Luzhou Laojiao Co., Ltd.
2024 Interim Report
【August 2024】
Section I Important Statements, Contents and DefinitionsThe Board of Directors, Board of Supervisors, directors, supervisors and senior management guaranteethat the information presented in this report is free of any false records, misleading statements ormaterial omissions, and shall individually and together be legally liable for truthfulness, accuracy andcompleteness of its contents.
Liu Miao, responsible person for the Company, Xie Hong, responsible person for accounting work andSong Ying, responsible person for the Company’s financial affairs (Accounting Supervisor) havewarranted that the financial statements in this report are true, accurate and complete.
All the directors attended the board meeting to deliberate this report by themselves.
Affected by risks, uncertainties and assumptions, the forward-looking statements concerning businessobjectives and future plans made in this report based on the subjective assumptions and judgments ofthe future policies and economic conditions may be significantly different from the actual results. Suchstatements shall not be considered as virtual promises of the Company to investors, and the investorsand relevant persons shall maintain adequate risk awareness and shall understand the differencesbetween plans, forecasts and commitments.
In this report, the potential risks in the operation of the Company have been disclosed. Investors arekindly reminded to pay attention to possible investment risks.
The Company has no interim dividend plan, either in the form of cash or stock.
This report has been prepared in both Chinese and English. Should there be any discrepancies ormisunderstandings between the two versions, the Chinese version shall prevail.
Contents
Section I Important Statements, Contents and Definitions ...... 2
Section II Company Profile and Key Financial Results ...... 6
Section III Management Discussion and Analysis ...... 10
Section IV Corporate Governance ...... 37
Section V Environmental and Social Responsibility ...... 41
Section VI Significant Events ...... 49
Section VII Changes in Shares and Information about Shareholders ...... 56
Section VIII Preferred Shares ...... 64
Section IX Information about Bond ...... 65
Section X Financial Report ...... 68
Documents Available for Reference
1. Financial statements signed and stamped by the responsible person for the Company, theresponsible person for accounting work and the responsible person for the Company’s financial affairs(Accounting Supervisor); and
2. The originals of all company documents and announcements that are disclosed to the public duringthe reporting period.
Definitions
| Term | Reference | Definition |
| Company, the Company, Luzhou Laojiao | Refer to | Luzhou Laojiao Co., Ltd. |
| Laojiao Group | Refer to | Luzhou Laojiao Group Co., Ltd. |
| XingLu Group | Refer to | Luzhou XingLu Investment Group Co., Ltd. |
| SASAC of Luzhou | Refer to | State-owned Assets Supervision and Administration Commission of Luzhou |
| Huaxi Securities | Refer to | Huaxi Securities Co., Ltd. |
| Luzhou Bank | Refer to | Luzhou Bank Co., Ltd. |
| Sales Company | Refer to | Luzhou Laojiao Sales Co., Ltd. |
| Brewing Company | Refer to | Luzhou Laojiao Brewing Co., Ltd. |
Section II Company Profile and Key Financial Results
1. Corporate information
| Stock abbreviation | Luzhou Laojiao | Stock code | 000568 |
| Stock exchange where the shares of the Company are listed | Shenzhen Stock Exchange | ||
| Name of the Company in Chinese | 泸州老窖股份有限公司 | ||
| Abbr. of the Company name in Chinese (if any) | 泸州老窖 | ||
| Name of the Company in English (if any) | Luzhou Laojiao Co., Ltd. | ||
| Abbr. of the Company name in English (if any) | LZLJ | ||
| Legal representative | Liu Miao | ||
2. Contact us
| Secretary of the board | Representative for securities affairs | |
| Name | Li Yong | Wang Chuan |
| Address | Luzhou Laojiao Command Center, Nanguang Road, Luzhou City, Sichuan Province, China | |
| Tel. | （0830）2398826 | （0830）2398826 |
| Fax | （0830）2398864 | （0830）2398864 |
| dsb@lzlj.com | dsb@lzlj.com | |
3. Other Information
3.1. Contact Information of the Company
Whether any change occurred to the registered address, office address and their zip codes, websiteaddress, email address and other contact information of the Company in the reporting period.? Applicable ? N/ANo change occurred to the said information in the reporting period, which can be found in the 2023Annual Report.
3.2. Information disclosure and place where the interim report is keptWhether any change occurred to the information disclosure and place where the interim report is kept.
? Applicable ? N/ANo change occurred to the website of the stock exchange, media and other websites designated bythe Company for information disclosure, as well as to the place where the disclosed documents arekept in the reporting period. The said information can be found in the 2023 Annual Report.
3.3. Other information
Whether any change occurred to other information in the reporting period.? Applicable ? N/A
4. Key accounting data and financial indicatorsWhether the Company performed a retroactive adjustment to or restatement of accounting data.? Yes ? No
| H1 2024 | H1 2023 | Change | |
| Operating revenues (CNY) | 16,904,885,169.38 | 14,593,051,774.14 | 15.84% |
| Net profits attributable to shareholders of the Company (CNY) | 8,027,538,165.31 | 7,090,426,787.07 | 13.22% |
| Net profits attributable to shareholders of the Company before non-recurring gains and losses (CNY) | 7,994,110,731.24 | 7,040,938,575.63 | 13.54% |
| Net cash flows from operating activities (CNY) | 8,225,060,212.57 | 5,647,760,797.04 | 45.63% |
| Basic earnings per share (CNY/share) | 5.46 | 4.82 | 13.28% |
| Diluted earnings per share (CNY/share) | 5.46 | 4.82 | 13.28% |
| Weighted average ROE | 17.61% | 18.79% | -1.18% |
| 30 June 2024 | 31 December 2023 | Change | |
| Total assets (CNY) | 70,239,197,050.01 | 63,294,455,201.60 | 10.97% |
| Net assets attributable to shareholders of the Company (CNY) | 41,792,962,647.13 | 41,391,410,494.89 | 0.97% |
5. Differences in accounting data under domestic and overseasaccounting standards
5.1. Differences in the net profits and net assets disclosed in the financial reportsprepared under the international and China accounting standards
? Applicable ? N/ANo such differences for the reporting period.
5.2. Differences in the net profits and net assets disclosed in the financial reportsprepared under the overseas and China accounting standards
? Applicable ? N/ANo such differences for the reporting period.
6. Non-recurring gains and losses
? Applicable ? N/A
Unit: CNY
| Item | Amount | Note |
| Profit or loss from disposal of non-current assets (including the write-off portion of the impairment provision) | 1,058,795.10 | See "Section X Note 5.48" for details. |
| Government grants accounted for, in the profit or loss for the current period (except for the government grants closely related to the business of the Company and given in accordance with defined criteria and in compliance with government policies, and have a continuing impact on the Company's profit or loss) | 18,852,624.09 | See "Section X Note 5.44" for details. |
| Gain or loss on fair-value changes in financial assets and liabilities held by a non-financial enterprise, as well as on disposal of financial assets and liabilities (exclusive of the effective portion of hedges that is related to the Company's normal business operations) | 23,433,541.56 | See "Section X Note 5.45 and 5.46" for details. |
| Other non-operating income and expenditure except above-mentioned items | 901,090.95 | See "Section X Note 5.49 and 5.50" for details. |
| Less: Corporate income tax | 10,740,409.33 | |
| Minority interests (after tax) | 78,208.30 | |
| Total | 33,427,434.07 |
Other items that meet the definition of non-recurring gain/loss:
? Applicable ? N/ANo such cases for the reporting period.
Explain the reasons if the Company classifies any non-recurring gain/loss item mentioned in theExplanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities tothe Public-Non-Recurring Gains and Losses as a recurring gain/loss item.? Applicable ? N/ANo such cases for the reporting period.
Section III Management Discussion and Analysis
1. Business scope in the reporting period
The Company operates within the baijiu subdivision industry which belongs to the liquor & wine,beverage and refined tea production industry with specialized baijiu product design, production andsales as its main business model. Its primary products include baijiu series such as "National Cellar1573" and "Luzhou Laojiao", and its main comprehensive performance indicators rank high in thebaijiu industry.
In the face of profound market changes and diversified consumer demands, China's baijiu industry isencountering new historic challenges. To navigate these challenges, baijiu producers must seek newopportunities, implement innovative measures, and generate fresh demand, thereby ensuring thelong-term growth of the industry.
The Company shall comply with the disclosure requirements for companies engaging in food & liquorand wine production of the Guidelines No. 3 of the Shenzhen Stock Exchange on Self-regulation ofListed Companies—Industry-specific Information Disclosure.
The Company holds three food business licenses, and its production model is self-production. TheCompany’s main business is the research and development, production and sales of baijiu seriessuch as "National Cellar 1573" and "Luzhou Laojiao".
During the reporting period, with a focus on the development theme of "proceeding with confidence,overcoming challenges, innovating, and collaborating", the Company forged ahead and worked hard.As a result, good results were achieved in various aspects. For H1 2024, operating revenueamounted to CNY 16.905 billion, up 15.84% year on year; and the net profit attributable to theshareholders of the listed company reached CNY 8.028 billion, up 13.22% year on year.
A. Main operations and results in the reporting period
a. Implementing marketing strategy and steadily enhancing market share and market competitivenessThe market expansion efforts yielded more results. The parallel progress of key projects such asthe "Highland Strategy", "East China Strategy" and "Northwest China Strategy" further activated themarket. The marketing model was updated. The consumer operation system was continuouslyimproved, with the targeted deployment of new models and modes across all regions and major citiesnationwide. Additionally, the market operation led to increasing traffic. Core business scenariotemplates were constantly developed, scenario codes were widely promoted, and whole-chain digitalmarketing through scanning codes was deepened, all contributing to the growth of consumer dataassets.
b. Elaborating brand culture and continuously recovering the value of Luzhou Laojiao as a famous
baijiu brandThe cultural connotations continued to deepen. The "Chinese Strong Aromatic Baijiu for 700Years" exhibition officially opened, showcasing the rich heritage of strong aromatic baijiu throughauthentic historical photos, documents and physical materials that span 700 years. Fruitfulachievements were made in cultural heritage protection, culminating in the successful recognition asthe "Origin of Chinese Strong Aromatic Baijiu". Cultural projects progressed smoothly. The StrongAromatic Baijiu Experience and Marketing Centre and other projects were advanced in an orderlymanner. Brand building continued to gain momentum. Characteristic cultural IP events such as"Baijiu Seal-off Ceremony" and "Cellar Owner Festival" were carried out. Collaboration with popularsports events such as the Australian Open and the International Table Tennis Federation World Cupreached new heights. By carrying out a global cultural tour, the Company interpreted the spiritualconnotation of "letting the world taste the Chinese flavour". Luzhou Laojiao's brand was selected forthe 2024 "China's 500 Most Valuable Brands".
c. Focusing on allocating elements of scientific research with a new boom in innovationScientific activities were conducted in an orderly manner. Luzhou Laojiao successfully organisedthe Technology and Talent Work Conference and activities such as the "Academicians' Lecture" and"Technology Empowerment in Local Regions", further enhancing technological innovation in brandmarketing. Technology management was deepened continuously. In collaboration with TsinghuaUniversity, Sichuan University, and other universities, the Company advanced the management andoperation of scientific research platforms. Moreover, procedures for the initiation, modifications andacceptance of scientific and technological projects were streamlined and then relevant projects werelaunched. Scientific and technological innovation made fruitful achievements. In the first half of2024, the Company participated in the formulation or revision of four national standards, two industrystandards and eight association standards. It applied for 56 patents and was granted 23 patents. Inaddition, it submitted applications for 11 projects to governments at all levels and associations andwas recognised as one of the first batch of chain masters for iconic product manufacturing in SichuanProvince.
d. Consolidating the basis for quality guarantees and continuously improving production quality andefficiencyThe capacity guarantee gained new momentum. The Company consistently improved theutilisation rate of brewing resources and production efficiency. It continuously promoted theconstruction of the Luzhou Laojiao Technical Upgrade Project of Intelligent Brewing and graduallyrefined the leaven making MES system of the Huangyi Brewery Eco-Park, thereby accelerating theproduction empowered by digitisation and intelligence. Quality control was constantly perfected.The Company carried out external audits on quality, food safety, environmental and measurementmanagement systems, with a 100% pass rate. It participated in drafting and revising over 16standards at all levels including national and industrial standards. Supply chain management wasprecise and efficient. The Luzhou Laojiao Intelligent Packaging Centre has officially startedoperations, establishing the industry's first "Lighthouse Factory" with the fastest filling speed, thestrictest quality testing, the highest level of automation, the highest degree of digitisation, and themost independent technological innovations.
e. Fulfilling social responsibilities and fostering a green ecosystemPairing assistance was carried out to promote rural revitalisation. The Company activelypromoted assistance projects, including rural infrastructure building, industrial assistance andagricultural assistance projects. Social welfare was continuously advanced. The Companycontinuously carried out donation projects for education such as "Little Schoolbag, Big Love", "PillarsProject", "Luzhou Laojiao Scholarship", and "Luzhou Laojiao Teacher's Pointer". It was alsorecognised as one of the Top Ten Public Welfare Enterprises in Sichuan Province. Green, lowcarbon and sustainable development was promoted. Environmental protection procedures wereprocessed dynamically, achieving resource recovery and utilisation, while the Company's cleanproduction standards continued to improve. Both English and Chinese versions of the 2023 ESGreport have been prepared and published, demonstrating a commitment to fulfilling informationdisclosure responsibilities.
B. Priorities in the second half of the year
a. Strengthening marketing and advancing digital marketingThe Company will continuously expand its market layout. It will comprehensively advance theeffective implementation of the "Hundred Cities Programme" and fully integrate internal resources.Additionally, it will initiate a "Market Exploration Project" in base markets to further tap into existingresources and expand new opportunities. The digital marketing strategy will be deepened. TheCompany continued to foster digital marketing and enhance retail system development, therebydriving the refined operation of whole-chain digital marketing through scanning codes.
b. Deepening cultural empowerment and implementing brand initiativesLuzhou Laojiao's corporate culture in the new era will be streamlined and summarised. TheCompany will advance the implementation of the project for establishing Luzhou Laojiao's corporateculture system in this new era. Additionally, it will accelerate the development of Luzhou Laojiao'sknowledge system and enhance brand communication while ensuring the extension of premiumcourses. Brand culture promotion activities were coordinated and advanced. The "MobileMuseum" will be launched for a national tour to widely disseminate the core cultural assets of 700years of strong aromatic baijiu. The "International Festival of Poetry & Liquor" will be organised as asignature brand event to inspire cultural confidence among the public. Additionally, the Company willleverage the Paris Olympics Games for sports marketing to continuously enhance the prominenceand value of the Luzhou Laojiao's brand.
c. Providing digital support to promote intelligent productionRaw grain planting will be guaranteed. The Company will continue to optimise the intelligentrecycling of organic sorghum and complete the acceptance inspection of the second phase of thedata monitoring platform for red sorghum demonstration sites. Achievement transformation will besped up. The Company will continue to leverage its advantages in platforms such as the NationalEngineering and Technology Centre of Solid-State Brewing and the Sichuan Innovation Centre forSolid-state Brewing Technologies and deepen the industry-university-research integration to
consistently strengthen the transformation and application of technological research achievements.Intelligent brewing will be promoted. The Company will advance the construction of the secondphase of the leaven making MES system of the Huangyi Brewery Eco-Park, further optimising systemfunctions and expanding its coverage.
d. Unleashing talent efficiency and building two paradisesA talent team will be built. The Company will implement training programmes to empoweremployees at different positions and different levels based on the "6+1" core competency model. Thepromotion mechanism will be perfected. In accordance with the Company's talent developmentplan and the new promotion system, talent reviews will continue. The incentive system will berefined as well. The Company will adhere to the principles of positive incentives, benefit sharing, aswell as equal rights, responsibilities, and interests, further establishing a comprehensive medium- andlong-term incentive mechanism.
e. Accelerating digital and intelligent empowerment and strengthening coordinated managementA digital and intelligent empowerment platform will be set up. The Company will collaborate inadvancing the platform construction platform into the business development phase, continuing toimprove collaboration efficiency. It will build the "Luzhou Laojiao Employees", an intelligent labourunion platform to provide smart services for employees, ensuring effective support through digital andintelligent linkage. Additionally, efforts will be made to strengthen the acceptance of the national-leveldemonstration digital archive and update the knowledge management platform's course resources,gradually improving the online knowledge-sharing system. Digital and intelligent talent cultivationwill be strengthened. The Company will nurture employees' overall digital and intelligent capabilities,and introduce business cadres with relevant thoughts and technologies, thereby building a pluralistictalent team across multiple industries.
Brand operationThe Company has always insisted on the strategy of "dual brands, three product series, and majorsingle products": The National Cellar 1573 series has been one of the three high-end baijiu productsin China; Luzhou Laojiao's brand rejuvenation plan saw remarkable results, and the product seriesshowed a good momentum of development; innovative products such as Health and Chinese-stylefruit baijiu continued to be cultivated, and have become the driving force for the Company's young,fashionable, healthy and international development.
Main sales models:
Currently, the Company has two main sales models:
1. Traditional channel operation model: It is mainly authorized distribution of the offline distributors. TheCompany establishes cooperative relationships with the distributors by product lines and regions. TheCompany directly supplies goods to the distributors, and then distributors sell them to consumers andterminal outlets.
2. Emerging channel operation model: It is mainly online sales operations. The Company establishes
cooperative relationships with e-commerce platforms, self-media and webcasters, and sells the goodsto consumers through flagship stores, specialty stores, live streaming rooms on online platforms andother network terminals.
Distribution models:
? Applicable □N/A
1. Main sales models
Unit: CNY
| Operating revenue | Cost of sales | Gross profit margin | YoY change of operating revenue | YoY change of cost of sales | YoY change of gross profit margin | ||
| By sales model | |||||||
| Traditional channel operation model | 16,107,925,666.93 | 1,757,681,281.88 | 89.09% | 15.38% | 17.29% | -0.18% | |
| Emerging channel operation model | 730,665,689.05 | 153,426,303.77 | 79.00% | 32.83% | -10.47% | 10.15% | |
2. Distributors
Unit: Number
| Region | Number of distributors at the end of the reporting period | Increased number during the reporting period | Decreased number during the reporting period | YoY change of number of distributors (%) | Reason for any significant change |
| Domestic | 1769 | 133 | 74 | 4.00 | |
| Overseas | 92 | 5 | 17 | -17.12 |
3. Main settlement method for distributors and distribution method
The Company's main settlement method for distributors is payment before delivery. The distributionmethod is authorized distribution.
4. Top five distributors
| Total sales to top five customers（CNY） | 11,374,130,188.05 |
| Total sales to top five customers as % of the total sales | 67.28% |
| Total sales to related parties among top five customers as % of the total sales | 0.00% |
The Company had no accounts receivable from the top five distributors at the end of the period.
5. Information on top five distributors
| No. | Customer | Sales amount (CNY) | As % of the total sales for the reporting period |
| 1 | Customer A | 8,407,053,834.92 | 49.73% |
| 2 | Customer B | 1,309,667,685.41 | 7.75% |
| 3 | Customer C | 709,640,005.55 | 4.20% |
| 4 | Customer D | 540,647,931.43 | 3.20% |
| 5 | Customer E | 407,120,730.74 | 2.40% |
| Total | -- | 11,374,130,188.05 | 67.28% |
Store sales terminals accounted for more than 10%
□ Applicable ? N/A
Online direct sales? Applicable □N/AFor the main sales models of the Company, please refer to the contents under the heading “Distributionmodels” in “1. Business scope in the reporting period” of Section III. For the sales of the Company'smain products, please refer to the contents under the heading "Business segment, products orgeographical segments contributing over 10% of the operating revenues or profits" in “3. Analysis ofmain business” of Section III. The Company's main products are sold online. Its main cooperationplatforms include JD.com and Tmall.
Sales price of main products contributing over 10% of the total operating revenues for the currentperiod changed by more than 30% from the previous reporting period
□ Applicable ? N/A
Purchase model and purchase content
Unit: CNY
| Purchase model | Purchase content | Amount of main purchase content |
| Organic raw grains are purchased through cooperative model and supplied by organic raw grain bases; other raw grains and packaging materials are purchased through bid invitation | Raw materials | 1,870,959,004.54 |
| Purchase based on the unified pricing of the National Development and Reform Commission and the price bureau, and purchase through bid invitation | Fuels and energies | 93,989,156.96 |
| Purchase through bid invitation | Low-value consumables | 31,909,484.51 |
The purchase of raw materials from cooperatives or farmers accounted for more than 30% of the totalpurchase amount
□ Applicable ? N/A
The price of main raw materials purchased externally changed by more than 30% year-on-year
□ Applicable ? N/A
Main production model:
The Company's main production model is self-production.
Commissioned processing and production
□ Applicable ? N/A
Main breakdown items of cost of sales
Unit: CNY
| By business segment | Item | H1 2024 | H1 2023 | YoY Change | ||
| Amount | As % of cost of sales | Amount | As % of cost of sales | |||
| Baijiu | Raw materials | 1,488,095,661.17 | 77.87% | 1,411,571,489.11 | 84.52% | 5.42% |
| Baijiu | Labor costs | 134,431,299.24 | 7.03% | 117,395,758.18 | 7.03% | 14.51% |
| Baijiu | Manufacturing overhead | 288,580,625.24 | 15.10% | 141,044,031.51 | 8.45% | 104.60%1 |
Note 1: The increase in manufacturing overhead is mainly because the construction in progress—theintelligent packaging centre—was completed and gradually put into operation, among others.
Production volume and inventory
1. Production volume, sales volume and inventory of main products
| Product classification | (ton) | (ton) | (ton) | (%) | (%) | YoY change of inventory | Description of major changes |
| Mid- and high-end baijiu | 17,109.24 | 21,282.50 | 32,378.29 | 5.89% | 25.71% | -23.10% | |
| Other baijiu | 27,036.82 | 26,632.98 | 6,103.16 | 5.81% | 0.56% | -43.30% | The YoY decrease of 43.30% in inventory is mainly due to a lower inventory base at the beginning of the period. |
2. Inventory at the end of the reporting period
Unit: Ton
| Finished baijiu | Semi-finished baijiu (including base baijiu) |
| 38,481.45 | 450,196.72 |
3. Capacity
Unit: Ton
| Main products | Design capacity | Actual capacity | Capacity in progress |
| Baijiu | 170000 | 170000 | 80000 |
2. Analysis of core competitiveness
A. Geographical advantageLuzhou City, where the Company is located, sits in the transitional area between the southern rim of theSichuan Basin and the Yunnan-Guizhou Plateau, featuring a warmer and more humid sub-tropicalclimate compared to other areas at the same latitude, with a temperature above 0℃ throughout theyear. The unique climate and soil are agreeable to grow grains for baijiu brewing. The glutinous redsorghum and soft wheat grown in this area are the primary raw materials for the baijiu of the Company.The cellars in which the Company brews its baijiu are made of the local loessal clay characterized bystrong viscosity, rich minerals and excellent moisture retention. In addition, the abundant and qualitywater in the region creates a unique geographical advantage for the production of the Company’s baijiu.
B. Advantage of cellars and brewing techniqueAged cellars are the most essential condition for a strong aromatic baijiu maker to produce good qualitybaijiu. The Cellars of National Treasure 1573, founded in 1573, was granted by the State Council as thefirst Cultural Relic of National Importance in the industry under the Protection of the State in December1996. 1,619 cellars of Luzhou Laojiao which have been continuously used for over 100 years, togetherwith its 16 ancient brewing workshops and three natural cellar holes, were all selected as the fourthbatch of Cultural Relics of National Importance under the Protection of the State in 2013. They areunique resources that cannot be replicated. In both 2006 and 2012, Luzhou Laojiao Daqu Cellars weretwice selected into the preliminary list of China for World Heritage. In November 2018, Luzhou LaojiaoCellars and Brewing Workshops were selected into China’s Industrial Heritage List. The time-honoredTraditional Brewing Technique of Luzhou Laojiao is a 24-generation inheritance and a classic brewingtechnique for strong aromatic baijiu. This technique was selected as the first batch of NationalIntangible Cultural Heritage in May 2006. The Cellars of National Treasure 1573 and the TraditionalBrewing Technique of Luzhou Laojiao together provide the most essential basis and assurance for thequality of the product series of National Cellar 1573 and Luzhou Laojiao. Additionally, Huangyi BreweryEco-Park has moved into full production in late 2020. Upholding the cultural connotations of“inheritance of ancient ways, pure-grain brewing, traditional techniques, and intelligent technologies”,the Company carried out brewing technical renovation featuring automatic, intelligent and informationtechnology-based transformation. As such, it has established a baijiu brewery eco-park comprisingbrewing workshops, leaven making workshops, and base baijiu storage cellars, along with energy andsewage treatment facilities. This brewery eco-park brings with it new production capacities of 100,000tons of quality pure-grain solid baijiu and 100,000 tons of leaven in addition to a new storage capacity of380,000 tons of baijiu per year, marking a substantial increase in the Company’s production capacity.
C. Brand advantageBrand is a key business resource for baijiu producers. The Company’s reputation is greatly built on itssuperiority in brand. National Cellar 1573, which is of a connoisseurship level, is a world-famous high-end brand. Luzhou Laojiao Tequ, a classic brand for strong aromatic baijiu, was selected in 1952 by thefirst national tasting competition judges as one of the four most famous baijiu brands in China. It is theonly strong aromatic baijiu brand that won the title of “National Famous Baijiu” for five consecutive times,as well as the pioneer with regard to the “Tequ” variety of baijiu. In recent years, the Company hassuccessfully put in place a brand system of “dual brands, three product series, and major singleproducts” with great clarity and focus. The programs carried out to promote the brand of National Cellar1573 and revive the brand of Luzhou Laojiao have produced remarkable results, with significantimprovement in brand influence. The Company’s baijiu is increasingly known by consumers as anational brand of strong aromatic baijiu and of authentic flavor.
D. Quality and R&D advantageThe Company is committed to producing high-quality baijiu, advocating a healthy lifestyle and “makingthe quality visible”. The first “Organic Sorghum Planting Base” was established and the six-factormanagement system (including organic, quality, safety, environment, measurement and energy) wasbuilt and improved. The research platforms are established, including National Engineering Research
Center of Solid-State Brewing, National Liquor Test Center, National Postdoctoral Workstation, etc,which all support the innovation and upgrading of products with their strong technical force. In recentyears, the Company has put in a lot of efforts in researching Tequ production, brewing informatization &automation. Relying on the technological innovation platforms such as the National Industrial DesignCenter, and continuously deepening the cooperation with universities and scientific research institutesincluding the Chinese Academy of Sciences and the Jiangnan University, the Company has undertakendozens of national- or provincial-level projects and has been granted hundreds of invention or utilitymodel patents. And remarkable results have been achieved with respect to improvement of the qualityof base Baijiu, as well as production efficiency improvement.
E. Talent advantageThe Company has 1 inheritor of national intangible cultural heritage, 4 masters of Chinese brewing, 2masters of Chinese baijiu, 2 Chinese liquor connoisseurs, 1 master of Chinese baijiu technique, 13senior professor engineers, 8 experts who receive special allowances from the State Council, 4 nationaltechnicians, 2 national model workers, 4 national Labor Day Medal winners, 4 academic andtechnologic leaders of Sichuan province, 1 expert with outstanding contribution in Sichuan province, 1innovation leader of Tianfu, 1 excellent engineer of Tianfu, 1 skills leader of Tianfu, 3 craftsmen ofTianfu, 5 craftsmen of Sichuan province, 1 technological elite of Tianfu, 2 young science andtechnology talents of Tianfu, 4 technicians of Sichuan province, as well as hundreds of highly skilledpersonnel including national baijiu judges, senior brewing technicians and brewing technicians. Thecomprehensive and professional personnel system assures the sound development of the Company.
3. Analysis of main business
OverviewSee contents under the heading “1. Business scope in the reporting period” above.
Year-on-year changes in key financial data
Unit：CNY
| H1 2024 | H1 2023 | YoY Change | Reason for any significant change | |
| Operating revenues | 16,904,885,169.38 | 14,593,051,774.14 | 15.84% | |
| Cost of sales | 1,932,074,493.16 | 1,700,263,105.68 | 13.63% | |
| Selling and distribution expenses | 1,630,293,023.67 | 1,463,196,830.61 | 11.42% | |
| General and administrative expenses | 504,694,175.31 | 539,879,241.31 | -6.52% | |
| Finance expenses | -124,274,752.55 | -125,783,791.43 | ||
| Corporate income tax | 2,870,561,488.56 | 2,385,359,516.12 | 20.34% | |
| R&D investments | 90,633,563.25 | 85,012,075.06 | 6.61% | |
| Net cash flows from | 8,225,060,212.57 | 5,647,760,797.04 | 45.63% | Mainly due to the |
| operating activities | increased cash received from sale of goods in the current period | |||
| Net cash flows from investing activities | 1,108,797,050.00 | 732,254,553.22 | 51.42% | Mainly due to the increased net cash flows from the purchase and redemption of wealth management products (collective asset management plans) from securities firms in the current period |
| Net cash flows from financing activities | 762,591,987.93 | 6,194,950,118.71 | -87.69% | Mainly due to the receipt of less bank loan in the current period compared to the same period of last year |
| Net increase in cash and cash equivalents | 10,102,021,240.69 | 12,582,529,016.13 | -19.71% |
Significant changes to the profit structure or sources of the Company in the reporting period? Applicable ? N/ANo such changes in the reporting period.
Breakdown of operating revenues
Unit：CNY
| H1 2024 | H1 2023 | YoY Change | |||
| Amount | As % of operating revenues | Amount | As % of operating revenues | ||
| Total | 16,904,885,169.38 | 100% | 14,593,051,774.14 | 100% | 15.84% |
| By business segment | |||||
| Baijiu | 16,838,591,355.98 | 99.61% | 14,510,984,638.41 | 99.44% | 16.04% |
| Other revenues | 66,293,813.40 | 0.39% | 82,067,135.73 | 0.56% | -19.22% |
| By product | |||||
| Mid- and high-end baijiu | 15,213,367,295.49 | 89.99% | 12,990,085,081.50 | 89.02% | 17.12% |
| Other baijiu | 1,625,224,060.49 | 9.61% | 1,520,899,556.91 | 10.42% | 6.86% |
| Other revenues | 66,293,813.40 | 0.40% | 82,067,135.73 | 0.56% | -19.22% |
| By geographical segment | |||||
| Domestic | 16,811,257,242.24 | 99.45% | 14,516,179,307.86 | 99.47% | 15.81% |
| Overseas | 93,627,927.14 | 0.55% | 76,872,466.28 | 0.53% | 21.80% |
Business segment, products or geographical segments contributing over 10% of the operatingrevenues or profits? Applicable ? N/A
Unit：CNY
| Operating revenue | Cost of sales | Gross profit margin | YoY change of operating revenue | YoY change of cost of sales | YoY change of gross profit margin | |
| By business segment | ||||||
| Baijiu | 16,838,591,355.98 | 1,911,107,585.65 | 88.65% | 16.04% | 14.44% | 0.16% |
| By product | ||||||
| Mid- and high-end baijiu | 15,213,367,295.49 | 1,177,762,665.64 | 92.26% | 17.12% | 20.68% | -0.23% |
| Other baijiu | 1,625,224,060.49 | 733,344,920.01 | 54.88% | 6.86% | 5.66% | 0.52% |
| By geographical segment | ||||||
| Domestic | 16,811,257,242.24 | 1,918,659,642.15 | 88.59% | 15.81% | 13.66% | 0.22% |
Under the circumstances that the statistical standards for the Company’s main business data wereadjusted in the reporting period, the Company’s main business data in the current period is calculatedbased on adjusted statistical standards at the end of the reporting period? Applicable ? N/A
The Company shall comply with the disclosure requirements for companies engaging in food & liquorand wine production of the Guidelines No. 3 of the Shenzhen Stock Exchange on Self-regulation ofListed Companies—Industry-specific Information Disclosure.
A. Breakdown of selling and distribution expenses
Unit：CNY
| Selling and distribution expenses | H1 2024 | H1 2023 | YoY Change | Reason for any significant change |
| Advertising expenses | 771,086,934.79 | 585,741,219.56 | 31.64% | Increased advertising and promotional inputs in the current period |
| Sales promotion expenses | 465,935,051.00 | 486,391,918.30 | -4.21% | |
| Warehousing and logistics expenses | 81,048,424.07 | 95,488,340.44 | -15.12% | |
| Labor costs | 212,055,575.40 | 210,781,737.74 | 0.60% | |
| Other | 100,167,038.41 | 84,793,614.57 | 18.13% |
B. Breakdown of advertising expenses
Unit：CNY
| Advertising | Expenses |
| Online advertising (exclusive of TV advertising) | 127,923,890.82 |
| Offline advertising | 159,231,959.64 |
| TV advertising | 215,309,906.78 |
| Other (inclusive of branding ideas, exhibitions & showcases, advertising materials, activity planning, etc.) | 268,621,177.55 |
4. Analysis of non-core business
? Applicable ? N/A
5. Assets and liabilities
5.1. Significant change of asset items
Unit：CNY
| 30 June 2024 | 31 December 2023 | Change in percentage | Explanation about any material change | |||
| Amount | As % of total assets | Amount | As % of total assets | |||
| Cash and cash equivalents | 36,100,758,789.69 | 51.40% | 25,952,025,091.28 | 41.00% | 10.40% | |
| Accounts receivable | 4,069,325.61 | 0.01% | 17,461,378.98 | 0.03% | -0.02% | |
| Inventories | 12,354,323,751.59 | 17.59% | 11,622,043,947.46 | 18.36% | -0.77% | |
| Investment property | 44,397,290.42 | 0.06% | 37,785,416.77 | 0.06% | 0.00% | |
| Long-term equity investments | 2,727,584,618.05 | 3.88% | 2,708,254,833.50 | 4.28% | -0.40% | |
| Fixed assets | 9,595,197,848.09 | 13.66% | 8,613,223,465.46 | 13.61% | 0.05% | |
| Construction in progress | 561,121,727.91 | 0.80% | 1,718,468,880.53 | 2.72% | -1.92% | |
| Right-of-use assets | 32,187,976.28 | 0.05% | 23,260,955.23 | 0.04% | 0.01% | |
| Contract liabilities | 2,341,708,292.72 | 3.33% | 2,672,977,090.30 | 4.22% | -0.89% | |
| Long-term loans | 10,990,000,000.00 | 15.65% | 10,000,300,000.00 | 15.80% | -0.15% | |
| Lease liabilities | 28,420,897.97 | 0.04% | 22,356,404.47 | 0.04% | 0.00% | |
5.2. Main assets overseas
? Applicable ? N/A
5.3. Assets and liabilities measured at fair value
? Applicable □ N/A
Unit：CNY
| Item | Opening balance | Changes in fair value through profit or loss | Changes in cumulative fair value recorded into equity | Provision for impairment | Amount of purchase | Amount of sale | Other changes | Closing balance |
| Financial asset | ||||||||
| 1.Held-for-trading financial assets (exclusive of derivative financial assets) | 1,426,992,098.83 | 33,247,170.87 | 660,000,000.00 | 2,120,238,571.86 | 697.84 | |||
| 4.Investments in other equity instruments | 402,893,468.80 | 79,093,988.67 | 335,372,892.95 | |||||
| 6. Accounts receivables financing | 5,938,171,007.93 | -1,849,185,491.32 | 4,088,985,516.61 | |||||
| Subtotal of financial assets | 7,768,056,575.56 | 33,247,170.87 | 79,093,988.67 | 0.00 | 660,000,000.00 | 2,120,238,571.86 | -1,849,185,491.32 | 4,424,359,107.40 |
| Total | 7,768,056,575.56 | 33,247,170.87 | 79,093,988.67 | 0.00 | 660,000,000.00 | 2,120,238,571.86 | -1,849,185,491.32 | 4,424,359,107.40 |
| Financial liability | 9,763.87 | -9,796.97 | 33.10 | 0.00 | ||||
Information about other changesN/A
Whether measurement attribution of main assets changes significantly in the reporting period?Yes ? No
5.4. Restricted asset rights as of the end of this reporting period
Unit：CNY
| Item | Closing Balance | Reason |
| Bank deposits | 94,715,340.26 | Accrued interest on term deposits |
| Other cash and cash equivalents | 10,000,000.00 | Bank guarantees |
| Other cash and cash equivalents | 992,930.88 | Security deposits at e-commerce platforms |
| Total | 105,708,271.14 |
6. Investment
6.1. Total investment
? Applicable ? N/A
| Investment made in the reporting period (CNY) | Investment made in the same period of last year (CNY) | YoY change |
| 921,132,282.20 | 686,415,706.04 | 34.19%1 |
Note 1: The 34.19% increase in the investment made in the reporting period compared with the sameperiod of last year is mainly due to the purchase of a larger amount of wealth management product(collective asset management plan product) from securities firm in the current period.
6.2. Significant equity investment made in the reporting period
? Applicable ? N/A
6.3. Significant ongoing non-equity investment in the reporting period? Applicable ? N/A
Unit: CNY
| Item | Investment form | Whether it is a fixed asset investment | Industry of the investment project | Amount of input in the reporting period | Accumulated actual input amount by the end of the reporting period | Capital source | Project progress | Projected income | Accumulated actual income by the end of the reporting period | Reasons for not meeting the schedule and projected income | Date of disclosure (if any) | Disclosure index (if any) |
| Luzhou Laojiao Technical Upgrade Project of Intelligent Brewing (Phase I) | Self-built | Yes | Baijiu | 108,118,805.99 | 896,974,812.80 | Self-financing | 25.00% | 0.00 | 0.00 | N/A | 13 July 2022 | Announcement No. 2022-24 on the Implementation of Luzhou Laojiao Technical Upgrade Project of Intelligent Brewing (Phase I) by Subsidiary on |
| http://www.cninfo.com.cn/ | ||||||||||||
| Total | -- | -- | -- | 108,118,805.99 | 896,974,812.80 | -- | -- | 0.00 | 0.00 | -- | -- | -- |
6.4. Financial assets investment
6.4.1. Securities investment
? Applicable □ N/A
Unit: CNY
| Category of securities | Stock code | Abbreviation of securities | Initial investment cost | Accounting measurement model | Beginning book balance | Changes in fair value recognized in profit or loss | Changes in the cumulative fair value recorded into equity | Amount of purchase | Amount of sale | Profit and loss during the reporting period | Closing book balance | Accounting item | Capital source |
| Domestic and foreign stock | 601211 | GTJA | 12,719,156.76 | Fair value measurement | 175,241,715.34 | 146,859,152.57 | 0.00 | 0.00 | 4,710,798.80 | 159,578,309.33 | Investments in other equity instruments | Own fund | |
| Domestic and foreign stock | 002246 | SNC | 1,030,000.00 | Fair value measurement | 12,805,515.44 | 12,119,497.54 | 0.00 | 0.00 | 78,177.75 | 13,149,497.54 | Investments in other equity instruments | Own fund | |
| Domestic and foreign stock | 01983 | LZBANK | 51,120,000.00 | Fair value measurement | 96,733,837.69 | 24,917,780.29 | 0.00 | 0.00 | 3,905,280.00 | 76,037,780.29 | Investments in other equity instruments | Own fund | |
| Domestic and foreign stock | 01880 | CTG Duty-Free | 542,285,380.80 | Fair value measurement | 84,854,489.68 | -97,849,300.14 | 0.00 | 0.00 | 2,015,648.45 | 53,349,395.14 | Investments in other equity instruments | Own fund | |
| Total | 607,154,537. | -- | 369,635,558. | 0.00 | 86,047,130.2 | 0.00 | 0.00 | 10,709,905.0 | 302,114,982. | -- | -- | ||
| 56 | 15 | 6 | 0 | 30 |
6.4.2. Derivative investment
? Applicable □ N/AA. Derivatives investments for hedging purposes in the reporting period
? Applicable □ N/A
Unit: CNY 10,000
| Type of derivative | Initial investment amount | Opening amount | Gain or loss on change in fair value during the current period | Cumulative fair value change recorded in equity | Purchased in the current period | Sold in the current period | Closing amount | Closing amount as % of the Company’s closing equity |
| Forward forex sale and settlement contract | 0 | 0 | -1.74 | 0 | 0 | 0 | 0 | 0.00% |
| Total | 0 | 0 | -1.74 | 0 | 0 | 0 | 0 | 0.00% |
| Explanation of significant changes in accounting policies and specific financial accounting principles in respect of the Company's hedges for the reporting period as compared to the prior period | In accordance with the relevant provisions and guidelines of the Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments and the Accounting Standards for Business Enterprises No. 37 - Presentation of Financial Instruments issued by the Ministry of Finance, the Company took the relevant accounting measures for its business of derivative transactions to reflect the relevant items in the balance sheet and the income statement. The Company did not meet the applicable conditions of the Accounting Standards for Business Enterprises No. 24 - Hedge Accounting and did not yet apply hedge accounting. | |||||||
| Actual gain/loss in the reporting period | In accordance with the Accounting Standard for Business Enterprises No. 37 - Presentation of Financial Instruments, changes in fair value were included in the profit and loss for the current period, and a loss of CNY 17.4 thousand was valued at fair value during the holding period. | |||||||
| Results of hedges | The forward foreign exchange settlement and sales business engaged in by the Company was based on specific business operations and the Company's production and operation, hedging product price and exchange fluctuation risks, achieving expected risk management goals, and playing a positive role in stabilizing production and operation. | |||||||
| Source of derivatives investment funds | Own fund | |||||||
| Risk analysis of positions held in derivatives during the reporting period and explanation of control measures (including but not limited to market risk, liquidity risk, credit risk, operational risk, legal risk, etc.) | The financial derivatives business conducted both domestically and internationally had a real business background. The Company will strictly control the types and sizes of financial derivatives business, choose foreign exchange hedging products with simple structures as much as possible, and do not engage in complex financial derivatives business beyond the actual needs of operation. The purpose is only to lock in risk exposure, and match with actual foreign exchange receipts and disbursements. The Company will not engage in any form or substance of speculative transactions. The term of the purchased foreign exchange hedging products should be as close to or equal to the term of the Company's foreign exchange risk exposure as possible, and should not exceed the term of the foreign exchange risk exposure. The Company will only engage in foreign exchange hedging transactions with financial institutions with corresponding business qualifications approved by the State Administration of Foreign Exchange (SAFE) and the People's Bank of China. The Company will strictly control the size of foreign exchange forward contracts. In order to meet the needs of normal production and operation, it is expected that the cumulative foreign exchange hedging business carried out by the Company and its holding subsidiaries will not exceed the equivalent of CNY 500 million. The above limit can be used in a rolling and circular manner. The Company will pay close attention to changes in the international and domestic market condition, strengthen its research and analysis of exchange rates, regularly review and adjust foreign exchange hedging plans in response to market and business changes, and avoid exchange losses to the greatest extent possible. If there is a partial deviation between the actual business amount and term and the expected income and expenditure plan due to changes in the business of transaction enterprises, it will not pose a substantial delivery risk to the hedging transaction. Transaction enterprises will strengthen the management of accounts receivable, closely track customer payments, actively collect payments, reduce risks of customer default and contract breaching, and control the risks that the Company may face within an acceptable range. The Company has formulated the Foreign Exchange Hedging Business Management System, which clearly stipulates the management organisation, approval authority, operation procedures, risk control, information disclosure, information confidentiality of the Company's foreign exchange hedging business, effectively regulating and controlling the behaviour and risks of foreign exchange hedging business. Transaction enterprises will regularly organise professional training for personnel involved in financial derivatives business, enable them to fully understand the characteristics and risks of financial derivatives trading, continuously strengthen the professional ethics education and professional literacy of relevant personnel, and improve their business level. |
| Changes in market prices or fair value of derivative products during the reporting period, specific methods used and relevant assumption and parameter settings shall be disclosed for analysis of fair value of derivatives | Forward foreign exchange settlement and sales products are featured by high market transparency and active transactions, and transaction prices and settlement prices of that day can fully reflect the fair value of derivatives; the losses from changes in fair value during the reporting period was CNY 17.4 thousand, determined based on the market price of the exchange at the end of the period. |
| Litigation involved (if applicable) | N/A |
| Disclosure date of the announcement about the board’s consent for | 13 June 2023 |
thederivativeinvestment(if any)
B. Derivatives investments for speculative purposes in the reporting period
□Applicable ? N/A
No such cases in the reporting period
6.5. Use of funds raised
? Applicable ? N/A
6.5.1. General use of funds raised
? Applicable □ N/A
Unit：CNY 10,000
| Year | Method | Total amount of funds raised | Net proceeds | Total amount of raised funds used in the reporting period | Accumulated amount of raised funds used | Total amount of re-purposed funds raised in the reporting period | Total amount of accumulated re-purposed funds raised | Accumulated re-purposed funds raised as % of total funds raised | Total amount of unused funds raised | Purpose and direction of unused funds raised | Amount of funds raised idle for more than two years |
| 2022 | Public offering of corporate bond | 150,000 | 149,400 | 6,971.73 | 118,007.27 | 0 | 0 | 0.00% | 39,536.2 | Deposited in special account for raised funds | 0 |
| Total | -- | 150,000 | 149,400 | 6,971.73 | 118,007.27 | 0 | 0 | 0.00% | 39,536.2 | -- | 0 |
| Notes for general use of funds raised | |||||||||||
| The total amount of unused funds raised of the corporate bond “20 Laojiao 01” includes interest on some funds raised. | |||||||||||
6.5.2. Fund raised for committed projects
? Applicable □ N/A
Unit：CNY 10,000
| Committe | Whether | Total | Adjusted Investme | Investme | Accumula | Investme | Date of | Realized | Whether | Whether |
| d investment projects and direction of over-raised funds | the project has been changed (including partial change) | amount of funds raised for committed investment | nt total amount (1) | nt amount in the reporting period | ted input by the end of the reporting period (2) | nt progress by the end of reporting period (3)＝(2)/(1) | the projects reach the working condition for their intended use | benefits during the reporting period | the expected benefits have been achieved | the feasibility of the project has changed significantly |
| Committed investment projects | ||||||||||
| Technical Renovation Project of Brewing (Phase II) | No | 398,400 | 398,400 | 6,971.73 | 336,469.59 | 93.14% | 30 June 2021 | N/A | Yes | No |
| Project of Intelligent Upgrading and Building of the Information Management System | No | 0 | 17,595.97 | N/A | N/A | No | ||||
| Project of Acquiring Sealing Equipment for the Cellar of Huangyi Brewing Base | No | 0 | 12,043.3 | 30 June 2021 | Yes | No | ||||
| Project of Acquiring Accessory Equipment for Leaven Making for Huangyi Brewing Base | No | 0 | 4,980.25 | 30 June 2021 | Yes | No | ||||
| Subtotal of committed investment projects | -- | 398,4001 | 398,400 | 6,971.73 | 371,089.11 | -- | -- | N/A | -- | -- |
| Use of over-raised funds | ||||||||||
| None | ||||||||||
| Total | -- | 398,400 | 398,400 | 6,971.73 | 371,089.11 | -- | -- | N/A | -- | -- |
| Explain project by project the situation and reason for not reaching plan progress or expected benefits (including reason for inputting “N/A” for “Whether the expected benefits have been achieved”) | N/A | |||||||||
| Significant changes of project feasibility | N/A | |||||||||
| Amount, purpose and progress of over-raised funds | N/A | |||||||||
| Change of implementation site of investment projects | N/A | |||||||||
| Adjustment of the implementation mode of raised funds | N/A | |||||||||
| investment projects | |
| Situation of advance investment and replacement | Applicable |
| On 14 May 2019, the Company held the First Extraordinary General Meeting of Shareholders of 2019, which considered and approved the Proposal on Requesting the Company’s General Meeting of Shareholders to Fully Authorize Chairman of the Board or Other Personnel Authorized by the Board to Go Through Procedures for the Public Offering of Corporate Bond. According to the Proposal, in the event of inconsistency between the payment of the raised funds and the progress of the project implementation, the Company may make advance investments using other funds (including self-owned funds, bank project loans, etc.) according to the actual situation, and replace fund investment other than capital funds when the raised funds are in place. As of 31 December 2023, the Company had replaced advance investments of self-pooled funds of CNY 653,444,758.68 using the raised funds. | |
| Idle raised funds used for temporary supplementary liquidity | N/A |
| Amount and reason for surplus of funds raised | N/A |
| Purpose and whereabouts of unused funds raised | The idle raised funds are deposited in the special account No. 9550880046723000135 for raised funds in the Chengdu Branch of China Guangfa Bank Co., Ltd., the special account No. 517517460013000000860 for raised funds in the Luzhou Branch of Bank of Communications Co., Ltd., and the special account No. 631395395 for raised funds in the Chengdu Branch of China Minsheng Banking Corp., Ltd. |
| Problems and other situation when raised funds are used and disclosed | N/A |
Note 1: The subtotal of funds raised for committed projects was CNY 3,984 million, which was thecombined amount of CNY 4,000 million (CNY 2,500 million of corporate bonds issued in August 2019plus CNY 1,500 million of corporate bonds issued in March 2020) minus the total issuance costs ofCNY 16 million.
Note 2: Because there are uncertainties in the approval and issue time for bond, in order to ensuresmooth progress of the projects and protect the interests of the Company’s shareholders, theinvestment sequence and specific amounts of the corresponding raised funds should be determined
by the Chairman of the Board as authorized by the general meeting of shareholders or other personsas authorized by the Board of Directors within the scope of the four raised funds investment projectsaccording to the actual needs, provided that the capital funds for each project is no less than 20% ofthe total investment.
Note 3: As of 30 June 2024, the Project of Intelligent Upgrading and Building of the InformationManagement System was in the process.
Note 4: These raised funds investment projects have helped further expand the Company’sproduction and sales, and increase its comprehensive competitiveness. The economic benefits ofthese projects cannot be measured separately.
6.5.3. Re-purposed funds raised
? Applicable ? N/ANo such cases in the reporting period
7. Sale of major assets and equity interests
7.1. Sale of major assets
? Applicable ? N/ANo such cases in the reporting period.
7.2. Sale of major equity interests
? Applicable ? N/A
8. Analysis of major subsidiaries
? Applicable ? N/AMain subsidiaries and joint companies with an over 10% influence on the Company’s net profit
Unit：CNY
| Company name | Company type | Business scope | Registered capital | Total assets | Net assets | Operating revenue | Operating profit | Net profit |
| Luzhou Laojiao Sales Co., Ltd. | Subsidiary | Sales of baijiu series such as “National | 100,000,000.00 | 12,552,856,796.69 | 8,257,726,354.15 | 16,146,219,463.95 | 7,709,621,298.98 | 5,752,203,635.52 |
Cellar1573” and“LuzhouLaojiao”
Acquisition and disposal of subsidiaries during the reporting period
□ Applicable ? N/A
Notes for major holding companies and joint stock companiesThere were no major holding companies or joint stock companies during the reporting period of whichinformation shall be disclosed.
9. Structured entities controlled by the Company
? Applicable ? N/A
10. Risks facing the Company and countermeasuresA. Macroeconomic risk: At present, the economy is in a sluggish recovery, with problems such asinsufficient effective demand, weak social expectations and low consumer confidence still persisting.Additionally, the complexity, severity, and uncertainty of the external environment are increasing,which may have an impact on the industry and enterprises. In this regard, the Company will face thechallenges, embrace them, and overcome them during this economic cycle. It will identifyopportunities, seize them, and make the most of them, aiming to establish a scientific, stable, healthyand rapid development framework that promotes high-quality growth for Luzhou Laojiao.
B. Risk of aggravating industrial competition: In 2024, the baijiu industry has entered a structuraladjustment cycle, with the characteristics of the stagnant era becoming increasingly pronounced. Thetrend of the industry concentrating on advantageous production areas, leading enterprises, andstrong brands is becoming more evident. In response, the Company will fully commit to expanding itsscale, continuously enhancing its development momentum, and seizing the three key highlands ofmarket, brand and quality. It will maintain confidence, take on responsibilities and resolutely makebreakthroughs in 2024.
11. Implementation of the action plan for "Dual Enhancement ofDevelopment Quality and Shareholder Returns"Indicate whether the Company has disclosed its action plan for "Dual Enhancement of DevelopmentQuality and Shareholder Returns".? Yes □ No
In accordance with the guiding ideology of "further invigorating the capital market and boosting investorconfidence" proposed at the Political Bureau meeting of the CPC Central Committee and "vigorouslyimproving the quality and investment value of listed companies, taking more powerful and effectivemeasures, and focusing on stabilizing the market and confidence" proposed at the State CouncilExecutive Meeting, in order to safeguard the interests of all shareholders, boost investor confidence,and promote the long-term healthy and sustainable development of the Company, Luzhou Laojiao Co.,Ltd. (hereinafter referred to as "the Company") has formulated its action plan for "Dual Enhancement ofDevelopment Quality and Shareholder Returns" in combination with the Company's developmentstrategy, business picture, and financial condition. The specific measures are as follows:
A. Strengthening confidence in strategic planning and aiming at the Company's developmentgoalsThe Company has formulated the "136" strategic plan for the 14th Five-Year Plan based on thedevelopment idea of "giving play to advantages, tackling areas of weaknesses, improving quality,building strength, and seeking rejuvenation". Specifically, "1" refers to one development goal, namely,firmly insisting on the goal of regaining the "Top 3" ranking among the Chinese baijiu industry; "3" refersto three major development principles, namely, insisting on brand leadership and fully enhancing thevalue of Chinese famous baijiu brands, insisting on taking quality as foundation and sparing no effortsto build a core production area of world famous baijiu, and insisting on take culture as the foundationand striving to build a pilgrimage site for Chinese baijiu culture; "6" refers to "Six-in-One" LuzhouLaojiao, namely, building a strong-brand Luzhou Laojiao, a quality Luzhou Laojiao, a cultural LuzhouLaojiao, an innovative Luzhou Laojiao, a digital and intelligent Luzhou Laojiao, and a harmoniousLuzhou Laojiao. Since the 14th Five-Year Plan period, the Company has firmly implemented the "136"development strategy, won key battles such as expanding production capacity, upgrading brands, andstrengthening teams, and has entered a stage of high-quality development. The National Cellar 1573brand achieved comprehensive coverage in the domestic market and was fully expanding in overseasmarkets; the Luzhou Laojiao brand built a strong basis in the granary market, and has gained a stableand penetrating presence in the opportunity market, with much good news of the revival of famousbaijiu; the breakthrough project of expanding key sales areas has been deeply promoted, marketconsumption has been further activated, and market share has been further increased. In terms ofdigital marketing and brand building, channel development and public relations empowerment, onlineexpansion and offline integration, and overseas layout and domestic boosting, a clearer and moreeffective path has been created with the characteristics of Luzhou Laojiao, which has madecontributions to the healthy and rapid development of the Company. During the 14th Five-Year Planperiod, the compound growth rate of the Company's net profit attributable to the parent companyreached 30.17%, and in the first half of 2024, operating revenue amounted to CNY 16.905 billion, up
15.84% year on year; the net profit attributable to the parent company reached CNY 8.028 billion, up
13.22% year on year; and various performance indicators reached a new historical high. Movingforward, the Company will continue to implement the development theme of "proceeding withconfidence, overcoming challenges, innovating, and collaborating", and strive for a comprehensivevictory in the key battle of the 14th Five-Year Plan, with a focus on the overall working idea of "aiming atone objective, focusing on three cores, and promoting six improvements".
B. Deeply promoting technological innovation and strengthening the transformation of scientific
research achievementsIn recent years, the Company has attached great importance to the development mode of innovationleading progress, integrated innovation forces, gathered innovation resources, tackled the frontier andcommon key technologies of the baijiu industry, and promoted the transfer and transformation ofachievements and industry sharing, thus promoting the transformation of the baijiu industry fromexperience oriented to technological oriented. This has made important contributions to thetechnological innovation, transformation and upgrading of the baijiu industry in China. First, theCompany has successfully established multiple major national-level technological innovation platforms,including the National Engineering Research Centre of Solid-State Brewing, the National IndustrialDesign Centre, and the National Postdoctoral Workstation. The Company has formed a comprehensivetechnological innovation platform system with the National Engineering Research Centre of Solid-StateBrewing as the R&D core, covering basic R&D, talent cultivation, and engineering transformation inmultiple fields, and has built a highland for technological innovation in the entire industry. Second, theCompany has continuously increased investment in technological innovation, research anddevelopment, and continuously enhanced its independent innovation capabilities. In the past five years,the total R&D investment reached CNY 659.97 million, and the compound annual growth rate ofinnovation R&D investment reached 24.69%. Third, the Company has actively carried out collaborativeinnovation between the Company, universities and research institutions, establishing cooperativerelationships with more than 30 universities and institutions such as Tsinghua University and ShanghaiJiao Tong University. Through various forms including joint laboratory building, joint undertaking ofmajor projects, joint training of talents, and establishment of open projects, the Company has carriedout extensive technical exchange and cooperation, forming a good pattern of diversified cooperation,innovative development, and mutual benefit between universities and the Company. Fourth, theCompany has attached great importance to the creation and protection of intellectual property rights,and regarded intellectual property building as an important development strategy for the Company. Thenumber of applications and authorisations for invention and utility model patents has maintained a rapidgrowth. Up to now, the Company has been granted 554 patents, including 196 invention patents and358 utility models, both of which are at the forefront of the industry. In the future, the Company willcontinue to leverage its advantages in scientific research platforms, talent, and publicity tocomprehensively consolidate Luzhou Laojiao's leading position in scientific research.
C. Highly valuing standardised operations and improving corporate governance levelThe Company has continuously consolidated the foundation of corporate governance, improved thecorporate governance structure, actively studied laws and regulations and the latest regulatory policies,and standardised the Company's management system. The Company has also clearly defined theresponsibilities and authorities of the Board of Directors, the Board of Supervisors, general meetings ofshareholders and the management in decision-making, execution, and supervision, and regulated therights and obligations of the Company and shareholders. The Company has vigorously promoted thesystematisation, standardisation, and digitalisation of corporate governance, synchronously enhancedthe information-based level in the Board of Directors, the Board of Supervisors and general meetings ofshareholders, and incorporated the building of the integrated securities business platform into the"digital and intelligent Luzhou Laojiao" system, to continuously improve the level of corporategovernance. In order to further improve the Company's risk management system and ensure that thedirectors, supervisors, and senior management of the Company fully perform their duties within their
scope of responsibilities, the Company has actively promoted the purchase of liability insurances fordirectors, supervisors, and senior management. Meanwhile, the Company has become the first listedcompany in the industry to sign a liability insurance agreement for directors, supervisors, and seniormanagement which has been approved by a general meeting of shareholders. In the future, theCompany will continue to promote information technology building to empower corporate governance,continuously improve operational efficiency and scientific decision-making level.
D. Fulfilling the information disclosure obligation compliantly and strictly guarding the defenceline of insider tradingThe Company takes standardised information disclosure as the bottom line, conducts informationdisclosure with high standards, and effectively respects and safeguards the legitimate rights andinterests of investors. First, the Company has established and improved a management system centredon major information internal reporting system, temporary and periodic report preparation procedure,insider information management system, and other policy documents, and continuously promoted thestandardised and procedural business work, to ensure accurate and rigorous information disclosure.Second, the Company has adhered to investor demand orientation, actively promoted voluntaryinformation disclosure, attached importance to the pertinence, readability, and effectiveness ofdisclosure content, and continuously improved the transparency of information disclosure of theCompany. The Company has been awarded the highest A grade in the information disclosureassessment of listed companies on the Shenzhen Stock Exchange for several consecutive years. In thefuture, the Company will continuously improve the transparency of information disclosure andcontinuously display information on the Company's operations at multiple levels, angles, anddimensions.
E. Efficiently carrying out investor relations activities and conveying the Company's investmentvalueThe Company has actively adapted to the needs of investor research and carried out investorrelationship management through a combination of "inviting in" and "going out" models. It has activelycommunicated with investors on industry hot topics, the Company's business picture, and developmentstrategies through the Shenzhen Stock Exchange investor interaction platform, establishment ofinvestor hotlines, improvement of investor relationship websites, hosting online collective receptiondays, and on-site investor surveys. In doing so, the Company has conveyed its investment value andsafeguarded investors' right to know. At the same time, the Company has adhered to investor demandorientation. Based on the continuous growth of overseas shareholders in recent years, the Companyhas innovatively used overseas accounts such as Facebook, twitter, and IG to simultaneously publishthe Company's performance promotion, shortened the disclosure time interval between Chinese andEnglish versions, and conducted overseas roadshows, to ensure the timeliness of informationacquisition for overseas investors. The Company held an online presentation of the 2023 annual resultson 9 May 2024. Mr. Liu Miao, chairman of the board, Mr. Liu Junhai, Mr. Chen You'an, Mr. Lyu Xianpeiand Mr. Li Guowang, non-executive directors, Ms. Xie Hong, CFO, and Mr. Li Yong, deputy generalmanager and secretary of the board, attended the presentation and answered the questions ofinvestors. Going forward, the Company will continue to build a two-way communication mechanism fora deep understanding and positive interaction with the capital market to transmit the Company's value.(The Company's investor relations website has been updated. Investors are welcome to visit
https://000568.iryi.com/).
F. Improving shareholder returns and safeguarding the legitimate rights and interests ofshareholdersThe Company adheres to the implementation of an active profit distribution policy, attaches importanceto reasonable returns to investors while considering the sustainable development of the Company, andmaintains the continuity and stability of profit distribution. The Company clearly stipulates in its Articlesof Association that the Company may distribute dividend in cash or stocks and the dividend should notbe less than 50% of the distributable profit realised for that year, and the profit to be distributed in cashshould not be less than 30% of the distributable profit realised for that year. Since its listing, theCompany has paid out a cumulative cash dividend amount of CNY 43.301 billion, 10.78 times theamount of equity refinancing, with a dividend payout ratio of 60.93%, ranking among the top amongmore than 5,000 listed companies in the Shanghai and Shenzhen stock markets. This has allowed allshareholders to fully share the Company's development achievements and effectively maintained theCompany's good image in the capital market. In the future, the Company will formulate reasonableprofit distribution policies while ensuring normal operation and long-term development, and effectivelyallow investors to share the fruits of the Company's growth and development.
G. Encouraging the controlling shareholder to actively increase its shareholdings to maintainthe stability of the capital marketBased on its recognition of the Company's long-term value and its firm belief in the Company'sdevelopment prospects, the controlling shareholder of the Company, Luzhou Laojiao Group Co., Ltd.,planned to increase its holdings in the Company through call auction trading within six months from 15December 2023, with a proposed increase amount of no less than CNY 200 million, effectivelymaintaining the stability of the capital market and boosting investor confidence. During the period of itsshareholding increase plan, Luzhou Laojiao Group Co., Ltd. increased its holdings in the Company by1,140,200 shares in total through centralised bidding trading, accounting for 0.08% of the total sharecapital of the Company, with a total amount of approximately CNY 200.9629 million. As such, theimplementation of the said shareholding increase plan has been completed.
Moving forward, the Company will focus on the development theme of "proceeding with confidence,overcoming challenges, innovating, and collaborating", actively take responsibility, keep diligent, andmake solid progress while striving for high-quality development. The Company will also firmly establisha sense of return to shareholders, effectively implement the "dual enhancement of development qualityand shareholder returns" action plan, significantly enhance investors' satisfaction, and activelycontribute to stabilizing the capital market and investor confidence.
Section IV Corporate Governance
1. Annual and extraordinary general meeting of shareholdersconvened during the reporting period
1.1 General meeting of shareholders convened during the reporting period
| Meeting | Type | Investor participation ratio | Date of the meeting | Date of disclosure | Resolution of the meeting |
| The 2023 Annual General Meeting of Shareholders | Annual General Meeting of Shareholders | 65.26% | 27 June 2024 | 27 June 2024 | Announcement No.: 2024-36 of Luzhou Laojiao Co., Ltd. on Resolutions of the 2023 Annual General Meeting of Shareholders (http://www.cninfo.com.cn/) |
1.2 Extraordinary general meetings of shareholders convened at the request ofpreference shareholders with resumed voting rights
? Applicable ? N/A
2. Changes in directors, supervisors, and senior management? Applicable □ N/A
| Name | Title | Type | Date | Reason |
| Zhang Suyi | Director | Elected | 27 June 2024 | |
| Li Liangchen | Non-executive director | Elected | 27 June 2024 | |
| Xiong Bo | Director | Elected | 27 June 2024 | |
| Zhou Lei | Supervisor | Elected | 27 June 2024 | |
| Zhang Li | Supervisor | Elected | 27 June 2024 | |
| Wang Hongbo | Director and Deputy general manager | Resignation | 2 February 2024 | Retirement |
| Liu Junhai | Non-executive director | Resignation upon the expiry of period of service | 27 June 2024 | |
| Gong Zhengying | Director | Resignation upon the expiry of period of service | 27 June 2024 | |
| Tang Shijun | Supervisor | Resignation upon the | 27 June 2024 |
| expiry of period of service | ||||
| Ou Fei | Supervisor | Resignation upon the expiry of period of service | 27 June 2024 |
3. Profit distribution and converting capital reserves into share capitalfor the reporting period? Applicable ? N/AThe Company has no interim dividend plan, either in the form of cash or stock.
4. Implementation of any equity incentive plan, employee stockownership plan or other incentive measures for employees? Applicable ? N/A
4.1. Equity incentives
A. On 21 February 2022, the Company disclosed the Announcement on the Completion of Registrationof Restricted Share Grant, completed the registration of the first grant of restricted shares. Upon theregistration of the grant, 6,862,600 restricted shares were granted to 437 objects, the grant price wasCNY 92.71 per share and the listing date was 22 February 2022.
B. On 25 July 2022, the Company held the 18th Meeting of the 10th Board of Directors and the NinthMeeting of the 10th Board of Supervisors and reviewed and approved the Proposal on the Grant ofReserved Restricted Shares to Awardees respectively. The independent directors consented to thismatter.
C. On 4 August 2022, the Board of Supervisors of the Company issued the review opinion, i.e.,Explanation on the Review and Announcement of the List of Awardees for the Reserved RestrictedShares of the 2021 Restricted Share Incentive Plan.
D. On 2 September 2022, the Company held the 22nd Meeting of the 10th Board of Directors and the13th Meeting of the 10th Board of Supervisors, at which the Proposal on the Repurchase andRetirement of Certain Restricted Shares and the Adjustment of Repurchase Price and the Proposal onthe Adjustment of the Granted Price of Reserved Restricted Shares of 2021 Restricted Share IncentivePlan were reviewed and approved respectively. In accordance with the relevant provisions of the
incentive plan of the Company and the authorization of the First Extraordinary General Meeting ofShareholders of 2021, the Board of Directors of the Company agreed to adjust the grant price andrepurchase price of the reserved restricted shares under the incentive plan from CNY 92.71 per shareto CNY 89.466 per share in view of the implementation of the Company's profit distribution plan for2021. The independent directors consented to this matter.
E. On 3 September 2022, the Company disclosed the Announcement on the Repurchase andCancellation of Some Restricted Shares to Reduce Registered Capital and Notice to Creditors. By theexpiration of the declaring period, the Company had not received any declaration from the relevantcreditors for early payout of debts or provision of guarantee.
F. On 26 September 2022, the Company disclosed the Announcement on the Completion of theRegistration of the Grant of the Reserved Restricted Shares under the 2021 Restricted Share IncentivePlan. Upon the registration of the grant of the reserved restricted shares, 342,334 restricted shareswere granted to 46 objects, the grant price was CNY 89.466 per share and the listing date was 28September 2022.
G. On 29 November 2022, the Company disclosed the Announcement on the Completion of theRepurchase and Cancellation of Some Restricted Shares. The Company proposed to repurchase andcancel a total of 62,310 restricted shares granted but not lifted from restricted sales. As at 29 November2022, the Company completed the aforesaid repurchase and cancellation of restricted shares.
H. On 29 December 2022, the Company held the 26th Meeting of the 10th Board of Directors and the15th Meeting of the 10th Board of Supervisors and reviewed and approved the Proposal on the Grant ofReserved Restricted Shares to Awardees respectively. The independent directors consented to thismatter.
I. On 13 January 2023, the Board of Supervisors of the Company issued the review opinion, i.e.,Explanation on the Review and Announcement of the List of Awardees for the Reserved RestrictedShares of the 2021 Restricted Share Incentive Plan.
J. On 16 February 2023, the Company disclosed the Announcement on the Completion of theRegistration of the Grant of the Reserved Restricted Shares under the 2021 Restricted Share IncentivePlan. Upon the registration of the grant of the reserved restricted shares, 92,669 restricted shares weregranted to 17 objects, the grant price was CNY 89.466 per share and the listing date was 17 February2023.
K. On 23 January 2024, the Company held the 38th Meeting of the 10th Board of Directors and the 20thMeeting of the 10th Board of Supervisors, at which the Proposal on the Repurchase and Retirement ofCertain Restricted Shares and the Adjustment of Repurchase Price and the Proposal on theSatisfaction of Unlocking Conditions for the First Unlocking Period of the 2021 Restricted ShareIncentive Plan were reviewed and approved respectively. In accordance with the relevant provisions ofthe incentive plan of the Company and the authorization of the First Extraordinary General Meeting ofShareholders of 2021, the Board of Directors of the Company agreed to adjust the grant price and
repurchase price of the reserved restricted shares under the incentive plan from CNY 89.466 per shareto CNY 85.241 per share in view of the implementation of the Company's profit distribution plan for2022. Meanwhile, as the unlocking conditions had been satisfied for the first unlocking period of the2021 Restricted Share Incentive Plan, a total of 2,734,640 restricted shares held by 435 eligibleawardees were unlocked for public trading on 22 February 2024. On 24 January, the Companydisclosed the Announcement on the Repurchase and Cancellation of Some Restricted Shares toReduce Registered Capital and Notice to Creditors. By the expiration of the declaring period, theCompany had not received any declaration from the relevant creditors for early payout of debts orprovision of guarantee.
L. On 22 February 2024, the Company disclosed the Reminder Announcement on Unlocked Shares inthe First Unlocking Period of the 2021 Restricted Share Incentive Plan Being Allowed for Public Trading.As such, the unlocked restricted shares in the first unlocking period of the 2021 Restricted ShareIncentive Plan were allowed for public trading on 22 February 2024.
M. On 4 June 2024, the Proposal on the Repurchase and Cancellation of Some Restricted Shares wasapproved at the 40
th Meeting of the 10
th Board of Directors and the 22
ndMeeting of the Board ofSupervisors, respectively. On 5 June, the Company disclosed the Announcement on the Repurchaseand Cancellation of Some Restricted Shares to Reduce Registered Capital and Notice to Creditors. Bythe expiration of the declaring period, the Company had not received any declaration from the relevantcreditors for early payout of debts or provision of guarantee.
4.2. Implementation of employee stock ownership plans
? Applicable ? N/A
4.3. Other incentive measures for employees
? Applicable ? N/A
Section V Environmental and Social Responsibility
1. Information about environment protection
Whether the listed company and its subsidiaries belong to heavy polluting industries prescribed bythe environmental protection department? Yes □ No
Policies and industry standards on environmental protectionIn the process of production and operation, the Company strictly follow the laws, regulations andindustry standards related to environmental protection, such as the Environmental Protection Law ofthe People's Republic of China, Law of the People's Republic of China on Environmental ImpactAssessment, Law of the People's Republic of China on Atmospheric Pollution Prevention and Control,Law of the People's Republic of China on Water Pollution Prevention and Control, AdministrativeMeasures for the Legal Disclosure of Enterprise Environmental Information, Regulations on theAdministration of Environmental Protection of Construction Projects of the People's Republic of China,Regulations on Administration of Pollutant Discharge Permits, Policies and Industry Standards onEnvironmental Protection, Standard for Pollution Control on Hazardous Waste Storage, Standards forthe Emission of Water Pollutants in the Fermented Alcohol and Baijiu Industry, Regulations on thePrevention and Control of Environmental Pollution by Solid Waste in Sichuan Province, andRegulations on Environmental Protection of Sichuan Province.
Environmental protection administrative permissionIn the first half of 2024, the Company obtained six ecological and environmental administrativepermits, including a total of three permits for change and renewal of discharge permits and threeapproval of environmental impact assessment reports.
| Name of permit | Administrative permit No. | Review and issuance authority | Acquiring time | Valid term | Permitted matter | Remark |
| Discharge Permit for Luzhou Laojiao Co., Ltd. (Huangyi Brewery Eco-Park) | 91510500204706718H004Q | Luzhou Municipal Ecology and Environment Bureau | 2 February 2024 | 5 years | Permitted annual discharge limits for wastewater: 480.5t/a for chemical oxygen demand (COD), 36.1t/a for ammonia nitrogen, 62.5t/a for total nitrogen (TN), and 3.6t/a for total phosphorus (TP). | Re-application |
| Discharge Permit for Luzhou Laojiao Co., Ltd. (National Cellar and Zaojiaoxiang Brewery Bases) | 91510500204706718H003Q | Luzhou Municipal Ecology and Environment Bureau | 6 January 2024 | 5 years | / | Change |
| Discharge Permit for Luzhou Laojiao Co., Ltd. (Luohan Brewery Eco-Park) | 91510500204706718H001V | Luzhou Municipal Ecology and Environment Bureau | 8 January 2024 | 5 years | Permitted annual discharge limits for exhaust gas: PM:1.1t/a, Nitrogen oxide: 45.4t/a; Permitted annual discharge limits for wastewater: 23.183t/a for chemical oxygen demand (COD), 2.017t/a for ammonia nitrogen, 5.796t/a for total nitrogen (TN), and 0.232t/a for total phosphorus (TP). | Change |
| Reply to the Report of Sichuan Luzhou Baijiu Industrial Park (Huangyi) on the Environmental Impact of Thermoelectric Cogeneration Expansion Project (Phase I) | L.SH.H.J.H. [2024] No. 10 | Luzhou Municipal Ecology and Environment Bureau | 10 January 2024 | / | In the Luzhou Laojiao Huangyi Brewery Eco-Park within Sichuan Luzhou Baijiu Industrial Park, two new gas boilers (220 t/h) with one in use and one as a backup and one back pressure turbine generator (21 MW) will be installed. Auxiliary facilities will be constructed, including the fuel handling system, demineralised water system, compressed air system, water supply and drainage system and fire protection system. | Newly acquired |
| Reply to the Report of Luzhou Laojiao Brewing Co., Ltd. on the Environmental Impact of Thermochemical Energy- and Resource-based Coupled Utilisation Technology of Brewing Waste | L.SH.H.J.H. [2024] No. 33 | Luzhou Municipal Ecology and Environment Bureau | 12 March 2024 | / | In Sichuan Luzhou Baijiu Industrial Park, a production line for the resource- and energy-based utilisation of disposed grains will be built, processing distiller's 50,450.45 tonnes of grains per year and producing 2,880 tonnes of biochar per year and 15,192.68 tonnes of grain residue per year. | Newly acquired |
| Reply to the Report of Luzhou Laojiao Brewing Co., Ltd. on the Environmental Impact of Luzhou Laojiao Technical Upgrade Project of Intelligent Brewing (Phase I & II) | L.SH.H.J.H. [2024] No. 35 | Luzhou Municipal Ecology and Environment Bureau | 18 April 2024 | / | The project will be expanded in phases. Phase I includes the construction of two brewing workshops, nine semi-open liquor rooms, a sorghum pretreatment area, a rice husk pretreatment area, a circulating water station, a maintenance workshop, and an air compression station, adding a production capacity of 80,000 tonnes per year for strong aromatic base baijiu and a storage capacity of 104,000 tonnes for base baijiu. Phase II involves the construction of 10 ceramic liquor rooms, adding a | Newly acquired |
Industry discharge standards and pollutants in producing and operating activities
| Company name | Type of main pollutant and particular pollutant | Name of main pollutant and particular pollutant | Discharge type | Number of discharge outlet | Distribution of discharge outlet | Emission concentration/intensity | Pollution discharge standard | Total emission | Approved total emission | Excessive discharge |
| Luzhou Laojiao Co., Ltd. | Water pollutant | COD | Direct discharge | 1 | Luohan Brewery Eco-Park | 19.651mg/L | 50mg/L | 4.0932t | 23.183t/a | No |
| Luzhou Laojiao Co., Ltd. | Water pollutant | Ammonia nitrogen | Direct discharge | 1 | Luohan Brewery Eco-Park | 0.548mg/L | 5mg/L | 0.0984t | 2.017t/a | No |
| Luzhou Laojiao Co., Ltd. | Water pollutant | Total nitrogen | Direct discharge | 1 | Luohan Brewery Eco-Park | 8.256mg/L | 15mg/L | 1.6771t | 5.796t/a | No |
| Luzhou Laojiao Co., Ltd. | Water pollutant | Total phosphorus | Direct discharge | 1 | Luohan Brewery Eco-Park | 0.066mg/L | 0.5mg/L | 0.0142t | 0.232t/a | No |
| Luzhou Laojiao Co., Ltd. | Air pollutant | PM | Organized discharge | 3 | Luohan Brewery Eco-Park | 0.945mg/m3 | 20mg/m3 | 0.0664t | 1.1t/a | No |
| Luzhou Laojiao Co., Ltd. | Air pollutant | Sulfur dioxide | Organized discharge | 3 | Luohan Brewery Eco-Park | 0.567mg/m3 | 50mg/m3 | 0.0582t | / t/a | No |
| Luzhou Laojiao Co., Ltd. | Air pollutant | Oxynitride | Organized discharge | 3 | Luohan Brewery Eco-Park | 24.689mg/m3 | 150mg/m3 | 2.318t | 45.400t/a | No |
| Luzhou Laojiao Co., Ltd. | Water pollutant | COD | Indirect discharge | 1 | Huangyi Brewery Eco-Park | 32.798mg/L | 400mg/L | 10.9524t | 480.5t/a | No |
| Luzhou Laojiao Co., Ltd. | Water pollutant | Ammonia nitrogen | Indirect discharge | 1 | Huangyi Brewery Eco-Park | 1.206mg/L | 30mg/L | 0.3488t | 36.1t/a | No |
| Luzhou Laojiao Co., Ltd. | Water pollutant | Total nitrogen | Indirect discharge | 1 | Huangyi Brewery Eco-Park | 18.538mg/L | 50mg/L | 6.2667t | 62.5t/a | No |
| Luzhou Laojiao Co., Ltd. | Water pollutant | Total phosphorus | Indirect discharge | 1 | Huangyi Brewery Eco-Park | 0.849mg/L | 3.0mg/L | 0.288t | 3.6t/a | No |
| Luzhou Laojiao Brewing Co., Ltd. | Air pollutant | Dust | Organized discharge | 2 | Energy Center of Sichuan Luzhou Baijiu Industrial Park | 0.810mg/m3 | 5mg/m3 | 0.2829t | 8.640t/a | No |
| Luzhou Laojiao Brewing Co., Ltd. | Air pollutant | PM | Organized discharge | 1 | Energy Center of Sichuan Luzhou Baijiu Industrial Park | 1.003mg/m3 | 20mg/m3 | 0.0093t | ||
| Luzhou Laojiao Brewing Co., Ltd. | Air pollutant | Sulfur dioxide | Organized discharge | 2 | Energy Center of Sichuan Luzhou Baijiu Industrial Park | 0.431mg/m3 | 35mg/m3 | 0.1687t | 18.880t/a | No |
| Luzhou Laojiao Brewing Co., Ltd. | Air pollutant | Sulfur dioxide | Organized discharge | 1 | Energy Center of Sichuan Luzhou | 0.475mg/m3 | 50mg/m3 | 0.0047t |
storage capacity of 56,000tonnes for base baijiu. Uponcompletion of the project, theentire plant will have an annualproduction capacity of 205,000tonnes of strong aromatic basebaijiu and a storage capacity of540,000 tonnes for base baijiu.
| Baijiu Industrial Park | ||||||||||
| Luzhou Laojiao Brewing Co., Ltd. | Air pollutant | Oxynitride | Organized discharge | 2 | Energy Center of Sichuan Luzhou Baijiu Industrial Park | 30.045mg/m3 | 100mg/m3 | 10.25521t | 136.080t/a | No |
| Luzhou Laojiao Brewing Co., Ltd. | Air pollutant | Oxynitride | Organized discharge | 1 | Energy Center of Sichuan Luzhou Baijiu Industrial Park | 51.790mg/m3 | 150mg/m3 | 0.2722t |
Treatments of pollutantsA. Waste water: Areas of the Company that produce wastewater are National Cellar Brewery Base,Zaojiaoxiang Brewery Base, Xiaoshi Brewery Base, Anning Technology Park, Luohan Brewery Eco-Park, and Huangyi Brewery Eco-Park. In National Cellar Brewery Base, Zaojiaoxiang Brewery Base,Xiaoshi Brewery Base, and Anning Technology Park, the high-concentration brewing wastewater istemporarily collected in pools (or tanks), and is later transferred to the wastewater treatment station ofHuangyi Brewery Eco-Park by truck for treatment. The wastewater treatment stations of LuohanBrewery Eco-Park and Huangyi Brewery Eco-Park are equipped with online monitors to automaticallymonitor COD, ammonia nitrogen, total phosphorus, total nitrogen, pH value and flows, and transmit themonitoring data to the supervision platform of the higher authority. The Company's facilities forprevention and control of wastewater pollution are under normal operations, ensuring up-to-standarddischarge through general discharging outlets. Compared with last year, suspended matter dischargewas reduced by 7.80%, and Five-day BOD discharge by 5.89%.
B. Waste gas: Areas of the Company that produce exhaust gas are National Cellar Brewery Base,Zaojiaoxiang Brewery Base, Xiaoshi Brewery Base, Luohan Brewery Eco-Park, and Huangyi BreweryEco-Park. In National Cellar Brewery Base, natural gas boilers are used, while in Xiaoshi Brewery Baseand Zaojiaoxiang Brewery Base, direct-fired bottom boilers are used. The natural gas boilers of LuohanBrewery Eco-Park (20t/h, 30t/h) and the natural gas boilers of Huangyi Brewery Eco-Park (20t/h, 75t/h,75t/h) are equipped with online monitors to automatically monitor exhaust gas, and transmit themonitoring data to the supervision platform of the higher authority. Low NOx combustion technology isadopted for the natural gas boilers. The Company's facilities for prevention and control of exhaust gaspollution are under normal operations, ensuring up-to-standard emission of exhaust gas through outlets.Compared with last year, PM discharge was reduced by 31.48%, and Nitrogen oxide discharge by
34.45%.
Emergency plan for environmental emergenciesIn 2023, the Company renewed the Contingency Plan for Environmental Emergencies in JiangyangDistrict of Luzhou Laojiao Co., Ltd. (2023), the Contingency Plan for Environmental Emergencies inLongmatan District of Luzhou Laojiao Co., Ltd. (2023), and the corresponding Report onEnvironmental Emergency Resource Investigation, Environmental Risk Assessment Report, SpecialContingency Plan and On-site Disposal Plan.
Input in environmental management and protection and the payment of environmental protection-related taxesDuring the Reporting Period, more than CNY 5.66 million was input in environmental governance andprotection, and CNY 70.9 thousand was paid in environmental protection tax as required.
Environmental self-monitoring plan
| Unorganized monitoring points 1#-4# for the exhaust gas emission outlets of Luohan Brewery Eco-Park | Odor concentration | Emission Standards for Odor Pollutants (GB14554- 93) | 20 (dimensionless) | 1 time/half-year | Manual | 100% |
| Hydrogen sulfide | 0.06 mg/m3 | |||||
| Ammonia | 1.5 mg/m3 | |||||
| NMHC | / | / | ||||
| Particulate matters | Integrated Emission Standards for Air Pollutants (GB16297-1996) | 1mg/m3 | ||||
| Exhaust gas emission outlets DA022, DA021 (unused) and DA020 of Luohan Brewery Eco-Park | Ringelman emittance | Emission Standards for Air Pollutants for Boiler (GB13271-2014) | ≤1 | 1 time/quarter | Manual | 100% |
| Nitrogen oxide | 150mg/m3 | Automatic | ||||
| Particulate matters | 20mg/m3 | |||||
| Sulfur dioxide: | 50mg/m3 | |||||
| Exhaust gas emission outlet DA019 of Luohan Brewery Eco-Park | Hydrogen sulfide | Emission Standards for Odor Pollutants (GB14554- 93) | 1.8kg/h | 1 time/half-year | Manual | 100% |
| Ammonia | / 27kg/h | |||||
| Odor concentration | 15000 (dimensionless) / | |||||
| Exhaust gas emission outlet DA017 of Luohan Brewery Eco-Park | NMHC | / | / | 1 time/quarter | Manual | 100% |
| Exhaust gas emission outlets DA001-DA016 (DA008 is not used) of Luohan Brewery Eco-Park | Particulate matters | Integrated Emission Standards for Air Pollutants (GB16297-1996) | 120 mg/m3 | 1 time/half-year | Manual | 100% |
| Main outlet DW001 of the wastewater treatment station of Luohan Brewery Eco-Park | Flow | Standards for the Emission of Water Pollutants in the Fermented Alcohol and Baijiu Industry (GB27931-2011) | / | 1 time/quarter | Automatic | 100% |
| PH value | 6-9 | |||||
| COD | 50 mg/L | |||||
| Ammonia nitrogen | 5 mg/L | |||||
| TP | 0.5 mg/L | |||||
| TN | 15 mg/L | |||||
| Suspended solids | 20 mg/L | 1 time/month | Manual | |||
| Five-day BOD | 20mg/L | |||||
| Chroma | 20 | |||||
| Rainwater outlets DW002-DW006 of Luohan Brewery Eco-Park | Suspended solids | Standards for the Emission of Water Pollutants in the Fermented Alcohol and Baijiu Industry (GB2731-2011) | 20 mg/L | 1 time/month (1 time/quarter in case of no abnormalities monitored) | Manual | 100% |
| COD | 50 mg/L | |||||
| Noise monitoring points 1-4# at the boundary of Luohan Brewery Eco-Park | Boundary noise | Emission Standard for Noise of Industrial Enterprises at Boundary (GB12348-2008) | Daytime: 60 dB (A); nighttime: 50 dB (A) | 1 time/quarter | Manual | 100% |
| Circulating cooling water outlet DW002 of the Energy Center of Sichuan Luzhou Baijiu Industrial Park | Flow | / | / | 1 time/quarter | Automatic | 100% |
| PH value | / | Manual | ||||
| COD | / | |||||
| TP | / | |||||
| Wastewater outlet DW001 of the Energy Center of Sichuan Luzhou Baijiu Industrial Park | PH value | Integrated Wastewater Discharge Standard (GB8978-1996), Level 3 and the requirements for the park's wastewater treatment | 6-9 | 1 time/quarter | Manual | 100% |
| Total dissolved solids (TDS) | / | |||||
| Suspended solids | 140mg/L | |||||
| Five-day BOD | 80mg/L | |||||
| COD | 400mg/L | |||||
| TN | 50mg/L | |||||
| Ammonia nitrogen | 30mg/L |
| TP | 3mg/L | |||||
| Boiler exhaust gas vents DA001-DA002 of the Energy Center of Sichuan Luzhou Baijiu Industrial Park | Ringelman emittance | Emission Standard of Air Pollutants for Thermal Power Plants (GB13223-2011) | ≤1 | 1 time/quarter | Manual | 100% |
| Nitrogen oxide | 100mg/m3 | Automatic | ||||
| Soot | 5mg/m3 | |||||
| Sulfur dioxide: | 35mg/m3 | |||||
| Boiler exhaust gas vent DA003 of the Energy Center of Sichuan Luzhou Baijiu Industrial Park | Ringelman emittance | Emission Standards for Air Pollutants for Boiler (GB13271-2014) | ≤1 | 1 time/quarter | Manual | 100% |
| Nitrogen oxide | 150mg/m3 | Automatic | ||||
| Particulate matters | 20mg/m3 | |||||
| Sulfur dioxide: | 50mg/m3 | |||||
| Rainwater outlets DW004-DW010 of Huangyi Brewery Eco-Park | Suspended solids | Standards for the Emission of Water Pollutants in the Fermented Alcohol and Baijiu Industry (GB2731-2011) | 50mg/L | 1 time/month (1 time/quarter in case of no abnormalities monitored) | Manual | 100% |
| COD | 100mg/L | |||||
| Unorganized monitoring points 1#-4# at the boundary of Huangyi Brewery Eco-Park | Odor concentration | Emission Standards for Odor Pollutants (GB14554-93) | 20 (dimensionless) | 1 time/quarter | Manual | 100% |
| Hydrogen sulfide | 0.06mg/m3 | |||||
| Ammonia | 1.5mg/m3 | |||||
| NMHC | / | / | ||||
| Particulate matters | Integrated Emission Standards for Air Pollutants (GB16297-1996) | 1mg/m3 | ||||
| DA041 and DA042 of Huangyi Brewery Eco-Park | Odor concentration | Emission Standards for Odor Pollutants (GB14554- 93) | 2000 (dimensionless) / | 1 time/half-year | Manual | 100% |
| Ammonia | / 4.9kg/h | |||||
| Hydrogen sulfide | / 0.33kg/h | |||||
| DA096-DA097 of Huangyi Brewery Eco-Park | NMHC | / | / | 1 time/quarter | Manual | 100% |
| DA034-DA040, DA043-DA070, DA076-DA086, DA088-DA095, DA098, and DA099 (DA034 and DA035 are not used) of Huangyi Brewery Eco-Park | Particulate matters | Integrated Emission Standards for Air Pollutants (GB16297-1996) | 120mg/m3 | 1 time/half-year | Manual | 100% |
| Main outlet of the wastewater treatment station of Huangyi Brewery Eco-Park | Flow | Standards for the Emission of Water Pollutants in the Fermented Alcohol and Baijiu Industry (GB2731-2011) | / | 1 time/quarter | Automatic | 100% |
| PH value | 6-9 | |||||
| COD | 400mg/L | |||||
| Ammonia nitrogen | 30mg/L | |||||
| TP | 3mg/L | |||||
| TN | 50mg/L | |||||
| Suspended solids | 140mg/L | 1 time/quarter | Manual | |||
| Five-day BOD | 80mg/L | |||||
| Chroma | 80 | |||||
| Noise monitoring points 1-4# at the boundary of Huangyi Brewery Eco-Park | Boundary noise | Emission Standard for Noise of Industrial Enterprises at Boundary (GB12348-2008) | Daytime: 65 dB (A); nighttime: 55 dB (A) | 1 time/quarter | Manual | 100% |
| Unorganized monitoring points 1#-7# at Xiaoshi Brewery Base | Odor concentration | Emission Standards for Odor Pollutants (GB14554- 93) | 20 | 1 time/half-year | Manual | 100% |
| NMHC | / | / | ||||
| Boiler exhaust gas vents DA001-DA010 of Xiaoshi Brewery Base | Ringelman emittance | Emission Standards for Air Pollutants for Boiler (GB13271-2014) | ≤1 | 1 time/year | Manual | 100% |
| PM | 20mg/m3 | |||||
| Sulfur dioxide: | 50mg/m3 | |||||
| Nitrogen oxide | 150mg/m3 | 1 time/month | ||||
| Noise monitoring points at the boundary of Xiaoshi Brewery Base | Boundary noise | Emission Standard for Noise of Industrial Enterprises at Boundary (GB12348-2008) | Daytime: 60 dB (A) | 1 time/quarter | Manual | 100% |
| Unorganized monitoring points of National Cellar and Zaojiaoxiang Brewery Bases | Odor concentration | Emission Standards for Odor Pollutants (GB14554- 93) | 20 | 1 time/half-year | Manual | 100% |
| NMHC | / | / | ||||
| Boiler exhaust gas vents DA001-DA003 of National Cellar and Zaojiaoxiang | Ringelman emittance | Emission Standards for Air Pollutants for Boiler (GB13271- | ≤1 | 1 time/year | Manual | 100% |
| PM | 20mg/m3 |
| Brewery Bases | Sulfur dioxide: | 2014) | 50mg/m3 | |||
| Nitrogen oxide | 150mg/m3 | 1 time/month | ||||
| Noise monitoring points at the boundary of National Cellar and Zaojiaoxiang Brewery Bases | Boundary noise | Emission Standard for Noise of Industrial Enterprises at Boundary (Class 4 for street frontage) | Daytime: 60 dB (A) (70dB on the south side) | 1 time/quarter | Manual | 100% |
| Rainwater outlet DW003 of National Cellar and Zaojiaoxiang Brewery Bases | Suspended solids | Standards for the Emission of Water Pollutants in the Fermented Alcohol and Baijiu Industry (GB2731-2011) | 20mg/L | 1 time/month (1 time/quarter in case of no abnormalities monitored) | Manual | 100% |
| COD | 50mg/L |
Administrative penalties received in the reporting period due to environmental issues
| The Company or subsidiary | Reason for penalties | Regulation violated | Penalties | Impact on the Company | Rectification |
| N/A | |||||
Other information about environmental protection that should be disclosedN/A
Measures taken to reduce carbon emissions during the reporting period and the results? Applicable ? N/AThe Company reduced CO2 emissions through resource recycling. It developed a WSR energy-saving system for bran steamers, and achieved the pressure recovery and utilization of waste heatsteam through the exchange of waste heat steam of the bran steamer. During the Reporting Period,the energy-saving system saved steam of approximately 8,940 tons and reduced carbon dioxide ofapproximately 810 tons. The Company recycled the marsh gas generated from the wastewatertreatment process as boiler fuel, with more than 2.07 million cubic meters of marsh gas recycledduring the Reporting Period, and more than 3,260 tons of carbon dioxide emissions were reduced.
Other information about environment protectionN/A
2. Social responsibility
The Company deeply implemented General Secretary Xi Jinping's important discourse on coordinatedregional development and fully executed the provincial government's development strategy of"synchronising new industrialisation, informatisation, urbanisation, and agricultural modernisation, alongwith urban-rural integration and the common prosperity of five zones". Following the principle of "whatthe locality needs is what the enterprise can provide”, it formulated and launched a series of targeted,beneficial, and forward-looking key projects in Hongyuan County and Gulin County, effectivelyadvancing supportive assistance and rural revitalisation efforts. In the first half of the year, theCompany invested a total of CNY 1.946 million.First, the Company leveraged its strengths to support characteristic industries. It distributedchicks to farmers, aiding the development of courtyard economies in Xiangtian Village, Gulin County. A
professional team was established to promote the construction of a demonstration base for industrialassistance in Dongxin Town, Gulin County, facilitating the upgrade and growth of the kiwifruit industryfor sustained efficiency improvement. Second, capacity-building initiatives were carried out tocultivate talent for increasing income. The Company implemented the youth training programme inHongyuan County, offering e-commerce training courses that align with modern trends. Several expertsfrom Chengdu were engaged to provide training and practical exercises in areas such as industrialtechnology, animal husbandry, veterinarian services, rural water supply and e-commerce forentrepreneurial youth in Hongyuan County. By delivering technology and sharing experiences, theCompany aimed to develop a team of industry leaders who are capable, committed, and rooted in thecounty. Third, consumption assistance was advanced to benefit local residents' income growth.The Company encouraged employees to participate in the "purchase instead of donation and creatingwealth through sales" activity by buying local speciality agricultural products such as Hongyuan yakbeef, yak milk powder, yak jerky, and Xiangtian Village highland rice. This effort has generated CNY
1.431 million in revenue for farmers, ensuring their ongoing and stable income growth. Fourth,infrastructure shortcomings were addressed to improve the living environment. The Companycarried out a heating facility upgrade project to ensure safe heating security for 160 households in thewinter, focusing on resolving community issues and improving county-level public services. Fifth,organisational collaboration was deepened to enhance the level of rural governance. TheCompany dispatched five middle management personnel and party members to villages for pairedassistance, investing manpower and funds into rural governance. Activities such as moral awards andrecognition of exemplary models were organised. Regular visits and support were conducted forhouseholds at risk of returning to poverty, households on the edge of poverty, and severelydisadvantaged households. The Company also implemented the "I do practical things for the public"activity and addressed over 20 urgent problems for residents, including transportation, healthcare andemployment, thereby advancing harmony and stability. Sixth, traditional culture was advocated toenhance spiritual civilisation construction. The Company supported the organisation of festivalactivities and implemented projects to promote traditional culture. It engaged thousands of communitymembers in grand cultural festivals, preserving the community's spiritual essence and invigorating thevitality of excellent traditional local culture.In the second half of the year, the Company will execute more missions through more concretemeasures. It will align its strengths with county-level urgent needs, striving to develop a series ofprojects that meet the requirements of the assisted areas while leveraging the Company's capabilities.These projects will be influential, exemplary, and capable of driving growth, transforming the uniqueresource endowments of the counties into significant momentum for regional revitalisation and incomegeneration for the community, thus promoting high-quality economic and social development inHongyuan County and Gulin County.
Section VI Significant Events
1. Undertakings of the Company's actual controller, shareholders,related parties and acquirer, as well as the Company and othercommitment makers fulfilled in the reporting period or ongoing by theend of this reporting period? Applicable ? N/ANo such cases in the reporting period.
2. Occupation of the Company's fund by the controlling shareholder orits related parties for non-operating purposes? Applicable ? N/ANo such cases in the reporting period.
3. Irregularities in the provision of guarantees
? Applicable ? N/ANo such cases in the reporting period.
4. Engagement and disengagement of CPAs firmAre the interim financial statements audited?
□ Yes ? No
The interim financial statements are not audited.
5. Explanation of the board of directors and the board of supervisorsregarding the "Non-standard audit opinion" for the reporting period? Applicable ? N/A
6. Explanations of the board of directors regarding the "Non-standardaudit opinion" of Last Year? Applicable ? N/A
7. Bankruptcy and reorganization
? Applicable ? N/ANo such cases in the reporting period.
8. Litigation
Material litigation and arbitration? Applicable ? N/A
| Profile of litigation (arbitration) | Amount involved in the case (CNY 10,000) | Whether it forms an estimate liability | Progress in litigation (arbitration) | Trial results and impacts of litigation (arbitration) | Execution of judgment of litigation (arbitration) | Date of disclosure | Disclosure index |
| The Company filed a lawsuit with ABC Changsha Yingxin Branch over a deposit dispute, and the case has been completed in the first instance of Hunan Province Higher People's Court and the final trial of the Supreme People's Court. The case is now at the stage of enforcement. | 14,942.5 | No | The second trial has been concluded, and the case is now at the stage of enforcement. | For the losses that the Company cannot recover through criminal execution procedures, 40% shall be borne by ABC Changsha Yingxin Branch, 20% shall be borne by ABC Changsha Hongxin Branch and the rest shall be borne by the Company itself. | The Company applied to Hunan Province Higher People's Court for enforcement of the verdict. Hunan Province Higher People's Court ruled that Hunan Changsha Intermediate People’s Court should see to the execution of the verdict. Upon the enforcement, the banks have paid part of the | 15 October 2014 | See Section VI “Other significant events” |
| compensations. | |||||||
| The Company filed a lawsuit with ICBC Nanyang Zhongzhou Branch over a deposit dispute, and the case has been completed in the first instance of Henan Province Higher People's Court and the final trial of the Supreme People's Court. The case is now at the stage of enforcement. | 15,000 | No | The second trial has been concluded, and the case is now at the stage of enforcement. | ICBC Nanyang Zhongzhou Branch, ICBC Nanyang Branch, and Sanya Rural Commercial Bank Hongsha Branch shall pay compensations of CNY 75 million, CNY 7.5 million and CNY 6.105 million respectively with the relevant interest to the Company, and the rest of the loss shall be borne by the Company itself. | The banks have paid part of the compensations. As there was a dispute over the verdict, the Company applied to Henan Province Higher People's Court for enforcement of the verdict. Henan Province Higher People's Court ruled that Nanyang Intermediate People’s Court should see to the execution of the verdict. The case is now at the stage of enforcement by Nanyang Intermediate People’s Court. | 10 January 2015 | See Section VI “Other significant events” |
Other litigation? Applicable ? N/A
| Profile of litigation (arbitration) | Amount involved in the case (CNY 10,000) | Whether it forms an estimate liability | Progress in litigation (arbitration) | Trial results and impacts of litigation (arbitration) | Execution of judgment of litigation (arbitration) | Date of disclosure | Disclosure index |
| Other litigations that do not meet the standard of a material litigation which is required to be disclosed | 602 | No | Pending | No significant impact | Pending |
9. Punishments and rectifications
? Applicable ? N/ANo such cases in the reporting period.
10. Credit conditions of the Company as well as its controllingshareholder and actual controller? Applicable ? N/A
11. Significant related party transactions
11.1. Related party transactions arising from routine operation
? Applicable ? N/ANo such cases in the reporting period.
11.2. Related party transactions regarding purchase or sales of assets or equityinterests? Applicable ? N/ANo such cases in the reporting period.
11.3. Related party transitions arising from joint investments in external parties? Applicable ? N/ANo such cases in the reporting period.
11.4. Credits and liabilities with related parties
? Applicable ? N/ANo such cases in the reporting period.
11.5. Transactions with related finance companies
? Applicable ? N/AThe Company did not make deposits in, receive loans or credit from and was not involved in anyother finance business with any related finance company or any of its related parties.
11.6. Transactions between finance companies controlled by the Company andrelated parties
? Applicable ? N/ANo related parties made deposits in, received loans or credit from or was involved in any otherfinance business with any finance company controlled by the Company.
11.7. Other significant related party transactions
? Applicable ? N/ANo such cases in the reporting period.
12. Significant contracts and their execution
12.1. Trusteeship, contracting and leasing
12.1.1. Trusteeship
? Applicable ? N/ANo such cases in the reporting period.
12.1.2. Contracting
? Applicable ? N/ANo such cases in the reporting period.
12.1.3. Leasing
? Applicable ? N/ANo such cases in the reporting period.
12.2. Major guarantees
? Applicable ? N/ANo such cases in the reporting period.
12.3. Entrust assets management
? Applicable ? N/A
Unit: CNY 10,000
| Type | Fund source for entrusted assets management | Amount of entrusted assets management | Undue balance | Overdue outstanding amount | Impairment allowances for the overdue outstanding amount |
| Wealth management product of securities company | Own funds | 66,000 | 0 | 0 | 0 |
| Total | 66,000 | 0 | 0 | 0 | |
Particulars of high risk wealth management products with a significant single amount, low security,poor liquidity or no principal protection? Applicable ? N/A
Expected inability to recover the principal of entrusted assets management or other circumstancesthat may result in impairment? Applicable ? N/A
12.4. Other significant contracts
? Applicable ? N/ANo such cases in the reporting period.
13. Other significant events
? Applicable ? N/AThe Company disclosed in October 2014 and January 2015 respectively the contract disputesinvolving three savings deposits of CNY 500 million in total with banks including ABC ChangshaYingxin Branch and ICBC Nanyang Zhongzhou Branch. Upon criminal booty recovery, criminal andcivil enforcement, as of the date of this Report, the Company had recovered a total amount of CNY373 million for the three disputes.
See details in the Company’s announcements:
| Date of announcement | No. | Catalogue | Official website |
| 15 October 2014 | 2014-35 | Announcement of significant litigation | http://www.cninfo.com.cn/ |
| 12 November 2014 | 2014-41 | Announcement of significant litigation progress | |
| 6 December 2014 | 2014-43 | Announcement of significant litigation progress part II | |
| 10 January 2015 | 2015-1 | Announcement of significant events |
| 4 February 2015 | 2015-4 | Announcement of significant events progress |
| 25 March 2015 | 2015-11 | Announcement of significant litigation progress part III |
| 18 April 2015 | 2015-20 | Announcement of significant litigation progress part IV |
| 22 April 2015 | 2015-21 | Announcement of significant events progress part II |
| 24 April 2015 | 2015-25 | Announcement of significant litigation progress part V |
| 15 July 2015 | 2015-44 | Announcement of significant litigation progress part VI |
| 22 July 2015 | 2015-45 | Announcement of significant litigation progress part VII |
| 6 June 2018 | 2018-17 | Announcement of significant litigation progress part VIII |
| 7 May 2019 | 2019-11 | Announcement of significant litigation progress part IX |
| 17 May 2019 | 2019-13 | Announcement of significant litigation progress part X |
| 24 March 2020 | 2020-6 | Announcement of significant litigation progress part XI |
| 6 May 2020 | 2020-14 | Announcement of significant litigation progress part XII |
| 7 November 2020 | 2020-34 | Announcement of significant litigation progress part XIII |
| 6 July 2021 | 2021-30 | Announcement of significant litigation progress part XIV |
| 15 December 2021 | 2021-57 | Announcement of significant litigation progress part XV |
| 30 December 2021 | 2021-64 | Announcement of significant litigation progress part XVI |
14. Significant events of subsidiaries
? Applicable ? N/AThe Company invested in the technical upgrade program of intelligent brewing (Phase I) with thewholly-owned subsidiary, Brewing Company, as the implementer. The total investment amountapproximated CNY 4,782.5090 million. For further information, see Announcement No. 2022-24 onthe Implementation of Luzhou Laojiao’s Technical Upgrade Program of Intelligent Brewing (Phase I)by Subsidiary. The program is currently under construction.
Section VII Changes in Shares and Information about
Shareholders
1. Changes in shares
1.1 Changes in shares
Unit：Share
| Before | Changes in this period (＋，－) | After | |||||||
| Number | Proportion | Issuance of new shares | Bonus shares | Capitalization of capital reserves | Other | Subtotal | Number | Proportion | |
| I. Restricted shares | 7,468,589 | 0.51% | -2,621,650 | -2,621,650 | 4,846,939 | 0.33% | |||
| 1. Shares held by the state | |||||||||
| 2. Shares held by state-owned corporations | |||||||||
| 3. Shares held by other domestic investors | 7,468,589 | 0.51% | -2,621,650 | -2,621,650 | 4,846,939 | 0.33% | |||
| Of which: shares held by domestic corporations | |||||||||
| Shares held by domestic individuals | 7,468,589 | 0.51% | -2,621,650 | -2,621,650 | 4,846,939 | 0.33% | |||
| 4. Shares held by foreign corporations | |||||||||
| Of which: shares held by foreign corporations | |||||||||
| Shares held by foreign individuals | |||||||||
| II. Non-restricted shares | 1,464,519,180 | 99.49% | 2,621,650 | 2,621,650 | 1,467,140,830 | 99.67% | |||
| 1.CNY common shares | 1,464,519,180 | 99.49% | 2,621,650 | 2,621,650 | 1,467,140,830 | 99.67% | |||
| 2. Domestically listed foreign shares | |||||||||
| 3. Overseas listed foreign shares | |||||||||
| 4. Other | |||||||||
| III. Total shares | 1,471,987,769 | 100.00% | 0 | 0 | 1,471,987,769 | 100.00% |
Reasons for the change in shares? Applicable ? N/A
1. According to the provisions of the 2021 Restricted Share Incentive Plan (Draft), the lifting of therestriction conditions in the first lifting restriction period of the restricted share incentive scheme of theCompany has been achieved, and a total of 2,734,640 shares held by 435 incentive recipients havemet the conditions for lifting the sale restrictions, which were listed and traded on 22 February 2024.
2. Due to the lifting of the first lifting restriction period of the restricted share incentive scheme, a totalof 124,310 management lock-up shares were added.
3. Shen Caihong's 11,320 management lock-up shares were unlocked on 2 January 2024.
Approval of share changes? Applicable ? N/AOn 23 January 2024, the Proposal on the Achievement of Lifting the Restriction Conditions in theFirst Restriction Period under the 2021 Restricted Share Incentive Plan was reviewed and approvedin the 38th meeting of the 10th Board of Directors and the 20th meeting of the 10th Board ofSupervisors of the Company. According to the provisions of the 2021 Restricted Share Incentive Plan(Draft), the lifting of the restriction conditions in the first lifting restriction period of the restricted shareincentive plan of the Company has been achieved, and a total of 2,734,640 shares held by 435incentive recipients have met the conditions for lifting the sale restrictions, which were listed andtraded on 22 February 2024.
Transfer of share ownership? Applicable ? N/A
Implementation progress of shares repurchases
□ Applicable ? N/A
Implementation progress of share buyback reduction through centralized bidding
□ Applicable ? N/A
Effects of changes in shares on the basic EPS, diluted EPS, net assets per share attributable tocommon shareholders of the Company and other financial indexes over the last year and the lastreporting period? Applicable ? N/A
Other contents that the Company considers it necessary or required by the securities regulatoryauthorities to disclose? Applicable ? N/A
1.2 Changes in restricted shares
? Applicable □ N/A
Unit：Share
| Name of shareholder | Number of restricted shares held at the beginning of the reporting period | Decrease in restricted shares during the reporting period | Increase in restricted shares during the reporting period | Number of restricted shares held at the end of the reporting period | Reason for restriction | Date of unlocking |
| 2021 Restricted Share Incentive Plan | 7,235,293 | 2,734,640 | 0 | 4,500,653 | Shares lifted from restricted sales in the first restriction period under the 2021 Restricted Share Incentive Plan | 22 February 2024 |
| Liu Miao | 144,140 | 0 | 14,385 | 158,525 | Management lock-up shares added after the first restriction period under the 2021 Restricted Share Incentive Plan | Management lock-up shares added on 22 February 2024 |
| Lin Feng | 0 | 0 | 14,385 | 14,385 | Management lock-up shares added after the first restriction period under the 2021 Restricted Share Incentive Plan | Management lock-up shares added on 22 February 2024 |
| Zhang Suyi | 0 | 0 | 11,505 | 11,505 | Management lock-up shares added after the first restriction period under the 2021 Restricted Share Incentive Plan | Management lock-up shares added on 22 February 2024 |
| Xiong Pinting | 0 | 0 | 9,420 | 9,420 | Management lock-up shares added after the first restriction period under the 2021 | Management lock-up shares added on 22 February 2024 |
| Restricted Share Incentive Plan | ||||||
| Shen Caihong | 89,156 | 11,320 | 11,505 | 89,341 | Lifting restriction of management lock-up shares, and Management lock-up shares added after the first restriction period under the 2021 Restricted Share Incentive Plan | 11,320 locked-up shares of senior management were lifted from restricted sales on 2 January 2024, and Management lock-up shares added on 22 February 2024 |
| Xie Hong | 0 | 0 | 11,505 | 11,505 | Management lock-up shares added after the first restriction period under the 2021 Restricted Share Incentive Plan | Management lock-up shares added on 22 February 2024 |
| He Cheng | 0 | 0 | 11,505 | 11,505 | Management lock-up shares added after the first restriction period under the 2021 Restricted Share Incentive Plan | Management lock-up shares added on 22 February 2024 |
| Li Yong | 0 | 0 | 9,420 | 9,420 | Management lock-up shares added after the first restriction period under the 2021 Restricted Share Incentive Plan | Management lock-up shares added on 22 February 2024 |
| Wang Hongbo | 0 | 0 | 30,680 | 30,680 | Off-office lock-up | Off-office lock-up on 2 February 2024 |
| Total | 7,468,589 | 2,745,960 | 124,310 | 4,846,939 | -- | -- |
2. Issuance and listing of securities
? Applicable ? N/A
3. Total number of shareholders and their shareholdings
Unit：Share
| Total number of common shareholders at the end of the reporting period | 147,587 | Total number of preferred shareholders with resumed voting rights by the end of the reporting period (if any)(see Note 8) | 0 | |||||
| Shareholdings of common shareholders with a shareholding percentage over 5% or the top 10 common shareholders (exclusive of shares lent in refinancing) | ||||||||
| Name of shareholder | Nature of shareholder | Shareholding percentage | Total common shares held by the end of the reporting period | Increase/decrease during the reporting period | Number of holding restricted common shares | Number of holding non-restricted common shares | Pledged, marked or frozen shares | |
| Status of shares | Number of shares | |||||||
| Luzhou Laojiao Group Co., Ltd. | State-owned corporation | 25.89% | 381,088,389 | 0 | 0 | 381,088,389 | N/A | 0 |
| Luzhou XingLu Investment Group Co., Ltd. | State-owned corporation | 24.86% | 365,971,142 | 0 | 0 | 365,971,142 | N/A | 0 |
| Bank of China Co., Ltd. – Baijiu index classification securities investment fund by China Merchants Fund | Other | 2.98% | 43,827,519 | 810,540 | 0 | 43,827,519 | N/A | 0 |
| Hong Kong Securities Clearing Company Limited | Outbound corporation | 2.90% | 42,754,559 | -4,736,702 | 0 | 42,754,559 | N/A | 0 |
| China Securities Finance Corporation Limited | Other | 2.30% | 33,842,059 | 0 | 0 | 33,842,059 | N/A | 0 |
| Bank of China Co., Ltd.－Blue chip selected hybrid securities investment fund by E Fund | Other | 1.46% | 21,470,000 | 0 | 0 | 21,470,000 | N/A | 0 |
| Industrial and Commercial Bank of China Co., Ltd.-Newly growth hybrid securities investment fund by | Other | 0.92% | 13,598,087 | 0 | 0 | 13,598,087 | N/A | 0 |
| Invesco Great Wall | ||||||||
| Central Huijin Asset Management Co., Ltd. | State-owned corporation | 0.92% | 13,539,862 | 0 | 0 | 13,539,862 | N/A | 0 |
| China Life Insurance Company Limited-Tradition-common insurance product-005L－CT001 Hu | Other | 0.73% | 10,759,401 | 1,229,089 | 0 | 10,759,401 | N/A | 0 |
| Industrial and Commercial Bank of China Co., Ltd.- Huatai-Pinebridge CSI 300 Exchange-Traded Fund | Other | 0.59% | 8,630,935 | - | 0 | 8,630,935 | N/A | 0 |
| Strategic investors or general corporations become the top-ten shareholders due to placing of new shares（if any）（see note 3） | N/A | |||||||
| Related parties or acting-in-concert | 2. During the reporting period, Luzhou Laojiao Group Co., Ltd., through its wholly-owned subsidiary Sichuan Jinduo Investment Co., Ltd., increased its holdings in the Company by 1,140,200 shares through call auction trading, accounting for 0.08% of the total share capital of the Company. By the end of the reporting period, Luzhou Laojiao Group Co., Ltd. and Sichuan Jinduo Investment Co., Ltd. collectively held 382,228,589 shares in the Company, representing 25.97% of the total share capital of the Company. 3. In addition, whether there is an association between the remaining shareholders or they belong to persons acting in concert is unknown. | |||||||
| Explain if any of the shareholders above was involved in entrusting/being entrusted with voting rights or waiving voting rights | N/A | |||||||
| Special account for repurchased shares among the top 10 shareholders (if any) (see note 11) | N/A | |||||||
| Shareholdings of the top 10 non-restricted shareholders (exclusive of shares lent in refinancing and locked-up shares of senior management) | ||||||||
| Name of shareholder | Number of non-restricted shares held in by the end of the reporting period | Type of shares | ||||||
| Type | Number | |||||||
| Luzhou Laojiao Group Co., Ltd. | 381,088,389 | CNY common shares | 381,088,389 | |||||
| Luzhou XingLu Investment Group Co., Ltd. | 365,971,142 | CNY common shares | 365,971,142 | |||||
| Bank of China Co., Ltd. – Baijiu index classification securities investment fund by China Merchants Fund | 43,827,519 | CNY common shares | 43,827,519 |
| Hong Kong Securities Clearing Company Limited | 42,754,559 | CNY common shares | 42,754,559 |
| China Securities Finance Corporation Limited | 33,842,059 | CNY common shares | 33,842,059 |
| Bank of China Co., Ltd.－Blue chip selected hybrid securities investment fund by E Fund | 21,470,000 | CNY common shares | 21,470,000 |
| Industrial and Commercial Bank of China Co., Ltd.-Newly growth hybrid securities investment fund by Invesco Great Wall | 13,598,087 | CNY common shares | 13,598,087 |
| Central Huijin Asset Management Co., Ltd. | 13,539,862 | CNY common shares | 13,539,862 |
| China Life Insurance Company Limited-Tradition-common insurance product-005L－CT001 Hu | 10,759,401 | CNY common shares | 10,759,401 |
| Industrial and Commercial Bank of China Co., Ltd.- Huatai-Pinebridge CSI 300 Exchange-Traded Fund | 8,630,935 | CNY common shares | 8,630,935 |
| The statement of association or acting-in-concert between the top 10 shareholders of unrestricted shares and between the top 10 shareholders of unrestricted shares and top 10 shareholders | See the table above | ||
| Top 10 common shareholders participating in securities margin trading (if any) (see note 4) | N/A | ||
5% or greater shareholders, top 10 shareholders and Top 10 unrestricted shareholders involved inrefinancing shares lending? Applicable □ N/A
Unit: Share
| 5% or greater shareholders, top 10 shareholders and Top 10 unrestricted shareholders involved in refinancing shares lending | ||||||||
| Full name of shareholder | Shares in the common account and credit account at the period-begin | Shares lent in refinancing and not yet returned at the period-begin | Shares in the common account and credit account at the period-end | Shares lent in refinancing and not yet returned at the period-end | ||||
| Total shares | As % of total share capital | Total shares | As % of total share capital | Total shares | As % of total share capital | Total shares | As % of total share capital | |
| Bank of China Co., Ltd. – Baijiu index classification securities investmen | 43,016,979 | 2.92% | 55,000 | 0.00% | 43,827,519 | 2.98% | 0 | 0.00% |
t fund byChinaMerchantsFund
Changes in top 10 shareholders and top 10 unrestricted shareholders due to refinancing shareslending/return compared with the prior period
□Applicable ? N/A
Did any of the top 10 common shareholders or the top non-restricted common shareholders of theCompany conduct any promissory repurchase during the reporting period.? Yes ? NoThe top 10 non-restricted common shareholders, the top10 common shareholders did not conductany promissory repurchase during the reporting period.
4. Changes in shares held by directors, supervisors, and seniormanagement? Applicable ? N/ANo changes occurred to shares held by directors, supervisors and senior management in thereporting period. See the 2023 Annual Report for more details.
5. Change of controlling shareholder or actual controllerChange of the controlling shareholder during the reporting period? Applicable ? N/ANo such cases in the reporting period.
Change of the actual controller during the reporting period? Applicable ? N/AThe actual controller of the Company has not changed during the reporting period.
Section VIII Preferred Shares? Applicable ? N/ANo preferred stock in the Company during the reporting period.
Section IX Information about Bond? Applicable ? N/A
1. Enterprise bonds
? Applicable ? N/ANo such cases in the reporting period.
2. Corporate bonds
? Applicable ? N/A
2.1. Basic information about the corporate bond
Unit：CNY 10,000
| Name | Abbr. | Code | Issue date | Value date | Due date | Bond balance | Interest rate | Way of redemption | Place of trading |
| 2020 Public Offering of Corporate Bond of Luzhou Laojiao Co., Ltd. for Qualified Investors (Phase I) | 20 Lao Jiao 01 | 149062.SZ | 16 March 2020 | 17 March 2020 | 17 March 2025 | 150,000 | 3.50% | In terms of the bonds of this phase, interests will be paid by year and the principal will be repaid in lump sum at maturity. The interests will be paid once every year and the interests for the last installment will be paid together with the principal. | Shenzhen Stock Exchange |
| Appropriate arrangement of the investors (if any) | The bonds are applicable to eligible investors who have qualified securities accounts with Shenzhen Branch of China Securities Depository and Clearing Co., Ltd., are permitted to engage | ||||||||
| in the subscription and transfer of corporate bonds in accordance with the Management Measures for the Issue and Transaction Management of Corporate Bonds, Management Measures for the Suitability of Securities and Futures Investors, Management Measures of Shenzhen Stock Exchange for the Suitability of Securities Market Investors, and relevant laws and regulations, and have the corresponding risk identification and bearing capacity (excluding those prohibited by laws and regulations) | |
| Trading systems applicable | Tradable by way of bidding, offering, inquiry and agreement |
| Risk of termination of listing and trading (if any) and countermeasures | N/A |
Overdue bonds? Applicable ? N/A
2.2. Triggering and execution of issuer or investor option clauses and investorprotection clauses? Applicable ? N/A
2.3. Changes in credit ratings in the reporting period
? Applicable ? N/A
2.4. Execution and changes with respect to guarantees, repayment plans andother repayment-ensuring measures in the reporting period, as well as the impacton the interests of bond holders? Applicable ? N/A
3. Debt instruments as a non-financial enterprise? Applicable ? N/ANo such cases in the reporting period.
4. Convertible corporate bonds
? Applicable ? N/ANo such cases in the reporting period.
5. Consolidated loss of the reporting period over 10% of net assets asat the end of last year? Applicable ? N/A
6. The major accounting data and the financial indicators of the recent2 years of the company as of the end of the reporting period
Unit：CNY 10,000
| Item | 30 June 2024 | 31 December 2023 | Change |
| Current ratio | 3.09 | 4.50 | -31.33%1 |
| Debt/asset ratio | 40.28% | 34.38% | 5.90% |
| Quick ratio | 2.35 | 3.31 | -29.00% |
| H1 2024 | H1 2023 | Change | |
| Net profits before non-recurring gains and losses | 799,411.07 | 704,093.86 | 13.54% |
| EBITDA/debt ratio | 92.02% | 80.25% | 11.77% |
| Interest cover (times) | 41.93 | 37.35 | 12.26% |
| EBITDA-to-interest cover (times) | 43.38 | 38.64 | 12.27% |
Note: 1. At the end of this reporting period, there was a decrease of 31.33% compared to the end ofthe previous year, which was mainly due to an increase in current liabilities resulting from the accrualof dividends payable during this period.
Section X Financial Report
1. Auditor’s report
Are these interim financial statements audited by an independent auditor?
□Yes ? No
The interim financial statements are not audited by an independent auditor.
2. Financial statements
Monetary unit for the financial statements and the notes thereto: CNY
Prepared by: Luzhou Laojiao Co., Ltd.
Consolidated balance sheet
As at 30 June 2024
Unit: CNY
| Item | Balance as at 30 June 2024 | Balance as at 1 January 2024 |
| Current assets: | ||
| Cash and cash equivalents | 36,100,758,789.69 | 25,952,025,091.28 |
| Settlement reserves | ||
| Lending funds | ||
| Held-for-trading financial assets | 697.84 | 1,426,992,098.83 |
| Derivative financial assets | ||
| Notes receivables | ||
| Accounts receivables | 4,069,325.61 | 17,461,378.98 |
| Accounts receivables financing | 4,088,985,516.61 | 5,938,171,007.93 |
| Prepayment | 183,153,346.02 | 202,309,186.70 |
| Premiums receivable | ||
| Reinsurance accounts receivable | ||
| Reinsurance contract reserve | ||
| Other receivables | 37,208,215.91 | 22,716,893.12 |
| Including：Interests receivable | ||
| Dividends receivable | 20,242,601.70 | |
| Buying back the sale of financial assets | ||
| Inventories | 12,354,323,751.59 | 11,622,043,947.46 |
| Including: Data resource | ||
| Contract assets | ||
| Assets held for sale | ||
| Non-current assets due within one year |
| Other current assets | 129,399,856.83 | 176,684,731.97 |
| Total current assets | 52,897,899,500.10 | 45,358,404,336.27 |
| Non-current assets: | ||
| Disbursement of loans and advances | ||
| Investments in debt obligations | ||
| Investments in other debt obligations | ||
| Long-term receivables | ||
| Long-term equity investments | 2,727,584,618.05 | 2,708,254,833.50 |
| Investments in other equity instruments | 335,372,892.95 | 402,893,468.80 |
| Other non-current financial assets | ||
| Investment property | 44,397,290.42 | 37,785,416.77 |
| Fixed assets | 9,595,197,848.09 | 8,613,223,465.46 |
| Construction in progress | 561,121,727.91 | 1,718,468,880.53 |
| Productive biological assets | ||
| Oil and gas assets | ||
| Use right assets | 32,187,976.28 | 23,260,955.23 |
| Intangible assets | 3,377,465,875.79 | 3,397,873,791.08 |
| Including: Data resource | ||
| Development expenses | ||
| Including: Data resource | ||
| Goodwill | ||
| Long-term deferred expenses | 1,573,383.50 | 960,005.91 |
| Deferred tax assets | 262,128,182.93 | 674,429,617.92 |
| Other non-current assets | 404,267,753.99 | 358,900,430.13 |
| Total non-current assets | 17,341,297,549.91 | 17,936,050,865.33 |
| Total assets | 70,239,197,050.01 | 63,294,455,201.60 |
| Current liabilities: | ||
| Short-term loans | ||
| Borrowings from the central bank | ||
| Loans from other banks | ||
| Held-for-trading financial liabilities | 9,763.87 | |
| Derivative financial liabilities | ||
| Notes payable | ||
| Accounts payable | 2,162,821,537.64 | 2,357,223,733.21 |
| Advance from customer | ||
| Contract liabilities | 2,341,708,292.72 | 2,672,977,090.30 |
| Financial assets sold for repurchase | ||
| Deposits from customers and inter-bank | ||
| Customer brokerage deposits | ||
| Securities underwriting brokerage deposits |
| Employee benefits payable | 345,778,113.07 | 523,866,711.41 |
| Taxes payable | 1,618,870,727.39 | 2,939,627,533.00 |
| Other payable | 8,798,372,843.06 | 1,150,721,162.53 |
| Including：Interests payable | ||
| Dividends payable | 7,948,733,952.60 | 29,684,819.82 |
| Handling charges and commissions payable | ||
| Reinsurance accounts payable | ||
| Liabilities held for sale | ||
| Non-current liabilities due within one year | 1,555,342,077.23 | 78,918,152.41 |
| Other current liabilities | 304,419,317.46 | 347,485,071.57 |
| Total current liabilities | 17,127,312,908.57 | 10,070,829,218.30 |
| Non-current liabilities: | ||
| Insurance contract reserves | ||
| Long-term loans | 10,990,000,000.00 | 10,000,300,000.00 |
| Bonds payable | 1,498,716,737.02 | |
| Including：Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | 28,420,897.97 | 22,356,404.47 |
| Long-term payables | ||
| Long-term payroll payables | ||
| Accrued liabilities | ||
| Deferred income | 24,919,853.01 | 27,772,083.74 |
| Deferred tax liabilities | 120,182,564.78 | 142,773,028.22 |
| Other non-current liabilities | ||
| Total non-current liabilities | 11,163,523,315.76 | 11,691,918,253.45 |
| Total liabilities | 28,290,836,224.33 | 21,762,747,471.75 |
| Owners' equity | ||
| Share capital | 1,471,987,769.00 | 1,471,987,769.00 |
| Other equity instruments | ||
| Including: preferred shares | ||
| Perpetual bonds | ||
| Capital reserves | 5,285,589,296.33 | 5,185,481,523.22 |
| Less: treasury stock | 359,451,123.09 | 616,743,610.59 |
| Other comprehensive income | 28,478,148.43 | 63,130,469.51 |
| Special reserves | ||
| Surplus reserves | 1,471,987,769.00 | 1,471,987,769.00 |
| General risk reserve | ||
| Undistributed profits | 33,894,370,787.46 | 33,815,566,574.75 |
| Total equity attributable to owners of the parent company | 41,792,962,647.13 | 41,391,410,494.89 |
| Non-controlling interests | 155,398,178.55 | 140,297,234.96 |
| Total owners' equity | 41,948,360,825.68 | 41,531,707,729.85 |
| Total liabilities and owners' equity | 70,239,197,050.01 | 63,294,455,201.60 |
Legal representative：Liu MiaoPerson in charge of accounting affairs：Xie Hong
Person in charge of accounting department：Song Ying
Balance sheet of parent company
As at 30 June 2024
Unit: CNY
| Item | Balance as at 30 June 2024 | Balance as at 1 January 2024 |
| Current assets: | ||
| Cash and cash equivalents | 31,885,803,718.52 | 24,271,855,815.25 |
| Held-for-trading financial assets | 1,426,992,098.83 | |
| Derivative financial assets | ||
| Notes receivables | ||
| Accounts receivables | 54,257.28 | |
| Accounts receivables financing | ||
| Prepayment | 9,840,835.64 | 6,360,210.40 |
| Other receivables | 16,191,194,315.32 | 14,844,650,322.98 |
| Including：Interests receivable | ||
| Dividends receivable | 20,242,601.70 | |
| Inventories | 1,059,039.47 | 1,051,717.53 |
| Including: Data resource | ||
| Contract assets | ||
| Assets held for sale | ||
| Non-current assets due within one year | ||
| Other current assets | 5,332,560.03 | 108,073,731.77 |
| Total current assets | 48,093,284,726.26 | 40,658,983,896.76 |
| Non-current assets: | ||
| Investments in debt obligations | ||
| Investments in other debt obligations | ||
| Long-term receivables | ||
| Long-term equity investments | 6,622,314,283.60 | 6,494,866,955.20 |
| Investments in other equity instruments | 335,068,971.32 | 402,589,547.17 |
| Other non-current financial assets | ||
| Investment property | 44,397,290.42 | 37,785,416.77 |
| Fixed assets | 887,130,403.00 | 950,099,737.28 |
| Construction in progress | 76,386,125.08 | 57,369,565.37 |
| Productive biological assets | ||
| Oil and gas assets | ||
| Use right assets | 207,172.71 | 316,259.61 |
| Intangible assets | 720,597,218.65 | 781,194,544.01 |
| Including: Data resource | ||
| Development expenses | ||
| Including: Data resource |
| Goodwill | ||
| Long-term deferred expenses | 581,198.33 | 820,758.81 |
| Deferred tax assets | 114,957,586.84 | 154,645,014.28 |
| Other non-current assets | 200,783,195.94 | 200,783,195.94 |
| Total non-current assets | 9,002,423,445.89 | 9,080,470,994.44 |
| Total assets | 57,095,708,172.15 | 49,739,454,891.20 |
| Current liabilities: | ||
| Short-term loans | ||
| Held-for-trading financial liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | ||
| Accounts payable | 11,654,993.00 | 19,666,554.15 |
| Advance from customer | ||
| Contract liabilities | 3,914,703.32 | 2,230,734.50 |
| Employee benefits payable | 133,307,812.70 | 163,823,844.30 |
| Taxes payable | 233,755,640.83 | 204,018,131.83 |
| Other payables | 15,244,780,060.80 | 1,960,371,090.55 |
| Including：Interests payable | ||
| Dividends payable | 7,948,733,952.60 | |
| Liabilities held for sale | ||
| Non-current liabilities due within one year | 1,546,588,577.68 | 74,018,942.63 |
| Other current liabilities | 508,911.43 | 289,995.48 |
| Total current liabilities | 17,174,510,699.76 | 2,424,419,293.44 |
| Non-current liabilities: | ||
| Long-term loans | 10,990,000,000.00 | 10,000,300,000.00 |
| Bonds payable | 1,498,716,737.02 | |
| Including：Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | ||
| Long-term payables | ||
| Long-term payroll payables | ||
| Accrued liabilities | ||
| Deferred income | ||
| Deferred tax liabilities | 55,552,318.41 | 72,592,887.99 |
| Other non-current liabilities | ||
| Total non-current liabilities | 11,045,552,318.41 | 11,571,609,625.01 |
| Total liabilities | 28,220,063,018.17 | 13,996,028,918.45 |
| Owners' equity | ||
| Share capital | 1,471,987,769.00 | 1,471,987,769.00 |
| Other equity instruments | ||
| Including: preferred shares | ||
| Perpetual bonds | ||
| Capital reserves | 5,280,393,557.36 | 5,179,307,881.60 |
| Less: treasury stock | 359,451,123.09 | 616,743,610.59 |
| Other comprehensive income | 25,603,515.78 | 60,513,567.32 |
| Special reserves | ||
| Surplus reserves | 1,471,987,769.00 | 1,471,987,769.00 |
| Undistributed profits | 20,985,123,665.93 | 28,176,372,596.42 |
| Total owners' equity | 28,875,645,153.98 | 35,743,425,972.75 |
| Total liabilities and owners' equity | 57,095,708,172.15 | 49,739,454,891.20 |
Consolidated income statement
Unit: CNY
| Item | H1 2024 | H1 2023 |
| 1. Total operating revenue | 16,904,885,169.38 | 14,593,051,774.14 |
| Including: Operating revenue | 16,904,885,169.38 | 14,593,051,774.14 |
| Interest income | ||
| Earned premium | ||
| Fee and commission income | ||
| 2. Total operating costs | 6,061,192,676.41 | 5,234,429,060.11 |
| Including: Cost of sales | 1,932,074,493.16 | 1,700,263,105.68 |
| Interest expense | ||
| Handling charges and commission expenses | ||
| Refunded premiums | ||
| Net payments for insurance claims | ||
| Net provision for insurance contracts | ||
| Bond insurance expense | ||
| Reinsurance Expenses | ||
| Taxes and surcharges | 2,043,377,033.97 | 1,593,958,974.95 |
| Selling and distribution expenses | 1,630,293,023.67 | 1,463,196,830.61 |
| General and administrative expenses | 504,694,175.31 | 539,879,241.31 |
| Research and Development expenses | 75,028,702.85 | 62,914,698.99 |
| Financial expenses | -124,274,752.55 | -125,783,791.43 |
| Including：Interest expenses | 266,707,454.54 | 261,543,693.36 |
| Interest income | 391,537,705.76 | 384,116,432.10 |
| Plus: Other income | 21,379,290.54 | 23,395,940.16 |
| Investment income ("-" for losses) | 15,422,563.74 | 85,024,194.55 |
| Including: income from investment in associates and joint ventures | 14,536,085.02 | 70,278,286.49 |
| Income from the derecognition of financial assets measured at amortized cost (“-” for losses) | ||
| Foreign exchange gains ("-" for losses) | ||
| Net gain on exposure hedges (“-” for losses) | ||
| Gains from the changes in fair values(“-“ for losses) | 33,256,967.84 | 32,781,678.42 |
| Credit impairment losses (“-” for losses) | 1,109,313.81 | 130,161.94 |
| Impairment losses(“-“ for losses) | ||
| Gains from disposal of assets("-" for losses) | 1,058,795.10 | -477,479.38 |
| 3. Operating profits ("-" for losses) | 10,915,919,424.00 | 9,499,477,209.72 |
| Plus: non-operating income | 8,564,749.87 | 14,479,518.98 |
| Less: non-operating expenses | 7,663,658.92 | 6,972,586.95 |
| 4. Total profits before tax ("-" for total losses) | 10,916,820,514.95 | 9,506,984,141.75 |
| Less: income tax expenses | 2,870,561,488.56 | 2,385,359,516.12 |
| 5. Net profit ("-" for net loss) | 8,046,259,026.39 | 7,121,624,625.63 |
| 5.1 By operating continuity | ||
| 5.1.1 Net profit from continuing operation ("-" for losses) | 8,046,259,026.39 | 7,121,624,625.63 |
| 5.1.2 Net profit from discontinued operation ("-" for losses) | ||
| 5.2 By ownership | ||
| 1) Attributable to shareholders of the parent company ("-" for losses) | 8,027,538,165.31 | 7,090,426,787.07 |
| 2) Attributable to non-controlling interests ("-" for losses) | 18,720,861.08 | 31,197,838.56 |
| 6. Net of tax from other comprehensive income | -34,442,245.50 | -218,514,527.93 |
| Net of tax from other comprehensive income to the owner of the parent company | -34,652,321.08 | -219,468,210.77 |
| 6.1 Other comprehensive income cannot reclassified into the profit and loss: | -50,739,026.64 | -221,898,677.10 |
| 1) Remeasure the variation of net indebtedness or net asset of defined benefit plans | ||
| 2) Share in other comprehensive income that cannot be classified into profit and loss under equity method | -98,594.78 | 131,244.39 |
| 3) Changes in fair value of investments in other equity | -50,640,431.86 | -222,029,921.49 |
| instruments | ||
| 4) Changes in fair value of the company’s credit risks | ||
| 5) Other | ||
| 6.2 Other comprehensive income that will be reclassified into the profit and loss | 16,086,705.56 | 2,430,466.33 |
| 1) Share in other comprehensive income that will be classified into profit and loss under equity method | 15,828,975.10 | 1,266,710.82 |
| 2) Changes in fair value of investments in other debt obligations | ||
| 3) Other comprehensive income arising from the reclassification of financial assets | ||
| 4) Allowance for credit impairments in investments in other debt obligations | ||
| 5) Reserve for cash-flow hedge | ||
| 6) Balance arising from the translation of foreign currency financial statements | 257,730.46 | 1,163,755.51 |
| 7) Others | ||
| Net of tax from other comprehensive income to non-controlling interests | 210,075.58 | 953,682.84 |
| 7. Total comprehensive income | 8,011,816,780.89 | 6,903,110,097.70 |
| Total comprehensive income attributable to owners of the parent company | 7,992,885,844.23 | 6,870,958,576.30 |
| Total comprehensive income attributable to non-controlling interests | 18,930,936.66 | 32,151,521.40 |
| 8. Earnings per share | ||
| (1) Basic earnings per share | 5.46 | 4.82 |
| (2) Diluted earnings per share | 5.46 | 4.82 |
Legal representative：Liu MiaoPerson in charge of accounting affairs：Xie HongPerson in charge of accounting department：Song Ying
Income statement of parent company
Unit: CNY
| Item | H1 2024 | H1 2023 |
| 1. Operating revenue | 5,698,158,853.96 | 4,014,540,328.02 |
| Less: Cost of sales | 4,408,209,268.20 | 3,042,254,948.12 |
| Taxes and surcharges | 36,744,352.82 | 37,573,415.96 |
| Selling and distribution expenses | ||
| General and administrative | 432,679,079.77 | 461,675,917.45 |
| expenses | ||
| Research and Development expenses | 18,486,265.53 | 26,515,628.81 |
| Financial expenses | -223,823,444.31 | -227,960,702.16 |
| Including：Interest expenses | 169,177,810.84 | 160,806,004.01 |
| Interest income | 393,493,177.13 | 389,316,203.47 |
| Plus: Other income | 7,114,640.09 | 15,751,969.90 |
| Investment income ("-" for losses) | 3,222,104.81 | 69,703,790.61 |
| Including: income from investment in associates and joint ventures | 2,318,263.38 | 55,379,409.84 |
| Income from the derecognition of financial assets at amortized cost (“-” for losses) | ||
| Net gain on exposure hedges (“-” for losses) | ||
| Gains from the changes in fair values(“-“ for losses) | 33,246,473.03 | 30,742,662.63 |
| Credit impairment losses (“-” for losses) | 326,812.56 | 930,108.70 |
| Asset impairment losses (“-” for losses) | ||
| Gains from disposal of assets("-" for losses) | 1,177,473.44 | -651,767.48 |
| 2. Operating profits ("-" for losses) | 1,070,950,835.88 | 790,957,884.20 |
| Plus: non-operating income | 5,240,384.69 | 11,214,036.19 |
| Less: non-operating expenses | 6,645,726.27 | 5,679,506.55 |
| 3. Total profits before tax ("-" for total losses) | 1,069,545,494.30 | 796,492,413.84 |
| Less: income tax expenses | 312,060,472.19 | 201,232,450.87 |
| 4. Net profit ("-" for net loss) | 757,485,022.11 | 595,259,962.97 |
| 4.1 Net profit from continuing operation ("-" for losses) | 757,485,022.11 | 595,259,962.97 |
| 4.2 Net profit from discontinued operation ("-" for losses) | ||
| 5. Net of tax from other comprehensive income | -34,910,051.54 | -220,631,966.28 |
| 5.1 Other comprehensive income cannot reclassified into the profit and loss: | -50,739,026.64 | -221,898,677.10 |
| 1) Remeasure the variation of net indebtedness or net asset of defined benefit plans | ||
| 2) Share in other comprehensive income that cannot be classified into profit and loss under equity method | -98,594.78 | 131,244.39 |
| 3) Changes in fair value of investments in other equity | -50,640,431.86 | -222,029,921.49 |
| instruments | ||
| 4) Changes in fair value of the company’s credit risks | ||
| 5) Other | ||
| 5.2 Other comprehensive income that will be reclassified into the profit and loss | 15,828,975.10 | 1,266,710.82 |
| 1) Share in other comprehensive income that will be classified into profit and loss under equity method | 15,828,975.10 | 1,266,710.82 |
| 2) Changes in fair value of investments in other debt obligations | ||
| 3) Other comprehensive income arising from the reclassification of financial assets | ||
| 4) Allowance for credit impairments in investments in other debt obligations | ||
| 5) Reserve for cash-flow hedge | ||
| 6) Balance arising from the translation of foreign currency financial statements | ||
| 7) Others | ||
| 6. Total comprehensive income | 722,574,970.57 | 374,627,996.69 |
| 7. Earnings per share | ||
| (1) Basic earnings per share | 0.50 | 0.39 |
| (2) Diluted earnings per share | 0.50 | 0.39 |
Consolidated statement of cash flows
Unit: CNY
| Item | H1 2024 | H1 2023 |
| 1. Cash flows from operating activities | ||
| Cash received from sale of goods and rendering of services | 20,162,157,471.33 | 17,584,367,655.42 |
| Net increase in customer bank deposits and placement from banks and other financial institutions | ||
| Net increase in loans from central bank | ||
| Net increase in loans from other financial institutions | ||
| Premiums received from original insurance contracts | ||
| Net cash received from reinsurance business | ||
| Net increase in deposits and investments from policyholders | ||
| Cash received from interest, |
| handling charges and commissions | ||
| Net increase in placements from other financial institutions | ||
| Net capital increase in repurchase business | ||
| Net cash received from customer brokerage deposits | ||
| Refunds of taxes and surcharges | 1,262,805.77 | 268,904.22 |
| Cash received from other operating activities | 454,611,350.11 | 459,253,580.98 |
| Subtotal of cash inflows from operating activities | 20,618,031,627.21 | 18,043,890,140.62 |
| Cash paid for goods purchased and services received | 2,513,884,361.19 | 3,091,976,431.75 |
| Net increase in loans and advances to customers | ||
| Net increase in deposits in central bank and other banks and financial institutions | ||
| Cash paid for original insurance contract claims | ||
| Net increase in lending funds | ||
| Cash paid for interests, handling charges and commissions | ||
| Cash paid for policy dividends | ||
| Cash paid to and on behalf of employees | 834,143,117.90 | 742,681,965.47 |
| Cash paid for taxes and surcharges | 7,651,967,240.46 | 7,376,131,406.36 |
| Cash paid for other operating activities | 1,392,976,695.09 | 1,185,339,540.00 |
| Subtotal of cash outflows from operating activities | 12,392,971,414.64 | 12,396,129,343.58 |
| Net cash flows from operating activities | 8,225,060,212.57 | 5,647,760,797.04 |
| 2. Cash flows from investing activities | ||
| Cash received from disposal of investments | 2,090,367,314.89 | 1,502,335,883.94 |
| Cash received from returns on investments | 23,970,473.40 | 2,391,009.80 |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 10,363,496.03 | 6,151,397.95 |
| Net cash received from disposal of subsidiaries and other business units | ||
| Cash received from other investing activities | ||
| Subtotal of cash inflows from investing activities | 2,124,701,284.32 | 1,510,878,291.69 |
| Cash paid to acquire and construct fixed assets, intangible assets and other long-term assets | 344,186,871.61 | 578,623,738.47 |
| Cash paid for investments | 671,700,000.00 | 200,000,000.00 |
| Net increase in pledge loans | ||
| Net cash paid to acquire subsidiaries and other business units | ||
| Cash paid for other investing activities | 17,362.71 | |
| Subtotal of cash outflows from investing activities | 1,015,904,234.32 | 778,623,738.47 |
| Net cash flows from investing activities | 1,108,797,050.00 | 732,254,553.22 |
| 3. Cash flows from financing activities | ||
| Cash received from investors | 79,496.11 | 10,373,040.14 |
| Including: cash received by subsidiaries from investments by minority shareholders | 79,496.11 | 2,082,314.40 |
| Cash received from borrowings | 2,000,000,000.00 | 6,350,000,000.00 |
| Cash received from other financing activities | ||
| Subtotal of cash inflows from financing activities | 2,000,079,496.11 | 6,360,373,040.14 |
| Cash paid for debt repayments | 1,010,300,000.00 | 10,100,000.00 |
| Cash paid for distribution of dividends and profits or payment of interest | 216,195,804.05 | 154,205,652.79 |
| Including: dividends and profits paid to minority shareholders by subsidiaries | 29,684,819.82 | |
| Cash paid for other financing activities | 10,991,704.13 | 1,117,268.64 |
| Subtotal of cash outflows from financing activities | 1,237,487,508.18 | 165,422,921.43 |
| Net cash flows from financing activities | 762,591,987.93 | 6,194,950,118.71 |
| 4. Effect of fluctuation in exchange rate on cash and cash equivalents | 5,571,990.19 | 7,563,547.16 |
| 5. Net increase in cash and cash equivalents | 10,102,021,240.69 | 12,582,529,016.13 |
| Plus: balance of cash and cash equivalents at the beginning of the period | 25,893,029,277.86 | 17,729,006,591.87 |
| 6. Balance of cash and cash equivalents at the end of the period | 35,995,050,518.55 | 30,311,535,608.00 |
Cash flow statements of parent company
Unit: CNY
| Item | H1 2024 | H1 2023 |
| 1. Cash flows from operating activities | ||
| Cash received from sale of goods and rendering of services | 6,440,549,216.51 | 4,537,069,372.71 |
| Refunds of taxes and surcharges | ||
| Cash received from other operating activities | 3,842,158,617.85 | 4,098,127,059.26 |
| Subtotal of cash inflows from operating activities | 10,282,707,834.36 | 8,635,196,431.97 |
| Cash paid for goods purchased and services received | 4,095,821,295.38 | 2,851,101,478.66 |
| Cash paid to and on behalf of employees | 256,233,333.40 | 238,227,114.39 |
| Cash paid for taxes and surcharges | 457,806,064.04 | 634,932,605.73 |
| Cash paid for other operating activities | 149,211,369.48 | 134,540,090.19 |
| Subtotal of cash outflows from operating activities | 4,959,072,062.30 | 3,858,801,288.97 |
| Net cash flows from operating activities | 5,323,635,772.06 | 4,776,395,143.00 |
| 2. Cash flows from investing activities | ||
| Cash received from disposal of investments | 2,090,367,314.89 | 1,400,914,454.67 |
| Cash received from returns on investments | 23,970,473.40 | 2,391,009.80 |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 10,363,496.03 | 271,899.30 |
| Net cash received from disposal of subsidiaries and other business units | ||
| Cash received from other investing activities | ||
| Subtotal of cash inflows from investing activities | 2,124,701,284.32 | 1,403,577,363.77 |
| Cash paid to acquire and construct fixed assets, intangible assets and other long-term assets | 19,773,238.28 | 52,057,717.59 |
| Cash paid for investments | 660,000,000.00 | 220,000,000.00 |
| Net cash paid to acquire subsidiaries and other business units | ||
| Cash paid for other investing activities | ||
| Subtotal of cash outflows from investing activities | 679,773,238.28 | 272,057,717.59 |
| Net cash flows from investing activities | 1,444,928,046.04 | 1,131,519,646.18 |
| 3. Cash flows from financing activities | ||
| Cash received from investors | 8,290,725.74 | |
| Cash received from loans | 2,000,000,000.00 | 6,350,000,000.00 |
| Cash received from other financing activities | ||
| Subtotal of cash inflows from financing activities | 2,000,000,000.00 | 6,358,290,725.74 |
| Cash paid for debt repayments | 1,010,300,000.00 | 10,100,000.00 |
| Cash paid for distribution of dividends and profits or payment of interest | 186,510,984.23 | 154,205,652.79 |
| Cash paid for other financing activities | 1,848,915.81 | 76,680.00 |
| Subtotal of cash outflows from financing activities | 1,198,659,900.04 | 164,382,332.79 |
| Net cash flows from financing activities | 801,340,099.96 | 6,193,908,392.95 |
| 4. Effect of fluctuation in exchange rate on cash and cash equivalents | 124,251.99 | 290,791.42 |
| 5. Net increase in cash and cash equivalents | 7,570,028,170.05 | 12,102,113,973.55 |
| Plus: balance of cash and cash equivalents at the beginning of the period | 24,225,475,946.42 | 16,991,891,937.50 |
| 6. Balance of cash and cash equivalents at the end of the period | 31,795,504,116.47 | 29,094,005,911.05 |
Consolidated statement of changes in owners' equity
For the six months ended 30 June 2024
Unit: CNY
| Item | H1 2024 | ||||||||||||||
| Equity attributable to owners of the parent company | Non-controlling interests | Total owners' equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserve | Less：Treasury stock | Other Comprehensive Income | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | Other | Subtotal | |||||
| Preferred stock | Perpetual bond | Other | |||||||||||||
| 1. Balance as at 31 December of last year | 1,471,987,769.00 | 5,185,481,523.22 | 616,743,610.59 | 63,130,469.51 | 1,471,987,769.00 | 33,815,566,574.75 | 41,391,410,494.89 | 140,297,234.96 | 41,531,707,729.85 | ||||||
| Plus: adjustments for changes in accounting policies | |||||||||||||||
| Adjustments for correction of accounting errors in prior year | |||||||||||||||
| Others | |||||||||||||||
| 2. Balance as at 1 January of the current year | 1,471,987,769.00 | 5,185,481,523.22 | 616,743,610.59 | 63,130,469.51 | 1,471,987,769.00 | 33,815,566,574.75 | 41,391,410,494.89 | 140,297,234.96 | 41,531,707,729.85 | ||||||
| 3.Increases/decreases in the current period (“-” for decreases) | 100,107,773.11 | -257,292,487.50 | -34,652,321.08 | 78,804,212.71 | 401,552,152.24 | 15,100,943.59 | 416,653,095.83 | ||||||||
| (1) Total comprehensive income | -34,652,321.08 | 8,027,538,165.31 | 7,992,885,844.23 | 18,930,936.66 | 8,011,816,780.89 | ||||||||||
| (2) Capital contributed or reduced by owners | 100,107,773.11 | -257,292,487.50 | 357,400,260.61 | -3,829,993.07 | 353,570,267.54 | ||||||||||
| Capital contributions by owners | 410,989,045.60 | -233,103,448. | 644,092,493.84 | 79,604.28 | 644,172,098.12 | ||||||||||
| 24 | |||||||||||||||
| Capital contributions by other equity instruments holders | |||||||||||||||
| Amounts of share-based payments recognized in owners' equity | -310,881,272.49 | -24,189,039.26 | -286,692,233.23 | 977,902.65 | -285,714,330.58 | ||||||||||
| Others | -4,887,500.00 | -4,887,500.00 | |||||||||||||
| (3) Profit distribution | -7,948,733,952.60 | -7,948,733,952.60 | -7,948,733,952.60 | ||||||||||||
| Withdrawal of surplus reserves | |||||||||||||||
| Withdrawal of general risk reserve | |||||||||||||||
| Profit distributed to owners (or shareholders) | -7,948,733,952.60 | -7,948,733,952.60 | -7,948,733,952.60 | ||||||||||||
| Others | |||||||||||||||
| (4) Internal carry-forward of owners' equity | |||||||||||||||
| Conversion of capital reserves into paid-in capital | |||||||||||||||
| Conversion of surplus reserves into paid-in capital | |||||||||||||||
| Surplus reserves offsetting losses | |||||||||||||||
| Carry-forward of retained earnings from changes in defined benefit plans | |||||||||||||||
| Carry-forward of retained earnings from other comprehensive income | |||||||||||||||
| Others | |||||||||||||||
| (5) Special reserves | |||||||||||||||
| Withdrawal for the period | |||||||||||||||
| Use for the period | |||||||||||||||
| (6) Others | |||||||||||||||
| 4. Balance as at 30 June of the current year | 1,471,987,769.00 | 5,285,589,296.33 | 359,451,123.09 | 28,478,148.43 | 1,471,987,769.00 | 33,894,370,787.46 | 41,792,962,647.13 | 155,398,178.55 | 41,948,360,825.68 |
For the six months ended 30 June 2023
Unit: CNY
| Item | H1 2023 | ||||||||||||||
| Equity attributable to owners of the parent company | Non-controlling interests | Total owners' equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserve | Less：Treasury stock | Other Comprehensive Income | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | Other | Subtotal | |||||
| Preferred stock | Perpetual bond | Other | |||||||||||||
| 1. Balance as at 31 December of last year | 1,471,895,100.00 | 4,800,154,468.99 | 639,021,998.78 | 330,751,245.84 | 1,471,895,100.00 | 26,772,197,213.98 | 34,207,871,130.03 | 120,923,806.61 | 34,328,794,936.64 | ||||||
| Plus: adjustments for changes in accounting policies | |||||||||||||||
| Adjustments for correction of accounting errors in prior year | |||||||||||||||
| Others | |||||||||||||||
| 2. Balance as at 1 January of the current year | 1,471,895,100.00 | 4,800,154,468.99 | 639,021,998.78 | 330,751,245.84 | 1,471,895,100.00 | 26,772,197,213.98 | 34,207,871,130.03 | 120,923,806.61 | 34,328,794,936.64 | ||||||
| 3.Increases/decreases in the current period (“-” for decreases) | 92,669.00 | 204,415,619.85 | -22,278,388.19 | -235,683,863.98 | 887,494,116.25 | 878,596,929.31 | 36,655,098.51 | 915,252,027.82 | |||||||
| (1) Total comprehensive income | -219,468,210.77 | 7,090,426,787.07 | 6,870,958,576.30 | 32,151,521.40 | 6,903,110,097.70 | ||||||||||
| (2) Capital contributed or reduced by owners | 92,669.00 | 204,415,619.85 | -22,278,388.19 | 226,786,677.04 | 4,503,577.11 | 231,290,254.15 | |||||||||
| Capital contributions by owners | 92,669.00 | 8,198,055.74 | 8,290,724.74 | 2,082,314.40 | 2,082,314.40 | ||||||||||
| Capital contributions by other equity instruments holders | |||||||||||||||
| Amounts of share-based payments recognized in owners' equity | 196,217,564.11 | -30,569,112.93 | 226,786,677.04 | 2,421,262.71 | 229,207,939.75 | ||||||||||
| Others | |||||||||||||||
| (3) Profit distribution | -6,219,148,324.03 | -6,219,148,324.03 | -6,219,148,324.03 | ||||||||||||
| Withdrawal of surplus reserves | |||||||||||||||
| Withdrawal of general risk reserve | |||||||||||||||
| Profit distributed to owners (or shareholders) | -6,219,148,324.03 | -6,219,148,324.03 | -6,219,148,324.03 | ||||||||||||
| Others | |||||||||||||||
| (4) Internal carry-forward of owners' equity | -16,215,653.21 | 16,215,653.21 | |||||||||||||
| Conversion of capital reserves into paid-in capital | |||||||||||||||
| Conversion of surplus reserves into paid-in capital | |||||||||||||||
| Surplus reserves offsetting losses | |||||||||||||||
| Carry-forward of retained earnings from changes in defined benefit plans | |||||||||||||||
| Carry-forward of retained earnings from other comprehensive income | -16,215,653.21 | 16,215,653.21 | |||||||||||||
| Others | |||||||||||||||
| (5) Special reserves | |||||||||||||||
| Withdrawal for the period | |||||||||||||||
| Use for the period | |||||||||||||||
| (6) Others | |||||||||||||||
| 4. Balance as at 30 June of the current year | 1,471,987,769.00 | 5,004,570,088.84 | 616,743,610.59 | 95,067,381.86 | 1,471,895,100.00 | 27,659,691,330.23 | 35,086,468,059.34 | 157,578,905.12 | 35,244,046,964.46 |
Statement of changes in owners' equity of parent company
For the six months ended 30 June 2024
Unit: CNY
| Item | H1 2024 | |||||||||||
| Share capital | Other equity instruments | Capital reserve | Less：Treasury stock | Other Comprehensive Income | Special reserve | Surplus reserve | Undistributed profit | Other | Total owners' equity | |||
| Preferred stock | Perpetual bond | Other | ||||||||||
| 1. Balance as at 31 December of last year | 1,471,987,769.00 | 5,179,307,881.60 | 616,743,610.59 | 60,513,567.32 | 1,471,987,769.00 | 28,176,372,596.42 | 35,743,425,972.75 | |||||
| Plus: adjustments for changes in accounting policies | ||||||||||||
| Adjustments for correction of accounting errors in prior year | ||||||||||||
| Others | ||||||||||||
| 2. Balance as at January 1 of the current year | 1,471,987,769.00 | 5,179,307,881.60 | 616,743,610.59 | 60,513,567.32 | 1,471,987,769.00 | 28,176,372,596.42 | 35,743,425,972.75 | |||||
| 3.Increases/decreases in the current period (“-” for decreases) | 101,085,675.76 | -257,292,487.50 | -34,910,051.54 | -7,191,248,930.49 | -6,867,780,818.77 | |||||||
| (1) Other comprehensive income | -34,910,051.54 | 757,485,022.11 | 722,574,970.57 | |||||||||
| (2) Capital contributed or reduced by owners | 101,085,675.76 | -257,292,487.50 | 358,378,163.26 | |||||||||
| Capital contributions by owners | 410,989,045.60 | -233,103,448.24 | 644,092,493.84 | |||||||||
| Capital contributions by other equity instruments holders | ||||||||||||
| Amounts of share-based payments recognized in owners' equity | -309,903,369.84 | -24,189,039.26 | -285,714,330.58 | |||||||||
| Others | ||||||||||||
| (3) Profit distribution | -7,948,733,952.60 | -7,948,733,952.60 | ||||||||||
| Withdrawal of surplus reserves | ||||||||||||
| Profit distributed to owners (or shareholders) | -7,948,733,952.60 | -7,948,733,952.60 | ||||||||||
| Others | ||||||||||||
| (4) Internal carry-forward of owners' equity | ||||||||||||
| Conversion of capital reserves into paid-in capital | ||||||||||||
| Conversion of surplus | ||||||||||||
| reserves into paid-in capital | ||||||||||||
| Surplus reserves offsetting losses | ||||||||||||
| Carry-forward of retained earnings from changes in defined benefit plans | ||||||||||||
| Carry-forward of retained earnings from other comprehensive income | ||||||||||||
| Others | ||||||||||||
| (5) Special reserves | ||||||||||||
| Withdrawal for the period | ||||||||||||
| Use for the period | ||||||||||||
| (6) Others | ||||||||||||
| 4. Balance as at 30 June of the current year | 1,471,987,769.00 | 5,280,393,557.36 | 359,451,123.09 | 25,603,515.78 | 1,471,987,769.00 | 20,985,123,665.93 | 28,875,645,153.98 |
For the six months ended 30 June 2023
Unit: CNY
| Item | H1 2023 | |||||||||||
| Share capital | Other equity instruments | Capital reserve | Less：Treasury stock | Other Comprehensive Income | Special reserve | Surplus reserve | Undistributed profit | Other | Total owners' equity | |||
| Preferred stock | Perpetual bond | Other | ||||||||||
| 1. Balance as at 31 December of last year | 1,471,895,100.00 | 4,789,603,151.65 | 639,021,998.78 | 328,542,995.36 | 1,471,895,100.00 | 23,131,570,801.94 | 30,554,485,150.17 | |||||
| Plus: adjustments for changes in accounting policies | ||||||||||||
| Adjustments for correction of accounting errors in prior year | ||||||||||||
| Others | ||||||||||||
| 2. Balance as at January 1 of the current year | 1,471,895,100.00 | 4,789,603,151.65 | 639,021,998.78 | 328,542,995.36 | 1,471,895,100.00 | 23,131,570,801.94 | 30,554,485,150.17 | |||||
| 3.Increases/decreases in the current period (“-” for decreases) | 92,669.00 | 206,838,213.32 | -22,278,388.19 | -236,847,619.49 | -5,607,672,707.85 | -5,615,311,056.83 | ||||||
| (1) Other comprehensive income | -220,631,966.28 | 595,259,962.97 | 374,627,996.69 | |||||||||
| (2) Capital contributed or reduced by owners | 92,669.00 | 206,838,213.32 | -22,278,388.19 | 229,209,270.51 | ||||||||
| Capital contributions by owners | 92,669.00 | 8,198,055.74 | 8,290,724.74 | |||||||||
| Capital contributions by other equity instruments holders | ||||||||||||
| Amounts of share-based payments recognized in owners' equity | 198,640,157.58 | -30,569,112.93 | 229,209,270.51 | |||||||||
| Others | ||||||||||||
| (3) Profit distribution | -6,219,148,324.03 | -6,219,148,324.03 | ||||||||||
| Withdrawal of surplus reserves | ||||||||||||
| Profit distributed to owners (or shareholders) | -6,219,148,324.03 | -6,219,148,324.03 | ||||||||||
| Others | ||||||||||||
| (4) Internal carry-forward of owners' equity | -16,215,653.21 | 16,215,653.21 | ||||||||||
| Conversion of capital reserves into paid-in capital | ||||||||||||
| Conversion of surplus reserves into paid-in capital | ||||||||||||
| Surplus reserves offsetting losses | ||||||||||||
| Carry-forward of retained earnings from changes in defined benefit plans | ||||||||||||
| Carry-forward of retained earnings from other comprehensive income | -16,215,653.21 | 16,215,653.21 | ||||||||||
| Others | ||||||||||||
| (5) Special reserves | ||||||||||||
| Withdrawal for the period | ||||||||||||
| Use for the period | ||||||||||||
| (6) Others | ||||||||||||
| 4. Balance as at 30 June of the current year | 1,471,987,769.00 | 4,996,441,364.97 | 616,743,610.59 | 91,695,375.87 | 1,471,895,100.00 | 17,523,898,094.09 | 24,939,174,093.34 |
3. Company Profile
3.1 Company Overview
Luzhou Laojiao Co., Ltd. (hereinafter referred to as "Company" or "the Company"), formerly known asLuzhou City Qu Liquor Factory and Luzhou Laojiao Distillery in Sichuan Province. It was established inMarch 1950 on the basis of 36 brewing workshops from the Ming and Qing dynasties. On 20
September 1993, Luzhou Laojiao brewery established a joint-stock limited company with fund-raisingexclusively from its operational assets. On 25 October 1993, the public offering of shares was approvedby Sichuan Provincial People's Government and CSRC with two documents of ChuanFuHan (1993)No.673 and FaShenZi (1993) No.108. After the offering, the total share capital was 86,880,000 shares,which were listed and traded in Shenzhen stock exchange on 9 May 1994.
As the end of 31 December 2004, the Company's total share capital reached 841,399,673 shares aftermultiple rights issues, among which the controlling shareholder, State Assets Management Bureau ofLuzhou (later renamed as State-owned Assets Supervision and Administration Commission of Luzhou,hereinafter referred to as "SASAC of Luzhou") held 585,280,800 shares of the Company, with ashareholding ratio of 69.56%.
On 27 October 2005, the Company implemented the non-tradable share reform. After theimplementation, the total share capital remained unchanged, and the shareholding ratio of SASAC ofLuzhou decreased from 69.56% to 60.43%.
In November 2006, the Company implemented private placement, and the total share capital increasedfrom 841,399,673 shares to 871,399,673 shares. The shareholding ratio of SASAC of Luzhoudecreased from 60.43% to 58.35%.
As the end of 27 February 2007, SASAC of Luzhou sold 42,069,983 shares of the Company, and afterthe sale, it still held 466,375,156 shares of the Company, with its shareholding ratio reduced to 53.52%.
On 19 May 2008, the Company increased 522,839,803 shares of capital stock resulting from capitalreserve and undistributed profits transferred to increase capital stock. After the implementation, the totalshare capital reached 1,394,239,476 shares, among which, SASAC of Luzhou held 746,200,250 sharesof the Company, and the shareholding ratio was still 53.52%.
On 3 September 2009, the 300,000,000 shares and the 280,000,000 shares held by SASAC of Luzhouwere separately transferred to Luzhou Laojiao Group Co., Ltd. (hereinafter referred to as the "LaojiaoGroup") and Luzhou XingLu Investment Group Co., Ltd. (hereinafter referred to as the "Xinglu Group").After the transfer, Laojiao Group, Xinglu Group, and SASAC of Luzhou respectively held 300,000,000shares, 280,000,000 shares and 166,200,250 shares. So far, Laojiao Group became the first majorityshareholder and SASAC of Luzhou was the actual controller.
From 6 June 2012 to 20 November 2013, the first and second phases of the Company's equityincentive plan were exercised. After the exercise, the total share capital of the Company was changedto 1,402,252,476 shares.
On 10 April 2014 and 18 July 2016, SASAC of Luzhou transferred 81,088,320 shares and 84,000,000shares to Laojiao Group and Xinglu Group respectively. In addition, Laojiao Group has increased itsequity stake through the secondary market of 13,137,100 shares. So far, Laojiao Group, Xinglu Groupand SASAC of Luzhou held 394,225,489 shares, 365,971,142 shares and 1,111,930 sharesrespectively, with the shareholding ratios of 28.11%, 26.10% and 0.08% respectively.
On 23 August 2017, the Company issued CNY 62,500,000 ordinary shares (A shares) privately, raisinga total capital of CNY 3,000,000,000. After the additional issuance, the total capital stock of theCompany was changed to 1,464,752,476 shares. In addition, from 2017 to 2018, Laojiao Groupdecreased 13,137,100 shares that were increased through the secondary market from April 2014 toDecember 2015. After share reduction, Laojiao Group, Xinglu Group and SASAC of Luzhou held381,088,389 shares, 365,971,142 shares and 1,111,930 shares respectively, with the shareholdingratios of 26.02%, 24.99% and 0.08% respectively. From December 2023 to June 2024, Luzhou LaojiaoGroup Co., Ltd., through its wholly-owned subsidiary Sichuan Jinduo Investment Co., Ltd., increased itsholdings in the Company by 1,140,200 shares through call auction trading, accounting for 0.08% of thetotal share capital of the Company. Following that, Luzhou Laojiao Group Co., Ltd. and Sichuan JinduoInvestment Co., Ltd. collectively held 382,228,589 shares in the Company, representing 25.97% of thetotal share capital of the Company. Laojiao Group still was the first majority shareholder and SASAC ofLuzhou still was the actual controller.
In February 2022, the registration of 6,862,600 shares of the Restricted Share Incentive Plan grantedby the Company for the first time were completed; in September 2022, the Company granted 342,334shares of the Restricted Share Incentive Plan for the second time; in September 2022, with sevenawardees no longer eligible, the Company decided to repurchase and retire the 62,310 restrictedshares of them which had been granted but not lifted from restricted sales; in December 2022, theCompany granted 92,669 shares of the Restricted Share Incentive Plan for the third time; so far, theabove grant and repurchase of the Restricted Share Incentive Plan had all been registered; In Januaryand June 2024, as four incentive recipients no longer met the incentive conditions, the Companydecided to repurchase and retire a total of 21,266 restricted shares which had been granted but notlifted from restricted sales. As at 30 June, the cancellation registration has not yet been completed, andthe total shares of the Company were 1,471,987,769 shares. The grant and repurchase of theRestricted Share Incentive Plan caused no changes in the controlling shareholders and the actualcontroller of the Company.
3.2 Registered address of the Company, company type, and headquarter addressRegistered address and headquarter address of the Company are located in Sichuan Luzhou LaojiaoSquare and company type is other incorporated company (Listed).
3.3 Business nature of the Company and main business activityIndustry of the Company is the baijiu subdivision industry of the liquor and wine, beverage and refinedtea production industry.The main activity are research and development, production and sales of “National Cellar1573”,”Luzhou Laojiao” and other baijiu series.The main products are: “National Cellar 1573 Series”, ”Century-old Luzhou Laojiao JiaolingSeries” , ”Luzhou Laojiao Tequ”, ”Touqu”, ”Hey Guys” and other baijiu series.
3.4 The name of the controlling shareholder and the ultimate substantive controllerThe controlling shareholder is Luzhou Laojiao Group Co., Ltd.; the ultimate substantive control isSASAC of Luzhou.
3.5 Approval and submission of the financial report and its date
The financial report is approved and submitted by the board of directors of the Company on 29 August2024.
4. Basis of preparation of financial statements
4.1. Basis of preparation of financial statements
The Company has prepared its financial statements on a going concern basis, and the preparation isbased on actual transactions and events in compliance with Accounting Standards for BusinessEnterprises and relevant guidance and explanation (the following called the ASBE) issued by Ministry ofFinance, and Rules on Company Information Disclosure and Preparation of Publicly Issued SecuritiesNo.15- General Rules on Financial Reporting Rules (2023 Revision) issued by CSRC.
4.2. Going concern
The Company’s business activities have adequate financial support. Based on the current informationobtained by the Company, comprehensively considering factors such as macro-policy risk, marketoperation risk, current or long-term profitability, debt repayment ability of the Company, as well as itsresource of financial support, the Company believes that it is reasonable to prepare the financialstatements on a going concern basis and there are no events or situations resulting in significantdoubts over going concern for at least 12 months.
5. Significant accounting policies and accounting estimatesThe Company shall comply with the disclosure requirements for companies engaging in food & liquorand wine production of the Guidelines No. 3 of the Shenzhen Stock Exchange on Self-regulation ofListed Companies—Industry-specific Information Disclosure.
5.1 The declaration about compliance with ASBE
The financial statements of the Company have been prepared in accordance with ASBE, and presenttruly and completely, the financial position and the Company’s and results of operations, changes inshareholders’ equity and cash flows. In addition, in all material respects, the financial statements of theCompany comply with disclosure requirements of the financial statements and their notes inaccordance with Rules on Company Information Disclosure and Preparation of Publicly IssuedSecurities No.15- General Rules on Financial Reporting Rules revised by CSRC in 2023.
5.2 Accounting period
The Company adopts the calendar year as its accounting year, i.e. from 1st January to 31st December.
5.3 Business Cycle
The Company’s business cycle is 12 months.
5.4 Functional currency
The Company has adopted China Yuan (CNY) as functional currency.
5.5 Methods for determining materiality standards and selection criteria?Applicable □ N/A
| Item | Materiality standard |
| Material receivables withdrawal of bad debt provision separately accrued Material bad debt provision recovered or reversed in accounts receivables Significant write-off of accounts receivables Significant prepayments aging over one year, accounts payable, contract liabilities and other payables | The carrying balance at the end of the Reporting Period ≥ CNY 5 million |
| Material construction in progress | Single project under construction with a budget exceeding CNY 200 million and a total amount accounted for the current period exceeding CNY 50 million |
| Material overseas operating entity | The overseas operating entities' external revenue accounts for ≥ 3% of the consolidated operating revenue, and the total profit accounts for ≥ 0.5% of the consolidated total profit |
| Material non-wholly-owned subsidiary | The revenue of non-wholly-owned subsidiaries accounts for ≥ 3% of the consolidated operating revenue, and the total profit accounts for ≥ 0.5% of the consolidated total profit |
| Significant associated enterprise | The book value of long-term equity investments in associated enterprises accounts for ≥ 3% of the total assets in the consolidated financial statements |
5.6 The accounting treatment of business combinations involving enterprises undercommon control and business combinations not involving enterprises undercommon control
(1) Business combination under common control
Assets and liabilities obtained by the Company from the combine through business combination undercommon control shall be measured at the book value as stated in the consolidated financial statementsof ultimate controlling party at the combination date. The share of the book value of the merged party’sowner’s equity in the consolidated financial statements is taken as the initial investment cost of long-
term equity investments in individual financial statements. The capital reserve (stock premium or capitalpremium) is adjusted according to the difference between the book value of net asset acquired throughcombination and the book value of consideration paid for the combination (or total par value of sharesissued). If the capital reserve (stock premium or capital premium) is insufficient to offset, the retainedearnings shall be adjusted.
(2) Business combination not under common control
Assets paid, liabilities incurred or assumed and the equity securities issued as consideration forcombination shall be measured based on fair value on the acquisition date, the difference between fairvalue and its book value shall be included in current profit and loss. The Company shall recognize thedifference of the combination costs in excess of the fair value of the net identifiable asset acquired fromthe acquiree through combination as goodwill. After the review, if the combination costs are still in shortof the fair value of the net identifiable asset acquired from the acquiree through combination, includethe difference in the current profit and loss.Fees, commissions, and other transaction expenses paid on issuance of equity securities ascombination consideration in the business combination shall be included in the initial measurementamount of equity securities.
5.7 Criteria for judging control and preparation of consolidated financial statements
(1) Consolidated Financial Statement Scope
The scope of the Company’s consolidated financial statements is based on control, and all subsidiariescontrolled are included in the consolidation scope of the consolidated financial statements.
(2) Consolidation procedures
The consolidated financial statements are based on the financial statements of the Company and itssubsidiaries, and are prepared by the parent company with other relevant information. When preparingconsolidated financial statement, the Company considers the Group as an accounting entity, adoptsunified accounting policies, and applies the requirements of ASBE related to recognition, measurementand presentation to reflect the Group’s financial position, operating results and cash flows.
All the subsidiaries within the consolidation scope of consolidated financial statements shall adopt thesame accounting policies and accounting periods as those of the Company. If the accounting policies oraccounting periods of a subsidiary are different from those of the Company, the financial statements ofthe subsidiary, upon preparation of consolidated financial statements, shall be made necessaryadjustment based on its own accounting policies and accounting periods of the Company. Forsubsidiaries acquired from the business combination not under common control, the financialstatements shall be adjusted on the basis of the fair value of identifiable net assets on the date of
purchase. For the subsidiary acquired from the business combination under common control, its assetsand liabilities (including the goodwill formed by the acquisition of the subsidiary by the ultimatecontrolling party) shall be adjusted on the basis of the book value in the consolidated statements of theultimate controlling party.
The portion of a subsidiary’s equity, the current net profit and loss of subsidiaries, and the currentcomprehensive income attributable to non-controlling interests shall be separately presented as non-controlling interests in consolidated balance sheet within owners' equity, below the net profit line itemand below the total comprehensive income line item in the consolidated income statement respectively.When the amount of current loss attributable to non-controlling shareholders of a subsidiary exceedsthe balance of the non-controlling shareholders’ portion in the opening balance of owner's equity of thesubsidiary, the excess shall be allocated against the non-controlling interests.
Acquisition of subsidiaries or businessDuring the reporting period, if the Company acquires subsidiaries from the business combination undercommon control, the opening balance in the consolidated balance sheet shall be adjusted. The income,expenses and profits of the newly acquired subsidiaries from the beginning to the end of the reportingperiod shall be included in the consolidated income statement. The cash flows of the newly acquiredsubsidiaries from the beginning to the end of the reporting period shall be included in the consolidatedstatement of cash flows. At the same time, the relevant items of the comparative information shall beadjusted as the combined entity existed since the control point of the ultimate controlling party.
If the Company can control the investee from the business combination under common control due toadditional investment or other reasons, the parties involved in the combine shall be deemed to adjust inthe current state when the ultimate controlling party starts to control them. For the equity investmentbefore obtaining control of the investee, the recognized relevant profit or loss and other comprehensiveincome and other changes in net assets between the later of acquisition date of previous equity and thedate on which both the investor and the investee are under common control and the combination dateshall respectively write-down the beginning retained earnings or current profits and losses during theperiod of comparative information.
During the reporting period, if the Company acquires subsidiaries from the business combination notunder common control, the opening balance in the consolidated balance sheet shall not be adjusted.The income, expenses and profits of the newly acquired subsidiaries from the acquisition date to theend of the reporting period shall be included in the consolidated income statement. The cash flows ofthe newly acquired subsidiaries from the acquisition date to the end of the reporting period shall beincluded in the consolidated statement of cash flows.
When the Company becomes capable of exercising control over an investee not under common controldue to additional investment or other reasons, the Company shall re-measure the previously held equityinterests to its fair value on the acquisition date, and the difference shall be recognized as investmentincome. When the previously held equity investment is accounted for under equity method, any othercomprehensive income previously recognized and other equity changes (excluding othercomprehensive, net profit and loss and profit distribution ) in relation to the acquiree’s equity changesshall be transferred to profit and loss for the current period when acquisition took place, except for othercomprehensive income resulting from changes in net liabilities or net assets due to re-measurement ofdefined benefit plan by investee.
Disposal of subsidiaries and businessGeneral treatmentsDuring the reporting period, if the Company disposes subsidiaries, the income, expenses and profits ofthe newly disposed subsidiaries from the beginning to the disposal date shall be included in theconsolidated income statement. The cash flows from the beginning to the disposal date shall beincluded in the consolidated statement of cash flows.
In case of loss of control over the investee due to partial disposal of the equity investment or otherreasons, the Company shall re-measure the remaining equity investment at its fair value at the date ofloss of control. The amount of the consideration obtained from the disposal of the equity and the fairvalue of the remaining equity, minus the net asset shares calculated continuously from the acquisitiondate based on the previous shareholding proportion and the goodwill, the difference shall be included inthe investment income of the period when the control is lost. Other comprehensive income related tothe former subsidiary’s equity investment of or other changes in owners' equity excluding net profit andloss, other comprehensive income and profit distribution shall be transferred to investment income forthe current period when control is lost. Other comprehensive income resulting from changes in netliabilities or net assets due to re-measurement of defined benefit plan by investee is excluded.
Disposal of subsidiaries by stepIf the Company loses control of a subsidiary is through multiple transactions by steps, the terms,conditions and economic impact of the disposal transaction shall be considered. When one or more ofthe following conditions may indicate that multiple transactions should be treated as a package oftransactions for accounting treatment:
a.These arrangements were entered into at the same time or in contemplation of each other;b.These arrangements work together to achieve an overall commercial effect;c.The occurrence of one arrangement depends on the occurrence of at least one other arrangement;
d.One arrangement alone is not economically justified, but it is economically justified when consideredtogether with other arrangements
If the transactions of the disposal of the equity investment of the subsidiary until the loss of controlbelong to a package transaction, the Company shall account for as a transaction; However, thedifference between each disposal consideration received and the corresponding proportion of thesubsidiary’s net assets before the loss of control shall be recognized as other comprehensive income inthe consolidated financial statements and transferred into the profit and loss of the current period whenthe control is lost.
If the transactions from the disposal of the equity investment of the subsidiary to the loss of control arenot considered as a package transactions, the accounting treatment shall be conducted according tothe relevant policies on the partial disposal of the equity investment of the subsidiary where control isretained before the loss of control. When the control is lost, the disposal shall be accounted foraccording to the general treatment.
Purchase of non-controlling interestsThe difference between the increase in the cost of long-term equity investment result from acquisition ofnon-controlling shareholders and the share of net assets of the subsidiary calculated continuously fromthe acquisition date or combination date based on newly shareholding proportion shall be adjusted toequity (share) premium of capital reserves in the consolidated balance sheet. If the capital reserve isinsufficient, any excess shall be adjusted against retained earnings.
Partial disposals of equity investment in subsidiaries without loss of controlWhen the Company disposes of a portion of a long-term equity investment in a subsidiary without lossof control, the difference between disposal consideration and net assets of the subsidiary calculatedcontinuously since the acquisition date or the combination date related to the disposal of long-termequity investment shall be adjusted to equity (share) premium of capital reserves in the consolidatedbalance sheet. If the capital reserve is insufficient, any excess shall be adjusted against retainedearnings.
5.8 Classification of joint venture arrangements and the accounting treatmentmethod of common operation
(1) Classification of joint venture arrangements
A joint arrangement is classified as either a joint operation or a joint venture according to the structure,legal form, agreed terms and other facts and conditions of a joint arrangement. A joint arrangement thatis structured through a separate vehicle is usually classified as a joint venture. However, when a joint
arrangement provides clear evidence that it meets any of the following requirements and complies withapplicable laws and regulations as a joint operation:
a. The legal form of the joint arrangement indicates that the parties that have joint control have rights tothe assets, and obligations for the liabilities, relating to the arrangement.b. The terms of the joint arrangement specify that the parties that have joint control have the rights tothe assets, and the obligations for the liabilities, relating to the arrangement.c. Other facts and circumstances indicate that the parties that have joint control have rights to theassets, and the obligations for the liabilities, relating to the arrangement.The parties that have joint control have rights to substantially all of the output of the arrangement, andthe arrangement depends on the parties that have joint control on a continuous basis for settling theliabilities of the arrangement.
(2) Accounting by parties of a joint operator
A joint operator shall recognize the following items in relation to its interest in a joint operation, andaccount for them in accordance with relevant accounting standards:
a. Its solely-held assets, and its share of any assets held jointly;b. Its solely-assumed liabilities, and its share of any liabilities incurred jointly;c. Its revenue from the sale of its share of the output arising from the joint operation;d. Its share of the revenue from sale of the output by the joint operation; ande. Its solely-incurred expenses and its share of any expenses incurred jointly.
The Company shall only recognize the portion of the profit and loss attributable to other participants inthe joint venture, resulting from investment or sale of assets to the joint venture by the Company(excluding those assets constituting the business), prior to the sale of such assets to a third party. TheCompany shall fully recognize impairment loss when there is any impairment loss of invested or soldassets occurring in accordance with the ASBE No.8-Asset Impairment. The Company shall onlyrecognize the part of the profit and loss attributable to other participants in the joint venture beforeselling the assets and other assets purchased from the joint venture (excluding those assetsconstituting the business) to a third party. When the impairment loss of the purchased assets is inaccordance with the ASBE No.8-Asset Impairment, the Company shall recognize such lossesaccording to its share. When the Company does not have common control over the joint venture, if theCompany enjoys the assets related to the joint venture and assumes the liabilities related to the jointventure, the accounting treatment shall be conducted according to the above principles. Otherwise, theaccounting treatment shall be conducted in accordance with the relevant accounting standards.
5.9 Cash and cash equivalents
When preparing the cash flow statement, the Company recognizes cash on hand and deposits that can
be readily withdrawn on demand as cash. Cash equivalents are the Company’s short-term (due within 3months from purchase date), highly liquid investments that are readily convertible to known amounts ofcash and which are subject to an insignificant risk of changes in value. Restricted bank deposits are notrecognized as cash and cash equivalents in the cash flow statement.
5.10 Foreign currency transactions and translation of foreign currency statements
(1) Foreign currency transactions
At the time of initial recognition of a foreign currency transaction of the Company, the amount in theforeign currency shall be translated into the amount in CNY currency at the spot exchange rate of thetransaction date. For the monetary items of foreign currencies, the translation is done according to spotrate of the balance sheet date. The exchange difference generated from the difference of spot rate ofthe current balance sheet date and the time of initial recognition of a foreign currency or the previousbalance sheet date is charged to the profit or loss of the current period except that the exchangedifference generated from foreign currency borrowings relating to assets of which the acquisition orproduction satisfies the capitalization conditions is capitalized.Non-monetary items measured at fair value that is reflected in foreign currency at the end of the period,the Company shall firstly translate the foreign currency into the amount in functional currency at thespot exchange rate on the date when the fair value is determined, and then compare it with the originalfunctional currency amount. Difference between the translated functional currency amount and theoriginal functional currency amount is treated as profit or loss from changes in fair value (includingchanges in exchange rate) and is recognized in current profit and loss. If there is a non-monetary itemof available-for-sale financial assets, the differences are recorded into other comprehensive income.
(2) Translation of foreign currency statements
Assets and liabilities in the balance sheets shall be translated at the spot exchange rates on balancesheet date. Shareholders’ equity items, except for the item of "undistributed profits", are translated atthe spot exchange rates on the dates when the transactions occur. Revenue and expense items in theincome statement are translated at the spot exchange rates on the dates when the transactions occuror at the exchange rate determined in a systematical and reasonable method and similar to the spotexchange rate on the day when the transactions occur. Differences arising from the above translationsof foreign currency financial statements are separately listed under other comprehensive income in theconsolidated balance sheet. If the overseas business is partly disposed of, the foreign currencyfinancial statements exchange difference shall be calculated in proportion to the percentage of disposaland transferred to gain or loss on disposal for the current period.Foreign currency cash flow and cash flow of foreign subsidiaries shall be translated at approximateexchange rate of spot rate on the date of cash flow.
5.11 Financial Instruments
A financial instrument is a contract that gives rise to a financial asset of one entity and a financialliability or equity instrument of another entity. When the Company becomes a party to a financialinstrument contract, the related financial asset or financial liability should be recognized.
(1) Classification, recognition and measurement of financial assets
Based on the business model of financial asset management and the contract cash flow characteristicsof financial assets, the Company classifies financial assets into: financial assets measured at amortizedcost; financial assets measured at fair value with their changes included into other comprehensiveincome; and financial assets measured at fair value with their changes included into currentprofits/losses.
At the initial recognition, financial assets are measured at fair value. For financial assets measured atfair value with their changes included into current profits/losses, the expenses involved in thetransaction are directly recorded into current profits/losses; for other financial liabilities, the expensesinvolved in the transaction are recorded into the initially recognized amount.
1) Financial assets measured at amortized cost
The business model in which the Company manages financial assets measured at amortized cost aimsto receive contract cash flow. Furthermore, the characteristics of the contract cash flow of such financialassets are consistent with basic borrowing and lending arrangements, which means that cash flowgenerated on a specific date serves only as payment for principal and interests based on the amount ofunpaid principal. The Company adopts the effective interest method for such financial interests,performs subsequent measurement of them at amortized cost, and includes the gains or losses fromderecognition, changes or impairment of them into current profits/losses.
2) Financial assets measured at fair value with their changes included into other comprehensive incomeThe business model in which the Company manages such financial assets both aims to receivecontract cash flow and for the purpose of sale. Furthermore, the characteristics of the contract cashflow of such financial assets are consistent with basic borrowing and lending arrangements. TheCompany measure such financial assets at fair value and include their changes into othercomprehensive income, but record impairment losses or gains, exchange gains or losses and interestincome calculated in the effective interest method into current profits/losses.
At the initial recognition, the Company may specify non-trading equity instrument investment as afinancial asset measured at fair value with its changes included into other comprehensive income andshould recognize the dividend income according to regulations; the specification is irrevocable once
made. When the financial asset is derecognized, the cumulative gains or losses previously included intoother comprehensive income should be transferred into retained earnings.
3) Financial assets measured at fair value with their changes included into current profits/lossesFor financial assets other than the above financial assets measured at amortized cost and financialassets measured at fair value with their changes included into other comprehensive income, theCompany classifies them as financial assets measured at fair value with their changes included intocurrent profits/losses. In addition, at the initial recognition, the Company specifies partial financialassets as financial assets measured at fair value with their changes included into current profits/losses,in order to eliminate or substantially reduce accounting mismatch. For such financial assets, theCompany performs subsequent measurement using fair value and records changes in the fair valueinto current profits/losses.
(2) Classification, recognition and measurement of financial liabilities
At their initial recognition, financial liabilities are divided into financial liabilities measured at fair valuewith their changes included into current profits/losses and other financial liabilities. For financialliabilities measured at fair value with their changes included into current profits/losses, the expensesinvolved in the transaction are directly recorded into the current profits/losses. For other financialliabilities, the expenses involved in the transaction are recorded into the initially recognized value.
1) Financial liabilities measured at fair value with their changes included into current profits/lossesFinancial liabilities measured at fair value with their changes included into current profits/losses includetrading financial liabilities (including derivatives classified as financial liabilities) and the financialliabilities specified to be measured at fair value with their changes included into current profits/losses atthe initial recognition.
Trading financial liabilities (including derivatives classified as financial liabilities) are subsequentlymeasured at fair value, with changes in fair value recorded into current profits/losses, except for thoserelated to hedge accounting.
For those specified as financial liabilities measured at fair value with their changes included into currentprofits/losses, changes in the fair value of such liabilities caused by changes in the Company’s owncredit risk should be included into other comprehensive income. In derecognition of such liabilities,cumulative changes in their value caused by the Company’s own credit risk that have been recordedinto other comprehensive income should be transferred into retained earnings. Other changes in theirfair value should be recorded into current profits/losses. If treatment of the impact of the Company’sown credit risk changes of such financial liabilities in the above manner causes or expands accounting
mismatch in profits/losses, the Company will include all gains or losses of such financial liabilities(including the amount of the impact of the Company’s own credit risk changes) into currentprofits/losses.
2) Other financial liabilities
Financial liabilities other than those formed from the transfer of financial assets not meetingderecognition conditions or continuous involvement into transferred financial assets and those outsidefinancial guarantee contracts are classified as financial liabilities measured at amortized cost. Suchfinancial liabilities should be subsequently measured at amortized cost and the gains or losses fromderecognition or amortization should be included into current profits/losses.
(3) Recognition basis and measurement method of transfer of financial assetsIf a financial asset meets any of the following conditions, it shall be derecognized: 1)The contractualright for collecting the cash flow of the financial asset has been terminated; 2)The financial asset hasbeen transferred and almost all the risks and remunerations in respect of the ownership of the financialasset has been transferred to the transferee; 3)The financial asset has been transferred, and althoughthe enterprise neither transfers nor retains almost all the risks and remunerations in respect of theownership of the financial asset, it has abandoned its control over the asset.
If the enterprise neither transfers nor retains almost all the risks and remunerations in respect of theownership of the financial asset and does not abandon its control over the asset, the involved financialasset shall be recognized according to the level of continuous involvement of the transferred financialasset and the relevant liabilities shall be recognized accordingly. The level of continuous involvement ofthe transferred financial asset refers to the level of risk faced by the enterprise due to changes in thevalue of the financial asset.
If the overall transfer of the financial asset meets the recognition conditions, the difference between thecarrying value of the transferred financial asset as well as the consideration received from the transferand the cumulative amount of fair value changes originally-recorded into other comprehensive incomesshall be recorded into the current profits/losses.
If partial transfer of the financial asset meets the recognition conditions, the carrying value of thetransferred financial asset shall be apportioned at the relative fair value between the derecognition andunderecognition part. The difference between the summation of the consideration received from thetransfer and the cumulative amount of fair value changes originally-recorded into other comprehensiveincomes that should be apportioned to the derecognition part and the apportioned aforementionedcarrying value shall be recorded into the current profits/losses.
For a financial asset sold with the right of recourse or with the transfer of the financial assetendorsement, the Company shall decide whether almost all the risks and remunerations in respect ofthe ownership of the financial asset should be transferred. If they are transferred, the financial assetshall be derecognized; if they are retained, the financial asset shall not be derecognized; if they areneither transferred nor retained, the Company will continue to decide whether the enterprise shouldretain control over the asset and perform the accounting treatment according to the principles stated inprevious paragraphs.
(4) Derecognition of financial liabilities
When the current obligation of a financial liability (or a part of it) is relieved, the Company willderecognize the financial liability (or the part of it). When the Company (borrower) signs an agreementwith a lender to replace an original financial liability in the form of bearing a new financial liability andthe contract terms for the new financial liability differ from those for the original in substance, theoriginal financial liability should be derecognized and the new one should be recognized. When theCompany makes substantial changes to the contract terms of an original financial liability (or a part of it),the original financial liability should be derecognized and a new financial liability should be recognizedaccording to the amended contract terms.
When a financial liability (or a part of it) is derecognized, the Company will include the differencebetween its carrying value and the consideration paid (including non-cash assets or liabilities borne thatare transferred out) into current profits/losses.
(5) Offsetting of financial assets and financial liabilities
When the Company has the legal right to offset recognized financial assets and financial liabilities andmay execute the legal right currently and simultaneously, the Company plans to settle orsimultaneously encash the financial assets in net amounts and pay off the financial liabilities, thefinancial assets and the financial liabilities which are presented in the net amount after the mutual offsetin the balance sheet. Other than that, they shall be presented separately in the balance sheet withoutthe mutual offset.
(6) Method of determining the fair value of financial assets and financial liabilitiesFair value refers to the price that a market participant can receive for selling an asset or transferring aliability in an orderly transaction on the measurement date. For an existing financial instrument in anactive market, the Company adopts the quotations in the active market to determine its fair value.Quotations in the active market refer to prices that can be easily obtained from exchanges, brokers,industrial associations and pricing service institutions and represent the actual prices in the market
transactions happening in a fair trade. For a non-existing financial instrument in an active market, theCompany adopts the valuation technique to determine its fair value. The valuation technique includesreferences to familiar situations and the prices used by the parties voluntarily participating in the recentmarket transactions, as well as references to the present fair value of other financial instruments of thesame nature, discounted cash flow method and options pricing model. In the valuation, the Companyuses a valuation technique that is applicable in the current situation with sufficient data available andother information support, chooses input values that are consistent with the asset or liabilitycharacteristics considered by market players in related asset or liability transactions, and makemaximum effort to use related observable input values on a preferential basis. When it is unable orunfeasible to obtain related observable input values, unobservable will be used.
(7) Equity instruments
Equity instruments refer to the contracts that can prove the Company’s residual equity of assets afterthe deduction of all liabilities. The Company’s issuance (including refinancing), repurchase, sale orcancellation of equity instruments serve as the change treatment of equity. Transaction expensesrelated to the equity transactions are deducted from the equity. The Company does not recognizechanges in the fair value of equity instruments.
Dividends from the Company’s equity instruments distributed during the validity (including the “interests”from instruments classified as equity instruments) are treated as profit distribution.
(8) Impairment of financial instruments
Based on the expected credit loss, the Company treats financial assets measured at amortized costand debt instrument investment measured at fair value with its changes included into othercomprehensive income by impairment and recognizes the provision for loss.
Credit loss means the difference between all contract cash flow discounted at the original effectiveinterest rate to be received according to contracts and all contract cash flow expected to be received,namely, the present value of all cash shortage. For a financial asset with credit impairment purchasedby or originated from the Company, it should be discounted by the effective interest rate after creditadjustment to the financial asset.
For accounts receivable that do not contain significant financing components, the Company adoptssimplified measurement to measure loss provisions according to the amount equivalent to the expectedcredit loss for the entire duration.
For a financial asset other than those using the above simplified measurement, the Company assesses
on each balance sheet date whether its credit risk has substantially increased since the initialrecognition. If it has not and is in the first stage, the Company will measure the loss provision at theamount equivalent to the expected credit loss for the next 12 months and calculate the interest incomeaccording to the book balance and the effective interest rate; if it has substantially increased since theinitial recognition without credit impairment and is in the second stage, the Company will measure theloss provision at the amount equivalent to the expected credit loss for the entire duration and calculatethe interest income according to the book balance and the effective interest rate; if credit impairmenthas occurred since the initial recognition and is in the third stage, the Company will measure the lossprovision by the amount equivalent to the expected credit loss for the entire duration and calculate theinterest income according to the amortization cost and the effective interest rate. For financialinstruments with low credit risks on balance sheet dates, the Company assumes that their credit riskshave not substantially increased since the initial recognition.
The Company assesses expected credit losses of financial instruments based on individual and groupassessment. The Company considers the credit risk characteristics of different customers andassesses the expected credit losses of accounts receivable and other receivables based on accountage portfolio. When assessing expected credit losses, the Company considers reasonable and well-founded information on past matters, present conditions and forecast of future economic conditions.
When it no longer reasonably expects to recover all or part of the contract cash flow of financial assets,the Company will directly write down the book balance of such financial assets.
5.12 Notes receivable
The types of portfolios for which bad debt provisions are made according to the portfolios of credit riskcharacteristics and the basis for determining them:
Divide notes receivables into various portfolios according to common risk characteristics based on thecredit risk characteristics of acceptors and determine the accounting estimate policies of expectedcredit loss：
| Portfolio name | Provision method |
| Bank acceptance bill portfolio | The management evaluates that this type has low credit risk and its fixed bad debt provision ratio is 0%. |
| Trade acceptance portfolio | The provision for impairment is made according to the expected loss rate with the same portfolio classification of accounts receivables |
5.13 Accounts receivables
The types of portfolios for which bad debt provisions are made according to the portfolios of credit riskcharacteristics and the basis for determining them:
As for accounts receivables, regardless of whether there is a significant financing component, the
Company always measures the provision for loss based on the amount equivalent to the expectedcredit loss over the entire life, and the resulting increase or reversal of provision for loss shall beincluded in the current profit or loss as gains or losses on impairment. The accrual method is as follows:
(1) When there is objective evidence showing that an account receivable has incurred credit impairment,the Company shall make bad debt provision for the account receivable and recognize the expectedcredit loss.
(2) When the information about the expected credit loss of a single financial asset cannot be evaluatedat a reasonable cost, the Company shall divide the accounts receivables portfolio according to creditrisk characteristics and measure the expected credit loss based on portfolios:
| Portfolio name | Provision method |
| Risk portfolio | Expected credit loss |
| Other portfolio | No bad debt provision |
Other portfolio refers to the normal intercourse funds among the Company and businesses within thescope of consolidation, the recovery of which are controllable with no risks. Thus, no bad debt provisionwas made.The aging calculation method of credit risk characteristic portfolio based on aging:
The Company combines the accounts receivables classified as risk portfolio in accordance with similarcredit risk characteristics (aging), and calculates the expected credit loss through the exposure atdefault and expected credit loss rate over the entire life based on the current situation and prediction offuture economic situation consulting historical credit loss experience. The comparative table of thecredit loss rate is as follows:
| Aging | Expected loss provision rate % |
| Within 1 year | 5 |
| 1-2 years | 10 |
| 2-3 years | 20 |
| 3-4 years | 40 |
| 4-5 years | 80 |
| Over 5 years | 100 |
The ageing of accounts receivable is calculated from the month in which the amounts are actuallyincurred.
5.14 Accounts receivables financing
The accounts receivables financing of the Company refer to the notes receivables measured at fairvalue through other comprehensive income on the balance sheet date. For more details, see Note 5.11Financial instruments.
5.15 Other receivables
Methods of determination and accounting treatment for expected credit losses of other receivables
The types of portfolios for which bad debt provisions are made according to the portfolios of credit riskcharacteristics and the basis for determining them:
As for other receivables, regardless of whether there is a significant financing component, the Companyalways calculates the expected credit loss through the exposure at default and expected credit loss ratein the next 12 months or over the entire life based on the current situation and prediction of futureeconomic situation consulting historical credit loss experience, and the resulting increase or reversal ofprovision for loss shall be included in the current profit or loss as gains or losses on impairment. Theaccrual method is as follows:
(1) When there is objective evidence showing that the other receivable has incurred credit impairment,the Company shall make bad debt provision for the other receivable and recognize the expected creditloss.
(2) When the information about the expected credit loss of a single financial asset cannot be evaluatedat a reasonable cost, the Company shall divide the other receivables portfolio according to credit riskcharacteristics and measure the expected credit loss based on portfolios.
| Portfolio name | Provision method |
| Risk portfolio | Expected credit loss |
| Other portfolio | No bad debt provision |
Other portfolio refers to the normal intercourse funds among the Company and businesses within thescope of consolidation, the recovery of which are controllable with no risks. Thus, no bad debt provisionwas made.The aging calculation method of credit risk characteristic portfolio based on aging:
The Company combines the other receivables classified as risk portfolio in accordance with similarcredit risk characteristics (aging), and calculates the expected credit loss through the exposure atdefault and expected credit loss rate in the next 12 months or over the entire life based on the currentsituation and prediction of future economic situation consulting historical credit loss experience. Thecomparative table of the credit loss rate is as follows:
| Aging | Expected loss provision rate % |
| Within 1 year | 5 |
| 1-2 years | 10 |
| 2-3 years | 20 |
| 3-4 years | 40 |
| 4-5 years | 80 |
| Over 5 years | 100 |
The ageing of other receivables is calculated from the month in which the amounts are actuallyincurred.
5.16 Contract assets
The Company presents contract assets or contract liabilities on the balance sheet according to the
relationship between the fulfillment of its contract performance obligations and its customers’ payment.
Considerations that the Company has the right to collect for commodities transferred or servicesprovided to customers (and such right depends on other factors than time lapses) are presented ascontract assets. The Company presents the right possessed to collect consideration from customersunconditionally (only depending on the passing of time) as accounts receivable. Refer to “The methodof determining the expected credit loss of accounts receivables and accounting treatment method” forthe detail on the Company’s method of determining the expected credit loss of contract assets andaccounting treatment method.
5.17 Inventory
(1) Classification of inventory
Inventories are classified as: raw materials, goods in progress (including semi-finished goods), stockcommodities, and dispatched inventories.
(2) Measurement method of acquiring and dispatching inventories
The standard cost is used for daily accounting of raw materials, and the difference of material costshould be carried forward on a monthly basis to adjust the standard cost into the actual cost; The goodsin progress (including semi-finished goods) shall be accounted according to the actual cost, and theweighted average method shall be used when they are received and delivered. The actual cost of theinventory at the end of the month above shall be taken as the standard cost, and the delivery shall bepriced according to the standard cost. At the end of the month, the standard cost of the inventory at theend of the month shall be adjusted into the actual cost through the cost-sharing difference.
(3) Determining criteria and method of provision for stock obsolescence
At the end of the period, inventory is measured according to the lower of cost and net realizable value.The difference between inventory cost and net realizable value is higher than the provision for stockobsolescence, which is recorded into current profit and loss. For inventories that are related to productranges produced and sold in the same district or used for the same or similar ultimate purpose and aredifficult to be measured separately from other inventories, the Company provides for stockobsolescence as a whole. For inventories that have large quantities but low value, the Companyprovides for stock obsolescence on a category basis.
The materials held for production shall be measured at cost if the net realizable value of the finishedproducts is higher than the cost. If a decline in the value of materials shows that the net realizable valueof the finished products is lower than the cost, the materials shall be measured at the net realizablevalue.
(4) Inventory system
The Company adopts perpetual inventory system.
(5) Amortization method of packing materials and low-cost consumables
It is amortized in full at once.
5.18 Assets held for sale
(1) Determining criteria for non-current assets held for sale or disposal groupsThe Company shall classify the non-current assets or disposal group meeting the following conditionsinto the held-for-sale category: The assets (or disposal group) must be available for immediate sale inits present condition subject only to terms that are usual and customary for sales of such assets (ordisposal groups); Its sale must be highly probable.; The Company has already made a decision todispose the component and has a commitment from the purchaser, the transfer will be completed withinone year.
The non-current assets or disposal group acquired by the Company for resale shall be divided into theheld-for-sale category on the acquisition date if it meets the condition that "the sale is expected to becompleted within one year" and if it is likely to meet other conditions for the held-for-sale category withina short period (usually three months).
Due to one of the following reasons that the Company is unable to control, leading to the transactionsuncompleted with non-related party within one year, and the Company still commits to sale non-currentassets or disposal groups, it can continue to account for non-current assets or disposal groups as held-for-sale: the buyer or any other party accidentally set sale extension condition. The Company has totake action in time according to these conditions and the extension problem is expected to be solvedwithin one year; In rare cases, the Company has taken the necessary steps and re-satisfy the hold forsale category condition within the first year for the new circumstances which caused it unable tocomplete the sale of the non-current assets or disposal group within one year.
(2) Accounting treatment of non-current assets or disposal groups held for salea. Initial measurement and subsequent measurementWhen the Company measure a non-current asset or disposal group held for sale initially or re-measureat balance sheet date subsequently, the impairment loss should be recognized if the book value ishigher than fair value less costs to sell at the amount of the difference of these two in profit and loss,the provision for assets held for sale need to be recognized at the same time.
For the non-current assets or disposal groups divided into held-for-sale category on the acquisition date,they shall be measured as the lower of the initial measurement amount and the net amount afterdeducting the selling expenses from the fair value under the assumption that it is not divided into held-for-sale categories at the initial measurement. Except for the non-current assets or the disposal groupsobtained in the enterprise merger, the difference caused by the non-current assets or the disposalgroups taking the net amount after the fair value minus the selling expenses as the initial measurementamount shall be recorded into the current profit and loss.
For the impairment of disposal group, it should write off goodwill if existing, and then write down therelated assets proportionally.
Depreciation or amortization should cease for the non-current asset held for sale. Interest and othercharges on liabilities in the disposal groups held for sale continue to be recognized.
b. Accounting treatment of reversal of impairment lossIf the net amount of the non-current assets held for sale on the subsequent balance sheet dateincreases after the fair value minus the selling expenses, the amount previously written down shall bereversed, and the amount of the impairment loss recognized after being classified as the held-for-saleshall be reversed, and the reversed amount shall be included in the current profit and loss. Theimpairment loss recognized before the classification of the held-for-sale shall not be reversed.
If the net amount of the disposal groups held for sale on the subsequent balance sheet date increasesafter the fair value deducting the selling expenses, the amount previously written down shall bereversed, and the amount of the impairment loss recognized as non-current assets after beingclassified as the held-for-sale shall be reversed, and the reversed amount shall be included in thecurrent profit and loss. The book value of the goodwill that has been written down and the impairmentlosses recognized before the classification of the held-for-sale shall not be reversed.
The subsequent reversed amount of the impairment loss recognized by the disposal groups held forsale shall be increased in proportion to the book value of non-current assets except goodwill in thedisposal groups.
c. Recognition criteria and presentation of discontinued operationsNon-current assets or disposal groups that are no longer divided into held-for-sale category or non-current assets are removed from disposal groups held for sale because of no longer meeting thecondition of classification of held-for-sale, they are measured at lower of the following two: book value
before being classified as the held-for-sale considering depreciation, amortization or impairment thatshould have been recognized under the assumption that it is not divided into held-for-sale categories;and recoverable amount.
When terminating the recognition of the non-current assets held for sale or the disposal groups, theunrecognized gains or losses shall be recorded into the current profit and loss.
5.19. Investments in debt obligations
N/A
5.20 Investments in other debt obligations
N/A
5.21 Long-term receivables
For more details, see Note 5.11 Financial instruments.
5.22 Long-term equity investment
(1) Judgment criteria of common control and significant influence
Common control on an agreement with other participants refers to the Company share control withother participants on an arrangement according to relevant conventions, which exists only whendecisions about the relevant activities require the unanimous consent of the parties sharing control.This arrangement belongs to joint venture. Where the joint venture arrangement is made by a separateentity and the Company is judged to have rights to the net assets of such a separate entity according tothe relevant conventions. Such a separate entity shall be regarded as a joint venture and accounted bythe equity method. If the Company is judged to be not entitled to the net assets of the separate entityaccording to relevant conventions, the separate entity shall be regarded as a joint venture and theCompany shall recognize the items related to the shares of the joint venture and perform accountingtreatment in accordance with relevant accounting standards.The term ‘significant influence’ refers to the power to participate in decision-making on the financial andoperating policies of the investee, but with no control or joint control over the formulation of thesepolicies. The Company judges that it has a significant impact on the invested entity through one or moreof the following situations and taking all the facts and circumstances into consideration:
a. Dispatch representatives to the board of directors or similar authorities of the investee.b. To participate in the financial and business policy making process of the investee.c. Significant transactions with the investee.d. Dispatch management personnel to the investee.
e. To provide key technical data to the investee.
(2) Determination of the initial investment cost
a. Long-term equity investment resulting from combinationBusiness combination under common control：
For the long-term equity investments obtained by cash paid, non-monetary assets paid or assumedliabilities and the equity securities issued by the acquirer, on the merger date, the initial investment costof long-term equity investment shall be taken as the share of the owner's equity of the investee in thebook value of the final control party's consolidated financial statements. If the investee under businesscombination under common control can be controlled due to additional investment or other reasons, theinitial investment cost of long-term equity investment shall be determined on the merger date accordingto the share of the net assets of the investee in the book value of the final control party's consolidatedfinancial statements. The difference between the initial investment cost of the long-term equityinvestment on the merger date and sum of the book value of the long-term equity investment before themerger and the new consideration of acquiring shares on the merger date shall be recorded to adjustthe equity premium. If the equity premium is insufficient to be written down, the retained earnings shallbe written down.
Business combination not under common control：The Company takes the initial investment cost oflong-term equity investment as the merger cost determined on the purchase date. If the investee can becontrolled under business combination not under common control due to additional investment or otherreasons, the previous book value of the equity investment held plus the sum of the newly addedinvestment cost shall be taken as the initial investment cost calculated according to the cost method.
b. Long-term equity investment obtained by other meansFor the long-term equity investments obtained by cash paid, the Company recognizes their fair value asthe initial investment costs.
For the long-term equity investments acquired by the issue of equity securities, the initial investmentcost shall be the fair value of the equity securities issued.
For long-term equity investments obtained by non-monetary assets exchange, under the condition thatan exchange of non-monetary assets is of commerce nature and the fair value of assets exchangedcan be reliably measured, non-monetary assets traded in is initially stated at the fair value of the assetstraded out, unless there is conclusive evidence indicating that the fair value of the assets traded in ismore reliable; if the above conditions are not satisfied, initial investment costs of long-term equityinvestments traded in shall be recognized at the book value of the assets traded out and the relevant
taxes and surcharges payable.
For long-term equity investments obtained by debt restructuring, the Company recognizes the fair valueof shares of debt-for-equity swap as the initial investment costs.
(3) Subsequent measurement and recognition of profit and loss
a. Long-term equity investments measured under the cost methodLong-term equity investments that can control the investee are measured under the cost method. Forlong-term equity investments accounted at the cost method, except cash dividends or profits declaredbut not yet distributed which are included in the actual payments or the consideration actually paid forthe investment, the cash dividends or profits declared by the investee shall be recognized as theinvestment income irrespective of net profits realized by the investee before investment or afterinvestment.
b. Long-term equity investments measured under the equity methodFor the long-term equity investment which has joint control or significant influence over the investee, theequity method is adopted for accounting. For long-term equity investments measured at the equitymethod, if the initial investment costs are higher than the investor’s attributable share of the fair value ofthe investee’s identifiable net assets, no adjustment will be made to the initial costs of the long-termequity investments; if the initial investment costs are lower than the investor’s attributable share of thefair value of the investee’s identifiable net assets, the difference shall be recognized in current profit andloss.
The Company shall, according to the shares of net profits and other comprehensive income realized bythe investee that shall be enjoyed or borne by the Company, recognize the profit and loss on theinvestments and adjust the book value of the long-term equity investments. When recognizing the netprofits and losses and other comprehensive income of the investee that the Company shall enjoy orbear, the Company shall make a recognition and calculation based on the net book profits and losses ofthe investee after appropriate adjustments. However, where the Company is unable to obtain therelevant information due to failure to reasonably determine the fair value of the investee’s identifiableassets, minor difference between the investee’s identifiable assets and the book value thereof or otherreasons, the profits or losses on the investments shall be directly calculated and recognized based onthe net book profits and losses of the investee. The Company shall calculate the part distributed fromcash dividends or profits declared by the investee and correspondingly reduce the book value of thelong-term equity investments. When recognizing the income from investments in associates and jointventures, the Company shall write off the part of incomes from internal unrealized transactions betweenthe Company and associates and joint ventures which are attributable to the Company and recognize
the profit and loss on investments on such basis. Where the losses on internal transactions betweenthe Company and the investee are impairment of related assets, full amounts of such losses shall berecognized. Profit and loss from internal unrealized transactions between the Company’s subsidiariesincluded into the combination scope and associates and joint ventures shall be written off according tothe above principles and the profit and loss on investments thereafter shall be recognized on such basis.
When the share of net loss of the investee attributable to the Company is recognized, it is treated in thefollowing sequence: Firstly, write off the book value of the long-term equity investments; where the bookvalue of the long-term equity investments is insufficient to cover the loss, investment losses arerecognized to the extent that book value of long-term equity which form net investment in the investeein other substances and the book value of long-term receivables shall be written off; after all the abovetreatments, if the Company still assumes additional obligation according to investment contracts oragreements, the obligation expected to be assumed should be recognized as provision and includedinto the investment loss in the current period. If the investee is profitable in subsequent accountingperiods, the Company shall treat the loss in reverse order against that described above after deductingunrecognized share of loss: i.e. write down the book value of the recognized provision, then restore thebook value of long-term interests which substantially form net investments in the investee, then restorethe book value of long-term investments, and recognize investment income at the same time.
5.23 Investment property
Measurement model of investment propertyCost modelMethod of depreciation or amortizationInvestment property is the property that is held to earn rent or capital appreciation or both and can bemeasured and sold separately. The Company’s investment property includes land use right already rent,land use right held for appreciation and then sold, and buildings already rent.
(1) Initial Recognition
When the Company can obtain the rental income or value-added income related to the investmentproperty and the cost of the investment property that can be measured reliably, the Company willinitially measure it according to the actual expenditure of purchase or construction:
The cost of the purchased investment property includes the purchase price and related taxes directlyattributable to the asset;The cost of self-built investment property consists of the necessary expenses incurred before the assetreaches the intended use condition;The cost of the investment property obtained by other means shall be recognized in accordance withrelevant accounting standards.
(2) Subsequent measurement
In general, the Company adopts the cost model to measure the follow-up expenditure of investmentproperty. The depreciation or amortization of investment property shall be carried out in accordancewith the accounting policies for the Company's fixed assets or intangible assets.
If there is solid evidence suggests that the investment property acquired can be measured at fair valuecontinuously and reliably, the Company can use fair value model for subsequent measurement. For theinvestment property measured at fair value model, the Company does not provide depreciation oramortization and adjusts its book value based on the fair value of investment property at the balancesheet date. The difference between the fair value and book value is recorded into current profit or loss.
(3) When the Company changes the use of investment property, the relevant investment property willbe transferred to other assets.
5.24. Fixed assets
(1) Recognition of fixed assets
Fixed assets refer to tangible assets held for the purpose of producing commodities, providingservices, renting or business management with useful life exceeding one accounting year. Fixedassets are recognized when the following criteria are satisfied simultaneously: It is probable that theeconomic benefits relating to the fixed assets will flow into the Company; the cost of the fixed assetscan be measured reliably.
(2) Depreciation of fixed assets
| Category | Depreciation method | Estimated useful life (Year) | Estimated residual value rate (%) | Annual depreciation rate (%) |
| Buildings and Constructions | Straight-line method | 10－45 | 5% | 9.50－2.11 |
| Special equipment | Straight-line method | 5－35 | 5% | 19.00－2.71 |
| Universal equipment | Straight-line method | 4－25 | 5% | 23.75－3.80 |
| Transportation equipment | Straight-line method | 6 | 5% | 15.83 |
| Other equipment | Straight-line method | 4－16 | 5% | 23.75－5.94 |
Except for fixed assets still in use after full depreciation, the Company depreciates all fixed assets andcalculates the depreciation in the straight-line depreciation method.Based on the nature and use of fixed assets, the Company determines their service life and estimatednet salvage value and reviews their service life, estimated net salvage value and depreciation methodat the end of the year. Changes in the service life, estimated net salvage value and depreciationmethod of the same type of assets are treated as changes in accounting estimation.
(3) Impairment test method and impairment provision accrued method of fixed assetsAt the end of the period, the fixed assets shall be measured at the lower of the book value and therecoverable amount. If the recoverable amount of fixed assets is lower than the book value due to acontinuous decline in the market value, or technological obsolescence, damage, or long-term idleness,a provision for impairment of the fixed assets shall be made for the difference between the recoverableamount and the book value of individual fixed assets. If the recoverable amount of the individual assetis difficult to estimate, the Company will determine the recoverable amount of the asset group based onthe asset group to which the asset belongs. The impairment losses on fixed assets must not bereversed in subsequent accounting periods once recognized.
For fixed assets for which depreciation provision has been made, the depreciation rate and depreciationamount shall be remeasured according to the book value of the fixed assets (the original price of fixedassets minus accumulated depreciation and provision for impairment), and the remaining service life.
On the balance sheet date, the fixed assets shall be measured at the lower of the book value and therecoverable amount.
5. 25. Construction in progress
(1) Construction in progress refers to various construction and installation works carried out for theconstruction or repair of fixed assets, including the actual expenditure incurred in new construction,reconstruction and expansion, and the net value of fixed assets transferred from the reconstruction andexpansion projects.
(2) Construction in progress is accounted on an individual project basis with actual cost valuationmethod. The borrowing costs incurred before the projects reach the intended use condition shall beincluded in the project cost. The fixed assets shall be carried forward in the month when the project isqualified for acceptance and delivery for use. For those that have reached the intended use conditionbut have not yet completed the final account, from the date of reaching the intended use condition,according to the project budget, construction cost or the actual cost of the project, the cost transferredto the fixed assets shall be determined according to the estimated value, and the depreciation shall berecognized; After the completion of the final account, the original provisional value shall be adjusted
according to the actual cost, but the amount of depreciation accrued shall not be adjusted.
(3) The loan interest and related expenses incurred during the construction period shall be capitalizedinto the cost of the construction in Progress.
(4) On the balance sheet date, the construction in progress is recognized at the lower of book value andrecoverable amount.
5. 26. Borrowing costs
(1) Scope of borrowing costs and its capitalization conditions
The Company’s borrowing costs capitalized during period of capitalization are relevant loan expensesdirectly attributable to the assets eligible for capitalization, including interest thereon, amortization ofdiscounts or premiums, ancillary expenses and exchange differences incurred from foreign currencyloan, etc.Borrowing costs are capitalized when the following three conditions are met simultaneously: ① theasset expenditure has occurred, ② the borrowing costs have occurred, ③ the purchase andconstruction activities necessary to make the assets reach the intended use condition have started.
(2) Recognition of capitalized amounts
The capitalized amount of borrowing expenses is calculated as follows: As for special loan borrowed foracquiring and constructing or producing assets eligible for capitalization, borrowing costs of special loanactually incurred in the current period less the interest income of the loans unused and deposited inbank or return on temporary investment should be recognized as the capitalization amount of borrowingcosts. As for general loans used for acquiring and constructing or producing assets eligible forcapitalization, the interest of general loans to be capitalized should be calculated by multiplying theweighted average of asset disbursements of the part of accumulated asset disbursements in excess ofspecial loans by the capitalization rate of used general loans. During the period of capitalization, thecapitalized amount of interest of each accounting period shall not exceed the current actual interest ofthe relevant loans. Where there are discounts or premiums on loans, the amounts of interest for eachaccounting period should be adjusted taking account of amortizable discount or premium amounts forthe period by effective interest method. Auxiliary expenses incurred from special loans before theacquired or constructed assets eligible for capitalization reach the working condition for their intendeduse or sale should be capitalized when they incur and charged to the costs of assets eligible forcapitalization; those incurred after the acquired or constructed assets eligible for capitalization reach theworking condition for their intended use or sale should be recognized as costs according to theamounts incurred when they incur and charged to the current profit or loss.
(3) Recognition of capitalization rate
For a special loan for the purchase and construction of fixed assets, the capitalization rate is the
interest rate of the loan;For more than one special loan for the acquisition and construction of fixed assets, the capitalizationrate is a weighted average interest rate of these loans.
(4) Capitalization suspension of borrowing costs
If the acquisition and construction or production activities of assets eligible for capitalization areinterrupted abnormally and this condition lasts for more than three months, the capitalization ofborrowing costs should be suspended. The borrowing costs incurred during interruption are charged toprofit or loss for the current period, and the capitalization of borrowing costs continues when theacquisition and construction or production activities of the asset resume.
(5) Capitalization cessation of borrowing costs
Capitalization of borrowing costs should cease when the acquired and constructed or produced assetseligible for capitalization have reached the working condition for their intended use or sale. Borrowingcosts incurred after the assets eligible for capitalization have reached the working condition for theirintended use or sale should be recognized as the current profit and loss when they incur. If parts of theacquired and constructed or produced assets are completed separately but the assets cannot be usedor sold externally until overall completion, the capitalization of borrowing costs should cease at the timeof overall completion of the said assets.
5.27. Biological assets
N/A
5.28. Oil and gas assets
N/A
5. 29. Intangible assets
(1) Useful life and the basis for its determination, estimation, amortization methodology orreview proceduresIntangible assets refer to identifiable non-monetary assets that are owned or controlled by the Companywithout a physical form.Measurement methoda. Costs of intangible assets purchased include purchase price, related tax and expenses and otherexpenditure that can be distributed to the asset directly to reach its expected use.b. Intangible assets invested by investors shall be valued at the value agreed upon in the investment
contract or agreement;c. Expenses on the research phase of internally researched and developed intangible assets shall beincluded in the current profit and loss when they incur; The expenditures incurred in the developmentstage of the internal research and development projects shall be recognized as intangible assets whenthe following conditions are met; otherwise, they shall be recorded into the current profit and loss whenthey incur.i. It is technically feasible to finish intangible assets for use or sale;ii. It is intended to finish and use or sell the intangible assets;iii. The usefulness of methods for intangible assets to generate economic benefits shall be proved,including being able to prove that there is a potential market for the products manufactured byapplying the intangible assets or there is a potential market for the intangible assets themselves orthe intangible assets will be used internally;iv. It is able to finish the development of the intangible assets, and able to use or sell the intangibleassets, with the support of sufficient technologies, financial resources and other resources.v. The expenditure attributable to the intangible asset during its development phase can bemeasured reliably.d. If payment of the purchase price of intangible assets can be deferred and exceeds normal creditconditions, the purchase has the nature of finance in fact and cost of the intangible asset shall bedetermined on the basis of present value of the purchase price. The difference between the amountactually paid and the present value of the purchase price should be recorded into current profit or lossother than those should be capitalized during the credit period.
Useful life and the basis for its determination, estimation, amortization methodology or reviewproceduresFor intangible assets with limited useful life, amortization shall be carried out according to the straight-line method within the period that brings economic benefits to the enterprise. At the end of each period,the useful life and amortization method of intangible assets with limited service life shall be reviewed. Ifthere are differences with the original estimates, corresponding adjustments shall be made.Intangible assets whose useful life is uncertain shall be regarded as intangible assets if it is impossibleto foresee the term in which intangible assets bring economic benefits to the enterprise. Intangibleassets with uncertain useful life shall not be amortized during the holding period, and the life ofintangible assets shall be reviewed at the end of each period. If it is still uncertain after the review at theend of the period, the impairment test shall continue during each accounting period. At the end of eachperiod, the useful life of intangible assets with uncertain service life shall be reviewed.
Impairment testOn the balance sheet date, intangible assets are valued at the lower of book value and recoverable
amount.
(2) The scope of research and development expenditure collection and the related accountingtreatmentThe R&D expenditure of the Company mainly include the materials consumed in the implementation ofR&D activities, salaries of R&D department employees, depreciation and amortisation of assets such asequipment and software used in research and development, R&D testing, R&D technical service fees,and licensing fees.The expenditures incurred in the development stage of the research and development projects shall berecognized as intangible assets when the following conditions are met; otherwise, they shall berecorded into the current profit and loss when they occur.a. It is technically feasible to finish intangible assets for use or sale;b. It is intended to finish and use or sell the intangible assets;c. The usefulness of methods for intangible assets to generate economic benefits shall be proved,including being able to prove that there is a potential market for the products manufactured by applyingthe intangible assets or there is a potential market for the intangible assets themselves or the intangibleassets will be used internally;d. It is able to finish the development of the intangible assets, and able to use or sell the intangibleassets, with the support of sufficient technologies, financial resources and other resources.e. The expenditure attributable to the intangible asset during its development phase can be measuredreliably.Development expenditures that have been recorded into profit and loss in previous periods are notrecognized as assets in subsequent periods. The capitalized expenditure in the development stage islisted as development expenditure in the balance sheet, and it will be recorded into intangible assetsfrom the date when the project reaches its intended purpose.
5. 30. Long-term assets impairment
On the balance sheet date, the Company makes a judgment on whether there are signs of possibleimpairment of long-term assets. If there are impairment indicators of non-current assets, the Companyestimates the recoverable amount based on individual asset. If recoverable amount of individual assetis difficult to be estimated, the Company should recognize the recoverable amount of the asset groupwhich the individual asset belongs to.The recoverable amount is the higher of fair values less costs of disposal and the present values of thefuture cash flows expected to be derived from the asset.If the measurement result of recoverable amount shows that recoverable amount of the non-currentassets is less than its book value, the book value shall be written down to the recoverable amount, and
the amount written down shall be recognized as the impairment loss of assets, recorded into the currentprofit and loss, and the corresponding impairment provision of assets shall be made at the same time.Once impairment loss stated above is recognized, reversal is not allowed in the subsequent accountingperiods.After the recognition of the impairment loss, the depreciation or amortization expense of the impairmentasset shall be adjusted accordingly in the future period so as to systematically apportion the adjustedbook value of the asset (deducting the expected net salvage value) within the remaining service life ofthe asset.The Company should perform impairment test for goodwill and intangible assets with indefinite life atleast at each year end, no matter whether there is impairment indicator.Goodwill shall be combined with its related asset group or asset group portfolio so as to perform animpairment test. When the Company performs an impairment test on relevant asset group or assetgroup portfolio including goodwill, if there are signs of impairment, the Company shall firstly perform animpairment test on asset group or asset group portfolio excluding goodwill and calculate therecoverable amount, and compare with the related book value, recognize the corresponding impairmentloss. Then, the Company performs an impairment test on relevant asset group or asset group portfolioincluding goodwill, and compares the book value of the relevant asset groups or asset group portfolio(including proportional book value of goodwill) with its recoverable amount. If the recoverable amount ofrelevant asset group or asset group portfolio is less than its book value, the Company shall recognizeimpairment loss of goodwill.
5. 31. Long-term deferred expenses
Long-term deferred expenses shall be initially measured according to the actual costs incurred. It isamortized using the straight-line method over the beneficial period. If it cannot benefit the followingaccounting period, the amortized value of the item that has not been amortized will be transferred to thecurrent profit and loss.
5. 32. Contract liabilities
The recognition method of contract liabilities: The Company presents contract assets or contractliabilities on the balance sheet according to the relationship between the fulfillment of its contractperformance obligations and its customers’ payment. Obligations to be fulfilled by the Company oftransferring commodities or providing services to customers, as the Company has received or shouldreceive customers’ considerations, are presented as contract liabilities.
5. 33. Employee benefits
(1) Accounting treatment method of short-term benefits
Short-term benefits are the benefits that the Company expects to pay in full within 12 months after thereporting period in which the employee provided relevant services, excluding the compensation foremployment termination. Accrued short term benefits will be recognized as liability during theaccounting period in which the employee is providing the relevant service to the Company. The liabilitywill be included in the current profit and loss or the relevant assets cost.
(2) Accounting treatment method of post-employment benefits
a. Defined contribution planThe defined contribution plan of the Company includes payments of basic pension and unemploymentinsurance calculated according to the local payment base and proportion. The amount shall be includedinto the profit and loss or the relevant assets cost for the accounting period in which the employeeprovides the service to the Company.b. Defined benefit planAccording to the formula determined by the expected accumulative projected unit credit method, theCompany will record the benefit obligation generated by the defined benefit plan belonging to the periodduring in which the employee provides the service into the current profit and loss or the relevant assetscost.The deficit or surplus resulting from the present value minus the fair value of the assets of a definedbenefit plan is recognized as a net liability or net asset of a defined benefit plan. If there is surplus in thedefined benefit plan, the net assets of the defined benefit plan shall be measured at the lower of thesurplus and the upper limit of assets of the defined benefit plan.All defined benefit plan obligations, including those expected to be paid within the twelve monthsfollowing the end of the annual reporting period in which the employee provides the service, arediscounted based on the market yield and high quality corporate bonds in an active market that matchthe duration and currency of defined benefit plan obligations on the balance sheet date.The service costs generated by the defined benefit plan and the net interest on net liabilities or netassets of the defined benefit plan are included in the current profit and loss or relevant assets cost;Changes in net liabilities or net assets generated by the re-measurement of the defined benefit plan areincluded in other comprehensive income and are not reversed to profit and loss in subsequentaccounting periods.At the time of settlement of the defined benefit plan, the settlement gains or losses shall be recognizedaccording to the difference between the present value of the obligations of the defined benefit plan andthe settlement price determined on the settlement date.
(3) Accounting treatment method of termination benefits
Employee benefits liabilities shall be recognized and included into profit or loss for the current period onthe earlier date of the two following circumstances:
a. When the Company is not able to withdraw the benefits from termination of employment orresignation persuasion unilaterally;b. When the Company recognizes costs and fees relevant to reforming the termination benefitspayment.As for the termination benefits that cannot be fully paid within 12 months after the end of the annualreport period, the Company shall choose an appropriate discount rate and record it into current profitand loss based on it.
(4) Accounting treatment method of other long-term employee benefits
Other long-term employee benefits are all employee benefits other than short-term benefits, post-employment benefits and termination benefits.Other long-term employee benefits provided by the Company to the employee that meet the conditionsof the defined contribution plan shall be treated in accordance with the same principles of the definedcontribution plan; If the conditions for defined benefits are met, net liabilities or net assets of other long-term employee benefits shall be recognized and measured in accordance with the relevant principles ofthe defined benefits plan.
5. 34. Estimated liabilities
(1) Recognition criteria of estimated liabilities
If the contingent obligations meet the following conditions simultaneously, the Company shall recognizeit as an estimated liability:
This obligation is the Company's current obligation; the performance of this obligation is highly likely toresult in an outflow of economic benefits from the Company; The amount of the obligation can bemeasured reliably.
(2) Measurement method of estimated liabilities
The Company's estimated liabilities are initially measured in terms of the best estimate of theexpenditure of fulfilling the relevant current obligations.For determining the best estimate, the Company takes various factors into account such as the risk,uncertainty and time value of money related to contingencies. If the time value of money has asignificant impact, the best estimate is determined by discounting the relevant future cash outflows.The best estimate is processed as follows:
Where there is a continuous range (or range) of required expenditures and the probability of the
occurrence of various results within the range is same, the best estimate is determined according to themean of the middle value of the range, namely the mean value of the upper and lower limits.Where there is no continuous range (or range) of required expenditures, or where there is a continuousrange but the possibility of various outcomes within the range is different, if the contingencies involve asingle item, the best estimate is determined according to the most likely amount; If the contingenciesinvolve more than one item, the best estimate is calculated and determined according to variouspossible results and relevant probabilities.Where all or part of the expenses required for the liquidation of the estimated liabilities of the Companyare expected to be compensated by a third party, the amount of compensation shall be recognized asan asset when it is basically confirmed that it can be received, and the confirmed amount ofcompensation shall not exceed the book value of the estimated liabilities.
5. 35. Share-based payment
(1) The type of share-based payment
Share-based payment is classified as equity-settled share-based payment and cash-settled share-based payment.
(2) The method of determining the fair value of equity instruments
For equity-settled share-based payment related with employees, the equity instrument is measured atfair value. The cash-settled share-based payment shall be measured according to the fair value of theliabilities calculated and determined on the basis of shares or other equity instruments undertaken bythe Company.For the fair value of the stock option granted, the fair value is determined by using the stock optionpricing model, and the following factors are taken into account: the current price of the underlyingshares, the exercise price of the option, the risk-free interest rate within the period of the option, theoption life, and the expected volatility of the stock price.
(3) Recognition of the best estimate basis of instrument that can be exercisedFor the equity-settled share-based payment settled immediately after the grant, the fair value of theequity instrument shall be included in the relevant costs or expenses on the grant date, and the capitalreserve shall be increased accordingly. Grant date means the date on which the share-paymentagreement is approved.For the equity-settled share-based payment, in which the services during waiting period are completedand the performance conditions are met, in return for services of employees, on each balance sheetdate during waiting period, the current obtained service shall be included in the relevant costs orexpenses and the capital reserves in accordance with the fair value of the equity instruments on thegrant date, based on best estimate of the number of vested equity instruments, and the subsequentchanges in fair value shall not be recognized. On each balance sheet date during waiting period, the
Company makes the best estimate based on the latest available employee number change and othersubsequent information, and modifies the number of equity instruments for the estimated vesting. Onthe vesting date, the final expected number of vesting instruments is the same as the actual number ofvesting instruments.
(4) Relevant accounting treatment of implement, modification and termination of share-based paymentplanFor equity-settled share-based payment, no adjustments will be made to the recognized costs and totalowners' equity after the vesting date. On the vesting date, the Company shall recognize the sharecapital and the equity premium according to the exercise situation, and carry forward the capital reserverecognized in the waiting period.No matter how it modifies the terms and conditions of the granted equity instruments or it cancels thegranted equity instruments or its settlement, the equity instruments granted by the Company shall berecognized at fair value on the grant date and it measures obtained the corresponding services, unlessit cannot be vested because it cannot meet the vesting conditions of equity instruments (except marketconditions).
5.36. Other financial instruments such as preferred shares and perpetual bondsN/A
5. 37. Revenue
Accounting policies for recognition and measurement of revenue disclosed by type ofbusiness
(1) Basic principles of revenue identification
The Company recognizes revenue when it has fulfilled the performance obligations under the contract,that is, when the customers obtain the control of relevant goods or services, at the transaction priceallocated to the performance obligations.Performance obligations refer to the Company's promise that it will transfer clearly distinguishablegoods or services to customers under the contract.Obtaining control of related goods refers to that customers can control the use of the goods and obtainalmost all the economic benefits from the goods.The Company will evaluate the contract on the contract start date, identify each individual performanceobligation contained in the contract, and judge whether each individual performance obligation will beperformed within a certain period of time or at a certain point in time. If one of the following conditions ismet, and the performance obligation is performed within a certain period of time, the Company willidentify revenue within a period of time according to the performance progress: a. The customers obtainand consume the economic profits while the Company performs the contract. b. The customers cancontrol the products under construction during the performance of the Company; c. The products
produced during the performance of the Company cannot be replaced, and the Company has the rightto collect payment for the completed performance accumulated during the entire contract period.Otherwise, the Company will identify revenue when the customers obtain control rights of the relevantgoods or services.For the performance obligations performed within a certain period of time, the Company will apply theinput-output method to identify the appropriate performance progress based on the nature of the goodsand services. The input-output method is to identify the performance progress based on the value of thegoods that have been transferred to the customers to the customers. When the performance progresscannot be reasonably identified and the Company's incurred costs are expected to be compensated,the Company will identify the revenue according to the amount of the incurred costs until theperformance progress can be reasonably identified.
(2) The methods of revenue identification
The Company primarily sells baijiu, which involve performance obligations fulfilled at a certain point intime. For the recognition of the revenue of domestic products, the following conditions must be met:
The Company has delivered the products to the customer as per the contract, and the customer hasaccepted the goods; payment has been received or a receipt voucher has been obtained, and therelevant economic benefits are likely to flow in; and control of the goods has transferred to the customer.The following requirements must be met to recognise the revenue of export products: The Companyhas declared the products according to the contract, obtained the bill of lading, received the payment orobtained the receipt voucher, and relevant economic benefits are likely to flow in, and control of thegoods has transferred to the customer. The following requirements must be met to recognise therevenue of sales through third-party platforms or company-owned websites: The sales platform isresponsible for delivering the goods to the customer, or the Company entrusts a logistics company todeliver the goods to the customer, and revenue is recognised upon receipt of the platform settlementstatement or upon delivery of the goods.
Different business models for the same type of business involve different revenue recognition andmeasurement methodsN/A
5.38 Contract costs
Contract costs comprise incremental costs incurred as the Company obtains a contract, and costs forcontract performance. Incremental costs incurred as the Company obtains a contract refer to thosecosts which will not incur without entering into a contract (such as sales commission). If it is expectedthat the costs are recoverable, the Company will recognize the costs incurred to obtain a contract asone form of assets. In case that the term of asset amortization is shorter than one year or one normaloperating cycle, the costs will be recognized as profit and loss of the current period after occurrence.
If the costs incurred from contract performance fall outside the inventory or the scope of otherenterprise accounting standards and satisfy all of the following conditions, the Company will recognizethe costs for contract performance as assets: a) The costs are directly related to one existing contractor contract that is expected to be obtained; b) The costs enrich the Company's resources for futurecontract performance (including continual fulfillment); c) The costs are estimated to be recovered.
Assets recognized from costs incurred to obtain a contract and costs for contract performance(hereinafter referred to as "assets related to contract costs") will be amortized based on the basis thesame with the income from commodities or services related to the assets, and will be recognized asprofit and loss of the current period. In case that the book value of assets related to contract costs ishigher than the difference of the two items below, the Company will set aside provisions for assetsimpairment to deal with the extra part, and recognize that part as impairment losses: a) Estimatedresidual consideration to be obtained from transfer of commodities or services related to the assets; b)Estimated costs incurred from transfer of the relevant commodities or services.
5. 39. Government grants
Government grants are monetary assets and non-monetary assets acquired free of charge by theCompany from the government like fiscal subsidies.
(1) Judgment basis and accounting treatment method of government grants related to assetsGovernment grants related to assets are government grants that are acquired by the Company andused for forming long-term assets through purchasing and constructing or other ways. If thegovernment documents do not clearly specify the target of the subsidy, the Company shall separatelyexplain judgment basis of classifying the government grants into the government grants related toassets or income.Accounting method: it shall be recognized as deferred income allocated evenly over the useful lives(the period of depreciation and amortization) of the relevant assets from the month of commence ofdepreciation or amortization when the relevant assets reaching the intended use condition, andincluded in the current profit or loss. However, government grants measured at the nominal amountshall be directly included in current profit and loss.
(2) Judgment basis and accounting treatment method of government grants related to incomeGovernment grants related to income are government grants other than government grants related toassets;Accounting method:
a. If it is used to compensate the Company’s relevant expenses or losses in future periods, it should berecognized as deferred income and included into the current profit and loss or written off of the related
costs when the relevant expenses, losses are recognized.b. If it is used to compensate the Company’s relevant expenses or losses incurred, it is directly includedinto the current profit and loss on acquisition or written off of the related costs.c. Recognition time-point of government grantsGovernment grants are recognized when the Company can meet the attached conditions for thegovernment grants and the Company can receive the grants.d. Measurement of government grantsIf a government grant is a monetary asset, it shall be measured in the light of the received or receivableamount. If a government grant is a non-monetary asset, it shall be measured at its fair value; and if itsfair value cannot be obtained in a reliable way, it shall be measured at a nominal amount.
5. 40. Deferred tax assets or deferred tax liabilities
The Company adopts the balance sheet liability method to account for income tax.The Company recognizes deferred tax assets when the following conditions are met simultaneously:
i. Temporary differences are highly likely to be reversed in the foreseeable future;ii. Taxable income that may be used to offset the deductible temporary difference is likely to beobtained in the future and is limited to the amount of taxable income that is likely to be obtained.On each balance sheet date, the current income tax liabilities (or assets) incurred in the current periodor prior periods shall be measured by the Company in light of the expected payable (refundable)amount of income taxes according to the tax law; The deferred income tax assets and deferred incometax liabilities shall be measured at the tax rate applicable to the period during which the assets areexpected to be recovered or the liabilities are expected to be settled.The Company shall review the carrying amount of deferred income tax assets on each balance sheetdate. The current income tax and deferred income tax shall be recorded into the current profit and lossas income tax expense or income, except for the income tax generated from the enterprise merger,transactions or events directly recognized in the owner's equity.
Basis for deferred income tax assets and deferred income tax liabilities presented as a net amount afteroffset:
When the following conditions are simultaneously met, deferred income tax assets and deferred incometax liabilities are presented as a net amount after offset:
i. The enterprise has the legal right to settle the current income tax assets and current income taxliabilities on a net basis;ii. Deferred income tax assets and deferred income tax liabilities were related to the income taxlevied by the same tax administration department on the same taxpayer or different taxpayers, butduring the period when each significant deferred income tax assets and liabilities would bereversed in the future, the involved taxpayer intended to settle the current income tax assets and
liabilities on a net basis or to acquire assets and settle liabilities at the same time.
5. 41. Lease
(1) Accounting treatment with the Company as lessee
①Judgment criteria and accounting treatment for short-term leases and leases of low-value assets as alessee for simplified treatmentOn the beginning date of the lease term, the Company will recognise the lease with a lease term notexceeding 12 months and exclude the purchase option as a short-term lease. Leases with a valuebelow CNY 40,000 when a single leased asset is a brand-new asset are identified as low-value assetleases. If the Company sublets or expects to sublet the leased assets, the original lease shall not bedeemed as a low-value asset lease.The Company records the payments of short-term and low-value asset leases incurred during eachperiod of the lease term in the relevant asset costs or the profit or loss for the current period by thestraight-line method.The Company will recognise right-of-use assets and lease liabilities on the inception date of the leaseterm, excluding the above short-term and low-value asset leases.
②Right-of-use assets
Right-of-use assets are initially measured at costs, including: A. The initial measurement amount oflease liabilities; B. If there is a lease incentive for the lease payment paid on or before the start date ofthe lease term, the relevant amount of the lease incentive already enjoyed shall be deducted; C. Initialdirect expenses incurred by the Company; D. The expected cost to be borne by the Company in orderto dismantle and remove the assets leased, restore original state of the place where the assets leasedare in, or restore the assets leased to the state stipulated in the lease terms.
③Lease liabilities
The Company initially measures the lease obligation at the present value of the lease paymentsoutstanding at the commencement date of the lease term. When calculating the present value of leasepayments, the Company uses the interest rate implicit in lease as the rate of discount. If the interestrate implicit in lease cannot be determined, the Company’s incremental lending rate is used as the rateof discount.After the commencement of the lease term, the Company uses the cost model for subsequentmeasurement of right-of-use assets, depreciates right-of-use assets on a straight-line basis, calculatesthe interest expense on the lease liability within the lease term and includes it in the current profit orloss, unless such interest charge is stipulated to be included in the underlying asset cost. Variable leasepayments that are not included in the measurement of the lease obligation should be included in thecurrent profit or loss when they are actually incurred, unless such payments are stipulated to be
included in the underlying asset cost.After the commencement of the lease term, the Company remeasures the lease liability and adjusts thecorresponding right-of-use asset, and if the carrying value of the right-of-use asset has been reduced tozero but the lease liability is subject to further reduction, the difference is recorded in current profit orloss: (1) When there is a change in the valuation of the purchase option, renewal option or terminationoption, or actual exercise, the Company remeasures the lease liabilities at the present value of thelease payments after the change and the revised discount rate; (2) When there is a change in theactual fixed payment, the estimated payable of the residual value of the guarantee, the index or rateused to confirm the lease payment, the Company calculated the present value based on the changedlease payment amount and the original discount rate to remeasure the lease liabilities. However, wherechanges in lease payments arise from changes in floating interest rates, a revised discount rate wasused to calculate the present value.
(2) Accounting treatment with the Company as lessor
① Lease classification
The Company classifies leases into finance leases and operating leases at the inception of leases. Afinance lease refers to a lease where almost all the risks and rewards, related to the ownership of theleased asset, are substantially transferred, regardless of whether the ownership is eventuallytransferred or not. All leases other than finance leases are classified as operating leases.
② Operating leases
The Company recognizes the lease payments receivable of the operating lease as rental earnings ineach period within the lease term on a straight-line basis or according to other systematic andreasonable methods. The initial direct costs related to the operating lease are capitalized, amortizedwithin the lease term on the same basis as the recognition of rental earnings, and included in profit orloss for the current period. The received variable lease payments related to the operating lease that arenot included in the lease payments receivable are included in profit or loss for the current period whenthey are actually incurred.
③ Finance leases
On the commencement date of the lease term, the Company recognizes the finance lease receivablesfor the finance lease and derecognizes the leased asset of the finance lease. In the initial measurementof finance lease receivables, the sum of the unsecured residual value and the present value of thelease payments receivable not yet received on the commencement date of the lease term discounted atthe interest rate implicit in lease is the entry value of the finance lease receivables. The Companycalculates and recognizes the interest income in each period within the lease term at a fixed interestrate implicit in the lease. The received variable lease payments that are not included in themeasurement of the net investment in the lease are included in profit or loss for the current period when
they are actually incurred.
5.42. Income tax expenses
The Company adopts the balance sheet liability method to account for income tax.The Company recognizes deferred tax assets when the following conditions are met simultaneously:
1. Temporary differences are highly likely to be reversed in the foreseeable future;
2. Taxable income that may be used to offset the deductible temporary difference is likely to be obtainedin the future and is limited to the amount of taxable income that is likely to be obtained.
On each balance sheet date, the current income tax liabilities (or assets) incurred in the current periodor prior periods shall be measured by the Company in light of the expected payable (refundable)amount of income taxes according to the tax law; The deferred income tax assets and deferred incometax liabilities shall be measured at the tax rate applicable to the period during which the assets areexpected to be recovered or the liabilities are expected to be settled.The Company shall review the carrying amount of deferred income tax assets on each balance sheetdate. The current income tax and deferred income tax shall be recorded into the current profit and lossas income tax expense or income, except for the income tax generated from the enterprise merger,transactions or events directly recognized in the owner's equity.
5. 43 Other significant accounting policies and accounting estimatesN/A
5. 44 Changes in significant accounting policies and accounting estimates
5.44.1. Changes in significant accounting policies
□Applicable ? N/A
5.44.2. Changes in significant accounting estimates
□Applicable ? N/A
5.44.3. Adjustments to Financial Statement Items at the Beginning of the Year of the FirstImplementation of the New Accounting Standards Implemented since 2024
□Applicable ? N/A
6. Taxes
6.1. Major tax types and rates
| Tax type | Tax base | Tax rate |
| Value-added tax | Taxable sales income | 13 %, 9%, 6% |
| Urban maintenance and construction tax | Taxable turnover tax | 7% |
| Corporate income tax | Taxable income | 25%, 15%, 16.5%, 9%, 0% |
| Consumption tax (based on price) | Baijiu tax price or ex-factory price | 20% |
| Consumption tax (based on quantity) | Quantity of baijiu | CNY 1.00/kg |
| Education surcharge | Taxable turnover tax | 3% |
| Local education surcharge | Taxable turnover tax | 2% |
| Property tax | Original value of the property*70%; house rent | 1.2%, 12% |
| Land use tax | Land area | CNY 5-18.00/m2 |
| Others | According to national regulation |
Tax payment subject using different corporate income tax rates, the corporate income tax rates areas follows:
| Company name | Corporate income tax rate |
| Luzhou Pinchuang Technology Co., Ltd. | 15% |
| Luzhou Laojiao International Development (Hong Kong) Co., Ltd. | 16.5% |
| Luzhou Laojiao Commercial Development (North America) Co., Ltd. | 21%-40% |
| Mingjiang Co., Ltd. | 21%-40% |
| Luzhou Red Sorghum Modern Agricultural Development Co., Ltd. | Exempted from corporate income tax |
| Guangxi Luzhou Laojiao Imported Liquor Industry Co., Ltd. | 9% |
| Luzhou Laojiao International Trade (Hainan) Co., Ltd. | 15% |
6.2. Tax preferences
(1) According to Announcement of the Ministry of Finance, State Taxation Administration and NationalDevelopment and Reform Commission on Continuing the Corporate Income Tax Policies Concerningthe Western Development Strategy (No. 23 in 2020, Ministry of Finance), from 1 January 2021 to 31December 2030, companies are located in the western region whose primary business is listed in theCatalogue of Encouraged Industries in the Western Region, and the primary business incomeaccounting for over 60% of the total enterprise income. These companies shall be subject to thecorporate income tax at a reduced rate of 15%. The Company's holding subsidiary, Luzhou PinchuangTechnology Co., Ltd., whose primary business income meet the requirements of scope and standard ofthe Catalogue of Encouraged Industries in the Western Region, is paid at the rate of 15% for corporateincome tax.
(2) According to Article 27 of the Corporate Income Tax Law of the People's Republic of China andArticle 86, Item 1 of the Implementation Regulations of the Corporate Income Tax Law, companies areexempted from enterprise income tax when they engage in agricultural, forestry, animal husbandry and
fishery industries. The holding subsidiary of the Company, Luzhou Red Sorghum Modern AgriculturalDevelopment Co., Ltd., is engaged in the cultivation and sale of organic sorghum and enjoys thereduction of corporate income tax preferences.
(3) According to the Article 15, Item 1 of the Provisional Regulations on Value-Added Tax, agriculturalproducers sell self-produced agricultural products exempt from value-added tax. The holding subsidiaryof the Company, Luzhou Red Sorghum Modern Agricultural Development Co., Ltd., is engaged in thecultivation and sale of organic sorghum and enjoys the value-added tax exemption.
(4) According to the Article 3, Item 7 of the Notice on Revise of Interim Measures of Accelerating theDevelopment in Headquarters Economy of China-Malaysia Qinzhou Industrial Park, till 31 December2025, the enterprises in the Qinzhou Industrial Park that enjoy 15% of tax rate of Western Developmentwith the half reduction in the tax period of preferential policies shall enjoy the local share of corporateincome tax exemption (namely 40% of corporate income tax was exempted, and the proportionadjusted by the state shall be executed according to new proportion); Guangxi Luzhou Laojiao ImportedLiquor Industry Co., Ltd., the wholly-owned subsidiary of the Company, pays corporate income tax atthe rate of 9% according to the tax preference policies.
(5) According to Announcement on Preferential Corporate Income Tax Policies in Hainan Free TradePort (Cai Shui [2020] No. 31), the Company's wholly-owned subsidiary, Luzhou Laojiao InternationalTrade (Hainan) Co., Ltd., whose primary business income meet the requirements of scope andstandard of the Catalogue of Encouraged Industries in Hainan Free Trade Port, is paid at the rate of 15%for corporate income tax.
7. Notes to the main items of the consolidated financial statements (Allcurrency unit is CNY, except other statements)
7.1. Cash and cash equivalents
Unit: CNY
| Item | Closing Balance | Opening Balance |
| Cash | 24,230.74 | 24,059.24 |
| Bank deposit | 36,035,910,173.93 | 25,916,630,894.83 |
| Other cash and cash equivalents | 64,824,385.02 | 35,370,137.21 |
| Total | 36,100,758,789.69 | 25,952,025,091.28 |
| Including: Total deposit outbound | 106,131,260.43 | 93,987,202.68 |
Other statements:
Note 1: The deposit outbound is the balance of cash and cash equivalents of the foreign holdingsubsidiary of the Company.Note 2: The closing balance of other monetary funds mainly consists of the remaining funds insecurities accounts of the Company in the amount of CNY 957,397.97, bank guarantee deposits ofCNY 10,000,000.00 for the subsidiary, Luzhou Laojiao Sales Co., Ltd., and the closing balance offunds in self-owned accounts on third-party platforms for subsidiaries such as Luzhou Laojiao
Electronic Commerce Co., Ltd. and Luzhou Laojiao Nostalgic Liquor Marketing Co., Ltd., in theamount of CNY 53,866,987.05.Note 3: There is no special benefit arrangement such as establishing a fund co-management accountwith related parties in the current period.
Liquor and wine manufacturing companies shall disclose in detail whether there are special interestarrangements such as establishing co-management accounts with related parties.
□Applicable ? N/A
7.2. Held-for-trading financial assets
Unit: CNY
| Item | Closing Balance | Opening Balance |
| Financial assets measured at fair value with their changes included into current profits/losses | 697.84 | 1,426,992,098.83 |
| Including: | ||
| Wealth management products | 1,426,992,098.83 | |
| Including: | ||
| Total | 697.84 | 1,426,992,098.83 |
Other statements:
Note 1: The closing balance of held-for-trading financial assets decreased by CNY 1,426,991,400.99,down 100.00% compared with the opening balance, which was mainly due to redemption of wealthmanagement products of collective asset management plan from securities-type companies in thereporting period.
7.3. Accounts receivable
7.3.1. Disclosure by aging
Unit: CNY
| Aging | Closing book balance | Opening book balance |
| Within 1 year (including 1 year) | 4,391,348.731 | 18,489,106.27 |
| 1-2 years | 906.99 | |
| 2-3 years | 3,292.00 | 263,509.80 |
| Over 3 years | 260,217.80 | |
| Total | 4,655,765.52 | 18,752,616.07 |
Note: 1. The closing book balance decreased by CNY 14,096,850.55, down 75.17% compared withthe opening book balance, which was mainly due to the impact of payment collection in overseasbaijiu sales.
2. There are no accounts receivable with significant single amount exceeding three years in age atthe end of the period.
7.3.2. Disclosure by withdrawal methods for bad debts
Unit: CNY
| Type | Closing Balance | Opening Balance | ||||||||
| Book balance | Provision for bad debt | Book value | Book balance | Provision for bad debt | Book value | |||||
| Amount | Proportion | Amount | Proportion | Amount | Proportion | Amount | Proportion | |||
| Accounts receivable tested for impairment individually | 372,217.14 | 7.99% | 372,217.14 | 100.00% | 372,217.14 | 1.98% | 372,217.14 | 100.00% | ||
| Including: | ||||||||||
| Accounts receivable that are not individually material but for which a separate provision for bad debts has been made | 372,217.14 | 7.99% | 372,217.14 | 100.00% | 372,217.14 | 1.98% | 372,217.14 | 100.00% | ||
| Accounts receivable tested for impairment by the portfolio | 4,283,548.38 | 92.01% | 214,222.77 | 5.00% | 4,069,325.61 | 18,380,398.93 | 98.02% | 919,019.95 | 5.00% | 17,461,378.98 |
| Including: | ||||||||||
| Accounts receivable tested for impairm | 4,283,548.38 | 92.01% | 214,222.77 | 5.00% | 4,069,325.61 | 18,380,398.93 | 98.02% | 919,019.95 | 5.00% | 17,461,378.98 |
| ent on the portfolio with characteristics of credit risk | ||||||||||
| Total | 4,655,765.52 | 100.00% | 586,439.91 | 12.60% | 4,069,325.61 | 18,752,616.07 | 100.00% | 1,291,237.09 | 6.89% | 17,461,378.98 |
The category name of provision for bad debt by individual item: Provision for bad debt by individualitem
Unit: CNY
| Name | Opening Balance | Closing Balance | ||||
| Book balance | Provision for bad debt | Book balance | Provision for bad debt | Proportion | Reason | |
| Beijing Secoo Trading Limited | 372,217.14 | 372,217.14 | 372,217.14 | 372,217.14 | 100.00% | The amount is not expected to be recovered |
| Total | 372,217.14 | 372,217.14 | 372,217.14 | 372,217.14 | ||
The category name of provision for bad debt by the portfolio: Provision for bad debt by the portfolio
Unit: CNY
| Name | Closing Balance | ||
| Book balance | Provision for bad debt | Proportion | |
| Risk portfolio | 4,283,548.38 | 214,222.77 | 5.00% |
| Including: within 1 year | 4,282,641.39 | 214,132.07 | 5.00% |
| 1-2 years | 906.99 | 90.70 | 10.00% |
| Other portfolio | |||
| Total | 4,283,548.38 | 214,222.77 | |
Notes to the determination basis for the portfolio:
Accounts receivable of the same age have similar credit risk characteristics.
If adopting the general mode of expected credit loss to withdraw provision for bad debt of accountsreceivable
□Applicable ? N/A
7.3.3. Provision and recovery for bad and doubtful debt in the current periodAllowance of provision for bad debt:
Unit: CNY
| Type | Opening Balance | Changes in current period | Closing Balance | |||
| Allowance | Reversal or recovery | Write-off | Other | |||
| Provision | 372,217.14 | 372,217.14 | ||||
| allowance by individual item | ||||||
| Provision allowance by risk portfolio | 919,019.95 | -704,797.18 | 214,222.77 | |||
| Total | 1,291,237.09 | -704,797.18 | 586,439.911 |
Note: 1. There is no significant provision for bad debt in accounts receivable reversed or recovered inthe reporting period.
Of which significant provision for bad debt reversed or recovered in the reporting period:
There is no significant provision for bad debt in accounts receivable reversed or recovered in thereporting period.
7.3.4. Top five entities with the largest balances of accounts receivable and contract assets
Unit: CNY
| Company name | Closing balance of accounts receivable | Closing balance of contract assets | Closing balance of accounts receivable and contract assets | Proportion to total closing balance of accounts receivable and contract assets | Closing balance of provision for bad debt provision of accounts receivable and impairment allowance of contract assets |
| China Duty Free International LTD | 2,217,390.08 | 2,217,390.08 | 47.63% | 110,869.50 | |
| Park Street Imports, LLC | 607,288.53 | 607,288.53 | 13.04% | 30,364.43 | |
| BAIWAN WINES INC. | 582,446.47 | 582,446.47 | 12.51% | 29,122.32 | |
| Beijing Secoo Trading Limited | 372,217.14 | 372,217.14 | 7.99% | 372,217.14 | |
| Hangzhou Youzan Technology Inc. | 346,108.52 | 346,108.52 | 7.44% | 17,305.43 | |
| Total | 4,125,450.74 | 4,125,450.74 | 88.61% | 559,878.82 |
7.4. Accounts receivable financing
7.4.1. Accounts receivable financing listed by category
Unit: CNY
| Item | Closing Balance | Opening Balance |
| Bank acceptance bill | 4,088,985,516.611 | 5,938,171,007.93 |
| Total | 4,088,985,516.61 | 5,938,171,007.93 |
Notes: 1. The closing balance of accounts receivables financing decreased by CNY 1,849,185,491.32or 31.14% compared with the opening balance, which was mainly due to the impact of billendorsement and discount, as well as remittance of bills for collection at maturity.
7.4.2. Disclosure by withdrawal methods for bad debts
Unit: CNY
| Type | Closing Balance | Opening Balance | ||||||||
| Book balance | Provision for bad debt | Book value | Book balance | Provision for bad debt | Book value | |||||
| Amount | Proportion | Amount | Proportion | Amount | Proportion | Amount | Proportion | |||
| Including: | ||||||||||
| Provision allowance by portfolio | 4,088,985,516.61 | 100.00% | 4,088,985,516.611 | 5,938,171,007.93 | 100.00% | 5,938,171,007.93 | ||||
| Including: | ||||||||||
| Bank acceptance bill | 4,088,985,516.61 | 100.00% | 4,088,985,516.61 | 5,938,171,007.93 | 100.00% | 5,938,171,007.93 | ||||
| Total | 4,088,985,516.61 | 100.00% | 4,088,985,516.61 | 5,938,171,007.93 | 100.00% | 5,938,171,007.93 | ||||
Note: 1. The notes receivable under accounts receivable financing comprise bank acceptance, andthe Company believes that the bank acceptance it holds does not pose significant credit risks. It doesnot anticipate significant losses due to defaults by banks or other drawers, therefore, no provision forcredit impairment losses has been recognised.
The category name of provision for bad debt by the portfolio: Provision for bad debt by the portfolio
Unit: CNY
| Name | Closing Balance | ||
| Book balance | Provision for bad debt | Proportion | |
| Risk portfolio | 4,088,985,516.61 | ||
| Other portfolio | |||
| Total | 4,088,985,516.61 | ||
7.4.3. Accounts receivable financing that have been endorsed to other parties or discountedby the Company but have not expired at the end of the period
Unit: CNY
| Item | Derecognition at period-end | Not derecognition at period-end |
| Bank acceptance bill | 9,713,195,633.95 | |
| Total | 9,713,195,633.951 |
Note: 1. Due to the fact that the acceptor of bank acceptance is a commercial bank, which is of highcredit level, the likelihood of default at the maturity of bank acceptance is low. Therefore, theCompany derecognises bank acceptance that has been endorsed or discounted.
7.4.4. Other statements
①There was no accounts receivable financing pledge at the end of the period.
②There are no accounts receivable financing actually written off during the reporting period.
③There are no accounts receivable financing transferred to accounts receivable due to the non-performance of the agreements by the issuers.
7.5. Other receivables
Unit: CNY
| Item | Closing Balance | Opening Balance |
| Dividend receivable | 20,242,601.70 | |
| Other receivables | 16,965,614.211 | 22,716,893.12 |
| Total | 37,208,215.91 | 22,716,893.12 |
Note: 1. Other receivables above-mentioned refer to other receivables after deducted interestreceivable and dividend receivable. 2. The closing balance of other receivables increased by CNY14,491,322.79 or 63.79% compared with the opening balance, which was mainly due to the impact ofinvested companies declaring dividend distributions.
7.5.1. Dividend receivable
7.5.1.1. Classification of dividend receivable
Unit: CNY
| Item (investee) | Closing Balance | Opening Balance |
| Guotai Junan Securities Co., Ltd. | 4,710,798.80 | |
| Huaxi Securities Co., Ltd. | 13,641,557.20 | |
| North Chemical Industries Co., Ltd. | 78,177.75 | |
| China Tourism Group Duty Free Corporation Limited | 1,812,067.95 | |
| Total | 20,242,601.70 |
7.5.1.2. Allowance of provision for bad debt
□Applicable ? N/A
7.5.2. Dividend receivable
7.5.2.1. Other receivables disclosed by nature
Unit: CNY
| Nature | Closing book balance | Opening book balance |
| Intercourse funds | 10,998,731.39 | 17,537,144.37 |
| Petty cash | 796,823.67 | 214,206.23 |
| Saving deposits involving contract disputes 1 | 127,364,873.50 | 127,564,873.50 |
| Total | 139,160,428.56 | 145,316,224.10 |
Note 1: The saving deposits involving contract disputes are three deposits amounting to CNY500,000,000.00 with Changsha Yingxin Sub-branch of Agricultural Bank of China and NanyangZhongzhou Sub-branch of Industrial and Commercial Bank of China disclosed by the Company in the
2014 Annual Report. The deposits have lost the nature of monetary fund due to their involvement incontract disputes and have thus been transferred into “other receivables”. The closing balance of thisaccount as at the date of the statement was CNY 127,364,873.50.
7.5.2.2. Disclosure by aging
Unit: CNY
| Aging | Closing book balance | Opening book balance |
| Within 1 year (including 1 year) | 9,867,206.30 | 15,696,066.07 |
| 1-2 years | 131,034.15 | 38,347.61 |
| 2-3 years | 26,880.00 | 293,480.00 |
| Over 3 years | 129,135,308.111 | 129,288,330.42 |
| 3-4 years | 141,500.00 | 11,500.00 |
| 4-5 years | 12,800.00 | 22,800.00 |
| Over 5 years | 128,981,008.11 | 129,254,030.42 |
| Total | 139,160,428.56 | 145,316,224.10 |
Note: 1 Other receivables with significant single amount exceeding three years in age relates tosavings deposit of CNY 127,364,873.50, which are yet to be recovered due to contractual disputes.
7.5.2.3. Disclosure by withdrawal methods for bad debts
?Applicable □ N/A
Unit: CNY
| Type | Closing balance | Opening Balance | ||||||||
| Book balance | Provision for bad debt | Book value | Book balance | Provision for bad debt | Book value | |||||
| Amount | Proportion | Amount | Proportion | Amount | Proportion | Amount | Proportion | |||
| Provision for bad debt by individual item | 127,414,873.50 | 91.56% | 120,050,000.00 | 94.22% | 7,364,873.50 | 127,614,873.50 | 87.82% | 120,050,000.00 | 94.07% | 7,564,873.50 |
| Including: | ||||||||||
| Other receivables that are individually material and for which a separate provision for bad | 127,364,873.50 | 91.52% | 120,000,000.00 | 94.22% | 7,364,873.50 | 127,564,873.50 | 87.78% | 120,000,000.00 | 94.07% | 7,564,873.50 |
| debts has been made | ||||||||||
| Other receivables that are not individually material but for which a separate provision for bad debts has been made | 50,000.00 | 0.04% | 50,000.00 | 100.00% | 50,000.00 | 0.03% | 50,000.00 | 100.00% | ||
| Provision for bad debt by the portfolio | 11,745,555.06 | 8.44% | 2,144,814.35 | 18.26% | 9,600,740.71 | 17,701,350.60 | 12.18% | 2,549,330.98 | 14.40% | 15,152,019.62 |
| Including: | ||||||||||
| Other receivables tested for impairment on the portfolio with characteristics of credit risk | 11,745,555.06 | 8.44% | 2,144,814.35 | 18.26% | 9,600,740.71 | 17,701,350.60 | 12.18% | 2,549,330.98 | 14.40% | 15,152,019.62 |
| Total | 139,160,428.56 | 100.00% | 122,194,814.35 | 87.81% | 16,965,614.21 | 145,316,224.10 | 100.00% | 122,599,330.98 | 84.37% | 22,716,893.12 |
The category name of provision for bad debt by individual item: Provision for bad debt by individualitem
Unit: CNY
| Name | Opening Balance | Closing Balance | ||||
| Book balance | Provision for bad debt | Book balance | Provision for bad debt | Proportion | Reason | |
| Saving deposits involving | 127,564,873.50 | 120,000,000.00 | 127,364,873.50 | 120,000,000.00 | 94.22% | Provision based on legal opinion |
| contract disputes | ||||||
| Beijing Secoo Trading Limited | 50,000.00 | 50,000.00 | 50,000.00 | 50,000.00 | 100.00% | The amount is not expected to be recovered |
| Total | 127,614,873.50 | 120,050,000.00 | 127,414,873.50 | 120,050,000.00 |
The category name of provision for bad debt by the portfolio: Provision for bad debt by the portfolio
Unit: CNY
| Name | Closing Balance | ||
| Book balance | Provision for bad debt | Proportion | |
| Risk portfolio | 11,745,555.06 | 2,144,814.35 | 18.26% |
| Including: within 1 year | 9,867,206.30 | 493,360.32 | 5.00% |
| 1-2 years | 131,034.15 | 13,103.42 | 10.00% |
| 2-3 years | 26,880.00 | 5,376.00 | 20.00% |
| 3-4 years | 141,500.00 | 56,600.00 | 40.00% |
| 4-5 years | 12,800.00 | 10,240.00 | 80.00% |
| Over 5 years | 1,566,134.61 | 1,566,134.61 | 100.00% |
| Other portfolio | |||
| Total | 11,745,555.06 | 2,144,814.35 | |
Notes to the determination basis for the portfolio:
Accounts receivable of the same age have similar credit risk characteristics.
Allowance of provision for bad debt adopting the general mode of expected credit loss:
Unit: CNY
| Provision for bad debt | First stage | Second stage | Third stage | Total |
| Expected credit loss of the next 12 months | Expected loss in the duration (credit impairment not occurred) | Expected loss in the duration (credit impairment occurred) | ||
| Balance of 1 January 2024 | 2,549,330.98 | 120,050,000.00 | 122,599,330.98 | |
| Balance of 1 January 2024 in the current period | ||||
| Allowance of the current period | -404,516.63 | -404,516.63 | ||
| Balance of 30 June 2024 | 2,144,814.35 | 120,050,000.00 | 122,194,814.35 |
The basis for the division of each stage and the withdrawal proportion of bad debt provisionThe basis for division is that other receivables with single bad debt provision represent creditimpairment losses incurred since initial recognition (Stage 3), while the remaining portion iscategorised based on aging portfolio. Withdrawal proportions of bad debt provision are18.26% forStage 1 and 94.22% for Stage 3, totalling 87.81%.
Changes of book balance with significant amount changed of loss provision in the current period
□Applicable ? N/A
7.5.2.4. Provision and recovery for bad and doubtful debt in the current periodAllowance of provision for bad debt:
Unit: CNY
| Type | Opening Balance | Changes in current period | Closing Balance | |||
| Allowance | Reversal or recovery | Write-off or verification | Other | |||
| Other receivables tested for impairment individually | 120,050,000.00 | 120,050,000.00 | ||||
| Other receivables tested for impairment by the portfolio | 2,549,330.98 | -404,516.63 | 2,144,814.35 | |||
| Total | 122,599,330.98 | -404,516.63 | 122,194,814.35 | |||
Note: No bad debt provision recovered or reversed with significant amount in the current period.
7.5.2.5. Top five entities with the largest balances of the other receivables
Unit: CNY
| Company Name | Nature | Closing Balance | Aging | Proportion in total receivables | Provisioning amount at period end |
Agricultural Bankof ChinaChangshaYingxin Sub-branch, Industrialand CommercialBank of ChinaNanyangZhongzhou Sub-branch andanother bank
| Saving deposits involving contract disputes | 127,364,873.50 | Over 5 years | 91.52% | 120,000,000.00 | |
| Jingdong Technology Information Technology Co., Ltd. | Security deposit | 405,000.00 | Within 1 year | 0.29% | 20,250.00 |
| Luzhou Aopulan Beer Co., Ltd. | Security deposit | 300,000.00 | Over 5 years | 0.22% | 300,000.00 |
| Chen Weirong | Petty cash of employees | 296,442.10 | Within 1 year | 0.21% | 14,822.11 |
| Luzhou Laojiao Innovation Industry Holdings Co., Ltd. | Security deposit | 267,996.88 | Within 1 year | 0.19% | 13,399.84 |
| Total | 128,634,312.48 | 92.43% | 120,348,471.95 |
7.5.2.6. Presentation in other receivables due to the centralized management of fundsOther statements:
No presentation in other receivables due to the centralized management of funds in the current period.
7.6. Prepayment
7.6.1. Aging analysis
Unit: CNY
| Aging | Closing Balance | Opening Balance | ||
| Amount | Proportion | Amount | Proportion | |
| Within 1 year | 175,451,123.36 | 95.79% | 196,801,356.07 | 97.28% |
| 1-2 years | 3,190,069.21 | 1.74% | 1,685,909.93 | 0.83% |
| 2-3 years | 697,432.75 | 0.38% | 2,987,977.50 | 1.48% |
| Over 3 years | 3,814,720.70 | 2.09% | 833,943.20 | 0.41% |
| Total | 183,153,346.02 | 202,309,186.70 | ||
Reasons for significant prepayments whose aging is longer than 1 year without timely settlement:
There is no significant prepayment whose aging is longer than 1 year.
7.6.2. Top five entities with the largest balances of prepayment
| Company Name | Closing Balance | Proportion to the total closing balance of prepayment |
| Shanghai Merlot Advertising Co., Ltd. | 60,827,431.68 | 33.21% |
| Luzhou Western Gas Co., Ltd. | 18,546,713.66 | 10.13% |
| China Travel Service Headquarters (Shanghai) Co., Ltd. | 12,527,082.99 | 6.84% |
| Luzhou Power Supply Company of State Grid Sichuan Electric Power Company | 8,799,623.42 | 4.80% |
| China Railway Chengdu Group Co., Ltd. | 5,286,311.50 | 2.89% |
| Total | 105,987,163.25 | 57.87% |
7.7. Inventories
Whether the Company needs to comply with the disclosure requirements of real estate industryNo
7.7.1. Categories of Inventories
Unit: CNY
| Category | Closing Balance | Opening Balance | ||||
| Book Balance | Provision for stock obsolescence or impairment | Book Value | Book Balance | Provision for stock obsolescence or impairment | Book Value | |
| provision of contract performance costs | provision of contract performance costs | |||||
| Raw materials | 71,952,265.35 | 71,952,265.35 | 112,835,009.77 | 112,835,009.77 | ||
| Goods in progress | 10,054,176,280.96 | 10,054,176,280.96 | 9,169,963,972.73 | 9,169,963,972.73 | ||
| Finished goods | 2,215,459,969.63 | 2,215,459,969.63 | 2,316,583,144.62 | 2,316,583,144.62 | ||
| Goods in transit | 12,735,235.65 | 12,735,235.65 | 22,661,820.34 | 22,661,820.34 | ||
| Total | 12,354,323,751.59 | 12,354,323,751.59 | 11,622,043,947.46 | 11,622,043,947.46 |
The Company shall comply with the disclosure requirements for companies engaging in food & liquorand wine production of the Guidelines No. 3 of the Shenzhen Stock Exchange on Self-regulation ofListed Companies—Industry-specific Information Disclosure.
7.7.2. Notes to the closing balance of inventories including capitalized borrowing expenseThere was no capitalized borrowing expense in the closing balance of inventories.
7.8. Other current assets
Unit: CNY
| Item | Closing Balance | Opening Balance |
| Value-added tax | 113,042,818.38 | 164,220,376.30 |
| Corporate income tax | 7,261,243.46 | 8,733,293.33 |
| Other taxes | 9,095,794.99 | 3,731,062.34 |
| Total | 129,399,856.83 | 176,684,731.97 |
Other statements:
The value-added tax expected to be deducted in the following fiscal period and corporate income taxand other taxes are disclosed in other current assets.
7.9. Other equity instrument investment
Unit: CNY
| Item | Opening Balance | Gains recorded in other comprehensive income in the current period | Losses recorded in other comprehensive income in the current period | Accumulative gains recorded in other comprehensive income in the current period | Accumulative losses recorded in other comprehensive income in the current period | Dividend income recognized in current year | Closing Balance | Reason for assigning to measure in fair value of which changes included other comprehensive income |
| Financial assets assigned | According to the mode of |
| to measure in fair value of which changes included other comprehensive income: | managing assets by management layer | |||||||
| Including: | ||||||||
| China Tourism Group Duty Free Corporation Limited | 84,854,489.68 | 31,505,094.54 | 97,849,300.14 | 2,015,648.45 | 53,349,395.14 | According to the mode of managing assets by management layer | ||
| Guotai Junan Securities Co., Ltd. | 175,241,715.34 | 15,663,406.01 | 146,859,152.57 | 4,710,798.80 | 159,578,309.33 | According to the mode of managing assets by management layer | ||
| Luzhou Bank Co., Ltd. | 96,733,837.69 | 20,696,057.40 | 24,917,780.29 | 3,905,280.00 | 76,037,780.29 | According to the mode of managing assets by management layer | ||
| Guotai Junan Investment Management Co., Ltd. | 22,611,834.24 | 22,611,834.24 | According to the mode of managing assets by management layer | |||||
| North Chemical Industries Co., Ltd. | 12,805,515.44 | 343,982.10 | 12,119,497.54 | 78,177.75 | 13,149,497.54 | According to the mode of managing assets by management layer | ||
| Guojiu Big Data Co., Ltd. | 8,799,784.78 | 1,200,215.22 | 8,799,784.78 | According to the mode of managing assets by management layer | ||||
| Sichuan China Baijiu Golden Triangle Brand Operation Development Co., Ltd. and other equity instrument | 1,846,291.63 | 5,752,926.37 | 1,846,291.63 | According to the mode of managing assets by management layer |
| investments | ||||||||
| Total | 402,893,468.80 | 343,982.10 | 67,864,557.95 | 183,896,430.40 | 104,802,441.73 | 10,709,905.00 | 335,372,892.95 |
Categories of non-trading equity instrument investment in the current period:
Unit: CNY
| Item | Recognized dividends income | Accumulative gains | Accumulative losses | Amount of other comprehensive income transferred to retained earnings | Reason for assigning to measure at fair value and changes recorded into other comprehensive income | Reason of other comprehensive income transferred to retained earnings |
| China Tourism Group Duty Free Corporation Limited | 2,015,648.45 | 97,849,300.14 | According to the mode of managing assets by management layer | |||
| Guotai Junan Securities Co., Ltd. | 4,710,798.80 | 146,859,152.57 | According to the mode of managing assets by management layer | |||
| Luzhou Bank Co., Ltd. | 3,905,280.00 | 24,917,780.29 | According to the mode of managing assets by management layer | |||
| Guotai Junan Investment Management Co., Ltd. | According to the mode of managing assets by management layer | |||||
| North Chemical Industries Co., Ltd. | 78,177.75 | 12,119,497.54 | According to the mode of managing assets by management layer | |||
| Guojiu Big Data Co., Ltd. | 1,200,215.22 | According to the mode of managing assets by management layer | ||||
| Sichuan China Baijiu Golden Triangle Brand Operation Development Co., Ltd. and other equity instrument investments | 5,752,926.37 | According to the mode of managing assets by management layer |
| Total | 10,709,905.00 | 183,896,430.40 | 104,802,441.73 |
7.10. Long-term equity investments
Unit: CNY
| Investee | Opening Balance (book value) | Opening Balance of provision for impairment | Changes in current period | Closing Balance (book value) | Closing Balance of provision for impairment | |||||||
| Increase | Decrease | Gain or loss recognized under equity method | Adjustments of other comprehensive income | Other changes in equity | Cash divided or profit declared | Provision for impairment | Other | |||||
| 1. Joint Ventures | ||||||||||||
| 2. Associate | ||||||||||||
| Huaxi Securities Co., Ltd. | 2,535,630,372.30 | 2,567,098.80 | 4,109,114.62 | 15,730,380.32 | 13,641,557.20 | 2,541,828,310.04 | 2,567,098.80 | |||||
| Luzhou Laojiao Postdoctoral Workstation Technology Innovation Co., Ltd. | 38,339,051.51 | -999,373.92 | 37,339,677.59 | |||||||||
| Sichuan Development Liquor Investment Co., Ltd. | 5,897,980.85 | 2,657.73 | 5,900,638.58 | |||||||||
| Sichuan Tongniang Baijiu Industry Technology Research Institute Co., Ltd. Note | 8,340,392.90 | -34,056.17 | 8,306,336.73 | |||||||||
| CTS Luzhou Laojiao Cultural Tourism Development Co., Ltd. | 120,047,035.94 | 2,430,140.78 | 122,477,176.72 | |||||||||
| Sichuan Tianfu Granary Liquor Industry Co., Ltd. | 11,700,000.00 | 32,478.39 | 11,732,478.39 | |||||||||
| Subtotal | 2,708,254,833.50 | 2,567,098.80 | 11,700,000.00 | 5,540,961.43 | 15,730,380.32 | 13,641,557.20 | 2,727,584,618.05 | 2,567,098.80 | ||||
| Total | 2,708,254,833.50 | 2,567,098.80 | 11,700,000.00 | 5,540,961.43 | 15,730,380.32 | 13,641,557.20 | 2,727,584,618.05 | 2,567,098.80 |
The recoverable amount is determined based on the net amount of the fair value minus disposalcosts
□Applicable ? N/A
The recoverable amount is determined by the present value of the forecasted future cash flow
□Applicable ? N/A
7.11. Investment property
7.11.1. Investment property with cost measurement model
?Applicable □ N/A
Unit: CNY
| Item | Buildings and constructions | Land use right | Construction in progress | Total |
| I. Original cost: | ||||
| 1.Opening balance | 47,321,613.93 | 9,566,480.21 | 56,888,094.14 | |
| 2.Increase in current period | 16,144,408.07 | 1,600,293.75 | 17,744,701.82 | |
| (1) External purchase | ||||
| (2) Transfer from inventories/fixed assets/construction in progress | 16,144,408.07 | 1,600,293.75 | 17,744,701.82 | |
| (3) Increase from business combination |
| 3.Decrease in current period | ||||
| (1) Disposal | ||||
| (2) Other transfer out | ||||
| 4.Closing Balance | 63,466,022.00 | 11,166,773.96 | 74,632,795.96 | |
| II. Accumulated depreciation and amortization | ||||
| 1.Opening Balance | 15,788,024.62 | 3,314,652.75 | 19,102,677.37 | |
| 2.Increase in current period | 10,190,158.58 | 942,669.59 | 11,132,828.17 | |
| (1) Provision or amortization | 331,448.96 | 350,569.76 | 682,018.72 | |
| (2) Transfer from inventories/fixed assets/construction in progress/intangible assets | 9,858,709.62 | 592,099.83 | 10,450,809.45 | |
| 3.Decrease in current period | ||||
| (1) Disposal | ||||
| (2) Other transfer out | ||||
| 4.Closing Balance | 25,978,183.20 | 4,257,322.34 | 30,235,505.54 | |
| III. Provision for impairment | ||||
| 1.Opening Balance | ||||
| 2.Increase in current period | ||||
| (1) Provision | ||||
| 3.Decrease in current period | ||||
| (1) Disposal | ||||
| (2) Other transfer out | ||||
| 4.Closing Balance | ||||
| IV. Book Value | ||||
| 1.Closing Book Value | 37,487,838.80 | 6,909,451.62 | 44,397,290.42 | |
| 2.Opening Book Value | 31,533,589.31 | 6,251,827.46 | 37,785,416.77 |
The recoverable amount is determined based on the net amount of the fair value minus disposalcosts
□Applicable ? N/A
The recoverable amount is determined by the present value of the forecasted future cash flow
□Applicable ? N/A
7.11.2. Investment property without certification of right
Unit: CNY
| Item | Book value | Reason for not having the certification of right |
| Buildings of the Company | 13,980,921.89 | In procedure |
| Total | 13,980,921.89 |
7.12. Fixed assets
Unit: CNY
| Item | Closing Balance | Opening Balance |
| Fixed assets | 9,584,887,115.481 | 8,613,187,271.67 |
| Disposal of fixed assets | 10,310,732.61 | 36,193.79 |
| Total | 9,595,197,848.09 | 8,613,223,465.46 |
Note 1: The fixed assets listed above refer to the fixed assets deducted those disposed.
7.12.1. Details of fixed assets
Unit: CNY
| Item | Buildings and constructions | Specialized equipment | General equipment | Transportation equipment | Other equipment | Total |
| I. Original cost: | ||||||
| 1.Opening balance | 7,601,544,871.04 | 1,249,997,326.78 | 1,223,925,013.96 | 46,767,392.95 | 1,652,688,060.94 | 11,774,922,665.67 |
| 2.Increase in current period | 750,804,722.94 | 198,702,015.22 | 40,763,045.20 | 8,978,187.96 | 334,524,985.68 | 1,333,772,957.00 |
| (1) External purchase | 939,541.77 | 3,012,369.15 | 958,584.07 | 4,910,494.99 | ||
| (2) Transfer from construction in progress | 749,386,149.65 | 201,831,800.50 | 30,639,612.23 | 8,983,726.88 | 313,410,391.31 | 1,304,251,680.57 |
| (3) Increase from business combination | ||||||
| (4) Changes of exchange rates | 3,590.13 | 3,590.13 | ||||
| (5) Adjustment for completion settlement | 1,418,573.29 | -4,069,327.05 | 7,107,473.69 | -5,538.92 | 20,156,010.30 | 24,607,191.31 |
| 3.Decrease in current period | 84,021,200.68 | 19,439,930.27 | 23,149,496.44 | 17,881,376.62 | 21,072,917.05 | 165,564,921.06 |
| (1) Disposal or retirement | 49,364,373.26 | 19,439,930.27 | 23,149,496.44 | 17,881,376.62 | 21,072,917.05 | 130,908,093.64 |
| (2) Transfer to intangible assets | 18,512,419.35 | 18,512,419.35 | ||||
| (3) Transfer to investment property | 16,144,408.07 | 16,144,408.07 | ||||
| 4.Closing Balance | 8,268,328,393.30 | 1,429,259,411.73 | 1,241,538,562.72 | 37,864,204.29 | 1,966,140,129.57 | 12,943,130,701.61 |
| II. Accumulated depreciation | ||||||
| 1.Opening Balance | 1,157,287,207.89 | 606,617,382.10 | 541,324,309.81 | 35,207,198.35 | 820,676,355.78 | 3,161,112,453.93 |
| 2.Increase in current period | 134,612,681.11 | 81,925,342.77 | 73,312,714.29 | 1,979,945.09 | 45,071,135.52 | 336,901,818.78 |
| (1) Provision | 134,612,681.11 | 81,925,342.77 | 73,310,329.19 | 1,979,945.09 | 45,071,135.52 | 336,899,433.68 |
| (2) Changes of exchange | 2,385.10 | 2,385.10 |
| rates | ||||||
| 3.Decrease in current period | 69,391,873.23 | 17,051,714.62 | 19,345,232.04 | 16,106,774.63 | 17,875,092.06 | 139,770,686.58 |
| (1) Disposal or retirement | 43,656,355.23 | 17,051,714.62 | 19,345,232.04 | 16,106,774.63 | 17,875,092.06 | 114,035,168.58 |
| (2) Transfer to intangible assets | 15,876,808.38 | 15,876,808.38 | ||||
| (3) Transfer to investment property | 9,858,709.62 | 9,858,709.62 | ||||
| 4.Closing Balance | 1,222,508,015.77 | 671,491,010.25 | 595,291,792.06 | 21,080,368.81 | 847,872,399.24 | 3,358,243,586.13 |
| III. Provision for impairment | ||||||
| 1.Opening Balance | 622,940.07 | 622,940.07 | ||||
| 2.Increase in current period | ||||||
| (1) Provision | ||||||
| 3.Decrease in current period | 622,940.07 | 622,940.07 | ||||
| (1) Disposal or retirement | 622,940.07 | 622,940.07 | ||||
| 4.Closing Balance | ||||||
| IV. Book Value | ||||||
| 1.Closing Book Value | 7,045,820,377.53 | 757,768,401.48 | 646,246,770.66 | 16,783,835.48 | 1,118,267,730.33 | 9,584,887,115.48 |
| 2.Opening Book Value | 6,443,634,723.08 | 643,379,944.68 | 682,600,704.15 | 11,560,194.60 | 832,011,705.16 | 8,613,187,271.67 |
7.12.2. Fixed assets leased out through operating lease
Unit: CNY
| Item | Closing book value |
| Buildings and constructions | 21,360,483.92 |
| Total | 21,360,483.92 |
7.12.3. Fixed assets without certification of right
Unit: CNY
| Item | Book value | Reason for not having the certification of right |
| Buildings of the Company | 19,317,091.70 | The property ownership certificate has not been processed yet for the historical reasons, and it plans to be processed after gradually improving procedures. |
| Buildings of the Company | 218,888,350.96 | In procedure |
| Buildings of the subsidiary-brewing company | 4,929,308,324.63 | In procedure |
| Total | 5,167,513,767.29 |
7.12.4. Disposal of fixed assets
Unit: CNY
| Item | Closing Balance | Opening Balance |
| Disposal and retirement of assets | 10,310,732.61 | 36,193.79 |
| Total | 10,310,732.61 | 36,193.79 |
7.13. Construction in progress
Unit: CNY
| Item | Closing Balance | Opening Balance |
| Construction in progress | 561,121,727.911 | 1,718,468,880.53 |
| Total | 561,121,727.91 | 1,718,468,880.53 |
Note: 1. The term "construction in progress" in the above table refers to construction in progressminus construction materials.
7.13.1. Details of the construction in progress
Unit: CNY
| Item | Closing Balance | Opening Balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
| Technical renovation of Luzhou Laojiao Intelligent packaging center | 7,114,416.08 | 7,114,416.08 | 1,132,704,191.02 | 1,132,704,191.02 | ||
| Technical renovation project of Luzhou Laojiao intelligent brewing (I) | 325,958,629.48 | 325,958,629.48 | 217,839,823.49 | 217,839,823.49 | ||
| Technical renovation of Luzhou Laojiao Intelligent packaging center (II) | 104,956.18 | 104,956.18 | 141,773,898.97 | 141,773,898.97 | ||
| Project of Luzhou Laojiao's Flexible Intelligent Filling Pilot Line | 77,754,003.94 | 77,754,003.94 | 92,773,969.99 | 92,773,969.99 | ||
| Construction Project of Luzhou Laojiao's Strong Aroma Baijiu | 3,792,600.08 | 3,792,600.08 | 1,194,002.45 | 1,194,002.45 | ||
| Experience Marketing Centre | ||||||
| Technical Reform Project of Luzhou Laojiao's Brewing Base | 0.00 | 0.00 | 574,755.15 | 574,755.15 | ||
| Other projects | 146,397,122.15 | 146,397,122.15 | 131,608,239.46 | 131,608,239.46 | ||
| Total | 561,121,727.911 | 561,121,727.91 | 1,718,468,880.53 | 1,718,468,880.53 |
Notes: 1. At the end of the period, there was a decrease of CNY 1,157,347,152.62 or 67.35%, whichwas mainly due to the completion and carry-forward of engineering projects.
7.13.2. Significant changes in construction in progress
Unit: CNY
| Item | Budget | Opening Balance | Increase in current period | Transfer into fixed assets | Other decreases | Closing Balance | Proportion of accumulative project input in budget | Progress (%) | Accumulative capitalized interest | Including: Capitalized interest for the period | Capitalization rate for the period (%) | Source of funds |
| Technical renovation project of Luzhou Laojiao intelligent brewing (I) | 4,782,509,000.00 | 217,839,823.49 | 108,118,805.99 | 325,958,629.48 | 19.06% | 25.00% | Other | |||||
| Total | 4,782,509,000.00 | 217,839,823.49 | 108,118,805.99 | 325,958,629.48 |
7.13.3. Impairment test of construction in progress
□Applicable ? N/A
7.14. Right-of-use assets
7.14.1. Details of right-of-use assets
Unit: CNY
| Item | Land use right | Buildings and constructions | Total |
| I. Original cost | |||
| 1. Opening Balance | 30,788,322.41 | 10,375,681.84 | 41,164,004.25 |
| 2. Increase in current period | 13,601,068.01 | 13,601,068.01 | |
| (1) Increase in leases | 13,463,558.45 | 13,463,558.45 | |
| (2) Changes of exchange rates | 137,509.56 | 137,509.56 | |
| 3. Decrease in current period | |||
| (1) Lease expiration | |||
| (2) Adjustment for change of lease term | |||
| 4. Closing Balance | 30,788,322.41 | 23,976,749.85 | 54,765,072.26 |
| II. Accumulated amortization | |||
| 1. Opening Balance | 10,273,916.78 | 7,629,132.24 | 17,903,049.02 |
| 2. Increase in current period | 1,712,319.46 | 2,961,727.50 | 4,674,046.96 |
| (1) Provision | 1,712,319.46 | 2,869,296.44 | 4,581,615.90 |
| (2) Changes of exchange rates | 92,431.06 | 92,431.06 | |
| 3. Decrease in current period | |||
| (1) Disposal | |||
| (2) Lease expiration | |||
| (3) Adjustment for change of lease term | |||
| 4. Closing Balance | 11,986,236.24 | 10,590,859.74 | 22,577,095.98 |
| III. Provision for impairment | |||
| 1. Opening Balance | |||
| 2. Increase in current period | |||
| (1) Provision | |||
| 3. Decrease in current period | |||
| (1) Disposal | |||
| 4. Closing Balance | |||
| IV. Book Value | |||
| 1. Closing Book Value | 18,802,086.17 | 13,385,890.11 | 32,187,976.28 |
| 2. Opening Book Value | 20,514,405.63 | 2,746,549.60 | 23,260,955.23 |
7.14.2. Impairment test of right-of-use assets
□Applicable ? N/A
7.15. Intangible assets
7.15.1. Details of intangible assets
Unit: CNY
| Item | Land use right | Patent right | No-patent right technology | Computer software | Trademark right | Total |
| I. Original cost | ||||||
| 1. Opening Balance | 3,654,960,826.00 | 1,700,050.44 | 89,700,887.41 | 2,118,716.09 | 3,748,480,479.94 | |
| 2. Increase in current period | 21,457,756.22 | 20,694,749.62 | 1,419.45 | 42,153,925.29 | ||
| (1) Acquired | ||||||
| (2) Internal developed | ||||||
| (3) Business combination | ||||||
| (4) Transferred from construction in progress | 2,945,336.87 | 20,694,749.62 | 23,640,086.49 | |||
| (5) Changes of exchange rates | 1,419.45 | 1,419.45 | ||||
| (6) Transferred from fixed assets | 18,512,419.35 | 18,512,419.35 | ||||
| 3. Decrease in current period | 1,811,172.75 | 1,811,172.75 | ||||
| (1) Disposal | 210,879.00 | 210,879.00 | ||||
| (2) Transferred to investment property | 1,600,293.75 | 1,600,293.75 | ||||
| 4. Closing Balance | 3,674,607,409.47 | 1,700,050.44 | 110,395,637.03 | 2,120,135.54 | 3,788,823,232.48 | |
| II. Accumulated amortization | ||||||
| 1. Opening Balance | 309,168,468.63 | 960,614.13 | 38,581,851.65 | 1,895,754.45 | 350,606,688.86 | |
| 2. Increase in current period | 57,021,203.11 | 65,002.52 | 4,466,990.95 | 450.08 | 61,553,646.66 | |
| (1) Provision | 41,144,394.73 | 65,002.52 | 4,466,990.95 | 450.08 | 45,676,838.28 | |
| (2) Transferred from fixed assets | 15,876,808.38 | 15,876,808.38 | ||||
| 3. Decrease in current period | 802,978.83 | 802,978.83 | ||||
| (1) Disposal | 210,879.00 | 210,879.00 | ||||
| (2) Transferred to investment property | 592,099.83 | 592,099.83 | ||||
| 4. Closing Balance | 365,386,692.91 | 1,025,616.65 | 43,048,842.60 | 1,896,204.53 | 411,357,356.69 | |
| III. Provision |
| for impairment | ||||||
| 1. Opening Balance | ||||||
| 2. Increase in current period | ||||||
| (1) Provision | ||||||
| 3. Decrease in current period | ||||||
| (1) Disposal | ||||||
| 4. Closing Balance | ||||||
| IV. Book Value | ||||||
| 1. Closing Book Value | 3,309,220,716.56 | 674,433.79 | 67,346,794.43 | 223,931.01 | 3,377,465,875.79 | |
| 2. Opening Book Value | 3,345,792,357.37 | 739,436.31 | 51,119,035.76 | 222,961.64 | 3,397,873,791.08 |
There is no proportion of intangible assets formed by internal development to the balance ofintangible assets at the period-end.
7.15.2. Land use right without certification of right
There was no land use right without certification of right at the period-end.
7.15.3. Impairment test of intangible assets
□Applicable ? N/A
7.16. Long-term deferred expense
Unit: CNY
| Item | Opening Balance | Increase | Amortization | Other decrease | Closing Balance |
| Improvement expense of rented fixed assets | 960,005.91 | 907,521.97 | 297,838.99 | -3,694.611 | 1,573,383.50 |
| Total | 960,005.91 | 907,521.97 | 297,838.99 | -3,694.61 | 1,573,383.50 |
Note: 1 Other decrease was generated from changes of exchange rates.
7.17. Deferred tax assets/ deferred tax liabilities
7.17.1. Deferred tax assets before offset
Unit: CNY
| Item | Closing Balance | Opening Balance | ||
| Deductible temporary differences | Deferred tax assets | Deductible temporary differences | Deferred tax assets | |
| Provision for asset impairment | 125,341,495.27 | 31,205,093.75 | 127,079,101.68 | 31,572,482.83 |
| Unrealized profits from internal transactions | 318,838,272.52 | 79,709,568.13 | 1,533,438,058.70 | 383,359,514.67 |
| Impact from salary | 289,324,799.75 | 71,711,129.14 | 466,715,045.27 | 115,258,381.83 |
| Impact from deferred earnings | 24,919,853.01 | 6,229,963.25 | 27,772,083.74 | 6,943,020.94 |
| Impact from fixed assets depreciation | 877,478.18 | 144,783.90 | 889,943.60 | 233,853.09 |
| Recognition costs of restricted shares for equity incentive in the vesting period | 171,011,503.381 | 41,947,773.20 | 460,239,659.25 | 112,958,934.99 |
| Impact from fair value changes of other equity instrument investment | 122,227,638.21 | 30,556,909.56 | 90,722,543.67 | 22,680,635.92 |
| Impact of income tax from initial recognition of lease liabilities | 2,583,092.87 | 622,962.00 | 8,994,376.39 | 1,422,793.65 |
| Total | 1,055,124,133.19 | 262,128,182.932 | 2,715,850,812.30 | 674,429,617.92 |
Note: 1. Deductible temporary differences of CNY 171,011,503.38 of costs and expenses recognizedduring the vesting period of restricted shares for share incentives represent the estimated future pre-tax deductible amounts based on the Company's share price less the grant price at the end of theperiod.
2. The closing balance of deferred tax assets decreased by CNY 412,301,434.99 or 61.13%compared with the opening, which was mainly due to the impact of a decrease in unrealised profitsfrom intra-company transactions and the reversal of restricted share lifting.
7.17.2. Deferred tax liabilities before offset
Unit: CNY
| Item | Closing Balance | Opening Balance | ||
| Taxable temporary differences | Deferred tax liabilities | Taxable temporary differences | Deferred tax liabilities | |
| Fair value changes of other equity instrument investment | 183,896,430.40 | 45,974,107.57 | 219,911,911.71 | 54,977,977.92 |
| Fair value changes of held-for-trading financial assets | 26,992,098.76 | 6,748,024.69 | ||
| Impact from the policy of one-time pre-tax deduction of fixed assets | 300,801,728.07 | 73,669,756.77 | 330,643,563.72 | 80,965,673.53 |
| Impact of income tax from initial recognition of right-of-use assets | 2,159,815.66 | 538,700.44 | 345,267.49 | 81,352.08 |
| Total | 486,857,974.13 | 120,182,564.78 | 577,892,841.68 | 142,773,028.22 |
7.17.3. Details of unrecognized deferred tax assets
Unit: CNY
| Item | Closing Balance | Opening Balance |
| Deductible losses | 345,583,347.56 | 253,464,624.61 |
| Credit impairment losses and asset impairment provision | 6,857.79 | 1,505.26 |
| Impact from employee benefits payable | 10,648,126.41 | 13,557,753.92 |
| Total | 356,238,331.76 | 267,023,883.79 |
7.17.4. Deductible losses from unrecognized deferred tax assets will due on the followingyears
Unit: CNY
| Year | Closing Amount | Opening Amount | Notes |
| The 1st year | 14,491,365.44 | 14,491,365.44 | |
| The 2nd year | 15,884,395.00 | 15,884,395.00 | |
| The 3rd year | 8,417,566.87 | 8,417,566.87 | |
| The 4th year | 42,092,277.59 | 33,125,772.28 | |
| The 5th year | 264,697,742.66 | 181,545,525.02 | |
| Total | 345,583,347.56 | 253,464,624.61 |
7.18. Other non-current assets
Unit: CNY
| Item | Closing Balance | Opening Balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
| Prepayment for long-term assets such as engineering equipment and land | 404,267,753.99 | 404,267,753.99 | 358,900,430.13 | 358,900,430.13 | ||
| Total | 404,267,753.99 | 404,267,753.99 | 358,900,430.13 | 358,900,430.13 | ||
7.19. Assets with restricted ownership or use rights
Unit: CNY
| Item | Period-end | Period-beginning | ||||||
| Book balance | Book value | Type of restriction | Status of restriction | Book balance | Book value | Type of restriction | Status of restriction | |
| Cash and cash equivalents | 94,715,340.26 | 94,715,340.26 | Fixed deposit interest | Provision for fixed deposit interest on an accrual basis | 48,222,882.52 | 48,222,882.52 | Fixed deposit interest | Provision for fixed deposit interest on an accrual basis |
| Cash and cash equivalents | 10,992,930.88 | 10,992,930.88 | Margin | Bank cash deposits for L/G and E-commerce platform margin | 10,772,930.90 | 10,772,930.90 | Margin | Bank cash deposits for L/G and E-commerce platform margin |
| Total | 105,708,271.14 | 105,708,271.14 | 58,995,813.42 | 58,995,813.42 |
7.20. Held-for-trading financial liabilities
Unit: CNY
| Item | Closing Balance | Opening Balance |
| Held-for-trading financial liabilities | 9,763.87 | |
| Including: | ||
| Foreign exchange forward transaction | 9,763.87 | |
| Including: | ||
| Total | 9,763.87 |
7.21. Accounts payable
7.21.1. Presentation of accounts payable
Unit: CNY
| Category | Closing Balance | Opening Balance |
| Materials and service expense | 852,178,492.50 | 862,772,419.35 |
| Engineering equipment expense | 1,310,643,045.14 | 1,494,451,313.86 |
| Total | 2,162,821,537.64 | 2,357,223,733.21 |
7.21.2. Significant accounts payable whose aging is longer than 1 year
Unit: CNY
| Category | Closing Balance | Reason for not payment or carrying forward |
| China Construction First Group Corporation Limited | 385,213,559.89 | Project payment within the contract settlement period |
| Luzhou Branch of Zhongqi Construction Group Huamao Co., Ltd. | 21,826,780.23 | Project payment within the contract settlement period |
| New Trend International Logis-Tech Co., Ltd. | 38,511,260.00 | Equipment payment within the contract settlement period |
| Shanghai Defeng Advertising Communication Co., Ltd. | 40,000,000.00 | Advertising payment within the contract settlement period |
| Total | 485,551,600.12 |
7.22. Other payables
Unit: CNY
| Item | Closing Balance | Opening Balance |
| Dividend payable | 7,948,733,952.60 | 29,684,819.82 |
| Other payables | 849,638,890.46 | 1,121,036,342.71 |
| Total | 8,798,372,843.06 | 1,150,721,162.53 |
7.22.1. Dividend payable
Unit: CNY
| Item | Closing Balance | Opening Balance |
| Ordinary share dividends | 7,924,544,913.34 | 29,684,819.82 |
| Restricted share dividends | 24,189,039.26 | |
| Total | 7,948,733,952.60 | 29,684,819.82 |
7.22.2. Other payables
7.22.2.1. Categories by nature
Unit: CNY
| Item | Closing Balance | Opening Balance |
| Security deposit | 464,078,875.23 | 471,170,274.78 |
| Intercourse funds | 23,826,881.13 | 26,994,900.06 |
| Repurchase obligations of restricted shares | 357,638,387.98 | 616,743,610.59 |
| Others | 4,094,746.12 | 6,127,557.28 |
| Total | 849,638,890.46 | 1,121,036,342.71 |
7.22.2.2. Significant other payables whose aging are longer than 1 year
Unit: CNY
| Item | Closing Balance | Reason for not payment or carrying forward |
| Security deposits from suppliers | 47,781,056.00 | Within the contract performance period |
| Security deposits from dealers | 10,000,000.00 | Within the contract performance period |
| Total | 57,781,056.00 |
7.23. Contract liabilities
Unit: CNY
| Category | Closing Balance | Opening Balance |
| Within 1 year | 2,314,919,334.28 | 2,648,369,042.14 |
| 1-2 years | 11,060,497.44 | 11,257,914.75 |
| 2-3 years | 3,373,131.37 | 1,537,289.68 |
| Over 3 years | 12,355,329.63 | 11,812,843.73 |
| Total | 2,341,708,292.72 | 2,672,977,090.30 |
Significant contract liabilities whose aging are longer than 1 year
Unit: CNY
| Item | Closing Balance | Reason for not payment or carrying forward |
| Advances from customers for goods | 8,698,271.48 | Within the contract settlement period |
| Total | 8,698,271.48 |
7.24. Employee benefits payable
7.24.1. Employee benefits payable shown as follows
Unit: CNY
| Item | Opening Balance | Increase in current period | Decrease in current period | Closing Balance |
| 1. Short-term benefits | 495,138,782.21 | 562,044,018.27 | 748,698,928.37 | 308,483,872.11 |
| 2. Post-employment benefits- defined contribution plans | 28,718,957.67 | 88,167,247.76 | 79,600,936.00 | 37,285,269.43 |
| 3. Termination benefits | 8,971.53 | 474,590.00 | 474,590.00 | 8,971.53 |
| Total | 523,866,711.41 | 650,685,856.03 | 828,774,454.37 | 345,778,113.07 |
7.24.2. Short-term employee benefits payable shown as follows
Unit: CNY
| Item | Opening Balance | Increase in current period | Decrease in current period | Closing Balance |
| 1. Wages, bonuses, allowances and grants | 441,221,793.71 | 461,997,422.38 | 646,474,886.48 | 256,744,329.61 |
| 2. Employees’ welfare | 6,078,762.75 | 6,078,762.75 | ||
| 3. Social insurance premiums | 10,323,076.28 | 41,296,776.99 | 45,685,497.68 | 5,934,355.59 |
| Medical and maternity insurance premium | 8,947,557.56 | 39,590,735.72 | 44,409,103.91 | 4,129,189.37 |
| Work-related injury insurance | 1,375,518.72 | 1,706,041.27 | 1,276,393.77 | 1,805,166.22 |
| 4. Housing funds | 5,572,651.95 | 40,765,989.52 | 38,118,506.33 | 8,220,135.14 |
| 5. Labor union expenditures and employee education funds | 38,021,260.27 | 11,905,066.63 | 12,341,275.13 | 37,585,051.77 |
| Total | 495,138,782.21 | 562,044,018.27 | 748,698,928.37 | 308,483,872.11 |
7.24.3. Defined contribution plan shown as follows
Unit: CNY
| Item | Opening Balance | Increase in current period | Decrease in current period | Closing Balance |
| 1. Basic endowment insurance premium | 21,964,091.48 | 53,722,810.29 | 48,881,810.93 | 26,805,090.84 |
| 2. Unemployment insurance premium | 331,799.76 | 2,016,934.29 | 1,842,468.99 | 506,265.06 |
| 3. Enterprise annuity | 6,423,066.43 | 32,427,503.18 | 28,876,656.08 | 9,973,913.53 |
| Total | 28,718,957.67 | 88,167,247.76 | 79,600,936.00 | 37,285,269.43 |
Other statementsThe closing balance of employee benefits payable decreased by CNY 178,088,598.34 or 34.00%compared with the opening balance, which was mainly due to the impact of the payment ofperformance-based bonuses from the previous year during the current period.
7.25. Taxes payable
Unit: CNY
| Item | Closing Balance | Opening Balance |
| Value-added tax | 381,740,808.96 | 462,528,000.24 |
| Consumption tax | 315,320,760.71 | 1,255,405,887.03 |
| Enterprise income tax | 828,042,348.31 | 998,666,442.52 |
| Individual income tax | 4,289,988.18 | 7,810,885.88 |
| Urban maintenance and construction tax | 47,741,709.28 | 119,493,139.70 |
| Education surcharge | 20,563,701.74 | 51,286,192.79 |
| Local education surcharge | 13,817,168.23 | 34,299,228.87 |
| Stamp duty | 6,554,854.24 | 9,347,536.01 |
| Land use tax | 437,618.74 | 437,618.74 |
| Others | 361,769.00 | 352,601.22 |
| Total | 1,618,870,727.39 | 2,939,627,533.00 |
Other statementsThe closing balance of taxes payable decreased by CNY 1,320,756,805.61 or 44.93% compared withthe opening balance, which was mainly due to the payment of taxes payable from the previous yearduring the current period.
7.26. Non-current liabilities due within one year
Unit: CNY
| Item | Closing Balance | Opening Balance |
| Long-term loans due within one year | 25,000,000.00 | 25,000,000.00 |
| Lease liabilities due within one year | 8,933,959.38 | 5,114,015.89 |
| Interest of long-term loans due within one year | 7,028,936.39 | 7,379,478.99 |
| Interest of bonds payable due within one year | 1,514,379,181.46 | 41,424,657.53 |
| Total | 1,555,342,077.23 | 78,918,152.41 |
Other statements:
The closing balance of non-current liabilities due within one year increased by CNY 1,476,423,924.82or 1870.83% compared with the opening balance, which was mainly due to the upcoming maturity ofthe "2020 Laojiao 01" corporate bond within one year.
7.27. Other current liabilities
Unit: CNY
| Item | Closing Balance | Opening Balance |
| Output VAT to be transferred | 304,419,317.46 | 347,485,071.57 |
| Total | 304,419,317.46 | 347,485,071.57 |
7.28. Long-term loans
7.28.1. Long-term loans
Unit: CNY
| Item | Closing Balance | Opening Balance |
| Credit loans | 11,015,000,000.00 | 10,025,300,000.00 |
| Less: Long-term loans due within one year | -25,000,000.00 | -25,000,000.00 |
| Total | 10,990,000,000.00 | 10,000,300,000.00 |
Note to the category of long-term loans:
Other statements, including interest rate range:
Loan prime rate (LPR) - corresponding basic points (BP) for 1-year/5-year and above loan terms.
7.29. Bonds payable
7.29.1. Bonds payable
Unit: CNY
| Item | Closing Balance | Opening Balance |
| Corporate bonds in 2020 (Phase I) | 1,498,716,737.02 | |
| Total | 1,498,716,737.02 |
7.29.2. Increase/decrease of bonds payable (excluding other financial instrument classified asfinancial liabilities such as preferred shares and perpetual bonds)
Unit: CNY
| Bond name | Par value | Coupon rate | Issuing date | Duration | Issuing amount | Opening Balance | Issued in the current period | Withdrawal of interest by par value | Amortization of premium and depreciation | Repayment in the reporting period | Reclassification | Closing Balance | Default or not |
| Corp | 1,500 | 3.50 | 16 | 5 | 1,494 | 1,498 | 26,17 | 559,7 | 1,499 | 0.00 | Not |
| orate bonds in 2020 (Phase I) | ,000,000.00 | % | March 2020 | years | ,000,000.00 | ,716,737.02 | 8,082.19 | 04.72 | ,276,441.74 | ||||
| Total | 1,494,000,000.00 | 1,498,716,737.02 | 26,178,082.19 | 559,704.72 | 1,499,276,441.74 | 0.001 |
Notes: 1. The closing balance of bonds payable decreased by CNY 1,498,716,737.02 or 100%compared with the opening balance, which was mainly due to the upcoming maturity of the "2020Laojiao 01" corporate bond within one year.
7.30. Lease liabilities
Unit: CNY
| Item | Closing Balance | Opening Balance |
| Lease payment | 42,242,907.33 | 32,472,149.33 |
| Less: unrecognized financing cost | -4,888,049.98 | -5,001,728.97 |
| Lease liabilities due within one year | -8,933,959.38 | -5,114,015.89 |
| Total | 28,420,897.97 | 22,356,404.47 |
7.31. Deferred income
Unit: CNY
| Item | Opening Balance | Increase in current period | Decrease in current period | Closing Balance | Reason |
| Government grants | 27,772,083.74 | 2,560,000.00 | 5,412,230.73 | 24,919,853.01 | Reception of financial allocation |
| Total | 27,772,083.74 | 2,560,000.00 | 5,412,230.73 | 24,919,853.01 |
Other statements:
Details:
| Item | Opening Balance | Increase in current period | Non-operating income in current period | Other income in current period | Cost reduction in current period | Other decrease | Closing Balance | Related to assets/ income |
| New mode application project of digital workshop for solid state baijiu production | 3,495,363.94 | 776,747.56 | 2,718,616.38 | Related to assets | ||||
| Construction project of liquor room of Luzhou Laojiao brewing | 6,042,857.20 | 1,342,857.14 | 4,700,000.06 | Related to assets |
| Item | Opening Balance | Increase in current period | Non-operating income in current period | Other income in current period | Cost reduction in current period | Other decrease | Closing Balance | Related to assets/ income |
| technical renovation | ||||||||
| Luzhou Laojiao automatic baijiu production line technical renovation project | 785,934.06 | 174,652.02 | 611,282.04 | Related to assets | ||||
| Boiler reconstruction project of Luohan Brewing Base of Luzhou Laojiao | 5,057,142.86 | 632,142.86 | 4,425,000.00 | Related to assets | ||||
| Brewing wastewater treatment project | 7,714,285.68 | 1,714,285.72 | 5,999,999.96 | Related to assets | ||||
| Improvement and technical renovation project of Luzhou Laojiao production supporting | 4,676,500.00 | 2,560,000.00 | 771,545.43 | 6,464,954.57 | Related to assets | |||
| Total | 27,772,083.74 | 2,560,000.00 | 5,412,230.73 | 24,919,853.01 |
7.32. Share capital
Unit: CNY
| Opening Balance | Increases/decreases in the current period (+, -) | Closing Balance | |||||
| Issuance of new shares | Bonds share | Conversion of reserves funds into shares | Others | Subtotal | |||
| Total number of shares | 1,471,987,769.00 | 1,471,987,769.00 | |||||
7.33. Capital reserves
Unit: CNY
| Item | Opening Balance | Increase in current period | Decrease in current period | Closing Balance |
| Share premium (capital premium) | 4,205,307,212.40 | 410,989,045.60 | 4,616,296,258.00 |
| Other capital reserves | 980,174,310.82 | 100,107,773.11 | 410,989,045.60 | 669,293,038.33 |
| Total | 5,185,481,523.22 | 511,096,818.71 | 410,989,045.60 | 5,285,589,296.33 |
Other statements, including increase/decrease and reasons thereof:
The increase of capital premium during the current period was attributed to the share premiumpayment transferred back from the capital reserve-other capital reserve from the first lifting ofrestricted shares.
7.34. Treasury shares
Unit: CNY
| Item | Opening Balance | Increase in current period | Decrease in current period | Closing Balance |
| Perform the repurchase obligations under the equity incentive | 616,743,610.59 | 257,292,487.50 | 359,451,123.09 | |
| Total | 616,743,610.59 | 257,292,487.50 | 359,451,123.09 |
Other statements, including notes to increase and decrease during the reporting period and thereasons for changes:
The closing balance of treasury shares decreased by CNY 257,292,487.50 or 41.72% compared withthe opening balance, which was mainly due to the impact of the reversal of restricted share liftingduring the period.
7.35. Other comprehensive income
Unit: CNY
| Item | Opening Balance | Current Period | Closing Balance | |||||
| Amount in current period before income tax | Less: Previously recognized in other comprehensive income transferred to profit and loss | Less: Previously recognized in other comprehensive income transferred to retained earnings | Less: Income tax | Amount attribute to parent company after tax | Amount attribute to non-controlling shareholders after tax | |||
| I. Other comprehensive income that will not be reclassified into profit and loss | 96,948,563.88 | -50,739,026.64 | -50,739,026.64 | 46,209,537.24 | ||||
| Other | 106,537.8 | - | - | 7,943.08 | ||||
| comprehensive income that will not be reclassified into profit and loss under equity method | 6 | 98,594.78 | 98,594.78 | |||||
| Fair value changes of other equity instrument investment | 96,842,026.02 | -50,640,431.86 | -50,640,431.86 | 46,201,594.16 | ||||
| II. Other comprehensive income that will be reclassified into profit and loss | -33,818,094.37 | 16,296,781.14 | 16,086,705.56 | 210,075.58 | -17,731,388.81 | |||
| Including: Other comprehensive income that will be reclassified into profit and loss under equity method | -36,784,191.34 | 15,828,975.10 | 15,828,975.10 | -20,955,216.24 | ||||
| Difference from conversion of financial statements in foreign currency | 2,966,096.97 | 467,806.04 | 257,730.46 | 210,075.58 | 3,223,827.43 | |||
| Total | 63,130,469.51 | -34,442,245.50 | -34,652,321.08 | 210,075.58 | 28,478,148.43 |
Other statements, including the adjustment of the effective gain/loss on cash flow hedges to the initialrecognized amount:
The closing balance of other comprehensive income decreased by CNY 34,652,321.08 or 54.89%compared with the opening balance, which was mainly due to the impact of a decline in the fair valueof equity investments during the period.
7.36. Surplus reserves
Unit: CNY
| Item | Opening Balance | Increase in current period | Decrease in current period | Closing Balance |
| Statutory surplus reserves | 1,471,987,769.00 | 1,471,987,769.00 | ||
| Total | 1,471,987,769.00 | 1,471,987,769.00 |
7.37. Undistributed profits
Unit: CNY
| Item | Current Period | Previous Period |
| Undistributed profit before adjustment at the end of the last year | 33,815,566,574.75 | 26,772,197,213.98 |
| Undistributed profit after adjustment at the beginning of year | 33,815,566,574.75 | 26,772,197,213.98 |
| Plus: Net profit attributable to owners of the parent company for the current period | 8,027,538,165.31 | 7,090,426,787.07 |
| Ordinary share dividends payable | 7,948,733,952.60 | 6,219,148,324.03 |
| Plus: Other transfer in | 16,215,653.21 | |
| Undistributed profits at the end of the period | 33,894,370,787.46 | 27,659,691,330.23 |
7.38. Operating revenue and cost of sales
Unit: CNY
| Item | Current Period | Previous Period | ||
| Revenue | Cost of sales | Revenue | Cost of sales | |
| Primary business | 16,638,234,607.68 | 1,829,724,587.15 | 14,369,036,994.33 | 1,591,479,349.36 |
| Other business | 266,650,561.70 | 102,349,906.01 | 224,014,779.81 | 108,783,756.32 |
| Total | 16,904,885,169.38 | 1,932,074,493.16 | 14,593,051,774.14 | 1,700,263,105.68 |
Details:
Unit: CNY
| Contract category | Segment 1: Baijiu sales | Total | ||
| Operating revenue | Cost of sales | Operating revenue | Cost of sales | |
| Commodity type | ||||
| Including: | ||||
| Medium and high grade baijiu | 15,213,367,295.49 | 1,177,762,665.64 | 15,213,367,295.49 | 1,177,762,665.64 |
| Other baijiu | 1,625,224,060.49 | 733,344,920.01 | 1,625,224,060.49 | 733,344,920.01 |
| By operating segment | ||||
| Including: | ||||
| Domestic | 16,744,963,428.84 | 1,897,692,734.64 | 16,744,963,428.84 | 1,897,692,734.64 |
| Outbound | 93,627,927.14 | 13,414,851.01 | 93,627,927.14 | 13,414,851.01 |
| Market or customer type | ||||
| Including: | ||||
| Contract type | ||||
| Including: | ||||
| Commodity sales contract | 16,838,591,355.98 | 1,911,107,585.65 | 16,838,591,355.98 | 1,911,107,585.65 |
| By commodity transfer time | ||||
| Including: | ||||
| By contract term | ||||
| Including: | ||||
| By sales channel | ||||
| Including: | ||||
| Total | 16,838,591,355.98 | 1,911,107,585.65 | 16,838,591,355.98 | 1,911,107,585.65 |
Other statementsThe Company's main business is the production and sale of baijiu. Revenue is recognised at the pointwhen the Company transfers control of the relevant goods to the customer and fulfils its performanceobligations.
Information in relation to the transaction price apportioned to the residual contract performanceobligation:
The amount of revenue corresponding to performance obligations of contracts signed but notperformed or not fully performed yet was CNY 2,333,010,021.24 at the period-end, among whichCNY 2,333,010,021.24 was expected to be recognized in 2024, CNY XXX in XXX and CNY XXX inXXX.
7.39. Business taxes and surcharges
Unit: CNY
| Item | Current Period | Previous Period |
| Consumption tax | 1,569,134,676.20 | 1,203,032,837.64 |
| Urban maintenance and construction tax | 234,395,139.08 | 187,840,939.62 |
| Educational surcharge | 101,935,040.80 | 80,502,780.15 |
| Property tax | 38,124,428.64 | 39,107,945.82 |
| Land use tax | 16,728,210.45 | 17,656,012.34 |
| Stamp duty | 14,952,384.57 | 12,043,066.53 |
| Local education surcharge | 67,956,693.84 | 53,668,728.47 |
| Others | 150,460.39 | 106,664.38 |
| Total | 2,043,377,033.97 | 1,593,958,974.95 |
7.40. General and administrative expenses
Unit: CNY
| Item | Current Period | Previous Period |
| Employee compensation | 245,671,985.85 | 234,498,550.74 |
| Depreciation and amortization | 55,441,149.62 | 56,042,880.60 |
| Management fee and service expense | 30,508,690.11 | 27,605,235.72 |
| Others | 173,072,349.73 | 221,732,574.25 |
| Total | 504,694,175.31 | 539,879,241.31 |
7.41. Selling and distribution expenses
Unit: CNY
| Item | Current Period | Previous Period |
| Advertising promotion expense | 771,086,934.79 | 585,741,219.56 |
| Promotion expense | 465,935,051.00 | 486,391,918.30 |
| Employee compensation | 212,055,575.40 | 210,781,737.74 |
| Storage and logistics costs | 81,048,424.07 | 95,488,340.44 |
| Others | 100,167,038.41 | 84,793,614.57 |
| Total | 1,630,293,023.67 | 1,463,196,830.61 |
7.42. Research and development expenses
Unit: CNY
| Item | Current Period | Previous Period |
| Comprehensive research and development expenses | 75,028,702.85 | 62,914,698.99 |
| Total | 75,028,702.85 | 62,914,698.99 |
7.43. Financial expenses
Unit: CNY
| Item | Current Period | Previous Period |
| Interest expenses | 266,707,454.54 | 261,543,693.36 |
| Less: Interest income | 391,537,705.76 | 384,116,432.10 |
| Losses from currency exchange | -1,947,832.81 | -5,091,874.65 |
| Handling charges | 1,979,786.54 | 1,233,960.31 |
| Amortization of unrecognized financing costs | 523,544.94 | 646,861.65 |
| Total | -124,274,752.55 | -125,783,791.43 |
7.44. Other income
Unit: CNY
| Item | Current Period | Previous Period |
| Government grants | 18,852,624.09 | 21,166,337.88 |
| Other refund | 2,526,666.45 | 2,229,602.28 |
| Total | 21,379,290.54 | 23,395,940.16 |
7.45. Gain on changes in fair value
Unit: CNY
| Item | Current Period | Previous Period |
| Held-for-trading financial assets | 33,247,170.87 | 32,781,678.42 |
| Held-for-trading financial liabilities | 9,796.97 | |
| Total | 33,256,967.84 | 32,781,678.42 |
7.46. Investment income
Unit: CNY
| Item | Current Period | Previous Period |
| Investment income from long-term equity investments under the equity method | 14,536,085.02 | 70,278,286.49 |
| Investment income gained during the period of holding held-for-trading financial assets | 20,065,193.40 | 2,391,009.80 |
| Investment income from disposal of held-for-trading financial assets | -29,871,256.97 | 5,057,632.10 |
| Dividend income gained during the period of holding other equity instrument investment | 10,709,905.00 | 7,297,266.16 |
| Investment losses from foreign exchange forward transaction | -17,362.71 | |
| Total | 15,422,563.74 | 85,024,194.55 |
Other statements:
Note 1: There is no major restriction on the repatriation of the Company's investment income.Note 2: The investment income for the current period decreased by CNY 69,601,630.81 or 81.86%compared with the same period in the previous year, which was mainly due to the impact of a declinein the profitability of the invested unit, Huaxi Securities Co., Ltd.
Including: investment income from long-term equity investments under the equity method:
| Item | Current Period | Previous Period |
| Huaxi Securities Co., Ltd. | 4,109,114.62 | 54,493,747.57 |
| Luzhou Laojiao Postdoctoral Workstation Technology Innovation Co., Ltd. | -999,373.92 | -499,830.20 |
| Sichuan Development Liquor Investment Co., Ltd. | 2,657.73 | 5,159.39 |
| Sichuan Tongniang Baijiu Industry Technology Research Institute Co., Ltd. | -34,056.17 | 6,025.99 |
| CTS Luzhou Laojiao Cultural Tourism Development Co., Ltd. | 11,068,257.58 | 16,273,183.74 |
| Sichuan Tianfu Granary Liquor Industry Co., Ltd. | 389,485.18 | |
| Total | 14,536,085.02 | 70,278,286.49 |
Including: dividend income gained during the period of holding other equity instrument investment:
| Item | Current Period | Previous Period |
| North Chemical Industries Co., Ltd. | 78,177.75 | 78,177.75 |
| Guotai Junan Securities Co., Ltd. | 4,710,798.80 | 6,241,808.41 |
| Luzhou Bank Co., Ltd. | 3,905,280.00 | |
| China Tourism Group Duty Free Corporation Limited | 2,015,648.45 | 977,280.00 |
| Total | 10,709,905.00 | 7,297,266.16 |
7.47. Credit impairment loss
Unit: CNY
| Item | Current Period | Previous Period |
| Bad debt loss of accounts receivable | 704,797.18 | -489,912.75 |
| Bad debt loss of other receivables | 404,516.63 | 620,074.69 |
| Total | 1,109,313.81 | 130,161.94 |
7.48. Gains from disposal of assets
Unit: CNY
| Item | Current Period | Previous Period |
| Gains from disposal of non-current assets | 1,058,795.10 | -477,479.38 |
| Including: Gains from disposal of fixed assets | 1,058,795.10 | 223,832.22 |
| Gains from disposal of intangible assets | -875,599.70 | |
| Gains from disposal of use right assets | 174,288.10 | |
| Total | 1,058,795.10 | -477,479.38 |
7.49. Non-operating income
Unit: CNY
| Item | Current Period | Previous Period | The amount included in the extraordinary gains and losses of the current period |
| Compensation for default | 7,708,473.69 | 2,393,459.62 | 7,708,473.69 |
| Gains from damage retirement of non-current assets | |||
| Others | 856,276.18 | 12,086,059.36 | 856,276.18 |
| Total | 8,564,749.87 | 14,479,518.98 | 8,564,749.87 |
7.50. Non-operating costs
Unit: CNY
| Item | Current Period | Previous Period | The amount included in the extraordinary gains and losses of the current period |
| Donation | 3,617,355.00 | 4,171,120.00 | 3,617,355.00 |
| Losses from damage retirement of non-current assets | 3,177,543.69 | 1,164,068.35 | 3,177,543.69 |
| Others | 868,760.23 | 1,637,398.60 | 868,760.23 |
| Total | 7,663,658.92 | 6,972,586.95 | 7,663,658.92 |
7.51. Income tax expense
7.51.1. Statement of income tax expense
Unit: CNY
| Item | Current Period | Previous Period |
| Current period income tax | 2,463,970,373.02 | 2,041,614,849.97 |
| Deferred income tax | 406,591,115.54 | 343,744,666.15 |
| Total | 2,870,561,488.56 | 2,385,359,516.12 |
7.51.2. Adjustment for accounting profit and income tax expense
Unit: CNY
| Item | Current Period |
| Total profit | 10,916,820,514.95 |
| Income tax expenses determined by statutory/applicable tax rate | 2,729,205,128.74 |
| Impact from subsidiaries’ different tax rates | -119,188.46 |
| Impact from adjust for impact from income tax expense in previous period | 88,560,931.51 |
| Impact from non-taxable income | -12,313,396.55 |
| Impact from non-deductible costs, expenses and losses | 1,888,330.89 |
| Impact from deductible temporary difference or losses due to unrecognized deferred tax asset in current period | 17,188,300.70 |
| Income tax impact of expected pre-tax deductible amounts of restricted shares in future periods that are less than the recognized cost and expenses | 53,837,666.14 |
| Deduction impact of research and development costs | -7,686,284.41 |
| Income tax expense | 2,870,561,488.56 |
Other statementsNote: The income tax rate details are provided in Note 6. Taxes.
7.52. Other comprehensive income
Details in Note 7.35. Other comprehensive income.
7.53. Notes to the statement of cash flow
7.53.1. Cash related to operating activities
Cash received from other operating activities
Unit: CNY
| Item | Current Period | Previous Period |
| Recovery of saving deposits involving contract disputes | 200,000.00 | 332,468.26 |
| Government grants | 16,005,375.97 | 16,936,068.82 |
| Interest income from bank deposit | 335,265,300.54 | 385,402,604.30 |
| Others | 103,140,673.60 | 56,582,439.60 |
| Total | 454,611,350.11 | 459,253,580.98 |
Cash paid for other operating activities
Unit: CNY
| Item | Current Period | Previous Period |
| Cash paid for expenses | 1,392,511,609.29 | 1,185,339,540.00 |
| Cash paid to E-commerce platform as security deposit | 465,085.80 | |
| Total | 1,392,976,695.09 | 1,185,339,540.00 |
7.53.2. Cash related to investing activities
Cash received from significant investing activities
Unit: CNY
| Item | Current Period | Previous Period |
| Recovering the principal invested in held-for-trading financial assets | 2,060,000,000.00 | 1,100,000,000.00 |
| Total | 2,060,000,000.00 | 1,100,000,000.00 |
Cash paid for other investing activities
Unit: CNY
| Item | Current Period | Previous Period |
| Loss on forward exchange settlement | 17,362.71 | |
| Total | 17,362.71 |
Cash paid for significant investing activities
Unit: CNY
| Item | Current Period | Previous Period |
| Cash paid for purchasing long-term assets | 344,186,871.61 | 578,623,738.47 |
| Cash paid for purchasing held-for-trading financial assets | 660,000,000.00 | 200,000,000.00 |
| Total | 1,004,186,871.61 | 778,623,738.47 |
7.53.3. Cash related to financing activities
Cash paid for other financing activities
Unit: CNY
| Item | Current Period | Previous Period |
| Cash paid for rent of right-of-use assets | 4,291,469.02 | 1,117,175.97 |
| Cancellation of residual net assets enjoyed by minority shareholders by subsidiaries | 4,887,500.00 | |
| Cash paid for repurchasing restricted shares | 1,812,735.11 | |
| Registration fee for equity incentive stocks | 92.67 |
| Total | 10,991,704.13 | 1,117,268.64 |
Changes in liabilities arising from financing activities?Applicable □ N/A
Unit: CNY
| Item | Opening Balance | Increase in current period | Decrease in current period | Closing Balance | ||
| Cash change | Non-cash change | Cash change | Non-cash change | |||
| Long-term loans (including long-term loans due within one year) | 10,032,679,478.99 | 2,000,000,000.00 | 7,028,936.39 | 1,017,679,478.99 | 11,022,028,936.39 | |
| Bonds payable (including bonds payable due within one year) | 1,540,141,394.55 | 26,737,786.91 | 52,500,000.00 | 1,514,379,181.46 | ||
| Lease liabilities (including lease liabilities due within one year) | 27,470,420.36 | 14,246,628.95 | 4,291,469.02 | 70,722.94 | 37,354,857.35 | |
| Other payables (Repurchase obligations of restricted shares) | 616,743,610.59 | 1,812,735.11 | 257,292,487.50 | 357,638,387.98 | ||
| Total | 12,217,034,904.49 | 2,000,000,000.00 | 48,013,352.25 | 1,076,283,683.12 | 257,363,210.44 | 12,931,401,363.18 |
7.54. Supplementary information to statement of cash flow
7.54.1. Supplementary information to statement of cash flow
Unit: CNY
| Item | Current Period | Previous Period |
| 1. Reconciliation of net profit to cash flow from operating activities: | ||
| Net profit | 8,046,259,026.39 | 7,121,624,625.63 |
| Plus: Provision for asset impairment | -1,109,313.81 | -130,161.94 |
| Depreciation of fixed asset, oil and gas assets and productive biological assets | 336,899,433.68 | 291,902,202.19 |
| Depreciation of right-of-use assets | 4,581,615.90 | 5,971,160.71 |
| Amortization of intangible assets | 45,676,838.28 | 39,210,901.13 |
| Amortization of long-term deferred | 297,838.99 | 262,861.76 |
| expense | ||
| Losses from disposal of fixed assets, intangible assets and other long-term assets (Gains use “-”) | -1,058,795.10 | 477,479.38 |
| Losses from retirement of fixed assets (Gains use “-”) | ||
| Losses from change in fair value (Gains use “-”) | -33,256,967.84 | -32,781,678.42 |
| Financial expenses (Gains use “-”) | -124,274,752.55 | -125,783,791.43 |
| Losses on investments (Gains use “-”) | -15,422,563.74 | -85,024,194.55 |
| Decrease in deferred income tax assets (Increase uses “-”) | 420,177,708.63 | 350,308,835.48 |
| Increase in deferred income tax liabilities (Decrease uses “-”) | -13,586,593.09 | -6,554,217.73 |
| Decrease in inventories (Increase use “-”) | -732,279,804.13 | -953,413,761.15 |
| Decrease in operating receivables (Increase use “-”) | 1,934,769,539.42 | 1,792,662,781.41 |
| Increase in operating payables (Decrease use “-”) | -1,642,612,998.46 | -2,750,972,245.43 |
| Others | ||
| Net cash flows from operating activities | 8,225,060,212.57 | 5,647,760,797.04 |
| 2. Significant investing and financing activities not involving cash: | ||
| Conversion of debt into capital | ||
| Convertible corporate bonds due within one year | ||
| Fixed assets under financing lease | ||
| 3.Net change in cash and cash equivalents: | ||
| Closing balance of cash | 35,995,050,518.55 | 30,311,535,608.00 |
| Less: Opening balance of cash | 25,893,029,277.86 | 17,729,006,591.87 |
| Plus: Closing balance of cash equivalents | ||
| Less: Opening balance of cash equivalents | ||
| Net change in cash and cash equivalents | 10,102,021,240.69 | 12,582,529,016.13 |
7.54.2. Composition of cash and cash equivalent
Unit: CNY
| Item | Opening Balance | Closing Balance |
| 1. Cash | 35,995,050,518.55 | 25,893,029,277.86 |
| Including: Cash on hand | 24,230.74 | 24,059.24 |
| Unrestricted bank deposit | 35,941,194,833.67 | 25,868,408,012.31 |
| Other unrestricted cash and cash equivalents | 53,831,454.14 | 24,597,206.31 |
| 3. Closing balance of cash and cash equivalents | 35,995,050,518.55 | 25,893,029,277.86 |
7.54.3. Monetary funds not classified as cash and cash equivalents
Unit: CNY
| Item | Current Period | Previous Period | Reason |
| Other monetary funds | 10,000,000.00 | 10,000,000.00 | Bank cash deposits for L/G |
| Bank deposit | 94,715,340.26 | 21,982,447.95 | Provision for fixed deposit interest on an accrual basis |
| Bank deposit | 957,482.18 | Frozen fund by the court | |
| Other monetary funds | 992,930.88 | Restricted cash deposit in E-commerce platforms | |
| Total | 105,708,271.14 | 32,939,930.13 |
7.55. Notes to items of the statements of changes in owners' equityNotes to the name of “Other” of closing balance at the end of the previous year adjusted and theamount adjusted:
N/A
7.56. Foreign currency transactions
7.56.1. Foreign currency transactions
Unit: CNY
| Item | Closing Balance in Foreign Currency | Exchange Rate | Closing Balance in CNY |
| Cash at Bank and on Hand | 328,017,727.44 | ||
| Including: USD | 45,673,494.25 | 7.1268 | 325,505,858.82 |
| EUR | 328.05 | 7.6617 | 2,513.42 |
| HKD | 2,747,269.70 | 0.91268 | 2,507,378.11 |
| GBP | 39.94 | 9.0430 | 361.18 |
| AUD | 339.12 | 4.7650 | 1,615.91 |
| Accounts Receivable | 3,324,013.13 | ||
| Including: USD | 12,241.72 | 7.1268 | 87,244.29 |
| EUR | |||
| HKD | 3,546,444.36 | 0.91268 | 3,236,768.84 |
| Long-term Loans | |||
| Including: USD | |||
| EUR | |||
| HKD | |||
| Other Receivables | 161,678.92 | ||
| Including: HKD | 177,147.43 | 0.91268 | 161,678.92 |
| Accounts Payable | 556,441.94 | ||
| Including: USD | 7,655.50 | 7.1268 | 54,559.22 |
| HKD | 549,899.99 | 0.91268 | 501,882.72 |
| Other Payables | 10,977,566.24 | ||
| Including: HKD | 12,027,836.96 | 0.91268 | 10,977,566.24 |
| Non-current liabilities due within one year | 4,060,570.25 | ||
| Including: USD | 65,549.25 | 7.1268 | 467,156.39 |
| HKD | 3,937,124.86 | 0.91268 | 3,593,413.86 |
| Lease liabilities | 7,031,357.55 | ||
| Including: USD | 111,964.84 | 7.1268 | 797,951.02 |
| HKD | 6,829,783.20 | 0.91268 | 6,233,406.53 |
7.56.2. Description of the foreign business entity, including the important foreign businessentity, shall disclose its main foreign business place, bookkeeping standard currency andselection basis, and shall also disclose the reason for the change of the bookkeepingstandard currency? Applicable □ N/A
| Company | Operation site | Bookkeeping currency | Choosing Reason |
| Luzhou Laojiao International Development (Hong Kong) Co., Ltd. | Hong Kong, China | HKD | Currency in the registration place |
| Luzhou Laojiao Commercial Development (North America) Co., Ltd. | USA | USD | Currency in the registration place |
| Mingjiang Co., Ltd. | USA | USD | Currency in the registration place |
7.57. Lease
7.57.1. The Company as lessee
?Applicable □ N/AVariable lease payments that are not covered in the measurement of the lease liabilities
□Applicable ? N/A
Simplified short-term lease or lease expense for low-value assets?Applicable □ N/AThe Company uses a simplified approach for short-term leases, where the right-of-use assets andlease liabilities are not recognised. Short-term leases accounted for as expenses in the current periodare listed below:
| Item | H1 2024 | H1 2023 |
| Short-term lease expenses recognised as current profit or loss in the current period using the simplified approach | 4,675,941.94 | 4,541,156.32 |
| Total cash outflows related to leases | 8,967,410.96 | 5,658,332.29 |
Note: The leased assets of the Company include the buildings and constructions and the land useright involved in operation. The leasing period of land use right is normally 15-30 years and the leasecontract of land use right generally includes the renewal option clause.
Circumstances involving sale and leaseback transactionsN/A
7.57.2. The Company as lessor
Operating leases with the Company as lessor? Applicable □ N/A
Unit: CNY
| Item | Rental income | Of which: income related to variable lease payments not included in lease receipts |
| Income from rental of buildings, equipment, etc. | 4,992,164.05 | |
| Total | 4,992,164.05 |
Finance leases with the Company as lessor
□Applicable ? N/A
Undiscounted lease receipts for each of the next five years
□Applicable ? N/A
7.57.3. Recognition of gain or loss on sales under finance leases with the company as amanufacturer or dealer
□Applicable ? N/A
7.58. Others
N/A
8. Research and Development Expenditure
Unit: CNY
| Item | Current Period | Previous Period |
| Material consumption | 17,183,933.44 | 10,105,796.74 |
| Research and development and technical services | 11,932,469.05 | 11,490,697.53 |
| Share payment expense | 6,131,957.28 | 8,193,497.76 |
| Other indirect costs | 39,780,343.08 | 33,124,706.96 |
| Total | 75,028,702.85 | 62,914,698.99 |
| Of which: Expensed research and development expenditure | 75,028,702.85 | 62,914,698.99 |
9. Changes in consolidated scope
9.1. Business combination not under common control
9.1.1. Business combination not under common control during current periodThere is no business combination not under common control during current period.
9.2. Business combination under common control
9.2.1. Business combination under common control during current periodThere is no business combination under common control during current period.
9.3. Reverse purchase
The basic information of the transaction, the basis of the transaction constitutes the reverse purchase,whether the assets and liabilities retained by the listed company constitute the business and its basis,the determination of the merger cost, and the adjustment of the equity amount and its calculationaccording to the equity transaction:
There is no reverse purchase during current period.
9.4. Disposing subsidiaries
Whether there is a situation of losing control after disposing the investment in the subsidiary onlyonce
□ Yes ?No
Whether there is a situation of disposing the investment in the subsidiary through several transactionsstep by step and losing control during the period
□ Yes ?No
9.5. Consolidated scope changes due to other reasons
Explain other reasons for changing consolidated scope (such as establishing a new subsidiary,liquidating a subsidiary) and its related situation:
No
9.6. Other
No
10. Interests in other entities
10.1. Interests in subsidiaries
10.1.1. Group composition
Unit: CNY
| Name of Subsidiaries | Registered capital | Major business location | Place of registration | Nature of business | Shareholding Proportion | Acquisition method | |
| Direct | Indirect | ||||||
| Luzhou Laojiao Brewing Co., Ltd. | 310,500,000.00 | Luzhou | Luzhou | Baijiu manufacture and sales | 100.00% | Investment | |
| Luzhou Red Sorghum Modern Agricultural Development Co., Ltd. | 10,000,000.00 | Luzhou | Luzhou | Agricultural product planting and sales | 60.00% | Business combination under common control | |
| Luzhou Laojiao Sales Co., Ltd. | 100,000,000.00 | Luzhou | Luzhou | Baijiu sales | 100.00% | Investment | |
| Luzhou Laojiao Nostalgic Liquor Marketing Co., Ltd. | 5,000,000.00 | Luzhou | Luzhou | Baijiu sales | 100.00% | Investment | |
| Luzhou Laojiao Selected Supply Chain Management Co., Ltd. | 10,000,000.00 | Luzhou | Luzhou | Baijiu sales | 100.00% | Investment | |
| Guangxi Luzhou Laojiao Imported Liquor Industry Co., Ltd. | 10,000,000.00 | Qinzhou | Qinzhou | Red wine production and sales | 100.00% | Investment | |
| Luzhou Dingli Liquor Industry Co., Ltd. | 5,000,000.00 | Luzhou | Luzhou | Baijiu sales | 100.00% | Investment | |
| Luzhou Laojiao Qiankun Cheteau Custom Liquor Sales Co., Ltd.2 | 5,000,000.00 | Luzhou | Luzhou | Baijiu sales | 100.00% | Investment | |
| Luzhou Laojiao New Liquor Industry Co., Ltd. | 5,000,000.00 | Luzhou | Luzhou | Baijiu sales | 100.00% | Investment | |
| Luzhou Laojiao I & E Co., Ltd. | 3,000,000.00 | Luzhou | Luzhou | Liquor import and export trade | 100.00% | Investment | |
| Luzhou Laojiao Boda Liquor Industry Marketing Co., Ltd. | 120,000,000.00 | Luzhou | Luzhou | Baijiu sales | 75.00% | Investment | |
| Luzhou Laojiao Fruit Wine Industry Co., Ltd. | 50,000,000.00 | Luzhou | Luzhou | Fruit wine sales | 41.00% | Investment | |
| Mingjiang Co., Ltd. (USD) | 6,000,000.00 | America | America | Baijiu sales | 54.00% | Investment | |
| Luzhou Laojiao International Trade (Hainan) Co., Ltd. | 20,000,000.00 | Hainan | Hainan | Food import and export | 100.00% | Investment | |
| Luzhou Pinchuang Technology Co., Ltd. | 50,000,000.00 | Luzhou | Luzhou | Technology development and service | 100.00% | Investment | |
| Luzhou Laojiao | 10,000.00 | Hong Kong | Hong Kong | Liquor sales | 55.00% | Investment |
| International Development (Hong Kong) Co., Ltd. (HKD) | |||||||
| Luzhou Laojiao Commercial Development (North America) Co., Ltd. (USD) | 500,000.00 | America | America | Business development | 100.00% | Investment | |
| Luzhou Laojiao Electronic Commerce Co., Ltd. | 60,000,000.00 | Luzhou | Luzhou | Liquor sales | 90.00% | Investment | |
| Luzhou Laojiao Whitail Liquor Industry Co., Ltd. | 10,000,000.00 | Luzhou | Luzhou | Liquor sales | 35.00% | Investment | |
| Luzhou Laojiao Health Liquor Industry Co., Ltd. | 10,000,000.00 | Luzhou | Luzhou | Health care liquor manufacture and sales | 100.00% | Business combination under common control | |
| Luzhou Laojiao Health Sales Co., Ltd. | 5,000,000.00 | Luzhou | Luzhou | Health care liquor sales | 100.00% | Business combination under common control | |
| Luzhou Laojiao New Retail Co., Ltd. | 50,000,000.00 | Luzhou | Luzhou | Baijiu sales | 40.00% | 60.00% | Investment |
| Luzhou Laojiao Technology Innovation Co., Ltd. | 500,000,000.00 | Chengdu | Chengdu | Technology development and service | 40.00% | 60.00% | Investment |
10.1.2. Important non-wholly-owned subsidiaries
Unit: CNY
| Name of subsidiary | Proportion of share holdings of non-Controlling shareholders | Gains and losses attributable to non-Controlling shareholders during current period | Dividends paid to non-controlling shareholders during current period | Closing balance of non-controlling shareholders interest |
| Luzhou Laojiao Boda Liquor Industry Marketing Co., Ltd. | 25.00% | 22,346,879.34 | 84,190,751.63 |
10.1.3. Major financial information of important non-wholly-owned subsidiaries
Unit: CNY
| Name | Closing Balance | Opening Balance |
| of subsidiary | 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 |
| Luzhou Laojiao Boda Liquor Industry Marketing Co., Ltd. | 487,211,867.70 | 487,211,867.70 | 150,448,861.19 | 150,448,861.19 | 569,377,544.62 | 569,377,544.62 | 322,002,055.47 | 322,002,055.47 |
Unit: CNY
| Name of subsidiary | Current Period | Previous Period | ||||||
| Operating revenue | Net profit | Total comprehensive income | Operating cash flow | Operating revenue | Net profit | Total comprehensive income | Operating cash flow | |
| Luzhou Laojiao Boda Liquor Industry Marketing Co., Ltd. | 644,192,636.94 | 89,387,517.36 | 89,387,517.36 | 1,123,016.74 | 175,125,521.07 | 23,848,576.35 | 23,848,576.35 | 22,046,023.55 |
10.1.4. Significant restrictions on using the assets and liquidating the liabilities of theCompanyN/A
10.1.5. Financial support or other supports provided to structural entities incorporated into thescope of consolidated financial statementsN/A
10.2. The transaction of the company with its owner's equity share changing butthe company still controls the subsidiary
10.2.1. Note to the owner's equity share changed in subsidiary
N/A
10.2.2. The transaction’s influence on the equity of non-controlling interests and the owner'sequity attributable to the company as the parentN/A
10.3. Interests in joint ventures and associates
10.3.1. Important joint ventures and associates
| Name of joint venture/associates | Major business location | Place of registration | Business nature | Shareholding proportion | Accounting Method | |
| Direct | Indirect | |||||
| Important joint ventures: none | ||||||
| Important associates: | ||||||
| Huaxi Securities Co., Ltd. | Chengdu, Sichuan | Chengdu, Sichuan | Securities | 10.39% | Equity method | |
Notes to holding proportion in joint venture or associated enterprise different from voting proportion:
Basis of holding less than 20% of the voting rights but has a significant impact or holding 20% ormore voting rights but does not have a significant impact:
The Company has the substantive decision-making power, so the Company still has significantinfluence on Huaxi Securities.
10.3.2. Major financial information of important associates
Unit: CNY
| Closing Balance/Amount in current period | Opening Balance/Amount in previous period | |
| Huaxi Securities Co., Ltd. | Huaxi Securities Co., Ltd. | |
| Current assets | 77,603,293,812.01 | 80,257,215,749.71 |
| Non-current assets | 6,587,840,741.53 | 8,633,260,818.24 |
| Total assets | 84,191,134,553.54 | 88,890,476,567.95 |
| Current liabilities | 42,438,842,428.27 | 47,013,859,718.97 |
| Non-current liabilities | 18,882,548,369.66 | 19,074,441,893.35 |
| Total liabilities | 61,321,390,797.93 | 66,088,301,612.32 |
| Non-controlling shareholder interest | 15,704,631.42 | 17,277,841.64 |
| Shareholder interest attributable to parent company | 22,854,039,124.19 | 22,784,897,113.99 |
| Share of net assets calculated based on shareholding proportion | 2,376,166,376.21 | 2,363,882,349.03 |
| Adjusted | ||
| --Goodwill | ||
| --Unrealized profits of internal transactions | ||
| --Others | 167,466,735.90 | 167,466,735.90 |
| Book value of equity investments in associate companies | 2,541,828,310.04 | 2,535,630,372.30 |
| Fair value of equity investments in associate companies that have public quote | 1,797,957,238.96 | 2,117,169,677.44 |
| Operating revenue | 1,413,115,470.65 | 2,021,251,360.10 |
| Net profit | 37,975,534.90 | 522,815,192.43 |
| Net profit from discontinued operation | ||
| Other comprehensive income | 160,843,265.08 | 22,891,885.56 |
| Total comprehensive income | 198,818,799.98 | 545,707,077.99 |
| Dividends from associate companies this year | 0.00 | 0.00 |
10.3.3. Financial information summarized of unimportant joint ventures and associatecompanies
Unit: CNY
| Closing Balance/Amount in current period | Opening Balance/Amount in previous period | |
| Joint ventures: | ||
| Total following items calculated on the basis of shareholding proportion | ||
| Associate companies: | ||
| Total book value of investments | 185,756,308.01 | 172,624,461.20 |
| Total following items calculated on the basis of shareholding proportion | ||
| --Net profit | -4,006,494.78 | 2,204,555.93 |
| -- Total comprehensive income | -4,006,494.78 | 2,204,555.93 |
Other statements:
Unimportant associate companies refer to Luzhou Laojiao Postdoctoral Workstation TechnologyInnovation Co., Ltd., Sichuan Development Liquor Investment Co., Ltd., Sichuan Tongniang BaijiuIndustry Technology Research Institute Co., Ltd., Sichuan Tianfu Granary Liquor Industry Co., Ltd.and CTS Luzhou Laojiao Cultural Tourism Development Co., Ltd.
10.3.4. Notes to the significant restrictions on the ability of joint ventures or associatecompanies to transfer funds to the CompanyNone
10.3.5. The excess loss of joint ventures or associate companies
None
10.3.6. The unrecognized commitment related to investment to joint venturesNone
10.3.7. Contingent liabilities related to investment to joint ventures or associate companiesNone
11. Government grants
11.1. Government grants recognized at the end of the reporting period at theamount receivable
□Applicable ? N/A
Reasons for failing to receive government grants in the estimated amount at the estimated point intime
□Applicable ? N/A
11.2. Liability items involving government grants
?Applicable □ N/A
Unit: CNY
| Item | Opening Balance | Increase in current period | Non-operating income in current period | Other income in current period | Other changes | Closing Balance | Related to assets/ income |
| Deferred income | 27,772,083.74 | 2,560,000.00 | 5,412,230.73 | 24,919,853.01 | Related to assets | ||
| Total | 27,772,083.74 | 2,560,000.00 | 5,412,230.73 | 24,919,853.01 |
11.3. Government grants recognized as current profit or loss?Applicable □ N/A
Unit: CNY
| Item | Amount in current period | Amount in previous period |
| Other income | 18,852,624.09 | 21,166,337.88 |
| Non-operating revenue |
| Total | 18,852,624.09 | 21,166,337.88 |
Other statements:
The detailed list of liability items related to government grants can be found in Note 7.31.2.The specific details of government grants included in current profit or loss are provided in Note 7.44.
12. Risks related to financial instruments
12.1. Various types of risks arising from financial instrumentsThe Company's primary financial instruments include monetary capital, trading financial assets,accounts receivable, receivables financing, receivables other than tax refundable, other equityinstruments, held-for-trading financial liabilities, bills payable, accounts payable, other payables, leaseliabilities, some other current liabilities and loans. A detailed description of each financial instrument isset out in Note V and notes to the Consolidated Financial Statement.Risks related to these financial instruments, and risk management policies the Company has adoptedto reduce these risks are described as follows. The Company management manages and monitors therisk exposure to ensure the above risks are controlled in a limited scope.The Company adopts sensitivity analysis technology to analyze the possible impact of reasonable andpossible changes of risk variables on current profits/losses or shareholders' equity. As any risk variablerarely changes in isolation, and the correlation between variables will have a significant effect on thefinal impact amount of the change of a risk variable, the following content is based on the assumptionthat the change of each variable is independent.Risk management objective: The Company strikes an appropriate balance between risk and return, andstrives to minimize the negative impact of risk on the Company's operating performance and maximizethe interests of shareholders and other equity investors.Risk management policy: The Board of Directors shall be responsible for planning and establishing arisk management framework, formulating risk management policies and related guidelines, andsupervising the implementation of risk management measures. The Risk Management Committee shallcarry out risk management through close collaboration (including the identification, evaluation andavoidance of relevant risks) with other business units of the Company in accordance with the policiesapproved by the Board of Directors. The internal audit department shall conduct regular audits on riskmanagement controls and procedures and report the results to the Audit Committee.The Company has formulated risk management policies to identify and analyze the risks it faces,clarifying specific risks and covering many aspects such as credit risk, liquidity risk and market riskmanagement. On a regular basis, the Company evaluates the specific marketing environment andvarious changes in the Company's business operations to determine whether any risk managementpolicy and system should be updated. The Company diversifies the risks to financial instrumentsthrough appropriately diversified investments and business portfolios, and reduces the risk ofconcentration in any single industry, specific geographic area or specific counterparty by formulatingappropriate risk management policies.
12.1.1. Credit risk
Credit risk refers to the risk that one party to a financial instrument cannot perform its obligations,causing financial losses to the other party. The Company only trades with recognized, reputable, andlarge third parties. In accordance with the Company's policy, the terms of sale with customers arebased on transactions of payment before delivery, with only a small amount of credit transactions, andcredit review for all customers who require credit to trade. In addition, the Company continuouslymonitors and controls the balance of the receivables to ensure that the Company does not facesignificant bad debt risks. In addition, the Company makes full provision for expected credit losses ateach balance sheet date based on the collection of receivables. Therefore, the Company'smanagement believes that the Company's credit risk has been greatly reduced.The Company's working capital is deposited in banks with high credit rating, so the credit risk of workingcapital is low.The Company's risk exposures are spread across multiple contract parties and customers in multiplegeographies, with customers in the commerce industry in addition to the alcohol distribution industry(the main industry). No systemic risk has been identified in the relevant industries. Therefore, theCompany has no significant credit concentration risk. As at 30 June 2024, the balance of the top fivecustomers of the Company's accounts receivable amounted to CNY 4,125,500, accounting for 88.61%of the balance of the Company's accounts receivable.
12.1.2. Liquidity risk
Liquidity risk refers to the risk unable to obtain sufficient funds in time to meet business developmentneeds or to repay debts due and other payment obligations. The Company has sufficient workingcapital. The liquidity risk is extremely small. The Company's objective is to use a variety of financinginstruments such as bank clearing, bank loans and issuing corporate bonds to maintain a balancebetween financing sustainability and flexibility. As at 30 June 2024, the Company has been able tomeet its own continuing operation requirements through the use of cash flow from operations.The analysis of the financial liabilities held by the Company based on the maturity period of theundiscounted remaining contractual obligations is as follows:
| Item | Closing Balance | |||||
| Book value | Contract amount not discounted | Within 1 year | 1-2 years | 2-3 years | Over 3 years | |
| Accounts payable | 2,162,821,537.64 | 2,162,821,537.64 | 2,162,821,537.64 | |||
| Other payable | 849,638,890.46 | 849,638,890.46 | 849,638,890.46 | |||
| Non-current liabilities due within one year | 1,555,342,077.23 | 1,555,342,077.23 | 1,555,342,077.23 | |||
| Long- | 10,990,000,000. | 10,990,000,000. | 8,260,500,000.0 | 1,509,500,000.0 | 1,220,000,000.0 | |
| term loans | 00 | 00 | 0 | 0 | 0 | |
| Lease liabilities | 28,420,897.97 | 31,516,780.78 | 9,691,153.91 | 7,456,393.91 | 14,369,232.96 | |
| Total | 15,586,223,403.30 | 15,589,319,286.11 | 4,567,802,505.33 | 8,270,191,153.91 | 1,516,956,393.91 | 1,234,369,232.96 |
12.1.3. Market risk
① Foreign exchange risk
The foreign exchange risk refers to the risk of loss due to exchange rate changes. Apart from the threesubsidiaries of the Company which make purchases and sales in USD and HKD, the other majorbusiness activities are denominated and settled in CNY. The Company closely monitors the impact ofexchange rate fluctuations on its foreign exchange risk, and actively tracks the scale of foreign currencytransactions, as well as foreign currency assets and liabilities, to minimise exposure to exchange raterisks. In order to hedge risks in the foreign exchange market, prevent adverse effects from significantfluctuations in exchange rates, control financial expenses and reduce exchange rate risks in overseasoperations, the Company's subsidiary, Hong Kong Company, has engaged in forward foreign exchangecontract transactions. As at 30 June 2024, the Company's assets and liabilities are mainly in CNYbalance. At present, the Company's management considers the impact of changes in foreign exchangerisk on the Company's financial statements to be less.
② Rate risk
The Company's interest rate risk mainly arises from the long-term loans from banks. Financial liabilitiesbased on the floating interest rate will cause the cash flow interest rate risk to the Company, andfinancial liabilities based on the fixed interest rate the fair value interest rate risk. The Company willdetermine the corresponding proportion between the contracts with fixed interest rate and those withfloating interest rate in combination with current market condition.
③ Other price risks
Other price risk refers to the risk of fluctuation caused by market price changes other than foreignexchange risk and interest rate risk, whether these changes are caused by factors related to a singlefinancial instrument or its issuer or all similar financial instruments traded in the market. Other pricerisks faced by the Company mainly come from held-for-trading financial assets and investments in otherequity instruments measured at fair value.
13. Fair value disclosure
13.1. Closing fair value of assets and liabilities measured at fair value
Unit: CNY
| Item | Closing fair value | |||
| Level 1 | Level 2 | Level 3 | Total | |
| 1. Continuous measurement at fair value | -- | -- | -- | -- |
| 1.1 Held-for-trading financial assets | 697.84 | 697.84 | ||
| 1.1.1 Financial assets measured at | 697.84 | 697.84 | ||
| fair value with their changes included into current profits/losses | ||||
| 1.1.1.4 Forward exchange | 697.84 | 697.84 | ||
| 1.3 Investments in other equity instruments | 302,114,982.30 | 33,257,910.65 | 335,372,892.95 | |
| 1.6 Accounts receivable financing | 4,088,985,516.61 | 4,088,985,516.61 | ||
| Total assets continuously measured at fair value | 302,114,982.30 | 4,122,244,125.10 | 4,424,359,107.40 | |
| 2. Discontinuous measurement at fair value | -- | -- | -- | -- |
13.2. Determination basis of the market value of items measured continuously anddiscontinuously within Level 1 of the fair value hierarchyThe listed companies in mainland China determine the fair value of other equity instrument investmentaccording to the closing price on the last trading day of Shenzhen Stock Exchange or Shanghai StockExchange at the period-end. The companies listed in Hong Kong determine the fair value of otherequity instrument investment according to the closing price of Hong Kong Dollar on the last trading dayof Hong Kong Stock Exchange at the period-end and the median price of CNY exchange rate disclosedon the same day by China Foreign Exchange Trade System.
13.3. Valuation technique adopted and nature and amount determination ofimportant parameters for continuously and discontinuously within Level 2 of the fairvalue hierarchyNone
13.4. Valuation technique adopted and nature and amount determination ofimportant parameters for continuously and discontinuously within Level 3 of the fairvalue hierarchyTrading financial assets: The fair value is measured based on market quotations for similar types ofinstruments.
Accounts receivable financing: As the timing and price of bills discounted may not be reliably estimateddue to the short maturity of the bills all being less than one year and the endorsement of the negotiablebills being valued at book value, the Company measures the bills receivable at their book value as areasonable estimate of fair value.
Other equity instrument investment: Due to no significant changes in business environment, business
condition and financial situation of invested companies, the Company shall measure the fair valueaccording to the lower one between investment cost and the share of net assets enjoyed by investedcompanies on the base date as the reasonable estimation.
13.5. Continuous fair value measurement items at level 3, adjustment between thebeginning carrying value and the ending carrying value and sensitivity analysis onunobservable parametersNone
13.6. Explain the reason for conversion and the policy governing when theconversion happens if conversion happens among continuous fair valuemeasurement items at different levelNone
13.7. Changes in valuation techniques in the reporting period and reasons for thechangesNone
13.8. Fair value of financial assets and liabilities not measured at fair valueNone
14. Related parties and related party transactions
14.1. The parent company of the Company
| Parent company | Registration place | Business nature | Registered capital | Shareholding proportion by the parent company | Voting rights proportion by the parent company |
| Luzhou Laojiao Group Co., Ltd. | Luzhou, Sichuan | Investment and asset management | 2,798,818,800.00 | 25.97% | 50.83% |
Statements for situation of parent company:
The reason for the inconsistency between the shareholding proportion and voting rights proportion bythe parent company is that on 23 May 2024, Laojiao Group and XingLu Investment Group renewedagain the concerted action agreement which is valid as of 1 June 2024 and ends on 31 May 2027.The agreement: when the parties in deal with the Company’s business development and makedecisions by shareholders meeting and board of directors according to the company law and otherrelevant laws and regulations and the articles of association, the parties should adopt the consistentactions. During the effective period of this agreement, before any party submits proposals involvingthe major issues of the Company's business development to the shareholders meeting or exercisethe voting rights at the shareholders meeting and the board of directors, the internal coordination forrelevant proposals and voting events shall be conducted by persons acting in concert. If there are
different opinions, it will be subject to Laojiao Group’s opinion.The nature of parent company: Limited liability company (state-owned); Registration place: AiRentang Square, China Baijiu Golden Triangle Liquor Industry Park, Luzhou, Sichuan Province;Business Scope: General project: Social economy consulting services; business managementconsulting; financial consulting; business headquarters management; import and export agency; tradebrokerage; crops planting services; trees planting operation; elder care services; tourismdevelopment project planning and consulting; technical agency services; engineering andtechnological research and experimental development; display device manufacturing; supply chainmanagement services; technical services, technical development, technical consulting, technicalcommunication, technical transfer, and technical promotion; domestic freight transport agency; equityfund-invested asset management services, passenger ticket agent and business agency service. Itshall also include licensed projects (business activities can be carried out legally and independentlywith business license in addition to projects that must be approved by law): Agency bookkeeping;career intermediary activities; food production; food sales; medical services. (business activities thatrequire approval in accordance with laws can be carried out upon approval of relevant authorities,and the specific business projects shall be subject to the approval document or license of relevantdepartments)
The final control party of the Company is SASAC of Luzhou.
14.2. Subsidiaries of the Company
For details please see Note 10.1. Interests in subsidiaries.
14.3. Joint ventures and associates of the Company
For details please see Note 10.3. Interests in joint ventures and associates.Other statementsThere are no other joint ventures or associates that have related party transactions with the Companyin the current period or in the previous period and result in balance.
14.4. Other related party of the Company
| Name of Other Related Party | Relationship with the Company |
| Luzhou Jiachuang Liquor Supply Chain Management Co., Ltd. | The same parent company |
| Sichuan Lianzhong Supply Chain Service Co., Ltd. | The same parent company |
| Guangzhou Zhongying Gongyuan Energy Saving Technology Co., Ltd. | Sub-subsidiary of parent company |
| Luzhou Yuanhai Lianzhong Supply Chain Co., Ltd. | Sub-subsidiary of parent company |
| Luzhou Sanrenxuan Liquor Industry Co., Ltd. | Joint venture of parent company |
| CTS Luzhou Laojiao Cultural Tourism Development Co., Ltd. | Joint venture |
| Luzhou XingLu Water (Group) Co., Ltd. | Subsidiary of the second largest shareholder |
| Luzhou XingLu Property Management Co., Ltd. | Subsidiary of the second largest shareholder |
| Luzhou Public Transport Group Co., Ltd. | Subsidiary of the second largest shareholder |
| Sichuan Meihe Winery Industry Co., Ltd. | Minority shareholder of the subsidiary Fruit Wine Industry |
| Other subsidiaries of Luzhou Laojiao Group Co., Ltd. | Other subsidiary of parent company |
| Other subsidiaries of Luzhou XingLu Investment Group Co., Ltd. | Other subsidiary of the second largest shareholder |
14.5. Related transactions
14.5.1. Related transactions of purchase and sales of goods / rendering and receipt ofservicesTable of purchase of goods / receipt of services
Unit: CNY
| Name of Related Party | Transaction | Amount in current period | Approved trading amount | Whether over approved trading amount | Amount in previous period |
| Receipt of services: | |||||
| Luzhou XingLu Investment Group Co., Ltd. and its other subsidiaries | Property service, advertising service, etc. | 12,009,761.14 | 13,051,954.87 | ||
| Laojiao Group and its other subsidiaries | Training, accommodation, warehousing, transportation services and property costs, etc. | 28,060,346.21 | 24,310,894.35 | ||
| CTS Luzhou Laojiao Cultural Tourism Development Co., Ltd. | Conference fees, travel service fee, etc. | 756,487.33 | 4,694,551.04 | ||
| Purchase of goods: | |||||
| Laojiao Group and its other subsidiaries | Raw materials, water, power, etc. | 173,569,090.18 | 92,192,358.30 | ||
| Luzhou XingLu Investment Group Co., Ltd. and its other subsidiaries | Gas, water | 8,014,683.80 | 7,936,512.69 | ||
| Total | 222,410,368.66 | 142,186,271.25 |
Table of sales of goods and rendering of service
Unit: CNY
| Name of Related Party | Transaction | Amount in current period | Amount in previous period |
| Sales of goods: | |||
| Laojiao Group and its subsidiaries | Liquor, etc. | 6,239,724.87 | 25,081,222.00 |
| CTS Luzhou Laojiao Cultural Tourism Development Co., Ltd. | Liquor | 44,376,913.68 | 36,413,711.34 |
| Luzhou Sanrenxuan Liquor Industry Co., Ltd. | Liquor | 5,106,000.00 | 1,572,136.80 |
| Sichuan Tianfu Granary Liquor Industry Co., Ltd. | Liquor | 1,532,509.47 | |
| Total | 57,255,148.02 | 63,067,070.14 |
14.5.2. Related party leasing
The Company as lessor:
Unit: CNY
| Name of lessee | Type of leased asset | Leasing income recognized during current period | Leasing income recognized during previous period |
| Laojiao Group and its subsidiaries | House lease | 2,644,640.00 | 1,070,040.00 |
| Total | 2,644,640.00 | 1,070,040.00 |
The Company as lessee:
Unit: CNY
| Name of lessor | Type of assets leased | Rental expenses of short-term lease simplified treated and low-value asset lease (if applicable) | Variable lease payments not included in the measurement of lease liabilities (if applicable) | Paid rent | Income expense of lease liabilities undertaken | Increased use right assets | |||||
| Amount in current period | Amount in previous period | Amount in current period | Amount in previous period | Amount in current period | Amount in previous period | Amount in current period | Amount in previous period | Amount in current period | Amount in previous period | ||
| Laojiao Group and its subsidiaries | House lease | 1,751,897.99 | 446,328.00 | ||||||||
14.5.3. Key management compensation
Unit: CNY
| Item | Amount in current period | Amount in previous period |
| Key management compensation | 3,494,377.65 | 3,760,964.30 |
14.5.4. Other related transactions
N/A
14.6. Receivables and payables of related parties
14.6.1. Receivables
Unit: CNY
| Item | Related party | Closing Balance | Opening Balance | ||
| Book value | Provision for bad debt | Book value | Provision for bad debt | ||
| Prepayment | Sichuan Meihe Winery Industry Co.,Ltd. | 2,961,479.50 | 2,961,479.50 | ||
| Prepayment | CTS Luzhou Laojiao Cultural Tourism Development Co., Ltd. | 128,736.00 | 518,886.00 | ||
| Prepayment | Luzhou XingLu Water (Group) Co., Ltd. | 808,408.73 | 705,446.15 | ||
| Prepayment | Luzhou Laojiao Group Co., Ltd. | 4,087,461.73 | 3,522,751.07 | ||
| Prepayment | Luzhou Public Transport Group Co., Ltd. | 126,001.64 | |||
| Other receivables | CTS Luzhou Laojiao Cultural Tourism Development Co., Ltd. | 90,204.10 | 4,510.21 | ||
| Other receivables | Luzhou Laojiao Innovation Industry Holdings Co., Ltd. | 267,996.88 | 13,399.84 | ||
14.6.2. Payables
Unit: CNY
| Item | Related party | Closing Balance | Opening Balance |
| Accounts payable | Luzhou Yuanhai Lianzhong Supply Chain Co., Ltd. | 139,654.07 | 109,200.00 |
| Accounts payable | Sichuan Lianzhong Supply Chain Service Co., Ltd. | 12,690,605.12 | 10,583,919.37 |
| Accounts payable | Luzhou Public Transport Group Co., Ltd. | 259,164.61 | |
| Accounts payable | Luzhou Laojiao Group Co., Ltd. | 495,394.00 | |
| Accounts payable | Luzhou Laojiao Property Service Co., Ltd. | 1,966.54 | |
| Accounts payable | Shenzhen Mingxincheng Lighting Technology Co., Ltd. | 24,380.65 | |
| Contractual liabilities (tax inclusive) | Sichuan Lianzhong Supply Chain Service Co., Ltd. | 87,877.90 | 2,508.09 |
| Contractual liabilities (tax inclusive) | CTS Luzhou Laojiao Cultural Tourism Development Co., Ltd. | 72,051,807.56 | 13,933,613.22 |
| Contractual liabilities (tax inclusive) | APTCC | 1,309,287.97 | |
| Contractual liabilities (tax | Sichuan Tianfu Granary | 1,367,490.53 |
| inclusive) | Liquor Industry Co., Ltd. | ||
| Contractual liabilities (tax inclusive) | Luzhou Laojiao Innovation Industry Holdings Co., Ltd. | 14,463,000.00 | |
| Contractual liabilities (tax inclusive) | Luzhou Sanrenxuan Liquor Industry Co., Ltd. | 2,553,000.00 | |
| Contractual liabilities (tax inclusive) | Luzhou Jiachuang Liquor Supply Chain Management Co., Ltd. | 2,135.99 | |
| Other payables | Sichuan Development Liquor Investment Co., Ltd. | 4,494,000.00 | 4,494,000.00 |
| Other payables | Luzhou Sanrenxuan Liquor Industry Co., Ltd. | 300,000.00 | 150,000.00 |
| Other payables | Sichuan Lianzhong Supply Chain Service Co., Ltd. | 46,081,420.50 | 37,911,448.00 |
| Other payables | Luzhou Yuanhai Lianzhong Supply Chain Co., Ltd. | 50,000.00 | 50,000.00 |
| Other payables | CTS Luzhou Laojiao Cultural Tourism Development Co., Ltd. | 1,350,000.00 | 1,050,000.00 |
| Other payables | Luzhou Xinglu Property Management Co., Ltd. | 154,920.20 | 154,920.20 |
| Other payables | Luzhou Laojiao Property Service Co., Ltd. | 30,020.58 | |
| Other payables | Luzhou Lingang Investment Group Co., Ltd. | 100,000.00 | |
| Other payables | APTCC | 150,000.00 | |
| Other payables | Sichuan Tianfu Granary Liquor Indusry Co., Ltd. | 100,000.00 |
14.7. Commitments of the related parties
None
15. Stock payment
15.1. The overall situation of share-based payments
? Applicable □ N/A
Unit: CNY
| Type of granting object | Granted in the Current Period | Exercised in the Current Period | Unlocked in the Current Period | Invalid in the Current Period | ||||
| Number | Amount | Number | Amount | Number | Amount | Number | Amount | |
| N/A | 2,734,640 | 410,989,045.60 | ||||||
| Total | 2,734,640 | 410,989,045.60 | ||||||
Outstanding stock options or other equity instruments at the end of the reporting period
□Applicable ? N/A
Other statements
Note 1: At the 12th Meeting of the 10th Board of Directors of the Company held on 29 December 2021,the Proposal on the Grant of Restricted Shares to Awardees was reviewed and approved and it wasagreed to grant 6,928,600 restricted shares to 441 incentive targets for the first time at CNY 92.71 pershare with 29 December 2021 as the grant date.According to the incentive plan, its validity period lasts from the date of registration for the grant ofrestricted shares until all restricted shares are lifted from restricted sales or repurchased and retired, fora maximum of 60 months. The lifting restriction period of the restricted shares shall be 24 months fromthe date of completion of registration. The restricted shares will be lifted from restricted sales in threebatches after 24 months from the date of completion of registration, in the proportion of 40.00%, 30%,
30.00%, respectively, for each lifting.
In February 2024, the Company announced that 435 incentive targets met the lifting conditions in thefirst lifting restriction period under the 2021 Restricted Share Incentive Plan of the Company. Thenumber of restricted shares that can be lifted from restricted sales was 2,734,640, accounting for 0.19%of the current total share capital of the Company.
Note 2: In January and June 2024, as four incentive recipients no longer met the incentive conditions,the Company decided to repurchase and retire a total of 21,266 restricted shares which had beengranted but not lifted from restricted sales. As at 30 June 2024, the cancellation registration has not yetbeen completed. The number and amount of shares that have expired for this period were both zero.
15.2. Equity-settled share-based payments
? Applicable □ N/A
Unit: CNY
| Method of determining the fair value of equity instruments on the grant date | The closing price of restricted stocks on the grant date deducted the grant price thereof |
| Important parameters of fair value of equity instruments on the grant date | The closing price of restricted stocks on the grant date |
| Basis to determine number of equity instrument that can be exercised | The Company's management considered factors such as changes in the number of eligible employees for the latest exercisable options and the level of performance achievement to make the best estimate. |
| Reason for remarkable difference between the estimate of the current period and that of previous period | N/A |
| Total amount of equity-settled share-based payments included into capital reserves | 1,562,584,407.19 |
| Total costs of recognizing equity-settled share-based payments in the current period | 101,085,675.76 |
15.3. Cash-settled share-based payments
□ Applicable ? N/A
15.4. Share-based payment expenses in the current period
? Applicable □ N/A
Unit: CNY
| Type of granting object | Expenses for equity-settled share-based payments | Expenses for cash-settled share-based payments |
| Production staff | 12,450,858.25 | |
| Sales staff | 26,607,030.96 | |
| Administrative staff | 55,895,829.27 | |
| R&D staff | 6,131,957.28 | |
| Total | 101,085,675.76 |
15.5. Modification and termination of share-based payments
None
16. Commitments and contingencies
16.1. Commitments
Significant commitments at the balance sheet dateNone
16.2. Contingencies
16.2.1. Significant contingencies at the balance sheet date
On 15 October 2014 and 10 January 2015, the Company disclosed three saving deposits involvingcontract disputes in Agricultural Bank of China Changsha Yingxin Sub-branch, Industrial andCommercial Bank of China Nanyang Zhongzhou Sub-branch and another bank, with a total amount ofCNY 500 million. The public security organization has investigated, and the investigation of relatedcases and the preservation of assets are under way. The Company has initiated a civil procedure torecover the loss from the responsible unit. As of the period-end, the Company has recovered theabovementioned saving deposits involving contract disputes with CNY 372,635,100.
Except for the above matters, the Company has no other significant contingencies that need to bedisclosed as the end of 30 June 2024.
16.2.2. Explanation shall be given even if there is no significant contingency for the Companyto discloseThere was no significant contingency in the Company to disclose.
17. Post balance sheet event
17.1. Profit distribution
| Dividends to be distributed for every 10 existing shares held (CNY) | 54.000780 |
| Amount to be distributed for every 10 existing shares held after consideration and approval (CNY) | 54.000780 |
| Profit distribution plan | Based on the current 1,471,987,769 shares, a cash dividend of CNY 54.00 (tax included) will be distributed for every 10 existing shares held, representing a total cash dividend amount of CNY 7,948,733,952.60 (tax included). Where any change occurs to the Company's total share capital before the implementation of the distribution plan, relevant adjustments shall be made with the same total distribution amount. In 2023, 0 shares of bonus shares (tax inclusive), and capital reserves would not be converted into share capital.1 |
Note: 1 On 14 August 2024, the Company disclosed the Announcement on the Completion of theRepurchase and Cancellation of Some Restricted Shares (announcement number 2024-41). Thisrepurchase resulted in a decrease of the total share capital by 21,266 shares from the time thedistribution plan was disclosed until its implementation due to the repurchase and cancellation ofrestricted stocks. The equity distribution was adjusted based on the total share capital as at theregistration date, 22 August, maintaining the principle of a constant total distribution amount. TheCompany's total share capital decreased from 1,471,987,769 shares to 1,471,966,503 shares, withthe distribution ratio adjusted from CNY 54.00 (tax-inclusive) per ten shares to CNY 54.000780 (tax-inclusive) per 10 shares. This plan was implemented on 23 August 2024.
17.2. Sales return
There are no important sales returning after balance sheet date.
17.3. Statement for other post balance sheet events
Luzhou Laojiao Whitail Liquor Industry Co., Ltd. completed its tax and business deregistration on 27June 2024. As at 30 June 2024, the liquidation of residual property had not yet been completed. As at29 August 2024, the liquidation of the residual property was completed.
18. Other important information
18.1. Annuity plan
The Company carried out the enterprise annuity payment work normally during the reporting period.The enterprise annuity funds are paid by both the Company and employees. The Company'scontribution shall not exceed 8% of the Company's total salary in the previous year as stipulated by thestate, and the individual contribution shall be withheld by the Company according to 1% of total salaryof the employee in the previous year.
18.2. Segment information
18.2.1 Recognition basis and accounting policies of reportable segmentExcept for the business on baijiu sales, the Company does not operate other businesses that have asignificant impact on operation results. In addition, the Company operates mainly from China andmain assets also located in China, so the Company does not need to disclose segment data.
18.3. Other significant events that can affect investors’ decision
18.3.1 Saving deposits involving contract disputes
As stated in Note 16.2, three saving deposits involved contract disputes in Agricultural Bank of ChinaChangsha Yingxin Sub-branch, Industrial and Commercial Bank of China Nanyang Zhongzhou Sub-branch and another bank, with a total amount of CNY 500 million. At present, the investigation ofrelated cases and the preservation of assets have been under way. The Company has initiated a civilprocedure to recover the loss from the responsible unit.
Taking into account the current amount of assets preserved by the public security authorities and thecontents of the professional legal opinion issued by Beijing Weiheng (Chengdu) Law Firm on 5 March2023 that “given that since the issuance of the previous legal opinion, a few recovery has beenachieved through the criminal and civil execution, totaling CNY 373 million. At the same time, it issuggested that the total amount of bad debt provision for the three aforementioned places remain CNY120 million”, the Company has made a bad debt provision of CNY 120 million for savings depositinvolved in contractual disputes as of the end of the period, and the amount of the bad debt provisionmay be adjusted in the future based on the litigation process and recovery.
19. Notes to the main Items of the financial statements of parentcompany (all currency unit is CNY, except other statements)
19.1. Accounts receivable
19.1.1. Disclosure by aging
Unit: CNY
| Aging | Closing book balance | Opening book balance |
| Within 1 year (including 1 year) | 54,647.01 | 0.00 |
| Total | 54,647.01 | 0.00 |
19.1.2. Disclosure by withdrawal methods for bad debts
Unit: CNY
| Type | Closing Balance | Opening Balance |
| Book balance | Provision for bad debt | Book value | Book balance | Provision for bad debt | Book value | |||||
| Amount | Proportion | Amount | Proportion | Amount | Proportion | Amount | Proportion | |||
| Including: | ||||||||||
| Accounts receivable that are not individually material but for which a separate provision for bad debts has been made | ||||||||||
| Accounts receivable tested for impairment by the portfolio | 54,647.01 | 100.00% | 389.73 | 0.71% | 54,257.28 | |||||
| Including: | ||||||||||
| Accounts receivable tested for impairment on the portfolio with characteristics of credit risk | 54,647.01 | 100.00% | 389.73 | 0.71% | 54,257.28 | |||||
| Total | 54,647.01 | 100.00% | 389.73 | 0.71% | 54,257.28 | 0.00 | ||||
The category name of provision for bad debt by the portfolio: Provision for bad debt by the portfolio
Unit: CNY
| Name | Closing Balance | ||
| Book balance | Provision for bad debt | Proportion | |
| Risk portfolio | 7,794.51 | 389.73 | 5.00% |
| Including: within 1 year | 7,794.51 | 389.73 | 5.00% |
| Other portfolio1 | 46,852.50 | ||
| Total | 54,647.01 | 389.73 | |
Note: 1 Other portfolios represent inter-subsidiary funds within the scope of consolidation in respectof receivables, which are deemed risk-free and thus no bad debt provision is made.
Notes to the determination basis for the portfolio:
Receivables of the same age exhibit similar credit risk characteristics.If adopting the general mode of expected credit loss to withdraw provision for bad debt of accountsreceivable
□Applicable ? N/A
19.1.3. Provision and recovery for bad and doubtful debt in the current periodAllowance of provision for bad debt:
Unit: CNY
| Type | Opening Balance | Changes in current period | Closing Balance | |||
| Allowance | Reversal or recovery | Write-off | Other | |||
| Provision allowance by individual item | ||||||
| Provision allowance by risk portfolio | 389.73 | 389.73 | ||||
| Total | 389.73 | 389.73 | ||||
There is no significant provision in accounts receivable reversed or recovered in the reporting period.
19.1.4. Accounts receivable written-off in the current period
There is no accounts receivable written-off in the current period.
19.1.5. Top five entities with the largest balances of accounts receivable and contract assets
Unit: CNY
| Company name | Closing balance of accounts receivable | Closing balance of contract assets | Closing balance of accounts receivable and contract assets | Proportion to total closing balance of accounts | Closing balance of provision for bad debt provision of |
| receivable and contract assets | accounts receivable and impairment allowance of contract assets | ||||
| Luzhou Laojiao New Retail Co., Ltd. | 33,741.90 | 33,741.90 | 61.75% | ||
| Luzhou Red Sorghum Modern Agricultural Development Co., Ltd. | 8,740.40 | 8,740.40 | 15.99% | ||
| Luzhou Laojiao Brewing Co., Ltd. | 4,370.20 | 4,370.20 | 8.00% | ||
| Wang Huiying | 7,794.51 | 7,794.51 | 14.26% | 389.73 | |
| Total | 54,647.01 | 54,647.01 | 100.00% | 389.73 |
19.2. Other receivables
Unit: CNY
| Item | Closing Balance | Opening Balance |
| Dividend receivable | 20,242,601.70 | |
| Other receivables | 16,170,951,713.621 | 14,844,650,322.98 |
| Total | 16,191,194,315.32 | 14,844,650,322.98 |
Note: 1 Other receivables in the above table are other receivables minus interest receivable anddividend receivable.
19.2.1. Dividend receivable
19.2.1.1. Classification of dividend receivable
Unit: CNY
| Item (investee) | Closing Balance | Opening Balance |
| Guotai Junan Securities Co., Ltd. | 4,710,798.80 | |
| Huaxi Securities Co., Ltd. | 13,641,557.20 | |
| North Chemical Industries Co., Ltd. | 78,177.75 | |
| China Tourism Group Duty Free Corporation Limited | 1,812,067.95 | |
| Total | 20,242,601.70 |
19.2.2. Other receivables
19.2.2.1. Other receivables disclosed by nature
Unit: CNY
| Nature | Closing book balance | Opening book balance |
| Intercourse funds of subsidiaries in the consolidation scope | 16,161,384,872.70 | 14,828,601,798.89 |
| Intercourse funds and others | 2,395,638.32 | 9,004,523.78 |
| Saving deposits involving contract disputes1 | 127,364,873.50 | 127,564,873.50 |
| Total | 16,291,145,384.52 | 14,965,171,196.17 |
Note: 1. The saving deposits involving contract disputes refer to three deposits amounting to CNY500,000,000.00 with Changsha Yingxin Sub-branch of Agricultural Bank of China and NanyangZhongzhou Sub-branch of Industrial and Commercial Bank of China disclosed by the Company in the2014 Annual Report. The deposits have lost the nature of monetary fund due to their involvement incontract disputes and have thus been transferred into “other receivables”. As of 31 December 2023,the closing balance of that fund was CNY 127,364,873.50.
19.2.2.2. Disclosure by aging
Unit: CNY
| Aging | Closing book balance | Opening book balance |
| Within 1 year (including 1 year) | 16,163,644,691.37 | 14,837,508,542.67 |
| 1-2 years | 44,639.65 | |
| 2-3 years | 6,880.00 | 13,480.00 |
| Over 3 years | 127,449,173.501 | 127,649,173.50 |
| 3-4 years | 11,500.00 | 11,500.00 |
| 4-5 years | 12,800.00 | 22,800.00 |
| Over 5 years | 127,424,873.50 | 127,614,873.50 |
| Total | 16,291,145,384.52 | 14,965,171,196.17 |
Note: 1 Other receivables with significant single amount exceeding three years in age relates tosavings deposit of CNY 127,364,873.50, which are yet to be recovered due to contractual disputes.
19.2.2.3. Disclosure by withdrawal methods for bad debts
Unit: CNY
| Type | Closing balance | Opening Balance | ||||||||
| Book balance | Provision for bad debt | Book value | Book balance | Provision for bad debt | Book value | |||||
| Amount | Proportion | Amount | Proportion | Amount | Proportion | Amount | Proportion | |||
| Provision for bad debt by individual item | 127,364,873.50 | 0.78% | 120,000,000.00 | 94.22% | 7,364,873.50 | 127,564,873.50 | 0.85% | 120,000,000.00 | 94.07% | 7,564,873.50 |
| Including: | ||||||||||
| Other receivables that are individually | 127,364,873.50 | 0.78% | 120,000,000.00 | 94.22% | 7,364,873.50 | 127,564,873.50 | 0.85% | 120,000,000.00 | 94.07% | 7,564,873.50 |
| material and for which a separate provision for bad debts has been made | ||||||||||
| Other receivables that are not individually material but for which a separate provision for bad debts has been made | ||||||||||
| Provision for bad debt by the portfolio | 16,163,780,511.02 | 99.22% | 193,670.90 | 0.00% | 16,163,586,840.12 | 14,837,606,322.67 | 99.15% | 520,873.19 | 0.00% | 14,837,085,449.48 |
| Including: | ||||||||||
| Other receivables tested for impairment on the portfolio with characteristics of credit risk | 16,163,780,511.02 | 99.22% | 193,670.90 | 0.00% | 16,163,586,840.12 | 14,837,606,322.67 | 99.15% | 520,873.19 | 0.00% | 14,837,085,449.48 |
| Total | 16,291,145,384.52 | 100.00% | 120,193,670.90 | 0.74% | 16,170,951,713.62 | 14,965,171,196.17 | 100.00% | 120,520,873.19 | 0.81% | 14,844,650,322.98 |
The category name of provision for bad debt by individual item: Provision for bad debt by individualitem
Unit: CNY
| Name | Opening Balance | Closing Balance | ||||
| Book balance | Provision for bad debt | Book balance | Provision for bad debt | Proportion | Reason | |
| Saving deposits involving contract disputes | 127,564,873.50 | 120,000,000.00 | 127,364,873.50 | 120,000,000.00 | 94.22% | Provision based on legal opinion |
| Total | 127,564,873.50 | 120,000,000.00 | 127,364,873.50 | 120,000,000.00 | ||
The category name of provision for bad debt by the portfolio: Provision for bad debt by the portfolio
Unit: CNY
| Name | Closing Balance | ||
| Book balance | Provision for bad debt | Proportion | |
| Risk portfolio | 2,395,638.32 | 193,670.90 | 8.08% |
| Including: within 1 year | 2,259,818.67 | 112,990.93 | 5.00% |
| 1-2 years | 44,639.65 | 4,463.97 | 10.00% |
| 2-3 years | 6,880.00 | 1,376.00 | 20.00% |
| 3-4 years | 11,500.00 | 4,600.00 | 40.00% |
| 4-5 years | 12,800.00 | 10,240.00 | 80.00% |
| Over 5 years | 60,000.00 | 60,000.00 | 100.00% |
| Other portfolio 1 | 16,161,384,872.70 | ||
| Total | 16,163,780,511.02 | 193,670.90 | |
Note: 1 Other portfolios represent inter-subsidiary funds within the scope of consolidation in respectof receivables, which are deemed risk-free and thus no bad debt provision is made.
Notes to the determination basis for the portfolio:
Accounts receivable of the same age have similar credit risk characteristics.
Allowance of provision for bad debt adopting the general mode of expected credit loss:
Unit: CNY
| Provision for bad debt | First stage | Second stage | Third stage | Total |
| Expected credit loss of the next 12 months | Expected loss in the duration (credit impairment not occurred) | Expected loss in the duration (credit impairment occurred) | ||
| Balance of 1 January 2024 | 520,873.19 | 120,000,000.00 | 120,520,873.19 | |
| Balance of 1 January 2024 in the current period | ||||
| Allowance of the current period | -327,202.29 | -327,202.29 | ||
| Balance of 30 June 2024 | 193,670.90 | 120,000,000.00 | 120,193,670.90 |
The basis for the division of each stage and the withdrawal proportion of bad debt provision
The basis for division is that other receivables with single bad debt provision represent creditimpairment losses incurred since initial recognition (Stage 3), while the remaining portion iscategorised based on aging portfolio. Withdrawal proportions of bad debt provision are 0.00% forStage 1 and 94.22% for Stage 3, totalling 0.74%.
Changes of book balance with significant amount changed of loss provision in the current period
□Applicable ? N/A
19.2.2.4. Provision and recovery for bad and doubtful debt in the current periodAllowance of provision for bad debt:
Unit: CNY
| Type | Opening Balance | Changes in current period | Closing Balance | |||
| Allowance | Reversal or recovery | Write-off or verification | Other | |||
| Other receivables tested for impairment individually | 120,000,000.00 | 120,000,000.00 | ||||
| Other receivables tested for impairment by the portfolio | 520,873.19 | -327,202.29 | 193,670.90 | |||
| Total | 120,520,873.19 | -327,202.29 | 120,193,670.90 | |||
There is no significant provision in other receivables reversed or recovered in the reporting period.
19.2.2.5. Other receivables written-off in the current period
Notes to verification of accounts receivable:
There is no other receivables written-off in the current period.
19.2.2.6. Top five entities with the largest balances of the other receivables
Unit: CNY
| Company Name | Nature | Closing Balance | Aging | Proportion in total receivables | Provisioning amount at period end |
| Luzhou Laojiao Brewing Co., Ltd. | Internal transactions | 15,564,242,862.12 | Within 1 year | 95.54% | |
| Luzhou Laojiao Electronic Commerce Co., Ltd. | Internal transactions | 272,153,394.00 | Within 1 year | 1.67% | |
| Luzhou Laojiao Import and Export Trade Co., Ltd. | Internal transactions | 187,123,987.29 | Within 1 year | 1.15% |
Agricultural Bankof ChinaChangshaYingxin Sub-branch, Industrialand CommercialBank of ChinaNanyangZhongzhou Sub-branch andanother bank
| Saving deposits involving contract disputes | 127,364,873.50 | Over 5 years | 0.78% | 120,000,000.00 | |
| Luzhou Laojiao New Retail Co., Ltd. | Internal transactions | 72,028,776.88 | Within 1 year | 0.44% | |
| Total | 16,222,913,893.79 | 99.58% | 120,000,000.00 |
19.2.2.7. Presentation in other receivables due to the centralized management of fundsOther statements:
There were no other receivables presented in due to the centralized management of funds in thecurrent period.
19.3. Long-term equity investments
Unit: CNY
| Item | Closing Balance | Opening Balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
| Investment in subsidiary | 3,913,219,691.16 | 3,913,219,691.16 | 3,790,179,449.26 | 3,790,179,449.26 | ||
| Investment in associates and joint venture | 2,711,661,691.24 | 2,567,098.80 | 2,709,094,592.44 | 2,707,254,604.74 | 2,567,098.80 | 2,704,687,505.94 |
| Total | 6,624,881,382.40 | 2,567,098.80 | 6,622,314,283.60 | 6,497,434,054.00 | 2,567,098.80 | 6,494,866,955.20 |
19.3.1. Investment in subsidiary
Unit: CNY
| Investee | Opening Balance (book value) | Opening balance of provision for impairment | Changes in current period | Closing Balance (book value) | Closing balance of provision for impairment | |||
| Increase | Decrease | Provision for impairment | Other | |||||
| Luzhou Pinchuang Technology Co., Ltd. | 94,025,229.15 | 3,970,724.40 | 97,995,953.55 | |||||
| Luzhou Laojiao | 293,787,635.54 | 24,361,304.02 | 318,148,939.56 | |||||
| Sales Co., Ltd. | ||||||||
| Luzhou Laojiao Brewing Co., Ltd. | 3,291,776,616.90 | 76,085,443.86 | 14,954,276.36 | 3,382,816,337.12 | ||||
| Luzhou Laojiao International Development (Hong Kong) Co., Ltd. | 12,730,832.19 | 1,054,555.80 | 13,785,387.99 | |||||
| Luzhou Laojiao Electronic Commerce Co., Ltd. | 60,971,611.79 | 166,571.44 | 61,138,183.23 | |||||
| Luzhou Laojiao New Retail Co., Ltd. | 27,115,915.71 | 1,571,145.16 | 28,687,060.87 | |||||
| Luzhou Laojiao Health Liquor Industry Co., Ltd. | 9,771,607.98 | 876,220.86 | 10,647,828.84 | |||||
| Total | 3,790,179,449.26 | 76,085,443.861 | 46,954,798.042 | 3,913,219,691.16 |
Note: 1 Additional investment for the current period represents the capital injection in kind, such asproperties and buildings, as well as land, to Luzhou Laojiao Brewing Co., Ltd.
2. Other increases in the current period are due to the Company's restricted share incentive business,where the parent company (the settlement enterprise) is an investor in the recipient subsidiary (theservice enterprise) and is recognised as a long-term equity investment in the subsidiary (the recipientservice enterprise) based on the fair value of the equity instruments at the date of grant, and thecapital reserve (other capital reserves) is recognised at the same time.
19.3.2. Investment in associate and joint venture
Unit: CNY
| Investee | Opening Balance (book value) | Opening Balance of provision for impairment | Changes in current period | Closing Balance (book value) | Closing Balance of provision for impairment | |||||||
| Increase | Decrease | Gain or loss recognized under equity method | Adjustments of other comprehensive income | Other changes in equity | Cash divided or profit declared | Provision for impairment | Other | |||||
| 1. Joint Ventures | ||||||||||||
| 2. Associate | ||||||||||||
| Huaxi Securities Co., Ltd. | 2,535,630,372.30 | 2,567,098.80 | 4,109,114.62 | 15,730,380.32 | 13,641,557.20 | 2,541,828,310.04 | 2,567,098.80 | |||||
| Luzhou Laojiao Postdoctoral Workstation Technology Innovation Co., Ltd. | 38,339,051.51 | -999,373.92 | 37,339,677.59 | |||||||||
| Sichuan Development Liquor Investment Co., Ltd. | 5,897,980.85 | 2,657.73 | 5,900,638.58 | |||||||||
| CTS Luzhou Laojiao Cultural Tourism Development Co., Ltd. | 124,820,101.28 | -794,135.05 | 124,025,966.23 | |||||||||
| Subtotal | 2,704,687,505.94 | 2,567,098.80 | 2,318,263.38 | 15,730,380.32 | 13,641,557.20 | 2,709,094,592.44 | 2,567,098.80 | |||||
| Total | 2,704,687,505.94 | 2,567,098.80 | 2,318,263.38 | 15,730,380.32 | 13,641,557.20 | 2,709,094,592.44 | 2,567,098.80 | |||||
The recoverable amount is determined based on the net amount of the fair value minus disposalcosts
□Applicable ? N/A
The recoverable amount is determined by the present value of the forecasted future cash flow
□Applicable ? N/A
19.4. Operating revenue and cost of sales
Unit: CNY
| Item | Current Period | Previous Period | ||
| Revenue | Cost of sales | Revenue | Cost of sales | |
| Primary business | 5,685,739,150.15 | 4,407,296,167.84 | 3,999,775,395.42 | 3,041,281,547.34 |
| Other business | 12,419,703.81 | 913,100.36 | 14,764,932.60 | 973,400.78 |
| Total | 5,698,158,853.96 | 4,408,209,268.20 | 4,014,540,328.02 | 3,042,254,948.12 |
Details:
Unit: CNY
| Contract category | Segment 1: Baijiu sales | Total | ||
| Operating revenue | Cost of sales | Operating revenue | Cost of sales | |
| Business type | ||||
| Including: | ||||
| Medium and high grade baijiu | 5,637,340,790.34 | 4,384,023,716.06 | 5,637,340,790.34 | 4,384,023,716.06 |
| Other baijiu | 48,398,359.81 | 23,272,451.78 | 48,398,359.81 | 23,272,451.78 |
| By operating segment | ||||
| Including: | ||||
| Domestic | 5,685,739,150.15 | 4,407,296,167.84 | 5,685,739,150.15 | 4,407,296,167.84 |
| Outbound | ||||
| Market or customer type | ||||
| Including: | ||||
| Contract type | ||||
| Including: | ||||
| Commodity sales contract | 5,685,739,150.15 | 4,407,296,167.84 | 5,685,739,150.15 | 4,407,296,167.84 |
| By commodity transfer time | ||||
| Including: | ||||
| By contract term | ||||
| Including: | ||||
| By sales channel | ||||
| Including: | ||||
| Total | 5,685,739,150.15 | 4,407,296,167.84 | 5,685,739,150.15 | 4,407,296,167.84 |
Information on performance obligation:
No
Other statementsThe Company's main business is the production and sale of baijiu. Revenue is recognised at the pointwhen the Company transfers control of the relevant goods to the customer and fulfils its performance
obligations.
19.5. Investment income
Unit: CNY
| Item | Current Period | Previous Period |
| Investment income from long-term equity investments under equity method | 2,318,263.38 | 55,379,409.84 |
| Investment income gained during the period of holding held-for-trading financial assets | 20,065,193.40 | 2,391,009.80 |
| Investment income from disposal of held-for-trading financial assets | -29,871,256.97 | 4,636,104.81 |
| Dividends income gained during the period of holding other equity instrument investment | 10,709,905.00 | 7,297,266.16 |
| Total | 3,222,104.81 | 69,703,790.61 |
19.6. Other
Note: There is no major restriction on the repatriation of the Company's investment income.
Including: investment income from long-term equity investments under the equity method:
| Item | Current Period | Previous Period |
| Huaxi Securities Co.,Ltd. | 4,109,114.62 | 54,493,747.57 |
| Luzhou Laojiao Postdoctoral Workstation Technology Innovation Co., Ltd. | -999,373.92 | -499,830.20 |
| Sichuan Development Liquor Investment Co., Ltd. | 2,657.73 | 5,159.39 |
| CTS Luzhou Laojiao Cultural Tourism Development Co., Ltd. | -794,135.05 | 1,380,333.08 |
| Total | 2,318,263.38 | 55,379,409.84 |
Including: dividend income gained during the period of holding other equity instrument investment:
| Item | Current Period | Previous Period |
| North Chemical Industries Co., Ltd. | 78,177.75 | 78,177.75 |
| Guotai Junan Securities Co., Ltd. | 4,710,798.80 | 6,241,808.41 |
| Luzhou Bank Co., Ltd. | 3,905,280.00 | |
| China Tourism Group Duty Free Corporation Limited | 2,015,648.45 | 977,280.00 |
| Total | 10,709,905.00 | 7,297,266.16 |
20. Supplementary information
20.1. Detailed statement of non-recurring gains and losses in the current period (+for gain, - for loss)? Applicable □ N/A
Unit: CNY
| Item | Amount | Note |
| Gains or losses on disposal non-current assets | 1,058,795.10 | For details please see Note 7.48 |
| Government grants recognised in profit or loss (exclusive of those that are closely related to the Company's normal business operations and given in accordance with defined criteria and in compliance with government policies, and have a continuing impact on the Company's profit or loss) | 18,852,624.09 | For details please see Note 7.44 |
| Gain or loss on fair-value changes in financial assets and liabilities held by a non-financial enterprise, as well as on disposal of financial assets and liabilities (exclusive of the effective portion of hedges that is related to the Company's normal business operations) | 23,433,541.56 | For details please see Note 7.45 and Note 7.46 |
| Other non-operating income and expenditure except above-mentioned items | 901,090.95 | For details please see Note 7.49 and Note 7.50 |
| Less: Corporate income tax | 10,740,409.33 | |
| Minority interests (after tax) | 78,208.30 | |
| Total | 33,427,434.07 | -- |
Other items that meet the definition of non-recurring gain/loss:
□ Applicable ? N/A
No such cases for the reporting period.
Explain the reasons if the Company classifies any non-recurring gain/loss item mentioned in theExplanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securitiesto the Public-Non-Recurring Gains and Losses as a recurring gain/loss item.
□ Applicable ? N/A
20.2. Return on equity and earnings per share
| Profit during reporting period | Weighted average ROE | EPS (CNY/Share) | |
| Basic EPS | Diluted EPS | ||
| Net profits attributable to common shareholders of the Company | 17.61% | 5.46 | 5.46 |
| Net profits attributable to common shareholders of the Company before non-recurring gains and losses | 17.53% | 5.43 | 5.43 |
20.3. Differences between accounting data under domestic and overseasaccounting standards
20.3.1. Differences of net profit and net assets disclosed in financial reports prepared underinternational and Chinese accounting standards
□ Applicable ? N/A
20.3.2. Differences of net profit and net assets disclosed in financial reports prepared underoverseas and Chinese accounting standards
□ Applicable ? N/A
20.3.3. Explain reasons for the differences between accounting data under domestic andoverseas accounting standards; for any adjustment made to the difference existing in the dataaudited by the foreign auditing agent, such foreign auditing agent’s name shall be clearlystated
20.4. Other
N/A