张裕Ｂ：2019年半年度财务报告（英文版）

Financial Report

1. Audit report

Whether the semiannual report has been audited

□ Yes √ No

2. Financial statement

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

2.1 Consolidated balance sheet

Compiling unit: Yantai Changyu Pioneer Wine Co., Ltd. June 30, 2019 Unit: Yuan

Item	Note	June 30, 2019	December 31, 2018
Current assets:
Monetary fund	7.1	1,848,632,953	1,475,700,477
Settlement reserves
Lending funds
Tradable financial assets
Financial assets measured at the fair value and the variation of which is recorded into the current profits and losses
Derivative financial assets
Bills receivable	7.2		288,667,988
Accounts receivable	7.3	186,131,192	242,153,083
Receivables financing	7.4	372,281,872
Advance payment	7.5	3,490,928	4,219,949
Premium receivable
Reinsurance accounts receivable
Receivable reserves for reinsurance contract
Other receivables	7.6	28,618,983	22,636,086
Including: Interest receivable		2,099,109	1,332,681
Dividends receivable
Redemptory monetary capital for sale
Inventories	7.7	2,606,781,436	2,724,591,457
Contract assets
Assets held for sale
Non-current assets due within one year
Other current assets	7.8	300,418,901	258,676,396
Total current assets		5,346,356,265	5,016,645,436
Non-current assets:
Offering loans and imprest
Debt investments
Available-for-sale financial assets			467,251
Other debt investments

Item	Note	June 30, 2019	December 31, 2018
Held-to-maturity investments
Long-term receivables
Long-term equity investments
Other investments in equity instruments
Other non-current financial assets	7.9	515,922
Investment real estate	7. 10	30,560,470	31,572,489
Fixed assets	7.11	5,684,612,653	5,749,731,667
Construction in progress	7.12	789,872,373	759,296,591
Productive biological assets	7.13	207,613,439	209,266,373
Oil-and-gas assets
Right-of-use assets
Intangible assets	7.14	647,158,886	655,473,459
Development expenditure
Goodwill	7.15	165,199,111	165,199,111
Long-term prepaid expenses	7.16	276,557,711	244,640,416
Deferred income tax assets	7.17	234,646,603	285,436,259
Other non-current assets
Total non-current assets		8,036,737,168	8,101,083,616
Total assets		13,383,093,433	13,117,729,052
Current liabilities:
Short-term loans	7.18	678,170,667	688,002,410
Borrowings from the Central Bank
Loans from other banks and other financial institutions
Tradable financial liabilities
Financial liabilities measured at the fair value and the variation of which is recorded into the current profits and losses
Derivative financial liabilities
Bills payable
Accounts payable	7.19	539,459,878	713,572,881
Advances from customers	7.20	177,549,080	226,075,244
Financial assets sold for repurchase
Deposits from customers and interbank
Receivings from vicariously traded securities
Receivings from vicariously sold securities
Employee remunerations payable	7.21	177,466,368	212,304,217
Taxes and dues payable	7.22	109,000,802	128,912,790
Other payables	7.23	977,667,007	608,479,890
Including: Interest payable		2,669,667	712,826
Dividends payable		412,646,375
Handling charges and commissions payable
Dividend payable for reinsurance
Contract liabilities
Liabilities held for sale
Non-current liabilities due within one year	7.24	180,362,314	152,940,788
Other current liabilities	7.25	14,545,254	15,860,254

Item	Note	June 30, 2019	December 31, 2018
Total current liabilities		2,854,221,370	2,746,148,474
Non-current liabilities:
Reserves for insurance contracts
Long-term borrowings	7.26	165,949,250	156,480,662
Bonds payable
Including: Preferred stock
Perpetual bonds
Lease liabilities
Long-term accounts payable	7.27	201,000,000	225,000,000
Long-term employee remunerations payable
Estimated liabilities
Deferred income	7.28	64,050,895	70,367,039
Deferred income tax liabilities	7.17	18,629,612	22,010,647
Other non-current liabilities	7.29	7,159,222	7,234,853
Total non-current liabilities		456,788,979	481,093,201
Total liabilities		3,311,010,349	3,227,241,675
Owner’s equity:
Capital stock	7.30	685,464,000	685,464,000
Other equity instruments
Including: Preferred stock
Perpetual bonds
Capital surplus	7.31	565,955,441	565,955,441
Minus: Treasury stock
Other comprehensive income	7.32	-95,344	2,965,377
Special reserves
Surplus reserves	7.33	342,732,000	342,732,000
General risk preparation
Undistributed profit	7.34	8,197,828,994	8,008,982,547
Total owner’s equities attributable to the parent company		9,791,885,091	9,606,099,365
Minority equity		280,197,993	284,388,012
Total owner’s equities		10,072,083,084	9,890,487,377
Total liabilities and owner’s equities		13,383,093,433	13,117,729,052

Legal Representative: Zhou Hongjiang Accounting Supervisor: Jiang Jianxun Accounting Department Manager: JiangJianxun

2.2 Balance sheet of the parent company

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

Item	Note	June 30, 2019	December 31, 2018
Current assets:
Monetary fund		1,083,333,310	624,588,809
Tradable financial assets
Financial assets measured at the fair value and the variation of which is recorded into the current profits and losses
Derivative financial assets

Item	Note	June 30, 2019	December 31, 2018
Bills receivable			39,885,254
Accounts receivable	15.1		1,447,973
Receivables financing		56,047,969
Advance payment		427,816	227
Other receivables	15.2	526,593,613	1,025,643,356
Including: Interest receivable		277,785	254,088
Dividends receivable		4,103,925	500,000,000
Inventories		505,479,473	385,154,740
Contract assets
Assets held for sale
Non-current assets due within one year
Other current assets		35,992,255	24,704,844
Total current assets		2,207,874,436	2,101,425,203
Non-current assets:
Debt investments
Available-for-sale financial assets
Other debt investments
Held-to-maturity investments
Long-term receivables
Long-term equity investments	15.3	7,420,803,069	7,420,803,069
Other investments in equity instruments
Other non-current financial assets
Investment real estate		30,560,470	31,572,489
Fixed assets		260,448,515	265,311,274
Construction in progress		7,319,082	6,311,701
Productive biological assets		121,158,460	125,002,793
Oil and gas assets
Right-of-use assets
Intangible assets		66,054,490	67,244,066
Development expenditure
Goodwill
Long-term prepaid expenses
Deferred income tax assets		20,699,273	24,194,967
Other non-current assets		985,700,000	972,700,000
Total non-current assets		8,912,743,359	8,913,140,359
Total assets		11,120,617,795	11,014,565,562
Current liabilities:
Short-term loans		150,000,000	150,000,000
Tradable financial liabilities
Financial liabilities measured at the fair value and the variation of which is recorded into the current profits and losses
Derivative financial liabilities
Bills payable
Accounts payable		106,793,658	132,704,304
Advances from customers
Contract liabilities

Item	Note	June 30, 2019	December 31, 2018
Employee remunerations		59,598,048	72,345,179
Taxes and dues payable		3,749,762	13,111,431
Other payables		913,805,782	607,974,519
Including: Interest payable		163,125	181,250
Dividends payable		411,278,400
Liabilities held for sale
Non-current liabilities due within one year
Other current liabilities		3,433,054	3,433,054
Total current liabilities		1,237,380,304	979,568,487
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred stock
Perpetual bonds
Lease liabilities
Long-term accounts payable
Long-term employee remuneration payable
Estimated liabilities
Deferred income		7,459,789	8,910,918
Deferred income tax liabilities
Other non-current liabilities		2,951,042	2,710,575
Total non-current liabilities		10,410,831	11,621,493
Total liabilities		1,247,791,135	991,189,980
Owner’s equity:
Capital stock		685,464,000	685,464,000
Other equity instruments
Including: Preferred stock
Perpetual bonds
Capital surplus		557,222,454	557,222,454
Minus: Treasury stock
Other comprehensive income
Special reserves
Surplus reserves		342,732,000	342,732,000
Undistributed profit		8,287,408,206	8,437,957,128
Total owner’s equities		9,872,826,660	10,023,375,582
Total liabilities and owner’s equities		11,120,617,795	11,014,565,562

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

Jiang Jianxun

2.3 Consolidated profit statement

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

Item	Note	Sum of current period	Sum of prior period
1. Total operating income		2,558,274,785	2,828,230,064
Including: Operating income	7.35	2,558,274,785	2,828,230,064

Interest income
Earned premium
Handling fee and commission income
2. Total operating costs		1,818,822,580	2,023,670,406
Including: Operating costs	7.35	936,252,225	974,557,292
Interest expenditure
Handling fees and commission expenditure
Premium rebate
Net amount of indemnity expenditure
Net amount of the withdrawn reserve fund for insurance contract
Policy bonus payment
Amortized reinsurance expenditures
Taxes and surcharges	7.36	123,550,848	165,276,251
Selling expenses	7.37	591,970,801	710,659,033
Administrative expenses	7.38	155,552,312	157,964,882
Research and development expenses	7.39	2,706,811	2,127,006
Financial expenses	7.40	8,789,583	13,085,942
Including: Interest expenses		9,812,560	18,739,528
Interest income		4,606,417	7,245,870
Plus: Other profit	7.41	64,211,892	37,982,878
Investment profit (loss is listed with "-")
Including: Investment profit for joint-run business and joint venture
Financial assets measured at amortized cost cease to be recognized as income (loss is listed with "-")
Exchange income (loss is listed with "-")
Net exposure hedge income (loss is listed with "-")
Income from fair value changes (loss is listed with "-")
Credit impairment loss (loss is listed with "-")	7.42	-765,935
Asset impairment loss (loss is listed with "-")	7.43	6,148,729	4,730,948
Income from asset disposal (loss is listed with "-")	7.44	1,138	93,958
3. Operating profit (loss is listed with "-")		809,048,029	847,367,442
Plus: Non-operating income	7.45	3,575,914	2,006,392
Minus: Non-operating expenses	7.46	164,050	1,392,362
4. Total profits (total loss is listed with "-")		812,459,893	847,981,472
Minus: Income tax expenses	7.47	210,281,578	211,979,735
5. Net profit (net loss is listed with "-")		602,178,315	636,001,737
5.1 Classification by operation continuity
5.1.1 Net profit from continuing operation (net loss is listed with "-")		602,178,315	636,001,737
5.1.2 Net profit from terminating operation (net loss is listed with "-")
5.2 Classification by ownership
5.2.1 Net profit attributable to owner of the parent company		603,403,789	635,837,405
5.2.2 Minority interest income		-1,225,474	164,332
6. Net after-tax amount of other comprehensive income	7.48	-4,657,291	-11,126,413
Net after-tax amount of other comprehensive income attributable to		-3,060,721	-9,230,820

owner of the parent company
6.1 Other comprehensive income not to be reclassified into profit and loss later
6.1.1 Changes after remeasuring and resetting the benefit plans
6.1.2 Other comprehensive income not to be reclassified into profit and loss under equity law
6.1.3 Changes in the fair value of other investments in equity instruments
6.1.4 Changes in the fair value of the enterprise's own credit risk
6.1.5 Other
6.2 Other comprehensive income to be reclassified into profit and loss later		-3,060,721	-9,230,820
6.2.1 Other comprehensive income to be reclassified into profit and loss under equity law
6.2.2 Changes in the fair value of other debt investments
6.2.3 Profit and loss from changes in the fair value of financial assets for sale
6.2.4 Amount of financial assets reclassified into other comprehensive income
6.2.5 Profit and loss from reclassification of held-to-maturity investments into financial assets for sale
6.2.6 Provision for credit impairment of other credit investments
6.2.7 Provision for cash-flow hedge
6.2.8 Difference in translation of Foreign Currency Financial Statement		-3,060,721	-9,230,820
6.2.9 Other
Net after-tax amount of other comprehensive income attributable to minority shareholders		-1,596,570	-1,895,593
7. Total comprehensive income		597,521,024	624,875,324
Attributable to owner of the parent company		600,343,068	626,606,585
Attributable to minority shareholders		-2,822,044	-1,731,261
8. Earnings per share:
8.1 Basic earnings per share		0.88	0.93
8.2 Diluted earnings per share		0.88	0.93

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

Jiang Jianxun

2.4 Profit statement of the parent company

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

Item	Note	Sum of current period	Sum of prior period
1. Operating income	15.4	352,351,002	408,845,211
Minus: Operating costs	15.4	309,570,580	352,646,989
Taxes and surcharges		13,140,156	24,463,375
Selling expenses
Administrative expenses		39,434,246	39,827,281
Research and development expenses		405,061	360,466
Financial expenses		-3,657,370	-15,151,608
Including: Interest expenses		-2,705,073	11,357,611
Interest income		1,470,667	29,630,717

Plus: Other profit		1,716,527	1,976,527
Investment profit (loss is listed with "-")	15.5	264,221,755	312,409,576
Including: Investment profit for joint-run business and joint venture
Financial assets measured at amortized cost cease to be recognized as income (loss is listed with "-")
Net exposure hedge income (loss is listed with "-")
Income from fair value changes (loss is listed with "-")
Credit impairment loss (loss is listed with "-")
Asset impairment loss (loss is listed with "-")
Income from asset disposal (loss is listed with "-")			75,000
2. Operating profit (loss is listed with "-")		259,396,611	321,159,811
Plus: Non-operating income		703,559	56,479
Minus: Non-operating expenses		97,638	528
3. Total profits (total loss is listed with "-")		260,002,532	321,215,762
Minus: Income tax expenses		-726,946	2,450,592
4. Net profit (net loss is listed with "-")		260,729,478	318,765,170
4.1Net profit from continuing operation (net loss is listed with "-")		260,729,478	318,765,170
4.2 Net profit from terminating operation (net loss is listed with "-")
5. Net after-tax amount of other comprehensive income
5.1 Other comprehensive income not to be reclassified into profit and loss later
5.1.1 Changes after remeasuring and resetting the benefit plans
5.1.2 Other comprehensive income not to be reclassified into profit and loss under equity law
5.1.3 Changes in the fair value of other investments in equity instruments
5.1.4 Changes in the fair value of the enterprise's own credit risk
5.1.5 Other
5.2 Other comprehensive income to be reclassified into profit and loss later
5.2.1 Other comprehensive income to be reclassified into profit and loss under equity law
5.2.2 Changes in the fair value of other debt investments
5.2.3 Profit and loss from changes in the fair value of financial assets for sale
5.2.4 Amount of financial assets reclassified into other comprehensive income
5.2.5 Profit and loss from reclassification of held-to-maturity investments into financial assets for sale
5.2.6 Provision for credit impairment of other credit investments
5.2.7 Provision for cash-flow hedge
5.2.8 Difference in translation of Foreign Currency Financial Statement
5.2.9 Other
6. Total comprehensive income		260,729,478	318,765,170
7. Earnings per share:
7.1 Basic earnings per share		0.38	0.47

7.2 Diluted earnings per share

0.38

0.47

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

Jiang Jianxun

2.5 Consolidated cash flow statement

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

Item	Note	Sum of current period	Sum of prior period
1. Cash flows from operating activities:
Cash received from sales of goods and rending of services		2,399,548,448	2,680,388,050
Net increase in customer and interbank deposits
Net increase in borrowings from central bank
Net increase in borrowings from other financial institutions
Cash received from receiving insurance premium of original insurance contract
Net cash received from reinsurance business
Net increase in policy holder deposits and investment funds
Cash received from collecting interest, handling fees and commissions
Net increase in borrowing funds
Net increase in repurchasement business funds
Net cash received for buying and selling securities
Tax refund received		20,038,271	26,089,608
Other cash received related to operating activities	7.49	67,785,620	42,343,021
Subtotal of cash flows of operating activities		2,487,372,339	2,748,820,679
Cash paid for goods and services		718,093,432	677,552,938
Net increase in customer loans and advances
Net increase in deposits in central bank and interbank deposits
Cash paid to original insurance contract payments
Net increase in financial assets held for trading purposes
Net increase in lending funds
Cash paid to interest, handling fees and commissions
Cash paid to policy bonus
Cash paid to and on behalf of employees		278,638,333	278,814,385
Cash paid for taxes and expenses		598,384,101	802,722,798
Other cash paid related to operating activities	7.49	392,780,467	436,977,086
Sub-total of cash outflows of operating activities		1,987,896,333	2,196,067,207
Net cash flow from operating activities		499,476,006	552,753,472
2. Cash flow from investing activities:
Cash received from disinvestment
Cash received from withdrawal of fixed deposits		104,597,650	305,000,000
Cash received from obtaining investment income
Cash received from obtaining interest income		1,004,552	2,342,015
Cash received from disposal of fixed assets, intangible assets and other long-term assets		175,837	471,130

Item	Note	Sum of current period	Sum of prior period
Net cash received from disposal of branch and other business unit
Other cash received related to investing activities
Subtotal of cash flows of investment activities		105,778,039	307,813,145
Cash paid to acquire fixed assets, intangible assets and other long-term assets		135,073,897	154,464,274
Cash for investment
Cash paid for purchasing fixed deposits		85,238,750	340,000,000
Net increase in hypothecated loan
Net cash paid for acquiring branch and other business unit			104,566,419
Other cash paid related to investment activities
Subtotal of cash outflows of investment activities		220,312,647	599,030,693
Net cash flow from investing activities		-114,534,608	-291,217,548
3. Cash flow from financing activities
Cash received from acquiring investment
Including: cash received from acquiring minority shareholders investment by branch
Cash received from acquiring loans		656,495,139	669,905,706
Cash received from issuing bonds
Other cash received related to financing activities	7.49		23,521,431
Subtotal cash flows of financing activities		656,495,139	693,427,137
Cash paid for paying debts		658,033,492	658,512,141
Cash paid for distributing dividend and profit or paying interest		16,590,004	21,265,533
Including: dividend and profit paid to minority shareholders by branch
Other cash paid related to financing activities	7.49		20,000,000
Subtotal of cash outflows of financing activities		674,623,496	699,777,674
Net cash flow from financing activities		-18,128,357	-6,350,537
4. Influences of exchange rate fluctuation on cash and cash equivalents		53,702	-7,404,199
5. Net Increase in cash and cash equivalents		366,866,743	247,781,188
Plus: balance at the beginning of the period of cash and cash equivalents		1,206,860,334	1,180,889,274
6. Balance at the end of the period of cash and cash equivalents		1,573,727,077	1,428,670,462

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

Jiang Jianxun

2.6 Cash flow statement of the parent company

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

Item	Sum of current period	Sum of prior period
1. Cash flows from operating activities:
Cash received from sales of goods and rending of services	219,405,421	275,862,358
Tax refund received
Other cash received related to operating activities	57,674,830	100,163,394

Item	Sum of current period	Sum of prior period
Subtotal of cash flows of operating activities	277,080,251	376,025,752
Cash paid for goods and services	163,184,301	200,935,534
Cash paid to and on behalf of employees	45,116,586	43,647,320
Cash paid for taxes and expenses	22,530,113	43,132,327
Other cash paid related to operating activities	321,847,893	19,942,485
Sub-total of cash outflows of operating activities	552,678,893	307,657,666
Net cash flow from operating activities	-275,598,642	68,368,086
2. Cash flow from investing activities:
Cash received from disinvestment
Cash received from withdrawal of fixed deposits	40,000,000	305,000,000
Cash received from obtaining investment income	760,152,668	717,667,435
Cash received from obtaining interest income	484,857	2,342,015
Net cash received from disposal of fixed assets, intangible assets and other long-term assets	7,519	538,055
Net cash received from disposal of branch and other business unit
Other cash received related to investing activities
Subtotal of cash flows of investment activities	800,645,044	1,025,547,505
Cash paid to acquiring fixed assets, intangible assets and other long-term assets	10,164,233	11,968,401
Cash for investment	13,000,000	105,926,184
Cash paid for purchasing fixed deposits	85,238,750	340,000,000
Net cash paid for acquiring branch and other business unit
Other cash paid related to investment activities
Subtotal of cash outflows of investment activities	108,402,983	457,894,585
Net cash flow from investing activities	692,242,061	567,652,920
3. Cash flow from financing activities
Cash received from acquiring investment
Cash received from acquiring loans		200,000,000
Cash received from issuing bonds
Other cash received related to financing activities
Subtotal cash flows of financing activities		200,000,000
Cash paid for debts		600,000,000
Cash paid to distribute dividend, profit or pay interest	3,248,000	11,660,417
Other cash paid related to financing activities
Subtotal of cash outflows of financing activities	3,248,000	611,660,417
Net cash flow from financing activities	-3,248,000	-411,660,417
4. Influences of exchange rate fluctuation on cash and cash equivalents
5. Net Increase in cash and cash equivalents	413,395,419	224,360,589
Plus: balance at the beginning of the period of cash and cash equivalents	532,384,882	493,568,866
6. Balance at the end of the period of cash and cash equivalents	945,780,301	717,929,455

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

Jiang Jianxun

2.7 Consolidated owner’s equity changing list

Unit: Yuan

Item	This period
	Owners’ equity of the parent company													Minority shareholders’ equity	Total owners’ equity
	Capital stock	Other equity instruments			Capital reserves	Minus: Treasury stock	Other comprehensive income	Special reserves	Surplus reserves	General risk preparation	Undistributed profits	Other	Subtotal
		Preferred stock	Perpetual bonds	Other
1. Balance at the end of last year	685,464,000				565,955,441		2,965,377		342,732,000		8,008,982,547		9,606,099,365	284,388,012	9,890,487,377
Plus: Accounting policies changing											-3,278,942		-3,278,942		-3,278,942
Previous error correction
Business combination under common control
Other
2. Balance at the beginning of this year	685,464,000				565,955,441		2,965,377		342,732,000		8,005,703,605		9,602,820,423	284,388,012	9,887,208,435
3. Increased or decreased amount in this period (reducing amount is listed with "-")							-3,060,721				192,125,389		189,064,668	-4,190,019	184,874,649
3.1 Total comprehensive income							-3,060,721				603,403,789		600,343,068	-2,822,044	597,521,024
3.2 Owners' invested and reduced capital
3.2.1 Owner’ invested common stock
3.2.2 Other equity instrument holders’ invested capital
3.2.3 Amount of shares paid and reckoned in

owners' equity
3.2.4 Other
3.3 Profit distribution											-411,278,400		-411,278,400	-1,367,975	-412,646,375
3.3.1 Accrued surplus reserves
3.3.2 Accrued general risk preparation
3.3.3 Distribution to owners (or shareholders)											-411,278,400		-411,278,400	-1,367,975	-412,646,375
3.3.4 Other
3.4 Internal transfer of owners' equity
3.4.1 Capital reserves transferred and increased capital (or capital stock)
3.4.2 Surplus reserves transferred and increased capital (or capital stock)
3.4.3 Surplus reserves covering deficit
3.4.4 Retained earnings carried over from the benefit plan amount
3.4.5 Retained earnings carried over from other comprehensive income
3.4.6 Other
3.5 Special reserves
3.5.1 Withdrawal in this period
3.5.2 Usage in this period
3.6 Other
4. Balance at the end of this period	685,464,000				565,955,441		-95,344		342,732,000		8,197,828,994		9,791,885,091	280,197,993	10,072,083,084

Item	Last period
	Owners’ equity of the parent company													Minority shareholders’ equity	Total owners’ equity
	Capital stock	Other equity instruments			Capital reserves	Minus: Treasury stock	Other comprehensive income	Special reserves	Surplus reserves	General risk preparation	Undistributed profits	Other	Subtotal
		Preferred stock	Perpetual bonds	Other
1. Balance at the end of last year	685,464,000				565,955,441		3,109,240		342,732,000		7,309,081,618		8,906,342,299	271,636,379	9,177,978,678
Plus: Accounting policies changing
Previous error correction
Business combination under common control
Other
2. Balance at the beginning of this year	685,464,000				565,955,441		3,109,240		342,732,000		7,309,081,618		8,906,342,299	271,636,379	9,177,978,678
3. Increased or decreased amount in this period (reducing amount is listed with "-")							-143,863				699,900,929		699,757,066	12,751,633	712,508,699
3.1 Total comprehensive income							-143,863				1,042,632,929		1,042,489,066	-1,381,414	1,041,107,652
3.2 Owners' invested and reduced capital														17,532,823	17,532,823
3.2.1 Owner’ invested common stock
3.2.2 Other equity instrument holders’ invested capital
3.2.3 Amount of shares paid and reckoned in owners' equity
3.2.4 Other														17,532,823	17,532,823

3.3 Profit distribution											-342,732,000		-342,732,000	-3,399,776	-346,131,776
3.3.1 Accrued surplus reserves
3.3.2 Accrued general risk preparation
3.3.3 Distribution to owners (or shareholders)											-342,732,000		-342,732,000	-3,399,776	-346,131,776
3.3.4 Other
3.4 Internal transfer of owners' equity
3.4.1 Capital reserves transferred and increased capital (or capital stock)
3.4.2 Surplus reserves transferred and increased capital (or capital stock)
3.4.3 Surplus reserves covering deficit
3.4.4 Retained earnings carried over from the benefit plan amount
3.4.5 Retained earnings carried over from other comprehensive income
3.4.6 Other
3.5 Special reserves
3.5.1 Withdrawal in this period
3.5.2 Usage in this period
3.6 Other
4. Balance at the end of this period	685,464,000				565,955,441		2,965,377		342,732,000		8,008,982,547		9,606,099,365	284,388,012	9,890,487,377

2.8 Owner’s equity changing list of the parent company

Unit: Yuan

Item

This period

Capital stock

Other equity instruments

Capital reserves

Minus: Treasury stock

Other comprehensive income

Special reserves

Surplus reserves

Undistributed profits

Other

Total owners’ equity

Preferred stock

Perpetual bonds

Other

1. Balance at the end of last year

685,464,000

557,222,454

342,732,000

8,437,957,128

10,023,375,582

Plus: Accounting policies changing

Previous error correction

Other

2. Balance at the beginning of this year

685,464,000

557,222,454

342,732,000

8,437,957,128

10,023,375,582

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

-150,548,922

-150,548,922

3.1 Total comprehensive income

260,729,478

260,729,478

3.2 Owners' invested and reduced capital

3.2.1 Shareholders’ invested common stock

3.2.2 Other equity instrument holder’ invested capital

3.2.3 Amount of shares paid and reckoned in owners' equity

3.2.4 Other

3.3 Profit distribution

-411,278,400

-411,278,400

3.3.1 Drew surplus reserves

3.3.2 Distribution to owners (or shareholders)

-411,278,400

-411,278,400

3.3.3 Other

3.4 Internal transfer of owners' equity

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

3.4.2 Surplus reserves transferred and

increased capital (or capital stock)

3.4.3 Surplus reserves covering deficit

3.4.4 Retained earnings carried over from the benefit plan amount

3.4.5 Retained earnings carried over from other comprehensive income

3.4.6 Other

3.5 Special reserves

3.5.1 Accrual in this period

3.5.2 Usage in this period

3.6 Other

4. Balance at the end of this period

685,464,000

557,222,454

342,732,000

8,287,408,206

9,872,826,660

Unit: Yuan

Item

Last period

Capital stock

Other equity instruments

Capital reserves

Minus: Treasury stock

Other comprehensive income

Special reserves

Surplus reserves

Undistributed profits

Other

Total owners’ equity

Preferred stock

Perpetual bonds

Other

1. Balance at the end of last year

685,464,000

557,222,454

342,732,000

7,811,100,555

9,396,519,009

Plus: Accounting policies changing

Previous error correction

Other

2. Balance at the beginning of this year

685,464,000

557,222,454

342,732,000

7,811,100,555

9,396,519,009

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

626,856,573

626,856,573

3.1 Total comprehensive income

969,588,573

969,588,573

3.2 Owners' invested and reduced capital

3.2.1 Shareholders’ invested common stock

3.2.2 Other equity instrument holder’ invested capital

3.2.3 Amount of shares paid and

reckoned in owners' equity

3.2.4 Other

3.3 Profit distribution

-342,732,000

-342,732,000

3.3.1 Drew surplus reserves

3.3.2 Distribution to owners (or shareholders)

3.3.3 Other

3.4 Internal transfer of owners' equity

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

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

3.4.3 Surplus reserves covering deficit

3.4.4 Retained earnings carried over from the benefit plan amount

3.4.5 Retained earnings carried over from other comprehensive income

3.4.6 Other

3.5 Special reserves

3.5.1 Accrual in this period

3.5.2 Usage in this period

3.6 Other

4. Balance at the end of this period

685,464,000

557,222,454

342,732,000

8,437,957,128

10,023,375,582

3. Company profile

Yantai Changyu Pioneer Wine Co., Ltd. (the “Company” or the “Joint-stock Company”) wasincorporated as a joint-stock limited company in accordance with the Company Law of the People’sRepublic of China (the “PRC”) in the merger and reorganization carried out by Yantai Changyu GroupCo., Ltd. (“Changyu Group Company”) with its assets and liabilities in relation to wine business. TheCompany and its subsidiary companies (hereinafter collectively referred to as the “Group”) areengaged in the production and sale of wine, brandy and champagne, planting and purchase of grapes,development of tourism resources, etc. The registered address of the Company is Yantai City,Shandong Province, and the office address of the headquarters is 56 Dama Road, Zhifu District, YantaiCity, Shandong Province.

As at June 30, 2019, the Company issued 685,464,000 shares accumulatively. Refer to Note 7.30 fordetails.

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

The financial statement and the consolidated financial statement of the Company were approved bythe Board of Directors on August 26, 2019.

The details of scope of the consolidated financial statement in this period can be seen in Note 9“Equity in other entities”. The details of scope changes of the consolidated financial statement in thisperiod can be seen in Note 8 “Changes of the consolidated scope”.

4. Preparation basis of financial statement

4.1 Preparation basis

The Group implements the Accounting Standards for Business Enterprises (including the new andrevised editions published in 2014) (“ASBE”) published by the Ministry of Finance and relevant

regulations thereof.

Note-accounting basis and pricing principle

The note-accounting basis of financial accounting adopted by the Group is accrual system and themeasurement basis adopted by the Group in preparing its financial statement is historical cost.Subsequently, if the assets are impaired, the impairment provisions are made in accordance withrelevant accounting standards.

When the historical cost measurement is used, the assets are measured by the amount of cash or cashequivalent when the assets are purchased or the fair value of the consideration. The liabilities aremeasured by the actually received funds or assets for performing the current obligations, or thecontract amount for performing the current obligations, or the amount of cash or cash equivalent paidfor anticipated liabilities in the daily activities.

Fair value refers to a price received for selling an asset or paid for transferring a liability by the marketparticipant in orderly transactions on the measurement date. No matter the fair value is observable orestimated by the valuation technique, the fair value measured and disclosed in this financial statementis recognized on this basis.

The fair value measurement is divided into three levels based on the observable degree of the inputfair value and the importance of this input value on the whole fair value measurement:

*The input value of the first level is the unadjusted price of the same assets or liabilities which can beacquired in an active market on the measurement date.

*The input value of the second level is the directly or indirectly observable input value of relevantassets or liabilities except that of the first level.

*The input value of the third level is the unobservable input value of relevant assets or liabilities.

4.2 Continuous operation

The Group has appraised the ability of continuous operation for 12 months from June 30, 2019, and no

issues or situations causing major doubts to this ability are found. Therefore, this financial statement isprepared on the basis of the continuous operation assumption.

5. Main accounting policies and accounting estimates

5.1 Statement on compliance with ASBE

This financial statement fulfills the requirement of ASBE and gives a true and integrated view of thefinancial status and the consolidated financial status as at June 30, 2019, as well as the operating result,the consolidated operating result, the cash flow and the consolidated cash flow of the Company fromJanuary to June 2019.

5.2 Accounting period

The accounting period of the Group is from January 1 to December 31.

5.3 Operating cycle

The operating cycle refers to the period from the enterprise purchases the assets used for processing tothe cash or cash equivalent is realized. The operating cycle of the Company is 12 months.

5.4 Recording currency

Since Renminbi (RMB) is the currency of the main economic environment in which the Company andthe domestic subsidiary companies thereof are situated, the Company and the subsidiary companiesthereof adopt RMB as the recording currency. The overseas subsidiary companies thereof determineEUR, CLP and AUD as the recording currency according to the main economic environment in whichthey are situated. The currency in this financial statement prepared by the Group is RMB.

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

5.5.1 Business combination and goodwill under non-common control

A business combination under non-common control is a business combination in which all of thecombining enterprises are not ultimately controlled by the same party or parties before and after thecombination.

The combination cost shall be the fair value of the assets paid, the liabilities incurred or assumed orthe equity instruments issued by the acquirer in exchange for the control over the acquiree. Theintermediary expenses such as audit, legal services and assessment consultation and other relatedmanagement expenses paid by the acquirer for business combination are included in the current profitsand losses when they occur.

The identifiable assets, liabilities and contingent liabilities which are obtained from the acquiree in thebusiness combination and meet the recognition conditions shall be measured on the acquisition dateaccording to the fair value thereof.

Where the cost of combination exceeds the acquirer’s interest in the fair value of the acquiree’sidentifiable net assets, the difference shall be recognized as goodwill as an asset and initially measuredat cost. Where the cost of combination is less than the acquirer’s interest in the fair value of theacquiree’s identifiable net assets, the acquirer firstly re-assesses the measurement of the fair values ofthe acquiree’s identifiable assets, liabilities and contingent liabilities and measurement of the cost ofcombination. If after that reassessment, the cost of combination is still less than the acquirer’s interestin the fair value of the acquiree’s identifiable net assets, the acquirer recognizes the remainingdifference immediately in profit or loss for the current period.

The goodwill formed due to business combination shall be separately listed in the consolidatedfinancial statement and measured on the basis of the cost minus the accumulative impairmentprovision.

5.6 Compiling methods of consolidated financial statement

The consolidation scope of the consolidated financial statement is determined on the basis of control.Control means that the investor holds the power in the invested party, obtains variable returns byparticipating in relevant activities of the invested party and has the ability to affect the amount of thereturns by using the power on the invested party. Once any change of the relevant facts and situationsresults in any change of relevant elements of the above definition of Control, the Group will carry outreappraisal.

The merger of any subsidiary company starts from the date when the Group acquires the power tocontrol this subsidiary company, while the termination of any subsidiary company ends in the datewhen the Group losses the power to control this subsidiary company.

As for any subsidiary company obtained in a business combination under non-common control, thebusiness result and the cash flow thereof since the acquisition date (date of obtaining the control power)shall have been properly included in the consolidated income statement and the consolidated cash flowstatement.

The principal accounting policies and accounting period adopted by the subsidiary companies shall bedetermined in accordance with the accounting policies and accounting period uniformly regulated bythe Company.

The influence of the internal transaction between the Company and the subsidiary companies as wellas among subsidiary companies on the consolidated financial statement shall be neutralized at the timeof combination.

The shares in the owner's equity of the subsidiary companies, which do not belong to the parentcompany, shall be recognized as the minority equity and listed under the item of “minority equity” ofthe owner’s equity in the balance sheet. The shares in the current profits and losses of the subsidiarycompanies, which belong to the minority equity, shall be listed under the item of “minority equity” ofthe net profit in the consolidated income statement.

If the loss of the subsidiary companies borne by minority shareholders exceeds the shares of theowner's equity entitled therein by the minority shareholders at the beginning of the period, thedifference shall be still credited against the minority equity.

5.7 Determination standard of cash and cash equivalents

Cash comprises cash on hand and demand deposit of the Company. Cash equivalents refer toshort-term highly liquid investments held by the Group which are readily convertible into knownamount of cash with an insignificant risk of changes in value.

5.8 Foreign currency transaction and foreign currency statement translation

5.8.1 Foreign currency transaction

At the time of initial recognition of a foreign currency transaction, the amount of the foreign currencyshall be translated into the amount of the recording currency at the spot exchange rate on thetransaction date.

The monetary items of the foreign currency transaction shall be translated into RMB at the spotchange rate on the balance sheet date. The currency translation difference generated by the differencebetween the spot change rate on the balance sheet date and the spot change rate at the initialrecognition or on the previous balance sheet date shall be included in the current profits and losses,except: ① the currency translation difference of the dedicated foreign currency loan that meets thecapitalization condition shall be included in the cost of assets as capitalization during the capitalizationperiod; ② the currency translation difference of the arbitrage tool to avoid foreign exchange risk shallbe treated according to the hedge accounting method; ③ the currency translation difference of theavailable-for-sale monetary items generated by changes of the book balance other than the amortizedcost shall be recognized as other comprehensive income and included in the current profits and losses.

5.8.2 Translation of foreign currency financial statement

In order to compile a consolidated financial statement, the foreign currency financial statement ofoverseas business shall be translated into RMB financial statement in accordance with the followingmethods: all asset and liability items in the balance sheet shall be translated at the spot exchange rateon the balance sheet date; the shareholders' equity items, except for the ones as "undistributed profits",shall be translated at the spot exchange rate at the time when they occur; all items and the itemsreflecting the accrual profit distribution in the profit statement shall be translated at the exchange ratesimilar to the spot exchange rate at the time when they occur; the undistributed profits at the beginningof the year shall be the translated to the undistributed profits at the end of the previous year; theundistributed profits at the end of the year shall be calculated and listed as the translated profitdistribution items; and the difference between the asset items and the sum of the liability items and theshareholders’ equity items shall be recognized as other comprehensive income and included in theshareholder's equity.

The foreign currency cash flows and the cash flows of the overseas subsidiary companies shall betranslated at the exchange rate similar to the spot exchange rate at the time when they occur; the

amount of the cash and cash equivalents impacted by the exchange rate movement shall be, as areconciling item, separately listed under “impact of exchange rate movement on cash and cashequivalents” in the cash flow statement.

The balance at the beginning of the year and the actual amount of the previous year shall be listed asthe amount translated according to the financial statement of the previous year.

5.9 Financial instruments

When becoming a party to a contract of financial instruments, the Company shall recognize a financialasset or financial liability.

5.9.1 Classification, recognition and measurement of financial assetsAccording to the business model of financial assets management and the contractual cash flowcharacteristics of financial assets, the Company divides financial assets into: financial assets measuredat amortized cost; financial assets measured at fair value and the variation of which is included inother comprehensive income; and financial assets measured at fair value and the variation of which isincluded in the current profits and losses.

At the time of initial recognition, financial assets shall be measured at their fair value. As for thefinancial assets measured at their fair value and the variation of which is included in the current profitsand losses, the transaction expenses thereof shall be directly included in the current profits and losses;as for other categories of financial assets, the transaction expenses thereof shall be included in initialrecognized cost. For accounts receivable or bills receivable arising from sale of products or provisionof services, which do not contain or do not take into account material financing elements, theCompany shall take the amount of consideration that the Company is entitled to receive as expected asthe initial recognized amount.

① Financial assets measured at amortized cost

The Company manages such financial assets by the following business model: collecting contractualcash flow as the target, with the contractual cash flow characteristics of such financial assets consistentwith the basic lending arrangement, that is, the cash flow generated on a specific date is only thepayment of principal and interest based on the outstanding principal amount. The Company shallrecognize the interest income of such financial assets by the actual interest rate method, and conductsubsequent measurement at amortized cost. The profits or losses generated from the amortization or

impairment shall be included in the current profits and losses.

② Financial assets measured at fair value and the variation of which is included in othercomprehensive incomeThe Company manages such financial assets by the following business model: aiming at bothreceiving contractual cash flow and selling, with the contractual cash flow characteristics of suchfinancial assets consistent with the basic lending arrangements. Such financial assets are measured atfair value and the variation of which is included in other comprehensive income, but impairmentlosses or gains, exchange gains and losses and interest income calculated by the effective interest ratemethod shall be included in the current profits and losses.In addition, the Company designates some non-tradable equity instrument investments as financialassets measured at fair value and the variation of which is included in other comprehensive income.The Company shall include relevant dividend income of such financial assets in the current profits andlosses, and the fair value changes in other comprehensive income. When the recognition of suchfinancial assets is terminated the accumulated gains or losses previously recorded in othercomprehensive income will be transferred into retained income from other comprehensive income,which shall not be included in the current profits and losses.

③ Financial assets measured at fair value and the variation of which is included in the current profitsand lossesThe Company divides those financial assets excluding the above financial assets measured atamortized cost and financial assets measured at fair value and the variation of which is included inother comprehensive income into financial assets measured at fair value and the variation of which isincluded in the current profits and losses, and list as tradable financial assets. In addition, at the time ofinitial recognition, in order to eliminate or significantly reduce accounting mismatches, the Companydesignates some financial assets as financial assets measured at fair value and the variation of which isincluded in the current profits and losses. For such financial assets, the Company adopts fair value forsubsequent measurement, and the variation in fair value shall be included in the current profits andlosses. The financial assets that have matured for more than one year since the balance sheet date andare expected to be held for more than one year are listed as other non-current financial assets.

5.9.2 Classification, recognition and measurement of financial liabilitiesAt the time of initial recognition, financial liabilities are divided into financial liabilities measured atfair value and the variation of which is included in the current profits and losses and other financialliabilities. As for the financial liabilities measured at fair value and the variation of which is included

in the current profits and losses, the transaction expenses thereof shall be directly included in thecurrent profits and losses; as for other financial liabilities, the transaction expenses thereof shall beincluded in initial recognized cost.

①Financial liabilities measured at fair value and the variation of which is included in the currentprofits and lossesFinancial liabilities measured at fair value and the variation of which is included in the current profitsand losses include tradable financial liabilities (including derivatives belonging to financial liabilities)and financial liabilities designated as those measured at fair value when initially recognized and thevariation of which is included in the current profits and losses.

Tradable financial liabilities (including derivatives belonging to financial liabilities) shall besubsequently measured at fair value, and the variation in the fair value shall be included in the currentprofits and losses except those related to hedge accounting.For the financial liabilities designated as those measured at fair value and the variation of which isincluded the current profits and losses, the variation in fair value caused by changes in the Company'sown credit risk is included into other comprehensive income, and when the recognition of this liabilityis terminated, the accumulated variation in fair value caused by changes in its own credit risk which isincluded into other comprehensive income shall be transferred into retained income.

The remaining variations in fair value are included in the current profits and losses. If any accountingmismatch in profits and losses is caused or enlarged by handling the impact of changes in the owncredit risk of such financial liabilities in the above way, the Company shall include all the gains orlosses of such financial liabilities (including the impact amount of changes in the credit risk of theenterprise) in the current profits and losses.

② Other financial liabilities

In addition to the financial assets of which the transfer doesn’t meet the conditions to terminate therecognition or financial liabilities formed by continuous involvement in the transferred financial assetsand other financial liabilities beyond the financial guarantee contract classified as financial liabilitiesmeasured at amortized cost, the financial liabilities shall be measured at the amortized cost forsubsequent measurement, and the profits or losses caused by termination of recognition oramortization shall be included in the current profits and losses.

5.9.3 Recognition basis and measurement method for the transfer of financial assets

Where a financial asset meets any of the following requirements, the recognition of it shall beterminated: ①The contractual rights for collecting the cash flow of the said financial asset areterminated; ②The financial asset has been transferred and almost all the risks and rewards in theownership of the financial asset have been transferred to the transferee; ③The financial asset has beentransferred, although the enterprise has neither transferred nor retained almost all the risks and rewardsin the ownership of the financial asset, it has given up its control over the financial asset. If theenterprise has neither transferred nor retained nearly all the risks and rewards in the ownership of thefinancial asset, and has not given up its control over the financial asset, relevant financial asset shall berecognized according to the extent of its continued involvement in the transferred financial asset, andrelevant liabilities shall be recognized accordingly. The extent of continued involvement in thetransferred financial asset refers to the risk level faced by the enterprise due to the change in the valueof the financial asset.

Where the overall transfer of the financial asset meets the derecognition conditions, the differencebetween the book value of the transferred financial asset as well as the consideration received due tosuch transfer and the summation of the cumulative amount of the fair value of the asset that isoriginally included in other comprehensive income shall be included in the current profits and losses.

Where the partly transfer of a financial asset meets the derecognition conditions of termination, thebook value of the transferred financial asset shall be distributed between the terminated part of therecognition and the unterminated part of the recognition, and the difference between the sum of theconsideration received as a result of the transfer and the accumulated mount of the changes in the fairvalue of the derecognized part that is originally included in other comprehensive income and theaforesaid distributed book amount shall be included in the current profits and losses.

The Company shall determine whether almost all the risks and rewards in the ownership of thefinancial assets sold by means of attached right of recourse or the financial assets that it holds whichare endorsed to transfer have been transferred. Where almost all the risks and rewards in the ownershipof the financial assets have been transferred to the transferee, the recognition of such financial assetsshall be terminated; Where almost all the risks and rewards in the ownership of the financial assets areretained, the recognition of such financial assets shall not be terminated; If almost all the risks andrewards in the ownership of the financial assets are neither transferred nor retained, the enterprise shallcontinue to judge whether it retains control over the assets and then conduct accounting treatment inaccordance with the principles described in the preceding paragraphs.

5.9.4 Derecognition of financial liabilities

Where the current obligation of a financial liability (or part thereof) has been discharged, the Companyshall terminate the recognition of such financial liability (or part thereof). If the Company (borrower)signs an agreement with the lender to replace the original financial liability by assuming the newfinancial liability, and the contract terms of the new financial liability are substantially different fromthose of the original financial liability, the recognition of the original financial liability shall beterminated and a new financial liability shall be recognized at the same time. If the Companysubstantially modifies the contract terms of the original financial liability (or part thereof), it shallterminate the recognition of the original financial liability and recognize a new financial liability inaccordance with the revised terms at the same time.

If the recognition of a financial liability (or part of it) is terminated, the Company shall record thedifference between its book value and the consideration paid (including the transferred non-cash assetsor liabilities assumed) into the current profits and losses.

5.9.5

Offsetting of financial assets and financial liabilities

Where the Company has a legal right that is currently enforceable to set off the recognized amount offinancial assets and financial liabilities, and intends either to settle on a net basis, or to realise thefinancial assets and clear off the financial liabilities simultaneously, the financial assets and financialliabilities shall be offset and the net amount is presented in the balance sheet. Except for the abovecircumstances, financial assets and financial liabilities shall be presented separately in the balancesheet and shall not be offset.

5.9.6 Determination method of the fair value of financial assets and liabilities

The fair value refers to the price that market participants need to pay to receive or transfer aliability when selling an asset in an orderly transaction that takes place on the measurementdate. Where there is an active market for a financial instrument, the Company shall determineits fair value by the quotation in the active market. Quotations in the active market are pricesthat are readily available from exchanges, brokers, trade associations, pricing services, etc., ona regular basis, which represent the prices of actual market transactions that occur in fair trade.Where there is no active market for financial instruments, the Company shall use valuationtechniques to determine their fair value. Valuation techniques include referring to prices used

in recent market transactions by parties familiar with the situation and willing to trade, currentfair values of other financial instruments that are substantially the same, discounted cash flowmethod, option pricing models, etc. At the time of valuation, the Company adopts valuationtechniques applicable to the current situation and supported by sufficient available data andother information, selects input values consistent with the asset or liability characteristicsconsidered by market participants in the transaction of related assets or liabilities, and givespriority to relevant observable input values as far as possible. When relevant observable inputvalues can’t be obtained or are not practicable to obtain, the non-inputable values shall beused.

5.9.7 Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Companyafter deducting all of its liabilities. The Company issues (including refinancing), repurchases, sells orcancels equity instruments as changes in equity, and transaction costs related to equity transactions arededucted from the equity. The Company does not recognize any variation in the fair value of equityinstruments.

Dividends paid on the Company's equity instruments during their existence (including the “interest”generated by the instruments classified as equity instruments) shall be treated as profit distribution.

5.9.8 Impairment of financial assets

For financial assets measured at amortized cost and debt instrument investments measured at fair valueand whose changes are included in other comprehensive income, the Company shall recognizeprovision for losses on the basis of expected credit losses.

The Company takes reasonable and reliable information about past events, current situation andforecast of future economic situation into consideration, calculates the probability weighted amount ofthe present value of the difference between the cash flow receivable of the contract and the cash flowexpected to be received based on the weight of the risk of default, and recognizes the expected creditlosses.

On each balance sheet date, the Company measures the expected credit losses of financial instruments

at different stages respectively. If the credit risk of the financial instrument does not increasesignificantly after the initial recognition, in the first stage, the Company shall measure the provisionfor losses according to the expected credit losses in the next 12 months; If the credit risk of a financialinstrument has increased significantly since the initial recognition, but no credit impairment hasoccurred, in the second stage, the Company shall measure the provision for losses according to theexpected credit loss of the entire duration of the instrument; If the credit impairment of a financialinstrument has occurred since the initial recognition, in the third stage, the Company shall measure theprovision for losses according to the expected credit loss of the entire duration of the instrument.

For financial instruments with low credit risk on the balance sheet date, the Company assumes that thecredit risk has not increased significantly since the initial recognition, and measures the provision forlosses according to the expected credit loss in the next 12 months.

For the financial instruments in the first and second stages and with low credit risk, the Companycalculates the interest income according to the book balance without deduction of impairmentprovision at the actual interest rate. For financial instruments in the third stage, interest income iscalculated according to the book balance minus the amortized cost at the actual interest rate after theprovision for impairment has been accrued.

When an individual financial asset can’t evaluate the information of the expected credit loss at areasonable cost, the Company divides the receivables into several combinations according to thecharacteristics of credit risk, and calculates the expected credit loss on the basis of the combination.

For bills receivable and accounts receivable, no matter whether there is a significant financingcomponent, the Company measures the provision for losses according to the expected credit lossthroughout the duration.

For the bills receivable divided into portfolio, the Company calculates the expected credit loss byreferring to the historical credit loss experience, combining the current situation as well as the forecastof the future economic situation, and through the default risk exposure and the expected credit lossrate of the entire duration.

For the accounts receivable divided into portfolio, the Company calculates the expected credit loss byreferring to the historical credit loss experience, combining the current situation as well as the forecastof the future economic situation, and formulating the comparison table of the overdue days of accounts

receivable and the expected credit loss rate of the whole duration.

For other receivables divided into portfolio, the Company calculates the expected credit loss byreferring to the historical credit loss experience, combining the current situation as well as the forecastof the future economic situation, and through the default risk exposure and the expected credit lossrate within the next 12 months or the entire duration.

The Company will include the accrued or transferred-back provision for losses in the current profitsand losses. For debt instruments that are measured at fair value and the variation of which is includedin other comprehensive income, the Company shall adjust other comprehensive income whileincluding impairment loss or profit in the current profits and losses.

5.10 Inventories

5.10.1 Categories of inventories

The inventories of the Group mainly include raw materials, goods in process and finished goods.Inventories are initially measured at cost. Inventory costs include purchase costs, processing costs andother expenses incurred to bring inventory to its current location and condition.

The agricultural products harvested are treated in accordance with the Accounting Standard forBusiness Enterprises No.1 – Inventories.

5.10.2 Valuation method of inventories upon delivery

The actual cost of inventories upon delivery is calculated by the weighted average method.

5.10.3 Determination basis for net realisable value of inventories

On the balance sheet date, inventories are measured at the lower of cost and net realisable value. Ifthe net realisable value is below the cost of inventories, a provision for decline in value of inventoriesis made. Net realisable value is the estimated selling price in the ordinary course of business less theestimated costs of completion, the estimated costs necessary to make the sale and relevant taxes. Netrealisable value is determined on the basis of clear evidence obtained, and takes into consideration the

purposes of holding inventories and effect of post balance sheet events.

Provision for decline in value of other inventories is made based on the excess of cost of inventoryover its net realisable value on an item-by-item basis.

After the provision for decline in value of inventories is made, if the circumstances that previouslycaused inventories to be written down below cost no longer exist so that the net realisable value ofinventories is higher than their cost, the original provision for decline in value is reversed and thereversal is included in profit or loss for the period.

5.10.4 Inventory count system

The perpetual inventory system is maintained for stock system.

5.10.5 Amortization method for low cost and short-lived consumable items andpackaging materials

Packaging materials and low cost and short-lived consumable items are amortized using the immediatewrite-off method.

5.11 Non-current assets held for sale

Non-current assets and disposal groups are classified as held for sale category when the Grouprecovers the book value through a sale (including an exchange of nonmonetary assets that hascommercial substance) rather than continuing use.

Non-current assets or disposal groups classified as held for sale are required to satisfy the followingconditions: (1) the asset or disposal group is available for immediate sale in its present conditionsubject only to terms that are usual and customary for sales of such asset or disposal group; (2) the saleis highly probable, i.e. the Group has made a resolution about selling plan and obtained a confirmedpurchase commitment and the sale is expected to be completed within one year.

The Group measures the no-current assets or disposal groups classified as held for sale at the lower oftheir carrying amount and fair value less costs to sell. Where the carrying amount is higher than the net

amount of fair value less costs to sell, carrying amount should be reduced to the net amount of fairvalue less costs to sell, and such reduction is recognized in impairment loss of assets and included inprofit or loss for the period. Meanwhile, provision for impairment of held-for-sale assets are made.When there is increase in the net amount of fair value of non-current assets held for sale less costs tosell On the balance sheet date, the original deduction should be reversed in impairment loss of assetsrecognized after the classification of held-for-sale category, and the reverse amount is include in profitor loss for the period.

Non-current assets held for sale in non-current assets are not subject to depreciation or amortization.

5.12 Long-term equity investments

5.12.1 Judgment basis of control, joint control and significant influence

Control is the power to govern the financial and operating policies of an entity so as to obtain benefitsfrom its activities. Joint control is the contractually agreed sharing of control over an economic activity,and exists only when the strategic financial and operating policy decisions relating to the activityrequire the unanimous consent of the parties sharing control. Significant influence is the power toparticipate in the financial and operating policy decisions of the investee but is not control or jointcontrol over those policies. When determining whether an investing enterprise is able to exercisecontrol or significant influence over an investee, the effect of potential voting rights of the investee(for example, warrants and convertible debts) held by the investing enterprises or other parties that arecurrently exercisable or convertible shall be considered.

5.12.2 Determination of initial investment cost

For a long-term equity investment acquired not involving enterprises under common control, theinvestment cost of the long-term equity investment is the cost of acquisition.

Audit fee, legal services, evaluation and consulting fees and other related management costs inacquisition are expensed in profits and losses when happened.

Other long-term equity investments acquired from other than acquisitions are recognized usingoriginal cost.

5.12.3 Subsequent measurement and recognition of profit or loss

Long-term equity investment accounted for using the cost method

The financial statement of the Company accounts for long-term equity investment using the costmethod. A subsidiary is an investee that is controlled by the Group.

Under the cost method, a long-term equity investment is measured at initial investment cost.Long-term equity investment is adjusted when capital is added or recollected. Investment income isrecognized in the period in accordance with the attributable share of cash dividends or profitdistributions declared by the investee.

5.12.4 Disposal of long-term equity investments

On disposal of a long-term equity investment, the difference between the proceeds actually receivedand receivable and the carrying amount is recognized in profit or loss for the period.

5.13 Investment properties

Investment property is property held to earn rentals or for capital appreciation or both.

An investment property is measured initially at cost. Subsequent expenditures incurred for suchinvestment property are included in the cost of the investment property if it is probable that economicbenefits associated with an investment property will flow to the Group and the subsequentexpenditures can be measured reliably. Other subsequent expenditures are recognized in profit or lossin the period in which they are incurred.

The Group uses the cost model for subsequent measurement of investment properties, and adopts adepreciation or amortization policy for the investment property which is consistent with that forbuildings or land use rights.

When an investment property is sold, transferred, retired or damaged, the Group recognizes theamount of any proceeds on disposal net of the carrying amount and related taxes in profit or loss for

the period.

5.14 Fixed assets

5.14.1 Recognition condition

Fixed assets are tangible assets that are held for use in the production or supply of goods or services,for rental to others, or for administrative purposes, and have useful lives of more than one accountingyear. A fixed asset is recognized only when it is probable that economic benefits associated with theasset will flow to the Group and the cost of the asset can be measured reliably. Fixed assets areinitially measured at cost.

Subsequent expenditures incurred for the fixed asset are included in the cost of the fixed asset and if itis probable that economic benefits associated with the asset will flow to the Group and the subsequentexpenditures can be measured reliably. Meanwhile the carrying amount of the replaced part isderecognized. Other subsequent expenditures are recognized in profit or loss in the period in whichthey are incurred.

5.14.2 Depreciation method

A fixed asset is depreciated over its useful life using the straight-line method since the monthsubsequent to the one in which it is ready for intended use. The useful life, estimated net residualvalue rate and annual depreciation rate of each category of fixed assets are as follows:

Classification	Depreciation method	Depreciation life	Residual value rate	Annual depreciation rate
Houses and buildings	Straight-line depreciation	20-40 years	0-5%	2.4%-5.0%
Machinery equipment	Straight-line depreciation	5-30 years	0-5%	3.2%-20.0%
Transportation tools	Straight-line depreciation	4-12 years	0-5%	7.9%-25.0%

Estimated net residual value assumes the situation where a fixed asset expire for its estimated usefullife and is in its expected final status. Estimated net residual value is the amount that the Group canobtain from the disposal less expected disposal fees.

5.14.3 Other explanations

If a fixed asset is upon disposal or no future economic benefits are expected to be generated from itsuse or disposal, the fixed asset is derecognized. When a fixed asset is sold, transferred, retired ordamaged, the amount of any proceeds on disposal of the asset net of the carrying amount and relatedtaxes is recognized in profit or loss for the period.

The Group reviews the useful life and estimated net residual value of a fixed asset and the depreciationmethod applied at least once at each financial year-end, and account for any change as a change in anaccounting estimate.

5.15 Construction in progress

Construction in progress is measured at its actual costs. The actual costs include various constructionexpenditures during the construction period, borrowing costs capitalised before it is ready for intendeduse and other relevant costs. Construction in progress is not depreciated. Construction in progressis transferred to a fixed asset when it is ready for intended use.

5.16 Borrowing costs

Borrowing costs directly attributable to the assets meeting the capitalization conditions during theacquisition, construction or production shall be capitalized when expenditures for such asset andborrowing costs are incurred and activities relating to the acquisition, construction or production of theasset that are necessary to prepare the asset for its intended use or sale have commenced.Capitalization of borrowing costs shall be terminated when the qualifying asset being acquired,constructed or produced becomes ready for its intended use or sale. Capitalization of borrowing costsis suspended during the period in which the acquisition, construction or production of a qualifyingasset is suspended abnormally and when the suspension is for a continuous period of more than 3months, until the acquisition, construction or production of the asset is resumed. Other borrowingcosts are recognized as an expense in the period in which they are incurred.

The interest expenses actually incurred in the current period of the special loan shall be capitalizedafter deducting the interest income obtained by depositing the unused loan funds into the bank or theinvestment income obtained from the temporary investment.

5.17 Biological assets

The biological assets of the Group are productive biological assets.

Productive biological assets are biological assets, for example, held for the production of agriculturalproduce, provision of services or leasing Productive biological assets in the Group are vines toproduce grapes. A productive biological asset is initially measured at cost. The cost of a productivebiological asset self-grown or self-bred comprises those costs necessarily incurred and directlyattributable to the asset before the asset becomes available for its intended production and operatingpurposes, and any borrowing cost meeting the capitalisation criteria.

The productive biological assets are not accrued depreciation until reaching the intended productionand operation purposes. After reaching the intended production and operation purposes, the productivebiological assets are accrued depreciation within the service life straight-line depreciation. The servicelife, estimated net residual value rate and annual depreciation rate of different productive biologicalassets are as follows:

Category Useful life Estimated net residual rate Annual depreciation rateVines 20 years 5.0%

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

The Group reviews the useful life and estimated net residual value of productive biological assets andthe depreciation method applied at least once at each financial year-end, and account for any change asa change in an accounting estimate.

On the sale, identification of any shortages during stocktaking, death or damage of biological asset, theproceeds on disposal net of the carrying amount and relevant taxes is recognized in profit or loss forthe current period.

5.18 Intangible assets

Intangible assets include land use right, software, trademark, etc.

An intangible asset is measured initially at cost method. When an intangible asset with a finite usefullife is available for use, its original cost less net residual value and any accumulated impairment lossesis amortized over its estimated useful life using the straight-line method. Intangible assets withindefinite useful lives are not amortized. The useful lives of the intangible assets are as follows:

Category Useful life Estimated net residual rate Annual amortization rateLand use right 40-50 years - 2%-2.5%Software 5-10 years - 10%-20%Trademark 10 years 10%

Except for the above intangible assets with finite useful life, the Group also has land use right andtrademark use right with infinite useful lives. Land use right with infinite useful life refers to thepermanent land property right held by the Company for purchasing by Vi?a Indómita, S.A., Vi?a DosAndes, S.A., and Bodegas Santa Alicia SpA. (collectively referred to as the "Chile Indomita WineGroup") and Kilikanoon Estate Pty Ltd (hereinafter referred to as “Australian Kilikanoon Estate”)according to related Chilean and Australian law, which doesn’t need to be amortized. Trademark useright refers to the trademark held by the Group for purchasing Chile Indomita Wine Group andAustralian Kilikanoon Estate, which has no finite useful life. The valuation of trademark use right isbased on the trends in the market and competitive environment, product cycle, and managinglong-term development strategy. Those basis indicated the trademark will provide net cash flows to theGroup within a given period. Because it was hard to predict the period that it would bring economicbenefits to the Group, the useful lives were uncertain.

For an intangible asset with a finite useful life, the Group reviews the useful life and Amortizationmethod at the end of the period, and makes adjustments when necessary.

5.19 Impairment of long-term assets

The Group and the Company review the impairment status of long-term equity investments, fixedassets, investment real estate, construction in progress, productive biological asset and intangibleassets with finite useful life at the end of each year. If the assets exist impairment, the Group estimatesthe recoverable amount of the assets. Intangible assets with indefinite useful life and intangible assetsnot yet available for use are tested for impairment annually, irrespective of whether there is anyindication that the assets may be impaired.

Recoverable amount is estimated on individual basis. If it is not practical to estimate the recoverableamount of an individual asset, the recoverable amount of the asset group to which the asset belongswill be estimated. The recoverable amount of an asset is the higher of its fair value less costs ofdisposal and the present value of the future cash flows expected to be derived from the asset.

If recoverable amount of assets is less than book value, the difference is recognized as impairmentprovision and expensed in current period.

Goodwill is tested for impairment at least at the end of each year. For the purpose of impairmenttesting, goodwill is considered together with the related assets group (s), i.e., goodwill is reasonablyallocated to the related assets group (s) or each of assets group (s) expected to benefit from thesynergies of the combination. An impairment loss is recognized if the recoverable amount of the assetsgroup or sets of assets groups (including goodwill) is less than its carrying amount. The impairmentloss is firstly allocated to reduce the carrying amount of any goodwill allocated to such assets group orsets of assets groups, and then to the other assets of the group pro-rata on the basis of the carryingamount of each asset (other than goodwill) in the group.

The impairment is recognized in profit or loss for the period in which it is incurred and will not bereversed in any subsequent period.

5.20 Long-term unamortized expenses

The Long-term unamortized expenses are amortized evenly over the period of estimated earnings, andthe long-term unamortized expenses of the Group are amortized over the following period:

Amortization periodLand requisition fee 50 yearsLand lease prepayment 50 yearsGreening fee 5-20 yearsLeasehold improvement 3-5yearsOther 3 years

5.21 Employee remuneration

5.21.1 Accounting treatments of short-term remuneration

In an accounting period in which an employee has rendered service to the Group, the Grouprecognizes the actual long-term remuneration for that service as a liability, and includes in the currentprofits and losses or the related asset costs. Employee welfare expenses incurred by the Group shall berecorded into the current profits and losses or related asset costs according to the actual amount.Non-monetary employee benefits are measured at fair value.

Social insurances such as medical insurance, injury insurance and pregnancy insurance, housing funds,labor union and employee education fees paid by the Group for employees, are recognized as relevantliability in the period in which the employees provide service, in accordance with the regulatedrecognition basis and percentage. The related expenditures are included in the current profits andlosses or related asset costs.

5.21.2 Accounting treatments of retired benefits

Retired benefits of the Group are all predetermined provision plan.

In the period in which the employees provide service, the Group recognize liability in accordance withthe amounts to be paid calculated according to the predetermined provision plan, and the relatedexpenditures are either included in cost of related assets or charged to profit or loss in the period whenthey are incurred.

5.21.3 Accounting treatments of termination benefits

When providing termination benefits to employees, the Group recognize employee benefits payrollresulting from termination benefits at the earlier of: the Group cannot unilaterally withdraw from thetermination plan or the redundancy offer; the Group recognize relevant costs and expenses related tothe payment of termination benefits in reconstructuring.

5.22 Revenue

5.22.1 Revenue from sale of goods

Revenue from sale of goods is recognized when the Group has transferred to the buyer the significantrisks and rewards of ownership of the goods. The Group retains neither continuing managerialinvolvement to the degree usually associated with ownership nor effective control over the goods sold.The amount of revenue can be measured reliably and it is probable that the associated economicbenefits will flow to the Group. The associated costs incurred or to be incurred can be measuredreliably.

5.22.2 Revenue from rendering of services

When the outcome of a transaction involving the rendering of services can be estimated reliably,revenue associated with the transaction shall be recognized by reference the stage of completion of thetransaction at the reporting date. The outcome of a transaction can be estimated reliably.

When the outcome of the transaction involving the rendering of services cannot be estimated reliably,revenue is recognized only to the extent of the costs incurred that will be recoverable, and the costsincurred are recognized as expenses for the period. When it is not probable that the costs incurred willbe recovered, revenue is not recognized.

5.23 Government grants

Government grants are transfer of monetary assets and non-monetary assets from the government tothe Group at no consideration. A government grant is recognized only when the Group can complywith the conditions attaching to the grant and the Group will receive the grant.

Monetary government grants are measured by the amount received or receivable.

5.23.1 Judgment basis and accounting treatments of government grant related to anasset

A government grant related to an asset is recognized as deferred income, and evenly amortized toprofit or loss over the useful life of the related asset.

5.23.2 Judgment basis and accounting treatments of government grant related to income

For a government grant related to income, if the grant is a compensation for related expenses or lossesto be incurred in subsequent periods, the grant is recognized as deferred income, and recognized inprofit or loss over the periods in which the related costs are recognized. If the grant is a compensationfor related expenses or losses already incurred, the grant is recognized immediately in profit or loss forthe period.

A government grant related to the Group's daily activities is recognized in other income based on thenature of economic activities; a government grant is not related to the Group's daily activities isrecognized in non-operating income and expenses.

The Company's government loans with below-market rate of interest are directly paid to the Company,and the related low rate interest will write off related borrowing costs. The government loans withbelow-market rate of interest obtained by other subsidiaries of the Group are government loans, whichis provided by local bureau of finance through bank with below-market rate of interest. The actualamount of the loan received by the Group recognized as borrowings, and the related borrowing costsare calculated according to the principal of the loan and the below-market rate.

5.24 Deferred income tax assets/deferred income tax liabilities

The income tax expenses include current income tax and deferred income tax.

5.24.1 Current income tax

On the balance sheet date, current income tax liabilities (or assets) for the current and prior periods aremeasured at the amount expected to be paid (or recovered) according to the requirements of tax laws.

5.24.2 Deferred income tax assets and deferred income tax liabilities

For temporary differences between the carrying amounts of certain assets or liabilities and their taxbase, or between the nil carrying amount of those items that are not recognized as assets or liabilitiesand their tax base that can be determined according to tax laws, deferred income tax assets andliabilities are recognized using the balance sheet liability method.

Deferred tax is generally recognized for all temporary differences. Deferred income tax assets fordeductible temporary differences are recognized to the extent that it is probable that taxable profitswill be available against which the deductible temporary differences can be utilised. However, fortemporary differences associated with the initial recognition of goodwill and the initial recognition ofan asset or liability arising from a transaction (not a business combination) that affects neither theaccounting profit nor taxable profits (or deductible losses) at the time of transaction, no deferred taxasset or liability is recognized.

For deductible losses and tax credits that can be carried forward, deferred income tax assets arerecognized to the extent that it is probable that future taxable profits will be available against whichthe deductible losses and tax credits can be utilised.

Deferred income tax liabilities are recognized for taxable temporary differences associated withinvestments in subsidiaries and associates, and interests in joint ventures, except where the Group isable to control the timing of the reversal of the temporary difference and it is probable that thetemporary difference will not reverse in the foreseeable future. Deferred income tax assets arisingfrom deductible temporary differences associated with such investments and interests are onlyrecognized to the extent that it is probable that there will be taxable profits against which to utilise thebenefits of the temporary differences and they are expected to reverse in the foreseeable future.

On the balance sheet date, deferred income tax assets and liabilities are measured at the tax rates,according to tax laws, that are expected to apply in the period in which the asset is realised or theliability is settled.

Current and deferred tax expenses or income are recognized in profit or loss for the period, exceptwhen they arise from transactions or events that are directly recognized in other comprehensiveincome or in shareholders' equity, in which case they are recognized in other comprehensive income orin shareholders' equity; and when they arise from business combinations, in which case they adjust thecarrying amount of goodwill.

On the balance sheet date, the carrying amount of deferred income tax assets is reviewed and reducedif it is no longer probable that sufficient taxable profits will be available in the future to allow thebenefit of deferred income tax assets to be utilised. Such reduction in amount is reversed when itbecomes probable that sufficient taxable profits will be available.

5.24.3 Net off of income taxes

When the Group has a legal right to settle on a net basis and intends either to settle on a net basis or torealise the assets and settle the liabilities simultaneously, current tax assets and current tax liabilitiesare offset and presented on a net basis.

When the Group has a legal right to settle current tax assets and liabilities on a net basis, and deferredincome tax assets and deferred income tax liabilities relate to income taxes levied by the same taxationauthority on either the same taxable entity or different taxable entities which intend either to settlecurrent tax assets and liabilities on a net basis or to realise the assets and liabilities simultaneously, ineach future period in which significant amounts of deferred income tax assets or liabilities areexpected to be reversed, deferred income tax assets and deferred income tax liabilities are offset andpresented on a net basis.

5.25 Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all therisks and rewards of ownership to the lessee. All other leases are classified as operating leases.

5.25.1 Operating lease accounting treatments

The Group as lessee under operating leases

Operating lease payments are recognized on a straight-line basis over the term of the relevant lease,and are either included in the cost of related asset or charged to profit or loss for the period. Initialdirect costs incurred are charged to profit or loss for the period.

The Group as lessor under operating leases

Rental income from operating leases is recognized in profit or loss on a straight-line basis over theterm of the relevant lease. Initial direct costs with more than an insignificant amount are capitalisedwhen incurred, and are recognized in profit or loss on the same basis as rental income over the leaseterm. Other initial direct costs with an insignificant amount are charged to profit or loss in the periodin which they are incurred. Contingent rents are charged to profit or loss in the period in which they

actually arise.

5.26 Changes in major accounting policies and accounting estimates

5.26.1 Changes in major accounting policies

Content and reason of accounting policy change	Examination and approval procedure	Remarks
In 2017, the Ministry of Finance issued the revised Accounting Standards for Enterprises No.22–Recognition and Measurement of Financial Instruments, Accounting Standards for Enterprises No.23–Transfer of Financial Assets, Accounting Standards for Enterprises No.24 –Hedging and Accounting Standards for Enterprises No.37- Presentation of Financial Instruments (hereinafter referred to as “New Financial Instruments Standards”). From January 1, 2019, the Group conducted accounting treatment in accordance with the above newly revised standards. According to the linkage provisions, no adjustment will be made to the information during the comparable period. The undistributed profits at the beginning of this reporting period will be retroactively adjusted based on the difference between the new standards and the existing standards on the first day of implementation.	Approved by the second meeting of the eighth Board of Directors.	In the consolidated balance sheet on January 1, 2019, the accounts receivable changed from RMB 242,153,083 to RMB 237,781,161; the deferred income tax assets were changed from RMB 285,436,259 to RMB 286,529,239; and the undistributed profit was changed from RMB 8,008,982,547 to RMB 8,005,703,605.
According to the requirements in the Notice on Revising, Printing & Distributing Financial Report Format for General Enterprises in 2019 (Cai Kuai [2019]No. 6), in the balance sheet, the item of “bills receivable and accounts receivable” shall be divided into “bills receivable” and “accounts receivable”; and the item of “bills payable and accounts payable” shall be divided into “bills payable” and “accounts payable”; in the income statement, the item of “R&D expenses” not only reflects the expensed expenditure incurred in the research and development process, but also includes the amortization of self-developed intangible assets listed in the item of “management expenses”.	Approved by the second meeting of the eighth Board of Directors.	The change of accounting policy has no impact on the merger and the net profit of the Company and the owner's equity.

5.26.2 Changes in major accounting estimates

Nil

5.26.3 Particulars of first implementation of New Financial Instruments Standards, newincome standards, and new lease standards to adjust the first implementation of related

items in the financial statements at the beginning of the year

Consolidated Balance Sheet

Unit: Yuan

Item	December 31, 2018	January 1, 2019	Adjusted amount
Bills receivable	288,667,988		-288,667,988
Accounts receivable	242,153,083	237,781,161	-4,371,922
Receivables financing		288,667,988	288,667,988
Available-for-sale financial assets	467,251		-467,251
Other non-current financial assets		467,251	467,251
Deferred income tax assets	285,436,259	286,529,239	1,092,980
Undistributed profit	8,008,982,547	8,005,703,605	-3,278,942
Total owner’s equity	9,606,099,365	9,602,820,423	-3,278,942

Explanation for adjustment:

Unit: Yuan

Item	Book value listed according to the original standards on December 31, 2018	Impact of the New Financial Instrument Standards	Impact of changes in presentation of other financial statements	Book value listed according to the new standards on January 1, 2019
Bills receivable and accounts receivable	530,821,071		-530,821,071
Bills receivable		-288,667,988	288,667,988
Accounts receivable		-4,371,922	242,153,083	237,781,161
Receivables financing		288,667,988		288,667,988
Available-for-sale financial assets	467,251	-467,251
Other non-current financial assets		467,251		467,251
Deferred income tax assets	285,436,259	1,092,980		286,529,239
Total	816,724,581	-3,278,942		813,445,639

Balance Sheet of the Parent Company

Unit: Yuan

Item	December 31, 2018	January 1, 2019	Adjusted amount
Bills receivable	39,885,254		-39,885,254
Accounts receivable	1,447,973	1,447,973
Receivables financing		39,885,254	39,885,254
Total owner’s equity	10,023,375,582	10,023,375,582

Explanation for adjustment:

Unit: Yuan

Item

Book value listed according to the original standards on December 31, 2018

Impact of the New Financial Instrument

Impact of changes in presentation of other financial statements

Book value listed according to the new standards on January 1, 2019

		Standards
Bills receivable and accounts receivable	41,333,227		-41,333,227
Bills receivable		-39,885,254	39,885,254
Accounts receivable			1,447,973	1,447,973
Receivables financing		39,885,254		39,885,254
Other receivables	1,025,643,356			1,025,643,356
Total	1,066,976,583			1,066,976,583

5.27 Other

Critical judgments in applying accounting policies and key assumptions and uncertainties inaccounting estimates

In the application of accounting policies as set out in Note 4, the Group is required to make judgments,estimates and assumptions about the carrying amounts of items in the financial statements that cannotbe measured accurately, due to the internal uncertainties of the operating activities. These judgments,estimates and assumptions are based on historical experience of the Group's management as well asother factors that are considered to be relevant. Actual results may differ from these estimates.

The Group periodically reviews the judgments, estimates and assumptions above on a going concernbasis. For those changes in accounting policies that only affect current financial statements, theinfluences are recognized in current period. For those changes in accounting policies that affect bothcurrent and future financial statements, the influences are recognized in both current and prospectiveperiods.

Key assumption and uncertainties in accounting estimates

The following are key assumptions for after balance sheet date event and other factors of uncertainestimation. They may cause material adjustment on balance sheet in following accounting period.

Deferred income tax assets recognized by deductible loss

Deferred income tax assets are recognized for all unused tax losses to the extent that it is probable thattaxable profit will be available against which the losses can be utilized. Significant managementjudgment is required to determine the amount of deferred income tax assets that can be recognized,

based upon the likely timing and level of future taxable profits together with future tax planningstrategies.

Depreciation of fixed assets

The depreciation is calculated on the straight line basis to write-off the cost of each item of fixedassets to its residual value over its estimated useful life. The Group's management determines theestimated useful lives for its fixed assets. This estimate is based on the historical experience of theactual useful lives of fixed assets of similar nature and functions. If the previous estimates havesignificant changes, depreciation expenses will be adjusted in the future period.

Impairment of long-term assets

The Group assesses whether the recoverable amount is lower than the book value. If there are anyindicators that the book value of non-current assets cannot be fully recoverable, impairment lossesshould be recorded.

The recoverable amount is the higher of an asset's fair value less costs to sell and the present value ofthe future cash flows expected to be derived from an asset. As it is difficult for the Group to obtainthe quoted market price of the assets (or assets group), the fair value of the assets cannot be reliablyestimated. When estimating the present value of future cash flows, it is necessary to make importantjudgments about the output, selling price, related operating costs, discount rate used in calculating thepresent value of the asset (or asset group), etc. In estimating the recoverable amount, the Group usesall readily available information, including projections of production volumes, selling prices andassociated operating costs based on reasonable and supportable assumptions.

Inventory depreciation provision accrued based on net realizable value

The inventories are measured on the lower of carrying value and net realizable value, and provisionshould be made for impairment on obsolete and slow moving inventories. The Group will reassesswhether the net realizable value is lower than the carrying cost at the end of each year.

Preparation for the measurement of the fair value of identifiable assets and liabilities of theacquiree from a business combination

For the cost of business combination, the Group allocates the purchase price based on the fair value ofthe identifiable assets and liabilities of the acquiree on the date of acquisition. When measuring the fairvalue of the above identifiable assets and liabilities in accordance with the present value of future cashflow, the management of the Group needs to estimate the sales growth rate based on the supply anddemand situation of the future market to forecast the cash flow, and consider to choose the appropriatediscount rate for the discount. The management may use significant accounting estimates andjudgments in the progress.

6. Taxes

6.1 The main taxes and tax rates are as follows:

6.2 Tax incentives and relative permit

Ningxia Changyu Grape Growing Co., Ltd.("Ningxia Growing"), a subsidiary of the Group, whoseprincipal activity is grape growing is incorporated in Ningxia Huizu Autonomous Region. Accordingto clause 27 of PRC Corporate Income Tax and clause 86 of PRC Corporate Income Tax Measures forImplementation, Ningxia Growing enjoys an exemption of corporate income tax.

Yantai Changyu Grape Growing Co., Ltd.(" Grape Growing "), a branch of the Company, whoseprincipal activity is grape growing is incorporated in Zhifu District, Yantai City, Shandong Province.According to clause 27 of PRC Corporate Income Tax and clause 86 of PRC Corporate Income TaxMeasures for Implementation, Grape Growing enjoys an exemption of corporate income tax.

Tax category	Taxation basis	Tax rates
Value added tax	Levied on the balance between the output tax calculated based on taxable income and the input tax allowed to be deducted in current period	13%, 9% 6% (Chinese), 20% (France), 21% (Spain), 19% (Chile), 10% (Australia)
Consumption tax	Levied on taxable income	10%, 20% (Chinese)
City development tax	Levied on circulation tax actually paid	7% (Chinese)
Corporate income tax	Levied on taxable income	25%(Chinese), 33.3%(France), 28% (Spain), 27% (Chile), 30% (Australia)

Xinjiang Tianzhu Co., Ltd ("Xinjiang Tianzhu"), a subsidiary of the Company, is an enterprise of wineproduction and sales incorporated in Shihezi city, Xinjiang Weizu Autonomous. In accordance with theNotice on Tax Policy Issues concerning Further Implementation of the Western China DevelopmentStrategy (Cai Shui [2011] No.58), Xinjiang Tianzhu is qualified to enjoy preferential taxation policies,which means it can pay corporate income tax at a preferential rate of 15% for the period from 2015 to2020.

Xinjiang Babao Baron Chateau Co., Ltd. ("Shihezi Chateau"), a subsidiary of the Company, is anenterprise of wine production and sales incorporated in Shihezi city, Xinjiang Weizu Autonomous. Inaccordance with the Notice on Tax Policy Issues concerning Further Implementation of the WesternChina Development Strategy (Cai Shui [2011] No.58), Shihezi Chateau is qualified to enjoypreferential taxation policies, which means it can pay corporate income tax at a preferential rate of15% for the period from 2015 to 2020.

7. Notes to items in the consolidated financial statement

7.1 Monetary capital

Unit: Yuan

Item	Ending balance	Beginning balance
Cash on hand	70,198	114,335
Bank deposit	1,756,744,006	1,382,399,749
Other monetary capital	91,818,749	93,186,393
Total	1,848,632,953	1,475,700,477

As at June 30, 2019, the restricted bank deposit details are listed as follows:

Unit: Yuan

Item	Ending balance	Beginning balance
Housing fund of the unit	2,647,877	2,611,350
Total	2,647,877	2,611,350

As at June 30, 2019, the details of other monetary funds are listed as follows:

Unit: Yuan

Item	Ending balance	Beginning balance
Pledge of fixed deposits by Yantai Changyu Wine Research, Development and Manufacture Co., Ltd. (“R&D Company”)	46,100,000	46,100,000
Guaranteed deposits paid for the letter of credit	44,540,850	44,540,850
Account balance of Alipay	1,042,367	2,483,816
Guaranty money for the unit card	125,532	51,727
Guaranty money for ICBC platform	10,000	10,000
Total	91,818,749	93,186,393

As at June 30, 2019, the bank deposits of the Group including short-term fixed deposits ranging from3 months to 12 months amounted to RMB 180,439,250 Yuan (December 31, 2018: RMB 173,042,400Yuan), with the interest rates ranging from 1.40% to 2.03%.

7.2 Bills receivable

7.2.1 Classification of bills receivable

Unit: Yuan

Type	Ending balance	Beginning balance
Bank acceptance		288,667,988
Trade acceptance
Total		288,667,988

7.2.2 Provision for bad debts accrued, withdrawn or transferred back in this periodNil

7.2.3 Bills receivable pledged by the Company at the end of periodNil

7.2.4 Bills receivable endorsed or discounted by the Company at the end of period butnot yet matured as of the balance sheet date

Unit: Yuan

Item	Amount terminating recognition at the end of period	Amount not terminating recognition at the end of period
Bank acceptance	275,760,494
Trade acceptance
Total	275,760,494

7.2.5 Bills receivable reclassified as accounts receivable by the Company due to thedefault of drawer at the end of period

Nil

7.2.6 Bills receivable actually cancelled after verification in this periodNil

7.3 Accounts receivable

7.3.1 Accounts receivable disclosed by type

Unit: Yuan

Type	Ending balance					Beginning balance
	Book balance		Provision for bad debts		Book value	Book balance		Provision for bad debts		Book value
	Amount	Proportion	Amount	Accrued proportion		Amount	Proportion	Amount	Accrued proportion
Accounts receivable for which provision for bad debts is accrued on a single item basis						242,153,083	100%			242,153,083
Including:
Accounts receivable for which provision for bad debts is accrued on a combined basis	191,269,049	100%	5,137,857	2.78%	186,131,192
Including:
Accounts receivable for which provision for bad debts is accrued by credit risk features	191,269,049	100%	5,137,857	2.78%	186,131,192
Total	191,269,049	100%	5,137,857	2.78%	186,131,192	242,153,083	100%			242,153,083

Provision for bad debts accrued on a combined basis:

Unit: Yuan

Name	Ending balance
	Book balance	Provision for bad debts	Accrued proportion
Accounts receivable for which provision for bad debts is accrued by credit risk features	191,269,049	5,137,857	2.78%
Total	191,269,049	5,137,857	--

Disclosed by age:

Unit: Yuan

Age	Ending balance
Within 1 year (including)	180,854,504
1-2 years	8,978,048
2-3 years	1,199,269
Over 3 years	237,228
Total	191,269,049

As at June 30, 2019, the accounts receivable with ownership restrictions were RMB 31,134,017 Yuan(December 31, 2018: RMB 52,015,032 Yuan). Please refer to Note 7.18 for details.

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

Provision for bad debts accrued in this period:

Unit: Yuan

Type	Beginning balance of the original financial instruments standards	Adjusted amount in the first implementation of the New Financial Instruments Standards	Beginning balance of the year after adjustment	Changes in t his period			Ending balance
				Accrued	Withdrawn or transferred back	Cancelled
Accounts receivable for which provision for bad debts is accrued by credit risk features		4,371,922	4,371,922	765,935			5,137,857
Total		4,371,922	4,371,922	765,935			5,137,857

There were no provision for bad debts withdrawn or transferred back in this period.

7.3.3 Accounts receivable actually cancelled after verification in this period

Nil

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

Unit: Yuan

Unit	Relationship with the Company	Amount	Period	Percentage in total accounts receivable
Nonggongshang Supermarket (Group) Co., Ltd.	Third party	10,077,717	Within 1 year	5.3%
Suguo Supermarket Co., Ltd.	Third party	7,168,620	Within 1 year	3.7%
Vi?edos y Bodegas Las Pircas	Third party	6,917,840	Within 1 year	3.6%
Lianhua Supermarket Holdings Co., Ltd.	Third party	5,408,819	Within 1 year	2.8%
MARKS AND SPENCER	Third party	5,365,322	Within 1 year	2.8%
Total	--	34,938,318	--	18.3%

7.3.5 Accounts receivable terminating recognition due to transfer of financial assets

Nil

7.3.6 Accounts receivable transferred and included in assets and liabilitiesNil

7.4 Receivables financing

Unit: Yuan

Item	Ending balance	Beginning balance
Bank acceptance	372,281,872
Total	372,281,872

7.5 Advance payment

7.5.1 Advance payment listed by age

Unit: Yuan

Age	Ending balance		Beginning sum
	Amount	Proportion	Amount	Proportion
Within 1 year	3,490,928	100%	4,219,949	100%
1-2 years
2-3 years
More than 3 years
Total	3,490,928	--	4,219,949	--

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

Unit: Yuan

Category of client	Relationship with the Group	Amount	Age	Reason for unsettlement	Percentage in the total advance payment%
Ningxia Vangarie Wine Co., Ltd.	Third party	600,000	Within 1 year	Failure to receive the goods	17.2%
Yantai Power Supply Company of State Grid Shandong Electric Power Company	Third party	500,000	Within 1 year	Prepaid electricity purchasing fund	14.3%
DONELLI VINI S.P.A.	Third party	463,523	Within 1 year	Failure to receive the goods	13.3%
YEDA Thermal Power Construction & Installation Engineering Co., Ltd.	Third party	250,545	Within 1 year	Failure to receive the goods	7.2%
Yantai Deyi Hardware Mechanical & Electrical Co., Ltd.	Third party	192,045	Within 1 year	Failure to receive the goods	5.5%

Total

--

2,006,113

--

--

57.4%

7.6 Other receivables

Unit: Yuan

Item	Ending balance	Beginning balance
Interest receivable	2,099,109	1,332,681
Dividends receivable
Other receivables	26,519,874	21,303,405
Total	28,618,983	22,636,086

7.6.1 Interest receivable

Unit: Yuan

Item	Ending balance	Beginning balance
Fixed deposit	2,099,109	1,332,681
Entrusted loan
Bond investment
Total	2,099,109	1,332,681

7.6.2 Other receivables

7.6.2.1 Other receivables classified by nature

Unit: Yuan

Nature	Ending book balance	Beginning book balance
Deposit and guaranty money receivable	9,991,516	10,453,624
Imprest receivable	2,776,485	2,274,038
Accounts receivable from related parties	1,911,880	813,440
Consumption tax and added-value tax export rebate	9,651,893	6,273,882
Other	2,188,100	1,488,421
Total	26,519,874	21,303,405

7.6.2.2 Disclosed by age

Unit: Yuan

Age	Ending balance
Within 1 year (including)	15,284,516
1-2 years	1,162,933
2-3 years	8,302,579
More than 3 years	1,769,846
Total	26,519,874

7.6.2.3 Provision for bad debts accrued, withdrawn or transferred back in this periodThe provision for bad debts accrued in this period was RMB 0 Yuan; and that withdrawn ortransferred back in this period was RMB 0 Yuan.

7.6.2.4 Other receivables actually cancelled after verification in this period

Nil

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

Unit: Yuan

Unit	Nature	Ending balance	Age	Percentage in total ending balance of other accounts receivable	Ending balance of provision for bad debts
YEDA Construction Industry Association	Construction guaranty money	7,709,477	Within 3 years	29.10%
Yantai God Horse Packing Co., Ltd. Printing Branch	Lease payment receivable	1,626,880	Within 1 year	6.10%
Yantai Zhongya Medical Health Wine Co., Ltd.	Lease payment receivable	285,000	Within 1 year	1.10%
YEDA Finance Bureau	Guaranty money	198,056	Within 1 year	0.70%
Yantai Power Supply Company of State Grid Shandong Electric Power Company	Deposit	80,000	Within 1 year	0.30%
Total	--	9,899,413	--	37.30%

7.6.2.6 Accounts receivable involving government subsidies

Nil

7.6.2.7 Other receivables that are terminated for recognition due to transfer of financialassets

Nil

7.6.2.8 Other receivables transferred and then included in assets and liabilitiesNil

7.7 Inventories

7.7.1 Inventory classification

Unit: Yuan

Item

Ending balance

Beginning balance

	Book balance	Depreciation provision	Book value	Book balance	Depreciation provision	Book value
Raw materials	88,705,179		88,705,179	67,267,035		67,267,035
Goods in process	1,837,958,108		1,837,958,108	1,787,819,923		1,787,819,923
Commodity stocks	698,652,646	18,534,497	680,118,149	894,187,725	24,683,226	869,504,499
Total	2,625,315,933	18,534,497	2,606,781,436	2,749,274,683	24,683,226	2,724,591,457

7.7.2 Inventory depreciation provision

Unit: Yuan

Item	Beginning balance	Increase in this period		Decrease in this period		Ending balance
		Accrual	Other	Transfer back or write-off	Other
Raw materials
Goods in process
Commodity stocks	24,683,226			6,148,729		18,534,497
Total	24,683,226			6,148,729		18,534,497

7.8 Other current assets

Unit: Yuan

Item	Ending balance	Beginning balance
Prepaid corporate income tax	70,523,939	24,077,323
Deductible input tax	229,478,097	233,087,707
Rent to be amortized	416,865	1,511,366
Total	300,418,901	258,676,396

7.9 Other non-current financial assets

Unit: Yuan

Item	Ending balance	Beginning balance
Other	515,922
Total	515,922

7.10 Investment real estate

7.10.1 Investment real estate by cost measurement method

Unit: Yuan

Item	Houses and buildings	Land use right	Construction in progress	Total
Ⅰ Original book value
1. Beginning balance	70,954,045			70,954,045
2. Increase in this period
2.1 Outsourcing

Item	Houses and buildings	Land use right	Construction in progress	Total
2.2 Transfer in from inventories\fixed assets\ construction in progress
2.3 Business merger increase
3. Decrease in this period
3.1 Disposal
3.2 Other transfer out
4. Ending balance	70,954,045			70,954,045
Ⅱ Accumulated depreciation & accumulated amortization
1. Beginning balance	39,381,556			39,381,556
2. Increase in this period	1,012,019			1,012,019
2.1 Accrual or amortization	1,012,019			1,012,019
3. Decrease in this period
3.1 Disposal
3.2 Other transfer out
4. Ending balance	40,393,575			40,393,575
Ⅲ Impairment provision
1. Beginning balance
2. Increase in this period
2.1 Accrual
3. Decrease in this period
3.1 Disposal
3.2 Other transfer out
4. Ending balance
Ⅳ Book value
1. Ending book value	30,560,470			30,560,470
2. Beginning book value	31,572,489			31,572,489

7.11 Fixed assets

Unit: Yuan

Item	Ending balance	Beginning balance
Fixed assets	5,684,612,653	5,749,731,667
Disposal of fixed assets
Total	5,684,612,653	5,749,731,667

7.11.1 Particulars of fixed assets

Unit: Yuan

Item	Houses and buildings	Machinery equipment	Construction tools	Total
Ⅰ Original book value:
1. Beginning balance	4,761,426,425	2,665,798,814	26,580,639	7,453,805,878
2. Increase in this period	33,949,084	48,642,164	1,281,845	83,873,093
2.1 Acquisition	4,174,052	13,254,325	1,281,845	18,710,222

Item	Houses and buildings	Machinery equipment	Construction tools	Total
2.2 Transfer in from construction in progress	29,775,032	35,387,839		65,162,871
2.3 Business merger increase
3. Decrease in this period	5,422,920	2,867,114	456,453	8,746,487
3.1 Disposal or retirement	5,422,920	2,867,114	456,453	8,746,487
4. Ending balance	4,789,952,589	2,711,573,864	27,406,031	7,528,932,484
Ⅱ Accumulated depreciation
1. Beginning balance	621,266,769	1,062,064,237	20,743,205	1,704,074,211
2. Increase in this period	67,239,979	79,376,506	1,071,000	147,687,485
2.1 Accrual	67,239,979	79,376,506	1,071,000	147,687,485
3. Decrease in this period	4,489,447	2,518,788	433,630	7,441,865
3.1 Disposal or retirement	4,489,447	2,518,788	433,630	7,441,865
4. Ending balance	684,017,301	1,138,921,955	21,380,575	1,844,319,831
Ⅲ Impairment provision
1. Beginning balance
2. Increase in this period
2.1 Accrual
3. Decrease in this period
3.1 Disposal or retirement
4. Ending balance
Ⅳ Book value
1. Ending book value	4,105,935,288	1,572,651,909	6,025,456	5,684,612,653
2. Beginning book value	4,140,159,656	1,603,734,577	5,837,434	5,749,731,667

As at June 30, 2019, the net value of the fixed assets with ownership restrictions was RMB353,013,613 Yuan (December 31, 2018: RMB 412,006,421 Yuan). Please refer to Note 7.51for details.

7.11.2 Particulars of temporarily idle fixed assets

Unit: Yuan

Item	Original book value	Accumulated depreciation	Depreciation reserves	Book value	Remarks
Temporarily idle fixed assets	124,758,075	67,762,891		56,995,184

7.11.3 Particulars of fixed assets under finance leases

Nil

7.11.4 Fixed assets under operating lease

Unit: Yuan

Item	Ending book value
Machinery equipment	115,720

7.11.5 Particulars of fixed assets without property certificates

Unit: Yuan

Item	Book value	Reason for not receiving the property certificate
Industrial Production Center of the R&D Company	1,733,732,977	Under transaction
Dormitory Building, Main Building and Reception Building of Chang’an Chateau	280,709,011	Under transaction
European Town, Main Building and Service Building of Beijing Chateau	184,687,307	Under transaction
Main Building of Yantai Chateau Changyu Tinlot	81,685,892	Under transaction
Fermentation Workshop and Wine Storage Workshop of Xinjiang Tianzhu	17,499,421	Under transaction
Office Building and Packaging Workshop of Icewine Valley	9,044,465	Under transaction
Wine-making Workshop of Changyu (Jingyang)	4,017,018	Under transaction
Office Building, Laboratory Building and Workshop of Fermentation Center	3,572,175	Under transaction
Finished Goods Warehouse and Workshop of Kylin Packaging	2,351,511	Under transaction
Office Building of Guangxi Guilin Office and Office Building of Shanxi Datong Office	1,110,076	Under transaction
Total	2,318,409,853	Under transaction

7.12 Construction in progress

7.12.1 Particulars of construction in progress

Item	Ending balance			Beginning balance
	Book balance	Impairment provision	Book value	Book balance	Impairment provision	Book value
Research, Development & Manufacture Center (“Changyu Wine City Complex”)	672,975,492		672,975,492	608,553,617		608,553,617
Construction Project of Chang’an Chateau	17,537,828		17,537,828	39,793,893		39,793,893
Construction Project of Ningxia Chateau	47,371,353		47,371,353	47,163,863		47,163,863
Construction Project of Shihezi Chateau	379,517		379,517	23,664,124		23,664,124
Construction Project of Sales Company	19,145,181		19,145,181	17,985,882		17,985,882
Construction Projects of Other Companies	32,463,002		32,463,002	22,135,212		22,135,212
Total	789,872,373		789,872,373	759,296,591		759,296,591

7.12.2 Changes of major construction in progress in this period

Unit: Yuan

Item	Budget	Beginning balance	Increase in this period	Transferred to fixed assets in this period	Other decrease in this period	Ending balance	Proportion of accumulative project input in budget	Accumulative capitalized amount of interest	Including: capitalized amount of interest in this period	Capitalization ratio of interest in this period	Capital source
Changyu Wine City Complex	4,505,780,000	608,553,617	105,008,609	30,903,286	9,683,448	672,975,492	76.60%		16,954,039	1.20% and 4.3%	Loans form financial institutions and self-raised funds
Construction Project of Chang’an Chateau	620,740,000	39,793,893	7,523,270	29,779,335		17,537,828	109.90%				Self-raised funds
Construction Project of Shihezi Chateau	780,000,000	23,664,124	4,615,627	138,172	27,762,062	379,517	96.90%				Self-raised funds
Construction Project of Sales Company	161,350,000	17,985,882	1,262,622	103,323		19,145,181	98.50%				Self-raised funds
Construction Project of Ningxia Chateau	41,415,000	47,163,863	207,490			47,371,353	102.60%				Self-raised funds
Total	6,109,285,000	737,161,379	118,617,618	60,924,116	37,445,510	757,409,371	--	--	16,954,039		--

As at June 30, 2019, there was no indication for impairment of construction in progress of the Group, so no provision for impairment was made.

Yantai Changyu Pioneer Wine Co., Ltd. 2019 Semi-annual Report

7.13 Productive biological assets

7.13.1 Productive biological assets by cost measurement method

Unit: Yuan

Item	Plantation		Total
	Immature	Mature
Ⅰ Original book value
1. Beginning balance	13,837,608	235,246,042	249,083,650
2. Increase in this period	-4,798,454	9,593,745	4,795,291
2.1 Outsourcing
2.2 Self cultivation	2,388,310	2,406,981	4,795,291
The immature turn to the mature	-7,186,764	7,186,764
3. Decrease in this period
3.1 Disposal
3.2 Other
4. Ending balance	9,039,154	244,839,787	253,878,941
Ⅱ Accumulated depreciation
1. Beginning balance		39,817,277	39,817,277
2. Increase in this period		6,448,225	6,448,225
2.1 Accrual		6,448,225	6,448,225
3. Decrease in this period
3.1 Disposal
3.2 Other
4. Ending balance		46,265,502	46,265,502
Ⅲ Impairment provision
1. Beginning balance
2. Increase in this period
2.1 Accrual
3. Decrease in this period
3.1 Disposal
3.2 Other
4. Ending balance
Ⅳ Book value
1. Ending book value	9,039,154	198,574,285	207,613,439
2. Beginning book value	13,837,608	195,428,765	209,266,373

As at June 30, 2019, no ownership of the biological assets was restricted.

As at June 30, 2019, there was no indication for impairment of biological assets of the Group, so noprovision was made.

Yantai Changyu Pioneer Wine Co., Ltd. 2019 Semi-annual Report

7.14 Intangible assets

7.14.1 Particulars of intangible assets

Unit: Yuan

Item	Land use right	Software use right	Trademark	Total
Ⅰ Original book value
1. Beginning balance	528,252,911	75,822,057	170,068,735	774,143,703
2. Increase in this period	16,176	107,993		124,169
2.1 Acquisition	16,176	107,993		124,169
2.2 Internal R&D
2.3 Business merger increase
3. Decrease in this period
3.1 Disposal
4. Ending balance	528,269,087	75,930,050	170,068,735	774,267,872
Ⅱ Accumulated amortization
1. Beginning balance	78,070,910	26,722,815	13,876,519	118,670,244
2. Increase in this period	5,231,260	3,185,493	21,989	8,438,742
2.1 Accrual	5,231,260	3,185,493	21,989	8,438,742
3. Decrease in this period
3.1 Disposal
4. Ending balance	83,302,170	29,908,308	13,898,508	127,108,986
Ⅲ Impairment provision
1. Beginning balance
2. Increase in this period
2.1 Accrual
3. Decrease in this period
3.1 Disposal
4. Ending balance
Ⅳ Book value
1. Ending book value	444,966,917	46,021,742	156,170,227	647,158,886
2. Beginning book value	450,182,001	49,099,242	156,192,216	655,473,459

As at June 30, 2019, the net value of the intangible assets with ownership restrictions wasRMB 215,282,924 Yuan (December 31, 2018: RMB 218,070,414 Yuan). Please refer toNote 7.51 for details.

Yantai Changyu Pioneer Wine Co., Ltd. 2019 Semi-annual Report

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

Nil

7.15 Goodwill

Unit: Yuan

Name of the invested unit or matter forming goodwill	Beginning balance	Increase in this period		Decrease in this period		Ending balance
		Formed by business merger	Other	Disposal	Other
Etablissements Roullet Fransac (“Roullet Fransac”)	13,112,525					13,112,525
Dicot Partners, S.L (“Atrio Group”)	92,391,901					92,391,901
Societe Civile Argricole Du Chateau De Mirefleurs (“Mirefleurs”)	15,761,440					15,761,440
Indomita Wine Company Chile, SpA	6,870,115					6,870,115
Kilikanoon Estate, Australia	37,063,130					37,063,130
Total	165,199,111					165,199,111

7.16 Long-term unamortized expenses

Unit: Yuan

Item	Beginning balance	Increase in this period	Amortization in this period	Other decrease	Ending balance
Land lease fees	54,217,763		1,073,811		53,143,952
Land acquisition fees	43,427,739		215,293		43,212,446
Afforestation fees	141,224,472	9,683,449	4,615,467		146,292,454
Renovation costs	775,647	27,762,062	476,300		28,061,409
Other	4,994,795	1,134,446	281,791		5,847,450
Total	244,640,416	38,579,957	6,662,662		276,557,711

Remarks: The amount transferred to long-term unamortized expenses from construction inprogress was RMB 38,234,356 Yuan.

7.17 Deferred income tax assets/liabilities

7.17.1 Un-offset deferred income tax assets

Unit: Yuan

Item	Ending Balance		Beginning Balance
	Deductible temporary difference	Deferred income tax assets	Deductible temporary difference	Deferred income tax assets
Unrealized profits from inter-company transactions	383,079,453	95,769,863	602,476,583	150,619,145

Yantai Changyu Pioneer Wine Co., Ltd. 2019 Semi-annual Report

Item	Ending Balance		Beginning Balance
	Deductible temporary difference	Deferred income tax assets	Deductible temporary difference	Deferred income tax assets
Unpaid bonus	107,118,804	26,808,863	141,808,257	35,485,814
Dismission welfare	21,108,526	5,277,132	26,186,243	6,546,561
Asset impairment provision	23,672,354	5,918,088	24,683,226	6,170,807
Deductible loss	326,241,084	83,564,280	262,937,999	67,566,387
Deferred income	78,596,149	17,132,928	86,227,293	18,868,963
Asset valuation impairment	649,811	175,449	661,415	178,582
Total	940,466,181	234,646,603	1,144,981,016	285,436,259

7.17.2 Un-offset deferred income tax liabilities

Unit: Yuan

Item	Ending Balance		Beginning Balance
	Taxable temporary difference	Deferred income tax liabilities	Taxable temporary difference	Deferred income tax liabilities
Assets appraisal appreciation in business merger under non-common control	69,392,888	18,629,612	81,338,130	22,010,647
Total	69,392,888	18,629,612	81,338,130	22,010,647

7.17.3 Details of unconfirmed deferred income tax assets

Unit: Yuan

Item	Ending balance	Beginning balance
Deductable temporary difference
Deductible loss	157,722,738	171,430,831
Total	157,722,738	171,430,831

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

Unit: Yuan

Year	Ending sum	Beginning sum	Remark
2020	45,960,766	45,960,766
2021	82,685,213	82,685,213
2022	14,362,787	14,362,787
2023	6,987,182	21,110,792
2024	7,726,790
Total	157,722,738	164,119,558	--

Yantai Changyu Pioneer Wine Co., Ltd. 2019 Semi-annual Report

7.18 Short-term loans

7.18.1 Classification of short-term loans

Unit: Yuan

Item	Ending balance	Beginning balance
Pledge loan
Mortgage loan	65,507,517	79,467,832
Guaranteed loan	7,145,835	3,331,870
Fiduciary loan	605,517,315	605,202,708
Total	678,170,667	688,002,410

As at June 30, 2019, the mortgage loans referred to a loan of factoring business for accountsreceivable of EUR 3,982,860 (equivalent to RMB 31,134,017 Yuan) that Hacienda y VinedosMarques del Atrio, S.L.U. (“Marques del Atrio”) transacted in such banks as Banco deSabadell, S.A. (December 31, 2018: RMB 52,015,032 Yuan), a loan of USD 5,000,000(equivalent to RMB 34,373,500 Yuan) that Indomita Wine Company Chile, SpA borrowedfrom BBVA bank by mortgage of its fixed assets of CLP 2,931,854,000 (equivalent to RMB29,904,911 Yuan) (December 31, 2018: RMB 27,452,800 Yuan). The guaranteed loanreferred to a loan borrowed by the Company from Australia & New Zealand Banking with aguarantee for Kilikanoon Estate, Australia of AUD 1,483,893 (equivalent to RMB 7,145,835Yuan) (December 31, 2018: RMB 3,331,870 Yuan).

7.19 Accounts payable

7.19.1 List of accounts payable

Unit: Yuan

Item	Ending balance	Beginning balance
Trade accounts payable	539,459,878	713,572,881
Total	539,459,878	713,572,881

7.19.2 Explanation of significant accounts payable aged more than one yearAs at June 30, 2019, there were no significant accounts payable aged more than one year.

7.20 Advances from customers

7.20.1 List of advances from customers

Unit: Yuan

Item	Ending sum	Beginning sum
Advances from customers	177,549,080	226,075,244
Total	177,549,080	226,075,244

7.20.2 Advances from customers of significant amount aged more than one yearAs at June 30, 2019, the Company had no advances from customers of significant amount

Yantai Changyu Pioneer Wine Co., Ltd. 2019 Semi-annual Report

aged more than one year.

7.21 Employee remunerations payable

7.21.1 List of employee remunerations payable

Unit: Yuan

Item	Beginning balance	Increase in this period	Decrease in this period	Ending balance
1. Short-term remuneration	185,893,109	214,884,524	245,100,514	155,677,119
2. Post-employment welfare – defined contribution plan	224,865	27,605,713	27,149,855	680,723
3. Dismission welfare	26,186,243	1,310,247	6,387,964	21,108,526
4.Other welfare due within one year
Total	212,304,217	243,800,484	278,638,333	177,466,368

7.21.2 List of short-term remunerations

Unit: Yuan

Item	Beginning balance	Increase in this period	Decrease in this period	Ending balance
1. Salaries, bonuses, allowances and subsidies	187,685,990	188,388,623	215,640,569	160,434,044
2. Staff welfare	3,014,288	4,969,229	7,875,107	108,410
3. Social insurance charges	461,095	14,314,931	14,435,562	340,464
Including: Medical insurance	460,440	12,510,735	12,656,526	314,649
Injury insurance	655	914,251	889,091	25,815
Maternity insurance		889,945	889,945
4. Housing fund	52,510	6,147,006	6,191,272	8,244
5. Union fee and staff education fee	1,914,079	1,064,735	1,033,635	1,945,179
6. Short-term compensated absences
7. Short-term profit-sharing plan
Minus: Those divided into non-current assets	7,234,853		75,631	7,159,222
Total	185,893,109	214,884,524	245,100,514	155,677,119

7.21.3 List of defined contribution plan

Unit: Yuan

Item	Beginning balance	Increase	Decrease	Ending balance
1. Basic endowment insurance	224,533	26,914,033	26,457,843	680,723
2. Unemployment insurance	332	691,680	692,012
3. Enterprise annuity payment
Total	224,865	27,605,713	27,149,855	680,723

Yantai Changyu Pioneer Wine Co., Ltd. 2019 Semi-annual Report

7.21.4 Dismission welfare

Unit: Yuan

Item	Beginning balance	Increase	Decrease	Ending balance
1. Compensation for server of labor relation		1,275,387	1,275,387	-
2. Compensation for early retirement	26,186,243	34,860	5,112,577	21,108,526
Total	26,186,243	1,310,247	6,387,964	21,108,526

7.22 Taxes and dues payable

Unit: Yuan

Item	Ending balance	Beginning balance
Value added tax	28,114,274	36,442,868
Consumption tax	9,089,447	28,636,646
Corporate income tax	59,137,357	40,869,507
Individual income tax	276,031	5,669,099
Urban maintenance and construction tax	2,407,009	4,337,712
Property tax	5,406,700	5,165,128
Urban land use tax	2,255,344	2,476,527
Other	2,314,640	5,315,303
Total	109,000,802	128,912,790

7.23 Other payables

Unit: Yuan

Item	Ending balance	Beginning balance
Interest payable	2,669,667	712,826
Dividends payable	412,646,375
Other payables	562,350,965	607,767,064
Total	977,667,007	608,479,890

Remarks: Other payables in the above list refer to the payables after deducting interestpayable and dividends payable.

7.23.1 Interest payable

Unit: Yuan

Item	Ending balance	Beginning balance
Interest of long-term loans with interest paid by installment and principal paid on maturity
Interest of corporate bonds
Interest payable of short-term loans	2,669,667	712,826
Interest of preferred shares\ perpetual bonds divided into financial liabilities
Other
Total	2,669,667	712,826

Yantai Changyu Pioneer Wine Co., Ltd. 2019 Semi-annual Report

7.23.2 Dividends payable

Unit: Yuan

Item	Ending balance	Beginning balance
Ordinary stock dividends	411,278,400
Preferred stock dividends/sustainable debt dividends divided into equity instruments
Other	1,367,975.00
Total	412,646,375.00

7.23.3 Other payables

7.23.3.1 Other payables listed by nature

Unit: Yuan

Item	Ending balance	Beginning balance
Dealer’s deposit payable	166,741,693	159,191,138
Equipment purchase and construction costs payable	93,902,789	152,825,734
Transportation charges payable	15,579,562	38,867,725
Trademark use fees payable for Changyu Group Company		78,414,978
Advertisement marketing expenses payable	209,606,196	96,429,861
Employee cash deposit	869,282	2,806,766
Supplier’s deposit payable	18,732,029	15,901,210
Contracting fees payable	19,130,850	27,070,584
Other	37,788,564	36,259,068
Total	562,350,965	607,767,064

7.23.3.2 Other significant accounts payable aged more than one year

Unit: Yuan

Item	Ending balance	Cause of unpayment or carry-over
Beijing Qinglang Ecological Agriculture Technology Development Co., Ltd. (“Beijing Qinglang”)	3,513,506	The contracting fees haven’t been settled
VASF Company	4,878,866	The contracting fees haven’t been settled
Total	8,392,372	--

7.24 Non-current liabilities due within one year

Unit: Yuan

Item	Ending balance	Beginning balance
Long-term loans due within one year	146,362,314	118,940,788
Bonds payable due within one year
Long-term accounts payable due within one year	34,000,000	34,000,000
Lease liabilities due within one

Yantai Changyu Pioneer Wine Co., Ltd. 2019 Semi-annual Report

year
Total	180,362,314	152,940,788

7.25 Other current liabilities

Unit: Yuan

Item	Ending balance	Beginning balance
Short-term bonds payable
Refunds payable
Deferred income	14,545,254	15,860,254
Total	14,545,254	15,860,254

7.26 Long-term loans

7.26.1 Classification of long-term loans

Unit: Yuan

Item	Ending balance	Beginning balance
Pledge loan
Mortgage loan	3,529,655	3,924,916
Guaranteed loan	98,156,000	110,750,000
Fiduciary loan	64,263,595	41,805,746
Total	165,949,250	156,480,662

Description of the classification of long-term loans:

Unit: Yuan

Item

Ending balance

Long-term loan due within one year

Long-term loan due over one year

Pledge loan
Mortgage loan	6,616,377	3,086,722	3,529,655
Guaranteed loan	116,906,000	18,750,000	98,156,000
Fiduciary loan	188,789,187	124,525,592	64,263,595
Total	312,311,564	146,362,314	165,949,250

As at June 30, 2019, the guaranteed loan referred to the long-term loan of RMB 68,750,000Yuan borrowed by the Company for the R&D Company by means of credit guarantee(December 31, 2018: 81,250,000 Yuan), which was borrowed from Australia & New ZealandBanking by the Company for Kilikanoon Estate, Australia of AUD 10,000,000 (equivalent toRMB 48,156,000 Yuan) (December 31, 2018: 48,250,000 Yuan). The mortgage loan referredto the loan of EUR 678,868 (equivalent to RMB 5,306,710 Yuan) borrowed from PopularEspa?ol by Marques del Atrio by mortgaging its fixed assets of EUR 2,900,925 (equivalent toRMB 22,676,531 Yuan) (December 31, 2018: RMB 6,749,944 Yuan). Kilikanoon Estate,Australia borrowed a loan of AUD 271,963 (equivalent to RMB 1,309,667 Yuan) by pledgingits fixed assets of AUD 503,163 (equivalent to RMB 2,423,032 Yuan) from NAB bank(December 31, 2018: RMB 48,250,000 Yuan).

Yantai Changyu Pioneer Wine Co., Ltd. 2019 Semi-annual Report

7.27 Long-term accounts payable

7.27.1 Long-term accounts payable listed by nature

Unit: Yuan

Item	Ending balance	Beginning balance
China Agricultural Development Key Construction Fund	201,000,000	225,000,000
Total	201,000,000	225,000,000

In 2016, Agricultural Development Fund invested RMB 305,000,000 Yuan in the Research,Development & Manufacture Company, accounting for 37.9% of the registered capital.According to the investment agreement, it is agreed that Agricultural Development Fund willtake back the investment fund in ten years and obtain fixed income according to year, whichis 1.2% of the remaining principal. Except for the above fixed income, the AgriculturalDevelopment Fund shall not enjoy other profits of the Research, Development & ManufactureCompany or bear the losses of the Research, Development & Manufacture Company.Accordingly, the investment of the Agricultural Development Fund in the Research,Development & Manufacture Company is equity investment nominally, which is debtinvestment (finance discount interest loan) in deed. The Group included the investment of theAgricultural Development Fund in long-term accounts payable measured by amortized cost.From January to June 2019, the Group gave back the principal of RMB 24,000,000 Yuan.Refer to Note 7.51 for details of mortgaged and pledged assets.

Unit: Yuan

Balance of long-term accounts payable	Long-term accounts payable due within one year	Long-term accounts payable due in one year later
235,000,000	34,000,000	201,000,000

7.28 Deferred income

Unit: Yuan

Item	Beginning balance	Increase in this period	Decrease in this period	Ending balance	Forming reason
Governmental subsidy	86,227,293	4,465,398	12,096,542	78,596,149
Minus: Those included in current liabilities	15,860,254		1,315,000	14,545,254
Non-current liabilities	70,367,039	4,465,398	10,781,542	64,050,895	--

Projects related to governmental subsidy

Unit: Yuan

Yantai Changyu Pioneer Wine Co., Ltd. 2019 Semi-annual Report

Item of liabilities	Beginning balance	Amount of subsidy newly increased in this period	Amount included in non-operating revenue in this period	Amount included in other income in this period	Amount offset the cost expenses	Other changes	Ending balance	Related to assets/income
Grape bulk wine brewing project	3,304,500			717,450			2,587,050	Related to assets
Reward for investment in fixed assets of Chateau Shihezi project	6,996,600			1,140,000			5,856,600	Related to assets
Industrial revitalization and technical transformation project in Xinjiang	15,642,000			711,000			14,931,000	Related to assets
Special subsidy for supporting infrastructure	4,240,000			530,000			3,710,000	Related to assets
Tourism development fund subsidy project	500,000						500,000	Related to income
Construction project of grape brewing production capacity (Huanren)	3,200,000			200,000			3,000,000	Related to assets
Electronic traceability system project of wine	2,525,257			333,527			2,191,730	Related to assets
Wine industry development project	558,000			93,000			465,000	Related to assets
Peninsula blue economic zone construction project	6,000,000			1,000,000			5,000,000	Related to assets
Technical transformation project of information-based system construction engineering	2,900,000			290,000			2,610,000	Related to assets
Cross-border e-commerce project	880,256			67,114			813,142	Related to income
Fund for water pollution treatment project	206,530			56,801			149,729	Related to income
Infrastructure construction project	1,718,750			62,500			1,656,250	Related to assets
Supporting fund for industrial development	32,800,000			2,050,000			30,750,000	Related to assets
Subsidy for economic and energy-saving technical transformation project	1,026,400			64,150			962,250	Related to assets
Special fund for efficient water-saving irrigation project	1,639,000			81,000			1,558,000	Related to assets
Guiding fund for the development of service industry	2,000,000	4,200,000		4,700,000			1,500,000	Related to income
Subsidy for boiler	90,000						90,000	Related to income

Yantai Changyu Pioneer Wine Co., Ltd. 2019 Semi-annual Report

Item of liabilities	Beginning balance	Amount of subsidy newly increased in this period	Amount included in non-operating revenue in this period	Amount included in other income in this period	Amount offset the cost expenses	Other changes	Ending balance	Related to assets/income
renovation and demolition
Subsidy for mechanical development		265,398					265,398	Related to assets
Total	86,227,293	4,465,398		12,096,542			78,596,149
Minus: Those included in current liabilities	15,860,254			1,315,000			14,545,254
Non-current liabilities	70,367,039	4,465,398		10,781,542			64,050,895

7.29 Other non-current liabilities

Unit: Yuan

Item	Ending balance	Beginning balance
Employee remunerations payable	7,159,222	7,234,853
Total	7,159,222	7,234,853

As at June 30, 2019, the employee remunerations payable referred to the job security depositdeducted from the year-end bonus of the employees higher than sales manager of theCompany in proportion, which will be paid from 2020 to 2022 as predicted.

7.30 Share capital

Unit: Yuan

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

7.31 Capital reserves

Unit: Yuan

Item	Beginning balance	Increase in this period	Decrease in this period	Ending balance
Capital premium (Share capital premium)	560,038,853			560,038,853
Other capital reserves	5,916,588			5,916,588
Total	565,955,441			565,955,441

7.32 Other comprehensive income

Unit: Yuan

Yantai Changyu Pioneer Wine Co., Ltd. 2019 Semi-annual Report

Item	Beginning balance	Amount incurred in this period					Ending balance
		Amount incurred before income tax in this period	Minus: amount included in other comprehensive income before and transferred to profit or loss in this period	Minus: income tax expenses	Attributable to parent company after tax	Attributable to minority shareholders after tax
1. Other comprehensive income not to be reclassified into profit and loss later
Including: change in net liabilities and net assets from recalculated defined benefit plan
Share enjoyed in other comprehensive income not to be reclassified into profit and loss in invested unit under equity law
2. Other comprehensive income to be reclassified into profit and loss later	2,965,377	-4,657,291			-3,060,721	-1,596,570	-95,344
Including: share enjoyed in other comprehensive income to be reclassified into profit and loss in invested unit under equity law
Profit and loss from changes in fair value of financial assets for sale
Profit and loss from reclassification of held-to-maturity investment into fair value of financial assets for sale
Effective part of profit and loss of cash-flow hedge
Difference in translation of Foreign Currency Financial Statement	2,965,377	-4,657,291			-3,060,721	-1,596,570	-95,344
Total other comprehensive income	2,965,377	-4,657,291			-3,060,721	-1,596,570	-95,344

7.33 Surplus reserves

Unit: Yuan

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

7.34 Undistributed profit

Unit: Yuan

Yantai Changyu Pioneer Wine Co., Ltd. 2019 Semi-annual Report

Item	Ending balance	Beginning balance
Undistributed profit at the end of prior period before adjustment	8,008,982,547	7,309,081,618
Total Undistributed profit at the beginning of the period before adjustment (increase listed with+ , and decrease listed with -)	-3,278,942
Undistributed profit at the beginning of the period after adjustment	8,005,703,605	7,309,081,618
Plus: Net profit for owner of the parent company	603,403,789	1,042,632,929
Minus: Drawn legal surplus
Drawn free surplus
Drawn common risk provision
Common dividend payable	411,278,400	342,732,000
Common dividend transferred to share capital
Undistributed profit at the end of period	8,197,828,994	8,008,982,547

7.35 Operating income and operating cost

Unit: Yuan

Item	Amount incurred in this period		Amount incurred in prior period
	Income	Cost	Income	Cost
Main business	2,541,459,605	927,958,197	2,818,814,912	969,407,949
Other business	16,815,180	8,294,028	9,415,152	5,149,343
Total	2,558,274,785	936,252,225	2,828,230,064	974,557,292

7.36 Taxes and surcharges

Unit: Yuan

Item	Amount incurred in this period	Amount incurred in prior period
Consumption tax	68,699,658	97,343,463
Urban maintenance and construction tax	18,763,626	23,778,056
Education surcharges	13,670,717	17,417,976
Building tax	14,184,915	16,878,556
Land use tax	5,478,045	6,013,248
Stamp duty	1,504,356	2,247,814
Other	1,249,531	1,597,138
Total	123,550,848	165,276,251

7.37 Selling expenses

Unit: Yuan

Item	Amount incurred in this period	Amount incurred in prior period
Marketing expenses	268,185,487	326,942,076

Yantai Changyu Pioneer Wine Co., Ltd. 2019 Semi-annual Report

Employee remunerations	130,725,779	139,247,494
Transportation expenses	53,735,626	67,177,736
Trademark use fees		43,363,867
Storage and lease expenses	24,274,917	19,857,616
Depreciation expenses	20,476,637	21,735,895
Advertisement expenses	26,920,257	23,574,432
Conference expenses	8,945,999	9,319,883
Design & production expenses	2,365,761	2,457,300
Service charges	11,484,614	12,459,237
Travel expenses	11,822,548	10,886,711
Water, electricity and gas charges	7,697,325	7,166,936
Office & postage costs	2,801,706	2,349,806
Packing expenses	3,971,486	3,873,287
Public security & clean-keeping expenses	2,214,479	2,336,546
Business entertainment expenses	1,763,307	1,995,516
Other	14,584,873	15,914,695
Total	591,970,801	710,659,033

7.38 Management expenses

Unit: Yuan

Item	Amount incurred in this period	Amount incurred in prior period
Employee remunerations	62,572,295	60,660,238
Depreciation expenses	31,887,697	35,410,914
Contracting expenses	7,178,106	7,178,106
Repair expenses	8,253,897	7,076,148
Office expenses	10,177,651	10,977,189
Amortization expenses	7,677,849	9,520,182
Afforestation fees	7,682,946	6,493,556
Safe production costs	2,357,016	2,422,526
Rental expenses	4,766,202	5,061,778
Business entertainment expenses	2,631,383	2,815,060
Public security & clean-keeping expenses	3,356,435	3,953,646
Travel expenses	2,971,468	2,139,939
Other	4,039,367	4,255,600
Total	155,552,312	157,964,882

7.39 R&D expenses

Unit: Yuan

Item	Amount incurred in this period	Amount incurred in prior period
R&D expenses	2,706,811	2,127,006
Total	2,706,811	2,127,006

Yantai Changyu Pioneer Wine Co., Ltd. 2019 Semi-annual Report

7.40 Financial expenses

Unit: Yuan

Item	Amount incurred in this period	Amount incurred in prior period
Interest expenditure	9,812,560	18,739,528
Minus: Interest income	4,606,417	7,245,870
Plus: Commission charges	1,271,831	3,005,483
Exchange gain or loss	2,311,609	-1,413,199
Total	8,789,583	13,085,942

7.41 Other income

Unit: Yuan

Source of other income	Amount incurred in this period	Amount incurred in prior period
Supporting fund for industrial development	2,050,000	2,050,000
Industrial revitalization and technical transformation project in Ningxia		1,086,000
Reward for investment in fixed assets	1,140,000	1,140,000
Special fund for construction of peninsula blue economic zone	1,000,000	1,000,000
Other	3,082,627	4,012,100
Special fund for supporting corporate development	51,633,350	15,011,673
Other	5,305,915	13,683,105
Total	64,211,892	37,982,878

7.42 Loss on impairment of credit

Unit: Yuan

Item	Amount incurred in this period	Amount incurred in prior period
Loss on bad debts of accounts receivable	-765,935
Total	-765,935

7.43 Loss on impairment of assets

Unit: Yuan

Item	Amount incurred in this period	Amount incurred in prior period
1. Loss on bad debts
2. Inventory falling price loss	6,148,729	4,730,948
3. Loss on impairment of available-for-sale financial assets
4. Loss on impairment of held-to maturity investment
5. Loss on impairment of long-term equity investment
6. Loss on impairment of investment real estate
7. Loss on impairment of fixed assets
8. Loss on impairment of engineering materials
9. Loss on impairment of construction in progress

Yantai Changyu Pioneer Wine Co., Ltd. 2019 Semi-annual Report

Item	Amount incurred in this period	Amount incurred in prior period
10. Loss on impairment of productive biological assets
11. Loss on impairment of oil and gas assets
12. Loss on impairment of intangible assets
13. Loss on impairment of goodwill
14. Other
Total	6,148,729	4,730,948

7.44 Income from asset disposal

Unit: Yuan

Source of income from asset disposal	Amount incurred in this period	Amount incurred in prior period
Income from disposal of fixed assets	1,138	93,958
Total	1,138	93,958

7.45 Non-operating income

Unit: Yuan

Item	Amount incurred in this period	Amount incurred in prior period	Amount included in the current non-recurring profits/losses
Gains on debt recombination
Gains on exchange of non-monetary assets
Grains on donations
Governmental subsidy
Other	3,575,914	2,006,392	3,575,914
Total	3,575,914	2,006,392	3,575,914

7.46 Non-operating expenses

Unit: Yuan

Item	Amount incurred in this period	Amount incurred in prior period	Amount included in the current non-recurring profits/losses
Loss on debt recombination
Loss on exchange of non-monetary assets
Donation
Fine, penalty and overdue fine paid due to violation of laws and administrative regulations	10,811	1,187,713	10,811
Other	153,239	204,649	153,239
Total	164,050	1,392,362	164,050

Yantai Changyu Pioneer Wine Co., Ltd. 2019 Semi-annual Report

7.47 Income tax expenses

7.47.1 List of income tax expenses

Unit: Yuan

Item	Amount incurred in this period	Amount incurred in prior period
Current income tax expenses	161,779,976	178,993,081
Deferred income tax expenses	48,501,602	32,986,654
Total	210,281,578	211,979,735

7.47.2 Adjustment process of accounting profit and income tax expenses

Unit: Yuan

Item	Amount incurred in this period
Total profit	812,459,893
Income tax expenses calculated according to the legal/applicable tax rate	203,114,973
Influence of different tax rates applicable to subsidiary	-66,516
Influence of income tax in the term before adjustment	3,082,397
Influence of nontaxable income
Influence of non-deductible costs, expenses and losses	2,219,026
Influence of deductible loss from use of unconfirmed deferred income tax assets in prior period
Influence of deductible temporary difference or deductible loss of unconfirmed deferred income tax assets in this period	1,931,698
Income tax expense	210,281,578

7.48 Other comprehensive income

Refer to Note 7.32 for details.

7.49 Items of cash flow statement

7.49.1 Other cash received related to operating activities

Unit: Yuan

Item	Amount incurred in this period	Amount incurred in prior period
Governmental subsidy income	62,580,748	33,687,978
Interest income	2,835,438	3,302,294
Net amercement income	1,225,511	1,609,829
Other	1,143,923	3,742,920
Total	67,785,620	42,343,021

Yantai Changyu Pioneer Wine Co., Ltd. 2019 Semi-annual Report

7.49.2 Other cash paid related to operating activities

Unit: Yuan

Item	Amount incurred in this period	Amount incurred in prior period
Selling expenses	348,849,996	387,846,396
Administrative expenses	41,017,612	45,235,101
Other	2,912,859	3,895,589
Total	392,780,467	436,977,086

7.49.3 Other cash received related to financial activities

Unit: Yuan

Item	Amount incurred in this period	Amount incurred in prior period
Government subsidies received related to assets		3,150,000
Interest income from pledge of fixed deposits by the R&D Company		371,431
Long-term loans from pledge of fixed deposits by R&D Company		20,000,000
Total		23,521,431

7.49.4 Other cash paid related to financial activities

Unit: Yuan

Item	Amount incurred in this period	Amount incurred in prior period
R&D Company’ long-term loans pledged by fixed-term deposits		20,000,000
Total		20,000,000

7.50 Supplementary information to cash flow statement

7.50.1 Supplementary information to cash flow statement

Unit: Yuan

Supplementary materials	Amount incurred in this period	Amount incurred in prior period
1. Cash flows from operating activities calculated by adjusting the net profit:	--	--
Net profit	602,178,315	636,001,737
Plus: Provision for impairment of assets	-5,382,794	-4,730,948
Depreciation of fixed assets, oil-and-gas assets and productive biological assets	155,147,729	148,983,240
Depreciation of right-of-use assets
Amortization of intangible assets	8,438,742	11,567,301
Amortization of long-term deferred expenses	6,662,662	8,117,444
Losses on disposal of fixed assets, intangible assets and other long-term assets (profit listed with “－”)	-1,138	-93,958
Losses on retirement of fixed assets (profit listed with “－”)

Yantai Changyu Pioneer Wine Co., Ltd. 2019 Semi-annual Report

Supplementary materials	Amount incurred in this period	Amount incurred in prior period
Losses on fair value change (profit listed with “－”)
Financial costs (profit listed with “－”)	13,987,879	15,048,678
Investment losses (profit listed with “－”)
Decrease in deferred income tax assets (increase listed with “-”)	50,789,656	37,133,223
Increase of deferred income tax liabilities (decrease listed with “－”)	-3,381,035	-4,146,569
Decrease in inventories (increase listed with “-”)	123,958,750	216,486,236
Decrease in operating receivables (increase listed with “-”)	-172,662,167	-305,623,146
Increase in operating payable (decrease listed with “-”)	-280,260,593	-205,989,766
Other
Net cash flows from operating activities	499,476,006	552,753,472
2. Significant investment and financing activities not involving cash deposit and withdrawal:	--	--
Debt transferred into assets
Convertible corporate bond due within 1 year
Fixed assets under financing lease
3. Net changes of cash and cash equivalent:	--	--
Ending balance of cash	1,573,727,077	1,428,670,462
Minus: Beginning balance of cash	1,206,860,334	1,180,889,274
Plus: Ending balance of cash equivalent
Minus: Beginning balance of cash equivalent
Net increase amount of cash and cash equivalent	366,866,743	247,781,188

7.50.2 Composition of cash and cash equivalents

Unit: Yuan

Item	Ending balance	Beginning balance
1. Cash	1,573,727,077	1,428,670,462
Including: Cash on hand	70,198	151,228
Bank deposits on demand	1,573,656,879	1,428,519,234
Other monetary capital on demand
Due from central bank available for payment
Due from the industry
Inter-bank lending
2. Cash equivalents
Including: Bond investment due within three months
3. Balance of cash and cash equivalents at the end of period	1,573,727,077	1,428,670,462
Including: Restricted use of parent company or subsidiaries in the group

7.51 Assets with ownership or use right restrictions

Unit: Yuan

Item

Ending book value

Reason for restriction

Yantai Changyu Pioneer Wine Co., Ltd. 2019 Semi-annual Report

Monetary capital	94,466,626	Loan deposit, L/C deposit, frozen balance of Alipay, housing fund and guaranty money for deposit in unit card
Accounts receivable	31,134,017	Pledge of short-term loans
Fixed assets	353,013,613	Pledge of short-term loans, long-term loans and long-term accounts payable
Intangible assets	215,282,924	Pledge of long-term accounts payable
Total	693,897,180	--

7.52 Foreign currency monetary items

7.52.1 Foreign currency monetary items

The foreign currency monetary items of the Group in domestic entities of China are listed asfollows:

Unit: Yuan

Item	Ending foreign currency balance	Translation exchange rate	Ending converted RMB balance
Monetary capital	--	--	46,815,034
Including: USD	6,805,498	6.8747	46,785,757
EUR	2,901	7.817	22,677
HKD	7,503	0.8797	6,600

7.52.2 Overseas operational entities

The currency adopted by the overseas subsidiaries of the Company according to the maineconomic environment where the operation is located shall be chosen as the recordingcurrency. Marques del Atrio and Francs Champs Participations SAS (“Francs Champs”) bothuse euro as the recording currency, Indomita Wine Company Chile, SpA uses Chilean peso asthe recording currency, and Kilikanoon Estate, Australia uses Australian dollar as therecording currency. The foreign currency assets or liabilities of overseas subsidiaries are listedas follows:

Unit: Yuan

Item	Ending foreign currency balance	Translation exchange rate	Ending converted RMB balance
Monetary capital	--	--	3,553,711
Including: USD	516,926	6.8747	3,553,711
EUR
HKD
Short-term loans	--	--	75,621,700
Including: USD	11,000,000	6.8747	75,621,700
EUR
HKD

8. Changes in scope of consolidation

Nil

Yantai Changyu Pioneer Wine Co., Ltd. 2019 Semi-annual Report

9. Equity in other entities

9.1 Equity in the subsidiaries

9.1.1 Constitution of enterprise group

Name of subsidiary	Principal business location	Registration place	Business nature	Proportion of shareholding		Acquisition mode
				Direct	Indirect
Xinjiang Tianzhu (a)	Shihezi City, Xinjiang Uygur Autonomous Region, China	Shihezi City, Xinjiang Uygur Autonomous Region, China	Manufacturing industry	60%		Acquired from a business combination under non-common control
Roullet Fransac	Cognac, France	Cognac, France	Trading		100%	Acquired from a business combination under non-common control
Mirefleurs	Bordeaux, France	Bordeaux, France	Trading		100%	Acquired from a business combination under non-common control
Marques del Atrio	Navarra, Spain	Navarra, Spain	Sales	75%		Acquired from a business combination under non-common control
Indomita Wine	Santiago, Chile	Santiago, Chile	Sales	85%		Acquired by establishment or investment
Kilikanoon Estate, Australia	Adelaide, Australia	Adelaide, Australia	Sales	80%		Acquired from a business combination under non-common control
Beijing Changyu Wine Marketing Co., Ltd. (“Beijing Marketing”)	Beijing City, China	Beijing City, China	Sales	50%	50%	Acquired by establishment or investment
Yantai Kylin Packaging Co., Ltd. (“Kylin Packaging”)	Yantai City, Shandong Province, China	Yantai City, Shandong Province, China	Manufacturing industry	100%		Acquired by establishment or investment
Yantai Chateau Changyu-Castel Co., Ltd. (“Chateau Changyu”) (b)	Yantai City, Shandong Province, China	Yantai City, Shandong Province, China	Manufacturing industry	70%		Acquired by establishment or investment
Changyu (Jingyang) Pioneer Wine Co., Ltd. (“Jingyang Wine”)	Xianyang City, Shaanxi Province, China	Xianyang City, Shaanxi Province, China	Manufacturing industry	100%		Acquired by establishment or investment
Yantai Changyu Pioneer Wine Sales Co., Ltd. (“Sales Company”)	Yantai City, Shandong Province, China	Yantai City, Shandong Province, China	Sales	100%		Acquired by establishment or investment
Langfang Development Zone Castel-Changyu Wine Co., Ltd. (“Langfang Castel”) (c)	Langfang City, Hebei Province, China	Langfang City, Hebei Province, China	Manufacturing industry	39%	10%	Acquired by establishment or investment
Changyu (Jingyang) Pioneer Wine Sales Co., Ltd. (“Jingyang Sales”)	Xianyang City, Shaanxi Province, China	Xianyang City, Shaanxi Province, China	Sales	100%		Acquired by establishment or investment
Langfang Changyu Pioneer Wine Sales Co., Ltd. (“Langfang Sales”)	Langfang City, Hebei Province, China	Langfang City, Hebei Province, China	Sales	100%		Acquired by establishment or investment
Shanghai Changyu Wine Marketing Co., Ltd. (“Shanghai Marketing”)	Shanghai City, China	Shanghai City, China	Sales	30%	70%	Acquired by establishment or investment
Beijing Changyu AFIP Eco-agriculture Development Co., Ltd. (“Eco-agriculture Development”)	Miyun County, Beijing City, China	Miyun County, Beijing City, China	Sales		100%	Acquired by establishment or investment
Beijing Changyu AFIP Wine Chateau Co., Ltd. (“Beijing Chateau”) (d)	Beijing City, China	Beijing City, China	Manufacturing industry	90%		Acquired by establishment or investment
Yantai Changyu Wine Sales Co., Ltd. ( “Wine Sales”)	Yantai City, Shandong Province, China	Yantai City, Shandong Province, China	Sales	90%	10%	Acquired by establishment or investment

Yantai Changyu Pioneer Wine Co., Ltd. 2019 Semi-annual Report

Name of subsidiary	Principal business location	Registration place	Business nature	Proportion of shareholding		Acquisition mode
				Direct	Indirect
Yantai Changyu Pioneer International Wine Co., Ltd. (“Pioneer International”)	Yantai City, Shandong Province, China	Yantai City, Shandong Province, China	Sales	70%	30%	Acquired by establishment or investment
Hangzhou Changyu Wine Sales Co., Ltd. (“Hangzhou Changyu”)	Hangzhou City, Zhejiang Province, China	Hangzhou City, Zhejiang Province, China	Sales		100%	Acquired by establishment or investment
Ningxia Growing	Yinchuan City, Ningxia Hui Autonomous Region, China	Yinchuan City, Ningxia Hui Autonomous Region, China	Planting industry	100%		Acquired by establishment or investment
Huanren Changyu National Wine Sales Co., Ltd. (“National Wine”)	Benxi City, Liaoning Province, China	Benxi City, Liaoning Province, China	Sales	100%		Acquired by establishment or investment
Liaoning Changyu Icewine Valley Co., Ltd. (“Icewine Valley”) (e)	Benxi City, Liaoning Province, China	Benxi City, Liaoning Province, China	Manufacturing industry	51%		Acquired by establishment or investment
Yantai Development Zone Changyu Trading Co., Ltd. (“Development Zone Trading”)	Yantai City, Shandong Province, China	Yantai City, Shandong Province, China	Sales		100%	Acquired by establishment or investment
Shenzhen Changyu Wine Marketing Co., Ltd. (“Shenzhen Marketing”)	Shenzhen City, Guangdong Province, China	Shenzhen City, Guangdong Province, China	Sales		100%	Acquired by establishment or investment
Yantai Fushan District Changyu Trading Co., Ltd. (“Fushan Trading”)	Yantai City, Shandong Province, China	Yantai City, Shandong Province, China	Sales		100%	Acquired by establishment or investment
Beijing Changyu AFIP International Conference Center Co., Ltd. (“Conference Center”)	Miyun County, Beijing City, China	Miyun County, Beijing City, China	Service industry		100%	Acquired by establishment or investment
Beijing Changyu AFIP Tourism and Culture Co., Ltd. (“AFIP Tourism”)	Miyun County, Beijing City, China	Miyun County, Beijing City, China	Tourist industry		100%	Acquired by establishment or investment
Ningxia Wine	Yinchuan City, Ningxia Hui Autonomous Region, China	Yinchuan City, Ningxia Hui Autonomous Region, China	Manufacturing industry	100%		Acquired by establishment or investment
Yantai Changyu Chateau Tinlot Co., Ltd. (“Chateau Tinlot”)	Yantai City, Shandong Province, China	Yantai City, Shandong Province, China	Wholesale and retail	65%	35%	Acquired by establishment or investment
Changyu (Qingtongxia) Wine Sales Co., Ltd. (“Qingtongxia Sales”)	Qingtongxia City, Ningxia Hui Autonomous Region, China	Qingtongxia City, Ningxia Hui Autonomous Region, China	Sales		100%	Acquired by establishment or investment
Shihezi Chateau	Shihezi City, Xinjiang Uygur Autonomous Region, China	Shihezi City, Xinjiang Uygur Autonomous Region, China	Manufacturing industry	100%		Acquired by establishment or investment
Ningxia Chateau	Yinchuan City, Ningxia Hui Autonomous Region, China	Yinchuan City, Ningxia Hui Autonomous Region, China	Manufacturing industry	100%		Acquired by establishment or investment
Chateau Changyu Rena Shaanxi Co., Ltd. (“Chang’an Chateau”)	Xianyang City, Shaanxi Province, China	Xianyang City, Shaanxi Province, China	Manufacturing industry	100%		Acquired by establishment or investment
Research, Development & Manufacture Company (f)	Yantai City, Shandong Province, China	Yantai City, Shandong Province, China	Manufacturing industry	68%		Acquired by establishment or investment
Changyu (Huanren) Pioneer Wine Co., Ltd. (“Huanren Wine”)	Benxi City, Liaoning Province, China	Benxi City, Liaoning Province, China	Wine-making project preparation	100%		Acquired by establishment or investment
Xinjiang Changyu Wine Sales Co., Ltd. (“Xinjiang Sales”)	Xinjiang Uygur Autonomous Region, China	Xinjiang Uygur Autonomous Region, China	Sales		100%	Acquired by establishment or investment
Ningxia Changyu Trading Co., Ltd. (“Ningxia Trading”)	Yinchuan City, Ningxia Hui Autonomous Region, China	Yinchuan City, Ningxia Hui Autonomous Region, China	Sales		100%	Acquired by establishment or investment
Shaanxi Changyu Rena Wine Sales Co., Ltd. (“Shaanxi Sales”)	Xianyang City, Shaanxi Province, China	Xianyang City, Shaanxi Province, China	Sales		100%	Acquired by establishment or investment

Yantai Changyu Pioneer Wine Co., Ltd. 2019 Semi-annual Report

Name of subsidiary	Principal business location	Registration place	Business nature	Proportion of shareholding		Acquisition mode
				Direct	Indirect
Penglai Changyu Wine Sales Co., Ltd. (“Penglai Wine”)	Penglai City, Shandong Province, China	Penglai City, Shandong Province, China	Sales		100%	Acquired by establishment or investment
Laizhou Changyu Wine Sales Co., Ltd. (“Laizhou Sales”)	Laizhou City, Shandong Province, China	Laizhou City, Shandong Province, China	Sales		100%	Acquired by establishment or investment
Francs Champs Participations SAS	Cognac, France	Cognac, France	Investment trade	100%		Acquired by establishment or investment
Lanzhou Changyu Wine Marketing Co., Ltd. (“Lanzhou Marketing”)	Lanzhou City, Gansu Province, China	Lanzhou City, Gansu Province, China	Sales		100%	Acquired by establishment or investment
Beijing Changyu Trading Co., Ltd. (“Beijing Trading”)	Beijing City, China	Beijing City, China	Sales		100%	Acquired by establishment or investment
Tianjin Changyu Pioneer Wine Sales Co., Ltd. (“Tianjin Pioneer”)	Tianjin City, China	Tianjin City, China	Sales		100%	Acquired by establishment or investment
Fuzhou Changyu Pioneer Wine Co., Ltd. (“Fuzhou Pioneer”)	Fuzhou City, Fujian Province, China	Fuzhou City, Fujian Province, China	Sales		100%	Acquired by establishment or investment
Nanjing Changyu Pioneer Wine Co., Ltd. (“Nanjing Pioneer”)	Nanjing City, Jiangsu Province, China	Nanjing City, Jiangsu Province, China	Sales		100%	Acquired by establishment or investment
Xianyang Changyu Pioneer Wine Sales Co., Ltd. (“Xianyang Pioneer”)	Xianyang City, Shaanxi Province, China	Xianyang City, Shaanxi Province, China	Sales		100%	Acquired by establishment or investment
Shenyang Changyu Pioneer Wine Co., Ltd. (“Shenyang Pioneer”)	Shenyang City, Liaoning Province, China	Shenyang City, Liaoning Province, China	Sales		100%	Acquired by establishment or investment
Jinan Changyu Pioneer Wine Co., Ltd. (“Jinan Pioneer”)	Jinan City, Shandong Province, China	Jinan City, Shandong Province, China	Sales		100%	Acquired by establishment or investment
Shanghai Changyu Pioneer Wine Co., Ltd. (“Shanghai Pioneer”)	Shanghai City, China	Shanghai City, China	Sales		100%	Acquired by establishment or investment
Fuzhou Changyu Pioneer Wine Co., Ltd. (“Fuzhou Pioneer”)	Fuzhou City, Jiangxi Province, China	Fuzhou City, Jiangxi Province, China	Sales		100%	Acquired by establishment or investment
Shijiazhuang Changyu Pioneer Wine Sales Co., Ltd. (“Shijiazhuang Pioneer”)	Shijiazhuang City, Hebei Province, China	Shijiazhuang City, Hebei Province, China	Sales		100%	Acquired by establishment or investment
Hangzhou Yuzefeng Trading Co., Ltd. (“Hangzhou Yuzefeng”)	Hangzhou City, Zhejiang Province, China	Hangzhou City, Zhejiang Province, China	Sales		100%	Acquired by establishment or investment
Jilin Changyu Pioneer Wine Co., Ltd. (“Jilin Pioneer”)	Changchun City, Jilin Province, China	Changchun City, Jilin Province, China	Sales		100%	Acquired by establishment or investment
Beijing Changyu Pioneer Wine Sales Co., Ltd. (“Beijing Pioneer”)	Beijing City, China	Beijing City, China	Sales		100%	Acquired by establishment or investment
Harbin Changyu Pioneer Wine Sales Co., Ltd. (“Harbin Pioneer”)	Harbin City, Heilongjiang Province, China	Harbin City, Heilongjiang Province, China	Sales		100%	Acquired by establishment or investment
Hunan Changyu Pioneer Wine Co., Ltd. (“Hunan Pioneer”)	Changsha City, Hunan Province, China	Changsha City, Hunan Province, China	Sales		100%	Acquired by establishment or investment
Yinchuan Changyu Pioneer Wine Co., Ltd. (“Yinchuan Pioneer”)	Yinchuan City, Ningxia Hui Autonomous Region, China	Yinchuan City, Ningxia Hui Autonomous Region, China	Sales		100%	Acquired by establishment or investment
Kunming Changyu Pioneer Wine Co., Ltd. (“Kunming Pioneer”)	Kunming City, Yunnan Province, China	Kunming City, Yunnan Province, China	Sales		100%	Acquired by establishment or investment
Chongqing Changyu	Chongqing City, China	Chongqing City, China	Sales		100%	Acquired by

Yantai Changyu Pioneer Wine Co., Ltd. 2019 Semi-annual Report

Name of subsidiary	Principal business location	Registration place	Business nature	Proportion of shareholding		Acquisition mode
				Direct	Indirect
Pioneer Wine Sales Co., Ltd. (“Chongqing Pioneer”)						establishment or investment
Wuhan Changyu Pioneer Wine Co., Ltd. (“Wuhan Pioneer”)	Wuhan City, Hubei Province, China	Wuhan City, Hubei Province, China	Sales		100%	Acquired by establishment or investment
Hohhot Changyu Pioneer Wine Co., Ltd. (“Hohhot Pioneer”)	Hohhot City, Inner Mongolia Autonomous Region , China	Hohhot City, Inner Mongolia Autonomous Region , China	Sales		100%	Acquired by establishment or investment
Chengdu Changyu Pioneer Wine Co., Ltd. (“Chengdu Pioneer”)	Chengdu City, Sichuan Province, China	Chengdu City, Sichuan Province, China	Sales		100%	Acquired by establishment or investment
Nanning Changyu Pioneer Wine Co., Ltd. (“Nanning Pioneer”)	Nanning City, Guangxi Zhuang Autonomous Region, China	Nanning City, Guangxi Zhuang Autonomous Region, China	Sales		100%	Acquired by establishment or investment
Lanzhou Changyu Pioneer Wine Co., Ltd. (“Lanzhou Pioneer”)	Lanzhou City, Gansu Province, China	Lanzhou City, Gansu Province, China	Sales		100%	Acquired by establishment or investment
Yantai Roullet-Fransac Imported Wine Sales Co., Ltd. (“Yantai Roullet-Fransac”)	Yantai City, Shandong Province, China	Yantai City, Shandong Province, China	Sales		100%	Acquired by establishment or investment
Hefei Changyu Pioneer Wine Co., Ltd. (“Hefei Pioneer”)	Hefei City, Anhui Province, China	Hefei City, Anhui Province, China	Sales		100%	Acquired by establishment or investment
Urumchi Changyu Pioneer Wine Co., Ltd. (“Urumchi Pioneer”)	Urumchi City, Xinjiang Uygur Autonomous Region, China	Urumchi City, Xinjiang Uygur Autonomous Region, China	Sales		100%	Acquired by establishment or investment
Guangzhou Changyu Pioneer Wine Co., Ltd. (“Guangzhou Pioneer”)	Guangzhou City, Guangdong Province, China	Guangzhou City, Guangdong Province, China	Sales		100%	Acquired by establishment or investment
Wine Sales Co., Ltd.	Yantai City, Shandong Province, China	Yantai City, Shandong Province, China	Sales	100%		Acquired by establishment or investment

Explanation for difference between the proportion of shareholding and proportion of voting powerin the subsidiaries:

(a) Xinjiang Tianzhu is a subsidiary of the Company obtained by merger and acquisition,whose 60% of the shares are held by the Company. The Company exercises full control overthe operation, investment and financing policies of Xinjiang Tianzhu by contract arrangement.This contract arrangement was expired on August 6, 2017. After the expiration, the minorityshareholders of Xinjiang Tianzhu shall enjoy/bear all rights/duties of shareholders specified inthe Articles of Association.

(b) Changyu Chateau is a Sino-foreign joint venture established by the Company and aforeign investor, whose 70% of the shares are held by the Company. The Company exercisesfull control over the operation, investment and financing policies of Changyu Chateau bycontract arrangement. The contract arrangement will expire on December 31, 2022.

(c) Langfang Castel is a Sino-foreign joint venture established by the Company and a foreigninvestor, whose 49% of the shares are held by the Company and its subsidiaries. TheCompany exercises full control over the operation, investment and financing policies ofLangfang Castel by contract arrangement. The contract arrangement expired on December 31,2017. After the expiration of the contract arrangement, the minority shareholders of LangfangCastel normally enjoy/undertake all rights/duties of the shareholders agreed in the Articles of

Yantai Changyu Pioneer Wine Co., Ltd. 2019 Semi-annual Report

Association of the Company.

(d) Beijing Chateau is a limited liability company jointly established by the Company andYantai De’an and Beijing Qinglang, in which the Company holds 90% of the shares. TheCompany exercises full control over the operation, investment and financing policies ofBeijing Chateau by contract arrangement. The contract arrangement will expire on September2, 2019.

(e) Icewine Valley is a Sino-foreign joint venture established by the Company and a foreigninvestor, whose 51% of the shares are held by the Company. The Company exercises fullcontrol over the operation, investment and financing policies of Icewine Valley by contractarrangement. The contract arrangement will expire on December 31, 2021.

(f) The Research, Development & Manufacture Company is a joint venture established by theCompany and Agricultural Development Fund, whose 68% of the shares were held by theCompany on June 30, 2019. As stated in Note 7.27, the Company exercises full control overthe operation, investment and financing policies of the Research, Development &Manufacture Company by contract arrangement. The contract arrangement will expire onMay 22, 2026. Up to June 30, 2019, the remaining investment of the AgriculturalDevelopment Fund accounted for 32% of the registered capital.

9.1.2 Important non-wholly-owned subsidiaries

Unit: Yuan

Name of subsidiary	Shareholding proportion of minority shareholders	Profit/loss attributable to minority shareholders in this period	Dividend declared to be distributed to minority shareholders in this period	Balance of minority shareholder’s interest at the end of period
Xinjiang Tianzhu	40%	-1,200,628		49,412,020
Marques del Atrio	25%	464,844	1,367,975	29,878,944
Changyu Chateau	30%			12,365,016
Langfang Castel	51%	-752,237		20,175,744
Beijing Chateau	10%			65,133,868
Icewine Valley	49%			33,319,062
Indomita Wine	15%	564,376		53,709,304
Kilikanoon Estate, Australia	20%	-301,829		16,204,035

Explanation for difference between the proportion of shareholding and proportion of votingpower of the minority shareholders in the subsidiaries: See details in Note 9.1.1.

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

Unit: Yuan

Yantai Changyu Pioneer Wine Co., Ltd. 2019 Semi-annual Report

Name of subsidiary	Ending balance						Beginning balance
	Current assets	Non-current assets	Total assets	Current liabilities	Non-current liabilities	Total liabilities	Current assets	Non-current assets	Total assets	Current liabilities	Non-current liabilities	Total liabilities
Xinjiang Tianzhu	26,891,774	64,187,998	91,079,771	-169,932	5,336,114	5,166,181	27,390,495	66,486,795	93,877,290		5,336,114	5,336,114
Changyu Chateau	126,947,614	113,877,340	240,824,954	163,176,906		163,176,906	141,298,023	114,694,168	255,992,191	171,869,662		171,869,662
Langfang Castel	16,966,616	15,672,549	32,639,165	4,033,546		4,033,546	17,659,511	16,001,682	33,661,193	3,358,322		3,358,322
Beijing Chateau	228,256,490	458,433,952	686,690,442	45,912,267		45,912,267	219,973,582	461,115,089	681,088,671	62,598,545		62,598,545
Icewine Valley	61,748,346	23,105,860	84,854,207	31,627,378	100,000	31,727,378	45,194,591	23,920,890	69,115,481	14,974,458	100,000	15,074,458
Marques del Atrio	407,617,465	92,937,395	500,554,860	304,115,810	72,890,389	377,006,198	464,421,130	99,080,668	563,501,798	381,659,315	54,520,937	436,180,252
Indomita Wine	210,503,095	295,300,215	505,803,310	138,985,158	4,861,038	143,846,196	214,784,490	300,969,342	515,753,832	148,359,328	4,976,161	153,335,489
Kilikanoon Estate, Australia	82,656,715	64,415,130	147,071,845	12,813,137	52,227,853	65,040,990	87,634,707	63,759,866	151,394,573	13,387,942	51,893,171	65,281,113

Unit: Yuan

Name of subsidiary	Amount incurred in this period				Amount incurred in prior period
	Operating income	Net profit	Total comprehensive income	Operating cash flow	Operating income	Net profit	Total comprehensive income	Operating cash flow
Xinjiang Tianzhu		-3,001,571	-1,297,212	-417,462	18,803	-184,572	-184,572	10,284,801
Changyu Chateau	24,470,842	-2,189,871	-686,874	6,946,282	43,226,910	2,861,474	2,861,474	2,419,427
Langfang Castel		-1,474,975	-821,013	25,801	5,038,281	-1,952,954	-1,952,954	-4,435,022
Beijing Chateau	90,339,526.00	12,711,985	22,752,823	9,667,568	78,502,666	15,243,700	15,243,700	12,282,145
Icewine Valley	19,763,387.00	-1,986,710	-754,056	1,903,734	27,305,133	905,396	905,396	2,018,740
Marques del Atrio	129,064,457	1,859,381	-4,084,674	-23,846,960	148,197,893	1,214,012	-929,332	-21,783,821
Indomita Wine	86,818,838	3,762,504	1,880,687	-1,725,571	93,719,341	-281,859	-4,460,814	-7,723,684
Kilikanoon Estate, Australia	22,852,809	-1,509,147	-4,011,458	1,024,962	25,904,401	-115,317	-3,779,883	-1,469,903

10. Risks related to financial instruments

The main financial instruments of the Group include monetary capital, bills receivable, accountsreceivable, receivables financing, other receivables, other non-current financial assets, short-termloans, non-current liabilities due within one year, accounts payable, other payables, long-termaccounts payable and long-term loans, etc. Please refer to Note 7 for details of each financialinstruments. The risks related to these financial instruments and risk management policies adopted bythe Group to reduce these risks are shown as follows. The management of the Group manages andmonitors these risk exposures to ensure that the above-mentioned risks are controlled within a defined

Yantai Changyu Pioneer Wine Co., Ltd. 2019 Semi-annual Report

scope.The Group adopts sensitivity analysis techniques to analyze the possible influence of possiblereasonable changes of risk variables on the current profits and losses and shareholders’ equity. Sinceany risk variable merely changes independently and the final influence of relevance between variableson the change of certain risk variable will exert a great effect, the following content is carried outunder the hypothesis that each variable changes independently.The risk management objective of the Group is to achieve proper balance between risks and benefits,to minimize the negative influence of the risks on the business performance of the Group and tomaximize the shareholders’ benefit. Based on this risk management objective, the basic riskmanagement strategy of the Group is to determine and analyze various risks faced by the Group, to setup proper risk tolerance bottom line and to carry out risk management, and to supervise various riskstimely and reliably to control the risks within a defined scope.

10.1 Risk management objective and policy

10.1.1 Market risk

① Foreign exchange risk

Foreign exchange risk refers to the risk that causes loss due to exchange rate fluctuation. The foreignexchange risk borne by the Group is mainly relevant to EUR and USD. Except that the overseassubsidiaries of the Group purchase and sell in EUR, Chilean peso and AUD, which borrow in USD,and domestic subsidiaries deposit in EUR and USD, other main business activities of the Group arepriced and settled in RMB. As at June 30, 2019, except that the assets and liabilities mentioned in thetable below were the balance of deposits or loans shown in foreign currencies, other assets andliabilities of the entities of the Group were settled in their respective functional currencies.

Unit: Yuan

Item	Ending balance	Beginning balance
Monetary capital (EUR)	22,677	199,753
Monetary capital (USD)	50,339,468	51,283,910
Short-term loans (USD)	75,621,700	75,495,200

The foreign exchange risk caused by the assets and liabilities of such foreign currency balance mayexert an influence on the business performance of the Group. The Group pays close attention to theinfluence of exchange rate fluctuation on the foreign exchange risk of the Group. The Group has nottaken any measures to avoid the foreign exchange risk at present.

Sensitivity analysis of foreign exchange risk

Yantai Changyu Pioneer Wine Co., Ltd. 2019 Semi-annual Report

With the other variables unchanged, the pre-tax influence of possible reasonable exchange ratefluctuation on current profit and loss and shareholders’ equity is shown as follows:

Domestic entities:

Unit: Yuan

Item	Exchange rate fluctuation	This period
		Influence on profit in this period	Influence on shareholders’ equity
EUR	5% appreciation against RMB	1,134	1,134
EUR	5% depreciation against RMB	-1,134	-1,134
USD	5% appreciation against RMB	2,339,288	2,339,288
USD	5% depreciation against RMB	-2,339,288	-2,339,288

Overseas entities:

Unit: Yuan

Item	Exchange rate fluctuation	This period
		Influence on profit in this period	Influence on shareholders’ equity
USD	5% appreciation against EUR	10,250	10,250
USD	5% depreciation against EUR	-10,250	-10,250
USD	10% appreciation against CLP	-115,086	-115,086
USD	10% depreciation against CLP	115,086	115,086

Note: As at June 30, 2019, the management of the Group predicted that EUR and USD exchange rateagainst RMB, and USD exchange rate against EUR changed by 5%; and USD exchange rate againstCLP changed by 15%.

② Interest rate risk – risk of change in cash flow

The risk of change in cash flow of financial instruments caused by interest rate change of the Group ismainly relevant to the monetary capital and bank loan at floating interest rate. The policy of the Groupis to maintain the floating interest rate of these loans to eliminate the risk of change in fair value of theinterest rate.

Sensitivity analysis of interest rate riskSensitivity analysis of interest rate risk is based on the hypothesis that the change in market interestrate influences the interest income or expense of financial instruments at variable rate.

The management of the Group thinks that the interest rate risk of deposit in bank borne by the Groupis not significant, and therefore the sensitivity analysis of interest rate of deposit in bank is notdisclosed here.

Yantai Changyu Pioneer Wine Co., Ltd. 2019 Semi-annual Report

On the basis of the above-mentioned hypothesis, with the other variables unchanged, the pre-taxinfluence of possible reasonable exchange rate fluctuation on current profit and loss and shareholders’equity is as follows:

Unit: Yuan

Item	Interest rate change	This period
		Influence on profit of this period	Influence on shareholders’ equity
Bank loan	Increase by 50 BP	-323,958	-323,958
Bank loan	Decrease by 50 BP	323,958	323,958

Note: As at June 30, 2019, the management of the Group predicted that the bank floating rate changedby 50 basis points

10.1.2 Credit risk

As at June 30, 2019, the largest credit risk exposure possibly causing the financial loss of theGroup was mainly caused by the loss generated by the financial assets of the Group due tofailure of another party of the contract in fulfilling obligations.

To lower the credit risk, the Group only trades with the recognized and reputable third party.In accordance with the policy of the Group, credit check shall be carried out for all customerswho transact by means of credit. In addition, the Group conducts continuous monitoring onthe balance of accounts receivable to ensure that the Group will not face major risk of baddebts. For transactions not settled with recording currency of relevant business units, unlessthe credit control department of the Group specially approves, the Group will not providecredit trade terms. In addition, the Group audits the collection of each single significantaccount receivable on each date of balance sheet to ensure that sufficient bad-debt provision isaccrued for accounts unable to be collected. Therefore, the management of the Group thinksthe credit risk borne by the Group is greatly reduced.

Since the Group only trades with the recognized and reputable third party, no collateral isrequired. The credit risk is managed centrally according to the customer/counter-party,geographic area and industry. As at June 30, 2019, 18.3% of accounts receivable of the Groupcame from top five borrowers in accounts receivable of the Group (December 31, 2018:

19.8%). The Group holds no collateral or other credit enhancement for the balance ofaccounts receivable.

Yantai Changyu Pioneer Wine Co., Ltd. 2019 Semi-annual Report

10.1.3 Liquidity risk

When managing the liquidity risk, the Group reserves and monitors the cash and cashequivalents the management considers sufficient to satisfy the operation need of the Groupand reduce the influence of fluctuation in cash flow. The management of the Group monitorsthe use of bank loans and ensures to abide by the loan agreement.

11. Related parties and related transactions

11.1 Particulars of the parent company of the Company

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

From January to June 2019, there was no fluctuation in the registered capital of the parentcompany and its share in equity interest and voting right.

11.2 Particulars of the subsidiaries of the Company

See particulars of the subsidiaries of the Company in Note 9.

11.3 Particulars of other related parties

Name of other related parties	Relationship between other related parties and the Company
Yantai Changyu Wine Culture Museum Co., Ltd. (“Wine Culture Museum”)	A company controlled by the same parent company
Yantai Changyu Window of International Wine City Co. Ltd. (“Window of Wine City”)	A company controlled by the same parent company
Yantai God Horse Packing Co., Ltd. (“God Horse Packing”)	A company controlled by the same parent company
Yantai Zhongya Medical Health Wine Co., Ltd. (“Zhongya Medical”)	A company controlled by the same parent company
Yantai Changyu Cultural Tourism Product Sales Co., Ltd. (“Cultural Sales”)	A company controlled by the same parent company
Yantai Changyu Cultural Tourism Development Co., Ltd. (“Cultural Development”)	A company controlled by the same parent company

Yantai Changyu Pioneer Wine Co., Ltd. 2019 Semi-annual Report

11.4 Related transactions

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

Unit: Yuan

Related parties	Related transactions	Amount incurred in this period	Approved transaction amount	Exceeding the transaction amount or not	Amount incurred in prior period
God Horse Packing	Purchasing goods	74,970,845			95,990,354
Zhongya Medical	Purchasing goods	2,970,007			6,037,893
Wine Culture Museum	Purchasing goods	7,324,199			9,475,159
Window of Wine City	Purchasing goods	6,853,112			2,857,130
Cultural Sales	Purchasing goods	65,907
Cultural Development	Purchasing goods	40,458

List of selling goods/providing services

Unit: Yuan

Related parties	Related transactions	Amount incurred in this period	Amount incurred in prior period
Wine Culture Museum	Selling goods	3,377,011	13,889,017
Window of Wine City	Selling goods	3,891,101	8,773,612
Zhongya Medical	Selling goods	2,559,870	2,203,629
God Horse Packing	Selling goods	3,520	15,742
Cultural Sales	Selling goods	3,873,204
Cultural Development	Selling goods	1,847,727	220,759

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

11.4.2 Related trusteeship/contracting and mandatory administration/outsourcing

Nil

Yantai Changyu Pioneer Wine Co., Ltd. 2019 Semi-annual Report

11.4.3 Leasing with related parties

The Company as a lessor:

Unit: Yuan

Name of the lessee	Type of leased assets	Rental income recognized in this period	Rental income recognized in prior period
God Horse Packing	Office building and plant	742,883	739,491
Window of Wine City	Office building	488,595	486,364
Zhongya Medical	Office building	260,279	259,091

The Company as a lessee:

Unit: Yuan

Name of the lessor	Type of leased assets	Rent recognized in this period	Rent recognized in prior period
Changyu Group Company	Office building and plant	3,447,891	3,432,147

11.4.4 Related guarantee

Nil

11.4.5 Inter-bank borrowing and lending of related parties

Nil

11.4.6 Asset transfer and debt recombination of related parties

Nil

11.4.7 Other related transactions

Unit: Yuan

Item	Note	Amount incurred in this period	Amount incurred in prior period
Trademark use fee	(a)		44,428,033
Patent fee	(b)		25,000

11.5 Accounts receivable and payable of the related parties

11.5.1 Accounts receivable

Unit: Yuan

Item	Related parties	Ending balance		Beginning balance
		Book balance	Provision for bad debts	Book balance	Provision for bad debts
Accounts receivable	Zhongya Medical	4,384,629		2,768,391

Yantai Changyu Pioneer Wine Co., Ltd. 2019 Semi-annual Report

Accounts receivable	God Horse Packing			17,137
Accounts receivable	Window of Wine City	1,777,525		1,911,157
Other receivables	God Horse Packing	1,626,880		813,440
Other receivables	Zhongya Medical	285,000
Other receivables	Window of Wine City	535,000

11.5.2 Accounts payable

Unit: Yuan

Item	Related parties	Ending book balance	Beginning book balance
Accounts payable	God Horse Packing	36,227,351	55,366,785
Accounts payable	Zhongya Medical	8,002,230	6,722,667
Accounts payable	Wine Culture Museum	7,301,765	4,646,731
Accounts payable	Window of Wine City	1,139,407	4,789,600
Accounts payable	Cultural Sales	6,360
Other accounts payable	Changyu Group Company	3,775,362	78,414,978
Other accounts payable	God Horse Packing		450,000

12. Commitment and contingency

12.1 Significant commitment

Unit: Yuan

Item	Ending balance	Beginning balance
Making long-term asset commitments	469,980,000	996,675,000

12.2 Contingency

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

13. Matters after balance sheet

13.1 Important non-adjusting events

Nil

13.2 Profit distribution

Unit: Yuan

Profits or dividends to be distributed	411,278,400
Allocated profits or dividends approved to declare upon discussion	411,278,400

13.3 Other statement of events after the balance sheet date

According to the decision of the Shareholders’ Meeting dated May 17, 2019, based on the issuedcapital stock of 685,464,000 shares in 2018, the Company allocated RMB 6 Yuan in cash (including

Yantai Changyu Pioneer Wine Co., Ltd. 2019 Semi-annual Report

tax) for every 10 shares to all shareholders with the total cash dividends of RMB 411,278,400 Yuan.Such cash dividends were distributed on July 8, 2019 and July 10, 2019 respectively.

14. Other important matters

Nil

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

15.1 Accounts receivable

15.1.1 Accounts receivable disclosed by type

Unit: Yuan

Type	Ending balance					Beginning balance
	Book balance		Provision for bad debts		Book value	Book balance		Provision for bad debts		Book value
	Amount	Proportion	Amount	Accrued proportion		Amount	Proportion	Amount	Accrued proportion
Accounts receivable for which provision for bad debts is accrued on a single item basis						1,447,973	100%			1,447,973
Accounts receivable for bad debts is accrued on a combined basis
Total						1,447,973	100%			1,447,973

15.1.2 Provision for bad debts accrued, withdrawn or transferred back in this periodThe provision for bad debts accrued in this period was RMB 0 Yuan; and that withdrawn ortransferred back in this period was RMB 0 Yuan.

15.1.3 Accounts receivable actually cancelled after verification in this periodNil

15.1.4 Accounts receivable collected by the borrower of top 5 units ranked by the endingbalanceNil

15.1.5 Accounts receivable derecognized due to transfer of financial assets

Nil

15.1.6 Accounts receivable transferred and included in assets and liabilities

Nil

15.2 Other receivables

Unit: Yuan

Yantai Changyu Pioneer Wine Co., Ltd. 2019 Semi-annual Report

Item	Ending balance	Beginning balance
Interest receivable	277,785	254,088
Dividends receivable	4,103,925	500,000,000
Other receivables	522,211,903	525,389,268
Total	526,593,613	1,025,643,356

Remarks: The other receivables in the above list refer to those deducting interest receivable and dividends receivable.

15.2.1 Interest receivable

Unit: Yuan

Item	Ending balance	Beginning balance
Fixed deposit	277,785	254,088
Entrusted loan
Bond investment
Total	277,785	254,088

15.2.2 Dividends receivable

Unit: Yuan

Item (or the invested unit)	Ending balance	Beginning balance
Dividends receivable from subsidiaries	4,103,925	500,000,000
Total	4,103,925	500,000,000

15.2.3 Other receivables

15.2.3.1 Particulars of other receivables classified by nature

Unit: Yuan

Nature	Ending book balance	Beginning book balance
Accounts receivable from subsidiaries	518,330,846	523,579,831
Deposit and guaranty money receivable		12,500
Other	3,881,057	1,796,937
Total	522,211,903	525,389,268

15.2.3.2 Disclosed by age

Unit: Yuan

Age	Ending balance
Within 1 year (including)	422,841,109
1-2 years	99,270,390
2-3 years	100,404
More than 3 years
Total	522,211,903

Yantai Changyu Pioneer Wine Co., Ltd. 2019 Semi-annual Report

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

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

15.2.3.4 Accounts receivable actually cancelled after verification in this periodNil

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

Unit: Yuan

Unit	Nature of fund	Ending balance	Age	Percentage in the total ending balance of other accounts receivable	Ending balance of provision for bad debts
Sales Company	Internal incomings and outgoings	179,295,939	Within 1 year	34.3%
R&D Company	Internal incomings and outgoings	111,343,650	Within 1 year	21.3%
Laizhou Wine	Internal incomings and outgoings	5,549,972	Within 1 year	1.1%
Penglai Sales	Internal incomings and outgoings	3,992,770	Within 1 year	0.8%
Indomita Wine Company Chile, SpA	Internal incomings and outgoings	3,330,413	Within 1 year	0.6%
Total	--	303,512,744	--	58.1%

15.2.3.6 Accounts receivable related to governmental subsidy

Nil

15.2.3.7 Other accounts receivable derecognized due to transfer of financial assetsNil

15.2.3.8 Other accounts receivable transferred and included in assets and liabilitiesNil

15.3 Long-term equity investment

Unit: Yuan

Item	Ending balance			Beginning balance
	Book balance	Impairment reserve	Book value	Book balance	Impairment reserve	Book value
Investment in subsidiaries	7,420,803,069		7,420,803,069	7,420,803,069		7,420,803,069

Yantai Changyu Pioneer Wine Co., Ltd. 2019 Semi-annual Report

Item	Ending balance			Beginning balance
	Book balance	Impairment reserve	Book value	Book balance	Impairment reserve	Book value
Investment in associated enterprises and joint ventures
Total	7,420,803,069		7,420,803,069	7,420,803,069		7,420,803,069

15.3.1 Investment in subsidiaries

Unit: Yuan

Invested unit	Beginning balance	Increase in this period	Decrease in this period	Ending balance	Provision for impairment accrued in this period	Ending balance of impairment provision
Xinjiang Tianzhu (a)	60,000,000			60,000,000
Kylin Packaging	23,176,063			23,176,063
Changyu Chateau (a)	28,968,100			28,968,100
Pioneer International (b)	3,500,000			3,500,000
Ningxia Growing	36,573,247			36,573,247
National Wine	2,000,000			2,000,000
Icewine Valley (a)	30,440,500			30,440,500
Beijing Chateau (a)	579,910,000			579,910,000
Sales Company	7,200,000			7,200,000
Langfang Sales (b)	100,000			100,000
Langfang Castel (a)	19,835,730			19,835,730
Wine Sales	4,500,000			4,500,000
Shanghai Marketing (b)	300,000			300,000
Beijing Marketing	850,000			850,000
Jingyang Sales (b)	100,000			100,000
Jingyang Wine (b)	900,000			900,000
Ningxia Wine	222,309,388			222,309,388
Ningxia Chateau	453,463,500			453,463,500
Chateau Tinlot (b)	212,039,586			212,039,586
Shihezi Chateau	812,019,770			812,019,770
Chang’an Chateau	803,892,258			803,892,258
Research, Development & Manufacture Company (a)	3,288,906,445			3,288,906,445
Huanren Wine	22,200,000			22,200,000

Yantai Changyu Pioneer Wine Co., Ltd. 2019 Semi-annual Report

Invested unit	Beginning balance	Increase in this period	Decrease in this period	Ending balance	Provision for impairment accrued in this period	Ending balance of impairment provision
Wine Sales Company
Francs Champs	236,025,404			236,025,404
Marques del Atrio	190,150,544			190,150,544
Indomita Wine	274,248,114			274,248,114
Kilikanoon Estate, Australia	107,194,420			107,194,420
Total	7,420,803,069			7,420,803,069

(a) The Company acquired 100% voting right and usufruct of such non-wholly-owned subsidiaries by

means of contract arrangement. Please refer to Note 9.1.(b) The Company acquired 100% voting right of such subsidiaries by means of indirect holding through its

wholly-owned subsidiaries.From January to June 2019, there were no restrictions for the invested entities of the Company to transferassets to the Company.

15.4 Operating income and operating cost

Unit: Yuan

Item	Amount incurred in this period		Amount incurred in prior period
	Income	Cost	Income	Cost
Main business	334,207,600	292,023,685	384,520,180	330,810,994
Other business	18,143,402	17,546,895	24,325,031	21,835,995
Total	352,351,002	309,570,580	408,845,211	352,646,989

15.5 Investment income

Unit: Yuan

Item	Amount incurred in this period	Amount incurred in prior period
Income from long-term equity investment by cost method	264,221,755	312,409,576
Income from long-term equity investment by equity method
Investment income from disposal of long-term equity investment
Investment income of the financial assets measured at their

Yantai Changyu Pioneer Wine Co., Ltd. 2019 Semi-annual Report

fair values and the variation of which is recorded into the current profits and losses during the holding period
Investment income gained from disposal of the financial assets measured at their fair values and the variation of which is recorded into the current profits and losses
Investment income of held-to-maturity investment during the holding period
Investment income of financial assets held for sale during the holding period
Investment income gained from disposal of financial assets held for sale
Gains generated from the remaining equity remeasured as per fair value after the loss of control
Total	264,221,755	312,409,576

16. Supplementary materials

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

Unit: Yuan

Item	Amount	Remark
Profits/losses on disposal of non-current assets	1,138
Tax return, deduction and exemption approved beyond the authority or without formal approval document

	64,211,892
Payment for use of funds by non-financial enterprises included in the current profits/losses
Income obtained when the investment cost obtained by the enterprise from subsidiaries, joint-run business and joint venture is less than the fair value of the net identifiable assets obtained from the invested units when the investment is made
Profits/losses on exchange of non-monetary assets
Profits/losses on entrusting other people to make investment or manage assets

Yantai Changyu Pioneer Wine Co., Ltd. 2019 Semi-annual Report

Item	Amount	Remark
Asset impairment provision accrued due to force majeure such as natural disaster
Profits/losses on debt restructuring
Enterprise reorganization expenses such as staffing expenditure and integration expenses, etc.
Profits/losses on those beyond the fair value generated from transactions with unfair transaction price
Current net profits/losses on subsidiaries acquired from a business combination under common control from the beginning to the consolidation date
Profits/losses on contingencies irrelated to the normal business of the Company
Profits/losses on changes of fair value of tradable financial assets, derivative financial assets, tradable financial liabilities and derivative financial liabilities, and investment income from disposal of tradable financial assets, derivative financial assets, tradable financial liabilities, derivative financial liabilities and other investment in creditor's rights, excluding effective hedging operations relevant to the normal business of the Company
Transfer-back of accounts receivable with single impairment test and provision for impairment of contract assets
Profits/losses on external entrusted loans
Profits/losses on fair value changes of investment real estate with fair value mode for follow-up measurement
Influence of the one-time adjustment of the current profits/losses in accordance with tax and accounting laws and regulations on the current profits/losses
Trustee fee income from entrusted operation
Other non-operating income and expenditure besides the above items	3,411,864
Other profits/losses conforming to the definition of non-current profits/losses

Yantai Changyu Pioneer Wine Co., Ltd. 2019 Semi-annual Report

Item	Amount	Remark
Minus: Influenced amount of income tax	16,671,778
Influenced amount of minority shareholders’ equity	40,022
Total	50,913,094	--

16.2 Return on net assets and earnings per share

Profit incurred in this period	Weighted average return on net assets	Earnings per share
		Basic EPS (Yuan/Share)	Diluted EPS (Yuan/Share)
Net profit attributable to common shareholders of the Company	6.13%	0.88	0.88
Net profit attributable to common shareholders of the Company deducting non-incidental profits/losses	5.62%	0.81	0.81

16.3 Accounting data difference under domestic and foreign accounting standard

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

Unit: Yuan

	Net profits		Net assets
	Amount incurred in this period	Amount incurred in prior period	Ending balance	Beginning balance
In accordance with the Chinese accounting standard	603,403,789	635,837,405	9,791,885,091	9,606,099,365
Item & amount adjusted in accordance with the international accounting standard:
In accordance with the international accounting standard	603,403,789	635,837,405	9,791,885,091	9,606,099,365