Anhui Gujing Distillery Company Limited
Annual Report 2022
April 2023Annual Report 2022
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 detailed description of possible risks in
the Company’s operations in “XI Prospects” under “Part III Management Discussionand Analysis”.The Board has approved a final dividend plan as follows: based on the Company’s
total share capital of 528600000 shares a cash dividend of RMB30.00 (tax inclusive)
per 10 shares is to be distributed to the shareholders with no bonus issue from either
profit or capital reserves.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.
2Annual Report 2022
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 11
Part IV Corporate Governance 40
Part V Environmental and Social Responsibility 62
Part VI Significant Events 67
Part VII Share Changes and Shareholder Information 74
Part VIII Preferred Shares 83
Part IX Corporate Bonds 84
Part X Financial Statements 85
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Documents Available for Reference
(I) Financial statements signed and sealed by the Company’s legal representative the
Company’s Chief Accountant and the head of the Company’s financial department
(equivalent to financial manager);
(II) The original copy of the Independent Auditor's Report stamped by the CPA firm
as well as signed and stamped by the engagement certified public accountants;
(III) 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
(IV) This Report disclosed in other securities markets.
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Definitions
Term Definition
Anhui Gujing Distillery Company Limited inclusive of its consolidated
The “Company” “ Gu Jing” or “we”
subsidiaries except where the context otherwise requires
Gujing Sales Bozhou Gujing Sales Co. Ltd.Anhui Gujing Distillery Company Limited exclusive of subsidiaries
The Company as the parent
except where the context otherwise requires
Gujing Group Anhui Gujing Group Co. Ltd.Yellow Crane Tower Yellow Crane Tower Distillery Co. Ltd.Mingguang Anhui Mingguang Distillery Co. Ltd.Longrui Glass Anhui Longrui Glass Co. Ltd.
5Annual Report 2022
Part II Corporate Information and Key Financial Information
I Corporate Information
Stock name Gujing Distillery Gujing Distillery-B Stock code 000596 200596
Changed stock name (if any)
Stock exchange for stock
Shenzhen Stock Exchange
listing
Company name in Chinese 安徽古井贡酒股份有限公司
Abbr. 古井
Company name in English (if ANHUI GUJING DISTILLERY COMPANY LIMITED
any)
Abbr. (if any) GU JING
Legal representative Liang Jinhui
Registered address Gujing Town Bozhou City Anhui Province P.R.China
Zip code 236820
Change of registered address N/A
Office address Gujing Industrial Park Gujing Town Bozhou City Anhui Province P.R.China
Zip code 236820
Company website http://www.gujing.com
Email address gjzqb@gujing.com.cn
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 Media for Information Disclosure and Place where this Report Is Lodged
Website of the stock exchange where this Report is The Shenzhen Stock Exchange（http://www.szse.cn）
6Annual Report 2022
disclosed
China Securities Journal Shanghai Securities News Ta Kung Pao (HK) and
Media and website where this Report is disclosed
http://www.cninfo.com.cn
Place where this Report is lodged The Board Secretary’s Office
IV Change to Company Registered Information
Unified social credit code 913400001519400083
Change to principal activity of the Company
No change
since going public (if any)
Every change of controlling shareholder since
No change
incorporation (if any)
V Other Information
The independent audit firm hired by the Company:
Name RSM China
Suite 901-22 to 901-26 Wai Jing Mao Building (Tower 1) No. 22 Fuchengmen Wai Street
Office address
Xicheng District Beijing China
Accountants writing signatures Zhang Liping Han Songliang and Yang Fan
The independent sponsor hired by the Company to exercise constant supervision over the Company in the Reporting Period:
□ Applicable □ Not applicable
Sponsor Office address Representatives Supervision period
27-28/F China World Office 2
China International Capital
No. 1 Jianguomenwai Avenue Fang Lei and Chen Jingjing 2021.7.22-2022.12.31
Corporation Limited
Chaoyang District Beijing
The independent financial advisor hired by the Company to exercise constant supervision over the Company in the Reporting Period:
□ Applicable □ Not applicable
Financial advisor Office address Representatives Supervision period
27-28/F China World Office 2
China International Capital
No. 1 Jianguomenwai Avenue Fang Lei and Chen Jingjing 2021.7.22-2022.12.31
Corporation Limited
Chaoyang District Beijing
VI Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.□ Yes □ No
2022 2021 2022-over-2021 2020
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change
Operating revenue (RMB) 16713234153.52 13269826266.04 25.95% 10292064534.41
Net profit attributable to the listed
3143144732.082297894413.2536.78%1854576249.29
company’s shareholders (RMB)
Net profit attributable to the listed
company’s shareholders before 3066543993.35 2186239468.68 40.27% 1773011307.05
exceptional gains and losses (RMB)
Net cash generated from/used in
3107914579.485254308127.79-40.85%3624543525.53
operating activities (RMB)
Basic earnings per share
5.954.4533.71%3.68
(RMB/share)
Diluted earnings per share
5.954.4533.71%3.68
(RMB/share)
Weighted average return on equity
17.93%21.25%-3.32%19.53%
(%)
Change of 31
31 December 2022 31 December 2021 December 2022 over 31 December 2020
31 December 2021
Total assets (RMB) 29789822298.65 25418086447.80 17.20% 15186625708.79
Equity attributable to the listed
18520757973.5216537389443.6411.99%10043288013.73
company’s shareholders (RMB)
Indicate by tick mark whether the lower of the net profit attributable to the listed company’s shareholders before and after exceptional
gains and losses was negative for the last three accounting years and the latest independent auditor’s report indicated that there was
uncertainty about the Company’s ability to continue as a going concern.□ Yes □ No
Indicate by tick mark whether the lower of the net profit attributable to the listed company’s shareholders before and after exceptional
gains and losses was negative.□ Yes □ No
VII Accounting Data Differences under China’s Accounting Standards for Business
Enterprises (CAS) and International Financial Reporting Standards (IFRS) and Foreign
Accounting Standards
1. Net Profit and Equity under CAS and IFRS
□ Applicable □ Not applicable
No difference for the Reporting Period.
8Annual Report 2022
2. Net Profit and Equity under CAS and Foreign Accounting Standards
□ Applicable □ Not applicable
No difference for the Reporting Period.
3. Reasons for Accounting Data Differences Above
□ Applicable □ Not applicable
VIII Key Financial Information by Quarter
Unit: RMB
Q1 Q2 Q3 Q4
Operating revenue 5274316915.03 3727689008.39 3762643542.44 3948584687.66
Net profit attributable to the listed
1098725631.83820095871.92703868180.94520455047.39
company’s shareholders
Net profit attributable to the listed
company’s shareholders before 1089643863.39 799383187.67 689133927.04 488383015.25
exceptional gains and losses
Net cash generated from/used in
2776260991.071414985808.72871486637.93-1954818858.24
operating activities
Indicate by tick mark whether any of the quarterly financial data in the table above or their summations differs materially from what
have been disclosed in the Company’s quarterly or interim reports.□ Yes □ No
IX Exceptional Gains and Losses
□ Applicable □ Not applicable
Unit: RMB
Item 2022 2021 2020 Note
Gain or loss on disposal of non-current
assets (inclusive of impairment allowance -4666425.09 -5976856.98 -3692640.09
write-offs)
Government subsidies charged to current
profit or loss (exclusive of government
subsidies consistently given in the
46721259.5255274502.4248617479.37
Company’s ordinary course of business at
fixed quotas or amounts as per governmental
policies or standards)
Gain or loss on fair-value changes in trading
43874800.6434792433.4521490043.05
financial assets and liabilities & investment
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income from disposal of trading financial
assets and liabilities and available-for-sale
financial assets (exclusive of effective
portion of hedges that arise in the
Company’s ordinary course of business)
Reversed portion of impairment allowance
for receivables which are tested individually 423337.78 1949809.53 43554.94
for impairment
Non-operating income and expense other
23314293.0877025619.7644100616.61
than the above
Less: Income tax effects 27082435.88 40243159.73 27033395.22
Non-controlling interests effects (net
5984091.3211167403.881960716.42
of tax)
Total 76600738.73 111654944.57 81564942.24 --
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.
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Part III Management Discussion and Analysis
I Industry Overview for 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.In 2022 the total output of alcoholic beverage made and brewed by domestic enterprises above the designated size in the alcoholic
beverage industry reached 54275000 kilolitres increasing by 0.8% year on year. Specifically the output of baijiu by domestic
enterprises above the designated size totaled 6712000 kilolitres decreasing by 5.6% year on year. With the acceleration of
consumption upgrading a trend of consumption upgrading for Chinese residents that advocates “drinking less but better liquor”
gradually appears. During the period of the 14th Five-year Plan the consumption growth of sub-high-end baijiu will bring more
fierce competition in the sector of high-end baijiu.
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
11Annual Report 2022
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.
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 2022 “Gujinggong” was ranked fourth in China's
baijiu industry with a brand value of RMB227.027 billion in the 14th "Hua Zun Cup" China liquor brand value contest.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. The primary products of Mingguang Distillery include Mingguang Jianiang Mingguang Daqu
Mingguang Youye Mingguang Tequ and 53% vol Mingluye. In December 2021 the Old Mingguang Brewing Technique was
selected for the sixth batch of provincial intangible cultural heritage list.II Principal Activity of the Company in the Reporting Period
The Company is subject to the Guideline No. 14 of the Shenzhen Stock Exchange on Information Disclosure by Industry—for Listed
Companies Engaging in Food and Liquor & Wine Production.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 in
change in change in
By Operating revenue Cost of sales Gross profit margin gross
operating cost of
profit
revenue sales
margin
Channel
Online 610385143.59 140118759.04 77.04% 14.88% 14.90% -0.01%
Offline 16102849009.93 3676203285.97 77.17% 26.41% 15.53% 2.15%
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Total 16713234153.52 3816322045.01 77.17% 25.95% 15.50% 2.07%
YoY
YoY YoY
change in
change in change in
By Operating revenue Cost of sales Gross profit margin gross
operating cost of
profit
revenue sales
margin
Product series
Original Vintage 12106975948.62 1874797085.68 84.51% 30.07% 19.92% 1.31%
Gujinggong Liquor 1873975744.19 754796177.30 59.72% 16.45% 13.33% 1.11%
Yellow Crane Tower 1262964082.84 315189592.71 75.04% 11.38% 11.63% -0.06%
Total 15243915775.65 2944782855.69 80.68% 26.50% 17.24% 1.52%
2. Number of Distributors by Geographical Segment
Segment Increase Decrease Ending number
North China 286 159 1132
South China 154 76 530
Central China 690 507 2721
International 4 0 16
Total 1134 742 4399
Proportion of store sales terminal exceeds 10%
□ Applicable □ Not applicable
Online direct sales
□ 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
Model 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.Contents of purchase
Purchase contents Purchase model Amount (RMB’0000)
Strategic purchasing 79853.37
1 Raw materials
Tendering purchasing 145714.80
2 Packing materials Tendering purchasing 287066.19
Total 512634.36
The proportion of raw materials purchased from cooperations or farmers to total purchase amount exceeds 30%
□ Applicable □ Not applicable
13Annual Report 2022
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
20222021
Item As % of total cost of As % of total cost of Change
Cost of sales (RMB) Cost of sales (RMB)
sales sales
Direct
2740292507.2771.80%2321320105.4770.26%18.05%
materials
Direct labor
332141904.078.70%285205229.638.63%16.46%
cost
Manufacturing
224128683.405.87%210507603.206.37%6.47%
expenses
Fuels 96765210.22 2.54% 91709296.08 2.78% 5.51%
Total 3393328304.96 88.91% 2908742234.38 88.04% 16.66%
Output and inventory
1. Output sales volume and inventory of main products for the Reporting Period and respective YoY changes thereof
Unit: ton
YoY changes
YoY changes YoY changes
Main product Output Sales volume inventory of sales
of output of inventory
volume
Original Vintage Series 63415.45 52622.84 24602.26 25.60% 21.77% 78.15%
Gujinggong Liquor Series 36522.02 30845.44 8551.86 25.65% 9.11% 197.43%
Yellow Crane Tower Liquor
9833.219654.56960.6917.76%5.13%22.84%
Series
Other series 23615.68 21571.37 4196.00 7.14% 5.81% 95.01%
2. Ending inventory of finished liquor and semi-product
Category Ending quantity (ton)
Finished liquor 38310.81
Semi-product (including base liquor) 191550.88
3. Capacity
Unit: ton
14Annual Report 2022
Main product Designed capacity Actual capacity Capacity in progress
Finished liquor 115000 133386 130000
III Core Competitiveness Analysis
No significant changes occurred to the Company’s core competitiveness in the Reporting Period.IV Analysis of Core Businesses
1. Overview
2022 was an extraordinary year as well as a particularly difficult year. In the face of a complex external environment and
increasingly fierce competition in the industry the Company continued to follow the guidance of Mr. Xi Jinping’s Thought on
Socialism with Chinese Characteristics for a New Era thoroughly implemented the guiding principles of the various sessions of the
19th CPC Central Committee and the 20th CPC National Congress as well as the guiding principles of the provincial and municipal
Party congresses implemented the new concept for development centered on the annual objectives of the Company and adhered to
long-term perspective mindset the concept of excellence and the awareness of high-quality products. The Company strengthened its
foundations improved development quality and operational efficiency and sought faster growth in stability. As a result it has
successfully accomplished various objectives and tasks.For 2022 the Company recorded operating revenue of RMB16.713 billion up 25.95% compared to the prior year; a net profit
attributable to the Company as the parent of RMB3.143 billion increasing 36.78% from the year earlier; and earnings per share of
RMB5.95 33.71% higher than last year. In the 14th "Hua Zun Cup" China liquor brand value contest the brand value of
"Gujinggong" reached a record high of RMB227.027 billion.The overall operating performance of the Company in the Reporting Period:
(I) The Company strengthened market development and promoted brand influence
With adherence to the nationwide sub-high-end and “Gu 20+” development strategy the Company adopted the implementation
route of “position occupation market consolidation and customer acquisition” to accelerate its advancement toward the whole
country and expansion in markets outside the base province as well as to continuously improve its product structure. Moreover withadherence to the communication strategy of “striving for influential brands spiking hard from a high position and concentratingresources” the Company promoted brand coordination and communication innovation so that its brand influence increased
gradually.(II) The Company sought higher “quality” of baijiu products
The Company improved its expression system of the quality of baijiu and issued “Gujinggong Liquor- Original Vintage” Quality
Control Outline. As the Company officially put the first “transparent factory” in the industry into operation its development
regarding the “enterprise-university-research-management-user integration” was deepened. By continuously optimizing
liquor-making processes the Company comprehensively implemented the standardized production of liquor.(III) The Company consolidated the foundations for quality with technology
By comprehensively implementing the farming of unprocessed grains in the Company’s unprocessed grain base the Company
provided a firm guarantee for “quality liquor-making”. Furthermore by completing the implementation of the new national standard
for baijiu with high quality and efficiency stricter management was comprehensively conducted throughout the Company and the
Company undertook its entity responsibilities for food security more thoroughly. Moreover the Company continued to explore new
ideas of how to process the by-products of liquor-making. As a result the Company owned nine invention patents and 62 authorized
15Annual Report 2022
patents for utility models. Additionally multiple technological innovation results of the Company reached the international or
domestic leading level and were converted into applications by the Company.(IV) The Company continued to promote digital development based on the business-oriented approach
The Company comprehensively initiated digital transformation as its informatized framework was completed the state of being an
isolated information island was altered and its business processes was optimized. Meanwhile the Company centred on smart
manufacturing and green liquor making set up an Internet platform for the baijiu industry built a lighthouse factory and promoted
the digital transformation of Gujing to a new level. The Company also made efforts to develop scenario-based applications so as to
empower business and achieve automated lean management. Moreover the Company made rapid progress in the dual-platform
development of the Industrial Internet of Things namely the procurement and logistics platform so as to provide an open and shared
centralized procurement platform for downstream enterprises in the industry chain and contribute to the local economic development.As a result the Company’s digital practice was successfully included in the Demonstration List of Pilot Practices of Integrated
Development in the Next-generational Information Technology and Manufacturing Industry and won the 2022 Dingge Award.(V) The Company accelerated transformation and upgrading while continuously optimizing business management
The Company relied on law-based measures to promote modern business management. By continuously enhancing internal risk
control the Company strengthened compliance management. Meanwhile the Company implemented the three-year action plan for
the reform of state-owned enterprises to promote the innovation of mechanisms and systems. Moreover by implementing the
mechanism of open post competition for front-line and middle-level managers the Company extensively activated its talent vitality.Additionally as its internal control system was further improved the objective of “four zeros” in production safety was achieved.(VI) The Company conducted more in-depth and practical cultural development by unwaveringly following the guidance of
Party building
The Company thoroughly conducted learning and publicity of the spirit of the 20th National Congress of the CPC comprehensively
implemented the Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and carried out regular learning of the
Party history. The Company also continued to deepen conduct improvement. Meanwhile the Company promoted ideological
management in accordance with the relevant requirements formulated a grid-based pattern of ideological publicity work and
promoted the in-depth integration of Party building and production & operation.(VII) In the Reporting Period the Company was still under pressure and had deficiencies as follows.
(1) The brand-based driving effect was not as strong as those of first-tier reputed liquor brands.
(2) The internal management system of the Company was not excellent the mechanism was not vigorous and its internal power was
yet to be stimulated.
(3) Daring innovation was required for aspects such as organizational incentives and talent incentives.
2. Revenue and Cost Analysis
(1) Breakdown of Operating Revenue
Unit: RMB
20222021
As % of total As % of total Change
Operating revenue Operating revenue
operating revenue operating revenue
Total 16713234153.52 100% 13269826266.04 100% 25.95%
By operating division
16Annual Report 2022
Manufacturing 16713234153.52 100.00% 13269826266.04 100.00% 25.95%
By product category
Baijiu 16167709250.64 96.74% 12760915418.70 96.16% 26.70%
Hotel services 57506783.34 0.34% 75349826.75 0.57% -23.68%
Other 488018119.54 2.92% 433561020.59 3.27% 12.56%
By operating segment
North China 1325791564.93 7.93% 1070574558.72 8.07% 23.84%
Central China 14354624988.86 85.89% 11311204419.40 85.23% 26.91%
South China 1011003651.35 6.05% 877937089.22 6.62% 15.16%
Overseas 21813948.38 0.13% 10110198.70 0.08% 115.76%
By sales model
Online 610385143.59 3.65% 531343420.84 4.00% 14.88%
Offline 16102849009.93 96.35% 12738482845.20 96.00% 26.41%
(2) Operating Division Product Category Operating Segment or Sales Model Contributing over 10% of
Operating Revenue or Operating Profit
□ Applicable □ Not applicable
Unit: RMB
YoY change in
Gross profit YoY change in YoY change in
Operating revenue Cost of sales gross profit
margin operating revenue cost of sales
margin
By operating division
Manufacturing 16713234153.52 3816322045.01 77.17% 25.95% 15.50% 2.07%
By product category
Baijiu 16167709250.64 3393328304.96 79.01% 26.70% 16.66% 1.81%
Hotel services 57506783.34 33804865.88 41.22% -23.68% -18.22% -3.93%
Other 488018119.54 389188874.17 20.25% 12.56% 9.94% 1.90%
By operating segment
North China 1325791564.93 300023290.91 77.37% 23.84% 11.25% 2.56%
Central China 14354624988.86 3305285716.04 76.97% 26.91% 16.52% 2.05%
South China 1011003651.35 203868748.58 79.84% 15.16% 4.59% 2.04%
Overseas 21813948.38 7144289.48 67.25% 115.76% 159.65% -5.54%
By sales model
Online 610385143.59 140118759.04 77.04% 14.88% 14.90% -0.01%
Offline 16102849009.93 3676203285.97 77.17% 26.41% 15.53% 2.15%
17Annual Report 2022
Core business data of the prior year restated according to the changed statistical caliber for the Reporting Period:
□ Applicable □ Not applicable
(3) Whether Revenue from Physical Sales is Higher than Service Revenue
□ Yes □ No
Operating division Item Unit 2022 2021 Change
Sales volume Ton 114694.21 101054.70 13.50%
Baijiu brewage Output Ton 133386.36 109947.76 21.32%
Inventory Ton 38310.81 19618.66 95.28%
Any over 30% YoY movements in the data above and why:
□ Applicable □ Not applicable
Inventory increased 95.28% compared to 2021 primarily driven by the increased inventories prepared for the Spring Festival.
(4) Execution Progress of Major Signed Sales and Purchase Contracts in the Reporting Period
□ Applicable □ Not applicable
(5) Breakdown of Cost of Sales
By operating division
Unit: RMB
20222021
Operating
Item As % of total cost As % of total cost Change
division Cost of sales Cost of sales
of sales of sales
Food
Direct materials 2740292507.27 71.80% 2321320105.47 70.26% 18.05%
manufacturing
Food
Direct labor cost 332141904.07 8.70% 285205229.63 8.63% 16.46%
manufacturing
Food Manufacturing
224128683.405.87%210507603.206.37%6.47%
manufacturing expenses
Food
Fuels 96765210.22 2.54% 91709296.08 2.78% 5.51%
manufacturing
(6) Changes in the Scope of Consolidated Financial Statements for the Reporting Period
□ Yes □ No
Compared with the prior year the following subsidiaries were added to the consolidated financial statements of the Reporting Period:
Anhui Gujinggong Liquor Original Vintage Theme Hotel Management Co. Ltd. Anhui Anjie Technology Co. Ltd. Huanggang
Junya Trading Co. Ltd. Anhui Gujing Health Technology Co. Ltd. Anhui Maiqi Biotechnology Co. Ltd. Anhui Yangshengtianxia
Brand Operation Co. Ltd. and Hainan Yangshengtianxia Biotechnology Development Co. Ltd.
18Annual Report 2022
(7) Major Changes to the Business Scope or Product or Service Range in the Reporting Period
□ Applicable □ Not applicable
(8) Major Customers and Suppliers
Major customers:
Total sales to top five customers (RMB) 2551855022.17
Total sales to top five customers as % of total sales of the
15.27%
Reporting Period (%)
Total sales to related parties among top five customers as % of
0.00%
total sales of the Reporting Period (%)
Information about top five customers:
Sales revenue contributed for
No. Customer As % of total sales revenue
the Reporting Period (RMB)
1 Distributor A 784771005.75 4.70%
2 Distributor B 777903397.06 4.65%
3 Distributor C 572031493.11 3.42%
4 Distributor D 220161445.23 1.32%
5 Distributor E 196987681.02 1.18%
Total -- 2551855022.17 15.27%
Other information about major customers:
□ Applicable □ Not applicable
Major suppliers:
Total purchases from top five suppliers (RMB) 1206738614.42
Total purchases from top five suppliers as % of total purchases
23.54%
of the Reporting Period (%)
Total purchases from related parties among top five suppliers
0.00%
as % of total purchases of the Reporting Period (%)
Information about top five suppliers:
Purchase in the Reporting
No. Supplier As % of total purchases
Period (RMB)
1 Supplier A 319640970.89 6.24%
2 Supplier B 286628802.15 5.59%
3 Supplier C 262643832.88 5.12%
4 Supplier D 181345279.52 3.54%
5 Supplier E 156479728.98 3.05%
19Annual Report 2022
Total -- 1206738614.42 23.54%
Other information about major suppliers:
□ Applicable □ Not applicable
3. Expense
Unit: RMB
2022 2021 Change Reason for any significant change
Selling expense 4668185055.13 4008075483.08 16.47%
Administrative expense 1166780389.23 1022181419.74 14.15%
Finance costs -216299053.07 -204055657.06 -6.00%
R&D expense 56667203.01 51449475.36 10.14%
The Company is subject to the Guideline No. 14 of the Shenzhen Stock Exchange on Information Disclosure by Industry—for Listed
Companies Engaging in Food and Liquor & Wine Production.Breakdown of selling expense:
Unit: RMB
Item 2022 2021 Change Reason
Employment
938740215.88863583183.408.70%
benefits
Travel fees 169521676.66 161091812.25 5.23%
Advertisement
995196089.71900546437.3310.51%
fees
Comprehensive
1814692295.391268396513.5643.07%
promotion costs More sales promotion and marketing activities
Service fees 638147336.90 705368563.00 -9.53%
Others 111887440.59 109088973.54 2.57%
Total 4668185055.13 4008075483.08 16.47%
Details about advertisement
No. Main way Amount (RMB’0000)
1 TV 51207.05
2 Offline 32446.36
3 Online 15866.20
Total 99519.61
4. R&D Investments
□ Applicable □ Not applicable
Names of main Project objectives Project progress Objectives to be achieved Expected impact on the future
20Annual Report 2022
R&D projects development of the Company
Aiming at different types
The experimental research on
of raw materials the
liquor making with different
process and experiments The process of liquor-making
Research of process types of original grain will
of liquor making are with different types of
and experiments on Promoted and play an important role in
conducted to provide the original grain is explored to
original grain for applied. optimized selection of
Company with data expand the scope of using
liquor distillation original grain and
support for the selection original grain.improvement of quality of
of original grain for
original liquor.liquor-making.By exploring the process of
making compound fragrant
The process of producing The Company aims to
baijiu the Company is
compound fragrant baijiu produce high-quality
Research on the expected to produce
is explored to prepare for The expanded group flavouring liquor with unique
process of making high-quality flavouring liquor
the development of new test has been flavour to prepare for the
compound fragrant with unique flavour further
products and the design conducted. development of its new
baijiu enrich the product system of
of liquor body of the products and the design of
Gujinggong Liquor and
Company. liquor body.strengthen its market
competitiveness.The impact of
multi-grain fermentation
Technology of This project is expected to
starters on the quality of The Company aims to explore
producing the enrich the product system of
raw liquor is explored to the impact of multi-grain
multi-grain Gujinggong liquor provide
provide technological The project has been fermentation starters on the
fermentation starter different styles of baijiu
support for Gujing’s concluded. quality of crude liquor to
and research on the products and improve the
production of provide Gujing with different
liquor-making test market share of Gujing’s
fermentation starters and styles of base liquor.based on the starter products.improvement of crude
liquor.The experiments
systematically optimize The process and
Theoretically and practically
the production process of experiments have
the various parameters of the The quality of Gujinggong
Research of process making strongly fragrant been carried out for
strongly fragrant baijiu are liquor will be steadily
and experiments for liquor improve the many times and part
revealed to be scientific and improved to maintain the
making strongly sensory quality of of the experimental
reasonable which provides continuously improving
fragrant baijiu Gujinggong liquor achievements have
more scientific support for quality of the brand.making the product No. 1 been promoted and
process execution.in China in terms of applied.strongly fragrant baijiu.Experimental study The taste of liquor body is
on the method of The taste and quality of Part of the enriched to provide the
The quality of the crude
collecting scums crude liquor is improved achievements of the Company’s improvement of
liquor on the high level of a
floated in liquid in a to enhance the overall project have been the quality of crude liquor
liquor pit is improved
micro-recirculation quality of liquor samples. p romoted. with an exploration on
way process optimization.The Company aims to reduce
This project is aimed at
the duration of gelatinization
reducing the duration of It is expected to reduce the
Research on the and the steam consumption in
gelatinization and the The project has been consumption of energy and
mechanism of the production without affecting
steam consumption in concluded and its other resources the time and
gelatinization of the quality of the produced
production without application has been efficiency of production as
unprocessed grains crude liquor so as to shorten
affecting the quality of popularized. well as the operating cost of
in liquor-making the production time and
the produced crude the Company.improve production
liquor.efficiency.Research on the This project is aimed at The nature of the The Company aims to The analysis of the unique
21Annual Report 2022
scientific theoretical formulating a scientific contribution of establish an assessment features of the Original
system of the theoretical system of the anaerobic bacteria in system for the biological Vintage from a scientific
making of making of Original the fermentation pit functions of Original Vintage perspective is expected to be“Gujinggong Vintage and analysing mud to the taste of and eventually formulate a conducted to facilitate theLiquor- Original the unique features of the baijiu has been scientific theoretical system Company’s productVintage” Original Vintage from a systematically of the making of Original upgrading.scientific perspective. analysed and a Vintage.technological
assessment system
for the biological
functions of Original
Vintage of different
ages in the
intervention in
liquor-making has
been formulated.Research on the This project is aimed at
integrated separating organic This project is expected to
The production line
utilization of the substances from the transform by-products into
for the pilot test has
by-products of the by-products and resources so as to not only
been constructed and The Company aims to
solid fermentation converting them into create benefits for the
the contract of complete the development of
of strong flavour high-value products so Company but also enable
equipment purchases one or two resource products.baijiu as to create benefits for energy conservation and
has been signed and
the Company and reduce emission reduction by
approved.the cost of waste building green factories.treatment.The parameters of the Standardized documents for
The production process production process of operation and process will be
Research of the
of high-temperature Qu high-temperature Qu liquor provided for the Company to
production process Concluded and
liquor is standardized to are determined the quality of improve the production
of high-temperature applied.form standard operation the liquor is improved and quality of high-temperature
Qu liquor
documents. the richness of original liquor Qu liquor and to stabilize the
is increased. quality of the liquor.This project is aimed at
exploring the impact of
Technology of daqu for Fen-flavour
producing daqu liquor on the quality of The Company aims to explore This project is expected to
The data analysis and
(dried bricks of crude liquor based on the the impact of daqu for improve the Company’s
summary for the
fermentation quality of the daqu and Fen-flavour liquor on the product quality and provide
three arrays of the
starters) for the quality of the crude quality of crude liquor based the Company with different
test on daqu for
Fen-flavour liquor liquor brewed with the on the quality of the daqu and styles of baijiu products that
Fen-flavour liquor
and research on the daqu so as to provide the quality of the crude liquor can satisfy different consumer
has been completed.liquor-making test technological support for brewed with the daqu. groups.based on the starter the improvement of the
quality of Fen-flavour
liquor.Details about R&D personnel:
2022 2021 Change
Number of R&D personnel 1057 978 8.08%
R&D personnel as % of total
9.35%9.10%0.25%
employees
Educational background of
——————
R&D personnel
Bachelor’s degree 191 211 -9.48%
Master’s degree 47 41 14.63%
22Annual Report 2022
Other 819 726 12.81%
Age structure of R&D
——————
personnel
Below 30 155 164 -5.49%
30~4038432119.63%
Over 40 518 493 5.07%
Details about R&D investments:
2022 2021 Change
R&D investments (RMB) 288639442.89 300602964.92 -3.98%
R&D investments as % of
1.73%2.27%-0.54%
operating revenue
Capitalized R&D investments
0.000.000.00%
(RMB)
Capitalized R&D investments
0.00%0.00%0.00%
as % of total R&D investments
Reasons for any significant change to the composition of R&D personnel and the impact:
□ Applicable □ Not applicable
Reasons for any significant YoY change in the percentage of R&D investments in operating revenue:
□ Applicable □ Not applicable
Reasons for any sharp variation in the percentage of capitalized R&D investments and rationale:
□ Applicable □ Not applicable
5. Cash Flows
Unit: RMB
Item 2022 2021 Change
Subtotal of cash generated from
18629603955.6616698641516.8311.56%
operating activities
Subtotal of cash used in operating
15521689376.1811444333389.0435.63%
activities
Net cash generated from/used in
3107914579.485254308127.79-40.85%
operating activities
Subtotal of cash generated from
8483831118.31721528559.151075.81%
investing activities
Subtotal of cash used in investing
3215119847.709582979679.33-66.45%
activities
Net cash generated from/used in
5268711270.61-8861451120.18159.46%
investing activities
Subtotal of cash generated from
75900000.005165337169.81-98.53%
financing activities
Subtotal of cash used in financing
1404702593.471137547692.5623.49%
activities
23Annual Report 2022
Net cash generated from/used in
-1328802593.474027789477.25-132.99%
financing activities
Net increase in cash and cash
7047823256.62420646484.861575.47%
equivalents
Explanation of why any of the data above varies significantly:
□ Applicable □ Not applicable
(1) Net cash generated from operating activities stood at RMB3107914579.48 in the Reporting Period down 40.85% year-on-year
primarily driven by the increased taxes and levies paid.
(2) Net increase in cash and cash equivalents stood at RMB7047823256.62 in the Reporting Period up 1575.47% year-on-year
primarily driven by the disinvestment in wealth management products upon maturity and the decreased purchase of wealth
management products in the current period.Reasons for any big difference between the net operating cash flow and the net profit for this Reporting Period
□ Applicable □ Not applicable
V Analysis of Non-Core Businesses
□ Applicable □ Not applicable
VI Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Unit: RMB
31 December 2022 1 January 2022
Change in Reason for any significant
As % of total As % of total
Amount Amount percentage change
assets assets
Monetary assets 1 3772561141.30 46.23% 11924922771.76 46.92% -0.69%
Accounts
62688668.940.21%89005804.170.35%-0.14%
receivable
Inventories 6058106090.88 20.34% 4663456672.30 18.35% 1.99%
Investment
13396881.960.04%4075801.060.02%0.02%
property
Long-term
equity 10154235.98 0.03% 5312600.78 0.02% 0.01%
investments
Fixed assets 2741844586.30 9.20% 1984063975.87 7.81% 1.39%
Construction in
2454703251.448.24%1064134904.214.19%4.05%
progress
Right-of-use
32562171.100.11%43927228.970.17%-0.06%
assets
24Annual Report 2022
Short-term
83232176.310.28%30035138.890.12%0.16%
borrowings
Contract
826636478.352.77%1825447705.857.18%-4.41%
liabilities
Long-term
44944737.910.15%172356255.830.68%-0.53%
borrowings
Lease liabilities 18631395.93 0.06% 28107223.18 0.11% -0.05%
Indicate whether overseas account for a larger proportion in the total assets.□ Applicable □ Not applicable
2. Assets and Liabilities at Fair Value
□ Applicable □ Not applicable
Unit: RMB
Impairmen
Gain/loss on Cumulative
t
fair-value fair-value Purchased in the Sold in the Other
Beginning allowance
Item changes in changes Reporting Reporting change Ending amount
amount for the
the Reporting charged to Period Period s
Reporting
Period equity
Period
Financial
assets
1.
Held-for-tradin
g financial
assets 2661103876.6 29149125.3 1550000000.0 2457565232.3 1782687769.6
0.00
(excluding 8 0 0 2 6
derivative
financial
assets)
2. Investments
1905371.4
in other equity 54542418.50 0.00 0.00 0.00 56447789.94
4
instruments
Subtotal of 2715646295.1 29149125.3 1905371.4 1550000000.0 2457565232.3 1839135559.6
financial assets 8 0 4 0 2 0
25Annual Report 2022
Total of the 2715646295.1 29149125.3 1905371.4 1550000000.0 2457565232.3 1839135559.6
above 8 0 4 0 2 0
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
3. Restricted Asset Rights as at the Period-End
Item Ending carrying value Reason for restriction
Time deposits certificate of deposit and cash deposits that are pledged for
Monetary assets 667187706.08
issuing bank acceptance bills
Fixed assets 114679263.52 Mortgaged for guarantee loans
Intangible assets 179235930.32 Mortgaged and pledged for guarantee loans
Total 961102899.92 --
26Annual Report 2022
VII Investments Made
1. Total Investment Amount
□ Applicable □ Not applicable
2. Major 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
Reason for
Accumulative
Accumulative not reaching
Fixed assets Input amount in Estimated realized
Way of Industry actual input Capital the schedule Disclosure Disclosure
Item investment the Reporting Progress return on revenues as
investment involved amount as of the resources and date (if any) index (if any)
or not Period investment of the
period-end anticipated
period-end
income
For details
The smart please refer to
technology the
Self-owned
transformation Liquor 3 March Announcement
Self-built Yes 1794442904.44 2796024924.88 funds and 33.73% N/A N/A N/A
project for production 2020 on Investment
raised funds
liquor in the Smart
production Technology
Transformation
27Annual Report 2022
Project for
Liquor
Production
disclosed by
the Company
on the website
of Cninfo
dated 3 March
2020.
Total -- -- -- 1794442904.44 2796024924.88 -- -- N/A N/A -- -- --
28Annual Report 2022
4. Financial Investments
(1) Securities Investments
□ Applicable □ Not applicable
Unit: RMB
Gain/loss on Cumulative
Variety Purchased Gain/loss in
Code of Name of Initial Accounting Beginning fair value fair value Sold in the in the the Ending Funding
of measurement changes in changes Reporting Accounting title
securities securities investment cost Reporting Reporting model the Reporting charged to Period source
securities carrying value Period Period carrying value
Period equity
DAPU Asset Fair value Held-for-trading Self-owned
Fund 200000000.00 203538644.36 - 1203773.87 20 2334870.49
Management method financial assets funds
Other ending holding securities
----
investments
Total 200000000.00 -- 203538644.36 - 1203773.87 20 2334870.49 -- --
Disclosure date of the
announcement about the board’s The Company held the 10th Meeting of the 9th Board of Directors on 29 April 2022 reviewed and approved the proposal on cash entrusted for wealth
consent for the securities management with idle self-owned funds by the Company.investment
Disclosure date of the
announcement about the general
N/A
meeting’s consent for the
securities investment (if any)
(2) Investments in Derivative Financial Instruments
□ Applicable □ Not applicable
29Annual Report 2022
1) Investments in derivative financial instruments for the purpose of hedging during the Reporting Peirod
□ Applicable □ Not applicable
No such cases in the Reporting Period.
2) Investments in derivative financial instruments for the purpose of speculation during the Reporting Period
□ Applicable □ Not applicable
No such cases in the Reporting Period.Unit: RMB’0000
Proportion
of closing
Actual
Purchased in investment
Relationship Initial Beginning Sold in the Impairment Ending gain/loss in
Connected 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 31 May 4 January
Naught No repurchase of 7620.50 7620.50 7000.00 8620.50 6000.00 0.31% 7.88
of national 2022 2023
national debt
debt
Total 7620.50 -- -- 7620.50 7000.00 8620.50 6000.00 0.31% 7.88
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)
30Annual Report 2022
Disclosure date of shareholders’ meeting
announcement approving derivative investment (if N/A
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.)
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
Naught
investments 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 supervision
Opinion of independent directors on derivative mechanism for the financial derivative instrument business and formulated reasonable accounting policy as well as specific principles of
investments and risk control 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
31Annual Report 2022
(1) Overall Usage of Funds Raised
□ Applicable □ Not applicable
Unit: RMB’0000
Proportion of Amount of
Total funds used Accumulative The usage and
Total funds Accumulative Total funds with accumulative Total unused funds raised idle
Year Way of raising in the Current funds with destination of
raised fund used usage changed funds with funds for over two
Period usage changed unused funds
usage changed years
Deposited in
Private fund raising
2021 placement of 495434.21 108865.76 151942.50 0.00 0.00 0.00% 343491.71 a ccount and 0.00
stocks cash
management
Total -- 495434.21 108865.76 151942.50 0.00 0.00 0.00% 343491.71 -- 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. In 2022 the Company cumulatively used raised funds of RMB1088.6576 million and
the interest from the special account of raised funds was RMB68.7933 million. As of the end of 2022 the balance of certificate of deposit and time deposits purchased with temporarily idle
raised funds was RMB2.5 billion. The amount of balance due in the special account of raised funds on 31 December 2022 was RMB3522.3479 million.
(2) Commitment Projects of Fund Raised
□ Applicable □ Not applicable
Unit: RMB’0000
Changed or Committed Investment Investment Accumulative Investment Date of Realized Whether Whether
Committed investment project
not (including investment amount after amount in the investment schedule as reaching income in the reached occurred
and super raise fund arrangement
partial amount adjustment (1) Reporting amount as of the intended use Reporting anticipated significant
32Annual Report 2022
changes) Period the period-end period-end of the project Period income changes in
(2) (3)＝(2)/(1) project
feasibility
Committed investment project
The smart technology
31 December
transformation project for liquor Not 495434.21 495434.21 108865.76 151942.50 30.67% N/A Not
2024
production
Subtotal of committed investment
--495434.21495434.21108865.76151942.50--------
project
Total -- 495434.21 495434.21 108865.76 151942.50 -- -- -- --
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 N/A
swaps of such advance
33Annual Report 2022
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
Usage and destination of unused As of 31 December 2022 the unused raised funds and the interest were deposited in the special account for raised funds and idle raised funds of RMB2.5
funds billion 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.VIII 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
34Annual Report 2022
IX Principal Subsidiaries 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
Relationship with the Main business
Company name scope Registered capital Total assets Net assets Operating revenues Operating profit Net profit Company
Wholesales of
baijiu construction
Bozhou Gujing
Subsidiary materials feeds 84864497.89 6371581783.16 1218506991.86 14604943405.92 2078878268.33 1495484480.90
Sales Co. Ltd
assistant materials
etc.Manufacture and
Anhui Longrui
Subsidiary sale of glass 86660268.98 499292798.93 400064157.13 389998081.80 46651029.71 42829815.31
Glass Co. Ltd
products etc.Yellow Crane Tower
Production and
Wine Industry Co. Subsidiary 400000000.00 1901671345.17 845680877.84 1753497722.05 290057815.07 218782173.16
sales of baijiu etc.Ltd
Shanghai Gujing
Jinhao Hotel Hotel management
Subsidiary 54000000.00 187706189.57 79041066.87 52644754.91 2950997.85 2029617.03
Management Co. house lease etc.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 Gujing Health Technology Co. Ltd. Business combination not under the same control Give full play to the advantages of Bozhou traditional Chinese
35Annual Report 2022
medicine and open up the big health industry track.Give full play to the advantages of Bozhou traditional Chinese
Anhui Maiqi Biotechnology Co. Ltd. Business combination not under the same control
medicine and open up the big health industry track.Give full play to the advantages of Bozhou traditional Chinese
Anhui Yangshengtianxia Brand Operation Co. Ltd. Business combination not under the same control
medicine and open up the big health industry track.Hainan Yangshengtianxia Biotechnology Development Co. Give full play to the advantages of Bozhou traditional Chinese
Business combination not under the same control
Ltd. medicine and open up the big health industry track.Anhui Gujinggong Liquor Original Vintage Theme Hotel Optimize the internal management structure and enhance the
Incorporated with investment
Management Co. Ltd. internal driving force.Optimize the internal management structure and enhance the
Anhui Anjie Technology Co. Ltd. Incorporated with investment
internal driving force.Optimize the internal management structure and enhance the
Huanggang Junya Trading Co. Ltd. Incorporated with investment
internal driving force.Notes to main controlled and joint stock companies:
Not applicable.
36Annual Report 2022
X Structured Bodies Controlled by the Company
□ Applicable □ Not applicable
XI Prospects
(I) Development Prospect of the Industry the Company is in
1. The industry is seeking steady progress with a clear trend of consumption recovery
With the gradual recovery of the economy and consumption consumption upgrading will remain to be the long-term trend of the
baijiu industry. In 2023 the consumption scenarios and willingness are expected to gradually recover. With a clear trend of
consumption recovery the overall pattern of a weak effect on driving sales and the slow recovery of consumption is improving in an
accelerating manner. From the perspective of the recovery route the recovery may be accelerated the decelerated. The fundamental
of the baijiu industry will show a trend of QoQ improvements after reaching the bottom around the Spring Festival. In 2023 liquor
producers are expected to maintain a steadily accelerating growth of their general performance and seeking steady progress will still
be the most significant pattern of their development.
2. A brand-guided pattern has been formed with increased industrial concentration
In the context of the increasingly fierce market competition the baijiu market gradually becomes more and more segmented. As the
development trend of concentration in “advantageous brands production capacity and production areas” remains a part of
enterprises have relied on their advantages in brands channels and capital to form a relatively stable leading market. In 2023 the
trend of “the strong is always strong and the weak becomes weaker” may become more obvious in the liquor industry. As leading
liquor producers are quite likely to achieve a growth in performance of more than 10% the segmentation of the market shares of
second-tier brands and regional liquor producers will become more aggravated.
3. The baijiu industry is advancing toward high-quality development with the release of its production capacity
“Production expansion” is arguably an important keyword for the baijiu industry. In 2022 multiple liquor producers announced to
conduct production expansion. Different from previous situations this round of production expansion is mainly concentrated on
famous liquor brands and representative liquor products. It is more driven by the pursuit of quality base liquor for vintage or aged
liquor and is a pre-emptive action for brand competition in the sub-high-end and high-end liquor markets. It not only blows the horn
for the advancement of the domestic baijiu industry on the path of high-quality and sustainable development but also indicates that
the production capacity should be released to respond to the new situation after the pandemic. Therefore the release of the
production capacity of leading liquor producers will be an important orientation of the development of the liquor industry in 2023.
4. Industrial upgrading makes the trend of digitalization more and more obvious
The fourth industrial revolution represented by digitalization and intelligentialization has triggered reshuffle in many industries and
put forward new topics of development for the traditional baijiu-making industry. With the continuous upgrading of consumer
demand and the aggravation of competition in the domestic baijiu market digital transformation is helping liquor producers enhance
their core competitiveness. Externally the online-offline closed loop of traffic provides consumers with an omni-channel shopping
experience as the penetration in various digital channels such as e-commerce O2O live streaming and community group purchases
is increasing. Internally lean management of all processes of operation based on digital platforms has been conducted to
continuously reduce operation costs and improve operation efficiency.(II) Development Strategy of the Company
1. Firmly boost "Strategy 5.0 Five-Star Operation” Strategy
Comprehensively fulfill Strategy 5.0 and have the "User-Centered" thought fully and deeply implemented in the Company. Solidly
create the "Five-Star Operation" enhance competitive force improve quality and efficiency optimize services and promote healthy
and efficient operation of the enterprise.
2. Firmly boost reform and innovation strategy
Deeply boost marketing innovation technological innovation and mechanism innovation and generate endogenous power of the
37Annual Report 2022
enterprise.
3. Firmly create “Talent Highland” strategy
Intensify talent recruitment and attraction and establish flexible talent attraction and wisdom experience borrowing mechanism.Innovate talent training mode and promote independent cultivation & development and absorption & attraction simultaneously.(III) Operating Revenue Plan of the Company in 2023
In 2023 the Company plans to achieve the operating revenue of RMB20.1 billion rising 20.26% compared with that of last year; and
achieve a total profit of RMB6 billion rising 34.21% compared with that of last year.(IV) Operating Risk of the Company
1. The adverse effect of the systematic risk in the macro-economic environment on the development of the industry and the
Company.
2. 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.
3. The more complex severe and uncertain external environment.
(V) Operating Measures
1. Marketing
The 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 a high position”. The Company will also continue to deepen the “ThreeOnes Project” and adhere to the implementation route of “position occupation market consolidation and customer acquisition” 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
The Company accelerated the construction of the smart technology transformation project (smart park) for liquor production and
adhered to high standards and high quality to promote the construction of smart park projects.
4. Informatization Construction
The Company will restructure business processes. With the construction of various systems such as the APS the MES the SCADA
and the bar code system 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 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
establish a unified big data platform as the base of the 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.
38Annual Report 2022
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
arrangement of the Party committees of the base province and the base city. With adherence to “Three Stricts and Three Honests” and
“do things immediately genuinely and solidly” the Company will gather strength to build “China Liquor Town”. Additionally the
Company will continuously implement the long-term perspective mindset the concept of excellence and the awareness of
high-quality products maintain integrity and innovation pursue progress while ensuring stability and advance toward a higher
objective.XII Communications with the Investment Community such as Researches Inquiries and
Interviews
□ Applicable □ Not applicable
39Annual Report 2022
Part IV Corporate Governance
I General Information of Corporate Governance
Indicate by tick market whether there is any material in-compliance with laws administrative regulations and the regulatory
documents issued by the CSRC governing the governance of listed companies.□Yes □No
The Company has enabled the General Meeting the Board of Directors the Board of Supervisors and the management to form a
standardized and scientific decision-making mechanism of operation to sufficiently protect the rights and interests of investors and
small and medium investors in particular and to intensify the standardized operation of the Company in strict accordance with
relevant laws and regulations such as the Company Law the Securities Law the Code of Corporate Governance for Listed
Companies the Rules for Stock Listing of Shenzhen Stock Exchange and Self-Regulatory Guidelines No. 1 for Companies Listed on
Shenzhen Stock Exchange - Standard Operation of Listed Companies on the Main Board. During the Reporting Period the
Company's actual situation of corporate governance met the relevant requirements of the normative documents on the governance of
listed companies issued by the China Securities Regulatory Commission. In strict accordance with the relevant laws and regulations
and the Company's requirements on internal rules regulations and management system each of the directors supervisors and senior
managers of the Company executed his or her rights and obligations to ensure transparent disclosure of the Company's information
its operation according to law and honesty and trustworthiness.
1. Shareholders and General Meeting of Shareholders
The Company regulates the convening holding and voting procedures of the general meeting of shareholders in strict accordance
with the provisions and requirements of the Company Law the Articles of Association and the Rules of Procedure of the General
Meeting. During the Reporting Period the convening and holding procedures of general meetings of shareholders the qualifications
of attendants to the meetings and the voting procedures of the meetings all met the provisions of the Company Law Rules of
Procedure of the General Meeting and other laws and regulations. The Company equally treated all of its shareholders and small
and medium shareholders in particular to ensure full execution of rights of all shareholders.
2. The Company and Controlling Shareholders
The Company's controlling shareholders are able to strictly regulate their own behaviors without any violation of provisions of
relevant laws regulations and the Company's Articles of Association. They have not directly or indirectly interfered with the
Company's decision-making and production and operation activities nor have they occupied the Company's funds; the Company has
not provided its controlling shareholders with any form of guarantee.
3. Directors and Board of Directors
The Company's Board of Directors consists of nine directors three of whom are independent directors. The number of directors and
the personnel composition of the Board of Directors comply with the requirements of laws regulations and the Articles of
Association. All directors act in accordance with the Articles of Association Rules of Procedure of the Board of Directors and the
Work Policy for Independent Directors etc. attend the meetings of the Board of Directors and general meetings of shareholders
diligently and faithfully perform their duties and obligations. Meanwhile they actively participate in relevant training and get
familiar with relevant laws and legislations. Under the Board of Directors there are four special committees i.e. the Audit
Committee the Nominating Committee the Remuneration and Appraisal Committee and the Strategy Committee which perform
their normal duties to provide scientific and professional comments and references for decision-making of the Board of Directors.
4. Supervisors and Board of Supervisors
There are five supervisors in the Company's Board of Supervisors including two employee supervisors. The number and
40Annual Report 2022
composition of the Board of Supervisors are in compliance with the requirements of laws and regulations. All supervisors are able to
conscientiously perform their duties in accordance with the requirements of the Rules of Procedure of the Board of Supervisors
earnestly perform their duties and supervise the major events related-party transactions financial status law-and-regulation
compliance of performance of duties of directors and senior managers of the Company.
5. The Mechanism of Performance Appraisal and Incentive and Constraint
The procedures for appointment and removal of directors supervisors and senior managers of the Company shall be open and
transparent and in line with the relevant provisions of laws regulations and the Articles of Association; the Company's remuneration
appraisal scheme shall specifically stipulate the evaluation to the Company's management team. The Company shall constantly
improve the performance evaluation standard and incentive and constraint mechanism of directors supervisors and senior managers.
6. Fulfillment of Social Responsibilities and Stakeholders
The Company is able to fully respect and protect the legitimate rights and interests of relevant stakeholders achieve a balance of
interests between the society shareholders the Company suppliers customers employees and other relevant parties to promote the
sustainable stable and healthy development of the Company.
7. Information Disclosure and Transparency
The Company faithfully performs the obligation of information disclosure in strict accordance with the Articles of Association of the
Company Listing Rules of Shenzhen Stock Exchange Self-Regulatory Guidelines No. 1 for Companies Listed on Shenzhen Stock
Exchange - Standard Operation of Listed Companies on the Main Board Self-regulatory Guidelines No. 5 for Companies Listed on
Shenzhen Stock Exchange - Management of Information Disclosure Affairs and the relevant laws and regulations of China's
Securities Regulatory Commission and Shenzhen Stock Exchange. The Company designates China Securities Journal Shanghai
Securities News Ta Kung Pao and Cninfo (http://www.cninfo.com.cn) as its information disclosure media and website to guarantee
investors' right to know and to ensure that all shareholders of the Company have a fair opportunity to obtain information of the
Company. Meanwhile the Company has established diversified communication channels for investors including special telephone
line exclusive mailbox and interactive platform for investors and many other forms to fully guarantee the right of a large number
of investors to know.
8. The formulation and implementation of the registration and management system on inside information and insiders
In accordance with the requirements of regulatory authorities the Company and all of its controlling shareholders have formulated
the system for registration and record on inside information and insiders regulated the acts of managing inside information of the
Company and its controlling shareholder strengthened the classification of inside information and safeguarded the principle of
fairness for information disclosure. During the Reporting Period in strict accordance with the Management System on Inside
Information and Insiders the Company has made well classification of inside information and registration and record on insiders.II The Company’s Independence from Its Controlling Shareholder and Actual Controller in
Business Personnel Asset Organization and Financial Affairs
The Company and the controlling shareholder Anhui Gujing Group Co. Ltd. realized five independences in terms of business
personnel assets organizations and financial affairs with separate independent calculation independent and complete business
independent operation ability and independent responsibilities and risks. Majority shareholders cannot surpass the shareholders’
general meeting to directly or indirectly interfere with the Company’s decisions and legal production as well as operation activities
and there is no same trade competition state of the same products between the company and majority shareholders.
1. Independence of Business
The Company is mainly engaged in the production and sale of baijiu and the Company's business is mutually independent of its
controlling shareholder Gujing Group and other enterprises controlled by the Group. The issuer owns independent research and
development system purchasing system production system and sale system forming a complete business chain all of which do not
rely on its shareholders and their subordinate enterprises. Therefore the issuer's business is independent of its controlling
41Annual Report 2022
shareholders.
2. Independence of Personnel
The Company has independent management systems of labor personnel salary etc. and independent staff teams in which the salary
payment and welfare expenditure of the Company are strictly independent of those of its shareholders and related parties. The
directors supervisors and senior managers of the Company are all selected in strict accordance with the relevant provisions of the
Company Law and the Company's Articles of Association. All senior managers do not take other positions than directors or
supervisors in any of other entities controlled by the controlling shareholders or actual controllers of the Company nor do they
receive salary from any other entities controlled by the controlling shareholders or actual controllers of the Company. None of the
financial staff members of the Company takes part-time positions in any of other entities controlled by the controlling shareholders or
actual controllers of the Company.
3. Independence of Assets
The Company has its production system auxiliary production system and supporting facilities related to its production and operation;
and legally has the ownership or use rights of the land plants machines trademarks and patents in relation to its production and
operation. Therefore there is not any damage to the Company's interests in such a way that the assets and funds of the Company are
occupied by the Company's controlling shareholders and their related parties.
4. Independence of Organization
The Company has established a sound and integral governance structure of general meeting of shareholders the Board of Directors
and the Board of Supervisors and formulated the corresponding internal control management system. The Company independently
exercises the duties and rights of operation and management in which the Company's units of production operation and office are
completely separated from the shareholding entities. Therefore the Company does not make mixed operation and has mixed office
with its shareholding entities; the Company's shareholding entities and their related entities or persons do not interfere with the
Company's structural setup; there is not any subordinate relationship between the Company and its controlling shareholders or
between their functional departments.
5. Independence of Finance
The Company has set up an independent finance department with full-time personnel; and established an independent accounting
system and financial management system independently making financial decisions and implementing a strict internal audit system.An independent bank account has been opened for the Company without sharing the account with the Company's shareholding
entities or any other entity or person. The Company as an independent taxpayer declares taxes and fulfills tax payment obligations
independently according to law and does not pay taxes together with its shareholding entities.III Horizontal Competition
□ Applicable □ Not applicable
IV Annual and Extraordinary General Meetings Convened during the Reporting Period
1. General Meeting Convened during the Reporting Period
Investor Index to disclosed
Meeting Type Date of the meeting Disclosure date
participation ratio information
Announcement on
The 2021 Annual Annual General Resolutions of the
56.58% 27 May 2022 28 May 2022
General Meeting Meeting 2021 Annual
General Meeting
42Annual Report 2022
disclosed on
www.cninfo.com.cn
2. Extraordinary General Meetings Convened at the Request of Preferred Shareholders with Resumed
Voting Rights
□ Applicable □ Not applicable
V Directors Supervisors and Senior Management
1. Basic Information
Increase Decrease
End Beginning in the in the Other Ending
Incumbent/Form Gende Ag Start of of
Name Office title shareholdin Reportin Reportin increase/decrea shareholdin
er r e tenure tenur
e g (share) g Period g Period se (share) g (share)
(share) (share)
Chairman 18
Liang 23 April
of the Incumbent Male 57 June
Jinhui 2014
Board 2023
2318
Li Peihui Director Incumbent Male 50 August June
20162023
18
Zhou Director 23 April
Incumbent Male 49 June
Qingwu GM 2014
2023
Director
18
Executive 5 August
Yan Lijun Incumbent Male 50 June
Deputy 2016
2023
GM
Director 23 18
Xu Peng Deputy Incumbent Male 53 August June
GM 2016 2023
Ye 15 18
Changqin Director Incumbent Male 49 Decembe June
g r 2011 2023
18
Zhang Independe 19 June
Incumbent Male 72 June
Guiping nt director 2020
2023
18
Wang Independe 19 June
Incumbent Male 61 June
Ruihua nt director 2020
2023
43Annual Report 2022
18
Xu Independe 19 June
Incumbent Male 47 June
Zhihao nt director 2020
2023
Chairman
of 18
Sun 20 May
Supervisor Incumbent Male 58 June
Wanhua 2019
y 2023
Committee
2318
Yang
Supervisor Incumbent Male 56 August June
Xiaofan
20162023
18
Lu 20 May
Supervisor Incumbent Male 43 June
Duicang 2019
2023
2318
Employee
Zhang Bo Incumbent Male 58 August June
supervisor
20162023
18
Employee 20 March
Cui Yujun Incumbent Male 55 June
supervisor 2022
2023
18
Zhang Deputy 5 August
Incumbent Male 55 June
Lihong GM 2016
2023
2818
Gao Deputy
Incumbent Male 53 August June
Jiakun GM
20202023
2818
Deputy
Li Anjun Incumbent Male 53 August June
GM
20202023
Zhu 28 18
Deputy
Xianghon Incumbent Male 49 August June
GM
g 2020 2023
2318
Deputy
Kang Lei Incumbent Male 45 Septembe June
GM
r 2022 2023
Deputy 23 18
Zhu
GM Chief Incumbent Male 46 Septembe June
Jiafeng
Accountant r 2022 2023
Zhu Secretary 29 18
Incumbent Male 46
Jiafeng of the October June
44Annual Report 2022
Board 2021 2023
20
23
Wang Employee Marc
Former Male 53 August
Zibin supervisor h
2016
2022
Total -- -- -- -- -- --
Indicate by tick mark whether any directors or supervisors left or any senior management were disengaged during the Reporting
Period
□Yes □No
Mr. Wang Zibin applied for resignation from the position of employee supervisor of the Company due to job adjustment.Change of Directors Supervisors and Senior Management
□ Applicable □ Not applicable
Name Office title Type of change Date of change Reason for change
Employee Applied for resignation from the position of employee
Wang Zibin Left 20 March 2022
supervisor supervisor of the Company due to job adjustment
Employee
Cui Yujun Elected 20 March 2022 Election
supervisor
23 September
Kang Lei Deputy GM Appointed Appointment
2022
Deputy GM 23 September
Zhu Jiafeng Appointed Appointment
Chief Accountant 2022
2. Biographical Information
Professional backgrounds major work experience and current duties in the Company of the incumbent directors supervisors and
senior management:
1. Mr. Liang Jinhui male born in October 1966 member of CPC is Political Engineer a deputy to the 13th National People’s
Congress a deputy to the 14th National People’s Congress and Chinese Brewmaster with MBA degree incumbent Secretary of CPC
and president of the Company and president and Secretary of CPC of Gujing Group. He ever took the post of MD GM Deputy GM
GM of Bozhou Gujing Sales Co. Ltd. Supervisor of Third Supervisory Committee Director of the 4th 5th and 6th Board of Directors
and Chairman of the 7th and 8th Board of Directors of the Company.
2. Mr. Li Peihui male born in July 1973 member of CPC is a holder of master degree. He is a senior accountant CPA
(non-practicing) and member of national leading accounting talents. At present he acts as the Company’s Vice Secretary of CPC and
president of Gujing Group. He had ever served as deputy GM and GM of Financial Department deputy chief accountant chief
accountant Secretary of Board of Directors and Director of the Company; Chairman of the Board of Anhui Ruijing Business Travel
Group Co. and Anhui Huixin Financial Investment Group; executive vice president and CFO of Gujing Group; and director of the 7th
and 8th Board of Directors.
3. Mr. Zhou Qingwu male born in February 1974 member of CPC is a senior engineer and China Chief Baijiu Taster with
educational experience of graduate student. At present he is Vice Secretary of CPC Director and General Manager of the Company
Vice Secretary of CPC of Gujing Group. He had ever acted as Deputy GM and deputy executive GM of the Company and Director of
the 5th 6th 7th and 8th Board of Directors of the Company.
45Annual Report 2022
4. Mr. Yan Lijun male June 1973 member of CPC is a holder of master degree with Senior Taster. Now he is Vice Secretary of
CPC Director Executive Deputy GM of the Company member of CPC Committee of Gujing Group Chairman of the Board and
GM of Bozhou Gujing Sales Co. Ltd. He once worked as a salesman of Sale Company District Manager Director of Market
Research Vice Manager of Planning Department Director of Hefei Strategic Operations Center Vice GM and director of the 7th and
8th Board of Directors of the Company.
5. Mr. Xu Peng male born in September 1970 member of CPC has educational experience of undergraduate college. He is the
member of CPC Committee Director and Deputy GM of the Company member of CPC Committee of Gujing Group Secretary of
CPC and Chairman of the Board of Yellow Crane Tower Liquor Industry Co. Ltd. He had ever acted as Deputy Director and Director
of Finance Second Office of Finance Department of the Company Manager of Finance Department of Anhui Laobada Co. Ltd. Vice
Manager and Manager of Finance Department of the Company Deputy General Manager and Chief Supervisor of Market
Supervision Department of Bozhou Gujing Sales Company Chairman of the 7th Supervisory Committee and Director of the 7th and
8th Board of Directors of the Company.
6. Mr. Ye Changqing male born in October 1974 member of CPC senior accountant is a member of national leading accounting
talents with master degree and International Certified Internal Auditor. He is the incumbent Director of the Company and CFO of
Gujing Group. He had ever acted as Chief Auditor of Audit Department Vice Manager of Audit Department and Vice Supervisor and
Supervisor of Auditing& Supervision Department; and Supervisor of the 4th Supervisory Committee of the Company; Director and
Secretary of the 5th 6th 7th and 8th Board of Directors and Chief Accountant of the Company.
7. Zhang Guiping male born in August 1951 is a member of the Revolutionary Committee of the Chinese Kuomintang a bachelor's
degree holder and a member of the 13th CPPCC National Committee. He is currently the Chairman of Sunning Global Chairman and
president of Suning Universal Co. Ltd. Independent Director of the Company Chairman of the Entrepreneurs Association of the
Revolutionay Committee of the Chinese Kuomintang Deputy Director of the Central Economic Commission of the Revolutionary
Committee of the Chinese Kuomintang Supervisor of the Party and Government Style and Police Style of the Ministry of Public
Security of the Revolutionary Committee of the Chinese Kuomintang Vice Chairman of Sun Yat-Sen Fraternity Foundation
Chairman of Commercial Culture Association of China President of the Council of Anhui International Huishang Exchange
Association Chairman of Anhui Chamber of Commerce in Jiangsu and other social positions. Many awards have been bestowed
upon him including “National Model Worker” “Excellent Contributor to Building of Socialism with Chinese Characteristics” “RoleModel of the Revolutionary Committee of the Chinese Kuomintang” “China Outstanding Private Entrepreneur” “China’s MostInfluential Business Leader” “Chinese Integrity Talent” “TOP Ten Influential People in China’s Real Estate Industry” and
“Outstanding Individual Contributor to China Charity”.
8. Wang Ruihua male born in January 1962 member of CPC is a non-practicing Chinese CPA with a doctor’s degree in
management. Now he acts as the executive dean a professor and doctoral advisor at Central University of Finance and Economics
Guangdong-Hong Kong-Macao Greater Bay Area (Huangpu) Research Institute & member of China National MBA Education
Supervisory Committee member of Independent Director Committee of China Association for Public Companies the independent
director in the Company independent director in Bank Of Beijing Co. Ltd. independent director of Harvest Fund Management Co.Ltd. independent director of JD Technology Holding Co. Ltd. independent director of China Post Securities Co. Ltd.
9. Xu Zhihao male born in June 1976 is a senior engineer who graduated from Renmin University of China. He also holds a
master's degree from the PBC School of Finance Tsinghua University and is studying for a doctorate at Zhejiang University and
Singapore Management University. He possesses the professional qualifications to engage in fund and securities businesses. He is
currently Independent Director of the Company CEO of Geely Technology Group Co. Ltd. Chairman of QJMOTOR and Chairman
of Mintimes Investment Development Group Co. Ltd.
10. Sun Wanhua male was born in October 1965 member of CPC with a bachelor degree. Now he acts as the Chairman of the
Supervisory Committee of the Company member of the Party Committee and vice president in Gujing Group. He once held the posts
of the member of Standing Committee of CPC County Committee the Party Secretary of People’s Armed Forces Department and
46Annual Report 2022
political commissar in Minquan County Henan Province member of Standing Committee of Discipline Inspection Committee in
Bozhou Deputy Director of Bozhou Supervision Bureau and Deputy Secretary of Bozhou Discipline Inspection Committee
Chairman of the 8th Supervisory Committee of the Company.
11. Mr. Yang Xiaofan male born in April 1967 member of CPC is a holder of master degree. At present he is Supervisor of the
Company and Vice President and member of CPC Committee of Gujing Group. He once acted as Vice President and General
Manager of Anhui Gujing Real Estates Group Co. Ltd. Assistant to President of Gujing Group; Director of the 5 th 6th and 7th Board
of Directors of the Company and Supervisor of the 7th and 8th Supervisory Committee of the Company.
12. Lu Duicang male born in March 1980 member of CPC a senior accountant with a master degree. Now he serves as the
supervisor of the Company the Chairman of Anhui Longrui Glass Co. Ltd. and director of Mengcheng Rural Commercial Bank Co.Ltd. He once acted as the accountant deputy director and director of No.1 Center of Finance Department factory director of the
Baijiu Bottling Branch and Manager of Finished Product Department in the Company Controller of the Financial Management
Center in Gujing Group GM of Anhui Huixin Finance Investment Group Co. Ltd. Assistant Financial Controller in Gujing Group
and the Supervisor of the 5th 6th 7th and 8th Supervisory Committee of the Company.
13. Mr. Zhang Bo male born in July 1965 member of CPC is an economist with bachelor degree. Now he serves as Employee
Supervisor of the Company and director of 5A Management Committee (preparatory). He once worked as Chairman of the board and
GM of Bozhou Gujing Printing Co. Ltd. and Bozhou Gujing Glassware Manufacturing Co. Ltd. as well as Chairman of the Board of
Bozhou Ruineng Heat and Power Co. Ltd. Supervisor of the 7th and 8th Supervisory Committee of the Company Chairman of the
Labor Union of Gujing Group and Chairman of the Board & GM of Anhui Mingguang Distillery Co. Ltd.
14. Mr. Cui Yujun male born in December 1968 member of CPC is a holder of bachelor degree. He is incumbent the employee
supervisor of the Company and director of the Production Management Centre. He onced worked as the workshop manager manager
GM Assistant and Deputy Director of the Company’s Production Management Centre.
15. Mr. Zhang Lihong male born in October 1968 member of CPC is an economist with bachelor degree. He is incumbent Vice
Secretary of CPC and Deputy GM of the Company and member of CPC Committee and deputy secretary of Commission for
Discipline and Inspection of Gujing Group. He once acted as clerk Secretary of Operation Department and Market Development
Department Deputy GM Director of General Office Director of Service Centre of Bozhou Gujing Sales Co. Ltd. Director of HR
Department and Administrative Service Center and GM Assistant of the Company.
16. Mr. Gao Jiakun male born in November 1970 member of CPC is a holder of bachelor degree. He is incumbent member of the
CPC and Deputy GM of the Company. He once served as GM of Production Management Department Vice Director of Production
Management Centre Chairman of the Board and GM of Bozhou Pairuite Packing Products Co. Ltd. Director of Finished Products
Filling Centre and Production Management Centre and assistant to GM of the Company.
17. Li Anjun male born in May 1970 is a member of CPC with a master's degree. He is currently a member of the Party Committee
Deputy General Manager and Chief Enginee of the Company. He served as the Deputy Director and Director of the Company's
Technical Quality Center.
18. Mr. Zhu Xianghong male born in September 1974 member of CPC is a senior Wine Taster with bachelor degree. He is
incumbent Deputy GM of Company GM of Yellow Crane Tower Liquor Industry Co. Ltd. He once acted as GM of Product
Department of Bozhou Gujing Sales Co. Ltd. GM of Hefei Office regional GM of Northern Anhui Province GM of Anhui
Operating Centre standing Deputy GM of Sales Company and assistant to GM of the Company.
19. Kang Lei male born in July 1978 is a member of CPC with a college degree. He is currently Deputy GM and Director of the
Enterprise Management Center of the Company. He served as Deputy Director of the Financial Management Center of Bozhou
Gujing Sales Company Director and Assistant to General Manager of the Company's Administrative Service Center and Deputy
Director of the President's Executive Office of Gujing Group.
20. Zhu Jiafeng male born in August 1977 is a member of CPC and senior accountant with a college degree. He is currently Deputy
GM Chief Accountant Secretary of the Board and Director of the Financial Management Center of the Company. He served as the
47Annual Report 2022
Manager Deputy Director assistant to General Manager and Deputy Chief Accountant of the Financial Management Center of the
Company.Offices held concurrently in shareholding entities:
□ Applicable □ Not applicable
Office held in
Remuneration or
the
Name Shareholding entity Start of tenure End of tenure allowance from the
shareholding
shareholding entity
entity
Chairman of
Liang Jinhui Anhui Gujing Group Co. Ltd. the Board of 1 May 2014 Yes
Directors
31 October
Li Peihui Anhui Gujing Group Co. Ltd. President Yes
2017
Vice 31 October
Sun Wanhua Anhui Gujing Group Co. Ltd. Yes
President 2017
Vice 1 November
Yang Xiaofan Anhui Gujing Group Co. Ltd. Yes
President 2009
Ye Changqing Anhui Gujing Group Co. Ltd. CFO 13 August 2021 Yes
The above-mentioned personnel though they take posts in shareholders’ entities comply with the relevant
Notes employment requirements of Company Law Securities Law and never disciplined by CSRC other relevant
departments and the Stock Exchange.Offices held concurrently in other entities:
□ Applicable □ Not applicable
Remuneration or
Office held in
Name Other entity Start of tenure End of tenure allowance from
other entity
other entity
Chairman of
Suning Universal Group Co.Ltd December 2005 No
the Board
Zhang Guiping Chairman of
Suning Universal Co.Ltd the Board October 2017 October 2023 Yes
President
Geely Technology Group Co. Ltd. CEO January 2018 Yes
Chairman of
Zhejiang Qjiang Motorcycle Co.Ltd. February 2020 May 2024 No
Xu Zhihao the Board
Mintimes Investment Development Group Chairman of
August 2021 August 2024 No
Co. Ltd. the Board
Central University of Finance and
Professor July 1983 Yes
Economics
Wang Ruihua Independent
Bank Of Beijing Co. Ltd. December 2019 December 2025 Yes
director
Harvest Fund Management Co. Ltd. Independent November 2017 Yes
48Annual Report 2022
director
Independent
JD Technology Holding Co. Ltd. June 2020 Yes
director
Independent
China Post Securities Co. Ltd. February 2023 Yes
director
Mengcheng Rural Commercial Bank Co.Lu Duicang Director March 2018 No
Ltd.Notes Zhang Guiping Wang Ruihua and Xu Zhihua are independent directors of the Company.Punishments imposed in the recent three years by the securities regulator on the incumbent directors supervisors and senior
management as well as those who left in the Reporting Period:
□ Applicable □ Not applicable
On 10 May 2022 Mr. Zhang Guiping an independent director of the Company received the Decision on Giving Zhang Guiping a
Notice of Criticism from Shenzhen Stock Exchange due to the short-term trading of the Company’s stock made by his spouse.
3. Remuneration of Directors Supervisors and Senior Management
Decision-making procedure determination basis and actual payments of remuneration for directors supervisors and senior
management:
(1) Decision-making procedure of remuneration for Directors Supervisors and Executive Officers
The remuneration of independent directors is decided through the general meeting of shareholders and the remuneration of the
directors supervisors and senior managers assuming positions in the Company is defined in accordance with the relevant regulations
of the State-owned Assets Supervision and Administration Commission (the "SASAC") of Haozhou Municipal People's Government
and the relevant policies of the Company.
(2) Determination basis of remuneration for Directors Supervisors and Executive Officers
The remuneration is determined based on the annual performance of the Company and the appraisal result in accordance with the
spirits in the Implementation Opinion on Deepening the System Reform of Remuneration of Chargers in Provincial Enterprises
(WF[2015] No. 28) and the Interim Procedures of Remuneration Management of Chargers in Municipal Enterprises (GZG[2017] No.
21) issued by the CPC Anhui Provincial Committee and the People’s Government of Anhui.
(3) Actual Payment of remuneration for Directors Supervisors and Executive Officers
Part of basic remuneration is paid on a monthly basis and according to appraisal performance-based remuneration is paid at the end
of the year.Remuneration of directors supervisors and senior management for the Reporting Period
Unit: RMB'0000
Total before-tax
Any
Incumbent/Forme remuneration
Name Office title Gender Age remuneration
r from the
from related party
Company
Chairman of the
Liang Jinhui Male 57 Incumbent Yes
Board
Li Peihui Director Male 50 Incumbent Yes
49Annual Report 2022
Zhou Qingwu Director GM Male 49 Incumbent 100.73 No
Director
Yan Lijun Executive Deputy Male 50 Incumbent 392.70 No
GM
Director Deputy
Xu Peng Male 53 Incumbent 229.66 No
GM
Ye Changqing Director Male 49 Incumbent Yes
Independent
Zhang Guiping Male 72 Incumbent 20.00 No
director
Independent
Wang Ruihua Male 61 Incumbent 20.00 No
director
Independent
Xu Zhihao Male 47 Incumbent 20.00 No
director
Chairman of
Sun Wanhua Supervisory Male 58 Incumbent Yes
Committee
Yang Xiaofan Supervisor Male 56 Incumbent Yes
Lu Duicang Supervisor Male 43 Incumbent 93.28 No
Employee
Zhang Bo Male 58 Incumbent Yes
supervisor
Employee
Cui Yujun Male 55 Incumbent 109.96 No
supervisor
Zhang Lihong Deputy GM Male 55 Incumbent 155.84 No
Gao Jiakun Deputy GM Male 53 Incumbent 173.55 No
Li Anjun Deputy GM Male 53 Incumbent 165.74 No
Zhu Xianghong Deputy GM Male 49 Incumbent 358.95 No
Kang Lei Deputy GM Male 45 Incumbent 158.45 No
Deputy GM
Chief Accountant
Zhu Jiafeng Male 46 Incumbent 160.73 No
Secretary of the
Board
Employee
Wang Zibin Male 53 Former Yes
supervisor
Total -- -- -- -- 2159.59 --
50Annual Report 2022
VI Performance of Duty by Directors in the Reporting Period
1. Board Meeting Convened during the Reporting Period
Meeting Date of the meeting Disclosure date Meeting resolutions
Announcement on Resolutions
of the 10th Meeting of the 9th
Board of Directors of Anhui
The 10th Meeting of the 9th
29 April 2022 30 April 2022 Gujing Distillery Company
Board of Directors
Limited (No.: 2022-010)
disclosed on the website of
Cninfo (www.cninfo.com.cn).Announcement on Resolutions
of the 11th Meeting of the 9th
Board of Directors of Anhui
The 11th Meeting of the 9th
30 August 2022 31 August 2022 Gujing Distillery Company
Board of Directors
Limited (No.: 2022-025)
disclosed on the website of
Cninfo (www.cninfo.com.cn).Announcement on Resolutions
of the 12th Meeting of the 9th
Board of Directors of Anhui
The 12th Meeting of the 9th
23 September 2022 24 September 2022 Gujing Distillery Company
Board of Directors
Limited (No.: 2022-030)
disclosed on the website of
Cninfo (www.cninfo.com.cn).The 13th Meeting of the 9th
28 October 2022 N/A Third Quarterly Report 2022
Board of Directors
Announcement on Resolutions
of the 14th Meeting of the 9th
Board of Directors of Anhui
The 14th Meeting of the 9th
30 December 2022 31 December 2022 Gujing Distillery Company
Board of Directors
Limited (No.: 2022-035)
disclosed on the website of
Cninfo (www.cninfo.com.cn).
2. Attendance of Directors at Board Meetings and General Meetings
Attendance of directors at board meetings and general meetings
Total number Board Board meetings Board Board The director General
Director of board meetings attended by way of meetings meetings the failed to attend meetings
meetings the attended on telecommunication attended director failed two attended
51Annual Report 2022
director was site through a to attend consecutive
eligible to proxy board
attend meetings
(yes/no)
Liang Jinhui 5 1 4 0 0 No 1
Li Peihui 5 1 4 0 0 No 1
Zhou Qingwu 5 1 4 0 0 No 1
Yan Lijun 5 1 4 0 0 No 1
Xu Peng 5 1 4 0 0 No 1
Ye Changqing 5 1 4 0 0 No 1
Zhang Guiping 5 1 4 0 0 No 1
Wang Ruihua 5 1 4 0 0 No 1
Xu Zhihao 5 1 4 0 0 No 1
3. Objections Raised by Directors on Matters of the Company
Indicate by tick mark whether any independent directors raised any objections on any matter of the Company.□Yes □No
No such cases in the Reporting Period.
4. Other Information about the Performance of Duty by Directors
Indicate by tick mark whether any suggestions from directors were adopted by the Company.□Yes □No
Suggestions from directors adopted or not adopted by the Company
During the Reporting Period the directors of the Company carried out their work diligently and conscientiously in strict accordance
with the Company Law the Securities Law the Code of Corporate Governance for Listed Companies the Self-Regulatory
Guidelines No. 1 for Companies Listed on Shenzhen Stock Exchange - Standard Operation of Listed Companies on the Main Board
the Articles of Association and Rules of Procedure of the Board of Directors. Based on the Company's reality they put forward
relevant opinions on the Company's major governance and operation decisions and reached consensus through full communication
and discussion. They resolutely supervised and promoted the implementation of the resolutions of the Board of Directors to ensure
scientific timely and efficient decision-making and safeguard the legitimate rights and interests of the Company and all of its
shareholders.VII Performance of Duty by Specialized Committees under the Board in the Reporting Period
Other Details
Number of
Convene Important opinions and informat about
Committee Members meetings Content
d date suggestions raised ion issues
convened
about with
52Annual Report 2022
the objections
perform (if any)
ance of
duty
The Audit Committee
carried out its work
diligently and
conscientiously in strict
accordance with the
Company Law the
Progress of the 2021 regulations of the China
Zhang Guiping
The Audit annual report audit; Securities Regulatory
Wang Ruihua 21
Committee The summary of the Commission the Articles of
Xu Zhihao Xu 1 March
under the 2021 internal audits and Association and the Rules
Peng Ye 2022
Board the work plan for the of Procedure of the Board
Changqing
2022 internal audits. of Directors. It put forward
relevant opinions based on
the reality of the Company.Upon full communication
and discussion all
proposals were
unanimously approved.The deliberation on the
Company’s 2021 Internal The Audit Committee
Control Self-assessment carried out its work
Report diligently and
the deliberation on the conscientiously in strict
Company’s 2021 Annual accordance with the
Report and Its Summary Company Law the
the deliberation on the regulations of the China
Zhang Guiping
The Audit Company’s First Quarter Securities Regulatory
Wang Ruihua
Committee 26 April Report for 2022 and Its Commission the Articles of
Xu Zhihao Xu 1
under the 2022 Summary the Association and the Rules
Peng Ye
Board deliberation on the of Procedure of the Board
Changqing
Company’s Appointment of Directors. It put forward
of the Audit Agency for relevant opinions based on
2022 and the the reality of the Company.
deliberation on the Upon full communication
Company’s Special and discussion all
Report on Deposit and proposals were
Use of the Raised Funds unanimously approved.of 2021.The Audit Zhang Guiping 1 25 The deliberation on the The Audit Committee
53Annual Report 2022
Committee Wang Ruihua August Company’s 2022 carried out its work
under the Xu Zhihao Xu 2022 Semi-annual Report and diligently and
Board Peng Ye the deliberation on the conscientiously in strict
Changqing Company’s Report on the accordance with the
Review of Deposit and Company Law the
Use of the Raised Funds regulations of the China
between March and June Securities Regulatory
of 2022. Commission the Articles of
Association and the Rules
of Procedure of the Board
of Directors. It put forward
relevant opinions based on
the reality of the Company.Upon full communication
and discussion all
proposals were
unanimously approved.The Audit Committee
carried out its work
diligently and
conscientiously in strict
accordance with the
The deliberation on the
Company Law the
Company’s Third
regulations of the China
Zhang Guiping Quarter Report for 2022
The Audit Securities Regulatory
Wang Ruihua 25 and the deliberation on
Committee Commission the Articles of
Xu Zhihao Xu 1 October the Company’s Report on
under the Association and the Rules
Peng Ye 2022 the Review of Deposit
Board of Procedure of the Board
Changqing and Use of the Raised
of Directors. It put forward
Funds of the Third
relevant opinions based on
Quarter of 2022.the reality of the Company.Upon full communication
and discussion all
proposals were
unanimously approved.The Nomination
Committee carried out its
The Zhang Guiping The deliberation on the
work diligently and
Nomination Wang Ruihua 22 Proposal on the
conscientiously in strict
Committee Xu Zhihao 1 Septemb Nomination of the
accordance with the
under the Liang Jinhui Li er 2022 Company’s Senior
Company Law the
Board Peihui Managers.regulations of the China
Securities Regulatory
54Annual Report 2022
Commission the Articles of
Association and the Rules
of Procedure of the Board
of Directors. It put forward
relevant opinions based on
the reality of the Company.Upon full communication
and discussion all
proposals were
unanimously approved.The Nomination
Committee carried out its
work diligently and
conscientiously in strict
accordance with the
Company Law the
The deliberation on the
regulations of the China
The Zhang Guiping Proposal on the
Securities Regulatory
Nomination Wang Ruihua 30 Formulation of the
Commission the Articles of
Committee Xu Zhihao 1 Decemb Competitive Selection
Association and the Rules
under the Liang Jinhui Li er 2022 System for the
of Procedure of the Board
Board Peihui Company’s Management
of Directors. It put forward
Team.relevant opinions based on
the reality of the Company.Upon full communication
and discussion all
proposals were
unanimously approved.The Remuneration and
Appraisal Committee
carried out its work
The deliberation on the diligently and
Proposal on the conscientiously in strict
The
Zhang Guiping Formulation of the accordance with the
Remuneration
Wang Ruihua 30 Management Measures Company Law the
and Appraisal
Xu Zhihao Zhou 1 Decemb for the Remuneration regulations of the China
Committee
Qingwu Yan er 2022 and Appraisal of Securities Regulatory
under the
Lijun Members of the Commission the Articles of
Board
Company’s Management Association and the Rules
Team. of Procedure of the Board
of Directors. It put forward
relevant opinions based on
the reality of the Company.
55Annual Report 2022
Upon full communication
and discussion all
proposals were
unanimously approved.VIII Performance of Duty by the Supervisory Committee
Indicate by tick mark whether the Supervisory Committee found any risk to the Company during its supervision in the Reporting
Period.□Yes □No
The Supervisory Committee raised no objections in the Reporting Period.IX Employees
1. Number Functions and Educational Backgrounds of Employees
Number of in-service employees of the Company as the parent at
5826
the period-end
Number of in-service employees of major subsidiaries at the
5484
period-end
Total number of in-service employees 11310
Total number of paid employees in the Reporting Period 11310
Number of retirees to whom the Company as the parent or its
1511
major subsidiaries need to pay retirement pensions
Functions
Function Employees
Production 5598
Sales 3082
Technical 562
Financial 209
Administrative 1039
Other 820
Total 11310
Educational backgrounds
Educational background Employees
Master or above 130
Bachelor 3133
Junior college 2594
56Annual Report 2022
High school or below 5453
Total 11310
2. Employee Remuneration Policy
The remuneration policy was conducted strictly in line with the related law and regulations of the state and the plan of operation
performance and profits of the Company and the relevant remuneration policy management.
3. Employee Training Plans
Employee training is significant in the Human resource management. The Company always pay high attention to the employee
training and development the Company sets up effective training plan combining with the current situation of the Company annual
plan nature of the post and the demand of employee learning which includes new employee induction training on-job training
front-line employee operating skills training management improvement training and part-time study. Continuously improve the
whole quality of the employees realized a win-win situation and progress between the Company and the employees.
4. Labor Outsourcing
□ Applicable □ Not applicable
Total man-hours (hour) 3001960.66
Total remuneration paid (RMB) 63419131.05
X Profit Distributions (in the Form of Cash and/or Stock)
How the profit distribution policy especially the cash dividend policy was formulated executed or revised in the Reporting Period:
□ Applicable □ Not applicable
The 2021 Annual General Meeting held on 27 May 2022 reviewed and approved the Company’s Interest Distribution Scheme in
2021 that based on the total shares of 528600000 of the Company on 31 December 2021 cash dividends was distributed at
RMB22.00 per 10 shares (tax inclusive) and the total cash dividends distributed was RMB1162920000.00 (tax inclusive) which
has been carried out completely in June 2022.Special statement about the cash dividend policy
In compliance with the Company’s Articles of Association and
Yes
resolution of general meeting
Specific and clear dividend standard and ratio Yes
Complete decision-making procedure and mechanism Yes
Independent directors faithfully performed their duties and
Yes
played their due role
Non-controlling interests are able to fully express their opinion
Yes
and desire and their legal rights and interests are fully protected
In case of adjusting or changing the cash dividend policy the
No adjustments or changes
conditions and procedures involved are in compliance with
57Annual Report 2022
applicable regulations and transparent
Indicate by tick mark whether the Company fails to put forward a cash dividend proposal for shareholders despite the facts that the
Company has made profits in the Reporting Period and the profits of the Company as the parent distributable to shareholders are
positive.□Applicable □ Not applicable
Final dividend plan for the Reporting Period
□ Applicable □ Not applicable
Bonus issue from capital reserves for every 10
0
shares (share)
Dividend for every 10 shares (RMB) (tax inclusive) 30.00
Bonus issue from profit for every 10 shares (share) 0
Total shares as the basis for the final dividend plan
528600000
(share)
Total cash dividends (RMB) (tax inclusive) 1585800000.00
Cash dividends in other ways (such as share
0.00
repurchase) (RMB)
Total cash bonus (including other methods) (RMB) 1585800000.00
Distributable profits (RMB) 9691022921.78
Percentage of cash dividends (including other 100.00%
methods) to the total distributed profits
Particulars about the cash dividends
If the Company is in a mature development stage and has plans for any significant expenditure in profit allocation the ratio of cash
dividends in the profit allocation shall be 40% or above.Details of final dividend plan for the Reporting Period
The Company intends to distribute RMB30.00 (tax included) per 10 shares based on the total shares of 528600000 at the end of
the year totaling RMB1585800000.00. This year does not send bonus does not transfer to increase capital stock with
accumulation fund.XI Equity Incentive Plans Employee Stock Ownership Plans or Other Incentive Measures for
Employees
□Applicable □ Not applicable
No such cases in the Reporting Period.XII Establishment and Execution of the Internal Control System for the Reporting Period
1. Establishment and Execution of the Internal Control System
In accordance with the provisions of the Basic Code for Internal Control of Enterprises and its supporting guidelines the Company
has set up a complete procedure system for internal control system in which the assessment incorporates the entities business
58Annual Report 2022
matters and high risk fields covering all major aspects of the Company's operation and management without material omissions.The Company's internal control is designed soundly and reasonably and basically implemented effectively without material
omissions. Through the operation analysis and assessment of the internal control system the Company has effectively prevented
risks in operation and management and promoted the realization of internal control objectives.
2. Material Internal Control Weaknesses Identified for the Reporting Period
□Yes □ No
XIII Management and Control over Subsidiaries by the Company for the Reporting Period
During the Reporting Period In accordance with the relevant requirements for standard operation of listed companies and the
relevant internal control system of the Company and by dispatching directors and supervisors to subsidiary companies the Company
participated in the daily operation of the Board of Directors and the Board of Supervisors thus realized the effective management
and supervision on such matters as overseas investment related-party transactions development planning compliant operation and
human resources of subsidiary companies specified the reporting system and deliberation procedure of major events and in a timely
manner followed up such major events as financial status business operation and investment operation of subsidiary companies.XIV Internal Control Self-Evaluation Report or Independent Auditor’s Report on Internal
Control
1. Internal Control Self-Evaluation Report
Disclosure date of the internal control
29 April 2023
self-evaluation report
Index to the disclosed internal control See www.cninfo.com.cn for the Anhui Gujing Distillery Company Limited
self-evaluation report Self-assessment Report of Internal Control
Evaluated entities’ combined assets as % of
98.07%
consolidated total assets
Evaluated entities’ combined operating
revenue as % of consolidated operating 99.76%
revenue
Identification standards for internal control weaknesses
Weaknesses in internal control over financial Weaknesses in internal control not related
Type
reporting to financial reporting
Critical defect: Separate defect or other Any of the following circumstances shall
defects that result in failure in preventing be deemed as a critical defect and other
finding out and correcting major wrong circumstances shall be deemed as major
reporting in financial report in time. The or minor defects according to their degree
Nature standard
following circumstances are deemed as of impact.critical defects: (1) Ineffective in controlling (1) Violate national laws regulations or
the environment; (2) Malpractice of directors standardized documents;
supervisors and senior management officers; (2) Major decision making procedure is
59Annual Report 2022
(3) According to external auditing there’s not scientific;
major wrong reporting in current financial (3) Lack of systems results in systematic
report which fails to be found by the failure;
company in its operating process; (4) Major (4) Critical or major defects fail to be
defects found and reported to the top rectified;
management fail to be corrected within a
(5) Other circumstances that have major
reasonable period of time; (5) The
impact on the company.supervision of audit committee of the
company and its internal audit department for
internal control is ineffective;
(6) Other defects that may affect correct
judgment of users of statements. Major
defect: Separate defect or other defects that
result in failure in preventing finding out and
correcting wrong reporting in financial report
in time which shall be noted by the top
management despite of not attaining or
exceeding critical level. Minor defect: Other
internal control defects not constituting
critical or major defects.Critical defect:
(1) Wrong reporting ≥0.5% of total operating
revenue; Critical defect: The defect with direct
(2) Wrong reporting ≥5% of total profit; property loss amounting to over RMB10
(3) Wrong reporting ≥0.5% of total assets; million has great negative impact on the
company and is disclosed in public in the
(4) Wrong reporting ≥0.5% of total owner’s
form of announcement.equity.Major defect: The defect with direct
Major defect:
property loss amounting to RMB1
(1) Wrong reporting ≥0.2% but ＜0.5% of
million to RMB10 million (included) or
total operating revenue;
is penalized by governmental authority of
(2) Wrong reporting ≥2% but ＜5% of total
Quantitative standard the country but has not resulted in
profit;
negative impact on the company.
(3) Wrong reporting ≥0.2% but ＜0.5% of
Minor defect: The defect with direct
total assets;
property loss no more than RMB1 million
(4) Wrong reporting ≥0.2% but ＜0.5% of (included) or is penalized by
total owner’s equity. governmental authority of the
Minor defect: provincial-level or below but has not
(1) Wrong reporting＜0.2% of total operating resulted in negative impact on the
revenue; company.
(2) Wrong reporting＜2% of total profit;
(3) Wrong reporting＜0.2% of total assets;
(4) Wrong reporting＜0.2% of total owner’s
60Annual Report 2022
equity.Number of material weaknesses in internal
0
control over financial reporting
Number of material weaknesses in internal
0
control not related to financial reporting
Number of serious weaknesses in internal
0
control over financial reporting
Number of serious weaknesses in internal
0
control not related to financial reporting
2. Independent Auditor’s Report on Internal Control
□ Applicable □ Not applicable
Opinion paragraph in the independent auditor’s report on internal control
We believe that the Company has maintained effective internal control on financial report in all significant respects according to the
Basic Rules for Enterprise Internal Control and relevant regulations on 31 December 2022.Independent auditor’s report on
Disclosed
internal control disclosed or not
Disclosure date 29 April 2023
Index to such report disclosed See www.cninfo.com.cn for Audit Report of Internal Control
Type of the auditor’s opinion Unmodified unqualified opinion
Material weaknesses in internal
control not related to financial None
reporting
Indicate by tick mark whether any modified opinion is expressed in the independent auditor’s report on the Company’s internal
control.□Yes □ No
Indicate by tick mark whether the independent auditor’s report on the Company’s internal control is consistent with the internal
control self-evaluation report issued by the Company’s Board.□ Yes □No
XV Rectifications of Problems Identified by Self-inspection in the Special Action for Listed
Company Governance
After a comprehensive self-examination the company adheres to the combination of party leadership and corporate governance in its
operations has a sound internal governance mechanism a sound governance system and transparent information disclosure in
accordance with relevant laws regulations and normative documents.
61Annual Report 2022
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 license
No. Administrative matter Serial number Application time Expiry date
1 Sewage discharge permit for Gujing
913400001519400083001V 19 July 2022 18 July 2027
plant
2 Sewage discharge permit for
913400001519400083002V 19 July 2022 18 July 2027
Zhangji plant
3 Sewage discharge permit for
913400001519400083003V 19 July 2022 18 July 2027
Headquarter plant
4 Sewage discharge permit for smart
913400001519400083004V 17 October 2022 16 October 2027
part plant
5 Sewage discharge permit for
91341600151946047T001U 24 July 2020 23 July 2023
Longrui Glass
6 Sewage discharge permit for Yellow
91421200562735332N001V 13 December 2022 12 December 2027
Crane Tower (Xianning)
The regulations for industrial emissions and the particular requirements for controlling pollutant emissions those are associated with
production and operational activities.Numbe
Discharge
Type of Name of r of Distribution Discharge
Name of Way of standards Total Approved total Excessive
major major dischar of discharge concentratio
polluter discharge implemente discharge discharge discharge
pollutants pollutants ge outlets n
d
outlets
Anbui Gujing plant 15.13mg/L Gujing Gujing Gujing plant:
Directly
Gujing Waste water COD 3 Zhangji plant 24.98mg/L plant≦50m plant: 13.31t 105.916t Naught
discharge
Distillery Headquarter 12.06mg/L g/L Zhangji Zhangji plant:
62Annual Report 2022
Co. Ltd. plant Zhangji plant: 6.03t 26.504t
plant、 Headquarter Headquarter
Headquarter plant: 21.17t plant: 116.0596t
plant≦100
mg/L
Gujing
plant≦5mg/ Gujing Gujing plant:
Anbui Gujing plant L plant: 0.24t 10.5916t
0.27mg/L
Gujing Directly Zhangji plant Zhangji Zhangji Zhangji plant:
Waste water NH3-N 3 0.18mg/L Naught
Distillery discharge Headquarter plant、 plant: 0.04t 2.6504t
0.09mg/L
Co. Ltd. plant Headquarter Headquarter Headquarter
plant≦10m plant: 0.15t plant: 11.60596t
g/L
Gujing
plant、 Gujing
Organize Gujing plant:
Anbui Gujing plant Headquarter plant: 0.425t
d 1.4mg/m3 4.301t
Gujing Zhangji plant plant≦10m Zhangji
Waste gas Smoke discharge 3 1.22mg/m3 Zhangji plant: / Naught
Distillery 3Headquarter g/m plant: 0.39t
through 1.30mg/m3 Headquarter
Co. Ltd. plant Zhangji Headquarter
chimney plant: 5.01t
plant≦20m plant: 0.55t
g/ m3
Gujing
plant、 Gujing
Organize Gujing plant:
Anbui Gujing plant Headquarter plant: 2.15t
d 7.07mg/m3 15.055t
Gujing Sulfur Diox Zhangji plant plant≦35m Zhangji
Waste gas discharge 3 0.33mg/m3 Zhangji plant: / Naught
Distillery ide 3Headquarter g/m plant: 0.01t
through 0.79mg/m3 Headquarter
Co. Ltd. plant Zhangji Headquarter
chimney plant: 17.536t
plant≦50m plant: 0.33t
g/ m3
Gujing
plant、 Gujing Gujing plant:
Organize
Anbui Gujing plant Headquarter plant: 5.65t 21.056t
d 18.56mg/m3
Gujing Nitrogen Zhangji plant plant≦50m Zhangji Zhangji plant:
Waste gas discharge 3 28.35mg/m3 Naught
Distillery oxide 3Headquarter g/m plant: 0.90t 10.318t
through 22.46mg/m3
Co. Ltd. plant Zhangji Headquarter Headquarter
chimney
plant≦150 plant: 9.54t plant: 25.051t
mg/ m3
Organize
Anhui 1#furnace：
d
Longrui 1# furnace 2.62mg/m3 0.36t
Waste gas Smoke discharge 2 ≦10mg/m3 / Naught
Glass Co. 2# furnace 1.83mg/m3 2#furnace：
through
Ltd 0.57t
chimney
63Annual Report 2022
Organize
Anhui 1#furnace：
d
Longrui Sulfur Diox 1# furnace 18.06mg/m3 2.55t
Waste gas discharge 2 ≦50mg/m3 / Naught
Glass Co. ide 2# furnace 11.36mg/m3 2#furnace：
through
Ltd 3.78t
chimney
Organize
Anhui 1#furnace ：
d
Longrui Nitrogen 1# furnace 82.31mg/m3 11.50t
Waste gas discharge 2 ≦200mg/m3 / Naught
Glass Co. oxide 2# furnace 70.53mg/m3 2#furnace ：
through
Ltd 24.00t
chimney
Yellow
Crane
Tower Wine Indirectly Xianning
Waste water COD 1 15.89mg/L ≦400mg/L 0.156t 6t Naught
Industry discharge plant
(Xianning)
Co. Ltd
Yellow
Crane
Tower Wine Indirectly Xianning
Waste water NH3-N 1 0.40 mg/L ≤30mg/L 0.004t 1t Naught
Industry discharge plant
(Xianning)
Co. Ltd
Treatment of pollutants
1. Sewage treatment
(1) The sewage treatment capacity of the sewage treatment station of the headquarters of Anhui Gujing Distillery Co. Ltd 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 Baijiu Industry.
(2) The sewage treatment capacity of the sewage treatment station of Gujing Subsidiary under Anhui Gujing Distillery Co. Ltd 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 Baijiu Industry.
(3) The sewage treatment capacity of the sewage treatment station of Zhangji plant of Anhui Gujing Distillery Co. Ltd 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 Baijiu Industry.
(4) The production and living sewage of Anhui Longrui Glass Co. Ltd is discharged into the sewage treatment station of Zhangji
Plant under Anhui Gujing Distillery Company Limited and it is discharged after treatment and up to the standard.
(5) The design value of the sewage treatment capacity of the sewage treatment station of Yellow Crane Tower (Xianning) is 100 tons
per day and the actual average discharge value is 33 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 GB27631-2011 Discharge Standard of Water Pollutants for Fermentation Alcohol and Baijiu Industry.
64Annual Report 2022
2. Waste gas treatment
(1) The flue gas control facilities of thermal power stations of the Headquarters and Gujing Subsidiary of Anhui Gujing Distillery
Company Limited 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 Zhangji Plant under Anhui Gujing Distillery Company Limited 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 Anhui Longrui Glass Co. Ltd. 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 Headquarter of Anhui Gujing Distillery Company Limited and Gujing Branch finished product coding machine exhaust gas
treatment facilities are operating well. By adopting photocatalytic oxidation technology the Company’s flue gas emissions comply
with the Table 1 standard requirements of DB12/524-2014 Emission Standard for Industrial Enterprises Volatile Organic Compounds.
(5) The Headquarters of Anhui Gujing Distillery Company Limited and the odor treatment facilities of Zhangji Sewage Station are
operating well. By adopting technologies like photocatalytic oxidation and activated carbon adsorption and the Company’s emission
of exhaust gas meets the requirements of Table 2 of the Standard for Emission of Pollutants.In 2022 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
Accident which has been filed with Bureau of Ecology and Environment of Bozhou (File No. 341602-2021-006-H). Emergency plan
drills have been carried out as planned.Anhui Longrui Glass Co. Ltd has formulated the Emergency Plan of Anhui Longrui Glass Co. Ltd for Sudden Environmental
Pollution Accident 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 planned.Environmental self-monitoring scheme
Anhui Gujing Distillery Co. Ltd. has formulated the Self-Monitoring Scheme of Anhui Gujing Distillery Company Limited and
published it on the relevant website of Anhui Province.Anhui Longrui Glass Co. Ltd has formulated the Self-Monitoring Scheme of Anhui Longrui Glass Co. Ltd and published it on the
relevant website of Anhui Province.Input in environment governance and protection and payment of environmental protection tax
In 2022 the input in environment governance and protection for the Company and its subsidiaries was RMB69.2409 million and
payment of environmental protection tax was RMB142800.
65Annual Report 2022
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% year on year. Calculated on the basis of the coal consumption fire coal was conserved by approximately 3000
tons year on year converted to the standard coal of 2140 tons and carbon dioxide emission was reduced by approximately 5000
tons.
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.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
Naught
Other related environment protection information
Naught
II Social Responsibility
For details please refer to the Corporate Environmental Social and Governance (ESG) Report for 2022 disclosed by the Company
on the website Cninfo dated 29 April 2023.III Consolidation and Expansion of Poverty Alleviation Outcomes and Rural RevitalizationThe Company continued to conduct rural assistance based on the principle of “institutions target villages and individuals targetvillagers” paid regular care to residents in Wuma Town who had overcome poverty and timely supported the effective coordination
between the consolidation of the achievements of poverty alleviation and rural revitalization. The Company contributed to the rural
revitalization in Hongguang Village of Lixin County by regularly conducting visits investigations interviews and communication
activities. The Company organized employees to place orders for agricultural products such as Shanghai bok choy from Hongguang
Village of Lixin County grape from Xiao County “Qiu Yue” pear from Lide Town and walnut from Xinjiang as well as to make
donations to two poverty-stricken residents in Dancheng Town and Qingtuan Town of Guoyang County and the community canteens
for elderly people there.
66Annual Report 2022
Part VI Significant Events
I Fulfillment of Commitments
1. Commitments of the Company’s Actual 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
Date of
Type of Details of Term of
Commitment Promisor commitment Fulfillment
commitment commitment commitment
making
The Company
promised that
Yellow Crane
Tower
Distillery Co.Ltd. would Complete the
realize the performance
Anhui Gujing
Commitments made in acquisition operating commitment
Distillery Performance
documents or shareholding alteration revenue of 29 April 2016 Y2017-Y2021 of the
Company commitment
documents RMB204067 supplementar
Limited
5000 (tax y agreement
inclusive) and in 2022.the net profit
margin would
be not lower
than 11.00%
in 2022.Fulfilled on time Yes
Due to the force majeure in 2020 market trading activities were seriously affected
resulting in part of the terms of the original agreement unable to be fulfilled on schedule. To
this end upon consultation by all parties the Supplementary Agreement on Equity Transfer
Specific reasons for failing to fulfill
was entered into. For the commitments in respect of net sales interest rate net sales profit
commitments on time and plans for
and expected distributable profit of Yellow Crane Tower the assessment period has been
next step (if any)
extended by one year from the execution date of the Supplementary Agreement. In other
words the year 2020 will not be regarded as the assessment year and 2021 will be taken as
the fourth assessment year and 2022 as the fifth assessment year.
67Annual Report 2022
2. Where there had been an earnings forecast for an asset or project and the Reporting Period was still
within the forecast period explain why the forecast has been reached for the Reporting Period.□Applicable □ Not applicable
II Occupation of the Company’s Capital by the Controlling Shareholder or any of Its Related
Parties for Non-Operating Purposes
□Applicable □ Not applicable
III Irregularities in the Provision of Guarantees
□Applicable □ Not applicable
IV Explanations Given by the Board of Directors Regarding the Latest “Modified Opinion”
on the Financial Statements
□Applicable □ Not applicable
V Explanations Given by the Board of Directors the Supervisory Board and the Independent
Directors (if any) Regarding the Independent Auditor's “Modified Opinion” on the Financial
Statements of the Reporting Period
□Applicable □ Not applicable
VI YoY Changes to Accounting Policies Estimates or Correction of Material Accounting
Errors
□Applicable □ Not applicable
VII YoY Changes to the Scope of the Consolidated Financial Statements
□ Applicable □ Not applicable
Principal Stake（%）
Registered Nature of the
Name of subsidiary place of Make way
place business Directly Indirect
business
Business
Anhui Gujing Health Technology Co. Bozhou Bozhou combination not
Manufacturing 60.00
Ltd. under the same
Anhui Anhui
control
Business
Bozhou Bozhou Technological combination not
Anhui Maiqi Biotechnology Co. Ltd. 60.00
development under the same
Anhui Anhui
control
Anhui Yangshengtianxia Brand Hefei Hefei Advertising 60.00 Business
68Annual Report 2022
Principal Stake（%）
Registered Nature of the
Name of subsidiary place of Make way
place business Directly Indirect
business
Operation Co. Ltd. marketing combination not
Anhui Anhui
under the same
control
Business
Hainan Yangshengtianxia
Lingshui Lingshui Trade and combination not
Biotechnology Development Co. 60.00
Hainan Hainan business under the same
Ltd.control
Anhui Gujinggong Liquor Original
Bozhou Bozhou Incorporated with
Vintage Theme Hotel Management Hotel operation 100.00
investment
Co. Ltd. Anhui Anhui
Bozhou Bozhou Incorporated with
Anhui Anjie Technology Co. Ltd. Food testing 70.00
investment
Anhui Anhui
Huanggang Huanggang Trade and Incorporated with
Huanggang Junya Trading Co. Ltd. 51.00
Hubei Hubei business investment
VIII Engagement and Disengagement of Independent Auditor
Current independent auditor
Name of the domestic independent auditor RSM Certified Public Accountants (LLP)
The Company’s payment to the domestic independent
200.00
auditor (RMB’0000)
How many consecutive years the domestic independent
4
auditor has provided audit service for the Company
Names of the certified public accountants from the
domestic independent auditor writing signatures on the Zhang Liping Han Songliang Yang Fan
auditor’s report
How many consecutive years the certified public
accountants have provided audit service for the 2 years for Zhang Liping and Han Songliang 1 year for Yang Fan
Company
Indicate by tick mark whether the independent auditor was changed for the Reporting Period.□Yes □ No
Independent auditor financial advisor or sponsor engaged for the audit of internal controls:
□ Applicable □ Not applicable
In 2022 the Company engaged RSM Certified Public Accountants (LLP) as the internal control auditor
IX Possibility of Delisting after Disclosure of this Report
□Applicable □ Not applicable
69Annual Report 2022
X Insolvency and Reorganization
□Applicable □ Not applicable
XI Major Legal Matters
□Applicable □ Not applicable
XII Punishments and Rectifications
□Applicable □ Not applicable
XIII Credit Quality of the Company as well as Its Controlling Shareholder and Actual
Controller
□Applicable □ Not applicable
XIV Major Related-Party Transactions
1. Continuing Related-Party Transactions
□Applicable □ Not applicable
2. Related-Party Transactions Regarding Purchase or Sales of Assets or Equity Interests
□Applicable □ Not applicable
3. Related Transactions Regarding Joint Investments in Third Parties
□Applicable □ Not applicable
4. Credits and Liabilities with Related Parties
□Applicable □ Not applicable
5. Transactions with Related Finance Companies
□Applicable □ Not applicable
6. Transactions with Related Parties by Finance Companies Controlled by the Company
□Applicable □ Not applicable
70Annual Report 2022
7. Other Major Related-Party Transactions
□Applicable □ Not applicable
XV Major Contracts and Execution thereof
1. Entrustment Contracting and Leases
(1) Entrustment
□Applicable □ Not applicable
(2) Contracting
□Applicable □ Not applicable
(3) Leases
□Applicable □ Not applicable
2. Major Guarantees
□Applicable □ Not applicable
3. Cash Entrusted for Wealth Management
(1) Cash Entrusted for Wealth Management
□ Applicable □ Not applicable
Overviews of cash entrusted for wealth management during the Reporting Period
Unit: RMB'0000
Unrecovered
Unrecovered overdue amount
Specific type Capital resources Amount incurred Undue balance
overdue amount with provision for
impairment
Bank financial
Raised funds 442000.00 0.00 0.00 0.00
products
Bank financial
Self-owned funds 481500.00 155000.00 0.00 0.00
products
Others Self-owned funds 20000.00 20000.00 0.00 0.00
Total 943500.00 175000.00 0.00 0.00
Particulars of cash entrusted for wealth management with single significant amount or low security bad liquidity and no capital
preservation
71Annual Report 2022
Unit: RMB’0000
Amou Actual
Plan for
nt of recove Overvi
entrusted
Type Determin Annua Estim actual ry of Allowa ews of
Type Sta En Legal asset
Name of of ation l yield ate profit profit nce for events
of the Amo Capital rt d Use of proced manage
the the method of for profit or loss or loss impair and
truste unt resource d at da fund ures or ment in
trustee prod remunerat refere (if in in ment (if query
e e te not the
uct ion nce any) Report Report any) index
future or
ing ing (if any
not
Period Period
Purchas
ing new
shares
offline
product
1.2% of
Privat s with
DAPU products’
e fixed
Asset 2000 Self-fun net value
fund Fund earning 7.00% 0.00 Yes Yes
Manage 0 ded and 20%
mana s
ment of excess
ger reverse
earnings
repurch
ase of
nationa
l debt
and etc.
2000
Total -- -- -- -- -- -- 0.00 -- -- -- --
0
Whether there is the case where the principal cannot be recovered at maturity or other case which may cause impairment for cash
entrusted for wealth management
□Applicable □ Not applicable
(2) Entrusted Loans
□Applicable □ Not applicable
4. Other Major Contracts
□Applicable □ Not applicable
XVI Other Significant Events
□Applicable □ Not applicable
72Annual Report 2022
XVII Significant Events of Subsidiaries
□Applicable □ Not applicable
73Annual Report 2022
Part VII Share Changes and Shareholder Information
I Share Changes
1. Share Changes
Unit: share
Before Increase/decrease in the Reporting Period (+/-) After
Shares as
Shares as
dividend
Percentage dividend Percentag
Shares New issues converted Other Subtotal Shares
(%) converted e (%)
from capital
from profit
reserves
I. Restricted shares 25000000 4.73% -25000000 -25000000 0 0.00%
1. Shares held by the state
2. Shares held by state-owned
19000000.36%-1900000-190000000.00%
corporations
3. Shares held by other domestic
216000004.09%-21600000-2160000000.00%
investors
Among which: Shares held by
216000004.09%-21600000-2160000000.00%
domestic corporations
Shares held by
domestic individuals
4. Shares held by foreign investors 1500000 0.28% -1500000 -1500000 0 0.00%
Among which: Shares held by
15000000.28%-1500000-150000000.00%
foreign corporations
Shares held by
foreign individuals
50360000095.27%2500000025000000528600000100.00%
II. Non-restricted shares
38360000072.57%250000002500000040860000077.30%
1. RMB ordinary shares
2. Domestically listed foreign
12000000022.70%0012000000022.70%
shares
3. Overseas listed foreign shares
4. Other
74Annual Report 2022
III. Total shares 528600000 100.00% 0 0 528600000 100.00%
Reasons for share changes:
□ Applicable □ Not applicable
A total of 25000000 new shares of the Company non-publicly offered in 2021 were listed on Shenzhen Stock Exchange on 22 July
2021. They were relieved on 24 January 2022 and could be traded on the market thereafter. For details please refer to the Suggestive
Announcement on the Listing and Circulation of Restricted Non-publicly Offered Shares (2022-002) disclosed by the Company.Approval of share changes:
□ Applicable □ Not applicable
Transfer of share ownership:
□ 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
Unit: Share
Restricted shares Restricted shares Restricted shares Restricted shares
Name of the Restricted Restricted shares
amount at the increased of the relieved of the amount at the
shareholders reasons relieved date
period-begin period period period-end
JPMorgan Chase
Private
Bank National 750000 0 750000 0 22 January 2022
placement
Association
Guotai Junan Private
1125000 0 1125000 0 22 January 2022
Securities Co. Ltd. placement
E Fund
Private
Management Co. 12750000 0 12750000 0 22 January 2022
placement
Ltd.Caitong Fund
Private
Management Co. 1130000 0 1130000 0 22 January 2022
placement
Ltd.Taiping Fund
Private
Management 750000 0 750000 0 22 January 2022
placement
Company Limited
Fullgoal Fund
Private
Management Co. 1275000 0 1275000 0 22 January 2022
placement
Ltd.
75Annual Report 2022
Huatai Securities Private
775000 0 775000 0 22 January 2022
Co. Ltd. placement
Huatai Securities
Private
Asset Management 750000 0 750000 0 22 January 2022
placement
Co. Ltd.ICBC Credit Suisse
Private
Asset Management 2150000 0 2150000 0 22 January 2022
placement
Co. Ltd.Morgan Stanley &
Private
Co. International 750000 0 750000 0 22 January 2022
placement
Plc
China Life Asset
Private
Management Co. 750000 0 750000 0 22 January 2022
placement
Ltd.China Merchants
Private
Fund Management 2000000 0 2000000 0 22 January 2022
placement
Co. Ltd.China Universal
Private
Asset Management 45000 0 45000 0 22 January 2022
placement
Co. Ltd.Total 25000000 0 25000000 0 -- --
II. Issuance and Listing of Securities
1. Securities (Exclusive of Preferred Shares) Issued in the Reporting Period
□ Applicable □ Not applicable
2. Changes to Total Shares Shareholder Structure and Asset and Liability Structures
□ Applicable □ Not applicable
3. Existing Staff-Held Shares
□ Applicable □ Not applicable
III Shareholders and Actual Controller
1. Shareholders and Their Shareholdings at the Period-End
Unit: share
Number of Number of Number of Number of
240832273100
ordinary ordinary preferred preferred
76Annual Report 2022
shareholders shareholders at shareholders with shareholders
the month-end resumed voting with resumed
prior to the rights (if any) (see voting rights at
disclosure of this note 8) the month-end
Report prior to the
disclosure of this
Report (if any)
(see note 8)
5% or greater shareholders or top 10 shareholders
Increas Shares in pledge marked or
e/decre frozen
Shareholdi Total shares ase in Restricted
Name of Nature of Non-restricte
ng held at the the shares
shareholder shareholder d shares held
percentage period-end Reporti held Status Shares
ng
Period
ANHUI GUJING
GROUP State-owned
51.21% 270701422 270701422 In pledge 114000000
COMPANY legal person
LIMITED
BANK OF
CHINA-CHINA
MERCHANTS
CHINA
SECURITIES
Other 2.23% 11789208 11789208
BAIJIU INDEX
CLASSIFICATIO
N SECURITIES
INVESTMENT
FUND
GAOLING Foreign legal
2.02%1068422210684222
FUNDL.P. person
INDUSTRIAL
AND
COMMERCIAL
BANK OF CHINA
LIMITED-
Other 1.89% 9999951 9999951
INVESCO GREAT
WALL
EMERGING
GROWTH
HYBRID
77Annual Report 2022
SECURITIES
INVESTMENT
FUND
AGRICULTURAL
BANK OF CHINA
－ E FUND
CONSUMPTION
Other 1.89% 9989282 9989282
SECTOR STOCK
SECURITIES
INVESTMENT
FUND
CHINA
INTERNATIONA
L CAPITAL Foreign legal
1.39%73563087356308
CORPORATION person
HONG KONG
SECURITIES LTD
HONG KONG
SECURITIES Foreign legal
1.35%71389197138919
CLEARING person
COMPANY LTD.UBS (LUX)
EQUITY FUND -
Foreign legal
CHINA 1.30% 6896661 6896661
person
OPPORTUNITY
(USD)
BANK OF
CHINA-
INVESCO GREAT
WALL DINGYI
Other 0.95% 5017603 5017603
HYBRID
SECURITIES
INVESTMENT
FUND (LOF)
GREENWOODS
Foreign legal
CHINA ALPHA 0.87% 4614326 4614326
person
MASTER FUND
Strategic investor or general legal
person becoming a top-10 ordinary
N/A
shareholder due to rights issue (if
any) (see note 3)
Related or acting-in-concert parties Among the shareholders above the Company’s controlling shareholder—Anhui Gujing Group
78Annual Report 2022
among the shareholders above Company Limited—is not a related party of other shareholders; nor are they parties acting in
concert as defined in the Administrative Measures on Information Disclosure of Changes in
Shareholding of Listed Companies. As for the other shareholders the Company does not know
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 10)
Top 10 non-restricted shareholders
Shares by type
Name of shareholder Non-restricted shares held at the period-end
Type Shares
ANHUI GUJING GROUP RMB-denominate
270701422270701422
COMPANY LIMITED d ordinary share
BANK OF CHINA-CHINA
MERCHANTS CHINA
RMB-denominate
SECURITIES BAIJIU INDEX 11789208 11789208
d ordinary share
CLASSIFICATION SECURITIES
INVESTMENT FUND
Domestically
GAOLING FUNDL.P. 10684222 l isted foreign 10684222
share
INDUSTRIAL AND
COMMERCIAL BANK OF
CHINA LIMITED- INVESCO RMB-denominate
99999519999951
GREAT WALL EMERGING d ordinary share
GROWTH HYBRID SECURITIES
INVESTMENT FUND
AGRICULTURAL BANK OF
CHINA － E FUND
RMB-denominate
CONSUMPTION SECTOR 9989282 9989282
d ordinary share
STOCK SECURITIES
INVESTMENT FUND
CHINA INTERNATIONAL Domestically
CAPITAL CORPORATION 7356308 l isted foreign 7356308
HONG KONG SECURITIES LTD share
79Annual Report 2022
HONG KONG SECURITIES RMB-denominate
71389197138919
CLEARING COMPANY LTD. d ordinary share
Domestically
UBS (LUX) EQUITY FUND -
6896661 listed foreign 6896661
CHINA OPPORTUNITY (USD)
share
BANK OF CHINA- INVESCO
GREAT WALL DINGYI HYBRID RMB-denominate
50176035017603
SECURITIES INVESTMENT d ordinary share
FUND (LOF)
Domestically
GREENWOODS CHINA ALPHA
4614326 listed foreign 4614326
MASTER FUND
share
Among the shareholders above the Company’s controlling shareholder—Anhui Gujing Group
Related or acting-in-concert parties
Company Limited—is not a related party of other shareholders; nor are they parties acting in
among top 10 unrestricted public
concert as defined in the Administrative Measures on Information Disclosure of Changes in
shareholders as well as between
Shareholding of Listed Companies. As for the other shareholders the Company does not know
top 10 unrestricted public
whether they are related parties or whether they belong to parties acting in concert as defined
shareholders and top 10
in the Administrative Measures on Information Disclosure of Changes in Shareholding of
shareholders
Listed 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 31 December 2022 702600 lent
trading (if any) (see note 4) shares 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.□ Yes □ No
No such cases in the Reporting Period.
2. Controlling Shareholder
Nature of the controlling shareholder: controlled by a local state-owned legal person
Type of the controlling shareholder: legal person
Legal
Name of controlling Unified social credit
representative/person Date of establishment Principal activity
shareholder code
in charge
Making beverage
ANHUI GUJING GROUP
Liang Jinhui 16 January 1995 91341600151947437P construction materials and
COMPANY LIMITED
plastic products etc.Controlling shareholder’s
As of 31 December 2022 the controlling shareholder ANHUI GUJING GROUP COMPANY
holdings in other listed
LIMITED directly holds 130000000 shares of Huaan Securities Co. Ltd. owning the proportion of
companies at home or abroad
shares of 2.77%.in the Reporting Period
80Annual Report 2022
Change of the controlling shareholder in the Reporting Period:
□Applicable □ Not applicable
No such cases in the Reporting Period.
3. Information about the Actual Controller and Acting-in-concert Parties
Nature of the actual controller: Local administrator for state-owned assets
Type of the actual controller: legal person
Legal
Date of Unified social credit
Name of actual controller representative/person Principal activity
establishment code
in charge
State-owned Assets Supervision
and Administration
Zhao Liang N/A 113416007316875206 N/A
Commission of the People’s
Government of Bozhou
Other listed companies at home
or abroad controlled by the
N/A
actual controller in the
Reporting Period
Change of the actual controller during the Reporting Period:
□Applicable □ Not applicable
No such cases in the Reporting Period.Ownership and control relations between the actual controller and the Company:
Indicate by tick mark whether the actual controller controls the Company via trust or other ways of asset management.
81Annual Report 2022
□Applicable □ Not applicable
4. Number of Accumulative Pledged Shares held by the Company’s Controlling Shareholder or the Largest
Shareholder as well as Its Acting-in-Concert Parties Accounts for 80% of all shares of the Company held
by Them
□Applicable □ Not applicable
5. Other 10% or Greater Corporate Shareholders
□Applicable □ Not applicable
6. Limitations on Shareholding Decrease by the Company’s Controlling Shareholder Actual Controller
Reorganizer and Other Commitment Makers
□Applicable □ Not applicable
IV Specific Implementation of Share Repurchase during the Reporting Period
Progress on any share repurchase
□Applicable □ Not applicable
Progress on reducing the repurchased shares by means of centralized bidding
□Applicable □ Not applicable
82Annual Report 2022
Part VIII Preference Shares
□ Applicable □ Not applicable
No preference shares in the Reporting Period.
83Annual Report 2022
Part IX Bonds
□ Applicable □ Not applicable
84Annual Report 2022
Part X Financial Statements
I Independent Auditor’s Report
Type of auditor’s opinion Unmodified unqualified opinion
Date of signing the auditor’s report 28 April 2023
Name of the auditor RSM China
No. of the auditor’s report Rongcheng audit character [2023] 518Z0295
Name of CPA Zhang Liping Han Songliang Yang Fan
Text of the Auditor’s Report
To the Shareholders of Anhui Gujing Distillery Company Limited:
I. Opinion
We have audited the financial statements of Anhui Gujing Distillery Co. Ltd. (hereafter referred to as “Anhui Gujing”) which
comprises the consolidated and the parent company’s statement of financial position as at 31 December 2022 the consolidated and
the parent company’s statement of profit or loss and other comprehensive income the consolidated and the parent company’s
statement of cash flows the consolidated and the parent company’s statement of changes in equity for the year then ended and the
notes to the financial statements.In our opinion the accompanying Anhui Gujing’s financial statements present fairly in all material respects the consolidated and the
company’s financial position as at 31 December 2022 and of their financial performance and cash flows for the year then ended in
accordance with Accounting Standards for Business Enterprises.II. Basis for Opinion
We conducted our audit in accordance with Chinese Standards on Auditing (CSAs). Our responsibilities under those standards are
further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent
of Anhui Gujing in accordance with the Code of Ethics for Professional Accountants of the Chinese Institute of Certified Public
Accountants and we have fulfilled our other ethical responsibilities. We believe that the audit evidence we obtained is sufficient and
appropriate to provide a basis for our opinion.III. Key Audit Matters
Key audit matters are those matters that in our professional judgment were of the most significance in our audit of the financial
statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole and
informing our opinion thereon and we do not provide a separate opinion on these matters.(I) Revenue recognition
1. Description
Refer to notes to the consolidated financial statements "3. 27. Revenue" and "5. 38. Revenue and Cost of Sales ".In 2022 the Company achieved revenue of RMB16.713 billion an increase of 25.95% compared with the same period in 2021. As
revenue is one of the key performance indicators of the company there may be the risk of material misstatement in whether the
revenue is recognized in an appropriate accounting period. Therefore we regard revenue recognition as a key audit matter.
85Annual Report 2022
2. Audit response
Our procedures for revenue recognition include:
(1) Understand the internal control process design related to the sales business and execute the walk-through test perform the
control test on the identified key control points;
(2) Interview with the management check the samples of sales contract analyze the significant risk and reward transferring point
related to revenue recognition of baijiu sales and then evaluate whether the company's sales revenue recognition policy is
reasonable;
(3) Sampling inspection of supporting documents related to baijiu sales revenue recognition including sales orders sales invoices
outbound orders etc.;
(4) Compared with the baijiu sales data of other enterprises in the same industry compared the liquor sales data of the last period
with the current period analyzed the overall rationality of revenue and gross margin;
(5) For the baijiu sales revenue recognized before and after the balance sheet date select samples to check the sales orders sales
invoices outbound orders etc. in order to evaluate whether the sales revenue is recorded in an appropriate accounting period;
(6) Confirm the amount of baijiu sold and the closing balance of the advance payment to the main distributor by sending
confirmation letter.(II) Accuracy of inventory balances
1. Description
Refer to notes to the consolidated financial statements "3 12. Inventory" and "5. 7. Inventory".Anhui Gujing has a large inventory balance and needs to maintain an appropriate level of inventory to meet future market or
production demand. The inventory balance accounts for 20.34% of the Company's total assets and most of the inventory is
semi-finished products and work in progress products. As the most important asset of baijiu production enterprises inventory has a
high balance at the end of the year and a large proportion of the total assets. Therefore we regard the accuracy of the Company's
inventory balance as a key audit matter.
2. Audit response
Our procedures for the accuracy of inventory balances include:
(1) Understand the internal control process design related to inventory business and carry out walk-through test carry out control
tests for identified key control points;
(2) Obtain the stocktaking plan and stocktaking results of the company understand the stocktaking methods and review procedures of
the company and supervise the stocktaking;
(3) Understand the company's inventory cost accounting method select several months of cost calculation sheet to review and select
the main categories of inventory to carry out valuation test;
(4) To understand the provision method of the company's inventory impairment evaluate the appropriateness of the provision method
and review whether the provision amount is correct;
(5) Perform analytical procedures and compare with companies in the same industry.
IV. Other information
Management of Anhui Gujing is responsible for the other information. The other information comprises the information included in
the Annual Report of Anhui Gujing for the year of 2022 but does not include the financial statements and our auditor’s report
thereon.Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion
thereon.In connection with our audit of the financial statements our responsibility is to read the other information and in doing so consider
86Annual Report 2022
whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or
otherwise appears to be materially misstated.If based on the work we have performed we conclude that there is a material misstatement of this other information we are required
to report that fact. We have nothing to report in this regard.V. Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management of Anhui Gujing is responsible for the preparation and fair presentation of the financial statements in accordance with
Accounting Standards of Business Enterprises and for the design implementation and maintenance of such internal control as
management determines is necessary to enable the preparation of financial statements that are free from material misstatement
whether due to fraud or error.In preparing the financial statements management is responsible for assessing Anhui Gujing’s ability to continue as a going concern
disclosing as applicable matters related to going concern and using the going concern basis of accounting unless management either
intends to liquidate Anhui Gujing or to cease operations or have no realistic alternative but to do so.Those charged with governance are responsible for overseeing Anhui Gujing’s financial reporting process.VI. Auditor’s Responsibilities for the Audit of the Financial Statements
Our Objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement whether due to fraud or error and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high
level of assurance but is not a guarantee that an audit conducted in accordance with CSAs will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if individually or in the aggregate they could
reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.As part of an audit in accordance with CSAs we exercise professional judgment and maintain professional skepticism throughout the
audit. We also:
1. Identify and assess the risks of material misstatement of the financial statements whether due to fraud or error design and perform
audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error as fraud
may involve collusion forgery intentional omissions misrepresentations or the override of internal control.
2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances.
3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures
made by management.
4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and based on the audit evidence
obtained whether a material uncertainty exists related to events or conditions that may cast significant doubt on Anhui Gujing’s
ability to continue as a going concern. If we conclude that a material uncertainty exists we are required to draw attention in our
auditor’s report to the related disclosures in the financial statements or if such disclosures are inadequate to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However future events or conditions may
cause Anhui Gujing to cease to continue as a going concern.
5. Evaluate the overall presentation structure and content of the financial statements and whether the financial statements represent
the underlying transactions and events in a manner that achieves fair presentation.
6. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within Anhui
Gujing to express an opinion on the financial statements. We are responsible for the direction supervision and performance of the
group audit. We remain solely responsible for our audit opinion.We communicate with those charged with governance regarding among other matters the planned scope and timing of the audit and
significant audit findings including any significant deficiencies in internal control that we identify during our audit.
87Annual Report 2022
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding
independence and to communicate with them all relationships and other matters that may reasonably be thought to bear on our
independence and where applicable related safeguards.From the matters communicated with those charged with governance we determine those matters that were of most significance in
the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our
auditor’s report unless law or regulation precludes public disclosure about the matter or when in extremely rare circumstances we
determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.RSM China CPA LLP [Name of CPA]：Zhang Liping
China·Beijing [Name of CPA]：Han Songliang
[Name of CPA]：Yang Fan
28 April 2023
88Annual Report 2022
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
31 December 2022
Unit: RMB
Item 31 December 2022 1 January 2022
Current assets:
Monetary assets 13772561141.30 11924922771.76
Settlement reserve
Interbank loans granted
Held-for-trading financial assets 1782687769.66 2661103876.68
Derivative financial assets
Notes receivable
Accounts receivable 62688668.94 89005804.17
Accounts receivable financing 217419441.32 545204103.42
Prepayments 233995661.69 156570970.99
Premiums receivable
Reinsurance receivables
Receivable reinsurance contract
reserve
Other receivables 73337415.74 71753212.24
Including: Interest receivable
Dividends receivable
Financial assets purchased under
resale agreements
Inventories 6058106090.88 4663456672.30
Contract assets 1855188.15 0.00
Assets held for sale
Current portion of non-current assets
Other current assets 125568725.51 178222222.56
Total current assets 22328220103.19 20290239634.12
Non-current assets:
Loans and advances to customers
Investments in debt obligations
Investments in other debt obligations
Long-term receivables
Long-term equity investments 10154235.98 5312600.78
89Annual Report 2022
Investments in other equity
56447789.9454542418.50
instruments
Other non-current financial assets
Investment property 13396881.96 4075801.06
Fixed assets 2741844586.30 1984063975.87
Construction in progress 2454703251.44 1064134904.21
Productive living assets
Oil and gas assets
Right-of-use assets 32562171.10 43927228.97
Intangible assets 1108125157.05 1063468842.61
Development costs
Goodwill 561364385.01 561364385.01
Long-term prepaid expense 51012977.31 55908338.03
Deferred income tax assets 425120227.37 283828000.24
Other non-current assets 6870532.00 7220318.40
Total non-current assets 7461602195.46 5127846813.68
Total assets 29789822298.65 25418086447.80
Current liabilities:
Short-term borrowings 83232176.31 30035138.89
Borrowings from the central bank
Interbank loans obtained
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable 695740000.00 127114336.16
Accounts payable 2054063559.15 1020437321.89
Advances from customers
Contract liabilities 826636478.35 1825447705.85
Financial assets sold under repurchase
agreements
Customer deposits and interbank
deposits
Payables for acting trading of
securities
Payables for underwriting of securities
Employee benefits payable 795138305.63 709671787.74
Taxes payable 1205028130.02 873270986.71
Other payables 3261763838.80 2280937078.12
Including: Interest payable
Dividends payable
Handling charges and commissions
payable
90Annual Report 2022
Reinsurance payables
Liabilities directly associated with
assets held for sale
Current portion of non-current
42237345.1113190399.32
liabilities
Other current liabilities 1044664441.58 799522562.60
Total current liabilities 10008504274.95 7679627317.28
Non-current liabilities:
Insurance contract reserve
Long-term borrowings 44944737.91 172356255.83
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities 18631395.93 28107223.18
Long-term payables
Long-term employee benefits payable
Provisions
Deferred income 103714978.95 91101512.05
Deferred income tax liabilities 281173154.70 194033257.93
Other non-current liabilities
Total non-current liabilities 448464267.49 485598248.99
Total liabilities 10456968542.44 8165225566.27
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 408739.61 -2735058.19
Specific reserve
Surplus reserves 269402260.27 269402260.27
General reserve
Retained earnings 11497599306.54 9517374574.46
Total equity attributable to owners of the
18520757973.5216537389443.64
Company as the parent
Non-controlling interests 812095782.69 715471437.89
Total owners’ equity 19332853756.21 17252860881.53
Total liabilities and owners’ equity 29789822298.65 25418086447.80
Legal representative: Liang Jinhui The Company’s chief accountant: Zhu Jiafeng
91Annual Report 2022
Head of the Company’s financial department: Zhu Jiafeng
2. Balance Sheet of the Company as the Parent
Unit: RMB
Item 31 December 2022 1 January 2022
Current assets:
Monetary assets 7338284192.52 6701949499.06
Held-for-trading financial assets 1267195966.38 2611037013.67
Derivative financial assets
Notes receivable
Accounts receivable
Accounts receivable financing 233465242.96 269471899.40
Prepayments 39599180.34 85579299.60
Other receivables 202279154.63 290480736.49
Including: Interest receivable
Dividends receivable
Inventories 4670562760.80 3667928608.55
Contract assets
Assets held for sale
Current portion of non-current assets
Other current assets 63929024.28 142527867.24
Total current assets 13815315521.91 13768974924.01
Non-current assets:
Investments in debt obligations
Investments in other debt obligations
Long-term receivables
Long-term equity investments 1586749613.68 1547415641.38
Investments in other equity
instruments
Other non-current financial assets
Investment property 13396881.96 4075801.06
Fixed assets 1715114776.31 1375344792.42
Construction in progress 1597185086.35 692315065.86
Productive living assets
Oil and gas assets
Right-of-use assets 31004490.39 40811867.62
Intangible assets 483601950.48 437919619.31
Development costs
Goodwill
92Annual Report 2022
Long-term prepaid expense 22817228.71 41319866.13
Deferred income tax assets 28512224.61 28775933.22
Other non-current assets
Total non-current assets 5478382252.49 4167978587.00
Total assets 19293697774.40 17936953511.01
Current liabilities:
Short-term borrowings
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable
Accounts payable 950887301.03 672018963.99
Advances from customers
Contract liabilities 3432162.83 23438890.01
Employee benefits payable 276482563.00 160404100.41
Taxes payable 548241724.13 473881384.92
Other payables 726494649.90 632857371.46
Including: Interest payable
Dividends payable
Liabilities directly associated with
assets held for sale
Current portion of non-current
10574121.1211633827.85
liabilities
Other current liabilities 16403036.11 15080461.56
Total current liabilities 2532515558.12 1989315000.20
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities 18631395.93 26476999.19
Long-term payables
Long-term employee benefits payable
Provisions
Deferred income 38926909.02 27176546.19
Deferred income tax liabilities 43726162.12 21499021.71
Other non-current liabilities
Total non-current liabilities 101284467.07 75152567.09
Total liabilities 2633800025.19 2064467567.29
Owners’ equity:
Share capital 528600000.00 528600000.00
Other equity instruments
93Annual Report 2022
Including: Preferred shares
Perpetual bonds
Capital reserves 6176504182.20 6176504182.20
Less: Treasury stock
Other comprehensive income -529354.77 -1385311.78
Specific reserve
Surplus reserves 264300000.00 264300000.00
Retained earnings 9691022921.78 8904467073.30
Total owners’ equity 16659897749.21 15872485943.72
Total liabilities and owners’ equity 19293697774.40 17936953511.01
3. Consolidated Income Statement
Unit: RMB
Item 2022 2021
1. Revenue 16713234153.52 13269826266.04
Including: Operating revenue 16713234153.52 13269826266.04
Interest revenue
Insurance premium income
Handling charge and
commission income
2. Costs and expenses 12315714961.34 10213542938.71
Including: Cost of sales 3816322045.01 3304077011.92
Interest costs
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 2824059322.03 2031815205.67
Selling expense 4668185055.13 4008075483.08
Administrative expense 1166780389.23 1022181419.74
R&D expense 56667203.01 51449475.36
Finance costs -216299053.07 -204055657.06
Including: Interest costs 5679645.21 7036575.14
Interest
221450532.78210634326.57
revenue
94Annual Report 2022
Add: Other income 46721259.52 55269628.48
Return on investment (“-” for loss) -10804384.45 4692379.15
Including: Share of profit or loss
941635.20397024.95
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 (“-”
29149125.307225961.17
for loss)
Credit impairment loss (“-” for
403221.49-6492841.44
loss)
Asset impairment loss (“-” for
-11144233.30-16738156.85
loss)
Asset disposal income (“-” for
886286.451368763.13
loss)
3. Operating profit (“-” for loss) 4452730467.19 3101609060.97
Add: Non-operating income 50767945.38 80358158.20
Less: Non-operating expense 33006363.84 10673284.61
4. Profit before tax (“-” for loss) 4470492048.73 3171293934.56
Less: Income tax expense 1218657884.24 796962295.09
5. Net profit (“-” for net loss) 3251834164.49 2374331639.47
5.1 By operating continuity
5.1.1 Net profit from continuing
3251834164.492374331639.47
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 3143144732.08 2297894413.25
parent
5.2.1 Net profit attributable to
108689432.4176437226.22
non-controlling interests
6. Other comprehensive income net of
3878826.81-2702255.36
tax
Attributable to owners of the
3143797.80-2735058.19
Company as the parent
6.1 Items that will not be
857417.15312174.31
reclassified to profit or loss
6.1.1 Changes caused by
95Annual Report 2022
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
857417.15312174.31
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
2286380.65-3047232.50
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 2286380.65 -3047232.50
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
735029.0132802.83
interests
7. Total comprehensive income 3255712991.30 2371629384.11
Attributable to owners of the
3146288529.882295159355.06
Company as the parent
Attributable to non-controlling
109424461.4276470029.05
interests
8. Earnings per share
8.1 Basic earnings per share 5.95 4.45
8.2 Diluted earnings per share 5.95 4.45
Legal representative: Liang Jinhui The Company’s chief accountant: Zhu Jiafeng
Head of the Company’s financial department: Zhu Jiafeng
96Annual Report 2022
4. Income Statement of the Company as the Parent
Unit: RMB
Item 2022 2021
1. Operating revenue 8436854425.33 6861927173.56
Less: Cost of sales 3150072247.44 2685143091.93
Taxes and surcharges 2427479945.90 1709930259.58
Selling expense 214565182.08 57374585.54
Administrative expense 828752411.76 638615142.40
R&D expense 24437179.22 24789072.53
Finance costs -146277487.29 -146376995.59
Including: Interest expense 1571025.57 2057303.09
Interest revenue 147476627.30 148286685.55
Add: Other income 9829030.03 12884387.21
Return on investment (“-” for loss) 516451555.38 740925389.76
Including: Share of profit or loss
769710.250.00
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 (“-”
13657322.027159098.16
for loss)
Credit impairment loss (“-” for
-259373.201569395.15
loss)
Asset impairment loss (“-” for
-9004878.11-9447015.13
loss)
Asset disposal income (“-” for
448814.151217988.71
loss)
2. Operating profit (“-” for loss) 2468947416.49 2646761261.03
Add: Non-operating income 32757400.28 45118776.84
Less: Non-operating expense 22709736.17 5010863.26
3. Profit before tax (“-” for loss) 2478995080.60 2686869174.61
Less: Income tax expense 529519232.12 479562073.53
4. Net profit (“-” for net loss) 1949475848.48 2207307101.08
4.1 Net profit from continuing
1949475848.482207307101.08
operations (“-” for net loss)
4.2 Net profit from discontinued
operations (“-” for net loss)
5. Other comprehensive income net of 855957.01 -1385311.78
97Annual Report 2022
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
855957.01-1385311.78
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 855957.01 -1385311.78
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 1950331805.49 2205921789.30
7. Earnings per share
7.1 Basic earnings per share 3.69 4.18
7.2 Diluted earnings per share 3.69 4.18
5. Consolidated Cash Flow Statement
Unit: RMB
Item 2022 2021
1. Cash flows from operating activities:
Proceeds from sale of commodities 17348587209.08 15533370561.71
98Annual Report 2022
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 45693991.49 10939461.17
Cash generated from other operating
1235322755.091154331493.95
activities
Subtotal of cash generated from
18629603955.6616698641516.83
operating activities
Payments for commodities and
3108670928.122476695652.35
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
commissions paid
Policy dividends paid
Cash paid to and for employees 3185038494.67 2764878720.68
Taxes paid 5307487437.35 3745603413.41
Cash used in other operating activities 3920492516.04 2457155602.60
Subtotal of cash used in operating
15521689376.1811444333389.04
activities
Net cash generated from/used in 3107914579.48 5254308127.79
99Annual Report 2022
operating activities
2. Cash flows from investing activities:
Proceeds from disinvestment 8260205000.00 685446809.53
Return on investment 221663163.09 27570964.03
Net proceeds from the disposal of
fixed assets intangible assets and other 1962955.22 8510785.59
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
8483831118.31721528559.15
investing activities
Payments for the acquisition of fixed
assets intangible assets and other 1580221258.51 578154171.08
long-lived assets
Payments for investments 1613900000.00 8939702000.00
Net increase in pledged loans granted
Net payments for the acquisition of
20998589.1965123508.25
subsidiaries and other business units
Cash used in other investing activities
Subtotal of cash used in investing
3215119847.709582979679.33
activities
Net cash generated from/used in
5268711270.61-8861451120.18
investing activities
3. Cash flows from financing activities:
Capital contributions received 6000000.00 4962827169.81
Including: Capital contributions by
6000000.005280000.00
non-controlling interests to subsidiaries
Borrowings raised 69900000.00 202510000.00
Cash generated from other financing
activities
Subtotal of cash generated from
75900000.005165337169.81
financing activities
Repayment of borrowings 177180000.00 357436327.65
Interest and dividends paid 1211279690.92 760093886.59
Including: Dividends paid by
41909624.650.00
subsidiaries to non-controlling interests
Cash used in other financing activities 16242902.55 20017478.32
Subtotal of cash used in financing
1404702593.471137547692.56
activities
Net cash generated from/used in
-1328802593.474027789477.25
financing activities
100Annual Report 2022
4. Effect of foreign exchange rates
changes on cash and cash equivalents
5. Net increase in cash and cash
7047823256.62420646484.86
equivalents
Add: Cash and cash equivalents
6057550178.605636903693.74
beginning of the period
6. Cash and cash equivalents end of the
13105373435.226057550178.60
period
6. Cash Flow Statement of the Company as the Parent
Unit: RMB
Item 2022 2021
1. Cash flows from operating activities:
Proceeds from sale of commodities
9518152761.406255940908.12
and rendering of services
Tax rebates 2094742.52 136317.05
Cash generated from other operating
1926489095.981011350323.14
activities
Subtotal of cash generated from
11446736599.907267427548.31
operating activities
Payments for commodities and
2746340485.311619308652.04
services
Cash paid to and for employees 1081372305.15 893957837.80
Taxes paid 3459006681.54 2421277549.92
Cash used in other operating activities 2992541464.72 257177069.10
Subtotal of cash used in operating
10279260936.725191721108.86
activities
Net cash generated from/used in
1167475663.182075706439.45
operating activities
2. Cash flows from investing activities:
Proceeds from disinvestment 7606205000.00 546849809.53
Return on investment 665639717.09 43845258.48
Net proceeds from the disposal of
fixed assets intangible assets and other 2031105.25 6000032.69
long-lived assets
Net proceeds from the disposal of
0.0013673346.37
subsidiaries and other business units
Cash generated from other investing
activities
Subtotal of cash generated from
8273875822.34610368447.07
investing activities
Payments for the acquisition of fixed 1411407863.94 793665435.61
101Annual Report 2022
assets intangible assets and other
long-lived assets
Payments for investments 1063900000.00 8151105000.00
Net payments for the acquisition of
21225000.00440643400.00
subsidiaries and other business units
Cash used in other investing activities
Subtotal of cash used in investing
2496532863.949385413835.61
activities
Net cash generated from/used in
5777342958.40-8775045388.54
investing activities
3. Cash flows from financing activities:
Capital contributions received 0.00 4957547169.81
Borrowings raised
Cash generated from other financing
activities
Subtotal of cash generated from
0.004957547169.81
financing activities
Repayment of borrowings
Interest and dividends paid 1164491025.57 755400000.00
Cash used in other financing activities 13992902.55 18667478.32
Subtotal of cash used in financing
1178483928.12774067478.32
activities
Net cash generated from/used in
-1178483928.124183479691.49
financing activities
4. Effect of foreign exchange rates
changes on cash and cash equivalents
5. Net increase in cash and cash
5766334693.46-2515859257.60
equivalents
Add: Cash and cash equivalents
1571949499.064087808756.66
beginning of the period
6. Cash and cash equivalents end of the
7338284192.521571949499.06
period
102Annual Report 2022
7. Consolidated Statements of Changes in Owners’ Equity
2022
Unit: RMB
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 ng interests equity Perpetu Treasur comprehensi c Subtotal
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 prior 00 10 9 27 6 64 89 53
year
Add:
Adjustment
for change in
accounting
policy
Adjustment
for
correction of
previous
error
103Annual Report 2022
Adjustment
for business
combination
under
common
control
Other
adjustments
2. Balance as
at the 528600000. 6224747667. -2735058.1 269402260. 9517374574.4 16537389443. 715471437. 17252860881.beginning of 00 10 9 27 6 64 89 53
the year
3. Increase/
decrease in
1980224732.01983368529.896624344.82079992874.6
the period 3143797.80
8808
(“-” for
decrease)
3.1 Total
3143144732.03146288529.8109424461.3255712991.3
comprehensi 3143797.80
88420
ve income
3.2
Capital
29109508.0
increased 29109508.03
3
and reduced
by owners
3.2.1
Ordinary
6000000.006000000.00
shares
increased by
104Annual Report 2022
owners
3.2.2
Capital
increased by
holders of
other equity
instruments
3.2.3
Share-based
payments
included in
owners’
equity
3.2.423109508.0
23109508.03
Other 3
3.3 Profit -1162920000. -1162920000. -41909624.6 -1204829624.
distribution 00 00 5 65
3.3.1
Appropriatio
n to surplus
reserves
3.3.2
Appropriatio
n to general
reserve
3.3.3
-1162920000.-1162920000.-41909624.6-1204829624.Appropriatio
0000565
n to owners
105Annual Report 2022
(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
3.4.4
106Annual Report 2022
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
528600000.6224747667.269402260.11497599306.18520757973.812095782.19332853756.
at the end of 408739.61
00102754526921
the period
107Annual Report 2022
2021
Unit: RMB
2021
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 503600000. 1295405592. 256902260. 7987380161. 10043288013. 405562772. 10448850786.the prior 00 25 27 21 73 65 38
year
Add:
Adjustment
for change in
accounting
policy
Adjustment
for
correction of
previous
error
Adjustment
for business
combination
108Annual Report 2022
under
common
control
Other
adjustments
2. Balance as
at the 503600000. 1295405592. 256902260. 7987380161. 10043288013. 405562772. 10448850786.beginning of 00 25 27 21 73 65 38
the year
3. Increase/
decrease in
25000000.04929342074.-2735058.112500000.01529994413.6494101429.9309908665.6804010095.1
the period
08590251245
(“-” for
decrease)
3.1 Total
-2735058.12297894413.2295159355.076470029.02371629384.1
comprehensi
925651
ve income
3.2
Capital
25000000.04929342074.4954342074.8233438636.5187780711.0
increased
0855194
and reduced
by owners
3.2.1
Ordinary
25000000.04929342074.4954342074.84954342074.8
shares
08555
increased by
owners
3.2.2
Capital
109Annual Report 2022
increased by
holders of
other equity
instruments
3.2.3
Share-based
payments
included in
owners’
equity
3.2.4233438636.
233438636.19
Other 19
3.3 Profit 12500000.0 -767900000.0
-755400000.00-755400000.00
distribution 0 0
3.3.1
Appropriatio 12500000.0
-12500000.00
n to surplus 0
reserves
3.3.2
Appropriatio
n to general
reserve
3.3.3
Appropriatio
n to owners -755400000.0
-755400000.00-755400000.00
(or 0
shareholders
)
110Annual Report 2022
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
3.4.4
Changes in
defined
benefit
schemes
transferred to
111Annual Report 2022
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.-2735058.1269402260.9517374574.16537389443.715471437.17252860881.
at the end of
001092746648953
the period
8. Statements of Changes in Owners’ Equity of the Company as the Parent
2022
Unit: RMB
112Annual Report 2022
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
528600000.006176504182.20-1385311.78264300000.008904467073.3015872485943.72
of the 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 year
3. Increase/ decrease in
the period (“-” for 855957.01 786555848.48 787411805.49
decrease)
3.1 Total
855957.011949475848.481950331805.49
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
113Annual Report 2022
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)
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
114Annual Report 2022
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
4. Balance as at the end
528600000.006176504182.20-529354.77264300000.009691022921.7816659897749.21
of the period
2021
Unit: RMB
2021
Other equity instruments Less: Other
Item Specific Surplus Retained Total owners’
Share capital Preferred Perpetual Capital reserves Treasury comprehensive Other
Other reserve reserves earnings equity
shares bonds stock income
1. Balance as at the
503600000.001247162107.35251800000.007465059972.229467622079.57
end of the prior year
Add: Adjustment for
change in accounting
policy
115Annual Report 2022
Adjustment for
correction of previous
error
Other adjustments
2. Balance as at the
503600000.001247162107.35251800000.007465059972.229467622079.57
beginning of the year
3. Increase/ decrease
in the period (“-” for 25000000.00 4929342074.85 -1385311.78 12500000.00 1439407101.08 6404863864.15
decrease)
3.1 Total
comprehensive -1385311.78 2207307101.08 2205921789.30
income
3.2 Capital
increased and 25000000.00 4929342074.85 4954342074.85
reduced by owners
3.2.1 Ordinary
shares increased by 25000000.00 4929342074.85 4954342074.85
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 12500000.00 -767900000.00 -755400000.00
116Annual Report 2022
distribution
3.3.1
Appropriation to 12500000.00 -12500000.00
surplus reserves
3.3.2
Appropriation to
-755400000.00-755400000.00
owners (or
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 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
117Annual Report 2022
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 at the
528600000.006176504182.20-1385311.78264300000.008904467073.3015872485943.72
end of the period
118Anhui Gujing Distillery Company Limited Notes to the Financial Statements
Anhui Gujing Distillery Company Limited
Notes to the Financial Statements
for the Year Ended 31 December 2022
(Unless otherwise stated all amounts are expressed in CNY Yuan.)
Note 1 Company profile
1.1 Company profile
The Anhui State-owned Asset Management Bureau approved through WanGuoZiGongZi
(1996) Di 053 Hao the incorporation of Anhui Gujing Distillery Company Limited (the
Company and GJ Distillery) by Anhui Gujing Group Company Limited (GJ Group) as the
sole founder by the operating assets of Anhui Bozhou Gujing Distillery Factory (GJ
Distillery Factory) which is the core operating unit of GJ Group. The incorporation was
further approved by the Anhui People's Government through WanZhengMi (1996) 42 Hao.The incorporation General Meeting was held on 28 May 1996 and the incorporation was
registered with the Anhui Admistration Bureau for Commerce and Industry on 30 May 1996
with the registered address at Bozhou Anhui the People’s Republic of China (the PRC). At
incorporation the Company’s total number of shares stood at 155 million with a valuation of
CNY 377 .17million which was the fair value of the operating assets of GJ Distillery Factory
upon appraisal.The Company initiated public offering of 60 million domestic listed shares held by foreign
investors (known as “B share(s)”) in June 1996 and 20 million domestic listed CNY ordinary
shares (known as “A share(s)”) in September 1996. The par value of both the B share and A
share is CNY 1.00 per share. The B shares and A shares issued were listed on the Shenzhen
Stock Exchange.The Company is headquartered at Gujing Bozhou Anhui. The Company and its subsidiaries
(collectively the Group) operates in the food manufacturing sector and engages in the
production and sales of distilled wine.As of the public listing the Company has 235 million shares in total with the share capital at
CNY 235 million. The Company’s at public listing comprised 155 million state-owned shares
60 million B shares and 20 million A shares. Each of the Company’s shares has a par value at
CNY 1.00 per share.
11Anhui Gujing Distillery Company Limited Notes to the Financial Statements
In accordance with the resolution of the General Meeting held on 29 May 2006 the Company
exercised the share reorganisation plan in June 2006. Immediately after the implementation of
the share reorganisation plan the Company had in total 235 million shares comprising 147
million shares with restriction of disposal (equal to 62.55% of total shares) and 88 million
free-floating shares (equal to 37.45% of total shares).Upon the Company’s publication of the Notice of Lifting Restriction of Shares on 27 June
2007 the restriction on disposal on 11.75 million shares was lifted on 29 June 2007.
Immediately after the lifting the Company had in total 235 million shares comprising 135.25
million shares with restriction of disposal (equal to 57.55% of total shares) and 99.75 million
free-floating shares (equal to 42.45% of total shares).Upon the Company’s publication of the Notice of Lifting Restriction of Shares on 17 July
2008 the restriction on disposal on 11.75 million shares was lifted on 18 July 2008.
Immediately after the lifting the Company had in total 235 million shares comprising 123.5
million shares with restriction of disposal (equal to 52.55% of total shares) and 111.5 million
free-floating shares (equal to 47.45% of total shares).Upon the Company’s publication of the Notice of Lifting Restriction of Shares on 24 July
2009 the restriction on disposal on 123.5 million shares was lifted on 29 July 2009.
Immediately after the lifting the Company had in total 235 million shares comprising 235
million free-floating shares (equal to 100% of total shares).Upon approval by the China Securities Regulatory Commission (CSRC) through
ZhengJianXuKe [2011] 943 Hao the Company issued on 15 July 2011 through private
offering of 16.8 million A shares with the par value at CNY 1.00 to designated investors. The
shares were issued at CNY 75.00 per share. Gross proceeds from this issuance was CNY
1260 million and the respective net proceeds after deduction of the cost of issuance (CNY
32.5 million) was CNY 1227.5 million. The subscription for the issuance was verified by
Reanda CPAs Co. Ltd. through Reanda YanZi [2011] Di 1065 Hao. Immediately after this
private offering the share capital of the Company increased to CNY 251.8 million.In accordance with the resolution of the Company’s 2011 General Meeting a bonus issue of
10 shares for every 10 shares held at 31 December 2011 through utilisation of capital reserves
was exercised in 2012. 251.8 bonus shares were issued in total. Immediately after the exercise
of the bonus issue the Company’s share capital increased to CNY 503.6 million.
12Anhui Gujing Distillery Company Limited Notes to the Financial Statements
Upon approval by the CSRC through ZhengJianXuKe [2021] 1422 Hao the Company issued
on 22 July 2021 through private offering of 25 million A shares with the par value at CNY
1.00 to designated investors. The shares were issued at CNY 200.00 per share. Gross proceeds
from this issuance was CNY 5000 million and the respective net proceeds after deduction of
the cost of issuance (CNY 45.66 million) was CNY 4954.34 million. The subscription for the
issuance was verified by RSM China CPAs LLP through RSM Yan [2021] No. 518Z0050.Immediately after this private offering the share capital of the Company increased to CNY
528.6 million.
As of 31 December 2022 total number of the Company’s shares stood at 528.6 million. See
Note 5.33 for further details.Place of registration: Gujing Bozhou Anhui.Registered scope of operation: grain purchase (operation under permit) production of distilled
wine brewery equipments packaging materials glass bottles alcohol fat (as by-product of
alcohol production) development of innovative technology and biological technology deep
processing of agricultural and auxillary products and sales of owned produced goods.These financial statements are approved on 28 April 2023 by the Company’s Board of
Directors for publication.
1.2 Scope of consolidation
1.2.1 Subsidiaries included in the Company’s scope of consolidation as of the statement date
Shareholding %
Subsidiary Abbreviation
Direct Indirect
1 Bozhou Gujing Sales Co. Ltd. GJ Sales 100 -
2 Anhui Jinyunlai Culture Media Co. Ltd. Jinyunlai 100 -
3 Anhui Ruisi Weier Technology Co. Ltd. Ruisi Weier 100 -
4 Anhui Longrui Glass Co. Ltd. Longrui Glass 100 -
5 Shanghai Gujing Jinhao Hotel Management Co. Ltd. Jinhao Hotel 100 -
6 Baozhou Gujing Guest House Co. Ltd. GJ Guest House 100 -
7 Anhui Yuanqing Environment Protection Co. Ltd. YQ Environment 100 -
13Anhui Gujing Distillery Company Limited Notes to the Financial Statements
Shareholding %
Subsidiary Abbreviation
Direct Indirect
Protection
8 Anhui Gujing Yunshang E-Commerce Co. Ltd. GJ E-Commerce 100 -
9 Anhui Runan Xinke Testing Technology Co. Ltd. Runan Xinke 100 -
10 Anhui Jiuan Electric Equipments Co. Ltd. Jiuan Electric 100 -
11 Anhui Jiudao Culture Media Co. Ltd. Jiudao Media 100 -
Anhui Gujing Distillery Wine Theme Hotel Management Co.
12 Theme Hotel 100
Ltd
13 Anhui Anjie Technology Co. Ltd. Anjie Technology - 70
14 Anhui Jiuhao ChinaRail Construction Engineering Co. Ltd. Jiuhao ChinaRail 52 -
15 Anhui Zhenrui Construction Engineering Co. Ltd. Zhenrui Construction - 52
16 Huanghelou Distillery Co. Ltd. HHL Distillery 51 -
17 HHL Distillery (Suizhou) Co. Ltd. HHL Suizhou - 51
18 Hubei Junlou Culture Travel Co. Ltd. Junlou Culture - 51
19 Hubei HHL Beverage Co. Ltd. HHL Beverage - 51
20 HHL Distillery (Xianning) Co. Ltd. HHL Xianning - 51
21 Wuhan Yashibo Technology Co. Ltd. Yashibo - 51
22 Hubei Xinjia Testing Technology Co. Ltd. Xinjia Testing - 51
23 Wuhan Tianlong Jindi Technology Development Co. Ltd. Tianlong Jindi - 51
24 Wuhan Junya Sales Co. Ltd. Junya Sales - 51
25 Xianning Junhe Sales Co. Ltd. Xianning Junhe - 51
26 Suizhou Junhe Trading Co. Ltd. Suizhou Junhe - 51
27 Huanggang Junya Trading Co. Ltd. Huanggang Junya - 51
28 Guizhou Renhuai Maotai Treasure Distillery Co. Ltd. Treasure Distillery 60 -
29 Anhui Mingguang Distillery Co. Ltd. Mingguang Distillery 60 -
30 Mingguang Tiancheng Mingjiu Sales Co. Ltd. Tiancheng Sales - 60
31 Fengyang Xiaogangcun Mingjiu Distillery Co. Ltd. FY Xiaogangcun - 42
32 Anhui Gujing Health Technology Co. Ltd GJ HealthTechnology 60 -
14Anhui Gujing Distillery Company Limited Notes to the Financial Statements
Shareholding %
Subsidiary Abbreviation
Direct Indirect
33 Anhui Maiqi Biotechnology Co. Ltd Maiqi Biotechnology - 60
34 Anhui Yangshengtianxia Brand Operation Co. Ltd. Brand Operation - 60
35 Hainan Yangshengtianxia Biotechnology Development Co. Ltd Biotechnology - 60
See Note 7 for further details.
1.2.2 Change of the scope of consolidation in the period
See Note 7 for further details. Theme Hotel Huanggang JunyaAnjie Technology GJ Health
Technology Maiqi Biotechnology Brand Operation and Biotechnology were included in the
Company’s scope of consolidation in the period for the first time.Note 2 Basis of preparation for the financial statements
2.1 Basis of preparation
Based on going concern according to actually occurred transactions and events the Company
prepares its financial statements in accordance with the Accounting Standards for Business
Enterprises – Basic standards and concrete accounting standards Accounting Standards for
Business Enterprises – Application Guidelines Accounting Standards for Business
Enterprises – Interpretations and other relevant provisions (collectively known as
“Accounting Standards for Business Enterprises” or ASBE(s)). At the same time the
Company discloses relevant financial information in accordance with Disclosure Rule for
Companies with Publicly Traded Securities No. 15 – General Provisions for Financial
Statements (Revised in 2014) issued by the CSRC.
2.2 Going concern
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.Note 3 Significant account policies and accounting estimates
15Anhui Gujing Distillery Company Limited Notes to the Financial Statements
The following significant accounting policies and accounting estimates of the Company are
formulated in accordance with the Accounting Standards for Business Enterprises. Businesses
not mentioned are complied with relevant accounting policies of the Accounting Standards for
Business Enterprises.
3.1 Statement of compliance with the Accounting Standards for Business Enterprises
The Company prepares its financial statements in accordance with the requirements of the
Accounting Standards for Business Enterprises truly and completely reflecting the
Company’s financial position as at 31 December 2022 and its operating results changes in
shareholders' equity cash flows and other related information for the year then ended.
3.2 Accounting 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 twelve months.
3.4 Functional currency
The functional currency of the Company is CNY Yuan. An Overseas subsidiary (or branch)
uses the currency prominent in its business activities as its functional currency.
3.5 Business combination under common control and business combination not under
common contorl
3.5.1 Business combination under common control
The assets and liabilities that the Company obtains in a business combination under common
control are measured at their carrying amounts as consolidated in the ultimate controller’s
consolidated statement of financial position at the combination date. If the accounting policy
adopted by the acquired entity is different from that adopted by the Company the Company
according to accounting policy it adopts adjusts the relevant items in the financial statements
of the acquired entity based on the principle of materiality. the Company’s capital reserve
(capital premium or share premium) is adjusted by the difference between the carrying
amount of the net assets obtained by the Company and the carrying amount of the
consideration paid for the combination; where the capital reserve (capital premium or share
premium) is not sufficient to absorb the difference the excess is adjusted to the Company’s
surplus reserves and retained earnings if needed.
16Anhui Gujing Distillery Company Limited Notes to the Financial Statements
See Note 3.6.6 for business combination under common control through multiple transactions.
3.5.2 Business combination not under common control
The identifiable assets and liabilities that the Company obtains in a business combination not
under common control are 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
Company the Company according to accounting policy it adopts adjusts the relevant items
in the financial statements of the acquired entity based on the principle of materiality. The
Company recognises the excess of the cost of combination over the fair value of the
identifiable net assets it obtains from the acquired entity as goodwill. Where the fair value of
the identifiable net assets obtained by the Company is higher than the cost of combination the
Company 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 cost of combination;
where the excess remains upon the review the Company recognises the excess through profit
or loss for the period in which the combination occurs.See Note 3.6.6 for business combination not under common control through multiple
transactions.
3.5.3 Transaction costs of a business combination
The intermediary costs such as audit legal services and valuation consulting and other related
management costs that are directly attributable to the business combination are charged to
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 are recorded as a part of the value of
the respect equity or debt securities upon initial recognition.
3.6 Consolidated financial statements
3.6.1 Scope of consolidation
The scope of consolidation is 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
17Anhui Gujing Distillery Company Limited Notes to the Financial Statements
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 a legal entity a divisible part of the
investee and a structured entity controlled by a legal entity). 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.
3.6.2 Accounting policies applicable to an investing entity
Where an entity is an investing entity it consolidates its subsidiaries to the extent that the
subsidiaries which provide services to the investing entity; investment by the investing entity
in other subsidiaries of the investing entity which are not consolidated by the investing entity
is reocgnised as financial assets at fair value through profit or loss.An entity is an investing entity is all of the following conditions are satisfied:
I. the entity obtains funds from one or more investors for the purpose of providing those
investors with investment management services;
II. the entity commits to its investors that its business purpose is to invest funds solely for
returns from capital appreciation investment income or both; and
III. the entity measures and evaluates the performance of substantially all of its investments
on a fair value basis.Where a non-investing entity becomes an investing entity subsidiaries excluded from
consolidation upon the change in status are accounted for in accordance with the principle of
partial disposal not giving rise to loss of control.Where an investing entity becomes a non-investing entity subsidiairies which were not
previously consolidated are consolidated into the non-investing entity upon the change in
status in accordance with the principle of business combination not under common control
while their fair value as of the date of change in status is recognised by the non-investing
entity as cost of combination.
3.6.3 Preparation of the consolidated financial statements
The consolidated financial statements are 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 considers the entire group as
18Anhui Gujing Distillery Company Limited Notes to the Financial Statements
an accounting entity adopts uniform accounting policies and applies the requirements of
Accounting Standard for Business Enterprises related to recognition measurement and
presentation. The consolidated financial statements 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. The impact of intragroup transactions between the Company and the subsidiaries or
between subsidiaries are eliminated and when intragroup transactions indicate an impairment
of related assets the losses are recognised in full.IV. Adjustments are made for special transactions from the perspective of the group.
3.6.4 Accounting for inclusion into and exclusion from the scope of consolidation
3.6.4.1 Inclusion into the scope of consolidation
I. Subsidiaries or businesses acquired through business combination under common control
When preparing the consolidated statements of financial position the opening balances are
adjusted. Related items of comparative financial statements are 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 arising from the beginning of the reporting
period to the end of the reporting period are included into the consolidated statement of
comprehensive income. Related items of comparative financial statements are 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 are
included into the consolidated statement of cash flows. Related items of comparative financial
statements are adjusted as well deeming that the combined entity has always existed ever
since the ultimate controlling party began to control.II. Subsidiaries or businesses acquired through business combination not under common
control
19Anhui Gujing Distillery Company Limited Notes to the Financial Statements
When preparing the consolidated statements of financial position the opening balances of the
consolidated statements of financial position are not adjusted.Incomes expenses and profits of the subsidiary arising from the acquisition date to the end of
the reporting period are included into the consolidated statement of comprehensive income.Cash flows from the acquisition date to the end of the reporting period are included into the
consolidated statement of cash flows.
3.6.4.2 Exclusion from the scope of consolidation resulted from disposal of subsidiaries or
businesses
When preparing the consolidated statements of financial position the opening balances of the
consolidated statements of financial position are not adjusted.Incomes expenses and profits incurred from the beginning of the subsidiary to the disposal
date are included into the consolidated statement of comprehensive income.Cash flows from the beginning of the subsidiary to the disposal date are included into the
consolidated statement of cash flows.
3.6.5 Special consideration in consolidation elimination
3.6.5.1 Long-term equity investment held by the subsidiaries to the Company is recognised as
treasury stock of the Company which is offset with equity represented as “treasury stock”
under “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.
3.6.5.2 Due to not belonging to share capital and capital reserve and being different from
retained earnings and undistributed profit “Specific reserves” is 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.
3.6.5.3 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 unrealised inter-company transaction profit or loss deferred tax assets of
deferred tax liabilities are recognised and income tax expense in the consolidated statement
20Anhui Gujing Distillery Company Limited Notes to the Financial Statements
of comprehensive income is adjusted simultaneously excluding deferred taxes related to
transactions or events directly recognised in equity or business combination.
3.6.5.4 Unrealised inter-company transactions profit or loss generated from the Companyselling assets to its subsidiaries is eliminated against “net profit attributable to theshareholders of the parent company” in full. Unrealised inter-company transactions profit orloss generated from the subsidiaries selling assets to the Company is eliminated between “netprofit attributable to the shareholders of the parent company” and “net profit attributable tonon-controlling shareholders” pursuant to the proportion of the Company in the related
subsidiaries. Unrealised inter-company transactions profit or loss generated from the assetssales between the subsidiaries is eliminated between “net profit attributable to theshareholders of the parent company” and “net profit attributable to non-controllingshareholders” pursuant to the proportion of the Company in the selling subsidiaries.
3.6.5.5 If loss attributable to the non-controlling 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.
3.6.6 Accounting for special transactions
3.6.6.1 Acquiring shares from non-controlling shareholders
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 insufficient for offset surplus
reserve and retained earnings shall be offset in turn.
3.6.6.2 Gaining control over a subsidiary in stages through multiple transactions
I. Business combination under common control 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
21Anhui Gujing Distillery Company Limited Notes to the Financial Statements
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 is adjusted against surplus reserve and undistributed profit in turn.In the consolidated financial statements the assets and liabilities acquired during the
combination are recognised at their carrying amounts 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 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 is 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 is offset against the opening balance of retained earnings
at the comparative financial statements period respectively.II. Business combination not under common control 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 is 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.Other comprehensive income related to the equity interest held prior to the acquisition date
calculated through equity method is transferred to current investment income of the
acquisition period excluding other comprehensive income resulted from the remeasurement
of defined benefit plans. The Company discloses 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.
22Anhui Gujing Distillery Company Limited Notes to the Financial Statements
3.6.6.3 Disposal of investment in subsidiaries without a loss of control
For partial disposal of a long-term equity investment in a subsidiary 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 is adjusted into
capital reserve (capital premium or share premium). If the capital reserve is not enough to
absorb the difference any excess is adjusted against retained earnings.
3.6.6.4 Disposal of investment in subsidiaries with a loss of control
I. Loss of control through one single 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 is
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 the acquisition date or
combination date according to the original proportion of equity interest is 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 is transferred into current investment income when
control is lost excluding other comprehensive income resulted from the remeasurement of
defined benefit plans.II. Loss of control through multiple transactions
In the consolidated financial statements whether the transactions should be accounted for as
“a single transaction” needs to be decided firstly.If the disposal through multiple transactions is not classified as “a single transaction” in the
separate financial statements for transactions prior to the date of loss of control carrying
amount of each disposal of long-term equity investment is de-recognised at upon disposal
and the difference between consideration received and the carrying amount of long-term
equity investment corresponding to the equity interest disposed is recognised in current
investment income; in the consolidated financial statements the disposal transaction is
accounted for in accordance with 3.6.6.3.If the disposal through multiple transactions is classified as “a single transaction” these
23Anhui Gujing Distillery Company Limited Notes to the Financial Statements
transactions should be accounted for as one single transaction of disposal of subsidiary
resulting in loss of control. In the separate financial statements for each transaction prior to
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 is recognised in
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 to the date of loss of
control difference between consideration received and proportion of the subsidiary’s net
assets corresponding to the equity interest disposed is 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:
i. The transactions are entered into simultaneously or in contemplation of one another.ii. The transactions form a single transaction designed to achieve an overall commercial
effect.iii. The occurrence of one transaction depends on the occurrence of at least one other
transaction.iv. 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.
3.6.6.5 Diluting equity share of parent company in its subsidiaries due to additional capital
contribution by the subsidiaries’ non-controlling shareholders.Other shareholders (non-controlling shareholders) of the subsidiaries inject additional capital
in the subsidiary which results in the dilution of equity interest of parent company in the
subsidiary. In the consolidated financial statements difference between share of the
corresponding subsidiary’s net assets calculated based on the parent’s equity interest before
and after the capital injection is adjusted into capital reserve (capital premium or share
premium). If the capital reserve is not enough to absorb the difference any excess is adjusted
against retained earnings.
3.7 Joint arrangement
A joint arrangement is an arrangement of which two or more parties have joint control. Joint
24Anhui Gujing Distillery Company Limited Notes to the Financial Statements
arrangement of the Company is classified as either a joint operation or a joint venture.
3.7.1 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 recognises the following items in relation to shared interest in a joint operation
and accounts 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.
3.7.2 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
3.9.1 Translation of a transaction denominated in a foreign currency
At the time of initial recognition of a foreign currency transaction the amount in the foreign
currency is 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
25Anhui Gujing Distillery Company Limited Notes to the Financial Statements
(hereinafter referred to as the approximate exchange rate).
3.9.2 Translation of monetary items denominated in foreign currencies on a balance-sheet
date
The foreign currency monetary items are translated at the spot exchange rate on the balance
sheet date. The 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 are translated
at the spot exchange rate on the transaction date; the foreign currency non-monetary items
restated to a fair value measurement are translated 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.
3.9.3 Translation of financial statements denominated in a foreign currency
Before translating the financial statements of foreign operations the accounting period and
accounting policies are adjusted so as to conform to the Company’s accounting period and
accounting policies. The adjusted foreign operation financial statements denominated in
foreign currency (other than functional currency) are 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 equity items except
retained earnings are translated at the spot exchange rates when they are incurred.II. The income and expense items in the statement of comprehensive income are 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 are 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 are
presented separately as “other comprehensive income” under the equity items of the
26Anhui Gujing Distillery Company Limited Notes to the Financial Statements
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 are reclassified into current profit or loss
according to the proportion disposed.
3.10 Financial instruments
A 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.
3.10.1 Recognition and derecognition of a financial instrument
A financial asset or a financial liability is 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 the rights to the contractual cash flows from
the financial asset expire; or
A financial liability (or a part of a financial liability) is derecognised in on of the following
ways:
I. a financial liability (or a part of the financial liability) is derecognised when the obligation
associated with the financial liability (or the part of the financial liability) is released;
II. Where an existing financial liability is replaced by a new financial liability by an
agreement with the counter party and the new financial liability is substantially different from
the existing financial liability the existing financial liability is derecognised while the new
financial liablity is recognised;
III. Where the contractual terms of a financial liability (or a part of a financial liability) are
substantially altered the financial liablity is dercognised in full and a new financial liablity
reflecting the contractual terms after alteration is recognised.Purchase or sale of a financial instrument in a regular-way is recognised and derecognised
using trade date accounting. A regular-way purchase or sale of a financial instrument is a
transaction under a contract whose terms require delivery of the instrument within the
timeframe established generally by regulations or convention in the market place concerned.Trade date is the date on which the entity commits itself to purchase or sell aA financial
instrument.
27Anhui Gujing Distillery Company Limited Notes to the Financial Statements
3.10.2 Classification and measurement of financial assets
A financial asset is recognised as one of the following upon initial recognition based on both
the business model for managing the financial asset and the contractual cash flow
characteristics of the financial asset:
I. a financial asset at amortised cost;
II. a financial asset at fair value through profit or loss (FVATPL); or
III. a financial asset at fair value through other comprehensive income (FVATOCI).Reclassification of a financial asset is permitted if and only if the objective of the entity’s
business model for managing the financial asset changes. In this circumstance all affected
financial assets are reclassified on the first day of the first reporting period after the changes
in business model; otherwise a financial asset cannot be reclassified after initial recognition.Financial assets shall be measured at initial recognition at fair value. For financial assets
measured at fair value through profit or loss transaction costs are recognised in current profit
or loss. For financial assets not measured at fair value through profit or loss 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 assets at amortised cost
A financial asset is classified as a financial asset at amortised cost when both the following
conditions are satisfied:
i. the financial asset is held within the business model whose objective is to hold the financial
asset in order to collect contractual cash flows; and
ii. the contractual term of the financial asset gives rise to cash flows on specified dates that are
solely payment of principal and interest on the outstanding principal amount.A financial asset at amortised cost is subsequently measured at amortised cost by adopting the
effective interest rate method. Any gain or loss arising from derecognition amortisation
computed using the effective interest rate method and impairment are recognised in current
profit or loss.
28Anhui Gujing Distillery Company Limited Notes to the Financial Statements
II. Financial assets at fair value through other comprehensive income (FVATOCI)
A financial asset is classified as a FVATOCI when both the following conditions are satisfied:
i. the financial asset is held within the business model whose objective is achieved by both
collecting contractual cash flows and selling financial asset; and
ii. the contractual term of the financial asset gives rise to cash flows on specified dates that are
solely payment of principal and interest on the outstanding principal amount.A FVATOCI is subsequently measured at fair value with changes in fair value recognised in
other comprehensive income excep for the following gain or loss which is recognised in
current profit or loss:
i. gain or loss arising from impairment or exchange differences; and
ii. interest income calculated based on the effective interest rate
Where a non-trading equity instrument investment is irrevocably designated as a FVTAOCI
fair value change is recognised in other comprehensive income and dividend income is
recognised in current profit or loss. Upon derecognised cumulative gain or loss previously
recognised in other comprehensive income is reclassified to retained earnings.III Financial assets at fair value through profit or loss (FVATPL)
A financial asset which is neither a financial asset at amortised cost nor a FVATOCI is
classified as a FVATPL. A FVATPL is subsequently measured as fair value with changes in
fair value recognised in current profit or loss.
3.10.3 Classification and measurement of financial liabilities
The Company classified the financial liabilities as financial liabilities at fair value through
profit or loss (FVLTPL) loan commitments at a below-market interest rate financial
guarantee contracts and financial liablities at amortised cost.Subsequent measurement of financial assets will be based on the classification:
I. Financial liabilities at fair value through profit or loss (FVLTPL)
Held-for-trading financial liabilities (including derivatives that are financial liabilities) and
financial liabilities designated as FVLTPL are classified as financial liabilities at FVLTPL.After initial recognition any gain or loss (including interest expense) are recognised in
current profit or loss except for those to which hedge accounting is applied. For a financial
29Anhui Gujing Distillery Company Limited Notes to the Financial Statements
liability that is designated as a FVLTPL changes in the fair value of the financial liability that
is attributable to changes in the own credit risk of the issuer is recognised in other
comprehensive income. At derecognition cumulative gain or loss previously recognised
under other comprehensive income is reclassified to retained earnings.II. Loan commitments and financial guarantee contracts
A 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 is
recognised based on expected credit losses model.A 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 original or modified terms of a debt instrument. A
financial guarantee contract liability shall be subsequently measured at the higher of the
amount determined in accordance with the accounting policies applicable to impairment of a
financial asset and the amount initially recognised less the cumulative amortisation calculated
in accordance with the accounting policies applicable to revenue.III. Financial liabilities at amortised cost
A financial liability at amortised cost is subsequently measured at its amortised cost
calculated using the effective interest rate method.Unless in exceptional case financial liabilities and equity instruments are classfified in the
following ways:
I. Where the issuer of a financial instrument has no uncondintional right to avoid deliverying
cash or another financial asset(s) to fulfill an obligation this obligation meets the definition of
a financial liablity. A contract of a financial instrument may not explicitly comprise terms and
conditions relating to a obligation of delivery cash or another financial asset(s) it may
implicitly include such obligation through other terms and conditions.II. Where a financial instrument can only or may be settled by the issuer’s own equity
instruments:
i. if the issuer’s equity instruments are a substitution of cash or other financial asset(s) the
financial instrument is the issuer’s liability;
ii. if the issuer’s equity instruments enable the holder to the issuer’s residual interest after
deducting all of the issuer’s liabilities from all of the issuer’s assets the financial instrument
30Anhui Gujing Distillery Company Limited Notes to the Financial Statements
is the issuer’s equity instrument.In certain cases a financial instrument can only or may be settled by the issuer’s own equity
instruments and the settlement amount is calculated by multiplying the number of equity
instruments deliverable with the fair value of the equity instrument at the settlement date the
instrument is the issuer’s financial liablity regardless of whether the settlement amount is
fixed or determinable wholly or partly by variables other than the market price of the issuer’s
own equity instrument (such as interest rate market price of a commodity or price of a
financial instrument).
3.10.4 Derivatives and embedded derivatives
A financial derivative is initially measured at its fair value at the inception date of the
derivative contract and subsequently measured at fair value. At initial recognition a financial
deriivative with fair value at positive amount is recognised as an asset and as a liability is the
fair value is at negative amount.Except for the change of fair value of the effective portion of a cash flow hedge which is
recognised other comprehensive income and reclassified to profit or loss upon cease of
hedging effectiveness change of fair value of a financial financial derivative in recognised in
current profit or loss.Where the non-derivative part of a hybrid instrument is a financial asset the hybrid
instrument is as a whole accounted for a financial asset.Where the non-derivative part of a hybrid instrument is a non-financial asset the derivative
part is separately accounted for as a financial derivative if all of the following conditions are
satisfied:
I. the hybrid instrument is not accounted for at fair value through profit or loss;
II. the economic characteristics and risks of the derivative part is not closely related to those
of the non-derivative part; and
III. a stand-alone instrument with characteristics similar to the derivative part is a financial
derivative.Where the fair value of the derivative part of a hybrid instrument with the non-derivative part
being a non-financial asset cannot be inidividually measured either upon or subsequent to
31Anhui Gujing Distillery Company Limited Notes to the Financial Statements
initial recognition the hybrid instrument as a whole is accounted as either a FVATPL or
FVLTPL.
3.10.5 Impairment of financial instruments
Impairment allowance for financial assets at amortised costs FVATOCI contract assets lease
receivables loan commitments and financial guarantee contracts is recognised on the basis of
their expected credit loss.I. Measurement of expected credit loss
Expected credit loss are the weighted average of credit loss of a financial instrument 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 (ie all cash shortfalls) discounted at the
original effective interest rate or credit-adjusted effective interest rate in the case of purchased
credit-impaired financial assets or financial assets with origninated credit impairment.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
32Anhui Gujing Distillery Company Limited Notes to the Financial Statements
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 (ie impairment loss not been deducted). For financial instrument at 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.i. 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:
A. Notes receivables:
Group 1: Commercial acceptance
Group 2: Bank acceptance
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.B. Accounts receivable:
Group 1: Related parties within the scope of consolidation
33Anhui Gujing Distillery Company Limited Notes to the Financial Statements
Group 2: Receivables due from third parties
The expected credit loss for a portfolio of accounts receivable is computed using the
expected credit loss rate over the entire lifes of the accounts receivable and the age groups
of these accouns receivable while taking into consideration of their historical credit loss
and the assessment for current and expected general economic conditions.C. Other receivables:
Group 1: Related parties within the scope of consolidation
Group 2: Receivables due from third parties
The expected credit loss for a portfolio of other receivables is computed using the expected
credit loss rate over the next 12 months of the other receivables and their exposure to default
risk while taking into consideration of their historical credit loss and the assessment for
current and expected general economic conditions.ii. Debts investment and other debt investments
The expected credit loss for a debt investment or other debt investment is computed using the
expected credit loss rate over the next 12 months or the entire life of the investment and its
exposure to default risk while taking into consideration of its nature.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
34Anhui Gujing Distillery Company Limited Notes to the Financial Statements
considered by the Company are as following:
i. significant changes in internal price indicators of credit risk as a result of a change in credit
risk since inception;
ii. 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;
iii. 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;
iv. 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;
v. significant change that are expected to reduce the borrower’s economic incentive to make
scheduled contractual payments
vi. 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;
vii. significant changes in the expected performance and behaviour of the borrower
viii. contractual payments are not less 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 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
35Anhui Gujing Distillery Company Limited Notes to the Financial Statements
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
36Anhui Gujing Distillery Company Limited Notes to the Financial Statements
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.
3.10.6 Transfer of financial assets
An entity may transfer a financial asset by either transferring the contractual rights to the cash
flows of the financial asset to another party or transferring the financial asset to another party
while retaining the contractual rights to the cash flows of the financial asset and assuming the
contractual obligations to deliver cash flows received to one or multiple parties.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:
i. the carrying amount of transferred financial asset;
ii. 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 - 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
37Anhui Gujing Distillery Company Limited Notes to the Financial Statements
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:
i. the carrying amount (measured at the date of derecognition) allocated to the part
derecognised
ii. 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 - Recognition and Measurement of Financial Instruments).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.
3.10.7 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
38Anhui Gujing Distillery Company Limited Notes to the Financial Statements
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.
3.10.8 Determination of fair value of financial instruments
See Note 3.11 for determination of fair value of financial instruments.
3.11 Determination of fair value
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.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.
3.11.1 Valuation techniques
The Company uses valuation techniques that are appropriate in the circumstances and for
39Anhui Gujing Distillery Company Limited Notes to the Financial Statements
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.
3.11.2 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
3.12.1 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
semi-finished goods work in progress finished goods merchandises consumables etc.
3.12.2 Measurement method applicable to issuance of inventories
Inventories are measured at actual cost at recognition. The actual cost of an item of
inventories comprises the purchase cost cost of processing and other costs. Inventories are
40Anhui Gujing Distillery Company Limited Notes to the Financial Statements
issued at weighted average cost.
3.12.3 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.
3.12.4 Provision for impairment of inventory
Inventories are stated at the lower of cost and net realizable value. The excess of cost over net
realisable 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.
3.12.4.1 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.
3.12.4.2 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.
3.12.4.3 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.
3.12.4.4 If any factor rendering write-downs of the inventories has been eliminated at the
41Anhui Gujing Distillery Company Limited Notes to the Financial Statements
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.
3.12.5 Amortisation method of low-value consumables
A low-value consumable is amortised in full upon issuance. A packaging material is
amortised in full upon issuance.
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 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 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.
42Anhui Gujing Distillery Company Limited Notes to the Financial Statements
An asset is recognised for the costs incurred to obtain 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 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.
3.15.1 Determination basis of joint control or significant influence over the investee
43Anhui Gujing Distillery Company Limited Notes to the Financial Statements
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.
3.15.2 Determination of initial investment cost
3.15.2.1 Long-term equity investments arising from business combination
3.15.2.1.1 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.
3.15.2.1.2 For a business combination involving enterprises under common control if the
44Anhui Gujing Distillery Company Limited Notes to the Financial Statements
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.
3.15.2.1.3 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.
3.15.2.2 Long-term equity investments not arising from business combination
3.15.2.2.1 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.
3.15.2.2.2 For long-term equity investments acquired through issuance of equity securities
the initial cost is the fair value of the issued equity securities.
3.15.2.2.3 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.
3.15.2.2.4 For long-term equity investment acquired through debt restructuring the initial cost
is measured at the fair value of the equity investment obtained. Difference between the fair
value of the equity investment obtained and the book value of the debt given away is
recognised in current profit or loss.
45Anhui Gujing Distillery Company Limited Notes to the Financial Statements
3.15.3 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.
3.15.3.1 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.
3.15.3.2 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
46Anhui Gujing Distillery Company Limited Notes to the Financial Statements
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 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 Other equity instrument investment difference between its
fair value and the carrying value in addition to the cumulative gain or loss previously
recorded in other comprehensive income shall be recogised into current profit or loss at the
time when the equity method becomes applicable.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.
3.15.4 Held-for-sale equity investments
The remaining equity investment after partial disposal which is not classified as held-for-sale
is accounted for by the equity method.If a held-for-sale equity investment no longer satisfies the conditions for classifying as
held-for-sale it is retrospectively adjusted from the date on which it was classified as
held-for-sale using the equity method. The financial statements for the period during which
the investment was classified as held-for-sale are respectively restated.
3.15.5 Impairment of long-term equity investments
See Note 3.22 for details.
3.16 Investment properties
47Anhui Gujing Distillery Company Limited Notes to the Financial Statements
3.16.1 Classification
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.
3.16.2 Measurement
Investment properties are subsequently measured by the cost method. See Note 3.22 for
impairment of investment properties.The residual after deducting the scrap value and cumulative impairment from the historical
cost of an item of investment properties is depreciated or amortised using the 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 rendering services renting or business management with useful lives
exceeding one year.
3.17.1 Recognition
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.
3.17.2 Depreciation
The Company begins to depreciate the fixed asset from the next month after it is available for
48Anhui Gujing Distillery Company Limited Notes to the Financial Statements
intended use using the straight-line-method. The estimated useful life and annual depreciation
rates which are determined according to the categories. The estimated economic useful lives
and estimated net residual rates of fixed assets are listed as followings:
Depreciation
Category Useful life in years Scrap value rate (%) Annual depreciation rate (%)
method
Houses and buildings Straight line 8.00-35.00 3.00-5.00 2.70-12.10
Machinery Straight line 8.00-10.00 3.00-5.00 9.50-12.10
Transportation vehicles Straight line 4.00 3.00 24.25
Administrative and
Straight line 3.00 3.00 32.33
other devices
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.
3.17.3 Fixed assets acquired through financial lease
Where a leasing arrangement transfers substantially all risks and rewards associated with the
leased item to the Group the lease is regarded as a finance lease and the leased item is
recognised as an item of fixed assets. An item of fixed asset obtained from a finance lease is
measured upon recognition at the lower of the fair value of the leased item and the present
value of the minimum lease payment as of the lease inception date. An item of fixed asset
obtained through a finance lease is depreciated in accordance with the depreciation method
applicable to the category of fixed assets to which the lease item belongs. If it is reasonably
certain that ownership of the lease item will transfer to the Group upon expiry of the lease the
leased item is depreciated over its useful life; if however transfer of ownership of the leased
item upon expiry of the lease to the Group cannot be reasonably expected the leased item is
depreciated over the shorter of its useful life and the lease term.
3.18 Construction in progress
3.18.1 Construction in progress is measured on an individual project basis.
3.18.2 Transfer to fixed assets
49Anhui Gujing Distillery Company Limited Notes to the Financial Statements
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
At the lease commencement date a right-of-use asset is measured at cost. The cost of a
right-of-use asset comprise:
I. the amount of the initial measurement of the lease liability;
II. any lease payments made at or before the commencement date less any lease incentives
received;
III. any initial direct costs incurred by the Group; and
IV. an estimate of costs to be incurred by the Group in dismantling and removing the
underlying asset restoring the site on which it is located or restoring the underlying asset to
the condition required by the terms and conditions of the lease unless those costs are incurred
to produce inventories.A right-of-use asset is subsequently measured at cost. If it is reasonably certain that ownership
of the lease item will transfer to the Group upon expiry of the lease the leased item is
depreciated over its useful life; if however transfer of ownership of the leased item upon
expiry of the lease to the Group cannot be reasonably expected the leased item is depreciated
over the shorter of its useful life and the lease term. Where a leased item has recorded
impairment its residual value after deducting the impairment allowance is depreciated in
50Anhui Gujing Distillery Company Limited Notes to the Financial Statements
accordance the principle described in this paragraph.
3.20 Borrowing costs
3.20.1 Capitalisation
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.
3.20.2 Capitalisation rate and capitalised amount
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
capitalisation 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.
51Anhui Gujing Distillery Company Limited Notes to the Financial Statements
3.21 Intangible assets
3.21.1 Initial measurement
An intangible assets is initial measured at the actual cost of acquisition
3.21.2 Useful lives
3.21.2.1 Intangible assets with define useful lives
Category Useful life in years Basis for useful life determination
Land use rights 40-50 Legal right to use
Patents 10 Period that the asset can generate economic benefits
Software 3-5 Period that the asset can generate economic benefits
Trademarks 10 Period that the asset can generate economic benefits
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 incur in current year in the estimated useful life and amortisation method upon review.
3.21.2.2 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.
3.21.2.3 Amortisation
For intangible assets with finite useful lives their useful lives should be determined upon
their acquisition and systematically amortised on a straight-line basis [units of production
method] 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
52Anhui Gujing Distillery Company Limited Notes to the Financial Statements
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.
3.21.3 Research and development expenditure
3.21.3.1 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.
3.21.3.2 Development activities after the research phase of the Company shall be treated as
development phase.
3.21.4 Capitalisation of research and development expenditure
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 constructions in progress and intangible assets
subsequently measured at cost 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
53Anhui Gujing Distillery Company Limited Notes to the Financial Statements
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.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
54Anhui Gujing Distillery Company Limited Notes to the Financial Statements
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 “Employee benefits payable” and “Long-term employee benefits payable”.
3.24.1 Short-term employee benefits
3.24.1.1 Salaries wages allowances and subsidies
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.
3.24.1.2 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 benefits.
3.24.1.3 Social securities such as medical insurance and work-place 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-place 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 liabilities
which shall be recognised in current profit or loss or the cost of relevant asset.
3.24.1.4 Short-term paid absences
55Anhui Gujing Distillery Company Limited Notes to the Financial Statements
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.
3.24.1.5 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.
3.24.2 Post-employement benefits
3.24.2.1 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.
3.24.2.2 Defined benefit plans
I. 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
56Anhui Gujing Distillery Company Limited Notes to the Financial Statements
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.II. Net assets or liabilities of a defined benefit plan
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.III. Amount recognised as plan assets or charged to the 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.IV. Amount recognised in other comprehensive income
Changes in the net liability or asset of the defined benefit plan resulting from the
remeasurements including:
i. 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;
ii. Return on plan assets excluding amounts included in net interest on the net defined benefit
liability or asset;
iii. 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.
57Anhui Gujing Distillery Company Limited Notes to the Financial Statements
3.24.3 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; or
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.
3.24.4 Other long-term employee benefits
3.24.4.1 Other long-term employee beneifts satisfying the recognition conditions applicable to
defined contribution plans
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.
3.24.4.2 Other long-term employee benefits satisfying the recognition conditions applicable to
defined benefit plans
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:
I. Service costs;
II. Net interest cost for net liability or asset of other long-term employee benefits;
III. 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.
58Anhui Gujing Distillery Company Limited Notes to the Financial Statements
3.25 Lease liabilities
At the commencement date the Group measures the lease liability at the present value of the
lease payments that are not paid at that date. The lease payments comprise:
I. fixed payments or in-substance fixed payments less any lease incentives receivable;
II. variable lease payments that depend on an index or a rate;
III. the exercise price of a purchase option if the Group is reasonably certain to exercise that
option;
IV. payments of penalties for terminating the lease if the lease term reflects the Group
exercising an option to terminate the lease; and
V. amounts expected to be payable by the Group under residual value guarantees.The lease payments shall be discounted using the interest rate implicit in the lease if that rate
can be readily determined. If that rate cannot be readily determined the lessee shall use the
lessee’s incremental borrowing rate. The excess of the lease payments over its present value is
amortised over the lease term as interest expenses using the discount rate. A variable lease
payment which is not included in the initial measurement of the lease liability is recognised in
profit or loss when incurred.
3.26 Provisions
3.26.1 Recognition
A provision is recognised for an obligation associated with a contingent event when the
following conditions are satisfied:
I. The obligation is a present obligation assumed by the entity;
II. It is probable that fulfillment of the obligation will result in outflows of economic benefits
from the entity;
III. The amount of the obligation can be reliably measured.
3.26.2 Measurement
A provision is 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 provision shall be reviewed at the end of every
reporting period. If conclusive evidences indicate that the carrying amount fails to be the best
59Anhui Gujing Distillery Company Limited Notes to the Financial Statements
estimate of the provision the carrying amount shall be adjusted based on the updated best
estimate.
3.27 Revenue
3.27.1 General policy
Revenue is total economic inflows arising from the Company’s daily operation which result
in increases in equity other than those relating to contributions from holders of equity claims.The Company recognises revenue when (or as) the Company satisfies a performance
obligation by transferring a promised good or service (ie an asset) to a customer. An asset is
transferred when (or as) the customer obtains control of that asset. A customer has control of
an asset when (or as) the customer has the ability to direct the use of and obtain substantially
all of the remaining benefits from the asset.Where a contract include two or more performance obligations the Company allocate the
transaction price upon inception of the contract to each performance obligation identified in
the contract on a relative stand-alone selling price basis revenue associated with each
performance obligation is measured at the allocated price.The transaction price is the amount of consideration to which the Company expects to be
entitled in exchange for transferring promised goods or services to a customer excluding
amounts collected on behalf of third parties. If the consideration promised in a contract
includes a variable amount the Company estimates the amount of consideration to which the
Company will be entitled in exchange for transferring the promised goods or services to
a customer to the extent that it is highly probable that a significant reversal in the amount of
cumulative revenue recognised will not occur when the uncertainty associated with the
variable consideration is subsequently resolved. Where a contract contains a significant
financing component the Company recognizes revenue at an amount that reflects the price
that a customer would have paid for the promised goods or services if the customer had paid
cash for those goods or services when (or as) they transfer to the customer (ie the cash selling
price); the difference between the amount of promised consideration and the cash selling price
of the promised goods or services is amortised over the life of the contract using the effective
interest rate method. The Company does not adjust the promised amount of consideration for
the effects of a significant financing component if the Comopany expects at contract
inception that the period between when the Company transfers a promised good or service to
a customer and when the customer pays for that good or service will be one year or less.
60Anhui Gujing Distillery Company Limited Notes to the Financial Statements
The Company transfers control of a good or service over time and therefore satisfies a
performance obligation and recognises revenue over time if one of the following criteria is
met:
I. the customer simultaneously receives and consumes the benefits provided by the
Company’s performance as the entity performs;
II. the Company’s performance creates or enhances an asset that the customer controls as
the asset is created or enhanced; or
III. the Company’s performance does not create an asset with an alternative use to the
Company and the Company has an enforceable right to payment for performance
completed to date.For each performance obligation satisfied over time the Company recognises revenue over
time by measuring the progress towards complete satisfaction of that performance obligation
unless the progress towards complete satisfaction cannot be reliably measured. The Company
uses either the input method or output method to measure the progress towards complete
satisfaction of a performance obligation. When the progress towards complete satisfaction of
a performance obligation cannot be reliably measured the Company recognises revenue only
to the extent of the costs incurred until such time that it can reasonably measure the outcome
of the performance obligation.Where a performance obligation is satisfied at a point in time the Company recognises
revenue when (or as) the customer obtains control of the transferred asset (either goods or
service). To determine the point in time at which a customer obtains control of a promised
asset the Company considers the following indicators:
I. The Company has a present right to payment for the asset ie. the customer has the
present obligation to pay for the asset.II. The legal title to the asset has been transferred to the customer ie. the customer has the
legal title to the asset.III. The Company has transferred physical possession of the asset ie. the customer has
physical possession of the asset.IV. The significant risks and rewards of ownership of the asset has been transferred to the
customer ie. the customer has obtained the significant risks and rewards of ownership of
the asset.
61Anhui Gujing Distillery Company Limited Notes to the Financial Statements
V. The customer has accepted the asset.VI. Other indication that the customer has obtained control over the asset.
3.27.2 Specific policies
Revenue recognition methods of the Company are as follows:
3.27.2.1 Revenue from sales of goods
According to the contract of sales of goods between the Company and the customer the
Company satisfies a performance obligation by transferring goods to the customer which is a
performance obligation satisfied at a point in time.Revenue from domestic sales of goods can only be recognised when the following conditions
are satisfied: the Company has transferred the promised goods to the customer according to
the contract and the customer has accepted the goods; the payment has been received or the
receipt voucher has been obtained and it is highly probable that the economic benefits
associated will flow into the Company; the significant risks and rewards of ownership of the
asset has been transferred; legal title of the asset has been transferred.
3.27.2.2 Revenue from rendering of services
The customer simultaneously receives and consumes the benefits provided by the Company’s
performance as the Company performs，Company satisfies a performance obligation byrendering of services to the customer which is a performance obligation satisfied over time.For each performance obligation satisfied over time the Company shall recognise revenue
over time by measuring the progress towards complete satisfaction of that performance
obligation.The customer can’t simultaneously receives and consumes the benefits provided by the
Company’s performance as the Company performs the Company’s performance does not
create an asset with an alternative use and the Company has no enforceable right to payment
for performance completed to date at all times throughout the duration of the contract
Revenue from rendering of services is a performance obligation satisfied at a point in
time.The company recognizes revenue when the company completes technical services in
accordance with the contractual agreement
3.27.2.3 Revenue from usage of assets
Revenue from usage of the Group’s assets is recognised if the revenue can be reliably
62Anhui Gujing Distillery Company Limited Notes to the Financial Statements
measured and it is probable that the associated economic benefits will flow to the Group.Revenue from usage of assets mainly includes the income from the leasing of premises and
houses.Revenue measured in accordance with the method determined by the respective
contracts.
3.28 Government grants
3.28.1 Recognition
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
II. The grants will be received.
3.28.2 Measurement
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 CNY 1.00 when reliable fair value is not available.
3.28.3 Accounting for government grant
3.28.3.1 Asset-related government grants
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.
3.28.3.2 Income-related government grants
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
63Anhui Gujing Distillery Company Limited Notes to the Financial Statements
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.
3.28.3.3 Loan interest subsidies
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.
3.28.3.4 Repayment of 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
recognises and measures 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.
3.29.1 Recognition of deferred tax assets
Deferred tax assets should be recognised for deductible temporary differences the
64Anhui Gujing Distillery Company Limited Notes to the Financial Statements
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.
3.29.2 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.No deferred tax liability shall be recognised for taxable temporary differences arising from:
I. the initial recognition of goodwill; or
II. 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)
65Anhui Gujing Distillery Company Limited Notes to the Financial Statements
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:
I. the Company is able to control the timing of the reversal of the temporary difference; and
II. it is probable that the temporary difference will not reverse in the foreseeable future.
3.29.3 Recognition of deferred tax liabilities or assets involved in special transactions or
events
3.29.3.1 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).
3.29.3.2 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 other debt investments; 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.
3.29.3.3 Unused tax losses and unused tax credits
3.29.3.3.1 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.
66Anhui Gujing Distillery Company Limited Notes to the Financial Statements
3.29.3.3.2 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 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.
3.29.3.4 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.
3.29.3.5 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
3.30.1 Identifying a lease
At inception of a contract the Company shall assess whether the contract is or contains
alease. A contract is or contains a lease if the contract conveys the right to control the use of
one or more identified assets for a period of time in exchange for consideration. To assess
67Anhui Gujing Distillery Company Limited Notes to the Financial Statements
whether a contract conveys the right to control the use of an identified asset for a period of
time the Company shall assess 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 to
direct the use of the identified asset.
3.30.2 Identifying a separate lease component
When a contract includes more than one separate lease components the Company shall
separate components of the contract and account for each lease component separately. The
right to use an underlying asset is a separate lease component if both conditions have been
satisfied:
a. the lessee can benefit from use of the underlying asset either on its own or together with
other resources that are readily available to the lessee;
b. the underlying asset is neither highly dependent on nor highly interrelated with the other
underlying assets in the contract.
3.30.3 The Company as a lessee
At the commencement date the Company identifies the lease that has a lease term of 12
months or less and does not contain a purchase option as a short-term lease. A lease qualifies
as a lease of a low-value asset if the nature of the asset is such that when new the asset is
typically of low value. If the Company subleases an asset or expects to sublease an asset the
head lease does not qualify as a lease of a low-value asset.For all asset included in short-term leases or leases for which the underlying asset is of low
value/ all the short-term leases or leases for which the underlying asset is of low value the
Company shall recognise the lease payments associated with those leases as cost of relevant
asset or expenses in current profit or loss on a straight-line basis over the lease term.Except for the election of simple treatment as short-term lease or lease of a low-value asset as
mentioned above at the commencement date the Company shall recognise a right-of-use
asset and a lease liability.
3.30.3.1 Right-of-use assets
A right-of-use asset represents the right of the Company to use an asset over the life of a
lease.At the commencement date the Company shall initially measure the right-of-use asset at cost.
68Anhui Gujing Distillery Company Limited Notes to the Financial Statements
The cost of the right-of-use asset shall comprise:
(a) the amount of the initial measurement of the lease liability；
(b) any lease payments made at or before the commencement date less any lease incentives
received;
(c) any initial direct costs incurred by the lessee; and
(d) an estimate of costs to be incurred by the lessee in dismantling and removing the
underlying asset restoring the site on which it is located or restoring the underlying asset to
the condition required by the terms and conditions of the lease. The Company recognises and
measures the cost in accordance with the recognition criteria and measurement method for
estimated liabilities details please refer to Notes 3.12. Those costs incurred to produce
inventories shall be included in the cost of inventories.The right-of-use asset shall be depreciated according to the categories using straight‐ line
method or units of production method. If it is reasonably certain that the ownership of the
underlying asset shall be transferred to the lessee by the end of the lease term the depreciation
rate shall be determined based on the classification of the right-of- use asset and estimated
residual value rate from the commencement date to the end of the useful life of the underlying
asset. Otherwise the depreciation rate shall be determined based on the classification of the
right-of-use asset from the commencement date to the earlier of the end of the useful life of
the right-of-use asset or the end of the lease term.
3.30.3.2 Lease liability
A lease liability shall be measured at the present value of the lease payments that are not paid
at the commencement date. The lease payments include the followings:
(a) Fixed payments and in-substance fixed payments less any lease incentives if exist; and
(b) Variable lease payments that depend on an index or a rate; and
(c) The exercise price of a purchase option if the Company is reasonably certain to exercise
that option; and
(d) Payments of penalties for terminating the lease if the lease term reflects the lessee
exercising an option to terminate the lease; and
(e) Amounts expected to be payable by the lessee under residual value guarantees.
69Anhui Gujing Distillery Company Limited Notes to the Financial Statements
The Company uses the interest rate implicit in the lease to discount the lease ayments. If that
rate cannot be readily determined the Company uses the lessee’s incremental borrowing rate
as discount rate.The difference between the lease payment and its present value shall be recognized as
unrecognised financial charges calculated bases on the discount rate of the present value of
the lease payments in each period within the lease term and recorded as interest expense in
current profit or loss. Variable lease payments not included in the measurement of lease
liabilities shall be recognised in current profit or loss when incurred.After the commencement date the Company shall remeasure the lease liability based on the
revised present value of the lease payments and adjust the carrying amount of the right-of-use
asset if there is a change in the in-substance fixed payments or change in the amounts
expected to be payable under a residual value guarantee or change in an index or a rate used
to determine lease payments or change in the assessment or exercising of an option to
purchase the underlying asset or an option to extend or terminate the lease.
3.30.4 Lease modifications
Where there is a modification on operating lease the Company considers it to be a new lease
from the effective date of the modification and the advances from customer and receivables
related to lease payments before the modification shall be considered as payments for new
lease.
3.30.5 Sale and leaseback transactions
The Company shall determine whether the transfer of an asset under the sale and leaseback
transaction is a sale of that asset according to the policies in Note 3.27.
3.30.4.1 The Company as a seller (lessee)
If the transfer of the asset is not a sale the Company shall continue to recognise the
transferred asset and shall recognise a financial liability equal to the transfer proceeds. It shall
account for the financial liability according to Note 3.10. If the transfer of the asset is a sale
the Company shall measure the right-of-use asset arising from the leaseback at the proportion
of the previous carrying amount of the asset that relates to the right of use retained by the
Company. Accordingly the Company shall recognise only the amount of any gain or loss that
relates to the rights transferred to the buyer-lessor.
70Anhui Gujing Distillery Company Limited Notes to the Financial Statements
3.30.4.2 The Company as a buyer (lessor)
If the transfer of the asset is not a sale the Company shall not recognise the ransferred asset
and shall recognise a financial asset equal to the transfer proceeds. It shall account for the
financial asset according to Note 3.10. If the transfer of the asset is a sale the Company shall
account for the purchase of the asset applying applicable Accounting Standards of Business
Enterprises and for the lease applying the lessor accounting requirements.
3.31 Change of significant accounting policies and significant accounting estimates
3.31.1 Change of significant accounting policies
There is no Change of significant accounting policies in the current period.
3.31.2 Change of significant accounting estimates
There is no change of significant accounting estimates in the current period.Note 4 Taxes
4.1 Major taxes and tax rates
Tax Tax base Tax rate
Valur added in the course of sales of
Value added tax (VAT) 13% 9% 6%
goods and rendering of services
Tax by quantity: CNY 1.00 per kilogram or
litre of distrilled wine sold;
Consumption duty Taxable revnue
Tax by revenue: 20% on taxable revenue from
sale of distrilled wine
Urban maintenance and
Transaction tax payable 7% 5%
construction tax
Education surcharge Transaction tax payable 3%
Local education surcharge Transaction tax payable 2%
Corporate income tax (CIT) Taxable income 25%
The CIT rate applicable to the Company is 25%. The CIT rates applicable to certain
subsidiaries are presented below.
71Anhui Gujing Distillery Company Limited Notes to the Financial Statements
Entity CIT rate
Longrui Glass 15.00%
Ruisi Weier 15.00%
Runan Xinke 15.00%
Yashibo 2.50%
GJ Guest House 2.50%
Junlou Culture 2.50%
HHL Beverage 2.50%
Taxable income up to CNY 1 million: 2.50%
Xinjia Testing
Taxable income between CNY 1 million and CNY 3 million: 5.00%
Jiuan Electric 2.50%
Taxable income up to CNY 1 million: 2.50%
Jiudao Media
Taxable income between CNY 1 million and CNY 3 million: 5.00%
Anjie Technology 2.50%
Theme Hotel 2.50%
GJ Health Technology 15.00%
4.2 Preferential tax treatments
4.2.1 Ruisi Weier’s High-Tech Enterprise Status was jointly approved by the Anhui Science
and Technology Department (Anhui STD) Anhui Finance Department (Anhui FiD) and
Anhui Tax Office (Anhui PAT) through WanKeQiMi [2022] No. 482 and was issued the
High-Tech Enterprise Certificate (GR202234000476) with the validity term of 3 years. In
accordance with the Corporate Income Tax Law of the People’s Republic of China the CIT
rate applicable to Ruisi Weier for the period from 1 January 2022 to 31 Decmeber 2024 is
15%.
4.2.2 Longrui Glass’s High-Tech Enterprise Status was jointly approved by the Anhui STD
Anhui FiD and Anhui PAT through WanKeQiMi [2022] No. 482 and was issued the
High-Tech Enterprise Certificate (GR202234004359) with the validity term of 3 years. In
accordance with the Corporate Income Tax Law of the People’s Republic of China the CIT
rate applicable to Longrui Glass for the period from 1 January 2022 to 31 Decemeber 2024 is
15%.
72Anhui Gujing Distillery Company Limited Notes to the Financial Statements
4.2.3 Runan Xinke’s High-Tech Enterprise Status was jointly approved by the Anhui STD
Anhui FiD and Anhui PAT through WanKeGaoMi [2022] No. 49 and was issued the
High-Tech Enterprise Certificate (GR202134004920) with the validity term of 3 years. In
accordance with the Corporate Income Tax Law of the People’s Republic of China the CIT
rate applicable to Runan Xinke for the period from 1 January 2021 to 31 Decmeber 2023 is
15%.
4.2.4 GJ Health Technology’s High-Tech Enterprise Status was jointly approved by the Anhui
STD Anhui FiD and Anhui PAT through WanKeGaoMi and was issued the High-Tech
Enterprise Certificate (GR202134004641) with the validity term of 3 years. In accordance
with the Corporate Income Tax Law of the People’s Republic of China the CIT rate
applicable to GJ Health Technology for the period from 1 January 2021 to 31 Decmeber 2023
is 15%.
4.2.5 In accordance with MoF&SAT Announcement [2021] No. 12 and [2021] No. 8 jointly
issued by the Ministry for Finance and State Administration of Taxation 87.5% of the first
CNY 1 million annual taxable income of a qualified small entreprise with small profit for the
period from 1 January 2021 to 31 Decmeber 2022 is exempted from CIT and the CIT rate
applicable to the remaining 12.5% is 20%; In accordance with MoF&SAT Announcement
[2022] No. 13 jointly issued25% of the annual taxable income between CNY 1 million and
CNY 3 million of a qualified small entreprise with small profit for the period from 1 January
2022 to 31 December 2024 is exempted from CIT and the CIT rate applicable to the
remaining 12.5% is 20%; GJ Guest HouseTheme Hotel Anjie Technology Junlou Culture
HHL Beverage Xinjia Testing Jiuan Electric Jiudao Media and Yashibo are eligible to this
preferential tax treatment.Note 5 Notes to the consolidated financial statements
5.1 Monetary funds
31/12/202231/12/2021
Cash on hand 111642.11 135129.66
Cash at bank 13698187278.75 11891283646.58
Other monetary funds 74262220.44 33503995.52
Total 13772561141.30 11924922771.76
73Anhui Gujing Distillery Company Limited Notes to the Financial Statements
Cash at bank as of the statement date included fixed term deposits Certificate of deposit for
bank acceptance at CNY 600 million other monetary funds as of the statement date included
margin deposits not eligible for early redemption at CNY 67.19 million. Except for the
pre-mentioned monetary funds as of the statement date was not subject to limitation on usage
such as pledging or freezing or risk on recovery.
5.2 Financial assets held for trading
31/12/202231/12/2021
FVTPL 1782687769.66 2661103876.68
T/o: Structural financial products 1580352899.17 2457565232.32
T/o: Fund investments 202334870.49 203538644.36
Total 1782687769.66 2661103876.68
5.3 Accounts receivable
5.3.1 Disclosure by age group
Age group 31/12/2022 31/12/2021
Within 1 year 60886443.44 97023731.05
T/o: Within 6 months 57829416.75 92114086.85
T/o: 7 months to 1 years 3057026.69 4909644.20
1 to 2 years 10382550.23 883133.28
2 to 3 years 405162.30 137464.27
Over 3 years 137464.27 1146581.68
Gross 71811620.24 99190910.28
Less: Impairment allowance 9122951.30 10185106.11
Net 62688668.94 89005804.17
5.3.2 Dislcosure by method of impairment
31/12/2022
Gross Impairment allowance
Net
Amount % of total Amount Impairment %
Individual assessment 7792783.72 10.85 7792783.72 100.00 -
74Anhui Gujing Distillery Company Limited Notes to the Financial Statements
31/12/2022
Gross Impairment allowance
Net
Amount % of total Amount Impairment %
Portfolio assessment 64018836.52 89.15 1330167.58 2.08 62688668.94
T/o: Group 1 - - - - -
T/o: Group 2 64018836.52 89.15 1330167.58 2.08 62688668.94
Total 71811620.24 100.00 9122951.30 12.70 62688668.94
(Continued)
31/12/2021
Gross Impairment allowance
Net
Amount % of total Amount Impairment %
Individual assessment 7792783.72 7.86 7792783.72 100.00 -
Portfolio assessment 91398126.56 92.14 2392322.39 2.62 89005804.17
T/o: Group 1
T/o: Group 2 91398126.56 92.14 2392322.39 2.62 89005804.17
Total 99190910.28 100.00 10185106.11 10.27 89005804.17
Group 2 Receivables
31/12/2022
Age group
Gross Impairment allowance Impairment %
Within 1 year 60886443.44 731145.50 1.20
T/o: Within 6 months 57829416.75 578294.17 1.00
T/o: 7 months to 1 years 3057026.69 152851.33 5.00
1 to 2 years 2589766.51 258976.65 10.00
2 to 3 years 405162.30 202581.16 50.00
Over 3 years 137464.27 137464.27 100.00
Total 64018836.52 1330167.58 2.08
(Continued)
Age group 31/12/2021
75Anhui Gujing Distillery Company Limited Notes to the Financial Statements
Gross Impairment allowance Impairment %
Within 1 year 89230947.33 1088695.25 1.22
T/o: Within 6 months 84321303.13 843213.03 1.00
T/o: 7 months to 1 years 4909644.20 245482.22 5.00
1 to 2 years 883133.28 88313.32 10.00
2 to 3 years 137464.27 68732.14 50.00
Over 3 years 1146581.68 1146581.68 100.00
Total 91398126.56 2392322.39 2.62
See Note 3.10 for recognition and measurement of impairment by portfolio.
5.3.3 Movement of impairment allowance
Movement
31/12/2021 Business combination not under
Provision
common control
Individually significant receivables subject to
7792783.72--
individual impairment assessment
Individually insignificant receivables subject to
individual impairment assessment
Group 2 2392322.39 63181.57 32402.90
Total 10185106.11 63181.57 32402.90
(Continued)
Movement
31/12/2022
Reversal or recovery Release or write-off
Individually significant receivables subject to
--7792783.72
individual impairment assessment
Individually insignificant receivables subject to
individual impairment assessment
Group 2 1157739.28 - 1330167.58
Total 1157739.28 - 9122951.30
5.3.4 Top-five accounts receivable as of the statement date
76Anhui Gujing Distillery Company Limited Notes to the Financial Statements
Gross % of gross accounts receivable Impairment allowance
Top 1 9558231.54 13.31 95582.32
Top 2 7792783.72 10.85 7792783.72
Top 3 7637588.66 10.64 76375.89
Top 4 6136326.52 8.55 61363.27
Top 5 5030151.83 7.00 50301.52
Total 36155082.27 50.35 8076406.72
5.4 Receivables held for factoring
5.4.1 General disclosure
31/12/2022
Type
Gross Impairment allowance Net
Bank acceptance 217419441.32 217419441.32
Commercial acceptance - - -
Total 217419441.32 217419441.32
(Continued)
31/12/2021
Type
Gross Impairment allowance Net
Bank acceptance 545204103.42 - 545204103.42
Commercial acceptance - - -
Total 545204103.42 - 545204103.42
5.4.2 Notes receivable transferred by endorsement or cashed by discount which are not
matured as of the statement date
Type Amount derecognised Amount not derecognised
Bank acceptance 3001370176.42
Notes receivable cashed with discount or transferred with endorsement were originally issued
by banks with advanced credit rating. Due the credit rating of the issuing banks credit risks
and risks of delayed payment are relatively low and transferred from the Company upon
cashing or transfer. These notes receivable were therefore derecognised upon cashing or
77Anhui Gujing Distillery Company Limited Notes to the Financial Statements
transfer.
5.4.3 No accounts receivable were resulted from reclassification of notes receivables due to
issuers’ default.
5.4.4 Dislcosure by method of impairment
31/12/2022
Gross Impairment allowance
Net
Amount % of total Amount Impairment %
Individual assessment - - - - -
Portfolio assessment 217419441.32 100.00 - - 217419441.32
T/o: Group 1 - - - - -
T/o: Group 2 217419441.32 100.00 - - 217419441.32
Total 217419441.32 100.00 - - 217419441.32
(Continued)
31/12/2021
Gross Impairment allowance
Net
Amount % of total Amount Impairment %
Individual assessment - - - - -
Portfolio assessment 545204103.42 100.00 - - 545204103.42
T/o: Group 1 -
T/o: Group 2 545204103.42 100.00 - - 545204103.42
Total 545204103.42 100.00 - - 545204103.42
Note 1: No Group 1 receivable was subject to impairment assessment.Note 2: The Company assessed impairment for Group 2 receivables as of the statement date.Upon the assessment the Company believed that Group 2 receivables were unlikely subject to
loss resulted from the default by issuing banks or other issuers and therefore not subject to
significant credit risk.
5.4.5 Movement of impairment allowance
Not applicable.
78Anhui Gujing Distillery Company Limited Notes to the Financial Statements
5.5 Prepayments
5.5.1 Disclosure by age group
31/12/202231/12/2021
Age group
Amount % of total Amount % of total
Within 1 year 233344417.80 99.72 156395547.90 99.89
1 to 2 years 631243.89 0.27 173426.53 0.11
2 to 3 years 20000.00 0.01 1996.56 -
Over 3 years - - - -
Total 233995661.69 100.00 156570970.99 100.00
5.5.2 Top-five venders as of the statement date by prepayment balance
31/12/2022 % of total
Top 1 174731684.07 74.67
Top 2 15243789.09 6.51
Top 3 9645407.73 4.12
Top 4 3214030.00 1.37
Top 5 1110794.05 0.47
Total 203945704.94 87.14
5.6 Other receivables
5.6.1 General disclosure
31/12/202231/12/2021
Interests receivable
Dividends receivable
Other receivables 73337415.74 71753212.24
Total 73337415.74 71753212.24
5.6.2 Other receivables
(1) Disclosure by age group
Age group 31/12/2022 31/12/2021
79Anhui Gujing Distillery Company Limited Notes to the Financial Statements
Age group 31/12/2022 31/12/2021
Within 1 year 68032959.87 68887383.04
T/o: Within 6 months 66026552.80 62942239.54
T/o: 7 months to 1 years 2006407.07 5945143.50
1 to 2 years 5801770.49 2808217.47
2 to 3 years 1686854.49 2530226.11
Over 3 years 44645231.37 43669449.88
Gross 120166816.22 117895276.50
Less: Impairment allowance 46829400.48 46142064.26
Net 73337415.74 71753212.24
(2) Disclosure by nature
31/12/202231/12/2021
Security investments 38434247.10 38857584.88
Margin deposits 9840126.80 8788917.25
Advanced travel expenses 1172804.12 1219958.15
Rentals and utilities receivable 5206927.45 7910881.41
Others 65512710.75 61117934.81
Gross 120166816.22 117895276.50
Less: Impairment allowance 46829400.48 46142064.26
Net 73337415.74 71753212.24
(3) Disclosure by method of impairment
A. Disclosure by the 3-stage m odel as of the statement date
Gross Impairment allowance Net
Stage 1 81732569.12 8395153.38 73337415.74
Stage 2
Stage 3 38434247.10 38434247.10 -
Total 120166816.22 46829400.48 73337415.74
Details of Stage 1 receivables as of the statement date
80Anhui Gujing Distillery Company Limited Notes to the Financial Statements
Expected loss rate for the Impairment
Gross Net
next 12 months in % allowance
Individual assessment
Portfolio assessment 81732569.12 10.27 8395153.38 73337415.74
T/o: Group 1
T/o: Group 2 81732569.12 10.27 8395153.38 73337415.74
Total 81732569.12 10.27 8395153.38 73337415.74
Details of Group 2 receivables as of the statement date
31/12/2022
Age group
Gross Impairment allowance Impairment %
Within 1 year 68032959.87 760564.80 1.12
T/o: Within 6 months 66026552.80 660244.43 1.00
T/o: 7 months to 1 years 2006407.07 100320.37 5.00
1 to 2 years 5801770.49 580177.04 10.00
2 to 3 years 1686854.49 843427.27 50.00
Over 3 years 6210984.27 6210984.27 100.00
Total 81732569.12 8395153.38 10.27
Details of Stage 3 receivables as of the statement date
Expected loss rate for the Impairment
Gross Net
next 12 months in % allowance
Individual assessment 38434247.10 100.00 38434247.10 -
Portfolio assessment
T/o: Group 1
T/o: Group 2
Total 38434247.10 100.00 38434247.10 -
Details of receivables subject to individual assessment as of the statement date
31/12/2022
81Anhui Gujing Distillery Company Limited Notes to the Financial Statements
Impairment Reason for
Gross Impairment %
allowance impairment
Hengxin Securities Co. Ltd. 28733899.24 28733899.24 100.00 In bankruptcy
Jianqiao Securities Co. Ltd. 9700347.86 9700347.86 100.00 In bankruptcy
Total 38434247.10 38434247.10 100.00 -
B. Disclosure by the 3-stage model as of 31 December 2021
Gross Impairment allowance Net
Stage 1 79037691.62 7284479.38 71753212.24
Stage 2
Stage 3 38857584.88 38857584.88 -
Total 117895276.50 46142064.26 71753212.24
Details of Stage 1 receivables as of 31 December 2021
Expected loss rate for the Impairment
Gross Net
next 12 months in % allowance
Individual assessment
Portfolio assessment 79037691.62 9.22 7284479.38 71753212.24
T/o: Group 1
T/o: Group 2 79037691.62 9.22 7284479.38 71753212.24
Total 79037691.62 9.22 7284479.38 71753212.24
Details of Group 2 receivables as of 31 December 2021
31/12/2021
Age group
Gross Impairment allowance Impairment %
Within 1 year 68887383.04 926679.58 1.35
T/o: Within 6 months 62942239.54 629422.41 1.00
T/o: 7 months to 1 years 5945143.50 297257.17 5.00
1 to 2 years 2808217.47 280821.74 10.00
2 to 3 years 2530226.11 1265113.06 50.00
Over 3 years 4811865.00 4811865.00 100.00
82Anhui Gujing Distillery Company Limited Notes to the Financial Statements
31/12/2021
Age group
Gross Impairment allowance Impairment %
Total 79037691.62 7284479.38 9.22
Details of Stage 3 receivables as of 31 December 2021
Expected loss rate for the Impairment
Gross Net
next 12 months in % allowance
Individual assessment 38857584.88 100.00 38857584.88 -
Portfolio assessment -
T/o: Group 1 -
T/o: Group 2 -
Total 38857584.88 100.00 38857584.88 -
Details of receivables subject to individual assessment as of 31 December 2021
31/12/2021
Impairment Reason for
Gross Impairment %
allowance impairment
Hengxin Securities Co. Ltd. 28966894.41 28966894.41 100.00 In bankruptcy
Jianqiao Securities Co. Ltd. 9890690.47 9890690.47 100.00 In bankruptcy
Total 38857584.88 38857584.88 100.00 -
(4) Movement of impairment allowance
Movement
Business
31/12/2021 combination not Reversal or Release or 31/12/2022
Provision
under common recovery write-off
control
Individual
38857584.88423337.7838434247.10
assessment
Portfolio
7284479.381768883.09654209.094000.008395153.38
assessment
Total 46142064.26 1768883.09 1077546.87 4000.00 46829400.48
83Anhui Gujing Distillery Company Limited Notes to the Financial Statements
(5) Top-five other receivables as of the statement date
% of total gross Impairment
Debtor Nature 31/12/2022 Age group
other receivables allowance
Top 1 Security investment 28733899.24 Over 3 years 23.91 28733899.24
Top 2 Security investment 9700347.86 Over 3 yearss 8.07 9700347.86
Top 3 Other 8750550.67 Within 6 months 7.28 87505.51
Top 4 Other 5351832.85 Within 6 months 4.45 53518.33
Top 5 Other 4446992.00 Within 6 months 3.70 44469.92
Total 56983622.62 47.41 38619740.86
5.7 Inventories
5.7.1 General disclosure
31/12/2022
Gross Impairment allowance Net
Raw materials and packaging 384626636.25 16449308.79 368177327.46
Semi-finished goods and work in
4263603307.090.004263603307.09
progress
Merchandises 1431913213.36 5587757.03 1426325456.33
Total 6080143156.70 22037065.82 6058106090.88
(Continued)
31/12/2021
Gross Impairment allowance Net
Raw materials and packaging 236485211.32 22919192.93 213566018.39
Semi-finished goods and work in
3680675328.830.003680675328.83
progress
Merchandises 776158681.46 6943356.38 769215325.08
Total 4693319221.61 29862549.31 4663456672.30
5.7.2 Movement of impairment allowance
31/12/2021 Increase Decrease 31/12/2022
84Anhui Gujing Distillery Company Limited Notes to the Financial Statements
Business
combination
Reversal and
Provision not under Other
release
common
control
Raw materials and
22919192.937470331.81-13940215.95-16449308.79
packaging
Merchandises 6943356.38 2832081.59 504965.47 4692646.41 - 5587757.03
Total 29862549.31 10302413.40 504965.47 18632862.36 - 22037065.82
5.8 Contract assets
31/12/202231/12/2021
Project has been completed and the
-
accounts have not been settled 1855188.15
Total 1855188.15 -
5.9 Other current assets
31/12/202231/12/2021
Loans securied by treasury bonds 60000000.00 76205000.00
Interests on deposits 3579838.89 54529762.09
Deductible taxes 61988886.62 47487460.47
Total 125568725.51 178222222.56
5.10 Long-term equity investments
Movement
Investment
Investee 31/12/2021 Investment OCI Other equity
Contribution income at
withdrawal adjustment movement
equity
A. Associates -
Beijing Guge Trading
Co. Ltd. (Guge 5312600.78 171924.95
Trading)
Anhui Xunfeijiuzhi 3900000.00 769710.25
85Anhui Gujing Distillery Company Limited Notes to the Financial Statements
Movement
Investment
Investee 31/12/2021 Investment OCI Other equity
Contribution income at
withdrawal adjustment movement
equity
Technology Co. Ltd
( Xunfeijiuzhi)
Total 5312600.78 3900000.00 941635.20 - -
(Continued)
Movement
Cumulative
Dividend or profit Impairment
Investee 31/12/2022 impairment
appropriation allowance Others
allowance
declared recognised
A. Associates -
Guge Trading - - - 5484525.73 -
Xunfeijiuzhi 4669710.25
Total - - - 10154235.98 -
5.11 Other equity instrument investment
31/12/202231/12/2021
Anhui Mingguang Village
Commercial Bank (Mingguang VCB) 56447789.94 54542418.50
Total 56447789.94 54542418.50
Supplementary disclosure
Dividend
income Cumulative Cumulative Reclassification from OCI Reason for designation
recognised in gain loss to retained earnings as FVTOCI
the period
Mingguang On the basis of purpose of
957949.082599092.14
VCB investment
5.12 Investment properties
Houses and buildings Land use rights Total
A. Costs
86Anhui Gujing Distillery Company Limited Notes to the Financial Statements
Houses and buildings Land use rights Total
1.31/12/20218680555.752644592.0011325147.75
2. Increase 11793433.36 - 11793433.36
(1)Reclassification from Fixed assets 11793433.36 - 11793433.36
3. Decrease - - -
4.31/12/202220473989.112644592.0023118581.11
B. Cumulative depreciation
1.31/12/20216437593.71811752.987249346.69
2. Increase 2416325.90 56026.56 2472352.46
(1) Recognition 691836.45 56026.56 747863.01
(2)Reclassification from Fixed assets 1724489.45 1724489.45
3. Decrease - - -
4.31/12/20228853919.61867779.549721699.15
C. Impairment allowance
1.31/12/2021---
2. Increase - - -
3. Decrease - - -
4.31/12/2022---
D. Net value
1. As of the statement date 11620069.50 1776812.46 13396881.96
2. As of 31/12/2021 2242962.04 1832839.02 4075801.06
5.13 Fixed assets
5.13.1 Disclosure by category
31/12/202231/12/2021
Fixed assets 2741844586.30 1984063975.87
Fixed asset disposals - -
Total 2741844586.30 1984063975.87
5.13.2 Fixed assets
5.13.2.1 General disclosure
87Anhui Gujing Distillery Company Limited Notes to the Financial Statements
Houses and Transportation Administrative and
Machinery Total
buildings vehicles other devices
A. Costs
1.31/12/20212227823579.111330919645.2371233228.12268969064.533898945516.99
2. Increase 520350188.40 348624972.04 10650251.09 150045759.84 1029671171.37
(1) Purchase 7634154.90 24341414.28 6551917.38 15482368.45 54009855.01
(2) Reclassification
from construction in 378715708.14 313693118.04 - 125814278.36 818223104.54
progress
(3) Business
134000325.3610590439.724098333.718749113.03157438211.82
combination
3. Decrease 21351411.88 14098783.83 2274159.21 10572001.91 48296356.83
(1) Disposal or scrap 9557978.52 14098783.83 2274159.21 10572001.91 36502923.47
(2) Reclassification to
11793433.36---11793433.36
Investment properties
4.31/12/20222726822355.631665445833.4479609320.00408442822.464880320331.53
B. Cumulative
depreciation
1.31/12/2021939955700.88756251767.5161387409.53152316243.681909911121.60
2. Increase 61147484.87 88261091.55 8490741.46 97031493.33 254930811.21
(1) Recognition 45468328.63 84063463.28 5483002.77 90546774.77 225561569.45
(2) Business
15679156.244197628.273007738.696484718.5629369241.76
combination
3. Decrease 7383653.04 12073362.71 1919982.59 10074017.95 31451016.29
(1) Disposal or scrap 5659163.59 12073362.71 1919982.59 10074017.95 29726526.84
(2) Reclassification to
1724489.45---1724489.45
Investment properties
4.31/12/2022993719532.71832439496.3567958168.40239273719.062133390916.52
C. Impairment
allowance
1.31/12/20213116594.391271091.35-582733.784970419.52
88Anhui Gujing Distillery Company Limited Notes to the Financial Statements
Houses and Transportation Administrative and
Machinery Total
buildings vehicles other devices
2. Increase - 674947.51 - - 674947.51
(1) Recognition - 674947.51 - - 674947.51
3. Decrease 520384.49 38818.94 - 1334.89 560538.32
(1) Disposal or scrap 520384.49 38818.94 - 1334.89 560538.32
4.31/12/20222596209.901907219.92-581398.895084828.71
D. Net value
1. As of the statement
1730506613.02831099117.1711651151.60168587704.512741844586.30
date
2. As of 31/12/2021 1284751283.84 573396786.37 9845818.59 116070087.07 1984063975.87
5.13.2.2 Temporarily idle fixed assets
Cumulative
Cumulative
Cost impairment Net value Note
depreciation
allowance
Houses and buildings 7453258.02 4767039.34 2596209.90 90008.78
Machinery 9898442.87 7843337.12 1907219.92 147885.83
Administrative and
867531.26260172.43581398.8925959.94
other devices
Total 18219232.15 12870548.89 5084828.71 263854.55
5.13.2.3 Fixed assets with uncompleted ownership registration
Net value Remark
Houses and buildings 860697282.10 Registration in progress
Total 860697282.10 ——
5.13.2.4 Fixed assets with restriction as of the statement date
Cumulative
Cumulative
Cost impairment Net value Note
depreciation
allowance
Houses and buildings 129817900.00 15138636.48 - 114679263.52
89Anhui Gujing Distillery Company Limited Notes to the Financial Statements
Cumulative
Cumulative
Cost impairment Net value Note
depreciation
allowance
Total 129817900.00 15138636.48 - 114679263.52
5.14 Construction in progress
5.14.1 Disclosure by category
31/12/202231/12/2021
Construction in progress 2454703251.44 1064134904.21
Materials held for construction - -
Total 2454703251.44 1064134904.21
5.14.2 Construction in progress
5.14.2.1 General disclosure
31/12/202231/12/2021
Impairment Impairment
Gross Net Gross Net
allowance allowance
Smart Zone 2043434953.17 - 2043434953.17 700794613.29 - 700794613.29
Theme Hotel 252169603.40 - 252169603.40 61431126.99 - 61431126.99
GJ Plant #12 Wine
48337480.17-48337480.1710666666.95-10666666.95
Cellar
Glass bottle production
line automation 23558436.29 - 23558436.29 - - -
technical reform project
Suizhou Plant 57312769.08 - 57312769.08 266102852.17 - 266102852.17
Other projects 29890009.33 - 29890009.33 25139644.81 - 25139644.81
Total 2454703251.44 - 2454703251.44 1 064134904.21 - 1064134904.21
5.14.2.2 Detailed disclosure
Budget CNY million 31/12/2021 Increase
Smart Zone 8289.66 700794613.29 1777481852.91
90Anhui Gujing Distillery Company Limited Notes to the Financial Statements
Budget CNY million 31/12/2021 Increase
Theme Hotel 499.00 61431126.99 190738476.41
GJ Plant #12 Wine Cellar 162.50 10666666.95 80640382.85
Glass bottle production line automation technical
59.40-23558436.29
reform project
Suizhou Plant 600.00 266102852.17 128196537.42
Other projects 159.11 25139644.81 33097425.53
Total 9769.67 1064134904.21 2233713111.41
(Continued)
Reclassification to
Other decrease 31/12/2022
fixed assets
Smart Zone 434841513.03 - 2043434953.17
Theme Hotel - - 252169603.40
GJ Plant #12 Wine Cellar 42969569.63 - 48337480.17
Glass bottle production line automation technical
--23558436.29
reform project
Suizhou Plant 316931541.11 20055079.40 57312769.08
Other projects 23480480.77 4866580.24 29890009.33
Total 818223104.54 24921659.64 2454703251.44
(Continued)
Cumulative T/o: Borrowing
% of budget % of completion capitalisation of costs capitalised in
borrowing costs the period
Smart Zone 29.92 33.73 - -
Theme Hotel 50.53 51.44 - -
GJ Plant #12 Wine Cellar 56.19 56.19 - -
Glass bottle production line
39.6695.00
automation technical reform project
91Anhui Gujing Distillery Company Limited Notes to the Financial Statements
Cumulative T/o: Borrowing
% of budget % of completion capitalisation of costs capitalised in
borrowing costs the period
Suizhou Plant 65.74 85.00 4652390.38 2124407.65
Other projects 36.60 36.60 - -
Total 4652390.38 2124407.65
(Continued)
Current period
Source of funding
capitalisation rate
Smart Zone - Self-funded public financing
Theme Hotel - Self-funded
GJ Plant #12 Wine Cellar - Self-funded
Glass bottle production line automation
- Self-funded
technical reform project
Suizhou Plant 3.8 Self-funded loans
Other projects - Self-funded
Total -
Increase of construction in progress for 130.68% year over year was mainly resulted from
investment in Smart Zone and Theme Hotel in the period.
5.15 Right-of-use assets
Houses and buildings Machinery Total
A. Costs -
1.31/12/202157050481.741330929.5758381411.31
2. Increase 3203024.87 - 3203024.87
3. Decrease 1843425.94 - 1843425.94
4.31/12/202258410080.671330929.5759741010.24
B. Cumulative depreciation
1.31/12/202114010539.12443643.2214454182.34
92Anhui Gujing Distillery Company Limited Notes to the Financial Statements
Houses and buildings Machinery Total
2. Increase 14124439.52 443643.22 14568082.74
3. Decrease 1843425.94 - 1843425.94
4.31/12/202226291552.70887286.4427178839.14
C. Impairment allowance
1.31/12/2021---
2. Increase - - -
3. Decrease - - -
4.31/12/2022---
D. Net value
1. As of the statement date 32118527.97 443643.13 32562171.10
2. As of 01/01/2022 43039942.62 887286.35 43927228.97
5.16 Intangible assets
5.16.1 General disclosure
Patents and
Land use rights Software Total
trademarks
A. Costs
1.31/12/20211001763740.75129251165.21253045146.191384060052.15
2. Increase 86716980.02 1320890.29 1950130.93 89988001.24
(1) Purchase 74716419.02 772851.32 - 75489270.34
(2) Reclassification from
-343362.80-343362.80
construction in progress
(3) Business combination 12000561.00 204676.17 1950130.93 14155368.10
3. Decrease - 8308231.78 - 8308231.78
(1) Disposal - 8308231.78 - 8308231.78
4.31/12/20221088480720.77122263823.72254995277.121465739821.61
B. Cumulative amortisation
1.31/12/2021181669781.8769365956.7669555470.91320591209.54
93Anhui Gujing Distillery Company Limited Notes to the Financial Statements
Patents and
Land use rights Software Total
trademarks
2. Increase 23081637.49 19350453.03 2319201.89 44751292.41
(1) Recognition 22099398.58 19259687.73 1344130.55 42703216.86
(2) Business combination 982238.91 90765.30 975071.34 2048075.55
3. Decrease - 7894709.78 - 7894709.78
(1) Disposal - 7894709.78 - 7894709.78
4.31/12/2022204751419.3680821700.0171874672.80357447792.17
C. Impairment allowance - -
1.31/12/2021----
2. Increase - 166872.39 - 166872.39
(1) Recognition 166872.39 - 166872.39
3. Decrease - - - -
(1) Disposal - - - -
4.31/12/2022-166872.39-166872.39
D. Net value - - - -
1. As of the statement date 883729301.41 41275251.32 183120604.32 1108125157.05
2. As of 31/12/2021 820093958.88 59885208.45 183489675.28 1063468842.61
5.16.2 Intangible assets pledged as of the statement date
Cumulative Impairment
Cost Net value Note
amortisation allowance
Land use rights 11124000.00 1004669.68 - 10119330.32
Trademark rights 176630692.63 7514092.63 - 1 69116600.00
Total 187754692.63 8518762.31 - 179235930.32
5.16.3 No intangible assets as of the statement date was with pending ownership registration.
94Anhui Gujing Distillery Company Limited Notes to the Financial Statements
5.17 Goodwill
5.17.1 General disclosure
Increase Decrease
Investee 31/12/2021 31/12/2022
Business combination Other Disposal Other
HHL Distillery 478283495.29 478283495.29
Mingguang Distillery 60686182.07 60686182.07
Treasure Distillery 22394707.65 22394707.65
Total 561364385.01 561364385.01
5.17.2 Asset groups associated with goodwill
Asset group CNY million
Composition of asset Unrecognised goodwill Change in
Investee Book Allocated Determination
group attributable to Total the period
value goodwill
non-controlling interest
Active markets are available for the products of the asset group to
HHL Operating assets of
1115.42 478.28 459.53 2053.23 which goodwill is allocated and hence the asset group is capable of No
Distillery HHL Distillery
generating identifiable separate cash flows.Active markets are available for the products of the asset group to
Mingguang Operating assets of
207.41 60.69 40.46 308.55 which goodwill is allocated and hence the asset group is capable of No
Distillery Mingguang Distillery
generating identifiable separate cash flows.Treasure Operating assets of 84.81 22.39 14.93 122.13 Active markets are available for the products of the asset group to No
95Anhui Gujing Distillery Company Limited Notes to the Financial Statements
Asset group CNY million
Composition of asset Unrecognised goodwill Change in
Investee Book Allocated Determination
group attributable to Total the period
value goodwill
non-controlling interest
Distillery Treasure Distillery which goodwill is allocated and hence the asset group is capable of
generating identifiable separate cash flows.Note: The book value of HHL Distillery Treasure DistilleryMingguang Distillery asset group did not include surplus assets and non-operating liabilities of HHL Distillery.
5.17.3 Impairment assessment
The recoverable amounts of the asset groups were determined by the present value of their respective future cash flows. Detailed forecasted cash
flows for the next 5 years and further forecasted cash flows for periods starting from the 6th year from the statement date applicable to each asset
group was approved by the management of the Company. The discount rates adopted reflect the current time value of money and the specific
risks of the asset groups. Key assumptions such revenue cost of sales growth rate and expenses were used in the forecast. These key
assumptions had been developed by taking into consideration factors such as historical profitability growth trend sector conditions and
management expection for future market development.Following the impairment test and with reference to the Appraisal Reports (HuayaZhengxinPingBaoZi [2023] No. A07-0006 and
HuayaZhengxinPingBaoZi [2023] No. A07-0005) issued by Beijing Huaya Zhengxin Assets Appraisal Co. Ltd. the recoverable amounts of the
asset groups were not lower than their respective value inclusive of goodwill as of the statement date. No impairment was identified upon the
impairment test.
5.17.4 Impact of impairment assessment
See Note 11.1 for further details.
96Anhui Gujing Distillery Company Limited Notes to the Financial Statements
5.18 Long-term deferred expenses
31/12/2021 Capitalisation Amortisation Other decrease 31/12/2022
Experience Centre 30453147.53 1226458.31 13624219.52 - 18055386.32
Waste Water Plant 1922131.15 - 922622.95 - 999508.20
HHL Winery and
4470296.69-3700243.10-770053.59
Museum
GJCCP Culture Centre 2363636.37 - 1181818.19 - 1181818.18
Yantai Distilled Wine
448182.86-448182.86--
Culture Project
Outdoor Plant - 17459514.76 872975.76 - 16586539.00
Miscellaneous 16250943.43 7172373.69 10003645.10 - 13419672.02
Total 55908338.03 25858346.76 30753707.48 - 51012977.31
5.19 Deferred tax assets (DTAs) and deferred tax liabilities (DTLs)
5.19.1 DTAs before offset
31/12/202231/12/2021
Deductible temporary Deductible temporary
DTA DTA
difference difference
Asset impairment
27288766.926642674.5734832968.838597940.21
allowance
Credit impairment
55952351.7813967271.0356327170.3714078521.69
allowance
Unrealised profit 100142928.48 25035732.12 89880690.08 22470172.52
Deferred income 103714978.95 25483351.68 91101512.05 22355416.63
Recoverable loss 337681202.44 77041463.86 3275424.29 235799.84
Accrued employee
6380952.10957142.8214728894.073682223.52
benefits
Accrued expenses
1104571137.01275740361.64845357525.22211333743.87
and rebates
Fair value change or 1024977.31 252229.65 4296727.84 1074181.96
97Anhui Gujing Distillery Company Limited Notes to the Financial Statements
31/12/202231/12/2021
Deductible temporary Deductible temporary
DTA DTA
difference difference
receivables held for
factoring
Total 1736757294.99 425120227.37 1139800912.75 283828000.24
5.19.2 DTLs before offset
31/12/202231/12/2021
Taxable temporary Taxable temporary
DTL DTL
difference difference
Fixed asset depreciation 157708682.09 39427170.52 74959073.18 18739768.30
Purchase price allocation 697149707.15 168589543.40 689376361.16 172344090.29
Fair value change of financial
32687769.668171942.4211103876.682775969.16
asset held for trading
Unrealised profit 257338901.32 64334725.33 - -
Fair value change of Other
2599092.14649773.03693720.70173430.18
equity instrument investments
Total 1147484152.36 281173154.70 776133031.72 194033257.93
5.20 Other non-current assets
31/12/202231/12/2021
Prepayment for machinery 6870532.00 7220318.40
Total 6870532.00 7220318.40
5.21 Short-term borrowings
31/12/202231/12/2021
Loans with securities by physical
34267952.9710008555.55
assets
Loans with securities by intangible
48964223.3420026583.34
assets
Total 83232176.31 30035138.89
98Anhui Gujing Distillery Company Limited Notes to the Financial Statements
5.22 Notes payable
5.22.1 Disclosure by type
Type 31/12/2022 31/12/2021
Bank acceptance 695740000.00 127114336.16
Commercial acceptance - -
Total 695740000.00 127114336.16
5.22.2 No overdue note payable as of the statement date.
5.23 Accounts payable
5.23.1 Disclosure by nature
31/12/202231/12/2021
Payable for goods 1123707643.38 605774178.94
Payable for construction and
539292035.62253893258.27
machinery
Others 391063880.15 160769884.68
Total 2054063559.15 1020437321.89
5.23.2 Top-five venders as of the statement date by account payable balance
31/12/2022 Reason for remaining unsettled
Top 1 1483462.21 Tail payment for construction
Top 2 923262.66 Payable for goods
Top 3 696587.78 Tail payment for construction
Top 4 490485.32 Tail payment for construction
Top 5 393392.70 Tail payment for construction
Total 3987190.67
5.24 Contract liabilities
31/12/202231/12/2021
Advanced receipts for goods 826636478.35 1825447705.85
Total 826636478.35 1825447705.85
99Anhui Gujing Distillery Company Limited Notes to the Financial Statements
5.25 Employee benefits payable
5.25.1 General disclosure
31/12/2021 Accrual Decrease 31/12/2022
A. Short-term benefits 709463139.46 3123294844.82 3039166444.73 793591539.55
B. Post-employment benefits
208648.28156313983.15154975865.351546766.08
–Defined comtribution plans
C. Termination benefits - 715584.90 715584.90 -
D. Other long-term benefits
----
due within 1 year
Total 709671787.74 3280324412.87 3194857894.98 795138305.63
5.25.2 Short-term benefits
31/12/2021 Accrual Decrease 31/12/2022
A. Salaries wages allowances and
630779825.282739300272.792658708352.38711371745.69
subsidies
B. Welfare - 97032343.74 97032343.74 -
C. Social securities 445462.22 69648018.60 69673296.39 420184.43
T/o: Medical insurance 445427.72 65441829.58 65467976.27 419281.03
T/o: Work-place injury insurance 34.50 4206189.02 4205320.12 903.40
D. Housing funds 5653470.40 101299672.06 100179172.05 6773970.41
E. Union fund and education fund 69520657.48 32664012.65 30370415.99 71814254.14
F. Annuity 3063724.08 83350524.98 83202864.18 3211384.88
Total 709463139.46 3123294844.82 3039166444.73 793591539.55
5.25.3 Post-employement benefits – Defined contribution plans
31/12/2021 Accrual Decrease 31/12/2022
A. Basic pension 208648.28 151413486.57 150076781.97 1545352.88
B. Job-loss insurance - 4900496.58 4899083.38 1413.20
Total 208648.28 156313983.15 154975865.35 1546766.08
5.26 Taxes and fees payable
100Anhui Gujing Distillery Company Limited Notes to the Financial Statements
31/12/202231/12/2021
VAT 256705264.84 154597583.14
Consumption duty 502091276.19 406331487.38
CIT 335723169.21 255882481.65
Individual income tax 12550946.18 2674057.91
Urban maintenance and construction tax 40572819.42 20431543.35
Stamp duty 4553890.84 2882861.65
Education surcharge 37594377.10 18506770.12
Others 15236386.24 11964201.51
Total 1205028130.02 873270986.71
5.27 Other payables
5.27.1 General disclosure
31/12/202231/12/2021
Interests payable
Dividends payable
Other payables 3261763838.80 2280937078.12
Total 3261763838.80 2280937078.12
5.27.2 Other payables
31/12/202231/12/2021
Margin deposits 2752404989.26 1845795843.02
Quality warranty 58897431.31 48556830.53
Withheld housing fund payable 5465938.41 4722066.45
Others 444995479.82 381862338.12
Total 3261763838.80 2280937078.12
Other payables aged over 1 year as of the statement date mainly comprised pre-mature margin
deposits and quality warranty.
5.28 Non-current liabilities due within 1 year
101Anhui Gujing Distillery Company Limited Notes to the Financial Statements
31/12/202231/12/2021
Lease liabilities due within 1 year 12204345.11 13190399.32
Long-term borrowings 30033000.00 -
Total 42237345.11 13190399.32
5.29 Other current liabilities
31/12/202231/12/2021
Accruals 942387734.28 562547100.62
Pre-mature output VAT 102276707.30 236975461.98
Total 1044664441.58 799522562.60
5.30 Long-term borrowings
31/12/202231/12/2021
Credit loans 20000000.00 60000000.00
Guaranteed loans 24900000.00 112180000.00
Interests 44737.91 176255.83
Total 44944737.91 172356255.83
5.31 Lease liabilities
31/12/202231/12/2021
Gross lease payments 33494997.76 45436263.46
Less: Unrecognised financing costs 2659256.72 4138640.96
Net 30835741.04 41297622.50
T/o: Due within 1 year 12204345.11 13190399.32
T/o: Due after 1 year 18631395.93 28107223.18
5.32 Deferred income
5.32.1 General disclosure
31/12/2021 Increase Decrease 31/12/2022 Reason for recognition
Government grants 91101512.05 18530000.00 5916533.10 103714978.95 Receipt of asset-related
102Anhui Gujing Distillery Company Limited Notes to the Financial Statements
31/12/2021 Increase Decrease 31/12/2022 Reason for recognition
government grants
Total 91101512.05 18530000.00 5916533.10 103714978.95
5.32.2 Government grants
Reclassified to Other
31/12/2021 Receipt 31/12/2022 Nature
other income movement
Subsidy on Construction
35338000.00 747894.12 - 34590105.88 Asset-related
of Suizhou Plant
Refund of Land Fee 42700310.29 978918.24 - 41721392.05 Asset-related
Fund for Clustered
Development Base for
1752640.06 622719.96 - 1129920.10 Asset-related
Strategic Innovative
Sectors
Subsidy Fund for Air
2085104.67 294364.80 - 1790739.87 Asset-related
Pollution Prevention
Subsidy on Devices 1279705.79 320267.88 - 959437.91 Asset-related
Subsidy of 2019 Leading
Manufacturing Province
1250183.41 308654.28 - 941529.13 Asset-related
and Non-state-owned
Economy Development
Anhui Innovation
Subsidy for
487030.00 487030.00 - 0.00 Asset-related
Development of Owned
Innovation Capacity
Subsidy on Renovation
759259.24 222222.24 - 537037.00 Asset-related
of #2 Furnace
Subsidy on Equipments 668907.24 208209.12 - 460698.12 Asset-related
Renovation of GJ
740208.51 47499.96 - 692708.55 Asset-related
Zhangji Cellar
Subsidy for
Improvement of Food 413793.25 137931.00 - 275862.25 Asset-related
Safety
103Anhui Gujing Distillery Company Limited Notes to the Financial Statements
Reclassified to Other
31/12/2021 Receipt 31/12/2022 Nature
other income movement
Anhui Leading Capital
209756.36 209756.36 - 0.00 Asset-related
for Service Sector
Subsidy for Electricity
Demand-side 228000.00 144000.00 - 84000.00 Asset-related
Adminsitration
Full-time Online
Supervision on
Automated Blending 78125.32 78125.32 - 0.00 Asset-related
Storage and Product
Quality
Technological
Renovation for Distilling 2180720.63 291572.16 - 1889148.47 Asset-related
System
Smart Fermentation
57291.45 31250.04 - 26041.41 Asset-related
Innovation
Designated Fund for
197500.00 30000.00 - 167500.00 Asset-related
Furnace Renovation
Bonus for Technological
552622.31 69643.70 - 482978.61 Asset-related
Improvement Investment
Subsidy to the Technical
122353.52 20548.54 - 101804.98 Asset-related
and Quality Department
distilled wine Industrial
7000000.00 - 7000000.00 Asset-related
Internet platform
Distillation shop VOCs
6180000.00 51932.77 - 6128067.23 Asset-related
Emission control
Provincial special fund
for high quality
2850000.00 142500.00 - 2707500.00 Asset-related
development of
manufacturing industry
distilled wine production
intelligent automatic 1000000.00 99999.96 - 900000.04 Asset-related
upgrading
104Anhui Gujing Distillery Company Limited Notes to the Financial Statements
Reclassified to Other
31/12/2021 Receipt 31/12/2022 Nature
other income movement
VOCs Deep Governance 1050000.00 333608.55 - 716391.45 Asset-related
Robot project 450000.00 37884.10 - 412115.90 Asset-related
Total 91101512.05 18530000.00 5916533.10 - 103714978.95
5.33 Share capital
Movement
31/12/2021 Bonus Reserve
Issue Others Total 31/12/2022
Qty issue conversion
Qty. Qty. Qty.Qty. Qty
Shares 528600000.00 - - - - 528600000.00
5.34 Capital reserves
31/12/2021 Increase Decrease 31/12/2022
Share premium 6191894530.90 6191894530.90
Other capital reserves 32853136.20 32853136.20
Total 6224747667.10 6224747667.10
5.35 Other comprehensive income (OCI)
Movement
Less: Amount
31/12/2021 Less: Income
Before tax recognised in the
tax
income statement
A. Not reclassifiable to profit or loss 312174.31 1905371.44 - 476342.86
Change in the fair value of Other equity
312174.311905371.44-476342.86
instrument investments
B. Reclassifiable to profit or loss -3047232.50 -1030330.20 -4296727.84 816599.41
Gain from reclassification of financial
-3047232.50-1030330.20-4296727.84816599.41
assets
Total -2735058.19 875041.24 -4296727.84 1292942.27
(Continued)
105Anhui Gujing Distillery Company Limited Notes to the Financial Statements
Movement
After tax After tax
attributable to attributable to 31/12/2022
shareholders of the non-controlling
Company interests
A. Not reclassifiable to profit or loss 857417.15 571611.43 1169591.46
Change in the fair value of Other equity instrument
857417.15571611.431169591.46
investments
B. Reclassifiable to profit or loss 2286380.65 163417.58 -760851.85
Gain from reclassification of financial assets 2286380.65 163417.58 -760851.85
Total 3143797.80 735029.01 408739.61
5.36 Surplus reserves
31/12/2021 Increase Decrease 31/12/2022
Statutory reserve 269402260.27 269402260.27
Total 269402260.27 269402260.27
10% of the current year’s net profit was transferred to surplus reserves in accordance with the
Company Law and the Company’s Article of Association.
5.37 Retained earnings
Y/e 31/12/2022 Y/e 31/12/2021
As of 31/12/2021 9517374574.46 7987380161.21
Total adjustment of retained earnings brought forward -
As of 1/1/2021 9517374574.46 7987380161.21
Add: Net profit attributable to shareholders of the Company 3143144732.08 2297894413.25
Less: Transfer to statutory reserve 12500000.00
Less: Dividends on ordinary shares payable 1162920000.00 755400000.00
As of 31/12/2022 11497599306.54 9517374574.46
5.38 Revenue and cost of sales
Y/e 31/12/2022 Y/e 31/12/2021
106Anhui Gujing Distillery Company Limited Notes to the Financial Statements
Revenue Cost of sales Revenue Cost of sales
Primary operation 16624493486.59 3786375257.60 13180706416.64 3271880424.79
Other operation 88740666.93 29946787.41 89119849.40 32196587.13
Total 16713234153.52 3816322045.01 13269826266.04 3304077011.92
5.39 Taxes and surcharges
Y/e 31/12/2022 Y/e 31/12/2021
Consumption duty 2355515748.99 1669063914.39
Urban construction and maintenance tax and
391108828.32300643974.00
education surcharges
Urban land use tax 21958265.05 15985317.49
Property tax 20010214.84 18286057.72
Stamp duty 18045620.24 11749843.93
Others 17420644.59 16086098.14
Total 2824059322.03 2031815205.67
5.40 Selling expenses
Y/e 31/12/2022 Y/e 31/12/2021
Personnel costs 938740215.88 863583183.40
Travel 169521676.66 161091812.25
Advertisement 995196089.71 900546437.33
Comprehensive promotion 1814692295.39 1268396513.56
Services 638147336.90 705368563.00
Others 111887440.59 109088973.54
Total 4668185055.13 4008075483.08
5.41 Administrative expenses
Y/e 31/12/2022 Y/e 31/12/2021
Personnel costs 790082663.30 647493344.01
Office costs 61689592.52 61116360.31
Repairs 55445533.41 59205451.47
Depreciation 69203388.39 76054616.50
107Anhui Gujing Distillery Company Limited Notes to the Financial Statements
Y/e 31/12/2022 Y/e 31/12/2021
Amortisation 34133133.16 34799459.54
Sewage 23964858.50 27191838.92
Travel 9914637.44 11420677.10
Utilities 11311612.00 11157257.56
Others 111034970.51 93742414.33
Total 1166780389.23 1022181419.74
5.42 R&D expenses
Y/e 31/12/2022 Y/e 31/12/2021
Personnel costs 36510926.32 32495950.89
Direct costs 9047992.47 9389089.92
Depreciation 2747013.50 3230977.28
Overheads 8361270.72 6333457.27
Total 56667203.01 51449475.36
5.43 Financial costs
Y/e 31/12/2022 Y/e 31/12/2021
Interest expenses 5679645.21 7036575.14
Less: Interest income 221450532.78 210634326.57
Net interest expenses -215770887.57 -203597751.43
Net exchange loss -417719.35 -168340.77
Bank charges and others -110446.15 -289564.86
Total -216299053.07 -204055657.06
5.44 Other income
Y/e 31/12/2022 Y/e 31/12/2021 Nature
Government grants
T/o: Transfer from deferred income 5916533.10 7204388.92 Asset-related
T/o: Government grants directly recognised in P&L 40804726.42 48065239.56 Revenue-related
Total 46721259.52 55269628.48
108Anhui Gujing Distillery Company Limited Notes to the Financial Statements
5.45 Investment income
Y/e 31/12/2022 Y/e 31/12/2021
Investment income from long-term equity investments at equity 941635.20 397024.95
Gain from disposal of FVTPLs 13667018.06 11855405.29
Gain from holding of debt instruments - -
Gain from holding of Other equity instrument investments 957949.08 809860.62
Gain from disposal of FVTOCIs -26471694.99 -23271118.08
Gain from holding of financial assets held for trading - 14393316.21
Others 100708.20 507890.16
Total -10804384.45 4692379.15
5.46 Gain from fair value changes
Y/e 31/12/2022 Y/e 31/12/2021
Financial assets held for trading 29149125.30 7225961.17
T/o: Derivative financial assets - -
Total 29149125.30 7225961.17
5.47 Credit impairment loss
Y/e 31/12/2022 Y/e 31/12/2021
Notes receivable - -
Accounts receivable 1094557.71 -7698458.43
Other receivables -691336.22 1205616.99
Total 403221.49 -6492841.44
5.48 Asset impairment loss
Y/e 31/12/2022 Y/e 31/12/2021
Inventories -10302413.40 -16126347.91
Fixed assets -674947.51 -611808.94
Intangible assets -166872.39
Total -11144233.30 -16738156.85
109Anhui Gujing Distillery Company Limited Notes to the Financial Statements
5.49 Gain from asset disposals
Y/e 31/12/2022 Y/e 31/12/2021
Gain or loss from disposal of fixed assets construction in progress
886286.451368763.13
and intangible assets not classified as held for sale
T/o: Fixed assets 886286.45 1368763.13
Total 886286.45 1368763.13
5.50 Non-operating income
5.50.1 General disclosure
Current period
Y/e 31/12/2022 Y/e 31/12/2021
non-recurring
Damage and scrapping of
370956.1812541.54370956.18
non-current assets
Government grants not related to
0.004873.940.00
ordinary operating activities
Fine and compensation 39854588.12 43776517.37 39854588.12
Wastes 4163898.52 4549768.93 4163898.52
Release of payables 4207463.06 30649702.32 4207463.06
Others 2171039.50 1364754.10 2171039.50
Total 50767945.38 80358158.20 50767945.38
5.50.2 Government grants not related to ordinary operating activities
Y/e 31/12/2022 Y/e 31/12/2021 Nature
Other bonuses - 4873.94 Revenue related
Total - 4873.94 -
5.51 Non-operating expenses
Current period
Y/e 31/12/2022 Y/e 31/12/2021
non-recurring
Damage and scrapping of
5923667.727358161.655923667.72
non-current assets
110Anhui Gujing Distillery Company Limited Notes to the Financial Statements
Current period
Y/e 31/12/2022 Y/e 31/12/2021
non-recurring
Donations 22359038.92 22359038.92
Others 4723657.20 3315122.96 4723657.20
Total 33006363.84 10673284.61 33006363.84
5.52 Income tax expenses
5.52.1 General disclosure
Y/e 31/12/2022 Y/e 31/12/2021
Current income tax 1273456377.00 903705314.91
Deferred income tax -54798492.76 -106743019.82
Total 1218657884.24 796962295.09
5.52.2 Reconciliation of profit before tax and income tax expenses
Y/e 31/12/2022
Profit before tax 4470492048.73
Income tax calcuated by the applicable tax rate 1117623012.18
Impact of different tax rates applicable to subsidiaries -11428857.41
Adjustment for prior period 40187610.28
Non-taxable income -474896.07
Non-deductible costs expenses and loss 85719626.34
Utilisation of prior period recoverable tax loss with no DTA recognised
Impact of current period recoverable tax loss and temporary differences
with no DTA recognised
Progressive deduction for R&D expenses -12968611.08
Impact of tax rate changes
Exemption
Income tax expenses 1218657884.24
5.53 Notes to the consolidated cash flow statements
5.53.1 Other cash receipts in relation to operating activities
111Anhui Gujing Distillery Company Limited Notes to the Financial Statements
Y/e 31/12/2022 Y/e 31/12/2021
Margin deposits and quality warranty 916949747.02 573099096.03
Government grants received 48435078.81 59512598.91
Bank interests received 80375152.64 175668500.91
Release of restricted cash 133372593.16 334308875.92
Others 56190183.46 11742422.18
Total 1235322755.09 1154331493.95
5.53.2 Other cash payments for operating activities
Y/e 31/12/2022 Y/e 31/12/2021
Paid expenses 3117448326.00 2252989080.36
Margin deposits and quality warranty 5855826.64 7522439.34
Cash restricted for bank acceptance and guarantee
667187706.08133372593.16
letters
Others 130000657.32 63271489.74
Total 3920492516.04 2457155602.60
5.53.3 Other cash receipts in relation to financing activities
Y/e 31/12/2022 Y/e 31/12/2021
Financing costs paid - 4587264.16
Rentals paid 16242902.55 15430214.16
Total 16242902.55 20017478.32
5.54 Supplemenatry information to the consolidated cash flow statement
5.54.1 Suppplementary information to the consolidated cash flow statement
Y/e 31/12/2022 Y/e 31/12/2021
A. Reconciliation between net profit and net cash flows from operating
activities
Net profit 3251834164.49 2374331639.47
Add: Asset impairment loss 11144233.30 16738156.85
Add: Credit impairment loss -403221.49 6492841.44
112Anhui Gujing Distillery Company Limited Notes to the Financial Statements
Y/e 31/12/2022 Y/e 31/12/2021
Add: Fixed asset depreciation and investment property depreciation 226309432.46 224815642.73
Add: Right-of-use asset depreciation 14568082.74 14454182.34
Add: Intangible asset amortisation 42703216.86 42153384.37
Add: Long-term deferred expense amortisation 30753707.48 33723640.28
Add: Loss from disposal of fixed assets intangible assets and other
-886286.45-1368763.13
long-term assets (gain with “–”)
Add: Loss from scrapping of fixed assets (gain with “–”) 5552711.54 7345620.11
Add: Loss from fair value changes (gain with “–”) -29149125.30 -7225961.17
Add: Financial costs (income with “–”) -135923900.43 -47493186.95
Add: Investment loss (gain with “–”) 10804384.45 -4692379.15
Add: DTA decrease (increase with “–”) -141292227.13 -186855578.29
Add: DTL increase (decrease with “–”) 87139896.77 79211806.69
Add: Inventory decrease (increase with “–”) -1386823935.09 -1252595844.79
Add: Operating receivable decrease (increase with “–”) -2104507814.27 868490814.49
Add: Operating payable increase (decrease with “–”) 3092718666.39 2752473236.58
Add: Others (Note) 133372593.16 334308875.92
Net cash flows from operating activities 3107914579.48 5254308127.79
B. Significant investing and financing activities not involving cash
Debt-to-equity conversion
Corporate bonds convertible within 1 year
Fixed asset acquired through financial leasing
C. Movement of cash and cash equivalents
Cash as of 31/12/2022 13105373435.22 6057550178.60
Less: Cash as of 31/12/2021 6057550178.60 5636903693.74
Add: Cash equivalents as of 31/12/2022
Less: Cash equivalents as of 31/12/2021
Net increase of cash and cash equivalents 7047823256.62 420646484.86
113Anhui Gujing Distillery Company Limited Notes to the Financial Statements
Note: Others represented impact of withdraw restricted cash on the net cash flows from
operating activities for the period.
5.54.2 Composition of cash and cash equivalents
31/12/202231/12/2021
A. Cash 13105373435.22 6057550178.60
T/o: Cash in hand 111642.11 135129.66
T/o: Cash at bank usable on demand 13098187278.75 6057283646.58
T/o: Other monetary funds usable on demand 7074514.36 131402.36
B. Cash equivalents -
T/o: Investment in debt instruments mature in 3 months -
C. Cash and cash equivalents as of 31 December 13105373435.22 6057550178.60
T/o: Cash and cash equivalents held by group companies
with restriction on use
5.55 Assets with restriction on ownership or disposal
Book value as of 31/12/2022 Restriction
Fixed term deposits and margin deposits for
Notes receivable 667187706.08
bank acceptance
Fixed assets 114679263.52 Securities for loans
Intangible assets 179235930.32 Securities for loans
Total 961102899.92 ——
5.56 Government grants
5.56.1 Asset related government grants
Amount recognised in the income
Balance sheet Income
Grant amount statement
item statement item
Y/e 31/12/2022 Y/e 31/12/2021
Subsidy on Construction of Deferred
34590105.88 747894.12 - Other income
Suizhou Plant income
Refund of Land Fee 41721392.05 Deferred 978918.24 1539876.31 Other income
114Anhui Gujing Distillery Company Limited Notes to the Financial Statements
Amount recognised in the income
Balance sheet Income
Grant amount statement
item statement item
Y/e 31/12/2022 Y/e 31/12/2021
income
Fund for Clustered
Deferred
Development Base for 1129920.10 622719.96 622719.96 Other income
income
Strategic Innovative Sectors
Subsidy Fund for Air Deferred
1790739.87 294364.80 294364.80 Other income
Pollution Prevention income
Deferred
Subsidy on Devices 959437.91 320267.88 401472.41 Other income
income
Subsidy of 2019 Leading
Manufacturing Province and Deferred
941529.13 308654.28 308654.28 Other income
Non-state-owned Economy income
Development
Anhui Innovation Subsidy for
Deferred
Development of Owned - 487030.00 730545.00 Other income
income
Innovation Capacity
R&D Fund for Smart Deferred
- - 1130000.00 Other income
Distilling Yeast Fabrication income
Subsidy on Renovation of #2 Deferred
537037.00 222222.24 222222.24 Other income
Furnace income
Deferred
Subsidy on Equipments 460698.12 208209.12 127004.59 Other income
income
Renovation of GJ Zhangji Deferred
692708.55 47499.96 47499.96 Other income
Cellar income
Subsidy for Corporation on
Deferred
Key Technology of Key Food - - 600000.00 Other income
income
Isotope Authenticity
Subsidy for Improvement of Deferred
275862.25 137931.00 137931.00 Other income
Food Safety income
115Anhui Gujing Distillery Company Limited Notes to the Financial Statements
Amount recognised in the income
Balance sheet Income
Grant amount statement
item statement item
Y/e 31/12/2022 Y/e 31/12/2021
Anhui Leading Capital for Deferred
- 209756.36 292682.88 Other income
Service Sector income
Subsidy for Electricity Deferred
84000.00 144000.00 144000.00 Other income
Demand-side Adminsitration income
Full-time Online Supervision
Deferred
on Automated Blending - 78125.32 93749.68 Other income
income
Storage and Product Quality
Energy Saving Renovation for Deferred
- - 137500.28 Other income
Electric Motors and Furnaces income
Technological Renovation for Deferred
1889148.47 291572.16 229487.88 Other income
Distilling System income
Smart Fermentation Deferred
26041.41 31250.04 31250.04 Other income
Innovation income
Designated Fund for Furnace Deferred
167500.00 30000.00 35000.00 Other income
Renovation income
Bonus for Technological Deferred
482978.61 69643.70 78427.61 Other income
Improvement Investment income
Subsidy to the Technical and Deferred
101804.98 20548.54 - Other income
Quality Department income
distilled wine Industrial Deferred
7000000.00 - - Other income
Internet platform income
Distillation shop VOCs Deferred
6128067.23 51932.77 - Other income
Emission control income
Provincial special fund for
Deferred
high quality development of 2707500.00 142500.00 - Other income
income
manufacturing industry
distilled wine production Deferred
900000.04 99999.96 - Other income
intelligent automatic income
116Anhui Gujing Distillery Company Limited Notes to the Financial Statements
Amount recognised in the income
Balance sheet Income
Grant amount statement
item statement item
Y/e 31/12/2022 Y/e 31/12/2021
upgrading
Deferred
VOCs Deep Governance 716391.45 333608.55 - Other income
income
Deferred
Robot project 412115.90 37884.10 - Other income
income
Total 103714978.95 - 5916533.10 7204388.92 ——
5.56.2 Revenue related government grants
Amount recognised in the income
Income Income
Grant amount statement
statement item statement item
Y/e 31/12/2022 Y/e 31/12/2021
Tax Refund 10899647.61 Other income 10899647.61 10939461.17 Other income
Grants related to industry 7437183.00 Other income 7437183.00 - Other income
Grants related to
Transformation and diffusion
4387700.00 Other income 4387700.00 - Other income
of scientific and
technological achievements
Job-loss Insurance Refund 3993126.71 Other income 3993126.71 1504366.43 Other income
Provincial Manufacturing
Development-distilled wine 1140000.00 Other income 1140000.00 - Other income
production intelligent Fund
Scientific and technological
800000.00 Other income 800000.00 - Other income
innovation Fund
Grants related to Intellectual
property rights Development 720000.00 Other income 720000.00 - Other income
with High Quality
Training Subsidy for
702000.00 Other income 702000.00 1226000.00 Other income
Workplace Skill
117Anhui Gujing Distillery Company Limited Notes to the Financial Statements
Amount recognised in the income
Income Income
Grant amount statement
statement item statement item
Y/e 31/12/2022 Y/e 31/12/2021
Improvement
Hubei University of Science
and Technology - Other income - 9541000.00 Other income
Industrialisation Fund
Subsidy for Suizhou
Relocation and Renovation - Other income - 6946300.00 Other income
Project
Xianning Fiscal Incentive for
- Other income - 2300000.00 Other income
0 Fiscal Account Balance
2021 Substantial Fund for
- Other income - 1200000.00 Other income
Innovative Province
2020 Designated Fund for
Provincial Manufacturing
- Other income - 1000000.00 Other income
Development with High
Quality
Fiscal Bonus for Digital
Economy Development
offered by Construction Fund - Other income - 1000000.00 Other income
of Leading Manufacturing
Province
Subsidies by Local Finance
- Other income - 1000000.00 Other income
Supervision Authorities
Bonus for Strategic
- Other income - 1000000.00 Other income
Innovative Base
Other grants related to
10725069.10 Other income 10725069.10 10408111.96 Other income
ordinary operating activities
Grants related to ordinary Non-operating Non-operating
--4873.94
operating activities income income
118Anhui Gujing Distillery Company Limited Notes to the Financial Statements
Amount recognised in the income
Income Income
Grant amount statement
statement item statement item
Y/e 31/12/2022 Y/e 31/12/2021
Financial
Interest subsidies 9666.66 9666.66 874116.13 Financial costs
costs
Total 40814393.08 —— 40814393.08 48944229.63 ——
119Anhui Gujing Distillery Company Limited Notes to the Financial Statements
Note 6 Change in the scope of consolidation
6.1 Business combination not under common control
6.1.1 General disclosure
Net profit for the period
Revenue for the period
Date of Shareholding Type of Combination Determination of from the combination
Subsidiary Purchase price from the combination
acquisition acquired transaction date combination date date to the statement
date to the statement date
date
Anhui Gujing Health Completion of
2022.11.30 34664262.05 60% Purchase 2022.11.30 536743.91 -1430014.64
Technology Co. Ltd regulatory registration
120Anhui Gujing Distillery Company Limited
Notes to the Financial Statements
6.1.2 Cost of acquisition and goodwill
Anhui Gujing Health Technology Co. Ltd
Cost of acquisition
Cash 34664262.05
Total cost of acquisition 34664262.05
Less: Fair value of net identifiable assets acquired 34664262.05
Goodwill -
6.1.3 Net identifiable assets of the acquirees as of the combination dates
Anhui Gujing Health Technology Co. Ltd
Fair value Book value
Monetary funds 226410.81 226410.81
Accounts receivable 1448230.49 1448230.49
Prepayments 961420.96 961420.96
Other receivables 2213743.05 2213743.05
Inventories 51780108.60 37063622.63
Other current assets 13715.14 13715.14
Fixed assets 128068970.06 93337821.30
Intangible assets 12107292.55 3934385.91
Long-term deferred expenses 1070457.84 1070457.84
Deferred tax assets 9295213.97 9295213.97
Short-term borrowings 63000000.00 63000000.00
Accounts payable 3754436.80 3754436.80
Contract liabilities 1041498.33 1041498.33
Employee benefits payable 655065.66 655065.66
Taxes and fees payable 987287.74 987287.74
Other payables 70487671.31 70487671.31
Other current liabilities 842752.34 842752.34
Deferred tax liabilities 8643081.21 -
121Anhui Gujing Distillery Company Limited
Notes to the Financial Statements
Fair value Book value
Net Assets 57773770.08 8796309.92
Less: Non-controlling interests 23109508.03 3518523.97
Net assets acquired 34664262.05 5277785.95
6.2 Other changes
Theme Hotel Anjie Technology Huanggang Junya were included in the Company’s scope of
consolidation for the first time in the period as a result of incorporation.Note 7 Interests in other entities
7.1 Interests in subsidiaries
7.1.1 General disclosure
Shareholding in % Means of
Place of primary Place of Nature of
Subsidiary control
operation registration operation Direct Indirect
acquisition
GJ Sales Bozhou Anhui Bozhou Anhui Trading 100 - Incorporation
Longrui Glass Bozhou Anhui Bozhou Anhui Production 100 - Incorporation
Machinery
Jiuan Electric Bozhou Anhui Bozhou Anhui 100 - Incorporation
production
Jinyunlai Hefei Anhui Hefei Anhui Advertising 100 - Incorporation
Ruisi Weier Bozhou Anhui Bozhou Anhui R&D 100 - Incorporation
Business
Hotel combination
Jinhao Hotel Shanghai Shanghai 100 -
management under common
control
Business
Hotel combination
GJ Guest House Bozhou Anhui Bozhou Anhui 100 -
management under common
control
YQ Environment Sewage
Bozhou Anhui Bozhou Anhui 100 - Incorporation
Protection processing
GJ E-Commerce Hefei Anhui Hefei Anhui E-commerce 100 - Incorporation
122Anhui Gujing Distillery Company Limited
Notes to the Financial Statements
Shareholding in % Means of
Place of primary Place of Nature of
Subsidiary control
operation registration operation Direct Indirect
acquisition
Runan Xinke Bozhou Anhui Bozhou Anhui Food testing 100 - Incorporation
Jiudao Media Hefei Anhui Hefei Anhui Advertising 100 - Incorporation
Hotel
Theme Hotel Bozhou Anhui Bozhou Anhui 100 Incorporation
management
Anjie Technology Bozhou Anhui Bozhou Anhui Food testing - 70 Incorporation
Business
combination not
HHL Distillery Wuhan Hubei Wuhan Hubei Production 51 -
under common
control
Business
combination not
HHL Xianning Xianning Hubei Xianning Hubei Production - 51
under common
control
Business
combination not
HHL Suizhou Suizhou Hubei Suizhou Hubei Production - 51
under common
control
Business
combination not
Junlou Culture Wuhan Hubei Wuhan Hubei Advertising - 51
under common
control
HHL Beverage Xianning Hubei Xianning Hubei Production - 51 Incorporation
Yashibo Wuhan Hubei Wuhan Hubei R&D - 51 Incorporation
Xinjia Testing Xianning Hubei Xianning Hubei Food testing - 51 Incorporation
Business
combination not
Tianlong Jindi Wuhan Hubei Wuhan Hubei Trading - 51
under common
control
Business
Xianning Junhe Xianning Hubei Xianning Hubei Trading - 51 combination not
under common
123Anhui Gujing Distillery Company Limited
Notes to the Financial Statements
Shareholding in % Means of
Place of primary Place of Nature of
Subsidiary control
operation registration operation Direct Indirect
acquisition
control
Junya Sales Wuhan Hubei Wuhan Hubei Trading - 51 Incorporation
Suizhou Junhe Suizhou Hubei Suizhou Hubei Trading - 51 Incorporation
Huanggang
Huanggang Junya Huanggang Hubei Trading - 51 Incorporation
Hubei
Business
combination not
Mingguang Distillery Chuzhou Anhui Chuzhou Anhui Production 60 -
under common
control
Business
combination not
Tiancheng Sales Chuzhou Anhui Chuzhou Anhui Trading - 60
under common
control
Business
combination not
FY Xiaogangcun Chuzhou Anhui Chuzhou Anhui Production - 42
under common
control
Jiuhao ChinaRail Bozhou Anhui Bozhou Anhui Construction 52 - Incorporation
Zhenrui Construction Bozhou Anhui Bozhou Anhui Construction - 52 Incorporation
Business
combination not
Treasure Distillery Guizhou Renhuai Guizhou Renhuai Production 60 -
under common
control
Business
combination not
GJ Health Technology Bozhou Anhui Bozhou Anhui Production 60 -
under common
control
Business
Maiqi Biotechnology Bozhou Anhui Bozhou Anhui R&D - 60 combination not
under common
124Anhui Gujing Distillery Company Limited
Notes to the Financial Statements
Shareholding in % Means of
Place of primary Place of Nature of
Subsidiary control
operation registration operation Direct Indirect
acquisition
control
Business
combination not
Brand Operation Hefei Anhui Hefei Anhui Advertising - 60
under common
control
Business
combination not
Biotechnology Lingshui Hainan Lingshui Hainan Trading - 60
under common
control
7.1.2 Significant partially owned subsidiaries
Profit or loss
Non-controlling attributable to Dividends declared for Minority interest as of
Subsidiary
shareholding % minority shareholders minority shareholders the statement date
for the period
HHL Distillery 49.00 104120337.59 41909624.65 549100453.28
7.1.3 Key Significant partially owned subsidiaries
31/12/2022
Subsidiary Non-current Current Non-current
Current assets Total Total liabilities
assets liabilities liabilities
HHL
1174784972.791095159397.172269944369.96952593793.76195313952.861147907746.62
Distillery
(Continue)
31/12/2021
Subsidiary Non-current Current Non-current
Current assets Total Total liabilities
assets liabilities liabilities
HHL
1106087761.341004277608.572110365369.91792402887.81324643456.051117046343.86
Distillery
125Anhui Gujing Distillery Company Limited
Notes to the Financial Statements
(Continue)
Y/e 31/12/2022
Subsidiary Total comprehensive Cash flows from
Revenue Net profit
income operating activities
HHL Distillery 1753497722.05 213913938.26 214247443.52 136032287.63
(Continue)
Y/e 31/12/2021
Subsidiary Total comprehensive Cash flows from
Revenue Net profit
income operating activities
HHL Distillery 1458982962.92 165997680.58 165639898.18 386107248.19
7.2 Significant joint ventures and associates
The Company had no significant joint venture or associate.Note 8 Risks associated with 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 (e.g. credit management department of the Company
reviews each credit sale). 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
126Anhui Gujing Distillery Company Limited
Notes to the Financial Statements
related to monetary funds 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 amount of these financial instruments.Monetary funds of the Company has lower credit risk as they are mainly deposited in financial
institutions such as commercial banks of which the Company believes with higher reputation and
financial position.Notes receivable held by the Company mainly comprise bank acceptance which have relatively
high liquidity. The Company has established necessary internal control policies that can ensure the
safety of the maintenance and usage of notes and such policies have been implemented effectively.The Company believes that notes receivable have low credit risk.Accounts receivable mainly arising from sales. The Company makes sales only to customers with
advanced credit worthiness and monitors accounts receivable on a continuous basis to ensure the
occurrence of significant bad debts. The maximum risk exposure brought by financial instruments is
their book value. The Company believes that the credit risk is relatively 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 a financial instrument refers to the risk on the fair value or future cash flows of
the financial instrument brought by market factors. Market risk mainly comprises foreign exchange
risk and interest risk.
8.3.1 Foreign currency risk
Foreign currency risk of the Company mainly arise from foreign currency assets and liabilities
127Anhui Gujing Distillery Company Limited
Notes to the Financial Statements
denominated in currency other than the Company’s functional currency. As the Company mainly
operate in Mainland China with transactions mostly settled in CNY and very limited export
activities foreign currency risk is insignificant.
8.3.2 Interest risk
Interest risk refers to the risk on the fair value or future cash flows of a financial instrument brought
by the change of market interest rate. Interest risk mainly arises from bank loans. As of the
statement date the Company had no bank loan with a floating interest rate.
8.3.3 Other price risk
Investments held for trading were measured at fair value. As such these investments are subject to
the risk brought by the change of security prices. The Company controls this risk to the acceptable
level by utilising multiple investment mix.Note 9 Fair value disclosure
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 Fair value of assets and liabilities measured by fair value as of the statement date
Fair value as of the statement date
Level 1 Level 2 Level 3 Total
Continously measured by fair value
A. Financial assets held for trading 1782687769.66 1782687769.66
a. FATPLs 1782687769.66 1782687769.66
1. Debt instruments
128Anhui Gujing Distillery Company Limited
Notes to the Financial Statements
Fair value as of the statement date
Level 1 Level 2 Level 3 Total
2. Structural financial products 1580352899.17 1580352899.17
3. Investment in funds - 202334870.49 202334870.49
B. FATOCIs 56447789.94 217419441.32 273867231.26
a. Receivables held for factoring - 217419441.32 217419441.32
b. Other equity instrument
56447789.9456447789.94
investments
Total 1839135559.60 217419441.32 2056555000.92
The fair value of financial instruments traded in an active market was based on quoted market
prices at the reporting date. The fair value of financial instruments not traded in an active market
was 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.
9.2 Qualitative and quantitative information of key inputs and valuation methods applicable
to Level 2 financial instruments continuously measured by fair value
As of the statement date the Company’s Level 3 financial instruments comprised mainly
investment in funds and structural financial products. The fair value of investment in funds was
determined by the valuation offered by the asset management companies. The fair value of
structural financial products were computed in accordance with the terms of the respective
contracts.
9.3 Qualitative and quantitative information of key inputs and valuation methods applicable
to Level 3 financial instruments continuously measured by fair value
As of the statement date the Company’s Level 3 financial instruments comprised solely pre-mature
notes receivable. Issuers of the notes had healthy credit worthiness. The fair value of these
receivables as of the statement date was measured at the recoverable amount of these receivables as
of the statement date which was computed using the respective discount rates offered by banks for
129Anhui Gujing Distillery Company Limited
Notes to the Financial Statements
cashing.Note 10 Related parties
An entity or individual is a related party to the Company if the entity or individual:
a. is controlled or jointly controlled by the Company;
b. over which the Company has significant influence;
c. controls or jointly controls the Company; or
d. is subject to the same control or joint control over the Company.
10.1 Controlling shareholder of the Company
Shareholding in Voting right in
Place of
Nature of business Registered capital the Company the Company
registration
in % in %
Production of beverage
Bozhou
GJ Group construction materials plastic 1000 million 51.34 51.34
Anhui
products.The Company’s ultimate controller is the State-owned Asset Management Commission of the
People's Government of Baozhou Anhui
10.2 Subsidiaries
See Note 7 for details.
10.3 Joint ventures and associates
See Note 7 for details.
10.4 Other related parties of the Company
Relationship to the Company
Nanjing Suning Property Development Co. Ltd.(Suning Property Controlled by ZHANG Guiping the non-executive
Development) director of the Company
Controlled by the Company's controlling
Anhui Ruijing Shanglv (Group) Co. Ltd. (RJSL Group)
shareholder or ultimate controller
130Anhui Gujing Distillery Company Limited
Notes to the Financial Statements
Relationship to the Company
Anhui Ruijing Shanglv (Group) Co. Ltd. Hefei Gujing Holiday Controlled by the Company's controlling
Inn (RJSL Holiday Inn) shareholder or ultimate controller
Bozhou Gujing Huishenglou Catering Co. Ltd.(GJ Huishenglou Controlled by the Company's controlling
Catering) shareholder or ultimate controller
Controlled by the Company's controlling
Anhui Haochidian Catering Co. Ltd. (Haochidian Catering)
shareholder or ultimate controller
Controlled by the Company's controlling
Anhui Ruijing Catering Co. Ltd. (Ruijing Catering)
shareholder or ultimate controller
Controlled by the Company's controlling
Shanghai Beihai Hotel Co. Ltd. (Beihai Hotel)
shareholder or ultimate controller
Anhui Gujing Hotel Development Co. Ltd.(GJ Hotel Controlled by the Company's controlling
Development) shareholder or ultimate controller
Anhui Huixin Financial Investment Group Co. Ltd.(Huixin Controlled by the Company's controlling
Financial Investment) shareholder or ultimate controller
Controlled by the Company's controlling
Bozhou Anxin Small Loan Co. Ltd. (Anxin Small Loan)
shareholder or ultimate controller
Controlled by the Company's controlling
Anhui Hengxin Pawnshop Co. Ltd. (Hengxin Pawnshop)
shareholder or ultimate controller
Controlled by the Company's controlling
Anhui Ruixin Pawnshop Co. Ltd. (Ruixin Pawnshop)
shareholder or ultimate controller
Anhui Zhongxin Financial Leasing Co. Ltd.(Zhongxin Financial Controlled by the Company's controlling
Leasing) shareholder or ultimate controller
Controlled by the Company's controlling
Anhui Lixin E-Commerce Co. Ltd. (Lixin E-Commerce)
shareholder or ultimate controller
Controlled by the Company's controlling
Anhui Youxin Financing Guarantee Co Ltd. (Youxin Guarantee)
shareholder or ultimate controller
Hefei Longxin Corporate Management Advisory Co. Ltd. Controlled by the Company's controlling
(Longxin Advisory) shareholder or ultimate controller
Anhui Chuangxin Equity Investment Co. Ltd.(Chuangxin Equity Controlled by the Company's controlling
Investment) shareholder or ultimate controller
131Anhui Gujing Distillery Company Limited
Notes to the Financial Statements
Relationship to the Company
Controlled by the Company's controlling
Anhui Lejiu Jiayuan Travel Management Co. Ltd. (Lejiu Jiayuan)
shareholder or ultimate controller
Controlled by the Company's controlling
Anhui Shenglong Trading Co. Ltd. (Shenglong Trading)
shareholder or ultimate controller
Controlled by the Company's controlling
Anhui Gujing Health Industry Co. Ltd. (Health Industry)
shareholder or ultimate controller
Controlled by the Company's controlling
Bozhou Guest House Co. Ltd. (Bozhou Guest House)
shareholder or ultimate controller
Dongfang Ruijing Enterprise Investment Co. Ltd.(Dongfang Controlled by the Company's controlling
Ruijing) shareholder or ultimate controller
Anhui Gujing International Development Co. Ltd.(GJ Controlled by the Company's controlling
International) shareholder or ultimate controller
Anhui Jiuan Construction Management Advisory Co. Ltd.(Jiuan Controlled by the Company's controlling
Advisory) shareholder or ultimate controller
10.5 Related party transactions
10.5.1 Goods and services
Purchase of goods and services
Related party Transaction Y/e 31/12/2022 Y/e 31/12/2021
Haochidian Catering Purchase of materials and services - 16752135.81
Bozhou Guest House Receiving catering and accommodation 2380785.35 5276946.76
GJ Huishenglou Catering Receiving catering and accommodation 1081439.85 1697688.00
Haochidian Catering Receiving catering and accommodation 2478493.67 2800831.40
GJ Hotel Development Receiving catering and accommodation 456528.55 1195369.24
RJSL Group Purchase of materials and services 101061.95 96890.00
RJSL Group Receiving catering and accommodation 176813.91 658611.03
RJSL Holiday Inn Receiving catering and accommodation 35418.95 113524.00
RJSL Holiday Inn Purchase of materials and services 582276.00 871614.88
Youxin Guarantee Receiving services 53543.69 49504.95
132Anhui Gujing Distillery Company Limited
Notes to the Financial Statements
Related party Transaction Y/e 31/12/2022 Y/e 31/12/2021
GJ Hotel Development Purchase of materials and services - 2735.85
Haochidian Catering Purchase of assets - 135398.23
Jiuan Advisory Advisory and assurance 5064377.44 3427517.43
Total —— 12410739.36 33078767.58
Sales of goods and rendering of services
Related party Transaction Y/e 31/12/2022 Y/e 31/12/2021
Shenglong Trading Sales of distilled wine 1712094.67 1506569.89
RJSL Group Sales of distilled wine - 1125056.17
GJ Hotel Development Provision of utilities 175655.64 290336.98
Provision of catering and
GJ Group 120731.75 279597.00
accommodation
GJ Group Sales of small materials 47227.48 223523.11
GJ Hotel Development Sales of distilled wine 539469.03 146484.95
Provision of catering and
RJSL Group 10823.97 121295.14
accommodation
RJSL Holiday Inn Sales of distilled wine - 81451.34
Bozhou Guest House Sales of distilled wine - 55274.34
Huixin Financial Investment Sales of distilled wine 59146.02 38500.88
GJ Huishenglou Catering Sales of distilled wine - 30106.20
Anxin Small Loan Sales of distilled wine 65572.57 19656.64
Haochidian Catering Sales of distilled wine - 19115.04
Zhongxin Financial Leasing Sales of distilled wine 15358.41 11572.57
Hengxin Pawnshop Sales of distilled wine 24573.45 11405.32
Jiuan Advisory Sales of distilled wine 101317.70 8968.14
Beihai Hotel Sales of distilled wine - 8601.77
Lejiu Jiayuan Sales of distilled wine 11155.76 8235.39
Provision of catering and
Shenglong Trading 3140.00 7084.00
accommodation
133Anhui Gujing Distillery Company Limited
Notes to the Financial Statements
Related party Transaction Y/e 31/12/2022 Y/e 31/12/2021
Lejiu Jiayuan Provision of utilities 4962.36 6545.75
Ruixin Pawnshop Sales of distilled wine 12286.72 6443.36
Youxin Guarantee Sales of distilled wine 8718.59 3082.30
Haochidian Catering Provision of services - 2547.17
Bozhou Guest House Provision of construction services 14758223.32 707.55
Provision of catering and
Jiuan Advisory 8600.00 2230.00
accommodation
Longxin Advisory Sales of distilled wine 3071.68 1194.69
Jiuan Advisory Sales of small materials 3412.25 778.68
Health Industry Sales of distilled wine - -797129.56
RJSL Group Sales of small materials 128.32 -
Provision of catering and
Dongfang Ruijing 82528.93 -
accommodation
Provision of catering and
GJ Hotel Development 14266.98 -
accommodation
GJ Hotel Development Sales of distilled wine 113.27 -
Total —— 17782578.87 3219234.81
10.5.2 Leases
The Company as the Lessor
Rental income Rental income
Lessee Leased item
Y/e 31/12/2022 Y/e 31/12/2021
GJ Hotel Development Houses and buildings 1166083.56 1379517.44
Total —— 1166083.56 1379517.44
The Company as the Lessee
Rental cost Rental cost
Lessor Leased item
Y/e 31/12/2022 Y/e 31/12/2021
GJ Group Houses and buildings 1090629.08 1197761.12
134Anhui Gujing Distillery Company Limited
Notes to the Financial Statements
Suning Property Development Houses and buildings 2100000.00 2050000.00
Total 3190629.08 3247761.12
10.5.3 Key management remuneration
Y/e 31/12/2022 Y/e 31/12/2021
Key management remuneration 21.00million 18.53 million
10.6 Related party balances
Related party 31/12/2022 31/12/2021
Contract assets Bozhou Guest House 1855188.15
Contract liabilities Health Industry 617959.73
Contract liabilities RJSL Group 221.12 92.04
Contract liabilities GJ International 58849.56 164675.75
148.67
Contract liabilities GJ Hotel Development
Accounts payable Jiuan Advisory 2151065.65
Other payables RJSL Group 115533.60 115533.60
Other payables GJ Hotel Development 50000.00 50000.00
Note 11 Commitments and contingencies
11.1 Significant commitments
In accordance with the agreement entered into by the Company Wuhan Tianlong Investment Group
Co. Ltd and YAN Hongye on the transfer of the shareholding in HHL Distillery the Company
made a commitment for the tax inclusive revenue performance of HHL Distillery as follow:
20172018201920202021
Committed 805.00 1006.25 1308.13 1700.56 2040.68
tax inclusive revenue million million million million million
The Company also committed that in the five consecutive years following the year in which the
ownership transaction is completed the net profit ratio of HHL Distillery for each year shall not be
less than 11.00%. If in any of the 5 consecutive year the audited net profit ratio of HHL Distillery is
135Anhui Gujing Distillery Company Limited
Notes to the Financial Statements
less than 11.00% the Company shall compensate the sellers the difference between the committed
net profit and the actual net profit. If the audited net profit ratio for any 2 consecutive years with the
5-year period is lower than 11.00% the sellers are entitled to repurchase all shareholding sold to the
Company at the repurchase price of CNY 816.00 million.The operating performance of HHL Distillery for 2020 as reported by its financial statements for
that period is presented as below:
% of Committed
Actual Commited Difference
performance
Revenue (tax inclusive) 583.13 million 1700.56 million -1117.43 million 34.29%
Net profit -11.72 million 165.54 million -177.26 million Loss
Net profit ratio -2.27% 11.00% -13.27% Loss
The operation of HHL Distillery was significant impacted by the Force majeure. Upon mutual
negotiation the performance commitment was altered with 2020 excluded from the performance
assessment period.
1) Committed before tax revenue for the assessment period
201720182019202020212022
Committed 805.00 1006.25 1308.13 1700.56 2040.68
Excluded
tax inclusive revenue million million million million million
2) The committed net profit ratio net profit and estimated profit available for distribution as agreed
by the orginal agreement for 2020 and 2021 become applicable for 2021 and 2022 respectively.
3) No party to the agreement shall have the right to demand reimbursement compensation or other
liabilities to any other party to the agreement on the basis of the performance of HHL Distillery for
2020.
The operating performance of HHL Distillery for 2022 as reported by its financial statements for
that period is presented as below:
% of Committed
Actual Commited Difference
performance
Revenue (tax inclusive) 2051.59 million 2040.68million 10.92 million 100.53%
136Anhui Gujing Distillery Company Limited
Notes to the Financial Statements
% of Committed
Actual Commited Difference
performance
Net profit 218.78 million 198.65 million 20.13 million 110.13%
Net profit ratio 12.05% 11.00% 1.05% 109.55%
11.2 Contingencies
No contingency as of the statement date was required for disclosure.Note 12 Subsequent events
Except for the matters described in Note 11 as of the date of these financial statements no
subsequent event is required for disclosure.Note 13 Other significant matters – Segment reporting
In accordance with the Company’s internal management and reporting structure segment reporting
is not applicable.Note 14 Notes to the separate financial statements of the Company
14.1 Accounts receivable
14.1.1 No account receivable as of 31 December 2022.
14.1.2 No account receivable as of 31 December 2021.
14.1.3 Impairment movement for the period was not applicable for accounts receivable.
14.2 Other receivables
14.2.1 General disclosure
31/12/202231/12/2021
Interests receivable -
Dividends receivable -
Other receivables 202279154.63 290480736.49
Total 202279154.63 290480736.49
14.2.2 Other receivables
137Anhui Gujing Distillery Company Limited
Notes to the Financial Statements
(1) Disclosure by age group
Age group 31/12/2022 31/12/2021
Within 1 year 200863691.53 289632069.08
T/o: Within 6 months 200851698.40 289213314.37
T/o: 7 months to 1 years 11993.13 418754.71
1 to 2 years 1303136.00 763921.03
2 to 3 years 710291.70 797227.20
Over 3 years 39757474.30 39383584.88
Gross 242634593.53 330576802.19
Less: Impairment allowance 40355438.90 40096065.70
Net 202279154.63 290480736.49
(2) Disclosure by nature
31/12/202231/12/2021
Due from related party within the 267559576.83
scope of consolidation 189661149.05
Security investments 38434247.10 38857584.88
Margin deposits 3351294.09 3330794.09
Rentals and utilities receivable 741495.49 472547.89
Others 10446407.80 20356298.50
Total 242634593.53 330576802.19
(3) Disclosure by method of impairment
A. Disclosure by the 3-stage m odel as of the statement date
Gross Impairment allowance Net
Stage 1 204200346.43 1921191.80 202279154.63
Stage 2 -
Stage 3 38434247.10 38434247.10 -
Total 242634593.53 40355438.90 202279154.63
138Anhui Gujing Distillery Company Limited
Notes to the Financial Statements
Details of Stage 1 receivables as of the statement date
Expected loss rate for the Impairment
Gross Net
next 12 months in % allowance
Individual assessment
Portfolio assessment 204200346.43 0.94 1921191.80 202279154.63
T/o: Group 1 189661149.05 - - 189661149.05
T/o: Group 2 14539197.38 13.21 1921191.80 12618005.58
Total 204200346.43 0.94 1921191.80 202279154.63
Details of Group 2 receivables as of the statement date
31/12/2022
Age group
Gross Impairment allowance Impairment %
Within 1 year 11202542.48 112505.14 1.00
T/o: Within 6 months 11190549.35 111905.48 1.00
T/o: 7 months to 1 years 11993.13 599.66 5.00
1 to 2 years 1303136.00 130313.60 10.00
2 to 3 years 710291.70 355145.86 50.00
Over 3 years 1323227.20 1323227.20 100.00
Total 14539197.38 1921191.80 13.21
Details of Stage 3 receivables as of the statement date
Expected loss rate for the Impairment
Gross Net
next 12 months in % allowance
Individual assessment 38434247.10 100.00 38434247.10 -
Portfolio assessment
T/o: Group 1
T/o: Group 2
Total 38434247.10 100.00 38434247.10 -
Details of receivables subject to individual assessment as of the statement date
139Anhui Gujing Distillery Company Limited
Notes to the Financial Statements
31/12/2022
Impairment Reason for
Gross Impairment %
allowance impairment
Hengxin Securities Co. Ltd. 28733899.24 28733899.24 100.00 In bankruptcy
Jianqiao Securities Co. Ltd. 9700347.86 9700347.86 100.00 In bankruptcy
Total 38434247.10 38434247.10 100.00
B. Disclosure by the 3-stage model as of 31 December 2021
Gross Impairment allowance Net
Stage 1 291719217.31 1238480.82 290480736.49
Stage 2 -
Stage 3 38857584.88 38857584.88 -
Total 330576802.19 40096065.70 290480736.49
Details of Stage 1 receivables as of 31 December 2021
Expected loss rate for the Impairment
Gross Net
next 12 months in % allowance
Individual assessment
Portfolio assessment 291719217.31 0.42 1238480.82 290480736.49
T/o: Group 1 267559576.83 - 267559576.83
T/o: Group 2 24159640.48 5.13 1238480.82 22921159.66
Total 291719217.31 0.42 1238480.82 290480736.49
Details of Group 2 receivables as of 31 December 2021
31/12/2021
Age group
Gross Impairment allowance Impairment %
Within 1 year 22072492.25 237475.12 1.08
T/o: Within 6 months 21653737.54 216537.38 1.00
T/o: 7 months to 1 years 418754.71 20937.74 5.00
1 to 2 years 763921.03 76392.10 10.00
140Anhui Gujing Distillery Company Limited
Notes to the Financial Statements
31/12/2021
Age group
Gross Impairment allowance Impairment %
2 to 3 years 797227.20 398613.60 50.00
Over 3 years 526000.00 526000.00 100.00
Total 24159640.48 1238480.82 5.13
Details of Stage 3 receivables as of 31 December 2021
Expected loss rate for the Impairment
Gross Net
next 12 months in % allowance
Individual assessment 38857584.88 100.00 38857584.88 0.00
Portfolio assessment -
T/o: Group 1 -
T/o: Group 2 -
Total 38857584.88 100.00 38857584.88 0.00
Details of receivables subject to individual assessment as of 31 December 2021
31/12/2021
Impairment Reason for
Gross Impairment %
allowance impairment
Hengxin Securities Co.
28966894.41 28966894.41 100.00 In bankruptcy
Ltd.Jianqiao Securities Co. Ltd. 9890690.47 9890690.47 100.00 In bankruptcy
Total 38857584.88 38857584.88 100.00 -
(4) Movement of impairment allowance
Movement
31/12/2021 Reversal or Release or 31/12/2022
Provision
recovery write-off
Individual assessment 38857584.88 423337.78 38434247.10
Portfolio assessment 1238480.82 682710.98 1921191.80
Total 40096065.70 682710.98 423337.78 40355438.90
141Anhui Gujing Distillery Company Limited
Notes to the Financial Statements
(5) Top-five other receivables as of the statement date
% of total gross Impairment
Debtor Nature 31/12/2022 Age group
other receivables allowance
Due from related party within Within 6
Top 1 80207352.12 33.06 0.00
the scope of consolidation months
Due from related party within Within 6
Top 2 68211561.36 28.11 0.00
the scope of consolidation months
Due from related party within Within 6
Top 3 40000000.00 16.49 0.00
the scope of consolidation months
Top 4 Security investment 28733899.24 Over 3 years 11.84 28733899.24
Top 5 Security investment 9700347.86 Over 3 years 4.00 9700347.86
Total 226853160.58 93.50 38434247.10
14.3 Long-term equity investments
14.3.1 General disclosure
31/12/202231/12/2021
Impairment Impairment
Gross Impairment % Gross Impairment %
allowance allowance
Investment in
1582079903.43-1582079903.431547415641.38-
subsidiaries 1547415641.38
Investment in
4669710.25-4669710.25---
Associates
Total 1586749613.68 - 1586749613.68 1547415641.38 - 1547415641.38
14.3.2 Investment in subsidiaries
Impairment Cumulative
Subsidiary 31/12/2021 Increase Decrease 31/12/2022 recognised in impairment as
the period of 31/12/2022
GJ Sales 68949286.89 - - 68949286.89 - -
Longrui Glass 85267453.06 - 85267453.06 - -
Jinhao Hotel 49906854.63 - - 49906854.63 - -
142Anhui Gujing Distillery Company Limited
Notes to the Financial Statements
Impairment Cumulative
Subsidiary 31/12/2021 Increase Decrease 31/12/2022 recognised in impairment as
the period of 31/12/2022
GJ Guest House 648646.80 - - 648646.80 - -
Ruisi Weier 40000000.00 - - 40000000.00
YQ Environment
16000000.00--16000000.00--
Protection
GJ E-Commerce 5000000.00 - - 5000000.00 - -
HHL Distillery 816000000.00 - - 816000000.00 - -
Jinyunlai 15000000.00 - - 15000000.00 - -
Runan Xinke 10000000.00 - - 10000000.00 - -
Jiuan Electric 10000000.00 10000000.00 - -
Mingguang
200200000.00200200000.00
Distillery
Treasure
224723400.00224723400.00
Distillery
Jiuhao ChinaRail 5720000.00 5720000.00
GJ Health
34664262.0534664262.05
Technology
Total 1547415641.38 34664262.05 1582079903.43 - -
14.3.3 Investment in Associates
Movement
Investment
Investee 31/12/2021 Investment OCI Other equity
Contribution income at
withdrawal adjustment movement
equity
A. Associates -
Anhui Xunfeijiuzhi
Technology Co. Ltd 3900000.00 - 769710.25
( Xunfeijiuzhi)
Total 3900000.00 - 769710.25 - -
143Anhui Gujing Distillery Company Limited
Notes to the Financial Statements
(Continued)
Movement
Cumulative
Dividend or profit Impairment
Investee 31/12/2022 impairment
appropriation allowance Others
allowance
declared recognised
A. Associates -
Xunfeijiuzhi 4669710.25
Total - - - 4669710.25 -
14.4 Revenue and cost of sales
Y/e 31/12/2022 Y/e 31/12/2021
Revenue Cost of sales Revenue Cost of sales
Primary operation 8321302489.78 3081601776.18 6756444863.19 2623827961.16
Other operation 115551935.55 68470471.26 105482310.37 61315130.77
Total 8436854425.33 3150072247.44 6861927173.56 2685143091.93
14.5 Investment income
Y/e 31/12/2022 Y/e 31/12/2021
Investment income from long-term equity investments at cost method 531783095.55 737875260.92
Investment income from long-term equity investments at Equity method 769710.25
Gain from disposal of long-term equity investments 2670112.66
Gain from disposal of FVTPLs 8539026.86 8072295.21
Gain from holding of debt instruments
Gain from holding of other debt like investments
Gain from disposal of FVTOCIs -24743235.48 -22496045.46
Gain from holding of financial assets held for trading 14393316.21
Others 102958.20 410450.22
Total 516451555.38 740925389.76
Note 15 Supplementary information
15.1 Non-recurring gain or loss
144Anhui Gujing Distillery Company Limited
Notes to the Financial Statements
Y/e 31/12/2022 Y/e 31/12/2021 Note
Gain or loss from disposal of non-current assets -4666425.09 -5976856.98
Government grants included in current profit or loss (excluding
government grants closely associated with the Company’s operation 46721259.52 55274502.42
and granted in accordance with national standard quota or quantity
Gain or loss from changes in fair value of financial assets held for
trading derivative financial assets financial liabilities held for trading
and derivative financial liabilities and gain from disposal of financial
assets held for trading derivative financial assets financial liabilities 43874800.64 34792433.45
held for trading derivative financial liabilities and other debt-like
investments excluding instruments held for effective hedging
associated with the Company’s operation
Reversal of impairment allowance for accounts receivable previously
423337.781949809.53
recognised upon individual assessment
Non-operating income and non-operating expenses not included in
23314293.0877025619.76
above categories
Other items falling into the definition of non-recurring gain or loss
Total non-recurring gain or loss 109667265.93 163065508.18
Less: Impact on income tax 27082435.88 40243159.73
Total non-recurring gain or loss (net of income tax) 5984091.32 11167403.88
T/o: Attributable to non-controlling interests 76600738.73 111654944.57
15.2 Return on net assets (RONA) and earnings per share (EPS)
15.2.1 Year ened 31 December 2022
Weighted average EPS
Net profit
RONA in % Basic EPS Diluted EPS
Net profit attributable to shareholders of the
17.935.955.95
Company
Net profit post adjustment for non-recurring gain
or loss attributable to shareholders of the 17.50 5.80 5.80
Company
145Anhui Gujing Distillery Company Limited
Notes to the Financial Statements
15.2.2 Year ened 31 December 2021
Weighted average EPS
Net profit
RONA in % Basic EPS Diluted EPS
Net profit attributable to shareholders of the
21.254.454.45
Company
Net profit post adjustment for non-recurring gain
or loss attributable to shareholders of the 20.22 4.24 4.24
Company
Chairman of the Board:
Anhui Gujing Distillery Company Limited
28 April 2023
146
