Anhui Gujing Distillery Company Limited
Annual Report 2023
April 2024Annual Report 2023
Part I Important Notes Table of Contents and Definitions
The Board of Directors (or the “Board”) the Supervisory Committee as well as the
directors supervisors and senior management of Anhui Gujing Distillery Company
Limited (hereinafter referred to as the “Company”) hereby guarantee the factuality
accuracy and completeness of the contents of this Report and its summary and shall
be jointly and severally liable for any misrepresentations misleading statements or
material omissions therein.Liang Jinhui the legal representative and Zhu Jiafeng the Deputy Chief Accountant
and Board Secretary hereby guarantee that the financial statements carried in this
Report are factual accurate and complete.All the Company’s directors have attended the Board meeting for the review of this
Report and its summary.Any plans for the future and other forward-looking statements mentioned in this
Report shall NOT be considered as absolute promises of the Company to investors.Investors among others shall be sufficiently aware of the risk and shall differentiate
between plans/forecasts and promises. Again investors are kindly reminded to pay
attention to possible investment risks.Investors’ attention is kindly directed to the 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 RMB45.00 (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.~ 2 ~Annual Report 2023
Table of Contents
Part I Important Notes Table of Contents and Definitions 2
Part II Corporate Information and Key Financial Information 6
Part III Management Discussion and Analysis 11
Part IV Corporate Governance 40
Part V Environmental and Social Responsibility 63
Part VI Significant Events 71
Part VII Share Changes and Shareholder Information 76
Part VIII Preferred Shares 85
Part IX Corporate Bonds 86
Part X Financial Statements 87
~ 3 ~Annual Report 2023
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.~ 4 ~Annual Report 2023
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.~ 5 ~Annual Report 2023
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）
~ 6 ~Annual Report 2023
disclosed
Media and website where this Report is disclosed China Securities Journal Ta Kung Pao (HK) and 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 2021.7.22- The raised funds
No. 1 Jianguomenwai Avenue Fang Lei and Chen Jingjing
Corporation Limited have been used up
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 2021.7.22- The raised funds
No. 1 Jianguomenwai Avenue Fang Lei and Chen Jingjing
Corporation Limited have been used up
Chaoyang District Beijing
VI Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.□ Yes □ No
2023 2022 2023-over-2022 2021
~ 7 ~Annual Report 2023
change (%)
Operating revenue (RMB) 20253526598.02 16713234153.52 21.18% 13269826266.04
Net profit attributable to the listed
4589164052.803143144732.0846.01%2297894413.25
company’s shareholders (RMB)
Net profit attributable to the listed
company’s shareholders before 4495219187.57 3066543993.35 46.59% 2186239468.68
exceptional gains and losses (RMB)
Net cash generated from/used in
4496206034.423107914579.4844.67%5254308127.79
operating activities (RMB)
Basic earnings per share
8.685.9545.88%4.45
(RMB/share)
Diluted earnings per share
8.685.9545.88%4.45
(RMB/share)
Weighted average return on equity
22.92%17.93%4.99%21.25%
(%)
Change of 31
31 December 2023 31 December 2022 December 2023 over 31 December 2021
31 December 2022 (%)
Total assets (RMB) 35420907274.99 29789822298.65 18.90% 25418086447.80
Equity attributable to the listed
21525309609.4418520757973.5216.22%16537389443.64
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.~ 8 ~Annual Report 2023
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 6584074879.74 4725941615.36 4642653988.77 4300856114.15
Net profit attributable to the listed
1569704169.521209770197.991033160506.48776529178.81
company’s shareholders
Net profit attributable to the listed
company’s shareholders before 1545070631.50 1186050259.26 1012080336.13 752017960.68
exceptional gains and losses
Net cash generated from/used in
3078684397.051649152299.68991789089.45-1223419751.76
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 2023 2022 2021 Note
Gain or loss on disposal of non-current
assets (inclusive of impairment allowance -2063270.90 -4666425.09 -5976856.98
write-offs)
Government grants recognised in profit or
loss (exclusive of those that are closely
related to the Company's normal business
operations and given in accordance with 39946354.24 46721259.52 55274502.42
defined criteria and in compliance with
government policies and have a continuing
impact on the Company's profit or loss)
Gain or loss on fair-value changes in
financial assets and liabilities held by a
51603409.9543874800.6434792433.45
non-financial enterprise as well as on
disposal of financial assets and liabilities
~ 9 ~Annual Report 2023
(exclusive of the effective portion of hedges
that is related to the Company's normal
business operations)
Reversed portions of impairment allowances
for receivables which are tested individually 98239.02 423337.78 1949809.53
for impairment
Non-operating income and expense other
51716611.3523314293.0877025619.76
than the above
Less: Income tax effects 34596052.57 27082435.88 40243159.73
Non-controlling interests effects (net of
12760425.865984091.3211167403.88
tax)
Total 93944865.23 76600738.73 111654944.57 --
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.~ 10 ~Annual Report 2023
Part III Management Discussion and Analysis
I Industry Overview for the Reporting Period
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.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.According to data released by the China Alcoholic Drinks Association in 2023 the national alcoholic beverage industry achieved a
total production output of 61.31 million kilolitres marking a year-on-year increase of 1.1%. Within this the baijiu sector produced
6.29 million kilolitres experiencing a decline of 5.1% compared to the previous year; however it generated sales revenue of
RMB756.3 billion an increase of 9.7% and realised a total profit of RMB232.8 billion an increase of 7.5%. Despite a reduction in
production the baijiu industry in China continued to see growth in revenue and profits with competition in the high-end market
expected to intensify further.
2. Position of the Company in the Industry
China has a long history of baijiu. There are a large number of baijiu production enterprises in the country but the regional
distribution of baijiu consumers is particularly evident. The baijiu industry is characterized by full competition with a high degree of
marketization. The market competition is fierce and the industry adjustments are constantly deepening. In the national market the
competitive edges of the enterprises come from their brand influence product style and marketing & operation models. In a single
regional market the competitive strengths of the enterprises depend on their brand influence in the region the recognition of the
companies by regional consumers and comprehensive marketing capacity.As one of China’s traditional top eight liquor brands the Company is the first listed baijiu company with both A and B stocks. It is
located in Bozhou City Anhui Province in China the hometown of historic figures Cao Cao and Hua Tuo as well as one of the
world’s top 10 liquor-producing areas. No changes have occurred to the main business of the Company in the Reporting Period. As
the main product of the Company the Gujing spirit originated as a “JiuYunChun Spirit” together with its making secrets being
presented as a hometown specialty by Cao Cao a famous warlord in China’s history to Emperor Han Xiandi (name: Liu Xie) in A.D.~ 11 ~Annual Report 2023
196 and was continually presented to the royal house since then. With crystalline liquid rich aroma a fine flavor and a lingering
aftertaste the Gujing spirit has helped the Company win four national baijiu golden awards a golden award at the 13th SIAL Paris
the title of China’s “Geographical Indication Product” the recognition as a “Key Cultural Relics Site under the State Protection” the
recognition with a “National Intangible Cultural Heritage Protection Project” a Quality Award from the Anhui provincial
government a title of “National Quality Benchmark” among other honors.In April 2016 Gujing Distillery signed a strategic cooperation agreement with Huanghelou Liquor Co. Ltd. opening a new era of
cooperation in China's famous liquor industry. Yellow Crane Tower Baijiu is the only famous Chinese liquor in Hubei. Its unique
style is "soft mellow elegant and cool and has a long lingering fragrance". It won the two China gold medal in baijiu appreciation in
1984 and 1989. At present Huanghelou liquor industry has three bases: Wuhan Xianning and Suizhou. Among them Huanghelou
Liquor Culture Expo Park in Wuhan base has been approved as national AAA scenic spot and Huanghelou forest wine town in
Xianning base has been approved as national AAAA scenic spot.In January 2021 Gujing Distillery and Mingguang signed a strategic cooperation agreement. The unique mung bean flavor adds to
the famous liquor family of Gu Jing. 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.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.Main sales model
The Company's key sales model is dealer model. Under the dealer model the Company will select one or more dealers for sales of a
product brand (or product sub-brand) according to the market capacity.Distribution model:
□ Applicable □ Not applicable
1. Operating Performance by Distribution Channel and Product Category
Unit: RMB
YoY
YoY
YoY change
change
change in
in
By Operating revenue Cost of sales Gross profit margin in cost gross
operating
of sales profit
revenue
(%) margin
(%)
(%)
Channel
Online 729306974.15 188844601.39 74.11% 19.48% 34.77% -2.93%
Offline 19524219623.87 4051006305.52 79.25% 21.25% 10.20% 2.08%
Total 20253526598.02 4239850906.91 79.07% 21.18% 11.10% 1.90%
By Operating revenue Cost of sales Gross profit margin YoY YoY YoY
~ 12 ~Annual Report 2023
change change change
in in cost in
operating of sales gross
revenue (%) profit
(%) margin
(%)
Product series
Original Vintage 15417295372.80 2212921728.80 85.65% 27.34% 18.04% 1.14%
Gujinggong Liquor 2015573278.78 841033015.00 58.27% 7.56% 11.43% -1.45%
Yellow Crane Tower and others 2205888021.33 714102955.49 67.63% 0.87% -6.50% 2.55%
Total 19638756672.91 3768057699.29 80.81% 21.47% 11.04% 1.80%
2. Number of Distributors by Geographical Segment
Segment Ending number Change in the Reporting Period
North China 1224 92
South China 593 63
Central China 2803 82
International 21 5
Total 4641 242
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 107301.16
1 Raw materials
Tendering purchasing 169580.63
2 Packing materials Tendering purchasing 266685.76
Total 543567.55
The proportion of raw materials purchased from cooperations or farmers to total purchase amount exceeds 30%
□ Applicable □ Not applicable
~ 13 ~Annual Report 2023
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
20232022
Change
Item As % of total cost of As % of total cost of
Cost of sales (RMB) Cost of sales (RMB) (%)
sales sales
Direct
3053570734.5772.02%2740292507.2771.80%11.43%
materials
Direct labor
372085693.598.78%332141904.078.70%12.03%
cost
Manufacturing
240904845.075.68%224128683.405.87%7.49%
expenses
Fuels 101496426.06 2.39% 96765210.22 2.54% 4.89%
Total 3768057699.29 88.87% 3393328304.96 88.91% 11.04%
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 63528.17 63477.51 24652.92 0.18% 20.63% 0.21%
Gujinggong Liquor Series 26769.14 29664.39 5656.61 -26.70% -3.83% -33.86%
Yellow Crane Tower Liquor
24248.6225177.384227.93-27.51%-19.37%-18.01%
Series and other
2. Ending inventory of finished liquor and semi-product
Category Ending quantity (ton)
Finished liquor 34537.46
Semi-product (including base liquor) 234292.88
3. Capacity
Unit: ton
Main product Designed capacity Actual capacity Capacity in progress
~ 14 ~Annual Report 2023
Finished liquor 115000 114546 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
2023 marked the inaugural year of implementing the guiding principles of the 20th CPC National Congress on all fronts a truly
extraordinary year and a pivotal one for the Company as it crossed the RMB20 billion revenue threshold. Guided by Xi Jinping
Thought on Socialism with Chinese Characteristics for a New Era the Company diligently implemented the guiding principles of the
20th CPC National Congress and the party congresses at provincial and municipal levels. We fully embraced the new development
philosophy focused on the annual targets adhered to long-termism pursuit of excellence and commitment to quality firmly grasped
the primary task of high-quality development and promoted steady progress quality enhancement and efficiency in all areas of
operation successfully achieving the goals set for 2023 and smoothly surpassing the RMB20 billion revenue mark.For 2023 the Company recorded operating revenue of RMB20.254 billion up 21.18% compared to the prior year; a net profit
attributable to the Company as the parent of RMB4.589 billion increasing 46.01% from the year earlier; and earnings per share of
RMB8.68 45.88% higher than last year.The overall operating performance of the Company in the Reporting Period:
(I) The Company strove for more influential "brands" year-on-year
The Company guided by the "Brand Revival Project" strengthened digital marketing consumer cultivation and resource integration
and deepened the integrated marketing system construction involving Gujing Mingguang and Yellow Crane Tower. Moreover with
adherence to the communication strategy of "striving for influential brands spiking hard from a high position and concentrating
resources" the Company innovated in communication methods and continually built up high-speed rail and Spring Festival Gala IP.The baijiu culture embarked on a global tour and at the 15th "Hua Zun Cup" China liquor brand value contest the brand value of
"Gujinggong" reached a new high of RMB293.102 billion.(II) The Company strengthened quality management and steadily improved in product quality
The Company strictly implemented production processes and continuously optimised brewing techniques. Lean production was
further advanced and supply chain efficiency was enhanced. Scientific scheduling and efficient collaboration continued to optimise
key efficiency indicators.(III) The Company focused on scientific research and advanced the deep operation of research platforms
The Company deepened cooperation and exchanges and reaped significant achievements in the construction of scientific research
platforms. It coordinated the advancement of the China Baijiu Health Research Institute the Gujing Distillery Original Vintage Grain
Research Institute and the Gujing Distillery Original Vintage Quality Research Institute focusing on projects related to baijiu health
brewing grains and quality thus enhancing the application of research and development outcomes. The Company was awarded the
"The First Prize of the 2020 Science and Technology Award by the China National Food Industry Association" received one Second
Prize for Scientific and Technological Progress from Anhui Province and was granted 38 patents.(IV) The Company advanced innovative models and deepened digital construction of Gujing
The Company has established a new digital model for Gujing achieving significant results in digital infrastructure data resource
systems platform capabilities contextual applications and security measures thereby enhancing the vigour of intelligent digital
operations. The development of the Gujing data middleware has successfully broken data silos activated data value and supported
~ 15 ~Annual Report 2023
scientific decision-making. The construction of an industrial Internet of Things platform has placed smart factories and digital
workshops on the fast track. Guided by the lighthouse factory model the MES system has been developed to promote the integration
of Operational Technology (OT) and Information Technology (IT) accelerating the transformation towards intelligent manufacturing.(V) The Company focused on building a premier enterprise and unleashed new management dynamics
The Company has deepened the three-year action of the reform of state-owned enterprises ensuring the implementation of reform
measures for mechanisms and systems. It has intensified the competition for management positions the elimination of the least
competent personnel and continuously improved the rotation and secondment of management staff further activating the potential of
Gujing talent. The internal control system has been further refined firmly establishing safety responsibilities and achieving the "four
zeros" target in safe production.(VI) The Company focused on enhancing the guidance of Party building demonstrating a new look for the Company
The Company has intensively studied propagated and implemented the guiding principles of the 20th CPC National Congress on all
fronts fully embracing Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and deepened themed
education. We have continued to emphasise the leading role of Party building persistently improved our style of work and tightened
up on ideological work.(VII) In the Reporting Period the Company was still under pressure and had deficiencies as follows.
(1) The industry is experiencing accelerated differentiation and transformation requiring further enhancement in product capabilities
brand strength and channel influence.
(2) The internal management system of the enterprise is not sufficiently efficient for its scale of development necessitating further
activation of internal dynamics.
2. Revenue and Cost Analysis
(1) Breakdown of Operating Revenue
Unit: RMB
20232022
As % of total As % of total
Change (%)
Operating revenue operating revenue Operating revenue operating revenue
(%)(%)
Total 20253526598.02 100% 16713234153.52 100% 21.18%
By operating division
Manufacturing 20253526598.02 100.00% 16713234153.52 100.00% 21.18%
By product category
Baijiu 19638756672.91 96.97% 16167709250.64 96.74% 21.47%
Hotel services 83688162.68 0.41% 57506783.34 0.34% 45.53%
Other 531081762.43 2.62% 488018119.54 2.92% 8.82%
By operating segment
North China 1842994377.93 9.10% 1325791564.93 7.93% 39.01%
Central China 17106718631.38 84.47% 14354624988.86 85.89% 19.17%
South China 1282816365.91 6.33% 1011003651.35 6.05% 26.89%
~ 16 ~Annual Report 2023
Overseas 20997222.80 0.10% 21813948.38 0.13% -3.74%
By sales model
Online 729306974.15 3.60% 610385143.59 3.65% 19.48%
Offline 19524219623.87 96.40% 16102849009.93 96.35% 21.25%
(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 YoY change in
Gross profit YoY change in
Operating revenue Cost of sales operating revenue gross profit
margin cost of sales (%)
(%) margin (%)
By operating division
Manufacturing 20253526598.02 4239850906.91 79.07% 21.18% 11.10% 1.90%
By product category
Baijiu 19638756672.91 3768057699.29 80.81% 21.47% 11.04% 1.80%
Hotel services 83688162.68 45130663.83 46.07% 45.53% 33.50% 4.85%
Other 531081762.43 426662543.79 19.66% 8.82% 9.63% -0.59%
By operating segment
North China 1842994377.93 373249635.06 79.75% 39.01% 24.41% 2.38%
Central China 17106718631.38 3637568886.44 78.74% 19.17% 10.05% 1.77%
South China 1282816365.91 224324231.97 82.51% 26.89% 10.03% 2.67%
Overseas 20997222.80 4708153.44 77.58% -3.74% -34.10% 10.33%
By sales model
Online 729306974.15 188844601.39 74.11% 19.48% 34.77% -2.93%
Offline 19524219623.87 4051006305.52 79.25% 21.25% 10.20% 2.08%
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 2023 2022 Change (%)
Sales volume Ton 118319.28 114694.21 3.16%
Baijiu brewage Output Ton 114545.93 133386.36 -14.12%
Inventory Ton 34537.46 38310.81 -9.85%
~ 17 ~Annual Report 2023
Any over 30% YoY movements in the data above and why:
□ Applicable □ Not applicable
(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
20232022
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 3053570734.57 72.02% 2740292507.27 71.80% 11.43%
manufacturing
Food
Direct labor cost 372085693.59 8.78% 332141904.07 8.70% 12.03%
manufacturing
Food Manufacturing
240904845.075.68%224128683.405.87%7.49%
manufacturing expenses
Food
Fuels 101496426.06 2.39% 96765210.22 2.54% 4.89%
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:
Wuhan Gulou Junhe Trading Co. Ltd. Wuhan Gulou Juntai Trading Co. Ltd. Xiaogan Gulou Tiancheng Trading Co. Ltd. Guizhou
Zhencang Distillery Sales Co. Ltd. and Anhui Guqi Distillery Co. Ltd.; and one subsidiary Anhui Anjie Technology Co. Ltd. was
de-registered.
(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) 2590984495.97
Total sales to top five customers as % of total sales of the
12.79%
Reporting Period (%)
~ 18 ~Annual Report 2023
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 1717248953.48 8.48%
2 Distributor B 274630334.07 1.36%
3 Distributor C 209362099.42 1.03%
4 Distributor D 201552509.46 0.99%
5 Distributor E 188190599.54 0.93%
Total -- 2590984495.97 12.79%
Other information about major customers:
□ Applicable □ Not applicable
Major suppliers:
Total purchases from top five suppliers (RMB) 1054578376.52
Total purchases from top five suppliers as % of total purchases
19.40%
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 269578605.42 4.96%
2 Supplier B 229314852.59 4.22%
3 Supplier C 203794945.66 3.75%
4 Supplier D 176697081.21 3.25%
5 Supplier E 175192891.64 3.22%
Total -- 1054578376.52 19.40%
Other information about major suppliers:
□ Applicable □ Not applicable
3. Expense
Unit: RMB
2023 2022 Change (%) Reason for any significant change
Selling expense 5436773057.25 4668185055.13 16.46%
Administrative expense 1367146467.89 1166780389.23 17.17%
~ 19 ~Annual Report 2023
Finance costs -162244024.88 -216299053.07 24.99%
R&D expense 70947196.49 56667203.01 25.20%
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 2023 2022 Change (%) Reason
Employment The main reason is the combined impact of sales
1230880423.44938740215.8831.12%
benefits staff and salary increase.Travel fees 223518669.30 169521676.66 31.85% The main reason is the increase of sales staff.Advertisement
1101364892.63995196089.7110.67%
fees
Comprehensive
2089071299.151814692295.3915.12%
promotion costs
Service fees 656190943.27 638147336.90 2.83%
Others 135746829.46 111887440.59 21.32%
Total 5436773057.25 4668185055.13 16.46%
Details about advertisement
No. Main way Amount (RMB’0000)
1 TV 31575.84
2 Offline 61938.67
3 Online 16621.98
Total 110136.49
4. R&D Investments
□ Applicable □ Not applicable
Names of main Expected impact on the future
Project objectives Project progress Objectives to be achieved
R&D projects development of the Company
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 flavouring liquor with unique
process of making high-quality flavouring liquor
the development of new Concluded. flavour to prepare for the
compound fragrant with unique flavour further
products and the design 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.Research of process The experiments Concluded. Theoretically and practically The quality of Gujinggong
~ 20 ~Annual Report 2023
and experiments for systematically optimize the various parameters of the liquor will be steadily
making strongly the production process of strongly fragrant baijiu are improved to maintain the
fragrant baijiu making strongly fragrant revealed to be scientific and continuously improving
liquor improve the reasonable which provides quality of the brand.sensory quality of more scientific support for
Gujinggong liquor process execution.making the product No. 1
in China in terms of
strongly fragrant baijiu.Water plays a crucial role
in the fermentation
environment aiding in The project has
the separation of successfully
aroma-carrying concluded with the
This project is expected to
substances and solids. completion of the
Research on key To conduct trials on brewing clarify the influence of
Due to the varying research on brewing
technologies for production using various different water sources on
qualities of different production using
brewing with water sources in order to brewing production thereby
water sources this different water
different water explore their specific impacts providing a scientific basis for
project aims to explore sources and the
sources on the brewing process. the selection of brewing
the effects of these compilation of a
water.variations on brewing comprehensive
production and provide a project summary
scientific basis for report.selecting water suitable
for brewing.This project is focused on
intelligent brewing in the
standing vat production
conducting orthogonal
To enhance the quality of the
Research on the experiments on the ratio
The project plan has base spirit in newly This project is expected to
impact of intelligent of clear distillation grain
been fully established workshops thus establish technical support for
brewing and grain bottom grain and
implemented and supporting the Company's the commissioning of new
mixing methods on covering grain. This
summarised. development towards intelligent workshops
the quality of daqu research aims to provide
increased intelligence.foundational data for the
operation of Workshops 2
to 6 at the Intelligent
Park in 2023.Research on key By conducting Following the project This is to achieve an The refined grain moistening
factors influencing single-factor plan the improved grain moistening process will improve the
the moistening of experiments the optimal implementation and process that supports the quality of daqu produced via
grains in strong grain moistening comprehensive enhancement of daqu quality intelligent brewing
flavour baijiu temperature water summary analysis in intelligent brewing. contributing to the Company's
~ 21 ~Annual Report 2023
production amount and time were have been completed. rapid development.determined. This was
followed by a
three-factor three-level
orthogonal experiment to
develop an improved
grain moistening process.To study the distillation
speeds of bottom liquor
and jujube liquor through
To optimise and refine the
Research on key single-factor The project aims to enhance
distillation speeds and
technology control experiments and to The project summary the quality of the Company's
temperature parameters for
in intelligent determine the optimal has been completed. daqu laying a foundation for
different types of daqu in the
distillation distillation speed rapid development.brewing production process.providing a reference for
improving the quality of
the daqu.Through the optimisation
of single-grain crushing
degree testing methods The crushing degree
Ensuring that the grain flour
exploration of the current testing method has
Research on quality reaches the optimal
state of grain crushing in been determined To determine the optimal
standards for gelatinisation state thereby
the Company study of using a 40-mesh range of crushing degrees for
crushing brewing promoting an improvement in
crushing conditions and sieve for assessing brewing grains.grains the quality of the brewing
workshop validation this the degree of
production.project aims to establish crushing.evaluation standards for
grain crushing.To determine the
Research on
evaluation methods for
steaming spent This project aims to ensure
spent grain husks through To establish the optimal
grain technology the quality level of the
physicochemical analysis The project has been steaming spent grain process
and quality production-used rice husks
after steaming and to concluded. conditions at the Intelligent
evaluation system thereby safeguarding the
establish the steaming Park.for strong flavour quality of the base spirit.spent grain process at the
baijiu production
Intelligent Park.Conduct brewing By examining the differences This project aims to clarify
Research on key
experiments in the in the fermented mash and the effects of steam
factors for
workshop to investigate liquor samples before and acidification before and after
high-quality The project has been
the changes in the after steam acidification and on the fermented mash and
low-carbon concluded.fermented mash before exploring the necessity of liquor samples providing
distillation in baijiu
and after steam steam acidification to provide technical support for the
production
pressurisation guidance for the Company’s Company's clean production
~ 22 ~Annual Report 2023
scientifically elucidate brewing production processes. efforts.the impact of steam
acidification on the mash
and explore the necessity
of steam acidification to
provide technical support
for the Company’s clean
production initiatives.Details about R&D personnel:
2023 2022 Change (%)
Number of R&D personnel 1147 1057 8.51%
R&D personnel as % of total
8.84%9.35%-0.51%
employees
Educational background of
——————
R&D personnel
Bachelor’s degree 190 191 -0.52%
Master’s degree 68 47 44.68%
Other 889 819 8.55%
Age structure of R&D
——————
personnel
Below 30 236 155 52.26%
30~4045838419.27%
Over 40 453 518 -12.55%
Details about R&D investments:
2023 2022 Change (%)
R&D investments (RMB) 366964999.32 288639442.89 27.14%
R&D investments as % of
1.81%1.73%0.08%
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
~ 23 ~Annual Report 2023
5. Cash Flows
Unit: RMB
Item 2023 2022 Change (%)
Subtotal of cash generated from
22245995624.1218629603955.6619.41%
operating activities
Subtotal of cash used in operating
17749789589.7015521689376.1814.35%
activities
Net cash generated from/used in
4496206034.423107914579.4844.67%
operating activities
Subtotal of cash generated from
1926743407.878483831118.31-77.29%
investing activities
Subtotal of cash used in investing
3204676207.013215119847.70-0.32%
activities
Net cash generated from/used in
-1277932799.145268711270.61-124.26%
investing activities
Subtotal of cash generated from
162200000.0075900000.00113.70%
financing activities
Subtotal of cash used in financing
1809679253.141404702593.4728.83%
activities
Net cash generated from/used in
-1647479253.14-1328802593.47-23.98%
financing activities
Net increase in cash and cash
1570793982.147047823256.62-77.71%
equivalents
Explanation of why any of the data above varies significantly:
□ Applicable □ Not applicable
(1) Net cash generated from operating activities stood at RMB4496206034.42 in the Reporting Period up 44.67% year-on-year
primarily driven by the increased cash received from sale of goods and rendering of services.
(2) Subtotal of cash generated from investing activities stood at RMB1926743407.87 in the Reporting Period down 77.29%
year-on-year primarily driven by the decreased cash received from disinvestment.
(3) Subtotal of cash generated from financing activities stood at RMB162200000.00 in the Reporting Period up 113.70%
year-on-year primarily driven by the increased cash received by subsidiaries as borrowings.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
~ 24 ~Annual Report 2023
VI Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Unit: RMB
31 December 2023 1 January 2023 Change in
Reason for any significant
As % of total As % of total percentage
Amount Amount change
assets assets (%)
Monetary assets 1 5966371744.19 45.08% 13772561141.30 46.23% -1.15%
Accounts
68607919.270.19%62688668.940.21%-0.02%
receivable
Inventories 7519682536.51 21.23% 6058106090.88 20.34% 0.89%
Investment
46622910.190.13%13396881.960.04%0.09%
property
Long-term
equity 10367078.26 0.03% 10154235.98 0.03% 0.00%
investments
Fixed assets 4596044056.92 12.98% 2741844586.30 9.20% 3.78%
Construction in
2910735155.398.22%2454703251.448.24%-0.02%
progress
Right-of-use
81038100.240.23%32562171.100.11%0.12%
assets
Short-term
0.000.00%83232176.310.28%-0.28%
borrowings
Contract
1401122249.533.96%826636478.352.77%1.19%
liabilities
Long-term
107106256.940.30%44944737.910.15%0.15%
borrowings
Lease liabilities 68380767.78 0.19% 18631395.93 0.06% 0.13%
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
~ 25 ~Annual Report 2023
Gain/loss on Cumulative Impairment
fair-value fair-value allowance Purchased in
Beginning Sold in the Other
Item changes in the changes for the the Reporting Ending amount
amount Reporting Period c hanges
Reporting charged to Reporting Period
Period equity Period
Financial assets
1.
Held-for-trading
financial assets
1782687769.6619987547.420.000.00700000000.001782687769.660.00719987547.42
(excluding
derivative
financial assets)
2. Derivative
financial assets
3. Other debt
investments
4. Other equity
56447789.940.006657868.130.000.000.000.0063105658.07
investments
5. Other
non-current
financial assets
Subtotal of
1839135559.6019987547.426657868.130.00700000000.001782687769.660.00783093205.49
financial assets
Total of the
1839135559.6019987547.426657868.130.00700000000.001782687769.660.00783093205.49
above
Financial
0.000.000.000.000.000.000.000.00
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 1290204326.83
issuing bank acceptance bills
Intangible assets 54303340.26 Pledged loans.Total 1344507667.09 --
~ 26 ~Annual Report 2023
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 2311258225.68 5 107283150.56 funds and 62.00% N/A N/A N/A
project for production 2020 on Investment
raised funds
liquor in the Smart
production Technology
Transformation
~ 27 ~Annual Report 2023
Project for
Liquor
Production
disclosed by
the Company
on the website
of Cninfo
dated 3 March
2020.
Total -- -- -- 2311258225.68 5 107283150.56 -- -- N/A N/A -- -- --
~ 28 ~Annual Report 2023
4. Financial Investments
(1) Securities Investments
□ Applicable □ Not applicable
Unit: RMB
Gain/loss
on fair
Variety Cumulative fair Purchased
Code of Name of Initial Accounting Beginning value Sold in the Gain/loss in Ending value changes in the Funding
of measurement changes in Reporting the Reporting carrying Accounting title
securities securities investment cost charged to Reporting model carrying value the Period Period value
source
securities equity Period
Reporting
Period
DAPU Asset Fair value Held-for-trading Self-owned
Fund 200000000.00 202334870.49 20 2334870.49 - 1934564.20 0.00
Management method financial assets funds
Other ending holding securities
------
investments
Total 200000000.00 -- 202334870.49 20 2334870.49 - 1934564.20 0.00 -- --
Disclosure date of the
announcement about the board’s
N/A
consent for the securities
investment
Disclosure date of the
announcement about the general
N/A
meeting’s consent for the
securities investment (if any)
~ 29 ~Annual Report 2023
(2) Investments in Derivative Financial Instruments
□ Applicable □ Not applicable
1) Investments in derivative financial instruments for the purpose of hedging during the Reporting Period
□ 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
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 20
repurchase 11 January
Naught No repurchase of 6000.00 December 6000.00 11019.90 14500.00 0.00 2519.90 0.11% 14.41
of national 2024
national debt 2022
debt
Total 6000.00 -- -- 6000.00 11019.90 14500.00 0.00 2519.90 0.11% 14.41
Capital source for derivative investment Company’s own funds
Lawsuits involved (if applicable) N/A
~ 30 ~Annual Report 2023
Disclosure date of board announcement approving
30 August 2013
derivative investment (if any)
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.~ 31 ~Annual Report 2023
5. Use of Funds Raised
□ Applicable □ Not applicable
(1) Overall Usage of Funds Raised
□ Applicable □ Not applicable
Unit: RMB’0000
Proportion
The usage
Total funds Accumulative of Amount of
Total funds and
Way of Total funds Net of funds used in the Accumulative funds with accumulative Total unused funds raised
Year with usage destination
raising raised raised Current fund used usage funds with funds idle for over
changed of unused
Period changed usage two years
funds
changed
Deposited in
Private fund raising
2021 placement of 500000 495434.21 156611.37 308553.86 0.00 0.00 0.00% 186880.35 account and 0.00
stocks cash
management
Total -- 500000 495434.21 156611.37 308553.86 0.00 0.00 0.00% 186880.35 -- 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 2023 the Company cumulatively used raised funds of RMB1566113700 and the
interest from the special account of raised funds was RMB66998300. As of the end of 2023 the balance of certificate of deposit and time deposits purchased with temporarily idle raised funds
was RMB1.9 billion. The amount of balance due in the special account of raised funds on 31 December 2023 was RMB2023232600.
(2) Commitment Projects of Fund Raised
□ Applicable □ Not applicable
~ 32 ~Annual Report 2023
Unit: RMB’0000
Whether
Accumulative Investment
Changed or Investment Date of Realized Whether occurred
Committed Investment investment schedule as
Committed investment project not (including amount in the reaching income in the reached significant
investment amount after amount as of the
and super raise fund arrangement partial Reporting intended use Reporting anticipated changes in
amount adjustment (1) the period-end period-end
changes) Period of the project Period income project
(2)(3)＝(2)/(1)
feasibility
Committed investment project
The smart technology
31 December
transformation project for liquor Not 495434.21 495434.21 156611.37 308553.86 62.28% N/A N/A Not
2024
production
Subtotal of committed investment
-- 495434.21 495434.21 156611.37 308553.86 -- -- N/A -- --
project
Total -- 495434.21 495434.21 156611.37 308553.86 -- -- N/A -- --
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
~ 33 ~Annual Report 2023
Adjustment of implementation
N/A
mode of investment project
Advance investments in projects
financed with raised funds and
swaps of such advance N/A
investments with subsequent
raised funds
Idle fund supplementing the
N/A
current capital temporarily
Amount of surplus in project
N/A
implementation and the reasons
Usage and destination of unused As of 31 December 2023 the unused raised funds and the interest were deposited in the special account for raised funds and idle raised funds of RMB1.9
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.~ 34 ~Annual Report 2023
2. Sale of Major Equity Interests
□ Applicable □ Not applicable
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 9602688039.38 2973495817.94 18352818599.69 2265501869.15 1755194808.96
Sales Co. Ltd
assistant materials
etc.Manufacture and
Anhui Longrui
Subsidiary sale of glass 86660268.98 542941516.84 437163522.79 417924826.89 38424264.16 37107914.81
Glass Co. Ltd
products etc.Yellow Crane Tower
Production and
Wine Industry Co. Subsidiary 400000000.00 2075028332.22 957759311.79 1827457484.53 282928028.47 221724360.09
sales of baijiu etc.Ltd
Shanghai Gujing
Jinhao Hotel Hotel management
Subsidiary 54000000.00 162043054.02 82791185.49 69568008.98 6562610.27 3750118.62
Management Co. house lease etc.Ltd.Subsidiaries obtained or disposed in the Reporting Period:
~ 35 ~Annual Report 2023
□ Applicable □ Not applicable
Subsidiary How subsidiary was obtained or disposed Effects on overall operations and performance
Practicing the internationalization strategy of Gujing and
Anhui Guqi Distillery Co. Ltd. Incorporated with investment
cultivating new consumer groups
Optimizing internal operation structure and enhancing
Guizhou Zhencang Winery Industry Sales Co. Ltd. Incorporated with investment
endogenous impetus
Optimizing internal operation structure and enhancing
Wuhan Gulou Junhe Trading Co. Ltd. Incorporated with investment
endogenous impetus
Optimizing internal operation structure and enhancing
Wuhan Gulou Juntai Trading Co. Ltd. Incorporated with investment
endogenous impetus
Optimizing internal operation structure and enhancing
Xiaogan Gulou Tiancheng Trading Co. Ltd. Incorporated with investment
endogenous impetus
Anhui Anjie Technology Co. Ltd. De-registered and liquidated
Notes to main controlled and joint stock companies:
Not applicable.~ 36 ~Annual Report 2023
X Structured Bodies Controlled by the Company
□ Applicable □ Not applicable
XI Prospects
(I) Development Prospect of the Industry the Company is in
1.The baijiu growth logic has been adjusted with slowing consumption upgrades
From the perspective of consumption scenarios the most distinct trend in 2023 was the booming banquet sector contrasted with
weaker business-related consumption which led to a temporary shift in the structure of baijiu consumption. The year 2024 is set to
be a pivotal starting year for the gradual recovery of the baijiu industry. The growth logic of the past decade has been driven by
consumption upgrades resulting in price increases and a shift towards higher-end products a phenomenon that saw many companies
experiencing a "volume decrease price increase continuous ascent". However with increasing economic uncertainty more rational
consumption reduced government and business spending demographic aging and declining birth rates the Chinese liquor industry
is transitioning from a "price increase logic" to a "comprehensive competition logic".
2. The industry concentration continues to increase while the market segmentation intensifies
Looking at the competitive landscape of the industry concentration is continuously increasing showing a "dual concentration trend"
towards leading baijiu brands and strong regional brands. In 2024 the baijiu industry is expected to continue the trend of "the strong
get stronger the weak decline". Key production areas leading companies and renowned brands will further consolidate their market
positions. Additionally the differentiation among companies will persist with baijiu enterprises that possess competitive advantages
and innovation capabilities encountering more development opportunities. Under the dual concentration trend it is crucial for brands
to elevate their profile while also grounding their marketing efforts. Deep market penetration to achieve compressive and substitutive
growth will become a core strategy.
3. Brand enhancement has accelerated the quality expression
The trend towards brand-oriented development in the baijiu industry has resulted in an increasing concentration within the sector a
testament to the growing influence and enhancement of leading brands. Shifting from purchasing "products" to "values" baijiu
companies must attract consumers by enhancing brand added value. The significance of brand factors in market competition is
growing with high-potential brand development expected to accelerate. Quality is the foundation of a brand yet historically baijiu
branding has largely been shaped by history culture and accolades. In today's competitive environment consumers place greater
emphasis on product quality thus enhancing the importance of quality expression in market competitiveness.
4. Digitisation drives marketing innovations
The introduction of digital tools has made liquor marketing more dynamic with digital channel marketing increasingly becoming a
means for liquor companies to reinforce their strengths. Companies are diversifying their marketing strategies developing digital
systems and introducing mechanisms like QR code red packets to boost sales and bottle opening rates thereby enhancing cost
efficiency. Utilizing digital platforms allows for precise targeting of desired audiences boosting promotional impacts. Strengthening
market monitoring and implementing "multi-code integration" digital platforms can track product distribution mitigate the risks of
product diversion and monitor stock changes leading to more precise and market-oriented marketing rhythms.(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
enterprise.
3. Firmly create “Talent Highland” strategy
~ 37 ~Annual Report 2023
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 2024
In 2024 the Company plans to achieve the operating revenue of RMB24.45 billion rising 20.72% compared with that of last year;
and achieve a total profit of RMB7.95 billion rising 25.55% compared with that of last year.(IV) Operating Risk of the Company
1. The strengthened concentration and intensified polarisation in the baijiu industry leading to highly competitive conditions;
2. The more complex severe and uncertain external environment.
(V) Operating Measures
1. Brand Development
We will continue to focus on mainstream media while strengthening new media platforms to enhance synergistic effects in our
promotions. Efforts will be made to enhance our CCTV and satellite TV Spring Festival IP as well as high-speed rail IP include
deepening the quality expression and cultural content of strong flavour baijiu. Leveraging live streaming and short video platforms
the Company aims to continually invigorate our brand increasing our presence in e-commerce factory tours and experience stores
through multi-channel traffic driving creating synergy between online and offline efforts to expand both the reach and effectiveness
of our initiatives.
2. Marketing
The Company will maintain the strategy of aiming high anchoring on a "nationwide and sub-high-end" approach and continue to
deepen the "Three Ones Project" optimizing our product and customer structures. We will coordinate the advancement of both
domestic and international markets. Domestically we will accelerate our national expansion strengthen provincial markets speed up
inter-provincial reach and refine key markets. Internationally we will capitalise on the "Belt and Road" initiative to fully launch
global partnerships and identify optimal agents continuing to target the sub-high-end consumer segment with our strategic focus on
"Gu 20".
3. Production Management
We will progress our wine storage projects and expedite key initiatives enhancing our capabilities for automated baijiu production
and improving our capacity for production reserves bottling operations and related infrastructure. We will bolster our quality
initiatives and establish a distinctive "Grand Quality Control" system specific to Gujing Distillery. Horizontal management will be
strengthened to oversee the entire production process from grain to fragrance while vertical management will be reinforced from the
ground up to solidify the responsibility of quality management staff at all levels ensuring comprehensive gap-free quality control.Centring on "three products" "transparent factory" and "four research institutes" we will continue to refine our quality expression
converting technical terminology into more accessible language and advancing the health flavour quality and cultural aspects of
Gujing Distillery.
4. Engineering Construction
We will accelerate the progression of the Intelligent Park project ensuring the completion of new workshops that are both intelligent
and automated. This initiative will significantly enhance our production capacity quality and efficiency.
5. Informatisation Construction
We will hasten our efforts in advancing the "Digital Engineering" initiative to bolster our capabilities in digital management. This
will include deepening the integration of digital technologies with production and manufacturing processes. We will also intensify
our digital marketing efforts to enrich user experiences and optimise our digital production models. The deployment of the
Manufacturing Execution System (MES) will further facilitate the integration of IT and Operational Technology (OT) merging data
resources and automation benefits to refine production processes boost efficiency reduce costs and ensure that digital advances
significantly enhance the quality of our products.
6. Safety and Environmental Protection
We will comprehensively enforce a strict safety responsibility system and enhance fire management to fortify our safety defences.We will intensify source control and process management of pollutants aiming to further reduce emissions and promote the recycling
of waste. We will continue to advance our energy-saving and environmental protection projects including the implementation of
~ 38 ~Annual Report 2023
photovoltaic projects research into energy storage applications bilateral green energy trading and balanced energy and water usage.We will also meticulously coordinate and enhance our top-level energy-saving management planning and dual-carbon
implementation strategies.
7. Internal Management
We will strengthen our innovative talent incentive mechanisms and consolidate the outcomes of the three-year action plan for
state-owned enterprise reform. We will advance reforms in "tenure systems" "performance wagering" "internal marketisation" and
"independent legal entity" frameworks. By employing more flexible staffing and incentive mechanisms we aim to further unleash
potential revitalise our workforce and significantly boost our core competitiveness.
8. Corporate Culture Construction
We will enhance our political framework by deeply studying and implementing Xi Jinping Thought on Socialism with Chinese
Characteristics for a New Era and comprehensively embracing the guiding principles of the 20th CPC National Congress. Supported
by the Gujing Distillery Original Vintage Cultural Research Institute we will actively explore and disseminate China's excellent
traditional culture continuously implementing the cultural contributions of Gujing Distillery and Zhengzi culture. At the same time
leveraging our steps towards internationalisation with the new Ancient Well approach we will innovate ways and means of cultural
communication aiming to "make Chinese baijiu a global language".In 2024 the Company will continue to be guided by Xi Jinping's Thoughts on Socialism with Chinese Characteristics for a New Era
and deeply implement the guiding principles of the 20th CPC National Congress along with the strategic decisions of the provincial
and municipal governments. With the "Three Products Project" as our blueprint we will work tirelessly hand in hand and focus our
efforts to deeply implement a new round of state-owned enterprise reform and enhancement actions. We will raise the bar strive to be
pioneers and aim to reach RMB30 billion as we set forth on this new journey to compose new chapters and achieve new glories.XII Communications with the Investment Community such as Researches Inquiries and
Interviews
□ Applicable □ Not applicable
XIII Implementation of the Action Plan for “Dual Enhancement of Quality and Profitability”
Indicate whether the Company has disclosed its Action Plan for “Dual Enhancement of Quality and Profitability”.□ Yes □ No
In order to implement the guiding ideology of "to activate the capital market and boost investor confidence" proposed by the
meeting of the Political Bureau of the CPC Central Committee and "to vigorously improve the quality and investment value of listed
companies and to take more effective and effective measures to stabilize the market and stabilize confidence" proposed by the
National Standing Committee combined with the company's development strategy operating conditions and financial conditions in
order to safeguard the interests of all shareholders of the company To enhance investor confidence and promote the long-term
healthy and sustainable development of the company the company has formulated a "quality return double improvement" action plan.For details see the "Announcement on Promoting the" Double Improvement of Quality Return "action Plan" disclosed by the
company on March 6 2024 (Announcement Number: 2024-001).In accordance with the provisions of the Company Law the Articles of Association and other relevant provisions on profit
distribution policy combined with the company's actual situation and development needs in order to fully return shareholders the
company's 2023 profit distribution plan is as follows: Based on the total share capital of 528600000 shares the Company will
distribute a cash dividend of RMB45 (including tax) to all shareholders for every 10 shares. The Company intends to distribute a total
cash dividend of RMB2378700000.00 (including tax) accounting for 51.83% of the net profit attributable to the shareholders of the
listed company in the consolidated statement of this year. This year's cash dividend amount increased by 50.00% fully sharing the
company's development results with the majority of investors.~ 39 ~Annual Report 2023
Part IV Corporate Governance
I General Information of Corporate Governance
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
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
~ 40 ~Annual Report 2023
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.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
No such cases in the Reporting Period.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
shareholders.~ 41 ~Annual Report 2023
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
Resolutions of the
The 2022 Annual Annual General
58.01% 29 June 2023 30 June 2023 2022 Annual
General Meeting Meeting
General Meeting
disclosed on
~ 42 ~Annual Report 2023
www.cninfo.com.cn
Announcement on
Resolutions of the 1st
The 1st Extraordinary
Extraordinary Extraordinary
General Meeting of 59.06% 19 December 2023 20 December 2023
General Meeting General Meeting of
2023
2023 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 Decreas
Beginning in the e in the Other Ending
Incumbent/Form Gende Ag Start of End of
Name Office title shareholdin Reportin Reportin increase/decrea shareholdin
er r e tenure tenure
g (share) g Period g Period se (share) g (share)
(share) (share)
Chairman
Liang 23 April 29 June
of the Incumbent Male 58
Jinhui 2014 2026
Board
23
29 June
Li Peihui Director Incumbent Male 51 August
2026
2016
Zhou Director 23 April 29 June
Incumbent Male 50
Qingwu GM 2014 2026
Director
Executive 5 August 29 June
Yan Lijun Incumbent Male 51
Deputy 2016 2026
GM
Director 23
29 June
Xu Peng Deputy Incumbent Male 54 August
2026
GM 2016
Ye 15
29 June
Changqin Director Incumbent Male 50 Decembe
2026
g r 2011
Wang Independe 27 26
Incumbent Male 62
Ruihua nt director Septemb Septemb
~ 43 ~Annual Report 2023
er 2019 er 2025
Xu Independe 19 June 29 June
Incumbent Male 48
Zhihao nt director 2020 2026
Independe Femal 29 June 29 June
Li Jing Incumbent 56
nt director e 2023 2026
Chairman
of 23
Yang 29 June
Supervisor Incumbent Male 57 August
Xiaofan 2026
y 2016
Committee
29 June 29 June
Song Zifa Supervisor Incumbent Male 43
20232026
19
29 June
Mu hua Supervisor I ncumbent Male 56 Decembe
2026
r 2023
Cui Employee 20 March 29 June
Incumbent Male 56
Yujun supervisor 2022 2026
Liu Employee Femal 29 June 29 June
Incumbent 48
Yongxia supervisor e 2023 2026
Zhang Deputy 5 August 29 June
Incumbent Male 56
Lihong GM 2016 2026
28
Gao Deputy 29 June
Incumbent Male 54 August
Jiakun GM 2026
2020
28
Deputy 29 June
Li Anjun Incumbent Male 54 August
GM 2026
2020
Zhu 28
Deputy 29 June
Xianghon Incumbent Male 50 August
GM 2026
g 2020
23
Deputy 29 June
Kang Lei Incumbent Male 46 Septemb
GM 2026
er 2022
Deputy
GM Chief
Accountan 23
Zhu 29 June
t Incumbent Male 47 Septemb
Jiafeng 2026
Secretary er 2022
of the
Board
~ 44 ~Annual Report 2023
Zhang Independe 19 June 29 June
Former Male 73
Guiping nt director 2020 2023
Chairman
of 19
Sun 20 May
Supervisor Former Male 59 Decembe
Wanhua 2019
y r 2023
Committee
Lu 20 May 29 June
Supervisor F ormer Male 44
Duicang 2019 2023
23
29 June
Zhang Bo Supervisor Former Male 59 August
2023
2016
Total -- -- -- -- -- --
Indicate by tick mark whether any directors or supervisors left or any senior management were disengaged during the Reporting
Period
□Yes □No
Mr. Sun Wanhua applied for resignation from the positions of employee supervisor and chairman of the Supervisory Committee of
the Company due to retirement.Change of Directors Supervisors and Senior Management
□ Applicable □ Not applicable
Name Office title Type of change Date of change Reason for change
Independent
Li Jing Elected 29 June 2023 Election
director
Song Zifa Supervisor Elected 29 June 2023 Election
Employee
Liu Yongxia Elected 29 June 2023 Election
supervisor
19 December
Mu Hua Supervisor Elected Election
2023
Independent
Zhang Guiping Left 29 June 2023 Expiration of the term
director
Chairman of
19 December
Sun Wanhua Supervisory Left Retirement
2023
Committee
Lu Duicang Supervisor Left 29 June 2023 Expiration of the term
Zhang Bo Supervisor Left 29 June 2023 Expiration of the term
2. Biographical Information
Professional backgrounds major work experience and current duties in the Company of the incumbent directors supervisors and
senior management:
~ 45 ~Annual Report 2023
1. Mr. Liang Jinhui male born in October 1966 member of CPC is Political Engineer a deputy to the 13 th 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 8th and 9th 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
8th and 9th 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 8th and 9th Board of Directors of the Company.
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 7 th 8th
and 9th 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 8th
and 9th 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 8th and 9th Board of Directors and Chief Accountant of the Company.
7. 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 JD Technology Holding Co.Ltd. independent director of China Post Securities Co. Ltd.
8. Xu Zhihao male born in June 1976 is a senior economist 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.~ 46 ~Annual Report 2023
9. Li Jing female born in April 1968 holds a master's degree and is a senior accountant. She is currently serving as an independent
director at Kingsignal (300252). Her previous roles include Deputy Manager of the Finance Department Director of the Audit Centre
Manager of Audit and Internal Control and Director of the Settlement Centre at Beijing District Heating Group Co. Ltd.
10. 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 8th and 9th Supervisory Committee of the Company.
11. Song Zifa male born in May 1981 is a member of the Communist Party of China and holds a university degree and a senior
accountant qualification. He currently occupies the position of Director of the Financial Management Centre at Anhui Gujing Group
Co. Ltd. His past appointments include Supervisor of Gujing Group's Audit and Supervision Centre Assistant Director of the
Financial Management Centre and General Manager of Anhui Zhongxin Finance Leasing Co. Ltd.
12. Mu Hua male born in November 1968 is a member of the Communist Party of China with an associate degree. He currently
serves as the Deputy Director of the Party Committee Office at Anhui Gujing Group Co. Ltd. His previous roles include Deputy
Manager and Assistant Director of the President's Office and Deputy Director at the same company.
13. 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 Deputy Director of the Company’s Production Management Centre and Employee Supervisor of the 9th Supervisory
Committee of the Company.
14. Liu Yongxia female born in September 1976 is educated to university level. She is currently the Vice Chair of the Company's
trade union and the Vice Chair of the trade union at Anhui Gujing Group Co. Ltd. She has previously held the positions of Deputy
Manager of the Production Management Centre's Dispatch Centre and Deputy Manager and Manager of the Production Dispatch
Department in the Company's Logistics Dispatch 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 and senior accountant 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
~ 47 ~Annual Report 2023
GM Chief Accountant Secretary of the Board and Director of the Financial Management Center of the Company. He served as the
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 1 November
Yang Xiaofan Anhui Gujing Group Co. Ltd. Yes
President 2009
Ye Changqing Anhui Gujing Group Co. Ltd. CFO 13 August 2021 Yes
Head of
Financial 24 January
Song Zifa Anhui Gujing Group Co. Ltd. Yes
Management 2018
Center
Deputy
Director of
Mu Hua Anhui Gujing Group Co. Ltd. the Party 19 August 2022 Yes
Committee
Office
Vice
Chairman of
Liu Yongxia Anhui Gujing Group Co. Ltd. June 2018 Yes
the Labor
Union
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
Geely Technology Group Co. Ltd. CEO January 2018 Yes
Xu Zhihao Chairman of
Zhejiang Qjiang Motorcycle Co.Ltd. February 2020 May 2024 No
the Board
Wang Ruihua Central University of Finance and Professor July 1983 Yes
~ 48 ~Annual Report 2023
Economics
Independent
Bank Of Beijing Co. Ltd. December 2019 December 2025 Yes
director
Independent
JD Technology Holding Co. Ltd. June 2020 Yes
director
Independent
China Post Securities Co. Ltd. February 2023 Yes
director
Independent
Li Jing Kingsignal Technology Co.Ltd. April 2023 August 2024 Yes
director
Notes Naught
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
Zhang Guiping served as an independent director of the Company from 19 June 2020 to 29 June 2023. Between 9 and 11 February
2022 a securities account registered in the name of Zhang Guiping’s spouse purchased 30700 shares of Gujing Distillery stock
totalling RMB6951019.4 and sold the same amount for RMB7160330. This activity included selling the shares within six months
of purchase.On 8 January 2024 Zhang Guiping received an Administrative Penalty Decision ([2023] No. 14) from the Anhui Securities
Regulatory Bureau. The aforementioned actions were found to be in violation of the first and second clauses of Article 44 of the
Securities Law constituting illegal activities as described in Article 189 of the Securities Law. Considering the facts nature
circumstances and social harm of the misconduct the Anhui Securities Regulatory Bureau decided to issue a warning to Zhang
Guiping and impose a fine of RMB150000.
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
Compensation for personnel will be determined in accordance with the Implementation Opinions on Deepening the Reform of the
Remuneration System for Leaders of Provincial Enterprises issued by the CPC Anhui Provincial Committee and the Anhui
Provincial People's Government (W.F. [2015] No. 28) and the Bozhou Municipal Enterprises Leaders' Salary Management Interim
Measures (G.Z.G. [2017] No. 21) in conjunction with the Company's annual operational status and performance evaluation results.
(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
~ 49 ~Annual Report 2023
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 58 Incumbent Yes
Board
Li Peihui Director Male 51 Incumbent Yes
Zhou Qingwu Director GM Male 50 Incumbent 255.60 N o
Director
Yan Lijun Executive Deputy Male 51 Incumbent 478.14 No
GM
Director Deputy
Xu Peng Male 54 Incumbent 230.42 No
GM
Ye Changqing Director Male 50 Incumbent Yes
Independent
Wang Ruihua Male 62 Incumbent 20.00 No
director
Independent
Xu Zhihao Male 48 Incumbent 20.00 No
director
Independent
Li Jing Female 56 Incumbent No
director
Chairman of
Yang Xiaofan Supervisory Male 57 Incumbent Yes
Committee
Song Zifa Supervisor Male 43 Incumbent Yes
Mu hua Supervisor Male 56 Incumbent Yes
Employee
Cui Yujun Male 56 Incumbent 163.75 No
supervisor
Employee
Liu Yongxia Female 48 Incumbent Yes
supervisor
Zhang Lihong Deputy GM Male 56 Incumbent 236.33 No
Gao Jiakun Deputy GM Male 54 Incumbent 223.28 No
Li Anjun Deputy GM Male 54 Incumbent 219.13 No
Zhu Xianghong Deputy GM Male 50 Incumbent 412.11 No
Kang Lei Deputy GM Male 46 Incumbent 223.11 No
Deputy GM
Zhu Jiafeng Chief Accountant Male 47 Incumbent 223.19 No
Secretary of the
~ 50 ~Annual Report 2023
Board
Independent
Zhang Guiping Male 73 Former 20.00 No
director
Chairman of
Sun Wanhua Supervisory Male 59 Former Yes
Committee
Lu Duicang Supervisor Male 44 Former 101.46 No
Employee
Zhang Bo Male 59 Former Yes
supervisor
Total -- -- -- -- 2826.52 --
Other notes:
□ Applicable □ Not applicable
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 15th Meeting of the 9th
Board of Directors of Anhui
The 15th Meeting of the 9th
28 April 2023 29 April 2023 Gujing Distillery Company
Board of Directors
Limited (No.: 2023-005)
disclosed on the website of
Cninfo (www.cninfo.com.cn).Announcement on Resolutions
of the 16th Meeting of the 9th
Board of Directors of Anhui
The 16th Meeting of the 9th
6 June 2023 7 June 2023 Gujing Distillery Company
Board of Directors
Limited (No.: 2023-014)
disclosed on the website of
Cninfo (www.cninfo.com.cn).Announcement on Resolutions
of the 1st Meeting of the 10th
Board of Directors of Anhui
The 1st Meeting of the 10th
29 June 2023 30 June 2023 Gujing Distillery Company
Board of Directors
Limited (No.: 2023-021)
disclosed on the website of
Cninfo (www.cninfo.com.cn).The 2nd Meeting of the 10th Announcement on Resolutions
30 August 2023 31 August 2023
Board of Directors of the 2nd Meeting of the 10th
~ 51 ~Annual Report 2023
Board of Directors of Anhui
Gujing Distillery Company
Limited (No.: 2023-026)
disclosed on the website of
Cninfo (www.cninfo.com.cn).Announcement on Resolutions
of the 3rd Meeting of the 10th
Board of Directors of Anhui
The 3rd Meeting of the 10th
27 October 2023 28 October 2023 Gujing Distillery Company
Board of Directors
Limited (No.: 2023-034)
disclosed on the website of
Cninfo (www.cninfo.com.cn).Announcement on Resolutions
of the 4th Meeting of the 10th
Board of Directors of Anhui
The 4th Meeting of the 10th
29 November 2023 30 November 2023 Gujing Distillery Company
Board of Directors
Limited (No.: 2023-036)
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
The director
Total number
Board failed to attend
of board Board Board
Board meetings meetings two General
meetings the meetings meetings the
Director attended by way of attended consecutive meetings
director was attended on director failed
telecommunication through a board attended
eligible to site to attend
proxy meetings
attend
(yes/no)
Liang Jinhui 6 2 4 0 0 No 1
Li Peihui 6 2 4 0 0 No 2
Zhou Qingwu 6 2 4 0 0 No 2
Yan Lijun 6 2 4 0 0 No 2
Xu Peng 6 2 4 0 0 No 2
Ye Changqing 6 2 4 0 0 No 2
Wang Ruihua 6 2 4 0 0 No 2
Xu Zhihao 6 1 5 0 0 No 2
Li Jing 4 1 3 0 0 No 1
Zhang Guiping 2 1 1 0 0 No 1
~ 52 ~Annual Report 2023
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
informat Details
ion about
Number of
Convene Important opinions and about issues
Committee Members meetings Content
d date suggestions raised the with
convened
perform objections
ance of (if any)
duty
The Audit Committee
carried out its work
The 2022 Annual Audit diligently and
Report of the Company conscientiously in strict
Zhang Guiping and the Letter of accordance with the
The Audit
Wang Ruihua 10 Communication with Company Law the
Committee
Xu Zhihao Xu 1 January Management; the regulations of the China
under the
Peng Ye 2023 summary of the 2022 Securities Regulatory
Board
Changqing internal audits and the Commission the Articles of
work plan for the 2023 Association and the Rules
internal audits. of Procedure of the Board
of Directors. It put forward
relevant opinions based on
~ 53 ~Annual Report 2023
the reality of the Company.Upon full communication
and discussion all
proposals were
unanimously approved.The deliberation on the
Company’s 2022 Internal The Audit Committee
Control Self-assessment carried out its work
Report diligently and
the deliberation on the conscientiously in strict
Company’s 2022 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 24 April Report for 2023 and Its Commission the Articles of
Xu Zhihao Xu 1
under the 2023 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
2023 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 2022.The Audit Committee
carried out its work
diligently and
The deliberation on the
conscientiously in strict
Company’s 2023
accordance with the
Semi-annual Report the
Company Law the
deliberation on the
regulations of the China
Company’s Report on the
The Audit Wang Ruihua Securities Regulatory
29 Review of Deposit and
Committee Xu Zhihao Li Commission the Articles of
1 August Use of the Raised Funds
under the Jing Xu Peng Association and the Rules
2023 between January and
Board Ye Changqing of Procedure of the Board
June of 2023 and the
of Directors. It put forward
deliberation on the
relevant opinions based on
Proposal on Changes in
the reality of the Company.Accounting Policies of
Upon full communication
the Company.and discussion all
proposals were
unanimously approved.~ 54 ~Annual Report 2023
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
Quarter Report for 2023
The Audit Wang Ruihua Securities Regulatory
20 and the deliberation on
Committee Xu Zhihao Li Commission the Articles of
1 October the Company’s Report on
under the Jing Xu Peng Association and the Rules
2023 the Review of Deposit
Board Ye Changqing of Procedure of the Board
and Use of the Raised
of Directors. It put forward
Funds of the Third
relevant opinions based on
Quarter of 2023.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 Liang
Proposal on the Securities Regulatory
Nomination JinhuiZhang
6 June Nomination of the Commission the Articles of
Committee Guiping Wang 1
2023 Candidates for Directors Association and the Rules
under the Ruihua Xu
of the Company’s 10th of Procedure of the Board
Board Zhihao Li Peihui
Board of Directors 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
The Liang The deliberation on and Committee carried out its
Nomination JinhuiWang approval of the Proposal work diligently and
29 June
Committee Ruihua Xu 1 on the Appointment of conscientiously in strict
2023
under the Zhihao Li Jing the Company’s Senior accordance with the
Board Zhou Qingwu Management Company Law the
regulations of the China
~ 55 ~Annual Report 2023
Securities Regulatory
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 Remuneration and
Appraisal Committee
carried out its work
diligently and
conscientiously in strict
accordance with the
The deliberation on and Company Law the
The
Zhang Guiping approval of the Proposal regulations of the China
Remuneration
Wang Ruihua on the Results of the Securities Regulatory
and Appraisal 28 April
Xu Zhihao Zhou 1 Remuneration and Commission the Articles of
Committee 2023
Qingwu Yan Appraisal of the Association and the Rules
under the
Lijun Company’s Management of Procedure of the Board
Board
Term for 2022 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 Strategic Investment
Committee carried out its
work diligently and
conscientiously in strict
The deliberation on and
Liang Jinhui accordance with the
approval of the Proposal
The Strategic Zhang Guiping Company Law the
28 April on Cash Entrusted for
Investment Wang Ruihua 1 regulations of the China
2023 Wealth Management
Committee Xu Zhihao Zhou Securities Regulatory
with Idle Self-owned
Qingwu Commission the Articles of
Funds by the Company
Association and the Rules
of Procedure of the Board
of Directors. It put forward
relevant opinions based on
~ 56 ~Annual Report 2023
the reality of the Company.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
6311
the period-end
Number of in-service employees of major subsidiaries at the
6658
period-end
Total number of in-service employees 12969
Total number of paid employees in the Reporting Period 12969
Number of retirees to whom the Company as the parent or its
1643
major subsidiaries need to pay retirement pensions
Functions
Function Employees
Production 6201
Sales 3744
Technical 622
Financial 217
Administrative 1172
Other 1013
Total 12969
Educational backgrounds
Educational background Employees
Master or above 177
Bachelor 3934
Junior college 3307
~ 57 ~Annual Report 2023
High school or below 5551
Total 12969
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) 3470241.11
Total remuneration paid (RMB) 70485265.67
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 2022 Annual General Meeting held on 29 June 2023 reviewed and approved the Company’s Interest Distribution Scheme in
2022 that based on the total shares of 528600000 of the Company on 31 December 2022 cash dividends was distributed at
RMB30.00 per 10 shares (tax inclusive) and the total cash dividends distributed was RMB1585800000.00 (tax inclusive) which
has been carried out completely in July 2023.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
~ 58 ~Annual Report 2023
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) 45.00
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) 2378700000.00
Cash dividends in other ways (such as share
0.00
repurchase) (RMB)
Total cash bonus (including other methods) (RMB) 2378700000.00
Distributable profits (RMB) 10783802188.78
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 RMB45.00 (tax included) per 10 shares based on the total shares of 528600000 at the end of
the year totaling RMB2378700000.00. 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
~ 59 ~Annual Report 2023
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
27 April 2024
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
99.59%
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
~ 60 ~Annual Report 2023
(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
~ 61 ~Annual Report 2023
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 2023.Independent auditor’s report on
Disclosed
internal control disclosed or not
Disclosure date 27 April 2024
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
The Company’s governance overall meets the required standards and there are no significant issues necessitating rectification.~ 62 ~Annual Report 2023
Part V Environmental and Social Responsibility
I Major Environmental Issues
Indicate by tick mark whether the Company or any of its subsidiaries is a heavily polluting business identified by the environmental
protection authorities of China.□ Yes □No
Policies and industry standards pertaining to environmental protection
The Company carries out environmental protection work in strict accordance with the requirements of laws and regulations such as
"Environmental Protection Law of the People's Republic of China" "Air Pollution Prevention and Control Law of the People's
Republic of China" "Water Pollution Prevention and Control Law of the People's Republic of China" "Solid Waste Pollution
Prevention and Control Law of the People's Republic of China" and other laws and regulations and strictly follows the "Management
Measures for the Disclosure of Enterprise Environmental Information According to Law" and "Measures for Self-monitoring and
Information Disclosure of National Key Monitoring Enterprises (Trial)". The Company discloses environmental information in a
timely manner and consciously accepts social supervision. The Company implements the Emission Standards for Air Pollutants from
Boilers (GB13271-2014) Water Pollution Emission Standards for Fermented Alcohol and Baijiu Industry (GB27631-2011) and
Environmental Noise Emission Standards for Industrial Enterprises (GB12348-2008) and other relevant standards.Environmental protection administrative license
No. Administrative matter Serial number Application time Expiry date
Sewage discharge permit for Gujing
1 913400001519400083001V 19 July 2022 18 July 2027
plant
Sewage discharge permit for Zhangji
2 913400001519400083002V 19 July 2022 18 July 2027
plant
Sewage discharge permit for
3 913400001519400083003V 19 July 2022 18 July 2027
Headquarter plant
Sewage discharge permit for
4 913400001519400083004V 17 October 2022 16 October 2027
Intelligent Park plant
Sewage discharge permit for
5 91341600151946047T001U 24 July 2023 23 July 2028
Longrui Glass
Sewage discharge permit for Yellow
6 914201057483467497001R 6 January 2023 5 January 2028
Crane Tower (Wuhan)
Sewage discharge permit for Yellow
7 91421200562735332N001V 25 June 2023 24 June 2028
Crane Tower (Xianning)
Sewage discharge permit for Yellow
8 9142130077756290XJ001V 29 December 2023 22 December 2028
Crane Tower (Suizhou)
Sewage discharge permit for Anhui
9 91341182781098222U001T 26 November 2022 25 November 2027
Mingguang Distillery
The regulations for industrial emissions and the particular requirements for controlling pollutant emissions those are associated with
production and operational activities.Name of Type of Name of Way of Number Distribution Discharge Discharge Total Approved Excessiv
polluter major major discharge of of discharge concentratio standards discharge total e
~ 63 ~Annual Report 2023
pollutant pollutants discharg outlets n implemente discharge discharge
s e outlets d
Gujing
Gujing Gujing
Gujing≦ plant:
Anbui plant plant: 8.58t
19.42mg/L 50mg/L 52.958t/a
Gujing Water Direct Zhangji Zhangji:
COD 3 17.96mg/L Zhangji and Zhangji: Naught
Distillery pollutant discharge plant 3.73t
25.42mg/L Headquarter 26.504t/a
Co. Ltd. Headquarte Headquarter
≦100mg/L Headquarter
r plant : 20.48t
: 116.06t/a
Gujing
Gujing Gujing
Gujing≦ plant:
Anbui plant plant: 0.14t
0.32mg/L 5mg/L 5.2958t/a
Gujing Water Direct Zhangji Zhangji:
NH3-N 3 0.19mg/L Zhangji and Zhangji: Naught
Distillery pollutant discharge plant 0.04t
0.25mg/L Headquarter 2.6504t/a
Co. Ltd. Headquarte Headquarter
≦10mg/L Headquarter
r plant : 0.20t
: 11.61t/a
Gujing
Anbui Gujing Gujing and Gujing
plant:
Gujing Air Organize plant 0.44mg/m3 Headquarter plant: 0.15t
Smoke 2 4.301t/a Naught
Distillery pollutant d Headquarte 0.95mg/m3 ≦10mg/m
3 Headquarter
Headquarter
Co. Ltd. r plant : 0.56t
: 5.01t/a
Gujing
Anbui Gujing Gujing
Gujing and plant:
Gujing Air Organize plant 7.84mg/m3 plant: 2.583t
SO2 2 Headquarter 15.055t/a Naught
Distillery pollutant d Headquarte 0.85mg/m3 Headquarter
≦35mg/m3 Headquarter
Co. Ltd. r plant : 0.497t
: 17.536t/a
Gujing
Gujing Gujing
Gujing and plant:
Anbui plant plant: 6.616t
20.07mg/m3 Headquarter 21.056t/a
Gujing Air Nitrogen Organize Zhangji Zhangji:
3 34.01mg/m3 ≦50mg/m3 Zhangji: Naught
Distillery pollutant oxide d plant 1.055t
24.37mg/m3 Zhangji≦ 10.318t/a
Co. Ltd. Headquarte Headquarter
150mg/ m3 Headquarter
r plant : 14.379t
: 25.051t/a
Anhui 1#furnace：
Longrui Air Organize 1#furnace 3.31mg/m3 0.59t
Smoke 2 ≦10mg/m3 / Naught
Glass Co. pollutant d 2#furnace 1.93mg/m3 2#furnace：
Ltd 0.66t
Anhui 1#furnace：
Longrui Air Organize 1#furnace 5.40mg/m3 1.21t
SO2 2 ≦50mg/m3 / Naught
Glass Co. pollutant d 2#furnace 19.26mg/m3 2#furnace：
Ltd 6.70t
~ 64 ~Annual Report 2023
Anhui 1#furnace：
Longrui Air Nitrogen Organize 1#furnace 77.48mg/m3 13.79t
2 ≦200mg/m3 / Naught
Glass Co. pollutant oxide d 2#furnace 75.98mg/m3 2#furnace：
Ltd 27.51t
Yellow
Crane
Wuhan
Tower Water Indirect
COD 1 plant 14.626mg/L ≦400mg/L 0.957t 11.07t/a Naught
Distillery pollutant discharge
DW001
(Wuhan)
Co. Ltd.Yellow
Crane
Wuhan
Tower Water Indirect
NH3-N 1 plant 0.963mg/L ≦30mg/L 0.063t 4.05t/a Naught
Distillery pollutant discharge
DW001
(Wuhan)
Co. Ltd.Yellow
Crane
Wuhan
Tower Air Organize
SO2 1 plant ND ≦50mg/m3 0.1t / Naught
Distillery pollutant d
DA004
(Wuhan)
Co. Ltd.Yellow
Crane Wuhan
Air Nitrogen Organize
Tower 1 plant 69mg/m3 ≦150mg/m3 0.349t / Naught
pollutant oxide d
Distillery DA004
Co. Ltd.Yellow
Crane
Tower Water Indirect Xianning
COD 1 16.354mg/L ≦400 mg/L 0.137t 6 t/a Naught
Distillery pollutant discharge plant
(Xianning)
Co. Ltd.Yellow
Crane
Ammoni
Tower Water Indirect Xianning
a 1 0.385mg/L ≦30mg/L 0.007t 1 t/a Naught
Distillery pollutant discharge plant
nitrogen
(Xianning)
Co. Ltd.Yellow Xianning
Air Organize
Crane SO2 1 plant ND ≦50mg/m3 / / Naught
pollutant d
Tower DA003
~ 65 ~Annual Report 2023
Distillery
(Xianning)
Co. Ltd.Yellow
Crane
Xianning
Tower Air Nitrogen Organize
1 plant 81mg/m3 ≦150mg/m3 0.722 t / Naught
Distillery pollutant oxide d
DA003
(Xianning)
Co. Ltd.Yellow
Crane
Tower Water Indirect Suizhou
COD 1 24mg/L ≦300mg/L 0.502t 17.83t/a Naught
Distillery pollutant discharge plant
(Suizhou)
Co. Ltd.Yellow
Crane
Tower Water Indirect Suizhou
NH3-N 1 0.821mg/L ≦25mg/L 0.018t 1.783t/a Naught
Distillery pollutant discharge plant
(Suizhou)
Co. Ltd.Yellow
Crane
Tower Air Organize Suizhou
SO2 1 ND ≦50mg/m3 0.068t 0.634t/a Naught
Distillery pollutant d plant
(Suizhou)
Co. Ltd.Yellow
Crane
Tower Air Nitrogen Organize Suizhou
1 9mg/m3 ≦200mg/m3 2.269t 2.966t/a Naught
Distillery pollutant oxide d plant
(Suizhou)
Co. Ltd.Anhui
Mingguan Air Nitrogen Organize 10t boiler
1 24.7mg/m3 ≦50mg/m3 0.50t 2.128t/a Naught
g Distillery pollutant oxide d furnace
Co. Ltd.Anhui
Outlet
Mingguan Water Indirect
COD 1 outside the 44.8mg/L ≦400mg/L 1.947t 11.107t/a Naught
g Distillery pollutant discharge
plant
Co. Ltd.Anhui Water Ammoni Indirect 1 Outlet 2.00mg/L ≦30mg/L 0.088t 0.18t/a Naught
~ 66 ~Annual Report 2023
Mingguan pollutant a discharge outside the
g Distillery nitrogen plant
Co. Ltd.Treatment of pollutants
In 2023 Anhui Gujing Distillery Co. Ltd. and its subsidiaries maintained normal operations of their waste management facilities
effectively achieving standard emissions for major pollutants. The Company was transparent with its environmental information and
successfully fulfilled its social responsibilities. Details are as follows:
1. Construction and operational status of the sewage treatment facilities of the listed company and its subsidiaries
(1) The Gujing plant of Anhui Gujing Distillery Co. Ltd. employed a sewage treatment process comprising "IC anaerobic + A2/O
aerobic + in-depth treatment" techniques. The facility was designed with a capacity to treat 5000 tonnes per day. The treated sewage
met the direct discharge requirements set by the GB27631-2011 Discharge Standard of Water Pollutants for Fermentation Alcohol
Anddistilled Spirits Industry and the facility operated normally discharging a total of 441574 tonnes of treated sewage annually.
(2) The Zhangji plant of Anhui Gujing Distillery Co. Ltd. employed a sewage treatment process comprising "IC anaerobic + A2/O
aerobic + in-depth treatment" techniques. The facility was designed with a capacity to treat 1500 tonnes per day. The treated sewage
met the direct discharge requirements set by the GB27631-2011 Discharge Standard of Water Pollutants for Fermentation Alcohol
Anddistilled Spirits Industry and the facility operated normally discharging a total of 150317 tonnes of treated sewage annually.
(3) The headquarters plant of Anhui Gujing Distillery Co. Ltd. employed a sewage treatment process comprising "IC anaerobic +
A2/O aerobic + in-depth treatment" techniques. The facility was designed with a capacity to treat 8000 tonnes per day. The treated
sewage met the direct discharge requirements set by the GB27631-2011 Discharge Standard of Water Pollutants for Fermentation
Alcohol Anddistilled Spirits Industry and the facility operated normally discharging a total of 805755 tonnes of treated sewage
annually.
(4) The production and living sewage of Anhui Longrui Glass Co. Ltd is discharged indirectly 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 and is
under normal operation.
(5) The sewage treatment station of Wuhan plant of Yellow Crane Tower Distillery employed a sewage treatment process comprising
"anaerobic + aerobic treatment" techniques. The facility was designed with a capacity to treat 250 tonnes per day. The treated sewage
met the direct discharge requirements set by the GB27631-2011 Discharge Standard of Water Pollutants for Fermentation Alcohol
and Distilled Spirits Industry and the facility operated normally discharging a total of 65450 tonnes of treated sewage annually.
(6) The sewage treatment station of plant of Yellow Crane Tower Distillery (Xianning) employed a sewage treatment process
comprising "UASB anaerobic + A2/O2" techniques. The facility was designed with a capacity to treat 100 tonnes per day. The treated
sewage met the direct discharge requirements set by the GB27631-2011 Discharge Standard of Water Pollutants for Fermentation
Alcohol and Distilled Spirits Industry and the facility operated normally discharging a total of 17227 tonnes of treated sewage
annually.
(7) The sewage treatment station of the plant of Yellow Crane Tower Distillery (Suizhou) employed a sewage treatment process
comprising "IC anaerobic + A2/O + in-depth treatment" techniques. The facility was designed with a capacity to treat 100 tonnes per
day. The treated sewage met the direct discharge requirements set by the GB27631-2011 Discharge Standard of Water Pollutants for
Fermentation Alcohol and Distilled Spirits Industry and the facility operated normally discharging a total of 36873 tonnes of treated
sewage annually.
(8) The sewage treatment station of Anhui Mingguang Distillery Co. Ltd. employed a sewage treatment process comprising "UASB
anaerobic + facultative pond + contact oxidation pond" techniques. The facility was designed with a capacity to treat 500 tonnes per
day. The treated sewage met the direct discharge requirements set by the GB27631-2011 Discharge Standard of Water Pollutants for
Fermentation Alcohol and Distilled Spirits Industry and the facility operated normally discharging a total of 43741 tonnes of treated
sewage annually.
2. Construction and operational status of the waste gas treatment facilities of the listed company and its subsidiaries
~ 67 ~Annual Report 2023
(1) The Gujing plant of Anhui Gujing Distillery Co. Ltd. operated two 35t/h coal-fired boilers at its power station. The flue gas
treatment facilities designed with a capacity of 100000 Nm3/h employed a combination of "baghouse dust removal
limestone-gypsum wet desulphurisation SNCR non-catalytic reduction SCR catalytic reduction and wet electrostatic precipitation"
processes. These facilities treated approximately 329.5946 million Nm3 of flue gases annually adhering to ultra-low emission
standards.
(2) The power station of Zhangji plant of Anhui Gujing Distillery Co. Ltd. operated a 25t/h gas boiler. Its flue gas treatment facilities
designed to handle 25000 Nm3/h used "low NOx combustion" technology. Over the course of the year these facilities treated
approximately 31.02 million Nm3 of flue gases ensuring compliance with the GB13271-2014 Emission Standards of Air Pollutants
for Coal-burning Boiler for gas boilers.
(3) The headquarters plant of Anhui Gujing Distillery Co. Ltd. operated two 35t/h coal-fired boilers at its power station. The flue gas
treatment facilities designed with a capacity of 20000 Nm3/h employed a combination of "baghouse dust removal
limestone-gypsum wet desulphurisation SNCR non-catalytic reduction SCR catalytic reduction and wet electrostatic precipitation"
processes. These facilities treated approximately 589.0115 million Nm3 of flue gases annually adhering to ultra-low emission
standards.
(4) Anhui Longrui Glass Co. Ltd. operated two glass kilns with flue gas treatment facilities capable of handling 100000 Nm3/h. The
process will include "baghouse dust removal dry desulphurisation and SCR catalytic reduction." It is expected that these facilities
will treat approximately 825.7368 million Nm3 of flue gases annually meeting the A-level enterprise emission requirements under
the Technical Guide for Emergency Emission Reduction Measures in Key Industries during Heavy Pollution Weather for the glass
industry.
(5) The Wuhan plant of Yellow Crane Tower Distillery operated five 1t/h natural gas steam heat sources with flue gas treatment
facilities designed to manage 18000 Nm3/h using "low NOx combustion" techniques. These facilities treated approximately 5.39637
million Nm3 of flue gases annually ensuring compliance with the special emission limits for air pollutants from gas boilers as
specified in GB13271-2014 Emission Standards of Air Pollutants for Coal-burning Boiler.
(6) The plant of Yellow Crane Tower Distillery (Xianning) operated one 3t/h and one 4t/h gas boiler with flue gas treatment facilities
designed to process 13000 Nm3/h using "low NOx combustion" techniques. These facilities treated approximately 18.2058 million
Nm3 of flue gases annually adhering to the GB13271-2014 Emission Standards of Air Pollutants for Coal-burning Boiler for gas
boilers.
(7) The plant of Yellow Crane Tower Distillery (Suizhou) operated one 15t/h and one 25t/h gas boiler with flue gas treatment
facilities designed to process 35000 Nm3/h using "low NOx combustion" techniques. These facilities treated approximately 45.3868
million Nm3 of flue gases annually adhering to the GB13271-2014 Emission Standards of Air Pollutants for Coal-burning Boiler for
gas boilers.
(8) Anhui Mingguang Distillery Co. Ltd. operated one 10t/h gas boiler with flue gas treatment facilities designed to process 11000
Nm3/h using "low NOx combustion" techniques. These facilities treated approximately 22.24 million Nm3 of flue gases annually
adhering to the GB13271-2014 Emission Standards of Air Pollutants for Coal-burning Boiler for gas boilers.Emergency plan for sudden environment affairs
1. Anhui Gujing Distillery Co. Ltd. has formulated the Emergency Plan of Anhui Gujing Distillery Company Limited for Sudden
Environmental Pollution Accidents (File No. 341602-2021-006-H) which has been filed with Bureau of Ecology and Environment of
Bozhou. Emergency plan drills have been carried out as planned.
2. 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. 341602-2023-027-M).Emergency plan drills have been carried out as planned.
3. The Wuhan plant of Yellow Crane Tower Distillery has formulated the Emergency Plan of Yellow Crane Tower Distillery Co. Ltd
for Sudden Environmental Issues which has been filed with the Hanyang District branch of the Wuhan Municipal Ecology and
~ 68 ~Annual Report 2023
Environment Bureau (File No. 420105-2021-005-L). Emergency plan drills have been carried out as required.
4. The plant of Yellow Crane Tower Distillery (Xianning) has formulated the Emergency Plan of Yellow Crane Tower Distillery
(Xianning) Co. Ltd for Sudden Environmental Issues which has been filed with the Xianning High-tech District branch of the
Xianning Municipal Environmental Protection Bureau (File No. 421201-2021-014-H). Emergency plan drills have been carried out
as required.
5. The plant of Yellow Crane Tower Distillery (Suizhou) has signed a service contract (Contract No. SZ-HB-202208-0040) with a
third-party technical unit regarding the emergency plan for sudden environmental issues. The plan has passed expert review and is
currently under re-examination by the local Bureau of Ecology and Environment.
6. Anhui Mingguang Distillery Co. Ltd. has formulated the Emergency Plan of Anhui Mingguang Distillery Co. Ltd. for Sudden
Environmental Issues which has been filed with the Mingguang Municipal Ecology and Environment Sub-Bureau (File No.
341182-2021-031-M). Emergency plan drills have been carried out as required.
Environmental self-monitoring scheme
The Company and its subsidiaries have formulated their Environmental Self-Monitoring Schemes and published them on the local
websites for self-monitoring information disclosure.Input in environment governance and protection and payment of environmental protection tax
In 2023 the total investment in environmental governance and protection by the Company and its subsidiaries amounted to
RMB32849000 with environmental taxes paid totalling RMB156900.Measures taken to decrease carbon emission in the Reporting Period and corresponding effects
□ Applicable □ Not applicable
1. Equilibrated production at thermal power station boilers: To enhance boiler operational efficiency and reduce carbon emissions
equilibrated production was implemented at the headquarters' plant in 2023. This initiative improved boiler thermal efficiency by
15.7% and is projected to reduce carbon dioxide emissions by approximately 10000 tonnes annually.
2. Intensified power conservation of the Company:
(1) 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.
(2) 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
~ 69 ~Annual Report 2023
II Social Responsibility
For details please refer to the Corporate Environmental Social and Governance (ESG) Report for 2023 disclosed by the Company
on the website Cninfo dated 27 April 2024.III Consolidation and Expansion of Poverty Alleviation Outcomes and Rural Revitalization
For details please refer to the Corporate Environmental Social and Governance (ESG) Report for 2023 disclosed by the Company
on the website Cninfo dated 27 April 2024.~ 70 ~Annual Report 2023
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
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
Content and reason for changes to
Approval procedure Remark
accounting policies
On 30 November 2022 the Ministry of Reviewed and approved by the 2nd Meeting For details see the Announcement on
Finance ("MOF") issued Accounting of the 10th Board of Directors and the 2nd Changes to Accounting Policies of the
Standard for Business Enterprises Meeting of the 10th Supervisory Company disclosed by the Company on 30
~ 71 ~Annual Report 2023
Interpretation No. 16 (C.K. [2022] No. 31) Committee of the Company. August 2023 on the website of Cninfo
("Interpretation No. 16") in which (http://www.cninfo.com.cn).“Accounting treatment for deferred incometax relating to assets and liabilities arising
from a single transaction that is not subjectto the initial recognition exemption” cameinto force on 1 January 2023 “Accountingmethod of the income tax effects of
dividends on financial instruments
classified as equity instruments by the
issuer" and "Accounting method of the
revision of share-based payment settled in
cash to share-based payment settled in
equity by an enterprise" came into force on
the date of publication.VII YoY Changes to the Scope of the Consolidated Financial Statements
□ Applicable □ Not applicable
In this period the Company has expanded the scope of its consolidation compared to the previous period by adding new subsidiaries:
Wuhan Gulou Junhe Trading Co. Ltd. Wuhan Gulou Juntai Trading Co. Ltd. Xiaogan Gulou Tiancheng Trading Co. Ltd. Guizhou
Treasure Liquor Sales Co. Ltd. and Anhui Guqi Liquor Co. Ltd. Meanwhile Anhui Anjie Technology Co. Ltd. has been
deregistered.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
5
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 3 years for Zhang Liping and Han Songliang 2 years 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
~ 72 ~Annual Report 2023
In 2023 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
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
~ 73 ~Annual Report 2023
6. Transactions with Related Parties by Finance Companies Controlled by the Company
□Applicable □ Not applicable
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
Self-owned funds 175000.00 70000.00 0.00 0.00
products
Others Self-owned funds 20000.00 0.00 0.00 0.00
Total 195000.00 70000.00 0.00 0.00
~ 74 ~Annual Report 2023
High-risk wealth management transactions with a significant single amount low security or low liquidity:
□ Applicable □ Not applicable
Situation where the principal is expectedly irrecoverable or an impairment may be incurred:
□ Applicable □ Not applicable
(2) Entrusted Loans
□Applicable □ Not applicable
4. Other Major Contracts
□Applicable □ Not applicable
XVI Other Significant Events
□Applicable □ Not applicable
XVII Significant Events of Subsidiaries
□Applicable □ Not applicable
~ 75 ~Annual Report 2023
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
Percentage New dividend dividend Percentage
Shares Other Subtotal Shares
(%) issues converted converted (%)
from from
profit capital
I. Restricted shares
reserves
1. Shares held by the state
2. Shares held by
state-owned corporations
3. Shares held by other
domestic investors
Among which: Shares held
by domestic corporations
Shares
held by domestic
individuals
4. Shares held by foreign
investors
Among which: Shares held
by foreign corporations
Shares
held by foreign individuals
II. Non-restricted shares 528600000 100.00% 528600000 100.00%
1. RMB ordinary shares 408600000 77.30% 408600000 77.30%
2. Domestically listed
12000000022.70%12000000022.70%
foreign shares
3. Overseas listed foreign
shares
4. Other
~ 76 ~Annual Report 2023
III. Total shares 528600000 100.00% 528600000 100.00%
Reasons for share changes:
□ Applicable □ Not applicable
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
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
ordinary preferred
preferred
Number of shareholders at shareholders
shareholders with
ordinary 30893 the month-end 28209 0 with resumed 0
resumed voting
shareholders prior to the voting rights at
rights (if any) (see
disclosure of this the month-end
note 8)
Report prior to the
~ 77 ~Annual Report 2023
disclosure of this
Report (if any)
(see note 8)
5% or greater shareholders or top 10 shareholders
Increase/d Shares in pledge marked or
Restri
Shareholdi Total shares ecrease in frozen
Name of Nature of cted Non-restricte
ng held at the the
shareholder shareholder shares d shares held
percentage period-end Reporting Status Shares
held
Period
ANHUI GUJING
GROUP State-owned
51.34% 271362722 661300 271362722 I n pledge 30000000
COMPANY legal person
LIMITED
BANK OF
CHINA-CHINA
MERCHANTS
CHINA
SECURITIES
Other 2.42% 12814455 1025247 12814455 N /A
BAIJIU INDEX
CLASSIFICATIO
N SECURITIES
INVESTMENT
FUND
INDUSTRIAL
AND
COMMERCIAL
BANK OF CHINA
LIMITED-
INVESCO GREAT
WALL Other 1.89% 9999951 9999951 N /A
EMERGING
GROWTH
HYBRID
SECURITIES
INVESTMENT
FUND
CHINA
INTERNATIONA
L CAPITAL Foreign legal
1.65% 8706529 1350221 8706529 N /A
CORPORATION person
HONG KONG
SECURITIES LTD
~ 78 ~Annual Report 2023
AGRICULTURAL
BANK OF CHINA
－ E FUND
CONSUMPTION
Other 1.60% 8476808 - 1512474 8476808 N /A
SECTOR STOCK
SECURITIES
INVESTMENT
FUND
HONG KONG
SECURITIES Foreign legal
1.33% 7036372 -102547 7036372 N /A
CLEARING person
COMPANY LTD.UBS (LUX)
EQUITY FUND -
Foreign legal
CHINA 1.30% 6896661 6896661 N /A
person
OPPORTUNITY
(USD)
GREENWOODS
Foreign legal
CHINA ALPHA 1.14% 6049760 1435434 6049760 N /A
person
MASTER FUND
BANK OF
CHINA-
INVESCO GREAT
WALL DINGYI
Other 0.93% 4900000 -117603 4900000 N /A
HYBRID
SECURITIES
INVESTMENT
FUND (LOF)
GAOLING Foreign legal
0.88% 4674170 - 6010052 4674170 N /A
FUNDL.P. person
Strategic investor or general legal
person becoming a top-10 ordinary
N/A
shareholder due to rights issue (if
any) (see note 3)
Among the shareholders above the Company’s controlling shareholder—Anhui Gujing Group
Company Limited—is not a related party of other shareholders; nor are they parties acting in
concert as defined in the Administrative Measures on Information Disclosure of Changes in
Related or acting-in-concert parties
Shareholding of Listed Companies. As for the other shareholders the Company does not know
among the shareholders above
whether they are related parties or whether they belong to parties acting in concert as defined
in the Administrative Measures on Information Disclosure of Changes in Shareholding of
Listed Companies.~ 79 ~Annual Report 2023
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
271362722271362722
COMPANY LIMITED d ordinary share
BANK OF CHINA-CHINA
MERCHANTS CHINA
RMB-denominate
SECURITIES BAIJIU INDEX 12814455 12814455
d ordinary share
CLASSIFICATION SECURITIES
INVESTMENT FUND
INDUSTRIAL AND
COMMERCIAL BANK OF
CHINA LIMITED- INVESCO RMB-denominate
99999519999951
GREAT WALL EMERGING d ordinary share
GROWTH HYBRID SECURITIES
INVESTMENT FUND
CHINA INTERNATIONAL Domestically
CAPITAL CORPORATION 8706529 l isted foreign 8706529
HONG KONG SECURITIES LTD share
AGRICULTURAL BANK OF
CHINA － E FUND
RMB-denominate
CONSUMPTION SECTOR 8476808 8476808
d ordinary share
STOCK SECURITIES
INVESTMENT FUND
HONG KONG SECURITIES RMB-denominate
70363727036372
CLEARING COMPANY LTD. d ordinary share
Domestically
UBS (LUX) EQUITY FUND -
6896661 l isted foreign 6896661
CHINA OPPORTUNITY (USD)
share
Domestically
GREENWOODS CHINA ALPHA
6049760 l isted foreign 6049760
MASTER FUND
share
~ 80 ~Annual Report 2023
BANK OF CHINA- INVESCO
GREAT WALL DINGYI HYBRID RMB-denominate
49000004900000
SECURITIES INVESTMENT d ordinary share
FUND (LOF)（LOF）
Domestically
GAOLING FUNDL.P. 4674170 l isted foreign 4674170
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 2023 41300 lent
trading (if any) (see note 4) shares were outstanding with no transfer of the ownership of these shares.Top 10 shareholders involved in refinancing shares lending
□ Applicable □ Not applicable
Unit: share
Top 10 shareholders involved in refinancing shares lending
Shares in the common Shares lent in Shares lent in
Shares in the common
account and credit refinancing and not yet refinancing and not yet
account and credit
account at the returned at the returned at the
Full name of account at the period-end period-begin period-begin period-end
shareholder
As % of As % of As % of As % of
Total Total
Total shares total share total share Total shares total share total share
shares shares
capital capital capital capital
ANHUI GUJING
GROUP
27070142251.21%7026000.1329%27136272251.34%413000.0078%
COMPANY
LIMITED
BANK OF
CHINA-CHINA
MERCHANTS
CHINA
SECURITIES 11789208 2.23% 0 0.0000% 12814455 2.42% 43000 0.0081%
BAIJIU INDEX
CLASSIFICATION
SECURITIES
INVESTMENT
~ 81 ~Annual Report 2023
FUND
Changes in top 10 shareholders compared with the prior period
□ Applicable □ Not applicable
Unit: share
Changes in top 10 shareholders compared with the end of the prior period
Newly added to or Shares in the common account and credit Shares lent in refinancing and not yet
exiting from top account plus shares lent in refinancing
Full name of returned at the period-end
10 shareholders in and not yet returned at the period-end
shareholder
the Reporting As % of total share As % of total share
Period Total shares Total shares capital capital
ANHUI GUJING
GROUP
Exiting 41300 0.0078% 271404022 51.34%
COMPANY
LIMITED
BANK OF
CHINA-CHINA
MERCHANTS
CHINA
SECURITIES
Newly added 43000 0.0081% 12857455 2.43%
BAIJIU INDEX
CLASSIFICATIO
N SECURITIES
INVESTMENT
FUND
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 2023 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
~ 82 ~Annual Report 2023
companies at home or abroad shares of 2.77%.in the Reporting Period
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:
~ 83 ~Annual Report 2023
Indicate by tick mark whether the actual controller controls the Company via trust or other ways of asset management.□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
~ 84 ~Annual Report 2023
Part VIII Preference Shares
□ Applicable □ Not applicable
No preference shares in the Reporting Period.~ 85 ~Annual Report 2023
Part IX Corporate Bonds
□ Applicable □ Not applicable
~ 86 ~Annual Report 2023
Part X Financial Statements
I Independent Auditor’s Report
Type of auditor’s opinion Unmodified unqualified opinion
Date of signing the auditor’s report 26 April 2024
Name of the auditor RSM China
No. of the auditor’s report Rongcheng audit character [2024] 518Z0272
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 2023 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 2023 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. Operating Revenue and Cost of Sales ".In 2023 the Company achieved baijiu sales revenue of RMB19.639 billion accounting for 96.97% of operating revenue. Since
Baijiu 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 baijiu sales revenue recognition as a key audit
~ 87 ~Annual Report 2023
matter.
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) Additionally discussions were held with the management and samples of sales contracts were reviewed to identify clauses and
conditions related to the transfer of control over goods. This process is essential for evaluating whether the timing of revenue
recognition complies with corporate accounting standards;
(3) Sampling inspection of supporting documents related to baijiu sales revenue recognition including sales orders sales invoices
outbound orders sales outstanding 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 sales outstanding 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. The
inventory balance accounts for 21.23% of the Company's total assets and most of the inventory is semi-finished products and work
in progress products. 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 2023 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.~ 88 ~Annual Report 2023
In connection with our audit of the financial statements our responsibility is to read the other information and in doing so consider
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
~ 89 ~Annual Report 2023
significant audit findings including any significant deficiencies in internal control that we identify during our audit.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
26 April 2024
~ 90 ~Annual Report 2023
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 2023
Unit: RMB
Item 31 December 2023 1 January 2023
Current assets:
Monetary assets 15966371744.19 13772561141.30
Settlement reserve
Interbank loans granted
Held-for-trading financial assets 719987547.42 1782687769.66
Derivative financial assets
Notes receivable
Accounts receivable 68607919.27 62688668.94
Accounts receivable financing 957560115.73 217419441.32
Prepayments 91607342.18 233995661.69
Premiums receivable
Reinsurance receivables
Receivable reinsurance contract
reserve
Other receivables 49178194.70 73337415.74
Including: Interest receivable
Dividends receivable
Financial assets purchased under
resale agreements
Inventories 7519682536.51 6058106090.88
Contract assets 0.00 1855188.15
Assets held for sale
Current portion of non-current assets
Other current assets 135071255.36 125568725.51
Total current assets 25508066655.36 22328220103.19
Non-current assets:
Loans and advances to customers
Investments in debt obligations
Investments in other debt obligations
Long-term receivables
Long-term equity investments 10367078.26 10154235.98
~ 91 ~Annual Report 2023
Investments in other equity
63105658.0756447789.94
instruments
Other non-current financial assets
Investment property 46622910.19 13396881.96
Fixed assets 4596044056.92 2741844586.30
Construction in progress 2910735155.39 2454703251.44
Productive living assets
Oil and gas assets
Right-of-use assets 81038100.24 32562171.10
Intangible assets 1123186836.65 1108125157.05
Development costs
Goodwill 561364385.01 561364385.01
Long-term prepaid expense 59102583.98 51012977.31
Deferred income tax assets 455588567.46 425120227.37
Other non-current assets 5685287.46 6870532.00
Total non-current assets 9912840619.63 7461602195.46
Total assets 35420907274.99 29789822298.65
Current liabilities:
Short-term borrowings 0.00 83232176.31
Borrowings from the central bank
Interbank loans obtained
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable 1353187723.44 695740000.00
Accounts payable 2814192071.24 2054063559.15
Advances from customers
Contract liabilities 1401122249.53 826636478.35
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 1180605773.29 795138305.63
Taxes payable 1179368855.69 1205028130.02
Other payables 3267292222.01 3261763838.80
Including: Interest payable
Dividends payable
Handling charges and commissions
payable
~ 92 ~Annual Report 2023
Reinsurance payables
Liabilities directly associated with
assets held for sale
Current portion of non-current
80825022.5142237345.11
liabilities
Other current liabilities 1132018451.10 1044664441.58
Total current liabilities 12408612368.81 10008504274.95
Non-current liabilities:
Insurance contract reserve
Long-term borrowings 107106256.94 44944737.91
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities 68380767.78 18631395.93
Long-term payables
Long-term employee benefits payable
Provisions
Deferred income 100811404.82 103714978.95
Deferred income tax liabilities 321723514.56 281173154.70
Other non-current liabilities
Total non-current liabilities 598021944.10 448464267.49
Total liabilities 13006634312.91 10456968542.44
Owners’ equity:
Share capital 528600000.00 528600000.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 6224747667.10 6224747667.10
Less: Treasury stock
Other comprehensive income 1596322.73 408739.61
Specific reserve
Surplus reserves 269402260.27 269402260.27
General reserve
Retained earnings 14500963359.34 11497599306.54
Total equity attributable to owners of the
21525309609.4418520757973.52
Company as the parent
Non-controlling interests 888963352.64 812095782.69
Total owners’ equity 22414272962.08 19332853756.21
Total liabilities and owners’ equity 35420907274.99 29789822298.65
Legal representative: Liang Jinhui The Company’s chief accountant: Zhu Jiafeng
Head of the Company’s financial department: Zhu Jiafeng
~ 93 ~Annual Report 2023
2. Balance Sheet of the Company as the Parent
Unit: RMB
Item 31 December 2023 1 January 2023
Current assets:
Monetary assets 7430906530.24 7338284192.52
Held-for-trading financial assets 719987547.42 1267195966.38
Derivative financial assets
Notes receivable 44669454.15 0.00
Accounts receivable
Accounts receivable financing 353179776.80 233465242.96
Prepayments 64184453.89 39599180.34
Other receivables 384878020.29 202279154.63
Including: Interest receivable
Dividends receivable
Inventories 5791297076.99 4670562760.80
Contract assets
Assets held for sale
Current portion of non-current assets
Other current assets 70067944.53 63929024.28
Total current assets 14859170804.31 13815315521.91
Non-current assets:
Investments in debt obligations
Investments in other debt obligations
Long-term receivables
Long-term equity investments 1602935444.04 1586749613.68
Investments in other equity
instruments
Other non-current financial assets
Investment property 46622910.19 13396881.96
Fixed assets 3457239038.00 1715114776.31
Construction in progress 2081093829.00 1597185086.35
Productive living assets
Oil and gas assets
Right-of-use assets 81038100.24 31004490.39
Intangible assets 494450059.46 483601950.48
Development costs
Goodwill
Long-term prepaid expense 22664614.49 22817228.71
Deferred income tax assets 31803704.33 28512224.61
~ 94 ~Annual Report 2023
Other non-current assets
Total non-current assets 7817847699.75 5478382252.49
Total assets 22677018504.06 19293697774.40
Current liabilities:
Short-term borrowings
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable
Accounts payable 1658351501.91 950887301.03
Advances from customers
Contract liabilities 858057014.88 3432162.83
Employee benefits payable 477940588.68 276482563.00
Taxes payable 730264020.00 548241724.13
Other payables 879518254.66 726494649.90
Including: Interest payable
Dividends payable
Liabilities directly associated with
assets held for sale
Current portion of non-current
10771925.2910574121.12
liabilities
Other current liabilities 134926323.61 16403036.11
Total current liabilities 4749829629.03 2532515558.12
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities 68380767.78 18631395.93
Long-term payables
Long-term employee benefits payable
Provisions
Deferred income 35650375.64 38926909.02
Deferred income tax liabilities 71944672.72 43726162.12
Other non-current liabilities
Total non-current liabilities 175975816.14 101284467.07
Total liabilities 4925805445.17 2633800025.19
Owners’ equity:
Share capital 528600000.00 528600000.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
~ 95 ~Annual Report 2023
Capital reserves 6176504182.20 6176504182.20
Less: Treasury stock
Other comprehensive income -1993312.09 -529354.77
Specific reserve
Surplus reserves 264300000.00 264300000.00
Retained earnings 10783802188.78 9691022921.78
Total owners’ equity 17751213058.89 16659897749.21
Total liabilities and owners’ equity 22677018504.06 19293697774.40
3. Consolidated Income Statement
Unit: RMB
Item 2023 2022
1. Revenue 20253526598.02 16713234153.52
Including: Operating revenue 20253526598.02 16713234153.52
Interest revenue
Insurance premium income
Handling charge and
commission income
2. Costs and expenses 14002575265.55 12315714961.34
Including: Cost of sales 4239850906.91 3816322045.01
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 3050101661.89 2824059322.03
Selling expense 5436773057.25 4668185055.13
Administrative expense 1367146467.89 1166780389.23
R&D expense 70947196.49 56667203.01
Finance costs -162244024.88 -216299053.07
Including: Interest costs 3289772.96 5679645.21
Interest
169297052.44221450532.78
revenue
Add: Other income 48053328.37 46721259.52
Return on investment (“-” for loss) -6338129.69 -10804384.45
~ 96 ~Annual Report 2023
Including: Share of profit or loss
212842.28941635.20
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 (“-”
19987547.4229149125.30
for loss)
Credit impairment loss (“-” for
891610.40403221.49
loss)
Asset impairment loss (“-” for
-31053196.87-11144233.30
loss)
Asset disposal income (“-” for
437622.67886286.45
loss)
3. Operating profit (“-” for loss) 6282930114.77 4452730467.19
Add: Non-operating income 85066844.12 50767945.38
Less: Non-operating expense 35851126.34 33006363.84
4. Profit before tax (“-” for loss) 6332145832.55 4470492048.73
Less: Income tax expense 1605876011.66 1218657884.24
5. Net profit (“-” for net loss) 4726269820.89 3251834164.49
5.1 By operating continuity
5.1.1 Net profit from continuing
4726269820.893251834164.49
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 4589164052.80 3143144732.08
parent
5.2.1 Net profit attributable to
137105768.09108689432.41
non-controlling interests
6. Other comprehensive income net of
3060072.183878826.81
tax
Attributable to owners of the
1187583.123143797.80
Company as the parent
6.1 Items that will not be
2996040.66857417.15
reclassified to profit or loss
6.1.1 Changes caused by
remeasurements on defined benefit
schemes
~ 97 ~Annual Report 2023
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
2996040.66857417.15
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
-1808457.542286380.65
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 -1808457.54 2286380.65
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
1872489.06735029.01
interests
7. Total comprehensive income 4729329893.07 3255712991.30
Attributable to owners of the
4590351635.923146288529.88
Company as the parent
Attributable to non-controlling
138978257.15109424461.42
interests
8. Earnings per share
8.1 Basic earnings per share 8.68 5.95
8.2 Diluted earnings per share 8.68 5.95
Legal representative: Liang Jinhui The Company’s chief accountant: Zhu Jiafeng
Head of the Company’s financial department: Zhu Jiafeng
~ 98 ~Annual Report 2023
4. Income Statement of the Company as the Parent
Unit: RMB
Item 2023 2022
1. Operating revenue 10625037756.73 8436854425.33
Less: Cost of sales 3708083747.47 3150072247.44
Taxes and surcharges 2575219279.98 2427479945.90
Selling expense 48250729.30 214565182.08
Administrative expense 940282659.56 828752411.76
R&D expense 29954006.67 24437179.22
Finance costs -110266407.56 -146277487.29
Including: Interest expense 1700517.02 1571025.57
Interest revenue 114742716.55 147476627.30
Add: Other income 8532622.97 9829030.03
Return on investment (“-” for loss) 143470881.11 516451555.38
Including: Share of profit or loss
185830.36769710.25
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 (“-”
19987547.4213657322.02
for loss)
Credit impairment loss (“-” for
165875.85-259373.20
loss)
Asset impairment loss (“-” for
-25391138.49-9004878.11
loss)
Asset disposal income (“-” for
232884.34448814.15
loss)
2. Operating profit (“-” for loss) 3580512414.51 2468947416.49
Add: Non-operating income 34681066.94 32757400.28
Less: Non-operating expense 27568586.35 22709736.17
3. Profit before tax (“-” for loss) 3587624895.10 2478995080.60
Less: Income tax expense 909045628.10 529519232.12
4. Net profit (“-” for net loss) 2678579267.00 1949475848.48
4.1 Net profit from continuing
2678579267.001949475848.48
operations (“-” for net loss)
4.2 Net profit from discontinued
operations (“-” for net loss)
5. Other comprehensive income net of -1463957.32 855957.01
~ 99 ~Annual Report 2023
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
-1463957.32855957.01
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 -1463957.32 855957.01
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 2677115309.68 1950331805.49
7. Earnings per share
7.1 Basic earnings per share 5.07 3.69
7.2 Diluted earnings per share 5.07 3.69
5. Consolidated Cash Flow Statement
Unit: RMB
Item 2023 2022
1. Cash flows from operating activities:
Proceeds from sale of commodities 20796713697.12 17348587209.08
~ 100 ~Annual Report 2023
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 25589555.96 45693991.49
Cash generated from other operating
1423692371.041235322755.09
activities
Subtotal of cash generated from
22245995624.1218629603955.66
operating activities
Payments for commodities and
3187127580.323108670928.12
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 3667689324.27 3185038494.67
Taxes paid 6693398014.08 5307487437.35
Cash used in other operating activities 4201574671.03 3920492516.04
Subtotal of cash used in operating
17749789589.7015521689376.18
activities
Net cash generated from/used in 4496206034.42 3107914579.48
~ 101 ~Annual Report 2023
operating activities
2. Cash flows from investing activities:
Proceeds from disinvestment 1895000000.00 8260205000.00
Return on investment 26136797.69 221663163.09
Net proceeds from the disposal of
fixed assets intangible assets and other 5606610.18 1962955.22
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
1926743407.878483831118.31
investing activities
Payments for the acquisition of fixed
assets intangible assets and other 2381037944.96 1580221258.51
long-lived assets
Payments for investments 810199000.00 1613900000.00
Net increase in pledged loans granted
Net payments for the acquisition of
13439262.0520998589.19
subsidiaries and other business units
Cash used in other investing activities
Subtotal of cash used in investing
3204676207.013215119847.70
activities
Net cash generated from/used in
-1277932799.145268711270.61
investing activities
3. Cash flows from financing activities:
Capital contributions received 4000000.00 6000000.00
Including: Capital contributions by
4000000.006000000.00
non-controlling interests to subsidiaries
Borrowings raised 158200000.00 69900000.00
Cash generated from other financing
activities
Subtotal of cash generated from
162200000.0075900000.00
financing activities
Repayment of borrowings 139110000.00 177180000.00
Interest and dividends paid 1647714435.86 1211279690.92
Including: Dividends paid by
60232272.0341909624.65
subsidiaries to non-controlling interests
Cash used in other financing activities 22854817.28 16242902.55
Subtotal of cash used in financing
1809679253.141404702593.47
activities
Net cash generated from/used in
-1647479253.14-1328802593.47
financing activities
~ 102 ~Annual Report 2023
4. Effect of foreign exchange rates
changes on cash and cash equivalents
5. Net increase in cash and cash
1570793982.147047823256.62
equivalents
Add: Cash and cash equivalents
13105373435.226057550178.60
beginning of the period
6. Cash and cash equivalents end of the
14676167417.3613105373435.22
period
6. Cash Flow Statement of the Company as the Parent
Unit: RMB
Item 2023 2022
1. Cash flows from operating activities:
Proceeds from sale of commodities
11647556108.049518152761.40
and rendering of services
Tax rebates 554315.70 2094742.52
Cash generated from other operating
1945896434.511926489095.98
activities
Subtotal of cash generated from
13594006858.2511446736599.90
operating activities
Payments for commodities and
2966088152.222746340485.31
services
Cash paid to and for employees 1330813936.27 1081372305.15
Taxes paid 4002592476.22 3459006681.54
Cash used in other operating activities 2164383676.11 2992541464.72
Subtotal of cash used in operating
10463878240.8210279260936.72
activities
Net cash generated from/used in
3130128617.431167475663.18
operating activities
2. Cash flows from investing activities:
Proceeds from disinvestment 1270000000.00 7606205000.00
Return on investment 155367881.51 665639717.09
Net proceeds from the disposal of
fixed assets intangible assets and other 996472.31 2031105.25
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
1426364353.828273875822.34
investing activities
Payments for the acquisition of fixed 2112501571.75 1411407863.94
~ 103 ~Annual Report 2023
assets intangible assets and other
long-lived assets
Payments for investments 736199000.00 1063900000.00
Net payments for the acquisition of
13439262.0521225000.00
subsidiaries and other business units
Cash used in other investing activities
Subtotal of cash used in investing
2862139833.802496532863.94
activities
Net cash generated from/used in
-1435775479.985777342958.40
investing activities
3. Cash flows from financing activities:
Capital contributions received
Borrowings raised
Cash generated from other financing
activities
Subtotal of cash generated from
financing activities
Repayment of borrowings
Interest and dividends paid 1585800000.00 1164491025.57
Cash used in other financing activities 15930799.73 13992902.55
Subtotal of cash used in financing
1601730799.731178483928.12
activities
Net cash generated from/used in
-1601730799.73-1178483928.12
financing activities
4. Effect of foreign exchange rates
changes on cash and cash equivalents
5. Net increase in cash and cash
92622337.725766334693.46
equivalents
Add: Cash and cash equivalents
7338284192.521571949499.06
beginning of the period
6. Cash and cash equivalents end of the
7430906530.247338284192.52
period
~ 104 ~Annual Report 2023
7. Consolidated Statements of Changes in Owners’ Equity
2023
Unit: RMB
2023
Equity attributable to owners of the Company as the parent
Other equity
Item Generinstruments Less: Other Specifi Non-controlli Total owners’
Capital Surplus al Retained Othe
Share capital Treasur comprehensi c Subtotal ng interests equity Perpetu
Preferre Othe reserves reserves reserv earnings r
al y stock ve income reserve
d shares r e
bonds
1. Balance as
at the end of 528600000. 6224747667. 269402260. 11497599306. 18520757973. 812095782. 19332853756.
408739.61
the prior 00 10 27 54 52 69 21
year
Add:
Adjustment
for change in
accounting
policy
Adjustment
for
correction of
previous
error
Other
~ 105 ~Annual Report 2023
adjustments
2. Balance as
at the 528600000. 6224747667. 269402260. 11497599306. 18520757973. 812095782. 19332853756.
408739.61
beginning of 00 10 27 54 52 69 21
the year
3. Increase/
decrease in
3003364052.83004551635.976867569.93081419205.8
the period 1187583.12
0257
(“-” for
decrease)
3.1 Total
4589164052.84590351635.9138978257.4729329893.0
comprehensi 1187583.12
02157
ve income
3.2
Capital
increased -1878415.17 -1878415.17
and reduced
by owners
3.2.1
Ordinary
shares -1878415.17 -1878415.17
increased by
owners
3.2.2
Capital
increased by
holders of
other equity
instruments
~ 106 ~Annual Report 2023
3.2.3
Share-based
payments
included in
owners’
equity
3.2.4
Other
3.3 Profit -1585800000. -1585800000. -60232272.0 -1646032272.
distribution 00 00 3 03
3.3.1
Appropriatio
n to surplus
reserves
3.3.2
Appropriatio
n to general
reserve
3.3.3
Appropriatio
n to owners -1585800000. -1585800000. -60232272.0 -1646032272.(or 00 00 3 03
shareholders
)
3.3.4
Other
3.4
Transfers
within
~ 107 ~Annual Report 2023
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
~ 108 ~Annual Report 2023
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
528600000.6224747667.269402260.14500963359.21525309609.888963352.22414272962.
at the end of 1596322.73
00102734446408
the period
2022
Unit: RMB
2022
Equity attributable to owners of the Company as the parent
Item Other equity Less: Other Specifi Gener Non-controlli Total owners’
Capital Surplus Retained Othe
Share capital instruments Treasur comprehensi c al Subtotal ng interests equity
reserves reserves earnings r
Preferre Perpetu Othe y stock ve income reserve reserv
~ 109 ~Annual Report 2023
d shares al 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
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 3143797.80 3143144732.0 3146288529.8 109424461. 3255712991.3
~ 110 ~Annual Report 2023
comprehensi 8 8 42 0
ve income
3.2
Capital
29109508.0
increased 29109508.03
3
and reduced
by owners
3.2.1
Ordinary
shares 6000000.00 6000000.00
increased by
owners
3.2.2
Capital
increased by
holders of
other equity
instruments
3.2.3
Share-based
payments
included in
owners’
equity
3.2.423109508.0
23109508.03
Other 3
3.3 Profit -1162920000. -1162920000. -41909624.6 -1204829624.
distribution 00 00 5 65
~ 111 ~Annual Report 2023
3.3.1
Appropriatio
n to surplus
reserves
3.3.2
Appropriatio
n to general
reserve
3.3.3
Appropriatio
n to owners -1162920000. -1162920000. -41909624.6 -1204829624.(or 00 00 5 65
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
~ 112 ~Annual Report 2023
Increase in
capital (or
share
capital) from
surplus
reserves
3.4.3
Loss offset
by surplus
reserves
3.4.4
Changes in
defined
benefit
schemes
transferred
to retained
earnings
3.4.5
Other
comprehensi
ve income
transferred
to retained
earnings
3.4.6
Other
3.5
Specific
~ 113 ~Annual Report 2023
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
8. Statements of Changes in Owners’ Equity of the Company as the Parent
2023
Unit: RMB
2023
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
528600000.006176504182.20-529354.77264300000.009691022921.7816659897749.21
of the prior year
Add: Adjustment for
change in accounting
policy
Adjustment for
correction of previous
error
~ 114 ~Annual Report 2023
Other adjustments
2. Balance as at the
528600000.006176504182.20-529354.77264300000.009691022921.7816659897749.21
beginning of the year
3. Increase/ decrease in
the period (“-” for -1463957.32 1092779267.00 1091315309.68
decrease)
3.1 Total
-1463957.322678579267.002677115309.68
comprehensive income
3.2 Capital increased
and reduced by owners
3.2.1 Ordinary
shares increased by
owners
3.2.2 Capital
increased by holders of
other equity
instruments
3.2.3 Share-based
payments included in
owners’ equity
3.2.4 Other
3.3 Profit
-1585800000.00-1585800000.00
distribution
3.3.1
Appropriation to
surplus reserves
3.3.2
-1585800000.00-1585800000.00
Appropriation to
~ 115 ~Annual Report 2023
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
3.4.6 Other
3.5 Specific reserve
3.5.1 Increase in
the period
3.5.2 Used in the
~ 116 ~Annual Report 2023
period
3.6 Other
4. Balance as at the end
528600000.006176504182.20-1993312.09264300000.0010783802188.7817751213058.89
of the period
2022
Unit: RMB
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
528600000.006176504182.20-1385311.78264300000.008904467073.3015872485943.72
end 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
comprehensive 855957.01 1949475848.48 1950331805.49
income
~ 117 ~Annual Report 2023
3.2 Capital
increased and reduced
by owners
3.2.1 Ordinary
shares increased by
owners
3.2.2 Capital
increased by holders
of other equity
instruments
3.2.3
Share-based
payments included in
owners’ equity
3.2.4 Other
3.3 Profit
-1162920000.00-1162920000.00
distribution
3.3.1
Appropriation to
surplus reserves
3.3.2
Appropriation to
-1162920000.00-1162920000.00
owners (or
shareholders)
3.3.3 Other
3.4 Transfers
within owners’ equity
3.4.1 Increase in
~ 118 ~Annual Report 2023
capital (or share
capital) from capital
reserves
3.4.2 Increase in
capital (or share
capital) from surplus
reserves
3.4.3 Loss offset
by surplus reserves
3.4.4 Changes in
defined benefit
schemes transferred
to retained earnings
3.4.5 Other
comprehensive
income transferred to
retained earnings
3.4.6 Other
3.5 Specific
reserve
3.5.1 Increase in
the period
3.5.2 Used in the
period
3.6 Other
4. Balance as at the
528600000.006176504182.20-529354.77264300000.009691022921.7816659897749.21
end of the period
~ 119 ~Annual Report 2023
Anhui Gujing Distillery Company Limited
Notes to the Financial Statements
For the year ended 31 December 2023
（All amounts are expressed in Renminbi Yuan(“RMB”)unless otherwise stated）
1. BASIC INFORMATION ABOUT THE COMPANY
1.1 Company Profile
The Anhui State-owned Asset Management Bureau approved through WanGuoZiGongZi (1996)
No. 053 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. 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.
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.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).~ 120 ~Annual Report 2023
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 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]
No. 1065. 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.Upon approval by the CSRC through ZhengJianXuKe [2021] 1422 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 2023 total number of the Company’s shares stood at 528.6 million. See Note
5.33 for further details.
~ 121 ~Annual Report 2023
The company's headquarters is located in Bozhou City Anhui Province Gujing town. Legal
representative of the company is Liang Jinhui.The company is mainly engaged in the production and sales of distilled wine which belongs to the
food manufacturing industry.These financial statements are approved on 26 April 2024 by the Company’s Board of Directors for
publication.
2. BASIS OF PREPARATION OF 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 forBusiness Enterprises issued by Ministry of Finance of PRC”). In addition the Company discloses
the relevant financial information in accordance with "Rules No.15 for the Information Disclosure
and Reporting of Companies Offering Securities to the Public - General Requirements for Financial
Reporting (2023 Revision)" issued by 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.
3. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
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
~ 122 ~Annual Report 2023
Accounting Standards for Business Enterprises truly and completely reflecting the Company’s
financial position as at 31 December 2023 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 1 January to 31 December in calendar year.
3.3 Operating Cycle
The normal operating cycle of the Company is twelve months.
3.4 Functional Currency
The Company takes Renminbi Yuan (“RMB”) as the functional currency.The Company’s overseas subsidiaries choose the currency of the primary economic environment in
which the subsidiaries operate as the functional currency.
3.5 Determining Factor and Basis of Selection of Materiality
Item Factor and basis of materiality
Significant write-off of other receivables Amount greater than 5 million
Significant individual provision for bad debt of accounts
Amount greater than 5 million
receivable
Significant other payables with aging of over one year More than 0.03% of the total assets
Significant accounts payable with aging of over one year More than 0.03% of the total assets
Total assets operating income and net profit account for
Significant non-wholly owned subsidiaries more than 5% of the corresponding items in the
consolidated financial statements
Significant goodwill Individual amount more than 50 million
Significant construction in progress Individual amount more than 20 million
3.6 Accounting Treatment of Business Combinations under and not under Common Control
(a) Business combinations under common control
The assets and liabilities that the Company obtains in a business combination under common
control shall be measured at their carrying amount of the acquired entity at the combination date. If
the accounting policy adopted by the acquired entity is different from that adopted by the acquiring
entity the acquiring entity shall according to accounting policy it adopts adjust the relevant items
in the financial statements of the acquired party based on the principal of materiality. As for the
difference between the carrying amount of the net assets obtained by the acquiring entity and the
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carrying amount of the consideration paid by it the capital reserve (capital premium or share
premium) shall be adjusted. If the capital reserve (capital premium or share premium) is not
sufficient to absorb the difference any excess shall be adjusted against retained earnings.For the accounting treatment of business combination under common control by step acquisitions
please refer to Note 3.7 (6).(b) Business combinations not under common control
The assets and liabilities that the Company obtains in a business combination not under common
control shall be measured at their fair value at the acquisition date. If the accounting policy adopted
by the acquired entity is different from that adopted by the acquiring entity the acquiring entity
shall according to accounting policy it adopts adjust the relevant items in the financial statements
of the acquired entity based on the principal of materiality. The acquiring entity shall recognise the
positive balance between the combination costs and the fair value of the identifiable net assets it
obtains from the acquired entity as goodwill. The acquiring entity shall pursuant to the following
provisions treat the negative balance between the combination costs and the fair value of the
identifiable net assets it obtains from the acquired entity:
(i) It shall review the measurement of the fair values of the identifiable assets liabilities and
contingent liabilities it obtains from the acquired entity as well as the combination costs;
(ii) If after the review the combination costs are still less than the fair value of the identifiable net
assets it obtains from the acquired entity the balance shall be recognised in profit or loss of the
reporting period.For the accounting treatment of business combination under the same control by step acquisitions
please refer to Note 3.7 (6).(c) Treatment of business combination related costs
The intermediary costs such as audit legal services and valuation consulting and other related
management costs that are directly attributable to the business combination shall be charged in
profit or loss in the period in which they are incurred. The costs to issue equity or debt securities for
the consideration of business combination shall be recorded as a part of the value of the respect
equity or debt securities upon initial recognition.
3.7 Judgment of Control and Method of Preparing the Consolidated Financial Statements
(a) Judgment of control and consolidation decision
Control exists when the Company has power over the investee exposure or rights to variable
returns from its involvement with the investee and the ability to use its power over the investee to
affect the amount of the returns. The definition of control contains there elements: - power over the
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investee; exposure or rights to variable returns from the Company’s involvement with the investee;
and the ability to use its power over the investee to affect the amount of the investor’s returns. The
Company controls an investee if and only if the Company has all the above three elements.The scope of consolidated financial statements shall be determined on the basis of control. It not
only includes subsidiaries determined based on voting rights (or similar) or together with other
arrangement but also structured entities under one or more contractual arrangements.Subsidiaries are the entities that controlled by the Company (including enterprise a divisible part of
the investee and structured entity controlled by the enterprise). A structured entity (sometimes
called a Special Purpose Entity) is an entity that has been designed so that voting or similar rights
are not the dominant factor in deciding who controls the entity.(b) Special requirement as the parent company is an investment entity
If the parent company is an investment entity it should measure its investments in particular
subsidiaries as financial assets at fair value through profit or loss instead of consolidating those
subsidiaries in its consolidated and separate financial statements. However as an exception to this
requirement if a subsidiary provides investment-related services or activities to the investment
entity it should be consolidated.The parent company is defined as investment entity when meets following conditions:
(i) Obtains funds from one or more investors for the purpose of providing those investors with
investment management services;
(ii) Commits to its investors that its business purpose is to invest funds solely for returns from
capital appreciation investment income or both; and
(iii) Measures and evaluates the performance of substantially all of its investments on a fair value
basis.If the parent company becomes an investment entity it shall cease to consolidate its subsidiaries at
the date of the change in status except for any subsidiary which provides investment-related
services or activities to the investment entity shall be continued to be consolidated. The
deconsolidation of subsidiaries is accounted for as though the investment entity partially disposed
subsidiaries without loss of control.When the parent company previously classified as an investment entity ceases to be an investment
entity subsidiary that was previously measured at fair value through profit or loss shall be included
in the scope of consolidated financial statements at the date of the change in status. The fair value of
the subsidiary at the date of change represents the transferred deemed consideration in accordance
with the accounting for business combination not under common control.(c) Method of preparing the consolidated financial statements
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The consolidated financial statements shall be prepared by the Company based on the financial
statements of the Company and its subsidiaries and using other related information.When preparing consolidated financial statements the Company shall consider the entire group as
an accounting entity adopt uniform accounting policies and apply the requirements of Accounting
Standard for Business Enterprises related to recognition measurement and presentation. The
consolidated financial statements shall reflect the overall financial position operating results and
cash flows of the group.(i) Like items of assets liabilities equity income expenses and cash flows of the parent are
combined with those of the subsidiaries.(ii) The carrying amount of the parent’s investment in each subsidiary is eliminated (off-set) against
the parent’s portion of equity of each subsidiary.(iii) Eliminate the impact of intragroup transactions between the Company and the subsidiaries or
between subsidiaries and when intragroup transactions indicate an impairment of related assets the
losses shall be recognised in full.(iv) Make adjustments to special transactions from the perspective of the group.(d) Method of preparation of the consolidated financial statements when subsidiaries are
acquired or disposed in the reporting period
(i) Acquisition of subsidiaries or business
Subsidiaries or business acquired through business combination under common control
When preparing consolidated statements of financial position the opening balance of the
consolidated balance sheet shall be adjusted. Related items of comparative financial statements
shall be adjusted as well deeming that the combined entity has always existed ever since the
ultimate controlling party began to control.Incomes expenses and profits of the subsidiary incurred from the beginning of the reporting period
to the end of the reporting period shall be included into the consolidated statement of profit or loss.Related items of comparative financial statements shall be adjusted as well deeming that the
combined entity has always existed ever since the ultimate controlling party began to control.Cash flows from the beginning of the reporting period to the end of the reporting period shall be
included into the consolidated statement of cash flows. Related items of comparative financial
statements shall be adjusted as well deeming that the combined entity has always existed ever since
the ultimate controlling party began to control.Subsidiaries or business acquired through business combination not under common control
When preparing the consolidated statements of financial position the opening balance of the
consolidated statements of financial position shall not be adjusted.~ 126 ~Annual Report 2023
Incomes expenses and profits of the subsidiary incurred from the acquisition date to the end of the
reporting period shall be included into the consolidated statement of profit or loss.Cash flows from the acquisition date to the end of the reporting period shall be included into the
consolidated statement of cash flows.(ii) Disposal of subsidiaries or business
When preparing the consolidated statements of financial position the opening balance of the
consolidated statements of financial position shall not be adjusted.Incomes expenses and profits incurred from the beginning of the subsidiary to the disposal date
shall be included into the consolidated statement of profit or loss.Cash flows from the beginning of the subsidiary to the disposal date shall be included into the
consolidated statement of cash flows.(e) Special consideration in consolidation elimination
(i) Long-term equity investment held by the subsidiaries to the Company shall be recognised astreasury stock of the Company which is offset with the owner’s equity represented as “treasurystock” under “owner’s equity” in the consolidated statement of financial position.Long-term equity investment held by subsidiaries between each other is accounted for taking
long-term equity investment held by the Company to its subsidiaries as reference. That is the
long-term equity investment is eliminated (off-set) against the portion of the corresponding
subsidiary’s equity.(ii) Due to not belonging to paid-in capital (or share capital) and capital reserve and being different
from retained earnings and undistributed profit “Specific reserves” and “General risk provision”
shall be recovered based on the proportion attributable to owners of the parent company after
long-term equity investment to the subsidiaries is eliminated with the subsidiaries’ equity.(iii) If temporary timing difference between the book value of the assets and liabilities in the
consolidated statement of financial position and their tax basis is generated as a result of elimination
of unrealized inter-company transaction profit or loss deferred tax assets of deferred tax liabilities
shall be recognised and income tax expense in the consolidated statement of profit or loss shall be
adjusted simultaneously excluding deferred taxes related to transactions or events directly
recognised in owner’s equity or business combination.(iv) Unrealised inter-company transactions profit or loss generated from the Company selling assetsto its subsidiaries shall be eliminated against “net profit attributed to the owners of the parentcompany” in full. Unrealized inter-company transactions profit or loss generated from thesubsidiaries selling assets to the Company shall be eliminated between “net profit attributed to theowners of the parent company” and “non-controlling interests” pursuant to the proportion of the
~ 127 ~Annual Report 2023
Company in the related subsidiaries. Unrealized inter-company transactions profit or loss generatedfrom the assets sales between the subsidiaries shall be eliminated between “net profit attributed tothe owners of the parent company” and “non-controlling interests” pursuant to the proportion of the
Company in the selling subsidiaries.(v) If loss attributed to the minority shareholders of a subsidiary in current period is more than the
proportion of non-controlling interest in this subsidiary at the beginning of the period
non-controlling interest is still to be written down.(f) Accounting for Special Transactions
(i) Purchasing of non-controlling interests
Where the Company purchases non-controlling interests of its subsidiary in the separate financial
statements of the Company the cost of the long-term equity investment obtained in purchasing
non-controlling interests is measured at the fair value of the consideration paid. In the consolidated
financial statements difference between the cost of the long-term equity investment newly obtained
in purchasing non-controlling interests and share of the subsidiary’s net assets from the acquisition
date or combination date continuingly calculated pursuant to the newly acquired shareholding
proportion shall be adjusted into capital reserve (capital premium or share premium). If capital
reserve is not enough to be offset surplus reserve and undistributed profit shall be offset in turn.(ii) Gaining control over the subsidiary in stages through multiple transactions
Business combination under common control in stages through multiple transactions
On the combination date in the separate financial statement initial cost of the long-term equity
investment is determined according to the share of carrying amount of the acquiree’s net assets in
the ultimate controlling entity’s consolidated financial statements after combination. The difference
between the initial cost of the long-term equity investment and the carrying amount of the long
-term investment held prior of control plus book value of additional consideration paid at
acquisition date is adjusted into capital reserve (capital premium or share premium). If the capital
reserve is not enough to absorb the difference any excess shall be adjusted against surplus reserve
and undistributed profit in turn.In the consolidated financial statements the assets and liabilities acquired during the combination
should be recognized at their carrying amount in the ultimate controlling entity’s consolidated
financial statements on the combination date unless any adjustment is resulted from the difference
in accounting policies. The difference between the carrying amount of the investment held prior of
control plus book value of additional consideration paid on the acquisition date and the net assets
acquired through the combination is adjusted into capital reserve (capital premium or share
premium). If the capital reserve is not enough to absorb the difference any excess shall be adjusted
against retained earnings.~ 128 ~Annual Report 2023
If the acquiring entity holds equity investment in the acquired entity prior to the combination date
and the equity investment is accounted for under the equity method related profit or loss other
comprehensive income and other changes in equity which have been recognised during the period
from the later of the date of the Company obtaining original equity interest and the date of both the
acquirer and the acquiree under common control of the same ultimate controlling party to the
combination date should be offset against the opening balance of retained earnings at the
comparative financial statements period respectively.Business combination not under common control in stages through multiple transactions
On the consolidation date in the separate financial statements the initial cost of long-term equity
investment is determined according to the carrying amount of the original long-term investment
plus the cost of new investment.In the consolidated financial statements the equity interest of the acquired entity held prior to the
acquisition date shall be re-measured at its fair value on the acquisition date. Difference between the
fair value of the equity interest and its book value is recognised as investment income. The other
comprehensive income related to the equity interest held prior to the acquisition date calculated
through equity method should be transferred to current investment income of the acquisition
period excluding other comprehensive income resulted from the remeasurement of the net assets or
net liabilities under defined benefit plan. The Company shall disclose acquisition-date fair value of
the equity interest held prior to the acquisition date and the related gains or losses due to the
remeasurement based on fair value.(iii) Disposal of investment in subsidiaries without a loss of control
For partial disposal of the long-term equity investment in the subsidiaries without a loss of control
when the Company prepares consolidated financial statements difference between consideration
received from the disposal and the corresponding share of subsidiary’s net assets cumulatively
calculated from the acquisition date or combination date shall be adjusted into capital reserve
(capital premium or share premium). If the capital reserve is not enough to absorb the difference
any excess shall be offset against retained earnings.(iv) Disposal of investment in subsidiaries with a loss of control
Disposal through one transaction
If the Company loses control in an investee through partial disposal of the equity investment when
the consolidated financial statements are prepared the retained equity interest should be
re-measured at fair value at the date of loss of control. The difference between i) the fair value of
consideration received from the disposal plus non-controlling interest retained; ii) share of the
former subsidiary’s net assets cumulatively calculated from the acquisition date or combination date
according to the original proportion of equity interest shall be recognised in current investment
~ 129 ~Annual Report 2023
income when control is lost.Moreover other comprehensive income and other changes in equity related to the equity investment
in the former subsidiary shall be transferred into current investment income when control is lost
excluding other comprehensive income resulted from the remeasurement of the movement of net
assets or net liabilities under defined benefit plan.Disposal in stagesIn the consolidated financial statements whether the transactions should be accounted for as “asingle transaction” needs to be decided firstly.If the disposal in stages should not be classified as “a single transaction” in the separate financial
statements for transactions prior of the date of loss of control carrying amount of each disposal of
long-term equity investment need to be recognized and the difference between consideration
received and the carrying amount of long-term equity investment corresponding to the equity
interest disposed should be recognized in current investment income; in the consolidated financialstatements the disposal transaction should be accounted for according to related policy in “Disposalof long-term equity investment in subsidiaries without a loss of control”.If the disposal in stages should be classified as “a single transaction” these transactions should be
accounted for as a single transaction of disposal of subsidiary resulting in loss of control. In the
separate financial statements for each transaction prior of the date of loss of control difference
between consideration received and the carrying amount of long-term equity investment
corresponding to the equity interest disposed should be recognised as other comprehensive income
firstly and transferred to profit or loss as a whole when control is lost; in the consolidated financial
statements for each transaction prior of the date of loss of control difference between consideration
received and proportion of the subsidiary’s net assets corresponding to the equity interest disposed
should be recognised in profit or loss as a whole when control is lost.In considering of the terms and conditions of the transactions as well as their economic impact the
presence of one or more of the following indicators may lead to account for multiple transactions as
a single transaction:
The transactions are entered into simultaneously or in contemplation of one another. The transactions form a single transaction designed to achieve an overall commercial effect. The occurrence of one transaction depends on the occurrence of at least one other transaction. One transaction when considered on its own merits does not make economic sense but when considered
together with the other transaction or transactions would be considered economically justifiable.(v) Diluting equity share of parent company in its subsidiaries due to additional capital
~ 130 ~Annual Report 2023
injection by the subsidiaries’ minority shareholders.Other shareholders (minority shareholders) of the subsidiaries inject additional capital in the
subsidiaries which resulted in the dilution of equity interest of parent company in these subsidiaries.In the consolidated financial statements difference between share of the corresponding subsidiaries’
net assets calculated based on the parent’s equity interest before and after the capital injection shall
be adjusted into capital reserve (capital premium or share premium). If the capital reserve is not
enough to absorb the difference any excess shall be adjusted against retained earnings.
3.8 Classification of Joint Arrangements and Accounting for Joint Operation
A joint arrangement is an arrangement of which two or more parties have joint control. Joint
arrangement of the Company is classified as either a joint operation or a joint venture.(a) Joint operation
A joint operation is a joint arrangement whereby the parties that have joint control of the
arrangement have rights to the assets and obligations for the liabilities relating to the arrangement.The Company shall recognise the following items in relation to shared interest in a joint operation
and account for them in accordance with relevant accounting standards of the Accounting Standards
for Business Enterprises:
(i) its assets including its share of any assets held jointly;
(ii) its liabilities including its share of any liabilities incurred jointly;
(iii) its revenue from the sale of its share of the output arising from the joint operation;
(iv) its share of the revenue from the sale of the output by the joint operation; and
(v) its expenses including its share of any expenses incurred jointly.(b) Joint venture
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement
have rights to the net assets of the arrangement.The Company accounts for its investment in the joint venture by applying the equity method of
long-term equity investment.
3.9 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.~ 131 ~Annual Report 2023
3.10 Financial Instruments
Financial instrument is any contract which gives rise to both a financial asset of one entity and a
financial liability or equity instrument of another entity.(a) Recognition and derecognition of financial instrument
A financial asset or a financial liability should be recognised in the statement of financial position
when and only when an entity becomes party to the contractual provisions of the instrument.A financial asset can only be derecognised when meets one of the following conditions:
(i) The rights to the contractual cash flows from a financial asset expire
(ii) The financial asset has been transferred and meets one of the following derecognition
conditions:
Financial liabilities (or part thereof) are derecognised only when the liability is extinguished—i.e.when the obligation specified in the contract is discharged or cancelled or expires. An exchange of
the Company (borrower) and lender of debt instruments that carry significantly different terms or a
substantial modification of the terms of an existing liability are both accounted for as an
extinguishment of the original financial liability and the recognition of a new financial liability.Purchase or sale of financial assets in a regular-way shall be recognised and derecognised using
trade date accounting. A regular-way purchase or sale of financial assets is a transaction under a
contract whose terms require delivery of the asset within the time frame established generally by
regulations or convention in the market place concerned. Trade date is the date at which the entity
commits itself to purchase or sell an asset.(b) Classification and measurement of financial assets
At initial recognition the Company classified its financial asset based on both the business model
for managing the financial asset and the contractual cash flow characteristics of the financial asset:
financial asset at amortised cost financial asset at fair value through profit or loss (FVTPL) and
financial asset at fair value through other comprehensive income (FVTOCI). Reclassification of
financial assets is permitted if and only if the objective of the entity’s business model for
managing those financial assets changes. In this circumstance all affected financial assets shall be
reclassified on the first day of the first reporting period after the changes in business model;
otherwise the financial assets cannot be reclassified after initial recognition.Financial assets shall be measured at initial recognition at fair value. For financial assets measured
at FVTPL transaction costs are recognised in current profit or loss. For financial assets not
measured at FVTPL transaction costs should be included in the initial measurement. Notes
receivable or accounts receivable that arise from sales of goods or rendering of services are initially
measured at the transaction price defined in the accounting standard of revenue where the
~ 132 ~Annual Report 2023
transaction does not include a significant financing component.Subsequent measurement of financial assets will be based on their categories:
(i)Financial asset at amortised cost
The financial asset at amortised cost category of classification applies when both the following
conditions are met: the financial asset is held within the business model whose objective is to hold
financial assets in order to collect contractual cash flows and the contractual term of the financial
asset gives rise on specified dates to cash flows that are solely payment of principal and interest on
the principal amount outstanding. These financial assets are subsequently measured at amortised
cost by adopting the effective interest rate method. Any gain or loss arising from derecognition
according to the amortisation under effective interest rate method or impairment are recognised in
current profit or loss.(ii)Financial asset at fair value through other comprehensive income (FVTOCI)
The financial asset at FVTOCI category of classification applies when both the following
conditions are met: the financial asset is held within the business model whose objective is achieved
by both collecting contractual cash flows and selling financial assets and the contractual term of the
financial asset gives rise on specified dates to cash flows that are solely payment of principle and
interest on the principal amount outstanding. All changes in fair value are recognised in other
comprehensive income except for gain or loss arising from impairment or exchange differences
which should be recognised in current profit or loss. At derecognition cumulative gain or loss
previously recognised under OCI is reclassified to current profit or loss. However interest income
calculated based on the effective interest rate is included in current profit or loss.The Company make an irrevocable decision to designate part of non-trading equity instrument
investments as measured through FVTOCI. All changes in fair value are recognised in other
comprehensive income except for dividend income recognised in current profit or loss. At
derecognition cumulative gain or loss are reclassified to retained earnings.(iii)Financial asset at fair value through profit or loss (FVTPL)
Financial asset except for above mentioned financial asset at amortised cost or financial asset at fair
value through other comprehensive income (FVTOCI) should be classified as financial asset at fair
value through profit or loss (FVTPL). These financial assets should be subsequently measured at
fair value. All the changes in fair value are included in current profit or loss.(c) Classification and measurement of financial liabilities
The Company classified the financial liabilities as financial liabilities at fair value through profit or
loss (FVTPL) loan commitments at a below-market interest rate and financial guarantee contracts
and financial asset at amortised cost.Subsequent measurement of financial assets will be based on the classification:
~ 133 ~Annual Report 2023
(i)Financial liabilities at fair value through profit or loss (FVTPL)
Held-for-trading financial liabilities (including derivatives that are financial liabilities) and financial
liabilities designated at FVTPL are classified as financial liabilities at FVTP. After initial
recognition any gain or loss (including interest expense) are recognised in current profit or loss
except for those hedge accounting is applied. For financial liability that is designated as at FVTPL
changes in the fair value of the financial liability that is attributable to changes in the own credit risk
of the issuer shall be presented in other comprehensive income. At derecognition cumulative gain
or loss previously recognised under OCI is reclassified to retained earnings.(ii)Loan commitments and financial guarantee contracts
Loan commitment is a commitment by the Company to provide a loan to customer under specified
contract terms. The provision of impairment losses of loan commitments shall be recognised based
on expected credit losses model.Financial guarantee contract is a contract that requires the Company to make specified payments to
reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due
in accordance with the original or modified terms of a debt instrument. Financial guarantee
contracts liability shall be subsequently measured at the higher of: The amount of the loss
allowance recognised according to the impairment principles of financial instruments; and the
amount initially recognised less the cumulative amount of income recognised in accordance with
the revenue principles.(iii)Financial liabilities at amortised cost
After initial recognition the Company measured other financial liabilities at amortised cost using
the effective interest method.Except for special situation financial liabilities and equity instrument should be classified in
accordance with the following principles:
(i) If the Company has no unconditional right to avoid delivering cash or another financial
instrument to fulfill a contractual obligation this contractual obligation meet the definition of
financial liabilities. Some financial instruments do not comprise terms and conditions related
to obligations of delivering cash or another financial instrument explicitly they may include
contractual obligation indirectly through other terms and conditions.(ii) If a financial instrument must or may be settled in the Company's own equity instruments it
should be considered that the Company’s own equity instruments are alternatives of cash or another
financial instrument or to entitle the holder of the equity instruments to sharing the remaining rights
over the net assets of the issuer. If the former is the case the instrument is a liability of the issuer;
otherwise it is an equity instrument of the issuer. Under some circumstances it is regulated in the
contract that the financial instrument must or may be settled in the Company's own equity
~ 134 ~Annual Report 2023
instruments where amount of contractual rights and obligations are calculated by multiplying the
number of the equity instruments to be available or delivered by its fair value upon settlement. Such
contracts shall be classified as financial liabilities regardless that the amount of contractual rights
and liabilities is fixed or fluctuate totally or partially with variables other than market price of the
entity’s own equity instruments (such as interest rate price of some kind of goods or some kind of
financial instrument).(d) Derivatives and embedded derivatives
At initial recognition derivatives shall be measured at fair value at the date of derivative contracts
are signed and subsequently measured at fair value. The derivative with a positive fair value shall be
recognized as an asset and with a negative fair value shall be recognised as a liability.Gains or losses arising from the changes in fair value of derivatives shall be recognised directly into
current profit or loss except for the effective portion of cash flow hedges which shall be recognised
in other comprehensive income and reclassified into current profit or loss when the hedged items
affect profit or loss.An embedded derivative is a component of a hybrid contract with a financial asset as a host the
Company shall apply the requirements of financial asset classification to the entire hybrid contract.If a host that is not a financial asset and the hybrid contract is not measured at fair value with
changes in fair value recognised in profit or loss and the economic characteristics and risks of the
embedded derivative are not closely related to the economic characteristics and risks of the host
and a separate instrument with the same terms as the embedded derivative would meet the
definition of a derivative the embedded derivative shall be separated from the hybrid instrument
and accounted for as a separate derivative instrument. If the Company is unable to measure the fair
value of the embedded derivative at the acquisition date or subsequently at the balance sheet date
the entire hybrid contract is designated as financial assets or financial liabilities at fair value through
profit or loss.(e) Impairment of financial instrument
The Company shall recognise a loss allowance based on expected credit losses on a financial asset
that is measured at amortised cost a debt investment at fair value through other comprehensive
income a contract asset a lease receivable a loan commitment and a financial guarantee contract.(i) Measurement of expected credit losses
Expected credit losses are the weighted average of credit losses of the financial instruments with the
respective risks of a default occurring as the weights. Credit loss is the difference between all
contractual cash flows that are due to the Company in accordance with the contract and all the cash
flows that the Company expects to receive (ie all cash shortfalls) discounted at the original
effective interest rate or credit- adjusted effective interest rate for purchased or originated
credit-impaired financial assets.~ 135 ~Annual Report 2023
Lifetime expected credit losses are the expected credit losses that result from all possible default
events over the expected life of a financial instrument.
12-month expected credit losses are the portion of lifetime expected credit losses that represent the
expected credit losses that result from default events on a financial instrument that are possible
within the 12 months after the reporting date (or the expected lifetime if the expected life of a
financial instrument is less than 12 months).At each reporting date the Company classifies financial instruments into three stages and makes
provisions for expected credit losses accordingly. A financial instrument of which the credit risk has
not significantly increased since initial recognition is at stage 1. The Company shall measure the
loss allowance for that financial instrument at an amount equal to 12-month expected credit losses.A financial instrument with a significant increase in credit risk since initial recognition but is not
considered to be credit-impaired is at stage 2. The Company shall measure the loss allowance for
that financial instrument at an amount equal to the lifetime expected credit losses. A financial
instrument is considered to be credit-impaired as at the end of the reporting period is at stage 3. The
Company shall measure the loss allowance for that financial instrument at an amount equal to the
lifetime expected credit losses.The Company may assume that the credit risk on a financial instrument has not increased
significantly since initial recognition if the financial instrument is determined to have low credit risk
at the reporting date and measure the loss allowance for that financial instrument at an amount equal
to 12-month expected credit losses.For financial instrument at stage 1 stage 2 and those have low credit risk the interest revenue shall
be calculated by applying the effective interest rate to the gross carrying amount of a financial asset
(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.Receivables/Contract assets
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
~ 136 ~Annual Report 2023
accounts receivable financing and long-term receivables shall be divided into several groups with
similar credit risk characteristics and collectively calculated the expected credit loss. The
determination basis of groups is as following:
Determination basis of notes receivable is as following:
Group 1: Commercial acceptance bills
Group 2: Bank acceptance bills
For each group the Company calculates expected credit losses through default exposure and the
lifetime expected credit losses rate taking reference to historical experience for credit losses and
considering current condition and expectation for the future economic situation.Determination basis of accounts receivable is as following:
Group 1: Related parties within the scope of consolidation
Group 2: Receivables due from third parties
For each group the Company calculates expected credit losses through preparing an aging analysis
schedule with the lifetime expected credit losses rate taking reference to historical experience for
credit losses and considering current condition and expectation for the future economic situation.Determination basis of other receivables is as following:
Group 1: Related parties within the scope of consolidation
Group 2: Receivables due from third parties
For each group the Company calculates expected credit losses through default exposure and the
12-months or lifetime expected credit losses rate taking reference to historical experience for credit
losses and considering current condition and expectation for the future economic situation.Determination basis of accounts receivable financing is as following:
Group 1: Commercial acceptance bills
Group 2: Bank acceptance bills
For each group the Company calculates expected credit losses through default exposure and the
lifetime expected credit losses rate taking reference to historical experience for credit losses and
considering current condition and expectation for the future economic situation.Determination basis of contract assets is as following:
Group 1: Project construction
Group 2: Undue warranty
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
~ 137 ~Annual Report 2023
considering current condition and expectation for the future economic situation.Determination basis of long-term receivables financing is as following:
Group 1: Project receivables Lease receivables
Group 2: Others
For group 1 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.For group 2 the Company calculates expected credit losses through default exposure and the
12-months or lifetime expected credit losses rate taking reference to historical experience for credit
losses and considering current condition and expectation for the future economic situation.The Company's aging calculation method of credit risk characteristic combination based on aging is
as follows:
Aging Accounts receivable Provision ratio Other receivables provision ratio
Within 6 months 1% 1%
7 months to 1 years 5% 5%
1-2 years 10% 10%
2-3 years 50% 50%
Over 3 years 100% 100%
Debt investment and other debt investment
For debt investment and other debt investment the Company shall calculate the expected credit loss
through the default exposure and the 12-month or lifetime expected credit loss rate based on the
nature of the investment counterparty and the type of risk exposure.(ii) Low credit risk
If the financial instrument has a low risk of default the borrower has a strong capacity to meet its
contractual cash flow obligations in the near term and adverse changes in economic and business
conditions in the longer term may but will not necessarily reduce the ability of the borrower to
fulfill its contractual cash flow obligations.(iii) Significant increase in credit risk
The Company shall assess whether the credit risk on a financial instrument has increased
significantly since initial recognition using the change in the risk of a default occurring over the
expected life of the financial instrument through the comparison of the risk of a default occurring
on the financial instrument as at the reporting date with the risk of a default occurring on the
financial instrument as at the date of initial recognition.~ 138 ~Annual Report 2023
To make that assessment the Company shall consider reasonable and supportable information that
is available without undue cost or effort and that is indicative of significant increases in credit risk
since initial recognition including forward-looking information. The information considered by the
Company are as following:
Significant changes in internal price indicators of credit risk as a result of a change in credit risk since
inception
Existing or forecast adverse change in the business financial or economic conditions of the borrower that
results in a significant change in the borrower’s ability to meet its debt obligations；
An actual or expected significant change in the operating results of the borrower; An actual or expected
significant adverse change in the regulatory economic or technological environment of the borrower；
Significant changes in the value of the collateral supporting the obligation or in the quality of third-party
guarantees or credit enhancements which are expected to reduce the borrower’s economic incentive to make
scheduled contractual payments or to otherwise influence the probability of a default occurring;
Significant change that are expected to reduce the borrower’s economic incentive to make scheduled
contractual payments;
Expected changes in the loan documentation including an expected breach of contract that may lead to
covenant waivers or amendments interest payment holidays interest rate step-ups requiring additional
collateral or guarantees or other changes to the contractual framework of the instrument；
Significant changes in the expected performance and behavior of the borrower；
Contractual payments are more than 30 days past due.Depending on the nature of the financial instruments the Company shall assess whether the credit
risk has increased significantly since initial recognition on an individual financial instrument or a
group of financial instruments. When assessed based on a group of financial instruments the
Company can group financial instruments on the basis of shared credit risk characteristics for
example past due information and credit risk rating.Generally the Company shall determine the credit risk on a financial asset has increased
significantly since initial recognition when contractual payments are more than 30 days past due.The Company can only rebut this presumption if the Company has reasonable and supportable
information that is available without undue cost or effort that demonstrates that the credit risk has
not increased significantly since initial recognition even though the contractual payments are more
than 30 days past due.(iv) Credit-impaired financial asset
The Company shall assess at each reporting date whether the credit impairment has occurred for
~ 139 ~Annual Report 2023
financial asset at amortised cost and debt investment at fair value through other comprehensive
income. A financial asset is credit-impaired when one or more events that have a detrimental impact
on the estimated future cash flows of that financial asset have occurred. Evidences that a financial
asset is credit-impaired include observable data about the following events:
Significant financial difficulty of the issuer or the borrower；a breach of contract such as a default
or past due event; the lender(s) of the borrower for economic or contractual reasons relating to the
borrower’s financial difficulty having granted to the borrower a concession(s) that the lender(s)
would not otherwise consider；it is becoming probable that the borrower will enter bankruptcy or
other financial reorganisation;the disappearance of an active market for that financial asset because
of financial difficulties；the purchase or origination of a financial asset at a deep discount that
reflects the incurred credit losses.(v) Presentation of impairment of expected credit loss
In order to reflect the changes of credit risk of financial instrument since initial recognition the
Company shall at each reporting date remeasure the expected credit loss and recognise in profit or
loss as an impairment gain or loss the amount of expected credit losses addition (or reversal). For
financial asset at amortised cost the loss allowance shall reduce the carrying amount of the financial
asset in the statement of financial position; for debt investment at fair value through other
comprehensive income the loss allowance shall be recognised in other comprehensive income and
shall not reduce the carrying amount of the financial asset in the statement of financial position.(vi) Write-off
The Company shall directly reduce the gross carrying amount of a financial asset when the
Company has no reasonable expectations of recovering the contractual cash flow of a financial asset
in its entirety or a portion thereof. Such write-off constitutes a derecognition of the financial asset.This circumstance usually occurs when the Company determines that the debtor has no assets or
sources of income that could generate sufficient cash flow to repay the write-off amount.Recovery of financial asset written off shall be recognised in profit or loss as reversal of impairment
loss.(f) Transfer of financial assets
Transfer of financial assets refers to following two situations:
Transfers the contractual rights to receive the cash flows of the financial asset;
Transfers the entire or a part of a financial asset and retains the contractual rights to receive the cash flows of
the financial asset but assumes a contractual obligation to pay the cash flows to one or more recipients.(i) Derecognition of transferred assets
If the Company transfers substantially all the risks and rewards of ownership of the financial asset
~ 140 ~Annual Report 2023
or neither transfers nor retains substantially all the risks and rewards of ownership of the financial
asset but has not retained control of the financial asset the financial asset shall be derecognised.Whether the Company has retained control of the transferred asset depends on the transferee’s
ability to sell the asset. If the transferee has the practical ability to sell the asset in its entirety to an
unrelated third party and is able to exercise that ability unilaterally and without needing to impose
additional restrictions on the transfer the Company has not retained control.The Company judges whether the transfer of financial asset qualifies for derecognition based on the
substance of the transfer.If the transfer of financial asset qualifies for derecognition in its entirety the difference between the
following shall be recognised in profit or loss:
The carrying amount of transferred financial asset;
The sum of consideration received and the part derecognised of the cumulative changes in fair value
previously recognised in other comprehensive income (The financial assets involved in the transfer are
classified as financial assets at fair value through other comprehensive income in accordance with Article 18
of the Accounting Standards for Business Enterprises - Recognition and Measurement of Financial
Instruments).If the transferred asset is a part of a larger financial asset and the part transferred qualifies for
derecognition the previous carrying amount of the larger financial asset shall be allocated between
the part that continues to be recognised (For this purpose a retained servicing asset shall be treated
as a part that continues to be recognised) and the part that is derecognised based on the relative fair
values of those parts on the date of the transfer. The difference between following two amounts shall
be recognised in profit or loss:
The carrying amount (measured at the date of derecognition) allocated to the part derecognised；
The sum of the consideration received for the part derecognised and part derecognised of the cumulative
changes in fair value previously recognised in other comprehensive income (The financial assets involved in
the transfer are classified as financial assets at fair value through other comprehensive income in accordance
with Article 18 of the Accounting Standards for Business Enterprises - 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
~ 141 ~Annual Report 2023
it is exposed to changes in the value of the transferred asset
(iii) Continue to recognise the transferred assets
If the Company retains substantially all the risks and rewards of ownership of the transferred
financial asset the Company shall continue to recognise the transferred asset in its entirety and the
consideration received shall be recognised as a financial liability.The financial asset and the associated financial liability shall not be offset. In subsequent
accounting period the Company shall continuously recognise any income (gain) arising from the
transferred asset and any expense (loss) incurred on the associated liability.(g) Offsetting financial assets and financial liabilities
Financial assets and financial liabilities shall be presented separately in the statement of financial
position and shall not be offset. When meets the following conditions financial assets and financial
liabilities shall be offset and the net amount presented in the statement of financial position:
The Company currently has a legally enforceable right to set off the recognised amounts; The
Company intends either to settle on a net basis or to realise the asset and settle the liability
simultaneously.In accounting for a transfer of a financial asset that does not qualify for derecognition the Company
shall not offset the transferred asset and the associated liability.(h) Determination of fair value of financial instruments
Determination of fair value of financial assets and financial liabilities please refer to Note 3.11.
3.11 Fair Value Measurement
Fair value refers to the price that would be received to sell an asset or paid to transfer a liability in
an orderly transaction between market participants at the measurement date.The Company determines fair value of the related assets and liabilities based on market value in the
principal market or in the absence of a principal market in the most advantageous market price for
the related asset or liability. The fair value of an asset or a liability is measured using the
assumptions that market participants would use when pricing the asset or liability assuming that
market participants act in their economic best interest.The principal market is the market in which transactions for an asset or liability take place with the
greatest volume and frequency. The most advantageous market is the market which maximizes the
value that could be received from selling the asset and minimizes the value which is needed to be
paid in order to transfer a liability considering the effect of transport costs and transaction costs
both.If the active market of the financial asset or financial liability exists the Company shall measure the
~ 142 ~Annual Report 2023
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.(i) Valuation techniques
The Company uses valuation techniques that are appropriate in the circumstances and for which
sufficient data are available to measure fair value including the market approach the income
approach and the cost approach. The Company shall use valuation techniques consistent with one or
more of those approaches to measure fair value. If multiple valuation techniques are used to
measure fair value the results shall be evaluated considering the reasonableness of the range of
values indicated by those results. A fair value measurement is the point within that range that is
most representative of fair value in the circumstances.When using the valuation technique the Company shall give the priority to relevant observable
inputs. The unobservable inputs can only be used when relevant observable inputs is not available
or practically would not be obtained. Observable inputs refer to the information which is available
from market and reflects the assumptions that market participants would use when pricing the asset
or liability. Unobservable Inputs refer to the information which is not available from market and it
has to be developed using the best information available in the circumstances from the assumptions
that market participants would use when pricing the asset or liability.(ii) Fair value hierarchy
To Company establishes a fair value hierarchy that categorises into three levels the inputs to
valuation techniques used to measure fair value. The fair value hierarchy gives the highest priority
to Level 1 inputs and second to the Level 2 inputs and the lowest priority to Level 3 inputs. Level 1
inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the
entity can access at the measurement date. Level 2 inputs are inputs other than quoted prices
included within Level 1 that are observable for the asset or liability either directly or indirectly.Level 3 inputs are unobservable inputs for the asset or liability.
3.12 Inventories
(a) Classification of inventories
Inventories are finished goods or products held for sale in the ordinary course of business in the
process of production for such sale or in the form of materials or supplies to be consumed in the
production process or in the rendering of services including raw materials work in progress
semi-finished goods finished goods goods in stock turnover material etc.~ 143 ~Annual Report 2023
(b) Measurement method of cost of inventories sold or used
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. The cost of inventories used or sold
is determined on the weighted average basis.(c) Inventory system
The perpetual inventory system is adopted. The inventories should be counted at least once a year
and surplus or losses of inventory stocktaking shall be included in current profit and loss.(d) Recognition Criteria and Provision for impairment of inventory
Inventories are stated at the lower of cost and net realizable value. The excess of cost over net
realizable value of the inventories is recognised as provision for impairment of inventory and
recognised in current profit or loss.Net realizable value of the inventory should be determined on the basis of reliable evidence
obtained and factors such as purpose of holding the inventory and impact of post balance sheet
event shall be considered.(i) In normal operation process finished goods products and materials for direct sale their net
realizable values are determined at estimated selling prices less estimated selling expenses and
relevant taxes and surcharges; for inventories held to execute sales contract or service contract their
net realizable values are calculated on the basis of contract price. If the quantities of inventories
specified in sales contracts are less than the quantities held by the Company the net realizable value
of the excess portion of inventories shall be based on general selling prices. Net realizable value of
materials held for sale shall be measured based on market price.(ii) For materials in stock need to be processed in the ordinary course of production and business
net realisable value is determined at the estimated selling price less the estimated costs of
completion the estimated selling expenses and relevant taxes. If the net realisable value of the
finished products produced by such materials is higher than the cost the materials shall be
measured at cost; if a decline in the price of materials indicates that the cost of the finished products
exceeds its net realisable value the materials are measured at net realisable value and differences
shall be recognised at the provision for impairment.(iii) Provisions for inventory impairment are generally determined on an individual basis. For
inventories with large quantity and low unit price the provisions for inventory impairment are
determined on group basis.(iv) If any factor rendering write-downs of the inventories has been eliminated at the reporting
date the amounts written down are recovered and reversed to the extent of the inventory
impairment which has been provided for. The reversal shall be included in profit or loss.~ 144 ~Annual Report 2023
(e) Amortisation method of low-value consumables
Low-value consumables: One-off writing off method is adopted.Package material: One-off writing off method is adopted.
3.13 Contract Assets and Contract Liabilities
The Company shall present contract assets or contract liabilities in the statement of financial
position depending on the relationship between the Company’s satisfying a performance obligation
and the customer’s payment. A contract asset shall be presented if the Company has the right to
consideration in exchange for goods or services that the Company has transferred to a customer
when that right is conditioned on something other than the passage of time. A contract liability shall
be presented if the Company has the obligation to transfer goods or services to a customer for which
the Company has received consideration (or the amount is due) from the customer.Method of determination and accounting for expected credit loss for contract assets please refer to
Note 3.10.Contract assets and contract liabilities shall be presented separately in the statement of financial
position. The contract asset and contract liability for the same contract shall be presented on a net
basis. A net balance shall be listed in the item of "Contract assets" or "Other non-current assets"
according to its liquidity; a credit balance shall be listed in the item of "Contract liabilities" or
"Other non-current liabilities" according to its liquidity. Contract assets and contract liabilities for
different contracts cannot be offset.
3.14 Contract costs
Contract costs include costs to fulfill a contract and the costs to obtain a contract.The Company shall recognise an asset from the costs incurred to fulfill a contract only if those costs
meet all of the following criteria:
(i) The costs relate directly to a contract or to an anticipated contract including: direct labour
direct materials manufacturing costs (or similar costs) costs that are explicitly chargeable to the
customer under the contract and other costs that are incurred only because an entity entered into the
contract;
(ii) The costs enhance resources of the Company that will be used in satisfying performance
obligations in the future; and
(iii) The costs are expected to be recovered.The incremental costs of obtaining a contract shall be recognised as an asset if the Company expects
to recover them.~ 145 ~Annual Report 2023
An asset related to contract costs shall be amortised on a systematic basis that is consistent with the
revenue recognition of the goods or services to which the asset relates. The Company recognises the
contract acquisition costs as an expense when incurred if the amortisation period of the asset that
the Company otherwise would have recognised is one year or less.The Company shall accrue the provision for impairment recognise an impairment loss in profit or
loss to the extent that the carrying amount of an asset related to the contract cost exceeds the
difference of below two items and further consider whether the estimated liability related to the
onerous contract needs to be accrued:
(i) The remaining amount of consideration that the Company expects to receive 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.The Company shall recognise in profit or loss a reversal of some or all of an impairment loss
previously recognised when the impairment conditions no longer exist or have improved. The
increased carrying amount of the asset shall not exceed the amount that would have been
determined (net of amortisation) if no impairment loss had been recognised previously.Providing that the costs to fulfil a contract satisfy the requirement to be recognised as an asset the
Company shall present them in the account “Inventory” if the contract has an original expectedduration of one year (or a normal operating cycle) or less or in the account “Other non-currentassets” if the contract has an original expected duration of more than one year (or a normal
operating cycle).Providing that the costs to obtain a contract satisfy the requirement to be recgonised as an asset the
Company shall present them in the account “Other current asset” if the contract has an originalexpected duration of one year (or a normal operating cycle) or less or in the account “Othernon-current assets” if the contract has an original expected duration of more than one year (or a
normal operating cycle).
3.15 Long-term Equity Investments
Long-term equity investments refer to equity investments where an investor has control of or
significant influence over an investee as well as equity investments in joint ventures. Associates of
the Company are those entities over which the Company has significant influence.(a) Determination basis of joint control or significant influence over the investee
Joint control is the relevant agreed sharing of control over an arrangement and the arranged
relevant activity must be decided under unanimous consent of the parties sharing control. In
~ 146 ~Annual Report 2023
assessing whether the Company has joint control of an arrangement the Company shall assess first
whether all the parties or a group of the parties control the arrangement. When all the parties or a
group of the parties considered collectively are able to direct the activities of the arrangement the
parties control the arrangement collectively. Then the Company shall assess whether decisions
about the relevant activities require the unanimous consent of the parties that collectively control
the arrangement. If two or more groups of the parties could control the arrangement collectively it
shall not be assessed as have joint control of the arrangement. When assessing the joint control the
protective rights are not considered.Significant influence is the power to participate in the financial and operating policy decisions of
the investee but is not control or joint control of those policies. In determination of significant
influence over an investee the Company should consider not only the existing voting rights directly
or indirectly held but also the effect of potential voting rights held by the Company and other
entities that could be currently exercised or converted including the effect of share warrants share
options and convertible corporate bonds that issued by the investee and could be converted in
current period.If the Company holds directly or indirectly 20% or more but less than 50% of the voting power of
the investee it is presumed that the Company has significant influence of the investee unless it can
be clearly demonstrated that in such circumstance the Company cannot participate in the
decision-making in the production and operating of the investee.(b) Determination of initial investment cost
(i) Long-term equity investments generated in business combinations
For a business combination involving enterprises under common control if the Company makes
payment in cash transfers non-cash assets or bears liabilities as the consideration for the business
combination the share of carrying amount of the owners’ equity of the acquiree in the consolidated
financial statements of the ultimate controlling party is recognised as the initial cost of the
long-term equity investment on the combination date. The difference between the initial investment
cost and the carrying amount of cash paid non-cash assets transferred and liabilities assumed shall
be adjusted against the capital reserve; if capital reserve is not enough to be offset undistributed
profit shall be offset in turn.For a business combination involving enterprises under common control if the Company issues
equity securities as the consideration for the business combination the share of carrying amount of
the owners’ equity of the acquiree in the consolidated financial statements of the ultimate
controlling party is recognised as the initial cost of the long-term equity investment on the
combination date. The total par value of the shares issued is recognised as the share capital. The
difference between the initial investment cost and the carrying amount of the total par value of the
shares issued shall be adjusted against the capital reserve; if capital reserve is not enough to be
~ 147 ~Annual Report 2023
offset undistributed profit shall be offset in turn.For business combination not under common control the assets paid liabilities incurred or assumed
and the fair value of equity securities issued to obtain the control of the acquiree at the acquisition
date shall be determined as the cost of the business combination and recognised as the initial cost of
the long-term equity investment. The audit legal valuation and advisory fees other intermediary
fees and other relevant general administrative costs incurred for the business combination shall be
recognised in profit or loss as incurred.(ii) Long-term equity investments acquired not through the business combination the investment
cost shall be determined based on the following requirements:
For long-term equity investments acquired by payments in cash the initial cost is the actually paid
purchase cost including the expenses taxes and other necessary expenditures directly related to the
acquisition of long-term equity investments.For long-term equity investments acquired through issuance of equity securities the initial cost is
the fair value of the issued equity securities.For the long-term equity investments obtained through exchange of non-monetary assets if the
exchange has commercial substance and the fair values of assets traded out and traded in can be
measured reliably the initial cost of long-term equity investment traded in with non-monetary
assets are determined based on the fair values of the assets traded out together with relevant taxes.Difference between fair value and book value of the assets traded out is recorded in current profit or
loss. If the exchange of non-monetary assets does not meet the above criterion the book value of
the assets traded out and relevant taxes are recognised as the initial investment cost.For long-term equity investment acquired through debt restructuring the initial cost is determined
based on the fair value of the equity obtained and the difference between initial investment cost and
carrying amount of debts shall be recorded in current profit or loss.(c) Subsequent measurement and recognition of profit or loss
Long-term equity investment to an entity over which the Company has ability of control shall be
accounted for at cost method. Long-term equity investment to a joint venture or an associate shall
be accounted for at equity method.(i) Cost method
For Long-term equity investment at cost method cost of the long-term equity investment shall be
adjusted when additional amount is invested or a part of it is withdrawn. The Company recognises
its share of cash dividends or profits which have been declared to distribute by the investee as
current investment income.(ii) Equity method
~ 148 ~Annual Report 2023
If the initial cost of the investment is in excess of the share of the fair value of the net identifiable
assets in the investee at the date of investment the difference shall not be adjusted to the initial cost
of long-term equity investment; if the initial cost of the investment is in short of the share of the fair
value of the net identifiable assets in the investee at the date investment the difference shall be
included in the current profit or loss and the initial cost of the long-term equity investment shall be
adjusted accordingly.The Company recognises the share of the investee’s net profits or losses as well as its share of the
investee’s other comprehensive income as investment income or losses and other comprehensive
income respectively and adjusts the carrying amount of the investment accordingly. The carrying
amount of the investment shall be reduced by the share of any profit or cash dividends declared to
distribute by the investee. The investor’s share of the investee’s owners’ equity changes other than
those arising from the investee’s net profit or loss other comprehensive income or profit
distribution shall be recognised in the investor’s equity and the carrying amount of the long-term
equity investment shall be adjusted accordingly. The Company recognises its share of the investee’s
net profits or losses after making appropriate adjustments of investee’s net profit based on the fair
values of the investee’s identifiable net assets at the investment date. If the accounting policy and
accounting period adopted by the investee is not in consistency with the Company the financial
statements of the investee shall be adjusted according to the Company’s accounting policies and
accounting period based on which investment income or loss and other comprehensive income
etc. shall be adjusted. The unrealized profits or losses resulting from inter-company transactions
between the company and its associate or joint venture are eliminated in proportion to the
company’s equity interest in the investee based on which investment income or losses shall be
recognised. Any losses resulting from inter-company transactions between the investor and the
investee which belong to asset impairment shall be recognised in full.Where the Company obtains the power of joint control or significant influence but not control over
the investee due to additional investment or other reason the relevant long-term equity investment
shall be accounted for by 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 investment difference between its fair value and the carrying value in addition to the
cumulative changes in fair value previously recorded in other comprehensive income shall be
recogised into retained earnings of the period of using equity method.If the Company loses the joint control or significant influence of the investee for some reasons such
as disposal of equity investment the retained interest shall be measured at fair value and the
difference between the carrying amount and the fair value at the date of loss the joint control or
significant influence shall be recognised in profit or loss. When the Company discontinues the use
of the equity method the Company shall account for all amounts previously recognised in other
comprehensive income under equity method in relation to that investment on the same basis as
~ 149 ~Annual Report 2023
would have been required if the investee had directly disposed of the related assets or liabilities.(d) Equity investment classified as held for sale
Any retained interest in the equity investment not classified as held for sale shall be accounted for
using equity method.When an equity investment in an associate or a joint venture previously classified as held for sale
no longer meets the criteria to be so classified it shall be accounted for using the equity method
retrospectively as from the date of its classification as held for sale. Financial statements for the
periods since classification as held for sale shall be amended accordingly.(f) Impairment testing and provision for impairment loss
For investment in subsidiaries associates or a joint ventures provision for impairment loss please
refer to Note 3.22.
3.16 Investment Properties
(a) Classification of investment properties
Investment properties are properties to earn rentals or for capital appreciation or both including:
(i) Land use right leased out
(ii) Land held for transfer upon appreciation
(iii) Buildings leased out
(b) The measurement model of investment property
The Company adopts the cost model for subsequent measurement of investment properties. For
provision for impairment please refer to Note 3.22.The Company calculates the depreciation or amortisation based on the net amount of investment
property cost less the accumulated impairment and the net residual value using straight-line method.The estimated useful life and annual depreciation rates which are determined according to the
categories estimated economic useful lives and estimated net residual rates are listed as followings:
Estimated useful life
Category Residual rates (%) Annual depreciation rates (%)
(year)
Buildings and constructions 10.00-30.00 3.00-5.00 3.17-9.70
Land use right 40.00-50.00 0.00 2.00-2.50
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.(a) Recognition criteria of fixed assets
~ 150 ~Annual Report 2023
Fixed assets will only be recognised at the actual cost paid when obtaining as all the following
criteria are satisfied:
(i) It is probable that the economic benefits relating to the fixed assets will flow into the Company;
(ii) The costs of the fixed assets can be measured reliably.Subsequent expenditure for fixed assets shall be recorded in cost of fixed assets if recognition
criteria of fixed assets are satisfied otherwise the expenditure shall be recorded in current profit or
loss when incurred.(b) Depreciation methods of fixed assets
The Company begins to depreciate the fixed asset from the next month after it is available for
intended use using the straight-line-method. The estimated useful life and annual depreciation rates
which are determined according to the categories estimated economic useful lives and estimated
net residual rates of fixed assets are listed as followings:
Depreciation Estimated useful Annual depreciation
Category Residual rates (%)
method life (year) rates (%)
Buildings and constructions straight-line-method 8.00-35.00 3.00-5.00 2.71-12.13
Machinery equipment straight-line-method 8.00-10.00 3.00-5.00 9.50-12.13
Transportation vehicles straight-line-method 4.00 3.00 24.25
Administrative and other
straight-line-method 3.00 3.00 32.33
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.
3.18 Construction in Progress
(a) Classification of construction in progress
Construction in progress is measured on an individual project basis.(b) Recognition criteria and timing of transfer from construction in progress to fixed assets
The initial book values of the fixed assets are stated at total expenditures incurred before they are
ready for their intended use including construction costs original price of machinery equipment
other necessary expenses incurred to bring the construction in progress to get ready for its intended
use and borrowing costs of the specific loan for the construction or the proportion of the general
loan used for the constructions incurred before they are ready for their intended use. The
~ 151 ~Annual Report 2023
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.The specific criteria and timing of transfer to fixed assets for the Company’s different categories of
construction in progress items:
category The specific criteria and timing of transfer to fixed assets
(i) The main construction project and supporting projects have been
substantially completed;
(ii) After the construction project meets the predetermined design requirements it shall be
inspected and accepted by the survey design construction supervision and other units and
Houses and buildings
inspected and accepted by the local construction authorities and other relevant units;
(iii) If the construction project has reached the predetermined serviceability state but has not
yet completed the final accounts it shall be transferred to the fixed assets at the estimated
value according to the actual cost of the project from the date of reaching the predetermined
serviceability state.(i) Relevant equipment and other supporting facilities have been installed;
(ii) After debugging the equipment can maintain normal and stable operation for a period of
Equipment to be installed and time and the production equipment can produce qualified products stably in a period of time;
debugged (iii) The equipment management department shall conduct joint inspection with the asset use
department safety management Department emergency Department environmental
Protection Department and other departments.
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
~ 152 ~Annual Report 2023
(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 accordance the principle described in this
paragraph.
3.20 Borrowing costs
(a) Recognition criteria and period for capitalization of borrowing costs
The Company shall capitalize the borrowing costs that are directly attributable to the acquisition
construction or production of qualifying assets when meet the following conditions:
(i) Expenditures for the asset are being incurred;
(ii) Borrowing costs are being incurred and;
(iii) Acquisition construction or production activities that are necessary to prepare the assets for
their intended use or sale are in progress.Other borrowing cost discounts or premiums on borrowings and exchange differences on foreign
currency borrowings shall be recognized into current profit or loss when incurred.Capitalization of borrowing costs is suspended during periods in which the acquisition construction
or production of a qualifying asset is interrupted abnormally and the interruption is for a continuous
period of more than 3 months.Capitalization of such borrowing costs ceases when the qualifying assets being acquired
constructed or produced become ready for their intended use or sale. The expenditure incurred
subsequently shall be recognised as expenses when incurred.(b) Capitalization rate and measurement of capitalized amounts of borrowing costs
When funds are borrowed specifically for purchase construction or manufacturing of assets eligible
for capitalization the Company shall determine the amount of borrowing costs eligible for
capitalisation as the actual borrowing costs incurred on that borrowing during the period less any
interest income on bank deposit or investment income on the temporary investment of those
borrowings.Where funds allocated for purchase construction or manufacturing of assets eligible for
~ 153 ~Annual Report 2023
capitalization are part of a general borrowing the eligible amounts are determined by the
weighted-average of the cumulative capital expenditures in excess of the specific borrowing
multiplied by the general borrowing capitalization rate. The capitalisation rate will be the weighted
average of the borrowing costs applicable to the general borrowing.
3.21 Intangible Assets
(a) Measurement method of intangible assets
Intangible assets are recognised at actual cost at acquisition.(b) The useful life and amortisation of intangible assets
(i) The estimated useful lives of the intangible assets with finite useful lives are as follows:
Category Estimated useful life Basis
Land use right 40-50 years Legal life
The service life is determined by reference to the period that
Patents 10 years
can bring economic benefits to the Company
The service life is determined by reference to the period that
Software 3-5 years
can bring economic benefits to the Company
The service life is determined by reference to the period that
Trademarks 10 years
can bring economic benefits to the Company
For intangible assets with finite useful life the estimated useful life and amortisation method are
reviewed annually at the end of each reporting period and adjusted when necessary. No change has
incurred in current year in the estimated useful life and amortisation method upon review.(ii) Assets of which the period to bring economic benefits to the Company are unforeseeable are
regarded as intangible assets with indefinite useful lives. The Company reassesses the useful
lives of those assets at every year end. If the useful lives of those assets are still indefinite
impairment test should be performed on those assets at the balance sheet date.(iii) Amortisation of the intangible assets
For intangible assets with finite useful lives their useful lives should be determined upon
their acquisition and systematically amortised on a straight-line basis [units of production
method] over the useful life. The amortisation amount shall be recognised into current profit
or loss according to the beneficial items. The amount to be amortised is cost deducting residual
value. For intangible assets which has impaired the cumulative impairment provision shall be
deducted as well. The residual value of an intangible asset with a finite useful life shall be
assumed to be zero unless: there is a commitment by a third party to purchase the asset at the
end of its useful life; or there is an active market for the asset and residual value can be
determined by reference to that market; and it is probable that such a market will exist at the
end of the asset’s useful life.Intangible assets with indefinite useful lives shall not be amortised. The Company reassesses
the useful lives of those assets at every year end. If there is evidence to indicate that the
useful lives of those assets become finite the useful lives shall be estimated and the intangible
~ 154 ~Annual Report 2023
assets shall be amortised systematically and reasonably within the estimated useful lives.(c) Scope of Research and Development Expenditures
The Company classifies the expenses directly related to research and development activities as
research and development expenditures including remuneration of research and development staff
direct material depreciation cost and long-term amortised expense design fee equipment
commissioning fee intangible assets amortisation cost outsourcing research and development
cost and other expenses etc.(d) Criteria of classifying expenditures on internal research and development projects into
research phase and development phase
Preparation activities related to materials and other relevant aspects undertaken by the Company
for the purpose of further development shall be treated as research phase. Expenditures incurred
during the research phase of internal research and development projects shall be recognised in
profit or loss when incurred.Development activities after the research phase of the Company shall be treated as development
phase.(e) Criteria for capitalization of qualifying expenditures during the development phase
Expenditures arising from development phase on internal research and development projects shall
be recognised as intangible assets only if all of the following conditions have been met:
(i) Technical feasibility of completing the intangible assets so that they will be available
for use or sale;
(ii) Its intention to complete the intangible asset and use or sell it;
(iii) The method that the intangible assets generate economic benefits including the Company
can demonstrate the existence of a market for the output of the intangible assets or the intangible
assets themselves or if it is to be used internally the usefulness of the intangible assets;
(iv) The availability of adequate technical financial and other resources to complete the
development and to use or sell the intangible asset; and
(v) Its ability to measure reliably the expenditure attributable to the intangible asset.
3.22 Impairment of Long-Term Assets
Impairment loss of long-term equity investment in subsidiaries associates and joint ventures
investment properties fixed assets 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
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.~ 155 ~Annual Report 2023
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 a 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 the recoverable amount shall be then
calculated and the impairment loss shall be recognised accordingly. Then the group of assets
or combination of asset groups including goodwill shall be tested for impairment by comparing
the carrying amount with its recoverable amount. If the recoverable amount is less than the
carrying amount the Company shall recognise the impairment loss.The mentioned impairment loss will not be reversed in subsequent accounting period once it had
been recognised.
3.23 Long-term Deferred Expenses
Long-term deferred expenses are various expenses already incurred which shall be amortised over
current and subsequent periods with the amortisation period exceeding one year.
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”.(a) Short-term employee benefits
(i) Employee basic salary (salary bonus allowance subsidy)
The Company recognises in the accounting period in which an employee provides service actually
~ 156 ~Annual Report 2023
occurred short-term employee benefits as a liability with a corresponding charge to current profit
except for those recognised as capital expenditure based on the requirement of accounting
standards.(ii) Employee welfare
The Company shall recognise the employee welfare based on actual amount when incurred into
current profit or loss or related capital expenditure. Employee welfare shall be measured at fair
value as it is a non-monetary benefits.(iii) Social insurance such as medical insurance work injury insurance and maternity insurance
housing funds labor union fund and employee education fund
Payments made by the Company of social insurance for employees such as medical insurance
work injury insurance and maternity 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.(iv) Short-term paid absences
The company shall recognise the related employee benefits arising from accumulating paid
absences when the employees render service that increases their entitlement to future paid absences.The additional payable amounts shall be measured at the expected additional payments as a result of
the unused entitlement that has accumulated. The Company shall recognise relevant employee
benefit of non-accumulating paid absences when the absences actually occurred.(v)Short-term profit-sharing plan
The Company shall recognise the related employee benefits payable under a profit-sharing plan
when all of the following conditions are satisfied:
The Company has a present legal or constructive obligation to make such payments as a result of past
events; and
A reliable estimate of the amounts of employee benefits obligation arising from the profit- sharing plan
can be made.(b) Post-employment benefits
(i) Defined contribution plans
The Company shall recognise in the accounting period in which an employee provides service the
contribution payable to a defined contribution plan as a liability with a corresponding charge to the
current profit or loss or the cost of a relevant asset.When contributions to a defined contribution plan are not expected to be settled wholly before
~ 157 ~Annual Report 2023
twelve months after the end of the annual reporting period in which the employees render the
related service they shall be discounted using relevant discount rate (market yields at the end of the
reporting period on high quality corporate bonds in active market or government bonds with the
currency and term which shall be consistent with the currency and estimated term of the defined
contribution obligations) to measure employee benefits payable.(ii) Defined benefit plan
The present value of defined benefit obligation and current service costs
Based on the expected accumulative welfare unit method the Company shall make estimates about
demographic variables and financial variables in adopting the unbiased and consistent actuarial
assumptions and measure defined benefit obligation and determine the obligation period. The
Company shall discount the obligation arising from defined benefit plan using relevant discount rate
(market yields at the end of the reporting period on high quality corporate bonds in active market or
government bonds with the currency and term which shall be consistent with the currency and
estimated term of the defined benefit obligations) in order to determine the present value of the
defined benefit obligation and the current service cost.The net defined benefit liability or asset
The net defined benefit liability (asset) is the deficit or surplus recognised as the present value of
the defined benefit obligation less the fair value of plan assets (if any).When the Company has a surplus in a defined benefit plan it shall measure the net defined benefit
asset at the lower of the surplus in the defined benefit plan and the asset ceiling.The amount recognised in the cost of asset or current profit or loss
Service cost comprises current service cost past service cost and any gain or loss on settlement.Other service cost shall be recognised in profit or loss unless accounting standards require or allow
the inclusion of current service cost within the cost of assets.Net interest on the net defined benefit liability (asset) comprising interest income on plan assets
interest cost on the defined benefit obligation and interest on the effect of the asset ceiling shall be
included in profit or loss.The amount recognised in other comprehensive income
Changes in the net liability or asset of the defined benefit plan resulting from the remeasurements
including:
Actuarial gains and losses the changes in the present value of the defined benefit obligation resulting
from experience adjustments or the effects of changes in actuarial assumptions;
Return on plan assets excluding amounts included in net interest on the net defined benefit liability or
asset;
~ 158 ~Annual Report 2023
Any change in the effect of the asset ceiling excluding amounts included in net interest on the net defined
benefit liability (asset).Remeasurements of the net defined benefit liability (asset) recognised in other comprehensive
income shall not be reclassified to profit or loss in a subsequent period. However the Company
may transfer those amounts recognised in other comprehensive income within equity.(c) Termination benefits
The Company providing termination benefits to employees shall recognise an employee benefits
liability for termination benefits with a corresponding charge to the profit or loss of the reporting
period at the earlier of the following dates:
(i) When the Company cannot unilaterally withdraw the offer of termination benefits because of
an employment termination plan or a curtailment proposal.(ii) When the Company recognises costs or expenses related to a restructuring that involves the
payment of termination benefits.If the termination benefits are not expected to be settled wholly before twelve months after the end
of the annual reporting period the Company shall discount the termination benefits using relevant
discount rate (market yields at the end of the reporting period on high quality corporate bonds in
active market or government bonds with the currency and term which shall be consistent with the
currency and estimated term of the defined benefit obligations) to measure the employee benefits.(d) Other long-term employee benefits
(i) Meet the conditions of the defined contribution plan
When other long-term employee benefits provided by the Company to the employees satisfies the
conditions for classifying as a defined contribution plan all those benefits payable shall be
accounted for as employee benefits payable at their discounted value.(ii) Meet the conditions of the defined benefit plan
At the end of the reporting period the Company recognised the cost of employee benefit from other
long-term employee benefits as the following components:
Service costs;
Net interest cost for net liability or asset of other long-term employee benefits
Changes resulting from the remeasurements of the net liability or asset of other long-term employee benefits
In order to simplify the accounting treatment the net amount of above items shall be recognised in
profit or loss or relevant cost of assets.
3.25 Lease liabilities
~ 159 ~Annual Report 2023
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
(a) 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.(b) 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 estimate of the
provision the carrying amount shall be adjusted based on the updated best estimate.
3.27 Revenue
(a) General Principle
~ 160 ~Annual Report 2023
Revenue is defined as the gross inflow of economic benefits arising in the course of the ordinary
activities of the Company when those inflows result in the increases in shareholders’ equity other
than increases relating to contributions from shareholders.The Company shall recognise revenue when it satisfies a performance obligation in the contract as
the customer obtains control of a good or service. Control of a good or service refers to the ability to
direct the use of and obtain substantially all of the remaining economic benefits from the good or
service.When the contract has two or more obligation performances the Company shall allocate the
transaction price to each performance obligation in proportion to a relative stand-alone selling price
at contract inception of the promised good or service underlying each performance obligation in the
contract and recognize revenue based on the transaction price allocated to each performance
obligation.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. When determining the transaction price of the contract if the contract
includes a variable consideration the Company shall determine the best estimate of the variable
consideration based on the expected value or the most likely amount and include in the transaction
price only 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. If the contract contains a significant financing component
the Company shall determine the transaction price 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. The difference between the
transaction price and the promised consideration shall be amortised using the effective interest
method within the contract period. The Company need not consider the effects of a significant
financing component if the period between when the Company transfers control of a good or
service to a customer and when the customer pays for that good or service will be one year or less.The Company satisfies a performance obligation over time if one of the following criteria is met;
otherwise a performance obligation is satisfied at a point in time:
(i) The customer simultaneously receives and consumes the benefits provided by the Company’s
performance as the Company performs;
(ii) The Company’s performance creates or enhances an asset (for example work in progress) that
the customer controls as the asset is created or enhanced;
(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.~ 161 ~Annual Report 2023
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 unless
those progress cannot be reasonably measured. The Company measures the progress of a
performance obligation for the service rendered using input methods (or output methods). In some
circumstances the Company cannot be able to reasonably measure the progress of a performance
obligation but the Company expects to recover the costs incurred in satisfying the performance
obligation. In those circumstances the Company shall recognise revenue only to the extent of the
costs incurred until such time that it can reasonably measure the progress of the performance
obligation.The Company shall recognise revenue at the point in which a customer obtains control of a
promised good or service if a performance obligation is satisfied at a point in time. To determine the
point in time at which a customer obtains control of a promised good or service the Company shall
consider indicators of the transfer of control which include but are not limited to the followings:
(i) The Company has a present right to payment for the good or service – a customer is presently
obliged to pay for the good or service;
(ii) The Company has transferred legal title of an asset to a customer - the customer has legal title to
the asset;
(iii) The Company has transferred physical possession of an asset to a customer - the customer has
physical possession of the asset;
(iv) The Company has transferred the significant risks and rewards of ownership of the asset to a
customer - the customer has the significant risks and rewards of ownership of the asset;
(v) The customer has accepted the asset.(VI) Other indication that the customer has obtained control over the asset.(b) Specific Method
Revenue recognition methods of the Company are as follows:
(i) Contract of 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 consideration will be received; the significant risks
~ 162 ~Annual Report 2023
and rewards of ownership of the asset has been transferred; legal title of the asset has been
transferred.(ii) Contract of rendering services
The customer simultaneously receives and consumes the benefits provided by the Company’s
performance as the Company performs，Company satisfies a performance obligation by renderingof 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
(iii) Revenue from usage of assets
Revenue from usage of the Group’s assets is recognised if the revenue can be reliably 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
(a) Recognition of government grants
A government grant shall not be recgonised until there is reasonable assurance that:
(i) The Company will comply with the conditions attaching to them; and
(ii) The grants will be received.(b) Measurement of government grants
Monetary grants from the government shall be measured at amount received or receivable and
non-monetary grants from the government shall be measured at their fair value or at a nominal
value of RMB 1.00 when reliable fair value is not available.~ 163 ~Annual Report 2023
(c) Accounting for government grants
(i) Government grants related to assets
Government grants pertinent to assets mean the government grants that are obtained by the
Company used for purchase or construction or forming the long-term assets by other ways.Government grants pertinent to assets shall be recognised as deferred income and should be
recognised in profit or loss on a systematic basis over the useful lives of the relevant assets. Grants
measured at their nominal value shall be directly recognised in profit or loss of the period when the
grants are received. When the relevant assets are sold transferred written off or damaged before the
assets are terminated the remaining deferred income shall be transferred into profit or loss of the
period of disposing relevant assets.(ii) Government grants related to income
Government grants other than related to assets are classified as government grants related to income.Government grants related to income are accounted for in accordance with the following principles:
If the government grants related to income are used to compensate the enterprise’s relevant
expenses or losses in future periods such government grants shall be recognised as deferred income
and included into profit or loss (or write down related expenses) 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 (or write down related expenses).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 (or write
down related expenses) in accordance with the nature of the activities and government grants
irrelevant to daily operation activities are recognised in non-operating income.(iii) Loan interest subsidy
When loan interest subsidy is allocated to the bank and the bank provides a loan at lower-market
rate of interest to the Company the loan is recognised at the actual received amount and the interest
expense is calculated based on the principal of the loan and the lower-market rate of interest.When loan interest subsidy is directly allocated to the Company the subsidy shall be recognised as
offsetting the relevant borrowing cost.(iv) Repayment of the government grants
~ 164 ~Annual Report 2023
Repayment of the government grants shall be recorded by increasing the carrying amount of the
asset if the book value of the asset has been written down or reducing the balance of relevant
deferred income if deferred income balance exists any excess will be recognised into current profit
or loss; or directly recognised into current profit or loss for other circumstances.
3.29 Deferred Tax Assets and Deferred Tax Liabilities
Temporary differences are differences between the carrying amount of an asset or liability in
the statement of financial position and its tax base at the balance sheet date. The Company
recognise and measure the effect of taxable temporary differences and deductible temporary
differences on income tax as deferred tax liabilities or deferred tax assets using liability
method. Deferred tax assets and deferred tax liabilities shall not be discounted.(a) Recognition of deferred tax assets
Deferred tax assets should be recognised for deductible temporary differences the carryforward of
unused tax losses and the carryforward of unused tax credits to the extent that it is probable that
taxable profit will be available against which the deductible temporary differences the carryforward
of unused tax losses and the carryforward of unused tax credits can be utilised at the tax rates that
are expected to apply to the period when the asset is realised unless the deferred tax asset arises
from the initial recognition of an asset or liability in a transaction that:
(i) Is not a business combination; and
(ii) At the time of the transaction affects neither accounting profit nor taxable profit (tax loss)
The Company shall recognise a deferred tax asset for all deductible temporary differences arising
from investments in subsidiaries associates and joint ventures only to the extent that it is probable
that:
(i) The temporary difference will reverse in the foreseeable future; and
(ii) Taxable profit will be available against which the deductible temporary difference can be
utilised.At the end of each reporting period if there is sufficient evidence that it is probable that taxable
profit will be available against which the deductible temporary difference can be utilized the
Company recognises a previously unrecognised deferred tax asset.The carrying amount of a deferred tax asset shall be reviewed at the end of each reporting period.The Company shall reduce the carrying amount of a deferred tax asset to the extent that it is no
longer probable that sufficient taxable profit will be available to allow the benefit of part or all of
that deferred tax asset to be utilised. Any such reduction shall be reversed to the extent that it
becomes probable that sufficient taxable profit will be available.~ 165 ~Annual Report 2023
(b) Recognition of deferred tax liabilities
A deferred tax liability shall be recognised for all taxable temporary differences at the tax rate that
are expected to apply to the period when the liability is settled.(i) No deferred tax liability shall be recognised for taxable temporary differences arising from:
The initial recognition of goodwill; or
The initial recognition of an asset or liability in a transaction which: is not a business
combination; and at the time of the transaction affects neither accounting profit nor taxable profit
(tax loss)
(ii) An entity shall recognise a deferred tax liability for all taxable temporary differences associated
with investments in subsidiaries associates and joint ventures except to the extent that both of the
following conditions are satisfied:
The Company is able to control the timing of the reversal of the temporary difference; and
It is probable that the temporary difference will not reverse in the foreseeable future.(c) Recognition of deferred tax liabilities or assets involved in special transactions or events
(i) Deferred tax liabilities or assets related to business combination
For the taxable temporary difference or deductible temporary difference arising from a business
combination not under common control a deferred tax liability or a deferred tax asset shall be
recognised and simultaneously goodwill recognised in the business combination shall be adjusted
based on relevant deferred tax expense (income).(ii) Items directly recognised in equity
Current tax and deferred tax related to items that are recognised directly in equity shall be
recognised in equity. Such items include: other comprehensive income generated from fair value
fluctuation of 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.(iii) Unused tax losses and unused tax credits
Unused 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
~ 166 ~Annual Report 2023
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.Unused 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.(iv) Temporary difference generated in consolidation elimination
When preparing consolidated financial statements if temporary difference between carrying value
of the assets and liabilities in the consolidated financial statements and their taxable bases is
generated from elimination of inter-company unrealized profit or loss deferred tax assets or
deferred tax liabilities shall be recognised in the consolidated financial statements and income taxes
expense in current profit or loss shall be adjusted as well except for deferred tax related to
transactions or events recognised directly in equity and business combination.(v) Share-based payment settled by equity
If tax authority permits tax deduction that relates to share-based payment during the period in
which the expenses are recognised according to the accounting standards the Company estimates
the tax base in accordance with available information at the end of the accounting period and the
temporary difference arising from it. Deferred tax shall be recognised when criteria of recognition
are satisfied. If the amount of estimated future tax deduction exceeds the amount of the cumulative
expenses related to share-based payment recognised according to the accounting standards the tax
effect of the excess amount shall be recognised directly in equity.(d) Basis for deferred income tax assets and deferred income tax liabilities presented on a net
basis
The Company shall offset deferred tax assets and deferred tax liabilities if and only if:
(i) the Company has a legally enforceable right to set off current tax assets against current tax
liabilities; and
~ 167 ~Annual Report 2023
(ii) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same
taxation authority on either:
the same taxable entity; or
different taxable entities which intend either to settle current tax liabilities and assets on a net basis or to
realise the assets and settle the liabilities simultaneously in each future period in which significant
amounts of deferred tax liabilities or assets are expected to be settled or recovered.
3.30 Leases
(a) Identifying a lease
At inception of a contract the Company shall assess whether the contract is or contains a lease. A
contract is or contains a lease if the contract conveys the right to control the use of one or more
identified assets for a period of time in exchange for consideration. To assess whether a contract
conveys the right to control the use of an identified asset for a period of time the Company 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.(b) 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: (i) 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; (ii) the underlying asset is neither highly dependent on nor
highly interrelated with the other underlying assets in the contract.(c) 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 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.~ 168 ~Annual Report 2023
(i) Right-of-use asset
A right-of-use asset is an asset that represents a lessee’s right to use an underlying asset for the lease
term.At the commencement date the Company shall initially measure the right-of-use asset at cost. The
cost of the right-of-use asset shall comprise:
the amount of the initial measurement of the lease liability；
any lease payments made at or before the commencement date less any lease incentives received;
any initial direct costs incurred by the lessee; and
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 3.26. 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.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.The depreciation method estimated useful life residual rates and annual depreciation rates which
are determined according to the categories of right-of-use asset are listed as followings:
Depreciation Estimated useful Annual depreciation rates
Category Residualrates (%)
method life (year) (%)
Buildings and straight‐line
3.00-10.000.0010.00-33.33
constructions method
straight‐line
Machinery equipment 3.00 0.00 33.33
method
(ii) Lease liability
At the commencement date the lease liability shall be measured at the present value of the lease
payments that are not paid at that date. The lease payments included in the measurement of the lease
liability comprise the following 5 items:
fixed payments and in-substance fixed payments less any lease incentives receivable;
~ 169 ~Annual Report 2023
variable lease payments that depend on an index or a rate；
the exercise price of a purchase option if the lessee is reasonably certain to exercise that option；
payments of penalties for terminating the lease if the lease term reflects the lessee exercising an option to
terminate the lease；
amounts expected to be payable by the lessee under residual value guarantees.In order to calculate the present value of the lease payments interest rate implicit in the lease shall
be used as the discount rate. If that rate cannot be readily determined the Company shall use the
incremental borrowing rate. The difference between the lease payments and its present value shall
be recognised as unrecognised financing 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.(d) The Company as a lessor
At the commencement date the Company shall classify a lease as a finance lease if it transfers
substantially all the risks and rewards incidental to ownership of an underlying asset otherwise it
shall be classified as an operating lease.(i) Operating leases
The Company shall recognise lease payments from operating leases as income on a straight-line
basis over the term of the relevant lease and the initial direct costs incurred in obtaining an
operating lease shall be capitalised and recognised as an expense over the lease term on the same
basis as the lease income. The Company shall recognise the variable lease payments relating to the
operating lease but not included in the measurement of the lease receivables into current profit or
loss when incurred.(ii) Finance leases
At the commencement date the Company shall recognise the lease receivables at an account equal
to the net investment in the lease (the sum of the present value of the unguaranteed residual values
and the lease payment that are not received at the commencement date discounted at the interest rate
~ 170 ~Annual Report 2023
implicit in the lease) and derecognise the asset relating to the finance lease. The Company shall
recognise interest income using the interest rate implicit in the lease over the lease term.The Company shall recognise the variable lease payments relating to the finance lease but not
included in the measurement of the net investment in the lease into current profit or loss when
incurred.(e) Lease modifications
(i) A lease modification accounted for as a separate lease
The Company shall account for a modification to a lease as a separate lease if both:
the modification increases the scope of the lease by adding the right to use one or more underlying assets;
and
the consideration for the lease increases by an amount commensurate with the stand-alone price for the
increase in scope.(ii) A lease modification not accounted for as a separate lease
The Company as a lessee
At the effective date of the lease modification the Company shall redetermine the lease term of the
modified lease and remeasure the lease liability by discounting the revised lease payments using a
revised discount rate. The revised discount rate is determined as the interest rate implicit in the lease
for the remainder of the lease term if that rate can be readily determined or the incremental
borrowing rate at the effective date of the modification if the interest rate implicit in the lease
cannot be readily determined.The Company shall account for the remeasurement of the lease liability by:
decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease
for lease modifications that decrease the scope of the lease or shorten the lease term. The Company shall
recognise in profit or loss any gain or loss relating to the partial or full termination of the lease. Making a corresponding adjustment to the carrying amount of the right-of-use asset for all other lease
modifications.The Company as a lessor
The Company shall account for a modification to an operating lease as a new lease from the
effective date of the modification considering any prepaid or accrued lease payments relating to the
original lease as part of the lease payments for the new lease.For a modification to a finance lease that is not accounted for as a separate lease the Company shall
account for the modification as follows:
~ 171 ~Annual Report 2023
if the lease would have been classified as an operating lease had the modification been in effect at the
inception date the Company shall account for the lease modification as a new lease from the effective date of
the modification and measure the carrying amount of the underlying asset as the net investment in the lease
immediately before the effective date of the lease modification;
if the lease would have been classified as a finance lease had the modification been in effect at the inception
date the Company shall account for the lease modification according to the requirements in the modification
or renegotiation of the contract.(f) Sale and leaseback
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.(i) 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.(ii) The Company as a buyer (lessor)
If the transfer of the asset is not a sale the Company shall not recognise the transferred 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 Changes in Significant Accounting Policies and Accounting Estimates
(a) Changes in accounting polices
On 30 November 2022 the Ministry of Finance issued Interpretation of Accounting Standards for
Business Enterprises No.16 (Caikuai[2022] No.31) (hereinafter referred to as "Interpretation
No.16") in which the provision of "Accounting treatment of deferred tax related to assets and
liabilities arising from a single transaction that does not apply the initial recognition
exemption" shall be implemented as of 1 January 2023. There are not any significant impacts on
the Company’s financial statements during the reporting period for the implementation of
Interpretation No.16.(b) Significant changes in accounting estimates
~ 172 ~Annual Report 2023
The Company has no significant changes in accounting estimates for the reporting period.
4. TAXATION
4.1Major Categories of Tax and Tax Rates Applicable to the Company
Categories of tax Basis of tax assessment Tax rate
Valur added in the course of sales of goods and
Value added tax (VAT) 13% 9% 6%
rendering of services
Tax by quantity: CNY 1.00 per
kilogram or litre of distrilled
wine sold;
Consumption duty Taxable revenue
Tax by revenue: 20% on
taxable revenue from sale of
distrilled wine
Urban maintenance and construction
Transaction tax payable 7% 5%
tax
Education surcharge Transaction tax payable 3%
Local education surcharge Transaction tax payable 2%
Corporate income tax (CIT) Taxable income 25%
The basic income tax rate of the company is 25% and the actual income tax rate of some subsidiaries
is shown in the following table:
Name of Taxpayer Rate of Income Tax
Longrui Glass 15.00%
Ruisi Weier 15.00%
Runan Xinke 15.00%
Theme Hotel 5.00%
Anhui Gu Qi Distillery 5.00%
GJ Guest House 5.00%
Jiuan Electric 5.00%
Junlou Culture 5.00%
HHL Beverage 5.00%
Yashibo 5.00%
Xinjia Testing 5.00%
Wuhan Gulou Junhe 5.00%
Wuhan Gulou Juntai 5.00%
Xiaogan Gulou Tiancheng 5.00%
GJ Health Technology 15.00%
~ 173 ~Annual Report 2023
4.2Tax Preference
(i) 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%.(ii) 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%.(iii) 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%.(iv) 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%.(v) Announcement on Preferential Income Tax Policies for Small and Micro Enterprises and
Individual Industrial and Commercial Households (Announcement No. 6 of 2023 by the General
Administration of Taxation of the Ministry of Finance) from 1 January 2023 to 31 December 2024
the part of the annual taxable income of small and micro profit enterprises that does not exceed 1
million yuan shall be included in the taxable income at a reduced rate of 25%. Pay corporate income
tax at a rate of 20%. Theme Hotel GJ Guest House Jiuan Electric Gu Qi Distillery Hubei Junlou
Cultural HHL Beverage Yashibo Xinjia Testing Wuhan Gulou Junhe Wuhan Gulou Juntai
Xiaogan Gulou Tiancheng comply with the relevant provisions of small small profit enterprise
income tax preferential policy.
5. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
5.1 Monetary funds
~ 174 ~Annual Report 2023
Items 31 December 2023 31 December 2022
Cash on hand 78223.44 111642.11
Cash at bank 15674993088.76 13698187278.75
Other monetary funds 291300431.99 74262220.44
Total 15966371744.19 13772561141.30
Notes: At the end of 2023 the bank deposits were used to pledge the bank
acceptance bill of 1220 million the bank deposits were used to pledge
the bank guarantee of 1.90 million and the other restricted funds in
the bank deposits were 48.91 million. The other monetary funds as of the
statement date included margin deposits not eligible for early redemption
at 19.39 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
Items 31 December 2023 31 December 2022
Financial assets at fair value through profit or loss 719987547.42 1782687769.66
Including: Structural financial products 719987547.42 1580352899.17
Fund investments - 202334870.49
Total 719987547.42 1782687769.66
5.3 Accounts Receivable
(a) Accounts receivable by aging
Aging 31 December 2023 31 December 2022
Within one year 68276125.36 60886443.44
Including: Within 6 months 65998078.79 57829416.75
7 months to 1 years 2278046.57 3057026.69
1-2 years 1209303.29 10382550.23
2-3 years 7827391.86 405162.30
~ 175 ~Annual Report 2023
Aging 31 December 2023 31 December 2022
Over 3 years 173492.54 137464.27
Subtotal 77486313.05 71811620.24
Less: provision for bad debt 8878393.78 9122951.30
Total 68607919.27 62688668.94
(b) Accounts receivable by bad debt provision method
31 December 2023
Book balance Provision for bad debt
Category Carrying
Proportion Provision
Amount Amount amount
(%) ratio (%)
Provision for bad debt recognised individually 7792783.72 10.06 7792783.72 100.00 -
Provision for bad debt recognised by groups 69693529.33 89.94 1085610.06 1.56 68607919.27
Including: Group1 - - - - -
Group2 69693529.33 89.94 1085610.06 1.56 68607919.27
Total 77486313.05 100.00 8878393.78 11.46 68607919.27
(Continued)
31 December 2022
Book balance Provision for bad debt
Category Carrying
Proportion Provision
Amount Amount amount
(%) ratio (%)
Provision for bad debt recognised
7792783.7210.857792783.72100.00-
individually
Provision for bad debt recognised by
64018836.5289.151330167.582.0862688668.94
groups
Including: Group1 - - - - -
Group2 64018836.52 89.15 1330167.58 2.08 62688668.94
Total 71811620.24 100.00 9122951.30 12.70 62688668.94
As at 31 December 2023 accounts receivable with bad debt provision recognised by group 2
31 December 2023
Aging
Accounts receivable Provision for bad debt Provision ratio (%)
Within one year 68276125.36 773883.12 1.13
Including: Within 6 months 65998078.79 659980.79 1.00
T/o: 7 months to 1 years 2278046.57 113902.33 5.00
1-2 years 1209303.29 120930.33 10.00
2-3 years 34608.14 17304.07 50.00
~ 176 ~Annual Report 2023
31 December 2023
Aging
Accounts receivable Provision for bad debt Provision ratio (%)
Over 3 years 173492.54 173492.54 100.00
Total 69693529.33 1085610.06 1.56
(Continued)
31 December 2022
Aging
Accounts receivable Provision for bad debt Provision ratio (%)
Within one year 60886443.44 731145.50 1.20
Including: Within 6 months 57829416.75 578294.17 1.00
T/o: 7 months to 1 years 3057026.69 152851.33 5.00
1-2 years 2589766.51 258976.65 10.00
2-3 years 405162.30 202581.16 50.00
Over 3 years 137464.27 137464.27 100.00
Total 64018836.52 1330167.58 2.08
Note: For details of recognition criteria and explanation for provision of bad debt by groups please
refer to Notes 3.10.(c) Changes of provision for bad debt during the reporting period
Changes during the reporting period
Business
31 December combination 31 December
Category Recovery or Elimination or
2022 Provision not under 2023
reversal write-off
common
control
Individually
significant
receivables
subject to 7792783.72 - - - - 7792783.72
individual
impairment
assessment
Individually
insignificant
receivables
subject to - - - - - -
individual
impairment
assessment
~ 177 ~Annual Report 2023
Changes during the reporting period
Business
31 December combination 31 December
Category Recovery or Elimination or
2022 Provision not under 2023
reversal write-off
common
control
Group 2 1330167.58 218133.44 - 462690.96 - 1085610.06
Total 9122951.30 218133.44 - 462690.96 - 8878393.78
(d) Accounts receivable written off during the reporting period
Not applicable.(e) Top five closing balances by entity
Proportion of the
Balance of Balance of Balance of accounts Provision for bad
balance to the total
accounts contract assets as receivable and debt of accounts
Entity name accounts receivable
receivable as at 31 at 31 December contract assets as at receivable and
and contract assets
December 2023 2023 31 December 2023 contract assets
(%)
Top 1 16134405.02 - 16134405.02 20.82 161344.05
Top 2 13873946.05 - 13873946.05 17.91 138739.46
Top 3 7792783.72 - 7792783.72 10.06 7792783.72
Top 4 5834173.93 - 5834173.93 7.53 58341.74
Top 5 4635200.00 - 4635200.00 5.98 46352.00
Total 48270508.72 - 48270508.72 62.30 8197560.97
5.4 Accounts Receivable Financing
(a) Accounts receivable financing by category
31 December 2023
Type
Book balance Provision for bad debt Carrying amount
Bank acceptance bills 957560115.73 - 957560115.73
Commercial acceptance bills - - -
Total 957560115.73 - 957560115.73
(Continued)
31 December 2022
Type
Book balance Provision for bad debt Carrying amount
~ 178 ~Annual Report 2023
31 December 2022
Type
Book balance Provision for bad debt Carrying amount
Bank acceptance bills 217419441.32 - 217419441.32
Commercial acceptance bills - - -
Total 217419441.32 - 217419441.32
(b) Pledged accounts receivable financing at 31 December 2023
Not applicable.(c) Accounts receivable financing which were discounted or endorsed but not due at 31
December 2023
Items Amount derecognised Amount not derecognised
Bank acceptance bills 3872640690.87 -
Commercial acceptance bills - -
Total 3872640690.87 -
(d) Accounts receivable financing by loss allowance provision method
31 December 2023
Book balance Provision for bad debt
Category
Proportion Provision Carrying amount
Amount Amount
(%) ratio (%)
Provision for loss allowance
-----
recognised individually
Provision for loss allowance
957560115.73100.00--957560115.73
recognised by groups
Including:Group1 - - - - -
Group2 957560115.73 100.00 - - 957560115.73
Total 957560115.73 100.00 - - 957560115.73
(Continued)
31 December 2022
Book balance Provision for bad debt
Category
Proportion Provision Carrying amount
Amount Amount
(%) ratio (%)
Provision for loss allowance
-----
recognised individually
Provision for loss allowance 217419441.32 100.00 - - 217419441.32
~ 179 ~Annual Report 2023
31 December 2022
Book balance Provision for bad debt
Category
Proportion Provision Carrying amount
Amount Amount
(%) ratio (%)
recognised by groups
Including:Group1 - - - - -
Group2 217419441.32 100.00 - - 217419441.32
Total 217419441.32 100.00 - - 217419441.32
(e) Movement of impairment allowance
Not applicable.(f) Accounts receivable financing written off during the reporting period
Not applicable.
5.5 Advances to Suppliers
(a) Advances to suppliers by aging
31 December 2023 31 December 2022
Aging
Amount Proportion (%) Amount Proportion (%)
Within one year 90144117.89 98.40 233344417.80 99.72
1 to 2 years 995545.31 1.09 631243.89 0.27
2 to 3 years 467678.98 0.51 20000.00 0.01
Over 3 years - - - -
Total 91607342.18 100.00 233995661.69 100.00
(b) Top five closing balances by entity
Proportion of the balance to the
Entity name Balance as at 31 December 2023
total advances to suppliers (%)
Top 1 18284508.85 19.96
Top 2 7534837.22 8.23
Top 3 7089576.02 7.74
Top 4 5245132.11 5.73
Top 5 2726854.35 2.98
Total 40880908.55 44.64
5.6 Other Receivables
~ 180 ~Annual Report 2023
(a) Other receivables by category
Items 31 December 2023 31 December 2022
Interest receivable - -
Dividend receivable - -
Other receivables 49178194.70 73337415.74
Total 49178194.70 73337415.74
(b) Other Receivables
(i) Other receivables by aging
Aging 31 December 2023 31 December 2022
Within one year 46992878.99 68032959.87
Including: Within 6 months 40097431.00 66026552.80
7 months to 1 years 6895447.99 2006407.07
1-2 years 2308597.13 5801770.49
2-3 years 1706650.01 1686854.49
Over 3 years 34652068.31 44645231.37
Subtotal 85660194.44 120166816.22
Less: provision for bad debt 36481999.74 46829400.48
Total 49178194.70 73337415.74
(ii) Other receivables by nature
Nature 31 December 2023 31 December 2022
Security investments 28635660.22 38434247.10
Margin deposits 7558471.55 9840126.80
Advanced travel expenses 594453.48 1172804.12
Rentals and utilities receivable 8593773.81 5206927.45
Others 40277835.38 65512710.75
Subtotal 85660194.44 120166816.22
Less: provision for bad debt 36481999.74 46829400.48
Total 49178194.70 73337415.74
(iii) Other receivables by bad debt provision method
A. As at 31 December 2023 provision for bad debt recognised based on three stages model
Stages Book balance Provision for bad debt Carrying acount
Stage 1 57024534.22 7846339.52 49178194.70
Stage 2 - - -
~ 181 ~Annual Report 2023
Stages Book balance Provision for bad debt Carrying acount
Stage 3 28635660.22 28635660.22 -
Total 85660194.44 36481999.74 49178194.70
As at 31 December 2023 provision for bad debt at stage 1:
Expected credit
loss rate in the Provision for bad
Category Book balance Carrying amount
next 12 months debt
(%)
Provision for bad debt recognised
----
individually
Provision for bad debt recognised by
57024534.2213.767846339.5249178194.70
groups
Including: Group 1 - - - -
Group 2 57024534.22 13.76 7846339.52 49178194.70
Total 57024534.22 13.76 7846339.52 49178194.70
Details of Group 2 receivables as of the statement date
31 December 2023
Age group
Gross Impairment allowance Provision ratio (%)
Within 1 year 46992878.99 745746.71 1.59
Including: Within 6 months 40097431.00 400974.31 1.00
T/ o: 7 months to 1 years 6895447.99 344772.40 5.00
1 to 2 years 2308597.13 230859.71 10.00
2 to 3 years 1706650.01 853325.01 50.00
Over 3 years 6016408.09 6016408.09 100.00
Total 57024534.22 7846339.52 13.76
As at 31 December 2023 provision for bad debt at stage 3:
Expected credit
loss ratio (%) Provision for bad
Category Book balance Carrying amount
over the entire debt
duration
Provision for bad debt recognised
28635660.22100.0028635660.22-
individually
Provision for bad debt recognised by - - - -
~ 182 ~Annual Report 2023
Expected credit
loss ratio (%) Provision for bad
Category Book balance Carrying amount
over the entire debt
duration
groups
Including: Group 1 - - - -
Group 2 - - - -
Total 28635660.22 100.00 28635660.22 -
Details of receivables subject to individual assessment as of 31 December 2023
31 December 2023
Entity name Provision for bad Reason for
Book balance Provision ratio (%)
debt impairment
Hengxin Securities Co. Ltd. 28635660.22 28635660.22 100.00 In bankruptcy
Total 28635660.22 28635660.22 100.00 -
B．As at 31 December 2022 provision for bad debt recognised based on three stages model
Stages Book balance Provision for bad debt Carrying amount
Stage 1 81732569.12 8395153.38 73337415.74
Stage 2 - - -
Stage 3 38434247.10 38434247.10 -
Total 120166816.22 46829400.48 73337415.74
As at 31 December 2022 provision for bad debt at stage 1:
Expected credit
loss rate in the Provision for bad
Category Book balance Carrying amount
next 12 months debt
(%)
Provision for bad debt recognised
----
individually
Provision for bad debt recognised by
81732569.1210.278395153.3873337415.74
groups
Including: Group 1 - - - -
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
~ 183 ~Annual Report 2023
31 December 2022
Age group
Gross Impairment allowance Provision ratio (%)
Within 1 year 68032959.87 760564.80 1.12
Including: 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
As at 31 December 2022 provision for bad debt at stage 3:
Expected credit
loss ratio (%) Provision for bad
Category Book balance Carrying amount
over the entire debt
duration
Provision for bad debt recognised
38434247.10100.0038434247.10-
individually
Provision for bad debt recognised by
----
groups
Including: Group 1 - - - -
Group 2 - - - -
Total 38434247.10 100.00 38434247.10 -
Details of receivables subject to individual assessment as of 31 December 2022
31 December 2022
Entity name Provision for bad Reason for
Book balance Provision ratio (%)
debt 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 -
(iv) Changes of provision for bad debt during the reporting period
Category 31 December Changes during the reporting period 31 December
~ 184 ~Annual Report 2023
2022 Business 2023
combination
Recovery or Elimination or
Provision not under
reversal write-off
common
control
Individual
38434247.10--98239.029700347.8628635660.22
assessment
Portfolio
8395153.38208002.92-756816.787846339.52
assessment
Total 46829400.48 208002.92 - 855055.80 9700347.86 36481999.74
(v) Top five closing balances by entity
Proportion of the
Balance as at 31 Provision for bad
Entity name Nature Aging balance to the total
December 2023 debt
other receivables (%)
Security
Top 1 28635660.22 Over 3 years 33.43 28635660.22
investment
Top 2 Other 7876916.57 Within 1 year 9.20 259018.10
Within 6
Top 3 Other 5289284.36 6.17 52892.84
months
Within 6
Top 4 Other 4543285.59 5.30 45432.86
months
Within 6
Top 5 Other 4287333.73 5.01 42873.34
months
Total 50632480.47 59.11 29035877.36
5.7 Inventories
(a) Inventories by category
31 December 2023
Items Provision for
Book balance Carrying amount
impairment
Raw materials and packaging 351787097.55 20527645.11 331259452.44
Semi-finished goods and work in progress 5811584229.52 - 5811584229.52
Finished goods 1396536633.32 19697778.77 1376838854.55
Total 7559907960.39 40225423.88 7519682536.51
(Continued)
Items 31 December 2022
~ 185 ~Annual Report 2023
Provision for
Book balance Carrying amount
impairment
Raw materials and packaging 384626636.25 16449308.79 368177327.46
Semi-finished goods and work in progress 4263603307.09 - 4263603307.09
Finished goods 1431913213.36 5587757.03 1426325456.33
Total 6080143156.70 22037065.82 6058106090.88
(b) Provision for impairment
Increase during the reporting Decrease during the reporting
period period
Business
31 December 31 December
Items combination
2022 Reversal or 2023
Provision not under Others
elimination
common
control
Raw materials and
16449308.7912364609.33-8286273.01-20527645.11
packaging
Finished goods 5587757.03 18498530.79 - 4388509.05 - 19697778.77
Total 22037065.82 30863140.12 - 12674782.06 - 40225423.88
5.8 Contract Assets
Items 31 December 2023 31 December 2022
Project has been completed and the
-1855188.15
accounts have not been settled
Total - 1855188.15
5.9 Other Current Assets
Items 31 December 2023 31 December 2022
Pledged Treasury bond reverse repurchase 25199000.00 60000000.00
Interests on deposits 26696206.46 3579838.89
Deductible taxes and tax allowance 83176048.90 61988886.62
Total 135071255.36 125568725.51
5.10 Long-term Equity Investments
(a) Details of Long-term Equity Investments
~ 186 ~Annual Report 2023
Changes during the reporting period
Investment Adjustments of
31 December Changes in
Investees Additional Decrease in income/(losses) other
2022 other
investment investment recognised under comprehensive
equity
equity method income
I. Associates
Beijing Guge
Trading Co.
5484525.73--27011.92
Ltd. (Guge
Trading)
Anhui
Xunfeijiuzhi
4669710.25--185830.36
Technology Co.Ltd
Total 10154235.98 - - 212842.28
(Continued)
Changes during the reporting period
Declaration of cash Provision for
31 December
Investees dividends or Provision for impairment at 31
Others 2023
distribution of impairment December 2023
profit
I. Associates
Guge Trading - - - 5511537.65 -
Xunfeijiuzhi - - - 4855540.61 -
Total - - - 10367078.26 -
5.11 Other equity instrument investment
Changes during the reporting period
Gaines
Losses recognised
31 December recognised in 31 December
Items Additional Decrease in in other
2022 other Others 2023
investment investment comprehensive
comprehensive
income
income
Anhui Mingguang
Village
Commercial Bank 56447789.94 6657868.13 63105658.07
(Mingguang
VCB)
Total 56447789.94 6657868.13 63105658.07
~ 187 ~Annual Report 2023
(Continued)
Dividend
Cumulative gains Cumulative Amount of other
income
recognised in losses recognised comprehensive Reason for designated as
recognised
Items other in other income transfer fair value through other
during the
comprehensive comprehensive to retained comprehensive income
reporting
income income earnings
period
For management holding
Anhui Mingguang
purposes it is specified as
Village Commercial
747200.50 9256960.27 measured at fair value and
Bank (Mingguang
changes in it are included in
VCB)
other comprehensive income
5.12 Investment Properties
(a) Investment properties accounted for using cost model
Items Houses and buildings Land use rights Total
Initial cost:
Balance as at 31 December 2022 20473989.11 2644592.00 23118581.11
Increase during the reporting period 63703963.50 - 63703963.50
(i) Reclassification from Fixed assets 63703963.50 - 63703963.50
Decrease during the reporting period - - -
Balance as at 31 December 2023 84177952.61 2644592.00 86822544.61
Accumulated depreciation and amortisation:
Balance as at 31 December 2022 8853919.61 867779.54 9721699.15
Increase during the reporting period 30421908.71 56026.56 30477935.27
(i) Recognition 2634984.06 56026.56 2691010.62
(ii) Reclassification from Fixed assets 27786924.65 - 27786924.65
Decrease during the reporting period - - -
Balance as at 31 December 2023 39275828.32 923806.10 40199634.42
Provision for impairment
Balance as at 31 December 2022 - - -
Increase during the reporting period - - -
Decrease during the reporting period - - -
Balance as at 31 December 2023 - - -
Carrying amount:
Balance as at 31 December 2023 44902124.29 1720785.90 46622910.19
Balance as at 31 December 2022 11620069.50 1776812.46 13396881.96
~ 188 ~Annual Report 2023
5.13 Fixed Assets
(a) Fixed assets by category
Items 31 December 2023 31 December 2022
Fixed assets 4596044056.92 2741844586.30
Disposal of fixed assets - -
Total 4596044056.92 2741844586.30
(b) Fixed assets
(i) Details of fixed assets
Houses and Machinery Transportation Administrative
Items Total
buildings equipment vehicles and other devices
Initial cost:
Balance as at 31
2726822355.631665445833.4479609320.00408442822.464880320331.53
December 2022
Increase during the
1132207718.83941078830.007608669.69112118845.172193014063.69
reporting period
(i) Purchase 13093525.62 33119794.37 7608669.69 29072069.74 82894059.42
(ii)Transfer from
construction in 1119114193.21 907959035.63 83046775.43 2110120004.27
progress
Decrease during
the reporting 66746073.58 11524820.58 6367263.62 6095167.87 90733325.65
period
(i) Disposal 3042110.08 11524820.58 6367263.62 6095167.87 27029362.15
(ii)
Reclassification to
63703963.5063703963.50
Investment
properties
Balance as at 31
3792284000.882594999842.8680850726.07514466499.766982601069.57
December 2023
Accumulated
depreciation:
Balance as at 31
993719532.71832439496.3567958168.40239273719.062133390916.52
December 2022
Increase during the
115560002.03129086995.765337721.2248714927.09298699646.10
reporting period
(i) Recognition 115560002.03 129086995.76 5337721.22 48714927.09 298699646.10
Decrease during
29711835.948669952.995810718.785890742.1350083249.84
the reporting
~ 189 ~Annual Report 2023
Houses and Machinery Transportation Administrative
Items Total
buildings equipment vehicles and other devices
period
(i) Disposal 1924911.29 8669952.99 5810718.78 5890742.13 22296325.19
(ii)
Reclassification to
27786924.6527786924.65
Investment
properties
Balance as at 31
1079567698.80952856539.1267485170.84282097904.022382007312.78
December 2023
Provision for
impairment:
Balance as at 31
2596209.901907219.92-581398.895084828.71
December 2022
Increase during the
-190056.75--190056.75
reporting period
(i) Recognition - 190056.75 - - 190056.75
Decrease during
the reporting - 722087.00 - 3098.59 725185.59
period
(i) Disposal - 722087.00 - 3098.59 725185.59
Balance as at 31
2596209.901375189.67-578300.304549699.87
December 2023
Carrying amount:
Balance as at 31
2710120092.181640768114.0713365555.23231790295.444596044056.92
December 2023
Balance as at 31
1730506613.02831099117.1711651151.60168587704.512741844586.30
December 2022
(ii) Fixed assets leasing out under operating leases
Items Carrying amount at 31 December 2023
Houses and buildings 44902124.29
Total 44902124.29
(iii) Fixed assets without certificate of title
Items Carrying amount Reason
Houses and buildings 1639135408.17 Registration in progress
Total 1639135408.17
(iv) At the end of the period there were no fixed assets with limited use due to mortgage.~ 190 ~Annual Report 2023
5.14 Construction in Progress
(a) Construction in progress by category
Items 31 December 2023 31 December 2022
Construction in progress 2910735155.39 2454703251.44
Construction materials - -
Total 2910735155.39 2454703251.44
(b) Construction in progress
(i) Details of construction in progress
31 December 2023 31 December 2022
Items Provision for Provision for
Book balance Carrying amount Book balance Carrying amount
impairment impairment
Smart Zone 2564788149.93 - 2564788149.93 2043434953.17 - 2043434953.17
Theme Hotel 225797376.40 - 225797376.40 252169603.40 - 252169603.40
GJ Plant #12
25626044.87-25626044.8748337480.17-48337480.17
Wine Cellar
Glass bottle
production line
automation - - - 23558436.29 - 23558436.29
technical reform
project
Suizhou Plant 29094832.88 - 29094832.88 57312769.08 - 57312769.08
Other projects 65428751.31 - 65428751.31 29890009.33 - 29890009.33
Total 2910735155.39 - 2910735155.39 2454703251.44 - 2454703251.44
(ii) Changes in significant projects of construction in progress
Decrease during
Increase during the Transfer to fixed
Projects Budget 31 December 2022 the reporting 31 December 2023
reporting period asset
period
Smart Zone 828965.74 2043434953.17 2045361261.66 1524008064.90 - 2564788149.93
Theme Hotel 62500.00 252169603.40 252294249.29 278225547.10 440929.19 225797376.40
GJ Plant #12 Wine
19000.0048337480.1786226602.6592035481.3016902556.6525626044.87
Cellar
Glass bottle
production line
automation 5940.00 23558436.29 19016904.30 42575340.59 - -
technical reform
project
~ 191 ~Annual Report 2023
Decrease during
Increase during the Transfer to fixed
Projects Budget 31 December 2022 the reporting 31 December 2023
reporting period asset
period
Suizhou Plant 60000.00 57312769.08 128920446.69 142869577.87 14268805.02 29094832.88
Other projects 59419.54 29890009.33 74139449.59 30405992.51 8194715.10 65428751.31
Total 1035825.28 2454703251.44 2605958914.18 2110120004.27 39807005.96 2910735155.39
(Continued)
Proportion of Cumulative Interest
Including: interest
project input Rate of amount of capitalisation rate
Projects capitalised during the Source of funds
to budgets progress interest during the reporting
reporting period
(%) capitalisation period (%)
Self-funded
Smart Zone 54.60 62.00 - - -
public financing
Theme Hotel 80.71 80.71 - - - Self-funded
GJ Plant #12 Wine
93.44 93.44 - - - Self-funded
Cellar
Glass bottle
production line
77.71 100.00 - - - Self-funded
automation technical
reform project
Suizhou Plant 90.40 98.00 7924537.33 3272146.95 3.35 Self-funded loans
Other projects 17.51 17.51 - - - Self-funded
Total 7924537.33 3272146.95
Note: Increase of construction in progress for 18.58% year over year was mainly resulted from
investment in Smart Zone in the period.
5.15 Right-of-use Assets
(a) General information of right-of-use assets
Houses and
Items Machinery equipment Total
buildings
Initial cost:
Balance as at 31 December 2022 58410080.67 1330929.57 59741010.24
Increase during the reporting period 63545184.95 - 63545184.95
Decrease during the reporting period 13683700.53 1330929.57 15014630.10
Balance as at 31 December 2023 108271565.09 - 108271565.09
Accumulated depreciation:
~ 192 ~Annual Report 2023
Houses and
Items Machinery equipment Total
buildings
Balance as at 31 December 2022 26291552.70 887286.44 27178839.14
Increase during the reporting period 14625612.68 443643.13 15069255.81
Decrease during the reporting period 13683700.53 1330929.57 15014630.10
Balance as at 31 December 2023 27233464.85 - 27233464.85
Provision for impairment:
Balance as at 31 December 2022
Increase during the reporting period
Decrease during the reporting period
Balance as at 31 December 2023
Carrying amount:
Balance as at 31 December 2023 81038100.24 - 81038100.24
Balance as at 31 December 2022 32118527.97 443643.13 32562171.10
5.16 Intangible Assets
(a) General information of intangible assets
Land use rights Patents and
Items Software Total
trademarks
Initial cost:
Balance as at 31 December
1088480720.77122263823.72254995277.121465739821.61
2022
Increase during the reporting
48166516.9811144888.09-59311405.07
period
(i) Purchase 48166516.98 4152702.48 - 52319219.46
(ii) Reclassification from
-6992185.61-6992185.61
construction in progress
Decrease during the reporting
-1567698.2422523.561590221.80
period
(i) Disposal - 1567698.24 22523.56 1590221.80
Balance as at 31 December
1136647237.75131841013.57254972753.561523461004.88
2023
Accumulated amortisation:
Balance as at 31 December
204751419.3680821700.0171874672.80357447792.17
2022
Increase during the reporting
21337705.8721839877.631072141.9744249725.47
period
(i) Provision 21337705.87 21839877.63 1072141.97 44249725.47
~ 193 ~Annual Report 2023
Land use rights Patents and
Items Software Total
trademarks
Decrease during the reporting
-1567698.2422523.561590221.80
period
(i) Disposal - 1567698.24 22523.56 1590221.80
Balance as at 31 December
226089125.23101093879.4072924291.21400107295.84
2023
Provision for impairment:
Balance as at 31 December
-166872.39-166872.39
2022
Increase during the reporting
----
period
(i) Provision - - - -
Decrease during the reporting
----
period
(i) Disposal - - - -
Balance as at 31 December
-166872.39-166872.39
2023
Carrying amount: - -
Balance as at 31 December
910558112.5230580261.78182048462.351123186836.65
2023
Balance as at 31 December
883729301.4141275251.32183120604.321108125157.05
2022
(b) Intangible assets pledged as of the statement date
Cumulative Provision for
Initial cost Carrying amount Note
amortisation impairment
Trademark rights 56716115.40 2412775.14 - 54303340.26 Loan pledge
Total 56716115.40 2412775.14 - 54303340.26
(c) Land use rights without certificate of title
Cumulative Provision for
Items Initial cost Carrying amount Reason
amortisation impairment
Registration in
Land use rights 34833487.44 846129.14 - 33987358.30
progress
Total 34833487.44 846129.14 - 33987358.30
5.17 Goodwill
~ 194 ~Annual Report 2023
(a) Initial recognition
Increase during the Decrease during the
Investees or matters that 31 December reporting period reporting period 31 December
goodwill arising from 2022 Business 2023
Other Disposal Other
combination
HHL Distillery 478283495.29 - - - - 478283495.29
Mingguang Distillery 60686182.07 - - - - 60686182.07
Treasure Distillery 22394707.65 - - - - 22394707.65
Total 561364385.01 - - - - 561364385.01
(b) Provision for impairment
Following the impairment test and with reference to the Appraisal Reports
(ZhongshuiZhiyuanPingBaoZi [2024] No. 220030 and ZhongshuiZhiyuanPingBaoZi [2024] No.
220033) issued by Beijing Zhongshui Zhiyuan 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.(c) Asset groups associated with goodwill
Asset group CNY million Whether
there has
Unrecognised
been any
Composition goodwill
Investee Book Allocated Determination change in
of asset group attributable to Total
value goodwill the
non-controlling
current
interest
period
Active markets are available for
the products of the asset group to
Operating
which goodwill is allocated and
HHL Distillery assets of HHL 1255.21 478.28 459.53 2193.02 No
hence the asset group is capable
Distillery
of generating identifiable
separate cash flows.Active markets are available for
Operating the products of the asset group to
Mingguang assets of which goodwill is allocated and
214.18 60.69 40.46 315.33 No
Distillery Mingguang hence the asset group is capable
Distillery of generating identifiable
separate cash flows.~ 195 ~Annual Report 2023
(d) Specific determination method of recoverable amount
Recoverable amount of an asset group: determined at the present value of the asset group's
projected future cash flows. Future cash flows are projected on the basis of the financial budget
approved by management for the above asset group for a five-year period with sustainable cash
flows beyond five years determined at the level of the last year of the detailed forecast period. The
present value is calculated at a discount rate that appropriately reflects the current time value of
money in the market and the specific risks of the asset group. Other key assumptions used in cash
flow forecasting for asset groups include projected operating income operating costs growth rates
and related expenses which are based on the company's operating results from prior years growth
rates industry levels and management's expectations for market developments. The discount rate
adopted by the Company for 2023 ranges from 16.07% to 17.89% and the growth rate ranges from
1.81% to 15.68%
(e) Completion of performance commitments and corresponding goodwill impairment
The company's goodwill asset group has no performance commitment this year which has no
impact on the goodwill impairment test.
5.18 Long-term Deferred Expenses
Increase during Decrease during the reporting period
31 December
Items 31 December 2022 the reporting
Amortisation Other decrease 2023
period
Experience Centre 18055386.32 156139.05 12796911.30 - 5414614.07
Waste Water Plant 999508.20 - 922622.95 - 76885.25
HHL Winery and
770053.59-770053.59--
Museum
GJCCP Culture
1181818.18-1181818.18--
Centre
Outdoor Plant 16586539.00 10440403.18 2299675.66 - 24727266.52
Pottery jar - 16902556.65 422563.92 - 16479992.73
Miscellaneous 13419672.02 9307748.89 10323595.50 - 12403825.41
Total 51012977.31 36806847.77 28717241.10 - 59102583.98
5.19 Deferred Tax Assets and Deferred Tax Liabilities
(a) Deferred tax assets before offsetting
Items 31 December 2023 31 December 2022
~ 196 ~Annual Report 2023
Deductible Deductible
temporary Deferred tax assets temporary Deferred tax assets
differences differences
Provision for impairment loss 44941996.14 10848316.56 27288766.92 6642674.57
Provision for credit
45360393.5211292126.6655952351.7813967271.03
impairment
Unrealised intragroup profit 74347126.84 18586781.71 100142928.48 25035732.12
Deferred income 100811404.82 24492497.96 103714978.95 25483351.68
Deductible losses 356467985.56 82136692.17 337681202.44 77041463.86
Accrued employee benefits 8433254.65 1264988.20 6380952.10 957142.82
Accrued expenses and rebates 1229968568.55 306212224.03 1104571137.01 275740361.64
Fair value change of accounts
3029905.06754940.171024977.31252229.65
receivable financing
Lease liabilities 79152693.07 19788173.27 30835741.04 7708935.26
Total 1942513328.21 475376740.73 1767593036.03 432829162.63
(b) Deferred tax liabilities before offsetting
31 December 2023 31 December 2022
Deductible Deductible
Items Deferred tax
temporary Deferred tax liabilities temporary
liabilities
differences differences
Accelerated depreciation
348420771.6384243324.54157708682.0939427170.52
variance of fixed assets
Assets appreciation arising
from business combination 677082342.46 163643316.42 697149707.15 168589543.40
not under common control
Fair value change of financial
19987547.424996886.8632687769.668171942.42
asset held for trading
Unrealised profit 264217579.52 66054394.88 257338901.32 64334725.33
Fair value change of Other
9256960.272314240.072599092.14649773.03
equity instrument investments
Right-of-use assets 81038100.24 20259525.06 30835741.04 7708935.26
Total 1400003301.54 341511687.83 1178319893.40 288882089.96
(c) Net balance of deferred tax liabilities and deferred tax assets after offsetting
Net balance after Net balance after
Offset amount at 31 Offset amount at 31
Items offsetting at 31 offsetting at 31
December 2023 December 2022
December 2023 December 2022
Deferred tax assets -19788173.27 455588567.46 -7708935.26 425120227.37
~ 197 ~Annual Report 2023
Net balance after Net balance after
Offset amount at 31 Offset amount at 31
Items offsetting at 31 offsetting at 31
December 2023 December 2022
December 2023 December 2022
Deferred tax liabilities -19788173.27 321723514.56 -7708935.26 281173154.70
(d) As at 31 December 2023 the amount of deductible loss on the Company's unrecognised
deferred tax assets was 25075547.34.(e) Deductible losses not recognised as deferred tax assets will expire in the following periods: due
in one year at 416238.98 in one to two years at 38371.38 in two to three years at 132039.91 and
in three to four years at 9762850.11 The amount due after four years is 14726046.96.
5.20 Other Non-current Assets
Items 31 December 2023 31 December 2022
Prepayment for construction and
5685287.466870532.00
machinery
Total 5685287.46 6870532.00
5.21 Short-term Borrowings
Items 31 December 2023 31 December 2022
Mortgage loans - 34267952.97
Guarantee loans - 48964223.34
Total - 83232176.31
5.22 Notes Payable
(a) Disclosure by type
Category 31 December 2023 31 December 2022
Bank acceptance bills 1332031679.44 695740000.00
Commercial acceptance bills 21156044.00 -
Total 1353187723.44 695740000.00
Note: As at 31 December 2023 the Company had no notes payable matured but not yet paid.
5.23 Accounts Payable
(a) Accounts payable by nature
Items 31 December 2023 31 December 2022
Payables for materials 1352488385.40 1123707643.38
~ 198 ~Annual Report 2023
Items 31 December 2023 31 December 2022
Payables for constructions and machinery 980033062.83 539292035.62
Others 481670623.01 391063880.15
Total 2814192071.24 2054063559.15
(b) Significant accounts payable with aging of over one year
Not applicable.
5.24 Contract liabilities
Items 31 December 2023 31 December 2022
Advances for goods 1401122249.53 826636478.35
Total 1401122249.53 826636478.35
5.25 Employee Benefits Payable
(a) Details of employee benefits payable
31 December Increase during the Decrease during the
Items 31 December 2023
2022 reporting period reporting period
Short-term employee benefits 793591539.55 3826774403.69 3439911847.80 1180454095.44
Post-employment benefits-defined
1546766.08224649927.73226045015.96151677.85
contribution plans
Termination benefits - 1312442.44 1312442.44 -
Other benefits due within one year - - - -
Total 795138305.63 4052736773.86 3667269306.20 1180605773.29
(b) Short-term employee benefits
31 December Increase during the Decrease during the
Items 31 December 2023
2022 reporting period reporting period
Salaries bonuses allowances and
711371745.693362259578.302970672017.061102959306.93
subsidies
Employee benefits - 99146440.78 99146440.78 -
Social insurance 420184.43 107606323.23 107545224.48 481283.18
Medical insurance 419281.03 100505888.79 100446239.73 478930.09
Work-place injury insurance 903.40 7100434.44 7098984.75 2353.09
Housing accumulation fund 6773970.41 114992565.00 113577228.39 8189307.02
Labour union funds and employee
71814254.1438172224.9045387717.2764598761.77
education funds
Enterprise annuity 3211384.88 104597271.48 103583219.82 4225436.54
~ 199 ~Annual Report 2023
31 December Increase during the Decrease during the
Items 31 December 2023
2022 reporting period reporting period
Total 793591539.55 3826774403.69 3439911847.80 1180454095.44
(c) Defined contribution plans
Increase during the Decrease during the
Items 31 December 2022 31 December 2023
reporting period reporting period
Basic endowment insurance 1545352.88 213248992.25 214647263.60 147081.53
Unemployment insurance 1413.20 11400935.48 11397752.36 4596.32
Total 1546766.08 224649927.73 226045015.96 151677.85
(d) Termination benefits
Increase during the Decrease during the
Items 31 December 2022 31 December 2023
reporting period reporting period
Termination benefits - 1312442.44 1312442.44 -
Total - 1312442.44 1312442.44 -
Note: If the company terminates the labor relationship with the employee before the expiration of
the labor contract it shall take one-time compensation and the amount of compensation for
dismissal shall be included in the current profit and loss.
5.26 Taxes Payable
Items 31 December 2023 31 December 2022
Value added tax (VAT) 357332008.07 256705264.84
Consumption tax 434932478.09 502091276.19
Enterprise income tax 280172679.93 335723169.21
Individual income tax 4436736.14 12550946.18
City construction tax 40651189.20 40572819.42
Stamp duty 4531195.41 4553890.84
Educational surcharge 39534935.75 37594377.10
Others 17777633.10 15236386.24
Total 1179368855.69 1205028130.02
5.27 Other Payables
(a) Other payables by category
Items 31 December 2023 31 December 2022
Interest payable - -
~ 200 ~Annual Report 2023
Items 31 December 2023 31 December 2022
Dividend payable - -
Other payables 3267292222.01 3261763838.80
Total 3267292222.01 3261763838.80
(i) Other payables by nature
Items 31 December 2023 31 December 2022
Margin deposits 2567100177.13 2752404989.26
Quality warranty 77264459.45 58897431.31
Withheld housing fund payable 6231182.41 5465938.41
Others 616696403.02 444995479.82
Total 3267292222.01 3261763838.80
Note: 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 Maturing within One Year
Items 31 December 2023 31 December 2022
Lease liabilities due within one year 10771925.29 12204345.11
Long-term borrowings due within one year 70053097.22 30033000.00
Total 80825022.51 42237345.11
5.29 Other Current Liabilities
Items 31 December 2023 31 December 2022
Accrued expenses 951949301.38 942387734.28
Pre-mature output VAT 180069149.72 102276707.30
Total 1132018451.10 1044664441.58
5.30 Long-term Borrowings
Items 31 December 2023 31 December 2022
Credit loans - 20000000.00
Guarantee loans 107000000.00 24900000.00
Interests 106256.94 44737.91
Total 107106256.94 44944737.91
5.31 Lease liabilities
~ 201 ~Annual Report 2023
Items 31 December 2023 31 December 2022
Lease payments 94538857.20 33494997.76
Less: Unrealised finance expenses 15386164.13 2659256.72
Subtotal 79152693.07 30835741.04
Less: lease liabilities due within one year 10771925.29 12204345.11
Total 68380767.78 18631395.93
5.32 Deferred Income
Increase during Decrease during
31 December 31 December
Items the reporting the reporting Reason
20222023
period period
Receipt of
asset-related
Government grants 103714978.95 5203400.00 8106974.13 100811404.82
government
grants
Total 103714978.95 5203400.00 8106974.13 100811404.82
5.33 Share Capital
Changes during the reporting period (+-)
31 December 31 December
Items Bonus Capitalisation of
2022 New issues Others Subtotal 2023
issues reserves
Number of
528600000.00-----528600000.00
total shares
5.34 Capital Reserves
Increase during the Decrease during the
Items 31 December 2022 31 December 2023
reporting period reporting period
Capital premium (share
6191894530.90--6191894530.90
premium)
Other capital reserves 32853136.20 - - 32853136.20
Total 6224747667.10 - - 6224747667.10
5.35 Other Comprehensive Income
Items 31 December Changes during the reporting period 31 December
~ 202 ~Annual Report 2023
2022 Less: Items 2023
previously
recognized in
other Attributable to Attributable to
Amount before Less: Income
comprehensive owners of the non-controlling
tax tax expenses
income being Company interest
reclassified to
current profit or
loss
(a)Items will not be
reclassified to profit or 1169591.46 6657868.13 - 1664467.03 2996040.66 1997360.44 4165632.12
loss
Including: Changes in
fair value of other
1169591.466657868.13-1664467.032996040.661997360.444165632.12
equity instrument
investments
(b)Items will be
reclassified to profit or -760851.85 -3608102.09 -1030330.20 -644442.97 -1808457.54 -124871.38 -2569309.39
loss
Including:
Reclassification of
-760851.85-3608102.09-1030330.20-644442.97-1808457.54-124871.38-2569309.39
financial assets to other
comprehensive income
Total 408739.61 3049766.04 -1030330.20 1020024.06 1187583.12 1872489.06 1596322.73
5.36 Surplus Reserves
Increase during
Decrease during the
Items 31 December 2022 the reporting 31 December 2023
reporting period
period
Statutory surplus reserves 269402260.27 269402260.27
Total 269402260.27 269402260.27
Note: Pursuant to the Company Law of the People's Republic of China and Articles of Association
the Company appropriates 10% of net profit to the statutory surplus reserves. If the accumulative
amount of legal surplus reserve is more than 50% of the registered capital of the Company it may
no longer be withdrawn.
5.37 Retained Earnings
Items 2023 2022
Balance as at the end of last period before adjustments 11497599306.54 9517374574.46
~ 203 ~Annual Report 2023
Items 2023 2022
Adjustments for the opening balance (increase /(decrease))
Balance as at the beginning of the reporting period after
11497599306.549517374574.46
adjustments
Add: net profit attributable to owners of the parent company
4589164052.803143144732.08
for the reporting period
Less: Transfer to statutory surplus reserves
Declaration of ordinary share dividends 1585800000.00 1162920000.00
Balance as at the end of the reporting period 14500963359.34 11497599306.54
5.38 Revenue and costs of sales
(a) General information
20232022
Items
Revenue Costs of sales Revenue Costs of sales
Principal activities 20153237192.18 4202683854.02 16624493486.59 3786375257.60
Other activities 100289405.84 37167052.89 88740666.93 29946787.41
Total 20253526598.02 4239850906.91 16713234153.52 3816322045.01
(b) Disaggregated information of revenue and costs of sales from Principal operating activities
20232022
Items
Revenue Costs of sales Revenue Costs of sales
Revenue by product type:
Distilled wine business 19638756672.91 3768057699.29 16167709250.64 3393328304.96
Others 614769925.11 471793207.62 545524902.88 422993740.05
Total 20253526598.02 4239850906.91 16713234153.52 3816322045.01
Revenue by operating area:
North China 1842994377.93 373249635.06 1325791564.93 300023290.91
Central China 17106718631.38 3637568886.44 14354624988.86 3305285716.04
South China 1282816365.91 224324231.97 1011003651.35 203868748.58
Internation 20997222.80 4708153.44 21813948.38 7144289.48
Total 20253526598.02 4239850906.91 16713234153.52 3816322045.01
Revenue by distribution
channel:
Online 729306974.15 188844601.39 610385143.59 140118759.04
Offline 19524219623.87 4051006305.52 16102849009.93 3676203285.97
Total 20253526598.02 4239850906.91 16713234153.52 3816322045.01
~ 204 ~Annual Report 2023
5.39 Taxes and Surcharges
Items 2023 2022
Consumption tax 2501645974.47 2355515748.99
City construction tax and educational
458794010.60391108828.32
surcharges
Property tax 23724880.08 21958265.05
Land use tax 26384275.09 20010214.84
Stamp duty 18766563.10 18045620.24
Others 20785958.55 17420644.59
Total 3050101661.89 2824059322.03
5.40 Selling and Distribution Expenses
Items 2023 2022
Personnel costs 1230880423.44 938740215.88
Travel 223518669.30 169521676.66
Advertisement 1101364892.63 995196089.71
Comprehensive promotion 2089071299.15 1814692295.39
Services 656190943.27 638147336.90
Others 135746829.46 111887440.59
Total 5436773057.25 4668185055.13
5.41 General and Administrative Expenses
Items 2023 2022
Personnel costs 933829716.03 790082663.30
Office costs 74060539.94 61689592.52
Repairs 52193470.08 55445533.41
Depreciation 74338166.89 69203388.39
Amortisation 35453212.98 34133133.16
Sewage 23269601.56 23964858.50
Travel 14824041.89 9914637.44
Utilities 13289220.75 11311612.00
Others 145888497.77 111034970.51
Total 1367146467.89 1166780389.23
5.42 Research and Development Expenses
~ 205 ~Annual Report 2023
Items 2023 2022
Personnel costs 46310706.51 36510926.32
Direct costs 12146049.05 9047992.47
Depreciation 3102642.32 2747013.50
Other related expenses 9387798.61 8361270.72
Total 70947196.49 56667203.01
5.43 Finance Costs
Items 2023 2022
Interest expenses 3289772.96 5679645.21
Including: Interest expenses for lease
1748169.191704930.85
liabilities
Less: Interest income 169297052.44 221450532.78
Net interest expenses -166007279.48 -215770887.57
Net foreign exchange losses 2682871.29 -417719.35
Bank charges and others 1080383.31 -110446.15
Total -162244024.88 -216299053.07
5.44 Other Income
Items 2023 2022 Related to assets /income
(i) Government grant
42104956.6546721259.52
recognised in other income
Including: Government
grant related to deferred 8106974.13 5916533.10 Related to assets
income
Government grant directly
recognised in current profit 33997982.52 40804726.42 Related to income
or loss
(ii) Others related to daily
operation activities and 5948371.72 -
recognised in other income
Total 48053328.37 46721259.52
5.45 Investment Income/(Losses)
Items 2023 2022
Investment income from long-term equity
212842.28941635.20
investments under equity method
~ 206 ~Annual Report 2023
Items 2023 2022
Gains on disposal of long-term equity
30015.47-
investments
Gains on disposal of held-for-trading
31441783.2113667018.06
financial assets
Gains from other equity instrument
747200.50957949.08
investment income during holding period
Gains from disposal of financial assets at
fair value through other comprehensive -38914035.00 -26471694.99
income
Others 144063.85 100708.20
Total -6338129.69 -10804384.45
5.46 Gains/(Losses) from Changes in Fair Values
Sources of gains on changes in fair value 2023 2022
Financial assets held-for-trading 19987547.42 29149125.30
Including: Changes in fair value of
--
derivatives
Total 19987547.42 29149125.30
5.47 Credit Impairment Losses
Items 2023 2022
Bad debt of notes receivable - -
Bad debt of accounts receivable 244557.52 1094557.71
Bad debt of other receivables 647052.88 -691336.22
Total 891610.40 403221.49
5.48 Asset Impairment Losses
Items 2023 2022
Impairment of inventories -30863140.12 -10302413.40
Impairment of fixed assets -190056.75 -674947.51
Impairment of intangible assets - -166872.39
Total -31053196.87 -11144233.30
5.49 Gains/ (losses) from Disposal of Assets
Items 2023 2022
~ 207 ~Annual Report 2023
Items 2023 2022
Gains/(losses) from disposal of fixed
assets construction in progress
437622.67886286.45
productive biological assets and intangible
assets not classified as held for sale
Including: Fixed assets 437622.67 886286.45
Total 437622.67 886286.45
5.50 Non-operating Income
Recognised in current
Items 2023 2022 non-recurring profit or
loss
Gains from damage or scrapping
389908.44370956.18389908.44
of non-current asset
Fine and compensation 56452237.38 39854588.12 56452237.38
Sale of scrap 5694719.36 4163898.52 5694719.36
Release of payables 20475919.42 4207463.06 20475919.42
Others 2054059.52 2171039.50 2054059.52
Total 85066844.12 50767945.38 85066844.12
5.51 Non-operating Expenses
Recognised in current
Items 2023 2022 non-recurring profit or
loss
Loss from damage or scrapping
2890802.015923667.722890802.01
of non-current assets
Donations 24281767.24 22359038.92 24281767.24
Others 8678557.09 4723657.20 8678557.09
Total 35851126.34 33006363.84 35851126.34
5.52 Income Tax Expenses
(a) Details of income tax expenses
Items 2023 2022
Current tax expenses 1596955748.41 1273456377.00
Deferred tax expenses 8920263.25 -54798492.76
Total 1605876011.66 1218657884.24
(b) Reconciliation of accounting profit and income tax expenses
~ 208 ~Annual Report 2023
Items 2023
Profit before tax 6332145832.55
Income tax expense at the statutory /applicable tax rate 1583036458.14
Effect of different tax rate of subsidiaries -10664943.74
Adjustments of impact from prior period income tax 21264002.52
Effect of income that is exempt from taxation -240010.70
Effect of non-deductible costs expenses or losses 27197917.99
Effect of previously unrecognised deductible losses recognised as deferred tax
-
assets
Effect of deductible temporary differences and deductible losses not recognised as
-
deferred tax assets
R&D expenses plus deduction -14717412.55
Impact of tax rate changes -
Exemption -
Income tax expenses 1605876011.66
5.53 Notes to the Statement of Cash Flow
(a) Other cash received relating to operating activities
Items 2023 2022
Margin deposits and quality warranty 464744709.38 916949747.02
Government grants received 41653669.06 48435078.81
Bank interests received 169297052.44 80375152.64
Release of restricted cash 667187706.08 133372593.16
Others 80809234.08 56190183.46
Total 1423692371.04 1235322755.09
(b) Other cash payments relating to operating activities
Items 2023 2022
Paid expenses 2797006317.12 3117448326.00
Margin deposits and quality warranty 3763254.60 5855826.64
Cash restricted for bank acceptance and
1290204326.83667187706.08
guarantee letters
Others 110600772.48 130000657.32
Total 4201574671.03 3920492516.04
(c) Other cash payments relating to financing activities
Items 2023 2022
~ 209 ~Annual Report 2023
Items 2023 2022
Payment of minority shareholder equity 5878415.17 -
Rentals paid 16976402.11 16242902.55
Total 22854817.28 16242902.55
(i) Changes in liabilities arising from financing activities
Increase in the current period Decrease in the current period
Items 31 December 2022 Changes in Changes in 31 December 2023
Changes in cash Changes in cash
non-cash non-cash
Short-term
83232176.31--83232176.31--
Borrowings
Long-term
44944737.91158200000.00-26008383.7570030097.22107106256.94
Borrowings
Lease
18631395.93-64149802.533628505.3910771925.2968380767.78
liabilities
lease
liabilities due
12204345.11-15001049.0913347896.723085572.1910771925.29
within one
year
Long-term
Borrowings
30033000.00-70030097.2230010000.00-70053097.22
due within
one year
Total 189045655.26 158200000.00 149180948.84 156226962.17 83887594.70 256312047.23
5.54 Supplementary Information to the Statement of Cash Flows
(a) Supplementary information to the statement of cash flows
Supplementary information 2023 2022
(i) Adjustments of net profit to cash flows from
operating activities:
Net profit 4726269820.89 3251834164.49
Add: Provisions for impairment of assets 31053196.87 11144233.30
Impairment Loss of Credit -891610.40 -403221.49
Depreciation of fixed assets Investment Properties oil
301390656.72226309432.46
and gas asset and productive biological assets
Depreciation of right to use assets 15069255.81 14568082.74
Amortisation of intangible assets 44249725.47 42703216.86
Amortisation of long-term deferred expenses 28717241.10 30753707.48
~ 210 ~Annual Report 2023
Supplementary information 2023 2022
Losses /(gains) on disposal of fixed assets intangible
-437622.67-886286.45
assets and other long-term assets
Losses /(gains) on scrapping of fixed assets 2500893.57 5552711.54
Losses /(gains) on changes in fair value -19987547.42 -29149125.30
Finance costs /(income) 3289772.96 -135923900.43
Investment losses /(income) 6338129.69 10804384.45
Decreases /(increases) in deferred tax assets -30468340.09 -141292227.13
Increases /(decreases) in deferred tax liabilities 40550359.86 87139896.77
Decreases /(increases) in inventories -1479764803.69 -1386823935.09
Decreases /(increases) in operating receivables -1914106758.28 -2104507814.27
Increases /(decreases) in operating payables 2075245957.95 3092718666.39
Others 667187706.08 133372593.16
Net cash flows from operating activities 4496206034.42 3107914579.48
(ii) Significant activities not involving cash receipts and
payments:
Conversion of debt into capital - -
Convertible corporate bonds maturing within one year - -
Fixed asset acquired through financial leasing - -
(iii) Net increases in cash and cash equivalents:
Cash at the end of the reporting period 14676167417.36 13105373435.22
Less: Cash at the beginning of the reporting period 13105373435.22 6057550178.60
Add: Cash equivalents at the end of the reporting period - -
Less: Cash equivalents at the beginning of the reporting
--
period
Net increase in cash and cash equivalents 1570793982.14 7047823256.62
Note: Others represented impact of withdraw restricted cash on the net cash flows from operating
activities for the period.(b) The components of cash and cash equivalents
Items 31 December 2023 31 December 2022
(i) Cash 14676167417.36 13105373435.22
Including: Cash on hand 78223.44 111642.11
Cash in bank available for immediate
14404178940.2913098187278.75
use
Other monetary funds available for
271910253.637074514.36
immediate use
~ 211 ~Annual Report 2023
Items 31 December 2023 31 December 2022
(ii) Cash equivalents - -
Including: Bond investments maturing within
--
three months
(iii) Cash and cash equivalents at the end of the
14676167417.3613105373435.22
reporting period
Including: Restricted cash and cash equivalents
of the parent company and the subsidiaries of - -
the group
5.55 Assets with restricted ownership or use rights
Items 2023 Reason
Fixed term deposits and margin
Monetary funds 1290204326.83
deposits for bank acceptance etc.Intangible Assets 54303340.26 Loan pledge
Total 1344507667.09 ——
5.56 Leases
(a) The Company as a lessee
Items 2023
Expenses for short-term lease under simplified method 3115790.51
Expenses for lease of low value asset (except for short-term lease)
-
under simplified method
Interest expense of lease liabilities 1748169.19
Variable lease payments not included in lease liabilities recognised
-
in current profit or loss
Income from subleasing the right-of-use assets -
Cash outflows related to leases 20861557.87
Profit or loss in sale and leaseback transaction -
(b) The Company as a lessor
Operating lease
Items 2023
Lease income 11480544.91
Including: income related to variable lease payments not included
-
in lease receivables
~ 212 ~Annual Report 2023
6. RESEARCH AND DEVELOPMENT EXPENDITURES
6.1 R&D expenditures by nature
Items 2023 2022
Labor costs 46310706.51 36510926.32
Material costs 12146049.05 9047992.47
Depreciation costs 3102642.32 2747013.50
Others 9387798.61 8361270.72
Total 70947196.49 56667203.01
Including：Expensed R&D expenditures 70947196.49 56667203.01
Capitalized R&D expenditures - -
7. CHANGES IN THE SCOPE OF CONSOLIDATION
7.1 Other Reasons of Changes in the Scope of Consolidation
Compared with the previous period the company set up new subsidiaries "Anhui Gu Qi Distillery
Co. Ltd." "Guizhou Treasured Distillery Sales Co. Ltd." "Wuhan Gu Lou Junhe Trading Co.Ltd." "Wuhan Gu Lou Juntai Trading Co. Ltd." "Xiaogan Gu Lou Tiancheng Trading Co. Ltd.".The company liquidation subsidiary "Anhui Anjie Technology Co. Ltd."
8. INTERESTS IN OTHER ENTITIES
8.1 Interests in Subsidiaries
(a) Composition of corporate group
Percentage of equity
Principal place Registered Nature of interests by the Company Ways of
Name of subsidiary Abbreviation
of business Address business (%) acquisition
Direct Indirect
Bozhou Gujing
GJ Sales Bozhou Anhui Bozhou Anhui Trading 100.00 —— Incorporation
Sales Co. Ltd.Anhui Longrui Glass
Longrui Glass Bozhou Anhui Bozhou Anhui Production 100.00 —— Incorporation
Co. Ltd.Anhui Jiuan Electric Machinery
Jiuan Electric Bozhou Anhui Bozhou Anhui 100.00 —— Incorporation
Equipments Co. production
~ 213 ~Annual Report 2023
Percentage of equity
Principal place Registered Nature of interests by the Company Ways of
Name of subsidiary Abbreviation
of business Address business (%) acquisition
Direct Indirect
Ltd.Anhui Jinyunlai
Culture Media Co. Jinyunlai Hefei Anhui Hefei Anhui Advertising 100.00 —— Incorporation
Ltd.Anhui Ruisi Weier
Technology Co. Ruisi Weier Bozhou Anhui Bozhou Anhui R&D 100.00 —— Incorporation
Ltd.Shanghai Gujing Business
Jinhao Hotel Hotel combination
Jinhao Hotel Shanghai Shanghai 100.00 ——
Management Co. management under common
Ltd. control
Business
Baozhou Gujing
Hotel combination
Guest House Co. GJ Guest House Bozhou Anhui Bozhou Anhui 100.00 ——
management under common
Ltd.control
Anhui Yuanqing
YQ Environment Sewage
Environment Bozhou Anhui Bozhou Anhui 100.00 —— Incorporation
Protection processing
Protection Co. Ltd.Anhui Gujing
Yunshang
GJ E-Commerce Hefei Anhui Hefei Anhui E-commerce 100.00 —— Incorporation
E-Commerce Co.Ltd.Anhui Runan Xinke
Testing Technology Runan Xinke Bozhou Anhui Bozhou Anhui Food testing 100.00 —— Incorporation
Co. Ltd.Anhui Jiudao
Culture Media Co. Jiudao Media Hefei Anhui Hefei Anhui Advertising 100.00 —— Incorporation
Ltd.Anhui Gujing
Distillery Wine
Hotel
Theme Hotel Theme Hotel Bozhou Anhui Bozhou Anhui 100.00 —— Incorporation
management
Management Co.Ltd
Anhui Gu Qi Anhui Gu Qi
Bozhou Anhui Bozhou Anhui Production 60.00 —— Incorporation
Distillery Co. Ltd. Distillery
Business
Huanghelou
HHL Distillery Wuhan Hubei Wuhan Hubei Production 51.00 —— combination not
Distillery Co. Ltd.under common
~ 214 ~Annual Report 2023
Percentage of equity
Principal place Registered Nature of interests by the Company Ways of
Name of subsidiary Abbreviation
of business Address business (%) acquisition
Direct Indirect
control
Business
HHL Distillery combination not
HHL Xianning Xianning Hubei Xianning Hubei Production —— 51.00
(Xianning) Co. Ltd. under common
control
Business
HHL Distillery combination not
HHL Suizhou Suizhou Hubei Suizhou Hubei Production —— 51.00
(Suizhou) Co. Ltd. under common
control
Business
Hubei Junlou
combination not
Culture Travel Co. Junlou Culture Wuhan Hubei Wuhan Hubei Advertising —— 51.00
under common
Ltd.control
Hubei HHL
HHL Beverage Xianning Hubei Xianning Hubei Production —— 51.00 Incorporation
Beverage Co. Ltd.Wuhan Yashibo
Technology Co. Yashibo Wuhan Hubei Wuhan Hubei R&D —— 51.00 Incorporation
Ltd.Hubei Xinjia Testing
Technology Co. Xinjia Testing Xianning Hubei Xianning Hubei Food testing —— 51.00 Incorporation
Ltd.Wuhan Tianlong Business
Jindi Technology combination not
Tianlong Jindi Wuhan Hubei Wuhan Hubei Trading —— 51.00
Development Co. under common
Ltd. control
Business
Xianning Junhe combination not
Xianning Junhe Xianning Hubei Xianning Hubei Trading —— 51.00
Sales Co. Ltd. under common
control
Wuhan Junya Sales
Junya Sales Wuhan Hubei Wuhan Hubei Trading —— 51.00 Incorporation
Co. Ltd.Suizhou Junhe
Suizhou Junhe Suizhou Hubei Suizhou Hubei Trading —— 51.00 Incorporation
Trading Co. Ltd.Huanggang Junya
Huanggang Junya Huanggang Hubei Huanggang Hubei Trading —— 51.00 Incorporation
Trading Co. Ltd.Wuhan Gulou Junhe Wuhan Gulou
Wuhan Hubei Wuhan Hubei Trading —— 51.00 Incorporation
Trading Co. Ltd. Junhe
~ 215 ~Annual Report 2023
Percentage of equity
Principal place Registered Nature of interests by the Company Ways of
Name of subsidiary Abbreviation
of business Address business (%) acquisition
Direct Indirect
Wuhan Gulou Juntai Wuhan Gulou
Wuhan Hubei Wuhan Hubei Trading —— 51.00 Incorporation
Trading Co. Ltd. Juntai
Xiaogan Gulou
Xiaogan Gulou
Tiancheng Trading Xiaogan Hubei Xiaogan Hubei Trading —— 51.00 Incorporation
Tiancheng
Co. Ltd.Business
Anhui Mingguang Mingguang combination not
Chuzhou Anhui Chuzhou Anhui Production 60.00 ——
Distillery Co. Ltd. Distillery under common
control
Business
Mingguang
combination not
Tiancheng Mingjiu Tiancheng Sales Chuzhou Anhui Chuzhou Anhui Trading —— 60.00
under common
Sales Co. Ltd.control
Fengyang Business
Xiaogangcun combination not
FY Xiaogangcun Chuzhou Anhui Chuzhou Anhui Production —— 42.00
Mingjiu Distillery under common
Co. Ltd. control
Anhui Jiuhao
ChinaRail
Construction Jiuhao ChinaRail Bozhou Anhui Bozhou Anhui Construction 52.00 —— Incorporation
Engineering Co.Ltd.Anhui Zhenrui
Construction Zhenrui
Bozhou Anhui Bozhou Anhui Construction —— 52.00 Incorporation
Engineering Co. Construction
Ltd.Business
Guizhou Renhuai
combination not
Maotai Treasure Treasure Distillery Guizhou Renhuai Guizhou Renhuai Production 60.00 ——
under common
Distillery Co. Ltd.control
Guizhou Renhuai
Maotai Treasure Treasure Distillery
Guizhou Renhuai Guizhou Renhuai Trading —— 60.00 Incorporation
Distillery Sales Sales
CO.Ltd.Business
Anhui Gujing Health GJ Health combination not
Bozhou Anhui Bozhou Anhui Production 60.00 ——
Technology Co. Ltd Technology under common
control
~ 216 ~Annual Report 2023
Percentage of equity
Principal place Registered Nature of interests by the Company Ways of
Name of subsidiary Abbreviation
of business Address business (%) acquisition
Direct Indirect
Business
Anhui Maiqi
Maiqi combination not
Biotechnology Co. Bozhou Anhui Bozhou Anhui R&D —— 60.00
Biotechnology under common
Ltd
control
Anhui Business
Yangshengtianxia combination not
Brand Operation Hefei Anhui Hefei Anhui Advertising —— 60.00
Brand Operation under common
Co. Ltd. control
Hainan
Business
Yangshengtianxia
combination not
Biotechnology Biotechnology Lingshui Hainan Lingshui Hainan Trading —— 60.00
under common
Development Co.control
Ltd
(b) Significant non-wholly owned subsidiaries
Proportion of Profit or loss Dividends declared to
ownership interest attributable to non- distribute to Non-controlling
Name of subsidiary held by non- controlling interests non-controlling interests at the end of
controlling during the reporting interests during the the reporting period
interests period reporting period
HHL Distillery 49.00 106071079.03 53601632.42 602267392.05
(c) Main financial information of significant non-wholly owned subsidiaries
31 December 2023
Name of
Non-current Current Non-current
subsidiary Current assets Total assets Total liabilities
assets liabilities liabilities
HHL
1269187978.691167449470.702436637449.39939863270.35267657052.441207520322.79
Distillery
(Continued)
31 December 2022
Name of
Current Non-current
subsidiary Current assets Non-current assets Total assets Total liabilities
liabilities liabilities
HHL
1174784972.791095159397.172269944369.96952593793.76195313952.861147907746.62
Distillery
~ 217 ~Annual Report 2023
2023
Total
Name of subsidiary Net cash flows from
Revenue Net profit/(loss) comprehensive
operating activities
income
HHL Distillery 1827457484.53 216726429.40 216471589.84 181674168.21
(Continued)
2022
Total
Name of subsidiary Net cash flows from
Revenue Net profit/(loss) comprehensive
operating activities
income
HHL Distillery 1753497722.05 213913938.26 214247443.52 136032287.63
8.2 Interests in Joint Arrangements or Associates
(a) Significant joint ventures or associates
The Company had no significant joint venture or associate.(b) Summarized financial information about insignificant joint ventures and associates
31 December 2023/2023 31 December 2022/2022
Joint venture：
Total carrying amount of investments
The aggregate amount of below items
calculated based on proportion of equity
interests:
—Net profit/(loss)
—Other comprehensive income
—Total comprehensive income
Associate：
Total carrying amount of investments 10367078.26 10154235.98
The aggregate amount of below items
calculated based on proportion of equity
interests:
—Net profit/(loss) 212842.28 941635.20
—Other comprehensive income
—Total comprehensive income 212842.28 941635.20
~ 218 ~Annual Report 2023
9. GOVERNMENT GTRANTS
9.1 Government grants recognised as receivables
As at 31 December 2023 the amount of government grants recognised as receivables is RMB 0.
9.2 Liability items that involve government grants
Items Amount
Amount
presented Increase in recognised in Other
recognised in Related
in the government non-operating changes
Balance as at 31 other income Balance as at 31 to assets
statement grants during income during the
December 2022 during the December 2023 or
of the reporting during the reporting
reporting income
financial period reporting period
period
position period
Deferred Related
103714978.955203400.008106974.13100811404.82
income to assets
Total 103714978.95 5203400.00 8106974.13 100811404.82
9.3 Government grants recognised in current profit or loss
Items presented in income statement 2023 2022
Other income 42104956.65 46721259.52
Finance costs -928125.00 -9666.66
10. RISKS RELATED TO FINANCIAL INSTRUMENTS
Risks related to the financial instruments of the Company arise from the recognition of various
financial assets and financial liabilities during its operation including credit risk liquidity risk and
market risk.Management of the Company is responsible for determining risk management objectives and
policies related to financial instruments. Operational management is responsible for the daily risk
management through functional departments (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.
10.1 Credit Risk
~ 219 ~Annual Report 2023
Credit risk is the risk of one party of the financial instrument face to a financial loss because the
other party of the financial instrument fails to fulfill its obligation. The credit risk of the Company is
related to cash and equivalent notes receivable accounts receivables other receivables and
long-term receivables. Credit risk of these financial assets is derived from the counterparty’s breach
of contract. The maximum risk exposure is equal to the carrying amount of these financial
instruments.Cash and cash equivalent of the Company has lower credit risk as they are mainly deposited in
such financial institutions as commercial bank of which the Company thinks with higher reputation
and financial position. For notes receivable other receivables and long-term receivables the
Company establishes related policies to control their credit risk exposure. The Company assesses
credit capability of its customers and determines their credit terms based on their financial position
possibility of the guarantee from third party credit record and other factors (such as current market
status etc.). The Company monitors its customers’ credit record periodically and for those
customers with poor credit record the Company will take measures such as written call shortening
or cancelling their credit terms so as to ensure the overall credit risk of the Company is controllable.(i) Determination of significant increases in credit risk
The Company assesses at each reporting date as to whether the credit risk on financial instruments
has increased significantly since initial recognition. When the Company determines whether the
credit risk has increased significantly since initial recognition it considers based on reasonable and
supportable information that is available without undue cost or effort including quantitative and
qualitative analysis of historical information external credit ratings and forward-looking
information. The Company determines the changes in the risk of a default occurring over the
expected life of the financial instrument through comparing 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 based on individual financial instrument or a group of
financial instruments with the similar credit risk characteristics.When met one or more of the following quantitative or qualitative criteria the Company determines
that the credit risk on financial instruments has increased significantly: the quantitative criteria
applied mainly because as at the reporting date the increase in the probability of default occurring
over the lifetime is more than a certain percentage since the initial recognition; the qualitative
criteria applied if the debtor has adverse changes in business and economic conditions early
warning list of customer and etc.(ii) Definition of credit-impaired financial assets
The criteria adopted by the Company for determination of credit impairment are consistent with
internal credit risk management objectives of relevant financial instruments in considering both
quantitative and qualitative indicators.~ 220 ~Annual Report 2023
When the Company assesses whether the debtor has incurred the credit impairment the main
factors considered are as following: Significant financial difficulty of the issuer or the borrower; a
breach of contract e.g. default or past-due event; a lender having granted a concession to the
borrower for economic or contractual reasons relating to the borrower’s financial difficulty that the
lender would not otherwise consider; the probability that the borrower will enter bankruptcy or
other financial re-organisation; the disappearance of an active market for the financial asset because
of financial difficulties of the issuer or the borrower; the purchase or origination of a financial asset
at a deep discount that reflects the incurred credit losses.(iii) The parameter of expected credit loss measurement
The company measures impairment provision for different assets with the expected credit loss of
12-month or the lifetime based on whether there has been a significant increase in credit risk or
credit impairment has occurred. The key parameters for expected credit loss measurement include
default probability default loss rate and default risk exposure. The Company sets up the model of
default probability default loss rate and default risk exposure in considering the quantitative
analysis of historical statistics (such as counterparties’ ratings guarantee method and collateral type
repayment method etc.) and forward-looking information.Relevant definitions are as following:
Default probability refers to the probability of the debtor will fail to discharge the repayment
obligation over the next 12 months or the entire remaining lifetime;
Default loss rate refers to the Company's expectation of the loss degree of default risk exposure.The default loss rate varies depending on the type of counterparty recourse method and priority
and the collateral. The default loss rate is the percentage of the risk exposure loss when default has
occurred and it is calculated over the next 12 months or the entire lifetime;
The default risk exposure refers to the amount that the company should be repaid when default has
occurred in the next 12 months or the entire lifetime. Both the assessment of significant increase in
credit risk of forward-looking information and the calculation of expected credit losses involve
forward-looking information. Through historical data analysis the Company identifies key
economic indicators that have impact on the credit risk and expected credit losses for each business.The maximum exposure to credit risk of the Company is the carrying amount of each financial asset
in the statement of financial position. The Company does not provide any other guarantees that may
expose the Company to credit risk.For the accounts receivable of the Company the amount of top 5 clients represents 62.30% of the
total; for the other receivables the amount of the top five entities represents 59.11% of the total.
10.2 Liquidity Risk
~ 221 ~Annual Report 2023
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.
10.3 Market Risk
Market risk of financial instruments refers to the risk that the fair value or future cash flow of
financial instruments will fluctuate due to changes in market prices. Market risk mainly includes
foreign exchange risk and interest rate risk.(a) Foreign currency risk
Foreign currency risk of the Company mainly arise from foreign currency assets and liabilities
denominated in currency other than the Company’s functional currency. The main business of the
Company is located in Chinese Mainland and the main business is settled in RMB. There is only a
small amount of export business which has a small proportion of income scale and impact and has
little exchange rate risk.(b) Interest rate 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.(c) 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.
11. FAIR VALUE DISCLOSURES
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.~ 222 ~Annual Report 2023
Level 3: Inputs are unobservable inputs for the assets or liabilities
11.1 Assets and Liabilities Measured at Fair Value at 31 December 2023
Fair value at 31 December 2023
Items
Level 1 Level 2 Level 3 Total
Recurring fair value measurements
(a) financial assets held-for-trading - - 719987547.42 719987547.42
(i) Financial assets at fair value through
--719987547.42719987547.42
profit or loss
1.Debt instruments - - - -
2.Structural financial products - - 719987547.42 719987547.42
3.Fund investments - - - -
(b) Financial assets at fair value through
--1020665773.801020665773.80
other comprehensive income
1.Accounts receivable financing - - 957560115.73 957560115.73
2.Other equity instrument investment - - 63105658.07 63105658.07
Total assets measured at fair value on a
--1740653321.221740653321.22
recurring basis
The fair value of financial instruments traded in an active market is based on quoted market prices
at the reporting date. The fair value of financial instruments not traded in an active market is
determined by using valuation techniques. Specific valuation techniques used to value the above
financial instruments include discounted cash flow and market approach to comparable company
model. Inputs in the valuation technique include risk-free interest rates benchmark interest rates
exchange rates credit spreads liquidity premiums discount for lack of liquidity.
11.2 Fair Value of Financial Assets or Financial Liabilities which are not Measured at Fair
Value
The financial assets and financial liabilities of the Company measured at amortised cost mainly
include: cash and cash equivalents notes receivable accounts receivable other receivables debt
investments short-term borrowings notes payable accounts payable other payables long-term
borrowings maturing within one year long-term payables long-term borrowings and bonds
payable.
12. RELATED PARTIES AND RELATED PARTY TRANSACTIONS
Recognition of related parties: The Company has control or joint control of or exercise significant
influence over another party; or the Company and another party are controlled or jointly controlled
by the same third party.~ 223 ~Annual Report 2023
12.1 General Information of the Parent Company
Percentage of equity Voting rights in
Registered Nature of the Registered
Name of the parent interests in the the Company
address business capital
Company (%) (%)
Production of
beverage
construction
GJ Group Bozhou Anhui 1000 million 51.34 51.34
materials
plastic
products.The Company’s ultimate controller is the State-owned Asset Management Commission of the
People's Government of Baozhou Anhui
12.2 General Information of Subsidiaries
Details of the subsidiaries please refer to Notes 8 INTERESTS IN OTHER ENTITIES.
12.3 Joint Ventures and Associates of the Company
(a) General information of significant joint ventures and associates
Details of significant joint ventures and associates please refer to Notes 8 INTERESTS IN OTHER
ENTITIES
12.4 Other Related Parties of the Company
Name Relationship with the Company
Nanjing Suning Property Development Co. Ltd.(Suning Controlled by ZHANG Guiping the non-executive director
Property Development) of the Company
Controlled by the Company's controlling shareholder or
Anhui Ruijing Shanglv (Group) Co. Ltd. (RJSL Group)
ultimate controller
Anhui Ruijing Shanglv (Group) Co. Ltd. Hefei Gujing Controlled by the Company's controlling shareholder or
Holiday Inn (RJSL Holiday Inn) ultimate controller
Bozhou Gujing Huishenglou Catering Co. Ltd.(GJ Controlled by the Company's controlling shareholder or
Huishenglou Catering) ultimate controller
Anhui Haochidian Catering Co. Ltd. (Haochidian Controlled by the Company's controlling shareholder or
Catering) ultimate controller
Controlled by the Company's controlling shareholder or
Anhui Ruijing Catering Co. Ltd. (Ruijing Catering)
ultimate controller
Controlled by the Company's controlling shareholder or
Shanghai Beihai Hotel Co. Ltd. (Beihai Hotel)
ultimate controller
~ 224 ~Annual Report 2023
Anhui Gujing Hotel Development Co. Ltd.(GJ Hotel Controlled by the Company's controlling shareholder or
Development) ultimate controller
Anhui Huixin Financial Investment Group Co. Ltd.(Huixin Controlled by the Company's controlling shareholder or
Financial Investment) ultimate controller
Controlled by the Company's controlling shareholder or
Bozhou Anxin Small Loan Co. Ltd. (Anxin Small Loan)
ultimate controller
Controlled by the Company's controlling shareholder or
Anhui Hengxin Pawnshop Co. Ltd. (Hengxin Pawnshop)
ultimate controller
Controlled by the Company's controlling shareholder or
Anhui Ruixin Pawnshop Co. Ltd. (Ruixin Pawnshop)
ultimate controller
Anhui Zhongxin Financial Leasing Co. Ltd.(Zhongxin Controlled by the Company's controlling shareholder or
Financial Leasing) ultimate controller
Controlled by the Company's controlling shareholder or
Anhui Lixin E-Commerce Co. Ltd. (Lixin E-Commerce)
ultimate controller
Anhui Youxin Financing Guarantee Co Ltd. (Youxin Controlled by the Company's controlling shareholder or
Guarantee) ultimate controller
Hefei Longxin Corporate Management Advisory Co. Ltd. Controlled by the Company's controlling shareholder or
(Longxin Advisory) ultimate controller
Anhui Chuangxin Equity Investment Co. Ltd.(Chuangxin Controlled by the Company's controlling shareholder or
Equity Investment) ultimate controller
Anhui Lejiu Jiayuan Travel Management Co. Ltd. (Lejiu Controlled by the Company's controlling shareholder or
Jiayuan) ultimate controller
Controlled by the Company's controlling shareholder or
Anhui Shenglong Trading Co. Ltd. (Shenglong Trading)
ultimate controller
Controlled by the Company's controlling shareholder or
Anhui Gujing Health Industry Co. Ltd. (Health Industry)
ultimate controller
Controlled by the Company's controlling shareholder or
Bozhou Guest House Co. Ltd. (Bozhou Guest House)
ultimate controller
Dongfang Ruijing Enterprise Investment Co. Controlled by the Company's controlling shareholder or
Ltd.(Dongfang Ruijing) ultimate controller
Anhui Gujing International Development Co. Ltd.(GJ Controlled by the Company's controlling shareholder or
International) ultimate controller
Dazhongyuan Jiugu Cultural Tourism Development Co. Controlled by the Company's controlling shareholder or
Ltd. (Dazhongyuan Jiugu Cultural) ultimate controller
Anhui Jiuan Construction Management Advisory Co. Controlled by the Company's controlling shareholder or
Ltd.(Jiuan Advisory) ultimate controller
12.5 Related Party Transactions
(a) Purchases or sales of goods rendering or receiving of services
Purchases of goods receiving of services:
~ 225 ~Annual Report 2023
Related parties Nature of the transaction(s) 2023 2022
Bozhou Guest House Purchases of materials 8070.80 -
Bozhou Guest House Receiving catering and accommodation 9206704.05 2380785.35
GJ Huishenglou Catering Receiving catering and accommodation 6731462.40 1081439.85
Haochidian Catering Receiving catering and accommodation - 2478493.67
GJ Hotel Development Receiving catering and accommodation 1459825.47 456528.55
GJ Hotel Development Purchases of materials 43893.81 -
RJSL Group Purchase of materials and services 54513.27 101061.95
RJSL Group Receiving catering and accommodation 10358.79 176813.91
RJSL Holiday Inn Receiving catering and accommodation 224485.38 35418.95
RJSL Holiday Inn Purchase of materials and services 620370.39 582276.00
Dazhongyuan Jiugu Cultural Purchases of materials 10399.15 -
Youxin Guarantee Receiving services 47169.81 53543.69
Jiuan Advisory Advisory and assurance 8471196.45 5064377.44
Total —— 26888449.77 12410739.36
Sales of goods and rendering of services:
Related parties Nature of the transaction(s) 2023 2022
Shenglong Trading Sales of distilled wine 2525957.53 1712094.67
RJSL Group Sales of distilled wine 31460.18 -
GJ Hotel Development Provision of utilities 165580.57 175655.64
GJ Group Provision of catering and accommodation 367493.10 120731.75
GJ Group Sales of small materials 363835.13 47227.48
GJ Hotel Development Sales of distilled wine 474538.92 539469.03
RJSL Group Provision of catering and accommodation 12299.54 10823.97
Bozhou Guest House Sales of small materials 95301.17 -
Bozhou Guest House Sales of distilled wine 24371.68 -
Huixin Financial Investment Sales of distilled wine 2309.73 59146.02
Huixin Financial Investment Sales of small materials 3716.81 -
GJ Huishenglou Catering Sales of distilled wine 15929.20 -
GJ Huishenglou Catering Sales of small materials 18017.72 -
Anxin Small Loan Sales of distilled wine 3504.42 65572.57
Haochidian Catering Sales of distilled wine 8123.89 -
Haochidian Catering Sales of small materials 13538.02 -
Zhongxin Financial Leasing Sales of distilled wine 637.17 15358.41
Zhongxin Financial Leasing Sales of small materials 1061.95 -
~ 226 ~Annual Report 2023
Related parties Nature of the transaction(s) 2023 2022
Hengxin Pawnshop Sales of distilled wine 1274.34 24573.45
Hengxin Pawnshop Sales of small materials 2123.89 -
Jiuan Advisory Sales of distilled wine 75212.40 101317.70
Beihai Hotel Sales of distilled wine 5575.22 -
Beihai Hotel Sales of small materials 354.00 -
Lejiu Jiayuan Sales of distilled wine 11155.76
Shenglong Trading Provision of catering and accommodation 11626.00 3140.00
Lejiu Jiayuan Provision of utilities 1346.46 4962.36
Ruixin Pawnshop Sales of distilled wine 637.17 12286.72
Ruixin Pawnshop Sales of small materials 1061.95 -
Youxin Guarantee Sales of distilled wine 637.17 8718.59
Youxin Guarantee Sales of small materials 1061.95 -
Bozhou Guest House Provision of construction services 707.55 14758223.32
Jiuan Advisory Provision of catering and accommodation 4597.00 8600.00
Longxin Advisory Sales of distilled wine 159.29 3071.68
Jiuan Advisory Sales of small materials 74286.24 3412.25
Longxin Advisory Sales of small materials 265.49 -
Anxin Small Loan Sales of small materials 15752.21 -
RJSL Holiday Inn Sales of small materials 19928.17 -
RJSL Holiday Inn Provision of catering and accommodation 1276.02 -
Shenglong Trading Sales of small materials 17778.77 -
RJSL Holiday Inn Sales of distilled wine 17690.27 -
RJSL Group Sales of small materials 7962.83 128.32
Dongfang Ruijing Provision of catering and accommodation 66037.74 82528.93
GJ Hotel Development Provision of catering and accommodation 2153.31 14266.98
GJ Hotel Development Sales of small materials 58004.73 113.27
Total —— 4515186.90 17782578.87
(b) Leases
The Company as lessor:
The lessee Type of assets 2023 2022
GJ Hotel Development Houses and buildings 1392871.94 1166083.56
Total —— 1392871.94 1166083.56
The Company as lessee:
The lessor Type of assets 2023
~ 227 ~Annual Report 2023
Expenses for
short-term
Variable lease
lease and lease Lease payment Interest Increase in
payments not
of low value for current expense of right-of-use
included in
asset under period lease liabilities assets
lease liabilities
simplified
method
Houses and
GJ Group 931328.78 - 981843.88 - -
buildings
Suning
Houses and
Property - - 2152500.00 558931.43 -
buildings
Development
Total —— 931328.78 - 3134343.88 558931.43 -
(Continued)
2022
Expenses for
short-term
Variable lease
lease and lease Lease payment Interest Increase in
The lessor Type of assets payments not
of low value for current expense of right-of-use
included in
asset under period lease liabilities assets
lease liabilities
simplified
method
Houses and
GJ Group 1090629.08 - 1149108.20 - -
buildings
Suning
Houses and
Property - - 2100000.00 634212.08 -
buildings
Development
Total —— 1090629.08 - 3249108.20 634212.08 -
(d) Key management personnel compensation
Items 2023 2022
Key management personnel
27.67million 21.00million
compensation
12.6 Receivables and Payables with Related Parties
Items Related parties 31 December 2023 31 December 2022
Contract assets Bozhou Guest House - 1855188.15
Contract liabilities Bozhou Guest House 15988.44 -
Contract liabilities GJ Huishenglou Catering 5070.80 -
~ 228 ~Annual Report 2023
Items Related parties 31 December 2023 31 December 2022
Contract liabilities RJSL Group 221.12 221.12
Contract liabilities GJ International - 58849.56
Contract liabilities GJ Hotel Development - 148.67
Accounts payable Jiuan Advisory 4711062.24 2151065.65
Accounts payable GJ Hotel Development 6500.00 -
Accounts payable Bozhou Guest House 29768.32 -
Other payables RJSL Group - 115533.60
Other payables GJ Hotel Development 50000.00 50000.00
Other payables Jiuan Advisory 18000.00 -
13. COMMITMENTS AND CONTINGENCIES
13.1 Significant Commitments
As at 31 December 2023 the Company has no significant commitments need to be disclosed.
13.2 Contingencies
As at 31 December 2023 the Company has no significant contingencies need to be disclosed.
14. EVENTS AFTER THE REPORTING PERIOD
14.1 Profit Distribution
The Company proposes to pay a cash dividend of 45.00 yuan (including tax) and 0 bonus shares
(including tax) to all shareholders for every 10 shares of the company's total share capital of
528600000 shares by the end of 2023 without converting the surplus fund into additional share
capital.Other than the above as at April 26 2024 the Company had no other post-balance sheet events that
required disclosure.
15. OTHER SIGNIFICANT MATTERS
15.1 Segment Information
In accordance with the Company’s internal management and reporting structure segment reporting
is not applicable.
16. NOTES TO THE MAIN ITEMS OF THE FINANCIAL STATEMENTS OF THE
~ 229 ~Annual Report 2023
PARENT COMPANY
16.1 Accounts Receivable
(a) No account receivable as of 31 December 2023.(b) No account receivable as of 31 December 2022.(c) Impairment movement for the period was not applicable for accounts receivable.
16.2 Other Receivables
(a) Other receivables by category
Items 31 December 2023 31 December 2022
Interest receivable - -
Dividend receivable - -
Other receivables 384878020.29 202279154.63
Total 384878020.29 202279154.63
(b) Other Receivables
(i) Other receivables by aging
Aging 31 December 2023 31 December 2022
Within one year 384298400.37 200863691.53
Including: Within 6 months 384283297.37 200851698.40
7 months to 1 years 15103.00 11993.13
1-2 years 24380.80 1303136.00
2-3 years 1303136.00 710291.70
Over 3 years 29741318.31 39757474.30
Subtotal 415367235.48 242634593.53
Less: provision for bad debt 30489215.19 40355438.90
Total 384878020.29 202279154.63
(ii) Other receivables by nature
Nature 31 December 2023 31 December 2022
Due from related party within the scope of
374969732.31189661149.05
consolidation
Security investments 28635660.22 38434247.10
Margin deposits 3693589.17 3351294.09
Rentals and utilities receivable 1135726.76 741495.49
~ 230 ~Annual Report 2023
Nature 31 December 2023 31 December 2022
Others 6932527.02 10446407.80
Subtotal 415367235.48 242634593.53
Less: Provision for bad debt 30489215.19 40355438.90
Total 384878020.29 202279154.63
(iii) Other receivables by bad debt provision method
A. As at 31 December 2023 provision for bad debt recognised based on three stages model
Stages Book balance Provision for bad debt Carrying acount
Stage 1 386731575.26 1853554.97 384878020.29
Stage 2 - - -
Stage 3 28635660.22 28635660.22 -
Total 415367235.48 30489215.19 384878020.29
As at 31 December 2023 provision for bad debt at stage 1:
Expected credit
loss rate in the Provision for bad
Category Book balance Carrying amount
next 12 months debt
(%)
Provision for bad debt recognised
----
individually
Provision for bad debt recognised by
386731575.260.481853554.97384878020.29
groups
Including: Group 1 374969732.31 - - 374969732.31
Group 2 11761842.95 15.76 1853554.97 9908287.98
Total 386731575.26 0.48 1853554.97 384878020.29
Details of Group 2 receivables as of the statement date
31 December 2023
Age group
Book balance Provision for bad debt Provision ratio (%)
Within 1 year 9328668.06 93890.80 1.01
Including: Within 6 months 9313565.06 93135.65 1.00
7 months to 1 years 15103.00 755.15 5.00
1 to 2 years 24380.80 2438.08 10.00
2 to 3 years 1303136.00 651568.00 50.00
~ 231 ~Annual Report 2023
31 December 2023
Age group
Book balance Provision for bad debt Provision ratio (%)
Over 3 years 1105658.09 1105658.09 100.00
Total 11761842.95 1853554.97 15.76
As at 31 December 2023 provision for bad debt at stage 3:
Expected credit
loss ratio (%) Provision for bad
Category Book balance Carrying amount
over the entire debt
duration
Provision for bad debt recognised
28635660.22100.0028635660.22-
individually
Provision for bad debt recognised by
----
groups
Including: Group 1 - - - -
Group 2 - - - -
Total 28635660.22 100.00 28635660.22 -
Details of receivables subject to individual assessment as of 31 December 2023
31 December 2023
Entity name Provision for bad Reason for
Book balance Provision ratio (%)
debt impairment
Hengxin Securities Co. Ltd. 28635660.22 28635660.22 100.00 In bankruptcy
Total 28635660.22 28635660.22 100.00
B. As at 31 December 2022 provision for bad debt recognised based on three stages model
Stages Book balance Provision for bad debt Carrying amount
Stage 1 204200346.43 1921191.80 202279154.63
Stage 2 - - -
Stage 3 38434247.10 38434247.10 -
Total 242634593.53 40355438.90 202279154.63
As at 31 December 2022 provision for bad debt at stage 1:
~ 232 ~Annual Report 2023
Expected credit
loss rate in the Provision for bad
Category Book balance Carrying amount
next 12 months debt
(%)
Provision for bad debt recognised
individually
Provision for bad debt recognised by
204200346.430.941921191.80202279154.63
groups
Including: Group 1 189661149.05 - - 189661149.05
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 December 2022
Age group
Book balance Provision for bad debt Provision ratio (%)
Within 1 year 11202542.48 112505.14 1.00
Including: Within 6 months 11190549.35 111905.48 1.00
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
As at 31 December 2022 provision for bad debt at stage 3:
Expected credit
loss ratio (%) Provision for bad
Category Book balance Carrying amount
over the entire debt
duration
Provision for bad debt recognised
38434247.10100.0038434247.10-
individually
Provision for bad debt recognised by
-
groups
Including: Group 1 -
Group 2 -
Total 38434247.10 100.00 38434247.10 -
~ 233 ~Annual Report 2023
Details of receivables subject to individual assessment as of 31 December 2022
31 December 2022
Entity name Provision for bad Reason for
Book balance Provision ratio (%)
debt 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 -
(iv) Changes of provision for bad debt during the reporting period
Changes during the reporting period
31 December 31 December
Category Elimination or
2022 Provision Recovery or reversal 2023
write-off
Individual
38434247.10-98239.029700347.8628635660.22
assessment
Portfolio
1921191.80-67636.83-1853554.97
assessment
Total 40355438.90 - 165875.85 9700347.86 30489215.19
(v) Top five closing balances by entity
Proportion of the
Balance as at 31 Provision for bad
Entity name Nature Aging balance to the total
December 2023 debt
other receivables (%)
Due from related
party within the Within 6
Top 1 125000000.00 30.09 -
scope of months
consolidation
Due from related
party within the Within 6
Top 2 120000000.00 28.89 -
scope of months
consolidation
Due from related
party within the Within 6
Top 3 78207352.12 18.83 -
scope of months
consolidation
Due from related
party within the Within 6
Top 4 50475561.36 12.15 -
scope of months
consolidation
~ 234 ~Annual Report 2023
Proportion of the
Balance as at 31 Provision for bad
Entity name Nature Aging balance to the total
December 2023 debt
other receivables (%)
Top 5 Security investment 28635660.22 Over 3 years 6.89 28635660.22
Total 402318573.70 96.85 28635660.22
16.3 Long-term Equity Investments
31 December 2023 31 December 2022
Items Provision for Provision for
Book balance Carrying amount Book balance Carrying amount
impairment impairment
Subsidiaries 1598079903.43 - 1598079903.43 1582079903.43 - 1582079903.43
Associates 4855540.61 - 4855540.61 4669710.25 - 4669710.25
Total 1602935444.04 - 1602935444.04 1586749613.68 - 1586749613.68
(a) Investments in subsidiaries
Provision
Decrease Provision for for
Increase during
during the impairment impairment
Investees 31 December 2022 the reporting 31 December 2023
reporting during the at 31
period
period reporting period December
2023
GJ Sales 68949286.89 - - 68949286.89 - -
Longrui Glass 85267453.06 - - 85267453.06 - -
Jinhao Hotel 49906854.63 - - 49906854.63 - -
GJ Guest House 648646.80 - - 648646.80 - -
Ruisi Weier 40000000.00 - - 40000000.00 - -
YQ Environment Protection 16000000.00 - - 16000000.00 - -
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 Distillery 200200000.00 - - 200200000.00 - -
Treasure Distillery 224723400.00 - - 224723400.00 - -
Jiuhao ChinaRail 5720000.00 - - 5720000.00 - -
GJ Health Technology 34664262.05 - - 34664262.05 - -
Theme Hotel - 10000000.00 - 10000000.00 - -
Anhui Gu Qi Distillery - 6000000.00 - 6000000.00 - -
~ 235 ~Annual Report 2023
Provision
Decrease Provision for for
Increase during
during the impairment impairment
Investees 31 December 2022 the reporting 31 December 2023
reporting during the at 31
period
period reporting period December
2023
Total 1582079903.43 16000000.00 - 1598079903.43 - -
(b) Investments in associates
Changes during the reporting period
Increase Decrease Gains /(losses) Adjustments of
31 December
Investees during the during the on investments other Changes in
2022
reporting reporting under the comprehensive other equity
period period equity method income
(i) Associates - -
Xunfeijiuzhi 4669710.25 - - 185830.36 - -
Total 4669710.25 - - 185830.36 - -
(Continued)
Changes during the reporting period
Declaration of Provision for
31 December
Investees cash dividends or Provision for impairment at 31
Others 2023
distribution of impairment December 2023
profit
(i)Associates
Xunfeijiuzhi - - - 4855540.61 -
Total - - - 4855540.61 -
16.4 Revenue and Cost of Sales
20232022
Items
Revenue Costs of sales Revenue Costs of sales
Principal activities 10501446923.20 3628280247.93 8321302489.78 3081601776.18
Other activities 123590833.53 79803499.54 115551935.55 68470471.26
Total 10625037756.73 3708083747.47 8436854425.33 3150072247.44
Note: The company's main business income is distilled wine sales revenue.
16.5 Investment Income
Items 2023 2022
~ 236 ~Annual Report 2023
Items 2023 2022
Investment income from long-term equity
151685778.22531783095.55
investments under cost method
Investment income from long-term equity
185830.36769710.25
investments under equity method
Gains from disposal of financial assets
31140435.808539026.86
held-for-trading
Gains from disposal of financial assets at fair
-39556318.53-24743235.48
value through other comprehensive income
Others 15155.26 102958.20
Total 143470881.11 516451555.38
17. SUPPLEMENTARY INFORMATION
17.1 Details of current non-recurring profit or loss
Items 2023 2022
Gains /(losses) on disposal of non-current assets -2063270.90 -4666425.09
Government grants (except for government grants which are closely
related to the ordinary course of business of the Company in compliance
with national policies and regulations granted in accordance with the 39946354.24 40804726.42
determined standards; and influence the profit and loss on an ongoing
basis) charged to gains or losses for the period
Non-financial business’s gains or losses from fair value change arising
from financial assets and financial liabilities held and gains or losses from
disposal of financial assets and financial liabilities other than effective 51603409.95 43874800.64
value protection hedges relating to the Company’s ordinary course of
business
Reversal of provision for impairment of individually tested receivables 98239.02 423337.78
Other non-operating income/expenses except for items mentioned above 51716611.35 23314293.08
Total non-recurring profit /(loss) 141301343.66 103750732.83
Less: Income tax effect 34596052.57 25727870.92
Less: net non-recurring profit /(loss) attributable to non-controlling interest 12760425.86 5397408.19
Net non-recurring profit /(loss) attributable to ordinary shareholders 93944865.23 72625453.72
The Company redefined the non-recurring profit and loss for the year 2022 in accordance with the
provisions of the Explanatory Announcement No. 1 on Information Disclosure of Publicly Issued
Securities Companies - Non-Recurring Profit and Loss (Revised in 2023) (SFC Announcement No.[2023]65). This will result in a decrease of 4561968.14 in non-recurring net profit and loss after
income tax for the year 2022 including a decrease of 3975285.01 in non-recurring net profit and
~ 237 ~Annual Report 2023
loss attributable to the Company's common shareholders and a decrease of 586683.13 in
non-recurring net profit and loss attributable to minority shareholders. The non-recurring profit and
loss items affected in 2022 are: "Government subsidies recognized in the profit and loss of the
current period except government subsidies that are closely related to the normal operation of the
company comply with national policies and regulations enjoy in accordance with determined
standards and have a continuous impact on the profit and loss of the company" reducing by
5916533.10.
17.2 Return on Net Assets and Earnings Per Share (‘EPS’)
(a) 2023
Weighted average EPS
Profit for the reporting period return on net assets
Basic Diluted
(%)
Net profit attributable to ordinary shareholders 22.92 8.68 8.68
Net profit attributable to ordinary shareholders
22.458.508.50
after non-recurring profit or losses
(b) 2022
Weighted average EPS
Profit for the reporting period return on net assets
Basic Diluted
(%)
Net profit attributable to ordinary shareholders 17.93 5.95 5.95
Net profit attributable to ordinary shareholders
17.525.815.81
after non-recurring profit or loss
Chairman of the Board:
Anhui Gujing Distillery Company Limited
26 April 2024
~238~
沪公网安备31011802005267号
