ANHUI GUJING DISTILLERY COMPANY LIMITED

INTERIM REPORT 2023

August 2023Interim Report 2023

Part I Important Notes Table of Contents and Definitions

The Board of Directors (or the “Board”) the Supervisory Committee as well as the directors

supervisors and senior management of Anhui Gujing Distillery Company Limited (hereinafter

referred to as the “Company”) hereby guarantee the factuality accuracy and completeness of

the contents of this Report and its summary and shall be jointly and severally liable for any

misrepresentations misleading statements or material omissions therein.Liang Jinhui the legal representative and Zhu Jiafeng the Deputy Chief Accountant and

Board Secretary hereby guarantee that the financial statements carried in this Report are

factual accurate and complete.All the Company’s directors have attended the Board meeting for the review of this Report

and its summary.Any plans for the future and other forward-looking statements mentioned in this Report shall

NOT be considered as absolute promises of the Company to investors. Investors among

others shall be sufficiently aware of the risk and shall differentiate between plans/forecasts

and promises. Again investors are kindly reminded to pay attention to possible investment

risks.Investors’ attention is kindly directed to the risk factors that might have an adverse impact on

the fulfillment of the Company’s development strategies and business objectives for the futureas well as to the countermeasures intended to be taken which have been detailed in “X RisksFacing the Company and Countermeasures” in “Part III Management Discussion andAnalysis” of this Report.The Company has no interim dividend plan either in the form of cash or stock.This Report and its summary have been prepared in both Chinese and English. Should there

be any discrepancies or misunderstandings between the two versions the Chinese versions

shall prevail.~ 2 ~Interim Report 2023

Table of Contents

Part I Important Notes Table of Contents and Definitions 2

Part II Corporate Information and Key Financial Information 6

Part III Management Discussion and Analysis 9

Part IV Corporate Governance 29

Part V Environmental and Social Responsibility 31

Part VI Significant Events 39

Part VII Share Changes and Shareholder Information 43

Part VIII Preferred Shares 49

Part IX Corporate Bonds 50

Part X Financial Statements 51

~ 3 ~Interim Report 2023

Documents Available for Reference

(I) Financial statements signed and sealed by the Company’s legal representative as

well as Deputy Chief Accountant and Board Secretary;

(II) All originals of the Company’s documents and announcements that have been

publicly disclosed in the Reporting Period on the media designated by the China

Securities Regulatory Commission; and

(III) The interim report disclosed in other securities markets.~ 4 ~Interim Report 2023

Definitions

Term Definition

The “Company” “ Gu Jing” or “we” Anhui Gujing Distillery Co. Ltd.Gujing Group Anhui Gujing Group Co. Ltd.Gujing Sales Bozhou Gujing Sales Co. Ltd.Yellow Crane Tower Distillery Yellow Crane Tower Distillery Co. Ltd.Mingguang Distillery Anhui Mingguang Distillery Co. Ltd.Longrui Glass Anhui Longrui Glass Co. Ltd.Intelligent Park Intelligent Brewing Technology Transformation Project

~ 5 ~Interim Report 2023

Part II Corporate Information and Key Financial Information

I Corporate Information

Gujing Distillery Gujing

Stock name Stock code 000596 200596

Distillery-B

Stock exchange for stock listing Shenzhen Stock Exchange

Company name in Chinese 安徽古井贡酒股份有限公司

Abbr. (if any) 古井

Company name in English (if any) ANHUI GUJING DISTILLERY COMPANY LIMITED

Abbr. (if any) GU JING

Legal representative Liang Jinhui

II Contact Information

Board Secretary Securities Representative

Name Zhu Jiafeng Mei Jia

Gujing Town Bozhou City Anhui Gujing Town Bozhou City Anhui

Address

Province P.R.China Province P.R.China

Tel. （0558）5712231 （0558）5710057

Fax （0558）5710099 （0558）5710099

Email address gjzqb@gujing.com.cn gjzqb@gujing.com.cn

III Other Information

1. Contact Information of the Company

Indicate by tick mark whether any change occurred to the registered address office address and their zip codes website address and

email address of the Company in the Reporting Period.□ Applicable □ Not applicable

No change occurred to the said information in the Reporting Period which can be found in the 2022 Annual Report.

2. Media for Information Disclosure and Place where this Report is Kept

Indicate by tick mark whether any change occurred to the information disclosure media and the place for keeping the Company’s

periodic reports in the Reporting Period.~ 6 ~Interim Report 2023

□ Applicable □ Not applicable

The newspapers designated by the Company for information disclosure the website designated by the CSRC for disclosing the

Company’s periodic reports and the place for keeping such reports did not change in the Reporting Period. The said information can

be found in the 2022 Annual Report.

3. Other Information

Indicate by tick mark whether any change occurred to other information during the Reporting Period.□ Applicable □ Not applicable

IV Key Financial Information

Indicate by tick mark whether there is any retrospectively restated datum in the table below.□ Applicable □ Not applicable

H1 2023 H1 2022 Change (%)

Operating revenue (RMB) 11310016495.10 9002005923.42 25.64%

Net profit attributable to the listed

2779474367.511918821503.7544.85%

company’s shareholders (RMB)

Net profit attributable to the listed

company’s shareholders before exceptional 2731120890.76 1889027051.06 44.58%

gains and losses (RMB)

Net cash generated from/used in operating

4727836696.734191246799.7912.80%

activities (RMB)

Basic earnings per share (RMB/share) 5.26 3.63 44.90%

Diluted earnings per share (RMB/share) 5.26 3.63 44.90%

Weighted average return on equity (%) 13.96% 10.97% 2.99%

30 June 2023 31 December 2022 Change (%)

Total assets (RMB) 34385117534.17 29789822298.65 15.43%

Equity attributable to the listed company’s

19714682485.2118520757973.526.45%

shareholders (RMB)

V Accounting Data Differences under Chinese Accounting Standards (CAS) and

International Financial Reporting Standards (IFRS) and Foreign Accounting Standards

1. Net Profit and Equity Differences under CAS and IFRS

□ Applicable □ Not applicable

No such differences for the Reporting Period.~ 7 ~Interim Report 2023

2. Net Profit and Equity Differences under CAS and Foreign Accounting Standards

□ Applicable □ Not applicable

No such differences for the Reporting Period.XI Exceptional Gains and Losses

□ Applicable □ Not applicable

Unit: RMB

Item Amount Note

Gain or loss on disposal of non-current assets (inclusive of

-1183887.92

impairment allowance write-offs)

Government subsidies charged to current profit or loss (exclusive

of government subsidies consistently given in the Company’s

27104577.88

ordinary course of business at fixed quotas or amounts as per

governmental policies or standards)

Gain or loss on fair-value changes in trading financial assets and

liabilities & investment income from disposal of trading financial

assets and liabilities and available-for-sale financial assets 25000400.11

(exclusive of effective portion of hedges that arise in the

Company’s ordinary course of business)

Reversed portion of impairment allowance for receivables which

98239.02

are tested individually for impairment

Non-operating income and expense other than the above 25705304.86

Less: Income tax effects 18984822.91

Non-controlling interests effects (net of tax) 9386334.29

Total 48353476.75 --

Particulars about other items that meet the definition of exceptional gain/loss:

□ Applicable □ Not applicable

No such cases for the Reporting Period.Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item listed in the Explanatory Announcement No.

1 on Information Disclosure for Companies Offering Their Securities to the Public—Exceptional Gain/Loss Items:

□ Applicable □ Not applicable

No such cases for the Reporting Period.~ 8 ~Interim Report 2023

Part III Management Discussion and Analysis

I Principal Activity of the Company in the Reporting Period

(I) Principal Activity of the Company

The Company primarily produces and markets baijiu. According to the Industry Categorization Guide for Listed Companies (Revisedin 2012) issued by the CSRC baijiu making belongs to the “liquor beverage and refined tea making industry" (C15). TheCompany’s principal operations remained unchanged in the Reporting Period.(II) Status of the Industry and Position of the Company in the Industry

1. Status of the Baijiu Industry

Since the beginning of the 21st century China's baijiu industry has experienced three development stages. Before 2012 with rapid

economic growth the income of urban and rural residents rose fast and the demand for baijiu continued to increase while

production and sales of baijiu continuously expanded at a fast pace. As a result the baijiu industry witnessed booming supply and

demand. During that period national baijiu brands and local regional renowned baijiu enterprises achieved rapid development. In the

context of the rise in both the demand and price of baijiu the sales income and total profits of baijiu enterprises increased quickly.From the second half of 2012 to 2016 China's economy once again entered a period of adjustment as the Chinese government

introduced a string of policies to restrict the spending on official overseas visits official vehicles and official hospitality such as the

"Eight-point Decision" and "Six Prohibitions" which include restrictions on the consumption of high-end alcohol with public funds.Consumption scenarios such as commercial consumption and government consumption were limited leading to a drop in consumer

demand in a short time. Moreover baijiu prices were under huge pressure. China's baijiu industry entered a period of profound

adjustment. After 2012 both the output growth and income growth of China's baijiu industry slowed down.The baijiu industry began to recover in the second half of 2016 with a rise in consumption demand by end-users propelling the

growth of the overall income and profits of the industry. Since 2017 the overall demand and price of baijiu have increased and the

recovery of mid- and high-end baijiu has picked up. In the future benefiting from the consumption upgrade and the change of

consumption concept the growth of sub-high-end baijiu will be the key driver for the development of the baijiu industry. The

consumption upgrade is the major driving force for the development of the baijiu industry. Baijiu enterprises need to fully grasp the

great opportunities from the extensive consumption upgrade and strive to better meet the consumption needs of the market through

quality improvement market segmentation and product innovation and other means so as to advance the transformation and upgrade

of the product structure.

2. Position of the Company in the Industry

China has a long history of baijiu. There are a large number of baijiu production enterprises in the country but the regional

distribution of baijiu consumers is particularly evident. The baijiu industry is characterized by full competition with a high degree of

marketization. The market competition is fierce and the industry adjustments are constantly deepening. In the national market the

competitive edges of the enterprises come from their brand influence product style and marketing & operation models. In a single

regional market the competitive strengths of the enterprises depend on their brand influence in the region the recognition of the

companies by regional consumers and comprehensive marketing capacity.As one of China’s traditional top eight liquor brands the Company is the first listed baijiu company with both A and B stocks. It is

located in Bozhou City Anhui Province in China the hometown of historic figures Cao Cao and Hua Tuo as well as one of the

world’s top 10 liquor-producing areas. No changes have occurred to the main business of the Company in the Reporting Period. As

the main product of the Company the Gujing spirit originated as a “JiuYunChun Spirit” together with its making secrets being

presented as a hometown specialty by Cao Cao a famous warlord in China’s history to Emperor Han Xiandi (name: Liu Xie) in A.D.~ 9 ~Interim Report 2023

196 and was continually presented to the royal house since then. With crystalline liquid rich aroma a fine flavor and a lingering

aftertaste the Gujing spirit has helped the Company win four national baijiu golden awards a golden award at the 13th SIAL Paris

the title of China’s “Geographical Indication Product” the recognition as a “Key Cultural Relics Site under the State Protection” the

recognition with a “National Intangible Cultural Heritage Protection Project” a Quality Award from the Anhui provincial

government a title of “National Quality Benchmark” among other honors.In April 2016 Gujing Distillery signed a strategic cooperation agreement with Huanghelou Liquor Co. Ltd. opening a new era of

cooperation in China's famous liquor industry. Yellow Crane Tower Baijiu is the only famous Chinese liquor in Hubei. Its unique

style is "soft mellow elegant and cool and has a long lingering fragrance". It won the two China gold medal in baijiu appreciation in

1984 and 1989. At present Huanghelou liquor industry has three bases: Wuhan Xianning and Suizhou. Among them Huanghelou

Liquor Culture Expo Park in Wuhan base has been approved as national AAA scenic spot and Huanghelou forest wine town in

Xianning base has been approved as national AAAA scenic spot.In January 2021 Gujing Distillery and Mingguang signed a strategic cooperation agreement. The unique mung bean flavor adds to

the famous liquor family of Gu Jing. Gu Jing has become a renowned liquor producer in China with three brands four major flavors

and three producing areas.The Company is subject to the disclosure requirements for the “food and liquor & wine production industry” in the Guideline No. 3

of the Shenzhen Stock Exchange for Self-regulation of Listed Companies—Industry-specific Information Disclosure.Brand operation

Focusing on "brand quality and morality" the Company vigorously promotes product development and quality upgrade and gives

full play to the leading role of the brand “Gujinggong Liquor”. It proactively participates in the project of China Central Television

("CCTV") titled Promote Chinese Brands to Strengthen China and takes advantage of platforms provided by CCTV provincial-level

satellite TV channels the Internet and new media to constantly tell the stories of the brand “Gujinggong Liquor”. Additionally by

holding the Gujing Group Enterprise Day of China Pavilion at Expo 2020 Dubai the Company uses "liquor as the medium" to

display the beauty of Chinese culture and convey the values of "Be Honest Offer Quality Liquor Be Stronger and Be Helpful to the

Society" to the world.The Company has been strengthening the building of access to the end market and creating new marketing forms. It has ceaselessly

consolidated and deepened the "Gu 20 Toasts the Success" themed event focused on the core market exploration and

comprehensively launched a range of consumer fostering activities. Through the brand communication mode that combines online

publicity and offline experience the Company has offered core consumers an opportunity to watch and experience its liquor-making

process and quality. It has organized a series of brand promotion activities as a result of which the visibility of the brand

“Gujinggong Liquor” has continuously increased.Main sales model

The Company's key sales model is dealer model. Under the dealer model the Company will select one or more dealers for sales of a

product brand (or product sub-brand) according to the market capacity.Distribution model:

□ Applicable □ Not applicable

1. Operating Performance by Distribution Channel and Product Category

Unit: RMB

YoY YoY

YoY

change change

change

in in

By Operating revenue Cost of sales Gross profit margin in cost

operating gross

of sales

revenue profit

(%)

(%) margin

~ 10 ~Interim Report 2023

(%)

Channel

Online 343597657.39 83341732.21 75.74% 22.92% 38.99% -2.81%

Offline 10966418837.71 2305269106.07 78.98% 25.73% 17.43% 1.48%

Total 11310016495.10 2388610838.28 78.88% 25.64% 18.07% 1.35%

YoY

YoY

YoY change

change

change in

in

By Operating revenue Cost of sales Gross profit margin in cost gross

operating

of sales profit

revenue

(%) margin

(%)

(%)

Product series

Original Vintage 8761231340.80 1301249321.80 85.15% 30.67% 24.41% 0.75%

Gujinggong Liquor 1111025383.77 453189460.71 59.21% 23.26% 28.72% -1.73%

Yellow Crane Tower and oters 1108429115.03 380135089.67 65.71% 1.63% 2.53% -0.30%

Total 10980685839.60 2134573872.18 80.56% 26.26% 20.68% 0.90%

2. Distributors

Region Ending number Increase or decrease in quantity during the reporting period

North China 1134 2

South China 537 7

Central China 2649 -72

International 21 5

Total 4341 -58

3. Principal methods of settlement and distribution with distributors

The Company's principal method of settlement with its distributors is on a pay-as-you-go basis and the method of distribution is

authorised distribution.

4. Top five distributors

Total sales to top five distributors (RMB) 1628072653.52

Total sales to top five distributors as % of total sales of the

14.40%

Reporting Period (%)

Total sales to related parties among top five distributors as % of

0.00%

total sales of the Reporting Period (%)

The Company had no accounts receivable from the top five distributors at the end of the Reporting Period.Proportion of store sales terminal exceeds 10%

□ Applicable □ Not applicable

Online direct sales

~ 11 ~Interim Report 2023

□ Applicable □ Not applicable

The major product varieties sold online are Original Vintage Series and Gujinggong Liquor Series among others. The main online

sales platforms are Gujing Distillery platform Tmall JD.com and Suning.com.Any over 30% YoY movements in the selling price of main products contributing over 10% of current total operating revenue

□ Applicable □ Not applicable

Model and contents of purchase

The Company primarily adopts the bidding and strategic cooperation models. It also adopts the base planting model in order to

ensure the quality of some raw materials.Purchase contents

Purchase contents Purchase model Amount (RMB’0000)

Strategic purchasing 45690.28

1 Raw materials

Tendering purchasing 86594.84

2 Packing materials Tendering purchasing 115548.30

Total 247833.42

The proportion of raw materials purchased from cooperations or farmers to total purchase amount exceeds 30%

□ Applicable □ Not applicable

Any over 30% YoY movements in prices of main purchased raw materials

□ Applicable □ Not applicable

Main production model

The Company's existing production model is sales-based production. Specifically the Logistics Control Center is responsible for

coordinating the implementation of production plans release of material production plans and delivery and tracking of products and

prepares balanced production plans on a quarterly basis according to the product inventory. The logistics distribution system is

coordinated according to the production schedule and inventory with a view to ensuring timely delivery of products.Commissioned production

□ Applicable □ Not applicable

Breakdown of cost of sales

H1 2023 H1 2022

Change

Item As % of total cost of As % of total cost of

Cost of sales (RMB) Cost of sales (RMB) (%)

sales sales

Direct

1768111648.9274.02%1433860216.8770.88%23.31%

materials

Direct labor

206960453.628.66%184982109.949.14%11.88%

cost

Manufacturi

104793339.674.39%97606754.634.82%7.36%

ng expenses

Fuels 54708429.97 2.29% 52347941.56 2.59% 4.51%

Total 2134573872.18 89.36% 1768797023.00 87.43% 20.68%

Output and inventory

1. Output sales volume and inventory of main products for the Reporting Period and respective YoY changes thereof

~ 12 ~Interim Report 2023

Unit: ton

YoY changes

YoY changes YoY changes

Main product Output Sales volume inventory of sales

of output of inventory

volume

Original Vintage Series 28509.33 36049.87 17061.72 8.79% 24.73% 53.51%

Gujinggong Liquor Series 10665.13 16124.62 3092.37 -48.98% 9.87% -66.04%

Yellow Crane Tower Liquor

11580.0113096.013640.69-45.78%-12.68%-60.82%

Series and Others

Reasons for change:

(1) The inventory of the Original Vintage Series increased 53.51% year on year primarily because revenue went up and product

stocks increased.

(2) The output of the Gujinggong Liquor Series decreased48.98%year on year primarily because previous stocks were sold and the

output decreased in the current period.

(3) The inventory of the Gujinggong Liquor Series decreased 66.04% year on year primarily because previous stocks were sold and

the output decreased in the current period.

(4) The output of the Yellow Crane Tower and Others Liquor Series decreased 45.78% year on year primarily because previous

stocks were sold and the output decreased in the current period.

2. Ending inventory of finished liquor and semi-product

Category Ending quantity (ton)

Finished liquor 23794.78

Semi-product 224286.91

3. Capacity

Unit: ton

Main product Designed capacity (annual) Actual capacity (H1) Capacity in progress (annual)

Finished liquor 115000 50754 130000

II Core Competitiveness Analysis

No significant changes occurred to the Company’s core competitiveness in the Reporting Period.III Analysis of Core Businesses

OverviewIndicate whether it is the same with the contents disclosed under the heading “Principal Activity of the Company in the ReportingPeriod” above.□ Yes □ No

See contents under the heading “I Principal Activity of the Company in the Reporting Period”.Year-on-year changes in key financial data:

Unit: RMB

~ 13 ~Interim Report 2023

H1 2023 H1 2022 Change (%) Main reason for change

Operating revenue 11310016495.10 9002005923.42 25.64%

Cost of sales 2388610838.28 2023003861.36 18.07%

Selling expense 3048015143.61 2595105420.46 17.45%

Administrative expense 583974559.37 559320542.66 4.41%

Finance costs -122850639.75 -129623959.99 5.23%

Income tax expense 964656318.72 706053183.61 36.63% Increased gross profit

Net cash generated

from/used in operating 4727836696.73 4191246799.79 12.80%

activities

Net cash generated Decreased disinvestment

from/used in investing -999774105.42 2410996182.79 -141.47% in wealth management

activities products upon maturity

The main reason is the

Net cash generated

impact of the 2022

from/used in financing 8867195.83 -1250168998.75 100.71%

dividend distribution in

activities

July 2023.Decreased disinvestment

Net increase in cash and

3736929787.14 5352073983.83 -30.18% in wealth management

cash equivalents

products upon maturity

Material changes to the profit structure or sources of the Company in the Reporting Period:

□ Applicable □ Not applicable

No such changes in the Reporting Period.Breakdown of operating revenue:

Unit: RMB

H1 2023 H1 2022

As % of total As % of total

Change (%)

Operating revenue operating revenue Operating revenue operating revenue

(%)(%)

Total 11310016495.10 100.00% 9002005923.42 100.00% 25.64%

By operating division

Manufacturing 11310016495.10 100.00% 9002005923.42 100.00% 25.64%

By product category

Baijiu 10980685839.60 97.09% 8696974044.24 96.61% 26.26%

Hotel services 44091924.96 0.39% 25249697.55 0.28% 74.62%

Other 285238730.54 2.52% 279782181.63 3.11% 1.95%

By operating segment

~ 14 ~Interim Report 2023

North China 821080901.86 7.26% 608718399.33 6.76% 34.89%

Central China 9782622497.21 86.49% 7877325509.33 87.51% 24.19%

South China 696179001.74 6.16% 504229987.66 5.60% 38.07%

Overseas 10134094.29 0.09% 11732027.10 0.13% -13.62%

Operating division product category or operating segment contributing over 10% of operating revenue or operating profit:

□ Applicable □ Not applicable

Unit: RMB

YoY change in YoY change in

Gross profit YoY change in

Operating revenue Cost of sales operating revenue gross profit

margin cost of sales (%)

(%) margin (%)

By operating division

Manufacturing 11310016495.10 2388610838.28 78.88% 25.64% 18.07% 1.35%

By product category

Baijiu 10980685839.60 2134573872.18 80.56% 26.26% 20.68% 0.90%

Hotel services 44091924.96 21836104.57 50.48% 74.62% 32.31% 15.84%

Other 285238730.54 232200861.53 18.59% 1.95% -2.31% 3.55%

By operating segment

North China 821080901.86 177942282.98 78.33% 34.89% 31.17% 0.61%

Central China 9782622497.21 2080292659.11 78.73% 24.19% 16.55% 1.39%

South China 696179001.74 128233371.06 81.58% 38.07% 30.77% 1.03%

Overseas 10134094.29 2142525.13 78.86% -13.62% -51.24% 16.31%

Core business data of the prior year restated according to the changed statistical caliber for the Reporting Period:

□ Applicable □ Not applicable

Any over 30% YoY movements in the data above and why:

□ Applicable □ Not applicable

Revenue from hotel services increased 74.62% year on year primarily driven by the increased room revenue.The Company is subject to the disclosure requirements for the “food and liquor & wine production industry” in the Guideline No. 3

of the Shenzhen Stock Exchange for Self-regulation of Listed Companies—Industry-specific Information Disclosure.Breakdown of selling expense:

Unit: RMB

Item H1 2023 H1 2022 Change Reason

Employment 623631139.58 499313896.40 2(%4.)9 0%

Tberanvefeilt sf ees 96783184.70 77211414.12 25.35%

Advertisement 564290043.38 557349666.49 1.25%

Cfeoems prehensive 1333513264.01 1057068152.23 26.15%

pSreorvmicoeti ofene cs osts 371761620.49 352084304.93 5.59%

Others 58035891.45 52077986.29 11.44%

Total 3048015143.61 2595105420.46 17.45%

~ 15 ~Interim Report 2023

Details about advertisement

No. Main way Amount (RMB’0000)

1 TV 22964.52

2 Offline 25934.44

3 Online 7530.04

Total 56429.00

IV Analysis of Non-Core Businesses

□ Applicable □ Not applicable

V Analysis of Assets and Liabilities

1. Significant Changes in Asset Composition

Unit: RMB

30 June 2023 31 December 2022 Change in

Reason for any significant

As % of total As % of total percentage

Amount Amount change

assets assets (%)

Monetary assets 16852310217.36 49.01% 13772561141.30 46.23% 2.78%

Accounts

101188559.180.29%62688668.940.21%0.08%

receivable

Inventories 6175047719.12 17.96% 6058106090.88 20.34% -2.38%

Investment

48535817.210.14%13396881.960.04%0.10%

property

Long-term

equity 10200382.24 0.03% 10154235.98 0.03% 0.00%

investments

Fixed assets 2917327570.54 8.48% 2741844586.30 9.20% -0.72%

Construction in

3007948340.568.75%2454703251.448.24%0.51%

progress

Right-of-use

25290923.220.07%32562171.100.11%-0.04%

assets

Short-term

0.000.00%83232176.310.28%-0.28%

borrowings

Contract

3025229971.798.80%826636478.352.77%6.03%

liabilities

Long-term

179053388.890.52%44944737.910.15%0.37%

borrowings

~ 16 ~Interim Report 2023

Lease liabilities 13441957.10 0.04% 18631395.93 0.06% -0.02%

2. Major Assets Overseas

□ Applicable □ Not applicable

3. Assets and Liabilities at Fair Value

□ Applicable □ Not applicable

Unit: RMB

Gain/loss on Cumulative Impairmen

fair-value fair-value t allowance Purchased in Sold in the Other

Beginning

Item changes in changes for the the Reporting Reporting change Ending amount

amount

the Reporting charged to Reporting Period Period s

Period equity Period

Financial assets

1.

Held-for-tradin

g financial

1782687769.625168981.3700000000.0717178272.71790678478.1

assets 0.00

60097

(excluding

derivative

financial assets)

2. Investments

4306149.3

in other equity 56447789.94 0.00 0.00 0.00 60753939.28

4

instruments

Subtotal of 1839135559.6 25168981.3 4306149.3 700000000.0 717178272.7 1851432417.4

financial assets 0 0 4 0 9 5

Total of the 1839135559.6 25168981.3 4306149.3 700000000.0 717178272.7 1851432417.4

above 0 0 4 0 9 5

Financial

0.000.000.000.000.000.00

liabilities

Significant changes to the measurement attributes of the major assets in the Reporting Period:

□ Yes □ No

4. Restricted Asset Rights as at the Period-End

Unit: RMB

Item Ending carrying value Reason for restriction

Certificate of deposit and cash deposits that are pledged for issuing

Monetary assets 10006995.00

bank acceptance bills

~ 17 ~Interim Report 2023

Intangible assets 169116600.00 In pledge for loan

Total 179123595.00 --

VI Investments Made

1. Total Investments Made

□ Applicable □ Not applicable

2. Significant Equity Investments Made in the Reporting Period

□ Applicable □ Not applicable

3. Major Non-Equity Investments Ongoing in the Reporting Period

□ Applicable □ Not applicable

Unit: RMB

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Accum not

Accumula

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Intellige refer to

nt Self-o the

Technol

Liquo wned 3 Announc

ogy

Transfor Self-b r 710030 3506055 funds 42.2 Marc ement

Yes N/A N/A N/A

mation uilt produ 483.37 408.25 and 9% h No.Project

ction raised 2020 2020-00

for

Liquor funds 2 on

Producti Investme

on

nt in the

Intellige

nt

~ 18 ~Interim Report 2023

Technol

ogy

Transfor

mation

Project

for

Liquor

Producti

on

disclose

d by the

Compan

y on the

website

of

Cninfo

dated 3

March

2020.

7100303506055

Total -- -- -- -- -- N/A N/A -- -- --

483.37408.25

~ 19 ~Interim Report 2023

4. Financial Investments

(1) Securities Investments

□ Applicable □ Not applicable

Unit: RMB

Gain/loss

on fair Cumulative

Variety Purchased Ending

Code of Name of Initial Accounting Beginning value fair value Sold in the Gain/loss in in the Funding

of measurement changes in changes Reporting the Reporting carrying Accounting title

securities securities investment cost Reporting model source

securities carrying value

the charged to Period Period

Period

Reporting equity value

Period

DAPU Asset Fair value Held-for-trading Self-owned

Fund 200000000.00 202334870.49 - 648400.98 20 1686469.51 - 1293063.11 0.00

Management method financial assets funds

Other ending holding securities

------

investments

Total 200000000.00 -- 202334870.49 - 648400.98 20 1686469.51 - 1293063.11 0.00 -- --

Disclosure date of the

announcement about the board’s

Naught

consent for the securities

investment

Disclosure date of the

announcement about the general

Naught

meeting’s consent for the

securities investment (if any)

~ 20 ~Interim Report 2023

(2) Investments in Derivative Financial Instruments

□ Applicable □ Not applicable

Unit: RMB’0000

Proportion

of closing

Actual

Purchased in investment

Relationship Initial Beginning Sold in the Impairment Ending gain/loss in

Related-party Type of the amount in

Operator with the investment Starting date Ending date investment Reporting provision (if investment the

transaction derivative Reporting the

Company amount amount Period any) amount Reporting

Period Company’s

Period

ending net

assets

Reverse

Reverse

repurchase

Naught No repurchase of 0.00 2023-06-26 2023-07-03 6000.00 2000.00 6000.00 2000.00 0.10% 7.59

of national

national debt

debt

Total 0.00 -- -- 6000.00 2000.00 6000.00 2000.00 0.10% 7.59

Capital source for derivative investment Company’s own funds

Lawsuits involved (if applicable) N/A

Disclosure date of board announcement approving

30 August 2013

derivative investment (if any)

Disclosure date of shareholders’ meeting announcement

N/A

approving derivative investment (if any)

Analysis of risks and control measures associated with

derivative investments held in the Reporting Period

The Company had controlled the relevant risks strictly according to the Derivatives Investment Management System.(including but not limited to market risk liquidity risk

credit risk operational risk legal risk etc.)

~ 21 ~Interim Report 2023

Changes in market prices or fair value of derivative

investments during the Reporting Period (fair value

Naught

analysis should include measurement method and

related assumptions and parameters)

Significant changes in accounting policies and specific

accounting principles adopted for derivative investments

Naught

in the Reporting Period compared to previous reporting

period

Based on the sustainable development of the main business and the sufficient free idle money the Company increased the profits

through investing in the reasonable financial derivative instruments which was in favor of improving the service efficiency of the idle

funds; in order to reduce the investment risks of the financial derivative instruments the Company had set up corresponding

Opinion of independent directors on derivative supervision mechanism for the financial derivative instrument business and formulated reasonable accounting policy as well as specific

investments and risk control principles of financial accounting; the derivative Investment business developed separately took national debts as mortgage object

which was met with the cautious and steady risks management principle and the interest of the Company and shareholders. Therefore

agreed the Company to develop the derivative Investment business of reverse repurchase of national debt not more than the limit of

RMB0.3 billion.

5. Use of Funds Raised

□ Applicable □ Not applicable

(1) Overall Usage of Funds Raised

□ Applicable □ Not applicable

Unit: RMB’0000

Total funds used Accumulative Proportion of The usage and Amount of

Total funds Accumulative Total funds with Total unused

Year Way of raising in the Current funds with accumulative destination of funds raised idle

raised fund used usage changed funds

Period usage changed funds with unused funds for over two

~ 22 ~Interim Report 2023

usage changed years

Deposited in

Private fund raising

2021 placement of 495434.21 70287.96 222230.46 0.00 0.00 0.00% 273203.75 a ccount and 0.00

stocks cash

management

Total -- 495434.21 70287.96 222230.46 0.00 0.00 0.00% 273203.75 -- 0.00

Explanation of overall usage of funds raised

Through this issuance the Company raised total proceeds of RMB5000000000.00. After deducting the expenses related to the issuance of RMB45657925.15 (excluding VAT) the actual net

proceeds raised were RMB4954342074.85 and the actual amount received was RMB4957547169.81. As of 30 June 2023 the Company cumulatively used raised funds of RMB2222.3046

million paid issuance costs of RMB1.2514 million received interest income of RMB134.5035 million in the raised funds account exclusive of the issuance costs and used raised funds and used

temporarily idle raised funds of RMB1900 million for cash management. At 30 June 2023 the balance of the raised funds account stood at RMB2868.4947 million.

(2) Commitment Projects of Fund Raised

□ Applicable □ Not applicable

Unit: RMB’0000

Whether

Accumulative Investment

Changed or Investment Date of Realized Whether occurred

Committed Investment investment schedule as

Committed investment project not (including amount in the reaching income in the reached significant

investment amount after amount as of the

and super raise fund arrangement partial Reporting intended use Reporting anticipated changes in

amount adjustment (1) the period-end period-end

changes) Period of the project Period income project

(2)(3)＝(2)/(1)

feasibility

Committed investment project

The Intelligent Technology

31 December

Transformation Project for Liquor Not 495434.21 495434.21 70287.96 222230.46 44.86% N/A Not

2024

Production

~ 23 ~Interim Report 2023

Subtotal of committed investment

--495434.21495434.2170287.96222230.46--------

project

Total -- 495434.21 495434.21 70287.96 222230.46 -- -- -- --

Condition and reason for not

reaching the schedule and

N/A

anticipated income (by specific

items)

Notes of condition of significant

changes occurred in project N/A

feasibility

Amount usage and schedule of

N/A

super raise fund

Changes in implementation

N/A

address of investment project

Adjustment of implementation

N/A

mode of investment project

Advance investments in projects

financed with raised funds and

swaps of such advance N/A

investments with subsequent

raised funds

Idle fund supplementing the

N/A

current capital temporarily

Amount of surplus in project

N/A

implementation and the reasons

~ 24 ~Interim Report 2023

Usage and destination of unused As of 30 June 2023 the unused raised funds and the interest were deposited in the special account for raised funds and idle raised funds of RMB1900 million

funds were outstanding for cash management purposes.Problems incurred in fund using

N/A

and disclosure or other condition

(3) Raised Funds Re-purposed

□ Applicable □ Not applicable

No such cases in the Reporting Period.VII Sale of Major Assets and Equity Interests

1. Sale of Major Assets

□ Applicable □ Not applicable

No such cases in the Reporting Period.

2. Sale of Major Equity Interests

□ Applicable □ Not applicable

VIII Main Controlled and Joint Stock Companies

□ Applicable □ Not applicable

Main subsidiaries and joint stock companies with an over 10% influence on the Company’s net profits

Unit: RMB

Company Relationship Main

Registered capital Total assets Net assets Operating revenues Operating profit Net profit

name with the business

~ 25 ~Interim Report 2023

Company scope

Wholesales

of Baijiu

construction

Bozhou

materials

Gujing Sales Subsidiary 84864497.89 9627681096.25 2410686463.57 10152879375.88 1533254970.86 1192630287.36

feeds

Co. Ltd

assistant

materials

etc.Anhui Manufacture

Longrui and sale of

Subsidiary 86660268.98 516572258.43 424904598.50 208258246.27 25298730.08 24894615.63

Glass Co. glass

Ltd products etc.Yellow

Crane Tower Production

Wine Subsidiary and sales of 400000000.00 1836722934.86 949064317.44 865646272.06 129521674.22 103480210.38

Industry Baijiu etc.Co. Ltd

Shanghai

Hotel

Gujing

management

Jinhao Hotel Subsidiary 54000000.00 166073896.56 83939104.82 38494807.00 6595043.96 4898037.95

house lease

Management

etc.Co. Ltd.Subsidiaries obtained or disposed in the Reporting Period:

□ Applicable □ Not applicable

Subsidiary How subsidiary was obtained or disposed Effects on overall operations and performance

Anhui Guqi Distillery Co. Ltd. Incorporated with investment Optimizing internal operation structure and enhancing endogenous impetus

~ 26 ~Interim Report 2023

Wuhan Gulou Junhe Trading Co. Ltd. Incorporated with investment Optimizing internal operation structure and enhancing endogenous impetus

Wuhan Gulou Juntai Trading Co. Ltd. Incorporated with investment Optimizing internal operation structure and enhancing endogenous impetus

Notes to main controlled and joint stock companies:

Not applicable.IX Structured Bodies Controlled by the Company

□ Applicable □ Not applicable

X Risks Facing the Company and Countermeasures

(I) Risks Facing the Company

1. The strengthened concentration and intensified polarization in the baijiu industry and continuously escalated competition for production capacity market and flavor in the era of famous

liquor competition.

2. The more complex severe and uncertain external environment.

(II) Operating Measures

1. MarketingThe Company will target a high level to improve the brand-based driving effect. The Company will adhere to the nationwide and sub-high-end strategy that advocates “spiking hard from ahigh position”. The Company will also continue to deepen the “Three Ones Project” and adhere to the implementation route of “position occupation market consolidation and customeracquisition” to accelerate its advancement toward the whole country and expansion in markets outside the base province. By making a targeted layout the Company aims to cultivate the

market vitality. By brand resonance the Company aims to deepen its marketing modes. By making more efforts on terminals the Company aims to enhance the cultivation of consumers.Meanwhile the Company will deepen the construction of its marketing system continue to conduct upgrading regarding its brands product quality and cultural vitality continuously expand its

brand influence and increase its brand reputation.

2. Product Management

The Company aims to implement the call on green and intelligent liquor-making. By actively responding to the national “dual carbon” goal and strictly implementing policies related to

environment protection the Company aims to achieve green production. The Company will also accelerate the progress of the intelligent industrial park project so that the park can be put into

operation sooner. Moreover the Company will make concerted effort to conduct equipment upgrading and transformation optimize processes and procedure and promote intelligent

production.

3. Engineering Construction

~ 27 ~Interim Report 2023

The Company will accelerate the construction of the Intelligent Technology Transformation Project for Liquor Production (the “Intelligent Park”) adhering to high standards and high quality

requirements.

4. Informatization Construction

The Company will restructure business processes. With the construction of various systems such as APS MES and SCADA the Company will complete the construction of smart factories

that are automatic information-based intelligent and driven by the integration of IT and OT. The Company will also build an industrial IoT platform to achieve the interconnection of devices

as well as improve the efficiency of device coordination and the ability of predictive device maintenance. Moreover the Company will build a data platform to establish a unified big data

governance system to provide flexible support for data analysis in the foreground and the background.

5. Safety and Environmental Protection

The Company will enhance the inspection and governance of safety hazards emphasize accountability of duty performance conduct effective long-term management and ensure the

achievement of the objective of “four zeros”. By implementing green and low-carbon production the Company will systematically implement energy conservation and consumption reduction

to ensure that its discharge and emissions will meet the relevant standards.

6. Internal Management

The Company also aims to deepen the implementation of the reform of state-owned enterprises. It will consolidate its achievements in the three-year action of the reform of state-owned

enterprises and conduct more in-depth and practical reform of the Three Systems. By revitalizing the mechanisms of post competition and employee appraisal the Company aims to achieve

the upward and downward mobility of managers; by revitalizing the mechanisms of remuneration distribution and performance appraisal the Company aims to achieve the upward and

downward mobility of employee income. Moreover by continuously promote the optimization of cost models and procedure the Company aims to improve its operation efficiency.

7. Corporate Culture Construction

Additionally the Company will implement the spirit of the 20th National Congress of the CPC. It will continue to implement the important instructions of General Secretary Xi Jinping

thoroughly conduct themed publicity and education continue to enhance ideology-related work and conduct effective defence as a main venue for ideology-related work. It will also make

efforts to develop an innovation model with the in-depth integration of Party building and business. Furthermore it will take advantage of the co-development and exchange platform for Party

building to enhance abilities and promote development. Moreover it will enhance the ideological education of its employees by combining business training with ideological guidance.In 2023 the Company will continue to adhere to the guidance of the Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and thoroughly implement the spirit of the

20th National Congress of the CPC as well as the decisions and arrangements of the Party committees and governments of the base province and the base city. It will deepen the reforms

strengthen confidence stay focused as well as maintain integrity and innovation. Pursuing progress while ensuring stability it will strive to achieve operating revenue of more than RMB20

billion in the year and then advance toward a higher objective.~ 28 ~Interim Report 2023

Part IV Corporate Governance

I Annual and Extraordinary General Meeting Convened during the Reporting Period

1. General Meetings Convened during the Reporting Period

Investor Index to disclosed

Meeting Type Convened date Disclosure date

participation ratio information

For details see

Announcement about

Resolutions of 2022

Annual General Meeting

of the Company disclosed

The 2022 Annual Annual General

58.01% 29 June 2023 30 June 2023 on China Securities

General Meeting Meeting

Journal Shanghai

Securities News Ta Kung

Pao (HK) and

http://www.cninfo.com.cn

on 30 June 2023.

2. Extraordinary General Meetings Convened at the Request of Preference Shareholders with Resumed

Voting Rights

□ Applicable □ Not applicable

II Change of Directors Supervisors and Senior Management

□ Applicable □ Not applicable

Name Office title Type of change Date of change Reason for change

Li Jing Independent Director Elected 29 June 2023

Song Zifa Supervisor Elected 29 June 2023

Liu Yongxia Employee Supervisor Elected 29 June 2023

Resigned on expiry of

Zhang Guiping Independent Director 29 June 2023

the term of office

Resigned on expiry of

Lu Duicang Supervisor 29 June 2023

the term of office

Resigned on expiry of

Zhang Bo Employee Supervisor 29 June 2023

the term of office

III Interim Dividend Plan

□ Applicable □ Not applicable

~ 29 ~Interim Report 2023

The Company has no interim dividend plan either in the form of cash or stock.IV Equity Incentive Plans Employee Stock Ownership Plans or Other Incentive Measures for

Employees

□ Applicable □ Not applicable

No such cases in the Reporting Period.~ 30 ~Interim Report 2023

Part V Environmental and Social Responsibility

I Major Environmental Issues

Indicate by tick mark whether the Company or any of its subsidiaries is a heavily polluting business identified by the environmental

protection authorities of China.□ Yes □ No

Policies and industry standards pertaining to environmental protection:

The Company carries out environmental protection work in strict accordance with the requirements of laws and regulations such as

"Environmental Protection Law of the People's Republic of China" "Air Pollution Prevention and Control Law of the People's

Republic of China" "Water Pollution Prevention and Control Law of the People's Republic of China" "Solid Waste Pollution

Prevention and Control Law of the People's Republic of China" and other laws and regulations and strictly follows the "Management

Measures for the Disclosure of Enterprise Environmental Information According to Law" and "Measures for Self-monitoring and

Information Disclosure of National Key Monitoring Enterprises (Trial)". The Company discloses environmental information in a

timely manner and consciously accepts social supervision. The Company implements the Emission Standards for Air Pollutants from

Boilers (GB13271-2014) Water Pollution Emission Standards for Fermented Alcohol and Baijiu Industry (GB27631-2011) and

Environmental Noise Emission Standards for Industrial Enterprises (GB12348-2008) and other relevant standards.Environmental protection administrative licenses:

No. Administrative matter Serial number Application time Expiry date

Sewage discharge permit for

1 913400001519400083001V 19 July 2022 18 July 2027

Gujing plant

Sewage discharge permit for

2 913400001519400083002V 19 July 2022 18 July 2027

Zhangji plant

Sewage discharge permit for

3 913400001519400083003V 19 July 2022 18 July 2027

Headquarter plant

Sewage discharge permit for

4 913400001519400083004V 17 October 2022 16 October 2027

Intelligent Park plant

Sewage discharge permit for

5 91341600151946047T001U 24 July 2023 23 July 2028

Longrui Glass

Sewage discharge permit for

6 914201057483467497001R 6 January 2023 5 January 2028

Yellow Crane Tower (Wuhan)

Sewage discharge permit for

7 91421200562735332N001V 25 June 2023 24 June 2028

Yellow Crane Tower (Xianning)

Sewage discharge permit for

8 9142130077756290XJ001V 23 November 2022 22 November 2027

Yellow Crane Tower (Suizhou)

Sewage discharge permit for Anhui

9 91341182781098222U001T 26 November 2022 25 November 2027

Mingguang Distillery

The regulations for industrial emissions and the particular requirements for controlling pollutant emissions those are associated with

production and operational activities.Type of Name of Number Distributio Discharge Discharge Approved Excessiv

Name of Way of Total

major major of n of concentratio standards total e

~ 31 ~Interim Report 2023

polluter pollutant pollutants discharge discharg discharge n implemente discharge discharge discharge

s e outlets outlets d

Gujing

Gujing plant Gujing plant：

Gujing

≦50mg/L plant：5.20t 105.916t

Anhui plant

23.29mg/L Zhangji Zhangji Zhangji

Gujing Waste Direct Zhangji

COD 3 19.19mg/L plant and plant：1.89t plant： Naught

Distillery water discharge plant

27.37mg/L Headquarter Headquarte 26.504t

Co. Ltd. Headquarte

plant≦ r plant： Headquarte

r plant

100mg/L 13.52t r plant：

116.0596t

Gujing

Gujing plant Gujing plant：

Gujing

≦5mg/L plant：0.07t 10.5916t

Anhui plant

0.33mg/L Zhangji Zhangji Zhangji

Gujing Waste Direct Zhangji

NH3-N 3 0.19mg/L plant and plant：0.02t plant： Naught

Distillery water discharge plant

0.18mg/L Headquarter Headquarte 2.6504t

Co. Ltd. Headquarte

plant≦ r plant： Headquarte

r plant

10mg/L 0.09t r plant：

11.60596t

Gujing plant Gujing

Gujing

Gujing and plant：

Organize plant：0.09t

Anhui plant Headquarter 4.301t

d 0.52mg/m3 Zhangji

Gujing Waste Zhangji plant≦ Zhangji

Smoke discharge 3 1.63mg/m3 plant：0.03t Naught

Distillery gas plant 10mg/m3 plant：/

through 0.69mg/m3 Headquarte

Co. Ltd. Headquarte Zhangji Headquarte

chimney r plant：

r plant plant≦ r plant：

0.21t

20mg/ m3 5.01t

Gujing plant Gujing

Gujing

Gujing and plant：

Organize plant：1.57t

Anhui plant Headquarter 15.055t

d 8.86mg/m3 Zhangji

Gujing Waste Sulfur Dioxid Zhangji plant≦ Zhangji

discharge 3 1.18mg/m3 plant：0.02t Naught

Distillery gas e plant 35mg/m3 plant：/

through 0.58mg/m3 Headquarte

Co. Ltd. Headquarte Zhangji Headquarte

chimney r plant：

r plant plant≦ r plant：

0.17t

50mg/ m3 17.536t

Organize Gujing Gujing plant Gujing Gujing

Anhui

d plant 23.56mg/m3 and plant：4.18t plant：

Gujing Waste Nitrogen

discharge 3 Zhangji 35.13mg/m3 Headquarter Zhangji 21.056t Naught

Distillery gas oxide

through plant 24.52mg/m3 plant≦ plant：0.63t Zhangji

Co. Ltd.chimney 3Headquarte 50mg/m Headquarte plant：

~ 32 ~Interim Report 2023

r plant Zhangji r plant： 10.318t

plant≦ 7.32t Headquarte

150mg/ m3 r plant：

25.051t

Organize

Anhui 1# furnace：

d

Longrui Waste 1# furnace 3.13mg/m3 0.33t

Smoke discharge 2 ≦10mg/m3 / Naught

Glass Co. gas 2# furnace 1.80mg/m3 2# furnace：

through

Ltd 0.29t

chimney

Organize

Anhui 1# furnace：

d

Longrui Waste Sulfur Dioxid 1# furnace 10.43mg/m3 1.16t

discharge 2 ≦50mg/m3 / Naught

Glass Co. gas e 2# furnace 19.10mg/m3 2# furnace：

through

Ltd 3.16t

chimney

Organize

Anhui 1# furnace：

d

Longrui Waste Nitrogen 1# furnace 66.77mg/m3 ≦ 7.03t

discharge 2 / Naught

Glass Co. gas oxide 2# furnace 75.15mg/m3 200mg/m3 2# furnace：

through

Ltd 13.31t

chimney

Yellow

Crane Wuhan

Waste Indirect

Tower COD 1 plant 46mg/L ≦400mg/L 3.75t 11.07t/a Naught

water discharge

Distillery DW001

Co. Ltd.Yellow

Crane Wuhan

Waste Indirect

Tower NH3-N 1 plant 1.64mg/L ≦30mg/L 0.13t 4.05t/a Naught

water discharge

Distillery DW001

Co. Ltd.Yellow Organize

Crane d Wuhan

Waste Sulfur Dioxid

Tower discharge 1 plant ND ≦50mg/m3 / 2.3t/a Naught

gas e

Distillery through DA004

Co. Ltd. chimney

Yellow Organize

Crane d Wuhan

Waste

Tower Smoke discharge 1 plant 7.4mg/m3 ≦20mg/m3 0.0123t 0.5t/a Naught

gas

Distillery through DA004

Co. Ltd. chimney

Yellow

Waste Indirect Xianning

Crane COD 1 11.16 mg/L ≦400 mg/L 0.09851 t 6 t/a Naught

water discharge plant

Tower

~ 33 ~Interim Report 2023

Distillery

(Xianning)

Co. Ltd.Yellow

Crane

Tower Waste Ammonia Indirect Xianning

1 0.2 mg/L ≦30mg/L 0.001766 t 1 t/a Naught

Distillery gas nitrogen discharge plant

(Xianning)

Co. Ltd.Yellow

Crane

Tower Waste Indirect Suizhou

COD 1 33mg/L ≦400mg/L 0.97t 17.83t/a Naught

Distillery water discharge plant

(Suizhou)

Co. Ltd.Yellow

Crane

Tower Waste Indirect Suizhou

NH3-N 1 0.96mg/L ≦25mg/L 0.029t 91.783t/a Naught

Distillery water discharge plant

(Suizhou)

Co. Ltd.Yellow

Organize

Crane

d

Tower Waste Sulfur Dioxid Suizhou

discharge 1 ND ≦50mg/m3 / 0.634t/a Naught

Distillery gas e plant

through

(Suizhou)

chimney

Co. Ltd.Yellow

Organize

Crane

d

Tower Waste Nitrogen Suizhou ≦

discharge 1 50mg/m3 0.96t 2.966t/a Naught

Distillery gas oxide plant 200mg/m3

through

(Suizhou)

chimney

Co. Ltd.Yellow

Organize

Crane

d

Tower Waste Suizhou

Smoke discharge 1 9.43mg/m3 ≦20mg/m3 0.167t 0.382t/a Naught

Distillery gas plant

through

(Suizhou)

chimney

Co. Ltd.Anhui Organize

Waste Nitrogen

Mingguan d 1 10t boiler 36.7mg/m3 ≦50mg/m3 0.411t 2.128t Naught

gas oxide

g discharge

~ 34 ~Interim Report 2023

Distillery through

Co. Ltd. chimney

Anhui

Mingguan Outlet

Waste Indirect

g COD 1 outside the 35.75mg/L ≦400mg/L 1.446t 11.07t Naught

water discharge

Distillery plant

Co. Ltd.Anhui

Mingguan Outlet

Waste Ammonia Indirect

g 1 outside the 1.215mg/L ≦30mg/L 0.027t 0.18t Naught

water nitrogen discharge

Distillery plant

Co. Ltd.Treatment of pollutants

1. Sewage treatment

(1) The sewage treatment capacity of the sewage treatment station of the Zhangji plant of the Company is about 550 tons per day. IC

anaerobic jar improved A2/O and in-depth treatment process has been adopted. The sewage is discharged after treatment and up to

the standard and discharge of sewage is in compliance with the direct discharge requirements in GB27631-2011 Discharge Standard

of Water Pollutants for Fermentation Alcohol and Distilled Spirits Industry.

(2) The sewage treatment capacity of the sewage treatment station of the headquarter plant of the Company is about 4300 tons per

day. IC anaerobic jar A2/O and in-depth treatment process has been adopted. The sewage is discharged after treatment and up to the

standard and discharge of sewage is in compliance with the direct discharge requirements in GB27631-2011 Discharge Standard of

Water Pollutants for Fermentation Alcohol and Distilled Spirits Industry.

(3) The sewage treatment capacity of the sewage treatment station of the Gujing plant of the Company is about 2600 tons per day. IC

anaerobic jar A2/O and in-depth treatment process is adopted. The sewage is discharged after treatment and up to the standard and

discharge of sewage is in compliance with the direct discharge requirements in GB27631-2011 Discharge Standard of Water

Pollutants for Fermentation Alcohol and Distilled Spirits Industry.

(4) The production and domestic sewage of Longrui Glass is discharged into the sewage treatment station of the Zhangji Plant of the

Company and it is discharged after treatment and up to the standard.

(5) The production and domestic sewage of the Wuhan plant of Yellow Crane Tower Distillery is discharged into its comprehensive

sewage treatment station of which the sewage treatment capacity is about 150 tons per day. The sewage is discharged to South

Taizihu Sewage Treatment Plant after being treated with the AO treatment process to meet the standard. The discharge of sewage is in

compliance with the indirect discharge requirements in GB 27631-2011 Discharge Standard of Water Pollutants for Fermentation

Alcohol and Distilled Spirits Industry.

(6) The design value of the sewage treatment capacity of the sewage treatment station of the Xianning plant of Yellow Crane Tower

Distillery is 100 tons per day and the actual average discharge value is 40 tons per day. Secondary A/O treatment process has been

adopted. The sewage is discharged after treatment and up to the standard and discharge of sewage is in compliance with the indirect

discharge requirements in GB 27631-2011 Discharge Standard of Water Pollutants for Fermentation Alcohol and Distilled Spirits

Industry.

(7) The sewage treatment capacity of the sewage treatment station of the Suizhou plant of Yellow Crane Tower Distillery is about 200

tons per day. IC anaerobic jar A2/O and in-depth treatment process has been adopted. The sewage is discharged after treatment and

up to the standard and discharge of sewage is in compliance with the indirect discharge requirements in GB27631-2011 Discharge

Standard of Water Pollutants for Fermentation Alcohol and Distilled Spirits Industry. It also meets the water intake indicators of

~ 35 ~Interim Report 2023

Suizhou Urban Sewage Treatment Plant and is discharged to Suizhou Urban Sewage Treatment Plant.

(8) The sewage treatment capacity of the sewage treatment station of Mingguang Distillery is about 500 tons per day. The sewage is

discharged after treatment and up to the standard and discharge of sewage is in compliance with the indirect discharge requirements

in GB27631-2011 Discharge Standard of Water Pollutants for Fermentation Alcohol and Distilled Spirits Industry.

2. Waste gas treatment

(1) The flue gas control facilities of thermal power stations of the headquarter and Gujing plants run well and waste gas is discharged

through the 65-meter-tall exhaust funnel after the waste gas treatment is up to the standard adopting the process of cloth-bag dust

removal + Limestone - Wet flue gas Desulfurization+ SNCR Denitrification by non-catalytic reduction + SCR Denitrification by

catalytic reduction + Wet electrostatic precipitator and discharge of flue gas meets the super-low discharge requirements (smoke

≤10mg/m3 SO2≤35mg/m3 NOx≤50mg/m3).

(2) The gas-fired boilers at the Zhangji plant operate in a steady manner and waste gas is discharged through the 20-meter-tall

exhaust funnel of which and discharge of flue gas meets the requirements for gas-fired boiler in GB13271-2014 Emission Standard

of Air Pollutants for Industrial Kiln and Furnace.

(3) 1# 2# furnace flue gas treatment facilities of Longrui Glass are operating well. For 1# furnace the company uses bag dust

removal + dry desulfurization + SCR catalytic reduction denitrification process. After it meets the standard the exhaust gas will be

discharged through a 48-meter high exhaust pipe. The flue gas emission is in line with the glass industry A-class enterprise emission

requirements as set out in Technical Guide for the Development of Emergency Emission Reduction Measures for Key Industries in

Heavy Pollution Weather (soot ≤ 10 mg/m3 SO2 ≤ 50 mg/m3 NOx ≤ 200 mg/m3). For 2# furnace the company adopts bag dust

removal + desulfurization tank + SCR low-temperature denitrification process and the exhaust gas is discharged through a 50-meter

high exhaust pipe after it meets the standard. The flue gas emission meets the glass industry A-class enterprise emission requirements

as set out in Technical Guide for the Development of Emergency Emission Reduction Measures for Key Industries in Heavy Pollution

Weather (soot ≤ 10 mg/m3 SO2 ≤ 50mg/m3 NOx ≤ 200 mg/m3).

(4) The coding machine exhaust gas treatment facilities of the finished product workshops of the headquarter and Gujing plants are

operating well. By adopting photocatalytic oxidation technology the flue gas emissions comply with the Table 1 standard

requirements of DB12/524-2014 Emission Standard for Industrial Enterprises Volatile Organic Compounds.

(5) The odor treatment facilities of the sewage treatment stations of the headquarter and Zhangji plants are operating well. By

adopting technologies like photocatalytic oxidation and activated carbon adsorption the discharge of waste gas meets the

requirements of the Discharge Standards for Odor Pollutants.

(6) The exhaust gas treatment facilities in the grain crushing and koji making workshops in the Wuhan plant of Yellow Crane Tower

Distillery are in good operation. Pulse dust collectors are used for dust control. The exhaust gas emission meets the requirements of

the Integrated Emission Standard of Air Pollutants (GB 16297-1996). The steam heat source machines of the low nitrogen

combustion equipment in the brewing workshops in Wuhan are in stable operation and the exhaust gas is discharged through

15-meter exhaust funnels. The exhaust gas emissions comply with the special emission limits for atmospheric pollutants - the gas

boiler standards in the Emission Standard of Air Pollutants for Industrial Kiln and Furnace (GB 13271-2014).

(7) The natural gas boilers in the Yellow Crane Tower (Xianning) plant are in stable operation. The exhaust gas is discharged through

15-meter high exhaust funnels and the exhaust gas emissions comply with the gas boiler standards in the Emission Standard of Air

Pollutants for Industrial Kiln and Furnace (GB 13271-2014). The odor control facilities of the sewage stations are in sound operation.UV photolysis oxygen + activated carbon adsorption technology are adopted. The exhaust gas emissions comply with the organized

emission standards in the Emission Standards for Odour Pollutants.

(8) The natural gas boilers in the Yellow Crane Tower (Suizhou) plant are in stable operation. The exhaust gas is discharged through

20-meter high exhaust funnels and the exhaust gas emissions comply with the gas boiler standards in the Emission Standard of Air

Pollutants for Industrial Kiln and Furnace (GB 13271-2014). The odor control facilities of the sewage stations are in sound operation

adopting technologies such as photocatalytic oxidation and spray washing and the exhaust gas emissions comply with the organized

~ 36 ~Interim Report 2023

emission standards in the Emission Standards for Odour Pollutants.

(9) The natural gas boilers of Mingguang Distillery are in stable operation. The exhaust gas is discharged through 15-meter high

exhaust funnels and the exhaust gas emissions comply with the gas boiler standards in the Emission Standard of Air Pollutants for

Industrial Kiln and Furnace (GB 13271-2014).

(10) The odor control facilities of the sewage stations of Mingguang Distillery are in sound operation. Technologies such as

photocatalytic oxidation are adopted. The exhaust gas is discharged through 15-meter high exhaust funnels and the exhaust gas

emissions comply with the organized emission standards in the Emission Standards for Odour Pollutants.In the first half of 2023 the environment protection facilities of the Company and its subsidiaries ran normally in general main

pollutants can achieve up-to-standard discharge environment information is opened to the public normally and they have performed

their social responsibilities properly.Emergency plan for sudden environment affairs

The Company has formulated the Emergency Plan of Anhui Gujing Distillery Company Limited for Sudden Environmental Pollution

Accidents (File No. 341602-2021-006-H) which has been filed with Bureau of Ecology and Environment of Bozhou. Emergency

plan drills have been carried out as planned.Longrui Glass has formulated the Emergency Plan of Anhui Longrui Glass Co. Ltd for Sudden Environmental Issues which has

been filed with Bureau of Ecology and Environment of Bozhou (File No. 341602-2021-006-M). Emergency plan drills have been

carried out as required.The Wuhan plant of Yellow Crane Tower Distillery has formulated the Emergency Plan of Yellow Crane Tower Distillery Co. Ltd for

Sudden Environmental Issues which has been filed with the Hanyang District branch of the Wuhan Municipal Ecology and

Environment Bureau (File No. 420105-2021-005-L). Emergency plan drills have been carried out as required.The plant of Yellow Crane Tower Distillery (Xianning) has formulated the Emergency Plan of Yellow Crane Tower Distillery

(Xianning) Co. Ltd for Sudden Environmental Issues which has been filed with the Xianning High-tech District branch of the

Xianning Municipal Environmental Protection Bureau (File No. 421201-2021-014-H). Emergency plan drills have been carried out

as required.The plant of Yellow Crane Tower Distillery (Suizhou) has signed a service contract (Contract No. SZ-HB-202208-0040) with a

third-party technical unit regarding the emergency plan for sudden environmental issues which is in preparation.Mingguang Distillery has formulated the Emergency Plan of Anhui Mingguang Distillery Co. Ltd. for Sudden Environmental Issues

which has been filed with the Mingguang Municipal Ecology and Environment Sub-Bureau (File No. 341182-2021-031-M).Emergency plan drills have been carried out as required.Input in environment governance and protection and payment of environmental protection tax

In the first half of 2023 the input in environment governance and protection for the Company and its subsidiaries was RMB16.8032

million and payment of environmental protection tax was RMB84.6 thousand.Environmental self-monitoring scheme

The Company and its subsidiaries have formulated their environmental self-monitoring schemes and published them on the local

websites for self-monitoring information disclosure.Administrative penalties imposed for environmental issues during the Reporting Period

Influence on

Rectification

Name Reason Case Result production and

measures

operation

Naught N/A N/A N/A N/A N/A

Other environment information that should be disclosed

~ 37 ~Interim Report 2023

Naught

Measures taken to decrease carbon emission in the Reporting Period and corresponding effects

□ Applicable □ Not applicable

1. Balanced production of thermal power plant: In order to improve the operation efficiency of a boiler and reduce carbon emission

balanced production was conducted in Gujing plant area. After the execution of balanced production the efficiency of coal burning

was increased by 13% reducing carbon dioxide emission by approximately 5000 tons/year.

2. Intensified power conservation of the Company:

(1) The Company organized 440 battery-driven vehicles of various types and various entities for peak-shifting charge.

(2) The Company conserved power in offices sufficiently utilized natural light and prohibited lamps from shining all the time

replaced lamps in passageways with sound-controlled types and strictly implemented the requirements of temperature setting on

air-conditioners.

(3) The Company conserved power used by street lamps and strictly specified turn-off and turn-on time; through the

above-mentioned measures power wasted in offices has been greatly reduced which has played an active role in the energy

conservation and carbon reduction of the Company.Other related environment protection information

Naught

II Social Responsibility

During the Reporting Period the Company in strict accordance with the requirements for high-quality development of listed

companies in the new era focused on its established strategies actively responded to the expectations of society shareholders and

other stakeholders continuously improved its corporate governance structure standardized its operations attached importance to

investor relations and took the initiative to fulfill its social responsibilities in the areas of protection of the rights and interests of

suppliers customers and employees and environmental protection and sustainable development. The Company upholds the core

values of "Be Honest Offer Quality Liquor Be Stronger and Be Helpful to the Society" actively builds and develops strategic

partnerships with suppliers and customers. Also the Company focuses on communication and coordination with all relevant parties

jointly builds a platform of trust and cooperation and effectively fulfills the Company's social responsibility to suppliers and

customers.The Company has continuously consolidated its quality management foundation and improved customer service mechanisms. Aside

from attaching great importance to green production and discharge compliance it has constantly created new green products and

implemented innovative energy-conservation and emission-reduction technologies. The Company builds dynamic teams through

talent development protects employees' rights and interests optimizes talent teams and boosts diversified development. Also it has

constantly enhanced the management of workplace safety as well as the inspection of employees' occupational and health risks

thereby creating a diverse safe and harmonious working environment.~ 38 ~Interim Report 2023

Part VI Significant Events

I Commitments of the Company’s De Facto Controller Shareholders Related Parties and

Acquirers as well as the Company Itself and Other Entities Fulfilled in the Reporting Period

or Ongoing at the Period-End

□ Applicable □ Not applicable

No such cases in the Reporting Period.II Occupation of the Company’s Capital by the Controlling Shareholder or any of Its Related

Parties for Non-Operating Purposes

□ Applicable □ Not applicable

No such cases in the Reporting Period.III Irregularities in the Provision of Guarantees

□ Applicable □ Not applicable

No such cases in the Reporting Period.IV Engagement and Disengagement of Independent Auditor

Are the interim financial statements audited?

□ Yes □ No

The interim financial statements have not been audited.V Explanations Given by the Board of Directors and the Supervisory Committee Regarding

the Independent Auditor's “Modified Opinion” on the Financial Statements of the Reporting

Period

□ Applicable □ Not applicable

VI Explanations Given by the Board of Directors Regarding the Independent Auditor's

“Modified Opinion” on the Financial Statements of Last Year

□ Applicable □ Not applicable

VII Insolvency and Reorganization

□ Applicable □ Not applicable

No such cases in the Reporting Period.~ 39 ~Interim Report 2023

VIII Legal Matters

Significant lawsuits and arbitrations:

□ Applicable □ Not applicable

No such cases in the Reporting Period.Other legal matters:

□ Applicable □ Not applicable

IX Punishments and Rectifications

□ Applicable □ Not applicable

X Credit Quality of the Company as well as its Controlling Shareholder and De Facto

Controller

□ Applicable □ Not applicable

XI Major Related-Party Transactions

1. Continuing Related-Party Transactions

□ Applicable □ Not applicable

No such cases in the Reporting Period.

2. Related-Party Transactions Regarding Purchase or Disposal of Assets or Equity Investments

□ Applicable □ Not applicable

No such cases in the Reporting Period.

3. Related-Party Transactions Regarding Joint Investments in Third Parties

□ Applicable □ Not applicable

No such cases in the Reporting Period.

4. Amounts Due to and from Related Parties

□ Applicable □ Not applicable

No such cases in the Reporting Period.

5. Transactions with Related Finance Companies or Finance Companies Controlled by the Company

□ Applicable □ Not applicable

The Company did not make deposits in receive loans or credit from and was not involved in any other finance business with any

related finance company finance company controlled by the Company or any other related parties.~ 40 ~Interim Report 2023

6. Transactions between Related Parties and Finance Companies Controlled by the Company

□ Applicable □ Not applicable

No related parties made deposits in received loans or credit from and were involved in any other finance business with any finance

company controlled by the Company.

7. Other Major Related-Party Transactions

□ Applicable □ Not applicable

No such cases in the Reporting Period.XII Major Contracts and Execution thereof

1. Entrustment Contracting and Leases

(1) Entrustment

□ Applicable □ Not applicable

No such cases in the Reporting Period.

(2) Contracting

□ Applicable □ Not applicable

No such cases in the Reporting Period.

(3) Leases

□ Applicable □ Not applicable

No such cases in the Reporting Period.

2. Major Guarantees

□ Applicable □ Not applicable

No such cases in the Reporting Period.

3. Cash Entrusted for Wealth Management

□ Applicable □ Not applicable

Unit: RMB’0000

Unrecovered

Unrecovered overdue amount

Specific type Capital resources Amount incurred Undue balance

overdue amount with provision for

impairment

~ 41 ~Interim Report 2023

Bank financial

Self-owned funds 175000.00 175000.00 0.00 0.00

products

Others Self-owned funds 20000.00 0.00 0.00 0.00

Total 195000.00 175000.00 0.00 0.00

High-risk wealth management transactions with a significant single amount low security or low liquidity:

□ Applicable □ Not applicable

Situation where the principal is expectedly irrecoverable or an impairment may be incurred:

□ Applicable □ Not applicable

4. Other Significant Contracts

□ Applicable □ Not applicable

No such cases in the Reporting Period.XIII Other Significant Events

□ Applicable □ Not applicable

No such cases in the Reporting Period.XIV Significant Events of Subsidiaries

□ Applicable □ Not applicable

~ 42 ~Interim Report 2023

Part VII Share Changes and Shareholder Information

I Share Changes

1. Share Changes

Unit: share

Before Increase/decrease (+/-) After

Percentage New Shares as Shares as Percentage

Shares Other Subtotal Shares

(%) issues dividend dividend (%)

converted converted

I. Restricted shares

from from

1. Shares held by the state profit capital

reserves

2. Shares held by

state-owned corporations

3. Shares held by other

domestic investors

Among which: Shares held

by domestic corporations

Shares

held by domestic

individuals

4. Shares held by foreign

investors

Among which: Shares held

by foreign corporations

Shares

held by foreign individuals

II. Non-restricted shares 528600000 100.00% 528600000 100.00%

1. RMB ordinary shares 408600000 77.30% 408600000 77.30%

2. Domestically listed

12000000022.70%12000000022.70%

foreign shares

3. Overseas listed foreign

shares

4. Other

III. Total shares 528600000 100.00% 528600000 100.00%

~ 43 ~Interim Report 2023

Reasons for share changes:

□ Applicable □ Not applicable

Approval of share changes:

□ Applicable □ Not applicable

Transfer of share ownership:

□ Applicable □ Not applicable

Progress on any share repurchase:

□ Applicable □ Not applicable

Progress on reducing the repurchased shares by means of centralized bidding:

□ Applicable □ Not applicable

Effects of share changes on the basic and diluted earnings per share equity per share attributable to the Company’s ordinary

shareholders and other financial indicators of the prior year and the prior accounting period respectively:

□ Applicable □ Not applicable

Other information that the Company considers necessary or is required by the securities regulator to be disclosed:

□ Applicable □ Not applicable

2. Changes in Restricted Shares

□ Applicable □ Not applicable

II Issuance and Listing of Securities

□ Applicable □ Not applicable

III Shareholders and Their Shareholdings at the Period-End

Unit: share

Number of ordinary Number of preferred shareholders with

275330

shareholders resumed voting rights (if any) (see note 8)

5% or greater ordinary shareholders or the top 10 ordinary shareholders

Total Shares in pledge

Restricted

ordinary Increase/decrease Non-restricted marked or frozen

Name of Nature of Shareholding ordinary

shares held in the Reporting ordinary shares

shareholder shareholder percentage shares

at the Period held Status Shares

held

period-end

ANHUI GUJING

GROUP State-owned In

51.07%26996932226996932230000000

COMPANY legal person pledge

LIMITED

BANK OF

CHINA-CHINA Other 1.90% 10043104 10043104

MERCHANTS

~ 44 ~Interim Report 2023

CHINA

SECURITIES

BAIJIU INDEX

CLASSIFICATION

SECURITIES

INVESTMENT

FUND

HONG KONG

SECURITIES Foreign legal

1.89%1000638210006382

CLEARING person

COMPANY LTD.INDUSTRIAL

AND

COMMERCIAL

BANK OF CHINA

LIMITED-

INVESCO GREAT

WALL Other 1.89% 9999951 9999951

EMERGING

GROWTH

HYBRID

SECURITIES

INVESTMENT

FUND

GAOLING Foreign legal

1.71%90150029015002

FUNDL.P. person

AGRICULTURAL

BANK OF CHINA

－ E FUND

CONSUMPTION

Other 1.64% 8666908 8666908

SECTOR STOCK

SECURITIES

INVESTMENT

FUND

CHINA

INTERNATIONAL

CAPITAL Foreign legal

1.43%75398637539863

CORPORATION person

HONG KONG

SECURITIES LTD

UBS (LUX) Foreign legal

1.30%68966616896661

EQUITY FUND - person

~ 45 ~Interim Report 2023

CHINA

OPPORTUNITY

(USD)

GREENWOODS

Foreign legal

CHINA ALPHA 1.14% 6020760 6020760

person

MASTER FUND

BANK OF

CHINA-

INVESCO GREAT

WALL DINGYI

Other 0.95% 5017603 5017603

HYBRID

SECURITIES

INVESTMENT

FUND (LOF)

Strategic investor or general legal

person becoming a top-10 ordinary

N/A

shareholder due to rights issue (if

any) (see note 3)

Among the shareholders above the Company’s controlling shareholder—Anhui Gujing Group

Company Limited—is not a related party of other shareholders; nor are they parties acting in

Related or acting-in-concert concert as defined in the Administrative Measures on Information Disclosure of Changes in

parties among the shareholders Shareholding of Listed Companies. As for the other shareholders the Company does not know

above whether they are related parties or whether they belong to parties acting in concert as defined in

the Administrative Measures on Information Disclosure of Changes in Shareholding of Listed

Companies.Explain if any of the shareholders

above was involved in

entrusting/being entrusted with N/A

voting rights or waiving voting

rights

Special account for share

repurchases (if any) among the top N/A

10 shareholders (see note 11)

Top 10 non-restricted ordinary shareholders

Shares by type

Name of shareholder Non-restricted shares held at the period-end

Type Shares

ANHUI GUJING GROUP RMB-denominated

269969322269969322

COMPANY LIMITED ordinary share

BANK OF CHINA-CHINA

RMB-denominated

MERCHANTS CHINA 10043104 10043104

ordinary share

SECURITIES BAIJIU INDEX

~ 46 ~Interim Report 2023

CLASSIFICATION SECURITIES

INVESTMENT FUND

HONG KONG SECURITIES RMB-denominated

1000638210006382

CLEARING COMPANY LTD. ordinary share

INDUSTRIAL AND

COMMERCIAL BANK OF

CHINA LIMITED- INVESCO

RMB-denominated

GREAT WALL EMERGING 9999951 9999951

ordinary share

GROWTH HYBRID

SECURITIES INVESTMENT

FUND

Domestically

GAOLING FUNDL.P. 9015002 9015002

listed foreign share

AGRICULTURAL BANK OF

CHINA － E FUND

RMB-denominated

CONSUMPTION SECTOR 8666908 8666908

ordinary share

STOCK SECURITIES

INVESTMENT FUND

CHINA INTERNATIONAL

Domestically

CAPITAL CORPORATION 7539863 7539863

listed foreign share

HONG KONG SECURITIES LTD

UBS (LUX) EQUITY FUND - Domestically

68966616896661

CHINA OPPORTUNITY (USD) listed foreign share

GREENWOODS CHINA ALPHA Domestically

60207606020760

MASTER FUND listed foreign share

BANK OF CHINA- INVESCO

GREAT WALL DINGYI HYBRID RMB-denominated

50176035017603

SECURITIES INVESTMENT ordinary share

FUND (LOF)

Among the shareholders above the Company’s controlling shareholder—Anhui Gujing Group

Related or acting-in-concert

Company Limited—is not a related party of other shareholders; nor are they parties acting in

parties among top 10 unrestricted

concert as defined in the Administrative Measures on Information Disclosure of Changes in

ordinary shareholders as well as

Shareholding of Listed Companies. As for the other shareholders the Company does not know

between top 10 unrestricted

whether they are related parties or whether they belong to parties acting in concert as defined in

ordinary shareholders and top 10

the Administrative Measures on Information Disclosure of Changes in Shareholding of Listed

ordinary shareholders

Companies.Top 10 ordinary shareholders Since October 2021 the Company's controlling shareholder Gujing Group has conducted the

involved in securities margin business of "Refinancing by Lending Securities" and as of 30 June 2023 1434700 lent shares

trading (if any) (see note 4) were outstanding with no transfer of the ownership of these shares.Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary shareholders of the

Company conducted any promissory repo during the Reporting Period.~ 47 ~Interim Report 2023

□ Yes □ No

No such cases in the Reporting Period.IV Change in Shareholdings of Directors Supervisors and Senior Management

□ Applicable □ Not applicable

No changes occurred to the shareholdings of the directors supervisors and senior management in the Reporting Period. See the 2022

Annual Report for more details.V Change of the Controlling Shareholder or the De Facto Controller

Change of the controlling shareholder in the Reporting Period

□ Applicable □ Not applicable

No such cases in the Reporting Period.Change of the de facto controller in the Reporting Period

□ Applicable □ Not applicable

No such cases in the Reporting Period.~ 48 ~Interim Report 2023

Part VIII Preference Shares

□ Applicable □ Not applicable

No preference shares in the Reporting Period.~ 49 ~Interim Report 2023

Part IX Bonds

□ Applicable □ Not applicable

~ 50 ~Interim Report 2023

Part X Financial Statements

I Independent Auditor’s Report

Are these interim financial statements audited by an independent auditor?

□ Yes □ No

These interim financial statements have not been audited by an independent auditor.II Financial Statements

Currency unit for the financial statements and the notes thereto: RMB

1. Consolidated Balance Sheet

Prepared by Anhui Gujing Distillery Company Limited

30 June 2023

Unit: RMB

Item 30 June 2023 1 January 2023

Current assets:

Monetary assets 16852310217.36 13772561141.30

Settlement reserve

Interbank loans granted

Held-for-trading financial assets 1790678478.17 1782687769.66

Derivative financial assets

Notes receivable

Accounts receivable 101188559.18 62688668.94

Accounts receivable financing 835279520.98 217419441.32

Prepayments 98003390.46 233995661.69

Premiums receivable

Reinsurance receivables

Receivable reinsurance contract

reserve

Other receivables 65401034.51 73337415.74

Including: Interest receivable

Dividends receivable

Financial assets purchased under

resale agreements

Inventories 6175047719.12 6058106090.88

Contract assets 546215.81 1855188.15

Assets held for sale

~ 51 ~Interim Report 2023

Current portion of non-current assets

Other current assets 106351403.36 125568725.51

Total current assets 26024806538.95 22328220103.19

Non-current assets:

Loans and advances to customers

Investments in debt obligations

Investments in other debt obligations

Long-term receivables

Long-term equity investments 10200382.24 10154235.98

Investments in other equity

60753939.2856447789.94

instruments

Other non-current financial assets

Investment property 48535817.21 13396881.96

Fixed assets 2917327570.54 2741844586.30

Construction in progress 3007948340.56 2454703251.44

Productive living assets

Oil and gas assets

Right-of-use assets 25290923.22 32562171.10

Intangible assets 1118011558.93 1108125157.05

Development costs

Goodwill 561364385.01 561364385.01

Long-term prepaid expense 45675216.78 51012977.31

Deferred income tax assets 559368861.45 425120227.37

Other non-current assets 5834000.00 6870532.00

Total non-current assets 8360310995.22 7461602195.46

Total assets 34385117534.17 29789822298.65

Current liabilities:

Short-term borrowings 0.00 83232176.31

Borrowings from the central bank

Interbank loans obtained

Held-for-trading financial liabilities

Derivative financial liabilities

Notes payable 212480000.00 695740000.00

Accounts payable 1856969204.46 2054063559.15

Advances from customers

Contract liabilities 3025229971.79 826636478.35

Financial assets sold under repurchase

agreements

Customer deposits and interbank

deposits

Payables for acting trading of

~ 52 ~Interim Report 2023

securities

Payables for underwriting of securities

Employee benefits payable 876644424.31 795138305.63

Taxes payable 1032068219.10 1205028130.02

Other payables 4527536360.10 3261763838.80

Including: Interest payable

Dividends payable 1585800000.00 0.00

Handling charges and commissions

payable

Reinsurance payables

Liabilities directly associated with

assets held for sale

Current portion of non-current

9907322.5442237345.11

liabilities

Other current liabilities 1667679631.26 1044664441.58

Total current liabilities 13208515133.56 10008504274.95

Non-current liabilities:

Insurance contract reserve

Long-term borrowings 179053388.89 44944737.91

Bonds payable

Including: Preferred shares

Perpetual bonds

Lease liabilities 13441957.10 18631395.93

Long-term payables

Long-term employee benefits payable

Provisions

Deferred income 100910143.95 103714978.95

Deferred income tax liabilities 293098621.11 281173154.70

Other non-current liabilities

Total non-current liabilities 586504111.05 448464267.49

Total liabilities 13795019244.61 10456968542.44

Owners’ equity:

Share capital 528600000.00 528600000.00

Other equity instruments

Including: Preferred shares

Perpetual bonds

Capital reserves 6224747667.10 6224747667.10

Less: Treasury stock

Other comprehensive income 658883.79 408739.61

Specific reserve

Surplus reserves 269402260.27 269402260.27

General reserve

~ 53 ~Interim Report 2023

Retained earnings 12691273674.05 11497599306.54

Total equity attributable to owners of the

19714682485.2118520757973.52

Company as the parent

Non-controlling interests 875415804.35 812095782.69

Total owners’ equity 20590098289.56 19332853756.21

Total liabilities and owners’ equity 34385117534.17 29789822298.65

Legal representative: Liang Jinhui The Company’s chief accountant: Zhu Jiafeng

Head of the Company’s financial department: Zhu Jiafeng

2. Balance Sheet of the Company as the Parent

Unit: RMB

Item 30 June 2023 1 January 2023

Current assets:

Monetary assets 8314231562.07 7338284192.52

Held-for-trading financial assets 1790678478.17 1267195966.38

Derivative financial assets

Notes receivable

Accounts receivable

Accounts receivable financing 763560940.83 233465242.96

Prepayments 50463721.87 39599180.34

Other receivables 315299233.76 202279154.63

Including: Interest receivable

Dividends receivable

Inventories 4757417302.70 4670562760.80

Contract assets

Assets held for sale

Current portion of non-current assets

Other current assets 49404468.34 63929024.28

Total current assets 16041055707.74 13815315521.91

Non-current assets:

Investments in debt obligations

Investments in other debt obligations

Long-term receivables

Long-term equity investments 1602792715.28 1586749613.68

Investments in other equity

instruments

Other non-current financial assets

Investment property 48535817.21 13396881.96

Fixed assets 1823715954.46 1715114776.31

~ 54 ~Interim Report 2023

Construction in progress 2369477803.71 1597185086.35

Productive living assets

Oil and gas assets

Right-of-use assets 24512082.87 31004490.39

Intangible assets 495965895.33 483601950.48

Development costs

Goodwill

Long-term prepaid expense 13739526.29 22817228.71

Deferred income tax assets 36402716.22 28512224.61

Other non-current assets

Total non-current assets 6415142511.37 5478382252.49

Total assets 22456198219.11 19293697774.40

Current liabilities:

Short-term borrowings

Held-for-trading financial liabilities

Derivative financial liabilities

Notes payable

Accounts payable 978174656.49 950887301.03

Advances from customers

Contract liabilities 1499003266.18 3432162.83

Employee benefits payable 345823740.08 276482563.00

Taxes payable 528967559.45 548241724.13

Other payables 2312285403.33 726494649.90

Including: Interest payable

Dividends payable 1585800000.00 0.00

Liabilities directly associated with

assets held for sale

Current portion of non-current

9082789.9510574121.12

liabilities

Other current liabilities 202536122.23 16403036.11

Total current liabilities 5875873537.71 2532515558.12

Non-current liabilities:

Long-term borrowings

Bonds payable

Including: Preferred shares

Perpetual bonds

Lease liabilities 13441957.10 18631395.93

Long-term payables

Long-term employee benefits payable

Provisions

Deferred income 37839957.48 38926909.02

~ 55 ~Interim Report 2023

Deferred income tax liabilities 52487213.61 43726162.12

Other non-current liabilities

Total non-current liabilities 103769128.19 101284467.07

Total liabilities 5979642665.90 2633800025.19

Owners’ equity:

Share capital 528600000.00 528600000.00

Other equity instruments

Including: Preferred shares

Perpetual bonds

Capital reserves 6176504182.20 6176504182.20

Less: Treasury stock

Other comprehensive income -1662634.78 -529354.77

Specific reserve

Surplus reserves 264300000.00 264300000.00

Retained earnings 9508814005.79 9691022921.78

Total owners’ equity 16476555553.21 16659897749.21

Total liabilities and owners’ equity 22456198219.11 19293697774.40

3. Consolidated Income Statement

Unit: RMB

Item H1 2023 H1 2022

1. Revenue 11310016495.10 9002005923.42

Including: Operating revenue 11310016495.10 9002005923.42

Interest income

Insurance premium income

Handling charge and

commission income

2. Costs and expenses 7533156217.79 6352382128.23

Including: Cost of sales 2388610838.28 2023003861.36

Interest expense

Handling charge and

commission expense

Surrenders

Net insurance claims paid

Net amount provided as

insurance contract reserve

Expenditure on policy

dividends

Reinsurance premium

expense

Taxes and surcharges 1605442141.06 1276738897.80

~ 56 ~Interim Report 2023

Selling expense 3048015143.61 2595105420.46

Administrative expense 583974559.37 559320542.66

R&D expense 29964175.22 27837365.94

Finance costs -122850639.75 -129623959.99

Including: Interest

771499.922498008.94

expense

Interest

122996635.75131378962.32

income

Add: Other income 27104577.88 26209081.15

Return on investment (“-” for loss) -27346113.37 -17449121.42

Including: Share of profit or loss

46146.26144074.52

of joint ventures and associates

Income from the

derecognition of financial assets at

amortized cost (“-” for loss)

Exchange gain (“-” for loss)

Net gain on exposure hedges (“-”

for loss)

Gain on changes in fair value (“-”

25168981.30318569.02

for loss)

Credit impairment loss (“-” for

84454.20-1258781.36

loss)

Asset impairment loss (“-” for

-17556673.874343131.74

loss)

Asset disposal income (“-” for

203366.67191652.74

loss)

3. Operating profit (“-” for loss) 3784518870.12 2661978327.06

Add: Non-operating income 44676493.06 24988936.35

Less: Non-operating expense 20358442.79 8351463.17

4. Profit before tax (“-” for loss) 3808836920.39 2678615800.24

Less: Income tax expense 964656318.72 706053183.61

5. Net profit (“-” for net loss) 2844180601.67 1972562616.63

5.1 By operating continuity

5.1.1 Net profit from continuing

2844180601.671972562616.63

operations (“-” for net loss)

5.1.2 Net profit from discontinued

operations (“-” for net loss)

5.2 By ownership

5.2.1 Net profit attributable to

shareholders of the Company as the 2779474367.51 1918821503.75

parent (“-” for net loss)

~ 57 ~Interim Report 2023

5.2.1 Net profit attributable to

64706234.1653741112.88

non-controlling interests (“-” for net loss)

6. Other comprehensive income net of

1494571.292228819.05

tax

Attributable to owners of the

250144.181836134.17

Company as the parent

6.1 Items that will not be

1937767.20911837.54

reclassified to profit or loss

6.1.1 Changes caused by

remeasurements on defined benefit

schemes

6.1.2 Other comprehensive

income that will not be reclassified to

profit or loss under the equity method

6.1.3 Changes in the fair value of

1937767.20911837.54

investments in other equity instruments

6.1.4 Changes in the fair value

arising from changes in own credit risk

6.1.5 Other

6.2 Items that will be reclassified to

-1687623.02924296.63

profit or loss

6.2.1 Other comprehensive

income that will be reclassified to profit

or loss under the equity method

6.2.2 Changes in the fair value of

investments in other debt obligations

6.2.3 Other comprehensive

income arising from the reclassification -1687623.02 924296.63

of financial assets

6.2.4 Credit impairment

allowance for investments in other debt

obligations

6.2.5 Reserve for cash flow

hedges

6.2.6 Differences arising from the

translation of foreign

currency-denominated financial

statements

6.2.7 Other

Attributable to non-controlling

1244427.11392684.88

interests

7. Total comprehensive income 2845675172.96 1974791435.68

Attributable to owners of the

2779724511.691920657637.92

Company as the parent

~ 58 ~Interim Report 2023

Attributable to non-controlling

65950661.2754133797.76

interests

8. Earnings per share

8.1 Basic earnings per share 5.26 3.63

8.2 Diluted earnings per share 5.26 3.63

Legal representative: Liang Jinhui The Company’s chief accountant: Zhu Jiafeng

Head of the Company’s financial department: Zhu Jiafeng

4. Income Statement of the Company as the Parent

Unit: RMB

Item H1 2023 H1 2022

1. Operating revenue 5688977006.98 4472856893.79

Less: Cost of sales 2033053131.03 1613199963.51

Taxes and surcharges 1375276190.77 1082081569.06

Selling expense 18124000.75 29981877.64

Administrative expense 390026657.42 371905439.74

R&D expense 11525750.69 11378186.74

Finance costs -90964543.78 -75657865.69

Including: Interest expense 637086.51 847873.69

Interest income 91541910.22 76111832.12

Add: Other income 1828952.83 4509784.26

Return on investment (“-” for loss) -18401784.46 -17430120.00

Including: Share of profit or loss

43101.600.00

of joint ventures and associates

Income from the

derecognition of financial assets at

amortized cost (“-” for loss)

Net gain on exposure hedges (“-”

for loss)

Gain on changes in fair value (“-”

25168981.30318569.02

for loss)

Credit impairment loss (“-” for

148348.99-165730.36

loss)

Asset impairment loss (“-” for

-17141448.761913585.91

loss)

Asset disposal income (“-” for

14302.240.00

loss)

2. Operating profit (“-” for loss) 1943553172.24 1429113811.62

Add: Non-operating income 15599716.85 18141888.35

Less: Non-operating expense 17213516.15 5121167.93

~ 59 ~Interim Report 2023

3. Profit before tax (“-” for loss) 1941939372.94 1442134532.04

Less: Income tax expense 538348288.93 358374033.46

4. Net profit (“-” for net loss) 1403591084.01 1083760498.58

4.1 Net profit from continuing

1403591084.011083760498.58

operations (“-” for net loss)

4.2 Net profit from discontinued

operations (“-” for net loss)

5. Other comprehensive income net of

-1133280.01109851.14

tax

5.1 Items that will not be reclassified

to profit or loss

5.1.1 Changes caused by

remeasurements on defined benefit

schemes

5.1.2 Other comprehensive income

that will not be reclassified to profit or

loss under the equity method

5.1.3 Changes in the fair value of

investments in other equity instruments

5.1.4 Changes in the fair value

arising from changes in own credit risk

5.1.5 Other

5.2 Items that will be reclassified to

-1133280.01109851.14

profit or loss

5.2.1 Other comprehensive income

that will be reclassified to profit or loss

under the equity method

5.2.2 Changes in the fair value of

investments in other debt obligations

5.2.3 Other comprehensive income

arising from the reclassification of -1133280.01 109851.14

financial assets

5.2.4 Credit impairment allowance

for investments in other debt obligations

5.2.5 Reserve for cash flow hedges

5.2.6 Differences arising from the

translation of foreign

currency-denominated financial

statements

5.2.7 Other

6. Total comprehensive income 1402457804.00 1083870349.72

7. Earnings per share

7.1 Basic earnings per share 2.66 2.05

~ 60 ~Interim Report 2023

7.2 Diluted earnings per share 2.66 2.05

5. Consolidated Cash Flow Statement

Unit: RMB

Item H1 2023 H1 2022

1. Cash flows from operating activities:

Proceeds from sale of commodities

12967342850.8110536436947.68

and rendering of services

Net increase in customer deposits and

interbank deposits

Net increase in borrowings from the

central bank

Net increase in loans from other

financial institutions

Premiums received on original

insurance contracts

Net proceeds from reinsurance

Net increase in deposits and

investments of policy holders

Interest handling charges and

commissions received

Net increase in interbank loans

obtained

Net increase in proceeds from

repurchase transactions

Net proceeds from acting trading of

securities

Tax rebates 1875811.35 3593014.59

Cash generated from other operating

1056647876.21416874433.62

activities

Subtotal of cash generated from

14025866538.3710956904395.89

operating activities

Payments for commodities and

2160026046.331429207252.95

services

Net increase in loans and advances to

customers

Net increase in deposits in the central

bank and in interbank loans granted

Payments for claims on original

insurance contracts

Net increase in interbank loans granted

Interest handling charges and

~ 61 ~Interim Report 2023

commissions paid

Policy dividends paid

Cash paid to and for employees 1885616624.31 1636020699.63

Taxes paid 3995204357.05 2928271586.95

Cash used in other operating activities 1257182813.95 772158056.57

Subtotal of cash used in operating

9298029841.646765657596.10

activities

Net cash generated from/used in

4727836696.734191246799.79

operating activities

2. Cash flows from investing activities:

Proceeds from disinvestment 760098239.02 4587477639.71

Return on investment 1221108.96 1067121.16

Net proceeds from the disposal of

fixed assets intangible assets and other 276793.00 1244063.80

long-lived assets

Net proceeds from the disposal of

subsidiaries and other business units

Cash generated from other investing

activities

Subtotal of cash generated from

761596140.984589788824.67

investing activities

Payments for the acquisition of fixed

assets intangible assets and other 1027930984.35 714217547.21

long-lived assets

Payments for investments 720000000.00 1464575094.67

Net increase in pledged loans granted

Net payments for the acquisition of

13439262.050.00

subsidiaries and other business units

Cash used in other investing activities

Subtotal of cash used in investing

1761370246.402178792641.88

activities

Net cash generated from/used in

-999774105.422410996182.79

investing activities

3. Cash flows from financing activities:

Capital contributions received 4000000.00 0.00

Including: Capital contributions by

4000000.000.00

non-controlling interests to subsidiaries

Borrowings raised 134000000.00 20000000.00

Cash generated from other financing

activities

Subtotal of cash generated from

138000000.0020000000.00

financing activities

Repayment of borrowings 113000000.00 94851054.01

~ 62 ~Interim Report 2023

Interest and dividends paid 7626554.97 1166060059.13

Including: Dividends paid by

5304511.690.00

subsidiaries to non-controlling interests

Cash used in other financing activities 8506249.20 9257885.61

Subtotal of cash used in financing

129132804.171270168998.75

activities

Net cash generated from/used in

8867195.83-1250168998.75

financing activities

4. Effect of foreign exchange rates

changes on cash and cash equivalents

5. Net increase in cash and cash

3736929787.145352073983.83

equivalents

Add: Cash and cash equivalents

13105373435.226057550178.60

beginning of the period

6. Cash and cash equivalents end of the

16842303222.3611409624162.43

period

6. Cash Flow Statement of the Company as the Parent

Unit: RMB

Item H1 2023 H1 2022

1. Cash flows from operating activities:

Proceeds from sale of commodities

9423877589.299789484776.84

and rendering of services

Tax rebates

Cash generated from other operating

684649476.89849250330.86

activities

Subtotal of cash generated from

10108527066.1810638735107.70

operating activities

Payments for commodities and

1600410168.911357709777.54

services

Cash paid to and for employees 579079631.71 535086542.33

Taxes paid 2341187694.15 1871802206.80

Cash used in other operating activities 3320490019.02 5008612241.81

Subtotal of cash used in operating

7841167513.798773210768.48

activities

Net cash generated from/used in

2267359552.391865524339.22

operating activities

2. Cash flows from investing activities:

Proceeds from disinvestment 210098239.02 4436593245.00

Return on investment 92948040.53 78111847.94

Net proceeds from the disposal of

14800.000.00

fixed assets intangible assets and other

~ 63 ~Interim Report 2023

long-lived assets

Net proceeds from the disposal of

subsidiaries and other business units

Cash generated from other investing

activities

Subtotal of cash generated from

303061079.554514705092.94

investing activities

Payments for the acquisition of fixed

assets intangible assets and other 854427751.14 592574549.94

long-lived assets

Payments for investments 719000000.00 713900000.00

Net payments for the acquisition of

13439262.050.00

subsidiaries and other business units

Cash used in other investing activities

Subtotal of cash used in investing

1586867013.191306474549.94

activities

Net cash generated from/used in

-1283805933.643208230543.00

investing activities

3. Cash flows from financing activities:

Capital contributions received

Borrowings raised

Cash generated from other financing

activities

Subtotal of cash generated from

financing activities

Repayment of borrowings

Interest and dividends paid 0.00 1162518220.56

Cash used in other financing activities 7606249.20 7907885.61

Subtotal of cash used in financing

7606249.201170426106.17

activities

Net cash generated from/used in

-7606249.20-1170426106.17

financing activities

4. Effect of foreign exchange rates

changes on cash and cash equivalents

5. Net increase in cash and cash

975947369.553903328776.05

equivalents

Add: Cash and cash equivalents

7338284192.521571949499.06

beginning of the period

6. Cash and cash equivalents end of the

8314231562.075475278275.11

period

~ 64 ~Interim Report 2023

7. Consolidated Statements of Changes in Owners’ Equity

H1 2023

Unit: RMB

H1 2023

Equity attributable to owners of the Company as the parent

Other equity

Item Gener

instruments Less: Other Specifi Non-controlli Total owners’

Capital Surplus al Retained Othe

Share capital Treasur comprehensi c Subtotal ng interests equity Perpetu

Preferre Othe reserves reserves reserv earnings r

al y stock ve income reserve

d shares r e

bonds

1. Balance as

at the end of 528600000. 6224747667. 269402260. 11497599306. 18520757973. 812095782. 19332853756.

408739.61

the period of 00 10 27 54 52 69 21

prior year

Add:

Adjustment

for change in

accounting

policy

Adjustment

for

correction of

previous

error

~ 65 ~Interim Report 2023

Adjustment

for business

combination

under

common

control

Other

adjustments

2. Balance as

at the

beginning of 528600000. 6224747667. 269402260. 11497599306. 18520757973. 812095782. 19332853756.

408739.61

the 00 10 27 54 52 69 21

Reporting

Period

3. Increase/

decrease in

1193674367.51193924511.663320021.61257244533.3

the period 250144.18

1965

(“-” for

decrease)

3.1 Total

2779474367.52779724511.665950661.22845675172.9

comprehensi 250144.18

1976

ve income

3.2

Capital

increased 4000000.00 4000000.00

and reduced

by owners

3.2.1

4000000.004000000.00

Ordinary

~ 66 ~Interim Report 2023

shares

increased by

owners

3.2.2

Capital

increased by

holders of

other equity

instruments

3.2.3

Share-based

payments

included in

owners’

equity

3.2.4

Other

3.3 Profit -1585800000. -1585800000. -1592430639.

-6630639.61

distribution 00 00 61

3.3.1

Appropriatio

n to surplus

reserves

3.3.2

Appropriatio

n to general

reserve

3.3.3

-1585800000.-1585800000.-6630639.61-1592430639.Appropriatio

~ 67 ~Interim Report 2023

n to owners 00 00 61

(or

shareholders

)

3.3.4

Other

3.4

Transfers

within

owners’

equity

3.4.1

Increase in

capital (or

share

capital) from

capital

reserves

3.4.2

Increase in

capital (or

share

capital) from

surplus

reserves

3.4.3

Loss offset

by surplus

reserves

~ 68 ~Interim Report 2023

3.4.4

Changes in

defined

benefit

schemes

transferred

to retained

earnings

3.4.5

Other

comprehensi

ve income

transferred

to retained

earnings

3.4.6

Other

3.5

Specific

reserve

3.5.1

Increase in

the period

3.5.2

Used in the

period

3.6 Other

4. Balance as

528600000.6224747667.658883.79269402260.12691273674.19714682485.875415804.20590098289.

at the end of

~ 69 ~Interim Report 2023

the 00 10 27 05 21 35 56

Reporting

Period

H1 2022

Unit: RMB

H1 2022

Equity attributable to owners of the Company as the parent

Other equity

Item Gener

instruments Less: Other Specifi Non-controlli Total owners’

Capital Surplus al Retained Othe

Share capital Perpetu Treasur comprehensi c Subtotal

ng interests equity

Preferre Othe reserves reserves reserv earnings r

al y stock ve income reserve

d shares r e

bonds

1. Balance as

at the end of 528600000. 6224747667. -2735058.1 269402260. 9517374574.4 16537389443. 715471437. 17252860881.the period of 00 10 9 27 6 64 89 53

prior year

Add:

Adjustment

for change in

accounting

policy

Adjustment

for

correction of

previous

error

~ 70 ~Interim Report 2023

Adjustment

for business

combination

under

common

control

Other

adjustments

2. Balance as

at the

beginning of 528600000. 6224747667. -2735058.1 269402260. 9517374574.4 16537389443. 715471437. 17252860881.the 00 10 9 27 6 64 89 53

Reporting

Period

3. Increase/

decrease in

54133797.7

the period 1836134.17 755901503.75 757737637.92 811871435.68

6

(“-” for

decrease)

3.1 Total

1918821503.71920657637.954133797.71974791435.6

comprehensi 1836134.17

5268

ve income

3.2

Capital

increased

and reduced

by owners

3.2.1

Ordinary

~ 71 ~Interim Report 2023

shares

increased by

owners

3.2.2

Capital

increased by

holders of

other equity

instruments

3.2.3

Share-based

payments

included in

owners’

equity

3.2.4

Other

3.3 Profit -1162920000. -1162920000. -1162920000.

distribution 00 00 00

3.3.1

Appropriatio

n to surplus

reserves

3.3.2

Appropriatio

n to general

reserve

3.3.3

-1162920000.-1162920000.-1162920000.Appropriatio

~ 72 ~Interim Report 2023

n to owners 00 00 00

(or

shareholders

)

3.3.4

Other

3.4

Transfers

within

owners’

equity

3.4.1

Increase in

capital (or

share

capital) from

capital

reserves

3.4.2

Increase in

capital (or

share

capital) from

surplus

reserves

3.4.3

Loss offset

by surplus

reserves

~ 73 ~Interim Report 2023

3.4.4

Changes in

defined

benefit

schemes

transferred

to retained

earnings

3.4.5

Other

comprehensi

ve income

transferred

to retained

earnings

3.4.6

Other

3.5

Specific

reserve

3.5.1

Increase in

the period

3.5.2

Used in the

period

3.6 Other

4. Balance as

528600000.6224747667.-898924.02269402260.10273276078.17295127081.769605235.18064732317.

at the end of

~ 74 ~Interim Report 2023

the 00 10 27 21 56 65 21

Reporting

Period

8. Statements of Changes in Owners’ Equity of the Company as the Parent

H1 2023

Unit: RMB

H1 2023

Other equity instruments Less: Other Specifi

Item Surplus Retained Othe Total owners’

Share capital Preferre Perpetua Othe Capital reserves Treasur comprehensiv c

reserves earnings r equity

d shares l bonds r y stock e income reserve

1. Balance as

at the end of 528600000.0 6176504182.2 264300000.0 16659897749.2

-529354.779691022921.78

the period of 0 0 0 1

prior year

Add:

Adjustment

for change in

accounting

policy

Adjustment

for correction

of previous

error

Other

adjustments

528600000.06176504182.2264300000.016659897749.2

2. Balance as -529354.77 9691022921.78

0001

~ 75 ~Interim Report 2023

at the

beginning of

the Reporting

Period

3. Increase/

decrease in

-1133280.01-182208915.99-183342196.00

the period (“-”

for decrease)

3.1 Total

comprehensiv -1133280.01 1403591084.01 1402457804.00

e income

3.2 Capital

increased and

reduced by

owners

3.2.1

Ordinary

shares

increased by

owners

3.2.2

Capital

increased by

holders of

other equity

instruments

3.2.3

Share-based

payments

~ 76 ~Interim Report 2023

included in

owners’

equity

3.2.4

Other

3.3 Profit -1585800000.0 -1585800000.0

distribution 0 0

3.3.1

Appropriation

to surplus

reserves

3.3.2

Appropriation -1585800000.0 -1585800000.0

to owners (or 0 0

shareholders)

3.3.3

Other

3.4

Transfers

within

owners’

equity

3.4.1

Increase in

capital (or

share capital)

from capital

reserves

3.4.2

~ 77 ~Interim Report 2023

Increase in

capital (or

share capital)

from surplus

reserves

3.4.3

Loss offset by

surplus

reserves

3.4.4

Changes in

defined

benefit

schemes

transferred to

retained

earnings

3.4.5

Other

comprehensiv

e income

transferred to

retained

earnings

3.4.6

Other

3.5 Specific

reserve

3.5.1

~ 78 ~Interim Report 2023

Increase in the

period

3.5.2

Used in the

period

3.6 Other

4. Balance as

at the end of 528600000.0 6176504182.2 264300000.0 16476555553.2

-1662634.789508814005.79

the Reporting 0 0 0 1

Period

H1 2022

Unit: RMB

H1 2022

Other equity instruments Less: Other

Item Specific Surplus Total owners’

Share capital Preferred Perpetual Capital reserves Treasury comprehensive Retained earnings Other

Other reserve reserves equity

shares bonds stock income

1. Balance as at the

end of the period of 528600000.00 6176504182.20 -1385311.78 264300000.00 8904467073.30 15872485943.72

prior year

Add: Adjustment for

change in accounting

policy

Adjustment for

correction of previous

error

Other adjustments

2. Balance as at the

528600000.006176504182.20-1385311.78264300000.008904467073.3015872485943.72

beginning of the

~ 79 ~Interim Report 2023

Reporting Period

3. Increase/ decrease in

the period (“-” for 109851.14 -79159501.42 -79049650.28

decrease)

3.1 Total

109851.141083760498.581083870349.72

comprehensive income

3.2 Capital

increased and reduced

by owners

3.2.1 Ordinary

shares increased by

owners

3.2.2 Capital

increased by holders of

other equity

instruments

3.2.3 Share-based

payments included in

owners’ equity

3.2.4 Other

3.3 Profit

-1162920000.00-1162920000.00

distribution

3.3.1

Appropriation to

surplus reserves

3.3.2

Appropriation to

-1162920000.00-1162920000.00

owners (or

shareholders)

~ 80 ~Interim Report 2023

3.3.3 Other

3.4 Transfers within

owners’ equity

3.4.1 Increase in

capital (or share

capital) from capital

reserves

3.4.2 Increase in

capital (or share

capital) from surplus

reserves

3.4.3 Loss offset

by surplus reserves

3.4.4 Changes in

defined benefit

schemes transferred to

retained earnings

3.4.5 Other

comprehensive income

transferred to retained

earnings

3.4.6 Other

3.5 Specific reserve

3.5.1 Increase in

the period

3.5.2 Used in the

period

3.6 Other

~ 81 ~Interim Report 2023

4. Balance as at the

end of the Reporting 528600000.00 6176504182.20 -1275460.64 264300000.00 8825307571.88 15793436293.44

Period

~ 82 ~Interim Report 2023

Anhui Gujing Distillery Company Limited

Notes to Financial Statements for H1 2023

(Currency Unit Is RMB Unless Otherwise Stated)

1. BASIC INFORMATION ABOUT THE COMPANY

1.1 Corporate Information

Authorized by document WGZGZ (1996) No.053 of Anhui Administrative Bureau of State-owned Property

Anhui Gujing Distillery Company Limited (“the Company”) was established as a limited liability company with

net assets of RMB377167700 and state-owned shares of 155000000 shares and considered Anhui Gujing

Company as the only promoter. The registration place was Bozhou Anhui China. The Company was established

on 5 March 1996 by document of WZM (1996) No.42 of Anhui People’s Government. The Company set up

plenary session on 28 May 1996 and registered in Anhui on 30 May 1996.The Company has issued 60000000 domestic listed foreign shares (“B” shares) in June 1996 and 20000000ordinary shares (“A shares) on September 1996 ordinary shares are listed in national and par value is RMB1.00per share. Those A shares and B shares are listed in Shenzhen Stock exchange.Headquarter of the Company is located in Gujing Bozhou Anhui. The Company and its subsidiaries (the Company)

specialize in producing and selling baijiu and belong to food manufacturing industry.Registered capitals of the Company were RMB235000000 with stocks of 235000000 of which 155000000

shares were issued in China B shares of 60000000 shares and A shares of 20000000 shares. The book value of

the stocks of the Company was of RMB1 per share.On 29 May 2006 a shareholder meeting was held to discuss and approval a program of equity division of A share

the program was implement in June 2006. After implementation all shares are outstanding share which include

147000000 shares with restrict condition on disposal represent 62.55% of total equity and 88000000 shares

without restrict condition on disposal represent 37.45% of total equity.The Company issued

on 27 June 2007 11750000 outstanding shares with restrict condition on disposal are listed in stock market on 29

June 2007. Up to that day outstanding shares with restrict condition on disposal are 135250000 representing

57.55% of total equity the share without restrict condition are 99750000 representing 42.45% of total equity.

The Company issued

on 17 July 2008 11750000 outstanding shares with restrict condition on disposal are listed in stock market on 18

July 2008. Up to that day outstanding shares with restrict condition on disposal are 123500000 representing

52.55% of total equity the share without restrict condition are 111500000 representing 47.45% of total equity.

The Company issued

on 24 July 2009 123500000 outstanding shares with restrict condition on disposal are listed in stock market on

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29 July 2009. Up to that day the Company’s all shares are all tradable.

Approved by the CSRC Document Zheng-Jian-Xu-Ke [2011] No. 943 the Company privately offered 16800000

ordinary shares (A-shares) to special investors on 15 July 2011 with a par value of RMB1 and the price of

RMB75.00 per share raising RMB1260000000.00 in total the net amount of raised funds stood at

RMB1227499450.27 after deducting RMB32500549.73 of various issuance expenses. Certified Public

Accountants verified the raised capital upon its arrival and issued the Capital Verification Report Reanda-Yan-Zi

[2011] No. 1065. After private issuance the share capital of the Company increased to RMB251.8 million.Pursuant to the Resolution of The 2011 Annual General Meeting the Company that considered 251800000shares as base number on 31 December 2011 transferred capital reserve into share capital at a rate of “10 sharesfor per 10 shares” accounting for 251800000 shares and implemented in the year of 2012. Upon the transference

the registered capitals increased to RMB503600000.Approved by the China Securities Regulatory Commission under CSRC Permit [2021] No. 1422 the Company

privately issued RMB25000000 ordinary shares (A shares) with the par value of RMB1 per share to specific

targets on 22 July 2021 at an issuing price of RMB200.00 per share raising total proceeds of

RMB5000000000.00. After deducting the expenses related to the issue of RMB45657925.15 the actual net

proceeds raised were RMB4954342074.85. RSM (special ordinary partnership) has audited the availability of

the funds raised from the non-public offering of shares of the Company and issued Capital Verification Report

R.C.Y.Z [2021] No. 518Z0050. The share capital of the Company increased to RMB528600000 after the

non-public offering.By 30 June 2023 the Company issued 528600000 shares. See Note 5.33 for details.The Company is registered at Gujing Town Bozhou City Anhui Province.The approved business of the Company including procurement of grain (operating with business license)

manufacture of baijiu wine distilling facilities packaging material bottles alcohol grease (limited to byproducts

from wine manufacture) and research and development of high-tech biotechnology development agricultural

and sideline products deep processing as well as sale of self-manufacturing products.Disclosure date of financial statement approved: Financial statement of the Company will be released on 30

August 2023 by the Board of Directors.

1.2 Scope of Consolidation and Changes Thereof

(1) Incorporated subsidiaries of the Company

Proportion of Shareholding (or

No. Name of Subsidiaries Abbreviation similar equity interest) (%)

Direct Indirect

1 Bozhou Gujing Sales Co. Ltd. Gujing Sales 100.00

2 Anhui Jinyunlai Culture & Media Co. Ltd. Jinyunlai 100.00

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3 Anhui Ruisiweier Technology Co. Ltd. Ruisiweier 100.00

4 Anhui Longrui Glass Co. Ltd Longrui Glass 100.00

5 Shanghai Gujing Jinhao Hotel Management Co. Ltd. Jinhao Hotel 100.00

6 Bozhou Gujing Hotel Co. Ltd Gujing Hotel 100.00

Yuanqing

7 Anhui Yuanqing Environmental Protection Co. Ltd. Environmental 100.00 -

Protection

8 Anhui Gujing Yunshang E-commerce Co. Ltd. Gujing E-commerce 100.00

9 Anhui RunAnXinKe Testing Technology Co. Ltd. RunAnXinKe 100.00

Jiuan Mechanical

10 Anhui Jiuan Mechanical Electrical Equipment Co. Ltd. 100.00

Electrical

11 Anhui Jiudao Culture Media Co. Ltd. Jiudao Culture 100.00

Anhui Gujinggong Liquor Original Vintage Theme Hotel

12 Theme Hotel 100.00

Management Co. Ltd.

13 Anhui Anjie Technology Co. Ltd. Anjie Technology 70.00

14 Anhui Guqi Distillery Co. Ltd. Guqi Distillery 60.00

Anhui Jiuhao China Railway Construction Engineering

15 Jiuhao China Railway 52.00

Co. Ltd.

16 Anhui Zhenrui Construction Engineering Co. Ltd Zhenrui Engineering 52.00

Yellow Crane Tower

17 Yellow Crane Tower Distillery Co. Ltd. 51.00

Distillery

Yellow Crane Tower

18 Yellow Crane Tower Distillery (Suizhou) Co. Ltd. 51.00

(Suizhou)

19 Hubei Junlou Cultural Tourism Co. Ltd. Junlou Cultural 51.00

Yellow Crane Tower

20 Hubei Yellow Crane Tower Beverage Co. Ltd. 51.00

Beverage

Yellow Crane Tower

21 Yellow Crane Tower Distillery (Xianning) Co. Ltd. 51.00

(Xianning)

22 Wuhan Yashibo Technology Co. Ltd. Yashibo 51.00

23 Hubei Xinjia Testing Technology Co. Ltd. Xinjia Testing 51.00

24 Wuhan Tianlong Jindi Technology Development Co. Tianlong Jindi 51.00

25 WLtdu han Junya Sales Co. Ltd Junya Sales 51.00

26 Xianning Junhe Sales Co. Ltd. Xianning Junhe 51.00

27 Suizhou Junhe Commercial Co. Ltd. Suizhou Junhe 51.00

28 Huanggang Junya Trading Co. Ltd. Huanggang Junya 51.00

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29 Wuhan Gulou Junhe Trading Co. Ltd. Gulou Junhe 51.00

30 Wuhan Gulou Juntai Trading Co. Ltd. Gulou Juntai 51.00

Renhuai Maotai Town Zhencang Winery Industry Co. Zhencang Winery

3160.00

Ltd. Industry

32 Anhui Mingguang Wine Co. Ltd. Mingguang Wine 60.00

33 Mingguang Tiancheng Ming Wine Sales Co. Ltd. Tiancheng Sales 60.00

Fengyang Xiaogang Village Ming Wine Distillery Co. Fengyang Xiaogang

3442.00

Ltd. Village

35 Anhui Gujing Health Technology Co. Ltd. Health Technology 60.00

36 Anhui Maiqi Biotechnology Co. Ltd. Maiqi Biotechnology 60.00

37 Anhui Yangshengtianxia Brand Operation Co. Ltd. Brand Operation 60.00

38 Hainan Yangshengtianxia Biotechnology Development Biotechnology 60.00

Co. Ltd.For details of the subsidiaries mentioned above please refer to Note 7 INTEREST IN OTHER ENTITIES

(2) Change of the scope of consolidation

Compared with the previous period the newly incorporated subsidiaries during the reporting period were Guqi

Distillery Gulou Junhe and Gulou Juntai.

2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS

2.1 Basis for Preparation

On the basis of continuous operations the Company shall confirm and measure actual transactions and events in

accordance with the Accounting Standards for Business Enterprises and its Application Guidelines and

Interpretation of the Standards and prepare financial statements. Besides the Company also discloses relevant

financial information in accordance with the China Securities Regulatory Commission (CSRC) Rules No. 15 on

the Compilation and Reporting of Corporate Information on Public Offerings -- General Provisions on Financial

Reports (2014 Revision).

2.2 Continuation

The Company has assessed its ability to continually operate for the next twelve months from the end of the

reporting period and no any matters that may result in doubt on its ability as a going concern were noted.Therefore it is reasonable for the Company to prepare financial statements on the going concern basis.

3. IMPORTANT ACCOUNTING POLICIES AND ESTIMATIONS

It is required to comply with disclosure requirements for food and liquor & wine production industry in the

Guideline No. 3 of the Shenzhen Stock Exchange for Self-regulation of Listed Companies—Industry-specific

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Information Disclosure.Specific accounting policies and accounting estimates: The contents disclosed below cover the specific accounting

policies and accounting estimates formulated by the Company according to the actual production and operation

characteristics.

3.1 Statement of Compliance with the Accounting Standards for Business Enterprises

The financial statements prepared by the Company are in compliance with in compliance with the Accounting

Standards for Business Enterprises which factually and completely present the Company’s financial positions

changes of owners’ equity business results and cash flows and other relevant information.

3.2 Fiscal Period

The accounting year of the Company is from January 1 to December 31 in calendar year.

3.3 Operating Cycle

The normal operating cycle of the Company is one year.

3.4 Currency Used in Bookkeeping

The Company's functional currency is RMB and its overseas subsidiaries are operated in the currency of the main

economic environment in which they operate.

3.5 Accounting Treatment of Business Combinations under and not under Common Control

(a) Business combinations under common control

The assets and liabilities that the Company obtains in a business combination under common control shall be

measured at their carrying amount of the acquired entity at the combination date. If the accounting policy adopted

by the acquired entity is different from that adopted by the acquiring entity the acquiring entity shall according to

accounting policy it adopts adjust the relevant items in the financial statements of the acquired party based on the

principal of materiality. As for the difference between the carrying amount of the net assets obtained by the

acquiring entity and the carrying amount of the consideration paid by it the capital reserve (capital premium or

share premium) shall be adjusted. If the capital reserve (capital premium or share premium) is not sufficient to

absorb the difference any excess shall be adjusted against retained earnings.For the accounting treatment of business combination under common control by step acquisitions please refer to

Note 3.6 (6).(b) Business combinations not under common control

The assets and liabilities that the Company obtains in a business combination not under common control shall be

measured at their fair value at the acquisition date. If the accounting policy adopted by the acquired entity is

different from that adopted by the acquiring entity the acquiring entity shall according to accounting policy it

adopts adjust the relevant items in the financial statements of the acquired entity based on the principal of

materiality. The acquiring entity shall recognise the positive balance between the combination costs and the fair

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value of the identifiable net assets it obtains from the acquired entity as goodwill. The acquiring entity shall

pursuant to the following provisions treat the negative balance between the combination costs and the fair value

of the identifiable net assets it obtains from the acquired entity:

(i) It shall review the measurement of the fair values of the identifiable assets liabilities and contingent liabilities

it obtains from the acquired entity as well as the combination costs;

(ii) If after the review the combination costs are still less than the fair value of the identifiable net assets it

obtains from the acquired entity the balance shall be recognised in profit or loss of the reporting period.For the accounting treatment of business combination under the same control by step acquisitions please refer to

Note 3.6 (f).(c) Treatment of business combination related costs

The intermediary costs such as audit legal services and valuation consulting and other related management costs

that are directly attributable to the business combination shall be charged in profit or loss in the period in which

they are incurred. The costs to issue equity or debt securities for the consideration of business combination shall

be recorded as a part of the value of the respect equity or debt securities upon initial recognition.

3.6 Method of Preparing the Consolidated Financial Statements

(a) Scope of consolidation

The scope of consolidated financial statements shall be determined on the basis of control. It not only includes

subsidiaries determined based on voting power (or similar) or other arrangement but also structured entities under

one or several contract arrangements.Control exists when the Company has all the following: power over the investee; exposure or rights to variable

returns from the Company’s involvement with the investee; and the ability to use its power over the investee to

affect the amount of the investor’s returns. Subsidiaries are the entities that controlled by the Company (including

enterprise a divisible part of the investee and structured entity controlled by the enterprise). A structured entity

(sometimes called a Special Purpose Entity) is an entity that has been designed so that voting or similar rights are

not the dominant factor in deciding who controls the entity.(b) Special requirement as the parent company is an investment entity

If the parent company is an investment entity it should measure its investments in particular subsidiaries as

financial assets at fair value through profit or loss instead of consolidating those subsidiaries in its consolidated

and separate financial statements. However as an exception to this requirement if a subsidiary provides

investment-related services or activities to the investment entity it should be consolidated.The parent company is defined as investment entity when meets following conditions:

a. Obtains funds from one or more investors for the purpose of providing those investors with investment

management services;

b. Commits to its investors that its business purpose is to invest funds solely for returns from capital appreciation

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investment income or both; and

c. Measures and evaluates the performance of substantially all of its investments on a fair value basis.If the parent company becomes an investment entity it shall cease to consolidate its subsidiaries at the date of the

change in status except for any subsidiary which provides investment-related services or activities to the

investment entity shall be continued to be consolidated. The deconsolidation of subsidiaries is accounted for as

though the investment entity partially disposed subsidiaries without loss of control.When the parent company previously classified as an investment entity ceases to be an investment entity

subsidiary that was previously measured at fair value through profit or loss shall be included in the scope of

consolidated financial statements at the date of the change in status. The fair value of the subsidiary at the date of

change represents the transferred deemed consideration in accordance with the accounting for business

combination not under common control.(c) Method of preparing the consolidated financial statements

The consolidated financial statements shall be prepared by the Company based on the financial statements of the

Company and its subsidiaries and using other related information.When preparing consolidated financial statements the Company shall consider the entire group as an accounting

entity adopt uniform accounting policies and apply the requirements of Accounting Standard for Business

Enterprises related to recognition measurement and presentation. The consolidated financial statements shall

reflect the overall financial position operating results and cash flows of the group.(i) Like items of assets liabilities equity income expenses and cash flows of the parent are combined with those

of the subsidiaries.(ii) The carrying amount of the parent’s investment in each subsidiary is eliminated (off-set) against the parent’s

portion of equity of each subsidiary.(iii) Eliminate the impact of intragroup transactions between the Company and the subsidiaries or between

subsidiaries and when intragroup transactions indicate an impairment of related assets the losses shall be

recognised in full.(iv) Make adjustments to special transactions from the perspective of the group.(d) Method of preparation of the consolidated financial statements when subsidiaries are acquired or

disposed in the reporting period

(i) Acquisition of subsidiaries or business

Subsidiaries or business acquired through business combination under common control

When preparing consolidated statements of financial position the opening balance of the consolidated balance

sheet shall be adjusted. Related items of comparative financial statements shall be adjusted as well deeming that

the combined entity has always existed ever since the ultimate controlling party began to control.Incomes expenses and profits of the subsidiary incurred from the beginning of the reporting period to the end of

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the reporting period shall be included into the consolidated statement of profit or loss. Related items of

comparative financial statements shall be adjusted as well deeming that the combined entity has always existed

ever since the ultimate controlling party began to control.Cash flows from the beginning of the reporting period to the end of the reporting period shall be included into the

consolidated statement of cash flows. Related items of comparative financial statements shall be adjusted as well

deeming that the combined entity has always existed ever since the ultimate controlling party began to control.Subsidiaries or business acquired through business combination not under common control

When preparing the consolidated statements of financial position the opening balance of the consolidated

statements of financial position shall not be adjusted.Incomes expenses and profits of the subsidiary incurred from the acquisition date to the end of the reporting

period shall be included into the consolidated statement of profit or loss.Cash flows from the acquisition date to the end of the reporting period shall be included into the consolidated

statement of cash flows.(ii) Disposal of subsidiaries or business

When preparing the consolidated statements of financial position the opening balance of the consolidated

statements of financial position shall not be adjusted.Incomes expenses and profits incurred from the beginning of the subsidiary to the disposal date shall be included

into the consolidated statement of profit or loss.Cash flows from the beginning of the subsidiary to the disposal date shall be included into the consolidated

statement of cash flows.(e) Special consideration in consolidation elimination

(i) Long-term equity investment held by the subsidiaries to the Company shall be recognised as treasury stock of

the Company which is offset with the owner’s equity represented as “treasury stock” under “owner’s equity” in

the consolidated statement of financial position.Long-term equity investment held by subsidiaries between each other is accounted for taking long-term equity

investment held by the Company to its subsidiaries as reference. That is the long-term equity investment is

eliminated (off- set) against the portion of the corresponding subsidiary’s equity.(ii) Due to not belonging to paid-in capital (or share capital) and capital reserve and being different from retained

earnings and undistributed profit “Specific reserves” and “General risk provision” shall be recovered based on the

proportion attributable to owners of the parent company after long-term equity investment to the subsidiaries is

eliminated with the subsidiaries’ equity.(iii) If temporary timing difference between the book value of the assets and liabilities in the consolidated

statement of financial position and their tax basis is generated as a result of elimination of unrealized

inter-company transaction profit or loss deferred tax assets of deferred tax liabilities shall be recognised and

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income tax expense in the consolidated statement of profit or loss shall be adjusted simultaneously excluding

deferred taxes related to transactions or events directly recognised in owner’s equity or business combination.(iv) Unrealised inter-company transactions profit or loss generated from the Company selling assets to its

subsidiaries shall be eliminated against “net profit attributed to the owners of the parent company” in full.Unrealized inter-company transactions profit or loss generated from the subsidiaries selling assets to the Company

shall be eliminated between “net profit attributed to the owners of the parent company” and “non-controllinginterests” pursuant to the proportion of the Company in the related subsidiaries. Unrealized inter-company

transactions profit or loss generated from the assets sales between the subsidiaries shall be eliminated between

“net profit attributed to the owners of the parent company” and “non-controlling interests” pursuant to the

proportion of the Company in the selling subsidiaries.(v) If loss attributed to the minority shareholders of a subsidiary in current period is more than the proportion of

non-controlling interest in this subsidiary at the beginning of the period non-controlling interest is still to be

written down.(f) Accounting for Special Transactions

(i) Purchasing of non-controlling interests

Where the Company purchases non-controlling interests of its subsidiary in the separate financial statements of

the Company the cost of the long-term equity investment obtained in purchasing non-controlling interests is

measured at the fair value of the consideration paid. In the consolidated financial statements difference between

the cost of the long-term equity investment newly obtained in purchasing non-controlling interests and share of

the subsidiary’s net assets from the acquisition date or combination date continuingly calculated pursuant to the

newly acquired shareholding proportion shall be adjusted into capital reserve (capital premium or share premium).If capital reserve is not enough to be offset surplus reserve and undistributed profit shall be offset in turn.(ii) Gaining control over the subsidiary in stages through multiple transactions

Business combination under common control in stages through multiple transactions

On the combination date in the separate financial statement initial cost of the long-term equity investment is

determined according to the share of carrying amount of the acquiree’s net assets in the ultimate controlling

entity’s consolidated financial statements after combination. The difference between the initial cost of the

long-term equity investment and the carrying amount of the long -term investment held prior of control plus book

value of additional consideration paid at acquisition date is adjusted into capital reserve (capital premium or share

premium). If the capital reserve is not enough to absorb the difference any excess shall be adjusted against

surplus reserve and undistributed profit in turn.In the consolidated financial statements the assets and liabilities acquired during the combination should be

recognized at their carrying amount in the ultimate controlling entity’s consolidated financial statements on the

combination date unless any adjustment is resulted from the difference in accounting policies. The difference

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between the carrying amount of the investment held prior of control plus book value of additional consideration

paid on the acquisition date and the net assets acquired through the combination is adjusted into capital reserve

(capital premium or share premium). If the capital reserve is not enough to absorb the difference any excess shall

be adjusted against retained earnings.If the acquiring entity holds equity investment in the acquired entity prior to the combination date and the equity

investment is accounted for under the equity method related profit or loss other comprehensive income and other

changes in equity which have been recognised during the period from the later of the date of the Company

obtaining original equity interest and the date of both the acquirer and the acquiree under common control of the

same ultimate controlling party to the combination date should be offset against the opening balance of retained

earnings at the comparative financial statements period respectively.Business combination not under common control in stages through multiple transactions

On the consolidation date in the separate financial statements the initial cost of long-term equity investment is

determined according to the carrying amount of the original long-term investment plus the cost of new

investment.In the consolidated financial statements the equity interest of the acquired entity held prior to the acquisition date

shall be re-measured at its fair value on the acquisition date. Difference between the fair value of the equity

interest and its book value is recognised as investment income. The other comprehensive income related to the

equity interest held prior to the acquisition date calculated through equity method should be transferred to

current investment income of the acquisition period excluding other comprehensive income resulted from the

remeasurement of the net assets or net liabilities under defined benefit plan. The Company shall disclose

acquisition-date fair value of the equity interest held prior to the acquisition date and the related gains or losses

due to the remeasurement based on fair value.(iii) Disposal of investment in subsidiaries without a loss of control

For partial disposal of the long-term equity investment in the subsidiaries without a loss of control when the

Company prepares consolidated financial statements difference between consideration received from the disposal

and the corresponding share of subsidiary’s net assets cumulatively calculated from the acquisition date or

combination date shall be adjusted into capital reserve (capital premium or share premium). If the capital reserve

is not enough to absorb the difference any excess shall be offset against retained earnings.(iv) Disposal of investment in subsidiaries with a loss of control

Disposal through one transaction

If the Company loses control in an investee through partial disposal of the equity investment when the

consolidated financial statements are prepared the retained equity interest should be re-measured at fair value at

the date of loss of control. The difference between i) the fair value of consideration received from the disposal

plus non-controlling interest retained; ii) share of the former subsidiary’s net assets cumulatively calculated from

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the acquisition date or combination date according to the original proportion of equity interest shall be recognised

in current investment income when control is lost.Moreover other comprehensive income and other changes in equity related to the equity investment in the former

subsidiary shall be transferred into current investment income when control is lost excluding other

comprehensive income resulted from the remeasurement of the movement of net assets or net liabilities under

defined benefit plan.Disposal in stages

In the consolidated financial statements whether the transactions should be accounted for as “a single transaction”

needs to be decided firstly.If the disposal in stages should not be classified as “a single transaction” in the separate financial statements for

transactions prior of the date of loss of control carrying amount of each disposal of long-term equity investment

need to be recognized and the difference between consideration received and the carrying amount of long-term

equity investment corresponding to the equity interest disposed should be recognized in current investment

income; in the consolidated financial statements the disposal transaction should be accounted for according to

related policy in “Disposal of long-term equity investment in subsidiaries without a loss of control”.If the disposal in stages should be classified as “a single transaction” these transactions should be accounted for

as a single transaction of disposal of subsidiary resulting in loss of control. In the separate financial statements for

each transaction prior of the date of loss of control difference between consideration received and the carrying

amount of long-term equity investment corresponding to the equity interest disposed should be recognised as

other comprehensive income firstly and transferred to profit or loss as a whole when control is lost; in the

consolidated financial statements for each transaction prior of the date of loss of control difference between

consideration received and proportion of the subsidiary’s net assets corresponding to the equity interest disposed

should be recognised in profit or loss as a whole when control is lost.In considering of the terms and conditions of the transactions as well as their economic impact the presence of

one or more of the following indicators may lead to account for multiple transactions as a single transaction:

(a) The transactions are entered into simultaneously or in contemplation of one another.(b) The transactions form a single transaction designed to achieve an overall commercial effect.(c) The occurrence of one transaction depends on the occurrence of at least one other transaction.(d) One transaction when considered on its own merits does not make economic sense but when considered

together with the other transaction or transactions would be considered economically justifiable.(v) Diluting equity share of parent company in its subsidiaries due to additional capital injection by the

subsidiaries’ minority shareholders.Other shareholders (minority shareholders) of the subsidiaries inject additional capital in the subsidiaries which

resulted in the dilution of equity interest of parent company in these subsidiaries. In the consolidated financial

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statements difference between share of the corresponding subsidiaries’ net assets calculated based on the parent’s

equity interest before and after the capital injection shall be adjusted into capital reserve (capital premium or share

premium). If the capital reserve is not enough to absorb the difference any excess shall be adjusted against

retained earnings.

3.7 Classification of Joint Arrangements and Accounting for Joint Operation

A joint arrangement is an arrangement of which two or more parties have joint control. Joint arrangement of the

Company is classified as either a joint operation or a joint venture.(a) Joint operation

A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights

to the assets and obligations for the liabilities relating to the arrangement.The Company shall recognise the following items in relation to shared interest in a joint operation and account

for them in accordance with relevant accounting standards of the Accounting Standards for Business Enterprises:

(i) its assets including its share of any assets held jointly;

(ii) its liabilities including its share of any liabilities incurred jointly;

(iii) its revenue from the sale of its share of the output arising from the joint operation;

(iv) its share of the revenue from the sale of the output by the joint operation; and

(v) its expenses including its share of any expenses incurred jointly.(b) Joint venture

A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to

the net assets of the arrangement.The Company accounts for its investment in the joint venture by applying the equity method of long-term equity

investment.

3.8 Cash and Cash Equivalents

Cash comprises cash on hand and deposits that can be readily withdrawn on demand. Cash equivalents include

short-term (generally within three months of maturity at acquisition) highly liquid investments that are readily

convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.

3.9 Foreign Currency Transactions and Translation of Foreign Currency Financial Statements

(a) Determination of the exchange rate for foreign currency transactions

At the time of initial recognition of a foreign currency transaction the amount in the foreign currency shall be

translated into the amount in the functional currency at the spot exchange rate of the transaction date or at an

exchange rate which is determined through a systematic and reasonable method and is approximate to the spot

exchange rate of the transaction date (hereinafter referred to as the approximate exchange rate).(b) Translation of monetary items denominated in foreign currency on the balance sheet date

The foreign currency monetary items shall be translated at the spot exchange rate on the balance sheet date. The

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balance of exchange arising from the difference between the spot exchange rate on the balance sheet date and the

spot exchange rate at the time of initial recognition or prior to the balance sheet date shall be recorded into the

profits and losses at the current period. The foreign currency non-monetary items measured at the historical cost

shall still be translated at the spot exchange rate on the transaction date; for the foreign currency non-monetary

items restated to a fair value measurement shall be translated into the at the spot exchange rate at the date when

the fair value was determined the difference between the restated functional currency amount and the original

functional currency amount shall be recorded into the profits and losses at the current period.(c) Translation of foreign currency financial statements

Before translating the financial statements of foreign operations the accounting period and accounting policy

shall be adjusted so as to conform to the Company. The adjusted foreign operation financial statements

denominated in foreign currency (other than functional currency) shall be translated in accordance with the

following method:

(i) The asset and liability items in the statement of financial position shall be translated at the spot exchange rates

at the date of that statement of financial position. The owners’ equity items except undistributed profit shall be

translated at the spot exchange rates when they are incurred.(ii) The income and expense items in the statement of profit and other comprehensive income shall be translated at

the spot exchange rates or approximate exchange rate at the date of transaction.(iii)Foreign currency cash flows and cash flows of foreign subsidiaries shall be translated at the spot exchange rate

or approximate exchange rate when the cash flows are incurred. The effect of exchange rate changes on cash is

presented separately in the statement of cash flows as an adjustment item.(iv) The differences arising from the translation of foreign currency financial statements shall be presented

separately as “other comprehensive income” under the owners’ equity items of the consolidated statement of

financial position.When disposing a foreign operation involving loss of control the cumulative amount of the exchange differences

relating to that foreign operation recognised under other comprehensive income in the statement of financial

position shall be reclassified into current profit or loss according to the proportion disposed.

3.10 Financial Instruments

Financial instrument is any contract which gives rise to both a financial asset of one entity and a financial liability

or equity instrument of another entity.(a) Recognition and derecognition of financial instrument

A financial asset or a financial liability should be recognised in the statement of financial position when and only

when an entity becomes party to the contractual provisions of the instrument.A financial asset can only be derecognised when meets one of the following conditions:

(i) The rights to the contractual cash flows from a financial asset expire

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(ii) The financial asset has been transferred and meets one of the following derecognition conditions:

Financial liabilities (or part thereof) are derecognised only when the liability is extinguished—i.e. when the

obligation specified in the contract is discharged or cancelled or expires. An exchange of the Company (borrower)

and lender of debt instruments that carry significantly different terms or a substantial modification of the terms of

an existing liability are both accounted for as an extinguishment of the original financial liability and the

recognition of a new financial liability.Purchase or sale of financial assets in a regular-way shall be recognised and derecognised using trade date

accounting. A regular-way purchase or sale of financial assets is a transaction under a contract whose terms

require delivery of the asset within the time frame established generally by regulations or convention in the

market place concerned. Trade date is the date at which the entity commits itself to purchase or sell an asset.(b) Classification and measurement of financial assets

At initial recognition the Company classified its financial asset based on both the business model for managing

the financial asset and the contractual cash flow characteristics of the financial asset: financial asset at amortised

cost financial asset at fair value through profit or loss (FVTPL) and financial asset at fair value through other

comprehensive income (FVTOCI). Reclassification of financial assets is permitted if and only if the objective of

the entity’s business model for managing those financial assets changes. In this circumstance all affected

financial assets shall be reclassified on the first day of the first reporting period after the changes in business

model; otherwise the financial assets cannot be reclassified after initial recognition.Financial assets shall be measured at initial recognition at fair value. For financial assets measured at FVTPL

transaction costs are recognised in current profit or loss. For financial assets not measured at FVTPL transaction

costs should be included in the initial measurement. Notes receivable or accounts receivable that arise from sales

of goods or rendering of services are initially measured at the transaction price defined in the accounting standard

of revenue where the transaction does not include a significant financing component.Subsequent measurement of financial assets will be based on their categories:

(i)Financial asset at amortised cost

The financial asset at amortised cost category of classification applies when both the following conditions are met:

the financial asset is held within the business model whose objective is to hold financial assets in order to collect

contractual cash flows and the contractual term of the financial asset gives rise on specified dates to cash flows

that are solely payment of principal and interest on the principal amount outstanding. These financial assets are

subsequently measured at amortised cost by adopting the effective interest rate method. Any gain or loss arising

from derecognition according to the amortization under effective interest rate method or impairment are

recognised in current profit or loss.(ii)Financial asset at fair value through other comprehensive income (FVTOCI)

The financial asset at FVTOCI category of classification applies when both the following conditions are met: the

~ 96 ~Interim Report 2023

financial asset is held within the business model whose objective is achieved by both collecting contractual cash

flows and selling financial assets and the contractual term of the financial asset gives rise on specified dates to

cash flows that are solely payment of principle and interest on the principal amount outstanding. All changes in

fair value are recognised in other comprehensive income except for gain or loss arising from impairment or

exchange differences which should be recognised in current profit or loss. At derecognition cumulative gain or

loss previously recognised under OCI is reclassified to current profit or loss. However interest income calculated

based on the effective interest rate is included in current profit or loss.The Company make an irrevocable decision to designate part of non-trading equity instrument investments as

measured through FVTOCI. All changes in fair value are recognised in other comprehensive income except for

dividend income recognised in current profit or loss. At derecognition cumulative gain or loss are reclassified to

retained earnings.(iii)Financial asset at fair value through profit or loss (FVTPL)

Financial asset except for above mentioned financial asset at amortised cost or financial asset at fair value through

other comprehensive income (FVTOCI) should be classified as financial asset at fair value through profit or loss

(FVTPL). These financial assets should be subsequently measured at fair value. All the changes in fair value are

included in current profit or loss.(c) Classification and measurement of financial liabilities

The Company classified the financial liabilities as financial liabilities at fair value through profit or loss (FVTPL)

loan commitments at a below-market interest rate and financial guarantee contracts and financial asset at

amortised cost.Subsequent measurement of financial assets will be based on the classification:

(i)Financial liabilities at fair value through profit or loss (FVTPL)

Held-for-trading financial liabilities (including derivatives that are financial liabilities) and financial liabilities

designated at FVTPL are classified as financial liabilities at FVTP. After initial recognition any gain or loss

(including interest expense) are recognised in current profit or loss except for those hedge accounting is applied.For financial liability that is designated as at FVTPL changes in the fair value of the financial liability that is

attributable to changes in the own credit risk of the issuer shall be presented in other comprehensive income. At

derecognition cumulative gain or loss previously recognised under OCI is reclassified to retained earnings.(ii)Loan commitments and financial guarantee contracts

Loan commitment is a commitment by the Company to provide a loan to customer under specified contract terms.The provision of impairment losses of loan commitments shall be recognised based on expected credit losses

model.Financial guarantee contract is a contract that requires the Company to make specified payments to reimburse the

holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the

~ 97 ~Interim Report 2023

original or modified terms of a debt instrument. Financial guarantee contracts liability shall be subsequently

measured at the higher of: The amount of the loss allowance recognised according to the impairment principles of

financial instruments; and the amount initially recognised less the cumulative amount of income recognised in

accordance with the revenue principles.(iii)Financial liabilities at amortised cost

After initial recognition the Company measured other financial liabilities at amortised cost using the effective

interest method.Except for special situation financial liabilities and equity instrument should be classified in accordance with the

following principles:

(i) If the Company has no unconditional right to avoid delivering cash or another financial instrument to fulfill a

contractual obligation this contractual obligation meet the definition of financial liabilities. Some financial

instruments do not comprise terms and conditions related to obligations of delivering cash or another financial

instrument explicitly they may include contractual obligation indirectly through other terms and conditions.(ii) If a financial instrument must or may be settled in the Company's own equity instruments it should be

considered that the Company’s own equity instruments are alternatives of cash or another financial instrument or

to entitle the holder of the equity instruments to sharing the remaining rights over the net assets of the issuer. If the

former is the case the instrument is a liability of the issuer; otherwise it is an equity instrument of the issuer.Under some circumstances it is regulated in the contract that the financial instrument must or may be settled in

the Company's own equity instruments where amount of contractual rights and obligations are calculated by

multiplying the number of the equity instruments to be available or delivered by its fair value upon settlement.Such contracts shall be classified as financial liabilities regardless that the amount of contractual rights and

liabilities is fixed or fluctuate totally or partially with variables other than market price of the entity’s own equity

instruments

(d) Derivatives and embedded derivatives

At initial recognition derivatives shall be measured at fair value at the date of derivative contracts are signed and

subsequently measured at fair value. The derivative with a positive fair value shall be recognized as an asset and

with a negative fair value shall be recognised as a liability.Gains or losses arising from the changes in fair value of derivatives shall be recognised directly into current profit

or loss except for the effective portion of cash flow hedges which shall be recognised in other comprehensive

income and reclassified into current profit or loss when the hedged items affect profit or loss.An embedded derivative is a component of a hybrid contract with a financial asset as a host the Company shall

apply the requirements of financial asset classification to the entire hybrid contract. If a host that is not a financial

asset and the hybrid contract is not measured at fair value with changes in fair value recognised in profit or loss

and the economic characteristics and risks of the embedded derivative are not closely related to the economic

~ 98 ~Interim Report 2023

characteristics and risks of the host and a separate instrument with the same terms as the embedded derivative

would meet the definition of a derivative the embedded derivative shall be separated from the hybrid instrument

and accounted for as a separate derivative instrument. If the Company is unable to measure the fair value of the

embedded derivative at the acquisition date or subsequently at the balance sheet date the entire hybrid contract is

designated as financial assets or financial liabilities at fair value through profit or loss.(e) Impairment of financial instrument

The Company shall recognise a loss allowance based on expected credit losses on a financial asset that is

measured at amortised cost a debt investment at fair value through other comprehensive income a contract asset

a lease receivable a loan commitment and a financial guarantee contract.(i) Measurement of expected credit losses

Expected credit losses are the weighted average of credit losses of the financial instruments with the respective

risks of a default occurring as the weights. Credit loss is the difference between all contractual cash flows that are

due to the Company in accordance with the contract and all the cash flows that the Company expects to receive

discounted at the original effective interest rate or credit- adjusted effective interest rate for purchased or

originated credit-impaired financial assets.Lifetime expected credit losses are the expected credit losses that result from all possible default events over the

expected life of a financial instrument.

12-month expected credit losses are the portion of lifetime expected credit losses that represent the expected credit

losses that result from default events on a financial instrument that are possible within the 12 months after the

reporting date (or the expected lifetime if the expected life of a financial instrument is less than 12 months).At each reporting date the Company classifies financial instruments into three stages and makes provisions for

expected credit losses accordingly. A financial instrument of which the credit risk has not significantly increased

since initial recognition is at stage 1. The Company shall measure the loss allowance for that financial instrument

at an amount equal to 12-month expected credit losses. A financial instrument with a significant increase in credit

risk since initial recognition but is not considered to be credit-impaired is at stage 2. The Company shall measure

the loss allowance for that financial instrument at an amount equal to the lifetime expected credit losses. A

financial instrument is considered to be credit-impaired as at the end of the reporting period is at stage 3. The

Company shall measure the loss allowance for that financial instrument at an amount equal to the lifetime

expected credit losses.The Company may assume that the credit risk on a financial instrument has not increased significantly since initial

recognition if the financial instrument is determined to have low credit risk at the reporting date and measure the

loss allowance for that financial instrument at an amount equal to 12-month expected credit losses.For financial instrument at stage 1 stage 2 and those have low credit risk the interest revenue shall be calculated

by applying the effective interest rate to the gross carrying amount of a financial asset. For financial instrument at

~ 99 ~Interim Report 2023

stage 3 interest revenue shall be calculated by applying the effective interest rate to the amortised cost after

deducting of impairment loss.For notes receivable accounts receivable and accounts receivable financing no matter it contains a significant

financing component or not the Company shall measure the loss allowance at an amount equal to the lifetime

expected credit losses.Receivables

For the notes receivable accounts receivable other receivables accounts receivable financing and long-term

receivables which are demonstrated to be impaired by any objective evidence or applicable for individual

assessment the Company shall individually assess for impairment and recognise the loss allowance for expected

credit losses. If the Company determines that no objective evidence of impairment exists for notes receivable

accounts receivable other receivables accounts receivable financing and long-term receivables or the expected

credit loss of a single financial asset cannot be assessed at reasonable cost such notes receivable accounts

receivable other receivables accounts receivable financing and long-term receivables shall be divided into

several groups with similar credit risk characteristics and collectively calculated the expected credit loss. The

determination basis of groups is as following:

Determination basis of notes receivable is as following:

Group 1: Commercial acceptance bills

Group 2: Bank acceptance bills

For each group the Company calculates expected credit losses through default exposure and the lifetime expected

credit losses rate taking reference to historical experience for credit losses and considering current condition and

expectation for the future economic situation.Determination basis of accounts receivable is as following:

Group 1: Accounts receivables due from the company within the scope of consolidation

Group 2: Accounts receivables due from other customers

For each group the Company calculates expected credit losses through preparing an aging analysis schedule with

the lifetime expected credit losses rate taking reference to historical experience for credit losses and considering

current condition and expectation for the future economic situation.Determination basis of other receivables is as following:

Group 1: Other receivables due from the company within the scope of consolidation

Group 2: Other receivables due from others

For each group the Company calculates expected credit losses through default exposure and the 12-months or

lifetime expected credit losses rate taking reference to historical experience for credit losses and considering

current condition and expectation for the future economic situation.Debt investment and other debt investment

~ 100 ~Interim Report 2023

For debt investment and other debt investment the Company shall calculate the expected credit loss through the

default exposure and the 12-month or lifetime expected credit loss rate based on the nature of the investment

counterparty and the type of risk exposure.(ii) Low credit risk

If the financial instrument has a low risk of default the borrower has a strong capacity to meet its contractual cash

flow obligations in the near term and adverse changes in economic and business conditions in the longer term may

but will not necessarily reduce the ability of the borrower to fulfill its contractual cash flow obligations.(iii) Significant increase in credit risk

The Company shall assess whether the credit risk on a financial instrument has increased significantly since initial

recognition using the change in the risk of a default occurring over the expected life of the financial instrument

through the comparison of the risk of a default occurring on the financial instrument as at the reporting date with

the risk of a default occurring on the financial instrument as at the date of initial recognition.To make that assessment the Company shall consider reasonable and supportable information that is available

without undue cost or effort and that is indicative of significant increases in credit risk since initial recognition

including forward-looking information. The information considered by the Company are as following:

? Significant changes in internal price indicators of credit risk as a result of a change in credit risk since

inception

? Existing or forecast adverse change in the business financial or economic conditions of the borrower that

results in a significant change in the borrower’s ability to meet its debt obligations；

? An actual or expected significant change in the operating results of the borrower; An actual or expected

significant adverse change in the regulatory economic or technological environment of the borrower；

? Significant changes in the value of the collateral supporting the obligation or in the quality of third-party

guarantees or credit enhancements which are expected to reduce the borrower’s economic incentive to make

scheduled contractual payments or to otherwise have an effect on the probability of a default occurring;

? Significant change that are expected to reduce the borrower’s economic incentive to make scheduled

contractual payments;

? Expected changes in the loan documentation including an expected breach of contract that may lead to

covenant waivers or amendments interest payment holidays interest rate step-ups requiring additional

collateral or guarantees or other changes to the contractual framework of the instrument；

? Significant changes in the expected performance and behaviour of the borrower；

? Contractual payments are more than 30 days past due.Depending on the nature of the financial instruments the Company shall assess whether the credit risk has

increased significantly since initial recognition on an individual financial instrument or a group of financial

instruments. When assessed based on a group of financial instruments the Company can group financial

~ 101 ~Interim Report 2023

instruments on the basis of shared credit risk characteristics for example past due information and credit risk

rating.Generally the Company shall determine the credit risk on a financial asset has increased significantly since initial

recognition when contractual payments are more than 30 days past due. The Company can only rebut this

presumption if the Company has reasonable and supportable information that is available without undue cost or

effort that demonstrates that the credit risk has not increased significantly since initial recognition even though

the contractual payments are more than 30 days past due.(iv) Credit-impaired financial asset

The Company shall assess at each reporting date whether the credit impairment has occurred for financial asset at

amortised cost and debt investment at fair value through other comprehensive income. A financial asset is

credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of that

financial asset have occurred. Evidences that a financial asset is credit-impaired include observable data about the

following events:

Significant financial difficulty of the issuer or the borrower；a breach of contract such as a default or past due

event; the lender(s) of the borrower for economic or contractual reasons relating to the borrower’s financial

difficulty having granted to the borrower a concession(s) that the lender(s) would not otherwise consider；it is

becoming probable that the borrower will enter bankruptcy or other financial reorganisation；the disappearance of

an active market for that financial asset because of financial difficulties；the purchase or origination of a financial

asset at a deep discount that reflects the incurred credit losses.(v) Presentation of impairment of expected credit loss

In order to reflect the changes of credit risk of financial instrument since initial recognition the Company shall at

each reporting date remeasure the expected credit loss and recognise in profit or loss as an impairment gain or

loss the amount of expected credit losses addition (or reversal). For financial asset at amortised cost the loss

allowance shall reduce the carrying amount of the financial asset in the statement of financial position; for debt

investment at fair value through other comprehensive income the loss allowance shall be recognised in other

comprehensive income and shall not reduce the carrying amount of the financial asset in the statement of financial

position.(vi) Write-off

The Company shall directly reduce the gross carrying amount of a financial asset when the Company has no

reasonable expectations of recovering the contractual cash flow of a financial asset in its entirety or a portion

thereof. Such write-off constitutes a derecognition of the financial asset. This circumstance usually occurs when

the Company determines that the debtor has no assets or sources of income that could generate sufficient cash

flow to repay the write-off amount.Recovery of financial asset written off shall be recognised in profit or loss as reversal of impairment loss.~ 102 ~Interim Report 2023

(f) Transfer of financial assets

Transfer of financial assets refers to following two situations:

? Transfers the contractual rights to receive the cash flows of the financial asset;

? Transfers the entire or a part of a financial asset and retains the contractual rights to receive the cash flows of

the financial asset but assumes a contractual obligation to pay the cash flows to one or more recipients.(i) Derecognition of transferred assets

If the Company transfers substantially all the risks and rewards of ownership of the financial asset or neither

transfers nor retains substantially all the risks and rewards of ownership of the financial asset but has not retained

control of the financial asset the financial asset shall be derecognised.Whether the Company has retained control of the transferred asset depends on the transferee’s ability to sell the

asset. If the transferee has the practical ability to sell the asset in its entirety to an unrelated third party and is able

to exercise that ability unilaterally and without needing to impose additional restrictions on the transfer the

Company has not retained control.The Company judges whether the transfer of financial asset qualifies for derecognition based on the substance of

the transfer.If the transfer of financial asset qualifies for derecognition in its entirety the difference between the following

shall be recognised in profit or loss:

? The carrying amount of transferred financial asset;

? The sum of consideration received and the part derecognised of the cumulative changes in fair value

previously recognised in other comprehensive income (The financial assets involved in the transfer are

classified as financial assets at fair value through other comprehensive income in accordance with Article 18

of the Accounting Standards for Business Enterprises No.22 - Recognition and Measurement of Financial

Instruments).If the transferred asset is a part of a larger financial asset and the part transferred qualifies for derecognition the

previous carrying amount of the larger financial asset shall be allocated between the part that continues to be

recognised (For this purpose a retained servicing asset shall be treated as a part that continues to be recognised)

and the part that is derecognised based on the relative fair values of those parts on the date of the transfer. The

difference between following two amounts shall be recognised in profit or loss:

? The carrying amount (measured at the date of derecognition) allocated to the part derecognised；

? The sum of the consideration received for the part derecognised and part derecognised of the cumulative

changes in fair value previously recognised in other comprehensive income (The financial assets involved in

the transfer are classified as financial assets at fair value through other comprehensive income in accordance

with Article 18 of the Accounting Standards for Business Enterprises No.22 - Recognition and Measurement

of Financial Instruments).~ 103 ~Interim Report 2023

(ii) Continuing involvement in transferred assets

If the Company neither transfers nor retains substantially all the risks and rewards of ownership of a transferred

asset and retains control of the transferred asset the Company shall continue to recognise the transferred asset to

the extent of its continuing involvement and also recognise an associated liability.The extent of the Company’s continuing involvement in the transferred asset is the extent to which it is exposed to

changes in the value of the transferred asset

(iii) Continue to recognise the transferred assets

If the Company retains substantially all the risks and rewards of ownership of the transferred financial asset the

Company shall continue to recognise the transferred asset in its entirety and the consideration received shall be

recognised as a financial liability.The financial asset and the associated financial liability shall not be offset. In subsequent accounting period the

Company shall continuously recognise any income (gain) arising from the transferred asset and any expense (loss)

incurred on the associated liability.(g) Offsetting financial assets and financial liabilities

Financial assets and financial liabilities shall be presented separately in the statement of financial position and

shall not be offset. When meets the following conditions financial assets and financial liabilities shall be offset

and the net amount presented in the statement of financial position:

The Company currently has a legally enforceable right to set off the recognised amounts; The Company intends

either to settle on a net basis or to realise the asset and settle the liability simultaneously.In accounting for a transfer of a financial asset that does not qualify for derecognition the Company shall not

offset the transferred asset and the associated liability.(h) Determination of fair value of financial instruments

Determination of financial assets and financial liabilities please refer to Note 3.11

3.11 Fair Value Measurement

Fair value refers to the price that would be received to sell an asset or paid to transfer a liability in an orderly

transaction between market participants at the measurement date.The Company determines fair value of the related assets and liabilities based on market value in the principal

market or in the absence of a principal market in the most advantageous market price for the related asset or

liability. The fair value of an asset or a liability is measured using the assumptions that market participants would

use when pricing the asset or liability assuming that market participants act in their economic best interest.The principal market is the market in which transactions for an asset or liability take place with the greatest

volume and frequency. The most advantageous market is the market which maximizes the value that could be

received from selling the asset and minimizes the value which is needed to be paid in order to transfer a liability

considering the effect of transport costs and transaction costs both.~ 104 ~Interim Report 2023

If the active market of the financial asset or financial liability exists the Company shall measure the fair value

using the quoted price in the active market. If the active market of the financial instrument is not available the

Company shall measure the fair value using valuation techniques.A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate

economic benefits by using the asset in its highest and best use or by selling it to another market participant that

would use the asset in its highest and best use.? Valuation techniques

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are

available to measure fair value including the market approach the income approach and the cost approach. The

Company shall use valuation techniques consistent with one or more of those approaches to measure fair value. If

multiple valuation techniques are used to measure fair value the results shall be evaluated considering the

reasonableness of the range of values indicated by those results. A fair value measurement is the point within that

range that is most representative of fair value in the circumstances.When using the valuation technique the Company shall give the priority to relevant observable inputs. The

unobservable inputs can only be used when relevant observable inputs is not available or practically would not be

obtained. Observable inputs refer to the information which is available from market and reflects the assumptions

that market participants would use when pricing the asset or liability. Unobservable Inputs refer to the information

which is not available from market and it has to be developed using the best information available in the

circumstances from the assumptions that market participants would use when pricing the asset or liability.? Fair value hierarchy

To Company establishes a fair value hierarchy that categorises into three levels the inputs to valuation techniques

used to measure fair value. The fair value hierarchy gives the highest priority to Level 1 inputs and second to the

Level 2 inputs and the lowest priority to Level 3 inputs. Level 1 inputs are quoted prices (unadjusted) in active

markets for identical assets or liabilities that the entity can access at the measurement date. Level 2 inputs are

inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly

or indirectly. Level 3 inputs are unobservable inputs for the asset or liability.

3.12 Inventories

(a) Classification of inventories

Inventories are finished goods or products held for sale in the ordinary course of business in the process of

production for such sale or in the form of materials or supplies to be consumed in the production process or in the

rendering of services including raw materials work in progress semi-finished goods finished goods goods in

stock turnover material etc.(b) Measurement method of cost of inventories sold or used

~ 105 ~Interim Report 2023

Inventories are initially measured at the actual cost. Cost of inventories includes purchase cost processing cost

and other costs. Cost of the issue is measured using the weighted average method.(c) Inventory system

The perpetual inventory system is adopted. The inventories should be counted at least once a year and surplus or

losses of inventory stocktaking shall be included in current profit and loss.(d) Provision for impairment of inventory

Inventories are stated at the lower of cost and net realizable value. The excess of cost over net realizable value of

the inventories is recognised as provision for impairment of inventory and recognised in current profit or loss.Net realizable value of the inventory should be determined on the basis of reliable evidence obtained and factors

such as purpose of holding the inventory and impact of post balance sheet event shall be considered.(i) In normal operation process finished goods products and materials for direct sale their net realizable values

are determined at estimated selling prices less estimated selling expenses and relevant taxes and surcharges; for

inventories held to execute sales contract or service contract their net realizable values are calculated on the basis

of contract price. If the quantities of inventories specified in sales contracts are less than the quantities held by the

Company the net realizable value of the excess portion of inventories shall be based on general selling prices. Net

realizable value of materials held for sale shall be measured based on market price.(ii) For materials in stock need to be processed in the ordinary course of production and business net realisable

value is determined at the estimated selling price less the estimated costs of completion the estimated selling

expenses and relevant taxes. If the net realisable value of the finished products produced by such materials is

higher than the cost the materials shall be measured at cost; if a decline in the price of materials indicates that the

cost of the finished products exceeds its net realisable value the materials are measured at net realisable value and

differences shall be recognised at the provision for impairment.(iii) Provisions for inventory impairment are generally determined on an individual basis. For inventories with

large quantity and low unit price the provisions for inventory impairment are determined on a category basis.(iv) If any factor rendering write-downs of the inventories has been eliminated at the reporting date the amounts

written down are recovered and reversed to the extent of the inventory impairment which has been provided for.The reversal shall be included in profit or loss.(e) Amortization method of low-value consumables

Low-value consumables: One-off writing off method is adopted

Package material: One-off writing off method is adopted

3.13 Contract assets and contract liabilities

Contract assets and contract liabilities are reocgnised on the basis of fulfilment of performance obligations and

payment received from clients. A right to receive a promised consideration from a client resulting from goods

transferred to or services provided to the client (where the right to consideration is dependent on factors other than

~ 106 ~Interim Report 2023

the passage of time) is reocgnised a contract asset. A payment received from a client for which goods shall be

transferred to or services shall be provided to the client is recognised as a contract liability.See Note 3.10 for the determination method and accounting treatment method of impairment of contract assets.Contract assets and contract liabilities are presentd as line items on the statement of financial position. A contract

asset and contract liability arising from one contract are presented in net; while the net amount is a debit balance

it is presented in contract assets or other non-current assets depending on liquidity; while the net amount is a

credit balance it is presented in contract liabilities or other non-current liabilities depending on liquidity. Contract

assets and contract liabilities arising form different contracts are not be offset.

3.14 Contract costs

Costs for a contract include costs to fulfill the contract and costs to obtain the contract.An asset is recognised for the costs incurred to fulfill a contract on if those costs meet all of the following criteria:

I. the costs are directly associated with a contract or an anticipated contract explicitly chargeable to the client

under the contract incurred only for the contract;

II. the costs generate or enhance resouces of the Company that will be used in satisfying performance

obligations in the future; and

III. the costs are expected to be recovered.An asset is recognised for the costs incurred to obtained a contract with a client if those costs are expected to be

recovered.An asset recognised for the costs of a contract are amortised on a systematic basis that is consistent with

recognition of revenue arising from the contract. Where the costs incurred to obtain a contract would be amortised

for a period less than one year should they be recognised as an asset the costs are recognised in the current profit

or loss as incurred.An impairment is recognised for an asset recognised for the costs of a contract to the extent that the carrying

amount of the asset exceeds:

I. the remaining amount of consideration that is expected to be received in exchange for the goods or services

to which the asset relates; less

II. the costs that relate directly to providing those goods or services and that have not been recognised as

expenses.Upon recognition of the impairment further consideration is given for provision for an onerous contract in

necessary.A reversal of some or all of an impairment loss previously recognised for an asset for the costs of a contract when

~ 107 ~Interim Report 2023

the impairment conditions no longer exist or have improved. The increased carrying amount of the asset is

cappted by the amount that would have been determined (net of amortisation) if no impairment loss had been

recognised previously.An asset recognised for the costs to fulfill a contract is presented in inventories if its amortisation is not longer

than 1 year or an operating cycle upon initial recognition; otherwise it is presented in other non-current assets.An asset recognised for the costs to obtain a contract is presented in other current assets if its amortisation is not

longer than 1 year or an operating cycle upon initial recognition; otherwise it is presented in other non-current

assets.

3.15 Long-term Equity Investments

Long-term equity investments refer to equity investments where an investor has control of or significant influence

over an investee as well as equity investments in joint ventures. Associates of the Company are those entities

over which the Company has significant influence.(a) Determination basis of joint control or significant influence over the investee

Joint control is the relevant agreed sharing of control over an arrangement and the arranged relevant activity must

be decided under unanimous consent of the parties sharing control. In assessing whether the Company has joint

control of an arrangement the Company shall assess first whether all the parties or a group of the parties control

the arrangement. When all the parties or a group of the parties considered collectively are able to direct the

activities of the arrangement the parties control the arrangement collectively. Then the Company shall assess

whether decisions about the relevant activities require the unanimous consent of the parties that collectively

control the arrangement. If two or more groups of the parties could control the arrangement collectively it shall

not be assessed as have joint control of the arrangement. When assessing the joint control the protective rights are

not considered.Significant influence is the power to participate in the financial and operating policy decisions of the investee but

is not control or joint control of those policies. In determination of significant influence over an investee the

Company should consider not only the existing voting rights directly or indirectly held but also the effect of

potential voting rights held by the Company and other entities that could be currently exercised or converted

including the effect of share warrants share options and convertible corporate bonds that issued by the investee

and could be converted in current period.If the Company holds directly or indirectly 20% or more but less than 50% of the voting power of the investee it

is presumed that the Company has significant influence of the investee unless it can be clearly demonstrated that

in such circumstance the Company cannot participate in the decision-making in the production and operating of

the investee.(b) Determination of initial investment cost

~ 108 ~Interim Report 2023

(i) Long-term equity investments generated in business combinations

For a business combination involving enterprises under common control if the Company makes payment in cash

transfers non-cash assets or bears liabilities as the consideration for the business combination the share of

carrying amount of the owners’ equity of the acquiree in the consolidated financial statements of the ultimate

controlling party is recognised as the initial cost of the long-term equity investment on the combination date. The

difference between the initial investment cost and the carrying amount of cash paid non-cash assets transferred

and liabilities assumed shall be adjusted against the capital reserve; if capital reserve is not enough to be offset

undistributed profit shall be offset in turn.For a business combination involving enterprises under common control if the Company issues equity securities

as the consideration for the business combination the share of carrying amount of the owners’ equity of the

acquiree in the consolidated financial statements of the ultimate controlling party is recognised as the initial cost

of the long-term equity investment on the combination date. The total par value of the shares issued is recognised

as the share capital. The difference between the initial investment cost and the carrying amount of the total par

value of the shares issued shall be adjusted against the capital reserve; if capital reserve is not enough to be offset

undistributed profit shall be offset in turn.For business combination not under common control the assets paid liabilities incurred or assumed and the fair

value of equity securities issued to obtain the control of the acquiree at the acquisition date shall be determined as

the cost of the business combination and recognised as the initial cost of the long-term equity investment. The

audit legal valuation and advisory fees other intermediary fees and other relevant general administrative costs

incurred for the business combination shall be recognised in profit or loss as incurred.(ii) Long-term equity investments acquired not through the business combination the investment cost shall be

determined based on the following requirements:

For long-term equity investments acquired by payments in cash the initial cost is the actually paid purchase cost

including the expenses taxes and other necessary expenditures directly related to the acquisition of long-term

equity investments.For long-term equity investments acquired through issuance of equity securities the initial cost is the fair value of

the issued equity securities.For the long-term equity investments obtained through exchange of non-monetary assets if the exchange has

commercial substance and the fair values of assets traded out and traded in can be measured reliably the initial

cost of long-term equity investment traded in with non-monetary assets are determined based on the fair values of

the assets traded out together with relevant taxes. Difference between fair value and book value of the assets

traded out is recorded in current profit or loss. If the exchange of non-monetary assets does not meet the above

criterion the book value of the assets traded out and relevant taxes are recognised as the initial investment cost.For long-term equity investment acquired through debt restructuring the initial cost is determined based on the

~ 109 ~Interim Report 2023

fair value of the equity obtained and the difference between initial investment cost and carrying amount of debts

shall be recorded in current profit or loss.(c) Subsequent measurement and recognition of profit or loss

Long-term equity investment to an entity over which the Company has ability of control shall be accounted for at

cost method. Long-term equity investment to a joint venture or an associate shall be accounted for at equity

method.(i) Cost method

For Long-term equity investment at cost method cost of the long-term equity investment shall be adjusted when

additional amount is invested or a part of it is withdrawn. The Company recognises its share of cash dividends or

profits which have been declared to distribute by the investee as current investment income.(ii) Equity method

If the initial cost of the investment is in excess of the share of the fair value of the net identifiable assets in the

investee at the date of investment the difference shall not be adjusted to the initial cost of long-term equity

investment; if the initial cost of the investment is in short of the share of the fair value of the net identifiable assets

in the investee at the date investment the difference shall be included in the current profit or loss and the initial

cost of the long-term equity investment shall be adjusted accordingly.The Company recognises the share of the investee’s net profits or losses as well as its share of the investee’s

other comprehensive income as investment income or losses and other comprehensive income respectively and

adjusts the carrying amount of the investment accordingly. The carrying amount of the investment shall be

reduced by the share of any profit or cash dividends declared to distribute by the investee. The investor’s share of

the investee’s owners’ equity changes other than those arising from the investee’s net profit or loss other

comprehensive income or profit distribution shall be recognised in the investor’s equity and the carrying amount

of the long-term equity investment shall be adjusted accordingly. The Company recognises its share of the

investee’s net profits or losses after making appropriate adjustments of investee’s net profit based on the fair

values of the investee’s identifiable net assets at the investment date. If the accounting policy and accounting

period adopted by the investee is not in consistency with the Company the financial statements of the investee

shall be adjusted according to the Company’s accounting policies and accounting period based on which

investment income or loss and other comprehensive income etc. shall be adjusted. The unrealized profits or

losses resulting from inter-company transactions between the company and its associate or joint venture are

eliminated in proportion to the company’s equity interest in the investee based on which investment income or

losses shall be recognised. Any losses resulting from inter-company transactions between the investor and the

investee which belong to asset impairment shall be recognised in full.Where the Company obtains the power of joint control or significant influence but not control over the investee

due to additional investment or other reason the relevant long-term equity investment shall be accounted for by

~ 110 ~Interim Report 2023

using the equity method initial cost of which shall be the fair value of the original investment plus the additional

investment. Where the original investment is classified as investments in other equity instrument difference

between its fair value and the carrying value in addition to the cumulative gains or losses previously recorded in

other comprehensive income shall be transferred from other comprehensive income and recorded in retained

earnings during the current period using equity method.If the Company loses the joint control or significant influence of the investee for some reasons such as disposal of

equity investment the retained interest shall be measured at fair value and the difference between the carrying

amount and the fair value at the date of loss the joint control or significant influence shall be recognised in profit

or loss. When the Company discontinues the use of the equity method the Company shall account for all amounts

previously recognised in other comprehensive income under equity method in relation to that investment on the

same basis as would have been required if the investee had directly disposed of the related assets or liabilities.(d) Equity investment classified as held for sale

Any retained interest in the equity investment not classified as held for sale shall be accounted for using equity

method.When an equity investment in an associate or a joint venture previously classified as held for sale no longer meets

the criteria to be so classified it shall be accounted for using the equity method retrospectively as from the date of

its classification as held for sale. Financial statements for the periods since classification as held for sale shall be

amended accordingly.(f) Impairment testing and provision for impairment loss

For investment in subsidiaries associates or a joint venture provision for impairment loss please refer to Note

3.22.

3.16 Investment Properties

(a) Classification of investment properties

Investment properties are properties to earn rentals or for capital appreciation or both including:

(i)Land use right leased out

(ii)Land held for transfer upon appreciation

(iii)Buildings leased out

(b) The measurement model of investment property

The Company adopts the cost model for subsequent measurement of investment properties. For provision for

impairment please refer to Note 3.22.The Company calculates the depreciation or amortization based on the net amount of investment property cost less

the accumulated impairment and the net residual value using straight-line method.

3.17 Fixed Assets

Fixed assets refer to the tangible assets with higher unit price held for the purpose of producing commodities

~ 111 ~Interim Report 2023

rendering services renting or business management with useful lives exceeding one year.(a) Recognition criteria of fixed assets

Fixed assets will only be recognised at the actual cost paid when obtaining as all the following criteria are

satisfied:

(i) It is probable that the economic benefits relating to the fixed assets will flow into the Company;

(ii) The costs of the fixed assets can be measured reliably.Subsequent expenditure for fixed assets shall be recorded in cost of fixed assets if recognition criteria of fixed

assets are satisfied otherwise the expenditure shall be recorded in current profit or loss when incurred.(b) Depreciation methods of fixed assets

The Company begins to depreciate the fixed asset from the next month after it is available for intended use using

the straight-line-method. The estimated useful life and annual depreciation rates which are determined according

to the categories estimated economic useful lives and estimated net residual rates of fixed assets are listed as

followings:

Estimated useful life Residual Annual depreciation

Category Depreciation method

(year) rates (%) rates (%)

Buildings and

straight-line-method 8.00-35.00 3.00-5.00 2.70-12.10

constructions

Machinery equipment straight-line-method 8.00-10.00 3.00-5.00 9.50-12.10

Vehicles straight-line-method 4.00 3.00 24.25

Office equipment and

straight-line-method 3.00 3.00 32.33

others

For the fixed assets with impairment provided the impairment provision should be excluded from the cost when

calculating depreciation.At the end of reporting period the Company shall review the useful life estimated net residual value and

depreciation method of the fixed assets. Estimated useful life of the fixed assets shall be adjusted if it is changed

compared to the original estimation.(c) Recognition criteria valuation and depreciation methods of fixed assets obtained through a finance

lease

If the entire risk and rewards related to the leased assets have been substantially transferred the Company shall

recognise the lease as a finance lease. The cost of the fixed assets obtained through a finance lease is determined

at the lower of the fair value of the leased assets and the present value of the minimum lease payment on the date

of the lease. The fixed assets obtained by a finance lease are depreciated in the method which is consistent with

the self-owned fixed assets of the Company. For fixed assets obtained through a finance lease if it is reasonably

~ 112 ~Interim Report 2023

certain that the ownership of the leased assets will be transferred to the lessee by the end of the lease term they

shall be depreciated over their remaining useful lives; otherwise the leased assets shall be depreciated over the

shorter of the lease terms or their remaining useful lives.

3.18 Construction in Progress

(a) Classification of construction in progress

Construction in progress is measured on an individual project basis.(b) Recognition criteria and timing of transfer from construction in progress to fixed assets

The initial book values of the fixed assets are stated at total expenditures incurred before they are ready for their

intended use including construction costs original price of machinery equipment other necessary expenses

incurred to bring the construction in progress to get ready for its intended use and borrowing costs of the specific

loan for the construction or the proportion of the general loan used for the constructions incurred before they are

ready for their intended use. The construction in progress shall be transferred to fixed asset when the installation

or construction is ready for the intended use. For construction in progress that has been ready for their intended

use but relevant budgets for the completion of projects have not been completed the estimated values of project

budgets prices or actual costs should be included in the costs of relevant fixed assets and depreciation should be

provided according to relevant policies of the Company when the fixed assets are ready for intended use. After the

completion of budgets needed for the completion of projects the estimated values should be substituted by actual

costs but depreciation already provided is not adjusted.

3.19 Right-of-use assets

The Company initially measures right-of-use assets at cost which includes:

(1) The initial measurement amount of the lease obligation.

(2) If a lease incentive exists for lease payments made on or before the commencement date of the lease term the

amount related to the lease incentive already taken is deducted.

(3) Initial direct costs incurred by the Company.

(4) Costs expected to be incurred by the Company to disassemble and remove the leasehold property restore the

site where the leasehold property is located or restore the leasehold property to the condition agreed upon under

the terms of the lease (excluding costs incurred to produce inventory). Subsequent to the commencement date of

the lease term the Company uses the cost model for subsequent measurement of right-of-use assets.If it is reasonably certain that ownership of the leasehold property will be obtained at the end of the lease term the

Company depreciates the leasehold property over its remaining service life.If it may not be reasonably ascertained that ownership of the leasehold property can be obtained at the end of the

lease term the Company will depreciate the leasehold property over the shorter of

~ 113 ~Interim Report 2023

the lease term or the remaining service life of the leasehold property. Right-of-use assets for which depreciation

reserves have been made are depreciated in future periods at their carrying amounts net of depreciation reserves

with reference to the above principles.

3.20 Borrowing Costs

(a) Recognition criteria and period for capitalization of borrowing costs

The Company shall capitalize the borrowing costs that are directly attributable to the acquisition construction or

production of qualifying assets when meet the following conditions:

(i) Expenditures for the asset are being incurred;

(ii) Borrowing costs are being incurred and;

(iii) Acquisition construction or production activities that are necessary to prepare the assets for their intended use

or sale are in progress.Other borrowing cost discounts or premiums on borrowings and exchange differences on foreign currency

borrowings shall be recognized into current profit or loss when incurred.Capitalization of borrowing costs is suspended during periods in which the acquisition construction or production

of a qualifying asset is interrupted abnormally and the interruption is for a continuous period of more than 3

months.Capitalization of such borrowing costs ceases when the qualifying assets being acquired constructed or produced

become ready for their intended use or sale. The expenditure incurred subsequently shall be recognised as

expenses when incurred.(b) Capitalization rate and measurement of capitalized amounts of borrowing costs

When funds are borrowed specifically for purchase construction or manufacturing of assets eligible for

capitalization the Company shall determine the amount of borrowing costs eligible for capitalisation as the actual

borrowing costs incurred on that borrowing during the period less any interest income on bank deposit or

investment income on the temporary investment of those borrowings.Where funds allocated for purchase construction or manufacturing of assets eligible for capitalization are part of a

general borrowing the eligible amounts are determined by the weighted-average of the cumulative capital

expenditures in excess of the specific borrowing multiplied by the general borrowing capitalization rate. The

capitalization rate will be the weighted average of the borrowing costs applicable to the general borrowing.

3.21 Intangible Assets

(a) Measurement method of intangible assets

Intangible assets are recognised at actual cost at acquisition.(b) The useful life and amortisation of intangible assets

(i) The estimated useful lives of the intangible assets with finite useful lives are as follows:

Category Estimated useful life Basis

~ 114 ~Interim Report 2023

Category Estimated useful life Basis

Land use right 40-50 years Legal life

The service life is determined by reference to the period that

Patent right 10 years

can bring economic benefits to the Company

The service life is determined by reference to the period that

Software 3-5 years

can bring economic benefits to the Company

The service life is determined by reference to the period that

Trademark 10 years

can bring economic benefits to the Company

For intangible assets with finite useful life the estimated useful life and amortisation method are reviewed

annually at the end of each reporting period and adjusted when necessary. No change incurred in current year in

the estimated useful life and amortisation method upon review.(ii) Assets of which the period to bring economic benefits to the Company are unforeseeable are regarded as

intangible assets with indefinite useful lives. The Company reassesses the useful lives of those assets at every year

end. If the useful lives of those assets are still indefinite impairment test should be performed on those assets at

the balance sheet date.(iii) Amortisation of the intangible assets

For intangible assets with finite useful lives their useful lives should be determined upon their acquisition and

systematically amortised on a straight-line basis over the useful life. The amortisation amount shall be recognized

into current profit or loss according to the beneficial items. The amount to be amortised is cost deducting residual

value. For intangible assets which has impaired the cumulative impairment provision shall be deducted as well.The residual value of an intangible asset with a finite useful life shall be assumed to be zero unless: there is a

commitment by a third party to purchase the asset at the end of its useful life; or there is an active market for the

asset and residual value can be determined by reference to that market; and it is probable that such a market will

exist at the end of the asset’s useful life.Intangible assets with indefinite useful lives shall not be amortised. The Company reassesses the useful lives of

those assets at every year end. If there is evidence to indicate that the useful lives of those assets become finite

the useful lives shall be estimated and the intangible assets shall be amortised systematically and reasonably

within the estimated useful lives.(c) Criteria of classifying expenditures on internal research and development projects into research phase

and development phase

Preparation activities related to materials and other relevant aspects undertaken by the Company for the purpose

of further development shall be treated as research phase. Expenditures incurred during the research phase of

internal research and development projects shall be recognised in profit or loss when incurred.Development activities after the research phase of the Company shall be treated as development phase.~ 115 ~Interim Report 2023

(d) Criteria for capitalization of qualifying expenditures during the development phase

Expenditures arising from development phase on internal research and development projects shall be recognised

as intangible assets only if all of the following conditions have been met:

(i) Technical feasibility of completing the intangible assets so that they will be available for use or sale;

(ii) Its intention to complete the intangible asset and use or sell it;

(iii) The method that the intangible assets generate economic benefits including the Company can demonstrate

the existence of a market for the output of the intangible assets or the intangible assets themselves or if it is to be

used internally the usefulness of the intangible assets;

(iv) The availability of adequate technical financial and other resources to complete the development and to use

or sell the intangible asset; and

(v) Its ability to measure reliably the expenditure attributable to the intangible asset.

3.22 Impairment of Long-Term Assets

Impairment loss of long-term equity investment in subsidiaries associates and joint ventures investment

properties fixed assets and constructions in progress subsequently measured at cost intangible assets shall be

determined according to following method:

The Company shall assess at the end of each reporting period whether there is any indication that an asset may be

impaired. If any such indication exists the Company shall estimate the recoverable amount of the asset and test

for impairment. Irrespective of whether there is any indication of impairment the Company shall test for

impairment of goodwill acquired in a business combination intangible assets with an indefinite useful life or

intangible assets not yet available for use annually.The recoverable amounts of the long-term assets are the higher of their fair values less costs to dispose and the

present values of the estimated future cash flows of the long-term assets. The Company estimate the recoverable

amounts on an individual basis. If it is difficult to estimate the recoverable amount of the individual asset the

Company estimates the recoverable amount of the groups of assets that the individual asset belongs to.Identification of an group of asset is based on whether the cash inflows from it are largely independent of the cash

inflows from other assets or groups of assets.If and only if the recoverable amount of an asset or a group of assets is less than its carrying amount the carrying

amount of the asset shall be reduced to its recoverable amount and the provision for impairment loss shall be

recognised accordingly.For the purpose of impairment testing goodwill acquired in a business combination shall from the acquisition

date be allocated to relevant group of assets based on reasonable method; if it is difficult to allocate to relevant

group of assets good will shall be allocated to relevant combination of asset groups. The relevant group of assets

or combination of asset groups is a group of assets or combination of asset groups that is benefit from the

synergies of the business combination and is not larger than the reporting segment determined by the Company.~ 116 ~Interim Report 2023

When test for impairment if there is an indication that relevant group of assets or combination of asset groups

may be impaired impairment testing for group of assets or combination of asset groups excluding goodwill shall

be conducted first and calculate the recoverable amount and recognize the impairment loss. Then the group of

assets or combination of asset groups including goodwill shall be tested for impairment by comparing the

carrying amount with its recoverable amount. If the recoverable amount is less than the carrying amount the

Company shall recognise the impairment loss.The mentioned impairment loss will not be reversed in subsequent accounting period once it had been recognised.

3.23 Long-term Deferred Expenses

Long-term deferred expenses are various expenses already incurred which shall be amortised over current and

subsequent periods with the amortisation period exceeding one year. Long-term deferred expenses are evenly

amortised over the beneficial period

3.24 Employee Benefits

Employee benefits refer to all forms of consideration or compensation given by the Company in exchange for

service rendered by employees or for the termination of employment relationship. Employee benefits include

short-term employee benefits post-employment benefits termination benefits and other long-term employee

benefits. Benefits provided to an employee's spouse children dependents family members of decreased

employees or other beneficiaries are also employee benefits.According to liquidity employee benefits are presented in the statement of financial position as “Employeebenefits payable” and “Long-term employee benefits payable”.(a) Short-term employee benefits

(i) Employee basic salary (salary bonus allowance subsidy)

The Company recognises in the accounting period in which an employee provides service actually occurred

short-term employee benefits as a liability with a corresponding charge to current profit except for those

recognised as capital expenditure based on the requirement of accounting standards.(ii) Employee welfare

The Company shall recognise the employee welfare based on actual amount when incurred into current profit or

loss or related capital expenditure. Employee welfare shall be measured at fair value as it is a non-monetary

benefit.(iii) Social insurance such as medical insurance and work injury insurance housing funds labor union fund and

employee education fund

Payments made by the Company of social insurance for employees such as medical insurance and work injury

insurance payments of housing funds and labor union fund and employee education fund accrued in accordance

with relevant requirements in the accounting period in which employees provide services is calculated according

to required accrual bases and accrual ratio in determining the amount of employee benefits and the related

~ 117 ~Interim Report 2023

liabilities which shall be recognised in current profit or loss or the cost of relevant asset.(iv) Short-term paid absences

The company shall recognise the related employee benefits arising from accumulating paid absences when the

employees render service that increases their entitlement to future paid absences. The additional payable amounts

shall be measured at the expected additional payments as a result of the unused entitlement that has accumulated.The Company shall recognise relevant employee benefit of non-accumulating paid absences when the absences

actually occurred.(v) Short-term profit-sharing plan

The Company shall recognise the related employee benefits payable under a profit-sharing plan when all of the

following conditions are satisfied:

(i) The Company has a present legal or constructive obligation to make such payments as a result of past events;

and

(ii) A reliable estimate of the amounts of employee benefits obligation arising from the profit- sharing plan can be

made.(b) Post-employment benefits

(i) Defined contribution plans

The Company shall recognise in the accounting period in which an employee provides service the contribution

payable to a defined contribution plan as a liability with a corresponding charge to the current profit or loss or the

cost of a relevant asset.When contributions to a defined contribution plan are not expected to be settled wholly before twelve months

after the end of the annual reporting period in which the employees render the related service they shall be

discounted using relevant discount rate (market yields at the end of the reporting period on high quality corporate

bonds in active market or government bonds with the currency and term which shall be consistent with the

currency and estimated term of the defined contribution obligations) to measure employee benefits payable.(ii) Defined benefit plan

The present value of defined benefit obligation and current service costs

Based on the expected accumulative welfare unit method the Company shall make estimates about demographic

variables and financial variables in adopting the unbiased and consistent actuarial assumptions and measure

defined benefit obligation and determine the obligation period. The Company shall discount the obligation arising

from defined benefit plan using relevant discount rate (market yields at the end of the reporting period on high

quality corporate bonds in active market or government bonds with the currency and term which shall be

consistent with the currency and estimated term of the defined benefit obligations) in order to determine the

present value of the defined benefit obligation and the current service cost.The net defined benefit liability or asset

~ 118 ~Interim Report 2023

The net defined benefit liability (asset) is the deficit or surplus recognised as the present value of the defined

benefit obligation less the fair value of plan assets (if any).When the Company has a surplus in a defined benefit plan it shall measure the net defined benefit asset at the

lower of the surplus in the defined benefit plan and the asset ceiling.The amount recognised in the cost of asset or current profit or loss

Service cost comprises current service cost past service cost and any gain or loss on settlement. Other service cost

shall be recognised in profit or loss unless accounting standards require or allow the inclusion of current service

cost within the cost of assets.Net interest on the net defined benefit liability (asset) comprising interest income on plan assets interest cost on

the defined benefit obligation and interest on the effect of the asset ceiling shall be included in profit or loss.The amount recognised in other comprehensive income

Changes in the net liability or asset of the defined benefit plan resulting from the remeasurements including:

? Actuarial gains and losses the changes in the present value of the defined benefit obligation resulting from

experience adjustments or the effects of changes in actuarial assumptions;

? Return on plan assets excluding amounts included in net interest on the net defined benefit liability or asset;

? Any change in the effect of the asset ceiling excluding amounts included in net interest on the net defined benefit

liability (asset).Remeasurements of the net defined benefit liability (asset) recognised in other comprehensive income shall not be

reclassified to profit or loss in a subsequent period. However the Company may transfer those amounts

recognised in other comprehensive income within equity.(c) Termination benefits

The Company providing termination benefits to employees shall recognise an employee benefits liability for

termination benefits with a corresponding charge to the profit or loss of the reporting period at the earlier of the

following dates:

(i) When the Company cannot unilaterally withdraw the offer of termination benefits because of an employment

termination plan or a curtailment proposal.(ii) When the Company recognises costs or expenses related to a restructuring that involves the payment of

termination benefits.If the termination benefits are not expected to be settled wholly before twelve months after the end of the annual

reporting period the Company shall discount the termination benefits using relevant discount rate (market yields

at the end of the reporting period on high quality corporate bonds in active market or government bonds with the

currency and term which shall be consistent with the currency and estimated term of the defined benefit

obligations) to measure the employee benefits.(d) Other long-term employee benefits

~ 119 ~Interim Report 2023

(i) Meet the conditions of the defined contribution plan

When other long-term employee benefits provided by the Company to the employees satisfies the conditions for

classifying as a defined contribution plan all those benefits payable shall be accounted for as employee benefits

payable at their discounted value.(ii) Meet the conditions of the defined benefit plan

At the end of the reporting period the Company recognised the cost of employee benefit from other long-term

employee benefits as the following components:

? Service costs;

? Net interest cost for net liability or asset of other long-term employee benefits

? Changes resulting from the remeasurements of the net liability or asset of other long-term employee benefits

In order to simplify the accounting treatment the net amount of above items shall be recognised in profit or loss

or relevant cost of assets.

3.25 Lease Liabilities

The Company initially measures the lease obligation at the present value of the lease payments outstanding at the

commencement date of the lease term. When calculating the present value of lease paymentsthe Company uses

the interest rate implicit in lease as the rate of discount. If the interest rate implicit in lease cannot be determined

the Company's incremental lending rate is used as the rate of discount. Lease payments include:

(1) The amount of fixed payments net of amounts related to lease incentives and the amount of substantive fixed

payments.

(2) Variable lease payments that depend on indexation or ratio.

(3) The lease payment amount includes the exercise price of the purchase option if the Company is reasonably

certain that the option will be exercised.

(4) Where the lease term reflects that the Company will exercise the option to terminate the lease the lease

payment amount includes the amount required to be paid to exercise the option to terminate the lease.

(5) Estimated amount payable based on the residual value of the guarantee provided by the Company.

The Company calculates the interest expense on the lease obligation for each period of the lease term at a fixed

rate of discount and includes it in the current profit or loss or cost of the related assets. Variable lease payments

that are not included in the measurement of the lease obligation should be charged to current profit or loss or the

cost of the related assets when they are actually incurred.

3.26 Estimated Liabilities

(a) Recognition criteria of estimated liabilities

The Company recognises the estimated liabilities when obligations related to contingencies satisfy all the

following conditions:

(i) That obligation is a current obligation of the Company;

~ 120 ~Interim Report 2023

(ii) It is likely to cause any economic benefit to flow out of the Company as a result of performance of the

obligation; and

(iii) The amount of the obligation can be measured reliably.(b) Measurement method of estimated liabilities

The estimated liabilities of the Company are initially measured at the best estimate of expenses required for the

performance of relevant present obligations. The Company when determining the best estimate has had a

comprehensive consideration of risks with respect to contingencies uncertainties and the time value of money.The carrying amount of the estimated liabilities shall be reviewed at the end of every reporting period. If

conclusive evidences indicate that the carrying amount fails to be the best estimate of the estimated liabilities the

carrying amount shall be adjusted based on the updated best estimate.

3.27 Revenue Recognition Principle and Measurement

3.27.1 General principle

Revenue is the total inflow of economic benefits formed in the company's daily activities that will increase

shareholders' equity and does not relate to the capital invested by shareholders.The Company has fulfilled the performance obligation in the contract that is the revenue is recognised when the

customer obtains the control right of relevant goods. To obtain the control right of the relevant commodity means

to be able to dominate the use of the commodity and obtain almost all the economic benefits from it.If there are two or more performance obligations in the contract the Company will allocate the transaction price

to each performance obligation based on the relative proportion of the separate selling price of the goods or

services promised by each performance obligation on the start date of the contract and measure the income based

on the transaction price allocated to each single performance obligation.The transaction price refers to the amount of consideration that the Company is expected to be entitled to receive

due to the transfer of goods or services to customers excluding payments collected on behalf of third parties.When determining the transaction price of the contract the Company determines the transaction price according

to the terms of the contract and in combination with its historical practices. When determining the transaction

price the Company takes into account the influence of variable considerations significant financing elements in

the contract the non-cash considerations the considerations payable to customers and other factors. The

Company determines the transaction price including variable consideration at an amount that does not exceed the

amount at which the accumulated recognized income is unlikely to have a significant reversal when the relevant

uncertainty is eliminated. If there is a significant financing component in the contract the Company will

determine the transaction price based on the amount payable in cash when the customer obtains the control right

~ 121 ~Interim Report 2023

of the commodity. The difference between the transaction price and the contract consideration will be amortised

by the effective interest method during the contract period. If the interval between the control right transfer and

the customer's payment is less than one year the company will not consider the financing component.If one of the following conditions is met the performance obligation shall be fulfilled within a certain period of

time; otherwise the performance obligation shall be fulfilled at a certain point of time:

(a) The customer obtains and consumes the economic benefits brought by the Company's fulfillment of contract

when the Company performs the obligations;

(b) The customer can control the commodities under construction during the Company's execution of the

contract;

(c) The commodities produced by the Company during the performance of the contract have irreplaceable uses

and the Company has the right to collect payment for the cumulative performance part that has been completed

so far during the entire contract period.For performance obligations fulfilled within a certain period of time the Company recognises revenue in

accordance with the performance progress during that period except where the performance progress cannot be

reasonably determined. The Company determines the progress of the performance of services in accordance with

the input method (or output method). When the progress of the contract performance cannot be reasonably

determined if the cost incurred by the Company is expected to be compensated the revenue shall be recognised

according to the amount of the cost incurred until the progress of the contract performance can be reasonably

determined.For performance obligations fulfilled at a certain point in time the Company recognises revenue at the point when

the customer obtains control of the relevant commodities. The Company considers the following signs when

judging whether a customer has obtained control of goods or services:

(a)The Company has the current right to receive payment for the goods or services that is the customer has the

current obligation to pay for the goods;

(b) The Company has transferred the legal ownership of the goods to the customer that is the customer has the

legal ownership of the goods;

(c) The Company has transferred the goods in kind to the customer that is the customer has possessed the

goods in kind;

(d) The company has transferred the main risks and rewards of the ownership of the goods to the customers that

is the customers have obtained the main risks and rewards of the ownership of the goods;

(e) The customer has accepted the goods or services.~ 122 ~Interim Report 2023

(f) Other indications that the customer has obtained control of the product

3.27.2 Specific methods

The specific methods of the Company's revenue recognition are as follows:

(a) Revenue from sale of goods

The sale contract between the Company and its customers is an obligation fulfilled within a certain period in time.The following requirements shall be met to recognize the revenue of products: The Company has delivered the

goods to the customer in accordance with the contract and the customer has accepted the goods. The payment has

been recovered or the receipt voucher has been obtained and the relevant economic benefits are likely to flow in.The main risks and rewards of product ownership have been transferred. The legal ownership of the goods has

been transferred.(b) Revenue from rendering of services

The customer simultaneously receives and consumes the economic benefits provided by the Company’s

performance as the Company fulfills obligation. For the performance obligations fulfilled within a certain period

of time the Company recognizes the revenue according to the performance progress when providing technical

services.If the customer is unable to immediately obtain and consume the economic benefits provided by the Company’s

performance as the Company fulfills obligation and the Company has no right to receive the revenue from the

accumulated performance that has been completed so far throughout the entire contract period the Company will

consider it as a performance obligation to be fulfilled at a certain point in time. When the Company completes

technical services according to the contract agreement the company recognizes revenue.(c) Revenue from alienating the right to use assets

When the economic benefits relevant to the transaction are likely to flow into the Company and the amount of

revenue can be reliably measured the transfer of asset use rights shall be recognized as the amount of revenue.The revenue from the transfer of asset use rights by the Company mainly comes from the rental of premises and

tenements which is calculated and recognized according to the charging time and method stipulated in relevant

contracts or agreements.

3.28 Government Grants

(a) Recognition of government grants

A government grant shall not be recgonised until there is reasonable assurance that:

(i) The Company will comply with the conditions attaching to them; and

~ 123 ~Interim Report 2023

(ii) The grants will be received.(b) Measurement of government grants

Monetary grants from the government shall be measured at amount received or receivable and non-monetary

grants from the government shall be measured at their fair value or at a nominal value of RMB 1.00 when reliable

fair value is not available.(c) Accounting for government grants

(i) Government grants related to assets

Government grants pertinent to assets mean the government grants that are obtained by the Company used for

purchase or construction or forming the long-term assets by other ways. Government grants pertinent to assets

shall be recognised as deferred income and should be recognised in profit or loss on a systematic basis over the

useful lives of the relevant assets. Grants measured at their nominal value shall be directly recognised in profit or

loss of the period when the grants are received. When the relevant assets are sold transferred written off or

damaged before the assets are terminated the remaining deferred income shall be transferred into profit or loss of

the period of disposing relevant assets.(ii) Government grants related to income

Government grants other than related to assets are classified as government grants related to income. Government

grants related to income are accounted for in accordance with the following principles:

If the government grants related to income are used to compensate the enterprise’s relevant expenses or losses in

future periods such government grants shall be recognised as deferred income and included into profit or loss in

the same period as the relevant expenses or losses are recognised;

If the government grants related to income are used to compensate the enterprise’s relevant expenses or losses

incurred such government grants are directly recognised into current profit or loss

For government grants comprised of part related to assets as well as part related to income each part is accounted

for separately; if it is difficult to identify different part the government grants are accounted for as government

grants related to income as a whole.Government grants related to daily operation activities are recognised in other income in accordance with the

nature of the activities and government grants irrelevant to daily operation activities are recognised in

non-operating income.(iii) Loan interest subsidy

When loan interest subsidy is allocated to the bank and the bank provides a loan at lower-market rate of interest

to the Company the loan is recognised at the actual received amount and the interest expense is calculated based

on the principal of the loan and the lower-market rate of interest.When loan interest subsidy is directly allocated to the Company the subsidy shall be recognised as offsetting the

relevant borrowing cost.~ 124 ~Interim Report 2023

(iv) Repayment of the government grants

Repayment of the government grants shall be recorded by increasing the carrying amount of the asset if the book

value of the asset has been written down or reducing the balance of relevant deferred income if deferred income

balance exists any excess will be recognised into current profit or loss; or directly recognised into current profit

or loss for other circumstances.

3.29 Deferred Tax Assets and Deferred Tax Liabilities

Temporary differences are differences between the carrying amount of an asset or liability in the statement of

financial position and its tax base at the balance sheet date. The Company recognise and measure the effect of

taxable temporary differences and deductible temporary differences on income tax as deferred tax liabilities or

deferred tax assets using liability method. Deferred tax assets and deferred tax liabilities shall not be discounted.(a) Recognition of deferred tax assets

Deferred tax assets should be recognised for deductible temporary differences the carryforward of unused tax

losses and the carryforward of unused tax credits to the extent that it is probable that taxable profit will be

available against which the deductible temporary differences the carryforward of unused tax losses and the

carryforward of unused tax credits can be utilised at the tax rates that are expected to apply to the period when the

asset is realised unless the deferred tax asset arises from the initial recognition of an asset or liability in a

transaction that:

(i) Is not a business combination; and

(ii) At the time of the transaction affects neither accounting profit nor taxable profit (tax loss)

The Company shall recognise a deferred tax asset for all deductible temporary differences arising from

investments in subsidiaries associates and joint ventures only to the extent that it is probable that:

(i) The temporary difference will reverse in the foreseeable future; and

(ii) Taxable profit will be available against which the deductible temporary difference can be utilised.At the end of each reporting period if there is sufficient evidence that it is probable that taxable profit will be

available against which the deductible temporary difference can be utilized the Company recognises a previously

unrecognised deferred tax asset.The carrying amount of a deferred tax asset shall be reviewed at the end of each reporting period. The Company

shall reduce the carrying amount of a deferred tax asset to the extent that it is no longer probable that sufficient

taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be utilised. Any such

reduction shall be reversed to the extent that it becomes probable that sufficient taxable profit will be available.(b) Recognition of deferred tax liabilities

A deferred tax liability shall be recognised for all taxable temporary differences at the tax rate that are expected to

apply to the period when the liability is settled.~ 125 ~Interim Report 2023

(i) No deferred tax liability shall be recognised for taxable temporary differences arising from:

? The initial recognition of goodwill; or

? The initial recognition of an asset or liability in a transaction which: is not a business combination; and at the

time of the transaction affects neither accounting profit nor taxable profit (tax loss)

(ii) An entity shall recognise a deferred tax liability for all taxable temporary differences associated with

investments in subsidiaries associates and joint ventures except to the extent that both of the following

conditions are satisfied:

? The Company is able to control the timing of the reversal of the temporary difference; and

? It is probable that the temporary difference will not reverse in the foreseeable future.(c) Recognition of deferred tax liabilities or assets involved in special transactions or events

(i) Deferred tax liabilities or assets related to business combination

For the taxable temporary difference or deductible temporary difference arising from a business combination not

under common control a deferred tax liability or a deferred tax asset shall be recognised and simultaneously

goodwill recognised in the business combination shall be adjusted based on relevant deferred tax expense

(income).(ii) Items directly recognised in equity

Current tax and deferred tax related to items that are recognised directly in equity shall be recognised in equity.Such items include: other comprehensive income generated from fair value fluctuation of investments in other

debt obligations; an adjustment to the opening balance of retained earnings resulting from either a change in

accounting policy that is applied retrospectively or the correction of a prior period (significant) error; amounts

arising on initial recognition of the equity component of a compound financial instrument that contains both

liability and equity component.(iii) Unused tax losses and unused tax credits

Unsused tax losses and unused tax credits generated from daily operation of the Company itself

Deductible loss refers to the loss calculated and permitted according to the requirement of tax law that can be

offset against taxable income in future periods. The criteria for recognising deferred tax assets arising from the

carryforward of unused tax losses and tax credits are the same as the criteria for recognising deferred tax assets

arising from deductible temporary differences. The Company recognises a deferred tax asset arising from unused

tax losses or tax credits only to the extent that there is convincing other evidence that sufficient taxable profit will

be available against which the unused tax losses or unused tax credits can be utilised by the Company. Income

taxes in current profit or loss shall be deducted as well.Unsused tax losses and unused tax credits arising from a business combination

Under a business combination the acquiree’s deductible temporary differences which do not satisfy the criteria at

the acquisition date for recognition of deferred tax asset shall not be recognised. Within 12 months after the

~ 126 ~Interim Report 2023

acquisition date if new information regarding the facts and circumstances exists at the acquisition date and the

economic benefit of the acquiree’s deductible temporary differences at the acquisition is expected to be realised

the Company shall recognise acquired deferred tax benefits and reduce the carrying amount of any goodwill

related to this acquisition. If goodwill is reduced to zero any remaining deferred tax benefits shall be recognised

in profit or loss. All other acquired deferred tax benefits realised shall be recognised in profit or loss.(iv) Temporary difference generated in consolidation elimination

When preparing consolidated financial statements if temporary difference between carrying value of the assets

and liabilities in the consolidated financial statements and their taxable bases is generated from elimination of

inter-company unrealized profit or loss deferred tax assets or deferred tax liabilities shall be recognised in the

consolidated financial statements and income taxes expense in current profit or loss shall be adjusted as well

except for deferred tax related to transactions or events recognised directly in equity and business combination.(v) Share-based payment settled by equity

If tax authority permits tax deduction that relates to share-based payment during the period in which the expenses

are recognised according to the accounting standards the Company estimates the tax base in accordance with

available information at the end of the accounting period and the temporary difference arising from it. Deferred

tax shall be recognised when criteria of recognition are satisfied. If the amount of estimated future tax deduction

exceeds the amount of the cumulative expenses related to share-based payment recognised according to the

accounting standards the tax effect of the excess amount shall be recognised directly in equity.

3.30 Leases

(1) Identification of a lease

At inception of a contract the Company assesses whether the contract is or contains a lease. A contract is or

contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in

exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset

for a period of time the Company assesses whether throughout the period of use the customer has the right to

obtain substantially all of the economic benefits from use of the identified asset and the right to direct the use of

the identified asset.

(2) Identification of separate leases

If a contract contains multiple separate leases the Company divides the contract and perform separate accounting

treatment for each separate lease. The right to use an identified asset is a separate lease component if

simultaneously:

a) the lessee can benefit from use of the asset either on its own or together with other resources that are readily

~ 127 ~Interim Report 2023

available to the lessee; and

b) the asset is neither highly dependent on nor highly interrelated with other assets in the contract.

(3) Accounting treatment of a lease in which the Company is the lessee

On its commencement date the Company recognizes a lease that has a lease term of 12 months or less and does

not contain a purchase option as a short-term lease and recognizes a lease for which the underlying asset is of low

value when it is brand new as a lease of a low-value asset. If the Company subleases an asset leased or expects to

sublease an asset leased the head lease does not qualify as a lease of a low-value asset.For all short-term leases and leases of low-value assets the Company shall record the lease payments in the

underlying asset costs or current profits and losses with a straight-line method during each period of the lease

term.Except for short-term leases and leases of low-value assets which are treated using a simplified approach for

each lease the Company recognizes the right-of-use assets and lease liabilities on the commencement date of the

lease term.* Right-of-use assets

Right-of-use assets refer to the right of the lessees to use the leasehold property in the lease term.After the commencement date of the lease term the Group uses the cost for initial measurement of right-of-use

assets. The cost includes:

The initial measurement amount of lease liabilities;

Lease payments made on or before the start date of the lease term (if a lease incentive exists the amount related to

the lease incentive already taken shall be deducted);

Initial direct costs incurred by the lessee;

Costs expected to be incurred by the Company for dismantling and removing the leased assets restoring the

premises where the leased assets are located or restoring the leased assets to the status agreed in the leasing

clauses. The costs shall be recognized and measured by the Company according to the recognition criteria and

measurement method of provisions. Please refer to “12. Provisions” in Note 3 for details. If the aforementioned

costs are incurred for inventory production the costs shall be included in inventory costs.The Company depreciates the right-of-use assets with the straight-line method. If it is reasonably certain that the

ownership of the leasehold property will be obtained at the end of the lease term the Company will determine the

depreciation rate in accordance with the types of right-of-use assets and estimated net residual value rates over its

~ 128 ~Interim Report 2023

estimated remaining service life. If it is not reasonably certain that the ownership of the leasehold property will be

obtained at the end of the lease term the Company will determine the depreciation rate in accordance with the

types of right-of-use assets over the lease term or the remaining service life whichever is shorter.* Lease liabilities

Lease liabilities are initially measured at the present value of the lease payments outstanding at the

commencement date of the lease term. The lease payments include the following five items:

Fixed lease payments and substantial fixed lease payments (if a lease incentive exists the amount related to the

lease incentive shall be deducted);

Variable lease payments that depend on indexation or ratio;

Exercise price of the purchase option provided that the lessee is reasonably certain that the option will be

exercised;

Payments required to be made for exercising the option to terminate the lease if the lease term reflects that the

lessee will exercise such an option;

The estimated amount payable based on the secured residual value provided by the lessee.The Company uses the interest rate implicit in lease as the rate of discount when calculating the present value of

the lease payments. The incremental interest rate on borrowing of the lessee will be used as the rate of discount if

the interest rate implicit in lease cannot be determined. The difference between the lease payment and its present

value is regarded as an unrecognized financing expense. Interest expense is recognized at the discount rate of the

present value of the recognized lease payment during each period of the lease term and is recorded in the profit

and loss for the current period. Variable lease payments that are not covered in the measurement of the lease

liabilities are included in current profit or loss when actually incurred.The Company will re-calculate the lease liabilities using the present value of the changed lease payments and

adjust the book value of right-of-use assets accordingly if the substantial fixed payment the estimated payments

due to the guaranteed residual value the index or rate used to determine the lease payments or the assessment

result of the call option the renewal option or the termination option or the actual exercise changes after the

commencement date of the lease term.

(4) Accounting treatment of lease change

Where an operating lease changes the accounting treatment is conducted for it which is regarded as a new lease

from the effective date of the change and receivables in advance or lease receivables related to lease before

~ 129 ~Interim Report 2023

change are deemed as the receivables in the new lease.

(5) Sale and leaseback

The Company assesses whether the asset transfer in a sale and leaseback transaction is a sale in accordance with

the Note 3.27.* The Company as seller (the lessee)

If the asset transfer in a sale and leaseback transaction is not a sale the Company continues to recognize the

transferred asset and at the same time recognizes a financial liability equivalent to the transfer revenue and

conducts corresponding accounting treatment for the financial liability in accordance with “10. Provisions” in

Note 3. If the asset transfer in a sale and leaseback transaction is a sale the Company measures the right-of-use

assets formed by the sale and leaseback based on the portion of the original asset’s carrying value that is related to

the use right acquired by the leaseback and recognizes related gains or losses only for the right transferred to the

lessor.* The Company as the buyer (the lessor)

If the asset transfer in a sale and leaseback transaction is not a sale the Company does not recognize the

transferred asset but recognizes a financial asset equivalent to the transfer revenue and conducts corresponding

accounting treatment for the financial asset in accordance with the Note 3.10. If the asset transfer in a sale and

leaseback transaction is a sale the Company applies other accounting standards for business enterprises to the

accounting treatment for asset purchase and conducts corresponding accounting treatment for asset lease.

3.31 Changes in Significant Accounting Policies and Accounting Estimates

(1) Changes in accounting polices

□ Applicable □ Not applicable

Changes to the accounting policies and Remark

Approval process

why

On 30 December 2021 the Ministry of

Finance (MOF) issued Accounting

Standard for Business Enterprises

Interpretation No. 15 (C.K. [2021] No.

35) ("Interpretation No. 15") in which

"Accounting for the sale of products or Deliberated and approved by the 2nd See the Announcement on Changes in

by-products produced by an enterprise Meeting of the 10th Board of Directors Accounting Policies disclosed by the

before the fixed assets reach their and the 2nd Meeting of the 10th Company on Cninfo dated 31 August

intended useable state or in the course of Supervisory Committee of the Company 2023 for details.research and development" and

"Judgment on loss-making contracts"

came into force on 1 January 2022 and“Presentation of centralized capitalmanagement” came into force on the date

~ 130 ~Interim Report 2023

of publication.On 30 November 2022 the Ministry of

Finance ("MOF") issued Accounting

Standard for Business Enterprises

Interpretation No. 16 (C.K. [2022] No.

31) ("Interpretation No. 16") in which“Accounting treatment for deferredincome tax relating to assets and

liabilities arising from a single

Deliberated and approved by the 2nd See the Announcement on Changes in

transaction that is not subject to the

Meeting of the 10th Board of Directors Accounting Policies disclosed by theinitial recognition exemption” came into

and the 2nd Meeting of the 10th Company on Cninfo dated 31 Augustforce on 1 January 2023 “AccountingSupervisory Committee of the Company 2023 for details.method of the income tax effects of

dividends on financial instruments

classified as equity instruments by the

issuer" and "Accounting method of the

revision of share-based payment settled

in cash to share-based payment settled in

equity by an enterprise" came into force

on the date of publication.

(2) Changes in Accounting Estimates

□ Applicable □ Not applicable

(3) Adjustments to Financial Statement Items at the Beginning of the Year of the First Implementation of

the New Accounting Standards Implemented since 2023

□ Applicable □ Not applicable

4. TAXATION

4.1 Main Taxes and Tax Rate

Category of taxes Basis of tax assessment Tax rate

VAT are paid on added value of

VAT 13% 9% 6%

product sales

Consumption taxes are paid Sales of baijiu RMB1 per 1000 ml or per kg to calculate the amount of

Consumption tax onsales volume of taxable consumption tax a flat rate 20% of the annual turnover to calculate the

consumer goods amount of consumption tax at valorem.Urban maintenance and

Urban maintenance and

construction taxes are paid on 7%、5%

construction tax

turnover taxes

Education expenses Educational surcharges are paid

3%

surcharge on turnover taxes

Local education Local educational surcharges are

2%

surcharge paid on turnover taxes

Business taxes are calculated

Enterprise income tax 25%

and paid on taxable revenues

The basic rate of enterprise income tax of the Company is 25% and the actual income tax rates of some of its

~ 131 ~Interim Report 2023

subsidiaries with different tax rates are as follows:

Name of the entities Actual income tax rate

Anhui Longrui Glass Co. Ltd 15.00%

Anhui Ruisiweier Technology Co. Ltd 15.00%

Anhui RunAnXinKe Testing Technology Co. Ltd. 15.00%

Wuhan Yashibo Technology Co. Ltd 5.00%

Bozhou Gujing Hotel Co. Ltd 5.00%

Hubei Junlou Cultural Tourism Co. Ltd. 5.00%

Hubei Yellow Crane Tower Beverage Co. Ltd. 5.00%

Hubei Xinjia Testing Technology Co. Ltd. 5.00%

Wuhan Gulou Junhe Trading Co. Ltd. 5.00%

Wuhan Gulou Juntai Trading Co. Ltd. 5.00%

Anhui Guqi Distillery Co. Ltd. 5.00%

Anhui Jiuan Mechanical Electrical Equipment Co.

5.00%

Ltd.Anhui Jiuhao China Railway Construction

5.00%

Engineering Co. Ltd.Anhui Anjie Technology Co. Ltd. 5.00%

Anhui Gujinggong Liquor Original Vintage Theme

5.00%

Hotel Management Co. Ltd.Anhui Gujing Health Technology Co. Ltd. 15.00%

4.2 Tax Preference

(1) According to the Notice on Announcing the List of First Batch of High-tech Enterprises in Anhui Province for

2022 (wankeqimi [2022] No.482) issued by Department of Science and Technology of Anhui province the

subsidiary Ruisiweier was identified as a high-tech enterprise in 2022 therefore was given High-tech Enterprise

Certificate (Certificate Number: GR202234000476) which is valid for 3 years. According to Enterprise Income

Tax Law and other relevant regulations the company is subject to a national high-tech enterprise income tax rate

at 15% for three years from 1 January 2022 to 31 December 2024.

(2) According to the Notice on Filing and Publicity for the First Batch of High-tech Enterprises Recognized by the

Certifing Body in Anhui Province for 2022 jointly issued by Department of Science and Technology of Anhui

province Department of Finance of Anhui province and Anhui Provincial Taxation Bureau of State

Administration of Taxation the subsidiary Longrui Glass was identified as a high-tech enterprise in 2022

therefore was given High-tech Enterprise Certificate (Certificate Number: GR202234004359) which is valid for 3

years. According to Enterprise Income Tax Law and other relevant regulations the company is subject to a

~ 132 ~Interim Report 2023

national high-tech enterprise income tax rate at 15% for three years from 1 January 2022 to 31 December 2024.

(3) According to Notice on Announcing the List of Two Batches of Supplementary Filing High-tech Enterprises in

Anhui Province for 2021 (wankegaomi [2022] No.49) issued by Department of Science and Technology of Anhui

province Department of Finance of Anhui province and Anhui Provincial Taxation Bureau of State

Administration of Taxation the subsidiary Anhui RunAnXinKe Testing Technology Co. Ltd. was identified as a

high-tech enterprise in 2021 therefore was given High-tech Enterprise Certificate (Certificate Number:

GR202134004920) which is valid for 3 years. According to Enterprise Income Tax Law and other relevant

regulations the company is subject to a national high-tech enterprise income tax rate at 15% for three years from

1 January 2021 to 31 December 2023.

(4) According to the Announcement on the Filing of the Second Batch of High-tech Enterprises Identified by the

Anhui Province in 2021 issued by the Office of the National Leading Group for the Identification andManagement of High-tech Enterprises the subsidiary Anhui Gujing Health Technology Co. Ltd. (“HealthTechnology”) has been recognized as the second batch of high-tech enterprises in Anhui Province in 2021 and

obtained the High-tech Enterprise Certificate (Certificate No.: GR202134004641) with a valid period from 2021

to 2023. According to relevant regulations such as the Enterprise Income Tax Law the Health Technology shall

enjoy an income tax rate of 15% for national high-tech enterprises from 1 January 2021 to 31 December 2023.

(5) As per the Announcement on Further Implementing the Preferential Income Tax Policy for Small and Micro

Enterprises (Announcement No. 13 of 2022 of the Ministry of Finance and the State Taxation Administration)

from 1 January 2022 to 31 December 2024 the portion of the annual taxable income of small- and micro-sized

enterprises exceeding RMB 1 million but not exceeding RMB 3 million the taxable income shall be reduced by

25% and subject to enterprise income tax at a rate of 20%. According to the Announcement of the State Taxation

Administration and the Ministry of Finance on the Implementation of Preferential Income Tax Policies for Small-

and Micro-sized Enterprises and Individual Industrial and Commercial Entities (Announcement No. 6 of 2023 of

the Ministry of Finance and the State Taxation Administration) from 1 January 2023 to 31 December 2024 for

the portion of the annual taxable income of small- and micro-sized enterprises not exceeding RMB 1 million the

taxable income shall be reduced by 25% and subject to enterprise income tax at a rate of 20%. Subsidiaries Anjie

Technology Gujing Hotel Theme Hotel Junlou Cultural Yellow Crane Tower Beverage Yashibo Xinjia Testing

Jiuan Mechanical Electrical Gulou Junhe Gulou Juntai Guqi Distillery and Jiuhao China Railway shall observe

the relevant provisions of the preferential income tax policy for small micro-profit enterprises.

5. NOTES TO MAJOR ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS OF THE

COMPANY

5.1 Monetary Assets

Item Ending balance Beginning balance

Cash on hand 100681.01 111642.11

Cash in bank 16852074031.88 13698187278.75

~ 133 ~Interim Report 2023

Item Ending balance Beginning balance

135504.47

Other monetary assets 74262220.44

16852310217.36

Total 13772561141.30

At 30 June 2023 in monetary assets the certificates of deposit pledged for opening bank acceptance bills

amounted to RMB10 million and the security deposit that cannot be withdrawn in advance amounted to

RMB6995.00. Except for that no other monetary funds are restricted to use or in some potential risks of recovery

due to the mortgage pledge or freezing.Liquor manufacturing enterprises shall disclose whether there exists special interest arrangements such as establishing a joint fund

account with related parties

□ Applicable □ Not applicable

5.2 Trading Financial Assets

Item Ending balance Beginning balance

Financial assets at fair value through profit or

1790678478.171782687769.66

loss

Including: bank financial products 1790678478.17 1580352899.17

Fund investment 0.00 202334870.49

1790678478.17

Total 1782687769.66

5.3 Accounts Receivable

(1) Disclosure by aging

Aging Ending balance Beginning balance

Within one year 100905875.04 60886443.44

Of which: 1-6 months 98696120.05 57829416.75

7-12 months 2209754.99 3057026.69

1-2 years 9238124.00 10382550.23

2-3 years 158653.64 405162.30

Over 3 years 107451.79 137464.27

Subtotal 110410104.47 71811620.24

Less: Bad debt provision 9221545.29 9122951.30

Total 101188559.18 62688668.94

(2) Disclosure by withdrawal method of bad debt provision

~ 134 ~Interim Report 2023

* Ending balance

Ending balance

Carrying amount Bad debt provision

Category

Withdrawal Carrying value

Amount Proportion (%) Amount

proportion (%)

Bad debt provision withdrawn

7792783.727.067792783.72100.000.00

separately

Bad debt provision withdrawn by

102617320.7592.941428761.571.39101188559.18

group

Of which: Group 1

Group 2 102617320.75 92.94 1428761.57 1.39 101188559.18

Total 110410104.47 100.00 9221545.29 8.35 101188559.18

* Beginning balance

Beginning balance

Carrying amount Bad debt provision

Category

Withdrawal Carrying value

Amount Proportion (%) Amount

proportion (%)

Bad debt provision withdrawn

7792783.7210.857792783.72100.000.00

separately

Bad debt provision withdrawn by

64018836.5289.151330167.582.0862688668.94

group

Of which: Group 1

Group 2 64018836.52 89.15 1330167.58 2.08 62688668.94

Total 71811620.24 100.00 9122951.30 12.70 62688668.94

On 30 June 2023 Accounts receivable with bad debt provision withdrawn by group 2

Ending balance

Aging Withdrawal proportion

Carrying amount Bad debt provision

(%)

Within one year 100905875.04 1097448.94 1.09

Of which: 1-6 months 98696120.05 986961.20 1.00

7-12 months 2209754.99 110487.74 5.00

1-2 years 1445340.28 144534.02 10.00

2-3 years 158653.64 79326.82 50.00

~ 135 ~Interim Report 2023

Ending balance

Aging Withdrawal proportion

Carrying amount Bad debt provision

(%)

Over 3 years 107451.79 107451.79 100.00

Total 102617320.75 1428761.57 1.39

On 1 January 2023 Accounts receivable with bad debt provision withdrawn by group 2

Beginning balance

Aging Withdrawal proportion

Carrying amount Bad debt provision

(%)

Within one year 60886443.44 731145.50 1.20

Of which: 1-6 months 57829416.75 578294.17 1.00

7-12 months 3057026.69 152851.33 5.00

1-2 years 2589766.51 258976.65 10.00

2-3 years 405162.30 202581.16 50.00

Over 3 years 137464.27 137464.27 100.00

Total 64018836.52 1330167.58 2.08

(3) Changes of bad debt provision during the Reporting Period

Changes in the Reporting Period

Increase from

Beginning business

Category Recovery or Ending balance

amount Withdrawal combination not Write-off

reversal

under the same

control

Accounts receivable with

7792783.72

significant amount but bad

7792783.72

debt provision withdrawn

separately

Accounts receivable with

insignificant amount but bad

debt provision withdrawn

separately

Group 2: Bad debt provision

1330167.5898593.991428761.57

withdrawn by aging group

Total 9122951.30 98593.99 9221545.29

(4) Top five ending balances by entity

~ 136 ~Interim Report 2023

Proportion to total ending balance Ending balance of

Entity name Ending balance

of accounts receivable (%) bad debt provision

No. 1 13568287.20 12.29 135682.87

No. 2 10547127.95 9.55 105471.28

No. 3 7792783.72 7.06 7792783.72

No. 4 7673301.89 6.95 76733.02

No. 5 7600000.00 6.88 76000.00

Total 47181500.76 42.73 8186670.89

5.4 Accounts Receivable Financing

Ending balance Beginning balance

Category Bad debt Bad debt

Carrying amount Carrying value Carrying amount Carrying value

provision provision

Bank acceptance

835279520.98835279520.98217419441.32217419441.32

bills

Commercial

acceptance bills

Total 835279520.98

835279520.98217419441.32217419441.32

(1) The Company’s notes receivable discounted or endorsed to third parties but not yet matured as of 30 June

2022

Items Amount of derecognition Amount of unrecognition

Bank acceptance bills 4226921148.01 0.00

Total 4226921148.01 0.00

The issuing bank of the bank acceptance bill of the Company presented as accounts receivable financing are

commercial banks with higher credit. Therefore when the bank acceptance bills are mature they are likely to get

paid. The interest rate risk related to the bill has been transferred to the bank so it can be judged that the main

risks and rewards of the bill ownership have been transferred so need to be derecogised.

(2) The Company has no notes receivable transferred to accounts receivable due to drawers’ inability of

fulfillment at 30 June 2023

(3) Notes receivable by bad debt provision method

Ending balance

Category

Carrying amount Bad debt provision Carrying value

~ 137 ~Interim Report 2023

Withdrawal

Amount Proportion (%) Amount

proportion (%)

Bad debt provision

withdrawn separately

Bad debt provision

835279520.98100.00835279520.98

withdrawn by group

Of which: Group 1

Group 2 835279520.98 100.00 835279520.98

Total 835279520.98 100.00 835279520.98

(Continued)

Beginning balance

Carrying amount Bad debt provision

Category

Withdrawal Carrying value

Amount Proportion (%) Amount

proportion (%)

Bad debt provision

withdrawn separately

Bad debt provision

217419441.32100.00217419441.32

withdrawn by group

Of which: Group 1 -

Group 2 217419441.32 100.00 217419441.32

Total 217419441.32 100.00 217419441.32

* Notes receivable with provision for bad debt recognised by group 1

None.* Notes receivable with provision for bad debt recognised by group 2

On 30 June 2023 the Company measured provision for bad debt of bank acceptance bill according to the lifetime

expected credit loss. The Company believes that no significant credit risk exists in the bank acceptance bills and

no significant losses arise from default risk of banks or other issuer’ failure of fulfillment.

(4) Changes of bad debt provision during the Reporting Period

None.

5.5 Prepayment

(1) Disclosure by aging

Ending balance Beginning balance

Aging

Amount Proportion (%) Amount Proportion (%)

~ 138 ~Interim Report 2023

Ending balance Beginning balance

Aging

Amount Proportion (%) Amount Proportion (%)

Within one year 94633298.42 96.56 233344417.80 99.72

1 to 2 years 3243149.88 3.31 631243.89 0.27

2 to 3 years 126942.16 0.13 20000.00 0.01

Over 3 years

Total 98003390.46 100.00 233995661.69 100.00

(2) Top five ending balances by entity

Proportion of the balance to the

Entity name Ending balance

total prepayment (%)

No. 1 11020206.90 11.24

No. 2 10132079.38 10.34

No. 3 3820133.01 3.90

No. 4 3309248.95 3.38

No. 5 1940000.00 1.98

Total 30221668.24 30.84

5.6 Other Receivables

(1) Listed by category

Item Ending balance Beginning balance

Interest receivable

Dividend receivable

Other receivables 65401034.51 73337415.74

Total 65401034.51 73337415.74

(2) Other Receivables

* Disclosure by aging

Aging Ending balance Beginning balance

Within one year 60805550.23 68032959.87

Of which: 1-6 months 56954905.73 66026552.80

7-12 months 3850644.50 2006407.07

1-2 years 5361866.84 5801770.49

2-3 years 1063770.81 1686854.49

~ 139 ~Interim Report 2023

Aging Ending balance Beginning balance

Over 3 years 44816198.92 44645231.37

Subtotal 112047386.80 120166816.22

Less: Bad debt provision 46646352.29 46829400.48

Total 65401034.51 73337415.74

* Disclosure by nature

Nature Ending balance Beginning balance

Investment in securities 38336008.08 38434247.10

Deposit and guarantee 10046065.16 9840126.80

Borrowing for business trip expenses 1364558.50 1172804.12

Rent utilities and gasoline charges 8846028.79 5206927.45

Other 53454726.27 65512710.75

Subtotal 112047386.80 120166816.22

Less: Bad debt provision 46646352.29 46829400.48

Total 65401034.51 73337415.74

* Disclosure by withdrawal method of bad debt provision

A. As of 30 June 2023 bad debt provision withdrawn based on three stages model:

Stage Carrying amount Bad debt provision Carrying value

Stage 1 73711378.72 8310344.21 65401034.51

Stage 2

Stage 3 38336008.08 38336008.08 0.00

Total 112047386.80 46646352.29 65401034.51

A1. As of 30 June 2023 bad debt provision at stage 1:

12-month expected

Category Carrying amount credit losses rate Bad debt provision Carrying value

(%)

Bad debt provision withdrawn separately

Bad debt provision withdrawn by group 73711378.72 11.27 8310344.21 65401034.51

Of which: Group 1

Group 2 73711378.72 11.27 8310344.21 65401034.51

~ 140 ~Interim Report 2023

12-month expected

Category Carrying amount credit losses rate Bad debt provision Carrying value

(%)

Total 73711378.72 11.27 8310344.21 65401034.51

On 30 June 2023 other receivables with bad debt provision withdrawn by group 2

Ending balance

Aging Withdrawal proportion

Carrying amount Bad debt provision

(%)

Within one year 60805550.23 762081.28 1.25

Of which: 1-6 months 56954905.73 569549.05 1.00

7-12 months 3850644.50 192532.23 5.00

1-2 years 5361866.84 536186.68 10.00

2-3 years 1063770.81 531885.41 50.00

Over 3 years 6480190.84 6480190.84 100.00

Total 73711378.72 8310344.21 11.27

A2. As of 30 June 2023 bad debt provision at stage 3:

Expected credit

Category Carrying amount loss rate for the Bad debt provision Carrying value

entire duration (%)

Bad debt provision withdrawn separately 38336008.08 100.00 38336008.08

Bad debt provision withdrawn by group -

Of which: Group 1

Group 2 -

Total 38336008.08 100.00 38336008.08

On 30 June 2023 other receivables with bad debt provision withdrawn separately:

Ending balance

Name Withdrawal

Carrying amount Bad debt provision Withdrawal reason

proportion (%)

The enterprise is bankrupt and

Hengxin Securities Co. Ltd. 28635660.22 28635660.22 100.00

liquidated

The enterprise is bankrupt and

Jianqiao Securities Co. Ltd. 9700347.86 9700347.86 100.00

liquidated

Total 38336008.08 38336008.08 100.00 --

~ 141 ~Interim Report 2023

B. As of 1 January 2023 bad debt provision withdrawn based on three stages model:

Stage Carrying amount Bad debt provision Carrying value

Stage 1 81732569.12 8395153.38 73337415.74

Stage 2

Stage 3 38434247.10 38434247.10 0.00

Total 120166816.22 46829400.48 73337415.74

B1. On 1 January 2023 bad debt provision at stage 1:

12-month expected

Category Carrying amount credit losses rate Bad debt provision Carrying value

(%)

Bad debt provision withdrawn separately

Bad debt provision withdrawn by group 81732569.12 10.27 8395153.38 73337415.74

Of which: Group 1

Group 2 81732569.12 10.27 8395153.38 73337415.74

Total 81732569.12 10.27 8395153.38 73337415.74

On 1 January 2023 other receivables with bad debt provision withdrawn by group 2

Beginning balance

Aging Withdrawal proportion

Carrying amount Bad debt provision

(%)

Within one year 68032959.87 760564.80 1.12

Of which: 1-6 months 66026552.80 660244.43 1.00

7-12 months 2006407.07 100320.37 5.00

1-2 years 5801770.49 580177.04 10.00

2-3 years 1686854.49 843427.27 50.00

Over 3 years 6210984.27 6210984.27 100.00

Total 81732569.12 8395153.38 10.27

B2. As of 1 January 2023 bad debt provision at stage 3:

Expected credit

Category Carrying amount loss rate for the Bad debt provision Carrying value

entire duration (%)

Bad debt provision withdrawn separately 38434247.10 100.00 38434247.10

~ 142 ~Interim Report 2023

Expected credit

Category Carrying amount loss rate for the Bad debt provision Carrying value

entire duration (%)

Bad debt provision withdrawn by group

Of which: Group 1

Group 2

Total 38434247.10 100.00 38434247.10

On 1 January 2023 other receivables with bad debt provision withdrawn separately:

Beginning balance

Name Withdrawal

Carrying amount Bad debt provision Withdrawal reason

proportion (%)

Hengxin Securities Co. Ltd. The enterprise is bankrupt and

28733899.2428733899.24100.00

liquidated

Jianqiao Securities Co. Ltd. The enterprise is bankrupt and

9700347.869700347.86100.00

liquidated

Total 38434247.10 38434247.10 100.00 --

* Changes of bad debt provision during the Reporting Period

Changes in the Reporting Period

Increase from

Beginning business

Category Recovery or Ending balance

balance

Withdrawal combination not Write-off

reversal

under the same

control

Bad debt provision

38434247.100.0098239.0238336008.08

withdrawn separately

Bad debt provision

8395153.38-84809.170.008310344.21

withdrawn by group

Total 46829400.48 -84809.17 98239.02 46646352.29

* Top five ending balances by entity

Proportion of the

balance to the total

Entity name Nature Ending balance Aging Bad debt provision

other receivables

(%)

~ 143 ~Interim Report 2023

No. 1 Securities

28635660.22 Over 3 years 25.56 28635660.22

investment

No. 2 Within 6

Other 12484975.39 11.14 124849.75

months

No. 3 Securities

9700347.86 Over 3 years 8.66 9700347.86

investment

No. 4 Within 6

Other 5822913.66 5.20 58229.14

months

Within 6

No. 5 Other 5585130.77 4.98 55851.31

months

Total 62229027.90 55.54 38574938.28

5.7 Inventories

(1) Category of inventories

Ending balance

Item

Carrying amount Falling price reserves Carrying value

Raw materials and package

213152150.8618503008.69194649142.17

materials

Semi-finished goods and work

5033783996.410.005033783996.41

in process

Finished goods 967084041.00 20469460.46 946614580.54

Total 6214020188.27 38972469.15 6175047719.12

(Continued)

Beginning balance

Item

Carrying amount Falling price reserves Carrying value

Raw materials and package

384626636.2516449308.79368177327.46

materials

Semi-finished goods and work

4263603307.090.004263603307.09

in process

Finished goods 1431913213.36 5587757.03 1426325456.33

Total 6080143156.70 22037065.82 6058106090.88

(2) Falling price reserves of inventories

~ 144 ~Interim Report 2023

Increase Decrease

Beginning

Items Increase from Ending balance

balance Reversal or

Withdrawal business Other

recovery

combination

Raw materials and

16449308.792432862.49379162.5918503008.69

package materials

Finished goods 5587757.03 15123811.38

242107.9520469460.46

Total 22037065.82 17556673.87

621270.5438972469.15

5.8 Contract Assets

Item Ending balance Beginning balance

Completed and unliquidated assets 546215.81 1855188.15

Total 546215.81 1855188.15

5.9 Other Current Assets

Item Ending balance Beginning balance

Pledge-style repo of treasury bonds 20000000.00 60000000.00

Accrued Interests on deposits 12313701.79 3579838.89

Deductible tax 74037701.57 61988886.62

Total 106351403.36 125568725.51

5.10 Long-term Equity Investment

Changes in the Reporting Period

Profit and loss on Adjustment of

Investees Beginning balance Additional Reduced investments other Changes in

investments investments confirmed according comprehensive other equity

to equity law income

I. Associated enterprises

Beijing Guge Trading

5484525.733044.66

Co. Ltd.Anhui Xunfei Jiuzhi

4669710.2543101.60

Technology Co. Ltd.Total 10154235.98 46146.26

(Continued)

Investees Changes in the Reporting Period Ending balance Balance of

~ 145 ~Interim Report 2023

impairment

Declaration of cash Withdrawal of

provision

dividends or impairment Other

distribution of profit provision

I. Associated enterprises

Beijing Guge Trading

5487570.39

Co. Ltd.Anhui Xunfei Jiuzhi

4712811.85

Technology Co. Ltd.Total 10200382.24

5.11 Other Equity Instrument Investment

Item Ending balance Beginning balance

Anhui Mingguang Rural Commercial Bank Co.

60753939.2856447789.94

Ltd.Total 60753939.28 56447789.94

Disclosure of non-trading equity instrument investment by items

Reason for

assigning to

Amount of other Reason for other

measure in fair

comprehensive comprehensive

Dividend income Accumulative Accumulative value and the

Item income income

recognized gains losses changes included

transferred to transferred to

in other

retained earnings retained earnings

comprehensive

income

Assigned to

measure in fair

value and the

Anhui Mingguang changes included

Rural in other

747200.506905241.48

Commercial Bank comprehensive

Co. Ltd. income according

to the holding

purpose of the

management

5.12 Investment Property

(1) Investment property adopting cost measurement mode

Items Building and plants Land use rights Total

~ 146 ~Interim Report 2023

Items Building and plants Land use rights Total

I. Original carrying value

1. Beginning balance 20473989.11 2644592.00 23118581.11

2. Increase during the Reporting Period 63563661.47 0.00 63563661.47

(1) Transfer from fixed assets 63563661.47 0.00 63563661.47

3. Decrease during the Reporting Period

4. Ending balance 84037650.58 2644592.00 86682242.58

II. Accumulated depreciation and amortization:

1. Beginning balance 8853919.61 867779.54 9721699.15

2. Increase during the Reporting Period 28396712.94 28013.28 28424726.22

(1) Withdrawal or amortization 674786.99 28013.28 702800.27

(2) Transfer from fixed assets 27721925.95 0.00 27721925.95

3. Decrease during the Reporting Period

4. Ending balance 37250632.55 895792.82 38146425.37

III. Impairment provision

1. Beginning balance

2. Increase during the Reporting Period

3. Decrease during the Reporting Period

4. Ending balance

IV. Carrying value

1. Ending carrying value 46787018.03 1748799.18 48535817.21

2. Beginning carrying value 11620069.50 1776812.46 13396881.96

5.13 Fixed Assets

(1) Listed by category

Item Ending balance Beginning balance

Fixed assets 2917327570.54 2741844586.30

Disposal of fixed assets 0.00 0.00

2917327570.54

Total 2741844586.30

(2) Fixed assets

* General information of fixed assets

Buildings and Machinery Office equipment

Items Vehicles Total

constructions equipments and other

I. Original carrying value

~ 147 ~Interim Report 2023

Buildings and Machinery Office equipment

Items Vehicles Total

constructions equipments and other

1. Beginning balance 2726822355.63 1665445833.44 79609320.00 408442822.46 4880320331.53

2. Increase during the

189332235.24153214225.893146790.968530952.51354224204.60

Reporting Period

(1) Acquisition 7640841.97 10515314.72 3146790.96 7446607.79 28749555.44

(2) Transfer from

181691393.27142698911.170.001084344.72325474649.16

construction in progress

3. Decrease during the

65837210.314420667.451927237.021894694.6674079809.44

Reporting Period

(1) Disposal or scrap 2273548.84 4420667.45 1927237.02 1894694.66 10516147.97

(2) Transfer to investment

63563661.470.000.000.0063563661.47

property

4. Ending balance 2850317380.56 1814239391.88 80828873.94 415079080.31 5160464726.69

II. Accumulated

depreciation

1. Beginning balance 993719532.71 832439496.35 67958168.40 239273719.06 2133390916.52

2. Increase during the

55103687.0460554019.102616111.6122788081.62141061899.37

Reporting Period

(1) Withdrawal 55103687.04 60554019.10 2616111.61 22788081.62 141061899.37

3. Decrease during the

29247651.693752545.411508111.521803368.3336311676.95

Reporting Period

(1) Disposal or scrap 1525725.74 3752545.41 1508111.52 1803368.33 8589751.00

(2) Transfer to investment

27721925.950.000.000.0027721925.95

property

4. Ending balance 1019575568.06 889240970.04 69066168.49 260258432.35 2238141138.94

III. Impairment provision

1. Beginning balance 2596209.90 1907219.92 0.00 581398.89 5084828.71

2. Increase during the

Reporting Period

(1) Withdrawal

3. Decrease during the 0.00 88811.50 0.00 0.00 88811.50

Reporting Period

(1) Disposal or scrap 0.00 88811.50 0.00 0.00 88811.50

4. Ending balance 2596209.90 1818408.42 0.00 581398.89 4996017.21

IV. Carrying value

1. Ending carrying value 1828145602.60 923180013.42 11762705.45 154239249.07 2917327570.54

~ 148 ~Interim Report 2023

Buildings and Machinery Office equipment

Items Vehicles Total

constructions equipments and other

2. Beginning carrying

1730506613.02831099117.1711651151.60168587704.512741844586.30

value

* Idle fixed assets

Original carrying Accumulated

Item Impairment provision Carrying value Note

value depreciation

Buildings and

7453258.024767039.342596209.9090008.78

constructions

Machinery equipments 9642767.65 7684779.01 1818408.42 139580.22

Office equipment and

867531.26260172.43581398.8925959.94

others

Total 17963556.93 12711990.78 4996017.21 255548.94

* Fixed assets without certificate of title

Items Carrying value Reason

Buildings and constructions 1124786340.32 In process

Total 1124786340.32

5.14 Construction in Progress

(1) Listed by category

Item Ending balance Beginning balance

Construction in progress 3007948340.56 2454703251.44

Project materials 0.00 0.00

Total 3007948340.56 2454703251.44

(2) Construction in progress

* General information of construction in progress

Ending balance Beginning balance

Deprecia Deprecia

Item Carrying Carrying Carrying Carrying

tion tion

amount value amount value

reserve reserve

24902879249028792043434920434349

Smart park project

37.3437.3453.1753.17

32602872326028722521696025216960

Theme hotel project

9.009.003.403.40

Gujing plant 79054102. 79054102. 48337480. 48337480.~ 149 ~Interim Report 2023

area 12# 51 51 17 17

liquor warehouse

Flexible and automated technology transformation project for 23558436. 23558436.

0.000.00

glass bottle production line 29 29

73415307.73415307.57312769.57312769.

Suizhou new plant project

93930808

39162263.39162263.29890009.29890009.

Other individual project

78783333

30079483300794832454703224547032

Total

40.5640.5651.4451.44

* Changes in significant projects of construction in progress

Decrease

Increase during Amount

Budget during the

Project Beginning balance the Reporting transferred to Ending balance

(RMB’0000) Reporting

Period fixed asset

Period

Smart park project 828965.74 2043434953.17 664193932.50 217340948.33 2490287937.34

Theme hotel project 49900.00 252169603.40 74666205.25 807079.65 326028729.00

Gujing plant

area 12# 16250.00 48337480.17 30716622.34 0.00 79054102.51

liquor warehouse

Flexible and

automated technology

transformation project 5940.00 23558436.29 14352263.60 37910699.89 0.00

for glass bottle

production line

Suizhou new plant

60000.0057312769.0888559657.5664500140.637956978.0873415307.93

project

Other individual

11753.4729890009.3316994599.674915780.662806564.5639162263.78

project

Total 972809.21 2454703251.44 889483280.92 325474649.16 10763542.64 3007948340.56

(Continued)

Interest

Cumulative Of which: Interest

Proportion of capitalization

amount of capitalized during

Project project input to Schedule (%) during the Source of funds

interest the reporting

budgets (%) Reporting

capitalization period

Period (%)

~ 150 ~Interim Report 2023

Interest

Cumulative Of which: Interest

Proportion of capitalization

amount of capitalized during

Project project input to Schedule (%) during the Source of funds

interest the reporting

budgets (%) Reporting

capitalization period

Period (%)

Self-owned

Smart park project 37.93 42.29 fund and raised

fund

Self-owned

Theme hotel project 65.49 65.49

fund

Gujing plant

Self-owned

area 12# 75.09 75.09

fund

liquor warehouse

Flexible and automated

technology transformation Self-owned

63.82100.00

project for glass bottle fund

production line

Self-owned

Suizhou new plant project 80.50 90.00 5954414.42 1302024.04 3.35 fund and

borrowings

Self-owned

Other individual project 39.89 39.89

fund

Total —— —— 5954414.42 1302024.04

5.15 Right-of-use Assets

Items Buildings and constructions Machinery equipments Total

I. Original carrying value

1. Beginning balance 58410080.67 1330929.57 59741010.24

2. Increase during the Reporting

Period

3. Decrease during the

Reporting Period

4. Ending balance 58410080.67 1330929.57 59741010.24

II. Accumulated depreciation

1. Beginning balance 26291552.70 887286.44 27178839.14

2. Increase during the Reporting 7049426.28 221821.60 7271247.88

Period

~ 151 ~Interim Report 2023

3. Decrease during the

Reporting Period

4. Ending balance 33340978.98 1109108.04 34450087.02

III. Impairment provision

1. Beginning balance

2. Increase during the Reporting

Period

3. Decrease during the

Reporting Period

4. Ending balance

IV. Carrying value

1. Ending carrying value 25069101.69 221821.53 25290923.22

2. Beginning carrying value 32118527.97 443643.13 32562171.10

5.16 Intangible Assets

(1) General information of intangible assets

Patents and

Item Land use rights Software Total

trademark

I. Original carrying value

1. Beginning balance 1088480720.77 122263823.72 254995277.12 1465739821.61

2. Increase during the Reporting

29354733.962187948.9237735.8431580418.72

Period

(1) Acquisition 29354733.96 574479.89 37735.84 29966949.69

(2) Transfer from construction in

0.001613469.030.001613469.03

progress

3. Decrease during the Reporting

Period

(1) Disposal

4. Ending balance 1117835454.73 124451772.64 255033012.96 1497320240.33

II. Accumulated amortization:

1. Beginning balance 204751419.36 80821700.01 71874672.80 357447792.17

2. Increase during the Reporting

11732524.929848670.89112821.0321694016.84

Period

(1) Withdrawal 11732524.92 9848670.89 112821.03 21694016.84

3. Decrease during the Reporting

Period

~ 152 ~Interim Report 2023

Patents and

Item Land use rights Software Total

trademark

(1) Disposal

4. Ending balance 216483944.28 90670370.90 71987493.83 379141809.01

III. Impairment provision

1. Beginning balance 0.00 166872.39 0.00 166872.39

2. Increase during the Reporting

Period

(1) Withdrawal

3. Decrease during the Reporting

Period

4. Ending balance 0.00 166872.39 0.00 166872.39

IV. Carrying value

1. Ending carrying value 901351510.45 33614529.35 183045519.13 1118011558.93

2. Beginning carrying value 883729301.41 41275251.32 183120604.32 1108125157.05

(2) Intangible assets used for mortgage or pledge at 30 June 2023

Original carrying Accumulated

Item Impairment provision Carrying value Note

value amortization

Trademark right 176630692.63 7514092.63 169116600.00

Total 176630692.63 7514092.63 169116600.00

(3) Intangible assets without certificate of title

Item Carrying value Reason

Land use rights 29212240.17 In progress

Total 29212240.17 --

5.17 Goodwill

(1) Original carrying value of goodwill

Increase Decrease

Investees or matters that

Formed by

goodwill arising from Beginning balance Ending balance

business Other Disposal Other

combination

Yellow Crane Tower Distillery

478283495.29478283495.29

Co. Ltd.Anhui Mingguang Distillery Co.

60686182.0760686182.07

Ltd.~ 153 ~Interim Report 2023

Increase Decrease

Investees or matters that

Formed by

goodwill arising from Beginning balance Ending balance

business Other Disposal Other

combination

Renhuai Maotai Town Zhencang

22394707.6522394707.65

Winery Industry Co. Ltd.Total 561364385.01 561364385.01

5.18 Long-term Deferred Expenses

Beginning Decrease

Item Increase Ending balance

balance

Amortization Other decrease

Experience center 18055386.32 156139.05 6946176.16 11265349.21

Sewage treatment project 999508.20 0.00 461311.48 538196.72

Yellow Crane Tower chateau and

770053.590.00739326.2330727.36

museum

Gujing party building cultural

1181818.180.00590909.09590909.09

center

Outdoor auxiliary projects 16586539.00 4604396.05 1115312.37 20075622.68

Other individual project with

13419672.024229749.264475009.5613174411.72

insignificant amounts

Total 51012977.31 8990284.36 14328044.89 45675216.78

5.19 Deferred Tax Assets and Deferred Tax Liabilities

(1) Deferred tax assets before offsetting

Ending balance Beginning balance

Item Deductible Deductible temporary

temporary Deferred tax assets Deferred tax assets

differences

differences

Asset impairment provision 44135358.75 11017152.45 27288766.92 6642674.57

Credit impairment provision 55867897.58 13966974.39 55952351.78 13967271.03

Unrealized intergroup profit 52435871.27 13108967.82 100142928.48 25035732.12

Deferred income 100910143.95 25227535.99 103714978.95 25483351.68

Deductible losses 383255423.61 88916471.40 337681202.44 77041463.86

Carry-over of payroll payables

deductible during the next 0.00 0.00 6380952.10 957142.82

period

~ 154 ~Interim Report 2023

Accrued expenses and

1601881132.90400470283.231104571137.01275740361.64

discount

Lease liabilities 23349279.64 5837319.91 0.00 0.00

Change in fair value of

3343717.82824156.261024977.31252229.65

accounts receivable financing

Total 2265178825.52 559368861.45 1736757294.99 425120227.37

(2) Deferred tax liabilities before offsetting

Ending balance Beginning balance

Item Taxable Deferred tax

temporary Taxable temporary differences Deferred tax liabilities

liabilities

differences

Difference in accelerated

depreciation of fixed 144758293.39 36189573.35 157708682.09 39427170.52

assets

Assets appreciation

arising from business

685401126.74165822949.79697149707.15168589543.40

combination not under

the same control

Changes in fair value of

40678478.1710169619.5432687769.668171942.42

trading financial assets

Right-of-use assets 25290923.22 6322730.81 0.00 0.00

Unrealized intergroup

291469749.0072867437.25257338901.3264334725.33

profit

Changes in fair value of

investments in other 6905241.48 1726310.37 2599092.14 649773.03

equity instruments

Total 1194503812.00 293098621.11 1147484152.36 281173154.70

3.20 Other Non-current Assets

Item Ending balance Beginning balance

Prepayments for equipment 5834000.00 6870532.00

Total 5834000.00 6870532.00

3.21 Short-term Borrowings

Category Ending balance Beginning balance

Mortgage borrowings 0.00 34267952.97

Guarantee borrowings 0.00 48964223.34

Total 0.00 83232176.31

~ 155 ~Interim Report 2023

3.22 Notes Payable

(1) Listed by nature

Category Ending balance Beginning balance

Bank acceptance bills 212480000.00 695740000.00

Commercial acceptance bills 0.00 0.00

Total 212480000.00 695740000.00

(2) At the end of the reporting period there is no notes payable matured but not yet paid.

5.23 Accounts Payable

(1) Listed by nature

Item Ending balance Beginning balance

Payments for goods 949500340.00 1123707643.38

Payments for constructions and equipment 511432073.23 539292035.62

Other 396036791.23 391063880.15

Total 1856969204.46 2054063559.15

(2) Significant accounts payable aging over one year

Item Ending balance Reason

No. 1 981100.63 Payments for goods

No. 2 862858.85 Final payment

No. 3 598255.90 Final payment

No. 4 517243.00 Final payment

No. 5 490485.32 Final payment

Total 3449943.70 --

5.24 Contract Liabilities

Item Ending balance Beginning balance

Payment for goods 3025229971.79 826636478.35

Total 3025229971.79 826636478.35

5.25 Employee Benefits Payable

(1) List of employee benefits payable

Item Beginning balance Increase Decrease Ending balance

~ 156 ~Interim Report 2023

Item Beginning balance Increase Decrease Ending balance

I. Short-term employee benefits 793591539.55 1891342619.23 1810041140.28 874893018.50

II. Post-employment

1546766.0882066395.2881861755.551751405.81

benefits-defined contribution plans

III. Termination benefits 0.00 121127.34 121127.34 0.00

IV. Other benefits due within one

year

Total 795138305.63 1973530141.85 1892024023.17 876644424.31

(2) List of short-term employee benefits

Item Beginning balance Increase Decrease Ending balance

I. Salaries bonuses allowances and

711371745.691672419568.801586243702.43797547612.06

subsidies

II. Employee benefits 0.00 54951784.82 54951784.82 0.00

III. Social insurance 420184.43 44471544.83 44661581.87 230147.39

Of which: Health insurance 419281.03 41825990.32 42015999.21 229272.14

Injury insurance 903.40 2645554.51 2645582.66 875.25

IV. Housing accumulation fund 6773970.41 55878131.43 57342446.51 5309655.33

V. Labor union funds and employee

71814254.1418689814.1021936590.3468567477.90

education funds

VI. Enterprise annuity 3211384.88 44931775.25 44905034.31 3238125.82

Total 793591539.55 1891342619.23 1810041140.28 874893018.50

(3) Defined contribution plans

Item Beginning balance Increase Decrease Ending balance

1. Basic endowment insurance 1545352.88 78912453.57 78708034.44 1749772.01

2. Unemployment insurance 1413.20 3153941.71 3153721.11 1633.80

Total 1546766.08 82066395.28 81861755.55 1751405.81

5.26 Taxes Payable

Item Ending balance Beginning balance

VAT 254255476.34 256705264.84

~ 157 ~Interim Report 2023

Item Ending balance Beginning balance

Consumption tax 291097865.81 502091276.19

Enterprise income tax 408778673.72 335723169.21

Individual income tax 3398625.33 12550946.18

Urban maintenance and construction tax 28272630.16 40572819.42

Stamp duty 4296747.25 4553890.84

Educational surcharge 27096659.93 37594377.10

Other 14871540.56 15236386.24

Total 1032068219.10 1205028130.02

5.27 Other Payables

(1) Listed by category

Item Ending balance Beginning balance

Interest payable

Dividends payable 1585800000.00 0.00

Other payables 2941736360.10 3261763838.80

Total 4527536360.10 3261763838.80

(2) Other payables

* Listed by nature

Item Ending balance Beginning balance

Security deposit and guarantee 2451019568.08 2752404989.26

Warranty 64044176.35 58897431.31

Personal housing fund paid by company 5468646.73 5465938.41

Other 421203968.94 444995479.82

Total 2941736360.10 3261763838.80

* Significant other payables aging over one year

Other payables balance aging over one year are mainly security deposit and warranty not yet matured.

5.28 Non-current Liabilities due within one year

Item Ending balance Beginning balance

Lease liabilities due within one year 9907322.54 12204345.11

Long-term borrowings 0.00 30033000.00

~ 158 ~Interim Report 2023

Item Ending balance Beginning balance

Total 9907322.54 42237345.11

5.29 Other Current Liabilities

Item Ending balance Beginning balance

Accrued expenses 1273818015.34 942387734.28

The VAT tax liability has not yet occurred and

needs to be recognized as the value-added tax of 393861615.92 102276707.30

the output tax in the subsequent periods

Total 1667679631.26 1044664441.58

5.30 Long-term Borrowings

Item Ending balance Beginning balance

Credit Loan 20000000.00 20000000.00

Guarantee loan 158900000.00 24900000.00

Accrued interest 153388.89 44737.91

Total 179053388.89 44944737.91

5.31 Lease Liabilities

Item Ending balance Beginning balance

Lease payments 24581361.42 33494997.76

Less: unrecognized financial charges 1232081.78 2659256.72

Subtotal 23349279.64 30835741.04

Less: lease liabilities due within one year 9907322.54 12204345.11

Total 13441957.10 18631395.93

5.32 Deferred Income

(1) General information of deferred income

Item Beginning balance Increase Decrease Ending balance Reason

Government Receiving asset-related

103714978.952804835.00100910143.95

grants grants from government

Total 103714978.95 2804835.00 100910143.95 --

(2) Items involved with government grants:

Recognized in

Increase during Related to

Beginning other income

Item the Reporting Other changes Ending balance assets/related to

balance

during the income

Period

Reporting

~ 159 ~Interim Report 2023

Period

Subsidy for Suizhou new

34590105.88 373947.06 34216158.82 Related to assets

factory infrastructure

Refund of Land payment 41721392.05 489459.12 41231932.93 Related to assets

Funds for strategic

emerging industry

1129920.10 311359.98 818560.12 Related to assets

agglomeration

development base

Comprehensive subsidy

fund for air pollution 1790739.87 147182.40 1643557.47 Related to assets

prevention and control

Instrument subsidy 959437.91 160133.94 799303.97 Related to assets

Subsidy funds for strong

manufacturing province

and private economy 941529.13 154327.14 787201.99 Related to assets

development projects in

2019

Subsidy for technical

transformation of No.2 537037.00 111111.12 425925.88 Related to assets

boiler

Equipment subsidy 460698.12 104104.98 356593.14 Related to assets

Gujing Zhangji wine

cellar optimization and 692708.55 23749.98 668958.57 Related to assets

reconstruction project

Subsidy for food safety

275862.25 68965.50 206896.75 Related to assets

improvement project

Specific funds for side

management of power 84000.00 72000.00 12000.00 Related to assets

demand

Wine production system

1889148.47 119744.64 1769403.83 Related to assets

technical transformation

Intelligent solid brewing

technology innovation 26041.41 15625.02 10416.39 Related to assets

project

Specific funds for

transformation of gas-fired 167500.00 15000.00 152500.00 Related to assets

boilers

Recognition awards for 482978.61 34821.85 448156.76 Related to assets

~ 160 ~Interim Report 2023

Industrial enterprise

technical transformation

investments

Government grants from

Technology and Quality 101804.98 10274.27 91530.71 Related to assets

Department

Baijiu industry Internet

7000000.00 7000000.00 Related to assets

Platform

VOCs emission treatment

6128067.23 311596.62 5816470.61 Related to assets

for brewing workshops

Provincial special Fund

for high-quality

2707500.00 142500.00 2565000.00 Related to assets

development of

manufacturing industry

Upgrading of intelligent

and automatic baijiu 900000.04 49999.98 850000.06 Related to assets

production

Deep treatment project of

716391.45 66200.94 650190.51 Related to assets

VOCs

Project of Robot

412115.90 22730.46 389385.44 Related to assets

Development

Total 103714978.95 2804835.00 100910143.95 --

5.33 Share Capital

Changes during the Reporting Period (+-)

Item Beginning balance Bonus Capitalization Ending balance

New issues Others Subtotal

issues of reserves

The sum of

528600000.00528600000.00

shares

5.34 Capital Reserves

Item Beginning balance Increase Decrease Ending balance

Capital premium (share 6191894530.90

6191894530.90

premium)

~ 161 ~Interim Report 2023

Item Beginning balance Increase Decrease Ending balance

Other capital reserves 32853136.20 32853136.20

Total 6224747667.10 6224747667.10

5.35 Other Comprehensive Income

Reporting Period

Less:

Less:

Recorded in

Recorded in

other

other

comprehensi

comprehensiv Attributable to

ve income in Attributable to

Beginning Income before e income in owners of the Ending

Item prior period Less: Income non-controllin

balance taxation in the prior period Company as balance

and tax expense g interests

Current Period and transferred the parent

transferred after tax

to profit or after tax

to retained

loss in the

earnings in

Current

the Current

Period

Period

I. Other comprehensive income

that may not subsequently be 1169591.46 4306149.34 0.00 1076537.34 1937767.20 1291844.80 3107358.66

reclassified to profit or loss

Of which: Changes caused by

remeasurements on defined

benefit schemes

Other comprehensive

income that will not be

reclassified to profit or loss under

the equity method

Changes in fair value of

other equity instrument 1169591.46 4306149.34 0.00 1076537.34 1937767.20 1291844.80 3107358.66

investment

Changes in the fair

value arising from changes in own

credit risk

II. Other comprehensive income

that may subsequently be -760851.85 -3343717.82 -1030330.20 -578346.91 -1687623.02 -47417.69 -2448474.87

reclassified to profit or loss

Of which: Other comprehensive

income that will be reclassified to

profit or loss under the equity

~ 162 ~Interim Report 2023

method

Changes in the fair

value of investments in other debt

obligations

Other comprehensive

income arising from the -760851.85 -3343717.82 -1030330.20 - -578346.91 -1687623.02 -47417.69 -2448474.87

reclassification of financial assets

Credit impairment

allowance for investments in other

debt obligations

Reserve for cash flow

hedges

Differences arising from

translation of foreign

currency-denominated financial

statements

Total of other comprehensive

408739.61962431.52-1030330.20-498190.43250144.181244427.11658883.79

income

5.36 Surplus Reserves

Item Beginning balance Increase Decrease Ending balance

Statutory surplus reserve 269402260.27 269402260.27

Total 269402260.27 269402260.27

Note: In accordance with provisions of Company Law and Articles of Association the statutory surplus reserve

shall be withdrawn at 10% of net profits by the Company. The accumulated amount of statutory surplus reserve

can no longer be withdrawn when it is more than 50% of the Company’s registered capital.

5.37 Retained Earnings

Item Reporting Period Same period of last year

Beginning balance of retained earnings before adjustments 11497599306.54 9517374574.46

Total beginning balance of retained earnings before

adjustment (increase+ decrease-)

Beginning balance of retained earnings after adjustments 11497599306.54 9517374574.46

Add: Net profit attributable to owners of the Company as

2779474367.513143144732.08

the parent

Less: withdrawal of statutory surplus reserve

Dividend of ordinary shares payable 1585800000.00 1162920000.00

~ 163 ~Interim Report 2023

Item Reporting Period Same period of last year

Ending retained earnings 12691273674.05 11497599306.54

5.38 Operating Revenue and Cost of Sales

Reporting Period Same period of last year

Item

Operating revenue Costs of sales Operating revenue Costs of sales

Main operations 11255806929.70 2371427439.55 8962507998.25 2007802802.77

Other operations 54209565.40 17183398.73 39497925.17 15201058.59

Total 11310016495.10 2388610838.28 9002005923.42 2023003861.36

Information on operating revenue:

Contract category Liquor sales Total

Commodity type 10980685839.60 10980685839.60

Including:

Original Vintage 8761231340.80 8761231340.80

Gujinggong Liquor 1111025383.77 1111025383.77

Yellow Crane Tower and others 1108429115.03 1108429115.03

By operating segment 10980685839.60 10980685839.60

Including:

North China 821080901.86 821080901.86

Central China 9497289610.95 9497289610.95

Southern China 652489537.33 652489537.33

Overseas 9825789.46 9825789.46

Contract type 10980685839.60 10980685839.60

Including:

Commodity sales contract 10980685839.60 10980685839.60

By sales channel 10980685839.60 10980685839.60

Including:

Online 343534388.41 343534388.41

Offline 10637151451.19 10637151451.19

Total 10980685839.60 10980685839.60

Information on performance obligations: None

5.39 Taxes and Surcharges

Item Reporting Period Same period of last year

Consumption tax 1311088718.86 1047706042.57

~ 164 ~Interim Report 2023

Urban maintenance and construction tax and

249167147.23191118110.88

educational surcharge

Urban land use tax 11797701.09 10644741.02

Property tax 12402844.79 8962556.19

Stamp duty 9986220.33 9277618.92

Other 10999508.76 9029828.22

Total 1605442141.06 1276738897.80

5.40 Selling Expense

Item Reporting Period Same period of last year

Employment benefits 623631139.58 499313896.40

Travel fees 96783184.70 77211414.12

Advertisement fees 564290043.38 557349666.49

Comprehensive promotion costs 1333513264.01 1057068152.23

Service fees 371761620.49 352084304.93

Other 58035891.45 52077986.29

Total 3048015143.61 2595105420.46

5.41 Administrative Expenses

Item Reporting Period Same period of last year

404447209.51332926047.23

Employee benefits

18750767.9021699298.12

Office fees

24933916.6888287928.43

Maintenance expenses

34435401.7734878234.93

Depreciation

17399804.2217052302.25

Amortization of intangible assets

11632964.0912080582.54

Pollution discharge

7252762.784611573.45

Travel expenses

6563326.705701410.83

Water and electricity charges

58558405.7242083164.88

Other

Total 583974559.37 559320542.66

5.42 Development Costs

Item Reporting Period Same period of last year

Labor cost 20823084.10 17578443.61

~ 165 ~Interim Report 2023

Item Reporting Period Same period of last year

Direct input costs 5437858.15 4038177.88

Depreciation expense 1459282.37 1250539.87

Other 2243950.60 4970204.58

Total 29964175.22 27837365.94

5.43 Finance Costs

Item Reporting Period Same period of last year

771499.922498008.94

Interest expenses

122996635.75131378962.32

Less: Interest income

-122225135.83-128880953.38

Net interest expenses

-75794.06-429484.32

Net foreign exchange losses

-549709.86-313522.29

Bank charges and others

-122850639.75-129623959.99

Total

5.44 Other Income

Same period of last

Item Reporting Period Related to assets /income

year

I. Government grants recorded to other income

Of which: Government grant related to deferred

2804835.00 3128898.51 Related to assets

income

Government grant recorded to current

24299742.88 23080182.64 Related to income

profit or loss

Total 27104577.88 26209081.15 --

5.45 Investment Income

Item Reporting Period Same period of last year

Investment income from long-term equity

46146.26144074.52

investments under equity method

Investment income from disposal of financial

-991715.70

assets at fair value through profit or loss

Investment income from holding of debt

obligations

Investment income from holding of other

747200.50957949.08

equity instrument investments

Investment income from disposal of financial

-27223678.44-18654353.22

assets at fair value through other

~ 166 ~Interim Report 2023

comprehensive income

Investment income from holding of trading

0.000.00

financial assets

Other 75934.01 103208.20

Total -27346113.37 -17449121.42

5.46 Gains on Changes in Fair Values

Sources Reporting Period Same period of last year

Financial assets at fair value through profit or loss 25168981.30 318569.02

Of which: gains on changes in fair value of derivatives 0.00 0.00

Total 25168981.30 318569.02

5.47 Credit Impairment Loss

Item Reporting Period Same period of last year

Bad debt of notes receivable 0.00 0.00

Bad debt of accounts receivable -98593.99 -167126.54

Bad debt of other receivables 183048.19 -1091654.82

Total 84454.20 -1258781.36

5.48 Asset Impairment Loss

Item Reporting Period Same period of last year

I. Inventory falling price loss -17556673.87 4343131.74

II. Impairment loss of fixed assets 0.00 0.00

III. Impairment loss of intangible assets 0.00 0.00

Total -17556673.87 4343131.74

5.49 Gains on Disposal of Assets

Item Reporting Period Same period of last year

Gains/losses from disposal of fixed assets construction in

progress productive biological assets and intangible assets not 203366.67 191652.74

classified as held for sale

Of which: Fixed assets 203366.67 191652.74

Total 203366.67 191652.74

5.50 Non-operating Income

Recognized in current

Item Reporting Period Same period of last year non-recurring profit or

loss

~ 167 ~Interim Report 2023

Recognized in current

Item Reporting Period Same period of last year non-recurring profit or

loss

Gains from damage or scrapping of

792.36368223.18792.36

non-current asset

Government grants irrelevant to daily

0.000.000.00

operation activities

Income from penalties and compensation 27153467.53 18655281.74 27153467.53

Sales of wastes 2315235.07 2007451.66 2315235.07

Other 15206998.10 3957979.77 15206998.10

Total 44676493.06 24988936.35 44676493.06

5.51 Non-operating Expenses

Recognized in current

Item Reporting Period Same period of last year

non-recurring profit or loss

Loss from damage or scrapping of

1388046.95516064.411388046.95

non-current assets

Donations 16260100.00 5480000.00 16260100.00

Other 2710295.84 2355398.76 2710295.84

Total 20358442.79 8351463.17 20358442.79

5.52 Income Tax Expenses

(1) Details of income tax expenses

Item Reporting Period Same period of last year

Current tax expenses 1087484097.12 866229611.46

Deferred tax expenses -122827778.40 -160176427.85

Total 964656318.72 706053183.61

(2) Reconciliation of accounting profit and income tax expenses

Item Reporting Period

Profit before taxation 3808836920.39

Current income tax expense accounted at applicable tax rate of the 952209230.10

Company as the parent

Influence of applying different tax rates by subsidiaries -7257941.68

Adjustment for prior period 24766045.43

Influence of non-taxable income

~ 168 ~Interim Report 2023

Influence of non-deductable costs expenses and losses 1275896.31

Influence of deductable losses of unrecognized deferred income

tax at the beginning of the Reporting Period

Influence of deductable temporary difference or deductable

losses of unrecognized deferred income tax in the Reporting

Period

Influence of development expense deduction -6336911.44

Tax rate adjustment to the beginning balance of deferred income

tax assets/liabilities

Income tax credits

Total 964656318.72

5.53 Notes to the Statement of Cash Flows

(1) Other cash received relating to operating activities

Item Reporting Period Same period of last year

Security deposit guarantee and warranty 191395775.56 210649471.58

Government grants 23086588.11 35430182.64

Interest income 114262772.85 100343028.34

Release of restricted monetary assets 667182706.08 0.00

Other 60720033.61 70451751.06

Total 1056647876.21 416874433.62

(2) Other cash payments relating to operating activities

Item Reporting Period Same period of last year

Cash paid in sales and distribution expenses and

1028393443.01614584443.16

general and administrative expense

Security deposit guarantee and warranty 112028193.49 73317371.12

Time deposits or deposits pledged for the

10001995.000.00

issuance of notes payable

Others 106759182.45 84256242.29

Total 1257182813.95 772158056.57

(3) Other cash payments relating to financing activities

Item Reporting Period Same period of last year

Rental fee 8506249.20 9257885.61

Total 8506249.20 9257885.61

5.54 Supplementary Information to the Statement of Cash Flows

~ 169 ~Interim Report 2023

(1) Supplementary information to the statement of cash flows

Supplementary information Reporting Period Same period of last year

1. Reconciliation of net profit to net cash

flows generated from operating activities:

Net profit 2844180601.67 1972562616.63

Add: Provisions for impairment of assets 17556673.87 -4343131.74

Losses on credit impairment -84454.20 1258781.36

Depreciation of fixed assets oil and gas

141764699.64114197513.54

assets and productive biological assets

Depreciation of right-of-use assets 7271247.88 7290438.15

Amortization of intangible assets 21694016.84 21260439.42

Amortization of long-term deferred expenses 14328044.89 15659432.46

Losses from disposal of fixed assets

intangible assets and other long-term assets -203366.67 -191652.74

(gains: negative)

Losses on scrapping of fixed assets (gains:

1387254.59147841.23

negative)

Losses on changes in fair value (gains:

-25168981.30-318569.02

negative)

Finance costs (gains: negative) 695705.86 -429484.32

Investment losses (gains: negative) 27346113.37 17449121.42

Decreases in deferred tax assets (increase:

-134248634.08-153080744.31

negative)

Increases in deferred tax liabilities (decrease:

11925466.41-6352743.86

negative)

Decreases in inventories (increase: negative) -133877031.57 -344209016.09

Decreases in operating receivables (increase:

-555140216.28-111211423.56

negative)

Increases in operating payables (decrease:

1821226849.732661557381.22

negative)

Other*1 667182706.08 0.00

Net cash flows from operating activities 4727836696.73 4191246799.79

2. Significant investing and financing

~ 170 ~Interim Report 2023

activities without involvement of cash

receipts and payments

Conversion of debt into capital

Current portion of convertible corporate

bonds

Fixed assets acquired under finance leases

3. Net increase/decrease of cash and cash

equivalents:

Ending balance of cash 16842303222.36 11409624162.43

Less: Beginning balance of cash 13105373435.22 6057550178.60

Add: Ending balance of cash equivalents

Less: Beginning balance of cash equivalents

Net increase in cash and cash equivalents 3736929787.14 5352073983.83

*1: Refer to impact of recovered restricted funds for operating activities paid at the same period of last year on net

cash flow generated from operating activities of the reporting period.

(2) Net Cash Paid For Acquisition of Subsidiaries

Item Amount

Cash or cash equivalents paid in the Reporting Period for business

combination occurring in the Reporting Period

Of which:

Less: cash or cash equivalents held by subsidiaries on the purchase

date

Of which:

Add: cash or cash equivalents paid in the Reporting Period for

13439262.05

business combination occurring in prior period

Of which:

Net payments for acquisition of subsidiaries 13439262.05

(3) The components of cash and cash equivalents

Item Reporting Period Same period of last year

I. Cash 16842303222.36 11409624162.43

Including: Cash on hand 100681.01 97411.12

Bank deposit on demand 16842069031.88 11409370669.26

Other monetary assets on demand 133509.47 156082.05

~ 171 ~Interim Report 2023

II. Cash equivalents

Of which: Bond investments maturing within three months

III. Ending balance of cash and cash equivalents 16842303222.36 11409624162.43

Of which: cash and cash equivalents with restriction to use in the

subsidies of the Company as the parent or Group

5.55 Assets with Restricted Ownership or Right of Use

Item Ending carrying value Reason

Certificate of deposit pledged for opening

Cash and cash equivalents 10006995.00

bank acceptance bills and security deposit

Intangible assets 169116600.00 Pledged for guarantee loans

Total 179123595.00 --

5.56 Government Grants

(1) Government grants related to assets

Item Recognized in current profit or loss or as Presented item

presented in deduct of related cost recorded to current

Item Amount the statement profit or loss or as

Reporting

of financial Same period of last year deduct of related

Period

position cost

Suizhou new plant infrastructure Deferred

34216158.82 373947.06 373947.06 Other income

subsidy income

Deferred

Refund for land payment 41231932.93 489459.12 489459.12 Other income

income

Funds for strategic emerging

Deferred

industry agglomeration 818560.12 311359.98 311359.98 Other income

income

development base

Comprehensive subsidy fund for

Deferred

air pollution prevention and 1643557.47 147182.40 147182.40 Other income

income

control

Deferred

Equipment subsidy 799303.97 160133.94 160133.94 Other income

income

Subsidy funds for strong

manufacturing province and Deferred

787201.99 154327.14 154327.14 Other income

private economy development income

projects in 2019

Subsidy for the construction of

Deferred

independent innovation capacity 0.00 0.00 365272.50 Other income

income

of Anhui Province

~ 172 ~Interim Report 2023

Subsidy for technical Deferred

425925.88 111111.12 111111.12 Other income

transformation of No.2 boiler income

Deferred

Equipment subsidy 356593.14 104104.98 104104.56 Other income

income

Optimization and reconstruction

Deferred

project of Gujing Zhangji liquor 668958.57 23749.98 23749.98 Other income

income

store

Subsidy for food safety Deferred

206896.75 68965.50 68965.50 Other income

improvement project income

Anhui province development of Deferred

0.00 0.00 146341.44 Other income

direct funds of service industry income

Specific funds for side Deferred

12000.00 72000.00 72000.00 Other income

management of power demand income

Whole process online

Deferred

monitoring of hook and store 0.00 0.00 46875.32 Other income

income

automation and product quality

Wine production system Deferred 119744.64

1769403.83 145786.08 Other income

technical transformation income

Intelligent solid brewing Deferred 15625.02

10416.39 15625.02 Other income

technology innovation project income

Specific fund for transformation Deferred 15000.00

152500.00 15000.00 Other income

of gas-fired boilers income

Recognition awards for 34821.85

Deferred

industrial enterprise technical 448156.76 34821.86 Other income

income

transformation investments

Government grants from

Deferred

Technology and Quality 91530.71 10274.27 10274.26 Other income

income

Department

Deferred

Baijiu industry Internet Platform 7000000.00 0.00 0.00 Other income

income

VOCs emission treatment Deferred

5816470.61 311596.62 0.00 Other income

project for brewing workshops income

Provincial special Fund for

Deferred

high-quality development of 2565000.00 142500.00 0.00 Other income

income

manufacturing industry

Upgrading of intelligent and Deferred

850000.06 49999.98 49999.98 Other income

automatic baijiu production income

Deferred

650190.51 66200.94 267407.61 Other income

Deep treatment project of VOCs income

~ 173 ~Interim Report 2023

Deferred

389385.44 22730.46 15153.64 Other income

Project of Robot Development income

Total 100910143.95 -- 2804835.00 3128898.51 --

(2) Government grants related to income

Item Recognized in current profit or loss or as Presented

presented deduct of related cost item recorded

in the to current

Item Amount

statement Reporting profit or loss

Same period of last year

of financial Period or as deduct

position of related cost

Other

Tax refund 3744824.92 3744824.92 4798088.43 Other income

income

Rewards for

supporting

high-quality Other

720000.00 Other income

development of income

intellectual property

rights

Subsidy for

Other

commending 13470300.00 13470300.00 7437183.00 Other income

income

industry

Bozhou rewards and

subsidies for

Other

supporting 800000.00 Other income

income

technological

innovation

Manufacturing

Power Province

Subsidies for Other

1140000.00 Other income

Intelligent and income

Automatic Baijiu

Production

The third special

fund from Bureau

for Promoting

Economy and Other

558760.00 Other income

Technology of income

High-tech Zone of

Xianning for carriers

with characteristics

~ 174 ~Interim Report 2023

of innovation and

entrepreneurship

VAT add-on Other

1216092.52 1216092.52 2650735.41 Other income

deduction income

Other

Others 3113985.44 3113985.44 4975415.80 Other income

income

Other

Plant rent subsidy 1800000.00 1800000.00 Other income

income

Special fund for

special carriers of

Other

mass 954540.00 954540.00 0.00 Other income

income

entrepreneurship and

innovation

Finance Finance

Discounted loans 1392125.00 1392125.00 9666.66

expense expense

Total 25691867.88 -- 25691867.88 23089849.30 --

6. CHANGES OF CONSOLIDATION SCOPE

6.1 Changes in Combination Scope for Other Reasons

Compared with the previous period the Company added subsidiaries Anhui Guqi Distillery Co. Ltd. Wuhan

Gulou Junhe Trading Co. Ltd. and Wuhan Gulou Juntai Trading Co. Ltd.

7. EQUITY IN OTHER ENTITIES

7.1 Equity in Subsidiaries

(1) Composition of corporate group

Main Holding percentage (%)

Registration Nature of

Name operating Way of gaining

place business Directly Indirectly

place

Anhui Commercial Investment

Bozhou Gujing Sales Co. Ltd. Anhui Bozhou 100.00

Bozhou trade establishment

Anhui Investment

Anhui Longrui Glass Co. Ltd Anhui Bozhou Manufacture 100.00

Bozhou establishment

Anhui Jiuan Mechanical Electrical Anhui Equipment Investment

Anhui Bozhou 100.00

Equipment Co. Ltd. Bozhou manufacturing establishment

Anhui Jinyunlai Culture & Media Advertisement Investment

Anhui Hefei Anhui Hefei 100.00

Co. Ltd. marketing establishment

Anhui Ruisiweier Technology Co. Anhui Technical Investment

Anhui Bozhou 100.00

Ltd. Bozhou research establishment

Shanghai Gujing Jinhao Hotel Shanghai Shanghai Hotel 100.00 Business

~ 175 ~Interim Report 2023

Management Co. Ltd. management combination

under common

control

Bozhou Gujing Hotel Co. Ltd Business

Anhui combination

Anhui Bozhou Hotel operating 100.00

Bozhou under common

control

Anhui Yuanqing Environmental Anhui Sewage Investment

Anhui Bozhou 100.00

Protection Co. Ltd. Bozhou treatment establishment

Anhui Gujing Yunshang Electronic Investment

Anhui Hefei Anhui Hefei 100.00

E-commerce Co. Ltd commerce establishment

Anhui RunAnXinKe Testing Anhui Investment

Anhui Bozhou Food testing 100.00

Technology Co. Ltd. Bozhou establishment

Anhui Jiudao Culture Media Co. Advertisement Investment

Anhui Hefei Anhui Hefei 100.00

Ltd. marketing establishment

Anhui Gujinggong Liquor Original

Anhui Investment

Vintage Theme Hotel Management Anhui Bozhou Hotel operation 100.00

Bozhou establishment

Co. Ltd.Anhui Investment

Anhui Anjie Technology Co. Ltd. Anhui Bozhou Food testing 70.00

Bozhou establishment

Anhui Investment

Anhui Guqi Distillery Co. Ltd. Anhui Bozhou Manufacture 60.00

Bozhou establishment

Business

Yellow Crane Tower Distillery Co. combination not

Hubei Wuhan Hubei Wuhan Manufacture 51.00

under common

Ltd.control

Business

Yellow Crane Tower Distillery Hubei Hubei combination not

Manufacture 51.00

(Xianning) Co. Ltd. Xianning Xianning under common

control

Business

Yellow Crane Tower Distillery Hubei Hubei combination not

Manufacture 51.00

(Suizhou) Co. Ltd. Suizhou Suizhou under common

control

Business

Hubei Junlou Cultural Tourism Co. Hubei Hubei Advertising combination not

51.00

Ltd. Wuhan Wuhan marketing under common

control

Hubei Yellow Crane Tower Beverage Hubei Hubei Investment

Manufacture 51.00

Co. Ltd Xianning Xianning establishment

~ 176 ~Interim Report 2023

Wuhan Yashibo Technology Co. Technology Investment

Hubei Wuhan Hubei Wuhan 51.00

Ltd. development establishment

Hubei Xinjia Testing Technology Hubei Hubei Investment

Food testing 51.00

Co. Ltd. Xianning Xianning establishment

Business

Wuhan Tianlong Jindi Technology Commercial combination not

Hubei Wuhan Hubei Wuhan 51.00

Development Co. Ltd trade under common

control

Business

Hubei Hubei Commercial combination not

Xianning Junhe Sales Co. Ltd 51.00

Xianning Xianning trade under common

control

Commercial Investment

Wuhan Junya Sales Co. Ltd Hubei Wuhan Hubei Wuhan 51.00

trade establishment

Hubei Hubei Commercial Investment

Suizhou Junhe Commercial Co. Ltd. 51.00

Suizhou Suizhou trade establishment

Huanggang Huanggang Commercial Investment

Huanggang Junya Trading Co. Ltd. 51.00

Hubei Hubei trade establishment

Wuhan Gulou Junhe Trading Co. Commercial Investment

Hubei Wuhan Hubei Wuhan 51.00

Ltd. trade establishment

Wuhan Gulou Juntai Trading Co. Commercial Investment

Hubei Wuhan Hubei Wuhan 51.00

Ltd. trade establishment

Business

Anhui Mingguang Distillery Co. Anhui Anhui combination not

Manufacture 60.00

Ltd. Chuzhou Mingguang under common

control

Business

Mingguang Tiancheng Ming Wine Anhui Anhui Commercial combination not

60.00

Sales Co. Ltd. Chuzhou Mingguang trade under common

control

Business

Fengyang Xiaogang Village Ming Anhui Anhui combination not

Manufacture 42.00

Wine Distillery Co. Ltd. Chuzhou Chuzhou under common

control

Anhui Jiuhao China Railway Anhui Investment

Anhui Bozhou Construction 52.00

Construction Engineering Co. Ltd. Bozhou establishment

Anhui Zhenrui Construction Anhui Investment

Anhui Bozhou Construction 52.00

Engineering Co. Ltd Bozhou establishment

Renhuai Maotai Town Zhencang Renhuai Renhuai Business

Manufacture 60.00

Winery Industry Co. Ltd. Guizhou Guizhou combination not

~ 177 ~Interim Report 2023

under common

control

Anhui Gujing Health Technology Business

Co. Ltd. Anhui combination not

Anhui Bozhou Manufacture 60.00

Bozhou under common

control

Anhui Maiqi Biotechnology Co. Business

Ltd. Anhui Technology combination not

Anhui Bozhou 60.00

Bozhou development under common

control

Anhui Yangshengtianxia Brand Business

Operation Co. Ltd. Anhui Anhui Advertising combination not

60.00

Hefei Hefei marketing under common

control

Hainan Yangshengtianxia Business

Biotechnology Development Co. Hainan Hainan Commercial combination not

60.00

Ltd. Lingshui Lingshui trade under common

control

(2) Significant non-wholly owned subsidiaries

Shareholding

The profit or loss Declaring dividends Balance of

proportion of

Name attributable to the distributed to non-controlling interests

non-controlling

non-controlling interests non-controlling interests at the period-end

interests

Yellow Crane Tower

49.0049480734.840.00599231262.60

Distillery Co. Ltd.

(3) Main financial information of significant non-wholly owned subsidiaries

Ending balance

Name Non-current Current Non-current

Current assets Total assets Total liabilities

assets liabilities liability

Yellow Crane

Tower Distillery 1039423337.10 1162240464.05 2201663801.15 650778983.48 327963873.59 978742857.07

Co. Ltd.

(Continued)

Beginning balance

Name Non-current Current Non-current

Current assets Total assets Total liabilities

assets liabilities liability

Yellow Crane

1174784972.791095159397.172269944369.96952593793.76195313952.861147907746.62

Tower Distillery

~ 178 ~Interim Report 2023

Beginning balance

Name Non-current Current Non-current

Current assets Total assets Total liabilities

assets liabilities liability

Co. Ltd.

(Continued)

Reporting Period

Name Total comprehensive Cash flows from operating

Operating revenue Net profit

income activities

Yellow Crane Tower Distillery

865646272.06100981091.52100884320.7419674621.86

Co. Ltd.

(Continued)

Same period of last year

Name Total comprehensive Cash flows from operating

Operating revenue Net profit

income activities

Yellow Crane Tower Distillery

886104927.21102164790.08101725592.48-32042974.64

Co. Ltd.

7.2 Equity in joint ventures or associated enterprises

There was no significant joint venture or associated enterprise.

8. THE RISK RELATED TO FINANCIAL INSTRUMENTS

Risks related to the financial instruments of the Company arise from the recognition of various financial assets

and financial liabilities during its operation including credit risk liquidity risk and market risk.Management of the Company is responsible for determining risk management objectives and policies related to

financial instruments. Operational management is responsible for the daily risk management through functional

departments. Internal audit department is responsible for the daily supervision of implementation of the risk

management policies and procedures and report their findings to the audit committee in a timely manner.Overall risk management objective of the Company is to establish risk management policies to minimize the risks

without unduly affecting the competitiveness and resilience of the Company.

8.1 Credit Risk

Credit risk is the risk of one party of the financial instrument face to a financial loss because the other party of the

financial instrument fails to fulfill its obligation. The credit risk of the Company is related to cash and equivalent

notes receivable accounts receivables other receivables and long-term receivables. Credit risk of these financial

assets is derived from the counterparty’s breach of contract. The maximum risk exposure is equal to the carrying

~ 179 ~Interim Report 2023

amount of these financial instruments.Cash and cash equivalent of the Company has lower credit risk as they are mainly deposited in such financial

institutions as commercial bank of which the Company thinks with higher reputation and financial position.Notes receivable held by the Company are mainly bank acceptance bills which have strong liquidity. The

Company has formulated corresponding bill management and control procedures and has been effectively

implemented which greatly ensures the safety of bill storage and use to ensure the low credit risks. The Company

only conducts business with customers with good credit rating and will continue to monitor the balance of

accounts receivable to ensure that the Company avoids the risk of major bad debt losses. The company's largest

credit risk exposure is the book value of each financial asset (including derivative financial instruments) in the

balance sheet and the overall credit risk evaluation is low.

8.2 Liquidity Risk

Liquidity risk is the risk of shortage of funds when fulfilling the obligation of settlement by delivering cash or

other financial assets. The Company is responsible for the capital management of all of its subsidiaries including

short-term investment of cash surplus and dealing with forecasted cash demand by raising loans. The Company’s

policy is to monitor the demand for short-term and long-term floating capital and whether the requirement of loan

contracts is satisfied so as to ensure to maintain adequate cash and cash equivalents.

8.3 Market Risk

The market risk of financial instruments refers to the risk that the fair value or future cash flows of financial

instruments will fluctuate due to changes in market prices. Market risks mainly include foreign exchange risk and

interest rate risk.

(1) Foreign currency risk

Foreign exchange risk refers to the risk of loss due to exchange rate fluctuations generally. The core business of

the Company is on the mainland of China and trading with CNY. Foreign exchange risk is minimal.

(2) Interest rate risk

Interest rate risk refers to the risk that the fair value of financial instruments or future cash flows will fluctuate due

to changes in market interest rates. The Company's interest rate risk mainly comes from long-term and short-term

bank borrowings. As of 30 June 2023 the Company has no liabilities calculated with floating interest rates.

(3) Other price risk

The Held-for-trading financial assets of the Company are measured by fair value. As a result of that the Company

~ 180 ~Interim Report 2023

bears the risk of the change of security market. To decrease the risk the management decided that the Company

held a combination of several equities and securities.

9. THE DISCLOSURE OF FAIR VALUE

The inputs used in the fair value measurement in its entirety are to be classified in the level of the hierarchy in

which the lowest level input that is significant to the measurement is classified:

Level 1: Inputs consist of unadjusted quoted prices in active markets for identical assets or liabilities

Level 2: Inputs for the assets or liabilities (other than those included in Level 1) that are either directly or

indirectly observable.Level 3: Inputs are unobservable inputs for the assets or liabilities

9.1 Assets and liabilities measured at fair value on 30 June 2023

Fair value on 30 June 2023

Item

Level 1 Level 2 Level 3 Total

Recurring fair value measurements

(a) Held-for-trading financial assets

1790678478.171790678478.17

(i) Financial assets at fair value through

1790678478.171790678478.17

profit or loss

Debt instruments

Bank financial products 1790678478.17 1790678478.17

Fund investment

(ii) Financial assets measured at fair

value through other comprehensive - 60753939.28 835279520.98 896033460.26

income

Accounts receivable financing

0.00835279520.98835279520.98

Investments in other equity instrument 60753939.28 0.00 60753939.28

Total assets measured at fair value on a

-1851432417.45835279520.982686711938.43

recurring basis

The fair value of financial instruments traded in an active market is based on quoted market prices at the reporting

date. The fair value of financial instruments not traded in an active market is determined by using valuation

techniques. Specific valuation techniques used to value the above financial instruments include discounted cash

flow and market approach to comparable company model. Inputs in the valuation technique include risk-free

interest rates benchmark interest rates exchange rates credit spreads liquidity premiums discount for lack of

liquidity.~ 181 ~Interim Report 2023

9.2 Valuation Technique(s) Qualitative and Quantitative Information about the Significant Inputs Used for

Fair Value Measurement in Level 2 on a Recurring or Nonrecurring Basis

The items of fair value measurement in Level 2 of the Company are mainly about wealth management products.For wealth management products the Company shall account actual revenues determine corresponding gains or

losses arising from changes in fair value and the value of trading financial assets according to terms and

conditions stipulated in the wealth management product contracts.

9.3 Valuation Technique(s) Qualitative and Quantitative Information about the Significant Inputs Used for

Fair Value Measurement in Level 3 on a Recurring or Nonrecurring Basis

The items of fair value measurement in Level 3 of the Company are mainly about received bank acceptance bills

with high credit rating. We shall account the recoverable amount thereof according to the prevailing discounting

rate on the balance sheet date and determine the fair value thereof.

10. RELATED PARTY AND RELATED-PARTY TRANSACTIONS

Recognition of related parties: The Company has control or joint control of or exercise significant influence over

another party; or the Company is controlled or jointly controlled or significant influenced by another party.

10.1 General Information of the Parent Company

Proportion of

Proportion of share

voting rights

held by the

Registration owned by the

Name Nature of business Registered capital Company as the

place Company as the

parent against the

parent against the

Company (%)

Company (%)

Beverages construction

Anhui Gujing Group Anhui

materials manufacturing 1000000000.00 51.34 51.34

Co. Ltd.Bozhou

plastic production

The ultimate controller of the Company: The ultimate controller is State-owned Assets Supervision and

Administration Commission of the Government of Bozhou City Anhui Province.

10.2 General Information of Subsidiaries

Refer to Note 7.1 Equity in joint ventures or associated enterprises for details.

10.3 Joint ventures and associated enterprises of the Company

(1) General information of significant joint ventures and associates

Refer to Note 7.2 Equity in joint ventures or associated enterprises for details.

10.4 Other Related Parties of the Company

~ 182 ~Interim Report 2023

Name Relationship with the Company

Enterprise controlled by Zhang Guiping who is an

Nanjing Suning Real Estate Development Co. Ltd.independent director of the Company

An affiliate of the actual controller and controlling

Anhui Vista Business Travel (Group) Co. Ltd.shareholder

An affiliate of the actual controller and controlling

Hefei Gujing Holiday Hotel Co. Ltd.shareholder

An affiliate of the actual controller and controlling

Anhui Gujing Huishenglou Catering Co. Ltd.shareholder

An affiliate of the actual controller and controlling

Anhui Haochidian Catering Co. Ltd.shareholder

An affiliate of the actual controller and controlling

Anhui Vista Catering Management Co. Ltd.shareholder

An affiliate of the actual controller and controlling

Shanghai Beihai Restaurant Co. Ltd.shareholder

An affiliate of the actual controller and controlling

Anhui Gujing Hotel Development Co. Ltd.shareholder

An affiliate of the actual controller and controlling

Anhui Huixin Finance Investment Group Co. Ltd

shareholder

An affiliate of the actual controller and controlling

Bozhou Anxin Micro Finance Co. Ltd.shareholder

An affiliate of the actual controller and controlling

Anhui Hengxin Pawn Co. Ltd.shareholder

An affiliate of the actual controller and controlling

Anhui Ruixin Pawn Co. Ltd.shareholder

An affiliate of the actual controller and controlling

Anhui Zhongxin Finance Leasing Co. Ltd.shareholder

An affiliate of the actual controller and controlling

Anhui Lixin E-commerce Co. Ltd.shareholder

An affiliate of the actual controller and controlling

Anhui Youxin Financing Guarantee Co. Ltd.shareholder

An affiliate of the actual controller and controlling

Hefei Longxin Business Management Consulting Co. Ltd.shareholder

An affiliate of the actual controller and controlling

Anhui Chuangxin Equity Investment Co. Ltd.shareholder

An affiliate of the actual controller and controlling

Anhui Lejiu Home Tourism Management Co. Ltd.shareholder

An affiliate of the actual controller and controlling

Anhui Shenglong Commercial Co. Ltd.shareholder

An affiliate of the actual controller and controlling

Anhui Gujing Health Industry Co. Ltd.shareholder

An affiliate of the actual controller and controlling

Bozhou Hotel Co. Ltd.shareholder

~ 183 ~Interim Report 2023

An affiliate of the actual controller and controlling

Dongfang Vista Business Investment Development Co. Ltd.shareholder

An affiliate of the actual controller and controlling

Anhui Gujing International Development Co. Ltd.shareholder

An affiliate of the actual controller and controlling

Anhui Jiuan Engineering Management Consulting Co. Ltd.shareholder

10.5 Related Party Transactions

(1) Purchases or sales of goods rendering or receiving of services

Purchases of goods receiving of services:

Reporting Same period of last

Related party Content

Period year

Bozhou Hotel Co. Ltd. Catering and accommodation service 4325048.30 298619.87

Bozhou Gujing Huishenglou Catering Co. Ltd. Catering and accommodation service 3553459.37 54578.00

Anhui Haochidian Catering Co. Ltd. Catering and accommodation service 0.00 1507790.81

Anhui Gujing Hotel Development Co. Ltd. Catering and accommodation service 728018.80 93310.05

Anhui Vista Business Travel (Group) Co. Ltd. Purchase of materials 45663.72 101061.95

Anhui Vista Business Travel (Group) Co. Ltd. Catering and accommodation service 10358.79 138089.91

Hefei Gujing Holiday Hotel Co. Ltd. Catering and accommodation service 22627.37 33214.85

Purchase of materials and receiving of 233711.85

Hefei Gujing Holiday Hotel Co. Ltd. 288237.40

services

Anhui Jiuan Engineering Management Consulting

Consultation and assurance 3098429.54 4012244.33

Co. Ltd.Total -- 12017317.74 6527147.17

Sales of goods and rendering of services:

Related party Content Reporting Period Same period of last year

Anhui Shenglong Commercial Co. Ltd. Sales of baijiu 1011223.02 1243492.90

Anhui Gujing Hotel Development Co. Ltd. Utilities 53250.00 67699.91

Catering and

Anhui Gujing Group Co. Ltd. accommodation 75237.68 66730.00

service

Sales of small

Anhui Gujing Group Co. Ltd. 45141.22 17907.56

materials

Anhui Gujing Hotel Development Co. Ltd. Sales of baijiu 18141.59 0.00

Catering and

Anhui Vista Business Travel (Group) Co. Ltd. accommodation 3083.75 7061.78

service

Sales of small

Bozhou Hotel Co. Ltd. 44233.90 0.00

materials

~ 184 ~Interim Report 2023

Anhui Huixin Finance Investment Group Co. Ltd Sales of baijiu 0.00 42022.13

Bozhou Gujing Huishenglou Catering Co. Ltd. Sales of baijiu 13238.94 0.00

Bozhou Anxin Micro Finance Co. Ltd. Sales of baijiu 0.00 40457.53

Anhui Zhongxin Finance Leasing Co. Ltd. Sales of baijiu 0.00 9650.45

Anhui Ruixin Pawn Co. Ltd. Sales of baijiu 0.00 15440.71

Anhui Jiuan Engineering Management Consulting Co. Ltd. Sales of baijiu 60318.59 60220.35

Anhui Lejiu Home Tourism Management Co. Ltd. Sales of baijiu 0.00 11155.76

Catering and

Anhui Shenglong Commercial Co. Ltd. accommodation 6539.00 1940.00

service

Anhui Lejiu Home Tourism Management Co. Ltd. Utilities 1346.46 3404.52

Anhui Ruixin Pawn Co. Ltd. Sales of baijiu 0.00 7720.35

Anhui Youxin Financing Guarantee Co. Ltd. Sales of baijiu 0.00 3010.63

Catering and

Anhui Jiuan Engineering Management Consulting Co. Ltd. accommodation 3220.00 7190.00

service

Sales of small

Bozhou Anxin Micro Finance Co. Ltd. 9911.50 0.00

materials

Anhui Shenglong Commercial Co. Ltd. Sales of small

1796.460.00

materials

Hefei Longxin Business Management Consulting Co. Ltd Sales of baijiu 0.00 1930.09

Sales of small

Anhui Jiuan Engineering Management Consulting Co. Ltd. 9376.56 0.00

materials

Hefei Gujing Holiday Hotel Co. Ltd. Sales of small

14658.280.00

materials

Hefei Gujing Holiday Hotel Co. Ltd. Catering and

accommodation 1276.02 0.00

service

Anhui Vista Business Travel (Group) Co. Ltd. Sales of small

4605.300.00

materials

Dongfang Vista Business Investment Development Co. Ltd. Catering and

accommodation 0.00 82528.93

service

Anhui Gujing Hotel Development Co. Ltd. Catering and

accommodation 0.00 14266.98

service

Anhui Gujing Hotel Development Co. Ltd. Sales of small

17544.240.00

materials

~ 185 ~Interim Report 2023

Total -- 1394142.51 1703830.58

(2) Related-party leases

The Company as lessor:

Category of leased The lease income confirmed in The lease income confirmed in

Name of lessee

assets the Reporting Period the same period of last year

Anhui Gujing Hotel Development Co. Ltd. Houses and buildings 261183.34 420957.38

Total -- 261183.34 420957.38

The Company as lessee:

Category of leased The lease fee confirmed in the The lease fee confirmed in

Name of lessor

assets Reporting Period the same period of last year

Anhui Gujing Group Co. Ltd. Houses and buildings 534782.12 523451.01

Nanjing Suning Real Estate Development Co. Ltd. Houses and buildings 1050000.00 1050000.00

Total -- 1584782.12 1573451.01

10.6 Receivables and Payables with Related Parties

Item Related party Ending balance Beginning balance

Contract assets Bozhou Hotel Co. Ltd. 546215.81 1855188.15

Contract

Anhui Vista Business Travel (Group) Co. Ltd. 221.12 221.12

liabilities

Contract

Anhui Gujing International Development Co. Ltd. 58849.56 58849.56

liabilities

Contract

Anhui Gujing Hotel Development Co. Ltd. 148.67 148.67

liabilities

Anhui Jiuan Engineering Management Consulting Co.Accounts payable 1245656.92 2151065.65

Ltd.Other payables Anhui Vista Business Travel (Group) Co. Ltd. 25533.60 115533.60

Other payables Anhui Gujing Hotel Development Co. Ltd. 100108.48 50000.00

Other payables Anhui Gujing Group Co. Ltd. 86355.30 0.00

11. COMMITMENTS AND CONTINGENCY

11.1 Significant Commitments

As of 30 June 2023 the Company has no significant commitments need to be disclosed.

11.2 Contingencies

As of 30 June 2023 The Company has no contingencies need to be disclosed.

12. EVENTS AFTER BALANCE SHEET DATE

As of 30 June 2023 except as aforesaid the Company has no other events after balance sheet date need to be

~ 186 ~Interim Report 2023

disclosed.

13. OTHER SIGNIFICANT EVENTS

Segment information

The Company did not determine the operating segment in accordance with the internal organizational structure

management requirements and internal reporting system so there was no need to disclose segment information

report based on the operating segments.

14. NOTES OF MAIN ITEMS IN THE FINANCIAL STATEMENTS OF THE COMPANY AS THE

PARENT

14.1 Accounts Receivable

(1) On 30 June 2023 the Company as the parent has no balance of accounts receivable.

(2) On 1 January 2023 the Company as the parent has no balance of accounts receivable.

(3) There is no change in bad debt provision for the Company as the parent during the Reporting Period.

14.2 Other Receivables

(1) Listed by category

Item Ending balance Beginning balance

Interest receivable

Dividends receivable

Other receivables 315299233.76 202279154.63

Total 315299233.76 202279154.63

(2) Other receivables

* Disclosure by aging

Aging Ending balance Beginning balance

Within one year 313813660.69 200863691.53

Of which:1-6 months 313762218.08 200851698.40

7-12 months 51442.61 11993.13

1-2 years 1303136.00 1303136.00

2-3 years 690291.70 710291.70

Over 3 years 39699235.28 39757474.30

Subtotal 355506323.67 242634593.53

Less: Bad debt provision 40207089.91 40355438.90

~ 187 ~Interim Report 2023

Total 315299233.76 202279154.63

* Disclosure by nature

Nature Ending balance Beginning balance

Related parties within the scope of consolidation 310779913.48 189661149.05

Security investment 38336008.08 38434247.10

Security deposit and guarantee 3351294.09 3351294.09

Rent water electricity and gas 824458.36 741495.49

Other 2214649.66 10446407.80

Total 355506323.67 242634593.53

* Disclosure by withdrawal method of bad debt provision

A. As of 30 June 2023 bad debt provision withdrawn based on three stages model:

Stage Carrying amount Bad debt provision Carrying value

Stage 1 317170315.59 1871081.83 315299233.76

Stage 2

Stage 3 38336008.08 38336008.08 0.00

Total 355506323.67 40207089.91 315299233.76

A1. As of 30 June 2023 bad debt provision at stage 1:

12-month expected credit

Category Carrying amount Bad debt provision Carrying value

losses rate (%)

Bad debt provision withdrawn

separately

Bad debt provision withdrawn

317170315.590.591871081.83315299233.76

by group-

Of which: Group 1 310779913.48 0.00 0.00 310779913.48

Group 2 6390402.11 29.28 1871081.83 4519320.28

Total 317170315.59 0.59 1871081.83 315299233.76

On 30 June 2023 other receivables with bad debt provision withdrawn by group 2

Ending balance

Aging Withdrawal proportion

Carrying amount Bad debt provision

(%)

Within one year 3033747.21 32395.18 1.07

Of which:1-6 months 2982304.60 29823.05 1.00

~ 188 ~Interim Report 2023

7-12 months 51442.61 2572.13 5.00

1-2 years 1303136.00 130313.60 10.00

2-3 years 690291.70 345145.85 50.00

Over 3 years 1363227.20 1363227.20 100.00

Total 6390402.11 1871081.83 29.28

A2. As of 30 June 2023 bad debt provision at stage 3:

Expected credit loss rate for

Category Carrying amount Bad debt provision Carrying value

the entire duration (%)

Bad debt provision withdrawn -

38336008.08100.0038336008.08

separately

Bad debt provision withdrawn

by group

Of which: Group 1

Group 2

Total 38336008.08 100.00 38336008.08 -

On 30 June 2023 other receivables with bad debt provision withdrawn separately:

Ending balance

Withdrawal

Name

Carrying amount Bad debt provision proportion Withdrawal reason

(%)

The enterprise has gone bankrupt

Hengxin Securities Co. Ltd. 28635660.22 28635660.22 100.00

and liquidated

The enterprise has gone bankrupt

Jianqiao Securities Co. Ltd. 9700347.86 9700347.86 100.00

and liquidated

Total 38336008.08 38336008.08 100.00 --

B. As of 1 January 2023 bad debt provision withdrawn based on three stages model:

Stage Carrying amount Bad debt provision Carrying value

Stage 1 204200346.43 1921191.80 202279154.63

Stage 2

Stage 3 38434247.10 38434247.10 0.00

Total 242634593.53 40355438.90 202279154.63

B1. On 1 January 2023 bad debt provision at stage 1:

~ 189 ~Interim Report 2023

12-month expected credit

Category Carrying amount Bad debt provision Carrying value

losses rate (%)

Bad debt provision withdrawn

separately

Bad debt provision withdrawn

204200346.430.941921191.80202279154.63

by group

Of which: Group 1 189661149.05 0.00 0.00 189661149.05

Group 2 14539197.38 13.21 1921191.80 12618005.58

Total 204200346.43 0.94 1921191.80 202279154.63

On 1 January 2023 other receivables with bad debt provision withdrawn by group 2

Beginning balance

Aging Withdrawal proportion

Carrying amount Bad debt provision

(%)

Within one year 11202542.48 112505.14 1.00

Of which: 1-6 months 11190549.35 111905.48 1.00

7-12 months 11993.13 599.66 5.00

1-2 years 1303136.00 130313.60 10.00

2-3 years 710291.70 355145.86 50.00

Over 3 years 1323227.20 1323227.20 100.00

Total 14539197.38 1921191.80 13.21

B2. As of 1 January 2023 bad debt provision at stage 3:

Expected credit loss rate for

Category Carrying amount Bad debt provision Carrying value

the entire duration (%)

Bad debt provision withdrawn

38434247.10100.0038434247.10

separately

Bad debt provision withdrawn

by group

Of which: Group 1

Group 2

Total 38434247.10 100.00 38434247.10

On 1 January 2023 other receivables with bad debt provision withdrawn separately:

Name Beginning balance

~ 190 ~Interim Report 2023

Withdrawal

Carrying amount Bad debt provision proportion Withdrawal reason

(%)

Hengxin Securities Co. Ltd. The enterprise has gone bankrupt

28733899.2428733899.24100.00

and liquidated

Jianqiao Securities Co. Ltd. The enterprise has gone bankrupt

9700347.869700347.86100.00

and liquidated

Total 38434247.10 38434247.10 100.00 --

* Changes of bad debt provision during the Reporting Period

Changes in the Reporting Period

Category Beginning balance Reversal or Ending balance

Withdrawal Write-off

recovery

Bad debt provision withdrawn

38434247.100.0098239.020.0038336008.08

separately

Bad debt provision withdrawn by

1921191.80-50109.970.000.001871081.83

group

Total 40355438.90 -50109.97 98239.02 0.00 40207089.91

* On 30 June 2023 top five ending balance by entity

Proportion of

the balance to

Bad debt

No. Nature Ending balance Aging the total other

provision

receivables

(%)

Current accounts within the

No. 1 110000000.00 Within 6 months 30.94 0.00

scope of consolidation

Current accounts within the

No. 2 80207352.12 Within 1 year 22.56 0.00

scope of consolidation

Current accounts within the

No. 3 65000000.00 Within 6 months 18.28 0.00

scope of consolidation

Current accounts within the

No. 4 55572561.36 Within 6 months 15.63 0.00

scope of consolidation

No. 5 Securities Investment 28635660.22 Over 3 years 8.05 28635660.22

Total -- 339415573.70 95.46 28635660.22

14.3 Long-term Equity Investments

Item Ending balance Beginning balance

~ 191 ~Interim Report 2023

Depre

ciatio

Depreciation

Carrying amount n Carrying value Carrying amount Carrying value

reserve

reserv

e

Investment in

1598079903.431598079903.431582079903.431582079903.43

subsidiaries

Investment in

associated 4712811.85 4712811.85 4669710.25 4669710.25

enterprises

Total 1602792715.28 1602792715.28 1586749613.68 1586749613.68

(1) Investments in subsidiaries

Decrease Impairment Provision

Increase

during provision for

during the

Investees Beginning balance the Ending balance during the impairment

Reporting

Reporting Reporting at 30 June

Period

Period Period 2023

Bozhou Gujing Sales Co.

68949286.8968949286.89

Ltd.Anhui Longrui Glass Co.

85267453.0685267453.06

Ltd.Shanghai Gujing Jinhao

Hotel Management Co. 49906854.63 49906854.63

Ltd.BozhouGujing Hotel Co.

648646.80648646.80

Ltd.

40000000.00

Anhui Ruisiweier

40000000.00

Technology Co. Ltd.

16000000.00

Anhui Yuanqing

Environmental Protection 16000000.00

Co. Ltd.

5000000.00

Anhui Gujing Yunshang

5000000.00

E-commerce Co. Ltd.Yellow Crane Tower 816000000.00 816000000.00

~ 192 ~Interim Report 2023

Distillery Co. Ltd.Anhui Jinyunnlai Cultural

15000000.0015000000.00

Media Co. Ltd.Anhui RunanXinke Testing

10000000.0010000000.00

Technology Co. Ltd.Anhui Gujinggong Liquor

Original Vintage Theme

0.0010000000.0010000000.00

Hotel Management Co.Ltd.Anhui Jiuan Mechanical

Electrical Equipment Co. 10000000.00 10000000.00

Ltd.Anhui Guqi Distillery Co.

6000000.006000000.00

Ltd.Anhui Mingguang

200200000.00200200000.00

Distillery Co. Ltd.Renhuai Maotai Town

Zhencang Winery Industry 224723400.00 224723400.00

Co. Ltd.Anhui Jiuhao China

Railway Construction 5720000.00 5720000.00

Engineering Co. Ltd.Anhui Gujing Health

34664262.0534664262.05

Technology Co. Ltd.Total 1582079903.43 16000000.00 1598079903.43

(2) Investment in associated enterprises

Increase/decrease

Adjustment of

Beginning Investment income

Investee Additional Reduced other Changes of

balance

recognized under

investment investment

comprehensive other equity

the equity method

income

I. Joint ventures

Anhui Xunfei Jiuzhi

4669710.2543101.60--

Technology Co. Ltd.Total 4669710.25 43101.60 - -

(Continued)

Investee Increase/decrease Ending balance Ending balance of

~ 193 ~Interim Report 2023

Withdrawal of depreciation

Cash bonus or profits

impairment Other reserve

announced to issue

provision

I. Joint ventures

Anhui Xunfei Jiuzhi Technology

4712811.85

Co. Ltd.Total 4712811.85

14.4 Operating Revenue and Cost of Sales

Reporting Period Same period of last year

Item

Operating revenue Cost of sales Operating revenue Cost of sales

Main operations 5622237508.48 1993854656.60 4421424122.12 1580664788.57

Other operations 66739498.50 39198474.43 51432771.67 32535174.94

Total 5688977006.98 2033053131.03 4472856893.79 1613199963.51

Information on performance obligations: None.

14.5 Investment Income

Item Reporting Period Same period of last year

Investment income from long-term equity investments under cost 9945959.41

0.00

method

Investment income from long-term equity investments under equity 43101.60

0.00

method

Investment income from disposal of long-term equity investments

Gains on disposal of financial assets at fair value through profit or

-1293063.110.00

loss

Investment income from bond investments during the holding period

Investment income from other debt obligation investments during the

holding period

Gains on disposal of financial assets at fair value through other

-27107452.17-17533328.20

comprehensive income

Investment income from trading financial assets during the holding

period

Other investment income 9669.81 103208.20

Total -18401784.46 -17430120.00

15. SUPPLEMENTARY MATERIALS

~ 194 ~Interim Report 2023

15.1 Items and Amounts of Non-recurring Profit or Loss

Unit: RMB

Item Amount Note

Gains/losses on the disposal of non-current

-1183887.92

assets

Tax rebates reductions or exemptions due to

approval beyond authority or the lack of

official approval documents

Government grants recognized in the current

period except for those acquired in the

ordinary course of business or granted at 27104577.88

certain quotas or amounts according to the

government’s unified standards

Capital occupation charges on non-financial

enterprises that are recorded into current

profit or loss

Gains due to that the investment costs for the

Company to obtain subsidiaries associates

and joint ventures are lower than the

enjoyable fair value of the identifiable net

assets of the investees when making the

investments

Gain/Loss on non-monetary asset swap

Gain/Loss on entrusting others with

investments or asset management

Asset impairment provisions due to acts of

God such as natural disasters

Gain/Loss from debt restructuring

Expenses on business reorganization such as

expenses on staff arrangements integration

etc.Gain/Loss on the part over the fair value due

to transactions with distinctly unfair prices

Current net profit or loss of subsidiaries

acquired in business combination under the

same control from period-beginning to

combination date

Gain/Loss incurred from contingency

unrelated to the Company’s normal operating

~ 195 ~Interim Report 2023

businesses.Gain/loss from change of fair value of

trading financial assets and liabilities and

investment gains from disposal of trading

financial assets and liabilities as well as 25000400.11

available-for-sale financial assets other than

valid hedging related to the Company’s

common businesses

Depreciation reserves returns of receivables

98239.02

with separate depreciation test

Gain/loss on entrustment loans

Gain/loss on change in fair value of

investment property of which the subsequent

measurement is carried out adopting fair

value method

Effect on current profit or loss when a

one-off adjustment is made to current profit

or loss according to requirements of taxation

accounting and other relevant laws and

regulations

Custody fee income when entrusted with

operation

Other non-operating income and expense

25705304.86

other than the above

Other gains and losses that meet definition of

exceptional gains and losses

Less: Income tax effects 18984822.91

Non-controlling interests effects 9386334.29

Total 48353476.75 --

Others that meets the definition of non-recurring gain/loss:

□Applicable □ Not applicable

No such cases in the Reporting Period.Explain the reasons if the Company classifies any extraordinary gain/loss item mentioned in the Explanatory

Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the

Public—Non-recurring Gains and Losses as a recurrent gain/loss item

□Applicable □ Not applicable

15.2 Return on Net Assets and Earnings Per Share

~ 196 ~Interim Report 2023

Weighted average ROE EPS (Yuan/share)

Profit as of Reporting Period

(%)

EPS-basic EPS-diluted

Net profit attributable to ordinary shareholders of the

13.965.265.26

Company

Net profit attributable to ordinary shareholders of the

Company after deduction of non-recurring profit and 13.72 5.17 5.17

loss

15.3 Differences between Accounting Data under Domestic and Overseas Accounting Standards

(1) Differences of Net Profit and Net Assets Disclosed in Financial Reports Prepared under International and

Chinese Accounting Standards

□ Applicable □ Not applicable

(2) Differences of Net profit and Net assets Disclosed in Financial Reports Prepared under Overseas and Chinese

Accounting Standards

□ Applicable □ Not applicable

(3) Explain Reasons for the Differences between Accounting Data under Domestic and Overseas Accounting

Standards; for any Adjustment Made to the Difference Existing in the Data Audited by the Foreign Auditing

Agent Such Foreign Auditing Agent’s Name Shall Be Clearly Stated

None

15.4 Other

None

Chairman of the Board: (Liang Jinhui)

Anhui Gujing Distillery Company Limited

30 August 2023

~197~