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    泸州老窖:2020年半年度报告(英文版)

    日期:2020-09-15 16:33:50
    股票名称:泸州老窖 股票代码:000568
    研报栏目:定期财报  (PDF) 2776K
    报告内容
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    泸州老窖股份有限公司2020年半年度报告全文2020InterimReportofLuzhouLaojiaoCo.,Ltd.1LuzhouLaojiaoCo.,Ltd.2020InterimReportAugust20202020InterimReportofLuzhouLaojiaoCo.,Ltd.2SectionIImportantStatements,ContentsandDefinitionsTheBoardofDirectors,BoardofSupervisors,aswellasdirectors,supervisorsandseniormanagementotherthanthefollowingdirectors,supervisorsandseniormanagementthathaveexpresseddissentagainstthisreportguaranteethattheinformationpresentedinthisreportisfreeofanyfalserecords,misleadingstatementsormaterialomissions,andshallindividuallyandtogetherbelegallyliablefortruthfulness,accuracyandcompletenessofitscontents.LiuMiao,responsiblepersonfortheCompany,XieHong,responsiblepersonforaccountingworkandYanLi,responsiblepersonfortheCompany’sfinancialaffairs(AccountingSupervisor)havewarrantedthatthefinancialstatementsinthisreportaretrueandcomplete.Allthedirectorsattendedtheboardmeetingtodeliberatethisreportbythemselves.Affectedbyrisks,uncertaintiesandassumptions,theforward-lookingstatementsconcerningbusinessobjectivesandfutureplansmadeinthisreportbasedonthesubjectiveassumptionsandjudgmentsofthefuturepoliciesandeconomicconditionsmaybesignificantlydifferentfromtheactualresults.SuchstatementsshallnotbeconsideredasvirtualpromisesoftheCompanytoinvestors,andtheinvestorsandrelevantpersonsshallmaintainadequateriskawarenessandshallunderstandthedifferencesbetweenplans,forecastsandcommitments.TheCompanyhasnointerimdividendplan,eitherintheformofcashorstock.ThisReporthasbeenpreparedinbothChineseandEnglish.Shouldtherebeanydiscrepanciesormisunderstandingsbetweenthetwoversions,theChineseversionshallprevail.2020InterimReportofLuzhouLaojiaoCo.,Ltd.3Contents2020InterimReport...........................................................................................................1SectionIImportantStatements,ContentsandDefinitions............................................2SectionIICompanyProfileandKeyFinancialResults..................................................5SectionIIIBusinessProfile...............................................................................................9SectionIVPerformanceDiscussionandAnalysis........................................................12SectionVSignificantEvents...........................................................................................21SectionVIChangesinSharesandInformationaboutShareholders..........................33SectionVIIPreferenceShares........................................................................................40SectionVIIIInformationaboutConvertibleCorporateBond.......................................41SectionIXProfilesofDirectors,SupervisorsandSeniorManagement.....................42SectionXInformationaboutCorporateBond...............................................................43SectionXIFinancialReport............................................................................................49SectionXIIDocumentsAvailableforReference..........................................................1852020InterimReportofLuzhouLaojiaoCo.,Ltd.4DefinitionsTermReferenceDefinitionCompany,theCompany,LuzhouLaojiaoRefertoLuzhouLaojiaoCo.,Ltd.LaojiaoGroupRefertoLuzhouLaojiaoGroupCo.,Ltd.XingluGroupRefertoLuzhouXingLuInvestmentGroupCo.,Ltd.SASACofLuzhouRefertoState-ownedAssetsSupervisionandAdministrationCommissionofLuzhouHuaxiSecuritiesRefertoHuaxiSecuritiesCo.,Ltd.CICCRefertoChinaInternationalCapitalCorporationLimitedSalesCompanyRefertoSalesCompanyofLuzhouLaojiaoCo.,Ltd.BrewingCompanyRefertoLuzhouLaojiaoBrewingCo.,Ltd.LuzhouBankRefertoLuzhouBankCo.,Ltd.2020InterimReportofLuzhouLaojiaoCo.,Ltd.5SectionIICompanyProfileandKeyFinancialResults1.CorporateinformationStockabbreviationLuzhouLaojiaoStockcode000568StockexchangewherethesharesoftheCompanyarelistedShenzhenStockExchangeNameoftheCompanyinChinese泸州老窖股份有限公司Abbr.oftheCompanynameinChinese(ifany)泸州老窖NameoftheCompanyinEnglish(ifany)LuzhouLaojiaoCo.,Ltd.Abbr.oftheCompanynameinEnglish(ifany)LZLJLegalrepresentativeLiuMiao2.ContactusSecretaryoftheboardRepresentativeforsecuritiesaffairsNameWangHongboWangChuanAddressLuzhouLaojiaoMarketingNetworkCommandCenter,NanguangRoad,LuzhouCity,SichuanProvince,ChinaTel.(0830)2398826(0830)2398826Fax(0830)2398864(0830)2398864E-maildsb@lzlj.comdsb@lzlj.com2020InterimReportofLuzhouLaojiaoCo.,Ltd.63.OtherInformation3.1.ContactInformationoftheCompanyWhetheranychangeoccurredtotheregisteredaddress,officeaddressandtheirzipcodes,websiteaddressandemailaddressoftheCompanyinthereportingperiod.Applicable√N/ANochangeoccurredtothesaidinformationinthereportingperiod,whichcanbefoundinthe2019AnnualReport.3.2.InformationdisclosureandplacewheretheinterimreportiskeptWhetheranychangeoccurredtotheinformationdisclosureandplacewheretheinterimreportiskeptApplicable√N/ANochangeoccurredtothenewspapersdesignatedbytheCompanyforinformationdisclosure,thewebsitedesignatedbytheCSRCfordisclosingtheinterimreportandtheplacewheretheinterimiskeptinthereportingperiod.Thesaidinformationcanbefoundinthe2019AnnualReport.4.KeyaccountingdataandfinancialindicatorsWhethertheCompanyperformedaretroactiveadjustmenttoorrestatementofaccountingdata.Yes√NoH12020H12019ChangeOperatingrevenues(CNY)7,634,482,901.878,013,035,019.72-4.72%NetprofitsattributabletoshareholdersoftheCompany(CNY)3,220,452,190.272,749,781,041.4217.12%NetprofitsattributabletoshareholdersoftheCompanybeforenon-recurringgainsandlosses(CNY)3,233,951,849.052,727,782,527.5618.56%Netcashflowsfromoperatingactivities(CNY)728,815,422.241,706,750,590.34-57.30%Basicearningspershare(CNY/share)2.201.8817.02%Dilutedearningspershare(CNY/share)2.201.8817.02%WeightedaverageROE15.32%14.98%0.34%30June202031December2019ChangeTotalassets(CNY)31,758,214,542.8028,919,969,078.329.81%2020InterimReportofLuzhouLaojiaoCo.,Ltd.7NetassetsattributabletoshareholdersoftheCompany(CNY)20,300,194,077.2319,406,845,725.614.60%5.Differencesinaccountingdataunderdomesticandoverseasaccountingstandards5.1.DifferencesinthenetprofitsandnetassetsdisclosedinthefinancialreportspreparedundertheinternationalandChinaaccountingstandardsApplicable√N/ANosuchdifferencesforthereportingperiod.5.2.DifferencesinthenetprofitsandnetassetsdisclosedinthefinancialreportspreparedundertheoverseasandChinaaccountingstandardsApplicable√N/ANosuchdifferencesforthereportingperiod.6.Non-recurringprofitsandlosses√ApplicableN/AUnit:CNYItemAmountNoteProfitorlossfromdisposalofnon-currentassets(includingthewrite-offportionoftheimpairmentprovision)104,663.83See"SectionXINote5.40"fordetails.Governmentgrantsaccountedfor,intheprofitorlossforthecurrentperiod(exceptforthegovernmentgrantscloselyrelatedtothebusinessoftheCompanyandgivenatafixedamountorquantityinaccordancewiththenationaluniformstandards)10,441,675.27See"SectionXINote5.36"fordetails.Othernon-operatingincomeandexpenditureexceptabove-mentioneditems-28,272,944.37See"SectionXINote5.41,5.42"fordetails.Less:Corporateincometax-4,475,851.24Minorityinterests(aftertax)248,904.75Total-13,499,658.78--ExplainthereasonsiftheCompanyclassifiesanitemasanon-recurringprofit/lossaccordingtothedefinitionintheExplanatoryAnnouncementNo.1onInformationDisclosureforCompaniesOfferingTheirSecuritiestothePublic-Non-RecurringProfitsandLosses,orclassifiesanynon-recurringprofit/lossitemmentionedinthesaidexplanatoryannouncementasarecurringprofit/lossitem.2020InterimReportofLuzhouLaojiaoCo.,Ltd.8Applicable√N/ANosuchcasesforthereportingperiod.2020InterimReportofLuzhouLaojiaoCo.,Ltd.9SectionIIIBusinessProfile1.BusinessscopeinthereportingperiodTheCompanystandsonliquorsubdivisionindustrywhichbelongstoliquor,beverageandrefinedteamanufacturingindustrywiththespecializedliquorproductdesign,productionandsalesasthemainbusinessmodel.Themainbusinessistheresearchanddevelopment,productionandsalesofliquorseriessuchas"NationalCellar1573"and"LuzhouLaojiao",andthemaincomprehensiveperformanceindicatorsrankhighintheliquorindustry.Duringthereportingperiod,theCompanyproactivelytackledadverseimpactoftheCOVID-19pandemiconmacro-economyandtheconsumptionindustry,closelyfollowedthedevelopmentthemeof"FirmDetermination,StrongConfidence,StrictManagement,TargetedAudit,TalentDevelopmentandAll-outEfforts",andadvancedeachtaskinanorderlymanner,therebyachievingconstantandhealthygrowthofoperatingresults.2.Significantchangesinthemainassets2.1.SignificantchangesinthemainassetsMainassetsReasonsforanysignificantchangeEquityassetsN/AFixedassetsTheclosingbalanceincreasedbyCNY1,315,252,724.43comparedtoopeningbalance,indicatinganincreaseof86.59percent.Itwasmainlyduetotheincreaseinconstructioninprogressthatmettheexpectedconditionsforuseandwastransferredtofixedassetsinthecurrentperiod.IntangibleassetsTheclosingbalanceincreasedbyCNY105,656,470.75comparedtoopeningbalance,indicatinganincreaseof31.80percent.Itwasmainlyduetotheincreasedlandacquisitioninthecurrentperiod.ConstructioninprogressN/A2.2.MainassetsoverseasApplicable√N/A3.AnalysisofcorecompetitivenessA.GeographicaladvantageLuzhouCity,wheretheCompanyislocated,sitsinthetransitionalareabetweenthesouthernrimoftheSichuanBasinandtheYunnan-GuizhouPlateau,whichfeaturesawarmerandmorehumidsub-tropicalclimatecomparedtootherareasatthesamelatitude,withatemperaturealwaysabove0℃throughouttheyear.Theuniqueclimateandsoilareagreeabletogrowgrainsforliquorbrewing.Theglutinousred2020InterimReportofLuzhouLaojiaoCo.,Ltd.10sorghumandsoftwheatgrowninthisareaaretheprimaryrawmaterialsfortheliquoroftheCompany.ThecellarsinwhichtheCompanybrewsitsliquoraremadeofthelocalloessalclaycharacteristicofstrongviscosity,avarietyofmineralsandexcellentmoistureretention.Inaddition,theabundantandqualitywaterintheregion,createsauniquegeographicaladvantagefortheproductionoftheCompany’sliquor.B.AdvantageofcellarsandbrewingtechniqueAgedcellarsarethemostessentialconditionforastrongaromaticliquormakertoproducegoodqualityliquor.TheCellarsofNationalTreasure1573,foundedin1573,wasgrantedbytheStateCouncilasthefirstCulturalRelicofNationalImportanceintheindustryundertheProtectionoftheStateinDecember1996.1,619cellarsofLuzhouLaojiaowhichhavebeencontinuouslyusedforover100years,togetherwithits16ancientbrewingworkshopsandthreenaturalcellarholes,wereallselectedasthefourthbatchofCulturalRelicsofNationalImportanceundertheProtectionoftheStatein2013.Theyareuniqueresourcesthatcannotbereplicated.Inboth2006and2012,LuzhouLaojiaoDaquCellarsweretwiceselectedintothepreliminarylistofChinaforWorldHeritage.InNovember2018,LuzhouLaojiaoCellarsandBrewingWorkshopswereselectedintoChina’sIndustrialHeritageList.Thetime-honoredTraditionalBrewingTechniqueofLuzhouLaojiaoisa23-generationinheritanceandaclassicbrewingtechniqueforstrongaromaticliquor.ThistechniquewasselectedasthefirstbatchofNationalIntangibleCulturalHeritageinMay2006.TheCellarsofNationalTreasure1573andtheTraditionalBrewingTechniqueofLuzhouLaojiaotogetherprovidethemostessentialbasisandassuranceforthequalityoftheproductseriesofNationalCellar1573andLuzhouLaojiao.C.BrandadvantageBrandisakeybusinessresourceforliquorproducers.TheCompany’sreputationisgreatlybuiltonitssuperiorityinbrand.NationalCellar1573,whichisofaconnoisseurshiplevel,isaworld-famoushigh-endbrand.LuzhouLaojiaoTequ,aclassicbrandforstrongaromaticliquor,wasselectedin1952bythefirstnationaltastingcompetitionjudgesasoneofthefourmostfamousliquorbrandsinChina.Itistheonlystrongaromaticliquorbrandthatwonthetitleof“NationalFamousLiquor”forfiveconsecutivetimes,aswellasthepioneerwithregardtothe“Tequ”varietyofliquor.Inrecentyears,theCompanyhassuccessfullyputinplaceabrandsystemof“dualbrands,threeproductseries,andfivemajorsingleproducts”withgreatclarityandfocus.TheprogramscarriedouttopromotethebrandofNationalCellar1573andrevivethebrandofLuzhouLaojiaohaveproducedremarkableresults,withsignificantimprovementinbrandinfluence.TheCompany’sliquorisincreasinglyknownbyconsumersasanationalbrandofstrongaromaticliquorandofauthenticflavor.D.QualityandR&DadvantageTheCompanyiscommittedtoproducinghigh-qualityliquor,advocatingahealthylifestyleand“makingthequalityvisible”.Thefirst“OrganicSorghumPlantingBase”wasestablishedandthesix-factormanagementsystem(includingorganic,quality,safety,environment,measurementandenergy)wasbuiltandimproved.Theeightresearchplatformsareestablished,includingNationalEngineeringResearchCenterofSolid-StateBrewing,NationalLiquorTestCenter,NationalPostdoctoralWorkstation,etc,whichallsupporttheinnovationandupgradingofproductswiththeirstrongtechnicalforce.Inrecentyears,theCompanyhasputinalotofeffortsinresearchingTequproduction,brewinginformatization&2020InterimReportofLuzhouLaojiaoCo.,Ltd.11automation.RelyingonthetechnologicalinnovationplatformssuchastheNationalIndustrialDesignCenter,andcontinuouslydeepeningthecooperationwithuniversitiesandscientificresearchinstitutesincludingtheChineseAcademyofSciencesandtheJiangnanUniversity,theCompanyhasundertakendozensofnational-orprovincial-levelprojectsandhasbeengrantedhundredsofinventionorutilitymodelpatents.Andremarkableresultshavebeenachievedwithrespecttoimprovementofthequalityofbaseliquor,aswellasproductionefficiencyimprovement.E.TalentadvantageTheCompanyhasbuiltuptherichnessinitstalentpoolthroughouttheyears.Ithas1inheritorofnationalintangibleculturalheritage,2mastersofChinesebrewing,2mastersofChineseliquor,3mastersofChineseliquortechnique,2Chineseliquorconnoisseurs,4seniorprofessorengineers,6expertswhoreceivespecialallowancesfromtheStateCouncil,3nationaltechnicians,3academicandtechnologicleadersofSichuanprovince,1excellentexpertwithspecialcontributionofSichuanprovince,1craftsmanofSichuanprovince,1technologicaleliteofSichuanprovince,aswellashundredsofhighlyskilledpersonnelincludingnationalliquorjudges,seniorbrewingtechniciansandbrewingtechnicians.ThecomprehensiveandprofessionalpersonnelsystemassuresthesounddevelopmentoftheCompany.2020InterimReportofLuzhouLaojiaoCo.,Ltd.12SectionIVPerformanceDiscussionandAnalysis1.OverviewForthefirsthalfof2020,operatingrevenueamountedtoCNY7.634billion,down4.72%yearonyear;andthenetprofitattributabletotheshareholdersofthelistedcompanyreachedCNY3.22billion,up17.12%yearonyear.Overthepasthalfyear,theCompany'smainworkincluded:A.TheCompanycarriedoutsolidpandemicpreventionandcontrol,andresumedworkandproductionstepbystep.TheCompanyhasattachedgreatimportancetopandemicpreventionandcontrolsincethebattletofightandcontrolCOVID-19pandemicfullycommenced.InadditiontoquicklysettingupasteeringgroupforCOVID-19preventionandcontrol,theCompanydevelopedacomprehensivepreventionandcontrolsystemthatcomprisedan"all-level"preventionandcontrolorgan,an"all-day"reportingmechanismforpreventionandcontrol,an"all-round"preventionandcontrolrange,andan"all-coverage"inspectionforpreventionandcontrol.Ithastakenanumberofmeasures,includingcommunicationandeducationonthepandemicpreventionandcontrol,surveyofpersonnel&follow-ups,testingandmonitoringofstaffhealthconditions,andguaranteedinventoryofsupplies.Throughtheresponsiveandscientificapproaches,theCompanyaimedtocarryforwardproductionandbusinessoperationswhilealldepartmentsweredutifullyperformingthepandemicpreventionandcontrol,onthebasisofnoinfectedandnosuspectedcases.B.TheCompanyintroducedinnovativemarketingideasandmadeconstantbreakthroughsinthemarket.Inordertoactivelyadapttoadjustmentsofdrinkingplacesandenvironment,theCompanytookaseriesofinnovativemeasures:Providinglivestreamingactivitiessuchas"CloudStorage"and"Masters'ClassontheCloud"undertheStorageCeremonytopreserveouraromaticheritageandexhibitculturalvalue;organizingonlineactivitiesincluding"OnlineDrinkingDate"and"HouseholdChefCompetition"tostimulateconsumerstoopenabottleathome;makinguseofonlinelive-streamingplatformsandtheadvertisingmodelof"MainstreamMedia+KOL"topublicizetheCompany'sbrandculture,productfeaturesandtastingknowledge;capitalizingonsupermarketsande-commerceplatformstostrengthencooperationonlogisticsanddeliveryandexpandchannelsales;andvigorouslyenhancingitspresenceinnutritiousliquor,pre-mixedliquorandfruitwine,andlaunchinghealthyandfashionableproductstoattractyoungconsumers.C.TheCompanypromoteddevelopmentofmajorprojectsandwasresolutetorealizetargets.TheCompanyinsistedon"OnePolicyandOneMeasureforOneProject",andfacilitatedtheresumptionofworkandproductionformajorprojectsbysteps,areasandprocedures.ItacceleratedprojectdevelopmentandensuredHuangyiBreweryEco-Park(focusingonthebrewingtechnicalinnovationprogram)wouldbeputintocomprehensiveoperationsasscheduled.Atpresent,thebrewingunitsatisfiesrequirementsforproductionanduse;theworkshopforrawmaterialprocessing,sewageprocessingstation,energycentreandothersupportingfacilitiesmeettheconditionsfortrialproduction.AsforthetechnicalupgradeprojectintheSmartPackagingCentre,designanddebuggingofthesmartpackagingequipmenthavebeencompleted.TheCompanyismakingeveryefforttobuildthecenterintoaleadingexampleintheliquorindustryasanautomatic,information-basedandintelligentbaseforfinalproductpackaging,warehousingandlogistics.2020InterimReportofLuzhouLaojiaoCo.,Ltd.13D.TheCompanyendeavoredtosecureproductionandconsolidatedthefoundationforproductionandoperations.ThespecializedautomaticlinesforLuzhouLaojiaoTequandErquhavebeenbuiltandputintooperations,whichsetanexampleofautomaticandintelligentoperationfortheindustry.TheCompanyverifiedtheimplementationinformationofsuppliers,bottlingenterprisesandlogisticsenterprises,conductedsurveys,streamlinedproblemsandprovidedpandemic-preventionsuppliessuchasmasksanddisinfectantsforthem.Thus,difficultiesofsupportingenterprisesinpandemicpreventionandresumptionofworkandproductionwereeffectivelysolved.2.AnalysisofmainbusinessSamewiththecontentspresentedin“1.Overview”ofthissection.Year-on-yearchangesinkeyfinancialdataUnit:CNYH12020H12019YoYChangeReasonforanysignificantchangeOperatingrevenues7,634,482,901.878,013,035,019.72-4.72%Costofsales1,386,636,428.851,626,443,132.19-14.74%Sellinganddistributionexpenses1,111,958,208.981,538,501,721.21-27.72%Generalandadministrativeexpenses360,013,975.76340,569,422.145.71%Financeexpenses-108,274,836.69-96,209,653.90Corporateincometax1,034,276,363.11898,232,269.3015.15%R&Dexpenses44,739,047.8128,917,680.7854.71%MainlyduetotheincreasedR&DprojectsinthecurrentperiodNetcashflowsfromoperatingactivities728,815,422.241,706,750,590.34-57.30%MainlyduetothedecreasedcashreceivedfromsaleofgoodsinthecurrentperiodNetcashflowsfrominvestingactivities-1,050,174,817.35-1,369,801,975.96Netcashflowsfromfinancingactivities1,499,441,368.05-6,649,100.00Mainlyduetothefundsraisedthroughapublicofferingofcorporatebondsinthecurrentperiod2020InterimReportofLuzhouLaojiaoCo.,Ltd.14Netincreaseincashandcashequivalents1,180,083,124.68331,607,209.11255.87%Taxesandsurcharges679,513,830.821,027,010,927.88-33.84%MainlyduetothedecreasedconsumptiontaxinthecurrentperiodSignificantchangestotheprofitstructureorsourcesoftheCompanyinthereportingperiodApplicable√N/ANosuchchangesintheReportingPeriod.BreakdownofoperatingrevenuesUnit:CNYH12020H12019YoYChangeAmountAsapercentageofoperatingrevenuesAmountAsapercentageofoperatingrevenuesTotal7,634,482,901.87100%8,013,035,019.72100%-4.72%BybusinesssegmentLiquor7,566,057,028.3399.10%7,921,465,489.4698.86%-4.49%Other68,425,873.540.90%91,569,530.261.14%-25.27%ByproductHigh-endliquor4,745,839,916.7962.16%4,313,391,651.8053.83%10.03%Mid-endliquor1,911,536,587.5125.04%2,223,580,529.4027.75%-14.03%Low-endliquor908,680,524.0311.90%1,384,493,308.2617.28%-34.37%Other68,425,873.540.90%91,569,530.261.14%-25.27%BygeographicalsegmentDomestic7,605,771,011.0899.62%7,942,834,815.1199.12%-4.24%Overseas28,711,890.790.38%70,200,204.610.88%-59.10%Businesssegment,productsorgeographicalsegmentscontributingover10%oftheoperatingrevenuesorprofits√ApplicableN/AUnit:CNYOperatingrevenueCostofsalesGrossprofitmarginYoYchangeofoperatingrevenueYoYchangeofcostofsalesYoYchangeofgrossprofitmarginBybusinesssegmentLiquor7,566,057,028.331,360,968,975.6382.01%-4.49%-14.73%2.16%2020InterimReportofLuzhouLaojiaoCo.,Ltd.15ByproductHigh-endliquor4,745,839,916.79386,491,876.4591.86%10.03%6.84%0.25%Mid-endliquor1,911,536,587.51374,351,987.1380.42%-14.03%-3.42%-2.15%Low-endliquor908,680,524.03600,125,112.0533.96%-34.37%-29.12%-4.89%BygeographicalsegmentDomestic7,537,345,137.541,353,180,457.7382.05%-4.00%-14.69%2.25%Overseas28,711,890.797,788,517.9072.87%-59.10%-20.16%-13.23%UnderthecircumstancesthatthestatisticalstandardsfortheCompany’smainbusinessdataadjustedinthereportingperiod,theCompany’smainbusinessdatainthecurrentyeariscalculatedbasedonadjustedstatisticalstandardsattheendofthereportingperiod□Applicable√N/AReasonforanyover30%YoYmovementsinthedataabove√ApplicableN/AA.Revenuefromlow-endliquordecreasedby34.37%year-on-year,mainlyduetothedecreasedsalesrevenueasaresultoftheCOVID-19pandemic.B.Overseasrevenuedecreasedby59.10%year-on-year,mainlyduetothedecreasedsalesrevenueasaresultoftheimpactoftheCOVID-19pandemicontheoverseasmarket.3.Analysisofnon-corebusinessApplicable√N/A4.Assetsandliabilities4.1SignificantchangeofassetitemsUnit:CNY30June202030June2019ChangeinpercentageExplanationaboutanymaterialchangeAmountAsapercentageoftotalassetsAmountAsapercentageoftotalassetsCashandcashequivalents10,933,749,651.4634.43%9,698,993,836.7938.78%-4.35%Accountsreceivable5,545,439.800.02%23,445,033.710.09%-0.07%Inventories3,805,416,004.0711.98%3,312,040,577.3313.24%-1.26%2020InterimReportofLuzhouLaojiaoCo.,Ltd.16Long-termequityinvestments2,311,188,426.507.28%2,164,914,634.638.66%-1.38%Fixedassets2,834,118,122.348.92%957,083,776.693.83%5.09%Constructioninprogress7,066,117,415.7322.25%4,606,922,145.4118.42%3.83%4.2Assetsandliabilitiesmeasuredatfairvalue√Applicable□N/AUnit:CNYItemOpeningbalanceChangesinfairvaluethroughprofitorlossChangesincumulativefairvaluerecordedintoequityProvisionforimpairmentAmountofpurchaseAmountofsaleOtherchangesClosingbalanceFinancialasset4.Investmentsinotherequityinstruments352,395,255.782,071,357.57249,903,774.35354,466,613.35Total352,395,255.782,071,357.57249,903,774.35354,466,613.35Financialliability0.000.000.000.00InformationaboutotherchangesWhethermeasurementattributionofmainassetschangessignificantlyinthisyearYes√No4.3RestrictedassetrightsasoftheendofthisreportingperiodItemClosingBalanceReasonOthercashandcashequivalents(CNY)1,400,000.00AccordingtoregulationsofTourismBureau,thetravelservicedepositwasdepositedinadesignatedbankTotal1,400,000.002020InterimReportofLuzhouLaojiaoCo.,Ltd.175.Investment5.1.Totalinvestment√ApplicableN/AInvestmentmadeinthereportingperiod(CNY)Investmentmadeinthesameperiodoflastyear(CNY)YoYchange1,439,229,693.321,628,300,040.10-11.61%5.2.SignificantequityinvestmentmadeinthereportingperiodApplicable√N/A5.3.Significantongoingnon-equityinvestmentinthereportingperiod√Applicable□N/AUnit:CNYItemInvestmentformWhetheritisafixedassetinvestmentIndustryoftheinvestmentprojectAmountofinputinthereportingperiodAccumulatedactualinputamountbytheendofthereportingperiodCapitalsourceProjectprogressProjectedincomeAccumulatedactualincomebytheendofthereportingperiodReasonsfornotmeetingthescheduleandprojectedincomeDateofdisclosure(ifany)Disclosureindex(ifany)TechnicalrenovationprojectofbrewingSelf-builtYesLiquor668,790,911.167,031,481,709.23Fund-raising+self-finance95.00%0.000.00N/A28April2016AnnouncementofAboutsubsidiarytechnicalrenovationprojectofbrewingNo:2016-12(http://2020InterimReportofLuzhouLaojiaoCo.,Ltd.18nfo.com.cn/)Total------668,790,911.167,031,481,709.23----0.000.00------5.4.Financialassetsatfairvalue√Applicable□N/AUnit:CNYCategoryofassetsInitialinvestmentcostChangesinfairvaluerecognizedinprofitorlossChangesinthecumulativefairvaluerecordedintoequityAmountofpurchaseAmountofsaleCumulativeincomeClosingamountCapitalsourceStock64,869,156.762,071,357.57255,793,172.130.000.0051,571,309.05320,662,328.89OwnedfundTotal64,869,156.762,071,357.57255,793,172.130.000.0051,571,309.05320,662,328.89--5.5.Financialassetsinvestment5.5.1.Securitiesinvestment√Applicable□N/ACategoryofsecuritiesStockcodeAbbreviationofsecuritiesInitialinvestmentcostAccountingmeasurementmodelBeginningbookbalanceChangesinfairvaluerecognizedinprofitorlossChangesinthecumulativefairvaluerecordedintoequityAmountofpurchaseAmountofsaleProfitandlossduringthereportingperiodClosingbookbalanceAccountingitemCapitalsourceDomesticandforeignstock601211GTJA12,719,156.76Fairvaluemeasurement217,756,674.52-14,485,706.31190,551,811.450.000.000.00203,270,968.21InvestmentsinotherequityinstrumentsOwnedfundDomesticandforeignstock002246SNC1,030,000.00Fairvaluemeasurement11,757,933.60-62,542.2010,665,391.400.000.000.0011,695,391.40InvestmentsinotherequityOwnedfund2020InterimReportofLuzhouLaojiaoCo.,Ltd.19instrumentsDomesticandforeignstock1983LZBANK51,120,000.00Fairvaluemeasurement89,076,363.2016,619,606.0854,575,969.280.000.000.00105,695,969.28InvestmentsinotherequityinstrumentsOwnedfundTotal64,869,156.76--318,590,971.322,071,357.57255,793,172.130.000.000.00320,662,328.89----5.5.2.Derivativeinvestment□Applicable√N/ANosuchcasesinthereportingperiod6.Saleofmajorassetsandequityinterests6.1.SaleofmajorassetsApplicable√N/ANosuchcasesinthereportingperiod.6.2.SaleofmajorequityinterestsApplicable√N/A7.Analysisofmajorsubsidiaries√ApplicableN/AMainsubsidiariesandjointcompanieswithanover10%influenceontheCompany’snetprofitUnit:CNYCompanynameCompanytypeBusinessscopeRegisteredcapitalTotalassetsNetassetsOperatingRevenueOperatingprofitNetprofitSalesCompanyofLuzhouLaojiaoCo.,SubsidiarySalesofliquor100,000,000.006,340,378,557.033,914,306,325.657,385,629,676.823,018,858,569.222,266,302,374.732020InterimReportofLuzhouLaojiaoCo.,Ltd.20Ltd.Acquisitionanddisposalofsubsidiariesduringthereportingperiod□Applicable√N/ANotesformajorholdingcompaniesandjointstockcompanies8.StructuredentitiescontrolledbytheCompanyApplicable√N/A9.OperatingperformanceforecastforJanuary-September2020WarningofaforecastnegativenetprofitfortheJanuary-SeptemberperiodofthecurrentyearoraconsiderableYoYchangetherein,aswellasthereasons:Applicable√N/A10.RisksfacingtheCompanyandcountermeasuresA.Riskofmacroeconomicfluctuations.Sinceuncertaintyofdomesticmacro-economyisincreasingduetomultiplenegativefactorssuchasspreadofCOVID-19pandemicworldwide,globaleconomyrecessionandinternationaltradefrictions,developmentoftheliquorindustryhasbeenhampered.TheCompanywillstrengthenstudyofmacroeconomicsituationsandindustrialtrends,andmaketimelyadjustmentstooperatingstrategies,soastoadapttochangesintheexternalenvironment.B.Risksfromintensifiedindustrycompetitions.TheCompanywillcontinuouslyenhancebrandbuilding,improveproductionefficiencyandelaboratelydevelopchannelstocontinuouslyenhancecorecompetitiveness.C.Riskofmanagementandoperation.WiththeCompany'sbusiness,assetsandpersonnelscalecontinuouslygrowing,operationaldecision-makingandriskcontrolwillbetougher.Totacklethisproblem,theCompanywillconductstrictmanagementandkeyinspection,continuouslystabilizeanddeveloptalents,vigorouslyimproveitsmanagementlevelandenhancetheefficiencyofmanagementandoperations.D.Riskoffoodsafety.Giventhatfoodsafetyisamajorconcernofthesociety,theCompanywillfurtherpracticetheideaof"makingthequalityvisible",enhanceandextendthequalityregulationsystem,andbuildanintelligent,standardizedandvisiblequalitytracingsystemwithhigherlevel.2020InterimReportofLuzhouLaojiaoCo.,Ltd.21SectionVSignificantEvents1.Annualandextraordinarygeneralmeetingconvenedduringthereportingperiod1.1GeneralmeetingconvenedduringthereportingperiodMeetingTypeInvestorparticipationratioDateofthemeetingDateofdisclosureIndextodisclosedinformationThe2019AnnualGeneralMeetingAnnualGeneralMeeting61.57%30June20201July2020AnnouncementonResolutionsofthe2019AnnualGeneralMeetingNo.:2020-20(.com.cn/)1.2ExtraordinarygeneralmeetingsconvenedattherequestofpreferenceshareholderswithresumedvotingrightsApplicable√N/A2.ProfitdistributionandconvertingcapitalreservesintosharecapitalforthereportingperiodApplicable√N/ANosuchcasesinthereportingperiod.3.UndertakingsoftheCompany'sactualcontroller,shareholders,relatedpartiesandacquirer,aswellastheCompanyandothercommitmentmakersfulfilledinthereportingperiodorongoingbytheendofthisreportingperiodApplicable√N/ANosuchcasesinthereportingperiod.4.EngagementanddisengagementofCPAsfirmAretheinterimfinancialstatementsaudited2020InterimReportofLuzhouLaojiaoCo.,Ltd.22□Yes√NoTheinterimfinancialstatementsarenotaudited.5.Explanationoftheboardofdirectorsandthesupervisorycommitteeregardingthe"Non-standardauditopinion"forthereportingperiodApplicable√N/A6.Explanationsoftheboardofdirectorsregardingthe"Non-standardauditopinion"ofLastYearApplicable√N/A7.BankruptcyandreorganizationApplicable√N/ANosuchcasesinthereportingperiod.8.LitigationMateriallitigationandarbitration√ApplicableN/AProfileoflitigation(arbitration)Amountinvolvedinthecase(CNY’0,000)WhetheritformsanestimateliabilityProgressinlitigation(arbitration)Trialresultsandimpactsoflitigation(arbitration)Executionofjudgmentoflitigation(arbitration)DateofdisclosureDisclosureindexTheCompanyfiledalawsuitwithABCChangshaYingxinBranchoveradepositdispute,andthecasehasbeencompletedinthefirstinstanceofHunanProvinceHigherPeople'sCourtandthe14,942.5NoThesecondtrialhasbeenconcludedForthelossesthattheCompanycannotrecoverthroughcriminalexecutionprocedures,40%shallbebornebyABCChangshaYingxinBranch,20%shallbebornebyABCChangshaNotexecuted15October2014SeeSectionV“Othersignificantevents”2020InterimReportofLuzhouLaojiaoCo.,Ltd.23finaltrialoftheSupremePeople'sCourtHongxinBranchandtherestshallbebornebytheCompanyitself.TheCompanyfiledalawsuitwithICBCNanyangZhongzhouBranchoveradepositdispute,andHenanProvinceHigherPeople’sCourthadmadethejudgmentofthefirsttrial.15,000NoThefirsttrialhasbeenconcludedForthelossesthattheCompanycannotrecoverthroughcriminalexecutionprocedures,50%shallbebornebyICBCNanyangZhongzhouBranch;forthelossesthattheCompanycannotrecoverthroughcriminalexecutionproceduresconcerningCNY122.1millionofprincipalinthecase,10%shallbebornebySanyaRuralCommercialBankHongshaBranch,andtherestshallbebornebytheCompanyitself.Notexecuted10January2015SeeSectionV“Othersignificantevents”OtherlitigationApplicable√N/A9.DoubtsfromMediaApplicable√N/ATheCompanyhadnoissuesaboutwhichmediagenerallyraiseddoubtsintheReportingPeriod.2020InterimReportofLuzhouLaojiaoCo.,Ltd.2410.PunishmentsandrectificationsApplicable√N/ANosuchcasesinthereportingperiod.11.CreditconditionsoftheCompanyaswellasitscontrollingshareholderandactualcontrollerApplicable√N/A12.Implementationofanyequityincentiveplan,employeestockownershipplanorotherincentivemeasuresforemployeesApplicable√N/ANosuchcasesinthereportingperiod.13.Significantrelatedpartytransactions13.1.RelatedpartytransactionsarisingfromroutineoperationApplicable√N/ANosuchcasesinthereportingperiod.13.2.RelatedpartytransactionsregardingpurchaseorsalesofassetsorequityinterestsApplicable√N/ANosuchcasesinthereportingperiod.13.3.RelatedpartytransitionsarisingfromjointinvestmentsinexternalpartiesApplicable√N/ANosuchcasesinthereportingperiod.13.4.CreditsandliabilitieswithrelatedpartiesApplicable√N/ANosuchcasesinthereportingperiod.2020InterimReportofLuzhouLaojiaoCo.,Ltd.2513.5.OthersignificantrelatedpartytransactionsApplicable√N/ANosuchcasesinthereportingperiod.14.OccupationoftheCompany'sfundbythecontrollingshareholderoritsrelatedpartiesfornon-operatingpurposesApplicable√N/ANosuchcasesinthereportingperiod.15.Significantcontractsandtheirexecution15.1.Trusteeship,contractingandleasing15.1.1.TrusteeshipApplicable√N/ANosuchcasesinthereportingperiod.15.1.2.ContractingApplicable√N/ANosuchcasesinthereportingperiod.15.1.3.LeasingApplicable√N/ANosuchcasesinthereportingperiod.15.2.MajorguaranteesApplicable√N/ANosuchcasesinthereportingperiod.15.3.EntrustassetsmanagementApplicable√N/ANosuchcasesinthereportingperiod.2020InterimReportofLuzhouLaojiaoCo.,Ltd.2615.4OthersignificantcontractsApplicable√N/ANosuchcasesinthereportingperiod.16.SocialResponsibilities16.1InformationaboutenvironmentprotectionWhetherthelistedcompanyanditssubsidiariesbelongtoheavypollutingindustriesprescribedbytheenvironmentalprotectiondepartmentYesCompanynameNameofmainpollutantandparticularpollutantDischargetypeNumberofdischargeoutletDistributionofdischargeoutletEmissionconcentrationPollutiondischargestandardTotalemissionApprovedtotalemissionExcessivedischargeLuzhouLaojiaoCo.,Ltd.CODContinuousdischarge1LuohanBase21.988mg/L50mg/L3.731t25t/aNoLuzhouLaojiaoCo.,Ltd.AmmonianitrogenContinuousdischarge1LuohanBase0.584mg/L5mg/L0.088t2.5t/aNoLuzhouLaojiaoCo.,Ltd.TotalphosphorusContinuousdischarge1LuohanBase0.127mg/L0.5mg/L0.021t0.25t/aNoLuzhouLaojiaoCo.,Ltd.TotalnitrogenContinuousdischarge1LuohanBase4.756mg/L15mg/L0.789t7.5t/aNoLuzhouLaojiaoCo.,Ltd.SulfurdioxideContinuousdischarge2LuohanBase0.432mg/m350mg/m30.015t4.7t/aNoLuzhouLaojiaoCo.,Ltd.OxynitrideContinuousdischarge2LuohanBase27.407mg/m3200mg/m31.266t22.1t/aNoLuzhouLaojiaoCo.,Ltd.PMContinuousdischarge2LuohanBase7.018mg/m320mg/m30.321t2.8t/aNo2020InterimReportofLuzhouLaojiaoCo.,Ltd.27Informationaboutconstructionandoperationofanti-pollutioninstallationsWastewater:AreasoftheCompanythatproducewastewaterareNationalCellarBase,XiaoshiBase,ZaojiaoxiangBase,AnningParkandLuohanBase.Thehigh-concentrationbrewingwastewaterfromtheoldbreweryworkshopsintheurbanareaistemporarilycollectedinthetanks,andislatertransferredtothewastewatertreatmentstationofLuohanBasebytruckfortreatment.ThewastewatertreatmentstationofLuohanBaseisequippedwithonlinemonitorstoautomaticallymonitorCOD,ammonianitrogen,totalphosphorus,totalnitrogen,pHvalueandflows,whichenablesreal-timenetworkingoperationofmonitoringdatawiththeEnvironmentalInformationCenterofLuzhouCity.TheCompany'sfacilitiesforpreventionandcontrolofwastewaterpollutionareundernormaloperations,ensuringup-to-standarddischargethroughgeneraldischargingoutlets.Wastegas:AreasoftheCompanythatproduceexhaustgasareNationalCellarBase,XiaoshiBase,ZaojiaoxiangBaseandLuohanBase(20t/h,306/h).Smallnaturalgasboilersanddirect-firedbottomboilersareusedintheoldbreweryworkshopsintheurbanareas.TheboilersofLuohanBaseareequippedwithonlinemonitorstoautomaticallymonitorexhaustgas,whichenablesreal-timenetworkingoperationofmonitoringdatawiththeEnvironmentalInformationCenterofLuzhouCity.LowNOxcombustiontechnologyisadoptedforthenaturalgasboilers.TheCompany'sfacilitiesforpreventionandcontrolofexhaustgaspollutionareundernormaloperations,ensuringup-to-standardemissionofexhaustgasthroughoutlets.EnvironmentalimpactassessmentforconstructionprojectandotherenvironmentalprotectionadministrativepermissionTheCompanyobservesrequirementsintheManagementPolicyfor"ThreeSimultaneities"ofEnvironmentalProtectioninConstructionProjectsforallconstructionprojects.RegardingthetechnicalupgradeprograminthesmartpackagingcenterofLuzhouLaojiao,technicalupgradeprogramsofLuzhouLaojiaobrewingworkshopsaswellasthepublicandauxiliaryfacilities,cogenerationproject,technicalupgradeprogramofpackaginglineinLuzhouLaojiaoAnningBase,renovationprojectoffacilitiesforenvironmentalprotectionanddischarge,andtechnicalupgradeprogramofsupportingproductionfacilitiesofLuzhouLaojiao,requirementsinnationallawsandregulationsforenvironmentalprotectionarefollowed.TheCompanyispreparingtheAssessmentReportonEnvironmentalImpact,andreportstotheBureauofEcologyandEnvironmentofLuzhouforapprovaltoobtainenvironmentalprotectionadministrativepermission.EmergencyplanforenvironmentalemergenciesTheCompanydevelopedtheContingencyPlanforEnvironmentalEmergencies(Revision2020),theEnvironmentalRiskAssessmentReportandtheEmergencyResourcesSurveyReport,andreportedtotheEnvironmentalEmergencyServiceCenterofLuzhouforfiling.InstitutionsoftheCompanyorganizedtrainingprogramsonthecontingencyplanforemployees,andcarriedoutdrillsofcontingencyplans,whichimprovedemployees'capabilitytorespondtoenvironmentalemergencies.Environmentalself-monitoringprogramTheCompanydevelopedtheenvironmentalself-monitoringplanandentrustedthird-partyagenciestoconductenvironmentalself-monitoringanduploadrelevantdatatoonlineplatforms.LuohanBaseofthe2020InterimReportofLuzhouLaojiaoCo.,Ltd.28CompanyanditsautomaticonlinemonitorsforexhaustgasareundernetworkingoperationwiththeInformationCenteroftheBureauofEcologyandEnvironmentofLuzhou;self-monitoringinformationarereleasedon"EnvironmentalCreditChina"andthe"PlatformofSichuanProvinceforManagementandSharingofInformationaboutPollutionSourceMonitoring"tofacilitatesupervisionfromallwalksoflife.Otherinformationaboutenvironmentalprotectionthatshouldbedisclosed:N/AOtherinformationaboutenvironmentprotectionN/A16.2Informationabouttargetedpovertyalleviation16.2.1TargetedpovertyalleviationplanA.BasicStrategyUndertheguidanceofCPCcommitteesandgovernmentsatcentral,provincialandmunicipallevels,theCompanyadherestothecorporatephilosophyof"liquorbrewedwiththeuniverse,spiritgeneratedbytheworld",andthoroughlyimplementsthepovertyreliefarrangementsmadebyCPCcommitteesandgovernmentsatdifferentlevelsintheyearforthefinalvictoryofpovertyrelief.Withthe"ruralrevitalizationstrategy"asapillarandtheconstructionof"newcivilizationvillages"and"newvillageswithfourfavorableaspects"asobjectives,theCompanycontinuouslyconsolidatespovertyreliefachievementsintwovillages(XiangtianVillageinLongshanTown,GulinCounty,LuzhouCityandGuntangVillageinMaiwaTownship,HongyuanCounty,NgawaPrefecture)undermajortargetedassistancetofulfillthepromisethat"effortswillnotberetrieveduntilacompletevictoryiswon".B.OverallObjectiveBycomprehensivelyimplementingworkingrequirementsonpovertyrelieffromCPCcommitteesandgovernmentsatdifferentlevels,theCompanywillfocusonimprovinginfrastructure,makingupfordeficienciesinpublicservices,stabilizingproductivity,increasingincomeandenhancingeducationonvillagersintwovillagesundertargetedrelief.Itwillcomprehensivelyconsolidatepovertyreliefachievements,furthersolidifyindustrialbasis,enhancequalityofvillagers,strengthenhardstrengthofpovertyrelief,andassistthevillagesinachievinghigh-quality,stablepovertyreliefandruralrevitalizationanddevelopment.C.KeytasksBypersistingwiththeassistanceprincipleofsimultaneously"transfusingblood,producingbloodandpromotingbloodcirculation"andfollowingthephilosophyof"makingupforshortageandsatisfyingpeople'sneeds"and"sustainabledevelopment",theCompanyinsistsonconsideringindustrialdevelopmentasamajorroute,ambitionandintelligenceenhancementasfundamentalmeasures,andconstructionofnewcivilizationvillagesasboosterstosolidlypromotepovertyreliefandruralgovernance.Itplanstocontinuouslyimprovequalityofvillagers,optimizeenvironmentinruralcommunitiesandstrengthenhardstrengthofpovertyreliefthroughtheprojectofmedicalsupply2020InterimReportofLuzhouLaojiaoCo.,Ltd.29donation,theprojectofinfrastructureimprovement,industrydevelopmentandideologicaleducationonvillagersinthetwovillages.D.GuaranteemeasuresTheCompanywillfurtherimplement"FiveOnes"assistancemeasures,insistontheworkingmechanismof"oneresponsibleinstitution,onepersonresponsibleforassistance,oneprojectteam,onecadreinonevillage,andoneworkingteaminonevillage",andsolidify"FivePillars"of"improvepovertyreliefteams,developstrictsystemofresponsibility,developledgersforpovertyrelief,streamlinepovertyreliefideasandimplementpovertyreliefprojects",soastoensureorderlyprogressinpovertyrelief.16.2.2OutlineofannualtargetedpovertyalleviationA.TargetedPovertyReliefinXiangtianVillage,LongshanTown,GulinCountyRegardingassistanceinXiangtianVillage,GulinCounty,theCompanyattachesimportancetodevelopingecologicalagriculture,cultivatingindustrialteamsandenhancingqualityofvillagersinaccordancewiththeideaofdevelopingweaksessions.1.MakefulluseofgeographicaladvantagestodevelopplantingbasesoftraditionalChinesemedicinalmaterials.Supportedbythelocalgovernment,XiangtianVillageplanstobuildplantingbasesoftraditionalChinesemedicinalmaterialswithanareaof500mu(approximately0.33squarekilometers).TheCompanyinvitesexpertstocarryoutseveralfieldinvestigationsanddemonstrategeographicalenvironment,climate,plantspeciesandplantingmodels.2.Expandtheprojectofpaddycumfishculturetodeveloptheaquacultureindustry.WiththeprojectofpaddycumfishcultureasthepillarindustryofXiangtianVillage,theCompanyplanstoassisttheGovernmentofLongshanTowninexpandingfishcultureinpaddyfieldsinXiangtianVillagethroughroadhardening,landconsolidationanddamgovernancetofurtherenlargetheculturescale.3.Continuetosupportthefarmingindustryandbackpoverty-strickenhouseholdstodevelopcourtyardeconomy.Inviewofthefarmingcapabilityofpoverty-strickenhouseholds,theCompanyplanstodistributepigletsandcharitybabychickstopairingpoverty-strickenhouseholds.4.OrganizeactivitiesofPartybranchpairing.ThePartybranchoftheLiquorBodyDesign&ManagementCenteroftheCompanyispairedwiththePartybranchofXiangtianVillagetocarryoutthepairingPartybuildingactivityof"pairedPartybranchesandhand-in-handPartymembers".Inthefirsthalfoftheyear,thePartydayactivitythemed"pandemicpreventionstartedwithPartymembers"wascarriedout.5.Carryoutpairingassistanceactivities.TheCompanyfurtherexploresthelong-termmechanismforenterprises'pairingassistanceofpoverty-strickenvillages,deepensone-for-onepairingassistancebetweenmembersintheCompany'scoremanagementteamaswellasgrass-rootsPartyorganizationsandpoverty-strickenhouseholdsinXiangtianVillages,revisesmeasuresof"oneassistancemanualforonehousehold",andpaysvisitsandcondolence.B.TargetedPovertyReliefinHongyuanCountyandGuntangVillageIn2020,theCompanypersistswiththeprinciplethateffortsandfundsinvestedinassistancewillonlyincrease,continuouslyadvancespovertyreliefinHongyuanCountyandGuntangVillage,andtackles2020InterimReportofLuzhouLaojiaoCo.,Ltd.30difficultiesinhealthcareassistance,industrialinfrastructurebuilding,expansionofproductsaleschannels,Partyguidance,andideological&culturaleducationonherdsmen.1.Continuouslyimplement"consumptionpovertyrelief".TheCompanycontinuouslyinsistsontheindustrialpovertyreliefroadof"LuzhouLaojiaoe-commerce+enterprisesinHongyuanCounty+collectiveeconomy+poverty-strickenherdsmen",andconductstheprojectof"makingafortunefromsales".2.Surveyproposeddonationprojects.TheCompanycarriesoutseveralfieldsurveysontheprojectofpasturelanecirclesinGuntangVillage,thelanemaintenanceprojectindistantgrazingfieldsinGuntangVillage,theprojectofBanhanBridgeindistantgrazingfieldsinGuntangVillage,andtheprojectofteachingbuildingsandcentralizedheatingofstudents'dormitoriesinMaiwaTownshipPrimarySchool.3.OrganizePartybranchco-buildingandpairingassistancewithpoverty-strickenhouseholds.TheNo.1PartybranchofLuzhouLaojiaoSalesCompanywaspairedwiththePartybranchofGuntangVillage.TogethertheycarriedoutthepairingPartyco-buildingactivityof"workhardtoalleviatepovertyandworktogethertobuildamoderatelyprosperoussociety".TheCompanyconductedone-for-onepairingassistancebetweenmembersintheCompany'scoremanagementteamaswellasgrass-rootsPartyorganizationsandpoverty-strickenhouseholdsinGuntangVillages,formulatedmeasuresof"oneassistancemanualforonehousehold",andpaidcondolenceduringtheSpringFestivalandhomevisits.16.2.3Follow-uppovertyalleviationplanFortargetedpovertyreliefinXiangtianVillage,GulinCounty,theCompanyhelpstostabilizeproductivity,securesupplyandincreasefarmers'incomethroughconsumptionpovertyrelief,intelligenceandambitionenhancement,visitsandaids,soastocontinuouslyconsolidatepovertyreliefachievements.FortargetedpovertyreliefinHongyuanCountyandGuntangVillage,theCompanybuildspasturelanes,BanhanBridgeandpasturelanecirclesindistantgrazingfieldsinGuntangVillageaswellasteachingbuildingsandcentralizedheatingofstudents'dormitoriesinMaiwaTownshipPrimarySchool.Itwillconsolidatepovertyreliefachievementinhealthcarepovertyrelief,industrialpovertyrelief,expansionofproductsaleschannels,cultural&educationalpovertyrelief,furtherimproveinfrastructure,improvequalityofvillagers,optimizeenvironmentinvillagecommunitiesandcontinuouslydevelopweaksessionsinHongyuanCountyandGuantangVillage.17.Othersignificantevents√ApplicableN/AA.TheCompany’sthreesavingsdepositsofCNY500million,includingABCChangshaYingxinBranchandICBCNanyangZhongzhouBranchareinvolvedincontractdisputes.TheCompanyhasreportedtothepublicsecurityauthoritiesforinterventionwiththeassetspreservationmeasureandfiledcivilclaimsfortwocontractdisputesamongthethreecases.Combinedwiththeassetspreservationsituationofthepublicsecurityauthoritiesandprofessionallegaladviceissuedbylawyers,theCompanyhasmadeaprovisionofCNY200millionforbaddebtsforthedepositofCNY500millionforcontractdisputes.Duringthereportingperiod,theSupremePeople’sCourtmadeafinaljudgmentonthedisputearisingoutofthedepositcontractbetweentheCompanyandABCChangshaYingxinBranch.Inrespectofthe2020InterimReportofLuzhouLaojiaoCo.,Ltd.31lossesthatcouldn’tberecoveredthroughcriminalprocedures,ABCChangshaYingxinBranchshouldbear40%ofthecompensationliability,ABCChangshaHongxingBranch20%,andtheremaininglossesshouldbebornebytheCompany.HenanProvinceHigherPeople’sCourthadmadethejudgmentofthefirsttrialonthelawsuitoftheCompanywithICBCNanyangZhongzhouBranchoveradepositdispute:forthelossesthattheCompanycannotrecoverthroughcriminalexecutionprocedures,50%shallbebornebyICBCNanyangZhongzhouBranch;forthelossesthattheCompanycannotrecoverthroughcriminalexecutionproceduresconcerningCNY122.1millionofprincipalinthecase,10%shallbebornebySanyaRuralCommercialBankHongshaBranch,andtherestshallbebornebytheCompanyitself.Asof30June2020,theCompanyhadrecoveredanamountofCNY214,859,700forthreeofthedisputes.SeedetailsintheCompany’sannouncements:DateofannouncementNo.CatalogueOfficialwebsite15October20142014-35Announcementofsignificantlitigation12November20142014-41Announcementofsignificantlitigationprogress6December20142014-43AnnouncementofsignificantlitigationprogresspartII10January20152015-1Announcementofsignificantevents4February20152015-4Announcementofsignificanteventsprogress25March20152015-11AnnouncementofsignificantlitigationprogresspartIII18April20152015-20AnnouncementofsignificantlitigationprogresspartIV22April20152015-21AnnouncementofsignificanteventsprogresspartII24April20152015-25AnnouncementofsignificantlitigationprogresspartV15July20152015-44AnnouncementofsignificantlitigationprogresspartVI22July20152015-45AnnouncementofsignificantlitigationprogresspartVII6June20182018-17AnnouncementofsignificantlitigationprogresspartVIII7May20192019-11AnnouncementofsignificantlitigationprogresspartIX17May20192019-13AnnouncementofsignificantlitigationprogresspartX2020InterimReportofLuzhouLaojiaoCo.,Ltd.3224March20202020-6AnnouncementofsignificantlitigationprogresspartXI6May20202020-14AnnouncementofsignificantlitigationprogresspartXII2.TheCompanyheldthe16thmeetingoftheninthboardofdirectorson10January2020,reviewedandapprovedtheProposalonChangesinAccountingPoliciesanddecidedtopreparedtheCompany’sfinancialstatementsasrequiredbytheAccountingStandardsforBusinessEnterprisesNo.14-Revenue(CK[2017]No.22)revisedandissuedbytheMinistryofFinancesince1January2020.18.Significanteventsofsubsidiaries√Applicable□N/ATheCompanyinvestedinthetechnicalupgradeprogramofbrewingandimplementedtheprogramwiththewholly-ownedsubsidiary,BrewingCompany,astheentity.On30June2020,theProposalonIncreasingInvestmentintheTechnicalUpgradeProgramofBrewingwasapprovedbythe2019AnnualGeneralMeetingupondeliberation.Accordingtotheproposal,extraCNY1,462,996,500offundswouldbeinvestedinthetechnicalupgradeprogramofbrewing.Uponthisincreaseoffunds,thetotalinvestmentinthetechnicalupgradeprogramofbrewingwouldreachCNY8,877,276,500.Formoreinformation,pleaserefertothefollowingannouncements:AnnouncementonInvestingintheTechnicalUpgradeProgramofBrewingbytheSubsidiarydisclosedon28April2016withanAnnouncementNo.of2016-12;AnnouncementonIncreasingInvestmentintheTechnicalUpgradeProgramofBrewingdisclosedon2June2020withanAnnouncementNo.of2020-17(.Asof30June2020,95%oftheprojecthasbeencompleted.2020InterimReportofLuzhouLaojiaoCo.,Ltd.33SectionVIChangesinSharesandInformationaboutShareholders1.Changesinshares1.1ChangesinsharesUnit:ShareBeforeChangesinthisyear(+,-)AfterNumberProportionIssuanceofnewsharesBonussharesCapitalizationofcapitalreservesOtherSubtotalNumberProportionI.Restrictedshares4,647,1810.32%-34,594-34,5944,612,5870.31%2.Sharesheldbystate-ownedcorporations4,166,6660.28%4,166,6660.28%3.Sharesheldbyotherdomesticinvestors480,5150.03%-34,594-34,594445,9210.03%Sharesheldbydomesticindividuals480,5150.03%-34,594-34,594445,9210.03%II.Non-restrictedshares1,460,105,29599.68%34,59434,5941,460,139,88999.69%1.CNYcommonshares1,460,105,29599.68%34,59434,5941,460,139,88999.69%III.Totalshares1,464,752,476100.00%001,464,752,476100.00%ReasonsforthechangeinsharesApplicable√N/AApprovalofsharechangesApplicable√N/ATransferofshareownershipApplicable√N/AImplementationprogressofsharesrepurchases□Applicable√N/A2020InterimReportofLuzhouLaojiaoCo.,Ltd.34Implementationprogressofsharebuybackreductionthroughcentralizedbidding□Applicable√N/AEffectsofchangesinsharesonthebasicEPS,dilutedEPS,netassetspershareattributabletocommonshareholdersoftheCompanyandotherfinancialindexesoverthelastyearandthelastreportingperiodApplicable√N/AOthercontentsthattheCompanyconsidersitnecessaryorrequiredbythesecuritiesregulatoryauthoritiestodiscloseApplicable√N/A1.2Changesinrestrictedshares√Applicable□N/AUnit:ShareNameofshareholderNumberofholdingrestrictedsharesatthebeginningofthereportingperiodDecreaseofrestrictedsharesduringthereportingperiodIncreaseofrestrictedsharesduringthereportingperiodNumberofholdingrestrictedsharesbytheendofthereportingperiodRestrictionreasonRestrictedsharesrelieveddateShenCaihong138,37534,5940103,781Shareslockedbyseniorexecutives2January2020Total138,37534,5940103,781----2.Issuanceandlistingofsecurities√Applicable□N/ANameofstockanditsderivativesecuritiesIssuancedateIssuanceprice(orinterestrate)NumbersListingdateApprovednumbersfortradingExpirydateofthetradingDisclosureindexDisclosuredateStockConvertiblecorporatebonds,separatebargainingconvertiblecorporatebondsandcorporatebonds2020PublicOfferingofCorporate17March20203.50%15,000,00025March202015,000,000AnnouncementonIssuanceof12March20202020InterimReportofLuzhouLaojiaoCo.,Ltd.35BondofLuzhouLaojiaoCo.,Ltd.forQualifiedInvestors(PhaseI)2020PublicOfferingofCorporateBondofLuzhouLaojiaoCo.,Ltd.forQualifiedInvestors(PhaseI)(.cninfo.com.cn/)OtherderivativesecuritiesInformationaboutsecuritiesissuedinthereportingperiodOn17March2020,theCompanycompletedtheissuanceof2020PublicOfferingofCorporateBondofLuzhouLaojiaoCo.,Ltd.forQualifiedInvestors(PhaseI)atCNY100perpiece.ThefinalactualissuancescalewasCNY1.5billionandthefinalcouponratewas3.50%.ThesaidbondsweretradedonShenzhenStockExchangeon25March2020.3.TotalnumberofshareholdersandtheirshareholdingsUnit:ShareTotalnumberofcommonshareholdersattheendofthereportingperiod116,932Totalnumberofpreferenceshareholderswithresumedvotingrightsbytheendofthereportingperiod(ifany)(seeNote8)0Shareholdingsofcommonshareholderswithashareholdingpercentageover5%orthetop10commonshareholdersNameofshareholderNatureofshareholderShareholdingpercentageTotalcommonsharesheldbytheendofthereportingperiodIncrease/decreaseduringthereportingperiodNumberofholdingrestrictedcommonsharesNumberofholdingnon-restrictedcommonsharesPledgedorfrozensharesStatusofsharesNumberofsharesLuzhouState-owned26.02%381,088,38900381,088,3892020InterimReportofLuzhouLaojiaoCo.,Ltd.36LaojiaoGroupCo.,Ltd.corporationLuzhouXingLuInvestmentGroupCo.,Ltd.State-ownedcorporation24.99%365,971,14200365,971,142Pledged101,980,000ChinaSecuritiesFinanceCorporationlimitedOther2.31%33,842,0590033,842,059HongKongSecuritiesClearingCompanyLimitedOutboundcorporation1.97%28,902,451-11,407,824028,902,451CentralHuijinAssetManagementCo.,Ltd.State-owned1.43%20,937,5000020,937,500BankofChinaCo.,Ltd.–MiddleandsmallcapitalstockshybridsecuritiesinvestmentfundbyEfundOther1.36%19,989,538-1,390,028019,989,538AgriculturalBankofChinaCo.,Ltd.-Consumptionindustrystock-basedsecuritiesinvestmentfundbyEfundOther1.33%19,521,463-1,308,367019,521,463BankofChinaCo.,Ltd-BlueChipSelectedhybridOther1.29%18,850,032—018,850,0322020InterimReportofLuzhouLaojiaoCo.,Ltd.37securitiesinvestmentfundbyEfundBankofChinaCo.,Ltd.–LiquorindexclassificationsecuritiesinvestmentfundbyChinaMerchantsFundOther1.26%18,474,494369,433018,474,494IndustrialandCommercialBankofChinaCo.,Ltd.-NewlygrowthhybridsecuritiesinvestmentfundbyInvescoGreatWallOther0.89%13,000,000-2,912,158013,000,000Relatedpartiesoracting-in-concert1.LaojiaoGroupandXingluGrouparebothwhollystate-ownedcompaniesunderthejurisdictionofSASACofLuzhou.Thetwocompaniessignedtheagreementofpersonsactinginconcerton31December2015.Fordetails,pleaserefertotheannouncementoftheCompanyon5January2016-Announcementontheagreementofpersonsactinginconcertsignedbyshareholders.Theannouncementnumberis2016-1(.com.cn/).2.Inaddition,whetherthereisanassociationbetweentheremainingshareholdersortheybelongtopersonsactinginconcertisunknown.Shareholdingsofthetop10non-restrictedcommonshareholdersNameofshareholderNumberofnon-restrictedcommonsharesheldinbytheendofthereportingperiodTypeofsharesTypeNumberLuzhouLaojiaoGroupCo.,Ltd.381,088,389CNYcommonshares381,088,389LuzhouXingLuInvestmentGroupCo.,Ltd.365,971,142CNYcommonshares365,971,142ChinaSecuritiesFinanceCorporationlimited33,842,059CNYcommonshares33,842,059HongKongSecuritiesClearing28,902,451CNYcommon28,902,4512020InterimReportofLuzhouLaojiaoCo.,Ltd.38CompanyLimitedsharesCentralHuijinAssetManagementCo.,Ltd.20,937,500CNYcommonshares20,937,500BankofChinaCo.,Ltd.–MiddleandsmallcapitalstockshybridsecuritiesinvestmentfundbyEfund19,989,538CNYcommonshares19,989,538AgriculturalBankofChinaCo.,Ltd.-Consumptionindustrystock-basedsecuritiesinvestmentfundbyEfund19,521,463CNYcommonshares19,521,463BankofChinaCo.,Ltd-BlueChipSelectedhybridsecuritiesinvestmentfundbyEfund18,850,032CNYcommonshares18,850,032BankofChinaCo.,Ltd.–LiquorindexclassificationsecuritiesinvestmentfundbyChinaMerchantsFund18,474,494CNYcommonshares18,474,494IndustrialandCommercialBankofChinaCo.,Ltd.-NewlygrowthhybridsecuritiesinvestmentfundbyInvescoGreatWall13,000,000CNYcommonshares13,000,000Thestatementofassociationoracting-in-concertbetweenthetop10shareholdersofunrestrictedcommonsharesandbetweenthetop10shareholdersofcommonunrestrictedsharesandtop10commonshareholdersSeethetableaboveDidanyofthetop10commonshareholdersorthetopnon-restrictedcommonshareholdersoftheCompanyconductanypromissoryrepurchaseduringthereportingperiod.Yes√NoThetop10non-restrictedcommonshareholders,thetop10commonshareholdersdidnotconductanypromissoryrepurchaseduringthereportingperiod.4.ChangeofcontrollingshareholderoractualcontrollerChangeofthecontrollingshareholderduringthereportingperiod2020InterimReportofLuzhouLaojiaoCo.,Ltd.39Applicable√N/ANosuchcasesinthereportingperiodChangeoftheactualcontrollerduringthereportingperiodApplicable√N/ATheactualcontrolleroftheCompanyhasnotchangedduringthereportingperiod.2020InterimReportofLuzhouLaojiaoCo.,Ltd.40SectionVIIPreferenceSharesApplicable√N/ANopreferredstockintheCompanyduringthereportingperiod.2020InterimReportofLuzhouLaojiaoCo.,Ltd.41SectionVIIIInformationaboutConvertibleCorporateBondApplicable√N/ANoconvertiblecorporatebondintheCompanyduringthereportingperiod.2020InterimReportofLuzhouLaojiaoCo.,Ltd.42SectionIXProfilesofDirectors,SupervisorsandSeniorManagement1.Changesinsharesheldbydirectors,supervisors,andseniormanagementApplicable√N/ANochangesoccurredtosharesheldbydirectors,supervisorsandseniormanagementinthereportingperiod.Seethe2019AnnualReportformoredetails.2.Changesindirectors,supervisors,andseniormanagement√Applicable□N/ANameTypeDateReasonJiangYuhuiDeputygeneralmanagerAppoint2020.1.10AppointedWuQinDeputygeneralmanagerAppoint2020.1.10Appointed2020InterimReportofLuzhouLaojiaoCo.,Ltd.43SectionXInformationaboutCorporateBondWhetherthereexistsapublicissueandlistingofcorporatebondthatisnotyetdueorfailedtoberedeemedatthedateoftheinterimreportauthorized.Yes1.BasicinformationaboutthecorporatebondNameAbbr.CodeIssuedateDuedateBondbalance(CNY10,000)InterestrateWayofredemption2019PublicOfferingofCorporateBondofLuzhouLaojiaoCo.,Ltd.forQualifiedInvestors(PhaseI)19LaoJiao01112959.SZ27August201928August2024250,0003.58%Intermsofthebondsofthisphase,interestswillbepaidbyyearandtheprincipalwillberepaidinlumpsumatmaturity.Theinterestswillbepaidonceeveryyearandtheinterestsforthelastinstallmentwillbepaidtogetherwiththeprincipal.2020PublicOfferingofCorporateBondofLuzhouLaojiaoCo.,Ltd.forQualifiedInvestors(PhaseI)20LaoJiao01149062.SZ17March202017March2025150,0003.50%Intermsofthebondsofthisphase,interestswillbepaidbyyearandtheprincipalwillberepaidinlumpsumatmaturity.Theinterestswill2020InterimReportofLuzhouLaojiaoCo.,Ltd.44bepaidonceeveryyearandtheinterestsforthelastinstallmentwillbepaidtogetherwiththeprincipal.ListedortransferredtradingplaceofcorporatebondShenzhenStockExchangeAppropriatearrangementoftheinvestorsThebondsareapplicabletoeligibleinvestorswhohavequalifiedsecuritiesaccountswithShenzhenBranchofChinaSecuritiesDepositoryandClearingCo.,Ltd.,arepermittedtoengageinthesubscriptionandtransferofcorporatebondsinaccordancewiththeManagementMeasuresfortheIssueandTransactionManagementofCorporateBonds,ManagementMeasuresfortheSuitabilityofSecuritiesandFuturesInvestors,ManagementMeasuresofShenzhenStockExchangefortheSuitabilityofSecuritiesMarketInvestors,andrelevantlawsandregulations,andhavethecorrespondingriskidentificationandbearingcapacity(excludingthoseprohibitedbylawsandregulations)Interestpaymentduringthereportingperiod“19LaoJiao01”and“20LaoJiao02”havenotreachedtheinterestspaymentperiodbytheendof30June2020.Executionoftherelevantregulationsduringthereportingperiodsuchastheaffiliatedoptionclauseoftheissuersorinvestors,specialclausessuchastheexchangeableregulationsofcorporatebond(ifapplicable)Thetermof“19LaoJiao01”isfiveyearswiththeissuer’soptionforadjustmenttothestatedinterestrateandtheinvestor’soptionforsellbackattheendofthe3rdyear2.ListofthebondtrusteeandtheratingorganizationBondtrustee:NameChinaInternationalCapitalCorporationLimited.Officeaddress27thand28thFloor,ChinaWorldOffice2,No.1JianguomenwaiAvenue,ChaoyangDistrict,ContactpersonXieCi,QiQinContactnumber(010)650511662020InterimReportofLuzhouLaojiaoCo.,Ltd.45BeijingRatingorganizationexecutedthetrackingratingofthecorporatebondsofthereportingperiod:NameChinaChengxinInternationalCreditRatingCo.,Ltd.OfficeaddressBuilding6,GalaxySOHO,No.2Nanzhuganhutong,ChaoyangmenneiAvenue,DongchengDistrict,BeijingAlternationreasons,executionprocessandinfluencesontheinvestors’interestsetc.iftherewasalternationofthebondtrusteesandthecreditratingagenciesengagedbytheCompanyduringthereportingperiod(ifapplicable)N/A3.Informationaboutusageoffund-raisingofthecorporatebondInformationaboutusageoffund-raisingandtheexecutionprocessofcorporatebondTheCompanyraisedafundofCNY4.0billionthroughtheissueofcorporatebondsrespectivelyon27August2019and17March2020.Afterdeductionoftheissuefees,thebalanceamountwassettouseinthetechnicalrenovationprojectofbrewing(PhaseII),ProjectofIntelligentUpgradingandBuildingoftheInformationManagementSystem,ProjectofAcquiringSealingEquipmentfortheCellarofHuangyiBrewingBaseandProjectofAcquiringAccessoryEquipmentforLeavenMakingforHuangyiBrewingBase.Asof30June2020,CNY2,003,815,000ofthefund-raisingthroughtheissueofcorporatebondshadbeenused.Closingbalance(CNY10,000)200,722.61Operatingsituationofthefund-raisingspecialaccountInaccordancewithrelatedlawsandregulations,theCompanyhasdesignatedseveralaccountsspecificallyforfundraisingtoreceive,depositandtransferfundsraisedthroughtheissueofcorporatebondsandpayinterestsandprincipals.Detailsofthesebankaccountsareasfollows:(1)accountname:LuzhouLaojiaoCo.,Ltd.bank:CGBChengduBranchaccountnumber:9550880046723000135(2)accountname:LuzhouLaojiaoCo.,Ltd.bank:BankofCommunicationsLuzhouBranchaccountnumber:517517460013000000860(3)accountname:LuzhouLaojiaoCo.,Ltd.bank:CMBCChengduFuchengAvenueBranchaccountnumber:028900140410888(4)accountname:LuzhouLaojiaoCo.,Ltd.2020InterimReportofLuzhouLaojiaoCo.,Ltd.46bank:ChinaMinshengBankChengduBranchaccountnumber:631395395TheCompanyhassignedathird-partyregulationagreementwitheachbankandthetrustee.Whethertheusageofthefund-raisingmetwiththeusage,usingplanandotheragreementscommittedontheprospectusTheusageofthefund-raisingmetwiththeusagecommittedontheprospectusNote:1Includingtheinterestoffund-raising4.RatingsituationofcorporatebondinformationOn15August2019,ChinaChengxinSecuritiesRatingCo.,Ltd.issuedacreditratingreportfor“19LaoJiao01”.TheCompany’smainbodyhasacreditratingofAAAandastableratingoutlook;thebond’screditratingisAAA.On2March2020,ChinaChengxinInternationalCreditRatingCo.,Ltd.issuedacreditratingreportfor“20LaoJiao01”.TheCompany’smainbodyhasacreditratingofAAAandastableratingoutlook;thebond’screditratingisAAA.On28June2020,ChinaChengxinSecuritiesRatingCo.,Ltd.issuedatrackingratingreportin2020for“19LaoJiao01”and“20LaoJiao01”,maintainedthecreditratingofAAAfortheCompany’smainbodyandastableratingoutlookaswellasthecreditratingofAAAfor“19LaoJiao01”and“20LaoJiao01”.5.Credit-addingmechanism,repaymentplanandotherrepaymentguaranteemeasuresofthecorporatebondNotapplicable6.InformationaboutconveningofthebondholdersmeetingduringthereportingperiodTheCompanydidnotconvenebondholdersmeetingduringthereportingperiod.7.InformationaboutdutyexecutionofbondtrusteeduringthereportingperiodDuringthevalidityofthecorporatebond,thetrusteeperformedcontinuoustrackingoftheCompany’screditinformationandmanagementandutilizationofthefund-raisingstrictlyinaccordancewiththeBondsTrusteeshipAgreement,urgedtheCompanytofulfillitsobligationsagreedintheprospectusofthecorporatebond,proactivelyexerciseditsdutiesasabondstrusteeandsafeguardedthelegitimate2020InterimReportofLuzhouLaojiaoCo.,Ltd.47rightsandinterestsofthebondholders.CICCproducedaninterimreportonthetrusteeshipaffairsfortheCompany’sinvolvementofsignificantlitigationrespectivelyon17April2020and12May2020anddiscloseditsynchronouslyoncninfo(.CICCproducedthe2019reportonthetrusteeshipaffairson30June2020anddiscloseditsynchronouslyoncninfo(.8.ThemajoraccountingdataandthefinancialindicatorsoftheCompanyasoftheendofthereportingperiodandoftheendoflastyear(orthereportingperiodandthesameperiodoflastyear)Item30June202030June2019YoYchangeCurrentratio251.74%240.36%11.38%Asset-liabilityratio35.62%32.38%3.24%Quickratio196.90%184.48%12.42%ThereportingperiodThesameperiodoflastyearYoYchangeTimesinterestearnedofEBITDA45.0559.03-23.68%MainreasonoftheaboveaccountingdataandthefinancialindicatorswiththeYoYchangeexceeded30%Applicable√N/A9.OverduepaymentApplicable√N/ANooverduepaymentduringthereportingperiod.10.InformationaboutinterestpaymentofotherbondsanddebtfinancinginstrumentsduringthereportingperiodNotapplicable11.Informationaboutacquiredbankcreditlines,usageandrepaymentofthebankloansduringthereportingperiodNotapplicable2020InterimReportofLuzhouLaojiaoCo.,Ltd.4812.Informationabouttheexecutionoftheagreementsorthecommitmentsrelatedtothecorporatebondfund-raisingspecificationduringthereportingperiodDuringthereportingperiod,theCompanyusedtheraisedfundsstrictlyaccordingtotheagreementsrelatedtothecorporatebondfund-raisingspecification.13.SignificanteventsoccurringduringthereportingperiodNosignificanteventsduringthereportingperiod.14.Whethertherewasguarantorofthecorporatebond□Yes√No2020InterimReportofLuzhouLaojiaoCo.,Ltd.49SectionXIFinancialReport1.Auditor’sreportAretheseinterimfinancialstatementsauditedbyanindependentauditor□Yes√NoTheinterimfinancialstatementsarenotauditedbyanindependentauditor.2.FinancialstatementsMonetaryunitforthefinancialstatementsandthenotesthereto:CNYPreparedby:LuzhouLaojiaoCo.,Ltd.ConsolidatedbalancesheetAsat30June2020MonetaryUnit:CNYItemBalanceasat30June2020Balanceasat31December2019Currentassets:Cashandcashequivalents10,933,749,651.469,753,666,526.78SettlementreservesLendingfundsHeld-for-tradingfinancialassetsDerivativefinancialassetsNotesreceivablesAccountsreceivables5,545,439.8018,293,914.23Accountsreceivablesfinancing2,855,987,446.812,393,797,259.80Prepayment163,698,852.80151,818,448.48PremiumsreceivableReinsuranceaccountsreceivableReinsurancecontractreserveOtherreceivables205,474,170.86159,753,421.64Including:Interestsreceivable67,318,644.4445,636,744.44Dividendsreceivable30,114,991.30Buyingbackthesaleoffinancialassets2020InterimReportofLuzhouLaojiaoCo.,Ltd.50Inventories3,805,416,004.073,641,235,092.33ContractassetsAssetsheldforsaleNon-currentassetsduewithinoneyearOthercurrentassets249,589,311.90195,174,048.57Totalcurrentassets18,219,460,877.7016,313,738,711.83Non-currentassets:DisbursementofloansandadvancesInvestmentsindebtobligationsInvestmentsinotherdebtobligationsLong-termreceivablesLong-termequityinvestments2,311,188,426.502,230,721,725.72Investmentsinotherequityinstruments354,466,613.35352,395,255.78Othernon-currentfinancialassetsInvestmentpropertyFixedassets2,834,118,122.341,518,865,397.91Constructioninprogress7,066,117,415.737,257,393,087.56ProductivebiologicalassetsOilandgasassetsUserightassetsIntangibleassets437,890,503.22332,234,032.47DevelopmentexpensesGoodwillLong-termdeferredexpenses2,726,918.71928,805.23Deferredtaxassets491,392,575.44676,152,614.07Othernon-currentassets40,853,089.81237,539,447.75Totalnon-currentassets13,538,753,665.1012,606,230,366.49Totalassets31,758,214,542.8028,919,969,078.32Currentliabilities:Short-termloansBorrowingsfromthecentralbankLoansfromotherbanks2020InterimReportofLuzhouLaojiaoCo.,Ltd.51Held-for-tradingfinancialliabilitiesDerivativefinancialliabilitiesNotespayable6,825,905.98Accountspayable2,030,319,305.161,868,623,958.02Advancefromcustomer2,244,442,643.64Contractliabilities588,278,202.31FinancialassetssoldforrepurchaseDepositsfromcustomersandinter-bankCustomerbrokeragedepositsSecuritiesunderwritingbrokeragedepositsEmployeebenefitspayable363,794,712.74342,025,687.49Taxespayable1,188,292,358.231,633,044,231.67Otherpayable2,988,320,565.30698,942,399.37Including:Interestspayable90,135,616.4430,650,684.93Dividendspayable2,328,956,436.84HandlingchargesandcommissionspayableReinsuranceaccountspayableLiabilitiesheldforsaleNon-currentliabilitiesduewithinoneyearOthercurrentliabilities71,461,894.52Totalcurrentliabilities7,237,292,944.246,787,078,920.19Non-currentliabilities:InsurancecontractreservesLong-termloansBondspayable3,986,319,687.092,490,883,676.39Including:PreferencesharesPerpetualbondsLeaseliabilitiesLong-termpayablesLong-termpayrollpayablesAccruedliabilities2020InterimReportofLuzhouLaojiaoCo.,Ltd.52Deferredincome23,345,000.0023,845,000.00Deferredtaxliabilities63,948,293.0563,430,453.64Othernon-currentliabilitiesTotalnon-currentliabilities4,073,612,980.142,578,159,130.03Totalliabilities11,310,905,924.389,365,238,050.22Owners'equitySharecapital1,464,752,476.001,464,752,476.00OtherequityinstrumentsIncluding:preferencesharesPerpetualbondsCapitalreserves3,722,777,063.133,722,777,063.13Less:treasurystockOthercomprehensiveincome196,669,728.76194,817,130.57SpecialreservesSurplusreserves1,464,752,476.001,464,752,476.00GeneralriskreserveUndistributedprofits13,451,242,333.3412,559,746,579.91Totalequityattributabletoownersoftheparentcompany20,300,194,077.2319,406,845,725.61Non-controllinginterests147,114,541.19147,885,302.49Totalowners'equity20,447,308,618.4219,554,731,028.10Totalliabilitiesandowners'equity31,758,214,542.8028,919,969,078.32Legalrepresentative:LiuMiaoPersoninchargeofaccountingaffairs:XieHongPersoninchargeofaccountingdepartment:YanLiBalancesheetofparentcompanyAsat30June2020MonetaryUnit:CNYItemBalanceasat30June2020Balanceasat31December2019Currentassets:Cashandcashequivalents9,880,433,674.318,872,692,385.79Held-for-tradingfinancialassetsDerivativefinancialassetsNotesreceivables2020InterimReportofLuzhouLaojiaoCo.,Ltd.53Accountsreceivables915,332.7121,562.85AccountsreceivablesfinancingPrepayment17,878,055.7111,682,593.27Otherreceivables7,526,535,796.065,850,481,480.50Including:Interestsreceivable111,388,492.4040,570,144.44Dividendsreceivable30,114,991.30Inventories1,646,163.021,049,384.24ContractassetsAssetsheldforsaleNon-currentassetsduewithinoneyearOthercurrentassets10,549,321.255,562,360.72Totalcurrentassets17,437,958,343.0614,741,489,767.37Non-currentassets:InvestmentsindebtobligationsInvestmentsinotherdebtobligationsLong-termreceivablesLong-termequityinvestments5,717,148,554.615,636,681,853.83Investmentsinotherequityinstruments354,137,691.72352,066,334.15Othernon-currentfinancialassetsInvestmentpropertyFixedassets534,607,551.77601,481,983.81Constructioninprogress1,006,518,048.07967,953,263.55ProductivebiologicalassetsOilandgasassetsUserightassetsIntangibleassets292,071,257.27297,830,285.02DevelopmentexpensesGoodwillLong-termdeferredexpenses2,588,888.01777,834.15Deferredtaxassets84,821,454.7575,249,717.72Othernon-currentassetsTotalnon-currentassets7,991,893,446.207,932,041,272.23Totalassets25,429,851,789.2622,673,531,039.602020InterimReportofLuzhouLaojiaoCo.,Ltd.54Currentliabilities:Short-termloansHeld-for-tradingfinancialliabilitiesDerivativefinancialliabilitiesNotespayableAccountspayable76,577,965.3587,652,671.29Advancefromcustomer9,712,630.35Contractliabilities17,169,582.79Employeebenefitspayable129,254,089.35116,124,722.19Taxespayable96,865,083.4382,399,599.18Otherpayables4,334,854,219.021,099,598,588.83Including:Interestspayable90,135,616.4430,650,684.93Dividendspayable2,328,956,436.84LiabilitiesheldforsaleNon-currentliabilitiesduewithinoneyearOthercurrentliabilities2,232,045.77Totalcurrentliabilities4,656,952,985.711,395,488,211.84Non-currentliabilities:Long-termloansBondspayable3,986,319,687.092,490,883,676.39Including:PreferencesharesPerpetualbondsLeaseliabilitiesLong-termpayablesLong-termpayrollpayablesAccruedliabilitiesDeferredincome2,380,000.002,380,000.00Deferredtaxliabilities63,948,293.0563,430,453.64Othernon-currentliabilitiesTotalnon-currentliabilities4,052,647,980.142,556,694,130.03Totalliabilities8,709,600,965.853,952,182,341.87Owners'equitySharecapital1,464,752,476.001,464,752,476.002020InterimReportofLuzhouLaojiaoCo.,Ltd.55OtherequityinstrumentsIncluding:preferencesharesPerpetualbondsCapitalreserves3,706,816,950.123,706,816,950.12Less:treasurystockOthercomprehensiveincome200,129,191.89192,332,738.05SpecialreservesSurplusreserves1,464,752,476.001,464,752,476.00Undistributedprofits9,883,799,729.4011,892,694,057.56Totalowners'equity16,720,250,823.4118,721,348,697.73Totalliabilitiesandowners'equity25,429,851,789.2622,673,531,039.60ConsolidatedincomestatementMonetaryUnit:CNYItemH12020H120191.Totaloperatingrevenue7,634,482,901.878,013,035,019.72Including:Operatingrevenue7,634,482,901.878,013,035,019.72InterestincomeEarnedpremiumFeeandcommissionincome2.Totaloperatingcosts3,461,876,189.004,458,613,035.17Including:Costofsales1,386,636,428.851,626,443,132.19InterestexpenseHandlingchargesandcommissionexpensesRefundedpremiumsNetpaymentsforinsuranceclaimsNetprovisionforinsurancecontractsBondinsuranceexpenseReinsuranceExpensesTaxesandsurcharges679,513,830.821,027,010,927.88Sellinganddistribution1,111,958,208.981,538,501,721.212020InterimReportofLuzhouLaojiaoCo.,Ltd.56expensesGeneralandadministrativeexpenses360,013,975.76340,569,422.14ResearchandDevelopmentexpenses32,028,581.2822,297,485.65Financialexpenses-108,274,836.69-96,209,653.90Including:Interestexpenses66,532,174.9964,806,647.95Interestincome173,389,442.03160,388,809.43Plus:Otherincome10,441,675.2717,293,543.26Investmentincome("-"forlosses)104,338,756.4097,024,631.16Including:incomefrominvestmentinassociatesandjointventures94,958,932.0488,275,961.45Incomefromthederecognitionoffinancialassetsmeasuredatamortizedcost(“-”forlosses)Foreignexchangegains("-"forlosses)Netgainonexposurehedges(“-”forlosses)Gainsfromthechangesinfairvalues(“-“forlosses)Creditimpairmentlosses(“-”forlosses)-401,066.70-3,835,284.24Impairmentlosses(“-“forlosses)Gainsfromdisposalofassets("-"forlosses)104,663.83248,064.823.Operatingprofits("-"forlosses)4,287,090,741.673,665,152,939.55Plus:non-operatingincome10,944,441.7117,760,567.89Less:non-operatingexpenses39,217,386.085,069,812.914.Totalprofitsbeforetax("-"fortotallosses)4,258,817,797.303,677,843,694.53Less:incometaxexpenses1,034,276,363.11898,232,269.305.Netprofit("-"fornetloss)3,224,541,434.192,779,611,425.232020InterimReportofLuzhouLaojiaoCo.,Ltd.575.1Byoperatingcontinuity5.1.1Netprofitfromcontinuingoperation("-"forlosses)3,224,541,434.192,779,611,425.235.1.2Netprofitfromdiscontinuedoperation("-"forlosses)5.2Byownership1)Attributabletoownersoftheparentcompany3,220,452,190.272,749,781,041.422)Attributabletonon-controllinginterests4,089,243.9229,830,383.816.Netoftaxfromothercomprehensiveincome-3,007,407.0334,428,095.75Netoftaxfromothercomprehensiveincometotheowneroftheparentcompany1,852,598.1934,416,541.616.1Othercomprehensiveincomecannotreclassifiedintotheprofitandloss:1,553,518.1627,648,251.011)Remeasurethevariationofnetindebtednessornetassetofdefinedbenefitplans2)Shareinothercomprehensiveincomethatcannotbeclassifiedintoprofitandlossunderequitymethod3)Changesinfairvalueofinvestmentsinotherequityinstruments1,553,518.1627,648,251.014)Changesinfairvalueofthecompany’screditrisks5)Other6.2Othercomprehensiveincomethatwillbereclassifiedintotheprofitandloss299,080.036,768,290.601)Shareinothercomprehensiveincomethatwillbeclassifiedintoprofitandlossunderequitymethod6,242,935.686,679,104.792)Changesinfairvalueofinvestmentsinotherdebtobligations3)Othercomprehensiveincome2020InterimReportofLuzhouLaojiaoCo.,Ltd.58arisingfromthereclassificationoffinancialassets4)Allowanceforcreditimpairmentsininvestmentsinotherdebtobligations5)Reserveforcash-flowhedge6)Balancearisingfromthetranslationofforeigncurrencyfinancialstatements-5,943,855.6589,185.817)OthersNetoftaxfromothercomprehensiveincometonon-controllinginterests-4,860,005.2211,554.147.Totalcomprehensiveincome3,221,534,027.162,814,039,520.98Totalcomprehensiveincomeattributabletoownersoftheparentcompany3,222,304,788.462,784,197,583.03Totalcomprehensiveincomeattributabletonon-controllinginterests-770,761.3029,841,937.958.Earningspershare(1)Basicearningspershare2.201.88(2)Dilutedearningspershare2.201.88Legalrepresentative:LiuMiaoPersoninchargeofaccountingaffairs:XieHongPersoninchargeofaccountingdepartment:YanLiIncomestatementofparentcompanyMonetaryUnit:CNYItemH12020H120191.Operatingrevenue1,502,921,693.392,447,219,300.12Less:Costofsales1,040,786,248.301,621,162,415.45Taxesandsurcharges15,549,764.9225,151,156.04SellinganddistributionexpensesGeneralandadministrativeexpenses274,620,160.19286,401,299.53ResearchandDevelopmentexpenses9,011,286.246,268,987.512020InterimReportofLuzhouLaojiaoCo.,Ltd.59Financialexpenses-131,445,866.38-103,760,837.11Including:Interestexpenses33,323,418.699,270,944.42Interestincome164,861,694.13113,078,683.00Plus:Otherincome6,812,036.0210,186,492.26Investmentincome("-"forlosses)104,338,756.4097,024,631.16Including:incomefrominvestmentinassociatesandjointventures94,958,932.0488,275,961.45Incomefromthederecognitionoffinancialassetsatamortizedcost(“-”forlosses)Netgainonexposurehedges(“-”forlosses)Gainsfromthechangesinfairvalues(“-“forlosses)Creditimpairmentlosses(“-”forlosses)-44,132.47-177,197.13Assetimpairmentlosses(“-”forlosses)Gainsfromdisposalofassets("-"forlosses)104,663.83108,159.282.Operatingprofits("-"forlosses)405,611,423.90719,138,364.27Plus:non-operatingincome8,883,565.154,646,619.50Less:non-operatingexpenses24,377,133.784,741,335.983.Totalprofitsbeforetax("-"fortotallosses)390,117,855.27719,043,647.79Less:incometaxexpenses70,055,746.59158,455,510.794.Netprofit("-"fornetloss)320,062,108.68560,588,137.004.1Netprofitfromcontinuingoperation("-"forlosses)320,062,108.68560,588,137.004.2Netprofitfromdiscontinuedoperation("-"forlosses)5.Netoftaxfromothercomprehensiveincome7,796,453.8434,327,355.805.1Othercomprehensiveincomecannotreclassifiedintotheprofitand1,553,518.1627,648,251.012020InterimReportofLuzhouLaojiaoCo.,Ltd.60loss:1)Remeasurethevariationofnetindebtednessornetassetofdefinedbenefitplans2)Shareinothercomprehensiveincomethatcannotbeclassifiedintoprofitandlossunderequitymethod3)Changesinfairvalueofinvestmentsinotherequityinstruments1,553,518.1627,648,251.014)Changesinfairvalueofthecompany’screditrisks5)Other5.2Othercomprehensiveincomethatwillbereclassifiedintotheprofitandloss6,242,935.686,679,104.791)Shareinothercomprehensiveincomethatwillbeclassifiedintoprofitandlossunderequitymethod6,242,935.686,679,104.792)Changesinfairvalueofinvestmentsinotherdebtobligations3)Othercomprehensiveincomearisingfromthereclassificationoffinancialassets4)Allowanceforcreditimpairmentsininvestmentsinotherdebtobligations5)Reserveforcash-flowhedge6)Balancearisingfromthetranslationofforeigncurrencyfinancialstatements7)Others6.Totalcomprehensiveincome327,858,562.52594,915,492.807.Earningspershare(1)Basicearningspershare0.220.38(2)Dilutedearningspershare0.220.382020InterimReportofLuzhouLaojiaoCo.,Ltd.61ConsolidatedstatementofcashflowsMonetaryUnit:CNYItemH12020H120191.CashflowsfromoperatingactivitiesCashreceivedfromsaleofgoodsandrenderingofservices6,282,235,240.808,152,078,438.66NetincreaseincustomerbankdepositsandplacementfrombanksandotherfinancialinstitutionsNetincreaseinloansfromcentralbankNetincreaseinloansfromotherfinancialinstitutionsPremiumsreceivedfromoriginalinsurancecontractsNetcashreceivedfromreinsurancebusinessNetincreaseindepositsandinvestmentsfrompolicyholdersCashreceivedfrominterest,handlingchargesandcommissionsNetincreaseinplacementsfromotherfinancialinstitutionsNetcapitalincreaseinrepurchasebusinessNetcashreceivedfromcustomerbrokeragedepositsRefundsoftaxesandsurcharges3,846,942.761,532,457.12Cashreceivedfromotheroperatingactivities218,878,679.44219,496,515.99Subtotalofcashinflowsfromoperatingactivities6,504,960,863.008,373,107,411.77Cashpaidforgoodspurchasedandservicesreceived1,510,115,362.002,049,373,923.84NetincreaseinloansandadvancestocustomersNetincreaseindepositsincentral2020InterimReportofLuzhouLaojiaoCo.,Ltd.62bankandotherbanksandfinancialinstitutionsCashpaidfororiginalinsurancecontractclaimsNetincreaseinlendingfundsCashpaidforinterests,handlingchargesandcommissionsCashpaidforpolicydividendsCashpaidtoandonbehalfofemployees433,219,103.00457,570,946.93Cashpaidfortaxesandsurcharges2,718,765,468.223,080,471,348.44Cashpaidforotheroperatingactivities1,114,045,507.541,078,940,602.22Subtotalofcashoutflowsfromoperatingactivities5,776,145,440.766,666,356,821.43Netcashflowsfromoperatingactivities728,815,422.241,706,750,590.342.CashflowsfrominvestingactivitiesCashreceivedfromdisposalofinvestmentsCashreceivedfromreturnsoninvestmentsNetcashreceivedfromdisposaloffixedassets,intangibleassetsandotherlong-termassets566,471.43493,622.28NetcashreceivedfromdisposalofsubsidiariesandotherbusinessunitsCashreceivedfromotherinvestingactivitiesSubtotalofcashinflowsfrominvestingactivities566,471.43493,622.28Cashpaidtoacquireandconstructfixedassets,intangibleassetsandotherlong-termassets1,050,741,288.781,370,295,598.24CashpaidforinvestmentsNetincreaseinpledgeloans2020InterimReportofLuzhouLaojiaoCo.,Ltd.63NetcashpaidtoacquiresubsidiariesandotherbusinessunitsCashpaidforotherinvestingactivitiesSubtotalofcashoutflowsfrominvestingactivities1,050,741,288.781,370,295,598.24Netcashflowsfrominvestingactivities-1,050,174,817.35-1,369,801,975.963.CashflowsfromfinancingactivitiesCashreceivedfrominvestors5,621,368.053,500,000.00Including:cashreceivedbysubsidiariesfrominvestmentsbyminorityshareholders5,621,368.053,500,000.00Cashreceivedfromborrowings1,494,000,000.00CashreceivedfromotherfinancingactivitiesSubtotalofcashinflowsfromfinancingactivities1,499,621,368.053,500,000.00CashpaidfordebtrepaymentsCashpaidfordistributionofdividendsandprofitsorpaymentofinterestIncluding:dividendsandprofitspaidtominorityshareholdersbysubsidiariesCashpaidforotherfinancingactivities180,000.0010,149,100.00Subtotalofcashoutflowsfromfinancingactivities180,000.0010,149,100.00Netcashflowsfromfinancingactivities1,499,441,368.05-6,649,100.004.Effectoffluctuationinexchangerateoncashandcashequivalents2,001,151.741,307,694.735.Netincreaseincashandcashequivalents1,180,083,124.68331,607,209.11Plus:balanceofcashandcash9,752,266,526.789,365,986,627.682020InterimReportofLuzhouLaojiaoCo.,Ltd.64equivalentsatthebeginningoftheperiod6.Balanceofcashandcashequivalentsattheendoftheperiod10,932,349,651.469,697,593,836.79CashflowstatementsofparentcompanyMonetaryUnit:CNYItemH12020H120191.CashflowsfromoperatingactivitiesCashreceivedfromsaleofgoodsandrenderingofservices1,704,864,696.112,505,459,765.21RefundsoftaxesandsurchargesCashreceivedfromotheroperatingactivities190,974,553.30144,617,971.84Subtotalofcashinflowsfromoperatingactivities1,895,839,249.412,650,077,737.05Cashpaidforgoodspurchasedandservicesreceived358,716,633.541,626,982,937.71Cashpaidtoandonbehalfofemployees407,927,258.16432,617,691.04Cashpaidfortaxesandsurcharges150,445,400.43266,688,773.22Cashpaidforotheroperatingactivities1,375,167,996.4371,483,657.64Subtotalofcashoutflowsfromoperatingactivities2,292,257,288.562,397,773,059.61Netcashflowsfromoperatingactivities-396,418,039.15252,304,677.442.CashflowsfrominvestingactivitiesCashreceivedfromdisposalofinvestmentsCashreceivedfromreturnsoninvestmentsNetcashreceivedfromdisposaloffixedassets,intangibleassetsandotherlong-termassets566,471.43487,222.282020InterimReportofLuzhouLaojiaoCo.,Ltd.65NetcashreceivedfromdisposalofsubsidiariesandotherbusinessunitsCashreceivedfromotherinvestingactivitiesSubtotalofcashinflowsfrominvestingactivities566,471.43487,222.28Cashpaidtoacquireandconstructfixedassets,intangibleassetsandotherlong-termassets90,227,143.7697,098,339.93Cashpaidforinvestments10,149,100.00NetcashpaidtoacquiresubsidiariesandotherbusinessunitsCashpaidforotherinvestingactivitiesSubtotalofcashoutflowsfrominvestingactivities90,227,143.76107,247,439.93Netcashflowsfrominvestingactivities-89,660,672.33-106,760,217.653.CashflowsfromfinancingactivitiesCashreceivedfrominvestorsCashreceivedfromloans1,494,000,000.00CashreceivedfromotherfinancingactivitiesSubtotalofcashinflowsfromfinancingactivities1,494,000,000.00CashpaidfordebtrepaymentsCashpaidfordistributionofdividendsandprofitsorpaymentofinterestCashpaidforotherfinancingactivities180,000.00Subtotalofcashoutflowsfromfinancingactivities180,000.00Netcashflowsfromfinancingactivities1,493,820,000.002020InterimReportofLuzhouLaojiaoCo.,Ltd.664.Effectoffluctuationinexchangerateoncashandcashequivalents5.Netincreaseincashandcashequivalents1,007,741,288.52145,544,459.79Plus:balanceofcashandcashequivalentsatthebeginningoftheperiod8,872,692,385.796,189,473,157.836.Balanceofcashandcashequivalentsattheendoftheperiod9,880,433,674.316,335,017,617.62Consolidatedstatementofchangesinowners'equityForthesixmonthsended30June2020MonetaryUnit:CNYItemH12020EquityattributabletoownersoftheparentcompanyNon-controllinginterestsTotalowners'equitySharecapitalOtherequityinstrumentsCapitalreserveLess:TreasurystockOtherComprehensiveIncomeSpecialreserveSurplusreserveGeneralriskreserveUndistributedprofitOtherSubtotalPreferredstockPerpetualbondOther1.Balanceasat31Decemberoflastyear1,464,752,476.003,722,777,063.13194,817,130.571,464,752,476.0012,559,746,579.9119,406,845,725.61147,885,302.4919,554,731,028.10Plus:adjustmentsforchangesinaccountingpoliciesAdjustmentsforcorrectionofaccountingerrorsinprioryearBusinesscombinations2020InterimReportofLuzhouLaojiaoCo.,Ltd.67undercommoncontrolOthers2.Balanceasat1Januaryofthecurrentyear1,464,752,476.003,722,777,063.13194,817,130.571,464,752,476.0012,559,746,579.9119,406,845,725.61147,885,302.4919,554,731,028.103.Increases/decreasesinthecurrentperiod(“-”fordecreases)1,852,598.19891,495,753.43893,348,351.62-770,761.30892,577,590.32(1)Totalcomprehensiveincome1,852,598.193,220,452,190.273,222,304,788.46-770,761.303,221,534,027.16(2)CapitalcontributedorreducedbyownersCapitalcontributionsbyownersCapitalcontributionsbyotherequityinstrumentsholdersAmountsofshare-basedpaymentsrecognizedinowners'equityOthers(3)Profitdistribution-2,328,956,436.84-2,328,956,436.84-2,328,956,436.84WithdrawalofsurplusreservesWithdrawalofgeneralrisk2020InterimReportofLuzhouLaojiaoCo.,Ltd.68reserveProfitdistributedtoowners(orshareholders)-2,328,956,436.84-2,328,956,436.84-2,328,956,436.84Others(4)Internalcarry-forwardofowners'equityConversionofcapitalreservesintopaid-incapitalConversionofsurplusreservesintopaid-incapitalSurplusreservesoffsettinglossesCarry-forwardofretainedearningsfromchangesindefinedbenefitplansCarry-forwardofretainedearningsfromothercomprehensiveincomeOthers(5)SpecialreservesWithdrawalfortheperiodUsefortheperiod2020InterimReportofLuzhouLaojiaoCo.,Ltd.69(6)Others4.Balanceasat30Juneofthecurrentyear1,464,752,476.003,722,777,063.13196,669,728.761,464,752,476.0013,451,242,333.3420,300,194,077.23147,114,541.1920,447,308,618.42Forthesixmonthsended30June2019MonetaryUnit:CNYItemH12019EquityattributabletoownersoftheparentcompanyNon-controllinginterestsTotalowners'equitySharecapitalOtherequityinstrumentsCapitalreserveLess:TreasurystockOtherComprehensiveIncomeSpecialreserveSurplusreserveGeneralriskreserveUndistributedprofitOtherSubtotalPreferredstockPerpetualbondOther1.Balanceasat31Decemberoflastyear1,464,752,476.003,716,675,022.48136,592,276.641,464,752,476.0010,181,899,224.8416,964,671,475.96159,541,143.0317,124,212,618.99Plus:adjustmentsforchangesinaccountingpolicies33,689,709.065,752,926.3739,442,635.4339,442,635.43AdjustmentsforcorrectionofaccountingerrorsinprioryearBusinesscombinationsundercommoncontrolOthers2.Balanceasat1Januaryofthecurrentyear1,464,752,476.003,716,675,022.48170,281,985.701,464,752,476.0010,187,652,151.2117,004,114,111.39159,541,143.0317,163,655,254.422020InterimReportofLuzhouLaojiaoCo.,Ltd.703.Increases/decreasesinthecurrentperiod(“-”fordecreases)6,102,040.6534,416,541.61479,414,703.62519,933,285.8813,590,797.30533,524,083.18(1)Totalcomprehensiveincome34,416,541.612,749,781,041.422,784,197,583.0329,841,937.952,814,039,520.98(2)CapitalcontributedorreducedbyownersCapitalcontributionsbyownersCapitalcontributionsbyotherequityinstrumentsholdersAmountsofshare-basedpaymentsrecognizedinowners'equityOthers(3)Profitdistribution-2,270,366,337.80-2,270,366,337.80-2,270,366,337.80WithdrawalofsurplusreservesWithdrawalofgeneralriskreserveProfitdistributedtoowners(orshareholders)-2,270,366,337.80-2,270,366,337.80-2,270,366,337.802020InterimReportofLuzhouLaojiaoCo.,Ltd.71Others(4)Internalcarry-forwardofowners'equityConversionofcapitalreservesintopaid-incapitalConversionofsurplusreservesintopaid-incapitalSurplusreservesoffsettinglossesCarry-forwardofretainedearningsfromchangesindefinedbenefitplansCarry-forwardofretainedearningsfromothercomprehensiveincomeOthers(5)SpecialreservesWithdrawalfortheperiodUsefortheperiod(6)Others6,102,040.656,102,040.65-16,251,140.65-10,149,100.004.Balanceasat30Juneof1,464,753,722,777,0204,698,521,464,752,410,667,066,17,524,047,173,131,940.17,697,179,32020InterimReportofLuzhouLaojiaoCo.,Ltd.72thecurrentyear2,476.0063.137.3176.00854.83397.273337.60Statementofchangesinowners'equityofparentcompanyForthesixmonthsended30June2020MonetaryUnit:CNYItemH12020SharecapitalOtherequityinstrumentsCapitalreserveLess:TreasurystockOtherComprehensiveIncomeSpecialreserveSurplusreserveUndistributedprofitOtherTotalowners'equityPreferredstockPerpetualbondOther1.Balanceasat31Decemberoflastyear1,464,752,476.003,706,816,950.12192,332,738.051,464,752,476.0011,892,694,057.5618,721,348,697.73Plus:adjustmentsforchangesinaccountingpoliciesAdjustmentsforcorrectionofaccountingerrorsinprioryearOthers2.BalanceasatJanuary1ofthecurrentyear1,464,752,476.003,706,816,950.12192,332,738.051,464,752,476.0011,892,694,057.5618,721,348,697.733.Increases/decreasesinthecurrentperiod(“-”fordecreases)7,796,453.84-2,008,894,328.16-2,001,097,874.32(1)Othercomprehensiveincome7,796,453.84320,062,108.68327,858,562.52(2)Capital2020InterimReportofLuzhouLaojiaoCo.,Ltd.73contributedorreducedbyownersCapitalcontributionsbyownersCapitalcontributionsbyotherequityinstrumentsholdersAmountsofshare-basedpaymentsrecognizedinowners'equityOthers(3)Profitdistribution-2,328,956,436.84-2,328,956,436.84WithdrawalofsurplusreservesProfitdistributedtoowners(orshareholders)-2,328,956,436.84-2,328,956,436.84Others(4)Internalcarry-forwardofowners'equityConversionofcapitalreservesintopaid-incapitalConversionofsurplusreservesintopaid-incapitalSurplus2020InterimReportofLuzhouLaojiaoCo.,Ltd.74reservesoffsettinglossesCarry-forwardofretainedearningsfromchangesindefinedbenefitplansCarry-forwardofretainedearningsfromothercomprehensiveincomeOthers(5)SpecialreservesWithdrawalfortheperiodUsefortheperiod(6)Others4.Balanceasat30Juneofthecurrentyear1,464,752,476.003,706,816,950.12200,129,191.891,464,752,476.009,883,799,729.4016,720,250,823.41Forthesixmonthsended30June2019MonetaryUnit:CNYItemH12019SharecapitalOtherequityinstrumentsCapitalreserveLess:TreasurystockOtherComprehensiveIncomeSpecialreserveSurplusreserveUndistributedprofitOtherTotalowners'equityPreferredstockPerpetualbondOther1.Balanceasat31Decemberoflastyear1,464,752,476.003,706,816,950.12134,386,305.261,464,752,476.009,285,944,182.3516,056,652,389.732020InterimReportofLuzhouLaojiaoCo.,Ltd.75Plus:adjustmentsforchangesinaccountingpolicies33,988,903.845,354,000.0039,342,903.84AdjustmentsforcorrectionofaccountingerrorsinprioryearOthers2.BalanceasatJanuary1ofthecurrentyear1,464,752,476.003,706,816,950.12168,375,209.101,464,752,476.009,291,298,182.3516,095,995,293.573.Increases/decreasesinthecurrentperiod(“-”fordecreases)34,327,355.80-1,709,778,200.80-1,675,450,845.00(1)Othercomprehensiveincome34,327,355.80560,588,137.00594,915,492.80(2)CapitalcontributedorreducedbyownersCapitalcontributionsbyownersCapitalcontributionsbyotherequityinstrumentsholdersAmountsofshare-basedpaymentsrecognizedinowners'equity2020InterimReportofLuzhouLaojiaoCo.,Ltd.76Others(3)Profitdistribution-2,270,366,337.80-2,270,366,337.80WithdrawalofsurplusreservesProfitdistributedtoowners(orshareholders)-2,270,366,337.80-2,270,366,337.80Others(4)Internalcarry-forwardofowners'equityConversionofcapitalreservesintopaid-incapitalConversionofsurplusreservesintopaid-incapitalSurplusreservesoffsettinglossesCarry-forwardofretainedearningsfromchangesindefinedbenefitplansCarry-forwardofretainedearningsfromothercomprehensiveincomeOthers2020InterimReportofLuzhouLaojiaoCo.,Ltd.77(5)SpecialreservesWithdrawalfortheperiodUsefortheperiod(6)Others4.Balanceasat30Juneofthecurrentyear1,464,752,476.003,706,816,950.12202,702,564.901,464,752,476.007,581,519,981.5514,420,544,448.573.CompanyProfile3.1CompanyOverviewLuzhouLaojiaoCo.,Ltd.(hereinafterreferredtoas"Company"or"theCompany"),formerlyknownasLuzhouLaojiaoBrewery,wasestablishedinMarch1950.On20September1993,LuzhouLaojiaobreweryestablishedajoint-stocklimitedcompanywithfund-raisingexclusivelyfromitsoperationalassets.On25October1993,thepublicofferingofshareswasapprovedbySichuanProvincialPeople'sGovernmentandCSRCwithtwodocumentsofChuanFuHan(1993)No.673andFaShenZi(1993)No.108.Aftertheoffering,thetotalsharecapitalwas86,880,000shares,whichwerelistedandtradedinShenzhenstockexchangeon9May1994.Astheendof31December2004,theCompany'stotalsharecapitalreached841,399,673sharesaftermultiplerightsissues,amongwhichthecontrollingshareholder,StateAssetsManagementBureauofLuzhou(laterrenamedasState-ownedAssetsSupervisionandAdministrationCommissionofLuzhou,hereinafterreferredtoas"SASACofLuzhou")held585,280,800sharesoftheCompany,withashareholdingratioof69.56%.On27October2005,theCompanyimplementedthenon-tradablesharereform.Aftertheimplementation,thetotalsharecapitalremainedunchanged,andtheshareholdingratioofSASACofLuzhoudecreasedfrom69.56%to60.43%.InNovember2006,theCompanyimplementedprivateplacement,andthetotalsharecapitalincreasedfrom841,399,673sharesto871,399,673shares.TheshareholdingratioofSASACofLuzhoudecreasedfrom60.43%to58.35%.Astheendof27February2007,SASACofLuzhousold42,069,983sharesoftheCompany,andafterthesale,itstillheld466,375,156sharesoftheCompany,withitsshareholdingratioreducedto53.52%.On19May2008,theCompanyincreased522,839,803sharesofcapitalstockresultingfromcapital2020InterimReportofLuzhouLaojiaoCo.,Ltd.78reserveandundistributedprofitstransferredtoincreasecapitalstock.Aftertheimplementation,thetotalsharecapitalreached1,394,239,476shares,amongwhich,SASACofLuzhouheld746,200,250sharesoftheCompany,andtheshareholdingratiowasstill53.52%.On3September2009,the300,000,000sharesandthe280,000,000sharesheldbySASACofLuzhouwereseparatelytransferredtoLuzhouLaojiaoGroupCo.,Ltd.(hereinafterreferredtoasthe"LaojiaoGroup")andLuzhouXingLuInvestmentGroupCo.,Ltd.(hereinafterreferredtoasthe"XingluGroup").Afterthetransfer,LaojiaoGroup,XingluGroup,andSASACofLuzhourespectivelyheld300,000,000shares,280,000,000sharesand166,200,250shares.Sofar,LaojiaoGroupbecamethefirstmajorityshareholderandSASACofLuzhouwastheactualcontroller.From6June2012to20November2013,thefirstandsecondphasesoftheCompany'sequityincentiveplanwereexercised.Aftertheexercise,thetotalsharecapitaloftheCompanywaschangedto1,402,252,476shares.On10April2014and18July2016,SASACofLuzhoutransferred81,088,300sharesand84,000,000sharestoLaojiaoGroupandXingluGrouprespectively.Inaddition,LaojiaoGrouphasincreaseditsequitystakethroughthesecondarymarketof13,137,100shares.Sofar,LaojiaoGroup,XingluGroupandSASACofLuzhouheld394,225,489shares,365,971,142sharesand1,111,930sharesrespectively,withtheshareholdingratiosof28.11%,26.10%and0.08%respectively.On23August2017,theCompanyissuedCNY62,500,000ordinaryshares(Ashares)privately,raisingatotalcapitalofCNY3,000,000,000.Aftertheadditionalissuance,thetotalcapitalstockoftheCompanywaschangedto1,464,752,476shares.Inaddition,from2017to2018,LaojiaoGroupdecreased13,137,100sharesthatwereincreasedthroughthesecondarymarketfromApril2014toDecember2015.Aftersharereduction,LaojiaoGroup,XingluGroupandSASACofLuzhouheld381,088,389shares,365,971,142sharesand1,111,930sharesrespectively,withtheshareholdingratiosof26.02%,24.99%and0.08%respectively.LaojiaoGroupstillwasthefirstmajorityshareholderandSASACofLuzhoustillwastheactualcontroller.3.2RegisteredaddressoftheCompany,companytype,andheadquarteraddressRegisteredaddressandheadquarteraddressoftheCompanyarelocatedinSichuanLuzhouLaojiaoSquareandcompanytypeisotherincorporatedcompany(Listed).3.3BusinessnatureoftheCompanyandmainbusinessactivityIndustryoftheCompanyisfoodandbeveragemanufacturingindustry.Themainactivityareresearchanddevelopment,productionandsalesof“NationalCellar1573”,”LuzhouLaojiao”andotherliquorseries.Themainproductsare:“NationalCellar1573Series”,”Century-oldLuzhouLaojiaoJiaolingSeries”,”LuzhouLaojiaoTequ”,”Touqu”,”Erqu”andotherliquorseries.3.4Thenameofthecontrollingshareholderandtheultimatesubstantivecontroller2020InterimReportofLuzhouLaojiaoCo.,Ltd.79ThecontrollingshareholderisLuzhouLaojiaoGroupCo.,Ltd.;theultimatesubstantivecontrolisSASACofLuzhou.3.5ApprovalandsubmissionofthefinancialreportanditsdateThefinancialreportisapprovedandsubmittedbytheboardofdirectorsoftheCompanyon26August2020.3.6Consolidatedfinancialstatementscopeandtheirchanges(1)The28subsidiariesincludedintheconsolidatedfinancialstatementsforthecurrentperiodarelistedasfollows:NameofsubsidiaryAbbreviationShareholdingproportion(%)Votingrights(%)DirectIndirectLuzhouLaojiaoBrewingCo.,Ltd.Brewingcompany100.00100.00LuzhouRedSorghumModernAgriculturalDevelopmentCo.,Ltd.Redsorghumcompany60.0060.00SalesCompanyofLuzhouLaojiaoCo.,Ltd.Salescompany100.00100.00LuzhouLaojiaoNostalgicLiquorMarketingCo.,Ltd.Nostalgiccompany100.00100.00LuzhouLaojiaoCustomLiquorCo.,Ltd.Note1Customliquorcompany15.0060.00LuzhouLaojiaoSelectedSupplyChainManagementCo.,Ltd.Selectedcompany100.00100.00GuangxiLuzhouLaojiaoImportedLiquorIndustryCo.,Ltd.GuangxiImportedLiquorIndustry100.00100.00LuzhouDingliLiquorIndustryCo.,Ltd.Dinglicompany100.00100.00LuzhouDingyiLiquorIndustrySalesCo.,Ltd.Dingyicompany100.00100.00LuzhouDinghaoLiquorIndustrySalesCo.,Ltd.Dinghaocompany100.00100.00LuzhouLaojiaoImportandExporttradeCo.,Ltd.Importandexportcompany100.00100.00LuzhouLaojiaoBodaLiquorIndustryMarketingCo.,Ltd.Bodamarketing75.0075.00LuzhouLaojiaoBoshengHengxiangLiquorSalesCo.,Ltd.BoshengHengxiang100.00100.00LuzhouLaojiaofruitwineindustryCo.,Ltd.Note2Fruitwineindustry41.0060.00MingjiangCo.,Ltd.Mingjiangcompany54.0054.002020InterimReportofLuzhouLaojiaoCo.,Ltd.80LuzhouPinchuangTechnologyCo.,Ltd.Pinchuangcompany100.00100.00LuzhouLaojiaoTourismCultureCo.,Ltd.Tourismculture100.00100.00LuzhouLaojiaoInternationalDevelopment(HongKong)Co.,Ltd.HongKongcompany55.0055.00LuzhouLaojiaoCommercialDevelopment(NorthAmerica)Co.,Ltd.CommercialDevelopment100.00100.00LuzhouLaojiaoElectronicCommerceCo.,Ltd.ElectronicCommerce90.0090.00LuzhouLaojiaoWhitailInnovativeElectronicCommerceCo.,Ltd.WhitailElectronicCommerce100.00100.00LuzhouLaojiaoSelectedElectronicCommerceCo.,Ltd.SelectedElectronicCommerce100.00100.00LuzhouLaojiaoWhitailLiquorIndustryCo.,Ltd.Note3Whitailliquorindustry35.0060.00ChengduTianfuPandaWhitailLiquorIndustryCo.,Ltd.PandaWhitail60.0060.00LuzhouWhitailTongdaoUncleConstellationWineSalesCo.,Ltd.WhitailTongdaoUncle70.0070.00LuzhouBaonuoBiotechnologyCo.,Ltd.Baonuobiotechnology100.00100.00LuzhouLaojiaoHealthLiquorIndustryCo.,Ltd.HealthLiquorIndustry100.00100.00LuzhouLaojiaoHealthSalesCo.,Ltd.Healthsales100.00100.00Note1:AlthoughtheCompanyholdslessthan51%oftheequityofCustomliquorcompany,amongthefivemembersoftheboardofdirectors,theCompanyhassentthreepeople,andthechairmanoftheboard(legalrepresentative)isthedirectorsentbytheCompany.TheCompanyhasactualcontroloverCustomliquorcompany,soitisincludedinthescopeofconsolidation.Note2:AlthoughtheCompanyholdslessthan51%oftheequityofFruitwineindustry,amongthefivemembersoftheboardofdirectors,theCompanyhassentthreepeople,andthechairmanoftheboard(legalrepresentative)isthedirectorsentbytheCompany.TheCompanyhasactualcontroloverFruitwineindustry,soitisincludedinthescopeofconsolidation.Note3:AlthoughtheCompanyholdslessthan51%oftheequityofWhitailliquorindustryanditssubsidiaries,amongthefivemembersoftheboardofdirectors,theCompanyhassentthreepeople.TheCompanyhasactualcontroloverWhitailliquorindustryanditssubsidiaries,soitisincludedinthescopeofconsolidation.Detailsofthesubsidiariesincorporatedintotheconsolidatedfinancialstatementsshowon“7.Interestsinsubsidiaries”.4.Basisofpreparationoffinancialstatements4.1.BasisofpreparationoffinancialstatementsTheCompanyhasprepareditsfinancialstatementsonagoingconcernbasis,andthepreparationis2020InterimReportofLuzhouLaojiaoCo.,Ltd.81basedonactualtransactionsandeventsincompliancewithAccountingStandardsforBusinessEnterprisesandrelevantguidanceandexplanation(thefollowingcalledtheASBE)issuedbyMinistryofFinance,andRulesonCompanyInformationDisclosureandPreparationofPubliclyIssuedSecuritiesNo.15-GeneralRulesonFinancialReportingRules(2014Revision)issuedbyCSRC.4.2.GoingconcernTheCompany’sbusinessactivitieshaveadequatefinancialsupport.BasedonthecurrentinformationobtainedbytheCompany,comprehensivelyconsideringfactorssuchasmacro-policyrisk,marketoperationrisk,currentorlong-termprofitability,debtrepaymentabilityoftheCompany,aswellasitsresourceoffinancialsupport,theCompanybelievesthatitisreasonabletopreparethefinancialstatementsonagoingconcernbasisandtherearenoeventsorsituationsresultinginsignificantdoubtsovergoingconcernforatleast12months.5.Significantaccountingpoliciesandaccountingestimates5.1ThedeclarationaboutcompliancewithASBEThefinancialstatementsoftheCompanyhavebeenpreparedinaccordancewithASBE,andpresenttrulyandcompletely,thefinancialpositionasof30June2020,andtheCompany’sandresultsofoperationsandcashflowsfortheyearasof30June2020.Inaddition,inallmaterialrespects,thefinancialstatementsoftheCompanycomplywithdisclosurerequirementsofthefinancialstatementsandtheirnotesinaccordancewithRulesonCompanyInformationDisclosureandPreparationofPubliclyIssuedSecuritiesNo.15-GeneralRulesonFinancialReportingRulesrevisedbyCSRCin2014.5.2AccountingperiodTheCompanyadoptsthecalendaryearasitsaccountingyear,i.e.from1stJanuaryto31stDecember.5.3BusinessCycleTheCompany’sbusinesscycleis12months.5.4FunctionalcurrencyTheCompanyhasadoptedChinaYuan(CNY)asfunctionalcurrency.5.5Theaccountingtreatmentofbusinesscombinationsinvolvingenterprisesundercommoncontrolandbusinesscombinationsnotinvolvingenterprisesundercommoncontrol(1)BusinesscombinationundercommoncontrolAssetsandliabilitiesobtainedbytheCompanyfromthecombinethroughbusinesscombinationundercommoncontrolshallbemeasuredatthebookvalueasstatedintheconsolidatedfinancialstatementsofultimatecontrollingpartyatthecombinationdate.Theshareofthebookvalueofthemergedparty’sowner’sequityintheconsolidatedfinancialstatementsistakenastheinitialinvestmentcostoflong-termequityinvestmentsinindividualfinancialstatements.Thecapitalreserve(stockpremiumorcapitalpremium)isadjustedaccordingtothedifferencebetweenthebookvalueofnetassetacquiredthroughcombinationandthebookvalueofconsiderationpaidforthecombination(ortotalparvalueofsharesissued).Ifthecapitalreserve(stockpremiumorcapitalpremium)isinsufficienttooffset,theretained2020InterimReportofLuzhouLaojiaoCo.,Ltd.82earningsshallbeadjusted.(2)BusinesscombinationnotundercommoncontrolAssetspaid,liabilitiesincurredorassumedandtheequitysecuritiesissuedasconsiderationforcombinationshallbemeasuredbasedonfairvalueontheacquisitiondate,thedifferencebetweenfairvalueanditsbookvalueshallbeincludedincurrentprofitandloss.TheCompanyshallrecognizethedifferenceofthecombinationcostsinexcessofthefairvalueofthenetidentifiableassetacquiredfromtheacquireethroughcombinationasgoodwill.Afterthereview,ifthecombinationcostsarestillinshortofthefairvalueofthenetidentifiableassetacquiredfromtheacquireethroughcombination,includethedifferenceinthecurrentprofitandloss.Fees,commissions,andothertransactionexpensespaidonissuanceofequitysecuritiesascombinationconsiderationinthebusinesscombinationshallbeincludedintheinitialmeasurementamountofequitysecurities.5.6Preparationofconsolidatedfinancialstatements(1)ConsolidatedFinancialStatementScopeThescopeoftheCompany’sconsolidatedfinancialstatementsisbasedoncontrol,andallsubsidiariescontrolledareincludedintheconsolidationscopeoftheconsolidatedfinancialstatements.(2)ConsolidationproceduresTheconsolidatedfinancialstatementsarebasedonthefinancialstatementsoftheCompanyanditssubsidiaries,andarepreparedbytheparentcompanywithotherrelevantinformation.Whenpreparingconsolidatedfinancialstatement,theCompanyconsiderstheGroupasanaccountingentity,adoptsunifiedaccountingpolicies,andappliestherequirementsofASBErelatedtorecognition,measurementandpresentationtoreflecttheGroup’sfinancialposition,operatingresultsandcashflows.AllthesubsidiarieswithintheconsolidationscopeofconsolidatedfinancialstatementsshalladoptthesameaccountingpoliciesandaccountingperiodsasthoseoftheCompany.IftheaccountingpoliciesoraccountingperiodsofasubsidiaryaredifferentfromthoseoftheCompany,thefinancialstatementsofthesubsidiary,uponpreparationofconsolidatedfinancialstatements,shallbemadenecessaryadjustmentbasedonitsownaccountingpoliciesandaccountingperiodsoftheCompany.Forsubsidiariesacquiredfromthebusinesscombinationnotundercommoncontrol,thefinancialstatementsshallbeadjustedonthebasisofthefairvalueofidentifiablenetassetsonthedateofpurchase.Forthesubsidiaryacquiredfromthebusinesscombinationundercommoncontrol,itsassetsandliabilities(includingthegoodwillformedbytheacquisitionofthesubsidiarybytheultimatecontrollingparty)shallbeadjustedonthebasisofthebookvalueintheconsolidatedstatementsoftheultimatecontrollingparty.Theportionofasubsidiary’sequity,thecurrentnetprofitandlossofsubsidiaries,andthecurrentcomprehensiveincomeattributabletonon-controllinginterestsshallbeseparatelypresentedasnon-controllinginterestsinconsolidatedbalancesheetwithinowners'equity,belowthenetprofitline2020InterimReportofLuzhouLaojiaoCo.,Ltd.83itemandbelowthetotalcomprehensiveincomelineitemintheconsolidatedincomestatementrespectively.Whentheamountofcurrentlossattributabletonon-controllingshareholdersofasubsidiaryexceedsthebalanceofthenon-controllingshareholders’portionintheopeningbalanceofowner'sequityofthesubsidiary,theexcessshallbeallocatedagainstthenon-controllinginterests.AcquisitionofsubsidiariesorbusinessDuringthereportingperiod,iftheCompanyacquiressubsidiariesfromthebusinesscombinationundercommoncontrol,theopeningbalanceintheconsolidatedbalancesheetshallbeadjusted.Theincome,expensesandprofitsofthenewlyacquiredsubsidiariesfromthebeginningtotheendofthereportingperiodshallbeincludedintheconsolidatedincomestatement.Thecashflowsofthenewlyacquiredsubsidiariesfromthebeginningtotheendofthereportingperiodshallbeincludedintheconsolidatedstatementofcashflows.Atthesametime,therelevantitemsofthecomparativeinformationshallbeadjustedasthecombinedentityexistedsincethecontrolpointoftheultimatecontrollingparty.IftheCompanycancontroltheinvesteefromthebusinesscombinationundercommoncontrolduetoadditionalinvestmentorotherreasons,thepartiesinvolvedinthecombineshallbedeemedtoadjustinthecurrentstatewhentheultimatecontrollingpartystartstocontrolthem.Fortheequityinvestmentbeforeobtainingcontroloftheinvestee,therecognizedrelevantprofitorlossandothercomprehensiveincomeandotherchangesinnetassetsbetweenthelaterofacquisitiondateofpreviousequityandthedateonwhichboththeinvestorandtheinvesteeareundercommoncontrolandthecombinationdateshallrespectivelywrite-downthebeginningretainedearningsorcurrentprofitsandlossesduringtheperiodofcomparativeinformation.Duringthereportingperiod,iftheCompanyacquiressubsidiariesfromthebusinesscombinationnotundercommoncontrol,theopeningbalanceintheconsolidatedbalancesheetshallnotbeadjusted.Theincome,expensesandprofitsofthenewlyacquiredsubsidiariesfromtheacquisitiondatetotheendofthereportingperiodshallbeincludedintheconsolidatedincomestatement.Thecashflowsofthenewlyacquiredsubsidiariesfromtheacquisitiondatetotheendofthereportingperiodshallbeincludedintheconsolidatedstatementofcashflows.WhentheCompanybecomescapableofexercisingcontroloveraninvesteenotundercommoncontrolduetoadditionalinvestmentorotherreasons,theCompanyshallre-measurethepreviouslyheldequityintereststoitsfairvalueontheacquisitiondate,andthedifferenceshallberecognizedasinvestmentincome.Whenthepreviouslyheldequityinvestmentisaccountedforunderequitymethod,anyothercomprehensiveincomepreviouslyrecognizedandotherequitychanges(excludingothercomprehensive,netprofitandlossandprofitdistribution)inrelationtotheacquiree’sequitychangesshallbetransferredtoprofitandlossforthecurrentperiodwhenacquisitiontookplace,exceptforothercomprehensiveincomeresultingfromchangesinnetliabilitiesornetassetsduetore-measurementofdefinedbenefitplanbyinvestee.Disposalofsubsidiariesandbusiness2020InterimReportofLuzhouLaojiaoCo.,Ltd.84GeneraltreatmentsDuringthereportingperiod,iftheCompanydisposessubsidiaries,theincome,expensesandprofitsofthenewlydisposedsubsidiariesfromthebeginningtothedisposaldateshallbeincludedintheconsolidatedincomestatement.Thecashflowsfromthebeginningtothedisposaldateshallbeincludedintheconsolidatedstatementofcashflows.Incaseoflossofcontrolovertheinvesteeduetopartialdisposaloftheequityinvestmentorotherreasons,theCompanyshallre-measuretheremainingequityinvestmentatitsfairvalueatthedateoflossofcontrol.Theamountoftheconsiderationobtainedfromthedisposaloftheequityandthefairvalueoftheremainingequity,minusthenetassetsharescalculatedcontinuouslyfromtheacquisitiondatebasedonthepreviousshareholdingproportionandthegoodwill,thedifferenceshallbeincludedintheinvestmentincomeoftheperiodwhenthecontrolislost.Othercomprehensiveincomerelatedtotheformersubsidiary’sequityinvestmentoforotherchangesinowners'equityexcludingnetprofitandloss,othercomprehensiveincomeandprofitdistributionshallbetransferredtoinvestmentincomeforthecurrentperiodwhencontrolislost.Othercomprehensiveincomeresultingfromchangesinnetliabilitiesornetassetsduetore-measurementofdefinedbenefitplanbyinvesteeisexcluded.DisposalofsubsidiariesbystepIftheCompanylosescontrolofasubsidiaryisthroughmultipletransactionsbysteps,theterms,conditionsandeconomicimpactofthedisposaltransactionshallbeconsidered.Whenoneormoreofthefollowingconditionsmayindicatethatmultipletransactionsshouldbetreatedasapackageoftransactionsforaccountingtreatment:a.Thesearrangementswereenteredintoatthesametimeorincontemplationofeachother;b.Thesearrangementsworktogethertoachieveanoverallcommercialeffect;c.Theoccurrenceofonearrangementdependsontheoccurrenceofatleastoneotherarrangement;d.Onearrangementaloneisnoteconomicallyjustified,butitiseconomicallyjustifiedwhenconsideredtogetherwithotherarrangementsIfthetransactionsofthedisposaloftheequityinvestmentofthesubsidiaryuntilthelossofcontrolbelongtoapackagetransaction,theCompanyshallaccountforasatransaction;However,thedifferencebetweeneachdisposalconsiderationreceivedandthecorrespondingproportionofthesubsidiary’snetassetsbeforethelossofcontrolshallberecognizedasothercomprehensiveincomeintheconsolidatedfinancialstatementsandtransferredintotheprofitandlossofthecurrentperiodwhenthecontrolislost.Ifthetransactionsfromthedisposaloftheequityinvestmentofthesubsidiarytothelossofcontrolarenotconsideredasapackagetransactions,theaccountingtreatmentshallbeconductedaccordingtotherelevantpoliciesonthepartialdisposaloftheequityinvestmentofthesubsidiarywherecontrolisretainedbeforethelossofcontrol.Whenthecontrolislost,thedisposalshallbeaccountedforaccordingtothegeneraltreatment.2020InterimReportofLuzhouLaojiaoCo.,Ltd.85Purchaseofnon-controllinginterestsThedifferencebetweentheincreaseinthecostoflong-termequityinvestmentresultfromacquisitionofnon-controllingshareholdersandtheshareofnetassetsofthesubsidiarycalculatedcontinuouslyfromtheacquisitiondateorcombinationdatebasedonnewlyshareholdingproportionshallbeadjustedtoequity(share)premiumofcapitalreservesintheconsolidatedbalancesheet.Ifthecapitalreserveisinsufficient,anyexcessshallbeadjustedagainstretainedearnings.PartialdisposalsofequityinvestmentinsubsidiarieswithoutlossofcontrolWhentheCompanydisposesofaportionofalong-termequityinvestmentinasubsidiarywithoutlossofcontrol,thedifferencebetweendisposalconsiderationandnetassetsofthesubsidiarycalculatedcontinuouslysincetheacquisitiondateorthecombinationdaterelatedtothedisposaloflong-termequityinvestmentshallbeadjustedtoequity(share)premiumofcapitalreservesintheconsolidatedbalancesheet.Ifthecapitalreserveisinsufficient,anyexcessshallbeadjustedagainstretainedearnings.5.7Classificationofjointventurearrangementsandtheaccountingtreatmentmethodofcommonoperation(1)ClassificationofjointventurearrangementsAjointarrangementisclassifiedaseitherajointoperationorajointventureaccordingtothestructure,legalform,agreedtermsandotherfactsandconditionsofajointarrangement.Ajointarrangementthatisstructuredthroughaseparatevehicleisusuallyclassifiedasajointventure.However,whenajointarrangementprovidesclearevidencethatitmeetsanyofthefollowingrequirementsandcomplieswithapplicablelawsandregulationsasajointoperation:a.Thelegalformofthejointarrangementindicatesthatthepartiesthathavejointcontrolhaverightstotheassets,andobligationsfortheliabilities,relatingtothearrangement.b.Thetermsofthejointarrangementspecifythatthepartiesthathavejointcontrolhavetherightstotheassets,andtheobligationsfortheliabilities,relatingtothearrangement.c.Otherfactsandcircumstancesindicatethatthepartiesthathavejointcontrolhaverightstotheassets,andtheobligationsfortheliabilities,relatingtothearrangement.Thepartiesthathavejointcontrolhaverightstosubstantiallyalloftheoutputofthearrangement,andthearrangementdependsonthepartiesthathavejointcontrolonacontinuousbasisforsettlingtheliabilitiesofthearrangement.Ajointarrangementthatisnotstructuredthroughaseparatevehicleshallbeclassifiedasajointoperation.Aseparatevehiclereferstoaseparatelyidentifiablefinancialstructure,includingseparatelegalentitiesorentitieswithoutalegalpersonalitybutrecognizedbystatute.(2)AccountingbypartiesofajointoperatorAjointoperatorshallrecognizethefollowingitemsinrelationtoitsinterestinajointoperation,andaccountfortheminaccordancewithrelevantaccountingstandards:a.Itssolely-heldassets,anditsshareofanyassetsheldjointly;2020InterimReportofLuzhouLaojiaoCo.,Ltd.86b.Itssolely-assumedliabilities,anditsshareofanyliabilitiesincurredjointly;c.Itsrevenuefromthesaleofitsshareoftheoutputarisingfromthejointoperation;d.Itsshareoftherevenuefromsaleoftheoutputbythejointoperation;ande.Itssolely-incurredexpensesanditsshareofanyexpensesincurredjointly.TheCompanyshallonlyrecognizetheportionoftheprofitandlossattributabletootherparticipantsinthejointventure,resultingfrominvestmentorsaleofassetstothejointventurebytheCompany(excludingthoseassetsconstitutingthebusiness),priortothesaleofsuchassetstoathirdparty.TheCompanyshallfullyrecognizeimpairmentlosswhenthereisanyimpairmentlossofinvestedorsoldassetsoccurringinaccordancewiththeASBENo.8-AssetImpairment.TheCompanyshallonlyrecognizethepartoftheprofitandlossattributabletootherparticipantsinthejointventurebeforesellingtheassetsandotherassetspurchasedfromthejointventure(excludingthoseassetsconstitutingthebusiness)toathirdparty.WhentheimpairmentlossofthepurchasedassetsisinaccordancewiththeASBENo.8-AssetImpairment,theCompanyshallrecognizesuchlossesaccordingtoitsshare.WhentheCompanydoesnothavecommoncontroloverthejointventure,iftheCompanyenjoystheassetsrelatedtothejointventureandassumestheliabilitiesrelatedtothejointventure,theaccountingtreatmentshallbeconductedaccordingtotheaboveprinciples.Otherwise,theaccountingtreatmentshallbeconductedinaccordancewiththerelevantaccountingstandards.5.8CashandcashequivalentsWhenpreparingthecashflowstatement,theCompanyrecognizescashonhandanddepositsthatcanbereadilywithdrawnondemandascash.CashequivalentsaretheCompany’sshort-term(duewithin3monthsfrompurchasedate),highlyliquidinvestmentsthatarereadilyconvertibletoknownamountsofcashandwhicharesubjecttoaninsignificantriskofchangesinvalue.Restrictedbankdepositsarenotrecognizedascashandcashequivalentsinthecashflowstatement.5.9Foreigncurrencytransactionsandtranslationofforeigncurrencystatements(1)ForeigncurrencytransactionsAtthetimeofinitialrecognitionofaforeigncurrencytransactionoftheCompany,theamountintheforeigncurrencyshallbetranslatedintotheamountinCNYcurrencyatthespotexchangerateofthetransactiondate.Forthemonetaryitemsofforeigncurrencies,thetranslationisdoneaccordingtospotrateofthebalancesheetdate.Theexchangedifferencegeneratedfromthedifferenceofspotrateofthecurrentbalancesheetdateandthetimeofinitialrecognitionofaforeigncurrencyorthepreviousbalancesheetdateischargedtotheprofitorlossofthecurrentperiodexceptthattheexchangedifferencegeneratedfromforeigncurrencyborrowingsrelatingtoassetsofwhichtheacquisitionorproductionsatisfiesthecapitalizationconditionsiscapitalized.Non-monetaryitemsmeasuredatfairvaluethatisreflectedinforeigncurrencyattheendoftheperiod,theCompanyshallfirstlytranslatetheforeigncurrencyintotheamountinfunctionalcurrencyatthespotexchangerateonthedatewhenthefairvalueisdetermined,andthencompareitwiththeoriginalfunctionalcurrencyamount.Differencebetweenthetranslatedfunctionalcurrencyamountandtheoriginalfunctionalcurrencyamountistreatedasprofitorlossfromchangesinfairvalue(includingchangesinexchangerate)andisrecognizedincurrentprofitandloss.Ifthereisanon-monetaryitemofavailable-for-salefinancialassets,thedifferencesarerecordedintoothercomprehensiveincome.2020InterimReportofLuzhouLaojiaoCo.,Ltd.87(2)TranslationofforeigncurrencystatementsAssetsandliabilitiesinthebalancesheetsshallbetranslatedatthespotexchangeratesonbalancesheetdate.Shareholders’equityitems,exceptfortheitemof"undistributedprofits",aretranslatedatthespotexchangeratesonthedateswhenthetransactionsoccur.Revenueandexpenseitemsintheincomestatementaretranslatedatthespotexchangeratesonthedateswhenthetransactionsoccurorattheexchangeratedeterminedinasystematicalandreasonablemethodandsimilartothespotexchangerateonthedaywhenthetransactionsoccur.Differencesarisingfromtheabovetranslationsofforeigncurrencyfinancialstatementsareseparatelylistedunderothercomprehensiveincomeintheconsolidatedbalancesheet.Iftheoverseasbusinessispartlydisposedof,theforeigncurrencyfinancialstatementsexchangedifferenceshallbecalculatedinproportiontothepercentageofdisposalandtransferredtogainorlossondisposalforthecurrentperiod.Foreigncurrencycashflowandcashflowofforeignsubsidiariesshallbetranslatedatapproximateexchangerateofspotrateonthedateofcashflow.5.10FinancialInstrumentsAfinancialinstrumentisacontractthatgivesrisetoafinancialassetofoneentityandafinancialliabilityorequityinstrumentofanotherentity.WhentheCompanybecomesapartytoafinancialinstrumentcontract,therelatedfinancialassetorfinancialliabilityshouldberecognized.(1)Classification,recognitionandmeasurementoffinancialassetsBasedonthebusinessmodeloffinancialassetmanagementandthecontractcashflowcharacteristicsoffinancialassets,theCompanyclassifiesfinancialassetsinto:financialassetsmeasuredatamortizedcost;financialassetsmeasuredatfairvaluewiththeirchangesincludedintoothercomprehensiveincome;andfinancialassetsmeasuredatfairvaluewiththeirchangesincludedintocurrentprofits/losses.Attheinitialrecognition,financialassetsaremeasuredatfairvalue.Forfinancialassetsmeasuredatfairvaluewiththeirchangesincludedintocurrentprofits/losses,theexpensesinvolvedinthetransactionaredirectlyrecordedintocurrentprofits/losses;forotherfinancialliabilities,theexpensesinvolvedinthetransactionarerecordedintotheinitiallyrecognizedamount.1)FinancialassetsmeasuredatamortizedcostThebusinessmodelinwhichtheCompanymanagesfinancialassetsmeasuredatamortizedcostaimstoreceivecontractcashflow.Furthermore,thecharacteristicsofthecontractcashflowofsuchfinancialassetsareconsistentwithbasicborrowingandlendingarrangements,whichmeansthatcashflowgeneratedonaspecificdateservesonlyaspaymentforprincipalandinterestsbasedontheamountofunpaidprincipal.TheCompanyadoptstheeffectiveinterestmethodforsuchfinancialinterests,performssubsequentmeasurementofthematamortizedcost,andincludesthegainsorlossesfromderecognition,changesorimpairmentofthemintocurrentprofits/losses.2)FinancialassetsmeasuredatfairvaluewiththeirchangesincludedintoothercomprehensiveincomeThebusinessmodelinwhichtheCompanymanagessuchfinancialassetsbothaimstoreceivecontractcashflowandforthepurposeofsale.Furthermore,thecharacteristicsofthecontractcashflowofsuch2020InterimReportofLuzhouLaojiaoCo.,Ltd.88financialassetsareconsistentwithbasicborrowingandlendingarrangements.TheCompanymeasuresuchfinancialassetsatfairvalueandincludetheirchangesintoothercomprehensiveincome,butrecordimpairmentlossesorgains,exchangegainsorlossesandinterestincomecalculatedintheeffectiveinterestmethodintocurrentprofits/losses.Attheinitialrecognition,theCompanymayspecifynon-tradingequityinstrumentinvestmentasafinancialassetmeasuredatfairvaluewithitschangesincludedintoothercomprehensiveincomeandshouldrecognizethedividendincomeaccordingtoregulations;thespecificationisirrevocableoncemade.Whenthefinancialassetisderecognized,thecumulativegainsorlossespreviouslyincludedintoothercomprehensiveincomeshouldbetransferredintoretainedearnings.3)Financialassetsmeasuredatfairvaluewiththeirchangesincludedintocurrentprofits/lossesForfinancialassetsotherthantheabovefinancialassetsmeasuredatamortizedcostandfinancialassetsmeasuredatfairvaluewiththeirchangesincludedintoothercomprehensiveincome,theCompanyclassifiesthemasfinancialassetsmeasuredatfairvaluewiththeirchangesincludedintocurrentprofits/losses.Inaddition,attheinitialrecognition,theCompanyspecifiespartialfinancialassetsasfinancialassetsmeasuredatfairvaluewiththeirchangesincludedintocurrentprofits/losses,inordertoeliminateorsubstantiallyreduceaccountingmismatch.Forsuchfinancialassets,theCompanyperformssubsequentmeasurementusingfairvalueandrecordschangesinthefairvalueintocurrentprofits/losses.(2)Classification,recognitionandmeasurementoffinancialliabilitiesAttheirinitialrecognition,financialliabilitiesaredividedintofinancialliabilitiesmeasuredatfairvaluewiththeirchangesincludedintocurrentprofits/lossesandotherfinancialliabilities.Forfinancialliabilitiesmeasuredatfairvaluewiththeirchangesincludedintocurrentprofits/losses,theexpensesinvolvedinthetransactionaredirectlyrecordedintothecurrentprofits/losses.Forotherfinancialliabilities,theexpensesinvolvedinthetransactionarerecordedintotheinitiallyrecognizedvalue.1)Financialliabilitiesmeasuredatfairvaluewiththeirchangesincludedintocurrentprofits/lossesFinancialliabilitiesmeasuredatfairvaluewiththeirchangesincludedintocurrentprofits/lossesincludetradingfinancialliabilities(includingderivativesclassifiedasfinancialliabilities)andthefinancialliabilitiesspecifiedtobemeasuredatfairvaluewiththeirchangesincludedintocurrentprofits/lossesattheinitialrecognition.Tradingfinancialliabilities(includingderivativesclassifiedasfinancialliabilities)aresubsequentlymeasuredatfairvalue,withchangesinfairvaluerecordedintocurrentprofits/losses,exceptforthoserelatedtohedgeaccounting.Forthosespecifiedasfinancialliabilitiesmeasuredatfairvaluewiththeirchangesincludedintocurrentprofits/losses,changesinthefairvalueofsuchliabilitiescausedbychangesintheCompany’sowncreditriskshouldbeincludedintoothercomprehensiveincome.Inderecognitionofsuchliabilities,cumulativechangesintheirvaluecausedbytheCompany’sowncreditriskthathavebeenrecordedinto2020InterimReportofLuzhouLaojiaoCo.,Ltd.89othercomprehensiveincomeshouldbetransferredintoretainedearnings.Otherchangesintheirfairvalueshouldberecordedintocurrentprofits/losses.IftreatmentoftheimpactoftheCompany’sowncreditriskchangesofsuchfinancialliabilitiesintheabovemannercausesorexpandsaccountingmismatchinprofits/losses,theCompanywillincludeallgainsorlossesofsuchfinancialliabilities(includingtheamountoftheimpactoftheCompany’sowncreditriskchanges)intocurrentprofits/losses.2)OtherfinancialliabilitiesFinancialliabilitiesotherthanthoseformedfromthetransferoffinancialassetsnotmeetingderecognitionconditionsorcontinuousinvolvementintotransferredfinancialassetsandthoseoutsidefinancialguaranteecontractsareclassifiedasfinancialliabilitiesmeasuredatamortizedcost.Suchfinancialliabilitiesshouldbesubsequentlymeasuredatamortizedcostandthegainsorlossesfromderecognitionoramortizationshouldbeincludedintocurrentprofits/losses.(3)RecognitionbasisandmeasurementmethodoftransferoffinancialassetsIfafinancialassetmeetsanyofthefollowingconditions,itshallbederecognized:1)Thecontractualrightforcollectingthecashflowofthefinancialassethasbeenterminated;2)Thefinancialassethasbeentransferredandalmostalltherisksandremunerationsinrespectoftheownershipofthefinancialassethasbeentransferredtothetransferee;3)Thefinancialassethasbeentransferred,andalthoughtheenterpriseneithertransfersnorretainsalmostalltherisksandremunerationsinrespectoftheownershipofthefinancialasset,ithasabandoneditscontrolovertheasset.Iftheenterpriseneithertransfersnorretainsalmostalltherisksandremunerationsinrespectoftheownershipofthefinancialassetanddoesnotabandonitscontrolovertheasset,theinvolvedfinancialassetshallberecognizedaccordingtothelevelofcontinuousinvolvementofthetransferredfinancialassetandtherelevantliabilitiesshallberecognizedaccordingly.Thelevelofcontinuousinvolvementofthetransferredfinancialassetreferstothelevelofriskfacedbytheenterpriseduetochangesinthevalueofthefinancialasset.Iftheoveralltransferofthefinancialassetmeetstherecognitionconditions,thedifferencebetweenthecarryingvalueofthetransferredfinancialassetaswellastheconsiderationreceivedfromthetransferandthecumulativeamountoffairvaluechangesoriginally-recordedintoothercomprehensiveincomesshallberecordedintothecurrentprofits/losses.Ifpartialtransferofthefinancialassetmeetstherecognitionconditions,thecarryingvalueofthetransferredfinancialassetshallbeapportionedattherelativefairvaluebetweenthederecognitionandunderecognitionpart.Thedifferencebetweenthesummationoftheconsiderationreceivedfromthetransferandthecumulativeamountoffairvaluechangesoriginally-recordedintoothercomprehensiveincomesthatshouldbeapportionedtothederecognitionpartandtheapportionedaforementionedcarryingvalueshallberecordedintothecurrentprofits/losses.Forafinancialassetsoldwiththerightofrecourseorwiththetransferofthefinancialassetendorsement,theCompanyshalldecidewhetheralmostalltherisksandremunerationsinrespectoftheownershipof2020InterimReportofLuzhouLaojiaoCo.,Ltd.90thefinancialassetshouldbetransferred.Iftheyaretransferred,thefinancialassetshallbederecognized;iftheyareretained,thefinancialassetshallnotbederecognized;iftheyareneithertransferrednorretained,theCompanywillcontinuetodecidewhethertheenterpriseshouldretaincontrolovertheassetandperformtheaccountingtreatmentaccordingtotheprinciplesstatedinpreviousparagraphs.(4)DerecognitionoffinancialliabilitiesWhenthecurrentobligationofafinancialliability(orapartofit)isrelieved,theCompanywillderecognizethefinancialliability(orthepartofit).WhentheCompany(borrower)signsanagreementwithalendertoreplaceanoriginalfinancialliabilityintheformofbearinganewfinancialliabilityandthecontracttermsforthenewfinancialliabilitydifferfromthosefortheoriginalinsubstance,theoriginalfinancialliabilityshouldbederecognizedandthenewoneshouldberecognized.WhentheCompanymakessubstantialchangestothecontracttermsofanoriginalfinancialliability(orapartofit),theoriginalfinancialliabilityshouldbederecognizedandanewfinancialliabilityshouldberecognizedaccordingtotheamendedcontractterms.Whenafinancialliability(orapartofit)isderecognized,theCompanywillincludethedifferencebetweenitscarryingvalueandtheconsiderationpaid(includingnon-cashassetsorliabilitiesbornethataretransferredout)intocurrentprofits/losses.(5)OffsettingoffinancialassetsandfinancialliabilitiesWhentheCompanyhasthelegalrighttooffsetrecognizedfinancialassetsandfinancialliabilitiesandmayexecutethelegalrightcurrentlyandsimultaneously,theCompanyplanstosettleorsimultaneouslyencashthefinancialassetsinnetamountsandpayoffthefinancialliabilities,thefinancialassetsandthefinancialliabilitieswhicharepresentedinthenetamountafterthemutualoffsetinthebalancesheet.Otherthanthat,theyshallbepresentedseparatelyinthebalancesheetwithoutthemutualoffset.(6)MethodofdeterminingthefairvalueoffinancialassetsandfinancialliabilitiesFairvaluereferstothepricethatamarketparticipantcanreceiveforsellinganassetortransferringaliabilityinanorderlytransactiononthemeasurementdate.Foranexistingfinancialinstrumentinanactivemarket,theCompanyadoptsthequotationsintheactivemarkettodetermineitsfairvalue.Quotationsintheactivemarketrefertopricesthatcanbeeasilyobtainedfromexchanges,brokers,industrialassociationsandpricingserviceinstitutionsandrepresenttheactualpricesinthemarkettransactionshappeninginafairtrade.Foranon-existingfinancialinstrumentinanactivemarket,theCompanyadoptsthevaluationtechniquetodetermineitsfairvalue.Thevaluationtechniqueincludesreferencestofamiliarsituationsandthepricesusedbythepartiesvoluntarilyparticipatingintherecentmarkettransactions,aswellasreferencestothepresentfairvalueofotherfinancialinstrumentsofthesamenature,discountedcashflowmethodandoptionspricingmodel.Inthevaluation,theCompanyusesavaluationtechniquethatisapplicableinthecurrentsituationwithsufficientdataavailableandotherinformationsupport,choosesinputvaluesthatareconsistentwiththeassetorliabilitycharacteristicsconsideredbymarketplayersinrelatedassetorliabilitytransactions,andmakemaximumefforttouserelatedobservableinputvaluesonapreferentialbasis.Whenitisunableorunfeasibletoobtainrelatedobservableinputvalues,unobservablewillbeused.2020InterimReportofLuzhouLaojiaoCo.,Ltd.91(7)EquityinstrumentsEquityinstrumentsrefertothecontractsthatcanprovetheCompany’sresidualequityofassetsafterthedeductionofallliabilities.TheCompany’sissuance(includingrefinancing),repurchase,saleorcancellationofequityinstrumentsserveasthechangetreatmentofequity.Transactionexpensesrelatedtotheequitytransactionsaredeductedfromtheequity.TheCompanydoesnotrecognizechangesinthefairvalueofequityinstruments.DividendsfromtheCompany’sequityinstrumentsdistributedduringthevalidity(includingthe“interests”frominstrumentsclassifiedasequityinstruments)aretreatedasprofitdistribution.(8)ImpairmentoffinancialinstrumentsBasedontheexpectedcreditloss,theCompanytreatsfinancialassetsmeasuredatamortizedcostanddebtinstrumentinvestmentmeasuredatfairvaluewithitschangesincludedintoothercomprehensiveincomebyimpairmentandrecognizestheprovisionforloss.Creditlossmeansthedifferencebetweenallcontractcashflowdiscountedattheoriginaleffectiveinterestratetobereceivedaccordingtocontractsandallcontractcashflowexpectedtobereceived,namely,thepresentvalueofallcashshortage.ForafinancialassetwithcreditimpairmentpurchasedbyororiginatedfromtheCompany,itshouldbediscountedbytheeffectiveinterestrateaftercreditadjustmenttothefinancialasset.Foraccountsreceivablethatdonotcontainsignificantfinancingcomponents,theCompanyadoptssimplifiedmeasurementtomeasurelossprovisionsaccordingtotheamountequivalenttotheexpectedcreditlossfortheentireduration.Forafinancialassetotherthanthoseusingtheabovesimplifiedmeasurement,theCompanyassessesoneachbalancesheetdatewhetheritscreditriskhassubstantiallyincreasedsincetheinitialrecognition.Ifithasnotandisinthefirststage,theCompanywillmeasurethelossprovisionattheamountequivalenttotheexpectedcreditlossforthenext12monthsandcalculatetheinterestincomeaccordingtothebookbalanceandtheeffectiveinterestrate;ifithassubstantiallyincreasedsincetheinitialrecognitionwithoutcreditimpairmentandisinthesecondstage,theCompanywillmeasurethelossprovisionattheamountequivalenttotheexpectedcreditlossfortheentiredurationandcalculatetheinterestincomeaccordingtothebookbalanceandtheeffectiveinterestrate;ifcreditimpairmenthasoccurredsincetheinitialrecognitionandisinthethirdstage,theCompanywillmeasurethelossprovisionbytheamountequivalenttotheexpectedcreditlossfortheentiredurationandcalculatetheinterestincomeaccordingtotheamortizationcostandtheeffectiveinterestrate.Forfinancialinstrumentswithlowcreditrisksonbalancesheetdates,theCompanyassumesthattheircreditriskshavenotsubstantiallyincreasedsincetheinitialrecognition.TheCompanyassessesexpectedcreditlossesoffinancialinstrumentsbasedonindividualandgroupassessment.TheCompanyconsidersthecreditriskcharacteristicsofdifferentcustomersandassesses2020InterimReportofLuzhouLaojiaoCo.,Ltd.92theexpectedcreditlossesofaccountsreceivableandotherreceivablesbasedonaccountageportfolio.Whenassessingexpectedcreditlosses,theCompanyconsidersreasonableandwell-foundedinformationonpastmatters,presentconditionsandforecastoffutureeconomicconditions.Whenitnolongerreasonablyexpectstorecoverallorpartofthecontractcashflowoffinancialassets,theCompanywilldirectlywritedownthebookbalanceofsuchfinancialassets.5.11NotesreceivableThemethodofdeterminingtheexpectedcreditlossofnotesreceivablesandaccountingtreatmentmethod:Dividenotesreceivablesintovariousportfoliosaccordingtocommonriskcharacteristicsbasedonthecreditriskcharacteristicsofacceptorsanddeterminetheaccountingestimatepoliciesofexpectedcreditloss:PortfolionameProvisionmethodBankacceptancebillportfolioThemanagementevaluatesthatthistypehaslowcreditriskanditsfixedbaddebtprovisionratiois0%.TradeacceptanceportfolioTheprovisionforimpairmentismadeaccordingtotheexpectedlossratewiththesameportfolioclassificationofaccountsreceivables5.12AccountsreceivablesThemethodofdeterminingtheexpectedcreditlossofaccountsreceivablesandaccountingtreatmentmethod:Asforaccountsreceivables,regardlessofwhetherthereisasignificantfinancingcomponent,theCompanyalwaysmeasurestheprovisionforlossbasedontheamountequivalenttotheexpectedcreditlossovertheentirelife,andtheresultingincreaseorreversalofprovisionforlossshallbeincludedinthecurrentprofitorlossasgainsorlossesonimpairment.Theaccrualmethodisasfollows:(1)Whenthereisobjectiveevidenceshowingthatanaccountreceivablehasincurredcreditimpairment,theCompanyshallmakebaddebtprovisionfortheaccountreceivableandrecognizetheexpectedcreditloss.(2)Whentheinformationabouttheexpectedcreditlossofasinglefinancialassetcannotbeevaluatedatareasonablecost,theCompanyshalldividetheaccountsreceivablesportfolioaccordingtocreditriskcharacteristicsandmeasuretheexpectedcreditlossbasedonportfolios.PortfolionameProvisionmethodRiskportfolioExpectedcreditlossOtherportfolioNobaddebtprovisionOtherportfolioreferstothenormalintercoursefundsamongtheCompanyandbusinessesunderthesamecontrol,therecoveryofwhicharecontrollablewithnorisks.Thus,nobaddebtprovisionwasmade.TheCompanycombinestheaccountsreceivablesclassifiedasriskportfolioinaccordancewithsimilarcreditriskcharacteristics(aging),andcalculatestheexpectedcreditlossthroughtheexposureatdefaultandexpectedcreditlossrateovertheentirelifebasedonthecurrentsituationandpredictionoffuture2020InterimReportofLuzhouLaojiaoCo.,Ltd.93economicsituationconsultinghistoricalcreditlossexperience.Thecomparativetableofthecreditlossrateisasfollows:AgingExpectedlossprovisionrate%Within1year51-2years102-3years203-4years404-5years80Over5years1005.13AccountsreceivablesfinancingTheaccountsreceivablesfinancingoftheCompanyrefertothenotesreceivablesmeasuredatfairvaluethroughothercomprehensiveincomeonthebalancesheetdate.Formoredetails,seeNote3-10Financialinstruments.5.14OtherreceivablesThemethodofdeterminingtheexpectedcreditlossofotherreceivablesandaccountingtreatmentmethod:Asforotherreceivables,regardlessofwhetherthereisasignificantfinancingcomponent,theCompanyalwaysmeasurestheprovisionforlossbasedontheamountequivalenttotheexpectedcreditlossovertheentirelife,andtheresultingincreaseorreversalofprovisionforlossshallbeincludedinthecurrentprofitorlossasgainsorlossesonimpairment.Theaccrualmethodisasfollows:(1)Whenthereisobjectiveevidenceshowingthattheotherreceivablehasincurredcreditimpairment,theCompanyshallmakebaddebtprovisionfortheotherreceivableandrecognizetheexpectedcreditloss.(2)Whentheinformationabouttheexpectedcreditlossofasinglefinancialassetcannotbeevaluatedatareasonablecost,theCompanyshalldividetheotherreceivablesportfolioaccordingtocreditriskcharacteristicsandmeasuretheexpectedcreditlossbasedonportfolios.PortfolionameProvisionmethodRiskportfolioExpectedcreditlossOtherportfolioNobaddebtprovisionOtherportfolioreferstothenormalintercoursefundsamongtheCompanyandbusinessesunderthesamecontrol,therecoveryofwhicharecontrollablewithnorisks.Thus,nobaddebtprovisionwasmade.TheCompanycombinestheotherreceivablesclassifiedasriskportfolioinaccordancewithsimilarcreditriskcharacteristics(aging),andcalculatestheexpectedcreditlossthroughtheexposureatdefaultandexpectedcreditlossrateovertheentirelifebasedonthecurrentsituationandpredictionoffutureeconomicsituationconsultinghistoricalcreditlossexperience.Thecomparativetableofthecreditlossrateisasfollows:2020InterimReportofLuzhouLaojiaoCo.,Ltd.94AgingExpectedlossprovisionrate%Within1year51-2years102-3years203-4years404-5years80Over5years1005.15Inventory(1)ClassificationofinventoryInventoriesareclassifiedas:rawmaterials,goodsinprogress,semi-finishedgoods,stockcommodities,revolvingmaterials(includingpackingmaterialsandlow-costconsumables).(2)MeasurementmethodofdispatchedinventoriesThestandardcostisusedfordailyaccountingofrawmaterials,andthedifferenceofmaterialcostshouldbecarriedforwardonamonthlybasistoadjustthestandardcostintotheactualcost;Thegoodsinprogressandsemi-finishedgoodsshallbeaccountedaccordingtotheactualcost,andtheweightedaveragemethodshallbeusedwhentheyarereceivedanddelivered.Theactualcostoftheinventoryattheendofthemonthaboveshallbetakenasthestandardcost,andthedeliveryshallbepricedaccordingtothestandardcost.Attheendofthemonth,thestandardcostoftheinventoryattheendofthemonthshallbeadjustedintotheactualcostthroughthecost-sharingdifference.(3)BasistodeterminenetrealizablevaluesofinventoriesandmethodofprovisionforstockobsolescenceAttheendoftheperiod,inventoryismeasuredaccordingtothelowerofcostandnetrealizablevalue.Thedifferencebetweeninventorycostandnetrealizablevalueishigherthantheprovisionforstockobsolescence,whichisrecordedintocurrentprofitandloss.Forinventoriesthatarerelatedtoproductrangesproducedandsoldinthesamedistrictorusedforthesameorsimilarultimatepurposeandaredifficulttobemeasuredseparatelyfromotherinventories,theCompanyprovidesforstockobsolescenceasawhole.Forinventoriesthathavelargequantitiesbutlowvalue,theCompanyprovidesforstockobsolescenceonacategorybasis.Thematerialsheldforproductionshallbemeasuredatcostifthenetrealizablevalueofthefinishedproductsishigherthanthecost.Ifadeclineinthevalueofmaterialsshowsthatthenetrealizablevalueofthefinishedproductsislowerthanthecost,thematerialsshallbemeasuredatthenetrealizablevalue.(4)InventorysystemTheCompanyadoptsperpetualinventorysystem.(5)Amortizationmethodofpackingmaterialsandlow-costconsumables2020InterimReportofLuzhouLaojiaoCo.,Ltd.95Itisamortizedinfullatonce.5.16ContractassetsTheCompanypresentscontractassetsorcontractliabilitiesonthebalancesheetaccordingtotherelationshipbetweenthefulfillmentofitscontractperformanceobligationsanditscustomers’payment.ConsiderationsthattheCompanyhastherighttocollectforcommoditiestransferredorservicesprovidedtocustomers(andsuchrightdependsonotherfactorsthantimelapses)arepresentedascontractassets.TheCompanypresentstherightpossessedtocollectconsiderationfromcustomersunconditionally(onlydependingonthepassingoftime)asaccountsreceivable.RefertoNote5.12forthedetailontheCompany’smethodofdeterminingtheexpectedcreditlossofcontractassetsandaccountingtreatmentmethod.5.17ContractcostsContractcostscompriseincrementalcostsincurredastheCompanyobtainsacontract,andcostsforcontractperformance.IncrementalcostsincurredastheCompanyobtainsacontractrefertothosecostswhichwillnotincurwithoutenteringintoacontract(suchassalescommission).Ifitisexpectedthatthecostsarerecoverable,theCompanywillrecognizethecostsincurredtoobtainacontractasoneformofassets.Incasethatthetermofassetamortizationisshorterthanoneyearoronenormaloperatingcycle,thecostswillberecognizedasprofitandlossofthecurrentperiodafteroccurrence.Ifthecostsincurredfromcontractperformancefalloutsidetheinventoryorthescopeofotherenterpriseaccountingstandardsandsatisfyallofthefollowingconditions,theCompanywillrecognizethecostsforcontractperformanceasassets:a)Thecostsaredirectlyrelatedtooneexistingcontractorcontractthatisexpectedtobeobtained;b)ThecostsenrichtheCompany'sresourcesforfuturecontractperformance(includingcontinualfulfillment);c)Thecostsareestimatedtoberecovered.Assetsrecognizedfromcostsincurredtoobtainacontractandcostsforcontractperformance(hereinafterreferredtoas"assetsrelatedtocontractcosts")willbeamortizedbasedonthebasisthesamewiththeincomefromcommoditiesorservicesrelatedtotheassets,andwillberecognizedasprofitandlossofthecurrentperiod.Incasethatthebookvalueofassetsrelatedtocontractcostsishigherthanthedifferenceofthetwoitemsbelow,theCompanywillsetasideprovisionsforassetsimpairmenttodealwiththeextrapart,andrecognizethatpartasimpairmentlosses:a)Estimatedresidualconsiderationtobeobtainedfromtransferofcommoditiesorservicesrelatedtotheassets;b)Estimatedcostsincurredfromtransferoftherelevantcommoditiesorservices.5.18Assetsheldforsale(1)Classificationofnon-currentassetsheldforsaleordisposalgroupsTheCompanyshallclassifythenon-currentassetsordisposalgroupmeetingthefollowingconditionsintotheheld-for-salecategory:Theassets(ordisposalgroup)mustbeavailableforimmediatesaleinitspresentconditionsubjectonlytotermsthatareusualandcustomaryforsalesofsuchassets(ordisposalgroups);Itssalemustbehighlyprobable.;TheCompanyhasalreadymadeadecisiontodisposethecomponentandhasacommitmentfromthepurchaser,thetransferwillbecompletedwithin2020InterimReportofLuzhouLaojiaoCo.,Ltd.96oneyear.Thenon-currentassetsordisposalgroupacquiredbytheCompanyforresaleshallbedividedintotheheld-for-salecategoryontheacquisitiondateifitmeetstheconditionthat"thesaleisexpectedtobecompletedwithinoneyear"andifitislikelytomeetotherconditionsfortheheld-for-salecategorywithinashortperiod(usuallythreemonths).DuetooneofthefollowingreasonsthattheCompanyisunabletocontrol,leadingtothetransactionsuncompletedwithnon-relatedpartywithinoneyear,andtheCompanystillcommitstosalenon-currentassetsordisposalgroups,itcancontinuetoaccountfornon-currentassetsordisposalgroupsasheld-for-sale:thebuyeroranyotherpartyaccidentallysetsaleextensioncondition.TheCompanyhastotakeactionintimeaccordingtotheseconditionsandtheextensionproblemisexpectedtobesolvedwithinoneyear;Inrarecases,theCompanyhastakenthenecessarystepsandre-satisfytheholdforsalecategoryconditionwithinthefirstyearforthenewcircumstanceswhichcauseditunabletocompletethesaleofthenon-currentassetsordisposalgroupwithinoneyear.Measurementofnon-currentassetsordisposalgroupsheldforsalea.InitialmeasurementandsubsequentmeasurementWhentheCompanymeasureanon-currentassetordisposalgroupheldforsaleinitiallyorre-measureatbalancesheetdatesubsequently,theimpairmentlossshouldberecognizedifthebookvalueishigherthanfairvaluelesscoststosellattheamountofthedifferenceofthesetwoinprofitandloss,theprovisionforassetsheldforsaleneedtoberecognizedatthesametime.Forthenon-currentassetsordisposalgroupsdividedintoheld-for-salecategoryontheacquisitiondate,theyshallbemeasuredastheloweroftheinitialmeasurementamountandthenetamountafterdeductingthesellingexpensesfromthefairvalueundertheassumptionthatitisnotdividedintoheld-for-salecategoriesattheinitialmeasurement.Exceptforthenon-currentassetsorthedisposalgroupsobtainedintheenterprisemerger,thedifferencecausedbythenon-currentassetsorthedisposalgroupstakingthenetamountafterthefairvalueminusthesellingexpensesastheinitialmeasurementamountshallberecordedintothecurrentprofitandloss.Fortheimpairmentofdisposalgroup,itshouldwriteoffgoodwillifexisting,andthenwritedowntherelatedassetsproportionally.Depreciationoramortizationshouldceaseforthenon-currentassetheldforsale.Interestandotherchargesonliabilitiesinthedisposalgroupsheldforsalecontinuetoberecognized.b.AccountingtreatmentofreversalofimpairmentlossIfthenetamountofthenon-currentassetsheldforsaleonthesubsequentbalancesheetdateincreasesafterthefairvalueminusthesellingexpenses,theamountpreviouslywrittendownshallbereversed,andtheamountoftheimpairmentlossrecognizedafterbeingclassifiedastheheld-for-saleshallbereversed,andthereversedamountshallbeincludedinthecurrentprofitandloss.Theimpairmentlossrecognizedbeforetheclassificationoftheheld-for-saleshallnotbereversed.2020InterimReportofLuzhouLaojiaoCo.,Ltd.97Ifthenetamountofthedisposalgroupsheldforsaleonthesubsequentbalancesheetdateincreasesafterthefairvaluedeductingthesellingexpenses,theamountpreviouslywrittendownshallbereversed,andtheamountoftheimpairmentlossrecognizedasnon-currentassetsafterbeingclassifiedastheheld-for-saleshallbereversed,andthereversedamountshallbeincludedinthecurrentprofitandloss.Thebookvalueofthegoodwillthathasbeenwrittendownandtheimpairmentlossesrecognizedbeforetheclassificationoftheheld-for-saleshallnotbereversed.Thesubsequentreversedamountoftheimpairmentlossrecognizedbythedisposalgroupsheldforsaleshallbeincreasedinproportiontothebookvalueofnon-currentassetsexceptgoodwillinthedisposalgroups.c.Theaccountingtreatmentthatdoesnotcontinuetobeclassifiedasheld-for-saleandtheterminationofrecognitionNon-currentassetsordisposalgroupsthatarenolongerdividedintoheld-for-salecategoryornon-currentassetsareremovedfromdisposalgroupsheldforsalebecauseofnolongermeetingtheconditionofclassificationofheld-for-sale,theyaremeasuredatlowerofthefollowingtwo:bookvaluebeforebeingclassifiedastheheld-for-saleconsideringdepreciation,amortizationorimpairmentthatshouldhavebeenrecognizedundertheassumptionthatitisnotdividedintoheld-for-salecategories;andrecoverableamount.Whenterminatingtherecognitionofthenon-currentassetsheldforsaleorthedisposalgroups,theunrecognizedgainsorlossesshallberecordedintothecurrentprofitandloss.5.19Long-termequityinvestment(1)JudgmentcriteriaofcommoncontrolandsignificantinfluenceCommoncontrolonanagreementwithotherparticipantsreferstotheCompanysharecontrolwithotherparticipantsonanarrangementaccordingtorelevantconventions,whichexistsonlywhendecisionsabouttherelevantactivitiesrequiretheunanimousconsentofthepartiessharingcontrol.Thisarrangementbelongstojointventure.WherethejointventurearrangementismadebyaseparateentityandtheCompanyisjudgedtohaverightstothenetassetsofsuchaseparateentityaccordingtotherelevantconventions.Suchaseparateentityshallberegardedasajointventureandaccountedbytheequitymethod.IftheCompanyisjudgedtobenotentitledtothenetassetsoftheseparateentityaccordingtorelevantconventions,theseparateentityshallberegardedasajointventureandtheCompanyshallrecognizetheitemsrelatedtothesharesofthejointventureandperformaccountingtreatmentinaccordancewithrelevantaccountingstandards.Theterm‘significantinfluence’referstothepowertoparticipateindecision-makingonthefinancialandoperatingpoliciesoftheinvestee,butwithnocontrolorjointcontrolovertheformulationofthesepolicies.TheCompanyjudgesthatithasasignificantimpactontheinvestedentitythroughoneormoreofthefollowingsituationsandtakingallthefactsandcircumstancesintoconsideration:Dispatchrepresentativestotheboardofdirectorsorsimilarauthoritiesoftheinvestee.Toparticipateinthefinancialandbusinesspolicymakingprocessoftheinvestee.Significanttransactionswiththeinvestee.2020InterimReportofLuzhouLaojiaoCo.,Ltd.98Dispatchmanagementpersonneltotheinvestee.Toprovidekeytechnicaldatatotheinvestee.(2)Determinationoftheinitialinvestmentcosta.Long-termequityinvestmentresultingfromcombinationBusinesscombinationundercommoncontrol:Forthelong-termequityinvestmentsobtainedbycashpaid,non-monetaryassetspaidorassumedliabilitiesandtheequitysecuritiesissuedbytheacquirer,onthemergerdate,theinitialinvestmentcostoflong-termequityinvestmentshallbetakenastheshareoftheowner'sequityoftheinvesteeinthebookvalueofthefinalcontrolparty'sconsolidatedfinancialstatements.Iftheinvesteeunderbusinesscombinationundercommoncontrolcanbecontrolledduetoadditionalinvestmentorotherreasons,theinitialinvestmentcostoflong-termequityinvestmentshallbedeterminedonthemergerdateaccordingtotheshareofthenetassetsoftheinvesteeinthebookvalueofthefinalcontrolparty'sconsolidatedfinancialstatements.Thedifferencebetweentheinitialinvestmentcostofthelong-termequityinvestmentonthemergerdateandsumofthebookvalueofthelong-termequityinvestmentbeforethemergerandthenewconsiderationofacquiringsharesonthemergerdateshallberecordedtoadjusttheequitypremium.Iftheequitypremiumisinsufficienttobewrittendown,theretainedearningsshallbewrittendown.Businesscombinationnotundercommoncontrol:TheCompanytakestheinitialinvestmentcostoflong-termequityinvestmentasthemergercostdeterminedonthepurchasedate.Iftheinvesteecanbecontrolledunderbusinesscombinationnotundercommoncontrolduetoadditionalinvestmentorotherreasons,thepreviousbookvalueoftheequityinvestmentheldplusthesumofthenewlyaddedinvestmentcostshallbetakenastheinitialinvestmentcostcalculatedaccordingtothecostmethod.b.Long-termequityinvestmentobtainedbyothermeansForthelong-termequityinvestmentsobtainedbycashpaid,theCompanyrecognizestheirfairvalueastheinitialinvestmentcosts.Forthelong-termequityinvestmentsacquiredbytheissueofequitysecurities,theinitialinvestmentcostshallbethefairvalueoftheequitysecuritiesissued.Forlong-termequityinvestmentsobtainedbynon-monetaryassetsexchange,undertheconditionthatanexchangeofnon-monetaryassetsisofcommercenatureandthefairvalueofassetsexchangedcanbereliablymeasured,non-monetaryassetstradedinisinitiallystatedatthefairvalueoftheassetstradedout,unlessthereisconclusiveevidenceindicatingthatthefairvalueoftheassetstradedinismorereliable;iftheaboveconditionsarenotsatisfied,initialinvestmentcostsoflong-termequityinvestmentstradedinshallberecognizedatthebookvalueoftheassetstradedoutandtherelevanttaxesandsurchargespayable.Forlong-termequityinvestmentsobtainedbydebtrestructuring,theCompanyrecognizesthefairvalueofsharesofdebt-for-equityswapastheinitialinvestmentcosts.2020InterimReportofLuzhouLaojiaoCo.,Ltd.99(3)Subsequentmeasurementandrecognitionofprofitandlossa.Long-termequityinvestmentsmeasuredunderthecostmethodLong-termequityinvestmentsthatcancontroltheinvesteearemeasuredunderthecostmethod.Forlong-termequityinvestmentsaccountedatthecostmethod,exceptcashdividendsorprofitsdeclaredbutnotyetdistributedwhichareincludedintheactualpaymentsortheconsiderationactuallypaidfortheinvestment,thecashdividendsorprofitsdeclaredbytheinvesteeshallberecognizedastheinvestmentincomeirrespectiveofnetprofitsrealizedbytheinvesteebeforeinvestmentorafterinvestment.b.Long-termequityinvestmentsmeasuredundertheequitymethodForthelong-termequityinvestmentwhichhasjointcontrolorsignificantinfluenceovertheinvestee,theequitymethodisadoptedforaccounting.Forlong-termequityinvestmentsmeasuredattheequitymethod,iftheinitialinvestmentcostsarehigherthantheinvestor’sattributableshareofthefairvalueoftheinvestee’sidentifiablenetassets,noadjustmentwillbemadetotheinitialcostsofthelong-termequityinvestments;iftheinitialinvestmentcostsarelowerthantheinvestor’sattributableshareofthefairvalueoftheinvestee’sidentifiablenetassets,thedifferenceshallberecognizedincurrentprofitandloss.TheCompanyshall,accordingtothesharesofnetprofitsandothercomprehensiveincomerealizedbytheinvesteethatshallbeenjoyedorbornebytheCompany,recognizetheprofitandlossontheinvestmentsandadjustthebookvalueofthelong-termequityinvestments.WhenrecognizingthenetprofitsandlossesandothercomprehensiveincomeoftheinvesteethattheCompanyshallenjoyorbear,theCompanyshallmakearecognitionandcalculationbasedonthenetbookprofitsandlossesoftheinvesteeafterappropriateadjustments.However,wheretheCompanyisunabletoobtaintherelevantinformationduetofailuretoreasonablydeterminethefairvalueoftheinvestee’sidentifiableassets,minordifferencebetweentheinvestee’sidentifiableassetsandthebookvaluethereoforotherreasons,theprofitsorlossesontheinvestmentsshallbedirectlycalculatedandrecognizedbasedonthenetbookprofitsandlossesoftheinvestee.TheCompanyshallcalculatethepartdistributedfromcashdividendsorprofitsdeclaredbytheinvesteeandcorrespondinglyreducethebookvalueofthelong-termequityinvestments.Whenrecognizingtheincomefrominvestmentsinassociatesandjointventures,theCompanyshallwriteoffthepartofincomesfrominternalunrealizedtransactionsbetweentheCompanyandassociatesandjointventureswhichareattributabletotheCompanyandrecognizetheprofitandlossoninvestmentsonsuchbasis.WherethelossesoninternaltransactionsbetweentheCompanyandtheinvesteeareimpairmentofrelatedassets,fullamountsofsuchlossesshallberecognized.ProfitandlossfrominternalunrealizedtransactionsbetweentheCompany’ssubsidiariesincludedintothecombinationscopeandassociatesandjointventuresshallbewrittenoffaccordingtotheaboveprinciplesandtheprofitandlossoninvestmentsthereaftershallberecognizedonsuchbasis.2020InterimReportofLuzhouLaojiaoCo.,Ltd.100WhentheshareofnetlossoftheinvesteeattributabletotheCompanyisrecognized,itistreatedinthefollowingsequence:Firstly,writeoffthebookvalueofthelong-termequityinvestments;wherethebookvalueofthelong-termequityinvestmentsisinsufficienttocovertheloss,investmentlossesarerecognizedtotheextentthatbookvalueoflong-termequitywhichformnetinvestmentintheinvesteeinothersubstancesandthebookvalueoflong-termreceivablesshallbewrittenoff;afteralltheabovetreatments,iftheCompanystillassumesadditionalobligationaccordingtoinvestmentcontractsoragreements,theobligationexpectedtobeassumedshouldberecognizedasprovisionandincludedintotheinvestmentlossinthecurrentperiod.Iftheinvesteeisprofitableinsubsequentaccountingperiods,theCompanyshalltreatthelossinreverseorderagainstthatdescribedaboveafterdeductingunrecognizedshareofloss:i.e.writedownthebookvalueoftherecognizedprovision,thenrestorethebookvalueoflong-terminterestswhichsubstantiallyformnetinvestmentsintheinvestee,thenrestorethebookvalueoflong-terminvestments,andrecognizeinvestmentincomeatthesametime.5.20Fixedassets(1)RecognitionoffixedassetsFixedassetsrefertotangibleassetsheldforthepurposeofproducingcommodities,providingservices,rentingorbusinessmanagementwithusefullifeexceedingoneaccountingyear.Fixedassetsarerecognizedwhenthefollowingcriteriaaresatisfiedsimultaneously:ItisprobablethattheeconomicbenefitsrelatingtothefixedassetswillflowintotheCompany;thecostofthefixedassetscanbemeasuredreliably.(2)DepreciationoffixedassetsCategoryDepreciationmethodEstimatedusefullife(Year)Estimatedresidualvaluerate(%)Annualdepreciationrate(%)BuildingsandConstructionsStraight-linemethod10-4559.50-2.11SpecialequipmentStraight-linemethod5-35519.00-2.71UniversalequipmentStraight-linemethod4-25523.75-3.80TransportationequipmentStraight-linemethod6515.83OtherequipmentStraight-linemethod4-16523.75-5.94Exceptforfixedassetsstillinuseafterfulldepreciation,theCompanydepreciatesallfixedassetsandcalculatesthedepreciationinthestraight-linedepreciationmethod.Basedonthenatureanduseoffixedassets,theCompanydeterminestheirservicelifeandestimatednetsalvagevalueandreviewstheirservicelife,estimatednetsalvagevalueanddepreciationmethodattheendoftheyear.Changesintheservicelife,estimatednetsalvagevalueanddepreciationmethodofthesametypeofassetsaretreatedaschangesinaccountingestimation.Note:TheCompany’snewly-builtbrewingproductionlines,packagingproductionlinesandwarehousingassets,andthehousesandbuildings,specialandgeneralequipmentformedthereofareobviously2020InterimReportofLuzhouLaojiaoCo.,Ltd.101differentfromtheexistingsametypesofassetsandhaveobviouslylongerestimatedservicelifethanthesametypesoffixedassets.Themaximumyearsofdepreciationfordifferenttypesofthenewly-builtfixedassetsareasfollows:45yearsforhousesandbuildings;35yearsforspecialequipmentand25yearsforgeneralequipment.Duringtheyear,someoftheCompany’sprojectsinprogressreachedtheexpectedusablestateandweretransferredintofixedassets.(3)Recognitionstandard,valuationmethodanddepreciationmethodforfixedassetsacquiredunderfinancingleaseIfthepurchasepriceofafixedassetexceedsthenormalcreditconditionsandthepaymentisdelayed,whichhasafinancingnature,thecostofthefixedassetshallbedeterminedonthebasisofthepresentvalueofthepurchaseprice.Thedifferencebetweentheactualpricepaidandthepresentvalueofthepurchaseprice,unlessitshouldbecapitalized,shallberecordedintothecurrentprofitandlossinthecreditperiod.Forfixedassetsacquiredunderfinancinglease,attheinceptionofthelease,theCompanyshallrecognizesitatthelowerofthefairvalueoftheleasedassetsorthepresentvalueoftheminimumleasepayments.FixedassetsacquiredunderfinancingleaseisadaptedthesamedepreciationmethodastheoneusedonotherfixedassetsownedbytheCompany.IfthereisreasonableassurancethattheCompanywillobtaintheownershipoftheleasedassetswhentheleasetermexpires,theleasedassetsshouldbedepreciatedoveritsusefullife;ifthereisnoreasonableassurancethattheCompanywillobtaintheownershipoftheleasedassetswhentheleasetermexpires,theleasedassetsshouldbedepreciatedovertheshorteroftheleasetermortheusefullifeoftheleasedassets.5.21Constructioninprogress(1)Constructioninprogressreferstovariousconstructionandinstallationworkscarriedoutfortheconstructionorrepairoffixedassets,includingtheactualexpenditureincurredinnewconstruction,reconstructionandexpansion,andthenetvalueoffixedassetstransferredfromthereconstructionandexpansionprojects.(2)Constructioninprogressisaccountedonanindividualprojectbasiswithactualcostvaluationmethod.Theborrowingcostsincurredbeforetheprojectsreachtheintendeduseconditionshallbeincludedintheprojectcost.Thefixedassetsshallbecarriedforwardinthemonthwhentheprojectisqualifiedforacceptanceanddeliveryforuse.Forthosethathavereachedtheintendeduseconditionbuthavenotyetcompletedthefinalaccount,fromthedateofreachingtheintendedusecondition,accordingtotheprojectbudget,constructioncostortheactualcostoftheproject,thecosttransferredtothefixedassetsshallbedeterminedaccordingtotheestimatedvalue,andthedepreciationshallberecognized;Afterthecompletionofthefinalaccount,theoriginalprovisionalvalueshallbeadjustedaccordingtotheactualcost,buttheamountofdepreciationaccruedshallnotbeadjusted.(3)TheloaninterestandrelatedexpensesincurredduringtheconstructionperiodshallbecapitalizedintothecostoftheconstructioninProgress.(4)Onthebalancesheetdate,theconstructioninprogressisrecognizedatthelowerofbookvalueandrecoverableamount.2020InterimReportofLuzhouLaojiaoCo.,Ltd.1025.22Borrowingcosts(1)ScopeofborrowingcostsanditscapitalizationconditionsTheCompany’sborrowingcostscapitalizedduringperiodofcapitalizationarerelevantloanexpensesdirectlyattributabletotheassetseligibleforcapitalization,includinginterestthereon,amortizationofdiscountsorpremiums,ancillaryexpensesandexchangedifferencesincurredfromforeigncurrencyloan,etc.Borrowingcostsarecapitalizedwhenthefollowingthreeconditionsaremetsimultaneously:①theassetexpenditurehasoccurred,②theborrowingcostshaveoccurred,③thepurchaseandconstructionactivitiesnecessarytomaketheassetsreachtheintendeduseconditionhavestarted.(2)RecognitionofcapitalizedamountsThecapitalizedamountofborrowingexpensesiscalculatedasfollows:Asforspecialloanborrowedforacquiringandconstructingorproducingassetseligibleforcapitalization,borrowingcostsofspecialloanactuallyincurredinthecurrentperiodlesstheinterestincomeoftheloansunusedanddepositedinbankorreturnontemporaryinvestmentshouldberecognizedasthecapitalizationamountofborrowingcosts.Asforgeneralloansusedforacquiringandconstructingorproducingassetseligibleforcapitalization,theinterestofgeneralloanstobecapitalizedshouldbecalculatedbymultiplyingtheweightedaverageofassetdisbursementsofthepartofaccumulatedassetdisbursementsinexcessofspecialloansbythecapitalizationrateofusedgeneralloans.Duringtheperiodofcapitalization,thecapitalizedamountofinterestofeachaccountingperiodshallnotexceedthecurrentactualinterestoftherelevantloans.Wheretherearediscountsorpremiumsonloans,theamountsofinterestforeachaccountingperiodshouldbeadjustedtakingaccountofamortizablediscountorpremiumamountsfortheperiodbyeffectiveinterestmethod.Auxiliaryexpensesincurredfromspecialloansbeforetheacquiredorconstructedassetseligibleforcapitalizationreachtheworkingconditionfortheirintendeduseorsaleshouldbecapitalizedwhentheyincurandchargedtothecostsofassetseligibleforcapitalization;thoseincurredaftertheacquiredorconstructedassetseligibleforcapitalizationreachtheworkingconditionfortheirintendeduseorsaleshouldberecognizedascostsaccordingtotheamountsincurredwhentheyincurandchargedtothecurrentprofitorloss.(3)RecognitionofcapitalizationrateForaspecialloanforthepurchaseandconstructionoffixedassets,thecapitalizationrateistheinterestrateoftheloan;Formorethanonespecialloanfortheacquisitionandconstructionoffixedassets,thecapitalizationrateisaweightedaverageinterestrateoftheseloans.(4)CapitalizationsuspensionofborrowingcostsIftheacquisitionandconstructionorproductionactivitiesofassetseligibleforcapitalizationareinterruptedabnormallyandthisconditionlastsformorethanthreemonths,thecapitalizationofborrowingcostsshouldbesuspended.Theborrowingcostsincurredduringinterruptionarechargedtoprofitorlossforthecurrentperiod,andthecapitalizationofborrowingcostscontinueswhentheacquisitionandconstructionorproductionactivitiesoftheassetresume.2020InterimReportofLuzhouLaojiaoCo.,Ltd.103(5)CapitalizationcessationofborrowingcostsCapitalizationofborrowingcostsshouldceasewhentheacquiredandconstructedorproducedassetseligibleforcapitalizationhavereachedtheworkingconditionfortheirintendeduseorsale.Borrowingcostsincurredaftertheassetseligibleforcapitalizationhavereachedtheworkingconditionfortheirintendeduseorsaleshouldberecognizedasthecurrentprofitandlosswhentheyincur.Ifpartsoftheacquiredandconstructedorproducedassetsarecompletedseparatelybuttheassetscannotbeusedorsoldexternallyuntiloverallcompletion,thecapitalizationofborrowingcostsshouldceaseatthetimeofoverallcompletionofthesaidassets.5.23Intangibleassets(1)Measurementmethod,usefullife,impairmenttestMeasurementmethoda.Costsofintangibleassetspurchasedincludepurchaseprice,relatedtaxandexpensesandotherexpenditurethatcanbedistributedtotheassetdirectlytoreachitsexpecteduse.b.Intangibleassetsinvestedbyinvestorsshallbevaluedatthevalueagreeduponintheinvestmentcontractoragreement;c.Expensesontheresearchphaseofinternallyresearchedanddevelopedintangibleassetsshallbeincludedinthecurrentprofitandlosswhentheyincur;Theexpendituresincurredinthedevelopmentstageoftheinternalresearchanddevelopmentprojectsshallberecognizedasintangibleassetswhenthefollowingconditionsaremet;otherwise,theyshallberecordedintothecurrentprofitandlosswhentheyincur.i.Itistechnicallyfeasibletofinishintangibleassetsforuseorsale;ii.Itisintendedtofinishanduseorselltheintangibleassets;iii.Theusefulnessofmethodsforintangibleassetstogenerateeconomicbenefitsshallbeproved,includingbeingabletoprovethatthereisapotentialmarketfortheproductsmanufacturedbyapplyingtheintangibleassetsorthereisapotentialmarketfortheintangibleassetsthemselvesortheintangibleassetswillbeusedinternally;iv.Itisabletofinishthedevelopmentoftheintangibleassets,andabletouseorselltheintangibleassets,withthesupportofsufficienttechnologies,financialresourcesandotherresources.v.Theexpenditureattributabletotheintangibleassetduringitsdevelopmentphasecanbemeasuredreliably.d.Ifpaymentofthepurchasepriceofintangibleassetscanbedeferredandexceedsnormalcreditconditions,thepurchasehasthenatureoffinanceinfactandcostoftheintangibleassetshallbedeterminedonthebasisofpresentvalueofthepurchaseprice.Thedifferencebetweentheamountactuallypaidandthepresentvalueofthepurchasepriceshouldberecordedintocurrentprofitorlossotherthanthoseshouldbecapitalizedduringthecreditperiod.UsefullifeandamortizationmethodForintangibleassetswithlimitedusefullife,amortizationshallbecarriedoutaccordingtothestraight-linemethodwithintheperiodthatbringseconomicbenefitstotheenterprise.Attheendofeachperiod,theusefullifeandamortizationmethodofintangibleassetswithlimitedservicelifeshallbereviewed.Iftherearedifferenceswiththeoriginalestimates,correspondingadjustmentsshallbemade.Intangibleassetswhoseusefullifeisuncertainshallberegardedasintangibleassetsifitisimpossibletoforeseetheterminwhichintangibleassetsbringeconomicbenefitstotheenterprise.Intangibleassets2020InterimReportofLuzhouLaojiaoCo.,Ltd.104withuncertainusefullifeshallnotbeamortizedduringtheholdingperiod,andthelifeofintangibleassetsshallbereviewedattheendofeachperiod.Ifitisstilluncertainafterthereviewattheendoftheperiod,theimpairmenttestshallcontinueduringeachaccountingperiod.Attheendofeachperiod,theusefullifeofintangibleassetswithuncertainservicelifeshallbereviewed.ImpairmenttestOnthebalancesheetdate,intangibleassetsarevaluedatthelowerofbookvalueandrecoverableamount.(2)InternalresearchanddevelopmentexpenditureaccountingpolicyTheexpendituresincurredinthedevelopmentstageoftheinternalresearchanddevelopmentprojectsshallberecognizedasintangibleassetswhenthefollowingconditionsaremet;otherwise,theyshallberecordedintothecurrentprofitandlosswhentheyoccur.a.Itistechnicallyfeasibletofinishintangibleassetsforuseorsale;b.Itisintendedtofinishanduseorselltheintangibleassets;c.Theusefulnessofmethodsforintangibleassetstogenerateeconomicbenefitsshallbeproved,includingbeingabletoprovethatthereisapotentialmarketfortheproductsmanufacturedbyapplyingtheintangibleassetsorthereisapotentialmarketfortheintangibleassetsthemselvesortheintangibleassetswillbeusedinternally;d.Itisabletofinishthedevelopmentoftheintangibleassets,andabletouseorselltheintangibleassets,withthesupportofsufficienttechnologies,financialresourcesandotherresources.e.Theexpenditureattributabletotheintangibleassetduringitsdevelopmentphasecanbemeasuredreliably.Developmentexpendituresthathavebeenrecordedintoprofitandlossinpreviousperiodsarenotrecognizedasassetsinsubsequentperiods.Thecapitalizedexpenditureinthedevelopmentstageislistedasdevelopmentexpenditureinthebalancesheet,anditwillberecordedintointangibleassetsfromthedatewhentheprojectreachesitsintendedpurpose.5.24Long-termassetsimpairmentOnthebalancesheetdate,theCompanymakesajudgmentonwhethertherearesignsofpossibleimpairmentoflong-termassets.Ifthereareimpairmentindicatorsoflong-termassets,theCompanyestimatestherecoverableamountbasedonindividualasset.Ifrecoverableamountofindividualassetisdifficulttobeestimated,theCompanyshouldrecognizetherecoverableamountoftheassetgroupwhichtheindividualassetbelongsto.Therecoverableamountisthehigheroffairvalueslesscostsofdisposalandthepresentvaluesofthefuturecashflowsexpectedtobederivedfromtheasset.Ifthemeasurementresultofrecoverableamountshowsthatrecoverableamountofthelong-termassetsislessthanitsbookvalue,thebookvalueshallbewrittendowntotherecoverableamount,andtheamountwrittendownshallberecognizedastheimpairmentlossofassets,recordedintothecurrentprofitandloss,andthecorrespondingimpairmentprovisionofassetsshallbemadeatthesametime.Onceimpairmentlossstatedaboveisrecognized,reversalisnotallowedinthesubsequentaccountingperiods.2020InterimReportofLuzhouLaojiaoCo.,Ltd.105Aftertherecognitionoftheimpairmentloss,thedepreciationoramortizationexpenseoftheimpairmentassetshallbeadjustedaccordinglyinthefutureperiodsoastosystematicallyapportiontheadjustedbookvalueoftheasset(deductingtheexpectednetsalvagevalue)withintheremainingservicelifeoftheasset.TheCompanyshouldperformimpairmenttestforgoodwillandintangibleassetswithindefinitelifeatleastateachyearend,nomatterwhetherthereisimpairmentindicator.Goodwillshallbecombinedwithitsrelatedassetgrouporassetgroupportfoliosoastoperformanimpairmenttest.WhentheCompanyperformsanimpairmenttestonrelevantassetgrouporassetgroupportfolioincludinggoodwill,iftherearesignsofimpairment,theCompanyshallfirstlyperformanimpairmenttestonassetgrouporassetgroupportfolioexcludinggoodwillandcalculatetherecoverableamount,andcomparewiththerelatedbookvalue,recognizethecorrespondingimpairmentloss.Then,theCompanyperformsanimpairmenttestonrelevantassetgrouporassetgroupportfolioincludinggoodwill,andcomparesthebookvalueoftherelevantassetgroupsorassetgroupportfolio(includingproportionalbookvalueofgoodwill)withitsrecoverableamount.Iftherecoverableamountofrelevantassetgrouporassetgroupportfolioislessthanitsbookvalue,theCompanyshallrecognizeimpairmentlossofgoodwill.5.25Long-termdeferredexpensesLong-termdeferredexpensesshallbeinitiallymeasuredaccordingtotheactualcostsincurred.Itisamortizedusingthestraight-linemethodoverthebeneficialperiod.Ifitcannotbenefitthefollowingaccountingperiod,theamortizedvalueoftheitemthathasnotbeenamortizedwillbetransferredtothecurrentprofitandloss.5.26ContractliabilitiesTherecognitionmethodofcontractliabilities:TheCompanypresentscontractassetsorcontractliabilitiesonthebalancesheetaccordingtotherelationshipbetweenthefulfillmentofitscontractperformanceobligationsanditscustomers’payment.ObligationstobefulfilledbytheCompanyoftransferringcommoditiesorprovidingservicestocustomers,astheCompanyhasreceivedorshouldreceivecustomers’considerations,arepresentedascontractliabilities.5.27Employeebenefits(1)Accountingtreatmentmethodofshort-termbenefitsShort-termbenefitsarethebenefitsthattheCompanyexpectstopayinfullwithin12monthsafterthereportingperiodinwhichtheemployeeprovidedrelevantservices,excludingthecompensationforemploymenttermination.AccruedshorttermbenefitswillberecognizedasliabilityduringtheaccountingperiodinwhichtheemployeeisprovidingtherelevantservicetotheCompany.Theliabilitywillbeincludedinthecurrentprofitandlossortherelevantassetscost.(2)Accountingtreatmentmethodofpost-employmentbenefitsa.DefinedcontributionplanThedefinedcontributionplanoftheCompanyincludespaymentsofbasicpensionandunemploymentinsurancecalculatedaccordingtothelocalpaymentbaseandproportion.Theamountshallbeincludedintotheprofitandlossortherelevantassetscostfortheaccountingperiodinwhichtheemployee2020InterimReportofLuzhouLaojiaoCo.,Ltd.106providestheservicetotheCompany.b.DefinedbenefitplanAccordingtotheformuladeterminedbytheexpectedaccumulativeprojectedunitcreditmethod,theCompanywillrecordthebenefitobligationgeneratedbythedefinedbenefitplanbelongingtotheperiodduringinwhichtheemployeeprovidestheserviceintothecurrentprofitandlossortherelevantassetscost.Thedeficitorsurplusresultingfromthepresentvalueminusthefairvalueoftheassetsofadefinedbenefitplanisrecognizedasanetliabilityornetassetofadefinedbenefitplan.Ifthereissurplusinthedefinedbenefitplan,thenetassetsofthedefinedbenefitplanshallbemeasuredatthelowerofthesurplusandtheupperlimitofassetsofthedefinedbenefitplan.Alldefinedbenefitplanobligations,includingthoseexpectedtobepaidwithinthetwelvemonthsfollowingtheendoftheannualreportingperiodinwhichtheemployeeprovidestheservice,arediscountedbasedonthemarketyieldandhighqualitycorporatebondsinanactivemarketthatmatchthedurationandcurrencyofdefinedbenefitplanobligationsonthebalancesheetdate.Theservicecostsgeneratedbythedefinedbenefitplanandthenetinterestonnetliabilitiesornetassetsofthedefinedbenefitplanareincludedinthecurrentprofitandlossorrelevantassetscost;Changesinnetliabilitiesornetassetsgeneratedbythere-measurementofthedefinedbenefitplanareincludedinothercomprehensiveincomeandarenotreversedtoprofitandlossinsubsequentaccountingperiods.Atthetimeofsettlementofthedefinedbenefitplan,thesettlementgainsorlossesshallberecognizedaccordingtothedifferencebetweenthepresentvalueoftheobligationsofthedefinedbenefitplanandthesettlementpricedeterminedonthesettlementdate.(3)AccountingtreatmentmethodofterminationbenefitsEmployeebenefitsliabilitiesshallberecognizedandincludedintoprofitorlossforthecurrentperiodontheearlierdateofthetwofollowingcircumstances:a.WhentheCompanyisnotabletowithdrawthebenefitsfromterminationofemploymentorresignationpersuasionunilaterally;b.WhentheCompanyrecognizescostsandfeesrelevanttoreformingtheterminationbenefitspayment.Asfortheterminationbenefitsthatcannotbefullypaidwithin12monthsaftertheendoftheannualreportperiod,theCompanyshallchooseanappropriatediscountrateandrecorditintocurrentprofitandlossbasedonit.(4)Accountingtreatmentmethodofotherlong-termemployeebenefitsOtherlong-termemployeebenefitsareallemployeebenefitsotherthanshort-termbenefits,post-employmentbenefitsandterminationbenefits.Otherlong-termemployeebenefitsprovidedbytheCompanytotheemployeethatmeettheconditionsofthedefinedcontributionplanshallbetreatedinaccordancewiththesameprinciplesofthedefinedcontributionplan;Iftheconditionsfordefinedbenefitsaremet,netliabilitiesornetassetsofotherlong-termemployeebenefitsshallberecognizedandmeasuredinaccordancewiththerelevantprinciplesofthedefinedbenefitsplan.5.28Estimatedliabilities(1)Recognitioncriteriaofestimatedliabilities2020InterimReportofLuzhouLaojiaoCo.,Ltd.107Ifthecontingentobligationsmeetthefollowingconditionssimultaneously,theCompanyshallrecognizeitasanestimatedliability:ThisobligationistheCompany'scurrentobligation;theperformanceofthisobligationishighlylikelytoresultinanoutflowofeconomicbenefitsfromtheCompany;Theamountoftheobligationcanbemeasuredreliably.(2)MeasurementmethodofestimatedliabilitiesTheCompany'sestimatedliabilitiesareinitiallymeasuredintermsofthebestestimateoftheexpenditureoffulfillingtherelevantcurrentobligations.Fordeterminingthebestestimate,theCompanytakesvariousfactorsintoaccountsuchastherisk,uncertaintyandtimevalueofmoneyrelatedtocontingencies.Ifthetimevalueofmoneyhasasignificantimpact,thebestestimateisdeterminedbydiscountingtherelevantfuturecashoutflows.Thebestestimateisprocessedasfollows:Wherethereisacontinuousrange(orrange)ofrequiredexpendituresandtheprobabilityoftheoccurrenceofvariousresultswithintherangeissame,thebestestimateisdeterminedaccordingtothemeanofthemiddlevalueoftherange,namelythemeanvalueoftheupperandlowerlimits.Wherethereisnocontinuousrange(orrange)ofrequiredexpenditures,orwherethereisacontinuousrangebutthepossibilityofvariousoutcomeswithintherangeisdifferent,ifthecontingenciesinvolveasingleitem,thebestestimateisdeterminedaccordingtothemostlikelyamount;Ifthecontingenciesinvolvemorethanoneitem,thebestestimateiscalculatedanddeterminedaccordingtovariouspossibleresultsandrelevantprobabilities.WhereallorpartoftheexpensesrequiredfortheliquidationoftheestimatedliabilitiesoftheCompanyareexpectedtobecompensatedbyathirdparty,theamountofcompensationshallberecognizedasanassetwhenitisbasicallyconfirmedthatitcanbereceived,andtheconfirmedamountofcompensationshallnotexceedthebookvalueoftheestimatedliabilities.5.29Share-basedpayment(1)Thetypeofshare-basedpaymentShare-basedpaymentisclassifiedasequity-settledshare-basedpaymentandcash-settledshare-basedpayment.(2)ThemethodofdeterminingthefairvalueofequityinstrumentsForequity-settledshare-basedpaymentrelatedwithemployees,theequityinstrumentismeasuredatfairvalue.Thecash-settledshare-basedpaymentshallbemeasuredaccordingtothefairvalueoftheliabilitiescalculatedanddeterminedonthebasisofsharesorotherequityinstrumentsundertakenbytheCompany.Forthefairvalueofthestockoptiongranted,thefairvalueisdeterminedbyusingthestockoptionpricingmodel,andthefollowingfactorsaretakenintoaccount:thecurrentpriceoftheunderlyingshares,theexercisepriceoftheoption,therisk-freeinterestratewithintheperiodoftheoption,theoptionlife,andtheexpectedvolatilityofthestockprice.(3)RecognitionofthebestestimatebasisofinstrumentthatcanbeexercisedFortheequity-settledshare-basedpaymentsettledimmediatelyafterthegrant,thefairvalueofthe2020InterimReportofLuzhouLaojiaoCo.,Ltd.108equityinstrumentshallbeincludedintherelevantcostsorexpensesonthegrantdate,andthecapitalreserveshallbeincreasedaccordingly.Grantdatemeansthedateonwhichtheshare-paymentagreementisapproved.Fortheequity-settledshare-basedpayment,inwhichtheservicesduringwaitingperiodarecompletedandtheperformanceconditionsaremet,inreturnforservicesofemployees,oneachbalancesheetdateduringwaitingperiod,thecurrentobtainedserviceshallbeincludedintherelevantcostsorexpensesandthecapitalreservesinaccordancewiththefairvalueoftheequityinstrumentsonthegrantdate,basedonbestestimateofthenumberofvestedequityinstruments,andthesubsequentchangesinfairvalueshallnotberecognized.Oneachbalancesheetdateduringwaitingperiod,theCompanymakesthebestestimatebasedonthelatestavailableemployeenumberchangeandothersubsequentinformation,andmodifiesthenumberofequityinstrumentsfortheestimatedvesting.Onthevestingdate,thefinalexpectednumberofvestinginstrumentsisthesameastheactualnumberofvestinginstruments.(4)Relevantaccountingtreatmentofimplement,modificationandterminationofshare-basedpaymentplanForequity-settledshare-basedpayment,noadjustmentswillbemadetotherecognizedcostsandtotalowners'equityafterthevestingdate.Onthevestingdate,theCompanyshallrecognizethesharecapitalandtheequitypremiumaccordingtotheexercisesituation,andcarryforwardthecapitalreserverecognizedinthewaitingperiod.Nomatterhowitmodifiesthetermsandconditionsofthegrantedequityinstrumentsoritcancelsthegrantedequityinstrumentsoritssettlement,theequityinstrumentsgrantedbytheCompanyshallberecognizedatfairvalueonthegrantdateanditmeasuresobtainedthecorrespondingservices,unlessitcannotbevestedbecauseitcannotmeetthevestingconditionsofequityinstruments(exceptmarketconditions).5.30RevenueAccountingpoliciesforrecognitionandmeasurementofrevenueTheCompanyhasimplementedthenewrevenuestandards(1)RecognitionprincipalsofrevenueAtthebeginningofthecontract,theCompanyshallevaluatethecontract,identifyeachindividualperformanceobligationofthecontractanddeterminewhethereachindividualperformanceobligationshallbeperformedwithinacertainperiodoftimeoratacertainpoint.Ifoneofthefollowingconditionsismet,theperformanceobligationsshallbeperformedwithinacertainperiodoftime;Otherwise,theperformanceobligationshallbeperformedatacertainpoint:a.TheclientobtainsandconsumestheeconomicbenefitsbroughtbytheCompany'sperformanceofthecontractatthesametime;b.ThecustomercancontrolthecommoditiesorservicesunderconstructionduringtheperformanceoftheCompany;c.ThecommoditiesorservicesproducedbytheCompanyduringtheperformanceofthecontractshallhaveirreplaceableusesandtheCompanyshallbeentitledtoreceivepaymentfortheaccumulatedpartoftheperformanceofthecontracttodatethroughoutthecontractperiod.Foracontractperformanceobligationfulfilledinatimeperiod,theGrouprecognizestherevenue2020InterimReportofLuzhouLaojiaoCo.,Ltd.109accordingtotheprogresstowardsthecontractcompletionduringtheperiod.WhentheprogresscannotbereasonablydeterminedandifthecostalreadyincurredbytheGroupisexpectedtobecompensated,therevenueshouldberecognizedaccordingtotheamountofthecostalreadyincurred,untiltheprogresstowardsthecontractcompletioncanbereasonablydetermined.Foracontractperformanceobligationfulfilledatatimepoint,theGrouprecognizestherevenueatthetimepointwhenthecustomeracquiresthecontrolovertherelatedcommodityorservice.Injudgingwhetherthecustomerhasacquiredthecontroloveracommodity,theCompanyconsidersthefollowingsigns:a.TheCompanyisentitledtothecurrentrightofpaymentcollectioninrespectofthecommodity.Inotherwords,thecustomerhasthecurrentobligationtopayforthecommodity.b.TheCompanyhastransferredthelegalownershipofthecommoditytothecustomer.Inotherwords,thecustomerhasownedthelegalownershipofthecommodity.c.TheCompanyhastransferredthephysicalcommoditytothecustomer.Inotherwords,thecustomerhastakenphysicalpossessionofthecommodity.d.TheCompanyhastransferredthemajorrisksandremunerationsinrespectoftheownershipofthecommodity.Inotherwords,thecustomerhasacquiredthemajorrisksandremunerationsinrespectoftheownershipofthecommodity.e.Thecustomerhasacceptedthecommodity.f.Othersignsindicatingthatthecustomerhasacquiredcontroloverthecommodity.(2)Measurementprincipalsofrevenuea.TheCompanymeasurestherevenueaccordingtothetransactionpriceallocatedtoeachindividualperformanceobligation.ThetransactionpriceistheamountofconsiderationtowhichtheCompanyisexpectedtobeentitledasaresultofthetransferofgoodsorservicestothecustomer,excludingpaymentsreceivedonbehalfofthethirdparties.b.Whendeterminingthecontracttransactionprice,ifthereisavariableconsideration,theCompanydeterminesthebestestimateofthevariableconsiderationinaccordancewiththeexpectedvalueortheamountmostlikelytooccur,andincludesthetransactionpriceintheamountnotexceedingtheamountthatwouldmostlikelynotresultinasignificantreversaloftheaccumulatedrecognizedrevenuewhentherelevantuncertaintiesareeliminated.c.Ifacontracthasanysignificantfinancingcomponent,theGroupwilldeterminethetransactionpricebytheamountassumedtobepaidbythecustomerincashwhenacquiringthecontroloverthecommodityortheservice.Thedifferencebetweenthetransactionpriceandthecontractconsiderationisamortizedintheeffectiveinterestmethodduringthecontractperiod.Onthestartdateofacontract,iftheGroupexpectsthatthegapbetweenthecustomer’sacquisitionofthecontroloverthecommodityortheserviceanditspaymentofthepricewillnotexceedoneyear,thecontractwillnotbeconsideredascontaininganysignificantfinancingcomponent.d.Ifthecontractcontainstwoormoreperformanceobligations,theCompanyshallatthebeginningofthecontractallocatethetransactionpricetoeachindividualperformanceobligationaccordingtotherelativeproportionoftheindividualsellingpriceofthecommoditiescommittedbyeachindividualperformanceobligation,andmeasuretherevenueaccordingtothetransactionpriceallocatedtoeachindividualperformanceobligation.Differencesinaccountingpoliciesfortherecognitionofrevenuecausedbydifferentbusinessmodelsforthesametypeofbusiness2020InterimReportofLuzhouLaojiaoCo.,Ltd.1105.31GovernmentgrantsGovernmentgrantsaremonetaryassetsandnon-monetaryassetsacquiredfreeofchargebytheCompanyfromthegovernmentlikefiscalsubsidies.(1)JudgmentbasisandaccountingtreatmentmethodofgovernmentgrantsrelatedtoassetsGovernmentgrantsrelatedtoassetsaregovernmentgrantsthatareacquiredbytheCompanyandusedforforminglong-termassetsthroughpurchasingandconstructingorotherways.Ifthegovernmentdocumentsdonotclearlyspecifythetargetofthesubsidy,theCompanyshallseparatelyexplainjudgmentbasisofclassifyingthegovernmentgrantsintothegovernmentgrantsrelatedtoassetsorincome.Accountingmethod:itshallberecognizedasdeferredincomeallocatedevenlyovertheusefullives(theperiodofdepreciationandamortization)oftherelevantassetsfromthemonthofcommenceofdepreciationoramortizationwhentherelevantassetsreachingtheintendedusecondition,andincludedinthecurrentprofitorloss.However,governmentgrantsmeasuredatthenominalamountshallbedirectlyincludedincurrentprofitandloss.(2)JudgmentbasisandaccountingtreatmentmethodofgovernmentgrantsrelatedtoincomeGovernmentgrantsrelatedtoincomearegovernmentgrantsotherthangovernmentgrantsrelatedtoassets;Accountingmethod:a.IfitisusedtocompensatetheCompany’srelevantexpensesorlossesinfutureperiods,itshouldberecognizedasdeferredincomeandincludedintothecurrentprofitandlossorwrittenoffoftherelatedcostswhentherelevantexpenses,lossesarerecognized.b.IfitisusedtocompensatetheCompany’srelevantexpensesorlossesincurred,itisdirectlyincludedintothecurrentprofitandlossonacquisitionorwrittenoffoftherelatedcosts.c.Recognitiontime-pointofgovernmentgrantsGovernmentgrantsarerecognizedwhentheCompanycanmeettheattachedconditionsforthegovernmentgrantsandtheCompanycanreceivethegrants.d.MeasurementofgovernmentgrantsIfagovernmentgrantisamonetaryasset,itshallbemeasuredinthelightofthereceivedorreceivableamount.Ifagovernmentgrantisanon-monetaryasset,itshallbemeasuredatitsfairvalue;andifitsfairvaluecannotbeobtainedinareliableway,itshallbemeasuredatanominalamount.5.32DeferredtaxassetsordeferredtaxliabilitiesTheCompanyadoptsthebalancesheetliabilitymethodtoaccountforincometax.TheCompanyrecognizesdeferredtaxassetswhenthefollowingconditionsaremetsimultaneously:i.Temporarydifferencesarehighlylikelytobereversedintheforeseeablefuture:ii.Taxableincomethatmaybeusedtooffsetthedeductibletemporarydifferenceislikelytobeobtainedinthefutureandislimitedtotheamountoftaxableincomethatislikelytobeobtained.Oneachbalancesheetdate,thecurrentincometaxliabilities(orassets)incurredinthecurrentperiodorpriorperiodsshallbemeasuredbytheCompanyinlightoftheexpectedpayable(refundable)amountofincometaxesaccordingtothetaxlaw;Thedeferredincometaxassetsanddeferredincometaxliabilitiesshallbemeasuredatthetaxrateapplicabletotheperiodduringwhichtheassetsareexpectedtobe2020InterimReportofLuzhouLaojiaoCo.,Ltd.111recoveredortheliabilitiesareexpectedtobesettled.TheCompanyshallreviewthecarryingamountofdeferredincometaxassetsoneachbalancesheetdate.Thecurrentincometaxanddeferredincometaxshallberecordedintothecurrentprofitandlossasincometaxexpenseorincome,exceptfortheincometaxgeneratedfromtheenterprisemerger,transactionsoreventsdirectlyrecognizedintheowner'sequity.5.33Lease(1)Accountingtreatmentofoperatingleasea.TheCompanyrecordsrentsofleasedassetsintocurrentexpenseusingstraightlinemethodineachperiodoftheleasetermincludingrent-freeperiod.Initialdirectexpensesincurredarerecordedintocurrentexpense.Contingentrentsarerecordedintocurrentprofitorlosswhenoccur.WhenthelessorbearstheleaseholdexpenseswhichshallbebornebytheCompany,theexpensesshallbedeductedfromtotalrentsandtheresidualrentisrecognizedintocurrentprofitorlossineachperiodoftheleaseterm.b.Therentsarisingfromleasingassetsshallberecordedintorentrevenueusingstraightlinemethodineachperiodoftheleasetermincludingrent-freeperiod.Initialdirectexpensesincurredarerecordedintocurrentexpense.Iftheamountislarge,itshallbecapitalizedandrecordedintocurrentincomeininstallmentintheperiodofleasetermaccordingtothesamerecognitionbaseofrentrevenue.WhenthelesseebearstheleaseholdexpenseswhichshallbebornebytheCompany,theexpensesshallbedeductedfromtotalrentsandtheresidualrentisamortizedineachperiodoftheleaseterm.(2)Accountingtreatmentoffinanceleasea.Asthelessee,itrecognizestheloweroffairvalueofleaseassetandminimumleasepaymentatthebeginningdayoftheleaseastheinitialvalueoftheassetleasedinandtheminimumleasepaymentaslong-termpayable,thedifferenceasunrealizedfinanceexpense.Unrealizedfinanceexpenseisamortizedintheperiodduringtheleasetermandrecognizedascurrentfinanceexpensesusingactualeffectiveratemethod.b.Asthelessor,itrecognizesthedifferencebetweenthetotalofminimumleaseamountreceivedandresidualamountnotguaranteedandthepresentvalueofthatasunrealizedfinanceincome.ItrecognizesunrealizedfinanceincomeasrentrevenueintheperiodofleasetermwhentheCompanyreceivesrent.Theinitialdirectexpenserelatedtotheleasetransactionshallberecordedintheinitialrecognitionoffinanceleasereceivableandbedeductedfromrecognizedincomeintheperiodofleaseterm.5.34IncometaxexpenseTheCompany’sincometaxiscalculatedinthebalancesheetliabilitymethod.TheCompanyrecognizeddeferredtaxassetswhenbothofthefollowingconditionsaremet:(1)Temporarydifferencesareverylikelytoreverseinforeseeablefuture;(2)Itisverylikelyinthefuturethatthetaxableincomeamountcanbeobtainedandusedtooffsetthedeductibletemporarydifferences,whichiscappedatthetaxableincomeamountthatisverylikelytoobtain.Onthebalancesheetdate,thecurrentincometaxliabilities(orassets)formedinthecurrentperiodandpreviousperiodsaremeasuredattheexpectedincometaxamountpayable(orreturnable)calculatedaccordingtotaxlaws.Fordeferredtaxassetsanddeferredtaxliabilities,inaccordancewithtaxlaw,they2020InterimReportofLuzhouLaojiaoCo.,Ltd.112shallbemeasuredattheapplicabletaxrateduringtheperiodofexpectedrecoveryofsuchassetsorsatisfactionofsuchliabilities.Onthebalancesheetdate,theCompanyreviewsthecarryingvaluesofdeferredtaxassetsanddeferredtaxliabilities.TheCompany’scurrentincometaxanddeferredtaxwillbetreatedasincometaxexpensesorincome,exceptforincometaxfrombusinesscombinationsortransactionsormattersrecognizeddirectlyinowners’equity.5.35Changesinsignificantaccountingpoliciesandaccountingestimates5.35.1.Changesinsignificantaccountingpolicies√ApplicableN/AContentandreasonofchangesApprovalproceduresNoteOn5July2017,theMinistryofFinancerevisedandissuedAccountingStandardsforBusinessEnterprisesNo.14-Revenue(CK[2017]No.22,hereinafterreferredtoas“newstandardsgoverningrevenue”),andrequiredthoseenterprisesbothlistedindomesticandaboardandthoseenterprisesoverseaslistedwithInternationalFinancialReportingStandardsorAccountingStandardsforBusinessEnterprisesforpreparationoffinancialstatementstoimplementitsince1January2018,requiredotherdomesticallylistedenterprisestoimplementitsince1January2020.Approvedonthe16thMeetingofthe9thBoardofDirectorsNote:Pursuanttotheconnectionregulationforoldandnewstandards,theCompanystartstodisclosefinancialstatementsasrequiredbythenewstandardsgoverningrevenuesince2020withoutretroactiveadjustmentforcomparativedataof2019.Thechangesinaccountingpoliciescausednoinfluenceonrelatedfinancialindicatorsof2019.TherewasnootherchangeinsignificantaccountingpoliciesintheReportingPeriodotherthantheabovechanges.5.35.2.ChangesinsignificantaccountingestimatesApplicable√N/A2020InterimReportofLuzhouLaojiaoCo.,Ltd.1135.35.3.Adjustmentstothefinancialstatementsatthebeginningoftheexecutionyearofanynewstandardgoverningrevenueorleasesfrom2020√ApplicableN/AWhetheritemsofbalancesheetsatthebeginningoftheyearneedtobeadjusted√Yes□NoConsolidatedbalancesheetMonetaryUnit:CNYItem31December20191January2020AdjustedCurrentassets:Cashandcashequivalents9,753,666,526.789,753,666,526.78SettlementreservesLendingfundsTradingfinancialassetsDerivativefinancialassetsNotesreceivablesAccountsreceivables18,293,914.2318,293,914.23Accountsreceivablesfinancing2,393,797,259.802,393,797,259.80Prepayment151,818,448.48151,818,448.48PremiumsreceivableReinsuranceaccountsreceivableReinsurancecontractreserveOtherreceivables159,753,421.64159,753,421.64Including:Interestsreceivable45,636,744.4445,636,744.44DividendsreceivableBuyingbackthesaleoffinancialassetsInventories3,641,235,092.333,641,235,092.33ContractassetsAssetsheldforsaleNon-currentassetsduewithinoneyear2020InterimReportofLuzhouLaojiaoCo.,Ltd.114Othercurrentassets195,174,048.57195,174,048.57Totalcurrentassets16,313,738,711.8316,313,738,711.83Non-currentassets:DisbursementofloansandadvancesInvestmentindebtobligationsInvestmentinotherdebtobligationsLong-termreceivablesLong-termequityinvestments2,230,721,725.722,230,721,725.72Otherequityinstrumentinvestment352,395,255.78352,395,255.78Othernon-currentfinancialassetsInvestmentpropertyFixedassets1,518,865,397.911,518,865,397.91Constructioninprogress7,257,393,087.567,257,393,087.56ProductivebiologicalassetsOilandgasassetsRight-to-useassetsIntangibleassets332,234,032.47332,234,032.47DevelopmentexpensesGoodwillLong-termdeferredexpenses928,805.23928,805.23Deferredtaxassets676,152,614.07676,152,614.07Othernon-currentassets237,539,447.75237,539,447.75Totalnon-currentassets12,606,230,366.4912,606,230,366.49Totalassets28,919,969,078.3228,919,969,078.32Currentliabilities:Short-termloansBorrowingsfromthecentralbankLoansfromotherbanks2020InterimReportofLuzhouLaojiaoCo.,Ltd.115TradingfinancialliabilitiesDerivativefinancialliabilitiesNotespayableAccountspayable1,868,623,958.021,868,623,958.02Advancefromcustomer2,244,442,643.64-2,244,442,643.64Contractliabilities1,986,232,428.001,986,232,428.00FinancialassetssoldforrepurchaseCustomersdepositsanddepositsfrombanksandotherfinancialinstitutionsCustomerbrokeragedepositsSecuritiesunderwritingbrokeragedepositsEmployeebenefitspayable342,025,687.49342,025,687.49Taxespayable1,633,044,231.671,633,044,231.67Otherpayable698,942,399.37698,942,399.37Including:Interestspayable30,650,684.9330,650,684.93DividendspayableHandlingchargesandcommissionspayableReinsuranceaccountspayableLiabilitiesheldforsaleNon-currentliabilitiesduewithinoneyearOthercurrentliabilities258,210,215.64258,210,215.64Totalcurrentliabilities6,787,078,920.196,787,078,920.19Non-currentliabilities:InsurancecontractreservesLong-termloansBondspayable2,490,883,676.392,490,883,676.392020InterimReportofLuzhouLaojiaoCo.,Ltd.116Including:PreferencesharesPerpetualbondsLeaseliabilitiesLong-termpayablesLong-termpayrollpayablesAccruedliabilitiesDeferredincome23,845,000.0023,845,000.00Deferredtaxliabilities63,430,453.6463,430,453.64Othernon-currentliabilitiesTotalnon-currentliabilities2,578,159,130.032,578,159,130.03Totalliabilities9,365,238,050.229,365,238,050.22Owners'equity:Sharecapital1,464,752,476.001,464,752,476.00OtherequityinstrumentsIncluding:PreferencesharesPerpetualbondsCapitalreserves3,722,777,063.133,722,777,063.13Less:TreasurystockOthercomprehensiveincome194,817,130.57194,817,130.57SpecialreservesSurplusreserves1,464,752,476.001,464,752,476.00GeneralriskreserveUndistributedprofits12,559,746,579.9112,559,746,579.91Totalequityattributabletoownersoftheparentcompany19,406,845,725.6119,406,845,725.61Non-controllinginterests147,885,302.49147,885,302.49Totalowners'equity19,554,731,028.1019,554,731,028.10Totalliabilitiesandowners'equity28,919,969,078.3228,919,969,078.32StatementforadjustmentSincetheimplementationofthenewstandardsgoverningrevenueon1January2020,theCompanypresentsthepartofadvancefromcustomerexcludingtaxesundertheitemofcontractliabilitiesandpresentsthepartofVATundertheitemofothercurrentliabilities.2020InterimReportofLuzhouLaojiaoCo.,Ltd.117BalancesheetofparentcompanyMonetaryUnit:CNYItem31December20191January2020AdjustedCurrentassets:Cashandcashequivalents8,872,692,385.798,872,692,385.79TradingfinancialassetsDerivativefinancialassetsNotesreceivablesAccountsreceivables21,562.8521,562.85AccountsreceivablesfinancingPrepayment11,682,593.2711,682,593.27Otherreceivables5,850,481,480.505,850,481,480.50Including:Interestsreceivable40,570,144.4440,570,144.44DividendsreceivableInventories1,049,384.241,049,384.24ContractassetsAssetsheldforsaleNon-currentassetsduewithinoneyearOthercurrentassets5,562,360.725,562,360.72Totalcurrentassets14,741,489,767.3714,741,489,767.37Non-currentassets:InvestmentindebtobligationsInvestmentinotherdebtobligationsLong-termreceivablesLong-termequityinvestments5,636,681,853.835,636,681,853.83Otherequityinstrumentinvestment352,066,334.15352,066,334.15Othernon-currentfinancialassets2020InterimReportofLuzhouLaojiaoCo.,Ltd.118InvestmentpropertyFixedassets601,481,983.81601,481,983.81Constructioninprogress967,953,263.55967,953,263.55ProductivebiologicalassetsOilandgasassetsRight-to-useassetsIntangibleassets297,830,285.02297,830,285.02DevelopmentexpensesGoodwillLong-termdeferredexpenses777,834.15777,834.15Deferredtaxassets75,249,717.7275,249,717.72Othernon-currentassetsTotalnon-currentassets7,932,041,272.237,932,041,272.23Totalassets22,673,531,039.6022,673,531,039.60Currentliabilities:Short-termloansTradingfinancialliabilitiesDerivativefinancialliabilitiesNotespayablesAccountspayable87,652,671.2987,652,671.29Advancefromcustomer9,712,630.35-9,712,630.35Contractliabilities8,595,248.108,595,248.10Employeebenefitspayable116,124,722.19116,124,722.19Taxespayable82,399,599.1882,399,599.18Otherpayables1,099,598,588.831,099,598,588.83Including:Interestspayable30,650,684.9330,650,684.93DividendspayableLiabilitiesheldforsaleNon-currentliabilitiesduewithinoneyearOthercurrentliabilities1,117,382.251,117,382.252020InterimReportofLuzhouLaojiaoCo.,Ltd.119Totalcurrentliabilities1,395,488,211.841,395,488,211.84Non-currentliabilities:Long-termloansBondspayable2,490,883,676.392,490,883,676.39Including:PreferencesharesPerpetualbondsLeaseliabilitiesLong-termpayablesLong-termpayrollpayablesAccruedliabilitiesDeferredincome2,380,000.002,380,000.00Deferredtaxliabilities63,430,453.6463,430,453.64Othernon-currentliabilitiesTotalnon-currentliabilities2,556,694,130.032,556,694,130.03Totalliabilities3,952,182,341.873,952,182,341.87Owners'equitySharecapital1,464,752,476.001,464,752,476.00OtherequityinstrumentsIncluding:PreferencesharesPerpetualbondsCapitalreserves3,706,816,950.123,706,816,950.12Less:TreasurystockOthercomprehensiveincome192,332,738.05192,332,738.05SpecialreservesSurplusreserves1,464,752,476.001,464,752,476.00Undistributedprofits11,892,694,057.5611,892,694,057.56Totalowners'equity18,721,348,697.7318,721,348,697.73Totalliabilitiesandowners'equity22,673,531,039.6022,673,531,039.60StatementforadjustmentSincetheimplementationofthenewstandardsgoverningrevenueon1January2020,theCompany2020InterimReportofLuzhouLaojiaoCo.,Ltd.120presentsthepartofadvancefromcustomerexcludingtaxesundertheitemofcontractliabilitiesandpresentsthepartofVATundertheitemofothercurrentliabilities.5.35.4.Retrospectiverestatementofpreviouscomparativedataduetotheexecutionofanynewstandardgoverningrevenueorleasefrom2020Applicable√N/A6.Taxes6.1.MajortaxtypesandratesTaxtypeTaxbaseTaxrateValue-addedtaxTaxablesalesincome16%,13%,10%,9%,6%UrbanmaintenanceandconstructiontaxTaxableturnovertax7%CorporateincometaxTaxableincome25%,15%,16.5%,9%,0%Consumptiontax(basedonprice)Liquortaxpriceorex-factoryprice20%Consumptiontax(basedonquantity)QuantityofwineCNY1.00/kgEducationsurchargeTaxableturnovertax3%LocaleducationsurchargeTaxableturnovertax2%PropertytaxOriginalvalueoftheproperty*70%;houserent1.2%,12%LandusetaxLandareaCNY5-18.00/m2OthersAccordingtonationalregulationTaxpaymentsubjectusingdifferentcorporateincometaxrates,thecorporateincometaxratesareasfollows:CompanynameCorporateincometaxrateLuzhouPinchuangTechnologyCo.,Ltd.15%LuzhouLaojiaoInternationalDevelopment(HongKong)Co.,Ltd.16.5%MingjiangCo.,Ltd.21%-40%LuzhouLaojiaoCommercialDevelopment(NorthAmerica)Co.,Ltd.21%-40%LuzhouRedSorghumModernAgriculturalDevelopmentCo.,Ltd.ExemptedfromcorporateincometaxGuangxiLuzhouLaojiaoImportedLiquorIndustryCo.,Ltd.9%2020InterimReportofLuzhouLaojiaoCo.,Ltd.1216.2.Taxpreferences(1)AccordingtoAnnouncementoftheStateAdministrationofTaxationonCorporateIncomeTaxQuestionsConcerningtheFurtherImplementationoftheWesternDevelopmentStrategy(StateAdministrationofTaxationAnnouncementNo.2),companiesarelocatedinthewesternregionwhoseprimarybusinessislistedintheCatalogueofEncouragedIndustriesintheWesternRegion,andtheannualprimarybusinessincomeaccountingforover70%ofthetotalenterpriseincome.Thesecompaniescanbesubjecttothecorporateincometaxatareducedrateof15%.TheCompany'sholdingsubsidiary,LuzhouPinchuangTechnologyCo.,Ltd.,whoseprimarybusinessincomemeettherequirementsofscopeandstandardoftheCatalogueofEncouragedIndustriesintheWesternRegion,ispaidattherateof15%forcorporateincometax.(2)AccordingtoArticle27oftheCorporateIncomeTaxLawofthePeople'sRepublicofChinaandArticle86,Item1oftheImplementationRegulationsoftheCorporateIncomeTaxLaw,companiesareexemptedfromenterpriseincometaxwhentheyengageinagricultural,forestry,animalhusbandryandfisheryindustries.TheholdingsubsidiaryoftheCompany,LuzhouRedSorghumModernAgriculturalDevelopmentCo.,Ltd.,isengagedinthecultivationandsaleoforganicsorghumandenjoysthereductionofcorporateincometaxpreferences.(3)AccordingtotheArticle15,Item1oftheProvisionalRegulationsonValue-AddedTax,agriculturalproducerssellself-producedagriculturalproductsexemptfromvalue-addedtax.TheholdingsubsidiaryoftheCompany,LuzhouRedSorghumModernAgriculturalDevelopmentCo.,Ltd.,isengagedinthecultivationandsaleoforganicsorghumandenjoysthevalue-addedtaxexemption.(4)AccordingtotheArticle3,Item7oftheNoticeonReviseofInterimMeasuresofAcceleratingtheDevelopmentinHeadquartersEconomyofChina-MalaysiaQinzhouIndustrialPark,till31December2020,theenterprisesintheQinzhouIndustrialParkthatenjoy15%oftaxrateofWesternDevelopmentwiththehalfreductioninthetaxperiodofpreferentialpoliciesshallenjoythelocalshareofcorporateincometaxexemption(namely40%ofcorporateincometaxwasexempted,andtheproportionadjustedbythestateshallbeexecutedaccordingtonewproportion);GuangxiLuzhouLaojiaoImportedLiquorIndustryCo.,Ltd.,thewholly-ownedsubsidiaryoftheCompany,payscorporateincometaxattherateof9%accordingtothetaxpreferencepolicies.7.Notestothemainitemsoftheconsolidatedfinancialstatements(AllcurrencyunitisCNY,exceptotherstatements)7.1.CashandcashequivalentsMonetaryUnit:CNYItemClosingBalanceOpeningBalanceCash15,116.5328,776.67Bankdeposit10,914,711,794.099,744,243,225.66Othercashandcashequivalents19,022,740.849,394,524.452020InterimReportofLuzhouLaojiaoCo.,Ltd.122Total10,933,749,651.469,753,666,526.78Including:Totaldepositoutbound77,946,310.5661,031,136.88Totalamountwithrestrictiontouseduetomortgage,pledgeorfreeze1,400,000.001,400,000.00Otherstatements:Note1:ThetotalamountoffundsdepositedoutboundisCNY77,946,310.56,including:LuzhouLaojiaoInternationalDevelopment(HongKong)Co.,Ltd.,theholdingsubsidiaryoftheCompany,withatotalamountofCNY75,192,192.90,andCNY2,754,117.66ofMingjiangCo.,Ltd.,theholdingsubsidiaryoftheCompany.Note2:TheclosingbalanceofothercashandcashequivalentsisthetravelservicedepositofCNY1,400,000.00depositedbytheCompany'swholly-ownedsubsidiary,LuzhouLaojiaoTourismCultureCo.,Ltd.,inthedesignatedbankaccordingtotheregulationsofthetourismbureau,andbalanceofCNY17,622,740.84depositedbytheCompany'sholdingsubsidiary,LuzhouLaojiaoElectronicCommerceCo.,Ltd.onthethird-partye-commerceplatform.7.2.Accountsreceivable7.2.1.ClassificationofaccountsreceivableMonetaryUnit:CNYTypeClosingBalanceOpeningBalanceBookbalanceProvisionforbaddebtBookvalueBookbalanceProvisionforbaddebtBookvalueAmountProportionAmountProportionAmountProportionAmountProportionIncluding:Accountsreceivabletestedforimpairmentbytheportfolio5,863,932.59100.00%318,492.795.43%5,545,439.8019,266,797.97100.00%972,883.745.05%18,293,914.23Including:Accountsreceivabletestedforimpairmentontheportfoliowithcharacteristicsofcreditrisk5,863,932.59100.00%318,492.795.43%5,545,439.8019,266,797.97100.00%972,883.745.05%18,293,914.23Total5,863,932.59100.00%318,492.795.43%5,545,439.8019,266,797.97100.00%972,883.745.05%18,293,914.231Note:1.Theclosingbookbalanceattheperiod-enddecreasedCNY13,402,865.38comparedwiththeperiod-begin,withandecreaseby69.56%,primarilydrivenbytheinfluenceofthecreditaccountsto2020InterimReportofLuzhouLaojiaoCo.,Ltd.123overseasbusinessintheHongKongcompany.Accountsreceivabletestedforimpairmentontheportfolio:MonetaryUnit:CNYNameClosingBalanceBookbalanceProvisionforbaddebtProportionRiskportfolio5,863,932.59318,492.795.43%Total5,863,932.59318,492.79--Pleaserefertotherelevantinformationofdisclosureofprovisionforbaddebtofotheraccountsreceivableifadoptingthegeneralmodeofexpectedcreditlosstowithdrawprovisionforbaddebtofaccountsreceivable√ApplicableN/AMonetaryUnit:CNYProvisionforbaddebtPhaseIPhaseIIPhaseIIITotalExpectedcreditlossinthenext12monthsExpectedcreditlossintheduration(nocreditimpairment)Expectedcreditlossintheduration(withcreditimpairment)Balanceon1January2020972,883.74972,883.74Balanceof1January2020inthecurrentperiod--TransferredtothePhaseII--TransferredtothePhaseIII--ReversedtothePhaseII--ReversedtothePhaseIWithdrawninthecurrentperiodReversedinthecurrentperiod654,390.95654,390.95VerifiedinthecurrentperiodOtherchangesBalanceon30June2020318,492.79318,492.79DisclosurebyagingMonetaryUnit:CNYAgingClosingbalanceWithin1year(including1year)5,739,762.781-2years53,143.942-3years11,100.412020InterimReportofLuzhouLaojiaoCo.,Ltd.124Over3years59,925.463-4years59,925.46Total5,863,932.597.2.2.ProvisionandrecoveryforbadanddoubtfuldebtinthecurrentperiodAllowanceofprovisionforbaddebt:MonetaryUnit:CNYTypeOpeningBalanceCurrentPeriodClosingBalanceAllowanceReversalorrecoveryWrite-offOtherProvisionallowancebyriskportfolio972,883.74654,390.95318,492.79Total972,883.74654,390.95318,492.797.2.3.TopfiveentitieswiththelargestbalancesofaccountsreceivableMonetaryUnit:CNYCompanynameClosingBalanceProportiontototalclosingbalanceofaccountsreceivableClosingbalanceofprovisionforbaddebtAlipay(China)NetworkTechnologyCo.,Ltd.4,650,120.1979.30%232,506.01JiuxianNetworkTechnologyCo.,Ltd.287,927.544.91%14,396.38TAIFUNGCASTELMORLIMITED180,493.943.08%9,024.70LuzhouLiquorandSpiritsJinsanjiaoLiquorIndustryDevelopmentCo.,Ltd.168,826.642.88%8,441.33LuzhouLingangInvestmentGroupCo.,Ltd.120,791.942.06%6,039.60Total5,408,160.2592.23%7.3.AccountsreceivablefinancingMonetaryUnit:CNY2020InterimReportofLuzhouLaojiaoCo.,Ltd.125ItemClosingBalanceOpeningBalanceBankacceptancebill2,855,987,446.812,393,797,259.80Total2,855,987,446.812,393,797,259.801Note:1.Thebusinessmodetomanagenotesreceivableaimstocollectcontractcashflowaswellastosellthefinancialassets,andthusthenotesreceivableispresentedasaccountsreceivablefinancing;duetotheshorttermofnotesreceivablelessthan1year,andthesalestime,salespriceandsaleproportioncannotbeestimatedreliably,thefacevalueisregardedasthefairvalueofaccountsreceivablefinancingbytheCompany.Changesinaccountsreceivablefinancinginthereportingperiodandfairvalue:Applicable√N/APleaserefertotherelevantinformationofdisclosureofimpairmentprovisionofotheraccountsreceivableifadoptingthegeneralmodeofexpectedcreditlosstowithdrawimpairmentprovisionofaccountsreceivablefinancing.Applicable√N/AOtherstatements:(1)Thereisnoaccountreceivablefinancingpledged.(2)ThereisCNY2,473,793,500.00asfollowsofaccountsreceivablefinancingthathavebeenendorsedtootherpartiesbytheCompanybuthavenotexpiredonthebalancesheetdate:ItemDerecognitionatperiod-endNotderecognitionatperiod-endBankacceptancebill2,473,793,500.00Subtotal2,473,793,500.00Note:Theacceptorofthebankacceptancebillisacommercialbank.Theprobabilityofnotbeingpaiddueisverylow,andthepossibilityofbeingrecourseisverylow,sotheconfirmationhasbeenterminated.(3)Therearenoaccountsreceivablefinancingtransferredtoaccountsreceivableduetothenon-performanceoftheagreementsbytheissuers.(4)Thereisnoaccountsreceivablefinancingactuallywrittenoffduringthereportingperiod.7.4.Prepayment7.4.1.AginganalysisMonetaryUnit:CNYAgingClosingBalanceOpeningBalanceAmountProportionAmountProportionWithin1year142,405,827.6586.99%150,806,477.4499.33%1-2years20,445,025.1512.49%861,490.000.57%2020InterimReportofLuzhouLaojiaoCo.,Ltd.1262-3years848,000.000.52%150,481.040.10%Total163,698,852.80--151,818,448.48--7.4.2.TopfiveentitieswiththelargestbalancesofprepaymentCompanyNameClosingBalanceProportiontothetotalclosingbalanceofprepaymentNewShottesBrookPrivateCompany32,148,505.7619.64%ShanghaiMerlotAdvertisingCo.,Ltd.20,032,538.9712.24%PhoenixMetropolisMediaTechnologyCo.,Ltd.17,000,000.0010.38%ZhongnengKechengFluidTechnologyCo.,Ltd.10,395,000.006.35%BeijingTencentCultureMediaCo.,Ltd.10,000,000.006.11%Subtotal89,576,044.7354.72%7.5OtherreceivablesMonetaryUnit:CNYItemClosingBalanceOpeningBalanceInterestreceivable67,318,644.4445,636,744.44Dividendreceivable30,114,991.30Otherreceivables108,040,535.12114,116,677.20Total205,474,170.86159,753,421.647.5.1.Interestreceivable7.5.1.1.ClassificationofinterestreceivableMonetaryUnit:CNYItemClosingBalanceOpeningBalanceFixeddeposits67,318,644.4445,636,744.44Total67,318,644.4445,636,744.441Note:1.TheclosingbalanceincreasedCNY21,681,900.00comparedwithopeningbalance,withanincreaseby47.51%,mainlyduetotheincreaseofinterestincomeonfixeddepositresultedfromtheincreaseofstockfundsinthereportingperiod.2020InterimReportofLuzhouLaojiaoCo.,Ltd.1277.5.1.2.AllowanceofprovisionforbaddebtApplicable√N/A7.5.2.Dividendreceivable7.5.2.1.ClassificationofdividendreceivableMonetaryUnit:CNYItem(investee)ClosingBalanceOpeningBalanceSichuanNitrocellCo.,Ltd.85,995.53GuotaiJunanSecuritiesCo.,Ltd.4,593,028.83HuaxiSecuritiesCo.,Ltd.20,735,166.94LuzhouBankCo.,Ltd.4,700,800.00Total30,114,991.307.5.2.2.AllowanceofprovisionforbaddebtApplicable√N/AOtherstatements:7.5.3.Otherreceivables7.5.3.1.OtherreceivablesdisclosedbynatureMonetaryUnit:CNYNatureClosingbookbalanceOpeningbookbalanceIntercoursefunds22,440,474.1827,025,658.11Pettycash2,094,596.142,184,482.07Savingdepositsinvolvingcontractdisputes285,140,297.52287,400,297.52Other3,817,047.951,902,662.52Total313,492,415.79318,513,100.227.5.3.2.AllowanceofprovisionforbaddebtMonetaryUnit:CNYProvisionforbaddebtFirststageSecondstageThirdstageTotalExpectedcreditlossofthenext12Expectedlossintheduration(creditExpectedlossintheduration(credit2020InterimReportofLuzhouLaojiaoCo.,Ltd.128monthsimpairmentnotoccurred)impairmentoccurred)Balanceof1January20204,396,423.02200,000,000.00204,396,423.02Balanceof1January2020inthecurrentperiod————————Allowanceofthecurrentperiod1,055,457.651,055,457.65Balanceof30June20205,451,880.67200,000,000.00205,451,880.67ChangesofbookbalancewithsignificantamountchangedoflossprovisioninthecurrentperiodApplicable√N/ADisclosurebyagingMonetaryUnit:CNYAgingBookbalanceWithin1year(including1year)8,541,595.331-2years14,116,598.762-3years1,842,697.25Over3years288,991,524.453-4years414,000.004-5years1,788,626.93Over5years286,788,897.52Total313,492,415.797.5.3.3.ProvisionandrecoveryforbadanddoubtfulotherreceivablesinthecurrentperiodAllowanceofprovisionforbaddebt:MonetaryUnit:CNYTypeOpeningBalanceCurrentPeriodClosingBalanceAllowanceReversalorrecoveryWrite-offOtherOtherreceivablestestedforimpairmentindividuallyNote1200,000,000.00200,000,000.00Other4,396,423.021,055,457.655,451,880.672020InterimReportofLuzhouLaojiaoCo.,Ltd.129receivablestestedforimpairmentbytheportfolioTotal204,396,423.021,055,457.65205,451,880.67Note1:Inthe2014AnnualReport,theCompanydisclosedtheinformationaboutthreedepositsamountingtoCNY500,000,000.00withChangshaYingxinSub-branchofAgriculturalBankofChinaandNanyangZhongzhouSub-branchofIndustrialandCommercialBankofChina.Thedepositshavelostthenatureofmonetaryfundduetotheirinvolvementincontractdisputesandhavethusbeentransferredinto“otherreceivables”.Asof31December2019,ofthedepositsinvolvedincontractdisputes,theamountthatwasnotrecoveredwasCNY287,400,297.52.RelatedattorneysofW&HLawFirmChengduproducedtheLegalOpinionsontheAllowanceofProvisionforBadDebtofLuzhouLaojiaoCo.,Ltd.forAbnormalDepositsinThreePlacesIncludingChangshaandNanyangon17March2020.Accordingtotheopinions,“Whereasduringtheperiodfrom25March2016tillthisproductionoflegalopinionsontheallowanceproportionofprovisionforbaddebt,thereisnomatterthatoccurredandaffectedorchangedtheprovisionforbaddebt,andthusthejudgmentontheallowanceofprovisionforbaddebtatCNY200millionshallremain”.RefertoNote12.2.fordetails.7.5.3.4.TopfiveentitieswiththelargestbalancesoftheotherreceivablesMonetaryUnit:CNYCompanyNameNatureClosingBalanceAgingProportionintotalreceivablesProvisioningamountatperiodendAgriculturalBankofChinaChangshaYingxinSub-branch,IndustrialandCommercialBankofChinaNanyangZhongzhouSub-branchandanotherbankSavingdepositsinvolvingcontractdisputes285,140,297.52Over5years90.96%200,000,000.00HousingandUrban-RuralDevelopmentBureauofLongmatanDistrict,LuzhouSecuritydeposit1,983,130.23Within1year0.63%99,156.51LuzhouElectricPowerBureauofLongmatanDistrict,LuzhouSecuritydeposit1,520,000.003-4years0.48%608,000.002020InterimReportofLuzhouLaojiaoCo.,Ltd.130AlipaySecuritydeposit885,000.002-3years0.28%177,000.00AdministrationBureauofConstructionEngineeringofLuzhouSecuritydeposit636,000.00Within1year0.20%31,800.00Total--290,164,427.75--92.56%200,915,956.517.6InventoriesWhethertheCompanyneedstocomplywiththedisclosurerequirementsofrealestateindustryNo7.6.1.CategoriesofInventoriesMonetaryUnit:CNYCategoryClosingBalanceOpeningBalanceBookBalanceProvisionforstockobsolescenceorimpairmentprovisionofcontractperformancecostsBookValueBookBalanceProvisionforstockobsolescenceorimpairmentprovisionofcontractperformancecostsBookValueRawmaterials67,502,649.9667,502,649.9659,935,022.2059,935,022.20Goodsinprogress304,796,354.38304,796,354.38201,122,739.38201,122,739.38Finishedgoods814,645,886.62814,645,886.621,246,567,814.371,246,567,814.37Revolvingmaterials13,983,433.0213,983,433.0218,778,952.7218,778,952.72Self-madesemi-finishedgoods2,604,487,680.092,604,487,680.092,114,830,563.662,114,830,563.66Total3,805,416,004.073,805,416,004.073,641,235,092.333,641,235,092.337.6.2.ProvisionforstockobsolescenceandimpairmentprovisionofcontractperformancecostsThenetrealizablevalueisnotlowerthanbookcostintheclosingbalanceofinventory,sothereisnoprovisionfordeclineinvalueofinventories.2020InterimReportofLuzhouLaojiaoCo.,Ltd.1317.7.OthercurrentassetsMonetaryUnit:CNYItemClosingBalanceOpeningBalanceValue-addedtax138,504,084.59112,912,411.46Corporateincometax81,009,255.1778,049,453.69Othertaxes30,075,972.144,212,183.42Total249,589,311.90195,174,048.577.8.Long-termequityinvestmentsMonetaryUnit:CNYInvesteeOpeningBalance(bookvalue)ChangesincurrentperiodClosingBalance(bookvalue)ClosingBalanceofprovisionforimpairmentIncreaseDecreaseGainorlossrecognizedunderequitymethodAdjustmentsofothercomprehensiveincomeOtherchangesinequityCashdividedorprofitdeclaredProvisionforimpairmentOther1.JointVentures2.AssociateHuaxiSecuritiesCo.,Ltd.2,209,738,981.5595,995,572.836,242,935.6820,735,166.942,291,242,323.122,567,098.80SichuanDevelopmentWineInvestmentCo.,Ltd.12,982,744.17-1,036,640.7911,946,103.38SichuanTongniangLiquorIndustryTechnologyResearchInstitute8,000,000.008,000,000.002020InterimReportofLuzhouLaojiaoCo.,Ltd.132Co.,Ltd.NoteSubtotal2,230,721,725.7294,958,932.046,242,935.6820,735,166.942,311,188,426.502,567,098.80Total2,230,721,725.7294,958,932.046,242,935.6820,735,166.942,311,188,426.502,567,098.807.9.OtherequityinstrumentinvestmentMonetaryUnit:CNYItemClosingBalanceOpeningBalanceFinancialassetsassignedmeasuredbyfairvalueandthechangesbeincludedinthecurrentgainsandlosses:Including:GuotaiJunanInvestmentManagementCo.,Ltd.22,611,834.2422,611,834.24GuojiuBigDataCo.,Ltd.10,000,000.0010,000,000.00SichuanNitrocellCo.,Ltd.11,695,391.4011,757,933.60LuzhouBankCo.,Ltd.105,695,969.2889,076,363.20GuotaiJunanSecuritiesCo.,Ltd.203,270,968.21217,756,674.52SichuanChinaLiquorGoldenTriangleBrandOperationDevelopmentCo.,Ltd.andotherequityinstrumentinvestments1,192,450.221,192,450.22Total354,466,613.35352,395,255.78Categoriesofnon-tradingequityinstrumentinvestmentinthecurrentperiod:MonetaryUnit:CNYItemRecognizeddividendsincomeAccumulativegainsAccumulativelossesAmountofothercomprehensiveincometransferredtoretainedearningsReasonforassigningtomeasureatfairvalueandchangesrecordedintoothercomprehensiveincomeReasonofothercomprehensiveincometransferredtoretainedearningsShenzhenXingangfengDevelopment2,354,000.00Accordingtothemodeofmanaging2020InterimReportofLuzhouLaojiaoCo.,Ltd.133Co.,Ltd.assetsbymanagementlayerSichuanDeyangJintaiHotel2,000,000.00AccordingtothemodeofmanagingassetsbymanagementlayerHainanHuitongInternationalTrustCompany1,000,000.00AccordingtothemodeofmanagingassetsbymanagementlayerGuotaiJunanInvestmentManagementCo.,Ltd.AccordingtothemodeofmanagingassetsbymanagementlayerGuojiuBigDataCo.,Ltd.AccordingtothemodeofmanagingassetsbymanagementlayerSichuanChinaLiquorGoldenTriangleBrandOperationDevelopmentCo.,Ltd.136,471.41AccordingtothemodeofmanagingassetsbymanagementlayerSichuanNitrocellCo.,Ltd.85,995.5310,665,391.40AccordingtothemodeofmanagingassetsbymanagementlayerLuzhouBankCo.,Ltd.4,700,800.0054,575,969.28Accordingtothemodeofmanaging2020InterimReportofLuzhouLaojiaoCo.,Ltd.134assetsbymanagementlayerGuotaiJunanSecuritiesCo.,Ltd.4,593,028.83190,551,811.45AccordingtothemodeofmanagingassetsbymanagementlayerSichuanZhongheTongchuangMacaInvestmentCo.,Ltd.200,000.00AccordingtothemodeofmanagingassetsbymanagementlayerLuzhouEnterpriseUnionTradingCo.,Ltd.198,926.37AccordingtothemodeofmanagingassetsbymanagementlayerLuzhouZunchiAutoServiceCo.,Ltd.Accordingtothemodeofmanagingassetsbymanagementlayer7.10.FixedassetsMonetaryUnit:CNYItemClosingBalanceOpeningBalanceFixedassets2,831,169,969.041,516,871,720.00Disposaloffixedassets2,948,153.301,993,677.91Total2,834,118,122.341,518,865,397.917.10.1.DetailsoffixedassetsMonetaryUnit:CNYItemBuildingsandconstructionsSpecializedequipmentGeneralequipmentTransportationequipmentOtherequipmentTotal2020InterimReportofLuzhouLaojiaoCo.,Ltd.135I.Originalcost:1.Openingbalance1,268,681,845.39717,723,621.29367,265,484.9337,843,023.14722,422,161.533,113,936,136.282.Increaseincurrentperiod653,863,251.55380,349,780.89254,766,083.614,247,787.61171,542,281.921,464,769,185.58(1)Externalpurchase100,105,765.43160,509,693.952,116,122.044,247,787.611,008,286.67267,987,655.70(2)Transferfromconstructioninprogress553,757,486.12219,840,086.94252,649,961.57170,533,995.251,196,781,529.88(3)Increasefrombusinesscombination3.Decreaseincurrentperiod42,539,467.8926,697,379.515,611,178.881,145,069.3739,275,425.09115,268,520.74(1)Disposalorretirement42,539,467.8926,697,379.515,611,178.881,145,069.3739,275,425.09115,268,520.744.ClosingBalance1,880,005,629.051,071,376,022.67616,420,389.6640,945,741.38854,689,018.364,463,436,801.12II.Accumulateddepreciation1.OpeningBalance595,935,621.65500,627,398.98198,415,362.1028,328,811.20273,134,282.281,596,441,476.212.Increaseincurrentperiod31,290,257.9131,148,224.5228,475,494.99972,938.4725,270,348.91117,157,264.80(1)Provision31,290,257.9131,148,224.5228,475,494.99972,938.4725,270,348.91117,157,264.803.Decreaseincurrentperiod57,654,712.626,087,154.124,539,553.59969,935.6212,703,493.0581,954,849.00(1)Disposalorretirement57,654,712.626,087,154.124,539,553.59969,935.6212,703,493.0581,954,849.004.ClosingBalance569,571,166.94525,688,469.38222,351,303.5028,331,814.05285,701,138.141,631,643,892.012020InterimReportofLuzhouLaojiaoCo.,Ltd.136III.Provisionforimpairment1.OpeningBalance622,940.07622,940.072.Increaseincurrentperiod(1)Provision3.Decreaseincurrentperiod(1)Disposalorretirement4.ClosingBalance622,940.07622,940.07IV.BookValue1.ClosingBookValue1,309,811,522.04545,687,553.29394,069,086.1612,613,927.33568,987,880.222,831,169,969.042.OpeningBookValue672,123,283.67217,096,222.31168,850,122.839,514,211.94449,287,879.251,516,871,720.001Note:1.TheclosingbalanceincreasedCNY1,314,298,249.04comparedwithopeningbalance,withanincreaseby86.65%,mainlyduetotheinfluenceofincreaseoffixedassetstransferredfromconstructioninprogressthathasreachedintendedusablestateinthereportingperiod.7.10.2.FixedassetswithoutcertificationofrightMonetaryUnit:CNYItemBookvalueReasonfornothavingthecertificationofrightBuildings27,393,870.81Thepropertyownershipcertificatehasnotbeenprocessedyetforthehistoricalreasons,anditplanstobeprocessedaftergraduallyimprovingprocedures.7.10.3.DisposaloffixedassetsMonetaryUnit:CNYItemClosingBalanceOpeningBalance2020InterimReportofLuzhouLaojiaoCo.,Ltd.137Disposalandretirementofassets2,948,153.301,993,677.91Total2,948,153.301,993,677.917.11.ConstructioninprogressMonetaryUnit:CNYItemClosingBalanceOpeningBalanceConstructioninprogress7,066,117,415.737,257,393,087.56Total7,066,117,415.737,257,393,087.567.11.1.DetailsoftheconstructioninprogressMonetaryUnit:CNYItemClosingBalanceOpeningBalanceBookbalanceProvisionforimpairmentBookvalueBookbalanceProvisionforimpairmentBookvalueTechnicalrenovationprojectofbrewing5,564,258,529.025,564,258,529.026,072,403,009.716,072,403,009.71TechnicalrenovationofLuzhouLaojiaoIntelligentpackagingcenter198,164,339.28198,164,339.288,079,135.928,079,135.92ConstructionprojectofLuzhouLaojiaoLiquorCultureMuseumandsupportingfacility401,491,211.54401,491,211.54401,316,175.65401,316,175.65ImprovementandtechnicalrenovationprojectofLuzhouLaojiaoproductionsupporting75,866,942.0575,866,942.0511,346,483.9511,346,483.952020InterimReportofLuzhouLaojiaoCo.,Ltd.138Marketingnetworkcommandcenterofficeareareconstructionandexpansionproject188,237,417.96188,237,417.96220,539,935.89220,539,935.89Newmodelapplicationprojectofintelligentproductionworkshopofsolidstateliquor189,417,456.65189,417,456.65189,417,456.65189,417,456.65GuojiaoCultureParkQiankunWineCastleCulturalTourismproject250,048,605.68250,048,605.68229,262,370.65229,262,370.65Luohanbrewingproductionautomationequipmentrenovationproject1,338,051.221,338,051.22669,025.61669,025.61TransformationofproductionlineofLuzhouLaojiaopackagingworkshop(HuangyiNorthDistrict)19,969,859.0319,969,859.0317,329,425.0217,329,425.02Otherprojects177,325,003.30177,325,003.30107,030,068.51107,030,068.51Total7,066,117,415.737,066,117,415.737,257,393,087.567,257,393,087.567.11.2.SignificantchangesinconstructioninprogressMonetaryUnit:CNYItemBudgetOpeningIncreaseinTransferintoOtherdecreasClosingBalanceProportionofProgress(%)AccumulativeIncluding:CapitalizationSourceoffunds2020InterimReportofLuzhouLaojiaoCo.,Ltd.139BalancecurrentperiodfixedassetsesaccumulativeprojectinputinbudgetcapitalizedinterestCapitalizedinterestfortheperiodratefortheperiod(%)Technicalrenovationprojectofbrewing8,877,276,500.006,072,403,009.71668,790,911.161,176,935,391.855,564,258,529.0279.21%95.00%44,069,847.9632,254,730.463.67%Capitalraisedandself-raisedTechnicalrenovationofLuzhouLaojiaoIntelligentpackagingcenter1,577,913,400.008,079,135.92190,085,203.36198,164,339.2812.56%23.00%OtherImprovementandtechnicalrenovationprojectofLuzhouLaojiaoproductionsupporting888,544,100.0011,346,483.9564,520,458.1075,866,942.058.54%20.00%OtherMarketingnetworkcommand271,500,000.00220,539,935.8917,462,813.5549,765,331.48188,237,417.9687.66%98.00%Other2020InterimReportofLuzhouLaojiaoCo.,Ltd.140centerofficeareareconstructionandexpansionprojectNewmodelapplicationprojectofintelligentproductionworkshopofsolidstateliquor245,100,000.00189,417,456.65189,417,456.6577.28%95.00%OtherGuojiaoCultureParkQiankunWineCastleCulturalTourismproject337,885,813.44229,262,370.6520,786,235.03250,048,605.6874.00%80.00%OtherLuohanbrewingproductionautomationequipmentrenovation59,870,000.00669,025.61669,025.611,338,051.2285.08%95.00%Other2020InterimReportofLuzhouLaojiaoCo.,Ltd.141projectTransformationofproductionlineofLuzhouLaojiaopackagingworkshop(HuangyiNorthDistrict)57,774,100.0017,329,425.022,640,434.0119,969,859.0372.86%85.00%OtherTotal12,315,863,913.446,749,046,843.40964,955,080.821,176,935,391.8549,765,331.486,487,301,200.89----44,069,847.9632,254,730.463.67%--7.12.Intangibleassets7.12.1.DetailsofintangibleassetsMonetaryUnit:CNYItemLanduserightPatentrightNo-patentrighttechnologyTrademarkrightComputersoftwareTotalI.Originalcost1.OpeningBalance403,541,637.891,700,050.441,890,746.0840,655,564.69447,787,999.102.Increaseincurrentperiod114,766,341.801,204,105.75115,970,447.55(1)Acquired114,766,341.801,204,105.75115,970,447.55(2)Internaldeveloped(3)Businesscombination3.Decreaseincurrentperiod(1)Disposal2020InterimReportofLuzhouLaojiaoCo.,Ltd.1424.ClosingBalance518,307,979.691,700,050.441,890,746.0841,859,670.44563,758,446.65II.Accumulatedamortization1.OpeningBalance92,646,292.87440,593.961,628,723.8320,838,355.97115,553,966.632.Increaseincurrentperiod7,281,525.268,398.75100,807.632,923,245.1610,313,976.80(1)Provision7,281,525.268,398.75100,807.632,923,245.1610,313,976.803.Decreaseincurrentperiod(1)Disposal4.ClosingBalance99,927,818.13448,992.711,729,531.4623,761,601.13125,867,943.43III.Provisionforimpairment1.OpeningBalance2.Increaseincurrentperiod(1)Provision3.Decreaseincurrentperiod(1)Disposal4.ClosingBalanceIV.BookValue1.ClosingBookValue418,380,161.561,251,057.73161,214.6218,098,069.31437,890,503.222.OpeningBookValue310,895,345.021,259,456.48262,022.2519,817,208.72332,234,032.471Note:1.TheclosingbalanceincreasedCNY105,656,470.75comparedwiththeopeningbalance,withanincreaseby31.80%,primarilydrivenbytheimpactofacquisitioninthecurrentperiod.2020InterimReportofLuzhouLaojiaoCo.,Ltd.143Thereisnoproportionofintangibleassetsformedbyinternaldevelopmenttothebalanceofintangibleassetsattheperiod-end.7.13.Long-termdeferredexpenseMonetaryUnit:CNYItemOpeningBalanceIncreaseAmortizationOtherdecreaseClosingBalanceImprovementexpenseofrentedfixedassets928,805.232,048,427.67250,314.192,726,918.71Total928,805.232,048,427.67250,314.192,726,918.71OtherstatementsTheclosingbalanceattheperiod-endismainlytheexpensefortheimprovementinChengdulaboratoryandHuaxiBuildingbyoperatinglease.7.14.Deferredtaxassets/deferredtaxliabilities7.14.1.DeferredtaxassetsbeforeoffsetMonetaryUnit:CNYItemClosingBalanceOpeningBalanceDeductibletemporarydifferencesDeferredtaxassetsDeductibletemporarydifferencesDeferredtaxassetsProvisionforassetimpairment208,960,412.3352,240,103.08208,551,338.4952,073,505.61Unrealizedprofitsfrominternaltransactions1,378,558,258.36344,639,564.592,194,391,801.31548,597,950.33Deductiblelosses4,095,434.121,023,858.534,745,206.421,186,301.61Impactfromsalary344,735,026.2886,183,756.57269,597,906.4666,865,466.60Impactfromdeferredearnings23,345,000.005,836,250.0023,845,000.005,961,250.00Impactfromfixedassetsdepreciation282,989.2746,693.23277,518.0745,790.48Impactfromfairvaluechangesofotherequityinstrumentinvestment5,689,397.781,422,349.445,689,397.781,422,349.44Total1,965,666,518.14491,392,575.442,707,098,168.53676,152,614.072020InterimReportofLuzhouLaojiaoCo.,Ltd.1447.14.2.DeferredtaxliabilitiesbeforeoffsetMonetaryUnit:CNYItemClosingBalanceOpeningBalanceTaxabletemporarydifferencesDeferredtaxliabilitiesTaxabletemporarydifferencesDeferredtaxliabilitiesFairvaluechangesofotherequityinstrumentinvestment255,793,172.1363,948,293.05253,721,814.5663,430,453.64Total255,793,172.1363,948,293.05253,721,814.5663,430,453.647.14.3.DetailsofunrecognizeddeferredtaxassetsMonetaryUnit:CNYItemClosingBalanceOpeningBalanceDeductiblelosses16,639,334.6316,684,718.93Impactfromemployeebenefitspayable1,592,824.263,997,637.66Impactfromprovisionforimpairmentofassets184.288,007.14Impactfromfairvaluechangesofotherequityinstrumentinvestment200,000.00200,000.00Total18,432,343.1720,890,363.737.14.4.DeductiblelossesfromunrecognizeddeferredtaxassetswilldueonthefollowingyearsMonetaryUnit:CNYYearClosingAmountOpeningAmountNotes20201,274,970.051,320,354.3520212,942,475.672,942,475.672022668,388.33668,388.332023760,000.23760,000.23202410,993,500.3510,993,500.35Total16,639,334.6316,684,718.93--7.15.Othernon-currentassetsMonetaryUnit:CNYItemClosingBalanceOpeningBalance2020InterimReportofLuzhouLaojiaoCo.,Ltd.145BookbalanceProvisionforimpairmentBookvalueBookbalanceProvisionforimpairmentBookvaluePrepaidequipmentandlandexpense40,853,089.8140,853,089.81237,539,447.75237,539,447.75Total40,853,089.8140,853,089.81237,539,447.75237,539,447.75Otherstatements:TheclosingbalancedecreasedCNY196,686,357.94comparedwiththeopeningbalance,withadecreaseby82.80%,mainlyduetotheimpactoftheprepaymentsettlementonconstructionandpaymentonlandinthecurrentperiodintheBrewingCompany,aCompany'ssubsidiary.7.16.NotespayableMonetaryUnit:CNYCategoryClosingBalanceOpeningBalanceBankacceptancebill6,825,905.98Total6,825,905.98ThetotalamountofnotespayableduebutunpaidwasCNY0.00.7.17.Accountspayable7.17.1.PresentationofaccountspayableMonetaryUnit:CNYCategoryClosingBalanceOpeningBalanceMaterialsandserviceexpense715,529,698.27656,206,916.53Engineeringequipmentexpense1,314,789,606.891,212,417,041.49Total2,030,319,305.161,868,623,958.027.18.ContractliabilitiesMonetaryUnit:CNYCategoryClosingBalanceOpeningBalanceAdvancefromcustomers588,278,202.311,986,232,428.00Total588,278,202.311,986,232,428.001Note:1.TheclosingbalancedecreasedCNY1,397,954,225.69comparedwiththeopeningbalance,withadecreaseby70.38%,mainlyduetothedecreaseofadvancesonsalesresultedfromtheimpactofCOVID-19epidemicinthereportingperiodafterimplementingthenewrevenuestandardsfrom1January2020.2020InterimReportofLuzhouLaojiaoCo.,Ltd.1467.19.Employeebenefitspayable7.19.1.EmployeebenefitspayableshownasfollowsMonetaryUnit:CNYItemOpeningBalanceIncreaseincurrentperiodDecreaseincurrentperiodClosingBalance1.Short-termbenefits287,224,789.36410,510,682.02409,147,717.26288,587,754.122.Post-employmentbenefits-definedcontributionplans54,791,926.6049,684,174.4429,278,113.9575,197,987.093.Terminationbenefits8,971.538,971.53Total342,025,687.49460,194,856.46438,425,831.21363,794,712.747.19.2.Short-termemployeebenefitspayableshownasfollowsMonetaryUnit:CNYItemOpeningBalanceIncreaseincurrentperiodDecreaseincurrentperiodClosingBalance1.Wages,bonuses,allowancesandgrants199,313,121.72348,683,429.83357,369,810.47190,626,741.082.Employees’welfare5,614,973.115,614,973.113.Socialinsurancepremiums19,481,524.2718,100,853.8110,469,438.8427,112,939.24Including:Medicalinsurancepremium14,322,591.6016,157,986.598,479,531.7522,001,046.44Work-relatedinjuryinsurance2,307,307.70775,872.95577,213.622,505,967.03Maternityinsurancepremium2,851,624.971,166,994.271,412,693.472,605,925.774.Housingfunds7,643,514.0627,383,819.1829,056,810.025,970,523.225.Laborunionexpendituresandemployeeeducationfunds60,786,629.3110,727,606.096,636,684.8264,877,550.58Total287,224,789.36410,510,682.02409,147,717.26288,587,754.127.19.3.DefinedcontributionplanshownasfollowsMonetaryUnit:CNY2020InterimReportofLuzhouLaojiaoCo.,Ltd.147ItemOpeningBalanceIncreaseincurrentperiodDecreaseincurrentperiodClosingBalance1.Basicendowmentinsurancepremium40,648,126.7030,495,257.6814,874,649.9156,268,734.472.Unemploymentinsurancepremium7,696,125.09784,072.09595,144.357,885,052.833.Enterpriseannuity6,447,674.8118,404,844.6713,808,319.6911,044,199.79Total54,791,926.6049,684,174.4429,278,113.9575,197,987.097.20.TaxespayableMonetaryUnit:CNYItemClosingBalanceOpeningBalanceValue-addedtax187,720,086.97130,301,346.24Consumptiontax196,714,279.84706,805,251.73Enterpriseincometax754,316,930.43663,458,294.52Individualincometax2,559,830.8824,337,261.47Urbanmaintenanceandconstructiontax26,516,363.3356,353,741.57Educationsurcharge11,364,218.6024,151,666.39Localeducationsurcharge7,576,145.7516,101,110.87Propertytax281,630.411,017,585.02Stampduty438,646.53438,646.53Landusetax616,030.869,891,132.70Others188,194.63188,194.63Total1,188,292,358.231,633,044,231.677.21.OtherpayablesMonetaryUnit:CNYItemClosingBalanceOpeningBalanceInterestpayable90,135,616.4430,650,684.93Dividendspayable2,328,956,436.84Otherpayables569,228,512.02668,291,714.44Total2,988,320,565.30698,942,399.372020InterimReportofLuzhouLaojiaoCo.,Ltd.1487.21.1.InterestpayableMonetaryUnit:CNYItemClosingBalanceOpeningBalanceInterestofcorporatebonds90,135,616.4430,650,684.93Total90,135,616.4430,650,684.937.21.2.DividendspayableMonetaryUnit:CNYItemClosingBalanceOpeningBalanceOrdinarystockdividends2,328,956,436.84Total2,328,956,436.847.21.3.Otherpayables7.21.3.1.CategoriesbynatureMonetaryUnit:CNYItemClosingBalanceOpeningBalanceSecuritydeposit536,427,539.08637,133,029.48Intercoursefunds9,895,610.345,009,860.11Others22,905,362.6026,148,824.85Total569,228,512.02668,291,714.447.22.OthercurrentliabilitiesMonetaryUnit:CNYItemClosingBalanceOpeningBalanceOutputtaxtobetransferred71,461,894.52258,210,215.64Total71,461,894.52258,210,215.641Note:1.TheclosingbalancedecreasedCNY186,748,321.12comparedwiththeopeningbalance,withadecreaseby72.32%,mainlyduetothedecreaseofadvancesonsalesresultedfromtheimpactofCOVID-19epidemicinthereportingperiodafterimplementingthenewrevenuestandardsfrom1January2020.7.23.Bondspayable7.23.1.BondspayableMonetaryUnit:CNY2020InterimReportofLuzhouLaojiaoCo.,Ltd.149ItemClosingBalanceOpeningBalanceCorporatebondsin2019(PhaseI)2,491,821,730.292,490,883,676.39Corporatebondsin2020(PhaseI)1,494,497,956.80Total3,986,319,687.092,490,883,676.397.23.2.Increase/decreaseofbondspayable(excludingotherfinancialinstrumentclassifiedasfinancialliabilitiessuchaspreferredsharesandperpetualbonds)MonetaryUnit:CNYBondnameParvalueIssuingdateDurationIssuingamountOpeningBalanceIssuedinthecurrentperiodWithdrawalofinterestbyparvalueAmortizationofpremiumanddepreciationRepaymentinthereportingperiodClosingBalanceCorporatebondsin2019(PhaseI)2,500,000,000.0027August20193+22,490,000,000.002,490,883,676.3975,032,876.711,821,730.292,491,821,730.29Corporatebondsin2020(PhaseI)1,500,000,000.0016March202051,494,000,000.001,494,000,000.0015,102,739.73497,956.801,494,497,956.80Total------3,984,000,000.002,490,883,676.391,494,000,000.0090,135,616.442,319,687.093,986,319,687.091Note:1.On18July2019,theCompanyobtainedapprovalfromCSRCwiththedocument“ZJXK[2019]No.1312”forpublicissueofcorporatebondscappedatCNY4billion(inclusiveofCNY4billion)toeligibleinvestors(hereinafterreferredtoas“thebonds”).Thebondswouldbeissuedinphaseswithoutguarantee.TheCompany’spublicissueofcorporatebonds(PhaseI)toeligibleinvestorsin2019(hereinafterreferredtoas“thebondsof2019”)startedon27August2019andendedon28August2019;thefinalamountactuallyissuedwasCNY2.5billionandthefinalstatedinterestratewas3.58%.Theshortnameofthebondsof2019was“19Laojiao01”andthecodewas“112959”.ThenominalvalueofeachbondwasCNY100,issuequantity25million,andissuepriceCNY100perbond.Thetermofthebondsof2019isfiveyears,withtheissuer’soptionforadjustmenttothestatedinterestrateandtheinvestor’soptionforsellbackattheendofthethirdyear.Meanwhile,theCompany’spublicissueofcorporatebondstoeligibleinvestorin2020(PhaseI)(shortnamewas“20Laojiao01”andthecodewas“149062”)startedon16March2020andendedon17March2020,ofwhichthefinalamountactuallyissuedwasCNY1.5billionandthefinalstatedinterestratewas3.50%withthetermoffiveyears.7.24.DeferredincomeMonetaryUnit:CNY2020InterimReportofLuzhouLaojiaoCo.,Ltd.150ItemOpeningBalanceIncreaseincurrentperiodDecreaseincurrentperiodClosingBalanceReasonGovernmentgrants23,845,000.00500,000.0023,345,000.00ReceptionoffinancialallocationTotal23,845,000.00500,000.0023,345,000.00--Details:MonetaryUnit:CNYLiabilityItemOpeningBalanceIncreaseincurrentperiodNon-operatingincomeincurrentperiodOtherincomeincurrentperiodCostreductionincurrentperiodOtherchangesClosingBalanceRelatedtoassets/incomeDemonstrationandapplicationprojectofintelligentproductionlineforliquorbrewingandqu-making2,380,000.002,380,000.00RelatedtoassetsNewmodeapplicationprojectofdigitalworkshopforsolidstateliquorproduction3,465,000.003,465,000.00RelevanttoassetConstructionprojectofspiritroomofLuzhouLaojiaobrewingtechnicalrenovation7,000,000.007,000,000.00RelatedtoassetsLuzhouLaojiaoautomaticwineproduction500,000.00500,000.00Relevanttoasset2020InterimReportofLuzhouLaojiaoCo.,Ltd.151linetechnicalrenovationprojectCoolingwatercirculationandwasteheatrecoveryofsteamedbraninbrewingworkshop500,000.00500,000.000.00RelevanttoassetBrewingwastewatertreatmentproject10,000,000.0010,000,000.00Relatedtoassets7.25.SharecapitalMonetaryUnit:CNYOpeningBalanceIncreases/decreasesinthecurrentperiod(+,-)ClosingBalanceIssuanceofnewsharesBondsshareConversionofreservesfundsintosharesOthersSubtotalTotalnumberofshares1,464,752,476.001,464,752,476.007.26.CapitalreservesMonetaryUnit:CNYItemOpeningBalanceIncreaseincurrentperiodDecreaseincurrentperiodClosingBalanceSharepremium(capitalpremium)3,542,967,507.483,542,967,507.48Othercapitalreserves179,809,555.65179,809,555.65Total3,722,777,063.133,722,777,063.132020InterimReportofLuzhouLaojiaoCo.,Ltd.1527.27.OthercomprehensiveincomeMonetaryUnit:CNYItemOpeningBalanceCurrentPeriodClosingBalanceAmountincurrentperiodbeforeincometaxLess:PreviouslyrecognizedinothercomprehensiveincometransferredtoprofitandlossLess:PreviouslyrecognizedinothercomprehensiveincometransferredtoretainedearningsLess:IncometaxAmountattributetoparentcompanyaftertaxAmountattributetonon-controllingshareholdersaftertaxI.Othercomprehensiveincomethatwillnotbereclassifiedintoprofitandloss185,824,312.582,071,357.57517,839.411,553,518.16187,377,830.74Fairvaluechangesofotherequityinstrumentinvestment185,824,312.582,071,357.57517,839.411,553,518.16187,377,830.74II.Othercomprehensiveincomethatwillbereclassifiedintoprofitandloss8,992,817.99-4,560,925.19299,080.03-4,860,005.229,291,898.02Including:Othercomprehensiveincomethatwillbereclassifiedintoprofitandlossunderequitymethod6,159,230.696,242,935.686,242,935.6812,402,166.37Differencefromconversionoffinancialstatementsinforeigncurrency2,833,587.30-10,803,860.87-5,943,855.65-4,860,005.22-3,110,268.35Total194,817,130.57-2,489,567.62517,839.411,852,598.19-4,860,005.22196,669,728.767.28.SurplusreservesMonetaryUnit:CNYItemOpeningBalanceIncreaseincurrentperiodDecreaseincurrentperiodClosingBalanceStatutorysurplusreserves1,464,752,476.001,464,752,476.002020InterimReportofLuzhouLaojiaoCo.,Ltd.153Total1,464,752,476.001,464,752,476.007.29.UndistributedprofitsMonetaryUnit:CNYItemCurrentPeriodPreviousPeriodUndistributedprofitbeforeadjustmentattheendofthelastyear12,559,746,579.9110,181,899,224.84Totaladjustmentforundistributedprofitatthebeginningofyear(+forincrease,-fordecrease)5,752,926.37Undistributedprofitafteradjustmentatthebeginningofyear12,559,746,579.9110,187,652,151.21Plus:Netprofitattributabletoownersoftheparentcompanyforthecurrentperiod3,220,452,190.272,749,781,041.42Ordinarysharedividendspayable2,328,956,436.842,270,366,337.80Undistributedprofitsattheendoftheperiod13,451,242,333.3410,667,066,854.837.30.OperatingrevenueandcostofsalesMonetaryUnit:CNYItemCurrentPeriodPreviousPeriodRevenueCostofsalesRevenueCostofsalesPrimarybusiness7,566,057,028.331,360,968,975.637,921,465,489.461,596,030,314.78Otherbusiness68,425,873.5425,667,453.2291,569,530.2630,412,817.41Total7,634,482,901.871,386,636,428.858,013,035,019.721,626,443,132.197.31.BusinesstaxesandsurchargesMonetaryUnit:CNYItemCurrentPeriodPreviousPeriodConsumptiontax509,573,103.20811,673,839.81Urbanmaintenanceandconstructiontax84,391,437.23113,578,609.14Educationalsurcharge36,066,318.4248,676,546.77Propertytax6,080,276.415,410,638.81Landusetax14,387,112.7912,786,606.75Stampduty5,152,513.601,996,228.892020InterimReportofLuzhouLaojiaoCo.,Ltd.154Localeducationsurcharge23,815,732.6532,451,031.22Others47,336.52437,426.49Total679,513,830.821,027,010,927.881Note:1.TheamountinthecurrentperioddecreasedCNY347,497,097.06comparedwiththatofpreviousperiod,withadecreaseby33.84%,primarilydrivenbytheimpactofdecreaseofconsumptiontaxinthereportingperiod.7.32.SellinganddistributionexpensesMonetaryUnit:CNYItemCurrentPeriodPreviousPeriodAdvertisingpromotionandmarketingexpense776,665,852.751,111,488,089.51Transportationandstoragecosts45,113,965.94150,264,300.20Others290,178,390.29276,749,331.50Total1,111,958,208.981,538,501,721.21Otherstatements:Note:Accordingtonewrevenuestandards,thetransportationfeeofcontractperformancecostwillbeadjustedto“operatingcoasts”from“sellingexpenses”toaccount.7.33.GeneralandadministrativeexpensesMonetaryUnit:CNYItemCurrentPeriodPreviousPeriodEmployeecompensation202,689,320.65203,392,254.29Depreciationandamortization51,721,598.9262,017,736.80Managementfeeandserviceexpense23,647,099.5411,106,919.06Others81,955,956.6564,052,511.99Total360,013,975.76340,569,422.147.34.ResearchanddevelopmentexpensesMonetaryUnit:CNYItemCurrentPeriodPreviousPeriodComprehensiveresearchanddevelopmentexpenses32,028,581.2822,297,485.65Total32,028,581.2822,297,485.65Otherstatements:Note:TheamountinthecurrentperiodincreasedCNY9,731,095.63comparedwiththatofpreviousperiod,withanincreaseby43.64%,primarilydrivenbytheimpactofincreaseofresearchanddevelopmentprojectsinthereporting2020InterimReportofLuzhouLaojiaoCo.,Ltd.155period.7.35.FinancialexpensesMonetaryUnit:CNYItemCurrentPeriodPreviousPeriodInterestexpenses66,532,174.9964,806,647.95Less:Interestincome173,389,442.03160,388,809.43Lossesfromcurrencyexchange-1,530,667.65-1,029,860.86Handlingcharges113,098.00402,368.44Total-108,274,836.69-96,209,653.907.36.OtherincomeMonetaryUnit:CNYItemCurrentPeriodPreviousPeriodGovernmentgrants9,570,078.3017,293,543.26Individualincometaxcommissionrefund871,596.977.37.InvestmentincomeMonetaryUnit:CNYItemCurrentPeriodPreviousPeriodInvestmentincomefromlong-termequityinvestmentsundertheequitymethod94,958,932.0488,275,961.45Dividendincomegainedduringtheperiodofholdingotherequityinstrumentinvestment9,379,824.368,748,669.71Total104,338,756.4097,024,631.16Otherstatements:ThereisnomajorrestrictionontherepatriationoftheCompany'sinvestmentincome.7.38.CreditimpairmentlossMonetaryUnit:CNYItemCurrentPeriodPreviousPeriodBaddebtlossofotherreceivables-1,055,457.65-3,176,665.28Baddebtlossofaccountsreceivable654,390.95-658,618.962020InterimReportofLuzhouLaojiaoCo.,Ltd.156Total-401,066.70-3,835,284.24Otherstatements:Note:TheamountinthecurrentperioddecreasedCNY3,434,217.54comparedwiththatofpreviousperiod,withadecreaseby89.54%,primarilydrivenbytheimpactofdecreaseofaccountsreceivableinthereportingperiod.7.39.GainsfromdisposalofassetsMonetaryUnit:CNYItemCurrentPeriodPreviousPeriodGainsfromdisposalofnon-currentassets104,663.83248,064.82Including:Gainsfromdisposaloffixedassets104,663.83248,064.82GainsfromdisposalofintangibleassetsTotal104,663.83248,064.827.40.Non-operatingincomeMonetaryUnit:CNYItemCurrentPeriodPreviousPeriodTheamountincludedintheextraordinarygainsandlossesofthecurrentperiodCompensationfordefault1,019,231.184,957,308.011,019,231.18Others9,925,210.5312,803,259.889,925,210.53Total10,944,441.7117,760,567.8910,944,441.717.41.Non-operatingcostsMonetaryUnit:CNYItemCurrentPeriodPreviousPeriodTheamountincludedintheextraordinarygainsandlossesofthecurrentperiodDonation24,034,863.694,800,000.0024,034,863.69Others15,182,522.39269,812.9115,182,522.39Total39,217,386.085,069,812.9139,217,386.082020InterimReportofLuzhouLaojiaoCo.,Ltd.1577.42.Incometaxexpense7.42.1.StatementofincometaxexpenseMonetaryUnit:CNYItemCurrentPeriodPreviousPeriodCurrentperiodincometax849,516,324.48993,254,782.13Deferredincometax184,760,038.63-95,022,512.83Total1,034,276,363.11898,232,269.307.42.2.AdjustmentforaccountingprofitandincometaxexpenseMonetaryUnit:CNYItemCurrentPeriodTotalprofit4,258,817,797.30Incometaxexpensesdeterminedbystatutory/applicabletaxrate1,064,704,449.33Impactfromsubsidiaries’differenttaxrates-1,029,603.50Impactfromadjustforimpactfromincometaxexpenseinpreviousperiod18,225,544.27Impactfromnon-taxableincome-26,085,591.85Impactfromnon-deductiblecosts,expensesandlosses6,832,402.88Impactfromdeductablelossesofunrecognizeddeferredincometaxatthebeginningofthereportingperiod-11,208,636.44Impactfromdeductibletemporarydifferenceorlossesduetounrecognizeddeferredtaxassetincurrentperiod-8,338,450.17Impactfromresearchanddevelopmentexpensededuction-8,823,751.41Incometaxexpense1,034,276,363.117.43.OthercomprehensiveincomeDetailsinNote5.27.Othercomprehensiveincome.7.44.Notestothestatementofcashflow7.44.1.CashreceivedfromotheroperationactivitiesMonetaryUnit:CNYItemCurrentPeriodPreviousPeriod2020InterimReportofLuzhouLaojiaoCo.,Ltd.158Governmentgrants9,941,675.273,798,856.00Interestincomefrombankdeposit146,071,271.36148,852,282.99Others62,865,732.8166,845,377.00Total218,878,679.44219,496,515.997.44.2.CashpaidforotheroperatingactivitiesMonetaryUnit:CNYItemCurrentPeriodPreviousPeriodCashpaidforexpenses1,114,045,507.541,078,940,602.22Total1,114,045,507.541,078,940,602.227.44.3.CashpaidforotherinvestingactivitiesMonetaryUnit:CNYItemCurrentPeriodPreviousPeriodCashpaidforbuyingequityofPinchuang10,149,100.00Ratingandregistrationfeeofcorporationbondin2020(PhaseI)180,000.00Total180,000.0010,149,100.007.45.Supplementaryinformationtostatementofcashflow7.45.1.SupplementaryinformationtostatementofcashflowMonetaryUnit:CNYItemCurrentPeriodPreviousPeriod1.Reconciliationofnetprofittocashflowfromoperatingactivities:----Netprofit3,224,541,434.192,779,611,425.23Creditimpairmentprovision401,066.703,835,284.24Depreciationoffixedasset,oilandgasassetsandproductivebiologicalassets117,157,264.8077,589,989.75Amortizationofintangibleassets10,313,976.805,020,288.05Amortizationoflong-termdeferredexpense250,314.19Lossesfromdisposaloffixedassets,intangibleassetsandotherlong-term-104,663.83-248,064.822020InterimReportofLuzhouLaojiaoCo.,Ltd.159assets(Gainsuse“-”)Financialexpenses(Gainsuse“-”)-108,274,836.69-96,209,653.90Lossesoninvestments(Gainsuse“-”)-104,338,756.40-97,024,631.16Decreaseindeferredincometaxassets(Increaseuses“-”)184,760,038.63-95,022,512.83Increaseindeferredincometaxliabilities(Decreaseuses“-”)517,839.4120,582,191.10Decreaseininventories(Increaseuse“-”)164,180,911.74-81,624,827.38Decreaseinoperatingreceivables(Increaseuse“-”)-507,042,866.12-226,272,769.49Increaseinoperatingpayables(Decreaseuse“-”)-2,253,546,301.18-583,486,128.45Netcashflowsfromoperatingactivities728,815,422.241,706,750,590.342.Significantinvestingandfinancingactivitiesnotinvolvingcash:----3.Netchangeincashandcashequivalents:----Closingbalanceofcash10,932,349,651.469,697,593,836.79Less:Openingbalanceofcash9,752,266,526.789,365,986,627.68Netchangeincashandcashequivalents1,180,083,124.68331,607,209.117.45.2.CompositionofcashandcashequivalentMonetaryUnit:CNYItemOpeningBalanceClosingBalance1.Cash10,932,349,651.469,752,266,526.78Including:Cashonhand15,116.5328,776.67Unrestrictedbankdeposit10,914,711,794.099,744,243,225.66Otherunrestrictedcashandcashequivalents17,622,740.847,994,524.453.Closingbalanceofcashandcashequivalents10,932,349,651.469,752,266,526.78Including:Cashandcashequivalentwithrestrictiontouseofparentcompanyandsubsidiaries1,400,000.001,400,000.00Otherstatements:ThedifferencebetweentheclosingbalanceofcashandcashequivalentsandcashatbankandonhandisCNY2020InterimReportofLuzhouLaojiaoCo.,Ltd.1601,400,000.00,whichisatravelservicedepositwithlimiteduserightsinothercashandcashequivalents.7.46.AssetswithrestrictedownershiporuserightsMonetaryUnit:CNYItemClosingbookbalanceReasonforrestrictionOthercashandcashequivalents1,400,000.00Accordingtotheregulationsoftourismbureau,travelservicedepositisdepositedinadesignatedbank.Total1,400,000.00--7.47.Foreigncurrencytransactions7.47.1.ForeigncurrencytransactionsMonetaryUnit:CNYItemClosingBalanceinForeignCurrencyExchangeRateClosingBalanceinCNYCashatBankandonHand----Including:USD20,234,946.887.13160144,307,547.16EURHKD82,234,059.920.9143775,192,357.37AccountsReceivable----Including:USD35,972.637.13160256,542.41EURHKD2,799,452.060.914372,559,734.98OtherReceivablesIncluding:USDHKD3,732,504.410.914373,412,890.06AUDAccountsPayableIncluding:USD59,824.087.13160426,641.41HKD4,893,526.260.914374,474,493.61OtherPayablesIncluding:USD260,947.317.131601,860,971.84HKD21,715,718.350.9143719,856,201.39Long-termLoans----2020InterimReportofLuzhouLaojiaoCo.,Ltd.161Including:USDEURHKD7.47.2.Descriptionoftheforeignbusinessentity,includingtheimportantforeignbusinessentity,shalldiscloseitsmainforeignbusinessplace,bookkeepingstandardcurrencyandselectionbasis,andshallalsodisclosethereasonforthechangeofthebookkeepingstandardcurrency√ApplicableN/ACompanyOperationsiteBookkeepingcurrencyChoosingReasonLuzhouLaojiaoInternationalDevelopment(HongKong)Co.,Ltd.HongKong,ChinaHKDCurrencyintheregistrationplaceMingjiangCo.,Ltd.USAUSDCurrencyintheregistrationplaceLuzhouLaojiaoCommercialDevelopment(NorthAmerica)Co.,Ltd.USAUSDCurrencyintheregistrationplace7.48.Governmentgrants7.48.1.DetailsofgovernmentgrantsMonetaryUnit:CNYItemAmountPresentationAmountincludedinprofitorlossofthecurrentperiodRelatedtoassets23,845,000.00Deferredincome500,000.00Relatedtoincome9,941,675.27Otherincome9,941,675.277.48.2.ReturnofgovernmentgrantsApplicable√N/A8.Interestsinotherentities8.1.Interestsinsubsidiaries8.1.1.GroupcompositionNameofSubsidiariesMajorbusinesslocationPlaceofregistrationNatureofbusinessShareholdingProportionAcquisitionmethodDirectIndirect2020InterimReportofLuzhouLaojiaoCo.,Ltd.162LuzhouLaojiaoBrewingCo.,Ltd.LuzhouLuzhouLiquormanufactureandsales100.00%InvestmentLuzhouRedSorghumModernAgriculturalDevelopmentCo.,Ltd.LuzhouLuzhouAgriculturalproductplantingandsales60.00%BusinesscombinationundercommoncontrolSalesCompanyofLuzhouLaojiaoCo.,Ltd.LuzhouLuzhouLiquorsales100.00%InvestmentLuzhouLaojiaoNostalgicLiquorMarketingCo.,Ltd.LuzhouLuzhouLiquorsales100.00%InvestmentLuzhouLaojiaoCustomLiquorCo.,Ltd.LuzhouLuzhouLiquorsales15.00%InvestmentLuzhouLaojiaoSelectedSupplyChainManagementCo.,Ltd.LuzhouLuzhouLiquorsales100.00%InvestmentGuangxiLuzhouLaojiaoImportedLiquorIndustryCo.,Ltd.QinzhouQinzhouRedwineproductionandsales100.00%InvestmentLuzhouDingliLiquorIndustryCo.,Ltd.LuzhouLuzhouLiquorsales100.00%InvestmentLuzhouDingyiLiquorIndustrySalesCo.,Ltd.LuzhouLuzhouLiquorsales100.00%InvestmentLuzhouDinghaoLiquorIndustrySalesCo.,Ltd.LuzhouLuzhouLiquorsales100.00%InvestmentLuzhouLaojiaoImportandExportTradeLuzhouLuzhouWineimportandexporttrade100.00%Investment2020InterimReportofLuzhouLaojiaoCo.,Ltd.163Co.,Ltd.LuzhouLaojiaoBodaLiquorIndustryMarketingCo.,Ltd.LuzhouLuzhouLiquorsales75.00%InvestmentLuzhouLaojiaoBoshengHengxiangLiquorSalesCo.,Ltd.LuzhouLuzhouLiquorsales100.00%InvestmentLuzhouLaojiaoFruitWineIndustryCo.,Ltd.LuzhouLuzhouFruitwinesales41.00%InvestmentMingjiangCo.,Ltd.AmericaAmericaLiquorsales54.00%InvestmentLuzhouPinchuangTechnologyCo.,Ltd.LuzhouLuzhouTechnologydevelopmentandservice100.00%InvestmentLuzhouLaojiaoTourismCultureCo.,Ltd.LuzhouLuzhouLiquorsales,tourism100.00%InvestmentLuzhouLaojiaoInternationalDevelopment(HongKong)Co.,Ltd.HongKongHongKongWinesales55.00%InvestmentLuzhouLaojiaoCommercialDevelopment(NorthAmerica)Co.,Ltd.AmericaAmericaBusinessdevelopment100.00%InvestmentLuzhouLaojiaoElectronicCommerceCo.,Ltd.LuzhouLuzhouWinesales90.00%InvestmentLuzhouLaojiaoWhitailInnovatedLuzhouLuzhouWinesales100.00%Investment2020InterimReportofLuzhouLaojiaoCo.,Ltd.164ElectronicCommerceCo.,Ltd.LuzhouLaojiaoSelectedElectronicCommerceCo.,Ltd.LuzhouLuzhouWinesales100.00%InvestmentLuzhouLaojiaoWhitailLiquorIndustryCo.,Ltd.NoteLuzhouLuzhouWinesales35.00%InvestmentChengduTianfuPandaWhitailLiquorIndustryCo.,Ltd.NoteChengduChengduWinesales60.00%InvestmentLuzhouWhitailTongdaoUncleConstellationWineSalesCo.,Ltd.NoteLuzhouLuzhouWinesales70.00%InvestmentLuzhouBaonuoBiotechnologyCo.,Ltd.LuzhouLuzhouFermentedproductmanufacture100.00%InvestmentLuzhouLaojiaoHealthLiquorIndustryCo.,Ltd.LuzhouLuzhouHealthcarewinemanufactureandsales100.00%BusinesscombinationundercommoncontrolLuzhouLaojiaoHealthSalesCo.,Ltd.LuzhouLuzhouHealthcarewinesales100.00%BusinesscombinationundercommoncontrolStatementforthattheproportionofshare-holdingisdifferentfromtheproportionofvotingrights:AstheNote1.6,theCompanyholdslessthan51%sharesofLuzhouLaojiaoCustomLiquorCo.,Ltd.,LuzhouLaojiaofruitwineindustryCo.,Ltd.,andLuzhouLaojiaoWhitailLiquorIndustryCo.,Ltd.butinthesecompanies’board,amongthefivemembers,theCompanyhassentthreepersons,whichisinthemajority.TheCompanyhassubstantialcontroloverthesecompanies,sotheyareincludedintheconsolidationscope.8.1.2.Importantnon-wholly-ownedsubsidiariesMonetaryUnit:CNYNameofsubsidiaryProportionofshareGainsandlossesDividendspaidtoClosingbalanceof2020InterimReportofLuzhouLaojiaoCo.,Ltd.165holdingsofnon-Controllingshareholdersattributabletonon-Controllingshareholdersduringcurrentperiodnon-controllingshareholdersduringcurrentperiodnon-controllingshareholdersinterestLuzhouLaojiaoBodaLiquorIndustryMarketingCo.,Ltd.25.00%-8,478,085.8479,866,090.688.1.3.Majorfinancialinformationofimportantnon-wholly-ownedsubsidiariesMonetaryUnit:CNYNameofsubsidiaryClosingBalanceOpeningBalanceCurrentassetsNon-currentassetsTotalassetsCurrentliabilitiesNon-currentliabilitiesTotalliabilitiesCurrentassetsNon-currentassetsTotalassetsCurrentliabilitiesNon-currentliabilitiesTotalliabilitiesLuzhouLaojiaoBodaLiquorIndustryMarketingCo.,Ltd.903,590,282.111,920,963.51905,511,245.62586,046,882.92586,046,882.921,314,554,833.372,881,595.651,317,436,429.02964,059,722.96964,059,722.96MonetaryUnit:CNYNameofsubsidiaryCurrentPeriodPreviousPeriodOperatingrevenueNetprofitTotalcomprehensiveincomeOperatingcashflowOperatingrevenueNetprofitTotalcomprehensiveincomeOperatingcashflowLuzhouLaojiaoBodaLiquorIndustryMarketingCo.,Ltd.681,478,570.36-33,912,343.36-33,912,343.364,354,456.341,242,290,444.2658,199,867.6658,199,867.666,001,688.708.2.Interestsinjointventuresandassociates8.2.1.ImportantjointventuresandassociatesNameofjointMajorbusinessPlaceofBusinessnatureShareholdingproportionAccounting2020InterimReportofLuzhouLaojiaoCo.,Ltd.166venture/associateslocationregistrationDirectIndirectMethodImportantjointventures:NoneImportantassociates:HuaxiSecuritiesCo.,Ltd.Chengdu,SichuanChengdu,SichuanSecurities10.39%EquitymethodStatementforthattheproportionofshareholdingsinjointventuresorassociatesisdifferentfromtheproportionofvotingrights:TheCompanyhassentdirectorstotheboardofHuaxiSecuritiesandhasthecorrespondingsubstantivedecision-makingpower,sotheCompanystillhassignificantinfluenceonHuaxiSecurities.8.2.2.MajorfinancialinformationofimportantassociatesMonetaryUnit:CNYClosingBalance/AmountincurrentperiodOpeningBalance/AmountinpreviousperiodCurrentassets71,784,083,573.7257,134,274,353.71Non-currentassets9,443,735,656.2710,693,128,565.71Totalassets81,227,819,229.9967,827,402,919.42Currentliabilities48,588,373,248.5139,721,993,771.95Non-currentliabilities12,211,020,210.618,411,797,290.51Totalliabilities60,799,393,459.1248,133,791,062.46Non-controllingshareholderinterest45,500,512.4144,225,184.16Shareholderinterestattributabletoparentcompany20,382,925,258.4619,649,386,672.80Shareofnetassetscalculatedbasedonshareholdingproportion2,117,785,934.352,042,272,245.65--Others167,466,735.90167,466,735.90Bookvalueofequityinvestmentsinassociatecompanies2,291,242,323.122,209,738,981.55Fairvalueofequityinvestmentsinassociatecompaniesthathavepublicquote2,900,195,060.723,003,870,895.44Operatingrevenue2,093,322,666.772,004,723,301.51Netprofit923,922,741.39855,773,668.362020InterimReportofLuzhouLaojiaoCo.,Ltd.167Othercomprehensiveincome10,391,172.5258,174,536.83Totalcomprehensiveincome934,313,913.91913,948,205.198.2.3.FinancialinformationsummarizedofunimportantjointventuresandassociatecompaniesMonetaryUnit:CNYClosingBalance/AmountincurrentperiodOpeningBalance/AmountinpreviousperiodJointventures:----Totalfollowingitemscalculatedonthebasisofshareholdingproportion----Associatecompanies:----Totalbookvalueofinvestments19,946,103.3828,982,744.17Totalfollowingitemscalculatedonthebasisofshareholdingproportion------Netprofit-1,036,640.79-1,051,774.26--Totalcomprehensiveincome-1,036,640.79-1,051,774.269.RisksrelatedtofinancialinstrumentsBusinessactivitiesofacompanyusuallyfacevariousfinancialrisks,mainlycreditrisk,liquidityriskandmarketrisk.TheCompany'soverallriskmanagementplanaddressestheunpredictabilityoffinancialmarketsandseekstoreducepotentialadverseeffectsontheCompany'sfinancialperformance.9.1.CreditriskCreditriskreferstotheriskthatonepartytoafinancialinstrumentcannotperformitsobligations,causingfinanciallossestotheotherparty.TheCompanyonlytradeswithrecognized,reputable,andlargethirdparties.InaccordancewiththeCompany'spolicy,thetermsofsalewithcustomersarebasedontransactionsofpaymentbeforedelivery,withonlyasmallamountofcredittransactions,andcreditreviewforallcustomerswhorequirecredittotrade.Inaddition,theCompanycontinuouslymonitorsandcontrolsthebalanceofthereceivablestoensurethattheCompanydoesnotfacesignificantbaddebtrisks.9.2.LiquidityriskLiquidityriskreferstotheriskunabletoobtainsufficientfundsintimetomeetbusinessdevelopmentneedsortorepaydebtsdueandotherpaymentobligations.TheCompanyhassufficientworkingcapital,andinrecentyearstherehasbeennoexternalborrowingtosupplementtheworkingcapitalofdailyoperatingactivities.Theliquidityriskisextremelysmall.9.3.MarketriskMarketriskreferstotheriskthatthefairvalueorfuturecashflowoffinancialinstrumentswillfluctuateduetochangesinmarketprices,includingforeignexchangerisk,interestrateriskandotherpricerisks.9.3.1.ForeignexchangeriskTheCompany'smainbusinessislocatedinthemainlandofChina,andmainbusinessissettledinCNY.Onlytwosubsidiaries,HongKongcompanyandMingjiangcompany,settleinHKDinHongKongandUSDintheUnitedStatesrespectively.Theproportionandimpactoftheirincomeandprofitscalearenegligible,andtheforeignexchangeriskis2020InterimReportofLuzhouLaojiaoCo.,Ltd.168minimal.9.3.2.RateriskTheCompany'soperatingcapitalissufficientandinrecentyearstherehasbeennoexternalborrowing,sointerestrateriskisminimal.9.3.3.OtherpricerisksOtherpriceriskreferstotheriskoffluctuationcausedbymarketpricechangesotherthanforeignexchangeriskandinterestraterisk,whetherthesechangesarecausedbyfactorsrelatedtoasinglefinancialinstrumentoritsissuerorallsimilarfinancialinstrumentstradedinthemarket.OtherpricerisksfacedbytheCompanymainlycomefromavailable-for-salefinancialassetsmeasuredatfairvalue.10.Fairvaluedisclosure10.1.ClosingfairvalueofassetsandliabilitiesmeasuredatfairvalueMonetaryUnit:CNYItemClosingfairvalueLevel1Level2Level3Total1.Continuousmeasurementatfairvalue--------1.3Otherequityinstrumentinvestment320,662,328.8933,804,284.46354,466,613.351.6Accountsreceivablefinancing2,855,987,446.812,855,987,446.812.Discontinuousmeasurementatfairvalue--------10.2.DeterminationbasisofthemarketvalueofitemsmeasuredcontinuouslyanddiscontinuouslywithinLevel1ofthefairvaluehierarchyThelistedcompaniesinmainlandChinadeterminethefairvalueofotherequityinstrumentinvestmentaccordingtotheclosingpriceonthelasttradingdayofShenzhenStockExchangeorShanghaiStockExchangeattheperiod-end.ThecompanieslistedinHongKongdeterminethefairvalueofotherequityinstrumentinvestmentaccordingtotheclosingpriceofHongKongDollaronthelasttradingdayofHongKongStockExchangeattheperiod-endandthemedianpriceofRMBexchangeratedisclosedonthesamedaybyChinaForeignExchangeTradeSystem.10.3.ValuationtechniqueadoptedandnatureandamountdeterminationofimportantparametersforcontinuouslyanddiscontinuouslywithinLevel3ofthefairvaluehierarchyAccountsreceivablefinancing:Duetotheshorttermofnotesreceivablelessthan1year,andthesalestime,salespriceandsaleproportioncannotbeestimatedreliably,theCompanyshallmeasurethefairvaluebyregardingthefacevalueasthereasonableestimation.2020InterimReportofLuzhouLaojiaoCo.,Ltd.169Otherequityinstrumentinvestment:Duetonosignificantchangesinbusinessenvironment,businessconditionandfinancialsituationofinvestedcompanies,theCompanyshallmeasurethefairvalueaccordingtotheloweronebetweeninvestmentcostandtheshareofnetassetsenjoyedbyinvestedcompaniesonthebasedateasthereasonableestimation.11.Relatedpartiesandrelatedpartytransactions11.1.TheparentcompanyoftheCompanyParentcompanyRegistrationplaceBusinessnatureRegisteredcapitalShareholdingproportionbytheparentcompanyVotingrightsproportionbytheparentcompanyLuzhouLaojiaoGroupCo.,Ltd.Luzhou,SichuanInvestmentandassetmanagement2,798,818,800.0026.02%51.01%Statementsforsituationofparentcompany:Thenatureofparentcompany:Limitedliabilitycompany(whollystate-owned);registrationplace:AiRentangSquare,ChinaLiquorGoldenTriangleWineIndustryPark,Luzhou,SichuanProvince;BusinessScope:Investmentandassetmanagement;investmentinliquor,food,finance,trade,logistics,education,medicalandhealth,culturaltourism,Internetindustry;holdingcompanyservices;socialeconomicconsulting,businessmanagementconsulting;enterprisemanagementservices;supplychainmanagementservices;importandexportbusinessandtradeagency;foodproduction,sales(includingonline);plantingandsalesofcrops(includingonline).(TheCompanycannotstartbusinessactivitiesuntilprojectssubjecttoapprovalaccordingtolawareapprovedbyrelevantdepartments.)ThefinalcontrolpartyoftheCompanyisSASACofLuzhou.11.2.SubsidiariesoftheCompanyFordetailspleaseseeNote7.1.Interestsinsubsidiaries.11.3.JointventuresandassociatesoftheCompanyFordetailspleaseseeNote7.3.Interestsinjointventuresandassociates.OtherstatementsTherearenootherjointventuresorassociatesthathaverelatedpartytransactionswiththeCompanyinthecurrentperiodorinthepreviousperiodandresultinbalance.11.4.OtherrelatedpartyoftheCompanyNameofOtherRelatedPartyRelationshipwiththeCompanyLuzhouJiaxinHoldingGroupCo.,Ltd.ThesameparentcompanyLuzhouLaojiaoZhitongTradingCo.,Ltd.ThesameparentcompanyLuzhouLianzhongLogisticsCo.Ltd.ThesameparentcompanyLuzhouCOSCOLianzhongLogisticsCo.,Ltd.Thesameparentcompany2020InterimReportofLuzhouLaojiaoCo.,Ltd.170LuzhouLaojiaoCommercialCollegeofLuzhouThesameparentcompanySichuanKangrunGroupYongshengAssetOperationManagementCo.,Ltd.ThesameparentcompanySichuanWine&SpiritsTradingCenterCo.,Ltd.ThesameparentcompanySichuanKangrunGroupRealEstateDevelopmentCo.,Ltd.ThesameparentcompanySichuanKangrunInvestmentGroupCo.,Ltd.ThesameparentcompanyNewShottesBrookPrivateCompanyThesameparentcompanyHuaxiSecuritiesCo.,Ltd.AssociatecompanyandthesameparentcompanyLaojiaoGroupanditsothersubsidiariesThesameparentcompanyLuzhouCommunicationInvestmentGroupAutoServiceCo.,Ltd.SubsidiaryofthesecondlargestshareholderLuzhouHuarunXingLuGasCo.,Ltd.SubsidiaryofthesecondlargestshareholderLuzhouXingLuWater(Group)Co.,Ltd.SubsidiaryofthesecondlargestshareholderLuzhouXingLuPropertyManagementCo.,Ltd.SubsidiaryofthesecondlargestshareholderLuzhouXingLuInvestmentGroupCo.,Ltd.anditsothersubsidiariesOthersubsidiaryofthesecondlargestshareholderOtherstatements:Note1:On31December2015,LaojiaoGroupandXingLuInvestmentGroup,thesecondbiggestshareholder,signedaconcertedactionagreementthatwhenthepartiesindealwiththeCompany’sbusinessdevelopmentandmakedecisionsbyshareholdersmeetingandboardofdirectorsaccordingtothecompanylawandotherrelevantlawsandregulationsandthearticlesofassociation,thepartiesshouldadopttheconsistentactions.Theagreementisvalidasof13December2015andendson1June2021.Duringtheeffectiveperiodofthisagreement,beforeanypartysubmitsproposalsinvolvingthemajorissuesoftheCompany'sbusinessdevelopmenttotheshareholdersmeetingorexercisethevotingrightsattheshareholdersmeetingandtheboardofdirectors,theinternalcoordinationforrelevantproposalsandvotingeventsshallbeconductedbypersonsactinginconcert.Iftherearedifferentopinions,itwillbesubjecttoLaojiaoGroup’sopinion.Inviewofthis,theCompanywilldisclosethetransactionswithXingLuInvestmentGroupanditscontrollingenterprisesasotherrelatedpartiesoftheCompany.11.5.Relatedtransactions11.5.1.Relatedtransactionsofpurchaseandsalesofgoods/renderingandreceiptofservicesTableofpurchaseofgoods/receiptofservicesMonetaryUnit:CNYNameofRelatedPartyTransactionAmountincurrentperiodApprovedtradingamountWhetheroverapprovedtradingamountAmountinpreviousperiodReceiptofservices:2020InterimReportofLuzhouLaojiaoCo.,Ltd.171LuzhouXingLuInvestmentGroupCo.,Ltd.anditsothersubsidiariesPropertymanagementfee,etc.1,573,495.21LaojiaoGroupanditsothersubsidiariesTraining,accommodation,storage,transportationservices,etc.31,544,140.6231,584,485.67Purchaseofgoods:LuzhouJiaxinHoldingGroupCo.,Ltd.Housingconstructionfee,landexpense,etc.189,886,890.41LaojiaoGroupanditsothersubsidiariesRedwine,water,power,gas,etc.10,884,402.8517,875,795.12LuzhouXingLuInvestmentGroupCo.,Ltd.anditsothersubsidiariesWater,gas,etc.4,215,676.773,775,017.46Total238,104,605.8653,235,298.25TableofsalesofgoodsandrenderingofserviceMonetaryUnit:CNYNameofRelatedPartyTransactionAmountincurrentperiodAmountinpreviousperiodSalesofgoods:LaojiaoGroupanditssubsidiariesWine,etc.1,016,556.745,516,565.23XingLuInvestmentGroupanditssubsidiariesWine74,880.00Total1,016,556.745,591,445.2311.5.2.RelatedpartyleasingTheCompanyaslessee:MonetaryUnit:CNYNameoflessorTypeofleasedassetLeasingfeerecognizedduringcurrentperiodLeasingfeerecognizedduringpreviousperiodLaojiaoGroupanditsHouselease1,589,785.012020InterimReportofLuzhouLaojiaoCo.,Ltd.172subsidiaries11.5.3.KeymanagementcompensationMonetaryUnit:CNYItemAmountincurrentperiodAmountinpreviousperiodKeymanagement3,359,999.883,039,999.9011.6.Receivablesandpayablesofrelatedparties11.6.1.ReceivablesMonetaryUnit:CNYItemRelatedpartyClosingBalanceOpeningBalanceBookvalueProvisionforbaddebtBookvalueProvisionforbaddebtOthernon-currentassets(transferprepaymentoflanduseright)LuzhouJiaxinHoldingGroupCo.,Ltd.70,994,300.00PrepaymentLaojiaoGroupanditssubsidiaries32,148,505.7632,149,113.33OtherreceivablesLaojiaoGroupanditssubsidiaries10,000.0010,000.00AccountsreceivableLaojiaoGroupanditssubsidiaries2,596.77PrepaymentXingLuGroupanditssubsidiaries119,942.783,145.7011.6.2.PayablesMonetaryUnit:CNYItemRelatedpartyClosingBalanceOpeningBalanceAccountspayableLuzhouJiaxinHoldingGroupCo.,Ltd.68,263,979.99178,170.40AccountspayableLaojiaoGroupanditssubsidiaries11,325.20508,292.02AdvancefromcustomersLaojiaoGroupanditssubsidiaries2,947.965,148.03OtherpayablesLaojiaoGroupandits986,948.00950,000.002020InterimReportofLuzhouLaojiaoCo.,Ltd.173subsidiariesAccountspayableXingLuGroupanditssubsidiaries310,969.53OtherpayablesXingLuGroupanditssubsidiaries100,000.00100,000.0012.Commitmentsandcontingencies12.1.Contingencies12.1.1.SignificantcontingenciesatthebalancesheetdateTheCompany’sthreesavingsdepositsofCNY500million,includingABCChangshaYingxinSub-branchandICBCNanyangZhongzhouSub-branchareinvolvedincontractdisputes.TheCompanyhasreportedtothepublicsecurityauthoritiesforinterventionwiththeassetspreservationmeasureandfiledcivilclaimsfortwocontractdisputesamongthethreecases.Combinedwiththeassetspreservationsituationofthepublicsecurityauthoritiesandprofessionallegaladviceissuedbylawyers,theCompanyhasmadeaprovisionofCNY200millionforbaddebtsforthedepositofCNY500millionforcontractdisputes.Duringthereportingperiod,theSupremePeople’sCourtmadeafinaljudgmentonthedisputearisingoutofthedepositcontractbetweentheCompanyandABCChangshaYingxinSub-branch.Inrespectofthelossesthatcouldn’tberecoveredthroughcriminalprocedures,ABCChangshaYingxinSub-branchshouldbear40%ofthecompensationliability,ABCChangshaHongxingSub-branch20%,andtheremaininglossesshouldbebornebytheCompany.HenanProvinceHigherPeople’sCourthadmadethejudgmentofthefirsttrialonthelawsuitoftheCompanywithICBCNanyangZhongzhouSub-branchoveradepositdispute:forthelossesthattheCompanycannotrecoverthroughcriminalexecutionprocedures,50%shallbebornebyICBCNanyangZhongzhouSub-branch;forthelossesthattheCompanycannotrecoverthroughcriminalexecutionproceduresconcerningCNY122.1millionofprincipalinthecase,10%shallbebornebySanyaRuralCommercialSub-branchHongshaBSub-branch,andtherestshallbebornebytheCompanyitself.Asof30June2020,theCompanyhasrecoveredtheabovementionedsavingdepositsinvolvingcontractdisputeswithCNY214.8597million.Exceptfortheabovematters,theCompanyhasnoothersignificantcontingenciesthatneedtobedisclosedastheendof30June2020.12.1.2.Indespiteofnosignificantcontingencytodisclose,theCompanyshallalsomakerelevantstatementsThereisnosignificantcontingencytodisclose.13.Postbalancesheetevent13.1.ProfitdistributionMonetaryUnit:CNYProfitsordividendsplannedtodistribute2,328,956,436.842020InterimReportofLuzhouLaojiaoCo.,Ltd.174Reviewedandapprovedprofitsordividendsdeclaredtodistribute2,328,956,436.841Note:1.Accordingtoresolutionsofthegeneralmeeting,thecashdividendwasdistributedtoallshareholderswithCNY15.9per10shares(taxinclusive),andhasbeenimplementedon24August2020.13.2.StatementforotherpostbalancesheeteventsNone14.Otherimportantinformation14.1.Othersignificanteventsthatcanaffectinvestors’decision14.1.1.SavingdepositsinvolvingcontractdisputesAsstatedinNote12.2,threesavingdepositsinvolvedcontractdisputesinAgriculturalBankofChinaChangshaYingxinSub-branch,IndustrialandCommercialBankofChinaNanyangZhongzhouSub-branchandanotherbank,withatotalamountofCNY500million.Atpresent,theinvestigationofrelatedcasesandthepreservationofassetshavebeenunderway.TheCompanyhasinitiatedacivilproceduretorecoverthelossfromtheresponsibleunit.14.1.2.ProgressoftechnicalrenovationprojectofbrewinginvestmentBasedontheCompany‘sdevelopmentstrategy,the"13thFive-YearPlan"anddeepanalysisoftheliquorindustryandtheactualsituationoftheCompanyitself,theCompanyinvestedintheimplementationoftechnicalrenovationprojectofbrewingwithBrewingCompany,thewholly-ownedsubsidiary,asthemainbody.ThetotalinvestmentoftheprojectisCNY8,877.2765million,andtherequiredfundsaresolvedbytheCompanywithself-ownedfundsandotherfinancingmethods.Atpresent,theprojecthasinvestedatotalofCNY7,031.4817million,andthecompletionratiohasbeen95%.15.NotestothemainItemsofthefinancialstatementsofparentcompany(allcurrencyunitisCNY,exceptotherstatements)15.1.Accountsreceivable15.1.1.AnalysisbycategoriesMonetaryUnit:CNYTypeClosingBalanceOpeningBalanceBookbalanceProvisionforbaddebtBookvalueBookbalanceProvisionforbaddebtBookvalueAmountProportionAmountProportionAmountProportionAmountProportionIncluding:Accountsreceivablestestedforimpairmentby924,789.31100.00%9,456.601.02%915,332.7121,759.06100.00%196.210.90%21,562.852020InterimReportofLuzhouLaojiaoCo.,Ltd.175theportfolioIncluding:Accountsreceivablestestedforimpairmentontheportfoliowithcharacteristicsofcreditrisk924,789.31100.00%9,456.601.02%915,332.7121,759.06100.00%196.210.90%21,562.85Total924,789.31100.00%9,456.601.02%915,332.7121,759.06100.00%196.210.90%21,562.85Accountsreceivablestestedforimpairmentbytheportfolio:MonetaryUnit:CNYItemClosingBalanceBookbalanceProvisionforbaddebtProportionRiskportfolio924,789.319,456.601.02%OtherportfoliosPleaserefertotherelevantinformationofdisclosureofprovisionforbaddebtofotheraccountsreceivableifadoptingthegeneralmodeofexpectedcreditlosstowithdrawprovisionforbaddebtofaccountsreceivable.√ApplicableN/AMonetaryUnit:CNYProvisionforbaddebtFirststageSecondstageThirdstageTotalExpectedcreditlossofthenext12monthsExpectedlossintheduration(creditimpairmentnotoccurred)Expectedlossintheduration(creditimpairmentoccurred)Balanceof1January2020196.21196.21Balanceof1January2020inthecurrentperiod--TransfertoSecondstage--TransfertoThirdstage--ReversetoSecondstage--ReversetoFirststageAllowanceofthecurrentperiod9,260.399,260.39ReversalofthecurrentperiodVerificationofthecurrentperiodOtherchangesBalanceof30June20209,456.609,456.602020InterimReportofLuzhouLaojiaoCo.,Ltd.176DisclosurebyagingMonetaryUnit:CNYAgingBookbalanceWithin1year(including1year)924,789.31Total924,789.3115.1.2.ProvisionandrecoveryforbadanddoubtfuldebtinthecurrentperiodAllowanceofprovisionforbaddebt:MonetaryUnit:CNYTypeOpeningBalanceCurrentPeriodClosingBalanceAllowanceReversalorrecoveryWrite-offOtherAccountsreceivablestestedforimpairmentbytheportfolio196.219,260.399,456.60Total196.219,260.399,456.6015.1.3.TopfiveentitieswiththelargestbalancesofaccountsreceivableMonetaryUnit:CNYCompanyNameClosingBalanceProportiontototalclosingbalanceofaccountsreceivableClosingBalanceofprovisionforbaddebtLuzhouLiquorGoldenTriangleLiquorDevelopmentCo.,Ltd.168,826.6418.26%8,441.33ChinaTowerLuzhouBranch20,305.322.20%1,015.27Total189,131.9620.46%15.2.OtherreceivablesMonetaryUnit:CNYItemClosingBalanceOpeningBalanceInterestreceivable111,388,492.4040,570,144.44Dividendreceivable30,114,991.30Otherreceivables7,385,032,312.365,809,911,336.062020InterimReportofLuzhouLaojiaoCo.,Ltd.177Total7,526,535,796.065,850,481,480.501Note:1.Otherreceivableslistedabovewereotheraccountsreceivablethathasdeductedinterestreceivable,dividendreceivable.15.2.1.Interestreceivable15.2.1.1.ClassificationofinterestreceivableMonetaryUnit:CNYItemClosingBalanceOpeningBalanceFixeddeposits111,388,492.4040,570,144.44Total111,388,492.4040,570,144.441Note:1.TheclosingbalanceincreasedCNY70,818,347.96comparedwiththeopeningbalance,withanincreaseby174.56%,mainlyduetotheimpactofincreaseofinterestreceivableoffixeddeposits.15.2.2.Dividendreceivable15.2.2.1.ClassificationofdividendreceivableMonetaryUnit:CNYItemClosingBalanceOpeningBalanceSichuanNitrocellCo.,Ltd.85,995.53GuotaiJunanSecuritiesCo.,Ltd.4,593,028.83HuaxiSecuritiesCo.,Ltd.20,735,166.94LuzhouBankCo.,Ltd.4,700,800.00Total30,114,991.3015.2.3.Otherreceivables15.2.3.1.OtherreceivablesdisclosedbynatureMonetaryUnit:CNYNatureClosingbookbalanceOpeningbookbalanceIntercoursefundsofsubsidiariesreceivable7,288,425,036.265,709,914,323.15Intercoursefunds12,574,759.0814,258,750.49Pettycash1,044,021.15454,894.47Savingdepositsinvolvingcontractdisputes285,140,297.52287,400,297.522020InterimReportofLuzhouLaojiaoCo.,Ltd.178Total7,587,184,114.016,012,028,265.6315.2.3.2.ProvisionforbadanddoubtfulotherreceivablesinthecurrentperiodMonetaryUnit:CNYProvisionforbaddebtFirststageSecondstageThirdstageTotalExpectedcreditlossofthenext12monthsExpectedlossintheduration(creditimpairmentnotoccurred)Expectedlossintheduration(creditimpairmentoccurred)Balanceof1January20202,116,929.57200,000,000.00202,116,929.57Balanceof1January2020inthecurrentperiod————————Allowanceofthecurrentperiod34,872.0834,872.08Balanceof30June20202,151,801.65200,000,000.00202,151,801.65ChangesofcarryingamountwithsignificantamountchangedoflossprovisioninthecurrentperiodApplicable√N/ADisclosurebyagingMonetaryUnit:CNYAgingClosingBalanceWithin1year(including1year)7,291,087,065.851-2years9,285,426.462-3years701,697.25Over3years286,109,924.453-4years65,000.004-5years28,626.93Over5years286,016,297.52Total7,587,184,114.0115.2.3.3.ProvisionandrecoveryforbadanddoubtfulotherreceivablesinthecurrentperiodAllowanceofprovisionforbaddebt:MonetaryUnit:CNYTypeOpeningBalanceCurrentPeriodClosingBalance计提收回或转回核销其他2020InterimReportofLuzhouLaojiaoCo.,Ltd.179OtherreceivablestestedforimpairmentindividuallyNote1200,000,000.00200,000,000.00Otherreceivablestestedforimpairmentbytheportfolio2,116,929.5734,872.082,151,801.65Total202,116,929.5734,872.08202,151,801.65Note1:RefertoNote5.5,12.2fordetails.15.2.3.4.TopfiveentitieswiththelargestbalancesoftheotherreceivablesMonetaryUnit:CNYCompanyNameNatureClosingBalanceAgingProportionintotalreceivablesProvisioningamountatperiodendLuzhouLaojiaoBrewingCo.,Ltd.Internaltransactions6,702,446,250.05Within1year88.34%AgriculturalBankofChinaChangshaYingxinSub-branch,IndustrialandCommercialBankofChinaNanyangZhongzhouSub-branchandanotherbank.Savingdepositsinvolvingcontractdisputes285,140,297.52Over5years3.76%200,000,000.00LuzhouLaojiaoElectronicCommerceCo.,Ltd.Internaltransactions252,780,059.64Within1year3.33%LuzhouLaojiaoImportandExportTradeCo.,Ltd.Internaltransactions188,416,563.68Within1year2.48%LuzhouLaojiaoNostalgiaLiquorCo.,Ltd.Internaltransactions57,716,699.70Within1year0.76%Total--7,486,499,870.59--98.67%200,000,000.002020InterimReportofLuzhouLaojiaoCo.,Ltd.18015.3.Long-termequityinvestmentsMonetaryUnit:CNYItemClosingBalanceOpeningBalanceBookbalanceProvisionforimpairmentBookvalueBookbalanceProvisionforimpairmentBookvalueInvestmentinsubsidiary3,413,960,128.113,413,960,128.113,413,960,128.113,413,960,128.11Investmentinassociatesandjointventure2,305,755,525.302,567,098.802,303,188,426.502,225,288,824.522,567,098.802,222,721,725.72Total5,719,715,653.412,567,098.805,717,148,554.615,639,248,952.632,567,098.805,636,681,853.8315.3.1.InvestmentinsubsidiaryMonetaryUnit:CNYInvesteeOpeningBalance(bookvalue)ChangesincurrentperiodClosingBalance(bookvalue)ClosingbalanceofprovisionforimpairmentIncreaseDecreaseProvisionforimpairmentOtherLuzhouPinchuangTechnologyCo.,Ltd.57,649,100.0057,649,100.00SalesCompanyofLuzhouLaojiaoCo.,Ltd.103,162,447.09103,162,447.09LuzhouLaojiaoBrewingCo.,Ltd.3,172,109,991.253,172,109,991.25LuzhouLaojiaoInternationalDevelopment(HongKong)Co.,Ltd.5,433,789.775,433,789.77LuzhouLaojiao51,604,800.0051,604,800.002020InterimReportofLuzhouLaojiaoCo.,Ltd.181ElectronicCommerceCo.,Ltd.LuzhouBaonuoBiotechnologyCo.,Ltd.20,000,000.0020,000,000.00LuzhouLaojiaoTourismCultureCo.,Ltd.4,000,000.004,000,000.00LuzhouLaojiaoHealthLiquorIndustryCo.,Ltd.Note0.000.001Total3,413,960,128.113,413,960,128.11Note:1.TheCompanyobtained100%ofequityinHealthLiquorIndustrybythebusinesscombinationunderthesamecontrol.ThenetassetsofHealthLiquorIndustrywerenegativeontheM&Adate,andthebookcostoflong-termequityinvestmentwaslimitedto0bytheCompany.15.3.2.InvestmentinassociateandjointventureMonetaryUnit:CNYInvesteeOpeningBalance(bookvalue)ChangesincurrentperiodClosingBalance(bookvalue)ClosingBalanceofprovisionforimpairmentIncreaseDecreaseGainorlossrecognizedunderequitymethodAdjustmentsofothercomprehensiveincomeChangesinotherequityCashdividedorprofitdeclaredProvisionforimpairmentOther1.JointVentureNone2.AssociateHuaxiSecuritiesCo.,Ltd.2,209,738,981.5595,995,572.836,242,935.6820,735,166.942,291,242,323.122,567,098.80SichuanDevelopment12,982,744.17-1,036,640.7911,946,103.382020InterimReportofLuzhouLaojiaoCo.,Ltd.182WineInvestmentCo.,Ltd.Subtotal2,222,721,725.7294,958,932.046,242,935.6820,735,166.942,303,188,426.502,567,098.80Total2,222,721,725.7294,958,932.046,242,935.6820,735,166.942,303,188,426.502,567,098.8015.4.OperatingrevenueandcostofsalesMonetaryUnit:CNYItemCurrentPeriodPreviousPeriodRevenueCostofsalesRevenueCostofsalesPrimarybusiness1,486,572,539.811,040,786,248.302,431,931,413.351,621,162,415.45Otherbusiness16,349,153.5815,287,886.77Total1,502,921,693.391,040,786,248.302,447,219,300.121,621,162,415.4515.5.InvestmentincomeMonetaryUnit:CNYItemCurrentPeriodPreviousPeriodInvestmentincomefromlong-termequityinvestmentsunderequitymethod94,958,932.0488,275,961.45Dividendincomefromotherequityinstrumentinvestmentduringholingperiod9,379,824.368,748,669.71Total104,338,756.4097,024,631.1616.Supplementaryinformation16.1.Detailedstatementofextraordinarygainandlossinthecurrentperiod(+forgain,-forloss)√ApplicableN/AMonetaryUnit:CNYItemAmountRemarkGainsorlossesondisposalnon-currentassets104,663.83FordetailspleaseseeNote5.40.Governmentgrantsincludedintocurrentprofitsandlosses(otherthan10,441,675.27FordetailspleaseseeNote5.36.2020InterimReportofLuzhouLaojiaoCo.,Ltd.183governmentgrantscloselyrelatedtoenterprisebusinessandgrantedbyquotaorquantityaccordingtonationalunifiedstandard)Othernon-operatingincomeandcostsotherthanaboveitems-28,272,944.37FordetailspleaseseeNote5.41,5.42.Less:Impactfromincometax-4,475,851.24Impactfromnon-controllingshareholders’equity248,904.75Total-13,499,658.78--StatementforextraordinarygainandlossitemsthattheCompanydefinesaccordingtothedefinitionin“ExplanatoryAnnouncementofInformationDisclosureofCompanythatIssuesSecuritiespubliclyNO.1-ExtraordinaryGainandLoss”anddefinitionofrecurrentgainandlossitemsthatarelistedasextraordinarygainandlossinthe“ExplanatoryAnnouncementofInformationDisclosureofCompanythatIssuesSecuritiespubliclyNO.1-ExtraordinaryGainandLoss”:Applicable√N/A16.2.ReturnonequityandearningspershareProfitduringreportingperiodWeightedaverageROEEPS(CNY/Share)BasicEPSDilutedEPSNetprofitsattributabletoordinaryshareholdersoftheCompany15.32%2.202.20NetprofitsattributabletoordinaryshareholdersoftheCompanyafterdeductionofextraordinarygainandloss15.38%2.202.202020InterimReportofLuzhouLaojiaoCo.,Ltd.184SectionXIIDocumentsAvailableforReference1.Financialstatementssignedandstampedbythelegalrepresentative,personinchargeofaccountingaffairsandpersoninchargeofaccountingdepartment;2.TheoriginalsofallcompanydocumentsandannouncementsthataredisclosedonthepublicwebsitedesignatedbyCSRCduringthereportingperiod. SectionIImportantStatements,ContentsandDefinitions SectionIICompanyProfileandKeyFinancialResults 1.Corporateinformation 2.Contactus 3.OtherInformation 3.1.ContactInformationoftheCompany 3.2.Informationdisclosureandplacewheretheinterimreportiskept 4.Keyaccountingdataandfinancialindicators SectionIIIBusinessProfile 2.1.Significantchangesinthemainassets SectionIVPerformanceDiscussionandAnalysis 3.Analysisofnon-corebusiness 4.Assetsandliabilities 4.1Significantchangeofassetitems 4.2Assetsandliabilitiesmeasuredatfairvalue 4.3Restrictedassetrightsasoftheendofthisreportingperiod 5.Investment 5.1.Totalinvestment 5.2.Significantequityinvestmentmadeinthereportingperiod 5.3.Significantongoingnon-equityinvestmentinthereportingperiod 5.4.Financialassetsatfairvalue 5.5.Financialassetsinvestment 5.5.1.Securitiesinvestment 5.5.2.Derivativeinvestment 6.Saleofmajorassetsandequityinterests 6.1.Saleofmajorassets 6.2.Saleofmajorequityinterests 7.Analysisofmajorsubsidiaries 8.StructuredentitiescontrolledbytheCompany 9.OperatingperformanceforecastforJanuary-September2020 10.RisksfacingtheCompanyandcountermeasures SectionVSignificantEvents 1.Annualandextraordinarygeneralmeetingconvenedduringthereportingperiod 1.1Generalmeetingconvenedduringthereportingperiod 1.2Extraordinarygeneralmeetingsconvenedattherequestofpreferenceshareholderswithresumedvotingrights 2.Profitdistributionandconvertingcapitalreservesintosharecapitalforthereportingperiod 3.UndertakingsoftheCompany'sactualcontroller,shareholders,relatedpartiesandacquirer,aswellastheCompanyandothercommitmentmakersfulfilledinthereportingperiodorongoingbytheendofthisreportingperiod 4.EngagementanddisengagementofCPAsfirm 5.Explanationoftheboardofdirectorsandthesupervisorycommitteeregardingthe"Non-standardauditopinion"forthereportingperiod 6.Explanationsoftheboardofdirectorsregardingthe"Non-standardauditopinion"ofLastYear 7.Bankruptcyandreorganization 8.Litigation 9.DoubtsfromMedia 10.Punishmentsandrectifications 11.CreditconditionsoftheCompanyaswellasitscontrollingshareholderandactualcontroller 12.Implementationofanyequityincentiveplan,employeestockownershipplanorotherincentivemeasuresforemployees 13.Significantrelatedpartytransactions 13.1.Relatedpartytransactionsarisingfromroutineoperation 13.2.Relatedpartytransactionsregardingpurchaseorsalesofassetsorequityinterests 13.3.Relatedpartytransitionsarisingfromjointinvestmentsinexternalparties 13.4.Creditsandliabilitieswithrelatedparties 13.5.Othersignificantrelatedpartytransactions 14.OccupationoftheCompany'sfundbythecontrollingshareholderoritsrelatedpartiesfornon-operatingpurposes 15.Significantcontractsandtheirexecution 15.1.Trusteeship,contractingandleasing 15.1.1.Trusteeship 15.1.2.Contracting 15.1.3.Leasing 15.2.Majorguarantees 15.3.Entrustassetsmanagement 15.4Othersignificantcontracts 16.SocialResponsibilities 16.1Informationaboutenvironmentprotection 16.2Informationabouttargetedpovertyalleviation 16.2.1Targetedpovertyalleviationplan 16.2.2Outlineofannualtargetedpovertyalleviation 16.2.3Follow-uppovertyalleviationplan 17.Othersignificantevents 18.Significanteventsofsubsidiaries SectionVIChangesinSharesandInformationaboutShareholders 1.Changesinshares 1.1Changesinshares 1.2Changesinrestrictedshares 2.Issuanceandlistingofsecurities 3.Totalnumberofshareholdersandtheirshareholdings 4.Changeofcontrollingshareholderoractualcontroller SectionVIIPreferenceShares SectionVIIIInformationaboutConvertibleCorporateBond SectionIXProfilesofDirectors,SupervisorsandSeniorManagement 1.Changesinsharesheldbydirectors,supervisors,andseniormanagement 2.Changesindirectors,supervisors,andseniormanagement SectionXInformationaboutCorporateBond 1.Basicinformationaboutthecorporatebond 2.Listofthebondtrusteeandtheratingorganization 3.Informationaboutusageoffund-raisingofthecorporatebond 4.Ratingsituationofcorporatebondinformation 5.Credit-addingmechanism,repaymentplanandotherrepaymentguaranteemeasuresofthecorporatebond 6.Informationaboutconveningofthebondholdersmeetingduringthereportingperiod 7.Informationaboutdutyexecutionofbondtrusteeduringthereportingperiod 8.ThemajoraccountingdataandthefinancialindicatorsoftheCompanyasoftheendofthereportingperiodandoftheendoflastyear(orthereportingperiodandthesameperiodoflastyear) 9.Overduepayment 10.Informationaboutinterestpaymentofotherbondsanddebtfinancinginstrumentsduringthereportingperiod 11.Informationaboutacquiredbankcreditlines,usageandrepaymentofthebankloansduringthereportingperiod 12.Informationabouttheexecutionoftheagreementsorthecommitmentsrelatedtothecorporatebondfund-raisingspecificationduringthereportingperiod 13.Significanteventsoccurringduringthereportingperiod 14.Whethertherewasguarantorofthecorporatebond SectionXIFinancialReport 1.Auditor’sreport 2.Financialstatements Consolidatedincomestatement Incomestatementofparentcompany Consolidatedstatementofcashflows Cashflowstatementsofparentcompany Statementofchangesinowners'equityofparentcompany 3.CompanyProfile (1)The28subsidiariesincludedintheconsolidatedfinancialstatementsforthecurrentperiodarelistedasfollows: 4.Basisofpreparationoffinancialstatements 4.1.Basisofpreparationoffinancialstatements 4.2.Goingconcern 5.Significantaccountingpoliciesandaccountingestimates 5.1ThedeclarationaboutcompliancewithASBE 5.2Accountingperiod 5.3BusinessCycle 5.4Functionalcurrency 5.5Theaccountingtreatmentofbusinesscombinationsinvolvingenterprisesundercommoncontrolandbusinesscombinationsnotinvolvingenterprisesundercommoncontrol 5.6Preparationofconsolidatedfinancialstatements 5.7Classificationofjointventurearrangementsandtheaccountingtreatmentmethodofcommonoperation 5.8Cashandcashequivalents 5.9Foreigncurrencytransactionsandtranslationofforeigncurrencystatements 5.10FinancialInstruments 5.11Notesreceivable 5.12Accountsreceivables 5.13Accountsreceivablesfinancing 5.14Otherreceivables 5.15Inventory Itisamortizedinfullatonce. 5.18Assetsheldforsale 5.19Long-termequityinvestment WhentheshareofnetlossoftheinvesteeattributabletotheCompanyisrecognized,itistreatedinthefollowingsequence:Firstly,writeoffthebookvalueofthelong-termequityinvestments;wherethebookvalueofthelong-termequityinvestme... 5.20Fixedassets (1)Recognitionoffixedassets (2)Depreciationoffixedassets (3)Recognitionstandard,valuationmethodanddepreciationmethodforfixedassetsacquiredunderfinancinglease 5.21Constructioninprogress 5.22Borrowingcosts 5.23Intangibleassets (1)Measurementmethod,usefullife,impairmenttest 5.24Long-termassetsimpairment 5.25Long-termdeferredexpenses 5.26Contractliabilities 5.27Employeebenefits (1)Accountingtreatmentmethodofshort-termbenefits (2)Accountingtreatmentmethodofpost-employmentbenefits (3)Accountingtreatmentmethodofterminationbenefits (4)Accountingtreatmentmethodofotherlong-termemployeebenefits 5.28Estimatedliabilities 5.29Share-basedpayment Nomatterhowitmodifiesthetermsandconditionsofthegrantedequityinstrumentsoritcancelsthegrantedequityinstrumentsoritssettlement,theequityinstrumentsgrantedbytheCompanyshallberecognizedatfairvalueonthegrantdateand... Accountingpoliciesforrecognitionandmeasurementofrevenue 5.31Governmentgrants 5.32Deferredtaxassetsordeferredtaxliabilities 5.33Lease (1)Accountingtreatmentofoperatinglease (2)Accountingtreatmentoffinancelease 5.34Incometaxexpense Onthebalancesheetdate,theCompanyreviewsthecarryingvaluesofdeferredtaxassetsanddeferredtaxliabilities.TheCompany’scurrentincometaxanddeferredtaxwillbetreatedasincometaxexpensesorincome,exceptforincometaxfrombusi... 5.35.1.Changesinsignificantaccountingpolicies 5.35.2.Changesinsignificantaccountingestimates 5.35.3.Adjustmentstothefinancialstatementsatthebeginningoftheexecutionyearofanynewstandardgoverningrevenueorleasesfrom2020 5.35.4.Retrospectiverestatementofpreviouscomparativedataduetotheexecutionofanynewstandardgoverningrevenueorleasefrom2020 6.Taxes 6.1.Majortaxtypesandrates 6.2.Taxpreferences 7.Notestothemainitemsoftheconsolidatedfinancialstatements(AllcurrencyunitisCNY,exceptotherstatements) 7.1.Cashandcashequivalents 7.2.Accountsreceivable 7.2.1.Classificationofaccountsreceivable 7.2.2.Provisionandrecoveryforbadanddoubtfuldebtinthecurrentperiod 7.2.3.Topfiveentitieswiththelargestbalancesofaccountsreceivable 7.3.Accountsreceivablefinancing 7.4.Prepayment 7.4.1.Aginganalysis 7.4.2.Topfiveentitieswiththelargestbalancesofprepayment 7.5Otherreceivables 7.5.1.Interestreceivable 7.5.1.1.Classificationofinterestreceivable 7.5.1.2.Allowanceofprovisionforbaddebt 7.5.2.Dividendreceivable 7.5.2.1.Classificationofdividendreceivable 7.5.2.2.Allowanceofprovisionforbaddebt 7.5.3.Otherreceivables 7.5.3.1.Otherreceivablesdisclosedbynature 7.5.3.2.Allowanceofprovisionforbaddebt 7.5.3.3.Provisionandrecoveryforbadanddoubtfulotherreceivablesinthecurrentperiod 7.5.3.4.Topfiveentitieswiththelargestbalancesoftheotherreceivables 7.6Inventories 7.6.1.CategoriesofInventories 7.6.2.Provisionforstockobsolescenceandimpairmentprovisionofcontractperformancecosts 7.7.Othercurrentassets 7.8.Long-termequityinvestments 7.9.Otherequityinstrumentinvestment 7.10.Fixedassets 7.10.1.Detailsoffixedassets 7.10.2.Fixedassetswithoutcertificationofright 7.10.3.Disposaloffixedassets 7.11.Constructioninprogress 7.11.1.Detailsoftheconstructioninprogress 7.11.2.Significantchangesinconstructioninprogress 7.12.Intangibleassets 7.12.1.Detailsofintangibleassets 7.13.Long-termdeferredexpense 7.14.Deferredtaxassets/deferredtaxliabilities 7.14.1.Deferredtaxassetsbeforeoffset 7.14.2.Deferredtaxliabilitiesbeforeoffset 7.14.3.Detailsofunrecognizeddeferredtaxassets 7.14.4.Deductiblelossesfromunrecognizeddeferredtaxassetswilldueonthefollowingyears 7.15.Othernon-currentassets 7.16.Notespayable 7.17.Accountspayable 7.17.1.Presentationofaccountspayable 7.18.Contractliabilities 7.19.Employeebenefitspayable 7.19.1.Employeebenefitspayableshownasfollows 7.19.2.Short-termemployeebenefitspayableshownasfollows 7.19.3.Definedcontributionplanshownasfollows 7.20.Taxespayable 7.21.Otherpayables 7.21.1.Interestpayable 7.21.2.Dividendspayable 7.21.3.Otherpayables 7.21.3.1.Categoriesbynature 7.22.Othercurrentliabilities 7.23.Bondspayable 7.23.1.Bondspayable 7.23.2.Increase/decreaseofbondspayable(excludingotherfinancialinstrumentclassifiedasfinancialliabilitiessuchaspreferredsharesandperpetualbonds) 7.24.Deferredincome 7.25.Sharecapital 7.26.Capitalreserves 7.27.Othercomprehensiveincome 7.28.Surplusreserves 7.29.Undistributedprofits 7.30.Operatingrevenueandcostofsales 7.31.Businesstaxesandsurcharges 7.32.Sellinganddistributionexpenses 7.33.Generalandadministrativeexpenses 7.34.Researchanddevelopmentexpenses 7.35.Financialexpenses 7.36.Otherincome 7.37.Investmentincome 7.38.Creditimpairmentloss 7.39.Gainsfromdisposalofassets 7.40.Non-operatingincome 7.41.Non-operatingcosts 7.42.Incometaxexpense 7.42.1.Statementofincometaxexpense 7.42.2.Adjustmentforaccountingprofitandincometaxexpense 7.43.Othercomprehensiveincome 7.44.Notestothestatementofcashflow 7.44.1.Cashreceivedfromotheroperationactivities 7.44.2.Cashpaidforotheroperatingactivities 7.44.3.Cashpaidforotherinvestingactivities 7.45.Supplementaryinformationtostatementofcashflow 7.45.1.Supplementaryinformationtostatementofcashflow 7.45.2.Compositionofcashandcashequivalent 7.46.Assetswithrestrictedownershiporuserights 7.47.Foreigncurrencytransactions 7.47.1.Foreigncurrencytransactions 7.47.2.Descriptionoftheforeignbusinessentity,includingtheimportantforeignbusinessentity,shalldiscloseitsmainforeignbusinessplace,bookkeepingstandardcurrencyandselectionbasis,andshallalsodisclosethereasonforthechangeo... 7.48.Governmentgrants 7.48.1.Detailsofgovernmentgrants 7.48.2.Returnofgovernmentgrants 8.Interestsinotherentities 8.1.Interestsinsubsidiaries 8.1.1.Groupcomposition 8.1.2.Importantnon-wholly-ownedsubsidiaries 8.1.3.Majorfinancialinformationofimportantnon-wholly-ownedsubsidiaries 8.2.Interestsinjointventuresandassociates 8.2.1.Importantjointventuresandassociates 8.2.2.Majorfinancialinformationofimportantassociates 8.2.3.Financialinformationsummarizedofunimportantjointventuresandassociatecompanies 9.Risksrelatedtofinancialinstruments 10.Fairvaluedisclosure 10.1.Closingfairvalueofassetsandliabilitiesmeasuredatfairvalue 10.2.DeterminationbasisofthemarketvalueofitemsmeasuredcontinuouslyanddiscontinuouslywithinLevel1ofthefairvaluehierarchy 10.3.ValuationtechniqueadoptedandnatureandamountdeterminationofimportantparametersforcontinuouslyanddiscontinuouslywithinLevel3ofthefairvaluehierarchy 11.Relatedpartiesandrelatedpartytransactions 11.1.TheparentcompanyoftheCompany 11.2.SubsidiariesoftheCompany 11.3.JointventuresandassociatesoftheCompany 11.4.OtherrelatedpartyoftheCompany 11.5.Relatedtransactions 11.5.1.Relatedtransactionsofpurchaseandsalesofgoods/renderingandreceiptofservices 11.5.2.Relatedpartyleasing 11.5.3.Keymanagementcompensation 11.6.Receivablesandpayablesofrelatedparties 11.6.1.Receivables 11.6.2.Payables 12.Commitmentsandcontingencies 12.1.1.Significantcontingenciesatthebalancesheetdate 12.1.2.Indespiteofnosignificantcontingencytodisclose,theCompanyshallalsomakerelevantstatements 13.1.Profitdistribution 13.2.Statementforotherpostbalancesheetevents 14.Otherimportantinformation 14.1.Othersignificanteventsthatcanaffectinvestors’decision 15.NotestothemainItemsofthefinancialstatementsofparentcompany(allcurrencyunitisCNY,exceptotherstatements) 15.1.Accountsreceivable 15.1.1.Analysisbycategories 15.1.2.Provisionandrecoveryforbadanddoubtfuldebtinthecurrentperiod 15.1.3.Topfiveentitieswiththelargestbalancesofaccountsreceivable 15.2.Otherreceivables 15.2.1.Interestreceivable 15.2.1.1.Classificationofinterestreceivable 15.2.2.Dividendreceivable 15.2.2.1.Classificationofdividendreceivable 15.2.3.Otherreceivables 15.2.3.1.Otherreceivablesdisclosedbynature 15.2.3.2.Provisionforbadanddoubtfulotherreceivablesinthecurrentperiod 15.2.3.3.Provisionandrecoveryforbadanddoubtfulotherreceivablesinthecurrentperiod 15.2.3.4.Topfiveentitieswiththelargestbalancesoftheotherreceivables 15.3.Long-termequityinvestments 15.3.1.Investmentinsubsidiary 15.3.2.Investmentinassociateandjointventure 15.4.Operatingrevenueandcostofsales 15.5.Investmentincome 16.Supplementaryinformation 16.1.Detailedstatementofextraordinarygainandlossinthecurrentperiod(+forgain,-forloss) 16.2.Returnonequityandearningspershare SectionXIIDocumentsAvailableforReference

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