Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Yantai Changyu Pioneer Wine Co. Ltd.2021 Annual Report
Final 2022-01
April 2022
1Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Contents
I、Important Notice Contents and Definition............3
II、Brief Introduction for the Company and Main Fin... 6
III、Management Discussion and Analysis ..............11
IV、Corporate Governance ............................ 33
V、Environmental and Social Responsibility .......... 56
VI、Major issues .....................................59
VII、Changes in Shares and Shareholders’ Situation .. 70
VIII、Related Situation of Preferred Shares ......... 79
IX、Related Situation of Bonds .......................79
X、Financial Report ................................. 79
2Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
I. Important Notice Content and Definition
The board of directors，the board of Supervisors，directors supervisors and senior executives of theCompany guarantee the truthfulness accuracy and completeness of the contents contained in the
report with no false records misleading statements or significant omissions and undertake
individual and joint legal liabilities.Mr. Zhou Hongjiang (Person in charge of the Company) Mr. Jiang Jianxun (Person in charge of
accounting work) and Ms. Guo Cuimei (Person in charge of accounting organ & Accountant in
charge) assure the truthfulness accuracy and completeness of the financial report in the annual
report.All directors have personally attended the meeting for deliberating the annual report.Except for the following directors other directors attended this board meeting for reviewing this
annual report in person
Name of director not attending Position of director not attending Reason of not attending the Name of
the meeting personally the meeting personally meeting personally entrustee
Aldino Marzorati Director Due to time conflict of work Zhou Hongjiang
Stefano Battioni Director Due to time conflict of work Leng Bin
Enrico Sivieri Director Due to time conflict of work Zhou Hongjiang
Forward-looking statements such as future plans and development strategies covered in this report
do not constitute a substantial commitment of the Company to investors. Investors are advised to
pay attention to investment risks.About significant risks that may be faced in production and operation process please refer to “(5)Potential Risks” of “11. Expectation for the Company’s Future Development” in the “III.Management Discussion and Analysis” of this report. Investors are advised to read carefully and
pay attention to investment risks.The Company’s preliminary scheme of profit distribution deliberated and passed by the board of
directors this time is shown as following: Based on the Company’s total 685464000 shares the
Company plans to pay CNY4.5 (including tax) in cash as dividends for every 10 shares to all
shareholders and send 0 bonus share (including tax); capital reserve will not be transferred to
equity.
3Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Reference Documents
(1)The original of Annual Report autographed by the chairman.
(2)The Financial Statements autographed and signed by the chairman chief accountant and
accountants in charge.
(3)The Prospectus and Public Offering Announcement for Stock B in 1997; The Prospectus and The
Shares’ Change & Public Offering Announcement for Stock A in 2000.
(4) The originals of all documents and announcements that the Company made public during the
report period in the newspapers designated by China Securities Regulatory Commission.
4Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Definition
Definition Item Refers to Definition Content
Company/The Company Refers to Yantai Changyu Pioneer Wine Co. Ltd.Changyu Group/Controlling Shareholder Refers to Yantai Changyu Group Co. Ltd.CSRC Refers to China Securities Regulatory Commission
SSE Refers to Shenzhen Stock Exchange
KPMG Huazhen Refers to KPMG Huazhen LLP (Limited Liability Partnership)
CNY Refers to Chinese Yuan
5Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
II. Brief Introduction for the Company and Main Financial Indicators
1. Company’s information
Stock Abbreviation Changyu A Changyu B Stock Code 000869 200869
Stock Abbreviation after Alteration -
Place of Stock Listing Shenzhen Stock Exchange
Legal Name in Chinese 烟台张裕葡萄酿酒股份有限公司
Abbreviation of Chinese Name 张裕
Legal Name in English YANTAI CHANGYU PIONEER WINE COMPANY LIMITED
Abbreviation of English Name CHANGYU
Legal Representative Zhou Hongjiang
Registered Address 56 Dama Road Yantai Shandong China
Postal Code of Registered Address 264000
Historical Change in Registered Address No
Office Address 56 Dama Road Yantai Shandong China
Postal Code of Office Address 264000
Website http://www.changyu.com.cn
E-mail webmaster@changyu.com.cn
2. Contact person and information
Secretary to the Board of Directors Authorized Representative of Securities Affairs
Name Mr. Jiang Jianxun Mr. Li Tingguo
Address 56 Dama Road Yantai Shandong China 56 Dama Road Yantai Shandong China
Tel. 0086-535-6602761 0086-535-6633656
Fax. 0086-535-6633639 0086-535-6633639
E-mail jiangjianxun@changyu.com.cn stock@changyu.com.cn
3. Information disclosure and filing location
Stock exchange website for disclosing annual
report Shenzhen Stock Exchange (http://www.szse.cn)
Media name and website for disclosing China Securities Newspaper Securities Times Hong Kong
annual report Commercial Daily and CNINFO website(http://www.cninfo.com.cn)
Filing location of the Company’s annual Board of Directors’ Office of the Company 56 Dama Road
report Yantai Shandong
6Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
4. Registration changes
Organization Code 913700002671000358
The business scope determined by the Company when it was established
on September 18th 1997 is production processing and sales of wine
distilled liquor healthy liquor fruit liquor non-alcohol beverage fruit
jam packing material and winemaking machine.On April 17th 2008
approved by the 2007 Shareholders’ Meeting the Company’s business
scope was changed to production processing and sales of wine distilled
liquor medicinal liquor fruit liqueur non-alcohol beverage fruit jam
packing material and winemaking machines; licensed import and export.On May12th 2010 approved by the 2009 Shareholders’ Meeting the
Company’s business scope was changed to production processing and
Changes for the main businesses sales of wine distilled liquor medicinal liquor fruit liqueur
of the Company since it was listed non-alcohol beverage fruit jam packing material and its products andwinemaking machinery; licensed import and export; external investment
subject to national policy. On September 23rd 2016 approved by the
2016 annual 1st Interim Shareholders’ Meeting the Company’s business
scope was changed to production of wine and fruit wine (bulk wine
processing and filling); production of blending liquor and other blending
liquors (grape liqueur); production of other liquors (other distilled
liquors); production processing and sales of packing material and
winemaking machines; grape plantation and procurement; tourism
resources development (excluding tourism); packaging design; activity
of building rental; licensed import and export; warehouse business;
external investment subject to national policy.Changes for all previous
controlling shareholders No
5. Other relevant information
The accounting firm appointed by the Company
Name KPMG Huazhen LLP
Address Level 8 No.2 East Wing of Dongfang Square No.1 East Chang’anStreet Dongcheng District Beijing
Name of signatory accountants Ms. Wang Ting Ms. Xu Weiran
The sponsor institution appointed by the Company to perform the duty of continuous supervision
during the report period
□Available □Not available
The financial adviser appointed by the Company to perform the duty of continuous supervision
during the report period
□Available □Not available
7Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
6. Key accounting data and financial indicators
Whether the Company needs to retrospectively adjust or restate the accounting data of previous
fiscal years.□Yes □No
Increase/decrease compared
202120202019
with last year (%)
Operating revenue (CNY) 3953067583 3395402001 16.42% 5074025899
Net profit attributed to shareholders
5001026064708605876.21%1141367296
of the listed company (CNY)
Net profit attributed to shareholders
of the listed company after
47223596239765518718.76%892496644
deducting non-recurring profits and
losses (CNY)
Net cash flows from operating
1125382658505146673122.78%848852360
activities (CNY)
Basic earnings per share (CNY) 0.73 0.69 5.80% 1.67
Diluted earnings per share (CNY) 0.73 0.69 5.80% 1.67
Weighted average for earning rate
4.84%4.57%0.27%11.40%
of net assets (CNY)
December 31 December 31 Increase/decrease compared December 31
2021 2020 with last year-end (%) 2019
Total assets (CNY) 13472009754 13102481541 2.82% 13647932568
Net Assets attributed to
shareholders of the listed company 10447884183 10267832644 1.75% 10308910198
(CNY)
The lower of the net profit before and after non-recurring gains and losses in recent three fiscal
years is negative and the audit report in recent one year indicates there is uncertainty in the
Company’s sustainable operation ability
□Yes □No
The lower of the net profit before and after non-recurring gains and losses is negative
□Yes □No
7. Differences in accounting data under PRC accounting standards and international
accounting standards
(1) Differences between net profits and net assets in the financial report disclosed according to
both international accounting standards and PRC accounting standards
8Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
□Available □Not available
There are no differences between net profits and net assets in the financial report disclosed
according to both international accounting standards and PRC accounting standards during the
report period.
(2) Differences between net profits and net assets in the financial report disclosed according to
both foreign accounting standards and PRC accounting standards
□Available □Not available
There are no differences between net profits and net assets in the financial report disclosed
according to both foreign accounting standards and PRC accounting standards during the report
period.
8. Key financial indicators by quarter
Unit：CNY
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Operating revenue 1134006251 740454186 796762047 1281845099
Net profit attributed to shareholders of the
286745340850764797974246048538327
listed company
Net profit attributed to shareholders of the
listed company after deducting non-recurring 280760222 72915820 67549124 51010796
profits and losses
Net cash flows from operating activities 314895523 141039626 336257978 333189531
Whether there are significant differences between the above mentioned financial indicators or their
sum and the related financial indicators in the quarterly reports and semi-annual reports disclosed
by the Company.□Yes □No
9. Item and amount of non-recurring profit and loss
□Available □Not available
Unit：CNY
Item 2021 2020 2019 Explanation
Profits and losses on disposal of non-current assets including
-15364993-11651626272676
the provision for asset impairment write-off part
Government grants included in the current profits and
losses(except for those recurring government grants that are
482407417318084884837581
closely related to the entity’s operation in line with related
regulations and have proper basis of calculation)
The subsidiary’s net profit and loss for the current period
from the beginning of the period to the combining date
1271554416514012
resulting from the combination of enterprises under the same
control
9Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Other non-operating revenues and expenditures in addition to
2328169100985517298479
the aforementioned items
Other profit and loss projects conforming to the definition of
00218649636
non-recurring profit and loss
Less：Income tax effect 7306787 21595671 84171927
Minority shareholders' equity effect (after taxes) 30486 28710 529805
Total 27866644 73205400 248870652 --
Specific situation of other profit and loss projects conforming to the definition of non-recurring
profit and loss
□Available □Not available
There does not exist specific situation of other profit and loss projects conforming to the definition
of non-recurring profit and loss.Explanation for regarding the non-recurring profit and loss specified in the Explanatory
Announcement on Public Company’s Information Disclosure No.1 –Non-recurring Profit and Loss
as recurrent profit and loss
□Available □Not available
There is no situation regarding the non-recurring profit and loss specified in the Explanatory
Announcement on Public Company’s Information Disclosure No.1 –Non-recurring Profit and Loss
as recurrent profit and loss.
10Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
III. Management Discussion and Analysis
1. Situation of industry in which the Company operates during the report period
In 2021 a strong wine consumption atmosphere had not yet been formed in China. The wine market
was still mainly distributed in some developed coastal areas. Most consumers did not develop the
habit of drinking wine frequently. Wine consumption was highly vulnerable to the impact of the
epidemic and spirits. The overall scale of domestic wine market continued to decline the sales
volume of imported wine and domestic wine continued the trend of “double decline” and the vast
majority of wine production and operation enterprises had difficulties in operation. The domestic
wine industry was still on the verge of loss.Facing these disadvantages the Company persisted in taking the market as the center adhered tothe development strategy of “Focus on middle-and-high level Focus on high quality Focus on bigproduct” and the marketing philosophy of “obtaining growth from the terminal and nurturingconsumers” took market-oriented action to adjust marketing strategies in a timely manner
promoted reform and innovation to stimulate enterprise vitality and took consumer satisfaction as
the ultimate goal to continuously improve product quality. In 2021 the Company realized the
operating revenue of CNY3953.06million with a year-on-year increase of 16.42% and the net profit
attributable to the parent company’s shareholders of CNY500.1million with a year-on-year increase
of 6.21% maintaining the leading role in the industry.
2. Main businesses during the report period
The Company need to comply with the disclosure requirements of Food and Liquor Manufacturing
Related Businesses in Shenzhen Stock Exchange Industry Information Disclosure Guideline No. 3 -
Industry Information Disclosure.
(1) Situation of the industry in which the Company operates
During the report period the Company’s main businesses are production and operation of wine and
brandy thus providing domestic and foreign consumers with healthy and fashionable
alcoholic drinks. Compared with earlier stage there are no significant changes happened to the
Company’s main businesses. The wine industry that the Company involved in is still in growth
stage. Although being affected by many factors including the epidemic for the short-term the
competition in the market is fierce the wine consumption temporarily declines and a large number
of wine production enterprises are on the brink of loss. However seen from the long term with the
change in the consumption conception of younger consumers the whole domestic wine market is
likely to be on the rising trend. The Company is at the forefront in the domestic wine market and is
significantly ahead of major domestic competitors.
11Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
The Company’s products were divided into two series: wine and brandy. For wine main brands
included Changyu Noble Dragon AFIP Longyu Golden Ice Valley Zenithwirl Vermouth Rena
Baron Balboa J.LORMIN Atrio Kilikanoon and IWCC and so on. For Brandy main brands
included Koya Mminni Pagese Roullet Fransac and so on.
(2) License obtained
As of December 31st 2021 the Company and its subsidiaries have obtained 8 food production
licenses (alcohol) of which the food production licenses having been obtained since the beginning
of 2020 are as follows:
Food Food production license
Producer name Obtaining time Obtaining method
category number
Shaanxi Chateau Changyu Rena Approval from
Alcohol 2020.10.19 SC11561040400532
Co. Ltd. government authority
Yantai Chateau Koya Brandy Co. Approval from
Alcohol 2021.01.11 SC11537063601165
Ltd. government authority
(3) Explanation for other major events
During the report period there did not exist the trademark ownership dispute food quality issue or
food safety incident etc. that had a significant impact on the Company.Major sales mode
The Company’s main sales mode was the distribution mode and main sales channel was offline
sales that is the Company’s products were distributed to sales terminals through approximately
4000 distributors at home and abroad and ultimately provided to consumers.
Distribution mode
□Available □Not available
(1) Situation of change in the number of distributors
Increased number
Number at the Number at the
Region during this report
beginning of 2021 end of 2021
period
Eastern China 1702 155 1857
South China 541 24 565
Central China 479 -3 476
12Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
North China 358 7 365
Northwest China 156 28 184
Southwest China 411 82 493
Northeast China 289 29 318
HongKong MacaoTaiwan
51162573
China and overseas
Total 4447 384 4831
(2) The Company adopted the settlement method of cash and carry with the distributors and
mainly adopted buyout distribution mode.The ratio of sales in self-owned exclusive shop exceeds 10%
□Available □Not available
Sales of online direct selling
□Available □Not available
20212020
Sales model Operating income Operating cost Operating income Operating cost Gross
Gross margin
(CNY) (CNY) (CNY) (CNY) margin
Distribution 3263303800 1349422481 58.65% 2945453550 1289537264 56.22%
Direct sales 689763784 298367393 56.74% 449948451 214340143 52.36%
Total 3953067583 1647789874 58.32% 3395402001 1503877407 55.71%
The change in sales prices of major products accounting for more than 10% of total operating
income in current report period exceeds 30% compared with those in last report period
□Available □Not available
Procurement mode and procurement content
Unit：CNY’0000
The amount of the main
Procurement mode Procurement content
procurement content
Price determined by quality comparison with standard price items Raw materials such as grapes/ bulk wine 49125.70
Tender/Price determined by quality comparison with standard price items Packaging materials 53324.70
Tender/Price determined by quality comparison with standard price items Brewing materials 2262.50
Tender/Price determined by quality comparison with standard price items Vineyard supplies 1082.80
Contract Fuel and power 2945.50
13Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Price determined by quality comparison with standard price items Other wines and derivatives 1651.80
Amount of purchasing raw materials from cooperatives or farmers exceeds 30% of total procedure
amount
□Available □Not available
The year-on-year change in the price of major outsourced raw materials exceeds 30%
□Available □Not available
Major production mode
The production mode of the Company is self-produce.Manufacturing consignment
□Available □Not available
Major components of operating costs
Please refer to ‘4. Analysis in main business’ in this chapter.Yield and inventory
Please refer to ‘4. Analysis in main business’ in this chapter.
3. Analysis of core competitiveness
Compared with the participants in the arena of the Chinese wine sector the Company owns
following advantages:
Firstly the Company has a large brand influence. Main brands used have a long history. “Changyu”
“Noble Dragon” and “AFIP” are all “China famous brands” that have strong influence and good
reputation.Secondly the Company has set up a nationwide marketing network. The Company has formed a
“three-level” marketing network system mainly composed of the Company’s salesmen and
distributors and the online sales platform has had a certain scale and influence owing strong
marketing ability and market exploitation ability.Thirdly the Company has strong scientific prowess and a product R&D system. Relying on the
country’s “State-level Wine R&D Center” the Company has owned powerful winemaker team
mastered advanced winemaking technology and production processes and had strong product
innovation capacity and perfect quality control system.Fourthly the Company is in possession of a lot of grape-growing bases that are compatible with its
development requirements. The Company has developed a great deal of vineyards in the most
suitable areas for wine grape growing such as Shandong Ningxia Xinjiang Liaoning Hebei and
14Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Shaanxi and its subsidiary overseas enterprises also own matching grape bases in local area
making the overall scale and structure generally meet the Company’s needs for future development.Fifthly products in high medium and low-grade as well as varieties and categories are all complete.Over 100 varieties of series products such as wine brandy and sparkling wine covers various grades
including high medium and low-grade which can meet different consumer groups’ demands. The
Company has taken the dominant status in the domestic wine industry after many years’
development and has comparative advantages in the future competition.Sixthly the Company has a relatively perfect motivation system. Most of Company’s employees
indirectly hold the Company’s equity through controlling shareholders. There are high consistency
between employee benefits and shareholders benefits in favor of motivating employees to create
value for shareholders.Seventhly the Company has set up flexible and efficient decision-making mechanism. The
Company’s core management team always maintains a working style of unity and pragmatic and
flexible and efficient decision-making mechanism which makes the Company can deal with market
changes more calmly.Eighthly the global production capacity layout has been basically completed. The Company has
completed production capacity layout in China France Chile Spain Australia and other major
wine producing countries in the world enabling making better use of global high-quality raw
material resources capital talents and advanced production processes and technologies to provide
consumers with diversified quality products and better serve consumers.Based on the above reasons the Company has formed relatively strong core competence and will
maintain a relatively dominant position in the future predictable market competition.
4. Analysis in main business
(1) Summarization
Increase or decrease at
Description the end of the period Cause of significant changes
over the end of last year
Operating revenue 16.42%Mainly because of increase in sales volume
Operating cost 9.57%Mainly because of increase in sales volume
Mainly because of increased advertising fee and marketing
Sales expense 26.73%
expense resulting from increased market investment
Mainly because of increase in depreciation fee and
Management expense 2.90%
administrative expense
Mainly because of increase in research input purchasing
R&D expense 140.97%
and updating scientific equipment
15Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Mainly because of increase in exchange loss of the
Financial expense 3.61%
Company’s subsidiary overseas enterprises
Net amount of cash flow generated Mainly because of increase in received sales payment
122.78%
in operating activities resulting from increased sales volume
Mainly because of decrease in cash received from
Net amount of cash flow generated
-23.38%investment recovery and cash recovered from disposal of
in investment activities
fixed assets intangible assets and other long-term assets
Mainly because of decrease in cash paid for distribution of
Net amount of cash flow generated
29.22%dividends profits or repayment of interest and other cash
in financing activities
paid in connection with financing activities
Review and summary of the process of the Company’s early-disclosed development strategy and
business plan during the report period
During the report period the domestic wine industry continued the decline trend and the market
competition was very intense. The Company realized the operating revenue of
CNY3953.06million with an increase of 16.42% compared with last year exceeding the target
fixed at the beginning of the year of realizing operating revenue no less than CNY3.8billion and
realized the net profit attributable to the parent company’s shareholders of CNY500.1million with
an increase of 6.21% compared with last year. The main works during the report period were
shown as followed:
Firstly the Company adhered to the market-oriented strategy and timely adjusted marketing
strategies. For wine on the basis of the Three-Focus strategy the Company further focused on
brands products cities methods and barcode; actively adjusted the organizational structure
realizing good performance in the annihilation war and showing a good momentum in some
markets; strengthened the management and control of marketing expenses and further focused the
market investment in consumer cultivation; constantly innovated the contents and methods of brand
communication expanding the brand influence. For brandy the Company further improved the
sales system realizing high-low separation in traditional mature markets such as Guangdong and
Yantai and making the independent system cover the national market; continued to carry out
marketing activities such as tasting activities chateau experience exchange of empty bottles for
brandy and Koya XO cultural experience hall and so on; steadily improved the quantity and quality
of new distributors such as group-buying consumer and cross-border distributors. For imported
wine the Company continued to optimize the structure of imported products and focused on the
core products of the Company's overseas acquired brands. Besides the Company accelerated the
pace of digital transformation and upgrading achieving sustained and rapid growth in the online
business and making its sales rank first in the wine industry's entire network sales.Secondly the Company promoted reform and innovation and stimulated the vitality of enterprises.In view of the irreplaceable role of high-end products in enhancing brand influence and promoting
the long-term development of the company the Company established the Longyu business division
in order for the high-end wines to strive to break through the market dilemma and begin to reverse
16Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
thus leading the Chinese wine market to gradually recover in an all-round way. The integration of
various tourism units was completed and the organization and personnel was further streamlined
greatly improving the operating efficiency. The Company solidly promoted technological
innovation and was authorized 3 national invention patents of wine and 2 national invention patents
of brandy. It also cooperated with online big enterprises such as Guoqu Yixin Kechuang and
Jiuaizhihe used platforms including JD.com Tmall and Tiktok to increase product and brand
promotion efforts and continuously expanded the scale of fans further enhancing brand
communication power guidance and influence and promoting product sales. In the planting process
the Company introduced the internationally-leading NETAFIM "integration of water and fertilizer "
drip irrigation system to achieve precise water and fertilizer supply to grapes greatly reducing the
use of labor water and fertilizer use; organic fertilizer and biological pest control technology was
promoted to continuously improve the yield of organic grapes. In the production process the
Company introduced a scientific and reasonable thermal energy recovery system to recycle and
utilize equipment waste heat; use electricity at different times and peaks and use the height
difference of production facilities to facilitate material transportation that further reduces
production costs and the energy consumption index per ton of wine has reached the national green
factory standard. In the logistics link the logistics mode of using three-layer cartons and pallet
packaging for national circulation has been promoted and the amount of paper used and packaging
costs have been greatly reduced.Thirdly the Company strengthened financial and safety management strengthened audit
supervision and prevented operational risks. The Company has coordinated the channel of expense
listing strengthened fixed capital management and financial management of joint venture
companies reduced capital occupation saved labor costs and reduced financial risks. Establish and
improve the occupational safety and health system carry out occupational safety and health
education for employees take multiple measures to mobilize employees to be vaccinated in time
strengthen employees’ awareness of environmental protection safety and occupational health
improve employees’ safety production skills self-protection ability and group protection awareness
actively carry out the rectification of hidden dangers in safety production continuously improve thelevel of safety production management to prevent safety loopholes and successfully achieve “zeroinfection and zero accident”. By conduction internal unit profit authenticity audits flight audits
resign audit of middle and senior-level employees and technical renovation project audits to prevent
major violations of laws an disciplines.Fourthly the Company further improved the salary system strengthened talent team construction
and improved the combat effectiveness of the management team. Through process decomposition
and segmented accounting the Company improved the performance assessment and evaluation
system of the production system and improved the production efficiency. Further refine the
evaluation and reward and punishment standards of brand winemaker that makes the
responsibilities rights and benefits of brand winemakers more clear and lays a talent foundation for
continuous improvement of product quality. Continue to carry out employee training and further
attract social outstanding talent to inject fresh blood into the enterprise and enhance the
development momentum of the enterprise.
17Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Fifthly the Company carefully organized and successfully completed the purchase of raw materials
such as grapes. Through scientific organization and planing the Company overcame the obstacles
caused by the epidemic bad weather and other factors and completed the purchase of grapes and
other raw materials with high quality and quantity that provides reliable raw material guarantee for
future production and operation.
(2) Revenue and cost
* Composition of operating revenue
Unit: CNY
2021 2020 Year-on-year
Proportion in Proportion in increase or
Amount Amount
operating revenue operating revenue decrease (%)
Total operating revenue 3953067583 100% 3395402001 100% 16.42%
Sector-classified
Sector of liquor and
3953067583100%3395402001100%16.42%
alcoholic beverage
Product-classified
Wine 2834114276 71.69% 2424359348 71.40% 16.90%
Brandy 1036164837 26.22% 877428035 25.84% 18.09%
Tourism 73192187 1.85% 69589233 2.05% 5.18%
Others 9596283 0.24% 24025385 0.71% -60.06%
Area-classified
Domestic 3421775481 86.56% 2889121152 85.09% 18.44%
Overseas 531292102 13.44% 506280849 14.91% 4.94%
Sales model- classified
Distribution 3263303800 82.55% 2945453550 86.75% 10.79%
Direct sales 689763784 17.45% 449948451 13.25% 53.30%
* The cases of industry product or area accounting for over 10% in the Company’s
operating revenue or operating profit
□Available □Not available
Unit: CNY
Year-on-year Year-on-year Year-on-year
Operating Gross increase or increase or increase or
Operating cost
revenue margin decrease (%) of decrease (%) of decrease (%) of
operating revenue operating cost gross profit rate
Sector-classified
Sector of liquor
and alcoholic 3953067583 1647789874 58.32% 16.42% 9.57% 2.61%
beverage
Product-classified
18Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Wine 2834114276 1185871086 58.16% 16.90% 7.64% 3.60%
Brandy 1036164837 415041606 59.94% 18.09% 13.59% 1.58%
Tourism 73192187 42835101 41.48% 5.18% 78.82% -24.10%
Others 9596283 4042081 57.88% -60.06% -68.36% 11.06%
Area-classified
Domestic 3421775481 1308515057 61.76% 18.44% 6.99% 4.09%
Overseas 531292102 339274817 36.14% 4.94% 20.80% -8.39%
Sales model- classified
Distribution 3263303800 1349422481 58.65% 10.79% 4.64% 2.43%
Direct sales 689763784 298367393 56.74% 53.30% 39.20% 4.38%
Under the condition that the statistical caliber of the Company’s main business data is adjusted
during the report period the Company’s main business data adjusted on the basis of caliber at the
end of report period in recent one year.□Available □Not available
* Whether the Company’s sales revenue for material object is more than labor service
revenue
□Yes □No
Sector Project Unit 2021 2020 Year-on-year increase or decrease (%)
Alcohol and Sales volume Ton 97499 98414 -0.93%
alcoholic beverage Yield Ton 100737 93990 7.18%
industry Inventory Ton 30412 28522 6.63%
Sales volume Ton 67700 70662 -4.19%
Wine Yield Ton 67342 67477 -0.20%
Inventory Ton 16104 15898 1.30%
Sales volume Ton 29799 27752 7.38%
Brandy Yield Ton 33394 26513 25.95%
Inventory Ton 14308 12624 13.34%
Explanation on the causes of over 30% year-on-year changes of the related comparison data
□Available □Not available
* The fulfillment of major sales contract signed by the Company up to the report period
□Available □Not available
19Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
* Composition of operating costs
Classification of sector and product
Unit: CNY
2021 2020 Year-on-year
Sector Project Proportion in the Proportion in the increase or
Amount Amount
operating cost (%) operating cost (%) decrease (%)
Blending liquor 833479062 51.93% 731348214 49.42% 13.96%
Liquor
Packing material 477555065 29.76% 457572889 30.92% 4.37%
and
Wages 59063486 3.68% 56969384 3.85% 3.68%
alcoholic
Manufacturing
beverage 234857160 14.63% 234032840 15.81% 0.35%
expenses
Blending liquor 611321504 51.55% 540591702 49.07% 13.08%
Packing material 328926668 27.74% 326909741 29.67% 0.62%
Wine Wages 50206319 4.23% 48585743 4.41% 3.34%
Manufacturing
19541659516.48%18565786716.85%5.26%
expenses
Blending liquor 220058439 53.02% 190756512 52.20% 15.36%
Packing material 147425674 35.52% 130663148 35.76% 12.83%
Brandy
Wages 8708416 2.10% 8383641 2.29% 3.87%
Manufacturing cost 38849077 9.36% 35597765 9.75% 9.13%
Explanation
No
* Whether there are changes of consolidation scope during the report period
□Yes □No
During the report period Yantai Fushan Changyu Trading Co. Ltd. was not included in the scope
of consolidation because it was cancelled; the newly-established Shanghai Changyu Guoqu Digital
Technology Co. Ltd. Tianjin Changyu Yixin Digital Technology Co. Ltd. and Shanghai Changyu
Yixin Digital Technology Co. Ltd. were included in the scope of consolidation. For other changes
please refer to ‘1. Equity in subsidiaries’ in Note ‘VI Equity in other entities’ to the financial
statements.* Major changes or adjustments of the Company’s businesses products or service during
the report period
□Available □Not available
20Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
* Information of major sales customers and major suppliers
The Company’s major sales customers
The total sales amount of the top five customers（CNY） 283472286
The proportion that total sales amount of the top five customers accounting for the annual total
7.17%
sales amount（%）
The proportion that sales amount of the related party in the total sales amount of the top five
0%
customers accounting for the annual total sales amount（%）
Information of the Company’s 5 biggest sales customers
No. Customer name Sales amount（CNY） Proportion in total sales for the year（%）
1 Rank 1st 140814494 3.56%
2 Rank 2nd 59764528 1.51%
3 Rank 3rd 33447664 0.85%
4 Rank 4th 26225001 0.66%
5 Rank 5th 23220599 0.59%
Total -- 283472286 7.17%
Other situation explanations of major customers
□Available □Not available
Information on the Company’s main suppliers
The total purchase amount of the top 5 suppliers 136914471
The proportion of the total purchase amount of the top 5 suppliers in the annual purchase
24.08%
amount
The proportion of the related party purchase amount in the top 5 supplier purchase amount
3.58%
in annual purchase amount
Information on the Company’s top 5 biggest suppliers
No. Supplier name Purchase amount(CNY) Proportion in total purchase for the year（%）
1 Rank 1st 44870025 7.89%
2 Rank 2nd 27057504 4.76%
3 Rank 3rd 23934593 4.21%
4 Rank 4th 20715005 3.64%
5 Rank 5th 20337344 3.58%
Total -- 136914471 24.08%
Other situation explanations of main suppliers
□Available □Not available
21Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
(3) Expense
Unit: CNY
Year-on-year increase
2021 2020 Explanation of significant changes
or decrease (%)
Mainly because of increased advertising
Sales expense 998954105 788252485 26.73% fee and marketing expense resulting from
increased market investment
Mainly because of increase in
Management
299076376 290646466 2.90% depreciation fee and administrative
expense
expense
Mainly because of increase in exchange
Financial
21178727 20441713 3.61% loss of the Company’s subsidiary
expense
overseas enterprises
Research and Mainly because of increase in research
Development 10919262 4531418 140.97% input purchasing and updating scientific
expense equipment
(4) Research and development investment
□Available □Not available
2021 2020 Percentage of changes (%)
Number of R&D personnel (person) 137 135 1.48%
The proportion of the number of R&D personnel 5.96% 5.27% 0.69%
Educational structure of R&D personnel —— —— ——
Below Bachelor 65 68 -4.41%
Bachelor 48 46 4.35%
Postgraduate 23 20 15.00%
Doctor 1 1 0.00%
Age structure of R&D personnel —— —— ——
Under 30-year-old 33 32 3.13%
30-to 40-year-old 41 40 2.50%
Above 40-year-old 63 63 0.00%
The investment of the Company’s R&D
2021 2020 Percentage of changes (%)
R&D investment amount (CNY) 10919262 4531418 140.97%
R&D investment as a percentage of operating income 0.28% 0.13% 0.15%
Amount of R&D investment capitalized (CNY) 0 0 0.00%
Capitalized R&D investment as a percentage of R&D
0.00%0.00%0.00%
investment (CNY)
Reasons and effects of major changes in the composition of the company’s R&D personnel
□Available □Not available
22Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Reasons for the significant change in the proportion of total R&D investment in operating income
compared with the previous year
□Available □Not available
Reasons for the substantial changes in the capitalization rate of R&D investment and its rationality
explanation
□Available □Not available
(5) Cash flow
Unit: CNY
Year-on-year increase
Item 2021 2020
or decrease (%)
Subtotal of cash inflow in operating activities 3812599382 3385896941 12.60%
Subtotal of cash outflow in operating activities 2687216724 2880750268 -6.72%
Net amount of cash flow generated in operating activities 1125382658 505146673 122.78%
Subtotal of cash inflow in investment activities 104064718 186578214 -44.22%
Subtotal of cash outflow in investment activities 279720766 328946684 -14.96%
Net amount of cash flow generated in investment activities -175656048 -142368470 -23.38%
Subtotal of cash inflow in financing activities 855198786 987668379 -13.41%
Subtotal of cash outflow in financing activities 1354745101 1693437449 -20%
Net amount of cash flow generated in financing activities -499546315 -705769070 29.22%
Net increase of cash and cash equivalents 449661924 -344734365 not available
Explanation of main influence factors contributing to great changes in related data on year-on-year
basis
□Available □Not available
Explanation on the causes of major differences between the net cash flow generated by the
Company’s operating activities and net profit of this year during the report period.□Available □Not available
5. Analysis to non-main business
□Available □Not available
23Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
6. Assets and liabilities
(1) Significant changes of assets composition
Unit: CNY
At the end of 2021 At the beginning of 2021
Proportion increase or Explanation on
Proportion in the total assets Proportion in the total assets
Amount Amount decrease (%) significant changes
(%)(%)
Monetary funds 1567095993 11.63% 1194214929 9.11% 2.52% No significant changes
Receivables 291006410 2.16% 183853362 1.40% 0.76% No significant changes
Contract assets 0% 0% 0% No significant changes
Inventory 2802622520 20.80% 2945548651 22.48% -1.68% No significant changes
Investment real estate 24502258 0.18% 27057730 0.21% -0.03% No significant changes
Long-term equity investments 46496510 0.35% 48263507 0.37% -0.02% No significant changes
Fixed assets 5687867314 42.22% 5724935846 43.69% -1.47% No significant changes
Construction in progress 590172099 4.38% 635495152 4.85% -0.47% No significant changes
Right-of-use asset 134569039 1% 130293427 0.99% 0.01% No significant changes
Short-term borrowings 622066457 4.62% 689090715 5.26% -0.64% No significant changes
Contract liability 147120716 1.09% 135073280 1.03% 0.06% No significant changes
Long-term borrowings 176047043 1.31% 200352968 1.53% -0.22% No significant changes
Lease liability 101811588 0.76% 98401900 0.75% 0.01% No significant changes
24Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Foreign asset has a high proportion
□Available □Not available
Proportion of overseas Whether there
Formation Operation Control measures for safeguarding of Earning
Details of assets Assets scale Location assets in the are significant
reasons mode asset security condition
Company’s net assets impairment risks
Hacienda Y The Company participates in making
Vinedos Acquisition of Independent important decisions through board of
516273836 Spain 13169484 4.83% No
Marques Del equity operation directors and appoints CFO on
Atrio. SL financial management.Indomita Wine The Company participates in making
Establishment Independent
Company Chile 511244907 Chile important decisions through board of 19716978 4.78% No
of joint venture operation
S.p.A. directors.The Company participates in making
Kilikanoon Acquisition of Independent
167079311 Australia important decisions through board of 360073 1.56% No
Estate Pty. Ltd. equity operation
directors.FrancsChampsP Sole The Company participates in making
Independent
articipations proprietorship 220966759 France important decisions through board of -3327344 2.07% No
operation
SAS establishment directors.
(2) Assets and liabilities measured at fair value
□Available □Not available
(3) Limitations of assets rights up to the end of the report period
Please refer to the “52. Assets with restrictive ownership title or right of use” of the “Notes to the financial statements” in this report’s financial
report.
25Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
7. Investment condition analysis
(1) Overall situation
□Available □Not available
Investment amount during the report period (CNY) Investment amount of the same period of last year (CNY) Variation
148020000305280700-51.51%
(2) Cases of acquired significant equity investments during the report period
□Available □Not available
(3) Cases of significant ongoing non-equity investments during the report period
□Available □Not available
Unit: CNY
Accumulated Accumulated Reasons for
Whether Involved Investment
actual investment realized unreached Disclosure
Investment belongs to sectors of amount Capital Project Estimated Disclosure index (if
Project name amount up to the earnings up to planning schedule date (if
mode fixed assets investment during the source progress earnings have)
end of the report the end of the and estimated have)
investment projects report period
period report period earnings
Yantai Please refer to
Changyu Resolution
Liquor and
International Announcement of
Self-constr alcoholic Owned
Wine City Yes 58730000 1685024100 100% 0 0 — 2017.04.22 Seventh Session
ucted beverage fund
Blending and Board of Directors
sector
Cooling 4thMeeting
Center Resolution
26Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Yantai Announcement of
Changyu Seventh Session
International Self-constr Owned Board of Directors
Yes 15910000 1090110000 100% 0 0 — 2017.04.22
Wine City ucted fund 8thMeeting
Bottling Resolution
Center Announcement of
Yantai Seventh Session
Changyu Board of Directors
International Self-constr Owned 10th Meeting
Yes 0 462677200 100% 0 0 — 2017.04.22
Wine City ucted fund Resolution
Logistics Announcement of
Center Eighth Session
Changyu Board of Directors
Vineand Wine Self-constr Owned 4thMeeting and
Yes 26880000 179854800 98% 0 0 — 2017.04.22
Research ucted fund Resolution
Institute Announcement of
Treasure Wine Self-constr Owned Eighth Session
Yes 0 211320000 95% 0 0 — 2017.04.22
Chateau ucted fund Board of Directors
Koya Brandy Self-constr Owned 7thMeeting
Yes 0 207095500 100% 0 0 — 2017.04.22
Chateau ucted fund disclosed on China
Securities Journal
Oak barrel Securities Times and
Self-constr Owned
procurement Yes 46500000 148084200 80% 0 0 — 2021.04.28 CNINFO
ucted fund
project (http://www.cninfo.com.cn/)
Total -- -- -- 148020000 3984165800 -- -- 0 0 -- -- --
27Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
(4) Financial assets investment
* Security investment situation
□Available □Not available
There are no security investments for the Company during the report period.* Derivatives investment
□Available □Not available
There are no derivatives investments for the Company during the report period.
(5) The usage situation of raised capital
□Available □Not available
There are no usage situations of raised capital for the Company during the report period.
8. Sale of significant assets and equities
(1) Sale of significant assets
□Available □ Not available
The Company did not sell significant assets during the report period.
(2)Sale of significant equities
□Available □Not available
9. Analysis of main holding and joint stock companies
□Available □Not available
Situation of main subsidiaries and joint stock companies affecting over 10% of the Company’s net profit
Unit: CNY
Company Main Registered Operating Operating
Company name Total assets Net assets Net profit
type business capital revenue profit
Yantai Changyu
Pioneer Wine Sales Subsidiary Sales CNY8million 989932250 176281834 2670739279 639123060 509991945
Co. Ltd.Yantai Changyu Wine
Subsidiary Sales CNY5million 169968188 151271261 1040063518 117359790 87244317
Sales Co. Ltd.Changyu Trading Co.Ltd. in Development Subsidiary Sales CNY5million 66005809 14386591 181246321 68884834 46573280
Zone of Yantai
Laizhou Changyu
Subsidiary Sales CNY1million 55767467 1000000 259246590 77371763 58027832
Wine Sales Co. Ltd.
28Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Acquisition and disposal of subsidiaries during the report period
□Available □Not available
Explanation on main holding and joint stock companies
10. Situation of the structured subjects controlled by the Company
□Available □Not available
11. Expectation for the Company’s future development
On the basis of our limited experience and professional skills the Company makes the following
judgments on the wine industry and future development:
(1) The sector competition pattern and development trend
Affected by the increase in the uncertainty caused by the slowdown of national macroscopic
economy growth and other factors such as COVID-19 epidemic the wine consumption scene is
blocked and is obviously squeezed by other alcoholic products. Most wine companies have small
scales with poor profitability and do not have much resources for cultivating the market.The full
recovery of the wine market will take a long hard time.Although the development of the wine industry is currently encountering some difficulties there are
also lots of positive factors for the development of the industry. President Xi Jinping pointed out
that ‘China’s wine industry has great prospects’ when he inspected Ningxia. The local governments
of all wine-producing regions are actively responding to support the development of the wine
industry. The atmosphere of domestic wine consumption and the perception of healthy wine
consumption are gradually forming. Young consumer groups have the momentum to switch to wine
consumption. Consumption of domestic products has gradually become a fashion. In the long run
the huge development potential has not changed.In such a case of long-term coexistence of opportunities and challenges those enterprises that
possess strong brand influence and marketing ability catch the opportunities actively take
adjustments make full use of newly emerging and traditional sales channels make efforts to guide
and cultivate wine consuming groups timely satisfy the consumers’ demands and provide products
with high cost performance will have the opportunity to be the final winner of competitions and
then form a new pattern of the future Chinese wine market.
(2) The Company’s development strategyThe Company will adhere to the development strategy of “Focus on middle-and-high level Focuson high quality Focus on big product”and the marketing philosophy of “obtaining growth from theterminal and nurturing consumers”continue improving the relatively independent system
construction of wine brandy imported wine and overseas business enhance wine scale up brandy
improve imported wine stabilize overseas business and promote the all-round development of
various alcohol products.
(3) Management plan for the new year
In 2022 the Company will try its best to realize operating revenue of not less than CNY4.3billion
and control the main operating costs and three period expenses below CNY3.4billion.
(4) Measures to be taken by the Company
29Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
In 2022 the China’s economic development is currently facing triple pressures including demand
contraction supply shock and weakening prediction and the development trend of the wine
industry is still not optimistic.The Company will take 130th anniversary of Changyu’s establishment
as an opportunity to mobilized all members of the Company integrate various resources stand at a
new starting point and implement new measures to promote the Company to move forward in
adversity and achieve greater development.The first is to reform the market system increase marketing innovation and promote the Company’s
development. According to different types of wine variety grades consumer groups and marketing
methods the Company established six business divisions that include: establishing Longyu
business division to further on high-end strategic brands; establishing Chateau wine business
division to stabilize and consolidate the existing high-end wine market; establishing the Nobel
Dragon business division to stabilize the basic market sales; establishing brandy business division to
form a more independent brandy sales system; establishing imported wine business division to
continue to specialize in imported wine business; establishing online business division to seek
greater development of online business. The Company focuses more on marketing strategies and
investment integrates more investment prescribed marketing actions invests more in the
cultivation of target consumer groups and core brand promotion and accurately reaches the
middle and high-end consumer class and captures the iteration of young consumer groups to explore
more marketing innovation opportunities. The Company continues to deepen cooperation with
e-commerce platforms such as JD.com and Tmall vigorously promotes digital transformation
integrates and opens up various business modules and continuously empowers the online and
offline operation system and performance growth.The second is to adhere to the concept of “consumer first” and continuously improve product quality.The Company continues to do a good job in the construction of grape bases vigorously cultivate
small varieties of red grapes and white grapes that are in line with the region and continues to do a
good job in the research and development of special products such as collectible wine customized
wine tourism products and commemorative wine; Innovate base management methods strengthen
process control scientifically judge the harvest period and marked-based pricing and improve
product quality from the source. Strengthen quality supervision throughout the entire process
accurately grasp consumer needs and strive to satisfy consumers.The third is to strengthen the construction of talent team and continue to cultivate reserve forces.The Company continues to strictly control the import of personnel release the export of personnel
streamline the allocation of management personnel and steadily reduce the number of front-line
employees in the production system on the premise of ensuring the basic stability of key personnel
in order to increase wages and efficiency by reducing staff. The Company tightens recruitment
standards expands recruitment channels and vigorously introduces professional talents in
technology sales management etc.; continue to implement the training plan for young talents
strengthen professional training improve ability tap potential and increase the training and reserve
of young talents.The fourth is to focus on enhancing the Company’s brand and strengthening the industrial tourism
industry. Further standardize the reception of tourists strengthen professional training improve
reception level improve service quality enhance tourists’ satisfaction improve the Company’s
image and brand reputation and strive to convert tourists into fans of the Company’s products and
brand. Committed to creating personalized new products with novel images and unique styles to
30Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
impress and attract tourists; strengthen organizational reform complete the integration of tourism
business eliminate functional overlap and multiple management increase per capita tourist
reception and per capita efficiency to promote tourism business to a higher level.The fifth is to do a good job in basic management to ensure the healthy operation of the Company.All operations and decisions of the Company must be analyzed for legal feasibility and legitimacy
adhere to the bottom line of laws and systems operate in compliance with laws and prevent legal
risks. Strictly follow and implement various safety management rules and regulations strengthen
safety management improve risk prevention and control and emergency response mechanisms and
ensure safe operation. Improve the scientificity and accuracy of budget preparation strengthen
budget performance management. Strengthen the audit of the authenticity of profits the authenticity
of inventory the audit of key costs and expenses the audit of investment projects in technological
transformation and advertising expenses and increase accountability for economic losses. Further
improve the financial management system of overseas subsidiaries strengthen dynamic monitoring
and operation analysis continue to pay attention to the operation and capital risks of overseas
enterprises and improve the risk prevention and control capabilities of overseas enterprises.The sixth is to coordinate the preparations for the series of activities of Changyu’s 130th anniversary.During the year the Company will organize and carry out a series celebration of the Changyu’s
130th establishment anniversary together with various departments leaders at all level brother
enterprises experts and scholars distributors consumers domestic and foreign partners and the
Company’s employees who support the development of Changyu to improve the reputation and
influence of Changyu brand.
(5) Potential risks
* Risk in price fluctuation of raw materials
Grapes are the Company’s main raw materials. The grape’s yield and quality are affected to a
certain extent by the natural factors such as drought wind rain frost and snow. These force majeure
factors greatly influence the quantity and price of the grapes in this Company orders and add the
uncertainty to the Company’s production and operation. Therefore the Company will lower the
risks that are likely to affect grape quality and result in price fluctuation by means of expanding the
self-run vineyards strengthening the vineyard management and optimizing the layout of vineyards.* Risk in uncertainty of market input and output
To cope with the cutthroat market competition and to meet the needs for market development the
Company has input more and more capital in the market and the sales expense has taken up a higher
percentage point in the business revenue. The input-output ratio will affect the Company’s operating
results to a great extent and the risk that some investments may not reach the expectations is likely
to occur. Therefore the Company will strengthen market research and analysis enhance market
forecast accuracy and continue to perfect the input-output evaluation system to ensure the
investments in market to be satisfactory as expected.* Risk in product transport
The Company’s products are fragile and sent to different places all over the world mostly by sea
railway and expressway. The peak season of sales is usually in cold winter and close to the spring
festival when market has a great demand. At that time the natural and human factors such as serious
shortage of transport capacity resulting from busy flow of people and goods wind snow freezing as
well as traffic accidents make the transport departments difficult to send products to markets in time
and safely. As a result it makes this Company have to face the risks of missing the peak season of
31Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
sales. Therefore the Company will adopt all methods possible like making precise sales prediction
and well designed connection of production and sales reasonably arranging production and
transport means and making use of more available warehouses in different places to lower these
kinds of risks.* Risk in investment faults
The Company invested many projects in the previous periods and the investment amounts were
relatively large. For individual project owing to the influence of various factors it led to have the
risks of facing with the investment amount out of budget or hardly taking back the expected
investment earnings. The Company will take an adequate argument and scientific decision-making
for investment projects try hard to reduce and avoid investment risks.* Risk in exchange rate
The Company’s overseas subsidiaries export products to many different countries and the export
amount is relatively large. There may be exchange losses or gains due to exchange rate fluctuation.* Risk in epidemic risk
The Company’s products are currently mainly used for people’s consumption at gatherings. If the
chance of gathering declines due to the epidemic it may have a greater negative impact on the
Company’s product sales.* Other risks
During the production and sales of the Company’s products it may be affected by force majeure
such as wars typhoons earthquakes etc..
12. Activity registration form for receptions of research communication visit and other
activities during the report period
□Available □Not available
Type of Main discussed
Reception Reception Reception Basic situation
reception Reception object contents and
time place pattern index of reception
object provided data
The recent
The website of
production and
www.quanj Shenzhen Stock
2021.05.12 Other Other Secondary market investors operation
ing.com Exchange
situation of the
(https://biz.szse.cn)
Company
Mr. Wang Peng from ICBCCS
Mr.Wang Yongming from New
China Fund Mr. Liu Aofei from
The recent
The Xiangcai Fund Mr. Lei Kai The website of
production and
Company’s Field from New China Asset Mr. Gao Shenzhen Stock
2021.05.18 Institution operation
meeting research Bo and Ms. Tang Chenchen Exchange
situation of the
room from Funding Capital (https://biz.szse.cn)
Company
Management Company and Ms.Deng Tianjiao from BOC
International (China) Co. Ltd.
32Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
IV. Corporate Governance
1. Current Corporate Governance Situation of the Company
(1) About shareholders and shareholders’ meeting
The Company has set up the Deliberation Rules of Shareholders’ Meeting and convened the
shareholders’ meetings in strict accordance with requirements of standard opinions of shareholders’
meeting made the great effort to provide convenient conditions for more shareholders to
participate the shareholders’ meeting and ensured all shareholders to enjoy same equity and well
exercised their rights. The Company drew great attention to the communication and exchange with
shareholders actively responded the shareholders’ inquiry and questions and widely listened to the
suggestions and comments from shareholders.
(2) About the Company and holding shareholder
The Company has independent business and self-management capacity which is independent from
the controlling shareholders in business staffs assets institutions and finance. The Board of
Directors Board of Supervisors management teams and also internal institutions are able to
operate independently in the Company. The controlling shareholders of the Company could
regulate their behaviors without directly or indirectly interfering in the Company’s decision-making
and business activities beyond the shareholder’s meeting; meanwhile there is no case of
encroaching on the Company’s assets and damaging the interest of the Company and minority
shareholders.
(3) About the director and board of directors
The Company strictly appoints all directors in light of Corporation Act and Articles of Associations.The qualifications of all directors are in line with the requirements of laws and regulations. In
accordance with the requirements of Corporate Governance Guidelines the Company has carried
out the cumulative voting system in the director selection. At present the Company has five
independent directors accounting for above one third of all directors and the number and personnel
composition of board of directors was basically in accord with requirements of regulations as well
as Articles of Associations. All directors of the Company were able to carry out work in accordance
with the Rules of Board of Directors’ Procedure and Working Rules for Independent Directors
punctually attended the board of directors’ and shareholders’ meetings actively took part in
relevant knowledge training were familiar with the laws and regulations concerned had a deep
knowledge and long experience of practitioners and performed their duties according to the law
and regulations. The Board of Directors convened the meetings complies with relevant laws and
regulations.
(4) About supervisor and board of supervisors
The Company strictly elected all supervisors in light of the procedures stipulated in the Corporation
Act and Articles of Associations. At present board of supervisors has three people among which one
supervisor is representative for staff. The number and composition of board of supervisor meet the
requirements of regulations and laws. All supervisors of the Company could follow the requirement
33Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
of Rules of Board of Supervisors’ Procedure insist the principle of responsibility to all shareholders
seriously perform their duties effectively supervise and present their independent opinions on
important issues interrelated deals financial status the duty performance of directors and managers
of the Company.
(5) About performance evaluation and incentive system
The engagement of managers was open and transparent and accorded with laws and regulations.The Company has established and gradually improved the performance evaluation standard and
formed efficient incentive system so as to ensure the salary of staff to be linked with work
performance.
(6) About stakeholders
The Company could fully respect and safeguard the legal rights of the party with relevant benefit
cooperate actively with the stakeholders jointly drive the Company to develop continually and
stably pay great attention to the issues such as local environmental protection and public utilities
etc. and fully assume the due social responsibility.
(7) About the information disclosure and transparency
The Company has appointed the board secretary to be responsible as the head of investor relation
management including information disclosure investor relations management and reception of
shareholders’ visit and consultation. The Company has also assigned China Securities Newspaper
Securities Times Honkong Commercial Daily and web site http://www.cninfo.com.cn/ to disclose
information punctually accurately and truly disclosed any information in the light of requirement
of relevant laws and rules and also ensured all shareholders to have same opportunity to acquire
any information.In order to further perfect the Company’s governance system during the report period the
Company formulated and improved the management systems including 2021 Product Quality
Assessment Measures Requirements for Further Strengthening the Management of Packaging
Material Suppliers Opinions on Standardizing the Management of Informal Employment in
Production and Tourism Systems and so on.Whether or not there is significant variance between the Company’s actual situation of corporate
governance and the normative documents about listed company governance issued by China
Securities Regulatory Commission.□Yes □No
There is no significant variance between the Company’s actual situation of corporate governance
and the normative documents about listed company governance issued by China Securities
Regulatory Commission.
2. Relative to the controlling shareholder and actual controller independence of the Company
on ensuring the company’s assets personnelfinance organization business etc.
(1) Personnel Arrangement
The Company’s general manager deputy general managers and other senior officers all of whom
were paid by the Company and did not hold any concurrent administrative ranks in the controlling
34Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
units. The Company was entirely independent in personnel arrangement conclusion and adjustment
of labor contracts thanks to its sound and independent system for labor personal and salary
management.
(2) Assets
Tangible assets and Intangible assets including trademark industrial property right and non-patent
technologies were all clearly divided between the Company and the controlling shareholders and
all legal formalities were completed. As an independent legal entity the Company operates
independently in accordance with the law and does not provide any form of guarantee with its
assets for shareholders’ or individuals’ liabilities or other legal or natural persons. Due to the
historical issues the ownership of trademarks such as “张裕 ” (Changyu) that the Company is
permitted to use that are still remained with the controlling shareholder. Except for a very small
number of trademarks such as “张裕”(Changyu) the Company has ownership rights of the vast
majority of trademarks being used by the Company which ensures the independence and
completeness of the Company’s assets.
(3) Finance
The Company is equipped with independent finance department financial administrator and
financial and accounting staff as well as a complete independent and standardized financial
accounting system. The Company also opened its own bank accounts independent and legally
paying taxes and workers insurance fund. All financial individuals do not hold any concurrent posts
in associated companies and are able to make financial decisions independently. The Company has
its own audit department which is especially responsible for the internal audit work of the
Company.
(4) Independent Institutions
The Company has set up a sound organizational framework in which the Board of Directors and
Board of Supervisors operate independently no superior and subordinate relationship exists
between the functional departments of the controlling shareholder. The Company has its own
independent production & business offices and all functional departments are independent to
exercise their powers and carry out the production and business activities independently.
(5) Operations
The operations of the Company are independent of the controlling shareholders. The Company
owns itself completely independent systems covering research and development financial
accounting labor and human resource quality control raw materials purchase production and sales
has the independent management ability and does not have the problem that entrusts the controlling
shareholders to buy and sell on commission nor exist the horizontal competition with controlling
shareholders.
3. Situation for Horizontal Competition
□Available □Not available
35Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
4. Information for the shareholders’ meeting and interim shareholders’ meeting held during the report period
(1) Information for the shareholders’ meeting during the report period
Participation ratio Convening Disclosure
Session Meeting type Meeting Resolution
of investors date date
The meeting deliberated and approved the 2020 Annual Board of Directors’ Work Report
2020 Annual 2020 Annual Board of Supervisors’ Work Report 2020 Annual Report Proposal on 2020
Annual shareholders’
Shareholders’ 62.28% 2021.05.27 2021.05.28
Meeting Annual Profit Distribution Proposal on Appointing Certified Public Accountants Firm and
Meeting
Proposal on 2021 Annual Financial Budget.
(2) Request for convening interim shareholders’ meeting by priority shareholders owing recovered voting right
□Available □Not available
5. Situation for Directors Supervisors Senior Executives and Staff
(1) Changes in shareholdings of directors supervisors and senior executives
Shares held at Decreased Shares held at Reasons of the
Beginning date Ending date Increased shares Other changes of
Name Post Status Gender Age the beginning shares during the end of the increase and decrease
of tenure of tenure during the period shares held
of the period the period period change of shares held
Zhou Secondary market
Chairman Incumbent M 57 2002.05.20 2022.05.18 36500 1300 37800
Hongjiang purchases
Leng Bin Director Incumbent M 59 2000.08.22 2022.05.18 0 0
Secondary market
Sun Jian Director Incumbent M 55 2019.05.17 2022.05.18 30000 30000 60000
purchases
Li Jiming Director Incumbent M 55 2019.05.17 2022.05.18 0 0
36Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Chen
Director Incumbent F 55 2019.05.17 2022.05.18 0 0
Dianxin
Aldino
Director Incumbent M 69 2006.12.07 2022.05.18 0 0
Marzorati
Stefano
Director Incumbent M 63 2020.05.27 2022.05.18 0 0
Battioni
Enrico
Director Incumbent M 53 2019.05.17 2022.05.18 0 0
Sivieri
Chiang Yun Director Incumbent F 54 2020.06.19 2022.05.18 0 0
Luo Fei Independent director Incumbent M 69 2016.09.23 2022.05.18 0 0
Duan
Independent director Incumbent M 57 2019.05.17 2022.05.18 0 0
Changqing
Liu Huirong Independent director Incumbent F 58 2019.05.17 2022.05.18 0 0
Liu Qinglin Independent director Incumbent M 58 2019.07.02 2022.05.18 0 0
Yu Renzhu Independent director Incumbent M 43 2020.05.27 2022.05.18 0 0
Kong Chairman of the Board Incumbent M 49 2013.05.14. 2020.05.18 0 0
Qingkun of Supervisors
Zhang
Supervisor Incumbent F 52 2013.05.14. 2020.05.18 0 0
Lanlan
Liu Zhijun Supervisor Incumbent M 41 2016.05.26 2020.05.18 0 0
Sun Jian General manager Incumbent M 55 2018.01.10 2022.05.18 0 0
Deputy general
Li Jiming Incumbent M 55 2019.05.28 2022.05.29 0 0
manager
Deputy general
Jiang Hua Incumbent M 58 2001.09.14 2022.05.29 0 0
manager
Deputy general
Peng Bin Incumbent M 55 2018.01.10 2022.05.29 0 0
manager
Deputy general
Jiang
manager and Board Incumbent M 55 2019.05.28 2022.05.29 0 0
Jianxun
secretary
General manager
Pan Jianfu Incumbent M 46 2018.04.19 2022.05.29 0 0
assistant
General manager
Liu Shilu Incumbent M 47 2018.04.19 2022.05.29 0 0
assistant
37Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Xiao General manager Incumbent M 45 2018.04.19 2022.05.29 0 0
Zhenbo assistant
Total -- -- -- -- -- -- 66500 31300 0 0 97800 --
Is there any resignation of directors and supervisors and dismissal of senior management personnel during their term of office during the reporting
period
□Yes □No
Changes of directors supervisors and senior managers of the company
□Available □Not available
(2) Situation for work experience
The professional background main work experiences and present positions of the Company’s directors supervisors and senior executives
* Members of Board of Directors
Mr. Zhou Hongjiang male 57 Chinese with doctoral degree senior engineer used to be the General Manager of Yantai Changyu Pioneer Wine Sales
Co. Ltd. the Deputy General Manager the General Manager and the Deputy Chairman of Yantai Changyu Pioneer Wine Co. Ltd.. He is incumbent as
the representative of the 13thNational People’s Congress the Chairman of Yantai Changyu Group Co. Ltd. and the board director and the Chairman
of the Company.Mr. Leng Bin male 59 Chinese with master degree senior accountant used to be the Deputy Section Chief and the Section Chief of Yantai Audit
Bureau the board director and the Chief Accountant of Yantai Changyu Group Co. Ltd. and the board director and the Deputy General Manager of the
Company. He is incumbent as the board director of the Group Company and the Company with an additional post of the General Manager of the
Group Company and the Chairman and General Manager of Yantai Zhongya Medical Health Wine Co. Ltd..Mr. Sun Jian male 55 Chinese MBA used to be the Deputy General Manager of the Company. He is incumbent as the board director and the
General Manager of the Company and with an additional post of the board director of the Group Company.Mr. Li Jiming male 55Chinese with doctoral degree application researcher used to be the Chief Engineer of the Company. He is incumbent as the
board director and the Deputy General Manager of the Company and with an additional post of the board director of the Group Company.
38Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Ms. Chen Dianxin female 55Chinese with master degree of the Party School; from July 1985 to
October 2018 she used to serve as staff of Yantai Chemical Purchasing and Supply Station staff of
Yantai Stated-owned Assets Assessment Center the Deputy Director of Yantai Stated-owned
Assets Assessment Center the Deputy Section Chief of Assets Assessment Management
Department in Yantai State-owned Assets Bureau the Deputy Section Chief of Assets Assessment
Management Department in Yantai State-owned Assets Supervision and Administration
Commission full-time Deputy Secretary of Party branch in Yantai State-owned Assets Supervision
and Administration Commission the Section Chief of Property Management Department in Yantai
State-owned Assets Supervision and Administration Commission the Director of retired carders
work office and the Section Chief of Property Management Department in Yantai State-owned
Assets Supervision and Administration Commission and the Director of retired carders work office
in Yantai State-owned Assets Supervision and Administration Commission. Since October 2018
she has been served as the Deputy Secretary of Party branch and the General Manager of Yantai
Guofeng Investment Holding Group Co. Ltd. and the current board director of Yantai Changyu
Group Co. Ltd. and the Company.Mr. Aldino Marzorati male 69 Italian with bachelor degree servescurrently as the General
Manager of Illva Saronno Holding S.p.A the member of the board of directors of some branches
under the Group Company and the board director of Changyu Group Co. Ltd. and the Company.Mr. Stefano Battioni male 63 Italian graduated with a bachelor’s degree. He has served as a
Senior Product Manager of Colgate Palmolive in Italy the Marketing Director of Barilla Holding
the International Marketing Director and the Spirits Business Unit Director-General Manager of
Illva Saronno S.p.A. (a spirit company as a wholly-owned subsidiary of Illva Saronno Holding
S.p.A.). He is currently the CEO of Illva Saronno S.p.A. and the board director of Changyu Group
Co. Ltd. and the Company.Mr. Enrico Sivieri male 53 Italian with bachelor degree served successively as the financial
controller of ARNEG S.p.a. the commercial analyst of SPILLERS FOODS ITALIA S.p.a. the
trade controller of Nestle’ Purina Petcare Europe European marketing & sales controller of Nestle’
Purina Petcare Europe the European supply chain controller of Nestle’ Purina Petcare Europe the
Southern Europe regional controller of Nestle’ Purina Petcare Europe and the Director of group
financial controlling of Illva Saronno Holding S.p.A. and currently serving as a member of the
board of directors for Royal Oak Distillery Ltd. and the General Manager of Illva Saronno Holding
S.p.A. and the board director of the Company.Ms. Chiang Yun female 54 successively obtained Bachelor of Science degree Magna Cum Laude
from Virginia Tech Virginia EMBA of The Kellogg School of Management at North Western
University USA and EMBA of The Graduate School of Management Hong Kong University of
Science and Technology Hong Kong China. She used to acted as Director at American
International Group (AIG) direct investment team the Managing Partner of Pacific Alliance Group
(PAG). She currently serves as the INED and member of Audit Committee and Nomination
Committee in Las Vegas Sands China the INED and member of Audit Committee Remunerations
Committee and Nomination Committee in Goodbaby International Holding Ltd. the INED
member of Audit Committee and Nomination Committee and Chairlady of Remunerations
Committee in Pacific Century Premium Developments Ltd. the INED and member of Audit
Committee and Health Safety and Security Committee in Merlin Entertainments plc. the CEO and
39Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Founding Partner of Prospere Capital and the board director of the Group Company and the
Company.Mr. Luo Fei male 69 Chinese with doctoral degree visiting scholar of University of Toronto
doctoral supervisors Government Special Allowance expert first batch of trans-century subject
(academic) leading personals of Financial Department. He successively served as the Dean of
Accounting Institute in Zhongnan University of Economics and the Dean of Accounting Institute in
Zhongnan University of Economics and Law. He focuses on the study of Financial Accounting
Cost Accounting Financial Management and so on. He has worked in companies for many years
and has practical working experience with companies. Now he is serving as an independent director
of the Company.Mr. Duan Changqing male 57 Chinese with doctoral degree professor doctoral and master’s
supervisor and the national senior winemaker and senior wine taster.He currently serves as the
chief scientist of national grape industry technology system and the Director of Wine Processing
Key Laboratory of Ministry of Agriculture and Rural Affairs. Meanwhile he holds concurrent posts
of the Director of China Wine Technology Committee the Director of China Wine and Fruit Wine
Expert Committee the Executive President and the Secretary General of Grape and Wine Branch of
Chinese Horticultural Society and the Vice President of China Agricultural Society Grape Branch.His major research fields are the basic theoretical research and related high and new technology
research and development as well as application promotion work in the direction of suitability
between ecology in producing area and grape variety and liquor variety evolvement mechanism
and directional brewing of wine flavor formation grape fruit flavor metabolism regulation and
product flavor quality evaluation and so on. He is a current independent director of the Company.Ms. Liu Huirong female 58 Chinese with doctoral degree the former Deputy Dean and Dean of
the Institute of Political Science and Law of Ocean University of China. She used to serve as an
independent director of Sailun Group Co. Ltd. Longda Meat and Sacred Sun Co. Ltd. and
Shandong Sacred Sun Power Sources Co. Ltd.. Currently she is a second-level professor and
doctoral supervisor of Ocean University of China and with additional post as a researcher of the
“Belt and Road Initiative” Judicial Research Center of the Supreme People’s Court an expert at the
Supreme People’s Court for foreign-related commercial and maritime action expert database the
Deputy Chairman of the sixth Shandong Law Society and the Deputy Director of the Academic
Committee and the Chairman of the Qingdao Law-based Government Research Institute. Her
research fields are International Law and Legislative Science. She has won the title of Shandong
Top Ten Outstanding Young and Middle-aged Jurists the third prize of Excellent Social Science
Achievement of the Ministry of Education the third prize of Shandong Excellent Social Science
Achievement the second prize of Shandong Excellent Philosophy and Social Science Achievement
the first prize of Excellent Achievement of Shandong Education Department and the Top Talent in
Qingdao City. She is a current an independent director of the Company.Mr. Liu Qinglin male 58 doctoral degree of Management Chinese no overseas permanent
residence. He is currently a professor and doctoral supervisor of Economics Faculty of Shandong
University the Director of Institute for World Economy Studies of Shandong University the
Executive Deputy President of Shandong Institute of Development of Shandong University a
member of a council of China Society of World Economics an executive member of a council of
The Association for Canadian Studies in China and Shandong Youth Scholars Association a
member of a council of Shandong Association for Business Economics and Shandong Price
40Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Association. He currently serves as an independent director of Shandong Xinneng Taishan Power
Generation Co. Ltd. an independent director of Weihai Huadong Automation Co. Ltd. and an
independent director of the Company.Mr. Yu Renzhu male 43 Chinese doctor of management high-level talents of Jinan used to act as
the Deputy Director of Huanglong National Scenic Area Administration in Aba prefecture of
Sichuan province as a member of the 18th doctoral team of the Central Organization Department
and the Communist Youth League of China and also ever acted as managing director of Shandong
Agricultural Economy Society. Currently he serves as a professor and a master supervisor in
School of Business Administration in Shandong University of Finance and Economics the
managing director of Chinese Marketing Association of Universities and an independent director of
this company.* Members of board of supervisors
Mr. Kong Qingkun male 49 Chinese MBA and economist successively served as a section
member of production department in the healthy liquor branch office a clerk and the
DeputyDirector and the Director of general manager office.Ms. Zhang Lanlan female 52 bachelor degree and economist successively served as the Deputy
Manager of the import and export branch of the Company and the Manager of import department of
the Company. She now is the Director of board of directors’ office.Mr. Liu Zhijun male 41 Chinese bachelor degree; from July 2003 to February 2019 he used to
serve as the staff of worked in foreign fund department of Economy and Trade Bureau in Longkou
Economic Development Zone a news section member of propaganda department in Longkou
Municipal Committee a member of propaganda and mass work section a member of planning
section the Deputy Director Member of programming development and enterprise distribution
section the Deputy Director Member and the Deputy Chief of programming development section
the supervisor (section chief rank) of the Dongfang Electronics Corporation Co. Ltd. Shandong
Laidong Engine Co. Ltd. and Yantai Public Transportation Group Co. Ltd. and a section chief
rank of Yantai Municipal Audit Bureau; from March 2019 to June 2020 he served as the had of the
equity management department of Yantai Guofeng Investment Holding Group Co. Ltd.; from June
2020 to present he serves as a member of the Party Committee the deputy general manager and
secretary of the board of director of Yantai Guofeng Investment Holding Group Co. Ltd. He now is
a supervisor of the Company.* Other senior executives
Mr. Jiang Hua male 58 Chinese with master degree senior engineer has been serving as the
Deputy General Manager of the Company since 14th September 2001.Mr. Peng Bin male 55 MBA senior engineer ever successively served as the Department Chief
of Technical Transformation Department and the Minister of Investment and Development
Department as well as the Deputy General Manager of Yantai Changyu Group Co. Ltd. and the
General Manager Assistant of Yantai Changyu Group Co. Ltd.. He currently serves as the Deputy
General Manager of the Company.Mr. Jiang Jianxun male 55 Chinese MBA and accountant served as the Financial Manager of the
Company from 20th May 2002 to 10th January 2018. He serves as the Deputy General Manager and
Board Secretary of the Company.Mr. Pan Jianfu male Han ethnic Chinese 46 MBA and senior economist used to serve as the
General Manager of the Jiangxi Branch of the Company the General Manager of the Shanghai
41Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
marketing management company and the General Manager of Beijing marketing management
center. Currently he is the General Manager Assistant of the Company and the General Manager of
Beijing marketing management center and Beijing Chateau AFIP.Mr. Liu Shilu male Han ethnic Chinese 47 master degree used to be the Manager of Tianjin
branch of the Company the Competence Manager of North China market the General Manger of
Beijing marketing management company the General Manager of Guangdong marketing
management center and the General Manager of e-commerce branch of the Company. Currently he
serves as the General Manager Assistance of the Company and the General Manager of Yantai
Changyu Pioneer Wine Sales Co. Ltd..Mr. Xiao Zhenbo male Han ethnic Chinese 45 MBA served as the Deputy Manager of the
Company’s market strategy development center the General Manager of Shandong marketing
management company and Yantai Changyu liquor company. He currently serves as the General
Manager Assistant of the Company and the General Manager of Zhejiang marketing management
company.Post in the shareholder’s company
□Available □Not available
Beginning date Ending date of Paid by shareholder’s
Name Shareholder’s Company Post
of the post the post company or not
Zhou Hongjiang Yantai Changyu Group Co. Ltd. Chairman 2018.01.10 2026.01.11 No
Leng Bin Yantai Changyu Group Co. Ltd. Director 2018.01.10 2026.01.11 Yes
Leng Bin Yantai Changyu Group Co. Ltd. General manager 2018.01.10 2026.01.11 Yes
Sun Jian Yantai Changyu Group Co. Ltd. Director 2018.01.10 2026.01.11 No
Li Jiming Yantai Changyu Group Co. Ltd. Director 2018.01.10 2026.01.11 No
Chen Dianxin Yantai Changyu Group Co. Ltd. Director 2018.11.15 2026.01.11 No
Aldino Marzorati Yantai Changyu Group Co. Ltd. Director 2018.01.10 2026.01.11 No
Enrico Sivieri Yantai Changyu Group Co. Ltd. Director 2018.01.10 2026.01.11 No
Stefano Battioni Yantai Changyu Group Co. Ltd. Director 2020.04.09 2026.01.11 No
Chiang Yun Yantai Changyu Group Co. Ltd. Director 2020.05.12 2026.01.11 No
Explanation for the post in Mr. Leng Bin also holds concurrent post as the Chairman and General Manager of Yantai Zhongya Medical Health
the shareholder’s company Wine Co. Ltd. which is a subsidiary of Yantai Changyu Group Co. Ltd..Post at other companies
□Available □Not available
Disciplinary actions taken by securities regulators in recent 3 years to the Company’s directors
supervisors and senior management both on the job and left during the report period
□Available □Not Available
In 2019 the Shandong Regulatory Bureau of China Securities Regulatory Commission issued a
“Decision on Measures to Issue Warning Letters to Mr. Zhou Hongjiang and Mr. Qu Weimin” but
it did not impose administrative penalty on Mr. Zhou Hongjiang and Mr. Qu Weimin.
42Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
(3) Salary of directors supervisors and senior executives
The situation of decision-making process the basis of determination and the actual payment of
directors supervisors and senior executives
The salary for the independent directors is paid according to the resolution of shareholders’ meeting.The salary for the chairman directors with administration duty supervisors managers and other
senior management should be paid on basis of the evaluation result according to the Yantai
Changyu Pioneer Wine Co. Ltd. Executive Compensation and Performance Design which was
passed during the Board of Directors’ meeting.Salary of directors supervisors and senior executives during the report period
Unit: CNY’0000
Total reward from the Whether get reward from
Name Post Gender Age Status
Company before tax related parties of the Company
Zhou Hongjiang Chairman M 57 Incumbent 176.42 No
Leng Bin Director M 59 Incumbent 0 Yes
Sun Jian Director and General Manager M 55 Incumbent 160.38 No
Li Jiming Director and Deputy General Manager M 55 Incumbent 122.17 No
Chen Dianxin Director F 55 Incumbent 0 No
Aldino Marzorati Director M 69 Incumbent 0 No
Stefano Battioni Director M 63 Incumbent 0 No
Enrico Sivieri Director M 53 Incumbent 0 No
Chiang Yun Director F 54 Incumbent 0 No
Luo Fei Independent Director M 69 Incumbent 8 No
Duan Changqing Independent Director M 57 Incumbent 8 No
Liu Huirong Independent Director F 58 Incumbent 8 No
Liu Qinglin Independent Director M 58 Incumbent 8 No
Yu Renzhu Independent Director M 43 Incumbent 8 No
Kong Qingkun Chairman of the Board of Supervisors M 49 Incumbent 80.69 No
Zhang Lanlan Supervisor F 52 Incumbent 19.38 No
Liu Zhijun Supervisor M 41 Incumbent 0 No
Jiang Hua Deputy General Manager M 58 Incumbent 120.79 No
Peng Bin Deputy General Manager M 55 Incumbent 121.58 No
Deputy General Manager and Board
Jiang Jianxun M 55 Incumbent 113.39 No
Secretary
Pan Jianfu General Manager Assistant M 46 Incumbent 69.96 No
Liu Shilu General Manager Assistant M 47 Incumbent 80.19 No
Xiao Zhenbo General Manager Assistant M 45 Incumbent 70.48 No
Total -- -- -- -- 1175.43 --
43Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
6. Performance of directors during the report period
(1) The situation of the board of directors’ meetings during this reporting period
Holding Disclosure
The session of meetings Meeting resolution
date date
The meeting deliberated and approved 2020 Annual Board of Directors’ Work Report 2020 Annual General
Manager’s Work Report 2020 Annual Report Proposal on 2020 Annual Performance Assessment Result of
the Company’s Senior Executives Draft Proposal on 2020 Annual Profit Distribution 2020 Annual Self
The Eighth Session Board of
th 2021.04.26 2021.04.28 Assessment Report on Internal Control 2020 Annual Social Responsibility Report Proposal on RelevantDirectors 7 Meeting
Issues of Convening 2020 Annual Shareholders’ Meeting Proposal on 2021 Annual Financial Budget
Proposal on 2021 Annual Capital Expenditure Plan Proposal on 2021 Annual Routine Related Transaction
Proposal on Change in Accounting Policy and Proposal on Appointing Certified Public Accountants Firm.The Eighth Session Board of
th 2021.04.28 2021.04.29 The meeting deliberated and approved 2021 First Quarter Report.Directors 8 Meeting
The Eighth Session Board of The meeting deliberated and approved 2021 Semi-Annual Report and Proposal on 2021 Semi-Annual Profit
th 2021.08.24 2021.08.26Directors 9 Meeting Distribution.The Eighth Session Board of
th 2021.10.26 2021.10.28 The meeting deliberated and approved 2021 Third Quarter Report.Directors 10 Meeting
44Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
(2) Attendance of directors for the board of directors’ and the shareholders’ meetings
Attendance of directors for the board of directors
Required attendance Personal Communication Authorized Whether or not to attend the meetings Attendance time for the
Name Absence
time attendance attendance attendance personally for successive twice shareholders’ meeting
Zhou Hongjiang 4 2 2 No 1
Leng Bin 4 2 2 No 1
Sun Jian 4 2 2 No 1
Li Jiming 4 2 2 No 1
Chen Dianxin 4 2 2 No 1
Aldino Marzorati 4 2 2 No 0
Stefano Battioni 4 2 2 No 0
Enrico Sivieri 4 2 2 No 0
Chiang Yun 4 2 2 No 0
Luo Fei 4 2 2 No 0
Duan Changqing 4 2 2 No 0
Liu Huirong 4 2 2 No 0
Liu Qinglin 4 2 2 No 0
Yu Renzhu 4 2 2 No 0
Explanation for failed to personally attend the Board of Directors’ meetings for successive two times
During the report period there were no directors who did not attend the shareholders’ meetings in person for two consecutive times.
(3) Any objections for the Company’s projects from the directors
Whether or not the directors raised any objection for the Company’s projects
□Yes □No
During the report period the directors did not raise any objections for the Company’s projects.
45Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
(4) Other explanations on directors’ performance
Whether or not the directors’ propositions are accepted by the Company
□Yes □No
Explanation on acceptance or refusal of the independent directors’ propositions to the Company
Some directors proposed to increase investment in the market and the Company had adopted relevant suggestions and increased investment in
marketing during the reporting period.
7. Performance of the special committees under the Board of Directors during the report period
Numbers of Other Specific
Committees Important comments and
Members meeting Held date Meeting contents performance circumstances of the
name suggestions made
held of duties objection (if have)
The meeting deliberated and approved the During the reporting period the
2020 Annual Report Draft Proposal on members of the Audit Committee
2020 Annual Profit Distribution Proposal provided advice and suggestions in
Luo fei Duan
on Appointing Certified Public Accountants guiding the internal audit work
Changqing Liu
Firm 2020 Annual Self Assessment Report supervising and evaluating external
Huirong Liu 2021.04.26 No No
on Internal Control 2021 Annual Internal audit institutions establishing an
Auditing Qinglin Yu
2 Audit Plan. All the committee members effective internal control system and
Committee Renzhu Chen
unanimously agreed to submit the above prompting major business risks and
Dianxin Leng
proposals to the board of directors of the actively safeguarded the interests of
Bin Enrico
company for deliberation. the company and all shareholders.Sivieri
The meeting deliberated and approved the
2021.08.24 2021 Semi-Annual Report and Proposal on No No
2021 Semi-Annual Profit Distribution.
Luo fei Duan The meeting deliberated and approved the During the reporting period the
Emolument
Changqing Liu 1 2021.04.26 Proposal on 2020 Annual Performance Emolument Committee put forward No No
Committee
Huirong Liu Assessment Results of the Company’s relevant suggestions on further
46Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Qinglin Yu Senior Executives. strengthening the performance
Renzhu Chiang assessment of senior executives and
Yun Leng Bin improving the way of remuneration.Aldino
Marzorati
8. The work of the Board of Supervisors
Whether or not the Board of Supervisors found any existence risk to the Company in oversight activities during the report period
□Yes □No
The Board of Supervisors has no objections to supervision matters during the report period.
47Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
9. Staff of the Company
(1) Staff number specialty constitution and education degree
Incumbent staff number of parent company at the end of reporting period(people) 1131
Incumbent staff number of major subsidiary companies at the end of reporting period
1166
(people)
Total incumbent staff at the end of reporting period (people) 2297
Total staff getting paid in current period (people) 2297
Retired staff number whose expenses are undertaken by parent company or subsidiary
0
companies (people)
Specialty constitution
Category Number of people (people)
Production staff 742
Sales staff 1091
Technical staff 149
Financial staff 119
Administrative staff 196
Total 2297
Education degree
Category Number (People)
Postgraduate and above 86
Bachelor 819
Junior College 691
Technical secondary school or Senior high school 475
Junior high school and below 226
Total 2297
(2) Remuneration policy
The Company has established and improved the remuneration and welfare system including salary
system incentive mechanism social security and medical insurance and so on to ensure the
participation of all employees. In accordance with the law the Company purchases social
endowment insurance medical insurance occupational injury insurance unemployment insurance
and maternity insurance and pays housing fund for the employees. Based on the principle of
“distribution according to work and equal pay for equal work” the Company pays the staff’s
remuneration timely. With the improvement of the Company’s profitability the Company steadily
improves the staff’s remuneration and welfare and provides its employees the competitive salary
and equal opportunity for development.
(3) Training plan
* Senior and Middle-level Managers
1) General training
48Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Choose training topics related to the company industry development management direction and
management concept in order to exploit strategic thinking of senior and middle-level
administrative staff promoting operation principle and improve scientific decision-making
ability and management ability.Hold meetings instead of training learn national and local policy analyze domestic and foreign
political situation and economic situation study and understand the influence of related policies
and regulations in the company’s development analyze the development trend of production
technology management and marketing in domestic and foreign industries.
2)Professional training
Based on their respective work organize them to attend Entrepreneur High-end Forum and
Summit Meeting and go to domestic and foreign successful enterprise for visit and study.Encourage middle-level administrative staff to attend university correspondence self-study
examination MBA or other further education for master degree; organize professional
management cadres involved in human resources finance facility safety and technology
quality etc. to attend vocational qualification examination for professional certificate. Attend
special training such as safety human resource law technology facility finance and tourism
etc. which are organized by special management department.* Administrative Staff in Production Tourism and Administrative Systems Whose Level are or
Below Section Chief
1) General training
Hire a professional lecturer or university teacher to teach courses that are aiming at improving
employee management ability innovation ability and executive ability at the company.Attend common-sense general training including company culture regulatory framework and
various liquor products knowledge reinforce training in the aspect of human resource
management and safety production.Organize employee to attend outdoor quality expansion training in order to improve
administrative staff physical quality and teamwork ability.
2) Professional training
Encourage eligible general administrative staff to attend university correspondence self-study
examination MBA or other further education for master degree; organize professional
administrative staff involved in human resources finance facility safety and technology quality
etc. to attend vocational qualification examination for professional certificate.Based on personnel work attending special training such as safety technology facility finance
human resource legal tourism sales and integrated management etc. which are organized by
special management department.* Front-line Workers in Production and Tourism System
1) General training
Attend common-sense general training including company culture regulatory framework and
various liquor products knowledge; reinforce training in the aspect of human resources
management.
2) Professional training
For special types of work organize to attend training which can improve professional skill and
operation level. Organize job skill competitions to popularize professional knowledge and safety
knowledge of different positions to relevant employees through edutainment.
49Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Attend special training such as safety technology facility comprehensive management etc.which are organized by the company.* Marketing Personnel
1) General training
Independently study marketing textbooks mainly focusing on ‘Growth’ as well as training
materials including the company’s related management system production knowledge sales
responsibility system etc..
2) Professional training
Professional lecturers would be employed to the company or through remote internet videos to
give lectures about successful liquor cases current economic trend research for domestic and
foreign wine industry and other topics.Strengthen the training for city marketing managers. Recruit lecturers with professional wine
knowledge to provide professional wine knowledge tasting knowledge and wine tasting etiquette
training to the company’s internal management and sales staffs.For business directors and other personnel each marketing management company should
convene all marketing personnel to carry out marketing training and sharing through monthly
video conferences online sharing WeChat interaction on-site meetings etc. so as to make
progress together.* New Entry University Students
Senior and middle-level administrative staff in the company would be invited to train
undergraduate for enterprise culture regulatory framework safety production product quality
marketing strategy emolument and evaluation system and so on in order for these undergraduate
to understand the company’s conditions in the shortest time.Professional lecturers would be employed to conduct exterior training courses to undergraduate
such as role transition workplace etiquette and team cooperation and so on.
(4) Labor outsourcing
□Available □Not available
10. The Company’s profit distribution and increasing equity with capital reserve
Profit distribution policies especially promulgation implementation or adjustment of cash dividends
policies during the report period
□Available □Not available
Deliberated and passed by the 2020 Annual Shareholders’ Meeting convened on May 27th 2021 by
the Company the Company’s 2020 annual profit distribution scheme is shown as follows: based on
total 685464000 shares (including 453460800 A shares and 232003200 B shares) up to
December 31st 2020 the Company would pay cash dividend to all shareholders registered on the
share registration day: CNY4（including tax）in cash per ten shares. This time the Company would
neither dispatch bonus shares nor increase equity with capital reserve.Total amount of shares has not changed since the disclosure of the distribution plan to the
implementation period.On July 6th 2021 the Company published the Implementation Announcement of 2020 Annual
Equity Distribution on China Securities Journal Securities Times and www.cninfo.com.cn
50Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
determining that the share registration day and the ex-dividend day of A Share was respectively on
July 12th 2021 and on July 13th 2021; the last trading day the ex-dividend day and the share
registration day of B Share was respectively on July 12th 2021 on July 13th 2021 and on July 15th
2021.
This time the dispatching objects contain all A Share shareholders registered at China Securities
Depository and Clearing Corporation Limited Shenzhen Company (hereinafter referred to as CSDC
Shenzhen Company) after closing of Shenzhen Stock Exchange in the afternoon of July 12th 2021
and all B Share shareholders registered at CSDC Shenzhen Company after closing of Shenzhen
Stock Exchange in the afternoon of July 15th 2021 (the last trading day is July 12th 2021).This dispatching has already been completed in mid-July 2021. The profit distribution scheme
implemented this time is consistent with the scheme deliberated and passed by the shareholders’
meeting. The implementation of the profit distribution scheme for this time is not more than two
months after the shareholders' meeting passing it.Special explanation for the cash dividends policy
Whether it is in accordance with the requirements of the regulation in the Articles of Association and Yes
the resolution of shareholders’ meeting
Whether the distribution standard and proportion is clear and definite Yes
Whether the relevant decision process and mechanism is complete Yes
Whether the independent directors perform their responsibilities and play the roles Yes
Whether the small and middle shareholders have the chance to express their opinions and appeals as Yes
well as their lawful right and interest is in an enough protection
Whether it is legal and transparent for the condition and process while adjusting and amending the Yes
cash dividends policy
During the report period the Company earned profit the profit of the parent company that could be
distributed to shareholders was positive but without proposing cash dividend distribution
preliminary scheme.□Available □Not available
The Company’s preliminary scheme of profit distribution and preliminary scheme of increasing
equity with capital reserve for the report period
□Available □Not available
Number of sending bonus shares per ten shares (share) 0
Number of dividend payout per ten shares (CNY) (including tax) 4.50
The cardinal number of the capital stocks for the preliminary distribution scheme (share) 685464000
Total cash dividend distribution（CNY）(including tax) 308458800
Amount of cash dividends (eg. shares buy-back)（CNY）in other ways 0
Total cash dividend distribution（CNY）(including other ways) 308458800
Attributable profit（CNY） 500126606
51Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
The proportion of cash dividend distribution in the total profit distribution (including other ways) 100
Cash dividend distribution this time
If the Company’s development is in growth stage and major capital expenditure is arranged while making profit distribution
the proportion of cash dividends should takes up no less than 20% in this profit distribution.Detailed explanation for the preliminary scheme of profit distribution or increasing equity with capital reserve
According to the audit result from KMPG Huazhen LLP the net profit belonging to the parent company’s shareholders in the
consolidated statement in 2021 is CNY500102606 and the net profit of the parent company in financial statement in 2021 is
CNY855053982. According to PRC accounting standard the situation for attributable profits of the consolidation and the
parent company at the end of 2021 as following:
Unit: CNY
Consolidation Parent company
Year-end undistributed profit 8929426600 9141561665
Among which: Total comprehensive income in 2021 500102606 855053982
Undistributed profit carried forward from beginning of the year 8703509594 8560693283
Dividends distribution of 2020 274185600 274185600
Legal earned surplus reserve to be drawn 0 0According to regulation of 157th item in the Articles of Association which is that “the Company can distribute dividends eitherin cash or by stock the profit to be distributed each year is not less than 25% of the distributable profit realized in the same
year and the accumulated sum of profit to be distributed in cash in the last three years is not less than 30% of the yearlyaverage distributable profit to be realized in the last three years”. Meanwhile considering the large amount on the capital
expenditure in 2022 under the condition of not influencing the normal production and operation the Company put forward
preliminary scheme on profit distribution in 2021 as following:
Because the left amount of legal earned surplus reserve reaches 50% of registered capital while making profit distribution the
legal earned surplus reserve will not be drawn. Based on the Company’s 685464000 shares at total up to December 31st
2021 the Company plans to pay CNY4.5 in cash as dividends for every ten share (including tax) to the Company’s all
shareholders totaling up to CNY308458800. The retained and undistributed net profit will be reserved for distribution in the
next year.The cash dividend distributed to shareholders of domestic listed foreign shares (B share) is paid in HKD converted based on
the middle rate between CNY and HKD issued by the People’s Bank of China on the first working day after the resolution
date of 2021 shareholders’ meeting.
11. Implementation of the Company’s equity inventive plan employee stock ownership plan or
other employee incentive measures
□Available □Not available
There are no implementation of the Company’s equity inventive plan employee stock ownership plan
and other employee incentive measures during the report period.
12. Construction and implementation of internal control system during the reporting period
(1) Construction and implementation of internal control
For the construction and implementation of the company’s internal control please refer to the 2021
Annual Self-Assessment Report on Internal Control disclosed in Securities Times China Securities
Journal and www.cninfo.com.cn on April 27 2022.
52Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
(2) Specific situations for significant defects of the internal control found during the report period
□Yes □No
13. The company’s management and control over subsidiaries during the reporting period
Company name Integration plan Integration progress Problems encountered in integration Actions taken Resolve progress Follow-up resolution plan
None None None None None None None
14. Internal control self-assessment report or internal control audit report
（1）Internal control self-assessment report
Disclosure date for full text of the internal control self-assessment report 2022.04.27
Disclosure index for full text of the internal control self-assessment report 2021 Annual Self-Assessment Report on Internal Control disclosed on Securities TimesChina Securities Journal and
www.cninfo.com.cn by the Company on April 27 2022
Percentage of total unit assets included in scope of the assessment accounting for the
85.13%
Company’s total assets of consolidated financial statements
Percentage of unit operating income included in scope of the assessment accounting
92.54%
for the Company’s operating income of consolidated financial statements
Standards of Defect Identification
Category Financial report Non-financial report
Significant defects: one defect of internal control individually or together with Significant defects: Any situations listed below appears it can be
other defects has the reasonable probability to cause the significant misstatements regarded as significant defects. ? Operation: Unable to achieve all
which cannot be promptly prevented or found and corrected timely in the financial operation target or key business index widely out of budget in
Qualitative criteria report. For example: ? Company’s Directors Supervisors and Senior Management various aspects. ? Safety accident effects: Cause no less than one
have fraudulent practices; ? The Company makes corrections for the published person death or more than 3 person serious injuries. ? Major
financial report; ? The audit of external intermediary agent finds significant negative effects: Negative information frequently appears in the
misstatement existing in the current financial report but the Company does not medias with involving a wide scope in the international and national
53Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
realize it during the operation process; ? Negative information frequently appears mainstream media. ? Environment effects: Create irreparable
in the medias with involving a wide scope; ? The Company’s audit committee and damages to environment and cause massive public complains.internal audit department makes an inefficient supervision for internal control; ? Major defects: Any situations listed below appears it can be
Other situations maybe cause significant misdirection which guides the report users regarded as major defects. ?Operation: Unable to achieve partly
to make the right judgment. operation target a big margin out of budget in various aspects. ?
Major defects：The defect of internal control individually or together with other Safety accident effects: Without reaching the person loss or the
defects has the reasonable probability to cause the significant misstatements which number of serious injury of significant defects. ? Major negative
cannot be promptly prevented or found and corrected timely in the financial report effects: Negative news appears in the media with influencing a wide
although the misstatements neither achieves nor exceeds the importance level but scope in the provincial mainstream media. ? Environment effects:
still arising the attention of Board of Directors and management team. ? Failure to Cause heavy environment damages and massive public complains
select and apply accounting regulations in accordance with generally accepted ought to carry out the significant remedial measures.accounting principles; ? Failure to establish the anti-fraud procedures and control General defects: Any situations listed below appears it can be
measures; ? Failure to set up corresponding control mechanism or to carry out and regarded as general defects. ?Operation: Other effects unable to
take corresponding compensating control for the accounting treatments with constitute the significant defects or major defects. ? Safety accident
irregular and special deal; ? Negative news appears in the media with influencing a effects: Personal injury less than the quantitative standards of major
wide scope; ? One or more defects exist in the control during the process of the defects. ? Major negative effects: Other defects unable to constitute
ending financial report and the target of achieving truthfulness and integrality the significant defects or major defects. ? Environment effects:
cannot be reasonably guaranteed in the financial report; ? General defects refer to Other environment effects unable to constitute the significant defects
the other control defects which do not constitute the significant and major defects. or major defects.For total assets/Owner’s equity: For direct property loss:
? Significant defects: misstatements ≧1% or ? Significant defects: More than CNY10million
?Major defects: 0.5%≦misstatements<1% or ?Major defects: CNY1million-CNY10million (including
? General defects: misstatements<0.5% CNY1million)
For operation revenue: ? General defects: Less than CNY1million
Quantitative criterion
? significant defects: misstatements ≧1% or
?Major defects: 0.5%≦misstatements<1% or
? General defects: misstatements<0.5%
For pretax profit:
? Significant defects: misstatements≧5%or
54Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
?Major defects: 2%≦misstatements<5%or
? General defects: misstatements<2%
Number of major defect in financial report 0
Number of major defect in non-financial report 0
Number of significant defect in financial report 0
Number of significant defect in non-financial report 0
(2) Internal control audit report
□Available □Not available
Audit opinions of the internal control audit report
We believe that the company maintained effective internal control over financial reporting in all material aspects in accordance with the Basic Norms for Corporate Internal Control and related regulations on
December 31st 2021.Disclosure of the internal control audit report Disclosure
Disclosure date for the full text of the internal control audit report 2022.04.27
2021 Annual Self-Assessment Report on Internal Control disclosed on Securities Times China Securities Journal and www.cninfo.com.cn by the
Disclosure index for the full text of the internal control audit report
Company on April 27 2022.Opinion type of the internal control audit report Standard without reserved opinion
Whether or not exists significant defects in non-financial reports No
Whether or not the accounting firm issued non-standard opinions for the audit report of internal control
□Yes □No
Whether the audit report of internal control issued by the accounting firm is in consistency with the self-assessment report of the board of
directors
□Yes □No
15. Self-inspection and rectification of problems in the special action on governance of listed company
No.
55Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
V. Environmental and Social Responsibility
1. Major Environmental issues
Whether the listed company and its subsidiaries belong to major polluters published by the environmental protection department
□Yes □No
Name of major Quantity Total Condition
Name of Distribution Total
pollutants and Mode of of Discharge Implemented approved of
company or situation of volume of
particular discharge discharg concentration pollution discharge standard volume of excessive
subsidiary discharge outlet discharge
pollutants e outlet discharge discharge
Emission Standard for Air Pollutants
Discharge Confirmed in line of Boiler (GB13271-2014) Emission
Organized outlet of with national Standard for Odor Pollutants
Liaoning exhaust gas boiler standard Graphical (GB14554-93) 4a in Class 2 of
Changyu Meeting theinorganized chimney and Signs for Emission Standard for Environmental
2 national 35m3/d 120m3/d No
Icewine Chateau exhaust gas discharge Environmental Noise at the Boundary of Industrial
standards
Co. Ltd. waster water outlet of Protection Enterprises (GB12348-2008)
noise factory (GB15562.1-1995) Comprehensive Wastewater Discharge
waste water (GB15562.2-1995) Standard of Liaoning Province
(DB21/1627-2008)
56Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Construction and operation of pollution prevention facilities
The exhaust gas SO2 and NOX produced by this company's boiler are discharged through ceramic
tube dust removers and bag dust removers. A wastewater treatment station has been constructed.The wastewater treatment process adopts the treatment process of hydrolys is aerobiont. Production
wastewater and domestic sewage are treated by the in-plant wastewater treatment station and then
discharged into the waste water treatment plant in Beidianzixiang Town.Environmental impact assessment of construction projects and other environmental protection
administrative permits
It has been approved in the Huanhuanjianzi (2016) No.24 issued by the Environmental Protection
Bureau of Huanren Manchu Autonomous County.Emergency plan for emergent environmental incident
The Company has formulated a comprehensive emergency plan for emergent environmental
incident.Environmental self-monitoring program
The Company has formulated a complete environmental self-monitoring program.Administrative penalties for environmental issues during the reporting period
Company or Reason for Penalty The impact on the production The company’ssubsidiary penalty Violation result and operation of listed rectificationname companies measures
None None None None None None
Other environmental information that should be made public
No
Measures taken to reduce carbon emissions and their effects during the reporting period
□Available □Not available
Other related environmental information
No
2. Social responsibility performance
Please refer to 2021 Annual Social Responsibility Report disclosed on Securities Times China
Securities Newspaper and www.cninfo.com.cn by the Company.
3. Consolidate and expand the achievements of poverty alleviation and rural revitalization
The Company actively responds to the call of the state served the rural revitalization well adopted
the mode of “company + farmer” or “company + cooperative + farmer” reformed the sloping fields
of Jiaodong Peninsular and the northwestern area including Ningxia and Xinjiang and so on the
uncultivated land or the barren land into graperies. By means of providing capital and technology of
57Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
viticulture to fruit growers scientific management level of vineyard had been improved. The
Company spared no effort to popularize the non-pollution and mechanized planting methods
continuously improved production efficiency of grape base and quality of grape and reduced
production cost of grape and labor intensity. Through the above measures on the one hand it
promotes the effective use of land resources and improve the local ecological environment; on the
other hand it brings about CNY800million of economic income to fruit farmers across the country
every year and practically helps rural revitalization and common prosperity.The Company conducted point-to-point anti-poverty project to Huangchengyang Village in Shiliang
Longkou and purchased agricultural products worth more than CNY570thousand to help solve the
problem of slow sales; through the charity foundation donated CNY300thousand in cash to
Wushan in Chongqing for poverty alleviation.
58Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
VI. Major issues
1. Implementation of commitments
(1) Commitments that the Company’s actual controllers shareholders related parties acquirers and the Company and other related
commitment parties have implemented during the report period and have not implemented up to the end of the report period
□Available □Not available
Commitment Commitment Commitment Commitment
Commitments Commitment content Implementation
party type time period
Commitments at share reform
Commitments made in
acquisition report or equity
changes report
Commitments at asset
restructuring
Solve
Yantai Changyu
horizontal Non-horizontal competition 1997.05.18 Forever Has been performing
Group Co. Ltd.competition
59Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
According to Trademark License Contract the trademark
According to Trademark License Contract the trademark
use fee annually paid by the Company to Changyu Group
royalty of Changyu and other trademarks paid by the
1997.05.18 shall be mainly used by Changyu Group to publicize
Company to Yantai Changyu Group Co. Ltd. every year is
Commitments at the initial 1997.05.18 - trademarks including Changyu and contract products.mainly used for advertising
public offering or refinancing 2019.04.04 Except 2013 to 2017 during which the commitment was
Changyu and other trademarks and this contract products by
not strictly performed Yantai Changyu Group Co. Ltd.Yantai Changyu Clear the use Yantai Changyu Group Co. Ltd.has been performing its commitment.Group Co.Ltd. of trademark
royalty
Equity incentive
commitments
The CNY231768615 that was not used for publicity of
trademarks and contract products as promised will be offset
Commitments at middle and Compensating 2019.04.04
Yantai Changyu by the four-year trademark use fee from 2019 to 2022. If
small shareholders of the unredeemed 2019.04.04 - Has been performing
Group Co.Ltd. insufficient the shortfall would be filled in one time in 2023.Company commitment 2023.12.31
If there is any excess the excess portion of the trademark use
fee would be collected from the year with excess occurrence.Commitment under timely
Yes
implementation or not
According to the Trademark License Contract (hereafter referred to as “the Contract”) Changyu Group promises that the trademark use fee annually paid by the Company to Changyu
Whether or not to have
Group shall be mainly used by Changyu Group to publicize trademarks and contract products. But above-mentioned ‘mainly’ is not a specific number which is easy to cause divergence
specific reasons of the
due to different understanding and leads to problem appearance during the implementation process.unimplemented commitment
From 2013 to 2017 Changyu Group collected a total of CNY420883902 trademark use fee of which 51% was used to publicize trademarks including Changyu and contract products with
and next steps
amount of CNY214650790. The amount has been used to publicize trademarks including Changyu and contract products is CNY50025181 with a balance of CNY164625609. In 2018
60Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
and 2019 the trademark use fee collected of 2017 and 2018 is CNY155623907 of which 51% is used to publicize trademarks including Changyu and contract products with amount of
CNY79368193. The amount has been used to publicize trademarks including Changyu and contract products is CNY12225187 with a balance of CNY67143006. From 2013 to 2018
the accumulated balance of Changyu Group using to publicize trademarks including Changyu and contract products is CNY231768615. Changyu Group promises that the four-year
trademark use fee from 2019 to 2022 will be used for offset. If insufficient the shortfall would be filled in one time in 2023. If there is any excess the excess portion of the trademark use
fee would be collected from the year with excess occurrence.If Changyu Group is not able to implement the above-mentioned commitment owing to various reasons the Company will timely supervise and urge Changyu Group to fulfill its
commitment and request Changyu Group to raise funds through bank loaning assets sales and equity sales etc. in order to implement the commitment.For detailed information please refer to Announcement on Commitment Issues of Yantai Changyu Group Co. Ltd. disclosed on April 4th 2019.
(2) The Company should make a statement on the achieved original profit forecast of assets or projects and its reason if there is profit forecast
of Company’s assets or projects and the report period is still in the profit forecast period
□Available □Not available
2. Non-operating capital occupying of listed company by controlling shareholder and its related parties
□Available □Not available
There are no non-operating capitals occupying of listed company by controlling shareholder and its related parties during the report period.
3. Illegal external guarantee
□Available □Not available
There is no illegal guarantee situation during the report period.
4. Explanation of board of directors on the latest Non-standard Audit Report
□Available □Not available
5. Explanation of Non-standard Audit Report given by accounting firm in the report period from board of directors board of supervisors
and independent directors (if have)
□Available □Not available
61Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
6. Compared with the last year’s financial report explanation of the changes in accounting
policy accounting estimation or correction of significant accounting errors
□Available □Not available
There is no changes of accounting policy accounting estimation or correction of significant
accounting errors during the report period.
7. Compared with the last year’s financial report explanation for the changes of the
consolidated statements scope
□Available □Not available
For details of the the changes of the consolidated statements scope this year please refer to Note 6:
“Change in consolidation scope” to the financial report of this report .
8. The appointment and dismissal of certified public accountants
Currently appointed accounting firm
Domestic accounting firm name KPMG Hua Zhen LLP
Remuneration for domestic accounting firm (CNY‘0000) 205
Consecutive period for the audit service of domestic accounting firm 3
Name of certified public accountant for the audit service of domestic accounting firm Ms. Wang Ting Ms. Xu Weiran
Consecutive period for the certified public accountant’s audit service of domestic
3
accounting firm
Overseas accounting firm name (if have) —
Remuneration for overseas accounting firm (CNY‘0000) (if have) 0
Consecutive period for the audit service of overseas accounting firm (if have) —
Name of certified public accountant for the audit service of overseas accounting firm
—
(if have)
Consecutive period for the certified public accountant’s audit service of overseas
—
accounting firm (if have)
Whether or not to employ a new accounting firm during the report period
□Yes □No
To employ internal control audit accounting firms financial adviser or sponsor.□Available □Not available
This year KPMG Huazhen LLP was hired as the internal control audit institution. The audit fee was not
determined separately but was CNY2.05million together with the financial report audit fee.
9. Face of suspension and termination of listing after the disclosure of annual report
□Available □Not available
10. Bankruptcy reorganization
□Available □Not available
There is no bankruptcy reorganization during the report period.
62Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
11. Material litigation and arbitration
□Available □Not available
There are no material litigation and arbitration during the report period.
12. Penalty and rectification
□Available □Not available
There are no penalty and rectification during the report period
13. Credit of the Company holding shareholders and actual controllers
□Available □Not available
14. Significant related transactions
(1) Related transactions in relation to daily operations
□Available □Not available
63Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Proportion Whether
Approved Available
accounting exceed
Related Pricing Amount transaction Clearing market price Disclosure Disclosure
Relationship Type Content Price for amount approved
party principle (CNY‘0000) quota form of similar date index
of similar transaction
(CNY‘0000) transactions
transactions quota
Announcem
ent on 2021
Annual
Routine
Purchase Related
Yantai Controlled Purchase and Transaction
Shenma by the same and commission Agreement Determined April 28th disclosed in
8076 14.20% 10200 No Cash No
Packaging parent commission processing pricing by agreement 2021 China
Co. Ltd. company processing packaging Securities
materials JournalSec
uritiesTimes
and
CNINFO in
2021
Total -- -- 8076 -- 10200 -- -- -- -- --
Details of the return of large sales No
Actual performance of the estimated total amount for
daily operations related transactions by category that will No
occur during this period. (if have)
Reason for the deference between transaction price and Not available
market reference price(if available)
64Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
(2) Related transactions in relation to acquisition and sales of assets or equity
□Available □Not available
There is no related transactions in relation to acquisition or sales of assets or equity during the report
period.
(3) Related transactions in relation to common foreign investment
□Available □Not available
There is no related transactions in relation to common foreign investment during the report period.
(4) Related current credit and debt transactions
□Available □Not available
Whether or not existing non-operating related credit and debt transactions
□Yes □No
There is no non-operating related credit and debt transactions during the report period.
(5) Transactions with related financial companies
□Available □Not available
There is no deposit loan credit or other financial business between the Company and related financial
companies and related parties.
(6) Transactions between the related parties and financial companies controlled by the Company
□Available □Not available
There is no deposit loan credit or other financial business between the related parties and the financial
companies controlled by the Company.
(7) Other major related transactions
□Available □Not availableFor other major related transactions please refer to the Section X “ Related Parties and RelatedTransaction” of the Financial Report of this report.Disclosure website of interim report for major related transaction
Name of interim announcement Disclosure date of interim Name of disclosure website forannouncement interim announcement
None None
15. Major and important contracts and execution results
(1) Trusteeship contract and leasehold issues
? Trusteeship situation
□Available □Not available
65Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
There is no trusteeship situation during the report period
? Contract situation
□Available □Not available
There is no contract situation during the report period.? Leasehold situation
□Available □Not available
There is no leasehold situation during the report period.
(2) Major guarantee
□Available □Not available
Unit: CNY’0000
External guarantee of the Company and its subsidiaries（excluding guarantee to subsidiaries）
Disclosure date of
Actual date of Whether or not Whether or not belong
related Guarantee Actual guarantee Guarantee Collateral Counterguarantee Guarantee
Guarantee object name occurrence (date of complete to related-party
announcement about quota amount type (if have) situation (if have) Period
agreement) implementation guarantee
guarantee quota
Yantai Economic and Joint liability
Technological Development 2016.12.22 34160 2016.12.21 34160 assurance; - - 10 years No No
Zone Management Council. Mortgage
Total of the external guarantee quota approved Total of the actual external guarantee amount during the
00
during the report period (A1) report period (A2)
Total of the external guarantee quota approved by Balance of the actual external guarantee by the end of the
3416034160
the end of the report period (A3) report period (A4)
66Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Guarantee situations between the Company and subsidiaries
Disclosure date of
Whether or not Whether or not belong
related Guarantee Actual date of Actual guarantee Guarantee Counterguarantee Guarantee
Guarantee object name Collateral complete to related-party
announcement about quota occurrence amount type situation Period
implementation guarantee
guarantee quota
Yantai Changyu Wine Joint liability
Research and Development 2016.12.22 72176 2016.12.21 72176 assurance; - - 10 years No Yes
Company Limited Mortgage
Joint liability
Kilikanoon Estate Pty Ltd 2018.12.05 8528 2018.12.13 7518 - - 5 year No Yes
assurance
Total of the guarantee quota approved to Total of the actual guarantee amount for subsidiaries during
00
subsidiaries during the report period (B1) the report period (B2)
Total of the guarantee quota approved to Balance of the actual guarantee for subsidiaries by the end
8070479694
subsidiaries by the end of the report period (B3) of the report period (B4)
Guarantee situations between subsidiaries
Disclosure date of
Whether or not Whether or not belong
related Guarantee Actual date of Actual guarantee Guarantee Counterguarantee Guarantee
Guarantee object name Collateral complete to related-party
announcement about quota occurrence amount type situation Period
implementation guarantee
guarantee quota
-----------
Total of the guarantee quota approved to Total of the actual guarantee amount for subsidiaries during
00
subsidiaries during the report period (C1) the report period (C2)
Total of the guarantee quota approved to Balance of the actual guarantee for subsidiaries by the end
00
subsidiaries by the end of the report period (C3) of the report period (C4)
Total guarantee amount of the Company（Total of above three major items）
67Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Total of the approved guarantee quota during the Total of the actual guarantee amount during the report
00
report period（A1+B1+C1） period（A2+B2+C2）
Total of the approved guarantee quota by the end Balance of the actual guarantee by the end of the report
114864113854
of the report period（A3+B3+C3） period（A4+B4+C4）
The proportion of actual total guarantee amount (A4+B4+C4) accounting for the Company’s net asset 10.90%
Among :
The amount of guarantee for shareholders actual controllers and their related parties（D） 0
The amount of debt guarantee for the guaranteed objects whose asset-liability ratio is more than 70%
0
directly or indirectly（E）
Total amount of guarantee of the part that exceeds 50% of net assets（F） 0
Total amount of the above-mentioned three items（D+E+F） 0
Explanation for undue guarantees that have happened warranty liability or may take joint payback
No
liabilities during the report period (if have)
Explanation for violating due process to provide external guarantee (if have) No
Description of the specific situation of using compound guarantee
No.
68Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
(3) Entrusting others to manage cash assets
? Financial management entrustment
□Available □Not available
There is no financial management entrustment during the report period.? Loan entrustment
□Available □Not available
There is no loan entrustment during the report period.
(4) Other important contracts
□Available □Not available
There are no other important contracts during the report period.
16. Other Major issues
□Available □Not available
There are no other major issues need to be explained during the report period.
17. Major issues of Company’s subsidiaries
□Available □Not available
69Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
VII. Changes in Shares and the Shareholders’ Situation
1. Changes in shares
(1) Changes in shares
Unit: share
Amount before this change Change (+ -) Amount after this change
Transfer other capital to share
Amount Percentage % Allot new share Distribute bonus share Others Subtotal Amount Percentage %
capital
I. Shares with trading limited condition
1. State-owned holdings
2. State-owned legal person holdings
3. Other domestic holdings
Among which: domestic legal person
domestic natural person
4. Foreign-owned holdings
Among which: foreign legal person
foreign natural person
II. Shares without trading limited condition 685464000 100% 685464000 100%
1. A shares 453460800 66.15% 453460800 66.15%
70Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
2. B shares 232003200 33.85% 232003200 33.85%
3. Oversea listed foreign shares
4. Others
III. Total shares 685464000 100% 685464000 100%
Cause of share change
□Available □Not available
Approval of share change
□Available □Not available
Transfer ownership of changed shares
□Available □Not available
The influence of share change on the financial indicators such as basic earnings per share diluted earnings per share of the latest year and the latest
period net asset per share belonging to the Company’s common shareholders etc..□Available □Not available
Other contents the Company thinks necessary or securities regulatory departments ask to make public.□Available □Not available
(2) Changes in restricted shares
□Available □Not available
2. Securities issuance and listing situation
(1) Securities issuance (exclude preferred share) during report period
71Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
□Available □Not available
(2) Explanation of change in Company’s total shares and shareholding structure and change in Company’s assets and liability structure
□Available □Not available
(3) Current internal employee shares
□Available □Not available
3. Situation for shareholders and the actual controllers
(1) The number of shareholders of the Company and the shareholdings
Unit：share
Total number of preferred shareholder
Total number of shareholders by Total number of preferred shareholder
Total shareholders in the recovering voting power by the end of
51552 the end of last month before the 50528 recovering voting power by the end of 0 0
report period last month before the disclosure day of
disclosure day of the annual report report period (if have) (see note 8)
the annual report (if have) (see note 8)
Shareholders holding more than 5% or the top 10 shareholders holding situation
Shares held until Number of Number of Pledged or frozen
Percentage Changes during
Name of Shareholders Character of shareholders the end of the restricted unrestricted
(%) the report period Share status Amount
report period shares shares
Domestic non-state legal
YANTAI CHANGYU GROUP CO. LTD. 50.40% 345473856 0 0 345473856 - -
person
GAOLING FUND L.P. Foreign legal person 3.08% 21090219 0 0 21090219 - -
BBH BOS S/A FIDELITY FD - CHINA FOCUS
Foreign legal person 1.33% 9140216 -5135489 0 9140216 - -
FD
SHENWAN HONGYUAN Foreign legal person 1.08% 7413952 -817781 0 7413952 - -
72Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
SECURITIES(HONGKONG) LIMITED
FIDELITY PURITAN TRUST: FIDELITY
Foreign legal person 0.93% 6350762 0 0 6350762 - -
SERIES INTRINSIC OPPORTUNITIES FUND
Haitong International Securities Company
Foreign legal person 0.74% 5060702 -421243 0 5060702 - -
Limited-Account Client
GUOTAI JUNAN SECURITIES (HONGKONG)
Foreign legal person 0.73% 5011871 -470074 0 5011871 - -
LIMITED
Fengdi JIANG Domestic natural person 0.71% 4854000 4369300 0 4854000 - -
China Merchants Futures (Hong Kong) Co.Foreign legal person 0.67% 4589660 1380939 0 4589660 - -
Limited
VANGUARD EMERGING MARKETS STOCK
Foreign legal person 0.61% 4170863 362414 0 4170863 - -
INDEX FUND
Strategic investors or legal result of the placement of new shares to become a
No
top 10 shareholders
Among the top 10 shareholders Yantai Changyu Group Company Limited has no associated relationship or accordant
The explanation for the associated relationship and accordant action
action relationship with the other 9 listed shareholders while the relationship among the other shareholders is unknown.Explanation of the above-mentioned shareholders’ entrustment/ fiduciary
No
voting rights and waiver of the voting rights
Special explanation for the existence of a special repurchase account among the
No
top 10 shareholders
The top 10 shareholders with shares without trading limited condition
Type of share
Name of Shareholders Number of shares without trading limited condition held until the end of the year
Type of share Amount
YANTAI CHANGYU GROUP CO. LTD. 345473856 A 345473856
GAOLING FUND L.P. 21090219 B 21090219
BBH BOS S/A FIDELITY FD - CHINA FOCUS FD 9140216 B 9140216
SHENWAN HONGYUAN SECURITIES(HONGKONG) LIMITED 7413952 B 7413952
73Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
FIDELITY PURITAN TRUST: FIDELITY SERIES INTRINSIC
6350762 B 6350762
OPPORTUNITIES FUND
Haitong International Securities Company Limited-Account Client 5060702 B 5060702
GUOTAI JUNAN SECURITIES (HONGKONG) LIMITED 5011871 B 5011871
Fengdi JIANG 4854000 A 4854000
China Merchants Futures (Hong Kong) Co. Limited 4589660 B 4589660
VANGUARD EMERGING MARKETS STOCK INDEX FUND 4170863 B 4170863
The explanation for the associated relationship and accordant action of the top
10 shareholders with unrestricted shares the the associated relationship and Among the top 10 shareholders Yantai Changyu Group Company Limited has no associated relationship or accordant action
accordant action between the top 10 shareholders with unrestricted shares and relationship with the other 9 listed shareholders and the relationship among the other shareholders is unknown.the top 10 shareholders
Explanation for the top 10 shareholders who involved in financing activities
The top 10 shareholders do not involve in financing activities and stock trade business.and stock trading business (if have)(see note 4)
Whether or not the Company’s top 10 common shareholders and shareholders with shares without trading limited condition take agreed repurchase
trading during the report period
□Yes □No
There is no agreed repurchase trading taken by the Company’s top 10 common shareholders and shareholders with shares without trading limited
condition during the report period.
（2）Situation for the controlling shareholders of the Company
Property of holding shareholders: Property of holding main body undefined
Type of holding shareholders: Legal representative
Name of controlling shareholder Legal representative Establishment date Organization code Main business
Yantai Changyu Group Co. Ltd. Zhou Hongjiang 1997.04.27 913706002656458244 Production of wine healthy liquor distilled liquor and
74Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
beverages( only produced by subsidiaries shareholding companies
and branches) sales of the above-mentioned products cultivation
of agricultural products and export business under the scope of
permission.Equity situation for the other domestic listed companies controlled
No.or shared by the controlling shareholders during the report period
Changes in the controlling shareholder during the report period
□Available □Not available
There are no changes in the controlling shareholder during the report period.
(3) Situation for the actual controllers of the Company an its persons acting in concert
Property of actual controllers: domestic other institutions; foreign other institutions
Type of actual controllers: Legal representative
Name of actual controllers Legal representative Establishment date Organization code Main business
Under state permission property investment tenancy of machine and facility wholesale and retail of
Yantai Yuhua Investment &
Jiang Hua 2004.10.28 76779294-7 construction material chemical products (chemical hazard products excluded) hardware and electronical
Development Co. Ltd.products grape plantation.Directly or indirectly conduct the production and distribution of food products (alcoholic products included) as
ALDINO
ILLVA Saronno Holding S.p.a. 1984.07.25 － well as industrial commercial financial and service activities of any other kinds through joint-stock
MARZORATI
companies and organizations.International Finance Corporation is one of the members of World Bank mainly dedicated to investment in
private sectors of developing countries while providing technical support and consultation service. The
Philippe LE
International Finance Corporation 1956.07.25 － corporation is a multilateral financial institution that ranks first in the world in terms of providing capital stock
HOUEROU
and loans to developing countries. Its purpose is to promote sustainable investments of private sectors of
developing countries in order to alleviate poverty and improve people’s life.
75Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Operating management of state-owned property right (stock right) authorized by State-owned Assets
Supervision and Administration Commission of Yantai Municipal Government; Financing investment and
operating management of government projects such as strategic investment and industrial investment and so
on; Capital operation (including acquisition reintegration and transfer etc) of state-owned property right and
state-owned stock right within the scope of authorization; Venture capital investment business; Agency of
venture capital investment business of other venture investment enterprises or individuals; Participation in the
Yantai Guofeng Investment establishment of venture capital investment enterprises and venture capital investment management consultant
Rong Feng 2009.02.12 00426068-6
Holdings Group Co. Ltd. institutions; Investment and financing service and consulting business; Investment and financing consultant
business; Other business authorized by State-owned Assets Supervision and Administration Commission of
Yantai Municipal Government; wholesale and retail of non-ferrous metal mineral products gold (spot good)
silver (spot good) chemical products (excluding dangerous goods) battery materials (excluding dangerous
chemicals); import and export of goods and technologies. (The business scope does not include national
pre-approval projects and projects restricted by national industrial policies; projects that are subject to approval
according to law can only carry out business activities after approval by relevant departments).Yantai Yuhua Investment & Development Co. Ltd. did not control the equity of other domestic and foreign listed companies except the Company
Equity situation for the other domestic listed companies
during the reporting period; It is not clear that other actual controllers control the equity of other domestic and foreign listed companies other than the
controlled by the actual controller during the report period
Company during the reporting period.Changes of the actual controllers during the report period
□Available □Not available
There are no changes in actual controllers during the report period.
76Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Introduction for property right and control relations between the Company and its actual controllers
Actual controller controls the Company through a trust or other asset management ways
□Available □Not available
77Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
(4) The company’s controlling shareholder or the largest shareholder and its concerted action
person’s cumulative pledged shares account for 80% of the company’s shares held by them
□Available □Not available
(5) Other institutional shareholders holding more than 10% shares
□Available □Not available
(6) Shares reduction situations of holding shareholders actual controllers restructuring side
and other commitment subjects
□Available □Not available
4. The specific implementation of share repurchase during the reporting period
Implementation progress of share repurchase
□Available □Not available
Implementation progress of reducing share repurchased by centralized bidding
□Available □Not available
78Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
VIII. Related Situation of Preferred Shares
□Available □Not available
There are no preferred shares during the report period.IX. Related Situation of Bonds
□Available □Not available
X. Financial Report
1. Audit Report
Type of audit opinion Standard unqualified audit opinion
Date signed on audit report April 25 2022
Audit agency name KPMG HuazhenCertified Public AccountantsCo. Ltd. (special general partnership)
Audit report No. KPMG Huazhen ShenZi No. 2205034
Certified public accountant’s name Ms. Wang Ting Ms. Xu Weiran
79Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
AUDITOR’S REPORT
KPMG Huazhen Shen Zi No. 2205034
All Shareholders of Yantai Changyu Pioneer Wine Company Limited:
Opinion
We have audited the accompanying financial statements of Yantai Changyu Pioneer Wine
Company Limited (“Yantai Changyu”) which comprise the consolidated balance sheet and
company balance sheet as at 31 December 2021 the consolidated income statement and
company income statement the consolidated cash flow statement and company cash flow
statement the consolidated statement of changes in shareholders’ equity and company
statement of changes in shareholders’ equity for the year then ended and notes to the
financial statements.In our opinion the accompanying financial statements present fairly in all material respects
the consolidated financial position and company financial position of Yantai Changyu as at 31
December 2021 and of its consolidated financial performance and company financial
performance and its consolidated cash flows and company cash flows for the year then ended
in accordance with Accounting Standards for Business Enterprises issued by the Ministry of
Finance of the People’s Republic of China.Basis for Opinion
We conducted our audit in accordance with China Standards on Auditing for Certified Public
Accountants (“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 Yantai Changyu in accordance with the China Code of Ethics for
Certified Public Accountants (“the Code”) and we have fulfilled our other ethical
responsibilities in accordance with the Code. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
80Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
AUDITOR’S REPORT (continued)
KPMG Huazhen Shen Zi No. 2205034
Key Audit Matters
Key audit matters are those matters that in our professional judgement were of most
significance in our audit of the financial statements for the year. These matters were
addressed in the context of our audit of the financial statements as a whole and in forming
our opinion thereon and we do not provide a separate opinion on these matters.Recognition of Sales Revenue from DistributorsRefer to the accounting policies set out in the notes to the financial statements “III.Significant accounting policies and accounting estimates” 22 and “V. Notes to theconsolidated financial statements” 37.Key Audit Matters How the Matter was Addressed in OurAudit
The principal activities of Yantai Changyu and Our audit procedures to evaluate revenue
its subsidiaries (hereinafter referred to as recognition of sales revenue from
“Yantai Changyu Group”) include manufacture distributors included the following:
and sales of wine brandy and sparkling wine.Understand and evaluate the
The revenue of Yantai Changyu Group is mainly Management’s design and operation
derived from sales of distributors. All effectiveness of key internal controls
distributor transaction terms adopt the unified related to distributor sales revenue
transaction terms formulated by Yantai recognition;
Changyu Group.Selecting the sales contracts Yantai
Based on the contractual agreement and the Changyu signed with distributors in
business arrangement Yantai Changyu sells order to examine whether Yantai
products to distributors and the transfer of Changyu has adopted the unified
product ownership is completed and the transaction terms and evaluate
revenue is recognised when the goods are whether the accounting policy of
delivered to distributors and signed for revenue recognition meets the
acceptance. requirements of the Accounting
Standards for Business Enterprises;
As revenue is one of the key performance
indicators of Yantai Changyu Group there is a On a sampling basis reconcile the
risk that management may recognise revenue revenue recorded for the year to
earlier or later in order to meet specific
performance targets or expectations therefore relevant supporting files such asrelevant orders and signed delivery
the risk of cut-off misstatement arising from
distributors’ sales revenue is identified as a key notes etc. to evaluate whetherrevenue is recognised in accordance
audit matter. with the accounting policy of Yantai
Changyu;
81Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
AUDITOR’S REPORT (continued)
KPMG Huazhen Shen Zi No. 2205034
Key Audit Matters (continued)
Recognition of Sales Revenue from Distributors (continued)Refer to the accounting policies set out in the notes to the financial statements “III.Significant accounting policies and accounting estimates” 22 and “V. Notes to theconsolidated financial statements” 37.The Key Audit Matters How the matter was addressed in ouraudit
On a sampling basis reconcile the sales
transaction before and after balance sheet
date to relevant supporting files such as
relevant orders signed delivery notes
etc. to evaluate whether revenue is
recognised in appropriate accounting
period;
Check the sales record after the balance
sheet date to identify significant sales
returns and check relevant supporting
files (If applicable) in order to evaluate
whether relevant revenue is recorded in
the appropriate accounting period;
Select revenue accounting entries that
meet specific risk criteria and check
related supporting documents.
82Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
AUDITOR’S REPORT (continued)
KPMG Huazhen Shen Zi No. 2205034
Other Information
Management of Yantai Changyu is responsible for the other information. The other
information comprises all the information included in the 2021 annual report other than the
financial statements and our auditor’s report thereon.Our opinion on the financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.In connection with our audit of the financial statements our responsibility is to read the other
information and in doing so consider 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.Responsibilities of Management and Those Charged with Governance for the Financial
Statements
Management is responsible for the preparation and fair presentation of the financial
statements in accordance with the Accounting Standards for Business Enterprises and for
the design implementation and maintenance of such internal control necessary to enable that
the financial statements are free from material misstatement whether due to fraud or error.In preparing the financial statements management is responsible for assessing Yantai
Changyu’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 Yantai Changyu or to cease operations or has no realistic alternative but
to do so.Those charged with governance are responsible for overseeing Yantai Changyu’s financial
reporting process.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.
83Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
AUDITOR’S REPORT (continued)
KPMG Huazhen Shen Zi No. 2205034
Auditor’s Responsibilities for the Audit of the Financial Statement (continued)
As part of an audit in accordance with CSAs we exercise professional judgement and
maintain professional scepticism 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 the management.
(4) Conclude on the appropriateness of management’s use of the going concern basis of
accounting and 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 Yantai Changyu’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 Yantai Changyu to cease to continue as a going concern.
(5) Evaluate the overall presentation structure and content of the financial statements
including the disclosures 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 the Group to express our audit 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.
84Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
AUDITOR’S REPORT (continued)
KPMG Huazhen Shen Zi No. 2205034
Auditor’s Responsibilities for the Audit of the Financial Statement (continued)
We communicate with those charged with governance regarding among other matters the
planned scope and timing of the audit and significant audit findings including any significant
deficiencies in internal control that we identify during our audit.We also provide those charged with governance with a statement that we have complied with
relevant ethical requirements regarding independence and 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 year 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.KPMG Huazhen LLP Certified Public Accountants Registered
(Stamp) in the People’s Republic of China
Wang Ting (Engagement Partner)
(Signature and stamp)
Beijing China Xu Weiran
(Signature and stamp)
Date: 25 April 2022
85Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Consolidated balance sheet
as at 31 December 2021
(Expressed in Renminbi Yuan)
Note 31 December 31 December2021 2020
Assets
Current assets
Cash at bank and on hand V.1 1567095993 1194214929
Bills receivable V.2 42827666 -
Accounts receivable V.3 291006410 183853362
Receivables under financing V.4 364457497 338090187
Prepayments V.5 75235879 71296416
Other receivables V.6 30125270 22428956
Inventories V.7 2802622520 2945548651
Other current assets V.8 217152601 234118715
Total current assets 5390523836 4989551216
Non-current assets
Long-term equity investments V.9 46496510 48263507
Investment properties V.10 24502258 27057730
Fixed assets V.11 5687867314 5724935846
Construction in progress V.12 590172099 635495152
Bearer biological assets V.13 193712942 192173536
Right-of-use assets V.14 134569039 -
Intangible assets V.15 617866879 660989065
Goodwill V.16 112374541 132938212
Long-term deferred expenses V.17 284593163 314465855
Deferred tax assets V.18 245210731 206241275
Other non-current assets V.19 144120442 170370147
Total non-current assets 8081485918 8112930325
Total assets 13472009754 13102481541
The notes on pages 105 to 196 form part of these financial statements.
86Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Consolidated balance sheet
as at 31 December 2021 (continued)
(Expressed in Renminbi Yuan)
Note 31 December 31 December2021 2020
Liabilities and shareholders’ equity
Current liabilities
Short-term loans V.20 622066457 689090715
Accounts payable V.21 493453816 484347958
Contract liabilities V.22 147120716 135073280
Employee benefits payable V.23 195019441 188779911
Taxes payable V.24 342322300 213412813
Other payables V.25 453033491 386105526
Other current liabilities V.26 18374193 14820653
Non-current liabilities due within
one year V.27 110865126 133311890
Total current liabilities 2382255540 2244942746
Non-current liabilities
Long-term loans V.28 176047043 200352968
Lease liabilities V.14 101811588 -
Long-term payables V.29 64000000 86000000
Deferred income V.30 41295338 52653609
Deferred tax liabilities V.18 11803970 12022613
Other non-current liabilities V.31 2119671 2078971
Total non-current liabilities 397077610 353108161
Total liabilities 2779333150 2598050907
The notes on pages 105 to 196 form part of these financial statements.
87Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Consolidated balance sheet
as at 31 December 2021 (continued)
(Expressed in Renminbi Yuan)
Note 31 December 31 December2021 2020
Liabilities and shareholders’ equity
(continued)
Shareholders’ equity
Share capital V.32 685464000 685464000
Capital reserve V.33 524968760 524968760
Other comprehensive income V.34 (34707177) 576129
Surplus reserve V.35 342732000 342732000
Retained earnings V.36 8929426600 8714091755
Total equity attributable to shareholders of
the Company 10447884183 10267832644
Non-controlling interests 244792421 236597990
Total owners’ equity 10692676604 10504430634
Total liabilities and shareholders’ equity 13472009754 13102481541
These financial statements were approved by the Board of Directors of the Company on 25
April 2022.Zhou Hongjiang Jiang Jianxun Guo Cuimei (Company stamp)
Legal Representative The person in charge The head of the
of accounting affairs accounting department
(Signature and stamp) (Signature and stamp) (Signature and stamp)
The notes on pages 105 to 196 form part of these financial statements.
88Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Company balance sheet
as at 31 December 2021
(Expressed in Renminbi Yuan)
Note 31 December 31 December2021 2020
Assets
Current assets
Cash at bank and on hand 562588819 267548326
Bills receivable XIV.1 9800000 -
Receivables under financing XIV.2 62411636 13920000
Prepayments 406500 171709
Other receivables XIV.3 398072976 580131798
Inventories 383294208 482442935
Other current assets 20637860 24842325
Total current assets 1437211999 1369057093
Non-current assets
Long-term equity investments XIV.4 7599421494 7599778880
Investment properties 24502258 -
Fixed assets 231284799 270692477
Construction in progress 255996 2865243
Bearer biological assets 114753306 115103753
Right-of-use assets 36826342 -
Intangible assets 78043888 80789731
Deferred tax assets 18033185 18285685
Other non-current assets 2023500000 1530700000
Total non-current assets 10126621268 9618215769
Total assets 11563833267 10987272862
The notes on pages 105 to 196 form part of these financial statements.
89Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Company balance sheet
as at 31 December 2021 (continued)
(Expressed in Renminbi Yuan)
Note 31 December 31 December2021 2020
Liabilities and shareholders’ equity
Current liabilities
Short-term loans 150000000 150000000
Accounts payable 90339903 76470081
Employee benefits payable 66770838 67808910
Taxes payable 32588429 9123959
Other payables 445874937 521505947
Non-current liabilities due within
one year 1485190 -
Total current liabilities 787059297 824908897
Non-current liabilities
Lease liabilities 43312517 -
Deferred income 2268527 5507708
Deferred tax liabilities 88555 -
Other non-current liabilities 1164471 1164471
Total non-current liabilities 46834070 6672179
Total liabilities 833893367 831581076
The notes on pages 105 to 196 form part of these financial statements.
90Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Company balance sheet
as at 31 December 2021 (continued)
(Expressed in Renminbi Yuan)
Note 31 December 31 December2021 2020
Liabilities and shareholders’ equity
(continued)
Shareholders’ equity
Share capital 685464000 685464000
Capital reserve 560182235 560182235
Surplus reserve 342732000 342732000
Retained earnings 9141561665 8567313551
Total owners’ equity 10729939900 10155691786
Total liabilities and shareholders’ equity 11563833267 10987272862
These financial statements were approved by the Board of Directors of the Company on 25
April 2022.Zhou Hongjiang Jiang Jianxun Guo Cuimei (Company stamp)
Legal Representative The person in charge The head of the
of accounting affairs accounting department
(Signature and stamp) (Signature and stamp) (Signature and stamp)
The notes on pages 105 to 196 form part of these financial statements.
91Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Consolidated income statement
for the year ended 31 December 2021
(Expressed in Renminbi Yuan)
Note 2021 2020
I. Operating income V.37 3953067583 3395402001
Less: Operating cost V.37 1647789874 1503877407
Taxes and surcharges V.38 264057570 203789274
Selling and distribution
expenses V.39 998954105 788252485
General and administrative
expenses V.40 299076376 290646466
Research and development
expenses 10919262 4531418
Financial expenses V.41 21178727 20441713
Including: Interest expenses 28851606 32890621
Interest income 19558354 14247274
Add: Other income V.42 48240741 73063620
Investment losses V.43 (2784997) (2217623)
Including: Losses from
investment in joint
ventures and (2784997) (2217623)
associates
Credit (losses)/reversal V.44 (7937144) 4348309
Impairment losses V.45 (19874251) (3215978)
Losses from disposal of assets V.46 (11939284) (1180655)
The notes on pages 105 to 196 form part of these financial statements.
92Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Consolidated income statement
for the year ended 31 December 2021 (continued)
(Expressed in Renminbi Yuan)
Note 2021 2020
II. Operating profit 716796734 654660911
Add: Non-operating income V.47 5214304 11908510
Less: Non-operating expenses V.47 6311844 1702858
III. Total profit 715699194 664866563
Less: Income tax expenses V.48 209020821 191804500
IV. Net profit 506678373 473062063
(1) Net profit classified by
continuity of operations:
1. Net profit from continuing
operations 506678373 473062063
2. Net profit from discontinued
operations - -
(2) Net profit classified by
ownership:
1. Net profit attributable to
owners of the Company 500102606 470860587
2. Non-controlling interests 6575767 2201476
V. Other comprehensive income net of
tax (39307949) 5171635
(1) Other comprehensive income
(net of tax) attributable to (35283306) 4811712
shareholders of the Company
Translation differences arising
from translation of foreign (35283306) 4811712
currency financial statements
(2) Other comprehensive income
(net of tax) attributable to (4024643) 359923
non-controlling interests
The notes on pages 105 to 196 form part of these financial statements.
93Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Consolidated income statement
for the year ended 31 December 2021 (continued)
(Expressed in Renminbi Yuan)
Note 2021 2020
VI. Total comprehensive income for the
year 467370424 478233698
(1) Attributable to shareholders of
the Company 464819300 475672299
(2) Attributable to non-controlling
interests 2551124 2561399
VII. Earnings per share:
(1) Basic earnings per share V.49 0.73 0.69
(2) Diluted earnings per share V.49 0.73 0.69
These financial statements were approved by the Board of Directors of the Company on 25
April 2022.Zhou Hongjiang Jiang Jianxun Guo Cuimei (Company stamp)
Legal Representative The person in charge The head of the
of accounting affairs accounting department
(Signature and stamp) (Signature and stamp) (Signature and stamp)
The notes on pages 105 to 196 form part of these financial statements.
94Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Company income statement
for the year ended 31 December 2021
(Expressed in Renminbi Yuan)
Note 2021 2020
I. Operating income XIV.5 578895802 512303553
Less: Operating cost XIV.5 472158738 452368512
Taxes and surcharges 38263612 19841835
General and administrative
expenses 74948200 74929302
Research and development
expenses 907975 728793
Financial expenses 2193348 (602459)
Including: Interest expenses 5870092 4875912
Interest income 7122455 5594285
Add: Other income 6108832 5339898
Investment income XIV.6 867523178 449504721
Credit reversal - 601610
II. Operating profit 864055939 420483799
Add: Non-operating income 997416 3961267
Less: Non-operating expenses 3295694 1050415
The notes on pages 105 to 196 form part of these financial statements.
95Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Company income statement
for the year ended 31 December 2021 (continued)
(Expressed in Renminbi Yuan)
Note 2021 2020
III. Total profit 861757661 423394651
Less: Income tax expenses 6703679 (3766123)
IV. Net profit 855053982 427160774
(i) Net profit from continuing
operations 855053982 427160774
(ii) Net profit from discontinued
operations - -
V. Other comprehensive income net of
tax - -
VI. Total comprehensive income for the
year 855053982 427160774
These financial statements were approved by the Board of Directors of the Company on 25
April 2022.Zhou Hongjiang Jiang Jianxun Guo Cuimei (Company stamp)
Legal Representative The person in charge The head of the
of accounting affairs accounting department
(Signature and stamp) (Signature and stamp) (Signature and stamp)
The notes on pages 105 to 196 form part of these financial statements.
96Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Consolidated cash flow statement
for the year ended 31 December 2021
(Expressed in Renminbi Yuan)
Note 2021 2020
I. Cash flows from operating activities:
Proceeds from sale of goods and
rendering of services 3674741084 3259057195
Refund of taxes and surcharges 48716047 45642498
Proceeds from other operating
activities V.50(1) 89142251 81197248
Sub-total of cash inflows 3812599382 3385896941
Payment for goods and services 957499905 1095500438
Payment to and for employees 507532110 529304037
Payment of various taxes 659986692 704054796
Payment for other operating activities V.50(2) 562198017 551890997
Sub-total of cash outflows 2687216724 2880750268
Net cash flows from operating
activities V.51(1) 1125382658 505146673
II. Cash flows from investing activities:
Proceeds from disposal of
investments 93553062 135647402
Investment returns received 2587932 1730511
Net proceeds from disposal of fixed
assets intangible assets and other 7923724 49200301
long-term assets
Sub-total of cash inflows 104064718 186578214
Payment for acquisition of fixed
assets intangible assets and other 225502766 155918502
long-term assets
Payment for acquisition of
investments 54218000 83508393
Net cash paid for the acquisition of
subsidiaries and other business V.51(2) - 89519789
units
Sub-total of cash outflows 279720766 328946684
Net cash flows from investing
activities (175656048) (142368470)
The notes on pages 105 to 196 form part of these financial statements.
97Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Consolidated cash flow statement
for the year ended 31 December 2021 (continued)
(Expressed in Renminbi Yuan)
Note 2021 2020
III. Cash flows from financing activities:
Proceeds from investors 7840000 -
Proceeds from borrowings 847358786 987668379
Sub-total of cash inflows 855198786 987668379
Repayments of borrowings 1036788771 1098773637
Payment for dividends profit
distributions or interest 302051763 531697065
Payment for other financing activities V.50(3) 15904567 62966747
Sub-total of cash outflows 1354745101 1693437449
Net cash flows from financing
activities (499546315) (705769070)
IV. Effect of foreign exchange rate
changes on cash and cash (518371) (1743498)
equivalents
V. Net increase/(decrease) in cash and
cash equivalents V.51(1) 449661924 (344734365)
Add: Cash and cash equivalents at
the beginning of the year 1052665105 1397399470
VI. Cash and cash equivalents at the end
of the year V.51(3) 1502327029 1052665105
These financial statements were approved by the Board of Directors of the Company on 25
April 2022.Zhou Hongjiang Jiang Jianxun Guo Cuimei (Company stamp)
Legal Representative The person in charge The head of the
of accounting affairs accounting department
(Signature and stamp) (Signature and stamp) (Signature and stamp)
The notes on pages 105 to 196 form part of these financial statements.
98Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Company cash flow statement
for the year ended 31 December 2021
(Expressed in Renminbi Yuan)
Note 2021 2020
I. Cash flows from operating activities:
Proceeds from sale of goods and
rendering of services 514762698 365804968
Proceeds from other operating
activities 47112100 19507538
Sub-total of cash inflows 561874798 385312506
Payment for goods and services 313397323 261854964
Payment to and for employees 76053780 65247752
Payment of various taxes 39248076 6778231
Payment for other operating activities 71110685 139442785
Sub-total of cash outflows 499809864 473323732
Net cash flows from operating
activities 62064934 (88011226)
II. Cash flows from investing activities:
Proceeds from disposal of
investments 38200000 58238750
Investment returns received 1068448220 450538570
Net proceeds from disposal of fixed
assets intangible assets and other 408885 131260
long-term assets
Proceeds from borrowings to
subsidiaries 162200000 9000000
Sub-total of cash inflows 1269257105 517908580
Payment for acquisition of fixed
assets intangible assets and other 22919289 51762211
long-term assets
Payment for acquisition of
investments 38200000 131408115
Net cash paid for the acquisition of
subsidiaries and other business - 89519789
units
Cash paid to subsidiaries 655000000 112000000
Sub-total of cash outflows 716119289 384690115
Net cash flows from investing
activities 553137816 133218465
The notes on pages 105 to 196 form part of these financial statements.
99Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Company cash flow statement
for the year ended 31 December 2021 (continued)
(Expressed in Renminbi Yuan)
Note 2021 2020
III. Cash flows from financing activities:
Proceeds from borrowings 150000000 150000000
Sub-total of cash inflows 150000000 150000000
Repayments of borrowings 150000000 150000000
Payment for dividends or interest 280055692 486200712
Payment for other financing
activities 3460687 -
Sub-total of cash outflows 433516379 636200712
Net cash flows from financing
activities (283516379) (486200712)
IV. Effect of foreign exchange rate
changes on cash and cash - -
equivalents
V. Net increase/(decrease) in cash and
cash equivalents 331686371 (440993473)
Add: Cash and cash equivalents at
the beginning of the year 182123069 623116542
VI. Cash and cash equivalents at the
end of the year 513809440 182123069
These financial statements were approved by the Board of Directors of the Company on 25
April 2022.Zhou Hongjiang Jiang Jianxun Guo Cuimei (Company stamp)
Legal Representative The person in charge The head of the
of accounting affairs accounting department
(Signature and stamp) (Signature and stamp) (Signature and stamp)
The notes on pages 105 to 196 form part of these financial statements.
100Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Consolidated statement of changes in shareholders’ equity
for the year ended 31 December 2021
(Expressed in Renminbi Yuan)
Attributable to shareholders of the Company
Note Other Retained Non-controlling
Total
Share capital Capital reserve comprehensive Surplus reserve earnings Sub-total interests
shareholders’
income equity
I. Balance at the beginning of the
year 685464000 524968760 576129 342732000 8714091755 10267832644 236597990 10504430634
Add: Changes in accounting
policies - - - - (10582161) (10582161) - (10582161)
Adjusted balance at the beginning
of the year 685464000 524968760 576129 342732000 8703509594 10257250483 236597990 10493848473
II. Changes in equity during the year
(1) Total comprehensive income - - (35283306) - 500102606 464819300 2551124 467370424
(2) Shareholders’ contributions
Establishment of subsidiaries - - - - - - 7840000 7840000
(3) Appropriation of profits V.36
Distributions to shareholders - - - - (274185600) (274185600) (2196693) (276382293)
III. Balance at the end of the year 685464000 524968760 (34707177) 342732000 8929426600 10447884183 244792421 10692676604
These financial statements were approved by the Board of Directors of the Company on 25 April 2022.Zhou Hongjiang Jiang Jianxun Guo Cuimei (Company stamp)
Legal Representative The person in charge of The head of the accounting
accounting affairs department
(Signature and stamp) (Signature and stamp) (Signature and stamp)
The notes on pages 105 to 196 form part of these financial statements.
101Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Consolidated statement of changes in shareholders’ equity
for the year ended 31 December 2020
(Expressed in Renminbi Yuan)
Attributable to shareholders of the Company
Other Non-controlling TotalNote Share capital Capital reserve comprehensive Surplus reserve Retained shareholders’
income earnings
Sub-total interests equity
I. Balance at the beginning of the
year 685464000 642775360 (4235583) 342732000 8735513044 10402248821 271876064 10674124885
II. Changes in equity during the year
(1) Total comprehensive income - - 4811712 - 470860587 475672299 2561399 478233698
(2) Shareholders’ contributions
Acquisitions of non-controlling
interests - (28286811) - - - (28286811) (34679936) (62966747)
(3) Appropriation of profits V.36
Distributions to shareholders - - - - (492281876) (492281876) (3159537) (495441413)
(4) Business combination under
common control - (89519789) - - - (89519789) - (89519789)
III. Balance at the end of the year 685464000 524968760 576129 342732000 8714091755 10267832644 236597990 10504430634
These financial statements were approved by the Board of Directors of the Company on 25 April 2022.Zhou Hongjiang Jiang Jianxun Guo Cuimei (Company stamp)
Legal Representative The person in charge of The head of the accounting
accounting affairs department
(Signature and stamp) (Signature and stamp) (Signature and stamp)
The notes on pages 105 to 196 form part of these financial statements.
102Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Company statement of changes in shareholders’ equity
for the year ended 31 December 2021
(Expressed in Renminbi Yuan)
Total
Note Share capital Capital reserve Surplus reserve Retainedearnings shareholders’equity
I. Balance at the
beginning of the year 685464000 560182235 342732000 8567313551 10155691786
Add: Changes in
accounting policies III.33 (6620268) (6620268)
Adjusted balance at the
beginning of the year 685464000 560182235 342732000 8560693283 10149071518
II. Changes in equity
during the year
(1) Total
comprehensive - - - 855053982 855053982
income
(2) Appropriation of
profits
Distributions to
shareholders - - - (274185600) (274185600)
III. Balance at the end of
the year 685464000 560182235 342732000 9141561665 10729939900
These financial statements were approved by the Board of Directors of the Company on 25
April 2022.Zhou Hongjiang Jiang Jianxun Guo Cuimei (Company stamp)
Legal Representative The person in charge The head of the
of accounting affairs accounting department
(Signature and stamp) (Signature and stamp) (Signature and stamp)
The notes on pages 105 to 196 form part of these financial statements.
103Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Company statement of changes in shareholders’ equity
for the year ended 31 December 2020 (continued)
(Expressed in Renminbi Yuan)
Total
Note Share capital Capital reserve Surplus reserve Retainedearnings shareholders’equity
I. Balance at the
beginning of the year 685464000 557222454 342732000 8619977577 10205396031
II. Changes in equity
during the year
(1) Total
comprehensive - - - 427160774 427160774
income
(2) Shareholders’
contributions
Purchase of share
equity of Yantai
Changyu Culture
Development Co. - 2959781 - - 2959781Ltd (“CultureDevelopment”)
(3) Appropriation of
profits
Distributions to
shareholders - - - (479824800) (479824800)
III. Balance at the end of
the year 685464000 560182235 342732000 8567313551 10155691786
These financial statements were approved by the Board of Directors of the Company on 25
April 2022.Zhou Hongjiang Jiang Jianxun Guo Cuimei (Company stamp)
Legal Representative The person in charge The head of the
of accounting affairs accounting department
(Signature and stamp) (Signature and stamp) (Signature and stamp)
The notes on pages 105 to 196 form part of these financial statements.
104Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Yantai Changyu Pioneer Wine Company Limited
Notes to the financial statements
(Expressed in Renminbi Yuan unless otherwise indicated)
I. Company statusYantai Changyu Pioneer Wine Co. Ltd. (the "Company” or the “Joint Stock Company”) was
incorporated as a joint stock limited company in accordance with the Company Law of the
People's Republic of China (the "PRC") in a reorganisation carried out by Yantai Changyu
Group Co. Ltd. ("Changyu Group") in which Changyu Group Company injected certain
assets and liabilities in relation to the brandy wine and sparkling wine production and sales
businesses to the Company. The Company and its subsidiaries (the "Group") are principally
engaged in the production and sales of wine brandy sparkling wine grape growing and
acquisition as well as travel resource development etc. Registration place of the Company
is Yantai Shandong. Headquarter of the Company is located at No. 56 Da Ma Lu Zhifu
District Yantai Shandong PRC.As at 31 December 2021 the total shares issued by the Company amounts to 685464000
shares. Please refer to Note V. 32 in detail.The holding company of the Group is Changyu Group Company which is jointly controlled by
Yantai GuoFeng Investment Holding Ltd ILLVA SARONNO HOLDING SPA International
Finance Corporation and Yantai Yuhua Investment and Development Company Limited.The financial statements have been authorised by the board of directors on 25 April 2022.According to the Company's articles of association the financial statements will be reviewed
by shareholders on the shareholder's meeting.For consolidation scope of the year please refer to Note VI "Equity in other entities" in detail.II. Basis of preparation
The financial statements have been prepared on the going concern basis.The Group has adopted the revised “Accounting Standard for Business Enterprises No. 22 –Financial Instruments: Recognition and Measurement” and related new financial instruments
standards and “Accounting Standard for Business Enterprises No. 14 – Revenue” issued by
the Ministry of Finance (“MOF”) of the People’s Republic of China in 2017 since 1 January
2019 and 1 January 2020 respectively. In addition it has adopted the revised “AccountingStandard for Business Enterprises No. 21 – Leases” issued by the MOF in 2018 since 1
January 2021 (see Note III.33(1)).
105Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
III. Significant accounting policies and accounting estimates
1 Statement of compliance
The financial statements have been prepared in accordance with the requirements of
Accounting Standards for Business Enterprises or referred to as China Accounting Standards
(“CAS”) issued by the MOF. These financial statements present truly and completely the
consolidated financial position and financial position of the Company as at 31 December
2021 and the consolidated financial performance and financial performance and the
consolidated cash flows and cash flows of the Company for the year then ended.These financial statements also comply with the disclosure requirements of “Regulation onthe Preparation of Information Disclosures by Companies Issuing Securities No. 15: GeneralRequirements for Financial Reports” as revised by the China Securities Regulatory
Commission (“CSRC”) in 2014.
2 Accounting period
The accounting period is from 1 January to 31 December.
3 Operating cycle
The Company takes the period from the acquisition of assets for processing to until the
ultimate realisation of cash or cash equivalents as a normal operating cycle. The operating
cycle of the Company is 12 months.
4 Functional currency
Renminbi ("RMB") is the currency of the primary economic environment in which the
Company and its domestic subsidiaries operate. Therefore the Company and its domestic
subsidiaries choose RMB as their functional currency. Overseas subsidiaries of the
Company adopt Euro Chilean Peso and Australian Dollar as their functional currencies on the
basis of the primary economic environment in which they operate. The Company adopts
RMB to prepare its financial statements.
5 Accounting treatments for business combinations involving entities under common control
and not under common control
A transaction constitutes a business combination when the Group obtains control of one or
more entities (or a group of assets or net assets). Business combination is classified as
either business combinations involving enterprises under common control or business
combinations not involving enterprises under common control.For a transaction not involving enterprises under common control the acquirer determines
whether acquired set of assets constitute a business. The Group may elect to apply the
simplified assessment method the concentration test to determine whether an acquired set
of assets is not a business. If the concentration test is met and the set of assets is
determined not to be a business no further assessment is needed. If the concentration test
is not met the Group shall perform the assessment according to the guidance on the
determination of a business.
106Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
When the set of assets the group acquired does not constitute a business acquisition costs
should be allocated to each identifiable assets and liabilities at their acquisition?date fair
values. It is not required to apply the accounting of business combination described as
below.
(1) Business combinations involving entities under common control
A business combination involving entities under common control is a business combination in
which all of the combining entities are ultimately controlled by the same party or parties both
before and after the business combination and that control is not transitory. The assets
acquired and liabilities assumed are measured based on their carrying amounts in the
consolidated financial statements of the ultimate controlling party at the combination date.The difference between the carrying amount of the net assets acquired and the consideration
paid for the combination (or the total par value of shares issued) is adjusted against share
premium in the capital reserve with any excess adjusted against retained earnings. Any
costs directly attributable to the combination are recognised in profit or loss when incurred.The combination date is the date on which one combining entity obtains control of other
combining entities.
(2) Business combinations involving entities not under common control
A business combination involving entities not under common control is a business
combination in which all of the combining entities are not ultimately controlled by the same
party or parties both before and after the business combination. Where (1) the aggregate of
the acquisition-date fair value of assets transferred (including the acquirer’s previously held
equity interest in the acquiree) liabilities incurred or assumed and equity securities issued by
the acquirer in exchange for control of the acquiree exceeds (2) the acquirer’s interest in the
acquisition-date fair value of the acquiree’s identifiable net assets the difference is
recognised as goodwill (see Note III.18). If (1) is less than (2) the difference is recognised in
profit or loss for the current period. Other acquisition-related costs are expensed when
incurred. The acquiree’s identifiable asset liabilities and contingent liabilities if the
recognition criteria are met are recognised by the Group at their acquisition-date fair value.The acquisition date is the date on which the acquirer obtains control of the acquiree.For a business combination involving entities not under common control and achieved in
stages the Group remeasures its previously-held equity interest in the acquiree to its
acquisition-date fair value and recognises any resulting difference between the fair value and
the carrying amount as investment income or other comprehensive income for the current
period. In addition any amount recognised in other comprehensive income that may be
reclassified to profit or loss in prior reporting periods relating to the previously-held equity
interest and any other changes in the owners’ equity under equity accounting are transferred
to investment income in the period in which the acquisition occurs (see Note III.11(2)(b)). If
equity interests of the acquiree held before acquisition-date were equity instrument
investments measured at fair value through other comprehensive income other
comprehensive income recognised shall be moved to retained earnings on acquisition-date.
107Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
6 Consolidated financial statements
(1) General principles
The scope of consolidated financial statements is based on control and the consolidated
financial statements comprise the Company and its subsidiaries. Control exists when the
investor has all of following: power over the investee; exposure or rights to variable returns
from its involvement with the investee and has the ability to affect those returns through its
power over the investee. When assessing whether the Group has power only substantive
rights (held by the Group and other parties) are considered. The financial position financial
performance and cash flows of subsidiaries are included in the consolidated financial
statements from the date that control commences until the date that control ceases.Non-controlling interests are presented separately in the consolidated balance sheet within
shareholders’ equity. Net profit or loss attributable to non-controlling shareholders is
presented separately in the consolidated income statement below the net profit line item.Total comprehensive income attributable to non-controlling shareholders is presented
separately in the consolidated income statement below the total comprehensive income line
item.When the amount of loss for the current period attributable to the non-controlling shareholders
of a subsidiary exceeds the non-controlling shareholders’ share of the opening owners’ equity
of the subsidiary the excess is still allocated against the non-controlling interests.When the accounting period or accounting policies of a subsidiary are different from those of
the Company the Company makes necessary adjustments to the financial statements of the
subsidiary based on the Company’s own accounting period or accounting policies.Intra-group balances and transactions and any unrealised profit or loss arising from
intra-group transactions are eliminated when preparing the consolidated financial statements.Unrealised losses resulting from intra-group transactions are eliminated in the same way as
unrealised gains unless they represent impairment losses that are recognised in the financial
statements.
(2) Subsidiaries acquired through a business combination
Where a subsidiary was acquired during the reporting period through a business combination
involving entities under common control the financial statements of the subsidiary are
included in the consolidated financial statements based on the carrying amounts of the assets
and liabilities of the subsidiary in the financial statements of the ultimate controlling party as if
the combination had occurred at the date that the ultimate controlling party first obtained
control. The opening balances and the comparative figures of the consolidated financial
statements are also restated.Where a subsidiary was acquired during the reporting period through a business combination
involving entities not under common control the identifiable assets and liabilities of the
acquired subsidiaries are included in the scope of consolidation from the date that control
commences based on the fair value of those identifiable assets and liabilities at the
acquisition date.
108Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
(3) Disposal of subsidiaries
When the Group loses control over a subsidiary any resulting disposal gains or losses are
recognised as investment income for the current period. The remaining equity investment is
re-measured at its fair value at the date when control is lost any resulting gains or losses are
also recognised as investment income for the current period.When the Group loses control of a subsidiary in multiple transactions in which it disposes of
its long-term equity investment in the subsidiary in stages the following are considered to
determine whether the Group should account for the multiple transactions as a bundled
transaction:
- arrangements are entered into at the same time or in contemplation of each other;
- arrangements work together to achieve an overall commercial effect;
- the occurrence of one arrangement is dependent on the occurrence of at least one other
arrangement;
- one arrangement considered on its own is not economically justified but it is economically
justified when considered together with other arrangements.If each of the multiple transactions does not form part of a bundled transaction the
transactions conducted before the loss of control of the subsidiary are accounted for in
accordance with the accounting policy for partial disposal of equity investment in subsidiaries
where control is retained (see Note III.6(4)).If each of the multiple transactions forms part of a bundled transaction which eventually
results in the loss of control in the subsidiary these multiple transactions are accounted for as
a single transaction. In the consolidated financial statements the difference between the
consideration received and the corresponding proportion of the subsidiary’s net assets
(calculated continuously from the acquisition date) in each transaction prior to the loss of
control shall be recognised in other comprehensive income and transferred to profit or loss
when the parent eventually loses control of the subsidiary.
(4) Changes in non-controlling interests
Where the Company acquires a non-controlling interest from a subsidiary’s non-controlling
shareholders or disposes of a portion of an interest in a subsidiary without a change in control
the difference between the proportion interests of the subsidiary’s net assets being acquired
or disposed and the amount of the consideration paid or received is adjusted to the capital
reserve (share premium) in the consolidated balance sheet with any excess adjusted to
retained earnings.
7 Cash and cash equivalents
Cash and cash equivalents comprise cash on hand deposits that can be readily withdraw on
demand and short-term highly liquid investments that are readily convertible into known
amounts of cash and are subject to an insignificant risk of change in value.
8 Foreign currency transactions and translation of foreign currency financial statements
When the Group receives capital in foreign currencies from investors the capital is translated
to Renminbi at the spot exchange rate at the date of the receipt. Other foreign currency
transactions are on initial recognition translated to Renminbi at the spot exchange rates.
109Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Monetary items denominated in foreign currencies are translated to Renminbi at the spot
exchange rate at the balance sheet date. The resulting exchange differences are generally
recognised in profit or loss unless they arise from the re-translation of the principal and
interest of specific borrowings for the acquisition and construction of qualifying assets (see
Note III. 15). Non-monetary items that are measured at historical cost in foreign currencies
are translated to Renminbi using the exchange rate at the transaction date.In translating the financial statements of a foreign operation assets and liabilities of foreign
operation are translated to Renminbi at the spot exchange rate at the balance sheet date.Equity items excluding retained earnings and the translation differences in other
comprehensive income are translated to Renminbi at the spot exchange rates at the
transaction dates. Income and expenses in the income statement are translated to
Renminbi at the spot exchange rates at the transaction dates. The resulting translation
differences are recognised in other comprehensive income. The translation differences
accumulated in other comprehensive income with respect to a foreign operation are
transferred to profit or loss in the period when the foreign operation is disposed.
9 Financial instruments
Financial instruments include cash at bank and on hand investments in debt and equity
securities other than those classified as long-term equity investments (see Note III.11)
receivables payables loans and borrowings and share capital.
(1) Recognition and initial measurement of financial assets and financial liabilities
A financial asset or financial liability is recognised in the balance sheet when the Group
becomes a party to the contractual provisions of a financial instrument.A financial assets (unless it is a trade receivable without a significant financing component)
and financial liabilities is measured initially at fair value. For financial assets and financial
liabilities at fair value through profit or loss any related directly attributable transaction costs
are charged to profit or loss; for other categories of financial assets and financial liabilities
any related directly attributable transaction costs are included in their initial costs. A trade
receivable without significant financing component or practical expedient applied for one year
or less contracts is initially measured at the transaction price in accordance with Note III.22.
(2) Classification and subsequent measurement of financial assets
(a) Classification of financial assets
The classification of financial assets is generally based on the business model in which
a financial asset is managed and its contractual cash flow characteristics. On initial
recognition a financial asset is classified as measured at amortised cost at fair value
through other comprehensive income (“FVOCI”) or at fair value through profit or loss
(“FVTPL”).Financial assets are not reclassified subsequent to their initial recognition unless the
Group changes its business model for managing financial assets in which case all
affected financial assets are reclassified on the first day of the first reporting period
following the change in the business model.
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A financial asset is measured at amortised cost if it meets both of the following
conditions and is not designated as at FVTPL:
- it is held within a business model whose objective is to hold assets to collect
contractual cash flows; and
- its contractual terms give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.A debt investment is measured at FVOCI if it meets both of the following conditions and
is not designated as at FVTPL:
- it is held within a business model whose objective is achieved by both collecting
contractual cash flows and selling financial assets; and
- its contractual terms give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.On initial recognition of an equity investment that is not held for trading the Group may
irrevocably elect to present subsequent changes in the investment’s fair value in other
comprehensive income. This election is made on an investment-by-investment basis.The instrument meets the definition of equity from the perspective of the issuer.All financial assets not classified as measured at amortised cost or FVOCI as described
above are measured at FVTPL. On initial recognition the Group may irrevocably
designate a financial asset that otherwise meets the requirements to be measured at
amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces
an accounting mismatch that would otherwise arise.The business model refers to how the Group manages its financial assets in order to
generate cash flows. That is the Group’s business model determines whether cash
flows will result from collecting contractual cash flows selling financial assets or both.The Group determines the business model for managing the financial assets according
to the facts and based on the specific business objective for managing the financial
assets determined by the Group’s key management personnel.In assessing whether the contractual cash flows are solely payments of principal and
interest the Group considers the contractual terms of the instrument. For the
purposes of this assessment ‘principal’ is defined as the fair value of the financial asset
on initial recognition. ‘Interest’ is defined as consideration for the time value of money
and for the credit risk associated with the principal amount outstanding during a
particular period of time and for other basic lending risks and costs as well as a profit
margin. The Group also assesses whether the financial asset contains a contractual
term that could change the timing or amount of contractual cash flows such that it would
not meet this condition.(b) Subsequent measurement of financial assets
- Financial assets at FVTPL
These financial assets are subsequently measured at fair value. Net gains and
losses including any interest or dividend income are recognised in profit or loss
unless the financial assets are part of a hedging relationship.
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- Financial assets at amortised cost
These assets are subsequently measured at amortised cost using the effective
interest method. A gain or loss on a financial asset that is measured at amortised
cost and is not part of a hedging relationship shall be recognised in profit or loss
when the financial asset is derecognised reclassified through the amortisation
process or in order to recognise impairment gains or losses.- Debt investments at FVOCI
These assets are subsequently measured at fair value. Interest income calculated
using the effective interest method impairment and foreign exchange gains and
losses are recognised in profit or loss. Other net gains and losses are recognised in
other comprehensive income. On derecognition gains and losses accumulated in
other comprehensive income are reclassified to profit or loss.- Equity investments at FVOCI
These assets are subsequently measured at fair value. Dividends are recognised
as income in profit or loss. Other net gains and losses are recognised in other
comprehensive income. On derecognition gains and losses accumulated in other
comprehensive income are reclassified to retained earnings.
(3) Classification and subsequent measurement of financial liabilities
Financial liabilities are classified as measured at FVTPL or amortised cost by the Group.- Financial liabilities at FVTPL
A financial liability is classified as at FVTPL if it is classified as held-for-trading (including
derivative financial liability) or it is designated as such on initial recognition.Financial liabilities at FVTPL are subsequently measured at fair value and net gains and
losses including any interest expense are recognised in profit or loss unless the financial
liabilities are part of a hedging relationship.- Financial liabilities at amortised cost
These financial liabilities are subsequently measured at amortised cost using the effective
interest method.
(4) Offsetting
Financial assets and financial liabilities are generally presented separately in the balance
sheet and are not offset. However a financial asset and a financial liability are offset and
the net amount is presented in the balance sheet when both of the following conditions are
satisfied:
- The Group currently has a legally enforceable right to set off the recognised amounts;
- The Group intends either to settle on a net basis or to realise the financial asset and settle
the financial liability simultaneously.
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(5) Derecognition of financial assets and financial liabilities
Financial asset is derecognised when one of the following conditions is met:
- the Group’s contractual rights to the cash flows from the financial asset expire;
- the financial asset has been transferred and the Group transfers substantially all of the
risks and rewards of ownership of the financial asset; or;
- the financial asset has been transferred although the Group neither transfers nor retains
substantially all of the risks and rewards of ownership of the financial asset it does not
retain control over the transferred asset.Where a transfer of a financial asset in its entirety meets the criteria for derecognition the
difference between the two amounts below is recognised in profit or loss:
- the carrying amount of the financial asset transferred measured at the date of
derecognition;
- the sum of the consideration received from the transfer and when the transferred financial
asset is a debt investment at FVOCI any cumulative gain or loss that has been recognised
directly in other comprehensive income for the part derecognised.The Group derecognises a financial liability (or part of it) only when its contractual obligation
(or part of it) is extinguished.
(6) Impairment
The Group recognises loss allowances for expected credit loss (ECL) on:
- financial assets measured at amortised cost;
- financial investments at fair value through other comprehensive income
Financial assets measured at fair value including debt investments or equity securities at
FVPL equity securities designated at FVOCI and derivative financial assets are not subject
to the ECL assessment.Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as
the present value of all cash shortfalls (i.e. the difference between the cash flows due to the
entity in accordance with the contract and the cash flows that the Group expects to receive).The maximum period considered when estimating ECLs is the maximum contractual period
(including extension options) over which the Group is exposed to credit risk.Lifetime ECLs are the ECLs that result from all possible default events over the expected life
of a financial instrument.
12-month ECLs are the portion of ECLs that result from default events that are possible within
the 12 months after the balance sheet date (or a shorter period if the expected life of the
instrument is less than 12 months).
113Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
For accounts receivable loss allowance are always measured at an amount equal to lifetime
ECLs. ECLs on these financial assets are estimated using a provision matrix based on the
Group’s historical credit loss experience adjusted for factors that are specific to the debtors
and an assessment of both the current and forecast general economic conditions at the
balance sheet date.For assets other than accounts receivable that meet one of the following conditions loss
allowance are measured at an amount equal to 12-month ECLs. For all other financial
instruments the Group recognises a loss allowance equal to lifetime ECLs:
- If the financial instrument is determined to have low credit risk at the balance sheet date;
- If the credit risk on a financial instrument has not increased significantly since initial
recognition.Financial instruments that have low credit risk
The credit risk on a financial instrument is considered low 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 fulfil its contractual cash flow
obligations.Significant increases in credit risk
In assessing whether the credit risk of a financial instrument has increased significantly since
initial recognition the Group compares the risk of default occurring on the financial instrument
assessed at the balance sheet date with that assessed at the date of initial recognition.When determining whether the credit risk of a financial asset has increased significantly since
initial recognition and when estimating ECL the Group considers reasonable and supportable
information that is relevant and available without undue cost or effort including
forward-looking information. In particular the following information is taken into account:
- failure to make payments of principal or interest on their contractually due dates;
- an actual or expected significant deterioration in a financial instrument’s external or internal
credit rating (if available);
- an actual or expected significant deterioration in the operating results of the debtor; and
- existing or forecast changes in the technological market economic or legal environment
that have a significant adverse effect on the debtor’s ability to meet its obligation to the
Group.Depending on the nature of the financial instruments the assessment of a significant increase
in credit risk is performed on either an individual basis or a collective basis. When the
assessment is performed on a collective basis the financial instruments are grouped based
on shared credit risk characteristics such as past due status and credit risk ratings.The Group assumes that the credit risk on a financial asset has increased significantly if it is
more than 30 days past due.
114Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Credit-impaired financial assets
At each balance sheet date the Group assesses whether financial assets carried at
amortised cost and debt investments at FVOCI are credit-impaired. A financial asset is
‘credit-impaired’ when one or more events that have a detrimental impact on the estimated
future cash flows of the financial asset have occurred. Evidence that a financial asset is
credit-impaired includes the following observable data:
- significant financial difficulty of the borrower or issuer;
- a breach of contract such as a default or delinquency in interest or principal payments;
- for economic or contractual reasons relating to the borrower’s financial difficulty the Group
having granted to the borrower a concession that would not otherwise consider;
- it is probable that the borrower will enter bankruptcy or other financial reorganisation; or
- the disappearance of an active market for that financial asset because of financial
difficulties.Presentation of allowance for ECL
ECLs are remeasured at each balance sheet date to reflect changes in the financial
instrument’s credit risk since initial recognition. Any change in the ECL amount is
recognised as an impairment gain or loss in profit or loss. The Group recognises an
impairment gain or loss for all financial instruments with a corresponding adjustment to their
carrying amount through a loss allowance account except for debt investments that are
measured at FVOCI for which the loss allowance is recognised in other comprehensive
income.Write-off
The gross carrying amount of a financial asset is written off (either partially or in full) to the
extent that there is no realistic prospect of recovery. A write-off constitutes a derecognition
event. This is generally the case when the Group determines that the debtor does not have
assets or sources of income that could generate sufficient cash flows to repay the amounts
subject to the write-off. However financial assets that are written off could still be subject to
enforcement activities in order to comply with the Group’s procedures for recovery of amounts
due.Subsequent recoveries of an asset that was previously written off are recognised as a
reversal of impairment in profit or loss in the period in which the recovery occurs.
(7) Equity instrument
The consideration received from the issuance of equity instruments net of transaction costs is
recognised in shareholders’ equity. Consideration and transaction costs paid by the
Company for repurchasing self-issued equity instruments are deducted from shareholders’
equity.When the Company repurchases its own shares those shares are treated as treasury shares.All expenditure relating to the repurchase is recorded in the cost of the treasury shares with
the transaction recording in the share register. Treasury shares are excluded from profit
distributions and are presented as a deduction under shareholders’ equity in the balance
sheet.
115Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
10 Inventories
(1) Classification and cost
Inventories include raw materials work in progress and reusable materials. Inventories are
initially measured at cost. Cost of inventories comprises all costs of purchase costs of
conversion and other expenditure incurred in bringing the inventories to their present location
and condition. In addition to the purchase cost of raw materials work in progress and
finished goods include direct labour costs and an appropriate allocation of production
overheads.Agricultural products harvested are reported in accordance with the CAS No.1 - Inventories.
(2) Measurement method of cost of inventories
Cost of inventories is calculated using the weighted average method.Consumables including low-value consumables and packaging materials are amortised when
they are used. The amortisation charge is included in the cost of the related assets or
recognised in profit or loss for the current period.
(3) Basis for determining the net realisable value and method for provision for obsolete
inventories
At the balance sheet date inventories are carried at the lower of cost and net realisable value.Net realisable value is the estimated selling price in the ordinary course of business less the
estimated costs of completion and the estimated costs necessary to make the sale and
relevant taxes. The net realisable value of materials held for use in the production is
measured based on the net realisable value of the finished goods in which they will be
incorporated. The net realisable value of the inventory held to satisfy sales or service
contracts is measured based on the contract price to the extent of the quantities specified in
sales contracts and the excess portion of inventories is measured based on general selling
prices.Any excess of the cost over the net realisable value of each item of inventories is recognised
as a provision for impairment and is recognised in profit or loss.
(4) Inventory count system
The Group maintains a perpetual inventory system.
116Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
11 Long-term equity investments
(1) Investment cost of long-term equity investments
(a) Long-term equity investments acquired through a business combination
- The initial cost of a long-term equity investment acquired through a business
combination involving entities under common control is the Company’s share of the
carrying amount of the subsidiary’s equity in the consolidated financial statements of
the ultimate controlling party at the combination date. The difference between the
initial investment cost and the carrying amount of the consideration given is adjusted
to the share premium in the capital reserve with any excess adjusted to retained
earnings. For a long-term equity investment in a subsidiary acquired through a
business combination achieved in stages which do not form a bundled transaction
and involving entities under common control the Company determines the initial cost
of the investment in accordance with the above policies. The difference between
this initial cost and the sum of the carrying amount of previously-held investment and
the consideration paid for the shares newly acquired is adjusted to capital premium in
the capital reserve with any excess adjusted to retained earnings.- For a long-term equity investment obtained through a business combination not
involving enterprises under common control the initial cost comprises the aggregate
of the fair value of assets transferred liabilities incurred or assumed and equity
securities issued by the Company in exchange for control of the acquiree. For a
long-term equity investment obtained through a business combination not involving
entities under common control and achieved through multiple transactions in stages
which do not form a bundled transaction the initial cost comprises the carrying
amount of the previously-held equity investment in the acquiree immediately before
the acquisition date and the additional investment cost at the acquisition date.(b) Long-term equity investments acquired other than through a business combination
- A long-term equity investment acquired other than through a business combination is
initially recognised at the amount of cash paid if the Group acquires the investment
by cash or at the fair value of the equity securities issued if an investment is acquired
by issuing equity securities.
(2) Subsequent measurement of long-term equity investment
(a) Investments in subsidiaries
In the Company’s separate financial statements long-term equity investments in
subsidiaries are accounted for using the cost method unless the investment is classified
as held for sale (See Note III. 28). Except for cash dividends or profit distributions
declared but not yet distributed that have been included in the price or consideration
paid in obtaining the investments the Company recognises its share of the cash
dividends or profit distributions declared by the investee as investment income for the
current period.The investments in subsidiaries are stated in the balance sheet at cost less
accumulated impairment losses.
117Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
For the impairment of the investments in subsidiaries refer to Note III.20.In the Group’s consolidated financial statements subsidiaries are accounted for in
accordance with the policies described in Note III.6.(b) Investment in joint ventures and associates
A joint venture is an arrangement whereby the Group and other parties have joint
control (see Note III.11(3)) and rights to the net assets of the arrangement.Associated enterprises refer to enterprises to which the Group can exercise significant
influence (see Note III.11(3)).A long-term equity investment in a joint venture is accounted for using the equity
method for subsequent measurement unless the investment is classified as held for
sale (see Note III.28).The accounting treatments under the equity method adopted by the Group are as
follows:
- Where the initial cost of a long-term equity investment exceeds the Group’s interest
in the fair value of the investee’s identifiable net assets at the date of acquisition the
investment is initially recognised at cost. Where the initial investment cost is less
than the Group’s interest in the fair value of the investee’s identifiable net assets at
the date of acquisition the investment is initially recognised at the investor’s share of
the fair value of the investee’s identifiable net assets and the difference is
recognised in profit or loss.- After the acquisition of the investment the Group recognises its share of the
investee’s profit or loss and other comprehensive income as investment income or
losses and other comprehensive income respectively and adjusts the carrying
amount of the investment accordingly. Once the investee declares any cash
dividends or profit distributions the carrying amount of the investment is reduced by
the amount attributable to the Group. Changes in the Group’s share of the
investee’s owners’ equity other than those arising from the investee’s net profit orloss other comprehensive income or profit distribution (referred to as “other changesin owners’ equity”) is recognised directly in the Group’s equity and the carrying
amount of the investment is adjusted accordingly.- In calculating its share of the investee’s net profits or losses other comprehensive
income and other changes in owners’ equity the Group recognises investment
income and other comprehensive income after making appropriate adjustments to
align the accounting policies or accounting periods with those of the Group based on
the fair value of the investee’s identifiable net assets at the date of acquisition.Unrealised profits and losses resulting from transactions between the Group and its
associates or joint ventures are eliminated to the extent of the Group’s interest in the
associates or joint ventures. Unrealised losses resulting from transactions between
the Group and its associates or joint ventures are eliminated in the same way as
unrealised gains but only to the extent that there is no impairment.
118Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
- The Group discontinues recognising its share of further losses of the investee after
the carrying amount of the long-term equity investment and any long-term interest
that in substance forms part of the Group’s net investment in the associate is
reduced to zero except to the extent that the Group has an obligation to assume
additional losses. If the joint venture subsequently reports net profits the Group
resumes recognising its share of those profits only after its share of the profits equals
the share of losses not recognised.For the impairment of the investments in joint ventures and associates refer to Note
III.20.
(3) Criteria for determining the existence of joint control over an investee
Joint control is the contractually agreed sharing of control of an arrangement which exists
only when decisions about the relevant activities (activities with significant impact on the
returns of the arrangement) require the unanimous consent of the parties sharing control.The following factors are usually considered when assessing whether the Group can exercise
joint control over an investee:
- Whether no single participant party is in a position to control the investee’s related activities
unilaterally;
- Whether strategic decisions relating to the investee’s related activities require the
unanimous consent of all participant parties that sharing of control.Significant influence is the power to participate in the financial and operating policy decisions
of an investee but does not have control or joint control over those policies.
12 Investment properties
Investment properties are properties held either to earn rental income or for capital
appreciation or for both. Investment properties are accounted for using the cost model and
stated in the balance sheet at cost less accumulated depreciation amortisation and
impairment losses and adopts a depreciation or amortisation policy for the investment
property which is consistent with that for buildings or land use rights unless the investment
property is classified as held for sale (see Note III.28). For the impairment of the investment
properties refer to Note III.20.Category Estimated useful Residual value rate Depreciation ratelife (years) (%) (%)
Plant and buildings 20 - 40 years 0 - 5% 2.4% - 5.0%
13 Fixed assets
(1) Recognition of fixed assets
Fixed assets represent the tangible assets held by the Group for use in production of goods
supply of services for rental or for administrative purposes with useful lives over one
accounting year.
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The cost of a purchased fixed asset comprises the purchase price related taxes and any
directly attributable expenditure for bringing the asset to working condition for its intended
use. The cost of self-constructed assets is measured in accordance with the policy set out in
Note III.14.Where the parts of an item of fixed assets have different useful lives or provide benefits to the
Group in a different pattern thus necessitating use of different depreciation rates or methods
each part is recognised as a separate fixed asset.Any subsequent costs including the cost of replacing part of an item of fixed assets are
recognised as assets when it is probable that the economic benefits associated with the costs
will flow to the Group and the carrying amount of the replaced part is derecognised. The
costs of the day-to-day maintenance of fixed assets are recognised in profit or loss as
incurred.Fixed assets are stated in the balance sheet at cost less accumulated depreciation and
impairment losses.
(2) Depreciation of fixed assets
The cost of a fixed asset less its estimated residual value and accumulated impairment
losses is depreciated using the straight-line method over its estimated useful life unless the
fixed asset is classified as held for sale (see Note III.28).The estimated useful lives residual value rates and depreciation rates of each class of fixed
assets are as follows:
Class Estimated useful Residual value rate Depreciation ratelife (years) (%) (%)
Plant and buildings 20 - 40 years 0 - 5% 2.4% - 5.0%
Machinery equipment 5 - 30 years 0 - 5% 3.2% - 20.0%
Motor vehicles 4 - 12 years 0 - 5% 7.9% - 25.0%
Useful lives estimated residual values and depreciation methods are reviewed at least at
each year-end.
(3) For the impairment of the fixed assets refer to Note III.20.
(4) Disposal of fixed assets
The carrying amount of a fixed asset is derecognised:
- when the fixed asset is holding for disposal; or
- when no future economic benefit is expected to be generated from its use or disposal.Gains or losses arising from the retirement or disposal of an item of fixed asset are
determined as the difference between the net disposal proceeds and the carrying amount of
the item and are recognised in profit or loss on the date of retirement or disposal.
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14 Construction in progress
The cost of self-constructed assets includes the cost of materials direct labour capitalised
borrowing costs (see Note III.15) and any other costs directly attributable to bringing the
asset to working condition for its intended use.A self-constructed asset is classified as construction in progress and transferred to fixed asset
when it is ready for its intended use. No depreciation is provided against construction in
progress.Construction in progress is stated in the balance sheet at cost less accumulated impairment
losses (see Note III.20).
15 Borrowing costs
Borrowing costs incurred directly attributable to the acquisition and construction or production
of a qualifying asset are capitalised as part of the cost of the asset. Other borrowing costs
are recognised as financial expenses when incurred.During the capitalisation period the amount of interest (including amortisation of any discount
or premium on borrowing) to be capitalised in each accounting period is determined as
follows:
- Where funds are borrowed specifically for the acquisition and construction or production of
a qualifying asset the amount of interest to be capitalised is the interest expense
calculated using effective interest rates during the period less any interest income earned
from depositing the borrowed funds or any investment income on the temporary
investment of those funds before being used on the asset.- To the extent that the Group borrows funds generally and uses them for the acquisition and
construction or production of a qualifying asset the amount of borrowing costs eligible for
capitalisation is determined by applying a capitalisation rate to the weighted average of the
excess amounts of cumulative expenditure on the asset over the above amounts of
specific borrowings. The capitalisation rate is the weighted average of the interest rates
applicable to the general-purpose borrowings.The effective interest rate is determined as the rate that exactly discounts estimated future
cash flow through the expected life of the borrowing or when appropriate a shorter period to
the initially recognised amount of the borrowings.During the capitalisation period exchange differences related to the principal and interest on
a specific-purpose borrowing denominated in foreign currency are capitalised as part of the
cost of the qualifying asset. The exchange differences related to the principal and interest on
foreign currency borrowings other than a specific-purpose borrowing are recognised as a
financial expense when incurred.
121Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
The capitalisation period is the period from the date of commencement of capitalisation of
borrowing costs to the date of cessation of capitalisation excluding any period over which
capitalisation is suspended. Capitalisation of borrowing costs commences when
expenditure for the asset is being incurred borrowing costs are being incurred and activities
of acquisition construction or production that are necessary to prepare the asset for its
intended use are in progress and ceases when the assets become ready for their intended
use. Capitalisation of borrowing costs should cease when the qualifying asset being
constructed or produced has reached its expected usable or saleable condition.Capitalisation of borrowing costs is suspended when the acquisition construction or
production activities are interrupted abnormally for a period of more than three months.
16. Biological assets
The Group's biological assets are bearer biological assets.Bearer biological assets are those that are held for the purposes of producing agricultural
produce rendering of services or rental. Bearer biological assets in the Group are vines.Bearer biological assets are initially measured at cost. The cost of self-grown or self-bred
bearer biological assets represents the necessary directly attributable expenditure incurred
before satisfying the expected production and operating purpose including capitalised
borrowing costs.Bearer biological assets after reaching the expected production and operating purpose are
depreciated using the straight-line method over its estimated useful life. The estimated
useful lives estimated net residual value rates and depreciation rates of bearer biological
assets are as follows:
Category Estimated useful Estimated net Depreciation ratelife (years) residual value rate (%)
Vines 20 years 0% 5.0%
The Group evaluates the useful life and expected net salvage value by considering the normal
producing life of the bearer biological assets.Useful lives estimated residual values and depreciation methods of bearer biological assets
are reviewed at least at each year-end. Any changes should be treated as changes in
accounting estimates.For a bearer biological asset that has been sold damaged dead or destroyed any difference
between the disposal proceeds and the carrying amount of the asset should be recognised in
profit or loss for the period in which it arises.
17 Intangible assets
Intangible assets are stated in the balance sheet at cost less accumulated amortization
(where the estimated useful life is finite) and impairment losses (see Note III.20). For an
intangible asset with finite useful life its cost estimated less residual value and accumulated
impairment losses is amortised on the straight-line method over its estimated useful life
unless the intangible asset is classified as held for sale (see Note III.28).
122Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
The respective amortisation periods for intangible assets are as follows:
Item Amortisation period (years)
Land use rights 40 - 50 years
Software licenses 5 - 10 years
Trademarks 10 years
Useful lives and amortisation methods of intangible asset with finite useful life are reviewed at
least at each year-end.An intangible asset is regarded as having an indefinite useful life and is not amortised when
there is no foreseeable limit to the period over which the asset is expected to generate
economic benefits for the Group. At the balance sheet date the Group had intangible assets
with infinite useful lives including the land use rights and trademarks. Land use rights with
infinite useful lives are permanent land use rights with permanent ownership held by the
Group under the relevant Chile and Australian laws arising from the Group’s acquisition of
Vi?a Indómita S.A. Vi?a Dos Andes S.A. and Bodegas Santa Alicia SPA. (collectively
referred to as the "Chile Indomita Wine Group") and the acquisition of Kilikanoon Estate Pty
Ltd. (hereinafter referred to as the "Australia Kilikanoon Estate") therefore there was no
amortisation. The right to use trademark refers to the trademark held by the Group arising
from the acquisition of the Chile Indomita Wine Group and the Australia Kilikanoon Estate with
infinite useful lives. The valuation of trademark was based on the trends in the market and
competitive environment product cycle and managing long-term development strategy.Those basis indicated the trademark will provide net cash flows to the Group within an
uncertain period. The useful life is indefinite as it was hard to predict the period that the
trademark would bring economic benefits to the Group.
18 Goodwill
The initial cost of goodwill represents the excess of cost of acquisition over the acquirer’s
interest in the fair value of the identifiable net assets of the acquiree under a business
combination not involving entities under common control.Goodwill is not amortised and is stated in the balance sheet at cost less accumulated
impairment losses (see Note III.20). On disposal of an asset group or a set of asset groups
any attributable goodwill is written off and included in the calculation of the profit or loss on
disposal.
19 Long-term deferred expenses
Long-term deferred expenses are amortised using a straight-line method within the benefit
period. The respective amortisation periods for such expenses are as follows:
Item Amortisation period
Land requisition fee 50 years
Land lease prepayment 50 years
Greening fee 5 - 20 years
Leasehold improvement 3 - 5 years
Others 3 years
123Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
20 Impairment of assets other than inventories and financial assets
The carrying amounts of the following assets are reviewed at each balance sheet date based
on internal and external sources of information to determine whether there is any indication of
impairment:
- fixed assets
- construction in progress
- right-of-use assets
- intangible assets
- bearer biological assets
- investment properties measured using a cost model
- long-term equity investments
- goodwill
- long-term deferred expenses etc.If any indication exists the recoverable amount of the asset is estimated. In addition the
Group estimates the recoverable amounts of goodwill and intangible assets with infinite useful
lives at each year-end irrespective of whether there is any indication of impairment.Goodwill is allocated to each asset group or set of asset groups that is expected to benefit
from the synergies of the combination for the purpose of impairment testing.The recoverable amount of an asset (or asset group set of asset groups) is the higher of its
fair value (see Note III.21) less costs to sell and its present value of expected future cash
flows.An asset group is composed of assets directly related to cash-generation and is the smallest
identifiable group of assets that generates cash inflows that are largely independent of the
cash inflows from other assets or asset groups.The present value of expected future cash flows of an asset is determined by discounting the
future cash flows estimated to be derived from continuing use of the asset and from its
ultimate disposal to their present value using an appropriate pre-tax discount rate.An impairment loss is recognised in profit or loss when the recoverable amount of an asset is
less than its carrying amount. A provision for impairment of the asset is recognised
accordingly. Impairment losses related to an asset group or a set of asset groups are
allocated first to reduce the carrying amount of any goodwill allocated to the asset group or
set of asset groups and then to reduce the carrying amount of the other assets in the asset
group or set of asset groups on a pro rata basis. However such allocation would not reduce
the carrying amount of an asset below the highest of its fair value less costs to sell (if
measurable) its present value of expected future cash flows (if determinable) and zero.Once an impairment loss is recognised it is not reversed in a subsequent period.
21 Fair value measurement
Unless otherwise specified the Group measures fair value as follows:
Fair value is 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.
124Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
When measuring fair value the Group takes into account the characteristics of the particular
asset or liability (including the condition and location of the asset and restrictions if any on
the sale or use of the asset) that market participants would consider when pricing the asset or
liability at the measurement date and uses valuation techniques that are appropriate in the
circumstances and for which sufficient data and other information are available to measure
fair value. Valuation techniques mainly include the market approach the income approach
and the cost approach.
22 Revenue recognition
Revenue is the gross inflow of economic benefits arising in the course of the Group’s ordinary
activities when the inflows result in increase in shareholders’ equity other than increase
relating to contributions from shareholders.Revenue is recognised when the Group satisfies the performance obligation in the contract by
transferring the control over relevant goods or services to the customers.Where a contract has two or more performance obligations the Group determines the
stand-alone selling price at contract inception of the distinct good or service underlying each
performance obligation in the contract and allocates the transaction price in proportion to
those stand-alone selling prices. The Group recognises as revenue the amount of the
transaction price that is allocated to each performance obligation. The stand-alone selling
price is the price at which the Group would sell a promised good or service separately to a
customer. If a stand-alone selling price is not directly observable the Group considers all
information that is reasonably available to the entity maximises the use of observable inputs
to estimate the stand-alone selling price.For the contract with a warranty the Group analyses the nature of the warranty provided if
the warranty provides the customer with a distinct service in addition to the assurance that the
product complies with agreed-upon specifications the Group recognises for the promised
warranty as a performance obligation. Otherwise the Group accounts for the warranty in
accordance with the requirements of CAS No.13 – Contingencies.The transaction price is the amount of consideration to which the Group expects to be entitled
in exchange for transferring promised goods or services to a customer excluding amounts
collected on behalf of third parties. The Group recognises 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. Where the contract contains a significant financing component the
Group recognises 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
amount of promised consideration and the cash selling price is amortised using an effective
interest method over the contract term. The Group does not adjust the consideration for any
effects of a significant financing component if it expects at contract inception that the period
between when the Group transfers a promised good or service to a customer and when the
customer pays for that good or service will be one year or less.
125Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
The Group satisfies a performance obligation over time if one of the following criteria is met;
or otherwise a performance obligation is satisfied at a point in time:
- the customer simultaneously receives and consumes the benefits provided by the Group’s
performance as the Group performs;
- the customer can control the asset created or enhanced during the Group’s performance;
or
- the Group’s performance does not create an asset with an alternative use to it and the
Group has an enforceable right to payment for performance completed to date.For performance obligation satisfied over time the Group recognises revenue over time by
measuring the progress towards complete satisfaction of that performance obligation. When
the outcome of that performance obligation cannot be measured reasonably but the Group
expects to recover the costs incurred in satisfying the performance obligation the Group
recognises revenue only to the extent of the costs incurred until such time that it can
reasonably measure the outcome of the performance obligation.For performance obligation satisfied at a point in time the Group recognises revenue at the
point in time at which the customer obtains control of relevant goods or services. To
determine whether a customer has obtained control of goods or services the Group considers
the following indicators:
- the Group has a present right to payment for the goods or services;
- the Group has transferred physical possession of the goods to the customer;
- the Group has transferred the legal title of the goods or the significant risks and rewards of
ownership of the goods to the customer; and
- the customer has accepted the goods or services.For the sale of a product with a right of return the Group recognises revenue when the Group
obtains control of that product in the amount of consideration to which the Group expects to
be entitled in exchange for the product transferred (i.e. excluding the amount of which
expected to be returned) and recognises a refund liability for the products expected to be
returned. Meanwhile an asset is recognised in the amount of carrying amount of the product
expected to be returned less any expected costs to recover those products (including
potential decreases in the value of returned products) and carry forward to cost in the amount
of carrying amount of the transferred products less the above costs. At the end of each
reporting period the Group updates its assessment of future sales return. If there is any
change it is accounted for as a change in accounting estimate.A contract asset is the Group’s right to consideration in exchange for goods or services that it
has transferred to a customer when that right is conditional on something other than the
passage of time. The Group recognises loss allowances for expected credit loss on contract
assets (see Note III.9(6)). Accounts receivable is the Group’s right to consideration that is
unconditional (only the passage of time is required). A contract liability is the Group’s
obligation to transfer goods or services to a customer for which the Group has received
consideration (or an amount of consideration is due) from the customer.The following is the description of accounting policies regarding revenue from the Group’s
principal activities:
The Group's sales revenue is mainly derived from dealer sales. Revenue is recognised
when the Group transfers control of the related products to the customer. Based on the
business contract the Group recognised the sales revenue of these transfers when the
product is confirmed and signed for acceptance by the customers.
126Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
23 Contract costs
Contract costs are either the incremental costs of obtaining a contract with a customer or the
costs to fulfil a contract with a customer.Incremental costs of obtaining a contract are those costs that the Group incurs to obtain a
contract with a customer that it would not have incurred if the contract had not been obtained
e.g. an incremental sales commission. The Group recognises as an asset the incremental
costs of obtaining a contract with a customer if it expects to recover those costs. Other costs
of obtaining a contract are expensed when incurred.If the costs to fulfil a contract with a customer are not within the scope of inventories or other
accounting standards the Group recognises an asset from the costs incurred to fulfil a
contract only if those costs meet all of the following criteria:
- the costs relate directly to an existing contract or to a specifically identifiable anticipated
contract including direct labour direct materials allocations of overheads (or similar
costs) costs that are explicitly chargeable to the customer and other costs that are
incurred only because the Group entered into the contract
- the costs generate or enhance resources of the Group that will be used in satisfying (or in
continuing to satisfy) performance obligations in the future; and
- the costs are expected to be recovered.Assets recognised for the incremental costs of obtaining a contract and assets recognised for
the costs to fulfil a contract (the “assets related to contract costs”) are amortised on a
systematic basis that is consistent with the transfer to the customer of the goods or services to
which the assets relate and recognised in profit or loss for the current period. The Group
recognises the incremental costs of obtaining a contract as an expense when incurred if the
amortisation period of the asset that the entity otherwise would have recognised is one year or
less.The Group recognises an impairment loss in profit or loss to the extent that the carrying
amount of an asset related to contract costs exceeds:
- remaining amount of consideration that the Group expects to receive in exchange for the
goods or services to which the asset relates; less
- the costs that relate directly to providing those goods or services that have not yet been
recognised as expenses.
24 Employee benefits
(1) Short-term employee benefits
Employee wages or salaries bonuses social security contributions such as medical
insurance work injury insurance maternity insurance and housing fund measured at the
amount incurred or accured at the applicable benchmarks and rates are recognised as a
liability as the employee provides services with a corresponding charge to profit or loss or
included in the cost of assets where appropriate.
127Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
(2) Post-employment benefits – defined contribution plans
Pursuant to the relevant laws and regulations of the People’s Republic of China the Group
participated in a defined contribution basic pension insurance plan in the social insurance
system established and managed by government organisations. The Group makes
contributions to basic pension insurance plans based on the applicable benchmarks and rates
stipulated by the government. Basic pension insurance contributions payable are
recognised as a liability as the employee provides services with a corresponding charge to
profit or loss or included in the cost of assets where appropriate.
(3) Termination benefits
When the Group terminates the employment with employees before the employment
contracts expire or provides compensation under an offer to encourage employees to accept
voluntary redundancy a provision is recognised with a corresponding expense in profit or loss
at the earlier of the following dates:
- When the Group cannot unilaterally withdraw the offer of termination benefits because of
an employee termination plan or a curtailment proposal;
- When the Group has a formal detailed restructuring plan involving the payment of
termination benefits and has raised a valid expectation in those affected that it will carry out
the restructuring by starting to implement that plan or announcing its main features to those
affected by it.
25 Government grants
Government grants are non-reciprocal transfers of monetary or non-monetary assets from the
government to the Group except for capital contributions from the government in the capacity
as an investor in the Group.A government grant is recognised when there is reasonable assurance that the grant will be
received and that the Group will comply with the conditions attaching to the grant.If a government grant is in the form of a transfer of a monetary asset it is measured at the
amount received or receivable. If a government grant is in the form of a transfer of a
non-monetary asset it is measured at fair value.Government grants related to assets are grants whose primary condition is that the Group
qualifying for them should purchase construct or otherwise acquire long-term assets.Government grants related to income are grants other than those related to assets. A
government grant related to an asset is recognised as deferred income and amortised over
the useful life of the related asset on a reasonable and systematic manner as other income or
non-operating income. A grant that compensates the Company for expenses or losses to be
incurred in the future is recognised as deferred income and included in other income or
non-operating income in the periods in which the expenses or losses are recognised. Or
included in other income or non-operating income directly.
26 Income tax
Current tax and deferred tax are recognised in profit or loss except to the extent that they
relate to a business combination or items recognised directly in equity (including other
comprehensive income).
128Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Current tax is the expected tax payable calculated at the applicable tax rate on taxable
income for the year plus any adjustment to tax payable in respect of previous years.At the balance sheet date current tax assets and liabilities are offset only if the Group has a
legally enforceable right to set them off and also intends either to settle on a net basis or to
realise the asset and settle the liability simultaneously.Deferred tax assets and deferred tax liabilities arise from deductible and taxable temporary
differences respectively being the differences between the carrying amounts of assets and
liabilities for financial reporting purposes and their tax bases which include the deductible
losses and tax credits carried forward to subsequent periods. Deferred tax assets are
recognised to the extent that it is probable that future taxable profits will be available against
which deductible temporary differences can be utilised.Deferred tax is not recognised for the temporary differences arising from the initial recognition
of assets or liabilities in a transaction that is not a business combination and that affects
neither accounting profit nor taxable profit (or deductible loss). Deferred tax is not
recognised for taxable temporary differences arising from the initial recognition of goodwill.At the balance sheet date deferred tax is measured based on the tax consequences that
would follow from the expected manner of recovery or settlement of the carrying amounts of
the assets and liabilities using tax rates enacted at the balance sheet date that are expected
to be applied in the period when the asset is recovered or the liability is settled.The carrying amount of a deferred tax asset is reviewed at each balance sheet date and is
reduced to the extent that it is no longer probable that the related tax benefits will be utilised.Such reduction is reversed to the extent that it becomes probable that sufficient taxable profits
will be available.At the balance sheet date deferred tax assets and deferred tax liabilities are offset if all of the
following conditions are met:
- the taxable entity has a legally enforceable right to offset current tax liabilities and current
tax assets;
- they relate to income taxes levied by the same tax authority on either:
- the same taxable entity; or
- different taxable entities which intend either to settle the current tax liabilities and current
tax 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 deferred
tax assets are expected to be settled or recovered.
27 Leases
A contract is lease if the lessor conveys the right to control the use of an identified asset to
lessee for a period of time in exchange for consideration.At inception of a contract the Group assesses whether a contract is or contains a lease. A
contract is or contains a lease if the contract conveys the right to control the use of an
identified asset for a period of time in exchange for consideration.
129Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
To assess whether a contract conveys the right to control the use of an identified asset the
Group assesses whether:
- the contract involves the use of an identified asset. An identified asset may be specified
explicitly or implicitly speicied in a contrat and should be physically distinct or capacity
portion or other portion of an asset that is not physically distinct but it represents
substantially all of the capacity of the asset and thereby provides the customer with the
right to obtain substantially all of the ecomonic benefits from the use of the asset. If the
supplier has a substantive substitution right throughout the period of use then the asset is
not identified;
- the lessee has the right to obtain substantially all of the economic benefits from use of the
asset throughout the period of use;
- the lessee has the right to direct the use of the asset.For a contract that contains more separate lease componets the lessee and the lessor
separate lease components and account for each lease component as a lease separately. For
a contract that contains lease and non-lease components the lessee and the lessor separate
lease components from non-lease components. For a contract that contains lease and
non-lease components the lessee allocates the consideration in the contract to each lease
component on the basis of the relative stand-alone price of the lease component and the
aggregate stand-alone price of the non-lease components. The lessor allocates the
consideration in the contract in accordance with the accounting policy in Note III.22.
(1) As a lessee
The Group recognises a right-of-use asset and a lease liability at the lease commencement
date. The right-of-use asset is initially measured at cost which comprises the initial amount of
the lease liability any lease payments made at or before the commencement date (less any
lease incentives received) any initial direct costs incurred and an estimate of costs to
dismantle and remove the underlying asset or to restore the site on which it is located or
restore the underlying asset to the condition required by the terms and conditions of the lease.The right-of-use asset is depreciated using the straight-line method. If the lessee is
reasonably certain to exercise a purchase option by the end of the lease term the right-of-use
asset is depreciated over the remaining useful lives of the underlying asset. Otherwise the
right-of-use asset is depreciated 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. Impairment losses of
right-of-use assets are accounted for in accordance with the accounting policy described in
Note III.20.The lease liability is initially measured at the present value of the lease payments that are not
paid at the commencement date discounted using the interest rate implicit in the lease or if
that rate cannot be readily determined the Group’s incremental borrowing rate.A constant periodic rate is used to calculate the interest on the lease liability in each period
during the lease term with a corresponding charge to profit or loss or included in the cost of
assets where appropriate. Variable lease payments not included in the measurement of the
lease liability is charged to profit or loss or included in the cost of assets where appropriate as
incurred.
130Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Under the following circumstances after the commencement date the Group remeasures
lease liabilities based on the present value of revised lease payments:
- there is a change in the amounts expected to be payable under a residual value guarantee;
- there is a change in future lease payments resulting from a change in an index or a rate
used to determine those payments;
- there is a change in the assessment of whether the Group will exercise a purchase
extension or termination option or there is a change in the exercise of the extension or
termination option.When the lease liability is remeasured a corresponding adjustment is made to the carrying
amount of the right-of-use asset or is recorded in profit or loss if the carrying amount of the
right-of-use asset has been reduced to zero.The Group has elected not to recognise right-of-use assets and lease liabilities for short-term
leases that have a lease term of 12 months or less and leases of low-value assets. The Group
recognises the lease payments associated with these leases in profit or loss or as the cost of
the assets where appropriate using the straight-line method over the lease term.
(2) As a lessor
The Group determines at lease inception whether each lease is a finance lease or an
operating lease. A lease is classified as a finance lease if it transfers substantially all the risks
and rewards incidental to ownership of an underlying asset irrespective of whether the legal
title to the asset is eventually transferred. An operating lease is a lease other than a finance
lease.When the Group is a sub-lessor it assesses the lease classification of a sub-lease with
reference to the right-of-use asset arising from the head lease not with reference to the
underlying asset. If a head lease is a short-term lease to which the Group applies practical
expedient described above then it classifies the sub-lease as an operating lease.Under a finance lease at the commencement date the Group recognises the finance lease
receivable and derecognises the finance lease asset. The finance lease receivable is initially
measured at an amount equal to the net investment in the lease. The net investment in the
lease is measured at the aggregate of the unguaranteed residual value and the present value
of the lease receivable that are not received at the commencement date discounted using the
interest rate implicit in the lease.The Group recognises finance income over the lease term based on a pattern reflecting a
constant periodic rate of return. The derecognition and impairment of the finance lease
receivable are recognised in accordance with the accounting policy in Note III.9. Variable
lease payments not included in the measurement of net investment in the lease are
recognised as income as they are earned.Lease receipts from operating leases is recognised as income using the straight-line method
over the lease term. The initial direct costs incurred in respect of the operating lease are
initially capitalised and subsequently amortised in profit or loss over the lease term on the
same basis as the lease income. Variable lease payments not included in lease receipts are
recognised as income as they are earned.
131Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
28 Assets held for sale
The Group classified a non-current asset or disposal group as held for sale when the carrying
amount of a non-current asset or disposal group will be recovered through a sale transaction
rather than through continuing use.A disposal group refers to a group of assets to be disposed of by sale or otherwise together
as a whole in a single transaction and liabilities directly associated with those assets that will
be transferred in the transaction.A non-current asset or disposal group is classified as held for sale when all the following
criteria are met:
- According to the customary practices of selling such asset or disposal group in similar
transactions the non-current asset or disposal group must be available for immediate sale
in their present condition subject to terms that are usual and customary for sales of such
assets or disposal groups;
- Its sale is highly probable that is the Group has made a resolution on a sale plan and has
obtained a firm purchase commitment. The sale is to be completed within one year.Non-current assets or disposal groups held for sale are stated at the lower of carrying amount
and fair value (see Note III.21) less costs to sell (except financial assets (see Note III.9)
deferred tax assets (see Note III.26) and investment properties subsequent measured at fair
value (see Note III. 12) initially and subsequently. Any excess of the carrying amount over
the fair value (see Note III.21) less costs to sell is recognised as an impairment loss in profit or
loss.
29 Profit distributions
Dividends or profit distributions proposed in the profit appropriation plan which will be
approved after the balance sheet date are not recognised as a liability at the balance sheet
date but are disclosed in the notes separately.
30 Related parties
If a party has the power to control jointly control or exercise significant influence over another
party or vice versa or where two or more parties are subject to common control or joint
control from another party they are considered to be related parties. Related parties may be
individuals or enterprises. Enterprises with which the Company is under common control
only from the State and that have no other related party relationships are not regarded as
related parties.In addition to the related parties stated above the Company determines related parties based
on the disclosure requirements of Administrative Procedures on the Information Disclosures
of Listed Companies issued by the CSRC.
132Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
31 Segment reporting
The Group is principally engaged in the production and sales of wine brandy and sparkling
wine in China France Spain Chile and Australia. In accordance with the Group's internal
organisation structure management requirements and internal reporting system the Group's
operation is divided into five parts: China Spain France Chile and Australia. The
management periodically evaluates segment results in order to allocate resources and
evaluate performances. In 2021 over 87% of revenue more than 94% of profit and over
92% of non-current assets derived from China/are located in China. Therefore the Group
does not need to disclose additional segment report information.
32 Significant accounting estimates and judgements
The preparation of the financial statements requires management to make estimates and
assumptions that affect the application of accounting policies and the reported amounts of
assets liabilities income and expenses. Actual results may differ from these estimates.Estimates as well as underlying assumptions and uncertainties involved are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in the period in which the
estimate is revised and in any future periods affected.
(1) Significant accounting estimates
Except for accounting estimates relating to depreciation and amortisation of assets such as
investment properties fixed assets bearer biological assets and intangible assets (see Notes
III. 13 and 16) and provision for impairment of various types of assets (see Notes V.3 7 11
15 and 16). Other significant accounting estimates are as follows:
(i) Note V. 18 - Recognition of deferred tax asset;
(ii) Note VIII. - Fair value measurements of financial instruments.
33 Changes in significant accounting policies and accounting estimates
(1) Description and reasons of changes in accounting policies
In 2021 the Group has adopted the following newly revised accounting standards and
implementation guidance and illustrative examples issued by the MOF:
- CAS No.21 - Lease (Revised) (Caikuai [2018] No.35) (“the new leases standard”)
- The Accounting Treatment of COVID-19-Related Rent Concessions (Caikuai [2020]
No.10) and Notice of Extending the Applicable Period of ‘Accounting Treatment of
COVID-19 Related Rent Concessions’ (Caikuai [2021] No.9)
- CAS Bulletin No.14 (Caikuai [2021] No.1) (“Bulletin No. 14”)
(a) New leases standard
New leases standard has revised CAS No.21 - Leases issued by the MOF in 2006
(“previous leases standard”). The Group has applied new leases standard since 1
January 2021 and has adjusted the related accounting policies.New leases standard refines the definition of a lease. The Group assesses whether a
contract is or contains a lease in accordance with the definition in new leases standard.For contracts which existed before the date of initial application the Group has elected
not to reassess whether a contract is or contains a lease at the date of initial application.
133Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
As a lessee
Under previous leases standard the Group classifies leases as operating or finance
leases based on its assessment of whether the lease transfers significantly all of the risks
and rewards incidental to ownership of the underlying asset to the Group.Under new leases standard the Group no longer distinguishes between operating
leases and finance leases. The Group recognises right-of-use assets and lease
liabilities for all leases (except for short-term leases and leases of low-value assets
which are accounted for using the practical expedient).For a contract that contains lease and non-lease components the Group allocates
the consideration in the contract to each lease component on the basis of the relative
stand-alone price of the lease component and the aggregate stand-alone price of the
non-lease components.The Group has elected to recognise the cumulative effect of adopting new leases
standard as an adjustment to the opening balances of retained earnings and other
related items in the financial statements in the initial year of application. Comparative
information has not been restated.For leases classified as operating leases before the date of initial application lease
liabilities were measured at the present value of the remaining lease payments
discounted using the Group’s incremental borrowing rate at the date of initial
application. Right-of-use assets are measured at either:
- their carrying amount as if new leases standard had been applied since the
commencement date discounted using the Group’s incremental borrowing rate at
the date of initial application; or
The Group uses the following practical expedients to account for leases classified as
operating leases before the date of initial application:
- accounted for the leases for which the lease term ends within 12 months of the
date of initial application as short-term leases;
- applied a single discount rate to leases with similar characteristics when
measuring lease liabilities;
- excluded initial direct costs from measuring the right-of-use assets;
- determined the lease term according to the actual implementation or other
updates of options before the date of initial application if the contract contains
options to extend or terminate the lease;
- As an alternative to the impairment test of the right-of-use assets the right-of-use
assets shall be adjusted according to the amount of loss provision from onerous
contracts included in the balance sheet in accordance with Accounting Standards
for Business Enterprises No. 13 - Contingencies before the date of initial
application;
- No retrospective adjustment shall be made to the lease changes that occurred
before the beginning of the year when the new leases standard is initially applied
and instead the new leases standard shall be applicable for the accounting
treatment based on the final arrangement of the lease changes.
134Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
For leases classified as finance leases before the date of initial application the
right-of-use asset and the lease liability are measured at the original carrying amount
of the assets under finance lease and obligations under finance leases at the date of
initial application.As a lessor
The Group is not required to make any adjustments to the opening balances of
retained earnings and other related items in the financial statements in the initial year
of application and surplus for leases for which it acts as a lessor. The Group has
applied new leases standard since the date of initial application.Effect of the application of new leases standard since 1 January 2021 on financial
statements
When measuring lease liabilities the Group discounted lease payments using its
incremental borrowing rate at 1 January 2021. The weighted-average rate applied by
the Group and the Company is 4.65%.The impact of the adoption of the new leases standard on the consolidated and
company balance sheets as at 1 January 2021 are summarised as follows:
The Group
31 December 2020 1 January 2021 The amounts ofadjustments
Assets
Non-current assets:
Right-of-use assets - 130293427 130293427
Long-term deferred
expenses 314465855 273547599 (40918256)
Deferred tax assets 206241275 207199400 958125
Total non-current assets 520707130 611040426 90333296
Total assets 520707130 611040426 90333296
The Group
31 December 2020 1 January 2021 The amounts ofadjustments
Liabilities and shareholders’
equity
Current liabilities:
Accounts payable 484347958 479305382 (5042576)
Non-current liabilities due
within one year 133311890 140629742 7317852
Total current liabilities 617659848 619935124 2275276
Non-current liabilities:
Lease liabilities - 98401900 98401900
Deferred tax liabilities 12022613 12260894 238281
Total non-current liabilities 12022613 110662794 98640181
Total liabilities 629682461 730597918 100915457
Shareholders’ equity:
Retained earnings 8714091755 8703509594 (10582161)
Total equity attributable to
shareholders of the 8714091755 8703509594 (10582161)
Company
Total owners’ equity 8714091755 8703509594 (10582161)
Total liabilities and
shareholders’ equity 9343774216 9434107512 90333296
135Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
The Company
31 December 2020 1 January 2021 The amounts ofadjustments
Assets
Non-current assets:
Right-of-use assets - 39589486 39589486
Total non-current assets - 39589486 39589486
Total assets - 39589486 39589486
Liabilities and shareholders’
equity
Current liabilities:
Non-current liabilities due
within one year - 2048380 2048380
Total current liabilities - 2048380 2048380
Non-current liabilities:
Lease liabilities - 44072819 44072819
Deferred tax liabilities - 88555 88555
Total non-current liabilities - 44161374 44161374
Total liabilities - 46209754 46209754
Shareholders’ equity:
Retained earnings 8567313551 8560693283 (6620268)
Total equity attributable to
shareholders of the 8567313551 8560693283 (6620268)
Company
Total owners’ equity 8567313551 8560693283 (6620268)
Total liabilities and
shareholders’ equity 8567313551 8606903037 39589486
(b) Caikuai [2020] No.10 and Caikuai [2021] No.9
The Accounting Treatment of COVID-19 Related Rent Concessions (Caikuai [2020]
No.10) provides practical expedient under certain conditions for rent concessions
occurring as a direct consequence of the COVID-19 pandemic. If the company chooses
to adopt the practical expedient then there is no need to assess whether there is a
lease change or reassess the lease classification. In combination of the requirements of
Caikuai [2021] No.9 such practical expedient is only applicable to any reduction in
lease payments due before 30 June 2022. Cumulative effects of adopting the above
regulations are adjusted to the opening retained earnings or other comprehensive
income for the year 2021. Comparative information is not restated.The adoption of the above regulations does not have significant effect on the financial
position and financial performance of the Group.(c) Bulletin No.14
Bulletin No.14 takes effect on 26 January 2021 (implementation date).(i) “Public-private partnership” (PPP) arrangements
Bulletin No.14 and the Q&A and practical examples for accounting treatment of
PPP project contract social capital clarifies the features and conditions of PPP
arrangements sets out the accounting and disclosure requirements of a private
entity in PPP arrangements. Item 5 of CAS Bulletin No.2 (Caikuai [2008] No.11)on “How to account for entities participating in public infrastructure constructionbusinesses under build-operate-transfer arrangement” is repealed accordingly.
136Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
PPP arrangements which are commenced before 31 December 2020 and not
completed on the implementation date and new PPP arrangements occurred
during 1 January 2021 to the implementation date are subject to retrospective
adjustments. Cumulative effects are adjusted to the opening retained earnings
and other relevant line items in the financial statements for the year 2021.Comparative information is not restated.The adoption of Bulletin No.14 does not have significant effect on the financial
position and financial performance of the Group.(ii) Benchmark interest rate reform
Bulletin No.14 introduces the accounting and disclosure requirements for the
modification of financial instruments and lease liabilities resulting from the
benchmark interest rate reform. Transactions related to the benchmark interest
rate reform that occurred before 31 December 2020 and during 1 January 2021 to
the implementation date are subject to retrospective adjustments. Cumulative
effects are adjusted to the opening retained earnings or other comprehensive
income for the year 2021. Comparative information is not restated.The adoption of Bulletin No.14 does not have significant effect on the financial position
and financial performance of the Group.IV. Taxation
1 Main types of taxes and corresponding tax rates
Output VAT is calculated on
product sales and taxable
Value-added tax services revenue. The 13% 9% 6% (China) 20% (France)
(VAT) basis for VAT payable is to 21% (Spain) 19% (Chile) and 10%
deduct input VAT from the (Australia)
output VAT for the period
Consumption tax Based on taxable revenue 10% of the price 20% of the price andRMB1000 each ton (China)
Urban maintenance
and construction Based on VAT paid 7% (China)
tax
Corporate income 25% (China) 26.5% (France 2021)
tax Based on taxable profits 28% (France 2020) 28% (Spain)27% (Chile) 30% (Australia)
Other than tax incentives stated in Note IV. 2 applicable tax rates of the Group in 2021 and
2020 are all stated as above.
137Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
2 Tax preferential treatments
Ningxia Changyu Grape Growing Co. Ltd. (“Ningxia Growing”) a subsidiary of the Group
whose principal activity is grape growing is incorporated in Ningxia Huizu Autonomous
Region. According to clause 27 of the Corporate Income Tax Law of the People’s Republic
of China and clause 86 of the Implementation Rules of Enterprise Income Tax Law of the
People’s Republic of China Ningxia Growing enjoys an exemption of corporate income tax.Yantai Changyu Grape Growing Co. Ltd. (“Grape Growing”) a branch of the Company
whose principal activity is grape growing is incorporated in Zhifu District Yantai City
Shandong Province. According to clause 27 of the Corporate Income Tax Law of the
People’s Republic of China and clause 86 of the Implementation Rules of Enterprise Income
Tax Law of the People’s Republic of China Grape Growing enjoys an exemption of corporate
income tax.Yantai Changyu Wine Research & Development Centre Co. Ltd. (“R&D Centre”) a branch of
the Company is an enterprise engaged in grape growing in the Economic and Technological
Development Zone of Yantai City Shandong Province. Pursuant to Article 27 of the
Enterprise Income Tax Law of the People’s Republic of China and Article 86 of the
Implementation Regulations of the Enterprise Income Tax Law of the People’s Republic of
China R&D Centre enjoys the preferential policy of exemption of enterprise income tax on
income from grape growing.Beijing Changyu AFIP Agriculture Development Co. Ltd (“Agriculture Development”) a
subsidiary of the Group whose principal activity is grape growing is incorporated in Miyun
Beijing. According to clause 27 of the Corporate Income Tax Law of the People’s Republic
of China and clause 86 of the Implementation Rules of Enterprise Income Tax Law of the
People’s Republic of China Agriculture Development enjoys an exemption of corporate
income tax.Xinjiang Tianzhu Wine Co. Ltd. (“Xinjiang Tianzhu”) a subsidiary of the Company is an
enterprise of wine production and sales incorporated in Shihezi city Xinjiang Weizu
Autonomous. In accordance with relevant provisions of the Announcement on Continuation
of CIT Policies for Large-scale Development in the Western Region (Announcement [2020]
No.23 of the Ministry of Finance) Ningxia Chateau Changyu Moser is entitled to preferential
tax policies. Therefore during the period from 1 January 2021 to 31 December 2030 its
corporate income tax shall be levied at a reduced tax rate of 15%.Xinjiang Chateau Changyu Baron Balboa Co. Ltd. (“Chateau Shihezi”) a subsidiary of the
Company is an enterprise of wine production and sales incorporated in Shihezi city Xinjiang
Weizu Autonomous. In accordance with relevant provisions of the Announcement on
Continuation of CIT Policies for Large-scale Development in the Western Region
(Announcement [2020] No.23 of the Ministry of Finance) Ningxia Chateau Changyu Moser is
entitled to preferential tax policies. Therefore during the period from 1 January 2021 to 31
December 2030 its corporate income tax shall be levied at a reduced tax rate of 15%.
138Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Ningxia Chateau Changyu Moser XV Co. Ltd. (“Chateau Ningxia”) a subsidiary of the
Company is an enterprise engaged in wine production and sales incorporated in Shihezi
City Xinjiang Uygur Autonomous Region. In accordance with relevant provisions of the
Announcement on Continuation of CIT Policies for Large-scale Development in the Western
Region (Announcement [2020] No.23 of the Ministry of Finance) Ningxia Chateau Changyu
Moser is entitled to preferential tax policies. Therefore during the period from 1 January 2021
to 31 December 2030 its corporate income tax shall be levied at a reduced tax rate of 15%.Changyu (Ningxia) Wine Co. Ltd. (“Ningxia Wine”) a subsidiary of the Company is an
enterprise engaged in wine production and sales incorporated in Shihezi City Xinjiang Uygur
Autonomous Region. In accordance with relevant provisions of the Announcement on
Continuation of CIT Policies for Large-scale Development in the Western Region
(Announcement [2020] No.23 of the Ministry of Finance) Changyu (Ningxia) Wine is entitled
to preferential tax policies. Therefore during the period from 1 January 2021 to 31 December
2030 its corporate income tax shall be levied at a reduced tax rate of 15%.
Pursuant to the Announcement on Tax Policies to Support Prevention and Control of
Covid-19 Pandemic (Announcement [2020] No.8 of the Ministry of Finance and the State
Administration of Taxation) from 1 January 2020 income derived by taxpayers from provision
of public transportation services and living services as well as express delivery services
involving residents' necessities shall be exempted from VAT. Furthermore according to the
Announcement on Continued Implementation of Some Preferential Tax/Fee Policies for
Responding to the COVID-19 Pandemic (Announcement [2021] No. 7 of the Ministry of
Finance and the State Administration of Taxation) the above tax preferential tax policy is
extended to 31 March 2021. The Company has certain subsidiaries such as Yantai
Zhangyu Wine Culture Museum Co. Ltd. ("the Museum") which provides catering
accommodation tourism and other living services so the income obtained from the provision
of such living services shall be exempted from VAT from 1 January 2020 to 31 March 2021.Xinjiang Changyu Sales Co. Ltd. Vermouth Tasting Centre Branch (“Xinjiang VermouthTasting Centre”) a subsidiary of the Company is an enterprise engaged in large-scale
restaurant services located in Shihezi City Xinjiang Uygur Autonomous Region. According to
the Announcement on Value-added Tax Policies for Supporting Individual Businesses in
Resumption of Business (Announcement [2020] No.13 of the Ministry of Finance and the
State Taxation Administration) and the Announcement on Continued Implementation of Some
Preferential Tax/Fee Policies for Responding to the COVID-19 Pandemic (Announcement
[2021] No. 7 of the Ministry of Finance State Taxation Administration) Xinjiang Vermouth
Tasting Centre qualified as a small-scale VAT taxpayer is entitled to pay VAT at the
reduced levy rate of 1% for the year ended 31 December 2021.Based on the Notice of the Department of Finance of Shaanxi Province and the Shaanxi
Provincial Taxation Bureau under the State Taxation Administration on Matters Concerning
the Relief and Exemption of Urban Land Use Tax and Real Estate Tax in Fighting the
Epidemic (Shaan Cai Shui [2020] No.4) the Department of Finance and the Taxation Bureau
shall approve the application for tax relief and exemption submitted by taxpayers who have
difficulties to pay urban land use tax and real estate tax owing to the suspension of production
and business for more than 30 days (inclusive) arising from the epidemic. Shaanxi Chateau
Changyu Rena Co. Ltd. and Changyu (Jingyang) Wine Co. Ltd. two subsidiaries of the
Company meet the application requirements and will be exempted from real estate tax and
urban land use tax in the first quarter of 2020.
139Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Pursuant to the Notice of the Taxation Bureau in Ningxia Hui Autonomous Region under the
State Taxation Administration and the Department of Finance in Ningxia Hui Autonomous
Region on Implementing the Policies of Real Estate Tax and Urban Land Use Tax by the
People’s Government in Autonomous Region in response to the impact from Covid-19
Epidemic (Ning Shui Han [2020] No.19) the Taxation Bureau shall approve the application for
tax relief submitted by enterprises that have difficulties to pay real estate tax and urban land
use tax owing to the epidemic. Shaanxi Chateau Changyu Rena Co. Ltd. and Changyu
(Ningxia) Wine Co. Ltd. two subsidiaries of the Company meet the application requirements
and will be exempted from real estate tax and urban land use tax for five months in 2020.V. Notes to the consolidated financial statements
1 Cash at bank and on hand
Item 2021 2020
Cash on hand 71486 19637
Bank deposits 1558134072 1128882937
Other monetary funds 8890435 65312355
Total 1567095993 1194214929
Including: Total overseas deposits 28691521 47674019
As at 31 December 2021 the balance of restricted cash of the Group is as follows:
Item 2021 2020
House maintenance funds 2678529 2684407
As at 31 December 2021 the Group’s term deposits with previous maturity of more than three
months is RMB53200000 with interest rate 1.75% - 2.25% (31 December 2020:
RMB73553062).As at 31 December 2021 the Group’s other monetary assets is as follows:
Item 2021 2020
Yantai Changyu Pioneer Wine Company LimitedResearch and Development Co. Ltd. (“R&D - 20000000Centre”) pledged deposit for long-term payables
Deposits for letters of credit 7900850 44540850
Alipay account balance 859558 761505
Deposit for ICBC platform 10000 10000
Deposits for the customs 120027 -
Total 8890435 65312355
As at 31 December 2021 the Group did not have any special interest arrangements such as
the establishment of joint fund management accounts with related parties.
140Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
2 Bills receivable
Classification of bills receivable
Item 2021 2020
Bank acceptance bills 42827666 -
Total 42827666 -
All of the above bills are due within one year.
3 Accounts receivable
(1) Accounts receivable by customer type are as follows:
Type 31 December 2021 31 December 2020
Amounts due from related parties 287788 2268311
Amounts due from other customers 310982372 193911657
Sub-total 311270160 196179968
Less: Provision for bad and doubtful debts (20263750) (12326606)
Total 291006410 183853362
As at 31 December 2021 ownership restricted accounts receivable is RMB49061015 (31
December 2020: RMB28557991) referring to Note V. 52.
(2) The ageing analysis of accounts receivable is as follows:
Ageing 2021 2020
Within 1 year (inclusive) 302602474 190047491
Over 1 year but within 2 years (inclusive) 6450290 5581750
Over 2 years but within 3 years (inclusive) 1830913 366053
Over 3 years 386483 184674
Sub-total 311270160 196179968
Less: Provision for bad and doubtful debts (20263750) (12326606)
Total 291006410 183853362
The ageing is counted starting from the date when accounts receivable are recognised.
(3) Accounts receivable by provisioning method
At all times the Group measures the impairment loss for accounts receivable at an amount
equal to lifetime ECLs and the ECLs are based on the number of overdue days and the loss
given default. According to the historical experience of the Group there are no significant
differences in the losses of different customer groups. Therefore different customer groups
are not further distinguished when calculating impairment loss based on the overdue
information.
141Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
2021
Loss given default Carrying amount at Impairment loss atthe end of the year the end of the year
Current 0.4% 266055047 951403
Overdue for 1 to 30 days 3.3% 13013133 434869
Overdue for 31 to 60 days 10.9% 8115584 886023
Overdue for 61 to 90 days 23.9% 2554438 610844
Overdue for 91 to 120 days 28.9% 531696 153780
Overdue for 121 to 150 days 40.0% 627641 251314
Overdue for 151 to 180 days 41.8% 1670068 698131
Overdue for 181 to 210 days 50.0% 1129949 565460
Overdue for 211 to 240 days 65.6% 1415345 928263
Overdue for 241 to 270 days 65.7% 3439721 2261159
Overdue for 271 to 300 days 85.4% 1340055 1145021
Overdue for 301 to 330 days 100.0% 638848 638848
Overdue for 331 to 360 days 100.0% 244178 244178
Overdue for 360 days 100.0% 10494457 10494457
Total 6.5% 311270160 20263750
2020
Loss given default Carrying amount at Impairment loss atthe end of the year the end of the year
Current 0.4% 146425314 650298
Overdue for 1 to 30 days 3.4% 14631174 495839
Overdue for 31 to 60 days 6.4% 6678504 424266
Overdue for 61 to 90 days 10.3% 5582357 574675
Overdue for 91 to 120 days 12.9% 2054400 265530
Overdue for 121 to 150 days 15.6% 2769171 431319
Overdue for 151 to 180 days 21.7% 3970361 859903
Overdue for 181 to 210 days 30.3% 1417385 429287
Overdue for 211 to 240 days 32.0% 5413890 1731246
Overdue for 241 to 270 days 35.7% 993299 354988
Overdue for 271 to 300 days 54.6% 111636 60963
Overdue for 301 to 330 days 88.7% 748270 664085
Overdue for 331 to 360 days 100.0% 323563 323563
Overdue for 360 days 100.0% 5060644 5060644
Total 6.3% 196179968 12326606
The loss given default is measured based on the actual credit loss experience in the past 12
months and is adjusted taking into consideration the differences among the economic
conditions during the historical data collection period the current economic conditions and the
economic conditions during the expected lifetime.
142Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
(4) Movements of provisions for bad and doubtful debts:
20212020
Balance at the beginning of the year after
adjustment (12326606) (16674915)
Charge for the year (17855222) (11591483)
Recoveries or reversals during the year 9918078 15939792
Balance at the end of the year (20263750) (12326606)
(5) Five largest accounts receivable by debtor at the end of the year:
Ending balance
Name Relationship with Balance at the
Percentage of of provision for
the Group end of the year Ageing ending balanceof others (%) bad and doubtfuldebts
Debtor One Third party 101943773 Within 1 year 32.8% 364547
Debtor Two Third party 8935591 Within 1 year 2.9% 162166
Debtor Three Third party 8589195 Within 1 year 2.8% 2381463
Debtor Four Third party 7028678 Within 1 year 2.3% 148535
Debtor Five Third party 6161123 Over 1 year butwithin 2 years 2.0% 6082785
Total 132658360 42.8% 9139496
4 Receivables under financing
Item Note 2021 2020
Bills receivable (1) 364457497 338090187
(1) The pledged bills receivable of the Group at the end of the year:
As at 31 December 2021 there was no pledged bills receivable (31 December 2020: Nil).
(2) Outstanding derecognised endorsed bills that have not matured at the end of the year:
Amount
Item derecognised at
year end
Bank acceptance bills 449373119
Total 449373119
As at 31 December 2021 derecognised bills endorsed by the Group to other parties which are
not yet due at the end of the period is RMB449373119 (31 December 2020:
RMB260721441). The notes are used for payment to suppliers and constructions. The
Group believes that due to good reputation of bank the risk of notes not accepting by bank on
maturity is very low therefore derecognise the note receivables endorsed. If the bank is
unable to pay the notes on maturity according to the relevant laws and regulations of China
the Group would undertake limited liability for the notes.
143Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
5 Prepayments
(1) Prepayments by category:
Item 2021 2020
Prepayments 75235879 71296416
Total 75235879 71296416
(2) The ageing analysis of prepayments is as follows:
20212020
Ageing Amount Percentage Amount Percentage(%) (%)
Within 1 year (inclusive) 75207094 99.9% 70977636 99.6%
Over 1 year but within 2 years
(inclusive) 28785 0.1% 318780 0.4%
Total 75235879 100.0% 71296416 100.0%
The ageing is counted starting from the date when prepayments are recognised.
(3) Five largest prepayments by debtor at the end of the year:
Ending balance
Name Nature of the Balance at the
Percentage of
Ageing ending balance of provision forreceivable end of the year of others (%) bad and doubtfuldebts
Debtor One Prepayments 27057504 Within 1 year 36.0% -
Debtor Two Prepayments 23934593 Within 1 year 31.8% -
Debtor Three Prepayments 5813616 Within 1 year 7.7% -
Debtor Four Prepayments 2311027 Within 1 year 3.1% -
Debtor Five Prepayments 1743620 Within 1 year 2.3% -
Total 60860360 80.9% -
6 Other receivables
31 December 2021 31 December 2020
Others 30125270 22428956
Total 30125270 22428956
144Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
(1) Interest receivable
(a) Others by customer type:
Customer type 31 December 2021 31 December 2020
Amounts due from related parties 341880 522936
Amounts due from other companies 29783390 21906020
Sub-total 30125270 22428956
Less: Provision for bad and doubtful debts - -
Total 30125270 22428956
(b) The ageing analysis is as follows:
Ageing 2021 2020
Within 1 year (inclusive) 27191986 10738225
Over 1 year but within 2 years (inclusive) 70480 3927625
Over 2 years but within 3 years (inclusive) 190857 787908
Over 3 years 2671947 6975198
Sub-total 30125270 22428956
Less: Provision for bad and doubtful debts - -
Total 30125270 22428956
The ageing is counted starting from the date when other receivables are recognised.(c) Movements of provisions for bad and doubtful debts
As at 31 December 2021 no bad and doubtful debt provision was made for other
receivables (31 December 2020: Nil).As at 31 December 2021 the Group has no other receivables written off (31 December
2020: Nil).
(d) Others categorised by nature
Nature of other receivables 2021 2020
Deposit 4568157 10287959
Refund of consumption tax and VAT 7204557 8254195
Petty cash receivable 252481 124878
Land purchases and reserves receivable 11550000
Others 6550075 3761924
Sub-total 30125270 22428956
Less: Provision for bad and doubtful debts - -
Total 30125270 22428956
145Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
(e) Five largest others-by debtor at the end of the year
Ending balance
Name Nature of the Balance at the
Percentage of
receivable end of the year Ageing ending balance
of provision for
of others (%) bad and doubtfuldebts
Land purchases
Debtor One and reserves 11550000 Within 1 year 38.3% -
receivable
Debtor Two Refund of VAT 5995042 Within 1 year 19.9% -
Debtor Three Refund of VAT 1209515 Within 1 year 4.0% -
Debtor Four Deposits 675000 Over 1 year butwithin 2 years 2.2% -
Debtor Five Insurance 602705 Within 1 year 2.0% -
Total 20032262 66.4% -
7 Inventories
(1) Inventories by category:
20212020
Item Provision for Provision forBook value impairment of Carrying Carrying
inventories amount
Book value impairment of
inventories amount
Raw materials 245114403 - 245114403 70165666 - 70165666
Work in progress 1937081109 - 1937081109 2236815423 - 2236815423
Finished goods 634212222 (13785214) 620427008 653042196 (14474634) 638567562
Total 2816407734 (13785214) 2802622520 2960023285 (14474634) 2945548651
(2) Provision for impairment of inventories:
Increase during Decrease during
Item Opening balance the year the year Closing balance
Recognised Reversal
Finished goods 14474634 13785214 (14474634) 13785214
8 Other current assets
Item 2021 2020
Prepaid income taxes 16697663 16087815
Input tax to be credited 198516812 215812506
Deferred expenses 1938126 2218394
Total 217152601 234118715
146Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
9 Long-term equity investments
(1) Long-term equity investments by category:
Item 2021 2020
Investments in joint ventures 39652834 42019654
Investments in associates 6843676 6243853
Sub-total 46496510 48263507
Less: Provision for impairment - -
Total 46496510 48263507
(2) Movements of long-term equity investments during the year are as follows:
2021 Movements during the year
Investee Balance at the
Losses from
beginning of the Increase in investments
2021 Shareholding
year capital under
Closing balance percentage
equity-method
Joint venturesSAS L&M Holdings (“L&MHoldings”) 42019654 - (2366820) 39652834 55%
Associates
WEMISS (Shanghai)
Enterprise Development Co. 2743890 - (377079) 2366811 30%
Ltd (“WEMISS Shanghai”)
Yantai Santai Real Estate
Development Co. Ltd 3499963 - 19693 3519656 35%
Chengdu Yufeng Brand
Management Co. Ltd. (Note) 518000 (36528) 481472 10%
Yantai Guolong Wine Industry
Co. Ltd. (Note) 500000 (24263) 475737 10%
Sub-total 6243853 1018000 (418177) 6843676
Total 48263507 1018000 (2784997) 46496510
Note: The Group has appointed one director to each of these investees.
10 Investment properties
Buildings and
plants
Cost
Balance as at 31 December 2020 and 31 December 2021 70954045
Accumulated depreciation
31 December 2020 (43896315)
Charge for the year (2555472)
31 December 2021 (46451787)
Carrying amount
31 December 2021 24502258
31 December 2020 27057730
147Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
11 Fixed assets
(1) Fixed assets
Item Plant & buildings Machinery &equipment Motor vehicles Total
Cost
31 December 2020 5136758695 2787309487 27566592 7951634774
Additions during the year
- Purchases 42575416 73522777 1308231 117406424
- Transfers from construction
in progress 115583725 6463487 - 122047212
Decrease during the year - - - -
Disposals or written-offs during
the year - (46386188) (1692947) (48079135)
31 December 2021 5294917836 2820909563 27181876 8143009275
Accumulated depreciation
31 December 2020 (892581856) (1294646448) (21992597) (2209220901)
Charge for the year (125310315) (141287142) (2001135) (268598592)
Disposals or written-offs during
the year - 38769695 1385864 40155559
31 December 2021 (1017892171) (1397163895) (22607868) (2437663934)
Provision for impairment
31 December 2020 - (17478027) - (17478027)
Charge for the year - - - -
31 December 2021 - (17478027) - (17478027)
Carrying amount
31 December 2021 4277025665 1406267641 4574008 5687867314
31 December 2020 4244176839 1475185012 5573995 5724935846
As at 31 December 2021 ownership restricted net value of fixed assets is RMB313012605
(31 December 2020: RMB333748819) referring to Note V. 52.
(2) Fixed assets leased out under operating leases
Item Cost Accumulated Provision fordepreciation impairment Carrying amount
Buildings 47821026 (17759826) - 30061200
Machinery equipment 73592531 (55620641) (17478027) 493863
Motor vehicles 3344518 (3185307) - 159211
Total 124758075 (76565774) (17478027) 30714274
(3) Fixed assets leased out under operating leases
Item Carrying amount atthe end of the year
Machinery equipment 8627
148Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
(4) Fixed assets pending certificates of ownership
Item Carrying amount Reason why thecertificates are pending
Dormitories main building and reception
building of Changan Chateau 276574493 Processing
European town main building and service
building of Chateau Beijing 170296377 Processing
Fermentation shop and warehouse of Xinjiang
Tianzhu 15835763 Processing
Office and packaging shop of Golden Icewine
Valley 9073335 Processing
Fermentation shop of Zhangyu (Jingyang) 5101910 Processing
Office experiment building and workshop of
Fermentation Centre 3147779 Processing
Finished goods warehouse and workshop of
Kylin Packaging 2124816 Processing
Others 284591 Processing
The buildings without property certificate above have no significant impact on the Group’s
management.
12 Construction in progress
(1) Construction in progress
20212020
Project Book value Provision for Carryingimpairment amount Book value
Provision for Carrying
impairment amountR&D Centre (“ChangyuWine Complex”) Project 577328351 - 577328351 589010299 - 589010299
Ningxia Chateau
Construction Project 2835598 - 2835598 420440 - 420440
Sales Company
Construction Project - - - 738462 - 738462
Changan Chateau
Construction Project 1245742 - 1245742 7626393 - 7626393
Shihezi Chateau
Construction Project 1028512 - 1028512 5000 - 5000
Other Companies’
Construction Project 7733896 - 7733896 37694558 - 37694558
Total 590172099 - 590172099 635495152 - 635495152
149Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
(2) Movements of major construction projects in progress during the year
Percentage Attributable to: Interest
Item Budget Opening Additions Transfers to Other transfers Closing of actual
Accumulated Interest rate for Sources of
(RMB million) balance during the year fixed assets out balance cost to capitalisedinterest capitalised for capitalisation fundingbudget (%) the year in 2020 (%)
Loans from
financial
Changyu Wine Complex 4506 589010299 102663881 (114345829) - 577328351 82.2% 17155308 945185 1.2%and4.3% institutions
and
self-raised
Ningxia Chateau Construction Project 428 420440 2415158 - - 2835598 100.0% Self-raised
Changan Chateau Construction
Project 698 7626393 6419524 (3197455) (9602720) 1245742 100.0% Self-raised
Shihezi Chateau Construction Project 780 5000 2662193 (1638681) - 1028512 96.7% Self-raised
150Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
13 Bearer biological assets
Bearer biological assets are vines which measured in cost method.Item Immature Mature biologicalbiological assets assets Total
Original book value
31 December 2020 7607557 248758101 256365658
Additions during the year
- Increase in cultivated 17215775 - 17215775
- Transferred to mature (6913350) 6913350 -
Decrease during the year - (3317500) (3317500)
31 December 2021 17909982 252353951 270263933
Accumulated amortisation
31 December 2020 - (64192122) (64192122)
Charge for the year - (13721424) (13721424)
Decrease during the year - 1362555 1362555
31 December 2021 - (76550991) (76550991)
Carrying amount
31 December 2021 17909982 175802960 193712942
31 December 2020 7607557 184565979 192173536
As at 31 December 2021 there is no biological asset with ownership restricted (31 December
2020: Nil).
As at 31 December 2021 no provision for impairment of biological asset of the Group was
recognised as there is no any indication exists (31 December 20120: Nil).
14 Leases
(1) As a lessee
Right-of-use assets
Item Plant&buildings Lands Others Total
Cost
Balance at the beginning of
the year 42159688 132140502 1697986 175998176
Additions during the year 15209132 5839907 - 21049039
Balance at the end of the year 57368820 137980409 1697986 197047215
Accumulated depreciation
Balance at the beginning of
the year (7201147) (38164005) (339597) (45704749)
Charge for the year (10697382) (5736448) (339597) (16773427)
Balance at the end of the year (17898529) (43900453) (679194) (62478176)
Carrying amounts
At the end of the year 39470291 94079956 1018792 134569039
At the beginning of the year 34958541 93976497 1358389 130293427
151Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Lease liabilities
Item Note 31 December 2021 1 January 2021
Long-term lease liabilities 116156677 105719752
Less: lease liabilities due within
one year V27 14345089 7317852
Total 101811588 98401900
(2) As a lessor
Operating lease
Item 2021
Lease income 2015486
15 Intangible assets
Item Land use rights Software licenses Trademarks Total
Original book value
31 December 2020 532069913 98975807 189269287 820315007
Additions during the year
- Purchase 1796701 1688892 222331 3707924
- Transfers from construction
in progress (33299900) - - (33299900)
31 December 2021 500566714 100664699 189491618 790723031
Accumulated amortisation
31 December 2020 (100498469) (44325044) (14502429) (159325942)
Additions during the year
- Charge for the year (10508435) (9200894) (205640) (19914969)
Decrease during the year 6384759 - - 6384759
31 December 2021 (104622145) (53525938) (14708069) (172856152)
Carrying amount
31 December 2021 395944569 47138761 174783549 617866879
31 December 2020 431571444 54650763 174766858 660989065
As at 31 December 2021 the Group has land use right with infinite useful lives of
RMB32640119 (31 December 2020: RMB30746186) representing the freehold land held
by Chile Indomita Wine Group and Australia Kilikanoon Estate under relevant Chile and
Australia laws on which the amortisation is not required.
152Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
As at 31 December 2021 the Group has trademark with infinite useful lives of
RMB155355846 (31 December 2020: RMB154901004) which is held by Chile Indomita
Wine Group and Australia Kilikanoon Estate. The recoverable amount of the trademark is
determined according to the present value of the expected future cash flows generated from
the asset group to which the single assets of trademark right belongs. The management
prepares the cash flow projection for future 5 years (the “projecting period”) based on the
latest financial budget assumption and estimates the cash flows after the future 5 years (the
“subsequent period”). The pretax discount rates used in the cash flow projections are 11.0%
and 12.8% respectively. A key assumption in the estimate of future cash flows is the
revenue growth rate in the projecting period. Such revenue growth rate is determined based
on the industry and the expected growth rate of Chile Indomita Wine Group and Australia
Kilikanoon Estate.The Group recognises the trademark with infinite useful lives as intangible assets the
impairment assessment of which is made at the end of each reporting year. The
management believes that any reasonable change of the above assumptions will not result in
the total book value of the asset group to which the single assets of trademark right belongs
exceeding its recoverable amount.According to the result of impairment assessment by the end of 31 December 2021 the
management believes there is no impairment loss on those trademarks with infinite useful
lives of the Group.As at 31 December 2021 ownership restricted net value of intangible assets is
RMB201345477 (31 December 2020: RMB206920456) referring to Note V. 52.
16 Goodwill
(1) Changes in goodwill
Name of investee or events from Note 31 December Additions during Disposals during 31 Decemberwhich goodwill arose 2020 the year the year 2021
Original book value
Etablissements Roullet Fransac
(“Roullet Fransac”) (a) 13112525 - - 13112525
Dicot Partners S.L (“Dicot”) (a) 92391901 - - 92391901
Chile Indomita Wine Group (a) 6870115 - - 6870115
Australia Kilikanoon Estate (a) 37063130 - - 37063130
Sub-total 149437671 - - 149437671
Impairment provision (16499459) (20563671) - (37063130)
Carrying amount 132938212 (20563671) - 112374541
(a) The Group acquired Fransac Sales Dicot and Mirefleurs Chile Indomita Wine Group and
Australia Kilikanoon Estate in December 2013 September 2015 July 2017 and January
2018 respectively resulting in respective goodwill amounting to RMB13112525
RMB92391901 RMB 6870115 and RMB37063130. The goodwill had been
allocated to corresponding asset groups for impairment testing.
153Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
(2) Provision for impairment of goodwill
The Group has allocated the above goodwill to relevant asset groups for impairment testing.The recoverable amount of the asset group is determined according to the present value of
the expected future cash flows. The management prepares the cash flow projection for
future 5 years (the “projecting period”) based on the latest financial budget assumption and
estimates the cash flows after the future 5 years (the “subsequent period”). The pretax
discount rate used in calculating the recoverable amounts of Fransac Sales Dicot Mirefleurs
Indomita Wine and Australia Kilikanoon Estate are 12.1% 11.2% 11.0% and 12.8%
respectively (2020: 12.6% 11.2% 11.5% and 12.8%). The key assumption is the growth
rate of annual revenue growth rate of relevant subsidiaries which is computed based on the
expected growth rate of each subsidiary and long-term average growth rates of relevant
industries. Other relevant key assumption is budget gross profit margin which is determined
based on the historical performance of each subsidiary and its expectations for market
development. According to the results of the impairment test the Group found that the
recoverable amount of the asset group including goodwill of Australia Kilikanoon Estate is
lower than its book value. Therefore on 31 December 2021 the provision for impairment of
goodwill was RMB37063130. The impairment loss amounting to RMB20563671 was
recognised in asset impairment loss in 2021.
17 Long-term deferred expenses
Adjustments
Item 31 December at the 1 January
Additions Amortisation Written backduring the during the 31 December2020 beginning of 2021
the period year
for the year year 2021
Land lease prepayment 40918256 (40918256) - - - - -
Land requisition fee 48601667 - 48601667 - (1778943) - 46822724
Greening fee 138185253 - 138185253 211223 (8748458) (1961912) 127686106
Leasehold improvement 80446179 - 80446179 32052432 (8218980) - 104279631
Others 6314500 - 6314500 - (509798) - 5804702
Total 314465855 (40918256) 273547599 32263655 (19256179) (1961912) 284593163
18 Deferred tax assets and deferred tax liabilities
(1) Deferred tax assets and liabilities
31 December 2021 31 December 2020
Deductible or Deferred tax Deductible orItem taxable taxable Deferred tax
temporary assets/(liabilities) temporary
assets/
differences differences (liabilities)
Deferred tax assets:
Provision for impairment of assets 51526991 11522575 44279268 9732098
Unrealised profits of intra-group
transactions 481484528 120371131 313043226 78260807
Unpaid bonus 150325085 37581271 147824610 36956152
Termination benefits 14132191 3533048 16274352 4068588
Deductible tax losses 266833106 63160456 268074301 65844999
Deferred income 41295338 8642716 52653609 11378631
Others 1598132 399534 - -
Sub-total 1007195371 245210731 842149366 206241275
Deferred tax liabilities:
Revaluation due to business
combinations involving entities 46411478 11300970 49156771 12022613
not under common control
Others 2012000 503000 - -
Sub-total 48423478 11803970 49156771 12022613
154Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
(2) Details of unrecognised deferred tax assets
Item 2021 2020
Deductible tax losses 234250359 187130828
(3) Expiration of deductible tax losses for unrecognised deferred tax assets
Year 2021 2020
2021-25008263
20222136786921367869
20232280173722801737
20244208845342088453
20257579440975864506
202672197891-
Total 234250359 187130828
19 Other non-current assets
Item 2021 2020
Royalty 144120442 170370147
Pursuant to a royalty agreement dated 18 May 1997 starting from 18 September 1997 the
Company may use certain trademarks of Changyu Group Company which have been
registered with the PRC Trademark Office. An annual royalty fee at 2% of the Group’s
annual sales is payable to Changyu Group. The license is effective until the expiry of the
registration of the trademarks.According to the above royalty agreement Changyu Group collected a total of
RMB576507809 for royalty from 2013 to 2019 of which 51% was used to promote
trademarks such as Changyu and the product of this contract totalling RMB294018093.The amount is used for promotion of Changyu and other trademarks and the products of this
contract totalling RMB62250368 the difference is RMB231768615 (including tax).On 18 May 2019 the general meeting of shareholders approved the proposal of the
amendment to the royalty agreement. Article 6.1 of the royalty agreement with Changyu
Group was amended to: During the validity period of this contract the Group pays Changyu
Group royalty on an annual basis. The royalty is calculated based on 0.98% of the sales
volume of the Group ‘s contract products using this trademark. The article is amended to:
The royalty paid to the Changyu Group by the Group shall not be used to promote this
trademark and the contract products.Changyu Group promised to offset the difference of RMB231768615 above with the royalty
for four years i.e. from 2019 to 2022.If it is not sufficient for deduction the rest will be repaid
in a one-off manner in 2023. If there is surplus the surplus part of the royalty will be
charged from the year when the surplus occurs. As the amount is a long-term prerpayment
the Company recognises the amount as other non-current assets and meanwhile offset the
sales fee i.e. royalty.As at 31 December 2021 the Group’s royalty in 2021 was RMB26249705 (VAT included).When the difference is deducted by the above-mentioned amount the balance of royalty due
from Changyu Group was RMB144120442.
155Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
20 Short-term loans
Short-term loans by category:
Item 2021 2020
Unsecured loans 478331156 619149908
Mortgaged loans 118469193 55724891
Guaranteed loans 25266108 14215916
Total 622066457 689090715
As at 31 December 2021 details of short-term borrowings were as follows:
Amount Exchange Amount Nature of Interest rate
Interest rate at the
rate end of the yearRMB interest rate % %
Credit loans (RMB) 150000000 1.0000 150000000 Floating 1 yearLPR-0.005 3.35%
Credit loans (RMB) 300000000 1.0000 300000000 Floating Annual benchmarkinterest rate 3.35%
Credit loans (USD) 4490000 6.3098 28331156 Fixed 1.48% 1.48%
Mortgaged loans
(EUR) 6795437 7.2197 49061015 Fixed 0.35% - 0.9% 0.35% - 0.9%
Mortgaged loans
(USD) 11000000 6.3098 69408178 Fixed 1.12% - 1.55% 1.12% - 1.55%
Guaranteed loans
(AUD) 5466488 4.6220 25266108 Fixed 2.50% 2.50%
Total 622066457
As at 31 December 2021 mortgaged loans (EUR) were Hacienda y Vi?edos Marques delAtrio S.L.U (“ Atrio “) factoring of accounts receivable from banks including Banco deSabadell S.A. of EUR6795437 (equivalent of RMB49061015) (31 December 2020:
EUR3558629 equivalent of RMB28557993.On 31 December 2021 Chile Indomita Wine Group pledged its fixed assets to Banco
Scotiabank to borrow USD11000000 (equivalent to RMB69408178) (31 December
2020: USD4000000 equivalent to RMB26162960).
On 31 December 2021 the secured loan represented the secured loan of Australia
Kilikanoon Estate of AUD5466488 (equivalent to RMB25266108) (31 December 2020:
AUD2833945 equivalent to RMB14215916).
21 Accounts payable
Ageing 2021 2020
Within 1 year (inclusive) 486006974 477926275
Over 1 year but within 2 years (inclusive) 4435786 2173356
Over 2 years but within 3 years (inclusive) 1405133 1277767
Over 3 years 1605923 2970560
Total 493453816 484347958
There is no significant accounts payable with ageing of more than one year.
156Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
22 Contract liabilities
Item As at As at31 December 2021 1 January 2021
Receipt in advance 144013594 118210799
Withholding sales rebates 3107122 16862481
Total 147120716 135073280
Contract liabilities primarily relate to the Group’s advances from sales contracts of specific
customers and the withholding sales rebates. Relevant contract liabilities are recognised as
revenue when the control of the goods is transferred to the customer.
23 Employee benefits payable
(1) Employee benefits payable:
Note 31 December 2020 Additions during Decrease duringthe year the year 31 December 2021
Short-term employee
benefits (2) 172176085 463134665 (454752853) 180557897
Post-employment
benefits - defined (3) 329474 45027626 (45027747) 329353
contribution plans
Termination benefits 16274352 5609349 (7751510) 14132191
Total 188779911 513771640 (507532110) 195019441
(2) Short-term employee benefits
31 December 2020 Additions during Decrease duringthe year the year 31 December 2021
Salaries bonuses
allowances 170277311 414204352 (405639128) 178842535
Staff welfare 1734723 17963364 (18057122) 1640965
Social insurance 340733 15251455 (15288352) 303836
Medical insurance 340733 13693635 (13730532) 303836
Work-related injury
insurance - 1534970 (1534970) -
Maternity insurance - 22850 (22850) -
Housing fund 27497 12722935 (12711850) 38582
Labour union fee staff and
workers’ education fee 1874792 3033259 (3056401) 1851650
Sub-total 174255056 463175365 (454752853) 182677568
Less: Non-current liabilities 2078971 40700 - 2119671
Total 172176085 463134665 (454752853) 180557897
(3) Post-employment benefits - defined contribution plans
31 December 2020 Additions during Decrease duringthe year the year 31 December 2021
Basic pension insurance 329464 43803058 (43804402) 328120
Unemployment insurance 10 1224568 (1223345) 1233
Total 329474 45027626 (45027747) 329353
157Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
24 Taxes payable
Item 2021 2020
Value-added tax 54103944 25853102
Consumption tax 70563701 42076231
Corporate income tax 194566746 130621524
Individual income tax 872252 614344
Tax on the use of urban land 2441121 2327666
Education surcharges 5199891 2498374
Urban maintenance and construction tax 7128647 3429038
Others 7445998 5992534
Total 342322300 213412813
25 Other payables
Note 31 December 2021 31 December 2020
Interest payable 323074 553471
Dividends payable 68392 1003125
Others (1) 452642025 384548930
Total 453033491 386105526
(1) Others
(a) Details of others by nature are as follows:
Item 2021 2020
Deposit payable to dealer 241414134 177129582
Advertising fee payable 41264460 50444091
Equipment and construction fee payable 44345312 51381563
Freight charges payable 29192798 26061359
Deposits due to suppliers 12966789 14836302
Contracting fee payable 8668872 9656066
Staff deposit 5037925 359282
Others 69751735 54680685
Total 452642025 384548930
(b) There are no significant others aged over one year accured this year.
26 Other current liabilities
Item As at 31 December As at 31 December2021 2020
Tax to be transferred out as sales 18374193 14820653
158Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
27 Non-current liabilities due within one year
Non-current liabilities due within one year by category are as follows:
Item 2021 2020
Long-term loans due within one year 74520037 111311890
Long-term payables due within one year 22000000 22000000
Long-term lease liabilities due within one year 14345089 -
Total 110865126 133311890
28 Long-term loans
(1) Long-term loans by category
Item 2021 2020
Credit loans 193475080 220219258
Guaranteed loans 57092000 91445600
Less: Long-term loans due within one year 74520037 111311890
Total 176047043 200352968
As at 31 December 2021 details of long-term borrowings were as follows:
Amount Exchange Amount Nature of Interest rate
Interest rate at the Long-term Long-term
rate interest rate end of the year loans due loans due afterRMB % % within one year one year
Credit loans (EUR) 26798216 7.2197 193475080 Fixed 0.95% - 3.28% 0.95% - 3.28% 68270037 125205043
Guaranteed loans (RMB) 6250000 1.0000 6250000 Floating 90% of 5-yearLPR 4.275% 6250000 -
Guaranteed loans (AUD) 11000000 4.6220 50842000 Floating BBSY+1.10% 1.40% - 50842000
Total 250567080 74520037 176047043
As at 31 December 2021 Credit loans (EUR) were EUR26798216 borrowed by Banco
Sabadell Bankia Banco Santander BBVA Caja Rural de Navarr etc. (equivalent of
RMB193475080) (31 December 2020: EUR27441652 equivalent of RMB220219258).Guaranteed loans (RMB) were long-term borrowings of RMB6250000 of the R&D Centre a
subsidiary of the Company (31 December 2020: RMB31250000). Australia Kilikanoon
Estate has borrowed AUD11000000 (equivalent of RMB50842000) (31 December 2020:
AUD12000000 equivalent of RMB60195600) from ANZ Bank and it was guaranteed by the
Company.
29 Long-term payables
Item 2021 2020
Agricultural Development Fund of China (“CADF”) 86000000 108000000
Less: Long-term payables due within one year 22000000 22000000
Balance of long-term payables 64000000 86000000
In 2016 RMB305000000 from CADF was invested in R&D Centre CADF accounted for
37.9% of the registered capital. According to the investment agreement CADF will recovery
investment funds over 10 years the investment income received equal to 1.2% of the
remaining unpaid principal per annum. In addition to the fixed income CADF will no longer
enjoy other profits or bear the loss of R&D Centre. Therefore although the investment in
R&D Centre nominally equity investment is actually a debt investment (financial discount
loan). The Group take this investment as long-term payables which measured in amortized
cost. The Group repays the principal of RMB22000000in 2021. Refer to Note V. 52 for
details of mortgaged and pledged assets.
159Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Balance of long-term
payables Return on Investment date Termination date Due within one year Due after one year Mortgaged and
RMB investment of repayment RMB RMB pledged assets
86000000 1.2% 29 February 28 February2016 2025 22000000 64000000
Fixed assets and
intangible assets
30 Deferred income
Item 31 December 2020 Additions during Decrease during thethe year year 31 December 2021
Government grants 52653609 2452011 (13810282) 41295338
Government grants:
Additions of Amounts
Liability 31 December 2020 government grants recognised in other 31 December 2021 Related to
during the year income during assets/incomethe year
Industrial development support Government
project 24600000 - (4100000) 20500000 grants relatedto assets
Fixed asset investment reward Government
of Shihezi Chateau project 2436600 - (2280000) 156600 grants relatedto assets
Shandong Peninsula Blue Government
Economic Area construction 2000000 - (2000000) - grants related
funds to assets
Xinjiang industrial revitalisation Government
and technological 12798000 - (1422000) 11376000 grants related
transformation project to assets
Special government grant for Government
infrastructure 2120000 - (1060000) 1060000 grants relatedto assets
Government
Raw wine fermentation project 434700 - (434700) - grants related
to assets
Wine fermentation capacity Government
construction (Huanren) 2400000 - (400000) 2000000 grants related
project to assets
Engineering technology Government
transformation of information 1740000 - (580000) 1160000 grants related
system project to assets
Liquor electronic tracking Government
project 1191150 - (667055) 524095 grants relatedto assets
Special fund for efficient Government
water-saving irrigation project 1315000 - (162000) 1153000 grants relatedto assets
Subsidy for economic and Government
energy-saving technological 769800 - (128300) 641500 grants related
transformation projects to assets
Wine industry development Government
project 186000 - (186000) - grants relatedto assets
Subsidy for mechanic Government
development of Penglai 238858 - (13270) 225588 grants related
Daliuhang Base to assets
Government
Coal subsidy - 2079711 - 2079711 grants related
to assets
Cross-border e-commerce 201801 - (201801) - Related toproject income
Subsidy for boiler Related to
reconstruction and demolition 70000 - (10000) 60000 income
Prize from Industrial Design
Competition of Yantai 50000 50000 (50000) 50000 Related to
Mayor’s Cup income
Special Funds for
Innovation-Driven 101700 322300 (115156) 308844 Related to
Development of Yantai City income
Total 52653609 2452011 (13810282) 41295338
160Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
31 Other non-current liabilities
Item 31 December 2021 31 December 2020
Employee benefits payable 2119671 2078971
As at 31 December 2021 employee benefit represents deposit from bonus accrued for
managers and above. The bonus is expected to be paid in 2023.
32 Share capital
At 31 December
2020 and
31 December 2021
Unrestricted A shares 453460800
B shares 232003200
Total of unrestricted shares 685464000
33 Capital reserve
Item 31 December 2020 Additions during the Decrease duringyear the year 31 December 2021
Share premium 519052172 - - 519052172
Others 5916588 - - 5916588
Total 524968760 - - 524968760
34 Other comprehensive income
Balance at the Accrued during the year
beginning of Less: Net-of-tax Net-of-tax Balance at the
the year Previously Less: amount amount end of the yearItem attributable to Before-tax recognised attributable to
shareholders of amount amount
Income tax attributable to attributable to
transferred to expenses shareholders of non-controlling
shareholders of
the Company profit or loss the Company interests
the Company
Items that may be
reclassified to profit
or loss
Translation
differences arising
from translation of
foreign currency 576129 (39307949) - - (35283306) (4024643) (34707177)
financial
statements
161Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
35 Surplus reserve
Item 31 December 2021 31 December 2020
Statutory surplus reserve 342732000 342732000
In accordance with the Company Law and the Articles of Association Company the Company
appropriated 10% of its net profit to statutory surplus reserve. The appropriation to the
statutory surplus reserve may be ceased when the accumulated appropriation reaches over
50% of the registered capital of the Company. The Company does not appropriate net profit
to the surplus reserve in 2021 as surplus reserve of the Company is above 50% of the
registered capital.The Company can appropriate discretionary surplus reserve after appropriation of the
statutory surplus reserve. Discretionary surplus reserve can be utilised to offset the deficit or
increase the share capital after approval.
36 Retained earnings
Item Note 2021 2020
Retained earnings at the beginning of the
year (before adjustment) 8714091755 8735513044
Impact of retrospective adjustment of
accounting standards (1) (10582161) -
Retained earnings at the beginning of the
year (after adjustment) 8703509594 8735513044
Add: Net profits for the year attributable to
shareholders of the Company 500102606 470860587
Less: Dividends to ordinary shares (2) (274185600) (479824800)
Distribution of dividends to existing
shareholders from Culture - (12457076)
Development
Retained earnings at the end of the year (3) 8929426600 8714091755
(1) Adjustments on beginning retained earnings are as follows:
As a result of the implementation of the new financial instrument standards by the Group in
2021 the undistributed profit at the beginning of 2021 was reduced by RMB10582161.
(2) Dividends in respect of ordinary shares declared during the year
Pursuant to the shareholders’ approval at the shareholders’ general meeting on 27 May 2021
a cash dividend of RMB0.4 per share (2020: RMB0.7 per share) totalling RMB274185600
(2020: RMB479824800).
(3) Retained earnings at the end of the year
As at 31 December 2021 the consolidated retained earnings attributable to the Company
included an appropriation of RMB58041628 (2020: RMB58021644) to surplus reserve
made by the subsidiaries.
162Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
37 Operating income and operating costs
Item 2021 2020Income Cost Income Cost
Principal activities 3879875396 1604954772 3325812768 1479923326
Other operating activities 73192187 42835102 69589233 23954081
Total 3953067583 1647789874 3395402001 1503877407
Including:Revenue from
contracts with 3951052097 1646424782 3393386515 1502467908
customers
Rent income 2015486 1365092 2015486 1409499
(1) Disaggregation of revenue from contracts with customers:
Type of contract 2021 2020
By type of goods or services
- Liquor 3879875396 3325812768
- Others 71176701 67573747
By timing of transferring goods or services
- Revenue recognised at a point in time 3951052097 3393386515
38 Taxes and surcharges
Item 2021 2020
Consumption tax 164791894 120563955
Urban maintenance and construction tax 30604422 23169608
Education surcharges 22147840 16756851
Property tax 28005705 26843414
Tax on the use of urban land 11654759 11332778
Stamp duty 6488829 3650250
Others 364121 1472418
Total 264057570 203789274
163Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
39 Selling and distribution expenses
Item 2021 2020
Salaries and benefits 308876899 289527114
Marketing fee 251443176 200259537
Labour service fee 96864855 58723298
Depreciation expense 48014605 41224340
Storage rental 28110876 35744058
Advertising fee 91168885 22724095
Royalty 24763872 21985068
Travelling expenses 21624100 20065075
Design and production fee 30247672 15427023
Conference fee 20088371 15387699
Water electricity and gas fee 14988125 13427340
Others 62762669 53757838
Total 998954105 788252485
40 General and administrative expenses
Item 2021 2020
Salaries and benefits 73920103 73329053
Depreciation expenses 79928195 72637754
Repair costs 16467478 23714008
Administrative expenses 26124859 20927794
Amortisation expenses 19354205 19568760
Amortisation of greening fee 19186231 18187244
Rental charge 5735121 9969494
Safety production costs 11190158 7831443
Security and cleaning fee 7455965 7650813
Contracting fee 9192907 7603536
Others 30521154 29226567
Total 299076376 290646466
41 Financial expenses
Item 2021 2020
Interest expenses from loans and payables 24504339 35187642
Interest expenses from lease liabilities 5292452 -
Less: Borrowing costs capitalised 945185 797021
Less: Financial expenses offset by fiscal interest
subsidy - 1500000
Interest income from deposits and receivables (19558354) (14247274)
Net exchange losses/(gains) 8296888 (274140)
Other financial expenses 3588587 2072506
Total 21178727 20441713
Fiscal interest subsidy during reporting period has been included in non-recurring gains and
losses.
164Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
42 Other income
Item 2021 2020 Related toassets/income
Reward on the fixed asset investment - 2280000 Government grantsrelated to assets
Shandong Peninsula Blue Economic 2000000 2000000 Government grantsArea construction funds related to assets
Industrial development support project 4100000 4100000 Government grantsrelated to assets
Others - Government grants related to 7333325 7018292 Government grantsassets related to assets
Special funds for the development of
enterprises 6815339 23068826 Related to income
Tax refunds 13747870 12324440 Related to income
Strong industrial city special funds - 792600 Related to income
Others - Government grants related to
income 14244207 21479462 Related to income
Total 48240741 73063620
Other income during reporting period has been included in non-recurring gains and losses.
43 Investment losses
Investment losses by item
Item 2021 2020
Long-term equity investment losses under equity
method (2784997) (2217623)
Total (2784997) (2217623)
44 Credit (losses)/reversal
Item 2021 2020
Accounts receivable (7937144) 4348309
Total (7937144) 4348309
45 Impairment losses
Item 2021 2020
Inventories 689420 5705003
Goodwill (20563671) (8920981)
Total (19874251) (3215978)
46 Loss from asset disposals
Item 2021 2020
Loss from disposal of fixed assets 11939284 1180655
Loss from disposal of assets during reporting period has been included in non-recurring gains
and losses.
165Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
47 Non-operating income and non-operating expenses
(1) Non-operating income by item is as follows:
Item 2021 2020
Inventory stocktake surplus 1019314 3823905
Insurance compensation 1069670 3067670
Net income from fine 1068169 3098877
Others 2057151 1918058
Total 5214304 11908510
Non-operating income during reporting period has been included in non-recurring gains and
losses.
(2) Non-operating expenses
Item 2021 2020
Compensation penalty and fine expenses 1761266 347635
Donations provided 900000 1048300
Losses from damage or scrapping of non current
assets 3425709 -
Others 224869 306923
Total 6311844 1702858
Non-operating expenses during reporting period has been included in non-recurring gains and
losses.
48 Income tax expenses
Item Note 2021 2020
Current tax expense for the year based on
tax law and regulations 248208920 135163243
Changes in deferred tax assets/liabilities (1) (39188099) 56641257
Total 209020821 191804500
(1) The analysis of changes in deferred tax is set out below:
Item 2021 2020
Origination of temporary differences (39188099) 56641257
Total (39188099) 56641257
166Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
(2) Reconciliation between income tax expenses and accounting profit:
Item 2021 2020
Profit before taxation 715699194 664866563
Estimated income tax at 25% 178924799 166216641
Effect of different tax rates applied by subsidiaries 7223819 1310363
Effect of non-deductible costs expense and losses 9480180 7185074
Effect of deductible losses of deferred tax assets not
recognised for the year 12159985 16417337
Deferred tax assets written-off 1232038 675085
Income tax expenses 209020821 191804500
49 Basic earnings per share and diluted earnings per share
(1) Basic earnings per share
Basic earnings per share is calculated as dividing consolidated net profit attributable to
ordinary shareholders of the Company by the weighted average number of ordinary shares
outstanding:
20212020
Consolidated net profit attributable to ordinary
shareholders of the Company 500102606 470860587
Weighted average number of ordinary shares
outstanding 685464000 685464000
Basic earnings per share (RMB/share) 0.73 0.69
Weighted average number of ordinary shares is calculated as follows:
20212020
Issued ordinary shares at the beginning of the year 685464000 685464000
Weighted average number of ordinary shares at the
end of the year 685464000 685464000
(2) The Group does not have any potential dilutive ordinary shares for the listed years.
50 Cash flow statement
(1) Proceeds relating to other operating activities:
Item 2021 2020
Government grants 36882470 56515941
Penalty income 1068169 3098877
Interest income from bank 19558354 14396201
Others 31633258 7186229
Total 89142251 81197248
167Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
(2) Payments relating to other operating activities:
Item 2021 2020
Selling and distribution expenses 430962311 399973695
General and administrative expenses 128747237 127666411
Others 2488469 24250891
Total 562198017 551890997
(3) Proceeds relating to other financing activities:
Item 2021 2020
Cash paid for acquisition of minority interests - 62966747
Cash paid for lease 15904567 -
Total 15904567 62966747
51 Supplementary information on cash flow statement
(1) Supplement to cash flow statement
a. Reconciliation of net profit to cash flows from operating activities:
Item 2021 2020
Net profit 506678373 473062063
Add: Provisions for impairment of assets 19874251 3215978
Credit losses/(reversal) 7937144 (4348309)
Depreciation of fixed assets and
investment property 271154064 298224327
Amortisation of intangible assets 19914969 20413627
Amortisation of long-term deferred
expenses 19256179 16578465
Amortisation of biological assets 13721424 13270614
Depreciation of ROU assets 16773427 -
Losses from disposal of fixed assets
intangible assets and other long-term 15364993 1338570
assets
Financial expenses 26782042 36134118
Royalty 24763872 21985068
Investment losses 2784997 2217623
(Increase)/Decrease in deferred tax
assets (38969456) 59310068
Decrease in deferred tax liabilities (218643) (2668811)
Decrease/(Increase) in gross
inventories 143615551 (38192093)
Increase in operating receivables (187412623) (41443296)
Increase/(Decrease) in operating
payables 263362094 (353951339)
Net cash flows from operating activities 1125382658 505146673
168Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
b. Significant investing and financing activities not requiring the use of cash:
Item 2021 2020
Payment of construction in progress and other
long-term assets by bank acceptances 60224230 141440165
c. Change in cash and cash equivalents:
Item 2021 2020
Cash equivalents at the end of the year 1502327029 1052665105
Less:Cash equivalents at the beginning of the
year 1052665105 1397399470
Net increase/(dercrease) in cash and cash
equivalents 449661924 (344734365)
(2) Information on acquisition or disposal of subsidiaries and other business units during the year:
Information on acquisition of subsidiaries and other business units:
20212020
Consideration for acquiring subsidiaries and other
business units - 89519789
Cash or cash equivalents paid during the year
for acquiring subsidiaries and other business units - 89519789
during the year
Including: Culture Development - 89519789
Less: Cash and cash equivalents held by disposed
subsidiaries and other business units - -
Net cash paid for the acquisition - 89519789
(3) Details of cash and cash equivalents
Item 2021 2020
Cash at bank and on hand
Including: Cash on hand 71486 19637
Bank deposits available on demand 1502255543 1052645468
Closing balance of cash and cash equivalents 1502327029 1052665105
52 Assets with restrictive ownership title or right of use
169Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Item Opening balance Balance at theend of the year Reason for restriction
Cash at bank and on hand 67996762 11568964 The Company deposits forletters of credit etc.Account receivable (i) 28557991 49061015 Short-term borrowingsmortgage from Atrio
R&D Centre mortgage for
Fixed assets 333748819 313012605 long-term payables andlong-term and short-term
borrowings
Intangible assets 206920456 201345477 R&D Centre mortgage forlong-term payables
Total 637224028 574988061
(i) As at 31 December 2021 the amount of accounts receivable with restricted ownership
is EUR6795436 which refers to accounts receivable Atrio conducted for factoring from
Banco de Sabadell S.A. Etc. (31 December 2020: EUR3558628 equivalent of
RMB28557991)
170Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
VI. Interests in other entities
1 Interests in subsidiaries
(1) Composition of the Group
Shareholding ratio
Name of the Subsidiary Principal place ofbusiness Registered place
Business
nature Registered capital
(%)
(or similar equity Acquisition method
interest)
Xinjiang Tianzhu Wine Co. Ltd. Shihezi Xinjiang Shihezi Xinjiang Business combinations
(“Xinajing Tianzhu”) China China Manufacturing RMB75000000 60 - involving entities not undercommon control
Etablissements Roullet Fransac Business combinations
(“Roullet Fransac”) Cognac France Cognac France Trading EUR2900000 - 100 involving entities not undercommon control
Business combinations
Dicot Partners S.L (“Dicot”) Navarre Spain Navarre Spain Marketing andsales EUR2000000 90 - involving entities not undercommon control
Vi?a Indómita S.A. Vi?a Dos Andes S.A.and Bodegas Santa Alicia SpA. (“Chile Santiago Chile Santiago Chile Marketing and Acquired throughIndomita Wine Group”) sales
CLP31100000000 85 - establishment or investment
Kilikanoon Estate Pty Ltd. Marketing and Business combinations
(“Australia Kilikanoon Estate”) Adelaide Australia Adelaide Australia sales AUD6420000 97.5 - involving entities not undercommon control
Beijing Changyu Sales and Distribution Marketing and Acquired through
Co. Ltd (“Beijing Sales”) Beijing China Beijing China sales RMB1000000 100 - establishment or investment
Yantai Kylin Packaging Co. Ltd. Yantai Shandong Yantai Shandong
(“Kylin Packaging”) China China Manufacturing RMB15410000 100 -
Acquired through
establishment or investment
Yantai Chateau Changyu-Castel Co. Ltd Yantai Shandong Yantai Shandong
(“Chateau Changyu”) (c) China China Manufacturing USD5000000 70 -
Acquired through
establishment or investment
Changyu (Jingyang) Wine Co. Ltd. Xianyang Shaanxi Xianyang Shaanxi
(“Jingyang Wine”) China China Manufacturing RMB1000000 90 10
Acquired through
establishment or investment
Yantai Changyu Pioneer Wine Sales Yantai Shandong Yantai Shandong Marketing and
Co. Ltd. (“Sales Company”) China China sales RMB8000000 100 -
Acquired through
establishment or investment
Langfang Development Zone
Castel-Changyu Wine Co. Ltd Langfang Hebei Langfang HebeiChina China Manufacturing USD6108818 39 10
Acquired through
(“Langfang Castel”) establishment or investment
Changyu (Jingyang) Wine Sales Co. Ltd. Xianyang Shaanxi Xianyang Shaanxi Marketing and
(“Jingyang Sales”) China China sales RMB1000000 10 90
Acquired through
establishment or investment
Langfang Changyu Pioneer Wine Sales Langfang Hebei Langfang Hebei Marketing and
Co. Ltd (“Langfang Sales”) China China sales RMB1000000 10 90
Acquired through
establishment or investment
171Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Shareholding ratio
Name of the Subsidiary Principal place ofbusiness Registered place
Business Registered capital (%)nature (or similar equity Acquisition method
interest)
Shanghai Changyu Sales and Distribution Shanghai China Shanghai China Marketing and RMB1000000 100 - Acquired throughCo. Ltd. (“Shanghai Sales”) sales establishment or investment
Beijing Changyu AFIP Agriculturedevelopment Co. Ltd (“Agriculture Miyun Beijing China Miyun Beijing Marketing andChina sales RMB1000000 - 100Acquired throughDevelopment”) establishment or investment
Beijing Chateau Changyu AFIP Global Acquired through
Co. Ltd. (“AFIP”) (d) Beijing China Beijing China Manufacturing RMB642750000 91.53 - establishment or investment
Yantai Changyu Wine Sales Co. Ltd. Yantai Shandong Yantai Shandong Marketing and
(“Wines Sales”) China China sales RMB5000000 90 10
Acquired through
establishment or investment
Yantai Changyu Pioneer International Yantai Shandong Yantai Shandong Marketing and RMB5000000 70 30 Acquired throughCo. Ltd. (“Pioneer International”) China China sales establishment or investment
Hangzhou Changyu Wine Sales Co. Ltd. Hangzhou Zhejiang Hangzhou Zhejiang Marketing and Acquired through
(“Hangzhou Changyu”) China China sales RMB500000 - 100 establishment or investment
Ningxia Changyu Grape Growing Co. Ltd. Yinchuan Ningxia Ningxia China Plating RMB1000000 100 - Acquired through(“Ningxia Growing”) China establishment or investment
Huanren Changyu National Wines Sales Benxi Liaoning Marketing and Acquired through
Co. Ltd. (“National Wines”) Benxi Liaoning China China sales RMB2000000 100 - establishment or investment
Liaoning Changyu Golden Icewine Valley Benxi Liaoning Acquired through
Co. Ltd. (“Golden Icewine Valley”) (e) Benxi Liaoning China China Manufacturing RMB59687300 51 - establishment or investment
Yantai Development Zone Changyu Trading Yantai Shandong Yantai Shandong Marketing and Acquired through
Co. Ltd (“Development Zone Trading”) China China sales RMB5000000 - 100 establishment or investment
Yantai Changyu Fushan Trading Company Yantai Shandong Yantai Shandong Marketing and Acquired through
(“Fushan Trading”)(a) China China sales RMB5000000 - 100 establishment or investment
Beijing AFIP Meeting Center
(“Meeting Center”) Miyun Beijing China
Miyun Beijing
China Services RMB500000 - 100
Acquired through
establishment or investment
Beijing AFIP Tourism and Culture
(“AFIP Tourism”) Miyun Beijing China
Miyun Beijing
China Tourism RMB500000 - 100
Acquired through
establishment or investment
Changyu (Ningxia) Wine Co. Ltd. Acquired through
(“Ningxia Wine”) Ningxia China Ningxia China Manufacturing RMB1000000 100 - establishment or investment
Yantai Changyu Chateau Tinlot Co. Ltd. Yantai Shandong Yantai Shandong Wholesale and
(“Chateau Tinlot”) China China retail RMB400000000 65 35
Acquired through
establishment or investment
Xinjiang Chateau Changyu Baron Balboa Shihezi Xinjiang Shihezi Xinjiang
Co. Ltd. (“Chateau Shihezi”) China China Manufacturing RMB550000000 100 -
Acquired through
establishment or investment
Ningxia Chateau Changyu Moser XV Yinchuan Ningxia Yinchuan Ningxia Manufacturing RMB2000000 100 - Acquired throughCo. Ltd. (“Chateau Ningxia”) China China establishment or investment
Shaanxi Chateau Changyu Rena Co. Ltd. Xianyang Shaanxi Xianyang Shaanxi Acquired through
(“Chateau Changan”) China China Manufacturing RMB20000000 100 - establishment or investment
172Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Shareholding ratio
Name of the Subsidiary Principal place of Registered place Businessbusiness nature Registered capital
(%)
(or similar equity Acquisition method
interest)
Yantai Changyu Wine Research &
Development Centre Co. Ltd. Yantai Shandong Yantai Shandong Manufacturing RMB805000000 85.32 - Acquired through
(“R&D Centre”) (f) China China establishment or investment
Changyu (HuanRen) Wine Co. Ltd Benxi Liaoning China Benxi Liaoning
Wine
(“Huan Ren Wine”) China production RMB5000000 100 -
Acquired through
projecting establishment or investment
Xinjiang Changyu Sales Co. Ltd Shihezi Xinjiang Shihezi Xinjiang Marketing and Acquired through
(“Xinjiang Sales”) China China sales RMB10000000 - 100 establishment or investment
Ningxia Changyu Trading Co. Ltd Yinchuan Ningxia Yinchuan Ningxia Marketing and RMB1000000 - 100 Acquired through(“Ningxia Trading”) China China sales establishment or investment
Shaanxi Changyu Rena Wine Sales Xianyang Shaanxi Xianyang Shaanxi Marketing and Acquired through
Co. Ltd (“Shaanxi Sales”) China China sales RMB3000000 - 100 establishment or investment
Penglai Changyu Wine Sales Co. Ltd Penglai Shandong Penglai Shandong Marketing and Acquired through
(“Penglai Sales”) China China sales RMB5000000 - 100 establishment or investment
Laizhou Changyu Wine Sales Co. Ltd Laizhou Shandong Laizhou Shandong Marketing and Acquired through
(“Laizhou Sales”) China China sales RMB1000000 - 100 establishment or investment
Francs Champs Participations SAS
(“Francs Champs”) Cognac France Cognac France
Investment
and trading EUR32000000 100 -
Acquired through
establishment or investment
Yantai Roullet Fransac Wine Sales Co. Ltd. Yantai Shandong Yantai Shandong Marketing and
(“Yantai Roullet Fransac”) China China sales RMB1000000 - 100
Acquired through
establishment or investment
Yantai Changyu Wine Sales Co. Ltd. (“Wine Yantai Shandong Yantai Shandong Marketing and RMB5000000 100 - Acquired throughSales Company”) China China sales establishment or investment
Shaanxi Chateau Changyu Rena Tourism Xianxin Shaanxi Xianxin Shaanxi Tourism RMB1000000 - 100 Acquired throughCo. Ltd (“Chateau Tourism”) China China establishment or investment
Longkou Changyu Wine Sales Co. Ltd Yantai Shandong Yantai Shandong Marketing and Acquired through
(“Longkou Sales”) China China sales RMB1000000 - 100 establishment or investment
Culture Development Yantai Shandong Yantai Shandong Tourism RMB10000000 100 - Acquired throughChina China establishment or investment
Museum Yantai Shandong Yantai ShandongChina China Tourism RMB500000 - 100
Acquired through
establishment or investment
Yantai Changyu Culture Tourism Production Yantai Shandong Yantai Shandong Tourism RMB5000000 - 100 Acquired throughSales Co. Ltd. (“Culture Sales”) China China establishment or investment
Yantai Changyu International Window of theWine City Co. Ltd. (“Window of the Wine Yantai Shandong Yantai ShandongChina China Tourism RMB60000000 - 100Acquired throughCity”) establishment or investment
Yantai KOYA Brandy Chateau Co. Ltd Yantai Shandong Yantai Shandong
(“Chateau KOYA”) China China Manufacturing RMB10000000 100 -
Acquired through
establishment or investment
173Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Shareholding ratio
Name of the Subsidiary Principal place of Registered place Business (%)business nature Registered capital (or similar equity Acquisition method
interest)
Changyu (Shanghai) International Digital
Marketing Center Limited Shanghai China Shanghai China Marketing and RMB50000000 100 - Acquired through
(“Digital Marketing”) sales establishment or investment
Shanghai Changyu Guoqu Digital
Technology Co. Ltd. Shanghai China Shanghai China Marketing and RMB6000000 - 51 Acquired through
(“Shanghai Guoqu”)(b) sales establishment or investment
Tianjin Changyu Yixin Digital Technology
Co. Ltd. (“Tianjin Yixin”)(b) Tianjin China Tianjin China
Marketing and
sales RMB10000000 - 51
Acquired through
establishment or investment
Shanghai Changyu Yixin Digital Technology Marketing and Acquired through
Co. Ltd. (“Shanghai Yixin”)(b) Shanghai China Shanghai China sales RMB10000000 - 51 establishment or investment
(a) Companies above were deregistered in 2021.(b) The companies above are newly established companies in 2021.Reasons for the inconsistency between the proportion of shareholdings in a subsidiary and the proportion of voting rights:
(c) Chateau Changyu is a Sino-foreign joint venture established by the Company and a foreign investor accounting for 70% of Changyu
Chateau’s equity interest. Through agreement arrangement the Company has the full power to control Changyu Chateau’s strategic
operating investing and financing policies. The agreement arrangement will be terminated on 31 December 2022.(d) AFIP is a limited liability company established by Yantai Dean and Beijing Qinglang. In June 2019 Yantai Dean transferred 1.31% of its
equity to Yantai Changyu.After the equity change the Company holds 91.53% of its equity. Through agreement arrangement the
Company has the full power to control AFIP’s strategic operating investing and financing policies. The agreement arrangement will be
terminated on 2 September 2024.(e) Golden Icewine Valley is a Sino-foreign joint venture established by the Company and a foreign investor accounting for 51% of Golden
Icewine Valley’s equity interest. Through agreement arrangement the Company has the full power to control Golden Icewine Valley’s
strategic operating investing and financing policies. The agreement arrangement will be terminated on 31 December 2021.(f) R&D Centre is a joint venture established by the Company and CADF accounting for 85.32% of R&D Centre’s equity interest. Through
agreement arrangement in Note V. 28 the Company has the full power to control R&D Centre’s strategic operating investing and financing
policies. The agreement arrangement will be terminated on 28 February 2025. As at 31 December 2021 remaining investment of CADF
accounts for 14.68% of the registered capital.
174Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
(2) Material non-wholly owned subsidiaries
Proportion of Comprehensive
ownership income Dividend declared Balance of
Name of the Subsidiary interest held by attributable to to non-controlling non-controlling
non-controlling non-controlling shareholders interests at the
interests interests for the during the year end of the yearyear
Xinjiang Tianzhu 40% 1392110 - (44725990)
AFIP 8.47% - - (56409393)
Golden Icewine Valley 49% - - (33319062)
IWCC 15% (492609) 1788975 (54712980)
175Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
(3) Key financial information about material non-wholly owned subsidiaries
The following table sets out the key financial information of the above subsidiaries without offsetting internal transactions but with
adjustments made for the fair value adjustment at the acquisition date and any differences in accounting policies:
Xinjiang Tianzhu AFIP Golden Icewine Valley Chile Indomita Wine Group
20212020202120202021202020212020
Current assets 22333906 24223370 249865391 248357550 24018451 27638263 196488084 231503343
Non-current assets 43852510 45465308 414851163 434045076 24450344 24246983 314756823 291345642
Total assets 66186416 69688678 664716554 682402626 48468795 51885246 511244907 522848985
Current liabilities (39567) (17583) 27459352 41910462 12976418 9967686 130027677 132100755
Non-current liabilities 5336114 5336115 - - - - 8906387 9794949
Total liabilities 5296547 5318532 27459352 41910462 12976418 9967686 138934064 141895704
Operating income - - 191463783 168184273 24236758 20488946 226856381 225121450
Net (loss)/ profit (3480276) (3665095) 2326063 2092230 (6425183) (7431328) 19716978 18196663
Total comprehensive income (3480276) (3665095) 2326063 2092230 (6425183) (7431328) 3284057 18420833
Cash flows from operating
activities (1292713) (105873) (4754748) 3821964 4744413 4654744 99234532 37132027
176Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
VII. Risk related to financial instruments
The Group has exposure to the following main risks from its use of financial instruments in the
normal course of the Group’s operations:
- Credit risk
- Liquidity risk
- Interest rate risk
- Foreign currency risk
The following mainly presents information about the Group’s exposure to each of the above
risks and their sources their changes during the year and the Group’s objectives policies
and processes for measuring and managing risks and their changes during the year.The Group aims to seek appropriate balance between the risks and benefits from its use of
financial instruments and to mitigate the adverse effects that the risks of financial instruments
have on the Group’s financial performance. Based on such objectives the Group’s risk
management policies are established to identify and analyse the risks faced by the Group to
set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk
management policies and systems are reviewed regularly to reflect changes in market
conditions and the Group’s activities.
1 Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the
other party by failing to discharge an obligation. The Group’s credit risk is primarily
attributable to cash at bank receivables debt investments and derivative financial
instruments entered into for hedging purposes. Exposure to these credit risks are monitored
by management on an ongoing basis.The cash at bank of the Group is mainly held with well-known financial institutions.Management does not foresee any significant credit risks from these deposits and does not
expect that these financial institutions may default and cause losses to the Group.As at 31 December 2021 the Group’s maximum exposure to credit risk which will cause a
financial loss to the Group due to failure to discharge an obligation by the counterparties.In order to minimise the credit risk the Group has adopted a policy to ensure that all sales
customers have good credit records. According to the policy of the Group credit review is
required for clients who require credit transactions. In addition the Group continuously
monitors the balance of account receivable to ensure there’s no exposure to significant bad
debt risks. For transactions that are not denominated in the functional currency of the
relevant operating unit the Group does not offer credit terms without the specific approval of
the Department of Credit Control in the Group. In addition the Group reviews the
recoverable amount of each individual trade debt at each balance sheet date to ensure that
adequate impairment losses are made for irrecoverable amounts. In this regard the
management of the Group considers that the Group’s credit risk is significantly reduced.
177Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Since the Group trades only with recognised and creditworthy third parties there is no
requirement for collateral. Concentrations of credit risk are managed by
customer/counterparty by geographical region and by industry sector. As at 31 December
2021 42.8% of the Group trade receivables are due from top five customers (31 December
2020: 20.3%). There is no collateral or other credit enhancement on the balance of the trade
receivables of the Group.
2 Liquidity risk
Liquidity risk is the risk that an enterprise will encounter difficulty in meeting obligations that
are settled by delivering cash or another financial asset. The Company and its individual
subsidiaries are responsible for their own cash management including short-term investment
of cash surpluses and the raising of loans to cover expected cash demands (subject to
approval by the Company’s board when the borrowings exceed certain predetermined levels).The Group’s policy is to regularly monitor its liquidity requirements and its compliance with
lending covenants to ensure that it maintains sufficient reserves of cash readily realisable
marketable securities and adequate committed lines of funding from major financial
institutions to meet its liquidity requirements in the short and longer term.The following tables set out the remaining contractual maturities at the balance sheet date of
the Group’s financial liabilities which are based on contractual undiscounted cash flows
(including interest payments computed using contractual rates or if floating based on rates
current at the balance sheet date) and the earliest date the Group can be required to pay:
2021 Contractual undiscounted cash flow
Carrying amount
Item Within 1 year or More than at balance sheet
on demand 1 to 2 years 2 years but less
More than
5 years Total datethan 5 years
Short-term loans 630717486 - - - 630717486 622066457
Accounts payable 493453816 - - - 493453816 493453816
Other payables 452642025 - - - 452642025 452642025
Long-term loans (including the
portion due within one year) 20586762 125114353 112380675 15506135 273587925 250567080
Long-term payables (including
the portion due within one 22810674 22546674 42322126 - 87679474 86000000
year)
Lease liability (including the
portion due within one year) 19753555 17690615 39763489 75510332 152717991 116156677
Total 1639964318 165351642 194466290 91016467 2090798717 2020886055
2020 Contractual undiscounted cash flow
Carrying amount
Item Within 1 year or More than at balance sheet
on demand 1 to 2 years 2 years but less
More than Total date
than 5 years 5 years
Short-term loans 698571997 - - - 698571997 689090715
Accounts payable 484347958 - - - 484347958 484347958
Other payables 386105526 - - - 386105526 386105526
Long-term loans (including the
portion due within one year) 33175345 24182478 149719792 135013150 342090765 311664858
Long-term payables (including
the portion due within one 23074674 22810674 64868800 - 110754148 108000000
year)
Total 1625275500 46993152 214588592 135013150 2021870394 1979209057
178Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
3 Interest rate risk
Interest-bearing financial instruments at variable rates and at fixed rates expose the Group to
cash flow interest rate risk and fair value interest risk respectively. The Group determines
the appropriate weightings of the fixed and floating rate interest-bearing instruments based on
the current market conditions and performs regular reviews and monitoring to achieve an
appropriate mix of fixed and floating rate exposure.
(1) As at 31 December the Group held the following interest-bearing financial instruments:
Fixed rate instruments:
20212020
Item Effective interest Effective interest
rate Amounts rate Amounts
Financial assets
- Cash at bank 1.75% - 2.25% 53200000 1.5% - 2.75% 93553062
Financial liabilities
- Short-term loans 0.35% - 3.35% (172066457) 0.35% - 3.28% (139090715)
- Long-term loans (including the
portion due within one year) 0.95% - 3.28% (193475080) 1% - 3.28% (280414858)
- Long-term payables (including the
portion due within one year) 1.20% (86000000) 1.20% (108000000)
- Lease liability (including the
portion due within one year) 4.65% (116156677) - -
Total (514498214) (433952511)
Variable rate instruments:
20212020
Item Effective interest
rate Amounts
Effective interest
rate Amounts
Financial assets
- Cash at bank 0.3% - 1.82% 1513824507 0.3% - 1.0% 1100642230
Financial liabilities
- Short-term loans 1 year LPR 0.005 (450000000) 1 year LPR 0.005 (550000000)
- Long-term loans (including the 90% of 90% of
portion due within one year) 5 year LPR (6250000) 5 year LPR (31250000)
- Long-term loans (including the
portion due within one year) BBSY+1.10% (50842000) - -
Total 1006732507 519392230
(2) Sensitivity analysis
Management of the Group believes interest rate risk on bank deposit is not significant
therefore does not disclose sensitivity analysis for interest rate risk.
179Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
As at 31 December 2021 based on assumptions above it is estimated that a general
increase of 50 basis points in interest rates with all other variables held constant would
decrease the Group’s equity by RMB1901595 (2020: RMB2179688) and net profit by
RMB1901595 (2020: RMB2179688).The sensitivity analysis above indicates the instantaneous change in the net profit and equity
that would arise assuming that the change in interest rates had occurred at the balance sheet
date and had been applied to re-measure those financial instruments held by the Group which
expose the Group to fair value interest rate risk at the balance sheet date. In respect of the
exposure to cash flow interest rate risk arising from floating rate non-derivative instruments
held by the Group at the balance sheet date the impact on the net profit and equity is
estimated as an annualised impact on interest expense or income of such a change in interest
rates.
4 Foreign currency risk
In respect of cash at bank and on hand accounts receivable and payable short-term loans
denominated in foreign currencies other than the functional currency the Group ensures that
its net exposure is kept to an acceptable level by buying or selling foreign currencies at spot
rates when necessary to address short-term imbalances.
(1) As at 31 December the Group’s exposure to main currency risk arising from recognised
assets or liabilities denominated in foreign currencies is presented in the following tables.For presentation purposes the amounts of the exposure are shown in Renminbi translated
using the spot rate at the balance sheet date. Differences resulting from the translation of
the financial statements denominated in foreign currency are excluded.
20212020
Balance at foreign Balance at RMB Balance at foreign Balance at RMB
currency equivalent currency equivalent
Cash at bank and on hand 2090539 13406984 2029849 14053435
- USD 1984323 12640136 1492923 9744604
- EUR 106216 766848 536926 4308831
Short-term loans 15490000 98759593 12490000 81524728
- USD 15490000 98759593 12490000 81524728
(2) The following are the exchange rates for Renminbi against foreign currencies applied by the
Group:
Average rate Balance sheet datemid-spot rate
2021202020212020
USD 6.4512 6.8884 6.3757 6.5272
EUR 7.6186 7.9065 7.2197 8.0250
180Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
(3) Sensitivity analysis
Assuming all other risk variables remained constant a 5% strengthening of the Renminbi
against the US dollar and Euro dollar at 31 December would have impact on the Group’s
equity and net profit by the amount shown below. whose effect is in Renminbi and translated
using the spot rate at the year-end date:
Equity Net profit
31 December 2021
USD 4305973 4305973
EUR (38342) (38342)
Total 4267631 4267631
31 December 2020
USD 3589006 3589006
EUR (215442) (215442)
Total 3373564 3373564
A 5% weakening of the Renminbi against the US dollar and Euro dollar at 31 December would
have had the equal but opposite effect to the amounts shown above on the basis that all
other variables remained constant.VIII. Fair value disclosure
All financial assets and financial liabilities held by the Group are carried at amounts not
materially different from their fair value at 31 December 2021 and 31 December 2020.
181Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
IX. Related parties and related party transactions
1 Information about the parent of the Company
Company name Registeredplace Business nature Registered capital
Shareholding Percentage of Ultimate controlling party of the
percentage (%) voting rights (%) Company
Jointly controlled by Yantai GuoFeng
Investment Holding Ltd ILLVA
Changyu Group Yantai Manufacturing 50000000 50.4% 50.4% SARONNO HOLDING SPAInternational Finance Corporation and
Yantai Yuhua Investment and
Development Company Limited.There are no changes on the registered capital and shareholding percentage/percentage of voting rights of the parent company.
182Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
2 Information about the subsidiaries of the Company
For information about the subsidiaries of the Company refer to Note VI.1.
3 Information on other related parties
Name of other related parties Related party relationship
Yantai Shenma Packaging Co. Ltd. Controlled by the same parent
(“Shenma Packaging”) company
Yantai Zhongya Pharmaceutical Tonic Wine Co. Ltd. Controlled by the same parent
(“Zhongya Pharmaceutical”) company
WEMISS Shanghai Associate of the Group
Chengdu Yufeng Associate of the Group
Mirefleurs Subsidiaries of the joint venture
CHATEAU DE LIVERSAN (“LIVERSAN”) Subsidiaries of the joint venture
4 Transactions with related parties
(1) Product procurement
Related parties Nature of transaction 2021 2020
Shenma Packaging Product procurement 80754599 78520694
Zhongya Pharmaceutical Product procurement 591522 850478
Mirefleurs Product procurement 6822330 9261722
LIVERSAN Product procurement 3269146 3746069
Total 91437597 92378963
(2) Sales of goods
Related parties Nature of transaction 2021 2020
Zhongya Pharmaceutical Sales of goods 3872660 3920047
WEMISS Shanghai Sales of goods 2677707 1374616
Chengdu Yufeng Sales of goods 5365061 -
Shenma Packaging Sales of goods 287930 293488
Total 12203358 5588151
(3) Services
Related parties Nature of transaction 2021 2020
Shenma Packaging Services - 106195
Total - 106195
183Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
(4) Purchase of fixed assets
Related parties of the Company Nature of transaction 2021 2020
Shenma Packaging Purchase of fixedassets 4101232 -
Total 4101232 -
(5) Sale of fixed assets
Related parties of the Company Nature of transaction 2021 2020
Changyu Group Sale of fixed assets - 44845989
Total - 44845989
(6) Leases
(a) As the lessor
Name of lessee Type of assets leased Lease income Lease incomerecognised in 2021 recognised in 2020
Shenma Packaging Offices and plants 1492550 1492550
Zhongya Pharmaceutical Offices and plants 522936 522936
Total 2015486 2015486
(b) As the lessee
Name of lessor Type of assets Lease expense Lease expenseleased recognised in 2021 recognised in 2020
Changyu Group Office buildings 1612118 1612118
Changyu Group Offices and plants 1394762 1394762
Changyu Group Offices and plants 4184286 4184286
Changyu Group Offices andcommercial building 7057143 1050000
Changyu Group Office buildings - 714286
Total 14248309 8955452
(7) Remuneration of key management personnel
Item 2021 2020
Remuneration of key management personnel 12495933 6975110
(8) Other related party transactions
Related parties Nature of transaction Note 2021 2020
Changyu Group Royalty (a) 24763872 21985068
Changyu Group Transfer of trademark userights (b) - 18334528
Changyu Group Transfer of CultureDevelopment - 89519789
Zhongya Equity transfer of Changyu
Pharmaceutical Museum - 1033912
184Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
(a) Contract of trademarks usage
Pursuant to a royalty agreement dated 18 May 1997 starting from 18 September 1997
the Company may use certain trademarks of Changyu Group Company which have
been registered with the PRC Trademark Office. An annual royalty fee at 2% of the
Group’s annual sales is payable to Changyu Group. The license is effective until the
expiry of the registration of the trademarks.According to the above royalty agreement Changyu Group collected a total of
RMB576507809 for royalty from 2013 to 2019 of which 51% was used to promote
trademarks such as Changyu and the product of this contract totalling
RMB294018093. The amount is used for promotion of Changyu and other
trademarks and the products of this contract totalling RMB62250368 the difference is
RMB231768615(tax inclusive).On 18 May 2019 the general meeting of shareholders approved the proposal of the
amendment to the royalty agreement. Article 6.1 of the royalty agreement with
Changyu Group was amended to: During the validity period of this contract the Group
pays Changyu Group royalty on an annual basis. The royalty is calculated based on
0.98% of the sales volume of the Group ‘s contract products using this trademark. The
article 6.3 is amended to: The royalty paid to the Changyu Group by the Group shall not
be used to promote this trademark and the contract products.In addition in accordance with agreement the Group signed with Changyu Group in
November 2019 Changyu Group promised to offset the difference of RMB231768615
above with the royalty for four years i.e. from 2019 to 2022.If it is not sufficient for
deduction the rest will be repaid in a one-off manner in 2023. If there is surplus the
surplus part of the royalty will be charged from the year when the surplus occurs.The Group incurred a trademark usage fee of RMB24763872 this year.(b) Transfer of trademark use rights
On 22 April 2020 the Fourth Meeting of the Eighth Board of Directors of the Group
reviewed and approved the Proposal on Transferring the “KOYA” and Other
Trademarks of Yantai Changyu Group Co. Ltd.. On 16 June 2020 the Group and
Changyu Group signed the Trademark Transfer Agreement to transfer the ownership of
43 trademarks owned by Changyu Group including KOYA ZENITHWIRL FRANLLET
WEMISS and PIONEER at an estimated price of RMB19434600 (tax inclusive).
185Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
5 Receivables from and payables to related parties
Receivables from related parties
20212020
Item Related party Provision for Provision forBook value bad and Book value bad and
doubtful debts doubtful debts
Accounts receivable ZhongyaPharmaceutical 287788 956 714995 3175
Accounts receivable WEMISSShanghai - - 1553316 6898
Prepayments ShenmaPackaging - - 126818 -
Other non-current assets Changyu Group 144120442 - 170370147 -
Other receivables ShenmaPackaging 341880 - - -
Other receivables ZhongyaPharmaceutical - - 522936 -
Payables to related parties
Item Related party 2021 2020
Accounts payable Shenma Packaging 30184072 33421165
Accounts payable Zhongya
Pharmaceutical - 455176
Accounts payable Chengdu Yufeng 344464 -
Accounts payable Changyu Group 19434600 19434600
Contract liability ZhongyaPharmaceutical 653 -
Other payables Shenma Packaging - 450000
X. Capital management
The Group’s primary objectives when managing capital are to safeguard its ability to continue
as a going concern so that it can continue to provide returns for shareholders by pricing
products and services commensurately with the level of risk and by securing access to
finance at a reasonable cost.The Group’s capital structure is regularly reviewed and managed to achieve an optimal
structure and return for shareholders. Factors for the Group’s consideration include: its
future funding requirements capital efficiency actual and expected profitability expected
cash flows and expected capital expenditure. Adjustments are made to the capital structure
in light of changes in economic conditions affecting the Group.Neither the Company nor any of its subsidiaries are subject to externally imposed capital
requirements.
186Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
XI. Commitments and contingencies
1 Significant commitment
(1) Capital commitments
Item 2021 2020
Long-term assets acquisition commitment 84963700 249379500
Total 84963700 249379500
(2) Operating lease commitments
As at 31 December the total future minimum lease payments under non-cancellable
operating leases of the Group’s properties were payable as follows:
Item 2021 2020
Within 1 year (inclusive) 651000 24076000
Over 1 year but within 2 years (inclusive) - 17735000
Over 2 years but within 3 years (inclusive) - 15564000
Over 3 years - 106278000
Total 651000 163653000
2 Contingencies
The Group do not have any significant contingencies as at balance sheet date.XII. Subsequent events
Distribution of dividends on ordinary shares approved after the balance sheet date
According to the proposal of the Board of Directors on 25 April 2022 the Company intends to
distribute cash dividend totaling RMB308458800 to all shareholders of 685464000 capital
shares for the year ended 31 December 2021 on the basis of RMB4.5 (including tax) for
every 10 shares. The proposal is subject to the approval by the Shareholders’ meeting.This distribution of profit in cash has not been recognised as a liability at the balance sheet
date.XIII. Other significant items
1 Segment reporting
The Group is principally engaged in the production and sales of wine brandy and sparkling
wine in China France Spain Chile and Australia. In accordance with the Group’s internal
organisation structure management requirements and internal reporting system the Group’s
operation is divided into five parts: China Spain France Chile and Australia. The
management periodically evaluates segment results in order to allocate resources and
evaluate performances. In 2021 over 87% of revenue more than 94% of profit and over
92% of non-current assets derived from China/are located in China. Therefore the Group
does not need to disclose additional segment report information.
187Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
XIV. Notes to the Company’s financial statements
1 Bills receivable
Classification of bills receivable
Item 2021 2020
Bank acceptance bills 9800000 -
Total 9800000 -
All of the above bills are due within one year.
2 Receivables under financing
Item Note 2021 2020
Bills receivable (1) 62411636 13920000
Total 62411636 13920000
(1) The pledged bills receivable of the Company at the end of the year
As at 31 December 2021 there was no pledged bills receivable (31 December 2020: Nil).
(2) Outstanding derecognised endorsed bills that have not matured at the end of the year
Amount
Item derecognised at
year end
Bank acceptance bills 65893889
Total 65893889
As at 31 December 2021 derecognised bills endorsed by the Company to other parties which
are not yet due at the end of the period is RMB65893889 (31 December 2020:
RMB49849895). The notes are used for payment to suppliers. The Company believes
that due to good reputation of bank the risk of notes not accepting by bank on maturity is very
low therefore derecognise the note receivables endorsed. If the bank is unable to pay the
notes on maturity according to the relevant laws and regulations of China the Company
would undertake limited liability for the notes.
3 Other receivables
Note 31 December 2021 31 December 2020
Dividends receivable (1) - 200000000
Others (2) 398072976 380131798
Total 398072976 580131798
(1) Dividends receivable
Item 31 December 2021 31 December 2020
Dividends to subsidiaries - 200000000
Total - 200000000
188Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
(2) Others
(a) Others by customer type:
Customer type 31 December 2021 31 December 2020
Amounts due from subsidiaries 397998281 379375427
Amounts due from related parties - 522936
Others 74695 233435
Sub-total 398072976 380131798
Less: Provision for bad and doubtful debts - -
Total 398072976 380131798
(b) The ageing analysis is as follows:
Ageing 2021 2020
Within 1 year (inclusive) 397936651 378307160
Over 1 year but within 2 years (inclusive) 11853 1804638
Over 2 years but within 3 years (inclusive) 104472 -
Over 3 years 20000 20000
Sub-total 398072976 380131798
Less: Provision for bad and doubtful debts - -
Total 398072976 380131798
The ageing is counted starting from the date when other receivables are recognised.(c) Others by method of provisioning
20212020
Book value Provision for bad and doubtful Provision for bad and doubtful
Category debts Carrying
Book value debts Carrying
Amount Percentage Amount Percentage amount Amount Percentage Percentage amount(%) (%) (%) Amount (%)
Individual
assessment
- Total other
receivables - - - - - - - - - -
Collective
assessment
- Amounts due
from 397998281 99.98 - - 397998281 379375427 99.80 - - 379375427
subsidiaries
- Amounts due
from related - - - - - 522936 0.14 - - 522936
parties
- Amounts due
from third 74695 0.02 - - 74695 233435 0.06 - - 233435
parties
Total 398072976 100.00 - - 398072976 380131798 100.00 - - 380131798
(d) Movements of provisions for bad and doubtful debts
As at 31 December 2021 no bad and doubtful debt provision was made for other
receivables (31 December 2020: Nil).As at 31 December 2021 the Company has no other receivables written off (31
December 2020: Nil).
189Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
(e) Others categorised by nature
Nature of other receivables 2021 2020
Amounts due from subsidiaries 397998281 379375427
Amounts due from related parties - 522936
Others 74695 233435
Sub-total 398072976 380131798
Less: Provision for bad and doubtful debts - -
Total 398072976 380131798
(f) Five largest others-by debtor at the end of the year
Ending balance
Debtor Nature of the Balance at the
Percentage of
receivable end of the year Ageing ending balance
of provision for
of others (%) bad and doubtfuldebts
Sales Company Amounts duefrom subsidiaries 113621178 Within 1 year 28.5 -
R&D Centre Amounts duefrom subsidiaries 36611978 Within 1 year 9.2 -
Digital Marketing Amounts duefrom subsidiaries 14925497 Within 1 year 3.7 -
Chateau KOYA Amounts duefrom subsidiaries 1458255 Within 1 year 0.4 -
Chateau Changyu Amounts duefrom subsidiaries 419481 Within 1 year 0.1 -
Total 167036389 41.9 -
4 Long-term equity investments
(1) Long-term equity investments by category:
20212020
Item Book value Provision for Carryingimpairment amount Book value
Provision for Carrying
impairment amount
Investments in
subsidiaries 7593535027 - 7593535027 7593535027 - 7593535027
Investments in
associates 5886467 - 5886467 6243853 - 6243853
Total 7599421494 - 7599421494 7599778880 - 7599778880
190Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
(2) Investments in subsidiaries:
Balance at the
Subsidiary beginning of Additions during Decrease during Balance at the
the year the year the year end of the year
Xinjiang Tianzhu 60000000 - - 60000000
Kylin Packaging 23176063 - - 23176063
Chateau Changyu 28968100 - - 28968100
Pioneer International 3500000 - - 3500000
Ningxia Growing 36573247 - - 36573247
National Wines 2000000 - - 2000000
Golden Icewine Valley 30440500 - - 30440500
Chateau Beijing 588389444 - - 588389444
Sales Company 7200000 - - 7200000
Langfang Sales 100000 - - 100000
Langfang Castel 19835730 - - 19835730
Wine Sales 4500000 - - 4500000
Shanghai Marketing 1000000 - - 1000000
Beijing Sales 850000 - - 850000
Jingyang Sales 100000 - - 100000
Jingyang Wine 900000 - - 900000
Ningxia Wine 222309388 - - 222309388
Chateau Ningxia 453463500 - - 453463500
Chateau Tinlot 212039586 - - 212039586
Chateau Shihezi 812019770 - - 812019770
Chateau Changan 803892258 - - 803892258
R&D Centre 3288906445 - - 3288906445
Huanren Wine 22200000 - - 22200000
Wine Sales Company 5000000 - - 5000000
Francs Champs 236025404 - - 236025404
Dicot 233142269 - - 233142269
Chile Indomita Wine Group 274248114 - - 274248114
Australia Kilikanoon Estate 129275639 - - 129275639
Digital Marketing 1000000 - - 1000000
Culture Development 92479570 - - 92479570
Total 7593535027 - - 7593535027
For information about the subsidiaries of the Company refer to Note VI.
(3) Investments in associates:
Balance at the
Subsidiary beginning of the Additions during Decrease during Balance at the
year the year the year end of the year
WEMISS Shanghai 2743890 - (377079) 2366811
Yantai Santai Real Estate
Development Co. Ltd 3499963 19693 - 3519656
Total 6243853 19693 (377079) 5886467
191Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
5 Operating income and operating costs
Item 2021 2020Income Cost Income Cost
Principal activities 576706055 470719232 510205498 450876445
Other operating activities 2189747 1439506 2098055 1492067
Total 578895802 472158738 512303553 452368512
Including:Revenue from contracts
with customers 576706055 470719232 510205498 450876445
Rent income 2189747 1439506 2098055 1492067
(1) Disaggregation of revenue from contracts with customers:
Type of contract 2021 2020
By type of goods or services
- Liquor 576706055 510205498
By timing of transferring goods or services
- Revenue recognised at a point in time 576706055 510205498
6 Investment income
Item 2021 2020
Income from long-term equity investments
accounted for using cost method 867880564 449760868
Loss from long-term equity investments accounted
for using equity method (357386) (256147)
Total 867523178 449504721
192Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
7 Transactions with related parties
(1) Product procurement
Related parties Nature of transaction 2021 2020
Subsidiary of the parent
company Product procurement 117808977 107663061
Other related parties of the
Company Product procurement 30002566 36249251
Total 147811543 143912312
(2) Sales of goods
Related parties Nature of transaction 2021 2020
Subsidiary of the parent
company Sales of goods 576708399 504080073
Other related parties of the
Company Sales of goods 3017548 2952493
Total 579725947 507032566
(3) Guarantee
The Company as the guarantor
Guarantee holder Currency Amount of Inception date of Maturity date of Guaranteeguarantee guarantee guarantee expired (Y/N)
R&D Centre RMB 500000000 08 March 2017 08 March 2022 N
Australia Kilikanoon
Estate AUD 25000000 13 December 2018 13 December 2023 N
(4) Leases
(a) As the lessor
Name of lessee Type of assets leased Lease income Lease incomerecognised in 2021 recognised in 2020
Other related parties of
the Company Offices and plants 2015486 2015486
Subsidiary of the parent
company Offices buildings 85714 82569
Total 2101200 2098055
(b) As the lessee
Name of lessor Type of assets leased Lease expense Lease expenserecognised in 2021 recognised in 2020
Other related parties of
the Company Office buildings 1394762 1394762
Total Office buildings 1394762 1394762
193Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
(5) Other related party transactions
Related parties Nature of transaction 2021 2020
Changyu Group Transfer of trademarkuse rights - 18334528
Changyu Group Transfer of CultureDevelopment - 89519789
8 Receivables from and payables to related parties
Receivables from related parties
20212020
Item Related party Provision for Provision forBook value bad and Book value bad and
doubtful debts doubtful debts
Prepayments Other related partiesof the Company - - 126818 -
Other receivables Subsidiary of theparent company 397998281 - 379375427 -
Other receivables Other related partiesof the Company - - 522936 -
Other non-current assets Subsidiary of theparent company 2023500000 - 1530700000 -
Payables to related parties
Item Related party 2021 2020
Accounts payable Other related parties ofthe Company 28014000 29634723
Other payables Subsidiary of theparent company 362651747 319936973
Other payables Other related parties ofthe Company - 450000
XV. Non-recurring profit and loss statement in 2021
Item Amount
(1) Profit and loss from disposal of non-current assets (15364993)
Government grants recognised through profit or loss (excluding those
(2) having close relationships with the Group’s operation and enjoyed in 48240741
fixed amount or quantity according to uniform national standard)
(3) Other non-operating income and expenses besides items above 2328169
Sub-total 35203917
(4) Tax effect (7306787)
(5) Effect on non-controlling interests after taxation (30486)
Total 27866644
Note 1: Extraordinary gain and loss items (1) to (3) listed above are presented in the amount
before taxation.
194Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
XVI. Return on net assets and earnings per share
1 Calculation of earnings per share
(1) Basic earnings per share
For calculation of the basic earnings per share please refer to Note V.49.
(2) Basic earnings per share excluding extraordinary gain and loss
Basic earnings per share excluding extraordinary gain and loss is calculated as dividing
consolidated net profit excluding extraordinary gain and loss attributable to ordinary
shareholders of the Company by the weighted average number of ordinary shares
outstanding:
20212020
Consolidated net profit attributable to ordinary
shareholders of the Company 500102606 470860587
Extraordinary gains and losses attributable to
ordinary shareholders of the Company 27866644 73205400
Consolidated net profit excluding extraordinary gain
and loss attributable to the Company’s ordinary 472235962 397655187
equity shareholders
Weighted average number of ordinary shares
outstanding 685464000 685464000
Basic earnings per share excluding extraordinary
gain and loss (RMB/share) 0.69 0.58
(3) Diluted earnings per share
During the reporting period the Company did not have dilutive potential ordinary shares.
2 Calculation of weighted average return on net assets
(1) Weighted average return on net assets
Weighted average return on net assets is calculated as dividing consolidated net profit
attributable to ordinary shareholders of the Company by the weighted average amount of
consolidated net assets:
20212020
Consolidated net profit attributable to ordinary
shareholders of the Company 500102606 470860587
Weighted average amount of consolidated net
assets 10329718533 10304733743
Weighted average return on net assets 4.84% 4.57%
195Yantai Changyu Pioneer Wine Co. Ltd. 2021 Annual Report
Calculation of weighted average amount of consolidated net assets is as follows:
20212020
Consolidated net assets at the beginning of the year 10267832644 10402248821
Impact of changes in accounting policies (10582161) -
Business combination involving entities under
common control - (37299912)
Effect of consolidated net profit attributable to
ordinary shareholders of the Company 232409650 237836150
The impact of the purchase of minority
shareholders’ equity - (8046940)
Effect of shares repurchased (Note V.36) (159941600) (290004376)
Weighted average amount of consolidated net
assets 10329718533 10304733743
(2) Weighted average return on net assets excluding extraordinary gain and loss
Weighted average return on net assets excluding extraordinary gain and loss is calculated as
dividing consolidated net profit excluding extraordinary gain and loss attributable to ordinary
shareholders of the Company by the weighted average amount of consolidated net assets:
20212020
Consolidated net profit excluding extraordinary gain
and loss attributable to the Company’s ordinary 472235962 397655187
equity shareholders
Weighted average amount of consolidated net
assets (Note) 10329718533 10243190738
Weighted average return on net assets excluding
extraordinary gain and loss 4.57% 3.88%
Note: When a business combination under common control occurs during the reporting
period the net assets of the combining party shall be weighted from the month
following the acquisition date when calculating the weighted average return on net
assets after deducting non-recurring gains and losses. When calculating the
weighted average return on net assets after deducting non-recurring gains and losses
during the comparative period the net assets of the combining party shall not be
weighted.Yantai Changyu Pioneer Wine Co. Ltd.Board of Directors
April 27 2022
196
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