Stock Code: 600415 Stock Short Name: 小商品城
Zhejiang China Commodities City Group
Co., Ltd.2021 Annual Report
Important NoteI. The Board of Directors, the Board of Supervisors and the directors, supervisors andsenior management of the Company hereby warrant the truthfulness, accuracy andcompleteness of the contents of the Annual Report, guarantee that there are no falserepresentations, misleading statements or material omissions contained in this AnnualReport, and are jointly and severally responsible for the liabilities of the Company.
II. All directors of the Company were present at the board meeting.
III. Ernst & Young Hua Ming Certified Public Accountants (special general partnership) has
issued a standard unqualified audit opinion for the Company.
IV. ZHAO Wenge, Head of the Company, WANG Dong, Head in charge of accounting, andZHAO Difang, Head of the accounting department (Accounting Supervisor), declare thatthey warrant the truthfulness, accuracy and completeness of the financial report in theannual report.
V. The profit distribution plan for the reporting period or the plan for public reserve fundsinto share capital that was approved by the board of directorsBased on the total share capital on the registration date of profit distribution equity in 2021,cash dividends of RMB 0.73 (tax inclusive) will be distributed for every 10 shares. According to thecurrent total share capital of the Company, cash dividends of RMB 400,863,014.85 (tax inclusive)will be distributed. In the event of changes in the total share capital of the Company before thedividend distribution registration date, the scheme of allocation shall remain unchanged while thetotal profits distribution will be adjusted accordingly.
VI. Risk statement with forward-looking representations
√Applicable □Not Applicable
The forward-looking representations involved in this Report such as future plans anddevelopment strategies do not constitute the Company’s substantial commitments to investors.Investors shall watch out for the investment risks.
VII. Is the Company’s cash occupied by its controlling shareholder or any of its affiliates for
non-operational purposes?No
VIII. Has the Company provided external guarantee in violation of the prescribed decision-
making procedures?No
IX. Whether more than half of the directors can not warrant the truthfulness, accuracy and
completeness of the annual report disclosed by the CompanyNo
X. Reminder of major risks
The Company has described the risks that may exist in this Report in details. Please refer to“Potential Risks” in “Section III. Discussion and Analysis of Managers” of this Report.
XI. Others
□Applicable √Not Applicable
Table of Contents
Section I. Definitions .......................................................................................................................... 5
Section II. Company Profile and Financial Highlights .................................................................... 6
Section III. Discussion and analysis of managers ......................................................................... 11
Section IV. Corporate Governance .................................................................................................. 48
Section V. Environmental and Social Responsibilities ................................................................. 69
Section VI. Significant Matters .......................................................................................................... 70
Section VII. Changes in Shares and Shareholders ........................................................................ 83
Section VIII. Preferred Shares ............................................................................................................ 92
Section IX. Bonds ............................................................................................................................... 93
Section X. Financial Report............................................................................................................ 102
| Documents for Inspection | Accounting statements with the signatures and stamps of the person incharge of the Company, person in charge of accounting and person in charge of the accounting body. |
| Resolution of the Board of Directors and resolution of the Board of Supervisors | |
| Written confirmation opinions of directors, supervisors and senior management on the Company's 2021 Annual Report and Summary |
Section I. Definitions
I. DefinitionsFor the purpose of this Report, unless otherwise stated in the context, the following terms shallhave the following meanings:
| Definitions | ||
| SCO | means | Yiwu State-owned Capital Operation Co., Ltd. |
| MDG | means | Yiwu Market Development Group Co., Ltd. |
| CCCH | means | Yiwu China Commodities City Holdings Limited |
| CCCP | means | Yiwu China Commodities City Property Development Co., Ltd. |
| CCCF | means | Yiwu China Commodities City Financial Holdings Co., Ltd. |
| Huishang Micro-finance | means | Yiwu Huishang Micro-finance Co., Ltd. |
| Haicheng Company | means | Haicheng Yiwu China Commodities City Investment Development Co., Ltd. |
| Binjiang Shangbo | means | Hangzhou Binjiang Shangbo Property Development Co., Ltd. |
| Yiwu Shanglv | means | Yiwu Shanglv Investment Development Co., Ltd. |
| Chouzhou Financial Lease | means | Zhejiang Chouzhou Financial Lease Co., Ltd. |
| Yiwu Shangbo | means | Yiwu Shangbo Property Co., Ltd. |
| Handing Shangbo | means | Yiwu Handing Shangbo Real Estate Co., Ltd. |
| Gongchen Shangbo | means | Yiwu Gongchen Shangbo Property Co., Ltd. |
| Huangyuan Shangbo | means | Yiwu Huangyuan Shangbo Property Co., Ltd. |
| The Company, the Listed Company or the Group | means | Zhejiang China Commodities City Group Co., Ltd. |
Section II. Company Profile and Financial HighlightsI. Company profile
| Chinese name | Zhejiang China Commodities City Group Co., Ltd. |
| Chinese short name | 小商品城 |
| English name | Zhejiang China Commodities City Group Co.,Ltd |
| English short name | YIWU CCC |
| Legal representative | ZHAO Wenge |
II. Contact information
| Board Secretary | Securities Affairs Representative | |
| Name | XU Hang | RAO Yangjin |
| Address | Haiyang Business Building, No.105 Futian Road, Yiwu | Haiyang Business Building, No.105 Futian Road, Yiwu |
| Telephone | 0579-85182812 | 0579-85182812 |
| Fax | 0579-85197755 | 0579-85197755 |
| Hxu@cccGroup.com.cn | Hxu@cccGroup.com.cn |
III. Basic Information
| Registered address | Haiyang Business Building, No.105 Futian Road, Yiwu, Zhejiang Province |
| Office address | Haiyang Business Building, No.105 Futian Road, Yiwu, Zhejiang Province |
| Postal code at the office address | 322000 |
| Corporate website | www.cccGroup.com.cn |
| 600415@cccGroup.com.cn |
IV. Places for information diclosure and access to the annual report
| Media's names and websites selected by the Company for annual report disclosure | China Securities Journal, Shanghai Securities News and Securities Times |
| Stock exchange website selected by the Company for annual report disclosure | www.sse.com.cn |
| Place for access to the Company’s annual report | Securities Department of the Company |
V. Stock profile
| Stock profile | ||||
| Type of stock | Exchange | Stock short name | Stock code | Stock short name before change |
| A-share | Shanghai Stock Exchange | 小商品城 | 600415 | None |
VI. Other relevant information
| CPAs engaged by the Company (domestic) | Name | Ernst & Young Hua Ming Certified Public Accountants (special general partnership) |
| Office address | 16 th Floor, Ernst & Young Building, Oriental Plaza, 1 Chang'an Street, Dongcheng District, Beijing, China | |
| Name of the | YIN Guowei, HUANG Zhigang |
Signing Certified
PublicAccountants
VII. Major accounting data and financial indicators in the past three years(i) Major accounting data
Unit: RMB
| Major accounting data | 2021 | 2020 | YoY Change (%) | 2019 |
| Operating revenue | 6,033,842,972.95 | 3,725,686,100.39 | 61.95 | 4,042,767,521.18 |
| Net profits attributable to shareholders of the Listed Company | 1,334,095,906.95 | 926,626,706.42 | 43.97 | 1,255,276,023.70 |
| Net profits attributable to shareholders of the Listed Company with non-recurring items excluded | 1,221,808,001.15 | 517,246,267.88 | 136.21 | 930,676,526.71 |
| Net cash flow from operating activities | 2,033,082,507.76 | 828,788,261.95 | 145.31 | -1,538,907,257.55 |
| December 31, 2021 | December 31, 2020 | YoY Change (%) | December 31, 2019 | |
| Net assets attributable to shareholders of the Listed Company | 14,610,845,868.33 | 13,558,228,377.08 | 7.76 | 13,020,619,449.36 |
| Total assets | 31,014,635,513.35 | 28,750,127,146.86 | 7.88 | 31,323,233,994.44 |
(ii) Major financial indictors
| Major financial indictors | 2021 | 2020 | YoY Change (%) | 2019 |
| Basic EPS (RMB) | 0.25 | 0.17 | 47.06 | 0.23 |
| Diluted EPS (RMB) | 0.25 | 0.17 | 47.06 | 0.23 |
| Basic EPS after deducting non-recurring gains and losses (RMB/share) | 0.22 | 0.10 | 120.00 | 0.17 |
| Weighted average ROE (%) | 9.38 | 6.88 | Up 2.50 percentage points | 10.04 |
| Weighted average ROE after deducting non-recurring gains and losses (%) | 8.59 | 3.84 | Up 4.75 percentage points | 7.44 |
Explanation of main accounting data and financial indicators of the Company in the previous threeyears at the end of the report period
√Applicable □Not Applicable
1. The Company’s operating revenue increased by RMB 23.08 million YoY, mainly due to theincrease in the sales of goods during the current period.
2. The net profit attributable to shareholders of the listed company increased by RMB 407million over the same period of the previous year. This was mainly due to an increase of RMB 92million in net operating revenue and operating cost, an increase of RMB110 million in investmentincome, a decrease of RMB 24 million in non-operating expenses and a decrease of RMB172million in income tax expense compared with the same period of the previous year
3. The net profit attributable to shareholders of the Listed Company after deduction of the non-recurring gains and losses increased by RMB 704 million over the same period of the previous year.This was mainly due to an increase of RMB 407 million in net profit attributable to shareholders ofthe Listed Company in the same period of the previous year, and a decrease of RMB 297 million innon-recurring gains and losses.
4. The net flow generated by operating activities increased by RMB 1.204 billion over the sameperiod of the previous year, mainly due to an increase of RMB 1.375 billion in net cash deductedfrom payment for selling goods and providing services.VIII. Differences in accounting data between foreign and Chinese accounting standards(i) Differences between the net profit and net assets attributable to shareholders of the
Company disclosed in accordance with international accounting standards and China
accounting standards in the financial report
□Applicable √Not Applicable
(ii) Differences between the net profit and net assets attributable to shareholders of the
Company disclosed in accordance with overseas accounting standards and China
accounting standards in the financial report
□Applicable √Not Applicable
(iii) Explanation of differences between domestic and overseas accounting standards
□Applicable √Not Applicable
IX. Key financial indicators by quarter in 2021
Unit: RMB
| 1st Quarter January to March | 2nd Quarter April to June | 3rd Quarter July to September | 4th Quarter October to December | |
| Operating revenue | 773,146,503.41 | 1,299,481,223.59 | 2,053,219,737.59 | 1,907,995,508.36 |
| Net profits attributable to shareholders of the Listed Company | 377,396,281.59 | 473,118,179.34 | 358,731,419.31 | 124,850,026.71 |
| Net profit attributable to shareholders of the Listed Company after deducting non-recurring gains and losses | 346,787,473.15 | 458,193,426.29 | 344,238,070.51 | 72,589,031.20 |
| Net cash flow from operating activities | -267,130,288.24 | 433,866,112.99 | 1,053,274,803.88 | 813,071,879.13 |
Explanation of difference between quarterly data and disclosed data in regular reports
□Applicable √Not Applicable
X. Non-recurring items and amounts thereof
√Applicable □Not Applicable
Unit: RMB
| Non-recurring items | Amount for 2021 | Remark (if applicable) | Amount for 2020 | Amount for 2019 |
| Gain or loss from the disposal of non-current assets | -561,416.89 | 383,206,932.21 | 108,675,734.58 | |
| Government grants that are recognized in the current profit or loss, excluding the government grants that are closely related to the normal operation of the Company and are provided in a fixed amount or quantity continuously according to the national polices and certain standards | 23,559,898.01 | Please refer to details of other income and government grants accounted for profit or loss for the current period | 18,655,980.14 | 9,031,831.74 |
| Cash occupation fees charged from non-financial enterprises that are recognized in the current profit or loss | 107,299,598.45 | Fees paid for using fund collected from joint ventures including Tonghui Shangbo and Handing Shangbo | 124,744,826.38 | 241,150,826.18 |
| Gain arising from investment costs for acquisition of subsidiaries, associates and joint ventures by the corporation being less than its share of fair value of identifiable net assets of the investees on acquisition | - | 31,308,053.80 | - | |
| Gain or loss from changes in fair value of held-for-trading financial assets, derivative financial assets, financial liabilities held for trading and derivative financial liabilities, and investment income from the disposal of held-for-trading financial assets, derivative financial assets, financial liabilities held for trading, derivative financial liabilities and other debt instruments, except for effective hedging during the ordinary course of business | 7,298,587.58 | Mainly due to gains or losses from the changes in fair value arising from the holding of held-for-trading financial assets and other noncurrent financial assets | -32,578,800.48 | 68,526,573.42 |
| Profits and losses arising from external entrusted loans | - | 11,786,857.07 | - | |
| Net income from other non- | 3,504,923.76 | -4,107,200.75 | 1,049,413.04 |
| operating activities | ||||
| Other profit and loss items that meet the definition of non-recurring profit and loss | 1,604,200.49 | 688,953.43 | - | |
| Less: effect of income tax | 28,698,936.71 | 122,917,029.51 | 103,828,184.21 | |
| Effect of minority interest (after-tax) | 1,718,948.89 | 1,408,133.75 | 6,697.76 | |
| Total | 112,287,905.80 | 409,380,438.54 | 324,599,496.99 |
Expanation about defining the non-recurring profit and loss items listed in the Explanatory NoticeNo. 1 of Information Disclosure of Companies Publicly Issuing Securities - Non-recurring Profit andLoss items as the current profit and loss items
□Applicable √Not Applicable
XI. Items measured at fair value
√Applicable □Not Applicable
Unit: RMB10,000
| Item | Opening balance | Closing balance | Changes for the current period | Amount of impact on current profits |
| Held-for-trading financial assets | 5,171.27 | 7,537.51 | 2,366.24 | 91.80 |
| Other equity instruments investment | 66,225.63 | 64,218.80 | -2,006.83 | 1,254.27 |
| Other non-current financial assets | 152,392.52 | 152,481.93 | 89.41 | 2,881.82 |
| Total | 223,789.42 | 224,238.24 | 448.82 | 4,227.89 |
XII. Others
□Applicable √Not Applicable
Section III. Discussion and analysis of managersI. Discussion and analysis of operation(I) Market operationIn 2021, facing the complex international trade development environment, and based on thenew forms and models of trade, the Company performed digital innovation in trade services,attracted emerging advantageous industries, and implemented a differentiated rent price system;the Company focused on talents, brand, quality and standards, and continued to bring universitygraduates, design, live broadcast, and standards into the market; the Company integrated themarket property, and promoted itself to transform from a management company to a servicecompany.During the report period, the Company took multiple measures to promote the upgrading of themarket, enhance its advantages, and guide market traders to upgrade from information trade era todigital trade era. The occupancy rate of the shops in the market maintained above 98% in 2021,and the volume of business reached RMB 186.679 billion, up 14.77% YoY, showing strongresilience and vitality.
1. Precise and intelligent monitoring and control for prevention of the Covid-19 pandemicThe Company promoted the intelligent upgrading for prevention of the pandemic, installed self-service personal health report equipment, and intelligent channel turnstiles, to provide technicalsupport and data guarantee; fully activated the combat model of "communist party members +units", and orderly conducted nucleic acid testing and pandemic prevention drills in various marketsto prevent the market from the pandemic and ensure stable operation of the markets.
2. Construction of digital market
Focusing on digitalization empowering the market, and based on management and service, thetwo application systems of digital management and digital service were built, by setting up the datasharing and application mechanism and sorting and restructuring existing business, thus promotethe market's development toward being informational, intelligent and user-friendly.
(1) Building digital customer service center
During the report period, the Company completed the development of the modules of pledging,lease renewal, transfer, online basic management and upgrading of module of market traderintegrity credit, and conducted trial operation of digital customer service center.
(2) Launch of online platform for purchasers
On August 21, 2021, the Company launched the online platform for purchasers, which includesthe service modules such as market navigation, online goods searching and intelligent parking, andhas a average daily traffic of 64k.
(3) Development of intelligent design system
Starting from product package design and pattern, the Company joined hands with universitiesand colleges including Zhejiang University and Yiwu Industrial & Commercial College to develop anintelligent design system, to provide intelligent product design for merchants in the markets.
3. Empowering the market
(1) Bringing university graduates into the market
Through design competition that includes 100 universities and colleges, more than 9300undergraduates in design provided design service for market traders; undergraduates "sellinggoods in booth" activities were conducted, and a communication platform for merchants andundergraduates was established, matching over 2000 people; college graduates and people withhigher education level accounted for 26.9% of all the merchants in the market, indicating a risingyear-by-year trend.
(2) Bringing design into the market
During the report period, the Company successfully held the Forth "Yiwu China CommoditiesCity Cup" International Commodities Creative Design Competition, set up 20 design markets and 8planning and design booths, attracted 1000 designers and identified 1000 designer shops andlaunched 12.6k new products.
(3) Bringing live broadcast into the market
In 2021, the Company set up chinagoods live broadcast center and digital live broadcastindustrial incubator, organized market traders to perform live broadcast for over 1000 times, andconducted 147 trainings for live broadcast e-commerce for nearly 5000 people. The Companyjoined hands with Kuaishou platform to hold the first "Yiwu China Commodities City 415 LiveBroadcast Purchase Festival", which was promoted in all channels and provided with 100 milliontraffic and allowed brands to be exposed to consumers across China, with a GMV of RMB 1.69achieved. The Company cooperated with top live e-commerce agencies in China such as "MakeFriends", to help merchants in the market seize the opportunity of "e-commerce + live stream".
(4) Bringing standards into the market
During the report period, the Company sorted standards at home and abroad for 12 majorindustries, released 25 relevant reports, guided industrial association to develop multiple Groupstandards, and conducted 43 trainings on standardization for over 5500 people.
4. Direction of market service
Based on the operation concept of "Find products for buyers, and expand channels for sellers",the Company sorted its core business, built the frame of manager salary system, set up the path fortransformation from manager to operation specialist, and eventually promoted the Company'stransformation from a management company to a service company.
5. Constructing oversea market
Dubai Yiwu China Commodity City, the first oversea market of the Company, will start trailoperation in March 2022, and its shop occupancy rate has reached 99%. It's a comprehensivewholesale market with multiple functions including product display, warehousing as well as bonding,and has 1600 shops and 324 warehouses, covering eight industries. The market can give full playto the Dubai's advantages in policies and make full use of Dubai's radiation effect on Mideast, NorthAfrica and other regions, thus complementing each other with Yiwu China Commodity City. Throughcommodity sales exhibition, bonded warehousing, transshipment, and others, the market canpromote bilateral trade and industrial investment between China and UAE and its neighboringcountries, and strive to be a win-win cooperation model of the "Belt and Road" Initiative.
(II) Promote trade digitalization
In 2021, the Company optimized the digital functions and applications of the chinagoodsplatform for display transactions, logistics performance, trade finance, and some other fields indepth. The big data company (the operator of the chinagoods platform) has realized a revenue ofRMB 140 million and a net profit of RMB 27.47 million. The platform has achieved a total GMV ofRMB 16.8 billion in 2021.
1. Implementing digital top-layer design
During the report period, the Company enhanced digital new architecture, completed 5Gcovering in main markets and modification of Gigabit broadband; built Data Center Manager and
completed collecting, cleaning and filing of data for hundreds of systems; set up the implementationpath for digitalization, improved the data security system and guaranteed network operationmaintenance security.
2. Iteration and optimization of chinagoods platform
In 2021, Chinese Website, English Website, Arabic Website and Spanish National Websitewere launched on the platform and digitalization of traders and goods; The Company promotedR&D of core products of the platform and explored linked trade between the platform and overseabusiness. 60000 shops have been launched on the platform, with 460 kinds of commodities andover 1.2 million registered purchasers.
3. Results of application
The integration of chinagoods and the online purchase platform was accelerating, which wouldcreate commodity digital trade application scenario. Daikuanbao realized transaction amount overRMB 100 million; Caigoubao was launched, laying the foundation for subject manifestation and dataprovenance; Digital trade cockpit was launched, enabling display of all trade data on one screen.
chinagoods platform is an important measure of the Company for digital transformation, is animportant means for the Company's transformation, upgrading, expansion and development in theera of trade digitalization and information technology revolution, is a sign of integration of theCompany's online and offline markets.
(III) Build a global supply chain service system
Yiwu market is an important platform connecting the domestic and international trade supplychains, and is at the key node of the global small commodity supply chain. It plays an important rolein smoothing the internal circulation, improving the external circulation, and serving the new patternof "dual circulation".
1. Warehousing and logistics system
The warehousing and logistics system was developing steadily. The united warehousinginformation platform, cargo space booking system and express and drayage operation platformwere launched. Chinagoods digital cloud warehouse and Huanqiuyida Logistics Supply ChainIndustry Park were put into operation. 206 international logistics lines were launched andaccumulated goods delivered reached 1 million cubic meters.
2. Oversea warehouses
The expansion of oversea warehouses was accelerating. As of the end of the report period, theCompany laid out 120 oversea warehouses, with a total area over 600k ㎡, covering 46 countriesand regions and serving export over RMB 6 billion. The Company laid out 15 "Bring you to China"exhibition halls, with a total area over 4200 ㎡, displaying 21k SUK of commodities The fiveexhibition halls in Czech, Rwanda, Benin, Philippines, and Thailand achieved "oversea warehouse+ exhibition hall" operation mode. The Company brought Yimi Supply Chain and other enterprisesto conduct trial operation of "chinagoods national website+ oversea warehouse + exhibition hall"mode.
3. Comprehensive Bonded Zone
Yiwu Comprehensive Bonded Zone, as an exemplary project of Yiwu that was taken into freetrade trial zone, was one important mission that the state and Zhejiang Provincial Governmentgranted Yiwu. During the report period, the growth of Yiwu Comprehensive Bonded Zone was spedup and the phase I project was put into operation on October 22, 2021; the planning andconstruction of phase II project has started. As of the end of the report, nearly 20 key projects suchas "Zhejiang Non-ferrous Metal Trading Allocation Center Project", "Comprehensive Bonded ZoneStore-Warehouse-Field Whole Industry Chain Project", "B2B Intelligent Manufacturing AllocationWarehouse Project" were signed. The Company attracted big enterprises with existing enterprises,getting multiple top trade enterprises to enter the Bonded Zone.Since it was put into operation, bonded logistics business such as cross-border e-commerce1210 and general trade import and export was conducted steadily, with great achievements: Whole-area Supply Chain Financial Service Platform (Phase I) was launched, tariff guarantee product"Guanshuibao" and "Customs Separate Payment Guarantee" and other business wereimplemented; first "Bonded Zone-port linkage + staple commodity" business was completed; onNovember 24, first cross-border bonded live broadcast was conducted in warehouse D2; onDecember 9, first check business for returned goods entering the Bonded Zone was completed inYiwu Comprehensive Bonded Zone. After two months of operation, Yiwu Comprehensive BondedZone achieved total amount of import and export of RMB 2.8 billion.
(IV) Self-operated business stepped into a new phase
During the report period, the Company integrated the source supply chain resources of Yiwumarket, combined "Trendy domestic commodities" and "Imported good commodities", built a tradesystem of "All good commodities" for sales at home and abroad, to serve the dual circulation ofdomestic circulation and international circulation, and promote the brands of "Yiwu Selection" and"ICMall". As of the end of the report period, the income from commodity sales reached RMB 2.593billion, which was a big leap.
1. On supply side
In 2021, the Company's two self-run brands "Yiwu Selection" and "ICMall" through directsourcing, domestic agency, OEM production and other ways, gained a total of 108 domestic andforeign brand agencies, 20,000 + SKU of high-quality single products, 2000 core suppliers in thewarehouse, 3000 advantageous commodities. The business scope covered seven categories ofhome life, beauty makeup and skin care, maternal and child products, snacks and drinks,entertainment and cultural innovation, toys and digital products, and cross-border goods. It aimed tocreate a supply chain service platform with full-scene digitization, full-link new experience and O2Oonline-offline integrated development.
2. On sales and distribution side
The Company's expansion of online and offline sales and distribution channels for "YiwuSelection" and "ICMall" was accelerating. On the offline side, the Company actively expandeddomestic second-level wholesale market and industry dealer channels, and accumulated over 2000cooperation channels by parent brand authorization, subsidiary brand joining, supply chaincooperation and other means, and was selected as a trial project of first special campaign foroptimization and upgrading of national commodity market. On the online side, the Companyexplored cross-border incubation mechanism, set up short video and live broadcast business, andopened and operated chinagoods oversea flagship shop, TikTok self-operated shop, Kuaishou self-operated shop and others, completing 149k online orders.
3. On service side
The Company enhanced its supply chain service ability, signed over 30 warehousing serviceproviders and over 50 logistics service providers and completed customs clearance for over 4000TEU imported commodities. As of the end of the report period, the accumulated signed import tradeamount reached RMB 1.86 billion.
(V) Speeding up digitalization of exhibition
During the report period, the Company's subsidiary Shangcheng Exhibition took the opportunitythat Yiwu market is a pilot of digitalization transformation, took Yiwu's construction of intelligent cityinto account, and made full use of IoT, internet, cloud computing, intelligent analysis and othertechnologies, to build a intelligent service exhibition system; based chinagoods platform, built a safe,reliable, efficient and useful cloud digital exhibition platform, and promoted the online-offline dualdrive exhibition mode to be mature and standardize; cooperated with Yiwu Market DevelopmentCommittee and other government authorities the "Visit Exhibition Hall Here" platform, which wouldprovide more convenient and comfortable exhibition experience for exhibitors, participants andaudience; fined data management, and analyzed Group features, information channels andpreferred types and other dimensions of data, to form digital economy that takes data as the key
element; explored in depth the value of digital venues and maximized digital technologies' newadvantages.To get rid of the restrictions that the pandemic imposed on offline exhibition as soon aspossible, and find the new opportunity of exhibition industry, Shangchen Exhibition actively exploredthe construction of online exhibition platform in depth and successfully made a breakthrough. In2021, Shangcheng Exhibition expanded the scale of online exhibition, and successfully heldmultiple online-offline combined exhibitions including online China Yiwu International CommoditiesFair, online China Yiwu International Forest Product Fair and online China Yiwu Cultural andTourism Products Trade Fair, with 250 million visits for online exhibition, which formed a newdevelopment trend of online-offline combination of exhibition.II. Description of the industry of the Company during the reporting periodIn 2021, thanks to China's stable economic and social development and its leading position inthe world in epidemic prevention and control, China's potential of the foreign trade industry was fullytapped and its comprehensive competitiveness continued to improve. The changing flow ofcommerce promoted the emergence and evolution of the structural trend of foreign trade. China isat the key point of "top-down" comprehensive transformation and upgrading of foreign trade in thenational strategy, and Yiwu plays a pivotal role in this key point.
1. National policies for the industry
In July 2021, "Opinions about speeding up the development of new forms and modes of foreigntrade" (hereinafter referred to as the "Opinions") issued by the General Office of the State Council,clearly supports the development of cross-border e-commerce, overseas warehouse, marketprocurement trade mode, comprehensive service enterprises in foreign trade, offshore trade,convenient trade payment and settlement, and ither new forms and modes of foreign trade, to injectnew vitality to the development of foreign trade.The "Opinions" stressed that "the policy frame for market procurement trade mode will beoptimized, and that by 2025, 10 integrated markets for domestic and foreign trade with exportamount over RMB 100 billion will be produced, and a host of famous brands will be created", whichpoints out the direction and specifies the goals for market procurement trade mode in the newphase.
2. Yiwu market
Yiwu relies on its over 2.1 million micro, small and medium-sized enterprises to maintain tradewith over 230 countries and regions across the world, with an export-oriented degree of 65%.Focusing on the goods aggregation of nearly RMB 400 billion import and export amount in themarket, cross-border rail and air transportation capacity develops rapidly, which, together with the
low cost of domestic logistics, bring super high logistics efficiency for LCL export, thus drivesemergence and development of a considerable numer new B2C cross-border e-commerceenterprises.
(1) The overall situation of Yiwu market
In 2021, Yiwu's total import-export amount reached RMB 390.31 billion, up 24.7% YoY; ofwhich, the total export amount was RMB 365.92 billion, up 21.7% YoY, and the total export amountexceeded that of 18 provinces; the total import amount was RMB 24.39 billion, up 95.3% YoY.
In 2021, Yiwu's foreign trade export achieved excellent performance, and market procurementtrade was an important booster.
(2) Market procurement trade in Yiwu
Since 2013, China's Ministry of Commerce and other relevant departments have first carriedout pilot projects under market procurement trade mode in Yiwu. In the business process,supervision, information construction and other aspects, Yiwu took the lead, with tailored supportpolicies, VAT exemption without refund, simplified declaration and other breakthroughs in policy. Arelatively complete territorial comprehensive management system and commodity identificationsystem were gradually formed. Since then, China has recognized 31 market procurement trade pilotunits in 15 provinces for 5 batches.
| Pilot Projects of Market Procurement | Date of establishment | |
| First batch | Pilot Project of Market Procurement of Zhejiang Yiwu Market | April 2013 |
| Second batch | Jiangsu Haimen Diishiqiao International Home Textile City, Zhejiang Haining Leather City | Decmeber 2015 |
| Third batch | Changshu Clothing City, Jiangsu Province; Huadu Leather and Leather Goods Market, Guangzhou, Guangdong Province; Linyi City, Shandong Province; Hankou North International Commodity Exchange Center, Wuhan, Hubei Province; Baigou Bag Market, Hebei Province | September 2016 |
Cross-border e-commerce export volume and marketprocurement trade export volume of China (2016-2021)
Cross-border e-commerce export volume and marketprocurement trade export volume of China (2016-2021)Cross-border e-commerce export volume of China (RMB 100mn)Market procurement trade export volume of China (RMB 100mn)Proportion of cross-border e-commerce and market procurement tradeexport volume in total export volume of China
| Fourth batch | Zhejiang Wenzhou (Lucheng) Light Industrial Products Trading Center, Quanzhou Shishi Clothing Mall, Fujian Province, Gaoqiao Market, Hunan Province, Foshan (Shunde) Asia International Furniture Material Trade Center, Zhongshan City and Lighting Exhibition Center, Zhongshan City, Sichuan Province, Chengdu International Trade Center | November 2018 |
| Fifth batch | Liaoning Xiliu Clothing City, Zhejiang Shaoxing Keqiao China Light Textile City, Zhejiang Taizhou Luqiao Daily Necessities and Plastic Products Trading Center, Zhejiang Huzhou (Zhili) Children's Wear and Daily Consumer Goods Trading and Management Center, Anhui Bengbu Zhongheng Trade City, Fujian Jinjiang International Shoes Textile City , Shandong Qingdao Jimo International Trade City, Shandong Yantai three station wholesale trading market, Henan China (Xuchang) International Hair products trading market, Hubei Yichang Three Gorges Logistics Park, Guangdong Shenzhen South China International Industrial Raw Materials City, Guangdong Shantou Bao 'ao International Toy City, Guangdong Dongguan Dalang Wool Trade Center, Yunnan Kunming Junfa - New Luosiwan International Trade City, Yunnan Ruili International Commodity Exchange Market (border Trade Commodity Market), Inner Mongolia Manzhouli Mangou Center (Border Trade Commodity Market), Guangxi Sample Export Commodity Purchase Center (Border Trade Commodity Market) | September 2020 |
Yiwu is the leader and demonstration center of market procurement trade in China, and hasmaintained high-speed growth for 7 years in a row, with a compound annual growth rate over 30%,which has effectively unlocked the validity of the market subject and further improved theconvenience level of trade.
In 2021, China's total import under market procurement trade mode was RMB 930.39 billion, ofwhich Yiwu's total import under market procurement trade mode was RMB 290.16 billion,accounting for 31.2% of that of China, up 30.1% YoY.
(3) Siphonic effect of logistcs of Yiwu
There is a continueous "siphonic effect" of Yiwu, due to its strong goods sources guarantee,good business environment, and multi-dimensional domestic-international logistics networkconsisting of sea, road, air and railway, express, China-Euro Railway Express, and others. In 2021,Yiwu's express delivery service enterprises completed 9289.574 million express orders, up 29.50%YoY.
Top 10 cities in express delivery service andtheir accumulated volumes in 2021Guangzhou
Unit: 100mn pcs
III. Description of the business of the Company during the reporting periodAccording to the definitions in the Guidelines for Industry Classification of Listed Companies(revised in 2012) released by the CSRC, the Company is engaged in “Business Service” (L72) in“Lease and Business Service” (L).(I) Main businessesThe Company is engaged in market development and operation and supporting services,providing online trading platform and services, online trading market development and operation,etc., belonging to the comprehensive industry category.(II) Operating model
1. Market operation
Market operation business is mainly operated and managed by the Company's subordinatemarket branches. The main business income of the market operation segment is mainly the incomefrom the use of shops. The Company adopts a shop rental model, that is, the ownership of theshops belongs to the Company, and market traders only have the right to use the shop within thecontract period. The Company and market traders sign a contract to clearly stipulate the use period,usage fee and business purpose of the shops. The merchant shall not change the agreed businesspurpose, and shall not sublet without the Company’s consent. Generally, the payment methods ofusage fee are one-time payment or installment payment according to the contract terms. Currentlythe markets that the Company is responsible for operating include Zone 1 to Zone 5 of theInternational Trade City, Importing Market, Zone 1 East Expansion Market, Huangyuan Market andInternational Production Goods Market.
2. Online trade platform
Relying on the Company's market resources of 75,000 off-line shops, Yiwu market officialwebsite “chinagoods” platform (www.chinagoods.com, referred to as "chinagoods platform")provides service for 2.1 million micro, small, and medium enterprises in the upper reaches of theindustry chain. With trade data integration as the core driver, it meets the needs of both supply anddemand parties in manufacturing, display transactions, warehousing and logistics, financial credit,market management and other links to achieve effective and accurate allocation of marketresources, and build a true, open, and integrated digital trade comprehensive service platform.
IV. Analysis of core competencies during the reporting period
√Applicable □Not Applicable
(I) First-mover advantages
At the start of China’s reform and opening-up, Yiwu took the lead in establishing thecommodities market. During the recent forty years, the market has been upgraded five times andexpanded ten times and has been among the top comprehensive national markets with the highestturnover, pointing to its remarkable first-mover advantages. As the largest commodities distribution
center in the world, the Yiwu commodities market provides more than 2million products, which fall in26 categories and supports one-stop purchase. The market boasts enormous resources and hugebusiness flow, goods flow, cash flow and information flow.(II) Brand advantages“Yiwu China Commodities City” is the first market identified by the SAIC as a well-knowntrademark among the national commodities trading markets. The Company has taken multiplemeasures to give play to the brand of “Yiwu China Commodities City” and is committed to improvingits influence and leading role in the industry. Its brand advantages and influence have keptenhancing.(III) Auxiliary services advantagesThe People’s Government of Yiwu has been providing policy support for the development ofthe market for years, and the auxiliary industries are developing rapidly in Yiwu.
1. Convenient logistics system
Yiwu has in place perfect commerce and trade auxiliary facilities and advantageous logisticsservice. The logistics network has full coverage in Yiwu. A large number of large-sized internationaland domestic express delivery and logistics companies have regional distribution centers in Yiwu,and a world-oriented goods transport and distribution network has been established. Yiwu has beenlisted among the “commerce and trade-oriented national logistics hubs” by the NationalDevelopment and Reform Commission and the Ministry of Transport. According to the operation ofthe postal industry in 2021 that was announced by the State Post Bureau, the express deliverybusiness volume of Yiwu ranked second in China in 2021.
2. Industry support
During the recent years, thanks to the Yiwu China Commodities City, the Yiwu-centeredmanufacturing industry cluster has been developing fast, an commodities industrial belt that iscentered in Yiwu and covers Jinhua, Lishui, Quzhou, Hangzhou, Jiaxing, Taihu, Shaoxing, Ningbo,Wenzhou and Taizhou with an area of nearly 10,000 sq.m has been established, and a benignmechanism under which the Yiwu wholesales market and the peripheral industry cluster developtogether has been formed.
3. Support from exhibition service
The major international trade exhibitions held by the Company’s exhibition business divisionsuch as China Yiwu International Commodities Fair, China Yiwu International Forest Products Fair,China Yiwu International Imported Commodities Fair and China Yiwu Hardware and Electrical Exposupport and cultivate vertical exhibition in multiple industries such as stationery and textiles, havedeveloped multiple professional and international exhibition brands, and are important nationalplatforms for the China Commodities City to lead industry development, develop the city economyand maintain the clusters of traders and commodities.
(IV) Diversified businesses advantage
The Company has strengthened its presence in the related industries, made efforts on financialinvestment, kept developing the exhibition business, created a new e-commerce model, developedthe hotel business and also run international trade, modern logistics, advertising information,
shopping and tourism businesses. It has created a Group structure and profit-making model ofshared and interactive development of market resources.(V) Management advantageIn terms of personnel, management and technology, excellent operation and managementability is one of the core competences of the Company as a professional market operating company.The Company has developed a series of perfect management systems for market operation andmanagement, accumulated rich experience in operation and management, and has cultivated aprofessional management team with reasonable knowledge and expertise structures and strategicdevelopment insights.
(VI) Adavantage of online and offline platform integrationThe Company’s international trade city is the global leading commodity market. TheCompany’s official Yiwu CCC website, chinagoods platform, relying on the Company’s 75,000 off-line shops, through integration of online and offline services, serves 2 million small, medium andmicro enterprises in the upper reaches of the industry chain. With trade data integration as the coredriver, it meets the needs of both supply and demand parties in manufacturing, display transactions,warehousing and logistics, financial credit, market management and other links.(VII) Advantage of international logisticsThe Company's Huanqiuyida international logistics business, establishes a logistics platform toreplace the multi-layer freight forwarder system, thus shortening the level of freight forwarderdistribution, and improving logistics efficiency. In contrast, the traditional foreign trade freightforwarders are divided into multiple levels, the logistics and transportation services are notstandardized, and the service prices vary widely and are usually not the lowest price.
V. Operating status during the reporting periodIn 2021, the Company's operating revenue was RMB 6.034 billion, up RMB 2.308 billion, or
61.95% YoY; Net profit attributable to shareholders of the parent company was RMB 1.334 billion,up RMB 407 million, or 43.97% YoY.(i) Analysis of main business
1. Analysis of changes in related accounting subjects of income statement and cash flowstatement
Unit: RMB
| Item | Amount in the current report period | Amount in the same report period of the previous year | YoY change (%) |
| Operating revenue | 6,033,842,972.95 | 3,725,686,100.39 | 61.95 |
| Operating cost | 4,027,543,138.56 | 1,811,136,443.99 | 122.38 |
| Sales expenses | 204,745,974.57 | 241,889,186.44 | -15.36 |
| Administrative expenses | 453,543,427.80 | 377,516,845.45 | 20.14 |
| Financial expenses | 179,911,613.70 | 182,089,699.33 | -1.20 |
| R&D expenses | 10,308,801.84 | 18,507,626.99 | -44.30 |
| Net cash flow from operating activities | 2,033,082,507.76 | 828,788,261.95 | 145.31 |
| Net cash flow from investing activities | 1,650,766,978.93 | 636,113,348.17 | 159.51 |
| Net cash flow from financing activities | -1,701,935,200.78 | -2,855,836,638.69 | Not applicable |
Reasons for the change in operating revenue: the Company’s operating revenue increased by
61.95% YoY, mainly due to the increase in the sales of goods during the current period.Reasons for the change in operating cost: The Company’s operating cost increased by 122.38%YoY, mainly due to the increase in the sales of goods during the current period.Reasons for change in R&D expenses: the Company's R&D expenses decreased 44.30% YoY,mainly due to the increase in expensed R&D investment during the current period.Reasons for the change in the net flow generated by operating activities: mainly due to an increaseof RMB 1.375 billion in net cash deducted from payment for selling goods and providing services.Reasons for changes in net cash flow from investment activities: mainly because the net outflow ofinvestment during the current period decreased by RMB 1.958 billion YoY, and cash paid forpurchasing and construction of fixed assets, intangible assets and other long-term assets increasedby RMB 830 million YoY.Reasons for changes in net cash flow from financing activities: Mainly because the net inflow offinancing during the current period decreased by RMB 1.385 billion YoY, cash received for absorbedinvestment decreased by RMB 142 million YoY, and cash paid for dividends and interest paymentsincreased by RMB 113 million YoY.
Details of material changes to the business types, the components, or sources of profits ofthe Company in this reporting period
□Applicable √Not Applicable
2. Revenue and cost analysis
√Applicable □Not Applicable
In 2021, the Company's operating revenue was RMB 6.034 billion, up 61.95% YoY, and theCompany's operating cost was RMB 4.028 billion, up 122.38% YoY.
(1). Main business by industry, product and region
Unit: RMB10,000
| Main business by industry | ||||||
| By industry | Operating revenue | Operating cost | Gross profit margin (%) | Change in operating revenue YoY (%) | Change in operating cost YoY (%) | Change in gross profit margin YoY (%) |
| Market operation | 239,646.10 | 86,713.96 | 63.82 | 12.66 | -3.47 | Up 6.05 percentage points |
| Sales of goods | 259,327.86 | 258,667.18 | 0.25 | 575.71 | 577.11 | Down 0.21 percentage points |
| Hotel service | 12,745.36 | 13,376.12 | -4.95 | -14.75 | -7.04 | Down 8.70 percentage points |
| Exhibition | 11,953.88 | 12,296.06 | -2.86 | 24.08 | 15.66 | Up 7.49 percentage |
| and advertising | points | |||||
| Other services | 34,932.61 | 16,028.14 | 54.12 | 43.42 | 14.48 | Up 11.60 percentage points |
| Sub-total | 558,605.81 | 387,081.46 | 30.71 | 82.59 | 128.24 | Down 13.86 percentage points |
Explanation of main business by industry, product, region and sales mode
1. The revenue and cost of product sales increased by 575.71% and 577.11% respectivelyyear-on-year, mainly due to the large year-on-year increase in the commodity sales business ofimport and export companies and supply chain companies in the current period
2. The revenue of other services increased by 43.42% year-on-year, mainly due to theinformation technology services conducted by the big data company.
(2). Table of production and sales analysis
□Applicable √Not Applicable
(3). The performance of major purchage contracts and major sales contracts
□Applicable √Not Applicable
(4). Cost Analysis Table
Unit: RMB10,000
| Status by industry | |||||||
| By industry | Cost components | Amount in the current period | Proportion in the total cost in the current period (%) | Amount in the same period of prior year | Proportion in the total cost in the prior corresponding period (%) | Percentage change of amount in the current period compared with the prior corresponding period (%) | Situation Remarks |
| Market operation | Depreciation and amortization | 46,031.98 | 11.89 | 46,198.46 | 27.24 | -0.36 | |
| Market operation | Wages and benefits | 22,111.44 | 5.71 | 20,669.29 | 12.19 | 6.98 | |
| Market operation | Other costs | 18,570.54 | 4.80 | 22,967.84 | 13.54 | -19.15 | |
| Sales of goods | Cost of product sales | 258,667.18 | 66.82 | 38,201.55 | 22.53 | 577.11 | Mainly due to the increase in product sales |
| Hotel service | Depreciation and amortization | 2,432.99 | 0.63 | 2,557.02 | 1.51 | -4.85 | |
| Hotel service | Cost of food and beverage raw materials | 4,356.83 | 1.13 | 5,969.28 | 3.52 | -27.01 | |
| Hotel service | Wages and benefits | 4,216.87 | 1.09 | 4,077.68 | 2.40 | 3.41 | |
| Hotel service | Material and fuel | 759.03 | 0.20 | 716.93 | 0.42 | 5.87 | |
| consumption | |||||||
| Hotel service | Other costs | 1,610.40 | 0.41 | 1,067.58 | 0.63 | 50.85 | |
| Exhibition advertising service | Depreciation and amortization | 4,167.15 | 1.08 | 3,771.71 | 2.22 | 10.48 | |
| Exhibition advertising service | Exhibition and advertising cost | 6,311.12 | 1.63 | 5,172.71 | 3.05 | 22.01 | |
| Exhibition advertising service | Other costs | 1,817.79 | 0.47 | 1,687.16 | 0.99 | 7.74 | |
| Other services | Property management cost | 2,318.52 | 0.60 | 2,237.42 | 1.32 | 3.62 | |
| Other services | Network transformation and service | 7,542.35 | 1.95 | 7,975.07 | 4.70 | -5.43 | |
| Other services | Other costs | 6,167.27 | 1.59 | 3,788.81 | 2.24 | 62.78 | Mainly due to the increase in costs of warehousing and logistics during current period |
| Real estate sales | Cost of real estate sales | - | - | 2,537.33 | 1.50 | - | No income this year, so it could not be compared |
| Total | 387,081.46 | 100.00 | 169,595.84 | 100.00 | 128.24 |
Explanation on cost analysis and other informationNone
(5). Changes in consolidation scope due to the changes in main subsidiaries' shareownership during the report period
□Applicable √Not Applicable
(6). Major changes or adjustment in the Company's business, products or services
□Applicable √Not Applicable
(7). Main sales customers and suppliers
A. Main sales customers of the Company
Case in which the sales to a single customer accounted for over 50% of the total sales, newcustomers were added to the list of top 5 customers or the Company relied heavily on a fewcustomers during the report period
□Applicable √Not Applicable
B. Main suppliers of the Company
Case in which the purchase amount for a single supplier accounted for over 50% of the totalpurchase amount, new suppliers were added to the list of top 5 suppliers or the Company reliedheavily on a few suppliers during the report period
□Applicable √Not Applicable
Other statementsNone
3. Costs
√Applicable □Not Applicable
Unit: RMB10,000
| Item | 2021 | 2020 | YoY change amount | Change / % | Explanation on changes |
| Sales expenses | 20,474.60 | 24,188.92 | -3,714.32 | -15.36 | |
| Administrative expenses | 45,354.34 | 37,751.68 | 7,602.66 | 20.14 | |
| R&D expenses | 1,030.88 | 1,850.76 | -819.88 | -44.30 | Due to decrease in expended R&D investment in this period |
| Financial expenses | 17,991.16 | 18,208.97 | -217.81 | -1.20 | |
| Income tax expenses | 32,752.52 | 49,975.50 | -17,222.98 | -34.46 | Due to the YoY decrease in taxable income |
Unit: RMB10,000
| Item | 2021 | 2020 | YoY change amount | Change / % |
| Staff expenses and work clothes | 32,636.89 | 24,502.91 | 8,133.98 | 33.20 |
| Advertising expenses | 4,564.90 | 9,441.10 | -4,876.20 | -51.65 |
| Security and insurance costs | 3,830.60 | 2,711.54 | 1,119.06 | 41.27 |
| R&D expenses | 1,030.88 | 1,850.76 | -819.88 | -44.30 |
| Depreciation and amortization | 3,869.35 | 3,868.23 | 1.12 | 0.03 |
| Promotion and investment promotion | 12,124.46 | 10,567.68 | 1,556.78 | 14.73 |
| Intermediary expenses | 2,348.08 | 3,852.94 | -1,504.86 | -39.06 |
| Office expenses | 1,761.61 | 2,003.44 | -241.83 | -12.07 |
| Water, electricity and fuel consumption | 135.19 | 365.14 | -229.95 | -62.98 |
| Rent and property management | 307.15 | 307.15 | - | - |
| Other expenses | 4,250.71 | 4,320.47 | -69.76 | -1.61 |
| Subtotal of management, R&D and sales expenses | 66,859.82 | 63,791.36 | 3,068.46 | 4.81 |
1. Reasons for YoY increase in staff expenses and work clothes: mainly due to the increase inperformance and the increase in wages with gross wages management methods.
2. Reasones for YoY decrease in advertising expenses: mainly due to the cancellation of overseaadvertising under the influence of the Covid-19 pandemic.
4. R&D Investment
(1). Table of R&D investment status
√Applicable □Not Applicable
Unit: RMB10,000
| Expended R&D investment in this period | 1,030.88 |
| Capitalized R&D investment in this period | 2,860.04 |
| Total R&D investment | 3,890.92 |
| Total R&D investment as a percentage of operating income (%) | 0.64 |
| Proportion of capitalization of R&D investment (%) | 73.51 |
(2). Table of R&D personnel status
√Applicable □Not Applicable
| Number of R&D personnel | 139 |
| Number of R&D personnel as a percentage of the Company’s total personnel number (%) | 3.29 |
| The education level of R&D personnel | |
| Education level | People at this education level |
| Master's degree | 7 |
| Bachelor's degree | 99 |
| College graduates | 33 |
| Age of R&D personnel | |
| Age range | People in this age range |
| Below 30 (30 excluded) | 62 |
| 30-40 (30 included, 40 excluded) | 64 |
| 40-50 (40 included, 50 excluded) | 11 |
| 50-60 (50 included, 60 excluded) | 2 |
(3). Reasons for change
□Applicable √Not Applicable
(4). Reasons for major changes in the composition of the R&D personnel and their infuenceon the Company's future development
□Applicable √Not Applicable
5. Cash flow
√Applicable □Not Applicable
Unit: RMB10,000
| Item | 2021 | 2020 | YoY change |
| Net cash flow (used)/generated from operating activities | 203,308.25 | 82,878.83 | 120,429.42 |
| Net cash flow (used)/generated from investing activities | 165,076.70 | 63,611.33 | 101,465.37 |
| Net cash flow (used)/generated from financing activities | -170,193.52 | -285,583.66 | 115,390.14 |
| (Decrease)/increase in cash and cash equivalents | 197,382.55 | -139,406.97 | 336,789.52 |
Analysis of main reasons for changes:
1. The net cash flow from operating activities in 2021 increased by RMB 1.204 billion comparedwith that in 2020. Mainly due to an increase of RMB 1.375 billion in net cash deducted frompayment for selling goods and providing services.
2. The net cash flow from investment activities in 2021 increased by RMB 1.015 billion comparedwith that in 2020. Mainly because the net outflow of investment during the current period decreasedby RMB 1.958 billion YoY, and cash paid for purchasing and construction of fixed assets, intangibleassets and other long-term assets increased by RMB 830 million YoY.
3. The net cash flow from finacing activities in 2021 increased by RMB 1.154 billion compared withthat in 2020. Mainly because the net inflow of financing during the current period decreased byRMB 1.385 billion YoY, cash received for absorbed investment decreased by RMB 142 million YoY,and cash paid for dividends, profits or interest payments increased by RMB 113 million YoY.
(ii) Material changes to profits caused by non-main businesses
□Applicable √Not Applicable
(iii) Analysis of assets and liabilities
√Applicable □Not Applicable
1. Assets and liabilities
Unit: RMB10,000
| Item | Closing balance in current period | Proportion in total assets at the end of the current period | Closing balance in the prior period | Closing balance’s proportion in total assets in the prior period (%) | Percentage change of the closing balance of the current period compared with the prior period (%) | Reasons for change |
| Total assets | 3,101,463.55 | 100.00 | 2,875,012.71 | 100.00 | 7.88 | |
| Monetary capital | 483,146.84 | 15.58 | 561,264.29 | 19.52 | -13.92 | |
| Held-for-trading financial assets | 7,537.51 | 0.24 | 5,171.27 | 0.18 | 45.76 | Mainly due to buying bank wealth management products |
| Accounts receivable | 18,523.75 | 0.60 | 15,357.35 | 0.53 | 20.62 | |
| Prepayments | 87,516.77 | 2.82 | 10,518.75 | 0.37 | 732.01 | Mainly due to the growth of the product sales and the increase in advance payment |
| Other receivables | 135,592.43 | 4.37 | 270,847.81 | 9.42 | -49.94 | Mainly due to recovering of financial assistance during the reprot period |
| Inventory | 132,740.26 | 4.28 | 132,946.77 | 4.62 | -0.16 | |
| Other current assets | 24,866.22 | 0.80 | 17,972.47 | 0.63 | 38.36 | Mainly due to the increase in overpaid input VAT tax |
| Long-term receivables | 22,230.74 | 0.72 | 12,675.66 | 0.44 | 75.38 | Mainly due to the increase in the financial aids from Dubai project company |
| Long-term equity investment | 577,245.52 | 18.61 | 383,289.75 | 13.33 | 50.60 | Mainly due to the capital increase of joint ventures and incease in investment income by equity method |
| Other equity instruments | 64,218.80 | 2.07 | 66,225.63 | 2.30 | -3.03 |
| investment | ||||||
| Other non-current financial assets | 152,481.93 | 4.92 | 152,392.53 | 5.30 | 0.06 | |
| Property investment | 297,393.64 | 9.59 | 196,042.63 | 6.82 | 51.70 | Mainly bacause BD zone of the comprehensive Bonded Zone was completed and transferred in |
| Fixed assets | 507,859.09 | 16.37 | 523,429.38 | 18.21 | -2.97 | |
| Construction in progress | 109,057.80 | 3.52 | 98,289.19 | 3.42 | 10.96 | |
| Right-of-use assets | 22,534.71 | 0.73 | - | - | Not applicable | Presented for the adjustment under the new standard for lease |
| Intangible assets | 404,356.46 | 13.04 | 390,078.10 | 13.57 | 3.66 | |
| Development expenses | 635.98 | 0.02 | 2,222.31 | 0.08 | -71.38 | Mainly due to the transfer-in of intangible assets |
| Long-term prepaid expenses | 18,818.44 | 0.61 | 11,072.87 | 0.39 | 69.95 | Mainly because the transformation of Yindu Hotel was completed and it was transferred in |
| Deferred income tax assets | 13,573.70 | 0.44 | 9,966.43 | 0.35 | 36.19 | Mainly because it was re-determined |
| Other non-current assets | 21,132.96 | 0.68 | 15,249.52 | 0.53 | 38.58 | Mainly due to prepayment for the pay license of Kuaijietong |
| Total liabilities | 1,638,379.34 | 52.83 | 1,517,541.78 | 52.78 | 7.96 | |
| Short-term borrowings | 94,273.61 | 3.04 | 125,717.94 | 4.37 | -25.01 | |
| Accounts payable | 49,336.04 | 1.59 | 63,646.38 | 2.21 | -22.48 | |
| Advances from customers | 15,356.63 | 0.50 | 11,275.29 | 0.39 | 36.20 | Mainly due to the increase in advance rent of Business Center and others |
| Contract liabilities | 405,841.92 | 13.09 | 244,221.18 | 8.49 | 66.18 | Mainly due to the growth of the product sales and the increase in advances from customers |
| Payroll payable | 24,396.48 | 0.79 | 16,149.90 | 0.56 | 51.06 | Mainly due to calculation by gross wanges method |
| Tax payable | 55,949.65 | 1.80 | 49,540.05 | 1.72 | 12.94 | |
| Other | 190,874.28 | 6.15 | 164,634.5 | 5.73 | 15.94 |
| payables | 6 | |||||
| Non-current liabilities due within one year | 366,424.19 | 11.81 | 131,502.66 | 4.57 | 178.64 | Mainly due to the transfer-in of medium and long-term notes due within one year |
| Other current liabilities | 308,138.48 | 9.94 | 302,360.80 | 10.52 | 1.91 | |
| Long-term borrowings | 77,125.00 | 2.49 | 28,200.00 | 0.98 | 173.49 | Mainly due to new long-term borrowings |
| Bonds payable | - | - | 355,216.17 | 12.36 | -100.00 | Mainly due to the transfer-out of medium and long-term notes due within one year |
| Lease liabilities | 20,594.27 | 0.66 | - | - | Not applicable | Mainly due to the transfer-in because of the adjustment under the new standard for lease |
| Estimated liabilities | 11,062.03 | 0.36 | 11,062.03 | 0.38 | - | |
| Deferred income | 7,817.01 | 0.25 | 2,654.53 | 0.09 | 194.48 | Mainly due to receiving the start-work reward of comprehensive Bonded Zone |
| Deferred income tax liabilities | 11,189.75 | 0.36 | 11,360.29 | 0.40 | -1.50 |
Other statementsNone
2. Overseas assets
√Applicable □Not Applicable
(1). Scale of assets
Among them: offshore assets was RMB 636 million, accounting for 2.05% of the total assets.
(2). Explanation one the high proportion of offshore assets
□Applicable √Not Applicable
3. Encumbrances on major assets as of the end of the reporting period
√Applicable □Not Applicable
Unit: RMB
| Item | 2021 | 2020 |
| Monetary capital | 60.78 | 60.58 |
| Long-term equity investment | 102,918,559.00 | 102,918,559.00 |
| Other non-current financial assets | 636,870,392.09 | 617,511,352.00 |
| Total | 739,789,011.87 | 720,429,971.58 |
1. As of December 31, 2021, bank deposits with a book value of RMB 60.78 (December 31,2020: RMB 60.58) were restricted for ownership or use rights due to being as security deposits forobtaining commercial housing mortgage loan.
2. As of June 30, 2021, long-term equity investments with a book value of RMB102,918,559.00 (December 31, 2020: RMB 102,918,559.00) and other non-current assets of RMB636,870,392.09 (December 31, 2020: RMB 617,511,352.00) were frozen by Shanghai MunicipalPublic Security Bureau.
4. Other statements
□Applicable √Not Applicable
(iv) Analysis of business information of industry
√Applicable □Not Applicable
For details, please refer to "II. The situation of the industry of the Company" in this section
(v) Analysis of investmentsOverview of external equity investment
√Applicable □Not Applicable
At the end of December 2021, the external investment amount was RMB 8,014,837,600(including trading financial assets of RMB 75,375,100, investment in other equity instruments ofRMB 642,188,000, other non-current financial assets of RMB 1,524,819,300, and long-term equityinvestment of RMB 5,772,455,200) , an increase of 32.02%, or RMB 1,944,045,800, compared withRMB 6,070,791,800 at the end of the previous year (including trading financial assets of RMB51,712,700, investment in other equity instruments of RMB 662,256,300, other non-current financialassets of RMB 1,523,925,300, and long-term equity investment of RMB 3,832,897,500). The mainchanges are as follows:
I. Long-term equity investment during the reporting period increased by RMB 1,939,557,700YoY, mainly due to:
1. During the reporting period, the new long-term equity investment was RMB 1,496,216,800,including RMB 1.225 billion for Yiwu China Commodities City Property Development Co., Ltd. ,RMB 50 million for Yiwu Huishang Redbud Phase II Investment Partnership (LLP), RMB 44.7918million for JEBEL ALI FREE ZONE TRADER MARKET DEVELOPMENT AND OPERATION FZCO,RMB 17.85 million for Yiwu Digital Port Technology Co., Ltd., RMB 1.075 million for ZhejiangYixinou Supply Chain Management Co., Ltd., and RMB 150 million for Yiwu Hongyi EquityInvestment Foundation Partnership and RMB 7.5 million for Yiwu Meipingshu Supply ChainManagement Co., Ltd.
2. Net income from long-term equity investment by equity method of RMB 599,180,300,including recovered equity investment from Huishang Redbud of RMB 17,223,600, distributeddividend form Binjiang Shangbo of RMB 1,372,000, equity dividend from Huishang Redbud of RMB5,909,200 and other change in equity of Meipingshu of RMB 4,493,400.
II. During the reporting period, the investment in other equity instruments decreased by RMB
20.0683 million year-on-year, due to the change in fair value of Shenwan Hongyuan Group Co., Ltd.during the reporting period for RMB -20.0683 million.
III. During the reporting period, the trading financial assets increased by RMB 23.6624 millionyear-on-year, including, an increase of RMB 25 million for purchase of bank wealth managementproducts, the gains and losses for changes in fair value of Orient International Ventures Co., Ltd.during the reporting period of RMB -1.3325 million, and an decrease of RMB 5,100 due to selling ofsubscribed new stocks.
IV. During the reporting period, other non-current financial assets increased by RMB 894,000year-on-year, including: RMB 40 million for Suzhou Xiangzhong Venture Capital Partnership (LLP),RMB 1 million for Quanzhou Huayun Tiancheng E-commerce Co., Ltd. recovered investment ofRMB 3.1865 million from Suzhou Yiyun Venture Capital Center (LLP), recovered investment ofRMB 7.2012 million from Jiaxing Zhehua Zijin Investment Partnership (LLP), and recoveredinvestment of RMB 38.2822 million from Beijing Redbud Huaron Equity Investment Co.Ltd., andincrease of RMB 8.5639 million for the gains and losses for changes in fair value.
The main investment is as follows:
Unit: RMB10,000
| Target | Main business | Cost of investment | Book value at the end of December 2021 | Shareholding ratio (%) |
| Yiwu Shanglv Investment Development Co., Ltd. | Industry investment, investment management (excluding financial businesses such as securities and futures), property service, design, production and agency of domestic advertising, operation and management of parking garages, marketing planning, operation and management consulting, operation and management of shopping malls and business management consulting | 39,200.00 | 38,366.84 | 49.00 |
| Yiwu Rongshang Property Co., Ltd. | Real estate development and operation, landscape engineering and decoration engineering | 5,000.00 | 21,738.75 | 49.00 |
| Yiwu Chuangcheng Property Co., Ltd. | Real estate development and sale; lease of proprietary houses; real estate brokerage service; interior decoration service; and landscaping service | 2,000.00 | 8,806.33 | 24.00 |
| Hangzhou Binjiang Shangbo Property Development Co., Ltd. | Real estate development and operation | 2,450.00 | 3,447.62 | 49.00 |
| Yiwu Huishang Micro-finance Co., Ltd. | Micro-loans in Yiwu, and consulting services in connection with the development, management and finance for small-sized enterprises | 12,420.00 | 8,282.47 | 23.00 |
| Zhejiang Chouzhou Financial Lease Co., Ltd. | Financial lease service; transfer of financial lease assets; fixed-income securities investment; acceptance of lessees’ lease margin; absorption of time deposit with a term no shorter than three months from non-bank shareholders; inter-financial institutional lending; borrowing from financial institutions; overseas borrowing; sale and disposal of leased items; and economic consulting | 26,000.00 | 42,602.08 | 26.00 |
| Yiwu China Commodities City Fuxing Investment Center (limited partnership) | Equity investment, investment management and investment consulting | 10,291.86 | 10,291.86 | 49.90 |
| Yiwu Huishang Redbud Equity Investment Co., Ltd. | Equity investment and related consulting services (without approval of the industry regulatory authorities such as the finance regulatory authority, the Company warrants that it will not be engaged in the absorption of deposits, financial guarantee, agency wealth management, fundraising (financing) from the public and other financial businesses) | 3,277.64 | 7,099.70 | 10.42 |
| Yiwu Huishang Redbud Phase II Investment Partnership (limited partnership) | Investment management, asset management (excluding the assets subject to special state regulation such as state-owned assets) (the above business scope excludes financial businesses such as securities and futures; and without approval of the industry regulatory authorities such as the finance regulatory authority, the Company shall not be engaged in the absorption of deposits, financial guarantee, agency wealth management, fundraising (financing) from the public and other financial businesses) | 10,000.00 | 10,663.80 | 9.43 |
| Yiwu Meipinshu Supply Chain Management Co., Ltd. | Supply chain management service, software development, and business management consulting | 2,570.14 | 2,737.09 | 22.11 |
| Hangzhou MicroAnts Co., Ltd. | Services: technology development, technical consulting, technical services and achievements transfer of computer hardware and software and network information technologies and webpage design; wholesale and retail: computer software | 1,275.00 | 520.05 | 49.04 |
| Yiwu Hongyi Equity Investment Fund Partnership (limited partnership) | Investment management, equity investment, asset management and investment consulting (without approval of the industry regulatory authorities such as the finance regulatory authority, the Company shall not be engaged in the absorption of deposits, financial guarantee, agency wealth management, fundraising (financing) from the public and other financial businesses) | 84,000.00 | 88,787.23 | 49.98 |
| Shenwan Hongyuan Group Co., Ltd. | Securities brokerage, securities investment consulting and securities underwriting & sponsorship | 55,362.54 | 64,218.80 | 0.501 |
| Beijing Yiyun Clean Technology Venture Capital Co., Ltd. | Venture capital, agency of other VC institutions or individuals’ VC business | 1,891.82 | 288.00 | 15.00 |
| Shenzhen Tiantu Investment Management Co., Ltd. | PE investment management in the consumer goods industry | 11,438.62 | 4,788.21 | 1.536 |
| Beijing Redbud Huarong Equity Investment Partnership | Asset management, investment management and investment consulting | 6,171.78 | 13,846.69 | 12.36 |
| Mashang Consumer Finance Co., Ltd. | Granting of personal consumption loans; acceptance of deposits from shareholders’ domestic subsidiaries and domestic shareholders; lending to domestic financial institutions; issuance of financial bonds upon approval; inter-financial institution lending in China; consumption finance-related consulting; agency sale of insurance products related to consumption loans; and fixed-income securities investment | 3,000.00 | 4,854.75 | 0.75 |
| Jiaxing Zhehua Redbud Investment Partnership (limited partnership) | Industry investment, venture capital, investment management, business management, social and economic consulting. (Operating activities subject to approval in accordance with laws shall only be conducted after approval from related authority) [it shall not be engaged in the absorption of deposits, financial guarantee, agency wealth management, fundraising (financing) from the public and other financial businesses] | 8,152.97 | 11,562.84 | 17.51 |
| Nantong Redbud Huatong Equity Investment Partnership (limited partnership) | Equity investment; investment consulting; and investment management | 20,000.00 | 25,871.01 | 21.05 |
| Yiwu Shangfu Chuangzhi Investment Center (limited partnership) | Asset management, investment management, and investment consulting service | 61,751.14 | 63,687.04 | 74.9982 |
| Yiwu Shanfeng Investment Partnership (limited partnership) | Investment management, asset management and investment consulting | 2,600.00 | 2,388.19 | 56.40 |
| Fujian Zongteng Network Co., Ltd. | Network information technology service; computer system integration service; development and technical service of computer hardware and software; wholesale, agency purchase and agency sale of maternal and infant products; online operation of electronic products and components and accessories thereof, household supplies and components and accessories thereof, and outdoor goods and components and accessories thereof; market research; business management consulting; enterprise marketing planning; international freight forwarding; and domestic trade agency service; and foreign trade | 3,000.00 | 11,151.71 | 0.6863 |
| Oriental International Entrepreneurship Co., Ltd. | Food business; self-operated and agent for the import and export of products and technologies other than those that are uniformly organized or approved by the state, "three forms of OEM and compensation trades" and processing of imported materials, development, production, and sales of biological, pharmaceutical and chemical products, international freight forwarding agent, industrial and high-tech industry investment, counter trade, transit trade and service trade, sales: clothing and apparel, shoes and hats, knitwear, leather products, luggage and bags, daily necessities; the second-category medical devices sales. | 5,000.00 | 5,037.36 | 0.72 |
| Yiwu Guoshen Shangbo Property Co., Ltd. | Real estate development, sale and lease; real estate brokerage service, interior decoration service; and landscaping service | 2,000.00 | 2,416.65 | 49.00 |
| Yiwu Digital Port Technology Co., Ltd. | Communication equipment repair; communication equipment sales; communication equipment manufacturing; computer and communication equipment leasing; information technology equipment sales; computer software and hardware and auxiliary equipment wholesale; computer software and hardware and auxiliary equipment retail; information consulting services (excluding licensing information consulting services) ; socio-economic consulting services; advertising design, agency; advertising production; advertising publishing (excluding channels such as radio, television, newspaper publishing units); technical services, technology development, technology consulting, technology exchange, technology transfer, technology promotion; software development; sales of chemical product (excluding licensed chemical products); business agent services; general goods warehousing services (excluding hazardous chemicals and other items that require license approval) | 2,550.00 | 2,463.91 | 51.00 |
| Yiwu China Commodities City Property Development Co., Ltd. | Real estate development, sales, leasing (used together with valid qualification certificates), real estate brokerage services, interior decoration; landscaping | 271,854.77 | 275,693.84 | 49.00 |
| Pujiang Lvgu Property Co., Ltd. | Real estate development, sales, leasing and property management | 37,365.79 | 45,928.14 | 49.00 |
| Yiwu Shanyue Equity Investment Partnership (limited partnership) | Equity investment; equity investment fund management, investment consulting, and operation and management of state-owned assets | 2,000.00 | 1,689.66 | 39.60 |
| Jebel Ali Free Zone Trader Market Development and Operation FZCO | Lease and management of proprietary properties; and lease and management of the properties owned by others | 7,350.28 | 6,415.00 | 30.00 |
| Suzhou Xiangzhong Venture Capital Partnership (Limited Partnership) | Venture capital (limited to investment in unlisted enterprises); Equity investment | 4,000.00 | 4,042.17 | 10.259 |
1. Major equity investments
√Applicable □Not Applicable
| Target | Main business | Actual investment amount during the reporting period (RMB10,000) | Percentage in total equity in the invested project By the end of the reporting period (%) | Remarks |
| Yiwu China Commodities City Property Development Co., Ltd. | Real estate development, sales, leasing (used together with valid qualification certificates), real estate brokerage services, interior decoration; landscaping | 122,500.00 | 49.00 | The subscribed capital was RMB 2.45 billion, and as of the end of the reporting period, the actual capital contributed was RMB 2.45 billion |
| Yiwu Hongyi Equity Investment Fund Partnership (limited partnership) | Investment management, equity investment, asset management and investment consulting (without approval of the industry regulatory authorities such as the finance regulatory authority, the Company shall not be engaged in the absorption of deposits, financial guarantee, agency wealth management, fundraising (financing) from the public and other financial businesses) | 15,000.00 | 49.98 | The subscribed capital was RMB 10 billion, and as of the end of the reporting period, the actual capital contributed was RMB 840 million |
| Yiwu Huishang Redbud Phase II Investment Partnership (limited partnership) | Investment management, asset management (excluding the assets subject to special state regulation such as state-owned assets) (the above business scope excludes financial businesses such as securities and futures; and without approval of the industry regulatory authorities such as the finance regulatory authority, the Company shall not be engaged in the absorption of deposits, financial guarantee, agency wealth management, fundraising (financing) from the public and other financial businesses) | 5,000.00 | 9.43 | The subscribed capital was RMB 100 million, and as of the end of the reporting period, the actual capital contributed was RMB 100 million |
| Jebel Ali Free Zone Trader Market Development and Operation FZCO | Lease and management of proprietary properties; and lease and management of the properties owned by others | 4,479.18 | 30 |
The subscribedcapital was AED
50.40 million, and as
of the end of thereporting period, theactual capitalcontributed was AED
40.50 million
| Suzhou Xiangzhong Venture Capital Partnership (Limited Partnership) | Venture capital (limited to investment in unlisted enterprises); Equity investment | 4,000.00 | 8.00 | The subscribed capital was RMB 200 million, and as of the end of the reporting period, the actual capital contributed was RMB 40 million |
| Yiwu Digital Port Technology Co., Ltd. | Communication equipment repair; communication equipment sales; communication equipment manufacturing; computer and communication equipment leasing; information technology equipment sales; computer software and hardware and auxiliary equipment wholesale; computer software and hardware and auxiliary equipment retail; information consulting services (excluding licensing information consulting services) ; socio-economic consulting services; advertising design, agency; advertising production; advertising publishing (excluding channels such as radio, television, newspaper publishing units); technical services, technology development, technology consulting, technology exchange, technology transfer, technology promotion; software development; sales of chemical product (excluding licensed chemical products); business agent services; general goods warehousing services (excluding hazardous chemicals and other items that require license approval) | 1,785.00 | 51.00 |
The subscribedcapital was RMB
25.50 million, and as
of the end of thereporting period, theactual capitalcontributed wasRMB 25.50 million
2. Major non-equity investments
√Applicable □Not Applicable
Unit: RMB10,000
| Item | Project amount | Progress | Investmet amount in current period | Accumulative invested amount |
| West Yiwu International Means of Production Market Auxiliary Project | 133,916.00 | The underground space and office building have been delivered, the hotel decoration has been completed, and the acception of fire fighting equipment has not been completed | 4,625.49 | 100,733.97 |
| Haicheng Yiwu China Commodities City Commerce Phase I Project—Hotel Project | 180,000.00 | The main work is under construction | - | 3,229.05 |
| Phase I Project of Yiwu Integrated Free Trade Zone | 624,250.00 | Construction of BD warehouse and customs seperation net has been completed, installment of refrigeration houses of D3 and D6 was under construction, 83% of the underground space of south zone project of the import market has been completed, and the contractor for the north zone has started construction | 90,342.12 | 140,921.35 |
| East Parking Building Project of Zone 2 of Yiwu International Trade City | 60,706.00 | The main work has been basically completed, 60% of the outdoor ancillary pipelines on the south side and one the north side have been completed, and 90% of the decoration of the first and second floors has been completed. | 26,875.31 | 35,548.60 |
| Yiwu Digital Trade Industrial Park | 39,579.00 | The main work for basement has been completed, and 50% of the main work for first and second floors has been completed | 6,007.08 | 6,007.08 |
3. Financial assets measured with fair value
√Applicable □Not Applicable
Unit: RMB10,000
| Name | Initial investment cost | Opening book value | Closing book value | Gains or losses during the reporting period | Accounting item | Source of funds |
| Jiangsu Times Knitting Technology Co., Ltd. | 0.15 | - | 0.15 | - | Held-for-trading financial assets | Self-owned funds |
| Wealth management products | - | - | 2,500.00 | - | Held-for-trading financial assets | Self-owned funds |
| Oriental International Entrepreneurship Co., Ltd. | 5,000.00 | 5,170.61 | 5,037.36 | -75.34 | Held-for-trading financial assets | Self-owned funds |
| Shenyin & Wanguo Securities Co., Ltd. | 55,362.54 | 66,225.63 | 64,218.80 | 1254.27 | Other equity instruments investment | Self-owned funds |
| Jiaxing Zhehua Redbud Investment Partnership (limited partnership) | 10,000.00 | 12,016.76 | 11,562.84 | 561.66 | Other non-current financial assets | Self-owned funds |
| Beijing Redbud Huarong Equity Investment Co., Ltd. | 10,000.00 | 17,557.86 | 13,846.69 | 1,774.12 | Other non-current financial assets | Self-owned funds |
| Nantong Redbud Huatong Equity Investment Partnership (limited partnership) | 20,000.00 | 25,484.32 | 25,871.01 | 386.70 | Other non-current financial assets | Self-owned funds |
| Beijing Wudaokou Education Technology Co., Ltd. | 500.00 | 61.64 | 59.38 | -2.25 | Other non-current financial assets | Self-owned funds |
| Zhejiang Yiwu Tap Water Co., Ltd. | 100.00 | 2,320.60 | 3,064.89 | 817.19 | Other non-current financial assets | Self-owned funds |
| Yiwu Water Resources Development Co., Ltd. | 200.00 | 1,510.00 | 1,860.00 | 350.00 | Other non-current financial assets | Self-owned funds |
| Suzhou Yiyun Venture Capital Center (limited partnership) | 4,000.00 | 12,351.95 | 2,957.37 | -9,075.93 | Other non-current financial assets | Self-owned funds |
| Beijing Yiyun Clean Technology Venture Capital Co., Ltd. | 6,091.82 | 360.00 | 288.00 | -72.00 | Other non-current financial assets | Self-owned funds |
| Mashang Consumer Finance Co., Ltd. | 3,000.00 | 5,167.50 | 4,854.75 | -312.75 | Other non-current financial assets | Self-owned funds |
| Shenzhen Tiantu Investment Management Co., Ltd. | 11,802.00 | 4,812.23 | 4,788.21 | -24.02 | Other non-current financial assets | Self-owned funds |
| Yiwu Shanfeng Investment Partnership (limited partnership) | 2,600.00 | 2,600.00 | 2,388.19 | -211.81 | Other non-current financial assets | Self-owned funds |
| Cheng Jian Bao (Beijing) Consulting Services Co., Ltd. | 150.00 | 150.00 | 150.00 | - | Other non-current financial assets | Self-owned funds |
| Yiwu Shanyue Equity Investment Partnership (limited partnership) | 2,000.00 | 2,000.00 | 1,689.66 | -310.34 | Other non-current financial assets | Self-owned funds |
| Yiwu Smart Transport Co., Ltd. | 120.00 | 120.00 | 120.00 | - | Other non-current financial assets | Self-owned funds |
| Fujian Zongteng Network Co., Ltd. | 3,000.00 | 4,128.53 | 11,151.71 | 7,023.18 | Other non-current financial assets | Self-owned funds |
| Yiwu Shangfu Chuangzhi Investment Center (limited partnership) | 61,751.14 | 61,751.14 | 63,687.04 | 1,935.90 | Other non-current financial assets | Self-owned funds |
| Suzhou Xiangzhong Venture Capital Partnership (Limited Partnership) | 4,000.00 | - | 4,042.17 | 42.17 | Other non-current financial assets | Self-owned funds |
| Quanzhou Huayun Tiancheng E-commerce Co., Ltd. | 100.00 | - | 100.00 | - | Other non-current financial assets | Self-owned funds |
4. Specific progress of major asset restructurings during the report period
□Applicable √Not Applicable
(vi) Major sales of assets and equity
□Applicable √Not Applicable
(vii) Analysis of major subsidiaries and associates
√Applicable □Not Applicable
Unit: RMB10,000
| company name | Business | Registered capital | Total assets | Net assets | Net profits |
| Yiwu Shangbo Property Co., Ltd. | Real estate development and sale | 30,000.00 | 37,435.89 | 34,399.30 | -463.59 |
| Yiwu Commodities City Gonglian Property Co., Ltd. | Real estate development and sale | 20,000.00 | 16,438.80 | 15,869.41 | 31.56 |
| Yiwu China Commodities City Information Technology Co., Ltd. | R&D of computer and multimedia software | 5,000.00 | 9,091.41 | 5,280.63 | 297.86 |
| Zhejiang Yiwugou E-commerce Co., Ltd. | Computer software, multimedia technologies, computer network and application, and wholesale & retail | 10,000.00 | 12,799.94 | 9,146.40 | 659.45 |
| Yiwu China Commodities City Payment Network Technology Co., Ltd. | R&D of computer and multimedia software | 15,000.00 | 12,150.37 | 12,079.28 | -207.35 |
| Yiwu China Commodities City Logistics and Warehousing Co., Ltd. | Ordinary cargo transport and goods warehousing | 10,000.00 | 5,757.70 | 4,402.28 | -450.52 |
| Yiwu China Commodities City Supply Chain Management Co., Ltd. | Supply chain management service | 10,000.00 | 20,518.22 | 5,920.57 | -1,600.48 |
| Yiwu China Commodities City Import and Export Co., Ltd. | Domestic trade and international trade | 10,000.00 | 101,833.20 | 2,394.38 | -2,708.45 |
| Yiwu China Commodities City Financial Holdings Co., Ltd. | Enterprise free capital investment, asset management, investment consulting services, investment management services | 400,000.00 | 261,215.67 | 248,251.50 | 14,068.48 |
| Yiwu China Commodities City Tourism Development Co., Ltd. | Development of tourism resources and tourism projects; domestic tourism business, inbound tourism business; tourism information consulting; and wholesale of fruits, vegetables, aquatic products and primary edible agricultural products | 10,000.00 | 13,975.64 | 8,673.59 | -338.25 |
| Yiwu China Commodities City Overseas Investment and Development Co., Ltd. | Overseas industry investment, and construction and operation of overseas shopping malls | 10,000.00 | 25,073.63 | 8,461.32 | -659.79 |
| Yiwu Shanglv Investment Development Co., Ltd. | Industry investment, investment management, property service, operation and management of parking garages, business marketing planning, operation and management consulting, and operation and management of shopping malls | 80,000.00 | 142,761.41 | 81,538.15 | 3,543.88 |
| Yiwu China Commodities City Property Development Co., Ltd. | Real estate development and sale | 500,000.00 | 1,535,632.15 | 570,679.62 | 14,621.40 |
| Pujiang Lvgu Property Co., Ltd. | Real estate development and sale | 70,000.00 | 123,263.12 | 91,806.52 | 16,246.73 |
| Zhejiang Huajie Investment and Development Co., Ltd. | Industry investment, investment management, investment consulting, business information consulting, and asset management services | 50,000.00 | 8,315.07 | 8,217.15 | -337.66 |
| Yiwu China Commodities City Big Data Co., Ltd. | Internet data services; professional design services; intelligent control system integration; computer information technology development, technical consulting, technical services, technology transfer, etc. | 10,000.00 | 27,354.40 | 8,610.84 | 2,747.00 |
| Haicheng Yiwu China Commodities City Investment Development Co., Ltd. | Industry investment, investment management, property service, market development and operation, market auxiliary service, real estate development, sale and lease, design, production and agency of domestic advertising, and operation and management of parking garages | 60,000.00 | 224,577.91 | -85,986.09 | -14,685.04 |
| Yiwu Comprehensive Bonded Zone Operation and Management Co., Ltd. | Property management; low-temperature storage; general goods warehousing services (excluding hazardous chemicals and other items that require license approval); information consulting services; warehousing equipment rental services, etc. | 10,000.00 | 4,250.84 | 545.15 | -1,097.12 |
| BETTER SILK ROAD RWANDA Ltd | Container handling; land transport-related services; and land transport supporting activities-related business | RF27,000 | 85.35 | -118.98 | -88.06 |
| Hangzhou Binjiang Shangbo Property Development Co., Ltd. | Real estate development and sale | 5,000.00 | 11,071.23 | 7,807.93 | 3,566.03 |
| Yiwu Rongshang Property Co., Ltd. | Real estate development and sale | 10,204.08 | 572,489.20 | 44,364.80 | 39,544.26 |
| Yiwu Huishang Micro-finance Co., Ltd. | Micro loans | 54,000.00 | 36,356.87 | 36,010.74 | 1,002.29 |
| Zhejiang Chouzhou Financial Lease Co., Ltd. | Financial lease service, and transfer of financial lease assets | 100,000.00 | 1,434,774.71 | 163,854.17 | 20,984.32 |
| Yiwu Huishang Redbud Equity Investment Co., Ltd. | Equity investment and related consulting services | 49,000.00 | 77,785.77 | 68,135.31 | 10,113.63 |
| Yiwu Huishang Redbud Phase II Investment Partnership (limited partnership) | Investment management and asset management | 106,100.00 | 100,342.94 | 100,342.94 | 536.46 |
| Yiwu Hongyi Equity Investment Fund Partnership (limited partnership) | Investment management, equity investment, asset management and investment consulting | 200,100.00 | 177,701.00 | 177,663.28 | 9,749.03 |
| Jebel Ali Free Zone Trader Market Development and Operation FZCO | Lease and management of proprietary properties; and lease and management of the properties owned by others | AED 16,800.00 | 104,546.72 | 20,901.34 | -1,384.10 |
| Yiwu Guoshen Shangbo Property Co., Ltd. | Real estate development, sale and lease; real estate brokerage service, interior decoration service; and landscaping service | 4,081.63 | 1,336,782.47 | 4,931.94 | 7,409.91 |
| Yiwu Chuangcheng Property Co., Ltd. | Real estate development and sale; lease of proprietary houses; real estate brokerage service; interior decoration service; and landscaping service | 8,333.33 | 391,010.26 | 36,693.05 | 31,495.95 |
(viii) Structured entities controlled by the Company
□Applicable √Not Applicable
VI. Discussion and Analysis of the Company's Future Development(i) Industry Pattern and Trends
√Applicable □Not Applicable
1. National policies for the industry
(1) National policies
In December 2021, the General Office of the State Council issued the "Opinions on Doing aGood Job in Cross-Cycle Adjustment and Further Stabilizing Foreign Trade". From strengtheningfiscal, taxation and financial policy support, further encouraging the development of new foreigntrade formats, alleviating the pressure on foreign trade supply chains such as international logistics,and supporting key industries and key enterprises, 15 policy measures have been proposed inother aspects to ensure orders, stabilize expectations, and promote the steady development offoreign trade. In the same month, the General Office of the State Council issued the "Opinions onPromoting the Integrated Development of Domestic and Foreign Trade", making arrangements forpromoting the integration of domestic and foreign trade, forming a strong domestic market,
smoothing the domestic and international dual circulation, and promoting the realization of higher-level opening up and higher-quality development.
(2) Local policies
The 2022 Yiwu Municipal Government Work Report puts "market upgrading action" at the topof the ten major actions implemented by the city, emphasizing that "the market is the root and soulof Yiwu, and the prosperity of the market would make Yiwu prosperous. It should always be insistedthat the market should be put at the center, the city should be built around the market, andindustries should be nurtured around the market, so as to promote the continued prosperity of themarket. "In January 2022, Yiwu held the 15th session of Party Congress. The report of the sessionpointed out, "The overall requirement for the next five years is to focus on the overall goal ofbuilding a high-quality and high-level world capital of small commodities, and to compete on thethree new tracks of 'digitalization, dual circulation, and common wealth'".
2. New trends of international trade
(1) New trends of international trade
The trend of "multiple varieties, multiple batches, and small batch size" in international tradehas gradually formed. This is due to the fluctuation of upstream raw material prices and the disorderof the global supply chain. On the other hand, changes in form of downstream retail and disrtibution,development and penetration of e-commerce and changes in consumer habits have alsocontributed to the further fragmentation of international trade.
Fragmented international trade order flow requires matching fragmented contract performancecapabilities, which brings opportunities and challenges to global supply chains and corporatefulfillment capabilities. At the same time, the rise of emerging traffic-driven business flow modelsrepresented by independent websites, KOLs and live e-commerce has further increased thedemand for fragmented contract performance capabilities. The core of the long-term growth ofemerging traffic forms still depends on the contract performance side to reconstruct newconsumption by systematic operation, supply chain optimization, and reverse empowerment.
(2) Yiwu in the context of new trends
Yiwu is a key node of China's new foreign trade form, an international trade highland, ademonstration area for digital dual circulation and common prosperity, and has core resources forcross-border trade development. In the context of the new trends of international tradefragmentation and the entry into force of RCEP, the Company promoted the upgrading of the Yiwumarket from the "collection of merchants" model to the mode of "collection of merchants and goods",and led Yiwu market traders to seize the historic opportunity of the RCEP agreement taking effect,and enhance the influence of Yiwu as a "world commodity land". The entry into force of the RCEPagreement is beneficial to Yiwu, which takes the advantages of a large number of foreign buyers, acomplete range of market commodities, and a smooth internal and external logistics hub, to bettermeet the small batch and multi-frequency trade needs of foreign buyers, and uses export to drivetranshipment by "consolidation and re-export of maket purchased goods + bonded imported goods ",to further reduces the cost of enterprise logistics and customs declaration, promotes the integrated
development of "import, export and transhipment" of foreign trade, and help Yiwu to build adomestic and international dual-circulation strategic node and a world commodity distribution center.(ii) Development strategies of the Company
√Applicable □Not Applicable
At the Fifth China-Africa Entrepreneurs Conference, General Secretary Xi Jinping called Yiwuthe world "Capital of Small Commodities", pointing out the direction for the development of themarket and the Company. With the historical mission of building the world "Capital of SmallCommodities" with high quality and high level, the Company has put forward the developmentstrategy of "taking the market as the main business, taking the digit as the link, and taking platformas the support to build a comprehensive service provider for international trade", to build a realeconomy ecology with the market as the core and a digital economy ecology with the chinagoodsplatform as the core. The Company connects the Company's market, logistics, trade, finance andother sectors with digital links to form a full-scene, full-link, and diversified service system, to reducethe cost of small commodity trade characterized by "multiple varieties, multiple batches, and smallbatch size". and improve convenience level of trade. The Company drives the market trade systemof "online-offline integration, import-export linkage, cross-border communication, and co-prosperityof domestic trade and foreign trade" to develop into depth, to serve dual circulation of domesticcirculation and international circulation in the historical context of common prosperity.(iii) Business plan
√Applicable □Not Applicable
2022 is the 40th anniversary of the construction of Yiwu market and also the 44th anniversaryof China's reform and opening-up. From "exchanging chicken feather for sugar" by wanderingaround streets to world "Capital of Small Commodities", in lack of own resources, Yiwu hasconnected itself to a big world with small commodities, driving surrounding industries' prosperousdevelopment, leading entrepreneurs to commom prosperity, and leaving a distinct mark on themilestone of China's reform and opening-up. Yiwu has grown up with the support of China's reformand opening-up and in the mode of "globalization". In continuous reform and iteration, "taste oftruth" and Yiwu's development experience, together with Yiwu' unique business gene, havesedimented, fermented and developed.
In 2022, the Company will continue to focus on the strategic goal of building the world "Capitalof Small Commodities" with high quality to speed up the market's innovative development and theCompany's transformation and upgrading. Facing the opportunities and challenges brought by thefragmentation trend of international trade to the contract performance side, as well as theopportunity of the entry into force of RCEP, the Company will combine its own resources and thecharacteristics of the market procurement trade mode to focus on opening up the whole link of thesupply chain for export, invest in the construction of RCEP-related links, grab the increment,promote the market's development for domestic and foreign trades in parallel, and enhance theCompany's core competitiveness and profitability.
Business plan goals of 2022: based on 2019 performance, operating revenue growth rate is notless than 120%; earnings per share is not less than RMB 0.22; the above two indicators are notless than 75% of those of the Company's benchmarking enterprise or average of the industry; main
business income accounts for not less than 90% of operating income; GMV of chinagoods platform,which is the innovative business of the Company, is not less than RMB 24 billion.
1. Market operation
The Company will start the construction of the market in Zone VI of the International Trade Cityto create a new generation of market leading the global trade fashion. The Company will iterativelyupgrade the International Trade City in terms of market form, business space, hardware facilities,and service value adding, and build the International Trade City into a new trading model leadingarea, a new industry cultivation window, a new trade service gathering area, and a new businesssocial habitat. , making it a new driver for Yiwu market development and a new benchmark formarket form.The Company will speed up the construction of the Zone II east market, focus on new digitalinfrastructure such as AI assistants, smart transportation, green and low-carbon, create a newdigital market scenario integrating digital trade, service and management, and provides full life cycleservices for trade entities. The Zone II east market is scheduled to start trial operation in October2022.
2. Chinagoods platform
In 2022, the Company will focus on "market procurement 2.0" and take digital reform as anincision to realize data sharing and system connection between the chinagoods platform and thenetworked information platform. The Company will design various digital service products, andrealize the integration of the four orders of "purchase order, delivery order, customs declaration andforeign exchange settlement order" with "one order to the end", enhance the comprehensiveoperation ability and service level of the platform, and strive to build a comprehensive applicationfor trade with business flow as the core, logistics as the basis, information flow as the guider, andcapital flow as the support, to empower free trade scenarios for small commodities. By the end of2022, the Company will strive to build a full-link, full-scenario and digitalized market tradeecosystem on the chinagoods platform.
The construction of basic functions of chinagoods platform will be enhanced. The rating ofmarket taders will be improved, 2000 benchmarking traders will be cultured and 10000 core traderswill be incubated. A customer service system will be built, along with an integrity guarantee system,and online and offline resources will both be used to promote the matching of procurementdemands. The Company will create an all-media matrix, establish a value-added service systemsuch as advertising, publicity and promotion on the platform for for shops, and improve the market-oriented operation capability of the platform.
The construction of digital tade platform will be sped up. The Company will open up datachannels and improve online service functions in various links such as R&D and production, displayand transaction, warehousing and logistics, customs inspection and foreign exchange tax, paymentand settlement, and supply chain finance. As of the end of the reporting period, the Company heldthe licenses for factoring, credit investigation, small loans, and foreign currency exchange, and thedelivery procedures for the payment license was also in progress, which would form a closed loopof payment flow and information flow. Relying on the real trade background and the Internet
technology of the chinagoods platform, the Company will build a circular and ecological multi-wingrowth pole centered on factoring business, provide comprehensive Internet supply chain financialsolutions for micro, small and medium-sized enterprises in sub-sectors, and promote the intelligentdigitization of production relations and production factors in all aspects of international trade.
3. Supply chain system
The goods collection mode of "goods collection warehouse in industrial base - main logistic line- Yiwu warehouse" will be built. The Company plans to build an international digital logistics marketand the construction of phase I project has started.
The Company will promote the construction of hub facilities for foreign trade of smallcommodities. The Company will continue to invest in offshore exhibition and trade platforms suchas oversea warehouse and oversea branch market, innovate operation mode and drive the growthof foreign trade. The Company will speed up the construction of oversea warehouses owned byYiwu and warehouses in regions such as Guangxi and Yunnan ajoining RCER member states,strive to build 40 new oversea warehouses, and accumulate over 160 in 2022. In 2022, theCompany will strive to cover 15 RCEP member states with oversea warehouse digital trade hub,improve the RECP regional trade hub network, and promote high-quality development of two-waytrade.
4. Import-export trade
The Company will build a trade ecology of "All good commodities". The Company will upgradethe business models of ICMall and Yiwu Selection, integrate the product advantages of "Importedgood commodities+ Trendy domestic commodities", invest in offline retail stores, and launch the"All good commodities" chain management platform to create an online-offline O2O trade ecology.
The Company will integrate into the RCEP trade ecology, integrate the full-link resources ofimport trade, gather imported brands, commodities, and import trade ecological service enterprises,and provide a free exhibition and trade platform for global commodities. In the future, Yiwu ChinaImported Commodities City will set up more than 100 national pavilions and special productexhibition halls for imported commodities including RCEP member states, and deploy more than10,000 domestic distribution outlets for imported commodities to share and expand developmentopportunities for import.
The Company will actively explore offshore trade relying on market. Through the layout ofoverseas warehouses, overseas parks and other overseas station nodes, the Company will activelyexplore the development of offshore trade, to organize trade service providers in Yiwu, supply orprocess commodities in RCEP member states, and directly sell them to other foreign customers inregions such as Europe and the United States, creating a "world commodity land".
5. Organization and mechanism support system
The Company will promote the improvement of enterprise management effectiveness andefficiency, and effectively promote the modernization of the governance system and governancecapacity. The Company will promote the reform of mixed ownership, focus on key areas and keylinks of market transformation, and speed up the introduction of leading enterprises in the industrychain in logistics, warehousing, supply chain finance, cross-border settlement and other aspects as
strategic investors to stimulate business innovation vitality and improve the ability and level ofempowering the market. The Company will improve the authorization, assessment, and incentivemechanism, adhere to the transformation from operational control to strategic control, revise andimprove the authorization list, implement classified and hierarchical authorizations for branches andsubsidiaries, and give subordinate companies more operational autonomy. The Company willstrengthen the assessment of operating efficiency, deeply implement the classification assessmentfor operating company and management company, increase the weight of profit and revenueindicators of operating company, and explore customized assessment of innovative businesses.The Company will strengthen the application of assessment results, prudently implement theexcess profit sharing plan, and continue to implement medium- and long-term incentives such asshare option (or share) incentives and co-investment to further enhance the driving force forbusiness innovation and development. The Company will strengthen the construction of humanresources, form a benign cadre echelon, increase the market-oriented recruitment of mid-to-high-end professional talents for innovative businesses, innovate employee training and careerdevelopment mechanisms, strengthen the construction of corporate culture, and provide strongsupport in talents for market innovation and development and enterprise transformation andimprovement.(iv) Potential risks
√Applicable □Not Applicable
1. Market operation risk
Large-sized shopping malls, hypermarkets, warehouse stores and e-commerce platforms arestrong competitors in the commodities trading market. Large-sized shopping malls offer products ofreliable quality and well-known brands; hypermarkets or warehouse stores supply diversifiedproducts at low prices; e-commerce platforms provide new trading means and facilitate consumers.Purchasers or consumers may also choose to make procurement or consumption via e-commerceplatforms for convenience. Therefore, the Company may compete with other forms of business. Inaddition, affected by the rising specialized market, robust development of the industry market andrapid development of the central and western regions, the Company may also face competitionfrom other similar specialized markets.
2. Risk of insufficient reserve of talents
With the acceleration of market transformation and the expansion of the Company’s business,and with the expansion of experienced international trade, warehousing and logistics, supply chain,overseas development, information data, industrial investment, and business operations, theCompany may face the risk of insufficient reserves of professional talents and compound talents.
3. The risk of increasing external uncertainty
In the context of the normalization of epidemic prevention and control, the development ofglobal market trade is more complicated and severer than before. The global spread of theepidemic and reverse globalization are parallel, and the downward pressure on the world economyhas increased. New technologies have accelerated the birth of new opportunities, and new trademodels and new business formats have emerged. In the post-epidemic era, uncertainty will become
the greatest certainty for the development of market trade, and the global epidemic will continue fora long time, showing a repeated see-saw state. Epidemic prevention and control, internationalpolitics, and global economy are intertwined. Uncertainty, instability, and restructuring ofinternational trade will become the new normal. The Company may face the risk of increasedexternal uncertainty.
(v) Others
□Applicable √Not Applicable
VII. The Company failed to disclose and explain the reasons in accordance with thestandards due to special reasons such as non-applicable standards or state secrets andtrade secrets.
□Applicable √Not Applicable
Section IV. Corporate Governance
I. Description of corporate governance
√Applicable □Not Applicable
During the report period, in strict accordance with the Company Law, Securities Law,Guidelines for Corporate Governance of Listed Companies and the relevant provisions of the ChinaSecurities Regulatory Commission and other laws and regulations, the Company continuouslyestablishes and improves relevant systems, strives to improve the corporate governance structure,standardize operations, and operate in compliance with laws. There is no difference between thecorporate governance structure of the Company and the regulatory documents on the governanceof listed companies issued by the China Securities Regulatory Commission.(I) Shareholders and general meetings of shareholdersThe Company convenes and holds a general meeting of shareholders in strict accordance withthe Rules of Procedure for the General Meeting of Shareholders to ensure that all shareholders ofthe Company fully exercise their rights, especially those of small and medium shareholders. Inpeacetime, we earnestly receive visits and calls from shareholders to ensure the shareholders’rights to know, participate and vote on major company issues, so that shareholders can truly enjoyequal rights.(II) Controlling shareholder and the listed companyThe controlling shareholder of the Company exercised the rights of investors through thegeneral meeting of shareholders in accordance with the law, and did not directly or indirectlyintervene in the Company's decision-making and business activities beyond the general meeting ofshareholders. The Company has achieved the five independences of personnel, assets, finances,institutions and businesses. The Company's board of directors, board of supervisors and internalinstitutions can operate independently. The controlling shareholder of the Company can strictlyabide by the promise made to the Company to avoid horizontal competition. When the Companyhas connected transactions with its controlling shareholder, it strictly follows the RelatedTransaction Decision and Implementation System to ensure that the connected transactions are fairand just.(III) Directors and Board of DirectorsThe Company selects directors in strict accordance with the procedures stipulated in theArticles of Association; convenes and holds board meetings in strict accordance with the Rules ofProcedures for the Board of Directors. All directors of the Company can seriously attend the boardof directors and shareholders meetings, actively participate in training, and earnestly perform theirduties as directors. Directors can earnestly perform the duties and obligations entrusted by laws,regulations and the Company's Articles of Association, and express independent opinions andsuggestions on important company matters, so as to effectively protect the legitimate rights andinterests of shareholders. Clarified the annual report review procedures of the Audit Committee ofthe Board of Directors, and effectively played the role of each special committees.(IV) Supervisors and Board of Supervisors
During the reporting period, the Company held three meetings of Board of Supervisors, and theconvening and holding procedures of each meeting complied with the provisions of the CompanyLaw, the Articles of Association and the Rules of Procedure of the Board of Supervisors. Companysupervisors can earnestly perform their duties, supervise major company matters, supervise thelegality and compliance of the Company's directors and senior managers in performing their duties,safeguarding the legitimate rights and interests of the Company and shareholders.(V) Information disclosure and investor relationship managementAccording to the Information Disclosure Management System, the Company discloses relevantinformation truthfully, accurately, completely and in a timely manner. Investors can learn about theCompany through media promotion, telephone consultation, and company website. In addition tocompleting the mandatory periodic reports and temporary announcements disclosed by laws andregulations, the Company also actively carry out compliance and voluntary information disclosure,so that investors can have a continuous understanding of the operations that they care about, andtruly protect the shareholders' right to know.
Whether there are major differences between the corporate governance and the requirements ofthe law, administrative laws and regulations, and relevant regulations of the China SecuritiesRegulatory Commission; if there are major differences, the reasons should be explained.
□Applicable √Not Applicable
II. Specific measures for ensuring the independency of the Company's controlling
shareholder and actual controller in company assets, personnel, finance, organization,
business and others, and solutions taken after they influenced the inpendency of the
Company, the progress thereof and follow-up work plan
□Applicable √Not Applicable
Cases in which the Company's controlling shareholder, actual controller and other units controlledby them conduct business as same as or similar to that of the Company, the influence on theCompany due to major changes in horizontal competitors or horizontal competition, measures taken,progress thereof and follow-up solution plan
□Applicable √Not Applicable
III. General meeting of shareholders
| Session of meeting | Date | Designated website on which the resolution is published | Date of disclosure of the resolution | Resolution of the meeting |
| The first provisional shareholders meeting in 2021 | April 9, 2021 | www.sse.com.cn | April 10, 2021 | See the resolution notice for details |
| The second provisional shareholders meeting in 2021 | April 19, 2021 | www.sse.com.cn | April 20, 2021 | See the resolution notice for details |
| 2020 Annual General Meeting of Shareholders | May 25, 2021 | www.sse.com.cn | May 26, 2021 | See the resolution notice for details |
| The third provisional | November 4, 2021 | www.sse.com.cn | November 5, 2021 | See the resolution |
| shareholders meeting in 2021 | notice for details |
The preferred shareholders whose voting rights had been restituted requested to an extraordinarygeneral meeting of shareholders
□Applicable √Not Applicable
Statement on shareholders’ meetings
√Applicable □Not Applicable
1. The 2021 First Provisional General Meeting of Shareholders deliberated and adopted the“Proposal on By-election of Independent Directors”.
2. The 2021 Second Provisional General Meeting of Shareholders deliberated and adopted the“Proposal on Capital Increase of Participating Companies and Related Transactions”.
3. The 2020 Annual General Meeting of Shareholders deliberated and adopted “2020 Board ofDirectors Work Report”, “2020 Board of Supervisors Work Report”, “2020 Annual Report andSummary”, “2020 Final Accounts Report”, “2021 Financial Budget Report”, and “2020 ProfitDistribution Plan”, “Proposal on Renewing the Appointment of Accounting Firm”, “Proposal on theProposed Issuance of Various Debt Financing Instruments in the Coming 12 Months”.
4. The 2021 Third Provisional General Meeting of Shareholders reviewed and approved theProposal on the Redemption of Some Directors' Remuneration in 2020 and the Proposal on the By-election of Supervisors.
IV. Directors, supervisors and senior management(i) Changes in shareholding and remuneration of current and resigned directors, supervisors and senior executives during the reporting period
√Applicable □Not Applicable
Unit: 10,000 Shares
| Name | Position (Note) | Sex | Age | Start date of tenure | End date of tenure | Number of shares held at the beginning of the year | Number of shares held at the end of the year | Change in shares held during the year | Reasons for change | Total pre-tax remuneration received from the Company during the reporting period (RMB 10,000) | Remuneration received from related parties of the Company |
| ZHAO Wenge | Board chairman | Male | 55 | September 27, 2018 | 4 | 34 | 30 | Equity incentive | 49.20 | No | |
| WANG Dong | Vice Chairman and General Manager | Male | 50 | March 8, 2019 | 0 | 30 | 30 | Equity incentive | 49.20 | No | |
| WANG Chunming | Director | Male | 58 | August 27, 2019 | 0 | 0 | 0 | Yes | |||
| LI Chengqun | Director | Male | 50 | May 12, 2014 | 0 | 0 | 0 | Yes | |||
| XU Hang | Director, Secretary of the Board | Male | 48 | December 12, 2017 | 0 | 30 | 30 | Equity incentive | 41.82 | No | |
| GU Zhixu | Director | Male | 34 | December 10, 2020 | 0 | 0 | 0 | No | |||
| MA Shuzhong | Independent director | Male | 54 | August 27, 2019 | 0 | 0 | 7.2 | No | |||
| HONG Jianqiao | Independent director | Male | 56 | May 22, 2020 | 0 | 0 | 7.2 | No | |||
| JIN Yanghua | Independent director | Male | 46 | May 22, 2020 | April 9, 2021 | 0 | 0 | 0 | No | ||
| LUO Jinming | Independent director | Male | 54 | April 9, 2021 | 0 | 0 | 4.8 | No |
| JIN Xiaojia | Supervisor | Male | 34 | December 16, 2016 | 0 | 0 | 0 | Yes | |||
| WU Menghua | Supervisor | Female | 31 | March 10, 2022 | 0 | 0 | 0 | Yes | |||
| WANG Gaiying | Supervisor | Female | 42 | August 27, 2019 | February 22, 2022 | 0 | 0 | 0 | Yes | ||
| WANG Jinjian | Supervisor | Male | 50 | October 26, 2020 | 0 | 0 | 0 | Yes | |||
| FANG Min | Employee supervisor | Male | 37 | December 8, 2020 | 0 | 0 | 20.97 | No | |||
| JIN Yongsheng | Employee supervisor | Male | 44 | December 8, 2020 | 0 | 0 | 17.01 | No | |||
| JIN Gengzhong | Vice general manager | Male | 52 | September 18, 2020 | 0 | 30 | 30 | Equity incentive | 79.86 | No | |
| WU Xiubin | Vice general manager | Male | 51 | July 17, 2020 | 0 | 30 | 30 | Equity incentive | 41.82 | No | |
| ZHANG Qizhen | Vice general manager | Male | 54 | July 7, 2017 | 0 | 30 | 30 | Equity incentive | 41.82 | No | |
| GONG Chenghao | Vice general manager | Male | 42 | September 29, 2021 | 0 | 20 | 20 | Equity incentive | 37.27 | No | |
| SHOU Shengdi | Vice general manager | Male | 48 | November 4, 2021 | 0 | 0 | 0 | No | |||
| ZHU Yi | Vice general manager | Male | 42 | November 4, 2021 | 0 | 0 | 0 | No | |||
| YANG Yang | Vice general manager | Male | 39 | September 29, 2021 | 0 | 20 | 20 | Equity incentive | 34.74 | No | |
| ZHAO Difang | Financial Manager | Female | 49 | May 12, 2014 | 5.01 | 35.01 | 30 | Equity incentive | 41.82 | No | |
| WEI Gang | Vice general manager | Male | 35 | September 19, 2016 | September 29, 2021 | 0 | 30 | 30 | Equity incentive | 31.37 | No |
| ZHOU Long | Vice general manager | Male | 46 | July 3, 2020 | September 29, | 0 | 0 | 151.88 | No |
| 2021 | |||||||||||
| Total | / | / | / | / | / | 9.01 | 289.01 | 280 | / | 657.98 | / |
| Name | Main working experience |
| ZHAO Wenge | He used to be Vice Chairman and General Manager of the Company, and is currently Secretary of the Party Committee and Chairman of the Company. |
| WANG Dong | He used to be a member and vice director of the Party Committee of Yiwu SASAO, and vice director (concurrently) of the management committee of the State-owned Assets Operation Center, and is currently the vice secretary of the Company’s party committee, vice chairman and general manager. |
| WANG Chunming | He used to be Chairman of Yiwu Water Affairs Construction Group Co., Ltd., and is currently Secretary of the Party Committee and Chairman of Yiwu Market Development Group Co., Ltd. and Director of the Company. |
| LI Chengqun |
He is currently Vice Secretary of the Party Committee, Vice Chairman, General Manager and Director of Yiwu Market Development Group Co.,Ltd.
| XU Hang | He used to be general manager of the Company's securities legal affairs department, and representative of securities affairs of the Company's, and is currently a director and the secretary of the board of the Company. |
| GU Zhixu | He used to be the project manager of Business Division 4 of Tianjian Accounting Firm, the business manager of Investment Division I of Zhejiang Financial Holding Investment Management Co., Ltd., the senior financial manager of the Planning and Finance Department of Zhejiang Financial Holding Co., Ltd., and the senior financial manager of the Planning and Finance Department of Zhejiang Financial Development Co., Ltd., and is currently assistant to the director of the Comprehensive Office of Zhejiang Finance Development Co., Ltd. and director of the Company. |
| MA Shuzhong | He's now a professor of Zhejiang University, and an independent director of the Company and Silan Microelectronics Co., Ltd. |
| HONG Jianqiao | He is currently the dean of the Accounting Department of the School of Management of Fudan University, and concurrently serves as an independent director of the Company, Laiyifen, Jinjiang Corporation, China Tianying and Boqian New Materials. |
| LUO Jinming | He is currently the Secretary of the Party Committee of the Accounting School of Zhejiang Gongshang University, and concurrently serves as an independent director of the Company, Hangxiao Steel Structure, and Riyue Co., Ltd. |
| JIN Xiaojia | He used to be the accounting director of the Finance Department of Yiwu Communications Investment and Construction Group, and is currently a supervisor and chairman of the Board of Supervisors of the Company. |
| WU Menghua | She used to be a supervisor of Yiwu Market Development Group Co., Ltd., concurrently a supervisor of Yiwu State-owned Capital Operation Co., Ltd. and a supervisor of Yiwu Industrial Investment Development Group Co., Ltd., and currently serves as a supervisor of the Company. |
| WANG Gaiying | She used to be the project manager of the audit department of Zhejiang New Century Certified Public Accountants, and is currently a full-time supervisor of the Supervisor Service Center of the State-owned Assets Supervision and Administration Office of Yiwu City. |
| WANG | He used to be the vice general manager of Yiwu China Commodity City Property Development Co., Ltd., and is currently the general manager |
| Jinjian | and company supervisor of Yiwu China Commodity City Property Development Co., Ltd. |
| FANG Min | He used to be a business commissioner of the Company’s human resources department (party construction office), and currently serves as vice general manager of the Company’s human resources department (party construction office) and employee supervisor of the Company. |
| JIN Yongsheng | He used to be the head of internal control of the Company's supervision and audit department, the manager of the financial department of the Company's Yawu Expo Hotel, and the manager of the financial department of the Company's Ocean Hotel. He is currently the head of internal audit of the Company's legal audit department and an employee supervisor of the Company. |
| JIN Gengzhong | He used to be the Vice General Manager of the Party Leadership Group of Zhejiang Huajie Investment Development Co., Ltd., and the Vice General Manager of Europe Huajie Development Co., Ltd. He is currently a member of the Company partty committee and the vice general manager of the Company. |
| WU Xiubin | He used to be a member of the party committee and vice general manager of Yiwu Construction Investment Group Co., Ltd., and is currently a member of the party committee and vice general manager of the Company. |
| ZHANG Qizhen | He used to be the general manager and marketing director of the Company's marketing department, and is currently a member of the party committee and vice general manager of the Company. |
| GONG Chenghao | He used to be the general manager of Yiwu China Commodity City Information Technology Co., Ltd., and the general manager of Yiwu China Commodity City Supply Chain Management Co., Ltd., and is currently a member of the party committee and vice general manager of the Company. |
| SHOU Shengdi | He used to be a member of the Party Committee of Zhejiang Yiwu Municipal Bureau of Foreign Trade and Economic Cooperation, a member of the Party Committee and Vice Director of Zhejiang Yiwu City Commerce Bureau, and is currently a member of the party committee and vice general manager of the Company. |
| ZHU Yi | He used to be the Vice Director of the Office of the Comprehensive Deepening Reform Committee of the Yiwu Municipal Committee of the Communist Party of China, and is currently a member of the party committee and vice general manager of the Company. |
| YANG Yang | He used to be the general manager of Zhejiang Yiwu China Commodity City Imported Commodity Market Branch, the general manager of Zhejiang Yiwu China Commodity City Import and Export Co., Ltd., and is currently a vice general manager of the Company. |
| ZHAO Difang | He used to be the general manager of the Company's financial department and is currently the head in finance of the Company. |
| WEI Gang | He used to be a vice general manager of the Company, and resigned from vice general manager of the Company on September 29, 2021, and have not held other positions in the Company since then. |
| ZHOU Long | He used to be a vice general manager of the Company, and resigned from vice general manager of the Company on September 29, 2021, and have not held other positions in the Company since then. |
Statement on other matters
√Applicable □Not Applicable
1. The remuneration received by some of the Company's directors and executives is the pre-paid remuneration for 2021, and the actual remuneration will bedetermined after the completion of relevant assessments and the implementation of relevant procedures.
2. Fang Min, and Jin Yongsheng are the employee representative supervisors, and the remuneration listed in the table is the total remuneration receivedafter the annual appraisal based on the position in the Company.
(ii) Appointments of current and resigned directors, supervisors and senior executivesduring the reporting period
1. Position in shareholder units
√Applicable □Not Applicable
| Name of incumbent | Name of shareholder unit | Positions held in shareholder units | Start date of tenure | Term end date | |
| ZHAO Wenge | CCCH | Board Chairman, general manager | 2019 | ||
| WANG Dong | CCCH | Director | 2021 | ||
| WANG Chunming | MDG | Board Chairman | 2019 | ||
| LI Chengqun | MDG | Vice Chairman and General Manager | 2014 | ||
| GU Zhixu | Zhejiang Provincial Finance Development Ltd. | Comprehensive Office | 2021 | ||
| JIN Xiaojia | Yiwu State-owned Assets and State-owned Enterprise Development Service Center | Assigned full-time supervisor | |||
| WANG Gaiying | Yiwu State-owned Assets and State-owned Enterprise Development Service Center | Assigned full-time supervisor | |||
| WU Menghua | Yiwu State-owned Assets and State-owned Enterprise Development Service Center | Assigned full-time supervisor | |||
| Description of the position of the shareholder unit | None | ||||
2. Position in other units
√Applicable □Not Applicable
| Name of incumbent | Names of other units | Positions held in other units | Start date of tenure | Term end date |
| XU Hang | Yiwu China Commodities City Investment Management Co., Ltd. | Director | March 2017 | |
| MA Shuzhong | Hangzhou Silan Microelectronics Co., Ltd. | Independent director | July 2016 | |
| HONG Jianqiao | Shanghai Laiyifen Co., Ltd. | Independent director | ||
| HONG Jianqiao | Shanghai Jinjiang International Industrial Investment Co., Ltd. | Independent director | ||
| HONG Jianqiao | China Tianying Co., Ltd. | Independent director | ||
| HONG Jianqiao | Jiangsu Boqian New Material Co., Ltd. | Independent director | ||
| WANG Jinjian | Yiwu China Commodities City Property Development Co., Ltd. | Chairman, general manager | January 2019 | |
| Description of employment in other units | None | |||
(iii) Remuneration of directors, supervisors and senior management personnel
√Applicable □Not Applicable
| Decision-making procedures for the remuneration of directors, supervisors and | The remuneration of the Company’s remunerated directors, supervisors and senior executives shall be reviewed by the remuneration and appraisal committee of the Company’s board |
| senior executives | of directors and submitted to the board of directors for review and approval. The remuneration of directors and supervisors shall also be submitted to the general meeting of shareholders for review and approval. |
| The basis for determining the remuneration of directors, supervisors and senior managers | The remuneration of independent directors is determined in accordance with the Independent Director Allowance System. The Independent Director Allowance System is deliberated and formulated by the board of directors and approved by the general meeting shareholders. The remuneration of the Company’s directors, supervisors and senior management shall be reviewed and determined by the Board of Directors’ Compensation and Appraisal Committee in conjunction with the assessment opinions and results of the state-owned regulatory authority, and submitted to the board of directors for deliberation. |
| Actual payment of remuneration for directors, supervisors and senior management | The relevant assessment for 2021 has not yet been completed, and the actual payment will be determined after the assessment is completed and the relevant procedures are performed. |
| The total remuneration actually received by all directors, supervisors and senior management at the end of the reporting period | The actual payment of remuneration will be determined after completing the assessment and performing the relevant procedures. The salary currently paid is the pre-paid salary for 2021, totaling RMB 6,579,800 before tax. |
(iv) Changes in directors, supervisors and senior officers of the Company
√Applicable □Not Applicable
| Name | Title | Change | Reasons for change |
| LUO Jinming | Independent director | Election | Election |
| JIN Yanghua | Independent director | Leaving office | Due to job adjustments, he resigned from independent director. |
| GONG Chenghao | Vice general manager | Hiring | Hired by the Board of Directors |
| SHOU Shengdi | Vice general manager | Hiring | Hired by the Board of Directors |
| ZHU Yi | Vice general manager | Hiring | Hired by the Board of Directors |
| YANG Yang | Vice general manager | Hiring | Hired by the Board of Directors |
| WEI Gang | Vice general manager | Dismissed | Due to job adjustments, he resigned from vice general manager. |
| ZHOU Long | Vice general manager | Dismissed | Due to job adjustments, he resigned from vice general manager. |
(v) Explanation of punishments by securities regulatory agencies in the past three years
√Applicable □Not Applicable
On January 29, 2019, the Company received the China Securities Regulatory CommissionZhejiang Regulatory Bureau's Decision on Measures to Issue Warning Letters to Zhejiang ChinaCommodity City Group Co., Ltd. and related personnel (Administrative Regulatory Measures
Decision [2019 ] No. 8). For the specific content of the relevant decision, please refer to theAnnouncement of the YIWU CCC on Receiving the Warning Letter from Zhejiang SecuritiesRegulatory Bureau issued by the Company on January 30, 2019 (Announcement No.: L2019-007).
(vi) Others
□Applicable √Not Applicable
V. Description of the meetings of the Board of Directors held during the reporting period
| Session of meeting | Date | Resolution of the meeting |
| 28th meeting of 8th Board of Directors | January 20, 2021 | 9 directors should be present, 9 directors actually presented, and all the resolutions of the meeting were passed |
| 29th meeting of 8th Board of Directors | March 24, 2021 | See the Company's announcement on March 25, 2021 for details |
| 30th meeting of 8th Board of Directors | March 30, 2021 | 9 directors should be present, 9 directors actually presented, and all the resolutions of the meeting were passed |
| 31st meeting of 8th Board of Directors | April 1, 2021 | See the Company's announcement on April 2, 2021 for details |
| 32nd meeting of 8th Board of Directors | April 28, 2021 | See the Company's announcement on April 30, 2021 for details |
| 33rd meeting of 8th Board of Directors | May 20, 2021 | 9 directors should be present, 9 directors actually presented, and all the resolutions of the meeting were passed |
| 34th meeting of 8th Board of Directors | June 15, 2021 | 9 directors should be present, 9 directors actually presented, and all the resolutions of the meeting were passed |
| 35th meeting of 8th Board of Directors | August 9, 2021 | See the Company's announcement on August 11, 2021 for details |
| 36th meeting of 8th Board of Directors | September 29, 2021 | See the Company's notice on September 30, 2021 for details |
| 37th meeting of 8th Board of Directors | October 18, 2021 | See the Company's announcement on October 19, 2021 for details |
| 38th meeting of 8th Board of Directors | October 27, 2021 | 9 directors should be present, 9 directors actually presented, and all the resolutions of the meeting were passed |
| 39th meeting of 8th Board of Directors | Oct 29, 2021 | 9 directors should be present, 9 directors actually presented, and all the resolutions of the meeting were passed |
| 40th meeting of 8th Board of Directors | November 4, 2021 | 9 directors should be present, 9 directors actually presented, and all the resolutions of the meeting were passed |
| 41st meeting of 8th Board of Directors | November 19, 2021 | See the Company's announcement on November 20, 2021 for details |
| 42nd meeting of 8th Board of Directors | November 29, 2021 | 9 directors should be present, 9 directors actually presented, and all the resolutions of the meeting were passed |
| 43rd meeting of 8th Board of Directors | November 30, 2021 | 9 directors should be present, 9 directors actually presented, and all the resolutions of the meeting were passed |
VI. Duties performed by directors(i) Board of Directors and Shareholders Meetings attended by Directors
| Director Name | Independent director or not | Participation in Board of Directors | Participation in General meeting of shareholders | |||||
| Number of board meetings this | Number of attendances in | Number of participations by communica | Number of delegates | Absence Fre | Failure to attend the meeting in person | The number of shareholders | ||
| year | person | tion | attended | quency | twice in a row or not | attending the general meeting | ||
| ZHAO Wenge | No | 16 | 16 | 14 | 0 | 0 | No | 0 |
| WANG Dong | No | 16 | 16 | 14 | 0 | 0 | No | 4 |
| WANG Chunming | No | 16 | 16 | 14 | 0 | 0 | No | 0 |
| LI Chengqun | No | 16 | 16 | 14 | 0 | 0 | No | 1 |
| XU Hang | No | 16 | 16 | 14 | 0 | 0 | No | 4 |
| GU Zhixu | No | 16 | 15 | 14 | 1 | 0 | No | 0 |
| MA Shuzhong | Yes | 16 | 16 | 14 | 0 | 0 | No | 3 |
| HONG Jianqiao | Yes | 16 | 15 | 14 | 1 | 0 | No | 4 |
| JIN Yanghua | Yes | 4 | 4 | 4 | 0 | 0 | No | 0 |
| LUO Jinming | Yes | 12 | 12 | 10 | 0 | 0 | No | 3 |
Explanation of not attending the board meeting in person for two consecutive times
□Applicable √Not Applicable
| Number of meetings of the Board of Directors held during the year | 16 |
| Including: the number of on-site meetings | 2 |
| Number of meetings held by communication | 14 |
| Number of meetings held on site combined with communication methods | 0 |
(ii) Objections raised by directors on company-related matters
□Applicable √Not Applicable
(iii) Others
□Applicable √Not Applicable
VII. Committees under the Board of Directors
√Applicable □Not Applicable
(1). Members of Committees under the Board of Directors
| Category of committees | Member name |
| Audit committee | HONG Jianqiao, MA Shuzhong, XU Hang |
| Nomination Committee | MA Shuzhong, LUO Jinming, WANG Chunming |
| Compensation and Appraisal Committee | LUO Jinming, HONG Jianqiao, LI Chengqun |
| Strategy Committee | ZAHO Wenge, WANG Dong, MA Shuzhong |
(2). 11 meetings held by these committees during the report period
| Date | Contents of the meeting | Important comments and suggestions | Other things on duty fulfillment |
| February 8, 2021 | 2020 Integrated Audit Plan | Agreed with 2020 Integrated Audit Plan | |
| March 22, 2021 | Proposal for nominating candidates for independent directors | Agreed to nominate LUO Jinming as candidate for independent director | |
| April 1, 2021 | Proposal on capital increase and related party transactions of shareholding companies | Agree to increase capital of RMB 1.225 billion for CCCP | |
| April 12, 2021 | Preliminary communication on the results of 2020 integrated audit | Agreed with the preliminary communication on the results of 2020 integrated audit | |
| April 28, 2021 | 1. 2020 Financial Reort 2. 2020 Internal Control Evaluation Report 3. 2020 Internal Control Audit Report 4. The Audit Committee's 2020 Performance Report 5. Proposal on re-appointing accounting firm | Agreed with the 2020 Financial Report, the 2020 Internal Control Evaluation Report, the 2020 Internal Control Audit Report, the 2020 Audit Committee Performance Report and the Proposal on Re-appointing the Accounting Firm | |
| August 9, 2021 | 2021 Semi-annual Internal Control Audit Work Report | Agree with the 2021 Semi-annual Internal Control Audit Work Report | |
| September 27, 2021 | Proposal on Nomination of Vice General Manager | Agreed to nominate GONG Chenghao and YANG Yang as vice general managers of the Company | |
| September 27, 2021 | 1. The proposal on the remuneration of some directors of the Company in 2020 2. The proposal on the remuneration of some directors of the Company in 2020 | Agreed to honor the 2020 annual remuneration of some directors and executives | |
| October 14, 2021 | Proposal on capital increase and related party transactions of shareholding companies | Agreed to increase capital of RMB 2.45 billion for CCCP | |
| November 2, 2021 | Proposal on Nomination of Vice General Manager | Agreed to nominate SHOU Shengdi and ZHU Yi as vice general managers of the Company | |
| December 23, 2021 | 2021 Annual Integrated Audit Plan | Agreed with the 2021 Integrated Audit Plan |
(3). The specifics of objection
□Applicable √Not Applicable
VIII. Explanation of the Company risk that the board of supervisors founds
□Applicable √Not Applicable
The Board of Supervisors has no objection to the supervision matters during the reporting period.
IX. Employees of the parent company and major subsidiaries(i) Employees
| Number of employees in the parent company | 2,282 |
| Number of employees in major subsidiaries | 1,941 |
| Total number of employees | 4,223 |
| Professional composition | |
| Professional composition category | Professional composition |
| Production staff | 108 |
| Salesperson | 86 |
| Technical staff | 2,706 |
| Financial officer | 138 |
| Administration staff | 301 |
| Security personnel | 551 |
| Vehicle management staff | 333 |
| Total | 4,223 |
| Education level | |
| Education level category | Quantity (person) |
| Postgraduate | 106 |
| Bachelor's degree | 1,564 |
| College graduates and below | 2,553 |
| Total | 4,223 |
(ii) Salary policy
√Applicable □Not Applicable
I. Principles of remuneration system
(1) Combination of duties, powers, responsibilities, and benefits;
(2) It shall be fair internally and competitive externally;
(3) Distribution according to work, priority to efficiency, fairness and sustainable development;
(4) Adoption of the distribution form of "salary determined by post, grade determined by ability,and award determined by performance" to reasonably widen the income gap.
2. Basis of salary system
Position importance, performance contribution, ability, work attitude and spirit of cooperation.
(1) As far as the overall level is concerned, the Company determines the remuneration basedon the current economic benefits and sustainable development.
(2) The Company's salary system includes two different types.
a. The annual salary system is applicable to managers and vice managers of the Company'sheadquarters, as well as members of the management team of branches and subsidiaries;
b. The structured wage system is applicable to employees who have signed labor contracts fortwo years and above. Including grassroots management personnel, functional departmentpersonnel, engineering management personnel, logistics management personnel and equipmentmaintenance personnel.
(3) The remuneration of specially hired staff, staff waiting for duty, retired staff and timingpiecework staff shall be stipulated separately.
(4) The Company's employee income generally includes four parts: job skill wages, bonuses,benefits, and allowances.(iii) Training program
√Applicable □Not Applicable
According to the different training organizations, the Company's employee training can bedivided into: OJT training, company internal training, expatriate training and online training.
1. OJT (On the Job Training) The training of ordinary employees and new employees byleaders of various departments, experienced or skilled employees belongs to OJT training,including the Company's administrative management series training, business management seriestraining, engineering technology series training, and security logistics series training.
2. Enterprise internal training. According to the Company's training needs, the Companyorganizes internal trainers or invites external training institutions to tailor training courses for theCompany, allowing employees to receive systematic training, including corporate culture, companyorganizational structure and rules and regulations, industry status and prospects, and professionalethics, etiquette, code of conduct, language, computer skills, etc.
3. Expatriate training In accordance with the needs of the Company's business developmentand job skills, the Company organizes personnel in specific positions to go out to participate in thetraining of training institutions, including financial securities series training, human resourcemanagement training, and enterprise management series training.
4. Network training It is an online training for employees through the application of informationtechnology and Internet technology, and different training content is set for different positions, sothat training and learning are independent and personalized, and the use of resources is maximized.(iv) Labor outsourcing
√Applicable □Not Applicable
| Total number of working hours of labor outsourcing | 31,678.57 months |
| Total remuneration paid for labor outsourcing | RMB 69.8461 million |
X. Plan for profit distribution or capital reserve into stock capital(i) Formulation, implementation or adjustment of cash dividend policy
√Applicable □Not Applicable
According to the China Securities Regulatory Commission's Notice on Further Implementationof Cash Dividends by Listed Companies (ZJF [2012] 37) and Zhejiang Securities RegulatoryBureau’s Notice on Forwarding the Notice on Further Implementation of Listed Companies' CashDividends (ZZJSSZ [2012] 138), the Company held the 24th meeting of the sixth board of directorson August 15, 2012, and reviewed and approved the Proposal on Amending the Articles ofAssociation, which revised the Company’s profit distribution policy and adjustment decision-makingmechanism. The second extraordinary general meeting of shareholders held on September 3, 2012was deliberated and approved. In order to further implement the new requirements of the ChinaSecurities Regulatory Commission's Guidelines for the Supervision of Listed Companies No. 3-Cash Dividend Distribution of Listed Companies (November 30, 2013) and the Guidelines for CashDividend Distribution of Listed Companies of the Shanghai Stock Exchange, the forty-fourthmeeting of the sixth board of directors of the Company held on April 17, 2014 reviewed andapproved the Proposal on Amending the Profit Distribution Clauses in the Articles of Association ofthe Company. The Company further clarified the basic principles, distribution forms, specific policies,decision-making mechanisms and procedures of the Company's profit distribution, which were
reviewed and approved by the 2013 Annual General Meeting of Shareholders held on May 12,2014. The nineteenth meeting of the seventh board of directors of the Company held on December25, 2015 reviewed and approved the Plan of Zhejiang China Commodity City Group Co., Ltd. onShareholder Dividend Return Plan.The Company's 2020 annual general meeting of shareholders held on May 25, 2021 reviewedand approved the Company's profit distribution plan for 2020. In 2020, based on the total sharecapital of 5,443,214,176 shares, a cash dividend of RMB 0.55 (including tax) will be distributed forevery 10 shares. A total of RMB 301,945,279.68 was allocated. The Company's Board of Directorspublished the Announcement on the Implementation of the Distribution of Rights and Interests in2021 on the website of the Shanghai Stock Exchange and the China Securities Journal, ShanghaiSecurities News and Securities Times on June 10, 2021. The profits have been distributed beforeJune 18, 2021. The decision-making procedures related to the Company's profit distribution complywith the provisions of the Articles of Association. The Company listens to the opinions and demandsof small and medium shareholders, and the profit distribution is based on factors such as theCompany's industry characteristics, development stage and profitability level, and capital needs. Ittakes into account the requirements for investors to share the results of the Company'sdevelopment and growth and obtain reasonable investment returns.
(ii) Special explanation of cash dividend policy
√Applicable □Not Applicable
| Whether it complies with the provisions of the Company's Articles of Association or the requirements of the resolution of the general meeting of shareholders | √Y □N |
| Whether the dividend standard and ratio are clear and clear | √Y □N |
| Whether the relevant decision-making procedures and mechanisms are complete | √Y □N |
| Whether the independent directors performed their duties and played their due role | √Y □N |
| Whether minority shareholders have the opportunity to fully express their opinions and demands, and whether their legitimate rights and interests have been fully protected | √Y □N |
(iii) During the reporting period, if the parent company is profitable and the profit available
for distribution to shareholders is positive, but does not propose a plan for thedistribution of cash profits, the Company shall disclose in details the reason, theapplication and using plan of the undistributed profits.
□Applicable √Not Applicable
XI. Incentive stock option plans, employee stock ownership plans and other employeeincentives granted by the Company and the impact thereof(i) Relevant incentive matters have been disclosed in the temporary announcement andthere is no progress or change in subsequent implementation.
√Applicable □Not Applicable
| Overview of the matter | Query website |
| On October 23, 2020, the twenty-third meeting of the eighth Board of Directors of the Company passed the Proposal on the Company's 2020 Restricted Equity incentive Plan (Draft) and Its Summary, Proposal on the Measures for the Evaluation and Management of the Implementation of the Company's 2020 Restricted Equity incentive Plan, | For details, please refer to the Company's announcement on the website of the Shanghai Stock |
| Proposal on Requesting the General Meeting of Shareholders to Authorize the Board of Directors to Handle Issues Related to Equity Incentives. The independent directors of the Company issued relevant independent opinions. On October 23, 2020, the sixth meeting of the eighth Board of Supervisors of the Company deliberated and approved the Proposal on the Company's 2020 Restricted Equity incentive Plan (Draft) and its Summary, The Proposal on the Implementation Evaluation and Management Measures for the Company's 2020 Restricted Equity incentive Plan, Proposal on Verification of the List of Incentive Objects of the Company's 2020 Restricted Equity incentive Plan. The board of supervisors issued relevant verification opinions. Independent financial consultants, lawyers and other intermediary agencies issued corresponding opinions. | Exchange (www.sse.com.cn) on October 24, 2020. |
| On November 18, 2020, it received the Approval for Approving Zhejiang China Commodity City Group Co., Ltd. to implement the 2020 restricted equity incentive plan issued by the State-owned Assets Supervision and Administration Office of the People's Government of Yiwu City, forwarded by Yiwu China Commodity City Holdings Ltd. (Yiwu SASAOF〔2020〕51). | For details, please refer to the Company's announcement on the website of the Shanghai Stock Exchange (www.sse.com.cn) on November 20, 2020. |
| From November 20, 2020 to November 29, 2020, the list of incentive objects and positions of the 2020 restricted equity incentive plan were internally publicized. Within the time limit of the publicity, the board of supervisors of the Company did not receive any objection from any organization or individual or bad feedback, without feedback record. On November 30, 2020, the Board of Supervisors of the Company issued the Examination Opinions and Public Statement of the Board of Supervisors on the List of Incentive Objects of the Company's 2020 Restricted Equity incentive Plan. | For details, please refer to the Company's announcement on the website of the Shanghai Stock Exchange (www.sse.com.cn) on December 1, 2020. |
| On December 10, 2020, the Company's 2020 Fifth Provisional General Meeting of Shareholders deliberated and approved the “Proposal on the ‘Company's 2020 Restricted Equity incentive Plan (Draft)’ and Summary”, the “Proposal on the “Measures of Assessment and Management of Implementation of ‘Company’s 2020 Restricted Equity incentive Plan’”, and the “Proposal on Requesting the General Meeting of Shareholders to Authorize the Board of Directors to Deal with Equity Incentive Related Matters”, and disclosed the “Self-examination | For details, please refer to the Company's announcement on the website of the Shanghai Stock Exchange (www.sse.com.cn) on December 11, 2020. |
| Report on the Trades of Company’s Stocks by Insiders of Company’s 2020 Restricted Equity incentive Plan”. | |
| On December 11, 2020, the twenty-sixth meeting of the eighth session of the Company's board of directors passed the Proposal on Granting Restricted Shares to Incentive Objects for the First Time. The independent directors of the Company issued relevant independent opinions. On December 11, 2020, the seventh meeting of the Company's eighth board of supervisors passed the Proposal on Granting Restricted Stocks to Incentive Objects for the First Time. The Board of Supervisors issued the Verification Opinions of the Board of Supervisors on Matters Related to the First Grant of the Company's 2020 Restricted Equity incentive Plan. Independent financial consultants, lawyers and other intermediary agencies issued corresponding opinions. | For details, please refer to the Company's announcement on the website of the Shanghai Stock Exchange (www.sse.com.cn) on December 12, 2020. |
| On January 15, 2021, the Company received the Securities Change Registration Certificate issued by the Shanghai Branch of China Securities Depository and Clearing Co., Ltd., and the Company completed the registration of the first grant of restricted stocks to incentive objects. | For details, please refer to the Company's announcement on the website of the Shanghai Stock Exchange (www.sse.com.cn) on January 19, 2021. |
| On August 9, 2021, the 35th meeting of the eighth Board of Directors of the Company passed the "Proposal on Reserved Granting Restricted Stocks to Incentive Objects", "On Adjusting the Repurchase Price of Restricted Stocks and Repurchasing and Cancelling Some Restricted Stocks" 's proposal". The independent directors of the Company issued relevant independent opinions. On August 9, 2021, the ninth meeting of the eighth Boarder of Supervisors of the Company passed the "Proposal on Reserved Granting Restricted Stocks to Incentive Objects", "Proposal on Adjusting the Repurchase Price of Restricted Stocks and Repurchasing and Cancelling Some Restricted Stocks" ". The Board of Supervisors issued the Verification Opinions of the Board of Supervisors on Matters Related to the Company's Reserved Grant of the Restricted Equity incentive Plan in 2020. | For details, please refer to the Company's announcement on the website of the Shanghai Stock Exchange (www.sse.com.cn) on August 11, 2021. |
| On November 4, 2021, the Company received the Securities Change Registration Certificate issued by the Shanghai Branch of China | For details, see the Company's |
| Securities Depository and Clearing Co., Ltd., and the Company completed the registration of the reserved grant of restricted stocks to incentive objects. | announcement on the website of the Shanghai Stock Exchange (www.sse.com.cn) on November 6, 2021. |
| On November 17, 2021, the Company applied to China Securities Depository and Clearing Co., Ltd. Shanghai Branch for repurchase and cancellation of restricted stocks that have been granted but not yet lifted by some resigned employees. On November 30, 2021, the Company received the "Securities Change Registration Certificate" issued by China Securities Depository and Clearing Co., Ltd. Shanghai Branch, and the Company has completed the registration of the restricted stock repurchase and cancellation. | For details, see the Company's announcement on the website of the Shanghai Stock Exchange (www.sse.com.cn) on November 26, 2021. |
(ii) Incentives that have not been disclosed in the temporary announcements or had furtherprogressesIncentive stock option
□Applicable √Not Applicable
Other statements
□Applicable √Not Applicable
Employee stock ownership plans
□Applicable √Not Applicable
Other incentives
□Applicable √Not Applicable
(iii) Equity incentives granted to directors and senior executives during the reporting period
□Applicable √Not Applicable
√Applicable □Not Applicable
Unit: Ten Thousand Shares
| Name | Title | Number of restricted stocks held at the beginning of the year | Number of restricted stocks granted during the reporting period | Grant price of restricted stock (RMB) | Released shares | Unreleased share | Number of restricted stocks held at the end of the period | Market price at the end of the reporting period (RMB) |
| ZHAO Wenge | Board chairman | 0 | 30 | 2.94 | 0 | 30 | 30 | 1,455,000 |
| WANG Dong | Vice Chairman and General | 0 | 30 | 2.94 | 0 | 30 | 30 | 1,455,000 |
| Manager | ||||||||
| JIN Gengzhong | Vice general manager | 0 | 30 | 2.94 | 0 | 30 | 30 | 1,455,000 |
| WU Xiubin | Vice general manager | 0 | 30 | 2.94 | 0 | 30 | 30 | 1,455,000 |
| ZHANG Qizhen | Vice general manager | 0 | 30 | 2.94 | 0 | 30 | 30 | 1,455,000 |
| GONG Chenghao | Vice general manager | 0 | 20 | 2.94 | 0 | 20 | 20 | 970,000 |
| YANG Yang | Vice general manager | 0 | 20 | 2.94 | 0 | 20 | 20 | 970,000 |
| XU Hang | Director Board Secretary | 0 | 30 | 2.94 | 0 | 30 | 30 | 1,455,000 |
| ZHAO Difang | Financial Manager | 0 | 30 | 2.94 | 0 | 30 | 30 | 1,455,000 |
| WEI Gang | Vice general manager | 0 | 30 | 2.94 | 0 | 30 | 30 | 1,455,000 |
| Total | / | 0 | 280 | / | 0 | 280 | 280 | / |
(iv) The evaluation mechanism for senior managers during the reporting period, as well as
the establishment and implementation of incentive mechanisms
√Applicable □Not Applicable
The salary appraisal of the senior management personnel is completed and determinedaccording to the performance appraisal method of the head of the enterprise and the Company'soperation and related appraisal indicators, then the salary determination is completed.
XII. Construction and implementation of internal control system during the reporting period
√Applicable □Not Applicable
For details, please refer to the "2021 Internal Control Evaluation Report" disclosed by the Companyon the website of the Shanghai Stock Exchange.
Explanation of major deficiencies in internal control during the reporting period
□Applicable √Not Applicable
XIII. Management and control of subsidiaries during the reporting period
√Applicable □Not Applicable
For details, please refer to the "2021 Internal Control Evaluation Report" disclosed by the Companyon the website of the Shanghai Stock Exchange.
XIV. Explanation of the internal control audit report
√Applicable □Not Applicable
The Company hired Ernst & Young Hua Ming Certified Public Accountants (special generalpartnership) to audit the effectiveness of the Company's internal control in its 2021 financial report.The accounting firm has issued a standard unqualified internal control audit report. It is believedthat the Company maintained effective internal control of financial reporting in all major aspects in
accordance with the Basic Standards for Corporate Internal Control and related regulations onDecember 31, 2021. For details of the internal control audit report, please refer to the ShanghaiStock Exchange website (www.sse.com.cn).Disclosure of internal control audit report: YesOpinion type of internal control audit report: standard unqualified opinion
XV. Self-examination and rectification of the Listed Company's governance special actionsIn the Listed Company's governance special actions, after self-examination, the Companyfound that the Company's Articles of Association did not specify that when the shareholders'general meeting elects directors and supervisors, it "should" implement the cumulative votingsystem. The Company held the third provisional general meeting of shareholders in 2021 onNovember 4, 2021. With the special resolution of the general meeting of shareholders, the relevantcontent of Article 84 of the Company's Articles of Association, i.e., "When the general meeting ofshareholders votes on the election of directors and supervisors, the cumulative voting system maybe implemented in accordance with the provisions of the Articles of Association or the resolutions ofthe shareholders' general meeting" was revised to "When the general meeting of shareholdersvotes on the election of two or more directors and supervisors, the cumulative voting system shallbe implemented in accordance with the provisions of the Articles of Association or the resolutions ofthe general meeting of shareholders.” For details, please refer to the "Announcement on Amendingthe Articles of Association" (L 2021-048) disclosed on October 19, 2021 and the "Announcement onResolutions of the Third Provisional General Meeting in 2021" disclosed on November 5, 2021 ( L2021-054).
XVI. Others
□Applicable √Not Applicable
Section V. Environmental and Social Responsibilities
I. Environmental issues(i) Description of the environmental protection status of the Company and its mainsubsidiaries that are key pollutant discharging units announced by the environmentalprotection authorities
□Applicable √Not Applicable
(ii) Description of the environmental protection status of the companies other than the keypollutant discharging units
□Applicable √Not Applicable
(iii) Relevant information that is conducive to protecting ecology, preventing pollution, and
fulfilling environmental responsibilities
□Applicable √Not Applicable
(iv) Measures taken to reduce their carbon emissions during the reporting period and theeffect
□Applicable √Not Applicable
II. Social responsibility
√Applicable □Not Applicable
For details, please refer to the "2021 Sustainability Report" disclosed by the Company on thewebsite of the Shanghai Stock Exchange.
III. Status of consolidation and expansion of the results of poverty alleviation, ruralrevitalization and other specific work
□Applicable √Not Applicable
Section VI. Significant Matters
I. Fulfillment of commitments(i) Commitments made by the actual controller, shareholders, affiliates and acquirer of theCompany, the Company itself and other related parties during the reporting period or asof the reporting period
□Applicable √Not Applicable
(ii) If there is a profit forecast for the Company’s assets or projects, and the reporting period
is still in the profit forecast period, the Company will explain whether the assets orprojects have reached the original profit forecast and the reason.
□Reached □Not Reached √Not Applicable
(iii) Completion of performance commitments and its impact on the impairment test ofgoodwill
□Applicable √Not Applicable
II. Non-operating capital occupation by controlling shareholder and other related partiesduring the reporting period
□Applicable √Not Applicable
III. Illegal guarantees
□Applicable √Not Applicable
IV. The Company's explanation on the ‘non-standard opinion audit report’ of the accountingfirm
□Applicable √Not Applicable
V. The Company's analysis and explanation on the reasons and effects of changes inaccounting policies, accounting estimates or corrections of major accounting errors(i) The Company's analysis and explanation on the reasons and effects of changes inaccounting policies and accounting estimates
√Applicable □Not Applicable
For details, please refer to “44. Changes in Significant Accounting Policies and AccountingEstimates” in “V. Significant Accounting Policies and Accounting Estimates” in “Chapter X FinancialReprot” of this report.
(ii) The Company's analysis and explanation on the reasons and effects of major
accounting errors correction
□Applicable √Not Applicable
(iii) Communication with the former accounting firm
□Applicable √Not Applicable
(iv) Other statements
□Applicable √Not Applicable
VI. Engagement and termination of engagement of accounting firm
Unit: RMB10,000
| Now engaging | |
| Name of the engaged domestic accounting firm | Ernst & Young Hua Ming Certified Public Accountants (special general partnership) |
| Remuneration of the engaged domestic accounting firm | 200 |
| Audit period of the engaged domestic accounting firm | 14 |
| Name | Remuneration | |
| Internal control auditing accounting firm | Ernst & Young Hua Ming Certified Public Accountants (special general partnership) | 55 |
Statement on the engagement or termination of engagement of accounting firm
√Applicable □Not Applicable
After deliberation at the 32th meeting of the eighth Board of Directors of the Company held onApril 28, 2021, and the Company’s 2020 annual general meeting of shareholders held on May 25,2021, the Proposal on Renewing the Appointment of the Accounting Firm was passed, and agreedto continue Appoint Ernst & Young Hua Ming Certified Public Accountants (Special GeneralPartnership) as the Company's 2021 financial and internal control audit agency. For details, pleaserefer to the Announcement on Renewing the Appointment of Accounting Firms (L2021-022) issuedby the Company on the Shanghai Stock Exchange website www.sse.com.cn on April 30, 2021, andthe Announcement on Resolutions of the 2020 Annual General Meeting of Shareholders (L2021-030) issued by the Company on the Shanghai Stock Exchange website www.sse.com.cn on May26, 2021.
Statement on replacing the accounting firm during the audit
□Applicable √Not Applicable
VII. Situations at risk of delisting(i) Reasons for the delisting risk warning
□Applicable √Not Applicable
(ii) The Company's proposed response measures
□Applicable √Not Applicable
(iii) Termination of listing and reasons
□Applicable √Not Applicable
VIII. Matters relating to bankruptcy and reorganization
□Applicable √Not Applicable
IX. Material litigations and arbitrations
√There are material litigations or arbitrations in current reporting period □No material litigations orarbitrations in current reporting period(i) Litigations and arbitrations have been disclosed in the temporary announcements and
have had no further progresses
□Applicable √Not Applicable
(ii) Litigations and arbitrations that have not been disclosed in the temporary announcements or have had further progresses
√Applicable □Not Applicable
Unit: RMB10,000
| During the reporting period: | |||||||||
| Plaintiff (claimant) | Defendant (respondent) | Party Bearing Joint Liabilities | Litigation or arbitration | Basic information of litigation (arbitration) | Value involved in litigation (arbitration) | Does the litigation (arbitration) cause estimated liabilities and the amount thereof | Status of litigation (arbitration) | Results of litigation (arbitration) and effect thereof | Enforcement of judgment (award) |
| The Company | Xi'an Honghua Instrument Factory, Shaanxi Yiwu Shangcheng Property Management Co., Ltd., Xi'an Caixin Real Estate Development Company | None | Litigation | Unfair Competition and Trademark Infringement Dispute Case [(2021) Shaan 01 Zhi Min Chu No. 604] | 812 | No | Judgment has been made | The defendant shall pay the plaintiff RMB 3 million in compensation | |
| The Company | Jiangxi Anlong Investment Co., Ltd., Pingxiang Yiwu Small Commodity Wholesale City Property Service Management Co., Ltd. | None | Litigation | Unfair Competition and Trademark Infringement Dispute Case [(2021) Gan 03 Min Chu No. 29] | 812 | No | Judgment has been made | The defendant shall pay the plaintiff a joint and several compensation of RMB 2.1037 million | |
| The Company | Jiangsu Zhonghaojiayuan Holding Group Co., Ltd., Suqian Yiwu International Trade City Market Management Co., Ltd., Suqian Maike Information Technology Co., Ltd. | None | Litigation | Dispute over unfair competitions [(2021) Su 01 Min Chu No. 497] | 512 | No | Judgment has been made | The plaintiff's claims were dismissed | |
| The Company | Yingde Yiwu Small Commodity Business Development Co., Ltd. | None | Litigation | Unfair competition dispute case [(2021) Yu 18 Min Chu No. 20] | 812 | No | Judgment has been made | The defendant shall jointly compensate the plaintiff for economic losses of RMB 3 million. | |
| The Company | Puyang Lidu Real Estate Development Co., Ltd., Puyang Yiwu International Trade City Commercial Management Co., Ltd., Puyang Yanbin Building Catering Culture Co., Ltd. | None | Litigation | Unfair Competition and Infringement of Trademark Exclusive Rights Dispute Case [(2021) Yu 09 Zhi Min Chu No. 37] | 512 | No | Judgment has been made | The defendant shall jointly compensate the plaintiff for economic losses of RMB 3.1038 million. | |
| The Company | Pingdingshan Yuhong Jiaye Real Estate Development Co., Ltd., Pingdingshan Wanshang Yiwu Small Commodity Market Operation Co., Ltd. | None | Litigation | Unfair Competition and Infringement of Trademark Exclusive Rights Dispute Case [(2021) Yu 04 Zhi Min Chu No. 82] | 512 | No | Judgment has been made | The defendant shall jointly compensate the plaintiff for economic losses of RMB 1.5 million. | |
| The Company | Qingzhou Yifeng Hanjin Real Estate Co., Ltd., Qingzhou Yifeng Commercial Property Management Co., Ltd., Shandong Yifeng Industrial Group Real Estate Co., Ltd. | None | Litigation | Unfair Competition and Trademark Infringement Dispute Case [(2021) Lu 07 Min Chu No. 38] | 812 | No | Judgment has been made | The defendant Qingzhou Yifeng Hanjin Real Estate Co., Ltd. shall compensate the plaintiff for economic losses of RMB 2 million and reasonable expenses of RMB 101,100 | |
| The Company | Nanjing Yiwu Small Commodity City Co., Ltd., Nanjing Zheshang Investment Co., Ltd., Nanjing Xiezhong Group Real Estate Development Co., Ltd. | None | Litigation | Dispute over unfair competitions [(2021) Su 01 Min Chu No. 630] | 812 | No | Judgment has been made | The defendant shall jointly and severally compensate the plaintiff for economic losses of RMB 6 million and reasonable expenses of RMB 103,600 | |
| The Company | Shanxi Yuheng Shengshi Real Estate Development Co., Ltd. | None | Litigation | Unfair Competition and Trademark Infringement Dispute Case [(2021) Jin 01 Min Chu No. 394] | 812 | No | Judgment has been made | The defendant shall compensate the plaintiff for economic losses of RMB 1 million and reasonable expenses of RMB 101,200 | |
| The Company | Zhenjiang Hongda Real Estate Co., Ltd., Zhenjiang Hongda Yiwu Small Commodity Market Management Co., Ltd. | None | Litigation | Dispute over unfair competitions [(2021) Su 01 Min Chu No. 1336] | 812 | No | Judgment has been made | The defendant shall jointly and severally compensate the plaintiff RMB 6 million and reasonable expenses of RMB 101,100 | |
| The Company | Dongguan Xingying Yiwu Small Commodity City Co., Ltd., Dongguan Hongyu Industrial Investment Co., Ltd. | None | Litigation | Unfair competition dispute case [(2021) Yu 19 Min Chu No. 76] | 812 | No | Judgment has been made | The defendant shall jointly and severally compensate RMB 6 million for economic losses and RMB 101,100 for reasonable expenses | |
| The Company | Zhejiang Yiwu Chuanglian Market Investment Management Co., Ltd., Hunan Zotye Real Estate Development | None | Litigation | Unfair Competition Dispute Case [(2021) Xiang 07 Zhi Min Chu No. 167] | 792 | No | Judgment has been made | The defendant shall jointly and severally compensate the |
| Co., Ltd., Deng Shenping, Wang Zhiyong | plaintiff RMB 200,000 and reasonable expenses of RMB 103,700 | ||||||||
| The Company | Chongqing Jingtou Investment Group Co., Ltd., Chongqing Jingtou Wanyu Real Estate Co., Ltd. | None | Litigation | Unfair Competition Disputes and Infringement of Trademark Exclusive Rights [(2021) Yu 01 Min Chu No. 663] | 512 | No | Judgment has been made | The defendant shall jointly compensate the plaintiff for economic losses of RMB 3 million. | |
| Zhejiang Yiwugou E-commerce Co., Ltd. | The Company | None | Litigation | Dispute over unfair competitions [(2020) Z 01 M C No. 2202] | 1,000 | No | Judgment has been made | The plaintiff's claims were dismissed | |
| Supply Chain Company | Zhejiang Jielian Network Technology Co., Ltd. | None | Litigation | Leasing Contract Dispute Case [(2021) Zhe 0782 Min Chu No. 19808] | 1,328.67 | No | Judgment has been made | The defendant shall pay the plaintiff RMB 6,000,600 in rent, RMB 261,300 in public energy consumption, and pay liquidated damages | |
| The Company | Shenzhen Maojun Investment Co., Ltd., Shenzhen Yiwu Small Commodity Wholesale City Co., Ltd., Shenzhen Longgang District Weifa Enterprise Development Co., Ltd., Zhejiang Yiwu Shangdu Market Development Co., Ltd. | None | Litigation | Second instance of trademark infringement dispute [(2021) Yu Min Zhong No. 1431] | 1,212 | No | Trial has started, but no judgment has been made | ||
| The Company | Yiwu Wankexing Market Development Co., Ltd., Xinyang Wanjia Denghuo Industry Co., Ltd., Henan Zhongda Commercial Operation Management Co., Ltd. | None | Litigation | Dispute over unfair competitions [(2021) Zhe 07 Min Chu No. 58] | 792 | No | Trial has started, but no judgment has been made | ||
| The Company | Guangxi Huading Century Investment Group Co., Ltd., Yulin Huading Investment Co., Ltd., Yulin Wanshanghui Commercial Operation Co., Ltd. | None | Litigation | Dispute over unfair competitions [(2021) Gui 01 Min Chu No. 817] | 812 | No | Trial has started, but no judgment has been made |
(iii) Other statements
√Applicable □Not Applicable
In March 2018, the Company and Yiwu China Commodities City (the Company’s formerholding subsidiary, present participating company, in which the Company holds 35.8% of shares)was sued by Bank of China Co., Ltd. Yiwu Branch (hereinafter referred to as “Bank of China YiwuBranch”) due to a letter of credit dispute” to the Jinhua Intermediate People’s Court of ZhejiangProvince (hereinafter referred to as “Jinhua Intermediate Court”). For details, see the“Announcement on Litigation Involved in the Company and Its Holding Subsidiaries" (Lin 2018-008)disclosed by the Company on March 2, 2018. Later, the lawsuit was dismissed by JinhuaIntermediate Court.
On May 18, 2018, Bank of China Yiwu Branch transferred all the rights of the principal andinterest, compound interest, liquidated damages, compensation and other claims under the letter ofcredit involved to China Cinda Asset Management Co., Ltd. Zhejiang Branch (hereinafter referred toas "Cinda Assets").
On June 25, 2021, Cinda Assets again filed a civil lawsuit with the Jinhua IntermediatePeople's Court on the dispute over the letter of credit. For details, see the “Announcement on theProgress of Litigation Involved in the Company and its Subsidiaries” (Lin 2021-036) disclosed bythe Company on July 21, 2021.
No hearings have been held as of the end of the reporting period.
X. Information of the listed company and its directors, supervisors, senior management,
controlling shareholder, and actual controller suspected of violations of laws and
regulations, penalties and rectification
□Applicable √Not Applicable
XI. Credit standing of the Company and its controlling shareholder and actual controller
√Applicable □Not Applicable
There was no outstanding court judgment or overdue debt of a large amount involving theCompany or its controlling shareholder or actual controller during the reporting period.
XII. Material related-party transactions(i) Related-party transactions relating to regular corporate operation
1. Matters that have been disclosed in the temporary announcements and had no further
progresses or changes
□Applicable √Not Applicable
2. Matters that have been disclosed in the temporary announcements but had further
progresses or changes
□Applicable √Not Applicable
3. Matters that have not been disclosed in the temporary announcements
√Applicable □Not Applicable
Unit: RMB
| Related counterparty | Relationship | Type of related-party transaction | Contents of related-party transaction | Pricing principle | Price of related-party transaction | Amount of related-party transaction | Percentage in the amount of similar transactions | Settlement method | Market M/Price | Reasons for the large difference between |
| (%) | the price of the transaction and reference market price | |||||||||
| Yiwu Security Service Co., Ltd. | Subsidiaries of controlling shareholder parent company | Acceptance of labor service | Epidemic prevention and control and exhibition security service fee | Market price | 23,927,708.38 | 23,927,708.38 | 47.51 | Account transfer | ||
| Yiwu China Commodities City Property Service Co., Ltd. | Controlling subsidiaries of controlling shareholder | Acceptance of labor service | Property service fee and greening maintenance fee | Market price | 13,721,576.38 | 13,721,576.38 | 27.24 | Account transfer | ||
| CCCH | Controlling shareholder | Rent | Warehouse space rental | Market price | 3,947,798.16 | 3,947,798.16 | 7.84 | Account transfer | ||
| CCCP | Controlling subsidiaries of controlling shareholder | Lease out | Office space rental | Market price | 3,767,104.11 | 3,767,104.11 | 7.48 | Account transfer | ||
| Yiwu China Commodities City Creative Design and Development Services Co., Ltd. | Associates | Acceptance of labor service | Design fee | Market price | 1,953,465.33 | 1,953,465.33 | 3.88 | Account transfer | ||
| Yourworld International Conference Center, subordinated to Yiwu Market Development Group | Branches of the controlling shareholder parent company | Acceptance of labor service | Laundering fees | Market price | 1,594,054.55 | 1,594,054.55 | 3.17 | Account transfer | ||
| Yourworld International Conference Center, subordinated to Yiwu Market Development Group | Branches of the controlling shareholder parent company | Other inflow | Entrusted management fees and license fees | Negotiated price | 1,453,314.18 | 1,453,314.18 | 2.88 | Account transfer | ||
| Total | / | / | 50,365,021.09 | 100 | / | / | / | |||
| Return of large-value goods sales | ||||||||||
| Illustration on related-party transactions | ||||||||||
(ii) Related transactions in the acquisition or sale of assets or equity
1. Matters that have been disclosed in the temporary announcements and had no furtherprogresses or changes
□Applicable √Not Applicable
2. Matters that have been disclosed in the temporary announcements but had furtherprogresses or changes
□Applicable √Not Applicable
3. Matters that have not been disclosed in the temporary announcements
□Applicable √Not Applicable
4. If any agreement on the operating results is involved, the achievement of operatingresults during the reporting period shall be disclosed
□Applicable √Not Applicable
(iii) Related-party transactions arising from joint external investment
1. Matters that have been disclosed in the temporary announcements and had no further
progresses or changes
□Applicable √Not Applicable
2. Matters that have been disclosed in the temporary announcements but had further
progresses or changes
√Applicable □Not Applicable
(1) The Company and the controlling shareholder CCCH increased the capital of CCCP inmonetary form according to the shareholding ratio. CCCH increased the capital by RMB 1.275billion, the Company increased the capital by RMB 1.225 billion. After the capital increase, theregistered capital of CCCP was RMB 5 billion, and the shareholding ratio of both parties maintainedunchanged. For details, see the “Announcement on Capital Increase to Participating Companiesand Related Transactions” (Announcement No.: Lin 2021-014).
By the end of the reporting period, the Company and CCCH have completed capitalcontributions, and CCCP has completed its industrial and commercial alteration registration.
(2) The Company and the controlling shareholder CCCH proposed to increase the capital ofCCCP in monetary form according to the shareholding ratio. CCCH increased the capital by RMB
2.55 billion, the Company increased the capital by RMB 2.45 billion. After the capital increase, theregistered capital of CCCP was RMB 10 billion, and the shareholding ratio of both partiesmaintained unchanged. For details, see the “Announcement on Capital Increase to ParticipatingCompanies and Related Transactions” (Announcement No.: L 2021-049).
The Company held the thirty-ninth meeting of the eighth Board of Directors of the Company onOctober 29, 2021, at which it reviewed and approved the "Proposal on Revocation of the "Proposalon the Capital Increase and Related Party Transactions of the Equity Participating Company" andsubmitted to the General Meeting of Shareholders for deliberation, agreeing to cancel the above-mentioned capital increase. For details, see the “Announcement on Capital Increase to ParticipatingCompanies and Related Transactions” (Announcement No.: L 2021-052).
3. Matters that have not been disclosed in the temporary announcements
□Applicable √Not Applicable
(iv) Related-party credits and debts
1. Matters that have been disclosed in the temporary announcements and had no further
progresses or changes
□Applicable √Not Applicable
2. Matters that have been disclosed in the temporary announcements but had further
progresses or changes
√Applicable □Not Applicable
In order to meet the development needs of Handing Shangbo, a wholly-owned subsidiary of theCompany's subsidiary CCCP for the development of real estate project on the east side of theintersection of Fotang Avenue and Shuangfeng Road, Fotang Town, Yiwu, the Company providedHanding Shangbo with a financial aid of no more than RMB 490 million. CCCH, the Company’s
controlling shareholder, will provide Handing Shangbo with the financial aid in the same proportionof its indirect shareholding in Handing Shangbo. For details, please refer to the Announcement onProviding External Financial Assistance and Related Party Transactions (Announcement Number:
L2020-098).
As of the end of the reporting period, the Company provided financial aid of RMB 220 million,and CCCH has provided financial aid of RMB 231 million.
3. Matters that have not been disclosed in the temporary announcements
□Applicable √Not Applicable
(v) Financial business between the Company and the associated financial companies, the
Company's holding financial company and the related parties
□Applicable √Not Applicable
(vi) Others
□Applicable √Not Applicable
XIII. Material contracts and performance thereof(i) Trusteeship, contracting and leases
1. Trusteeship
□Applicable √Not Applicable
2. Contracting
□Applicable √Not Applicable
3. Lease
□Applicable √Not Applicable
(ii) Guarantees
√Applicable □Not Applicable
Unit: RMB10,000
| External guarantees provided by the Company (excluding those provided for the subsidiaries) | |||||||||||||||
| Guarantor | Relationship between the guarantor and the Listed Company | The guaranteed | Amount of guarantee | Date of guarantee (signing date of the agreement) | Guarantee Starting date | Guarantee Maturity date | Type of guarantee | Collateral (if any) | Is the guarantee fulfilled in full | Is the guarantee overdue | Overdue amount of the guarantee | Counter guarantees | Is it a related-party guarantee | Related Relationship | |
| The Company | The Company itself | Yiwu Shanglv | 14,528.77 | December 16, 2015 | July 1, 2015 | December 15, 2026 | Joint and several liability guarantee | No | No | SCO provided a counter-guarantee | Yes | Joint venture | |||
| The Company | The Company itself | Yiwu Shanglv | 828.31 | August 13, 2020 | December 25, 2020 | December 24, 2023 | Joint and several liability guarantee | No | No | CCCH provided a counter-guarantee | Yes | Joint venture | |||
| Hangzhou Shangbo Nanxing | Wholly-owned subsidiary | House purchaser | 506.33 | Joint and several liability guarantee | No | No | No | ||||||||
| Amount of guarantees made during the reporting period (excluding the guarantees provided for subsidiaries) | -81,535.84 | ||||||||||||||
| Balance of guarantees at the end of the reporting period (A) (excluding the guarantees provided for subsidiaries) | 15,863.41 | ||||||||||||||
| The guarantee of the Company and its subsidiaries to the subsidiaries | |||||||||||||||
| Amount of guarantees provided for subsidiaries during the reporting period | - | ||||||||||||||
| Balance of guarantees provided for subsidiaries at the end of the reporting period (B) | - | ||||||||||||||
| Total guarantees provided by the Company (including those provided for the subsidiaries) | |||||||||||||||
| Total amount of guarantees (A+B) | 15,863.41 | ||||||||||||||
| Ratio of the total amount of guarantees to the Company’s net assets (%) | 1.08 | ||||||||||||||
| Among which: | |||||||||||||||
| Amount of guarantees provided for shareholders, actual controller and their | - | ||||||||||||||
| related parties (C) | |
| Amount of guarantees provided directly or indirectly for the debtors whose debt-to-asset ratio exceed 70% (D) | - |
| Portion of total amount of guarantees in excess of 50% of net assets (E) | - |
| Total (C+D+E) | - |
| Statement on the joint and several liability that may be assumed due to outstanding guarantees | |
| Statement on guarantees | 1. According to the resolution of the 15th Meeting of the 7th Board of Directors on July 1, 2015, the Group applied for a RMB 750 million loan with Agricultural Bank of China Yiwu Branch for Yiwu Shanglv and provided guarantees in accordance with the shareholding ratio. The guarantee method was joint liability guarantee, the highest guarantee amount was RMB 367.5 million and the guarantee term was11 years. As of December 31, 2021, Yiwu Shanglv actually borrowed RMB 296,505,577.63 (December 31, 2020: RMB 477,659,739.88) from the banks in total. According to the agreement of the guarantee contract, it assumed the guarantee liability of RMB 145,287,733.04 (December 31, 2020: RMB 234,053,272.54) for the Agricultural Bank of China Yiwu Branch. Yiwu State-owned Capital Operation Co., Ltd. provided a counter guarantee for this guarantee. 2. According to the resolution of the 19th Meeting of the 8th Board of Directors on August 13, 2020, the Group applied for a loan with a total amount of not more than RMB 100 million for Yiwu Shanglv with the Bank of Communications Co., Ltd. Yiwu Branch and provided a guarantee in proportion to the shareholding ratio. The guarantee method was under joint liability, the maximum amount of the guarantee was RMB 49 million, and the guarantee period was two years, from the date of the expiry of the debt performance period agreed in the independent contract until the date of the expiration of the debt performance period of all last due main debt under the master contract. As of December 31, 2021, Yiwu Shanglv actually borrowed RMB 28,404,291.89 (December 31, 2020: RMB 11,500,000.00) from banks in total. According to the agreement of the guarantee contract, it assumed the guarantee liability of RMB 8,283,103.03 (December 31, 2020: RMB 5,635,000.00) for the Agricultural Bank of China Yiwu Branch. CCCH provided a counter-guarantee 3. According to relevant regulations, before the purchaser of the commercial housing sold by the Group has obtained the property certificate, the Group shall provide the purchaser with a bank mortgage guarantee. As of December 31, 2021, the unsettled guarantee amount was RMB 5,063,333.60 (December 31, 2020: RMB 16,170,141.08). Those guarantees would be released after the issuance of the property ownership certificates and are thus little likely to incur losses. Therefore, the management believed that it was not necessary to make provision for the guarantees. |
(iii) Entrust the management of the cash assets of others
1. Entrusted financial management
(1). The totality of entrusted financial management
√Applicable □Not Applicable
Unit: RMB10,000
| Type | Source of funds | Amount | Unexpired balance | Overdue unrecovered amount |
| Non-guaranteed floating income | Self-owned funds | 1,850 | 1,000 | - |
| Principal Guaranteed Fixed Income | Self-owned funds | 1,500 | 1,500 | - |
Other information
□Applicable √Not Applicable
(2). Individual entrusted financial management
□Applicable √Not Applicable
Other information
□Applicable √Not Applicable
(3). Entrusted financial management impairment provision
□Applicable √Not Applicable
2. Entrusted Loan
(1). Total entrusted loan
□Applicable √Not Applicable
Other information
√Applicable □Not Applicable
1. After review and approval at the 44th meeting of the sixth Board of Directors of the Companyin April 2014 and the 22nd meeting of the seventh Board of Directors of the Company in March2016, the Company applied to the Export-Import Bank of China for a total loan of RMB 700 million.Special entrusted loans to market merchants are valid within 2 years from the date of approval bythe Board of Directors. The Company's loans to the Export-Import Bank of China are guaranteed byMDG, and Shanghai Pudong Development Bank Yiwu Branch acts as an entrusted loan processing
bank. Market traders who entrust loans are pledged with the right to use shops in China CommodityCity.There are no new entrusted loans in this period, and all entrusted loans issued in the previousperiod have expired.As of December 31, 2021, there were 13 overdue loans with an amount of RMB 2.9173 million(if there is any loss outside the quota after the auction of the right to use the shop, it will becompensated).
(2). Single Entrusted Loan
□Applicable √Not Applicable
Other information
□Applicable √Not Applicable
(3). Entrusted loan impairment provision
□Applicable √Not Applicable
3. Other information
□Applicable √Not Applicable
(iv) Other material contracts
√Applicable □Not Applicable
| No. | Name of contract | Contracting party | Contract price (RMB10,000) |
| 1 | Yiwu International Trade City Zone II East Parking Building Project Construction Contract 1 | Yiwu Haoyang Construction Co., Ltd. | 28,450.06 |
| 2 | Equity Transfer Agreement | Haier Group (Qingdao) Financial Holdings Co., Ltd. | 44,930.00 |
| 3 | Yiwu Comprehensive Bonded Zone New Import Market - South Zone Engineering Contract | Zhejiang Construction Engineering Group Co., Ltd. | 63,710.82 |
| 4 | Yiwu Comprehensive Bonded Zone New Import Market - North Zone Engineering Contract | China Construction Seventh Engineering Bureau Co., Ltd. | 72,323.68 |
| 5 | Yiwu Digital Trade Industrial Park Engineering Construction Project Construction Contract | Zhongtian Construction Group Co., Ltd. | 23,752.62 |
XIV. Explanation on other major events that have a significant impact on investors' value
judgments and investment decisions
□Applicable √Not Applicable
Section VII. Changes in Shares and ShareholdersI. Changes in equity(i) Exhibition of changes in shares
1. Exhibition of changes in shares
Unit: Ten Thousand Shares
| Before this change | Increase or decrease in the current period (+, -) | After this change | |||||||
| Quantity | Proportion (%) | New shares issued | Bonus shares | Shares converted from capital reserve | Others | Sub-total | Quantity | Proportion (%) | |
| I. Restricted shares | 0 | 0 | 4,904 | 0 | 0 | -98 | 4,806 | 4,806 | 0.88 |
| 1. Shares held by other domestic capitals | 0 | 0 | 4,904 | 0 | 0 | -98 | 4,806 | 4,806 | 0.88 |
| In which: shares held by domestic non-state-owned natural persons | 0 | 0 | 4,904 | 0 | 0 | -98 | 4,806 | 4,806 | 0.88 |
| II. Unrestricted shares | 544,321.4176 | 100 | 0 | 0 | 0 | 0 | 0 | 544,321.4176 | 99.12 |
| 1. RMB-denominated common shares | 544,321.4176 | 100 | 0 | 0 | 0 | 0 | 0 | 544,321.4176 | 99.12 |
| III. Total number of shares | 544,321.4176 | 100 | 4,904 | 0 | 0 | -98 | 4,806 | 549,127.4176 | 100 |
2. Description of changes in shares
√Applicable □Not Applicable
On January 15, 2021, due to the first grant of the 2020 restricted equity incentive plan, anadditional 46.7 million shares of restricted shares were issued.On November 4, 2021, due to the reserved grant of the 2020 Restricted Equity incentive Plan,an additional 2.34 million shares of restricted tradable shares were added.On November 30, 2021, because some incentive objects no longer met the incentiveconditions, the Company repurchased and cancelled 980,000 shares of restricted shares.
3. The impact of changes in shares on financial indicators such as earnings per share and
net assets per share in the most recent year and the most recent period (if any)
√Applicable □Not Applicable
During the reporting period, the Company's share capital changed due to the implementation ofthe restricted equity incentive plan. For details, please refer to "Section II, VII. Major accountingdata and financial indicators in the past three years."
4. Other matters the Company deems it necessary to disclose or required by the securities
regulatory authority to be disclosed
□Applicable √Not Applicable
(ii) Changes in non-tradable shares
√Applicable □Not Applicable
Unit: 10,000 shares
| Shareholder | Number of restricted shares at the beginning of the year | Number of restricted shares released during the year | Number of increased restricted shares during the year | Number of restricted shares at the end of the year | Reasons for restriction on trade | Release date |
| 386 incentive objects for first-time grand of the restricted equity incentive plan in 2020 | 0 | 0 | 4,572 | 4,572 | Restricted equity incentives | The lock-up period is 24 months, 36 months and 48 months from the date when the registration of the reserved grant is completed. |
| 31 incentive objects for reserved grant of restricted equity incentive plan in 2020 | 0 | 0 | 234 | 234 | Restricted equity incentives | The lock-up period is 24 months, 36 months and 48 months from the date when the registration of the reserved grant is completed. |
| Total | 0 | 0 | 4,806 | 4,806 | / | / |
Note: The Company granted 46.7 million shares to 395 incentive objects for the first time. Because9 incentive objects no longer met the incentive conditions, the Company repurchased and cancelled980,000 shares of restricted shares. As of the end of the reporting period, there were 386 survivingfirst-time incentive objects, holding a total of 45.72 million restricted shares.
II. Securities issuance and listing(i) Securities issuance as of the reporting period
√Applicable □Not Applicable
Currency: 10,000 shares Currency: RMB
| Stocks and derivatives Types of | Issue date | Issuing price (or interest | Issuing number | Listing date | Number of approved listing | Transaction termination date |
| securities | rate) | transactions | ||||
| Common stock class | ||||||
| A share | January 15, 2021 | RMB 2.94 /share | 4,670 | January 15, 2021 | 4,670 | |
| A share | November 4, 2021 | RMB 2.39 / share | 234 | November 4, 2021 | 234 | |
| Bonds (including corporate bonds, corporate bonds, and non-financial corporate debt financing instruments) | ||||||
| 19 YIWU CCC 01 | June 3, 2019 | 4.30% | 800 | June 18, 2019 | 800 | June 5, 2022 |
| 19 YIWU CCC 02 | September 26, 2019 | 3.99% | 700 | October 15, 2019 | 700 | September 27, 2022 |
Notes on the issuance of securities as of the reporting period (for bonds with different interest ratesduring the duration, please specify separately):
√Applicable □Not Applicable
In accordance with the CSRC License [2019] 380 document issued by the China SecuritiesRegulatory Commission on March 14, 2019, the Company publicly issued RMB 800,000,000 ofcorporate bonds on June 3, 2019. The face value of the current bonds is RMB 100 and the couponrate is 4.30 %. It was listed and traded on the Shanghai Stock Exchange on June 18, 2019. Theabbreviation of the bond is 19XS01 and the bond code is 155450.In accordance with the document Zheng Jian Li [2019] No. 380 issued by the China SecuritiesRegulatory Commission on March 14, 2019, the Company publicly issued RMB 700,000,000 ofcorporate bonds on September 26, 2019. The face value of the current bonds is RMB 100, and thecoupon rate is 3.99%. It was listed and traded on the Shanghai Stock Exchange on October 15,2019. The abbreviation of the bond is 19XS02 and the bond code is 155750.
(ii) Changes in the total number of shares of the Company, the shareholder structure, and
changes in the Company's assets and liabilities structure
□Applicable √Not Applicable
(iii) Existing internal employee shares
□Applicable √Not Applicable
III. Shareholders and actual controllers(i) Total number of shareholders
| The total number of common shareholders as of the end of the reporting period | 178,184 |
| The total number of common shareholders (households) at the end of the previous month before the disclosure of the annual report | 174,429 |
(ii) Shareholdings of the top 10 shareholders and top 10 holders of tradable shares (orshareholders not subject to trading restrictions)
Unit: share
| Shares held by top 10 shareholders | |||||||
| Shareholder (full name) | Change during the reporting period | Number of shares held at the end of the reporting period | Proportion (%) | Number of non-tradable shares held | Pledge, mark or freezing | Ownership of shareholder | |
| Status of shares | Quantity | ||||||
| Yiwu China Commodities City Holdings Limited | 0 | 3,038,179,392 | 55.33 | 0 | None | 0 | State-owned legal person |
| Zhejiang Provincial Finance Development Ltd. | 0 | 147,466,528 | 2.69 | 0 | None | 0 | State-owned legal person |
| Hong Kong Securities Clearing Company Ltd.(HKSCC) | 50,437,703 | 63,910,325 | 1.16 | 0 | Unknown | 0 | Others |
| LI Guoping | 41,954,500 | 41,954,500 | 0.76 | 0 | Unknown | 0 | Domestic natural person |
| LIU Jiaxuan | 30,401,500 | 30,401,500 | 0.55 | 0 | Unknown | 0 | Domestic natural person |
| Bosera Funds－Agricultural Bank of China－Bosera China Securities Financial Assets Management Scheme | 0 | 27,672,800 | 0.50 | 0 | Unknown | 0 | Unknown |
| E Fund－Agricultural Bank of China－E Fund China Securities Financial Assets Management Scheme | 0 | 27,672,800 | 0.50 | 0 | Unknown | 0 | Unknown |
| Dacheng Fund－Agricultural Bank of China－Dacheng China Securities Financial Assets Management Scheme | 0 | 27,672,800 | 0.50 | 0 | Unknown | 0 | Unknown | |
| GF Fund－Agricultural Bank of China－GF China Securities Financial Assets Management Scheme | 0 | 27,672,800 | 0.50 | 0 | Unknown | 0 | Unknown | |
| Zhong Ou AMC－Agricultural Bank of China－Zhong Ou China Securities Financial Assets Management Scheme | 0 | 27,672,800 | 0.50 | 0 | Unknown | 0 | Unknown | |
| Southern Asset Management－Agricultural Bank of China－Southern China Securities Financial Assets Management Scheme | 0 | 27,672,800 | 0.50 | 0 | Unknown | 0 | Unknown | |
| ICBC Credit Suisse Asset Management－Agricultural Bank of China－ICBC Credit Suisse China Securities Financial Assets Management Scheme | 0 | 27,672,800 | 0.50 | 0 | Unknown | 0 | Unknown | |
| Shares held by top 10 holders of tradable shares | ||||||||
| Shareholder | Number of tradable shares held | Type and quantity of shares | ||||||
| Type | Quantity | |||||||
| Yiwu China Commodities City Holdings Limited | 3,038,179,392 | RMB-denominated common share | 3,038,179,392 |
| Zhejiang Provincial Finance Development Ltd. | 147,466,528 | RMB-denominated common share | 147,466,528 |
| Hong Kong Central Clearing Company Limited | 63,910,325 | RMB-denominated common share | 63,910,325 |
| LI Guoping | 41,954,500 | RMB-denominated common share | 41,954,500 |
| LIU Jiaxuan | 30,401,500 | RMB-denominated common share | 30,401,500 |
| Bosera Funds－Agricultural Bank of China－Bosera China Securities Financial Assets Management Scheme | 27,672,800 | RMB-denominated common share | 27,672,800 |
| E Fund－Agricultural Bank of China－E Fund China Securities Financial Assets Management Scheme | 27,672,800 | RMB-denominated common share | 27,672,800 |
| Dacheng Fund－Agricultural Bank of China－Dacheng China Securities Financial Assets Management Scheme | 27,672,800 | RMB-denominated common share | 27,672,800 |
| GF Fund－Agricultural Bank of China－GF China Securities Financial Assets Management Scheme | 27,672,800 | RMB-denominated common share | 27,672,800 |
| Zhong Ou AMC－Agricultural Bank of China－Zhong Ou China Securities Financial Assets Management Scheme | 27,672,800 | RMB-denominated common share | 27,672,800 |
| Southern Asset Management－Agricultural Bank of China－Southern China Securities Financial Assets Management Scheme | 27,672,800 | RMB-denominated common share | 27,672,800 |
| ICBC Credit Suisse Asset Management－Agricultural Bank of China－ICBC Credit Suisse China Securities Financial Assets Management Scheme | 27,672,800 | RMB-denominated common share | 27,672,800 |
| Explanation on the relationship or concerted action between the above shareholders | Zhejiang Finance Development Co., Ltd. holds 9.44% of the shares of Yiwu State-owned Capital Operation Co., Ltd., the controlling shareholder of Yiwu China Commodity City Holding Limited, the controlling shareholder of Yiwu Market Development Group Co., Ltd. | ||
| Explanation on the preferred shareholders whose voting rights had been restituted and the quantity of shares held thereby | None | ||
Number of shares held by the top 10 shareholders subject to trading restrictions and the tradingrestriction conditions
□Applicable √Not Applicable
(iii) Strategic investors or general legal persons became the top 10 shareholders due to theplacement of new shares.
□Applicable √Not Applicable
IV. Controlling shareholder and actual controller(i) Controlling shareholder
1. Legal person
√Applicable □Not Applicable
| Name | Yiwu China Commodities City Holdings Limited |
| The person in charge or legal representative of the unit | ZHAO Wenge |
| Date of establishment | October 29, 2019 |
| Main business | State-owned shareholding platform |
| Shareholdings of other domestic and overseas listed companies that hold or participate in shares during the reporting period | None |
| Other statements | None |
2. Natural person
□Applicable √Not Applicable
3. Special statement that the Company does not have a controlling shareholder
□Applicable √Not Applicable
4. Explanation on Changes in Controlling shareholder During the Reporting Period
□Applicable √Not Applicable
5. Block diagram of the property rights and control relationship between the Company and
the controlling shareholder
√Applicable □Not Applicable
(ii) The actual controller
1. Legal person
√Applicable □Not Applicable
| Name | State-owned Assets Supervision and Administration Office of the People’s Government of Yiwu |
55.33%
| The person in charge or legal representative of the unit | YU Huazhong |
| Date of establishment | March 26, 2009 |
| Main business | State-owned capital management and state-owned equity management |
| Shareholdings of other domestic and overseas listed companies that hold or participate in shares during the reporting period | None |
| Other statements | None |
2. Natural person
□Applicable √Not Applicable
3. Special explanation that the Company does not have an actual controller
□Applicable √Not Applicable
4. Explanation on changes in the Company's control during the reporting period
□Applicable √Not Applicable
5. Block diagram of the property rights and control relationship between the Company andthe actual controller
√Applicable □Not Applicable
6. The actual controller controls the Company through trust or other asset management
methods.
□Applicable √Not Applicable
(iii) Other introductions of controlling shareholder and actual controllers
□Applicable √Not Applicable
V. The controlling shareholder or the largest shareholder of the Company and its personsacting in concert have accumulatively pledged shares that account for more than 80%of the Company's shares held by them
□Applicable √Not Applicable
VI. Other corporate shareholders holding more than 10% of the shares
□Applicable √Not Applicable
VII. Description of share restriction reduction
□Applicable √Not Applicable
VIII. The specifics of implementation of share repurchase during the reporting period
□Applicable √Not Applicable
Section VIII. Preferred Shares
□Applicable √Not Applicable
Section IX. Bonds
I. Corporate bonds, corporate bonds and non-financial corporate debt financinginstruments
√Applicable □Not Applicable
(i) Corporate bonds
□Applicable √Not Applicable
(ii) Corporate bonds
√Applicable □Not Applicable
1. Basic information on corporate bonds
Unit: RMB 100 million Currency: RMB
| Name of bond | Abbreviation | Code | Issue date | Value date | Maturity date | Outstanding amount | Interest rate (%) | Method of principal repayment and interest payment | Marketplace | Whether there is a risk of terminating the transaction in the stock market |
| Publicly offered corporate bond 2019 of Zhejiang China Commodities City Group Co., Ltd (Phase I) | 19 YIWU CCC 01 | 155450 | June 3, 2019 | June 5, 2019 | June 5, 2022 | 8 | 4.3 | For the principal repayment and interest payment of the bond, the list of bondholders would be made according to the relevant provisions of the bond registration authority. The specific matters shall be handled according to the relevant provisio | Shanghai Stock Exchange | No |
| ns of the bond registration authority. | ||||||||||
| Publicly offered corporate bond 2019 of Zhejiang China Commodities City Group Co., Ltd (Phase II) | 19 YIWU CCC 02 | 155750 | September 26, 2019 | September, 2019 | September 27, 2022 | 7 | 3.99 | For the principal repayment and interest payment of the bond, the list of bondholders would be made according to the relevant provisions of the bond registration authority. The specific matters shall be handled according to the relevant provisions of the bond registration authority. | Shanghai Stock Exchange | No |
The Company's measures to deal with the risk of bond termination
□Applicable √Not Applicable
Bonds overdue
□Applicable √Not Applicable
Bond interest payment during the reporting period
√Applicable □Not Applicable
| Name of bond | Description of interest payment |
| Publicly offered corporate bond 2019 of Zhejiang China Commodities City Group Co., Ltd (Phase I) | On June 7, 2021, the Company paid interest to all "19XS01" holders on time from June 5, 2020 to June 4, 2021. |
| Publicly offered corporate bond 2019 of Zhejiang China Commodities City Group Co., Ltd (Phase II) | On September 27, 2021, the Company paid interest to all "19XS02" holders on time from September 27, 2020 to September 26, 2021. |
2. Issuer or investor option clause, investor protection clause trigger and enforcement
□Applicable √Not Applicable
3. Intermediaries providing services for bond issuance and duration business
| Intermediary name | Office address | Name of the Signing Certified Public Accountants | Contact person | Contact number |
| Haitong Securities Co., Ltd. | 15/F Yuanxiangtai Building, No.5 Anding Road, Chaoyang District, Beijing | XU Kangwei, YE Shaokuan | HU Chenghao | 17701835535 |
Changes to the above intermediaries
□Applicable √Not Applicable
4. Use of raised funds at the end of the reporting period
√Applicable □Not Applicable
Unit: RMB 100 million Currency: RMB
| Name of bond | Total amount of funds raised | Amount used | Amount unused | Operation of the special account for raised funds (if any) | Rectification of illegal use of raised funds (if any) | Whether it is consistent with the purpose, using plan and other agreements promised in the prospectus |
| Publicly offered corporate bond 2019 of Zhejiang China Commodities City Group Co., Ltd (Phase I) | 8 | 8 | 0 | None | None | Yes |
| Publicly offered corporate bond 2019 of Zhejiang China Commodities City Group Co., Ltd (Phase II) | 7 | 7 | 0 | None | None | Yes |
The progress and operational benefits of raised funds used for construction projects
□Applicable √Not Applicable
Explanation on changing the use of the above-mentioned bonds raised during the reporting period
□Applicable √Not Applicable
Other statements
□Applicable √Not Applicable
5. Adjustment in credit rating results
□Applicable √Not Applicable
Other statements
√Applicable □Not Applicable
Shanghai Brilliance Credit Rating & Investors Service Co., Ltd. issued the Credit RatingSurveillance Report on Zhejiang China Commodities City Group Co., Ltd. and Bonds Publicly
Issued by It [Brilliance Surveillance (2021) 100719] on Jun 28, 2021. The Company had an issuerrating of AAA with stable outlook, and the bonds had a rating of AAA.
6. The implementation, changes and impacts of guarantees, debt repayment plans andother debt repayment protection measures during the reporting period and theirimpacts
□Applicable √Not Applicable
7. Other statement on corporate bonds
□Applicable √Not Applicable
(iii) Non-financial corporate debt financing instruments in the inter-bank bond market
√Applicable □Not Applicable
1. Non-financial corporate debt financing instruments
Unit: RMB 100 million Currency: RMB
| Name of bond | Abbreviation | Code | Issue date | Value date | Maturity date | Outstanding amount | Interest rate (%) | Method of principal repayment and interest payment | Marketplace | Investor appropriate arrangements (if any) | Trade mechanism | Whether there is a risk of terminating the transaction in the stock market |
| Zhejiang China Commodities City Group Co., Ltd.’s 2019 MTN (Issue 1) | 19 Zhejiang Yiwu CCC MTN001 | 101900921 | July 11, 2019 to July 12, 2019 | July 15, 2019 | July 15, 2022 | 10 | 3.99 | One-time repayment of principal and interest at maturity. | Interbank market | None | No | |
| Zhejiang China Commodities City Group Co., Ltd.'s 2019 MTN (Issue 2) | 19 Zhejiang Yiwu CCC MTN002 | 101901396 | October 17, 2019 to October 18, 2019 | October 21, 2019 | October 21, 2022 | 10 | 3.97 | One-time repayment of principal and interest at maturity. | Interbank market | None | No | |
| Zhejiang China Commodities City Group Co., Ltd.’s 2021 Super | 21 Zhejiang Yiwu CCC SCP008 | 012103893 | October 25, 2021 to October 26, 2021 | October 27, 2021 | July 22, 2022 | 10 | 2.98 | One-time repayment of principal and interest at maturity. | Interbank marke | None | No |
| Short-term Financing Bonds (Issue 8) | t | |||||||||||
| Zhejiang China Commodities City Group Co., Ltd.’s 2021 Super Short-term Financing Bonds (Issue 9) | 21 Zhejiang Yiwu CCC SCP009 | 012104113 | November 11, 2021 to November 12, 2021 | November 15, 2021 | August 12, 2022 | 10 | 2.87 | One-time repayment of principal and interest at maturity. | Interbank market | None | No | |
| Zhejiang China Commodities City Group Co., Ltd.’s 2021 Super Short-term Financing Bonds (Issue 10) | 21 Zhejiang Yiwu CCC SCP010 | 012105209 | November 26, 2021 to November 29, 2021 | November 30, 2021 | August 26, 2022 | 10 | 2.84 | One-time repayment of principal and interest at maturity. | Interbank market | None | No |
The Company's measures to deal with the risk of bond termination
□Applicable √Not Applicable
Bonds overdue
□Applicable √Not Applicable
Bond interest payment during the reporting period
√Applicable □Not Applicable
| Name of bond | Description of interest payment |
| Zhejiang China Commodities City Group Co., Ltd.’s 2018 MTN (Issue 1) | On September 6, 2021, the Company paid the interest to the holders of "18 Zhejiang Yiwu CCC MTN001" for the period from September 6, 2020 to September 5, 2021 on time. |
| Zhejiang China Commodities City Group Co., Ltd.’s 2019 MTN (Issue 1) | On July 15, 2021, the Company paid the interest to the holders of "19 Zhejiang Yiwu CCC MTN001" for the period from July 15, 2020 to July 14, 2021 on time. |
| Zhejiang China Commodities City Group Co., Ltd.’s 2019 MTN (Issue 2) | On October 21, 2021, the Company paid the interest to the holders of "19 Zhejiang Yiwu CCC MTN002" for the period from October 21, 2020 to October 20, 2021 on time. |
| Zhejiang China Commodities City Group Co., Ltd.’s 2020 Super Short-term Financing Bonds (Issue | On March 9, 2021, the Company paid the interest for the period from December 9, 2020 to March 8, 2021 and principal to the holders of "20 Zhejiang Yiwu CCC SCP007" on time. |
| 7) | |
| Zhejiang China Commodities City Group Co., Ltd.’s 2020 Super Short-term Financing Bonds (Issue 8) | On January 22, 2021, the Company paid the interest for the period from December 25, 2020 to January 21, 2021 and principal to the holders of "20 Zhejiang Yiwu CCC SCP008" on time. |
| Zhejiang China Commodities City Group Co., Ltd.’s 2021 Super Short-term Financing Bonds (Issue 1) | On April 16, 2021, the Company paid the interest for the period from January 18, 2021 to April 15, 2021 and principal to the holders of "21 Zhejiang Yiwu CCC SCP001" on time. |
| Zhejiang China Commodities City Group Co., Ltd.’s 2021 Super Short-term Financing Bonds (Issue 2) | On August 24, 2021, the Company paid the interest for the period from February 23, 2021 to August 23, 2021 and principal to the holders of "21 Zhejiang Yiwu CCC SCP002" on time. |
| Zhejiang China Commodities City Group Co., Ltd.’s 2021 Super Short-term Financing Bonds (Issue 3) | On June 4, 2021, the Company paid the interest for the period from March 8, 2021 to June 3, 2021 and principal to the holders of "21 Zhejiang Yiwu CCC SCP003" on time. |
| Zhejiang China Commodities City Group Co., Ltd.’s 2021 Super Short-term Financing Bonds (Issue 4) | On July 13, 2021, the Company paid the interest for the period from April 14, 2021 to July 12, 2021 and principal to the holders of "21 Zhejiang Yiwu CCC SCP004" on time. |
| Zhejiang China Commodities City Group Co., Ltd.’s 2021 Super Short-term Financing Bonds (Issue 5) | On October 29, 2021, the Company paid the interest for the period from June 2, 2021 to October 28, 2021 and principal to the holders of "21 Zhejiang Yiwu CCC SCP005" on time. |
| Zhejiang China Commodities City Group Co., Ltd.’s 2021 Super Short-term Financing Bonds (Issue 6) | On October 7, 2021, the Company paid the interest for the period from July 8, 2021 to December 6, 2021 and principal to the holders of "21 Zhejiang Yiwu CCC SCP006" on time. |
| Zhejiang China Commodities City Group Co., Ltd.’s 2021 Super Short-term Financing Bonds (Issue 7) | On November 18, 2021, the Company paid the interest for the period from August 20, 2021 to November 17, 2021 and principal to the holders of "21 Zhejiang Yiwu CCC SCP007" on time. |
2. Issuer or investor option clause, investor protection clause trigger and enforcement
□Applicable √Not Applicable
3. Intermediaries providing services for bond issuance and duration business
| Intermediary name | Office address | Name of the Signing Certified Public Accountants | Contact person | Contact number |
| China Merchants | No. 7088 Shennan | ZHU Wei, ZENG | BAO | 18257915891 |
| Bank Co., Ltd. | Avenue, Futian District, Shenzhen, Guangdong, China | Hao | Chentao | |
| Agricultural Bank of China Limited | No. 69, Jianguomen Inner Street, Dongcheng District, Beijing, China | Han Dan, Zhang Honglei | CHEN Jie | 15215859317 |
| Shanghai Pudong Development Bank Co., Ltd. | No. 12, Zhongshan East 1st Road, Shanghai | SHI Haiyun, DOU Youming | XU Haokang | 13732437619 |
| Industrial and Commercial Bank of China Limited | No. 55, Fuxingmen Inner Street, Xicheng District, Beijing, China | Li Li, He Qi | WANG Ziqiang | 18857980520 |
| China Construction Bank Corporation | No. 25 Jinron Street, Xicheng District, Beijing | Wang Pengcheng, Tian Zhiyong, Feng Suoteng | WU Yanting | 15067057702 |
Changes to the above intermediaries
□Applicable √Not Applicable
4. Use of raised funds at the end of the reporting period
√Applicable □Not Applicable
Unit: RMB 100 million Currency: RMB
| Name of bond | Total amount of funds raised | Amount used | Amount unused | Operation of the special account for raised funds (if any) | Rectification of illegal use of raised funds (if any) | Whether it is consistent with the purpose, using plan and other agreements promised in the prospectus |
| Zhejiang China Commodities City Group Co., Ltd.’s 2021 Super Short-term Financing Bonds (Issue 1) | 10 | 10 | 0 | None | None | Yes |
| Zhejiang China Commodities City Group Co., Ltd.’s 2021 Super Short-term Financing Bonds (Issue 2) | 10 | 10 | 0 | None | None | Yes |
| Zhejiang China Commodities City Group Co., Ltd.’s 2021 Super Short-term Financing Bonds (Issue 3) | 10 | 10 | 0 | None | None | Yes |
| Zhejiang China Commodities City Group Co., Ltd.’s 2021 Super Short-term Financing Bonds (Issue 4) | 10 | 10 | 0 | None | None | Yes |
| Zhejiang China Commodities City Group Co., Ltd.’s 2021 Super Short-term Financing Bonds (Issue 5) | 10 | 10 | 0 | None | None | Yes |
| Zhejiang China Commodities City Group Co., Ltd.’s 2021 Super Short-term Financing Bonds (Issue 6) | 10 | 10 | 0 | None | None | Yes |
| Zhejiang China Commodities City Group Co., Ltd.’s 2021 Super | 10 | 10 | 0 | None | None | Yes |
| Short-term Financing Bonds (Issue 7) | ||||||
| Zhejiang China Commodities City Group Co., Ltd.’s 2021 Super Short-term Financing Bonds (Issue 8) | 10 | 10 | 0 | None | None | Yes |
| Zhejiang China Commodities City Group Co., Ltd.’s 2021 Super Short-term Financing Bonds (Issue 9) | 10 | 10 | 0 | None | None | Yes |
| Zhejiang China Commodities City Group Co., Ltd.’s 2021 Super Short-term Financing Bonds (Issue 10) | 10 | 10 | 0 | None | None | Yes |
The progress and operational benefits of raised funds used for construction projects
□Applicable √Not Applicable
Explanation on changing the use of the above-mentioned bonds raised during the reporting period
□Applicable √Not Applicable
Other statements
□Applicable √Not Applicable
5. Adjustment in credit rating results
□Applicable √Not Applicable
Other statements
√Applicable □Not Applicable
Shanghai Brilliance Credit Rating & Investors Service Co., Ltd. issued the Credit RatingSurveillance Report on Zhejiang China Commodities City Group Co., Ltd. and Bonds PubliclyIssued by It [Brilliance Surveillance (2021) 100719] on Jun 28, 2021. The Company had an issuerrating of AAA with stable outlook, and the bonds had a rating of AAA.
6. The implementation, changes and impacts of guarantees, debt repayment plans and
other debt repayment protection measures during the reporting period and their
impacts
□Applicable √Not Applicable
7. Explanation on other situations relevant to non-financial corporate debt financing
instruments
□Applicable √Not Applicable
(iv) During the reporting period, the Company's loss in the scope of consolidated
statements exceeded 10% of its net assets as of the the end of the previous year.
□Applicable √Not Applicable
(v) Interest-bearing debts other than bonds overdue at the end of the reporting period
□Applicable √Not Applicable
(vi) Influence of violations of laws and regulations, the Company's Articles of Association,information disclosure affairs management system and the stipulations or commitments inthe bond prospectus during the reporting period on the rights and interests of bondinvestors
□Applicable √Not Applicable
(vii) The Company's accounting data and financial indicators for the past 2 years as ofthe end of the reporting period
√Applicable □Not Applicable
Unit: RMB
| Major indicator | 2021 | 2020 | Increase/decrease in the current period as compared to the prior corresponding period (%) | Reasons for change |
| Net profit after deduction of non-recurring gains and losses | 1,221,808,001.15 | 517,246,267.88 | 136.21 | |
| Current ratio | 58.91% | 91.44% | -35.57 | |
| Quick ratio | 50.12% | 79.45% | -36.91 | |
| Debt-to-asset ratio (%) | 52.83 | 52.78 | 0.08 | |
| EBITDA to total debt ratio | 0.32 | 0.27 | 20.94 | |
| Interest coverage ratio | 5.85 | 4.42 | 32.55 | |
| Cash interest protection multiple | 7.19 | 3.13 | 129.75 | |
| EBITDA-to-interest coverage ratio | 7.99 | 6.04 | 32.26 | |
| Loan repayment rate (%) | 100 | 100 | ||
| Interest payment rate (%) | 100 | 100 |
II. Convertible corporate bonds
□Applicable √Not Applicable
Section X. Financial ReportI. Auditor’s report
√Applicable □Not Applicable
All the shareholders of Zhejiang China Commodities City Group Co., Ltd.
1. Audit opinion
We have audited the financial statements of Zhejiang China Commodities City Group Co.,Ltd., including Consolidated & Corporate Balance Sheets as of December 31, 2021,Consolidated & Corporate Income Statements, Consolidated & Corporate Cash FlowStatements, Consolidated & Corporate Statements of Changes in Owner’s Equity for 2021 andNotes to the Financial Statements.
We believe that the attached financial statements were prepared according to AccountingStandards for Zhejiang China Commodities City Group Co., Ltd. in all material aspects as a fairreflection of the consolidated and parent company’s financial status of Zhejiang ChinaCommodities City Group Co., Ltd. on the December 31, 2021 and the operation outcomes andcash flows of the Company for 2021.
2. Basis of audit opinion
We conducted our audit in accordance with the Auditing Standards for Chinese CertifiedPublic Accountants. The section “CPAs’ Responsibility for Audit of Financial Statements” in theaudit report further describes on our responsibilities under these standards. In accordance withthe CPA Code of Ethics in China, we are independent of Zhejiang China Commodities CityGroup Co., Ltd. and have performed other responsibilities in respect of professional ethics.We believe that the audit evidence we have acquired is sufficient and effective, providing a reasonable basis for our opinion.
3. Key audit matters
Key audit matters are matters that we believe are the most important matters for the auditof the financial statements for 2018 based on professional judgment. The response to suchmatters is based on the background of auditing the financial statements as a whole andforming an audit opinion. We do not express independent opinions on such matters. This wasalso the background for our description for how every matter below was responded in theaudit.
We have fulfilled the responsibilities described in the "Certified Accountants'Responsibilities for the Audit of Financial Statements" section of this report, including thoserelated to these key audit matters. Correspondingly, our audit work included theimplementation of audit procedures designed to deal with the assessed risk of materialmisstatement in the financial statements. The results of our audit procedures, including theprocedures performed in response to the following key audit matters, provide a basis for theexpression of the audit opinion in the financial statements as a whole.
| Key audit matters: | Audit response to the matter: |
| Impairment of non-goodwill long-term assets with certain useful life | |
| As of December 31, 2021, the book value of the non-goodwill assets with certain useful life in the Group’s market and supporting hotels, exhibition halls and commercial buildings, such as the corresponding property, plant and equipment, investment real estate, land use rights, construction in progress, right-of-use assets and long-term deferred expenses(hereinafter collectively referred to as "long-term assets") totaled RMB 13.60020 billion, accounting for 44% of the total book value of the consolidated assets of the Group. When identifying whether the above-mentioned long-term assets have any indications of impairment, and when carrying out impairment tests on the long-term assets with indications of impairment, the Group needs to review the recoverable amount of the asset or asset Group. This requires the management to use major judgments and estimates to determine the estimated future sales income, gross profit, operating costs, the disposal value forecast and discount rate at the end of the useful life of the relevant assets and other key assumptions when predicting the present value of future cash flows.The evaluation process is complicated, so we identify them as key audit matters. Relevant information has been disclosed in Note V. 43 and Notes VII. 20, 21, 22, 25, 26 and 29 to the financial statements. | We reviewed the judgment of the management on the indications of impairment of long-term assets during the audit: 1. For long-term assets that involve impairment testing for indications of impairment, we have assessed the reasonableness of the asset Groups identified by the management; 2. With the assistance of internal valuation experts, we assessed the reasonableness of the major assumptions and evaluation methods used by the Group management, like discount rates; 3. We assessed the reasonableness of key assumptions such as estimated sales income, gross profit, operating costs, and disposal value predictions at the end of the useful life of related assets in the future years, and checked basic data on the present value of expected future cash flows with relevant supporting evidence. 4. We compared and analyzed the actual performance of the current year with the predicted performance of the previous year; 5. We checked the adequacy and completeness of the relevant disclosures of the Group in the notes to the financial statements. |
4. Other information
Zhejiang China Commodities City Group Co., Ltd.’s management is responsible for otherinformation. Such information includes the information covered by the annual report, but thefinancial statements and the audit report provided by us are excluded.Our audit opinion released in the financial statements does not cover other information andwe do not release any form of assurance conclusion on other information.
Our responsibility is to read other information in conjunction with our audit of the financialstatements. During the process, we consider whether there is a material inconsistency or othermaterial misstatement in the financial statements with the knowledge acquired by us during theaudit process.
Based on the work we have performed, if we determine that there is a materialmisstatement of other information, we should report the fact. We have nothing to report in thisaspect.
5. Responsibility of management and governance for financial statements
The management is responsible for preparing financial statements in accordance with theprovisions of the Accounting Standards for Business Enterprises to achieve fair reflection, anddesigning, implementing and maintaining necessary internal controlsto prevent these financial statements from material misstatement arising from fraud or error.
During preparing the financial statements, the management is responsible for assessingthe sustainable operation capabilities of Zhejiang China Commodities City Group Co., Ltd.,disclosing, as applicable, going-concern-related matters and applying the going-concernassumption unless the management plans to liquidate Zhejiang China Commodities City GroupCo., Ltd. and discontinue operations or has no other realistic choices.The governance is responsible for supervising the financial reporting process of ZhejiangChina Commodities City Group Co., Ltd.
6. Certified Public Accountants’ responsibility for audit of financial statements
Our goal is to obtain reasonable assurance about whether the financial statements arefree from material misstatement caused by fraud or error and express an opinion on thesefinancial statements based on our audits. The reasonable assurance is a guarantee at a highlevel, but there is no guarantee that an audit performed in accordance with the auditingstandards will always identify existing material misstatement. Misstatements may be caused byfraud or error. Misstatement is generally considered to be material if it is reasonably expectedthat the misstatement, alone or aggregated, may affect the financial decision made by theusers of the financial statements based on the financial statements.
We applied professional judgment and professional skepticism during conducting auditwork in accordance with the Auditing Standards for CPA while performing following works:
(1) Identifying and evaluating the risk of material misstatements of financial statements for
fraud or error designing and implementing audit procedures to deal with these risks andobtaining adequate and appropriate audit evidence as a basis for release of our auditopinion. As fraud may involve collusion, forgery, willful omission, misrepresentation oroverride of internal control, the risk of not discovering a material misstatement due tofraud is higher than the risk of not discovering a material misstatement resulting from anerror.
(2) Understanding the internal control related to the audit in order to design the appropriate
audit procedures.
(3) Evaluating the appropriateness of the accounting policies selected by management level
and the reasonableness of accounting estimates and related disclosures.
(4) Concluding the appropriateness of management level’s use of the going concern
assumption while drawing a conclusion as to whether there is any material uncertaintyabout the issues or circumstances that may cause major doubts about the ability of theZhejiang China Commodities City Group Co., Ltd. to continue as a going concern onbasis of the audit evidence acquired. If we conclude that there is a significantuncertainty, the auditing standards require us to remind user of the statements of therelevant disclosures in the financial statements in the audit report. If the disclosures areinadequate, we should release an unqualified opinion. Our conclusion is based on theinformation available by the date of the audit report. However, future events orcircumstances may result in Zhejiang China Commodities City Group Co., Ltd. beingunable to continue as a going concern.
(5) Evaluating the overall presentation, structure and content (including disclosure) of the
financial statements as well as whether the financial statements are a fair reflection ofthe related transactions and matters.
(6) Obtaining adequate and appropriate audit evidence on the financial information of the
entities or business activities in Zhejiang China Commodities City Group Co., Ltd. toexpress an opinion on the financial statements. We are responsible for directing,supervising and implementing the Group’s audit and assume full responsibility for theaudit opinion.
We have communicated with the governance on the matters such as the scope and timingof audit and major audit findings, including the notable defects of internal control identified inour audit.
We also provided a statement to the governance that we had complied with theprofessional ethics requirements related to independence, and communicated with thegovernance all relationships and other matters that may be reasonably believed to affect ourindependence, and related preventive measures (if applicable) .
In the matters communicated with the governance, we determined which matters shouldbe the most important to the audit of the financial statements of the current period, and should
constitute the key audit matters accordingly. We described such matters in the audit report,unless laws and regulations had prohibited public disclosure of these matters, or in rare cases,we determined that such matters should not be communicated in the audit report if thenegative consequences of communicating a matter in the audit report are reasonably expectedto outweigh the public interests.
Ernst & Young Hua Ming Certified Public Accountants (special general partnership) ChineseCPA: YIN Guowei(Project Partner)
Chinese CPA: Huang Zhigang
Beijing, China Mar 22, 2022
II. Financial statements
Consolidated Balance Sheet
December 31, 2021Prepared by: Zhejiang China Commodities City Group Co., Ltd.
Unit: RMB
| Item | Note | December 31, 2021 | December 31, 2020 |
| Current assets: | |||
| Monetary capital | 4,831,468,386.25 | 5,612,642,932.21 | |
| Held-for-trading financial assets | 75,375,083.20 | 51,712,734.31 | |
| Accounts receivable | 185,237,530.89 | 153,573,476.86 | |
| Prepayments | 875,167,709.48 | 105,187,528.26 | |
| Other receivables | 1,355,924,282.96 | 2,708,478,136.25 | |
| In which: interest receivable | 92,249,275.44 | 121,401,210.48 | |
| Inventory | 1,327,402,567.99 | 1,329,467,728.17 | |
| Other current assets | 248,662,219.40 | 179,724,694.17 | |
| Total current assets | 8,899,237,780.17 | 10,140,787,230.23 | |
| Non-current assets: | |||
| Long-term receivables | 222,307,363.40 | 126,756,573.81 | |
| Long-term equity investment | 5,772,455,242.84 | 3,832,897,502.71 | |
| Other equity instruments investment | 642,187,968.77 | 662,256,342.79 | |
| Other non-current financial assets | 1,524,819,255.41 | 1,523,925,249.81 | |
| Property investment | 2,973,936,400.46 | 1,960,426,291.73 | |
| Fixed assets | 5,078,590,929.75 | 5,234,293,786.87 | |
| Construction in progress | 1,090,577,963.27 | 982,891,877.14 | |
| Right-of-use assets | 225,347,077.14 | - | |
| Intangible assets | 4,043,564,662.35 | 3,900,780,981.92 | |
| Development expenses | 6,359,814.02 | 22,223,061.09 | |
| Long-term prepaid expenses | 188,184,376.43 | 110,728,723.36 | |
| Deferred income tax assets | 135,737,028.89 | 99,664,328.84 | |
| Other non-current assets | 211,329,650.45 | 152,495,196.56 | |
| Total non-current assets | 22,115,397,733.18 | 18,609,339,916.63 | |
| Total assets | 31,014,635,513.35 | 28,750,127,146.86 | |
| Current liabilities: | |||
| Short-term borrowings | 942,736,046.04 | 1,257,179,389.40 | |
| Accounts payable | 493,360,429.02 | 636,463,802.23 | |
| Advances from customers | 153,566,311.13 | 112,752,897.25 | |
| Contract liabilities | 4,058,419,224.84 | 2,442,211,788.88 | |
| Payroll payable | 243,964,755.38 | 161,498,997.53 | |
| Tax payable | 559,496,547.34 | 495,400,499.73 | |
| Other payables | 1,908,742,835.15 | 1,646,345,561.62 | |
| Non-current liabilities due within one year | 3,664,241,923.08 | 1,315,026,574.43 | |
| Other current liabilities | 3,081,384,800.50 | 3,023,608,041.68 | |
| Total current liabilities | 15,105,912,872.48 | 11,090,487,552.75 | |
| Non-current liabilities: | |||
| Long-term borrowings | 771,250,000.00 | 282,000,000.00 | |
| Bonds payable | - | 3,552,161,709.68 | |
| Lease liabilities | 205,942,673.93 | - | |
| Estimated liabilities | 110,620,306.10 | 110,620,306.10 | |
| Deferred income | 78,170,103.62 | 26,545,277.30 | |
| Deferred income tax liabilities | 111,897,463.42 | 113,602,923.79 | |
| Total non-current liabilities | 1,277,880,547.07 | 4,084,930,216.87 | |
| Total liabilities | 16,383,793,419.55 | 15,175,417,769.62 | |
| Owners’ equity (or shareholders’ equity) | |||
| Paid-in capital (share capital) | 5,491,274,176.00 | 5,489,914,176.00 | |
| Capital reserve | 1,631,509,114.96 | 1,594,906,524.67 | |
| Less: treasury stocks | 137,494,800.00 | 137,298,000.00 | |
| Other comprehensive income | 60,850,735.02 | 78,149,661.33 | |
| Surplus reserve | 1,505,209,795.50 | 1,364,257,808.58 | |
| Undistributed profits | 6,059,496,846.85 | 5,168,298,206.50 | |
| Total equity attributable to owners (shareholders) of the parent company | 14,610,845,868.33 | 13,558,228,377.08 | |
| Minority interest | 19,996,225.47 | 16,481,000.16 | |
| Total owners’ equity (or shareholders’ equity) | 14,630,842,093.80 | 13,574,709,377.24 | |
| Total liabilities and owners’ equity (or shareholders’ equity) | 31,014,635,513.35 | 28,750,127,146.86 | |
Legal Representative: Zhao Wenge Person in Charge of Finance: Wang Dong Head of FinanceDepartment: Zhao Difang
Balance Sheet of Parent Company
December 31, 2021Prepared by: Zhejiang China Commodities City Group Co., Ltd.
Unit: RMB
| Item | Note | December 31, 2021 | December 31, 2020 |
| Current assets: | |||
| Monetary capital | 4,327,117,133.34 | 5,435,867,497.50 | |
| Held-for-trading financial assets | 1,484.70 | 6,632.72 | |
| Accounts receivable | 23,629,682.69 | 14,671,577.47 | |
| Prepayments | 11,213,809.02 | 29,452,445.04 | |
| Other receivables | 1,207,086,885.99 | 2,651,640,610.06 | |
| In which: interest receivable | 92,249,275.44 | 121,401,210.48 | |
| Inventory | 7,308,939.20 | 10,144,965.06 | |
| Other current assets | 3,282,706,248.36 | 3,082,340,716.76 | |
| Total current assets | 8,859,064,183.30 | 11,224,124,444.61 | |
| Non-current assets: | |||
| Long-term receivables | 41,668,837.64 | 61,250,000.00 | |
| Long-term equity investment | 8,246,000,020.80 | 6,083,135,428.02 | |
| Other equity instruments investment | 642,187,968.77 | 662,256,342.79 | |
| Other non-current financial assets | 179,632,207.32 | 266,722,811.41 | |
| Property investment | 2,533,374,736.14 | 1,501,734,504.79 | |
| Fixed assets | 4,333,691,395.01 | 4,444,239,239.28 | |
| Construction in progress | 936,297,029.41 | 856,248,099.10 | |
| Right-of-use assets | 118,591,035.63 | - | |
| Intangible assets | 3,878,208,204.47 | 3,777,092,772.41 | |
| Long-term prepaid expenses | 165,720,500.56 | 58,705,952.97 | |
| Deferred income tax assets | 122,565,730.38 | 85,739,381.21 | |
| Other non-current assets | 65,607,343.55 | - | |
| Total non-current assets | 21,263,545,009.68 | 17,797,124,531.98 | |
| Total assets | 30,122,609,192.98 | 29,021,248,976.59 | |
| Current liabilities: | |||
| Short-term borrowings | 942,736,046.04 | 1,257,179,389.40 | |
| Accounts payable | 349,268,967.90 | 444,254,309.61 | |
| Advances from customers | 104,805,243.57 | 97,380,931.49 | |
| Contract liabilities | 3,029,673,931.75 | 2,283,994,068.70 | |
| Payroll payable | 203,724,767.47 | 131,469,702.81 | |
| Tax payable | 527,641,861.33 | 546,100,633.28 | |
| Other payables | 1,596,947,195.91 | 1,333,312,494.36 | |
| Non-current liabilities due within one year | 3,656,595,072.25 | 1,315,026,574.43 | |
| Other current liabilities | 3,452,451,678.36 | 3,556,664,822.79 | |
| Total current liabilities | 13,863,844,764.58 | 10,965,382,926.87 | |
| Non-current liabilities: | |||
| Long-term borrowings | 771,250,000.00 | 282,000,000.00 | |
| Bonds payable | - | 3,552,161,709.68 | |
| Lease liabilities | 113,367,062.05 | - | |
| Estimated liabilities | 110,620,306.10 | 110,620,306.10 | |
| Deferred income | 78,170,103.62 | 26,545,277.30 | |
| Deferred income tax liabilities | 43,870,176.87 | 69,623,249.14 | |
| Total non-current liabilities | 1,117,277,648.64 | 4,040,950,542.22 | |
| Total liabilities | 14,981,122,413.22 | 15,006,333,469.09 | |
| Owners’ equity (or shareholders’ equity) | |||
| Paid-in capital (share capital) | 5,491,274,176.00 | 5,489,914,176.00 | |
| Capital reserve | 1,866,141,278.50 | 1,833,256,515.22 | |
| Less: treasury stocks | 137,494,800.00 | 137,298,000.00 | |
| Other comprehensive income | 66,421,903.33 | 81,473,183.84 | |
| Surplus reserve | 1,505,156,319.67 | 1,364,204,332.75 | |
| Undistributed profits | 6,349,987,902.26 | 5,383,365,299.69 | |
| Total owners’ equity (or shareholders’ equity) | 15,141,486,779.76 | 14,014,915,507.50 | |
| Total liabilities and owners’ equity (or shareholders’ equity) | 30,122,609,192.98 | 29,021,248,976.59 | |
Legal Representative: Zhao Wenge Person in Charge of Finance: Wang Dong Head of FinanceDepartment: Zhao Difang
Consolidated Income Statement
January-December 2021
Unit: RMB
| Item | Note | 2021 | 2020 |
| I. Gross revenue | 6,033,842,972.95 | 3,725,686,100.39 | |
| In which: operating revenue | 6,033,842,972.95 | 3,725,686,100.39 | |
| II. Gross cost | 5,037,812,165.29 | 2,797,025,785.03 | |
| In which: Operating cost | 4,027,543,138.56 | 1,811,136,443.99 | |
| Taxes and surcharges | 161,759,208.82 | 165,885,982.83 | |
| Sales expenses | 204,745,974.57 | 241,889,186.44 | |
| Administrative expenses | 453,543,427.80 | 377,516,845.45 | |
| R&D expenses | 10,308,801.84 | 18,507,626.99 | |
| Financial expenses | 179,911,613.70 | 182,089,699.33 | |
| In which: interest expenses | 341,313,765.39 | 416,095,890.57 | |
| Interest income | 177,964,682.68 | 230,212,773.93 | |
| Plus: other income | 23,556,948.01 | 17,986,332.14 | |
| Investment income (loss is indicated by “-”) | 634,227,991.02 | 524,214,123.84 | |
| In which: income from investment in associates and joint ventures | 599,180,325.58 | 34,968,640.68 | |
| Changes in fair value (loss is indicated by “-”) | 7,231,321.84 | -32,955,861.63 | |
| Credit impairment loss (loss is indicated by “-”) | -7,299,694.67 | -2,282,683.90 | |
| Income from disposal of assets (loss is indicated by “-”) | 76,006.41 | 8,180,591.72 | |
| III. Operating profit (loss is indicated by “-”) | 1,653,823,380.27 | 1,443,802,817.53 | |
| Plus: income from non-operating activities | 5,766,372.46 | 4,425,072.97 | |
| Less: expenses from non-operating activities | 2,895,928.76 | 26,636,816.07 | |
| IV. Profits before tax (loss is indicated by “-”) | 1,656,693,823.97 | 1,421,591,074.43 | |
| Less: income tax | 327,525,237.95 | 499,755,019.22 | |
| V. Net profits (net loss is indicated by “-”) | 1,329,168,586.02 | 921,836,055.21 | |
| (I) Categorized by continuity of operation | |||
| Net profits from continuing operation (net loss is indicated by “-”) | 1,329,168,586.02 | 921,836,055.21 | |
| (II) Categorized by ownership | |||
| Net profits attributable to shareholders of the parent company (net loss is indicated by “-”) | 1,334,095,906.95 | 926,626,706.42 | |
| Minority interest(net loss is indicated by “-”) | -4,927,320.93 | -4,790,651.21 | |
| VI. Other comprehensive income, net of tax | -17,256,380.07 | 11,916,631.45 | |
| (I) Other comprehensive income attributable to owners of the parent company, net of tax | -17,298,926.31 | 11,882,468.59 | |
| 1. Other comprehensive income that cannot be reclassified as profits or loss | -15,051,280.51 | 15,051,280.51 | |
| (3) Changes in fair value of investments in other equity instruments | -15,051,280.51 | 15,051,280.51 | |
| 2 . Other comprehensive income that will be reclassified as profits or loss | -2,247,645.80 | -3,168,811.92 | |
| (6) Difference arising from the translation of foreign currency financial statements | -2,247,645.80 | -3,168,811.92 | |
| (2) After -tax net of other comprehensive income attributable to minority shareholders | 42,546.24 | 34,162.86 | |
| VII. Total comprehensive income | 1,311,912,205.95 | 933,752,686.66 | |
| (I) Total comprehensive income attributable to owners of the parent company | 1,316,796,980.64 | 938,509,175.01 | |
| (II) Total comprehensive income attributable to minority shareholders | -4,884,774.69 | -4,756,488.35 | |
| VIII. Earnings per share: | |||
| (I) Basic earnings per share | 0.25 | 0.17 | |
| (II) Diluted earnings per share | 0.25 | 0.17 | |
For merger of the enterprises under common control during the current period, net profits of themerged party prior to the merger were RMB 0, and net profits of the merged party during theprevious period were RMB 0.Legal Representative: Zhao Wenge Person in Charge of Finance: Wang Dong Head of FinanceDepartment: Zhao Difang
Income Statement of Parent Company
January-December 2021
Unit: RMB
| Item | Note | 2021 | 2020 |
| I. Operating revenue | 2,922,125,402.93 | 3,004,461,701.48 | |
| Less: Operating cost | 1,062,881,897.31 | 1,057,141,636.22 | |
| Taxes and surcharges | 132,198,523.20 | 132,358,447.92 | |
| Sales expenses | 158,004,638.76 | 239,654,404.97 | |
| Administrative expenses | 239,151,835.56 | 214,977,084.50 | |
| Financial expenses | 175,493,659.20 | 187,866,954.47 | |
| In which: interest expenses | 341,313,765.39 | 416,572,917.39 | |
| Interest income | 177,964,682.68 | 230,214,546.47 | |
| Plus: other income | 13,716,900.72 | 8,780,068.91 | |
| Investment income (loss is indicated by “-”) | 598,320,996.73 | 658,729,792.04 | |
| In which: income from investment in associates and joint ventures | 544,982,046.87 | 64,824,176.63 | |
| Changes in fair value (loss is indicated by “-”) | -83,904,126.09 | -103,343,955.11 | |
| Credit impairment loss (loss is indicated by “-”) | -989,960.58 | 205,158.05 | |
| Income from disposal of assets (loss is indicated by “-”) | -32,610.97 | 7,092,990.67 | |
| II. Operating profits (loss is indicated by “-”) | 1,681,506,048.71 | 1,743,927,227.96 | |
| Plus: income from non-operating activities | 5,508,893.78 | 2,350,534.71 | |
| Less: expenses from non-operating activities | 3,187,712.27 | 20,162,609.18 | |
| III. Profits before tax (loss is indicated by “-”) | 1,683,827,230.22 | 1,726,115,153.49 | |
| Less: income tax | 274,307,361.05 | 445,206,185.75 | |
| IV. Net profits (net loss is indicated by “-”) | 1,409,519,869.17 | 1,280,908,967.74 | |
| (I) Categorized by continuity of operation(net loss is indicated by “-”) | 1,409,519,869.17 | 1,280,908,967.74 | |
| V. Other comprehensive income, net of tax | -15,051,280.51 | 15,051,280.51 | |
| (I) Other comprehensive income that cannot be reclassified as profit or loss | -15,051,280.51 | 15,051,280.51 | |
| 3. Changes in fair value of investments in other equity instruments | -15,051,280.51 | 15,051,280.51 | |
| VI. Total comprehensive income | 1,394,468,588.66 | 1,295,960,248.25 |
Legal Representative: Zhao Wenge Person in Charge of Finance: Wang DongHead of Finance Department: Zhao Difang
Consolidated Cash Flow Statement
January-December 2021
Unit: RMB
| Item | Note | 2021 | 2020 |
| I. Cash flow from operating activities: | |||
| Cash received from sale of goods and rendering of services | 8,099,404,766.59 | 4,448,611,152.91 | |
| Cash received for taxes and surcharges refunded | - | 4,456,323.70 | |
| Other cash receipts relating to operating activities | 525,408,330.58 | 408,789,146.30 | |
| Sub-total of cash inflow from operating activities | 8,624,813,097.17 | 4,861,856,622.91 | |
| Cash paid for goods and services | 4,655,490,266.98 | 2,379,428,567.25 | |
| Cash paid to and on behalf of employees | 551,082,829.16 | 585,624,913.63 | |
| Payments of taxes | 786,973,453.98 | 473,925,483.80 | |
| Other cash payments relating to operating activities | 598,184,039.29 | 594,089,396.28 | |
| Sub-total of cash outflow from operating activities | 6,591,730,589.41 | 4,033,068,360.96 | |
| Net cash flow from operating activities | 2,033,082,507.76 | 828,788,261.95 | |
| II. Cash flow from investing activities: | |||
| Cash received from recovery of investment | 6,124,327,288.57 | 13,116,015,960.26 | |
| Cash received from investment income | 325,898,607.79 | 297,606,559.61 | |
| Net cash received from disposal of property, plant and equipment, intangible assets and other long-term assets | 44,446,864.25 | 10,313,579.94 | |
| Net cash received from disposal of subsidiaries and other business units | - | 192,466,418.65 | |
| Other cash receipts relating to investing activities | 3,746,899,831.00 | 4,450,486,259.27 | |
| Sub-total of cash inflow from investing activities | 10,241,572,591.61 | 18,066,888,777.73 | |
| Cash paid to acquire and construct fixed assets, intangible assets and other long-term assets | 2,042,626,824.44 | 1,212,154,493.64 | |
| Cash paid to acquire investments | 4,915,716,783.24 | 13,865,803,003.64 | |
| Other cash paid related to investing activities | 1,632,462,005.00 | 2,352,817,932.28 | |
| Sub-total of cash outflow from investing activities | 8,590,805,612.68 | 17,430,775,429.56 | |
| Net cash flow from investing activities | 1,650,766,978.93 | 636,113,348.17 | |
| III. Cash flow from financing activities: | |||
| Cash received for investment taking | 13,992,600.00 | 156,298,000.00 | |
| Including: cash received by subsidiaries from absorbing minority shareholders' investment | 8,400,000.00 | 19,000,000.00 | |
| Cash received from borrowings | 12,319,250,000.00 | 13,142,000,000.00 | |
| Sub-total of cash inflow from financing activities | 12,333,242,600.00 | 13,298,298,000.00 | |
| Cash paid for debts repayment | 13,344,000,000.00 | 15,552,228,773.17 | |
| Cash paid for distribution of dividends or profits or payment of interest | 650,819,017.71 | 537,445,865.52 | |
| In which: dividends or profits paid by subsidiaries to minority shareholders | - | 114,400.00 | |
| Other cash paid related to financing activities | 40,358,783.07 | 64,460,000.00 | |
| Sub-total of cash outflow from financing activities | 14,035,177,800.78 | 16,154,134,638.69 | |
| Net cash flow from financing activities | -1,701,935,200.78 | -2,855,836,638.69 | |
| IV. Effect of foreign exchange rate changes on cash and cash equivalents | -8,088,832.07 | -3,134,649.06 | |
| V. Net increase in cash and cash equivalents | 1,973,825,453.84 | -1,394,069,677.63 | |
| Plus: opening balance of cash and cash equivalents | 2,032,642,871.63 | 3,426,712,549.26 | |
| VI. Closing balance of cash and cash equivalents | 4,006,468,325.47 | 2,032,642,871.63 | |
Legal Representative: Zhao Wenge Person in Charge of Finance: Wang DongHead of Finance Department: Zhao Difang
Cash Flow Statement of Parent Company
January-December 2021
Unit: RMB
| Item | Note | 2021 | 2020 |
| I. Cash flow from operating activities: | |||
| Cash received from sale of goods and rendering of services | 3,748,589,385.84 | 2,446,781,848.92 | |
| Cash received for taxes and surcharges refunded | - | 1,149,176.75 | |
| Other cash receipts relating to operating activities | 349,377,861.57 | 241,467,188.43 | |
| Sub-total of cash inflow from operating activities | 4,097,967,247.41 | 2,689,398,214.10 | |
| Cash paid for goods and services | 571,281,536.76 | 556,362,710.98 | |
| Cash paid to and on behalf of employees | 353,270,873.06 | 401,702,437.14 | |
| Payments of taxes | 691,067,319.78 | 258,399,863.90 | |
| Other cash payments relating to operating activities | 674,684,402.42 | 450,114,859.64 | |
| Sub-total of cash outflow from operating activities | 2,290,304,132.02 | 1,666,579,871.66 | |
| Net cash flow from operating activities | 1,807,663,115.39 | 1,022,818,342.44 | |
| II. Cash flow from investing activities: | |||
| Cash received from recovery of investment | 6,200,000,000.00 | 13,081,060,305.96 | |
| Cash received from investment income | 327,497,449.71 | 225,062,189.56 | |
| Net cash received from disposal of property, plant and equipment, intangible assets and other long-term assets | 42,475,671.66 | 474,396.78 | |
| Net cash received from disposal of subsidiaries and other business units | - | 2,232,000,000.00 | |
| Other cash receipts relating to investing activities | 3,746,899,831.00 | 2,775,280,817.96 | |
| Sub-total of cash inflow from investing activities | 10,316,872,952.37 | 18,313,877,710.26 | |
| Cash paid to acquire and construct fixed assets, intangible assets and other long-term assets | 1,973,252,137.98 | 1,192,740,121.04 | |
| Cash paid to acquire investments | 5,193,070,000.00 | 14,745,855,008.73 | |
| Other cash paid related to investing activities | 1,632,462,005.00 | 2,007,512,948.00 | |
| Sub-total of cash outflow from investing activities | 8,798,784,142.98 | 17,946,108,077.77 | |
| Net cash flow from investing activities | 1,518,088,809.39 | 367,769,632.49 | |
| III. Cash flow from financing activities: | |||
| Cash received for investment taking | 5,592,600.00 | 137,298,000.00 | |
| Cash received from borrowings | 12,319,250,000.00 | 13,142,000,000.00 | |
| Sub-total of cash inflow from financing activities | 12,324,842,600.00 | 13,279,298,000.00 | |
| Cash paid for debts repayment | 13,344,000,000.00 | 15,552,228,773.17 | |
| Cash paid for distribution of dividends or profits or payment of interest | 650,819,017.71 | 537,331,465.52 | |
| Other cash paid related to financing activities | 14,525,871.43 | - | |
| Sub-total of cash outflow from financing activities | 14,009,344,889.14 | 16,089,560,238.69 | |
| Net cash flow from financing activities | -1,684,502,289.14 | -2,810,262,238.69 | |
| IV. Effect of foreign exchange rate changes on cash and cash equivalents | - | ||
| V. Net increase in cash and cash equivalents | 1,641,249,635.64 | -1,419,674,263.76 | |
| Plus: opening balance of cash and cash equivalents | 1,885,867,436.92 | 3,305,541,700.68 | |
| VI. Closing balance of cash and cash equivalents | 3,527,117,072.56 | 1,885,867,436.92 |
Legal Representative: Zhao Wenge Person in Charge of Finance: Wang Dong Headof Finance Department: Zhao Difang
Statement of Changes in Consolidated Owners’ Equity
January-December 2021
Unit: RMB
| Item | 2021 | ||||||||
| Equity attributable to owners of the parent company | Minority interest | Total owners’ equity | |||||||
| Paid-in capital (share capital) | Capital reserve | Less: treasury stocks | Other comprehensive income | Surplus reserve | Undistributed profits | Sub-total | |||
| 1. Balance at the end of previous year | 5,489,914,176.00 | 1,594,906,524.67 | 137,298,000.00 | 78,149,661.33 | 1,364,257,808.58 | 5,168,298,206.50 | 13,558,228,377.08 | 16,481,000.16 | 13,574,709,377.24 |
| II. Opening balance of the current year | 5,489,914,176.00 | 1,594,906,524.67 | 137,298,000.00 | 78,149,661.33 | 1,364,257,808.58 | 5,168,298,206.50 | 13,558,228,377.08 | 16,481,000.16 | 13,574,709,377.24 |
| III. Change in the period (decrease is indicated by “-”) | 1,360,000.00 | 36,602,590.29 | 196,800.00 | -17,298,926.31 | 140,951,986.92 | 891,198,640.35 | 1,052,617,491.25 | 3,515,225.31 | 1,056,132,716.56 |
| (I) Total comprehensive income | - | - | - | -17,298,926.31 | - | 1,334,095,906.95 | 1,316,796,980.64 | -4,884,774.69 | 1,311,912,205.95 |
| (II)Owners’ contribution to and reduction in capital | 1,360,000.00 | 32,884,763.28 | 196,800.00 | - | - | - | 34,047,963.28 | 8,400,000.00 | 42,447,963.28 |
| 1. Common shares contributed by owners | 1,360,000.00 | 1,351,400.00 | 196,800.00 | - | - | - | 2,514,600.00 | 8,400,000.00 | 10,914,600.00 |
| 3. Amount of share-based payment into owner’s equity | - | 31,533,363.28 | - | - | - | - | 31,533,363.28 | - | 31,533,363.28 |
| (III) Profits distribution | - | - | - | - | 140,951,986.92 | -442,897,266.60 | -301,945,279.68 | - | -301,945,279.68 |
| 1. Withdrawal of surplus reserve | - | - | - | - | 140,951,986.92 | -140,951,986.92 | - | - | - |
| 3. Distribution to owners (or shareholders) | - | - | - | - | - | -301,945,279.68 | -301,945,279.68 | - | -301,945,279.68 |
| (VI) Others | - | 3,717,827.01 | - | - | - | - | 3,717,827.01 | - | 3,717,827.01 |
| IV. Closing balance of the current period | 5,491,274,176.00 | 1,631,509,114.96 | 137,494,800.00 | 60,850,735.02 | 1,505,209,795.50 | 6,059,496,846.85 | 14,610,845,868.33 | 19,996,225.47 | 14,630,842,093.80 |
| Item | 2020 | ||
| Equity attributable to owners of the parent company | Minority interest | Total owners’ equity | |
| Paid-in capital (share capital) | Capital reserve | Less: treasury stocks | Other comprehensive income | Surplus reserve | Undistributed profits | Sub-total | |||
| 1. Balance at the end of previous year | 5,443,214,176.00 | 1,524,183,779.64 | - | 66,267,192.74 | 1,236,166,911.81 | 4,750,787,389.17 | 13,020,619,449.36 | 63,679,633.85 | 13,084,299,083.21 |
| II. Opening balance of the current year | 5,443,214,176.00 | 1,524,183,779.64 | - | 66,267,192.74 | 1,236,166,911.81 | 4,750,787,389.17 | 13,020,619,449.36 | 63,679,633.85 | 13,084,299,083.21 |
| III. YoY change (decrease is indicated by “-”) | 46,700,000.00 | 70,722,745.03 | 137,298,000.00 | 11,882,468.59 | 128,090,896.77 | 417,510,817.33 | 537,608,927.72 | -47,198,633.69 | 490,410,294.03 |
| (I) Total comprehensive income | - | - | - | 11,882,468.59 | - | 926,626,706.42 | 938,509,175.01 | -4,756,488.35 | 933,752,686.66 |
| (II)Owners’ contribution to and reduction in capital | 46,700,000.00 | 70,905,533.03 | 137,298,000.00 | - | - | - | -19,692,466.97 | -42,327,745.34 | -62,020,212.31 |
| 1. Common shares contributed by owners | 46,700,000.00 | 90,598,000.00 | 137,298,000.00 | - | - | - | - | 19,000,000.00 | 19,000,000.00 |
| 3. Amount of share-based payment into owner’s equity | - | 1,880,981.38 | - | - | - | - | 1,880,981.38 | 17,483.68 | 1,898,465.06 |
| 4．Others | -21,573,448.35 | -21,573,448.35 | -61,345,229.02 | -82,918,677.37 | |||||
| (III) Profits distribution | - | - | - | - | 128,090,896.77 | -509,115,889.09 | -381,024,992.32 | -114,400.00 | -381,139,392.32 |
| 1. Withdrawal of surplus reserve | - | - | - | - | 128,090,896.77 | -128,090,896.77 | - | - | - |
| 3. Distribution to owners (or shareholders) | - | - | - | - | - | -381,024,992.32 | -381,024,992.32 | -114,400.00 | -381,139,392.32 |
| (VI) Others | - | -182,788.00 | - | - | - | - | -182,788.00 | - | -182,788.00 |
| IV. Closing balance of the current period | 5,489,914,176.00 | 1,594,906,524.67 | 137,298,000.00 | 78,149,661.33 | 1,364,257,808.58 | 5,168,298,206.50 | 13,558,228,377.08 | 16,481,000.16 | 13,574,709,377.24 |
Legal Representative: Zhao Wenge Person in Charge of Finance: Wang Dong Head of Finance Department: Zhao Difang
Statement of Changes in Owners’ Equity of Parent Company
January-December 2021
Unit: RMB
| Item | 2021 | ||||||
| Paid-in capital (share capital) | Capital reserve | Less: treasury stocks | Other comprehensive income | Surplus reserve | Undistributed profits | Total owners’ equity | |
| I. Balance at the end of previous year | 5,489,914,176.00 | 1,833,256,515.22 | 137,298,000.00 | 81,473,183.84 | 1,364,204,332.75 | 5,383,365,299.69 | 14,014,915,507.50 |
| II. Opening balance of the current year | 5,489,914,176.00 | 1,833,256,515.22 | 137,298,000.00 | 81,473,183.84 | 1,364,204,332.75 | 5,383,365,299.69 | 14,014,915,507.50 |
| III. Change in the period (decrease is indicated by “-”) | 1,360,000.00 | 32,884,763.28 | 196,800.00 | -15,051,280.51 | 140,951,986.92 | 966,622,602.57 | 1,126,571,272.26 |
| (I) Total comprehensive income | - | - | - | -15,051,280.51 | - | 1,409,519,869.17 | 1,394,468,588.66 |
| (II)Owners’ contribution to and reduction in capital | 1,360,000.00 | 32,884,763.28 | 196,800.00 | - | - | - | 34,047,963.28 |
| 1.Common shares contributed by owners | 1,360,000.00 | 1,351,400.00 | 196,800.00 | - | - | - | 2,514,600.00 |
| 3. Amount of share-based payment into owner’s equity | - | 31,533,363.28 | - | - | - | - | 31,533,363.28 |
| (III) Profits distribution | - | - | - | - | 140,951,986.92 | -442,897,266.60 | -301,945,279.68 |
| 1. Withdrawal of surplus reserve | - | - | - | - | 140,951,986.92 | -140,951,986.92 | - |
| 2. Distribution to owner (or shareholders) | - | - | - | - | - | -301,945,279.68 | -301,945,279.68 |
| IV. Closing balance of the current period | 5,491,274,176.00 | 1,866,141,278.50 | 137,494,800.00 | 66,421,903.33 | 1,505,156,319.67 | 6,349,987,902.26 | 15,141,486,779.76 |
| Item | 2020 | ||||||
| Paid-in capital (share capital) | Capital reserve | Less: treasury stocks | Other comprehensive income | Surplus reserve | Undistributed profits | Total owners’ equity | |
| I. Balance at the end of previous year | 5,443,214,176.00 | 1,489,516,614.19 | - | 66,421,903.33 | 1,236,113,435.98 | 4,363,644,248.36 | 12,598,910,377.86 |
| II. Opening balance of the current year | 5,443,214,176.00 | 1,489,516,614.19 | - | 66,421,903.33 | 1,236,113,435.98 | 4,363,644,248.36 | 12,598,910,377.86 |
| III. Change in the period (decrease is indicated by “-”) | 46,700,000.00 | 343,739,901.03 | 137,298,000.00 | 15,051,280.51 | 128,090,896.77 | 1,019,721,051.33 | 1,416,005,129.64 |
| (I) Total comprehensive income | - | - | - | 15,051,280.51 | - | 1,280,908,967.74 | 1,295,960,248.25 |
| (II)Owners’ contribution to and reduction in capital | 46,700,000.00 | 343,739,901.03 | 137,298,000.00 | - | - | - | 253,141,901.03 |
| 1. Common shares contributed by owners | 46,700,000.00 | 90,598,000.00 | 137,298,000.00 | - | - | - | - |
| 3. Amount of share-based payment into owner’s equity | - | 1,880,981.38 | - | - | - | - | 1,880,981.38 |
| 4. Others | 251,260,919.65 | 251,260,919.65 | |||||
| (III) Profits distribution | - | - | - | - | 128,090,896.77 | -509,115,889.09 | -381,024,992.32 |
| 1. Withdrawal of surplus reserve | - | - | - | - | 128,090,896.77 | -128,090,896.77 | - |
| 2. Distribution to owner (or shareholders) | - | - | - | - | - | -381,024,992.32 | -381,024,992.32 |
| (VI) Others | - | - | - | - | - | 247,927,972.68 | 247,927,972.68 |
| IV. Closing balance of the current period | 5,489,914,176.00 | 1,833,256,515.22 | 137,298,000.00 | 81,473,183.84 | 1,364,204,332.75 | 5,383,365,299.69 | 14,014,915,507.50 |
Legal Representative: Zhao Wenge Person in Charge of Finance: Wang Dong Head of Finance Department: Zhao Difang
III. Basic information of the Company
1. Company profile
√Applicable □Not Applicable
Zhejiang China Commodities City Group Co., Ltd. (the “Company”) is a company limited byshare and was incorporated on Dec 28, 1993 in Zhejiang province of the People’s Republic ofChina. The RMB-denominated common A shares issued by the Company got listed on ShanghaiStock Exchange on May 9, 2002. The Company is headquartered at No.105 Futian Road, Yiwu,Zhejiang.The Group’s main business activities: market development and operation and supportingservices, sales of commodities, provision of online trading platforms and services, development andmanagement of online trading market, etc., in the category of comprehensive services.The parent company of the Group is Yiwu China Commodities City Holdings Limited(hereinafter referred to as “CCCH”) and the final controller of the Group is the State-owned AssetsSupervision and Administration Office of the People’s Government of Yiwu.The Financial Statements were approved by the Company's Board of Directors on March 22,2022. According to the Company's articles of association, these financial statements are to besubmitted to the general meeting of shareholders for deliberation.
2. Consolidation scope of financial statements
√Applicable □Not Applicable
The consolidation of financial statements is determined on the basis of control. For thechanges in the current year, please refer to Note VIII. Changes in consolidation scope.
IV. Basis of preparation of financial statements
1. Basis of preparation
The financial statements of the Company were prepared on a going-concern basis.
The financial statements were prepared in accordance with the Accounting Standards forEnterprises-Basic Standards and the specific accounting standards, application guidelines,interpretations and other related regulations promulgated and amended thereafter (collectivelyreferred to as “Accounting Standards”).
The financial statements were all prepared based on the valuation principle of historical cost,except for certain financial instruments. In case of assets impairment, corresponding impairmentprovision was made in accordance with relevant provisions.
2. Going concern
√Applicable □Not Applicable
The Company prepared its financial statements on a going-concern basis. The management ofthe Company expected that the Group would generate adequate cash inflow from the future day-to-day operation, which in combination with the Group’s adequate lines of credit from banks could besufficient to repay its due debts.
V. Important Accounting Policies and Accounting EstimatesReminders on specific accounting policies and accounting estimates:
√Applicable □Not Applicable
The Group has formulated specific accounting policies and accounting estimates based on thecharacteristics of actual production and operation, which are mainly reflected in the bad debtprovisions for receivables, inventory valuation methods, depreciation of fixed assets, amortization ofintangible assets, income recognition and measurement, recognition of property investments andfixed assets, and service life and residual value of fixed assets.
1. Statement of compliance with the Accounting Standards
The financial statements prepared by the Company comply with the requirements of theAccounting Standards, and truly and completely reflect the Company’s financial conditions,operating results, changes in shareholders’ equity, cash flows and other related information.
2. Accounting period
The Company’s accounting year is from Jan 1 to Dec 31 of each calendar year.
3. Operating cycle
√Applicable □Not Applicable
The business cycle of the Company is relatively short, and 12 months are used as the standardfor defining the liquidity of assets and liabilities.
4. Functional currency
The Company’s functional currency is RMB. The Group uses RMB as its functional currencyand in the preparation of financial statements. Unless specifically stated, all amounts are expressedin RMB.
5. Accounting methods for merger of the enterprises under common control and merger of
the enterprises not under common control
√Applicable □Not Applicable
The mergers of enterprises are divided into the mergers of the enterprises under commoncontrol and mergers of the enterprises not under common control.
Mergers of the enterprises under common control
Merger of the enterprises under common control refers to the merger of the enterprises that areunder ultimate control of the same party or parties before and after the merger and the control is nottemporary. For a merger of the enterprises under common control, the party obtaining control overthe other(s) involved in the merger on the date of merger is the merging party and the other(s)is(are) the merged party. The date of merger refers to the date when the merging party actuallyobtains control over the merged party.
The assets and liabilities acquired by the merging party in a merger of the enterprises undercommon control (including the goodwill formed through the acquisition of the merged party by theultimate controller) are accounted according to the book value thereof in the ultimate controller’sfinancial statements on the date of merger. For the difference between the book value of the netassets obtained by the merging party and the book value of the consideration paid for the merger(or the total nominal value of the shares issued), the share capital premium in the capital reserveshall be adjusted; if the share capital premium is not sufficient to absorb the difference, the retainedearnings shall be adjusted.
Mergers of the enterprises not under common control
Merger of the enterprises not under common control refers to the merger of the enterprises thatare not under ultimate control of the same party or parties before and after the merger. For amerger of the enterprises not under common control, the party obtaining control over the other(s)involved in the merger on the date of acquisition is the acquirer and the other(s) is(are) the acquiree.The date of acquisition refers to the date when the acquirer actually obtains control over theacquiree.
The acquiree’s identifiable assets, liabilities and contingent liabilities obtained from the mergerof the enterprises not under common control are measured at their fair values on the date ofacquisition.
If the sum of the fair value of the consideration paid for the merger (or fair value of the equitysecurities issued) and the fair value of the acquiree’s equity held before the date of acquisition ishigher than the share in the fair value of the acquiree’s identifiable net assets acquired from themerger, the difference between them is recognized as goodwill, which will be subsequentlymeasured by the cost less accumulated impairment loss. If the sum of the fair value of theconsideration paid for the merger (or fair value of the equity securities issued) and the fair value ofthe acquiree’s equity held before the date of acquisition is lower than the share in the fair value ofthe acquiree’s identifiable net assets acquired from the merger, the measurement of the fair valueof the acquiree’s identifiable assets, liabilities and contingent liabilities, the fair value of theconsideration paid for the merger (or fair value of the equity securities issued) and the fair value ofthe acquiree’s equity held before the date of acquisition will be reviewed, and if the sum of the fairvalue of the consideration paid for the merger (or fair value of the equity securities issued) and thefair value of the acquiree’s equity held before the date of acquisition is still lower than the share inthe fair value of the acquiree’s identifiable net assets acquired from the merger after such review,the difference will be recognized in the profit or loss for the current period.
For mergers of the enterprises not under common control that are executed through multipletransactions, the long-term equity investment of the acquiree before the date of acquisition shall bere-measured based on the fair value thereof on the date of acquisition and any difference betweenthe fair value and book value thereof shall be recognized in the profit or loss for the current period;other comprehensive income from the long-term equity investment of the acquiree before the dateof acquisition under the equity method shall be accounted on the same basis as that for the directdisposal of related assets or liabilities by the investee, and other changes in shareholders’ equitythan net gains or losses, other comprehensive income and profit distribution shall be recognized inthe profit or loss for the period where the date of acquisition falls.
6. Preparation method of consolidated financial statements
√Applicable □Not Applicable
The financial statements to be consolidated is determined on the basis of control, includingthose of the Company and all of its subsidiaries. Subsidiaries refer to the entities controlled by theCompany (including the severable parts of enterprises and invested entities, and the structuredentities controlled by the Company).
In the preparation of consolidated financial statements, the subsidiaries adopt the sameaccounting year and accounting policies as those adopted by the Company. Assets, liabilities,equity, income, expenses and cash flows generated from all deals between companies within theGroup are fully offset at the time of merger.
If the amount of loss for the current period attributable to the minority shareholders of asubsidiary exceeds the minority shareholders’ share in the opening balance of shareholders’ equityin the subsidiary, the excess will still be recognized against minority interest.
For a subsidiary acquired through a business merger not under the same control, the operatingresults and cash flows of the acquiree will be included in the consolidated financial statements fromthe day when the Group acquires control, until the control of the Group ceases. In the preparation ofconsolidated financial statements, adjustments will be made to the financial statements of thesubsidiary based on the fair value of its identifiable assets, liabilities or contingent liabilitiesdetermined on the date of acquisition.
For a subsidiary acquired through a business merger under the same control, the operatingresults and cash flows of merged party will be included in the consolidated financial statementssince the beginning of the current period of the merger. In the preparation of consolidated financialstatements, adjustments will be made to the related items in its previous financial statements as ifthe reporting entity formed after the merger has been existing as from the ultimate controller startsto exercise control.
In case of any change to one or more elements of the control due to the changes in relatedfacts and circumstances, the Group will re-evaluate whether to control the investee.
7. Classification of joint arrangements and accounting treatment of joint operations
√Applicable □Not Applicable
Joint arrangements are divided into joint operations and joint ventures. Joint operation refers toa joint arrangement in which the parties thereto enjoy the assets relating to such arrangement andassume the liabilities relating to such arrangement. Joint venture refers to a joint arrangement inwhich the parties thereto only enjoy rights to the net assets in this arrangement.
Each party to a joint arrangement recognizes the following items relating to its share in the jointoperation: assets held individually by it and assets held jointly based on its share; liabilitiesassumed individually by it and liabilities assumed jointly based on its share; revenue from the saleof its share in the output of the joint operation; revenue from the sale of the output of the jointoperation based on its share; expenses incurred individually by it and expenses incurred by the jointoperation based on its share.
8. Criteria for the identification of cash and cash equivalents
Cash refers to the Group’s cash on hand and deposits that can be used for payment at anytime; cash equivalent refers to the investment held by the Group with a short term, strong liquidity,easy to convert into cash with a known amount, and with low risk of value changes.
9. Foreign currency transactions and translation of foreign currency financial statements
√Applicable □Not Applicable
For foreign currency transactions, the Group will translate the foreign currency amounts into itsfunctional currency amounts.In the initial recognition of a foreign currency transaction, the foreign currency amount istranslated to a functional currency amount according to the spot exchange rate on the date oftransaction. On the balance sheet date, the foreign currency monetary items are translatedaccording to the spot exchange rate on the balance sheet date. The translation difference betweensettlement and monetary items is recognized in the profit or loss for the current period, except forthe difference arising from the special foreign currency borrowing relating to the acquisition andconstruction of the assets qualified for capitalization, which will be treated based on the principlesfor the capitalization of borrowing expenses. The foreign currency non-monetary items measured byhistorical cost are also translated according to the spot exchange rate on the date of transaction,without changing the functional currency amounts thereof. The foreign currency non-monetaryitems measured by fair value are translated according to the spot exchange rate on the fair valuedetermination date and the difference arising therefrom is recognized in the profit or loss or othercomprehensive income for the current period based on the nature of the items.The Group translates the functional currency of its foreign business into RMB while preparingthe financial statements. The assets and liabilities items in the balance sheet are translatedaccording to the spot exchange rate on the balance sheet date, the shareholders’ equity items aretranslated according to the spot exchange rate at the occurrence of the items except for“undistributed profits”; revenue and expenses items in the income statement are translatedaccording to the average exchange rate during the period in which the transaction happens. Thetranslation differences of foreign currency statements arising from the above translations arerecognized as other comprehensive income. For the disposal of foreign business, othercomprehensive income relating to the foreign business is recognized in the profit or loss of thedisposal for the current period and is calculated pro rata for partial disposal.
The foreign currency cash flow and cash flow of foreign subsidiaries are translated according tothe spot exchange rate on the occurrence date of cash flow/average exchange rate during theperiod in which the cash flow occurs. The amount of impact of the changes in exchange rate oncash is separately stated in the cash flow statement as an adjustment item.
10. Financial instruments
√Applicable □Not Applicable
Financial instruments refer to the contracts which form financial assets of an enterprise andform financial liabilities or equity instruments of other entities.
Recognition and de-recognition of financial instruments
The Group recognizes a financial asset or financial liability at the time of becoming a party to afinancial instrument contract.
The Group will derecognize a financial asset (or a part of the financial asset or a part of aGroup of similar financial assets), i.e. writing off the asset from its account and balance sheet, if:
(1) the right to collect cash flow from the financial asset has expired;
(2) The right to collect cash flows of financial assets has been transferred, or the obligation topay the collected cash flows in full and in time to a third party under the “handover agreement” hasbeen undertaken; and (a) all risks and rewards in the ownership of the financial assets have beensubstantially transferred, or (b) almost all risks and rewards in the ownership of the financial assethave been neither transferred nor retained, but control of the financial asset has been waived.
If a financial liability has been fulfilled, revoked or expired, it will be derecognized. If an existingfinancial liability is replaced by the same creditor with another financial liability under substantiallydifferent terms or the terms of the existing liability are substantially modified in whole, the existingliability will be derecognized and the new liability will be recognized, and the difference will berecognized in the profit or loss for the current period.
For the transactions of financial assets in regular ways, the recognition and de-recognitionthereof will be conducted based on the accounting on the transaction date. Transactions of financialassets in regular ways refer to the collection or delivery of financial assets within the time limitprescribed by laws and regulation or prevailing practices in accordance with the contract terms. Thetransaction date refers to the date when the Group promises to buy or sell the financial assets.
Classification and measurement of financial assets
Based on the Group’s business model for the management of financial assets and the featuresof the contractual cash flow of financial assets, the Group’s financial assets are classified at initialrecognition into the financial assets that are measured by fair value and of which the changes in fair
value are recognized in the profit or loss for the current period, the financial assets measured byamortized cost and the financial assets that are measured by fair value and of which the changes infair value are recognized in other comprehensive income.If a financial asset is measured by fair value at initial recognition, but the accounts receivable ornotes receivable from the sale of goods or rendering of service do not include significant financingcomponents or the financing components with a term no longer than one year are not considered,the initial measurement will be made based on the transaction price.For the financial assets that are measured by fair value and of which the changes in fair valueare recognized in the profit or loss for the current period, the related transaction fees will be directlyrecognized in the profit or loss for the current period; the related transaction fees of other financialassets will be recognized in the initially recognized amounts thereof.
The subsequent measurement of financial assets depends on the classification thereof:
Investment in debt instruments measured by amortized costA financial asset is classified into those measured by amortized cost, if the business model forthe management of the asset is for the purpose of collecting contractual cash flow; and the terms ofthe contract of the asset stipulate that the cash flow generated on the specific date is only therepayment of principal and the payment of interest on the outstanding principal. The interest incomeof such financial assets is recognized with the effective interest method, and the gains or lossesfrom the de-recognition, modification or impairment thereof are all recognized in the profit or loss forthe current period.Investment in the equity instruments that are measured by fair value and of which thechanges in fair value are recognized in other comprehensive incomeThe Group has irrevocably chosen to designate some non-trading equity instrumentinvestments as the financial assets that are measured by fair value and of which the changes in fairvalue are recognized in other comprehensive income. Only the related dividend income (except forthe dividend income expressly acting as a recovery of investment cost) is recognized in the profit orloss for the current period, while the subsequent changes in fair value are recognized in othercomprehensive income, and no provision is required for impairment. When the financial assets arederecognized, the accumulated gains or losses previously recognized in other comprehensiveincome will be moved out of other comprehensive income and recognized in retained earnings.Financial assets that are measured by fair value and of which the changes in fair valueare recognized in the profit or loss for the current periodThe financial assets other than the above financial assets measured by amortized cost and theabove financial assets that are measured by fair value and of which the changes in fair value arerecognized in other comprehensive income are classified as the financial assets that are measuredby fair value and of which the changes in fair value are recognized in the profit or loss for thecurrent period. Those financial assets are subsequently measured by fair value and all changes inthe fair value thereof are recognized in the profit or loss for the current period.Classification and measurement of financial liabilitiesThe Group’s financial liabilities are classified at initial recognition into the financial liabilities thatare measured by fair value and of which the changes in fair value are recognized in the profit orloss for the current period and other financial assets. For the financial liabilities that are measuredby fair value and of which the changes in fair value are recognized in the profit or loss for thecurrent period, the related transaction fees are recognized directly in the profit or loss for the currentperiod, while the related transaction fees of other financial liabilities are recognized in the initiallyrecognized amounts thereof.The subsequent measurement of financial liabilities depends on the classification thereof:
Financial liabilities that are measured by fair value and of which the changes in fairvalue are recognized in the profit or loss for the current period
The financial liabilities that are measured by fair value and of which the changes in fair valueare recognized in the profit or loss for the current period include financial liabilities held for trading(including the derivative instruments as financial liabilities) and the liabilities that are designated atinitial recognition as the financial liabilities that are measured by fair value and of which the changesin fair value are recognized in the profit or loss for the current period. The financial liabilities held fortrading (including the derivative instruments as financial liabilities) are subsequently measured byfair value and all changes in the fair value are recognized in the profit or loss for the current period.
Other financial liabilities
Those financial liabilities are subsequently measured by amortized cost with the effectiveinterest method.
Impairment of financial instruments
The Group has treated and recognized the impairment of the financial assets measured byamortized cost based on the expected credit loss.For receivables that do not contain significant financing components, the Group measures theloss provision based on the amount of expected credit loss equivalent to the entire duration under asimplified measurement method,For the financial assets not measured with the simplified method, the Group evaluates on eachbalance sheet date whether their credit risks have increased significantly since the initial recognition.If the credit risk of a financial asset has not increased significantly since the initial recognition, theasset is in the first stage and the Group will make provision for loss based on the amount ofexpected credit loss within the coming 12 months and calculate interest income based on the bookbalance and effective interest rate; if the credit risk has increased significantly since the initialrecognition, but credit has not been impaired, the asset is in the second stage and the Group willmake provision for loss equivalent to the amount of expected credit loss during the entire term andcalculate interest income based on the book balance and effective interest rate; if credit has beenimpaired after the initial recognition, the asset is in the third stage and the Group will make provisionfor loss equivalent to the amount of expected credit loss during the entire term and calculateinterest income based on the amortized cost and effective interest rate.The Group evaluates the expected credit losses of financial instruments on the individual andGroup bases. It evaluates the expected credit loss of accounts receivable by taking into account thecredit risk characteristics of different clients and based on the account aging-based asset Groups.For the disclosure of the Group’s criteria for a significant increase in credit risk, definition of theassets whose credit has been impaired and assumptions for the measurement of expected creditloss, please refer to Notes X. 2.When the Group no longer reasonably expects that it can recover the contractual cash flow of afinancial asset in whole or in part, it will directly write down the book balance of the asset.
11. Notes receivable
Determination and accounting treatment of the expected credit loss of notes receivable
□Applicable √Not Applicable
12. Accounts receivable
Determination and accounting treatment of the expected credit loss of accounts receivable
√Applicable □Not Applicable
Please refer to Notes X. Risks Associated with Financial Instruments
13. Accounts receivable financing
□Applicable √Not Applicable
14. Other receivables
Determination and accounting treatment of the expected credit loss of other receivables
√Applicable □Not Applicable
Please refer to Notes X. Risks Associated with Financial Instruments
15. Inventory
√Applicable □Not Applicable
Inventory includes raw materials, work-in-progress materials, finished goods, real estatedevelopment costs and real estate development products.
Inventory is initially measured by cost. The costs of inventory except development costs anddevelopment products include the procurement cost, processing cost and other costs. The actualcosts of items out of inventory are determined with the weighted average method. Work-in-progressmaterials include low-value consumables and packages, which are amortized with the one-offamortization method.
Development costs refer to the properties that have not been completed and are developed forthe purpose of being sold. Development products refer to the properties that have been completedand are ready for sale. The actual costs of real estate development costs and developmentproducts include the land acquisition cost, expenditures on construction and installation works,
capitalized interest and other direct and indirect development expenses. The use right of the landfor development purpose at the development of a project is amortized and recognized as thedevelopment cost of the project based on the site area of the development product, and thedevelopment cost will be changed over to development product after being completed.
If the public auxiliary facilities are completed earlier than the related development product, thefacilities will be allocated to and recognized in the development cost of related development projectbased on the floor space of the project after final accounting of the facilities upon completion; if thepublic auxiliary facilities are completed later than the related development product, they will berecognized in the development cost of related development project based on the predicted cost ofthe public auxiliary facilities.Hotel, catering and fresh goods inventories are subject to onsite inventory, while otherinventories are subject to perpetual inventory.On the balance sheet date, inventory is measured by cost and net realizable value, whicheveris lower. If the cost is higher than the net realizable value, provision will be made for inventorydepreciation, which will be recognized in the profit or loss for the current period. If the impact of theprevious provision for inventory depreciation has disappeared and the net realizable value of theinventory becomes higher than the book value thereof, the amounts written down previously in theoriginal provision for inventory depreciation will be restituted and recognized in the profit or loss forthe current period.Net realizable value is the estimated selling price of inventory less the cost estimated to occuras of completion, estimated sales expenses and related taxes. In principle, provisions for inventorydepreciation shall be made for inventory items individually. For the inventory with a large quantityand a low unit price, inventory depreciation provision will be made based on the Groups of items.
16. Contract assets
(1). Determination and criteria for contract assets
□Applicable √Not Applicable
(2). Determination and accounting treatment of the expected credit loss of contract assets
□Applicable √Not Applicable
17. Held-for-sale assets
□Applicable √Not Applicable
18. Debt investments
(1). Determination and accounting treatment of the expected credit loss of debt investments
□Applicable √Not Applicable
19. Other debt investments
(1). Determination and accounting treatment of the expected credit loss of other debt
investments
□Applicable √Not Applicable
20. Long-term receivables
(1). Determination and accounting treatment of the expected credit loss of long-term
receivables
√Applicable □Not Applicable
Please refer to Notes X. Risks Associated with Financial Instruments
21. Long-term equity investment
√Applicable □Not Applicable
Long-term equity investment includes equity investment in subsidiaries, joint ventures andassociates.
Long-term equity investment is initially measured by the initial investment cost at the time ofbeing acquired. For a long-term equity investment acquired through a business merger under thesame control, the initial investment cost is the share of the book value of the merged party’sowner’s equity acquired on the merger date in the ultimate controlling party’s consolidated financialstatements; The difference between the initial investment cost and the book value of the mergerconsideration is adjusted to the capital reserve (if it is insufficient to offset, the retained earnings willbe offset); other comprehensive income before the merger date is accounted for on the same basisas that for the investee’s direct disposal of related assets or liabilities when disposing of theinvestment. The shareholders’ equity recognized by the investee due to the changes inshareholders’ equity other than net profit and loss, other comprehensive income, and profitdistribution is transferred to the current profit and loss when the investment is disposed of; thosethat are still long-term equity investments after disposal are carried forward in proportion, and thosethat are converted into financial instruments after disposal are carried forward in full. For a long-term equity investment acquired through a business merger not under the same control, the mergercost shall be used as the initial investment cost (for the business merger not under the same controlrealized step by step in a package deal, the sum of the book value and the new investment cost onthe acquisition date is used as the initial investment cost). The merger cost includes the sum of fairvalues of the assets paid, the liabilities incurred or assumed, and the equity securities issued by theacquirer; the other comprehensive income held prior to the acquisition date that is recognized foraccounting under the equity method is accounted for on the same basis as that for the investee’sdirect disposal of related assets or liabilities when disposing of the investment. The shareholders’equity recognized by the investee due to the changes in shareholders’ equity other than net profitand loss, other comprehensive income, and profit distribution is transferred to the current profit andloss when the investment is disposed of; those that are still long-term equity investments afterdisposal are carried forward in proportion, and those that are converted into financial instrumentsafter disposal are carried forward in full. The initial investment costs of the long-term equityinvestment acquired other than through merger are determined with the following methods: if aninvestment is acquired through the payment of cash, its initial investment cost consists of thepurchase price actually paid and the expenses, taxes and other necessary expenses directlyrelating to the acquisition of the investment; and if an investment is acquired through the offering ofequity securities, its initial investment cost is the fair value of the equity securities offered.
For the accounting of the long-term equity investment through which the Company canexercise control over the investees, the Company adopts the cost method in individual financialstatements. Control refers to the power over an investee, with which the investor enjoys variablereturn by participating in the investee’s related activities and is able to exercise its power over theinvestee to affect the amount of return.
In the cost method, the long-term equity investment is measured by initial investment cost. Ifthe investment is added or recovered, the cost of long-term equity investment will be adjusted. Thecash dividend or profit declared by the investees to be distributed is recognized as the investmentincome for the current period.
If the Group has joint control over or significant influence on the investee, the long-term equityinvestment will be measured with the equity method. Joint control refers to joint control over anarrangement in accordance with related agreements, and decisions on the activities relating to thearrangement shall be made only after the parties sharing the control reach an agreement.Significant influence refers to the power over the decision-making on the financial affairs andbusiness policies of the investee, but the investor does not have control or joint control with othersover the formulation of those policies.
In the equity method, if the initial investment cost of long-term equity investment is higher thanthe share enjoyed by the Group in the fair value of the investee’s identifiable net assets atinvestment, the excess will be recognized in the initial investment cost of the long-term equityinvestment; if the initial investment cost of long-term equity investment is lower than the shareenjoyed by the Group in the fair value of the investee’s identifiable net assets at investment, thedifference will be recognized in the profit or loss for the current period and the cost of the long-termequity investment will be adjusted simultaneously.
In the equity method, after long-term equity investment is acquired, the investment gains orlosses and other comprehensive income shall be recognized and the book value of the long-termequity investment shall be adjusted based on the share in the net gains or losses and othercomprehensive income realized by the investees to be enjoyed or assumed. The share in theinvestee’s net gains or losses to be enjoyed shall be determined based on the fair value of theinvestee’ s identifiable assets at the acquisition of investment, according to the Group’s accounting
policies and accounting periods and after net profits of the investee are adjusted with the portion ofgains or losses from the internal transactions with its associates and joint ventures that isattributable to the investor based on the share to be enjoyed by it (but if the loss from internaltransactions falls in the assets impairment loss, it shall be recognized in full) offset, except for theinvested and sold assets that constitute businesses. The book value of long-term equity investmentshall be reduced according to the share to be enjoyed by it in the profits or cash dividend declaredby the investees to be distributed. For an investee’s net losses recognized by the Group, the bookvalue of the long-term equity investment and other long-term equity that substantially constitute netinvestment in the investee shall be written down to zero at maximum, except for the extra losses forwhich the Group is liable. For the investee’s other changes in shareholders’ equity other than netgains or losses, other comprehensive income and profit distribution, the book value of the long-termequity investment will be adjusted and the changes will be recognized in the shareholders’ equity.
For the disposal of long-term equity investment, the difference between the book value of long-term equity investment and the proceeds actually received from the disposal thereof is recognizedin the profits or loss for the current period. For the long-term equity investment measured with theequity method, if the equity method is terminated due to the disposal, the original related othercomprehensive income measured with the equity method will be accounted on the same basis asthat for the direct disposal of related assets or liabilities by the investees, and the shareholders’equity recognized due to the investees’ other changes in shareholders’ equity than net gains orlosses, other comprehensive income and profit distribution will be recognized in the profits or lossfor the current period in full; if the equity method is still adopted, the original related othercomprehensive income measured with the equity method will be accounted on the same basis asthat for the direct disposal of related assets or liabilities by the investees and recognized in theprofits or loss for the current period pro rata, and the shareholders’ equity recognized due to theinvestees’ other changes in shareholders’ equity than net gains or losses, other comprehensiveincome and profit distribution will be recognized in the profit or loss for the current period pro rata.Where the Company loses control over a subsidiary due to step-by-step disposal of its equityinvestment in the subsidiary through multiple transactions, if the transactions constitute a packageof deals, each transaction will be accounted as a transaction that disposes of the subsidiary andcauses the loss of control over the subsidiary; however, the difference between the proceeds fromeach disposal and the book value of the corresponding long-term equity investment disposed of isrecognized as other comprehensive income in individual financial statements before the Companyloses control and is recognized in the profits or loss for the period in which the control is lost at theloss of control. If the transactions do not constitute a package of deals, each transaction will beaccounted separately. In the event that the Company loses control, if the residual equity after thedisposal enables the Company to have joint control over or significant influence on the subsidiary, itwill be recognized as long-term equity investment in individual financial statements and beaccounted in accordance with the relevant rules for changing the cost method to the equity method;otherwise, it will be recognized as a financial instrument and the difference between its fair value onthe date of the loss of control and its book value will be recognized in the profit or loss for thecurrent period.
22. Property investment
(1). In cost measurement model:
Depreciation or amortization methods
A property investment is a real estate property held with the intention of earning rents or ofcapital appreciation or both, including land use rights that have been leased, land use rights that areheld and ready to be transferred after appreciation, and buildings that have been leased.
Property investments are initially measured by cost. The subsequent expenses relating to anproperty investment will be recognized in the cost of the property investment if the economicbenefits relating to the asset are very likely to flow in and the cost thereof can be measured reliably.Otherwise, they will be recognized in the profit or loss for the current period at the time of beingincurred.
The Group subsequently measures its property investments with the cost model. Thedepreciation/amortization of investment property is calculated on a straight line basis. The servicelife, estimated net residual value and annual depreciation rate of property investments are asfollows:
| Category | Service life | Estimated net residual value | Annual depreciation rate |
| Buildings and structures | 20-30 years | 4% | 3.2%-4.8% |
| Land use right | 40-70 years | - | 1.4%-2.5% |
23. Fixed assets
(1). Recognition requirements
√Applicable □Not Applicable
A fixed asset will be recognized only if the economic benefits relating thereto are very likely toflow into the Group and its cost can be measured reliably. If meeting the above recognitionrequirement, the subsequent expenses relating to a fixed asset will be recognized in the cost of thefixed asset, and the book value of the replaced part will be deleted; otherwise, the subsequentexpenses will be recognized in the profit or loss for the current period at the time of being incurred.
Fixed assets are initially measured by cost. The costs of purchasing a fixed asset include thepurchase price, related taxes and other expenses that are incurred before the fixed asset is madeto the predetermined ready-for-use status and are directly attributable to the asset.
(2). Depreciation methods
√Applicable □Not Applicable
| Category | Depreciation methods | Depreciation period (number of years) | Residual value rate | Annual depreciation rate |
| Buildings and structures | Straight-line method | 10-40 | 4% | 2.4%-9.6% |
| General equipment | Straight-line method | 5-10 | 4% | 9.6%-19.2% |
| Transportation equipment | Straight-line method | 6 | 4% | 16.0% |
(3). Identification basis, pricing and depreciation method of the fixed assets under financial
lease
√Applicable □Not Applicable
The depreciation method for the fixed assets under financial lease is the same as that forproprietary fixed assets. If it can be reasonably determined that the ownership of a leased asset willbe acquired upon expiry of the lease term, the depreciation will be based on its service life; if itcannot be reasonably determined that the ownership of a leased asset can be acquired upon expiryof the lease term, the depreciation will be based on the lease term or the service life of the asset,whichever is shorter.
24. Construction in progress
√Applicable □Not Applicable
The cost of construction in progress is determined based on the actual expenses, including thenecessary expenses on the works incurred during the construction, the borrowing costs incurredbefore the works reach the predetermined ready-for-use status that shall be capitalized and otherrelated expenses.
The construction in progress will be recognized as fixed assets, property investment and long-term prepaid expenses when reaching the predetermined ready-for-use status.
25. Borrowing costs
√Applicable □Not Applicable
Borrowing costs refer to the interests incurred by the Group for its borrowings and other relatedcosts, including interest, amortization of discounts or premiums, ancillary costs and exchangedifference arising from foreign currency borrowings.
Borrowing costs that are directly attributable to the acquisition, construction or production of theassets qualified for capitalization shall be capitalized, and other borrowing costs shall be recognizedin the profit or loss for the current period. The assets qualified for capitalization refer to the fixed
assets, property investment, inventory and other assets that can reach the predetermined ready-for-use or sale status only after a quite long time of acquisition, construction or production.Borrowing costs can start to be capitalized only if they meet the following requirementssimultaneously:
(1) the expenses on assets have been incurred;
(2) the borrowing costs have been incurred;
(3) The purchase, construction or production activities necessary to make the asset reach theintended usable or saleable status have started.The borrowing costs for the assets qualified for capitalization shall cease being capitalizedwhen the assets reach the predetermined ready-for-use or sale status after the acquisition,construction or production. The borrowing costs incurred subsequently will be recognized in theprofit or loss for the current period.During capitalization, the amount of interest to be capitalized during each accounting period isdetermined as follows:
For special borrowings, the amount of interest to be capitalized is the interest expensesactually incurred during the current period less the temporary deposits interest income orinvestment income.
(2) For occupied general borrowings, it is calculated and determined based on the weightedaverage of asset expenditures of the accumulated asset expenditure exceeding the portion ofspecial borrowings multiplied by the weighted average interest rate of the occupied generalborrowings.
If an asset qualified for capitalization is interrupted abnormally for more than three monthsduring its acquisition, construction or production except due to the necessary procedures for it toreach the predetermined ready-for-use or sale status, the capitalization of its borrowing costs will besuspended. The borrowing costs incurred during the interruption will be recognized as expensesand in the profit or loss for the current period until the acquisition, construction or production of theasset is resumed.
26. Biological assets
□Applicable √Not Applicable
27. Oil and gas assets
□Applicable √Not Applicable
28. Right-of-use assets
√Applicable □Not Applicable
The Group's right-of-use asset classes mainly include buildings.
On the commencement date of the lease term, the Group recognizes its right to use the leasedassets during the lease term as the right to use them, including: the initial measurement amount ofthe liabilities of the lease; The amount of the lease payment paid on or before the commencementdate of the lease term, where there is a lease incentive, shall be deducted from the amount of thelease incentive already enjoyed; Initial direct costs incurred by lessee; Costs expected to beincurred by the Lessee to disassemble and remove the leased asset, restore the leased asset tothe site, or restore the leased asset to the state agreed upon in the lease terms. The Groupsubsequently shall adopt the straight-line method for the depreciation of the usufruct assets. Wherethe ownership of the leased asset can be reasonably determined at the end of the lease term, theGroup shall take depreciation during the remaining useful life of the leased asset. Where it is notreasonably certain that ownership of the leased asset will be acquired at the end of the lease term,the Group shall make depreciation within the shorter period of the lease term or the remaininguseful life of the leased asset.
When the Group measures the lease liabilities again according to the present value of thechanged lease payment amount and adjusts the book value of the right to use assets accordingly, ifthe book value of the right to use assets has been reduced to zero, but the lease liabilities still needto be further reduced, the Group shall record the remaining amount into the current profit and loss.
29. Intangible assets
(1). Measurement method, service life and impairment test
√Applicable □Not Applicable
Intangible assets will be recognized only if the economic benefits relating thereto are very likelyto flow into the Group and the costs thereof can be measured reliably, and will be initially measuredby cost. However, the intangible assets acquired from the merger of the enterprises not undercommon control will be individually recognized so long as the fair values thereof can be measuredreliably, and will be measured by fair value.
The service life of an intangible asset is determined based on the term during which it can bringeconomic benefits to the Group. If the term during which an intangible asset can bring economicbenefits to the Group is unforeseeable, it will be deemed as an intangible asset with uncertainservice life.
The service life of intangible assets is as follows:
| Category | Service life |
| Land use right | 40-50 years |
| Software | 10 years |
The land use rights acquired by the Group are generally accounted as intangible assets. Thebuildings constructed by the Group itself, the related land use rights and buildings are accounted asintangible assets and fixed assets respectively. The price paid for the land and buildings purchasedexternally shall be allocated between the land use rights and buildings. If it is hard to reasonablyallocate the price, the price in full will be treated as fixed assets.
The intangible assets with finite service life shall be amortized with the straight-line methodduring their service life. The Group reviews and makes adjustment to, if necessary, the service lifeand amortization method of its intangible assets with finite service life at least at the end of eachyear.
(2). Accounting policies for internal R&D expenses
√Applicable □Not Applicable
The Group divides expenditures for internal R & D projects into research expenditures anddevelopment expenditures. Research expenses are recognized in the profit or loss for the currentperiod at the time of being incurred. Development expenditures can be capitalized only when all ofthe following conditions are met at the same time, that is, it is technically feasible to complete theintangible asset to make them usable or saleable; there is an intention to complete the intangibleasset and use or sell it; the way for intangible assets to generate economic benefits, including theability to prove that there are markets for the products generated by the intangible assetsor theintangible assets themselves. Intangible assets that will be used internally can prove theirusefulness; there are sufficient technology, financial resources and other resource supports tocomplete the development of the intangible asset and ability to use or sell the intangible asset; theexpenditure attributable to the development of such intangible asset can be reliably measured.Development expenditures that do not satisfy the above conditions are included in the currentprofits and losses when incurred.
30. Impairment of long-term assets
√Applicable □Not Applicable
The Group determines the impairment of the assets other than inventory, deferred income taxand financial assets with the following methods.
The Group decides on the balance sheet date whether an asset has a sign of impairment. If ithas a sign of impairment, the Group will estimate its recoverable value and carry out an impairmenttest. For the goodwill formed due to the merger of enterprises and the intangible assets withuncertain service life, the Group carries out impairment tests at least at the end of each year,regardless of the impairment signs. For the intangible assets that have not been ready for use, theGroup also carries out impairment tests every year.
The recoverable value of an asset is determined based on the fair value of the asset less thedisposal expenses or the present value of the expected future cash flows of the asset, whichever ishigher. The Group estimates the recoverable value of each asset. For an asset whose recoverablevalue is hard to be estimated, the Group estimates the recoverable value of the assets Group whichthe asset belongs to. An assets Group is identified based on whether the main cash inflows fromthe Group are independent from the cash inflows from other assets or assets Groups.
When the recoverable value of an asset or assets Group is lower than its book value, theGroup will write down its book value to the recoverable value and the amount written down will berecognized in the profit or loss for the current period; meanwhile, it will make provision for theimpairment thereof.The above assets impairment loss will not be reversed during the subsequent accountingperiods.
31. Long-term prepaid expenses
√Applicable □Not Applicable
Long-term prepaid expenses are amortized with the straight-line method and the amortizationperiods are as follows:
| Category | Amortization period |
| Architectural ornaments of buildings | 3-5 years |
| Advertising facilities | 3-5 years |
32. Contract liabilities
(1). Recognition of contract liabilities
√Applicable □Not Applicable
The Group presents contractual assets or contractual liabilities in the balance sheet based onthe relationship between performance obligations and customers’ payments. The Group offsets thecontractual assets and contractual liabilities under the same contract as a net amount.
A contractual liability refers to an obligation to transfer goods or services to a customer for theconsideration received or receivable from the customer, such as the amount received by theenterprise before the transfer of committed goods or services.
33. Employee salary
(1). Accounting treatment of short-term salary
√Applicable □Not Applicable
The short-term salary actually incurred during the accounting period when the employeesprovide service for the Group are recognized as liabilities and are recognized in the profit or loss forthe current period or costs of related assets.
(2). Accounting treatment of post-employment benefits
√Applicable □Not Applicable
The employees of the Group participate in the endowment insurance and unemploymentinsurance managed by the local government, as well as the enterprise annuity, and thecorresponding expenditures are included in the relevant asset cost or current profit and loss whenincurred.
(3). Accounting treatment of severance benefits
√Applicable □Not Applicable
When the Group provides severance benefits to its employees, the employee compensationliabilities arising from the severance benefits will be recognized, and the amount will be recognizedin the profit or loss for the current period on the earlier date below: the date when the Group cannotunilaterally withdraw the severance benefits provided as a result of the employment terminationplan or downsizing proposal; or the date when the Group recognizes the costs or expenses relatingto the reorganization involving the payment of severance benefits.
(4). Accounting treatment of other long-term employee benefits
□Applicable √Not Applicable
34. Lease liabilities
√Applicable □Not Applicable
At the commencement date of the lease period, the Group recognizes the present value of theoutstanding lease payments as a lease liability, except for short term and low value leases. Incalculating the present value of the lease payments, the Group uses the lease embedded interestrate as the discount rate; If the inherent interest rate of the lease cannot be determined, the lessee'sincremental borrowing rate shall be used as the discount rate. The Group calculates the interestexpense of the lease liability in each period of the lease term in accordance with the fixed cyclicalinterest rate and records it into the current profit and loss, except as otherwise stipulated in the costof the relevant assets. The variable lease payment not included in the measurement of leaseliabilities shall be recorded into the profit and loss of the current period when it actually occurs,except for those included in the cost of related assets as otherwise stipulated.After the lease term begins, in the future when substantial changes occurred in the fixed payment,the guaranteed residual value is expected to cope with the amount of change, is used to determinethe lease payment ratio index or change, call options, renewal options or terminate the optionevaluation results or the actual exercise changes, after the Group according to the change of thepresent value of the lease payments to measure lease liability.
35. Estimated liabilities
√Applicable □Not Applicable
Except for the contingent considerations and contingent liabilities assumed in the mergers ofenterprises not under common control, an obligation relating to contingent matters will berecognized by the Group as estimated liabilities if meeting the following requirementssimultaneously:
(1) The obligation is a current obligation assumed by the Group;
(2) The performance of the obligation may result in the outflow of economic benefits from theGroup;
(3) The amount of the obligation can be measured reliably.
Estimated liabilities are initially measured based on the best estimate of the expenses requiredfor the performance of related current obligations, and the risks, uncertainties and time value ofmoney relating to the contingent matters are also factored in. The book value of estimated liabilitiesis reviewed on each balance sheet date. If any conclusive evidence indicates that the book valuecannot reflect the current best estimate, the book value will be adjusted based on the current bestestimate.
36. Share-based payment
√Applicable □Not Applicable
Share-based payment is divided into equity-settled share-based payment and cash-settledshare-based payment. An equity-settled share-based payment refers to a deal in which the Groupuses shares or other equity instruments as the consideration for settlement to obtain services.
The equity-settled share-based payment in exchange for services provided by employees shallbe measured at the fair value of the equity instruments granted to employees. If it can be exercisedimmediately after the grant, it shall be included in the relevant costs or expenses at fair value on thegrant date, and the capital reserve shall be increased accordingly; if it cannot be exercised until theservice within the waiting period has been completed or the specified performance conditions havebeen satisfied on each balance sheet date during the waiting period, the Group will, based on thebest estimate of the number of exercisable equity instruments, include the services acquired in thecurrent period, as relevant costs or expenses based on the fair value on the grant date, andincrease the capital reserve accordingly .
None of cost or expense shall be recognized for a share payment that cannot be exercised dueto failure to meet non-market conditions and/or service period conditions. Where market conditionsor non-exercising conditions are stipulated in the share-based payment agreement, regardless ofwhether the market conditions or non-exercising conditions are satisfied, it shall be deemed asexercisable as long as all other performance conditions and/or service period conditions have beensatisfied.
If the equity-settled share payment is canceled, it will be treated as an accelerated exercise onthe cancellation day, and the unrecognized amount shall be recognized immediately. If anemployee or other party has option to satisfy the non-exercising conditions but fails to satisfy withinthe waiting period, it shall be treated as cancellation of equity-settled share-based payment.However, if a new equity instrument is granted and if it is determined that the new equity instrumentgranted is used to replace the canceled equity instrument on the grant date of the new equity
instrument, the replacement equity instruments granted in the same way shall be treated in thesame way as that for the modification of the terms and conditions for the original equity instrument.
37. Preferred shares, perpetual bonds and other financial instruments
□Applicable √Not Applicable
38. Revenue
(1). Accounting policies for the recognition and measurement of revenue
√Applicable □Not Applicable
The Group recognizes incomes when it has fulfilled its performance obligations in the contract,that is, the customer has acquired the control over the relevant goods or services. The acquisitionof the control over related goods or services means the ability to control the use of the goods or theprovision of the service and obtain almost all of the economic benefits from them.Commodity sales contractsCommodity sales contracts between the Group and customers usually only includeperformance obligations for the transferred commodities. The Group generally recognizes incomeson the basis of comprehensive consideration of the following factors, at the time when the customerobtains control of the relevant products: the acquisition of the current right to receive payment forthe commodities, the transfer of the major risks and rewards in the ownership of the commodities,the transfer of the legal ownership of the commodities, the transfer of the physical assets of thecommodities, and the acceptance of the commodities by the customer.
Service contracts
The service contracts between the Group and its customers usually include performanceobligations such as the provision of the use of shops in the Commodity City and its operatingsupporting services, the provision of hotel accommodation services and hotel catering services, andthe provision of fixed-term paid funding services to related parties outside the Group.
The use of shops in the Commodity City and its supporting services
Since customers obtain and consume the economic benefits brought about by the Group’sperformance at the time of the performance by the Group, the Group regards them as aperformance obligation to be fulfilled within a certain period of time and recognizes an incomebased on the performance progress, except that the performance progress cannot be reasonablydetermined. Under the output method, the Group determines the performance progress of theprovision of the use of shops in the Commodity City and the supporting services for its operationbased on the number of using days of the shops When the performance progress cannot bereasonably determined, if the cost incurred by the Group is expected to be compensated, theincome shall be recognized according to the amount of the cost incurred until the performanceprogress can be reasonably determined.
Hotel accommodation business
Since customers obtain and consume the economic benefits brought about by the Group’sperformance at the time of the performance by the Group, the Group regards them as aperformance obligation to be fulfilled within a certain period of time and recognizes an incomebased on the performance progress, except that the performance progress cannot be reasonablydetermined. In accordance with the output method, the Group determines the performanceprogress of hotel accommodation services based on the number of staying days. When theperformance progress cannot be reasonably determined, if the cost incurred by the Group isexpected to be compensated, the income shall be recognized according to the amount of the costincurred until the performance progress can be reasonably determined.
Hotel catering business
For individual performance obligations in the provision of hotel catering services, the Groupprices hotel catering services separately, and uses the completion of hotel catering services as thepoint of income recognition.
Fixed -time paid funding services
Since customers obtain and consume the economic benefits brought about by the Group’sperformance at the time of the performance by the Group, the Group regards them as aperformance obligation to be fulfilled within a certain period of time and recognizes an incomebased on the performance progress, except that the performance progress cannot be reasonablydetermined. Under the output method, the Group determines the performance progress of theservices for the fixed-term paid funding services based on the number of using days of funds. When
the performance progress cannot be reasonably determined, if the cost incurred by the Group isexpected to be compensated, the income shall be recognized according to the amount of the costincurred until the performance progress can be reasonably determined.
(2). Differences in the revenue recognition policies for the same business under differentbusiness models
□Applicable √Not Applicable
39. Contract cost
□Applicable √Not Applicable
40. Government grants
√Applicable □Not Applicable
A government grant is recognized when it can meet the requirements and can be received. If agovernment grant falls in monetary assets, it will be measured by the amount received or receivable.If a government grant does not fall in monetary assets, it will be measured by fair value. If the fairvalue of a grant cannot be determined reliably, it will be measured by its nominal amount.A government grant prescribed by government documents to be used to acquire or construct orotherwise form long-term assets will be deemed as an asset-related government grant; if nogovernment documents have express provisions, the grants that are used to acquire or construct orotherwise form long-term assets will be deemed as asset-related government grants and others asincome-related government grants.
The income-related government grants that are used to compensate for the related costs,expenses or losses during the subsequent periods are recognized as deferred income and will berecognized in the profit or loss or against the related costs for the period when the related costs,expenses or losses are recognized. The income-related government grants used to compensate forthe related costs, expenses or losses that have been incurred are directly recognized in the profit orloss or against the related costs for the current period.
The asset-related government grants shall be used to offset the book value of related assets;orrecognized as deferred income, and included in profit and loss in stages under a reasonable andsystematic method during the useful life of the related assets (but government grants measured at anominal amount shall be directly included in the current profit and loss); if the relevant asset is sold,transferred, scrapped or damaged before the end of its useful life, the balance of the undistributeddeferred income shall be transferred to the current profit and loss when the asset is disposal.
If the finance allocates the discounted funds to the loan bank, and the loan bank provides theGroup with a loan at a policy-oriented preferential interest rate, the Group takes the actual loanamount received as the book value of the loan, and the loan principal and the policy Thepreferential interest rate calculates the relevant borrowing costs.
41. Deferred income tax assets and deferred income tax liabilities
√Applicable □Not Applicable
Income tax consists of current income tax and deferred income tax. Except for the income taxarising from the adjustment of goodwill caused by the mergers of enterprises or the income tax thatis related to the transactions or matters directly recognized in shareholders’ equity, which arerecognized in the shareholders’ equity, income tax will be recognized in the profit or loss for thecurrent period as income tax expenses or income.
The Group measures the current income tax liabilities or assets formed during the currentperiod and the previous periods by the estimated amount of income tax to be paid or refunded ascalculated in accordance with the tax law.
The Group recognizes deferred income tax with the balance sheet liability method based onthe temporary difference between the book value of assets and liabilities on the balance sheet dateand the tax base and that between the book value of the items that have not been recognized asassets and liabilities but whose tax base can be determined according to the tax law and the taxbase thereof.
All taxable temporary differences will be recognized as deferred income tax liabilities, unless:
(1) The taxable temporary difference is generated in the following types of transactions: theinitial recognition of goodwill, or the initial recognition of assets or liabilities generated in atransaction with the following characteristics: the transaction is not a business merger, and neither
affecting accounting profits, nor impacting taxable incomes or deductible losses when transactionoccurs.
(2) For taxable temporary differences related to investments in subsidiaries, joint ventures andassociated enterprises, the time for the reversal of the temporary differences can be controlled andthe temporary differences may not be reversed in the foreseeable future.For the deductible temporary differences and the deductible losses and tax deductions that canbe carried forward to the subsequent years, the Group recognizes the deferred income tax assetsarising therefrom within the limit of the future taxable income that is very likely to be obtained andused to be offset against the deductible temporary differences, deductible losses and taxdeductions, unless:
(1) The deductible temporary differences are generated in the following transactions: Thetransaction is not a business combination, and when the occurrence of the transaction affectsneither accounting profits nor taxable income or deductible losses.
(2) For deductible temporary differences related to investments in subsidiaries, joint venturesand associates, if all of the following conditions are satisfied simultaneously, the correspondingdeferred income tax assets are recognized: the temporary differences are likely to be reversed inthe foreseeable future, and it is likely to obtain taxable income that can be used to offset thedeductible temporary differences in the future.
The Group measures, on the balance sheet date, the deferred income tax assets and liabilitiesbased on the applicable tax rate for the period when the assets are expected to be recovered or theliabilities are expected to be paid off, in accordance with the tax law, which will also reflect theimpact of the way of the expected recovery of assets or repayment of liabilities on the income taxon the balance sheet date.
The Group reviews the book value of deferred income tax assets on the balance sheet date. Ifit is very likely to be unable to acquire adequate taxable income to be offset against the benefits ofdeferred income tax assets in the future, the book value of deferred income tax assets will bewritten down. On the balance sheet date, the Group re-evaluates the unrecognized deferred incometax assets and recognizes the same to the extent that it is very likely to acquire adequate taxableincome to reverse all or part of the deferred income tax assets.
If all the following requirements are met, deferred income tax assets and liabilities will bepresented in net amount after offsetting: the Group has the legal right to settle the current incometax assets and liabilities in net amount; the deferred income tax assets and liabilities are related tothe income tax levied by an identical tax authority on an identical taxpayer, or are related to theincome tax levied by an identical tax authority on different taxpayers, but during each importantperiod when the deferred income tax assets and liabilities are reversed, the involved taxpayersintend to settle the current income tax assets and liabilities in net amount or acquire assets or payoff debts simultaneously.
42. Lease
(1). Accounting treatment of operating lease
□Applicable √Not Applicable
(2). Accounting treatment of financial lease
□Applicable √Not Applicable
(3). Determination and accounting treatment of leases under the new lease standards
√Applicable □Not Applicable
Identification of the lease
On the commencement date of the contract, the Group evaluates whether the contract is alease or an inclusive lease if a party in the contract cedes the right to control the use of one or moreidentified assets for a certain period in exchange for consideration. To determine whether thecontract cedes the right to control the use of the identified assets for a certain period, the Groupassesses whether the client in the contract is entitled to receive almost all the economic benefitsarising from the use of the identified assets during the use period and to dominate the use of theidentified assets during the use period.
Identification of separate leases
If the contract contains multiple separate leases at the same time, the Group will split thecontract and account for each separate lease separately. The right to use the identified assetconstitutes a separate lease in the contract if both of the following conditions are met:
(1) The lessee can profit from the use of the asset alone or in combination with other readilyavailable resources;
(2) The asset is not highly dependent or highly related to other assets in the contract.
Separation of lease and non-lease components
If the contract contains both lease and non-lease parts, when the Group acts as the lessor andlessee, the lease and non-lease parts are separated for accounting treatment.
Evaluation of the lease term
The lease term is the irrevocable period during which the Group has the right to use the leasedasset. The Group has the option to renew the lease, that is, it has the right to choose to renew thelease of the asset, and if it is reasonably certain that the option will be exercised, the lease termalso includes the period covered by the renewal option. The Group has the option to terminate thelease, that is, it has the right to choose to terminate the lease of the asset, but if it is reasonablycertain that the option will not be exercised, the lease term includes the period covered by theoption to terminate the lease. In the event of a major event or change within the control of theGroup and affecting whether the Group is reasonably certain to exercise the corresponding option,whether the Group is reasonably certain to exercise the option to renew the lease, purchase theoption or not exercise the option to terminate the lease right to be reassessed.
As a tenant
See Note V. 28 and Note V. 34 for the general accounting treatment of the Group as a lessee.
Change in lease
Change in lease is the change in lease scope, lease consideration and lease term beyond theoriginal contract terms, including increasing or terminating the right to use one or more leasedassets, extending or shortening the lease term specified in the contract, etc.
If the lease changes and the following conditions are met at the same time, the Group willaccount for the change in lease as a separate lease:
(1) The change in lease expands the scope of the lease by increasing the right to use one ormore leased assets;
(2) The increased consideration is equivalent to the amount adjusted by the individual price ofthe expanded part of the lease scope according to the contract.
If the lease modification is not accounted for as a separate lease, on the effective date of thelease modification, the Group re-determines the lease term and discounts the modified leasepayments using the revised discount rate to remeasure the lease liability . When calculating thepresent value of the lease payment after the change, the Group uses the lease embedded interestrate of the remaining lease period as the discount rate; If it is impossible to determine theembedded interest rate of the remaining lease period, the Group's incremental loan interest rate onthe effective date of the lease change shall be used as the discount rate.
Regarding the impact of the above lease liability adjustment, the Group conducts accountingtreatment according to the following situations:
(1) If the change in lease results in the narrowing of the lease scope or the shortening of thelease term, the Group reduces the book value of the right-of-use assets to reflect the partial orcomplete termination of the lease, and the relevant gains or losses from the partial or completetermination of the lease are included in profit and loss for the current period;
(2) For other changes in lease, the Group adjusts the book value of the right-of-use assetaccordingly.
Short-term leases and leases of low-value assets
The Group regards leases with a lease term shorter than 12 months and excluding purchaseoptions as short-term leases on the commencement date of the lease term; leases with a value notexceeding RMB 40,000 when a single leased asset is a brand-new asset is identified as a low-valueasset lease. If the Group subleases or expects to sublease the leased assets, the original lease isnot recognized as a low-value asset lease. The Group chooses not to recognize right-of-use assetsand lease liabilities for short-term leases and leases of low-value assets. In each period of the leaseterm, it is included in the relevant asset cost or current profit and loss on a straight-line basis.
As a lessor
The lease that transfers virtually all the risks and rewards related to the ownership of theleased asset on the lease commencement date is a finance lease, and other leases are operatingleases.
The Group as the lessor to operating leases
Rental income from operating leases is recognised in profit or loss on a straight-line basis overeach period of the lease term, and variable lease payments not included in lease receipts areincluded in profit or loss for the current period when actually incurred.If an operating lease is changed, the Group will account for it as a new lease from the effectivedate of the change, and the advance receipts or lease receivables related to the lease before thechange will regarded as the receipts of the new lease.
43. Other important accounting policies and accounting estimates
√Applicable □Not Applicable
Distribution of profits
The Company’s cash dividend is recognized as liabilities after approval by the shareholders’meeting.
Measurement of fair value
The Group measures the fair values of equity instruments investments on each balance sheetdate. Fair value refers to the price received from the sale of an asset or paid for the transfer of aliability by a market player in the orderly transactions on the measurement date. The Groupmeasures the related asset or liability by fair value, assuming that the orderly transaction of sellingthe asset or transferring the liability is executed in the principal market of related asset or liability, orif there is no principal market, assuming that the transaction is executed in the most advantageousmarket of related asset or liability. The principal market (or most advantageous market) is themarketplace which the Group can enter on the measurement date. The Group adopts theassumptions used by market players to maximize economic benefits in the pricing of the assets orliabilities.
When measuring non-financial assets at fair value, consider the ability of market participants touse the asset for the best use to generate economic benefits, or to sell the asset to other marketparticipants who can use the asset for the best use to generate economic benefits.
The Group adopts the valuation technique that is applicable under the current conditions and issupported with sufficient available data and other information and uses the related observableinputs with priority. The unobservable inputs will be used only if the observable inputs areunavailable or it is unfeasible to acquire the observable inputs.
For the assets and liabilities which are measured or disclosed by fair value in the financialstatements, the levels of fair value are determined based on the lowest-level input of importantsignificance for the overall measurement of fair values: Level 1 input is the unadjusted offer price foran identical asset or liability that can be obtained in an active market on the measurement date;Level 2 inputs are the inputs that are directly or indirectly observable for related assets or liabilitiesother than Level 1 inputs; Level 3 inputs are the inputs that are observable for related assets orliabilities.
On each balance date, the Group re-evaluates the assets and liabilities that are recognized inthe financial statements and keep being measured by fair value so as to determine whether tochange the measurement levels of fair value.
Significant accounting judgments and estimates
In the preparation of financial statements, the management need to make judgments,estimates and assumptions, which will affect the presented amounts and disclosure of revenue,expenses, assets and liabilities and the disclosure of contingent liabilities on the balance sheet date.However, the uncertainties of these assumptions and estimates may cause material adjustment tothe book value of the assets or liabilities that will be affected in the future.
Judgments
When applying the Group’s accounting policies, the management have made the followingjudgments which have had significant influence on the amounts recognized in the financialstatements:
Operating lease—as the lessor
The Group has signed lease contracts for the property investments. The Group thinks thataccording to the terms of the lease contracts, the Group retains all major risks and compensationson the titles of those real estate properties and thus handles them as operating leases.
Partition between property investments and fixed assets
The Group classifies the buildings and structures leased out other than for the main businessessuch as market and hotel services as well as the auxiliary land use rights thereof as propertyinvestments, including but not limited to the auxiliary banking and catering outlets for market
operation and the auxiliary service outlets for hotels. Other buildings and structures leased out areclassified as fixed assets.Judgments on assets acquisition and mergers of enterprisesWhen determining whether an acquisition transaction constitutes a merger, the Groupassesses various factors, including whether the acquiree constitutes a business, in accordance withthe Accounting Standards for Enterprises No. 20 – Merger of Enterprises. A business refers to aGroup of some production and operation activities or assets and liabilities within an enterprise,which has the input, processing and output abilities and whose costs and expenses or revenue canbe calculated independently, but an asset or a Group of assets or liabilities can be deemed as abusiness so long as it has the input and processing processes. The Group makes comprehensivejudgments by combining the asset acquired and the processing process.Business modelThe classification of financial assets at initial recognition depends on the Group’s businessmodel for the management of financial assets. When judging the business model, the Group factorsin the enterprise evaluation, the way of reporting financial assets performance to key managementpersonnel, the risks affecting the performance of financial assets, the way of managing financialassets and the way of related business management personnel obtaining remunerations. Whenassessing whether to aim at the collection of contractual cash flow, the Group needs to analyze thereasons, time, frequency and value for sale of the financial assets to be sold before the expiry datesthereof.Characteristics of contractual cash flowThe classification of financial assets at initial recognition depends on the characteristics of thecontractual cash flow of the financial assets. For the judgment on whether the contractual cash flowis the repayment of principal and the payment of interest on outstanding principal, including theevaluation of the adjustment to the time value of money, it should be judged whether it issignificantly different from the benchmark cash flow; for the financial assets with the earlyrepayment characteristic, it should be judged whether the fair value of the early repaymentcharacteristic is extremely low.Uncertainties of estimatesThe key assumptions on the balance sheet date for the future and other key sources of theuncertainties of estimates are shown below, which may cause significant adjustments to the bookvalues of assets and liabilities during the future accounting periods.Impairment of financial instrumentsThe Group evaluates the impairment of financial instruments with the expected credit lossmodel. To apply the model, the Group needs to make significant judgments and estimates and takeinto account all reasonable and evidenced information, including forward-looking information. Whenmaking these judgments and estimates, the Group infers the expected changes in the debtors’credit risks based on their historical repayment data, in combination with the economic policies,macroeconomic indicators and industry risks. Different estimates may affect the provisions forimpairment and the provision that has been made for impairment may not necessarily be equal tothe actual amount of impairment loss in the future.Net realizable value of property inventoryThe Group’s property inventory is measured by cost or net realizable value, whichever is lower.For the calculation of net realizable value, assumptions and estimates should be used. If themanagement adjust the estimated price and the costs and expenses to be incurred until thecompletion, it will affect the estimate of the net realizable value of the inventory and the differencewill affect the provision for inventory depreciation.
Impairment of non-current assets other than financial assets (excluding goodwill)The Group determines, on the balance sheet date, whether the non-current assets other thanfinancial assets have a sign of being impaired. For a non-current asset other than financial asset, ifit is indicated that its book value cannot be recovered, an impairment test will be made. When thebook value of an asset or a Group of assets is higher than its recoverable value, i.e. fair value lessthe disposal expenses or the present value of expected future cash flow, whichever is higher, theasset or Group has been impaired. For the fair value less the disposal expenses, the Group refersto the agreed selling price or observable market price of the similar asset in a fair transaction, lessthe cost increase directly attributable to the disposal of the asset. When predicting the present valueof future cash flows, the management must estimate the expected future cash flows of the asset orGroup of assets and select an appropriate discount rate. When identifying a Group of assets, themanagement consider whether the smallest identifiable Group of assets can generate income andcash flows independently from other departments or units, or the income and cash inflows
generated thereby are mostly independent from other departments or units, and also take intoaccount the way of managing or monitoring production and operating activities and the way ofmaking decisions on the continued use or disposal of the asset.
Fair value of unlisted equity investmentValuation of the unlisted equity investment is the expected future cash flows discounted at thecurrent discount rate of other financial instruments with similar contract terms and riskcharacteristics. This requires the Group to estimate the expected future cash flows, credit risk,volatility and discount rate, which brings uncertainties.Development expensesWhen determining the amount of capitalization, management must make assumptions on theexpected future cash flow, the applicable discount rate, and the expected benefit period of the asset.Deferred income tax assetsTo the extent that it is very likely for the Group to have enough taxable income to be offsetagainst the deductible losses, the Group shall recognize deferred income tax assets in connectionwith the outstanding deductible losses. This requires the management to use lots of judgments toestimate the acquisition time and amount of the taxable income to be acquired in the future todetermine the amount of deferred income tax assets to be recognized, in consideration of the taxpayment planning strategy.Service life and residual value of fixed assetsThe Group makes provisions for the depreciation of its fixed assets during the expected servicelife thereof after considering their residual value. The Group reviews the expected service life andresidual value of related assets on a regular basis to determine the amount of depreciationexpenses to be recognized for each reporting period. The Group determines the service life andresidual value of assets based on its experience in similar assets and in combination with theexpected technology changes. If the previous estimates have material changes, the depreciationexpenses will be adjusted for the future periods.
44. Changes in important accounting policies and accounting estimates
(1). Changes in important accounting policies
√Applicable □Not Applicable
| Contents and reason for changes in accounting policies | Approving procedure | Remarks (substantially affected items and amounts) |
| In 2018, the Ministry of Finance promulgated the revised Accounting Standards for Business Enterprises No. 21 – Leases (“New Lease Standards”), which adopts a single model similar to the current accounting treatment of financial leases, requiring lessees to All leases other than leases and leases of low-value assets recognize a right-of-use asset and a lease liability, with depreciation and interest expense, respectively. The Group will start accounting in accordance with the newly revised lease standards from January 1, 2021. | Changes in statutory accounting policies | See other notes for details |
Other statements
According to the linking regulations, the information of the comparable period will not beadjusted, and the retained earnings at the beginning of 2021 will be retrospectively adjusted for thedifference between the new lease standard on the first implementation date and the current leasestandard:
(1) For financial leases before the date of initial implementation, the Group measures the right-of-use assets and lease liabilities according to the original book values of the finance leased assetsand finance lease payments payable;
(2) For operating leases prior to the date of initial application, the Group measures leaseliabilities based on the present value of the remaining lease payments discounted at theincremental borrowing rate on the date of initial application, and according to the prepaid rent,makes necessary adjustments to an amount euqal to the lease liability for each lease to measurethe right-of-use asset;
(3) The Group conducts impairment test on right-of-use assets in accordance with Note V. 30and performs corresponding accounting treatment.
The Group adopts simplified treatment for operating leases whose leased assets are low-valueassets before the date of initial application or operating leases that will be completed within 12months, and no right-of-use assets and lease liabilities are recognized for them. In addition, theGroup adopts the following simplified treatment for operating leases prior to the date of initialapplication:
(1) When measuring lease liabilities, the same discount rate may be used for leases withsimilar characteristics; the measurement of right-of-use assets may not include initial direct costs;
(2) If there is an option to renew the lease or to terminate the lease, the Group determines thelease term according to the actual exercise of the option before the date of initial execution andother latest information;
(3) As an alternative to the right-of-use asset impairment test, the Group assesses whether acontract including a lease is a onerous contract before the date of initial application according toNote V. 28, and adjusts the right-of-use assets according to the amount of the loss provisionrecorded in the balance sheet before the date of initial implementation;
(4) For lease modification prior to the date of initial implementation, the Group conductsaccounting treatment according to the final arrangement of lease modification.
For the minimum lease payments outstanding for significant operating leases disclosed in thefinancial statements for 2020, the Group's adjustment process for the difference between thediscounted present value of the incremental borrowing rate of the Japan Group as the lessee on 1January 2021 and the lease liabilities recorded on the balance sheet on 1 January 2021 is asfollows:
| Major Operating Lease Minimum Lease Payments as of December 31, 2020 | - | |
| Weighted Average Incremental Borrowing Interest Rate | 2.78%-8.01% | |
| Present value of operating lease payments as of 1 January 2021 | 236,505,193.35 | |
| Plus: Finance lease payments payable as of December 31, 2020 | - | |
| Lease liability as of January 1, 2021 | 236,505,193.35 |
The impact of the implementation of the new lease standard on balance sheet items onJanuary 1, 2021 is as follows:
Consolidated Balance Sheet
| Number of statements | Assuming that the original standard is implemented | Affected amount | ||||
| Advance from customers | 98,855,083.89 | 105,187,528.26 | -6,332,444.37 | |||
| Other receivables | 2,700,742,786.35 | 2,708,478,136.25 | -7,735,349.90 | |||
| Right-of-use assets | 249,646,048.55 | - | 249,646,048.55 | |||
| Long-term receivables | 133,058,661.88 | 126,756,573.81 | 6,302,088.07 | |||
| Long-term prepaid expenses | 105,353,574.36 | 110,728,723.36 | -5,375,149.00 | |||
| Non-current liabilities due within one year | 1,321,957,116.90 | 1,315,026,574.43 | 6,930,542.47 | |||
| Lease liabilities | 229,574,650.88 | - | 229,574,650.88 | |||
| 4,839,187,922.81 | 4,366,177,536.11 | 473,010,386.70 |
Corporate balance sheet
| Number of statements | Assuming that the original standard is implemented | Affected amount | ||||
| Prepayments | 26,853,922.86 | 29,452,445.04 | -2,598,522.18 | |||
| Other receivables | 2,651,620,610.06 | 2,651,640,610.06 | -20,000.00 | |||
| Right-of-use assets | 121,203,075.53 | - | 121,203,075.53 | |||
| Long-term receivables | 61,267,392.22 | 61,250,000.00 | 17,392.22 | |||
| Non-current liabilities due within one year | 1,317,545,829.95 | 1,315,026,574.43 | 2,519,255.52 | |||
| Lease liabilities | 116,082,690.05 | - | 116,082,690.05 | |||
| 4,294,573,520.67 | 4,057,369,629.53 | 237,203,891.14 |
The impact of the implementation of the new lease standard on the 2021 Financial Statementsis as follows:
Consolidated Balance Sheet
| Number of | Assuming that the | Affected |
| statements | original standard is implemented | amount | ||||
| Advance from customers | 875,167,709.48 | 878,159,599.98 | -2,991,890.50 | |||
| Other receivables | 1,355,924,282.96 | 1,364,246,050.50 | -8,321,767.54 | |||
| Right-of-use assets | 225,347,077.14 | - | 225,347,077.14 | |||
| Long-term receivables | 222,307,363.40 | 214,752,001.51 | 7,555,361.89 | |||
| Long-term prepaid expenses | 188,184,376.43 | 191,220,571.95 | -3,036,195.52 | |||
| Deferred income tax assets | 135,737,028.89 | 134,914,219.91 | 822,808.98 | |||
| Non-current liabilities due within one year | 3,664,241,923.08 | 3,653,879,444.25 | 10,362,478.83 | |||
| Lease liabilities | 205,942,673.93 | - | 205,942,673.93 | |||
| 6,872,852,435.31 | 6,437,171,888.10 | 435,680,547.21 |
Consolidated Income Statement
| Number of statements | Assuming that the original standard is implemented | Affected amount | ||||
| Operating cost | 4,027,543,138.56 | 4,033,717,402.64 | -6,174,264.08 | |||
| Sales expenses | 204,745,974.57 | 204,817,321.94 | -71,347.37 | |||
| Administrative expenses | 463,852,229.64 | 463,888,003.77 | -35,774.13 | |||
| Financial expenses | 179,911,613.70 | 167,047,055.27 | 12,864,558.43 | |||
| 4,876,052,956.47 | 4,869,469,783.62 | 6,583,172.85 |
Corporate balance sheet
| Number of statements | Assuming that the original standard is implemented | Affected amount | ||||
| Prepayments | 11,213,809.02 | 13,767,136.95 | -2,553,327.93 | |||
| Other receivables | 1,207,086,885.99 | 1,207,106,885.99 | -20,000.00 | |||
| Right-of-use assets | 118,591,035.63 | - | 118,591,035.63 | |||
| Long-term receivables | 41,668,837.64 | 41,650,000.00 | 18,837.64 | |||
| Deferred income tax assets | 122,565,730.38 | 121,772,869.30 | 792,861.08 | |||
| Non-current liabilities due within one year | 3,656,595,072.25 | 3,653,879,444.25 | 2,715,628.00 | |||
| Lease liabilities | 113,367,062.05 | - | 113,367,062.05 | |||
| 5,271,088,432.96 | 5,038,176,336.49 | 232,912,096.47 |
Company Income Statement
| Number of statements | Assuming that the original standard is implemented | Affected amount | ||||
| Operating cost | 1,062,881,897.31 | 1,068,758,634.31 | -5,876,737.00 | |||
| Financial expenses | 175,493,659.20 | 166,314,343.29 | 9,179,315.91 | |||
| 1,238,375,556.51 | 1,235,072,977.60 | 3,302,578.91 |
In addition, starting from the date of initial application, the Company will include the cashpaid for the repayment of the principal and interest of the lease liability in the cash flowstatement in the cash outflow of financing activities, and the short-term lease payments andlow-value assets lease payments made with simplified treatment and variable lease paymentsthat are not included in the measurement of the lease liability are still included in operatingcash outflows.
The main effects of retrospective adjustments caused by the above changes in accountingpolicies on the Financial Statements are as follows:
Changes in accounting policies of the Group
| December 31, 2020 | 1. Changes in accounting policies | January 1, 2021 |
| Prepayments | 105,187,528.26 | （6,332,444.37 | ） | 98,855,083.89 | ||||
| Other receivables | 2,708,478,136.25 | （7,735,349.90 | ） | 2,700,742,786.35 | ||||
| Right-of-use assets | - | 249,646,048.55 | 249,646,048.55 | |||||
| Long-term prepaid expenses | 110,728,723.36 | （5,375,149.00 | ） | 105,353,574.36 | ||||
| Long-term prepaid expenses | 126,756,573.81 | 6,302,088.07 | 133,058,661.88 | |||||
| Non-current liabilities due within one year | 1,315,026,574.43 | 6,930,542.47 | 1,321,957,116.90 | |||||
| Lease liabilities | - | 229,574,650.88 | 229,574,650.88 | |||||
The Company
| December 31, 2020 | 1. Changes in accounting policies | January 1, 2021 | |||||||
| Prepayments | 29,452,445.04 | （2,598,522.18） | 26,853,922.86 | ||||||
| Other receivables | 2,651,640,610.06 | （20,000.00） | 2,651,620,610.06 | ||||||
| Right-of-use assets | - | 121,203,075.53 | 121,203,075.53 | ||||||
| Long-term receivables | 61,250,000.00 | 17,392.22 | 61,267,392.22 | ||||||
| Non-current liabilities due within one year | 1,315,026,574.43 | 2,519,255.52 | 1,317,545,829.95 | ||||||
| Lease liabilities | - | 116,082,690.05 | 116,082,690.05 |
(2). Changes in important accounting estimates
□Applicable √Not Applicable
(3). The adjustment of the current opening financial statements for the first implementationof the New Standard for Lease from 2021
√Applicable □Not Applicable
Consolidated Balance Sheet
Unit: RMB
| Item | December 31, 2020 | January 1, 2021 | Adjustment |
| Current assets: | |||
| Monetary capital | 5,612,642,932.21 | 5,612,642,932.21 | |
| Held-for-trading financial assets | 51,712,734.31 | 51,712,734.31 | |
| Accounts receivable | 153,573,476.86 | 153,573,476.86 | |
| Prepayments | 105,187,528.26 | 98,855,083.89 | -6,332,444.37 |
| Other receivables | 2,708,478,136.25 | 2,700,742,786.35 | -7,735,349.90 |
| In which: interest receivable | 121,401,210.48 | 121,401,210.48 | |
| Inventory | 1,329,467,728.17 | 1,329,467,728.17 | |
| Other current assets | 179,724,694.17 | 179,724,694.17 | |
| Total current assets | 10,140,787,230.23 | 10,126,719,435.96 | -14,067,794.27 |
| Non-current assets: | |||
| Long-term receivables | 126,756,573.81 | 133,058,661.88 | 6,302,088.07 |
| Long-term equity investment | 3,832,897,502.71 | 3,832,897,502.71 | |
| Other equity instruments investment | 662,256,342.79 | 662,256,342.79 | |
| Other non-current financial assets | 1,523,925,249.81 | 1,523,925,249.81 | |
| Property investment | 1,960,426,291.73 | 1,960,426,291.73 | |
| Fixed assets | 5,234,293,786.87 | 5,234,293,786.87 | |
| Construction in progress | 982,891,877.14 | 982,891,877.14 | |
| Right-of-use assets | - | 249,646,048.55 | 249,646,048.55 |
| Intangible assets | 3,900,780,981.92 | 3,900,780,981.92 | |
| Development expenses | 22,223,061.09 | 22,223,061.09 | |
| Long-term prepaid expenses | 110,728,723.36 | 105,353,574.36 | -5,375,149.00 |
| Deferred income tax assets | 99,664,328.84 | 99,664,328.84 | |
| Other non-current assets | 152,495,196.56 | 152,495,196.56 | |
| Total non-current assets | 18,609,339,916.63 | 18,859,912,904.25 | 250,572,987.62 |
| Total assets | 28,750,127,146.86 | 28,986,632,340.21 | 236,505,193.35 |
| Current liabilities: | |||
| Short-term borrowings | 1,257,179,389.40 | 1,257,179,389.40 | |
| Accounts payable | 636,463,802.23 | 636,463,802.23 | |
| Advances from customers | 112,752,897.25 | 112,752,897.25 | |
| Contract liabilities | 2,442,211,788.88 | 2,442,211,788.88 | |
| Payroll payable | 161,498,997.53 | 161,498,997.53 | |
| Tax payable | 495,400,499.73 | 495,400,499.73 | |
| Other payables | 1,646,345,561.62 | 1,646,345,561.62 | |
| Non-current liabilities due within one year | 1,315,026,574.43 | 1,321,957,116.90 | 6,930,542.47 |
| Other current liabilities | 3,023,608,041.68 | 3,023,608,041.68 | |
| Total current liabilities | 11,090,487,552.75 | 11,097,418,095.22 | 6,930,542.47 |
| Non-current liabilities: | |||
| Long-term borrowings | 282,000,000.00 | 282,000,000.00 | |
| Bonds payable | 3,552,161,709.68 | 3,552,161,709.68 | |
| Lease liabilities | - | 229,574,650.88 | 229,574,650.88 |
| Estimated liabilities | 110,620,306.10 | 110,620,306.10 | |
| Deferred income | 26,545,277.30 | 26,545,277.30 | |
| Deferred income tax liabilities | 113,602,923.79 | 113,602,923.79 | |
| Total non-current liabilities | 4,084,930,216.87 | 4,314,504,867.75 | 229,574,650.88 |
| Total liabilities | 15,175,417,769.62 | 15,411,922,962.97 | 236,505,193.35 |
| Owners’ equity (or shareholders’ equity) | |||
| Paid-in capital (share capital) | 5,489,914,176.00 | 5,489,914,176.00 | |
| Capital reserve | 1,594,906,524.67 | 1,594,906,524.67 | |
| Less: treasury stocks | 137,298,000.00 | 137,298,000.00 | |
| Other comprehensive income | 78,149,661.33 | 78,149,661.33 | |
| Surplus reserve | 1,364,257,808.58 | 1,364,257,808.58 | |
| Undistributed profits | 5,168,298,206.50 | 5,168,298,206.50 | |
| Total equity attributable to owners (shareholders) of the parent company | 13,558,228,377.08 | 13,558,228,377.08 | |
| Minority interest | 16,481,000.16 | 16,481,000.16 | |
| Total owners’ equity (or shareholders’ equity) | 13,574,709,377.24 | 13,574,709,377.24 | |
| Total liabilities and owners’ equity (or shareholders’ equity) | 28,750,127,146.86 | 28,986,632,340.21 | 236,505,193.35 |
Statements on item adjustment:
√Applicable □Not Applicable
In 2018, the Ministry of Finance revised and issued the “Accounting Standards for BusinessEnterprises No. 21-Leases” (Cai Kuai [2018] No. 35) (hereinafter collectively referred to as the“New Standard for Lease”). The Company will disclose the accounting statements according to therequirements of the New Standard for Lease. In accordance with the standard transmit regulations,the Company retrospectively adjusted the figures for the beginning of 2021. The right to use assetsand lease liabilities shall be confirmed in accordance with the lease contract, and the leasesoriginally included in the prepayments shall be transferred to the right to use assets. Thequantitative impact of the above changes on specific financial statement items is: on January 1,
2021,in the consolidated balance sheet, prepayments were reduced by RMB 6,332,444.37, otherreceivables were reduced by RMB 7,735,349.90, long-term prepaid expenses were reduced byRMB 5,375,149.00, and long-term prepaid receivables, right-of-use assets, non-current liabilitiesdue wthin one year and lease liabililities were inreased by RMB 6,302,088.07, RMB 249,646,048.55,RMB 6,930,542.47 and RMB 229,574,650.88, respectively.
Balance Sheet of Parent Company
Unit: RMB
| Item | December 31, 2020 | January 1, 2021 | Adjustment |
| Current assets: | |||
| Monetary capital | 5,435,867,497.50 | 5,435,867,497.50 | |
| Held-for-trading financial assets | 6,632.72 | 6,632.72 | |
| Accounts receivable | 14,671,577.47 | 14,671,577.47 | |
| Prepayments | 29,452,445.04 | 26,853,922.86 | -2,598,522.18 |
| Other receivables | 2,651,640,610.06 | 2,651,620,610.06 | -20,000.00 |
| In which: interest receivable | 121,401,210.48 | 121,401,210.48 | |
| Inventory | 10,144,965.06 | 10,144,965.06 | |
| Other current assets | 3,082,340,716.76 | 3,082,340,716.76 | |
| Total current assets | 11,224,124,444.61 | 11,221,505,922.43 | -2,618,522.18 |
| Non-current assets: | |||
| Long-term receivables | 61,250,000.00 | 61,267,392.22 | 17,392.22 |
| Long-term equity investment | 6,083,135,428.02 | 6,083,135,428.02 | |
| Other equity instruments investment | 662,256,342.79 | 662,256,342.79 | |
| Other non-current financial assets | 266,722,811.41 | 266,722,811.41 | |
| Property investment | 1,501,734,504.79 | 1,501,734,504.79 | |
| Fixed assets | 4,444,239,239.28 | 4,444,239,239.28 | |
| Construction in progress | 856,248,099.10 | 856,248,099.10 | |
| Right-of-use assets | 121,203,075.53 | 121,203,075.53 | |
| Intangible assets | 3,777,092,772.41 | 3,777,092,772.41 | |
| Long-term prepaid expenses | 58,705,952.97 | 58,705,952.97 | |
| Deferred income tax assets | 85,739,381.21 | 85,739,381.21 | |
| Total non-current assets | 17,797,124,531.98 | 17,918,344,999.73 | 121,220,467.75 |
| Total assets | 29,021,248,976.59 | 29,139,850,922.16 | 118,601,945.57 |
| Current liabilities: | |||
| Short-term borrowings | 1,257,179,389.40 | 1,257,179,389.40 | |
| Accounts payable | 444,254,309.61 | 444,254,309.61 | |
| Advances from customers | 97,380,931.49 | 97,380,931.49 | |
| Contract liabilities | 2,283,994,068.70 | 2,283,994,068.70 | |
| Payroll payable | 131,469,702.81 | 131,469,702.81 | |
| Tax payable | 546,100,633.28 | 546,100,633.28 | |
| Other payables | 1,333,312,494.36 | 1,333,312,494.36 | |
| Non-current liabilities due within one year | 1,315,026,574.43 | 1,317,545,829.95 | 2,519,255.52 |
| Other current liabilities | 3,556,664,822.79 | 3,556,664,822.79 | |
| Total current liabilities | 10,965,382,926.87 | 10,967,902,182.39 | 2,519,255.52 |
| Non-current liabilities: | |||
| Long-term borrowings | 282,000,000.00 | 282,000,000.00 | |
| Bonds payable | 3,552,161,709.68 | 3,552,161,709.68 | |
| Lease liabilities | - | 116,082,690.05 | 116,082,690.05 |
| Estimated liabilities | 110,620,306.10 | 110,620,306.10 | |
| Deferred income | 26,545,277.30 | 26,545,277.30 | |
| Deferred income tax liabilities | 69,623,249.14 | 69,623,249.14 | |
| Total non-current liabilities | 4,040,950,542.22 | 4,157,033,232.27 | 116,082,690.05 |
| Total liabilities | 15,006,333,469.09 | 15,124,935,414.66 | 118,601,945.57 |
| Owners’ equity (or shareholders’ equity) | |||
| Paid-in capital (share capital) | 5,489,914,176.00 | 5,489,914,176.00 | |
| Capital reserve | 1,833,256,515.22 | 1,833,256,515.22 | |
| Less: treasury stocks | 137,298,000.00 | 137,298,000.00 | |
| Other comprehensive income | 81,473,183.84 | 81,473,183.84 | |
| Surplus reserve | 1,364,204,332.75 | 1,364,204,332.75 | |
| Undistributed profits | 5,383,365,299.69 | 5,383,365,299.69 | |
| Total owners’ equity (or shareholders’ equity) | 14,014,915,507.50 | 14,014,915,507.50 | |
| Total liabilities and owners’ equity (or shareholders’ equity) | 29,021,248,976.59 | 29,139,850,922.16 | 118,601,945.57 |
Statements on item adjustment:
√Applicable □Not Applicable
In 2018, the Ministry of Finance revised and issued the “Accounting Standards for BusinessEnterprises No. 21-Leases” (Cai Kuai [2018] No. 35) (hereinafter collectively referred to as the“New Standard for Lease”). The Company will disclose the accounting statements according to therequirements of the New Standard for Lease from Jan 1st, 2021. In accordance with the standardtransmit regulations, the Company retrospectively adjusted the figures for the beginning of 2021.The right to use assets and lease liabilities shall be confirmed in accordance with the lease contract,and the leases originally included in the prepayments shall be transferred to the right to use assets.The quantitative impact of the above changes on specific financial statement items is: On January 1,2021, in the parent company's balance sheet, prepayments were reduced by RMB 2,598,522.18,other receivables were reduced by RMB 20,000.00, and long-term receivables, right-of-use assets,non-current liabilities due wthin one year and lease liabililities were increased by by RMB 17,392.22,RMB 121,203,075.53, RMB 2,519,255.52 and RMB 116,082,690.05, respectively.
(4). Explanation of the retrospective adjustment of the previous comparative data for the
first implementation of the New Standard for Lease from 2021.
□Applicable √Not Applicable
45. Others
□Applicable √Not Applicable
VI. Taxes
1. Major taxes and tax rates
Major taxes and tax rates
√Applicable □Not Applicable
| Tax | Base of taxation | Tax rate |
| VAT | Sale of goods or rendering of taxable service | The Company is a general taxpayer. The taxable income is calculated at 13%, 9% and 6% tax rates as output tax, and the value-added tax is calculated and paid on the basis of the difference after deduction of the input tax allowed to be deducted in the current period. In addition, for the sale of the self-developed old real estate projects (the contract start date indicated in the “Construction Project Construction Permit” is before April 30, 2016) and the lease of the real estate acquired before April 30, 2016, the simplified tax calculation method shall apply at the rate of 5%. |
| Urban maintenance and construction tax | Indirect tax actually paid | 5% or 7% |
| Corporate income tax | Domestic enterprises should pay 25% of the taxable income of corporate income tax; Yiwu China Commodities City (Hong Kong) |
| International Trade Co., Ltd. was registered in Hong Kong Special Administrative Region, so it is subject to the Hong Kong income tax rate, 16.50%; BETTER SILK ROAD FZE was registered in Dubai and no corporate income tax is levied. | ||
| Land appreciation tax | Ratio of appreciation value to deductible items | Four-bracket progressive tax rate (30%～60%) |
| Real estate tax | If the tax is levied according to price, the amount is 1.2% of the balance of the original value of the property after a 30% deduction; if the tax is levied according to rental, the amount is 12% of the rental income. | 1.2% or 12% |
| Education surcharge | Indirect tax actually paid | 3% |
| Local education surcharge | Indirect tax actually paid | 2% |
| Cultural undertaking development fee | Advertising turnover | 3% |
Disclosure of taxpayers subject to different income tax rates
√Applicable □Not Applicable
| Taxpayer | Income tax rate (%) |
| Yiwu China Commodities City (Hong Kong) International Trade Co., Ltd. | 16.50 |
| BETTER SILK ROAD FZE | 0 |
2. Tax preference
√Applicable □Not Applicable
According to the notice “Measures of Yiwu for Implementation of Adjustment of Urban LandUse Tax Policies to Promote the Intensive and Economical Utilization of Land” (Y D S H [2017] No.
56), the Company enjoys tax incentive of exemption from 90% of land use tax according to thestatistical caliber of taxation on acres .
3. Others
□Applicable √Not Applicable
VII. Notes to items in consolidated financial statements
1. Monetary capital
√Applicable □Not Applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Cash on hand | 154,264.94 | 292,999.29 |
| Bank deposits | 4,831,258,722.95 | 4,812,189,759.31 |
| Other cash and cash equivalents | 55,398.36 | 800,160,173.61 |
| Total | 4,831,468,386.25 | 5,612,642,932.21 |
| In which: amount deposited abroad | 38,554,320.18 | 25,679,209.72 |
Other statements
For the cash and cash equivalents which are restricted in use, please refer to Notes VII.81Assets with Restricted Title or Right of Use.
Interest income of demand deposits is accrued based on the demand deposit rates of banks.The term of short-term time deposits ranges from three months to half a year and depends on theGroup’s cash demand, and the interest income thereof is accrued based on the corresponding timedeposit rates of banks.
2. Held-for-trading financial assets
√Applicable □Not Applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Financial assets that are measured by fair value and of which the changes in fair value are recognized in the profit or loss for the current period | 75,375,083.20 | 51,712,734.31 |
| Among which: | ||
| Bank financing products | 25,000,000.00 | - |
| Equity instrument investment | 50,375,083.20 | 51,712,734.31 |
| Total | 75,375,083.20 | 51,712,734.31 |
Other notes:
□Applicable √Not Applicable
3. Derivative financial assets
□Applicable √Not Applicable
4. Notes receivable
(1). Categorized presentation of notes receivable
□Applicable √Not Applicable
(2). Notes receivable having been pledged by the Company as of the close of the reporting
period
□Applicable √Not Applicable
(3). Notes receivable having been endorsed or discounted by the Company as of the closeof the reporting period and having not been due as of the balance sheet date
□Applicable √Not Applicable
(4). Notes turned into accounts receivable due to the drawers’ non-performance at theclose of the reporting period
□Applicable √Not Applicable
(5). Categorized disclosure based on the bad debt provision method
□Applicable √Not Applicable
Accounts receivable for which bad debt provision is made individually:
□Applicable √Not Applicable
Explanation for making bad debt provision for accounts receivable by Group:
□Applicable √Not Applicable
If the bad debt provision is made according to the general model of expected credit loss, pleaserefer to the disclosure of other receivables:
□Applicable √Not Applicable
(6). Provisions for bad debts
□Applicable √Not Applicable
(7). Notes receivable actually written off during the current period
□Applicable √Not Applicable
Other statements
□Applicable √Not Applicable
5. Accounts receivable
(1). Disclosure based on account age
√Applicable □Not Applicable
Unit: RMB
| Account age | Closing book balance |
| Within 1 year | 191,258,380.84 |
| 1 to 2 years | 100,234.00 |
| 2 to 3 years | 352,588.44 |
| Total | 191,711,203.28 |
(2). Categorized disclosure based on the bad debt provision method
√Applicable □Not Applicable
Unit: RMB
| Category | Closing balance | Opening balance | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Proportion (%) | Amount | Provision ratio (%) | Amount | Proportion (%) | Amount | Provision ratio (%) | |||
| Accounts receivable for which bad debt provision is made individually | 97,219,393.59 | 50.71 | 6,261,907.10 | 0.22 | 90,957,486.49 | 90,795,847.76 | 59.07 | - | - | 90,795,847.76 |
| Accounts receivable for which bad debt provision is made by Group | 94,491,809.69 | 49.29 | 211,765.29 | 6.44 | 94,280,044.40 | 62,907,905.93 | 40.93 | 130,276.83 | 0.21 | 62,777,629.10 |
| Total | 191,711,203.28 | / | 6,473,672.39 | / | 185,237,530.89 | 153,703,753.69 | / | 130,276.83 | / | 153,573,476.86 |
Accounts receivable for which bad debt provision is made individually:
√Applicable □Not Applicable
Unit: RMB
| Name | Closing balance | |||
| Book balance | Bad debt provision | Provision ratio (%) | Reason for provision | |
| Trade receivables | 90,957,486.49 | - | - | |
| Lease receivables | 6,261,907.10 | 6,261,907.10 | 100.00 | Due to deterioration of operating conditions, expected not to be recovered |
| Total | 97,219,393.59 | 6,261,907.10 | 0.22 | / |
Explanation for making bad debt provision for accounts receivable individually:
□Applicable √Not Applicable
Explanation for making bad debt provision for accounts receivable by Group:
□Applicable √Not Applicable
If the bad debt provision is made according to the general model of expected credit loss, pleaserefer to the disclosure of other receivables:
√Applicable □Not Applicable
| Account age | End of June 2021 | ||
| Estimated book balance in default | Expected credit loss rate (%) | Expected credit loss for the duration | |
| Within 1 year | 94,038,987.25 | 0.01 | 152,655.56 |
| 1 - 2 years | 100,234.00 | 5.66 | 5,674.25 |
| 2 -3 years | 352,588.44 | 15.16 | 53,435.48 |
| Total | 94,491,809.69 | 211,765.29 |
(3). Provisions for bad debts
√Applicable □Not Applicable
Unit: RMB
| Category | Opening balance | Amount of change during the current period | Closing balance | |
| Provision | Recovery or reversal | |||
| Bad debt provision for accounts receivable | 130,276.83 | 6,990,264.17 | 646,868.61 | 6,473,672.39 |
| Total | 130,276.83 | 6,990,264.17 | 646,868.61 | 6,473,672.39 |
In which the recovered or reversed amount is important:
□Applicable √Not Applicable
(4). Accounts receivable actually written off during the current period
□Applicable √Not Applicable
(5). Accounts receivable from the five debtors with the highest closing balance
√Applicable □Not Applicable
Unit: RMB
| Debtor | Closing balance | Proportion in the total closing balance of accounts receivable (%) | Closing balance of bad debt provision |
| Total balance of the accounts receivable with the top five entities | 8,508,287.04 | 4.44 | 82,077.26 |
| Total | 8,508,287.04 | 4.44 | 82,077.26 |
Other statements
The Group is mainly engaged in market operation, hotel services and commodity sales, andthe balance of receivables is mainly based on the market operation of commercial rate receivables,hotel consumption, trade receivables and advertising publishing fees.
(6). Accounts receivable derecognized due to transfer of financial assets
□Applicable √Not Applicable
(7). Amounts of assets and liabilities formed by the transfer of accounts receivable and
continuing involvement
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
6. Accounts receivable financing
□Applicable √Not Applicable
7. Prepayments
(1). Presentation of prepayment by account age
√Applicable □Not Applicable
Unit: RMB
| Account age | Closing balance | Opening balance | ||
| Amount | Proportion (%) | Amount | Proportion (%) | |
| Within 1 year | 868,252,359.56 | 99.21 | 102,657,415.19 | 97.59 |
| 1 to 2 years | 6,212,572.92 | 0.71 | 2,329,113.07 | 2.22 |
| 2 to 3 years | 602,777.00 | 0.07 | - | - |
| Over 3 years | 100,000.00 | 0.01 | 201,000.00 | 0.19 |
| Total | 875,167,709.48 | 100 | 105,187,528.26 | 100 |
Explanation for failure to settle the prepayments with an account age longer than one year and inimportant amounts:
None
(2). Prepayments to the five suppliers with the highest closing balance
√Applicable □Not Applicable
| Debtor | Closing balance | Proportion in total closing balance of prepayments (%) |
| PACIFIC SEAFOOD TRADER SA | 84,334,516.52 | 9.64 |
| Sociedad Nacional de Galapagos C.A. SONGA | 40,474,343.32 | 4.62 |
| Yiwu Zuqing Commodity Co., Ltd. | 42,928,301.09 | 4.91 |
| PROCESADORA DE MARISCOS DE EL ORO PROMARO S.A. | 36,062,941.54 | 4.12 |
| FALCON MARINE EXPORTS LTD., | 24,255,029.78 | 2.77 |
| Total | 228,055,132.25 | 26.06 |
Other statementsNone
Other statements
□Applicable √Not Applicable
8. Other receivables
Presentation of items
√Applicable □Not Applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Interest receivable | 92,249,275.44 | 121,401,210.48 |
| Other receivables | 1,263,675,007.52 | 2,579,341,575.87 |
| Total | 1,355,924,282.96 | 2,700,742,786.35 |
Other notes:
□Applicable √Not Applicable
Interest receivable
(1). Classification of interest receivable
√Applicable □Not Applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Cash occupation fee for receivables | 92,249,275.44 | 121,401,210.48 |
| Total | 92,249,275.44 | 121,401,210.48 |
(2). Significant overdue interest
□Applicable √Not Applicable
(3). Bad debt provision
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
Dividend receivable
(1). Dividend receivable
□Applicable √Not Applicable
(2). Important dividend receivable with an account age longer than 1 year
□Applicable √Not Applicable
(3). Bad debt provision
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
Other receivables
(1). Disclosure based on account age
√Applicable □Not Applicable
Unit: RMB
| Account age | Closing book balance |
| Within 1 year | 133,457,994.19 |
| 1 to 2 years | 1,113,635,528.49 |
| 2 to 3 years | 732,296.38 |
| Over 3 years | 20,204,272.92 |
| Bad debt provision for other receivables | -4,355,084.46 |
| Total | 1,263,675,007.52 |
(2). Classification based on the nature of accounts
√Applicable □Not Applicable
Unit: RMB
| Nature of receivable | Closing book balance | Opening book balance |
| Financial grants receivables from joint ventures and associated enterprises | 1,103,178,748.00 | 2,480,172,779.00 |
| Withholdings, deposit and margin | 125,377,518.60 | 59,045,233.81 |
| Receivables from export tax rebate | 34,759,474.84 | 4,841,801.31 |
| Reserve | 359,266.08 | 523,397.65 |
| Receivables from self-operated land | - | 42,493,714.00 |
| Total | 1,263,675,007.52 | 2,587,076,925.77 |
(3). Bad debt provision
√Applicable □Not Applicable
Unit: RMB
| Bad debt provision | Phase I | Phase 2 | Phase 3 | Total |
| Expected credit loss in the coming 12 months | Expected credit loss in the entire duration (credit has not been impaired) | Expected credit loss in the entire duration (credit has been impaired) | ||
| Balance as of January 1, 2021 | 3,768,512.43 | 3,768,512.43 | ||
| Balance as of January 1, 2021 in the current period | ||||
| Provision made in the current period | 1,309,763.41 | 1,309,763.40 | ||
| Current reversal | 353,464.30 | 353,464.30 | ||
| Current write-off | 369,727.08 | 369,727.07 | ||
| Balance as at 31 December 2021 | 4,355,084.46 | 4,355,084.46 |
Significant changes in the book balance of other receivables with changes in loss provisions:
□Applicable √Not Applicable
Basis for the bad debt provision made in the current period and for assessing whether the credit riskof financial instruments has increased significantly:
□Applicable √Not Applicable
(4). Provisions for bad debts
√Applicable □Not Applicable
Unit: RMB
| Category | Opening balance | Amount of change during the current period | Closing balance | ||
| Provision | Recovery or reversal | Charge-off or write-off | |||
| Bad debt provision for other receivables | 3,768,512.43 | 1,309,763.41 | 353,464.30 | 369,727.08 | 4,355,084.46 |
| Total | 3,768,512.43 | 1,309,763.41 | 353,464.30 | 369,727.08 | 4,355,084.46 |
In which the recovered or reversed amount is important:
□Applicable √Not Applicable
(5). Other receivables actually written off during the current period
□Applicable √Not Applicable
(6). Other receivables from the five debtors with highest closing balance
√Applicable □Not Applicable
Unit: RMB
| Debtor | Nature of receivable | Closing balance | Account age | Weight in the total closing balance of other receivables (%) | Bad debt provision Closing balance |
| Yiwu Tonghui Shangbo Real Estate Co., Ltd. | Financial assistance | 880,728,548.00 | 1-2 years | 69.46 | - |
| Yiwu Handing Shangbo Real Estate Co., Ltd. | Financial assistance | 222,450,200.00 | 1-2 years | 17.54 | - |
| Yisha Chengdu International Trade City Co., Ltd. | Temporary loan | 40,000,000.00 | Within 1 year | 3.15 | - |
| Yiwu Taxation Bureau, State Administration of Taxation | Export tax rebate | 34,759,474.84 | Within 1 year | 2.74 | - |
| Logistis Quelfor s.r.o. | Guarantee deposit | 4,985,493.99 | 1-2 years | 0.39 | |
| Total | / | 1,182,923,716.83 | / | 93.28 | - |
(7). Receivables involving government grants
√Applicable □Not Applicable
Unit: RMB
| Debtor | Government subsidy project name | Closing balance | Closing Aging | Estimated time, amount and basis for collection |
| Yiwu Taxation Bureau, State Administration of Taxation | Export tax rebate | 34,759,474.84 | Within one year | April 2022, 34,759,474.84, "Interim Regulations of the People's Republic of China on Value Added Tax" . |
Other statementsNone
(8). Other receivables derecognized due to transfer of financial assets
□Applicable √Not Applicable
(9). Amounts of assets and liabilities formed by the transfer of accounts receivable andcontinuing involvement
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
9. Inventory
(1). Classification of inventory
√Applicable □Not Applicable
Unit: RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Provision for inventory depreciation/provision for impairment of contract performance cost | Book value | Book balance | Provision for inventory depreciation/provision for impairment of contract performance cost | Book value | |
| Raw materials | 723,775.34 | - | 723,775.34 | 402,020.27 | - | 402,020.27 |
| Finished goods | 75,079,555.38 | - | 75,079,555.38 | 75,506,826.35 | - | 75,506,826.35 |
| Development cost | 347,123,927.41 | 28,303,338.06 | 318,820,589.35 | 341,654,440.82 | 28,303,338.06 | 313,351,102.76 |
| Development products | 928,561,037.31 | - | 928,561,037.31 | 932,153,659.76 | - | 932,153,659.76 |
| Work-in-progress materials | 4,217,610.61 | - | 4,217,610.61 | 8,054,119.03 | - | 8,054,119.03 |
| Total | 1,355,705,906.05 | 28,303,338.06 | 1,327,402,567.99 | 1,357,771,066.23 | 28,303,338.06 | 1,329,467,728.17 |
(2). Provision for inventory depreciation/provision for impairment of contract performancecost
√Applicable □Not Applicable
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance | ||
| Provision | Others | Charge-off or write-off | Others | |||
| Development cost | 28,303,338.06 | - | - | - | - | 28,303,338.06 |
| Total | 28,303,338.06 | - | - | - | - | 28,303,338.06 |
(3). Closing balance of inventory containing capitalized borrowing costs
√Applicable □Not Applicable
On December 31, 2021, the inventory with a book value of RMB 35,797,443.87 (December 31,2020: RMB 35,797,443.87) was formed by capitalization of borrowing costs.
(4). Amortization of contract performance cost during the current period
□Applicable √Not Applicable
Other statements
√Applicable □Not Applicable
Inventory-Development Cost Unit: RMB-yuan Currency: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| Haicheng Phase I Business Street | 67,907,950.27 | - | - | 67,907,950.27 |
| Haicheng Phase II Business Street | 273,746,490.55 | 5,469,486.59 | - | 279,215,977.14 |
| Total | 341,654,440.82 | 5,469,486.59 | - | 347,123,927.41 |
Inventory-Developed Products Unit: RMB-yuan Currency: RMB
| Item | Opening balance | Increase in the current period | Delivered during current reporting period | Other transfer-out | Closing balance |
| Haicheng Phase I Business Street | 918,976,130.79 | - | - | 3,360,000.00 | 915,616,130.79 |
| Qiantang Yinxiang | 238,807.22 | - | 238,807.22 | - | - |
| Shuangchuang Building | 12,938,721.75 | 6,184.77 | - | - | 12,944,906.52 |
| Total | 932,153,659.76 | 6,184.77 | 238,807.22 | 3,360,000.00 | 928,561,037.31 |
10. Contract assets
(1). Overview of contract assets
□Applicable √Not Applicable
(2). Amount of and reasons for material changes to book value during the reporting period
□Applicable √Not Applicable
(3). Provision for impairment of contract assets in the current period
□Applicable √Not Applicable
If the bad debt provision is made according to the general model of expected credit loss, pleaserefer to the disclosure of other receivables:
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
11. Held-for-sale assets
□Applicable √Not Applicable
12. Non-current assets due within one year
□Applicable √Not Applicable
Important debt investments and other debt investments at the end of the period:
□Applicable √Not Applicable
Other statementsNone
13. Other current assets
√Applicable □Not Applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| To-be-deducted input tax | 234,080,141.55 | 162,435,010.24 |
| Prepaid land transfer fees | 7,629,349.00 | - |
| To-be-certified input tax | 4,357,934.03 | 14,195,996.43 |
| Entrusted loans to the market traders | 2,780,294.82 | 3,279,187.50 |
| Less: bad debt provision for entrusted loans | -185,500.00 | -185,500.00 |
| Total | 248,662,219.40 | 179,724,694.17 |
Other statementsNone
14. Debt investments
(1). Overview of debt investment
□Applicable √Not Applicable
(2). Important debt investment as of the close of the reporting period
□Applicable √Not Applicable
(3). Provision for impairment
□Applicable √Not Applicable
Amount of impairment provision for the current period and the basis for assessing whether there issignificant increase in the credit risk of financial instruments
□Applicable √Not Applicable
Other statements
□Applicable √Not Applicable
15. Other debt investments
(1). Overview of other debt investment
□Applicable √Not Applicable
(2). Important other debt investment as of the close of the reporting period
□Applicable √Not Applicable
(3). Provision for impairment
□Applicable √Not Applicable
Amount of impairment provision for the current period and the basis for assessing whether there issignificant increase in the credit risk of financial instruments
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
16. Long-term receivables
(1). Overview of long-term receivables
√Applicable □Not Applicable
Unit: RMB
| Item | Closing balance | Opening balance | Range of discount rate | ||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | ||
| Guarantee deposit | 7,555,361.89 | 7,555,361.89 | 6,302,088.07 | 6,302,088.07 | |||
| Financial assistance receivable from joint ventures | 214,752,001.51 | 214,752,001.51 | 126,756,573.81 | - | 126,756,573.81 | ||
| Total | 222,307,363.40 | 222,307,363.40 | 133,058,661.88 | - | 133,058,661.88 | / | |
(2). Bad debt provision
□Applicable √Not Applicable
Amount of bad debt provision for the current period and the basis for assessing whether there issignificant increase in the credit risk of financial instruments
□Applicable √Not Applicable
(3). Long-term receivables derecognized due to transfer of financial assets
□Applicable √Not Applicable
(4). Amounts of assets and liabilities formed by the transfer of long-term receivables andcontinuing involvement
□Applicable √Not Applicable
Other statements
□Applicable √Not Applicable
17. Long-term equity investment
√Applicable □Not Applicable
Unit: RMB
| Investee | Opening amount Balance | Change in the current period | Closing amount Balance | Closing balance of impairment | ||||
| Additional investment | Decrease in investment | Investment gains or losses recognized with the equity method | Change in other benefits | Declared a cash dividend or profit | ||||
| provision | ||||||||
| 1. Joint ventures | ||||||||
| Yiwu Shanglv | 365,830,756.91 | 17,837,597.30 | 383,668,354.21 | |||||
| Yiwu Rongshang Property Co., Ltd. | 22,319,075.64 | 195,068,462.30 | 217,387,537.94 | |||||
| Yiwu Chuangcheng Property Co., Ltd. | 11,444,786.74 | 76,618,539.06 | 88,063,325.80 | |||||
| Others | 15,284,720.18 | 17,850,000.00 | 23,678,584.58 | 56,813,304.76 | 3,327,216.16 | |||
| Sub-total | 414,879,339.47 | 17,850,000.00 | 313,203,183.24 | 745,932,522.71 | 3,327,216.16 | |||
| 2. Associates | ||||||||
| Binjiang Shangbo | 154,152,267.42 | 17,523,961.66 | 137,200,000.00 | 34,476,229.08 | ||||
| Huishang Micro-finance | 71,396,566.07 | 11,428,130.57 | 82,824,696.64 | |||||
| Yiwu Huishang Redbud Equity Investment Co., Ltd. | 78,072,569.23 | 17,223,611.38 | 16,057,218.98 | 5,909,184.62 | 70,996,992.21 | |||
| Chouzhou Financial Lease | 371,320,662.02 | 54,700,187.22 | 426,020,849.24 | |||||
| Yiwu China Commodities City Investment Management Co., Ltd. | - | - | 9,508,049.22 | |||||
| Yiwu China Commodities City Fuxing Investment Center (limited partnership) | 102,918,559.00 | 102,918,559.00 | ||||||
| Pujiang Lvgu Property Co., Ltd. | 379,672,466.65 | 79,608,970.60 | 459,281,437.25 | |||||
| CCCP | 1,471,572,953.91 | 1,225,000,000.00 | 60,365,490.42 | 2,756,938,444.33 | ||||
| Yiwu Hongyi Equity Investment Fund Partnership (limited partnership) | 689,756,805.12 | 150,000,000.00 | 48,115,457.34 | 887,872,262.46 | ||||
| Others | 99,155,313.82 | 103,366,783.24 | -1,822,274.45 | 4,493,427.31 | 205,193,249.92 | |||
| Sub-total | 3,418,018,163.24 | 1,478,366,783.24 | 17,223,611.38 | 285,977,142.34 | 4,493,427.31 | 143,109,184.62 | 5,026,522,720.13 | 9,508,049.22 |
| Total | 3,832,897,502.71 | 1,496,216,783.24 | 17,223,611.38 | 599,180,325.58 | 4,493,427.31 | 143,109,184.62 | 5,772,455,242.84 | 12,835,265.38 |
Other statements
Provision for impairment of long-term equity investment：
Unit: RMB
| Investee | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| Yiwu China Commodities City Investment Management Co., Ltd. (Note 1) | 9,508,049.22 | - | - | 9,508,049.22 |
| Others | 3,327,216.16 | - | - | 3,327,216.16 |
| Total | 12,835,265.38 | - | - | 12,835,265.38 |
Note 1: In 2017, Yiwu China Commodities City Financial Holdings Co., Ltd. (hereinafterreferred to as "CCCF"), a wholly-owned subsidiary of the Group, and Shanghai Fuxing IndustrialGroup Co., Ltd. (hereinafter referred to as "Fuxing") jointly established Industrial Fund Yiwu ChinaCommodities City Fuxing Investment Center (LLP) (hereinafter referred to as the "Funds of Funds"),the Fund of Funds has invested in 12 sub-funds including Yiwu Shangfu Chuangzhi InvestmentCenter (LLP) (hereinafter referred to as "Shangfu Chuangzhi Fund"). CCCF, as a limited partner,subscribed RMB 998 million in the FOF, accounting for 49.9% of the subscribed capital. The paid-incapital was RMB 102.92 million, and there is no deadline for the payment for the unpaid capitalcontribution. The other limited partner of the FOF is Fuxing. CCCF also contributed RMB 9.8 million,49% of total shares, to jointly establish Yiwu China Commodity City Investment Management Co.,Ltd. (hereinafter referred to as “CCCIM”) with Fuxing as the general partner of the above-mentionedFOF and sub-funds. The FoF and CCCIM are both under the control of Fuxing and are associatesof CCCF. The above paid-in capital contribution made by CCCF to the FoF has been contributed to
Shangfu Chuangzhi Fund together with the capital contribution of Fuxing to the FoF through theFoF as a limited partner. With the capital contribution from the FoF as a limited partner and CCCF’scapital contribution to Shangfu Chuangzhi Fund as a limited partner, Shangfu Chuangzhi Fundmade capital contribution of RMB820.54million to subscribe for the increase in the registered capitalof Hubei Provincial Asset Management Co., Ltd. to acquire 22.667% equity therein.In 2018, CCCF learned during its after-investment follow-up management that Fuxing and itsactual controller ZHU Yidong were suspected of having committed a criminal offense and the
22.667% equity held by Shangfu Chuangzhi Fund in Hubei Provincial Asset Management Co., Ltd.was frozen by the Public Security Bureau of Shanghai due to Fuxing’s contribution to the sources ofthe capital contribution. The Group believes that, on December 31, 2021, the Group’s investment inthe Fund of Funds and Shangfu Chuangzhi Fund was non-related to Fuxing’s investment, and therewas no indication of impairment of the underlying assets. Although they were still frozen, but withoutaffecting the Group’s equity. Therefore, there was no impairment. However, for the equityinvestment managed for the Yiwu CCC, a full impairment provision has been made since 2018. SeeNotes VII.81 and Notes XIV. 1 for details.
18. Other equity instruments investment
(1). Overview of other equity instruments investment
√Applicable □Not Applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Shenwan Hongyuan Group Co., Ltd. | 642,187,968.77 | 662,256,342.79 |
| Total | 642,187,968.77 | 662,256,342.79 |
(2). Non-trading equity instruments investment
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
19. Other non-current financial assets
√Applicable □Not Applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Unlisted equity investment | 213,607,388.98 | 134,582,725.75 |
| PE investment | 1,263,329,797.13 | 1,341,220,243.72 |
| NEEQ equity investment | 47,882,069.30 | 48,122,280.34 |
| Total | 1,524,819,255.41 | 1,523,925,249.81 |
Other notes:
□Applicable √Not Applicable
20. Property investment
Measurement models
(1). Property investment measured by cost
Unit: RMB
| Item | Buildings and structures | Land use right | Total |
| I. Original book value | |||
| 1. Opening balance | 1,952,906,526.61 | 428,095,086.44 | 2,381,001,613.05 |
| 2. Increase in the current period | 1,109,483,031.70 | 10,665,898.19 | 1,120,148,929.89 |
| (1) Outsourcing | - | 10,665,898.19 | 10,665,898.19 |
| (2) Inventory\fixed assets\construction in progress changed into property investment | 1,109,483,031.70 | - | 1,109,483,031.70 |
| 4. Closing balance | 3,062,389,558.31 | 438,760,984.63 | 3,501,150,542.94 |
| II. Accumulated depreciation and accumulated amortization | |||
| 1. Opening balance | 352,149,349.88 | 68,425,971.44 | 420,575,321.32 |
| 2. Increase in the current period | 93,669,647.35 | 12,969,173.81 | 106,638,821.16 |
| (1) Provision or amortization | 93,669,647.35 | 12,969,173.81 | 106,638,821.16 |
| 4. Closing balance | 445,818,997.23 | 81,395,145.25 | 527,214,142.48 |
| III. Depreciation provision | |||
| 1. Opening balance | - | - | - |
| 4. Closing balance | - | - | - |
| IV. Book value | |||
| 1. Opening book value | 2,616,570,561.08 | 357,365,839.38 | 2,973,936,400.46 |
| 2. Closing book value | 1,600,757,176.73 | 359,669,115.00 | 1,960,426,291.73 |
(2). Information of investment real estate without property right certificates
√Applicable □Not Applicable
Unit: RMB
| Item | Book value | Reasons for having not obtained the ownership certificate |
| Office building of the auxiliary project in western Yiwu | 103,736,942.74 | Completion settlement not completed |
| Total | 103,736,942.74 |
Other statements
√Applicable □Not Applicable
As of December 31, 2021, the total amount of investment real estate for which the propertyright certificates had not been received due to the final settlement was still in progress was RMB103,736,942.74.
21. Fixed assets
Presentation of items
√Applicable □Not Applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Fixed assets | 5,078,590,929.75 | 5,234,293,786.87 |
| Total | 5,078,590,929.75 | 5,234,293,786.87 |
Other notes:
□Applicable √Not Applicable
Fixed assets
(1). Overview of fixed assets
√Applicable □Not Applicable
Unit: RMB
| Item | Buildings and structures | Machinery equipment | Transportation equipment | Total |
| I. Original book value: | ||||
| 1. Opening balance | 7,419,947,051.90 | 3,785,579,073.90 | 17,844,183.85 | 11,223,370,309.65 |
| 2. Increase in the current period | 142,043,463.99 | 95,500,592.38 | 985,758.82 | 238,529,815.19 |
| (1) Purchase | 1,742,482.55 | 50,062,006.86 | 985,758.82 | 52,790,248.23 |
| (2) Changeover from construction in progress | 140,300,981.44 | 45,159,824.47 | - | 185,460,805.91 |
| (4) Other transfer-in | - | 278,761.05 | - | 278,761.05 |
| 3. Decrease in the current period | 3,366.44 | 13,881,195.30 | 5,504,327.05 | 19,388,888.79 |
| (1) Disposal or retirement | 3,366.44 | 13,881,195.30 | 5,504,327.05 | 19,388,888.79 |
| (2) Other changeover | - | - | - | |
| 4. Closing balance | 7,561,987,149.45 | 3,867,198,470.98 | 13,325,615.62 | 11,442,511,236.05 |
| II. Accumulated depreciation | ||||
| 1. Opening balance | 2,443,460,695.43 | 3,061,676,908.45 | 12,775,451.05 | 5,517,913,054.93 |
| 2. Increase in the current period | 286,194,882.11 | 104,750,015.62 | 982,547.28 | 391,927,445.01 |
| (1) Provision | 286,194,882.11 | 104,750,015.62 | 982,547.28 | 391,927,445.01 |
| 3. Decrease in the current period | - | 11,793,932.72 | 5,289,728.77 | 17,083,661.49 |
| (1) Disposal or retirement | - | 11,793,932.72 | 5,289,728.77 | 17,083,661.49 |
| 4. Closing balance | 2,729,655,577.54 | 3,154,632,991.35 | 8,468,269.56 | 5,892,756,838.45 |
| III. Depreciation provision | ||||
| 1. Opening balance | 471,163,467.85 | - | - | 471,163,467.85 |
| 4. Closing balance | 471,163,467.85 | - | - | 471,163,467.85 |
| IV. Book value | ||||
| 1. Closing book value | 4,361,168,104.06 | 712,565,479.63 | 4,857,346.06 | 5,078,590,929.75 |
| 2. Opening book value | 4,505,322,888.62 | 723,902,165.45 | 5,068,732.80 | 5,234,293,786.87 |
(2). Temporarily idle fixed assets
□Applicable √Not Applicable
(3). Fixed assets leased in through financial lease
√Applicable □Not Applicable
Unit: RMB
| Item | Original book value | Accumulated depreciation | Impairment provision | Book value |
| General equipment | 6,084,431.99 | 5,841,054.71 | - | 243,377.28 |
(4). Fixed assets leased out through operating lease
□Applicable √Not Applicable
(5). Fixed assets for which the ownership certificates have not been obtained
√Applicable □Not Applicable
Unit: RMB
| Item | Book value | Reasons for having not obtained the ownership certificate |
| Huangyuan Clothing Market | 259,100,829.23 | Completion settlement not completed |
| CCC Hotel | 53,939,512.13 | Completion settlement not completed |
| Liaoning Xiliu Yiwu China Commodity City | 392,075,717.75 | Completion settlement not completed |
| Underground space of Yixi supporting project | 497,104,194.34 | Completion settlement not completed |
| Total | 1,202,220,253.45 |
Other notes:
√Applicable □Not Applicable
The impairment of fixed assets was RMB 471,163,467.85, which was the impairment of fixedassets of Haicheng Yiwu China Commodities City.As of December 31, 2021, the total amount of property, plant and equipmentfor which theproperty right certificates had not been received due to the final settlement was still in progress wasRMB 1,202,220,253.45.
Disposal of fixed assets
□Applicable √Not Applicable
22. Construction in progress
Presentation of items
√Applicable □Not Applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Construction in progress | 1,090,577,963.27 | 982,891,877.14 |
| Total | 1,090,577,963.27 | 982,891,877.14 |
Other notes:
□Applicable √Not Applicable
Construction in progress
(1). Overview of construction in progress
√Applicable □Not Applicable
Unit: RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| West Yiwu International Means of Production Market Auxiliary Project | 212,637,292.78 | - | 212,637,292.78 | 166,382,416.70 | - | 166,382,416.70 |
| Liaoning Xiliu Yiwu China Commodities City Commerce Phase I Project—Hotel Project | 32,290,506.33 | -4,635,059.96 | 27,655,446.37 | 32,290,506.33 | -4,635,059.96 | 27,655,446.37 |
| The Zhimei Dachen Tourism Project | 58,285,106.90 | - | 58,285,106.90 | 43,194,369.48 | - | 43,194,369.48 |
| The Chian West Sea Tourism Project | 68,040,671.22 | - | 68,040,671.22 | 54,552,839.23 | - | 54,552,839.23 |
| The renovation project of Yindu Hotel and Office Building | - | - | - | 55,553,736.33 | - | 55,553,736.33 |
| The Yiwu Comprehensive Bonded Zone Project | 357,114,238.02 | - | 357,114,238.02 | 505,797,275.02 | - | 505,797,275.02 |
| The business station project of the warehouse park of the Yiwu CCC | - | - | - | 89,894,127.82 | - | 89,894,127.82 |
| The lighting project in Zone IV | - | - | - | 29,724,101.17 | - | 29,724,101.17 |
| Zone II East Parking Lot Project | 276,099,117.75 | - | 276,099,117.75 | 7,346,035.44 | - | 7,346,035.44 |
| Yiwu Digital Trade Industrial Park | 60,070,777.68 | - | 60,070,777.68 | - | - | - |
| Other projects | 30,675,312.55 | - | 30,675,312.55 | 2,791,529.58 | - | 2,791,529.58 |
| Total | 1,095,213,023.23 | -4,635,059.96 | 1,090,577,963.27 | 987,526,937.10 | -4,635,059.96 | 982,891,877.14 |
(2). Changes to important construction in progress during the current period
√Applicable □Not Applicable
Unit: RMB10,000
| Item | Budget | Opening amount Balance | Increase in the current period | Amount changed into fixed assets | Closing amount Balance | Ratio of accumulated investment to budget (%) | Progress of project | Accumulated capitalized interest | In which: capitalized interest in the current period | Interest capitalization ratio for the current period (%) | Source of funds |
| West Yiwu International Means of Production Market Auxiliary Project | 133,916.00 | 16,638.24 | 4,625.49 | - | 21,263.73 | 83.76 | Under construction | 9,938.28 | 1,024.58 | 3.53 | Self-owned/financing |
| Liaoning Xiliu Yiwu China Commodities City Commerce Phase I Project—Hotel Project | 180,000.00 | 3,229.05 | - | - | 3,229.05 | 96.32 | Shutdown | 154.61 | - | Self-owned/financing | |
| The Zhimei Dachen Tourism Project | 6,000.00 | 4,319.44 | 1,509.07 | - | 5,828.51 | 97.14 | Self-owned | ||||
| The Chian West Sea Tourism Project | 8,000.00 | 5,455.28 | 1,348.78 | - | 6,804.06 | 85.05 | Self-owned | ||||
| The renovation project of Yindu Hotel and Office Building | 25,000.00 | 5,555.37 | 17,577.42 | 23,132.79 | - | 92.53 | Self-owned | ||||
| The Yiwu Comprehensive Bonded Zone Project | 624,250.00 | 50,579.73 | 90,342.12 | 105,210.43 | 35,711.42 | 67.97 | Under construction | Self-owned | |||
| The business station project of the warehouse park of the Yiwu CCC | 19,000.00 | 8,989.41 | 1,378.56 | 10,367.97 | - | 54.57 | Self-owned | ||||
| The lighting project in Zone IV | 4,000.00 | 2,972.41 | -3.24 | 2,969.17 | - | 74.23 | Self-owned | ||||
| Zone II East Parking Lot Project | 60,706.00 | 734.60 | 26,875.31 | - | 27,609.91 | 46.37 | Self-owned | ||||
| Yiwu Digital Trade Industrial Park | 39,579.00 | - | 6,007.08 | - | 6,007.08 | 1.52 | Self-owned | ||||
| Other projects | 279.16 | 4,426.65 | 1,638.27 | 3,067.54 | Self-owned | ||||||
| Total | 1,100,451.00 | 98,752.69 | 154,087.24 | 143,318.63 | 109,521.30 | / | / | 10,092.89 | 1,024.58 | / | / |
(3). Provision made for the impairment of construction in progress in the current period
□Applicable √Not Applicable
Other statements
√Applicable □Not Applicable
The impairment value of the project under construction is RMB 4,635,059.96, which is theprovision impairment of Liaoning Xiliu Yiwu China Commodities City Commerce Phase I Project—Hotel Project.
Construction materials
(1). Engineering materials
□Applicable √Not Applicable
23. Productive biological asset
(1). Productive biological asset measured by cost
□Applicable √Not Applicable
(2). Productive biological asset measured by fair value
□Applicable √Not Applicable
Other statements
□Applicable √Not Applicable
24. Oil and gas assets
□Applicable √Not Applicable
25. Right-of-use assets
√Applicable □Not Applicable
Unit: RMB
| Item | Buildings and structures | Total |
| I. Original book value | ||
| 1. Opening balance | 249,646,048.55 | 249,646,048.55 |
| 2. Increase in the current period | 4,981,462.16 | 4,981,462.16 |
| (1) Lease in | 4,981,462.16 | 4,981,462.16 |
| 4. Closing balance | 254,627,510.71 | 254,627,510.71 |
| II. Accumulated depreciation | ||
| 1. Opening balance | - | - |
| 2. Increase in the current period | 29,280,433.57 | 29,280,433.57 |
| (1) Provision | 29,280,433.57 | 29,280,433.57 |
| 4. Closing balance | 29,280,433.57 | 29,280,433.57 |
| III. Depreciation provision | ||
| 1. Opening balance | - | - |
| 4. Closing balance | - | - |
| IV. Book value | ||
| 1. Opening book value | 225,347,077.14 | 225,347,077.14 |
| 2. Closing book value | 249,644,048.55 | 249,646,048.55 |
Other notes:
None
26. Intangible assets
(1). Overview of intangible assets
√Applicable □Not Applicable
Unit: RMB
| Item | Land use right | Software | Total |
| I. Original book value | |||
| 1. Opening balance | 5,390,387,256.44 | 19,279,040.17 | 5,409,666,296.61 |
| 2. Increase in the current period | 230,390,400.00 | 53,125,410.15 | 283,515,810.15 |
| (1) Purchase | 230,390,400.00 | 53,125,410.15 | 283,515,810.15 |
| 3. Decrease in the current period | - | 314,178.16 | 314,178.16 |
| (1) Disposal | - | 314,178.16 | 314,178.16 |
| 4. Closing balance | 5,620,777,656.44 | 72,090,272.16 | 5,692,867,928.60 |
| II. Accumulated amortization | |||
| 1. Opening balance | 1,504,667,791.47 | 4,217,523.22 | 1,508,885,314.69 |
| 2. Increase in the current period | 137,398,312.25 | 3,124,477.63 | 140,522,789.88 |
| (1) Provision | 137,398,312.25 | 3,124,477.63 | 140,522,789.88 |
| 3. Decrease in the current period | - | 104,838.32 | 104,838.32 |
| (1) Disposal | - | 104,838.32 | 104,838.32 |
| 4. Closing balance | 1,642,066,103.72 | 7,237,162.53 | 1,649,303,266.25 |
| III. Depreciation provision | |||
| 1. Opening balance | - | - | - |
| 4. Closing balance | - | - | - |
| IV. Book value | |||
| 1. Opening book value | 3,978,711,552.72 | 64,853,109.63 | 4,043,564,662.35 |
| 2. Closing book value | 3,885,719,464.97 | 15,061,516.95 | 3,900,780,981.92 |
At the end of the period, the percentage of the intangible assets formed through the Company'sinternal research and development in the balance of intangible assets was 0.71%
(2). Land use right for which the ownership certificate has not been obtained
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
27. Development expenses
√Applicable □Not Applicable
Unit: RMB
| Item | Opening amount Balance | Increase in the current period | Decrease in the current period | Closing amount Balance |
| Internal development expenditure | Recognized as intangible assets | |||
| The development project for platform “chinagoods” | 22,223,061.09 | 28,600,354.03 | 44,463,601.10 | 6,359,814.02 |
| Total | 22,223,061.09 | 28,600,354.03 | 44,463,601.10 | 6,359,814.02 |
Other statementsNone
28. Goodwill
(1). Original book value of goodwill
□Applicable √Not Applicable
(2). Provision for goodwill impairment
□Applicable √Not Applicable
(3).Information on the assets Group or combination of assets Groups to which the goodwillbelongs
□Applicable √Not Applicable
(4).Goodwill impairment test process, key parameters (e.g. growth rate in the forecast
period, growth rate in the stable period, profit margin, discount rate, forecast period forthe estimate of present value of future cash flows, if applicable) and recognition ofgoodwill impairment loss
□Applicable √Not Applicable
(5). Impact of goodwill impairment test
□Applicable √Not Applicable
Other statements
□Applicable √Not Applicable
29. Long-term prepaid expenses
√Applicable □Not Applicable
Unit: RMB
| Item | Opening balance | Increase in the current period | Amortized amount in the current period | Closing balance |
| Decoration of buildings and structures | 101,767,311.81 | 133,097,867.38 | 59,993,339.89 | 174,871,839.30 |
| Advertising facilities | 3,586,262.55 | 12,130,450.31 | 2,404,175.73 | 13,312,537.13 |
| Total | 105,353,574.36 | 145,228,317.69 | 62,397,515.62 | 188,184,376.43 |
Other notes:
None
30. Deferred income tax assets/deferred income tax liabilities
(1). Deferred income tax assets having not been offset
√Applicable □Not Applicable
Unit: RMB
| Item | Closing balance | Opening balance | ||
| Deductible temporary difference | Deferred income tax assets | Deductible temporary difference | Deferred income tax assets | |
| Provision for impairment of assets | 18,766,810.88 | 4,691,702.72 | 18,551,468.79 | 4,637,867.20 |
| Unrealized profits of internal transactions | 1,094,793.10 | 273,698.28 | 1,094,793.10 | 273,698.27 |
| Deductible losses | 10,635,059.71 | 2,658,764.93 | 19,006,883.14 | 4,751,720.78 |
| Recognized but unpaid liabilities | 359,852,941.25 | 89,963,235.31 | 268,732,373.15 | 67,183,093.30 |
| Overspent advertising cost | 8,497,106.53 | 2,124,276.63 | 9,689,617.59 | 2,422,404.41 |
| Changes in the fair value of other non-current financial assets | 87,763,868.16 | 21,940,967.04 | 81,582,179.51 | 20,395,544.88 |
| Right-of-use assets and lease liabilities | 3,291,235.93 | 822,808.98 | - | - |
| Asset-related government grants | 53,046,300.00 | 13,261,575.00 | - | - |
| Total | 542,948,115.56 | 135,737,028.89 | 398,657,315.28 | 99,664,328.84 |
(2). Deferred income tax liabilities having not been offset
√Applicable □Not Applicable
Unit: RMB
| Item | Closing balance | Opening balance | ||
| Taxable temporary difference | Deferred income tax Debt | Taxable temporary difference | Deferred income tax Debt | |
| Asset evaluation appreciation for merger of the enterprises not under common control | 879,727.84 | 219,931.94 | 1,068,720.92 | 267,180.23 |
| Change in fair value of other equity instruments investment | 88,562,537.79 | 22,140,634.45 | 108,630,911.81 | 27,157,727.95 |
| Changes in fair value of other non-current financial assets | 357,773,989.10 | 89,443,497.28 | 343,005,960.28 | 85,751,490.08 |
| Changes in fair value of trading financial assets | 373,599.00 | 93,399.75 | 1,706,102.10 | 426,525.53 |
| Total | 447,589,853.73 | 111,897,463.42 | 454,411,695.11 | 113,602,923.79 |
(3). Deferred income tax assets or liabilities presented in net amount after offsetting
□Applicable √Not Applicable
(4). Breakdown of unrecognized deferred income tax assets
√Applicable □Not Applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Deductible temporary difference | 485,392,932.16 | 466,278,633.25 |
| Deductible losses | 1,090,714,817.48 | 908,844,380.05 |
| Total | 1,576,107,749.64 | 1,375,123,013.30 |
(5). The deductible loss in unrecognized deferred income tax assets will be due in the
following years
√Applicable □Not Applicable
Unit: RMB
| Year | Closing amount | Opening amount | Remarks |
| 2021 | - | 34,738,115.44 | |
| 2022 | 245,346,275.18 | 245,346,275.18 | |
| 2023 | 145,652,609.01 | 145,652,609.01 | |
| 2024 | 219,603,443.50 | 226,329,502.26 | |
| 2025 | 236,606,485.47 | 256,777,878.16 | |
| 2026 | 243,506,004.32 | - | |
| Total | 1,090,714,817.48 | 908,844,380.05 | / |
Other notes:
√Applicable □Not Applicable
The Group believes that, the deductible temporary differences including the aforementionedprovision for asset impairment and the deductible losses of some subsidiaries can be deducted inthe foreseeable future, and it is expected that the Group will have sufficient pre-tax profit fordeduction during the reversing period. Therefore, the Group deemed it necessary to recognize theabove deferred income tax assets.
31. Other non-current assets
√Applicable □Not Applicable
Unit: RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Prepaid land transfer fees | 138,253,316.00 | - | 138,253,316.00 | 138,253,316.00 | - | 138,253,316.00 |
| Prepayment for renovation works and prepaid decoration rent | 5,681,334.45 | - | 5,681,334.45 | 14,241,880.56 | - | 14,241,880.56 |
| Prepaid equity transfer consideration | 67,395,000.00 | - | 67,395,000.00 | - | - | - |
| Total | 211,329,650.45 | - | 211,329,650.45 | 152,495,196.56 | - | 152,495,196.56 |
Other notes:
None
32. Short-term borrowings
(1). Classification of short-term borrowings
√Applicable □Not Applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Credit loans | 942,736,046.04 | 1,257,179,389.40 |
| Total | 942,736,046.04 | 1,257,179,389.40 |
Note to the classification of short-term borrowings:
None
(2). Overdue short-term borrowings
□Applicable √Not Applicable
The important overdue and unpaid short-term loans are as follows:
□Applicable √Not Applicable
Other statements
√Applicable □Not Applicable
As of December 31, 2021, the annual interest rate of the above-mentioned borrowing is 1.20%-
3.915% (December 31, 2020: 1.20%-4.35%).
33. Held-for-trading financial liabilities
□Applicable √Not Applicable
34. Derivative financial liabilities
□Applicable √Not Applicable
35. Notes payable
(1). Presentation of notes payable
□Applicable √Not Applicable
36. Accounts payable
(1). Presentation of accounts payable
√Applicable □Not Applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Accounts payable for market and auxiliary works projects | 301,995,294.63 | 511,789,572.40 |
| Trade payables | 72,330,560.78 | 14,267,029.02 |
| Accounts payable for procurement for the hotel project | 58,722,226.25 | 26,767,337.63 |
| Accounts payable for real estate projects | 33,317,557.65 | 57,763,664.12 |
| Others | 26,994,789.71 | 25,876,199.06 |
| Total | 493,360,429.02 | 636,463,802.23 |
(2). Important accounts payable with age over 1 year
√Applicable □Not Applicable
Unit: RMB
| Item | Closing balance | Reasons for not being paid or carried forward |
| Accounts payable for real estate projects | 6,484,732.17 | Settlement has not been completed or the projects are within the warranty periods |
| Total | 6,484,732.17 | / |
Other statements
√Applicable □Not Applicable
The accounts payable are free of interest and are generally paid within two months after receiptof the payment notice or based on the project contracts and progress of projects. The balancepayments for the projects are made after completion of settlement.
37. Advances from customers
(1). Presentation of advances from customers
√Applicable □Not Applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Rental advances | 142,605,296.83 | 105,773,195.96 |
| Others | 10,961,014.30 | 6,979,701.29 |
| Total | 153,566,311.13 | 112,752,897.25 |
(2). Important advances with the age over 1 year
□Applicable √Not Applicable
Other statements
√Applicable □Not Applicable
Since the advances from customers are mainly derived from the advance rentals of auxiliaryhousing businesses and investment real estate with small individual amounts, as of December 31,2021, there were no single large advances from customers with an age of more than 1 year.
38. Contract liabilities
(1). Overview of contract liabilities
√Applicable □Not Applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Advances from customers for use fee of shops | 2,996,965,006.91 | 2,243,528,509.65 |
| Advances from customers for goods | 762,448,893.76 | 100,786,067.26 |
| Advances from customers for housing purchase | 178,756,399.38 | 3,856,621.50 |
| Advances from customers for advertising fee | 66,129,057.15 | 57,095,601.13 |
| Advances from customers for loyalty ofbrands | 17,997,985.07 | 3,270,729.29 |
| Advances from customers for use fee of networking cables | 14,150,457.59 | 10,534,354.07 |
| Others | 21,971,424.98 | 23,139,905.98 |
| Total | 4,058,419,224.84 | 2,442,211,788.88 |
(2). Amount of and reasons for material changes to book value during the reporting period
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
39. Payroll payable
(1). Presentation of payroll payable
√Applicable □Not Applicable
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| I. Short-term compensation | 159,703,155.55 | 613,854,934.39 | 532,105,325.85 | 241,452,764.09 |
| II. Post employment benefits – defined contribution plan | 1,795,841.98 | 29,714,756.98 | 28,998,607.67 | 2,511,991.29 |
| III. Severance benefits | - | 4,592,993.70 | 4,592,993.70 | - |
| Total | 161,498,997.53 | 648,162,685.07 | 565,696,927.22 | 243,964,755.38 |
(2). Presentation of short-term compensation
√Applicable □Not Applicable
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| 1. Salary, bonus, allowance and subsidy | 158,575,947.86 | 508,355,599.60 | 426,809,517.47 | 240,122,029.99 |
| 2. Employee benefits | - | 45,147,496.52 | 45,147,496.52 | - |
| 3. Social security contribution | 965,231.59 | 21,411,511.78 | 21,137,796.52 | 1,238,946.85 |
| In which: contribution to medical insurance scheme | 887,294.94 | 19,546,488.20 | 19,331,895.41 | 1,101,887.73 |
| Contribution to work-related injury insurance scheme | 48,011.60 | 770,986.78 | 790,071.51 | 28,926.87 |
| Contribution to maternity insurance scheme | 29,925.05 | 1,094,036.80 | 1,015,829.60 | 108,132.25 |
| 4. Housing provident fund | 110,017.00 | 28,521,846.04 | 28,552,103.04 | 79,760.00 |
| 5. Contribution to trade union fund and employee education fund | 51,959.10 | 10,418,480.45 | 10,458,412.30 | 12,027.25 |
| Total | 159,703,155.55 | 613,854,934.39 | 532,105,325.85 | 241,452,764.09 |
(3). Presentation of defined contribution plan
√Applicable □Not Applicable
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| 1. Contribution to the basic endowment | 1,665,658.10 | 28,708,041.18 | 28,031,295.88 | 2,342,403.40 |
| insurance scheme | ||||
| 2. Contribution to the unemployment insurance scheme | 130,183.88 | 1,006,715.80 | 967,311.79 | 169,587.89 |
| Total | 1,795,841.98 | 29,714,756.98 | 28,998,607.67 | 2,511,991.29 |
Other notes:
□Applicable √Not Applicable
40. Tax payable
√Applicable □Not Applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| VAT | 83,766,540.18 | 90,094,604.12 |
| Business tax | -240,013.55 | -431,783.32 |
| Corporate income tax | 279,485,623.04 | 341,382,542.08 |
| Individual income tax | 1,260,803.19 | 1,008,552.21 |
| Urban maintenance and construction tax | 4,687,093.90 | 5,176,906.98 |
| Land appreciation tax | 2,780,327.20 | -47,134,688.35 |
| Real estate tax | 171,138,711.99 | 93,881,697.54 |
| Land use tax | 10,612,069.24 | 5,357,865.24 |
| Others | 6,005,392.15 | 6,064,803.23 |
| Total | 559,496,547.34 | 495,400,499.73 |
Other notes:
As of December 31, 2021, the details of the main taxes prepaid by the Group were as follows:
Unit: RMB
| Item | Qiantang Impression Real Estate Project | Occident Center Real Estate Project | Total amount of prepaid tax |
| Business tax | 240,013.55 | - | 240,013.55 |
| Urban maintenance and construction tax | - | 731,793.32 | 731,793.32 |
| Education surcharge and local education surcharge | - | 522,709.51 | 522,709.51 |
| Total | 240,013.55 | 1,254,502.83 | 1,494,516.38 |
41. Other payables
Presentation of items
√Applicable □Not Applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Other payables | 1,908,742,835.15 | 1,646,345,561.62 |
| Total | 1,908,742,835.15 | 1,646,345,561.62 |
Other notes:
□Applicable √Not Applicable
Interest payable
(1). Presentation by category
□Applicable √Not Applicable
Dividend payable
(1). Presentation by category
□Applicable √Not Applicable
Other payables
(1). Presentation of other payables by nature
√Applicable □Not Applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Withholdings, deposit and margin | 598,819,336.72 | 584,880,967.08 |
| Operating expenses payable | 268,576,640.89 | 234,420,448.09 |
| Bank reserve of Zhejiang Yiwugou E-commerce Co., Ltd. | 25,823,767.03 | 23,223,609.46 |
| Restricted equity incentive plan | 137,440,900.00 | 137,298,000.00 |
| Pending investment refunds | 877,464,692.76 | 666,512,070.29 |
| Others | 617,497.75 | 10,466.70 |
| Total | 1,908,742,835.15 | 1,646,345,561.62 |
(2). Important other payables with account age over 1 year
□Applicable √Not Applicable
Other notes:
√Applicable □Not Applicable
Other payables mainly come from deposits for commercial spaces and bid deposits forengineering projects, with small individual amounts, so there were no important other payables withan age of more than 1 year on December 31, 2021.
42. Held-for-sale liabilities
□Applicable √Not Applicable
43. Non-current liabilities due within one year
√Applicable □Not Applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Long-term borrowings within one year | 100,918,614.59 | 300,634,822.21 |
| Bonds payable due within 1 year | 3,552,960,829.66 | 1,014,391,752.22 |
| Lease liabilities due within 1 year | 10,362,478.83 | 6,930,542.47 |
| Total | 3,664,241,923.08 | 1,321,957,116.90 |
Other notes:
None
44. Other current liabilities
Other current liabilities
√Applicable □Not Applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Short-term financing notes payable | 3,009,756,921.11 | 3,004,009,789.85 |
| To-be-reported output tax | 67,323,844.72 | 15,466,581.46 |
| Dividend announced but not collected before listing | 2,083,112.65 | 2,083,112.65 |
| Dividend payable to to-be-recognized accounts | 2,220,922.02 | 2,048,557.72 |
| Total | 3,081,384,800.50 | 3,023,608,041.68 |
Changes in short-term bonds payable:
√Applicable □Not Applicable
Unit: RMB
| Bond Name | Face value | Issuing Date | Bond Term | Issuing Amount | Opening amount Balance | Current period Issuing | Interest accrued based on face value | Premium/discount amortization | Current period Repayment | Closing amount Balance |
| Super-short-term commercial paper | 100 | October 27, 2021 | 268 days | 1,000,000,000 | - | 1,000,000,000 | 5,388,493.15 | 180,821.92 | - | 1,004,835,068.48 |
| Super-short-term commercial paper | 100 | November 15, 2021 | 279 days | 1,000,000,000 | - | 1,000,000,000 | 3,695,616.44 | 130,555.56 | - | 1,003,076,172.00 |
| Super-short-term commercial paper | 100 | November 30, 2021 | 269 days | 1,000,000,000 | - | 1,000,000,000 | 2,489,863.01 | 88,888.89 | - | 1,001,845,680.63 |
| Super-short-term commercial paper | 100 | November 27, 2020 | 90 days | 1,000,000,000 | 1,002,227,312.68 | - | 3,767,123.29 | 152,777.78 | 1,006,147,213.75 | - |
| Super-short-term commercial paper | 100 | December 9, 2020 | 90 days | 1,000,000,000 | 1,000,238,641.55 | - | 4,497,260.27 | 279,166.67 | 1,005,015,068.49 | - |
| Super-short-term commercial paper | 100 | December 25, 2020 | 28 days | 1,000,000,000 | 1,001,543,835.62 | - | 1,553,424.66 | - | 1,003,097,260.28 | - |
| Total | / | / | / | 6,000,000,000 | 3,004,009,789.85 | 3,000,000,000 | 21,391,780.82 | 832,210.82 | 3,014,259,542.52 | 3,009,756,921.11 |
Other notes:
√Applicable □Not Applicable
As of December 31, 2021, the annual interest rate of the above-mentioned short-term financingbonds was 2.48%-2.98% (December 31, 2020: 2.45%-2.70%).
45. Long-term borrowings
(1). Classification of long-term borrowings
√Applicable □Not Applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Credit loans | 771,250,000.00 | 282,000,000.00 |
| Total | 771,250,000.00 | 282,000,000.00 |
Notes on the classification of long-term borrowings:
None
Other notes, including the interest rate range:
√Applicable □Not Applicable
As of December 31, 2021, the annual interest rate of the above borrowing was 2.70%-3.92%(December 31, 2020: 2.70%-3.92%).
46. Bonds payable
(1). Bonds payable
√Applicable □Not Applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| MTN | - | 2,024,870,915.16 |
| Bonds payable | - | 1,527,290,794.52 |
| Total | - | 3,552,161,709.68 |
(2). Changes in bonds payable: (excluding preferred stocks, perpetual bonds and otherfinancial instruments classified as financial liabilities)
√Applicable □Not Applicable
Unit: RMB
| Bond Name | Face value | Issuing Date | Bond Term | Issuing Amount | Opening amount Balance | Current period Issuing | Interest accrued based on face value | Premium/discount amortization | Current period Repayment | Transferred in this year and due within one year | Closing amount Balance |
| MTN | 100 | July 15, 2019 | 3Y | 1,000,000,000 | 1,017,879,350.82 | - | 39,900,000.00 | 384,201.20 | - | 1,018,263,552.02 | - |
| MTN | 100 | October 21, 2019 | 3Y | 1,000,000,000 | 1,006,991,564.34 | - | 39,700,000.00 | 414,918.78 | - | 1,007,406,483.12 | - |
| Corporate bonds | 100 | June 5, 2019 | 3Y | 800,000,000 | 819,791,780.82 | - | 34,400,000.00 | - | - | 819,791,780.82 | - |
| Corporate bonds | 100 | September 25, 2019 | 3Y | 700,000,000 | 707,499,013.70 | - | 27,930,000.00 | - | - | 707,499,013.70 | - |
| Total | / | / | / | 3,500,000,000 | 3,552,161,709.68 | - | 141,930,000.00 | 799,119.98 | - | 3,552,960,829.66 | - |
(3). Conditions and time for the conversion of convertible corporate bonds
□Applicable √Not Applicable
(4). Notes on other financial instruments classified as financial liabilitiesBasic information of other financial instruments such as preferred shares and perpetual bondsoutstanding at the end of the reporting period
□Applicable √Not Applicable
Changes in other financial instruments such as preferred shares and perpetual bonds outstandingat the end of the reporting period
□Applicable √Not Applicable
The basis for classifying other financial instruments as financial liabilities:
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
47. Lease liabilities
√Applicable □Not Applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Undiscounted amount of finance lease payables | 334,659,632.28 | 229,574,650.88 |
| Unrecognized financing charges | -118,354,479.52 | - |
| Lease liabilities due within 1 year | -10,362,478.83 | - |
| Total | 205,942,673.93 | 229,574,650.88 |
Other notes:
Note: The Group uses the incremental borrowing rate of 2.78%-8.01% as the discount rate tocalculate book value to determine the lease liability and measure right-of-use assets.
48. Long-term accounts payable
Presentation of items
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
Long-term accounts payable
(1). Long-term payables by nature
□Applicable √Not Applicable
Special accounts payable
(1). Special payables by nature
□Applicable √Not Applicable
49. Long-term payroll payable
□Applicable √Not Applicable
50. Estimated liabilities
√Applicable □Not Applicable
Unit: RMB
| Item | Opening balance | Closing balance | Cause of formation |
| Pending L/C losses | 110,620,306.10 | 110,620,306.10 | |
| Total | 110,620,306.10 | 110,620,306.10 | / |
Other notes, including the notes on related important assumptions and estimates of importantestimated liabilities:
In 2017, the letters of credit issued by the Group’s subsidiary based on international tradeagency business became overdue successively due to the principals’ failure to make payments asagreed. Based on the principle of prudence, the Group recognized estimated liabilities for theestimated potential losses. On Apr 30, 2018, the Group lost control over the subsidiary due to itsdisposal of some equity in the subsidiary. As of December 31, 2021, the matter is currently underprocessing.
51. Deferred income
Overview of deferred income
√Applicable □Not Applicable
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance | Cause of formation |
| Asset-related government grants | 26,545,277.30 | 53,046,300.00 | 1,421,473.68 | 78,170,103.62 | |
| Total | 26,545,277.30 | 53,046,300.00 | 1,421,473.68 | 78,170,103.62 | / |
Items involving government grants:
√Applicable □Not Applicable
Unit: RMB
| Liability item | Opening balance | Increase in grant amount in the current | Amount recognized in other income | Closing balance | Asset-related or income-related |
| period | in the current period | ||||
| Subsidy for service industry cluster project | 5,510,112.59 | - | 266,666.64 | 5,243,445.95 | Asset-related |
| Interest subsidy for the international exhibition center construction fund | 21,035,164.71 | - | 1,154,807.04 | 19,880,357.67 | Asset-related |
| Subsidy for Yiwu Comprehensive Bonded Zone Project | - | 53,046,300.00 | - | 53,046,300.00 | Asset-related |
Other notes:
□Applicable √Not Applicable
52. Other non-current liabilities
□Applicable √Not Applicable
53. Capital stock
√Applicable □Not Applicable
Unit: RMB
| Opening balance | Increase or decrease in the current period (+, -) | Closing balance | |||||
| Issuing New shares | Bonus shares | Provident funds Conversion into shares | Others | Sub-total | |||
| Total number of shares | 5,489,914,176.00 | 1,360,000.00 | - | - | - | 1,360,000.00 | 5,491,274,176.00 |
Other notes:
On August 9, 2021, the Group implemented a restricted equity incentive plan, granting2,550,000 restricted stocks to incentive objects. On September 6, 2021, the Group received therestricted stock subscription payment of RMB 5,592,600.00 from the incentive objects, and theactual number of shares subscribed was 2,340,000 shares, which was verified by ZhejiangZhicheng Certified Public Accountants (special general partnership), with a capital verification report(Zhe Zhi Kuai Yi Zi [2021] No. 17) issued for that.After consideration and approval at the thirty-fifth meeting of the eighth the Board of Directorsand the ninth meeting of the eighth Board of Supervisors of the Group held on August 9, 2021, inview of the fact that among the original incentive objects granted for the first time, 6 incentiveobjects including ZHAO Qitong no longer worked in the Company due to their position adjustments,and three incentive objects including HOU Wenbin had resigned due to personal reasons,according to the relevant regulations of the "Incentive Plan" and the authorization of the FifthProvisional General Meeting of Shareholders in 2020, the Board of Directors of the Companydecided to repurchase and canceled a total of 980,000 restricted shares granted to the above ninepersons but yet to be released. The Company would repurchase and cancel the restricted sharesheld by the above-mentioned 9 persons that had been granted but not yet been released at thesum of interest calculated at RMB 2.885 per share and the fixed deposit interest rate announced bythe People's Bank of China for the same period. The total amount of restricted stock repurchasefunds this time was RMB 2.852 million. The above-mentioned repurchase funds would all be paidwith the Company's own funds, and the cancellation would be completed on November 30, 2021.After the reserved grant of restricted stocks and the first partial repurchase of restricted stocks,the share capital increased by RMB 1,360,000 this year.
54. Other equity instruments
(1). Basic information of other financial instruments such as preferred shares and perpetualbonds outstanding at the end of the reporting period
□Applicable √Not Applicable
(2). Changes in other financial instruments such as preferred shares and perpetual bonds
outstanding at the end of the reporting period
□Applicable √Not Applicable
Changes in other equity instruments in the current period, the reasons therefor and the basis forrelevant accounting treatment:
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
55. Capital reserve
√Applicable □Not Applicable
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| Capital surplus (share premium) | 1,558,612,797.11 | 3,252,600.00 | 1,901,200.00 | 1,559,964,197.11 |
| Equity incentive | 1,880,981.38 | 31,533,363.28 | - | 33,414,344.66 |
| Others | 34,412,746.18 | 3,717,827.01 | - | 38,130,573.19 |
| Total | 1,594,906,524.67 | 38,503,790.29 | 1,901,200.00 | 1,631,509,114.96 |
Other notes including those on the changes in the current period and the reasons therefor:
The increase in capital reserve-other capital reserve during the reporting period was due to theCompany's recognition on the share payment fee for RMB 31,533,363.28 during the waiting period,which was included in this item accordingly.
56. Treasury shares
√Applicable □Not Applicable
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| Restricted equity incentive plan | 137,298,000.00 | 5,592,600.00 | 5,395,800.00 | 137,494,800.00 |
| Total | 137,298,000.00 | 5,592,600.00 | 5,395,800.00 | 137,494,800.00 |
Other notes including those on the changes in the current period and the reasons therefor:
On August 9, 2021, the Group implemented the restricted equity incentive plan, granting2,340,000 restricted shares to the incentive objects and confirming treasury shares of RMB5,592,600. At the same time, because some incentive objects resigned during the waiting periodand no longer had the incentive qualification, the Company repurchased the restricted shares forcancellation and offset the corresponding treasury shares. For details, please refer to Note VII. 53Share capital.
57. Other comprehensive income
√Applicable □Not Applicable
Unit: RMB
| Item | Opening amount Balance | Amount in the current period | Closing amount Balance | ||
| Amount before tax incurred in the current period | Less: income tax | Amount after tax attributable to parent company | |||
| I. Other comprehensive income that cannot be reclassified into profit or loss | 81,473,183.84 | -20,068,374.01 | -5,017,093.50 | -15,051,280.51 | 66,421,903.33 |
| Change in fair value of other equity instruments investment | 81,473,183.84 | -20,068,374.01 | -5,017,093.50 | -15,051,280.51 | 66,421,903.33 |
| II. Other comprehensive income to be reclassified into profit or loss | -3,323,522.51 | -2,247,645.80 | - | -2,247,645.80 | -5,571,168.31 |
| Difference arising from the translation of foreign currency financial statements | -3,323,522.51 | -2,247,645.80 | - | -2,247,645.80 | -5,571,168.31 |
| Total other comprehensive income | 78,149,661.33 | -22,316,019.81 | -5,017,093.50 | -17,298,926.31 | 60,850,735.02 |
Other notes, including those on the adjustment of the initially recognized amount of hedged itemsconverted from the effective part of gains or losses from cash flow hedging:
None
58. Special reserve
□Applicable √Not Applicable
59. Surplus reserve
√Applicable □Not Applicable
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| Statutory surplus reserve | 1,312,373,111.99 | 140,951,986.92 | - | 1,453,325,098.91 |
| Discretionary surplus reserve | 40,195,855.68 | - | - | 40,195,855.68 |
| Others | 11,688,840.91 | - | - | 11,688,840.91 |
| Total | 1,364,257,808.58 | 140,951,986.92 | - | 1,505,209,795.50 |
Notes on surplus reserves, including those on the changes in the current period and the reasonstherefor:
According to the “Company Law” and the Company’s articles of association, the Companyaccrued a statutory surplus reserve in terms of 10% of its net profit. If the amount of statutorysurplus reserve accrued reaches more than 50% of the Company's registered capital, the accrualmay cease.The Company can accrue free surplus reserve after accruing the statutory surplus reserve.With the approval, the free surplus reserve can be used to make up for previous losses or toincrease share capital.
60. Undistributed profits
√Applicable □Not Applicable
Unit: RMB
| Item | Current period | Previous period |
| Undistributed profits at the end of the previous reporting period before adjustment | 5,168,298,206.50 | 4,750,787,389.17 |
| Opening undistributed profits after adjustment | 5,168,298,206.50 | 4,750,787,389.17 |
| Plus: net profits attributable to shareholders of the parent company in the current period | 1,334,095,906.95 | 926,626,706.42 |
| Less: withdrawal of statutory surplus reserve | 140,951,986.92 | 128,090,896.77 |
| Common share dividend payable | 301,945,279.68 | 381,024,992.32 |
| Closing undistributed profits | 6,059,496,846.85 | 5,168,298,206.50 |
Details of the adjustment of opening undistributed profits:
1. The opening undistributed profits affected by the retroactive adjustment made in accordance withthe Accounting Standards for Enterprises and related new provisions amounted to RMB0.
2.The opening undistributed profits affected by the changes in accounting policies amounted toRMB0.
3. The opening undistributed profits affected by the correction of major accounting errors amountedto RMB0.
4. The opening undistributed profits affected by changes in the scope of mergers caused bycommon control amounted to RMB0.
5. The opening undistributed profits affected by other adjustments together amounted to RMB0.
61. Operating revenue and operating cost
(1). Overview of operating revenue and operating cost
√Applicable □Not Applicable
Unit: RMB
| Item | Amount in the current period | Amount in the previous period | ||
| Revenue | Cost of sales | Revenue | Cost of sales | |
| Main business | 5,586,058,113.32 | 3,870,814,652.77 | 3,059,365,345.58 | 1,695,958,420.47 |
| Other businesses | 447,784,859.63 | 156,728,485.79 | 666,320,754.81 | 115,178,023.52 |
| Total | 6,033,842,972.95 | 4,027,543,138.56 | 3,725,686,100.39 | 1,811,136,443.99 |
(2). Revenue generated from contracts
√Applicable □Not Applicable
Unit: RMB
| Classified by type of contract | Total |
| Types of goods | |
| Sales of goods | 2,596,259,373.98 |
| The use of shops in the Commodity City and its supporting services | 2,429,854,974.22 |
| Hotel accommodation and catering services | 150,853,037.93 |
| Revenue from use fees | 107,299,598.45 |
| Other services | 534,842,468.16 |
| Classified by business area | |
| Chinese mainland | 5,819,109,472.74 |
| Classified by contract period | |
| Revenue confirmed at certain time point | |
| Sales of goods | 2,596,259,393.98 |
| Hotel catering services | 99,876,232.85 |
| Other services | 430,842,121.05 |
| Revenue confirmed during certain time period | |
| The use of shops in the Commodity City and its supporting services | 2,429,854,974.22 |
| Hotel accommodation service | 50,976,805.08 |
| Revenue from use fees | 107,299,598.45 |
| Other services | 104,000,347.11 |
| Total | 5,819,109,472.74 |
Description of the income from contracts:
√Applicable □Not Applicable
The income recognized in the current year and included in the opening book value ofcontractual liabilities is as follows:
Unit: RMB
| Type of contract | Current period |
| Sales of goods | 100,786,067.26 |
| The use of shops in the Commodity City and its supporting services | 2,252,863,622.76 |
| Hotel accommodation service | 13,367,212.91 |
| Other services | 59,472,570.40 |
| Total | 2,426,489,473.33 |
(3). Contract performance obligations
√Applicable □Not Applicable
Sales of goods
The performance obligation is fulfilled when the goods are delivered to the customer, and thecontract price is collected in advance before the goods are delivered to the customer or receivedupon the delivery of the goods.
The use of shops in the Commodity City and its supporting services
The contractual performance obligation is fulfilled when providing the use of shops in theCommodity City and the supporting services for business. For the use of shops in the CommodityCity and the supporting services for business, the progress of contract performance is determinedbased on the number of using days of the shops. Customers usually need to pay in advance beforethe use of shops in the Commodity City and the supporting services for business are provided.
Hotel accommodation business
The performance obligation is fulfilled when providing hotel accommodation services. For thehotel accommodation business, the progress of contractual performance is determined based onthe number of days of stay. For hotel accommodation services, a partial deposit is collected fromthe customer first, and the remaining contract price is usually collected upon the completion of thehotel accommodation services.
Hotel catering business
The performance obligation is fulfilled when the hotel catering services are provided. Thecontract price for hotel catering services is usually charged when the hotel catering services areperformed.
Fixed -time paid funding services
The performance obligation is fulfilled when the fixed-time paid funding service is provided. Forthe fixed-time paid funding service, the progress of contractual performance is determined based onthe number of using days the fund. For the fixed-time paid funding service, the contract price isusually charged regularly as agreed in the contract.
(4). Amortization to remaining contract performance obligations
√Applicable □Not Applicable
At the end of the reporting period, the amount of income corresponding to the performanceobligations that have been signed but not yet performed or not yet completed was RMB4,058,419,224.84, of which:
RMB 4,058,419,224.84 is expected to be recognized as an income in 2026Other notes:
None
62. Taxes and surcharges
√Applicable □Not Applicable
Unit: RMB
| Item | Amount in the current period | Amount in the previous period |
| Real estate tax | 118,182,369.56 | 111,702,852.72 |
| Urban maintenance and | 12,672,573.75 | 8,757,433.19 |
| construction tax | ||
| Land use tax | 11,029,363.42 | 9,601,436.31 |
| Stamp duty | 7,188,521.64 | 4,789,431.36 |
| Education surcharge | 5,476,928.89 | 3,759,495.94 |
| Local education surcharge | 3,651,285.86 | 2,495,683.67 |
| Land appreciation tax | 3,349,307.04 | 10,586,314.21 |
| Business tax | 206,842.50 | 14,077,088.53 |
| Vehicle and vessel use tax | 3,456.16 | 32.90 |
| Cultural undertaking development fee | -1,440.00 | 116,214.00 |
| Total | 161,759,208.82 | 165,885,982.83 |
Other notes:
None
63. Sales expenses
√Applicable □Not Applicable
Unit: RMB
| Item | Amount in the current period | Amount in the previous period |
| Marketing expenses | 115,754,997.02 | 104,738,904.24 |
| Advertising expenses | 45,648,963.60 | 94,410,960.56 |
| Security and insurance expenses | 38,306,012.40 | 27,115,364.49 |
| Water, electricity and fuel expenses | 1,351,892.26 | 3,651,395.20 |
| Depreciation and amortization | 950,256.30 | 1,345,275.41 |
| Employee expenses | - | 7,379.32 |
| Others | 2,733,852.99 | 10,619,907.22 |
| Total | 204,745,974.57 | 241,889,186.44 |
Other notes:
None
64. Administrative expenses
√Applicable □Not Applicable
Unit: RMB
| Item | Amount in the current period | Amount in the previous period |
| Employee and uniform expenses | 326,368,947.18 | 245,021,737.66 |
| Depreciation and amortization | 37,743,155.62 | 37,337,018.02 |
| Intermediary expenses | 23,480,815.21 | 38,529,410.46 |
| Office expenses | 17,616,097.42 | 14,680,708.68 |
| Travel expenses | 4,761,152.09 | 5,353,751.01 |
| Lease and property management expenses | 3,071,515.25 | 3,071,515.25 |
| Promotion and market traders introduction expenses | 728,448.70 | 937,941.53 |
| Others | 39,773,296.33 | 32,584,762.84 |
| Total | 453,543,427.80 | 377,516,845.45 |
Other notes:
None
65. R&D expenses
√Applicable □Not Applicable
Unit: RMB
| Item | Amount in the current period | Amount in the previous period |
| Employee expenses | 6,076,406.11 | 6,293,791.55 |
| Technology development fee | 650,354.19 | 7,050,178.63 |
| Depreciation and amortization | 122,541.44 | 343,037.80 |
| Others | 3,459,500.10 | 4,820,619.01 |
| Total | 10,308,801.84 | 18,507,626.99 |
Other notes:
None
66. Financial expenses
√Applicable □Not Applicable
Unit: RMB
| Item | Amount in the current period | Amount in the previous period |
| Interest expenses | 341,313,765.39 | 416,095,890.57 |
| Amortization of commercial paper discount | 4,735,876.54 | 3,269,879.47 |
| Amortization of discounted bonds payable | - | 2,060,361.37 |
| Less: interest income | -177,964,682.68 | -230,212,773.93 |
| Less:capitalized amount of interest | -10,245,795.84 | -29,273,761.94 |
| Foreign exchange gains or losses | 5,841,186.27 | 13,574,395.11 |
| Amortization of unrecognized financing expenses | 12,864,558.43 | - |
| Others | 3,366,705.59 | 6,575,708.68 |
| Total | 179,911,613.70 | 182,089,699.33 |
Other notes:
The capitalized amount of borrowing costs has been included in the construction in progress.
67. Other income
√Applicable □Not Applicable
Unit: RMB
| Item | Amount in the current period | Amount in the previous period |
| Additional deduction of input tax | 6,244,434.23 | 1,376,744.49 |
| Subsidies for energy saving and consumption reduction | 4,863,474.00 | - |
| Special incentive funds for modern supply chain system innovation | 2,682,704.00 | - |
| Industrial Cluster Cross-border E-commerce Development Pilot Subsidy | 1,879,093.83 | - |
| Interest subsidy for the international exhibition center construction fund | 1,154,807.04 | 1,154,807.04 |
| Reward for "three collections and three rebates" | 1,084,878.00 | - |
| Government subsidy for service industry cluster for 2011 | 266,666.64 | 266,666.64 |
| Refund of social security contribution | 14,595.20 | 4,870,959.47 |
| Grant for the construction and operation of Yiwu credit data center | - | 3,000,000.00 |
| R&D investment prize from Yiwu Science and Technology Bureau | - | 2,104,180.00 |
| Exhibition and conference subsidies | - | 1,309,000.00 |
| Employment stabilization subsidy | - | 1,091,612.71 |
| Others | 5,366,295.07 | 2,812,361.79 |
| Total | 23,556,948.01 | 17,986,332.14 |
Other notes:
None
68. Investment income
√Applicable □Not Applicable
Unit: RMB
| Item | Amount in the current period | Amount in the previous period |
| Income from long-term equity investment calculated with the equity method | 599,180,325.58 | 34,968,640.68 |
| Dividend income from other equity instruments investment during holding period | 12,542,733.80 | 10,034,187.04 |
| Interest income from debt investment during holding period | - | 11,786,857.07 |
| Investment income from disposal of held-for-trading financial assets | 67,265.72 | 377,061.15 |
| Income acquired from other non-current financial assets during the holding period | 20,833,465.43 | 41,242,844.09 |
| Gains from re-measurement of the remaining equity at fair value after the loss of control | - | 30,456,963.96 |
| Investment income from disposal of subsidiaries and related claims | - | 394,658,616.42 |
| Investment income from disposal of wealth management products | 1,604,200.49 | 688,953.43 |
| Total | 634,227,991.02 | 524,214,123.84 |
Other notes:
None
69. Income from net exposure hedging
□Applicable √Not Applicable
70. Income from changes in fair value
√Applicable □Not Applicable
Unit: RMB
| Sources of income from changes in fair value | Amount in the current period | Amount in the previous period |
| Held-for-trading financial assets | -1,332,503.10 | 1,706,102.10 |
| Other non-current financial assets | 8,563,824.94 | -34,661,963.73 |
| Total | 7,231,321.84 | -32,955,861.63 |
Other notes:
None
71. Loss of impairment of credit
√Applicable □Not Applicable
Unit: RMB
| Item | Amount in the current period | Amount in the previous period |
| Bad debt loss of accounts receivable | 6,343,395.56 | 23,224.87 |
| Loss for bad debts of other receivables | 956,299.11 | 2,259,459.03 |
| Total | 7,299,694.67 | 2,282,683.90 |
Other notes:
None
72. Loss of impairment of assets
□Applicable √Not Applicable
73. Income from disposal of assets
√Applicable □Not Applicable
Unit: RMB
| Item | Amount in the current period | Amount in the previous period |
| Income from disposal of intangible assets | 76,006.41 | 6,819,021.38 |
| Income from disposal of property, plant and equipment | - | 1,361,570.34 |
| Total | 76,006.41 | 8,180,591.72 |
Other notes:
None
74. Revenue from non-operating activities
Information of non-operating incomes
√Applicable □Not Applicable
Unit: RMB
| Item | Amount in the current period | Amount in the previous period | Amount recognized in profit or loss of nonrecurring items for the current period |
| Government grants not related to the daily activities of the Company | 2,950.00 | 669,648.00 | 2,950.00 |
| Incomes from liquidated damages | 5,552,161.47 | 1,402,173.09 | 5,552,161.47 |
| Others | 211,260.99 | 2,353,251.88 | 211,260.99 |
| Total | 5,766,372.46 | 4,425,072.97 | 5,766,372.46 |
Government grants recognized in the profit or loss for the current period
√Applicable □Not Applicable
Unit: RMB
| Grant items | Amount in the current period | Previous amount | Asset-related or income-related |
| Tourism development special award | - | 50,000.00 | Income-related |
| Relief fund for small and micro enterprises and individual business households in Shangcheng District | - | 10,000.00 | Income-related |
| Subsidy for booth fee of 2020 Shanghai Gifts Exhibition | - | 56,448.00 | Income-related |
| Special fund reward for 2019 overseas investment from Yiwu Municipal Bureau of Commerce | - | 550,000.00 | Income-related |
| Subsidy from Yiwu Market Development Committee | - | 3,200.00 | Income-related |
| Subsidy for enterprise monitoring from Choucheng Subdistrict | 1,200.00 | - | Income-related |
| Yiwu Comprehensive Bonded Zone Enterprise Development Support Policy | 1,750.00 | - | Income-related |
| Total | 2,950.00 | 669,648.00 |
Other notes:
□Applicable √Not Applicable
75. Non-operating expenses
√Applicable □Not Applicable
Unit: RMB
| Item | Amount in the current period | Amount in the previous period | Amount recognized in profit or loss of nonrecurring items for the current period |
| Total loss for disposal of non-current assets | 637,423.30 | 19,632,275.93 | 637,423.30 |
| Including: loss for disposal of property, plant and equipment | 637,423.30 | 19,632,275.93 | 637,423.30 |
| Loss for disposal of intangible assets | |||
| External donation | 1,107,540.00 | 6,540,313.91 | 1,107,540.00 |
| Water conservancy construction fund | 6.76 | 249,883.92 | - |
| Others | 1,150,958.70 | 214,342.31 | 1,150,958.70 |
| Total | 2,895,928.76 | 26,636,816.07 | 2,895,922.00 |
Other notes:
None
76. Income tax expenses
(1). Overview of income tax expenses
√Applicable □Not Applicable
Unit: RMB
| Item | Amount in the current period | Amount in the previous period |
| Current income tax expenses | 360,286,304.87 | 510,006,312.87 |
| Deferred income tax expenses | -32,761,066.92 | -10,251,293.65 |
| Total | 327,525,237.95 | 499,755,019.22 |
(2). Adjustment process of accounting profits and income tax expenses
√Applicable □Not Applicable
Unit: RMB
| Item | Amount in the current period |
| Profits before tax | 1,656,693,823.97 |
| Income tax expenses calculated at the statutory/applicable tax rate | 414,173,455.99 |
| Impact of different tax rates applied by subsidiaries | -2,092,001.08 |
| Effect of adjusting income tax of previous period | 9,258,148.22 |
| Effect of non-taxable income | -567,975.32 |
| Effect of non-deductible costs, expenses and losses | 5,498,793.94 |
| Effect of using deductible losses of unrecognized deferred income tax assets in previous period | -5,950,758.23 |
| Effect of deductible temporary differences or deductible losses of unrecognized deferred income tax assets in the current period | 64,881,959.24 |
| Profits or losses attributable to joint ventures and associates | -157,676,384.80 |
| Income tax expenses | 327,525,237.95 |
Other notes:
□Applicable √Not Applicable
77. Other comprehensive income
√Applicable □Not Applicable
For details, please refer to Note 57. Other comprehensive income
78. Items of cash flow statement
(1). Other cash receipts relating to operating activities
√Applicable □Not Applicable
Unit: RMB
| Item | Amount in the current period | Amount in the previous period |
| Deposit and margin received | 212,256,986.10 | 164,887,997.67 |
| Government grants received | 63,576,554.04 | 3,573,983.14 |
| Bank deposit interest income received | 177,964,682.68 | 230,212,493.06 |
| Liquidated damages received from market traders | 5,766,372.46 | 1,402,173.09 |
| Yiwugo’s Bank Reserve Fund received | 2,600,157.57 | 1,842,251.21 |
| Received overpaid input tax | 62,799,958.77 | - |
| Others | 443,618.96 | 6,870,248.13 |
| Total | 525,408,330.58 | 408,789,146.30 |
Notes on other cash receipts relating to operating activities:
None
(2). Other cash payments relating to operating activities
√Applicable □Not Applicable
Unit: RMB
| Item | Amount in the current period | Amount in the previous period |
| Major expenses paid | 319,328,171.57 | 365,010,313.02 |
| Repair costs and expenses paid | 120,690,572.43 | 132,298,446.26 |
| Deposit and security paid | 157,057,755.29 | 95,090,779.43 |
| Others | 1,107,540.00 | 1,689,857.57 |
| Total | 598,184,039.29 | 594,089,396.28 |
Notes on other cash payments relating to operating activities:
None
(3). Other cash receipts relating to investing activities
√Applicable □Not Applicable
Unit: RMB
| Item | Amount in the current period | Amount in the previous period |
| Recovered-pending investment refunds | 822,300,000.00 | 43,027,285.60 |
| Advance subsidy for joint venture’s subsidiaries that was recovered from the joint venture party | - | 1,608,852,069.00 |
| Received funding from from the joint ventures and their subsidiaries | 2,924,599,831.00 | 2,775,280,817.96 |
| Receipt of redeemed financing products | - | 6,000,000.00 |
| Cash balance on acquisition date of subsidiary | - | 17,326,086.71 |
| Total | 3,746,899,831.00 | 4,450,486,259.27 |
Notes on other cash receipts relating to investing activities:
None
(4). Other cash payments relating to investing activities
√Applicable □Not Applicable
Unit: RMB
| Item | Amount in the current period | Amount in the previous period |
| Advance for land for proposed joint venture | - | 281,839,499.86 |
| Financial subsidy paid to Tonghui Shangbo | 138,160,000.00 | 1,486,368,548.00 |
| Financial subsidy paid to Handing Shangbo | 17,845,800.00 | 472,144,400.00 |
| Financial subsidy paid to the joint venture in Dubai | 104,456,205.00 | 63,465,484.42 |
| Financial subsidy paid to Gongchen Shangbo | - | 49,000,000.00 |
| Paid the financial assistance for Guoshen Shangbo | 1,372,000,000.00 | - |
| Total | 1,632,462,005.00 | 2,352,817,932.28 |
Other cash paid related to investment activities:
None
(5). Other cash receipts relating to financing activities
□Applicable √Not Applicable
(6). Other cash payments relating to financing activities
√Applicable □Not Applicable
Unit: RMB
| Item | Amount in the current period | Amount in the previous period |
| Acquisition of minority shareholders' equity in subsidiaries | - | 64,460,000.00 |
| Restricted stock cancellation payment | 2,827,300.00 | - |
| Minimum lease payment | 37,531,483.07 | - |
| Total | 40,358,783.07 | 64,460,000.00 |
Other cash paid related to financing activities:
None
79. Supplements to cash flow statement
(1). Supplements to cash flow statement
√Applicable □Not Applicable
Unit: RMB
| Supplements | Amount in the current period | Amount in the previous period |
| 1．Adjust net profits to cash flow from operating activities: | ||
| Net profits | 1,329,168,586.02 | 921,836,055.21 |
| Plus: provision for impairment of assets | - | - |
| Loss of impairment of credit | 7,299,694.67 | 2,282,683.90 |
| Depreciation of fixed assets, depletion of oil and gas assets and depreciation of bearer biological assets | 391,927,445.01 | 391,308,329.57 |
| Amortization of right-of-use assets | 29,280,433.57 | - |
| Amortization of intangible assets | 140,522,789.88 | 129,979,055.25 |
| Depreciation and amortization of investment real estate | 106,638,821.16 | 91,509,152.33 |
| Amortization of long-term prepaid expenses | 62,397,515.62 | 64,667,911.54 |
| Loss from disposal of fixed assets, intangible assets and other long-term assets (gains indicated by “-”) | -76,006.41 | 11,451,684.21 |
| Loss from fixed assets retirement (gains indicated by “-”) | 637,423.30 | - |
| Loss from changes in fair value (gains indicated by “-”) | -7,231,321.84 | 32,955,861.63 |
| Financial expenses (gains indicated by “-”) | 336,909,155.82 | 392,152,088.59 |
| Investment loss (gains indicated by “-”) | -769,582,290.36 | -648,958,950.22 |
| Decrease in deferred income tax assets (increase indicated by “－”) | -36,072,700.05 | -7,112,433.29 |
| Increase in deferred income tax liabilities (decrease indicated by “－”) | -1,705,460.37 | -3,988,508.40 |
| Decrease in inventory (increase indicated by “－”) | -8,180,635.66 | -1,156,397,502.91 |
| Decrease in operating receivables (increase indicated by “－”) | -912,160,213.18 | -538,592,969.66 |
| Increase in operating payables (decrease indicated by “－”) | 1,363,309,270.58 | 1,145,695,804.20 |
| Net cash flow from operating activities | 2,033,082,507.76 | 828,788,261.95 |
| 2．Significant investing and financing activities not involving cash receipt and payment: | ||
| When the joint venture company was established based on the equity of the subsidiary, the original financial subsidy for subsidiary’s prepayment for land was converted to other receivables from the subsidiary of the joint venture | - | 1,545,759,831.00 |
| 3．Net changes in cash and cash equivalents: | ||
| Closing balance of cash | 4,006,468,325.47 | 2,032,642,871.63 |
| Less: opening balance of cash | 2,032,642,871.63 | 3,426,712,549.26 |
| Add: closing balance of cash equivalents | ||
| Less: opening balance of cash equivalents | ||
| Net increase in cash and cash equivalents | 1,973,825,453.84 | -1,394,069,677.63 |
(2). Net cash paid for acquisition of subsidiaries in the current period
□Applicable √Not Applicable
(3). Net cash received from disposal of subsidiaries in the current period
□Applicable √Not Applicable
(4). Composition of cash and cash equivalents
√Applicable □Not Applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| I. Cash | 4,006,468,325.47 | 2,032,642,871.63 |
| In which: cash on hand | 154,264.94 | 292,999.29 |
| Bank deposit that can be used for payment at any time | 4,006,258,722.95 | 2,032,189,759.31 |
| Other monetary capital that can be used for payment at any time | 55,337.58 | 160,113.03 |
| II. Cash equivalents | ||
| Including: bond investments due within three months | ||
| III. Closing balance of cash and cash equivalents | 4,006,468,325.47 | 2,032,642,871.63 |
| Including:cash and cash equivalents with restricted use by the parent company or its subsidiaries | 60.78 | 60.58 |
Other notes:
√Applicable □Not Applicable
Monetary funds with a deposit period of more than three months: Currency: RMB
| Item | Closing balance | Opening balance |
| Negotiated deposits | 825,000,000.00 | 3,580,000,000.00 |
80. Notes to items in statement of changes in owners’ equity
Names of “others” items whose closing balances in the previous year are adjusted and the amountsof adjustments:
□Applicable √Not Applicable
81. Assets with restricted title or right of use
√Applicable □Not Applicable
Unit: RMB
| Item | Closing book value | Reasons for restriction |
| Monetary capital | 60.78 | [Note 1] |
| Long-term equity investment | 102,918,559.00 | [Note 2] |
| Other non-current financial assets | 636,870,392.09 | [Note 2] |
| Total | 739,789,011.87 | / |
Other notes:
Note 1. As of December 31, 2021, bank deposits with a book value of RMB 60.78 (December31, 2020: RMB 60.58) were restricted for ownership or use rights due to being as security depositsfor obtaining commercial housing mortgage loan.
Note 2: As of December 31, 2021, long-term equity investments with a book value of RMB102,918,559.00 (December 31, 2020: RMB 102,918,559.00) and other non-current assets of RMB636,870,392.09 (December 31, 2020: RMB 617,511,352.00) were frozen by Shanghai MunicipalPublic Security Bureau. See Note XIV.1 Important commitments for details.
82. Foreign currency monetary items
(1). Foreign currency monetary items
√Applicable □Not Applicable
Unit: RMB Yuan
| Item | Closing balance in foreign currency | Exchange rate | Closing amount after conversation: RMB Balance |
| Monetary capital | - | - | |
| In which: USD | 5,485,690.70 | 6.3757 | 34,975,118.20 |
| EURO | 285,450.21 | 7.2197 | 2,060,864.88 |
| Rwandan Franc | 10,849,325.00 | 0.0063 | 68,350.75 |
| Dirham | 891,319.05 | 1.7361 | 1,547,419.00 |
| Koruna | 7,967,992.08 | 0.2899 | 2,309,920.90 |
| Accounts receivable | - | - | |
| In which: USD | 14,360,439.00 | 6.3757 | 91,557,850.93 |
| EURO | 1,455,026.65 | 7.2197 | 10,504,855.91 |
| Koruna | 5,076,307.71 | 0.2899 | 1,471,621.61 |
| Other receivables | - | - | - |
| Including: EURO | 5,100.00 | 7.2197 | 36,820.47 |
| Koruna | 31,936,127.00 | 0.2899 | 9,258,283.22 |
| Accounts payable | - | - | - |
| In which: USD | 1,267,239.54 | 6.3757 | 8,079,539.14 |
| Other payables | - | - | - |
| In which: USD | 1,793,978.13 | 6.3757 | 11,437,866.36 |
| EURO | 62,397.91 | 7.2197 | 450,494.19 |
| Koruna | 3,775,500.35 | 0.2899 | 1,094,517.55 |
Other notes:
None
(2). Description of overseas operations, for important overseas operations, also includes
the disclosure of principal overseas place of business, bookkeeping currency and thebasis for selection, and the reason for the change in bookkeeping currency.
□Applicable √Not Applicable
83. Hedging
□Applicable √Not Applicable
84. Government grants
(1). Overview of government grants
√Applicable □Not Applicable
Unit: RMB
| Type | Amount | Presentation | Amount recognized in profit or loss for the current period |
| Yiwu Comprehensive Bonded Zone Enterprise Development Support Policy | 1,750.00 | Revenue from non-operating activities | 1,750.00 |
| Subsidy for enterprise monitoring from Choucheng Subdistrict | 1,200.00 | Revenue from non-operating activities | 1,200.00 |
| Additional deduction of input tax | 6,244,434.23 | Other income | 6,244,434.23 |
| Subsidies for energy saving and consumption reduction | 4,863,474.00 | Other income | 4,863,474.00 |
| Special incentive funds for modern supply chain system innovation | 2,682,704.00 | Other income | 2,682,704.00 |
| Industrial Cluster Cross-border E-commerce Development Pilot Subsidy | 1,879,093.83 | Other income | 1,879,093.83 |
| Interest subsidy for the international exhibition center construction fund | 1,154,807.04 | Other income | 1,154,807.04 |
| "3 refunds and 3 rewards" | 1,084,878.00 | Other income | 1,084,878.00 |
| Government subsidy for service industry cluster for 2011 | 266,666.64 | Other income | 266,666.64 |
| Refund of social security contribution | 14,595.20 | Other income | 14,595.20 |
| Others | 5,366,295.07 | Other income | 5,366,295.07 |
| Total | 23,559,898.01 | 23,559,898.01 |
(2). Refund of government grants
□Applicable √Not Applicable
Other notes:
None
85. Others
□Applicable √Not Applicable
VIII. Changes in consolidation scope
1. Mergers of enterprises not under common control
□Applicable √Not Applicable
2. Mergers of the enterprises under common control
□Applicable √Not Applicable
3. Reverse acquisition
□Applicable √Not Applicable
4. Disposal of subsidiaries
Has the Group lost control upon a single disposal of investment in a subsidiary?
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
5. Changes in consolidation scope for other reasons
Changes in the consolidation scope for other reasons (e.g. new establishment of subsidiaries,liquidation of subsidiaries, etc.) and the related information:
√Applicable □Not Applicable
The Company established a subsidiary, Zhejiang China Commodities City Group CommercialFactoring Co., Ltd. in the current period.
6. Others
□Applicable √Not Applicable
IX. Equity in Other Entities
1. Equity in subsidiaries
(1). Composition of the enterprise Group
√Applicable □Not Applicable
| Subsidiary Name | Main place of business | Place of registration | Business | Shareholding ratio (%) | Acquisition Method | |
| Direct | Indirect | |||||
| Yiwu China Commodities City Logistics and Warehousing Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Service | 100 | Establishment | |
| Yiwu Commodities City Gonglian Property Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Real estate | 100 | Establishment | |
| Yiwu China Commodities City Exhibition Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Service | 100 | Establishment | |
| Yiwu China Commodities City Advertising Co., Ld. | Yiwu, Zhejiang | Yiwu, Zhejiang | Advertising | 100 | Establishment | |
| Yiwu China Commodities City Information Technology Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | IT | 100 | Establishment | |
| Yiwu China Commodity City RMB and Foreign Currency Exchange Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Service | 100 | Establishment | |
| Hangzhou Shangbo Nanxing Property Co., Ltd. | Hangzhou, Zhejiang | Hangzhou, Zhejiang | Real estate | 100 | Establishment | |
| Yiwu China Commodities City Payment Network Technology Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | IT | 100 | Establishment | |
| Yiwu China Commodities City Credit Investigation Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Service | 85 | Establishment | |
| Haicheng Yiwu China Commodities City Investment Development Co., Ltd. | Haicheng, Liaoning | Haicheng, Liaoning | Real estate | 95 | Establishment | |
| Zhejiang Yiwugou E-commerce Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | E-commerce | 51 | Establishment | |
| Yiwu Shangbo Property Co., Ltd. | Hangzhou, Zhejiang | Hangzhou, Zhejiang | Real estate | 100 | Establishment | |
| Yiwu China Commodities City Import and Export Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Wholesale | 100 | Establishment | |
| Yiwu China Commodities City Supply Chain Management Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Service | 100 | Establishment | |
| Yiwu China Commodities City Tourism Development | Yiwu, Zhejiang | Yiwu, Zhejiang | Lease and business service | 100 | Establishment | |
| Co., Ltd. | ||||||
| Yiwu China Commodities City Financial Holdings Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Service | 100 | Establishment | |
| Yiwu China Commodity City (Germany) Co., Ltd. | Frankfurt, Germany | Frankfurt, Germany | Service | 100 | Establishment | |
| Yiwu International Trade Comprehensive Service Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Wholesale | 60 | Establishment | |
| Yiwu Aiximao Supply Chain Management Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Service | 100 | Establishment | |
| Yiwu China Commodities City (Hong Kong) International Trade Co., Ltd. | Hong Kong, China | Hong Kong, China | Wholesale | 100 | Establishment | |
| Ningxia Yiwu China Commodity City Supply Chain Management Co., Ltd. | Shizuishan, Ningxia | Shizuishan, Ningxia | Service | 100 | Establishment | |
| Yiwu China Commodities City Overseas Investment and Development Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Wholesale | 100 | Establishment | |
| Yiwu China Commodities City Commerce and Trade Service Training Center Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Education | 100 | Establishment | |
| Yiwu China Commodities City Assets Operation and Management Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Lease and business service | 100 | Establishment | |
| Zhejiang Yindu Hotel Management Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Lease and business service | 100 | Establishment | |
| Hong Kong Better Silk Road Co., Ltd. | Hong Kong, China | Hong Kong, China | Service | 100 | Establishment | |
| BETTER SILK ROAD FZE | Dubai, UAE | Dubai, UAE | Service | 100 | Establishment | |
| BETTER SILK ROAD RWANDA Ltd | Kigali, Rwanda | Kigali, Rwanda | Service | 100 | Establishment | |
| Yiwu China Commodities City Research Institute Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Business service | 100 | Establishment | |
| Yiwu Comprehensive Bonded Zone Operation and Management Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Business service | 100 | Establishment | |
| Yiwu China Commodities City Big Data Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Software and Information Technology Service | 100 | Establishment |
| Industry | ||||||
| Yiwu Huanqiuyida Logistics Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Multimodal transport and transportation agency | 60 | Establishment | |
| Yiwu China Commodities City Internet Financial Information Service Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Service | 100 | Incorporation+acquisition | |
| Zhejiang Huajie Investment and Development Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Commercial services | 96.4 | Incorporation+acquisition | |
| European Huajie Investment Development Co., Ltd. | Prague, Czech Republic | Prague, Czech Republic | Commercial services | 96.4 | Incorporation+acquisition | |
| Zhejiang China Commodities City Group Commercial Factoring Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Service | 60 | 40 | Establishment |
Explanation for the difference between the shareholding ratio and voting right ratio in a subsidiary:
None
Basis for holding half or less voting rights in but still controlling an investee, and holding more thanhalf of the voting rights in but not controlling an investee:
None
Basis for controlling important structured entities included in the consolidation scope:
None
Basis for determining whether a company is an agent or a principal:
None
Other notes:
None
(2). Important non-wholly-owned subsidiaries
√Applicable □Not Applicable
Unit: RMB
| Name of subsidiary | Shareholding ratio of minority shareholders . | Profits or losses attributable to minority shareholders in the current period | Dividends declared to be distributed to minority shareholders for the current period | Closing balance of minority interest |
| Zhejiang Yiwugou E-commerce Co., Ltd. | 49% | 3,231,306.40 | - | 44,817,381.94 |
| Haicheng Company | 5% | -7,342,519.03 | - | -42,993,044.00 |
Explanation for the difference between the shareholding ratio and voting right ratio of minorityshareholders in a subsidiary:
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
(3). Major financial information of important non-wholly-owned subsidiaries
√Applicable □Not Applicable
Unit: RMB10,000
| Name of subsidiary | Closing balance | Opening balance | ||||||||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Zhejiang Yiwugou E-commerce Co., Ltd. | 11,899.73 | 900.21 | 12,799.94 | 3,653.53 | - | 3,653.53 | 10,131.63 | 1,035.94 | 11,167.57 | 2,680.61 | - | 2,680.61 |
| Haicheng Company | 126,423.87 | 98,154.04 | 224,577.91 | 310,564 | - | 310,564 | 124,510.56 | 105,804.70 | 230,315.26 | 301,683.12 | 0.26 | 301,683.38 |
| Name of subsidiary | Amount in the current period | Amount in the previous period | ||||||
| Operating revenue | Net profits | Total comprehensive income | Cash flow from operating activities | Operating revenue | Net profits | Total comprehensive income | Cash flow from operating activities | |
| Zhejiang Yiwugou E-commerce Co., Ltd. | 4,747.83 | 659.45 | 659.45 | -2,891.61 | 4,620.58 | 668.86 | 668.86 | 6,298.22 |
| Haicheng Company | 898.01 | -14,685.04 | -14,685.04 | 11,694.15 | 546.63 | -13,339.37 | -13,339.37 | -5,460.25 |
Other notes:
None
(4). Significant restrictions on the use of enterprise Group’s assets and the settlement ofenterprise Group’s debts
□Applicable √Not Applicable
(5). Financial or other supports provided to structured entities included in the scope ofconsolidated financial statements
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
2. Transactions in which the Group’s share of owners’ equity in a subsidiary changes andthe Group still controls the subsidiary
□Applicable √Not Applicable
3. Equity in joint ventures or associated enterprises
√Applicable □Not Applicable
(1). Important joint ventures or associated enterprises
√Applicable □Not Applicable
Unit: RMB
| Name of joint venture or associated enterprise | Main place of business | Place of registration | Business | Shareholding ratio (%) | Accounting treatment method of investment in the joint venture or associate | |
| Direct | Indirect | |||||
| Joint venture | ||||||
| Yiwu Shanglv Investment Development Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Real estate | 49 | Equity method | |
| Yiwu Huishang Redbud Capital Management Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Service | 20 | Equity method | |
| Yiwu Rongshang Property Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Real estate | 49 | Equity method | |
| Yiwu Chuangcheng Property Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Real estate | 24 | Equity method | |
| Yiwu Guoshen Shangbo Property Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Real estate | 49 | Equity method | |
| Associated enterprise | ||||||
| Hangzhou Binjiang Shangbo Property Development Co., Ltd. | Hangzhou, Zhejiang | Hangzhou, Zhejiang | Real estate | 49 | Equity method | |
| Yiwu Huishang Redbud Equity Investment Co., Ltd. (Note 4) | Yiwu, Zhejiang | Yiwu, Zhejiang | Commercial services | 10.42 | Equity method | |
| Zhejiang Chouzhou Financial Lease Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Service | 26 | Equity method | |
| Yiwu Huishang Redbud Phase II Investment Partnership (LLP) (Note 5) | Yiwu, Zhejiang | Yiwu, Zhejiang | Lease and business service | 9.43 | Equity method | |
| Yiwu Hongyi Equity Investment Fund Partnership | Yiwu, Zhejiang | Yiwu, Zhejiang | Service | 49.98 | Equity method | |
| Pujiang Lvgu Property Co., Ltd. | Pujiang, Zhejiang | Pujiang, Zhejiang | Real estate | 49 | Equity method | |
| Yiwu China Commodities City Property Development Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Real estate | 49 | Equity method |
Explanation for the difference between the shareholding ratio and voting right ratio in a joint ventureor associate:
None
Bases for holding less than 20% of the voting rights but having significant influence, or holding 20%or more of the voting rights but not having significant influence:
Note 4: The Company holds 10.42% (2020: 10.42%) of equity of Yiwu Huishang RedbudEquity Investment Co., Ltd. (hereinafter referred to as "Redbud Equity Investment"), but regards itas a joint venture of the Company. According to Redbud Investment’s articles of association, it isengaged in investing and its important financial and operating decision-making activities are to pickand manage investment projects, which have been fully entrusted to the Company’s joint ventureYiwu Huishang Redbud Capital Management Co., Ltd. (“Redbud Capital”). Redbud Capital picksand manages investment projects via its investment decision-making committee. Except for specialinvestment matters, which are subject to the resolution of Redbud Investment’s board of directors,other important financial and operating decision-making activities are conducted by Redbud Capitalon the behalf of Redbud Investment. Therefore, the Company was able to exercise significantinfluence on Redbud Investment in which the Company held 10.42% of total equity.Note 5: The Company holds 9.43% (9.43% in 2020) equity in Yiwu Huishang Redbud Phase IIInvestment Partnership (limited partnership) (“Redbud Phase II”), but regards it as an associatedcompany of the Company. According to Redbud Phase II’s articles of association, it is engaged ininvesting and its important financial and operating decision-making activities are to pick andmanage investment projects, which have been fully entrusted to the Company’s joint ventureRedbud Capital. Redbud Capital picks and manages investment projects via its investmentdecision-making committee. Except for special investment matters, which are subject to theresolution of Redbud Phase II’s board of directors, other important financial and operating decision-making activities are conducted by Redbud Capital on the behalf of Redbud Phase II. Therefore,the Company can exert significant influence on Redbud Phase II in which it holds 9.43% equity.
(2).Main financial information of important joint ventures
√Applicable □Not Applicable
Unit: RMB
| Closing balance/amount in the current period | Opening balance/amount in the previous period | |
| Yiwu Shanglv | Yiwu Shanglv | |
| Current assets | 94,995,453.50 | 187,602,175.56 |
| In which: cash and cash equivalents | 17,204,162.54 | 24,893,904.53 |
| Non-current assets | 1,332,618,603.76 | 1,369,948,370.68 |
| Total assets | 1,427,614,057.26 | 1,557,550,546.24 |
| Current liabilities | 375,275,386.49 | 420,643,904.92 |
| Non-current liabilities | 236,957,211.08 | 356,957,211.08 |
| Total liabilities | 612,232,597.57 | 777,601,116.00 |
| Minority interest | ||
| Shareholders’ equity attributable to parent company | 815,381,459.69 | 779,949,430.24 |
| Share of net assets calculated based shareholding ratio | 399,536,915.25 | 382,175,220.82 |
| Adjustments | -15,868,561.04 | -16,344,463.91 |
| --Goodwill | - | - |
| --unrealized profits of internal transactions | -15,868,561.04 | -16,344,463.91 |
| --Others | - | - |
| Book value of equity investment in joint ventures | 383,668,354.21 | 365,830,756.91 |
| Operating revenue | 235,111,114.62 | 209,478,335.98 |
| Financial expenses | 24,364,607.11 | 25,646,329.54 |
| Net profits | 35,438,822.77 | 35,139,746.38 |
| Total comprehensive income | 35,438,822.77 | 35,139,746.38 |
| Dividends received from joint ventures this year | - | - |
Other statementsNone
(3).Main financial information of important associates
√Applicable □Not Applicable
Unit: RMB10,000
| Closing balance/amount in the current period | Opening balance/amount in the previous period | |||||||||||||
| Binjiang Shangbo | Chouzhou Financial Lease | Hongyi Fund | CCCP | Pujiang Lvgu | Yiwu Rongshang Property | Yiwu Chuangcheng Property | Binjiang Shangbo | Chouzhou Financial Lease | Hongyi Fund | CCCP | Pujiang Lvgu | Yiwu Rongshang Property | Yiwu Chuangcheng Property | |
| Current assets | 11,002.00 | 77,805.80 | 21,730.37 | 1,492,712.71 | 122,804.10 | 564,093.80 | 385,685.30 | 44,924.53 | 72,933.41 | 18,713.03 | 755,070.00 | 169,861.53 | 754,838.27 | 487,362.79 |
| Non-current assets | 69.23 | 1,356,968.91 | 155,970.63 | 42,919.44 | 459.02 | 8,395.40 | 5,324.96 | 104.99 | 1,139,961.66 | 119,447.65 | 40,293.49 | 1,300.59 | 10,377.57 | 7,101.31 |
| Total assets | 11,071.23 | 1,434,774.71 | 177,701.00 | 1,535,632.15 | 123,263.12 | 572,489.20 | 391,010.26 | 45,029.52 | 1,212,895.07 | 138,160.68 | 795,363.49 | 171,162.12 | 765,215.84 | 494,464.10 |
| Current liabilities | 3,263.30 | 1,020,585.17 | 37.71 | 915,862.90 | 31,456.60 | 528,124.40 | 354,317.21 | 12,787.62 | 945,311.98 | 140.31 | 467,243.03 | 88,160.96 | 760,395.30 | 453,367.00 |
| Non-current liabilities | - | 250,335.36 | - | 49,089.63 | - | - | - | - | 124,403.19 | - | 20,902.58 | 7,441.37 | - | 35,900.00 |
| Total liabilities | 3,263.30 | 1,270,920.53 | 37.71 | 964,952.53 | 31,456.60 | 528,124.40 | 354,317.21 | 12,787.62 | 1,069,715.17 | 140.31 | 488,145.61 | 95,602.33 | 760,395.30 | 489,267.00 |
| Shareholders’ equity attributable to parent company | 7,807.93 | 163,854.17 | 177,663.28 | 570,679.62 | 91,806.52 | 44,364.80 | 36,693.05 | 32,241.90 | 143,179.91 | 138,020.37 | 307,217.88 | 75,559.79 | 4,820.55 | 5,197.10 |
| Share of net assets calculated based shareholding ratio | 3,825.88 | 42,602.08 | 88,796.11 | 279,633.01 | 44,985.19 | 21,738.75 | 8,806.33 | 15,798.53 | 37,226.78 | 68,975.68 | 150,536.76 | 37,024.30 | 2,362.07 | 1,247.31 |
| Adjustments | -378.26 | - | -8.88 | -3,939.17 | 942.95 | - | - | -383.31 | -94.71 | - | -3,379.46 | 942.95 | -130.16 | -102.83 |
| --unrealized profits of internal transactions | -378.26 | - | -8.88 | -3,939.17 | 942.95 | - | - | -383.31 | -94.71 | - | -3,379.46 | 942.95 | -130.16 | -102.83 |
| Book value of equity investment in joint ventures | 3,447.62 | 42,602.08 | 88,787.23 | 275,693.84 | 45,928.14 | 21,738.75 | 8,806.33 | 15,415.23 | 37,132.07 | 68,975.68 | 147,157.30 | 37,964.25 | 2,231.91 | 1,144.48 |
| Operating revenue | 3,673.67 | 43,115.27 | 177.83 | 138,101.44 | 90,893.54 | 272,636.85 | 199,877.07 | 9,770.28 | 45,121.82 | 944.83 | 19,133.91 | 19,704.98 | 384.12 | 101.10 |
| Net profits | 3,566.03 | 20,984.32 | 9,749.03 | 14,621.40 | 16,246.73 | 39,544.26 | 31,495.95 | 3,463.97 | 15,636.61 | 1,872.25 | -1,853.66 | 3,561.41 | -973.50 | -2,330.19 |
| Total comprehensive income | 3,566.03 | 20,984.32 | 9,749.03 | 14,621.40 | 16,246.73 | 39,544.26 | 31,495.95 | 3,463.97 | 15,636.61 | 1,872.25 | -1,853.66 | 3,561.41 | -973.50 | -2,330.19 |
| Dividend on associates received in the current year | 13,720 | |||||||||||||
Other statementsNone
(4). Summary financial information of unimportant joint ventures and associates
√Applicable □Not Applicable
Unit: RMB
| Closing balance/amount in the current period | Opening balance/amount in the previous period | |
| Joint ventures: | ||
| Total book value of investments | 56,813,304.76 | 15,284,720.18 |
| Total amounts of the following items calculated based on shareholding ratio | ||
| --Net profits | 23,678,584.58 | -19,726,695.26 |
| --Other comprehensive income | ||
| --Total comprehensive income | ||
| Associates: | ||
| Total book value of investments | 461,933,497.77 | 351,543,008.12 |
| Total amounts of the following items calculated based on shareholding ratio | ||
| --Net profits | 25,663,075.10 | -6,084,558.45 |
| --Other comprehensive income | ||
| --Total comprehensive income | ||
Other statementsNone
(5). Restrictions on the ability of joint ventures or associates to transfer money to theCompany
□Applicable √Not Applicable
(6). Excess losses of joint ventures or associates
□Applicable √Not Applicable
(7). Unrecognized commitments relating to investment in joint ventures
□Applicable √Not Applicable
(8). Contingent liabilities relating to investment in joint ventures or associates
□Applicable √Not Applicable
4. Important joint operations
□Applicable √Not Applicable
5. Equity in structured entities not included in the consolidated financial statementsNotes on structured entities not included in the consolidated financial statements:
□Applicable √Not Applicable
6. Others
□Applicable √Not Applicable
X. Risks associated with financial instruments
√Applicable □Not Applicable
1. Categorization of financial instruments
The book values of financial instruments on the balance sheet date are as follows:
2021Financial assets
| Financial assets that are measured by fair value and of which the changes in fair value are recognized in the profit or loss for the current period | Measured at amortized cost | measured at fair value and whose changes are included in other comprehensive income | Total | ||||
| Requirements in the standard | Designated | ||||||
| Monetary capital | - | 4,831,468,386.25 | - | 4,831,468,386.25 | |||
| Held-for-trading financial assets | 75,375,083.21 | - | - | 75,375,083.21 | |||
| Accounts receivable | - | 185,237,530.89 | - | 185,237,530.89 | |||
| Other receivables | - | 1,355,924,282.96 | - | 1,355,924,282.96 | |||
| Other current assets | - | 2,780,294.82 | - | 2,780,294.82 | |||
| Long-term receivables | - | 222,307,363.40 | - | 222,307,363.40 | |||
| Other equity instruments investment | - | - | 642,187,968.77 | 642,187,968.77 | |||
| Other non-current financial assets | 1,524,819,255.41 | - | - | 1,524,819,255.41 | |||
| 1,600,194,338.62 | 6,597,717,858.32 | 642,187,968.77 | 8,840,100,165.70 |
| Financial liabilities | Other financial liabilities | ||
| Short-term borrowings | 942,736,046.04 | ||
| Accounts payable | 493,360,429.02 | ||
| Other payables | 1,908,742,835.15 | ||
| Non-current liabilities due within one year | 3,664,241,923.08 | ||
| Other current liabilities | 3,081,384,800.50 | ||
| Long-term borrowings | 771,250,000.00 | ||
| Lease liabilities | 205,942,673.93 | ||
| 11,067,658,707.72 |
2020Financial assets
| Financial assets that are measured by fair value and of which the changes in fair value are recognized in the profit or loss for the current period | Measured at amortized cost | measured at fair value and whose changes are included in other comprehensive income | Total | ||||
| Requirements in the standard | Designated | ||||||
| Monetary capital | - | 5,612,642,932.21 | - | 5,612,642,932.21 | |||
| Held-for-trading financial assets | 51,712,734.31 | - | - | 51,712,734.31 | |||
| Accounts receivable | - | 153,573,476.86 | - | 153,573,476.86 | |||
| Other receivables | - | 2,708,478,136.25 | - | 2,708,478,136.25 | |||
| Other current assets | - | 3,279,187.50 | - | 3,279,187.50 | |||
| Long-term receivables | - | 126,756,573.81 | - | 126,756,573.81 | |||
| Other equity instruments investment | - | - | 662,256,342.79 | 662,256,342.79 | |||
| Other non-current financial assets | 1,523,925,249.81 | - | - | 1,523,925,249.81 | |||
| 1,575,637,984.12 | 8,604,730,306.63 | 662,256,342.79 | 10,842,624,633.54 |
| Financial liabilities | Other financial liabilities | ||
| Short-term borrowings | 1,257,179,389.40 | ||
| Accounts payable | 636,463,802.23 |
| Other payables | 1,908,742,835.15 | ||
| Non-current liabilities due within one year | 1,315,026,574.43 | ||
| Other current liabilities | 3,008,141,460.22 | ||
| Long-term borrowings | 282,000,000.00 | ||
| Bonds payable | 3,552,161,709.68 | ||
| 11,067,658,707.72 |
2. Risks associated with financial instruments
The risks associated with financial instruments faced by the Group in regular activitiesmainly include credit risk, liquidity risk and market risk. The main financial instrumentsof the Group include cash, borrowings from banks, bonds payable and commercialpapers payable. Those instruments are used mainly to finance the operation of theGroup. The Group has lots of other financial assets and liabilities directly arising fromoperation, such as accounts receivable, other receivables, accounts payable and otherpayables. The risks associated with those financial instruments and the riskmanagement strategy taken by the Group to reduce those risks are stated as follows.
Credit risk
The Group only deals with the recognized third parties with good reputation. Accordingto its policy, the Group needs to carry out credit review on all clients who require todeal with the Group on credit. In addition, the Group keeps monitoring the balance ofaccounts receivable to ensure it will not face any material bad debt risk. For thetransactions settled other than in the functional currency of related business entities,unless with specific approval of the Group’s credit control department, the Group willnot provide the conditions for dealing on credit. The Group also faces credit risks dueto the provision of financial guarantees. See Note XIV. 2 for details.
As the counterparties to the transactions of cash are banks with good reputation andhigh credit ratings, the credit risk of those financial instruments is relatively low.
The Group’s other financial assets include cash, debt investment, other receivablesand certain derivatives, the credit risk of which is sourced from default by thecounterparties, and the maximum risk exposure is equal to the book value of thoseinstruments.
As the clients from which the Group’s accounts receivable are receivable are scatteredin different sectors and industries, there’s no material credit risk concentrated withinthe Group. The Group does not have any collaterals or other credit enhancements forthe balance of its accounts receivable.
See Notes VII. 5 and 8 for quantitative data on the Group's credit risk exposure inrelation to receivables and other receivables.
Criteria for significant increase in credit riskThe Group evaluates, on each balance sheet date, whether the credit risk of relatedfinancial instruments has increased significantly since the initial recognition thereof. Indetermining whether the credit risk of a financial instrument has increased significantlysince the initial recognition thereof, the Group takes into account the reasonable andwell-grounded information that is accessible without unnecessary extra costs orefforts, including the qualitative and quantitative analyses based on the Group’shistorical data, external credit risk rating and forward-looking information. The Groupcompares the risk of financial instruments defaulting on the balance sheet date andthe risk of them defaulting on the date of initial recognition based on an individualfinancial instrument or a Group of financial instruments with similar credit riskcharacteristics to determine the changes in anticipated default risk of the financialinstrument(s) within the duration thereof.
If a financial instrument meets one or more of the following quantitative or qualitativecriteria, the Group will determine that its credit risk has increased significantly:
（1） The main quantitative criterion is that its probability of default within the
remaining duration on the reporting date rises by a certain margin from that at itsinitial recognition;
（2） The main qualitative criterion is that the debtor has materially adverse changes in
business or financial conditions or is on the warning list of clients.
Definition of the assets whose credit has been impairedIn order to determine whether the credit of an asset has been impaired, the Groupadopts the criteria consistent with its internal credit risk management goal for relatedfinancial instruments and also takes into account the quantitative and qualitativeindicators. The Group mainly considers the following factors while assessing whetherthe credit of a debtor has been impaired:
（1） the issuer or debtor suffers material financial difficulty;
（2） the debtor is in breach of contract, such as breach in interest payment,
principal repayment or overdue payment;
（3） the creditor makes a compromise to the debtor which it would in no case make,
based on the economic or contract considerations in connection with thedebtor’s financial difficulty;
（4） the debtor is very likely to go bankrupt or enter into other financial
reorganizations;
（5） the financial difficulty of the issuer or debtor results in the disappearance of
the active market of the financial asset;
（6） a financial asset is purchased or derived at a large discount and the discount
points to the fact of credit loss having been incurred.
The credit impairment of financial assets may be caused by multiple events togetherand may not necessarily be caused by an individually identifiable event.
Measurement parameters of expected credit lossDepending on whether credit risk has increased significantly and whether credit hasbeen impaired, the Group makes impairment provisions for the expected credit lossesof different assets within 12 months or the entire duration. The key parameters ofexpected credit loss include the probability of default, loss given default and defaultrisk exposure. The Group has built the models of probability of default, loss givendefault and default risk exposure based on the quantitative analysis of historical data(e.g. rating of counterparties, form of guarantee and category of collaterals or pledges,form of repayment) and forward-looking information.
The related definitions are as follows:
（1） The probability of default refers to the possibility that the debtor will be unable to
fulfill its payment obligations in the next 12 months or throughout the remainingduration. The Group adjusts the probability of default based on the results of theexpected credit loss model and with forward-looking information included toreflect the debtors’ probability of default under the current macro economicenvironment.
（2） The default loss rate refers to the Group’s expectation on the extent of losses
incurred due to the default risk exposure. The loss given default varies with thetype of counterparty, the form and priority of claims and collaterals. The lossgiven default is the percentage of risk exposure loss at the time of default and iscalculated based on the coming 12 months or the entire remaining duration.
（3） The default risk exposure refers to the amount that the Group should pay out
when a default occurs in the next 12 months or throughout the remainingduration.
The determination of significant increase in credit risk and the calculation of expectedcredit loss both involve forward-looking information. The Group identifies the keyeconomic indicators that affect the credit risk and expected credit loss of various typesof businesses through the analysis of historical data.
The influence of those economic indicators on the probability of default and loss givendefault varies with the type of business. The Group predicts those indicators on aquarterly basis based on experts’ judgments and determines their influence on theprobability of default and loss given default through regression analysis.
The Group makes impairment provisions for the expected credit loss of accountsreceivable and other receivables within the coming 12 months with the simplifiedmethod and general method respectively. Please refer to Notes VII. 5 and 8 for details.
Liquidity risk
The Group manages the cash shortage risk with the cyclical liquidity plan tool. The toolconsiders not only the maturity dates of financial instruments but also the estimatedcash flows arising from the operation of the Group.
The Group aims to make use of such financing instruments as bank loans, commercialpapers, MTNs, corporate bonds and long-term borrowings to maintain the balancebetween the continuity and flexibility of financing. As of December 31, 2021, 87.59%(December 31, 2020: 66.99%) of the Group's debts would be due within one year.The following table summarizes the analysis on the due day of financial liabilities basedon non-discounted contractual cash flows:
2021
| Item | At call | 1-3 months | 3 months-1 year (1 year inclusive) | 1 year - 5 years (5 years inclusive) | Above 5 years | Total |
| Short-term borrowings | 2,580,651.41 | 253,953,316.72 | 702,138,696.23 | - | - | 958,672,664.36 |
| Accounts payable | 433,048,081.66 | 60,312,347.36 | - | - | - | 493,360,429.02 |
| Other payables | 1,337,240,761.48 | - | - | 571,310,673.67 | - | 1,908,934,235.15 |
| Other current liabilities | 4,304,034.67 | - | 3,064,041,095.89 | - | - | 3,068,345,130.56 |
| Non-current liabilities due within one year | 326,666.67 | 50,424,666.67 | 3,639,370,038.05 | - | - | 3,690,121,371.39 |
| Long-term borrowings | 2,178,645.83 | 4,357,291.67 | 19,607,812.50 | 785,678,164.58 | - | 811,821,914.58 |
| Total | 1,779,678,841.72 | 369,047,622.42 | 7,425,157,642.67 | 1,356,988,838.25 | - | 10,931,064,345.06 |
2020
| Item | At call | 1-3 months | 3 months-1 year (1 year inclusive) | 1 year - 5 years (5 years inclusive) | Above 5 years | Total |
| Short-term borrowings | 3,043,884.75 | 704,443,269.49 | 559,256,951.23 | - | - | 1,266,744,105.47 |
| Accounts payable | 538,556,910.03 | 97,906,892.20 | - | - | - | 636,463,802.23 |
| Other payables | 1,168,708,392.46 | - | - | 477,637,169.16 | - | 1,646,345,561.62 |
| Other current liabilities | 4,131,670.37 | 1,002,071,232.88 | 2,012,205,479.45 | - | - | 3,018,408,382.70 |
| Non-current liabilities due within one year | 980,000.00 | 51,731,333.33 | 1,285,433,398.48 | - | - | 1,338,144,731.81 |
| Long-term borrowings | 868,333.33 | 1,736,666.67 | 7,815,000.00 | 298,671,166.67 | - | 309,091,166.67 |
| Bonds payable | - | - | 141,930,000.00 | 3,588,613,260.27 | - | 3,730,543,260.27 |
| Total | 1,716,289,190.94 | 1,857,889,394.57 | 4,006,640,829.16 | 4,364,921,596.10 | - | 11,945,741,010.77 |
Market risks
Interest rate risk
The risk of changes in market interest rates faced by the Group is mainly related to theGroup's long-term liabilities at floating interest rates.
The Group manages interest costs by maintaining an appropriate combination of fixed-rate debts and variable-rate debts. In the long-term debts of the Group as of December31, 2021, there are long-term loans of RMB 282 million in total. The interest rate isadjusted based on the benchmark loan interest rate on that day at the end of eachyear, and will not be adjusted in the middle of the year. Therefore, the managementbelieves that the risk of changes in market interest rates is relatively low.
Foreign exchange rate riskThe Group faces trading exchange rate risks. Such risks are caused by sales orpurchases made by certain business units in currencies other than their bookkeepingcurrency. 0.86% (2020: 3%) of the Group's sales in the current period weredenominated in a currency other than the functional currency of the operating unitwhere the sales occurred, while 99% (2020: 98%) of the costs were denominated inthe functional currency of the operating unit. Considering the Group’s short time ofinventory and timely collection of accounts receivable, the management believe that itsforeign exchange rate risk is relatively low.
Price risk of equity instrument investmentsThe price risk of equity instrument investments refers to the risk of the fair value of
equity securities decreasing due to the changes in stock indices and value of individual
securities. As of December 31, 2021, the Group was exposed to the price risk of equity
instrument investments arising from the individual equity instrument investments
classified as the financial instruments that are measured by fair value and of which the
changes in fair value are recognized in income in current period (Note VII. 2) or
recognized in other comprehensive income (Note VII. 18). The listed equity instruments
that were invested and held by the Group were listed on the Shanghai Stock Exchange
and the Shenzhen Stock Exchange, respectively,the determination is made through
discounting and adjustment using the trading prices of similar circulating stocks of the
same listed company on the balance sheet date, combined with liquidity.
The market stock indexes of the following stock exchanges at the closing point of thetrading day that is closest to the balance sheet date, and their respective highest andlowest closing points during the year are as follows:
At the end of 2021 2021 At the end of 2020 2020Highest/lowest Highest/lowestSZSE-A Share Index 2,648 2,691/2,229 2,438 2,442/1,683SSE-A Share Index 3,814 3,912/3,472 3,640 3,640/2,788
The following table indicates the sensitivity of the Group’s net profit and loss and othercomprehensive income after tax to the change each 10% of the fair value of equityinstrument investment (based on the book value on the balance sheet date) under theassumption that all other variables remain unchanged.
2021
| Equity instrument investment Book value | Net profit or loss | Other comprehensive income net after tax | Total shareholders' equity | |
| Equity instrument investment | increase/(decrease) | increase/(decrease) | increase/(decrease) | |
| Fair value increase/decrease by10% |
| Shenzhen - Investment in the equity instruments that are measured by fair value and of which the changes in fair value are recognized in other comprehensive income | 642,187,968.77 | - | 48,164,097.66 | 48,164,097.66 |
| Shanghai - Equity instrument investment at fair value through profit or loss | 50,375,083.20 | 3,778,131.24 | - | 3,778,131.24 |
2020
| Equity instrument investment Book value | Net profit or loss | Other comprehensive income net after tax | Total shareholders' equity | |
| Equity instrument investment | increase/(decrease) | increase/(decrease) | increase/(decrease) | |
| Fair value increase/decrease by10% | ||||
| Shenzhen - Investment in the equity instruments that are measured by fair value and of which the changes in fair value are recognized in other comprehensive income | 662,256,342.79 | 49,669,225.71 | 49,669,225.71 | |
| Shanghai - Equity instrument investment at fair value through profit or loss | 51,712,734.31 | 3,878,455.07 | - | 3,878,455.07 |
3. Capital management
The main objective of the Group in capital management is to ensure the Group’s ability
to continue operations and maintain a healthy capital ratio to support its businessdevelopment and maximize the values for shareholders.
The Group manages and adjusts its capital structure based on the changes in theeconomic situation and the risk characteristics of related assets. To maintain or adjustthe capital structure, the Group may adjust the distribution of profits to shareholders,return capital contribution to shareholders or issue new shares. The Group is not subjectto external mandatory capital requirements. In 2021 and 2020, there was no change incapital management objectives, policies or procedures.XI. Disclosure of fair value
1. Closing fair value of the assets and liabilities measured by fair value
√Applicable □Not Applicable
Unit: RMB
| Item | Closing fair value | |||
| Level 1 fair value | Level 2 fair value | Level 3 fair value | Total | |
| I. Continuous fair value measurement | ||||
| (1) Held-for-trading financial assets | 50,375,083.20 | 25,000,000.00 | 75,375,083.20 | |
| 1. Financial assets that are measured at fair value and whose changes are included in the current profit and loss | 50,375,083.20 | 25,000,000.00 | 75,375,083.20 | |
| (2) Investment in equity instruments | 50,375,083.20 | 50,375,083.20 | ||
| (4) Bank wealth management | 25,000,000.00 | 25,000,000.00 | ||
| products | ||||
| (3) Other equity instruments investment | 642,187,968.77 | 642,187,968.77 | ||
| (vi) Other non-current financial assets | - | 894,066,000.44 | 630,753,254.97 | 1,524,819,255.41 |
| Total assets continuously measured by fair value | 692,563,051.97 | 894,066,000.44 | 655,753,254.97 | 2,242,382,307.38 |
2. Basis for determining the market prices of the items continuously and non-continuouslymeasured by Level 1 fair value
√Applicable □Not Applicable
The Group's continuous first-level fair value measurement items mainly include listed equityinstruments, whose fair value is determined based on the market quotation on the last trading dayof 2021.
3. Valuation techniques and qualitative and quantitative information of important
parameters for the items continuously and non-continuously measured by Level 2 fair
value
√Applicable □Not Applicable
The Group’s level-2 items continuously measured at fair value mainly include unlisted equityinvestments and listed equity instruments with restricted sales conditions. The fair value of unlistedequity investments is determined based on the information in the financial statements of theseunlisted companies on December 31, 2021, combined with comparable information of listedcompanies in the same industry under the comparable company multiplier method. In the listedequity instruments subject to restricted sales conditions, the valuation model is used to determinethe fair value based on the market quotation, and the important observable input value is theliquidity discount.
4. Valuation techniques and qualitative and quantitative information of important
parameters for the items continuously and non-continuously measured by Level 3 fair
value
√Applicable □Not Applicable
The Group’s level-3 items continuously measured at fair value include equity investments anddebt investments in non-listed companies for which the comparable company multiplier methodcannot be used. The fair value of the equity investments and debt investments in non-listedcompanies for which the comparable company multiplier method cannot be used are determinedunder the asset-based method as of December 31, 2021.
5. Adjustment information between the opening book value and closing book value, and
the sensitivity analysis of unobservable parameters for items continuously measured by
Level 3 fair value
□Applicable √Not Applicable
6. For items continuously measured by fair value, if there is conversion between different
levels in the current period, the reasons for the conversion and the policy for
determining the time of conversion
□Applicable √Not Applicable
7. Changes in valuation techniques in the current period and reasons for changes
□Applicable √Not Applicable
8. Fair value of financial assets and financial liabilities not measured by fair value
√Applicable □Not Applicable
December 31, 2021
Entries used in the fair value measurementQuotation in an active market Important observable Important non-observableEntry EntryLevel 1 Level 2 Level 3 Total
Bonds payable (current portion included) 3,552,960,829.66 3,552,960,829.66
9. Others
√Applicable □Not Applicable
Estimate of fair value
Fair value of financial instrumentsThe table below shows the differences between book value and fair value of the Group’sfinancial instruments other than the financial instruments with very small differencesbetween book value and fair value and the equity instruments that did not have an offeringprice in the active market and whose fair value could not be measured reliably:
| Book value | Fair value | ||||
| 2021 | 2020 | 2021 | 2020 | ||
| Financial liabilities Bonds payable (current portion included) | 3.552.960.829.66 | 4,584,565,819.27 | 3.549.754.103.37 | 4,566,553,461.90 | |
The management have evaluated cash and cash equivalents, accounts receivable,notes payable and accounts payable. Their fair values were equivalent to their bookvalues as their remaining terms were not long. The fair values of long-term receivables,other non-current assets, long and short-term borrowings and long-term accountspayable were determined with the discounted future cash flow method, with the marketyields of other financial instruments with similar contract terms, credit risks andremaining terms as the discount rates. Their fair values were equivalent to their bookvalues.
The Group's finance department, headed by the General manager of the GroupFinance Center, is responsible for developing policies and procedures for the fair valuemeasurement of financial instruments. The General Manager of the Group FinanceCenter reports directly to the Group Finance Officer, who reports to the AuditCommittee. On each balance sheet date, the financial department analyzes thechanges in the value of financial instruments and determines the main input valuesapplicable to the valuation. The valuation shall be reviewed and approved by theGroup's Financial Director. For the preparation of semi-annual and annual financialstatements, the valuation process and results are discussed with the audit committeetwice a year.
The fair values of financial assets and financial liabilities refer to the amountsdetermined based on the voluntary exchange of assets or repayment of debts by theparties to arm’s length transactions who are familiar with the transactions rather thanforced sale or liquidation. The following methods and assumptions are used toestimate fair value.
The fair value of bonds payable is determined with the discounted future cash flowmethod, with the market yields of other financial instruments with similar contractterms, credit risks and remaining terms as the discount rates, and falls in Level 2. Thesignificant unobservable inputs for measurement of the fair value of bonds payable arethe prepayment rate and loss given default.
If there are no restrictions on the sale of listed equity instruments, the fair value isdetermined at the quoted market price. In the listed equity instruments subject torestricted sales conditions, the valuation model is used to determine the fair valuebased on the market quotation, and the important observable input value is the liquiditydiscount. The Group believes that the fair value estimated by valuation techniques isreasonable and is also the most appropriate value on the balance sheet date.
There was no significant conversion of the Group’s and the Company’s financialinstruments measured by fair value between different levels in the current year and inthe previous year.XII. Related parties and related-party transactions
1. Parent company of the Company
√Applicable □Not Applicable
Unit: RMB10,000
| Name of parent company | Place of registration | Business | Registered capital | Shareholding ratio in the Company (%) | Voting right ratio in the Company (%) |
| Yiwu China Commodities City Holdings Limited | Yiwu, Zhejiang | Asset management | 100,000 | 55.33 | 55.33 |
Notes on the parent company of the CompanyNoneThe ultimate controlling party of this enterprise is the State-owned Assets Supervision andAdministration Office of Yiwu Municipal People's Government.Other notes:
None
2. Subsidiaries of the Company
For details of the Company’s subsidiaries, please refer to the Notes
√Applicable □Not Applicable
For details of subsidiaries, please refer to Note IX. 1. Equity in subsidiaries
3. Joint ventures and associates of the Company
For details of the Company’s important joint ventures or associates, please refer to the Notes
√Applicable □Not Applicable
For details, please refer to Note IX. 3. Interests in joint ventures or associated enterprises
Other joint ventures or associates that have related-party transactions with the Company in thecurrent period or had related-party transactions with the Company in the prior year which resulted inan outstanding amount are as follows
√Applicable □Not Applicable
| Name of joint venture or associate | Relationship with the Company |
| Yiwu Shanglv | Joint venture |
| Redbud Capital | Joint venture |
| Binjiang Shangbo | Associate |
| Huishang Micro-finance | Associate |
| Zhejiang Yemai Data Technology Co., Ltd. | Associate |
| Yiwu Meipinshu Supply Chain Management Co., Ltd. | Associate |
| EBEL ALI FREE ZONE TRADER MARKET DEVELOPMENT AND OPERATZON FZCO | Associate |
| Yiwu Digital Port Technology Co., Ltd. | Associate |
| Yiwu China Commodities City Property Development Co., Ltd. | Associate |
Other statements
□Applicable √Not Applicable
4. Other related parties
√Applicable □Not Applicable
| Name of other related party | Relationship with the Company |
| SCO | Parent company of controlling shareholder of the Company’s largest shareholder |
| MDG | Controlling shareholder of the Company’s largest shareholder |
| Yiwu China Commodities City Property Service Co., Ltd. | Subsidiary of the Company’s largest shareholder |
| Yourworld International Conference Center Company of Yiwu Market Development Group Co., Ltd. | Branch of Controlling shareholder of the Company’s largest shareholder |
| Yiwu Security Service Co., Ltd. | Subsidiary of controlling shareholder of the Company’s largest shareholder |
| Zhejiang Xingfuhu Sports Development Co., Ltd. | Subsidiary of controlling shareholder of the Company’s largest shareholder |
| Huangyuan Shangbo | Subsidiaries of joint ventures |
| Chengzhen Property | Subsidiaries of joint ventures |
| Gongchen Shangbo | Subsidiaries of joint ventures |
| Tonghui Shangbo | Subsidiaries of joint ventures |
| Zhejiang Shangbo Property Co., Ltd. | Subsidiary of the Company’s largest shareholder |
| Handing Shangbo | Subsidiaries of associates |
Other statementsNone
5. Related-party transactions
(1).Related-party transactions of purchasing and selling goods and rendering and
accepting servicePurchasing goods/accepting service
√Applicable □Not Applicable
Unit: RMB
| Related party | Contents of related-party transaction | Amount in the current period | Amount in the previous period |
| Yiwu Security Service Co., Ltd. | Epidemic prevention and control and exhibition security service fee | 23,279,926.97 | 69,300.00 |
| Yiwu China Commodities City Property Service Co., Ltd. | Property service fee and greening maintenance fee | 13,721,576.38 | - |
| Yiwu China Commodities City Creative Design and Development Services Co., Ltd. | Design fee | 1,953,465.33 | - |
Selling goods/rendering service
√Applicable □Not Applicable
Unit: RMB
| Related party | Contents of related-party transaction | Amount in the current period | Amount in the previous period |
| MDG and its branch Xingfuhu International Conference Center | Laundering fees | 1,594,054.55 | 1,515,186.29 |
| Meipinshu | Procurement agency | 231,822.45 | 310,367.07 |
Notes on related-party transactions of purchasing and selling goods and rendering and acceptingservice
□Applicable √Not Applicable
(2). Entrustment/contracting from and to related parties
Entrustment/contracting to the Company:
√Applicable □Not Applicable
Unit: RMB
| Name of consignor/employer | Name of consignee/contractor | Type of entrusted/contracted assets | Starting date of entrustment /contracting | Ending date of entrustment /contracting | Pricing of entrustment income/contracting income | Entrustment income/contracting income recognized in the current period |
| MDG | The Company | Entrustment of other assets | February 1, 2020 | January 31, 2025 | Negotiated price | 1,453,314.18 |
Notes on entrustment/contracting from related parties
√Applicable □Not Applicable
According to the Xingfuhu International Conference Center Management Contract signed byand between the Company and the Market Development Group, the Company is entrusted tomanage Xingfuhu International Conference Center Hotel located at No. 100, Xingfuhu Road, YiwuCity. The hotel management fee collected during the reporting period was RMB 1,453,314.18 (2020:
RMB 1,020,591.87)
Entrusted management/contracted by the Company
□Applicable √Not Applicable
Notes on related-party management/contracting
□Applicable √Not Applicable
(3). Related-party lease
The Company as the lessor:
√Applicable □Not Applicable
Unit: RMB
| Name of lessee | Type of leased asset | Rental income recognized in the current period | Rental income recognized in the previous period |
| CCCP | Office space | 3,767,104.11 | - |
| Huishang Micro-finance | Office space | 103,301.70 | 312,233.27 |
| MDG | Office space | - | 836,793.82 |
| Redbud Capital | Office space | - | 246,819.09 |
| Zhejiang Yemai Data Technology Co., Ltd. | Office space | - | 28,793.86 |
The Company as the lessee
√Applicable □Not Applicable
Unit: RMB
| lessor name | Type of leased asset | Rental fee confirmed in the current period | Rental fee confirmed in the previous period |
| CCCH | Warehouses | 3,947,798.16 | - |
Notes on related-party lease
√Applicable □Not Applicable
The Group rent office spaces from above related parties at market prices
(4). Related-party guarantees
The Company as the guarantor
√Applicable □Not Applicable
Unit: RMB
| The guaranteed | Amount of guarantee | Starting date of the guarantee | Expiry date of the guarantee | Is the guarantee fulfilled in full |
| Yiwu Shanglv | 145,287,733.04 | July 1, 2015 | December 15, 2026 | No |
| Yiwu Shanglv | 8,283,103.03 | December 25, 2020 | December 24, 2023 | No |
The Company as the guaranteed party
√Applicable □Not Applicable
Unit: RMB
| Guarantor | Amount of guarantee | Starting date of the guarantee | Expiry date of the guarantee | Is the guarantee fulfilled in full |
| CCCH | 8,283,103.03 | December 25, 2020 | December 24, 2023 | No |
Notes on related-party guarantees
√Applicable □Not Applicable
1. The Group provided guarantee for the borrowings of Yiwu Shanglv. As of December 31,2021, Yiwu Shanglv actually borrowed RMB 296,505,600 (RMB 477,659,700 as of Dec 31, 2020)from banks. According to the guarantee contract, the Group assumed liability for RMB145,287,700(RMB 234,053,300 as of Dec 31, 2020). The state-owned capital operation center provided counter-guarantee for the said loan.
2. The Group provided Yiwu Shanglv with a loan guarantee with the maximum amount notexceeding RMB 49 million to Yiwu Branch of Bank of Communications Co., Ltd. As of December31, 2021, Yiwu Shanglv actually borrowed RMB 16,904,300 from the bank (December 31, 2020:
RMB 11.50 million). As agreed in the guarantee contract, the Bank of Communications Co., Ltd.Yiwu Branch assumed a guarantee liability of RMB 8.2831 million (December 31, 2020: RMB 5.635million). CCCH provided a counter-guarantee
(5). Related-party lending and borrowing
√Applicable □Not Applicable
Unit: RMB
| Related party | Amount | Starting date | Maturity date | Remarks |
| Borrowings | ||||
| Huangyuan Shangbo | 539,000,000.00 | July 31, 2020 | The Group allocated a total of RMB 539,000,000.00 of surplus funds from Huangyuan Shangbo in 2020, and a total of RMB 171,500,000.00 of surplus funds from Huangyuan Shangbo in 2021. The allocation was based on the | |
| share holding rate and the annual interest rate was 0%. As of December 31 2021, RMB 102,900,000.00 has been transferred back, and the return date of the remaining funds would be determined according to the capital needs of the Huangyuan Business Expo project. | ||||
| Huangyuan Shangbo | 171,500,000.00 | January 26, 2021 | Ditto | |
| Chengzhen Property | 27,200,000.00 | October 22, 2020 | In 2020, theGGroup allocated a total of RMB 27,200,000.00 of surplus funds from Chengzhen Real Estate a total of RMB 72,000,000.00 of surplus funds from Chengzhen Real Estate in 2021. The allocation was based on the share holding rate and the annual interest rate was 0%. The repayment date would be determined according to the capital needs of the Chengzhen Real Estate project. | |
| Chengzhen Property | 172,800,000.00 | January 26, 2021 | Ditto |
| Related party | Amount | Starting date | Maturity date | Remarks |
| Lending to | ||||
| Gongchen Shangbo | 472,659,831.00 | February 28, 2020 | May 27, 2021 | In 2020, the Group provided Gongchen Shangbo with financial assistance totaling RMB 521,659,831.00 at the annual interest rate of 10%. As of December 31, 2021, Gongchen Shangbo has repaid off successively. |
| Gongchen Shangbo | 49,000,000.00 | June 22, 2020 | May 27, 2021 | Ditto |
| Tonghui Shangbo | 743,800,000.00 | November 17, 2020 | December 29, 2021 | In 2020, the Group provided a total of RMB1,486,368,548.00 in financial assistance to Tonghui Shangbo, and in 2021, it provided a total of RMB138,160,000.00 in financial assistance to Tonghui Shangbo, with an annual interest rate of 6.5%. Tonghui Shangbo has repaid RMB 743,800,000.00 successively in 2021. |
| Tonghui Shangbo | 742,568,548.00 | November 17, 2020 | Ditto | |
| Tonghui Shangbo | 138,160,000.00 | February 26, 2021 | Ditto | |
| Handing Shangbo | 267,540,000.00 | December 11, 2020 | December 29, 2021 | In 2020, the Group provided financial assistance to Handing Shangbo totaling RMB 472,144,400.00, and in 2021, it provided financial assistance to Handing Shangbo totaling RMB 17,845,800.00, with an annual |
| interest rate of 6%. Handing Shangbo has repaid RMB 267,540,000.00 successively in 2021. | ||||
| Handing Shangbo | 204,604,400.00 | December 11, 2020 | Ditto. | |
| Handing Shangbo | 17,845,800.00 | May 11, 2021 | Ditto | |
| Guoshen Shangbo | 1,372,000,000.00 | April 19, 2021 | December 30, 2021 | In 2019, the Group provideda total of RMB 451,816,700.00 of financial assistance to Chengzhen Real Estate at an annual interest rate of 0% or 10%. Among them, the annual interest rate of the portion beyond the shareholding ratio is 10%. As of December 31, 2020, Chengzhen Real Estate has repaid off successively. |
| JEBEL ALI FREE ZONE TRADER MARKET DEVELOPMENT AND OPERATZON FZCO | 63,465,484.42 | March 9, 2020 | The Group provided financial assistance to JEBEL ALI FREE ZONE TRADER MARKET DEVELOPMENT AND OPERATZON FZCO totaling RMB 63,465,484.42 in 2020, and provided financial assistance to JEBEL ALI FREE ZONE TRADER MARKET DEVELOPMENT AND OPERATZON FZCO totaling RMB 173,102,001.51 in 2021, with an annual interest rate of 6-month average EIBOR plus 5%, and the financial aid repayment period would be determined according to the progress of the project. | |
| JEBEL ALI FREE ZONE TRADER MARKET DEVELOPMENT AND OPERATZON FZCO | 109,636,517.09 | March 31, 2021 | Ditto |
(6). Related-party transfer of assets and restructuring of debts
□Applicable √Not Applicable
(7). Remunerations of key officers
√Applicable □Not Applicable
Unit: RMB
| Item | Amount in the current period | Amount in the previous period |
| Remunerations of key officers | 23,333,482.40 | 22,487,812.15 |
(8). Other related-party transactions
□Applicable √Not Applicable
6. Accounts receivable from and payable to related parties
(1). Receivables
√Applicable □Not Applicable
Unit: RMB
| Item | Related party | Closing balance | Opening balance | ||
| Book balance | Bad debt provision | Book balance | Bad debt provision | ||
| Accounts receivable | Tonghui Shangbo | 6,200,000.00 | - | - | - |
| Accounts receivable | Yourworld International Conference Center Company of Yiwu Market Development Group Co., Ltd. | 369,743.93 | - | - | - |
| Accounts receivable | Yiwu Gongchen Shangbo Property Co., Ltd. | 97,351.08 | - | - | |
| Accounts receivable | CCCP | 9,000.00 | - | - | - |
| Accounts receivable | Meipinshu | - | - | 3,791,271.51 | - |
| Total | 6,676,095.01 | - | 3,791,271.51 | - | |
| Other receivables-interest receivable | Gongchen Shangbo | - | - | 101,380,259.61 | - |
| Other receivables-interest receivable | Tonghui Shangbo | 92,249,275.44 | - | 18,391,082.53 | - |
| Other receivables-interest receivable | Handing Shangbo | - | - | 1,629,868.34 | - |
| Other receivables | Gongchen Shangbo | - | - | 521,659,831.00 | - |
| Other receivables | Tonghui Shangbo | 880,728,548.00 | - | 1,486,368,548.00 | - |
| Other receivables | Handing Shangbo | 222,450,200.00 | - | 472,144,400.00 | - |
| Total | 1,195,428,023.44 | - | 2,601,573,989.48 | - | |
| Long-term receivables | Yiwu Shanglv | 41,650,000.00 | - | 61,250,000.00 | - |
| Long-term receivables | JEBEL ALI FREE ZONE TRADER MARKET DEVELOPMENT AND OPERATZON FZCO | 173,102,001.51 | - | 65,506,573.8 | - |
| Total | 214,752,001.51 | - | 126,756,573.81 | - | |
(2). Payables
√Applicable □Not Applicable
Unit: RMB
| Item | Related party | Closing book balance | Opening book balance |
| Accounts payable | Zhejiang Yemai Data Technology | 176,873.43 | 1,944,907.37 |
| Total | 176,873.43 | 1,944,907.37 | |
| Advance from customers | CCCP | 612,288.99 | 612,289.00 |
| Advance from customers | Huishang Micro-finance | 20,798.09 | 119,444.13 |
| Advance from customers | Yiwu Digital Port Technology Co., Ltd. | 112,281.94 | 116,090.04 |
| Advance from customers | Redbud Capital | 82,273.06 | 82,272.97 |
| Advance from customers | Zhejiang Yemai Data Technology Co., Ltd. | - | 7,395.00 |
| Advance from customers | Yiwu Meipinshu Supply Chain Management Co., Ltd. | 31,195.06 | 29,076.43 |
| Advance from customers | Yiwu China Commodities City Property Service Co., Ltd. | 32,052.85 | - |
| Total | 890,889.99 | 966,567.57 | |
| Contract liabilities | Huishang Micro-finance | 7,966.42 | 12,609.59 |
| Contract liabilities | Yiwu Digital Port Technology Co., Ltd. | 22,205.25 | 2,192.92 |
| Contract liabilities | Yiwu Security Service Co., Ltd. | 2,004.40 | - |
| Contract liabilities | Yiwu China Commodities City Property Service Co., Ltd. | 332.00 | - |
| Total | 32,508.07 | 14,802.51 | |
| Other payables | Huangyuan Shangbo | 607,600,000.00 | 539,000,000.00 |
| Other payables | Chengzhen Property | 200,000,000.00 | 27,200,000.00 |
| Other payables | MDG | 63,334.76 | 400,421.10 |
| Other payables | Huishang Micro-finance | 33,000.00 | 85,000.00 |
| Other payables | Zhejiang Yemai Data Technology Co., Ltd. | - | 24,000.00 |
| Other payables | CCCP | 240,000.00 | 240,000.00 |
| Other payables | Yiwu Meipinshu Supply Chain Management Co., Ltd. | 57,000.00 | 57,000.00 |
| Other payables | Yiwu Digital Port Technology Co., Ltd. | 26,300.00 | 26,300.00 |
| Other payables | Yiwu Shangfu Chuangzhi Investment Center (limited partnership) | 34,000,500.00 | - |
| Other payables | Binjiang Shangbo | 14,700,000.00 | - |
| Other payables | Yiwu Huishang Redbud Equity Investment Co., Ltd. | 4,500,000.00 | - |
| Other payables | Yiwu Shanglv Investment Development Co., Ltd. | 75,000.00 | - |
| Other payables | Gongchen Shangbo | 3,000.00 | - |
| Total | 861,298,134.76 | 567,032,721.10 |
7. Related-party commitments
□Applicable √Not Applicable
8. Others
□Applicable √Not Applicable
XIII. Share-based payment
1. Overview of share-based payment
√Applicable □Not Applicable
Unit: Share Currency: RMB
| Total amount of equity instruments granted by the Company in the current period | 2,340,000.00 |
| The total amount of equity instruments exercised by the Company during the current period | - |
| The total amount of the Company's equity instruments that have lapsed during the current period | 980,000.00 |
| Scope of the exercise price of the stock options issued by the Company and the remaining period of the contract at the end of the period | The grant price was RMB 2.94, in 60 months from the date of grant registration |
| Scope of the exercise price of other equity instruments issued by the Company and the remaining period of the contract at the end of the period |
Other statementsNone
2. Share-based payment settled with equity
√Applicable □Not Applicable
Unit: RMB
| Method for determining the fair value of equity instruments on the grant date | Market price on grant day |
| Basis for determining the number of exercisable equity instruments | Determined based on the number of incentive objects that have reached the assessment target, through annual assessment on the Company’s financial performance indicators and personal performance indicators. |
| Reason for the significant difference between the estimates in the current period and in the previous period | |
| Cumulative amount of equity-settled share-based payments included in the capital reserve | 33,415,506.37 |
| Total amount of expenses recognized by equity-settled share payments in the current period | 33,415,506.37 |
Other statements
On December 10, 2020, the 2020 fifth provisional general meeting of shareholders of theCompany reviewed and approved the “Plan on the Company's Restricted Equity incentive Plan2020 (Draft)” and its summary. A total of 50,480,000 restricted shares were granted, accounting forabout 0.927% of the Company's total share capital of 5,443,214,176 shares, of which 47,920,000shares were granted for the first time and 2,560,000 shares were reserved. During the subscriptionprocess, 10 incentive objects voluntarily waived the restrictions to be granted to them due topersonal reasons. Therefore, 46,700,000 restricted shares were actually granted this time, and thenumber of incentive objects was 395. On January 15, 2021, the Company's board of directors hascompleted the registration of the first grant of restricted stocks.
After consideration and approval at the thirty-fifth meeting of the eighth the Board of Directorsand the ninth meeting of the eighth Board of Supervisors of the Company held on August 9, 2021,in view of the fact that among the original incentive objects granted for the first time, 6 incentiveobjects including ZHAO Qitong no longer worked in the Company due to their position adjustments,
and three incentive objects including HOU Wenbin had resigned due to personal reasons,according to the relevant regulations of the "Incentive Plan" and the authorization of the FifthProvisional General Meeting of Shareholders in 2020, the Board of Directors of the Companydecided to repurchase and canceled a total of 980,000 restricted shares granted to the above ninepersons but yet to be released. The Company would repurchase and cancel the restricted sharesheld by the above-mentioned 9 persons that had been granted but not yet been released at thesum of interest calculated at RMB 2.885 per share and the fixed deposit interest rate announced bythe People's Bank of China for the same period. The total amount of restricted stock repurchasefunds this time was RMB 2.852 million , and the above-mentioned repurchase funds would all bepaid with the Company's own funds.
On September 6, 2021, Zhejiang Zhicheng Certified Public Accountants (Special GeneralPartnership) issued the capital verification report (Zhe Zhi Kuai Yi Zi [2021] No. 17): The Companyhas received a total of RMB 5,592,600.00 for subscription of restricted shares from 31 restrictedequity incentive objects, including RMB 2,340,000.00 in newly registered capital (share capital), andRMB 3,252,600.00 in capital reserve. The registered capital and share capital of the Companybefore the capital increase were both RMB 5,489,914,176.00, and the registered capital and sharecapital after the change were both RMB 5,492,254,176.00. During this grant registration process, inview of the fact that 3 of the incentive objects to be granted on the reserved grant date are nolonger eligible for incentive objects due to their voluntary abandonment; 31 incentive objectsactually subscribed this time, and 2.34 million shares were subscribed. On November 4, 2021, theregistration procedures for the reserved grant of restricted stocks involved in this incentive planwere completed, and the Shanghai Branch of China Securities Depository and Clearing CorporationLimited issued the "Securities Change Registration Certificate".The restricted stocks granted for the first time under the restricted equity incentive plan shouldbe vested in three terms from the first trading day after 24 months after the grant registration iscompleted until the last trading day in 60 months after the grant registration is completed. That is,after the vesting conditions have been satisfied, employees have the right to purchase stocks at thevesting price. If the vesting conditions of the restricted equity incentive plan have been satisfiedduring the vesting period, the incentive objects can apply for the ownership of stocks and beinglisted for circulation.
3. Share-based payment settled with cash
□Applicable √Not Applicable
4. Modification and termination of share-based payment
□Applicable √Not Applicable
5. Others
□Applicable √Not Applicable
XIV. Commitments and contingencies
1. Important commitments
√Applicable □Not Applicable
Important external commitments, nature and amount thereof as of the balance sheet dates
Unit: RMB Yuan
| Capital commitments | 2021 | 2020 |
| Signed but not provided | 2,165,863,780.60 | 1,346,968,354.17 |
Investment commitments:
In 2017, the Group’s wholly-owned subsidiary Yiwu China Commodities City Financial HoldingsCo., Ltd. (“CCCF”) and Shanghai Fuxing Industry Group Co., Ltd. (“Fuxing”) jointly established anindustry fund Yiwu China Commodities City Fuxing Investment Center (limited partnership)(hereinafter referred to as the “FoF”). The FoF invested in 12 sub-funds including Yiwu ShangfuChuangzhi Investment Center (limited partnership) (“Shangfu Chuangzhi Fund”). CCCF subscribedfor capital contribution of RMB998million in the FoF as a limited partner, accounting for 49.9% ofthe total capital contribution, and has paid in RMB102.92million. The unpaid portion of itssubscribed capital contribution was promised to be RMB895.08million and was not subject to a term.
CCCF also made capital contribution of RMB9.8million (49% equity) to Yiwu China CommoditiesCity Investment and Management Co., Ltd. (hereinafter referred to as the “CCCIM”), which was ageneral partner of the above FoF and sub-funds. Fuxing made capital contribution of 51% to andhad control over CCCIM.Shangfu Chuangzhi Fund raised funds of RMB823.36million in total. The FoF has subscribedfor and paid in capital contribution of RMB205.84million as a limited partner (including the aboveRMB102.92million from CCCIM and the rest was contributed by Fuxing, the other limited partner ofthe FoF). As the other limited partner of Shangfu Chuangzhi Fund, CCCF has separatelysubscribed for and paid in capital contribution of RMB617.51million. In addition, neither the Groupnor CCCF have invested in other sub-funds of the FoF. Subsequently, Shangfu Chuangzhi Fundmade capital contribution of RMB820.54million to subscribe for the increase in the registered capitalof Hubei Provincial Asset Management Co., Ltd. to acquire 22.667% equity therein. By 2019, 9 outof the above 12 sub-funds had been deregistered.
In 2018, CCCF learned during its after-investment follow-up management that Fuxing and itsactual controller ZHU Yidong were suspected of having committed a criminal offense and the
22.667% equity held by Shangfu Chuangzhi Fund in Hubei Provincial Asset Management Co., Ltd.was frozen by the Public Security Bureau of Shanghai for a term from Sep 6, 2018 to Sep 6, 2019due to Fuxing’s contribution in the sources of the capital contribution. As of the approval date of thefinancial statements, the freeze period has been extended until September 2, 2022.
As of the approval date of the financial statements, the Group had not received any notice ofcapital contribution other than the above contributions that had been made or any notice of actioninvolving the Group, CCCF, FoF and its sub-funds.
In addition, as of December 31, 2021, the Group had other investment commitments totalingRMB 1.28078 billion (December 31, 2020: RMB 201.71 million).
2. Contingencies
(1). Important contingencies on the balance sheet dates
√Applicable □Not Applicable
Unit: RMB Yuan
| Item | 2021 | 2020 |
| Contingent liabilities resulting from the guarantee provided externally | 158,634,169.67 | 973,992,539.81 |
According to relevant regulations, before the purchaser of the commercial housing sold by theGroup has obtained the property certificate, the Group shall provide the purchaser with a bankmortgage guarantee. As of June 30, 2021, the unsettled guarantee amount was RMB 9,928,856.22(December 31, 2020: RMB 16,170,141.08). Those guarantees would be released after the issuanceof the property ownership certificates and are thus little likely to incur losses. Therefore, themanagement believed that it was not necessary to make provision for the guarantees.
According to the resolution of the 15th meeting of the 7th Board of Directors on Jul 1, 2015, theGroup applied to the Yiwu Branch of ABC for a RMB750million loan for Yiwu Shanglv and providedguarantee based on its shareholding ratio. The guarantee was a joint and several liability guarantee,the maximum amount of guarantee was RMB367.5million and the term was 11 years. As ofDecember 31, 2021, Yiwu Shanglv actually borrowed RMB 296,505,577.63 (December 31, 2020:
RMB 477,659,739.88) from the banks in total. According to the agreement of the guarantee contract,it assumed the guarantee liability of RMB 145,287,733.04 (December 31, 2020: RMB234,053,272.54) for the Agricultural Bank of China Yiwu Branch. Yiwu State-owned CapitalOperation Co., Ltd. provided a counter guarantee for this guarantee.
According to the resolution of the 19th Meeting of the 8th Board of Directors on August 13,2020, the Group applies for a loan with a total amount of not more than RMB 100 million for YiwuShanglv with the Bank of Communications Co., Ltd. Yiwu Branch and provided a guarantee inproportion to the shareholding ratio. The guarantee method was under joint liability, the maximumamount of the guarantee was RMB 49 million, and the guarantee period was two years, from thedate of the expiry of the debt performance period agreed in the independent contract until the dateof the expiration of the debt performance period of all last due main debt under the master contract.As of December 31, 2021, Yiwu Shanglv actually borrowed RMB 28,404,291.89 (December 31,2020: RMB 11,500,000.00) from banks in total. According to the agreement of the guaranteecontract, it assumed the guarantee liability of RMB 8,283,103.03 (December 31, 2020: RMB5,635,000.00) for the Agricultural Bank of China Yiwu Branch. CCCH provided a counter-guarantee
(2). Notes shall also be made even if the Company has no important contingencies to bedisclosed:
□Applicable √Not Applicable
3. Others
□Applicable √Not Applicable
XV. Post-balance sheet date events
1. Important non-adjusting events
√Applicable □Not Applicable
Unit: RMB
| Item | Content | Effect on financial status and operating results | Issuance of ultra-short-term financing notes for which the impact cannot be estimated: Reasons |
| Medium Term Note Issuance | On February 22, 2022, the Company issued the first issue of medium-term note of RMB 1 billion of Zhejiang China Commodities City Group Co., Ltd. in 2022, with a term of 3 years and annual interest payment at an interest rate of 3.29%. |
2. Profit distribution
√Applicable □Not Applicable
Unit: RMB
| Profits or dividends to be distributed | 400,863,014.85 |
| Profits or dividends announced through deliberation and approval | 400,863,014.85 |
3. Sales return
□Applicable √Not Applicable
4. Other post-balance sheet date events
□Applicable √Not Applicable
XVI. Other important events
1. Correction of previous accounting errors
(1). Retrospective restatement
□Applicable √Not Applicable
(2). Prospective application
□Applicable √Not Applicable
2. Debt restructuring
□Applicable √Not Applicable
3. Exchange of assets
(1). Exchange of non-monetary assets
□Applicable √Not Applicable
(2). Exchange of other assets
□Applicable √Not Applicable
4. Annuity plan
□Applicable √Not Applicable
5. Termination of operations
□Applicable √Not Applicable
6. Information of divisions
(1). Determination basis and accounting policy of reporting divisions
√Applicable □Not Applicable
Information of divisions is reported based on business divisions of the Group. In theidentification of region-based divisions, revenue is attributable to the divisions in the regions wherethe clients are located, and assets are attributable to the divisions in the regions where the assetsare located. As the Group’s main operating activities and operating assets are both concentrated inmainland China, it is not required to report more detailed information on region-based divisions.
The Group’s businesses are organized and managed separately based on the nature ofbusiness and the products and services provided. Each business division of the Group is abusiness department or a subsidiary and provides the products and services that face the riskdifferent from that faced by other business divisions and bring the compensations different fromthose brought by other business divisions. The detailed information on business divisions aresummarized as follows:
(a) Market operation segment refers to the business that the Group is engaged in marketoperation, including the collection of business space usage fees and the rent of auxiliary buildingsand office buildings;
(b) The commodities sales division engages in the purchase and sale of goods such as exporttrade;
(c) The hotel service division engages in the operation of hotels including accommodation andcatering services;
(d) The exhibition advertising division engages in the design, production, placement andagency of advertisements;
(e) Other services division covers the provision of market-related auxiliary services.
The transfer pricing between divisions is made based on the prices offered to third parties andthe then prevailing market prices.
(2). Financial information of reporting divisions
√Applicable □Not Applicable
Unit: RMB million
| Item | Market operation | Sales of goods | Hotel service | Exhibition and advertising | Other services | Set-offs among divisions | Total |
| Revenue from external transactions | 2,756 | 2,618 | 138 | 147 | 375 | - | 6,034 |
| Revenue from inter-division transactions | 15 | 44 | 6 | 12 | 49 | 126 | - |
| Profits before | 1,683 | -42 | -75 | 6 | 158 | 73 | 1,657 |
| tax | |||||||
| Total assets | 39,021 | 1,361 | 452 | 622 | 5,404 | 15,980 | 30,880 |
| Total liabilities | 23,290 | 1,269 | 523 | 586 | 1,059 | 10,234 | 16,493 |
| Capital expenditures | 1,493 | 2 | 190 | 11 | 72 | - | 1,768 |
| Long-term equity investment in joint ventures and associates | 4,606 | 1 | - | - | 1,166 | - | 5,773 |
(3). If the Company does not have reporting divisions or is unable to disclose the totalassets and total liabilities of each division, please explain
□Applicable √Not Applicable
(4). Other statements
□Applicable √Not Applicable
7. Other important transactions and events that have influence on investors’ decisions
□Applicable √Not Applicable
8. Others
□Applicable √Not Applicable
XVII. Notes to main items in financial statements of parent company
1. Accounts receivable
(1). Disclosure based on account age
√Applicable □Not Applicable
Unit: RMB
| Account age | Closing book balance |
| Within 1 year | 23,204,362.72 |
| 1 to 2 years | 100,234.00 |
| 2 to 3 years | 352,588.44 |
| Total | 23,657,185.16 |
(2). Categorized disclosure based on the bad debt provision method
√Applicable □Not Applicable
Unit: RMB
| Category | Closing balance | Opening balance | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Proportion (%) | Amount | Provision ratio (%) | Amount | Proportion (%) | Amount | Provision ratio (%) | |||
| Accounts receivable for which bad debt provision is made by Group | 23,657,185.16 | 100.00 | 27,502.47 | 0.12 | 23,629,682.69 | 14,686,565.66 | 100.00 | 14,988.19 | 0.10 | 14,671,577.47 |
| Total | 23,657,185.16 | / | 27,502.47 | / | 23,629,682.69 | 14,686,565.66 | / | 14,988.19 | / | 14,671,577.47 |
Accounts receivable for which bad debt provision is made individually:
□Applicable √Not Applicable
Explanation for making bad debt provision for accounts receivable by Group:
√Applicable □Not Applicable
Items for which the bad debts are provided for by combination: by combination of credit riskcharacteristics
Unit: RMB
| Name | Closing balance | ||
| Accounts receivable | Bad debt provision | Provision ratio (%) | |
| Provision for bad debt by combination of credit risk characteristics | 23,657,185.16 | 27,502.47 | 0.12 |
| Total | 23,657,185.16 | 27,502.47 | 0.12 |
Standard for recognition of provision for bad debt by combination of credit risk characteristics anddescriptions:
□Applicable √Not Applicable
If the bad debt provision is made according to the general model of expected credit loss, pleaserefer to the disclosure of other receivables:
√Applicable □Not Applicable
Unit: RMB Yuan
| Account age | 2021 | 2020 | ||||
| Estimated book balance in default | Expected credit loss rate (%) | Expected credit loss in whole duration | Estimated book balance in default | Expected credit loss rate (%) | Expected credit loss in whole duration | |
| Within 1 year | 23,204,362.72 | 0.01 | 50.87 | 14,267,749.52 | 0.01 | 1,350.33 |
| 1 - 2 years | 100,234.00 | 0.29 | 286.13 | 407,254.08 | 0.51 | 2,075.80 |
| 2 -3 years | 352,588.44 | 7.70 | 27,165.47 | - | 13.76 | - |
| Over 3 years | - | 100.00 | - | 11,562.06 | 100.00 | 11,562.06 |
| Total | 23,657,185.16 | 27,502.47 | 14,686,565.66 | 14,988.19 | ||
(3). Provisions for bad debts
√Applicable □Not Applicable
Unit: RMB
| Category | Opening balance | Amount of change during the current period | Closing balance | |
| Provision | Recovery or reversal | |||
| Bad debt provision for accounts receivable | 14,988.19 | 50,558.20 | 38,043.92 | 27,502.47 |
| Total | 14,988.19 | 50,558.20 | 38,043.92 | 27,502.47 |
In which the recovered or reversed amount is important:
□Applicable √Not Applicable
(4). Accounts receivable actually written off during the current period
□Applicable √Not Applicable
Information of write-off of important accounts receivable
□Applicable √Not Applicable
(5). Accounts receivable from the five debtors with the highest closing balance
□Applicable √Not Applicable
(6). Accounts receivable derecognized due to transfer of financial assets
□Applicable √Not Applicable
(7). Amounts of assets and liabilities formed by the transfer of accounts receivable andcontinuing involvement
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
2. Other receivables
Presentation of items
√Applicable □Not Applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Interest receivable | 92,249,275.44 | 121,401,210.48 |
| Other receivables | 1,114,837,610.55 | 2,530,219,399.58 |
| Total | 1,207,086,885.99 | 2,651,620,610.06 |
Other notes:
□Applicable √Not Applicable
Interest receivable
(1). Classification of interest receivable
√Applicable □Not Applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Cash occupation fee for receivables | 92,249,275.44 | 121,401,210.48 |
| Total | 92,249,275.44 | 121,401,210.48 |
(2). Significant overdue interest
□Applicable √Not Applicable
(3). Bad debt provision
□Applicable √Not Applicable
Other notes:
√Applicable □Not Applicable
As of December 31, 2021, the receivable capital occupation fee was the capital occupation feecollectable by the Company for providing financial assistance to joint ventures and associatedenterprises.
Dividend receivable
(1). Dividend receivable
□Applicable √Not Applicable
(2). Important dividend receivable with an account age longer than 1 year
□Applicable √Not Applicable
(3). Bad debt provision
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
Other receivables
(1). Disclosure based on account age
√Applicable □Not Applicable
Unit: RMB
| Account age | Closing book balance |
| Within 1 year | 6,125,410.03 |
| 1 to 2 years | 1,103,741,875.92 |
| 2 to 3 years | 200,000.00 |
| Over 3 years | 5,663,633.70 |
| Bad debt provision for other receivables | -893,309.10 |
| Total | 1,114,837,610.55 |
(2). Classification based on the nature of accounts
√Applicable □Not Applicable
Unit: RMB
| Nature of receivable | Closing book balance | Opening book balance |
| Financial assistance receivable from joint ventures | 1,103,178,748.00 | 2,480,172,779.00 |
| Receivables from self-operated land | - | 42,493,714.00 |
| Reserve | 267,208.49 | 430,887.57 |
| Withholdings, deposit and margin | 11,391,654.06 | 7,142,019.01 |
| Total | 1,114,837,610.55 | 2,530,239,399.58 |
(3). Bad debt provision
√Applicable □Not Applicable
Unit: RMB
| Bad debt provision | Phase I | Phase 2 | Phase 3 | Total |
| Expected credit loss in the coming 12 months | Expected credit loss in the entire duration (credit has not been impaired) | Expected credit loss in the entire duration (credit has been impaired) | ||
| Balance on January 1, 2021 | 285,589.88 | 285,589.88 | ||
| Provision made in the current period | 1,305,420.60 | 1,305,420.60 | ||
| Current reversal | 327,974.30 | 327,974.30 | ||
| Current write-off | 369,727.08 | 369,727.08 | ||
| Balance on December 31, 2021 | 893,309.10 | 893,309.10 |
Significant changes in the book balance of other receivables with changes in loss provisions:
□Applicable √Not Applicable
Basis for the bad debt provision made in the current period and for assessing whether the credit riskof financial instruments has increased significantly:
□Applicable √Not Applicable
(4). Provisions for bad debts
√Applicable □Not Applicable
Unit: RMB
| Category | Opening balance | Amount of change during the current period | Closing balance | ||
| Provision | Recovery or reversal | Charge-off or write-off | |||
| Bad debt provision for other receivables | 285,589.88 | 1,305,420.60 | 327,974.30 | 369,727.08 | 893,309.10 |
| Total | 285,589.88 | 1,305,420.60 | 327,974.30 | 369,727.08 | 893,309.10 |
In which the recovered or reversed amount is important:
□Applicable √Not Applicable
(5). Other receivables actually written off during the current period
□Applicable √Not Applicable
(6). Other receivables from the five debtors with highest closing balance
√Applicable □Not Applicable
Unit: RMB
| Debtor | Nature of receivable | Closing balance | Account age | Weight in the total closing balance of other receivables (%) | Bad debt provision Closing balance |
| Yiwu Tonghui Shangbo Real Estate Co., Ltd. | Financial assistance | 880,728,548.00 | 1-2 years | 78.94 | - |
| Yiwu Handing Shangbo Real Estate Co., Ltd. | Financial assistance | 222,450,200.00 | 1-2 years | 19.94 | - |
| Zhejiang Yuntong Advertising Co., Ltd. | Current payments | 596,580.00 | Over 3 years | 0.05 | - |
| Yiwu Haoyang Construction Co., Ltd. | Current payments | 278,106.18 | Within 1 year | 0.02 | - |
| Yiwu Chengxi Sub-district Office | Margin | 225,000.00 | 1-2 years | 0.02 | - |
| Total | / | 1,104,278,434.18 | / | 98.97 | - |
(7). Receivables involving government grants
□Applicable √Not Applicable
(8). Other receivables derecognized due to transfer of financial assets
□Applicable √Not Applicable
(9). Amounts of assets and liabilities formed by the transfer of other receivables and
continuing involvement
□Applicable √Not Applicable
Other notes:
□Applicable √Not Applicable
3. Long-term equity investment
√Applicable □Not Applicable
Unit: RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Investment in subsidiaries | 4,190,057,937.33 | 570,000,000.00 | 3,620,057,937.33 | 3,727,825,391.43 | 570,000,000.00 | 3,157,825,391.43 |
| Investment in associates and joint ventures | 4,625,942,083.47 | - | 4,625,942,083.47 | 2,925,310,036.59 | - | 2,925,310,036.59 |
| Total | 8,816,000,020.80 | 570,000,000.00 | 8,246,000,020.80 | 6,653,135,428.02 | 570,000,000.00 | 6,083,135,428.02 |
(1). Investment in subsidiaries
√Applicable □Not Applicable
Unit: RMB
| Investee | Opening balance | Increase in the current period | Decrease in the current period | Closing balance | Current provision for impairment | Closing balance of impairment provision |
| Yiwu China Commodities City Supply Chain Management Co., Ltd. | 55,255.02 | 100,741,437.51 | - | 100,796,692.53 | - | - |
| Yiwu China Commodities City Import and Export Co., Ltd. | 50,073,398.48 | 51,358,314.60 | - | 101,431,713.08 | - | - |
| Yiwu China Commodities City Tourism Development Co., Ltd. | 70,264,019.49 | 1,168,355.68 | - | 71,432,375.17 | - | - |
| Yiwu China Commodities City Overseas Investment and Development Co., Ltd. | 100,041,073.44 | 749,590.26 | - | 100,790,663.70 | - | - |
| Yiwu China Commodities City Commerce and Trade Service Training Center Co., Ltd. | 100,000.00 | - | - | 100,000.00 | - | - |
| Zhejiang Yindu Hotel Management Co., Ltd. | 1,570,540.29 | 4,177,181.55 | - | 5,747,721.84 | - | - |
| Yiwu China Commodities City Big Data Co., Ltd. | 81,534,944.31 | 19,896,768.77 | - | 101,431,713.08 | - | - |
| Yiwu Comprehensive Bonded Zone Operation and Management Co., Ltd. | 6,014,844.64 | 12,677,291.68 | - | 18,692,136.32 | - | - |
| Yiwu China Commodities City Research Institute Co., Ltd. | 1,124,741.06 | 4,670,316.71 | - | 5,795,057.77 | - | - |
| Zhejiang Huajie Investment and Development Co., Ltd. | 53,121,810.63 | 8,738,911.49 | - | 61,860,722.12 | - | - |
| Yiwu China Commodities City Assets Operation and Management Co., Ltd. | 5,080,000.00 | 4,920,000.00 | - | 10,000,000.00 | - | - |
| Yiwu China Commodities City Exhibition Co., Ltd. | 18,044,533.91 | 812,743.83 | - | 18,857,277.74 | - | - |
| Yiwu China Commodities City Advertising Co., Ld. | 39,221,752.54 | 761,983.76 | - | 39,983,736.30 | - | - |
| Hangzhou Shangbo Nanxing Property Co., Ltd. | 50,000,000.00 | - | - | 50,000,000.00 | - | - |
| Yiwu Commodities City Gonglian Property Co., Ltd. | 200,000,000.00 | - | - | 200,000,000.00 | - | - |
| Yiwu Shangbo Property Co., Ltd. | 300,000,000.00 | - | - | 300,000,000.00 | - | - |
| Yiwu China Commodities City Information Technology Co., Ltd. | 200,594,000.00 | - | 150,000,000.00 | 50,594,000.00 | - | - |
| Yiwu China Commodities City Logistics and Distribution Co., Ltd. | 23,471,131.52 | 39,910,658.40 | - | 63,381,789.92 | - | - |
| Haicheng Yiwu China Commodities City Investment Development Co., Ltd. | 43,709.21 | 670,688.91 | - | 714,398.12 | - | 570,000,000.00 |
| Yiwu China Commodities City Financial Holdings Co., Ltd. | 1,957,469,636.88 | 240,978,302.76 | - | 2,198,447,939.64 | - | - |
| Zhejiang China Commodities City Group Commercial Factoring Co., Ltd. | - | 120,000,000.00 | - | 120,000,000.00 | - | - |
| Total | 3,157,825,391.42 | 612,232,545.91 | 150,000,000.00 | 3,620,057,937.33 | - | 570,000,000.00 |
(2). Investment in associates and joint ventures
√Applicable □Not Applicable
Unit: RMB
| Investment Unit | Opening amount Balance | Change in the current period | Closing amount Balance | Closing balance of impairment | ||
| Additional investment | Investment gains or losses recognized with the equity method | Declared a cash dividend or profit | ||||
| provision | ||||||
| 1. Joint ventures | ||||||
| Yiwu Shanglv | 365,830,756.91 | - | 17,837,597.30 | - | 383,668,354.21 | - |
| Yiwu Rongshang Property | 22,319,075.64 | - | 195,068,462.30 | - | 217,387,537.94 | - |
| Yiwu Chuangcheng Property | 11,444,786.74 | - | 76,618,539.06 | - | 88,063,325.80 | - |
| Others | 8,713,045.29 | 17,850,000.00 | 23,602,002.68 | - | 50,165,047.97 | - |
| Sub-total | 408,307,664.58 | 17,850,000.00 | 313,126,601.34 | - | 739,284,265.92 | - |
| 2. Associates | ||||||
| Binjiang Shangbo | 154,152,267.42 | - | 17,523,961.66 | 137,200,000.00 | 34,476,229.08 | - |
| Huishang Micro-finance | 71,396,566.07 | - | 11,428,130.57 | - | 82,824,696.64 | - |
| Chouzhou Financial Lease | 371,320,662.02 | - | 54,700,187.22 | - | 426,020,849.24 | - |
| Pujiang Lvgu Property Co., Ltd. | 370,318,840.76 | - | 79,608,970.60 | - | 449,927,811.36 | - |
| CCCP | 1,500,517,785.02 | 1,225,000,000.00 | 60,365,490.42 | - | 2,785,883,275.44 | - |
| Others | 49,296,250.72 | 50,000,000.00 | 8,228,705.07 | - | 107,524,955.79 | - |
| Sub-total | 2,517,002,372.01 | 1,275,000,000.00 | 231,855,445.54 | 137,200,000.00 | 3,886,657,817.55 | - |
| Total | 2,925,310,036.59 | 1,292,850,000.00 | 544,982,046.88 | 137,200,000.00 | 4,625,942,083.47 | - |
Other notes:
None
4. Operating revenue and operating cost
(1). Overview of operating revenue and operating cost
√Applicable □Not Applicable
Unit: RMB
| Item | Amount in the current period | Amount in the previous period | ||
| Revenue | Cost of sales | Revenue | Cost of sales | |
| Main business | 2,538,880,872.96 | 944,011,791.40 | 2,323,724,833.35 | 979,994,093.76 |
| Other businesses | 383,244,529.97 | 118,870,105.91 | 680,736,868.13 | 77,147,542.46 |
| Total | 2,922,125,402.93 | 1,062,881,897.31 | 3,004,461,701.48 | 1,057,141,636.22 |
(2). Revenue generated from contracts
√Applicable □Not Applicable
Unit: RMB
| Classified by type of contract | Total |
| Types of goods | |
| The use of shops in the Commodity City and its supporting services | 2,442,029,375.27 |
| Hotel accommodation and catering services | 151,717,051.19 |
| Revenue from use fees | 100,190,909.74 |
| Other services | 8,074,777.37 |
| Classified by business area | |
| Chinamainland | 2,702,012,113.57 |
| Classified by contract period | |
| Revenue confirmed at certain time point | |
| Hotel catering services | 100,740,246.11 |
| Other services | 7,806,164.06 |
| Revenue confirmed during certain time period | |
| The use of shops in the Commodity City and its supporting | 2,442,029,375.27 |
| services | |
| Hotel accommodation service | 50,976,805.08 |
| Revenue from use fees | 100,190,909.74 |
| Other services | 268,613.31 |
| Total | 2,702,012,113.57 |
Description of the income from contracts:
√Applicable □Not Applicable
The income recognized in the current year and included in the opening book value ofcontractual liabilities is as follows:
Unit: RMB
| Type of contract | Current period |
| The use of shops in the Commodity City and its supporting services | 2,252,809,691.96 |
| Hotel accommodation service | 13,367,212.91 |
| Other services | 9,059,873.51 |
| Total | 2,275,236,778.38 |
(3). Contract performance obligations
√Applicable □Not Applicable
The information related to the performance obligations of the Group is as follows:
The use of shops in the Commodity City and its supporting servicesThe contractual performance obligation is fulfilled when providing the use of shops in theCommodity City and the supporting services for business. For the use of shops in the CommodityCity and the supporting services for business, the progress of contract performance is determinedbased on the number of using days of the shops. Customers usually need to pay in advance beforethe use of shops in the Commodity City and the supporting services for business are provided.Hotel accommodation businessThe performance obligation is fulfilled when providing hotel accommodation services. For thehotel accommodation business, the progress of contractual performance is determined based onthe number of days of stay. For hotel accommodation services, a partial deposit is collected fromthe customer first, and the remaining contract price is usually collected upon the completion of thehotel accommodation services.
Hotel catering businessThe performance obligation is fulfilled when the hotel catering services are provided. Thecontract price for hotel catering services is usually charged when the hotel catering services areperformed.
Fixed -time paid funding servicesThe performance obligation is fulfilled when the fixed-time paid funding service is provided. Forthe fixed-time paid funding service, the progress of contractual performance is determined based onthe number of using days of the fund. For the fixed-time paid funding service, the contract price isusually charged regularly as agreed in the contract.
(4). Amortization to remaining contract performance obligations
□Applicable √Not Applicable
Other notes:
As of December 31, 2021, the transaction price allocated to the remaining performanceobligations was RMB 3,029,673,931.75. The Group expects that this amount will be recognized asan income in the coming 5 years with the progress of relevant service provision.
5. Investment income
√Applicable □Not Applicable
Unit: RMB
| Item | Amount in the current | Amount in the |
| period | previous period | |
| Income from long-term equity investment with the cost method | 40,000,000.00 | - |
| Income from long-term equity investment calculated with the equity method | 544,982,046.87 | 64,824,176.63 |
| Investment income from disposal of long-term equity investment | - | 551,295,000.00 |
| Dividend income from other equity instruments investment during holding period | 12,542,733.80 | 10,034,187.04 |
| Investment income from disposal of held-for-trading financial assets | 67,265.74 | 377,061.16 |
| Investment income from disposal of wealth management products | - | 461,232.89 |
| Income acquired from other non-current financial assets during the holding period | 728,950.32 | 31,738,134.32 |
| Total | 598,320,996.73 | 658,729,792.04 |
Other notes:
None
6. Others
□Applicable √Not Applicable
XVIII. Supplements
1. Detailed statement of current non-recurring items
√Applicable □Not Applicable
Unit: RMB
| Item | Amount | Remarks |
| Gain or loss from the disposal of non-current assets | -561,416.89 | |
| Government grants that are recognized in the current profit or loss, excluding government grants that are closely related to the businesses of the Company and are provided in a fixed amount or quantity according to the unified national standards | 23,559,898.01 | Please refer to details of other income and government grants accounted for profit or loss for the current period |
| Cash occupation fees charged from non-financial enterprises that are recognized in the current profit or loss | 107,299,598.45 | Fees paid for using fund collected from joint ventures including Tonghui Shangbo and Handing Shangbo |
| Gain or loss from changes in fair value of held-for-trading financial assets, derivative financial assets, financial liabilities held for trading and derivative financial liabilities, and investment income from the disposal of held-for-trading financial assets, derivative financial assets, financial liabilities held for trading, derivative financial liabilities and other debt instruments, except for effective hedging during the ordinary course of business | 7,298,587.58 | Mainly due to gains or losses from the changes in fair value arising from the holding of held-for-trading financial assets and other non-current financial assets |
| Net income from other non-operating activities | 3,504,923.76 | |
| Other profit and loss items that meet the | 1,604,200.49 |
| definition of non-recurring profit and loss | ||
| Less: effect of income tax | 28,698,936.71 | |
| Effect of minority interest | 1,718,948.89 | |
| Total | 112,287,905.80 |
Explanations shall be made for the non-recurring items identified by the Company according theExplanatory Announcement No. 1 on Information Disclosure by Companies Publicly OfferingSecurities – Non-recurring Items, and for the Company identifying the non-recurring itemsenumerated in the Explanatory Announcement No. 1 on Information Disclosure by CompaniesPublicly Offering Securities – Non-recurring Items as recurring items.
□Applicable √Not Applicable
2. ROE and EPS
√Applicable □Not Applicable
| Profits in the reporting period | Weighted average ROE (%) | EPS | |
| Basic EPS | Diluted EPS | ||
| Net profits attributable to common shareholders of the Company | 9.38 | 0.25 | 0.25 |
| Net profits attributable to common shareholders of the Company after deducting non-recurring gains and losses | 8.59 | 0.22 | 0.22 |
3. Differences in accounting data between foreign and Chinese accounting standards
□Applicable √Not Applicable
4. Others
□Applicable √Not Applicable
Chairman of Board of Directors: ZHAO WengeDate of approving by the Board of Directors for release: March 22, 2022
Amendment
□Applicable √Not Applicable