2018 Annual Report of Luzhou Laojiao Co.,Ltd. Luzhou Laojiao Co., Ltd. 2018 Annual Report April 2019 1 2018 Annual Report of Luzhou Laojiao Co.,Ltd. Section I Important Statements, Contents and Definitions The Board of Directors, Board of Supervisors, directors, supervisors and senior management guarantee that the information presented in this report is free of any false records, misleading statements or material omissions, and shall Individually and together be legally liable for truthfulness, accuracy and completeness of its contents. Mr. Liu Miao, responsible person for the Company, Ms. Xie Hong, responsible person for accounting work and Mr. Yan Li, responsible person for the Company’s financial affairs (Accounting Supervisor) have warranted that the financial statements in this report are true and complete. Other directors attended the board meeting to deliberate this report by themselves except the following directors. Name of directors who did not Position of directors who did not Reason for not attending Name of attend the meeting in person attend the meeting in person the meeting in person deputies Liu Miao Chairman of the Board work Lin Feng Shen Caihong Director work Jiang Yuhui Affected by risks, uncertainties and assumptions, the forward-looking statements concerning business objectives and future plans made in this report based on the subjective assumptions and judgments of the future policies and economic conditions may be significantly different from the actual results. Such statements shall not be considered as virtual promises of the Company to investors, and the investors and relevant persons shall maintain adequate risk awareness and shall understand the differences between plans, forecasts and commitments. In the annual report, the potential risks in the operation of the Company have been disclosed. Investors are kindly reminded to pay attention to possible investment risks. The profit distribution plan approved by the board of directors: based on 1,464,752,476 shares, a cash dividend of CNY 15.50 (tax inclusive) will be distributed for every 10 existing shares held, 0 shares of bonus shares (tax inclusive), and reserves would not be converted into share capital. 2 2018 Annual Report of Luzhou Laojiao Co.,Ltd. Contents Section I Important Statements, Contents and Definitions 2 Section II Company Profile and Key Financial Results ...... 5 Section III Business Profile ................................................. 10 Section IV Performance Discussion and Analysis ............ 12 Section V Significant Events ............................................... 33 Section VI Changes in Shares and Information about Shareholders ......................................................................... 50 Section VII Preference Shares ............................................ 60 Section VIII Profiles of Directors, Supervisory, Senior Management and Employees .............................................. 61 Section IX Corporate Governance ...................................... 73 Section X Information about Corporate Bond ................... 79 Section XI Financial Report ................................................. 80 Section XII Documents Available for Preference ............ 211 3 2018 Annual Report of Luzhou Laojiao Co.,Ltd. Definitions Term Reference Definition Company, the Company, Luzhou Laojiao Refer to Luzhou Laojiao Co.,Ltd. Laojiao Group Refer to Luzhou Laojiao Group Co., Ltd. Xinglu Group Refer to Luzhou Xinglu Touzi Jituan Co., Ltd. State-owned Assets Supervision and SASAC of Luzhou Refer to Administration Commission of Luzhou Huaxi Securities Refer to Huaxi Securities Co.,Ltd. China International Capital CICC Refer to Corporation Limited Luzhou Bank Refer to Luzhou City Commercial Bank Sales Company of Luzhou Laojiao Sales Company Refer to Co., Ltd. Brewing Company Refer to Luzhou Laojiao Brewing Co., Ltd. 4 2018 Annual Report of Luzhou Laojiao Co.,Ltd. Section II Company Profile and Key Financial Results 1. Corporate information Stock abbreviation Luzhou Laojiao Stock code 000568 Stock exchange where Shenzhen Stock Exchange the shares of the Company are listed Name of the Company 泸州老窖股份有限公司 in Chinese Abbr. of the Company 泸州老窖 name in Chinese Name of the Company Luzhou Laojiao Co.,Ltd. in English (if any) Abbr. of the Company LZLJ name in English (if any) Legal representative Liu Miao Registered address Guojiao Square,Luzhou City, Sichuan Province, China Postal code 646000 Luzhou Laojiao Marketing Network Command Center, Business address Nanguang Road, Luzhou City, Sichuan Province, China Postal code 646000 Company website http://www.lzlj.com E-mail [email protected] 2. Contact us Secretary of the board Representative for securities affairs Name Wang Hongbo Wang Chuan Luzhou Laojiao Marketing Network Command Center, Nanguang Road, Address Luzhou City, Sichuan Province, China Tel. (0830)2398826 (0830)2398826 Fax (0830)2398864 (0830)2398864 E-mail [email protected] [email protected] 3. Information disclosure and place where the annual report is kept Newspaper designated by the China Securities Journal, Securities Times, Securi Company for information ties Daily disclosure 5 2018 Annual Report of Luzhou Laojiao Co.,Ltd. Website designated by the China Securities Regulatory Commission http://www. cninfo.com.cn (CSRC) for the publication of the Annual Report Place where the annual report of Board office the Company is kept 4. Company registration and alteration Organization code 91510500204706718H Changes in main business activities since the Company None was listed (if any) Before September 2009, the controlling shareholder was Changes of controlling the SASAC of Luzhou. After the equity transfer in shareholders of the Company September 2009, the controlling shareholder was (if any) changed to Laojiao Group, but the actual controller is still the SASAC of Luzhou. 5. Other relevant information Accounting firm engaged by the Company Name of the accounting firm Sichuan Huaxin (Group) CPA Firm Business address of the 28/F., South Jinmaolidu, NO.18 Ximianqiao Street, Chengdu accounting firm City, Sichuan Province. Name of accountants for Feng Yuan, He Shoufu writing signature Sponsors engaged by the Company to continuously perform its supervisory function during the reporting period √ Applicable N/A Name of sponsor Continuous Name of sponsor Sponsor office address representative supervision period 27-28/F., China World China International 14 September 2017 Office 2, No. 1 Liu Zhiyang, Yu Capital Corporation to 31 December Jianguomenwai Avenue, Yan Limited 2018 Chaoyang District, Beijing 14 September 2017 Huaxi Securities No.198, Tianfu 2nd Street, Wan Jiayou, to 31 December Co.,Ltd. High-tech Zone, Chengdu Wang Yuxiang 2018 Financial adviser engaged by the Company to continuously perform its supervisory function during the reporting period. Applicable √ N/A 6 2018 Annual Report of Luzhou Laojiao Co.,Ltd. 6. Key accounting data and financial indicators Whether the Company performed a retroactive adjustment to or restatement of accounting data due to changes of accounting policies and correction of accounting errors. Yes √ No YoY 2018 2017 2016 Change Operating revenues (CNY) 13,055,465,761.55 10,394,867,493.46 25.60% 8,626,696,462.91 Net profits attributable to 3,485,643,008.98 2,557,944,598.97 36.27% 1,957,193,264.50 shareholders of the Company (CNY) Net profits attributable to shareholders of the Company 3,483,173,302.46 2,539,601,364.06 37.15% 1,937,347,061.00 before non-recurring gains and losses (CNY) Net cash flows from operating 4,297,916,018.24 3,703,734,061.89 16.04% 2,749,562,800.75 activities (CNY) Basic earnings per share 2.380 1.798 32.37% 1.396 (CNY/share) Diluted earnings per share 2.380 1.798 32.37% 1.396 (CNY/share) Weighted average ROE 21.81% 20.30% 1.51% 18.12% At the end of At the end of YoY At the end of 2018 2017 Change 2016 Total assets (CNY) 22,604,929,596.42 19,755,761,074.20 14.42% 13,965,550,665.32 Net assets attributable to 16,964,671,475.96 15,171,448,756.68 11.82% 11,009,813,755.50 shareholders of the Company (CNY) 7. Differences in accounting data under domestic and overseas accounting standards 7.1. Differences in the net profits and net assets disclosed in the financial reports prepared under the international and China accounting standards Applicable √ N/A No such differences for the reporting period. 7.2. Differences in the net profits and net assets disclosed in the financial reports prepared under the overseas and China accounting standards Applicable √ N/A No such differences for the reporting period. 8. Key financial results by quarter 7 2018 Annual Report of Luzhou Laojiao Co.,Ltd. Unit:CNY Q1 Q2 Q3 Q4 Operating revenues 3,369,965,694.45 3,050,367,825.98 2,842,562,257.01 3,792,569,984.11 Net profits attributable to 1,058,558,935.72 908,416,686.04 771,586,329.98 747,081,057.24 shareholders of the Company Net profits attributable to shareholders of the Company 1,053,576,596.46 915,518,134.14 761,785,406.41 752,293,165.45 before non-recurring gains and losses Net cash flows from operating 348,487,394.03 61,433,161.33 1,852,622,168.94 2,035,373,293.94 activities Whether there are any material differences between the financial indicators above or their summations and those which have been disclosed in quarterly or semi-annual reports Yes √ No 9. Non-recurring profits and losses √ Applicable N/A Unit:CNY Item 2018 2017 2016 Note Profit or loss from disposal of non-current See "Section XI assets(including the write-off portion of the -13,885,991.18 -4,256,543.78 -18,725,437.47