Yantai Changyu Pioneer Wine Co., Ltd.
2018 Semi-annual Report
Final 2018-03
August, 2018
Contents
I. Important Notice, Contents and Definition ................................................................................. 3
II. Brief Introduction for the Company and Main Financial Indicators .................................... 5
III. Summary of the Company’s Businesses .................................................................................. 8
IV. Management Discussion and Analysis ................................................................................... 11
V. Major issues ................................................................................................................................ 28
VI. Changes in Shares and the Shareholders’ Situation ............................................................. 39
VII. Related Situation of Preferred Shares .................................................................................. 44
VIII Situation for Directors, Supervisors, Senior Management Staffs ...... 44
IX. Related Situation of Corporation Bonds ............................................................................... 45
X. Financial Report .......................................................................................................................... 46
XI. Reference Document................................................................................................................ 151
I. Important Notice, Contents and Definition
The Board of Directors, the Board of Supervisors, directors, supervisors & seniormanagement staffs of the Company collectively and individually accept full responsibility forthe truthfulness, accuracy and completeness of the information contained in this report andconfirm that to the best of their knowledge and belief there are no unfaithful facts, significantomissions or misleading statements.
Mr. Zhou Hongjiang (Chairman of the Company), Mr. Jiang Jianxun (Chief Financial Officer& Financial Director) assure the truthfulness, accuracy and completeness of the financialreport in the semi-annual report.
Except the following directors, all other directors have personally attended the meeting fordeliberating the semi-annual report.
Director name withnon-present in person
| Director name with non-present in person | Director post with non-present in person | Reason for non-present in person | Name of mandatory |
| Sun Liqiang | Director | Business trip | Zhou Hongjiang |
| Augusto Reina | Director | Business trip | Aldino Marzorati |
About significant risks that may be faced in production and operation process, please refer
to―10. Risks the Company faces and measures‖ in chapter four ―Management Discussion andAnalysis‖ of this report. We advise investors to read carefully and pay attention to the
investment risks.
The business plan and target in the report do not represent the earnings forecast of the listedcompany to 2018. Whether the Company could achieve that or not depends on several factorsincluding the changes of market conditions and the effort extent of managing team etc. with agreat uncertainty, so the investors should be in a special attention.
The Company has no plan to distribute cash dividends and bonus shares, and capital reservewill not be transferred to equity.
Definition
Definition Item
| Definition Item | Refers to | Definition Content |
| Company/The Company/The Group | Refers to | Yantai Changyu Pioneer Wine Co. Ltd. |
| Changyu Group/Controlling Shareholder | Refers to | Yantai Changyu Group Co. Ltd. |
| CSRC | Refers to | China Securities Regulatory Commission |
| SSE | Refers to | Shenzhen Stock Exchange |
| Deloitte Hua Yong | Refers to | Deloitte Hua Yong Certified Public Accountants Co., LTD (special general partnership) |
| CNY | Refers to | Chinese Yuan |
II、Brief Introduction for the Company and Main Financial Indicators
1. Company’s information
Abbreviation of the Shares:
| Abbreviation of the Shares: | Changyu A、Changyu B | Code number of the Shares | 000869、200869 |
| Abbreviation of the Shares after alteration | - | ||
| Place of listing of the Shares | Shenzhen Stock Exchange | ||
| Legal Name in Chinese | 烟台张裕葡萄酿酒股份有限公司 | ||
| Abbreviation of Chinese name | 张裕 | ||
| Legal Name in English | YANTAI CHANGYU PIONEER WINE COMPANY LIMITED | ||
| Abbreviation of English name | CHANGYU | ||
| Legal Representative | Mr. Zhou Hongjiang | ||
2. Contact person and information
| Secretary to the Board of Directors | Authorized Representative of the Securities Affairs | |
| Name | Mr. Qu Weimin | Mr. Li Tingguo |
| Address | 56 Dama Road, Yantai, Shandong, China | 56 Dama Road, Yantai, Shandong, China |
| Tel | 0086-535-6633656 | 0086-535-6633656 |
| Fax | 0086-535-6633639 | 0086-535-6633639 |
| quwm@changyu.com.cn | stock@changyu.com.cn |
3. Other information
1) The Company’s contact informationWhether there is any change for the Company‘s registered address, office address, post code,
website and e-mail address during the report period.
□Available ?Not availableThere is no any change for the Company‘s office address, post code, website and e-mail address
during the report period, please see 2017 annual report for more details.2) Information disclosure and filling locationWhether there is any change for the information disclosure and filling location during the report
period.
□Available ?Not availableThere is no any change for the newspapers in which the Company‘s information is disclosed,
website assigned by CSRC to carry the semi-annual report and the filling location during the reportperiod, please see 2017 annual report for more details.
4. Key accounting data and financial indicators
Whether the Company makes retroactive adjustments or restates the accounting data of previousfiscal years.
?No
| In the report period | In the same period of last year | More or less than last year (%) | |
| Business revenue (CNY) | 2,828,230,064 | 2,767,098,197 | 2.21% |
| Net profit attributed to the shareholders of the listed company (CNY) | 635,837,405 | 670,069,054 | -5.11% |
| Net profit attributed to the shareholders of the listed company after deducting the irregular profit and loss (CNY) | 606,678,719 | 652,906,375 | -7.08% |
| Net cash flows from the operating activities (CNY) | 552,753,472 | 420,360,319 | 31.50% |
| Basic earnings per share (CNY/share) | 0.93 | 0.98 | -5.10% |
| Diluted earnings per share (CNY/share) | 0.93 | 0.98 | -5.10% |
| Weighted average for earning rate of the net assets | 6.89% | 7.84% | -0.95% |
| The end of the report period | The end of last year | More or less than last year (%) | |
| Total assets (CNY) | 13,038,507,425 | 12,536,755,208 | 4% |
| Net Assets attributed to the shareholders of the listed company (CNY) | 9,532,948,884 | 8,906,342,299 | 7.04% |
5. Differences in accounting data under PRC accounting standards and internationalaccounting standards
1) Differences of net profit and net asset in the financial report disclosed according to bothinternational accounting standards and PRC accounting standards
?Available □Not available
Unit：CNY
| Net profit attributed to the shareholders of the listed company | Net Assets attributed to the shareholders of the listed company | ||||
| Current period | Last period | End of period | Beginning of period | ||
| According to PRC accounting standards | 635,837,405 | 670,069,054 | 9,532,948,884 | 8,906,342,299 | |
| Item and amount adjusted according to international accounting standards | |||||
| According to international accounting standards | 635,837,405 | 670,069,054 | 9,532,948,884 | 8,906,342,299 | |
2) Differences of net profit and net asset in the financial report disclosed according to bothforeign accounting standards and PRC accounting standards
□Available ?Not available
There are no differences of net profit and net asset in the financial report disclosed according toboth foreign accounting standards and PRC accounting standards during the report period.
3) Explanation of the differences in accounting data under domestic and overseas accountingstandards
□Available ?Not available
6. Item and amount of irregular profit and loss
?Available □Not available
Unit：CNY
Item
| Item | Amount | Explanation |
| Profit and loss on disposal of non-current assets, including the reversal of accrued impairment provision | 93,958 | |
| Government grants credited in profit and loss (except for those recurring government grants that are closely related to the entity's operation, in line with related regulations and have proper basis of calculation) | 37,982,878 | |
| Other non-operating expense and income | 614,030 | |
| Less: Income tax effect | 9,447,208 | |
| Minority shareholders equity effect (after tax) | 84,972 | |
| Total | 29,158,686 | - |
The reasons shall be made clear and definitely as to the irregular profit and loss that the Company
has defined by virtue of the Explanatory Notice on Public Company’s Information Disclosure No.1 -
Irregular Profit and Loss and as to regarding the irregular profit and loss as recurrent profit and loss
as specified in the Explanatory Notice on Public Company’s Information Disclosure No.1 -
Irregular Profit and Loss.
□Available ?Not available
There is no situation that the irregular profit and loss is defined and specified as recurrent profit and
loss in accordance with the Explanatory Notice on Public Company’s Information Disclosure No.1 -
Irregular Profit and Loss during the report period.
III. Summary of the Company’s Businesses
1. Main businesses during the report period
Whether the Company needs to follow the disclosure requirement of special businessNo.
During the report period, the Company‘s main business is to produce and operate wine and brandy, thus providing the domestic and foreign
consumers with healthy and fashionable alcoholic drinks. The Company integrates the planting and procurement of grape, the procurement ofraw and auxiliary material, the production and sales of products. Compared with earlier stage, there are no significant changes happened to the
Company‘s main businesses. The wine industry that the Company involved in is still in the growth stage, the whole domestic wine market is on
the rising trend. The Company takes the dominant position in the domestic wine market. During the report period, the sales of low-price wines,low-priced brandy and chateau wines of Castel are slightly down. The sales of mid-priced wines such as Noble Dragon remain stable. The salesof mid-to-high priced brandy, imported wines and chateaus wines such as AFIP keep the favorable growth momentum. All these make the
Company‘s operating revenue appear a small increase compared with the same period of last year. However, due to factors such as rising prices
of raw materials and packaging materials, and increased depreciation, the Company's net profit declined slightly.
2. Significant changes of main assets
1) Significant changes of main assets
Main assets
| Main assets | Explanation of significant changes |
| Equity asset | No significant changes |
| Fixed asset | No significant changes |
| Intangible asset | No significant changes |
| Construction in process | No significant changes |
2) Main overseas assets condition
?Available □Not available
Details of
assets
| Details of assets | Formation reasons | Assets scale | Location | Operation mode | Control measures for safeguarding of asset security | Earning condition | Proportion of overseas assets in the Company‘s net assets | Whether there are significant impairment risks |
| Hacienda Y Vinedos Marques Del Atrio. SL | Acquisition of equity | 456,572,779 | Spain | Independent operation | The Company participates in making important decisions through board of directors and appoints CFO on financial management | 1,214,012 | 4.79% | No |
| Indomita Wine Company Chile, SpA | Founding of joint venture | 483,324,945 | Chile | Independent operation | The Company participates in making important decisions through board of directors and appoints CFO on financial management | -281,859 | 5.07% | No |
| Francs Champs Participations SAS | Founding of sole proprietorship | 228,843,440 | France | Independent operation | The Company directly appoints senior executives on management | -2,717,412 | 2.40% | No |
| Kilikanoon Estate Pty Ltd | Acquisition of equity | 148,472,200 | Australia | Independent operation | The Company participates in making important decisions through board of directors | -115,317 | 1.56% | No |
Explanation on major holding companies and joint stock companies
During the report period, Indomita Wine Company Chile, SpA and Kilikanoon Estate Pty Ltd is with small losses, mainly due to the fact that thetwo are located in the southern hemisphere as well as the low season sales of the first half of the year.
3. Analysis of core competitiveness
Whether the Company needs to follow the disclosure requirement of special business?No.Compared with the participants in the arena of the Chinese wine sector, we believe that theCompany is provided with the following advantages:
Firstly, the Company has been enjoying a well-known wine brand since 120-odd years, ―Changyu‖,―Noble Dragon‖ and ―AFIP‖ are Chinese famous trademarks that have strong influence and good
reputation.
Secondly, the Company has set up a nationwide marketing network, formed a ―three-level‖marketing network system mainly composed of the company‘s salesmen and distributors, possessed
the strong marketing ability and market exploitation ability.Thirdly, the Company has already had strong research strength and a product R&D system, owned a
one and only ―State-level Wine R&D Center‖, made mastery of advanced winemaking technology
and production processes, been powerful enough in product innovation and established a perfectquality control system.Fourthly, the Company is in possession of a lot of grape-growing bases to meet its futuredevelopment, having developed a great deal of vineyards in the most suitable areas for wine grapegrowing such as in Shandong, Ningxia, Xinjiang, Liaoning, Hebei and Shanxi, whose scales and
structures have generally met the Company‘s needs for development.Fifthly, the Company has a great variety of products composed of all grades, its wine，brandy andsparkling wine of over 100 sorts can meet different consumers‘ demands. The Company has taken
the lead in the domestic wine sector through rapid development in the past 10-odd years and haspossessed comparative superiority in the future competition.
Sixthly, the Company has a relatively respect motivation system. Most of Company‘s employeesindirectly hold the Company‘s equity through controlling shareholders. There are high consistency
between employee benefits and shareholders benefits, in favor of motivating employees to createvalue for shareholders.Seventhly, the company has established a flexible and efficient decision-making mechanism. Thecore management of the Company has always maintained a united and pragmatic work style andflexible and efficient decision-making mechanism, enabling the Company to respond morecoercively to market changes.Eighthly, the company has basically completed the global production capacity layout. The Companyhas completed production capacity layout in the world's most important wine producing countriessuch as China, France, Chile, Spain, Australia, etc., and can make better use of global high-qualityraw material resources, capital, talents and advanced production techniques and technologies toprovide consumers with diversification quality products and services.Based on the above reasons, the Company has formed strong core competitiveness and willmaintain this comparative advantage in the foreseeable market competition in the future.
IV. Management Discussion and Analysis
1. Summarization
During the report period, influenced by the slowdown of domestic economic growth, the overalldomestic wine industry is relatively stable. Influenced by the further decrease in product priceresulting from the overwhelming flow of foreign wine into Chinese market, the competition indomestic wine market, especially for middle-and-low-level wines, is very fierce, plus the greatimpact brought by E-commerce and other new channels to traditional sales channels in the
meantime this company‘s E-commerce business is still in the beginning stage, resulting in bigger
challenges for the Company to achieve sustained and steady growth. Facing quite a lot of externaldisadvantages, the Company insists to focus on the market, timely adjust the development strategyand marketing tactics, optimize the market layout and product structure, perfect the marketingchannels and assessment system, strive to promote product sales, achieving good results andrealizing business income of CNY2828.23 million, an increase of 2.21% compared with last year;but due to the impact of increase in operating cost, taxes and additional, sales expense andadministrative expense, the Company realized net profit of CNY635.84 million belonging to the
parent company‘s shareholders, an decrease of 5.11% compared with last year.
During the report period, the Company mainly did following works:
Firstly, the Company adjusted and fortified its management team, increasing the management leveland capacity of management team.
Secondly, the Company proposed the strategy of ―Focus on big product, focus on high quality, focuson middle-to-high end‖ (in other words ―Three Focus‖ strategy), further clarifying its development
direction.Thirdly, the Company basically completed the reform and reorganization work in sales systems,improving the mode of market investment and enhancing marketing ability. The Company further
implemented the measure of ―personnel reduction while salary increase‖ in sales system, reduced
redundant personnel, completed the personnel setting, position setting and personnel allocationwork in business management department in sales system, perfected performance assessmentmethod for marketing personnel and conducted authorized operation to partial business unit and
provincial branches, improving the sales team‘s working enthusiasm, initiative and fighting
capacity.
Fourthly, the Company fully implemented ―Three Focus‖ strategy, accelerated the product carding
as well as the backbone distributor system construction and increased the market investment,
improving products‘ market competitiveness. For high-end products, the Company focused on―MOSER‖, ―AFIP‖, ―CASTEL‖, ―Golden Icewine Valley‖, ―Baron Balboa‖, ―Rena‖, ―Tinlot‖ wineand ―Koya‖ brandy and strived to build ―MOSER‖ to a globally well-known high-end brand, tobuild ―AFIP‖, ―CASTEL‖, ―Golden Icewine Valley‖ and ―Koya‖ to nationally well-knownhigh-end brands and to build ―Baron Balboa‖, ―Rena‖, ―Tinlot‖ to regionally well-known high-endbrands. For middle-end products, the Company focused on ―Noble Dragon‖ and reserva five-star
brandy, reinforced the market development in the ninth-edition Noble Dragon and reserva five-star
brandy, continued consolidating and enlarging the position of ―Noble Dragon‖ as domestic biggest
single product in wine market and continually increased the market share of middle-end brandy. For
low-to-mid-end products, the Company focused on ―Zuishixian‖ and mini-brandy to digging
consumption potential and to guide and cultivate new consumer group. For imported liquor, theCompany mainly paid attention to acquired brands, such as Atrio, Mirefleurs, Indomita, Kilikanoonand Roullet Fransac in order to occupy important position in Chinese imported wine market. The
Company also conducted comprehensive carding and reorganization to products and distributorteam, reduced product items, eliminated and replaced unqualified distributors, implemented strict
access system to distributors selling the ninth-edition Noble Dragon and new-edition ―Zuishixian‖,
changed the market investment mode, intensified the fighting degree to fleeing goods, further
standardized market order, better protected distributors‘ interest and improved distributors‘
enthusiasm.Fifthly, the Company strengthened quality management and quickened the pace in product updateand upgrade in order to better adapt to market change. During the report period, the Companyrevised internal quality management system, took unannounced inspection to eleven wineries andconducted update and upgrade work to products including partial chateau wine, Noble Dragon,reserva five-star brandy, five-star brandy and Zuishixian etc, effectively improving product qualityand better satisfying the market need.Sixthly, the Company reinforced financial management and audit work in order to strive toaccomplish energy-saving and cost-reducing and to further reduce operating cost. During the reportperiod, the Company further strengthened internal fund allocation and control, reasonably arrangedloan structure, strived to reduce fund cost; intensified the cost management, such as advertisementand major raw material purchase and so on, and strongly reduced freight and storage expense;enhanced the financial management in overseas acquired enterprise and reinforced audit degree toinvestment project in order to prevent operating risk and improve investment benefits; made greatefforts to increase the ratio of order-driven products, to shorten delivery time, to reduce inventoryand capital occupying and to improve enterprise profitability.Seventhly, the Company continued implementing internationalization strategy and orderly promotedoverseas acquisition work. During the report period, the Company acquired 80% equity of
Kilikanoon Estate Pty Ltd in Australia, optimizing the Company‘s capacity layout and product
structure and further improving the market competition of imported products. Through M&A and
strategic cooperation, the Company‘s production had extended to Asia, Europe, America and
Oceania and the Company had completed the capacity layout in major global wine-producingcountries and famous wine-producing region, such as France, Spain, Australia and Chile and so on.The Company also had deep brand cooperation with major wine enterprises in Italy, New Zealand,Argentina and other countries. Now the Company owned five overseas chateaux, eight domesticchateaux and more than twenty foreign and domestic major brands and sold its products to morethan seventy countries and regions in the world.Eighthly, the Company strengthened the management in investment project and basically completedthe installation and commissioning work of major production lines in Changyu industrial park,laying the foundation of putting into operation as soon as possible and further improving productionefficiency.
In order to achieve the operation target set by the Company at the beginning of this year, theCompany would do following work in the second half of 2018:
Firstly, the Company will intensify the brand construction and carding work and enlarge thecooperation breadth and depth with domestic E-commerce magnate and new media in order toimprove brand awareness and reputation. The Company will intensify brand aggregation, continueteasing and reducing product quantity and optimize product line; for choice of media, bind up withhigh-flow platform, enhance resource exchange and share and take deep cooperation with precisionmedia with high category permeability to form high-flow and strong-viscosity communicationstrategy; for publicity form, focus on output content, aim at different media attribute and makebrand image output at different platforms including MicroBlog, WeChat official account, Zhihuaccount and TouTiao etc by adopting micro film, short video, multimedia, long image-text, livebroadcast and other forms.
Secondly, the Company will continue paying attention to the construction of key distributor teamand professional sales personnel team, conduct the tasting and promotion work of mid-to-high-end
products, such as chateau wine, Noble Dragon, ―Three Star‖ and above level brandy and Zuishixian
and so on, and strive to promote the sales of mid-to-high-end products; do the preparation work forthe opening of Koya chateau and the launch of new products, such as Koya brandy; continuepromoting the sales work of acquired brands in domestic and foreign markets, such as Atrio,Mirefleurs, Donelli, Indomita and Kilikanoon and so on, further establish and perfect the domesticand foreign sales system, take full advantage of foreign sales network to enlarge the export scale ofdomestic wines; centralize marketing resources and focus on key markets to continually enlarge thequantity and coverage of dominated market.Thirdly, the Company will start the order-driven business mode for Noble Dragon distributors,make great efforts to shorten delivery time and reduce inventory level and fund occupation.Fourthly, the Company will further enlarge and implement authorized operation to improve thepositivity, initiative and flexibility of front-line production and management personnel and to
accelerate market reaction speed; improve the Company‘s assessment and incentive measures to
production and management department, enhance staff training and reorganization, strictly carry out
assessment, reward, promotion and elimination system, and motivate all staff‘s vitality and fighting
capacity.Fifthly, the Company will orderly proceed the construction of investment projects and focus on theconnection between production and sales. The Company will pay special attention to the ending
work of main body‘s civil work in Yantai Changyu International Wine City (in other words Yantai
Changyu Industry Park), accelerate the construction of intelligentization and informatizationmanagement system as well as the maintenance and transformation in Cognac Roullet Fransacchateau and the fire engineering in the research institute; conduct the coordination work betweenproject construction and production and reasonably arrange construction and production progress totimely satisfy the market need.Sixthly, the Company will strengthen the management in supply chain and fully accomplish thepurchase in grape material. The Company will enhance the construction and management in thesupply chain of overseas and domestic grape material and other packing materials, strive to realizediversification of material supply and make sure that, for all raw materials, the important segmentcould be monitored and the whole course could be traced; based on the material requirement infuture years, scientifically make raw material purchase plan, further perfect raw material pricingmechanism, reasonably determine raw material purchase price, comprehensively complete rawmaterial purchase work, preferably control raw material cost and improve raw material quality.
2. Analysis of main business
See ―1. Summarization‖ in ―Management Discussion and Analysis‖.
Period comparison of main financial data
Unit: CNY
| In the report period | In the same period of last year | More or less (%) | Reason for changes | |
| Operating revenue | 2,828,230,064 | 2,767,098,197 | 2.21% | Mainly attributed to the Company‘s consolidation of companies in Chile and Australia that are included in the scope of consolidation making an increase in operating revenue |
| Operating cost | 974,557,292 | 925,754,133 | 5.27% | Mainly attributed to the increase in prices of raw materials and packaging materials on year-on-year basis |
| Sales expense | 710,659,033 | 668,735,726 | 6.27% | Mainly attributed to the increase in advertising promotion fees and marketing staff compensation on year-on-year basis |
| Management expense | 160,091,888 | 130,542,386 | 22.64% | Mainly attributed to the increase of employee‘s compensation and depreciation expense on year-on-year basis |
| Financial expense | 13,085,942 | 11,147,949 | 17.38% | Mainly attributed to the increase in interest expenses and handling fees on year-on-year basis |
| Income tax expense | 211,979,735 | 228,752,790 | -7.33% | Mainly attributed to the decrease in total profit (profit before tax) on year-on-year basis which results in a decrease in current income tax expenses on year-on-year basis |
| Net amount of cash flow generated in operating activities | 552,753,472 | 420,360,319 | 31.50% | Mainly attributed to the increase of cash received from goods selling and labor service providing on year-on-year basis |
| Net amount of cash flow generated in investment activities | -291,217,548 | -797,540,941 | 63.49% | Mainly attributed to the recovery of fixed term deposits making the cash injection in investment activities increased on year-on-year basis and the cash outflow from investment activities decreased on year-on-year basis |
| Net amount of cash flow | -6,350,537 | 353,878,706 | -101.79% | Mainly attributed to the year-on-year decrease in cash received from loans and |
generated in financingactivities
| generated in financing activities | the year-on-year increase in cash paid for debt repayment | |||
| Net increased amount of cash and cash equivalents | 247,781,188 | -27,454,401 | 1,002.52% | Mainly attributed to the increase in net cash flow from operating activities and net cash flow from investing activities on year-on-year basis |
Whether there is any great change for the Company‘s profit structure or profit source during the report period
□Available ?Not available
There is no great change for the Company‘s profit structure or profit source during the report period.
Structure of main businesses
Unit: CNY
| Item | Operating revenue | Operating cost | Gross profit (%) | Increase or decrease of operating revenue over the same period of last year (%) | Increase or decrease of operating cost over the same period of last year (%) | Increase or decrease of gross profit over the same period of last year |
| Sector | ||||||
| Wine and alcoholic beverages | 2,828,230,064 | 974,557,292 | 65.54% | 2.21% | 5.27% | -1% |
| Product | ||||||
Wine
| Wine | 2,235,369,550 | 759,887,101 | 66.01% | 3.92% | 7.94% | -1.26% |
| Brandy | 552,121,883 | 194,450,633 | 64.78% | -4.03% | -2.86% | -0.43% |
| Other | 40,738,631 | 20,219,557 | 50.37% | 0.22% | -6.23% | 3.42% |
3. Analysis to non-main business
□Available ?Not available
4. Assets and liabilities situation
1) Major changes of assets
Unit: CNY
| The end of the report period | The end of the same period of last year | Proportion increase or decrease (%) | Explanation on significant changes | |||
| Amount | Proportion in the total assets (%) | Amount | Proportion in the total assets (%) | |||
| Monetary funds | 1,683,038,453 | 12.91% | 1,550,067,781 | 12.63% | 0.28% | No significant changes |
| Receivables | 243,413,092 | 1.87% | 167,152,509 | 1.36% | 0.51% | No significant changes |
| Inventory | 2,338,925,432 | 17.94% | 2,024,302,929 | 16.49% | 1.45% | Mainly attributed to the increase in raw materials reserved at the end of the report period |
| Investment real estate | 17,877,379 | 0.14% | 0% | 0.14% | No significant changes | |
| Long-term equity investments | 0% | 0% | No significant changes | |||
Fixed assets
| Fixed assets | 5,457,575,677 | 41.86% | 4,591,037,486 | 37.40% | 4.46% | Mainly attributed to the transfer of constructions in progress during the report period |
| Construction in progress | 1,015,914,753 | 7.79% | 1,697,297,440 | 13.83% | -6.04% | Mainly attributed to the transfer of constructions in progress into fixed assets during the report period |
| Short-term borrowings | 750,454,676 | 5.76% | 846,881,075 | 6.90% | -1.14% | Mainly attributed to the return of short term bank loans |
| Long-term borrowings | 153,965,191 | 1.18% | 175,270,580 | 1.43% | -0.25% | No significant changes |
2) Measuring assets and liabilities at fair value
□Available ?Not available
3) Assets rights restricted situation up to the end of report period
Assets rights restricted situation of the Company up to the end of report period, please refer to Announcement on External Guarantee(announcement number: 2016-Temporary 021) and Announcement on External Guarantee (announcement number: 2017-Temporary 015)disclosed on China Securities Journal, Securities and the website (www.cninfo.com.cn) respectively on December 22
nd
, 2016 and December 12
th
,2017.
5. Investment situation analysis
1) Overall situation
?Available □Not available
Amount of investment during the report period
(CNY)
| Amount of investment during the report period (CNY) | Amount of investment in the same period last year (CNY) | Extent of change |
| 312,384,336.55 | 630,502,100 | 50.45% |
2) Situation of acquired main equity investments during the report period
?Available □Not available
Unit: CNY
| Name of the invested company | Main businesses | Investment mode | Investment amount | Shareholding ratio | Capital source | Partners | Investment horizon | Product type | Progress up to the balance sheet date | Estimated profit | Investment profit and loss for current period | Whether or not to prosecute | Disclosure date | Disclosure index |
| Kilikanoon Estate Pty Ltd | Production and sales of wines | Acquisition | 101,452,936.55 | 80% | Self-owned | PTO7 Pty Ltd、Bruce Warren & Lindsey Anne Baudinet、Nathan Waks & Michelle Williams、Woodvale Vintners Pty Ltd、 | 50 years | Wines | Completed | 6,763,529 | -115,317 | No | December 12th, 2017 | Announcement on Equity Acquisition of Kilikanoon Estate Pty Ltd (announcement number: 2017-Temporary 017) disclosed on the website (www. cninfo. com. cn) |
NWMWNominee
s Pty
Ltd、W.J.
DuthyHoldings
Pty Ltd、
Warrick
James
Duthy、
SH & GNominee
s Pty
Ltd、
DavidLeonard
&RebeccaLouise
Adams、
12-14MarsdenStreet Pty
Ltd、
BurfordSampsonand JaneHamiltonSampson
Total
| Total | - | - | 101,452,936.55 | - | - | - | - | - | - | 6,763,529 | -115,317 | - | - | - |
3) Situation of main ongoing non-equity investments during the report period
?Available □Not available
Unit: CNY
| Project name | Investment mode | Whether it belongs to fixed assets investment | Involved sectors | Investment Amount during the report period | Accumulated actual investment amount up to the end of the report period | Capital source | Process of project | Estimated profit | Accumulated realized profit up to the end of the report period | Reasons for unreached planning schedule and estimated profit | Disclosure date | Disclosure index |
| Yantai Changyu International Wine City Blending and Cooling Center Construction Project | Self- constructed | Yes | Liquor and alcoholic beverage sector | 107,016,000 | 1,265,635,100 | Owned fund | 100% | - | - | No direct earnings | 2018.04.23 | Please refer to Announcement on Resolution of the Seventh Session Board of Directors 8th Meeting disclosed on China Securities Journal, Securities and the website (www.cninfo.com.cn) |
| Yantai | Self- | Yes | Liquor | 50,000,000 | 936,690,000 | Owned | 100% | - | - | No direct | 2018.04.23 |
ChangyuInternationalWine CityBottlingCenterConstructionProject
| Changyu International Wine City Bottling Center Construction Project | constructed | and alcoholic beverage sector | fund | earnings | on April 23rd, 2018. | |||||||
| Yantai Changyu International Wine City Logistics Center Construction Project | Self- constructed | Yes | Liquor and alcoholic beverage sector | 0 | 415,207,200 | Owned fund | 100% | - | - | No direct earning | 2018.04.23 | |
| Changyu Vine and Wine Research Institute Construction Project | Self- constructed | Yes | Liquor and alcoholic beverage sector | 1,800,000 | 117,560,000 | Owned fund | 75% | - | - | Not put into operation | 2018.04.23 | |
| Treasure Wine Chateau Construction Project | Self- constructed | Yes | Liquor and alcoholic beverage sector | 9,840,000 | 119,830,000 | Owned fund | 75% | - | - | Not put into operation | 2018.04.23 |
KoyaBrandyChateauConstructionProject
| Koya Brandy Chateau Construction Project | Self- constructed | Yes | Liquor and alcoholic beverage sector | 4,230,000 | 139,928,000 | Owned fund | 80% | - | - | Not put into operation | 2018.04.23 |
| Greening Investment | Self- constructed | Yes | Liquor and alcoholic beverage sector | 4,000,000 | 57,105,700 | Owned fund | 100% | - | - | No direct earning | 2018.04.23 |
| Cognac Fransac Chateau Rrepair and Renovation Project | Self- constructed | Yes | Liquor and alcoholic beverage sector | 7,535,400 | 7,535,400 | Owned fund | 30% | - | - | Not completed | 2018.04.23 |
| Industrial Production SAP Information Construction Project | Self- constructed | Yes | Liquor and alcoholic beverage sector | 26,510,000 | 37,850,000 | Owned fund | 60% | - | - | No direct earning | 2018.04.23 |
| Research Institute Fire Engineering Project | Self- constructed | Yes | Liquor and alcoholic beverage sector | 0 | Owned fund | 0% | - | - | No direct earning | 2018.04.23 |
Oak BarrelProcurementProject
| Oak Barrel Procurement Project | Self- constructed | Yes | Liquor and alcoholic beverage sector | 0 | 0 | Owned fund | 0% | - | - | No direct earning | 2018.04.23 | |
| Non-dry Sticker Labeling Machine Procurement Project | Self- constructed | Yes | Liquor and alcoholic beverage sector | 0 | 0 | Owned fund | 0% | - | - | No direct earning | 2018.04.23 | |
| Total | — | — | — | 210,931,400 | 3,097,341,400 | — | — | - | - | -- | -- | -- |
4) Financial assets investment
(1) Security investment
□Available ?Not available
There is no security investment for the Company during the report period.
(2) Derivative investment
□Available ?Not available
There is no derivative investment for the Company during the report period.
6. Sale of major assets and equities
1) Sale of major assets
□Available ?Not available
There is no sale of major assets during the report period.
2) Sale of major equities
□Available ?Not available
7. Analysis to the major holding and joint stock companies
?Available □Not available
Situation of main subsidiaries and joint stock companies affecting over 10% of the Company‘s net profit
Unit: CNY
Company
name
| Company name | Company type | Main business | Registered capital | Total asset | Net asset | Operation revenue | Operation profit | Net Profit |
| Xinjiang Tianzhu Winery Co., Ltd. | Subsidiary | Grape planting, grape juice, bulk wine and fruit wine processing, filling and sales | CNY75million | 100,490,996 | 94,660,914 | 18,803 | -1,156,537 | -184,572 |
| Yantai Changyu-Chateau Changyu Castel Wine Co. Ltd. | Subsidiary | Wine and sparkling wine research, production and sales as well as the tourism service | USD5million | 254,998,005 | 83,446,152 | 43,226,910 | 3,706,113 | 2,861,474 |
Langfang Castel-
Changyu Wine
Co. Ltd.
| Langfang Castel- Changyu Wine Co. Ltd. | Joint stock company | Wine production and sales | USD6.108818million | 35,673,406 | 31,609,890 | 5,038,281 | -1,952,954 | -1,952,954 |
| Chateau Changyu AFIP Global Wine Co. Ltd. | Subsidiary | Brandy and wines research, production and sales | CNY642.75million | 690,531,538 | 640,211,147 | 78,502,666 | 21,121,608 | 15,243,700 |
| Chateau Liaoning Changyu Ice Wine Co., Ltd. | Subsidiary | Ice wine production | CNY59.6873million | 84,138,776 | 55,148,440 | 27,305,133 | 2,913,516 | 905,396 |
| Hacienda Y Vinedos Marques Del Atrio, SL | Subsidiary | Wine and other liquors production and operation | EUR2.385732million | 456,572,779 | 122,855,707 | 148,197,893 | -771,033 | 1,214,012 |
| Indomita Wine Company Chile, SpA | Subsidiary | Wine and other liquors production and operation | USD47.19million | 483,324,945 | 349,642,978 | 93,719,341 | -1,582,286 | -281,859 |
| Kilikanoon Estate Pty Ltd | Subsidiary | Wine and other liquors production and operation | AUD6.529221million | 148,472,200 | 83,884,229 | 25,904,401 | -385,840 | -115,317 |
Acquisition and disposal of subsidiaries during the report period
□Available ?Not available
Information of main holding and joint stock companies
No
8. Main part situation of the special purpose being controlled by the Company
?Not available
9. Forecast for the operation achievements from January to September of 2018Caution and explanation for the prediction that the cumulative net profit from the beginning of the year to the end of next report period could be
in a loss or there will be in a great change comparing with the same period of last year.
?Not available
10. Risks the Company faces and measures
(1) Risks in price fluctuation of raw materials
Grapes are the Company‘s main raw materials. The grape‘s yield and quality are affected to a certain extent by the natural factors such as
drought, wind, rain, frost and snow. These force majeure factors greatly influence the quantity and price of the grapes in Company orders and
add the uncertainty to the Company‘s production and operation. Therefore, the Company will lower the risks that are likely to affect grape
quality and result in price fluctuation by means of expanding the self-run vineyards, strengthening the vineyard management and optimizing thelayout of vineyards.(2) Risks in uncertainty of market input and outputTo cope with the cutthroat market competition and to meet the needs for market development, the Company has input more and more capital inthe market and the sales expense has taken up a higher percentage point in the business revenue. The input-output ratio will affect the
Company‘s operating results to a great extent and the risk that some investments may not reach the expectations is likely to occur. Therefore, the
Company will strengthen market research and analysis, enhance market forecast accuracy and continue to perfect the input-output evaluationsystem to ensure the investments in market to be satisfactory as expected.(3) Risks in product transport
The Company‘s products are fragile and sent to different places all over the world, mostly by sea, railway and expressway. The peak season of
sales is usually in cold winter and close to the spring festival when market has a great demand. At that time, the natural and human factors suchas serious shortage of transport capacity resulting from busy flow of people and goods, wind, snow, freezing as well as traffic accidents make thetransport departments difficult to send products to markets in time and safely. As a result, it makes the Company have to face the risks of missingthe peak season of sales. Therefore, the Company will adopt all methods possible like making precise sales prediction and well designedconnection of production and sales, reasonably arranging production and transport means and making use of more available warehouses indifferent places to lower these kinds of risks.(4) Risks in investment faultsAccording to the plan, currently the Company has finished the production layout at home, and the next step is to pay more attention to theoverseas merge and acquisition in the same industry. Currently, Yantai Changyu International Wine City (namely Yantai Changyu Industrial Park)
has those features such as the big investment amount, long-term construction period and many uncertain factors; more unforeseeable factors forthe overseas merge and acquisition projects in the progress of M&A, it is difficult to make sure the fair and reasonable transaction price, theintegration and management after M&A is also hard. Under the influence of uncertain factors for individual projects, it leads to have the risks offacing with the investment amount out of budget or hardly taking back the expected investment earnings. The Company will take an adequateargument and scientific decision-making for investment projects, try hard to reduce and avoid investment risks.
V. Major issues
1. Information for the shareholders’ meeting and temporary shareholders’ meeting held during the report period
1) Information for the shareholders’ meeting during the report period
Session
| Session | Meeting type | Participation ratio of investors | Convening date | Disclosure date | Disclosure Index |
| 2017 Annual Shareholders‘ Meeting | Annual shareholders‘ meeting | 62.42% | 2018.05.24 | 2018.05.25 | http://www.cninfo.com.cn Announcement on Resolution of 2017 Annual Shareholders’ Meeting （Announcement number:2018- Temporary 15） |
2) Request for convening temporary shareholders’ meeting by priority shareholders owing recovered voting right
□Available ?Not available
2. The Company’s preliminary scheme of profit distribution and preliminary scheme of increasing equity with capital reserve
□Available ?Not available
There are no schemes of paying cash dividend, bonus share and increasing equity with capital during the semi-annual period.
3. Commitments that the Company’s actual controllers, shareholders, related parties, acquirers and the Company and other related
commitment parties have implemented during the report period and have not implemented up to the end of the report period
?Available □Not available
Commitments
| Commitments | Commitment party | Commitment type | Commitment content | Commitment time | Commitment period | Implementation |
| Commitments at share reform | ||||||
| Commitments made in acquisition report or equity changes report | ||||||
| Commitments at asset restructuring | ||||||
| Commitments at the initial public offering or refinancing | Yantai Changyu Group Co. Ltd. | Solve horizontal competition | Non-horizontal competition | 1997.05.18 | Forever | Has been performing strictly |
| Yantai Changyu Group Co. Ltd. | Clear the purpose of brand royalty | According to Trademark License Contract, the Company will pay trademark royalty for the ??Changyu‘‘ products of Yantai Changyu Group Co., Ltd every year, Yantai Changyu Group Co., Ltd will use trademark royalty to advertise ??Changyu‘‘ trademarks and Contracted products in this contract. | 1997.05.18 | Forever | Has been performing strictly | |
| Equity incentive commitments |
Commitments atmiddle and smallshareholders ofthe Company
| Commitments at middle and small shareholders of the Company | ||||||
| Commitment under timely implementation or not | Yes | |||||
| Whether or not to have specific reasons of the unimplemented commitment and next steps | No | |||||
4. The appointment and dismissal of certified public accountantsWhether the semi-annual report has been audited
□ Yes ?No
The semi-annual report has not been audited.
5. Explanation from the board of directors for the “Non-standard Audit Report” of last year
□Available ?Not available
6. Explanation from the board of directors for the “Non-standard Audit Report” of last year□Available ?Not available
7. Bankruptcy reorganization
□Available ?Not available
There are no related issues of bankruptcy reorganization happened during the report period and until the report period.
8. Litigation Issue
Material litigation and arbitration
□Available ?Not available
There are no material litigation and arbitration during the report period.
Other Litigation Issue
□Available ?Not available
9. Penalty and rectification
□Available ?Not available
There are no penalties or rectifications during the report period.
10. Credit of the Company, holding shareholders and actual controllers
?Available □Not available
There is no situation such as court effective judgment is failure to execute, a large amount ofdebt expires but it is unpaid by the company, holding shareholders and actual controllers.
11. Implementation of the Company’s equity inventive plan, employee stock ownership
plan or other employee incentive measures
□Available ?Not availableThere are no implementation of the Company‘s equity inventive plan, employee stock
ownership plan and other employee incentive measures.
12. Significant related transactions
1) Related transactions in relation to routine operations
?Available □Not available
Related transactions in relation to routine operations, please refer to XII "Related party andRelated Transaction" in the chapter X "Financial Report".
2) Related transactions in relation to acquisition and sales of assets or equity
□Available ?Not available
There are no related transactions in relation to acquisition or sales of assets or equity duringthe report period.
3) Related transactions in relation to common foreign investment
□Available ?Not available
There are no related transactions in relation to common foreign investment during the reportperiod.
4) Related current credit and debt
?Available □Not available
Whether or not to exist non-operating related credit and debt
□Yes ?No
There are no non-operating related credit and debt during the report period.
5) Other major related transactions
□Available ?Not available
There are no other major related transactions during the report period.
13. Non-business capital occupying of listed company by controlling shareholder and itsrelated parties
□Available ?Not available
There are no non-business capitals occupying of listed company by controlling shareholderand its related parties during the report period.
14. Major and important contracts and execution results
1) Trusteeship, contract and leasehold issues
(1) Trusteeship situation
□Available ?Not available
There is no trusteeship situation during the report period.
(2) Contract situation
?Available □Not available
Contract situation description
During the report period, about the Company‘s contract operation situation, please refer to―41. Other payables‖ in Annex 7 ―Notes to consolidated financial statement‖ in the financial
report of this report.
Project in gains and losses for the Company to achieve more than 10% of the total profit
□Available ?Not available
There are no contract projects in gains and losses for the Company to achieve more than 10%of the total profit during the report period.
(3) Leasehold situation
?Available □Not available
Leasehold situation description
On January 1
st
, 2017, the Company renewed the Space Lease Agreement with the controllingshareholder Changyu Group. The Company leased the space with 15196.94 square meterslocated at 174 Shihuiyao Road, Zhifu District,Yantai City. The rent per year is CNY1.4645million with a rental period of 5 years from January 1
st
, 2017 to December 31
st
, 2021. OnJanuary 1
st
, 2017, the Company‘s subordinate Sales&Marketing Co. of Yantai Changyu
Pioneer Wine Company Limited. Brand Sales Department renewed the Space LeaseAgreement with the controlling shareholder Changyu Group, leasing the space with 42552.83square meters located at 1 Jichang Road, Zhifu District, Yantai City and the space with 3038square meters located at 56 Dama Road, Zhifu District, Yantai City, which are all under thename of controlling shareholder. The rent of the above spaces per year is CNY4.3935millionwith a rental period of 5 years from January 1st, 2017 to December 31
st
, 2021.On July 1
st
, 2017, this company signed a house-leasing contract with Yantai ShenmaPackaging Company Limited. According to this contract, since July 1
st
, 2017, this companyleased property to Yantai Shenma Packaging Company Limited for a business purpose withthe annual rent of CNY1,626,880. This contract expires on June 30
th
, 2022.
Project in gains and losses for the Company to achieve more than 10% of the total profit
□Available ?Not available
There are no leasehold projects in gains and losses for the Company to achieve more than10% of the total profit during the report period.
2) Major guarantee
?Available □Not available
(1) Guarantee situation
Unit: CNY‘0000
External guarantee of the Company and its subsidiaries（excluding guarantee to subsidiaries）
| External guarantee of the Company and its subsidiaries（excluding guarantee to subsidiaries） | ||||||||
| Guarantee object name | Disclosure date of related announcement about guarantee quota | Guarantee quota | Actual date of occurrence (date of agreement) | Actual guarantee amount | Guarantee type | Guarantee Period | Whether or not complete implementation | Whether or not belong to related-party guarantee |
| Yantai Economic and Technological Development Zone Management Council. | 2016.12.22 | 34,160 | 2016.12.21 | 34,160 | Mortgage; Pledge | 10years | No | No |
| Total of the external guarantee quota approved during the report period (A1) | 0 | Total of the actual external guarantee amount during the report period (A2) | 0 | |||||
| Total of the external guarantee quota approved by the end of the report period (A3) | 34,160 | Balance of the actual external guarantee by the end of the report period (A4) | 34,160 | |||||
| Guarantee situations between the Company and subsidiaries | ||||||||
| Guarantee object name | Disclosure date of related announcement about guarantee quota | Guarantee quota | Actual date of occurrence (date of agreement) | Actual guarantee amount | Guarantee type | Guarantee Period | Whether or not complete implementation | Whether or not belong to related-party guarantee |
| Sales & Marketing Company of Yantai Changyu Pioneer Wine Company Limited | 2016.10.31 | 10,000 | 2016.11.05 | 10,000 | Joint liability assurance | 2 years | No | Yes |
Yantai Changyu PioneerWine Company Limited
| Yantai Changyu Pioneer Wine Company Limited | 2016.12.22 | 11,984 | 2016.12.21 | 11,984 | Mortgage; Pledge | 10 years | No | Yes |
| Yantai Changyu Wine Research and Development Company Limited | 2016.12.22 | 72,176 | 2016.12.21 | 72,176 | Joint liability assurance; Mortgage | 10 years | No | Yes |
| Kilikanoon Estate Pty Ltd | 2017.12.12 | 7,100 | 2018.01.09 | 7,100 | Joint liability assurance | 1 year | No | Yes |
| Total of the guarantee quota approved to subsidiaries during the report period (B1) | 0 | Total of the actual guarantee amount for subsidiaries during the report period (B2) | 7,100 | |||||
| Total of the guarantee quota approved to subsidiaries by the end of the report period (B3) | 89,276 | Balance of the actual guarantee for subsidiaries by the end of the report period (B4) | 89,276 | |||||
| Guarantee situations between subsidiaries | ||||||||
| Guarantee object name | Disclosure date of related announcement about guarantee quota | Guarantee quota | Actual date of occurrence (date of agreement) | Actual guarantee amount | Guarantee type | Guarantee Period | Whether or not complete implementation | Whether or not belong to related-party guarantee |
| Hacienda Y Vinedos Marques Del Atrio. SL | 2016.04.29 | 3,502 | 2015.10.08 | 3,502 | Mortgage | Long-term | No | No |
| Indomita Wine Company Chile, SpA | 2018.04.23 | 1,986 | 2018.04.20 | 1,986 | Mortgage | Long-term | No | No |
| Total of the guarantee quota approved to | 0 | Total of the actual guarantee amount | 5,488 | |||||
subsidiaries during the report period (C1)
| subsidiaries during the report period (C1) | for subsidiaries during the report period (C2) | |||
| Total of the guarantee quota approved to subsidiaries by the end of the report period (C3) | 5,488 | Balance of the actual guarantee for subsidiaries by the end of the report period (C4) | 5,488 | |
| Total guarantee amount of the Company（Total of above three major items） | ||||
| Total of the approved guarantee quota during the report period（A1+B1+C1） | 0 | Total of the actual guarantee amount during the report period（A2+B2+C2） | 12,588 | |
| Total of the approved guarantee quota by the end of the report period（A3+B3+C3） | 128,924 | Balance of the actual guarantee by the end of the report period（A4+B4+C4） | 128,924 | |
| The proportion of actual total guarantee amount (A4+B4+C4) accounting for the Company‘s net asset | 13.52% | |||
| Among : | ||||
| The amount of guarantee for shareholders, actual controllers and their related parties（D） | 0 | |||
| The amount of debt guarantee for the guaranteed objects whose asset-liability ratio is more than 70% directly or indirectly（E） | 0 | |||
| Total amount of guarantee of the part that exceeds 50% of net assets（F） | 0 | |||
| Total amount of the above-mentioned three items（D+E+F） | 0 | |||
(2) Illegal external guarantee
□Available ?Not available
There is no illegal guarantee situation during the report period.
3) Other important contracts
□Available ?Not available
There are no other important contracts during the report period.
15. Situation for Social Responsibility
1) Major environmental situation
The listed company and its subsidiaries are whether or not to belong to the heavy pollution industry stipulated by the state environmentalprotection department.
□Yes ?No
2) Situation for carrying out social responsibility of targeted poverty
(1) Targeted poverty planNo(2) Summary of semi-annual targeted povertyZhuqiao town in Yantai Laizhou locates in hilly land. The life of farmers living here depends on the weather and their income is very low. Since2013, the Company has planted 8000 mu of wine-making grapes adapting to the infertile soil in here and employed more than 600 farmers in
around 16 villages to work in the vineyard, making these farmers‘ average annual income increase CNY10 thousand. This not only is beneficial
for local green ecology construction but also drives local farmers to overcome poverty and achieve prosperity. At present ,there is nopoverty-stricken family in these 16 villages.
(3) Targeted poverty effectiveness
The Company has adopted the mode of ―Company+Cooperative+Farmer‖ to achieve the layout of 200 thousands of mu of grape bases in
domestic six producing regions including Xinjiang, Ningxia, Yantai, Liaoning, Shaanxi and Hebei and so on, bringing about CNY800million tonationwide fruit farmers every year and driving thousands of farmers to overcome poverty and achieve prosperity.
(4) Subsequent targeted poverty planNo
16. Other Major issues
□Available ?Not available
There are no other major issues need to be explained during the report period.
17. Major issues of Company’s subsidiaries□Available ?Not available
VI. Changes in Shares and the Shareholders’ Situation
1. Changes in shares
1) Changes in shares
Unit: share
| Amount before this change | Change (+, -) | Amount after this change | |||||||
| Amount | Percentage % | Allot new share | Distribute bonus share | Transfer other capital to share capital | others | Sub total | Amount | Percentage % | |
| 1、Unrestricted shares | 685,464,000 | 100% | 685,464,000 | 100% | |||||
| (1) A shares | 453,460,800 | 66.15% | 453,460,800 | 66.15% | |||||
| (2) B shares | 232,003,200 | 33.85% | 232,003,200 | 33.85% | |||||
| 2、Total shares | 685,464,000 | 100% | 685,464,000 | 100% | |||||
Cause of share change
□Available ?Not available
Approval of share change
□Available ?Not available
Transfer of changed shares
□Available ?Not available
The influence of share change on the financial indicators such as basic earnings per share, diluted earnings per share of the latest year and the
latest period, net asset per share belonging to the Company‘s common shareholders, etc.□Available ?Not available
Other contents the Company thinks necessary or securities regulatory departments ask to make public.
□Available ?Not available
2) Changes in restricted shares
□Available ?Not available
2. Securities issuance and listing situation
□Available ?Not available
3. Situation for shareholders and the actual controllers
Unit：share
Total common shareholders at the end ofreport period
| Total common shareholders at the end of report period | 40,428 (21,831 of Stock A and 18,597 of Stock B) | Total number of preferred shareholder recovering voting power at the end of report period | 0 | |||||||
| Shareholders holding more than 5% or the top 10 shareholders holding situation | ||||||||||
| Name of Shareholders | Character of shareholders | Percentage | Shares held until the end of | Changes | Number | Number of | Pledged or frozen | |||
(%)
| (%) | the report period | during the report period | of restricted shares | unrestricted shares | Share status | Amount | ||
| YANTAI CHANGYU GROUP CO. LTD. | Domestic non-state-owned legal person | 50.40% | 345,473,856 | 0 | 0 | 345,473,856 | 0 | |
| GAOLING FUND,L.P. | Foreign legal person | 3.08% | 21,090,219 | 0 | 0 | 21,090,219 | 0 | |
| CHINA SECURITIES FINANCE CORP | State-owned legal person | 2.27% | 15,531,455 | -107,200 | 0 | 15,531,455 | 0 | |
| BBH BOS S/A FIDELITY FD - CHINA FOCUS FD | Foreign legal person | 2.22% | 15,241,826 | 0 | 0 | 15,241,826 | 0 | |
| SHENWAN HONGYUAN SECURITIES(HONG KONG) LIMITED | Foreign legal person | 1.19% | 8,144,869 | 1,590,215 | 0 | 8,144,869 | 0 | |
| GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED | Foreign legal person | 0.95% | 6,535,089 | -293,408 | 0 | 6,535,089 | 0 | |
| FIDELITY PURITAN TRUST: FIDELITY SERIES INTRINSIC OPPORTUNITIES FUND | Foreign legal person | 0.89% | 6,100,762 | 0 | 0 | 6,100,762 | 0 | |
| CENTRAL HUIJIN ASSET MANAGEMENT LTD. | State-owned legal person | 0.69% | 4,761,200 | 0 | 0 | 4,761,200 | 0 |
VANGUARDEMERGINGMARKETS STOCKINDEX FUND
| VANGUARD EMERGING MARKETS STOCK INDEX FUND | Foreign legal person | 0.55% | 3,788,487 | 0 | 0 | 3,788,487 | 0 | ||||||
| FIDELITY CHINA SPECIAL SITUATIONS PLC | Foreign legal person | 0.55% | 3,779,202 | 0 | 0 | 3,779,202 | 0 | ||||||
| Strategic investors or legal result of the placement of new shares to become a top 10 shareholders(if have)(see note 3) | No | ||||||||||||
| The explanation for the associated relationship and accordant action | Among the top 10 shareholders, Yantai Changyu Group Company Limited has no associated relationship or accordant action relationship with the other 9 listed shareholders, and the relationship among the other shareholders is unknown. | ||||||||||||
| The top 10 shareholders with unrestricted shares | |||||||||||||
| Name of Shareholders | Number of unrestricted shares held until the end of the year | Type of share | |||||||||||
| Type of share | Amount | ||||||||||||
| YANTAI CHANGYU GROUP CO. LTD. | 345,473,856 | A | 345,473,856 | ||||||||||
| GAOLING FUND,L.P. | 21,090,219 | B | 21,090,219 | ||||||||||
| CHINA SECURITIES FINANCE CORP | 15,531,455 | A | 15,531,455 | ||||||||||
| BBH BOS S/A FIDELITY FD - CHINA FOCUS FD | 15,241,826 | B | 15,241,826 | ||||||||||
| SHENWAN HONGYUAN SECURITIES(HONG KONG) LIMITED | 8,144,869 | B | 8,144,869 | ||||||||||
| GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED | 6,535,089 | B | 6,535,089 | ||||||||||
| FIDELITY PURITAN TRUST: FIDELITY SERIES INTRINSIC OPPORTUNITIES FUND | 6,100,762 | B | 6,100,762 | ||||||||||
| CENTRAL HUIJIN ASSET MANAGEMENT LTD. | 4,761,200 | A | 4,761,200 | ||||||||||
| VANGUARD EMERGING MARKETS STOCK INDEX FUND | 3,788,487 | B | 3,788,487 | ||||||||||
FIDELITY CHINA SPECIAL SITUATIONS PLC
| FIDELITY CHINA SPECIAL SITUATIONS PLC | 3,779,202 | B | 3,779,202 |
| The explanation for the associated relationship and accordant action of the top 10 shareholders with unrestricted shares, the the associated relationship and accordant action between the top 10 shareholders with unrestricted shares and the top 10 shareholders | Among the top 10 shareholders, Yantai Changyu Group Company Limited has no associated relationship or accordant action relationship with the other 9 listed shareholders, and the relationship among the other shareholders is unknown. | ||
| Explanation for the top 10 shareholders who involved in financing activities and stock trading business (if have)(see note 4) | The top 10 shareholders do not involve in financing activities and stock trade business. | ||
Whether or not the Company‘s top 10 common shareholders and shareholders with unrestricted shares take agreed repurchase trading during the
report period
□Yes ?NoThere is no agreed repurchase trading taken by the Company‘s top 10 common shareholders and shareholders with unrestricted shares during the
report period.
4. Changes of controlling shareholders or the actual controllers situationChanges of the controlling shareholders during the report period
□Available ?Not available
There is no any change of the controlling shareholders during the report period.Changes of the actual controllers during the report period
□Available ?Not available
There is no any change of the actual controllers during the report period.
VII. Related Situation of Preferred Shares
□Available ?Not available
VIII. Situation for Directors, Supervisors, Senior Management Staffs
1. Changes in shareholdings of directors, supervisors and senior management staffs
□Available ?Not available
There are no any changes in shareholdings of directors, supervisors and senior management staffsduring the report period, details see 2017 annual report
2. Personnel changes in Company's directors, supervisors and senior management
?Available □Not available
Name
| Name | Positions held | Type | Date | Reason |
| Sun Liqiang | Chairman | leaving the post | 2017.12.08 | Resigning from the post of chairman on his own initiative and no longer serving as chairman; currently serving as director of the Company |
| Zhou Hongjiang | Vice chairman | leaving the post | 2018.01.08 | Resigning from the post of vice chairman on his own initiative, no longer serving as vice chairman, and is elected to serve as chairman; currently serving as chairman of the Company |
| Zhou Hongjiang | General manager | Non-reappointment | 2018.01.08 | Resigning from the post of general manager on his own initiative and no longer serving as general manager; currently serving as director of the Company |
| Leng Bin | Vice general manager | Non-reappointment | 2018.01.08 | Resigning from the post of vice general manager on his own initiative and no longer serving as vice |
general manager; currentlyserving as director of theCompany.
| general manager; currently serving as director of the Company. | ||||
| Sun Jian | Vice-general manager | Appointed and removed | 2018.01.08 | Being appointed as general manager and removed from vice general manager; currently serving as the general manager of the Company |
| Peng Bin | Vice general manager | Appointed | 2018.01.08 | Being appointed as vice general manager; currently serving as vice general manager of the Company |
| Jiang Jianxun | Chief financial officer | Appointed | 2018.01.08 | Being appointed as chief financial officer; currently serving as chief financial officer and finance manager of the Company |
IX. Related Situation of Corporation Bonds
Whether or not the Company has the corporation bonds issued in public, listed in the stock
exchange, not due on the Semi-annual report‘s authorized issue date or failed to pay in full on
the due date.No
X. Financial Report
1. Audit report
Whether the semiannual report has been audited
□ Yes √ No
2. Financial statement
The unit in the statements of the financial annotations is RMB Yuan.2.1 Consolidated balance sheet
Compiling unit: Yantai Changyu Pioneer Wine Co., Ltd. June 30, 2018 Unit: Yuan
Item
| Item | Note | Ending balance | Beginning balance |
| Current assets: | |||
| Monetary fund | 7.1 | 1,683,038,453 | 1,402,522,509 |
| Settlement reserves | |||
| Lending funds | |||
| Financial assets measured at the fair value and the variation of which is recorded into the current profit and loss | |||
| Derivative financial assets | |||
| Bills receivable | 7.2 | 367,210,884 | 244,796,818 |
| Accounts receivable | 7.3 | 243,413,092 | 263,796,355 |
| Advance payment | 7.4 | 3,122,797 | 2,417,931 |
| Premium receivable | |||
| Reinsurance accounts receivable | |||
| Receivable reserves for reinsurance contract | |||
| Interest receivable | 7.5 | 1,218,373 | 240,968 |
| Dividends receivable | |||
| Other receivables | 7.6 | 16,500,022 | 18,737,454 |
| Buying back the sale of financial assets | |||
| Inventories | 7.7 | 2,338,925,432 | 2,473,614,046 |
| Assets held for sale | 7.8 | 2,000,197 | 2,000,197 |
| Non-current assets due within one year | |||
| Other current assets | 7.9 | 362,977,990 | 230,822,759 |
| Total current assets | 5,018,407,240 | 4,638,949,037 | |
| Non-current assets: | |||
| Offering loans and imprest | |||
| Available-for-sale financial assets | 7.10 | 463,880 | 467,251 |
| Held-to-maturity investments | |||
| Long-term receivables | |||
| Long-term equity investments | |||
| Investment real estate | 7. 11 | 17,877,379 | 18,467,989 |
| Fixed assets | 7.12 | 5,457,575,677 | 5,329,083,969 |
| Construction in progress | 7.13 | 1,015,914,753 | 1,026,141,569 |
Item
| Item | Note | Ending balance | Beginning balance |
| Construction materials | |||
| Disposal of fixed assets | |||
| Productive biological assets | 7.14 | 202,661,748 | 201,929,888 |
| Oil and gas assets | |||
| Intangible assets | 7.15 | 662,694,276 | 655,448,897 |
| Development expenditure | |||
| Goodwill | 7.16 | 163,930,875 | 128,135,981 |
| Long-term prepaid expenses | 7.17 | 227,993,424 | 230,009,231 |
| Deferred tax assets | 7.18 | 270,988,173 | 308,121,396 |
| Other non-current assets | |||
| Total non-current assets | 8,020,100,185 | 7,897,806,171 | |
| Total assets | 13,038,507,425 | 12,536,755,208 | |
| Current liabilities: | |||
| Short-term loans | 7.19 | 750,454,676 | 714,434,286 |
| Borrowings from the Central Bank | |||
| Customer and interbank deposits | |||
| Borrowing funds | |||
| Financial liabilities measured at the fair value and the variation of which is recorded into the current profit and loss | |||
| Derivative financial liabilities | |||
| Bills payable | |||
| Accounts payable | 7.20 | 505,856,955 | 666,442,879 |
| Advances from customers | 7.21 | 366,355,280 | 350,894,156 |
| Financial assets sold for repurchase | |||
| Handling fees and commissions payable | |||
| Employee remunerations | 7.22 | 177,995,138 | 210,824,234 |
| Taxes payable | 7.23 | 73,859,747 | 145,094,156 |
| Interest payable | 7.24 | 834,247 | 771,250 |
| Dividends payable | 7.25 | 746,021 | |
| Other payables | 7.26 | 671,707,915 | 602,964,319 |
| Dividend payable for reinsurance | |||
| Reserves for insurance contracts | |||
| Acting trading securities | |||
| Acting underwriting securities | |||
| Liabilities held for sale | |||
| Non-current liabilities due within one year | 7.27 | 140,570,388 | 110,954,827 |
| Other current liabilities | 7.28 | 16,311,727 | 16,878,199 |
| Total current liabilities | 2,704,692,094 | 2,819,258,306 | |
| Non-current liabilities: | |||
| Long-term borrowings | 7.29 | 153,965,191 | 156,125,854 |
| Bonds payable | |||
| Including: Preferred stock | |||
| Perpetual capital securities | |||
| Long-term accounts payable | 7.30 | 235,000,000 | 259,000,000 |
| Long-term employee remunerations payable | |||
| Special accounts payable |
Item
| Item | Note | Ending balance | Beginning balance |
| Estimated liabilities | |||
| Deferred income | 7.31 | 92,340,427 | 92,918,855 |
| Deferred tax liabilities | 7.18 | 26,020,063 | 24,264,203 |
| Other non-current liabilities | 7.32 | 6,848,847 | 7,209,312 |
| Total non-current liabilities | 514,174,528 | 539,518,224 | |
| Total liabilities | 3,218,866,622 | 3,358,776,530 | |
| Owner’s equity: | |||
| Capital stock | 7.33 | 685,464,000 | 685,464,000 |
| Other equity instruments | |||
| Including: Preferred stock | |||
| Perpetual capital securities | |||
| Capital surplus | 7.34 | 565,955,441 | 565,955,441 |
| Minus: Treasury stock | |||
| Other comprehensive income | 7.35 | -6,121,580 | 3,109,240 |
| Special reserves | |||
| Surplus reserves | 7.36 | 342,732,000 | 342,732,000 |
| General risk preparation | |||
| Retained earnings | 7.37 | 7,944,919,023 | 7,309,081,618 |
| Total owner‘s equities attributable to the parent company | 9,532,948,884 | 8,906,342,299 | |
| Minority equity | 286,691,919 | 271,636,379 | |
| Total owner‘s equities | 9,819,640,803 | 9,177,978,678 | |
| Total liabilities and owner‘s equities | 13,038,507,425 | 12,536,755,208 |
Legal Representative: Zhou Hongjiang Accounting Supervisor: Jiang Jianxun Accounting Department Manager: JiangJianxun
2.2 Balance sheet of the parent company
Compiling unit: Yantai Changyu Pioneer Wine Co., Ltd. Unit: Yuan
| Item | Note | Ending balance | Beginning balance |
| Current assets: | |||
| Monetary fund | 818,844,330 | 559,174,466 | |
| Financial assets measured at the fair value and the variation of which is recorded into the current profit and loss | |||
| Derivative financial assets | |||
| Bills receivable | 33,180,494 | 41,645,203 | |
| Accounts receivable | 15.1 | 12,408,787 | 7,805,333 |
| Advance payment | 453,842 | 99,673 | |
| Interest receivable | 87,014 | 76,646 | |
| Dividends receivable | 2,238,064 | 407,495,922 | |
| Other receivables | 15.2 | 509,269,034 | 592,274,075 |
| Inventories | 393,024,758 | 348,042,053 | |
| Assets held for sale | 2,000,197 | 2,000,197 | |
| Non-current assets due within one year | |||
| Other current assets | 34,997,149 | 29,706,058 | |
| Total current assets | 1,806,503,669 | 1,988,319,626 |
Item
| Item | Note | Ending balance | Beginning balance |
| Non-current assets: | |||
| Available-for-sale financial assets | |||
| Held-to-maturity investments | |||
| Long-term receivables | |||
| Long-term equity investments | 15.3 | 4,617,128,388 | 4,511,202,204 |
| Investment real estate | 17,877,379 | 18,467,989 | |
| Fixed assets | 273,244,802 | 288,150,901 | |
| Construction in progress | 11,388,924 | 6,756,349 | |
| Construction materials | |||
| Disposal of fixed assets | |||
| Productive biological assets | 120,973,169 | 119,572,539 | |
| Oil and gas assets | |||
| Intangible assets | 68,433,643 | 69,623,219 | |
| Development expenditure | |||
| Goodwill | |||
| Long-term prepaid expenses | |||
| Deferred tax assets | 22,493,100 | 28,787,907 | |
| Other non-current assets | 3,721,606,444 | 3,718,674,166 | |
| Total non-current assets | 8,853,145,849 | 8,761,235,274 | |
| Total assets | 10,659,649,518 | 10,749,554,900 | |
| Current liabilities: | |||
| Short-term loans | 200,000,000 | 600,000,000 | |
| Financial liabilities measured at the fair value and the variation of which is recorded into the current profit and loss | |||
| Derivative financial liabilities | |||
| Bills payable | |||
| Accounts payable | 82,489,858 | 97,833,124 | |
| Advances from customers | 6,000,000 | 6,000,000 | |
| Employee remunerations | 59,439,264 | 70,108,076 | |
| Taxes payable | 5,443,037 | 14,569,690 | |
| Interest payable | 238,356 | 652,500 | |
| Dividends payable | |||
| Other payables | 573,572,022 | 544,713,172 | |
| Liabilities held for sale | |||
| Non-current liabilities due within one year | |||
| Other current liabilities | 3,693,054 | 3,953,054 | |
| Total current liabilities | 930,875,591 | 1,337,829,616 | |
| Non-current liabilities: | |||
| Long-term borrowings | |||
| Bonds payable | |||
| Including: Preferred stock | |||
| Perpetual capital securities | |||
| Long-term accounts payable | |||
| Long-term employee remuneration payable | |||
| Special accounts payable | |||
| Estimated liabilities |
Item
| Item | Note | Ending balance | Beginning balance |
| Deferred income | 11,253,946 | 12,970,473 | |
| Deferred tax liabilities | |||
| Other non-current liabilities | 2,235,802 | 2,235,802 | |
| Total non-current liabilities | 13,489,748 | 15,206,275 | |
| Total liabilities | 944,365,339 | 1,353,035,891 | |
| Owner’s equity: | |||
| Capital stock | 685,464,000 | 685,464,000 | |
| Other equity instruments | |||
| Including: Preferred stock | |||
| Perpetual capital securities | |||
| Capital surplus | 557,222,454 | 557,222,454 | |
| Minus: Treasury stock | |||
| Other comprehensive income | |||
| Special reserves | |||
| Surplus reserves | 342,732,000 | 342,732,000 | |
| Retained earnings | 8,129,865,725 | 7,811,100,555 | |
| Total owner‘s equities | 9,715,284,179 | 9,396,519,009 | |
| Total liabilities and owner‘s equities | 10,659,649,518 | 10,749,554,900 |
Legal Representative: Zhou Hongjiang Accounting Supervisor: Jiang Jianxun Accounting Department Manager:
Jiang Jianxun
2.3 Consolidated profit statement
Compiling unit: Yantai Changyu Pioneer Wine Co., Ltd. Unit: Yuan
| Item | Note | Sum of current period | Sum of prior period |
| 1. Total operating income | 2,828,230,064 | 2,767,098,197 | |
| Including: Operating income | 7.38 | 2,828,230,064 | 2,767,098,197 |
| Interest income | |||
| Earned premium | |||
| Handling fee and commission income | |||
| 2. Total operating costs | 2,018,939,458 | 1,890,800,616 | |
| Including: Operating costs | 7.38 | 974,557,292 | 925,754,133 |
| Interest expenditure | |||
| Handling fees and commission expenditure | |||
| Premium rebate | |||
| Net amount of indemnity expenditure | |||
| Net amount of the withdrawn reserve fund for insurance contract | |||
| Policy bonus payment | |||
| Amortized reinsurance expenditures | |||
| Taxes and surcharges | 7.39 | 165,276,251 | 160,473,998 |
| Selling expenses | 7.40 | 710,659,033 | 668,735,726 |
| Administrative expenses | 7.41 | 160,091,888 | 130,542,386 |
| Financial expenses | 7.42 | 13,085,942 | 11,147,949 |
| Loss on impairment of assets | 7.43 | -4,730,948 | -5,853,576 |
Plus: Fair value change profit (loss is listed with "-")
| Plus: Fair value change profit (loss is listed with "-") | |||
| Investment profit (loss is listed with "-") | |||
| Including: Investment profit for joint-run business and joint venture | |||
| Exchange income (loss is listed with "-") | |||
| Income from asset disposal (loss is listed with "-") | 7.44 | 93,958 | -495,071 |
| Other income | 7.45 | 37,982,878 | |
| 3. Operating profit (loss is listed with "-") | 847,367,442 | 875,802,510 | |
| Plus: Non-operating income | 7.46 | 2,006,392 | 23,147,605 |
| Minus: Non-operating expenses | 7.47 | 1,392,362 | 186,568 |
| 4. Total profits (total loss is listed with "-") | 847,981,472 | 898,763,547 | |
| Minus: Income tax expenses | 7.48 | 211,979,735 | 228,752,790 |
| 5. Net profit (net loss is listed with "-") | 636,001,737 | 670,010,757 | |
| 5.1 Net profit from continuing operation (net loss is listed with "-") | 636,001,737 | 670,010,757 | |
| 5.2 Net profit from terminating operation (net loss is listed with "-") | |||
| Net profit attributable to owner of the parent company | 635,837,405 | 670,069,054 | |
| Minority interest income | 164,332 | -58,297 | |
| 6. Net after-tax amount of other comprehensive income | 7.49 | -11,126,413 | 1,767,741 |
| Net after-tax amount of other comprehensive income attributable to owner of the parent company | -9,230,820 | 1,458,809 | |
| 6.1 Other comprehensive income not to be reclassified into profit and loss later | |||
| 6.1.1 Net liabilities or net assets change after remeasuring and resetting the benefit plans | |||
| 6.1.2 Share enjoyed in other comprehensive income not to be reclassified into profit and loss in invested unit under equity law | |||
| 6.2 Other comprehensive income to be reclassified into profit and loss later | -9,230,820 | 1,458,809 | |
| 6.2.1 Share enjoyed in other comprehensive income to be reclassified into profit and loss in invested unit under equity law | |||
| 6.2.2 Profit and loss from changes in fair value of financial assets for sale | |||
| 6.2.3 Profit and loss from reclassification of held-to-maturity investment into fair value of financial assets for sale | |||
| 6.2.4 Effective part of profit and loss of cash-flow hedge | |||
| 6.2.5 Difference in translation of Foreign Currency Financial Statement | -9,230,820 | 1,458,809 | |
| 6.2.6 Other | |||
| Net after-tax amount of other comprehensive income attributable to minority shareholders | -1,895,593 | 308,932 | |
| 7. Total comprehensive income | 624,875,324 | 671,778,498 | |
| (1) Attributable to owner of the parent company | 626,606,585 | 671,527,863 | |
| (2) Attributable to minority shareholders | -1,731,261 | 250,635 | |
| 8. Earnings per share | |||
| 8.1 Basic earnings per share | 0.93 | 0.98 | |
| 8.2 Diluted earnings per share | 0.93 | 0.98 |
Legal Representative: Zhou Hongjiang Accounting Supervisor: Jiang Jianxun Accounting Department Manager:
Jiang Jianxun
2.4 Profit statement of the parent company
Compiling unit: Yantai Changyu Pioneer Wine Co., Ltd. Unit: Yuan
Item
| Item | Note | Sum of current period | Sum of prior period |
| 1. Operating income | 15.4 | 408,845,211 | 831,820,503 |
| Minus: Operating costs | 15.4 | 352,646,989 | 737,950,378 |
| Taxes and surcharges | 24,463,375 | 48,865,790 | |
| Selling expenses | |||
| Administrative expenses | 40,187,747 | 40,078,068 | |
| Financial expenses | -15,151,608 | 9,292,969 | |
| Loss on impairment of assets | |||
| Plus: Fair value change profit (loss is listed with "-") | |||
| Investment profit (loss is listed with "-") | 15.5 | 312,409,576 | 66,127,980 |
| Including: Investment profit for joint-run business and joint venture | |||
| Income from asset disposal (loss is listed with "-") | 75,000 | 10,448 | |
| Other income | 1,976,527 | ||
| 2. Operating profit (loss is listed with "-") | 321,159,811 | 61,771,726 | |
| Plus: Non-operating income | 56,479 | 1,001,523 | |
| Minus: Non-operating expenses | 528 | 20,257 | |
| 3. Total profits (total loss is listed with "-") | 321,215,762 | 62,752,992 | |
| Minus: Income tax expenses | 2,450,592 | -681,003 | |
| 4. Net profit (net loss is listed with "-") | 318,765,170 | 63,433,995 | |
| 4.1 Net profit from continuing operation (net loss is listed with "-") | 318,765,170 | 63,433,995 | |
| 4.2 Net profit from terminating operation (net loss is listed with "-") | |||
| 5. Net after-tax amount of other comprehensive income | |||
| 5.1 Other comprehensive income not to be reclassified into profit and loss later | |||
| 5.1.1 Net liabilities or net assets change after remeasuring and resetting the benefit plans | |||
| 5.1.2 Share enjoyed in other comprehensive income not to be reclassified into profit and loss in invested unit under equity law | |||
| 5.2 Other comprehensive income to be reclassified into profit and loss later | |||
| 5.2.1 Share enjoyed in other comprehensive income to be reclassified into profit and loss in invested unit under equity law | |||
| 5.2.2 Profit and loss from changes in fair value of financial assets for sale | |||
| 5.2.3 Profit and loss from reclassification of held-to-maturity investment into fair value of financial assets for sale | |||
| 5.2.4 Effective part of profit and loss of cash-flow hedge | |||
| 5.2.5 Difference in translation of Foreign Currency Financial Statement | |||
| 5.2.6 Other | |||
| 6. Total comprehensive income | 318,765,170 | 63,433,995 | |
| 7. Earnings per share | |||
| 7.1 Basic earnings per share | 0.47 | 0.09 | |
| 7.2 Diluted earnings per share | 0.47 | 0.09 |
Legal Representative: Zhou Hongjiang Accounting Supervisor: Jiang Jianxun Accounting Department Manager:
Jiang Jianxun
2.5 Consolidated cash flow statement
Compiling unit: Yantai Changyu Pioneer Wine Co., Ltd. Unit: Yuan
Item
| Item | Note | Sum of current period | Sum of prior period |
| 1. Cash flows from operating activities: | |||
| Cash received from sales of goods and rending of services | 2,680,388,050 | 2,524,565,138 | |
| Net increase in customer and interbank deposits | |||
| Net increase in borrowings from central bank | |||
| Net increase in borrowings from other financial institutions | |||
| Cash received from receiving insurance premium of original insurance contract | |||
| Net cash received from reinsurance business | |||
| Net increase in policy holder deposits and investment funds | |||
| Net increase after disposal of financial assets measured at the fair value and the variation of which is recorded into the current profit and loss | |||
| Cash received from collecting interest, handling fees and commission | |||
| Net increase in borrowings | |||
| Net increase in repurchasement business funds | |||
| Tax refund received | 26,089,608 | 12,777,072 | |
| Other cash received related to operating activities | 7.50 | 42,343,021 | 38,889,912 |
| Subtotal of cash flows of operating activities | 2,748,820,679 | 2,576,232,122 | |
| Cash paid for goods and services | 677,552,938 | 640,732,974 | |
| Net increase in customer loans and advances | |||
| Net increase in deposits in central bank and interbank deposits | |||
| Cash paid to original insurance contract payments | |||
| Cash paid to interest, handling fees and commission | |||
| Cash paid to policy bonus | |||
| Cash paid to and on behalf of employees | 278,814,385 | 239,805,346 | |
| Cash paid for taxes and expenses | 802,722,798 | 842,815,705 | |
| Other cash paid related to operating activities | 7.50 | 436,977,086 | 432,517,778 |
| Sub-total of cash outflows of operating activities | 2,196,067,207 | 2,155,871,803 | |
| Net cash flow from operating activities | 552,753,472 | 420,360,319 | |
| 2. Cash flow from investing activities: | |||
| Cash received from disinvestment | |||
| Cash received from withdrawal of fixed deposits | 305,000,000 | 3,000,000 | |
| Cash received from obtaining investment profit | 2,342,015 | 25,550 | |
| Cash received from disposal of fixed assets, intangible assets and other long-term assets | 471,130 | 237,161 | |
| Net cash received from disposal of branch and other business unit | |||
| Other cash received related to investing activities | |||
| Subtotal of cash flows of investment activities | 307,813,145 | 3,262,711 |
Item
| Item | Note | Sum of current period | Sum of prior period |
| Cash paid to acquire fixed assets, intangible assets and other long-term assets | 154,464,274 | 282,149,010 | |
| Cash for investment | |||
| Cash paid for purchasing fixed deposits | 340,000,000 | 201,000,000 | |
| Net increase in hypothecated loan | |||
| Net cash paid for acquiring branch and other business unit | 104,566,419 | ||
| Other cash paid related to investment activities | 7.50 | 317,654,642 | |
| Subtotal of cash outflows of investment activities | 599,030,693 | 800,803,652 | |
| Net cash flow from investing activities | -291,217,548 | -797,540,941 | |
| 3. Cash flow from financing activities | |||
| Cash received from acquiring investment | 48,396,726 | ||
| Including: cash received from acquiring minority shareholders investment by branch | 48,396,726 | ||
| Cash received from acquiring loans | 669,905,706 | 773,435,000 | |
| Cash received from issuing bonds | |||
| Other cash received related to financing activities | 7.50 | 23,521,431 | 1,303,473 |
| Subtotal cash flows of financing activities | 693,427,137 | 823,135,199 | |
| Cash paid for paying debts | 658,512,141 | 451,386,980 | |
| Cash paid for distributing dividend and profit or paying interest | 21,265,533 | 17,869,513 | |
| Including: dividend and profit paid to minority shareholders by branch | |||
| Other cash paid related to financing activities | 7.50 | 20,000,000 | |
| Subtotal of cash outflows of financing activities | 699,777,674 | 469,256,493 | |
| Net cash flow from financing activities | -6,350,537 | 353,878,706 | |
| 4. Influences of exchange rate fluctuation on cash and cash equivalents | -7,404,199 | -4,152,485 | |
| 5. Net Increase in cash and cash equivalents | 247,781,188 | -27,454,401 | |
| Plus: balance at the beginning of the period of cash and cash equivalents | 1,180,889,274 | 1,256,942,304 | |
| 6. Balance at the end of the period of cash and cash equivalents | 1,428,670,462 | 1,229,487,903 |
Legal Representative: Zhou Hongjiang Accounting Supervisor: Jiang Jianxun Accounting Department Manager:
Jiang Jianxun
2.6 Cash flow statement of the parent company
Compiling unit: Yantai Changyu Pioneer Wine Co., Ltd. Unit: Yuan
| Item | Sum of current period | Sum of prior period |
| 1. Cash flows from operating activities: | ||
| Cash received from sales of goods and rending of services | 275,862,358 | 570,587,513 |
| Tax refund received | ||
| Other cash received related to operating activities | 100,163,394 | 385,490,644 |
| Subtotal of cash flows of operating activities | 376,025,752 | 956,078,157 |
| Cash paid for goods and services | 200,935,534 | 269,148,068 |
| Cash paid to and on behalf of employees | 43,647,320 | 52,895,854 |
| Cash paid for taxes and expenses | 43,132,327 | 169,319,730 |
Item
| Item | Sum of current period | Sum of prior period |
| Other cash paid related to operating activities | 19,942,485 | 62,494,076 |
| Sub-total of cash outflows of operating activities | 307,657,666 | 553,857,728 |
| Net cash flow from operating activities | 68,368,086 | 402,220,429 |
| 2. Cash flow from investing activities: | ||
| Cash received from disinvestment | ||
| Cash received from withdrawal of fixed deposits | 305,000,000 | 3,000,000 |
| Cash received from obtaining investment profit | 720,009,450 | 198,082,845 |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 538,055.18 | 206,280 |
| Net cash received from disposal of branch and other business unit | ||
| Other cash received related to investing activities | ||
| Subtotal of cash flows of investment activities | 1,025,547,505.18 | 201,289,125 |
| Cash paid to acquiring fixed assets, intangible assets and other long-term assets | 11,968,401 | 3,295,270 |
| Cash for investment | 105,926,184 | 329,440,824.11 |
| Cash paid for purchasing fixed deposits | 340,000,000 | 104,999,999.89 |
| Net cash paid for acquiring branch and other business unit | ||
| Other cash paid related to investment activities | ||
| Subtotal of cash outflows of investment activities | 457,894,585 | 437,736,094 |
| Net cash flow from investing activities | 567,652,920.18 | -236,446,969 |
| 3. Cash flow from financing activities | ||
| Cash received from acquiring investment | ||
| Cash received from acquiring loans | 200,000,000 | 700,000,000 |
| Cash received from issuing bonds | ||
| Other cash received related to financing activities | ||
| Subtotal cash flows of financing activities | 200,000,000 | 700,000,000 |
| Cash paid for debts | 600,000,000 | 514,667,600 |
| Cash paid to distribute dividend, profit or pay interest | 11,660,417 | 9,720,581 |
| Other cash paid related to financing activities | ||
| Subtotal of cash outflows of financing activities | 611,660,417 | 524,388,181 |
| Net cash flow from financing activities | -411,660,417 | 175,611,819 |
| 4. Influences of exchange rate fluctuation on cash and cash equivalents | ||
| 5. Net Increase in cash and cash equivalents | 224,360,589.18 | 341,385,279 |
| Plus: balance at the beginning of the period of cash and cash equivalents | 493,568,866 | 238,003,198 |
| 6. Balance at the end of the period of cash and cash equivalents | 717,929,455.18 | 579,388,477 |
Legal Representative: Zhou Hongjiang Accounting Supervisor: Jiang Jianxun Accounting Department Manager:
Jiang Jianxun
2.7 Consolidated owner’s equity changing list
Unit: Yuan
Item
| Item | This period | ||||||||||||
| Owners‘ equity of the parent company | Minority shareholders‘ equity | Total owners‘ equity | |||||||||||
| Capital stock | Other equity instruments | Capital reserves | Minus: Treasury stock | Other comprehensive income | Special reserves | Surplus reserves | General risk preparation | Undistributed profits | |||||
| Preferred stock | Perpetual capital securities | Other | |||||||||||
| 1. Balance at the end of last year | 685,464,000 | 565,955,441 | 3,109,240 | 342,732,000 | 7,309,081,618 | 271,636,379 | 9,177,978,678 | ||||||
| Plus: Accounting policies changing | |||||||||||||
| Previous error correction | |||||||||||||
| Business combination under common control | |||||||||||||
| Other | |||||||||||||
| 2. Balance at the beginning of this year | 685,464,000 | 565,955,441 | 3,109,240 | 342,732,000 | 7,309,081,618 | 271,636,379 | 9,177,978,678 | ||||||
| 3. Increased or decreased amount in this period (reducing amount is listed with "-") | -9,230,820 | 635,837,405 | 15,055,540 | 641,662,125 | |||||||||
| 3.1 Total comprehensive income | -9,230,820 | 635,837,405 | -1,731,261 | 624,875,324 | |||||||||
| 3.2 Owners' invested and reduced capital | 17,532,822 | 17,532,822 | |||||||||||
| 3.2.1 Shareholders‘ invested common stock | |||||||||||||
| 3.2.2 Other equity instrument holders‘ invested capital | |||||||||||||
| 3.2.3 Amount of shares paid and reckoned in owners' equity | |||||||||||||
3.2.4 Other
| 3.2.4 Other | 17,532,822 | 17,532,822 | |||||||||||
| 3.3 Profit distribution | -746,021 | -746,021 | |||||||||||
| 3.3.1 Accrued surplus reserves | |||||||||||||
| 3.3.2 Accrued general risk preparation | |||||||||||||
| 3.3.3 Distribution to owners (or shareholders) | -746,021 | -746,021 | |||||||||||
| 3.3.4 Other | |||||||||||||
| 3.4 Internal transfer of owners' equity | |||||||||||||
| 3.4.1 Capital reserves transferred and increased capital (or capital stock) | |||||||||||||
| 3.4.2 Surplus reserves transferred and increased capital (or capital stock) | |||||||||||||
| 3.4.3 Surplus reserves covering deficit | |||||||||||||
| 3.4.4 Other | |||||||||||||
| 3.5 Special reserves | |||||||||||||
| 3.5.1 Withdrawal in this period | |||||||||||||
| 3.5.2 Usage in this period | |||||||||||||
| 3.6 Other | |||||||||||||
| 4. Balance at the end of this period | 685,464,000 | 565,955,441 | -6,121,580 | 342,732,000 | 7,944,919,023 | 286,691,919 | 9,819,640,803 |
Unit: Yuan
Item
| Item | Prior period | ||||||||||||
| Owners‘ equity of the parent company | Minority shareholders‘ equity | Total owners‘ equity | |||||||||||
| Capital stock | Other equity instruments | Capital reserves | Minus: Treasury stock | Other comprehensive income | Special reserves | Surplus reserves | General risk preparation | Undistributed profits | |||||
| Preferred stock | Perpetual capital securities | Other | |||||||||||
| 1. Balance at the end of last year | 685,464,000 | 565,955,441 | -5,259,014 | 342,732,000 | 6,620,118,562 | 190,473,697 | 8,399,484,686 | ||||||
| Plus: Accounting policies changing | |||||||||||||
| Previous error correction | |||||||||||||
| Business combination under common control | |||||||||||||
| Other | |||||||||||||
| 2. Balance at the beginning of this year | 685,464,000 | 565,955,441 | -5,259,014 | 342,732,000 | 6,620,118,562 | 190,473,697 | 8,399,484,686 | ||||||
| 3. Increased or decreased amount in this period (reducing amount is listed with "-") | 8,368,254 | 688,963,056 | 81,162,682 | 778,493,992 | |||||||||
| 3.1 Total comprehensive income | 8,368,254 | 1,031,695,056 | 3,594,080 | 1,043,657,390 | |||||||||
| 3.2 Owners' invested and reduced capital | 78,236,726 | 78,236,726 | |||||||||||
| 3.2.1 Shareholders‘ invested common stock | |||||||||||||
| 3.2.2 Other equity instrument holders‘ invested capital | |||||||||||||
| 3.2.3 Amount of shares paid and reckoned in owners' equity | |||||||||||||
| 3.2.4 Other | 78,236,726 | 78,236,726 | |||||||||||
3.3 Profit distribution
| 3.3 Profit distribution | -342,732,000 | -668,124 | -343,400,124 | ||||||||||
| 3.3.1 Drew surplus reserves | |||||||||||||
| 3.3.2 Drew general risk preparation | |||||||||||||
| 3.3.3 Distribution to owners (or shareholders) | -342,732,000 | -668,124 | -343,400,124 | ||||||||||
| 3.3.4 Other | |||||||||||||
| 3.4 Internal transfer of owners' equity | |||||||||||||
| 3.4.1 Capital reserves transferred and increased capital (or capital stock) | |||||||||||||
| 3.4.2 Surplus reserves transferred and increased capital (or capital stock) | |||||||||||||
| 3.4.3 Surplus reserves covering deficit | |||||||||||||
| 3.4.4 Other | |||||||||||||
| 3.5 Special reserves | |||||||||||||
| 3.5.1 Accrual in this period | |||||||||||||
| 3.5.2 Usage in this period | |||||||||||||
| 3.6 Other | |||||||||||||
| 4. Balance at the end of this period | 685,464,000 | 565,955,441 | 3,109,240 | 342,732,000 | 7,309,081,618 | 271,636,379 | 9,177,978,678 |
2.8 Owner’s equity changing list of the parent company
Unit: Yuan
Item
| Item | This period | ||||||||||
| Capital stock | Other equity instruments | Capital reserves | Minus: Treasury stock | Other comprehensive income | Special reserves | Surplus reserves | Undistributed profits | Total owners‘ equity | |||
| Preferred stock | Perpetual capital securities | Other | |||||||||
| 1. Balance at the end of last year | 685,464,000 | 557,222,454 | 342,732,000 | 7,811,100,555 | 9,396,519,009 | ||||||
| Plus: Accounting policies changing | |||||||||||
| Previous error correction | |||||||||||
| Other | |||||||||||
| 2. Balance at the beginning of this year | 685,464,000 | 557,222,454 | 342,732,000 | 7,811,100,555 | 9,396,519,009 | ||||||
| 3. Increased or decreased amount in this period (reducing amount is listed with "-") | 318,765,170 | 318,765,170 | |||||||||
| 3.1 Total comprehensive income | 318,765,170 | 318,765,170 | |||||||||
| 3.2 Owners' invested and reduced capital | |||||||||||
| 3.2.1 Shareholders‘ invested common stock | |||||||||||
| 3.2.2 Other equity instrument holder‘ invested capital | |||||||||||
| 3.2.3 Amount of shares paid and reckoned in owners' equity | |||||||||||
| 3.2.4 Other | |||||||||||
| 3.3 Profit distribution | |||||||||||
| 3.3.1 Drew surplus reserves | |||||||||||
| 3.3.2 Distribution to owners (or shareholders) | |||||||||||
| 3.3.3 Other | |||||||||||
| 3.4 Internal transfer of owners' equity | |||||||||||
| 3.4.1 Capital reserves transferred and | |||||||||||
increased capital (or capital stock)
| increased capital (or capital stock) | |||||||||||
| 3.4.2 Surplus reserves transferred and increased capital (or capital stock) | |||||||||||
| 3.4.3 Surplus reserves covering deficit | |||||||||||
| 3.4.4 Other | |||||||||||
| 3.5 Special reserves | |||||||||||
| 3.5.1 Accrual in this period | |||||||||||
| 3.5.2 Usage in this period | |||||||||||
| 3.6 Other | |||||||||||
| 4. Balance at the end of this period | 685,464,000 | 557,222,454 | 342,732,000 | 8,129,865,725 | 9,715,284,179 |
Unit: Yuan
| Item | Prior period | ||||||||||
| Capital stock | Other equity instruments | Capital reserves | Minus: Treasury stock | Other comprehensive income | Special reserves | Surplus reserves | Undistributed profits | Total owners‘ equity | |||
| Preferred stock | Perpetual capital securities | Other | |||||||||
| 1. Balance at the end of last year | 685,464,000 | 557,222,454 | 342,732,000 | 7,360,234,545 | 8,945,652,999 | ||||||
| Plus: Accounting policies changing | |||||||||||
| Previous error correction | |||||||||||
| Other | |||||||||||
| 2. Balance at the beginning of this year | 685,464,000 | 557,222,454 | 342,732,000 | 7,360,234,545 | 8,945,652,999 | ||||||
| 3. Increased or decreased amount in this period (reducing amount is listed with "-") | 450,866,010 | 450,866,010 | |||||||||
| 3.1 Total comprehensive income | 793,598,010 | 793,598,010 | |||||||||
| 3.2 Owners' invested and reduced capital | |||||||||||
| 3.2.1 Shareholders‘ invested common stock | |||||||||||
| 3.2.2 Other equity instrument holder‘ invested capital | |||||||||||
3.2.3 Amount of shares paid and reckoned inowners' equity
| 3.2.3 Amount of shares paid and reckoned in owners' equity | |||||||||||
| 3.2.4 Other | |||||||||||
| 3.3 Profit distribution | -342,732,000 | -342,732,000 | |||||||||
| 3.3.1 Drew surplus reserves | |||||||||||
| 3.3.2 Distribution to owners (or shareholders) | -342,732,000 | -342,732,000 | |||||||||
| 3.3.3 Other | |||||||||||
| 3.4 Internal transfer of owners' equity | |||||||||||
| 3.4.1 Capital reserves transferred and increased capital (or capital stock) | |||||||||||
| 3.4.2 Surplus reserves transferred and increased capital (or capital stock) | |||||||||||
| 3.4.3 Surplus reserves covering deficit | |||||||||||
| 3.4.4 Other | |||||||||||
| 3.5 Special reserves | |||||||||||
| 3.5.1 Accrual in this period | |||||||||||
| 3.5.2 Usage in this period | |||||||||||
| 3.6 Other | |||||||||||
| 4. Balance at the end of this period | 685,464,000 | 557,222,454 | 342,732,000 | 7,811,100,555 | 9,396,519,009 |
3. Company profile
Yantai Changyu Pioneer Wine Co., Ltd. (the“Company”or the“Joint-stock Company”) was
incorporated as a joint-stock limited company in accordance with the Company Law of the People’s
Republic of China (the“PRC”) in the merger and reorganization carried out by Yantai Changyu
Group Co., Ltd. (“Changyu Group Company”) with its assets and liabilities in relation to wine
business. The Company and its subsidiary companies (hereinafter collectively referred to as the
“Group”) are engaged in the production and sale of wine, brandy and champagne, planting and
purchase of grapes, development of tourism resources, etc. The registered address of the Company isYantai City, Shandong Province, and the office address of the headquarters is 56 Dama Road, ZhifuDistrict, Yantai City, Shandong Province.
As at June 30, 2018, the Company issued 685,464,000 shares accumulatively. Refer to Note 7.33 forthe details.
The parent company of the Group is Changyu Group Company incorporated in China, which wasultimately and actually controlled by four parties, including Yantai Guofeng Investment Holding Co.,Ltd., ILLVA Saronno Holding Spa, International Finance Corporation and Yantai Yuhua Investment &Development Co., Ltd.
The financial statement and the consolidated financial statement of the Company were approved bythe Board of Directors on August 28, 2018.
The scope of the consolidated financial statement in this period can be seen in Note 9“Equity in other
entities”. The scope changes of the consolidated financial statement in this period can be seen in Note
“Changes of the consolidated scope”.
4. Preparation basis of financial statement
4.1 Preparation basis
The Group implements the Accounting Standards for Business Enterprises (including the new andrevised editions published in 2014) (“ASBE”) published by the Ministry of Finance and relevant
regulations thereof. In addition, the Group also discloses relevant financial information in accordancewith Information Disclosure and Preparation Rules for Enterprises Publically Issuing Securities No.15---- General Rules for Financial Statement (Revised in 2014).
Note-accounting basis and pricing principle
The note-accounting basis of financial accounting adopted by the Group is accrual system and themeasurement basis adopted by the Group in preparing its financial statement is historical cost.Subsequently, if the assets are impaired, impairment provisions are made in accordance with relevantaccounting standards.
When the historical cost measurement is used, the assets are measured by the amount of cash or cashequivalent when the assets are purchased or the fair value of the consideration. The liabilities aremeasured by the actually received funds or assets for performing the current obligations, or thecontract amount for performing the current obligations, or the amount of cash or cash equivalent paidfor anticipated liabilities in the daily activities.
Fair value refers to a price received for selling an asset or paid for transferring a liability by the marketparticipant in orderly transactions on the measurement date. No matter the fair value is observable orestimated by the valuation technique, the fair value measured and disclosed in this financial statementis recognized on this basis.The fair value measurement is divided into three levels based on the observable degree of the inputfair value and the importance of this input value on the whole fair value measurement:
*The input value of the first level is the unadjusted price of the same assets or liabilities which can beacquired in an active market on the measurement date.
*The input value of the second level is the directly or indirectly observable input value of relevantassets or liabilities except that of the first level.
*The input value of the third level is the unobservable input value of relevant assets or liabilities.
4.2 Continuous operation
The Group has appraised the ability of continuous operation for 12 months from June 30, 2018, and noissues or situations causing major doubts to this ability are found. Therefore, this financial statement isprepared on the basis of the continuous operation assumption.
5. Main accounting policies and accounting estimates
5.1 Statement on compliance with ASBE
This financial statement fulfills the requirement of ASBE and gives a true and integrated view of thefinancial status and the consolidated financial status as at June 30, 2018, as well as the operating result,the consolidated operating result, the cash flow and the consolidated cash flow of the Company fromJanuary to June 2018.
5.2 Accounting period
The accounting period of the Group is from January 1 to December 31.
5.3 Operating cycle
The operating cycle refers to the period from the enterprise purchases the assets used for processing tothe cash or cash equivalent is realized. The operating cycle of the Company is 12 months.
5.4 Recording currency
Since Renminbi (RMB) is the currency of the main economic environment in which the Company andthe domestic subsidiary companies thereof are situated, the Company and the subsidiary companiesthereof adopt RMB as the recording currency. The overseas subsidiary companies thereof determineEuro, Chilean Peso and Australian Dollar as the recording currency according to the main economicenvironment in which they are situated. The currency in this financial statement prepared by the Groupis RMB.
5.5 Accounting treatment method for business combination under common control and
non-common control
5.5.1 Business combination and goodwill under non-common control
A business combination under non-common control is a business combination in which all of thecombining enterprises are not ultimately controlled by the same party or parties before and after thecombination.
The combination cost shall be the fair value of the assets paid, the liabilities incurred or assumed orthe equity instruments issued by the acquirer in exchange for the control over the acquiree. Theintermediary expenses such as audit, legal services and assessment consultation and other relatedmanagement expenses paid by the acquirer for business combination are included in the current profitand loss when they occur.The identifiable assets, liabilities and contingent liabilities which are obtained from the acquiree in thebusiness combination and meet the recognition conditions shall be measured on the acquisition dateaccording to the fair value thereof.
Where the cost of combination exceeds the acquirer’s interest in the fair value of the acquiree’s
identifiable net assets, the difference is treated as an asset and recognised as goodwill, which ismeasured at cost on initial recognition. Where the cost of combination is less than the acquirer’s
interest in the fair value of the acquiree’s identifiable net assets, the acquirer firstly re-assesses the
measurement of the fair values of the acquiree’s identifiable assets, liabilities and contingent liabilities
and measurement of the cost of combination. If after that reassessment, the cost of combination is stillless than the acquirer’s interest in the fair value of the acquiree’s identifiable net assets, the acquirer
recognises the remaining difference immediately in profit or loss for the current period.
The goodwill formed due to business combination shall be separately listed in the consolidatedfinancial statement and measured on the basis of the cost minus the accumulative impairmentprovision.
5.6 Compiling methods of consolidated financial statement
The consolidation scope of the consolidated financial statement is determined on the basis of control.Control means that the investor holds the power in the invested party, obtains variable returns by
participating in relevant activities of the invested party and has the ability to affect the amount of thereturns by using the power on the invested party. Once any change of the relevant facts and situationsresults in any change of relevant elements of the above definition of Control, the Group will carry outreappraisal.
The merger of any subsidiary company starts from the date when the Group acquires the power tocontrol this subsidiary company, while the termination of any subsidiary company ends in the datewhen the Group losses the power to control this subsidiary company.
As for any subsidiary company obtained in a business combination under non-common control, thebusiness result and the cash flow thereof since the acquisition date (date of obtaining the control power)shall have been properly included in the consolidated income statement and the consolidated cash flowstatement.
The principal accounting policies and accounting period adopted by the subsidiary companies shall bedetermined in accordance with the accounting policies and accounting period uniformly regulated bythe Company.
The influence of the internal transaction between the Company and the subsidiary companies as wellas among subsidiary companies on the consolidated financial statement shall be neutralized at the timeof combination.
The shares in the owner's equity of the subsidiary companies, which do not belong to the parentcompany, shall be recognized as the minority equity and listed under the item of“minority equity”of
the owner’s equity in the balance sheet. The shares in the current profit and loss of the subsidiary
companies, which belong to the minority equity, shall be listed under the item of“minority equity”of
the net profit in the consolidated income statement.
If the loss of the subsidiary companies borne by minority shareholders exceeds the shares of theowner's equity entitled therein by the minority shareholders at the beginning of the period, thedifference shall be still credited against the minority equity.
5.7 Recognition standards of cash and cash equivalents
Cash comprises cash on hand and demand deposit of the Company. Cash equivalents refer toshort-term highly liquid investments which are readily convertible into known amount of cash with aninsignificant risk of changes in value.
5.8 Foreign currency transaction and foreign currency statement translation
5.8.1 Foreign currency transaction
At the time of initial recognition of a foreign currency transaction, the amount of the foreign currencyshall be translated into the amount of the recording currency at the spot exchange rate on thetransaction date.
The monetary items of the foreign currency transaction shall be translated into RMB at the spotchange rate on the balance sheet date. The currency translation difference generated by the differencebetween the spot change rate on the balance sheet date and the spot change rate at the initialrecognition or on the previous balance sheet date shall be included in the current profit and loss,except:
①the currency translation difference of the dedicated foreign currency loan that meets the
capitalization condition shall be included in the cost of assets as capitalization during the capitalizationperiod;②the currency translation difference of the arbitrage tool to avoid foreign exchange risk
shall be treated according to the hedge accounting method;③the currency translation difference of
the available-for-sale monetary items generated by the book value other than the amortized cost shallbe recognized as other comprehensive income and included in other comprehensive income.
The amount of the non-monetary items of the foreign currency transaction measured by historical costshall be still translated into the amount in the recording currency at the spot exchange rate on thetransaction date. The non-monetary items of the foreign currency transaction measured by the fairvalue shall be translated at the spot exchange rate on the fair value date, and the difference between theamount in the recording currency and the amount in original recording currency shall be treated as thechange of the fair value (including exchange rate movement) and shall be included in the current profitand loss or recognized as other comprehensive income.
5.8.2 Translation of foreign currency financial statement
In order to compile a consolidated financial statement, the foreign currency financial statement of
overseas business shall be translated into RMB financial statement in accordance with the followingmethods: all asset and liability items in the balance sheet shall be translated at the spot exchange rateon the balance sheet date; the shareholders' equity items, except for the ones as "undistributed profits",shall be translated at the spot exchange rate at the time when they occur; all items and the itemsreflecting the accrual profit distribution in the profit statement shall be translated at the exchange ratesimilar to the spot exchange rate at the time when they occur; the undistributed profits at the beginningof the year shall be the translated to the undistributed profits at the end of the previous year; theundistributed profits at the end of the year shall be calculated and listed as the translated profitdistribution items; and the difference between the asset items and the sum of the liability items and theshareholders’equity items shall be recognized as other comprehensive income and included in the
shareholder's equity.
The foreign currency cash flows and the cash flows of the overseas subsidiary companies shall betranslated at the exchange rate similar to the spot exchange rate at the time when they occur; theamount of the cash and cash equivalents impacted by the exchange rate movement shall be, as areconciling item, separately listed under“impact of exchange rate movement on cash and cash
equivalents”in the cash flow statement.
The balance at the beginning of the year and the actual amount of the previous year shall be listed asthe amount translated according to the financial statement of the previous year.
5.9 Financial instruments
When becoming a party to a contract of financial instruments, the Group shall recognize a financialasset or financial liability. The financial assets and financial liabilities shall be measured at their fairvalue at the time of initial recognition. For other categories of financial assets and financial liabilities,relevant transaction expenses thereof shall be included in the initially recognized amount.
5.9.1 Effective interest method
The effective interest method refers to the method by which the amortized cost and the interest incomeor expenditure of different installments are calculated in light of the effective interest rates of thefinancial assets or financial liabilities (including a group of financial assets or financial liabilities). Theeffective interest rate refers to the interest rate adopted to cash the future cash flow of a financial asset
or financial liability within the predicted term of existence or within a shorter applicable term into thecurrent book value of the financial asset or financial liability.
When the effective interest rate is calculated, the Group predicts the future cash flow (taking noaccount of the future credit loss) on the basis of considering all the contractual provisions concerningthe financial assets or financial liabilities, as well as all kinds of charges, transaction expenses,discounts, premiums, etc. which are paid, charged, and included in the effective interest rate betweenthe contracting parties of the financial assets or liabilities.
5.9.2 Classification, recognition and measurement of financial assets
Financial assets are classified into the following categories when they are initially recognized: thefinancial assets which are measured at the fair value and the variation of which is included in thecurrent profit and loss, the investments which will be held to their maturity, loans, accounts receivableand available-for-sale financial assets. The financial assets purchased and sold through commonmodes shall be recognized and terminated from recognition according to the accounting on thetransaction date. The financial assets held by the Group are loans, accounts receivable andavailable-for-sale financial assets.
Loans and accounts receivable
Loans and accounts receivable refer to the non-derivative financial assets for which there is no quotedprice in an active market and of which the repo amount is fixed or determinable. The financial assetsclassified by the Group into loans and accounts receivable include monetary capital, bills receivable,accounts receivable, interest receivable, dividends receivable and other receivables.
The loans and accounts receivable shall be subsequently measured at amortized cost by adopting theeffective interest rate method. The profits or losses that occur when such loans and accounts receivableare terminated from recognition, impaired or amortized shall be included in the current profit and loss.
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are designated as availablefor sale at the time of initial recognition and the financial assets other than those measured at their fairvalue and the variation of which is included in the current profit and loss, loans, accounts receivable
and the investments which will be held to their maturity.
The equity instrument investment without quoted market price in an active market whose fair valuecannot be reliably measured shall be measured by cost.
5.9.3 Impairment of financial assets
On each balance sheet date, the Group checks the book value of the financial assets. If there is anyobjective evidence indicating that a financial asset is impaired, the impairment provision is accrued.Objective evidence indicating the impairment of financial assets refers to those occurring after theinitial recognition, have effect on the estimated future cash flow of the financial assets, and can bemeasured reliably.The objective evidence indicating the impairment of the financial assets includes the followingobservable matters:
A serious financial difficulty occurs to the issuer or the debtor;The debtor breaches any of the contractual stipulations, such as, failure to pay or delay of the paymentof interest or principal;The Group makes any concession due to economic, legal factors or other factors to the debtor which isin financial difficulties;The debtor will probably become bankrupt or carry out other financial reorganizations;The financial assets can no longer continue to be traded in an active market due to serious financialdifficulties of the issuer;It is impossible to identify whether the cash flow of a certain asset within a certain group of financialassets has decreased or not. But after making an overall appraisal according to the public dataavailable, it is found that the estimated future cash flow of the said group of financial assets has indeeddecreased since it was initially recognized and such decrease can be measured, including:
The payment ability of the debtor of the said group of financial assets worsens gradually;The country or economic region where the debtor is situated has the conditions that may cause thefinancial assets to be unpaid.A serious unfavourable change occurs to the operating technology, market, economic environment,legal environment of the issuer of the equity instruments that causes the investor of the equityinstruments can’t recover the investment costs;
The fair value of the equity instrument investment has serious or permanent decline;Other objective evidence showing the depreciation of the financial assets.
Impairment of financial assets measured by amortized costWhere a financial asset measured at amortized cost is impaired, the book value of the said financialasset shall be written down to the current value of the predicted future cash flow determined accordingto the capitalization of original effective exchange rate (excluding the loss of future credits not yetoccurred), and the amount as written down shall be recognized as loss of the impairment of the assetand shall be included into the current profit and loss. If there is any objective evidence proving that thevalue of the said financial asset has been restored, and it is objectively related to the events that occurafter such loss is recognized, the impairment losses originally recognized shall be reversed. However,the reversed book value shall not be any more than the amortized costs of the said financial asset onthe day of reverse under the assumption that no provision is made for the impairment.An impairment test shall be made by the Group independently on the individually significant financialassets; with regard to not individually significant financial assets, an independent impairment test maybe carried out, or they may be included in a combination of financial assets with similar credit riskcharacteristics so as to carry out an impairment-related test. Where, upon independent test, thefinancial asset (including the individually significant financial assets and not individually significantfinancial assets) has not been impaired, it shall be included in a combination of financial assets withsimilar credit risk characteristics so as to conduct another impairment test. Assets that are individuallyassessed for impairment and for which an impairment loss is or continues to be recognized shall not beincluded in the combination of the financial assets with similar credit risk characteristics forimpairment test.Impairment of available-for-sale financial assets measured by costWhen the equity instrument investment without quoted market price in an active market and the fairvalue of which cannot be reliably measured is impaired, the book value is decreased to the currentvalue confirmed by the discounted future cash flow according to the current market return of thesimilar financial assets. The decreased amount is recognized as impairment loss and included in thecurrent profit and loss. The impairment loss of this kind of financial assets can’t be transferred backupon confirmation.
5.9.4 Transfer of financial assets
Where a financial asset satisfies any of the following conditions, it shall be terminated fromrecognition:
①Where the contractual rights for collecting the cash flow of the said financial asset are
terminated;②Where the said financial asset has been transferred and all the risks and rewards of the
financial asset have been substantially transferred to the receiver;③Where the financial asset has
been transferred, although the Group does not transfer or retain almost all the risks and rewards of the
financial asset, the Group still waives the control over the financial asset.
Where the overall transfer of the financial asset satisfies the derecognition conditions, the differencebetween the book value of the transferred financial asset as well as the consideration received due tosuch transfer and the summation of the cumulative amount of the fair value of the asset that isoriginally included in other comprehensive income shall be included in the current profit and loss.
5.9.5 Classification, recognition and measurement of financial liabilities
The Group classifies the financial instruments or the components as financial liabilities or equityinstruments at the time of initial recognition according to the contract terms of the issued financialinstruments and the reflected economic essence rather than only the legal form, considering thedefinition of financial liabilities and equity instruments.
On initial recognition, financial liabilities are classified into financial liabilities at fair value throughprofit or loss and other financial liabilities. The financial liabilities in group are other financialliabilities, including short-term borrowings, notes payable, account payables, interest payables, otherpayables, non-current liabilities due within one year and long-term payables etc.
Other financial liabilities
Other financial liabilities are subsequently measured at amortised cost using the effective interestmethod, with gain or loss arising from derecognition or amortisation recognised in profit or loss.
5.9.6 Derecognition of financial liabilities
The Group derecognises a financial liability (or part of it) only when the underlying present obligation(or part of it) is discharged.
When the Group derecognises a financial liability or a part of it, it recognises the difference betweenthe carrying amount of the financial liability (or part of the financial liability) derecognised and theconsideration paid (including any non-cash assets transferred or new financial liabilities assumed) inprofit or loss.
5.9.7 Offsetting financial assets and financial liabilities
Where the Group has a legal right that is currently enforceable to set off the recognised financial assetsand financial liabilities, and intends either to settle on a net basis, or to realise the financial asset andsettle the financial liability simultaneously, a financial asset and a financial liability shall be offset andthe net amount is presented in the balance sheet. Except for the above circumstances, financial assetsand financial liabilities shall be presented separately in the balance sheet and shall not be offset.
5.9.8 Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Group afterdeducting all of its liabilities. The Group does not recognise any changes in the fair value of equityinstruments. The equity instruments transaction expenses deducted from equity.
The Group treats distribution to equity instrument holders as profit distributions. Shareholder equity isnot affected by share dividend distributed.
5.10 Accounts Receivable
The Group believes that the individual receivables are all significant, and the correspondingreceivables are individually tested for impairment, and individual recognition method is used toconfirm bad debt provision.
5.11 Inventories
5.11.1 Categories of inventories
The Group's inventories mainly include raw materials, work in progress and finished goods.Inventories are initially measured at cost. Cost of inventories comprises all costs of purchase, costsof conversion and other expenditures incurred in bringing the inventories to their present location andcondition.
5.11.2 Valuation method of inventories upon delivery
The actual cost of inventories upon delivery is calculated using the weighted average method.
Agricultural products harvested are reported in accordance with the CAS 1 Inventories.
5.11.3 Basis for determining net realisable value of inventories and provision methodsfor decline in value of inventories
At the balance sheet date, inventories are measured at the lower of cost and net realisable value. Ifthe net realisable value is below the cost of inventories, a provision for decline in value of inventoriesis made. Net realisable value is the estimated selling price in the ordinary course of business less theestimated costs of completion, the estimated costs necessary to make the sale and relevant taxes. Netrealisable value is determined on the basis of clear evidence obtained, and takes into consideration thepurposes of holding inventories and effect of post balance sheet events.
Provision for decline in value of other inventories is made based on the excess of cost of inventoryover its net realisable value on an item-by-item basis.
After the provision for decline in value of inventories is made, if the circumstances that previouslycaused inventories to be written down below cost no longer exist so that the net realisable value ofinventories is higher than their cost, the original provision for decline in value is reversed and thereversal is included in profit or loss for the period.
5.11.4 Inventory count system
The perpetual inventory system is maintained for stock system.
5.11.5 Amortisation method for low cost and short-lived consumable items andpackaging materials
Packaging materials and low cost and short-lived consumable items are amortised using the immediatewrite-off method.
5.12 Non-current assets held for sale
Non-current assets and disposal groups are classified as held for sale category when the Grouprecovers the book value through a sale (including an exchange of nonmonetary assets that hascommercial substance) rather than continuing use.
Non-current assets or disposal groups classified as held for sale are required to satisfy the followingconditions: (1) the asset or disposal group is available for immediate sale in its present conditionsubject only to terms that are usual and customary for sales of such asset or disposal group; (2) the saleis highly probable, i.e. the Group has made a resolution about selling plan and obtained a confirmedpurchase commitment and the sale is expected to be completed within one year.
The Group measures the no-current assets or disposal groups classified as held for sale at the lower oftheir carrying amount and fair value less costs to sell. Where the carrying amount is higher than the netamount of fair value less costs to sell, carrying amount should be reduced to the net amount of fairvalue less costs to sell, and such reduction is recognized in impairment loss of assets and included inprofit or loss for the period. Meanwhile, provision for impairment of held-for-sale assets are made.When there is increase in the net amount of fair value of non-current assets held for sale less costs tosell at the balance sheet date, the original deduction should be reversed in impairment loss of assetsrecognized after the classification of held-for-sale category, and the reverse amount is include in profitor loss for the period.
Non-current assets held for sale in non-current assets are not subject to depreciation or amortization.
5.13 Long term equity investments
5.13.1 Basis for determining control, joint control and significant influence
Control is the power to govern the financial and operating policies of an entity so as to obtain benefitsfrom its activities. Joint control is the contractually agreed sharing of control over an economic activity,and exists only when the strategic financial and operating policy decisions relating to the activityrequire the unanimous consent of the parties sharing control. Significant influence is the power toparticipate in the financial and operating policy decisions of the investee but is not control or jointcontrol over those policies. When determining whether an investing enterprise is able to exercisecontrol or significant influence over an investee, the effect of potential voting rights of the investee(for example, warrants and convertible debts) held by the investing enterprises or other parties that arecurrently exercisable or convertible shall be considered.
5.13.2 Determination of initial investment cost
For a long-term equity investment acquired not involving enterprises under common control, theinvestment cost of the long-term equity investment is the cost of acquisition.
Audit fee, legal services, consulting fees and other related management costs in acquisition areexpensed in profits and losses when happened.
Other long-term equity investments acquired from other than acquisitions are recognised usingoriginal cost.
5.13.3 Subsequent measurement and recognition of profit or loss
Long-term equity investment accounted for using the cost method
The Group accounts for long-term equity investment using the cost method. A subsidiary is aninvestee that is controlled by the Group.
Under the cost method, a long-term equity investment is measured at initial investment cost.Long-term equity investment is adjusted when capital is added or recollected. Investment income isrecognised in the period in accordance with the attributable share of cash dividends or profitdistributions declared by the investee.
5.13.4 Disposal of long-term equity investments
On disposal of a long term equity investment, the difference between the proceeds actually receivedand receivable and the carrying amount is recognised in profit or loss for the period.
5.14 Investment properties
Investment property is property held to earn rentals or for capital appreciation or both.
An investment property is measured initially at cost. Subsequent expenditures incurred for suchinvestment property are included in the cost of the investment property if it is probable that economicbenefits associated with an investment property will flow to the Group and the subsequentexpenditures can be measured reliably. Other subsequent expenditures are recognised in profit or lossin the period in which they are incurred.
The Group uses the cost model for subsequent measurement of investment property, and adopts adepreciationor amortisation policy for the investment property which is consistent with that forbuildings or land use rights.
When an investment property is sold, transferred, retired or damaged, the Group recognises theamount of any proceeds on disposal net of the carrying amount and related taxes in profit or loss forthe period.
5.15 Fixed assets
5.15.1 Recognition criteria for fixed assets
Fixed assets are tangible assets that are held for use in the production or supply of goods or services,for rental to others, or for administrative purposes, and have useful lives of more than one accountingyear. A fixed asset is recognised only when it is probable that economic benefits associated with theasset will flow to the Group and the cost of the asset can be measured reliably. Fixed assets areinitially measured at cost.
Subsequent expenditures incurred for the fixed asset are included in the cost of the fixed asset and if itis probable that economic benefits associated with the asset will flow to the Group and the subsequentexpenditures can be measured reliably. Meanwhile the carrying amount of the replaced part isderecognised. Other subsequent expenditures are recognised in profit or loss in the period in whichthey are incurred.
5.15.2 Depreciation of each category of fixed assets
A fixed asset is depreciated over its useful life using the straight-line method since the monthsubsequent to the one in which it is ready for intended use. The useful life, estimated net residualvalue rate and annual depreciation rate of each category of fixed assets are as follows:
Classification
| Classification | Depreciation method | Depreciation life | Residual value rate | Annual depreciation rate |
| Houses and buildings | Straight-line depreciation | 20-40 years | 0-5% | 2.4%-5.0% |
| Machinery equipment | Straight-line depreciation | 5-30 years | 0-5% | 3.2%-20.0% |
| Transportation tools | Straight-line depreciation | 4-12 years | 0-5% | 7.9%-25.0% |
Estimated net residual value assumes the situation where a fixed asset expire for its estimated usefullife and is in its expected final status. Estimated net residual value is the amount that the Group canobtain from the disposal less expected disposal fees.
5.15.3 Other explanations
If a fixed asset is upon disposal or no future economic benefits are expected to be generated from itsuse or disposal, the fixed asset is derecognised. When a fixed asset is sold, transferred, retired ordamaged, the amount of any proceeds on disposal of the asset net of the carrying amount and relatedtaxes is recognised in profit or loss for the period.
The Group reviews the useful life and estimated net residual value of a fixed asset and the depreciationmethod applied at least once at each financial year-end, and account for any change as a change in anaccounting estimate.
5.16 Construction in progress
Construction in progress is measured at its actual costs. The actual costs include various constructionexpenditures during the construction period, borrowing costs capitalised before it is ready for intendeduse and other relevant costs. Construction in progress is not depreciated. Construction in progressis transferred to a fixed asset when it is ready for intended use.
5.17 Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assetare capitalised when expenditures for such asset and borrowing costs are incurred and activitiesrelating to the acquisition, construction or production of the asset that are necessary to prepare theasset for its intended use or sale have commenced. Capitalisation of borrowing costs ceases when thequalifying asset being acquired, constructed or produced becomes ready for its intended use or sale.Capitalisation of borrowing costs is suspended during periods in which the acquisition, construction orproduction of a qualifying asset is suspended abnormally and when the suspension is for a continuousperiod of more than 3 months. Capitalisation is suspended until the acquisition, construction orproduction of the asset is resumed. Other borrowing costs are recognised as an expense in the period inwhich they are incurred. Where funds are borrowed under a specific-purpose borrowing, the amount ofinterest to be capitalized is the actual interest expense incurred on that borrowing for the period lessany bank interest earned from depositing the borrowed funds before being used on the asset or anyinvestment income on the temporary investment of those funds.
5.18 Biological assets
The Group's biological assets are bearer biological assets.
Bearer biological assets are biological assets, for example, held for the production of agriculturalproduce, provision of services or rental, Bearer biological assets in the Group are vines. A bearerbiological asset is initially measured at cost. The cost of a bearer biological asset self-grown orself-bred comprises those costs necessarily incurred and directly attributable to the asset before theasset becomes available for its intended production and operating purposes, and any borrowing costmeeting the capitalisation criteria.
The productive biological assets are not accrued depreciation until reaching the intended productionand operation purposes. After reaching the intended production and operation purposes, the productivebiological assets are accrued depreciation within the service life straight-line depreciation. The servicelife, estimated net residual value rate and annual depreciation rate of different productive biologicalassets are as follows:
Estimated Estimated AnnualCategory useful life residual rate depreciation rate
Vines 20 years - 5.0%
The Group evaluates the useful life and expected net salvage value by considering the normalproducing life of the bearer biological assets.
The Group reviews the useful life and estimated net residual value of bearer biological assets and thedepreciation method applied at least once at each financial year-end, and account for any change as achange in an accounting estimate.
On the sale, identification of any shortages during stocktaking, death or damage of biological asset, theproceeds on disposal net of the carrying amount and relevant taxes is recognised in profit or loss forthe current period.
5.19 Intangible assets
Intangible assets include land use rights, software, etc.
An intangible asset is measured initially at cost method. When an intangible asset with a finite usefullife is available for use, its original cost less net residual value and any accumulated impairment lossesis amortised over its estimated useful life using the straight-line method. Intangible assets withindefinite useful lives are not amortized. The useful lives of the intangible assets are as follows:
AnnualItem Useful life Net residual value amortization rateLand use rights 40-50 years - 2.0%-2.5%Software 5-10 years - 10.0%-20.0%Trademark 10 years - 10.0%
Except for the above intangible assets with finite useful lives, the Group had also land use right andtrademark with infinite useful lives. Land use right with infinite useful lives was related to theacquisition of permanent ownership held by Vi?a Indómita, S.A., Vi?a Dos Andes, S.A., and Bodegas
Santa Alicia SpA. (collectively referred to as the "Chile Indomita Wine Group") according to relatedChilean law and the acquisition of permanent ownership held by Kilikanoon Estate Pty Ltd (referredto as the "Australia Kilikanoon") according to related Australian law, for which there is no need toconduct amortization. Trademark was related to the Group acquired the Chile Indomita Wine Group,
which had no finite useful lives. The valuation of trademark was based on the trends in the market andcompetitive environment, product cycle, and managing long-term development strategy. Those basisindicated the trademark will provide net cash flows to the Group within a given period. Because it washard to predict the period that it would bring economic benefits to the Group, the useful lives wereuncertain.
For an intangible asset with a finite useful life, the Group reviews the useful life and amortisationmethod at the end of the period, and makes adjustments when necessary.
5.20 Impairment of long-term assets
The Group and the Company review the impairment status of long-term equity investments, fixedassets, construction in progress, bearer biological asset and intangible assets with finite useful life atthe end of each year. If the assets exist impairment, the Group estimates the recoverable amount of theassets.Intangible assets with indefinite useful life and intangible assets not yet available for use aretested for impairment annually, irrespective of whether there is any indication that the assets may beimpaired.
Recoverable amount is estimated on individual basis. If it is not practical to estimate the recoverableamount of an individual asset, the recoverable amount of the asset group to which the asset belongswill be estimated. The recoverable amount of an asset is the higher of its fair value less costs ofdisposal and the present value of the future cash flows expected to be derived from the asset.
If recoverable amount of assets is less than book value, the difference is recognised as impairmentprovision and expensed in current period.
Goodwill is tested for impairment at least at the end of each year. For the purpose of impairmenttesting, goodwill is considered together with the related assets group (s), i.e., goodwill is reasonablyallocated to the related assets group (s) or each of assets group (s) expected to benefit from thesynergies of the combination. An impairment loss is recognised if the recoverable amount of the assetsgroup or sets of assets groups (including goodwill) is less than its carrying amount. The impairmentloss is firstly allocated to reduce the carrying amount of any goodwill allocated to such assets group orsets of assets groups, and then to the other assets of the group pro-rata on the basis of the carryingamount of each asset (other than goodwill) in the group.
The impairment is recognised in profit or loss for the period in which it is incurred and will not bereversed in any subsequent period.
5.21 Long term prepaid expenses
Long term prepaid expenses of the Group are amortized over the following period:
Amortization period
Land requisition fee 50 yearsLand lease prepayment 50 yearsGreening fee 5-20 yearsLeasehold improvement 3-5yearsOthers 3 years
5.22 Employee benefits
5.22.1 Short-term employee benefits
In an accounting period in which an employee has rendered service to the Group, the Grouprecognises the actual employee benefits for that service as a liability. The employee benefits of theGroup are either included in cost of related assets or charged to profit or loss in the period when theyare incurred. Non-monetary employee benefits are measured at fair value.
Social insurances such as medical insurance, injury insurance and pregnancy insurance, housing funds,labor union and employee education fees paid by the Group for employees, are recognised as relevantliability in the period in which the employees provide service, in accordance with the regulatedrecognition basis and percentage. The related expenditures are either included in cost of related assetsor charged to profit or loss in the period when they are incurred.
5.22.2 Accounting treatments of retired benefits
Retired benefits of the Group are all predetermined provision plan.
In the period in which the employees provide service, the Group recognise liability in accordance withthe amounts to be paid calculated according to the predetermined provision plan, and the relatedexpenditures are either included in cost of related assets or charged to profit or loss in the period whenthey are incurred.
5.22.3 Accounting treatments of termination benefits
When providing termination benefits to employees, the Group recognise employee benefits payrollresulting from termination benefits at the earlier of: the Group cannot unilaterally withdraw from thetermination plan or the redundancy offer; the Group recognise relevant costs and expenses related tothe payment of termination benefits in reconstructuring.
5.23 Revenue
5.23.1 Revenue from sale of goods
Revenue from sale of goods is recognised when the Group has transferred to the buyer the significantrisks and rewards of ownership of the goods. The Group retains neither continuing managerialinvolvement to the degree usually associated with ownership nor effective control over the goods sold.The amount of revenue can be measured reliably and it is probable that the associated economicbenefits will flow to the Group. The associated costs incurred or to be incurred can be measuredreliably.
5.23.2 Revenue from rendering of services
When the outcome of a transaction involving the rendering of services can be estimated reliably,revenue associated with the transaction shall be recognized by reference the stage of completion of thetransaction at the reporting date. The outcome of a transaction can be estimated reliably.
When the outcome of the transaction involving the rendering of services cannot be estimated reliably,revenue is recognised only to the extent of the costs incurred that will be recoverable, and the costsincurred are recognised as expenses for the period. When it is not probable that the costs incurred willbe recovered, revenue is not recognised.
5.24 Government grants
Government grants are transfer of monetary assets and non-monetary assets from the government tothe Group at no consideration. A government grant is recognised only when the Group can complywith the conditions attaching to the grant and the Group will receive the grant.
Monetary government grants are measured by the amount received or receivable.
5.24.1 Government grant related to an asset
A government grant related to an asset is recognised as deferred income, and evenly amortised toprofit or loss over the useful life of the related asset.
5.24.2Government grant related to income
For a government grant related to income, if the grant is a compensation for related expenses or lossesto be incurred in subsequent periods, the grant is recognised as deferred income, and recognised inprofit or loss over the periods in which the related costs are recognised. If the grant is a compensationfor related expenses or losses already incurred, the grant is recognised immediately in profit or loss forthe period.
A government grant related to the Group's daily activities is recognized in other income based on thenature of economic activities; a government grant is not related to the Group's daily activities isrecognized in non-operating income and expenses.
The Company's government loans with below-market rate of interest are directly paid to the Company,and the related low rate interest will write off related borrowing costs. The government loans withbelow-market rate of interest obtained by other subsidiaries of the Group are government loans, whichis provided by local bureau of finance through bank with below-market rate of interest. The actualamount of the loan received by the Group recognized as borrowings, and the related borrowing costsare calculated according to the principal of the loan and the below-market rate.
5.25 Deferred tax assets/deferred tax liabilities
The income tax expenses include current income tax and deferred income tax.
5.25.1 Current income tax
At the balance sheet date, current income tax liabilities (or assets) for the current and prior periods aremeasured at the amount expected to be paid (or recovered) according to the requirements of tax laws.
5.25.2 Deferred tax assets and deferred tax liabilities
For temporary differences between the carrying amounts of certain assets or liabilities and their taxbase, or between the nil carrying amount of those items that are not recognised as assets or liabilitiesand their tax base that can be determined according to tax laws, deferred tax assets and liabilities arerecognised using the balance sheet liability method.
Deferred tax is generally recognised for all temporary differences. Deferred tax assets for deductibletemporary differences are recognised to the extent that it is probable that taxable profits will beavailable against which the deductible temporary differences can be utilised. However, fortemporary differences associated with the initial recognition of goodwill and the initial recognition ofan asset or liability arising from a transaction (not a business combination) that affects neither theaccounting profit nor taxable profits (or deductible losses) at the time of transaction, no deferred taxasset or liability is recognised.
For deductible losses and tax credits that can be carried forward, deferred tax assets are recognised tothe extent that it is probable that future taxable profits will be available against which the deductiblelosses and tax credits can be utilised.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments insubsidiaries and associates, and interests in joint ventures, except where the Group is able to controlthe timing of the reversal of the temporary difference and it is probable that the temporary differencewill not reverse in the foreseeable future. Deferred tax assets arising from deductible temporarydifferences associated with such investments and interests are only recognised to the extent that it isprobable that there will be taxable profits against which to utilise the benefits of the temporarydifferences and they are expected to reverse in the foreseeable future.
At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates, according totax laws, that are expected to apply in the period in which the asset is realised or the liability is settled.
Current and deferred tax expenses or income are recognised in profit or loss for the period, exceptwhen they arise from transactions or events that are directly recognised in other comprehensiveincome or in shareholders' equity, in which case they are recognised in other comprehensive income orin shareholders' equity; and when they arise from business combinations, in which case they adjust thecarrying amount of goodwill.
At the balance sheet date, the carrying amount of deferred tax assets is reviewed and reduced if it is nolonger probable that sufficient taxable profits will be available in the future to allow the benefit ofdeferred tax assets to be utilised. Such reduction in amount is reversed when it becomes probablethat sufficient taxable profits will be available.
5.25.3 Net off of income taxes
When the Group has a legal right to settle on a net basis and intends either to settle on a net basis or torealise the assets and settle the liabilities simultaneously, current tax assets and current tax liabilitiesare offset and presented on a net basis.
When the Group has a legal right to settle current tax assets and liabilities on a net basis, and deferredtax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority oneither the same taxable entity or different taxable entities which intend either to settle current taxassets and liabilities on a net basis or to realise the assets and liabilities simultaneously, in each futureperiod in which significant amounts of deferred tax assets or liabilities are expected to be reversed,deferred tax assets and deferred tax liabilities are offset and presented on a net basis.
5.26 Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all therisks and rewards of ownership to the lessee. All other leases are classified as operating leases.
5.26.1 Operating lease accounting methods
The Group as lessee under operating leases
Operating lease payments are recognised on a straight-line basis over the term of the relevant lease,and are either included in the cost of related asset or charged to profit or loss for the period. Initialdirect costs incurred are charged to profit or loss for the period.
The Group as lessor under operating leases
Rental income from operating leases is recognised in profit or loss on a straight-line basis over theterm of the relevant lease. Initial direct costs with more than an insignificant amount are capitalisedwhen incurred, and are recognised in profit or loss on the same basis as rental income over the leaseterm. Other initial direct costs with an insignificant amount are charged to profit or loss in the periodin which they are incurred. Contingent rents are charged to profit or loss in the period in which theyactually arise.
5.27 Changes in major accounting policies and accounting estimates
5.27.1 Changes in major accounting policies
No
5.27.2 Changes in major accounting estimates
No
5.28 Others
Critical judgments in applying accounting policies and key assumptions and uncertainties inaccounting estimates
In the application of accounting policies as set out in Note 4, the Group is required to make judgments,estimates and assumptions about the carrying amounts of items in the financial statements that cannotbe measured accurately, due to the internal uncertainties of the operating activities. These judgments,
estimates and assumptions are based on historical experience of the Group's management as well asother factors that are considered to be relevant. Actual results may differ from these estimates.
The Group periodically review the judgments, estimates and assumptions above on a going concernbasis. For those changes in accounting policies that only affect current financial statements, theinfluences are recognized in current period. For those changes in accounting policies that affect bothcurrent and future financial statements, the influences are recognized in both current and prospectiveperiods.
Significant accounting judgments and accounting estimates
The following are key assumptions for after balance sheet date event and other factors of uncertainestimation. They may cause material adjustment on balance sheet in following accounting period.
Deferred tax assets
Deferred tax assets are recognized for all unused tax losses to the extent that it is probable that taxableprofit will be available against which the losses can be utilized. Significant management judgment isrequired to determine the amount of deferred tax assets that can be recognized, based upon the likelytiming and level of future taxable profits together with future tax planning strategies.
Depreciation
The depreciation is calculated on the straight line basis to write-off the cost of each item of fixedassets to its residual value over its estimated useful life. The Group's management determines theestimated useful lives for its fixed assets. This estimate is based on the historical experience of theactual useful lives of fixed assets of similar nature and functions. If the previous estimates havesignificant changes, and depreciation expenses will be adjusted in the future periods.
Useful life of intangible assets
The estimated useful lives of the intangible assets are determined based on the historical experience ofthe actual useful lives of intangible assets of similar nature and functions as well as considering thecontractual rights and statutory rights applicable to the intangible assets.
When the estimated useful lives of finite intangible assets are shortened or extended, the amortizationperiods should be adjusted accordingly.
Impairment of long-term assets
The Group assesses whether the recoverable amount is lower than the book value. If there are anyindicators that the book value of non-current assets cannot be fully recoverable, impairment lossesshould be recorded.
The recoverable amount is the higher of an asset's fair value less costs to sell and the present value ofthe future cash flows expected to be derived from an asset. As it is difficult for the Group to obtainthe quoted market price of the assets (or assets group), the fair value of the assets cannot be reliablyestimated. When the management make estimation on the expected future cash flows from the assetor cash generating unit, estimates should be made on choosing a suitable growth rate of sales , averagegross profit , related operating costs and discount rate in order to calculate the present value of thosecash flows, which has a high uncertainty.
Estimated provision for accounts receivable
A provision for impairment of trade receivables is established when there is objective evidence that theGroup will not be able to collect all amounts due according to the original terms of receivables.Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy areconsidered indicators that the trade receivable is impaired. The provision is reassessed at the end ofeach year.
Inventory provision based on net realizable value
The inventories are measured on the lower of carrying value and net realizable value, and provisionshould be made for impairment on obsolete and slow moving inventories. The group will reassesswhether the net realizable value is lower than the carrying cost at the end of each year.
The determination of the fair value of identifiable assets and liabilities associated with businesscombination.
For the cost of business combination, the Group allocates the purchase price based on fair value of
relatively identifiable assets and liabilities. When the fair value of relatively identifiable assets andliabilities are evaluated by the present value of its future cash flows, The management need estimatethe growth rate of sales based on future market supply and demand to predict cash flows, andconsidered the proper discount rate for calculating, management need use major accounting estimatesand judgments in the progress.
6. TAXES
6.1 The main taxes and tax rate are as follows:
6.2 Tax incentives and relative permit
Ningxia Changyu Grape Growing Co., Ltd.("Ningxia Growing"), a subsidiary of the Group, whoseprincipal activity is grape growing is incorporated in Ningxia Huizu Autonomous Region. Accordingto clause 27 of PRC Corporate Income Tax and clause 86 of PRC Corporate Income Tax Measures forImplementation, Ningxia Growing enjoys an exemption of corporate income tax.
Yantai Changyu Grape Growing Co., Ltd.(" Grape Growing "), a branch of the Company, whoseprincipal activity is grape growing is incorporated in Zhifu District, Yantai City, Shandong Province.According to clause 27 of PRC Corporate Income Tax and clause 86 of PRC Corporate Income TaxMeasures for Implementation, Grape Growing enjoys an exemption of corporate income tax.
Tax category
| Tax category | Taxation basis | Tax rate |
| Value added tax | Levied on the balance between the output tax calculated based on taxable income and the input tax allowed to be deducted in current period | 16%, 10%, 6% (Chinese), 20% (France), 21% (Spain), 19% (Chile), 10% (Australia) |
| Consumption tax | Levied on taxable income | 10%, 20% (Chinese) |
| City development tax | Levied on circulation tax actually paid | 7% (Chinese) |
| Corporate income tax | Levied on taxable income | 25%(Chinese), 33.3%(France), 28% (Spain), 27% (Chile), 30% (Australia) |
Xinjiang Tianzhu Co., Ltd ("Xinjiang Tianzhu"), a subsidiary of the Company, is an enterprise of wineproduction and sales incorporated in Shihezi city, Xinjiang Weizu Autonomous. In accordance with theNotice on Tax Policy Issues concerning Further Implementation of the Western China DevelopmentStrategy (Cai Shui [2011] No.58), Xinjiang Tianzhu is qualified to enjoy preferential taxation policies,which means it can pay corporate income tax at a preferential rate of 15% for the period from 2015 to2020.
Xinjiang Babao Baron Chateau Co., Ltd. ("Shihezi Chateau"), a subsidiary of the Company, is anenterprise of wine production and sales incorporated in Shihezi city, Xinjiang Weizu Autonomous. Inaccordance with the Notice on Tax Policy Issues concerning Further Implementation of the WesternChina Development Strategy (Cai Shui [2011] No.58), Shihezi Chateau is qualified to enjoypreferential taxation policies, which means it can pay corporate income tax at a preferential rate of15% for the period from 2015 to 2020.
7. Notes to consolidated financial statement
7.1 Monetary capital
Unit: Yuan
Item
| Item | Ending balance | Beginning balance |
| Cash on hand | 151,228 | 136,973 |
| Bank deposit | 1,561,166,484 | 1,278,397,711 |
| Other monetary capital | 121,720,741 | 123,987,825 |
| Total | 1,683,038,453 | 1,402,522,509 |
As at June 30, 2018, the restricted bank deposit details are listed as follows:
| Item | Ending balance | Beginning balance |
| Housing fund of the unit | 2,647,250 | 2,645,410 |
| Total | 2,647,250 | 2,645,410 |
As at June 30, 2018, the details of other monetary funds are listed as follows:
| Item | Ending balance | Beginning balance |
| Pledge of fixed deposits by Yantai Changyu Wine Research, Development and Manufacture Co., Ltd. (―R&D Company‖) | 61,700,000 | 61,700,000 |
| Guaranteed deposits paid for the letter of credit | 57,946,190 | 57,946,190 |
| Account balance of Alipay | 1,743,116 | 4,317,635 |
| Guaranty money for the unit card | 321,435 | 14,000 |
| Guaranty money for ICBC platform | 10,000 | 10,000 |
| Total | 121,720,741 | 123,987,825 |
As at June 30, 2018, the bank deposits of the Group including short-term fixed deposits ranging from3 months to 12 months amounted to RMB 130,000,000 Yuan (December 31, 2017: RMB 95,000,000Yuan), with the interest rates ranging from 1.40% to 2.03%.
7.2 Bills receivable7.2.1 Classification of bills receivable
Unit: Yuan
| Type | Ending balance | Beginning balance |
| Bank acceptance | 367,210,884 | 244,796,818 |
| Trade acceptance | ||
| Total | 367,210,884 | 244,796,818 |
7.2.2 Bills receivable pledged by the Company at the end of period
Nil
7.2.3 Bills receivable endorsed or discounted by the Company at the end of period butnot yet matured as of the balance sheet date
Unit: Yuan
Item
| Item | Amount terminating recognition at the end of period | Amount not terminating recognition at the end of period |
| Bank acceptance | 225,833,211 | |
| Trade acceptance | ||
| Total | 225,833,211 |
7.2.4 Bills receivable reclassified as accounts receivable by the Company due to thedefault of drawer at the end of period
Nil
7.3 Accounts receivable7.3.1 Accounts receivable disclosed by type
Unit: Yuan
| Type | Ending balance | Beginning balance | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Proportion | Amount | Accrued proportion | Amount | Proportion | Amount | Accrued proportion | |||
| Accounts receivable of significant single amount and single accrued bad debt provision | 243,413,092 | 100.0% | 243,413,092 | 263,796,355 | 100.0% | 263,796,355 | ||||
| Accounts receivable accrued bad debt provision by credit risk features | ||||||||||
| Accounts receivable of insignificant single amount and single accrued bad debt provision | ||||||||||
| Total | 243,413,092 | 100.0% | 243,413,092 | 263,796,355 | 100.0% | 263,796,355 | ||||
The credit term of accounts receivable is normally one month. Major customers can be granted a creditterm up to one year. The accounts receivable are free from interest.As at June 30, 2018, the accounts receivable with ownership restrictions were RMB 35,016,424 Yuan
(December 31, 2017: RMB 46,337,062 Yuan). Please refer to Note 7.19 for details.
7.3.2 Bad debt provision accrued, transferred back or received in this periodThe bad debt provision accrued in this period was RMB 0 Yuan; and that transferred back or
received in this period was RMB 0 Yuan.7.3.3 Accounts receivable actually cancelled after verification in this period
Nil7.3.4 Accounts receivable collected by the borrowers of top 5 units ranked by the ending
balance
Unit: Yuan
Unit
| Unit | Relationship with the Company | Amount | Period | Percentage in total accounts receivable |
| Nonggongshang Supermarket (Group) Co., Ltd. | Third party | 11,250,509 | Within 1 year | 4.6% |
| Yantai Zhongya Medical Health Wine Co., Ltd. | Affiliated party | 8,912,812 | Within 1 year | 3.7% |
| Lianhua Supermarket Holdings Co., Ltd. | Third party | 8,263,237 | Within 1 year | 3.4% |
| Suguo Supermarket Co., Ltd. | Third party | 5,812,309 | Within 1 year | 2.4% |
| Shanghai Lotus Supermarket Chain Store Co., Ltd. | Third party | 5,694,902 | Within 1 year | 2.3% |
| Total | -- | 39,933,769 | -- | 16.4% |
7.3.5 Accounts receivable terminating recognition due to transfer of financial assets
Nil7.3.6 Accounts receivable transferred and included in assets and liabilities
Nil
7.4 Advance payment7.4.1 Advance payment listed by age
Unit: Yuan
| Age | Ending balance | Beginning sum | ||
| Amount | Proportion | Amount | Proportion | |
| Within 1 year | 3,122,797 | 100.0% | 2,417,931 | 100.0% |
1-2 years
| 1-2 years | ||||
| 2-3 years | ||||
| More than 3 years | ||||
| Total | 3,122,797 | -- | 2,417,931 | -- |
7.4.2 Advance payment collected by the prepaid parties of top 5 units ranked by theending balance
Unit: Yuan
| Unit | Relationship with the Group | Amount | Age | Reason for unsettlement | Percentage in the total advance payment% |
| Yantai Power Supply Company of State Grid Shandong Electric Power Company | Third party | 500,000 | Within 1 year | Prepaid electricity purchasing fund | 16.0% |
| Beijing Putianshou Trade Co., Ltd. | Third party | 192,000 | Within 1 year | Failure to receive the goods | 6.1% |
| Qingdao Vinopro Trading Co., Ltd. | Third party | 105,200 | Within 1 year | Failure to receive the goods | 3.4% |
| Xinjiang Xinyanmushen Technology Co., Ltd. | Third party | 116,980 | Within 1 year | Failure to receive the goods | 3.7% |
| Yantai Bohong Industry & Trade Co., Ltd. | Third party | 95,137 | Within 1 year | Failure to receive the goods | 3.0% |
| Total | -- | 1,009,317 | -- | -- | 32.2% |
7.5 Interest receivable7.5.1 Classification of interest receivable
Unit: Yuan
| Item | Ending balance | Beginning balance |
| Fixed deposit | 1,218,373 | 240,968 |
| Entrusted loan | ||
| Bond investment | ||
| Total | 1,218,373 | 240,968 |
7.6 Other accounts receivable7.6.1 Other accounts receivable disclosed by type
Unit: Yuan
Type
| Type | Ending balance | Beginning balance | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Proportion | Amount | Accrued proportion | Amount | Proportion | Amount | Accrued proportion | |||
| Other accounts receivable of significant single amount and single accrued bad debt provision | 16,500,022 | 100.0% | 16,500,022 | 18,737,454 | 100.0% | 18,737,454 | ||||
| Other accounts receivable accrued bad debt provision by credit risk features | ||||||||||
| Other accounts receivable of insignificant single amount and single accrued bad debt provision | ||||||||||
| Total | 16,500,022 | 100.0% | 16,500,022 | 18,737,454 | 100.0% | 18,737,454 | ||||
7.6.2 Bad debt provision accrued, transferred back or received in this periodThe bad debt provision accrued in this period was RMB 0 Yuan; and that transferred back or
received in this period was RMB 0 Yuan.7.6.3 Other accounts receivable actually cancelled after verification in this period
Nil7.6.4 Other accounts listed by nature
Unit: Yuan
| Nature | Ending book balance | Beginning book balance |
| Deposit and guaranty money receivable | 11,240,442 | 10,075,901 |
Nature
| Nature | Ending book balance | Beginning book balance |
| Imprest receivable | 2,134,326 | 2,215,146 |
| Investment receivable | 2,050,000 | |
| Consumption tax and added-value tax export rebate | 472,569 | 2,451,188 |
| Other | 2,652,685 | 1,945,219 |
| Total | 16,500,022 | 18,737,454 |
7.6.5 Other accounts receivable collected by the borrowers of top 5 units ranked by theending balance
Unit: Yuan
| Unit | Nature | Ending balance | Age | Percentage in total ending balance of other accounts receivable | Ending balance of bad debt provision |
| YEDA Construction Industry Association | Construction guaranty money | 7,702,477 | 2-3 years | 46.7% | |
| Beijing Shanshui Decoration Engineering Co., Ltd. | Advance electric charge receivable | 465,460 | 1-2 years | 2.8% | |
| Shaanxi Fangyuan Construction Engineering Co., Ltd. | Advance electric charge receivable | 449,337 | 1-2 years | 2.7% | |
| TRANSBANK | Deposit | 324,029 | Within 1 year | 2.0% | |
| YEDA Finance Bureau | Guaranty money | 198,056 | 1-2 years | 1.2% | |
| Total | -- | 9,139,359 | -- | 55.4% |
7.6.6 Other accounts receivable terminating recognition due to transfer of financialassets
Nil7.6.7 Other accounts receivable transferred and included in assets and liabilities
Nil
7.7 Inventories7.7.1 Inventory classification
Unit: Yuan
| Item | Ending balance | Beginning balance | ||||
| Book balance | Depreciation provision | Book value | Book balance | Depreciation provision | Book value | |
| Raw materials | 195,466,096 | 195,466,096 | 66,881,090 | 66,881,090 | ||
Goods in process
| Goods in process | 1,529,164,344 | 1,529,164,344 | 1,568,230,851 | 1,568,230,851 | ||
| Commodity stocks | 627,705,074 | 13,410,082 | 614,294,992 | 864,097,497 | 25,595,392 | 838,502,105 |
| Total | 2,352,335,514 | 13,410,082 | 2,338,925,432 | 2,499,209,438 | 25,595,392 | 2,473,614,046 |
7.7.2 Inventory depreciation provision
Unit: Yuan
| Item | Beginning balance | Increase in this period | Decrease in this period | Ending balance | ||
| Accrual | Other | Transfer back or write-off | Other | |||
| Raw materials | ||||||
| Goods in process | ||||||
| Commodity stocks | 25,595,392 | 683,753 | 12,869,063 | 13,410,082 | ||
| Total | 25,595,392 | 683,753 | 12,869,063 | 13,410,082 | ||
7.8 Assets held for sale
Unit: Yuan
| Item | Ending book value | Fair value | Estimated disposal expenses | Estimated disposal time |
| Zhenshantun collective apartment | 2,000,197 | 16,282,224 | 3,878,560 | 2018 |
| Total | 2,000,197 | 16,282,224 | 3,878,560 | -- |
The Company has signed an irrevocable agreement for disposing the fixed assets, and thecontract amount is RMB 16,282,224 Yuan. The disposal is predicted to be completed in 2018.
7.9 Other current assets
Unit: Yuan
| Item | Ending balance | Beginning balance |
| Prepaid corporate income tax | 101,768,819 | 22,911,298 |
| Deductible input tax | 259,484,264 | 206,529,504 |
| Rent to be amortized | 1,724,907 | 1,381,957 |
| Total | 362,977,990 | 230,822,759 |
7.10 Available-for-sale financial assets7.10.1 Particulars of available-for-sale financial assets
Unit: Yuan
| Item | Ending balance | Beginning balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
Available-for-sale financialinstruments:
| Available-for-sale financial instruments: | ||||||
| Available-for-sale equity instruments: | 463,880 | 463,880 | 467,251 | 467,251 | ||
| Fair value measurement | ||||||
| Cost measurement | 463,880 | 463,880 | 467,251 | 467,251 | ||
| Total | 463,880 | 463,880 | 467,251 | 467,251 |
7.10.2 Available-for-sale financial assets by cost measurement at the end of period
Unit: Yuan
| Invested unit | Book balance | Impairment provision | Shareholding ratio in the invested unit | Cash dividend in this period | ||||||
| Beginning | Increase in this period | Decrease in this period | Ending | Beginning | Increase in this period | Decrease in this period | Ending | |||
| Other (Note) | 467,251 | 5053 | 8424 | 463,880 | Less than 1% | |||||
| Total | 467,251 | 5053 | 8424 | 463,880 | -- | |||||
Note: The Group holds less than 1% of the shares in such invested entities. These invested
entities are all unlisted companies and their fair value can‘t be measured reliably, so the
Group shall measure such available-for-sale financial assets by cost method.7.11 Investment real estate7.11.1 Investment real estate by cost measurement method
√ Applicable □ Inapplicable
Unit: Yuan
| Item | Houses and buildings | Land use right | Construction in progress | Total |
| Ⅰ Original book value | ||||
| 1. Beginning balance | 38,347,283 | 38,347,283 | ||
| 2. Increase in this period | ||||
| 2.1 Outsourcing | ||||
| 2.2 Transfer in from inventories\fixed assets\ construction in progress | ||||
| 2.3 Business merger increase | ||||
| 3. Decrease in this period | ||||
| 3.1 Disposal | ||||
| 3.2 Other transfer out | ||||
| 4. Ending balance | 38,347,283 | 38,347,283 | ||
| Ⅱ Accumulated depreciation & accumulated amortization | ||||
| 1. Beginning balance | 19,879,294 | 19,879,294 | ||
| 2. Increase in this period | 590,610 | 590,610 | ||
| 2.1 Accrual or | 590,610 | 590,610 |
Item
| Item | Houses and buildings | Land use right | Construction in progress | Total |
| amortization | ||||
| 3. Decrease in this period | ||||
| 3.1 Disposal | ||||
| 3.2 Other transfer out | ||||
| 4. Ending balance | 20,469,904 | 20,469,904 | ||
| Ⅲ Impairment provision | ||||
| 1. Beginning balance | ||||
| 2. Increase in this period | ||||
| 2.1 Accrual | ||||
| 3. Decrease in this period | ||||
| 3.1 Disposal | ||||
| 3.2 Other transfer out | ||||
| 4. Ending balance | ||||
| Ⅳ Book value | ||||
| 1. Ending book value | 17,877,379 | 17,877,379 | ||
| 2. Beginning book value | 18,467,989 | 18,467,989 |
7.12 Fixed assets
7.12.1 Particulars of fixed assets
Unit: Yuan
| Item | Houses and buildings | Machinery equipment | Transportation tools | Total |
| Ⅰ Original book value: | ||||
| 1. Beginning balance | 4,508,868,684 | 2,247,350,293 | 28,689,415 | 6,784,908,392 |
| 2. Increase in this period | 28,099,550 | 276,616,965 | 2,714,616 | 307,431,131 |
| 2.1 Acquisition | 4,386,524 | 117,719,992 | 1,772,906 | 123,879,422 |
| 2.2 Transfer in from construction in progress | 98,234,615 | 98,234,615 | ||
| 2.3 Business merger increase | 23,713,026 | 60,662,358 | 941,710 | 85,317,094 |
| 2.4 Other | ||||
| 3. Decrease in this period | 7,556,503 | 3,521,487 | 11,077,990 | |
| 3.1 Disposal or retirement | 7,556,503 | 3,521,487 | 11,077,990 | |
| 3.2 Other | ||||
| 4. Ending balance | 4,536,968,234 | 2,516,410,755 | 27,882,544 | 7,081,261,533 |
| Ⅱ Accumulated depreciation | ||||
| 1. Beginning balance | 512,643,486 | 922,944,520 | 20,236,417 | 1,455,824,423 |
| 2. Increase in this period | 67,468,028 | 106,700,526 | 1,231,461 | 175,400,015 |
| 2.1 Accrual | 65,844,058 | 72,709,493 | 559,369 | 139,112,920 |
| 2.2 Business merger increase | 1,623,970 | 33,991,033 | 672,092 | 36,287,095 |
| 2.3 Other | ||||
| 3. Decrease in this period | 6,591,830 | 946,752 | 7,538,582 |
Item
| Item | Houses and buildings | Machinery equipment | Transportation tools | Total |
| 3.1 Disposal or retirement | 6,591,830 | 946,752 | 7,538,582 | |
| 3.2 Other | ||||
| 4. Ending balance | 580,111,514 | 1,023,053,216 | 20,521,126 | 1,623,685,856 |
| Ⅲ Impairment provision | ||||
| 1. Beginning balance | ||||
| 2. Increase | ||||
| 2.1 Accrual | ||||
| 2.2 Other | ||||
| 3. Decrease | ||||
| 3.1 Disposal or retirement | ||||
| 3.2 Other | ||||
| 4. Ending balance | ||||
| Ⅳ Book value | ||||
| 1. Ending book value | 3,956,856,720 | 1,493,357,539 | 7,361,418 | 5,457,575,677 |
| 2. Beginning book value | 3,996,225,198 | 1,324,405,773 | 8,452,998 | 5,329,083,969 |
As at June 30, 2018, the net value of the fixed assets with ownership restrictions was RMB142,338,624 Yuan (December 31, 2017: RMB 145,009,923 Yuan). Please refer to Note 7.52for details.
As at June 30, 2018, the net value of the fixed assets divided into those held for sale wasRMB 2,000,197 Yuan (December 31, 2017: RMB 2,000,197 Yuan).
7.12.2 Temporarily idle fixed assetsNil7.12.3 Fixed assets under finance leases
Nil7.12.4 Fixed assets under operating lease
Unit: Yuan
| Item | Ending book value |
| Machinery equipment | 199,791 |
7.12.5 Fixed assets without property certificates
Unit: Yuan
| Item | Book value | Reason for not receiving the property certificate |
| Industrial Production Center of the R&D Company | 1,623,153,949 | Under transaction |
Dormitory Building, Main Building and Reception Building of
Chang‘an Chateau
| Dormitory Building, Main Building and Reception Building of Chang‘an Chateau | 353,370,544 | Under transaction |
| European Town, Main Building and Service Building of Beijing Chateau | 190,443,678 | Under transaction |
| Main Building of Yantai Chateau Changyu Tinlot | 84,912,291 | Under transaction |
| Fermentation Workshop and Wine Storage Workshop of Xinjiang Tianzhu | 18,143,780 | Under transaction |
| Office Building and Packaging Workshop of Icewine Valley | 9,352,280 | Under transaction |
| Wine-making Workshop of Changyu (Jingyang) | 4,326,818 | Under transaction |
| Office Building, Laboratory Building and Workshop of Fermentation Center | 3,750,132 | Under transaction |
| Finished Goods Warehouse and Workshop of Kylin Packaging | 2,442,189 | Under transaction |
| Office of Sales Company | 2,021,311 | Under transaction |
| Total | 2,291,916,972 | Under transaction |
7.13 Construction in progress7.13.1 Particulars of construction in progress
| Item | Ending balance | Beginning balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Research, Development & Manufacture Center (―Changyu Wine City Complex‖) | 835,624,055 | 835,624,055 | 883,731,540 | 883,731,540 | ||
| Construction Project of Chang‘an Chateau | 48,016,036 | 48,016,036 | 53,290,036 | 53,290,036 | ||
| Construction Project of Ningxia Chateau | 47,902,668 | 47,902,668 | 35,711,269 | 35,711,269 | ||
| Construction Project of Shihezi Chateau | 29,221,272 | 29,221,272 | 25,463,724 | 25,463,724 | ||
| Construction Project of Sales Company | 14,205,640 | 14,205,640 | 11,355,685 | 11,355,685 | ||
| Construction Project of Chateau Tinlot | 17,689,488 | 17,689,488 | 5,819,246 | 5,819,246 | ||
| Construction Projects of Other Companies | 23,255,594 | 23,255,594 | 10,770,069 | 10,770,069 | ||
| Total | 1,015,914,753 | 1,015,914,753 | 1,026,141,569 | 1,026,141,569 | ||
7.13.2 Changes of major construction in progress in this period
Unit: Yuan
Item
| Item | Budget | Beginning balance | Increase in this period | Transferred to fixed assets in this period | Other decrease in this period | Ending balance | Proportion of accumulative project input in budget | Accumulative capitalized amount of interest | Including: capitalized amount of interest in this period | Capitalization ratio of interest in this period | Capital source |
| Construction Project of Research, Development & Manufacture Center (―Changyu Wine City Complex‖) | 4,505,780,000 | 883,731,540 | 39,381,914 | 87,489,399 | 835,624,055 | 72.5% | 11,092,506 | 2,664,541 | 1.20% and 4.3% | Loans form financial institutions and self-raised funds | |
| Construction Project of Chang‘an Chateau | 620,740,000 | 53,290,036 | 5,437,372 | 10,711,372 | 48,016,036 | 107.7% | Self-raised funds | ||||
| Construction Project of Shihezi Chateau | 780,000,000 | 25,463,724 | 3,757,548 | 29,221,272 | 92.0% | Self-raised funds | |||||
| Construction Project of Sales Company | 161,350,000 | 11,355,685 | 2,849,955 | 14,205,640 | 95.2% | Self-raised funds | |||||
| Construction Project of Ningxia Chateau | 41,415,000 | 35,711,269 | 12,191,399 | 47,902,668 | 128.0% | Self-raised funds | |||||
| Construction Project of Chateau Tinlot | 192,400,000 | 5,819,246 | 11,870,242 | 17,689,488 | 102.5% | Self-raised funds | |||||
| Total | 6,301,685,000 | 1,015,371,500 | 75,488,430 | 98,200,771 | 992,659,159 | -- | 11,092,506 | 2,664,541 | -- |
As at June 30, 2018, there was no indication for impairment of construction in progress of theGroup, so no provision for impairment was made.
7.14 Productive biological assets7.14.1 Productive biological assets by cost measurement method
Unit: Yuan
Item
| Item | Plantation | Total | |
| Immature | Mature | ||
| Ⅰ Original book value | |||
| 1. Beginning balance | 12,175,000 | 217,537,353 | 229,712,353 |
| 2. Increase in this period | 1,548,693 | 8,462,877 | 10,011,570 |
| 2.1 Outsourcing | |||
| 2.2 Self cultivation | 5,131,006 | 4,880,564 | 10,011,570 |
| 2.3 The immature turn to the mature | -3,582,313 | 3,582,313 | |
| 3. Decrease in this period | |||
| 3.1 Disposal | |||
| 3.2 Other | |||
| 4. Ending balance | 13,723,693 | 226,000,230 | 239,723,923 |
| Ⅱ Accumulated depreciation | |||
| 1. Beginning balance | 27,782,465 | 27,782,465 | |
| 2. Increase in this period | 9,279,710 | 9,279,710 | |
| 2.1 Accrual | 9,279,710 | 9,279,710 | |
| 2.2 Other | |||
| 3. Decrease in this period | |||
| 3.1 Disposal | |||
| 3.2 Other | |||
| 4. Ending balance | 37,062,175 | 37,062,175 | |
| Ⅲ Impairment provision | |||
| 1. Beginning balance | |||
| 2. Increase in this period | |||
| 2.1 Accrual | |||
| 2.2 Other | |||
| 3. Decrease in this period | |||
| 3.1 Disposal | |||
| 3.2 Other | |||
| 4. Ending balance | |||
| Ⅳ Book value | |||
| 1. Ending book value | 13,723,693 | 188,938,055 | 202,661,748 |
| 2. Beginning book value | 12,175,000 | 189,754,888 | 201,929,888 |
As at June 30, 2018, no ownership of the biological assets was restricted.
As at June 30, 2018, there was no indicationfor impairment ofbiological assets of the Group, so no
provision was made.
7.15 Intangible assets7.15.1 Particulars of intangible assets
Unit: Yuan
Item
| Item | Land use right | Software use right | Trademark | Total |
| Ⅰ Original book value | ||||
| 1. Beginning balance | 521,731,139 | 73,666,754 | 159,702,508 | 755,100,401 |
| 2. Increase in this period | 7,089,292 | 3,228,127 | 9,167,907 | 19,485,326 |
| 2.1 Acquisition | 999,745 | 1,183,404 | 211,645 | 2,394,794 |
| 2.2 Internal R&D | ||||
| 2.3 Business merger increase | 6,089,547 | 2,044,723 | 8,956,262 | 17,090,532 |
| 2.4 Other | ||||
| 3. Decrease in this period | ||||
| 3.1 Disposal | ||||
| 3.2 Other | ||||
| 4. Ending balance | 528,820,431 | 76,894,881 | 168,870,415 | 774,585,727 |
| Ⅱ Accumulated amortization | ||||
| 1. Beginning balance | 67,547,772 | 21,516,741 | 10,586,991 | 99,651,504 |
| 2. Increase in this period | 5,316,763 | 4,729,142 | 2,194,042 | 12,239,947 |
| 2.1 Accrual | 5,316,763 | 4,056,496 | 2,194,042 | 11,567,301 |
| 2.2 Business merger increase | 672,646 | 672,646 | ||
| 3. Decrease in this period | ||||
| 3.1 Disposal | ||||
| 3.2 Other | ||||
| 4. Ending balance | 72,864,535 | 26,245,883 | 12,781,033 | 111,891,451 |
| Ⅲ Impairment provision | ||||
| 1. Beginning balance | ||||
| 2. Increase in this period | ||||
| 2.1 Accrual | ||||
| 2.2 Other | ||||
| 3. Decrease in this period | ||||
| 3.1 Disposal | ||||
| 3.2 Other | ||||
| 4. Ending balance | ||||
| Ⅳ Book value |
1. Ending book value
| 1. Ending book value | 455,955,896 | 50,648,998 | 156,089,382 | 662,694,276 |
| 2. Beginning book value | 454,183,367 | 52,150,013 | 149,115,517 | 655,448,897 |
As at June 30, 2018, the net value of the intangible assets with ownership restrictions wasRMB 161,934,242 Yuan (December 31, 2017: RMB 164,051,996 Yuan). Please refer toNote 7.52 for details.
7.15.2 Land use right of that not receiving the property certificateNil7.16 Goodwill7.16.1 Original book value of goodwill
Unit: Yuan
| Name of the invested unit or matter forming goodwill | Beginning balance | Increase in this period | Decrease in this period | Ending balance | ||
| Formed by business merger | Other | Disposal | Other | |||
| Etablissements Roullet Fransac (―Roullet Fransac‖) | 13,112,525 | 13,112,525 | ||||
| Dicot Partners, S.L (―Atrio Group‖) | 92,391,901 | 92,391,901 | ||||
| Societe Civile Argricole Du Chateau De Mirefleurs (―Mirefleurs‖) | 15,761,440 | 15,761,440 | ||||
| Indomita Wine Company Chile, SpA | 6,870,115 | 6,870,115 | ||||
| Kilikanoon Estate, Australia | 35,794,894 | 35,794,894 | ||||
| Total | 128,135,981 | 35,794,894 | 163,930,875 | |||
7.17 Long-term unamortized expenses
Unit: Yuan
| Item | Beginning balance | Increase in this period | Amortization in this period | Other decrease | Ending balance |
| Land lease fees | 56,365,385 | 719,454 | 55,645,931 | ||
| Land acquisition fees | 43,976,036 | 569,650 | 43,406,386 | ||
| Afforestation fees | 125,628,334 | 6,101,637 | 6,526,355 | 125,203,616 | |
| Renovation costs | 873,263 | 109,158 | 764,105 | ||
| Other | 3,166,213 | 192,827 | 2,973,386 | ||
| Total | 230,009,231 | 6,101,637 | 8,117,444 | 227,993,424 |
7.18 Deferred income tax assets/liabilities7.18.1 Un-offset deferred income tax assets
Unit: Yuan
Item
| Item | Ending Balance | Beginning Balance | ||
| Deductible temporary difference | Deferred income tax assets | Deductible temporary difference | Deferred income tax assets | |
| Asset impairment provision | 13,410,082 | 3,352,521 | 25,595,392 | 6,398,848 |
| Unrealized profits from inter-company transactions | 585,312,988 | 146,328,247 | 618,591,681 | 154,647,920 |
| Deductible loss | 300,198,853 | 77,339,305 | 345,639,059 | 88,584,337 |
| Unpaid bonus | 59,305,392 | 14,853,004 | 94,462,722 | 23,671,611 |
| Dismission welfare | 20,405,213 | 5,101,303 | 27,980,857 | 6,995,214 |
| Deferred income | 108,652,154 | 23,832,078 | 109,797,054 | 24,285,203 |
| Asset valuation impairment | 673,019 | 181,715 | 684,622 | 184,848 |
| Accrued promotional expenses | 13,413,655 | 3,353,415 | ||
| Total | 1,087,957,701 | 270,988,173 | 1,236,165,042 | 308,121,396 |
7.18.2 Un-offset deferred income tax liabilities
Unit: Yuan
| Item | Ending Balance | Beginning Balance | ||
| Taxable temporary difference | Deferred income tax liabilities | Taxable temporary difference | Deferred income tax liabilities | |
| Assets appraisal appreciation in business merger under non-common control | 105,651,986 | 26,020,063 | 89,316,823 | 24,264,203 |
| Changes in fair value of available-for-sale financial assets | ||||
| Total | 105,651,986 | 26,020,063 | 89,316,823 | 24,264,203 |
7.18.3 Details of unconfirmed deferred income tax assets
Unit: Yuan
| Item | Ending balance | Beginning balance |
| Deductible loss | 157,307,221 | 150,320,039 |
| Total | 157,307,221 | 150,320,039 |
7.18.4 Deductible losses of unconfirmed deferred income tax assets will expire in:
Unit: Yuan
| Year | Ending sum | Beginning sum | Remark |
| 2019 | 7,311,273 | 7,311,273 | |
| 2020 | 45,960,766 | 45,960,766 |
2021
| 2021 | 82,685,213 | 82,685,213 | |
| 2022 | 14,362,787 | 14,362,787 | |
| 2023 | 6,987,182 | ||
| Total | 157,307,221 | 150,320,039 | -- |
7.19 Short-term loans7.19.1 Classification of short-term loans
Unit: Yuan
| Item | Ending balance | Beginning balance |
| Pledge loan | ||
| Mortgage loan | 54,882,050 | 65,939,662 |
| Guaranteed loan | 43,544,169 | |
| Fiduciary loan | 652,028,457 | 648,494,624 |
| Total | 750,454,676 | 714,434,286 |
As at June 30, 2018, the mortgage loan referred to the factoring business for accountsreceivable of EUR 4,576,413 (equivalent to RMB 35,016,424 Yuan) that Hacienda y Vinedos
Marques del Atrio, S.L.U. (―Marques del Atrio‖) transacted in such banks as Banco de
Sabadell, S.A. (December 31, 2017: RMB 46,337,062 Yuan), and a loan of USD 3,000,000(equivalent to RMB 19,865,626 Yuan) that Indomita Wine Company Chile, SpA from BBVAbank by mortgage of fixed assets of CLP 3,139,045,000 (equivalent to RMB 31,704,355 Yuan)(December 31, 2017: RMB 19,602,600 Yuan).
By means of overseas loan under domestic guarantee, the Company opened a financingguarantee with the credit line of domestic bank to provide a guarantee for the loan of AUD8,953,626 (equivalent to RMB 43,544,169 Yuan) of Kilikanoon Estate, Australia. The letterof guarantee came into effect from January 17, 2018 and will expire on January 15, 2019.
7.20 Accounts payable7.20.1 List of accounts payable
Unit: Yuan
| Item | Ending balance | Beginning balance |
| Within one year | 502,094,548 | 664,020,176 |
| From one year to two years | 2,408,743 | 2,051,592 |
| From two years to three years | 1,097,233 | 371,111 |
| Over three years | 256,431 | |
| Total | 505,856,955 | 666,442,879 |
7.20.2 Explanation of significant accounts payable aged more than one yearAs at June 30, 2018, there were no significant accounts payable aged more than one year.
7.21 Advances from customers7.21.1 List of advances from customers
Unit: Yuan
Item
| Item | Ending sum | Beginning sum |
| Within one year | 356,522,984 | 340,025,690 |
| From one year to two years | 2,894,155 | 7,072,254 |
| From two years to three years | 3,285,740 | 381,463 |
| Over three years | 3,652,401 | 3,414,749 |
| Total | 366,355,280 | 350,894,156 |
7.21.2 Advances from customers of significant amount aged more than one yearAs at June 30, 2018, the Company had no advances from customers of significant amount
aged more than one year.7.22 Employee remunerations payable
7.22.1 List of employee remunerations payable
Unit: Yuan
| Item | Beginning balance | Increase in this period | Decrease in this period | Ending balance |
| 1. Short-term remuneration | 182,545,284 | 218,523,367 | 244,584,113 | 156,484,538 |
| 2. Post-employment welfare – defined contribution plan | 298,093 | 26,186,535 | 25,379,241 | 1,105,387 |
| 3. Dismission welfare | 27,980,857 | 1,275,387 | 8,851,031 | 20,405,213 |
| 4.Other welfare due within one year | ||||
| Total | 210,824,234 | 245,985,289 | 278,814,385 | 177,995,138 |
7.22.2 List of short-term remunerations
Unit: Yuan
| Item | Beginning balance | Increase in this period | Decrease in this period | Ending balance |
| 1. Salaries, bonuses, allowances and subsidies | 185,014,318 | 194,859,167 | 220,953,405 | 158,920,080 |
| 2. Staff welfare | 2,116,475 | 4,592,350 | 5,304,548 | 1,404,277 |
| 3. Social insurance charges | 524,316 | 11,468,383 | 10,938,536 | 1,054,163 |
| Including: Medical insurance | 524,316 | 9,928,407 | 9,411,157 | 1,041,566 |
| Injury insurance | 819,706 | 807,109 | 12,597 | |
| Maternity insurance | 720,270 | 720,270 | ||
| 4. Housing fund | 39,256 | 5,680,880 | 5,709,726 | 10,410 |
| 5. Union fee and staff education fee | 2,060,231 | 1,922,587 | 2,038,363 | 1,944,455 |
Item
| Item | Beginning balance | Increase in this period | Decrease in this period | Ending balance |
| 6. Short-term compensated absences | ||||
| 7. Short-term profit-sharing plan | ||||
| Minus: Those divided into non-current liabilities | 7,209,312 | 360,465 | 6,848,847 | |
| Total | 182,545,284 | 218,523,367 | 244,584,113 | 156,484,538 |
7.22.3 List of defined contribution plan
Unit: Yuan
| Item | Beginning balance | Increase | Decrease | Ending balance |
| 1. Basic endowment insurance | 297,591 | 25,034,196 | 24,821,104 | 510,683 |
| 2. Unemployment insurance | 502 | 1,152,339 | 558,137 | 594,704 |
| 3. Enterprise annuity payment | - | |||
| Total | 298,093 | 26,186,535 | 25,379,241 | 1,105,387 |
7.22.4 Dismission welfare
Unit: Yuan
| Item | Beginning balance | Increase | Decrease | Ending balance |
| 1. Compensation for server of labor relation | 1,275,387 | 1,275,387 | ||
| 2. Compensation for early retirement | 27,980,857 | 7,575,644 | 20,405,213 | |
| Total | 27,980,857 | 1,275,387 | 8,851,031 | 20,405,213 |
7.23 Taxes payable
Unit: Yuan
| Item | Ending balance | Beginning balance |
| Value added tax | 15,404,619 | 35,681,696 |
| Consumption tax | 12,373,243 | 44,961,022 |
| Corporate income tax | 35,771,016 | 38,834,293 |
| Individual income tax | 804,004 | 7,805,917 |
| Urban maintenance and construction tax | 1,542,643 | 5,669,280 |
| Property tax | 3,976,184 | 4,647,644 |
| Urban land use tax | 2,493,549 | 2,645,687 |
| Other | 1,494,489 | 4,848,617 |
| Total | 73,859,747 | 145,094,156 |
7.24 Interest payable
Unit: Yuan
| Item | Ending balance | Beginning balance |
| Interest of long-term loans with interest paid by |
Item
| Item | Ending balance | Beginning balance |
| installment and principal paid on maturity | ||
| Interest of corporate bonds | ||
| Interest payable of short-term loans | 834,247 | 771,250 |
| Interest of preferred shares\ perpetual bonds divided into financial liabilities | ||
| Other | ||
| Total | 834,247 | 771,250 |
7.25 Dividends payable
Unit: Yuan
| Item | Ending balance | Beginning balance |
| Ordinary stock dividends | ||
| Preferred stock dividends/sustainable debt dividends divided into equity instruments | ||
| Other | 746,021 | |
| Total | 746,021 |
7.26 Other payables7.26.1 Other payables listed by nature
Unit: Yuan
| Item | Ending balance | Beginning balance |
| Dealer‘s deposit payable | 153,278,830 | 139,710,963 |
| Equipment purchase and construction costs payable | 112,120,286 | 130,706,777 |
| Transportation charges payable | 13,329,596 | 27,847,092 |
| Trademark use fees payable for Changyu Group Company | 45,965,699 | 77,208,929 |
| Advertising expenses payable | 243,506,777 | 132,248,615 |
| Employee cash deposit | 7,199,282 | 13,327,132 |
| Supplier‘s deposit payable | 11,909,254 | 3,082,595 |
| Contracting fees payable | 26,669,423 | 38,070,571 |
| Other | 57,728,768 | 40,761,645 |
| Total | 671,707,915 | 602,964,319 |
7.26.2 Other significant accounts payable aged more than one year
Unit: Yuan
| Item | Ending balance | Cause of unpayment or carry-over |
| Beijing Qinglang Ecological Agriculture Technology Development | 7,033,763 | The contracting fees haven‘t been settled |
| Yantai De‘an Investment Co., Ltd. | 3,218,174 | The contracting fees haven‘t been settled |
| Total | 10,251,937 | -- |
7.27 Non-current liabilities due within one year
Unit: Yuan
Item
| Item | Ending balance | Beginning balance |
| Long-term loans due within one year | 106,570,388 | 76,954,827 |
| Long-term accounts payable due within one year | 34,000,000 | 34,000,000 |
| Total | 140,570,388 | 110,954,827 |
7.28 Other current liabilities
Unit: Yuan
| Item | Ending balance | Beginning balance |
| Deferred income | 16,311,727 | 16,878,199 |
| Total | 16,311,727 | 16,878,199 |
7.29 Long-term loans7.29.1 Classification of long-term loans
Unit: Yuan
| Item | Ending balance | Beginning balance |
| Pledge loan | ||
| Mortgage loan | 7,528,121 | 6,693,544 |
| Guaranteed loan | 75,000,000 | 81,250,000 |
| Fiduciary loan | 71,437,070 | 68,182,310 |
| Total | 153,965,191 | 156,125,854 |
Description of the classification of long-term loans:
Unit: Yuan
| Item | Ending balance | Long-term loan due within one year | Long-term loan due over one year |
| Pledge loan | |||
| Mortgage loan | 7,528,121 | 7,528,121 | |
| Guaranteed loan | 100,000,000 | 25,000,000 | 75,000,000 |
| Fiduciary loan | 153,007,458 | 81,570,388 | 71,437,070 |
| Total | 260,535,579 | 106,570,388 | 153,965,191 |
As at June 30, 2018, the guaranteed loan referred to the long-term loan of RMB 100,000,000Yuan borrowed by the Company for the R&D Company by means of credit guarantee(December 31, 2017: RMB 100,000,000 Yuan), and the mortgage loan referred to the loan ofEUR 679,560 (equivalent to RMB 5,199,656 Yuan) borrowed from Popular Espa?ol byMarques del Atrio by mortgage of its fixed assets of EUR 4,264,170 (equivalent to RMB32,627,300 Yuan) (December 31, 2017: RMB 9,502,372 Yuan). Kilikanoon Estate, Australiaborrowed a loan of AUD 478,783 (equivalent to RMB 2,328,465 Yuan) by pledge of its fixedassets of AUD 503,163 (equivalent to RMB 2,447,034 Yuan) from NAB bank (December 31,
2017: Nil).7.30 Long-term accounts payable7.30.1 Long-term accounts payable listed by nature
Unit: Yuan
Item
| Item | Ending balance | Beginning balance |
| China Agricultural Development Key Construction Fund | 235,000,000 | 259,000,000 |
| Total | 235,000,000 | 259,000,000 |
In 2016, Agricultural Development Fund invested RMB 305,000,000 Yuan in the R&DCompany, accounting for 37.9% of the registered capital. According to the investmentagreement, it is agreed that Agricultural Development Fund will take back the investmentfund in ten years and obtain fixed income according to year, which is 1.2% of the remainingprincipal. Except for the above fixed income, the Agricultural Development Fund shall notenjoy other profits of the R&D Company or bear the losses of the R&D Company.Accordingly, the investment of the Agricultural Development Fund in the R&D Company isequity investment nominally, which is debt investment in deed. The Group included theinvestment of the Agricultural Development Fund in long-term accounts payable measured byamortized cost. In 2017, the Group gave back the principal of RMB 12,000,000 Yuan. FromJanuary to June 2018, the Group gave back the principal of RMB 24,000,000 Yuan, and themortgaged and pledged assets included monetary capital of RMB 61,700,000 Yuan, fixedassets of RMB 75,559,935 Yuan, and intangible assets of RMB 161,934,242.
Unit: Yuan
| Balance of long-term accounts payable | Long-term accounts payable due within one year | Long-term accounts payable due in one year later |
| 269,000,000 | 34,000,000 | 235,000,000 |
7.31 Deferred income
Unit: Yuan
| Item | Beginning balance | Increase in this period | Decrease in this period | Ending balance | Forming reason |
| Governmental subsidy | 109,797,054 | 8,200,000 | 9,344,900 | 108,652,154 | |
| Minus: Those included in current liabilities | 16,878,199 | 16,311,727 | -- | ||
| Non-current liabilities | 92,918,855 | 92,340,427 | -- |
Projects related to governmental subsidy
Unit: Yuan
Item of liabilities
| Item of liabilities | Beginning balance | Amount of subsidy newly increased in this period | Amount included in non-operating revenue in this period | Amount included in other income in this period | Amount offset the cost expenses | Other changes | Ending balance | Related to assets/income |
| Grape bulk wine brewing project | 4,739,400 | 717,450 | 4,021,950 | Related to assets | ||||
| Reward for investment in fixed assets of Chateau Shihezi project | 9,276,600 | 1,140,000 | 8,136,600 | Related to assets | ||||
| Industrial revitalization and technical transformation project in Xinjiang | 17,064,000 | 711,000 | 16,353,000 | Related to assets | ||||
| Special subsidy for supporting infrastructure | 5,300,000 | 530,000 | 4,770,000 | Related to assets | ||||
| Industrial revitalization and technical transformation project in Ningxia | 1,086,000 | 1,086,000 | Related to assets | |||||
| Tourism development fund subsidy project | 500,000 | 500,000 | Related to income | |||||
| Supporting fund for corporate development | 10,200,000 | 10,200,000 | Related to income | |||||
| Construction project of grape brewing production capacity (Huanren) | 3,600,000 | 200,000 | 3,400,000 | Related to assets | ||||
| Electronic traceability system project of wine | 3,192,311 | 333,527 | 2,858,784 | Related to assets | ||||
| Transferred fund of Propaganda Department, Miyun County Committee | 888,945 | 444,472 | 444,473 | Related to assets | ||||
| Wine industry development project | 744,000 | 93,000 | 651,000 | Related to assets | ||||
| Peninsula blue economic zone construction project | 8,000,000 | 1,000,000 | 7,000,000 | Related to assets | ||||
| Technical transformation project of information-based system construction engineering | 3,480,000 | 290,000 | 3,190,000 | Related to assets | ||||
| Cross-border e-commerce project | 702,615 | 300,000 | 1,002,615 | Related to income | ||||
| Research project of red wine phenolic substances | 284,601 | 284,601 | Related to income | |||||
| Grape base construction project | 520,000 | 260,000 | 260,000 | Related to assets | ||||
| Fund for water pollution treatment project | 320,132 | 56,801 | 263,331 | Related to income | ||||
| Infrastructure | 1,843,750 | 62,500 | 1,781,250 | Related to assets |
Item of liabilities
| Item of liabilities | Beginning balance | Amount of subsidy newly increased in this period | Amount included in non-operating revenue in this period | Amount included in other income in this period | Amount offset the cost expenses | Other changes | Ending balance | Related to assets/income |
| construction fund | ||||||||
| Supporting fund for industrial development | 36,900,000 | 2,050,000 | 34,850,000 | Related to assets | ||||
| Subsidy for economic and energy-saving technical transformation project | 1,154,700 | 64,150 | 1,090,550 | Related to assets | ||||
| Special fund for building Yantai as a strong manufacturing city | 4,750,000 | 4,750,000 | Related to income | |||||
| Efficient water-saving irrigation project | 3,150,000 | 306,000 | 2,844,000 | Related to assets | ||||
| Total | 109,797,054 | 8,200,000 | 9,344,900 | 108,652,154 | -- |
7.32 Other non-current liabilities
Unit: Yuan
| Item | Ending balance | Beginning balance |
| Employee remunerations payable | 6,848,847 | 7,209,312 |
| Total | 6,848,847 | 7,209,312 |
As at June 30, 2018, the employee remunerations payable referred to the job security depositdeducted from the year-end bonus of the employees higher than sales manager of theCompany in proportion, which will be paid from 2019 to 2021 as predicted.
7.33 Share capital
Unit: Yuan
| Beginning balance | Increase or decrease (+,-) in this period | Ending balance | |||||
| Newly issued shares | Allocated shares | Share transferred from accumulation fund | Other | Subtotal | |||
| Total shares | 685,464,000 | 685,464,000 | |||||
7.34 Capital reserves
Unit: Yuan
| Item | Beginning balance | Increase in this period | Decrease in this period | Ending balance |
| Capital premium (Share capital premium) | 560,038,853 | 560,038,853 | ||
| Other capital reserves | 5,916,588 | 5,916,588 | ||
| Total | 565,955,441 | 565,955,441 |
7.35 Other comprehensive income
Unit: Yuan
Item
| Item | Beginning balance | Amount incurred in this period | Ending balance | ||||
| Amount incurred before income tax in this period | Minus: profit or loss in this period transferred from other comprehensive income before | Minus: income tax expenses | Attributable to parent company after tax | Attributable to minority shareholders after tax | |||
| 1. Other comprehensive income not to be reclassified into profit and loss later | |||||||
| Including: change in net liabilities and net assets from recalculated defined benefit plan | |||||||
| Share enjoyed in other comprehensive income not to be reclassified into profit and loss in invested unit under equity law | |||||||
| 2. Other comprehensive income to be reclassified into profit and loss later | 3,109,240 | -11,126,413 | -9,230,820 | -1,895,593 | -6,121,580 | ||
| Including: share enjoyed in other comprehensive income to be reclassified into profit and loss in invested unit under equity law | |||||||
| Profit and loss from changes in fair value of financial assets for sale | |||||||
| Profit and loss from reclassification of held-to-maturity investment into fair value of financial assets for sale | |||||||
| Effective part of profit and loss of cash-flow hedge | |||||||
| Difference in translation of Foreign Currency Financial Statement | 3,109,240 | -11,126,413 | -9,230,820 | -1,895,593 | -6,121,580 | ||
| Total other comprehensive income | 3,109,240 | -11,126,413 | -9,230,820 | -1,895,593 | -6,121,580 | ||
7.36 Surplus reserves
Unit: Yuan
| Item | Beginning balance | Increase in this period | Decrease in this period | Ending balance |
| Legal surplus reserves | 342,732,000 | 342,732,000 | ||
| Free surplus reserves | ||||
| Reserve fund | ||||
| Enterprise expansion fund | ||||
| Other | ||||
| Total | 342,732,000 | 342,732,000 |
7.37 Undistributed profit
Unit: Yuan
Item
| Item | Ending balance | Beginning balance |
| Undistributed profit at the end of prior period before adjustment | 7,309,081,618 | 6,620,118,562 |
| Total Undistributed profit at the beginning of the period before adjustment (increase listed with+ , and decrease listed with -) | ||
| Undistributed profit at the beginning of the period after adjustment | 7,309,081,618 | 6,620,118,562 |
| Plus: Net profit for owner of the parent company | 635,837,405 | 1,031,695,056 |
| Minus: Drawn legal surplus | ||
| Drawn free surplus | ||
| Drawn common risk provision | ||
| Common dividend payable | 342,732,000 | |
| Common dividend transferred to share capital | ||
| Undistributed profit at the end of period | 7,944,919,023 | 7,309,081,618 |
7.38 Operating income and operating cost
Unit: Yuan
| Item | Amount incurred in this period | Amount incurred in prior period | ||
| Income | Cost | Income | Cost | |
| Main business | 2,818,814,912 | 969,407,949 | 2,761,797,479 | 921,629,225 |
| Other business | 9,415,152 | 5,149,343 | 5,300,718 | 4,124,908 |
| Total | 2,828,230,064 | 974,557,292 | 2,767,098,197 | 925,754,133 |
7.39 Taxes and surcharges
Unit: Yuan
| Item | Amount incurred in this period | Amount incurred in prior period |
| Consumption tax | 97,343,463 | 87,580,364 |
| Urban maintenance and construction tax | 23,778,056 | 30,288,028 |
| Education surcharges | 17,417,976 | 21,968,359 |
| Building tax | 16,878,556 | 9,993,265 |
| Land use tax | 6,013,248 | 5,092,473 |
| Stamp duty | 2,247,814 | 1,970,707 |
| Other | 1,597,138 | 3,580,802 |
| Total | 165,276,251 | 160,473,998 |
7.40 Selling expenses
Unit: Yuan
Item
| Item | Amount incurred in this period | Amount incurred in prior period |
| Advertising promotion expenses | 362,293,691 | 353,792,438 |
| Employee remunerations | 139,247,494 | 115,463,193 |
| Transportation expenses | 67,177,736 | 64,053,872 |
| Trademark use fees | 43,363,867 | 44,428,033 |
| Storage and lease expenses | 19,857,616 | 27,357,293 |
| Depreciation expenses | 21,735,895 | 19,740,726 |
| Service charges | 12,459,237 | 6,734,393 |
| Travel expenses | 10,886,711 | 10,036,717 |
| Water, electricity and gas charges | 7,166,936 | 3,572,499 |
| Office & postage costs | 2,349,806 | 2,479,541 |
| Packing expenses | 3,873,287 | 3,140,528 |
| Public security & clean-keeping expenses | 2,336,546 | 2,532,418 |
| Business entertainment expenses | 1,995,516 | 1,190,071 |
| Afforestation fees | 1,177,756 | 1,342,117 |
| Property management expenses | 1,291,390 | 1,348,857 |
| Other | 13,445,549 | 11,523,030 |
| Total | 710,659,033 | 668,735,726 |
7.41 Management expenses
Unit: Yuan
| Item | Amount incurred in this period | Amount incurred in prior period |
| Employee remunerations | 60,660,238 | 45,732,792 |
| Depreciation expenses | 35,410,914 | 28,996,760 |
| Contracting expenses | 7,178,106 | 10,086,436 |
| Repair expenses | 7,076,148 | 5,768,634 |
| Office expenses | 10,977,189 | 8,693,956 |
| Amortization expenses | 9,520,182 | 9,569,693 |
| Afforestation fees | 6,493,556 | 3,893,103 |
| Rental expenses | 5,061,778 | 5,095,023 |
| Business entertainment expenses | 2,815,060 | 2,562,180 |
| Public security & clean-keeping expenses | 3,953,646 | 2,787,735 |
| Travel expenses | 2,139,939 | 2,650,716 |
| Other | 8,805,132 | 4,705,358 |
| Total | 160,091,888 | 130,542,386 |
7.42 Financial expenses
Unit: Yuan
| Item | Amount incurred in this period | Amount incurred in prior period |
| Interest expenditure | 18,739,528 | 15,042,038 |
| Minus: Interest income | 7,245,870 | 4,849,166 |
Plus: Commission charges
| Plus: Commission charges | 3,005,483 | 754,300 |
| Exchange gain or loss | -1,413,199 | 200,777 |
| Total | 13,085,942 | 11,147,949 |
7.43 Loss on impairment of assets
| Item | Amount incurred in this period | Amount incurred in prior period |
| 1. Loss on bad debts | ||
| 2. Inventory falling price loss | -4,730,948 | -5,853,576 |
| 3. Loss on impairment of available-for-sale financial assets | ||
| 4. Loss on impairment of held-to maturity investment | ||
| 5. Loss on impairment of long-term equity investment | ||
| 6. Loss on impairment of investment real estate | ||
| 7. Loss on impairment of fixed assets | ||
| 8. Loss on impairment of engineering materials | ||
| 9. Loss on impairment of construction in progress | ||
| 10. Loss on impairment of productive biological assets | ||
| 11. Loss on impairment of oil and gas assets | ||
| 12. Loss on impairment of intangible assets | ||
| 13. Loss on impairment of goodwill | ||
| 14. Other | ||
| Total | -4,730,948 | -5,853,576 |
7.44 Income from asset disposal
Unit: Yuan
| Source of income from asset disposal | Amount incurred in this period | Amount incurred in prior period |
| Income from disposal of fixed assets | 93,958 | -495,071 |
| Total | 93,958 | -495,071 |
7.45 Other income
Unit: Yuan
| Source of other income | Amount incurred in this period | Amount incurred in prior period | Nature |
| Supporting fund for industrial development | 2,050,000 | Related to assets | |
| Industrial revitalization and technical transformation project in Ningxia | 1,086,000 | Related to assets | |
| Reward for investment in fixed assets | 1,140,000 | Related to assets | |
| Special fund for construction of peninsula blue economic zone | 1,000,000 | Related to assets | |
| Other | 4,012,100 | Related to assets | |
| Tax returns | 15,011,673 | Related to income | |
| Other | 13,683,105 | Related to income |
Source of other income
| Source of other income | Amount incurred in this period | Amount incurred in prior period | Nature |
| Total | 37,982,878 |
7.46 Non-operating income
Unit: Yuan
| Item | Amount incurred in this period | Amount incurred in prior period | Amount included in the current non-recurring profits/losses |
| Gains on debt recombination | |||
| Gains on exchange of non-monetary assets | |||
| Grains on donations | |||
| Governmental subsidy | 19,735,204 | ||
| Other | 2,006,392 | 3,412,401 | 2,006,392 |
| Total | 2,006,392 | 23,147,605 | 2,006,392 |
Governmental subsidies included in the current profit/loss:
Unit: Yuan
| Item of subsidy | Amount incurred in this period | Amount incurred in prior period | Related to assets/income |
| Supporting fund of major projects | 3,520,914 | Related to assets | |
| Supporting fund for the development of small and medium-sized enterprises | 2,086,027 | Related to assets | |
| Tax returns | 12,737,950 | Related to income | |
| Other | 1,390,313 | Related to income | |
| Total | 19,735,204 | -- |
7.47 Non-operating expenses
Unit: Yuan
| Item | Amount incurred in this period | Amount incurred in prior period | Amount included in the current non-recurring profits/losses |
| Loss on debt recombination | |||
| Loss on exchange of non-monetary assets | |||
| Donation | |||
| Fine, penalty and overdue fine paid due to violation of laws and administrative regulations | 1,187,713 | 170,997 | 1,187,713 |
| Other | 204,649 | 15,571 | 204,649 |
| Total | 1,392,362 | 186,568 | 1,392,362 |
7.48 Income tax expenses7.48.1 List of income tax expenses
Unit: Yuan
Item
| Item | Amount incurred in this period | Amount incurred in prior period |
| Current income tax expenses | 178,993,081 | 195,716,215 |
| Deferred income tax expenses | 32,986,654 | 33,036,575 |
| Total | 211,979,735 | 228,752,790 |
7.48.2 Adjustment process of accounting profit and income tax expenses
Unit: Yuan
| Item | Amount incurred in this period |
| Total profit | 847,981,472 |
| Income tax expenses calculated according to the legal/applicable tax rate | 211,995,368 |
| Influence of different tax rates applicable to subsidiary | -3,617,656 |
| Influence of income tax in the term before adjustment | 200,814 |
| Influence of nontaxable income | |
| Influence of non-deductible costs, expenses and losses | 1,654,413 |
| Influence of deductible loss from use of unconfirmed deferred income tax assets in prior period | |
| Influence of deductible temporary difference or deductible loss of unconfirmed deferred income tax assets in this period | 1,746,796 |
| Income tax expense | 211,979,735 |
7.49 Other comprehensive incomeSee details in Note 7.35.7.50 Items of cash flow statement7.50.1 Other cash received related to operating activities
Unit: Yuan
| Item | Amount incurred in this period | Amount incurred in prior period |
| Governmental subsidy income | 33,687,978 | 1,570,329 |
| Interest income | 3,555,019 | 3,007,182 |
| Net amercement income | 1,609,829 | 1,173,364 |
| Withdrawal of cash deposit for bills payable | 30,900,000 | |
| Other | 3,490,195 | 2,239,037 |
| Total | 42,343,021 | 38,889,912 |
7.50.2 Other cash paid related to operating activities
Unit: Yuan
Item
| Item | Amount incurred in this period | Amount incurred in prior period |
| Selling expenses | 387,846,396 | 352,845,674 |
| Administrative expenses | 45,235,101 | 43,700,254 |
| Refundable deposits | 35,030,980 | |
| Other | 3,895,589 | 940,870 |
| Total | 436,977,086 | 432,517,778 |
7.50.3 Other cash paid related to investment activities
Unit: Yuan
| Item | Amount incurred in this period | Amount incurred in prior period |
| Prepaid investment fund | 317,654,642 | |
| Total | 317,654,642 |
7.50.4 Other cash received related to financial activities
Unit: Yuan
| Item | Amount incurred in this period | Amount incurred in prior period |
| Government subsidies received related to assets | 3,150,000 | 1,000,000 |
| Interest income from pledge of fixed deposits by the R&D Company | 371,431 | 303,473 |
| Long-term loans from pledge of fixed deposits by R&D Company | 20,000,000 | |
| Total | 23,521,431 | 1,303,473 |
7.50.5 Other cash paid related to financial activities
Unit: Yuan
| Item | Amount incurred in this period | Amount incurred in prior period |
| R&D Company‘ long-term loans pledged by fixed-term deposits | 20,000,000 | |
| Total | 20,000,000 |
7.51 Supplementary information to cash flow statement7.51.1 Supplementary information to cash flow statement
Unit: Yuan
| Supplementary materials | Amount incurred in this period | Amount incurred in prior period |
| 1. Cash flows from operating activities calculated by adjusting the net profit: | -- | -- |
| Net profit | 636,001,737 | 670,010,757 |
| Plus: Provision for impairment of assets | -4,730,948 | -5,853,576 |
| Depreciation of fixed assets, oil-and-gas assets and productive biological assets | 148,983,240 | 132,923,630 |
Supplementary materials
| Supplementary materials | Amount incurred in this period | Amount incurred in prior period |
| Intangible assets amortization | 11,567,301 | 9,588,347 |
| Amortization of long term prepaid expenses | 8,117,444 | 5,221,889 |
| Losses on disposal of fixed assets, intangible assets and other long-term assets (profit listed with ―－‖) | -93,958 | 495,071 |
| Losses on retirement of fixed assets (profit listed with ―－‖) | ||
| Losses on fair value change (profit listed with ―－‖) | ||
| Financial costs (profit listed with ―－‖) | 15,048,678 | 15,086,410 |
| Investment losses (profit listed with ―－‖) | ||
| Decrease in deferred income tax assets (increase listed with ―-‖) | 37,133,223 | 36,092,247 |
| Increase of deferred income tax liabilities (decrease listed with ―－‖) | -4,146,569 | -3,055,672 |
| Decrease in inventories (increase listed with ―-‖) | 216,486,236 | 230,160,387 |
| Decrease in operating receivables (increase listed with ―-‖) | -305,623,146 | -345,259,383 |
| Increase in operating payable (decrease listed with ―-‖) | -205,989,766 | -325,049,788 |
| Other | ||
| Net cash flows from operating activities | 552,753,472 | 420,360,319 |
| 2. Significant investment and financing activities not involving cash deposit and withdrawal: | -- | -- |
| Debt transferred into assets | ||
| Convertible corporate bond due within 1 year | ||
| Fixed assets under financing lease | ||
| 3. Net changes of cash and cash equivalent: | -- | -- |
| Ending balance of cash | 1,428,670,462 | 1,229,487,903 |
| Minus: Beginning balance of cash | 1,180,889,274 | 1,256,942,304 |
| Plus: Ending balance of cash equivalent | ||
| Minus: Beginning balance of cash equivalent | ||
| Net increase amount of cash and cash equivalent | 247,781,188 | -27,454,401 |
7.51.2 Composition of cash and cash equivalents
Unit: Yuan
| Item | Ending balance | Beginning balance |
| 1. Cash | 1,428,670,462 | 1,229,487,903 |
| Including: Cash on hand | 151,228 | 112,832 |
| Bank deposits on demand | 1,428,519,234 | 1,229,375,071 |
| Other monetary capital on demand | ||
| Due from central bank available for payment | ||
| Due from the industry | ||
| Inter-bank lending | ||
| 2. Cash equivalents | ||
| Including: Bond investment due within three months | ||
| 3. Balance of cash and cash equivalents at the end of period | 1,428,670,462 | 1,229,487,903 |
Including: Restricted use of parent company orsubsidiaries in the group
| Including: Restricted use of parent company or subsidiaries in the group |
7.52 Assets with ownership or use right restrictions
Unit: Yuan
| Item | Ending book value | Reason for restriction |
| Monetary capital | 124,367,991 | Loan deposit, L/C deposit, frozen balance of Alipay, housing fund and guaranty money for deposit in unit card |
| Accounts receivable | 35,016,424 | Pledge of short-term loans |
| Fixed assets | 142,338,624 | Pledge of short-term loans, long-term loans and long-term accounts payable |
| Intangible assets | 161,934,242 | Pledge of long-term accounts payable |
| Total | 463,657,281 | -- |
7.53 Foreign currency monetary items7.53.1 Foreign currency monetary itemsThe foreign currency monetary items of the Group in domestic entities of China are listed as
follows:
Unit: Yuan
| Item | Ending foreign currency balance | Translation exchange rate | Ending converted RMB balance |
| Monetary capital | -- | -- | 39,366,401 |
| Including: USD | 5,949,495 | 6.6166 | 39,365,429 |
| EUR | 127 | 7.6515 | 972 |
| HKD |
7.53.2 Overseas operational entitiesThe currency adopted by the overseas subsidiaries of the Company according to the main
economic environment where the operation is located shall be chosen as the recording
currency. Marques del Atrio and Francs Champs Participations SAS (―Francs Champs‖) both
use euro as the recording currency, Indomita Wine Company Chile, SpA uses Chilean peso asthe recording currency, and Kilikanoon Estate, Australia uses Australian dollar as therecording currency. The foreign currency assets or liabilities of overseas subsidiaries are listedas follows:
Unit: Yuan
| Item | Ending foreign currency balance | Translation exchange rate | Ending converted RMB balance |
| Monetary capital | -- | -- | 41,202,833 |
| Including: USD | 6,169,166 | 6.6166 | 40,818,904 |
| EUR | 50,177 | 7.6515 | 383,929 |
| HKD | |||
| Short-term loans | -- | -- | 59,549,400 |
| Including: USD | 9,000,000 | 6.6166 | 59,549,400 |
| EUR | |||
| HKD |
8. Changes in scope of consolidation8.1 Business merger under non-common control incurred in this period
Unit: Yuan
Name of the
purchased
| Name of the purchased | Time of equity acquisition | Cost of equity acquisition | Shareholding ratio | Way of equity acquisition | Purchasing date | Determination basis of the purchasing date | Income of the purchased from the purchasing date to the end of this period | Net profit of the purchased from the purchasing date to the end of this period |
| Kilikanoon Estate Pty Ltd ("Kilikanoon Estate, Australia") | January 18, 2018 | 105,926,184 | 80% | Purchase | January 18, 2018 | The Company acquired the control right over the merged party on the date of purchase. | 25,904,401 | -115,317 |
According to the Equity Transfer Contract signed between the Company and the shareholdersof Kilikanoon Estate, Australia, the Company purchased 80% of the shares held byKilikanoon Estate, Australia with AUD 20,605,000 (equivalent to RMB 105,926,184 Yuan).On January 18, 2018, the preconditions for full equity transfer were fulfilled, and theCompany acquired the control right over the finance and business policy of Kilikanoon Estate,Australia.
8.1.2 Combined cost and goodwill
Unit: Yuan
| Combined cost | Kilikanoon Estate, Australia |
| --Cash | 105,926,184 |
| -- Fair value of the non-cash assets | |
| -- Fair value of the issued or assumed debts | |
| -- Fair value of the issued equity securities | |
| -- Fair value of the contingent consideration | |
| -- Fair value of the stock equity held before the purchasing date on the purchasing date | |
| --Other | |
| Total combined cost | 105,926,184 |
| Minus: Fair value share of the acquired net identifiable assets | 70,131,290 |
| Amount of the share that the goodwill/combined cost is less than the fair value of the net identifiable assets | 35,794,894 |
8.1.3 Identifiable assets and liabilities of the purchased on the purchasing date
Unit: Yuan
| Item | Kilikanoon Estate, Australia | |
| Fair value on the purchasing date | Book value on the purchasing date | |
| Assets: | ||
| Monetary capital | 1,359,765 | 1,359,765 |
Item
| Item | Kilikanoon Estate, Australia | |
| Fair value on the purchasing date | Book value on the purchasing date | |
| Accounts receivable | 10,366,281 | 10,366,281 |
| Advance payment | 237,174 | 237,174 |
| Other receivables | 182,667 | 182,667 |
| Inventory | 69,612,312 | 57,946,312 |
| Financial assets available for sale | 5,053 | 5,053 |
| Fixed assets | 49,029,999 | 38,696,709 |
| Intangible assets | 16,417,886 | 7,461,624 |
| Total assets | 147,211,137 | 116,255,585 |
| Liabilities: | ||
| Long-term loans | 1,282,550 | 1,282,550 |
| Accounts payable | 6,198,846 | 6,198,846 |
| Employee remuneration payable | 876,987 | 876,987 |
| Taxes and dues payable | 1,789,093 | 1,789,093 |
| Long-term loans | 43,497,119 | 43,497,119 |
| Deferred income tax liabilities | 5,902,429 | |
| Total liabilities | 59,547,024 | 53,644,595 |
| Net assets | 87,664,113 | 62,610,990 |
| Minus: Minority equity | 17,532,823 | 12,522,198 |
| Net assets acquired | 70,131,290 | 50,088,792 |
9. Equity in other entities9.1 Equity in the subsidiaries9.1.1 Constitution of enterprise group
| Name of subsidiary | Principal business location | Registration place | Business nature | Proportion of shareholding | Acquisition mode | |
| Direct | Indirect | |||||
| Xinjiang Tianzhu (a) | Shihezi City, Xinjiang Uygur Autonomous Region, China | Shihezi City, Xinjiang Uygur Autonomous Region, China | Manufacturing industry | 60% | Acquired from a business combination under non-common control | |
| Roullet Fransac | Cognac, France | Cognac, France | Trading | 100% | Acquired from a business combination under non-common control | |
| Mirefleurs | Bordeaux, France | Bordeaux, France | Trading | 100% | Acquired from a business combination under non-common control | |
| Marques del Atrio (b) | Navarra, Spain | Navarra, Spain | Sales | 75% | Acquired from a business combination under non-common control | |
| Kilikanoon Estate, Australia | Adelaide, South Australia, Australia | Adelaide, South Australia, Australia | Sales | 80% | Acquired from a business combination under non-common control | |
| Indomita Wine (c) | Santiago, Chile | Santiago, Chile | Sales | 85% | Acquired by establishment or investment | |
| Beijing Changyu Wine Marketing Co., Ltd. (―Beijing Marketing‖) | Beijing City, China | Beijing City, China | Sales | 100% | Acquired by establishment or investment | |
| Yantai Kylin Packaging Co., Ltd. (―Kylin Packaging‖) | Yantai City, Shandong Province, China | Yantai City, Shandong Province, China | Manufacturing industry | 100% | Acquired by establishment or investment | |
Name of subsidiary
| Name of subsidiary | Principal business location | Registration place | Business nature | Proportion of shareholding | Acquisition mode | |
| Direct | Indirect | |||||
| Yantai Chateau Changyu-Castel Co., Ltd. (―Chateau Changyu‖) (d) | Yantai City, Shandong Province, China | Yantai City, Shandong Province, China | Manufacturing industry | 70% | Acquired by establishment or investment | |
| Changyu (Jingyang) Pioneer Wine Co., Ltd. (―Jingyang Wine‖) | Xianyang City, Shaanxi Province, China | Xianyang City, Shaanxi Province, China | Manufacturing industry | 90% | 10% | Acquired by establishment or investment |
| Yantai Changyu Pioneer Wine Sales Co., Ltd. (―Sales Company‖) | Yantai City, Shandong Province, China | Yantai City, Shandong Province, China | Sales | 100% | Acquired by establishment or investment | |
| Langfang Development Zone Castel-Changyu Wine Co., Ltd. (―Langfang Castel‖) (e) | Langfang City, Hebei Province, China | Langfang City, Hebei Province, China | Manufacturing industry | 39% | 10% | Acquired by establishment or investment |
| Changyu (Jingyang) Pioneer Wine Sales Co., Ltd. (―Jingyang Sales‖) | Xianyang City, Shaanxi Province, China | Xianyang City, Shaanxi Province, China | Sales | 10% | 90% | Acquired by establishment or investment |
| Langfang Changyu Pioneer Wine Sales Co., Ltd. (―Langfang Sales‖) | Langfang City, Hebei Province, China | Langfang City, Hebei Province, China | Sales | 10% | 90% | Acquired by establishment or investment |
| Shanghai Changyu Wine Marketing Co., Ltd. (―Shanghai Marketing‖) | Shanghai City, China | Shanghai City, China | Sales | 30% | 70% | Acquired by establishment or investment |
| Beijing Changyu AFIP Eco-agriculture Development Co., Ltd. (―Eco-agriculture Development‖) | Miyun County, Beijing City, China | Miyun County, Beijing City, China | Sales | 100% | Acquired by establishment or investment | |
| Beijing Changyu AFIP Wine Chateau Co., Ltd. (―Beijing Chateau‖) (f) | Beijing City, China | Beijing City, China | Manufacturing industry | 90% | Acquired by establishment or investment | |
| Yantai Changyu Wine Sales Co., Ltd. ( ―Wine Sales‖) | Yantai City, Shandong Province, China | Yantai City, Shandong Province, China | Sales | 90% | 10% | Acquired by establishment or investment |
| Yantai Changyu Pioneer International Wine Co., Ltd. (―Pioneer International‖) | Yantai City, Shandong Province, China | Yantai City, Shandong Province, China | Sales | 70% | 30% | Acquired by establishment or investment |
| Hangzhou Changyu Wine Sales Co., Ltd. (―Hangzhou Changyu‖) | Hangzhou City, Zhejiang Province, China | Hangzhou City, Zhejiang Province, China | Sales | 100% | Acquired by establishment or investment | |
| Ningxia Growing | Yinchuan City, Ningxia Hui Autonomous Region, China | Yinchuan City, Ningxia Hui Autonomous Region, China | Planting industry | 100% | Acquired by establishment or investment | |
| Huanren Changyu National Wine Sales Co., Ltd. (―National Wine‖) | Benxi City, Liaoning Province, China | Benxi City, Liaoning Province, China | Sales | 100% | Acquired by establishment or investment | |
| Liaoning Changyu Icewine Valley Co., Ltd. (―Icewine Valley‖) (g) | Benxi City, Liaoning Province, China | Benxi City, Liaoning Province, China | Manufacturing industry | 51% | Acquired by establishment or investment | |
| Yantai Development Zone Changyu Trading Co., Ltd. (―Development Zone Trading‖) | Yantai City, Shandong Province, China | Yantai City, Shandong Province, China | Sales | 100% | Acquired by establishment or investment | |
| Shenzhen Changyu Wine Marketing Co., Ltd. (―Shenzhen Marketing‖) | Shenzhen City, Guangdong Province, China | Shenzhen City, Guangdong Province, China | Sales | 100% | Acquired by establishment or investment | |
| Yantai Fushan District Changyu Trading Co., Ltd. (―Fushan Trading‖) | Yantai City, Shandong Province, China | Yantai City, Shandong Province, China | Sales | 100% | Acquired by establishment or investment | |
| Beijing Changyu AFIP International Conference Center Co., Ltd. (―Conference Center‖) | Miyun County, Beijing City, China | Miyun County, Beijing City, China | Service industry | 100% | Acquired by establishment or investment | |
| Beijing Changyu AFIP Tourism and Culture Co., Ltd. (―AFIP Tourism‖) | Miyun County, Beijing City, China | Miyun County, Beijing City, China | Tourist industry | 100% | Acquired by establishment or investment | |
Name of subsidiary
| Name of subsidiary | Principal business location | Registration place | Business nature | Proportion of shareholding | Acquisition mode | |
| Direct | Indirect | |||||
| Changyu (Ningxia) Pioneer Wine Co., Ltd. (―Ningxia Wine‖) | Yinchuan City, Ningxia Hui Autonomous Region, China | Yinchuan City, Ningxia Hui Autonomous Region, China | Manufacturing industry | 100% | Acquired by establishment or investment | |
| Yantai Changyu Chateau Tinlot Co., Ltd. (―Chateau Tinlot‖) | Yantai City, Shandong Province, China | Yantai City, Shandong Province, China | Wholesale and retail | 65% | 35% | Acquired by establishment or investment |
| Changyu (Qingtongxia) Wine Sales Co., Ltd. (―Qingtongxia Sales‖) | Qingtongxia City, Ningxia Hui Autonomous Region, China | Qingtongxia City, Ningxia Hui Autonomous Region, China | Sales | 100% | Acquired by establishment or investment | |
| Shihezi Chateau | Shihezi City, Xinjiang Uygur Autonomous Region, China | Shihezi City, Xinjiang Uygur Autonomous Region, China | Manufacturing industry | 100% | Acquired by establishment or investment | |
| Chateau Changyu Moser XV Ningxia Co., Ltd. (―Ningxia Chateau‖) | Yinchuan City, Ningxia Hui Autonomous Region, China | Yinchuan City, Ningxia Hui Autonomous Region, China | Manufacturing industry | 100% | Acquired by establishment or investment | |
| Chateau Changyu Rena Shaanxi Co., Ltd. (―Chang‘an Chateau‖) | Xianyang City, Shaanxi Province, China | Xianyang City, Shaanxi Province, China | Manufacturing industry | 100% | Acquired by establishment or investment | |
| R&D Company (g) | Yantai City, Shandong Province, China | Yantai City, Shandong Province, China | Manufacturing industry | 65% | Acquired by establishment or investment | |
| Changyu (Huanren) Pioneer Wine Co., Ltd. (―Huanren Wine‖) | Benxi City, Liaoning Province, China | Benxi City, Liaoning Province, China | Wine-making project preparation | 100% | Acquired by establishment or investment | |
| Xinjiang Changyu Wine Sales Co., Ltd. (―Xinjiang Sales‖) | Shihezi City, Xinjiang Uygur Autonomous Region, China | Shihezi City, Xinjiang Uygur Autonomous Region, China | Sales | 100% | Acquired by establishment or investment | |
| Xinjiang Changyu Pioneer Wine Co., Ltd. (―Xinjiang Wine‖) | Shihezi City, Xinjiang Uygur Autonomous Region, China | Shihezi City, Xinjiang Uygur Autonomous Region, China | Manufacturing industry | 100% | Acquired by establishment or investment | |
| Ningxia Changyu Trading Co., Ltd. (―Ningxia Trading‖) | Yinchuan City, Ningxia Hui Autonomous Region, China | Yinchuan City, Ningxia Hui Autonomous Region, China | Sales | 100% | Acquired by establishment or investment | |
| Shaanxi Changyu Rena Wine Sales Co., Ltd. (―Shaanxi Sales‖) | Xianyang City, Shaanxi Province, China | Xianyang City, Shaanxi Province, China | Sales | 100% | Acquired by establishment or investment | |
| Penglai Changyu Wine Sales Co., Ltd. (―Penglai Wine‖) | Penglai City, Shandong Province, China | Penglai City, Shandong Province, China | Sales | 100% | Acquired by establishment or investment | |
| Laizhou Changyu Wine Sales Co., Ltd. (―Laizhou Sales‖) | Laizhou City, Shandong Province, China | Laizhou City, Shandong Province, China | Sales | 100% | Acquired by establishment or investment | |
| Francs Champs Participations SAS | Cognac, France | Cognac, France | Investment trade | 100% | Acquired by establishment or investment | |
| Lanzhou Changyu Wine Marketing Co., Ltd. (―Lanzhou Marketing‖) | Lanzhou City, Gansu Province, China | Lanzhou City, Gansu Province, China | Sales | 100% | Acquired by establishment or investment | |
| Beijing Changyu Trading Co., Ltd. (―Beijing Trading‖) | Beijing City, China | Beijing City, China | Sales | 100% | Acquired by establishment or investment | |
| Tianjin Changyu Pioneer Wine Sales Co., Ltd. (―Tianjin Pioneer‖) | Tianjin City, China | Tianjin City, China | Sales | 100% | Acquired by establishment or investment | |
| Fuzhou Changyu Pioneer Wine Co., Ltd. (―Fuzhou Pioneer‖) | Fuzhou City, Fujian Province, China | Fuzhou City, Fujian Province, China | Sales | 100% | Acquired by establishment or investment | |
| Nanjing Changyu Pioneer Wine Co., Ltd. (―Nanjing Pioneer‖) | Nanjing City, Jiangsu Province, China | Nanjing City, Jiangsu Province, China | Sales | 100% | Acquired by establishment or investment | |
| Xianyang Changyu Pioneer Wine Sales Co., Ltd. (―Xianyang Pioneer‖) | Xianyang City, Shaanxi Province, China | Xianyang City, Shaanxi Province, China | Sales | 100% | Acquired by establishment or investment | |
| Shenyang Changyu Pioneer Wine Co., Ltd. (―Shenyang | Shenyang City, Liaoning Province, China | Shenyang City, Liaoning Province, China | Sales | 100% | Acquired by establishment or | |
Name of subsidiary
| Name of subsidiary | Principal business location | Registration place | Business nature | Proportion of shareholding | Acquisition mode | |
| Direct | Indirect | |||||
| Pioneer‖) | investment | |||||
| Jinan Changyu Pioneer Wine Co., Ltd. (―Jinan Pioneer‖) | Jinan City, Shandong Province, China | Jinan City, Shandong Province, China | Sales | 100% | Acquired by establishment or investment | |
| Shanghai Changyu Pioneer Wine Co., Ltd. (―Shanghai Pioneer‖) | Shanghai City, China | Shanghai City, China | Sales | 100% | Acquired by establishment or investment | |
| Fuzhou Changyu Pioneer Wine Co., Ltd. (―Fuzhou Pioneer‖) | Fuzhou City, Jiangxi Province, China | Fuzhou City, Jiangxi Province, China | Sales | 100% | Acquired by establishment or investment | |
| Shijiazhuang Changyu Pioneer Wine Sales Co., Ltd. (―Shijiazhuang Pioneer‖) | Shijiazhuang City, Hebei Province, China | Shijiazhuang City, Hebei Province, China | Sales | 100% | Acquired by establishment or investment | |
| Hangzhou Yuzefeng Trading Co., Ltd. (―Hangzhou Yuzefeng‖) | Hangzhou City, Zhejiang Province, China | Hangzhou City, Zhejiang Province, China | Sales | 100% | Acquired by establishment or investment | |
| Jilin Changyu Pioneer Wine Co., Ltd. (―Jilin Pioneer‖) | Changchun City, Jilin Province, China | Changchun City, Jilin Province, China | Sales | 100% | Acquired by establishment or investment | |
| Beijing Changyu Pioneer Wine Sales Co., Ltd. (―Beijing Pioneer‖) | Beijing City, China | Beijing City, China | Sales | 100% | Acquired by establishment or investment | |
| Harbin Changyu Pioneer Wine Sales Co., Ltd. (―Harbin Pioneer‖) | Harbin City, Heilongjiang Province, China | Harbin City, Heilongjiang Province, China | Sales | 100% | Acquired by establishment or investment | |
| Hunan Changyu Pioneer Wine Co., Ltd. (―Hunan Pioneer‖) | Changsha City, Hunan Province, China | Changsha City, Hunan Province, China | Sales | 100% | Acquired by establishment or investment | |
| Yinchuan Changyu Pioneer Wine Co., Ltd. (―Yinchuan Pioneer‖) | Yinchuan City, Ningxia Hui Autonomous Region, China | Yinchuan City, Ningxia Hui Autonomous Region, China | Sales | 100% | Acquired by establishment or investment | |
| Kunming Changyu Pioneer Wine Co., Ltd. (―Kunming Pioneer‖) | Kunming City, Yunnan Province, China | Kunming City, Yunnan Province, China | Sales | 100% | Acquired by establishment or investment | |
| Chongqing Changyu Pioneer Wine Sales Co., Ltd. (―Chongqing Pioneer‖) | Chongqing City, China | Chongqing City, China | Sales | 100% | Acquired by establishment or investment | |
| Zhengzhou Changyu Pioneer Wine Co., Ltd. (―Zhengzhou Pioneer‖) | Zhengzhou City, Henan Province, China | Zhengzhou City, Henan Province, China | Sales | 100% | Acquired by establishment or investment | |
| Wuhan Changyu Pioneer Wine Co., Ltd. (―Wuhan Pioneer‖) | Wuhan City, Hubei Province, China | Wuhan City, Hubei Province, China | Sales | 100% | Acquired by establishment or investment | |
| Taiyuan Changyu Pioneer Wine Co., Ltd. (―Taiyuan Pioneer‖) | Taiyuan City, Shanxi Province, China | Taiyuan City, Shanxi Province, China | Sales | 100% | Acquired by establishment or investment | |
| Hohhot Changyu Pioneer Wine Co., Ltd. (―Hohhot Pioneer‖) | Hohhot City, Inner Mongolia Autonomous Region , China | Hohhot City, Inner Mongolia Autonomous Region , China | Sales | 100% | Acquired by establishment or investment | |
| Chengdu Changyu Pioneer Wine Co., Ltd. (―Chengdu Pioneer‖) | Chengdu City, Sichuan Province, China | Chengdu City, Sichuan Province, China | Sales | 100% | Acquired by establishment or investment | |
| Nanning Changyu Pioneer Wine Co., Ltd. (―Nanning Pioneer‖) | Nanning City, Guangxi Zhuang Autonomous Region, China | Nanning City, Guangxi Zhuang Autonomous Region, China | Sales | 100% | Acquired by establishment or investment | |
| Lanzhou Changyu Pioneer Wine Co., Ltd. (―Lanzhou Pioneer‖) | Lanzhou City, Gansu Province, China | Lanzhou City, Gansu Province, China | Sales | 100% | Acquired by establishment or investment | |
| Yantai Roullet-Fransac Imported Wine Sales Co., Ltd. (―Yantai Roullet-Fransac‖) | Yantai City, Shandong Province, China | Yantai City, Shandong Province, China | Sales | 100% | Acquired by establishment or investment | |
| Hefei Changyu Pioneer Wine Co., Ltd. (―Hefei | Hefei City, Anhui Province, China | Hefei City, Anhui Province, China | Sales | 100% | Acquired by establishment or | |
Name of subsidiary
| Name of subsidiary | Principal business location | Registration place | Business nature | Proportion of shareholding | Acquisition mode | |
| Direct | Indirect | |||||
| Pioneer‖) | investment | |||||
| Urumchi Changyu Pioneer Wine Co., Ltd. (―Urumchi Pioneer‖) | Urumchi City, Xinjiang Uygur Autonomous Region, China | Urumchi City, Xinjiang Uygur Autonomous Region, China | Sales | 100% | Acquired by establishment or investment | |
| Guizhou Changyu Pioneer Wine Co., Ltd. (―Guizhou Pioneer‖) | Guiyang City, Guizhou Province, China | Guiyang City, Guizhou Province, China | Sales | 100% | Acquired by establishment or investment | |
| Guangzhou Changyu Pioneer Wine Co., Ltd. (―Guangzhou Pioneer‖) | Guangzhou City, Guangdong Province, China | Guangzhou City, Guangdong Province, China | Sales | 100% | Acquired by establishment or investment | |
| Wine Sales Co., Ltd. | Yantai City, Shandong Province, China | Yantai City, Shandong Province, China | Sales | 100% | Acquired by establishment or investment | |
Explanation for difference between the proportion of shareholding and proportion of voting powerin the subsidiaries:
(a) Xinjiang Tianzhu is a subsidiary of the Company obtained by merger and acquisition,whose 60% of the shares are held by the Company. The Company exercises full control overthe operation, investment and financing policies of Xinjiang Tianzhu by contract arrangement.This contract arrangement was expired on August 6, 2017. After the expiration, the minorityshareholders of Xinjiang Tianzhu shall enjoy/bear all rights/duties of shareholders specified inthe Articles of Association.
(b) On September 12, 2016, Atrio Group completed the internal reorganization, and Marquesdel Atrio absorbed and merged Atrio Group and its subsidiaries Enotec S.L., Hostaler I S.L.,and Faustino Rivero Ulecia S.L. After the reorganization was completed, Marques del Atriobecomes the only existing company.
(c) Indomita Wine is a Sino-foreign joint venture jointly established by the Company andInversiones Beth-Wines Limitada, in which the Company invested USD 40,110,000(equivalent to RMB 274,248,114 Yuan), holding 85% of the stock rights, and InversionesBeth-Wines Limitada invested USD 7,080,000 (equivalent to RMB 48,396,726 Yuan),holding 15% of the stock rights.
(d) Changyu Chateau is a Sino-foreign joint venture established by the Company and aforeign investor, whose 70% of the shares are held by the Company. The Company exercisesfull control over the operation, investment and financing policies of Changyu Chateau bycontract arrangement. The contract arrangement will expire on December 31, 2022.
(e) Langfang Castel is a Sino-foreign joint venture established by the Company and a foreigninvestor, whose 49% of the shares are held by the Company and its subsidiaries. TheCompany exercises full control over the operation, investment and financing policies ofLangfang Castel by contract arrangement. The contract arrangement will expire on December31, 2022.
(f) Beijing Chateau is a limited liability company jointly established by the Company and
Yantai De‘an and Beijing Qinglang. In 2017, the Company made capital increase of RMB
502,910,000 Yuan in Beijing Chateau, and Yantai De‘an and Beijing Qinglang jointly made
capital increase of RMB 29,840,000 Yuan. On December 22, 2017, Beijing Chateaucompleted business registration alteration. After the capital increase, the Company holds 90%of the stock rights. The Company exercises full control over the operation, investment andfinancing policies of Beijing Chateau by contract arrangement. The contract arrangement willexpire on September 2, 2019.
(g) Icewine Valley is a Sino-foreign joint venture established by the Company and a foreigninvestor, whose 51% of the shares are held by the Company. The Company exercises fullcontrol over the operation, investment and financing policies of Icewine Valley by contractarrangement. The contract arrangement will expire on December 31, 2021.
(h) The R&D Company is a joint venture established by the Company and AgriculturalDevelopment Fund, whose 65% of the shares were held by the Company on June 30, 2018.As stated in Note 7.30, Agricultural Development Fund invested RMB 305,000,000 Yuan inthe R&D Company in 2016, accounting for 37.9% of the registered capital. According to theinvestment agreement, it is agreed that Agricultural Development Fund will take back theinvestment fund in ten years and obtain fixed income according to year, which is 1.2% of theremaining principal. Except for the above fixed income, the Agricultural Development Fundshall not enjoy other profits of the R&D Company or bear the losses of the R&D Company.Accordingly, the investment of the Agricultural Development Fund in the R&D Company isequity investment nominally, which is debt investment in deed. This Company shall includethe investment of the Agricultural Development Fund in long-term accounts payablemeasured by amortized cost. The Company exercises full control over the operation,investment and financing policies of the R&D Company by contract arrangement. Thecontract arrangement will expire on May 22, 2026.
9.1.2 Important non-wholly-owned subsidiaries
Unit: Yuan
Name of subsidiary
| Name of subsidiary | Shareholding proportion of minority shareholders | Profit/loss attributable to minority shareholders in this period | Dividend declared to be distributed to minority shareholders in this period | Balance of minority shareholder‘s interest at the end of period |
| Xinjiang Tianzhu | 40% | -73,829 | 53,299,623 | |
| Marques del Atrio | 25% | 303,503 | 746,021 | 30,648,536 |
| Changyu Chateau | 30% | 12,365,016 | ||
| Langfang Castel | 51% | 22,702,522 | ||
| Beijing Chateau | 10% | 65,133,868 | ||
| Icewine Valley | 49% | 33,319,062 | ||
| Indomita Wine | 15% | -42,279 | 52,446,446 | |
| Kilikanoon Estate, Australia | 20% | -23,063 | 16,776,846 |
Explanation for difference between the proportion of shareholding and proportion of votingpower of the minority shareholders in the subsidiaries: See details in Note 9.1.1.
9.1.3 Main financial information of important non-wholly-owned subsidiaries
Unit: Yuan
Name ofsubsidiary
| Name of subsidiary | Ending balance | |||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Xinjiang Tianzhu | 31,621,493 | 68,869,503 | 100,490,996 | 493,969 | 5,336,114 | 5,830,082 |
| Changyu Chateau | 140,023,527 | 114,974,477 | 254,998,005 | 171,551,853 | 171,551,853 | |
| Langfang Castel | 18,220,999 | 17,452,408 | 35,673,406 | 4,063,516 | 4,063,516 | |
| Beijing Chateau | 215,371,778 | 475,159,760 | 690,531,538 | 50,320,391 | 50,320,391 | |
| Icewine Valley | 59,047,298 | 25,091,478 | 84,138,776 | 28,890,336 | 100,000 | 28,990,336 |
| Marques del Atrio | 348,900,749 | 107,672,031 | 456,572,779 | 246,746,293 | 86,970,780 | 333,717,072 |
| Indomita Wine | 183,652,569 | 299,672,376 | 483,324,945 | 127,449,902 | 6,232,065 | 133,681,967 |
| Kilikanoon Estate, Australia | 85,037,994 | 63,434,206 | 148,472,200 | 57,335,399 | 7,252,572 | 64,587,971 |
Unit: Yuan
| Name of subsidiary | Beginning balance | |||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Xinjiang Tianzhu | 30,264,441 | 71,323,940 | 101,588,381 | 809,080 | 5,336,114 | 6,145,194 |
| Changyu Chateau | 140,038,021 | 115,435,985 | 255,474,006 | 175,061,601 | 175,061,601 | |
| Langfang Castel | 22,728,536 | 17,973,719 | 40,702,255 | 6,133,909 | 6,133,909 | |
| Beijing Chateau | 214,079,274 | 481,668,050 | 695,747,324 | 73,963,043 | 73,963,043 | |
| Icewine Valley | 38,657,358 | 25,484,359 | 64,141,717 | 10,871,695 | 100,000 | 10,971,695 |
| Marques del Atrio | 398,835,959 | 116,299,504 | 515,135,463 | 299,030,002 | 89,336,338 | 388,366,340 |
| Indomita Wine | 175,669,256 | 305,664,706 | 481,333,962 | 122,023,764 | 5,206,406 | 127,230,170 |
Unit: Yuan
| Name of subsidiary | Amount incurred in this period | Amount incurred in prior period | ||||||
| Operating income | Net profit | Total comprehensive income | Operating cash flow | Operating income | Net profit | Total comprehensive income | Operating cash flow | |
| Xinjiang | 18,803 | -184,572 | -184,572 | 10,284,801 | 115,904,168 | 22,453,715 | 22,453,715 | -7,275,404 |
Tianzhu
| Tianzhu | ||||||||
| Changyu Chateau | 43,226,910 | 2,861,474 | 2,861,474 | 2,419,427 | 20,668,538 | -106,018 | -106,018 | 12,978,276 |
| Langfang Castel | 5,038,281 | -1,952,954 | -1,952,954 | -4,435,022 | 23,732,778 | 161,088 | 161,088 | -137,422 |
| Beijing Chateau | 78,502,666 | 15,243,700 | 15,243,700 | 12,282,145 | 75,491,933 | 12,511,172 | 12,511,172 | -37,040,335 |
| Icewine Valley | 27,305,133 | 905,396 | 905,396 | 2,018,740 | 16,724,881 | -2,063,324 | -2,063,324 | -1,416,775 |
| Marques del Atrio | 148,197,893 | 1,214,012 | -929,332 | -21,783,821 | 131,223,890 | -233,187 | 3,996,659 | -31,616,566 |
| Indomita Wine | 93,719,341 | -281,859 | -4,460,814 | -7,723,684 | ||||
| Kilikanoon Estate, Australia | 25,904,401 | -115,317 | -3,779,883 | -1,469,903 |
10. Risks related to financial instrumentsThe main financial instruments of the Group include monetary capital, bills receivable, accounts
receivable, interest receivable, other receivables, available-for-sale financial assets, short-term loans,accounts payable, other payables, interest payable, long-term accounts payable and long-term loans.Please refer to Note 7 of each financial instrument for the details. The risks related to these financialinstruments and risk management policies adopted by the Group to reduce these risks are shown asfollows. The management of the Group manages and monitors these risk exposures to ensure that theabove-mentioned risks are controlled within a defined scope.The Group adopts sensitivity analysis techniques to analyze the possible influence of possible
reasonable changes of risk variables on the current profit and loss and shareholders‘ equity. Since any
risk variable merely changes independently and the final influence of relevance between variables onthe change of certain risk variable will exert a great effect, the following content is carried out underthe hypothesis that each variable changes independently.The risk management objective of the Group is to achieve proper balance between risks and benefits,to minimize the negative influence of the risks on the business performance of the Group and to
maximize the shareholders‘ benefit. Based on this risk management objective, the basic risk
management strategy of the Group is to determine and analyze various risks faced by the Group, to setup proper risk tolerance bottom line and to carry out risk management, and to supervise various riskstimely and reliably to control the risks within a defined scope.
10.1 Risk management objective and policy10.1.1 Market risk
① Foreign exchange risk
Foreign exchange risk refers to the risk that causes loss due to exchange rate fluctuation. The foreignexchange risk borne by the Group is mainly relevant to EUR and USD. Except that the overseassubsidiaries of the Group purchase and sell in EUR, Chilean peso and Australian dollar, which borrowin USD, and domestic subsidiaries deposit in EUR and USD, other main business activities of theGroup are priced and settled in RMB. As at June 30, 2018, except that the assets and liabilitiesmentioned in the table below were the balance of deposits or loans shown in foreign currencies, otherassets and liabilities of the entities of the Group were settled in their respective functional currencies.
Unit: Yuan
Item
| Item | Ending balance | Beginning balance |
| Monetary capital (EUR) | 383,929 | 1,190,459 |
| Monetary capital (USD) | 40,818,904 | 34,843,968 |
| Short-term loans (USD) | 59,549,400 | 58,807,800 |
The foreign exchange risk caused by the assets and liabilities of such foreign currency balance mayexert an influence on the business performance of the Group. The Group pays close attention to theinfluence of exchange rate fluctuation on the foreign exchange risk of the Group. The Group has nottaken any measures to avoid the foreign exchange risk at present.
Sensitivity analysis of foreign exchange risk
With the other variables unchanged, the pre-tax influence of possible reasonable exchange rate
fluctuation on current profit and loss and shareholders‘ equity is shown as follows:
Domestic entities:
Unit: Yuan
| Item | Exchange rate fluctuation | This period | |
| Influence on profit in this period | Influence on shareholders‘ equity | ||
| EUR | 5% appreciation against RMB | 49 | 49 |
| EUR | 5% depreciation against RMB | -49 | -49 |
| USD | 5% appreciation against RMB | 1,968,271 | 1,968,271 |
| USD | 5% depreciation against RMB | -1,968,271 | -1,968,271 |
Overseas entities:
Unit: Yuan
| Item | Exchange rate fluctuation | This period | |
| Influence on profit in this period | Influence on shareholders‘ equity | ||
| USD | 5% appreciation against EUR | 22,027 | 22,027 |
| USD | 5% depreciation against EUR | -22,027 | -22,027 |
| USD | 10% appreciation against CLP | -5,830,116 | -5,830,116 |
USD
| USD | 10% depreciation against CLP | 5,830,116 | 5,830,116 |
| EUR | 5% appreciation against CLP | 19,205 | 19,205 |
| EUR | 5% depreciation against CLP | -19,205 | -19,205 |
Note: As at June 30, 2018, the management of the Group predicted that the EUR and USD exchangerate against RMB, EUR exchange rate against USD, and EUR exchange rate against CLP changed by5%; and USD exchange rate against CLP changed by 10%.
② Interest rate risk – risk of change in cash flow
The risk of change in cash flow of financial instruments caused by interest rate change of the Group ismainly relevant to the monetary capital and bank loan at floating interest rate. The policy of the Groupis to maintain the floating interest rate of these loans to eliminate the risk of change in fair value of theinterest rate.
Sensitivity analysis of interest rate riskSensitivity analysis of interest rate risk is based on the hypothesis that the change in market interestrate influences the interest income or expense of financial instruments at variable rate.
The management of the Group thinks that the interest rate risk of deposit in bank borne by the Groupis not significant, and therefore the sensitivity analysis of interest rate of deposit in bank is notdisclosed here.
On the basis of the above-mentioned hypothesis, with the other variables unchanged, the pre-tax
influence of possible reasonable exchange rate fluctuation on current profit and loss and shareholders‘
equity is as follows:
Unit: Yuan
| Item | Interest rate change | This period | |
| Influence on profit of this period | Influence on shareholders‘ equity | ||
| Bank loan | Increase by 50 BP | -1,751,529 | -1,751,529 |
| Bank loan | Decrease by 50 BP | 1,751,529 | 1,751,529 |
Note: As at June 30, 2018, the management of the Group predicted that the bank floating rate changedby 50 basis points
10.1.2 Credit riskAs at June 30, 2018, the largest credit risk exposure possibly causing the financial loss of the
Group was mainly caused by the loss generated by the financial assets of the Group due tofailure of another party of the contract in fulfilling obligations.
To lower the credit risk, the Group only trades with the recognized and reputable third party.In accordance with the policy of the Group, credit check shall be carried out for all customerswho transact by means of credit. In addition, the Group conducts continuous monitoring onthe balance of accounts receivable to ensure that the Group will not face major risk of baddebts. For transactions not settled with recording currency of relevant business units, unlessthe credit control department of the Group specially approves, the Group will not providecredit trade terms. In addition, the Group audits the collection of each single significantaccount receivable on each date of balance sheet to ensure that sufficient bad-debt provision isaccrued for accounts unable to be collected. Therefore, the management of the Group thinksthe credit risk borne by the Group is greatly reduced.
Since the Group only trades with the recognized and reputable third party, no collateral isrequired. The credit risk is managed centrally according to the customer/counter-party,geographic area and industry. As at June 30, 2018, 16.4% of accounts receivable of the Groupcame from top five borrowers in accounts receivable of the Group (December 31, 2017:
20.7%). The Group holds no collateral or other credit enhancement for the balance ofaccounts receivable.
10.1.3 Liquidity riskWhen managing the liquidity risk, the Group reserves and monitors the cash and cash
equivalents the management considers sufficient to satisfy the operation need of the Groupand reduce the influence of fluctuation in cash flow. The management of the Group monitorsthe use of bank loans and ensures to abide by the loan agreement.
10.1.4 Disclosure of fair value – fair value of financial assets and liabilities not measured
by fair value
Item
| Item | Book value | Fair value | |||
| First-level fair value | Second-level fair value | Third-level fair value | Total | ||
| Long-term accounts payable measured by amortized cost | 269,000,000 | - | 229,053,269 | - | 229,053,269 |
The management of the Group thinks that, as at June 30, 2018, except for the long-term
accounts payable stated above, the book value of other financial assets and liabilitiesmeasured by amortized cost was close to the fair value thereof.
11. Related parties and related transactions11.1 Particulars of the parent company of the Company
Name of parent
company
| Name of parent company | Registration place | Business nature | Registered capital | Proportion of shareholding of the parent company in the Company | Proportion of voting powers of the parent company in the Company |
| Changyu Group Company | Yantai City | Manufacturing industry | 50,000,000 | 50.40% | 50.40% |
From January to June 2018, there was no fluctuation in the registered capital of the parentcompany and its share in equity interest and voting right.
11.2 Particulars of the subsidiaries of the CompanySee particulars of the subsidiaries of the Company in Note 9.
11.3 Particulars of other related parties
| Name of other related parties | Relationship between other related parties and the Company |
| Yantai Changyu Wine Culture Museum Co., Ltd. (―Wine Culture Museum‖) | A company controlled by the same parent company |
| Yantai Changyu Window of International Wine City Co. Ltd. (―Window of Wine City‖) | A company controlled by the same parent company |
| Yantai God Horse Packing Co., Ltd. (―God Horse Packing‖) | A company controlled by the same parent company |
| Yantai Zhongya Medical Health Wine Co., Ltd. (―Zhongya Medical‖) | A company controlled by the same parent company |
| Yantai Changyu Cultural Tourism Development Co., Ltd. (―Changyu Cultural Tourism‖) | A company controlled by the same parent company |
11.4 Related transactions11.4.1 Related transactions of purchasing and selling goods and providing and receivingservicesList of purchasing goods/receiving services
Unit: Yuan
| Related parties | Related transactions | Amount incurred in this period | Amount incurred in prior period |
Related parties
| Related parties | Related transactions | Amount incurred in this period | Amount incurred in prior period |
| God Horse Packing | Purchasing goods | 95,990,354 | 64,896,342 |
| Zhongya Medical | Purchasing goods | 6,037,893 | 10,700,788 |
| Wine Culture Museum | Purchasing goods | 9,475,159 | 6,319,776 |
| Window of Wine City | Purchasing goods | 2,857,130 | 231,879 |
List of selling goods/providing services
Unit: Yuan
| Related parties | Related transactions | Amount incurred in this period | Amount incurred in prior period |
| Wine Culture Museum | Selling goods | 13,889,017 | 4,252,962 |
| Window of Wine City | Selling goods | 8,773,612 | 5,642,914 |
| Zhongya Medical | Selling goods | 2,203,629 | 1,956,658 |
| God Horse Packing | Selling goods | 15,742 | 829,977 |
| Changyu Cultural Tourism | Selling goods | 220,759 |
The price of transactions between the Group and the related parties are based on thenegotiated price.11.4.2 Related trusteeship/contracting and mandatory administration/outsourcing
Nil11.4.3 Leasing with related partiesThe Company as a lessor:
Unit: Yuan
| Name of the lessee | Type of leased assets | Rental income recognized in this period | Rental income recognized in prior period |
| God Horse Packing | Office building and plant | 813,440 | |
| Window of Wine City | Office building | 535,000 | |
| Zhongya Medical | Office building | 285,000 |
Pursuant to a lease contract dated July 1, 2017 signed between the Company and God HorsePacking, starting from July 1, 2017, the Company rents properties to God Horse Packing foroperation purposes with annual rental income of RMB 1,626,880 Yuan, and the expired dateof the contract is June 30, 2022. From January to June 2018, the rental income recognized bythe Company amounted to RMB 813,440 Yuan.Pursuant to a lease contract dated January 1, 2018 signed between the Company and Windowof Wine City, starting from January 1, 2018, the Company rents houses to Window of Wine
City for operation purposes with annual rental income of RMB 1,070,000 Yuan, and theexpired date of the contract is December 31, 2018. From January to June 2018, the rentalincome recognized by the Company amounted to RMB 535,000 Yuan.Pursuant to a lease contract dated January 1, 2018 signed between the Company and ZhongyaMedical, starting from January 1, 2018, the Company rents houses to Zhongya Medical foroperation purposes with annual rental income of RMB 570,000 Yuan, and the expired date ofthe contract is December 31, 2018. From January to June 2018, the rental income recognizedby the Company amounted to RMB 285,000 Yuan.
The Company as a lessee:
Unit: Yuan
Name of the lessor
| Name of the lessor | Type of leased assets | Rent recognized in this period | Rent recognized in prior period |
| Changyu Group Company | Office building and plant | 3,775,362 | 3,775,362 |
Pursuant to a lease contract dated January 1, 2016 signed between the Company and ChangyuGroup Company, starting from January 1, 2016, the Company rents properties from ChangyuGroup Company for operation purposes at a basic annual rent of RMB 1,692,724 Yuan, andthe expired date of the contract is December 31, 2020. From January to June 2018, the rentalexpenses recognized by the Company to Changyu Group Company amounted to RMB846,362 Yuan.Pursuant to a lease contract dated January 1, 2017 signed between the Company and ChangyuGroup Company, starting from January 1, 2017, the Company rents properties from ChangyuGroup Company for operation purposes at a basic annual rent of RMB 1,464,500 Yuan, andthe expired date of the contract is December 31, 2021. From January to June 2018, the rentalexpenses recognized by the Company to Changyu Group Company amounted to RMB732,250 Yuan.Pursuant to a lease contract dated January 1, 2017 signed between the Company and ChangyuGroup Company, starting from January 1, 2017, the Company rents properties from ChangyuGroup Company for operation purposes at a basic annual rent of RMB 4,393,500 Yuan, andthe expired date of the contract is December 31, 2021. From January to June 2017, the rentalexpenses recognized by the Company to Changyu Group Company amounted to RMB2,196,750 Yuan.11.4.4 Guarantee with related parties
Nil
11.4.5 Inter-bank borrowing and lending of related parties
Nil11.4.6 Asset transfer and debt recombination of related parties
Nil11.4.7 Other related transactions
Unit: Yuan
Item
| Item | Note | Amount incurred in this period | Amount incurred in prior period |
| Trademark use fee | (a) | 43,363,867 | 44,428,033 |
| Patent fee | (b) | 25,000 | 25,000 |
The price of transactions between the Group and the related parties is based on the negotiatedprice.
(a) Trademark royalty contractPursuant to a trademark royalty contract dated May 18, 1997 signed between the Companyand Changyu Group Company, starting from September 18, 1997, the Company may usecertain trademark of Changyu Group Company, which has been registered with the PRC
Trademark Office. An annual royalty at 2% of the Company‘s annual specific sales is payable
to Changyu Group Company by the Company. The contract is effective until the expiry of theregistration of the trademark. From January to June 2018, the trademark royalty paid torelated parties by the Company accounted for 100% of the trademark royalty in the Group.
(b) Patent implementation license contractPursuant to a patent implementation license contract dated May 18, 1997 signed between theCompany and Changyu Group Company, starting from September 18, 1997, the Companymay use the patented technologies of Changyu Group Company. The annual patent royaltypayable by the Company to Changyu Group Company was RMB 50,000 Yuan. The contractwas expired on December 20, 2005. On August 20, 2016, the Company renewed the patentimplementation license contract for 10 year, which should pay the patent royalty of RMB50,000 Yuan to Changyu Group Company annually as before. From January to June 2018, thepatent royalty payable by the Company to Changyu Group Company amounted to RMB25,000 Yuan.From January to June 2018, the patent fees paid to related parties by the Group accounted for100% of the patent fees in the Group.
11.5 Accounts receivable and payable of the related parties11.5.1 Accounts receivable
Unit: Yuan
Item
| Item | Related parties | Ending balance | Beginning balance | ||
| Book balance | Bad debt provision | Book balance | Bad debt provision | ||
| Accounts receivable | Zhongya Medical | 8,912,812 | 8,134,150 | ||
| Accounts receivable | God Horse Packing | 1,668,058 | 1,342,348 | ||
| Accounts receivable | Window of Wine City | 2,333,822 | 3,196,095 | ||
| Accounts receivable | Wine Culture Museum | 57,360 | 34,280 | ||
| Accounts receivable | Changyu Cultural Tourism | 256,080 | |||
11.5.2 Accounts payable
Unit: Yuan
| Item | Related parties | Ending book balance | Beginning book balance |
| Accounts payable | God Horse Packing | 36,775,249 | 52,403,056 |
| Accounts payable | Zhongya Medical | 5,305,577 | 2,051,991 |
| Accounts payable | Wine Culture Museum | 2,945,967 | 2,040,860 |
| Accounts payable | Window of Wine City | 889,442 | 1,485,766 |
| Other accounts payable | Changyu Group Company | 49,766,061 | 77,208,929 |
12. Commitment and contingency12.1 Significant commitment
Unit: Yuan
| Item | Ending balance | Beginning balance |
| Long-term asset commitments | 810,228,900 | 1,246,506,000 |
12.2 Contingency
By the balance sheet date, the Group didn‘t have any undisclosed contingency to be disclosed.
13. Matters after balance sheet13.1 Important non-adjusting events
Nil13.2 Profit distribution
Unit: Yuan
| Profits or dividends to be distributed | 342,732,000 |
| Allocated profits or dividends approved to declare upon discussion | 342,732,000 |
According to the decision of the Shareholders‘ Meeting dated May 24, 2018, based on the issued
capital stock of 685,464,000 shares in 2017, the Company allocated RMB 5 Yuan in cash (includingtax) for every 10 shares to all shareholders with the total cash dividends of RMB 342,732,000 Yuan.Such cash dividends were distributed on July 9, 2018 and July 11, 2018 respectively.
14. Other important matters
Nil15. Notes on major items in financial statements of the parent company15.1 Accounts receivable15.1.1 Accounts receivable disclosed by type
Unit: Yuan
Type
| Type | Ending balance | Beginning balance | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Proportion | Amount | Accrued proportion | Amount | Proportion | Amount | Accrued proportion | |||
| Accounts receivable of significant single amount and single accrued bad debt provision | 12,408,787 | 100% | 12,408,787 | 7,805,333 | 100% | 7,805,333 | ||||
| Accounts receivable accrued bad debt provision by credit risk features | ||||||||||
| Accounts receivable of insignificant single amount and single accrued bad debt provision | ||||||||||
| Total | 12,408,787 | 100% | 12,408,787 | 7,805,333 | 100% | 7,805,333 | ||||
15.1.2 Bad debt provision accrued, received or transferred back in this periodThe bad debt provision accrued in this period was RMB 0 Yuan; and that received ortransferred back in this period was RMB 0 Yuan.15.1.3 Accounts receivable actually canceled after verification in this period
Nil
15.1.4 Accounts receivable collected by the borrower of top 5 units ranked by the endingbalance
Unit: Yuan
Unit
| Unit | Relationship with the Company | Amount | Age | Percentage in total accounts receivable (%) |
| Yantai Zhongya Medical Health Wine Co., Ltd. | Affiliated party | 7,847,857 | Within 1 year | 63.2% |
| Shandong Yantai Winemaking Co., Ltd. Liquan Wine Branch | Third party | 2,934,050 | Within 1 year | 23.6% |
| Yantai God Horse Packing Co., Ltd. | Affiliated party | 1,626,880 | Within 1 year | 13.2% |
| Total | 12,408,787 | 100.0% |
15.1.5 Accounts receivable derecognized due to transfer of financial assets
Nil15.1.6 Accounts receivable transferred and included in assets and liabilities
Nil15.2 Other accounts receivable
15.2.1 Other accounts receivable disclosed by type
Unit: Yuan
| Type | Ending balance | Beginning balance | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Proportion | Amount | Accrued proportion | Amount | Proportion | Amount | Accrued proportion | |||
| Other accounts receivable of significant single amount and single accrued bad debt provision | 509,269,034 | 100% | 509,269,034 | 592,274,075 | 100% | 592,274,075 | ||||
| Other accounts receivable accrued bad debt provision by credit risk features | ||||||||||
Other accountsreceivable ofinsignificantsingle amountand singleaccrued baddebt provision
| Other accounts receivable of insignificant single amount and single accrued bad debt provision | ||||||||||
| Total | 509,269,034 | 100% | 509,269,034 | 592,274,075 | 100% | 592,274,075 |
15.2.2 Bad debt provision accrued, received or transferred back in this periodThe bad debt provision accrued in this period was RMB 0 Yuan; and that received ortransferred back in this period was RMB 0 Yuan.15.2.3 Other accounts receivable classified by nature
Unit: Yuan
| Nature of fund | Ending book balance | Beginning book balance |
| Accounts receivable of subsidiaries | 507,332,524 | 589,897,407 |
| Deposit and guaranty money receivable | 2,500 | |
| Other | 1,936,510 | 2,374,168 |
| Total | 509,269,034 | 592,274,075 |
15.2.4 Other accounts receivable collected by the borrower of top 5 units ranked by theending balance
Unit: Yuan
| Unit | Nature of fund | Ending balance | Age | Percentage in the total ending balance of other accounts receivable | Ending balance of bad debt provision |
| Sales Company | Internal incomings and outgoings | 216,011,410 | Within 1 year | 42.4% | |
| R&D Company | Internal incomings and outgoings | 205,461,252 | Within 1 year | 40.3% | |
| Chateau Tinlot | Internal incomings and outgoings | 20,500,000 | Within 1 year | 4.0% | |
| Penglai Sales | Internal incomings and outgoings | 13,766,522 | Within 1 year | 2.7% | |
| Laizhou Wine | Internal incomings and outgoings | 13,244,757 | Within 1 year | 2.6% | |
| Total | -- | 468,983,942 | -- | 92.0% |
15.2.5 Accounts receivable related to governmental subsidy
Nil
15.2.6 Other accounts receivable derecognized due to transfer of financial assets
Nil15.2.7 Other accounts receivable transferred and included in assets and liabilities
Nil15.3 Long-term equity investment
Unit: Yuan
Item
| Item | Ending balance | Beginning balance | ||||
| Book balance | Impairment reserve | Book value | Book balance | Impairment reserve | Book value | |
| Investment in subsidiaries | 4,617,128,388 | 4,617,128,388 | 4,511,202,204 | 4,511,202,204 | ||
| Investment in associated enterprises and joint ventures | ||||||
| Total | 4,617,128,388 | 4,617,128,388 | 4,511,202,204 | 4,511,202,204 | ||
15.3.1 Investment in subsidiaries
| Invested unit | Beginning balance | Increase in this period | Decrease in this period | Ending balance | Provision for impairment in this period | Ending balance of impairment provision |
| Xinjiang Tianzhu (a) | 60,000,000 | 60,000,000 | ||||
| Kylin Packaging | 23,176,063 | 23,176,063 | ||||
| Changyu Chateau (a) | 28,968,100 | 28,968,100 | ||||
| Pioneer International (b) | 3,500,000 | 3,500,000 | ||||
| Ningxia Growing | 36,573,247 | 36,573,247 | ||||
| National Wine | 2,000,000 | 2,000,000 | ||||
| Icewine Valley (a) | 30,440,500 | 30,440,500 | ||||
| Beijing Chateau (a) | 579,910,000 | 579,910,000 | ||||
| Sales Company | 7,200,000 | 7,200,000 | ||||
| Langfang Sales (b) | 100,000 | 100,000 | ||||
| Langfang Castel (a) | 19,835,730 | 19,835,730 | ||||
| Wine Sales | 4,500,000 | 4,500,000 | ||||
| Shanghai Marketing | 300,000 | 300,000 |
Invested unit
| Invested unit | Beginning balance | Increase in this period | Decrease in this period | Ending balance | Provision for impairment in this period | Ending balance of impairment provision |
| (b) | ||||||
| Beijing Marketing | 850,000 | 850,000 | ||||
| Jingyang Sales (b) | 100,000 | 100,000 | ||||
| Jingyang Wine (b) | 900,000 | 900,000 | ||||
| Ningxia Wine | 222,309,388 | 222,309,388 | ||||
| Ningxia Chateau | 443,463,500 | 443,463,500 | ||||
| Chateau Tinlot (b) | 212,039,586 | 212,039,586 | ||||
| Shihezi Chateau | 809,019,770 | 809,019,770 | ||||
| Chang‘an Chateau | 803,892,258 | 803,892,258 | ||||
| R&D Company (a) | 500,000,000 | 500,000,000 | ||||
| Huanren Wine | 21,700,000 | 21,700,000 | ||||
| Wine Sales Company | ||||||
| Francs Champs | 236,025,404 | 236,025,404 | ||||
| Marques del Atrio | 190,150,544 | 190,150,544 | ||||
| Indomita Wine | 274,248,114 | 274,248,114 | ||||
| Kilikanoon Estate, Australia | 105,926,184 | 105,926,184 | ||||
| Total | 4,511,202,204 | 105,926,184 | 4,617,128,388 |
(a) The Company acquired 100% voting right and usufruct of such non-wholly-owned subsidiaries by
means of contract arrangement. Please refer to Note 9.1.(b) The Company acquired 100% voting right of such subsidiaries by means of indirect holding through its
wholly-owned subsidiaries.From January to June 2018, there were no restrictions for the invested entities of the Company to transferassets to the Company.
15.4 Operating income and operating cost
Unit: Yuan
| Item | Amount incurred in this period | Amount incurred in prior period | ||
| Income | Cost | Income | Cost | |
| Main business | 384,520,180 | 330,810,994 | 445,339,324 | 387,600,176 |
| Other business | 24,325,031 | 21,835,995 | 386,481,179 | 350,350,202 |
Total
| Total | 408,845,211 | 352,646,989 | 831,820,503 | 737,950,378 |
15.5 Investment income
Unit: Yuan
| Item | Amount incurred in this period | Amount incurred in prior period |
| Income from long-term equity investment by cost method | 312,409,576 | 66,127,980 |
| Income from long-term equity investment by equity method | ||
| Investment income from disposal of long-term equity investment | ||
| Investment income of the financial assets measured at their fair values and the variation of which is recorded into the current profit and loss during the holding period | ||
| Investment income gained from disposal of the financial assets measured at their fair values and the variation of which is recorded into the current profit and loss | ||
| Investment income of held-to-maturity investment during the holding period | ||
| Investment income of financial assets held for sale during the holding period | ||
| Investment income gained from disposal of financial assets held for sale | ||
| Gains generated from the remaining equity remeasured as per fair value after the loss of control | ||
| Total | 312,409,576 | 66,127,980 |
16. Supplementary materials16.1 List of non-current profits/losses in this period
Unit: Yuan
| Item | Amount | Remark |
| Profits/losses on disposal of non-current assets | 93,958 | |
| Tax return, deduction and exemption approved beyond the authority or without formal approval document | ||
| Governmental subsidy included in the current profits/losses (excluding those closely related to the enterprise business and | 37,982,878 |
Item
| Item | Amount | Remark |
| enjoyed in accordance with the unified standard quota or ration of the state) | ||
| Payment for use of funds by non-financial enterprises included in the current profits/losses | ||
| Income obtained when the investment cost obtained by the enterprise from subsidiaries, joint-run business and joint venture is less than the fair value of the net identifiable assets obtained from the invested units when the investment is made | ||
| Profits/losses on exchange of non-monetary assets | ||
| Profits/losses on entrusting other people to make investment or manage assets | ||
| Asset impairment provision accrued due to force majeure such as natural disaster | ||
| Profits/losses on debt restructuring | ||
| Enterprise reorganization expenses such as staffing expenditure and integration expenses, etc. | ||
| Profits/losses on those beyond the fair value generated from transactions with unfair transaction price | ||
| Current net profits/losses on subsidiaries acquired from a business combination under common control from the beginning to the consolidation date | ||
| Profits/losses on contingencies irrelated to the normal business of the Company | ||
| Profits/losses on changes of fair value of financial assets and liabilities held for trading, and investment income from disposal of financial assets and liabilities held for trading and financial assets held for sale, excluding effective hedging operations relevant to the normal business of the Company | ||
| Returns of provision for impairment of accounts receivable with single impairment test | ||
| Profits/losses on external entrusted loans | ||
| Profits/losses on fair value changes of investment real estate with fair value mode for follow-up measurement |
Item
| Item | Amount | Remark |
| Influence of the one-time adjustment of the current profits/losses in accordance with tax and accounting laws and regulations on the current profits/losses | ||
| Trustee fee income from entrusted operation | ||
| Other non-operating income and expenditure besides the above items | 614,030 | |
| Other profits/losses conforming to the definition of non-current profits/losses | ||
| Minus: Influenced amount of income tax | 9,447,208 | |
| Influenced amount of minority shareholders‘ equity | 84,972 | |
| Total | 29,158,686 | -- |
16.2 Return on net assets and earnings per share
| Profit incurred in this period | Weighted average return on net assets | Earnings per share | |
| Basic EPS (Yuan/Share) | Diluted EPS (Yuan/Share) | ||
| Net profit attributable to common shareholders of the Company | 6.89% | 0.93 | 0.93 |
| Net profit attributable to common shareholders of the Company deducting non-incidental profits/losses | 6.58% | 0.88 | 0.88 |
16.3 Accounting data difference under domestic and foreign accounting standard16.3.1 Net profits & net assets difference disclosed in the financial report according tothe international accounting standard and Chinese accounting standard
Unit: Yuan
| Net profits | Net assets | |||
| Amount incurred in this period | Amount incurred in prior period | Ending balance | Beginning balance | |
| In accordance with the Chinese accounting standard | 635,837,405 | 670,069,054 | 9,532,948,884 | 8,906,342,299 |
| Item & amount adjusted in accordance with the international accounting standard: | ||||
| In accordance with the international accounting standard | 635,837,405 | 670,069,054 | 9,532,948,884 | 8,906,342,299 |
XI. Reference Documents
(1)The original of 2018 Semi-annual Report autographed by the chairman.(2)The Financial Statements autographed and signed by the chairman, chief accountant andaccountants in charge.(3)The Prospectus and Public Offering Announcement for Stock B in 1997; The Prospectusand The Shares’Change & Public Offering Announcement for Stock A in 2000.
(4) The originals of all documents and announcements that the Company made public duringthe report period in the newspapers designated by China Securities Regulatory Commission.
Yantai Changyu Pioneer Wine Co. Ltd.
Board of Directors
August 30
th
, 2018