed assets that meet the condition of capitalization shallbe depreciated separately by adopting straight-line method within the short periodbetween twice decoration and useful life of the fixed assets.
(3) Recognition standard, valuation method and depreciation method for fixed assetsacquired under financing lease
a) At the inception of the lease, the Company recognizes the leased fixed assetsmeeting the standards for financial leases as fixed assets acquired under financingleases.
b) At the inception of the lease, the Company shall state the assets acquired underfinancing lease at the lower of the fair value of the leased assets or the presentvalue of the minimum lease payments, as well as the initial and direct expensesoccurred, recognize a long-term payable at the amount of the minimum leasepayments, and shall charge the difference of the lower of the fair value of the leasedassets or the present value of the minimum lease payments and the minimum leasepayments to unrecognized finance expenses. Unrecognized finance expenses shallbe amortized at the effective interest rate method in each period during the leaseterm.
c) Adapt the same depreciation method as the one used on other fixed assetsowned by the company. If there is reasonable assurance that the Company willobtain the ownership of the leased assets when the lease term expires, the leasedassets should be depreciated over its useful life; if there is no reasonable assurancethat the Company will obtain the ownership of the leased assets when the leaseterm expires, the leased assets should be depreciated over the shorter of the leaseterm or the useful life of the leased assets.
16. Construction in progress
Whether the Company needs to comply with the disclosure requirement of specialindustry.No(1) Categories of constructions in progressConstructions in progress are accounted on individual project basis.
(2) Criteria and commencement of conversion of constructions in progress into fixedassets
The book entry values of the fixed assets are stated at total expenditures incurred beforeconstruction in progress reaches the working condition for their intended use. For self-operating projects, total expenditures are measured according to the expenditures ofdirect materials, direct labor, direct measurement mechanical construction costs andother expenditures; for contracting projects, total expenditures are measured accordingto project costs payable and other expenditures. Borrowing costs incurred before theprojects that are undertaking with borrowing costs reach working condition for theirintended use and meeting the condition for capitalization shall be capitalized andincluded into the costs of construction in progress.
For construction in progress that has reached working condition for intended use but forwhich the completion of settlement has not been handled, it shall be transferred into fixedassets at the estimated value according to the project budget, construction price or actualcost, etc. from the date when it reaches the working condition for intended use and thefixed assets shall be depreciated in accordance with the Company’s policy on fixed assetdepreciation; adjustment shall be made to the estimated value based on the actual costafter the completion of settlement is handled, but depreciation already provided will notbe adjusted.
17. Borrowing costs
(1) Scope of borrowing costsThe Company’s borrowing costs include interest thereon, amortization of discounts orpremiums, ancillary expenses and exchange differences incurred from foreign currencyloan, etc.
(2) Recognition principles of capitalization of borrowing costsThe borrowing costs incurred to the Company and directly attributable to the acquisitionand construction or production of assets eligible for capitalization should be capitalizedand recorded into relevant asset costs; other borrowing costs should be recognized ascosts according to the amount incurred and be included into the current profit and loss.Assets eligible for capitalization include fixed assets, investment properties, inventoriesand other assets which may reach the working condition for their intended use or sale byacquisition and construction or production activities for quite long time.
(3) Recognition of capitalization period of borrowing costs
a) Recognition of commencement of capitalization of borrowing costsBorrowing costs may be capitalized when asset disbursements have already beenincurred, borrowing costs have already been incurred and the acquisition and
construction or production activities which are necessary to prepare the assets fortheir intended use or sale have already been started. Among which, assetdisbursements include those incurred by cash payment, the transfer of non-cashassets or the undertaking of interest-bearing debts for acquiring and constructing orproducing assets eligible for capitalization.
b) Recognition of period of capitalization suspension of borrowing costsIf the acquisition and construction or production activities of assets eligible forcapitalization are interrupted abnormally and this condition lasts for more than threemonths, the capitalization of borrowing costs should be suspended. The borrowingcosts incurred during interruption are charged to profit or loss for the current period,and the capitalization of borrowing costs continues when the acquisition andconstruction or production activities of the asset resume. If the interruption isnecessary for the acquisition and construction or production to prepare the assetsfor their intended use or sale, the capitalization of borrowing costs should continue.
c) Recognition of period of capitalization cessation of borrowing costsCapitalization of borrowing costs should cease when the acquired and constructedor produced assets eligible for capitalization have reached the working condition fortheir intended use or sale. Borrowing costs incurred after the assets eligible forcapitalization have reached the working condition for their intended use or saleshould be recognized as the current profit and loss when they incur.
If all parts of the acquired and constructed or produced assets are completed, eachpart may be used or sold externally in the process of continuous construction ofother parts and the necessary acquisition or production activities have beensubstantially completed to make the part of assets reach the working condition fortheir intended use or sale, the capitalization of borrowing costs related to the part ofassets should be ceased; if all parts of the acquired and constructed or producedassets are completed but the assets cannot be used or sold externally until overallcompletion, the capitalization of borrowing costs should cease at the time of overallcompletion of the said assets.
(4) Recognition of capitalized amounts of borrowing costs
a) Recognition of capitalized amounts of interest on borrowing costsDuring the period of capitalization, capitalized amount of the interest of eachaccounting period (including amortization of discounts or premiums) shall berecognized according to the following provisions:
i.As for special loan borrowed for acquiring and constructing or producingassets eligible for capitalization, borrowing costs of special loan actuallyincurred in the current period less the interest income of the loans unused anddeposited in bank or return on temporary investment should be recognized asthe capitalization amount of borrowing costs.ii.As for general loans used for acquiring and constructing or producing assetseligible for capitalization, the interest of general loans to be capitalized shouldbe calculated by multiplying the weighted average of asset disbursements ofthe part of accumulated asset disbursements in excess of special loans by thecapitalization rate of used general loans. The capitalization rate is calculated byweighted average interest rate of general loans.iii. Where there are discounts or premiums on loans, the amounts of interest foreach accounting period should be adjusted taking account of amortizablediscount or premium amounts for the period by effective interest method.iv.During the period of capitalization, the capitalized amount of interest of eachaccounting period shall not exceed the current actual interest of the relevantloans.
b) Recognition of capitalized amounts of auxiliary expenses of loans
i.Auxiliary expenses incurred from special loans before the acquired orconstructed assets eligible for capitalization reach the working condition for theirintended use or sale should be capitalized when they incur and charged to thecosts of assets eligible for capitalization; those incurred after the acquired orconstructed assets eligible for capitalization reach the working condition for theirintended use or sale should be recognized as costs according to the amountsincurred when they incur and charged to the current profit or loss.ii. Auxiliary expenses incurred from general loans shall be recognized as costsaccording to the amounts incurred when they occur and included in the currentprofit and loss.
c) Recognition of capitalized amount of exchange differencesDuring the period of capitalization, exchange differences incurred from the principaland interest of special foreign currency loans should be capitalized and included inthe costs of the assets eligible for capitalization.
18. Intangible assets
(1) Measurement, useful life and impairment testInitial measurement of intangible assets
Initial measurement of outsourcing intangible assetsCosts of outsourcing intangible assets shall be recognized according to the purchaseprice, related taxes and other expenses directly attributed to reaching the workingcondition for their intended use. The cost of intangible assets shall be recognized basedon present value of purchase price when deferred payment over normal credit conditionswith financial nature. The difference between actual payment and purchase price, expectfor capitalized amount, shall be included into the current profit and loss in the period ofcredit.
Initial measurement of internally researched and developed intangible assetsCosts of internally researched and developed intangible assets shall be recognizedaccording to the total expenses during the period after the assets are eligible forcapitalization and before they reach the intended purpose and the expenses that havebeen included in the previous periods shall no longer be adjusted.Expenses on the research phase of internally researched and developed intangibleassets shall be included in the current profit and loss when they incur; those on thedevelopment phase ineligible for capitalization shall be included in the current profit andloss; those eligible for capitalization shall be recognized as intangible assets. If it isunable to distinguish expenditure on the research phase and expenditure ondevelopment phase, the research and development expenditures shall be all included inthe current profit and loss.
Subsequent measurement of intangible assetsThe useful lives of intangible assets are analyzed on acquisition. Intangible assetsobtained by the Company are divided into intangible assets with limited useful lives andintangible assets with indefinite useful lives.
Subsequent measurement of intangible assets with limited useful livesThe intangible assets with limited useful lives are amortized on a straight-line basis whenthey reach intended use over their useful lives with no residual value reserved.Amortizations of intangible assets are usually recorded into the current profit and loss;where the economic benefits of an intangible asset are realized by the products or otherassets produced thereafter, the amortizations are recorded into the costs of the relevantassets.
Category, estimated useful life, estimated net residual value rate and annual amortizationrate of intangible assets are shown below:
Category of intangible
assets
Category of intangible assets | Estimated useful life (years) | Estimated net residual value rate (%) | Annual amortization rate (%) |
Land use right
Land use right | 50 | 0 | 2.00 |
Trademark | 7-10 | 0 | 14.29-10.00 |
Computer software | 10 | 0 | 10.00 |
The useful lives and amortization methods of intangible assets with limited useful lives onthe balance sheet date shall be reviewed.Subsequent measurement of intangible assets with indefinite useful livesIntangible assets with indefinite useful lives are not amortized in the holding period, butimpairment tests are performed at the end of each year.
Estimates of useful lives of intangible assets
a) For intangible assets from any contractual right or other statutory rights, theiruseful lives shall be recognized according to the period no more than that of thecontractual or other statutory rights; when the contractual right or other statutoryrights contract is extended due to renewal of contracts and there is evidence that therenewal of the Company does not need large costs, the renewal period shall beincluded into the useful lives.
b) Where the contract or the law fails to specify the useful lives, the Companyintegrates situations in all aspects and determine the period of intangible assets thatcan bring economic benefits for the Company by hiring the relevant experts todemonstrate or comparing with the situation of the industry as well as referring to theCompany’s historical experience or otherwise.
c) If it is still unable to reasonably determine that intangible assets may bringeconomic benefits for the Company according to the above methods, the intangibleassets are taken as intangible assets with indefinite useful lives.
(2) Accounting policies of internal research and development expenditureAccording to the actual situation of the research and development, the Companyclassifies the research and development project into that on the research phase and thaton the development phase.
a) Research stageResearch stage is the stage when creative and planned investigations and researchactivities are conducted to acquire and understand new scientific or technologicalknowledge.b) Development stage
Development stage is the stage when the research achievements or other knowledge areapplied to a plan or design, prior to the commercial production or use, so as to produceany new or substantially improved material, device or product.Expenditure of an internal research and development project on the research phase shallbe included in current profit and loss when it occurs.Specific criteria for qualifying expenditure on the development phase for capitalizationExpenditure on the development phase of an internal research and development projectshall be recognized as intangible assets only when the following conditions aresimultaneously satisfied:
a) It is technically feasible to finish intangible assets for use or sale;b) It is intended to finish and use or sell the intangible assets;c)The usefulness of intangible assets to generate economic benefits shall be proved,including being able to prove that there is a potential market for the productsmanufactured by applying the intangible assets or there is a potential market for theintangible assets themselves or the intangible assets will be used internally;d) It is able to finish the development of the intangible assets, and able to use or sellthe intangible assets, with the support of sufficient technologies, financial resourcesand other resources;e) The expenditure attributable to the intangible asset during its development phasecan be measured reliably.
19.Non-current assets impairment
If there are impairment indicators of long-term equity investment, investment propertymeasured at cost model, fixed assets, construction in progress, intangible assets withindefinite useful lives and other long-term assets at balance sheet date, impairment testshould be performed. If the result of impairment test shows that recoverable amount isless than its book value, the difference should be provided for impairment and recordedinto impairment loss. The recoverable amount is the higher of fair values less costs ofdisposal and the present values of the future cash flows expected to be derived from theasset. Provision for impairment is calculated and recognized on the basis of individualasset. If recoverable amount of individual asset is difficult to be estimated, the Companyshould recognize the recoverable amount of the asset group which the individual assetbelongs to. Asset group is the minimum asset group which can generate cash inflowseparately.The Company should perform impairment test for goodwill and intangible assets withindefinite life at least at each year end, no matter whether there is impairment indicator.When the Company performs impairment test, book value of goodwill arising frombusiness combination should be amortized to relevant asset group using the reasonablemethod from the date of purchase. If it is difficult to amortize it to relevant asset group,
amortize it to relevant asset group portfolio. Apportion book value of goodwill to relevantasset group or asset group portfolio according to the proportion of fair value of assetgroup or asset group portfolio accounting for total amount of relevant asset group orasset group portfolio. If fair value is difficult to be measured reliably, amortize accordingto the proportion of book value of asset group or asset group portfolio accounting for totalamount of relevant asset group or asset group portfolio. When perform impairment testfor asset group or asset group portfolio including goodwill, if there is impairment indicatorof asset group or asset group portfolio relevant to goodwill, perform impairment test forasset group or asset group portfolio without goodwill firstly, calculate its recoverableamount, compare with relevant book value and recognize impairment loss. Then performimpairment test for asset group or asset group portfolio including goodwill, compare bookvalue of the asset group or asset group portfolio (including proportional book value ofgoodwill) and its recoverable amount, if recoverable amount of relevant asset group orasset group portfolio is less than its book value, recognize impairment loss of goodwill.Once impairment loss stated above is recognized, reversal is not allowed in thesubsequent accounting periods.
20. Long-term deferred expenses
(1) Scope of long-term deferred expensesLong-term deferred expenses refer to various expenses which have been alreadyincurred but will be born in this period and in the future with an amortization period ofover 1 year (exclusive).
(2) Initial measurement of long-term deferred expensesLong-term deferred expenses shall be initially measured according to the actual costsincurred.
(3) Amortization of long-term deferred expensesLong-term deferred expenses are amortized using the straight-line method over thebeneficial period.
21. Employee benefits
(1) Accounting treatment of short-term benefitsShort-term benefits are the benefits that the Company expect to pay in full within 12months after the reporting period in which the employee provided relevant services,excluding the compensation for employment termination.
Short-term benefits include: wage, bonus, allowance and subsidy; employee welfare,
social securities including health insurance and work injury insurance; housing commonreserve fund; union expenditure and employee training expenditure; short-term paidleave; short-term profit-sharing; non-monetary welfare and other short-term benefits.
Actual short term benefits will be recognized as liability during the accounting period inwhich the employee is providing the relevant service to the Company. The liability will beincluded in the current profits and losses or the cost relevant assets.
(2) Accounting treatment of post-employment benefitsThe defined contribution plan of the Company include payments of basic pension,unemployment insurance, annuity, etc. that accord to relevant provisions. The amountwhich the Company deposit on balance sheet date in exchange for the service of theemployee during the accounting period will be recognized as employee benefits liabilityand shall be included into the profit or loss for the current period.
(3) Accounting treatment of termination benefitsTermination benefits are the benefits the Company provide to the employee when theCompany terminates the employment before labor contract expires or encouragesvoluntary resignation. Employee benefits liabilities shall be recognized and included intoprofit or loss for the current period on the earlier date of the two following circumstances:
A.When the Company is not able to withdraw the benefits from termination ofemployment or resignation persuasion unilaterally;B.When the Company recognizes costs and fees relevant to reforming the terminationbenefits payment.
(4) Accounting treatment of other long-term employee benefitsOther long-term employee benefits are all employee benefits other than short-termbenefits, post-employment benefits and termination benefits. At the end of reportingperiod, the company will recognize the employee benefits cost from other long-termemployee benefits as the following components:
a) Service cost;b) Net amount of interest from other long-term employee benefits net liabilities orassets;c) Changes from recalculation of the net liabilities or assets from other long-termemployee benefits.In order to simplify related accounting procedure, the net amount of the above subjectsshall be included into current profit or loss or the cost of relevant assets.
22. Provisions
(1) Recognition principles of provisionWhen obligations related to external guarantees, pending actions or arbitration, productquality assurance, onerous contracts, reorganization and contingencies satisfy thefollowing three conditions, they shall be recognized as provision:
a) This obligation is a present obligation of the Company;b) The settlement of such obligation is likely to result in outflow of economic benefitsfrom the Company; and
c) The amount of the obligation can be measured reliably.(2) Measurement method of provisionThe amount of provision is measured at the best estimate of expenses required forcontingencies.
a) If there is continuous range for the necessary expenses, and probabilities of
occurrence of all the outcomes within this range are equal, the best estimate shall
be determined at the median of the range.
b) The best estimate shall be accounted as follows in other cases:
i.If the contingency involves a single item, the best estimate shall be determined at
the most likely outcome.
ii.If the contingency involves two or more items, the best estimate should be
determined according to all the possible outcomes with their relevant probabilities.
23. Revenue
Whether the Company needs to comply with the requirement disclosure of specialindustryNoOperating revenue of the Company mainly includes revenue from sales of goods,revenue from rendering of service and revenue from transfer of asset use right, for whichthe recognition principles are as follows:
(1) Recognition principals of revenue from sales of goodsRevenue from sales of goods is recognized when the Company has transferredsignificant risks and rewards of ownership of the goods to the purchaser; the Companyretains neither continuing managerial involvement usually related to the ownership noreffective control over the sold goods; revenues can be measured reliably; the relevanteconomic benefits are highly likely to flow into the Company; and the relevant costsincurred or to be incurred can be measured reliably.The Company’s specific condition of revenue recognition is that revenue is recognizedafter customer acceptance based on receiving payment or obtaining the rights of claimingpayment for goods according to signed sales contracts or agreements.
The Company offers a certain percentage discount to dealers according to marketingpolicies and sales status of dealers of liquor products. The settlement with dealers ismade regularly or irregularly. The sales revenue is recognized based on (net) invoiceamount after discount when the discount is included to invoice. According to accrualbasis principle , the discount incurred but not yet settled shall be recognized in salesrevenue and included to other payables.
(2) Recognition principals of revenue from rendering of serviceRecognition principals of revenue from rendering of service under the circumstance thatthe outcome of service transactions can be estimated reliablyThe Company recognizes revenue from rendering of service using the percentage-of-completion method on the balance sheet date when the outcome of service transactionscan be estimated reliably.
When the amount of revenues can be measured reliably, related economic interests arelikely to flow into the company, schedule of completion of the transitions can bemeasured reliably and the cost of transactions incurred or to be incurred can bemeasured reliably, the outcome of service transactions can be estimated reliably.Recognition principals of revenue from rendering of service under the circumstance thatthe outcome of service transactions cannot be estimated reliably
If the outcome of rendering of services on the balance sheet date cannot be measuredreliably, the revenues from rendering of services shall be recognized according to thefollowing three conditions:
a) If the labor costs that have already incurred can be fully compensated, therevenues from rendering of services are recognized at the amounts recovered orexpected to be recovered and the labor costs that have already incurred shall becarried forward;b) If the labor costs that have already incurred can be partially compensated, therevenues from rendering of services are recognized at the recoverable amounts ofcompensated labor costs and the labor costs that have already incurred shall becarried forward;c) If it is expected that all the labor costs that have already incurred cannot becompensated, the labor costs that have already incurred are included into thecurrent profit and loss (costs of primary business) and the revenues from renderingof services are not recognized.
(3) Recognition principals of revenue from transfer of asset use right
When economic benefits related to transactions are highly likely to flow into the Companyand the amount of revenue can be reliably measured, the revenue from transfer of assetuse right is recognized.
24. Government grants
(1) Types of government grants
Government grants are monetary assets and non-monetary assets acquired free ofcharge by the Company from the government, including government grants relatedto assets and government grants related to income.Government grants related to assets are government grants that are acquired by theCompany and used for forming long-term assets through purchasing andconstructing or other ways.Government grants related to income are government grants other than governmentgrants related to assets.(2) Recognition principles of government grants
Government grants are recognized when both of the following conditions are met:
a) The Company can meet the attached conditions for the government grants;b) The Company can receive the grants.(3) Measurement of government grants
a) If a government grant is a monetary asset, it shall be measured in the light ofthe received or receivable amount.b) If a government grant is a non-monetary asset, it shall be measured at its fairvalue; and if its fair value cannot be obtained in a reliable way, it shall bemeasured at a nominal amount (a nominal amount is CNY 1).(4) Accounting treatment method of government grants
a) The government grants related to assets shall be set off of the book value ofthe related assets or recognized as deferred income at the actual entry amounton acquisition. Government grants recognized as deferred income shall beallocated evenly over the useful lives of the relevant assets, and included in thecurrent profit or loss. Government grants measured at the nominal amount shallbe directly included in current profit and loss.b) Government grants related to income shall be separately handled accordingto the following circumstances:
i.If government grants related to income are used to compensate theCompany’s relevant expenses or losses in future periods, suchgovernment grants should be recognized as deferred income onacquisition and be included into the current profit and loss or written offof the related costs when the relevant expenses, losses are recognized.ii.If government grants related to income are used to compensate theCompany’s relevant expenses or losses incurred, such governmentgrants are directly included into the current profit and loss on acquisitionor written off of the related costs.
b) Government grants related to assets and related to income are receivedtogether, shall be treated separately. If it is hard to separate, government grantsshall be treated as related to income as a whole.c) Government grants related to daily operation shall be recoded in otherincome or written off relevant expenses, costs. Government grants unrelated todaily operation shall be recorded in non-operating income. Financial subsidyfunds directly allocated to the company shall be offset the relevant borrowingcosts.d) Government grants already recognized required to be refunded shall behandled according to the following circumstances:
i. If the grants have written down the book value of assets, the book valueshall be adjusted.ii. If there is related deferred income, the book value of relevant deferredincome is written down and the exceeding part is recorded in the currentprofit and loss.iii. If there is no related deferred income, the exceeding part is directlyincluded in the current profit and loss.
25. Deferred tax assets and deferred tax liabilities
The Company adopts the balance sheet liability method to account for income tax.
(1) Recognition of deferred tax assets or deferred tax liabilities
a) The Company recognizes its tax base on acquisition of assets and liabilities. Onthe balance sheet date, the Company analyzes and compares the book value of theassets and liabilities and the tax base. If there are temporary differences in bookvalue of the assets and liabilities and the tax base, under the circumstance that thetemporary differences incur in the current period and meet the recognition criteria,the Company shall respectively recognize taxable temporary differences ordeductible temporary differences as deferred tax liability or deferred tax assets.
b) Recognition basis of deferred tax assets
i. Deferred tax assets incurred from deductible temporary differences arerecognized to the extent that they shall not exceed the taxable income probablyobtained in future periods to be against the deductible temporary difference. Indetermining the taxable income probably obtained in future periods, includingthe taxable income from normal production and operation activities in futureperiods and the increase of taxable income due to the reversal of taxabletemporary differences during the period of reversal of deductible temporarydifferences.ii.For deductible losses and tax credits that can be carried forward to the nextyears, the Company is likely to recognize the corresponding deferred tax assets
to the extent that the assets shall not exceed the taxable income in the futurefor deducting deductible losses and tax credits and that are probably obtainedby the Company.iii. On the balance sheet date, the Company reviews the book value of deferredtax assets. If it is probably unable to obtain sufficient taxable income in thefuture period to offset the benefits of the deferred tax assets, the Company shallwrite down the book value of the deferred tax assets; when it is probable toobtain sufficient taxable income, the write-downs shall be reversed.
c) Recognition basis of deferred tax liabilitiesThe Company recognizes the current and previous taxable temporary differencespayable but unpaid as deferred tax liabilities. But they exclude temporary differencesarising from goodwill; transactions which are formed other than from businesscombinations and neither affect the accounting profits nor affect taxable income atthe time of occurrence.
(2) Measurement of deferred tax assets or deferred tax liabilities
a) On the balance sheet date, the deferred tax assets and deferred tax liabilities aremeasured at the applicable tax rate during the period of expected recovery of theassets or liquidation of the liabilities in accordance with the provisions of the tax law.b) Where the applicable tax rate changes, the Company remeasures deferred taxassets and deferred tax liabilities recognized, except for those incurred intransactions or events directly recognized in the owner’s equity, of which the effectshall be included in the income tax expenses in the current period when the ratechanges.c) When the Company measures the deferred tax assets and deferred tax liabilities,the tax rate and tax base in consistent with the expected recovery of assets orliquidation of liabilities shall be adopted.d) Deferred tax assets and deferred tax liabilities of the Company shall not bediscounted.
26. Lease
(1) Accounting treatment method of operating leaseLessee records rents of operating lease into cost of related assets or current profit or lossusing straight line method in each period of the lease term. Initial direct expensesincurred are recorded into current profit or loss. Contingent rents are recorded intocurrent profit or loss when occur.
Lessor includes assets used for operating lease in the related items of financialstatements. Rent of operating lease is recognized into current profit or loss using straightline method in the various period of the lease term. Initial direct expenses are recordedinto current profit or loss. Depreciate fixed asset in the operating lease using depreciationpolicy of the similar assets. Amortize other operating lease assets using systematicreasonable method. Contingent rent is recorded into current profit or loss when occur.
(2) Accounting treatment method of financing leaseAs the lessee, recognize the lower of fair value of lease asset and minimum leasepayment at the beginning day of the lease as the initial value of the asset leased in andthe minimum lease payment as long-term payable, the difference as unrealized financeexpense. Bank charges, lawyer fee, travel allowances, stamp taxes and other initial directexpenses that can be attributable to lease project in the lease negotiation and signing thelease contract are recorded into the asset leased in. Unrealized finance expense isamortized in the period during the lease term and recognized as current financeexpenses using actual effective rate method. Contingent rent is recorded into currentprofit or loss when actually occur.
As the lessor, recognize the total of minimum lease amount received and initial directexpenses as the initial value of finance lease amount receivable and record the residualamount not guaranteed at the same time. Recognize the difference between the total ofminimum lease amount received, initial direct expenses and residual amount notguaranteed and present value of that as unrealized finance income. Amortize unrealizedfinance income in the period during the lease term and use effective interest rate torecognize current finance income. Contingent rent is recorded into current profit or losswhen actually occur.
27. Changes in significant accounting policies and accounting estimates
(1) Changes in significant accounting policies√ Applicable ? N/A
Content and reason of changes in
accounting policies
Content and reason of changes in accounting policies | Procedure for examination and approval | Notes |
According to the notice of the ministry of finance on the Revision and Issuance of the General Corporate Financial Statement Format for 2018 issued on June 15, 2018 (CaiKuai [2018] No. 15), the Company has revised the financial statement format as follows: | Reviewed and approved by the sixth meeting of the sixth board of directors. |
1. Balance sheet: merge the original "notes receivables" and "accounts receivables"items into "notes and accounts receivables"; Merge the original items of "interestreceivables", "dividend receivables" and "other receivables" into "other receivables";
Merge the original "fixed assets" and "fixed assets liquidation" projects into "fixed assets";Merge the original "project materials" and "construction in progress" into "construction inprogress"; Merge the original "notes payable" and "accounts payable" items into "notesand accounts payables"; Merge the original "interest payable", "dividends payable" and"other payables" into "other payables"; Merge the original "long-term payables" and"special payables" into "long-term payables".2. Profit statement: separate the "general and administrative expenses " project into the"general and administrative expenses " and the "research and development expenses";Add "interest expenses" and "interest income" under "financial expenses" in the incomestatement.3. Statement of changes in owners' equity: add the item "change in defined benefit plancarried forward retained earnings".Details of the affected items in the financial statements at the beginning and last period(December 31, 2017 /2017 year) are as follows:
Before the adjustment
Before the adjustment | After the adjustment | ||
Item | Amount (CNY) | Item | Amount (CNY) |
Notes receivables | 212,812,236.57 |
Notes and accounts receivables | 221,297,619.40 |
accounts receivables | 8,485,382.83 | ||
Construction in progress | 234,431,457.83 | Construction in progress | 235,219,521.41 |
Project materials | 788,063.58 | ||
Notes payables | 8,200,000.00 | Notes and accounts payables | 1,119,603,574.47 |
Accounts payables | 1,111,403,574.47 | ||
General and administrative expenses | 1,532,148,106.93 | ||
General and administrative expenses | 1,506,402,859.73 | ||
Research and Development expenses | 25,745,247.20 |
(2) Changes in significant accounting estimates? Applicable √ N/A
VI.Taxes
1. Major tax types and rates
Tax type | Taxation basis | Tax rate |
Value-added tax | Output tax-deductible input tax | 17%、16%、13%、11%、10%、6%、19% |
Consumption tax | Sales revenue or or composite assessable price | |
Urban maintenance and construction tax | Applicable turnover tax amount | 7%、5% |
Corporate income tax | Applicable income tax rate Taxable income | 25%、16.5%、0%、27% |
Disclosure statement if there are various taxpaying bodies with different corporateincome tax rates
Company name
Company name | Applicable tax rate |
JSSJ Industry (HK) Holdings Co., Limited | 16.50% |
ZYG E-Commerce HK Limited | 16.50% |
Yanghe Chile SPA | 27% |
YangHe International Investment Ltd, ZYG Ltd | 0 |
ZYG Technology Investment Ltd | 0 |
2. Other information
[Note 1] Value-added tax is calculated and levied according to the difference betweenoutput VAT and deductible input. The applicable tax rates are 17%,13%,11%,6% and19%. According to Notice on trial implementation of the assessment of the deductionmethod of VAT input tax of agricultural products in some industries (Cai Shui [2012]No.38) issued by the Ministry of Finance and the State Administration of Taxation,general VAT payers with purchasing agricultural products as raw material to produce andsell liquid milk and dairy products, alcohol and alcohol, vegetable oil are involved into thepilot scope of deduction of VAT input tax of agricultural products. Whether the purchasedagricultural products are used for production of above products or not, input VAT shall bededucted according to Pilot implementation measures of assessment of the deduction ofVAT input tax of agricultural products. It is no longer deducted by VAT deductioncertificate. The input VAT of purchased goods, taxable labor service and taxable serviceexcluding agricultural products is deducted according to current related rules.The Company adopted input-output method to calculate permitted deductible VAT inputof agricultural products according to consumed amount of outsourcing agriculturalproducts per sale based on national and industrial standards.The VAT rate of YangheChile SPA is 19%. JSSJ Industry (HK) Holdings Co., Limited,ZYG E-Commerce HKLimited,ZYGLtd,Yanghe International Investment Ltd,ZYGTechnology Investment Ltd donot pay VAT.
[Note 2] 1.Ad valorem taxation :Consumption tax of liquor is calculated and leviedaccording to 20% of sales. For taxable liquor with manufacturing consignment, it iscalculated and levied according to sale price of trustees’ congeneric liquor. If there is nosale price of congeneric liquor, it is calculated and levied according to compositeassessable price. Consumption tax of wine is calculated and levied according to 10% ofsales.According to Notice on further Strengthening the Collection and Management ofLiquor Consumption Tax (Guoshuihan [2017] No. 144) issued by the State Administrationof Taxation(SAT) issued, if a liquor manufacturing enterprise sets up muti-level salesunits selling liquor, the SAT should verify the lowest assessable price of themanufacturing enterprise based on external sales price of final sales unit. Since 1 May2017, the lowest assessable price of liquor consumption tax has been adjusted to 60%uniformly from 50% to 70%. The tax payment of the Company’s liquor consumption taxhas been changed from withholding and remitting tax by trustee from direct payment bythe liquor manufacturing enterprise since 1 September 2017. The accounting method ofconsumption tax was changed from manufacturing consignment reckoned in cost ofliquor production to self-production and self-sale reckoned in consumption taxes andsurcharges. The tax price of liquor consumption tax with ad valorem taxation has beechanged from composite assessable price to the lowest assessable price of the
manufacturing enterprise based on external sales price of final sales unit since 1 May2017.
2.Volume-based taxation:Consumption tax of liquor is calculated and levied accordingto CNY 0.50 per kg[Note 3]Since 1 April 2018, Hong Kong has implemented a two-level system of profits tax.Under the two-level system, the profits tax rate for the first USD 2 million of assessableprofits of corporations and non- corporations for the years of assessment commencing onor after 1 April 2018 will be reduced to 8.25% and 7.5% respectively.Subsequentassessable profits exceeding USD 2 million will continue to be taxed at 16.5% and 15%of the standard rates respectively.
VII. Notes to the main items of the consolidated financial
statements (all currency unit is CNY, except otherstatements)
1. Cash and cash equivalents
Item
Item | Closing Balance | Opening Balance |
Cash | 24,103.07 | 4,883.33 |
Bank deposit | 3,602,515,767.58 | 1,726,983,843.15 |
Other cash and cash equivalents | 12,808,437.32 | 24,464,149.70 |
Total | 3,615,348,307.97 | 1,751,452,876.18 |
Including: total deposit outbound | 61,636,932.89 | 343,070,375.12 |
2. Notes and accounts receivables
Item | Closing Balance | Opening Balance |
Notes receivable | 242,542,097.76 | 212,812,236.57 |
Accounts receivable | 5,419,314.60 | 8,485,382.83 |
Total | 247,961,412.36 | 221,297,619.40 |
(1)Notes receivable
1)Classification of notes receivable
Item | Closing Balance | Opening Balance |
Bank acceptance bill | 242,542,097.76 | 212,812,236.57 |
Total | 242,542,097.76 | 212,812,236.57 |
2) Notes receivable that have been endorsed to other parties by the Company buthave not expired at the end of year
Item
Item | Derecognition at period end | Not derecognition at period end |
Bank acceptance bill | 111,211,585.93 | |
Total | 111,211,585.93 |
(2)Accounts receivable
1)Analysis by categories
Category
Category | Closing Balance | Opening Balance | ||||||||
Book Balance | Provision for bad debt | Book Value | Book Balance | Provision for bad debt | Book Value | |||||
Amount | Proportion | Amount | Proportion | Amount | Proportion | Amount | Proportion | |||
Accounts receivable tested for impairment on the portfolio with characteristics of credit risk | 7,711,012.90 | 100.00% | 2,291,698.30 | 29.72% | 5,419,314.60 | 10,833,555.19 | 100.00% | 2,348,172.36 | 21.67% | 8,485,382.83 |
Total | 7,711,012.90 | 100.00% | 2,291,698.30 | 29.72% | 5,419,314.60 | 10,833,555.19 | 100.00% | 2,348,172.36 | 21.67% | 8,485,382.83 |
With amounts that are individually significant and that the related provision for bad debts is provided on the individual basis:
? Applicable √ N/AAccounts receivable that the related provision for bad debts is provided on grouping basis using the ageing analysis method:
√ Applicable ? N/A
Aging | Closing Balance | ||
Account receivable | Provision for bad debt | Proportion of provision | |
Within 1 year by item | |||
Subtotal within 1 year | 4,530,444.83 | 226,522.25 | 5.00% |
1-2 years | 995,518.37 | 99,551.84 | 10.00% |
2-3 years | 123,378.21 | 37,013.46 | 30.00% |
3-4 years | 12,358.03 | 6,179.02 | 50.00% |
4-5 years | 634,408.63 | 507,526.90 | 80.00% |
Over 5 years | 1,414,904.83 | 1,414,904.83 | 100.00% |
Total | 7,711,012.90 | 2,291,698.30 | 29.72% |
Explanation of the determination of the portfolio basis:
Accounts receivable that the related provision for bad debts is based on the proportion of Closing Balance:
? Applicable √ N/AAccounts receivable that the related provision for bad debts is based on other methods:
2) Provision and recovery for bad and doubtful other receivables in the currentperiod.The provision allowance of current period is CNY 0.00. The recovery of current period isCNY 56,474.06.3) Top five entities with the largest balances of other receivables
Company name
Company name | Closing Balance | Proportion in the total (%) | Provision amount |
First | 3,681,601.81 | 47.75 | 184,080.09 |
Second | 600,000.00 | 7.78 | 480,000.00 |
Third | 454,356.93 | 5.89 | 454,356.93 |
Fourth | 118,052.00 | 1.53 | 118,052.00 |
Fifth | 88,520.00 | 1.15 | 4,426.00 |
Total | 4,942,530.74 | 64.10 | 1,240,915.02 |
3. Prepayment
(1)Aging analysis
Aging | Closing Balance | Opening Balance | ||
Amount | Proportion | Amount | Proportion | |
Within 1 year | 14,556,402.45 | 76.68% | 85,033,318.92 | 98.12% |
1-2 years | 3,978,336.29 | 20.95% | 341,247.89 | 0.40% |
2-3 years | 1,197,641.47 | 1.38% | ||
Over 3 years | 449,430.80 | 2.37% | 89,600.00 | 0.10% |
Total | 18,984,169.54 | -- | 86,661,808.28 | -- |
Explanation of prepayment with age longer than 1 year:
There is no prepayment with age longer than 1 year.(2)Top five entities with the largest balances of prepayments
Company name | Closing Balance | Proportion in the total |
First | 8,736,496.90 | 46.02 |
Second | 2,310,000.00 | 12.17 |
Third | 1,520,000.00 | 8.01 |
Fourth | 1,500,000.00 | 7.90 |
Fifth | 1,200,000.00 | 6.32 |
Total | 15,266,496.90 | 80.42 |
4. Other receivables
Item | Closing Balance | Opening Balance |
Other receivables | 47,908,184.37 | 57,084,601.83 |
Total | 47,908,184.37 | 57,084,601.83 |
(1)Other receivables
1) Other receivables disclosed by categories
Category
Category | Closing Balance | Opening Balance | ||||||||
Book Balance | Provision for bad debt | Book Value | Book Balance | Provision for bad debt | Book Value | |||||
Amount | Proportion | Amount | Proportion | Amount | Proportion | Amount | Proportion | |||
Other receivables with significant single amount and tested for impairment individually | 80,747,048.93 | 72.52% | 47,839,924.27 | 59.25% | 32,907,124.66 | 80,747,048.93 | 67.33% | 47,839,924.27 | 59.25% | 32,907,124.66 |
Other receivables tested for impairment on the portfolio with characteristics of credit risk | 30,596,168.88 | 27.48% | 15,595,109.17 | 50.97% | 15,001,059.71 | 39,188,922.37 | 32.67% | 15,011,445.20 | 38.31% | 24,177,477.17 |
Total | 111,343,217.81 | 100.00% | 63,435,033.44 | 56.97% | 47,908,184.37 | 119,935,971.30 | 100.00% | 62,851,369.47 | 52.40% | 57,084,601.83 |
Other receivables with significant single amount and tested for impairment individually√ Applicable ? N/A
Company Name | Closing Balance | |||
Book Balance | Provision balance for bad debt | Proportion of provision | Reason | |
Industrial Commercial Bank of China Ltd. Zhengzhou Jiefang road branch. | 42,907,124.66 | 10,000,000.00 | 23.31% | Tort liability |
Industrial Commercial Bank of China Ltd. Kaifeng Haode branch | 22,839,924.27 | 22,839,924.27 | 100.00% | Tort liability |
Bankruptcy administrator ofJiangsu Juntai Properties Co.,Ltd., Suqian Guotai Department Store Co.,Ltd. | 15,000,000.00 | 15,000,000.00 | 100.00% | Estimated uncollectible |
Industrial Commercial Bank of China Ltd. Zhengzhou Jiefang road branch. | 80,747,048.93 | 47,839,924.27 | -- | -- |
Analysis of provision under the aging analysis method:
√ Applicable ? N/A
Aging | Closing Balance | ||
Other receivables | Provision for bad debt | Proportion of provision | |
Within 1 year by item | |||
Subtotal within 1 year | 5,600,638.03 | 280,031.91 | 5.00% |
1-2 years | 7,283,730.25 | 728,373.03 | 10.00% |
2-3 years | 1,345,777.77 | 403,733.33 | 30.00% |
3-4 years
3-4 years | 2,485,592.52 | 1,242,796.26 | 50.00% |
4-5 years | 4,701,278.37 | 3,761,022.70 | 80.00% |
Over 5 years | 9,179,151.94 | 9,179,151.94 | 100.00% |
Total | 30,596,168.88 | 15,595,109.17 | 50.97% |
Explanation of the determination of the portfolio basis:
Other receivables that the related provision for bad debts is based on the proportion ofclosing balance:
? Applicable √ N/AOther receivables that the related provision for bad debts is based on other methods:
? Applicable √ N/A2) Provision and recovery for bad and doubtful debt in the current period
The provision allowance of current period is CNY 1,155,422.51; Provision and recovery
for bad is CNY 0.00.
Items of recovery that are important in this term are as follows:
Company name
Company name | Recovery amount | Method |
No |
3) Other actual receivable write-off in this period
Item | Written off amount |
Amount of other receivables that are actually written off | 571,758.54 |
The important write off of accounts receivable are as follows:
Company Name | Category | Amount of write off | Reasons for Write off | Write off procedure | Whether the amount of money generated by the related party transactions |
None |
4) Analysis of other receivables by categories
Category | Closing Balance | Opening Balance |
Savings deposit (Infringement dispute arrears) | 65,747,048.93 | 65,747,048.93 |
Security deposit | 16,812,560.00 | 23,738,248.46 |
Cooperation payment | 3,910,000.00 | 3,910,000.00 |
Business loans, Petty cash and other. | 24,873,608.88 | 26,540,673.91 |
Total | 111,343,217.81 | 119,935,971.30 |
5) Top five entities with the largest balances of other receivables
Company Name | Category | Closing Balance | Aging | Proportion in total receivables (%) | Provisioning amount at period end |
Industrial Commercial Bank of China Ltd. Zhengzhou Jiefang road branch. | Savings deposit (Infringement dispute arrears) | 42,907,124.66 | 3-4 years | 38.54% | 10,000,000.00 |
Industrial Commercial | Savings deposit (Infringement | 22,839,924.27 | 3-4 years | 20.51% | 22,839,924.27 |
Company
Name
Company Name | Category | Closing Balance | Aging | Proportion in total receivables (%) | Provisioning amount at period end |
Bank of China Ltd. Kaifeng Haode branch | dispute arrears) | ||||
Bankruptcy administrator of Jiangsu Juntai Properties Co.,Ltd., Suqian Guotai Department Store Co.,Ltd. | Security deposit | 15,000,000.00 | Over 5 years | 13.47% | 15,000,000.00 |
Nanjing Peilong sports culture Co., Ltd. | Security deposit | 3,910,000.00 | Over 5 years | 3.51% | 3,910,000.00 |
Advance money for another | Advance money for another | 2,379,354.55 | 1-2 year | 2.14% | 237,935.46 |
Total | -- | 87,036,403.48 | -- | 78.17% | 51,987,859.73 |
5. Inventories
Does the company need to comply with the disclosure requirements of real estateindustry.No
(1)Categories of Inventory
Category | Closing Balance | Opening Balance | ||||
Book Balance | Provision for stock obsolescence | Book Value | Book Balance | Provision for stock obsolescence | Book Value | |
Raw materials | 389,136,605.04 | 8,125,769.63 | 381,010,835.41 | 375,309,467.17 | 10,371,479.92 | 364,937,987.25 |
Goods in progress | 530,437,380.46 | 530,437,380.46 | 523,779,562.33 | 523,779,562.33 | ||
Stock commodities | 1,637,109,450.86 | 1,637,109,450.86 | 1,512,612,958.86 | 720,789.05 | 1,511,892,169.81 | |
Revolving materials | 7,316,606.29 | 2,270,576.29 | 5,046,030.00 | 7,316,606.29 | 2,270,576.29 | 5,046,030.00 |
semi-finished goods | 11,338,514,891.01 | 11,338,514,891.01 | 10,455,847,684.72 | 10,455,847,684.72 | ||
Total | 13,902,514,933.66 | 10,396,345.92 | 13,892,118,587.74 | 12,874,866,279.37 | 13,362,845.26 | 12,861,503,434.11 |
Does the company need to comply with the disclosure requirements of “Shenzhen StockExchange disclosure guide No. 4 - listed companies engaged in seed or plantingbusiness”
NoDoes the company need to comply with the disclosure requirements of “Shenzhen StockExchange disclosure guide No. 4 - listed companies engaged in jewelry business”No
(2)Provision forstock obsolescence
Category
Category | OpeningBalance | Increase in the current period | Decreases in current period | Closing Balance | ||
Amount | Other | Reversal as increase of asset value | Other | |||
Raw material | 10,371,479.92 | 2,245,710.29 | 8,125,769.63 | |||
Finished goods | 720,789.05 | 720,789.05 | ||||
Revolving material | 2,270,576.29 | 2,270,576.29 | ||||
Total | 13,362,845.26 | 2,966,499.34 | 10,396,345.92 |
(3) Statements for borrowing cost capitalized and included in the closing balanceof inventory(4) Closing conditions of assets completed but not settled through constructioncontracts
6. Non-current assets due within one year
Item | Closing Balance | Opening Balance |
Trust financial products | 1,120,000,000.00 | 552,200,000.00 |
Total | 1,120,000,000.00 | 552,200,000.00 |
7. Other current assets
Item | Closing Balance | Opening Balance |
Short-term financial products | 16,785,753,510.74 | 12,823,346,324.01 |
VAT to be deducted | 116,379,452.59 | 152,076,035.38 |
Consumption tax to be deducted | 21,568,108.81 | 7,950,860.87 |
Advance payment of income tax | 8,779,276.82 | 13,002,160.15 |
Total | 16,932,480,348.96 | 12,996,375,380.41 |
8. Available-for-sale financial assets
(1)Details of available-for-sale financial assets
Item
Item | Closing Balance | Opening Balance | ||||
Book Balance | Provision for impairment | Book Value | Book Balance | Provision for impairment | Book Value | |
Available-for-sale equity instruments: | 2,714,403,624.66 | 948,000.00 | 2,713,455,624.66 | 1,936,227,142.76 | 948,000.00 | 1,935,279,142.76 |
Measured by fair value | 284,756,163.23 | 284,756,163.23 | ||||
Measured by cost | 2,429,647,461.43 | 948,000.00 | 2,428,699,461.43 | 1,936,227,142.76 | 948,000.00 | 1,935,279,142.76 |
Others | 1,525,000,000.00 | 1,525,000,000.00 | ||||
Total | 2,714,403,624.66 | 948,000.00 | 2,713,455,624.66 | 3,461,227,142.76 | 948,000.00 | 3,460,279,142.76 |
(2)Available-for-sale financial assets measured at fair value at period end
Categories of available for sale financial assets | Available for sale equity instruments | Available for sale debt instruments | Total |
Cost of equity instruments/Amortized cost of debt instruments | 425,350,132.53 | 425,350,132.53 | |
Fair value | 284,756,163.23 | 284,756,163.23 | |
Cumulative fair value changes through other comprehensive income | -140,593,969.30 | -140,593,969.30 |
(3)Available-for-sale financial assets measured at cost at period end
Investee | Book Balance | Provision for impairment | Proportion of equity held in investee | Current period cash dividends | ||||||
Opening Balance | Increase in current period | Decrease in current period | Closing Balance | Opening Balance | Increase in current period | Decrease in current period | Closing Balance | |||
Jinagsu Siyang Rural Commercial Bank | 7,987,200.00 | 7,987,200.00 | 7.02% | 3,529,485.20 | ||||||
Suqian Transportation Investment Co.,Ltd. | 948,000.00 | 948,000.00 | 948,000.00 | 948,000.00 | 0.09% | |||||
Zking Property | 52,500,000.00 | 52,500,000.00 | 2.00% |
Investee
Investee | Book Balance | Provision for impairment | Proportion of equity held in investee | Current period cash dividends | ||||||
Opening Balance | Increase in current period | Decrease in current period | Closing Balance | Opening Balance | Increase in current period | Decrease in current period | Closing Balance | |||
&Casualty Insurance Co.,Ltd. | ||||||||||
Shanghai Finance Development Investment Funds (limited Partnership) | 162,442,493.39 | 34,397,816.93 | 128,044,676.46 | 3.33% | 2,695,985.71 | |||||
Zhongjin Jiatai (Tianjin) Equity Funds Partnership( Limited Partnership) | 190,153,911.27 | 19,994,332.31 | 170,159,578.96 | 6.25% | 3,830,553.37 | |||||
BOC International (CHINA) Co.,Ltd. | 300,000,000.00 | 300,000,000.00 | 3.16% | 6,315,789.44 | ||||||
Hangzhou Taiyi Tianze Investment Management Partnership(Limited Partnership) | 105,000,000.00 | 105,000,000.00 | 62.50% | |||||||
Suning Consumption Finance Co.,Ltd. | 30,000,000.00 | 30,000,000.00 | 5.00% | |||||||
Beijing Hutong Equity Investment (Limited Partnership) | 30,000,000.00 | 5,828,599.13 | 24,171,400.87 | 28.20% | ||||||
Shanghai Jinpu Xincheng Mobile | 100,000,000.00 | 100,000,000.00 | 10.00% |
Investee
Investee | Book Balance | Provision for impairment | Proportion of equity held in investee | Current period cash dividends | ||||||
Opening Balance | Increase in current period | Decrease in current period | Closing Balance | Opening Balance | Increase in current period | Decrease in current period | Closing Balance | |||
Internet Equity Investment Funds Partnership (Limited Partnership) | ||||||||||
CSIC Equity Investment Funds | 52,654,366.05 | 25,404,473.81 | 11,753,661.72 | 66,305,178.14 | 1.50% | 2,442,667.98 | ||||
Beijing Weijiu Century Culture Media Co.,Ltd. | 5,000,000.00 | 5,000,000.00 | 5.00% | |||||||
Shanghai Finance Development Pujiang Investment Funds (Limited Partnership) | 542,012.88 | 542,012.88 | 3.33% | |||||||
Jinpu Xincheng Investment Management Co.,Ltd. | 102,271.50 | 102,271.50 | 6.82% | |||||||
Shanghai Shangshi Hongzhang Investment Center (Limited Partnership) | 15,000,000.00 | 15,000,000.00 | 774,375.95 | 29,225,624.05 | 5.42% | |||||
Zhongjin Taijia Phase II (Tianjin) Equity Investment Funds | 66,884,387.67 | 109,442,731.52 | 35,728,100.62 | 140,599,018.57 | 4.98% |
Investee
Investee | Book Balance | Provision for impairment | Proportion of equity held in investee | Current period cash dividends | ||||||
Opening Balance | Increase in current period | Decrease in current period | Closing Balance | Opening Balance | Increase in current period | Decrease in current period | Closing Balance | |||
Partnership( Limited Partnership) | ||||||||||
Jinagsu Yongda Outdoor Media Co.,Ltd. | 1,507,500.00 | 1,507,500.00 | 5.00% | |||||||
Jinagsu Yongda High-speed Railway Media Co.,Ltd. | 505,000.00 | 505,000.00 | 5.00% | |||||||
Jiaxing Danqing Investment Partnership (Limited Partnership) | 70,000,000.00 | 30,000,000.00 | 100,000,000.00 | 10.00% | ||||||
Jinshi Kunxiang Equity Investment Partnership(Limited Partnership) | 300,000,000.00 | 300,000,000.00 | 52.54% | |||||||
Suzhou Danqing Phase II Pharmaceutical Innovation Industry Investment Partnership (Limited Partnership) | 60,000,000.00 | 60,000,000.00 | 7.54% | |||||||
LC Securities Co.,Ltd. | 330,000,000.00 | 330,000,000.00 | 12.83% |
Investee
Investee | Book Balance | Provision for impairment | Proportion of equity held in investee | Current period cash dividends | ||||||
Opening Balance | Increase in current period | Decrease in current period | Closing Balance | Opening Balance | Increase in current period | Decrease in current period | Closing Balance | |||
Nanjing Jiyan Food Co.,Ltd. | 15,000,000.00 | 15,000,000.00 | 4.76% | |||||||
Jiangsu Saifu Green Food Development Co.,Ltd | 100,000,000.00 | 100,000,000.00 | 2.74% | |||||||
Nanjing Xingnahe Venture Capital Partnership (Limited Partnership) | 200,000,000.00 | 2,950,000.00 | 197,050,000.00 | 45.45% | ||||||
Panmao (Shanghai) Investment Center (Limited Partnership) | 165,000,000.00 | 165,000,000.00 | 55.00% | |||||||
Shanghai Xintuo- Road King Creditors' Investment Collective Fund Trust Plan | 100,000,000.00 | 100,000,000.00 | ||||||||
Zhongrong Trust-Guarantee-Assistant Fund No.190Collective Fund Trust Plan | 150,000,000.00 | 150,000,000.00 | ||||||||
Zhongrong Trust- | 100,000,000.00 | 100,000,000.00 |
Investee
Investee | Book Balance | Provision for impairment | Proportion of equity held in investee | Current period cash dividends | ||||||
Opening Balance | Increase in current period | Decrease in current period | Closing Balance | Opening Balance | Increase in current period | Decrease in current period | Closing Balance | |||
The Glory of the World No.26 Collective Fund Trust Plan | ||||||||||
WesternTrust. Sunshine City Yujing Special Asset Trust Plan | 150,000,000.00 | 150,000,000.00 | ||||||||
Shanghai Xintuo-Oceanwide Wuhan Yunhai Garden Collective Trust Plan | 100,000,000.00 | 100,000,000.00 | ||||||||
Zhongrong-Jundun No.1Trust | 150,000,000.00 | 150,000,000.00 | ||||||||
WesternTrust-CAC Group Creditors ' Collective Trust Plant | 200,000,000.00 | 200,000,000.00 | ||||||||
Pingan Fortune-Hongtai No.189Collective Fund Trust Plan | 70,000,000.00 | 70,000,000.00 | ||||||||
Western Trust- Evergrande Enping Equity Investment Collective Fund Trust Plan | 100,000,000.00 | 100,000,000.00 |
Investee
Investee | Book Balance | Provision for impairment | Proportion of equity held in investee | Current period cash dividends | ||||||
Opening Balance | Increase in current period | Decrease in current period | Closing Balance | Opening Balance | Increase in current period | Decrease in current period | Closing Balance | |||
Western Trust-Tiandiyuan (Phase V) Collective Fund Trust Plan | 120,000,000.00 | 120,000,000.00 | ||||||||
China Tourism International Trust·Zhixin No.358 Zhongtian Future Ark Collective Fund Trust Plan B | 85,000,000.00 | 85,000,000.00 | ||||||||
Shanxi International Trust·Green Source Farmers Market Trust Loan Collective Fund Trust Plan | 100,000,000.00 | 100,000,000.00 | ||||||||
Shanxi International Trust·Wuxi Railway Station North Square A Block Project Loan Collective Fund Trust Plan | 100,000,000.00 | 100,000,000.00 | ||||||||
Total | 3,461,227,142.76 | 604,847,205.33 | 1,636,426,886.66 | 2,429,647,461.43 | 948,000.00 | 948,000.00 | -- | 18,814,481.70 |
(4)Changes in provision for the impairment of the available-for-sale assets during the reporting period
Classification of available-for-sale assets
Classification of available-for-sale assets | Equity instruments available for sale | Debt instruments available for sale | Total |
Balance of the provision for impairment at the beginning of this period | 948,000.00 | 948,000.00 | |
Balance of the provision for impairment at the end of this period | 948,000.00 | 948,000.00 |
9. Long-term equity investments
Investee | Opening Balance | Changes in Current Period | Closing Balance | Closing Balance of provision for impairment | |||||||
Increase | Decrease | Profit or loss recognized under equity method | Adjustments of other comprehensive income | Other changes in equity | Cash divided or profit declared | Provision for impairment | Other | ||||
1.Joint Venture | |||||||||||
2.Associated Enterprise | |||||||||||
Jiangsu Su Wine Culture Transmission Co,Ltd. | 1,980,046.94 | 911,282.86 | 408,000.00 | 781,690.58 | 3,265,020.38 | ||||||
Nanjing Hesong Culture Technology Co.,Ltd. | 3,400,000.00 | 239,991.56 | 3,639,991.56 | ||||||||
Jiangsu Xinghe Investment Management Co.,Ltd. | 1,850,000.00 | 668,316.88 | 2,518,316.88 | ||||||||
Subtotal | 1,980,046.94 | 5,250,000.00 | 1,819,591.30 | -408,000.00 | 781,690.58 | 9,423,328.82 | |||||
Total | 1,980,046.94 | 5,250,000.00 | 1,819,591.30 | -408,000.00 | 781,690.58 | 9,423,328.82 |
Other statementsOther changes of Jiangsu Su Wine Culture Transmission Co,Ltd. in the current period are long-term equity investments that have not realized salesprofit adjustment in downstream transactions.
10. Fixed assets
Item
Item | Closing Balance | Opening Balance |
Fixed assets | 7,833,665,282.19 | 8,249,559,468.26 |
Total | 7,833,665,282.19 | 8,249,559,468.26 |
(1)Details of Fixed Assets
Item | Buildings and constructions | Machinery equipment | Transportation equipment | Other equipment | Total |
Original cost of fixed assets | |||||
1.Opening Balance | 7,781,292,717.66 | 2,969,522,716.63 | 68,107,280.20 | 329,794,629.96 | 11,148,717,344.45 |
2.Increase in current period | 101,855,482.83 | 151,251,840.47 | 7,987,937.98 | 50,527,425.12 | 311,622,686.40 |
(1)External purchase | 14,515,922.81 | 4,810,149.36 | 7,915,544.81 | 50,271,440.28 | 77,513,057.26 |
(2)Transfer from projects under construction | 87,339,560.02 | 146,441,691.11 | 72,393.17 | 255,984.84 | 234,109,629.14 |
(3)Increase in Corporate merger | |||||
3.Decrease in current period | 17,615,950.55 | 12,353,143.71 | 10,672,785.74 | 4,723,482.31 | 45,365,362.31 |
(1)Elimination and sell off | 17,615,950.55 | 12,353,143.71 | 10,672,785.74 | 4,723,482.31 | 45,365,362.31 |
4.Closing Balance | 7,865,532,249.94 | 3,108,421,413.39 | 65,422,432.44 | 375,598,572.77 | 11,414,974,668.54 |
Accumulated depreciation | |||||
1.Opening Balance | 1,533,929,641.94 | 1,109,582,470.15 | 48,535,906.55 | 207,109,857.55 | 2,899,157,876.19 |
2.Increase in current period | 375,112,939.92 | 275,048,790.28 | 6,807,570.27 | 50,174,399.01 | 707,143,699.48 |
(1)Provision | 375,112,939.92 | 275,048,790.28 | 6,807,570.27 | 50,174,399.01 | 707,143,699.48 |
(2)Increase in Corporate merger | |||||
3.Decrease in current period | 3,035,190.74 | 7,998,636.39 | 9,798,106.72 | 4,160,255.47 | 24,992,189.32 |
(1)Disposal or elimination | 3,035,190.74 | 7,998,636.39 | 9,798,106.72 | 4,160,255.47 | 24,992,189.32 |
4.Closing Balance | 1,906,007,391.12 | 1,376,632,624.04 | 45,545,370.10 | 253,124,001.09 | 3,581,309,386.35 |
Provision for fixed asset impairment | |||||
1.Opening Balance | |||||
2.Increase in current period | |||||
(1)Provision | |||||
3.Decrease in current period | |||||
(1)Disposal or elimination | |||||
4.Closing Balance |
Book Value
Book Value | |||||
1.Closing Book Value | 5,959,524,858.82 | 1,731,788,789.35 | 19,877,062.34 | 122,474,571.68 | 7,833,665,282.19 |
2.Opening Book Value | 6,247,363,075.72 | 1,859,940,246.48 | 19,571,373.65 | 122,684,772.41 | 8,249,559,468.26 |
(2)Investment properties without certification of right
Item | Book Value | Reason for not having the certification of right |
Blue-collar workers apartment of Yanghe | 151,840,844.16 | In process |
Siyang lai 'an base office building | 20,181,257.95 | In process |
Yanghe workshop etc. | 94,497,478.73 | In process |
Total | 266,519,580.84 |
(2) Disposal of fixed assets
Item | Closing Balance | Opening Balance |
11. Construction in progress
Item | Closing Balance | Opening Balance |
Construction in progress | 153,747,041.24 | 234,431,457.83 |
Construction materials | 788,063.58 | 788,063.58 |
Total | 154,535,104.82 | 235,219,521.41 |
(1)Construction in progress
item | Closing Balance | Opening Balance | ||||
Book Balance | Provision for impairment | Book Value | Book Balance | Provision for impairment | Book Value | |
R&D Center Building project | 7,668,674.65 | 7,668,674.65 | 10,431,829.70 | 10,431,829.70 | ||
Shuanggou new area bottle storage and packaging relocation project | 91,252,560.31 | 91,252,560.31 | ||||
Packaging logistics project of Shuanggou Distillery industry park | 12,080,019.36 | 12,080,019.36 | 33,759,459.32 | 33,759,459.32 | ||
Shuanggou new area brewing project | 13,132,641.22 | 13,132,641.22 | 16,950,999.28 | 16,950,999.28 | ||
Shuanggou new area supporting project | 492,307.69 | 492,307.69 | 650,166.18 | 650,166.18 | ||
Shuanggou packaging production line | 10,610,699.88 | 10,610,699.88 | 10,610,699.88 | 10,610,699.88 | ||
Hubei Lihuacun Liquor Industry filling project | 1,542,699.41 | 1,542,699.41 | ||||
Intelligent brewing | 11,167,656.92 | 11,167,656.92 |
item
item | Closing Balance | Opening Balance | ||||
Book Balance | Provision for impairment | Book Value | Book Balance | Provision for impairment | Book Value | |
(Mellowness 125 workshop) project | ||||||
Siyang Base Three-dimensional Warehouse, packaging production line project | 15,581,233.56 | 15,581,233.56 | ||||
Qu-making third workshop sesame qu expansion phase II project | 5,428,198.28 | 5,428,198.28 | ||||
Other projects | 77,585,609.68 | 77,585,609.68 | 69,233,043.75 | 69,233,043.75 | ||
Total | 153,747,041.24 | 153,747,041.24 | 234,431,457.83 | 234,431,457.83 |
(2)Current changes of important construction in progress
Item
Item | Budget | Opening Balance | Increase in current period | Transfer into fixed assets | Decrease in current period | Closing Balance | Proportion of accumulative project input in budget | Progress | Capitalized interest | Include:Capitalized interest for the period | Capitalization rate for the period (%) | Source of funds |
R&D Center Building project | 260,510,000.00 | 10,431,829.70 | 1,749,525.77 | 4,512,680.82 | 7,668,674.65 | 196.09% | End stage of Engineering | Other | ||||
Shuanggou new area bottle storage and packaging relocation project | 640,270,000.00 | 91,252,560.31 | 15,937,440.68 | 107,190,000.99 | 123.76% | Completed | Other | |||||
Packaging logistics project of Shuanggou Distillery industry park | 495,000,000.00 | 33,759,459.32 | 8,948,384.94 | 30,627,824.90 | 12,080,019.36 | 206.68% | End stage of Engineering | Other | ||||
Shuanggou new area brewing project | 528,180,000.00 | 16,950,999.28 | 1,854,694.33 | 5,673,052.39 | 13,132,641.22 | 162.55% | End stage of Engineering | Other | ||||
Shuanggou new area supporting project | 70,000,000.00 | 650,166.18 | 575,025.37 | 732,883.86 | 492,307.69 | 173.17% | End stage of Engineering | Other | ||||
Shuanggou packaging production line | 120,000,000.00 | 10,610,699.88 | 10,610,699.88 | 89.53% | End stage of Engineering | Other | ||||||
Hubei | 80,000,000.00 | 1,542,699.41 | 4,194,297.64 | 5,736,997.05 | 132.78% | Completed | Other |
Item
Item | Budget | Opening Balance | Increase in current period | Transfer into fixed assets | Decrease in current period | Closing Balance | Proportion of accumulative project input in budget | Progress | Capitalized interest | Include:Capitalized interest for the period | Capitalization rate for the period (%) | Source of funds |
Lihuacun Liquor Industry filling project | ||||||||||||
Intelligent brewing (Mellowness 125 workshop) project | 31,000,000.00 | 11,167,656.92 | 11,167,656.92 | 36.02% | In the process | Other | ||||||
Siyang Base Three-dimensional Warehouse, packaging production line project | 41,000,000.00 | 16,822,612.96 | 1,241,379.40 | 15,581,233.56 | 41.03% | In the process | Other | |||||
Qu-making third workshop sesame qu expansion phase II project | 9,800,000.00 | 5,428,198.28 | 5,428,198.28 | 55.39% | In the process | Other | ||||||
Total | 2,275,760,000.00 | 165,198,414.08 | 66,677,836.89 | 155,714,819.41 | 76,161,431.56 | -- | -- | -- |
(3)Construction materials
Item | Closing Balance | Opening Balance | ||||
Book Balance | Provision for impairment | Book Value | Book Balance | Provision for impairment | Book Value |
Cable type
Cable type | 6,320.03 | 6,320.03 | 6,320.03 | 6,320.03 | ||
electric equipment | 781,743.55 | 781,743.55 | 781,743.55 | 781,743.55 | ||
Total | 788,063.58 | 788,063.58 | 788,063.58 | 788,063.58 |
12. Intangible assets
(1)Details of intangible assets
Item
Item | Land use right | Patent right | No-patent right technology | Trademark right | Computer software | Total |
Original cost of intangible assets | ||||||
Opening Balance | 1,782,806,638.06 | 396,741,375.76 | 93,491,180.46 | 2,273,039,194.28 | ||
Increase in current period | 163,260,000.00 | 3,110,089.67 | 12,163,487.32 | 178,533,576.99 | ||
Including: Acquired | 163,260,000.00 | 3,110,089.67 | 12,163,487.32 | 178,533,576.99 | ||
Internally developed | ||||||
Business combination | ||||||
Decrease in current period | ||||||
Including: Disposal | ||||||
Closing Balance | 1,946,066,638.06 | 399,851,465.43 | 105,654,667.78 | 2,451,572,771.27 | ||
Accumulated amortization of intangible assets | ||||||
Opening Balance | 208,924,366.84 | 382,757,563.31 | 27,810,837.06 | 619,492,767.21 | ||
Increase in current period | 38,210,698.82 | 2,110,987.09 | 9,796,631.05 | 50,118,316.96 | ||
Including: Provision | 38,210,698.82 | 2,110,987.09 | 9,796,631.05 | 50,118,316.96 | ||
Decrease in current period | ||||||
Including: Disposal | ||||||
Closing Balance | 247,135,065.66 | 384,868,550.40 | 37,607,468.11 | 669,611,084.17 | ||
Provision for impairment | ||||||
Opening Balance | ||||||
Increase in current period | ||||||
Including: Provision | ||||||
Decrease in current period | ||||||
Including: Disposal | ||||||
Closing Balance | ||||||
Book value of intangible assets | ||||||
Closing Book Value | 1,698,931,572.40 | 14,982,915.03 | 68,047,199.67 | 1,781,961,687.10 | ||
Opening Book Value | 1,573,882,271.22 | 13,983,812.45 | 65,680,343.40 | 1,653,546,427.07 |
13. Goodwill
(1)Book value of goodwill
Investee’s name or items resulting in goodwill | Opening Balance | Addition this period | Elimination this period | Closing Balance | ||
Jiangsu Shuanggou Distillery Stock Co.,Ltd. [Note] | 276,001,989.95 | 276,001,989.95 | ||||
Jiangsu Zhaiyougou E-commerce Co.,Ltd | 6,940,018.79 | 6,940,018.79 | ||||
Jiangsu Zhaibianli E- | 21,250,284.80 | 21,250,284.80 |
Investee’s name
or itemsresulting in
goodwill
Investee’s name or items resulting in goodwill | Opening Balance | Addition this period | Elimination this period | Closing Balance | ||
commerce Co.,Ltd | ||||||
Guizhou Guijiu Co.,Ltd. | 18,826,210.01 | 18,826,210.01 | ||||
ZYG Technology Investment Ltd | 5,057,111.19 | 5,057,111.19 | ||||
Guizhou Welcome Drink Stock Co.,Ltd | 11,333,195.25 | 11,333,195.25 | ||||
Dream Blue Chuanhaihui (Shiyan) Trade Investment Co.,Ltd. | 3,405,542.42 | 3,405,542.42 | ||||
Total | 342,814,352.41 | 342,814,352.41 |
(2)Provision for impairment of goodwill
Investee’s name or items resulting in goodwill | Opening Balance | Addition this period | Elimination this period | Closing Balance | ||
Jiangsu Zhaiyougou E-commerce Co.,Ltd | 6,940,018.79 | 6,940,018.79 | ||||
Jiangsu Zhaibianli E-commerce Co.,Ltd | 21,250,284.80 | 21,250,284.80 | ||||
Guizhou Guijiu Co.,Ltd. | 18,826,210.01 | 18,826,210.01 | ||||
ZYG Technology Investment Ltd | 5,057,111.19 | 5,057,111.19 | ||||
Guizhou Welcome Drink Stock Co.,Ltd | 11,333,195.25 | 11,333,195.25 | ||||
Dream Blue Chuanhaihui (Shiyan) Trade Investment Co.,Ltd. | 3,405,542.42 | 3,405,542.42 | ||||
Total | 66,812,362.46 | 66,812,362.46 |
Information about the asset group or combination of asset groups where the goodwill islocatedExplanation of the goodwill impairment test process, key parameters (such as the growthrate in the forecast period, the growth rate in the stable period, the profit rate, thediscount rate, the forecast period, etc.) and the recognition method of goodwillimpairment loss:
[Note] Goodwill impairment test according to the present value of the expected futurecash flow of the asset groups, group assets of nearly three years based on the actualoperation situation and the future operation of the expectations, the estimated future cashflow of the asset group, and according to the pre-tax discount rate of 15.59% discountafter calculating the recoverable amount of an asset group. After the test, there is nogoodwill impairment resulting from the acquisition of Jiangsu Shuanggou Distillery StockCo., Ltd.Goodwill impairment testOther instructionsNo
14. Long-term prepaid expenses
Item
Item | Opening Balance | Increase in the current period | Amortization for the current period | Other decreases | Closing Balance |
Renovation costs of the rented house | 1,091,644.16 | 184,008.16 | 907,636.00 | ||
Total | 1,091,644.16 | 184,008.16 | 907,636.00 |
15. Deferred tax assets/liabilities
(1)Deferred tax assets before offset
Item | Closing Balance | Opening Balance | ||
Deductible Temporary Differences | Deferred Tax Assets | Deductible Temporary Differences | Deferred Tax Assets | |
Provision for asset impairment | 73,261,029.52 | 17,696,079.84 | 73,619,863.33 | 18,404,334.67 |
Unrealized profits from internal transactions | 49,459,513.99 | 12,364,878.51 | 44,667,749.86 | 11,166,937.46 |
Deductible losses | 298,587,033.87 | 74,646,758.47 | 9,122,967.34 | 2,280,741.83 |
The difference between book value of debt and tax base | 2,437,185,000.00 | 609,296,250.00 | 2,471,228,375.00 | 617,807,093.75 |
Total | 2,858,492,577.38 | 714,003,966.82 | 2,598,638,955.53 | 649,659,107.71 |
(2)Deferred tax liabilities before offset
Item | Closing Balance | Opening Balance | ||
Taxable temporary differences | Deferred tax liabilities | Taxable temporary differences | Deferred tax liabilities | |
Valuation of appreciation of business combination assets not under common control | 56,077,024.20 | 14,019,256.05 | 71,831,084.40 | 17,957,771.10 |
Total | 56,077,024.20 | 14,019,256.05 | 71,831,084.40 | 17,957,771.10 |
(3)Details of unrecognized deferred tax assets
Item | Closing Balance | Opening Balance |
Deductible temporary differences
Deductible temporary differences | 6,280,624.43 | 5,890,523.76 |
Deductible losses | 214,056,848.93 | 179,672,013.58 |
Total | 220,337,473.36 | 185,562,537.34 |
(4)Deductible losses from unrecognized deferred tax assets will due on thefollowing years
Year | Closing Balance | Opening Balance | Remark |
2020 | 27,264,949.28 | 29,839,655.24 | |
2021 | 82,161,059.93 | 82,161,059.93 | |
2022 | 67,671,298.41 | 67,671,298.41 | |
2023 | 36,959,541.31 | ||
Total | 214,056,848.93 | 179,672,013.58 | -- |
16. Other non-current assets
Item | Closing Balance | Opening Balance |
Compensation for land compensation | 158,606,824.94 | 158,606,824.94 |
Prepaid construction equipment expense and purchase and house payment | 46,405,359.98 | 45,620,808.97 |
Total | 205,012,184.92 | 204,227,633.91 |
17. Notes and accounts payables
Item | Closing Balance | Opening Balance |
Notes payable | 8,200,000.00 | |
Accounts payable | 1,261,282,397.89 | 1,111,403,574.47 |
Total | 1,261,282,397.89 | 1,119,603,574.47 |
(1)Notes payable by category
Category | Closing Balance | Opening Balance |
Bank acceptances | 8,200,000.00 | |
Total | 8,200,000.00 |
Total amount of notes payable overdue at the period end is CNY 0.00.
(2)Accounts payables by category
Category | Closing Balance | Opening Balance |
Material purchase | 1,159,829,383.04 | 949,161,768.88 |
Construction andequipment payment | 101,453,014.85 | 162,241,805.59 |
Total | 1,261,282,397.89 | 1,111,403,574.47 |
(3)Description of significant accounts payable aged more than 1 year
Item | Closing Balance | Reason for not being settled |
None |
18. Advance from customers
(1)Presentation of advances from customers
Item
Item | Closing Balance | Opening Balance |
Advance from customers | 4,468,409,150.75 | 4,199,846,323.30 |
Total | 4,468,409,150.75 | 4,199,846,323.30 |
(2)Description of significant advance from customers aged more than 1 year
Item | Closing Balance | Reason for not being settled |
None |
19. Employee benefits payable
(1)Employee benefits payable shown as follows:
Item | Opening Balance | Increase in Current Period | Decrease in Current Period | Closing Balance |
Short-term benefits | 208,314,727.66 | 1,622,846,491.59 | 1,645,602,052.47 | 185,559,166.78 |
Post-employment benefits-- defined contribution plans | 1,343,920.63 | 139,651,615.36 | 140,803,329.18 | 192,206.81 |
Termination benefits | 465,700.50 | 465,700.50 | ||
Total | 209,658,648.29 | 1,762,963,807.45 | 1,786,871,082.15 | 185,751,373.59 |
(2)Short-term employee benefits payable shown as follows:
Item | Opening Balance | Increase in Current Period | Decrease in Current Period | Closing Balance |
Wages, bonuses, allowances and grants | 202,843,814.89 | 1,399,580,664.51 | 1,421,059,254.48 | 181,365,224.92 |
Employees’ welfare | 83,457,766.16 | 83,457,766.16 | ||
Social insurance premiums | 427,454.84 | 61,490,211.56 | 61,902,806.31 | 14,860.09 |
Including: Medical Insurance | 372,876.50 | 52,615,361.80 | 52,980,266.30 | 7,972.00 |
Work-related injury insurance | 38,668.84 | 3,029,305.12 | 3,061,098.62 | 6,875.34 |
Maternity insurance premium | 15,909.50 | 5,845,544.64 | 5,861,441.39 | 12.75 |
Housing funds | 884,823.00 | 66,107,122.80 | 65,842,765.00 | 1,149,180.80 |
Labor union expenditures and employee education funds | 4,158,634.93 | 12,210,726.56 | 13,339,460.52 | 3,029,900.97 |
Total | 208,314,727.66 | 1,622,846,491.59 | 1,645,602,052.47 | 185,559,166.78 |
(3)Defined contribution plan shown as follows:
Item | Opening Balance | Increase in Current Period | Decrease in Current Period | Closing Balance |
Basic endowment insurance premium | 1,266,707.40 | 136,051,273.34 | 137,126,658.01 | 191,322.73 |
Unemployment insurance premium | 77,213.23 | 3,600,342.02 | 3,676,671.17 | 884.08 |
Total | 1,343,920.63 | 139,651,615.36 | 140,803,329.18 | 192,206.81 |
20. Taxes payable
Item
Item | Closing Balance | Opening Balance |
Value-added tax | 189,165,872.30 | 16,566,945.18 |
Consumption tax | 718,733,315.03 | 301,944,997.98 |
Enterprise income tax | 2,284,751,258.08 | 1,865,510,244.69 |
Individual Income Tax | 8,034,721.58 | 51,144,185.46 |
Urban maintenance and construction tax | 16,248,651.42 | 16,322,641.43 |
Land use tax | 15,946,560.04 | 16,034,117.97 |
Property tax | 13,930,499.24 | 4,946,210.32 |
Education Surcharge and Local Education Surcharge | 5,044,392.51 | 13,262,451.18 |
Stamp tax | 1,271,183.78 | 1,787,929.52 |
Integrated fund | 560.58 | 5,144.20 |
Other tax | 2,331,745.16 | 2,037,259.74 |
Total | 3,255,458,759.72 | 2,289,562,127.67 |
21. Other payables
Item | Closing Balance | Opening Balance |
Other payables | 6,457,301,511.01 | 5,620,040,515.94 |
Total | 6,457,301,511.01 | 5,620,040,515.94 |
(1)Other payables
1) Categories by nature
Item | Closing Balance | Opening Balance |
Dealer unsettled discount | 2,298,765,700.00 | 2,249,550,630.00 |
Dealer deposit | 2,929,101,334.21 | 1,996,000,543.52 |
Dealer risk pledged capital | 659,646,746.28 | 618,260,719.07 |
Accrued expenses | 287,765,353.59 | 473,980,800.72 |
Quality guarantee deposit, Performance bond | 188,186,132.55 | 176,017,865.12 |
Other | 93,836,244.38 | 106,229,957.51 |
Total | 6,457,301,511.01 | 5,620,040,515.94 |
2) Other important payables aging more than 1 year
Item | Closing Balance | Reasons for Being Unpaid or Transferred |
Dealer risk pledged capital, deposit | 492,600,426.68 | Risk pledged capital, deposit |
Total | 492,600,426.68 | -- |
22. Long-term loans
(1)Long-term loans by category
Item
Item | Closing Balance | Opening Balance |
Credit loans | 109,088.00 | 145,452.00 |
Total | 109,088.00 | 145,452.00 |
23. Long-term payables
Item | Closing balance | Opening balance |
Long-term payables | 198,404,248.85 | 199,107,530.75 |
Total | 198,404,248.85 | 199,107,530.75 |
(1)Long-term payables
Item | Opening Balance | Increase in current period | Decrease in current period | Closing Balance | Reason |
Compensation for replacement of employee status | 199,107,530.75 | 703,281.90 | 198,404,248.85 | ||
Total | 199,107,530.75 | 703,281.90 | 198,404,248.85 | -- |
24. Deferred Incomes
Item | Opening Balance | Increase in current period | Decrease in current period | Closing Balance | Reason |
Government grants | 107,349,666.67 | 8,836,166.67 | 98,513,500.00 | ||
Total | 107,349,666.67 | 8,836,166.67 | 98,513,500.00 | -- |
Projects involving government grants:
Liability Item | Opening Balance | Increase in current period | Non-operating income in current period | Other income in current period | Cost reduction in current period | Other changes | Closing Balance | Relevant to Asset or Income |
Special fund for waste water recycling and reuse project | 79,166.67 | 79,166.67 | Asset | |||||
Hubei Lihuacun liquor industry liquor brewing, filling project supporting facilities construction subsidies | 34,567,600.00 | 4,257,000.00 | 30,310,600.00 | Asset | ||||
Special fund for packaging logistics project in Shuanggou new area | 21,000,000.00 | 3,000,000.00 | 18,000,000.00 | Asset | ||||
Special fund for Harbin Binzhou brewery construction project | 41,202,900.00 | 41,202,900.00 | Asset | |||||
Shuanggou sewage treatment project | 10,500,000.00 | 1,500,000.00 | 9,000,000.00 | Asset |
25. Share Capital
Item
Item | Opening Balance | Increases/decreases in the current period (+, -) | Closing Balance | ||||
Issuance of new shares | Share donation | Conversion of reserves funds into shares | Others | Subtotal | |||
Total Number of Shares | 1,506,988,000.00 | 1,506,988,000.00 |
26. Capital reserves
Item | Opening Balance | Increase in Current Period | Decrease in Current Period | Closing Balance |
Share premium | 741,674,076.44 | 741,674,076.44 | ||
Other capital reserves | 30,000.00 | 30,000.00 | ||
Total | 741,704,076.44 | 741,704,076.44 |
27. Other Comprehensive Incomes
Item | Opening Balance | Current Period | Closing Balance | ||||
Amount in current period before income tax | Less: Previously recognized in other comprehensive income transferred to profit or loss | Less: income tax | Amount attribute to parent company after tax | Amount attribute to non-controlling shareholders after tax | |||
Other consolidate incomes that will be reclassified into profit and loss | 915,704.03 | -142,861,056.33 | -142,880,414.18 | 19,357.85 | -141,964,710.15 | ||
Changes in fair value of available for sale financial assets | -140,593,969.30 | -140,593,969.30 | -140,593,969.30 | ||||
Difference from conversion of financial statements in foreign currency | 915,704.03 | -2,267,087.03 | -2,286,444.88 | 19,357.85 | -1,370,740.85 | ||
Other comprehensive Income Total | 915,704.03 | -142,861,056.33 | -142,880,414.18 | 19,357.85 | -141,964,710.15 |
28. Surplus reserves
Item | Opening Balance | Increase in Current Period | Decrease in Current Period | Closing Balance |
Statutory surplus reserves | 753,494,000.00 | 753,494,000.00 | ||
Total | 753,494,000.00 | 753,494,000.00 |
Statements for surplus reserves include increase or decrease changes and changereasons this period.The legal surplus reserve has reached 50% of the registered capital. The legal surplusreserve was not withdrawn in the current period
29. Undistributed profits
Item | Current Period | Previous Period |
Undistributed profit before adjustment at theend of the last year
Undistributed profit before adjustment at the end of the last year | 26,511,938,505.25 | 23,049,443,346.09 |
Undistributed profit after adjustment at the beginning of year | 26,511,938,505.25 | 23,049,443,346.09 |
Plus: net profit attributable to owners of the parent company for the current period | 8,115,189,794.69 | 6,627,169,959.16 |
Ordinary share dividends payable | 3,842,819,400.00 | 3,164,674,800.00 |
Undistributed profits at the end of the period | 30,784,308,899.94 | 26,511,938,505.25 |
Statements for adjusting undistributed profits at the beginning of the period:
Due to retrospective adjustment according to Accounting Standards for BusinessEnterprises and related new rule, undistributed profit at the beginningincreases/decreases by CNY 0.00.Due to changes of accounting policies, undistributed profit at the beginningincreases/decreases by CNY 0.00.Due to correction of accounting errors, undistributed profit at the beginningincreases/decreases by CNY 0.00.Due to other influences, undistributed profit at the beginning totally increases/decreasesby CNY 0.00.
30. Operating revenue and cost of sales
Item | Current period amount | Previous period amount | ||
Operating Revenue | Cost of sales | Operating Revenue | Cost of sales | |
Primary business | 23,186,902,149.00 | 5,527,417,445.92 | 19,468,365,663.88 | 6,285,763,095.97 |
Other business | 972,899,845.68 | 825,824,752.35 | 449,576,574.28 | 395,385,466.19 |
Total | 24,159,801,994.68 | 6,353,242,198.27 | 19,917,942,238.16 | 6,681,148,562.16 |
31. Taxes and surcharges
Item | Current period amount | Previous period amount |
Consumption tax | 3,052,824,791.60 | 719,619,698.60 |
Urban maintenance and construction tax | 306,402,753.67 | 187,348,938.98 |
Educational surcharge | 304,586,562.85 | 158,110,821.96 |
Property tax | 61,463,159.37 | 56,062,041.01 |
Land use tax | 22,733,353.58 | 21,020,413.58 |
Stamp tax | 10,995,368.32 | 9,705,637.17 |
Increment tax on land value | 10,699,953.12 | |
Environmental protection tax | 224,031.57 | |
Others | 2,280.00 | |
Total | 3,769,929,974.08 | 1,151,869,831.30 |
Other statements:
According to Notice on further Strengthening the Collection and Management of LiquorConsumption Tax (Guoshuihan [2017] No. 144) issued by the State Administration ofTaxation(SAT) issued, if a liquor manufacturing enterprise sets up muti-level sales unitsselling liquor, the SAT should verify the lowest assessable price of the manufacturingenterprise based on external sales price of final sales unit. Since 1 May 2017, the lowest
assessable price of liquor consumption tax has been adjusted to 60% uniformly from50% to 70%. The tax payment of the Company’s liquor consumption tax has beenchanged from withholding and remitting tax by trustee from direct payment by the liquormanufacturing enterprise since 1 September 2017. The accounting method ofconsumption tax was changed from manufacturing consignment reckoned in cost ofliquor production to self-production and self-sale reckoned in consumption taxes andsurcharges. The tax price of liquor consumption tax with ad valorem taxation has beechanged from composite assessable price to the lowest assessable price of themanufacturing enterprise based on external sales price of final sales unit since 1 May2017.
32. Selling and distribution expenses
Item
Item | Current Period | Previous Period |
Advertising promotion expense | 1,492,333,124.96 | 1,210,783,150.98 |
Payroll | 505,358,495.38 | 484,601,462.80 |
Shipping and handling cost[Note] | 5,385,839.29 | 233,747,902.25 |
Labor expense | 94,353,482.05 | 112,430,439.21 |
Travel expense | 371,943,599.53 | 275,629,936.19 |
Business entertainment expense | 2,468,968.74 | 1,881,714.48 |
Other expense | 89,558,118.27 | 68,372,501.14 |
Total | 2,561,401,628.22 | 2,387,447,107.05 |
Other statements:
The transportation cost of finished goods was previously borne by the Company, and itwas borne by the distributor in this period.
33. General and administrative expenses
Item | Current Period | Previous Period |
Payroll | 645,451,421.56 | 546,050,904.30 |
Travel expense | 51,131,089.76 | 46,464,950.04 |
Office allowance | 9,563,500.30 | 9,035,598.20 |
Wate, electric and steam expense | 64,140,517.86 | 55,857,399.91 |
Business entertainment expense | 17,889,974.15 | 13,876,207.36 |
Depreciation cost | 473,056,556.54 | 409,604,948.24 |
Rental expense | 9,114,114.28 | 12,784,133.46 |
Repair charge | 42,487,322.35 | 45,643,052.23 |
Amortization of intangible assets | 50,118,316.96 | 45,154,640.83 |
Vehicle use expense | 19,765,733.87 | 15,547,860.17 |
Shipping and handling cost | 43,220,136.60 | 52,448,446.71 |
Other expense | 278,326,418.38 | 253,934,718.28 |
Total | 1,704,265,102.61 | 1,506,402,859.73 |
34. Research and Development expenses
Item | Current Period | Previous Period |
Materials expenses | 5,487,765.94 | 7,595,141.60 |
Payroll | 13,387,099.46 | 10,757,741.42 |
Other expense | 8,690,352.23 | 7,392,364.18 |
Total | 27,565,217.63 | 25,745,247.20 |
35. Financial expenses
Item
Item | Current Period | Previous Period |
Interest expenses | 3,273.00 | 3,927.00 |
Less: Interest income | 69,133,580.05 | 48,793,842.12 |
Plus: Losses from currency exchange | 652,223.14 | 11,705,912.52 |
Plus: Bank charges | 3,339,447.15 | 3,171,671.13 |
Total | -65,138,636.76 | -33,912,331.47 |
36. Impairment losses
Item | Current Period | Previous Period |
Bad debt loss | 1,098,948.45 | 2,151,140.21 |
Inventory value loss | 920,789.05 | |
Goodwill impairment loss | 19,795,848.86 | |
Total | 1,098,948.45 | 22,867,778.12 |
37. Other income
Sources of other income | Current Period | Previous Period |
Government grants received | 59,870,221.67 | 44,745,640.94 |
Withholding personal tax commission | 3,482,761.39 | |
Total | 63,352,983.06 | 44,745,640.94 |
38. Investment income
Item | Current Period | Previous Period |
Investment income from long-term equity investments under the equity method | 1,819,591.30 | -1,299,882.30 |
Investment income gained during the period of holding the available-for-sale financial assets and others | 35,123,288.49 | 17,800,330.17 |
Investment income from disposing available-for-sale financial assets | 56,995,537.28 | 90,627,738.02 |
Other investment income[Note] | 824,354,377.42 | 516,824,879.08 |
Total | 918,292,794.49 | 623,953,064.97 |
Other statements:
Other investment income is the investment income generated by the purchased financial products.
39. Gains from disposal of assets
Sources of gains from disposal of assets | Current Period | Previous Period |
Gains from disposal of fixed assets | 24,568,477.22 | -8,598,844.11 |
40.Non-operating incomes
Item | Current Period | Previous Period | The amount included in the extraordinary |
Liquidated damages income | 15,698,217.08 | 11,966,175.47 | 15,698,217.08 |
Withholding personal tax commission | 2,400,925.65 | ||
Compensation payment | 10,840,761.81 | 4,244,301.19 | 10,840,761.81 |
Account payables that are unable to pay | 9,540,839.98 | 9,540,839.98 |
Others
Others | 1,851,187.31 | 1,210,652.45 | 1,851,187.31 |
Total | 37,931,006.18 | 19,822,054.76 | 37,931,006.18 |
41. Non-operating expenses
Item | Current Period | Previous Period | The Amount Included in Extraordinary |
Losses from retirement of fixed asset | 2,364,904.26 | 2,364,904.26 | |
Donation expenses | 8,890,000.00 | 4,255,000.00 | 8,890,000.00 |
Integrated fund | 68,150.83 | 77,868.28 | |
Reparations | 227,180.00 | 441,197.00 | 227,180.00 |
Others | 846,799.20 | 3,566,467.53 | 846,799.20 |
Total | 12,397,034.29 | 8,340,532.81 | 12,328,883.46 |
42. Income tax expense
(1)Statement of income tax expense
Item | Current Period | Previous Period |
Current Period Income Tax | 2,792,139,209.45 | 2,316,822,437.89 |
Deferred Income Tax | -68,283,315.11 | -87,654,013.74 |
Total | 2,723,855,894.34 | 2,229,168,424.15 |
(2)Adjustment for Accounting Profit and Income tax expense
Item | Current Period Amount |
Income Tax Expenses Determined by Statutory/Applicable Tax Rate | 10,839,185,788.84 |
Impact from Subsidiaries’ Different Tax Rates | 2,709,796,447.21 |
Adjust for Impact from Income Tax Expense in Previous Period | -1,107,326.22 |
Impact from Non-taxable Income | 6,716,079.57 |
Non-Deductible Costs, Expenses and Losses | -7,149,187.35 |
Deductible from Deferred Tax Assets in Previous Period | 6,906,147.12 |
Temporary Differences Due to Unrecognized Deferred tax Asset during Current Period | -643,676.49 |
Others | 9,337,410.50 |
Income Tax Expense | 2,723,855,894.34 |
43. Other comprehensive income
Detailsin Notes VI. 27 “Other Comprehensive Incomes”
44. Notes to the cash flow statement
(1)Cash received from other operation activities
Item | Current Period | Previous Period |
Risk deposit | 41,386,027.21 | 47,312,595.70 |
Security deposit | 1,078,922,221.42 | 153,130,574.87 |
Interest income | 69,133,580.05 | 48,793,842.12 |
Liquidated damages income | 15,698,217.08 | 16,210,476.66 |
Withholding personal tax | 3,482,761.39 | 2,400,925.65 |
commission
commission | ||
Government grants | 51,034,055.00 | 35,893,640.94 |
Others | 233,913,582.83 | 123,690,396.17 |
Total | 1,493,570,444.98 | 427,432,452.11 |
(2)Cash paid for other operating activities
Item | Current Period | Previous Period |
Transportation fee | 73,756,101.88 | 275,767,664.19 |
Advertising promotion expense | 1,514,147,166.86 | 1,150,193,005.98 |
Rental expense | 11,809,301.97 | 15,515,018.50 |
Repair charge | 42,532,923.93 | 45,714,951.47 |
Travel expense | 393,625,149.65 | 313,614,903.30 |
Entertainment expense | 20,358,942.89 | 15,832,355.68 |
Insurance expenses | 4,809,096.29 | 2,398,922.19 |
Labor expense | 135,194,429.87 | 113,395,206.68 |
Others | 990,691,742.63 | 282,226,385.55 |
Total | 3,186,924,855.97 | 2,214,658,413.54 |
(3)Cash received for other financing activities
Item | Current Period | Previous Period |
Letter of credit guarantee deposit | 1,500,000.00 | |
Total | 1,500,000.00 |
(4)Cash paid for other financing activities
Item | Current Period | Previous Period |
Payments for the loans to original shareholders of a subsidiary before the business combinations not under common control | 246,204,388.41 | |
Letter of credit guarantee deposit | 1,500,000.00 | |
Total | 247,704,388.41 |
45. Supplementary information to consolidated statement of cash flow
(1)Supplementary information to consolidated statement of cash flow
Item | Current Period | Previous Period |
Reconciliation of net profit to cash flow from operating activities | -- | -- |
Net profit | 8,115,329,894.50 | 6,618,786,143.67 |
Add: provision for asset impairment | 1,098,948.45 | 22,867,778.12 |
Depreciation of fixed asset, oil andgas assets and productive biological assets | 707,143,699.48 | 644,638,788.64 |
Amortization of intangible assets | 50,118,316.96 | 45,154,640.83 |
Amortization of long-term deferred expenses | 184,008.16 | 1,101,434.65 |
Losses from disposal of fixed assets, intangible assets and other long-term assets | -24,568,477.22 | 8,598,844.11 |
Losses on write-off of fixed assets | 2,364,904.26 | |
Financial expenses | 655,496.14 | 11,709,839.52 |
Losses on investments | -918,292,794.49 | -623,953,064.97 |
Item
Item | Current Period | Previous Period |
Decrease in deferred tax asset | -64,344,859.11 | -81,584,147.28 |
Increase in deferred tax liabilities | -3,938,515.05 | -541,555.63 |
Decrease in inventory | -1,027,648,654.29 | -634,118,034.37 |
Decrease in operation receivables | 49,163,073.33 | -20,895,686.14 |
Increase in operation payables | 2,169,483,775.16 | 891,404,818.16 |
Net Cash Flow from Operating Activities | 9,056,748,816.28 | 6,883,169,799.31 |
Significant investing and financing activities not involving cash flow | -- | -- |
Net change in cash andcash equivalents | -- | -- |
Closing balance of cash | 3,615,348,307.97 | 1,749,952,876.18 |
Less:opening balance of cash | 1,749,952,876.18 | 2,456,627,358.97 |
Net change in cash and cash equivalents | 1,865,395,431.79 | -706,674,482.79 |
(2)Composition of cash and cash equivalents
Item | Closing Balance | Opening Balance |
Cash | 3,615,348,307.97 | 1,749,952,876.18 |
Including:cash on hand | 24,103.07 | 4,883.33 |
Unrestricted bank deposit | 3,602,515,767.58 | 1,726,983,843.15 |
Other unrestricted cash & cash equivalents | 12,808,437.32 | 22,964,149.70 |
Closing balance of cash andcash Equivalents | 3,615,348,307.97 | 1,749,952,876.18 |
46. Foreign currency transactions
(1) Foreign currency balance
Item | Closing Balance in foreign currency | Exchange rate | Closing Balance in CNY |
Cash and cash equivalents | -- | -- | 50,283,591.25 |
Including:USD | 5,234,266.36 | 6.8632 | 35,923,816.88 |
EUR | |||
HKD | 1,153,729.70 | 0.8762 | 1,010,897.96 |
CLF | 1,356,097,790.00 | 0.0098436 | 13,348,876.41 |
Other receivables | 240,078.59 | ||
Including:HKD | 273,999.76 | 0.8762 | 240,078.59 |
Accounts payable | 3,392,242.64 | ||
Including:USD | 494,265.45 | 6.8632 | 3,392,242.64 |
Other payables | 3,005,704.13 | ||
Including:HKD | 3,430,385.91 | 0.8762 | 3,005,704.13 |
Accounts receivables | -- | -- | |
Including:USD | |||
EUR | |||
HKD | |||
Long-term loans | -- | -- | |
Including:USD | |||
EUR | |||
HKD | |||
(2) Description of the overseas business entity, including the important foreignbusiness entity, which shall disclose its main foreign business place, bookkeepingstandard currency and selection basis, and shall also disclose the reason for thechange of the bookkeeping standard currency.√ Applicable ? N/A
Foreign business entities
Foreign business entities | Operation Site | Functional Currency | Choosing Reason |
JSSJ Industry (HK) Holdings Co., Limited | Hong Kong, China | HKD | Currency in the main economic environment of business operations |
ZYG E-Commerce HK Limited | Hong Kong, China | HKD | Currency in the main economic environment of business operations |
ZYG LTD | Cayman Islands | USD | Currency in the main economic environment of business operations |
Yanghe International Investment Ltd | British Virgin Islands | USD | Currency in the main economic environment of business operations |
ZYG Technology Investment Ltd | British Virgin Islands | USD | Currency in the main economic environment of business operations |
Yanghe Chile SPA | Santiago, Chile | PESO | Currency in the main economic environment of business operations |
47. Government grants
(1)Details of government grants
Item | Amount | Presentation | Amount included in profit or loss |
Funds for supporting local industries | 9,081,955.00 | Other income | 9,081,955.00 |
Guiding funds for the development of local industries | 23,845,100.00 | Other income | 23,845,100.00 |
Funds for local industrial development | 4,000,000.00 | Other income | 4,000,000.00 |
Subsidy of pollution discharge | 3,000,000.00 | Other income | 3,000,000.00 |
2017 enterprise research and development expense provincial financial subsidy funds | 1,000,000.00 | Other income | 1,000,000.00 |
2017 Siyang county industrial development guidance funds | 1,000,000.00 | Other income | 1,000,000.00 |
Subsidies for the cleanrenovation of coal-firedboilers
Subsidies for the clean renovation of coal-fired boilers | 3,800,000.00 | Other income | 3,800,000.00 |
2017 Provincial supplementary funds for the training of highly skilled talents in short supply | 870,000.00 | Other income | 870,000.00 |
The first batch of special funds for 2017 talent introduction needed for development | 630,000.00 | Other income | 630,000.00 |
Special funds for urgent needed talents for the development of north Jiangsu | 610,000.00 | Other income | 610,000.00 |
The first batch of 2017 award and subsidy projects of municipal industrial development guidance fund (industrial development) | 513,000.00 | Other income | 513,000.00 |
Industrial tourism toilet special guide fee | 340,000.00 | Other income | 340,000.00 |
2018 Special fund for provincial business development (e-commerce development project) | 300,000.00 | Other income | 300,000.00 |
2018 Provincial key research and development plan (industrial foresight and generic key technology) project | 300,000.00 | Other income | 300,000.00 |
Suqian guiding funds for industrial development | 150,000.00 | Other income | 150,000.00 |
2017 Siyang County Finance Bureau tourism special funds | 80,000.00 | Other income | 80,000.00 |
Others | 1,514,000.00 | Other income | 1,514,000.00 |
Transfer from the deferred income in the current period | 8,836,166.67 | Other income | 8,836,166.67 |
Total | 59,870,221.67 | 59,870,221.67 |
VIII. Changes in consolidated scope
1. Others
Establishment of subsidiaries(1) On June 2018, the Company and its controlling subsidiary Su Wine Group JiangsuWealth Management Co., Ltd. respectively subscribed CNY 150,000 to set up JiangsuYanghe Investment Management Co., Ltd.. It is included in the consolidated financialstatements from June 2018.(2) On May 2018, the controlling subsidiary Su Wine Group Trade Co., Ltd. subscribedCNY 50,000 to set up Su Wine Group Nanjing Operation Management Co., Ltd. It isincluded in the consolidated financial statements from May 2018.(3) On November 7 2018, the controlling subsidiary Su Wine Group Trade Co., Ltd.subscribed 10 million yuan to set up Jiangsu Zhongshiji Wine Industry Co., Ltd. As of
December 31 2018, it has not made any actual investment.It is included in theconsolidated financial statements from November 2018.
Cancellation of subsidiaries(1) Sihong Shuangtai Package Co., Ltd., the controlling subsidiary in this period,conducted liquidation and cancellation. On May 29, 2018, it obtained the notice ofcompany approval for cancellation registration issued by Sihong County MarketSupervision and Administration Bureau.It will no longer be included in the consolidatedfinancial statements from June 2018.(2) The controlling subsidiary, Sue Wine Group Trade Co., Ltd. merged Nanjing HuitengMedia Technology Co., Ltd. On November 7, 2018, it obtained the notice of companyapproval for cancellation registration issued by Nanjing Jianye District MarketSupervision and Administration Bureau.
IX. Interests in other entities
1. Interests in subsidiaries
(1) Group composition:
Name of subsidiaries
Name of subsidiaries | Major business location | Place of registration | Nature of business | Shareholding | Acquisition method | |
Direct | Indirect | |||||
Jiangsu Yanghe Package Co., Ltd. | Suqian, Jiangsu province | Suqian, Jiangsu province | Liquor package | 100.00% | Establishment | |
Nanjing Yanghe Blue Classic Co.,Ltd. | Nanjing, Jiangsu province | Nanjing, Jiangsu province | Commerce | 100.00% | Establishment | |
Beijing Yanghe Commerce and Trade Co.,Ltd. | Fengtai,Beijing | Fengtai,Beijing | Commerce | 100.00% | Establishment | |
Jiangsu Huaqu Wine Group Co.,Ltd. | Nanjing, Jiangsu province | Nanjing, Jiangsu province | Commerce | 97.00% | Establishment | |
Suqian TianhaiCommerce and Trade Co.,Ltd. | Suqian, Jiangsu province | Suqian, Jiangsu province | Commerce | 100.00% | Establishment | |
HuaianHuaqu Wine Development Co.,Ltd. | Huaian, Jiangsu province | Huaian, Jiangsu province | Commerce | 100.00% | Establishment | |
Suqian Yanghe Guibinguan Co.,Ltd. | Suqian, Jiangsu province | Suqian, Jiangsu province | Hotel industry | 100.00% | Establishment | |
Jiangsu Huaqu Wine Group Nanjing Co.,Ltd. | Nanjing, Jiangsu province | Nanjing, Jiangsu province | Commerce | 100.00% | Establishment | |
Su Wine Group Trade Co.,Ltd. | Suqian, Jiangsu province | Suqian, Jiangsu province | Commerce | 83.63% | 16.37% | Establishment |
Wuxi Huaqu Wine Development Co.,Ltd. | Wuxi, Jiangsu province | Wuxi, Jiangsu province | Commerce | 100.00% | Establishment | |
Taizhou Huaqu Wine Development Co.,Ltd. | Taizhou, Jiangsu province | Taizhou, Jiangsu province | Commerce | 100.00% | Establishment | |
Jiangsu Huaqu Wine Group Nantong Co.,Ltd. | Nantong, Jiangsu province | Nantong, Jiangsu province | Commerce | 100.00% | Establishment | |
Jiangsu Huaqu Wine Group Suzhou Co.,Ltd. | Suzhou, Jiangsu province | Suzhou, Jiangsu province | Commerce | 100.00% | Establishment | |
Jiangsu Huaqu Wine Group Yancheng Co.,Ltd. | Yancheng, Jiangsu province | Yancheng, Jiangsu province | Commerce | 100.00% | Establishment | |
Jiangsu Yanghe | Suqian, Jiangsu | Suqian, Jiangsu | Commerce | 100.00% | Establishment |
Name of subsidiaries
Name of subsidiaries | Major business location | Place of registration | Nature of business | Shareholding | Acquisition method | |
Direct | Indirect | |||||
Liquor Operation Mangement Co.,Ltd. | province | province | ||||
Jiangsu Shuanggou Liquor OperationCo.,Ltd. | Sihong, Jiangsu province | Sihong, Jiangsu province | Commerce | 100.00% | Establishment | |
Jiangsu Dongdi Union International Trade Co.,Ltd. | Suqian, Jiangsu province | Suqian, Jiangsu province | Commerce | 100.00% | Establishment | |
Jiangsu Dongdixinghui International Trade Co.,Ltd. | Suqian, Jiangsu province | Suqian, Jiangsu province | Commerce | 100.00% | Establishment | |
Suqian Blue Dream Trade Co.,Ltd. | Suqian, Jiangsu province | Suqian, Jiangsu province | Commerce | 100.00% | Establishment | |
Siyang Lantu Liquor OperationCo.,Ltd. | Siyang, Jiangsu province | Siyang, Jiangsu province | Commerce | 100.00% | Establishment | |
JSSJ Industry (HK) Holdings Co., Limited | Hong Kong, China | Hong Kong, China | CORP | 100.00% | Establishment | |
Hubei Lihuacun Trade Co.,Ltd. | Shiyan, Hubei province | Yunxian, Hubei province | Commerce | 100.00% | Establishment | |
Jiangsu Shuanggou Distillery Stock Co., Ltd. | Sihong, Jiangsu province | Sihong, Jiangsu province | Liquor manufacture and sales | 99.99% | 0.01% | Business combinations involving enterprises not under common control |
Sihong Shuangtai Package Co.,Ltd. | Sihong, Jiangsu province | Sihong, Jiangsu province | Liquor packaging | 100.00% | Business combinations involving enterprises not under common control | |
Sihong Shuanggou Antai waste recycling Co.,Ltd. | Sihong, Jiangsu province | Sihong, Jiangsu province | Waste material recycle | 100.00% | Business combinations involving enterprises not under common control | |
Hubei Lihuacun Liquor Industry Co.,Ltd. | Shiyan, Hubei province | Yunxian, Hubei province | Process liquor, wine and fruit wine | 100.00% | Business combinations involving enterprises not under common control | |
Ningxiang Miluochun Liquor Industry Co.,Ltd. | Ningxiang, Hunan province | Ningxiang, Hunan province | Manufacture and sale of liquor and compound wine | 100.00% | Business combinations involving enterprises not under common control | |
Harbin Binzhou Brewery Co.,Ltd. | Binxian, Heilongjiang province | Binxian, Heilongjiang province | Liquor-making | 100.00% | Business combinations involving enterprises not under common control | |
Su Wine Group Jiangsu Wealth Management Co.,Ltd. | Nanjing, Jiangsu province | Nanjing, Jiangsu province | Assets/investment management, information consultation | 100.00% | Establishment | |
Ningxiang Miluochun Trade Co.,Ltd. | Ningxiang, Hunan province | Ningxiang, Hunan province | Commerce | 100.00% | Establishment | |
Jinagsu Kelite Biology Technology Research Institute | Suqian, Jiangsu province | Suqian, Jiangsu province | Biological engineering research, enzyme | 100.00% | Establishment |
Name of subsidiaries
Name of subsidiaries | Major business location | Place of registration | Nature of business | Shareholding | Acquisition method | |
Direct | Indirect | |||||
Co.,Ltd. | preparation research and technology transfer | |||||
Xuzhou Huaqu Wine Development Co.,Ltd. | Xuzhou, Jiangsu province | Xuzhou, Jiangsu province | Commerce | 100.00% | Establishment | |
Suqian Sky Blue Trade Co.,Ltd. | Suqian, Jiangsu province | Suqian, Jiangsu province | Commerce | 100.00% | Establishment | |
Shiyan Yunyang Lihuacun Package Service Co.,Ltd. | Shiyan, Hubei province | Shiyan, Hubei province | Liquor, compound wine, health wine packaging service | 100.00% | Establishment | |
Jiangsu Lion and Sheep Network Technology Co.,Ltd. | Nanjing, Jiangsu province | Nanjing, Jiangsu province | Network technology development, technical consultation, technical services; Software development | 100.00% | Establishment | |
Jiangsu Zhaiyougou E-commerce Co.,Ltd | Nanjing, Jiangsu province | Nanjing, Jiangsu province | Commerce | 100.00% | Business combinations involving enterprises not under common control | |
NanjingTongmeng City Logistics Co.,Ltd. | Nanjing, Jiangsu province | Nanjing, Jiangsu province | Freight Transport, Warehouse service | 99.99% | Business combinations involving enterprises not under common control | |
Nanjing jinling Tongmeng City Logistics Co.,Ltd. | Nanjing, Jiangsu province | Nanjing, Jiangsu province | Freight Transport, Warehouse service | 51.00% | Business combinations involving enterprises not under common control | |
Nanjing Oubaosi International Trade Co.,Ltd. | Nanjing, Jiangsu province | Nanjing, Jiangsu province | Import and export business of self-run goods, agency goods and technology | 100.00% | Business combinations involving enterprises not under common control | |
Huaian Tongmeng City Logistics Co.,Ltd. | Huaian, Jiangsu province | Huaian, Jiangsu province | Freight Transport, Warehouse service | 51.00% | Business combinations involving enterprises not under common control | |
Changzhou Jiezzhong Tongmeng City Logistics Co.,Ltd. | Changzhou, Jiangsu province | Changzhou, Jiangsu province | Freight Transport, Warehouse service | 51.00% | Business combinations involving enterprises not under common control | |
Nantong Tongmeng City Logistics Co.,Ltd. | Nantong, Jiangsu province | Nantong, Jiangsu province | Freight Transport, Warehouse service | 51.00% | Business combinations involving enterprises not under common control | |
Suzhou Tongmeng City Logistics Co.,Ltd. | Suzhou, Jiangsu province | Suzhou, Jiangsu province | Freight Transport, Warehouse service | 51.00% | Business combinations involving enterprises not under common control |
Name of subsidiaries
Name of subsidiaries | Major business location | Place of registration | Nature of business | Shareholding | Acquisition method | |
Direct | Indirect | |||||
Taizhou Tongmeng City Logistics Co.,Ltd. | Taizhou, Jiangsu province | Taizhou, Jiangsu province | Freight Transport, Warehouse service | 51.00% | Business combinations involving enterprises not under common control | |
Wuxi Tongmeng City Logistics Co.,Ltd. | Wuxi, Jiangsu province | Wuxi, Jiangsu province | Freight Transport, Warehouse service | 51.00% | Business combinations involving enterprises not under common control | |
Yancheng Tongmeng City Logistics Co.,Ltd. | Yancheng, Jiangsu province | Yancheng, Jiangsu province | Freight Transport, Warehouse service | 51.00% | Business combinations involving enterprises not under common control | |
Zhenjiang Tongmeng City Logistics Co.,Ltd. | Zhenjiang, Jiangsu province | Zhenjiang, Jiangsu province | Freight Transport, Warehouse service | 51.00% | Business combinations involving enterprises not under common control | |
Yangzhou Tongmeng City Logistics Co.,Ltd. | Yangzhou, Jiangsu province | Yangzhou, Jiangsu province | Freight Transport, Warehouse service | 53.00% | Business combinations involving enterprises not under common control | |
Suqian Tongmeng City Logistics Co.,Ltd. | Suqian, Jiangsu province | Suqian, Jiangsu province | Freight Transport, Warehouse service | 51.00% | Business combinations involving enterprises not under common control | |
Pizhou Tongmeng City Logistics Co.,Ltd. | Xuzhou, Jiangsu province | Xuzhou, Jiangsu province | Freight Transport, Warehouse service | 51.00% | Business combinations involving enterprises not under common control | |
Lianyungang Huaxing Tongmeng City Logistics Co.,Ltd. | Lianyungang, Jiangsu province | Lianyungang, Jiangsu province | Freight Transport, Warehouse service | 51.00% | Business combinations involving enterprises not under common control | |
Jiangsu Zhaibianli E-commerce Co.,Ltd | Nanjing, Jiangsu province | Nanjing, Jiangsu province | Commerce | 100.00% | Business combinations involving enterprises not under common control | |
Hongkong Zhaiyougou International Trade Co.,Ltd | Hong Kong,China | Hong Kong,China | Commerce | 100.00% | Business combinations involving enterprises not under common control | |
Guizhou Guijiu Co.,Ltd. | Guiyang, Guizhou province | Guiyang, Guizhou province | Liquor production; Liquor and alcohol sales | 100.00% | Business combinations involving enterprises not under common control | |
Guizhou Guijiu Liquor | Guiyang, | Guiyang, Guizhou | Commerce | 100.00% | Establishment |
Name of subsidiaries
Name of subsidiaries | Major business location | Place of registration | Nature of business | Shareholding | Acquisition method | |
Direct | Indirect | |||||
Operation Management Co.,Ltd. | Guizhou province | province | ||||
Guizhou Guijiu Trade Co.,Ltd. | Guiyang, Guizhou province | Guiyang, Guizhou province | Commerce | 100.00% | Establishment | |
Guizhou Guijiu Package Co.,Ltd. | Guiyang, Guizhou province | Guiyang, Guizhou province | Guijiu series liquor, compound wine, health care wine packaging | 100.00% | Establishment | |
Jinagsu Guanmeng Information Technology Co.,Ltd. | Suzhou, Jiangsu province | Suzhou, Jiangsu province | Information technology development | 100.00% | Establishment | |
ZYG E-Commerce HK Limited | Hong Kong,China | Hong Kong,China | Industrial investment | 100.00% | Business combinations involving enterprises not under common control | |
ZYG LTD | Cayman Islands | Cayman Islands | Industrial investment | 69.08% | Business combinations involving enterprises not under common control | |
YangHe International Investment Ltd | British Virgin Islands | British Virgin Islands | Industrial investment | 100.00% | Establishment | |
Nanjing Huiteng Media Technology Co.,Ltd. | Nanjing, Jiangsu province | Nanjing, Jiangsu province | Internet technology development, design, production, agency, release announcement | 100.00% | Establishment | |
Jiangsu Shuanggou Healthy Liquor Research institute Co.,Ltd. | Suqian, Jiangsu province | Suqian, Jiangsu province | Healthy wine, nutrition and health food research and development | 100.00% | Establishment | |
ZYG Technology Investment Ltd | British Virgin Islands | British Virgin Islands | Industrial investment | 71.03% | Business combinations involving enterprises not under common control | |
Jiangsu Blue Dream E-commerce Co.,Ltd. | Suqian, Jiangsu province | Suqian, Jiangsu province | Commerce | 100.00% | Establishment | |
Jiangsu Yanghe Weiketang Network Technology Co.,Ltd. | Nanjing, Jiangsu province | Nanjing, Jiangsu province | Network technology development, technical consultation, technical servic | 100.00% | Establishment | |
Guizhou Welcome Drink Stock Co., Ltd. | Renhuai, Guizhou province | Renhuai, Guizhou province | Liquor manufacture and sales | 100.00% | Business combinations involving enterprises not under common control | |
Dream Blue Chuanhaihui (Shiyan) Trade Investment Co.,Ltd. | Shiyan, Hubei province | Shiyan, Hubei province | Industrial investment, Online business consultation | 95.00% | Business combinations involving enterprises not under common control | |
Suqian Su Wine Logistics Co.,Ltd. | Suqian, Jiangsu province | Suqian, Jiangsu province | Road general cargo transport, cargo distribution, freight forwarder | 100.00% | Establishment | |
Yanghe Chile SPA | Santiago, Chile | Santiago, Chile | Movable and real estate investment services, building | 100.00% | Establishment |
Name of subsidiaries
Name of subsidiaries | Major business location | Place of registration | Nature of business | Shareholding | Acquisition method | |
Direct | Indirect | |||||
construction services | ||||||
Jiangsu Yanghe Investment Management Co.,Ltd. | Suqian, Jiangsu province | Suqian, Jiangsu province | Foreign investment, Asset management, Investment consulting | 50.00% | 50.00% | Establishment |
Su Wine Group Nanjing Operation Management Co.,Ltd. | Nanjing, Jiangsu province | Nanjing, Jiangsu province | Enterprise management consulting; Industrial investment; Food sales; Gift sales; House lease; Hotel management | 100.00% | Establishment | |
Jiangsu Zhongshiji liquor Co.,Ltd. | Nanjing, Jiangsu province | Nanjing, Jiangsu province | Food sales, Gift sales | 100.00% | Establishment |
2. Interests in associates and a joint venture
(1) The impact of the Group’s associates on the Group is not significant.Summarized information is as follows:
Closing Balance/Amount in current period | Opening Balance/Amount in previous period | |
Associates: | -- | -- |
Aggregated carrying amount of investments | 9,423,328.82 | 1,980,046.94 |
Aggregate of the following items calculated in proportion to shareholding | -- | -- |
Joint ventures: | -- | -- |
Aggregate of the following items calculated in proportion to shareholding | -- | -- |
--Net profit | 1,819,591.30 | -1,299,882.30 |
-- Total comprehensive income | 1,819,591.30 | -1,299,882.30 |
X. Risks related to financial instruments
The Group is exposed to various financial risks in the ordinary course of business, mainlyincluding: Credit risk, Liquidity risk, Market Risk, etc. The Company's management is fullyresponsible for the formulation of risk management objectives and policies, and takesresponsibility for risk management objectives and policies. The objective of theCompany’s risk management is to identify and analysis risk, minimizing the adverseimpact of financial risks without excessive influence on the company's competitivenessand resilience.
1. Credit risks
Credit risk refers to the risk that one party of the financial instruments fails to perform itsobligations and causes the financial losses of the other party. Credit risk mainly related tonotes receivables and accounts receivable, in order to control the risk, the Companytakes the following measures:
(1) Notes receivables and Accounts receivables
The Company mainly trades with franchiser, according to company credit policy,andadopts the way of delivery after the payments finished. For some group purchasebusiness, it only deals with the reputable group clients, and continuously monitors thebalance of notes receivables and accounts receivables, as a result, there is no collateralrequired, and credit risk management concentrates on the clients. The balance of notesreceivables and accounts receivablesare small till December 31, 2018. The Companydoes not hold any collateral or other credit enhancement for the balance of accountsreceivables.
(2) Other receivable
The other receivables are mainly deposits, security deposits and petty cash, employeebusiness loan and so on. The Company manages other receivables and continuouslymonitors its balance, to ensure the Company not to face significant bad debt risks.
The amount included in notes receivables and accounts receivables which are notoverdue, impaired, and financial assets overdue but not impaired, duration analysis areas follows:
Item
Item | Closing Balance | ||||
Within 1 year | 1-2 years | 2-3 years | Over 3 years | Total | |
Notes receivable and Account receivable | 247,072,542.59 | 995,518.37 | 123,378.21 | 2,061,671.49 | 250,253,110.66 |
Other receivable | 5,600,638.03 | 7,283,730.25 | 1,345,777.77 | 16,366,022.83 | 30,596,168.88 |
(Continued)
Item | Opening Balance | ||||
Within 1 year | 1-2 years | 2-3 years | Over 3 years | Total | |
Notes receivable and Account receivable | 217,962,053.12 | 3,621,893.85 | 12,493.33 | 2,049,351.46 | 242,957,583.97 |
Other receivable | 14,638,635.49 | 2,497,442.07 | 7,213,051.26 | 14,839,793.55 | 39,188,922.37 |
(3) The impairment offinancial assets are CNY 65,747,048.93 depositin ICBC ZhenzhouJiefang Road Branch and Kaifeng Haode Branch.The security depositpaid to JiangsuJuntai Properties Co., Ltd. and Suqian Guotai Department Store Co.,Ltd. bankruptcyadministrator was CNY 15,000,000.00. The bad debts provision is CNY 47,839,924.27,and for the investment in Suqian Traffic Investment Co,Ltd.,the available-for-salefinancial assets measured by cost is CNY 948,000.00, with full impairment provision.
2. Liquidity risk
Liquidity risk refers to the risk of capital shortage when enterprise performs its obligationsrelated to financial liabilities. The Company uses various financing methods such as billclearing and bank loan to optimize the financing structure and maintain the balancebetween financing continuity and flexibility.
The Company's financial liabilities according to the expiration of the remaining contractobligations as follows:
Item
Item | Closing Balance | ||||
Within 1 year | 1-2 years | 2-3 years | Over 3 years | Total | |
Notes payable and Account payables | 1,261,282,397.89 | 1,261,282,397.89 | |||
Other payables | 6,457,301,511.01 | 6,457,301,511.01 |
long-term loan | 109,088.00 | 109,088.00 | |||
Special payable | 198,404,248.85 | 198,404,248.85 |
(Continued)
Item | Opening Balance | ||||
Within 1 year | 1-2 years | 2-3 years | Over 3 years | Total | |
Notes payable and Account payables | 1,119,603,574.47 | 1,119,603,574.47 |
Other payables | 5,620,040,515.94 | 5,620,040,515.94 | |||
long-term loan | 145,452.00 | 145,452.00 |
Special payable | 199,107,530.75 | 199,107,530.75 |
3. Market risk
Market risk is the fair value of financial instrument or future cash flow fluctuates due tothe fluctuation of market price, and it mainly includes: Interest rate risk, Foreign exchangerisk, etc.
(1) Interest rate risk
Interest rate risk refers to the fair value of financial instrument or future cash flowfluctuates due to the fluctuation of interest rate. The Company faces the risk of marketinterest rate change mainly related to the Company's borrowing limit.
(2) Foreign exchange risk
Foreign exchange risk arises from fluctuation in exchange rate, relevant to the assetsand liabilities in foreign currency. The less import and export business happened, thelower impact of exchange rate fluctuation on company's operation.
The carrying amounts in CNY of the Company’s assets and liabilities denominated inforeign currencies are summarized below:
Item | Closing Balance | Opening Balance | ||||
Balance in foreign currency | Exchange rate | Balance in CNY | Balance in foreign currency | Exchange rate | Balance in CNY |
Item
Item | Closing Balance | Opening Balance | ||||
Balance in foreign currency | Exchange rate | Balance in CNY | Balance in foreign currency | Exchange rate | Balance in CNY |
Cash and cash equivalents | ||||||
Include: USD | 5,234,261.55 | 6.8632 | 35,923,783.86 | 54,045,724.59 | 6.5342 | 353,145,573.62 |
HKD | 1,153,729.70 | 0.8762 | 1,010,897.96 | 988,300.75 | 0.83591 | 826,130.48 |
CLF | 1,356,097,790.00 | 0.0098436 | 13,348,876.41 | |||
Other receivables | ||||||
Include: USD |
HKD | 273,999.76 | 0.8762 | 240,078.59 | 227,665.60 | 0.83591 | 190,307.95 |
Available-for-sale financial assets |
Include: USD | 9,660,971.29 | 6.8632 | 66,305,178.14 | 8,058,272.79 | 6.5342 | 52,654,366.05 |
CLF | 28,928,067,943.20 | 0.009844 | 284,756,163.23 | |||
Account payables |
Include: USD | 494,265.45 | 6.8632 | 3,392,242.64 | 198,911.03 | 6.5342 | 1,299,724.45 |
CLF | 6,139,589.00 | 0.009844 | 60,435.62 | |||
Other payables |
Include: HKD | 3,430,385.91 | 0.8762 | 3,005,704.13 | 2,436,507.98 | 0.83591 | 2,036,701.39 |
CLF | 168,352.00 | 0.009844 | 1,657.19 | |||
Net amount | 395,124,938.61 | 403,479,952.26 |
XI.Fair value disclosure
1. Continuous measurement at fair value and discontinuousmeasurement at fair value
Item | Closing fair value | |||
Level 1 | Level 2 | Level 3 | Total | |
Disclosure of continuous measurement at fair value | -- | -- | -- | -- |
2. Available-for-sale financial assets | 284,756,163.23 | 284,756,163.23 | ||
(2) Equity instrument investment | 284,756,163.23 | 284,756,163.23 | ||
Disclosure of discontinuous measurement at fair value | -- | -- | -- | -- |
2. Determination basis of the market value of items measuredcontinuously and discontinuously within Level 1 of the fair valuehierarchy
Item | Fair value | Active market quote | |
Transaction price | Sources |
Continuous measurement at fair value | |||
Available-for-sale financial assets | 284,756,163.23 | 284,756,163.23 |
Include: Equity instrument investment | 284,756,163.23 | 284,756,163.23 | Closing price in local open market |
Total amount of assets measured atfair value continuously
Total amount of assets measured at fair value continuously | 284,756,163.23 | 284,756,163.23 |
XII. Related parties and related party transactions
1. The parent company of the Company
Name of Parent Company | Registration Place | Business Nature | Registered Capital | Shareholding Ratio by the Parent Company | Voting Ratio by the Parent Company |
Jiangsu Yanghe Group Co.,Ltd. | Suqian, Jiangsu | Sales of brewing machinery equipment, export of liquor, import of various raw and auxiliary materials, equipment and accessories required for production, industrial investment. | CNY 110.00 million | 34.16% | 34.16% |
Information about the Company’s parent companyThe final control party of the Company is State-owned Assets Supervision andAdministration Commission of Suqian
2. Subsidiaries of the Company:
The information about the subsidiaries of the Company refers to Note IX.1 Interests inSubsidiaries.
3. Joint venture and associate of the Company
The information about the joint venture and associate of the Company refers to the Notes.Other joint ventures and associates whose related party transactions with the Companyin the current period or balance formed from related party transactions with the Companyin the prior period as follows:
Name of Joint Venture and Associate | Relationship with the Company |
Jiangsu Su Wine Cultural Transmission Co.,Ltd. | Joint venture |
Nanjing Hesong Culture TechnologyCo.,Ltd. | Joint venture |
Jiangsu Xinghe Investment Management Co.,Ltd. | Joint venture |
4. Other related party
Name of Other Related Party | Relationship with the Company |
Shanghai Haiyan Logistics Development Co.,Ltd. | Holding 9.67% shares |
Suning Consumption Finance Co.,Ltd. | Joint stock company, holding 5% shares |
VSPT, Vi?a San Pedro Tarapacá S.A. | Joint stock company, holding 12.50% shares |
5. Related party transactions
(1) Related transactions of purchase of goods / supply and receipt of laborservicesTable of Purchase of Goods / Receipt of Labor Services
Related Party
Related Party | Transaction Content | Amount in current period | Approved Transaction amount | Whether it is over transaction amount or not | Amount in previous period |
VSPT, Vi?a San Pedro Tarapacá S.A | Red wine | 23,075,164.23 | |||
Nanjing Hesong Culture Technology Co.,Ltd. | Advertising and general publicity expense | 21,460,376.65 |
Table of sales of goods/rendering of labor services
Related Party | Transaction Content | Amount in current period | Amount in previous period |
Shanghai Haiyan Logistics Development Co.,Ltd. | Sales of liquor | 24,698,678.39 | 21,254,112.01 |
Jiangsu Su WineCultural Transmission Co.,Ltd. | Sales of liquor | 34,464,141.85 | 29,337,312.84 |
(2) Related party leasing
The Company as Lessor:
Name of lessee | Type of leased asset | Leasehold income recognized during current reporting period | Leasehold income recognized during previous reporting period |
The Company as Lessee:
Name of lessor | Type of leased asset | Leasing fee recognized during current reporting period | Leasing fee recognized during previous reporting period |
Jiangsu Yanghe Group Co.,Ltd. | Building | 666,666.67 |
(3) Other related party transactionsDeposit businessSu Wine Group Jiangsu Wealth Management Co., Ltd, the holding subsidiary, collectedCNY 15,000.00 of one-year deposit in Suning Consumption Finance Co., Ltd andcollected deposit interest of CNY 9,903,472.22.
Jiangsu Yanghe Investment Management Co., Ltd.,the holding subsidiary, depositedCNY 50million, CNY 50 million, CNY 50 million, CNY 50 million, CNY 50 million and CNY10 million of one-year deposits in Suning Consumption Finance Co., Ltd. on November 6,November 9, November 16, November 19 and December 7, 2018 separately, with a totaldeposit of CNY 300 million and an annual interest rate of 6.50%.
6. Receivables and payables of related parties
(1) Payables
Item
Item | Related Party | Closing Balance | Opening Balance |
Advance from customer | Shanghai Haiyan Logistics Development Co.,Ltd. | 8,427,121.32 | 244,800.00 |
Advance from customer | Jiangsu Su WineCultural Transmission Co.,Ltd. | 4,541,664.83 | |
Other Payables | Shanghai Haiyan Logistics Development Co.,Ltd. | 801,624.00 | 120,920.00 |
Other Payables | Jiangsu Su WineCultural Transmission Co.,Ltd. | 933,060.00 | 100,000.00 |
XIII. Commitments and contingencies
1. Significant commitments
Significant commitments existing on the balance sheet dateBy the end of 31 December 2018, there were no significant commitments needed to bedisclosed.
2. Contingencies(1) Significant contingencies existing on the balance date
Su Wine Group Trade Co.,Ltd., the holding subsidiary, deposited CNY 1.3 billion in ICBCZhengzhou Jiefang Road Branch and ICBC Kaifeng Dehao Branch. For the tort liabilitydispute events, Su Wine Trade Group had started civil proceedings to recover lossesfrom the relevant responsible unit and person. On 12 February 2015, the Companyreceived the case acceptance notice from Jiangsu Suqian Intermediate People'sCourtand the court has put on record. According to the civil ruling paper from JiangsuHigher People's Court separately on 30 October 2015 and 14 December 2015, the abovetort liability dispute casewas accepted by Jiangsu Suqian Intermediate People's Court.Some infringers involved in criminal offence were tried. By the end of 31 December 2018,the amount not yet recovered was CNY65,747,048.93.
On July 16, 2018, regarding the tort liability dispute case of ICBC Zhengzhou JiefangRoad Branch, Su Wine Group Trade Co., Ltd. applied for a change of claim, requestingthe defendant to jointly and severally compensate the plaintiff with CNY 46,025,000.00of principal and interest loss during the deposit period (The interest loss is based onCNY 103,250,000.00 and it is calculated from 21 May 2014 according to the loan interestrate of the People's Bank of China in the same period and the same file. Among those,
CNY 18,257,000.00 is calculatedtill 8September 2017, CNY 38,968,000.00 is calculatedtill 13 December 2017, and CNY 46,025,000.00 is calculated till the actual date ofpayment). The case has been heard twice by the Jiangsu Suqian Intermediate People'sCourt and court debate was over, and the decision will be made at a later date.
Due to the need to further sort out and supply relevant evidences, Su Wine Group TradeCo., Ltd. applied to withdraw the lawsuit about the tort liability dispute events involvingICBC Kaifeng Haode Branch mentioned above on December 19, 2018.
Except for the above event, by the end of 31 December 2018, the Company had no othersignificant contingencies required to be disclosed.
XIV. Post balance sheet event
1. The distribution of profits
Profits or dividends planed to be distributed
Profits or dividends planed to be distributed | 4,822,361,600.00 |
XV. Other important information
1. Segment information
(1) Other statement
The Company mainly engaged in liquor business, and it is unnecessary disclose thedivision information data.
XVI. Notes to main items of parent company financialstatements
1. Notes receivable and accounts receivable
Item | Closing Balance | Opening Balance |
Notes receivable | 143,456,446.32 | 162,947,960.82 |
Accounts receivable | 697,277,202.71 | 7,526,709,429.22 |
Total | 840,733,649.03 | 7,689,657,390.04 |
(1) Notes receivable
1) Classification of notes receivable
Item | Closing Balance | Opening Balance |
Bank acceptance bill | 143,456,446.32 | 162,947,960.82 |
Total | 143,456,446.32 | 162,947,960.82 |
2) Notes receivable that have been endorsed to other parties by the Company but havenot expired at the end of year
Item | Derecognition at period end | Not derecognition at period end |
Bank acceptance bill | 83,665,000.00 | |
Total | 83,665,000.00 |
(2) Accounts receivable
1) Disclosure of accounts receivable by categories
Type
Type | ClosingBalance | OpeningBalance | ||||||||
Book Balance | Provision for bad debt | Book Value | Book Balance | Provision for bad debt | Book Value | |||||
Amount | Proportion | Amount | Proportion of Provision | Amount | Proportion | Amount | Proportion of Provision | |||
Accounts receivable tested for impairment on the portfolio with characteristics of credit risk | 697,277,202.71 | 100.00% | 697,277,202.71 | 7,526,709,429.22 | 100.00% | 7,526,709,429.22 | ||||
Total | 697,277,202.71 | 100.00% | 697,277,202.71 | 7,526,709,429.22 | 100.00% | 7,526,709,429.22 |
Accounts receivable with significant single amount and tested for impairment individually:
? Applicable √ N/A
In the portfolio, accounts receivable tested for impairment by aging analysis method:
? Applicable √ N/A
In the portfolio, accounts receivable tested for impairment by balance percentage method:
? Applicable √ N/A
In the portfolio, accounts receivable tested for impairment by other methods:
Other portfolios are account receivables of holding subsidiaries with no provision for bad debt.
2) Bad debt provision of the current periodThe amount of bad debt provision is CNY 0.00; amount of bad debt provision recovered or transferred back in the current period is CNY 0.00.
3) Top five entities with the largest balances of the account receivables
Name of debtors
Name of debtors | ClosingBalance | Proportion in the total | Provision amount |
Jiangsu Yanghe Liquor Operation Management Co.,Ltd | 610,858,742.66 | 87.61 | |
Hubei Lihuacun Liquor Industry Co.,Ltd. | 75,497,839.31 | 10.83 | |
Siyang Lantu Liquor Operation Co.,Ltd. | 10,920,620.74 | 1.56 | |
Total | 697,277,202.71 | 100.00 |
1. Other receivables
Item | ClosingBalance | Opening Balance |
Dividend receivables | 713,143.77 | 2,605,425,138.06 |
Other receivables | 948,376,069.75 | 1,160,366,132.04 |
Total | 949,089,213.52 | 3,765,791,270.10 |
(1) Dividend receivables
1) Dividend receivables
Item | ClosingBalance | Opening Balance |
Jiangsu Shuanggou Distillery Stock Co.,Ltd. | 713,143.77 | 2,605,425,138.06 |
Total | 713,143.77 | 2,605,425,138.06 |
b) Significant dividend receivable whose aging is over 1 year
Item | Closing balance | Overdue period | Overdue reason | Whether impair and determination basis |
None |
(2) Other receivables
1) Disclosure of other receivable by categories
Type
Type | ClosingBalance | OpeningBalance | ||||||||
Book Balance | Provision for bad debt | Book Value | Book Balance | Provision for bad debt | Book Value | |||||
Amount | Proportion | Amount | Proportion of Provision | Amount | Proportion | Amount | Proportion of Provision | |||
Other receivables with significant single amount and tested for impairment individually | 15,000,000.00 | 1.55% | 15,000,000.00 | 100.00% | 15,000,000.00 | 1.27% | 15,000,000.00 | 100.00% | ||
Other receivables tested for impairment on the portfolio with characteristics of credit risk | 950,030,841.74 | 98.45% | 1,654,771.99 | 0.17% | 948,376,069.75 | 1,161,729,311.41 | 98.73% | 1,363,179.37 | 0.12% | 1,160,366,132.04 |
Total | 965,030,841.74 | 100.00% | 16,654,771.99 | 1.73% | 948,376,069.75 | 1,176,729,311.41 | 100.00% | 16,363,179.37 | 1.39% | 1,160,366,132.04 |
Other receivable with significant single amount and tested for impairment individually:
√ Applicable ? N/A
Other receivables(by unit) | ClosingBalance | |||
Other receivables | Provision for bad debt | Proportion of provision | Reason | |
Jiangsu Juntai Properties Co.,Ltd., Suqian Guotai Department Store Co.,Ltd. bankruptcy administrator | 15,000,000.00 | 15,000,000.00 | 100.00% | Estimated unable to recover |
Total | 15,000,000.00 | 15,000,000.00 | -- | -- |
In the portfolio, accounts receivable tested for impairment by aging analysis method:
√ Applicable ? N/A
Aging
Aging | Closing Balance | ||
Other receivables | Provision for bad debt | Proportion of provision | |
Subtotal of amount within 1 year | |||
With in 1 year | 1,647,100.22 | 82,355.01 | 5.00% |
Subtotal of amount within 1 year | 1,647,100.22 | 82,355.01 | 5.00% |
1-2 years | 2,093,391.36 | 209,339.14 | 10.00% |
2-3 years | 177,136.79 | 53,141.04 | 30.00% |
3-4 years | 1,377,525.00 | 688,762.50 | 50.00% |
4-5 years | 169,299.40 | 135,439.52 | 80.00% |
Over 5 years | 485,734.78 | 485,734.78 | 100.00% |
Total | 5,950,187.55 | 1,654,771.99 | 27.81% |
Statement of determining the basis of portfolio:
In the portfolio, accounts receivable tested for impairment by balance percentage method:
? Applicable √ N/AIn the portfolio, other receivable tested for impairment by other methods:
? Applicable √ N/A
2) Provision, recovery or reversal for bad debt in the current period.The provision for bad debt was CNY 291,592.62 in the current period; the amount ofrecovery or reversal was CNY 0.00.Significant recovery or reversal for bad debt in the current period:
Company name | recovery or reversal | Way of recovery |
3) Disclosure of other receivable by nature
Nature | ClosingBalance | OpeningBalance |
Loans of subsidiaries within the scope of the merger | 944,080,654.19 | 1,155,861,401.41 |
Deposit | 15,807,031.24 | 15,020,000.00 |
Business loans and cash reserve | 3,953,955.18 | 3,572,581.57 |
Other | 1,189,201.13 | 2,275,328.43 |
Total | 965,030,841.74 | 1,176,729,311.41 |
(4) Top five entities with the largest balances of the other receivables
Company Name | Category | Closing Balance | Aging | Proportion in total receivables | Provisioning amount at period end |
Guizhou Guijiu | Loans | 753,604,192.86 | 171,710,000.00 | 78.09% |
Company Name
Company Name | Category | Closing Balance | Aging | Proportion in total receivables | Provisioning amount at period end |
Co.,Ltd. | within 1 year , 345,078,300.00 in 1 to 2 years, 236,815,892.86 2 to 3 years | ||||
Hubei Lihuacun Liquor Industry Co,Ltd. | Loans | 139,841,961.60 | 56,069,261.60 with in 1 year , 4,160,000.00 in 1 to 2 years, 4,373,000.00 in 2 to 3years, CNY 16,600,000.00 in 3 to 4 years,CNY 39,800,000.00 in 4 to 5years | 14.49% | |
Jiangsu Shuanggou Distillery Stock Co., Ltd. | Loans | 44,654,953.70 | With in 1 year | 4.63% | |
Jiangsu Juntai Properties Co.,Lt., Suqian Guotai Department Store Co.,Ltd. bankruptcy administrator deposit | Deposit | 15,000,000.00 | Over 5 years | 1.55% | 15,000,000.00 |
Harbin Binzhou Brewery Co.,Ltd. | Loans | 4,887,100.00 | 848,000.00 with in 1 year, 290,000.00 in 1 to 2 years, 3,749,100.00 in 4 to 5 years | 0.51% | |
Total | -- | 957,988,208.16 | -- | 99.27% | 15,000,000.00 |
3. Long-term equity investments
Item | Closing Balance | Opening Balance | ||||
Book balance | Impairment provision | Book Value | Book balance | Impairment provision | Book Value | |
Investment in subsidiaries | 7,365,139,180.24 | 0.00 | 7,365,139,180.24 | 5,408,241,180.24 | 0.00 | 5,408,241,180.24 |
Investment of the joint venture and associated enterprise | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
Total | 7,365,139,180.24 | 7,365,139,180.24 | 5,408,241,180.24 | 5,408,241,180.24 |
(1) Investment in subsidiaries
Investee | Opening Balance | Increase | Decrease | Closing Balance | Provision for impairment of the current period | Closing balance of provision for impairment |
Investee
Investee | Opening Balance | Increase | Decrease | Closing Balance | Provision for impairment of the current period | Closing balance of provision for impairment |
Jiangsu Yanghe Package Co.,Ltd. | 153,109,422.39 | 153,109,422.39 | ||||
Suqian Yanghe Guibinguan Co.,Ltd. | 700,000.00 | 700,000.00 | ||||
Jiangsu Shuanggou Distillery Stock Co.,Ltd. | 1,713,152,320.00 | 1,713,152,320.00 | ||||
Su Wine Trade Group Co.,Ltd. | 285,225,078.23 | 285,225,078.23 | ||||
Jiangsu Yanghe Liquor Operation Managment Co.,Ltd | 10,983,280.00 | 10,983,280.00 | ||||
Jiangsu Dongdi Union International Trade Co.,Ltd. | 5,000,000.00 | 5,000,000.00 | ||||
Jiangsu Dongdixinghui International Trade Co.,Ltd | 5,000,000.00 | 5,000,000.00 | ||||
Siyang Lantu Liquor Operation Co.,Ltd. | 3,161,700.00 | 3,161,700.00 | ||||
Hubei Lihuacun Liquor Industry Co.,Ltd. | 3,000,000.00 | 3,000,000.00 | ||||
Ningxiang Miluochun Liquor Industry Co.,Ltd. | 2,129,000.00 | 2,129,000.00 | ||||
Harbin Binzhou Brewery Co.,Ltd. | 2,000,000.00 | 2,000,000.00 | ||||
Su Wine Group Jiangsu Wealth Management Co.,Ltd. | 3,000,000,000.00 | 3,000,000,000.00 | ||||
Jinagsu Kelite Biology Technology Research Institute Co.,Ltd. | 10,000,000.00 | 10,000,000.00 | ||||
Jiangsu Lion and Sheep Network Technology Co.,Ltd. | 5,442,000.00 | 18,000.00 | 5,460,000.00 | |||
Guizhou Guijiu Co.,Ltd. | 193,300,000.00 | 193,300,000.00 | ||||
Jiangsu Yanghe Weiketang Network Technology Co.,Ltd. | 300,000.00 | 300,000.00 | ||||
Dream Blue Haichuanhui (Shiyan) Trade Investment Co.,Ltd. | 15,738,379.62 | 15,738,379.62 | ||||
Yanghe Chile SPA | 456,880,000.00 | 456,880,000.00 | ||||
Jiangsu Yanghe Investment Management Co., Ltd. | 1,500,000,000.00 | 1,500,000,000.00 | ||||
Total | 5,408,241,180.24 | 1,956,898,000.00 | 7,365,139,180.24 | 0.00 |
4. Operating revenue and cost of sales
Item | Current Period | Previous Period | ||
Operating revenue | Cost of sales | Operating revenue | Cost of sales | |
Primary business | 8,929,113,755.67 | 4,329,862,499.55 | 6,723,099,100.17 | 5,495,546,962.23 |
Other business | 790,965,922.15 | 733,774,470.86 | 564,333,847.88 | 529,578,197.52 |
Total | 9,720,079,677.82 | 5,063,636,970.41 | 7,287,432,948.05 | 6,025,125,159.75 |
5. Investment income
Item | Current Period | Previous Period |
Income from long-term equityinvestments under the cost method
Income from long-term equity investments under the cost method | 6,099,622,529.13 | 5,590,572,005.23 |
Income from long-term equity investments under the equity method | -2,074,635.42 | |
Investment income from the disposal of long-term equity investment | 5,873,795.89 | |
Investment income from holding available-for-sale financial assets | 16,371,813.72 | 13,940,148.16 |
Investment income from the disposal of available-for-sale financial assets | 56,995,537.28 | 90,627,738.02 |
Other investment income | 546,760,832.64 | 218,369,154.01 |
Total | 6,719,750,712.77 | 5,917,308,205.89 |
XVII. Supplementary information
1. Detailed statement of non-recurring profits and losses
?Applicable √ N/A
Item | Amount | Notes |
Profit or loss from disposal of non-current assets | 22,203,572.96 | |
Government grants accounted for, in the profit or loss for the current period (except for the government grants closely related to the business of the Company and given at a fixed amount or quantity in accordance with the state's uniform standards) | 59,870,221.67 | |
Except for effectively hedging business related to normal business operations of the company, profit or loss arising from the change in the fair value of held-for-trading financial assets and liabilities, as well as investment profit or loss produced from the disposal of held-for-trading financial assets and liabilities and available-for-sale financial assets | 56,995,537.28 | Disposal of available-for-sale financial assets |
Other non-operating income and expenditure except above-mentioned items | 27,967,026.98 | |
Other profit and loss items that conform to the definition of non-recurring profits and losses | 827,837,138.81 | |
Less: Effect of income tax | 248,875,376.58 | |
Effect of minority equity | 139,932.20 | |
Total | 745,858,188.92 | -- |
Explain the reasons if the Company classifies an item as a non-recurring profit and lossaccording to the definition in the Explanatory Announcement No. 1 on InformationDisclosure for Companies Offering Their Securities to the Public—Non-Recurring Profits
and Losses, or classifies any non-recurring profit and loss item mentioned in the saidexplanatory announcement as a recurring profit and loss item? Applicable √ N/A
2. Return on equity and earnings per share
Profit during reporting period
Profit during reporting period | Weighted average ROE | EPS(CNY/Share) | |
Basic EPS | Diluted EPS | ||
Net profits attributable to ordinary shareholders of the Company | 25.95% | 5.3850 | 5.3850 |
Net profits attributable to ordinary shareholders of the Company after deduction of extraordinary gain and loss | 23.56% | 4.8901 | 4.8901 |
Section XII Documents Available for Preference
1. Financial statements signed and stamped by the legal representative, the financialhead and the accounting supervisor;2. The original of the auditor’s report with the seal of the accounting firm, and signed andstamped by CPAs;3. The originals of all company documents and announcements that are disclosed to thepublic via media designated by CSRC during the reporting period;4. The original of the 2018 annual report signed by the legal representative.The above documents placed in shareholder reading room of corporate headquarters.Address: No.118 Middle Avenue, Yanghe Town, Suqian City, Jiangsu Province