Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report Financial Report
1. Audit report
Whether the semiannual report has been audited
□ Yes√ No
2. Financial statement
The unit in the statements of the financial annotations is RMB Yuan.
2.1 Consolidated balance sheet
Compiling unit: Yantai Changyu Pioneer Wine Co., Ltd. June 30, 2018 Unit: Yuan
|||||
|-|-|-|-|
|Item|Note|Ending balance|Beginning balance|
|Current assets:||||
|Monetary fund|7.1|1,683,038,453|1,402,522,509|
|Settlement reserves||||
|Lending funds||||
|Financial assets measured at the fair value and the variation of which is||||
|recorded into the current profit and loss||||
|Derivative financial assets||||
|Bills receivable|7.2|367,210,884|244,796,818|
|Accounts receivable|7.3|243,413,092|263,796,355|
|Advance payment|7.4|3,122,797|2,417,931|
|Premium receivable||||
|Reinsurance accounts receivable||||
|Receivable reserves for reinsurance contract||||
|Interest receivable|7.5|1,218,373|240,968|
|Dividends receivable||||
|Other receivables|7.6|16,500,022|18,737,454|
|Buying back the sale of financial assets||||
|Inventories|7.7|2,338,925,432|2,473,614,046|
|Assets held for sale|7.8|2,000,197|2,000,197|
|Non-current assets due within one year||||
|Other current assets|7.9|362,977,990|230,822,759|
|Total current assets||5,018,407,240|4,638,949,037|
|Non-current assets:||||
|Offering loans and imprest||||
|Available-for-sale financial assets|7.10|463,880|467,251|
|Held-to-maturity investments||||
|Long-term receivables||||
|Long-term equity investments||||
|Investment real estate|7. 11|17,877,379|18,467,989|
|Fixed assets|7.12|5,457,575,677|5,329,083,969|

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
|||||
|-|-|-|-|
|Item|Note|Ending balance|Beginning balance|
|Construction in progress|7.13|1,015,914,753|1,026,141,569|
|Construction materials||||
|Disposal of fixed assets||||
|Productive biological assets|7.14|202,661,748|201,929,888|
|Oil and gas assets||||
|Intangible assets|7.15|662,694,276|655,448,897|
|Development expenditure||||
|Goodwill|7.16|163,930,875|128,135,981|
|Long-term prepaid expenses|7.17|227,993,424|230,009,231|
|Deferred tax assets|7.18|270,988,173|308,121,396|
|Other non-current assets||||
|Total non-current assets||8,020,100,185|7,897,806,171|
|Total assets||13,038,507,425|12,536,755,208|
|Current liabilities:||||
|Short-term loans|7.19|750,454,676|714,434,286|
|Borrowings from the Central Bank||||
|Customer and interbank deposits||||
|Borrowing funds||||
|Financial liabilities measured at the fair value and the variation of which||||
|is recorded into the current profit and loss||||
|Derivative financial liabilities||||
|Bills payable||||
|Accounts payable|7.20|505,856,955|666,442,879|
|Advances from customers|7.21|366,355,280|350,894,156|
|Financial assets sold for repurchase||||
|Handling fees and commissions payable||||
|Employee remunerations|7.22|177,995,138|210,824,234|
|Taxes payable|7.23|73,859,747|145,094,156|
|Interest payable|7.24|834,247|771,250|
|Dividends payable|7.25|746,021||
|Other payables|7.26|671,707,915|602,964,319|
|Dividend payable for reinsurance||||
|Reserves for insurance contracts||||
|Acting trading securities||||
|Acting underwriting securities||||
|Liabilities held for sale||||
|Non-current liabilities due within one year|7.27|140,570,388|110,954,827|
|Other current liabilities|7.28|16,311,727|16,878,199|
|Total current liabilities||2,704,692,094|2,819,258,306|
|Non-current liabilities:||||
|Long-term borrowings|7.29|153,965,191|156,125,854|
|Bonds payable||||
|Including: Preferred stock||||
|Perpetual capital securities||||
|Long-term accounts payable|7.30|235,000,000|259,000,000|

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
|||||
|-|-|-|-|
|Item|Note|Ending balance|Beginning balance|
|Long-term employee remunerations payable||||
|Special accounts payable||||
|Estimated liabilities||||
|Deferred income|7.31|92,340,427|92,918,855|
|Deferred tax liabilities|7.18|26,020,063|24,264,203|
|Other non-current liabilities|7.32|6,848,847|7,209,312|
|Total non-current liabilities||514,174,528|539,518,224|
|Total liabilities||3,218,866,622|3,358,776,530|
|Owner’s equity:||||
|Capital stock|7.33|685,464,000|685,464,000|
|Other equity instruments||||
|Including: Preferred stock||||
|Perpetual capital securities||||
|Capital surplus|7.34|565,955,441|565,955,441|
|Minus: Treasury stock||||
|Other comprehensive income|7.35|-6,121,580|3,109,240|
|Special reserves||||
|Surplus reserves|7.36|342,732,000|342,732,000|
|General risk preparation||||
|Retained earnings|7.37|7,944,919,023|7,309,081,618|
|Total owner’s equities attributable to the parent company||9,532,948,884|8,906,342,299|
|Minority equity||286,691,919|271,636,379|
|Total owner’s equities||9,819,640,803|9,177,978,678|
|Total liabilities and owner’s equities||13,038,507,425|12,536,755,208|

 Legal Representative: Zhou Hongjiang Accounting Supervisor: Jiang Jianxun Accounting Department Manager: Jiang Jianxun
2.2 Balance sheet of the parent company
Compiling unit: Yantai Changyu Pioneer Wine Co., Ltd. Unit: Yuan
|||||
|-|-|-|-|
|Item|Note|Ending balance|Beginning balance|
|Current assets:||||
|Monetary fund||818,844,330|559,174,466|
|Financial assets measured at the fair value and the variation of which is||||
|recorded into the current profit and loss||||
|Derivative financial assets||||
|Bills receivable||33,180,494|41,645,203|
|Accounts receivable|15.1|12,408,787|7,805,333|
|Advance payment||453,842|99,673|
|Interest receivable||87,014|76,646|
|Dividends receivable||2,238,064|407,495,922|
|Other receivables|15.2|509,269,034|592,274,075|
|Inventories||393,024,758|348,042,053|
|Assets held for sale||2,000,197|2,000,197|
|Non-current assets due within one year||||

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
|||||
|-|-|-|-|
|Item|Note|Ending balance|Beginning balance|
|Other current assets||34,997,149|29,706,058|
|Total current assets||1,806,503,669|1,988,319,626|
|Non-current assets:||||
|Available-for-sale financial assets||||
|Held-to-maturity investments||||
|Long-term receivables||||
|Long-term equity investments|15.3|4,617,128,388|4,511,202,204|
|Investment real estate||17,877,379|18,467,989|
|Fixed assets||273,244,802|288,150,901|
|Construction in progress||11,388,924|6,756,349|
|Construction materials||||
|Disposal of fixed assets||||
|Productive biological assets||120,973,169|119,572,539|
|Oil and gas assets||||
|Intangible assets||68,433,643|69,623,219|
|Development expenditure||||
|Goodwill||||
|Long-term prepaid expenses||||
|Deferred tax assets||22,493,100|28,787,907|
|Other non-current assets||3,721,606,444|3,718,674,166|
|Total non-current assets||8,853,145,849|8,761,235,274|
|Total assets||10,659,649,518|10,749,554,900|
|Current liabilities:||||
|Short-term loans||200,000,000|600,000,000|
|Financial liabilities measured at the fair value and the variation of which||||
|is recorded into the current profit and loss||||
|Derivative financial liabilities||||
|Bills payable||||
|Accounts payable||82,489,858|97,833,124|
|Advances from customers||6,000,000|6,000,000|
|Employee remunerations||59,439,264|70,108,076|
|Taxes payable||5,443,037|14,569,690|
|Interest payable||238,356|652,500|
|Dividends payable||||
|Other payables||573,572,022|544,713,172|
|Liabilities held for sale||||
|Non-current liabilities due within one year||||
|Other current liabilities||3,693,054|3,953,054|
|Total current liabilities||930,875,591|1,337,829,616|
|Non-current liabilities:||||
|Long-term borrowings||||
|Bonds payable||||
|Including: Preferred stock||||
|Perpetual capital securities||||
|Long-term accounts payable||||
|Long-term employee remuneration payable||||

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
|||||
|-|-|-|-|
|Item|Note|Ending balance|Beginning balance|
|Special accounts payable||||
|Estimated liabilities||||
|Deferred income||11,253,946|12,970,473|
|Deferred tax liabilities||||
|Other non-current liabilities||2,235,802|2,235,802|
|Total non-current liabilities||13,489,748|15,206,275|
|Total liabilities||944,365,339|1,353,035,891|
|Owner’s equity:||||
|Capital stock||685,464,000|685,464,000|
|Other equity instruments||||
|Including: Preferred stock||||
|Perpetual capital securities||||
|Capital surplus||557,222,454|557,222,454|
|Minus: Treasury stock||||
|Other comprehensive income||||
|Special reserves||||
|Surplus reserves||342,732,000|342,732,000|
|Retained earnings||8,129,865,725|7,811,100,555|
|Total owner’s equities||9,715,284,179|9,396,519,009|
|Total liabilities and owner’s equities||10,659,649,518|10,749,554,900|

 Legal Representative: Zhou Hongjiang Accounting Supervisor: Jiang Jianxun Accounting Department Manager: Jiang Jianxun
2.3 Consolidated profit statement
Compiling unit: Yantai Changyu Pioneer Wine Co., Ltd. Unit: Yuan
|||||
|-|-|-|-|
|Item|Note|Sum of current period|Sum of prior period|
|1. Total operating income||2,828,230,064|2,767,098,197|
|Including: Operating income|7.38|2,828,230,064|2,767,098,197|
|Interest income||||
|Earned premium||||
|Handling fee and commission income||||
|2. Total operating costs||2,018,939,458|1,890,800,616|
|Including: Operating costs|7.38|974,557,292|925,754,133|
|Interest expenditure||||
|Handling fees and commission expenditure||||
|Premium rebate||||
|Net amount of indemnity expenditure||||
|Net amount of the withdrawn reserve fund for insurance||||
|contract||||
|Policy bonus payment||||
|Amortized reinsurance expenditures||||
|Taxes and surcharges|7.39|165,276,251|160,473,998|
|Selling expenses|7.40|710,659,033|668,735,726|
|Administrative expenses|7.41|160,091,888|130,542,386|

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
|||||
|-|-|-|-|
|Financial expenses|7.42|13,085,942|11,147,949|
|Loss on impairment of assets|7.43|-4,730,948|-5,853,576|
|Plus: Fair value change profit (loss is listed with "-")||||
|Investment profit (loss is listed with "-")||||
|Including: Investment profit for joint-run business and joint||||
|venture||||
|Exchange income (loss is listed with "-")||||
|Income from asset disposal (loss is listed with "-")|7.44|93,958|-495,071|
|Other income|7.45|37,982,878||
|3. Operating profit (loss is listed with "-")||847,367,442|875,802,510|
|Plus: Non-operating income|7.46|2,006,392|23,147,605|
|Minus: Non-operating expenses|7.47|1,392,362|186,568|
|4. Total profits (total loss is listed with "-")||847,981,472|898,763,547|
|Minus: Income tax expenses|7.48|211,979,735|228,752,790|
|5. Net profit (net loss is listed with "-")||636,001,737|670,010,757|
|5.1 Net profit from continuing operation (net loss is listed with||636,001,737|670,010,757|
|"-")||||
|5.2 Net profit from terminating operation (net loss is listed with||||
|"-")||||
|Net profit attributable to owner of the parent company||635,837,405|670,069,054|
|Minority interest income||164,332|-58,297|
|6. Net after-tax amount of other comprehensive income|7.49|-11,126,413|1,767,741|
|Net after-tax amount of other comprehensive income attributable to||-9,230,820|1,458,809|
|owner of the parent company||||
|6.1 Other comprehensive income not to be reclassified into profit and||||
|loss later||||
|6.1.1 Net liabilities or net assets change after remeasuring and||||
|resetting the benefit plans||||
|6.1.2 Share enjoyed in other comprehensive income not to be||||
|reclassified into profit and loss in invested unit under equity law||||
|6.2 Other comprehensive income to be reclassified into profit and||-9,230,820|1,458,809|
|loss later||||
|6.2.1 Share enjoyed in other comprehensive income to be reclassified||||
|into profit and loss in invested unit under equity law||||
|6.2.2 Profit and loss from changes in fair value of financial assets for||||
|sale||||
|6.2.3 Profit and loss from reclassification of held-to-maturity||||
|investment into fair value of financial assets for sale||||
|6.2.4 Effective part of profit and loss of cash-flow hedge||||
|6.2.5 Difference in translation of Foreign Currency Financial||-9,230,820|1,458,809|
|Statement||||
|6.2.6 Other||||
|Net after-tax amount of other comprehensive income attributable to||-1,895,593|308,932|
|minority shareholders||||
|7. Total comprehensive income||624,875,324|671,778,498|
|(1) Attributable to owner of the parent company||626,606,585|671,527,863|
|(2) Attributable to minority shareholders||-1,731,261|250,635|
|8. Earnings per share||||
|8.1 Basic earnings per share||0.93|0.98|
|8.2 Diluted earnings per share||0.93|0.98|

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report Legal Representative: Zhou Hongjiang Accounting Supervisor: Jiang Jianxun Accounting Department Manager: Jiang Jianxun
2.4 Profit statement of the parent company
Compiling unit: Yantai Changyu Pioneer Wine Co., Ltd. Unit: Yuan
|||||
|-|-|-|-|
|Item|Note|Sum of current period|Sum of prior period|
|1. Operating income|15.4|408,845,211|831,820,503|
|Minus: Operating costs|15.4|352,646,989|737,950,378|
|Taxes and surcharges||24,463,375|48,865,790|
|Selling expenses||||
|Administrative expenses||40,187,747|40,078,068|
|Financial expenses||-15,151,608|9,292,969|
|Loss on impairment of assets||||
|Plus: Fair value change profit (loss is listed with "-")||||
|Investment profit (loss is listed with "-")|15.5|312,409,576|66,127,980|
|Including: Investment profit for joint-run business and joint||||
|venture||||
|Income from asset disposal (loss is listed with "-")||75,000|10,448|
|Other income||1,976,527||
|2. Operating profit (loss is listed with "-")||321,159,811|61,771,726|
|Plus: Non-operating income||56,479|1,001,523|
|Minus: Non-operating expenses||528|20,257|
|3. Total profits (total loss is listed with "-")||321,215,762|62,752,992|
|Minus: Income tax expenses||2,450,592|-681,003|
|4. Net profit (net loss is listed with "-")||318,765,170|63,433,995|
|4.1 Net profit from continuing operation (net loss is listed with "-")||318,765,170|63,433,995|
|4.2 Net profit from terminating operation (net loss is listed with "-")||||
|5. Net after-tax amount of other comprehensive income||||
|5.1 Other comprehensive income not to be reclassified into profit and||||
|loss later||||
|5.1.1 Net liabilities or net assets change after remeasuring and||||
|resetting the benefit plans||||
|5.1.2 Share enjoyed in other comprehensive income not to be||||
|reclassified into profit and loss in invested unit under equity law||||
|5.2 Other comprehensive income to be reclassified into profit and||||
|loss later||||
|5.2.1 Share enjoyed in other comprehensive income to be reclassified||||
|into profit and loss in invested unit under equity law||||
|5.2.2 Profit and loss from changes in fair value of financial assets for||||
|sale||||
|5.2.3 Profit and loss from reclassification of held-to-maturity||||
|investment into fair value of financial assets for sale||||
|5.2.4 Effective part of profit and loss of cash-flow hedge||||
|5.2.5 Difference in translation of Foreign Currency Financial||||
|Statement||||
|5.2.6 Other||||
|6. Total comprehensive income||318,765,170|63,433,995|
|7. Earnings per share||||
|7.1 Basic earnings per share||0.47|0.09|

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
||||
|-|-|-|
|7.2 Diluted earnings per share|0.47|0.09|

 Legal Representative: Zhou Hongjiang Accounting Supervisor: Jiang Jianxun Accounting Department Manager: Jiang Jianxun
2.5 Consolidated cash flow statement
Compiling unit: Yantai Changyu Pioneer Wine Co., Ltd. Unit: Yuan
|||||
|-|-|-|-|
|Item|Note|Sum of current period|Sum of prior period|
|1. Cash flows from operating activities:||||
|Cash received from sales of goods and rending of||2,680,388,050|2,524,565,138|
|services||||
|Net increase in customer and interbank deposits||||
|Net increase in borrowings from central bank||||
|Net increase in borrowings from other financial||||
|institutions||||
|Cash received from receiving insurance premium of||||
|original insurance contract||||
|Net cash received from reinsurance business||||
|Net increase in policy holder deposits and investment||||
|funds||||
|Net increase after disposal of financial assets measured||||
|at the fair value and the variation of which is recorded||||
|into the current profit and loss||||
|Cash received from collecting interest, handling fees||||
|and commission||||
|Net increase in borrowings||||
|Net increase in repurchasement business funds||||
|Tax refund received||26,089,608|12,777,072|
|Other cash received related to operating activities|7.50|42,343,021|38,889,912|
|Subtotal of cash flows of operating activities||2,748,820,679|2,576,232,122|
|Cash paid for goods and services||677,552,938|640,732,974|
|Net increase in customer loans and advances||||
|Net increase in deposits in central bank and interbank||||
|deposits||||
|Cash paid to original insurance contract payments||||
|Cash paid to interest, handling fees and commission||||
|Cash paid to policy bonus||||
|Cash paid to and on behalf of employees||278,814,385|239,805,346|
|Cash paid for taxes and expenses||802,722,798|842,815,705|
|Other cash paid related to operating activities|7.50|436,977,086|432,517,778|
|Sub-total of cash outflows of operating activities||2,196,067,207|2,155,871,803|
|Net cash flow from operating activities||552,753,472|420,360,319|
|2. Cash flow from investing activities:||||
|Cash received from disinvestment||||
|Cash received from withdrawal of fixed deposits||305,000,000|3,000,000|
|Cash received from obtaining investment profit||2,342,015|25,550|
|Cash received from disposal of fixed assets, intangible||471,130|237,161|
|assets and other long-term assets||||
|Net cash received from disposal of branch and other||||

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
|||||
|-|-|-|-|
|Item|Note|Sum of current period|Sum of prior period|
|business unit||||
|Other cash received related to investing activities||||
|Subtotal of cash flows of investment activities||307,813,145|3,262,711|
|Cash paid to acquire fixed assets, intangible assets and||154,464,274|282,149,010|
|other long-term assets||||
|Cash for investment||||
|Cash paid for purchasing fixed deposits||340,000,000|201,000,000|
|Net increase in hypothecated loan||||
|Net cash paid for acquiring branch and other business||104,566,419||
|unit||||
|Other cash paid related to investment activities|7.50||317,654,642|
|Subtotal of cash outflows of investment activities||599,030,693|800,803,652|
|Net cash flow from investing activities||-291,217,548|-797,540,941|
|3. Cash flow from financing activities||||
|Cash received from acquiring investment|||48,396,726|
|Including: cash received from acquiring minority|||48,396,726|
|shareholders investment by branch||||
|Cash received from acquiring loans||669,905,706|773,435,000|
|Cash received from issuing bonds||||
|Other cash received related to financing activities|7.50|23,521,431|1,303,473|
|Subtotal cash flows of financing activities||693,427,137|823,135,199|
|Cash paid for paying debts||658,512,141|451,386,980|
|Cash paid for distributing dividend and profit or paying||21,265,533|17,869,513|
|interest||||
|Including: dividend and profit paid to minority||||
|shareholders by branch||||
|Other cash paid related to financing activities|7.50|20,000,000||
|Subtotal of cash outflows of financing activities||699,777,674|469,256,493|
|Net cash flow from financing activities||-6,350,537|353,878,706|
|4. Influences of exchange rate fluctuation on cash||-7,404,199|-4,152,485|
|and cash equivalents||||
|5. Net Increase in cash and cash equivalents||247,781,188|-27,454,401|
|Plus: balance at the beginning of the period of cash and||1,180,889,274|1,256,942,304|
|cash equivalents||||
|6. Balance at the end of the period of cash and cash||1,428,670,462|1,229,487,903|
|equivalents||||

Legal Representative: Zhou Hongjiang Accounting Supervisor: Jiang Jianxun Accounting Department Manager: Jiang Jianxun
2.6 Cash flow statement of the parent company
Compiling unit: Yantai Changyu Pioneer Wine Co., Ltd. Unit: Yuan
||||
|-|-|-|
|Item|Sum of current period|Sum of prior period|
|1. Cash flows from operating activities:|||
|Cash received from sales of goods and rending of services|275,862,358|570,587,513|
|Tax refund received|||
|Other cash received related to operating activities|100,163,394|385,490,644|
|Subtotal of cash flows of operating activities|376,025,752|956,078,157|

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
||||
|-|-|-|
|Item|Sum of current period|Sum of prior period|
|Cash paid for goods and services|200,935,534|269,148,068|
|Cash paid to and on behalf of employees|43,647,320|52,895,854|
|Cash paid for taxes and expenses|43,132,327|169,319,730|
|Other cash paid related to operating activities|19,942,485|62,494,076|
|Sub-total of cash outflows of operating activities|307,657,666|553,857,728|
|Net cash flow from operating activities|68,368,086|402,220,429|
|2. Cash flow from investing activities:|||
|Cash received from disinvestment|||
|Cash received from withdrawal of fixed deposits|305,000,000|3,000,000|
|Cash received from obtaining investment profit|720,009,450|198,082,845|
|Net cash received from disposal of fixed assets, intangible assets and|538,055.18|206,280|
|other long-term assets|||
|Net cash received from disposal of branch and other business unit|||
|Other cash received related to investing activities|||
|Subtotal of cash flows of investment activities|1,025,547,505.18|201,289,125|
|Cash paid to acquiring fixed assets, intangible assets and other|11,968,401|3,295,270|
|long-term assets|||
|Cash for investment|105,926,184|329,440,824.11|
|Cash paid for purchasing fixed deposits|340,000,000|104,999,999.89|
|Net cash paid for acquiring branch and other business unit|||
|Other cash paid related to investment activities|||
|Subtotal of cash outflows of investment activities|457,894,585|437,736,094|
|Net cash flow from investing activities|567,652,920.18|-236,446,969|
|3. Cash flow from financing activities|||
|Cash received from acquiring investment|||
|Cash received from acquiring loans|200,000,000|700,000,000|
|Cash received from issuing bonds|||
|Other cash received related to financing activities|||
|Subtotal cash flows of financing activities|200,000,000|700,000,000|
|Cash paid for debts|600,000,000|514,667,600|
|Cash paid to distribute dividend, profit or pay interest|11,660,417|9,720,581|
|Other cash paid related to financing activities|||
|Subtotal of cash outflows of financing activities|611,660,417|524,388,181|
|Net cash flow from financing activities|-411,660,417|175,611,819|
|4. Influences of exchange rate fluctuation on cash and cash|||
|equivalents|||
|5. Net Increase in cash and cash equivalents|224,360,589.18|341,385,279|
|Plus: balance at the beginning of the period of cash and cash|493,568,866|238,003,198|
|equivalents|||
|6. Balance at the end of the period of cash and cash equivalents|717,929,455.18|579,388,477|

 Legal Representative: Zhou Hongjiang Accounting Supervisor: Jiang Jianxun Accounting Department Manager: Jiang Jianxun
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report 2.7 Consolidatedowner’s equity changing list
Unit: Yuan
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||This period|||||||||||||
||Owners’ equity of the parent company|||||||||||||
|||Other equity instrumentsPerpetual|||Capital|||Special|Surplus|General risk|Undistributed|Minorityshareholders’||
|Item||||||Minus:|Other||||||Total owners’equity|
||Capital stock|Preferredstock|capitalsecurities|Other|reserves|Treasurystock|comprehensiveincome|reserves|reserves|preparation|profits|equity||
|1. Balance at the end of last||||||||||||||
||685,464,000||||565,955,441||3,109,240||342,732,000||7,309,081,618|271,636,379|9,177,978,678|
|year||||||||||||||
|Plus: Accounting policies||||||||||||||
|changing||||||||||||||
|Previous error correction||||||||||||||
|Business combination under||||||||||||||
|common control||||||||||||||
|Other||||||||||||||
|2. Balance at the beginning of||||||||||||||
||685,464,000||||565,955,441||3,109,240||342,732,000||7,309,081,618|271,636,379|9,177,978,678|
|this year||||||||||||||
|3. Increased or decreased||||||||||||||
|amount in this period (reducing|||||||-9,230,820||||635,837,405|15,055,540|641,662,125|
|amount is listed with "-")||||||||||||||
|3.1 Total comprehensive||||||||||||||
||||||||-9,230,820||||635,837,405|-1,731,261|624,875,324|
|income||||||||||||||
|3.2 Owners' invested and||||||||||||||
|||||||||||||17,532,822|17,532,822|
|reduced capital||||||||||||||
|3.2.1 Shareholders’ invested||||||||||||||
|common stock||||||||||||||
|3.2.2 Other equity instrument||||||||||||||
|holders’ invested capital||||||||||||||
|3.2.3 Amount of shares paid||||||||||||||

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
|||||||||
|-|-|-|-|-|-|-|-|
|and reckoned in owners' equity||||||||
|3.2.4 Other||||||17,532,822|17,532,822|
|3.3 Profit distribution||||||-746,021|-746,021|
|3.3.1 Accrued surplus reserves||||||||
|3.3.2 Accrued general risk||||||||
|preparation||||||||
|3.3.3 Distribution to owners||||||||
|||||||-746,021|-746,021|
|(or shareholders)||||||||
|3.3.4 Other||||||||
|3.4 Internal transfer of owners'||||||||
|equity||||||||
|3.4.1 Capital reserves||||||||
|transferred and increased||||||||
|capital (or capital stock)||||||||
|3.4.2 Surplus reserves||||||||
|transferred and increased||||||||
|capital (or capital stock)||||||||
|3.4.3 Surplus reserves covering||||||||
|deficit||||||||
|3.4.4 Other||||||||
|3.5 Special reserves||||||||
|3.5.1 Withdrawal in this period||||||||
|3.5.2 Usage in this period||||||||
|3.6 Other||||||||
|4. Balance at the end of this|||||||9,819,640,803|
||685,464,000|565,955,441|-6,121,580|342,732,000|7,944,919,023|286,691,919||
|period||||||||

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report Unit: Yuan
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Prior period|||||||||||||
||Owners’ equity of the parent company|||||||||||||
|||Other equity instruments||||||||||Minority||
|Item||||||Minus:|Other||||||Total owners’|
||||Perpetual||Capital|||Special|Surplus|General risk|Undistributed|shareholders’||
||Capital stock|Preferred||||Treasury|comprehensive||||||equity|
||||capital||reserves|||reserves|reserves|preparation|profits|equity||
|||stock||Other||stock|income|||||||
||||securities|||||||||||
|1. Balance at the end of last||||||||||||||
||685,464,000||||565,955,441||-5,259,014||342,732,000||6,620,118,562|190,473,697|8,399,484,686|
|year||||||||||||||
|Plus: Accounting policies||||||||||||||
|changing||||||||||||||
|Previous error correction||||||||||||||
|Business combination under||||||||||||||
|common control||||||||||||||
|Other||||||||||||||
|2. Balance at the beginning of||||||||||||||
||685,464,000||||565,955,441||-5,259,014||342,732,000||6,620,118,562|190,473,697|8,399,484,686|
|this year||||||||||||||
|3. Increased or decreased||||||||||||||
|amount in this period (reducing|||||||8,368,254||||688,963,056|81,162,682|778,493,992|
|amount is listed with "-")||||||||||||||
|3.1 Total comprehensive||||||||||||||
||||||||8,368,254||||1,031,695,056|3,594,080|1,043,657,390|
|income||||||||||||||
|3.2 Owners' invested and||||||||||||||
|||||||||||||78,236,726|78,236,726|
|reduced capital||||||||||||||
|3.2.1 Shareholders’ invested||||||||||||||
|common stock||||||||||||||
|3.2.2 Other equity instrument||||||||||||||
|holders’ invested capital||||||||||||||
|3.2.3 Amount of shares paid||||||||||||||

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
|||||||||
|-|-|-|-|-|-|-|-|
|and reckoned in owners' equity||||||||
|3.2.4 Other||||||78,236,726|78,236,726|
|3.3 Profit distribution|||||-342,732,000|-668,124|-343,400,124|
|3.3.1 Drew surplus reserves||||||||
|3.3.2 Drew general risk||||||||
|preparation||||||||
|3.3.3 Distribution to owners (or||||||||
||||||-342,732,000|-668,124|-343,400,124|
|shareholders)||||||||
|3.3.4 Other||||||||
|3.4 Internal transfer of owners'||||||||
|equity||||||||
|3.4.1 Capital reserves||||||||
|transferred and increased||||||||
|capital (or capital stock)||||||||
|3.4.2 Surplus reserves||||||||
|transferred and increased||||||||
|capital (or capital stock)||||||||
|3.4.3 Surplus reserves covering||||||||
|deficit||||||||
|3.4.4 Other||||||||
|3.5 Special reserves||||||||
|3.5.1 Accrual in this period||||||||
|3.5.2 Usage in this period||||||||
|3.6 Other||||||||
|4. Balance at the end of this|||||||9,177,978,678|
||685,464,000|565,955,441|3,109,240|342,732,000|7,309,081,618|271,636,379||
|period||||||||

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report 2.8Owner’s equity changing list of the parent company
Unit: Yuan
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||This period|||||||||||
|||Other equity instruments||||Minus:|Other|||||
|Item|Capital||||Capital|||Special|Surplus|Undistributed|Total owners’|
|||Preferred|Perpetual capital|||Treasury|comprehensive|||||
||stock|||Other|reserves|||reserves|reserves|profits|equity|
|||stock|securities|||stock|income|||||
|1. Balance at the end of last year|685,464,000||||557,222,454||||342,732,000|7,811,100,555|9,396,519,009|
|Plus: Accounting policies changing||||||||||||
|Previous error correction||||||||||||
|Other||||||||||||
|2. Balance at the beginning of this year|685,464,000||||557,222,454||||342,732,000|7,811,100,555|9,396,519,009|
|3. Increased or decreased amount in this||||||||||||
|||||||||||318,765,170|318,765,170|
|period (reducing amount is listed with "-")||||||||||||
|3.1 Total comprehensive income||||||||||318,765,170|318,765,170|
|3.2 Owners' invested and reduced capital||||||||||||
|3.2.1 Shareholders’ invested common stock||||||||||||
|3.2.2 Other equity instrument holder’||||||||||||
|invested capital||||||||||||
|3.2.3 Amount of shares paid and reckoned in||||||||||||
|owners' equity||||||||||||
|3.2.4 Other||||||||||||
|3.3 Profit distribution||||||||||||
|3.3.1 Drew surplus reserves||||||||||||
|3.3.2 Distribution to owners (or||||||||||||
|shareholders)||||||||||||
|3.3.3 Other||||||||||||

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
|||||||
|-|-|-|-|-|-|
|3.4 Internal transfer of owners' equity||||||
|3.4.1 Capital reserves transferred and||||||
|increased capital (or capital stock)||||||
|3.4.2 Surplus reserves transferred and||||||
|increased capital (or capital stock)||||||
|3.4.3 Surplus reserves covering deficit||||||
|3.4.4 Other||||||
|3.5 Special reserves||||||
|3.5.1 Accrual in this period||||||
|3.5.2 Usage in this period||||||
|3.6 Other||||||
|4. Balance at the end of this period|685,464,000|557,222,454|342,732,000|8,129,865,725|9,715,284,179|

 Unit: Yuan
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||Prior period|||||||||||
|||Other equity instruments||||Minus:|Other|||||
|Item|Capital||||Capital|||Special|Surplus|Undistributed|Total owners’|
|||Preferred|Perpetual capital|||Treasury|comprehensive|||||
||stock||||reserves|||reserves|reserves|profits|equity|
|||stock|securities|Other||stock|income|||||
|1. Balance at the end of last year|685,464,000||||557,222,454||||342,732,000|7,360,234,545|8,945,652,999|
|Plus: Accounting policies changing||||||||||||
|Previous error correction||||||||||||
|Other||||||||||||
|2. Balance at the beginning of this year|685,464,000||||557,222,454||||342,732,000|7,360,234,545|8,945,652,999|
|3. Increased or decreased amount in this||||||||||||
|||||||||||450,866,010|450,866,010|
|period (reducing amount is listed with "-")||||||||||||
|3.1 Total comprehensive income||||||||||793,598,010|793,598,010|
|3.2 Owners' invested and reduced capital||||||||||||
|3.2.1 Shareholders’ invested common stock||||||||||||

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
|||||||
|-|-|-|-|-|-|
|3.2.2 Other equity instrument holder’||||||
|invested capital||||||
|3.2.3 Amount of shares paid and reckoned in||||||
|owners' equity||||||
|3.2.4 Other||||||
|3.3 Profit distribution||||-342,732,000|-342,732,000|
|3.3.1 Drew surplus reserves||||||
|3.3.2 Distribution to owners (or shareholders)||||-342,732,000|-342,732,000|
|3.3.3 Other||||||
|3.4 Internal transfer of owners' equity||||||
|3.4.1 Capital reserves transferred and||||||
|increased capital (or capital stock)||||||
|3.4.2 Surplus reserves transferred and||||||
|increased capital (or capital stock)||||||
|3.4.3 Surplus reserves covering deficit||||||
|3.4.4 Other||||||
|3.5 Special reserves||||||
|3.5.1 Accrual in this period||||||
|3.5.2 Usage in this period||||||
|3.6 Other||||||
|4. Balance at the end of this period|685,464,000|557,222,454|342,732,000|7,811,100,555|9,396,519,009|

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report 18
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report 3. Company profile
Yantai Changyu Pioneer Wine Co., Ltd. (the “Company” or the “Joint-stock Company”) was incorporated as a joint-stock limited company in accordance with the Company Law of thePeople’s Republic of China (the “PRC”) in the merger and reorganization carried out by Yantai Changyu Group Co., Ltd. (“Changyu Group Company”) with its assets and liabilities in relation to wine business. The Company and its subsidiary companies (hereinafter collectively referred to as the “Group”) are engaged in the production and sale of wine, brandy and champagne, planting and purchase of grapes, development of tourism resources, etc. The registered address of the Company is Yantai City, Shandong Province, and the office address of the headquarters is 56 Dama Road, Zhifu District, Yantai City, Shandong Province.
As at June 30, 2018, the Company issued 685,464,000 shares accumulatively. Refer to Note 7.33 for the details.
The parent company of the Group is Changyu Group Company incorporated in China, which was ultimately and actually controlled by four parties, including Yantai Guofeng Investment Holding Co., Ltd., ILLVA Saronno Holding Spa, International Finance Corporation and Yantai Yuhua Investment& Development Co., Ltd.
The financial statement and the consolidated financial statement of the Company were approved by the Board of Directors on August 28, 2018.
The scope of the consolidated financial statement in this period can be seen in Note 9 “Equity in other entities”. The scope changes of the consolidated financial statement in this period can be seen in Note 8 “Changes of the consolidated scope”.
4. Preparation basis of financial statement
4.1 Preparation basis
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report The Group implements the Accounting Standards for Business Enterprises (including the new and revised editions published in 2014) (“ASBE”) published by the Ministry of Finance and relevant regulations thereof. In addition, the Group also discloses relevant financial information in accordance with Information Disclosure and Preparation Rules for Enterprises Publically Issuing Securities No.15 ---- General Rules for Financial Statement (Revised in 2014).
Note-accounting basis and pricing principle
The note-accounting basis of financial accounting adopted by the Group is accrual system and the measurement basis adopted by the Group in preparing its financial statement is historical cost. Subsequently, if the assets are impaired, impairment provisions are made in accordance with relevant accounting standards.
When the historical cost measurement is used, the assets are measured by the amount of cash or cash equivalent when the assets are purchased or the fair value of the consideration. The liabilities are measured by the actually received funds or assets for performing the current obligations, or the contract amount for performing the current obligations, or the amount of cash or cash equivalent paid for anticipated liabilities in the daily activities.
Fair value refers to a price received for selling an asset or paid for transferring a liability by the market participant in orderly transactions on the measurement date. No matter the fair value is observable or estimated by the valuation technique, the fair value measured and disclosed in this financial statement is recognized on this basis.
The fair value measurement is divided into three levels based on the observable degree of the input fair value and the importance of this input value on the whole fair value measurement:
*The input value of the first level is the unadjusted price of the same assets or liabilities which can be acquired in an active market on the measurement date.
*The input value of the second level is the directly or indirectly observable input value of relevant assets or liabilities except that of the first level.
*The input value of the third level is the unobservable input value of relevant assets or liabilities.
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report 4.2 Continuous operation
The Group has appraised the ability of continuous operation for 12 months from June 30, 2018, and no issues or situations causing major doubts to this ability are found. Therefore, this financial statement is prepared on the basis of the continuous operation assumption.
5. Main accounting policies and accounting estimates
5.1 Statement on compliance with ASBE
This financial statement fulfills the requirement of ASBE and gives a true and integrated view of the financial status and the consolidated financial status as at June 30, 2018, as well as the operating result, the consolidated operating result, the cash flow and the consolidated cash flow of the Company from January to June 2018.
5.2 Accounting period
The accounting period of the Group is from January 1 to December 31.
5.3 Operating cycle
The operating cycle refers to the period from the enterprise purchases the assets used for processing to the cash or cash equivalent is realized. The operating cycle of the Company is 12 months.
5.4 Recording currency
Since Renminbi (RMB) is the currency of the main economic environment in which the Company and the domestic subsidiary companies thereof are situated, the Company and the subsidiary companies thereof adopt RMB as the recording currency. The overseas subsidiary companies thereof determine Euro, Chilean Peso and Australian Dollar as the recording currency according to the main economic environment in which they are situated. The currency in this financial statement prepared by the Group is RMB.
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report 5.5 Accounting treatment method for business combination under common control and non-common control
5.5.1 Business combination and goodwill under non-common control
A business combination under non-common control is a business combination in which all of the combining enterprises are not ultimately controlled by the same party or parties before and after the combination.
The combination cost shall be the fair value of the assets paid, the liabilities incurred or assumed or the equity instruments issued by the acquirer in exchange for the control over the acquiree. The intermediary expenses such as audit, legal services and assessment consultation and other related management expenses paid by the acquirer for business combination are included in the current profit and loss when they occur.
The identifiable assets, liabilities and contingent liabilities which are obtained from the acquiree in the business combination and meet the recognition conditions shall be measured on the acquisition date according to the fair value thereof.
Where the cost of combination exceeds theacquirer’s interest in the fair value of theacquiree’s identifiable net assets, the difference is treated as an asset and recognised as goodwill, which is measured at cost on initial recognition. Where the cost of combination is less than theacquirer’s interest in the fair value of theacquiree’s identifiable net assets, the acquirer firstly re-assesses the measurement of the fair values of theacquiree’s identifiable assets, liabilities and contingent liabilities and measurement of the cost of combination. If after that reassessment, the cost of combination is still less than theacquirer’s interest in the fair value of theacquiree’s identifiable net assets, the acquirer recognises the remaining difference immediately in profit or loss for the current period.
The goodwill formed due to business combination shall be separately listed in the consolidated financial statement and measured on the basis of the cost minus the accumulative impairment provision.
5.6 Compiling methods of consolidated financial statement
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report The consolidation scope of the consolidated financial statement is determined on the basis of control. Control means that the investor holds the power in the invested party, obtains variable returns by participating in relevant activities of the invested party and has the ability to affect the amount of the returns by using the power on the invested party. Once any change of the relevant facts and situations results in any change of relevant elements of the above definition of Control, the Group will carry out reappraisal.
The merger of any subsidiary company starts from the date when the Group acquires the power to control this subsidiary company, while the termination of any subsidiary company ends in the date when the Group losses the power to control this subsidiary company.
As for any subsidiary company obtained in a business combination under non-common control, the business result and the cash flow thereof since the acquisition date (date of obtaining the control power) shall have been properly included in the consolidated income statement and the consolidated cash flow statement.
The principal accounting policies and accounting period adopted by the subsidiary companies shall be determined in accordance with the accounting policies and accounting period uniformly regulated by the Company.
The influence of the internal transaction between the Company and the subsidiary companies as well as among subsidiary companies on the consolidated financial statement shall be neutralized at the time of combination.
The shares in the owner's equity of the subsidiary companies, which do not belong to the parent company, shall be recognized as the minority equity and listed under the item of “minority equity” of theowner’s equity in the balance sheet. The shares in the current profit and loss of the subsidiary companies, which belong to the minority equity, shall be listed under the item of “minority equity” of the net profit in the consolidated income statement.
If the loss of the subsidiary companies borne by minority shareholders exceeds the shares of the owner's equity entitled therein by the minority shareholders at the beginning of the period, the difference shall be still credited against the minority equity.
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report 5.7 Recognition standards of cash and cash equivalents
Cash comprises cash on hand and demand deposit of the Company. Cash equivalents refer to short-term highly liquid investments which are readily convertible into known amount of cash with an insignificant risk of changes in value.
5.8 Foreign currency transaction and foreign currency statement translation
5.8.1 Foreign currency transaction
At the time of initial recognition of a foreign currency transaction, the amount of the foreign currency shall be translated into the amount of the recording currency at the spot exchange rate on the transaction date.
The monetary items of the foreign currency transaction shall be translated into RMB at the spot change rate on the balance sheet date. The currency translation difference generated by the difference between the spot change rate on the balance sheet date and the spot change rate at the initial recognition or on the previous balance sheet date shall be included in the current profit and loss, except:① the currency translation difference of the dedicated foreign currency loan that meets the capitalization condition shall be included in the cost of assets as capitalization during the capitalization period;② the currency translation difference of the arbitrage tool to avoid foreign exchange risk shall be treated according to the hedge accounting method;③ the currency translation difference of the available-for-sale monetary items generated by the book value other than the amortized cost shall be recognized as other comprehensive income and included in other comprehensive income.
The amount of the non-monetary items of the foreign currency transaction measured by historical cost shall be still translated into the amount in the recording currency at the spot exchange rate on the transaction date. The non-monetary items of the foreign currency transaction measured by the fair value shall be translated at the spot exchange rate on the fair value date, and the difference between the amount in the recording currency and the amount in original recording currency shall be treated as the change of the fair value (including exchange rate movement) and shall be included in the current profit and loss or recognized as other comprehensive income.
5.8.2 Translation of foreign currency financial statement
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report In order to compile a consolidated financial statement, the foreign currency financial statement of overseas business shall be translated into RMB financial statement in accordance with the following methods: all asset and liability items in the balance sheet shall be translated at the spot exchange rate on the balance sheet date; the shareholders' equity items, except for the ones as "undistributed profits", shall be translated at the spot exchange rate at the time when they occur; all items and the items reflecting the accrual profit distribution in the profit statement shall be translated at the exchange rate similar to the spot exchange rate at the time when they occur; the undistributed profits at the beginning of the year shall be the translated to the undistributed profits at the end of the previous year; the undistributed profits at the end of the year shall be calculated and listed as the translated profit distribution items; and the difference between the asset items and the sum of the liability items and theshareholders’ equity items shall be recognized as other comprehensive income and included in the shareholder's equity.
The foreign currency cash flows and the cash flows of the overseas subsidiary companies shall be translated at the exchange rate similar to the spot exchange rate at the time when they occur; the amount of the cash and cash equivalents impacted by the exchange rate movement shall be, as a reconciling item, separately listed under “impact of exchange rate movement on cash and cash equivalents” in the cash flow statement.
The balance at the beginning of the year and the actual amount of the previous year shall be listed as the amount translated according to the financial statement of the previous year.
5.9 Financial instruments
When becoming a party to a contract of financial instruments, the Group shall recognize a financial asset or financial liability. The financial assets and financial liabilities shall be measured at their fair value at the time of initial recognition. For other categories of financial assets and financial liabilities, relevant transaction expenses thereof shall be included in the initially recognized amount.
5.9.1 Effective interest method
The effective interest method refers to the method by which the amortized cost and the interest income or expenditure of different installments are calculated in light of the effective interest rates of the
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report financial assets or financial liabilities (including a group of financial assets or financial liabilities). The effective interest rate refers to the interest rate adopted to cash the future cash flow of a financial asset or financial liability within the predicted term of existence or within a shorter applicable term into the current book value of the financial asset or financial liability.
When the effective interest rate is calculated, the Group predicts the future cash flow (taking no account of the future credit loss) on the basis of considering all the contractual provisions concerning the financial assets or financial liabilities, as well as all kinds of charges, transaction expenses, discounts, premiums, etc. which are paid, charged, and included in the effective interest rate between the contracting parties of the financial assets or liabilities.
5.9.2 Classification, recognition and measurement of financial assets
Financial assets are classified into the following categories when they are initially recognized: the financial assets which are measured at the fair value and the variation of which is included in the current profit and loss, the investments which will be held to their maturity, loans, accounts receivable and available-for-sale financial assets. The financial assets purchased and sold through common modes shall be recognized and terminated from recognition according to the accounting on the transaction date. The financial assets held by the Group are loans, accounts receivable and available-for-sale financial assets.
Loans and accounts receivable
Loans and accounts receivable refer to the non-derivative financial assets for which there is no quoted price in an active market and of which the repo amount is fixed or determinable. The financial assets classified by the Group into loans and accounts receivable include monetary capital, bills receivable, accounts receivable, interest receivable, dividends receivable and other receivables.
The loans and accounts receivable shall be subsequently measured at amortized cost by adopting the effective interest rate method. The profits or losses that occur when such loans and accounts receivable are terminated from recognition, impaired or amortized shall be included in the current profit and loss. Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are designated as available
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report for sale at the time of initial recognition and the financial assets other than those measured at their fair value and the variation of which is included in the current profit and loss, loans, accounts receivable and the investments which will be held to their maturity.
The equity instrument investment without quoted market price in an active market whose fair value cannot be reliably measured shall be measured by cost.
5.9.3 Impairment of financial assets
On each balance sheet date, the Group checks the book value of the financial assets. If there is any objective evidence indicating that a financial asset is impaired, the impairment provision is accrued. Objective evidence indicating the impairment of financial assets refers to those occurring after the initial recognition, have effect on the estimated future cash flow of the financial assets, and can be measured reliably.
The objective evidence indicating the impairment of the financial assets includes the following observable matters:
A serious financial difficulty occurs to the issuer or the debtor;
The debtor breaches any of the contractual stipulations, such as, failure to pay or delay of the payment of interest or principal;
The Group makes any concession due to economic, legal factors or other factors to the debtor which is in financial difficulties;
The debtor will probably become bankrupt or carry out other financial reorganizations;
The financial assets can no longer continue to be traded in an active market due to serious financial difficulties of the issuer;
It is impossible to identify whether the cash flow of a certain asset within a certain group of financial assets has decreased or not. But after making an overall appraisal according to the public data available, it is found that the estimated future cash flow of the said group of financial assets has indeed decreased since it was initially recognized and such decrease can be measured, including:
The payment ability of the debtor of the said group of financial assets worsens gradually;
The country or economic region where the debtor is situated has the conditions that may cause the financial assets to be unpaid.
A serious unfavourable change occurs to the operating technology, market, economic environment, legal environment of the issuer of the equity instruments that causes the investor of the equity instrumentscan’t recover the investment costs;
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report The fair value of the equity instrument investment has serious or permanent decline;
Other objective evidence showing the depreciation of the financial assets.
Impairment of financial assets measured by amortized cost
Where a financial asset measured at amortized cost is impaired, the book value of the said financial asset shall be written down to the current value of the predicted future cash flow determined according to the capitalization of original effective exchange rate (excluding the loss of future credits not yet occurred), and the amount as written down shall be recognized as loss of the impairment of the asset and shall be included into the current profit and loss. If there is any objective evidence proving that the value of the said financial asset has been restored, and it is objectively related to the events that occur after such loss is recognized, the impairment losses originally recognized shall be reversed. However, the reversed book value shall not be any more than the amortized costs of the said financial asset on the day of reverse under the assumption that no provision is made for the impairment.
An impairment test shall be made by the Group independently on the individually significant financial assets; with regard to not individually significant financial assets, an independent impairment test may be carried out, or they may be included in a combination of financial assets with similar credit risk characteristics so as to carry out an impairment-related test. Where, upon independent test, the financial asset (including the individually significant financial assets and not individually significant financial assets) has not been impaired, it shall be included in a combination of financial assets with similar credit risk characteristics so as to conduct another impairment test. Assets that are individually assessed for impairment and for which an impairment loss is or continues to be recognized shall not be included in the combination of the financial assets with similar credit risk characteristics for impairment test.
Impairment of available-for-sale financial assets measured by cost
When the equity instrument investment without quoted market price in an active market and the fair value of which cannot be reliably measured is impaired, the book value is decreased to the current value confirmed by the discounted future cash flow according to the current market return of the similar financial assets. The decreased amount is recognized as impairment loss and included in the current profit and loss. The impairment loss of this kind of financial assetscan’t be transferred back upon confirmation.
5.9.4 Transfer of financial assets
Where a financial asset satisfies any of the following conditions, it shall be terminated from recognition:① Where the contractual rights for collecting the cash flow of the said financial asset are terminated;② Where the said financial asset has been transferred and all the risks and rewards of the
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report financial asset have been substantially transferred to the receiver;③ Where the financial asset has been transferred, although the Group does not transfer or retain almost all the risks and rewards of the financial asset, the Group still waives the control over the financial asset.
Where the overall transfer of the financial asset satisfies the derecognition conditions, the difference between the book value of the transferred financial asset as well as the consideration received due to such transfer and the summation of the cumulative amount of the fair value of the asset that is originally included in other comprehensive income shall be included in the current profit and loss. 5.9.5 Classification, recognition and measurement of financial liabilities
The Group classifies the financial instruments or the components as financial liabilities or equity instruments at the time of initial recognition according to the contract terms of the issued financial instruments and the reflected economic essence rather than only the legal form, considering the definition of financial liabilities and equity instruments.
On initial recognition, financial liabilities are classified into financial liabilities at fair value through profit or loss and other financial liabilities. The financial liabilities in group are other financial liabilities, including short-term borrowings, notes payable, account payables, interest payables, other payables, non-current liabilities due within one year and long-term payables etc.
Other financial liabilities
Other financial liabilities are subsequently measured at amortised cost using the effective interest method, with gain or loss arising from derecognition or amortisation recognised in profit or loss.
5.9.6 Derecognition of financial liabilities
The Group derecognises a financial liability (or part of it) only when the underlying present obligation (or part of it) is discharged.
When the Group derecognises a financial liability or a part of it, it recognises the difference between the carrying amount of the financial liability (or part of the financial liability) derecognised and the consideration paid (including any non-cash assets transferred or new financial liabilities assumed) in
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report profit or loss.
5.9.7 Offsetting financial assets and financial liabilities
Where the Group has a legal right that is currently enforceable to set off the recognised financial assets and financial liabilities, and intends either to settle on a net basis, or to realise the financial asset and settle the financial liability simultaneously, a financial asset and a financial liability shall be offset and the net amount is presented in the balance sheet. Except for the above circumstances, financial assets and financial liabilities shall be presented separately in the balance sheet and shall not be offset.
5.9.8 Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. The Group does not recognise any changes in the fair value of equity instruments. The equity instruments transaction expenses deducted from equity.
The Group treats distribution to equity instrument holders as profit distributions. Shareholder equity is not affected by share dividend distributed.
5.10 Accounts Receivable
The Group believes that the individual receivables are all significant, and the corresponding receivables are individually tested for impairment, and individual recognition method is used to confirm bad debt provision.
5.11 Inventories
5.11.1 Categories of inventories
The Group's inventories mainly include raw materials, work in progress and finished goods. Inventories are initially measured at cost. Cost of inventories comprises all costs of purchase, costs of conversion and other expenditures incurred in bringing the inventories to their present location and condition.
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report 5.11.2 Valuation method of inventories upon delivery
The actual cost of inventories upon delivery is calculated using the weighted average method.
Agricultural products harvested are reported in accordance with the CAS 1 Inventories.
5.11.3 Basis for determining net realisable value of inventories and provision methods for decline in value of inventories
At the balance sheet date, inventories are measured at the lower of cost and net realisable value. If the net realisable value is below the cost of inventories, a provision for decline in value of inventories is made. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion, the estimated costs necessary to make the sale and relevant taxes. Net realisable value is determined on the basis of clear evidence obtained, and takes into consideration the purposes of holding inventories and effect of post balance sheet events.
Provision for decline in value of other inventories is made based on the excess of cost of inventory over its net realisable value on an item-by-item basis.
After the provision for decline in value of inventories is made, if the circumstances that previously caused inventories to be written down below cost no longer exist so that the net realisable value of inventories is higher than their cost, the original provision for decline in value is reversed and the reversal is included in profit or loss for the period.
5.11.4 Inventory count system
The perpetual inventory system is maintained for stock system.
5.11.5 Amortisation method for low cost and short-lived consumable items and packaging materials
Packaging materials and low cost and short-lived consumable items are amortised using the immediate write-off method.
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report 5.12 Non-current assets held for sale
Non-current assets and disposal groups are classified as held for sale category when the Group recovers the book value through a sale (including an exchange of nonmonetary assets that has commercial substance) rather than continuing use.
Non-current assets or disposal groups classified as held for sale are required to satisfy the following conditions: (1) the asset or disposal group is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such asset or disposal group; (2) the sale is highly probable, i.e. the Group has made a resolution about selling plan and obtained a confirmed purchase commitment and the sale is expected to be completed within one year.
The Group measures the no-current assets or disposal groups classified as held for sale at the lower of their carrying amount and fair value less costs to sell. Where the carrying amount is higher than the net amount of fair value less costs to sell, carrying amount should be reduced to the net amount of fair value less costs to sell, and such reduction is recognized in impairment loss of assets and included in profit or loss for the period. Meanwhile, provision for impairment of held-for-sale assets are made. When there is increase in the net amount of fair value of non-current assets held for sale less costs to sell at the balance sheet date, the original deduction should be reversed in impairment loss of assets recognized after the classification of held-for-sale category, and the reverse amount is include in profit or loss for the period.
Non-current assets held for sale in non-current assets are not subject to depreciation or amortization. 5.13 Long term equity investments
5.13.1 Basis for determining control, joint control and significant influence
Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Joint control is the contractually agreed sharing of control over an economic activity, and exists only when the strategic financial and operating policy decisions relating to the activity require the unanimous consent of the parties sharing control. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report control over those policies. When determining whether an investing enterprise is able to exercise control or significant influence over an investee, the effect of potential voting rights of the investee (for example, warrants and convertible debts) held by the investing enterprises or other parties that are currently exercisable or convertible shall be considered.
5.13.2 Determination of initial investment cost
For a long-term equity investment acquired not involving enterprises under common control, the investment cost of the long-term equity investment is the cost of acquisition.
Audit fee, legal services, consulting fees and other related management costs in acquisition are expensed in profits and losses when happened.
Other long-term equity investments acquired from other than acquisitions are recognised using original cost.
5.13.3 Subsequent measurement and recognition of profit or loss
Long-term equity investment accounted for using the cost method
The Group accounts for long-term equity investment using the cost method. A subsidiary is an investee that is controlled by the Group.
Under the cost method, a long-term equity investment is measured at initial investment cost. Long-term equity investment is adjusted when capital is added or recollected. Investment income is recognised in the period in accordance with the attributable share of cash dividends or profit distributions declared by the investee.
5.13.4 Disposal of long-term equity investments
On disposal of a long term equity investment, the difference between the proceeds actually received and receivable and the carrying amount is recognised in profit or loss for the period.
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report 5.14 Investment properties
Investment property is property held to earn rentals or for capital appreciation or both.
An investment property is measured initially at cost. Subsequent expenditures incurred for such investment property are included in the cost of the investment property if it is probable that economic benefits associated with an investment property will flow to the Group and the subsequent expenditures can be measured reliably. Other subsequent expenditures are recognised in profit or loss in the period in which they are incurred.
The Group uses the cost model for subsequent measurement of investment property, and adopts a depreciationor amortisation policy for the investment property which is consistent with that for buildings or land use rights.
When an investment property is sold, transferred, retired or damaged, the Group recognises the amount of any proceeds on disposal net of the carrying amount and related taxes in profit or loss for the period.
5.15 Fixed assets
5.15.1 Recognition criteria for fixed assets
Fixed assets are tangible assets that are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes, and have useful lives of more than one accounting year. A fixed asset is recognised only when it is probable that economic benefits associated with the asset will flow to the Group and the cost of the asset can be measured reliably. Fixed assets are initially measured at cost.
Subsequent expenditures incurred for the fixed asset are included in the cost of the fixed asset and if it is probable that economic benefits associated with the asset will flow to the Group and the subsequent expenditures can be measured reliably. Meanwhile the carrying amount of the replaced part is derecognised. Other subsequent expenditures are recognised in profit or loss in the period in which they are incurred.
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report 5.15.2 Depreciation of each category of fixed assets
A fixed asset is depreciated over its useful life using the straight-line method since the month subsequent to the one in which it is ready for intended use. The useful life, estimated net residual value rate and annual depreciation rate of each category of fixed assets are as follows:
||||||
|-|-|-|-|-|
|||Depreciation|Residual value|Annual depreciation|
|Classification|Depreciation method||||
|||life|rate|rate|
||Straight-line||||
|Houses and buildings||20-40 years|0-5%|2.4%-5.0%|
||depreciation||||
||Straight-line||||
|||5-30 years|0-5%|3.2%-20.0%|
|Machinery equipment|depreciation||||
||Straight-line||||
|||4-12 years|0-5%|7.9%-25.0%|
|Transportation tools|depreciation||||

Estimated net residual value assumes the situation where a fixed asset expire for its estimated useful life and is in its expected final status. Estimated net residual value is the amount that the Group can obtain from the disposal less expected disposal fees.
5.15.3 Other explanations
If a fixed asset is upon disposal or no future economic benefits are expected to be generated from its use or disposal, the fixed asset is derecognised. When a fixed asset is sold, transferred, retired or damaged, the amount of any proceeds on disposal of the asset net of the carrying amount and related taxes is recognised in profit or loss for the period.
The Group reviews the useful life and estimated net residual value of a fixed asset and the depreciation method applied at least once at each financial year-end, and account for any change as a change in an accounting estimate.
5.16 Construction in progress
Construction in progress is measured at its actual costs. The actual costs include various construction
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report expenditures during the construction period, borrowing costs capitalised before it is ready for intended use and other relevant costs. Construction in progress is not depreciated. Construction in progress is transferred to a fixed asset when it is ready for intended use.
5.17 Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying asset are capitalised when expenditures for such asset and borrowing costs are incurred and activities relating to the acquisition, construction or production of the asset that are necessary to prepare the asset for its intended use or sale have commenced. Capitalisation of borrowing costs ceases when the qualifying asset being acquired, constructed or produced becomes ready for its intended use or sale. Capitalisation of borrowing costs is suspended during periods in which the acquisition, construction or production of a qualifying asset is suspended abnormally and when the suspension is for a continuous period of more than 3 months. Capitalisation is suspended until the acquisition, construction or production of the asset is resumed. Other borrowing costs are recognised as an expense in the period in which they are incurred. Where funds are borrowed under a specific-purpose borrowing, the amount of interest to be capitalized is the actual interest expense incurred on that borrowing for the period less any bank interest earned from depositing the borrowed funds before being used on the asset or any investment income on the temporary investment of those funds.
5.18 Biological assets
The Group's biological assets are bearer biological assets.
Bearer biological assets are biological assets, for example, held for the production of agricultural produce, provision of services or rental, Bearer biological assets in the Group are vines. A bearer biological asset is initially measured at cost. The cost of a bearer biological asset self-grown or self-bred comprises those costs necessarily incurred and directly attributable to the asset before the asset becomes available for its intended production and operating purposes, and any borrowing cost meeting the capitalisation criteria.
The productive biological assets are not accrued depreciation until reaching the intended production and operation purposes. After reaching the intended production and operation purposes, the productive biological assets are accrued depreciation within the service life straight-line depreciation. The service life, estimated net residual value rate and annual depreciation rate of different productive biological
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report assets are as follows:
Estimated Estimated Annual
Category useful life residual rate depreciation rate
Vines 20 years - 5.0%
The Group evaluates the useful life and expected net salvage value by considering the normal producing life of the bearer biological assets.
The Group reviews the useful life and estimated net residual value of bearer biological assets and the depreciation method applied at least once at each financial year-end, and account for any change as a change in an accounting estimate.
On the sale, identification of any shortages during stocktaking, death or damage of biological asset, the proceeds on disposal net of the carrying amount and relevant taxes is recognised in profit or loss for the current period.
5.19 Intangible assets
Intangible assets include land use rights, software, etc.
An intangible asset is measured initially at cost method. When an intangible asset with a finite useful life is available for use, its original cost less net residual value and any accumulated impairment losses is amortised over its estimated useful life using the straight-line method. Intangible assets with indefinite useful lives are not amortized. The useful lives of the intangible assets are as follows:
Annual
Item Useful life Net residual value amortization rate
Land use rights 40-50 years - 2.0%-2.5%
Software 5-10 years - 10.0%-20.0%
Trademark 10 years - 10.0%
Except for the above intangible assets with finite useful lives, the Group had also land use right and
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report trademark with infinite useful lives. Land use right with infinite useful lives was related to the acquisition of permanent ownership held byViñaIndómita, S.A.,Viña Dos Andes, S.A., and Bodegas Santa Alicia SpA. (collectively referred to as the "Chile Indomita Wine Group") according to related Chilean law and the acquisition of permanent ownership held by Kilikanoon Estate Pty Ltd (referred to as the "Australia Kilikanoon") according to related Australian law, for which there is no need to conduct amortization. Trademark was related to the Group acquired the Chile Indomita Wine Group, which had no finite useful lives. The valuation of trademark was based on the trends in the market 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 a given period. Because it was hard to predict the period that it would bring economic benefits to the Group, the useful lives were uncertain.
For an intangible asset with a finite useful life, the Group reviews the useful life and amortisation method at the end of the period, and makes adjustments when necessary.
5.20 Impairment of long-term assets
The Group and the Company review the impairment status of long-term equity investments, fixed assets, construction in progress, bearer biological asset and intangible assets with finite useful life at the end of each year. If the assets exist impairment, the Group estimates the recoverable amount of the assets.Intangible assets with indefinite useful life and intangible assets not yet available for use are tested for impairment annually, irrespective of whether there is any indication that the assets may be impaired.
Recoverable amount is estimated on individual basis. If it is not practical to estimate the recoverable amount of an individual asset, the recoverable amount of the asset group to which the asset belongs will be estimated. The recoverable amount of an asset is the higher of its fair value less costs of disposal and the present value of the future cash flows expected to be derived from the asset.
If recoverable amount of assets is less than book value, the difference is recognised as impairment provision and expensed in current period.
Goodwill is tested for impairment at least at the end of each year. For the purpose of impairment testing, goodwill is considered together with the related assets group (s), i.e., goodwill is reasonably allocated to the related assets group (s) or each of assets group (s) expected to benefit from the
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report synergies of the combination. An impairment loss is recognised if the recoverable amount of the assets group or sets of assets groups (including goodwill) is less than its carrying amount. The impairment loss is firstly allocated to reduce the carrying amount of any goodwill allocated to such assets group or sets of assets groups, and then to the other assets of the group pro-rata on the basis of the carrying amount of each asset (other than goodwill) in the group.
The impairment is recognised in profit or loss for the period in which it is incurred and will not be reversed in any subsequent period.
5.21 Long term prepaid expenses
Long term prepaid expenses of the Group are amortized over the following period:
Amortization period
Land requisition fee 50 years
Land lease prepayment 50 years
Greening fee 5-20 years
Leasehold improvement 3-5years
Others 3 years
5.22 Employee benefits
5.22.1 Short-term employee benefits
In an accounting period in which an employee has rendered service to the Group, the Group recognises the actual employee benefits for that service as a liability. The employee benefits of the Group are either included in cost of related assets or charged to profit or loss in the period when they are incurred. Non-monetary employee benefits are measured at fair value.
Social insurances such as medical insurance, injury insurance and pregnancy insurance, housing funds, labor union and employee education fees paid by the Group for employees, are recognised as relevant liability in the period in which the employees provide service, in accordance with the regulated recognition basis and percentage. The related expenditures are either included in cost of related assets
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report or charged to profit or loss in the period when they are incurred.
5.22.2 Accounting treatments of retired benefits
Retired benefits of the Group are all predetermined provision plan.
In the period in which the employees provide service, the Group recognise liability in accordance with the amounts to be paid calculated according to the predetermined provision plan, and the related expenditures are either included in cost of related assets or charged to profit or loss in the period when they are incurred.
5.22.3 Accounting treatments of termination benefits
When providing termination benefits to employees, the Group recognise employee benefits payroll resulting from termination benefits at the earlier of: the Group cannot unilaterally withdraw from the termination plan or the redundancy offer; the Group recognise relevant costs and expenses related to the payment of termination benefits in reconstructuring.
5.23 Revenue
5.23.1 Revenue from sale of goods
Revenue from sale of goods is recognised when the Group has transferred to the buyer the significant risks and rewards of ownership of the goods. The Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold. The amount of revenue can be measured reliably and it is probable that the associated economic benefits will flow to the Group. The associated costs incurred or to be incurred can be measured reliably.
5.23.2 Revenue from rendering of services
When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue associated with the transaction shall be recognized by reference the stage of completion of the transaction at the reporting date. The outcome of a transaction can be estimated reliably.
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report When the outcome of the transaction involving the rendering of services cannot be estimated reliably, revenue is recognised only to the extent of the costs incurred that will be recoverable, and the costs incurred are recognised as expenses for the period. When it is not probable that the costs incurred will be recovered, revenue is not recognised.
5.24 Government grants
Government grants are transfer of monetary assets and non-monetary assets from the government to the Group at no consideration. A government grant is recognised only when the Group can comply with the conditions attaching to the grant and the Group will receive the grant.
Monetary government grants are measured by the amount received or receivable.
5.24.1 Government grant related to an asset
A government grant related to an asset is recognised as deferred income, and evenly amortised to profit or loss over the useful life of the related asset.
5.24.2Government grant related to income
For a government grant related to income, if the grant is a compensation for related expenses or losses to be incurred in subsequent periods, the grant is recognised as deferred income, and recognised in profit or loss over the periods in which the related costs are recognised. If the grant is a compensation for related expenses or losses already incurred, the grant is recognised immediately in profit or loss for the period.
A government grant related to the Group's daily activities is recognized in other income based on the nature of economic activities; a government grant is not related to the Group's daily activities is recognized in non-operating income and expenses.
The Company's government loans with below-market rate of interest are directly paid to the Company, and the related low rate interest will write off related borrowing costs. The government loans with below-market rate of interest obtained by other subsidiaries of the Group are government loans, which
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report is provided by local bureau of finance through bank with below-market rate of interest. The actual amount of the loan received by the Group recognized as borrowings, and the related borrowing costs are calculated according to the principal of the loan and the below-market rate.
5.25 Deferred tax assets/deferred tax liabilities
The income tax expenses include current income tax and deferred income tax.
5.25.1 Current income tax
At the balance sheet date, current income tax liabilities (or assets) for the current and prior periods are measured at the amount expected to be paid (or recovered) according to the requirements of tax laws. 5.25.2 Deferred tax assets and deferred tax liabilities
For temporary differences between the carrying amounts of certain assets or liabilities and their tax base, or between the nil carrying amount of those items that are not recognised as assets or liabilities and their tax base that can be determined according to tax laws, deferred tax assets and liabilities are recognised using the balance sheet liability method.
Deferred tax is generally recognised for all temporary differences. Deferred tax assets for deductible temporary differences are recognised to the extent that it is probable that taxable profits will be available against which the deductible temporary differences can be utilised. However, for temporary differences associated with the initial recognition of goodwill and the initial recognition of an asset or liability arising from a transaction (not a business combination) that affects neither the accounting profit nor taxable profits (or deductible losses) at the time of transaction, no deferred tax asset or liability is recognised.
For deductible losses and tax credits that can be carried forward, deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the deductible losses and tax credits can be utilised.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments in
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.
At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates, according to tax laws, that are expected to apply in the period in which the asset is realised or the liability is settled. Current and deferred tax expenses or income are recognised in profit or loss for the period, except when they arise from transactions or events that are directly recognised in other comprehensive income or in shareholders' equity, in which case they are recognised in other comprehensive income or in shareholders' equity; and when they arise from business combinations, in which case they adjust the carrying amount of goodwill.
At the balance sheet date, the carrying amount of deferred tax assets is reviewed and reduced if it is no longer probable that sufficient taxable profits will be available in the future to allow the benefit of deferred tax assets to be utilised. Such reduction in amount is reversed when it becomes probable that sufficient taxable profits will be available.
5.25.3 Net off of income taxes
When the Group has a legal right to settle on a net basis and intends either to settle on a net basis or to realise the assets and settle the liabilities simultaneously, current tax assets and current tax liabilities are offset and presented on a net basis.
When the Group has a legal right to settle current tax assets and liabilities on a net basis, and deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax assets and liabilities on a net basis or to realise the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax assets or liabilities are expected to be reversed, deferred tax assets and deferred tax liabilities are offset and presented on a net basis.
5.26 Leases
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
5.26.1 Operating lease accounting methods
The Group as lessee under operating leases
Operating lease payments are recognised on a straight-line basis over the term of the relevant lease, and are either included in the cost of related asset or charged to profit or loss for the period. Initial direct costs incurred are charged to profit or loss for the period.
The Group as lessor under operating leases
Rental income from operating leases is recognised in profit or loss on a straight-line basis over the term of the relevant lease. Initial direct costs with more than an insignificant amount are capitalised when incurred, and are recognised in profit or loss on the same basis as rental income over the lease term. Other initial direct costs with an insignificant amount are charged to profit or loss in the period in which they are incurred. Contingent rents are charged to profit or loss in the period in which they actually arise.
5.27 Changes in major accounting policies and accounting estimates
5.27.1 Changes in major accounting policies
No
5.27.2 Changes in major accounting estimates
No
5.28 Others
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report Critical judgments in applying accounting policies and key assumptions and uncertainties in accounting estimates
In the application of accounting policies as set out in Note 4, the Group is required to make judgments, estimates and assumptions about the carrying amounts of items in the financial statements that cannot be measured accurately, due to the internal uncertainties of the operating activities. These judgments, estimates and assumptions are based on historical experience of the Group's management as well as other factors that are considered to be relevant. Actual results may differ from these estimates.
The Group periodically review the judgments, estimates and assumptions above on a going concern basis. For those changes in accounting policies that only affect current financial statements, the influences are recognized in current period. For those changes in accounting policies that affect both current and future financial statements, the influences are recognized in both current and prospective periods.
Significant accounting judgments and accounting estimates
The following are key assumptions for after balance sheet date event and other factors of uncertain estimation. They may cause material adjustment on balance sheet in following accounting period. Deferred tax assets
Deferred tax assets are recognized for all unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and level of future taxable profits together with future tax planning strategies.
Depreciation
The depreciation is calculated on the straight line basis to write-off the cost of each item of fixed assets to its residual value over its estimated useful life. The Group's management determines the estimated useful lives for its fixed assets. This estimate is based on the historical experience of the actual useful lives of fixed assets of similar nature and functions. If the previous estimates have significant changes, and depreciation expenses will be adjusted in the future periods.
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report Useful life of intangible assets
The estimated useful lives of the intangible assets are determined based on the historical experience of the actual useful lives of intangible assets of similar nature and functions as well as considering the contractual rights and statutory rights applicable to the intangible assets.
When the estimated useful lives of finite intangible assets are shortened or extended, the amortization periods should be adjusted accordingly.
Impairment of long-term assets
The Group assesses whether the recoverable amount is lower than the book value. If there are any indicators that the book value of non-current assets cannot be fully recoverable, impairment losses should be recorded.
The recoverable amount is the higher of an asset's fair value less costs to sell and the present value of the future cash flows expected to be derived from an asset. As it is difficult for the Group to obtain the quoted market price of the assets (or assets group), the fair value of the assets cannot be reliably estimated. When the management make estimation on the expected future cash flows from the asset or cash generating unit, estimates should be made on choosing a suitable growth rate of sales , average gross profit , related operating costs and discount rate in order to calculate the present value of those cash flows, which has a high uncertainty.
Estimated provision for accounts receivable
A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy are considered indicators that the trade receivable is impaired. The provision is reassessed at the end of each year.
Inventory provision based on net realizable value
The inventories are measured on the lower of carrying value and net realizable value, and provision
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report should be made for impairment on obsolete and slow moving inventories. The group will reassess whether the net realizable value is lower than the carrying cost at the end of each year.
The determination of the fair value of identifiable assets and liabilities associated with business combination.
For the cost of business combination, the Group allocates the purchase price based on fair value of relatively identifiable assets and liabilities. When the fair value of relatively identifiable assets and liabilities are evaluated by the present value of its future cash flows, The management need estimate the growth rate of sales based on future market supply and demand to predict cash flows, and considered the proper discount rate for calculating, management need use major accounting estimates and judgments in the progress.
6. TAXES
6.1 The main taxes and tax rate are as follows:
||||
|-|-|-|
|Tax category|Taxation basis|Tax rate|
|Value added tax|Levied on the balance between theoutput tax calculated based on taxableincome and the input tax allowed to bededucted in current period|16%, 10%, 6% (Chinese), 20%(France), 21% (Spain), 19% (Chile),10% (Australia)|
|Consumption tax|Levied on taxable income|10%, 20% (Chinese)|
|City development tax|Levied on circulation tax actually paid|7% (Chinese)|
|Corporate income tax|Levied on taxable income|25%(Chinese), 33.3%(France), 28%(Spain), 27% (Chile), 30%(Australia)|

6.2 Tax incentives and relative permit
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
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report to clause 27 of PRC Corporate Income Tax and clause 86 of PRC Corporate Income Tax Measures for Implementation, 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 PRC Corporate Income Tax and clause 86 of PRC Corporate Income Tax Measures for Implementation, Grape Growing enjoys an exemption of corporate income tax.
Xinjiang Tianzhu 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 the Notice on Tax Policy Issues concerning Further Implementation of the Western China Development Strategy (Cai Shui[2011] No.58), Xinjiang Tianzhu is qualified to enjoy preferential taxation policies, which means it can pay corporate income tax at a preferential rate of15% for the period from 2015 to 2020.
Xinjiang Babao Baron Chateau Co., Ltd. ("Shihezi Chateau"), a subsidiary of the Company, is an enterprise of wine production and sales incorporated in Shihezi city, Xinjiang Weizu Autonomous. In accordance with the Notice on Tax Policy Issues concerning Further Implementation of the Western China Development Strategy (Cai Shui[2011] No.58), Shihezi Chateau is qualified to enjoy preferential taxation policies, which means it can pay corporate income tax at a preferential rate of15% for the period from 2015 to 2020.
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report 7. Notes to consolidated financial statement
7.1 Monetary capital
Unit: Yuan
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Cash on hand|151,228|136,973|
|Bank deposit|1,561,166,484|1,278,397,711|
|Other monetary capital|121,720,741|123,987,825|
|Total|1,683,038,453|1,402,522,509|

 As at June 30, 2018, the restricted bank deposit details are listed as follows:
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Housing fund of the unit|2,647,250|2,645,410|
|Total|2,647,250|2,645,410|

 As at June 30, 2018, the details of other monetary funds are listed as follows:
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Pledge of fixed deposits by YantaiChangyu Wine Research,Development and Manufacture Co.,Ltd. (“R&D Company”)|||
||61,700,000|61,700,000|
|Guaranteed deposits paid for the letterof credit|||
||57,946,190|57,946,190|
|Account balance of Alipay|1,743,116|4,317,635|
|Guaranty money for the unit card|321,435|14,000|
|Guaranty money for ICBC platform|10,000|10,000|
|Total|121,720,741|123,987,825|

 As at June 30, 2018, the bank deposits of the Group including short-term fixed deposits ranging from 3 months to 12 months amounted to RMB 130,000,000 Yuan (December 31, 2017: RMB 95,000,000 Yuan), with the interest rates ranging from1.40% to2.03%.
7.2 Bills receivable
7.2.1 Classification of bills receivable
Unit: Yuan
||||
|-|-|-|
|Type|Ending balance|Beginning balance|
|Bank acceptance|367,210,884|244,796,818|
|Trade acceptance|||
|Total|367,210,884|244,796,818|

7.2.2 Bills receivable pledged by the Company at the end of period
Nil
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report 7.2.3 Bills receivable endorsed or discounted by the Company at the end of period but not yet matured as of the balance sheet date
Unit: Yuan
||||
|-|-|-|
||Amount terminating recognition at the end|Amount not terminating recognition|
|Item|||
||of period|at the end of period|
|Bank acceptance|225,833,211||
|Trade acceptance|||
|Total|225,833,211||

7.2.4 Bills receivable reclassified as accounts receivable by the Company due to the default of drawer at the end of period
Nil
7.3 Accounts receivable
7.3.1 Accounts receivable disclosed by type
Unit: Yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Ending balance|||||Beginning balance|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|Type|||||||||||
||Amount|Proportio|Amount|Accrued|Book value|Amount|Proportion|A mount|Accrued|Book value|
|||n||proportion|||||proportion||
|Accounts|243,413,092|100.0%|||243,413,092|263,796,355|100.0%|||263,796,355|
|receivable of|||||||||||
|significant|||||||||||
|single amount|||||||||||
|and single|||||||||||
|accrued bad|||||||||||
|debt|||||||||||
|provision|||||||||||
|Accounts|||||||||||
|receivable|||||||||||
|accrued bad|||||||||||
|debt|||||||||||
|provision by|||||||||||
|credit risk|||||||||||
|features|||||||||||
|Accounts|||||||||||
|receivable of|||||||||||
|insignificant|||||||||||
|single amount|||||||||||
|and single|||||||||||
|accrued bad|||||||||||
|debt|||||||||||
|provision|||||||||||
|Total|243,413,092|100.0%|||243,413,092|263,796,355|100.0%|||263,796,355|

 The credit term of accounts receivable is normally one month. Major customers can be granted a credit
term up to one year. The accounts receivable are free from interest.
As at June 30, 2018, the accounts receivable with ownership restrictions were RMB 35,016,424 Yuan
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report (December 31, 2017: RMB 46,337,062 Yuan). Please refer to Note 7.19 for details.
7.3.2 Bad debt provision accrued, transferred back or received in this period
The bad debt provision accrued in this period was RMB 0 Yuan; and that transferred back or received in this period was RMB 0 Yuan.
7.3.3 Accounts receivable actually cancelled after verification in this period
Nil
7.3.4 Accounts receivable collected by the borrowers of top 5 units ranked by the ending balance
Unit: Yuan
||||||
|-|-|-|-|-|
||Relationship with the|||Percentage in total|
|Unit||Amount|Period||
||Company|||accounts receivable|
|Nonggongshang|||||
|Supermarket (Group) Co.,|Third party|11,250,509|Within 1 year|4.6%|
|Ltd.|||||
|Yantai Zhongya Medical|||||
||Affiliated party|8,912,812|Within 1 year|3.7%|
|Health Wine Co., Ltd.|||||
|Lianhua Supermarket|||||
||Third party|8,263,237|Within 1 year|3.4%|
|Holdings Co., Ltd.|||||
|Suguo Supermarket Co., Ltd.|Third party|5,812,309|Within 1 year|2.4%|
|Shanghai Lotus Supermarket|||||
||Third party|5,694,902|Within 1 year|2.3%|
|Chain Store Co., Ltd.|||||
|Total|--|39,933,769|--|16.4%|

 7.3.5 Accounts receivable terminating recognition due to transfer of financial assets
Nil
7.3.6 Accounts receivable transferred and included in assets and liabilities
Nil
7.4 Advance payment
7.4.1 Advance payment listed by age
Unit: Yuan
||||||
|-|-|-|-|-|
||Ending balance||Beginning sum||
|Age|||||
||Amount|Proportion|Amount|Proportion|
|Within 1 year|3,122,797|100.0%|2,417,931|100.0%|

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
||||||
|-|-|-|-|-|
|1-2 years|||||
|2-3 years|||||
|More than 3 years|||||
|Total|3,122,797|--|2,417,931|--|

 7.4.2 Advance payment collected by the prepaid parties of top 5 units ranked by the ending balance
Unit: Yuan
|||||||
|-|-|-|-|-|-|
||||||Percentage|
||Relationship with||||in the total|
|Unit||Amount|Age|Reason for unsettlement||
||the Group||||advance|
||||||payment%|
|Yantai Power Supply Company of State||||||
||||Within 1|Prepaid electricity||
|Grid Shandong Electric Power|Third party|500,000|||16.0%|
||||year|purchasing fund||
|Company||||||
||||Within 1|||
|Beijing Putianshou Trade Co., Ltd.|Third party|192,000||Failure to receive the goods|6.1%|
||||year|||
||||Within 1|||
|Qingdao Vinopro Trading Co., Ltd.|Third party|105,200||Failure to receive the goods|3.4%|
||||year|||
|Xinjiang Xinyanmushen Technology|||Within 1|||
||Third party|116,980||Failure to receive the goods|3.7%|
|Co., Ltd.|||year|||
|Yantai Bohong Industry & Trade Co.,|||Within 1|||
||Third party|95,137||Failure to receive the goods|3.0%|
|Ltd.|||year|||
|Total|--|1,009,317|--|--|32.2%|

 7.5 Interest receivable
7.5.1 Classification of interest receivable
Unit: Yuan
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Fixed deposit|1,218,373|240,968|
|Entrusted loan|||
|Bond investment|||
|Total|1,218,373|240,968|

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report 7.6 Other accounts receivable
7.6.1 Other accounts receivable disclosed by type
Unit: Yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Ending balance|||||Beginning balance|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|Type|||||||||||
||Amount|Proportion|Amount|Accrued|Book value|Amount|Proportion|A mount|Accrued|Book value|
|||||proportion|||||proportion||
|Other|||||||||||
|accounts|||||||||||
|receivable of|||||||||||
|significant|||||||||||
|single|||||||||||
||16,500,022|100.0%|||16,500,022|18,737,454|100.0%|||18,737,454|
|amount and|||||||||||
|single|||||||||||
|accrued bad|||||||||||
|debt|||||||||||
|provision|||||||||||
|Other|||||||||||
|accounts|||||||||||
|receivable|||||||||||
|accrued bad|||||||||||
|debt|||||||||||
|provision by|||||||||||
|credit risk|||||||||||
|features|||||||||||
|Other|||||||||||
|accounts|||||||||||
|receivable of|||||||||||
|insignificant|||||||||||
|single|||||||||||
|amount and|||||||||||
|single|||||||||||
|accrued bad|||||||||||
|debt|||||||||||
|provision|||||||||||
|Total|16,500,022|100.0%|||16,500,022|18,737,454|100.0%|||18,737,454|

 7.6.2 Bad debt provision accrued, transferred back or received in this period
The bad debt provision accrued in this period was RMB 0 Yuan; and that transferred back or received in this period was RMB 0 Yuan.
7.6.3 Other accounts receivable actually cancelled after verification in this period
Nil
7.6.4 Other accounts listed by nature
Unit: Yuan
||||
|-|-|-|
|Nature|Ending book balance|Beginning book balance|
|Deposit and guaranty money receivable|11,240,442|10,075,901|

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
||||
|-|-|-|
|Nature|Ending book balance|Beginning book balance|
|Imprest receivable|2,134,326|2,215,146|
|Investment receivable||2,050,000|
|Consumption tax and added-value tax export rebate|472,569|2,451,188|
|Other|2,652,685|1,945,219|
|Total|16,500,022|18,737,454|

 7.6.5 Other accounts receivable collected by the borrowers of top 5 units ranked by the ending balance
Unit: Yuan
|||||||
|-|-|-|-|-|-|
|||||Percentage in total||
|||Ending|||Ending balance of|
|Unit|Nature||Age|ending balance of other||
|||balance|||bad debt provision|
|||||accounts receivable||
||Construction|||||
|YEDA Construction Industry||||||
||guaranty|7,702,477|2-3 years|46.7%||
|Association||||||
||money|||||
||Advance|||||
|Beijing Shanshui Decoration|electric|||||
|||465,460|1-2 years|2.8%||
|Engineering Co., Ltd.|charge|||||
||receivable|||||
||Advance|||||
|Shaanxi Fangyuan Construction|electric|||||
|||449,337|1-2 years|2.7%||
|Engineering Co., Ltd.|charge|||||
||receivable|||||
|TRANSBANK|Deposit|324,029|Within 1 year|2.0%||
||Guaranty|||||
|YEDA Finance Bureau||198,056|1-2 years|1.2%||
||money|||||
|Total|--|9,139,359|--|55.4%||

7.6.6 Other accounts receivable terminating recognition due to transfer of financial assets
Nil
7.6.7 Other accounts receivable transferred and included in assets and liabilities
Nil
7.7 Inventories
7.7.1 Inventory classification
Unit: Yuan
||||||||
|-|-|-|-|-|-|-|
||Ending balance|||Beginning balance|||
|Item||Depreciation|||Depreciation||
||Book balance||Book value|Book balance||Book value|
|||provision|||provision||
|Raw materials|195,466,096||195,466,096|66,881,090||66,881,090|

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
||||||||
|-|-|-|-|-|-|-|
|Goods in process|1,529,164,344||1,529,164,344|1,568,230,851||1,568,230,851|
|Commodity stocks|627,705,074|13,410,082|614,294,992|864,097,497|25,595,392|838,502,105|
|Total|2,352,335,514|13,410,082|2,338,925,432|2,499,209,438|25,595,392|2,473,614,046|

7.7.2 Inventory depreciation provision
Unit: Yuan
||||||||
|-|-|-|-|-|-|-|
|||Increase in this period||Decrease in this period|||
||Beginning||||||
|Item||||Transfer back or||Ending balance|
||balance|Accrual|Other||Other||
|||||write-off|||
|Raw materials|||||||
|Goods in process|||||||
|Commodity stocks|25,595,392|683,753||12,869,063||13,410,082|
|Total|25,595,392|683,753||12,869,063||13,410,082|

7.8 Assets held for sale
Unit: Yuan
||||||
|-|-|-|-|-|
||||Estimated disposalexpenses||
|Item|Ending book value|Fair value||Estimated disposal time|
|Zhenshantun collective|||||
||2,000,197|16,282,22|4 3,878,560|2018|
|apartment|||||
|Total|2,000,197|16,282,22|4 3,878,560|--|

The Company has signed an irrevocable agreement for disposing the fixed assets, and the contract amount is RMB 16,282,224 Yuan. The disposal is predicted to be completed in 2018. 7.9 Other current assets
Unit: Yuan
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Prepaid corporate income tax|101,768,819|22,911,298|
|Deductible input tax|259,484,264|206,529,504|
|Rent to be amortized|1,724,907|1,381,957|
|Total|362,977,990|230,822,759|

 7.10 Available-for-sale financial assets
7.10.1 Particulars of available-for-sale financial assets
Unit: Yuan
||||||||
|-|-|-|-|-|-|-|
||Ending balance|||Beginning balance|||
|Item|||||||
||Book|Impairment|Book|Book|Impairment|Book|

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
||||||||
|-|-|-|-|-|-|-|
||balance|provision|value|balance|provision|value|
|Available-for-sale financial|||||||
|instruments:|||||||
|Available-for-sale equity|||||||
||463,880||463,880|467,251||467,251|
|instruments:|||||||
|Fair value measurement|||||||
|Cost measurement|463,880||463,880|467,251||467,251|
|Total|463,880||463,880|467,251||467,251|

 7.10.2 Available-for-sale financial assets by cost measurement at the end of period
Unit: Yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Book balance||||Impairment provision|||||Cash|
||||||||||Shareholding||
|Invested unit||Increase|Decrease|||Increase|Decrease||ratio in the|dividend|
||Beginning|in this|in this|Ending|Beginning|in this|in this|Ending|invested unit|in this|
|||period|period|||period|period|||period|
||||||||||Less than||
|Other (Note)|467,251|5053|8424|463,880|||||||
||||||||||1%||
|Total|467,251|5053|8424|463,880|||||--||

Note: The Group holds less than1% of the shares in such invested entities. These invested entities are all unlisted companies and their fair valuecan’t be measured reliably, so the Group shall measure such available-for-sale financial assets by cost method.
7.11 Investment real estate
7.11.1 Investment real estate by cost measurement method
√ Applicable□ Inapplicable
Unit: Yuan
||||||
|-|-|-|-|-|
||Houses and||Construction in||
|Item||Land use right||Total|
||buildings||progress||
|Ⅰ Original book value|||||
|1. Beginning balance|38,347,283|||38,347,283|
|2. Increase in this period|||||
|2.1 Outsourcing|||||
|2.2 Transfer in from|||||
|inventories\fixed assets\|||||
|construction in progress|||||
|2.3 Business merger|||||
|increase|||||
|3. Decrease in this period|||||
|3.1 Disposal|||||
|3.2 Other transfer out|||||
|4. Ending balance|38,347,283|||38,347,283|
|Ⅱ Accumulated|||||
|depreciation & accumulated|||||
|amortization|||||
|1. Beginning balance|19,879,294|||19,879,294|

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
||||||
|-|-|-|-|-|
||Houses and||Construction in||
|Item||Land use right||Total|
||buildings||progress||
|2. Increase in this period|590,610|||590,610|
|2.1 Accrual or|||||
||590,610|||590,610|
|amortization|||||
|3. Decrease in this period|||||
|3.1 Disposal|||||
|3.2 Other transfer out|||||
|4. Ending balance|20,469,904|||20,469,904|
|Ⅲ Impairment provision|||||
|1. Beginning balance|||||
|2. Increase in this period|||||
|2.1 Accrual|||||
|3. Decrease in this period|||||
|3.1 Disposal|||||
|3.2 Other transfer out|||||
|4. Ending balance|||||
|Ⅳ Book value|||||
|1. Ending book value|17,877,379|||17,877,379|
|2. Beginning book value|18,467,989|||18,467,989|

 7.12 Fixed assets
7.12.1 Particulars of fixed assets
Unit: Yuan
||||||
|-|-|-|-|-|
||Houses and||||
|Item||Machinery equipment|Transportation tools|Total|
||buildings||||
|Ⅰ Original book value:|||||
|1. Beginning balance|4,508,868,684|2,247,350,293|28,689,415|6,784,908,392|
|2. Increase in this period|28,099,550|276,616,965|2,714,616|307,431,131|
|2.1 Acquisition|4,386,524|117,719,992|1,772,906|123,879,422|
|2.2 Transfer in from|||||
|||98,234,615||98,234,615|
|construction in progress|||||
|2.3 Business merger|||||
||23,713,026|60,662,358|941,710|85,317,094|
|increase|||||
|2.4 Other|||||
|3. Decrease in this period||7,556,503|3,521,487|11,077,990|
|3.1 Disposal or|||||
|||7,556,503|3,521,487|11,077,990|
|retirement|||||
|3.2 Other|||||
|4. Ending balance|4,536,968,234|2,516,410,755|27,882,544|7,081,261,533|
|Ⅱ Accumulated|||||
|depreciation|||||
|1. Beginning balance|512,643,486|922,944,520|20,236,417|1,455,824,423|
|2. Increase in this period|67,468,028|106,700,526|1,231,461|175,400,015|
|2.1 Accrual|65,844,058|72,709,493|559,369|139,112,920|
|2.2 Business merger|||||
||1,623,970|33,991,033|672,092|36,287,095|
|increase|||||

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
||||||
|-|-|-|-|-|
||Houses and||||
|Item||Machinery equipment|Transportation tools|Total|
||buildings||||
|2.3 Other|||||
|3. Decrease in this period||6,591,830|946,752|7,538,582|
|3.1 Disposal or|||||
|||6,591,830|946,752|7,538,582|
|retirement|||||
|3.2 Other|||||
|4. Ending balance|580,111,514|1,023,053,216|20,521,126|1,623,685,856|
|Ⅲ Impairment provision|||||
|1. Beginning balance|||||
|2. Increase|||||
|2.1 Accrual|||||
|2.2 Other|||||
|3. Decrease|||||
|3.1 Disposal or|||||
|retirement|||||
|3.2 Other|||||
|4. Ending balance|||||
|Ⅳ Book value|||||
|1. Ending book value|3,956,856,720|1,493,357,539|7,361,418|5,457,575,677|
|2. Beginning book value|3,996,225,198|1,324,405,773|8,452,998|5,329,083,969|

 As at June 30, 2018, the net value of the fixed assets with ownership restrictions was RMB 142,338,624 Yuan (December 31, 2017: RMB 145,009,923 Yuan). Please refer to Note 7.52 for details.
As at June 30, 2018, the net value of the fixed assets divided into those held for sale was RMB 2,000,197 Yuan (December 31, 2017: RMB 2,000,197 Yuan).
7.12.2 Temporarily idle fixed assets
Nil
7.12.3 Fixed assets under finance leases
Nil
7.12.4 Fixed assets under operating lease
Unit: Yuan
|||
|-|-|
|Item|Ending book value|
|Machinery equipment|199,791|

 7.12.5 Fixed assets without property certificates
Unit: Yuan
||||
|-|-|-|
|Item|Book value|Reason for not receiving the property|

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
||||
|-|-|-|
|||certificate|
|Industrial Production Center of the R&D Company|1,623,153,949|Under transaction|
|Dormitory Building, Main Building and Reception Building of|||
||353,370,544|Under transaction|
|Chang’an Chateau|||
|European Town, Main Building and Service Building of Beijing|||
||190,443,678|Under transaction|
|Chateau|||
|Main Building of Yantai Chateau Changyu Tinlot|84,912,291|Under transaction|
|Fermentation Workshop and Wine Storage Workshop of Xinjiang|||
||18,143,780|Under transaction|
|Tianzhu|||
|Office Building and Packaging Workshop of Icewine Valley|9,352,280|Under transaction|
|Wine-making Workshop of Changyu (Jingyang)|4,326,818|Under transaction|
|Office Building, Laboratory Building and Workshop of|||
||3,750,132|Under transaction|
|Fermentation Center|||
|Finished Goods Warehouse and Workshop of Kylin Packaging|2,442,189|Under transaction|
|Office of Sales Company|2,021,311|Under transaction|
|Total|2,291,916,972|Under transaction|

7.13 Construction in progress
7.13.1 Particulars of construction in progress
||||||||
|-|-|-|-|-|-|-|
||Ending balance|||Beginning balance|||
|Item||Impairment|||Impairment||
||Book balance||Book value|Book balance||Book value|
|||provision|||provision||
|Research, Development & Manufacture|||||||
|Center (“Changyu Wine City|835,624,055||835,624,055|883,731,540||883,731,540|
|Complex”)|||||||
|Construction Project of Chang’an|||||||
||48,016,036||48,016,036|53,290,036||53,290,036|
|Chateau|||||||
|Construction Project of Ningxia|||||||
||47,902,668||47,902,668|35,711,269||35,711,269|
|Chateau|||||||
|Construction Project of Shihezi|||||||
||29,221,272||29,221,272|25,463,724||25,463,724|
|Chateau|||||||
|Construction Project of Sales Company|14,205,640||14,205,640|11,355,685||11,355,685|
|Construction Project of Chateau Tinlot|17,689,488||17,689,488|5,819,246||5,819,246|
|Construction Projects of Other|||||||
||23,255,594||23,255,594|10,770,069||10,770,069|
|Companies|||||||
|Total|1,015,914,753||1,015,914,753|1,026,141,569||1,026,141,569|

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report 7.13.2 Changes of major construction in progress in this period
Unit: Yuan
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||||Including|||
||||||||Proportion|||||
||||||Other|||Accumulati|:|||
|||||Transferred|||of|||Capitalizati||
||||||decrea|||ve|capitalize|||
|||Beginning|Increase in|to fixed||Ending|accumulati|||on ratio of|Capital|
|Item|Budget||||se in|||capitalized|d amount|||
|||balance|this period|assets in||balance|ve project|||interest in|source|
||||||this|||amount of|of interest|||
|||||this period|||input in|||this period||
||||||period|||interest|in this|||
||||||||budget|||||
||||||||||period|||
|Constructi||||||||||||
|on Project||||||||||||
||||||||||||Loans|
|of||||||||||||
|Research,|||||||||||form|
|Developm|||||||||||financial|
||4,505,780,0|883,731,54|39,381,9|87,489,3||835,624,0||11,092,50|2,664,5|1.20%||
|ent &|||||||72.5%||||institutio|
||00|0|14|99||55||6|41|and 4.3%||
|Manufactu|||||||||||ns and|
|re Center|||||||||||self-raise|
|(“Changyu|||||||||||d funds|
|Wine City||||||||||||
|Complex”)||||||||||||
|Constructi||||||||||||
|on Project|620,740,00||5,437,37|10,711,3||48,016,03|||||Self-rais|
|of||53,290,036|||||107.7%|||||
||0||2|72||6|||||ed funds|
|Chang’an||||||||||||
|Chateau||||||||||||
|Constructi||||||||||||
|on Project|780,000,00||3,757,54|||29,221,27|||||Self-rais|
|||25,463,724|||||92.0%|||||
|of Shihezi|0||8|||2|||||ed funds|
|Chateau||||||||||||
|Constructi||||||||||||
|on Project|161,350,00||2,849,95|||14,205,64|||||Self-rais|
|||11,355,685|||||95.2%|||||
|of Sales|0||5|||0|||||ed funds|
|Company||||||||||||
|Constructi||||||||||||
|on Project|||12,191,3|||47,902,66|||||Self-rais|
||41,415,000|35,711,269|||||128.0%|||||
|of Ningxia|||99|||8|||||ed funds|
|Chateau||||||||||||
|Constructi||||||||||||
|on Project|192,400,00||11,870,2|||17,689,48|||||Self-rais|
|||5,819,246|||||102.5%|||||
|of Chateau|0||42|||8|||||ed funds|
|Tinlot||||||||||||
||6,301,685,0|1,015,371,5|75,488,4|98,200,7||992,659,1||11,092,50|2,664,5|||
|Total|||||||--||||--|
||00|00|30|71||59||6|41|||

As at June 30, 2018, there was no indication for impairment of construction in progress of the Group, so no provision for impairment was made.
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report 7.14 Productive biological assets
7.14.1 Productive biological assets by cost measurement method
Unit: Yuan
|||||
|-|-|-|-|
|Item|Plantation||Total|
||Immature|Mature||
|Ⅰ Original book value||||
|1. Beginning balance|12,175,000|217,537,353|229,712,353|
|2. Increase in this period|1,548,693|8,462,877|10,011,570|
|2.1 Outsourcing||||
|2.2 Self cultivation|5,131,006|4,880,564|10,011,570|
|2.3 The immature turn to the mature|-3,582,313|3,582,313||
|3. Decrease in this period||||
|3.1 Disposal||||
|3.2 Other||||
|4. Ending balance|13,723,693|226,000,230|239,723,923|
|Ⅱ Accumulated depreciation||||
|1. Beginning balance||27,782,465|27,782,465|
|2. Increase in this period||9,279,710|9,279,710|
|2.1 Accrual||9,279,710|9,279,710|
|2.2 Other||||
|3. Decrease in this period||||
|3.1 Disposal||||
|3.2 Other||||
|4. Ending balance||37,062,175|37,062,175|
|Ⅲ Impairment provision||||
|1. Beginning balance||||
|2. Increase in this period||||
|2.1 Accrual||||
|2.2 Other||||
|3. Decrease in this period||||
|3.1 Disposal||||
|3.2 Other||||
|4. Ending balance||||
|Ⅳ Book value||||
|1. Ending book value|13,723,693|188,938,055|202,661,748|
|2. Beginning book value|12,175,000|189,754,888|201,929,888|

 As at June 30, 2018, no ownership of the biological assets was restricted.
As at June 30, 2018, there was no indication for impairment of biological assets of the Group, so no
provision was made.
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report 7.15 Intangible assets
7.15.1 Particulars of intangible assets
Unit: Yuan
||||||
|-|-|-|-|-|
|Item|Land use right|Software use right|Trademark|Total|
|Ⅰ Original book value|||||
|1. Beginning balance|521,731,139|73,666,754|159,702,508|755,100,401|
|2. Increase in this period|7,089,292|3,228,127|9,167,907|19,485,326|
|2.1 Acquisition|999,745|1,183,404|211,645|2,394,794|
|2.2 Internal R&D|||||
|2.3 Business merger|||||
||6,089,547|2,044,723|8,956,262|17,090,532|
|increase|||||
|2.4 Other|||||
|3. Decrease in this period|||||
|3.1 Disposal|||||
|3.2 Other|||||
|4. Ending balance|528,820,431|76,894,881|168,870,415|774,585,727|
|Ⅱ Accumulated amortization|||||
|1. Beginning balance|67,547,772|21,516,741|10,586,991|99,651,504|
|2. Increase in this period|5,316,763|4,729,142|2,194,042|12,239,947|
|2.1 Accrual|5,316,763|4,056,496|2,194,042|11,567,301|
|2.2 Business merger|||||
|||672,646||672,646|
|increase|||||
|3. Decrease in this period|||||
|3.1 Disposal|||||
|3.2 Other|||||
|4. Ending balance|72,864,535|26,245,883|12,781,033|111,891,451|
|Ⅲ Impairment provision|||||
|1. Beginning balance|||||
|2. Increase in this period|||||
|2.1 Accrual|||||
|2.2 Other|||||
|3. Decrease in this period|||||
|3.1 Disposal|||||
|3.2 Other|||||
|4. Ending balance|||||
|Ⅳ Book value|||||

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
||||||
|-|-|-|-|-|
|1. Ending book value|455,955,896|50,648,998|156,089,382|662,694,276|
|2. Beginning book value|454,183,367|52,150,013|149,115,517|655,448,897|

 As at June 30, 2018, the net value of the intangible assets with ownership restrictions was RMB 161,934,242 Yuan (December 31, 2017: RMB 164,051,996 Yuan). Please refer to Note 7.52 for details.
7.15.2 Land use right of that not receiving the property certificate
Nil
7.16 Goodwill
7.16.1 Original book value of goodwill
Unit: Yuan
||||||||
|-|-|-|-|-|-|-|
|Name of the invested||Increase in this period||Decrease in this period|||
||Beginning||||||
|unit or matter forming||Formed by business||||Ending balance|
||balance||Other|Disposal|Other||
|goodwill||merger|||||
|Etablissements Roullet|||||||
|Fransac (“Roullet|13,112,525|||||13,112,525|
|Fransac”)|||||||
|Dicot Partners, S.L|||||||
||92,391,901|||||92,391,901|
|(“Atrio Group”)|||||||
|Societe Civile|||||||
|Argricole Du Chateau|||||||
||15,761,440|||||15,761,440|
|De Mirefleurs|||||||
|(“Mirefleurs”)|||||||
|Indomita Wine|||||||
||6,870,115|||||6,870,115|
|Company Chile, SpA|||||||
|Kilikanoon Estate,|||||||
|||35,794,894||||35,794,894|
|Australia|||||||
|Total|128,135,981|35,794,894||||163,930,875|

 7.17 Long-term unamortized expenses
Unit: Yuan
|||||||
|-|-|-|-|-|-|
|||Increase in this|Amortization in this|||
|Item|Beginning balance|||Other decrease|Ending balance|
|||period|period|||
|Land lease fees|56,365,385||719,454||55,645,931|
|Land acquisition||||||
||43,976,036||569,650||43,406,386|
|fees||||||
|Afforestation fees|125,628,334|6,101,637|6,526,355||125,203,616|
|Renovation costs|873,263||109,158||764,105|
|Other|3,166,213||192,827||2,973,386|
|Total|230,009,231|6,101,637|8,117,444||227,993,424|

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report 7.18 Deferred income tax assets/liabilities
7.18.1 Un-offset deferred income tax assets
Unit: Yuan
||||||
|-|-|-|-|-|
||Ending Balance||Beginning Balance||
|Item|Deductible|Deferred income|Deductible|Deferred income|
||temporary||temporary||
|||tax assets||tax assets|
||difference||difference||
|Asset impairment provision|13,410,082|3,352,521|25,595,392|6,398,848|
|Unrealized profits from inter-company|||||
||585,312,988|146,328,247|618,591,681|154,647,920|
|transactions|||||
|Deductible loss|300,198,853|77,339,305|345,639,059|88,584,337|
|Unpaid bonus|59,305,392|14,853,004|94,462,722|23,671,611|
|Dismission welfare|20,405,213|5,101,303|27,980,857|6,995,214|
|Deferred income|108,652,154|23,832,078|109,797,054|24,285,203|
|Asset valuation impairment|673,019|181,715|684,622|184,848|
|Accrued promotional expenses|||13,413,655|3,353,415|
|Total|1,087,957,701|270,988,173|1,236,165,042|308,121,396|

 7.18.2 Un-offset deferred income tax liabilities
Unit: Yuan
||||||
|-|-|-|-|-|
||Ending Balance||Beginning Balance||
|Item|Taxable|Deferred income|Taxable|Deferred income|
||temporary||temporary||
|||tax liabilities||tax liabilities|
||difference||difference||
|Assets appraisal appreciation in business merger|||||
||105,651,986|26,020,063|89,316,823|24,264,203|
|under non-common control|||||
|Changes in fair value of available-for-sale|||||
|financial assets|||||
|Total|105,651,986|26,020,063|89,316,823|24,264,203|

 7.18.3 Details of unconfirmed deferred income tax assets
Unit: Yuan
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Deductible loss|157,307,221|150,320,039|
|Total|157,307,221|150,320,039|

 7.18.4 Deductible losses of unconfirmed deferred income tax assets will expire in:
Unit: Yuan
|||||
|-|-|-|-|
|Year|Ending sum|Beginning sum|Remark|
|2019|7,311,273|7,311,273||
|2020|45,960,766|45,960,766||

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
|||||
|-|-|-|-|
|2021|82,685,213|82,685,213||
|2022|14,362,787|14,362,787||
|2023|6,987,182|||
|Total|157,307,221|150,320,039|--|

7.19 Short-term loans
7.19.1 Classification of short-term loans
Unit: Yuan
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Pledge loan|||
|Mortgage loan|54,882,050|65,939,662|
|Guaranteed loan|43,544,169||
|Fiduciary loan|652,028,457|648,494,624|
|Total|750,454,676|714,434,286|

 As at June 30, 2018, the mortgage loan referred to the factoring business for accounts receivable of EUR 4,576,413 (equivalent to RMB 35,016,424 Yuan) that Hacienda y Vinedos Marques del Atrio, S.L.U. (“Marques del Atrio”) transacted in such banks as Banco de Sabadell, S.A. (December 31, 2017: RMB 46,337,062 Yuan), and a loan of USD 3,000,000 (equivalent to RMB 19,865,626 Yuan) that Indomita Wine Company Chile, SpA from BBVA bank by mortgage of fixed assets of CLP 3,139,045,000 (equivalent to RMB 31,704,355 Yuan) (December 31, 2017: RMB 19,602,600 Yuan).
By means of overseas loan under domestic guarantee, the Company opened a financing guarantee with the credit line of domestic bank to provide a guarantee for the loan of AUD 8,953,626 (equivalent to RMB 43,544,169 Yuan) of Kilikanoon Estate, Australia. The letter of guarantee came into effect from January 17, 2018 and will expire on January 15, 2019. 7.20 Accounts payable
7.20.1 List of accounts payable
Unit: Yuan
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Within one year|502,094,548|664,020,176|
|From one year to two years|2,408,743|2,051,592|
|From two years to three years|1,097,233|371,111|
|Over three years|256,431||
|Total|505,856,955|666,442,879|

 7.20.2 Explanation of significant accounts payable aged more than one year
As at June 30, 2018, there were no significant accounts payable aged more than one year.
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report 7.21 Advances from customers
7.21.1 List of advances from customers
Unit: Yuan
||||
|-|-|-|
|Item|Ending sum|Beginning sum|
|Within one year|356,522,984|340,025,690|
|From one year to two years|2,894,155|7,072,254|
|From two years to three years|3,285,740|381,463|
|Over three years|3,652,401|3,414,749|
|Total|366,355,280|350,894,156|

 7.21.2 Advances from customers of significant amount aged more than one year
As at June 30, 2018, the Company had no advances from customers of significant amount aged more than one year.
7.22 Employee remunerations payable
7.22.1 List of employee remunerations payable
Unit: Yuan
||||||
|-|-|-|-|-|
|||Increase in this|Decrease in this||
|Item|Beginning balance|||Ending balance|
|||period|period||
|1. Short-term remuneration|182,545,284|218,523,367|244,584,113|156,484,538|
|2. Post-employment welfare – defined|||||
||298,093|26,186,535|25,379,241|1,105,387|
|contribution plan|||||
|3. Dismission welfare|27,980,857|1,275,387|8,851,031|20,405,213|
|4.Other welfare due within one year|||||
|Total|210,824,234|245,985,289|278,814,385|177,995,138|

 7.22.2 List of short-term remunerations
Unit: Yuan
||||||
|-|-|-|-|-|
|||Increase in this|Decrease in this||
|Item|Beginning balance|||Ending balance|
|||period|period||
|1. Salaries, bonuses, allowances|||||
||185,014,318|194,859,167|220,953,405|158,920,080|
|and subsidies|||||
|2. Staff welfare|2,116,475|4,592,350|5,304,548|1,404,277|
|3. Social insurance charges|524,316|11,468,383|10,938,536|1,054,163|
|Including: Medical insurance|524,316|9,928,407|9,411,157|1,041,566|
|Injury insurance||819,706|807,109|12,597|
|Maternity insurance||720,270|720,270||
|4. Housing fund|39,256|5,680,880|5,709,726|10,410|
|5. Union fee and staff education fee|2,060,231|1,922,587|2,038,363|1,944,455|

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
||||||
|-|-|-|-|-|
|||Increase in this|Decrease in this||
|Item|Beginning balance|||Ending balance|
|||period|period||
|6. Short-term compensated|||||
|absences|||||
|7. Short-term profit-sharing plan|||||
|Minus: Those divided into|||||
||7,209,312||360,465|6,848,847|
|non-current liabilities|||||
|Total|182,545,284|218,523,367|244,584,113|156,484,538|

 7.22.3 List of defined contribution plan
Unit: Yuan
||||||
|-|-|-|-|-|
|Item|Beginning balance|Increase|Decrease|Ending balance|
|1. Basic endowment insurance|297,591|25,034,196|24,821,104|510,683|
|2. Unemployment insurance|502|1,152,339|558,137|594,704|
|3. Enterprise annuity payment||||-|
|Total|298,093|26,186,535|25,379,241|1,105,387|

 7.22.4 Dismission welfare
Unit: Yuan
||||||
|-|-|-|-|-|
|Item|Beginning balance|Increase|Decrease|Ending balance|
|1. Compensation for server of labor|||||
|||1,275,387|1,275,387||
|relation|||||
|2. Compensation for early retirement|27,980,857||7,575,644|20,405,213|
|Total|27,980,857|1,275,387|8,851,031|20,405,213|

 7.23 Taxes payable
Unit: Yuan
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Value added tax|15,404,619|35,681,696|
|Consumption tax|12,373,243|44,961,022|
|Corporate income tax|35,771,016|38,834,293|
|Individual income tax|804,004|7,805,917|
|Urban maintenance and construction tax|1,542,643|5,669,280|
|Property tax|3,976,184|4,647,644|
|Urban land use tax|2,493,549|2,645,687|
|Other|1,494,489|4,848,617|
|Total|73,859,747|145,094,156|

 7.24 Interest payable
Unit: Yuan
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Interest of long-term loans with interest paid by|||

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|installment and principal paid on maturity|||
|Interest of corporate bonds|||
|Interest payable of short-term loans|834,247|771,250|
|Interest of preferred shares\ perpetual bonds divided|||
|into financial liabilities|||
|Other|||
|Total|834,247|771,250|

 7.25 Dividends payable
Unit: Yuan
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Ordinary stock dividends|||
|Preferred stock dividends/sustainable debt dividends|||
|divided into equity instruments|||
|Other|746,021||
|Total|746,021||

7.26 Other payables
7.26.1 Other payables listed by nature
Unit: Yuan
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Dealer’s deposit payable|153,278,830|139,710,963|
|Equipment purchase and construction costs|||
||112,120,286|130,706,777|
|payable|||
|Transportation charges payable|13,329,596|27,847,092|
|Trademark use fees payable for Changyu Group|||
||45,965,699|77,208,929|
|Company|||
|Advertising expenses payable|243,506,777|132,248,615|
|Employee cash deposit|7,199,282|13,327,132|
|Supplier’s deposit payable|11,909,254|3,082,595|
|Contracting fees payable|26,669,423|38,070,571|
|Other|57,728,768|40,761,645|
|Total|671,707,915|602,964,319|

 7.26.2 Other significant accounts payable aged more than one year
Unit: Yuan
||||
|-|-|-|
|Item|Ending balance|Cause of unpayment or carry-over|
|Beijing Qinglang Ecological Agriculture|7,033,763||
|||The contracting fees haven’t been settled|
|Technology Development|||
|Yantai De’an Investment Co., Ltd.|3,218,174|The contracting fees haven’t been settled|
|Total|10,251,937|--|

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report 7.27 Non-current liabilities due within one year
Unit: Yuan
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Long-term loans due within one|106,570,388|76,954,827|
|year|||
|Long-term accounts payable due|34,000,000|34,000,000|
|within one year|||
|Total|140,570,388|110,954,827|

 7.28 Other current liabilities
Unit: Yuan
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Deferred income|16,311,727|16,878,199|
|Total|16,311,727|16,878,199|

 7.29 Long-term loans
7.29.1 Classification of long-term loans
Unit: Yuan
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Pledge loan|||
|Mortgage loan|7,528,121|6,693,544|
|Guaranteed loan|75,000,000|81,250,000|
|Fiduciary loan|71,437,070|68,182,310|
|Total|153,965,191|156,125,854|

 Description of the classification of long-term loans:
Unit: Yuan
|||||
|-|-|-|-|
|Item|Ending balance|Long-term loan due within one|Long-term loan due over one|
|||year|year|
|Pledge loan||||
|Mortgage loan|7,528,121||7,528,121|
|Guaranteed loan|100,000,000|25,000,000|75,000,000|
|Fiduciary loan|153,007,458|81,570,388|71,437,070|
|Total|260,535,579|106,570,388|153,965,191|

 As at June 30, 2018, the guaranteed loan referred to the long-term loan of RMB 100,000,000 Yuan borrowed by the Company for theR&D Company by means of credit guarantee (December 31, 2017: RMB 100,000,000 Yuan), and the mortgage loan referred to the loan of EUR 679,560 (equivalent to RMB 5,199,656 Yuan) borrowed from PopularEspañol by Marques del Atrio by mortgage of its fixed assets of EUR 4,264,170 (equivalent to RMB
32,627,300 Yuan) (December 31, 2017: RMB 9,502,372 Yuan). Kilikanoon Estate, Australia
borrowed a loan of AUD 478,783 (equivalent to RMB 2,328,465 Yuan) by pledge of its fixed
assets of AUD 503,163 (equivalent to RMB 2,447,034 Yuan) from NAB bank (December 31,
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report 2017: Nil).
7.30 Long-term accounts payable
7.30.1 Long-term accounts payable listed by nature
Unit: Yuan
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|China Agricultural Development Key Construction Fund|235,000,000|259,000,000|
|Total|235,000,000|259,000,000|

 In 2016, Agricultural Development Fund invested RMB 305,000,000 Yuan in theR&D Company, accounting for37.9% of the registered capital. According to the investment agreement, it is agreed that Agricultural Development Fund will take back the investment fund in ten years and obtain fixed income according to year, which is1.2% of the remaining principal. Except for the above fixed income, the Agricultural Development Fund shall not enjoy other profits of theR&D Company or bear the losses of theR&D Company. Accordingly, the investment of the Agricultural Development Fund in theR&D Company is equity investment nominally, which is debt investment in deed. The Group included the investment of the Agricultural Development Fund in long-term accounts payable measured by amortized cost. In 2017, the Group gave back the principal of RMB 12,000,000 Yuan. From January to June 2018, the Group gave back the principal of RMB 24,000,000 Yuan, and the mortgaged and pledged assets included monetary capital of RMB 61,700,000 Yuan, fixed assets of RMB 75,559,935 Yuan, and intangible assets of RMB 161,934,242.
Unit: Yuan
||||
|-|-|-|
|Balance of long-term accounts|Long-term accounts payable|Long-term accounts payable due in one|
|payable|due within one year|year later|
|269,000,000|34,000,000|235,000,000|

 7.31 Deferred income
Unit: Yuan
|||||||
|-|-|-|-|-|-|
|||Increase in this|Decrease in this|||
|Item|Beginning balance|||Ending balance|Forming reason|
|||period|period|||
|Governmental||||||
||109,797,054|8,200,000|9,344,900|108,652,154||
|subsidy||||||
|Minus: Those|16,878,199|||16,311,727||
|included in current|||||--|
|liabilities||||||
|Non-current|92,918,855|||92,340,427||
||||||--|
|liabilities||||||

Projects related to governmental subsidy
Unit: Yuan
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
||||||||||
|-|-|-|-|-|-|-|-|-|
|||Amount|||||||
|||||Amount|||||
|||of|Amount||||||
|||||included|Amount||||
|||subsidy|included in||||||
||Beginning|||in other|offset|Other|Ending|Related to|
|Item of liabilities||newly|non-operating||||||
||balance|||income in|the cost|changes|balance|assets/income|
|||increased|revenue in||||||
|||||this|expenses||||
|||in this|this period||||||
|||||period|||||
|||period|||||||
|Grape bulk wine|||||||||
||4,739,400|||717,450|||4,021,950|Related to assets|
|brewing project|||||||||
|Reward for investment|||||||||
|in fixed assets of|||||||||
||9,276,600|||1,140,000|||8,136,600|Related to assets|
|Chateau Shihezi|||||||||
|project|||||||||
|Industrial revitalization|||||||||
|and technical|||||||||
||17,064,000|||711,000|||16,353,000|Related to assets|
|transformation project|||||||||
|in Xinjiang|||||||||
|Special subsidy for|||||||||
|supporting|5,300,000|||530,000|||4,770,000|Related to assets|
|infrastructure|||||||||
|Industrial revitalization|||||||||
|and technical|||||||||
||1,086,000|||1,086,000||||Related to assets|
|transformation project|||||||||
|in Ningxia|||||||||
|Tourism development|||||||||
||500,000||||||500,000|Related to income|
|fund subsidy project|||||||||
|Supporting fund for|||||||||
||10,200,000||||||10,200,000|Related to income|
|corporate development|||||||||
|Construction project of|||||||||
|grape brewing|||||||||
||3,600,000|||200,000|||3,400,000|Related to assets|
|production capacity|||||||||
|(Huanren)|||||||||
|Electronic traceability|||||||||
||3,192,311|||333,527|||2,858,784|Related to assets|
|system project of wine|||||||||
|Transferred fund of|||||||||
|Propaganda|||||||||
||888,945|||444,472|||444,473|Related to assets|
|Department, Miyun|||||||||
|County Committee|||||||||
|Wine industry|||||||||
||744,000|||93,000|||651,000|Related to assets|
|development project|||||||||
|Peninsula blue|||||||||
|economic zone|8,000,000|||1,000,000|||7,000,000|Related to assets|
|construction project|||||||||
|Technical|||||||||
|transformation project|||||||||
|of information-based|3,480,000|||290,000|||3,190,000|Related to assets|
|system construction|||||||||
|engineering|||||||||
|Cross-border|||||||||
||702,615|300,000|||||1,002,615|Related to income|
|e-commerce project|||||||||
|Research project of red|||||||||
|wine phenolic|284,601||||||284,601|Related to income|
|substances|||||||||
|Grape base|||||||||
||520,000|||260,000|||260,000|Related to assets|
|construction project|||||||||
|Fund for water|||||||||
|pollution treatment|320,132|||56,801|||263,331|Related to income|
|project|||||||||
|Infrastructure|1,843,750|||62,500|||1,781,250|Related to assets|

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
||||||||||
|-|-|-|-|-|-|-|-|-|
|||Amount|||||||
|||||Amount|||||
|||of|Amount||||||
|||||included|Amount||||
|||subsidy|included in||||||
||Beginning|||in other|offset|Other|Ending|Related to|
|Item of liabilities||newly|non-operating||||||
||balance|||income in|the cost|changes|balance|assets/income|
|||increased|revenue in||||||
|||||this|expenses||||
|||in this|this period||||||
|||||period|||||
|||period|||||||
|construction fund|||||||||
|Supporting fund for|||||||||
||36,900,000|||2,050,000|||34,850,000|Related to assets|
|industrial development|||||||||
|Subsidy for economic|||||||||
|and energy-saving|||||||||
||1,154,700|||64,150|||1,090,550|Related to assets|
|technical|||||||||
|transformation project|||||||||
|Special fund for|||||||||
|building Yantai as a|||||||||
|||4,750,000|||||4,750,000|Related to income|
|strong manufacturing|||||||||
|city|||||||||
|Efficient water-saving|||||||||
|||3,150,000||306,000|||2,844,000|Related to assets|
|irrigation project|||||||||
|Total|109,797,054|8,200,000||9,344,900|||108,652,154|--|

7.32 Other non-current liabilities
Unit: Yuan
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Employee remunerations payable|6,848,847|7,209,312|
|Total|6,848,847|7,209,312|

 As at June 30, 2018, the employee remunerations payable referred to the job security deposit deducted from the year-end bonus of the employees higher than sales manager of the Company in proportion, which will be paid from 2019 to 2021 as predicted.
7.33 Share capital
Unit: Yuan
|||||||||
|-|-|-|-|-|-|-|-|
|||Increase or decrease (+,-) in this period||||||
|||||Share||||
||Beginning||||||Ending|
|||Newly issued|Allocated|transferred||||
||balance|||from|Other|Subtotal|balance|
|||shares|shares|||||
|||||accumulation||||
|||||fund||||
|Total shares|685,464,000||||||685,464,000|

 7.34 Capital reserves
Unit: Yuan
||||||
|-|-|-|-|-|
|||Increase in this period|Decrease in this||
|Item|Beginning balance|||Ending balance|
||||period||
|Capital premium (Share|||||
||560,038,853|||560,038,853|
|capital premium)|||||
|Other capital reserves|5,916,588|||5,916,588|
|Total|565,955,441|||565,955,441|

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report 7.35 Other comprehensive income
Unit: Yuan
|||||||||
|-|-|-|-|-|-|-|-|
|||Amount incurred in this period||||||
||||Minus: profit|||||
|||Amount||||||
||||or loss in this|||||
||Beginning|incurred||Minus:|Attributable|Attributable|Ending|
|Item|||period|||||
||balance|before|transferred|income|to parent|to minority|balance|
|||income tax||tax|company|shareholders||
||||from other|||||
|||in this||expenses|after tax|after tax||
||||comprehensive|||||
|||period||||||
||||income before|||||
|1. Other comprehensive income||||||||
|not to be reclassified into profit||||||||
|and loss later||||||||
|Including: change in net liabilities||||||||
|and net assets from recalculated||||||||
|defined benefit plan||||||||
|Share enjoyed in other||||||||
|comprehensive income not to be||||||||
|reclassified into profit and loss in||||||||
|invested unit under equity law||||||||
|2. Other comprehensive income to|||||-9,230,820|||
|be reclassified into profit and loss|3,109,240|-11,126,413||||-1,895,593|-6,121,580|
|later||||||||
|Including: share enjoyed in other||||||||
|comprehensive income to be||||||||
|reclassified into profit and loss in||||||||
|invested unit under equity law||||||||
|Profit and loss from||||||||
|changes in fair value of financial||||||||
|assets for sale||||||||
|Profit and loss from||||||||
|reclassification of held-to-maturity||||||||
|investment into fair value of||||||||
|financial assets for sale||||||||
|Effective part of profit and||||||||
|loss of cash-flow hedge||||||||
|Difference in translation of|||||-9,230,820|||
|Foreign Currency Financial|3,109,240|-11,126,413||||-1,895,593|-6,121,580|
|Statement||||||||
|Total other comprehensive income|3,109,240|-11,126,413|||-9,230,820|-1,895,593|-6,121,580|

 7.36 Surplus reserves
Unit: Yuan
||||||
|-|-|-|-|-|
||||Decrease in this||
|Item|Beginning balance|Increase in this period||Ending balance|
||||period||
|Legal surplus reserves|342,732,000|||342,732,000|
|Free surplus reserves|||||
|Reserve fund|||||
|Enterprise expansion fund|||||
|Other|||||
|Total|342,732,000|||342,732,000|

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report 7.37 Undistributed profit
Unit: Yuan
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Undistributed profit at the end of prior period before adjustment|7,309,081,618|6,620,118,562|
|Total Undistributed profit at the beginning of the period before adjustment|||
|(increase listed with+ , and decrease listed with -)|||
|Undistributed profit at the beginning of the period after adjustment|7,309,081,618|6,620,118,562|
|Plus: Net profit for owner of the parent company|635,837,405|1,031,695,056|
|Minus: Drawn legal surplus|||
|Drawn free surplus|||
|Drawn common risk provision|||
|Common dividend payable||342,732,000|
|Common dividend transferred to share capital|||
|Undistributed profit at the end of period|7,944,919,023|7,309,081,618|

 7.38 Operating income and operating cost
Unit: Yuan
||||||
|-|-|-|-|-|
||Amount incurred in this period||Amount incurred in prior period||
|Item|||||
||Income|Cost|Income|Cost|
|Main business|2,818,814,912|969,407,949|2,761,797,479|921,629,225|
|Other business|9,415,152|5,149,343|5,300,718|4,124,908|
|Total|2,828,230,064|974,557,292|2,767,098,197|925,754,133|

 7.39 Taxes and surcharges
Unit: Yuan
||||
|-|-|-|
|Item|Amount incurred in this period|Amount incurred in prior period|
|Consumption tax|97,343,463|87,580,364|
|Urban maintenance and construction tax|23,778,056|30,288,028|
|Education surcharges|17,417,976|21,968,359|
|Building tax|16,878,556|9,993,265|
|Land use tax|6,013,248|5,092,473|
|Stamp duty|2,247,814|1,970,707|
|Other|1,597,138|3,580,802|
|Total|165,276,251|160,473,998|

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report 7.40 Selling expenses
Unit: Yuan
||||
|-|-|-|
|Item|Amount incurred in this period|Amount incurred in prior period|
|Advertising promotion expenses|362,293,691|353,792,438|
|Employee remunerations|139,247,494|115,463,193|
|Transportation expenses|67,177,736|64,053,872|
|Trademark use fees|43,363,867|44,428,033|
|Storage and lease expenses|19,857,616|27,357,293|
|Depreciation expenses|21,735,895|19,740,726|
|Service charges|12,459,237|6,734,393|
|Travel expenses|10,886,711|10,036,717|
|Water, electricity and gas charges|7,166,936|3,572,499|
|Office & postage costs|2,349,806|2,479,541|
|Packing expenses|3,873,287|3,140,528|
|Public security & clean-keeping|||
||2,336,546|2,532,418|
|expenses|||
|Business entertainment expenses|1,995,516|1,190,071|
|Afforestation fees|1,177,756|1,342,117|
|Property management expenses|1,291,390|1,348,857|
|Other|13,445,549|11,523,030|
|Total|710,659,033|668,735,726|

 7.41 Management expenses
Unit: Yuan
||||
|-|-|-|
|Item|Amount incurred in this period|Amount incurred in prior period|
|Employee remunerations|60,660,238|45,732,792|
|Depreciation expenses|35,410,914|28,996,760|
|Contracting expenses|7,178,106|10,086,436|
|Repair expenses|7,076,148|5,768,634|
|Office expenses|10,977,189|8,693,956|
|Amortization expenses|9,520,182|9,569,693|
|Afforestation fees|6,493,556|3,893,103|
|Rental expenses|5,061,778|5,095,023|
|Business entertainment expenses|2,815,060|2,562,180|
|Public security & clean-keeping|||
||3,953,646|2,787,735|
|expenses|||
|Travel expenses|2,139,939|2,650,716|
|Other|8,805,132|4,705,358|
|Total|160,091,888|130,542,386|

 7.42 Financial expenses
Unit: Yuan
||||
|-|-|-|
|Item|Amount incurred in this period|Amount incurred in prior period|
|Interest expenditure|18,739,528|15,042,038|
|Minus: Interest income|7,245,870|4,849,166|

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
||||
|-|-|-|
|Plus: Commission charges|3,005,483|754,300|
|Exchange gain or loss|-1,413,199|200,777|
|Total|13,085,942|11,147,949|

 7.43 Loss on impairment of assets
||||
|-|-|-|
|Item|Amount incurred in this period|Amount incurred in prior period|
|1. Loss on bad debts|||
|2. Inventory falling price loss|-4,730,948|-5,853,576|
|3. Loss on impairment of available-for-sale|||
|financial assets|||
|4. Loss on impairment of held-to maturity|||
|investment|||
|5. Loss on impairment of long-term equity|||
|investment|||
|6. Loss on impairment of investment real estate|||
|7. Loss on impairment of fixed assets|||
|8. Loss on impairment of engineering materials|||
|9. Loss on impairment of construction in progress|||
|10. Loss on impairment of productive biological|||
|assets|||
|11. Loss on impairment of oil and gas assets|||
|12. Loss on impairment of intangible assets|||
|13. Loss on impairment of goodwill|||
|14. Other|||
|Total|-4,730,948|-5,853,576|

 7.44 Income from asset disposal
Unit: Yuan
||||
|-|-|-|
|Source of income from asset disposal|Amount incurred in this period|Amount incurred in prior period|
|Income from disposal of fixed assets|93,958|-495,071|
|Total|93,958|-495,071|

 7.45 Other income
Unit: Yuan
|||||
|-|-|-|-|
||Amount incurred in this|Amount incurred in|Nature|
|Source of other income||||
||period|prior period||
|Supporting fund for industrial development|2,050,000||Related to assets|
|Industrial revitalization and technical||||
||1,086,000||Related to assets|
|transformation project in Ningxia||||
|Reward for investment in fixed assets|1,140,000||Related to assets|
|Special fund for construction of peninsula blue||||
||1,000,000||Related to assets|
|economic zone||||
|Other|4,012,100||Related to assets|
|Tax returns|15,011,673||Related to income|
|Other|13,683,105||Related to income|

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
|||||
|-|-|-|-|
||Amount incurred in this|Amount incurred in|Nature|
|Source of other income||||
||period|prior period||
|Total|37,982,878|||

7.46 Non-operating income
Unit: Yuan
|||||
|-|-|-|-|
||Amount incurred in|Amount incurred in|Amount included in the current|
|Item||||
||this period|prior period|non-recurring profits/losses|
|Gains on debt recombination||||
|Gains on exchange of non-monetary||||
|assets||||
|Grains on donations||||
|Governmental subsidy||19,735,204||
|Other|2,006,392|3,412,401|2,006,392|
|Total|2,006,392|23,147,605|2,006,392|

 Governmental subsidies included in the current profit/loss:
Unit: Yuan
|||||
|-|-|-|-|
||Amount incurred in|Amount incurred in||
|Item of subsidy|||Related to assets/income|
||this period|prior period||
|Supporting fund of major projects||3,520,914|Related to assets|
|Supporting fund for the development of||||
|||2,086,027|Related to assets|
|small and medium-sized enterprises||||
|Tax returns||12,737,950|Related to income|
|Other||1,390,313|Related to income|
|Total||19,735,204|--|

7.47 Non-operating expenses
Unit: Yuan
|||||
|-|-|-|-|
||Amount incurred in|Amount incurred in|Amount included in the current|
|Item||||
||this period|prior period|non-recurring profits/losses|
|Loss on debt recombination||||
|Loss on exchange of||||
|non-monetary assets||||
|Donation||||
|Fine, penalty and overdue fine||||
|paid due to violation of laws and|1,187,713|170,997|1,187,713|
|administrative regulations||||
|Other|204,649|15,571|204,649|
|Total|1,392,362|186,568|1,392,362|

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report 7.48 Income tax expenses
7.48.1 List of income tax expenses
Unit: Yuan
||||
|-|-|-|
|Item|Amount incurred in this period|Amount incurred in prior|
|||period|
|Current income tax expenses|178,993,081|195,716,215|
|Deferred income tax expenses|32,986,654|33,036,575|
|Total|211,979,735|228,752,790|

 7.48.2 Adjustment process of accounting profit and income tax expenses
Unit: Yuan
|||
|-|-|
|Item|Amount incurred in this period|
||847,981,472|
|Total profit||
|Income tax expenses calculated according to the legal/applicable tax rate|211,995,368|
|Influence of different tax rates applicable to subsidiary|-3,617,656|
|Influence of income tax in the term before adjustment|200,814|
|Influence of nontaxable income||
|Influence of non-deductible costs, expenses and losses|1,654,413|
|Influence of deductible loss from use of unconfirmed deferred income tax assets in prior||
|period||
|Influence of deductible temporary difference or deductible loss of unconfirmed deferred||
||1,746,796|
|income tax assets in this period||
||211,979,735|
|Income tax expense||

 7.49 Other comprehensive income
See details in Note 7.35.
7.50 Items of cash flow statement
7.50.1 Other cash received related to operating activities
Unit: Yuan
||||
|-|-|-|
|Item|Amount incurred in this period|Amount incurred in prior period|
|Governmental subsidy income|33,687,978|1,570,329|
|Interest income|3,555,019|3,007,182|
|Net amercement income|1,609,829|1,173,364|
|Withdrawal of cash deposit for bills payable||30,900,000|
|Other|3,490,195|2,239,037|
|Total|42,343,021|38,889,912|

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report 7.50.2 Other cash paid related to operating activities
Unit: Yuan
||||
|-|-|-|
|Item|Amount incurred in this period|Amount incurred in prior period|
|Selling expenses|387,846,396|352,845,674|
|Administrative expenses|45,235,101|43,700,254|
|Refundable deposits||35,030,980|
|Other|3,895,589|940,870|
|Total|436,977,086|432,517,778|

 7.50.3 Other cash paid related to investment activities
Unit: Yuan
||||
|-|-|-|
|Item|Amount incurred in this period|Amount incurred in prior period|
|Prepaid investment fund||317,654,642|
|Total||317,654,642|

 7.50.4 Other cash received related to financial activities
Unit: Yuan
||||
|-|-|-|
|Item|Amount incurred in this period|Amount incurred in prior period|
|Government subsidies received related to|||
||3,150,000|1,000,000|
|assets|||
|Interest income from pledge of fixed|||
||371,431|303,473|
|deposits by the R&D Company|||
|Long-term loans from pledge of fixed|||
||20,000,000||
|deposits by R&D Company|||
|Total|23,521,431|1,303,473|

 7.50.5 Other cash paid related to financial activities
Unit: Yuan
||||
|-|-|-|
|Item|Amount incurred in this period|Amount incurred in prior period|
|R&D Company’ long-term loans pledged by|||
||20,000,000||
|fixed-term deposits|||
|Total|20,000,000||

7.51 Supplementary information to cash flow statement
7.51.1 Supplementary information to cash flow statement
Unit: Yuan
||||
|-|-|-|
|Supplementary materials|Amount incurred in this period|Amount incurred in prior period|
|1. Cash flows from operating activities calculated by|||
||--|--|
|adjusting the net profit:|||
|Net profit|636,001,737|670,010,757|
|Plus: Provision for impairment of assets|-4,730,948|-5,853,576|
|Depreciation of fixed assets, oil-and-gas assets and|||
||148,983,240|132,923,630|
|productive biological assets|||

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
||||
|-|-|-|
|Supplementary materials|Amount incurred in this period|Amount incurred in prior period|
|Intangible assets amortization|11,567,301|9,588,347|
|Amortization of long term prepaid expenses|8,117,444|5,221,889|
|Losses on disposal of fixed assets, intangible assets and|||
||-93,958|495,071|
|other long-term assets (profit listed with “－”)|||
|Losses on retirement of fixed assets (profit listed with|||
|“－”)|||
|Losses on fair value change (profit listed with “－”)|||
|Financial costs (profit listed with “－”)|15,048,678|15,086,410|
|Investment losses (profit listed with “－”)|||
|Decrease in deferred income tax assets (increase listed|||
||37,133,223|36,092,247|
|with “-”)|||
|Increase of deferred income tax liabilities (decrease|||
||-4,146,569|-3,055,672|
|listed with “－”)|||
|Decrease in inventories (increase listed with “-”)|216,486,236|230,160,387|
|Decrease in operating receivables (increase listed with|||
||-305,623,146|-345,259,383|
|“-”)|||
|Increase in operating payable (decrease listed with “-”)|-205,989,766|-325,049,788|
|Other|||
|Net cash flows from operating activities|552,753,472|420,360,319|
|2. Significant investment and financing activities not|||
||--|--|
|involving cash deposit and withdrawal:|||
|Debt transferred into assets|||
|Convertible corporate bond due within 1 year|||
|Fixed assets under financing lease|||
|3. Net changes of cash and cash equivalent:|--|--|
|Ending balance of cash|1,428,670,462|1,229,487,903|
|Minus: Beginning balance of cash|1,180,889,274|1,256,942,304|
|Plus: Ending balance of cash equivalent|||
|Minus: Beginning balance of cash equivalent|||
|Net increase amount of cash and cash equivalent|247,781,188|-27,454,401|

 7.51.2 Composition of cash and cash equivalents
Unit: Yuan
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|1. Cash|1,428,670,462|1,229,487,903|
|Including: Cash on hand|151,228|112,832|
|Bank deposits on demand|1,428,519,234|1,229,375,071|
|Other monetary capital on demand|||
|Due from central bank available for payment|||
|Due from the industry|||
|Inter-bank lending|||
|2. Cash equivalents|||
|Including: Bond investment due within three months|||
|3. Balance of cash and cash equivalents at the end of|1,428,670,462|1,229,487,903|
|period|||

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
||
|-|
|Including: Restricted use of parent company or|
|subsidiaries in the group|

7.52 Assets with ownership or use right restrictions
Unit: Yuan
||||
|-|-|-|
|Item|Ending book value|Reason for restriction|
|||Loan deposit, L/C deposit, frozen balance of Alipay,housing fund and guaranty money for deposit in unitcard|
|Monetary capital|124,367,991||
|Accounts receivable|35,016,424|Pledge of short-term loans|
|||Pledge of short-term loans, long-term loans andlong-term accounts payable|
|Fixed assets|142,338,624||
|Intangible assets|161,934,242|Pledge of long-term accounts payable|
|Total|463,657,281|--|

7.53 Foreign currency monetary items
7.53.1 Foreign currency monetary items
The foreign currency monetary items of the Group in domestic entities of China are listed as follows:
Unit: Yuan
|||||
|-|-|-|-|
|Item|Ending foreign currency balance|Translation exchange rate|Ending converted RMB balance|
|Monetary capital|--|--|39,366,401|
|Including: USD|5,949,495|6.6166|39,365,429|
|EUR|127|7.6515|972|
|HKD||||

7.53.2 Overseas operational entities
The currency adopted by the overseas subsidiaries of the Company according to the main economic environment where the operation is located shall be chosen as the recording currency. Marques del Atrio and Francs Champs Participations SAS (“Francs Champs”) both use euro as the recording currency, Indomita Wine Company Chile, SpA uses Chilean peso as the recording currency, and Kilikanoon Estate, Australia uses Australian dollar as the recording currency. The foreign currency assets or liabilities of overseas subsidiaries are listed as follows:
Unit: Yuan
|||||
|-|-|-|-|
|Item|Ending foreign currency balance|Translation exchange rate|Ending converted RMB balance|
|Monetary capital|--|--|41,202,833|
|Including: USD|6,169,166|6.6166|40,818,904|
|EUR|50,177|7.6515|383,929|
|HKD||||
|Short-term loans|--|--|59,549,400|
|Including: USD|9,000,000|6.6166|59,549,400|
|EUR||||
|HKD||||

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report 8. Changes in scope of consolidation
8.1 Business merger under non-common control incurred in this period
Unit: Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
||||||||Income of|Net profit of|
||||||||the|the|
|||||||Determination|purchased|purchased|
||Time of|Cost of|||||||
|Name of the|||Shareholding|Way of equity|Purchasing|basis of the|from the|from the|
||equity|equity|||||||
|purchased|||ratio|acquisition|date|purchasing|purchasing|purchasing|
||acquisition|acquisition|||||||
|||||||date|date to the|date to the|
||||||||end of this|end of this|
||||||||period|period|
|KilikanoonEstate PtyLtd("KilikanoonEstate,Australia")|||||January 18,2018|The Companyacquired thecontrol rightover themerged partyon the date ofpurchase.|25,904,401|-115,317|
||January 18,||||||||
|||105,926,184|80%|Purchase|||||
||2018||||||||

According to the Equity Transfer Contract signed between the Company and the shareholders of Kilikanoon Estate, Australia, the Company purchased80% of the shares held by Kilikanoon Estate, Australia with AUD 20,605,000 (equivalent to RMB 105,926,184 Yuan). On January 18, 2018, the preconditions for full equity transfer were fulfilled, and the Company acquired the control right over the finance and business policy of Kilikanoon Estate, Australia.
8.1.2 Combined cost and goodwill
Unit: Yuan
|||
|-|-|
|Combined cost|Kilikanoon Estate, Australia|
|--Cash|105,926,184|
|-- Fair value of the non-cash assets||
|-- Fair value of the issued or assumed debts||
|-- Fair value of the issued equity securities||
|-- Fair value of the contingent consideration||
|-- Fair value of the stock equity held before the purchasing date on the||
|purchasing date||
|--Other||
|Total combined cost|105,926,184|
|Minus: Fair value share of the acquired net identifiable assets|70,131,290|
|Amount of the share that the goodwill/combined cost is less than the fair||
||35,794,894|
|value of the net identifiable assets||

8.1.3 Identifiable assets and liabilities of the purchased on the purchasing date
Unit: Yuan
||||
|-|-|-|
|Item|Kilikanoon Estate, Australia||
||Fair value on the purchasing date|Book value on the purchasing date|
|Assets:|||
|Monetary capital|1,359,765|1,359,765|

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
||||
|-|-|-|
|Item|Kilikanoon Estate, Australia||
||Fair value on the purchasing date|Book value on the purchasing date|
|Accounts receivable|10,366,281|10,366,281|
|Advance payment|237,174|237,174|
|Other receivables|182,667|182,667|
|Inventory|69,612,312|57,946,312|
|Financial assets available for sale|5,053|5,053|
|Fixed assets|49,029,999|38,696,709|
|Intangible assets|16,417,886|7,461,624|
|Total assets|147,211,137|116,255,585|
|Liabilities:|||
|Long-term loans|1,282,550|1,282,550|
|Accounts payable|6,198,846|6,198,846|
|Employee remuneration payable|876,987|876,987|
|Taxes and dues payable|1,789,093|1,789,093|
|Long-term loans|43,497,119|43,497,119|
|Deferred income tax liabilities|5,902,429||
|Total liabilities|59,547,024|53,644,595|
|Net assets|87,664,113|62,610,990|
|Minus: Minority equity|17,532,823|12,522,198|
|Net assets acquired|70,131,290|50,088,792|

 9. Equity in other entities
9.1 Equity in the subsidiaries
9.1.1 Constitution of enterprise group
||||||||
|-|-|-|-|-|-|-|
|||||Proportion of|||
||||Business||||
|Name of subsidiary|Principal business location|Registration place||shareholding||Acquisition mode|
||||nature||||
|||||Direct|Indirect||
||Shihezi City, Xinjiang|||||Acquired from a business|
|||Shihezi City, Xinjiang Uygur|Manufacturing||||
|Xinjiang Tianzhu (a)|Uygur Autonomous Region,|||60%||combination under|
|||Autonomous Region, China|industry||||
||China|||||non-common control|
|||||||Acquired from a business|
|Roullet Fransac|Cognac, France|Cognac, France|Trading||100%|combination under|
|||||||non-common control|
|||||||Acquired from a business|
|Mirefleurs|Bordeaux, France|Bordeaux, France|Trading||100%|combination under|
|||||||non-common control|
|||||||Acquired from a business|
|Marques del Atrio (b)|Navarra, Spain|Navarra, Spain|Sales|75%||combination under|
|||||||non-common control|
|||||||Acquired from a business|
||Adelaide, South Australia,|Adelaide, South Australia,|||||
|Kilikanoon Estate, Australia|||Sales|80%||combination under|
||Australia|Australia|||||
|||||||non-common control|
|||||||Acquired by|
|Indomita Wine (c)|Santiago, Chile|Santiago, Chile|Sales|85%||establishment or|
|||||||investment|
|Beijing Changyu Wine||||||Acquired by|
|Marketing Co., Ltd.|Beijing City, China|Beijing City, China|Sales|100%||establishment or|
|(“Beijing Marketing”)||||||investment|
|Yantai Kylin Packaging||||||Acquired by|
||Yantai City, Shandong|Yantai City, Shandong|Manufacturing||||
|Co., Ltd. (“Kylin||||100%||establishment or|
||Province, China|Province, China|industry||||
|Packaging”)||||||investment|

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
||||||||
|-|-|-|-|-|-|-|
|||||Proportion of|||
||||Business||||
|Name of subsidiary|Principal business location|Registration place||shareholding||Acquisition mode|
||||nature||||
|||||Direct|Indirect||
|Yantai Chateau||||||Acquired by|
||Yantai City, Shandong|Yantai City, Shandong|Manufacturing||||
|Changyu-Castel Co., Ltd.||||70%||establishment or|
||Province, China|Province, China|industry||||
|(“Chateau Changyu”) (d)||||||investment|
|Changyu (Jingyang)||||||Acquired by|
||Xianyang City, Shaanxi|Xianyang City, Shaanxi|Manufacturing||||
|Pioneer Wine Co., Ltd.||||90%|10%|establishment or|
||Province, China|Province, China|industry||||
|(“Jingyang Wine”)||||||investment|
|Yantai Changyu Pioneer||||||Acquired by|
||Yantai City, Shandong|Yantai City, Shandong|||||
|Wine Sales Co., Ltd.|||Sales|100%||establishment or|
||Province, China|Province, China|||||
|(“Sales Company”)||||||investment|
|Langfang Development|||||||
|Zone Castel-Changyu Wine|Langfang City, Hebei|Langfang City, Hebei Province,|Manufacturing|39%|10%|Acquired byestablishment or|
|Co., Ltd. (“Langfang|Province, China|China|industry||||
|Castel”) (e)||||||investment|
|Changyu (Jingyang)||||||Acquired by|
||Xianyang City, Shaanxi|Xianyang City, Shaanxi|||||
|Pioneer Wine Sales Co.,|||Sales|10%|90%|establishment or|
||Province, China|Province, China|||||
|Ltd. (“Jingyang Sales”)||||||investment|
|Langfang Changyu Pioneer||||||Acquired by|
||Langfang City, Hebei|Langfang City, Hebei Province,|||||
|Wine Sales Co., Ltd.|||Sales|10%|90%|establishment or|
||Province, China|China|||||
|(“Langfang Sales”)||||||investment|
|Shanghai Changyu Wine||||||Acquired by|
|Marketing Co., Ltd.|Shanghai City, China|Shanghai City, China|Sales|30%|70%|establishment or|
|(“Shanghai Marketing”)||||||investment|
|Beijing Changyu AFIP|||||||
|Eco-agriculture|Miyun County, Beijing City,|Miyun County, Beijing City,||||Acquired by|
|Development Co., Ltd.|||Sales||100%|establishment or|
||China|China|||||
|(“Eco-agriculture||||||investment|
|Development”)|||||||
|Beijing Changyu AFIP||||||Acquired by|
||||Manufacturing||||
|Wine Chateau Co., Ltd.|Beijing City, China|Beijing City, China||90%||establishment or|
||||industry||||
|(“Beijing Chateau”) (f)||||||investment|
|||||||Acquired by|
|Yantai Changyu Wine Sales|Yantai City, Shandong|Yantai City, Shandong|||||
||||Sales|90%|10%|establishment or|
|Co., Ltd. ( “Wine Sales”)|Province, China|Province, China|||||
|||||||investment|
|Yantai Changyu Pioneer||||||Acquired by|
||Yantai City, Shandong|Yantai City, Shandong|||||
|International Wine Co., Ltd.|||Sales|70%|30%|establishment or|
||Province, China|Province, China|||||
|(“Pioneer International”)||||||investment|
|Hangzhou Changyu Wine||||||Acquired by|
||Hangzhou City, Zhejiang|Hangzhou City, Zhejiang|||||
|Sales Co., Ltd. (“Hangzhou|||Sales||100%|establishment or|
||Province, China|Province, China|||||
|Changyu”)||||||investment|
|||||||Acquired by|
||Yinchuan City, Ningxia Hui|Yinchuan City, Ningxia Hui|Planting||||
|Ningxia Growing||||100%||establishment or|
||Autonomous Region, China|Autonomous Region, China|industry||||
|||||||investment|
|Huanren Changyu National||||||Acquired by|
||Benxi City, Liaoning|Benxi City, Liaoning Province,|||||
|Wine Sales Co., Ltd.|||Sales|100%||establishment or|
||Province, China|China|||||
|(“National Wine”)||||||investment|
|Liaoning Changyu Icewine||||||Acquired by|
||Benxi City, Liaoning|Benxi City, Liaoning Province,|Manufacturing||||
|Valley Co., Ltd. (“Icewine||||51%||establishment or|
||Province, China|China|industry||||
|Valley”) (g)||||||investment|
|Yantai Development Zone|||||||
|||||||Acquired by|
|Changyu Trading Co., Ltd.|Yantai City, Shandong|Yantai City, Shandong|Sales||100%|establishment or|
|(“Development Zone|Province, China|Province, China|||||
|Trading”)||||||investment|
|Shenzhen Changyu Wine||||||Acquired by|
||Shenzhen City, Guangdong|Shenzhen City, Guangdong|||||
|Marketing Co., Ltd.|||Sales||100%|establishment or|
||Province, China|Province, China|||||
|(“Shenzhen Marketing”)||||||investment|
|Yantai Fushan District||||||Acquired by|
||Yantai City, Shandong|Yantai City, Shandong|||||
|Changyu Trading Co., Ltd.|||Sales||100%|establishment or|
||Province, China|Province, China|||||
|(“Fushan Trading”)||||||investment|
|Beijing Changyu AFIP|||||||
|International Conference|Miyun County, Beijing City,|Miyun County, Beijing City,|Service||100%|Acquired byestablishment or|
|Center Co., Ltd.|China|China|industry||||
|(“Conference Center”)||||||investment|
|Beijing Changyu AFIP||||||Acquired by|
||Miyun County, Beijing City,|Miyun County, Beijing City,|Tourist||||
|Tourism and Culture Co.,|||||100%|establishment or|
||China|China|industry||||
|Ltd. (“AFIP Tourism”)||||||investment|

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
||||||||
|-|-|-|-|-|-|-|
|||||Proportion of|||
||||Business||||
|Name of subsidiary|Principal business location|Registration place||shareholding||Acquisition mode|
||||nature||||
|||||Direct|Indirect||
|Changyu (Ningxia) Pioneer||||||Acquired by|
||Yinchuan City, Ningxia Hui|Yinchuan City, Ningxia Hui|Manufacturing||||
|Wine Co., Ltd. (“Ningxia||||100%||establishment or|
||Autonomous Region, China|Autonomous Region, China|industry||||
|Wine”)||||||investment|
|Yantai Changyu Chateau||||||Acquired by|
||Yantai City, Shandong|Yantai City, Shandong|Wholesale and||||
|Tinlot Co., Ltd. (“Chateau||||65%|35%|establishment or|
||Province, China|Province, China|retail||||
|Tinlot”)||||||investment|
|Changyu (Qingtongxia)|Qingtongxia City, Ningxia|||||Acquired by|
|||Qingtongxia City, Ningxia Hui|||||
|Wine Sales Co., Ltd.|Hui Autonomous Region,||Sales||100%|establishment or|
|||Autonomous Region, China|||||
|(“Qingtongxia Sales”)|China|||||investment|
||Shihezi City, Xinjiang|||||Acquired by|
|||Shihezi City, Xinjiang Uygur|Manufacturing||||
|Shihezi Chateau|Uygur Autonomous Region,|||100%||establishment or|
|||Autonomous Region, China|industry||||
||China|||||investment|
|Chateau Changyu Moser||||||Acquired by|
||Yinchuan City, Ningxia Hui|Yinchuan City, Ningxia Hui|Manufacturing||||
|XV Ningxia Co., Ltd.||||100%||establishment or|
||Autonomous Region, China|Autonomous Region, China|industry||||
|(“Ningxia Chateau”)||||||investment|
|Chateau Changyu Rena||||||Acquired by|
||Xianyang City, Shaanxi|Xianyang City, Shaanxi|Manufacturing||||
|Shaanxi Co., Ltd.||||100%||establishment or|
||Province, China|Province, China|industry||||
|(“Chang’an Chateau”)||||||investment|
|||||||Acquired by|
||Yantai City, Shandong|Yantai City, Shandong|Manufacturing||||
|R&D Company (g)||||65%||establishment or|
||Province, China|Province, China|industry||||
|||||||investment|
|Changyu (Huanren) Pioneer|||Wine-making|||Acquired by|
||Benxi City, Liaoning|Benxi City, Liaoning Province,|||||
|Wine Co., Ltd. (“Huanren|||project|100%||establishment or|
||Province, China|China|||||
|Wine”)|||preparation|||investment|
|Xinjiang Changyu Wine|Shihezi City, Xinjiang|||||Acquired by|
|||Shihezi City, Xinjiang Uygur|||||
|Sales Co., Ltd. (“Xinjiang|Uygur Autonomous Region,||Sales||100%|establishment or|
|||Autonomous Region, China|||||
|Sales”)|China|||||investment|
|Xinjiang Changyu Pioneer|Shihezi City, Xinjiang|||||Acquired by|
|||Shihezi City, Xinjiang Uygur|Manufacturing||||
|Wine Co., Ltd. (“Xinjiang|Uygur Autonomous Region,||||100%|establishment or|
|||Autonomous Region, China|industry||||
|Wine”)|China|||||investment|
|Ningxia Changyu Trading||||||Acquired by|
||Yinchuan City, Ningxia Hui|Yinchuan City, Ningxia Hui|||||
|Co., Ltd. (“Ningxia|||Sales||100%|establishment or|
||Autonomous Region, China|Autonomous Region, China|||||
|Trading”)||||||investment|
|Shaanxi Changyu Rena||||||Acquired by|
||Xianyang City, Shaanxi|Xianyang City, Shaanxi|||||
|Wine Sales Co., Ltd.|||Sales||100%|establishment or|
||Province, China|Province, China|||||
|(“Shaanxi Sales”)||||||investment|
|Penglai Changyu Wine||||||Acquired by|
||Penglai City, Shandong|Penglai City, Shandong|||||
|Sales Co., Ltd. (“Penglai|||Sales||100%|establishment or|
||Province, China|Province, China|||||
|Wine”)||||||investment|
|Laizhou Changyu Wine||||||Acquired by|
||Laizhou City, Shandong|Laizhou City, Shandong|||||
|Sales Co., Ltd. (“Laizhou|||Sales||100%|establishment or|
||Province, China|Province, China|||||
|Sales”)||||||investment|
|||||||Acquired by|
|Francs Champs|||Investment||||
||Cognac, France|Cognac, France||100%||establishment or|
|Participations SAS|||trade||||
|||||||investment|
|Lanzhou Changyu Wine||||||Acquired by|
||Lanzhou City, Gansu|Lanzhou City, Gansu Province,|||||
|Marketing Co., Ltd.|||Sales||100%|establishment or|
||Province, China|China|||||
|(“Lanzhou Marketing”)||||||investment|
|Beijing Changyu Trading||||||Acquired by|
|Co., Ltd. (“Beijing|Beijing City, China|Beijing City, China|Sales||100%|establishment or|
|Trading”)||||||investment|
|Tianjin Changyu Pioneer||||||Acquired by|
|Wine Sales Co., Ltd.|Tianjin City, China|Tianjin City, China|Sales||100%|establishment or|
|(“Tianjin Pioneer”)||||||investment|
|Fuzhou Changyu Pioneer||||||Acquired by|
||Fuzhou City, Fujian|Fuzhou City, Fujian Province,|||||
|Wine Co., Ltd. (“Fuzhou|||Sales||100%|establishment or|
||Province, China|China|||||
|Pioneer”)||||||investment|
|Nanjing Changyu Pioneer||||||Acquired by|
||Nanjing City, Jiangsu|Nanjing City, Jiangsu Province,|||||
|Wine Co., Ltd. (“Nanjing|||Sales||100%|establishment or|
||Province, China|China|||||
|Pioneer”)||||||investment|
|Xianyang Changyu Pioneer||||||Acquired by|
||Xianyang City, Shaanxi|Xianyang City, Shaanxi|||||
|Wine Sales Co., Ltd.|||Sales||100%|establishment or|
||Province, China|Province, China|||||
|(“Xianyang Pioneer”)||||||investment|
|Shenyang Changyu Pioneer|Shenyang City, Liaoning|Shenyang City, Liaoning||||Acquired by|
||||Sales||100%||
|Wine Co., Ltd. (“Shenyang|Province, China|Province, China||||establishment or|

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
||||||||
|-|-|-|-|-|-|-|
|||||Proportion of|||
||||Business||||
|Name of subsidiary|Principal business location|Registration place||shareholding||Acquisition mode|
||||nature||||
|||||Direct|Indirect||
|Pioneer”)||||||investment|
|Jinan Changyu Pioneer||||||Acquired by|
||Jinan City, Shandong|Jinan City, Shandong Province,|||||
|Wine Co., Ltd. (“Jinan|||Sales||100%|establishment or|
||Province, China|China|||||
|Pioneer”)||||||investment|
|Shanghai Changyu Pioneer||||||Acquired by|
|Wine Co., Ltd. (“Shanghai|Shanghai City, China|Shanghai City, China|Sales||100%|establishment or|
|Pioneer”)||||||investment|
|Fuzhou Changyu Pioneer||||||Acquired by|
||Fuzhou City, Jiangxi|Fuzhou City, Jiangxi Province,|||||
|Wine Co., Ltd. (“Fuzhou|||Sales||100%|establishment or|
||Province, China|China|||||
|Pioneer”)||||||investment|
|Shijiazhuang Changyu|||||||
|||||||Acquired by|
|Pioneer Wine Sales Co.,|Shijiazhuang City, Hebei|Shijiazhuang City, Hebei|Sales||100%|establishment or|
|Ltd. (“Shijiazhuang|Province, China|Province, China|||||
|Pioneer”)||||||investment|
|Hangzhou Yuzefeng||||||Acquired by|
||Hangzhou City, Zhejiang|Hangzhou City, Zhejiang|||||
|Trading Co., Ltd.|||Sales||100%|establishment or|
||Province, China|Province, China|||||
|(“Hangzhou Yuzefeng”)||||||investment|
|||||||Acquired by|
|Jilin Changyu Pioneer Wine|Changchun City, Jilin|Changchun City, Jilin|||||
||||Sales||100%|establishment or|
|Co., Ltd. (“Jilin Pioneer”)|Province, China|Province, China|||||
|||||||investment|
|Beijing Changyu Pioneer||||||Acquired by|
|Wine Sales Co., Ltd.|Beijing City, China|Beijing City, China|Sales||100%|establishment or|
|(“Beijing Pioneer”)||||||investment|
|Harbin Changyu Pioneer||||||Acquired by|
||Harbin City, Heilongjiang|Harbin City, Heilongjiang|||||
|Wine Sales Co., Ltd.|||Sales||100%|establishment or|
||Province, China|Province, China|||||
|(“Harbin Pioneer”)||||||investment|
|Hunan Changyu Pioneer||||||Acquired by|
||Changsha City, Hunan|Changsha City, Hunan|||||
|Wine Co., Ltd. (“Hunan|||Sales||100%|establishment or|
||Province, China|Province, China|||||
|Pioneer”)||||||investment|
|Yinchuan Changyu Pioneer||||||Acquired by|
||Yinchuan City, Ningxia Hui|Yinchuan City, Ningxia Hui|||||
|Wine Co., Ltd. (“Yinchuan|||Sales||100%|establishment or|
||Autonomous Region, China|Autonomous Region, China|||||
|Pioneer”)||||||investment|
|Kunming Changyu Pioneer||||||Acquired by|
||Kunming City, Yunnan|Kunming City, Yunnan|||||
|Wine Co., Ltd. (“Kunming|||Sales||100%|establishment or|
||Province, China|Province, China|||||
|Pioneer”)||||||investment|
|Chongqing Changyu||||||Acquired by|
|Pioneer Wine Sales Co.,|Chongqing City, China|Chongqing City, China|Sales||100%|establishment or|
|Ltd. (“Chongqing Pioneer”)||||||investment|
|Zhengzhou Changyu||||||Acquired by|
||Zhengzhou City, Henan|Zhengzhou City, Henan|||||
|Pioneer Wine Co., Ltd.|||Sales||100%|establishment or|
||Province, China|Province, China|||||
|(“Zhengzhou Pioneer”)||||||investment|
|Wuhan Changyu Pioneer||||||Acquired by|
||Wuhan City, Hubei|Wuhan City, Hubei Province,|||||
|Wine Co., Ltd. (“Wuhan|||Sales||100%|establishment or|
||Province, China|China|||||
|Pioneer”)||||||investment|
|Taiyuan Changyu Pioneer||||||Acquired by|
||Taiyuan City, Shanxi|Taiyuan City, Shanxi Province,|||||
|Wine Co., Ltd. (“Taiyuan|||Sales||100%|establishment or|
||Province, China|China|||||
|Pioneer”)||||||investment|
|Hohhot Changyu Pioneer|Hohhot City, Inner|||||Acquired by|
|||Hohhot City, Inner Mongolia|||||
|Wine Co., Ltd. (“Hohhot|Mongolia Autonomous||Sales||100%|establishment or|
|||Autonomous Region , China|||||
|Pioneer”)|Region , China|||||investment|
|Chengdu Changyu Pioneer||||||Acquired by|
||Chengdu City, Sichuan|Chengdu City, Sichuan|||||
|Wine Co., Ltd. (“Chengdu|||Sales||100%|establishment or|
||Province, China|Province, China|||||
|Pioneer”)||||||investment|
|Nanning Changyu Pioneer|Nanning City, Guangxi|||||Acquired by|
|||Nanning City, Guangxi Zhuang|||||
|Wine Co., Ltd. (“Nanning|Zhuang Autonomous||Sales||100%|establishment or|
|||Autonomous Region, China|||||
|Pioneer”)|Region, China|||||investment|
|Lanzhou Changyu Pioneer||||||Acquired by|
||Lanzhou City, Gansu|Lanzhou City, Gansu Province,|||||
|Wine Co., Ltd. (“Lanzhou|||Sales||100%|establishment or|
||Province, China|China|||||
|Pioneer”)||||||investment|
|Yantai Roullet-Fransac|||||||
|||||||Acquired by|
|Imported Wine Sales Co.,|Yantai City, Shandong|Yantai City, Shandong|Sales||100%|establishment or|
|Ltd. (“Yantai|Province, China|Province, China|||||
|Roullet-Fransac”)||||||investment|
|Hefei Changyu Pioneer|Hefei City, Anhui Province,|Hefei City, Anhui Province,||||Acquired by|
||||Sales||100%||
|Wine Co., Ltd. (“Hefei|China|China||||establishment or|

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
||||||||
|-|-|-|-|-|-|-|
|||||Proportion of|||
||||Business||||
|Name of subsidiary|Principal business location|Registration place||shareholding||Acquisition mode|
||||nature||||
|||||Direct|Indirect||
|Pioneer”)||||||investment|
|Urumchi Changyu Pioneer|Urumchi City, Xinjiang|||||Acquired by|
|||Urumchi City, Xinjiang Uygur|||||
|Wine Co., Ltd. (“Urumchi|Uygur Autonomous Region,||Sales||100%|establishment or|
|||Autonomous Region, China|||||
|Pioneer”)|China|||||investment|
|Guizhou Changyu Pioneer||||||Acquired by|
||Guiyang City, Guizhou|Guiyang City, Guizhou|||||
|Wine Co., Ltd. (“Guizhou|||Sales||100%|establishment or|
||Province, China|Province, China|||||
|Pioneer”)||||||investment|
|Guangzhou Changyu||||||Acquired by|
||Guangzhou City,|Guangzhou City, Guangdong|||||
|Pioneer Wine Co., Ltd.|||Sales||100%|establishment or|
||Guangdong Province, China|Province, China|||||
|(“Guangzhou Pioneer”)||||||investment|
|||||||Acquired by|
||Yantai City, Shandong|Yantai City, Shandong|||||
|Wine Sales Co., Ltd.|||Sales|100%||establishment or|
||Province, China|Province, China|||||
|||||||investment|

Explanation for difference between the proportion of shareholding and proportion of voting power in the subsidiaries:
(a) Xinjiang Tianzhu is a subsidiary of the Company obtained by merger and acquisition, whose60% of the shares are held by the Company. The Company exercises full control over the operation, investment and financing policies of Xinjiang Tianzhu by contract arrangement. This contract arrangement was expired on August 6, 2017. After the expiration, the minority shareholders of Xinjiang Tianzhu shall enjoy/bear all rights/duties of shareholders specified in the Articles of Association.
(b) On September 12, 2016, Atrio Group completed the internal reorganization, and Marques del Atrio absorbed and merged Atrio Group and its subsidiaries Enotec S.L., Hostaler I S.L., and Faustino Rivero Ulecia S.L. After the reorganization was completed, Marques del Atrio becomes the only existing company.
(c) Indomita Wine is a Sino-foreign joint venture jointly established by the Company and Inversiones Beth-Wines Limitada, in which the Company invested USD 40,110,000 (equivalent to RMB 274,248,114 Yuan), holding85% of the stock rights, and Inversiones Beth-Wines Limitada invested USD 7,080,000 (equivalent to RMB 48,396,726 Yuan), holding15% of the stock rights.
(d) Changyu Chateau is a Sino-foreign joint venture established by the Company and a foreign investor, whose70% of the shares are held by the Company. The Company exercises full control over the operation, investment and financing policies of Changyu Chateau by contract arrangement. The contract arrangement will expire on December 31, 2022.
(e) Langfang Castel is a Sino-foreign joint venture established by the Company and a foreign investor, whose49% of the shares are held by the Company and its subsidiaries. The Company exercises full control over the operation, investment and financing policies of Langfang Castel by contract arrangement. The contract arrangement will expire on December 31, 2022.
(f) Beijing Chateau is a limited liability company jointly established by the Company and
YantaiDe’an and Beijing Qinglang. In 2017, the Company made capital increase of RMB
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report 502,910,000 Yuan in Beijing Chateau, and YantaiDe’an and Beijing Qinglang jointly made capital increase of RMB 29,840,000 Yuan. On December 22, 2017, Beijing Chateau completed business registration alteration. After the capital increase, the Company holds90% of the stock rights. The Company exercises full control over the operation, investment and financing policies of Beijing Chateau by contract arrangement. The contract arrangement will expire on September 2, 2019.
(g) Icewine Valley is a Sino-foreign joint venture established by the Company and a foreign investor, whose51% of the shares are held by the Company. The Company exercises full control over the operation, investment and financing policies of Icewine Valley by contract arrangement. The contract arrangement will expire on December 31, 2021.
(h) TheR&D Company is a joint venture established by the Company and Agricultural Development Fund, whose65% of the shares were held by the Company on June 30, 2018. As stated in Note 7.30, Agricultural Development Fund invested RMB 305,000,000 Yuan in theR&D Company in 2016, accounting for37.9% of the registered capital. According to the investment agreement, it is agreed that Agricultural Development Fund will take back the investment fund in ten years and obtain fixed income according to year, which is1.2% of the remaining principal. Except for the above fixed income, the Agricultural Development Fund shall not enjoy other profits of theR&D Company or bear the losses of theR&D Company. Accordingly, the investment of the Agricultural Development Fund in theR&D Company is equity investment nominally, which is debt investment in deed. This Company shall include the investment of the Agricultural Development Fund in long-term accounts payable measured by amortized cost. The Company exercises full control over the operation, investment and financing policies of theR&D Company by contract arrangement. The contract arrangement will expire on May 22, 2026.
9.1.2 Important non-wholly-owned subsidiaries
Unit: Yuan
||||||
|-|-|-|-|-|
||||Dividend declared to be||
||Shareholding proportion|Profit/loss attributable||Balance of minority|
||||distributed to minority||
|Name of subsidiary|of minority|to minority shareholders||shareholder’s interest at|
||||shareholders in this||
||shareholders|in this period||the end of period|
||||period||
|Xinjiang Tianzhu|40%|-73,829||53,299,623|
|Marques del Atrio|25%|303,503|746,021|30,648,536|
|Changyu Chateau|30%|||12,365,016|
|Langfang Castel|51%|||22,702,522|
|Beijing Chateau|10%|||65,133,868|
|Icewine Valley|49%|||33,319,062|
|Indomita Wine|15%|-42,279||52,446,446|
|Kilikanoon Estate,|||||
||20%|-23,063||16,776,846|
|Australia|||||

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report Explanation for difference between the proportion of shareholding and proportion of voting power of the minority shareholders in the subsidiaries: See details in Note 9.1.1.
9.1.3 Main financial information of important non-wholly-owned subsidiaries
Unit: Yuan
||||||||
|-|-|-|-|-|-|-|
||Ending balance||||||
|Name of|||||||
|||Non-current|||Non-current||
|subsidiary|Current assets||Total assets|Current liabilities||Total liabilities|
|||assets|||liabilities||
|Xinjiang|||||||
||31,621,493|68,869,503|100,490,996|493,969|5,336,114|5,830,082|
|Tianzhu|||||||
|Changyu|||||||
||140,023,527|114,974,477|254,998,005|171,551,853||171,551,853|
|Chateau|||||||
|Langfang|||||||
||18,220,999|17,452,408|35,673,406|4,063,516||4,063,516|
|Castel|||||||
|Beijing|||||||
||215,371,778|475,159,760|690,531,538|50,320,391||50,320,391|
|Chateau|||||||
|Icewine|||||||
||59,047,298|25,091,478|84,138,776|28,890,336|100,000|28,990,336|
|Valley|||||||
|Marques del|||||||
||348,900,749|107,672,031|456,572,779|246,746,293|86,970,780|333,717,072|
|Atrio|||||||
|Indomita|||||||
||183,652,569|299,672,376|483,324,945|127,449,902|6,232,065|133,681,967|
|Wine|||||||
|Kilikanoon|||||||
|Estate,|85,037,994|63,434,206|148,472,200|57,335,399|7,252,572|64,587,971|
|Australia|||||||

Unit: Yuan
||||||||
|-|-|-|-|-|-|-|
||Beginning balance||||||
|Name of|||||||
|||Non-current|||Non-current||
|subsidiary|Current assets||Total assets|Current liabilities||Total liabilities|
|||assets|||liabilities||
|Xinjiang|||||||
||30,264,441|71,323,940|101,588,381|809,080|5,336,114|6,145,194|
|Tianzhu|||||||
|Changyu|||||||
||140,038,021|115,435,985|255,474,006|175,061,601||175,061,601|
|Chateau|||||||
|Langfang|||||||
||22,728,536|17,973,719|40,702,255|6,133,909||6,133,909|
|Castel|||||||
|Beijing|||||||
||214,079,274|481,668,050|695,747,324|73,963,043||73,963,043|
|Chateau|||||||
|Icewine|||||||
||38,657,358|25,484,359|64,141,717|10,871,695|100,000|10,971,695|
|Valley|||||||
|Marques del|||||||
||398,835,959|116,299,504|515,135,463|299,030,002|89,336,338|388,366,340|
|Atrio|||||||
|Indomita|||||||
||175,669,256|305,664,706|481,333,962|122,023,764|5,206,406|127,230,170|
|Wine|||||||

Unit: Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
||Amount incurred in this period||||Amount incurred in prior period||||
|Name ofsubsidiary|||Total||||Total|Operatingecash flow|
||Operating|||Operating|Operating||||
|||Net profit|comprehensive|||Net profit|comprehensiv||
||income|||cash flow|income||||
||||income||||income||
|Xinjiang|18,803|-184,572|-184,572|10,284,801|115,904,168|22,453,715|22,453,71|5 -7,275,404|

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
||||||||||
|-|-|-|-|-|-|-|-|-|
|Tianzhu|||||||||
|Changyu|||||||||
||43,226,910|2,861,474|2,861,474|2,419,427|20,668,538|-106,018|-106,018|12,978,276|
|Chateau|||||||||
|Langfang|||||||||
||5,038,281|-1,952,954|-1,952,954|-4,435,022|23,732,778|161,088|161,088|-137,422|
|Castel|||||||||
|Beijing|||||||||
||78,502,666|15,243,700|15,243,700|12,282,145|75,491,933|12,511,172|12,511,172|-37,040,335|
|Chateau|||||||||
|Icewine|||||||||
||27,305,133|905,396|905,396|2,018,740|16,724,881|-2,063,324|-2,063,324|-1,416,775|
|Valley|||||||||
|Marques|||||||||
||148,197,893|1,214,012|-929,332|-21,783,821|131,223,890|-233,187|3,996,659|-31,616,566|
|del Atrio|||||||||
|Indomita|||||||||
||93,719,341|-281,859|-4,460,814|-7,723,684|||||
|Wine|||||||||
|Kilikanoon|||||||||
|Estate,|25,904,401|-115,317|-3,779,883|-1,469,903|||||
|Australia|||||||||

10. Risks related to financial instruments
The main financial instruments of the Group include monetary capital, bills receivable, accounts receivable, interest receivable, other receivables, available-for-sale financial assets, short-term loans, accounts payable, other payables, interest payable, long-term accounts payable and long-term loans. Please refer to Note 7 of each financial instrument for the details. The risks related to these financial instruments and risk management policies adopted by the Group to reduce these risks are shown as follows. The management of the Group manages and monitors these risk exposures to ensure that the above-mentioned risks are controlled within a defined scope.
The Group adopts sensitivity analysis techniques to analyze the possible influence of possible reasonable changes of risk variables on the current profit and loss andshareholders’ equity. Since any risk variable merely changes independently and the final influence of relevance between variables on the change of certain risk variable will exert a great effect, the following content is carried out under the hypothesis that each variable changes independently.
The risk management objective of the Group is to achieve proper balance between risks and benefits, to minimize the negative influence of the risks on the business performance of the Group and to maximize theshareholders’ benefit. Based on this risk management objective, the basic risk management strategy of the Group is to determine and analyze various risks faced by the Group, to set up proper risk tolerance bottom line and to carry out risk management, and to supervise various risks timely and reliably to control the risks within a defined scope.
10.1 Risk management objective and policy
10.1.1 Market risk
① Foreign exchange risk
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report Foreign exchange risk refers to the risk that causes loss due to exchange rate fluctuation. The foreign exchange risk borne by the Group is mainly relevant to EUR and USD. Except that the overseas subsidiaries of the Group purchase and sell in EUR, Chilean peso and Australian dollar, which borrow in USD, and domestic subsidiaries deposit in EUR and USD, other main business activities of the Group are priced and settled in RMB. As at June 30, 2018, except that the assets and liabilities mentioned in the table below were the balance of deposits or loans shown in foreign currencies, other assets and liabilities of the entities of the Group were settled in their respective functional currencies. Unit: Yuan
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Monetary capital (EUR)|383,929|1,190,459|
|Monetary capital (USD)|40,818,904|34,843,968|
|Short-term loans (USD)|59,549,400|58,807,800|

 The foreign exchange risk caused by the assets and liabilities of such foreign currency balance may exert an influence on the business performance of the Group. The Group pays close attention to the influence of exchange rate fluctuation on the foreign exchange risk of the Group. The Group has not taken any measures to avoid the foreign exchange risk at present.
Sensitivity analysis of foreign exchange risk
With the other variables unchanged, the pre-tax influence of possible reasonable exchange rate fluctuation on current profit and loss andshareholders’ equity is shown as follows:
Domestic entities:
Unit: Yuan
|||||||||
|-|-|-|-|-|-|-|-|
||||||This period|||
||Item||Exchange rate fluctuation|||||
||||||Influence on profit in this period||Influence on shareholders’ equity|
|EUR||5% appreciation against RMB||49||49||
|EUR||5% depreciation against RMB||-49||-49||
|USD||5% appreciation against RMB||1,968,271||1,968,271||
|USD||5% depreciation against RMB||-1,968,271||-1,968,271||

 Overseas entities:
Unit: Yuan
|||||||||
|-|-|-|-|-|-|-|-|
||||||This period|||
||Item||Exchange rate fluctuation|||||
||||||Influence on profit in this period||Influence on shareholders’ equity|
|USD||5% appreciation against EUR||22,027||22,027||
|USD||5% depreciation against EUR||-22,027||-22,027||
|USD||10% appreciation against CLP||-5,830,116||-5,830,116||

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
|||||
|-|-|-|-|
|USD|10% depreciation against CLP|5,830,116|5,830,116|
|EUR|5% appreciation against CLP|19,205|19,205|
|EUR|5% depreciation against CLP|-19,205|-19,205|

 Note: As at June 30, 2018, the management of the Group predicted that the EUR and USD exchange rate against RMB, EUR exchange rate against USD, and EUR exchange rate against CLP changed by5%; and USD exchange rate against CLP changed by10%.
② Interest rate risk– risk of change in cash flow
The risk of change in cash flow of financial instruments caused by interest rate change of the Group is mainly relevant to the monetary capital and bank loan at floating interest rate. The policy of the Group is to maintain the floating interest rate of these loans to eliminate the risk of change in fair value of the interest rate.
Sensitivity analysis of interest rate risk
Sensitivity analysis of interest rate risk is based on the hypothesis that the change in market interest rate influences the interest income or expense of financial instruments at variable rate.
The management of the Group thinks that the interest rate risk of deposit in bank borne by the Group is not significant, and therefore the sensitivity analysis of interest rate of deposit in bank is not disclosed here.
On the basis of the above-mentioned hypothesis, with the other variables unchanged, the pre-tax influence of possible reasonable exchange rate fluctuation on current profit and loss andshareholders’ equity is as follows:
Unit: Yuan
|||||||||
|-|-|-|-|-|-|-|-|
||||||This period|||
||Item||Interest rate change|||||
||||||Influence on profit of this period||Influence on shareholders’ equity|
|Bank loan||Increase by 50 BP||-1,751,529||-1,751,529||
|Bank loan||Decrease by 50 BP||1,751,529||1,751,529||

 Note: As at June 30, 2018, the management of the Group predicted that the bank floating rate changed by 50 basis points
10.1.2 Credit risk
As at June 30, 2018, the largest credit risk exposure possibly causing the financial loss of the
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report Group was mainly caused by the loss generated by the financial assets of the Group due to failure of another party of the contract in fulfilling obligations.
To lower the credit risk, the Group only trades with the recognized and reputable third party. In accordance with the policy of the Group, credit check shall be carried out for all customers who transact by means of credit. In addition, the Group conducts continuous monitoring on the balance of accounts receivable to ensure that the Group will not face major risk of bad debts. For transactions not settled with recording currency of relevant business units, unless the credit control department of the Group specially approves, the Group will not provide credit trade terms. In addition, the Group audits the collection of each single significant account receivable on each date of balance sheet to ensure that sufficient bad-debt provision is accrued for accounts unable to be collected. Therefore, the management of the Group thinks the credit risk borne by the Group is greatly reduced.
Since the Group only trades with the recognized and reputable third party, no collateral is required. The credit risk is managed centrally according to the customer/counter-party, geographic area and industry. As at June 30, 2018,16.4% of accounts receivable of the Group came from top five borrowers in accounts receivable of the Group (December 31, 2017:20.7%). The Group holds no collateral or other credit enhancement for the balance of accounts receivable.
10.1.3 Liquidity risk
When managing the liquidity risk, the Group reserves and monitors the cash and cash equivalents the management considers sufficient to satisfy the operation need of the Group and reduce the influence of fluctuation in cash flow. The management of the Group monitors the use of bank loans and ensures to abide by the loan agreement.
10.1.4 Disclosure of fair value– fair value of financial assets and liabilities not measured by fair value
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||||||Fair value|||||||
||Item||Book value||First-level||Second-level fair||Third-level|||
||||||||||||Total|
||||||fair value||value||fair value|||
|Long-term accounts payablemeasured by amortized cost||269,000,000||-||2 29,053,269||-||229,053,269||

The management of the Group thinks that, as at June 30, 2018, except for the long-term
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report accounts payable stated above, the book value of other financial assets and liabilities measured by amortized cost was close to the fair value thereof.
11. Related parties and related transactions
11.1 Particulars of the parent company of the Company
|||||||
|-|-|-|-|-|-|
|||||Proportion of|Proportion of|
|Name of parent||||shareholding of the|voting powers of|
||Registration place|Business nature|Registered capital|||
|company||||parent company in|the parent company|
|||||the Company|in the Company|
|Changyu Group||Manufacturing||||
||Yantai City||50,000,000|50.40%|50.40%|
|Company||industry||||

From January to June 2018, there was no fluctuation in the registered capital of the parent company and its share in equity interest and voting right.
11.2 Particulars of the subsidiaries of the Company
See particulars of the subsidiaries of the Company in Note 9.
11.3 Particulars of other related parties
|||
|-|-|
|Name of other related parties|Relationship between other related parties and the Company|
|Yantai Changyu Wine Culture Museum Co., Ltd. (“Wine||
||A company controlled by the same parent company|
|Culture Museum”)||
|Yantai Changyu Window of International Wine City Co. Ltd.||
||A company controlled by the same parent company|
|(“Window of Wine City”)||
|Yantai God Horse Packing Co., Ltd. (“God Horse Packing”)|A company controlled by the same parent company|
|Yantai Zhongya Medical Health Wine Co., Ltd. (“Zhongya||
||A company controlled by the same parent company|
|Medical”)||
|Yantai Changyu Cultural Tourism Development Co., Ltd.||
||A company controlled by the same parent company|
|(“Changyu Cultural Tourism”)||

11.4 Related transactions
11.4.1 Related transactions of purchasing and selling goods and providing and receiving services
List of purchasing goods/receiving services
Unit: Yuan
|||||
|-|-|-|-|
|||Amount incurred in this||
|Related parties|Related transactions||Amount incurred in prior period|
|||period||

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
|||||
|-|-|-|-|
|||Amount incurred in this||
|Related parties|Related transactions||Amount incurred in prior period|
|||period||
|God Horse Packing|Purchasing goods|95,990,354|64,896,342|
|Zhongya Medical|Purchasing goods|6,037,893|10,700,788|
|Wine Culture Museum|Purchasing goods|9,475,159|6,319,776|
|Window of Wine City|Purchasing goods|2,857,130|231,879|

 List of selling goods/providing services
Unit: Yuan
|||||
|-|-|-|-|
|||Amount incurred in this||
|Related parties|Related transactions||Amount incurred in prior period|
|||period||
|Wine Culture Museum|Selling goods|13,889,017|4,252,962|
|Window of Wine City|Selling goods|8,773,612|5,642,914|
|Zhongya Medical|Selling goods|2,203,629|1,956,658|
|God Horse Packing|Selling goods|15,742|829,977|
|Changyu Cultural Tourism|Selling goods|220,759||

The price of transactions between the Group and the related parties are based on the
negotiated price.
11.4.2 Related trusteeship/contracting and mandatory administration/outsourcing
Nil
11.4.3 Leasing with related parties
The Company as a lessor:
Unit: Yuan
|||||
|-|-|-|-|
|||Rental income recognized in|Rental income recognized in|
|Name of the lessee|Type of leased assets|||
|||this period|prior period|
||Office building and|||
|God Horse Packing||813,440||
||plant|||
|Window of Wine City|Office building|535,000||
|Zhongya Medical|Office building|285,000||

Pursuant to a lease contract dated July 1, 2017 signed between the Company and God Horse Packing, starting from July 1, 2017, the Company rents properties to God Horse Packing for operation purposes with annual rental income of RMB 1,626,880 Yuan, and the expired date of the contract is June 30, 2022. From January to June 2018, the rental income recognized by the Company amounted to RMB 813,440 Yuan.
Pursuant to a lease contract dated January 1, 2018 signed between the Company and Window
of Wine City, starting from January 1, 2018, the Company rents houses to Window of Wine
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report City for operation purposes with annual rental income of RMB 1,070,000 Yuan, and the expired date of the contract is December 31, 2018. From January to June 2018, the rental income recognized by the Company amounted to RMB 535,000 Yuan.
Pursuant to a lease contract dated January 1, 2018 signed between the Company and Zhongya Medical, starting from January 1, 2018, the Company rents houses to Zhongya Medical for operation purposes with annual rental income of RMB 570,000 Yuan, and the expired date of the contract is December 31, 2018. From January to June 2018, the rental income recognized by the Company amounted to RMB 285,000 Yuan.
The Company as a lessee:
Unit: Yuan
|||||
|-|-|-|-|
||||Rent recognized in prior|
|Name of the lessor|Type of leased assets|Rent recognized in this period||
||||period|
|Changyu Group Company|Office building and plant|3,775,362|3,775,362|

 Pursuant to a lease contract dated January 1, 2016 signed between the Company and Changyu Group Company, starting from January 1, 2016, the Company rents properties from Changyu Group Company for operation purposes at a basic annual rent of RMB 1,692,724 Yuan, and the expired date of the contract is December 31, 2020. From January to June 2018, the rental expenses recognized by the Company to Changyu Group Company amounted to RMB 846,362 Yuan.
Pursuant to a lease contract dated January 1, 2017 signed between the Company and Changyu Group Company, starting from January 1, 2017, the Company rents properties from Changyu Group Company for operation purposes at a basic annual rent of RMB 1,464,500 Yuan, and the expired date of the contract is December 31, 2021. From January to June 2018, the rental expenses recognized by the Company to Changyu Group Company amounted to RMB 732,250 Yuan.
Pursuant to a lease contract dated January 1, 2017 signed between the Company and Changyu Group Company, starting from January 1, 2017, the Company rents properties from Changyu Group Company for operation purposes at a basic annual rent of RMB 4,393,500 Yuan, and the expired date of the contract is December 31, 2021. From January to June 2017, the rental expenses recognized by the Company to Changyu Group Company amounted to RMB 2,196,750 Yuan.
11.4.4 Guarantee with related parties
Nil
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report 11.4.5 Inter-bank borrowing and lending of related parties
Nil
11.4.6 Asset transfer and debt recombination of related parties
Nil
11.4.7 Other related transactions
Unit: Yuan
|||||
|-|-|-|-|
|Item|Note|Amount incurred in this period|Amount incurred in prior period|
|Trademark use fee|(a)|43,363,867|44,428,033|
|Patent fee|(b)|25,000|25,000|

 The price of transactions between the Group and the related parties is based on the negotiated price.
(a) Trademark royalty contract
Pursuant to a trademark royalty contract dated May 18, 1997 signed between the Company and Changyu Group Company, starting from September 18, 1997, the Company may use certain trademark of Changyu Group Company, which has been registered with the PRC Trademark Office. An annual royalty at2% of theCompany’s annual specific sales is payable to Changyu Group Company by the Company. The contract is effective until the expiry of the registration of the trademark. From January to June 2018, the trademark royalty paid to related parties by the Company accounted for100% of the trademark royalty in the Group. (b) Patent implementation license contract
Pursuant to a patent implementation license contract dated May 18, 1997 signed between the Company and Changyu Group Company, starting from September 18, 1997, the Company may use the patented technologies of Changyu Group Company. The annual patent royalty payable by the Company to Changyu Group Company was RMB 50,000 Yuan. The contract was expired on December 20, 2005. On August 20, 2016, the Company renewed the patent implementation license contract for 10 year, which should pay the patent royalty of RMB 50,000 Yuan to Changyu Group Company annually as before. From January to June 2018, the patent royalty payable by the Company to Changyu Group Company amounted to RMB 25,000 Yuan.
From January to June 2018, the patent fees paid to related parties by the Group accounted for
100% of the patent fees in the Group.
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report 11.5 Accounts receivable and payable of the related parties
11.5.1 Accounts receivable
Unit: Yuan
|||||||
|-|-|-|-|-|-|
|||Ending balance||Beginning balance||
|Item|Related parties|Book|Bad debtprovision||Bad debt|
|||||Book balance||
|||balance|||provision|
|Accounts receivable|Zhongya Medical|8,912,812||8,134,150||
|Accounts receivable|God Horse Packing|1,668,058||1,342,348||
|Accounts receivable|Window of Wine City|2,333,822||3,196,095||
|Accounts receivable|Wine Culture Museum|57,360||34,280||
|Accounts receivable|Changyu Cultural Tourism|256,080||||

11.5.2 Accounts payable
Unit: Yuan
|||||
|-|-|-|-|
|Item|Related parties|Ending book balance|Beginning book balance|
|Accounts payable|God Horse Packing|36,775,249|52,403,056|
|Accounts payable|Zhongya Medical|5,305,577|2,051,991|
|Accounts payable|Wine Culture Museum|2,945,967|2,040,860|
|Accounts payable|Window of Wine City|889,442|1,485,766|
|Other accounts payable|Changyu Group Company|49,766,061|77,208,929|

 12. Commitment and contingency
12.1 Significant commitment
Unit: Yuan
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Long-term asset commitments|810,228,900|1,246,506,000|

12.2 Contingency
By the balance sheet date, the Groupdidn’t have any undisclosed contingency to be disclosed. 13. Matters after balance sheet
13.1 Important non-adjusting events
Nil
13.2 Profit distribution
Unit: Yuan
|||
|-|-|
|Profits or dividends to be distributed|342,732,000|
|Allocated profits or dividends approved to declare upon||
||342,732,000|
|discussion||

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report According to the decision of theShareholders’ Meeting dated May 24, 2018, based on the issued capital stock of 685,464,000 shares in 2017, the Company allocated RMB 5 Yuan in cash (including tax) for every 10 shares to all shareholders with the total cash dividends of RMB 342,732,000 Yuan. Such cash dividends were distributed on July 9, 2018 and July 11, 2018 respectively.
14. Other important matters
Nil
15. Notes on major items in financial statements of the parent company
15.1 Accounts receivable
15.1.1 Accounts receivable disclosed by type
Unit: Yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Ending balance|||||Beginning balance|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|Type|||||||||||
|||||Accrued|Book value||||Accrued|Book value|
||Amount|Proportion|Amount|||Amount|Proportion|Amount|||
|||||proportion|||||proportion||
|Accounts receivable of|||||||||||
|significant single amount|||||||||||
||12,408,787|100%|||12,408,787|7,805,333|100%|||7,805,333|
|and single accrued bad|||||||||||
|debt provision|||||||||||
|Accounts receivable|||||||||||
|accrued bad debt|||||||||||
|provision by credit risk|||||||||||
|features|||||||||||
|Accounts receivable of|||||||||||
|insignificant single|||||||||||
|amount and single|||||||||||
|accrued bad debt|||||||||||
|provision|||||||||||
|Total|||||12,408,787|||||7,805,333|
||12,408,787|100%||||7,805,333|100%||||

15.1.2 Bad debt provision accrued, received or transferred back in this period
The bad debt provision accrued in this period was RMB 0 Yuan; and that received or transferred back in this period was RMB 0 Yuan.
15.1.3 Accounts receivable actually canceled after verification in this period
Nil
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report 15.1.4 Accounts receivable collected by the borrower of top 5 units ranked by the ending balance
Unit: Yuan
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||||||||||Percentage in|
||||Relationship with|||||||
||Unit||||Amount||Age||total accounts|
||||the Company|||||||
||||||||||receivable (%)|
|Yantai Zhongya Medical Health WineCo., Ltd.||Affiliated party||7,847,857||Within 1 year||63.2%||
|Shandong Yantai Winemaking Co., Ltd.Liquan Wine Branch||Third party||2,934,050||Within 1 year||23.6%||
|Yantai God Horse Packing Co., Ltd.||Affiliated party||1,626,880||Within 1 year||13.2%||
|Total||||12,408,787||||100.0%||

 15.1.5 Accounts receivable derecognized due to transfer of financial assets
Nil
15.1.6 Accounts receivable transferred and included in assets and liabilities
Nil
15.2 Other accounts receivable
15.2.1 Other accounts receivable disclosed by type
Unit: Yuan
|||||||||||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||Ending balance|||||||||||Beginning balance|||||||||||
|||Book balance||||B|ad debt provisio||||n|Book value|Book balance||||B|ad debt provisio||||n|Book value|
|T|ype|||||||||||||||||||||||
||||||||||p|Accrued|n|||||||||p|Accrued|n||
|||Amount|P|roportio|n|A|mou|nt|||||Amount|P|roportio|n|A|mou|nt|||||
|||||||||||roportio|||||||||||roportio|||
|Orsisiaad|ther accounts|||||||||||||||||||||||
||eceivable of|||||||||||||||||||||||
||gnificant|||||||||||||||||||||||
||ngle amount|509,269,034||100%||||||||509,269,034|592,274,075||100%||||||||592,274,075|
||nd single|||||||||||||||||||||||
||ccrued bad|||||||||||||||||||||||
||ebt provision|||||||||||||||||||||||
|Oradbf|ther accounts|||||||||||||||||||||||
||eceivable|||||||||||||||||||||||
||ccrued bad|||||||||||||||||||||||
||ebt provision|||||||||||||||||||||||
||y credit risk|||||||||||||||||||||||
||eatures|||||||||||||||||||||||

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
|||||||||
|-|-|-|-|-|-|-|-|
|Orisaad|ther accounts|||||||
||eceivable of|||||||
||nsignificant|||||||
||ingle amount|||||||
||nd single|||||||
||ccrued bad|||||||
||ebt provision|||||||
|T|otal|509,269,034|100%|509,269,034|592,274,075|100%|592,274,075|

15.2.2 Bad debt provision accrued, received or transferred back in this period
The bad debt provision accrued in this period was RMB 0 Yuan; and that received or transferred back in this period was RMB 0 Yuan.
15.2.3 Other accounts receivable classified by nature
Unit: Yuan
||||
|-|-|-|
|Nature of fund|Ending book balance|Beginning book balance|
|Accounts receivable of subsidiaries|507,332,524|589,897,407|
|Deposit and guaranty money receivable||2,500|
|Other|1,936,510|2,374,168|
|Total|509,269,034|592,274,075|

 15.2.4 Other accounts receivable collected by the borrower of top 5 units ranked by the ending balance
Unit: Yuan
|||||||
|-|-|-|-|-|-|
|||||Percentage in the||
||||||Ending balance|
||Nature of|||total ending||
|Unit||Ending balance|Age||of bad debt|
||fund|||balance of other||
||||||provision|
|||||accounts receivable||
||Internal|||||
|Sales Company|incomings|216,011,410|Within 1 year|42.4%||
||and outgoings|||||
||Internal|||||
|R&D Company|incomings|205,461,252|Within 1 year|40.3%||
||and outgoings|||||
||Internal|||||
|Chateau Tinlot|incomings|20,500,000|Within 1 year|4.0%||
||and outgoings|||||
||Internal|||||
|Penglai Sales|incomings|13,766,522|Within 1 year|2.7%||
||and outgoings|||||
||Internal|||||
|Laizhou Wine|incomings|13,244,757|Within 1 year|2.6%||
||and outgoings|||||
|Total|--|468,983,942|--|92.0%||

15.2.5 Accounts receivable related to governmental subsidy
Nil
Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report 15.2.6 Other accounts receivable derecognized due to transfer of financial assets
Nil
15.2.7 Other accounts receivable transferred and included in assets and liabilities
Nil
15.3 Long-term equity investment
Unit: Yuan
||||||||
|-|-|-|-|-|-|-|
||Ending balance|||Beginning balance|||
|Item||Impairment|||Impairment|Book value|
||Book balance||Book value|Book balance|||
|||reserve|||reserve||
|Investment in|||||||
||4,617,128,388||4,617,128,388|4,511,202,204||4,511,202,204|
|subsidiaries|||||||
|Investment in associated|||||||
|enterprises and joint|||||||
|ventures|||||||
|Total|4,617,128,388||4,617,128,388|4,511,202,204||4,511,202,204|

 15.3.1 Investment in subsidiaries
||||||||
|-|-|-|-|-|-|-|
||||||Provision for|Ending balance|
||Beginning|Increase in this|Decrease in this||||
|Invested unit||||Ending balance|impairment in|of impairment|
||balance|period|period||||
||||||this period|provision|
|Xinjiang Tianzhu (a)|60,000,000|||60,000,000|||
|Kylin Packaging|23,176,063|||23,176,063|||
|Changyu Chateau|||||||
||28,968,100|||28,968,100|||
|(a)|||||||
|Pioneer|3,500,000|||3,500,000|||
|International (b)|||||||
|Ningxia Growing|36,573,247|||36,573,247|||
|National Wine|2,000,000|||2,000,000|||
|Icewine Valley (a)|30,440,500|||30,440,500|||
|Beijing Chateau (a)|579,910,000|||579,910,000|||
|Sales Company|7,200,000|||7,200,000|||
|Langfang Sales (b)|100,000|||100,000|||
|Langfang Castel (a)|19,835,730|||19,835,730|||
|Wine Sales|4,500,000|||4,500,000|||
|Shanghai Marketing|300,000|||300,000|||

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
||||||||
|-|-|-|-|-|-|-|
||||||Provision for|Ending balance|
||Beginning|Increase in this|Decrease in this||||
|Invested unit||||Ending balance|impairment in|of impairment|
||balance|period|period||||
||||||this period|provision|
|(b)|||||||
|Beijing Marketing|850,000|||850,000|||
|Jingyang Sales (b)|100,000|||100,000|||
|Jingyang Wine (b)|900,000|||900,000|||
|Ningxia Wine|222,309,388|||222,309,388|||
|Ningxia Chateau|443,463,500|||443,463,500|||
|Chateau Tinlot (b)|212,039,586|||212,039,586|||
|Shihezi Chateau|809,019,770|||809,019,770|||
|Chang’an Chateau|803,892,258|||803,892,258|||
|R&D Company (a)|500,000,000|||500,000,000|||
|Huanren Wine|21,700,000|||21,700,000|||
|Wine Sales|||||||
|Company|||||||
|Francs Champs|236,025,404|||236,025,404|||
|Marques del Atrio|190,150,544|||190,150,544|||
|Indomita Wine|274,248,114|||274,248,114|||
|Kilikanoon Estate,||105,926,184||105,926,184|||
|Australia|||||||
|Total|4,511,202,204|105,926,184||4,617,128,388|||

(a) The Company acquired100% voting right and usufruct of such non-wholly-owned subsidiaries by means of contract arrangement. Please refer to Note 9.1.
(b) The Company acquired100% voting right of such subsidiaries by means of indirect holding through its wholly-owned subsidiaries.
From January to June 2018, there were no restrictions for the invested entities of the Company to transfer assets to the Company.
15.4 Operating income and operating cost
Unit: Yuan
||||||
|-|-|-|-|-|
||Amount incurred in this period||Amount incurred in prior period||
|Item|||||
||Income|Cost|Income|Cost|
|Main business|384,520,180|330,810,994|445,339,324|387,600,176|
|Other business|24,325,031|21,835,995|386,481,179|350,350,202|

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
||||||
|-|-|-|-|-|
|Total|408,845,211|352,646,989|831,820,503|737,950,378|

 15.5 Investment income
Unit: Yuan
||||
|-|-|-|
||Amount incurred in this||
|Item||Amount incurred in prior period|
||period||
|Income from long-term equity investment by cost method|312,409,576|66,127,980|
|Income from long-term equity investment by equity method|||
|Investment income from disposal of long-term equity|||
|investment|||
|Investment income of the financial assets measured at their|||
|fair values and the variation of which is recorded into the|||
|current profit and loss during the holding period|||
|Investment income gained from disposal of the financial|||
|assets measured at their fair values and the variation of which|||
|is recorded into the current profit and loss|||
|Investment income of held-to-maturity investment during the|||
|holding period|||
|Investment income of financial assets held for sale during the|||
|holding period|||
|Investment income gained from disposal of financial assets|||
|held for sale|||
|Gains generated from the remaining equity remeasured as per|||
|fair value after the loss of control|||
|Total|312,409,576|66,127,980|

 16. Supplementary materials
16.1 List of non-current profits/losses in this period
Unit: Yuan
||||
|-|-|-|
|Item|Amount|Remark|
|Profits/losses on disposal of non-current assets|93,958||
|Tax return, deduction and exemption approved beyond the|||
|authority or without formal approval document|||
|Governmental subsidy included in the current profits/losses|||
||37,982,878||
|(excluding those closely related to the enterprise business and|||

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
||||
|-|-|-|
|Item|Amount|Remark|
|enjoyed in accordance with the unified standard quota or|||
|ration of the state)|||
|Payment for use of funds by non-financial enterprises included|||
|in the current profits/losses|||
|Income obtained when the investment cost obtained by the|||
|enterprise from subsidiaries, joint-run business and joint|||
|venture is less than the fair value of the net identifiable assets|||
|obtained from the invested units when the investment is made|||
|Profits/losses on exchange of non-monetary assets|||
|Profits/losses on entrusting other people to make investment or|||
|manage assets|||
|Asset impairment provision accrued due to force majeure such|||
|as natural disaster|||
|Profits/losses on debt restructuring|||
|Enterprise reorganization expenses such as staffing|||
|expenditure and integration expenses, etc.|||
|Profits/losses on those beyond the fair value generated from|||
|transactions with unfair transaction price|||
|Current net profits/losses on subsidiaries acquired from a|||
|business combination under common control from the|||
|beginning to the consolidation date|||
|Profits/losses on contingencies irrelated to the normal business|||
|of the Company|||
|Profits/losses on changes of fair value of financial assets and|||
|liabilities held for trading, and investment income from|||
|disposal of financial assets and liabilities held for trading and|||
|financial assets held for sale, excluding effective hedging|||
|operations relevant to the normal business of the Company|||
|Returns of provision for impairment of accounts receivable|||
|with single impairment test|||
|Profits/losses on external entrusted loans|||
|Profits/losses on fair value changes of investment real estate|||
|with fair value mode for follow-up measurement|||

Yantai Changyu Pioneer Wine Co., Ltd. 2018 Semi-annual Report
||||
|-|-|-|
|Item|Amount|Remark|
|Influence of the one-time adjustment of the current|||
|profits/losses in accordance with tax and accounting laws and|||
|regulations on the current profits/losses|||
|Trustee fee income from entrusted operation|||
|Other non-operating income and expenditure besides the|||
||614,030||
|above items|||
|Other profits/losses conforming to the definition of|||
|non-current profits/losses|||
|Minus: Influenced amount of income tax|9,447,208||
|Influenced amount of minority shareholders’ equity|84,972||
|Total|29,158,686|--|

16.2 Return on net assets and earnings per share
|||||
|-|-|-|-|
|||Earnings per share||
||Weighted average return onnet assets|||
|Profit incurred in this period||Basic EPS|Diluted EPS|
|||(Yuan/Share)|(Yuan/Share)|
|Net profit attributable to common||0.93|0.93|
||6.89%|||
|shareholders of the Company||||
|Net profit attributable to common||||
|shareholders of the Company deducting|6.58%|0.88|0.88|
|non-incidental profits/losses||||

16.3 Accounting data difference under domestic and foreign accounting standard
16.3.1 Net profits& net assets difference disclosed in the financial report according to the international accounting standard and Chinese accounting standard
Unit: Yuan
||||||
|-|-|-|-|-|
||Net profits||Net assets||
||Amount incurred in|Amount incurred in prior|||
||||Ending balance|Beginning balance|
||this period|period|||
|In accordance with the|635,837,405|670,069,054|9,532,948,884|8,906,342,299|
|Chinese accounting standard|||||
|Item & amount adjusted in accordance with the international accounting standard:|||||
|In accordance with the|||||
|international accounting|635,837,405|670,069,054|9,532,948,884|8,906,342,299|
|standard|||||