OFFCN EDUCATION TECHNOLOGY CO., LTD.
2020 Semi-Annual Report
Stock Code: 002607Stock Abbr.: OFFCN EDU
August, 2020
Chapter I. Important Notes, Contents and DefinitionsWhether directors, supervisors or senior managers have any objection to the contents of this semi-annual report orcannot guarantee its authenticity, accuracy and completeness.
□ Yes √ No
The board of directors, the supervisor committee, the directors, supervisors, and senior management of thecompany shall hereby guarantee the authenticity, accuracy and completeness of this semi-annual report withoutmisrepresentations, misleading statements, or material omissions, and bear individual and joint legal liabilities.Wang Zhendong, the Company’s legal representative, Shi Lei, the responsible person in charge of accountingwork, and Luo Xue, the person in charge of the accounting department, hereby declare that the financial report inthis semi-annual report is authentic, accurate and complete.All directors attended the board meeting approving this semi-annual report.Non-standard audit report
□Applicable √ Not applicable
Risk tips of the future planning involved in the semi-annual report
√Applicable □ Not applicable
The forward-looking statements on future plans involved in this semi-annual report do not constitute a substantialcommitment to investors. Please pay attention to the potential investment risks.Whether the Company needs to comply with the disclosure requirements of a particular industry.NoPlan of semi-annual profit distribution or plan of increasing share capital by converting capital reserves reviewedby the board of directors within reporting period.
□Applicable √ Not applicable
The Company plans not to distribute cash dividends, bonus shares, nor to increase share capital by convertingcapital reserves.Note: The Company’s 2020 semi-annual report is prepared and published in Chinese version, and the Englishversion is for reference only. Should there be any inconsistency between the Chinese version and English version,the Chinese version shall prevail.
Contents
Chapter I. Important Notes, Contents and Definitions ................................................................................... 2
Chapter II. Corporate Profile & Key Financial Indicators .............................................................................. 6
Chapter III. Corporate Business Summary ..................................................................................................11
Chapter IV. Discussion and Analysis of Corporate Operating ........................................................................16
Chapter V. Significant Events ...................................................................................................................30
Chapter VI. Changes in Shares and Information about Shareholders ..............................................................62
Chapter VII. Preferred Shares ...................................................................................................................70
Chapter VIII. Convertible Corporate Bonds ................................................................................................71
Chapter IV. Information of Directors, Supervisors and Senior Executives .......................................................72
Chapter X. Corporate Bonds .....................................................................................................................73
Chapter XI. Financial Report ....................................................................................................................74
Chapter XII Documents Available for Reference ...... 223
Definitions
Term(s) | Definition |
The listed Company , The Company, Offcn Edu | Offcn Education Technology Co., Ltd. |
Yaxia Auto | Yaxia Automobile Co., Ltd. (predecessor of the listed Company) |
The Counterparty, Li Yongxin and other 10 Counterparties, All Shareholders of Offcn Ltd. | Lu Zhongfang, Li Yongxin, Wang Zhendong, Aerospace Industry, Guangyin Venture, Kerui Technology Innovation, Guo Shihong, Liu Bin, Zhang Yongsheng, Yang Shaofeng, Zhang Zhi’an |
This major assets restructuring, This transaction, This restructuring | Base on the assessment, Yaxia Auto takes all assets and liabilities other than retained assets as the exchange-out assets to swap the equivalent portion of 100% equity of Offcn which held by Li Yongxin and other 10 counterparties, and the swapping deficiency is settled by issuance of Yaxia Auto shares according to the proportion of shareholding. At the same time, Yaxia Industrial transfers 80,000,000 and 72,696,561 Yaxia Auto shares to Offcn Partnership and Li Yongxin respectively. All shareholders of Offcn entrust Yaxia Auto to directly deliver the exchange-out assets to Yaxia Industrial or its designated third party as the consideration for the transfer of 80,000,000 shares to Offcn Partnership, and Li Yongxin offers RMB1 billion in cash as the consideration for the transfer of 72,696,561 shares. |
Retained Assets | In this transaction, the retained assets of the listed Company as of the evaluation base date, including: 18% shares of Shanghai Zuihuibao Network Technology Co., Ltd. 7.81% shares of Anhui Ningguo Rural Commercial Bank Co., Ltd.; 12 cases of state-owned land use rights and attached properties and construction in process on the land. |
Exchange-out Assets | All assets and liabilities of Yaxia Auto except retained assets |
Yaxia Industrial | Anhui Yaxia Industrial Co., Ltd. |
Phase I Employee Stock Ownership Plan | Phase I employee stock ownership plan of Yaxia Auto Co., Ltd. |
Yaxia Industrial and Persons Acting in Concert | Yaxia Industrial, Zhou Xiayun, Zhou Hui, Zhou Li, Phase I employee stock ownership plan |
Aerospace Industry | Beijing Aerospace Industry Investment Fund (Limited Partnership) |
Guangyin Venture | Beijing Guangyin Venture Capital Center (Limited Partnership) |
Kerui Technology Innovation | Beijing Kerui Technology Innovation Investment Center (Limited Partnership) |
Offcn Partnership | Beijing Offcn Future Information Consulting Center (Limited Partnership), established by all shareholders of Offcn Ltd. in accordance with the shareholdings ratio, which is used to |
Term(s) | Definition |
undertake 80,000,000 shares of the listed Company transferred by Yaxia Industrial. | |
Offcn Ltd. Beijing Offcn Predecessor of Beijing Offcn | Beijing Offcn Education Technology Co., Ltd. (predecessor: Beijing Offcn Education Technology Stock Co., Ltd.) |
Profit forecast compensation agreement | Profit forecast compensation agreement.signed by Yaxia Auto and Lu Zhongfang, Li Yongxin, Wang Zhendong, Guo Shihong, Liu Bin, Zhang Yongsheng, Yang Shaofeng, Zhang Zhi’an. |
CSRC | China Securities Regulatory Commission |
Company Law | Company Law of the People’s Republic of China |
Securities Law | Securities Law of the People’s Republic of China |
Articles of Association | Articles of Association of Offcn Education Technology Co., Ltd. |
RMB | Chinese yuan |
The Live Program | Students can watch real-time online teaching (including but not limited to video, audio., PPT, animation, etc.) on the Internet within a fixed time. During the teaching process, interaction among teachers and students can be realized through voice or text. |
Chapter II. Corporate Profile & Key Financial Indicators
Section I. Corporate profile
Stock Abbreviation | OFFCN EDU | Stock Code | 002607 |
Stock Abbreviation after Changed | |||
Stock Exchange | Shenzhen Stock Exchange | ||
Name of the Company in Chinese | 中公教育科技股份有限公司 | ||
Abbreviation of the Company’s Name in Chinese | 中公教育 | ||
Name of the Company in English | Offcn Education Technology Co., Ltd. | ||
Abbreviation of the Company’s Name in English | OFFCN EDU | ||
Legal Representative of the Company | Wang Zhendong |
Note: if the stock abbreviation of the Company changes during the period from the end of the reporting period tothe disclosure date of the semi-annual report, the changed stock abbreviation shall be disclosed at the same time.Section II. Contact information
Secretary of the Board | Representative of Securities Affairs | |
Name | Gui Hongzhi | Gu Pan |
Address | Block B, Hanhua Century Mansion, No.23 Xueqing Road, Haidian District, Beijing, China | Block B, Hanhua Century Mansion, No.23 Xueqing Road, Haidian District, Beijing, China |
Tel. | 010-83433677 | 010-83433677 |
Fax | 010-83433666 | 010-83433666 |
ir@offcn.com | ir@offcn.com |
Section III. Other information
1. Company contact information
Whether the Company’s registered address, office address and its postal code, website and/or email addresschanged during the reporting period
□ Applicable √ Not applicable
The Company’s registered address, office address and its postal code, website and email address remain the sameduring this reporting period. Details can be found in 2019 Annual Report.
2. Location of information disclosure and storage
Whether location of information disclosure and storage changed during the reporting period
□ Applicable √ Not applicable
The newspaper designated by the Company for information disclosure, website designated by CSRC forsemi-annual report publishing, and storage location of this semi-annual report remain the same during thereporting period. Details can be found in 2019 Annual Report.
3. Other relevant information
Whether other relevant information changed during the reporting period
□Applicable √Not applicable
Section IV. Key accounting information and financial indicatorsDoes the Company needs to adjust its financial information retrospectively or restate its accounting information ofprevious year?
□ Yes √ No
Current reporting period | Same period of the previous year | Increase/decrease in current reporting period over same period of the previous year | |
Revenue (RMB) | 2,807,980,480.60 | 3,637,419,515.48 | -22.80% |
Net profit attributable to shareholders of the listed Company (RMB) | -233,026,645.16 | 493,025,465.15 | -147.26% |
Net profit attributable to shareholders of the listed Company after deducting non-recurring gains or losses (RMB) | -367,542,382.83 | 472,434,917.34 | -177.80% |
Net cash flow from operating activities (RMB) | 4,063,675,504.19 | 4,354,766,798.53 | -6.68% |
Basic earnings per share (RMB/share) | -0.040 | 0.08 | -150.00% |
Diluted earnings per share (RMB/share) | -0.040 | 0.08 | -150.00% |
Weighted average return on assets | -9.00% | 16.56% | -25.56% |
End of current reporting period | End of the previous year | Increase/decrease at the end of this reporting period over end of the previous year | |
Total assets (RMB) | 13,263,976,215.43 | 9,960,705,427.94 | 33.16% |
Total net assets attributable to shareholders of the listed Company (RMB) | 1,745,243,405.30 | 3,431,545,903.82 | -49.14% |
The total share capital of the Company as of the previous trading day before disclosure:
The total share capital of the company as of the previous trading day before disclosure(share) | 6,167,399,389 |
Fully diluted earnings per share using latest share capital:
Dividend paid for preferred shares | 0.00 |
Fully diluted earnings per share using latest share capital (RMB/share) | -0.0378 |
Section V. Differences of accounting data under domestic and overseas accounting standards
1. Differences between net profits and net assets disclosed in the financial reports under Chinese accountingstandards and international accounting standards :
□ Applicable √ Not applicable
There is no difference between the net profits and net assets disclosed in the financial reports of the Companyunder Chinese accounting standards and international accounting standards during the reporting period.
2. Differences between net profits and net assets disclosed in the financial reports under Chinese accountingstandards and overseas accounting standards:
□ Applicable √ Not applicable
There is no difference between the net profits and net assets disclosed in financial reports of the Company underChinese accounting standards and overseas accounting standards during the reporting period.
3. Reasons for the differences between accounting data under domestic and foreign accounting standards
□ Applicable √ Not applicable
Section VI. Items with non-recurring gains or losses and the amounts
√ Applicable □ Not applicable
Unit:RMB
Items | Amount | Note |
Disposal gains or losses of non-current assets (including the offset part of the provision for asset impairment) | 162,043.59 | |
Tax refunds, reductions and exemptions with unauthorized approval or without formal approval documents | ||
Government subsidies included in the current gains and losses (closely related to the business of the enterprise, except for government subsidies that are fixed or quantified in accordance with national unified standards) | 169,304.01 | |
Capital occupation fee charged to non-financial enterprises included in current gains or losses | ||
Profits derived from the fair value of identifiable net assets when the investment cost from the subsidiaries, associates and joint ventures is less than the investment. | ||
Gains or losses from the exchange of non-monetary assets | ||
Gains or losses from entrusting others to invest or manage assets | 90,927,476.86 | |
Provisions for impairment of any asset due to force majeure factors, such as natural disasters | ||
Gains or losses from debt reconstruction | ||
Enterprise restructuring expenses, such as personnel placement expenses, integration expenses, etc. | ||
Gains or losses from the excess of the unfair transaction price over the fair value | ||
Net profits or losses in the current period from the beginning of the period to the date of the merger arising from a business combination under common control | ||
Gains or losses arising from contingent events unrelated to the Company’s normal business operations | ||
Gains and losses on changes in fair value arising from the possession of transactional financial assets, derivative financial assets, transactional financial liabilities, and derivative financial liabilities; and the investment income from the disposal of transactional financial assets, derivative financial assets, |
transactional financial liabilities, derivative financial liabilities and other debt investments except the effective hedging business related to the company’s normal business operations. | ||
The reverse of receivables and the provision for contract assets impairment which are tested for impairment separately | ||
Gains or losses from external entrusted loans | ||
Gains or losses arising from changes in the fair value of Investment properties that are subsequently measured at the fair value model | ||
The impact of a one-off adjustment on the current gains or losses according to the requirements of taxation, accounting and other laws and regulations | ||
Custody income from entrusted operations | ||
Other non-operating income and expenses except for the items above | -93,154.28 | |
Other gains or losses items that meet the definition of non-recurring gains and losses | 43,350,067.49 | |
Less: Impact on income tax | ||
Impact on minority shareholders’ equity (after tax) | ||
Total | 134,515,737.67 | -- |
Provide explanations for classifying items of non-recurring gains and losses defined or listed in the ExplanatoryAnnouncement No. 1 for Public Company Information Disclosures – Non-recurring Gains and Losses as items ofrecurring gains and losses.
□ Applicable √ Not applicable
The Company has no non-recurring gains and losses items that are defined or listed in the ExplanatoryAnnouncement No. 1 for Public Company Information Disclosures – Non-recurring Gains and Losses during thereporting period.
Chapter III. Corporate Business SummarySection I. The Company’s main business during the reporting period
Offcn Edu is a leading full-category vocational education institution in China, and it is also the pioneer and leaderin the field of recruitment examination training. the Company's main business covers three major sectorsincluding recruitment examination training, academic qualification preparation and vocational training, and itprovides more than 100 categories of comprehensive vocational training services. The Company operates in morethan 1,300 outlets across the country, covering more than 300 prefecture-level cities, and is rapidly expanding intothousands of counties and universities.Offcn Edu mainly serves knowledge-based employment population including college students, universitygraduates, and various professionals, ranging from age 18 to 45. Employment and vocational improvement aretheir two core demands. Vocational skills determines labor productivity which is the key to China's success inovercoming the “middle income trap”. Employment is not only a barometer of economic growth, but also afulcrum of the entire vocational education. It is also the ultimate arena for vocational education institutions. Forthis reason, the vocational education institutions that can get closer to the employment needs in the largest scopeand to the greatest extent can get more opportunities to turn the flywheel of multi-category growth and canbecome a dominator in the overall vocational education.Currently, Offcn Edu has a large-scale full-time R&D team of more than 2,700 people, a large-scale teacher teamof more than 18,000 people, and a total staff of more than 41,000 people. Relying on outstanding team executionand nationwide vertical integration and rapid response capabilities, the Company has developed into aninnovation-driven high-growth enterprise platform.
Section II. Major Changes in Key Assets
1. Major Changes in Key Assets
Key Assets | Description on major Changes |
Equity assets | No major changes |
Fixed assets | No major changes |
Intangible assets | No major changes |
Construction in progress | No major changes |
Accounts Receivable | Mainly due to the increase in rent receivable |
Other receivables | Mainly due to deposits, guarantees, and intention fee for land purchase |
Other current assets | Mainly due to the increase in the prepaid rent and property fee |
Deferred tax assets | Mainly due to the payment of unpaid remuneration of the previous year |
Other non-current assets | Mainly due to the prepayment of renovation costs |
2. Key Overseas Assets
□ Applicable √ Not applicable
Section III. Analysis of the Company’s core competitivenessThe Company's core competitiveness is based on the formation of an enterprise platform which empowers rapidgrowth driven by the capability of vertically integrated quick response. The key driving factors are as follows:
1. Outstanding execution fosters the fast-growth culture
The team built the Company with outstanding execution, and fostered the Company's fast-growth culture througha long period of endeavoring to grow in adversity and persistently pursuing to break the growth boundary. Theteam always maintains the firm will and belief to create the future, invests audaciously, achieves economies ofscale in a highly fragmented and regionally isolated market, strives to be close to the optimal output, capturesopportunities, and confronts fluctuations. With constant self-revolution of creative destruction, the team canalways create new markets in inconspicuous places, making sustained rapid growth possible.
2. Clustered professional R&D output continuously increases the momentum for innovationAt the beginning of the career, the Company took the lead in carrying out full-time and professional R&D, basedon which it created a brand-new market. Over the past decade, the Company has fostered an expert team with richpractical experience of R&D and R&D management through front-line teaching practice and adaption to marketupgrading. Under the joint lead of the founding team and the expert team, a full-time R&D team of more than2,700 people has formed. With the expansion of categories and the involvement of different sectors, theCompany's professional R&D not only achieves the continuous division of labor under the scale effect, but alsocontinuously creates R&D cluster effect of continuous collaboration between categories, which greatly improvesthe efficiency of R&D, especially the graft efficiency of stock R&D resources for new categories and newbusinesses.
3. Rapid response capability based on the vertical integrated system supports the Company’s sustainablehigh growth structurally and efficiently.The high operation efficiency far beyond the general industries is a necessity to realize scale economy andestablish competitive barrier in the decentralized market. Therefore, vertical integrated rapid response system andcapability can best adapt to this kind of market environment. In each exam, ‘Business outlets - Headquarterscommand center - Teaching sites’ are giving responses and feedback with high frequency every day. Thus, theeffect of management and learning far above average can be realized.Vertical integrated corporate structure can not only realize the high efficiency of operation, but also be effectivelycompatible with the management impact brought by high growth and rapid business category expansion. Soinvestment in and innovation on this corporate structure has always been a central part of the management reform.At present, Offcn Edu has established more than 1,300 business outlets covering 300 prefecture-level cities withconstantly accelerating expansion. Simultaneously, the headquarters command center continues to seek the scaleeffect of management with the help of management reform and digital operation. In recent years, Offcn Edu hasalso continuously invested in the construction of large-scale one-stop bases for food, housing and learning topromote the realization of large-scale factory operation on the teaching sites.
4. “The flywheel effect of multi-categories growth” magnifies the Company’s growth prospects step by stepInvestment capacities between multi-categories gets accumulated and superposed, and the flywheel effect of
multi-categories growth constantly increases, and the development of new and old categories mutually amplifiesinvestment adequacy, thus a stronger ability of operating infrastructure is jointly promoted .At present, the flywheel effect of growth has expanded to involve the three sectors of recruitment examinationtraining, academic qualification preparation and vocational training, and magnified the Company’s growthprospects step by step. The sector of academic qualification preparation will become an important impetus forgrowth in 3 to 5 years while the sector of vocational training will become the largest and the most significantcontributor to the growth of the Company in 5 to 10 years.
5. Digital operation forms the enterprise platform with “real-time situational awareness”The team’s exploration for digital operation has lasted for more than 15 years, and in recent years, the investmentscale for digital operation infrastructure has increased significantly. One reason is to meet the management needsfor fast growth and rapid expansion of categories. The other reason lies in the great adaptability of verticallyintegrated fast response system to the digitization. After the system was integrated with the digitization in depth, itgenerated higher operating efficiency and significantly improved the front and background response frequencyfrom units of days to a level close to “real-time situational awareness”, which greatly enhanced the Company’score competitiveness based on speed economy.
6. The values of kindness and altruism allow the Company to maintain strong organizational cohesion inhigh growthAs a knowledgeable staff-intensive vocational education institution, the Company has established a concise andeffective corporate culture in the long journey of arduous entrepreneurship, with the core value of “Be Kind & DoRight” and advocating altruism. Not only has it become a company system, but also the founding team has takenthe lead to set an example, driven it step by step, and unswervingly implemented it in the operation, making thevalues of Offcn Edu ubiquitous and flourishing in the enterprise. This distinctive and tangible corporate cultureallows the company to maintain strong organizational cohesion in high growth.
7. Offcn Edu strives to strengthen the Party's construction to promote the healthy and vigorousdevelopment of the CompanyFrom the establishment of the Party committee in 2018 to the establishment of the first Party school ofnon-public-owned enterprise in 2019, the Party committee of Offcn Edu has fully utilized the Company’sadvantages of knowledge, theory, and technology and actively promotes and implements the Party’s politicalroutes, principles, and policies to employees and students. Meanwhile, Offcn Edu focuses on the integration of theParty building of non-public enterprises and corporate culture construction to promote the healthy and vigorousdevelopment of the enterprise.As of June 30, 2020, the Company had more than 10,000 Party members, accounting for more than one-fifth ofthe total number of employees.
Chapter IV. Discussion and Analysis of Corporate Operating
Section I. OverviewIn the first half of this year, the outbreak of the pandemic led to the national suspension from work and classes. Asa result, a large number of recruitment examinations were postponed.These significant changes have had a hugeimpact on the entire education and training industry. With the gradual lifting of the pandemic, the industry hasfully recovered and achieved rapid growth.In response to the new situation after the pandemic, the central government put forward policies to ensure stabilityand security in six areas (Ensure stability in employment, financial operations, foreign trade, foreign investment,domestic investment, and expectations; ensure security in job, basic living needs, operations of market entities,food and energy security, stable industrial and supply chains, and the normal functioning of primary-levelgovernments). These policies make the "employment" a top priority, which is evident in three measures. The firstis to expand employment in public sectors. The number of civil servants, governmental institutions, state-ownedenterprises and other recruitment increased by more than 20% year-on-year. The second is to expand admissionsof postgraduate students, college students applying for university study, students pursuing second bachelor'sdegrees, and students aimed at vocational education, the number of whom has reached 1.7 million. Thesemeasures indicate a clear expansion trend in the mid-term and long-term recruitment sector. In this case, theeducation and training industry will still be developing at a medium and high speed in the next 5 to 10 years.Faced with the sudden outbreak of the pandemic, which had a huge impact on the operating environment, theCompany responded quickly and effectively to maximize the enterprise’s strengths of digital resources, toconsiderably increase the total number of online classes, and to fully explore the potential of online and offlinecurriculum integration, which not only ensures the continuity of operation and teaching, but also strengthens theenterprise’s leading force of online and offline curriculum integration, an innovative product. Besides, theCompany continues to expand teacher-reserve and branches, focusing on the long-term expansion trend. Due tothe postponement of related examinations, part of the revenue was delayed for nearly 4 months, which made theCompany’s recognized operating revenue decreased during the reporting period, compared with the same periodof last year. With the resumption of all kinds of recruitment examinations, the Company has entered a period ofexplosive growth.The number of college graduates reached 8.74 million in this year of 2020, creating a new record. However, thenationwide pandemic has further increased employment pressures. Two decades after the expansion of universityenrollment, the employment population structure has undergone significant changes, and the number of collegegraduates has reached more than half of the total of new employees.The focus of stabilized employment will alsobe shifted from the general job seekers to college graduates.With the changes of the international situation, the central government put forward a new policy of internal
circulation; and an important support for the development of internal circulation is the new urbanization. The newurbanization is not only the reconfirmation of the trend of mid-term and long-term urbanization, but also therefinement of the urbanization path, which presents diverse patterns of urban clusters with different levels, such asmetropolitan areas, central cities, counties, featured towns ,etc, which can further expand the developmentspace.More importantly, the new urbanization will also be a deepening process and the most important aspect ofwhich is the deepening and upgrading of public services.Therefore, the following expansion of public sector’srecruitment will be strongly guided by the new policy on internal circulation..
1.The postponement of recruitment examinations result in the delay of income recognition, but the trend ofenrollment expansion is again confirmed.The civil servant provincial joint examination was postponed for nearly 4 months, and other recruitmentexaminations were also postponed to a certain extent in the first half of this year. In the case that the agreementclass accounted for a relatively high proportion, the delay of the examination resulted in a significant discrepancybetween the level of revenue recognition for the reporting period and that of actual operation.During the reportingperiod, the Company achieved a total income of RMB 2,807,980,480.60 , down 22.80% fromRMB3,637,419,515.48 in the same period of last year.Contrary to the decrease in recognized revenue, the number of students increased by 37.08% year-on-year, from1,788,952 to 2,452,252 during the reporting period; the contract liabilities (advanced payment after deducting theVAT ) was RMB 7,222,148,935.39, an increase of 31.50% over the same period of last year.Normally, the first half of the year is an intensive period for civil service examinations. As a result of thepandemic, the focus of the civil service examinations was delayed by 3-4 months and moved back to the secondhalf of the year. Nevertheless, not only did the examination resume successfully, but the number of recruits alsoachieved a more consistent or even higher growth rate than expected. Compared with civil servants recruitment,there is much more room for recruitment in public services such as teachers, doctors and police. Therefore, thereconfirmation of expansion trend in civil servants recruitment clearly indicates the expansion trend in therecruitment of public service categories.The key operating resources and performance indicators are shown in the table below:
Item | Indicators | At the end of the reporting period | At the end of last year | Change at the end of this reporting period compared with the end of last year |
Operating resources | Directly operated branches | 1,335 | 1,104 | 20.92% |
Employees | 41,911 | 35,209 | 19.03% | |
R&D personnels | 2,702 | 2,051 | 31.74% | |
Teaching professionals | 18,036 | 13,475 | 33.85% |
Item | Indicators | At the end of the reporting period | Same period last year | Year-on-year change (%) |
Business & Revenues | Revenue of face-to-face training (RMB) | 1,622,095,227.36 | 3,167,825,822.38 | -48.79% |
Revenue of online training (RMB) | 1,166,091,772.30 | 444,519,141.21 | 162.33% | |
Training Students | 2,452,252 | 1,788,952 | 37.08% | |
Revenue (RMB) | 2,807,980,480.60 | 3,637,419,515.48 | -22.80% | |
Net profits Attributable to Shareholders of the Company(RMB) | -233,026,645.16 | 493,025,465.15 | -147.26% |
2. The outbreak of Covid-19 is preventable, controllable, and predictable, and the Company has establisheda comprehensive response system as a countermeasure, which greatly enhanced its leading force ineducation and training industry.The outbreak of the pandemic has caused great distress to the whole education industry. With the advantages ofthe enterprise’s platform and its excellent execution, the Company quickly created an effective response system,which not only enabled itself to go through the special period smoothly, but also took the opportunity to expand itsleading force and dominance.In response to the problem that face-to-face teaching could not be carried out smoothly within a certain period oftime, the Company made every effort to explore the digital resources in the enterprise platform. With theadvantageous and standardized teaching and researching ability as a lever, digital penetration is carried out on themain course products, which again strengthens the leading advantage of online and offline integrated curriculum,so that more students can obtain the convenience of online learning and the effectiveness of face-to-face learningat the same time. As a result, the number of students in the reporting period increased significantly.After the second quarter, with the pandemic gradually put into normalized prevention and control, people all overthe country return to work and production. The second round of the epicemic in Beijing, Dalian and other placeshas been controlled rapidly and effectively, which once again reflects the relevant judgment that the pandemic ispreventable, controllable and predictable.
3. Focusing on the future long-term growth, the Company significantly expands talent reserve and branches,though moving against general trend.Based on a clearer med-term and long-term trends in recruitment expansion and the expectation that the pandemiccan be prevented and controlled, the company did not reduce the number of staff or eliminate branches butconsiderably expanded talent reserve and the scale of branches.
At the end of this reporting period, the total number of employees of the company was 41911, an increase of 6,702compared with 35,209 in 2019, an increase of 19.03%. Among them, there are 18,036 teaching professionals,4,561 more than 13,475 in 2019, an increase of 33.85%. There are 2,702 full-time R&D personnels, 651 morethan 2,051 in 2019, an increase of 31.74%.There are 1,335 outlets, 231 more than 1,104 in 2019, an increase of 20.92%.
4. The “take-off action” of the new business sector has been fruitful, and the capacity of talent reserve hasbeen gradually released.During the reporting period, new businesses such as postgraduate entrance examinations and medical services stillremained highly active, and new businesses seldom adopted the product model of agreement classes. The revenuerecognition was not affected by examination delays,thus driving the comprehensive sequence in which they werelocated with revenue increased by 26.04% year-over-year increase.At the same time, as delays of recruitmentexaminations led to a decrease in revenue recognition of the relevant sequences,the revenue share of integratedsequence increased to 34.58 percent from 21.18 percent in the same period of last year .Around 2019, the Company completed a round of intensive investments in resources of the active new businesses,especially in key categories such as postgraduate entrance examinations to achieve the leading scale of coreteaching and research resources at one time.In addition, starting from the second half of 2019, the Company hastaken "take-off action" for the new business segments, investing more management resources in the newbusinesses from the top level.The outbreak of the pandemic strengthened the Company's determination to expand its operations across sectors,which also verified the rationality of strengthening the development of the marketing part for recruitmentexaminations. As a result, the special actions have been further strengthened and deepened.It has also boosted thecurrent performance of related categories,and more importantly, further improved the overall layout advantages,which is conducive to realizing the medium and long-term sector’s rotating growth trend.In terms of the external situation, the academic qualification improvement sector has directly benefited from thestrengthening of the employment stabilization policy since the pandemic. The Ministry of Education has increasedits enrollment for further studies this year. The three expanded enrollments for postgraduates, undergraduates andsecond bachelors will absorb more than 1.7 million people, including about 1.4 million fresh graduates. Accordingto relevant departments, 189,000 more graduate students will be admitted this year. It is estimated that theenrollment expansion will exceed 20%. The enrollment expansion of ordinary junior college students is 322,000.The enrollment expansion will mainly favor college applicants who will apply for majors that are promoted bynational strategy or urgently needed by the society; and the enrollment expansion will take place in colleges anduniversities which are in the central and western regions and northeast China.Section II. Core business analysis
OverviewWhether the content is the same as the information disclosed in the “Section I. Overview” of “Chapter IV.Discussion and Analysis of Corporate Operating”:
√ Yes □ No
Refer to “Section I. Overview” of “ Chapter IV. Discussion and Analysis of Corporate Operating”.Year-on-year changes of major financial data
Unit: RMB
Current Reporting Period | Same period last year | Year-on-year increase or decrease | Reasons of changes | |
Revenue | 2,807,980,480.60 | 3,637,419,515.48 | -22.80% | Mainly due to the impact of the COVID-19 pandemic, which postponed the civil servant entrance examinations in most provinces and resulted in the delay of the related income. |
Operating cost | 1,452,611,180.39 | 1,545,288,459.56 | -6.00% | |
Marketing expenses | 700,817,453.92 | 675,313,099.29 | 3.78% | |
Management expenses | 518,959,454.14 | 499,631,045.91 | 3.87% | |
Financial expenses | 182,654,623.66 | 42,509,488.64 | 329.68% | Mainly due to the spike of loan interests and fees of financial institution. |
Income tax expenses | 9,055,694.44 | 101,672,138.32 | -91.09% | Mainly due to the decrease in profits. |
R&D investment | 383,227,531.01 | 304,030,157.51 | 26.05% | Mainly due to the increase of R&D personnel enlarging the labor expenditure. |
Net cash flow of business operation | 4,063,675,504.19 | 4,354,766,798.53 | -6.68% | |
Net cash flow of investment | -1,155,418,651.54 | -2,505,196,440.60 | 53.88% | Mainly due to the redemption of financial products |
Net cash flow of fund raising | -966,792,941.80 | -1,094,282,815.85 | 11.65% | |
Increase of cash and cash | 1,941,463,910.85 | 755,287,542.08 | 157.05% | Mainly due to the redemption of |
equivalents | financial products |
Whether components or origin of profits changed during the reporting period
□ Applicable √ Not applicable
Components or origin of profits did not change during the reporting periodComposition of revenue
Unit: RMB
This reporting period | Same period last year | Year-on-year increase or decrease | |||
Amount | Proportion of revenue | Amount | Proportion of revenue | ||
Revenue | 2,807,980,480.60 | 100% | 3,637,419,515.48 | 100% | -22.80% |
Sectors | |||||
Educational training | 2,788,186,999.66 | 99.30% | 3,612,344,963.59 | 99.31% | -22.82% |
Others | 19,793,480.94 | 0.70% | 25,074,551.89 | 0.69% | -21.06% |
Categories of product | |||||
Training for Civil Servant Test | 1,218,210,409.21 | 43.38% | 2,061,116,376.83 | 56.66% | -40.90% |
Training for Public Institution Test | 249,112,502.48 | 8.87% | 260,093,409.92 | 7.15% | -4.22% |
Training for Teachers’ Recruitment Test | 350,053,110.07 | 12.47% | 520,893,800.00 | 14.32% | -32.80% |
Training for other public services test and new businesses | 970,810,977.90 | 34.58% | 770,241,376.84 | 21.18% | 26.04% |
Others | 19,793,480.94 | 0.70% | 25,074,551.89 | 0.69% | -21.06% |
Regions | |||||
Northeast China | 411,190,963.24 | 14.65% | 450,418,680.94 | 12.38% | -8.71% |
North China | 505,278,366.94 | 17.99% | 559,352,002.04 | 15.38% | -9.67% |
East China | 777,042,423.85 | 27.67% | 1,158,525,187.01 | 31.85% | -32.93% |
Middle China | 311,713,998.87 | 11.10% | 393,438,273.80 | 10.82% | -20.77% |
South China | 224,764,348.31 | 8.01% | 295,686,575.61 | 8.13% | -23.99% |
Southwest China | 286,608,910.60 | 10.21% | 358,342,361.45 | 9.85% | -20.02% |
Northwest China | 271,587,987.85 | 9.67% | 396,581,882.74 | 10.90% | -31.52% |
Others | 19,793,480.94 | 0.70% | 25,074,551.89 | 0.69% | -21.06% |
Particulars of sectors, products or regions that account for more than 10% of the revenue or operating income
□ Applicable √ Not applicable
Explanation on changes in the relevant data by more than 30% year-on-year
□ Applicable √ Not applicable
Section III. Non-core Business Analysis
√ Applicable □ Not applicable
Unit: RMB
Amount | Proportion of Total Profit | Reasons | Sustainable or Not | |
Investment Income | 128,818,126.44 | -57.51% | Mainly due to the financial income and fixed deposit interest | Yes |
Gains and losses from changes in fair value | ||||
Impairment of assets | ||||
Non-operating income | 20,148.00 | -0.01% | Mainly due to the government’s subsidies in the pandemic | No |
Non-operating expenses | 93,502.28 | -0.04% | Others | No |
Section IV. Analysis of Assets and Liabilities
1. Major Changes in Asset Composition
Unit: RMB
End of the reporting period | End of the same period last year | Increase or decrease in proportion | Explanations on major changes | |||
Amount | Proportion of Total Assets | Amount | Proportion of Total Assets | |||
Monetary fund | 4,665,798,912.43 | 35.18% | 2,724,335,001.58 | 27.35% | 7.83% | Mainly due to the redemption of financial products |
Accounts receivable | 14,349,954.64 | 0.11% | 2,721,638.09 | 0.03% | 0.08% | Mainly due to the increase of rent receivable |
Inventories | ||||||
Investment | 678,502,813.80 | 5.12% | 688,475,053.53 | 6.91% | -1.79% | No major changes |
properties | ||||||
Long-term equity investment | ||||||
Fixed assets | 870,207,450.02 | 6.56% | 672,429,601.44 | 6.75% | -0.19% | Refer to section VII, item 21 in chapter XI. financial report of this semi-annual report for explanations on changes. |
Construction in progress | 811,011,730.47 | 6.11% | 653,580,160.32 | 6.56% | -0.45% | Refer to section VII, item 22 in chapter XI. financial report of this semi-annual report for explanations on changes. |
Short-term Loan | 3,457,000,000.00 | 26.06% | 2,867,000,000.00 | 28.78% | -2.72% | For purchasing and constructing training centers; (2) for preparation of uncertainties in opening face-to-face classes due to the pandemic. |
Long-term Loan |
2. Assets and liabilities measured at fair value
√ Applicable □ Not applicable
Unit: RMB
Items | Opening Balance | Gains and losses from the changes in fair value during the period | Cumulative changes in fair value attributed to equity | Impairment accrued in the current period | Amount of purchase in the current period | Amount of sales in the current period | Other Changes | Closing Balance |
Financial Assets | ||||||||
1.Transactional financial assets (excluding derivative financial assets) | 1,892,562,787.50 | 17,969,488,090.00 | 17,567,171,173.89 | 2,294,879,703.61 | ||||
2. Derivative financial assets | ||||||||
3. Other debt investments | ||||||||
4.Investment in other | 155,450,0 | 7,350,000.00 | 162,800,000 |
equity instruments | 00.00 | .00 | ||||||
Subtotal of financial assets | 2,048,012,787.50 | 7,350,000.00 | 17,969,488,090.00 | 17,567,171,173.89 | 2,457,679,703.61 | |||
Investment properties | ||||||||
Productive biological assets | ||||||||
Others | ||||||||
Total | 2,048,012,787.50 | 7,350,000.00 | 17,969,488,090.00 | 17,567,171,173.89 | 2,457,679,703.61 | |||
Financial liabilities | 0.00 | 0.00 | 0.00 |
Others changesNone.Whether the Company’s major assets measurement attributes have significant changes during the reporting period
□ Yes √ No
3. Assets with restricted rights as of the end of the reporting period
Items | Book value at the end of the period | Reasons for Restriction |
Non-current assets maturing within one year | 1,500,000,000.00 | Pledged Loan |
Total | 1,500,000,000.00 |
Section V. Analysis of Investments
1. Overview
√ Applicable □ Not applicable
Amount of investment during the reporting period (RMB) | Amount of investment in the same period of last year | Variation |
18,542,275,652.81 | 12,023,712,775.12 | 54.21% |
2. Major equity investment obtained during the reporting period
□ Applicable √ Not applicable
3. Major non-equity investment ongoing during the reporting period
√ Applicable □ Not applicable
Unit: RMB
Project | Zhongcheng Real Estate Project | Offcn Office Building in Fushun | Total |
Investment Method | Self-built project | Self-built project | -- |
Whether it is a fixed asset investment | Yes | Yes | -- |
Industries involved in investment projects | Educational technology development, service and culture consultation | Educational Technology Development, Service and Culture Consultation | -- |
Amount of investment in this reporting period | 37,502,650.03 | 10,645,266.56 | 48,147,916.59 |
Cumulative amount of investment as of the end of the reporting period | 313,408,135.12 | 123,665,491.93 | 437,073,627.05 |
Sources of funds | Self-owned fund | Self-owned fund | -- |
Project progress | 69.65% | 37.47% | -- |
Expected income | 0.00 | 0.00 | 0.00 |
Cumulative income as of the end of the reporting period | 0.00 | 0.00 | 0.00 |
Reasons for not reaching the planned progress and expected income | Not Completed | Not Completed | -- |
Date of disclosure (If any) | -- | ||
Index of disclosure (If any) | -- |
4. Financial Assets Measured at Fair Value
√ Applicable □ Not applicable
Unit: RMB
Asset Type | Trust Products | Others | Total |
Initial investment cost | 6,324,828,090.00 | 13,661,810,000.00 | 19,986,638,090.00 |
Gains and losses from changes in fair value during the period | 0.00 | 0.00 | 0.00 |
Cumulative changes in fair value attributed to equity | 7,350,000.00 | 7,350,000.00 | |
Amount of purchase during | 5,247,828,090.00 | 12,721,660,000.00 | 17,969,488,090.00 |
the reporting period | |||
Sales amount during the reporting period | 4,822,611,173.89 | 12,744,560,000.00 | 17,567,171,173.89 |
Cumulative income of investment | 69,037,526.25 | 21,889,950.60 | 90,927,476.85 |
Closing Balance | 1,502,216,916.11 | 967,250,000.00 | 2,469,466,916.11 |
Sources of Funds | Self-owned fund | Self-owned fund | -- |
5. Financial assets investment
(1) Securities investment
□ Applicable √ Not applicable
There is no securities investment during the reporting period
(2) Derivatives investment
□ Applicable √ Not applicable
There is no derivatives investment during the reporting period.
6. Use of raised funds
□ Applicable √ Not applicable
There is no use of raised funds during the reporting period.
7. Major project invested by non-raised funds
□ Applicable √ Not applicable
There is no major project invested by non-raised funds during the reporting period.
Section VI. Sale of Major Assets and Equity
1. Sales of major assets
□ Applicable √ Not applicable
There is no sales of major assets during the reporting period.
2. Sales of major equity
□ Applicable √ Not applicable
Section VII. Analysis of major shareholding companies
√ Applicable □ Not applicable
Major subsidiaries and shareholding companies that have impact on more than 10% net profit of the Company
Unit: RMB
Company name | Beijing Offcn Education Technology Co., Ltd. |
Company type | Subsidiary |
Major business | Educational technology consultation, technology development, technical services, technology promotion, technology transfer; educational consultation, cultural consultation; enterprise management consultation; enterprise investment |
Registered capital | 90,000,000.00 |
Total assets | 12,021,201,387.37 |
Net assets | 655,359,632.61 |
Revenue | 2,798,594,797.14 |
Operating income | -206,588,270.39 |
Net profit | -215,834,413.14 |
Acquisition and disposal of subsidiaries during the reporting period.
√ Applicable □ Not applicable
Company name | Method of acquisition and disposal of subsidiaries in the reporting period | The Impact on the overall business operation and performance |
Shaanxi Offcn Education Technology Co.,Ltd. | New establishment | Not yet operated; no impact on overall performance |
Beijing Offcn Future Education Technology Co.,Ltd. | New establishment | Not yet operated; no impact on overall performance |
Section VIII. Structured Entities Controlled by the Company
□ Applicable √ Not applicable
Section IX. Prediction on business performance from January to September 2020Alarm and explanations on that the cumulative net profit from the beginning of the year to the end of the nextreporting period may be a loss or have a significant change compared with the same period of the last year.
□ Applicable √ Not applicable
Section X. Risks and countermeasures
1. Risks of macroeconomic fluctuations
At present, the domestic pandemic caused by the novel coronavirus has not completely ended, and the social andeconomic development is still facing the influence of many uncertain factors. Vocational education is an importantguarantee for promoting high-quality economic and social development, and it will also be affected bymacroeconomic conditions. Future macroeconomic fluctuations will have a certain impact on the overall
development of country's vocational education industry and company performance.Countermeasures: Faced with complex and changeable potential market risks, the company continuously upgradesits vertical integrated rapid response capabilities, improves its risk management and control system, closelymonitors market development and changes, and makes forward-looking plans for this, and adjusts its strategicdirection and focus in time Etc., to minimize the impact of changes in the external market environment on thecompany’s business and future development.
2. Risks of policies
The prosperity of the vocational education industry has a high correlation with the policy environment, and iseasily affected by vocational education policies. In recent years, in order to support the development of thevocational education industry, the state has successively issued a number of industry support and encouragementpolicies. However, if there are major changes and adjustments to relevant laws, regulations or industrial policies inthe future, it may have an impact on the development trend of the vocational education industry, which may affectthe company's future business development and performance. In addition, the company has many branches andwide distribution of training venues. It is not ruled out that in the future, relevant regulatory departments ofprovinces, autonomous regions and municipalities will issue more stringent regulations for the local education andtraining industry, which may affect the company's operations in the region.Countermeasures: In response to the above risks, the company's various branches have established a trackingresearch policy team to do in-depth analysis of various policies that have been issued. At the same time, thecompany's deep accumulated strength in independent IT development and effective digital transformation ofoperations simultaneously ensure the efficiency of information feedback. Through the upgrade and transformationof basic systems such as ERP, CRM, and teaching platforms, it is possible to obtain, perceive and predict thedirection and trend of relevant policy changes in various places in a timely manner, arrange and adjust in advance,avoid relevant policy risks, and leverage industry policies to help the company business development.
3. Risks of marketing competition
The education and training market is large and sparsely concentrated, and the initial investment scale is relativelysmall. Therefore, there are a large number of enterprises in the industry, especially in first-tier cities with relativelyconcentrated educational resources, a large base of training subjects, and relatively high income levels. Thecompetition is more intense. At the same time, with the increase in household income in the future, the public'semphasis on high-quality educational resources will continue to increase, and the industry will continue tomaintain a high level of prosperity. This is bound to cause more and more capital to flow into the education andtraining industry, leading to increasingly fierce market competition. How to effectively deal with the competitionand impact of competing products in the industry and emerging institutions is a challenge facing the company'scomprehensive development of the vocational education industry.Countermeasures:In response to the above risks, the company will continue to maintain heavy R&D investment,
continue to increase investment in technological infrastructure and technical teams, and integrate technologicalproductivity into the operating system to drive business innovation. At the same time, it will continue to explorenew subdivision tracks, create a full-category market for mid-to-high-end vocational education, and furtherenhance the company's core competitiveness in the industry. After more than 20 years of accumulation, thecompany has a fast iterative teaching and research system, offline channel resources and online layout, and hassignificant advantages in future market competition
4. Risks of operation and management
The company must face the risk of mismatch between business expansion and management capabilities. First,there is a risk that the cost of venue leasing and manpower will continue to increase, and the pursuit of rapiddevelopment will lead to the risk of a decline in the current profit level and profit rate; second, the education andtraining industry is always facing the risk of talent flow. In particular, the loss of core management and R&Dteams and key teachers may adversely affect the company's long-term stable development.Countermeasures:In response to the above risks, the company will continue to optimize the vertical integrationand rapid response management system on the one hand, enhance the work collaboration level of large-scaleknowledge workers, improve management and operation efficiency, optimize the human resource structure, andmatch the company’s business expansion strategy; on the other hand, it will attach importance to employees Theimplementation of basic rights and interests, a sound and fair and transparent performance evaluation system,provide employees with diversified compensation and incentive paths, pay attention to employees' personalgrowth, provide employees with sustainable development opportunities and growth space, and reduce the risk ofcore talent loss.
Chapter V. Significant EventsSection I. Information about the annual general meeting of shareholders and extraordinarygeneral meeting of shareholders held in the reporting period
1. General meeting of shareholders during the reporting period
Session of meeting | Type of meeting | Investor participation % | Date of meeting | Date of disclosure | Index of disclosure |
The first extraordinary general meeting in 2020 | extraordinary general meeting | 78.29% | Jan. 6, 2020 | Jan. 7, 2020 | Please refer to www. cninfo.com, Announcement of the First Extraordinary General Meeting of Shareholders 2020 (Announcement Number:2020-001 ) for details. |
2019 annual general meeting of shareholders | Annual general meeting of shareholders | 79.66% | Mar. 30, 2020 | Mar. 31, 2020 | Please refer to www. cninfo.com, Announcement of the First Annual General Meeting of Shareholders 2020(Announcement Number:2020-022 ) for details. |
2. Extraordinary general meetings convened at the request of preferred shareholders whose voting rightshave been restored
□ Applicable √ Not applicable
Section II. Profit distribution and increase of share capital from capital reserve during thereporting period
□ Applicable √ Not applicable
For the first half of the year, the Company does not plan to distribute cash dividends or bonus shares, nor to
convert equity reserves into share capital.
Section III. Commitments made by the Company’s actual controllers, shareholders, relatedparties, purchasers, and others that were fulfilled during the reporting period and thoseuncompleted as of the end of the reporting period.
√ Applicable □ Not applicable
Important commitments made by the parties involved in the major assets restructuring are as follows:
Commitment Party | Commitment Type | Main contents of commitment | Commitment time | Commitment period | Performance |
Lu Zhongfang, Li Yongxin, Wang Zhendong, Guo Shihong, Liu Bin, Zhang Yongsheng, Yang Shaofeng, Zhang Zhian | Performance commitment and compensation arrangement | 1. The profit forecast and compensation periods are the years of 2018, 2019 and 2020. 2. Performance commitment: The compensation obligors confirm and promise that the net profits attributable to the shareholders of the parent company after deducting non-recurring profits and losses under the consolidated statements of Offcn Ltd. shall not be less than 930 million RMB, 1.3 billion RMB and 1.65 billion RMB in years of 2018, 2019 and 2020 respectively. 3. The parties agree that the certified public accountants employed by Yaxia Automobile shall review the actual net profits of Offcn Ltd. after the end of each of the three fiscal years. The difference between the actual net profits of Offcn Ltd. and the net profits committed by the compensation obligors shall be reviewed and a special audit report shall be issued. At the end of the third fiscal year, an auditing agency with qualifications for executing securities and futures engaged by Yaxia Automobile will conduct an impairment test on Offcn Ltd. and issue an impairment test report, within 90 days after the certified public accountant issues a special audit report. 4. Compensation measures: (1) If the certified public accountant confirms that the actual net profits accumulated by Offcn Ltd. fails to meet the aggregate committed net profits as of the end of each | May 4, 2018 | Years of 2018, 2019 and 2020 | Performance commitments of the year 2018 and 2019 have been fulfilled. |
to Yaxia Automobile within the period specified in the notice. In case of overdue payment, the compensation obligor shall pay the late payment interest to Yaxia Automobile on the overdue portion at daily interest rate of 5?, with the continuity of obligation of compensation. | |||||
Yaxia Industry, Zhou Xiayun, Zhou Hui, Zhou Li, Phase-Ⅰ employee stock ownership plan | Letter of commitment on lock-up period | After the completion of the transaction (starting from the date of the listing of shares issued in this transaction), the company/I/the plan shall not transfer the company's shares in Yaxia Automobile within 36 months . After the completion of the transaction, the shares held by the Company/I/the plan, derived from Yaxia Automobile shares due to the distribution of stock dividends and the transfer of the capital reserve to share capital shall also comply with the above-mentioned arrangement of restricted sale of shares. If the China Securities Regulatory Commission and/or Shenzhen Stock Exchange have/has other provisions for the above-mentioned lock-up period arrangement , the company/I/the plan will adjust and implement the above-mentioned lock-up period according to the latest regulations of the China Securities Regulatory Commission and/or Shenzhen Stock Exchange. If violating the above commitments, the company/I/the plan will bear all losses caused to Yaxia Automobile. | May 4, 2018 | Jan. 31, 2022 | Under normal implementation |
Li Yongxin | Letter of Commitment on lock-up period for subscription of shares | 1. The shares of the listed Company subscribed by myself in this transaction shall not be transferred or dealt with in any other forms within 36 months from the date of the listing of the shares. Within 6 months after the listing of the shares, if the closing price of the listed Company stock is lower than the issue price for consecutive 20 trading days , or the closing price of the stock at the end of the 6 months after the listing of the shares is lower than the issue price, the lock-up period of consideration shares acquired by myself is automatically extended for 6 months. (If dividend distribution, bonus shares, transfer of | Apr. 27, 2018 | Jan. 31, 2022 | Under normal implementation |
Stock Exchange. | |||||
Lu Zhong Fang | Letter of commitment on lock-up period for subscription of shares | 1. The shares of the listed Company subscribed by myself in this transaction shall not be transferred or dealt with in any other forms within 36 months from the date of listing of the shares. Within 6 months after the listing of the shares, if the closing price of the listed Company stock is lower than the issue price for consecutive 20 trading days , or the closing price of the stock at the end of the 6 months after the listing of the shares is lower than the issue price, the lock-up period of consideration shares acquired in this transaction by myself is automatically extended for 6 months. (If dividend distribution, bonus shares, transfer of capital stock, or allotment to the listed Company occurred during the above period, the aforementioned issuance price is calculated based on the price adjusted by factors as ex-dividend and ex-rights, etc.) 2. The aforesaid share lock-up arrangement does not affect the implementation of profit compensation for this transaction, that is, when I need to make profit compensation, the listed Company has the right to relieve the lock-up of shares in corresponding amount in advance for profit compensation. 3. I promise to abide by the following provision: if the transaction is investigated by judiciary authorities or the China Securities Regulatory Commission on suspicion of misrepresentations, misleading statements, or material omissions in regard to the information provided or disclosed, the shares of the listed Company acquired in this transaction shall not be transferred until the conclusion of the investigation is clarified. 4. After the completion date of this transaction, my increased shares due to bonus shares and transfer of capital stock of the listed Company shall also comply with the foregoing requirements. 5. If the aforementioned lock-up period arrangement does | Apr. 27, 2018 | Jan. 31, 2022 | Under normal implementation |
not match the latest laws and regulations and the latest regulatory requirements of the securities regulatory institution, I agree to implement the latest laws and regulations and the requirements of the regulatory agency. 6. After the lock-up period expires, it will be implemented in accordance with the relevant regulations of the China Securities Regulatory Commission and the Shenzhen Stock Exchange. | |||||
Kerui Technology Innovation | Letter of commitment on lock-up period for subscription of shares | 1. The shares of the listed Company subscribed by the enterprise in this transaction shall not be transferred or dealt with in any other forms within 36 months from the date of listing of the shares. Within 6 months after the listing of the shares, if the closing price of the listed Company stock is lower than the issue price for consecutive 20 trading days , or the closing price of the stock at the end of the 6 months after the listing of the stock is lower than the issue price, the lock-up period of consideration shares acquired in this transaction is automatically extended for 6 months. (If dividend distribution, bonus shares, transfer of capital stock, or allotment to the listed Company occurred during the above period, the aforementioned issue price is calculated based on the price adjusted by factors as ex-dividend and ex-rights, etc.) 2. The enterprise promises to abide by the following provision: if the transaction is investigated by judiciary authorities or the China Securities Regulatory Commission on suspicion of misrepresentations, misleading statements, or material omissions in regard to the information provided or disclosed, the shares of the listed Company acquired in this transaction shall not be transferred until the conclusion of the investigation is clarified. 3. After the completion date of this transaction, the shares that the enterprise owns increased due to bonus shares and | Jul. 27, 2018 | Jan. 31, 2022 | Under normal Implementation |
transfer of capital stock of the listed Company shall also comply with the foregoing requirements. 4. If the aforementioned lock-up period arrangement does not match the latest laws and regulations and the latest regulatory requirements of the securities regulatory institution, the enterprise agrees to implement the latest laws and regulations and the requirements of the regulatory agency. 5. After the lock-up period expires, it will be implemented in accordance with the relevant regulations of the China Securities Regulatory Commission and the Shenzhen Stock Exchange. | |||||
Aerospace Industry, Guangyin Venture | Letter of commitment on lock-up period for subscription of shares | 1. The shares of the listed Company subscribed by the enterprise in this transaction shall not be transferred or dealt with in any other forms within 24 months from the date of listing of the shares. Within 6 months after the listing of the shares, if the closing price of the listed Company stock is lower than the issue price for 20 consecutive trading days , or the closing price of the stock at the end of the 6 months after the listing of the shares is lower than the issue price, the lock-up period of consideration shares acquired in this transaction is automatically extended for 6 months. (If dividend distribution, bonus shares, transfer of capital stock, or allotment to the listed Company occurred during the above period, the aforementioned issue price is calculated based on the price adjusted by factors as ex-dividend and ex-rights, etc.) 2. The enterprise promises to abide by the following provision: if the transaction is investigated by judiciary authorities or the China Securities Regulatory Commission on suspicion of misrepresentations, misleading statements, or material omissions in regard to the information provided or disclosed, the shares of the listed Company acquired in this transaction shall not be | Jul. 27, 2018 | Jan. 31, 2021 | Under normal implementation |
transferred until the conclusion of the investigation is clarified. 3. After the completion date of this transaction, the shares that the enterprise owns increased due to bonus shares and transfer of capital stock of the listed Company shall also comply with the foregoing requirements. 4. If the aforementioned lock-up period arrangement does not match the latest laws and regulations and the latest regulatory requirements of the securities regulatory institution, the enterprise agrees to implement the latest laws and regulations and the requirements of the regulatory agency. 5. After the lock-up period expires, it will be implemented in accordance with the relevant regulations of the China Securities Regulatory Commission and the Shenzhen Stock Exchange. | |||||
Wang Zhendong, Guo Shihong, Liu Bin, Zhang Yongsheng, Yang Shaofeng, Zhang Zhian | Letter of commitment on lock-up period for subscription of shares | 1. The shares of the listed Company subscribed by myself in this transaction shall not be transferred or dealt with in any other forms within 24 months from the date of listing of the shares. Within 6 months after the listing of the shares, if the closing price of the listed Company stock is lower than the issue price for consecutive 20 trading days , or the closing price of the stock at the end of the 6 months after the listing of the shares is lower than the issue price, the lock-up period of consideration shares acquired in this transaction by myself is automatically extended for 6 months. (If dividend distribution, bonus shares, transfer of capital stock, or allotment to the listed Company occurred during the above period, the aforementioned issuance price is calculated based on the price adjusted by factors as ex-dividend and ex-rights, etc.) If Offcn Ltd. fails to meet the committed net profits as stipulated in the Profit Forecast Compensation Agreement in either 2018 or 2019, the lock-up period of the shares of the listed Company I obtained in this transaction will be | Jul. 27, 2018 | Jan. 31, 2021 | Under normal implementation |
extended to 36 months. At the expiration of 36 months from the date when the aforementioned shares are registered to my securities account, if the performance compensation obligations under the Profit Forecast Compensation Agreement have not been fulfilled, the above lock-up period will be extended to the date when the compensation obligations are fulfilled. 2. The aforesaid share lock-up arrangement does not affect the implementation of profit compensation for this transaction, that is, when I need to make profit compensation, the listed Company has the right to relieve the shares in corresponding amount in advance for profit compensation. 3. I promise to abide by the following provision: if the transaction is investigated by judiciary authorities or the China Securities Regulatory Commission on suspicion of misrepresentations, misleading statements, or material omissions in regard to the information provided or disclosed, the shares of the listed Company acquired in this transaction shall not be transferred until the conclusion of the investigation is clarified. 4. After the completion date of this transaction, my increased shares due to bonus shares and transfer of capital stock of the listed Company shall also comply with the foregoing requirements. 5. If the aforementioned lock-up period arrangement does not match the latest laws and regulations and the latest regulatory requirements of the securities regulatory institution, I agree to implement the latest laws and regulations and the requirements of the regulatory agency. 6. After the lock-up period expires, it will be implemented in accordance with the relevant regulations of the China Securities Regulatory Commission and the Shenzhen Stock Exchange. | |||||
Offcn | Letter of | Within 36 months from the date of the transfer of | Apr. 27, | Jan. 31, | Under |
Partnership | commitment on the lock-up of shares | 80,000,000 shares of Yaxia Automobile held by Anhui Yaxia Industry Co., Ltd. to the enterprise, the shares shall not be transferred. The lock-up period of the shares increased during the above period due to bonus shares, transfer of capital stock or allotment of shares by Yaxia Automobile, shall also comply with the foregoing requirements. If the Company violates commitments listed above, it will bear all losses caused to Yaxia Automobile. | 2018 | 2022 | normal implementation |
Li Yongxin and other 10 counterparties | Letter of commitment on the lock-up of Offcn Partnership’s contribution shares | Within 36 months from the date of the transfer of 80,000,000 shares of Yaxia Automobile held by Anhui Yaxia Industry Co.,Ltd. to Beijing Offcn Future Information Consulting Center (Limited Partnership), I or the Company shall not in any way transfer the shares of Beijing Offcn Future Information Consulting Center (Limited Partnership) or withdraw from the partnership with Beijing Offcn Future Information Consulting Center (Limited Partnership), nor do we transfer, assign or authorize other entities in any way to fully or partially have the rights and interests indirectly related to the shares of Yaxia Industry Co., Ltd. held by Beijing Offcn Future Information Consulting Center (Limited Partnership). | Jul. 27, 2018 | Jan. 31, 2022 | Under normal implementation |
Li Yongxin Lu Zhongfang Wang Zhendong Offcn Partnership | Letter of commitment on maintaining independence of the listed | Guarantee the independence of the listed Company’s personnel It is guaranteed that after the completion of transaction, the labor, personnel and salary management of the listed Company shall completely independent from myself/Offcn Partnership, and from other related parties, such as companies, enterprises or economic organizations, controlled by myself/Offcn Partnership. Ii is guaranteed that after the completion of transaction, senior executives shall work as full-time employees and receive remuneration in the listed Company. They shall not hold any positions other than directors or supervisors in other companies, enterprises, or economic | April 27, 2018 | Long-term | Under implementation normally |
(3) It is guaranteed that after the completion of transaction, financial personnel hired by the listed Company shall not hold part-time positions in other related parties, such as companies, enterprises or other economic organizations controlled by myself or Offcn Partnership (4) It is guaranteed that after the completion of transaction, the listed Company can make financial decisions independently. I/Offcn Partnership shall not interfere with the use of funds by the listed Company. (5) It is guaranteed that after the completion of transaction, the listed Company will pay taxes independently according to laws. I/Offcn Partnership shall be liable for all losses caused to the listed Company and its subsidiaries due to my/Offcn Partnership’s failure in fulfilling the above commitments. | |||||
Li Yongxin, Lu Zhongfang | Letter of Commitment on avoiding horizontal competition | 1. As of the date of signing this commitment letter, myself, my close relatives and other companies, enterprises or economic organizations controlled by myself, and my close relatives, except for Beijing Offcn Online Education Technology Co., Ltd. (hereinafter referred to as Offcn Online), controlled by my relatives Xuhua and Lu Yan, and its affiliated schools which are involved in the same or similar businesses conducted by Offcn Ltd., other related parties are not involved in any same, similar or related businesses conducted by the listed Company, Offcn Ltd. and its affiliated companies and schools.. Except for serving as a director in Kunming Wuhua Offcn training school, which is affiliated to Offcn Online, Li Yongxin neither holds any full-time or part-time positions nor provides consultancy at any companies or enterprises, which conducts competitive businesses with the listed Company, Offcn Ltd. and their affiliates. I also hold directly or indirectly no stock rights(shares) of companies or enterprises conducting the | Sept. 20, 2018 | 1. The transfer of Kairuier Training School in Haidian District of Beijing: within 24 months from the date of the signing of this letter of commitment 2. The | As of the end of the reporting period, Kairuier Training School Haidian District of Beijing had been transferred to an unrelated third party. |
same, similar or related businesses as the listed Company, Offcn Ltd. and its affiliates. 2. As of the date of signing this commitment letter, Offcn Online and its two subordinate training schools’ disposals are as follow: Offcn Online conducts no education businesses(to be canceled after subordinate schools transferred). Kairuier Training School in Haidian District of Beijingis to be transferred to an unrelated third party and the transfer agreement has been signed. If the transfer is not completed within 24 months since the date of signing this commitment letter, I will urge Offcn Online to cancel the Kairuier Training School in Haidian District of Beijing. Kunming Wuhua Offcn Training School, associated with Offcn Online, has been closed and it will be transferred to an unrelated third party or will be canceled within 12 months after the revised Regulations for the Implementation of the Law on the Promotion of Private Education of the People’s Republic of China (hereinafter referred to as Regulations of Implementation) is officially promulgated and implemented and supporting regulations formulated by relevant local education authorities in accordance with the revised Regulations of Implementation comes into effect. 3. As of the date of signing this commitment letter, Offcn Ltd. as the organizer intends to transfer its 100% of the rights of 33 private schools for non-academic qualifications to Li Yongxin and singed the Aagreement on Transfer of Rights of Private Schools for Non-Academic Qualifications Affiliated to Beijing Offcn Education Technology Co., Ltd. Li Yongxin is willing to entrust the transferred 33 private schools for non-academic qualifications to Offcn Ltd. and signed the Trusteeship Agreement of Private Schools for Non-academic Qualifications. 4. After the completion of transaction, except for the | transfer of Kunming Wuhua Offcn Training School : within 12 months after the revised Regulations of Implementation officially promulgated and implemented and supporting regulations formulated by relevant local education authorities in accordance with the revised Regulations of | Other commitments are under implementation normally. |
above-mentioned cases, I promise that during the time of being the actual controller of the listed Company, I, my close relatives and other related parties, such as companies, enterprises or other economic organizations, controlled by myself and my close relatives shall not in any way (including but not limited to self operated or with other parties to operate joint venture, cooperation, joint operation, investment, mergence, and trustee operation home and aboard) engage in the same, similar, related and competitive businesses with the listed Company, which includes the follows: I will not directly or indirectly operate, participate in or assist others to conduct same, similar businesses or other economic activities which directly or indirectly constitute a competitive relationship with businesses currently operated by the listed Company and its affiliated companies. 2. .I will not directly or indirectly invest on any economic entities whose businesses constitute a direct or indirect competitive relationship with the listed Company and its affiliates. 3. I will not be hired by any competitors that directly or indirectly compete with the listed Company and its affiliates, or provide any advice, assistance or business opportunities directly or indirectly to such competitors;. 4. I will not instigate, mislead, encourage or otherwise induce, persuade, or coerce the employees or management personnel in the listed Company and its affiliates to terminate their labor or employment relationship with the Company and its affiliates. 5. I will not urge others to hire employees or management personnel from the listed Company and its affiliates. 5. I promise that if I, my close relatives and other related parties, such as companies, enterprises or other economic organizations controlled by myself and my close relatives obtain any business opportunities from any third party, | Implementation comes into effect. |
which can or may compete with the listed Company and its affiliates in the future, I will notify the listed Company and its affiliates in writing within 5 working days. After obtaining the third party’s promise, I will attempt to transfer these business opportunities to the listed Company and its affiliates. 6. I guarantee that I would never use my knowledge about and the information I’m aware of the listed Company and its affiliates to assist third parties to engage, participate, or invest in businesses or projects that compete with the listed companies and its affiliates. 7. If I violate the above commitments, the benefits obtained by the violation of commitments shall belong to the listed Company and I shall be liable for all losses caused to the listed Company and its affiliates. Within 30 working days since receiving the writing notice from the listed Company, compensation will be made in cash. 8. I will disclose relevant information in a timely manner if commitments fail to be fulfilled or to be fulfilled on schedule because of objective reasons, such as changes in relevant laws, regulations and policies, or natural disasters. Except for the above-mentioned objective reasons, if the commitment is anyhow unable to be fulfilled or fulfilling the commitment is not conducive to safeguarding the rights and interests of the listed Company, I should fully disclose the reasons and either provide a new commitment to the listed Company and related investors to replace the original one, or propose an exemption from fulfilling the commitment. 9. The commitment is valid from the date when the commit letter is signed to the time when I cease to be the actual controller of the listed Company. | |||||
Wang Zhendong, Offcn | Letter of Commitment on avoiding | 1. As of the date of signing this letter of commitments, I, my close relatives, related parties, such as companies, enterprises or other economic organizations controlled by | April 4, 2018 | Long-term | Under implementation |
Partnership | horizontal competition | myself and my close relatives, Offcn Partnership and related parties, such as other enterprises or economic organizations controlled by Offcn Partnership, participate in no businesses which are the same, similar o or related to businesses competing with the listed Company, Offcn Ltd. and their affiliated companies and schools. Except for serving as a director at Beijing Haidian District Kairuier Training School, affiliated to Offcn Online ( Offcn Online tends to transfer the rights of Kairuier Training School to an unrelated third party and after this transfer, Wang Zhendong will not hold the post as a director.), I neither holds any full-time or part-time positions nor provides consultancy at any companies or enterprises which conducts competitive businesses with the listed Company, Offcn Ltd. and their affiliates.serve as a consultant or a part-time employee in other companies or enterprises that pose competitions against the listed Company, Offcn Ltd. and its affiliates. I do not directly or indirectly hold the equity of an company or entity that runs the same, similar or relevant business engaged by the listed Company, Offcn Ltd. and its affiliates. 2.. After the completion of transaction, I/Offcn Partnership promise that during the time of being shareholders of the listed Company, I, my close relatives and other related parties, such as companies, enterprises or other economic organizations, controlled by myself and my close relatives,Offcn Partnership and related parties, such as other enterprises or economic organizations controlled by Offcn Partnership, shall not in any way (including but not limited to self operated or with other parties to operate joint venture, cooperation, joint operation, investment, mergence, and trustee operation home and aboard) engage in the same, similar, related and competitive businesses with the listed Company, which includes the follows: I will not directly or indirectly operate, participate in or | normally |
listed companies and its affiliates. If I/Offcn Partnership shall be liable for all losses caused to the listed Company and its affiliates due to my/Offcn Partnership’s failure in fulfilling commitments. | |||||
Li Yongxin, Lu Zhongfang | Letter of Commitment on reducing and regulating related-party transactions | 1. After the transaction is completed, during the time of being the actual controller of the listed Company, I, my close relatives and other companies, enterprises or other economic organizations controlled by myself, my close relatives will try to avoid and reduce the related-party transactions with the listed Company and its affiliates; unless it is necessary for the business development of the listed Company, any related-party transactions with the listed Company and its affiliates will not be conducted. 2. After the transaction is completed, for the related-party transactions which are unavoidable or reasonable to happen with the listed Company and its affiliates, I, my close relatives and other companies, enterprises or economic organizations controlled by myself and my close relatives, will sign related-party transactionagreements with the listed Company and its affiliates in accordance with the relevant laws, regulations and regulatory documents and follow the general business principles of equality, willingness, equivalence and paid-use. The prices of related-party transactions shall be fair. Decision-making procedures, lawful information disclosure obligations and relevant reporting and approval procedures regarding the related-party transactions, shall be followed. The status of shareholders shall not be used to damage the legitimate rights and interests of the listed Company and other shareholders. 3. After the completion of the transaction, I will not use the shareholders’ rights of the listed Company to manipulate or instruct the listed Company or its directors, supervisors and senior executives to make the listed Company provide or accept funds, commodities, services | Jul. 27, 2018 | Long-term | Under normal implementation |
or other assets under inequal conditions or engage in any behaviors that would damage the interests of the listed companies. 4. I will urge my close relatives and other companies, enterprises and other economic organizations controlled by myself and my close relatives to abide by the aforementioned commitments. 5. If I, my close relatives and other companies, enterprises and other economic organizations controlled by myself and my close relatives violate the above commitments, the profits obtained by the violation of commitments belong to the listed Company, and I shall be liable for all losses caused to the listed Company and its affiliates. Within 30 working days since receiving the written notice from the listed Company, compensation will be made in cash. 6. The commitment is valid from the date when it is signed to the time when I cease to be the actual controller of Yaxia Automobile and there is no other related relationship with Yaxia Automobile. | |||||
Wang Zhendong, Aerospace Industry, Offcn Partnership | Letter of Commitment on reducing and regulating related-party transactions | 1. After the completion of transaction, during the period of being the actual controller/shareholder, I, my close relatives and other companies, enterprises or other economic organizations controlled by myself, my close relatives,Aerospace Industry or Offcn Partnership, will try to avoid and reduce the related-party transactions with the listed Company. 2. After the transaction is completed, for the related-party transactions which are unavoidable or reasonable to happen with the listed Company and its affiliates, myself, my close relatives and other companies, enterprises or economic organizations controlled by myself and my close relatives, Aerospace Industry or Offcn Partnership, will sign related-party transactionagreements with the listed Company and its affiliates in accordance with the relevant laws, regulations and regulatory documents and | April 27, 2018 | Long-term | Under implementation normally |
Section IV. Appointment and dismissal of accounting firms
Has the semi-annual financial report been audited?
□ Yes √ No
The semi-annual financial report has not been audited yet.Section V. Explanations provided by the Board of Directors and the Supervisory Committee,regarding the “non-standard audit report” issued by the auditor for the reporting period
□ Applicable √ Not applicable
follow the general business principles of equality, willingness, equivalence and paid-use. The prices of related-party transactions shall be fair. Decision-making procedures, lawful information disclosure obligations and relevant reporting and approval procedures regarding the related-party transactions, shall be followed. The status of shareholders shall not be used to damage the legitimate rights and interests of the listed Company and other shareholders. 3. After the completion of the transaction, I/Aerospace Industry/Offcn Partnership will not use the shareholders’ rights of the listed Company to manipulate or instruct the listed Company or the directors, supervisors and senior executives of the listed Company to make the listed Company provide or accept funds, commodities, services or other assets in different forms under unequal conditions or engage in any behaviors that would damage the interests of listed companies. I/Aerospace Industry/Offcn Partnership shall be liable for all losses caused to the listed company and its affiliates due to my/Aerospace Industry’s/Offcn Partnership’s failures in fulfilling commitments. | |||
Whether the commitments are fulfilled on time | Yes |
Section VI. Explanations provided by the Board of Directors regarding the “non-standardaudit report” issued by the auditor for the last year
□ Applicable √ Not applicable
Section VII. Bankruptcy and Reorganization
□ Applicable √ Not applicable
There was no such situation for the Company during the reporting period.Section VIII. Significant lawsuit or arbitrationSignificant lawsuit or arbitration
□ Applicable √ Not applicable
There was no such situation for the Company during the reporting period.Other legal cases
√ Applicable □ Not applicable
During the reporting period, the legal proceedings of the listed Company and its subsidiaries were as follows:
1. The total amount involved in the legal cases resolved during the reporting period was RMB 3,962,000, theactual judgement amount of effective legal documents was RMB542,700. The litigation results have no significantimpact on the Company’s operations.
2. By the end of the reporting period, the amount of litigation involved in unsettled cases was RMB 14,719,700,which accounted for 0.43% of the unaudited net assets attributable to shareholders of listed Company at the end of2019, and has no significant impact on the Company’s operations.Section IX. Questioning by the media
□ Applicable √ Not applicable
The Company did not experience widespread media questioning during the reporting period.Secton X. Punishment and Rectification
□ Applicable √ Not applicable
There was no such situation for the Company during the reporting period.Section XI. Integrity of the Company, its controlling shareholders and actual controller
□ Applicable √ Not applicable
Section XII. The Implementation of the Company’s equity incentive plan, employee stockownership plan or other employee incentive measures.
□ Applicable √ Not applicable
The Company has no equity incentive plan, employee stock ownership plan nor other employee incentivemeasures that was implemented during the reporting period. .Section XIII. Significant related-party transactions
1. Related-party transactions relevant to routine operations
□ Applicable √ Not applicable
There was no such situation for the Company during the reporting period.
2. Related-party transactions about acquisitions or sales of assets or equity
□ Applicable √ Not applicable
There was no such situation for the Company during the reporting period.
3. Related-party transactions for overseas joint investment
□ Applicable √ Not applicable
There was no such situation for the Company during the reporting period.
4. Related credit and debt transactions
□ Applicable √ Not applicable
There was no such situation for the Company during the reporting period.
5. Other significant related-party transactions
√ Applicable □ Not applicable
On Jan. 9, 2019, Offcn Ltd., signed an RMB 360 million loan contract with the Sidaokou branch of Hua Xia Bankwith the contract number YYB7610120180014 and the loan period is from Jan. 9, 2019 to Jan. 9, 2020, which hadbeen settled on Jan. 9, 2020.
Section XIV. Status of capital of the listed Company used for non-operating purposes by thecontrolling shareholder or its related parties
□ Applicable √ Not applicable
There was no such situation for the Company during the reporting period.Section XV. Significant contracts and their execution
1. Trusteeships, Contracts, and Leases
(1) Trusteeships
√ Applicable □ Not applicable
Explanations on trusteeshipsOn Sept.20,2018, Offcn Ltd. and Li Yongxin signed the Agreement on the Transfer of the Rights and Interests ofOrganizers of the Private Schools affiliated to Beijing Offcn Education Technology Co.,Ltd. All 100% rights oforganizers as of Sept. 20, 2018 were to be transferred to Li Yongxin. On the same day, Li Yongxin and Offcn Ltd.signed the Trusteeship Agreement of Private Schools stipulating that Li Yongxin would entrust the transferredprivate schools to Offcn Ltd. for management. The period of trusteeship started from the date when Li Yongxinpaid all the transfer price to the day when the private schools’ 100% rights of organizers were transferred to theunrelated third party or canceled (Note: within 12 months after the revised Implementation Regulations wasofficially promulgated and the relevant local education authorities passed the supporting regulations in accordancewith the revised Implementation Regulations, Li Yongxin transferred 100% of the owner’s rights to the unrelatedthird party or canceled them.)Projects that gains or losses reached more than 10% of the total operating income of the Company
□ Applicable √ Not applicable
There was no such project of the Company during the reporting period.
(2) Contract
□ Applicable √ Not applicable
There was no such situation for the Company during the reporting period.
(3) Lease
□ Applicable √ Not applicable
There was no such situation for the Company during the reporting period.
2. Significant guarantees
□ Applicable √ Not applicable
There was no such situation for the Company during the reporting period.
3. Entrusted Financing
√ Applicable □ Not applicable
Unit: RMB
Types | Sources of Entrusted Financing | Amount of Entrusted Financing | Unexpired Balance | Nonrecoverable Overdue Amount |
Bank Financial Products | Self-owned fund | 2,369,310,000 | 754,450,000 | 0 |
Brokerage Financial Products | Self-owned fund | 80,000,000 | 0 | 0 |
Trust Financial Products | Self-owned fund | 5,199,530,029.04 | 1,502,216,916.11 | 0 |
Total | 7,648,840,029.04 | 2,256,666,916.11 | 0 |
Particulars of high-risk entrusted financial management with a large single amount, low security, poor liquidity orno capital protection
□ Applicable √ Not applicable
Entrusted financing is overdue and the principal cannot be recovered or there are other cases that may causeimpairments.
□ Applicable √ Not applicable
4. Other significant contracts
√ Applicable □ Not applicable
Name of the company signing the contract | Beijing Offcn Education Technology Co.,Ltd | Beijing Offcn Education Technology Co.,Ltd | Beijing Offcn Education Technology Co.,Ltd | Beijing Offcn Education Technology Co.,Ltd | Offcn Education Technology Co., Ltd |
Name of the other party signing the contract | Beijing Jingchen Technological Development Co.,Ltd | Harbin Yuheng Pharmaceutical Co.,Ltd | Shengyang Lijing Mingzhu Hotel Management Co.,Ltd | Beijing Chuangsheng Building Decoration Engineering Co.,Ltd | Shaanxi Guancheng Industry Co.,Ltd |
Contract subject | Lease No. 1 and 2 of Unit B, No. 1, 18, 19 and 21 of Unit A in the East Yard of Daokou Village, Wangsiying Town, Chaoyang District, Beijing | Lease the West Building, Building 1, No.23, Xueqing Road, Haidian District, Beijing (1 to 5 floors above ground, except for the security room) | Lease No. 129 Building, Beishun Road, Shenhe District, Shengyang | Renovation project of Offcn branches (building area is roughly 150,000 square meters) | Purchase building No. 1, Guanchengjiuding International, Fengcheng No. 4 Road, Weiyang |
Date of signing | July 1, 2014 | June 16, 2013 | July 1, 2016 | August 7, 2019 | February 26, 2020 |
The Book value of the assets involved in the contract (Unit: RMB) | 38,306.00 | ||||
Appraised value of | 38,306.00 |
assets involved in the contract (If any) (Unit; RMB) | |||||
Name of evaluation agency (If any) | Not applicable | Not applicable | Not applicable | Not applicable | Beijing Zhuoxin Dahua Assets Appraisal Co.,Ltd. |
Evaluation base date | December 31, 2019 | ||||
Pricing principle | Market fair value | Market fair value | Market fair value | Market fair value | Evaluated value |
Transaction Price ( RMB10 thousands) | 9,810.87 | 10,753.69 | 25,090.48 | 28,674.70 | 38,306.00 |
Whether it is a related-party transaction | No | No | Yes | No | No |
Relations | No | No | A company actually controlled by Beijing Huiyou Zhiyuan Investing Center (Limited Partnership), Which is an institution actually controlled by executives and core employees of Offcn Edu | No | No |
Implementation as of the end of the reporting period | Under normal Implementation | Under normal implementation | Under normal implementation | Under normal implementation | Under normal implementation |
Date of disclosure | December 1, 2018 | December 1, 2018 | December 1, 2018 | December 1, 2018 | Feb.27, 2020 |
Index of disclosure | Juchao Information Website (http://www.cn info.com.cn) | Juchao Information Website (http://www.cn info.com.cn) | Juchao Information Website (http://www.cn info.com.cn) | / | Juchao Information Website (http://www.cn info.com.cn) |
Major Asset Replacement and Issuance of Shares to Purchase Assets and related-party transactionReport (Nov. 2018) | Major Asset Replacement and Issuance of Shares to Purchase Assets and related-party transactionReport (Nov. 2018) | Major Asset Replacement and Issuance of Shares to Purchase Assets and related-party transactionReport (Nov. 2018) | Major Asset Replacement and Issuance of Shares to Purchase Assets and related-party transactionReport (Nov. 2018) |
Section XVI. Social Responsibilities
1. Major Environmental Problems
Whether the listed Company and its subsidiaries belong to the major pollutant units labeled by the Ministry ofEcology and EnvironmentNone.
2. Social Responsibility for Targeted Poverty Alleviation
(1) Targeted Poverty Alleviation Plan
The Company has not carried out targeted poverty alleviation work for the first half of the year, neither there isany follow-up target poverty alleviation plan.
(2) Semi-annual summary of targeted poverty alleviation
None.
Section XVII. Other Major Matters
√ Applicable □ Not applicable
Name of temporary announcement | Disclosure date of temporary announcement | Websites for disclosures of temporary announcement |
Announcement on the advance purchase of pledged shares for shareholders with more than 5% shares | January 2, 2020 | Juchao Information Website, Announcement Number; 2019-075 |
The first interim general board meeting in 2020 | January 7, 2020 | Juchao Information Website, Announcement Number; 2020-001 |
Announcement on the pledged shares for shareholders with more than 5% shares | February 5, 2020 | Juchao Information Website, Announcement Number; 2020-003 |
Announcement on the release of pledges of certain shares for controlling shareholders and actual controller. | February 12, 2020 | Juchao Information Website, Announcement Number; 2020-004 |
Announcement on the acquisition of Shaanxi Guangcheng Jiuding International Building No.1 | February 27, 2020 | Juchao Information Website, Announcement Number; 2020-006 |
Announcement on the distribution of the 2019 profit plan | March 10, 2020 | Juchao Information Website, Announcement Number; 2020-012 |
Announcement on estimated amount of daily related transactions of 2020 | March 10, 2020 | Juchao Information Website, Announcement Number; 2020-013 |
Announcement on the company and its subsidiaries to carry out entrusted wealth management | March 10, 2020 | Juchao Information Website, Announcement Number; 2020-014 |
Announcement of the 2020 remuneration plan for the company directors,supervisors and senior managers | March 10, 2020 | Juchao Information Website, Announcement Number; 2020-015 |
Announcement on changes in accounting policies | March 10, 2020 | Juchao Information Website, Announcement Number; 2020-016 |
Announcement on renewing the appointment of the accounting firm | March 10, 2020 | Juchao Information Website, Announcement Number; 2020-017 |
Announcement on the difference between Beijing Offcn Education and Technology Co.,Ltd.’s 2019 actual net profit and committed net profit | March 10, 2020 | Juchao Information Website, Announcement Number; 2020-018 |
Announcement on the company and its subsidiaries applying to the bank for a comprehensive credit | March 10, 2020 | Juchao Information Website, Announcement Number; 2020-019 |
Announcement on the release of pledge shares and deferred repurchase of the pledges for shareholders with more than 5% shares | March 12, 2020 | Juchao Information Website, Announcement Number; 2020-020 |
Announcement on the online business performance conference | March 19, 2020 | Juchao Information Website, Announcement Number; 2020-021 |
Announcement on the resolution of the 2019 Annual General Meeting of Shareholders | March 31, 2020 | Juchao Information Website, Announcement Number; 2020-022 |
Announcement on the reply to the inquiry letter of the Annual Report of the Shenzhen Stock Exchange | April 8, 2020 | Juchao Information Website, Announcement Number; 2019-023 |
Announcement on the pledge of shares by controlling shareholders and actual controllers | April 18, 2020 | Juchao Information Website, Announcement Number; 2020-024 |
Announcement on 2019 annual equity distribution implementation | May 13, 2020 | Juchao Information Website, Announcement Number; 2020-026 |
Announcement on pledge of certain shares for controlling shareholders and actual controllers | June 24, 2020 | Juchao Information Website, Announcement Number; 2020-027 |
Section XVIII. Major Matters of Subsidiaries
□ Applicable √ Not applicable
Chapter VI. Changes in Shares and Information about ShareholdersSection I. Changes in Shares
1. Changes in Shares
Unit: share
Before change | Increase or decrease (+ or -) | After change | |||||||
Number of shares | Proportion | New shares issued | Bonus shares | Conversion of equity reserves into share capital | Others | Subtotal | Number of shares | Proportion | |
1. Shares with sales restrictions | 5,347,063,429 | 86.70% | 36,345,000 | 36,345,000 | 5,383,408,429 | 87.29% | |||
Shares held by state | |||||||||
Shares held by state-owned legal person | |||||||||
(3) Other shares held by domestic capital | 5,347,063,429 | 86.70% | 36,345,000 | 36,345,000 | 5,383,408,429 | 87.29% | |||
Of which: held by domestic legal person | 534,706,341 | 8.67% | 534,706,341 | 8.67% | |||||
held by domestic natural person | 4,812,357,088 | 78.03% | 36,345,000 | 36,345,000 | 4,848,702,088 | 78.62% | |||
(4) Shares held by overseas capital | |||||||||
Of which: shares held by overseas legal person | |||||||||
shares held by overseas natural |
person | |||||||||
2. Shares without trading restrictions | 820,335,960 | 13.30% | -36,345,000 | -36,345,000 | 783,990,960 | 12.71% | |||
(1) RMB common shares | 820,335,960 | 13.30% | -36,345,000 | -36,345,000 | 783,990,960 | 12.71% | |||
(2) Domestic- listed shares for oversea investors | |||||||||
(3) Foreign- listed shares for overseas investors | |||||||||
(4) Others | |||||||||
3. Total number of shares | 6,167,399,389 | 100.00% | 0 | 0 | 6,167,399,389 | 100.00% |
Reasons of changes in shares
□ Applicable √ Not applicable
36,345,000 shares locked by senior executives are newly issued in this reporting periodApprovals of changes in shares
□ Applicable √ Not applicable
Account transferring of changes in shares
□ Applicable √ Not applicable
Progress of share repurchase
□ Applicable √ Not applicable
Progress in the implementation of the centralized bidding method to reduce the repurchased shares
□ Applicable √ Not applicable
The impact of share changes on financial indicators such as basic earnings per share, and diluted earnings pershare, net assets per share attributable to common shareholders of the company,etc.
□ Applicable √ Not applicable
Other contents deemed necessary by the company or required by securities institutions
□ Applicable √ Not applicable
2. Changes in shares with sales restrictions:
√ Applicable □ Not applicable
Unit: share
Name of shareholder | Number of shares with sales restrictions at the beginning of the period | Number of shares with sales restrictions released in the period | Number of shares with sales restrictions increased in the period | Number of shares with sales restrictions at the end of the period | Reasons for sales restrictions | Date of releasing restrictions on sales |
Lu Zhongfang | 2,550,549,260 | 0 | 0 | 2,550,549,260 | Major asset replacement and issuance of shares to purchase assets for obtaining 2,550,549,260 restricted shares | Jan. 31, 2022 |
Li Yongxin | 1,058,718,560 | 0 | 36,345,000 | 1,095,063,560 | Major asset replacement and issuance of shares to purchase assets for obtaining 1,058,718,560 restricted shares. New 36,345,000 shares locked by senior executives added. | Jan. 31, 2022 |
Wang Zhendong | 962,471,418 | 0 | 962,471,418 | Major asset replacement and issuance of shares to purchase assets for obtaining 962,471,418 restricted shares. | Jan. 31, 2021 | |
Beijing Aerospace Industry Investment Fund(Limited Partners) | 267,353,171 | 0 | 0 | 267,353,171 | Major asset replacement and issuance of shares to purchase assets for obtaining 267,353,171 restricted shares. | Jan. 31, 2021 |
Beijing Guangyin Venture Investment Center (Limited Partners) | 178,235,447 | 0 | 0 | 178,235,447 | Major asset replacement and issuance of shares to purchase assets for obtaining 178,235,447 restricted shares. | Jan. 31, 2021 |
Beijing Kirui Venture Investment Center(Limited Partners) | 89,117,723 | 0 | 0 | 89,117,723 | Major asset replacement and issuance of shares to purchase assets for obtaining 89,117,723 restricted shares. | Jan.31, 2022 |
Yang Shaofeng | 48,123,570 | 0 | 0 | 48,123,570 | Major asset replacement and issuance of shares to purchase assets for obtaining 48,123,570 restricted shares. | Jan. 31, 2021 |
Zhang Zhian | 48,123,570 | 0 | 0 | 48,123,570 | Major asset replacement and issuance of shares to purchase assets for obtaining 48,123,570 restricted shares. | Jan. 31, 2021 |
Liu Bin | 48,123,570 | 0 | 0 | 48,123,570 | Major asset replacement and issuance of shares to purchase assets for obtaining 48,123,570 restricted shares. | Jan. 31, 2021 |
Zhang Yongsheng | 48,123,570 | 0 | 0 | 48,123,570 | Major asset replacement and issuance of shares to purchase assets for obtaining 48,123,570 restricted shares. | Jan. 31, 2021 |
Guo Shihong | 48,123,570 | 0 | 0 | 48,123,570 | Major asset replacement and issuance of shares to purchase assets for obtaining 48,123,570 restricted shares. | Jan. 31, 2021 |
Total | 5,347,063,429 | 0 | 36,345,000 | 5,383,408,429 | -- | -- |
Section II. Issuance and listing of securities
□ Applicable √ Not applicable
Section III. Numbers of Shareholders and Shareholdings
Unit: Share
Total number of shareholders with ordinary shares at the end of the reporting period | 33,231 | Total number of preferred shareholders with voting rights restored at the end of the reporting | 0 |
period (if any) (See Note 8) | |||||||||
Shareholders with over 5% ordinary shares or top 10 ordinary shareholders | |||||||||
Name of Shareholder | Nature of shareholder | Shareholding Percentage (%) | Total ordinary shares held at the end of the reporting period | Increase and decrease of shares during the reporting period | Number of ordinary shares held with sales restrictions | Number of ordinary shares held without sales restrictions | Pledged or Frozen | ||
Status of shares | Number of shares | ||||||||
Lu Zhongfang | Domestic natural person | 41.36% | 2,550,549,260 | 0 | 2,550,549,260 | 0 | Pledged | 450,000,000 | |
Li Yongxin | Domestic natural Person | 18.35% | 1,131,415,121 | 0 | 1,095,063,560 | 36,351,561 | Pledged | 774,495,000 | |
Wang Zhendong | Domestic natural person | 15.61% | 962,471,418 | 0 | 962,471,418 | 0 | Pledged | 107,100,000 | |
Beijing Aerospace Industry Investment Fund(Limited Partnership) | Domestic non-state- owned legal person | 4.33% | 267,353,171 | 0 | 267,353,171 | 0 | |||
Beijing Guangyin Venture Investment Center (Limited Partnership) | Domestic non-state-owned legal person | 2.89% | 178,235,447 | 0 | 178,235,447 | 0 | |||
Beijing Kirui Venture Investment Center(Limited Partnership) | Domestic non-state-owned legal person | 1.44% | 89,117,723 | 0 | 89,117,723 | 0 | |||
Beijing Offcn Future Information | Domestic non-state-owned legal person | 1.30% | 80,000,000 | 0 | 0 | 80,000,000 |
Consulting Center(Limited Partnership) | |||||||||
Zhou Xiayun | Domestic natural person | 1.28% | 78,848,640 | 0 | 0 | 78,848,640 | Pledged | 37,148,845 | |
Zhou Hui | Domestic natural person | 1.17% | 72,277,920 | 0 | 0 | 72,277,920 | Pledged | 9,450,000 | |
Hong Kong Securities Clearing Co.,Ltd. | Overseas legal person | 0.84% | 52,098,611 | 5,338,749 | 0 | 52,098,611 | |||
Strategic Investors or Ordinary Legal Persons Become the Top 10 Shareholders with Ordinary Shares by the replacement of New Shares | No | ||||||||
Description of the Above-mentioned Shareholders’ Relationship or Concerted Action | The company's controlling shareholder and actual controller Lu Zhongfang and Li Yongxin are in a parent-child relationship. Lu Zhongfang, Li Yongxin, and Beijing Offcn Future Information Consulting Center (Limited Partnership) constitute persons acting in concert. Zhou Xiayun and Zhou Hui have a father-son relationship. It is unknown whether there is an associated relationship among the above-mentioned other shareholders, and whether the above-mentioned shareholders belong to the parties acting in concert as stipulated in the Administrative Measures on Disclosure of Information Disclosure of Shareholding Changes in Listed Companies. | ||||||||
\Description of top 10 shareholders with ordinary Shares without sales restrictions | |||||||||
Name of Shareholder | Number of ordinary shares without sales restrictions at the end of the reporting period | Type | |||||||
Type | Quantities | ||||||||
Beijing Offcn Future Information Consulting Center(Limited Partnership) | 80,000,000 | RMB ordinary shares | 80,000,000 | ||||||
Zhou Xiayun | 78,848,640 | RMB ordinary shares | 78,848,640 | ||||||
Zhou Hui | 72,277,920 | RMB ordinary shares | 72,277,920 | ||||||
Hong Kong Securities Clearing Co.,Ltd. | 52,098,611 | RMB ordinary shares | 52,098,611 |
Zhou li | 48,185,280 | RMB ordinary shares | 48,185,280 |
Li Yongxin | 36,351,561 | RMB ordinary shares | 36,351,561 |
China CITIC Bank Co.,Ltd.-Band of Communications Schroder New Vitality Flexible Configuration Hybrid Securities Investment Fund | 16,513,031 | RMB ordinary shares | 16,513,031 |
National Social Security Fund 102 Portfolio | 15,000,311 | RMB ordinary shares | 15,000,311 |
National Social Security Fund 414 Portfolio | 10,763,018 | RMB ordinary shares | 10,763,018 |
Agricultural Band of China Co., Ltd-Bank of Communications Schroder Growth Hybrid Securities Investment Fund | 10,704,416 | RMB ordinary shares | 10,704,416 |
Description of the relationship or concerted action among the top 10 shareholders of ordinary shares without restrictions on , and between the top 10 shareholders of ordinary shares without restriction and the top 10 shareholders of ordinary shares | The company's controlling shareholder and actual controller Lu Zhongfang and Li Yongxin are in a parent-child relationship. Lu Zhongfang, Li Yongxin, and Beijing Offcn Future Information Consulting Center (Limited Partnership) constitute persons acting in concert. Zhou Xiayun and Zhou Hui have a father-son relationship. It is unknown whether there is an associated relationship among the above-mentioned other shareholders, and whether the above-mentioned shareholders belong to the parties acting in concert as stipulated in the Administrative Measures on Disclosure of Information Disclosure of Shareholding Changes in Listed Companies. | ||
Description of the Top 10 Ordinary Shareholders Participating in the Margin trading(if any) | None |
Whether the company’s top 10 ordinary shareholders and top 10 ordinary shareholders without restrictionsconducted agreed repurchase transactions during the reporting period
□ Yes √ No
The company’s top 10 ordinary shareholders and top 10 ordinary shareholders without restrictions didn’t conductagreed repurchase transactions during the reporting periodSection IV. Change of controlling shareholders or actual controller
Changes of controlling shareholders during the reporting period
□ Applicable √ Not applicable
No changes of controlling shareholders during the reporting periodChanges of actual controllers during the reporting period
□ Applicable √ Not applicable
No changes of actual controllers during the reporting period.
Chapter VII. Preferred Shares
□ Applicable √ Not applicable
No preferred shares existed during the reporting period
Chapter VIII. Convertible Corporate Bonds
□ Applicable √ Not applicable
No convertible corporate bonds existed during the reporting period
Chapter IV. Information of Directors, Supervisors and Senior Executives
Section I. Changes in shares held by directors, supervisors and senior executives
□ Applicable √ Not applicable
No changes in shares held by the directors, supervisors and senior executives of the Company during the reportingperiod, please refer to the annual report of 2019.Section II. Changes of Company’s directors, supervisors and senior executives
□ Applicable √ Not applicable
No changes of directors, supervisors and senior executives during the reporting period, please refer to the annualreport of 2019.
Chapter X. Corporate BondsWhether there is corporate bonds that the Company has publicly issued and listed on the stock exchange, and isnot due on the date of approval of the semi-annual report or has not been fully redeemed at maturityNone.
Chapter XI. Financial ReportSection I. Auditor’s ReportWhether audit has been performed on this semi-annual financial report.
□ Yes √ No
The Company’s 2020 semi-annual financial report has not been audited.Section II. Financial StatementThe unit of statement in financial notes is : RMB
1. Consolidated Balance Sheet
Company: Offcn Education Technology Co., Ltd.
June 30, 2020
Unit: RMB
Item | June 30, 2020 | December 31, 2019 |
Current Assets: | ||
Cash and cash equivalents | 4,665,798,912.43 | 2,724,335,001.58 |
Settlement reserve | ||
Due from banks and other financial institutions | ||
Financial assets held for trading | 2,156,713,143.65 | 1,754,396,227.54 |
Derivative Financial assets | ||
Notes Receivable | ||
Accounts Receivable | 14,349,954.64 | 2,721,638.09 |
Financing receivables | ||
Prepayments | 5,069,205.17 | 2,461,009.00 |
Premium receivable | ||
Reinsurance premium receivable | ||
Reserve receivable for reinsurance | ||
Other receivables | 533,546,149.67 | 255,013,296.96 |
Inc: interest receivables | 568,426.66 | 567,341.68 |
Dividends receivables | ||
Financial assets purchased under resale agreements |
Inventories | ||
Contract assets | ||
Assets held for sale | ||
Non-current assets due within one year | 1,838,527,164.24 | |
Other current assets | 242,135,136.12 | 97,336,600.16 |
Total current assets | 9,456,139,665.92 | 4,836,263,773.33 |
Non-current assets: | ||
Loans And Advances | ||
Debt investments | 122,023,500.00 | 1,923,598,909.09 |
Other debt investments | ||
Long-term receivables | ||
Long-term equity investments | ||
Other equity instruments | 162,800,000.00 | 162,800,000.00 |
Other non-current financial assets | 138,166,559.96 | 138,166,559.96 |
Investment properties | 678,502,813.80 | 688,475,053.53 |
Fixed assets | 870,207,450.02 | 672,429,601.44 |
Construction in progress | 811,011,730.47 | 653,580,160.32 |
Bearer biological assets | ||
Oil and gas assets | ||
Right-of-use assets | ||
Intangible assets | 194,133,316.45 | 197,507,227.40 |
Development expenditure | ||
Goodwill | 99,867,720.38 | 99,867,720.38 |
Long-term deferred expense | 232,654,802.11 | 240,565,962.02 |
Deferred tax assets | 11,163,089.94 | 21,482,832.13 |
Other non-current assets | 487,305,566.38 | 325,967,628.34 |
Total Non-current Assets | 3,807,836,549.51 | 5,124,441,654.61 |
Total Assets | 13,263,976,215.43 | 9,960,705,427.94 |
Current liabilities: | ||
Short-term borrowings | 3,457,000,000.00 | 2,867,000,000.00 |
Borrowings from central bank | ||
Placement from banks and other financial institutions |
Financial liabilities held for trading | ||
Derivative Financial liabilities | ||
Notes payable | ||
Accounts payable | 25,285,867.85 | 236,481,990.86 |
Receipts in advance | 2,634,276,203.88 | |
Contract liabilities | 7,222,148,935.39 | |
Financial assets sold under repurchase agreements | ||
Absorbing deposit and deposit in inter-bank market | ||
Customer deposits for trading in securities | ||
Amounts due to issuer for securities underwriting | ||
\ Employee benefits payable | 422,605,744.49 | 411,475,636.03 |
Taxes payable | 14,792,410.55 | 184,306,027.84 |
Other payables | 54,583,260.88 | 88,693,411.98 |
Inc: Interest payables | 13,367,960.06 | 4,521,557.54 |
Dividends payables | ||
Fees and commissions payable | ||
Reinsurance accounts payable | ||
Held-for-sale liabilities | ||
Non-current Liabilities due within One Year | ||
Other current liabilities | 216,664,468.06 | |
Total Current Liabilities | 11,413,080,687.22 | 6,422,233,270.59 |
Non-current Liabilities: | ||
Deposits for insurance contracts | ||
Long-term borrowings | ||
Bonds payable | ||
Inc: preferred shares | ||
Perpetual bond | ||
Lease liabilities | ||
Long-term payables |
Long-term employee benefits payable | ||
Provisions | ||
Deferred Income | ||
Deferred tax liabilities | 105,663,825.85 | 106,932,273.03 |
Other non-current liabilities | ||
Total Non-current Liabilities | 105,663,825.85 | 106,932,273.03 |
Total Liabilities | 11,518,744,513.07 | 6,529,165,543.62 |
Owners’ equity: | ||
Paid-in capital (share capital) | 103,807,623.00 | 103,807,623.00 |
Other equity instrument | ||
Inc: preferred shares | ||
Perpetual bond | ||
Capital reserve | 1,225,481,049.50 | 1,198,581,049.50 |
Deduct: Treasury stock | ||
Other comprehensive income | 37,500,000.00 | 37,500,000.00 |
Special reserve | ||
Surplus reserve | 45,000,000.00 | 45,000,000.00 |
General risk reserve | ||
Retained earnings | 333,454,732.80 | 2,046,657,231.32 |
Total Owners’ Equity Attributable To the Company | 1,745,243,405.30 | 3,431,545,903.82 |
Minority interests | -11,702.94 | -6,019.50 |
Total Owners’ Equity | 1,745,231,702.36 | 3,431,539,884.32 |
Total Liabilities and Owners’ Equity | 13,263,976,215.43 | 9,960,705,427.94 |
Legal Representative: Wang ZhendongPerson in charge of the accounting work: Shi LeiPerson in charge of the accounting department: Luo Xue
2. Balance sheet of the Company
Unit: RMB
Item | June 30, 2020 | December 31, 2019 |
Current Assets: | ||
Cash and cash equivalents | 6,681,747.05 | 6,931,803.33 |
Financial assets held for trading | 1,601,681.64 | 101,681.64 |
Derivative Financial assets | ||
Notes Receivable | ||
Accounts Receivable | 7,258,379.44 | |
Financing receivables | ||
Prepayments | ||
Other receivables | 688,067,588.44 | 1,717,949,520.99 |
Inc: interest receivables | ||
Dividends receivables | 1,700,000,000.00 | |
Inventories | ||
Contract assets | ||
Assets held for sale | ||
Non-current assets due within one year | ||
Other current assets | 913,141.57 | |
Total current assets | 704,522,538.14 | 1,724,983,005.96 |
Non-current assets: | ||
Debt investments | ||
Other debt investments | ||
Long-term receivables | ||
Long-term equity investments | 18,582,307,907.14 | 18,582,307,907.14 |
Other equity instruments | 162,800,000.00 | 162,800,000.00 |
Other non-current financial assets | ||
Investment properties | 390,310,224.04 | 395,978,156.15 |
Fixed assets | ||
Construction in progress | 372,569,103.57 | 72,569,103.57 |
Bearer biological assets | ||
Oil and gas assets | ||
Right-of-use assets | ||
Intangible assets |
Development expenditure | ||
Goodwill | ||
Long-term deferred expense | ||
Deferred tax assets | 10,900,433.61 | 10,804,928.62 |
Other non-current assets | ||
Total Non-current Assets | 19,518,887,668.36 | 19,224,460,095.48 |
Total Assets | 20,223,410,206.50 | 20,949,443,101.44 |
Current liabilities: | ||
Short-term borrowings | 800,000,000.00 | |
Financial liabilities held for trading | ||
Derivative Financial liabilities | ||
Notes payable | ||
Accounts payable | 561,752.26 | 561,752.26 |
Receipts in advance | ||
Contract liabilities | ||
Employee benefits payable | ||
Taxes payable | 1,421,656.07 | 791,191.77 |
Other payables | 7,715,532.90 | 40,275,566.88 |
Inc: Interest payables | 957,000.01 | |
Dividends payables | ||
Held-for-sale liabilities | ||
Non-current liabilities due within one year | ||
Other current liabilities | ||
Total Current Liabilities | 809,698,941.23 | 41,628,510.91 |
Non-current Liabilities: | ||
Long-term borrowings | ||
Bonds payable | ||
Inc: preferred shares | ||
Perpetual bond | ||
Lease liabilities | ||
Long-term payables | ||
Long-term employee benefits payable | ||
Provisions |
Deferred Income | ||
Deferred tax liabilities | 12,500,420.41 | 12,500,420.41 |
Other non-current liabilities | ||
Total Non-current Liabilities | 12,500,420.41 | 12,500,420.41 |
Total Liabilities | 822,199,361.64 | 54,128,931.32 |
Owners’ equity: | ||
Paid-in capital (share capital) | 6,167,399,389.00 | 6,167,399,389.00 |
Other equity instrument | ||
Inc: preferred shares | ||
Perpetual bond | ||
Capital reserve | 12,775,326,370.33 | 12,775,326,370.33 |
Deduct: Treasury stock | ||
Other comprehensive income | 37,500,000.00 | 37,500,000.00 |
Special reserve | ||
Surplus reserve | 387,458,806.65 | 387,458,806.65 |
Retained earnings | 33,526,278.88 | 1,527,629,604.14 |
Total Owners’ Equity | 19,401,210,844.86 | 20,895,314,170.12 |
Total Liabilities and Owners’ Equity | 20,223,410,206.50 | 20,949,443,101.44 |
3. Consolidated Income Statement
Unit: RMB
Item | Half year of 2020 | Half year of 2019 |
Total operating income | 2,807,980,480.60 | 3,637,419,515.48 |
Inc: Operating income | 2,807,980,480.60 | 3,637,419,515.48 |
Interest income | ||
Insurance gained | ||
Fee and commission income | ||
Total operating costs | 3,244,547,876.16 | 3,098,605,498.12 |
Inc: Operating cost | 1,452,611,180.39 | 1,545,288,459.56 |
Interest expense | ||
Fee and commission expense | ||
Cash surrender value | ||
Net amount of expense of compensation | ||
Net amount of withdrawal of insurance contract reserve | ||
Bonus expense of guarantee slip |
Reinsurance expense | ||
Taxes and surcharges | 6,277,633.04 | 31,833,247.21 |
Sales expense | 700,817,453.92 | 675,313,099.29 |
General and administrative expenses | 518,959,454.14 | 499,631,045.91 |
Research and development expenses | 383,227,531.01 | 304,030,157.51 |
Financial expenses | 182,654,623.66 | 42,509,488.64 |
Inc: Interest expenses | 85,130,012.11 | 46,924,890.43 |
Interest income | 2,889,907.48 | 37,722,676.13 |
Add: Other income | 84,454,707.44 | 230,676.42 |
Investment income (Losses are indicated by “-”) | 128,818,126.44 | 53,971,926.62 |
Inc: Investment income on affiliated company and joint venture | ||
The termination of income recognition for financial assets measured by amortized cost | ||
Exchange income (Loss is indicated by “-”) | ||
Net exposure hedging income (Loss is indicated by “-”) | ||
Income from change of fair value (Loss is indicated by “-”) | ||
Loss of credit impairment (Loss is indicated by “-”) | -770,761.79 | |
Losses of devaluation of asset (Loss is indicated by “-”) | ||
Income from assets disposal (Loss is indicated by “-”) | 162,043.59 | 198,807.74 |
Operating profit (Loss is indicated by “-”) | -223,903,279.88 | 593,215,428.14 |
Add: Non-operating income | 20,148.00 | 1,565,171.86 |
Less: Non-operating expenses | 93,502.28 | 82,996.53 |
Total profit (Total Loss is indicated by “-”) | -223,976,634.16 | 594,697,603.47 |
Less: Income tax expenses | 9,055,694.44 | 101,672,138.32 |
Net profit (Net loss is indicated by “-”) | -233,032,328.60 | 493,025,465.15 |
Classified by continuing/discontinuing operation | ||
(1) Net profit from continuing operations (Net loss is indicated by “-”) | -233,032,328.60 | 493,025,465.15 |
(2) Net profit from discontinued operations (Net loss is indicated by “-”) | ||
Classified by ownership | ||
Net profit attributable to owners of the Company | -233,026,645.16 | 493,025,465.15 |
Minority shareholders’ gains and losses | -5,683.44 |
Other comprehensive income after tax | ||
Net other comprehensive income after tax attributable to controlling interest | ||
1. Other comprehensive income not reclassified into gains or losses | ||
Changes of the defined benefit plans that re-measured | ||
Under the equity method, the share of other comprehensive income not reclassified into gains or losses | ||
Changes in the fair value of other equity instruments | ||
Change in fair value of the enterprise’s own credit risk | ||
Others | ||
2. Other comprehensive income classified into gains or losses | ||
Under the equity method, the share of other comprehensive income classified into gains or losses | ||
Changes in the fair value of other debt instruments | ||
Amount of financial assets reclassified to other comprehensive income | ||
Credit impairment provision for other debt investment | ||
Cash flow hedging reserve | ||
Translation differences arising on translation of foreign currency financial statements | ||
Others | ||
Net after-tax of other comprehensive income attributable to minority shareholders | ||
VII. Total comprehensive income | -233,032,328.60 | 493,025,465.15 |
Total comprehensive income attributable to owners of the Company | -233,026,645.16 | 493,025,465.15 |
Total comprehensive income attributable to minority interests | -5,683.44 | |
VIII. Earnings per share | ||
1. Basic earnings per share | -0.04 | 0.08 |
2. Diluted earnings per share | -0.04 | 0.08 |
Should there be any merger of enterprises under the same control during this reporting period, the net profitachieved by the merged party before the merger shall be: RMB 0.00, and the net profit achieved by the mergedparty in the previous period shall be: RMB 0.00.Legal Representative: Wang ZhendongPerson in charge of the accounting work: Shi LeiPerson in Charge of the Accounting Department: Luo Xue
4. Income statement of the Company
Unit: RMB
Item | Half Year of 2020 | Half Year of 2019 |
I. Total operating income | 7,276,570.86 | 7,276,570.86 |
Less: Operating cost | 5,667,932.11 | 5,668,813.35 |
Taxes and surcharges | 2,120,841.35 | 16,402,430.70 |
Sales expense | ||
General and administrative expenses | 2,930,657.06 | 11,921,385.81 |
Research and development expenses | ||
Financial expenses | 10,672,898.30 | 120.21 |
Inc: Interest expenses | 10,703,779.17 | |
Interest income | -43,607.28 | 2,270.78 |
Add: Other income | 474,801.04 | |
Investment income (Losses are indicated by “-”) | 30,534.61 | |
Inc: Investment income on affiliated company and joint venture | ||
The termination of income recognition for financial assets measured by amortized cost(Loss is indicated by “-”) | ||
Net exposure hedging income (Loss is indicated by “-”) | ||
Income from change of fair value (Loss is indicated by “-”) | ||
Loss of credit impairment (Loss is indicated by “-”) | -382,019.97 | |
Losses of devaluation of asset (Loss is indicated by “-”) | ||
Income from assets disposal (Loss is indicated by “-”) | ||
I. Operating profit (Loss is indicated by “-”) | -14,022,976.89 | -26,685,644.60 |
Add: Non-operating income | ||
Less: Non-operating expenses |
III. Total profit (Total Loss is indicated by “-”) | -14,022,976.89 | -26,685,644.60 |
Less: Income tax expenses | -95,504.99 | |
IV. Net profit (Net loss is indicated by “-”) | -13,927,471.90 | -26,685,644.60 |
1. Net profit from continuing operations (Net loss is indicated by “-”) | -13,927,471.90 | -26,685,644.60 |
2. Net profit from discontinued operations (Net loss is indicated by “-”) | ||
V. Other comprehensive income after tax | ||
1. Other comprehensive income not reclassified into gains or losses | ||
Changes of the defined benefit plans that re-measured | ||
Under the equity method, the share of other comprehensive income not reclassified into gains or losses | ||
Changes in the fair value of other equity instruments | ||
Change in fair value of the enterprise’s own credit risk | ||
Others | ||
2. Other comprehensive income classified into gains or losses | ||
Under the equity method, the share of other comprehensive income classified into gains or losses | ||
Changes in the fair value of other debt i nstruments | ||
Amount of financial assets reclassified to other comprehensive income | ||
Credit impairment provision for other debt investment | ||
Cash flow hedging reserve | ||
Translation differences arising on translation of foreign currency financial statements | ||
Others | ||
VI. Total comprehensive income | -13,927,471.90 | -26,685,644.60 |
VII. Earnings per share | ||
1. Basic earnings per share |
2. Diluted earnings per share |
5. Consolidated Cash Flow Statement
Unit: RMB
Item | Half Year of 2020 | Half Year of 2019 |
I. Cash Flows from Operating Activities: | ||
Cash receipts from the sale of goods and the rendering of services | 7,685,015,351.32 | 7,475,964,695.98 |
Net increase in customer bank deposits and due to banks and other financial institutions | ||
Net increase in borrowings from central bank | ||
Net increase in placements from other financial institutions | ||
Premiums received from original insurance contracts | ||
Net cash received from reinsurance | ||
Net increase in deposits from policyholders | ||
Cash received from interest, fee and commission | ||
Net increase in placements from banks and other financial institutions | ||
Net increase in repurchase business capital | ||
Net cash from acting trading securities | ||
Tax rebates received | ||
Cash received relating to other operating activities | 14,139,064.39 | 887,943.94 |
Sub-total of cash inflows from operating activities | 7,699,154,415.71 | 7,476,852,639.92 |
Cash payments for goods purchased and services received | 519,654,701.91 | 691,809,578.76 |
Net increase in loans and advances to customers | ||
Net increase in deposits with central bank and other financial institutions | ||
Original insurance contract claims paid | ||
Net increase in loans to banks and other financial institutions | ||
Cash paid for interest, fee and commission | ||
Policyholder Dividend Paid Cash paid as policy dividend | ||
Cash paid to and for employees | 2,295,211,119.61 | 1,744,813,719.22 |
Cash paid for all types of taxes | 199,637,364.28 | 261,157,371.15 |
Cash paid relating to other operating activities | 620,975,725.72 | 424,305,172.26 |
Sub-total of cash outflows from operating activities | 3,635,478,911.52 | 3,122,085,841.39 |
Net cash flow from operating activities | 4,063,675,504.19 | 4,354,766,798.53 |
II. Cash flows from investing activities: | ||
Cash receipts from disposals and recovery of investments | 17,567,171,173.89 | 9,456,190,000.00 |
Cash receipts from investment income | 91,865,286.31 | 59,805,746.06 |
Net cash receipts from disposals of fixed assets, intangible assets and other long-term assets | 162,043.59 | |
Net cash receipts from disposals of subsidiaries and other business units | ||
Cash received relating to other investing activities | ||
Sub-total of cash inflows from investing activities | 17,659,198,503.79 | 9,515,995,746.06 |
Cash payments to acquire or construct fixed assets, intangible assets and other long-term assets | 844,329,065.33 | 214,352,186.66 |
Cash paid for investment | 17,970,288,090.00 | 11,806,840,000.00 |
Net increase in pledged loans receivables | ||
Net cash payments for acquisitions of subsidiaries and other business units | ||
Cash paid relating to other investing activities | ||
Sub-total of cash outflows from investing activities | 18,814,617,155.33 | 12,021,192,186.66 |
Net cash flow from investing activities | -1,155,418,651.54 | -2,505,196,440.60 |
III. Cash flows from financing activities: | ||
Cash received from investors | ||
Inc: cash receipts from capital contributions from minority owners of subsidiaries | ||
Cash from borrowings | 2,320,000,000.00 | 360,000,000.00 |
Other cash received relating to other financing activities | ||
Sub-total of cash inflows from financing activities | 2,320,000,000.00 | 360,000,000.00 |
Cash repayments of borrowings | 1,730,000,000.00 | |
Cash payments for distribution of dividends or profits or settlement of interest expenses | 1,556,459,462.95 | 1,453,962,092.80 |
Inc: payments for distribution of dividends or profits to minority owners of subsidiaries | ||
Cash paid relating to other financing activities | 333,478.85 | 320,723.05 |
Sub-total of cash outflows from financing activities | 3,286,792,941.80 | 1,454,282,815.85 |
Net cash flow from financing activities | -966,792,941.80 | -1,094,282,815.85 |
IV. Effect of foreign exchange rate changes on cash and cash |
equivalents | ||
V. Net increase in cash and cash equivalents | 1,941,463,910.85 | 755,287,542.08 |
Add: Initial cash and cash equivalents balance | 2,724,335,001.58 | 648,711,545.32 |
VI. The final cash and cash equivalents balance | 4,665,798,912.43 | 1,403,999,087.40 |
6. Cash Flow Statements of the Company
Unit: RMB
Item | Half Year of 2020 | Half Year of 2019 |
I. Cash Flows from Operating Activities: | ||
Cash receipts from the sale of goods and the rendering of services | ||
Tax rebates received | ||
Cash received relating to other operating activities | 1,748,092.19 | 563,220,614.96 |
Sub-total of cash inflows from operating activities | 1,748,092.19 | 563,220,614.96 |
Cash payments for goods purchased and services received | ||
Cash paid to and for employees | 895,723.48 | |
Cash paid for all types of taxes | 2,606,189.88 | 19,409,326.35 |
Cash paid relating to other operating activities | 707,635,847.22 | 125,205,047.40 |
Sub-total of cash outflows from operating activities | 710,242,037.10 | 145,510,097.23 |
Net cash flow from operating activities | -708,493,944.91 | 417,710,517.73 |
II. Cash flows from investing activities: | ||
Cash receipts from disposals and recovery of investments | 23,960,000.00 | |
Cash receipts from investment income | 1,700,000,000.00 | 1,550,030,534.61 |
Net cash receipts from disposals of fixed assets, intangible assets and other long-term assets | ||
Net cash receipts from disposals of subsidiaries and other business units | ||
Cash received relating to other investing activities | ||
Sub-total of cash inflows from investing activities | 1,700,000,000.00 | 1,573,990,534.61 |
Cash payments to acquire or construct fixed assets, intangible assets and other long-term assets | 300,000,000.00 | 1,929,500.00 |
Cash paid for investment | 1,500,000.00 | 24,060,000.00 |
Net cash payments for acquisitions of subsidiaries and other business units | ||
Cash paid relating to other investing activities | ||
Sub-total of cash outflows from investing activities | 301,500,000.00 | 25,989,500.00 |
Net cash flow from investing activities | 1,398,500,000.00 | 1,548,001,034.61 |
III. Cash flows from financing activities: | ||
Cash received from investors | ||
Cash from borrowings | 800,000,000.00 | |
Other cash received relating to other financing activities | ||
Sub-total of cash inflows from financing activities | 800,000,000.00 | |
Cash repayments of borrowings | 216,000,000.00 | |
Cash payments for distribution of dividends or profits or settlement of interest expenses | 1,489,922,632.52 | 1,738,432,883.87 |
Cash paid relating to other financing activities | 333,478.85 | 1,503,370.80 |
Sub-total of cash outflows from financing activities | 1,490,256,111.37 | 1,955,936,254.67 |
Net cash flow from financing activities | -690,256,111.37 | -1,955,936,254.67 |
IV. Effect of foreign exchange rate changes on cash and cash equivalents | ||
V. Net increase in cash and cash equivalents | -250,056.28 | 9,775,297.67 |
Add: Initial cash and cash equivalents balance | 6,931,803.33 | 5,304,519.61 |
VI. The final cash and cash equivalents balance | 6,681,747.05 | 15,079,817.28 |
7. Consolidated Statement of Changes in Owners’ Equity
Figures of Current per
Unit: RMB
Year of 2019
Unit: RMB
8. Statement of Changes in Owners’ Equity
Figures of current period
Unit: RMB
Figures of previous period
Unit: RMB
Section III. General Information
1. Overview of the Company
Offcn Education Technology Co., Ltd. (hereinafter referred to as the “Company” or “the Company”) was formerlyknown as Yaxia Automobile Co., Ltd. (hereinafter referred to as “Yaxia Auto”). Yaxia Auto, a limited companyestablished by Wuhu Yaxia Industrial Co., Ltd obtained the Enterprise Business License of Enterprise LegalPerson No. 3402012104768 issued by Wuhu Administration for Industry and Commerce on November 30, 2006.Yaxia Auto was approved by the China Securities Regulatory Commission (hereinafter referred to as the “CSRC”)for The approval of the initial public offering of Wuhu Yaxia Automobile Co., Ltd. (CSRC License [2011] No.1046) and issued RMB 22 million ordinary shares to the public and traded on the Shenzhen Stock Exchange inAugust 2011. The controlling shareholder is Anhui Yaxia Industrial Co., Ltd. (hereinafter referred to as “YaxiaIndustrial”). On July 1, 2016, the Company obtained the No. 91340200711040703A “Enterprise Business Licenseof Enterprise Legal Person” issued by Wuhu Administration for Industry and Commerce. As of June 30, 2020, theCompany's share capital was RMB 6,167,399,389.00.In accordance with the resolution of the 3rd Extraordinary General Meeting of Yaxia Auto in 2018 and theresolution of the 24th Board Meeting of the 4th Board of Directors, and approved by China Securities RegulatoryCommission’s The approval of major asset restructuring of Yaxia Automobile Co., Ltd. and the issuance of sharesto Lu Zhongfang and others for asset purchase (Securities Regulatory Commission [2018] No. 1975), Yaxia Autoswapped all assets and liabilities (“exchange-out assets”) as of the assessment date, excluding the retained assetsthat do not constitute business, with the equivalent portion (“exchange-in assets”) of 100.00% of the equity inBeijing Offcn Education Technology Co., Ltd. (hereinafter referred to as “Offcn Ltd.”) respectively held by 11transaction counter-parties including Li Yongxin, and paid the difference between the exchange-out assets and theexchange-in assets by issuing shares.On December 27, 2018, Yaxia Auto and the counterpart Yaxia Industrial signed the Confirmation of Delivery ofExchange-out Assets. The delivery date of the exchange-out assets was December 27, 2018. And from the date ofdelivery, Yaxia Auto and the counterpart would complete the delivery obligations, regardless of whether thedelivery, ownership change registration or filing procedures of exchange-out assets (including but not limited toland use rights, housing ownership, intellectual property rights and qualifications, licenses, other intangible assets,etc.) is actually completed; the ownership of the exchange-out assets belongs to Yaxia Industrial, and all the rights,obligations, responsibilities and risks related to the disposed assets (including contingent liabilities and implicitliabilities) are owned and undertaken by Yaxia Industrial, which has the completely exclusive actual control anddisposal rights over the exchange-out assets, while Yaxia Auto no longer has any actual rights. On the same day,Offcn Ltd. completed the registration procedures for industrial and commercial changes on the matters ofshareholder change. After the completion of this alteration, Yaxia Auto holds a 100.00% stake in Offcn Ltd., andaccordingly, Li Yongxin and Lu Zhongfang become the controlling shareholder and actual controller of theCompany. On February 2, 2019, Yaxia Auto changed its name and its business scope.
On January 23, 2019, the registration procedures for the transfer of shares of the Company and the new shares ofthe Company related to the restructuring transaction were completed.Unified social credit code: 91340200711040703ACompany residence: Yaxia Automobile City, Yijiang North Road, Jiujiang District, Wuhu City, Anhui ProvinceHeadquarters Address: Hanhua Century Building B, Xueqing Road 23, Haidian District, BeijingNature of business: EducationNature of customer: Mainly natural personsBusiness Scope: engaged in technology development, technical services, technology promotion, technologytransfer, technical consulting and the business of education and training (reserved to branches) in the field ofeducation and technology; holding exhibitions; organizing cultural and artistic exchange activities (excludingperformances); offering conference services and consulting services of enterprise management. (Projects subjectto approval according to the law can be carried out under the approval of the relevant departments)The Financial Statements were approved by the Board of Directors of the Company on August 28, 2020.
2. The scope of the consolidated financial statements
The consolidated scope of the consolidated financial statements of the Company is determined on a control basis,including the financial statements of the Company and all subsidiaries. A subsidiary is an enterprise or entitycontrolled by the Company. The scope of the consolidated financial statements is detailed in Note IX (1) “Interestin subsidiaries” of this report; changes in the scope of consolidated financial statements are detailed in Note VIII.“Changes in the Consolidated Scope” of this report.Section IV. Basis for Preparation of Financial Statements
1. Basis of preparation
The financial statements are prepared on a going concern basis, according to the actual transactions and therelevant provisions of the Accounting Standards for Business Enterprises (collectively referred to as the “CASs”),and based on the important accounting policies and accounting estimates described below.
2. Going concern
The Company evaluated the ability to continue operations for 12 months from the end of the reporting period anddid not find any matters and situations that may cast significant doubts on the ability to continue operations.Therefore, it is reasonable for the Company to prepare financial statements on a going concern basis.Section V. The Company’s Significant Accounting Policies and Accounting EstimatesNotes on specific accounting policies and accounting estimates:
None
1. Statement of compliance with the Accounting Standards for Business Enterprises
The financial statements based on the above-mentioned preparation basis meet the requirements of the latestCASs and its application guidelines, interpretations, and other relevant regulations issued by the Ministry ofFinance, which truly and completely present the Company’s financial position, business performance, cash flowsand other information for the year then ended. In addition, the financial report is compiled by reference to thelisting and disclosure requirements of the Rules for the Information Disclosure and Compilation of CompaniesPublicly Issuing Securities NO.15 — General Provisions for Financial Report (Revised in 2014) of the CSRC aswell as the Notice on Implementation of the New Accounting Standards for Listed Companies (Letter of theAccounting Department [2018] no. 453).
2. Accounting period
The Company’s accounting period starts on January 1 and ends on December 31.
3. Business cycle
The Company’s business cycle starts on January 1 and ends on December 31.
4. Recording currency
The Company adopts Renminbi (RMB) as their recording currency.
5. The accounting treatment of business combinations involving enterprises under common control and businesscombinations not involving enterprises under common control
5.1 The accounting treatment of business combinations involving enterprises under common controlThe Company achieves a merger under the same control in one transaction or through step-by-step multipletransactions. Assets and liabilities obtaining from the merger of enterprise are measured according to the share ofbook value of consolidated financial statements of final controlling party under the owner’s equity of combinedparty within combining date. The difference between the book value of the net assets obtained by the Companyand book value of combined consideration paid (or the aggregate face value of shares issued as consideration) isadjusted to the capital reserve; if the capital reserve is insufficient to offset, the retained earnings shall be adjusted.
5.2 The accounting treatment of business combinations involving enterprises under uncommon controlWhere the cost of combination exceeds the acquiree’s interest in the fair value of the acquiree’s identifiable netassets, the difference is treated as an asset and recognized as goodwill, which is measured at cost on initialrecognition. If the combination cost is less than the share of identifiable fair value of net assets of acquiree, firstly,conducting the review of measurement is necessary to achieve the acquiree the identifiable assets, liabilities andthe fair value of contingent liabilities as well as the combination costs. If the acquiree combination costs afterreviews are still less than the fair value of identifiable net asset, the difference will be added into the currentprofits and losses.To achieve business combinations not under common control by step-by-step multiple transactions should behandled in the following order:
(1) Adjust the initial investment cost of long-term equity investments. If the equity held before the purchase dateis accounted for using the equity method, it is remeasured at the fair value of the equity on the purchase date, andthe difference between the fair value and its book value is included in the current investment income; Changes inother comprehensive income and other owners’ equity under the equity method shall be converted to the currentincome at the acquisition date, except for other comprehensive income arising from the net liabilities or net assets’changes of the benefit plan remeasured by the investee.
(2) Recognize goodwill (or the amount included in the current profit or loss). Compare the initial investment costof the adjusted long-term equity investment with the fair value of the identifiable net assets of the subsidiary thatshould be enjoyed on the purchase date. If the former is greater than the latter, the difference is recognized asgoodwill; the former is less than the latter, and the difference is booked into the current profit and loss.Circumstances of disposing of equity through step-by-step multiple transactions to the loss of control oversubsidiaries
(1) Determine whether the various transactions in the process of step-by-step disposal of equity to the loss ofcontrol over subsidiaries follow the “package deal” principleGenerally transactions in stages are treated as a package deal in accounting if the transaction terms, conditions,and economic impact of the disposal of the subsidiary’s equity interests comply with one or more of the following:
1) These transactions are made simultaneously or with consideration of influence on each other;
2) These transactions can only achieve a complete business outcome when treated as a whole;
3) The occurrence of a transaction depends on the occurrence of at least one of the other transactions;
4) A transaction is uneconomical when treated alone, but is economical when considered together with othertransactions.
(2) The accounting method of each transaction belonging to the “package deal” in the process of disposing of theequity in stages to the loss of control over the subsidiaryAll the transactions, belonging to the package deal in the process of disposing of equity investments insubsidiaries to the loss of control, should be accounted for as one transaction disposing of the subsidiary to theloss of control over it; however, the difference between each disposal price and the share of the subsidiary’s netassets obtained by the disposal of investment before the loss of control shall be recognized as othercomprehensive income in the consolidated financial statements and shall be transferred to the profit and loss ofthe period when the control is lost.In the consolidated financial statements, the remaining equity should be remeasured at its fair value on the datewhen the control is lost. The difference between the sum of the consideration obtained from the disposal of theequity and the fair value of the remaining equity, and the shares of the net assets of the original subsidiarycalculated from the purchase date based on the original shareholding ratio, shall be included in the investment
income of the period when the control is lost. Other comprehensive income related to the original subsidiary’sequity investment shall be converted to current investment income when control is lost.
(3) The accounting method of each transaction not belonging to the “package deal” in the process of disposing ofthe equity in stages to the loss of control over the subsidiaryIf the disposal of the investment in the subsidiary does not lose control, the difference between the disposal pricein the consolidated financial statements and the share of the subsidiary’s net assets obtained from the disposal ofinvestment is included in the capital reserve (capital premium or equity premium). If the capital premium isinsufficient to offset, the retained earnings should be adjusted.When the control over disposing of the investment in a subsidiary is lost, in the consolidated financial statements,the remaining equity should be remeasured at its fair value on the date when control is lost. The sum of theconsideration obtained from the disposal of equity and the fair value of the remaining equity minus the share ofthe net assets that should be calculated by the original subsidiary from the date of purchase based on the originalshareholding ratio is included in the investment income of the period when the control is lost. Othercomprehensive income related to the equity investment of the original subsidiary shall be converted to currentinvestment income when control is lost.
6. Preparation of consolidated financial statements
Consolidated financial statements based on the Parent’s and its subsidiaries’ financial statements are prepared bythe Company in accordance with the CASs No.33 — Consolidated financial statement and other relevantmaterials.
7. Classification of joint arrangement and accounting methods of joint operations
7.1 Identification and classification of joint arrangements
A joint arrangement refers to an arrangement jointly controlled by two or more parties. The joint arrangement hasthe following characteristics: (1) all participants are bound by the arrangement; (2) two or more participantsexercise joint control over the arrangement. No single party shall be able to control the arrangement, and any partythat has joint control over the arrangement shall be able to prevent any other party or combination of parties fromcontrolling the arrangement alone.Joint control refers to the shared control over a certain arrangement as required in the contract. And the decisionabout the activities of the arrangement can be made only when all participants with the shared control haveconsented.A joint arrangement is classified as either a joint operation or a joint venture. A joint operation is a jointarrangement whereby the joint operators have rights to the assets, and obligations for the liabilities, related to thearrangement. A joint venture is a joint arrangement whereby the joint parties only have the rights to the net assets
under this arrangement.
7.2 Accounting treatment of joint arrangements
A joint operator shall recognize the following items in relation to its interests in a joint operation, and account forthem in accordance with relevant accounting standards: (1) Its solely-held assets, and its share of any assets heldjointly; (2) Its solely-assumed liabilities, and its share of any liabilities incurred jointly; (3) Its revenue from thesale of its share of the output arising from the joint operation; (4) Its share of the revenue from sale of the outputby the joint operation; (5) Its solely-incurred expenses and its share of any expenses incurred jointly.The participants in a joint venture shall, in accordance with the Accounting Standards for Enterprises No.2 —Long-term Equity Investment, make accounting arrangements for the investment of the joint venture.
8. Criteria for the recognition of cash and cash equivalents
The term “cash” in cash flow statement refers to cash on hand and deposits that are available for payment at anytime. The term of “cash equivalents” refers to short-term (usually due within 3 months from the purchase date)and highly liquid investments that are readily convertible to known amounts of cash and subject to an insignificantrisk of changes in value.
9. Translation of foreign currency transactions and foreign currency statement
9.1 Translation of transactions denominated in foreign currencies
On initial recognition, a foreign currency amount is translated into the amount denominated in RMB by applyingthe spot exchange rate on the date of the transaction announced by People’s Bank of China. At the balance sheetdate, foreign currency balance comprised of foreign currency monetary items shall be translated at the spotexchange rate on the balance sheet date, and the exchange differences caused by different exchange rates, exceptthe exchange difference of the principal and interest of foreign currency special loans related to the acquisitionand construction of assets that meet the capitalization conditions, shall be included into profit and loss for theperiod; foreign currency non-monetary items measured at historical cost are still converted at the spot exchangerate on the transaction date, and their RMB amount is not changed; foreign currency non-monetary itemsmeasured at fair value, are translated at the spot exchange rate on the fair value determination date, and thedifference shall be included into profit and loss for the period or other comprehensive income.
9.2 Translation of financial statements denominated in foreign currencies
The assets and liabilities of the balance sheet are translated at the spot exchange rate of the balance sheet date; allitems about the owner’s equity except the “undistributed profits” are translated at the spot exchange rate on thetransaction date; the revenue and expenses in the income statement are translated at the approximate rate of thespot exchange rate on the transaction date. Differences arising from the above translation of financial statementsdenominated in foreign currencies are recognized as other comprehensive income.
10. Financial instruments
10.1 Recognition and derecognition of financial instruments
The Company recognizes a financial asset or a financial liability when it becomes the contractual party of thefinancial instrument.All regular ways of purchasing or selling of financial assets are recognized and derecognized on a trade date basis.Regular ways of purchasing or selling mean that the receiving or delivery of financial assets should be within thetime limit stipulated by regulations or common practices, as agreed in the terms of the contract. Trade date is thedate on which the Company promises to buy in or sell out the financial assets.The Company will derecognize the financial assets (either a part, or a part of a similar group), and write it off theaccount and the balance sheet, if following conditions are met:
(1) Expiration of the right to receive cash flows from financial assets;
(2) The Company’s right to receive cash flows from financial assets has been transferred, or bear the obligation topay all cash received to the third party in time due to “Hand-Over arrangement”; and (a) almost all risks andbenefits of the ownership of the financial assets have been transferred virtually, or (b) though none of risks andbenefits of the ownership the financial assets have been transferred or retained virtually, the Company waivesthe control of the financial assets.
10.2 Classification and measurement of financial assets
According to the business model for managing financial assets and the contractual cash flow characteristics offinancial assets, the Company’s financial assets have initially been classified as follows: financial assets measuredat amortized cost, financial assets measured at fair value and the changes are included in other comprehensiveincome, and financial assets measured at fair value and the changes are included in profit or loss of the period.Subsequent measurement of financial assets depends on its categories.The Company’s classification of financial assets is based on the Company’s business model of managing financialassets and its characteristics of cash flows.
(1) Financial assets at amortized cost
Financial assets are classified as financial assets at amortized cost when following conditions are met: theCompany’s business model for managing financial assets targets to receive contractual cash flows; The contractualterms of the financial assets stipulate that the cash flows generated on a specific date are exclusively used to paythe principal and the interest based on the outstanding principal amount. For such financial assets, effectiveinterest rate method is applied to subsequently measure them at amortized cost, and gains or losses arising fromamortization or impairment are recognized in current profit or loss.
(2) Liability investment at fair value through other comprehensive income
Financial assets are classified as liability at fair value through other comprehensive income when followingconditions are met: the Company’s business model for managing financial assets targets at both the receiving of
contractual cash flows and the sale of financial assets; the contractual terms of the financial asset stipulate that thecash flows generated on a specific date are exclusively used to pay the principal and the interest based on theoutstanding principal amount. Such financial assets are subsequently measured at fair value. The discount orpremium is amortized by using the effective interest method and recognized as interest income or expense. Exceptthat the impairment loss and the exchange differences of foreign currency monetary financial assets arerecognized as profit or loss for the period, the changes in the fair value of such financial assets are recognized asother comprehensive income, and the accumulated gains or losses are transferred into profit or loss until suchfinancial assets are derecognized. Interest income related to such financial assets is included in the current profitand loss.
(3) Equity investment at fair value through other comprehensive income
The Company irrevocably designated the non-trading equity investment as financial assets at fair value throughother comprehensive income, and the related dividend income is included in profit or loss. The changes of fairvalue are included in other comprehensive income and the accumulated gains or losses are transferred to retainedearnings until the financial assets are derecognized.
(4) Financial assets at fair value through profit or loss
Any financial assets that are not recognized as the financial assets at amortized cost or at fair value through othercomprehensive income mentioned above are measured at fair value through profit or loss. At the time of initialrecognition, in order to eliminate or significantly reduce accounting mismatches, financial assets can bedesignated as financial assets at fair value through profit or loss. Such financial assets are subsequently measuredat fair value, and all changes in fair value are recognized in profit or loss.When and only when, the Company changes its business model for managing financial assets it must reclassify allaffected financial assets.For financial assets at fair value through profit or loss, the related-party transaction expense is directly recognizedin current profit or loss as incurred. And other financial assets’ transaction expense is included in the initialrecognition amount.
10.3 Classification and measurement of financial liabilities
The Company’s financial liabilities have initially been classified as follows: financial liabilities at amortized costand financial liabilities at fair value through profit or loss.The financial liabilities meeting any of the following conditions can be initially designated as the financialliabilities at fair value through profit and loss: (1) Such designation can eliminate or significantly reduceaccounting mismatches. (2) According to corporate risk management or investment strategies as stated in formalwritten documents, the management and performance evaluation of financial liability portfolios or combinationsof financial assets and financial liabilities are based on fair value, and reported to key management personnel onthis basis within the enterprise. (3) Such financial liabilities include embedded derivatives that need to be split
separately.The Company determines the classification of financial liabilities at initial recognition. For financial liabilitiesmeasured at fair value through profit or loss, the related-party transactionexpense is directly recognized in currentprofit or loss. The related-party transactionexpense of other financial liabilities is included in the initialrecognition amount.Subsequent measurement of financial liabilities depends on its categories:
(1) Financial liabilities at amortized cost
Such financial liabilities are subsequently measured by using the effective interest rate method at amortized cost.
(2) Financial liabilities at fair value through profit or loss
Financial liabilities measured at fair value and booked into current profits and losses, which includes tradingfinancial liabilities (including derivatives of financial liabilities) and those initially designated as financialliabilities at fair value through profit or loss.
10.4 Offsetting of financial instruments
If the following conditions are met at the same time, the net amount obtained after the offsetting of financial assetsand financial liabilities shall be shown in the balance sheet: there is a legal right to offset the recognized amount,and such legal right is currently enforceable; plan to settle on a net basis, or cash the financial assets and liquidatethe financial liabilities at the same time.
10.5 Impairment of financial assets
The Company undertakes impairment treatment and confirms loss provisions based on expected credit losses asfor the financial assets at amortized cost, debt instrument investments at fair value through other comprehensiveincome . financial guarantee contracts and etc.. Credit loss refers to the difference between the cash flow of allcontracts discounted at the original effective interest rate and the expected cash flow of all contracts receivables,i.e. the present value of all cash shortages.The Company estimates, individually or in combination, the expected credit losses of financial assets measured atamortized cost and financial assets (debt instruments) measured at fair value through other comprehensive income,taking into account all reasonable and evidence-based information, including forward-looking information.
(1) General model of expected credit loss
If the credit risk of the financial instrument has increased significantly since the initial recognition, the Companyshall measure the loss provision at the amount equivalent to the expected credit loss of the financial instrument forthe entire life of the instrument; If the credit risk of the financial instrument has not increased significantly sincethe initial recognition, the Company shall measure the loss provision at the amount equivalent to the expectedcredit loss of the financial instrument in the next 12 months. The increase or rollover amount of the loss provisionshall be recorded in the current profit and loss as an impairment loss or gain. For the Company’s specific
assessment of credit risk, please refer to this report Note X “Risks Associated With Financial Instruments” fordetails.The credit risk of the instrument is generally deemed to have increased significantly if the default is more than 30days, unless there is conclusive evidence that the credit risk of the instrument has not increased significantly sincethe initial recognition.Specifically, the Company divides the process of credit impairment of financial instruments without creditimpairment at the time of purchase or origination into three stages. There are different accounting treatments forthe impairment of financial instruments at different stages:
Stage 1: credit risk has not increased significantly since initial recognition.For the financial instrument at this stage, the Company shall measure the loss provision according to the expectedcredit loss in the next 12 months, and calculate the interest income according to its book balance (that is, theimpairment provision is not deducted) and the actual interest rate (if the instrument is a financial asset, the same asbelow).Stage 2: Credit risk has increased significantly since the initial recognition, but credit impairment has not yetoccurred.For a financial instrument at this stage, the Company shall measure the loss provision according to the expectedcredit loss of the instrument throughout its life, and calculate interest income according to its book balance andactual interest rate.Stage 3: Credit impairment occurs after initial recognition.For the financial instrument in this stage, the Company shall measure the loss provision according to the expectedcredit loss of the instrument throughout its lifetime, but the calculation of interest income is different from that ofthe financial asset in the first two stages. For the financial assets whose credit impairment has occurred, theCompany shall calculate the interest income at their amortized cost (book balance less the impairment provision,that is, book value) and the actual interest rate.For financial assets whose credit impairment has occurred at the time of purchase or origin, the Company shallonly recognize the changes in the expected credit loss during the whole duration after the initial recognition asloss provision, and calculate interest income at their amortized cost and the actual interest rate adjusted by credit.
(2) The Company chooses not to compare the credit risk of a financial instrument with a lower credit risk on thebalance sheet date with the credit risk at the time of the initial recognition, but directly assumes that the credit riskof the instrument has not increased significantly since the initial recognition.If the Company confirms that the default risk of the financial instruments is low, the borrowers’ short-term abilityto fulfill its obligation to pay the contract cash flow is very strong, and even the economic situation and businessenvironment is in a long-term adverse change, the borrower’s ability to fulfill its obligation to pay the contract
cash flow will not be necessarily reduced, then the financial instruments can be deemed with a lower credit risk.
(3) Receivables and lease receivables
The Company, for the receivables stipulated in the Accounting Standards for Enterprises No. 14 — Revenues andwithout major financing elements (including the situation when the financing elements no more than a year in thecontract are not taken into consideration according to the Standards), adopts the simplified model of expectedcredit losses, and measures the loss provision always in accordance with the expected amount of credit lossesthroughout the duration.For receivables containing significant financing elements and lease receivables specified in the AccountingStandards for Business Enterprises No. 21 — Leasing, the Company makes an accounting policy choice andadopts a simplified model of expected credit loss, that is, to measure the loss provision according to the amountequivalent to the expected credit loss in the whole duration.
10.6 Financial assets transfer
If almost all the risks and rewards of ownership of financial assets have been transferred to the transferee, thefinancial assets are derecognized; if almost all the risks and rewards of ownership of the financial assets areretained, the financial assets are not derecognized.Neither transfer nor retain almost all risks and rewards of ownership of financial assets, which are dealt with asfollows: if the control of financial assets are waived, derecognize the financial assets and recognize the assetsand liabilities; if not, it needs to recognize the relevant financial assets according to the extent to which theycontinue to be involved in the transferred financial assets, and recognize the related liabilities.If the transferred financial assets are continued to be involved by financial warranty, the assets should berecognized at the lower one between the book value of the financial assets and the financial warranty amount. Thefinancial warranty amount refers to the maximum amount of the consideration received that will be required to berepaid.
11. Notes receivable
None
12. Accounts receivable
For accounts receivable, whether significant financing is involved in or not, the simplified model of expectedcredit loss is adopted. The Company will always measure its provision for loss based on the amount equivalent tothe expected credit loss of its entire duration, and the increase or reversal amount of the provision for lossresulting therefrom is included in the profit and loss of the period as an impairment loss or gain.The Company considers all reasonable and evidence-based information, including forward-looking information,to estimate the expected credit loss of the accounts receivables individually or in combination.When a single financial asset can evaluate the expected credit loss at a reasonable cost, the Company chooses to
calculate the credit loss individually. When a single financial asset cannot evaluate the expected credit loss at areasonable cost, the Company will divide the accounts receivables into several combinations in accordance withthe characteristics of credit risk, and the expected credit loss is calculated on the basis of the combination. Thebasis for determining the combination is as follows:
Types of combination | Determining the basis of the combination |
Combination 1 | Receivables from related companies |
Combination 2 | Receivables from hotel services |
Combination 3 | Other receivables |
For the accounts receivable classified as a combination, the Company refers to the historical credit loss experience,and combines the current situation and the forecast of future economic conditions, to prepare a comparison tableof the age of accounts receivable and the expected credit loss rate for its entire duration and calculate the expectedcredit loss.
13. Receivables financing
If a financial asset meets the following conditions at the same time, it is recognized as a financial assets at fairvalue through other comprehensive income: the Company’s business model for managing the financial asset is toboth collect contractual cash flows and sell financial assets.The contractual terms of the financial asset stipulatethat the cash flows generated on a particular date are only used as payment of principal and interest based on theamount of outstanding principal.The Company transfers the receivables held by discount or endorsement with a high frequency and a large amount,and its actual business model of management is characterized by both receiving contractual cash flows and sellingthem. In accordance with the relevant provisions about financial instruments, the receivables mentioned above arerecognized as financial assets at fair value through other comprehensive income.
14. Other receivables
Determination method and accounting treatment method of expected credit loss of other receivablesThe Company adopts the general model of expected credit loss to deal with other receivables, as detailed in NoteV (10) “Financial Instruments”.The Company considers all reasonable and substantiated information, including forward-looking information, toestimate the expected credit loss of other receivables individually or in combination.When single financial assets can evaluate the expected credit loss at a reasonable cost, the Company chooses tocalculate the credit loss individually. When a single financial asset cannot evaluate the expected credit loss at areasonable cost, the Company will divide the other receivables into severalportfolios in accordance with thecharacteristics of credit risk, and the expected credit loss is calculated on the basis of the combination. The basisfor determining the combination is as follows:
Type of combination | Determining the basis of the combination |
Combination 1 | Receivables from related parties |
Combination 2 | Receivables from employee reserve funds, deposits, and security deposits |
Combination 3 | Receivables not in Combination 1 and Combination 2 |
For other receivables divided into portfolios, the Company refers to the historical credit loss experience andcombines the current situation and the forecast of future economic conditions, to calculate the expected credit lossbased on default risk exposure and expected credit loss rate in the next 12 months or the whole duration.
15. Inventory
15.1 Classification of inventories
Inventories refer to the finished goods or commodities held for sale in daily activities, goods in progress in theproduction process, and consumed materials and supplies in the process of production or providing services.
15.2 Method of valuation for delivery of inventory
The monthly weighted average method is used to deliver the inventory.
15.3 The basis for determining the net realizable value of inventories and the method of accruing inventorydepreciation reservesAt the balance sheet date, inventories are measured at the lower of cost and net realizable value. If the netrealizable value is below the cost of inventories, a provision for decline in value of inventories is made. Forinventories directly used for sale, in the normal production and operation process, the net realizable value isdetermined by the amount of the estimated selling price of the inventory less the estimated sales cost and relevanttaxes and fees; for material inventories that need to be processed, in the normal production and operation process,the net realizable value is determined by the amount of the estimated selling price of finished products producedless the estimated cost to be occurred during the producing process, the estimated selling expenses and relatedtaxes and fees; on the balance sheet date, if some of the inventory has contractual price and the others do not , thenet realizable value is determined separately and by comparing with its corresponding cost, the amount of theprovision for inventory depreciation or reversal is determined separately.
15.4 Inventory stocktaking system
The perpetual inventory system is maintained for inventory stocktaking system.
15.5 Amortization of low-value consumables and packages
(1) Low-value consumables
Low-value consumables are amortized by one-time write-off.
(2) Packages
Packages are amortized by one-time write-off.
16. Contract assets
None
17. Contract costs
None
18. Holding for sale
The Company divides the corporate components (or non-current asset) that meet all of the following conditionsinto holding for sale:(1) Based on the usual practice of selling such assets or disposal groups in similartransactions, they can be sold immediately under current conditions; (2) The sale is highly probable, a resolutionhas been made on a sale plan, a firm purchase commitment (a firm purchase commitment refers to a legallybinding purchase agreement signed by the enterprise and other parties.The agreement has important items abouttransaction price, time and sufficiently severe default penalty so there is little possibility of significantadjustment or revocation of the agreement) has been obtained and it is expected that the sale will be completedwithin one year. Approvals from relevant authorities or regulatory authorities have been obtained in accordancewith relevant regulations.The Company adjusts the expected net salvage value held for sale to reflect the net amount of its fair value lesscosts to sell (not over its original book value). The difference between the original book value and the adjusted netresidual value is included in the profit or loss of the current period as an asset impairment loss. At the same time,provision for impairment of assets held for sale is made. For the amount of impairment loss of assets confirmed bythe disposal group held for sale, the book value of goodwill in the disposal group should be offset first, and thenthe the book value should be offset on the proportion of the book value of various non-current assets in thedisposal group which is applicable to the measurement requirements of this standard.If the net value of the fair value of the non-current assets held for sale on the balance sheet date less than theselling expenses increases, the amount of the previous write-down shall be restored, it shall be reversed within theamount of asset impairment loss recognized after being classified as held for sale, and the reversed amount shallbe included in the current profit and loss. The amount of the loss is reversed and the amount reversed is includedin the current profit or loss. Impairment losses on assets recognized prior to classification as held for sale shall notbe reversed. If the net value of the fair value of the disposal group held for sale on the subsequent balance sheetday less than the selling expenses increases, the amount previously written down shall be restored, it shall bereversed within the amount of asset impairment loss recognized by the non-current assets which are applicable tothe measurement requirements of this standard after being classified as held for sale, and the reversed amount isincluded in the current profit or loss. The book value of the goodwill that has been offset and the asset impairmentloss recognized before the non-current assets applicable to the measurement of this standard are classified as heldfor sale shall not be reversed. For the subsequent reversal of the asset impairment loss confirmed by the disposalgroup held for sale, the face value shall be increased on the proportion of the book value of various non-current
assets applicable to the measurement requirements of this standard in the disposal group except the goodwill.If the Company loses control of the subsidiary because of some reasons including its sale of investments in thesubsidiary, it shall classify the overall investment in the subsidiary as held for sale in the parent company’sindividual financial statements and classify all the assets and liabilities of the subsidiary as held for sale in theconsolidated Financial Statements when the investment in the subsidiary to be sold meets the criteria for the heldfor sale, whether the Company retains part of the equity investment after the sale.
19. Debt investment
The Company uses the general model of expected credit losses for debt investment. For details, please refer toNote V. (10). “Financial Instruments”.
20. Other debt investment
None
21. Long-term receivables
None
22. Long-term equity investments
22.1 Determination of investment costs
(1) In case the enterprise mergers are under same control and the combining party offers combined considerationby paying in cash, transferring non-cash assets, assuming debt or issuing equity securities, the initial investmentcost shall be book value of the share of the combined party owner’s equity in the consolidated financial statementsof the final control party on the combination date. Capital reserves (capital premium or equity premium) areadjusted based on the difference between initial investment cost in the long-term equity investment and bookvalue of the paid merger consideration or the total amount of the face value of the issued shares; if capital reservesare insufficient to write-downs, it needs to adjust the retained earnings.Where an enterprise merger under the samecontrol is realized step by step, the initial investment cost shall bethe owner’s equity share in the combined party’s book calculated on shareholding ratio on the merger date. Thedifference between the initial investment cost and the book value of the original long-term equity investment plusthe sum of the book values of further consideration paid for the new shares on the merger date is adjusted forcapital reserve (capital premium or equity premium). If capital reserve is insufficient to offset, it needs to adjustthe retained earnings.
(2) If the enterprise mergers are under the same control , the initial investment cost shall be the fair value ofmerger consideration paid on the acquisition date.
(3) Except for the situation of enterprise merger: if the purchase is paid in cash, the initial investment cost shall bethe purchase price actually paid; Where equity securities are issued, the fair value of equity securities issued shallbe taken as the initial investment cost; Where an investor invests, the initial investment cost shall be the value
agreed upon in the investment contract or agreement (except where the value agreed upon in the contract oragreement is not fair).
22.2 Subsequent measurement and recognition methods of profits and losses
For the long-term equity investment controlled by the Company to the investee, the Company shall adopt the costmethod in the individual financial statements of the Company; long-term equity investments with joint control orsignificant influence shall be accounted for using the equity method.Under the cost method, a long-term equity investment is measured at initial investment cost. Except for the theprice actually paid upon investment or cash dividends or profits already declared but not yet paid in theconsideration, investment income is recognized in the period in accordance with the attributable share of cashdividends or profit distributions declared by the investee. And at the same in accordance with the relevant assetimpairment policy, whether the long-term investment is declined in value shall be considered.For checking by the equity method, if the initial investment cost of the long-term equity investment is greater thanthe fair value share of the net identifiable assets of the investee in the investment, the difference between themshall be classified as initial investment cost of the long-term equity investment; if the initial investment cost of thelong-term equity investment is smaller than the fair value share of the net identifiable assets of the investee in theinvestment, the difference is included in current profit and loss and the cost of the long-term equity investment isadjusted.When the equity method is adopted, after the acquisition of long-term equity investment, the investment profit andloss shall be recognized and the book value of long-term equity investment shall be adjusted according to theshare of net profit and loss realized by the investee that should be enjoyed or shared. Upon the confirmation of theenjoyed share of the net profit and loss from the invested entity, it shall be made on the basis of the fair value ofthe identifiable assets of the investee when the investment is acquired, according to the company's accountingpolicies and accounting periods, offsetting insider trading profits and losses between associated enterprises andjoint ventures, calculating the proportion that shall be included in investor according to the shareholding ratio (butif insider trading loss belongs to the asset impairment loss, it should be fully confirmed) and adjusting the netprofit of the investee. According to the profit or cash dividend declared to be distributed by the investee, the sharepayable shall be calculated, and correspondingly the book value of the long-term equity investment is reduced.The company shall recognize the net loss incurred by the investee to the extent that the book value of thelong-term equity investment and other long-term rights and interests substantially constituting the net investmentof the investee shall be written down to zero, except where the company is obligated to bear additional losses. Forthe changes of owners' equity other than the net profit and loss of the investee, the book value of the long-termequity investment shall be adjusted and included in the owners' equity.
22.3 Determine the basis of controlling and significant influence on the invested entityControl refers to having the power over the investee, enjoying the variable return through participating in the
investee's relevant activities, and having the ability to use the power over the investee to affect the return amount;major influence means that the investor has the right to participate in the decision making of the financial andbusiness policies of the investee, but cannot control or jointly control the formulation of these policies with otherparties.
22.4 Disposal of long-term equity investments
(1) Partial disposal of a long-term equity investment in a subsidiary without loss of controlIf part of the long-term equity investment in the subsidiary is disposed of without losing control, the differencebetween the disposal price and the book value corresponding to the disposal investment shall be recognized as thecurrent investment income.
(2) Loss of control over a subsidiary for partial disposal of an equity investment or other reasonsIf the Company loses control over the subsidiary due to the disposal of equity investment or other reasons, thebook value of the long-term equity investment corresponding to the sold equity shall be carried forward, and thedifference between the sale price and the book value of the disposal long-term equity investment shall berecognized as investment income (loss); meanwhile, the remaining equity shall be recognized as long-term equityinvestment or other relevant financial assets according to its book value. If the remaining equity after disposal isable to exert joint control or significant influence on the subsidiary, accounting treatment shall be conductedaccording to the relevant provisions of the conversion from cost method to equity method.
22.5 Methods of impairment assessment and determining the provision for impairment lossFor the long term investment in subsidiaries, joint venture and associates, if there is an objective evidence for theimpairment on the balance sheet date, the corresponding impairment provision is made based on the differencebetween the book value and the recoverable amount.
23. Investment properties
Measurement model of Investment propertiesMeasured by cost methodDepreciation or amortization method
23.1 The Company’s investment properties include the land use right that is leased out, the land use right held fortransfer upon capital appreciation, and the building that is leased out.
23.2 The Company initially measures the Investment properties at cost, uses the cost model for subsequentmeasurement, and adopts a depreciation or amortization policy for the investment property, which is consistentwith that for fixed assets or intangible assets. On the balance sheet date, if there are signs that the Investmentproperties is impaired, the corresponding impairment provision shall be made based on the difference between thebook value and the recoverable amount.
24. Fixed Assets
(1) Recognition criteria for fixed assets
24.1 Fixed assets are tangible assets that are held for use in the production or supply of goods or services, forrental to others, or for administrative purposes, and have useful lives of more than one accounting year. Fixedassets are initially measured at acquisition cost, and depreciated over its useful life using the straight-line methodsince the month subsequent to the one in which it is ready for intended use.
(2) Deprecation methods for fixed assets
Category | Deprecation methods | Depreciation period (years) | Residual value rate (%) | Annual depreciation rate (%) |
Buildings | Straight-line | 20-40 | 5% | 4.75%-2.38% |
Decoration of buildings | Straight-line | 10 | -- | 10.00% |
Transportation equipment | Straight-line | 4 | 5% | 23.75% |
Electronic equipment | Straight-line | 3-5 | 5% | 31.67%-19.00% |
Office equipment | Straight-line | 3-5 | 5% | 31.67%-19.00% |
(3) Basis of asserting, valuation method and depreciation ,method for fixed assets acquired under financing leasesFinancial leasing shall be deemed as if it meets one or more of the following criteria :(1) upon expiration of thelease term, the ownership of the leased asset shall be transferred to the lessee;(2) The lessee has an option topurchase the leased asset, and the purchase price is expected to be far lower than the fair value of the leased assetat the time of exercising the option, so it can be reasonably determined that the lessee will exercise such option atthe beginning of the lease;(3) Even if the ownership of the assets is not transferred, the lease term shall accountfor most of the useful life of the leased assets (usually more than 75% (including 75%) of the useful life of theleased assets);(4) The present value of the minimum lease payment of the lessee on the lease starting date isalmost equivalent to the fair value of the lease assets on the lease starting date [more than 90% (including90%)];The present value of the lessor's minimum lease receipt on the lease commencement day is almostequivalent to the fair value of the lease assets on the lease commencement day [more than 90% (including90%)];(5) The leased assets are of special nature, and only the lessee can use them without majortransformation.The fixed assets leased in financing shall be recorded at the lower of the fair value of the leasedassets and the present value of the minimum lease payment at the beginning of the lease, and the depreciationshall be calculated and withdrawn according to the depreciation policy of the fixed assets owned by the lessee.
25. Construction in progress
25.1 Construction in progress should be transferred into fixed assets at its actual costs after it has reached theworking condition for its intended use. Construction in progress that has reached the working condition but notcompleted, shall be transferred at its estimated costs. The estimated cost of construction in progress should be
adjusted against the actual costs after completion of settlement, while the depreciation already provided will notbe adjusted.
25.2 On the balance sheet date, if there is any indication that the construction in progress may be impaired, thecorresponding impairment provision shall be made based on the difference between the book value and therecoverable amount.
26. Borrowing cost
26.1 Recognition criteria of capitalization
Borrowing costs are capitalized when expenditures for such asset and borrowing costs are incurred and activitiesrelating to the acquisition, construction or production of the asset that are necessary to prepare the asset for itsintended use or sale have commenced. Other borrowing costs shall be recognized as expenses when incurred andshall be included in the current profit and loss.
26.2 Period of capitalization
(1) When borrowing costs meet the following conditions at the same time, capitalization starts 1) Assetexpenditure has occurred. 2) Borrowing costs have incurred 3)The purchase, construction or production activitiesnecessary to make the assets usable or saleable have started.
(2) Capitalization of borrowing costs is suspended during periods in which the acquisition, construction orproduction of a qualifying asset is suspended abnormally and when the suspension is for a continuous period ofmore than 3 months. Capitalization is suspended until the acquisition, construction or production of the asset isresumed.
(3) Capitalization of borrowing costs ceases when the qualifying asset being acquired, constructed or producedbecomes ready for its intended use or sale.
26.3 Capitalization amount of borrowing costs
Where funds are borrowed for the purpose of purchasing, constructing or producing assets that meet thecapitalization conditions, the amount of interest to be capitalized is the actual interest expenses incurred on thatborrowing for the period (including the amortization of discounts or premiums determined in accordance with theactual interest rate method), less any bank interest earned from depositing the borrowed funds before being usedon the asset or any investment income on the temporary investment. Where general borrowings are occupied forthe purchase, construction or production of assets that meet the capitalization conditions, the Company determinesthe amount of interest to be capitalized on such borrowings by applying a capitalization rate to the weightedaverage of the excess of cumulative expenditures on the asset over the amounts of specific-purpose borrowings.The capitalization rate is the weighted average of the interest rates applicable to the general borrowings.
27. Biological assets
None
28. Oil and gas assets
None
29. Right-of-use assets
None
30. Intangible assets
(1) Valuation method, service life and impairment test
30.1 Intangible assets, including land use rights etc. are recognized at costs.
30.2 Intangible assets with finite useful lives are amortized in accordance with the expected realization method ofthe economic benefits related to the intangible asset over its estimated useful life. If it is not possible to reliablydetermine the expected realization method, use the straight-line method. The specific years are as follows:
Item | Validity period (Year) |
Land use rights | 40 |
Software use rights | 5-10 |
Trademark rights | 10 |
30.3 On the balance sheet date, if there is any indication that the intangible assets with definite life has beenimpaired, the corresponding impairment provision shall be made based on the difference between the book valueand the recoverable amount. Intangible assets with uncertain service life and intangible assets that have not yetreached the usable state, whether or not there are signs of impairment, are tested for impairment every year.
(2) Accounting policies for internal research and development expenditure
Expenditure in the research phase of internal research and development projects is included in the current profitsand losses when they occur. Expenditure during the development phase that meets the following conditions atthe same time is recognized as intangible asset. (1) It is technically feasible to complete the intangible asset so thatit will be available for use or sale; (2) The Company has the intention to complete the intangible asset and use orsell it; (3) The Company can demonstrate the ways in which the intangible asset will generate economic benefits,including the evidence of the existence of a market for the output of the intangible asset or the intangible assetitself or, if it is to be used internally, the usefulness of the intangible asset; (4) The availability of adequatetechnical, financial and other resources to complete the development and the ability to use or sell the intangibleasset; and(5) The expenditure attributable to the intangible asset during its development phase can be reliablymeasured.
31. Impairment of long-term assets
The Company make judgement on whether there is any indication that the asset may be impaired at the balancesheet date.The goodwill and intangible assets with an uncertain useful life resulting from a business combination was tested
for impairment annually, regardless of whether there is any indication of impairment.The impairment should be recorded when the assets occur the following indications:
(1) The market price of assets fell sharply in the current period, and the decline was significantly higher than theexpected decline due to the passage of time or normal use; (2) Significant changes of the economic, technical orlegal environment in which the enterprise operates and the market in which the assets are located will occur in thecurrent period or in the near future, which will adversely affect the company; (3) The market interest rate or othermarket investment returns have increased during the current period, which affects the company’s discount rate forcalculating the present value of the expected future cash flow of assets, leading to the recoverable amount hasbeen greatly reduced; (4) There is evidence that the assets have become obsolete or their entities have beendamaged; (5) The assets have been or will be idle, terminated or planned to be disposed of in advance; (6)Theevidence reported by the enterprise indicates that economic performance of the assets has been or will be lowerthan expected, such as the net cash flow created by the assets or the realized operating profit (or loss) is far lower(or higher) than the expected amount; (7) Other indications that the asset may have signs of impairment.If there are any signs of asset impairment, the recoverable amount should be estimated.The recoverable amount should be determined based on the higher of the net amount of the fair value of the assetminus the disposal costs and the present value of the estimated future cash flows of the asset.Disposal costs include legal costs related to asset disposal, related taxes, transportation charges, and direct costsincurred to make the asset available for sale.The present value of the estimated future cash flows of the asset should be determined by discounting the amountof the asset based on the expected future cash flow generated during the continuous use of the asset and at thetime of final disposal. The present value of the expected future cash flow of the asset should take into accountfactors such as the estimated future cash flow of the asset, its useful life, and the discount rate.The measurement results of the recoverable amount indicate that if the recoverable amount of the asset is lowerthan its book value, the book value of the asset should be written down to the recoverable amount, and the reducedamount should be recognized as the asset impairment loss and included in the current profit and loss. Meanwhile,corresponding provisions for asset impairment should be made.
32. Long-term deferred expense
Long-term deferred expense are recorded according to the actual amount incurred and amortized in the period ofbenefit or within the prescribed period. If the long-term deferred expense item cannot benefit the subsequentaccounting period, the amortized value of the item that has not been amortized will be transferred into the currentprofit and loss.
33. Contract liabilities
Contract liabilities refer to the Company’s obligation to transfer goods to a customer from whom the Company
has received consideration or the amount is due from the customer. If the customer has paid the contractconsideration or the company has obtained the unconditional right to receive the payment before the Companytransfers the goods to the customer, the Company shall present the received or receivable as a contract liability atthe earlier time of the actual payment and due payment. The Company shall present the net amount of contractassets and contract liabilities under the same contract and contract assets and contract liabilities under differentcontracts are not offset.
34. Employee compensation
(1) Accounting treatment methods of short-term employee remuneration
Employee compensation is to point to the all forms of remuneration or compensation that the Company receiveservices rendered by employees or give except share-based payment in order to terminate the labor relationship.Employee compensation includes short-term compensation, severance welfare, dismissal benefits and otherlong-term employee benefits. The compensation that Company offers to the worker spouse, children, dependents,the deceased employee survivors and other beneficiaries, also belongs to employee compensation.During the accounting period when the employees provide services, the Company shall recognize the actualshort-term compensation as liabilities and record it into the current profit and loss or the cost of related assets.Among them, non-monetary welfare is measured according to fair value.
(2)Accounting treatment methods of post-employment benefits
The Company's employees participated in the social basic endowment insurance organized and implemented bythe local labor and social security departments.The company pays endowment insurance premium to orgnaizationof agency of local society primary endowment insurance according to the social primary endowment insurancepay base and scale with local regulation monthly. After the employee retires, the local labor and social securitydepartment has the responsibility to pay the social basic pension to the retired employee. The accounting periodduring which the company provides services to its employees, and the amount calculated in accordance with theabove social security provisions shall be recognized as a liability and recorded into the current profit and loss orthe cost of relevant assets.
(3) Accounting treatment methods of termination benefits
When the Company terminates the employment relationship with employees before the expiration of theemployment contracts or provides compensation as an offer to encourage employees to accept voluntaryredundancy, if the Company has a formal plan for termination of employment relationship or has made an offerfor voluntary redundancy which will be implemented immediately, and the Company cannot unilaterally withdrawfrom the termination plan or the redundancy offer, a provision for the compensation payable arising from thetermination of employment relationship with employees is recognized with a corresponding charge to the profit orloss for the period, and include in current profits or losses.
(4)Accounting treatment methods of other long-term employee benefits
None
35. Lease liabilities
None
36. Provisions
36.1 The Company shall recognize this obligation as contingent liability when the obligations arising from theprovision of external guarantees, litigation matters, product quality guarantees, loss contracts and othercontingencies become the current obligations assumed by the Company and the fulfillment of such obligations islikely to result in the outflow of economic benefits from the company and the amount of such obligations can bereliably measured.
36.2 The Company shall initially measure the provisions according to the best estimate of the expenses required toperform the relevant current obligations, and shall review the book value of the estimated liabilities on the balancesheet date.
37. Share-based payments
37.1 Categories of share-based payments
Share-based payments comprise equity-settled and cash-settled payments.
37.2 Determination of fair value of equity instruments
(1) If there is an active market, it should be determined based on the quoted price in the active market.
(2) If there is no active market, it is determined by using valuation techniques, including considering the pricesused in recent market transactions made by parties familiar with the situation and taking transactions voluntarily,and considering the current fair values and cash flows of other financial instruments that are substantially thesame discount method and option pricing model.
37.3 Basis for determining the best estimate of exercisable equity instruments
The Company would make best estimate in accordance with the newly acquired information such as changes inthe number of employees entitled to equity instruments.
37.4 Relevant accounting treatment of implementation, modification and termination of share-based payment plan
(1) Equity-settled share-based payments
Equity-settled share-based payments that are immediately available after the grant in exchange for employeeservices are included in related costs or expenses based on the fair value of the equity instruments on the grantdate, and the capital reserve is adjusted accordingly. Equity-settled share-based payments for services that havebeen completed during the waiting period or that are exercisable only if the required performance conditions aremet are exchanged for employee services. At each reporting date during the waiting period, the best estimate ofthe number of exercisable equity instruments is based on the fair value of the equity instrument grant date, the
services obtained in the current period are included in related costs or expenses, and the capital reserve is adjustedaccordingly.For equity-settled share-based payments in exchange for services provided by other parties, if the fair value ofservices provided by other parties can be reliably measured, they should be measured at the fair value of theservices of other parties on the acquisition date; if the fair values of services provided by other parties cannot bemeasured reliably, but for the equity instruments whose fair value can be reliably measured, they should bemeasured at the fair value of the equity instrument on the date of service acquisition and included in related costsor expenses, increasing owner’s equity accordingly.
(2) Cash-settled share-based payments
The cash-settled share-based payment in exchange for employee services immediately after the grant is includedin the related costs or expenses at the fair value of the liability assumed by the Company on the grant date, and theliability is increased accordingly. Cash-settled share-based payments for services that have been completed withinthe waiting period or that have met the required performance conditions in exchange for employee services arebased on the best estimate of the right to exercise at each balance sheet date during the waiting period, Accordingto the fair value of liabilities assumed by the company, the services obtained in the current period are included inrelated costs or expenses and corresponding liabilities.
(3) Modifying and terminating the share payment plan
If the amendment increases the fair value of the equity instruments granted, the Company will recognize theincrease in the acquisition of services in accordance with the increase in the fair value of the equity instruments; ifthe amendment increases the number of equity instruments granted, the company will increase the value of theequity instruments. The fair value is correspondingly recognized as an increase in access to services; if thecompany modifies the conditions of the exercisable rights in a manner that benefits employees, the companyconsiders the modified conditions of the exercisable rights when processing the conditions of the exercisablerights.If the amendment reduces the fair value of the equity instrument granted, the Company continues to recognize theamount of services obtained based on the fair value of the equity instrument on the grant date, without consideringthe decrease in the fair value of the equity instrument; if the amendment reduces the equity granted for the numberof instruments, the company will treat the reduction as the cancellation of the granted equity instruments; if theconditions of the exercisable rights are modified in a manner that is not conducive to employees, the revisedconditions of the exercisable rights are not considered when processing the conditions of the exercisable rights.If the Company cancels the granted equity instruments or clears the granted equity instruments during the waitingperiod (except for those that are canceled because the conditions of the exercisable rights are not met), thecancellation or settlement is treated as an expedited exercisable right and the original amount recognized duringthe remaining waiting period.
38. Other financial instruments such as preferred stocks and perpetual bonds
None
39. Revenue
Accounting policies applied in revenue recognition and measurement
39.1 Recognition of income
The Company has fulfilled its performance obligation in the contract, that is, to recognize revenue when thecustomer acquires control of the relevant goods. Access to control of related commodities refers to the ability todominate the use of the commodity and obtain almost all economic benefits from it.
39.2 According to the relevant provisions of the income standards, the Company judges that the nature of therelevant performance obligations belongs to “performance obligations performed within a certain period of time”or “performance obligations performed at a certain point of time”, and respectively recognizes the incomeaccording to the following principles.
(1) If the Company meets one of the following conditions, it belongs to the performance obligation within acertain period of time:
1) The customer obtains and consumes the economic benefits brought by the Company's performance when theCompany fulfills its performance.
2) The customer can control the assets under construction during the performance of the Company.
3) The assets produced by the Company during the performance have irreplaceable uses, and the Company has theright to collect payment for the cumulative performance that has been completed so far during the entire contractperiod.For performance obligations performed within a certain period of time, the Company shall recognize the incomeaccording to the performance schedule within that period, except where the performance schedule can not bereasonably determined. The Company considers the nature of the goods and adopt the output method or inputmethod to determine the appropriate progress of performance.
(2) For performance obligations that are not performed within a certain period of time, but are performanceobligations performed at a certain point of time, the Company recognizes revenue at the point when the customerobtains control of the relevant products.When judging whether the customer has obtained control of the product, the Company considers the followingsigns:
1) The Company has the current right to collect payment for the goods or services, that is, the customer has thecurrent payment obligation for the product;
2) The Company has transferred the legal ownership of the goods to the customer, that is, the customer has the
legal ownership of the goods;
3) The Company has transferred the goods in kind to the customer, that is, the customer has taken possession ofthe goods in kind;
4) The Company has transferred the legal ownership of the product or the main risks and rewards of ownership tothe customer, that is, the customer has obtained the main risks and rewards in the ownership of the goods;
5) The customer has accepted the commodity in control;
6) Other indications that customers have taken control of the goods.
Specific policies for revenue recognition:
The Company’s revenue mainly includes training revenue from the common courses training and the contractualcourses training. When a face-to-face training in the common courses is completed, all the training fees receivedin advance are recognized as revenue. Revenue from online training in common courses is recognized on astraight-line basis during the validity period of the service provided. Non-refundable portion of advance paymentsreceived for the contractual courses is recognized as revenue upon completion of training services. According tothe agreement on the contractual courses, the refund part of the advance received is recognized as revenue whenthe non-refundable conditions are met.
39.3 Measurement of revenue
The Company shall measure revenue at the transaction price allocated to each individual performance obligation.In determining the transaction price, the Company considers the influence of factors such as variableconsideration, major financing components in the contract, non-cash consideration, and consideration payable tocustomers.
(1) Variable consideration
The Company determines the best estimate of the variable consideration based on the expected value or the mostlikely amount, but the transaction price including the variable consideration should not exceed the accumulatedrecognized revenue when the relevant uncertainty is eliminated. When assessing whether the cumulativerecognized income is likely not to be significantly reversed, the enterprise shall also consider the possibility andproportion of the income reversal.
(2) Significant financing component
Where there is a significant financing component in the contract, the Company shall determine the transactionprice based on the amount payable in cash on the assumption that the customer acquires control of the goods. Thedifference between the transaction price and the contract consideration shall be amortized by the effective interestmethod during the contract period.
(3) Non-cash consideration
If the customer pays non-cash consideration, the company shall determine the transaction price based on the fair
value of the non-cash consideration. If the fair value of the non-cash consideration can not be reasonablyestimated, the Company shall indirectly determine the transaction price with reference to the separate selling priceof the goods it undertakes to transfer to the customer.
(4)Consideration payable to customer
For the consideration payable to the customer, the consideration payable shall be offset by the transaction price,and the current revenue shall be offset at the time when the relevant revenue is recognized and the payment (orpromised to pay) of the customer’s consideration is later. Except where the customer consideration is due to obtainother clearly distinguishable goods from the customer.If the enterprise pays the customer consideration to obtain other clearly distinguishable goods from the customer,it shall confirm the purchased goods in a manner consistent with other purchases by the enterprise. If theconsideration payable by the enterprise to the customer exceeds the fair value of the clearly distinguishablecommodity obtained from the customer, the excess amount shall be offset against the transaction price. If the fairvalue of the clearly distinguishable commodity obtained from the customer cannot be reasonably estimated, theenterprise shall offset the transaction price in full from the consideration payable to the customer.Differences in accounting policies for revenue recognition due to different business modelsNone
40. Government grants
40.1 Government grants include asset related government grants and income related government grants.
40.2 If a government grant is in the form of monetary asset, it is measured at the amount received or receivable. Ifa government grant is in the form of a non-monetary asset, it is measured at fair value. If the fair value cannot bereliably determined, it is measured at a nominal amount.
40.3 The government grant adopts the total method
(1) A government grant related to an asset is recognized as deferred income, and amortized to profit or loss on areasonable and systematic basis over the useful life of the related asset. If the relevant assets are sold, transferred,scrapped or damaged before the end of their useful lives, the undistributed balance of related deferred income willbe transferred to the profit or loss of the asset disposal in the current period.
(2) If a government grant related to income is used to compensate for the related expenses or losses in thesubsequent period, it shall be recognized as deferred income and shall be recorded in the current profit or loss inwhich the relevant expenses are recognized; For the compensation of related expenses or losses that have occurred,they shall be directly included in the current profits and losses.For government grants that include both the asset-related portion and the income-related portion, the differentparts are separately accounted for; if it is indistinguishable, the overall classification is revenue-relatedgovernment subsidies.
40.4 Government grants related to the company’s daily activities in accordance with the nature of the economicbusiness are included in other income or written down the related costs; government grants that are unrelated tothe daily activities of the company shall be included in non-operating income and expenditure.
41. The deferred income tax assets and the deferred income tax liabilities
41.1 According to the book value of the assets, liabilities and its tax base the difference between the (notconfirmed project as assets and liabilities of its tax base can be determined in accordance with the provisions ofthe tax law, the tax base and the difference between the book number), according to the forecast of the asset isrecovered or the applicable tax rate calculation during the debt confirmed Deferred tax assets and deferred taxliabilities.
41.2 Confirm the deferred income tax assets to probably get used to making the deductible temporary differencesare limited to the amount of taxable income. During the balance sheet date, there is strong evidence that the futureis likely to obtain sufficient taxable income to offset the deductible temporary difference, confirm the unconfirmeddeferred income tax assets in previous accounting periods.
41.3 On the balance sheet date, review the book value of the deferred income tax assets, and if during the periodof the future may not be able to obtain sufficient taxable income to offset the benefit of the deferred income taxassets, the write-downs on the book value of the deferred income tax assets. If it is likely to obtain sufficienttaxable income, return the amount of write-downs.
41.4 The Company’s current income tax and deferred income tax as recorded into the profits and losses of thecurrent income tax expenses, or earnings, but does not include the income tax in the following circumstances: (1)The business combination;(2) Direct confirmation of transactions or events in the owner’s equity.
42. Lease
42.1 Accounting treatment of operating leases
The Company as lessee under operating leases: operating lease payments are recognized on a straight-line basisover the term of the relevant lease, and are either included in the cost of related asset or charged to profit or lossfor the period. Initial direct costs incurred are charged to profit or loss for the period. Contingent rents are chargedto profit or loss in the period in which they are actually incurred.The Company as lessor under operating leases: rental income from operating leases is recognized in profit or losson a straight-line basis over the term of the relevant lease. Initial direct costs with more than an insignificantamount are capitalized when incurred, and are recognized in profit or loss on the same basis as rental income overthe lease term. Other initial direct costs with an insignificant amount are charged to profit or loss in the period inwhich they are incurred. Contingent rents are charged to profit or loss in the period in which they actually arise.
42.2 Accounting treatment of financial leases
The Company as lessee under finance leases: at the commencement of the lease term, the Company records the
leased asset at an amount equal to the lower of the fair value of the leased asset and the present value of theminimum lease payments at the inception of the lease, and recognizes a long-term payable at an amount equal tothe minimum lease payments. The difference between the recorded amounts is accounted for as unrecognizedfinance charge. Unrecognized finance charges are recognized as finance charge for the period using the effectiveinterest method over the lease term.The Company as lessor under finance leases: at the commencement of the lease term, the aggregate of theminimum lease receivable at the inception of the lease and the initial direct costs is recognized as a finance leasereceivable, and the unguaranteed residual value is recorded at the same time. The difference between theaggregate of the minimum lease receivable, the initial direct costs and the unguaranteed residual value, and theaggregate of their present values is recognized as unearned finance income. Unearned finance income isrecognized as finance income for the period using the effective interest method over the lease term.
43. Other significant accounting policies and accounting estimates
None
44.Changes in Important Accounting Policies and Accounting Estimates
(1) Changes in Important Accounting Policies
√ Applicable □ Not applicable
Content and reasons of changes in accounting policies | Approval procedures | Remarks |
According to the revised Accounting Standards for Business Enterprises No. 14 - Revenue (Accounting [2017] No. 22) (hereinafter referred to as the new revenue standard) issued by the Ministry of Finance on July 5, 2017, the Company will implement the new revenue standard from January 1, 2020. | Approved by the 10th Meeting of the 5th Board of Directors and the 9th Meeting of the 5th Board of Supervisors. | The Company adjusted the amount of relevant items in the opening financial statements, not adjusting the information in the comparable periods. |
(2) Changes in Important Accounting Estimates
□ Applicable √ Not applicable
(3) The new revenue standard and the new lease standard adjustment have been implemented for the firsttime since 2020. Here are the related items of financial statements at the beginning of the year.ApplicableWhether to adjust the balance sheet account at the beginning of the year
√ Yes □ No
Consolidated balance sheet
Unit:RMB
Item | Dec. 31st, 2019 | Jan. 1st, 2020 | Adjustment |
Current Assets: | |||
Cash and cash equivalents | 2,724,335,001.58 | 2,724,335,001.58 | |
Settlement reserve | |||
Due from banks and other financial institutions | |||
financial assets held for trading | 1,754,396,227.54 | 1,754,396,227.54 | |
Derivative financial assets | |||
Notes Receivable | |||
Accounts Receivable | 2,721,638.09 | 2,721,638.09 | |
Financing receivables | |||
Prepayments | 2,461,009.00 | 2,461,009.00 | |
Premium receivables | |||
Reinsurance accounts receivable | |||
Reinsurance contract reserve receivables | |||
Other receivables | 255,013,296.96 | 255,013,296.96 | |
Inc: Interest receivables | 567,341.68 | 567,341.68 | |
Dividends receivables | |||
Financial assets purchased under resale agreements | |||
Inventories | |||
Contract assets | |||
Assets held for sale | |||
Non-current assets due within one year | |||
Other current assets | 97,336,600.16 | 97,336,600.16 | |
Total current assets | 4,836,263,773.33 | 4,836,263,773.33 | |
Non-current assets: |
Loans and Advances | |||
Debt investments | 1,923,598,909.09 | 1,923,598,909.09 | |
Other debt investments | |||
Long-term receivables | |||
Long-term equity investment | |||
Other equity instruments | 162,800,000.00 | 162,800,000.00 | |
Other non-current financial assets | 138,166,559.96 | 138,166,559.96 | |
Investment properties | 688,475,053.53 | 688,475,053.53 | |
Fixed assets | 672,429,601.44 | 672,429,601.44 | |
Construction in progress | 653,580,160.32 | 653,580,160.32 | |
Bearer biological assets | |||
Oil and gas assets | |||
Right-of-use assets | |||
Intangible assets | 197,507,227.40 | 197,507,227.40 | |
Development expenditure | |||
Goodwill | 99,867,720.38 | 99,867,720.38 | |
Long-term deferred expense | 240,565,962.02 | 240,565,962.02 | |
Deferred tax assets | 21,482,832.13 | 21,482,832.13 | |
Other non-current assets | 325,967,628.34 | 325,967,628.34 | |
Total Non-current Assets | 5,124,441,654.61 | 5,124,441,654.61 | |
Total Assets | 9,960,705,427.94 | 9,960,705,427.94 | |
Current liabilities: | |||
Short-term borrowings | 2,867,000,000.00 | 2,867,000,000.00 | |
Borrowing from the Central Bank | |||
Borrowings from Banks and Other Financial Institutions | |||
Transactional Financial liabilities |
Derivative financial liabilities | |||
Notes payable | |||
Accounts payable | 236,481,990.86 | 236,481,990.86 | |
Receipts in advance | 2,634,276,203.88 | -2,634,276,203.88 | |
Contract liabilities | 2,557,549,712.50 | 2,557,549,712.50 | |
Financial assets sold for repurchase | |||
Receipt of deposits and deposits from other banks | |||
Receivings from Vicariously Traded Securities | |||
Receivings from Vicariously Sold Securities | |||
Employee benefits payable | 411,475,636.03 | 411,475,636.03 | |
Taxes payable | 184,306,027.84 | 184,306,027.84 | |
Other payable | 88,693,411.98 | 88,693,411.98 | |
Inc:Interest payables | 4,521,557.54 | 4,521,557.54 | |
Dividends payable | |||
Fees and commission payable | |||
Accounts payable reinsurance | |||
Held-for-sale liabilities | |||
Non-current Liabilities due within One Year | |||
Other current liabilities | 76,726,491.38 | 76,726,491.38 | |
Total Current Liabilities | 6,422,233,270.59 | 6,422,233,270.59 | |
Non-current Liabilities: | |||
Deposits for insurance contracts |
Long-term loans | |||
Bonds payable | |||
Inc: preferred shares | |||
Perpetual bond | |||
Lease liabilities | |||
Long-term payable | |||
Long-term payroll payable | |||
Provisions | |||
Deferred Income | |||
Deferred tax liabilities | 106,932,273.03 | 106,932,273.03 | |
Other non-current liabilities | |||
Total non-current liabilities | 106,932,273.03 | 106,932,273.03 | |
Total liabilities | 6,529,165,543.62 | 6,529,165,543.62 | |
Owners' equity: | |||
Deferred Income | 103,807,623.00 | 103,807,623.00 | |
Other equity instrument | |||
Inc: preferred shares | |||
Perpetual bond | |||
Capital surplus | 1,198,581,049.50 | 1,198,581,049.50 | |
Less: Treasury stock | |||
Other comprehensive income | 37,500,000.00 | 37,500,000.00 | |
Special reserve | |||
Surplus reserve | 45,000,000.00 | 45,000,000.00 | |
General risk reserve | |||
Retained earnings | 2,046,657,231.32 | 2,046,657,231.32 | |
Total owners' equity attributable to the parent company | 3,431,545,903.82 | 3,431,545,903.82 | |
Minority interests | -6,019.50 | -6,019.50 |
Total Owners' Equity | 3,431,539,884.32 | 3,431,539,884.32 | |
Total Liabilities and Owners' Equity | 9,960,705,427.94 | 9,960,705,427.94 |
Balance sheet of parent company
Unit: RMB
Item | Dec. 31st, 2019 | Jan. 1st, 2020 | Adjustment |
Current Assets: | |||
Cash and cash equivalents | 6,931,803.33 | 6,931,803.33 | |
Financial assets held for trading | 101,681.64 | 101,681.64 | |
Derivative financial assets | |||
Note receivables | |||
Accounts Receivable | |||
Financing receivables | |||
Prepayments | |||
Other receivables | 1,717,949,520.99 | 1,717,949,520.99 | |
Inc:Interest receivables | |||
Dividends receivables | 1,700,000,000.00 | 1,700,000,000.00 | |
Inventories | |||
Contract assets | |||
Assets held for sale | |||
Non current assets due within one year | |||
Other current assets | |||
Total current assets | 1,724,983,005.96 | 1,724,983,005.96 | |
Non-current assets: | |||
Debt investment | |||
Other debt investments | |||
Long-term receivables | |||
Long-term equity | 18,582,307,907.14 | 18,582,307,907.14 |
investment | |||
Other equity instruments | 162,800,000.00 | 162,800,000.00 | |
Other non-current financial assets | |||
Investment properties | 395,978,156.15 | 395,978,156.15 | |
Fixed assets | |||
Construction in progress | 72,569,103.57 | 72,569,103.57 | |
Bearer biological assets | |||
Oil and gas assets | |||
Right-of-use assets | |||
Intangible assets | |||
Development expenditure | |||
Goodwill | |||
Long-term deferred expense | |||
Deferred tax assets | 10,804,928.62 | 10,804,928.62 | |
Other non-current assets | |||
Total non-current assets | 19,224,460,095.48 | 19,224,460,095.48 | |
Total assets | 20,949,443,101.44 | 20,949,443,101.44 | |
Current liabilities: | |||
Short-term loans | |||
Financial liabilities held for trading | |||
Derivative financial liabilities | |||
Note payable | |||
Accounts payable | 561,752.26 | 561,752.26 | |
Receipts in advance | |||
Contract liabilities | |||
Employee benefits payable | |||
Taxes payable | 791,191.77 | 791,191.77 |
Other payable | 40,275,566.88 | 40,275,566.88 | |
Inc:Interest payable | |||
Dividends payable | |||
Held-for-sale liabilities | |||
Non-current liabilities due within one year | |||
Other current liabilities | |||
Total Current Liabilities | 41,628,510.91 | 41,628,510.91 | |
Non-current Liabilities: | |||
Long-term loans | |||
Bonds payable | |||
Inc: preferred shares | |||
Perpetual bond | |||
Lease liabilities | |||
Long-term payable | |||
Long-term payroll payable | |||
Provisions | |||
Deferred Income | |||
Deferred tax liabilities | 12,500,420.41 | 12,500,420.41 | |
Other non-current liabilities | |||
Total non-current Liabilities | 12,500,420.41 | 12,500,420.41 | |
Total liabilities | 54,128,931.32 | 54,128,931.32 | |
Owners' equity: | |||
Paid-in capital (share capital) | 6,167,399,389.00 | 6,167,399,389.00 | |
Other equity instrument | |||
Inc: preferred shares | |||
Perpetual bond | |||
Capital reserve | 12,775,326,370.33 | 12,775,326,370.33 |
Less: Treasury stock | |||
Other comprehensive income | 37,500,000.00 | 37,500,000.00 | |
Special reserve | |||
Surplus reserve | 387,458,806.65 | 387,458,806.65 | |
Retained earnings | 1,527,629,604.14 | 1,527,629,604.14 | |
Total owners' Equity | 20,895,314,170.12 | 20,895,314,170.12 | |
Total liabilities and owners' equity | 20,949,443,101.44 | 20,949,443,101.44 |
(4)Description of comparative data in the early stage of retroactive adjustment of the new revenuestandard and the new lease standard initially implemented since 2020
□ Applicable √ Not Applicable
45. Others
NoneSection VI. Taxes
1. Major categories of taxes and tax rates
Category of tax | Basis of tax | Tax rate |
Value-added tax | Taxable revenue for sales of goods and supply of services | 3%、5%、6% |
Consumption tax | ||
City maintenance and construction tax | Turnover taxes payable | 5%、7% |
Corporate income tax | Taxable income | 15%、20%、25% |
Education supplementary tax | Turnover taxes payable | 3% |
Local education supplementary tax | Turnover taxes payable | 1.5%、2% |
Disclosure statement on taxpayers with different corporate income tax rates
Names of taxpayers | Income tax rates |
1.The Company | 25% |
2.Offcn Ltd. | 15% |
3.Wuhu Yawei Automobile Sales Service Co., Ltd | 20% |
4. Ningguo Yaxia Motor Vehicle Driver Training School(Co., Ltd) | 20% |
5.Huangshan Yaxia Fudi Automobile Sales Services Co., Ltd. | 20% |
6.Chaohu Yaxia Kaixuan Automobile Sales Service Co., Ltd | 20% |
7.Bozhou Yaxia Motor Vehicle Driver Training School(Co., Ltd) | 20% |
8.Suzhou Bokai Automobile Sales Service Co., Ltd | 20% |
9.Zhejiang Offcn Co. Ltd | 25% |
10.Taizhou Offcn Enterprise Management Consulting Co., Ltd | 20% |
11.Beijing Offcn Xinzhiyu Online Technology Co., Ltd. | 20% |
12.Hulunbeier Hailar Offcn Co., Ltd | 20% |
13.Xilinhot Offcn Co., Ltd | 25% |
14.Yueqing Lecheng Offcn Co., Ltd | 20% |
15.Jiaozuo Offcn Co., Ltd | 20% |
16.Xinzheng Offcn Co., Ltd | 20% |
17.Chongqing Jiangbei Offcn Co., Ltd | 20% |
18.Nanjing Offcn Co., Ltd | 25% |
19.Beijing Xinde Zhiyuan Enterprise Management Consulting Co., Ltd | 20% |
20.Baiyin Offcn Co., Ltd | 20% |
21.Shandong Kunzhong Real Estate Co., Ltd | 25% |
22.Nanjing Huiyue Hotel Management Co., Ltd. | 25% |
23.Sanmenxia Offcn Co., Ltd. | 20% |
24.Liaoning Offcn Academic & Cultural Exchange Co., Ltd. | 25% |
25.Liaoning Offcn Co., Ltd. | 25% |
26.Tianjin Wuqing Offcn Co., Ltd. | 25% |
27.Shandong Offcn Co., Ltd. | 25% |
28.Jilin Changyi Offcn Co., Ltd. | 25% |
29.Yuxi Offcn Co., Ltd. | 25% |
30.Tonghua Offcn Co., Ltd. | 25% |
31.Hunan Qingyan Offcn Co., Ltd. | 25% |
32.Tianjin Hexi Offcn Co., Ltd. | 25% |
33.Chengdu Offcn Co., Ltd. | 25% |
34.Shandong Zuoda Business Management Co., Ltd. | 25% |
35.Liaoning Zhongcheng Real Estate Development Co.,Ltd. | 25% |
36.Shaanxi Offcn Co., Ltd. | 25% |
37.Beijing Offcn Co., Ltd. | 25% |
2. Preferential taxation
1.Value-added tax
(1) According to the Notice on Implementing the Inclusive Tax Reduction Policy for Small and MicroEnterprises (CS [2019] No. 13), in order to further support the development of small and micro enterprises, fromJanuary 1
st, 2019 to December 31
st
, 2021, small-scale value-added taxpayers with monthly sales of less than RMB100,000 (including the actual amount) are exempt from value-added tax. The company's branches and subsidiariesthat meet the exemption conditions are exempt from VAT.
(2) According to the Notice of the Ministry of Finance and the State Administration of Taxation on theRelevant Policies on Deduction of Value Added Tax for Special Equipment and Technical Maintenance Costs ofValue Added Tax Control System (CS [2012] No. 15), if the VAT taxpayers first purchase special equipment for theVAT tax control system (including separate ticket machines) after December 1
st, 2011 (including, the same below),the VAT invoice obtained from the purchase of special equipment for the VAT tax control system can be fullydeducted from the VAT payable (the deduction is the total amount of price and tax), and the deduction that isinsufficient can be carried forward to the next period to continue the deduction. The VAT taxpayer's technicalmaintenance fee paid after December 1
st, 2011 (excluding the technical maintenance fee paid before November
th, 2011) can be added to the value of the technical maintenance fee invoice issued by the technical maintenanceservice unit. The full amount of the tax payable is deductible, and those that are insufficient for deduction can becarried forward to the next period to continue the deduction. The company and the qualified branches andsubsidiaries should deduct the VAT payable amount in full according to the regulations.
(3) According to the Tax Policy Announcement on Prevention and Control of COVID-19 (JointAnnouncement from Ministry of Finance and State Taxation Administration 2020 No. 8), the income from theprovision of public transport services, living services, and delivery services of essential living materials forresidents are exempt from VAT. The specific scope of public transport services shall be implemented inaccordance with Provisions on the Pilot Project of Replacing Business Tax with Value Added Tax (CS [2016] No.
36). And the specific scope of life services and delivery services shall be implemented in accordance with theNotes on Sales Services, Intangible Assets and Real Estate (CS [2016] No. 36).
2. Education surtax, local education surtax
(1) According to the Notice of the Ministry of Finance and the State Taxation Administration on Expandingthe Exemption Scope of Government Funds (CS [2016] No. 12), from February 1
st, 2016, the exemption scope ofthe education surtax, local education surtax and water conservancy construction fund should be expanded from thecurrent taxpayers whose monthly sales or turnover is not more than RMB 30,000 (quarterly sales or turnover isnot more than RMB 90,000) to the taxpayers whose monthly sales or turnover is not more than RMB 100,000 (thequarterly sales or turnover is not more than RMB 300,000). Branches and subsidiaries of the company that meetthe conditions are exempted from education surtax and local education surtax.
(2)According to the Opinions of the General Office of the Provincial People's Government on ReducingEnterprise Costs and Stimulating Market Vigor, Hubei Political Affairs Office [2016] No. 27, from May 1
st, 2016,the local education surtax rate for the enterprises will be reduced from 2 % to 1.5%. The company's qualifiedsubsidiaries apply this policy to calculate and pay the local education surtax.
3. Corporate income tax
(1) On August 10
th
, 2017, Offcn Ltd. passed the high-tech enterprise certification organized by Beijing StateTaxation Bureau, Beijing Local Taxation Bureau, Beijing Finance Bureau, and Beijing Science and TechnologyCommission, and obtained the high-tech enterprise certificate numbered GR201711001302. The certificate isvalid from 10 August 2017 to 9 August 2020. The re-certification after expiration is in progress. During thereporting period, corporate income tax was calculated and paid at the rate of 15% for the Company and itssubsidiaries.
(2) According to the Notice on Implementing the Inclusive Tax Reduction Policy for Small and Micro Enterprises(CS [2019] No. 13), from January 1
st, 2019 to December 31
st
, 2021, the portion of the annual taxable income thatdoes not exceed RMB 1 million is deducted from the taxable income by 25% and the corporate income tax is paidat a rate of 20%; the part of annual taxable income exceeds RMB 1 million but does not exceed RMB 3 million,50% of the taxable income should be deducted, and corporate income tax should be paid at the rate of 20%.
3、Others
NoneVII、Notes To Consolidated Financial Statements
1. Cash and cash equivalents
Unit:RMB
Item | Closing balance | Opening balance |
Cash on hand | 17,333.64 | 40,288.16 |
Cash on bank | 4,474,380,595.23 | 2,657,929,052.80 |
Other cash and cash equivalents | 191,400,983.56 | 66,365,660.62 |
Total | 4,665,798,912.43 | 2,724,335,001.58 |
Inc:Total amount of cash deposited abroad | ||
Total amount of funds restricted by mortgage, pledge or freezing |
Other descriptionNote: 1. Other cash and cash equivalents mainly include the balances of third-party payment platforms such as POS,Alipay, and Tenpay.
2. At the end of the period, there are no mortgage, pledge, freezing and other restrictions on the use of funds.
3. There were no cash deposited abroad at the end of the period.
2. Transactional financial assets
Unit:RMB
Item | Closing balance | Opening balance |
Financial assets measured at fair value with changes included in current profit and loss | 2,156,713,143.65 | 1,754,396,227.54 |
Inc: | ||
Debt instrument investment | 2,156,713,143.65 | 1,754,396,227.54 |
Financial assets designated to be measured at fair value with changes included in current profits and losses | ||
Inc: | ||
Total | 2,156,713,143.65 | 1,754,396,227.54 |
3. Derivative financial assets
Unit:RMB
Item | Closing balance | Opening balance |
4. Notes receivable
(1) Classification of notes receivable
Unit:RMB
Item | Closing balance | Opening balance |
Unit:RMB
Category | Closing balance | Opening balance | ||||||||
Book balance | Bad debt provision | Book value | Book balancet | Bad debt r provision | Book value | |||||
Amount | Proportion | Amount | Proportion of provision | Amount | Proportion | Amount | Proportion of provision |
Provision for bad debts by per item:
Unit:RMB
Name | Closing balance | |||
Book balance | Bad debt provision | Proportion of provision | Reason for provision | |
Total | -- | -- |
Provision for bad debts by portfolio:
Unit:RMB
Name | Closing balance | ||
Book balance | Bad debt reserves | Accrual ratio |
If the bad debt provision of notes receivable is calculated according to the general model of expected credit loss,please disclose the relevant information of bad debt provision with reference to the disclosure method of otherreceivables:
□ Applicable √ Not Applicable
(2) Provision, recovery and reversal for bad debts in current period
Provision for bad debts in current period
Unit:RMB
Category | Opening balance | Amount of change in the current period | Closing balance | |||
Provision | Withdrawal or reversal | Writing off | Others |
Important provision, withdrawal or reversal for bad debts in current period:
□ Applicable √ Not Applicable
(3) Notes receivable pledged by the company at the end of the period
Unit:RMB
Item | Pledged amount at the end of the period |
(4) Notes receivable that have been endorsed or discounted by the company at the end of the period andhave not yet matured at the balance sheet date
Unit:RMB
Item | Amount of confirmation at the end of the period | Amount not confirmation at the end of the period |
(5) Notes transferred to accounts receivable by the company due to the drawer's failure to perform thecontract at the end of the period,
Unit:RMB
(6)Notes receivable actually written off in current period
Unit:RMB
Item | Amount of writing off |
Writing off important notes receivable:
Unit:RMB
Name of the Company | Nature of notes receivable | Amount of writing off | Reasons for writing off | Procedure of writing off | Whether the funds are generated by related party transactions |
5. Accounts receivable
(1)Classified disclosure of accounts receivable
Unit:RMB
Category | Closing balance | Opening balance | ||||||||
Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
Amount | Proportion | Amount | Proportion of provision | Amount | Proportion | Amount | Proportion of provision | |||
Accounts receivable with individual provision for bad debts | ||||||||||
Inc: | ||||||||||
Accounts receivable with provision for bad | 15,105,215.41 | 100.00% | 755,260.77 | 5.00% | 14,349,954.64 | 2,864,882.20 | 100.00% | 143,244.11 | 5.00% | 2,721,638.09 |
Item | Amount transferred to accounts receivable at the end of the period |
debts in combination | ||||||||||
Inc: | ||||||||||
Combination 1 | 1,250,000.00 | 8.28% | 62,500.00 | 5.00% | 1,187,500.00 | |||||
Combination 2 | 3,875,247.76 | 25.65% | 193,762.39 | 5.00% | 3,681,485.37 | 2,864,882.20 | 100.00% | 143,244.11 | 5.00% | 2,721,638.09 |
Combination 3 | 9,979,967.65 | 66.07% | 498,998.38 | 5.00% | 9,480,969.27 | |||||
Total | 15,105,215.41 | 100.00% | 755,260.77 | 14,349,954.64 | 2,864,882.20 | 143,244.11 | 2,721,638.09 |
Provision for bad debts according to individual items:
Unit:RMB
Name | Closing balance | |||
Book balance | Bad debt provision | Proportion of provision | Reasons for provision |
Provision for bad debts according to combination: 755260.77
Unit:RMB
Name | Closing balance | ||
Book balance | Bad debt provision | Proportion of provision | |
Combination 1 | 1,250,000.00 | 62,500.00 | 5.00% |
Combination 2 | 3,875,247.76 | 193,762.39 | 5.00% |
Combination 3 | 9,979,967.65 | 498,998.38 | 5.00% |
Total | 15,105,215.41 | 755,260.70 | -- |
Description of the basis for determining the combination:
Provision for bad debts according to combination:
Unit:RMB
Name | Closing balance | ||
Book balance | Bad debt provision | Proportion of provision |
Description of the basis for determining the combination:
If the provision for bad debts of accounts receivable is calculated according to the general model of expected
credit loss, please refer to the disclosure method of other receivables to disclose the relevant information of baddebt provision:
□ Applicable √ Not Applicable
Disclosure by account age
Unit:RMB
Ages | Closing balance |
Within 1 year (included) | 13,436,364.14 |
1 to 2 years | 1,668,851.27 |
2 to 3 years | |
More than 3 years | |
3 to 4 years | |
4 to 5 years | |
More than 5 years | |
Total | 15,105,215.41 |
(2)Provision, withdrawal and reversal for bad debts in current period
Provision for bad debts in the current period:
Unit:RMB
Category | Opening balance | Amount of change in the current period | Closing balance | |||
Provision | withdrawal or reversal | Write off | Others | |||
Provision for bad debts of accounts receivable | 143,244.11 | 612,016.66 | 755,260.77 | |||
Total | 143,244.11 | 612,016.66 | 755,260.77 |
Important provision, recovery and reversal for bad debts in current period:
Unit:RMB
Name of the Company | Amount recovered or reversed | Recovery method |
None
(3)Accounts receivable actually written off in the current period
Unit:RMB
Item | Write off amount |
Writing off important accounts receivable:
Unit:RMB
Name of the Company | Nature of accounts receivable | Amount of writing off | Reasons for write off | Procedures of writing off | Whether the funds are generated by related party transactions |
Account receivable write-off instructions:
None
(4)Accounts receivable of top five closing balance collected by debtors
Unit:RMB
Name of company | Closing balance of accounts receivable | Proportion in the total closing balance of accounts receivable | Closing balance of bad debt reserves |
Customer 1 | 2,214,317.00 | 14.80% | 110,715.85 |
Customer 2 | 1,250,000.00 | 8.35% | 62,500.00 |
Customer 3 | 387,600.00 | 2.59% | 19,380.00 |
Customer 4 | 352,478.00 | 2.36% | 17,623.90 |
Customer 5 | 312,800.00 | 2.09% | 15,640.00 |
Total | 4,517,195.00 | 30.19% |
(5)Accounts receivable terminated due to transfer of financial assets
None
(6)Amount of assets and liabilities formed by transferring accounts receivable and continuing involvementNone
6. Receivables financing
Unit:RMB
Item | Closing balance | Opening balance |
Changes in receivable financing and fair values in current period
□ Applicable √ Not applicable
If the provision for impairment of receivables financing is withdrawn according to the general model of expectedcredit loss, please refer to the disclosure method of other receivables to disclose the relevant information ofimpairment provision:
□ Applicable √ Not applicable
2、Prepayments
(1)Advances to suppliers
(1)Disclosure by account age
Unit:RMB
Account age | Closing balance | Opening balance | ||
Amount | Proportion | Amount | Proportion | |
Within 1 year | 5,069,205.17 | 100.00% | 2,461,009.00 | 100.00% |
1 to 2 years | ||||
2 to 3 years | ||||
More than 3years | ||||
Total | 5,069,205.17 | -- | 2,461,009.00 | -- |
Reasons for not timely settling the important prepayments with an account age of more than one year. :
(3)Prepayment of top five closing balance collected by prepayment objects
Name of company | Nature of Payment | Closing balance | Account age | Proportion in total amount of prepayment(%) | Provision for bad debts |
Nanjing Tuniu International Travel Agency Co., Ltd | Air ticket payment | 5,069,205.17 | Within 1 year | 100 |
Total | 5,069,205.17 | 100 |
7. Other receivables
Unit:RMB
Item | Closing balance | Opening balance |
Interest receivable | 568,426.66 | 567,341.68 |
Dividends receivable | ||
Other receivables | 532,977,723.01 | 254,445,955.28 |
Total | 533,546,149.67 | 255,013,296.96 |
(1) Interest receivable
1) Classification of interest receivable
Unit:RMB
Item | Closing balance | Opening balance |
Fixed deposit | 568,426.66 | 567,341.68 |
Entrusted loan | ||
Bond investment | ||
Total | 568,426.66 | 567,341.68 |
2) Important overdue interest
Unit: RMB
Borrower | Closing balance | Overdue time | Overdue reasons | Whether there is impairment and its judgment basis |
3)Provision for bad debts
□ Applicable √ Not applicable
(2) Dividends receivable
1) Classification of dividends receivable
Unit:RMB
Item (or Investee) | Closing balance | Opening balance |
2) Important dividends receivable with an account age of over 1 year
Unit:RMB
Item (or Investee) | Closing balance | Account age | Reasons for non recovery | Whether there is impairment and its judgment basis |
3)Provision for bad debts
□ Applicable √ Not applicable
(3) Other receivables
1)Classification of other receivables by nature
Unit:RMB
Nature of payment | Closing Book balance | Opening Book balance |
Deposits and guarantees | 530,565,592.57 | 252,096,657.97 |
Reserve fund | 430,185.61 | 214,164.38 |
deferred expense and others | 1,981,944.83 | 2,135,132.93 |
Total | 532,977,723.01 | 254,445,955.28 |
2)Provision for bad debts
Unit: RMB
Provision for bad debts | Stage 1 | Stage 2 | Stage 3 | Total |
Expected credit loss in the next 12 months | Expected credit loss in the whole duration (no credit impairment has occurred) | Expected credit loss in the whole duration (credit impairment has occurred) | ||
Balance at Jan. 1st, 2020 | 194,490.90 | 510,300.00 | 704,790.90 | |
Balance at Jan. 1st, 2020 in current period | —— | —— | —— | —— |
--Move on to stage 2 | ||||
--Move on to stage 3 | ||||
--Go back to stage 2 | ||||
--Go back to stage 1 | ||||
Provision in the current period | 158,745.13 | 158,745.13 | ||
Reversal in the current period | ||||
Resale in the current period | ||||
Write-off in the current period | ||||
Other changes | ||||
Balance at June 30th, | 353,236.03 | 510,300.00 | 863,536.03 |
Changes in Book balance of loss reserves with significant changes in current period
□ Applicable √ Not applicable
Disclosure by account age
Unit:RMB
2020Account age
Account age | Closing balance |
Within 1 year (included) | 495,336,363.28 |
1 to 2 years | 18,352,615.10 |
2 to 3 years | 2,673,850.61 |
More than 3 years | 16,614,894.02 |
3 to 4 years | 9,239,089.90 |
4 to 5 years | 521,629.04 |
More than 5 years | 6,854,175.08 |
Total | 532,977,723.01 |
3) Provision, withdrawal and reversal for bad debts in current period
Provision for bad debts in current period:
Unit:RMB
Category | Opening balance | Amount of change in the current period | Closing balance | |||
Provision | Withdrawal or reversal | Write-off | Others | |||
Provision for bad debts of other receivables | 704,790.90 | 158,745.13 | 863,536.03 | |||
Total | 704,790.90 | 158,745.13 | 863,536.03 |
The important amount of bad debt reserves transferred back or recovered in the current period:
Unit:RMB
Name of company | Amount of withdrawal or reversal | Recovery method |
4)Other receivables actually written off in the current period
Unit:RMB
Item | Write-off amount |
Write-off of other important receivables:
Unit:RMB
Name of company | Nature of other receivables | Write-off amount | Write-off reasons | Write off procedures | Whether the funds are generated by related party transactions |
Description of other receivables write-off:
None
5)Other receivables of top five closing balance collected by debtors
Unit:RMB
Name of company | Nature of payment | Closing balance | Account age | Proportion in total other closing balance receivables (%) | Closing balance of bad debt provision |
Liaoning Hanhui Industrial Co., Ltd | Deposits and guarantees | 200,000,000.00 | Within 1 year | 37.46% | |
Changsha Nanhu New City Construction and Development Co., Ltd | Deposits and guarantees | 200,000,000.00 | Within 1 year | 37.46% | |
Beijing Wushuang Technology Co., Ltd | Deposits and guarantees | 15,900,000.00 | 1 to 2 years | 2.98% | |
Rizhao Economic and Technological Development Zone Finance Bureau | Deposits and guarantees | 10,000,000.00 | Within 1 year | 1.87% | |
Shenyang Lijing Mingzhu Hotel Management Co., Ltd | Deposits and guarantees | 5,675,200.00 | 4 to 5 years | 1.06% | |
Total | -- | 431,575,200.00 | -- | 80.84% |
6) Receivables involving government subsidies
Unit:RMB
Name of company | Name of government subsidy project | Closing balance | Account age at the end of the period | Estimated time, amount and basis of collection |
7) Other receivables terminated due to transfer of financial assets
None8)Amount of assets and liabilities formed by transferring other receivables and continuing involvementNone
9. Inventories
Whether the Company needs to comply with the disclosure requirements of the real estate industry
(1) Inventory classification
Unit:RMB
Item | Closing balance | Opening balance | ||||
Book balance | Provision for inventory depreciation or contract performance cost impairment provision | Book value | Book balance | Provision for inventory depreciation or contract performance cost impairment provision | Book value |
(2) Reserves for inventory depreciation and impairment of contract performance costs
Unit:RMB
Item | Opening balance | Increase in current period | Decrease in current period | Closing balance | ||
Provision | Others | Reversal or write off | Others |
(3) Description of capitalization amount of borrowing costs included in closing balance of inventory
(4)Description of amortization amount of contract performance cost in current period
10. Contract assets
Unit:RMB
Item | Closing balance | Opening balance | ||||
Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value |
The amount and reasons for significant changes in the book value of contract assets in the current period:
Unit:RMB
Item | Change in the amount | Reasons for changes |
If the provision for bad debt of contract assets is withdrawn according to the general model of expected credit loss,please refer to the disclosure method of other receivables to disclose the relevant information of bad debt provision:
□ Applicable √ Not applicable
Provision for impairment of contract assets in the current period
Unit:RMB
Item | Provision in the current period | Reversal in current period | Write-off in current period | Reasons |
11、Assets held for sale
Unit:RMB
Item | Book balance at the end of the period | Provision for impairment | Book value at the end of the period | Fair value | Estimated disposal costs | Estimated disposal time |
12. Non-current assets due within one year
Unit:RMB
Item | Closing balance | Opening balance |
Debt investment due within one year | 1,838,527,164.24 | |
Other debt investment due within one year | ||
Total | 1,838,527,164.24 |
Important debt investment / Other debt investment
Unit:RMB
Credit item | Closing balance | Opening balance | ||||||
Par value | Coupon rate | Real interest rate | Due date | Par value | Nominal rate | Real interest rate | Due date | |
Beijing Sidaokou Branch of Huaxia Bank Co., Ltd. | 500,000,000.00 | 4.12% | 4.12% | April 4th, 2021 | ||||
Qianmen Branch of China Construction Bank Co., Ltd | 500,000,000.00 | 3.85% | 3.85% | April 13th , 2021 | ||||
Beijing Shangdi sub- branch of China Minsheng Bank Co., | 500,000,000.00 | 4.30% | 4.30% | June 6th , 2021 |
Ltd | ||||||||
Meihekou Rural Credit Cooperative Union Sales Department | 50,000,000.00 | 4.20% | 4.20% | May 15th, 2021 | ||||
Meihekou Rural Credit Cooperative Union Sales Department | 150,000,000.00 | 4.20% | 4.20% | Jan. 1st, 2021 | ||||
Total | 1,700,000,000.00 | —— | —— | —— | —— | —— | —— |
13. Other current assets
Unit:RMB
Item | Closing balance | Opening balance |
Contract acquisition cost | ||
Return cost receivable | ||
Deferred expenses | 218,760,179.46 | 97,166,903.13 |
Input tax to be deducted / certified | 960,351.61 | 169,697.03 |
Prepayment of corporate income tax | 22,414,605.05 | |
Total | 242,135,136.12 | 97,336,600.16 |
14. Debt investment
Unit:RMB
Item | Closing balance | Opening balance | ||||
Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
Fixed deposit | 122,023,500.00 | 122,023,500.00 | 1,923,598,909.09 | 1,923,598,909.09 | ||
Total | 122,023,500.00 | 122,023,500.00 | 1,923,598,909.09 | 1,923,598,909.09 |
Important debt investment
Unit:RMB
Credit item | Closing balance | Opening balance | ||||||
Par value | Coupon | Real | Due date | Par value | Coupon | Real | Due date |
rate | interest rate | rate | interest rate | |||||
Beijing Sidaokou Branch of Huaxia Bank Co., Ltd. | 500,000,000.00 | 4.12% | 4.12% | April 5th, 2021 | ||||
Qianmen Branch of China Construction Bank Co., Ltd | 500,000,000.00 | 3.85% | 3.85% | April 13th, 2021 | ||||
Beijing Shangdi Branch of China Minsheng Bank Co., Ltd | 500,000,000.00 | 4.30% | 4.30% | June 6th, 2021 | ||||
Meihekou Rural Credit Cooperative Union Sales Department | 50,000,000.00 | 4.20% | 4.20% | May 15th, 2021 | ||||
Meihekou Rural Credit Cooperative Union Sales Department | 150,000,000.00 | 4.20% | 4.20% | June 1st, 2021 | ||||
Meihekou Rural Credit Cooperative Union Sales Department | 100,000,000.00 | 4.20% | 4.20% | July 3rd, 2021 | 100,000,000.00 | 4.20% | 4.20% | July 3rd, 2021 |
Beijing Fangzhuang Branch of China Merchants Bank Co., Ltd. | 20,000,000.00 | 4.18% | 4.18% | Dec. 18th, 2021 | 20,000,000.00 | 4.18% | 4.18% | Dec. 18th, 2021 |
Total | 120,000,000.00 | —— | —— | —— | 1,820,000,000.00 | —— | —— | —— |
Provision for impairment
Unit:RMB
Provision for bad debts | Stage 1 | Stage 2 | Stage 3 | Total |
Changes in book balance of loss reserves with significant changes in current period
□ Applicable √ Not applicable
15. Other debt investments
Unit:RMB
Item | Opening balance | Accrued interest | Changes in fair value in the current period | Closing balance | Cost | Changes in accumulated fair value | Accumulated loss reserves recognized in other comprehensive income | Remarks |
Other important debt investment
Unit:RMB
Other credit items | Closing balance | Opening balance |
Provision for impairment
Unit:RMB
Provision for bad debts | Stage 1 | Stage 2 | Stage 3 | Total |
Changes in book balance of loss reserves with significant changes in current period
□ Applicable √ Not applicable
16. long-term receivables
(1) long-term receivables
Unit:RMB
Item | Closing balance | Opening balance | Discount rate range |
Impairment of bad debt reserves
Unit:RMB
Provision for bad debts | Stage 1 | Stage 2 | Stage 3 | Total |
Changes in book balance of loss reserves with significant changes in current period
□ Applicable √ Not applicable
(2) Long term receivables terminated due to transfer of financial assets
(3) Amount of assets and liabilities formed by transferring long-term receivables and continuinginvolvement
17. Long term equity investment
Unit:RMB
Investee | Opening balance (book value) | Increase and decrease in the current period | Closing balance (book value) | Closing balance of provision for impairment |
18. Investment in other equity instruments
Unit:RMB
Item | Closing balance | Opening balance |
Shanghai Zuihuibao Network Technology Co., Ltd | 136,000,000.00 | 136,000,000.00 |
Anhui Ningguo Rural Commercial Bank Co., Ltd | 26,800,000.00 | 26,800,000.00 |
Total | 162,800,000.00 | 162,800,000.00 |
Disclosure of non tradable equity instrument investment in the current period
Unit:RMB
Item | Recognized dividend income | Accumulated profit | Accumulated losses | Amount of other comprehensive income transferred to retained earnings | Reasons for fair value measurement and its change included in other comprehensive income | Reasons for transferring other comprehensive income into retained earnings |
Shanghai Zuihuibao Network Technology Co., Ltd | 50,000,000.00 | Plan for long term holding | ||||
Anhui Ningguo Rural Commercial Bank Co., Ltd | Plan for long term holding | |||||
Total | 50,000,000.00 |
19. Other non-current financial assets
Unit:RMB
Item | Closing balance | Opening balance |
Beijing Jinwu Venture Capital Center (limited partnership) | 38,050,000.00 | 38,050,000.00 |
Financial products | 100,116,559.96 | 100,116,559.96 |
Total | 138,166,559.96 | 138,166,559.96 |
20. Investment properties
(1) Investment properties adopting cost measurement mode
√ Applicable □ Not applicable
Unit:RMB
Item | Houses and buildings | Land-use rights | Construction in progress | Total |
I. Original book value | ||||
1. Opening balance | 377,111,222.22 | 473,825,849.87 | 850,937,072.09 | |
2.Increase in current period | 525,587.10 | 525,587.10 | ||
(1)Outsourcing | 525,587.10 | 525,587.10 | ||
(2)Inventory/ Fixed assets/ Transfer in from construction in progress | ||||
(3)Increase in business combination | ||||
3.Decrease in current period | ||||
(1)Disposal | ||||
(2)Other transfers | ||||
4.Closing balance | 377,636,809.32 | 473,825,849.87 | 851,462,659.19 | |
II. Accumulated depreciation and amortization | ||||
1. Opening balance | 41,891,136.83 | 60,373,277.81 | 102,264,414.64 | |
2. Increase in current period | 7,027,592.40 | 3,470,234.43 | 10,497,826.83 |
(1) Provision or amortization | 7,027,592.40 | 3,470,234.43 | 10,497,826.83 | |
3.Decrease in current period | ||||
(1)Disposal | ||||
(2)Other transfers | ||||
4. Closing balance | 48,918,729.23 | 63,843,512.24 | 112,762,241.47 | |
III. Provision for impairment | ||||
1. Opening balance | 6,556,268.55 | 53,641,335.37 | 60,197,603.92 | |
2. increase in current period | ||||
(1) Provision | ||||
3. Decrease in current period | ||||
(1)Disposal | ||||
(2)Other transfers | ||||
4. Closing balance | 6,556,268.55 | 53,641,335.37 | 60,197,603.92 | |
IV. Book value | ||||
1. Book value at the end of the period | 322,161,811.54 | 356,341,002.26 | 678,502,813.80 | |
2. Book value at the beginning of the period | 328,663,816.84 | 359,811,236.69 | 688,475,053.53 |
(2)Investment properties adopting fair value measurement mode
□ Applicable √ Not applicable
(3)Investment properties without property right certificate
Unit:RMB
Item | Book value | Reasons for not completing the certificate of title |
Houses and buildings | 240,448,764.80 | In process |
Land-use right | 5,382,308.97 | In process |
Other information
1. Investment properties includes the land-use right that has been leased, the land use-right held and prepared totransfer after appreciation,and the leased buildings.
2. Investment properties is initially measured at cost, followed by cost model, and depreciated or amortized in thesame way as fixed assets and intangible assets. On the balance sheet date, if there is any indication that theInvestment properties is impaired, the corresponding impairment provision shall be made according to thedifference between the book value and the recoverable amount.
21. Fixed Assets
Unit: RMB
Item | Closing balance | Opening balance |
Fixed assets | 870,207,450.02 | 672,429,601.44 |
Disposal of fixed assets | ||
Total | 870,207,450.02 | 672,429,601.44 |
(1) Fixed assets
Unit: RMB
Item | Buildings | Decoration of fixed assets | Transportation facility | Electronic equipment | Office equipment | Total |
I. Original book value | ||||||
1. Opening balance | 613,771,922.00 | 39,832,104.02 | 74,816,972.09 | 184,870,489.12 | 12,025,551.21 | 925,317,038.44 |
2. Increase in the current period | 183,015,413.44 | 24,876,320.00 | 760,833.62 | 19,090,135.48 | 16,116.00 | 227,758,818.54 |
(1) Purchase | 9,500.00 | 760,833.62 | 10,061,768.88 | 16,116.00 | 10,848,218.50 | |
(2)Transfer from construction in progress | 183,005,913.44 | 24,876,320.00 | 9,028,366.60 | 216,910,600.04 | ||
(3) Increase in business combination | ||||||
3. Decrease in the current period | 583,400.00 | 583,400.00 | ||||
(1) Disposal or obsolescence | 583,400.00 | 583,400.00 | ||||
4. Closing balance | 796,787,335.44 | 64,708,424.02 | 74,994,405.71 | 203,960,624.60 | 12,041,667.21 | 1,152,492,456.98 |
II. Accumulated depreciation | ||||||
1. Opening balance | 70,706,861.28 | 13,940,973.90 | 62,359,914.70 | 95,736,942.74 | 10,063,760.04 | 252,808,452.66 |
2. Increase in the current period | 10,191,475.22 | 3,942,651.62 | 2,640,564.87 | 12,932,209.64 | 244,898.61 | 29,951,799.96 |
(1) Accrual | 10,191,475.22 | 3,942,651.62 | 2,640,564.87 | 12,932,209.64 | 244,898.61 | 29,951,799.96 |
(2)Others | 0.00 | |||||
3. Decrease in the current period | 554,230.00 | 554,230.00 | ||||
(1) Disposal or obsolescence | 554,230.00 | 554,230.00 | ||||
4. Closing balance | 80,898,336.50 | 17,883,625.52 | 64,446,249.57 | 108,669,152.38 | 10,308,658.65 | 282,206,022.62 |
III. Impairment provision | ||||||
1. Opening balance | 4,309.80 | 74,674.54 | 78,984.34 | |||
2. Increase in the current period | ||||||
(1) Accrual | ||||||
3. Decrease in the current period | ||||||
(1) Disposal or obsolescence | ||||||
4. Closing balance | 4,309.80 | 74,674.54 | 78,984.34 | |||
IV. Book value | ||||||
1. Closing book value | 715,888,998.94 | 46,824,798.50 | 10,548,156.14 | 95,287,162.42 | 1,658,334.02 | 870,207,450.02 |
2. Opening book value | 543,065,060.72 | 25,891,130.12 | 12,457,057.39 | 89,129,236.58 | 1,887,116.63 | 672,429,601.44 |
(2) Temporarily idle fixed assets
Unit: RMB
Item | Original book value | Accumulated depreciation | Impairment provision | Book value | Note |
(3) Fixed assets rented through financing lease
Unit: RMB
Item | Original book value | Accumulated depreciation | Impairment provision | Book value |
(4) Fixed assets leased out through operating lease
Unit: RMB
Item | Closing book value |
(5)Fixed assets without property rights certificate
Unit: RMB
Item | Book value | Reasons for failing to complete the property rights certificate |
Buildings | 19,570,000.00 | In progress |
(6) Liquidation of fixed assets
Unit: RMB
Item | Closing Balance | Opening Balance |
22. Construction in progress
Unit: RMB
Item | Closing balance | Opening balance |
Construction in progress | 811,011,730.47 | 653,580,160.32 |
Engineering materials | ||
Total | 811,011,730.47 | 653,580,160.32 |
(1) Construction in progress
Unit: RMB
Item | Closing Balance | Opening Balance | ||||
Book balance | Impairment | Book value | Book balance | Impairment | Book value |
provision | provision | |||||
Liaoning Zhongcheng Land | 313,408,135.12 | 313,408,135.12 | 275,905,485.09 | 275,905,485.09 | ||
Offcn Shandong Building | 0.00 | 0.00 | 182,917,951.44 | 182,917,951.44 | ||
Offcn Fushun Building | 123,665,491.93 | 123,665,491.93 | 113,020,225.37 | 113,020,225.37 | ||
Yaxia Bozhou Fortune Plaza | 62,847,721.95 | 62,847,721.95 | 62,847,721.95 | 62,847,721.95 | ||
GAC-Toyota Bozhou 4S Stores | 9,721,381.62 | 9,721,381.62 | 9,721,381.62 | 9,721,381.62 | ||
Double-teacher type training system | 0.00 | 0.00 | 7,798,395.00 | 7,798,395.00 | ||
Yaxia Huangshan Fudi Stores | 1,368,999.85 | 1,368,999.85 | 1,368,999.85 | 1,368,999.85 | ||
Shaanxi Guancheng Building | 300,000,000.00 | 300,000,000.00 | 0.00 | 0.00 | ||
Total | 811,011,730.47 | 811,011,730.47 | 653,580,160.32 | 653,580,160.32 |
(2) Changes of significant projects in construction in the current period
Unit: RMB
Item | Budget | Opening balance | Increase in the period | Transferred fixed assets in the period | Other decrease in the period | Closing balance | Proportion of accumulative project investment in budget (%) | Project progress (%) | Accumulative amount of interest capitalization | Including: capitalization amount of current interest | Current interest capitalization rate (%) | Capital sources |
Liaoning Zhongcheng Land | 450,000,000.00 | 275,905,485.09 | 37,502,650.03 | 313,408,135.12 | 69.65% | 69.65% | Others | |||||
Offcn Shandong | 210,000,000.00 | 182,917,951.44 | 24,964,282.00 | 207,882,233.44 | 98.99% | 100.00% | Others |
Building | ||||||||||||
Offcn Fushun Building | 330,000,000.00 | 113,020,225.37 | 10,645,266.56 | 123,665,491.93 | 37.47% | 37.47% | Others | |||||
Shaanxi Guancheng Building | 400,000,000.00 | 300,000,000.00 | 300,000,000.00 | 75.00% | 75% | Others | ||||||
Total | 1,390,000,000.00 | 571,843,661.90 | 373,112,198.59 | 207,882,233.44 | 737,073,627.05 | -- | -- | -- |
(3) Accrual of impairment provision for construction in progress in the period
Unit: RMB
Item | Accrual amount | Reason |
(4) Engineering materials
Unit: RMB
Item | Closing balance | Opening balance | ||||
Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value |
23. Productive biological assets
(1) Productive biological assets measured at cost
□ Applicable √ Not applicable
(2) Productive biological assets measured by fair value
□ Applicable √ Not applicable
24. Oil and gas assets
□ Applicable √ Not applicable
25. Right-of-use assets
Unit: RMB
Item | Total | |
I. Original book value |
26. Intangible assets
(1) Intangible assets
Unit: RMB
Item | Land use right | Patent right | Non-patent technology | Software use right | Trademark right | Total |
I. Original book value | ||||||
1. Opening balance | 205,199,737.07 | 7,760,286.02 | 7,140,521.53 | 220,100,544.62 | ||
2. Increase in the period | 4,000.00 | 4,000.00 | ||||
(1)Purchase | 4,000.00 | 4,000.00 | ||||
(2) Internal R&D | ||||||
(3) Increase in business combination | ||||||
3. Decrease in the period | ||||||
(1)Disposal | ||||||
4. Closing balance | 205,199,737.07 | 7,764,286.02 | 7,140,521.53 | 220,104,544.62 | ||
II. Accumulated amortization | ||||||
1. Opening balance | 17,787,580.14 | 3,076,750.06 | 1,725,876.02 | 22,590,206.22 | ||
2. Increase in the period | 2,645,818.70 | 711,862.61 | 20,229.64 | 3,377,910.95 | ||
(1) Accrual | 2,645,818.70 | 711,862.61 | 20,229.64 | 3,377,910.95 | ||
3. Decrease in the period | ||||||
(1)Disposal | ||||||
4. Closing balance | 20,433,398.84 | 3,788,612.67 | 1,746,105.66 | 25,968,117.17 | ||
III. Impairment provision | ||||||
1. Opening balance | 3,111.00 | 3,111.00 | ||||
2. Increase in the period | ||||||
(1) Accrual | ||||||
3. Decrease in the period | ||||||
(1)Disposal | ||||||
4. Closing balance | 3,111.00 | 3,111.00 | ||||
IV. Book value |
1. Closing book value | 184,766,338.23 | 3,972,562.35 | 5,394,415.87 | 194,133,316.45 | ||
2. Opening book value | 187,412,156.93 | 4,680,424.96 | 5,414,645.51 | 197,507,227.40 |
No intangible assets formed through internal research and development at period-end.
(2) Land use rights without property rights certificate
Unit: RMB
Item | Book value | Reasons for failing to complete the property rights certificate |
27. Development expenditure
Unit: RMB
Item | Opening balance | Increase in the period | Decrease in the period | Closing balance | ||||
Internal development expenditure | Others | Recognized as intangible assets | Transferred to current profit and loss |
28. Goodwill
(1) Original book value of goodwill
Unit: RMB
Name of the investee and item forming goodwill | Opening balance | Increase in the current period | Decrease in the current period | Closing balance | ||
Formed by business combination | Disposal | |||||
Shandong Kunzhong Real Estate Co., Ltd. | 39,378,573.51 | 39,378,573.51 | ||||
Nanjing Huiyue Hotel Management Co., Ltd. | 60,489,146.87 | 60,489,146.87 | ||||
Total | 99,867,720.38 | 99,867,720.38 |
(2) Goodwill impairment provision
Unit: RMB
Name of the investee and item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance | ||
Accrual | Disposal |
Relevant information of asset group or combination of asset group where goodwill is locatedThe company acquired Shandong Kunzhong Real Estate Co., Ltd. in 2016 and generated goodwill of RMB39,378,573.51. The goodwill was divided into corresponding asset groups with a book value of RMB192,286,478.23. The recoverable amount of the asset group is determined based on the net amount of the fairvalue minus the disposal expenses.The company’s acquisition of Nanjing Huiyue Hotel Management Co., Ltd. in 2018 generated goodwill ofRMB 60,489,146.87, which was divided into corresponding asset groups with a book value of RMB195,383,990.96. The recoverable amount of the asset group is determined based on the net amount of the fairvalue minus the disposal expenses.Goodwill impairment testing process, key parameters (such as growth rate of the present value of projectedfuture cash flow in forecast period, growth rate in stable period, rate of profit, discount rate and the forecast period)and confirmation method of goodwill impairment loss:
Impairment test method and provision method for impairment of goodwill. are detailed in Note V (31)“Impairment of long-term assets”.The recoverable amount of the company’s asset group including goodwill is estimated based on the netamount of the fair value of the asset group in which the goodwill is located minus the disposal costs. As the mainassets have a fair value that can be referred in the market, the market comparison method is used to estimate thefair value of the base date of the assets to be estimated, taking into account differences in time, transaction,regional and individual factors. The company entrusted an asset assessment company to conduct an impairmenttest on goodwill. After testing, no goodwill was found to be impaired, and no provision for impairment was made.
29. Long-term deferred expense
Unit: RMB
forming goodwill
Item
Item | Opening balance | Increase in the period | Amortization in the period | Other decrease | Closing balance |
Decoration expenditure | 186,953,773.64 | 43,441,083.12 | 31,958,369.36 | 198,436,487.40 | |
Marketing fee | 4,877,521.71 | 230,400.00 | 228,282.94 | 4,879,638.77 | |
Rent and property fees | 47,239,952.20 | 564,942.00 | 19,661,006.38 | 28,143,887.82 | |
Other | 1,494,714.47 | 41,400.00 | 194,551.55 | 146,774.80 | 1,194,788.12 |
Total | 240,565,962.02 | 44,277,825.12 | 52,042,210.23 | 146,774.80 | 232,654,802.11 |
30. Deferred tax assets and deferred tax liabilities
(1) Deferred income tax assets without offsetting
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 | 1,678,746.50 | 358,161.32 | 930,130.35 | 177,903.51 |
Unrealized profit in internal transaction | ||||
Deductible losses | 43,219,714.47 | 10,804,928.62 | 43,219,714.47 | 10,804,928.62 |
Accrued and unpaid employee compensation | 70,000,000.00 | 10,500,000.00 | ||
Total | 44,898,460.97 | 11,163,089.94 | 114,149,844.82 | 21,482,832.13 |
(2) Deferred income tax liabilities without offsetting
Unit: RMB
Item | Closing balance | Opening balance | ||
Taxable temporary difference | Deferred tax liabilities | Taxable temporary difference | Deferred tax liabilities | |
Appraisal and Appreciation of Consolidated Assets of Non-identical Controlled Enterprises | 370,244,163.40 | 92,561,040.85 | 375,304,896.84 | 93,826,224.21 |
Changes in fair value of other debt investments | ||||
Changes in fair value of other equity instrument investments | 50,000,000.00 | 12,500,000.00 | 50,000,000.00 | 12,500,000.00 |
Changes in fair value of financial assets held for trading | 1,712,787.50 | 261,265.80 | 1,712,787.50 | 261,265.80 |
Fixed asset accounting depreciation is less than tax law | 2,276,794.67 | 341,519.20 | 2,298,553.47 | 344,783.02 |
Total | 424,233,745.57 | 105,663,825.85 | 429,316,237.81 | 106,932,273.03 |
(3) Deferred income tax assets or liabilities presented in net amount after offsetting
Unit: RMB
Item | Mutual offset amount at the end of the reporting period | Closing balance of deferred tax assets or liabilities after offset | Mutual offset amount at the end of the reporting period | Opening balance of deferred tax assets or liabilities after offset |
Deferred tax assets | 11,163,089.94 | 21,482,832.13 | ||
Deferred tax liabilities | 105,663,825.85 | 106,932,273.03 |
(4) Details of unrecognized deferred tax assets
Unit: RMB
Item | Closing balance | Opening balance |
Deductible temporary difference | ||
Deductible losses | 266,086,583.15 | 32,969,109.71 |
Total | 266,086,583.15 | 32,969,109.71 |
(5) Deductible losses of unrecognized deferred income tax assets will expire in the following years
Unit: RMB
Year | Closing balance | Opening balance | Note |
2020 | |||
2021 | 11,383,708.37 | 11,383,708.37 | |
2022 | 119,383.82 | 119,383.82 | |
2023 | 11,480,964.23 | 11,480,964.23 | |
2024 | 9,985,053.29 | 9,985,053.29 | |
2025 | 233,117,473.44 | ||
Total | 266,086,583.15 | 32,969,109.71 | -- |
31. Other non-current assets
Unit: RMB
Item | Closing balance | Opening balance | ||||
Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
Contract acquisition costs | ||||||
Contract performance costs | ||||||
Receivable return cost |
Contract assets | ||||||
Prepayment for land | 248,853,257.21 | 248,853,257.21 | 218,449,062.00 | 218,449,062.00 | ||
Prepayment for decoration | 221,573,491.15 | 221,573,491.15 | 93,560,250.00 | 93,560,250.00 | ||
Input tax to be deducted / to be certified | 15,778,818.02 | 15,778,818.02 | 13,658,316.34 | 13,658,316.34 | ||
Investment funds | 1,100,000.00 | 1,100,000.00 | 300,000.00 | 300,000.00 | ||
Total | 487,305,566.38 | 487,305,566.38 | 325,967,628.34 | 325,967,628.34 |
32. Short-term borrowings
(1) Classification
Unit: RMB
Item | Closing balance | Opening balance |
Pledge borrowings | 1,297,000,000.00 | 1,397,000,000.00 |
Mortgage loans | ||
Guarantee borrowings | 360,000,000.00 | |
Credit borrowings | 2,160,000,000.00 | 1,110,000,000.00 |
Total | 3,457,000,000.00 | 2,867,000,000.00 |
A description of the classification of short-term borrowings:
(2) Overdue short-term loans
The total amount of overdue short-term loans at the end of the period is RMB 0.00 , and the important overdueshort-term loans are as follows.
Borrower | Closing balance | borrowing rates | Overdue time | Overdue interest rates |
33. Tradable financial liability
Unit: RMB
Item | Closing balance | Opening balance |
34. Derivative financial liability
Unit: RMB
Item | Closing balance | Opening balance |
35. Notes payable
Unit: RMB
Category | Closing balance | Opening balance |
36. Accounts payable
(1) List of accounts payable
Unit: RMB
Item | Closing balance | Opening balance |
Direct cost for class operating | 3,051,459.23 | 188,285,128.46 |
Project payments | 7,350,754.19 | 13,062,592.12 |
Marketing fees | 2,694,697.25 | 26,766,715.00 |
Decoration costs | 11,221,697.78 | 7,863,306.78 |
Rent and property fees | 915,259.40 | 452,248.50 |
Fixed assets payment | 52,000.00 | 52,000.00 |
Total | 25,285,867.85 | 236,481,990.86 |
(2) Major accounts payable aged over one year
Unit: RMB
Item | Closing balance | Causes for outstanding or carry-over |
37. Receipts in advance
(1) List of receipts in advance
Unit: RMB
Item | Closing balance | Opening balance |
(2) Major receipts in advance aged over one year
Unit: RMB
Item | Closing balance | Causes for outstanding or carry-over |
38. Contract liabilities
Unit: RMB
Item | Closing balance | Opening balance |
Advanced receipts from training | 7,222,063,935.39 | 2,556,903,384.51 |
Others | 85,000.00 | 646,327.99 |
Total | 7,222,148,935.39 | 2,557,549,712.50 |
Amount and reasons for major changes in book value in the period
Unit: RMB
Item | Changes in amount | Reasons for changes |
39. Employee compensation payable
(1) List of employee compensation payable
Unit: RMB
Item | Opening balance | Increase in the period | Decrease in the period | Closing balance |
I. Short-term compensation | 404,338,198.91 | 2,258,690,849.50 | 2,247,247,771.07 | 415,781,277.34 |
II. Post-employment welfare-defined contribution plan | 7,137,437.12 | 50,510,393.07 | 50,823,363.04 | 6,824,467.15 |
III. Dismission welfare | ||||
IV. Other welfare due within one year | ||||
Total | 411,475,636.03 | 2,309,201,242.57 | 2,298,071,134.11 | 422,605,744.49 |
(2) List of short-term compensation
Unit: RMB
Item | Opening balance | Increase in the period | Decrease in the period | Closing balance |
1. Wages or salaries, bonuses, allowances and subsidies | 393,403,204.25 | 2,111,212,339.92 | 2,098,918,928.35 | 405,696,615.82 |
2. Staff welfare | 4,121,013.63 | 4,121,013.63 | ||
3. Social security contributions | 4,964,980.66 | 65,025,954.43 | 63,679,727.67 | 6,311,207.42 |
Inc: Medical insurance | 4,433,301.20 | 61,763,213.55 | 60,109,746.07 | 6,086,768.68 |
Employment injury insurance | 165,403.54 | 1,028,532.20 | 1,116,580.74 | 77,355.00 |
Maternity insurance | 366,275.92 | 2,234,208.68 | 2,453,400.86 | 147,083.74 |
4. Housing fund | 5,970,014.00 | 78,267,903.32 | 80,464,463.22 | 3,773,454.10 |
5. Labor union expenditure and employee education expenditure | 63,638.20 | 63,638.20 | ||
6. Short-term compensated absences | ||||
7. Short-term profit sharing plan | ||||
Total | 404,338,198.91 | 2,258,690,849.50 | 2,247,247,771.07 | 415,781,277.34 |
(3) List of post-employment welfare-defined contribution plan
Unit: RMB
Item | Opening balance | Increase in the period | Decrease in the period | Closing balance |
1. Basic endowment insurance | 6,806,195.23 | 49,287,227.90 | 49,502,307.42 | 6,591,115.71 |
2. Unemployment insurance | 331,241.89 | 1,223,165.17 | 1,321,055.62 | 233,351.44 |
3. Enterprise annuity payment | ||||
Total | 7,137,437.12 | 50,510,393.07 | 50,823,363.04 | 6,824,467.15 |
40. Taxes payable
Unit: RMB
Item | Closing balance | Opening balance |
Value-added tax | 5,706,855.30 | 48,652,668.81 |
Consumption tax | ||
Enterprise income tax | 87,468.97 | 116,032,612.72 |
Individual income tax | 142,759.48 | 5,527,794.99 |
City maintenance and construction tax | 372,940.14 | 3,413,989.84 |
Deed tax | 5,847,718.44 | 5,847,718.44 |
Property tax | 1,501,207.30 | 1,288,867.69 |
Education surcharge | 166,260.18 | 1,475,646.01 |
Land use tax | 811,945.26 | 943,956.91 |
Others | 155,255.48 | 1,122,772.43 |
Total | 14,792,410.55 | 184,306,027.84 |
41. Other payables
Unit: RMB
Item | Closing balance | Opening balance |
Interest payable | 13,367,960.06 | 4,521,557.54 |
Dividends payable | ||
Other payables | 41,215,300.82 | 84,171,854.44 |
Total | 54,583,260.88 | 88,693,411.98 |
(1) Interest payable
Unit: RMB
Item | Closing balance | Opening balance |
Interest on long-term loans with interest paid in installments and principal |
repayable at maturity | ||
Interest on corporate bonds | ||
Interest payable on short term loans | 13,367,960.06 | 4,521,557.54 |
Preferred stocks and perpetual bonds classified as financial liabilities | ||
Others | ||
Total | 13,367,960.06 | 4,521,557.54 |
Major overdue interest payable:
Unit: RMB
Borrower | Amount outstanding | Reason |
(2) Dividends payable
Unit: RMB
Item | Closing balance | Opening balance |
(3) Other accounts payable
1) List of other payables by nature
Unit: RMB
Item | Closing balance | Opening balance |
Current expense | 28,290,707.79 | 44,839,078.80 |
Equity transfer payable | 34,663,519.48 | |
Reimbursed expenses and others | 3,373,940.51 | 3,370,870.09 |
Social security and housing fund | 9,550,652.52 | 1,298,386.07 |
Total | 41,215,300.82 | 84,171,854.44 |
2)Major other payables aged over one year
Unit: RMB
Item | Closing balance | Causes for outstanding or carry-over |
42. Held-for-sale liabilities
Unit: RMB
Item | Closing balance | Opening balance |
43. Non-current Liabilities due within One Year
Unit: RMB
Item | Closing balance | Opening balance |
44. Other current liabilities
Unit: RMB
Item | Closing balance | Opening balance |
Short-term bonds payable | ||
Refund payable | ||
Value-added tax on receipts in advance | 216,664,468.06 | 76,726,491.38 |
Total | 216,664,468.06 | 76,726,491.38 |
Changes in short-term bonds payable
Unit: RMB
Name | Face value | Date of Issue | Bond period | Amount | Opening balance | Issuance in the period | Accrual of interest at face value | Premium and discount amortization | Repay in the period | Closing balance |
45. Long-term borrowings
(1) Category of long-term borrowings
Unit: RMB
Item | Closing balance | Opening balance |
46. Bonds payable
(1) Bonds payable
Unit: RMB
Item | Closing balance | Opening balance |
(2) Changes in bonds payable (Excluding other financial instruments such as preferred stocks and perpetual bondsclassified as financial liabilities)
Unit: RMB
Name | Face value | Date of Issue | Bond period | Amount | Opening balance | Issuance in the period | Accrual of interest at face value | Premium and discount amortization | Repay in the period | Closing balance |
(3) Description of conversion conditions and conversion time of convertible corporate bonds
(4) Description of other financial instruments classified as financial liabilities
Information of other financial instruments such as preferred stocks and perpetual bonds issued at the end of theperiodNone
Unit: RMB
Financial instruments issued | Opening | Increase in the period | Decrease in the period | Closing | ||||
Amount | Book value | Amount | Book value | Amount | Book value | Amount | Book value |
Explanation of the basis for classifying other financial instruments as financial liabilities
47. Lease liability
Unit: RMB
Item | Closing balance | Opening balance |
48. Long-term payable
(1) List of long-term payable by nature of payment
Unit: RMB
Item | Closing balance | Opening balance |
(2) Special payable
Unit: RMB
Item | Opening balance | Increase in the period | Decrease in the period | Closing balance | Reason |
49. Long-term employee benefits payable
(1) Long-term employee compensation payable
Unit: RMB
Item | Closing balance | Opening balance |
(2) Changes in defined benefit plans
Present value of defined benefit plan obligations:
Unit: RMB
Item | Amount in the current period | Amount in the prior period |
Plan assets:
Unit: RMB
Item | Amount in the current period | Amount in the prior period |
Defined benefit plan net debt (Net assets)
Unit: RMB
Item | Amount in the current period | Amount in the prior period |
50. Estimated liabilities
Unit: RMB
Item | Closing balance | Opening balance | Reason |
51. Deferred income
Unit: RMB
Item | Opening balance | Increase in the period | Decrease in the period | Closing balance | Reason |
Projects involving government subsidies
Unit: RMB
Item | Opening balance | Increased subsidies | Amount included in non-operating income | Amount included in other income | Amount of cost reduction | Other changes | Closing balance | Related to assets / income |
52. Other non-current liabilities
Unit: RMB
Item | Closing balance | Opening balance |
53. Share capital
Unit: RMB
Opening balance | Changes in the current period (+/-) | Closing balance | |||||
New shares issued | Bonus shares | Shares transferred from capital reserve | Others | Subtotal | |||
Total number of shares | 103,807,623.00 | 103,807,623.00 |
54. Other equity instruments
(1)Information of other financial instruments such as preferred stocks and perpetual bonds issued at the end of theperiod
None
(2) Changes for other financial instruments such as preferred stocks and perpetual bonds issued at the end of theperiod
Unit: RMB
Financial instruments issued | Opening | Increase in the period | Decrease in the period | Closing | ||||
Amount | Book value | Amount | Book value | Amount | Book value | Amount | Book value |
Changes of other equity instruments in the current period, explanations of the reasons for the changes, and thebasis for related accounting treatments:
None
55. Capital reserve
Unit: RMB
Item | Opening balance | Increase in the period | Decrease in the period | Closing balance |
Equity premium | 956,481,049.50 | 956,481,049.50 | ||
Other Capital reserve | 242,100,000.00 | 26,900,000.00 | 269,000,000.00 | |
Total | 1,198,581,049.50 | 26,900,000.00 | 1,225,481,049.50 |
Other explanations, including changes in the period and reasons for the changes:
None
56. Treasury stock
Unit: RMB
Item | Opening balance | Increase in the period | Decrease in the period | Closing balance |
Other explanations, including changes in the period and reasons for the changes:
None
57. Other comprehensive income
Unit: RMB
Item | Opening balance | Closing balance | ||||||
Amount before current income tax | Less: Earned to other comprehensive income in | Less: Earned to other comprehe | Less: income tax expenses | Attributable to the parent company, | Attributable to minority shareholde |
for the current period | the previous period and transferred to profit and loss in the current period | nsive income in the previous period and transferred to retained earnings in the current period | after tax | rs after tax | ||||
1. Other comprehensive income not reclassified into gains or losses | 37,500,000.00 | 37,500,000.00 | ||||||
Inc: changes arising from remeasured and redefined benefit plan | ||||||||
Other comprehensive income not reclassified into gains or losses by the equity method | ||||||||
Changes in the fair value of other equity instrument investments | 37,500,000.00 | 37,500,000.00 | ||||||
Changes in the fair value of the enterprise’s own credit risk | ||||||||
2. Other comprehensive income reclassified into gains or losses | ||||||||
Inc: other comprehensive income reclassified into gains or losses by the equity method | ||||||||
Changes in the fair value of other debt investments | ||||||||
Amount of financial assets reclassified into other comprehensive income | ||||||||
Credit impairment provision for |
other debt investment | ||||||||
Cash flow hedging reserve | ||||||||
Differences arising from conversion of financial statements denominated in foreign currencies | ||||||||
Total other comprehensive income | 37,500,000.00 | 37,500,000.00 |
Other descriptions: including the adjustment of the effective part of the cash flow hedge gains and lossesconverted into the initially confirmed amount of the hedged item:
None
58. Special reserve
Unit: RMB
Item | Opening balance | Increase | Decrease | Closing balance |
Other explanations, including changes in the current period and the corresponding reasons:
None
59. Surplus reserve
Unit: RMB
Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
Statutory surplus reserve | 45,000,000.00 | 45,000,000.00 | ||
Discretionary surplus reserve | ||||
Reserve funds | ||||
Corporate development funds | ||||
Others | ||||
Total | 45,000,000.00 | 45,000,000.00 |
Descriptions for surplus reserve, including the changes and the reasons in the current period:
None.
60. Retained earnings
Unit: RMB
Item | Amount for the current period | Amount for the prior period |
Retained earnings at the end of the previous period before adjustment | 2,046,657,231.32 | 1,660,363,232.50 |
Adjusting retained earnings at the beginning of the period(Increase +, decrease-) | 0.00 | 247,170.28 |
Retained earnings at the beginning of the year after adjustment | 2,046,657,231.32 | 1,660,610,402.78 |
Add: net profit attributable to owners of the Parent Company for the current period | -233,026,645.16 | 1,804,548,688.01 |
Less: Withdrawal of statutory surplus reserve | ||
Withdrawal of discretionary surplus reserves | ||
Withdrawal of general risk provisions | ||
Dividend payable for ordinary shares | 1,480,175,853.36 | 1,418,501,859.47 |
Ordinary shares dividends converted into equity | ||
Retained earnings at the end of the year | 333,454,732.80 | 2,046,657,231.32 |
Details for the adjustment of the retained earnings at the beginning of the period:
(1) The retained earnings at the beginning of the period impacted by the retroactive adjustment of the ASBE(Accounting Standards for Business Enterprises) and its new regulations:RMB0.00 .
(2) The retained earnings at the beginning of the period impacted by the changes in accounting policies:
RMB0.00 .
(3) The retained earnings at the beginning of the period impacted by the major accounting error correction:
RMB0.00 .
(4) The retained earnings at the beginning of the period impacted by the change of combination scope undercommon control:RMB0.00 .
(5) The retained earnings at the beginning of the period impacted by other adjustments:RMB0.00 .
61. Revenue and cost of revenue
Unit: RMB
Item | Amount for the current period | Amount for the prior period | ||
Revenue | Cost of revenue | Revenue | Cost of revenue | |
Main business | 2,788,186,999.66 | 1,428,476,161.97 | 3,612,344,963.59 | 1,520,066,781.23 |
Other business | 19,793,480.94 | 24,135,018.42 | 25,074,551.89 | 25,221,678.33 |
Total | 2,807,980,480.60 | 1,452,611,180.39 | 3,637,419,515.48 | 1,545,288,459.56 |
Information about income:
Unit: RMB
Types of Contracts | Section 1 | Section 2 | Total |
Information about the fulfillment of obligations:
None.Information about transaction price amortized in the rest of the obligation to be fulfilled:
The income from the unfulfilled or uncompleted obligation with signed contracts at the end of the reporting period:
RMB 0.00 .
62. Taxes and surcharges
Unit: RMB
Item | Amount for the current period | Amount for the prior period |
Consumption tax | ||
City maintenance and construction tax | 44,663.79 | 7,496,891.44 |
Education surcharge | 36,306.17 | 5,329,806.04 |
Resource tax | ||
Property tax | 3,902,053.06 | 2,572,709.99 |
Land use tax | 1,693,313.52 | 1,836,056.86 |
Vehicle usage tax | 99,003.90 | 86,176.00 |
Stamp tax | 419,401.69 | 14,387,736.68 |
Others | 82,890.91 | 123,870.20 |
Total | 6,277,633.04 | 31,833,247.21 |
63. Selling expenses
Unit: RMB
Item | Amount for the current period | Amount for the prior period |
Employee’s benefits | 514,355,130.96 | 472,555,044.16 |
Marketing fee | 78,835,398.47 | 111,427,661.44 |
Rent property, depreciation and amortization expenses | 62,420,815.84 | 55,231,065.92 |
Travel expenses | 29,851,665.86 | 28,472,843.96 |
Others | 15,354,442.79 | 7,626,483.81 |
Total | 700,817,453.92 | 675,313,099.29 |
65. General and administrative expenses
Unit: RMB
Item | Amount for the current period | Amount for the prior period |
Employee’s benefits | 348,545,272.28 | 341,186,214.75 |
Rent property, depreciation and amortization expenses | 58,897,950.26 | 53,945,881.47 |
Office expenses | 46,201,346.59 | 36,665,219.36 |
Share payments | 26,900,000.00 | 26,900,000.00 |
Travel expenses | 19,852,720.39 | 19,262,027.61 |
Welfare fee | 2,910,382.85 | 2,270,527.72 |
Others | 15,651,781.77 | 19,401,175.00 |
Total | 518,959,454.14 | 499,631,045.91 |
65. Research and development expenses
Unit: RMB
Item | Amount for the current period | Amount for the prior period |
Employee’s benefits | 364,891,204.61 | 291,213,235.99 |
Travel expenses | 7,810,939.90 | 7,371,388.67 |
Others | 10,525,386.50 | 5,445,532.85 |
Total | 383,227,531.01 | 304,030,157.51 |
66. Financial expenses
Unit: RMB
Item | Amount for the current period | Amount for the prior period |
Interest expenses | 85,130,012.11 | 46,924,890.43 |
Less: Interest income | 2,889,907.48 | 37,722,676.13 |
Service Charges | 100,414,519.03 | 33,307,274.34 |
Total | 182,654,623.66 | 42,509,488.64 |
67. Other income
Unit: RMB
Sources of other income | Amount for the current period | Amount for the prior period |
Tax reduction and exemption | 79,195,831.18 | |
Subsidies for job security | 4,606,016.51 | 45,257.94 |
Rent subsidy | 49,680.00 | |
Government rent subsidy | 109,500.00 | 178,650.00 |
Tax handling fee refund | 483,555.74 | 6,768.48 |
Small financial support income from the government | 10,124.01 | |
Total | 84,454,707.44 | 230,676.42 |
68. Investment income
Unit: RMB
Item | Amount for the current period | Amount for the prior period |
Long-term equity investment income by equity method | ||
Investment income from disposal of long-term equity investments | ||
Investment income of held-for-trading financial assets during the holding period | ||
Investment income from disposal of held-for-trading financial assets | ||
Dividend income from other equity instruments investment during the holding period | ||
Income from the remeasurement of remaining equity at fair value after the loss of control | ||
Interest income obtained from debt investment during the holding period | 37,890,649.58 | |
Interest income obtained from other debt investment during the holding period | ||
Investment income from disposal of other debt investments | ||
Investment income from financial product | 90,927,476.86 | 53,971,926.62 |
Total | 128,818,126.44 | 53,971,926.62 |
69. Net exposure hedging income
Unit: RMB
Item | Amount for the current period | Amount for the prior period |
70. Gains from changes in fair values
Unit: RMB
Sources of gains from changes in fair values | Amount for the current period | Amount for the prior period |
71. Impairment losses of credit
Unit: RMB
Item | Amount for the current period | Amount for the prior period |
Loss on bad debts of other receivables | ||
Impairment loss of debt investment | ||
Impairment loss of other debt investment | ||
Loss on bad debts of long-term receivables | ||
Impairment loss of contract assets | ||
Loss on bad debts of receivables | -770,761.79 | |
Total | -770,761.79 |
72. Impairment losses of assets
Unit: RMB
Item | Amount for the current period | Amount for the prior period |
73. Income from assets disposal
Unit: RMB
Sources of income from assets disposal | Amount for the current period | Amount for the prior period |
Fixed assets | 162,043.59 | 198,807.74 |
Total | 162,043.59 | 198,807.74 |
74. Non-operating income
Unit: RMB
Item | Amount for the current period | Amount for the prior period | Amount included in current non-recurring gains and losses |
Gains from debt restructuring | |||
Gains from non-monetary assets exchange | |||
Accepting donations | |||
Governmental subsidy | 19,800.00 |
Others | 348.00 | 1,565,171.86 | |
Total | 20,148.00 | 1,565,171.86 |
Government subsidy reckoned into current gains and losses:
Unit: RMB
Item | Entity | Purpose | Type | Whether the subsidy impacts the gain/loss of the year | Whether it is special subsidy | Amount for the current period | Amount for the prior period | Related to assets/ income |
Special Subsidy for infrared thermometers for pandemic Prevention from Haidian Development and Reform Commission | Development and Reform Commission of Haidian District, Beijing | Subsidy | No | 19,800.00 | Related to income |
75. Non-operating expenses
Unit: RMB
Item | Amount for the current period | Amount for the prior period | Amount included in the current non-recurring profit (gains)/losses |
Loss on debt restructuring | |||
Loss on non-monetary assets exchange | |||
Outward donation | 90,002.28 | 70,002.54 | 90,002.28 |
Forfeiture and overdue fine | 3,500.00 | 12,000.00 | 3,500.00 |
Others | 993.99 | ||
Total | 93,502.28 | 82,996.53 | 93,502.28 |
76. Income tax expenses
(1) Statement of income tax expenses
Unit: RMB
Item | Amount for the current period | Amount for the prior period |
Current income tax expense | 4,399.43 | 100,561,730.62 |
Deferred income tax expense | 9,051,295.01 | 1,110,407.70 |
Total | 9,055,694.44 | 101,672,138.32 |
(2) Adjustment process of accounting profit and income tax expense
Unit: RMB
Item | Amount for the current period |
Total profit | -223,976,634.16 |
Income tax expenses calculated at statutory/applicable tax rate(s) | -33,596,495.12 |
Impact from different tax rates applicable to subsidiaries | -1,751,276.86 |
Impact from adjustment of previous periods income tax | |
Impact from non-taxable income | |
Impact from non-deductible cost, expense and loss | 8,479,779.66 |
Impact from using deductible losses of previously unrecognized deferred income tax assets | |
Impact from deductible temporary differences or deductible losses of deferred income tax assets unrecognized in the current period | 35,923,686.76 |
Income tax expenses | 9,055,694.44 |
77. Other comprehensive income
For details, please refer to Note VII(57) Other comprehensive income of this report.
78. Cash Flow Statement Items
(1) Other cash received related to operating activities
Unit: RMB
Item | Amount for the current period | Amount for the prior period |
Deposits and guarantees | 5,802,263.50 | 676,098.21 |
Government subsidy and other non-operating income | 5,403,032.41 | 211,845.73 |
interest income | 2,889,907.48 | |
Reserve funds | 43,861.00 | |
Total | 14,139,064.39 | 887,943.94 |
Explanation for other cash received related to operating activities:
(2) Other Cash paid related to operating activities
Unit: RMB
Item | Amount for the current period | Amount for the prior period |
Daily expenses | 468,436,624.08 | 381,436,926.74 |
Service charges | 77,914,519.03 | 33,307,274.34 |
Deposits and guarantees | 74,271,198.10 | 9,456,208.83 |
Non-operating expenses | 93,502.28 | 82,136.54 |
Reserve funds | 259,882.23 | 22,625.81 |
Total | 620,975,725.72 | 424,305,172.26 |
Explanation for other cash paid related to operating activities:
(3) Other cash received related to investment activities
Unit: RMB
Item | Amount for the current period | Amount for the prior period |
Explanation for other cash received related to investment activities:
(4) Other cash paid related to investment activities
Unit: RMB
Item | Amount for the current period | Amount for the prior period |
Explanation for other cash paid related to investment activities:
(5) Other cash received related to fundraising
Unit: RMB
Item | Amount for the current period | Amount for the prior period |
Explanation for other cash received related to fundraising:
(6) Other cash paid related to fundraising
Unit: RMB
Item | Amount for the current period | Amount for the prior period |
Service charges | 333,478.85 | 320,723.05 |
Total | 333,478.85 | 320,723.05 |
Explanation for other cash paid related to fundraising:
79. Supplementary information on cash flow statement
(1) Supplementary information on the cash flow statement
Unit: RMB
Supplementary information | Amount for the current period | Amount for the prior period |
1. Net profit adjusted to cash flow of operating activities: | -- | -- |
Net profit | -233,032,328.60 | 493,025,465.15 |
Add: Provision for impairment of assets | 770,761.79 | |
Depreciation of fixed assets and productive biological assets, and depletion of oil and gas assets | 40,449,626.79 | 39,566,591.56 |
Depreciation of right-of-use assets | ||
Amortization of intangible assets | 3,377,910.95 | 3,467,967.09 |
Amortization of long-term deferred expense | 31,958,369.36 | 41,828,031.38 |
Losses (gains are indicated by “-”) on disposal of fixed assets, intangible assets and other long-term assets | -162,043.59 | -198,807.74 |
Losses (gains are indicated by “-”) on write-off of fixed assets | ||
Losses (gains are indicated by “-”) on changes in fair values | ||
Financial expenses (income is indicated by “-”) | 85,130,012.11 | 9,878,312.52 |
Losses (gains are indicated by “-”) from investments | -128,818,126.44 | -53,971,926.62 |
Decrease /(increase is indicated by “-”) in deferred income tax assets | 10,319,742.19 | 2,422,751.53 |
Increase (decrease is indicated by “-”) in deferred income tax liabilities | -1,268,447.18 | -1,312,343.83 |
Decrease (increase is indicated by “-”) in inventories | 20,062.46 | |
Decrease (increase is indicated by “-”) in operating receivables | -198,166,879.62 | -30,250,871.91 |
Increase (decrease is indicated by “-”) in operating payables | 4,426,216,906.43 | 3,823,391,566.94 |
Others | 26,900,000.00 | 26,900,000.00 |
Net cash flow from operating activities | 4,063,675,504.19 | 4,354,766,798.53 |
2. Significant investment and financing activities involving cash flow: | -- | -- |
Conversion of debt into capital | ||
Convertible bonds due within 1 year | ||
Fixed assets acquired under financing lease | ||
3. Net changes in cash and cash equivalents: | -- | -- |
Closing balance of cash | 4,665,798,912.43 | 1,403,999,087.40 |
Less: Opening balance of cash | 2,724,335,001.58 | 648,711,545.32 |
Add: Closing balance of cash equivalents | ||
Less: Opening balance of cash equivalents | ||
Net increase of cash and cash equivalents | 1,941,463,910.85 | 755,287,542.08 |
(2) Net cash paid for acquiring subsidiaries for the current period
Unit: RMB
Amount | |
Cash or cash equivalents paid for business merger in the current period |
(3) Net cash acquired from disposal of subsidiaries in the current period
Unit: RMB
Amount | |
Cash or cash equivalents acquired from disposal of subsidiaries in the current period |
(4) Composition of cash and cash equivalents
Unit: RMB
Item | Closing balance | Opening balance |
I. Cash | 4,665,798,912.43 | 2,724,335,001.58 |
Including: Cash on hand | 17,333.64 | 40,288.16 |
Cash at bank | 4,474,380,595.23 | 2,657,929,052.80 |
Other monetary capital for payment at any time | 191,400,983.56 | 66,365,660.62 |
Amount due from central bank available for payment | ||
Deposit of interbank funds | ||
Disbursement of interbank funds | ||
II. Cash equivalents | ||
Including: bond investment due within three months | ||
III. Closing balance of cash and cash equivalent | 4,665,798,912.43 | 2,724,335,001.58 |
Including: Cash and cash equivalents with restricted use of parent company or subsidiaries within the group |
80. Note on statement of changes in owners' equity
Explanation of the adjustment of name of “other items” and the amount to the closing balance at the end of theprevious year:
Not applicable
81. Assets with restricted ownership or use rights
Unit: RMB
Item | Closing book value | Reason for restriction |
Monetary funds | ||
Bill receivable | ||
Inventories | ||
Fixed assets | ||
Intangible assets | ||
Non-current assets maturing within one year | 1,500,000,000.00 | Pledge loan |
Total | 1,500,000,000.00 | -- |
82. Monetary items denominated in foreign currency
(1) Monetary items denominated in foreign currency
Unit: RMB
Item | Closing balance of foreign currency | Exchange rate | Closing balance of RMB converted |
(2) Descriptions for out-bound operational entity, including the disclosure of important out-bound entity’sprincipal place of business, recording currency and the basis of selection. Reasons should be revealed if therecording currency changes.
□ Applicable √ Not applicable
83. Hedging
Disclosure of hedging items, related hedging tools and the qualitative and quantitative information on hedgedrisks according to hedge categories:
Not applicable
84. Government grants
(1) General information of Government grants
Unit: RMB
Types | Amount | Listed items | Amount included in current gains and losses |
Subsidy for job security | 4,606,016.51 | Other income | 4,606,016.51 |
Rent subsidy | 49,680.00 | Other income | 49,680.00 |
Government rent subsidy | 109,500.00 | Other income | 109,500.00 |
Tax handling fee refund | 483,555.74 | Other income | 483,555.74 |
Small financial support income from the government | 10,124.01 | Other income | 10,124.01 |
Infrared thermometers received during the pandemic | 19,800.00 | Non-performing income | 1,045.00 |
Total | 5,278,676.26 | 5,259,921.26 |
(2) Refund of government subsidies
□ Applicable √ Not applicable
85. Others
NoneSection VIII. Changes in the Consolidation Scope
1. Business combinations not under common control
(1) Business combinations not under common control for the current period
Unit: RMB
Name of the acquiree | Time of acquiring equity | Cost of acquiring equity | Proportion of equity acquisition | Ways of acquiring equity | Date of acquisition | Basis of determining the date of acquisition | Income of the acquiree from the purchase date to the end of the period | Net profit of the acquiree from the purchase date to the end of the period |
(2) Merger costs and goodwill
Unit: RMB
Merger costs |
Explanation of the method of determining the fair value of the merger costs, and contingent consideration and itschanges:
None
The main reasons for the formation of large goodwill:
None
(3) The identifiable assets and liabilities of the acquiree at the date of acquisition
Unit: RMB
Fair value at the date of acquisition | Book value of the date of acquisition |
The method of determining the fair value of identifiable assets and liabilities:
NoneThe contingent liabilities of the acquiree assumed in the business combination:
None
(4) Gains or losses arising from re-measurement of equity held before the purchase date at fair valueWhether there is a transaction that realizes business combination step by step through multiple transactions andobtains control during the reporting period
□ Yes √ No
(5) Relevant descriptions about the failure of determining the merger consideration or the fair value of theidentifiable assets and liabilities of the acquiree on the date of acquisition or at the end of the merger period
None
(6) Other descriptions
None
2. Business combinations under common control
(1) Business combinations under common control for the current period
Unit: RMB
Name of the merged party | Equity ratio obtained in the business combination | Basis for business combination under common control | Date of business combination | Basis of determining the combination date | Income of the merged party from the beginning of combination period to the combination date | Net profit of the merged party from the beginning of the combination period to the combination date | Income of the merged party during the comparison period | Net profit of the merged party during the comparison period |
(2) Cost of business combination
Unit: RMB
Cost of business combination |
Descriptions for the contingent consideration and its changes:
None
(3) Book value of assets and liabilities of the merged party on the combination date
Unit: RMB
Combination date | End of the previous period |
Contingent liabilities of the merged party assumed in the business combination:
None
3. Reverse purchase
Basic information of the transaction, the basis for recognizing the transaction as reverse purchase, whether theassets and liabilities retained by the listed company constitute a business and its basis, the determination of themerger cost, the adjustment amount of equity and its calculation method when treated as equity transactions:
None
4. Disposal of subsidiaries
Whether there is a situation where a single disposal of the investment in the subsidiary results in the loss ofcontrol
□ Yes √ No
Whether there is a situation where the investment in the subsidiary disposed step by step through multipletransactions results in the loss of control in the current period
□ Yes √ No
5. Changes in the scope of consolidation due to other reasons
Explanation of the changes in the scope of consolidation caused by other reasons (such as newly establishedsubsidiaries, liquidation subsidiaries, etc.) and the relevant circumstances:
Company | Method of obtaining and disposing subsidiaries during the reporting period | Impact on the whole production, operation and performance |
Shaanxi OFFCN Technology Co., Ltd. | New establishment | Not yet operating, no impact on overall performance |
Beijing OFFCN Future Education Technology Co., Ltd. | New establishment | Not yet operating, no impact on overall performance |
6. Others
NoneSection IX. Interest In Other Entities
1. Interest in subsidiaries
(1) Composition of the Company
Name | Principal place of business | Place of registration | Nature of business | Shareholding ratio | Acquisition method | |
Direct | Indirect | |||||
1. Offcn Ltd. | Beijing | Beijing | Service industry | 100.00% | Reverse purchase | |
2. Yawei Automobile Wuhu Services Co., Ltd. | Wuhu | Wuhu | Merchandise sales, etc. | 100.00% | New establishment | |
3. Yaxia Automobile Ningguo Driver Training School | Ningguo | Ningguo | Service industry | 100.00% | New establishment | |
4. Yaxia Automobile Huangshan Fudi Services Co., Ltd. | Huangshan | Huangshan | Merchandise sales, etc. | 100.00% | New establishment | |
5. Yaxia Automobile Chaohu Kaixuan Services Co., Ltd. | Hefei | Hefei | Merchandise sales, etc. | 100.00% | New establishment | |
6. Yaxia Automobile Haozhou Driver Training School | Bozhou | Bozhou | Service industry | 100.00% | New establishment | |
7. Bokai Automobile Suzhou Services Co., Ltd. | Suzhou | Suzhou | Merchandise sales, etc. | 100.00% | Acquisition | |
8. Zhejiang Offcn Co. Ltd. | Hangzhou | Hangzhou | Service industry | 100.00% | New establishment | |
9. Taizhou Offcn Co. Ltd. | Taizhou | Taizhou | Service industry | 100.00% | New establishment | |
10. Offcn Xinzhiyu Online Technology Co., Ltd. | Beijing | Beijing | Service industry | 100.00% | New establishment | |
11. Hulunbuir Hailar Offcn Co., Ltd. | Hulunbuir | Hulunbuir | Service industry | 100.00% | New establishment | |
12. Xilinhot Offcn Co., Ltd. | Xilinhot | Xilinhot | Service industry | 100.00% | New establishment | |
13. Yueqing Offcn Co., Ltd. | Yueqing | Yueqing | Service industry | 100.00% | New establishment |
14. Jiaozuo Offcn Co., Ltd. | Jiaozuo | Jiaozuo | Service industry | 100.00% | New establishment | |
15. Xinzheng Offcn Co., Ltd. | Zhengzhou | Zhengzhou | Service industry | 100.00% | New establishment | |
16. Chongqing Jiangbei Offcn Co., Ltd. | Chongqing | Chongqing | Service industry | 100.00% | New establishment | |
17. Nanning Offcn Co., Ltd. | Nanning | Nanning | Service industry | 100.00% | New establishment | |
18. Baiyin Offcn Co., Ltd. | Baiyin | Baiyin | Service industry | 100.00% | New establishment | |
19. Beijing Xindezhiyuan Enterprise Consulting Co., Ltd. | Beijing | Beijing | Service industry | 100.00% | New establishment | |
20. Nanjing Huiyue Hotel Management Co., Ltd. | Nanjing | Nanjing | Service industry | 100.00% | Acquisition | |
21. Shandong Kunzhong Real Estate Co., Ltd. | Jinan | Jinan | Service industry | 100.00% | Acquisition | |
22. Sanmenxia Offcn Co., Ltd. | Sanmenxia | Sanmenxia | Service industry | 100.00% | New establishment | |
23. Liaoning Offcn Cultural Exchange Co., Ltd. | Shenyang | Shenyang | Service industry | 100.00% | New establishment | |
24. Liaoning Offcn Co., Ltd. | Shenfuxinqu | Shenfuxinqu | Service industry | 100.00% | New establishment | |
25. Tianjin Wuqing Offcn Co., Ltd. | Tianjin | Tianjin | Service industry | 100.00% | New establishment | |
26. Shandong Offcn Co., Ltd. | Qingdao | Qingdao | Service industry | 100.00% | New establishment | |
27. Jilin Changyi Offcn Co., Ltd. | Jilin | Jilin | Service industry | 100.00% | New establishment | |
28. Yuxi Offcn Co., Ltd. | Yuxi | Yuxi | Service industry | 100.00% | New establishment | |
29. Tonghua Offcn Co., Ltd. | Tonghua | Tonghua | Service industry | 100.00% | New establishment | |
30. Hunan Lighsalt Offcn Co., Ltd. | Changsha | Changsha | Service industry | 90.00% | New establishment | |
31. Tianjin Hexi Offcn Co., Ltd. | Tianjin | Tianjin | Service | 100.00% | New |
industry | establishment | |||||
32. Chengdu Offcn Co., Ltd. | Chengdu | Chengdu | Service industry | 100.00% | New establishment | |
33. Shandong Zuoda Business Management Co., Ltd. | Rizhao | Rizhao | Service industry | 100.00% | New establishment | |
34. Liaoning Zhongcheng Real Estate Development Co., Ltd. | Shenfuxinqu | Shenfuxinqu | Real estate | 100.00% | Acquisition | |
35. Shaanxi Offcn Co., Ltd. | Xi’an | Xi’an | Service industry | 100.00% | New establishment | |
36. Beijing OFFCN Future Education Technology Co., Ltd. | Beijing | Beijing | Service industry | 100.00% | New establishment |
Explanation of the differences between the percentage of shares held in the subsidiary and the voting rights ratio:
None.Basis for the case of holding half or less of the voting rights but still controlling the investee, or holding more thanhalf of the voting rights but not controlling the investee:
None.Basis for the important structured entities included in the scope of consolidation:
None.Basis for determining whether the Company is an agent or a principal:
None.
(2) The important non-wholly owned subsidiary
Unit: RMB
Name of the subsidiary | Minority Shareholding Ratio | Profit and loss attributable to minority shareholders in the current period | Dividends declared to minority shareholders in the current period | The balance of minority shareholders’ equity at the end of the period |
Explanation for the differences between the ratio of the minority shareholders’ shareholding and the voting rightsratio:
None.
(3) Major financial information of important non-wholly owned subsidiaries
Unit: RMB
Name of | Closing balance | Opening Balance |
the subsidiary | 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 |
Unit: RMB
Name of the subsidiary | Amount for the current period | Amount for the prior period | ||||||
Operating income | Net profit | Total comprehensive income | Cash flow from operating activities | Operating income | Net profit | Total comprehensive income | Cash flow from operating activities |
(4) Significant restrictions on the use of corporate group assets and the settlement of corporate group debts
None
(5) Financial support or other support provided to structured entities included in the scope of consolidatedfinancial statementsNone
2. Changes in the ownership share of the subsidiary and still controlling the subsidiary’s transactions
(1) Explanation of changes in the ownership share of subsidiaries
None.
(2) Impact of the transaction on the equity of minority shareholders and the equity attributable to the parentcompany
Unit: RMB
Purchase cost/disposal consideration |
3. Interests in joint arrangements or joint ventures
(1) Significant joint ventures and associates
Name of joint ventures and associates | The principal place of business | The place of registration | Business nature | Shareholding ratio | Accounting treatment of investment in joint ventures or associates | |
Direct | Indirect |
Explanation of the differences between the shareholding ratio in a joint venture or an associate and that of thevoting rights ratio:
None.Basis for the case of 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:
None.
(2) Main financial information of important joint ventures
Unit: RMB
Closing balance / Amount for the current period | Opening Balance/ Amount for the prior period |
(3) Main financial information of important associates
Unit: RMB
Closing balance / Amount for the current period | Opening Balance/ Amount for the prior period |
(4) Summary financial information of unimportant joint ventures and associates
Unit: RMB
Closing balance / Amount for the current period | Opening Balance/ Amount for the prior period |
(5) Explanation of significant restrictions on the ability of joint ventures or associates to transfer funds to theCompanyNone.
(6) Excess losses incurred by joint ventures or associates
Unit: RMB
Name of joint ventures or associates | Unrecognized loss accumulated in the previous period | Unrecognized loss in the current period (or net profit shared in the current period) | Accumulated unrecognized loss at the end of the period |
(7) Unconfirmed commitments related to joint venture investment
None.
(8) Contingent liabilities related to investment in joint ventures or associates
None.
4. Important joint business
Name of joint business | The principal place of business | The place of registration | Business nature | Shareholding ratio/shares | |
Direct | Indirect |
Explanation of the differences of the shareholding ratio or the shares enjoyed in the joint operation from that ofthe voting rights:
None.Basis for classification as a joint operation if the joint operation is a separate entity:
None.
5. Equity in structured entities not included in the scope of consolidated financial statementsExplanation of structured entities not included in the scope of consolidated financial statements:
None.
6. Others
None.Section X. Risks Associated with Financial InstrumentsThe Company’s main financial instruments include cash and cash equivalents, financial assets held fortrading, accounts receivable, other receivables, debt investments, Other equity instruments, other non-currentfinancial assets, etc. The risks associated with these financial instruments and the risk management policiesadopted by the Company to reduce these risks are described below. The Company’s management manages andmonitors these exposures to ensure that the risks are contained within a defined range.Risk management objectives and policies: The Company’s risk management is to strike an appropriatebalance between risks and benefits, minimize the negative impact of risks on the Company’s businessperformance and maximize the interests of shareholders and other equity investors. Based on this riskmanagement objective, the basic strategy of the Company’s risk management is to determine and analyze variousrisks faced by the Company, establish an appropriate bottom line for risk tolerance, make risk management andtimely and reliably supervise and control various risks.The main risks caused by the Company’s financial instruments are credit risk, liquidity risk and market risk.
1. Classification of financial instruments
1.1 Carrying value of various financial assets on the balance sheet date
(1) June 30, 2020
Item | Financial assets measured at amortized cost | Financial assets measured at fair value and with variation reckoned into current gains/losses | Financial assets measured at fair value and with variation reckoned into other comprehensive income | Total |
Cash and cash equivalents | 4,665,798,912.43 | 4,665,798,912.43 |
Financial assets held for trading | 2,156,713,143.65 | 2,156,713,143.65 | ||
Accounts receivable | 14,349,954.64 | 14,349,954.64 | ||
Other receivables | 533,546,149.67 | 533,546,149.67 | ||
Non-current assets maturing within one year | 1,838,527,164.24 | 1,838,527,164.24 | ||
Debt investments | 122,023,500.00 | 122,023,500.00 | ||
Investment in other equity instruments | 162,800,000.00 | 162,800,000.00 | ||
Other non-current financial assets | 138,166,559.96 | 138,166,559.96 |
(2) January 1,2020
Item | Financial assets measured at amortized cost | Financial assets measured at fair value and with variation reckoned into current gains/losses | Financial assets measured at fair value and with variation reckoned into other comprehensive income | Total |
Cash and cash equivalents | 2,724,335,001.58 | 2,724,335,001.58 |
Financial assets held for trading | 1,754,396,227.54 | 1,754,396,227.54 | ||
Accounts receivable | 2,721,638.09 | 2,721,638.09 | ||
Other receivables | 255,013,296.96 | 255,013,296.96 | ||
Debt investments | 1,923,598,909.09 | 1,923,598,909.09 | ||
Investment in other equity instruments | 162,800,000.00 | 162,800,000.00 | ||
Other non-current financial assets | 138,166,559.96 | 138,166,559.96 |
1.2 Carrying value of various financial assets on the balance sheet date is as follows:
(1) June 30, 2020
Item | Financial liabilities measured at fair value and with variation reckoned into current gains/losses | Other financial liabilities | Total |
Short-term borrowings | 3,457,000,000.00 | 3,457,000,000.00 | |
Accounts payable | 25,285,867.85 | 25,285,867.85 |
Other payables | 54,583,260.88 | 54,583,260.88 |
(2) January 1,2020
Item | Financial liabilities measured at fair value and with variation reckoned into current gains/losses | Other financial liabilities | Total |
Short-term borrowings | 2,867,000,000.00 | 2,867,000,000.00 | |
Accounts payable | 236,481,990.86 | 236,481,990.86 | |
Other payables | 88,693,411.98 | 88,693,411.98 |
2. Credit risk
The financial assets of the Company include cash and cash equivalents, financial assets held for trading,accounts receivable, other receivables, etc. The credit risk of these financial assets is caused by the default of thecounterparty. The maximum risk exposure is equal to the carrying value of these instruments, including:
The Company’s monetary capital is deposited in banks with high credit rating, so the credit risk of monetarycapital is low.
The biggest credit risk to the Company is the book value of accounts receivable and other receivables in theconsolidated balance sheet. The Company continuously monitors the balance of accounts receivable and otherreceivables to ensure that the overall credit risk of the company is under control. The quantitative data of theCompany’s credit risk exposure arising from accounts receivable and other receivables can be found in Note VII
(5) “Accounts receivable “ and Note VII (8) “Other receivables”.
3. Liquidity risk
The Company adopts the revolving liquidity plan tool to manage the risk of capital shortage. The facilityconsiders both the maturity date of its financial instruments and the expected cash flow generated by thecompany’s operations.
The goal of the Company is to maintain the balance between the sustainability and flexibility of financingthrough a variety of financing instruments, including bank loans and other interest-bearing loans.
When managing liquidity risks, the Company shall maintain sufficient cash and cash equivalents as deemedby the management and monitor them to meet the Company’s operational needs and reduce the impact of cashflow fluctuations. The managements monitor the use of bank loans and ensure compliance with loan agreements.
Maturity analysis of financial liabilities based on undiscounted contract cash flow:
Closing balance | ||||
Item |
Within 1 year | 1-5 years | Over 5 years | Total | |
Short-term borrowings | 3,457,000,000.00 | 3,457,000,000.00 |
Accounts payable | 25,285,867.85 | 25,285,867.85 | ||
Other payables | 54,583,260.88 | 54,583,260.88 |
Continued table:
Opening balance | ||||
Item | ||||
Within 1 year | 1-5 years | Over 5 years | Total | |
Short-term borrowings | 2,867,000,000.00 | 2,867,000,000.00 |
Accounts payable | 236,481,990.86 | 236,481,990.86 | ||
Other payables | 88,693,411.98 | 88,693,411.98 |
4. Market risk
Market risk refers to the risk that the fair value of financial instruments or future cash flow fluctuates due tochanges in market prices, including interest rate risk and foreign currency risk.
4.1. Interest rate risk
None
4.2. Exchange rate risk
NoneSection XI. Fair Value Disclosure
1. The financial assets and financial liabilities measured at fair value at the end of the reporting period
Unit: RMB
Item | Closing fair value | |||
Level 1 | Level 2 | Level 3 | Total | |
I. Continuous fair value measurement | -- | -- | -- | -- |
1. Held-for-trading financial asset | 2,256,829,703.61 | 38,050,000.00 | 2,294,879,703.61 | |
(1) Financial assets measured at fair value and with variation reckoned into current gains/losses | 2,256,829,703.61 | 38,050,000.00 | 2,294,879,703.61 | |
① Debt instruments investment | 2,256,829,703.61 | 38,050,000.00 | 2,294,879,703.61 | |
② Equity instruments investment |
③Derivative financial assets | ||||
(2) Designated financial assets measured at fair value and with variation reckoned into current gains/losses | ||||
① Debt instruments investment | ||||
② Equity instruments investment | ||||
2. Other debt investment | ||||
3. Other equity instruments investment | 162,800,000.00 | 162,800,000.00 | ||
4. Investment properties | ||||
(1) Land use rights for lease | ||||
(2) Buildings rent | ||||
(3) Land use rights to be transferred after appreciation | ||||
5. Biological assets | ||||
(1) Consumptive biological assets | ||||
(2) Productive biological assets | ||||
Total assets measured continuously at fair value | 2,256,829,703.61 | 200,850,000.00 | 2,457,679,703.61 | |
6. Held-for-trading financial liabilities | ||||
Inc: Trading bonds | ||||
Derivative financial liabilities | ||||
Others | ||||
7. Designated financial liabilities measured at fair value and with variation reckoned into current gains/losses | ||||
Total liabilities measured continuously at fair value | ||||
II. Non-continuous fair value measurement | -- | -- | -- | -- |
1. Assets holding for sale | ||||
Total assets measured non-continuously at fair value | ||||
Total liabilities measured non-continuously at fair value |
2. The basis for determining the market price of sustainable and non-sustainable fair value measurementitems at the first levelNone.
3. Information on the valuation technique and qualitative and quantitative for important parametersadopted as for sustainable and non-sustainable second-level fair value measurement itemsThe Company’s sustainable second-level fair value measurement items are mainly financial products. The fairvalue is determined by the discounted cash flow method and the expected rate of return.
4. Information on the valuation technique and qualitative and quantitative for important parametersadopted as for sustainable and non-sustainable third-level fair value measurement itemsThe Company’s sustainable third-level fair value measurement items are mainly non-tradable equity instrumentsinvestment and debt instruments investment. The fair value is determined by market method and liquiditydiscount.
5. Adjustment information between opening and closing book value and sensitivity analysis of unobservableparameters as for third-level fair value measurement itemsNone.
6. Reasons for the conversion between different levels during the current period and the policy to determinethe conversion point as for continuous fair value measurement itemsNone.
7. Valuation technical changes occurred during the period and the reasons for the changesNone.
8. The fair value of financial assets and financial liabilities not measured at fair valueNone.
9. Others
None.Section XII. Related Party and Transactions
1. Parent company of the Company
Name of the Parent Company | Place of registration | Nature of business | Registered capital | The parent company’s shareholding ratio in the Company | Proportion of voting rights of the parent company to the Company |
The Company is ultimately controlled by Li Yongxin and Lu Zhongfang.Other explanation:
As of June 30, 2020, the combined shareholding of Li Yongxin and Lu Zhongfang accounted for 60.58% of theCompany’s share capital.
2. Subsidiaries of the Company
For details of the subsidiaries of the Company, see Note IX (1) “Interest in subsidiaries”.
3. Joint ventures and associates of the company
The important joint ventures or associates of the company are detailed in the notes.The information of other joint ventures or associates that have related party transactions with the Company in thecurrent period or that have related party transactions with the Company in the previous period to form a balance isas follows:
Name of joint ventures or associates | Relationship with the Company |
4. Other related parties of the Company
Other related party names | Relationship between other related parties and the Company |
Li Yongxin | The controlling shareholder |
Beijing Qianqiu Intelligence Book & Media Co., Ltd. | Actual controller |
Beijing Offcn Online Technology Co., Ltd. | Actual controller |
Beijing Haidian Offcn Training School | Actual controller |
Jinan Offcn Training School | Actual controller |
Kunming Wuhua Offcn Training School | Actual controller |
Baoding Lianchi Offcn Training School | Actual controller |
Beijing Haidian Baoquan Financial Training Centre | Actual controller |
Cangzhou Yunhe Offcn Training School | Actual controller |
Chengdu Wuhou Offcn Training School | Actual controller |
Cifeng Hongshan Offcn Training Centre | Actual controller |
Dezhou Offcn Training School | Actual controller |
Haikou Meilan Offcn Training School | Actual controller |
Handan Congtai Offcn Training School | Actual controller |
Hegang Offcn Training School | Actual controller |
Heihe Aihui Offcn Training School | Actual controller |
Kiamusze Offcn Training School | Actual controller |
Leshan Shizhong Offcn Training School | Actual controller |
Mudanjiang Offcn Training School | Actual controller |
Qiqihar Tiefeng Offcn Training School | Actual controller |
Shaoyang Shuangqing Offcn Training School | Actual controller |
Tangshan Lunan Offcn Training School | Actual controller |
Weifang Offcn Training School | Actual controller |
Urumqi Shayibake Offcn Training School | Actual controller |
Yiyang Heshan Offcn Training School | Actual controller |
Shenyang Lijing Pearl Hotel Management Co., Ltd. | A company controlled by our executives and core employees |
Beijing Taifu Hotel Management Co., Ltd. | A company controlled by our executives and core employees |
Beijing Xingshou Fuyuan Plantation | A company controlled by Xu Hua, spouse of Li Yongxin, the controlling shareholder and actual controller of the Company |
Wang Zhendong | The company’s director/ senior manager/ shareholder who directly hold more than 5% (including 5%) of the Company’s shares |
Shi Lei | Director of the company |
Yi Ziting | Director of the company |
Wang Qiang | Independent director of the company |
Tong Yan | Independent director of the company |
Zhang Xuanming | Independent director of the company |
Guo Shihong | Former supervisor of the Company |
Yu Hongwei | Supervisor of the Company |
Li Wen | Supervisor of the Company |
He Di | Supervisor of the Company |
Wang Xuejun | Senior management of the Company |
He Youli | Senior management of the Company |
Zhang Yongsheng | Former senior management of the Company |
Gui Hongzhi | Senior management of the Company |
Luo Xue | Senior management of the Company |
Li Lin | Core technique staff of the Company |
Liu Yan | Core technique staff of the Company |
Zhang Hongjun | Core technique staff of the Company |
5. Related-party transactions
(1) Related transactions in the purchase and sale of goods, provision and receipt of labor servicesTable of the procurement of goods/ acceptance of labor services
Unit: RMB
Related parties | Content of related party transaction | Amount for the current period | Transaction amount granted | Whether it exceeds the transaction limit (Y/N) | Amount for the previous period |
Beijing Taifu Hotel Management Co., Ltd. | Accommodation and catering services | 8,245,500.00 | 40,000,000.00 | N | 8,836,650.00 |
Baoding Lianchi Offcn Training School | Joint school running | 30,000.00 | N | 40,090.00 | |
Cangzhou Yunhe Offcn Training School | Joint school running | 30,000.00 | N | 74,982.00 | |
Chengdu Wuhou Offcn Training School | Joint school running | 40,000.00 | N | 50,000.00 | |
Handan Congtai Offcn Training School | Joint school running | 30,000.00 | N | 40,100.00 | |
Hegang Offcn Training School | Joint school running | 0.00 | N | 15,000.00 | |
Heihe Aihui Offcn Training Center | Joint school running | 36,998.00 | N | 15,000.00 | |
Kiamusze Offcn Training School | Joint school running | 24,000.00 | N | 10,000.00 | |
Leshan Shizhong Offcn Training School | Joint school running | 35,000.00 | N | 70,000.00 | |
Mudanjiang Offcn Training School | Joint school running | 22,800.00 | N | 10,000.00 | |
Qiqihar Tiefeng Offcn Training School | Joint school running | 47,800.00 | N | 42,000.00 | |
Shaoyang Shuangqing Offcn Training School | Joint school running | 0.00 | N | 20,000.00 | |
Tangshan Lunan Offcn Training School | Joint school running | 30,000.00 | N | 50,375.00 |
Weifang Offcn Training School | Joint school running | 71,100.00 | N | 138,015.00 | |
Yiyang Heshan Offcn Training School | Joint school running | 50,000.00 | N | 15,000.00 | |
Haikou Meilan Offcn Training School | Joint school running | 20,000.00 | N | 0.00 |
Sales of goods/ Table of provision of services
Unit: RMB
Related parties | Content of related party transaction | Amount for the current period | Amount for the previous period |
Beijing Qianqiu Intelligence Book & Media Co., Ltd. | Exhibition services | 1,179,245.28 | 1,132,075.47 |
Explanations for the procurement and sales of goods and rendering and receiving service:
None.
(2) Related fiduciary management / contracting and entrusted management / outsourcingThe table of the Company’s fiduciary management / contracting:
Unit: RMB
Name of entruster /outsourcer | Name of trustee / contractor | Type | Start date | Termination Date | The pricing basis of custody income / contracting income | Recognized custody income / contracting income for the current period |
Li Yongxin | Offcn Ltd. | 33 private schools | November 19, 2018 | All reasonable returns on the entrusted assets |
Explanations for related entrustment and contracting:
None.The table of the Company’s entrusted management and outsourcing
Unit: RMB
Name of entruster /outsourcer | Name of trustee / contractor | Type | Start date | Termination Date | Pricing basis for custody/outsou | Custody/outsourcing fee confirmed in |
rcing fee | this period |
Explanations for related management and outsourcingNone.
(3) Related lease
The Company as the lessor:
Unit: RMB
Name of lessee | Category | Rental income recognized for the current period | Rental income recognized for the previous period |
Anhui Yaxia Industrial Group Co., Ltd. | Operating lease | 9,854,967.65 | 9,385,683.40 |
The Company as the lessee:
Unit: RMB
Name of lessor | Category | Rental fee recognized for the current period | Rental fee recognized for the previous period |
Shenyang Lijing Pearl Hotel Management Co., Ltd. | Operating lease | 25,030,700.00 | 11,918,000.00 |
Explanations of related leaseNone.
(4) Related guarantees
The Company as the guarantor
Unit: RMB
Guaranteed party | Guarantee amount | Guarantee start date | Guarantee expiration date | Whether the guarantee has been fulfilled |
The Company as the guaranteed party
Unit: RMB
Guarantor | Guarantee amount | Guarantee start date | Guarantee expiration date | Whether the guarantee has been fulfilled |
Li Yongxin | 360,000,000.00 | January 9, 2019 | January 9, 2020 | Yes |
Explanations of related guarantees:
On January 9, 2019, Offcn Ltd.signed a borrowing agreement of 360,000,000.00 with Huaxia Bank SidaokouSub-branch, with the contract number YYB7610120180014, and the borrowing period was from January 9, 2019to January 9, 2020. The loan was settled on January 9, 2020.
(5) Borrowing from related parties
Unit: RMB
Related party | Amount | Start date | Expiration date | Description |
(6) Assets transfer and debt restructuring related party
Unit: RMB
Related party | related-party transactioncontent | Amount for the current period | Amount for the prior period |
(7) Remuneration for key management personnel
Unit: RMB
Item | Amount for the current period | Amount for the prior period |
Remuneration for key management personnel | 8,350,871.73 |
(8) Other related transactions
None.
6. Receivables and payables of related parties
(1) Receivables
Unit: RMB
Item | Related party | Closing balance | Opening balance | ||
Book balance | Bad debt provision | Book balance | Bad debt provision | ||
Accounts receivable | Beijing Qianqiu Intelligence Book & Media Co., Ltd. | 1,250,000.00 | 0.00 | ||
Other receivables | Shenyang Lijing Mingzhu Hotel Management Co., Ltd. | 5,675,200.00 | 5,675,200.00 |
(2) Payables
Unit: RMB
Item | Related party | Closing book balance | Opening book balance |
Accounts payables | Yiyang Heshan Offcn Training School | 50,000.00 | 0.00 |
7. Related party commitments
For details of the commitments of related parties, please refer to Note XIV (1) “Important commitments”.
8. Others
None.
Section XIII. Share-based payment
1. Overview of share-based payment
√ Applicable □ Not applicable
Unit: RMB
Total equity instruments granted by the Company in the current period | 0.00 |
Total equity instruments exercised by the Company in the current period | 0.00 |
Total equity instruments invalidated by the Company in the current period | 0.00 |
Scope of the exercise price of the stock options issued by the Company at the end of the period and the remaining period of the contract | 0 |
Scope of the exercise price of other equity instruments issued by the Company at the end of the period and the remaining period of the contract | 0 |
Other statementOn May 22, 2015, Offcn Ltd. held a shareholders’ meeting and agreed that Lu Zhongfang, the actual controller ofOffcn Ltd., would transfer her RMB 700,000.00 of capital contribution to the shareholder, Wang Zhendong(general manager and legal representative of Offcn Ltd.) at the price of RMB 700,000.00. Shareholders Liu Bin,Zhang Yongsheng and Guo Shihong respectively transferred RMB 100,000.00 of capital contribution held bythem to the shareholder Wang Zhendong at the price of RMB 100,000.00.
On August 11, 2015, according to the Company’s shareholders’ committee resolution, the Company registeredcapital was increased from RMB 10,000,000.00 to RMB 11,111,111.11, and the newly-added registered capital ofRMB 1,111,111.11 shall be contributed by Beijing Aerospace Industry Investment Fund (limited partnership),Beijing Guangyin Venture Capital Investment Center (limited partnership) and Beijing Jirui TechnologyInnovation Investment Center (limited partnership) in a totally RMB 300,000,000.00, with the correspondingconsideration at RMB 270 per share.
From May to August 2015, the Company’s business model and operating did not change significantly, so theinvestment price of RMB 270 per share mentioned above could be regarded as the market fair value.
According to the relevant provisions of the CASs, the administrative expenses at RMB 26,900,000.00, RMB53,800,000.00, RMB 53,800,000.00, RMB 53,800,000.00, RMB 53,800,000.00 and RMB 26,900,000.00 arerespectively recognized according to the limitation years of equity incentive of 2015, 2016, 2017, 2018, 2019 andfirst half of 2020. The administrative expenses of RMB 269,000,000.00 are accumulatively recognized and thecapital reserves of RMB 269,000,000.00 are increased correspondingly.
2. Equity-settled share payments
√ Applicable □ Not applicable
Unit: RMB
Determination of the fair value of equity instruments on the grant date | Based on the latest issue of new shares, it is determined to be RMB 270 per share. |
Basis for determining the number of vested equity instruments | Estimate the number of restricted stocks that can be unlocked based on the turnover rate |
Reasons for significant differences between the current period’s estimates and the previous period’s estimates | None |
Accumulated amount of equity-settled share-based payments included in capital reserve | 269,000,000.00 |
Total expenses recognized for equity-settled share-based payments in the current period | 26,900,000.00 |
Other statementEquity-settled share-based payments: The granting date of the equity incentive plan was after the shareholders’meeting reviewed and approved the incentive plan (May 22, 2015), the incentive share agreement was transferredto Wang Zhendong, and the grant was completed when Offcn Ltd. completed the changes of industrial andcommercial registration (July 23, 2015). The equity incentive requires Wang Zhendong to commit to working inthe Company for a continuous period of five years from the date of the grant. If Wang Zhendong transfers hisshare in Offcn Ltd. within five years, it shall be transferred to Lu Zhongfang and the person designated by LuZhongfang. If Wang Zhendong resigns or transfers his share in Offcn Ltd during the above period, the price shallbe based on the original cost of Wang Zhendong’s acquisition of the share in Offcn Ltd., plus the interest at therate of 6% per year, excluding all dividends accumulated over the years (calculated as the amount excluding tax).Prior to the release of the restriction, Wang Zhendong shall not have the right to vote or dispose of the Company’sshares indirectly held by him (including the right to mortgage, pledge and transfer); if the voting right isirrevocable, it shall entrust Offcn Ltd. to exercise it; the part of the dividend in its income shall be paid by OffcnLtd. to Wang Zhendong at an appropriate time.
After the major asset restructuring of the Company, all shareholders of Offcn Ltd. became shareholders of theCompany, and Wang Zhendong also became the shareholder of the Company. Therefore, Wang Zhendong, LuZhongfang and Offcn Ltd. in the supplementary agreement after completion of the reorganization, agreed, afterthe completion of the transaction Wang Zhendong would become a shareholder of the Company. In the next fiveyears after June 1, 2015, Wang Zhendong shall continue to serve the Offcn Ltd., shall not resign, and shall nottransfer in the meantime its holdings of shares of the Company to the public. If Wang Zhendong leaves during thatperiod, he shall still have to pay a total of RMB 269 million as the equity transfer difference to Lu Zhongfang, LiuBin, Zhang Yongsheng and Guo Shihong.
3. Share-based payment through cash settlements
□ Applicable √ Not applicable
4. Modification and termination of share-based payment
None
5. Others
NoneSection XIV. Commitments and contingencies
1. Important commitments
Important commitments on balance sheet datePursuant to the Profit Forecast Compensation Agreement signed by the Company and the eight natural personshareholders of Offcn Ltd. (Lu Zhongfang, Li Yongxin, Wang Zhendong, Guo Shihong, Liu Bin, ZhangYongsheng, Yang Shaofeng, Zhang Zhian) on May 4, 2018, the compensation obligors confirmed and promisedthat after the completion of the major assets restructuring, the net profits attributable to the owner of the parentcompany after deducting non-recurring profits and losses under the consolidated statements of Offcn Ltd. shall notbe less than RMB 930 million, RMB1.3 billion and RMB1.65 billion in years of 2018, 2019 and 2020 respectively.If the certified public accountant confirms that the actual net profits accumulated by Offcn Ltd. fall beneath theaggregate committed net profits as of the end of any of the three fiscal years, each compensation obligor shallassume the compensation obligation according to the proportion of the shares to the total shares of Offcn Ltd. heldby all the compensation obligors before the transaction. All compensation obligors are given priority to conductcompensation with shares. When the total amount of share compensation reaches 90% of the total number ofshares issued to purchase assets, all compensation obligors shall conduct compensation in cash.
2. Contingencies
(1) Important contingencies on balance sheet date
None
(2) Whether the Company has important contingencies that need to be disclosed and the explanations:
The Company has no important contingencies that need to be disclosed.
3. Others
None.Section XV. Matters subsequent to the balance sheet date
1. Significant unadjusted matters
Unit: RMB
Item | Content | Cumulative impacts on the financial status and operating results | Cause of failure in measuring cumulative impacts |
2. Profit distribution
Unit: RMB
Profits or dividends to be distributed |
3. Sales return
None
4. Other matters subsequent to the balance sheet date
NoneSection XVI. Other important matters
1. Corrections of accounting errors of previous period
(1) Retrospective restatement
Unit: RMB
Corrections of accounting errors | Processing procedures | statements item of the affected comparison period | Cumulative impact |
(2) Prospective application
Corrections of accounting errors | Approval procedure | Reasons for adopting prospective application |
2. Debt restructuring
None
3. Assets exchange
(1) Non-monetary asset exchange
None
(2) Other assets exchange
None
4. Pension plan
None
5. Discontinued operations
Unit: RMB
Item | Revenue | Expense | Total profit | Income tax expenses | Net profit | Profit of discontinued operations attributable to the owner of the parent company |
6. Information of segments
(1) Basis for determination of report segment and accounting policy
The Company’s main production and operation activities are decided by the Company, which is mainly engagedin education and training business. Therefore, the Company is managed as an operating segment. For accountingpolicies, please refer to Note V of this report — The Company’s Significant Accounting Policies and AccountingEstimates.
(2) Financial information of the reporting segment
Unit: RMB
Item | Inter-segment offset | Total |
(3) If the Company has no reporting segment, or cannot disclose the total assets and liabilities of eachsegment, the reasons shall be clarified.
(4) Other statements
① Revenue from external transactions for each product and service or each similar product and service.
Item | Amount for the current period | Amount for the prior period |
Main business | 2,788,186,999.66 | 3,612,344,963.59 | |
Including: Education and training | 2,788,186,999.66 | 3,612,344,963.59 |
Other businesses | 19,793,480.94 | 25,074,551.89 |
Total | 2,807,980,480.60 | 3,637,419,515.48 |
② Total foreign transaction income obtained by the Company from its own country and from other countries orregions.
Area | Amount for the current period | Amount for the prior period |
Domestic area | 2,807,980,480.60 | 3,637,419,515.48 |
Total | 2,807,980,480.60 | 3,637,419,515.48 |
7. Other important transactions and events having impacts on decisions of investorsNone
8. Others
NoneSection XVII. Notes to the parent company’s financial statements
1. Receivables
(1) Classified disclosure of receivables
Unit: RMB
Item | Closing balance | Opening balance | ||||||||
Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
Amount | Proportion | Amount | Proportion | Amount | Proportion | Amount | Proportion | |||
Accounts receivables for which bad debt provision has been assessed by single credit risk | ||||||||||
Including | ||||||||||
Accounts receivable for which bad debt provision has been assessed by credit risk portfolios | 7,640,399.41 | 100.00% | 382,019.97 | 5.00% | 7,258,379.44 | |||||
Including: | ||||||||||
Combination 3 | 7,640,399.41 | 100.00% | 382,019.97 | 5.00% | 7,258,379.44 | |||||
Total | 7,640,399.41 | 100.00% | 382,019.97 | 7,258,379.44 |
Bad debts provision on a single item basis:
Unit: RMB
Item | Closing balance | |||
Book balance | Bad debt provision | Proportion | Reasons |
Bad debt provision assessed by credit risk portfolios: 382,019.97
Unit: RMB
Item | Closing balance | ||
Book balance | Bad debt provision | Proportion | |
Provision for bad debts of accounts receivable | 7,640,399.41 | 382,019.97 | 5.00% |
Total | 7,640,399.41 | 382,019.97 | -- |
Explanations for the determining basis of the portfolios:
NoneBad debt provision assessed by credit risk portfolios:
Unit: RMB
Item | Closing balance | ||
Book balance | Bad debt provision | Proportion |
Explanations of the basis for determining the portfolios
If the bad debt provision of accounts receivable is based on the general model of expected credit loss, please referto the disclosure methods of other receivables to disclose the relevant information of bad debt provision:
□ Applicable √ Not applicable
Disclosure by aging
Unit: RMB
Aging | Closing balance |
Within 1 year (inclusive) | 7,640,399.41 |
1-2 years | |
2-3 years | |
Over 3 years | |
3-4 years | |
4-5 years | |
Over 5 years | |
Total | 7,640,399.41 |
(2) Provision, recovery or reversal of bad debts in current period
Provision of bad debts in current period:
Unit: RMB
Category | Opening balance | Changes in the current period | Closing balance | |||
Provision | Recovery or reversal | Written-off | Others | |||
Provision for bad debts of accounts receivable | 382,019.97 | 382,019.97 | ||||
Total | 382,019.97 | 382,019.97 |
Significant amount of provision, recovery or reversal of bad debts in current period:
Unit: RMB
Name of institutions | Amount of recovery or | Recovery method |
None
(3) Receivables written-off in current period
Unit: RMB
reversalItem
Item | Written-off amount |
Important receivables written-off:
Unit: RMB
Creditor | Nature of receivables | Written-off amount | Reasons for written-off | Implemented written-off procedure | Whether generated from related transactions |
Statement of receivables written-off:
None
(4) Accounts receivables of the top five debtors based on the ending balance
Unit: RMB
Creditor | Closing balance receivables | Proportion in total closing balance receivables | Closing balance of bad debt provision |
Client 1 | 7,640,399.41 | 100.00% | 382,019.97 |
Total | 7,640,399.41 | 100.00% |
(5) Receivables derecognized due to the transfer of financial assets
None
(6) Assets or liabilities arising from transferring receivables and continuing to be involvedNone
2. Other receivables
Unit: RMB
Item | Closing balance | Opening balance |
Interest receivables | ||
Dividends receivables | 1,700,000,000.00 | |
Other receivables | 688,067,588.44 | 17,949,520.99 |
Total | 688,067,588.44 | 1,717,949,520.99 |
(1) Interest receivables
1.1 Classification of interest receivables
Unit: RMB
Item | Closing balance | Opening balance |
1.2 Important overdue interest
Borrower | Closing balance | Time | Reason | Whether impairment occurs and the judgment basis |
1.3 Bad debt provision
□Applicable √ Not applicable
(2) Dividends receivables
2.1 Classification of dividends receivables
Unit: RMB
Project (or investee) | Closing balance | Opening balance |
Offcn Ltd. | 1,700,000,000.00 | |
Total | 1,700,000,000.00 |
2.2 Important dividend receivable aged over 1 year
Unit: RMB
Project (or investee) | Closing balance | Aging | Cause of recovery failure | Whether impairment occurs and the judgment basis |
Total | -- | -- | -- |
2.3 Bad debt provision
□Applicable √ Not applicable
(3) Other receivables
3.1 Classification of other receivables by nature
Unit: RMB
Item | Closing balance | Opening balance |
Current payment | 688,061,988.44 | 17,943,920.99 |
Deposits and guarantees | 5,600.00 | 5,600.00 |
Total | 688,067,588.44 | 17,949,520.99 |
3.2 Bad debt provision
Unit: RMB
Bad debt provision | First stage | Second stage | Third stage | Total |
Expected credit loss in the next 12 months | Expected credit loss in the whole duration (no credit impairment ). | Expected credit loss in the whole duration (credit impairment has occurred) |
Changes in the book balance with significant changes in the loss provision for the current period
□Applicable √ Not applicable
Disclosure by agingUnit: RMB
Aging | Closing balance |
Within 1 year (inclusive) | 679,680,406.08 |
1 to 2 years | 8,387,182.36 |
2 to 3 years | |
Over 3 years | |
3 to 4 years | |
4 to 5 years | |
Over 5 years | |
Total | 688,067,588.44 |
3.3 Provision, recovery or reversal of bad debt in current period
Bad debt provision in current period
Unit: RMB
Item | Opening balance | Changes in the current period | Closing balance | |||
Provision | Recovery or reversal | Written-off | Others |
Important recovery or reversal of bad debt provision in current period:
Unit: RMB
Creditor | Amount of recovery or reversal | Recovery method |
3.4 Other receivables written off in current period
Unit: RMB
Item | Written-off amount |
Important other receivables written-off:
Unit: RMB
Creditor | Nature of other receivables | Written-off amount | Reason for Written-off | Implemented written-off procedure | Whether generated from related transactions |
Explanation of other receivables written-off:
None
3.5 Other receivables of the top five debtors based on the ending balance
Unit: RMB
Creditor | Nature of receivable | Closing balance | Aging | Proportion in total closing balance of other receivables | Closing balance of bad debt provision |
Offcn Ltd. | Current payment | 669,605,862.61 | Within 1 year (including 1 year) | 97.32% | |
Yaxia Automobile Bozhou Driver Training School | Current payment | 9,962,596.36 | Within 2 years (including 2 years) | 1.45% | |
Yaxia Automobile Wuhu Yawei Services Co., Ltd. | Current payment | 3,264,701.52 | Within 1 year (including 1 year) | 0.47% | |
Yaxia Automobile Suzhou Bokai Services Co., Ltd. | Current payment | 3,065,491.82 | Within 1 year (including 1 year) | 0.45% | |
Yaxia Automobile | Current payment | 1,907,374.50 | Within 2 years | 0.28% |
Huangshan Fudi Services Co., Ltd. | (including 2 years) | ||||
Total | -- | 687,806,026.81 | -- | 99.97% |
3.6 Receivables related to government subsidies
Unit: RMB
Name of institutions | Government subsidies | Closing balance | Closing aging | Time, amount and basis of expected collection |
3.7 Other receivables derecognized due to the transfer of financial assets
None
3.8 Assets and liabilities arising from transferring other receivables and continuing to be involvedNone
3. Long-term equity investment
Unit: RMB
Item | Closing balance | Opening balance | ||||
Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
Investment in subsidiaries | 18,582,307,907.14 | 18,582,307,907.14 | 18,582,307,907.14 | 18,582,307,907.14 | ||
Investment in associated enterprises and joint ventures | ||||||
Total | 18,582,307,907. | 18,582,307,907 | 18,582,307,907.14 | 18,582,307,907.14 |
14 | .14 |
(1) Investment in subsidiaries
Unit: RMB
Investee | Opening balance (Book value) | Increase and decrease in current period | Closing balance (Book value) | Closing balance of provision for impairment | |||
Additional investment | Investment reduction | Provision for impairment | Others | ||||
Offcn Ltd. | 18,500,000,000.00 | 18,500,000,000.00 | |||||
Yaxia Automobile Wufu Yawei Services Co., Ltd. | 23,000,000.00 | 23,000,000.00 | |||||
Yaxia Automobile Ningguo Driver Training School | 17,474,782.14 | 17,474,782.14 | |||||
Yaxia Automobile Huangshan Fudi Services Co., Ltd. | 5,000,000.00 | 5,000,000.00 | |||||
Yaxia Automobile Chaohu Kaixuan Services Co., Ltd | 5,000,000.00 | 5,000,000.00 | |||||
Yaxia Automobile Bozhou Driver Training School | 20,000,000.00 | 20,000,000.00 | |||||
Yaxia Automobile Suzhou Bokai Services Co., Ltd. | 11,833,125.00 | 11,833,125.00 | |||||
Shaanxi Offcn | 0.00 |
Education Tech. Co. Ltd. | |||||||
Beijing Offcn Future Education Tech. Co. Ltd. | 0.00 | ||||||
Total | 18,582,307,907.14 | 18,582,307,907.14 |
(2)Investment in associated enterprises and joint ventures
Unit: RMB
Investor | Opening balance (Book value) | Increase and decrease in current period | Closing balance (Book value) | Closing balance of provision for impairment | |||||||
Additional investment | Investment reduction | Investment gains and losses recognized under the equity method | Other Comprehensive income adjustment | Other Equity changes | Declared cash dividends or profits | Provision for impairment | Others |
(3) Other statements
None
4. Revenue and cost of revenue
Unit: RMB
Item | Amount for the current period | Amount for the prior period | ||
Revenue | Cost of revenue | Revenue | Cost of revenue | |
Main business | ||||
Other businesses | 7,276,570.86 | 5,667,932.11 | 7,276,570.86 | 5,668,813.35 |
Total | 7,276,570.86 | 5,667,932.11 | 7,276,570.86 | 5,668,813.35 |
Income related information:
Unit: RMB
Contract Classification | Segment 1 | Segment 2 | Total |
Obligation performance related information:
NoneInformation related to the transaction price allocated to the remaining performance obligations:
The income from the unfulfilled or uncompleted obligation with signed contracts at the end of the reporting period:
RMB0.00 .
5. Investment income
Unit: RMB
Item | Amount for the current period | Amount for the prior period |
Income from long-term equity investments under cost method | ||
Income from long-term equity investments under equity method | ||
Investment income from the disposal of long-term equity investments | ||
Investment income from holding held-for-trading financial assets | ||
Investment income from disposal of held-for-trading financial assets | ||
Dividend income from holding other equity instrument investments | ||
Income from the remeasurement of the remaining equity at fair value after loss of control | ||
Interest income obtained during the holding period of debt investments | ||
Interest income obtained during the holding period of other debt investments | ||
Investment income from the disposal of other debt investments | ||
Financing income | 30,534.61 |
Total | 30,534.61 |
6. Others
NoneSection XVIII. Supplementary information
1. Details of current non-recurring gains and losses
√ Applicable □ Not applicable
Unit: RMB
Item | Amount | Explanation |
Profits or losses from the disposal of non-current assets | 162,043.59 | |
Tax refunds, reductions and exemptions with unauthorized approval or without formal approval documents | ||
Government subsidies included in the current profit and loss ( except the government subsidies closely related to the business of the enterprise, and fixed or quantified in accordance with national unified standards) | 169,304.01 | |
Capital occupation fees charged to non-financial enterprises included in the current profit and loss | ||
The income from the fair value of the investees’ identifiable net assets when the investment was obtained less the investment cost of the enterprise in subsidiaries, associates and joint ventures | ||
Non-monetary asset exchange gains and losses | ||
Profit or loss from entrusting others to invest or manage assets | 90,927,476.86 | |
Impairments provision for assets due to force majeure factors, such as natural disasters | ||
Debt restructuring gains and losses | ||
Enterprise restructuring costs, such as expenses for relocating employees, integration costs, etc. | ||
Gains and losses in excess of fair value resulting from transactions where the transaction price was significantly unfair | ||
Net profit or loss of the subsidiary for the current period from the beginning of the period to the date of business combination |
under common control | ||
Gains and losses from contingencies unrelated to the Company’s normal business operations | ||
In addition to the effective hedging business related to the Company’s normal business operations, gains and losses from the changes in the fair value of the holding of financial assets held for trading, derivative financial assets, financial liabilities held for trading, and derivative financial liabilities, and the investment income from the disposal of financial assets held for trading, derivative financial assets, financial liabilities held for trading, derivative financial liabilities and other debt investments | ||
Receivables and reversal of contract asset impairment reserves that are individually tested for impairment | ||
Gains and losses from external entrusted loans | ||
Gains and losses from changes in the fair value of Investment properties that are subsequently measured at the fair value model | ||
Impact of a one-off adjustment to the current profit and loss in accordance with the requirements of taxation, accounting and other laws and regulations on the current profit and loss | ||
Custody fee income from entrusted operations | ||
Non-operating income and expenses other than the above | -93,154.28 | |
Other profit and loss items in line with the definition of non-recurring profit and loss | 43,350,067.49 | |
Less:Amount impacted by income tax | ||
equity attributable to minority shareholders | ||
Total | 134,515,737.67 | -- |
Provide explanations for classifying non-recurring profit and loss items defined or listed in the ExplanatoryAnnouncement No. 1 forInformation Disclosures of the Company Issuing Securities Publicly – Non-recurring Profits and Losses, and forclassifying non-recurring profit and loss items listed in the Explanatory Announcement No. 1 for InformationDisclosures of the Company Issuing Securities Publicly – Non-recurring Profits and Losses as recurring profit andloss items.
□ Applicable √ Not applicable
2. Return on equity and earnings per share
Profit in the reporting period | Weighted average return on net assets (%) | Earnings per share | |
Basic earnings per share (RMB/share) | Diluted earnings per share (RMB/share) | ||
Net profit attributable to common shareholders of the Company | -9.00% | -0.04 | -0.04 |
Net profit attributable to common shareholders of the Company after deducting non-recurring gains and losses | -14.20% | -0.06 | -0.06 |
3. Differences in accounting data under Domestic and Overseas Accounting Standards
(1) Differences in net profit and net assets in financial reports disclosed in accordance with bothinternational accounting standards and Chinese accounting standards
□ Applicable √ Not applicable
(2) Differences in the financial report of net profits and net assets disclosed by Overseas AccountingStandards and China Accounting Standards
□ Applicable √ Not applicable
(3) Explanation of the differences in accounting data under domestic and overseas accounting standards.Names of overseas institutions shall be indicated if difference adjustments of data from overseas auditinstitutions are conductedNone
4. Others
None
Chapter XII Documents Available for Reference
I. The full text of 2020 Semi Annual Report signed by Wang Zhendong, the Company’s legal representative.II. The financial statement signed and sealed by the legal representative of the Company, the person in charge ofaccounting work and the person in charge of accounting department (accounting supervisor).III. The original copies of all the documents of the Company which have been disclosed in newspapersdesignated by the China Securities Regulatory Commission during the reporting period.IV. Other related documents.The place where the above-mentioned documents are maintained: the office of the Company’s Secretaryof the Board of Directors.