OFFCN EDUCATION TECHNOLOGY CO., LTD.
2022 Annual Report
Stock Code: 002607Stock Abbr.: OFFCN EDU
April, 2023
Chapter 1 Important Information, Table of Contents and DefinitionsThe Company’s Board of Directors, Supervisory Committee, directors, supervisors, and senior management herebyguarantee that the contents of the annual report are true, accurate, and complete, and that there are nomisrepresentations, misleading statements, or material omissions, and shall assume individual and joint legalliabilities.Wang Zhendong, the Company’s legal representative, Shi Lei, head in charge of accounting and Luo Xue, head ofthe accounting department (Accounting supervisor), declare that they warrant the truthfulness, accuracy andcompleteness of the financial report in the annual report.All directors attended the board meeting for reviewing this report.The forward-looking statements on future plans and development strategies involved in this report do not constitutea substantial commitment to investors. Investors are advised to invest rationally and pay attention to the potentialinvestment risks.The possible risks and countermeasures have been detailed in Section XI Forecast of the Company’s futuredevelopment of Chapter 3 Management Discussion and Analysis of this report. Investors are advised to pay attentionto the relevant contents.On December 25, 2021, the Company was filed and investigated by China Securities Regulatory Commission (CSRC)on suspicion of failing to disclose related party transaction information and violating the laws and regulations ofinformation disclosure. On April 27, 2022, the Company and the relevant parties received the official Decision ofAdministrative Penalty. The Anhui Securities Regulatory Bureau of the CSRC decided to give a warning to andimpose a fine on the Company and the relevant parties, and order the Company and the relevant parties to rectify thesituation. Specific information is stated in the announcement (No. 2022-032) disclosed on CNINFO(www.cninfo.com.cn) and other designated media.The Company plans not to distribute cash dividends, bonus shares, nor to increase share capital by converting capitalreserve.The English version of this report is provided together with the Chinese version. Should there be any inconsistencybetween the Chinese version and the English version, the Chinese version shall prevail.
Contents
Chapter 1 Important Information, Table of Contents and Definitions ...... 1
Chapter 2 Corporate Profile & Key Financial Indicators ...... 5
Chapter 3 Management Discussion and Analysis ...... 10
Chapter 4 Corporate Governance ...... 35
Chapter 5 Environmental and Social Responsibilities ...... 60
Chapter 6 Significant Events ...... 61
Chapter 7 Share Changes and Shareholders ...... 87
Chapter 8 Preferred Shares ...... 96
Chapter 9 Corporate Bonds ...... 97
Chapter 10 Financial Statements ...... 98
Documents Available for ReferenceI. 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).II. The original copy of the audit report signed and sealed by the auditors and sealed by the accounting firm.III. The full text of 2022 Annual Report signed by Wang Zhendong, the Company’s legal representative.IV. The original copies of all the documents of the Company which have been disclosed in newspapers designatedby the China Securities Regulatory Commission during the reporting period.V. The place where the above-mentioned documents are maintained: the office of the Company’s Secretary of theBoard of Directors.
Definitions
| Term(s) | Definition |
| The listed Company, The Company, Offcn Edu | Offcn Education Technology Co., Ltd. |
| 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 Corporation | Articles of Corporation of Offcn Education Technology Co., Ltd. |
| Yuan, 10 thousand yuan, 100 million yuan | RMB yuan, RMB 10 thousand yuan, RMB 100 million yuan |
| 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. |
| Aerospace Industry | Beijing Aerospace Industry Investment Fund (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 undertake 80,000,000 shares of the listed Company transferred by Yaxia Industrial. |
| Yaxia Industrial | Anhui Yaxia Industrial Co., Ltd. |
Chapter 2 Corporate Profile & Key Financial IndicatorsSection I. Corporate profile
| Stock Abbreviation | OFFCN EDU | Stock Code | 002607 |
| Changed Stock Abbreviation (if any) | / | ||
| Listed Stock Exchange | Shenzhen Stock Exchange | ||
| Chinese Name of the Company | 中公教育科技股份有限公司 | ||
| Chinese Name Abbreviation of the Company | 中公教育 | ||
| English Name of the Company (if any) | Offcn Education Technology Co., Ltd. | ||
| English Name Abbreviation of the Company (if any) | OFFCN EDU | ||
| Legal Representative of the Company | Wang Zhendong | ||
| Registered Address | Yaxia Automobile City, Yijiang North Road, Jiujiang District, Wuhu City, Anhui Province | ||
| Zip Code of Registered Address | 241000 | ||
| Changed Registered Address of the Company (if any) | / | ||
| Office Address | Block B, Hanhua Century Mansion, No.23 Xueqing Road, Haidian District, Beijing | ||
| Zip Code of Office Address | 100089 | ||
| Company Website | http://www.offcn.com | ||
| ir@offcn.com | |||
Section II. Contact information
| Board Secretary | Securities Affairs Representative | |
| Name | Gui Hongzhi | Gu Pan |
| Address | Block B, Hanhua Century Mansion, No.23 Xueqing Road, Haidian District, Beijing | Block B, Hanhua Century Mansion, No.23 Xueqing Road, Haidian District, Beijing |
| Tel. | 010-83433677 | 010-83433688 |
| Fax | 010-83433666 | 010-83433666 |
| ir@offcn.com | ir@offcn.com |
Section III. Information disclosure and location of Annual Report
| Company’s Designated Information Disclosure Media | Securities Times, Shanghai Securities News and China Securities Journal |
| Website Designated by the China Securities Regulatory Commission for Publishing the Annual Report | http://www.cninfo.com.cn |
| Place Where the Annual Report is Available for Inspection | Office of Secretary of the Board |
Section IV. Registration Changes
| Organization Code | 91340200711040703A |
| Changes in Main Business Since the Company’s Listing (if any) | None |
| Change of Previous Controlling Shareholders (if any) | None |
Section V. Other relevant information
Accounting firm hired by the Company
| Accounting Firm Name | Baker Tilly China Certified Public Accountants (LLP) |
| Office Address of the Accounting Firm | No.12 Building, Foreign Cultural and Creative Garden, No.19 Chegongzhuang West Road, Haidian District, Beijing, China |
| Signing Accountants’ Names | Zhou Baiming, Li Qiang |
Sponsor institution engaged by the Company to perform continuous supervision duties during the reporting period
□ Applicable √ Not applicable
Financial advisor engaged by the Company to perform continuous supervision duties during the reporting period
□ Applicable √ Not applicable
Section VI. Key Accounting Information and Financial Indicators
Does the Company need to adjust its financial data retrospectively or restate its accounting data of previous year?
□ Yes √ No
| Year 2022 | Year 2021 | Increase/Decrease over the previous year | Year 2020 | |
| Operating income (RMB yuan) | 4,824,814,105.43 | 6,911,723,331.79 | -30.19% | 11,202,494,295.04 |
| Net profit attributable to shareholders of the listed Company (RMB yuan) | -1,102,059,818.43 | -2,369,509,039.00 | 53.49% | 2,304,357,742.74 |
| Net profit after deducting non-recurring profits and losses attributable to shareholders of the listed Company (RMB yuan) | -1,113,077,251.50 | -2,485,630,452.04 | 55.22% | 1,867,289,479.85 |
| Net cash flow from operating activities (RMB yuan) | 787,191,958.28 | -4,097,961,548.90 | 119.21% | 4,882,469,101.91 |
| Basic earnings per share (RMB yuan/share) | -0.18 | -0.38 | 52.63% | 0.37 |
| Diluted earnings per share (RMB yuan/share) | -0.18 | -0.38 | 52.63% | 0.37 |
| Weighted average return on net assets | -82.59% | -76.88% | -5.71% | 66.15% |
| Year End 2022 | Year End 2021 | Increase/Decrease Over Previous Year End | Year End 2020 | |
| Total assets (RMB yuan) | 8,027,414,353.26 | 10,305,183,525.70 | -22.10% | 14,418,850,027.27 |
| Net assets attributable to shareholders of the listed Company (RMB yuan) | 779,933,935.77 | 1,888,818,754.20 | -58.71% | 4,275,127,793.20 |
The lower of the net profit of the Company before and after deduction of non-recurring profits and losses for the mostrecent three financial years is negative, and the audit report of the most recent year shows that there are uncertaintieson the Company’s ability to continue operations
□ Yes √ No
The lower of the net profit before and after deduction of non-recurring profits and losses is negative
√ Yes □ No
| Item | Year 2022 | Year 2021 | Note |
| Operating income (RMB yuan) | 4,824,814,105.43 | 6,911,723,331.79 | None |
| Deduction from operating income (RMB yuan) | 22,965,218.28 | 51,440,960.49 | In this reporting period, the deductions of operating income include: Deduction of hotel income RMB 17,852,200.26; Deduction of house leasing income RMB 1,602,191.15; Deduction of exhibition income RMB 2,647,169.74; Deduction of custody income RMB 28,301.89; Deduction of other income RMB 835,355.24. |
| Operating income after deduction (RMB yuan) | 4,801,848,887.15 | 6,860,282,371.30 | In this reporting period, the deduction of operating income includes: Deduction of hotel income RMB 17,852,200.26; Deduction of house leasing income RMB 1,602,191.15; Deduction of exhibition income RMB 2,647,169.74; Deduction of custody income RMB 28,301.89; Deduction of other income RMB 835,355.24. |
Section VII. Differences in accounting data under domestic and overseas accounting standards
1. Differences between net profits and net assets disclosed in the financial reports in accordance with Chineseaccounting standards and international accounting standards
□ Applicable √ Not applicable
There is no difference between the net profits and net assets disclosed in accordance with Chinese accountingstandards and those disclosed in accordance with international accounting standards in the reporting period.
2. Differences between net profits and net assets disclosed in the financial reports in accordance with Chineseaccounting standards and overseas accounting standards
□ Applicable √ Not applicable
There is no difference between the net profits and net assets disclosed in accordance with Chinese accounting standards and thosedisclosed in accordance with overseas accounting standards in the reporting period.
Section VIII. Quarterly Key Financial Indicators
Unit: RMB
| The First Quarter | The Second Quarter | The Third Quarter | The Fourth Quarter | |
| Operating income | 1,212,740,311.93 | 1,013,964,650.18 | 1,667,177,321.53 | 930,931,821.79 |
| Net profit attributable to shareholders of the listed Company | -463,824,594.93 | -427,107,115.40 | 68,240,054.31 | -279,368,162.41 |
| Net profit after deducting non-recurring profits and losses attributable to shareholders of the listed Company | -469,727,159.08 | -433,912,145.18 | 62,707,787.41 | -272,145,734.65 |
| Net cash flow from operating activities | 598,889,061.73 | 434,093,349.59 | 556,656,455.57 | -802,446,908.61 |
Do the above financial indicators or their total differ significantly from those stated in the Company’s disclosedquarterly and semi-annual reports?
□ Yes √ No
Section IX. Non-Recurring Profits and Losses
√ Applicable □ Not applicable
Unit: RMB
| Item | Year 2022 | Year 2021 | Year 2020 | Note |
| Profits or losses on disposal of non-current assets (including offsetting amount for the provision of | -9,500,665.47 | -136,455.49 | 162,043.59 |
| impairment of assets) | ||||
| Government grants included in current profit or loss (except those closely related to the Company's normal business operations, which are in accordance with national policies and continuously enjoyed in accordance with certain standards or quotas) | 27,446,041.19 | 27,496,339.83 | 20,128,697.09 | |
| Capital occupation fees charged to non-financial enterprises included in current profit and loss | 13,192,187.13 | |||
| Profit or loss from entrusting others to invest or manage assets | 8,152,962.12 | 56,955,660.58 | 180,223,310.57 | |
| Except the effective hedging business related to the Company’s normal business operations, profits or losses on changes in fair value arising from the possession of transactional financial assets and transactional financial liabilities; and the investment income from the disposal of transactional financial assets, transactional financial liabilities and financial assets available for sale | -6,026,850.74 | -21,490,322.52 | 20,984,385.76 | |
| Custody income from entrusted operations | 28,301.89 | 226,415.10 | 226,415.09 | |
| Other non-operating income and expenses except for the items above | -4,778,597.36 | 16,837,313.42 | -629,138.85 | |
| Other profit or loss items that meet the definition of non-recurring profits and losses | 60,675,060.38 | 280,283,117.41 | ||
| Less: Impact on income tax | 4,303,758.56 | 24,442,598.26 | 76,183,536.19 | |
| Impact on minority shareholders’ equity (after tax) | 1,319,218.71 | |||
| Total | 11,017,433.07 | 116,121,413.04 | 437,068,262.89 | -- |
Details of other profit and loss items that meet the definition of non-recurring profits or losses.
□Applicable √ Not applicable
There is no other profit and loss items that meet the definition of non-recurring profits or lossesProvide explanations for classifying items of non-recurring profits or losses defined or listed in the ExplanatoryAnnouncement No. 1 for Information Disclosures of the Company Issuing Securities Publicly — Non-recurringProfits and Losses as items of recurring profits or losses.
□ Applicable √ Not applicable
The Company has not classified non-recurring profit or loss items defined or listed in the Explanatory AnnouncementNo. 1 for Information Disclosures of the Company Issuing Securities Publicly — Non-recurring Profits and Lossesas recurring profit or loss items in the reporting period.
Chapter 3 Management Discussion and AnalysisSection I. The industry situation of the Company during the reporting period
1. The industry is under short-term pressure, but the demand expansion remains unchanged..In 2022, due to the complex and ever-changing domestic and international situations and multiple unexpectedfactors, the demand and supply of the recruitment and training industry have also been greatly affected. However,with the gradual recovery of the market economy at the end of the fourth quarter, industry demand has been boosted.Urbanization, equalization of public services, large-scale renewal of working personnel and other elements are majortrends in economic and social development, which lead to a long-term growth in the number of civil servantsrecruitment and examinees. In the “14th Five-Year Plan” for Public Services, jointly issued by the NationalDevelopment and Reform Commission and other related departments, the goal of continuously promoting theequalization of basic public services is clarified, and social forces are encouraged to focus on strengthening the supplyof inclusive and standardized services in fields such as elderly care, childcare, education, and medical care. As aresult, the market demand from a wide range of cities, counties, and even towns is further released, and the long-tailtrend of the market will continue to strengthen.
2. The “14th Five-Year Plan” requires that the quality and capacity of education, medical care, elderlycare and other services be greatly improved..In terms of education, the “14th Five-Year Plan” requires to greatly improve education equality and quality;promote the popularization of higher education, create more than 60 million new jobs in cities and towns; build,renovate or expand 20,000 kindergartens to increase enrollments by over 4 million for ordinary families; and build,renovate or expand more than 4,000 primary and secondary schools. In terms of medical and health care, it requiresto expand disease prevention and control bases, build national and regional medical centers, and strive to upgrade500 county-level hospitals to meet the facilities and service capabilities of top-tier hospitals. In terms of elderly careservice, 500 districts and counties will be supported in building a model community home elderly care servicenetwork, about 300 training and convalescent institutions will be supported in transformation into inclusive elderlycare institutions, and more nursing beds will be provided for about 1,000 public elderly care institutions. In terms ofchildcare service, 150 cities will be supported to develop childcare service with social resource, and more than500,000 exemplary inclusive childcare enrollments will be added. All of these investments mentioned above willstrongly promote the sustainable growth of the recruitment sectors, especially the recruitment sectors of teachers,medical staff and community workers.
3. Policy support for vocational education is enhanced.
The year of 2022 is a crucial year for improving the quality and excellence of vocational education, as well asfor tackling the challenges of reform. It is also a milestone year in the development of vocational education. Thisyear, a series of favorable policies were introduced at the national level to promote the development of vocationaleducation:
In May 2022, the newly revised Vocational Education Law of the People’s Republic of China was officiallyimplemented, marking the first major overhaul of the law since its promulgation and implementation in 1996. Thislaw specifies the need to coordinate the development of vocational education and general education.In September 2022, the Ministry of Education and Ministry of Human Resources and Social Security of the
People’s Republic of China officially released the new version of the Introduction to the Majors of VocationalEducation and Occupational Classification System of the People’s Republic of China (2022). The new version ofIntroduction to the Majors of Vocational Education unifies the framework of introduction to majors in secondaryvocational schools, vocational colleges, and vocational undergraduate education, covering all 19 major categories ofthe new version of the professional catalog, including 1,349 majors in 97 major sub-categories.
In October 2022, the report of the 20th National Congress of the Communist Party of China proposed a newdiscourse on vocational education. The report emphasized the need to promote collaborative innovation in vocationaleducation, higher education and continuing education, to promote integration between vocational education andgeneral education, between industry and education, and between science and education, and to better position varioustypes of vocational education. For the first time, the report explicitly included “master craftsmen” and “high-skilledworkers” in the national strategic talent list.In December 2022, the General Office of the Central Committee of the Communist Party of China and theGeneral Office of the State Council issued Opinions on Deepening the Reform of Modern Vocational EducationSystem Construction, proposing strategic tasks including exploring new models of provincial system construction,creating municipal industry-education consortium and industry-education integration communities, and striving tocomplete key work in five areas and complete condition-guarantee work in four areas, including improving keyabilities of running schools, building a team of “Academic-Practical Teachers”, and constructing practice center forintegrating regional industry and education.
4. Main industry characteristics and cyclical characteristics
The institutions of vocational education distribute vastly all over the country. Such situation lifts thebarriers to competition in this field. The demand of vocational education distributes vastly in every province andevery city, especially in the prefecture-level cities and the counties. Almost every county has a vocational high school,and every prefecture-level city has vocational colleges. The recruitment demand for civil servants also comes in largenumbers from prefecture-level cities and counties. This has given rise to a large number of local small and medium-sized training institutions, and provided large institutions with a wide space to expand their channel networks, whilemaking management difficulties and barriers to competition suddenly higher.The training for civil servant recruitment tests is seasonal. For trainees, the 1-2 years before or after theirgraduation are the key period to take training classes for the recruitment tests. The national civil servant test takesplace once a year, and the provincial civil servant examinations basically take place once a year, while a few provinceswill have another joint examination in the second half year. And the recruitment of public institution employees andteachers are carried out according to the needs of the provinces and cities, which are distributed in each monththroughout the year uncertainly. The documents of recruitment plan are of a great amount.
This seasonal fluctuation of recruitment has caused major growth bottlenecks for small and medium-sizedtraining institutions and has also provided large institutions with continuous motivation to constantly challenge thescale boundary. With the rapid increase in examination categories and business sectors, large institutions willincreasingly enjoy the benefits of scale effects and obtain a more sound resource allocation structure. In recent years,the momentum of recruitment examinations has switched to new areas such as public institutions, teachers andcomprehensive recruitment, bringing rapid concentration of market share to leading enterprises.Section II. The Company’s main business during the reporting period
Offcn Edu is a large-scale multi-category vocational education institution, and it is also the pioneer and leaderin the field of public service recruitment examination training in the country. The Company bravely undertakes themission of the times, continues to create new markets, and serves the society with kindness and altruism.
Offcn Edu mainly serves knowledge-based employment population including college students, universitygraduates, and various professionals, aged 18 to 45. This huge group of hundreds of millions of people is spreadthroughout the country, cities and towns at all levels and in all walks of life. Employment and vocational abilityimprovement are their two core demands.
For hundreds of millions of knowledge-based people and based on the two core demands, the Company’s mainbusiness covers three major sectors including training for public service recruitment examinations, college and highinstitution enrollment examinations and vocational ability enhancement, and it provides more than 100 categories ofcomprehensive vocational training service. The Company has more than 1,000 outlets across the country, coveringmore than 300 prefecture-level cities.
After a long-term exploration and accumulation, Offcn Edu has owned a large-scale full-time R&D team ofmore than 1,600 people, a large-scale teaching team of more than 9,000 teachers, and a staff of more than 20,000people. Relying on its outstanding team execution and nationwide vertical integrated fast response capability, theCompany has developed into an innovation-driven enterprise platform.
Section III. Analysis of the Company’s core competitiveness
The Company's core competitiveness lies in the formation of an enterprise platform driven by the capability of
vertical integrated fast response. The key driving factors are as follows:
1. Clustered professional R&D continuously outputs momentum for innovation.At 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 in 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 than 1,600people has formed. With the expansion of categories and the involvement of different sectors, the Company'sprofessional R&D not only achieves the continuous division of labor under the scale effect, but also constantly createsR&D cluster effect of collaboration between categories, which greatly improves the efficiency of R&D, especiallythe grafting efficiency of using stock R&D resources in new categories and new businesses.
2. Vertical integrated fast response capability supports the Company’s sustainable operation structurally andefficiently.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 fast 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,management and learning effect far above the average can be realized.Vertical integrated corporate structure can not only realize the high efficiency of operation, but also beeffectively compatible with the management impact brought by rapid business category expansion. So investment inand innovation on this corporate structure has always been a central part of the management reform. At present, OffcnEdu has established more than 1,000 business outlets covering 300 prefecture-level cities. Simultaneously, the
headquarters command center continues to seek the scale effect of management with the help of management reformand digital operation. In recent years, Offcn Edu has also continuously invested in the construction of large-scaleone-stop bases for food, housing and learning to promote the realization of large-scale factory operation on theteaching sites.
3. 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 needs forrapid expansion of categories. The other reason lies in the great adaptability of vertical integrated fast response systemto digitization. After the system was integrated with digitization in depth, it generated higher operating efficiency andsignificantly improved the foreground and background response frequency from units of days to a level close to “real-time situational awareness”, which enhanced the Company’s core competitiveness based on speed economy
4. The values of kindness and altruism are ubiquitous and flourishing.
As 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 taken thelead to set an example, influenced the staff level by level, and unswervingly implemented it in the operation, makingthe values of Offcn Edu ubiquitous and flourishing in the enterprise. This distinctive and tangible corporate cultureallows the Company to maintain strong organizational cohesion.
5. Offcn Edu strives to strengthen the Party's construction to promote the healthy and vigorous development
of the Company.From the establishment of the Party committee in 2018 to the founding of the first Party school of non-public-owned enterprise in 2019, the Party committee of Offcn Edu has fully utilized the Company’s advantages ofknowledge, theory, and technology and actively promoted employees and students to implement the Party’s politicalroutes, principles, and policies. Meanwhile, Offcn Edu focuses on the integration of the Party building of non-publicenterprises and corporate culture cultivation to promote the healthy and vigorous development of the enterprise.As of December 31, 2022, the Company had about 5,000 Party members, accounting for more than one-fifth ofthe total number of employees.
Section IV. Core business analysis
1. Overview
(1)The Company’s losses have significantly narrowed.
In 2022, the situation in the education and training industry is even more severe than that in 2021. Due to thecomplex and ever-changing domestic and international situations and multiple unexpected factors, the developmentenvironment of the education and training industry continues to be under pressure, and the industry remains sluggish.At the Company level, due to multiple unexpected factors, the Company’s directly operated branches and learningcenters in various regions were closed temporarily, causing significant interference in enrollment and teaching.On a quarterly basis, the civil servant provincial joint examination in various provinces, originally scheduledfor late March, has been postponed to early July, and there have also been delays in the interview of national civilservant examinations, teacher recruitment examinations and recruitment examination for public institutions. Thoseuncertainties in business environment have had a significant adverse impact on the Company’s business receipts andrecognition of revenue in the first half of the year. But in the third quarter, the Company took various effectiveoperational measures and optimized management to turn losses into profits. However, in the fourth quarter, due totravel restrictions, the Company’s face-to-face teaching business was almost completely suspended. Due to rigidoperating expenses such as labor and venue costs, the fourth quarter suffered losses.
However, during the reporting period, although greatly impacted by the harsh market environment, the Companycarried out a series of annual business boost plans such as internal optimization to reduce costs and increase efficiency,and structural adjustments of products, resulting in a significant reduction in losses of annual performance comparedwith that of previous years. In the next stage, the liberalization of policies and the gradual recovery of the economy
will user in new opportunities for the reconstruction of the global economic order, and will also bring us confidence.In order to further improve the overall business performance, the Company has launched the “Recovery andConsolidation Action”, addressing the problems in business management from aspects such as organizationalstructure, employee motivation, product innovation, and marketing methods, so as to gradually restore and stabilizethe Company’s performance.During the current reporting period, the Company achieved a total operating income of RMB 4,824,814,105.43yuan, a 30.19% year-on-year decrease. Net profit attributable to shareholders of the listed Company was RMB -1,102,059,818.43 yuan, a decreased loss of 53.49% from the previous year. After deducting non-recurring profits andlosses, net profits attributable to shareholders of the parent company was RMB -1,113,077,251.50 yuan, a decreasedloss of 55.22% from the previous year.The key operating resources and performance indicators during the reporting period are stated in the table below:
| Item | Indicators | At the end of the reporting period | At the end of last year | The increase or decrease at the end of the reporting period from the end of the previous year |
| Operating resources | Directly-operated branches | 1,113 | 1,508 | -26.19% |
| Employees | 22,652 | 36,143 | -37.33% | |
| R&D personnel | 1,694 | 2,452 | -30.91% | |
| Teachers | 9,024 | 14,590 | -38.15% | |
| Item | Indicators | The current reporting period | The same period of last year | The increase or decrease in the reporting period from the same period of the previous year |
| Business and profits | Revenue of face-to-face training (RMB yuan) | 2,880,513,016.89 | 4,380,182,147.02 | -34.24% |
| Revenue of online training (RMB yuan) | 1,921,335,870.26 | 2,480,100,224.28 | -22.53% | |
| Number of training participants | 3,087,140.00 | 3,849,035 | -19.79% | |
| Operating income (RMB yuan) | 4,824,814,105.43 | 6,911,723,331.79 | -30.19% | |
| Net profits attributable to shareholders of the listed Company (RMB yuan) | -1,102,059,818.43 | -2,369,509,039.00 | 53.49% |
(2) Multiple measures were taken to reduce costs and increase efficiency.
During the reporting period, in the face of an unfavorable business environment, the Company reasonablyoptimized its organizational structure and closed ineffective branches. At the end of the reporting period, the totalnumber of directly operated branches of the Company was 1,113, a decrease of 395 from 1,508 in 2021 and a year-on-year decrease of 26.19%. The closure of the branches was also accompanied by the optimization of staff. At theend of the reporting period, the total number of employees in the Company was 22,652, a decrease of 37.33% on anannual basis.In addition, the Company has made efforts to reduce costs and expenses. During the reporting period, theCompany’s total operating costs decreased by 37.63% year-on-year, sales expenses decreased by 35.44% year-on-year, and management expenses decreased by 28.87% year-on-year. Significant results have been achieved oncontrolling expenses.
(3) Vocational education business has achieved phased practical results.
In 2022, the Company integrated internal resources and continued to explore new vocational educationbusinesses, achieving some practical results in school-enterprise cooperation and deepening the integration betweenindustry and education. During the reporting period, the Company jointly established majors with colleges in Henan,Shaanxi, Sichuan, Hunan, and other regions, and the number of trainees has reached nearly 4000. Among them, themajor of AI technology application jointly built with Puyang Petrochemical Vocational and Technical College, themajor of software testing jointly built with Kaifeng Information Engineering School, the major of UI/UE interactiondesign jointly built with Shanxi Dachang Vocational High School, the major of animation jointly built with ChangshaNanfang Professional College, and the major of e-commerce jointly built with Sichuan University Jinjiang Collegehave all respectively developed into distinctive major of their colleges.At present, the integration between industry and education, as well as the collaborative education betweenschools and enterprises, has not yet formed a stable and mutually beneficial long-term mechanism, and resourcesfrom the demand side of enterprises and from supply side of education are relatively scarce. Therefore, during thereporting period, the Company sought cooperation with Alibaba.com, New Higher Education Group, German IBEducation, PowerLeader, Huaxia Class and other enterprises in the field of enhancing employment and skilldevelopment to create cost-effective and high-quality supply and drive demand expansion through innovation ofsupply side.
2. Revenue and cost
(1) Composition of revenue
Unit: RMB yuan
| 2022 | 2021 | Increase/ Decrease over the previous year | |||
| Amount | Proportion of Revenue | Amount | Proportion of Revenue | ||
| Revenue | 4,824,814,105.43 | 100% | 6,911,723,331.79 | 100% | -30.19% |
| Sectors | |||||
| Educational training | 4,801,848,887.15 | 99.52% | 6,860,282,371.30 | 99.26% | -30.01% |
| Others | 22,965,218.28 | 0.48% | 51,440,960.49 | 0.74% | -55.36% |
| Categories of product | |||||
| Training for Civil Servant Test | 1,923,536,101.12 | 39.87% | 3,368,861,256.89 | 48.74% | -42.90% |
| Training for Public Institution Test | 879,502,420.01 | 18.23% | 1,019,282,962.72 | 14.75% | -13.71% |
| Training for Teachers’ Recruitment Test | 676,771,588.97 | 14.03% | 802,387,194.18 | 11.61% | -15.66% |
| Training for other public services test and new businesses | 1,322,038,777.05 | 27.40% | 1,669,750,957.51 | 24.16% | -20.82% |
| Others | 22,965,218.28 | 0.48% | 51,440,960.49 | 0.74% | -55.36% |
| Regions | |||||
| Northeast China | 495,256,554.30 | 10.26% | 891,663,394.84 | 12.90% | -44.46% |
| North China | 800,112,470.69 | 16.58% | 1,172,797,204.47 | 16.97% | -31.78% |
| East China | 1,301,233,313.99 | 26.97% | 1,687,969,176.80 | 24.42% | -22.91% |
| Middle China | 605,537,171.26 | 12.55% | 850,590,365.27 | 12.31% | -28.81% |
| South China | 449,723,710.15 | 9.32% | 571,708,625.26 | 8.27% | -21.34% |
| Southwest Region | 622,638,791.52 | 12.90% | 907,397,421.66 | 13.13% | -31.38% |
| Northwest China | 527,346,875.24 | 10.93% | 778,156,183.00 | 11.26% | -32.23% |
| Others | 22,965,218.28 | 0.48% | 51,440,960.49 | 0.74% | -55.36% |
| Sales models | |||||
| Direct sales | 4,824,814,105.43 | 100.00% | 6,911,723,331.79 | 100.00% | -30.19% |
(2) Particulars of sectors, products, regions and sales models that account for more than 10% of the operatingrevenue or profits
□ Applicable √ Not applicable
(3) Is the Company’s goods sales income greater than that of labor services?
□ Yes √ No
(4) Fulfillment of significant sales contracts and purchase contracts signed by the Company as of the reportingperiod
□ Applicable √ Not applicable
(5) Composition of operating cost
Categories of industry
Unit: RMB yuan
| Industries | Items | 2022 | 2021 | Year-on-year Increase/ Decrease | ||
| Amount | Proportion of operating costs | Amount | Proportion of operating costs | |||
| Education training | Cost of operation | 2,958,900,025.02 | 99.30% | 4,945,732,913.85 | 99.04% | 0.26% |
| Others | Cost of operation | 20,887,285.53 | 0.70% | 47,984,449.73 | 0.96% | -0.26% |
StatementsNone
(6) Did the scope of consolidation change during the reporting period?
√ Yes □ No
| Full name of the subsidiary | Proportion of shareholding (%) | Reason for changes |
| 1. Sichuan Offcn Luming Cultural Media Co., Ltd | 100.00 | New establishment |
2. Beijing Offcn Shengjing Education Technology Co., Ltd.
| 2. Beijing Offcn Shengjing Education Technology Co., Ltd. | 100.00 | New establishment |
| 3.Henan Offcn Education Consulting Co., Ltd. | 100.00 | New establishment |
| 4. Lhasa Offcn Training School Co., Ltd. | 100.00 | New establishment |
5. Tianjin Offcn Technology Co., Ltd.
| 5. Tianjin Offcn Technology Co., Ltd. | 100.00 | New establishment |
| 6. Tianjin Jinnan Offcn Lexue Training School Co., Ltd. | 100.00 | New establishment |
7. Tianjin Baodi Offcn Lexiang Training School Co., Ltd.
| 7. Tianjin Baodi Offcn Lexiang Training School Co., Ltd. | 100.00 | New establishment |
| 8. Tianjin Jizhou Offcn LechengTraining School Co., Ltd. | 100.00 | New establishment |
| 9. Nantong Sigang Huizhi Technology Co., Ltd. | 51.00 | New establishment |
(7) Major changes or adjustments to the Company’s business, products, or services during the reportingperiod
□ Applicable √ Not applicable
(8) Major customers and major suppliers
Information about major customers
| Total sales amount of the top five customers (RMB yuan) | 536,968.92 |
| The ratio of the total sales amount of the top five customers to the total annual sales amount | 0.01% |
| The ratio of the sales amount of related parties in the sales amount of the top five customers to the total annual sales amount | 0.00% |
Information about the top 5 customers
| SN | Customer | Sales amount (RMB) | Ratio to the total annual sales amount |
| 1 | Customer 1 | 120,871.84 | 0.00% |
| 2 | Customer 2 | 113,592.23 | 0.00% |
| 3 | Customer 3 | 105,514.56 | 0.00% |
| 4 | Customer 4 | 104,757.28 | 0.00% |
| 5 | Customer 5 | 92,233.01 | 0.00% |
| Total | -- | 536,968.92 | 0.01% |
Other information regarding major customers
□ Applicable √ Not applicable
Information regarding major suppliers
| Total purchase amount of the top five suppliers (RMB yuan) | 117,972,114.27 |
| The ratio of the total purchase amount of the top five suppliers to the total annual purchase amount | 8.73% |
| The ratio of the purchase amount of related parties in the purchase amount of the top five suppliers to the total annual purchase amount | 0.00% |
Information regarding the top 5 suppliers
| SN | Supplier | Purchase Amount (RMB) | Ratio to the total annual purchase amount |
| 1 | Supplier 1 | 59,200,000.00 | 4.38% |
| 2 | Supplier 2 | 24,888,088.11 | 1.84% |
| 3 | Supplier 3 | 16,024,439.86 | 1.19% |
| 4 | Supplier 4 | 11,800,000.00 | 0.87% |
| 5 | Supplier 5 | 6,059,586.30 | 0.45% |
| Total | -- | 117,972,114.27 | 8.73% |
Other information about major suppliers
□ Applicable √ Not applicable
3. Expenses
Unit: RMB yuan
| Year 2022 | Year 2021 | Year-on-year Increase/ Decrease | Description on major changes | |
| Sales expenses | 1,359,096,659.05 | 2,105,098,912.06 | -35.44% | Mainly due to the decrease of market operating expenses and labor expenses with the optimization of sales personnel, by taking measures to reduce cost and increase efficiency. |
| Management expenses | 935,818,353.08 | 1,315,643,022.03 | -28.87% | Mainly due to the decrease of operation and management expenses and labor expenses with the optimization of management personnel, by taking measures to reduce cost and increase efficiency. |
| Financial expenses | 238,521,491.09 | 491,614,471.98 | -51.48% | Mainly due to the decrease on bank loan interest and financial institution fees during the current period. |
| R&D expenses | 592,208,850.10 | 901,469,538.57 | -34.31% | The company's cost reduction and efficiency increase resulted in a reduction in expenses, optimization of R&D personnel, and corresponding reduction in labor expenses. Mainly due to the decrease of R&D expenses and labor expenses with the optimization of R&D personnel, by taking measures to reduce cost and increase efficiency. |
4. R&D investment
√ Applicable □ Not applicable
| Name of Projects | Purpose of projects | Progress of projects | Goals to be achieved | Potential influence on the Company’s development |
| Basic research and development of curriculum system | Enrich the Company's curriculum system to achieve a diversified curriculum portfolio | Obtained partial objective | Enrich the Company's curriculum system to achieve a diversified curriculum portfolio | Provide different product portfolios to enhance students’ learning outcome and to improve the Company’s core competitiveness |
| Research and development of infrastructure for | By developing platform systems and client APPs, provide technical support for | Obtained partial objective | By developing platform systems and client APPs, provide technical support for | Promote the deep matching of digital management and vertically integrated fast |
| digital operation | the transformation of business digitization | the transformation of business digitization | response system, seek for higher level of efficient fast response with the power of digital management, and further enhance the core competitiveness of the Company based on speed economy |
R&D staff
| 2022 | 2021 | Year-on-year Increase/ Decrease | |
| Numbers of R&D staff | 1,694 | 2,452 | -30.91% |
| Proportion of R&D staff | 7.48% | 6.78% | 0.70% |
| Education background of R&D staff | —— | —— | —— |
| Bachelor degree | 1,123 | 1,665 | -32.55% |
| Master degree | 567 | 778 | -27.12% |
| Others | 4 | 9 | -55.56% |
| Age of R&D staff | —— | —— | —— |
| Below 30 years old | 523 | 1,052 | -50.29% |
| 30-40 years old | 1,101 | 1,344 | -18.08% |
| Above 40 years old | 70 | 56 | 25.00% |
Investments in R&D
| Year 2022 | Year 2021 | Year-on-year Increase/ Decrease | |
| R&D investment amount (RMB yuan) | 592,208,850.10 | 901,469,538.57 | -34.31% |
| The proportion of R&D investment in revenue | 12.27% | 13.04% | -0.77% |
| Amount of capitalized R&D investment (RMB yuan) | 0.00 | 0.00 | 0.00% |
| The proportion of Capitalized R&D investment in R&D investment | 0.00% | 0.00% | 0.00% |
Reasons and effects of major changes in the composition of the Company's R&D personnel
□ Applicable √ Not applicable
Reason for a significant change of the proportion of total R&D investment in revenue from that of the last year
□ Applicable √ Not applicable
Reason and statement for the significant change in capitalization rate of R&D investment
□ Applicable √ Not applicable
5. Cash flow
Unit: RMB yuan
| Item | Year 2022 | Year 2021 | Year-on-year Increase/ Decrease |
| Sub-total of cash inflows from operating activities | 5,921,228,306.58 | 5,344,505,574.24 | 10.79% |
| Sub-total of cash outflows from operating activities | 5,134,036,348.30 | 9,442,467,123.14 | -45.63% |
| Net cash flows from operating activities | 787,191,958.28 | -4,097,961,548.90 | 119.21% |
| Sub-total of cash inflows from investing activities | 476,398,474.82 | 9,419,573,425.23 | -94.94% |
| Sub-total of cash outflows from investing activities | 223,604,195.85 | 7,679,034,155.42 | -97.09% |
| Net cash flows from investing activities | 252,794,278.97 | 1,740,539,269.81 | -85.48% |
| Sub-total of cash inflows from financing activities | 959,240,000.00 | 4,569,000,000.00 | -79.01% |
| Sub-total of cash outflows from financing activities | 3,588,146,347.44 | 6,191,808,200.47 | -42.05% |
| Net cash flows from financing activities | -2,628,906,347.44 | -1,622,808,200.47 | -62.00% |
| Net increase in cash and cash equivalents | -1,588,920,110.19 | -3,980,230,479.56 | 60.08% |
Main influencing factors of major year-on-year changes in relevant data
□ Applicable √ Not applicable
Reason for significant differences between the net cash flow from operating activities and the net profit of the Company during thereporting period
□ Applicable √ Not applicable
Section V. Non-core business analysis
√ Applicable □ Not applicable
Unit: RMB yuan
| Amount | Proportion of Total Profit | Reason | Sustainable or not | |
| Investment income | 9,804,270.34 | -0.76% | Uncertain | |
| Gains and losses from changes in fair value | -6,026,850.74 | 0.47% | Uncertain | |
| Non-operating expenses | 4,778,597.36 | -0.37% | Uncertain |
Section VI. Analysis of assets and liabilities
1. Major changes in asset composition
Unit: RMB yuan
| End of Year 2022 | Beginning of Year 2022 | Proportion of increase/ decrease | Major Changes | |||
| Amount | Proportion of total assets | Amount | Proportion of total assets | |||
| Monetary fund | 385,328,555.74 | 4.80% | 1,970,361,272.64 | 19.12% | -14.32% | Mainly due to the decrease in the Company's business receipts |
| Accounts receivable | 37,323,682.88 | 0.46% | 40,374,842.27 | 0.39% | 0.07% | No major changes during this period |
| Investment properties | 450,260.54 | 0.01% | 644,936,541.46 | 6.26% | -6.25% | Due to the transfer of leasing assets of the parent company back to fixed assets during this period |
| Long-term equity investment | 46,835,952.63 | 0.58% | 46,850,364.40 | 0.45% | 0.13% | No major changes during this period |
| Fixed assets | 1,970,536,339.75 | 24.55% | 1,770,372,338.85 | 17.18% | 7.37% | Due to the transfer of leasing assets of the parent company back to fixed assets during this period |
| Construction in progress | 323,273,645.99 | 4.03% | 294,785,678.31 | 2.86% | 1.17% | No major changes during this period |
| Right-of-use asset | 1,112,202,447.58 | 13.86% | 1,342,280,387.08 | 13.03% | 0.83% | No major changes during this period |
| Short-term borrowings | 3,152,945,812.59 | 30.60% | -30.60% | Mainly due to the repayment of bank borrowings during this period | ||
| Contract liabilities | 3,949,799,538.71 | 49.20% | 3,063,721,290.28 | 29.73% | 19.47% | Mainly due to the advanced provincial joint examination of civil servant recruitment in the previous year |
| Lease liabilities | 508,752,253.77 | 6.34% | 635,691,184.87 | 6.17% | 0.17% | No major changes during this period |
A high percentage of overseas assets
□ Applicable √ Not applicable
2. Assets and liabilities measured at fair value
√ Applicable □ Not applicable
Unit: RMB yuan
| Item | Opening balance | Profits and losses from the changes in fair value in current period | Accumulated changes in fair value attributed to equity | Provision for impairment in current period | Amount of purchase in the current period | Amount of sales in the current period | Others | Closing balance |
| Financial assets | ||||||||
| 1.Transactional financial assets (excluding derivative financial assets) | 376,986,621.74 | -6,026,850.74 | 116,241,028.16 | 459,520,799.16 | 27,680,000.00 | |||
| 4. Other equity investment | 130,400,000.00 | -9,100,000.00 | 121,300,000.00 | |||||
| Sub-total of financial assets | 507,386,621.74 | -6,026,850.74 | -9,100,000.00 | 116,241,028.16 | 459,520,799.16 | 148,980,000.00 | ||
| Total | 507,386,621.74 | -6,026,850.74 | -9,100,000.00 | 116,241,028.16 | 459,520,799.16 | 148,980,000.00 | ||
| Financial liabilities | 0.00 | 0.00 |
Other changesNoneWhether 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
Unit: RMB
| Item | Book value at the end of the period | Reasons for restriction |
| Monetary funds | 4,442,656.37 | Security deposit, dormant account/without reconciliation, judicial freeze and so on |
| Total | 4,442,656.37 |
Section VII. Analysis of Investments
1. General situation
√ Applicable □ Not applicable
| Investment amount in the reporting period (RMB) | Investment amount in the same period of the previous year (RMB) | Variation |
| 155,982,291.97 | 7,079,571,718.12 | -97.80% |
2. Significant equity investment obtained during the reporting period
□ Applicable √ Not Applicable
3. Significant non-equity investment ongoing during the reporting period
□ Applicable √ Not Applicable
4. Financial assets investment
（1）Securities investment
□ Applicable √ Not applicable
There is no securities investment during the reporting period of the company.
（2）Derivatives investment
□ Applicable √ Not Applicable
There is no derivatives investment during the reporting period of the Company.
5. Use of raised funds
□ Applicable √ Not Applicable
There is no use of raised funds during the reporting period of the Company.Section VIII. Sale of major assets and equity
1. Sale of major assets
□ Applicable √ Not Applicable
The Company did not sell any major assets during the reporting period.
2. Sale of major equity
□ Applicable √ Not Applicable
Section IX. Analysis of major holding and participating companies
√ Applicable □Not Applicable
Major subsidiaries and shareholding companies that affect the Company's net profit by more than 10%
Unit: RMB yuan
| Company name | Beijing Offcn Education Technology Co., Ltd |
| Company type | Subsidiary |
| Major business | Educational technology consulting, technology development, technical services, technology promotion, |
| technology transfer; educational consulting; cultural consulting; corporate management consulting; corporate investment consulting;computer technology training (not for national admissions); public relations services; hosting exhibition activities; organizing cultural and artistic exchange activities (excluding performances); conference services;design, production, agency, release of advertisements; publication wholesale; publication retail; operating telecommunications business; human resource services; radio and television program production; engaging in Internet cultural activities.(Market entities independently choose operating projects and carry out operating activities in accordance with the law; engage in Internet cultural activities, publication wholesale, publication retail, telecommunications business, radio and television program production, human resource services, and projects subject to approval in accordance with the law, and after approval by relevant departments, carry out operating activities in accordance with the approved content; shall not engage in operating activities that are prohibited or restricted by the state and this city’s industrial policies.) | |
| Registered capital | 90,000,000.00 |
| Total assets | 7,077,306,933.56 |
| Net assets | 53,157,808.82 |
| Revenue | 4,823,330,961.90 |
| Operating profit | 1,187,961,691.08 |
| Net profit | 1,008,816,015.96 |
Acquisition and disposal of subsidiaries during the reporting period
□ Applicable √ Not Applicable
Major holding and participating companiesThe Company's wholly-owned subsidiary, Beijing Offcn Education Technology Co., Ltd., achieved a revenue of RMB 4,823.30million in 2022, a decrease of 29.95% from 2021. The total operating cost in 2022 was RMB 6,056.08 million , a decrease of 37.77%from 2021. The operating loss in 2022 was RMB 1,008.82 million, a decrease of 55.26% from the loss in 2021. The loss in 2022mainly resulted from the postponement of the provincial joint examinations, periodic fluctuations of examinations in the education andtraining industry, tightening demand, and weakening willingness to attend training, etc. At the same time, Local outlets and learningcenters have been closed down in stages, and offline training has been stopped, which has affected the company’s businessdevelopment and performance achievement to a great extent, further resulting in the reduction of main business revenue. Meanwhile,the company strove to reduce all costs and expenses, adjusted the salary structure, evaluated the staff performance strictly, and thuseffectively controlled the personnel expenses; the number of class and the marketing activities were reduced, thus reducing theexpenses of hotel site and marketing. Because the reduction in total operating costs was greater than the reduction in operatingrevenue, the company’s operating loss in 2022 has decreased compared with the loss in 2021.Section X. Structured entities controlled by the Company
□ Applicable √ Not Applicable
Section XI. Forecast of the Company’s future development
1. Trends of the industry’s future development
(1) The status of vocational education in education system is enhancing..
In recent years, China’s industrial structure is undergoing transformation and upgrading. The government hasclearly proposed that great efforts should be made to promote the development of emerging industries with strategicimportance, and the proportion of modern service industry should be further increased. With rapid changes of theindustrial structure, the requirements from enterprises for the professional competence and comprehensive quality oftechnical personnel have gradually increased. New requirements for their practical ability have also been put forward.Traditional academic education can’t fully meet the new requirements.Besides, the government continues to enhance the efforts to develop vocational education. From thepromulgation and implementation of the newly revised Vocational Education Law of the People’s Republic of Chinain 2022 to the issuance of the Opinions on Deepening the Reform of Modern Vocational Education SystemConstruction, the report of the 20th National Congress of the Communist Party of China in 2022 emphasized “Wewill promote collaborative innovation in vocational education, higher education, and continuing education, promoteintegration between vocational education and general education, between industry and education, and betweenscience and education, and better position various types of vocational education”, and clearly included “mastercraftsmen” and “highly-skilled workers” into the ranks of national strategic talents. This will strongly promote thestatus of vocational education in the education system from the policy and institutional level.
(2) The continuous increase in the number of college graduates is an important indicator of the employmentsituation.
Usually, a faster growing economy will bring a higher level of employment. In recent years, economic growthhas slowed down, but the number of university graduates has continued to grow. It reached 11.58 million this year,setting a new historical record.
College graduates account for more than half of the annual demand of over 15 million new jobs, and the bonusperiod for the export of cheap rural labor has come to an end. The expansion of university enrollment has obviouslyand directly accelerated the arrival of the turning point. The labor shortage of farmer laborers coexists with thedifficult employment of college graduates. The demand for training for public service recruitment examinationcontinues to rise.
In addition, aiming to maintain sustained economic growth, realize transformation and upgrading, and overcomethe “middle-income trap”, it is urgently necessary to carry out industrial upgrading for middle and high-endvocational education in order to improve the vocational skills and professional literacy of knowledge-basedemployees.
(3) The serious shortage of high-quality supply is the main contradiction that restricts the development of the
vocational education industry.At present, the foundation of vocational education is still weak. Due to the extremely low concentration of theindustry and the limited number of large vocational education institutes and enterprises, the supply of high-qualityvocational education is seriously insufficient. With the improvement of industry concentration and the continuousdevelopment of leading vocational education enterprises, core business elements such as R&D, management andmarketing of vocational education will gradually break through the original boundaries of the industry, create high-quality and cost-effective supplies, drive demand-side volume with supply-side innovation and push the industry intoa new track of rapid development.
(4) The urbanization wave will promote the continuous improvement of public service and the number ofemployees of the public service sector will continue to expand.
The process of urbanization is a key and long-term driver to China’s employment market growth. At present,the urbanization rate has exceeded 60%. Urbanization will expand the public financial expenditure and the numberof employees in the public service sector. China’s urbanization rate remains in a high-speed growth range of 30% to70%. It is likely to continue to develop for nearly 20 years to achieve an urbanization rate of more than 80% indeveloped countries. Meanwhile, continuous urbanization may also lead to seriously inadequate public service supplyin cities, which will also impose higher requirements on the quality of public services.Compared with public products such as infrastructure, public services are labor-intensive inputs, especially thebasic public services of local governments. A large number of employees can be hired while public servicecapabilities are being improved. China’s long-term goal for 2035 includes the equalization of basic public services,and the main goal of economic and social development during the “14th Five-Year Plan” period requires a significantincrease in the level of equalization of basic public services. According to the research by the National Academy ofGovernance, the employed population in the public sector in developed countries accounts for about 10% to 20% ofthe workforce, which is even higher than 20% in Canada and Hong Kong. However, the employed population in thecurrent public sector only accounts for 5% in China.With the deepening of urbanization, the proportion of employed population in China’s public sector willgradually increase; and the market of training for public service recruitment examination will also maintain a long-term steady growth, which has been partially proved by the astonishing demands on the training for teacherrecruitment examination and recruitment examination in medical treatment and public health in recent years.
2. Strategic development direction of the Company
(1) Cement the leadership position in recruitment training market and take steady development as thefirst priority
The industry is currently facing significant challenges due to the complex and volatile domestic and
international situation and the repeated impact of multiple factors that have exceeded expectations, but this does notchange our long-held view of the long-term trend. Urbanization, equalization of public services, the natural renewalof the in-service staff in large scale and the stabilization of employment are the main trends of the economic andsocial development, which means that the long-tail effect of the recruitment market will continue to strengthen.Under the new industry context, the Company will innovate and optimize the products proactively, respond to thedemand of new-added employment more quickly and meet the demand more properly, transfer from the pursuit ofhigh growth to sustainable and sound development, balance business development and profitability and cement theleadership position in recruitment training market.
(2) Maintain effective R&D investment and strengthen the advantages of the leading vocationaleducation innovation platform.R&D shall always be regarded as the fundamental driving force for all undertakings. The Company willresolutely carry out long-term and heavy investment in R&D and attract outstanding talents to participate in R&D.With R&D, the Company will drive innovation from the bottom level, make systematic improvement, breakthrough industry boundaries, and establish competition barriers, so as to perfect its current major businesses,expand its new businesses, and remain to be a leading vocational education innovation platform.
(3) Further integration of technology and business for digital transformation of operations
Years of accumulation of independent IT development is the Company’s valuable wealth, enabling theCompany to calmly cope with the new opportunities and challenges brought by the development of science andtechnology. The Company will constantly increase investment in technology infrastructure and technical teams andenhance responsiveness of technology through technological middle platform and agile development to expanddevelopment output. On this basis, the Company will continue to accelerate digital transformation of operations andfully integrate the productivity of technology with operation system to facilitate business innovation, and improvethe level of intelligence in operation and teaching, thus supporting vertical integrated fast response capability with awider range and on a larger scale.
(4) Focus on the core market and improve service capabilities
Under the influence of changes in consumer demand and market environment, consumers' consumptionconcepts have also undergone certain changes, and consumers will turn to products with more competitive priceswhen choosing commodities. In order to meet market demand, in 2023, the Company will continue to focus on corecategories such as postgraduate entrance examinations, IT and vocational education. Through full investment in corelinks of operation such as teaching and research, channels and management, the Company will improve servicequality and create cost-effective products to meet market demand..
(5) Continue to optimize channels and strengthen core areas
According to the business development strategy, the Company will continue to rationally optimize the channelnetwork, close ineffective outlets and channel superior resources into strengthening core area under the premise of
ensuring the stability of the main body of the business network. At present, the Company’s more than 1,000 directly-operated outlets and learning centers cover more than 300 cities across the country.
3. Major business plan of the Company in 2023
(1) Optimize the organizational structure and enhance the value of human resourcesOrganizational change must support the growth of the business. In 2023, the Company will adjust theorganizational structure, grant regional companies more autonomous rights of management and enable each smallorganization and unit to have greater autonomy when making operational decisions. In addition, the Company haslaunched the “Common Wealth” campaign, where regional companies can carry out “one-to-one” pairing support toimprove the output of HR efficiency by continuously optimizing organizing ability.
(2) Adjust the incentive policy to stimulate the vitality of employees
In 2023, the Company will formulate an incentive policy that is more suitable for its own characteristics, revisethe assessment system for each sequence of personnel and promote the salary incentive model of “more work, morepay”, so that employees will have more enthusiasm and resources, and possess better capabilities to respond to marketdemand. At the same time, the Company will regularly give regional companies and employees of each sequencespecial training and management training, so that the team can serve the Company’s business development in a moreagile manner.
(3) Innovate products and services to enhance power of core product
As the difficulty of the exam increases and the competition becomes more intense, students increasingly needmore time to prepare for exams. This places very high demands on the comprehensive strength of training institutions.In 2023, on the basis of increasing the proportion of cash-paid classes in 2022, the Company will innovate productsof individual categories by taking advantage of large-scale R&D and will also develop new products to meet differentdemands from different regions and students based on the front-line teaching and training experience. In addition,the Company will improve the environment of large-scale one-stop bases for food, lodging and learning in eachregion to provide higher-quality teaching services.
(4) Consolidate online and offline integration and strengthen digital marketing model
The Company will continue to increase investment in online and OMO, and further expand the leading edge ofonline and offline integrated courses on the basis of digitalizing main course products, so that more students canobtain the convenience of online learning and the effectiveness of face-to-face learning at the same time. As channelsbecome increasingly fragmented, the Company will make targeted additions to its channel strategy. In addition toour nationwide coverage of directly operated branches and learning centres, we will expand into various new socialchannels in 2023, according to the frequency of consumer contact.
(5) Cement the foundation and continue to explore new business of vocational education
With the Company’s gradual exploration of new vocational education business last year, the integration ofplatform resources and business has reached a new level and the output capacity of the vocational education teamhas been greatly improved. However, the market is still in the stage of lacking high-quality supply, therefore, on thebasis of the great progress made in 2022, this year the Company will continue to explore new market opportunitiesarising from China’s industrial upgrading, make greater investment in product innovation and resource allocation,improve the level of intelligent operation and teaching, and drive vocational education business to makebreakthrough.
4. Possible Risks
(1)Industry Policy Risks
The boom of the vocational education industry has a high correlation with the policy environment, and is easilyinfluenced by the vocational education policy. In recent years, in order to support the development of the vocationaleducation industry, the state has successively issued a number of industry support and encouragement policies.However, it will take time for the corresponding supporting laws, regulations and rules to be fully implemented, andthere is still a certain degree of uncertainty in the future. If there are major changes and adjustments to relevant laws,regulations or industrial policies in the future, it may have an impact on the development trend of the vocationaleducation industry, which may affect the Company’s future business development and performance. In addition, theCompany has many branches and wide distribution of training venues. It is not ruled out that in the future, relevantregulatory authorities of provinces, autonomous regions and municipalities will issue more stringent regulations forthe local education and training industry, which may affect the Company’s operations in the region.
Risk response: Each branch of the Company has established a tracking research policy team to conduct in-depth analysis of various policies that have been issued. At the same time, the Company’s deep IT independentdevelopment and accumulated strength and effective digital transformation of operations simultaneously ensure theefficiency of information feedback. Through the upgrading and transforming of basic systems such as ERP, CRM,and teaching platforms, it is possible to obtain, perceive and predict the direction and trend of relevant policy changesin various places in a timely manner, make arrangements and adjustments in advance, avoid relevant policy risks,and take advantage of industry policies to help the Company’s business development.
(2) Market Risks
The vocational education industry is encouraged by national policies, which will inevitably lead to an increasinginflux of capital into the vocational education and training industry, resulting in increasingly fierce competition inthe market, and the Company’s business may face the impact of new competitors. At the same time, due to themacroeconomic environment, the training industry is experiencing cyclical fluctuations, shrinking demand andweakening willingness of trainees to participate in training, and the industry is showing signs of overall contraction,which poses a test to the Company’s business. Therefore, in the long run, the resilience of market demand is strong,
but it cannot be ruled out that the short-term decline due to various factors will affect the candidates’ enthusiasm forthe exam, resulting in the decline of market demand.Risk response: In response to the above risks, the Company will continue to maintain effective investment inresearch and development, and also in technology infrastructure and technical teams to integrate the productivity oftechnology into the business system and promote business innovation and the quality of products and services. TheCompany will optimize the product structure timely, refine the product quality and innovate the service modelaccording to the demand of market and trainees, to improve the operating profitability. At the same time, based onthe operating conditions, the Company will seek the optimum balance between products, staff and channels andstrengthen the control over cost to enhance the Company’s capability of fighting against market risks.
(3)Management Risks
With the continuous expansion of the Company’s business categories and branches, the Company must face therisk of mismatch between expansion and management capabilities. With the continuous increase of costs such asvenue leasing and labor, the pursuit of rapid development will lead to a decline in the current profit level and profitmargin.Risk response: The Company will continuously optimize the vertically integrated and rapid responsemanagement system to enable the system to have rapid resource allocation capabilities and information feedbackmechanism, which can bring a larger management radius, higher delivery efficiency, enhance the work collaborationof large-scale employees, and improve management and operation efficiency. At the same time, the Company’s R&Dcapabilities and channel advantages accumulated over years provide strong support for the Company to expand newcategories and form a diversified product matrix.Section XII. Reception of research, communication, interview and other activities
√ Applicable □ Not Applicable
| Date | Place | Ways of reception | Type of reception object | Reception object | Discussion content and the materials provided | Index of the survey |
| May 11, 2022 | rs.p5w.net | Other | Other | All investors | Interpretation of the Company's annual performance in 2021, business development, introduction of the Company's strategic plan, and etc. | The "Investor Relations Activity Record Form (2022-001)" disclosed by the Company on www.cninfo.com.cn on May 11, 2022 |
Chapter 4 Corporate GovernanceSection I. Basic Information of Corporate GovernanceDuring the reporting period, in strict accordance with relevant laws and regulations, and rules and regulatorydocuments from supervision authorities, i.e. Company Law, Securities Law, Code of Corporate Governance forListed Companies in China, Stock Listing Rules of Shenzhen Stock Exchange, and Listed Companies Self-RegulatoryGuidelines No.1 — Standardized Operation of the Listed Companies on Main Board, the Company, based on itsactual situation, consistently improved its corporate governance structure and internal control system, and enhancedthe level of corporate governance. The Company’s overall operation, corporate governance system and informationdisclosure were sound and standardized. The actual conditions of corporate governance met the requirements of theregulatory documents with respect to the corporate governance of listed companies issued by CSRC.
1. Shareholders and the Shareholders’ General Meeting
In strict accordance with Articles of Corporation and Rules of Procedure for Shareholders’ General Meeting aswell as other applicable regulations and requirements, the Company standardized the gathering, convening,deliberations and voting procedures of its shareholders’ general meetings and hired legal advisers to issue legalopinions for the shareholders’ general meetings. The Company treats all shareholders equally and especially ensuresthat the minority shareholders enjoy equal status. During the reporting period, the Company convened twoshareholders’ general meetings in total, and all resolutions of the shareholders’ general meetings were faithfullyimplemented by the board of directors.
2. The relationship between the Company and the controlling shareholders
The controlling shareholders of the Company exercised the rights and obligations of the investors in strictaccordance with Company Law. During the reporting period, there was neither any direct or indirect interference withthe Company’s decision-making and operations beyond the Shareholders’ General Meeting by the controllingshareholders nor a situation where the controlling shareholders damaged the legitimate rights and interests of othershareholders of the Company. There wasn’t any guarantee provided by the listed Company for the controllingshareholders or their subsidiaries.
3. Directors and the Board of Directors
The Company elected candidates for the Board of Directors in strict accordance with relevant laws andregulations i.e. Company Law and Articles of Corporation. The number of directors and composition of the Board ofDirectors met the requirements of laws and regulations. The Board of Directors of the Company convened Boardsessions in strict accordance with the relevant provisions of Articles of Corporation, Regulations of Appointment andProceedings for Independent Directors and Rules of Procedure for the Board of Directors. All directors of theCompany attended the Board sessions on time, fulfilled their duties diligently, scrupulously reviewed variousproposals and made scientific and reasonable decisions on major matters of the Company to effectively safeguardthe interests of the Company and the legitimate rights and interests of all shareholders. Under the Board of Directorsof the Company are four professional committees: Strategy and Investment Committee, Nomination Committee,
Audit Committee and Remuneration and Appraisal Committee. With clearly defined powers and responsibilities andeffective operations, each committee gave full play to its professional functions and provided scientific andprofessional opinions for the decision-making of the Board of Directors.
4. Supervisors and the Supervisory Committee
The Company elected candidates for the Supervisory Committee in strict accordance with relevant laws andregulations i.e. Company Law and Articles of Corporation. The number of supervisors and composition of theSupervisory Committee met the requirements of laws and regulations. The Supervisory Committee of the Companyconvened its sessions in strict accordance with the relevant provisions of Articles of Corporation, Rules of Procedurefor the Supervisory Committee, and other related regulations. All supervisors of the Company attended thesupervisory sessions on time, fulfilled their duties faithfully, provided supervision and opinions for major issues,financial status, etc., and safeguarded the legitimate rights and interests of the Company and shareholders.
5. Relevant stakeholders
The Company fully respects and safeguards the legitimate rights and interests of relevant stakeholders,constantly strengthens the awareness of social responsibility and enhances communication with all parties tocoordinate and balance the interests of the society, government, shareholders, the Company itself, and its employees.The Company adheres to the principle of mutual benefits and win-win results with relevant stakeholders and jointlypromotes the Company’s harmonious, steady and sound development.
6. Information disclosure and transparency
In strict accordance with the requirements of Regulations Concerning Information Disclosure Management,Regulations Concerning Investors Relations Management and Regulations of Registration and Management Systemon Learners of Insider Information, the Company designates the Secretary of the Board to be responsible forinformation disclosure, receiving shareholders’ visits and consultations and to disclose the relevant information in anauthentic, accurate, complete, timely and fair manner in accordance with relevant regulations so as to ensure that allshareholders of the Company can have equal access to the information.
7. Performance appraisal and incentives
During the reporting period, the Company constantly improved working performance evaluation system andincentive mechanism. The appointment and remuneration of the Company’s directors, supervisors and seniorexecutives were open and transparent, which met the requirements of relevant laws and regulations. The Companyregularly and comprehensively evaluated employees’ working skills, values and their recognition of corporate cultureby an evaluation method based on quantitative indicators of performance and qualitative standards to ensure that boththe work results and growth of employees were given attention to.
8. Investor relations management
During the reporting period, the Company constantly strengthened the management of investor relations andsafeguarded the legitimate rights and interests of the Company’s shareholders. The Company designates the Secretaryof the Board as the head of investor relations management to organize and implement the daily management of
investor relations, and promptly answer investors’ questions through phone calls, emails, interactive platform andonline briefings of business performance, which ensures that all the investors have equal access to the Company’sinformation and fully guarantees investors’ rights to know.Are there any material differences between the Company’s actual governance status and the laws, administrativeregulations and rules on the governance of listed companies issued by CSRC?
□ Yes √ No
There is no material difference between the Company’s actual governance status and the laws, administrativeregulations and rules on the governance of listed companies issued by CSRC.Section II. Details of the Company’s separation from its controlling shareholders and actualcontrollers to ensure the Company’s independence on assets, personnel, finance, organizationand business affairsThe Company standardized its operation, established and improved corporate governance structure in strictaccordance with Company Law, Securities Law, Articles of Corporation, and other relevant laws and regulations.The Company is independent in business, personnel, assets, organization and finance affairs from the controllingshareholders, actual controllers and other enterprises under their control, and is capable of operating independentlywith its complete and independent business.
1. Business independence: With independent and complete business structure, the Company is capable ofrunning market-oriented business independently. There is no horizontal competition among the Company, controllingshareholders, and other enterprises under their control.
2. Personnel independence: The Company has independent personnel. It has set up various independentdepartments, including R&D, sales, administration, finance and operation management divisions, and establishedindependent human resources and payroll management system. The directors, supervisors and senior executives ofthe Company do not hold any posts prohibited by regulations in other companies with the same or similar businessto the Company’s.
3. Assets Completeness: The property relations between the Company and the controlling shareholders are clear.No assets, funds, or other resources owned by the Company are illegally occupied or controlled by the controllingshareholders.
4. Institutional independence: The Company has set up a sound organization system. General Meeting ofShareholders, Board of Directors, Supervisory Committee, management and all the functional departments operateindependently from each other. The Company as well established corresponding internal management and controlsystem to make each department have clearly defined responsibilities, perform its own duties and cooperate witheach other, thus composing an organic whole and guaranteeing the legal operation of the Company. There is nosubordinate relationship between the Company’s institutions and the functional departments of the controllingshareholders.
5. Financial independence: The Company has set up complete and independent financial department equippedwith adequate full-time financial accountants, established independent accounting calculation system and financialmanagement system, and independently opened bank accounts, paid taxes and made financial decisions. There is nointerference from the controlling shareholders in the financial management of the Company.Section III. Horizontal Competition
□ Applicable √ Not applicable
Section IV. Annual general meeting and extraordinary general meetings convened during thereporting period
1.Particulars about the shareholders’ general meeting during the reporting period
| Session | Type | Investor Participation % | Convening date | Disclosure date | Resolution |
| 2022 First Extraordinary General Meeting | Extraordinary General Meeting | 75.06% | January 28, 2022 | January 29, 2022 | For details, refer to the Announcement on Resolutions of the First Extraordinary General Meeting of 2022(No. 2022-012) disclosed on www.cninfo.com.cn. |
| 2021Annual General Meeting | Annual General Meeting | 78.27% | June 27, 2022 | June 28, 2022 | For details, refer to the Announcement on Resolutions of the Annual General Meeting of 2021 (No. 2022-052) disclosed on www.cninfo.com.cn. |
2. Extraordinary general meetings requested by preferred shareholders with restored voting rights:
□ Applicable √ Not applicable
Section V. Directors, supervisors and senior executives of the Company
1. Basic information
| Name | Title | Tenure status | Gender | Age | Start date | End date | Shares held at the beginning of the period (share) | Quantity of shares increased in the current period (share) | Quantity of shares decreased in the current period (share) | Other increased or decreased changes (share) | Quantity of shares held at the end of the period (share) | Reasons for increase or decrease of shares |
| Li Yongxin | Chairman of the Board | Incumbent | Male | 47 | February 1, 2019 | January 27, 2025 | 1,131,415,121 | 158,803,785 | 972,611,336 | Reduce shareholding | ||
| Wang Zhendong | Director, general manager | Incumbent | Male | 47 | February 1, 2019 | January 27, 2025 | 852,885,418 | 92,110,000 | 760,775,418 | Reduce shareholding | ||
| Shi Lei | Director | Incumbent | Male | 47 | February 1, 2019 | January 27, 2025 | ||||||
| Yi Ziting | Director | Incumbent | Female | 49 | February 1, 2019 | January 27, 2025 | ||||||
| Wang Qiang | Independent director | Resigned | Male | 46 | February 1, 2019 | January 28, 2022 | ||||||
| Tong Yan | Independent director | Resigned | Female | 46 | February 1, 2019 | January 28, 2022 | ||||||
| Jiang Tao | Independent director | Incumbent | Male | 49 | January 28, 2022 | January 27, 2025 | ||||||
| Chen Yuqin | Independent director | Incumbent | Female | 58 | January 28, 2022 | January 27, 2025 | ||||||
| Zhang Xuanming | Independent director | Incumbent | Male | 45 | February 1, 2019 | January 27, 2025 | ||||||
| Yu Hongwei | Chairman of the Supervisory Committee | Incumbent | Female | 57 | July 22, 2019 | January 27, 2025 | ||||||
| He Di | Supervisor | Incumbent | Male | 46 | February 1, 2019 | January 27, 2025 | ||||||
| Li Wen | Supervisor | Incumbent | Female | 44 | February 1, 2019 | January 27, 2025 | ||||||
| Wang Xuejun | Deputy general manager | Resigned | Male | 60 | February 1, 2019 | January 28, 2022 | ||||||
| He Youli | Deputy general manager | Incumbent | Male | 48 | February 1, 2019 | January 27, 2025 | ||||||
| Luo Xue | Chief Financial Officer | Incumbent | Male | 55 | February 1, 2019 | January 27, 2025 | ||||||
| Gui | Secretary of the | Incumbent | Male | 52 | February 1, | January 27, |
| Hongzhi | Board, deputy general manager | 2019 | 2025 | |||||||||
| Total | -- | -- | -- | -- | -- | -- | 1,984,300,539 | 0 | 250,913,785 | 0 | 1,733,386,754 | -- |
During the reporting period, is there any resignation of directors and supervisors or dismissal of senior executivesduring their term of office?
□ Yes √ No
Changes of directors, supervisors, and senior executives
√ Applicable □ Not Applicable
| Name | Title | Type | Date | Reasons |
| Wang Qiang | Independent director | Resignation after expiration of appointment | January 28, 2022 | Because of his expiration of appointment, Mr. Wang Qiang no longer serves as an independent director of the Company. |
| Tong Yan | Independent director | Resignation after expiration of appointment | January 28, 2022 | Because of her expiration of appointment, Ms. Tong Yan no longer serves as an independent director of the Company. |
| Wang Xuejun | Deputy general manager | Resignation after expiration of appointment | January 28, 2022 | Because of his expiration of appointment, Mr. Wang Xuejun no longer serves as the deputy general manager of the Company. |
| Jiang Tao | Independent director | Elected | January 28, 2022 | According to the election results of the Company’s 2022 First Extraordinary General Meeting and the First Meeting of the Sixth Board of Directors, Mr. Jiang Tao was elected as an independent director of the Company’s Sixth Board of Directors. |
| Chen Yuqin | Independent director | Elected | January 28, 2022 | According to the election results of the Company’s 2022 First Extraordinary General Meeting and the First Meeting of the Sixth Board of Directors, Ms. Chen Yuqin was elected as an independent director of the Company’s Sixth Board of Directors. |
2. Resumes of key personnel
The professional background, main working experience and their main duties in the Company of current directors,supervisors, and senior executives.
(1)Directors and independent directors
Mr. Li Yongxin, born in 1976, is a Chinese citizen and has no permanent residency abroad. He received hisbachelor’s degree in law from the Department of Political Science and Public Administration, Peking University in1999. Mr. Li founded his own company in education industry in the same year and started to focus his business ontraining for public service recruitment examination in the year of 2000. Up to now, he has accumulated nearly 20years of experience in R&D, teaching and business management in the field of training for public service recruitment.
From 2005 to 2010, he served as the general manager of Beijing Offcn Online Education Technology Co., Ltd. From2010 to November 2015, he was the president of Beijing Offcn Future Education Consultancy Co., Ltd. FromNovember 2015 to December 2018, he served as the Chairman of Board of Beijing Offcn Education TechnologyStock Co., Ltd. From December 2018 to present, he has served as the Chairman of Board of Beijing Offcn EducationTechnology Co., Ltd. From February 2019 to present, he has served as the Chairman of Board of Offcn EducationTechnology Co., Ltd.Mr. Wang Zhendong, born in 1976, is a Chinese citizen and has no permanent residency abroad. He receivedhis bachelor’s degree in law from the Department of Political Science and Public Administration, Peking Universityin 1999. In the year of 2001, Mr. Wang Zhendong started his career in education industry. From 2005 to 2010, he wasin charge of the internal operation and management of Beijing Offcn Online Education Technology Co., Ltd. From2010 to November 2015, he served as the executive director and general manager of Beijing Offcn Future EducationConsultancy Co., Ltd. From November 2015 to December 2018, he was the director and general manager of BeijingOffcn Education Technology Stock Co., Ltd. From December 2018 to present, he has served as the director andgeneral manager of Beijing Offcn Education Technology Co., Ltd. From February 2019 to present, he has served asthe director and general manager of Offcn Education Technology Co., Ltd.Mr. Shi Lei, born in 1976, is a Chinese citizen and has no permanent residency abroad. He started his career ineducation industry in the year of 1999. From 2005 to 2010, he was in charge of marketing operations and managementof Beijing Offcn Online Education Technology Co., Ltd. From 2010 to November 2015, he was the vice president ofBeijing Offcn Future Education Consultancy Co., Ltd. From November 2015 to December 2018, he served as adirector, the Chief Financial Officer and secretary of the Board of Beijing Offcn Education Technology Stock Co.,Ltd. From December 2018 to present, he has served as a director of Beijing Offcn Education Technology Co., Ltd.From February 2019 to present, he has served as a director of Offcn Education Technology Co., Ltd.Ms. Yi Ziting, born in 1974, is a Chinese citizen and has no permanent residency abroad. She has a master’sdegree. Ms. Yi Ziting switched her career path to education industry in the year of 2011. From 1994 to 2004, sheserved successively as a technician and an assistant engineer in Zhuzhou Smelting Group Co., Ltd. From 2007 to2011, she was the head of legal department of China Crop Protection Industry Association (CCPIA). Starting from2011, Ms. Yi Ziting has been successively holding the posts of head of Teaching Evaluation and ManagementCommittee, assistant president, and associate president of Beijing Offcn Future Education Consultancy Co., Ltd.From November 2015 to December 2018, she served as a director of Beijing Offcn Education Technology Stock Co.,Ltd. From December 2018 to present, she has served as the chairman of the Supervisory Committee of Beijing OffcnEducation Technology Co., Ltd. From February 2019 to present, she has served as a director of Offcn EducationTechnology Co., Ltd.Ms. Chen Yuqin, born in 1965, is a Chinese citizen and has no permanent residency abroad. She is a senioreconomist and a member of CPC. She got a bachelor’s degree in economics from Renmin University of China as afull-time student and was an on-the-job graduate student in Tsinghua University. From August 1987 to March 1992,she worked as a teacher in Tsinghua University. From April 1992 to August 2005, she worked in a state-owned bank,and served successively as the deputy department manager of the sub-branch (in charge of work), the departmentmanager (credit approver and the office director of the Risk Management and Internal Control Committee), the sub-
branch manager (and the Party branch secretary). From August 2005 to December 2020, She worked in the joint-stock bank, and served successively as a full-time approver in the branch, assistant manager of the sub-branch (incharge of work), manager of the sub-branch (and the Party branch secretary) and etc. She retired at the end ofDecember 2020. From August 4, 2021 to present, she has been working as a non-independent director of HengxinShambala Culture Co., Ltd. From January 2022 to present, she has been serving as an independent director of OffcnEducation Technology Co., Ltd.Mr. Jiang Tao, born in 1974, is a Chinese citizen and has no permanent residency abroad, a postdoctor ineconomics from Sichuan University. He is currently an associate professor of Southwestern University of Financeand Economics, deputy director of the Finance Department of Accounting Institute, and financial consultant forSichuan Trade Petroleum Energy Co., Ltd. and Doppler Elevator Co., Ltd. From September 2020 to present, he hasbeen serving as an independent director of Chengdu Xinzhu Road & Bridge Machinery Co., Ltd. From January 2022to present, he has been serving as an independent director of Offcn Education Technology Co., Ltd.Mr. Zhang Xuanming, born in 1978, is a Chinese citizen and has no permanent residency abroad. He has amaster’s degree and is qualified as a Chinese lawyer. From 2003 to 2005, he worked as a full-time lawyer in BeijingWeizheng Law Firm. From 2005 to 2010, he was a partner of Beijing Hechuan Law Firm. From April 2017 to present,he has served as the director of Beijing Meixin Law Firm. From July 2013 to present, he has served as a supervisorof Tongling Friendship Real Estate Co., Ltd. From October 2015 to present, he has served as a supervisor of HebeiXinmiao Tourism Development Co., Ltd. From February 2019 to present, he has served as an independent directorof Offcn Education Technology Co., Ltd.
(2)Supervisors
Ms. Yu Hongwei, born in 1966, is a Chinese citizen and has no permanent residency abroad. She has abachelor’s degree. From 1985 to 1995, Ms. Yu Hongwei served as a Naval Officer. From 1995 to 2002, she was thechief representative of GATX Beijing Office. From 2002 to 2008, she served as the administrative director of theZhuoyue College in the University of International Business and Economics. From 2008 to 2013, she worked for theChinese Academy of Science as the director of Senior Talents Department in the Personnel Exchange andDevelopment Center, then as the deputy Party secretary, and chairman of Trade Union. From 2013 to October 2015,Ms. Yu Hongwei served as a department director of Beijing Offcn Future Education Consultancy Co., Ltd. FromNovember 2015 to December 2018, she successively held the posts of department director, the secretary of PartyBranch and the secretary of Party Committee of Beijing Offcn Education Technology Stock Co.,Ltd. From December2018 to present, she has served as the secretary of Party Committee of Beijing Offcn Education Technology Co., Ltd.From July 2019 to present, she has served as the Chairman of the Supervisory Committee of Offcn EducationTechnology Co., Ltd.Mr. He Di, born in 1977, is a Chinese citizen and has no permanent residency abroad. He received a bachelor’sdegree. From 2010, he served as an assistant president of Beijing Offcn Future Education Consultancy Co., Ltd. FromNovember 2015 to December 2018, he worked as a supervisor of Beijing Offcn Education Technology Stock Co.,Ltd.From December 2018 to present, he has served as a supervisor of Beijing Offcn Education Technology Co., Ltd.From February 2019 to present, he has served as a supervisor of Offcn Education Technology Co., Ltd.
Ms. Li Wen, born in 1979, is a Chinese citizen and has no permanent residency abroad. She owns a master’sdegree and is qualified as a Chinese lawyer. She started her journey in education industry in the year of 2007. From
2007 to 2010, she worked as a teacher and R&D staff in Beijing Offcn Online Education Technology Co., Ltd.Starting from 2010, she firstly served as a teacher, then the dean’s assistant and successively the dean of InterviewTraining Department in Offcn Ltd. From November 2015 to December 2018, she served as the supervisorrepresenting employees of Beijing Offcn Education Technology Stock Co., Ltd. From December 2018 to present, shehas served as a supervisor of Beijing Offcn Education Technology Co., Ltd. From February 2019 to present, she hasserved as a supervisor of Offcn Education Technology Co., Ltd.
(3)Senior Executives
Please see the above for Mr. Wang Zhendong’s resume.Mr. He Youli, born in 1975, is a Chinese citizen and has no permanent residency abroad. He started working ineducation industry in the year of 1999. From 2005 to 2010, he was in charge of marketing operations of Beijing OffcnOnline Education Technology Co., Ltd. From 2010 to November 2015, he served as an assistant president andsuccessively the vice president of Beijing Offcn Future Education Consultancy Co., Ltd. From November 2015 toDecember 2018, he was employed as the deputy general manager of Beijing Offcn Education Technology StockCo.,Ltd. From December 2018 to present, he has served as the deputy general manager of Beijing Offcn EducationTechnology Co., Ltd. From February 2019 to present, he has served as the deputy general manager of Offcn EducationTechnology Co., Ltd.Mr. Luo Xue, born in 1968, is a Chinese citizen and has no permanent residency abroad. He owns a bachelor’sdegree and is a certified public accountant, a registered asset appraiser and an intermediate accountant. From July1991 to September 2000, he worked at the Zhongyuan Oil Field of Sinopec. From October 2000 to January 2011, hewas successively employed by Beijing Pan-China CPA Ltd., Deloitte Touche Tohmatsu CPA Ltd. and ReandaCertified Public Accountants LLP, where he held the posts from audit manager to technical partner. From February2011 to August 2014, he served as the financial director and secretary of the Board of Cortech Drilling EquipmentLtd. From August 2014 to December 2016, he was employed as the CFO of LandOcean Energy Services Co., Ltd.From 2017 to December 2018, he was the head of the financial department of Beijing Offcn Education TechnologyStock Co., Ltd. From February 2019 to present, he has served as the financial director of Offcn Education TechnologyCo., Ltd.
Mr. Gui Hongzhi, born in 1971, is a Chinese citizen and has no permanent residency abroad. He owns an MBAdegree. From April 2003 to August 2006, he worked at the CRED Holding Co., Ltd. as the manager of SecuritiesDepartment. In the same company, he served as the deputy general manager and secretary of the Board from August2006 to July 2015. From September 2015 to December 2018, he was employed as head of Securities AffairsDepartment by Beijing Offcn Education Technology Stock Co., Ltd. From February 2019 to present, he has servedas the deputy general manager and secretary of the Board of Offcn Education Technology Co., Ltd.Positions held in shareholders entities:
√ Applicable □ Not applicable
| Name | Name of the shareholder entity | Position in the shareholder entity | Start date | End date | Receiving payment from the shareholder |
| entity or not? | |||||
| Wang Zhendong | Beijing Offcn Future Information Consulting Center (Limited Partnership) | Executive Partner | April 10, 2018 | To date | N/A |
| Particulars about holding position in shareholders entities | None | ||||
Employment in other companies
√ Applicable □ Not applicable
| Name | Name of the company | Positions held in the company | Start date | End date | Receiving payment from the company or not? |
| Li Yongxin | Beijing Offcn Education Technology Co., Ltd | Chairman of the Board | December 27, 2018 | To date | Yes |
| Li Yongxin | Kunming Wuhua Offcn Training School | President of the council | January 18, 2015 | To date | N/A |
| Li Yongxin | Beijing Offcn Future Group Co., Ltd. | Supervisor | June 13, 2019 | To date | N/A |
| Li Yongxin | Yanyuan Alumni Investment Management Co., Ltd. | Supervisor | January 21, 2019 | To date | N/A |
| Li Yongxin | Beijing Haidian Offcn Training School | President of the council | July 22, 2009 | To date | N/A |
| Li Yongxin | Beijing Haidian Baoquan Financial Training Center | President of the council | May 19, 2014 | To date | N/A |
| Li Yongxin | Urumqi Shayibake Offcn Training Center | Chairman of the Board | January 13, 2014 | To date | N/A |
| Shi Lei | Beijing Offcn Education Technology Co., Ltd | Director | December 27, 2018 | To date | Yes |
| Shi Lei | Hainan Huiyou Film&TV Technology Co., Ltd. | Director | March 10, 2017 | To date | N/A |
| Shi Lei | Taiyuan Hi-Tech Zone Offcn Training School | Council member | March 4, 2013 | To date | N/A |
| Shi Lei | Urumqi Shayibake Offcn Training Center | Council member | January 13, 2014 | To date | N/A |
| Shi Lei | Guangxi Oriental Dreamland Tourism&Healthcare Investment Co., Ltd. | Director | February 24, 2021 | To date | N/A |
| Wang Zhendong | Beijing Offcn Education Technology Co., Ltd. | Director | December 27, 2018 | To date | Yes |
| Wang Zhendong | Beijing Offcn Future Education Technology Co., Ltd | Director | March 25, 2020 | To date | N/A |
| Wang Zhendong | Lu’an Yazhong Real Estate Information Consulting Co., Ltd. | Executive director and general manager | January 10, 2022 | To date | N/A |
| Wang Zhendong | Lu’an Zhongke Real Estate Information Consulting Co., Ltd. | Executive director and general manager | January 10, 2022 | To date | N/A |
| Wang Zhendong | Beijing Offcn Century Education Technology Co., Ltd | Executive director and general manager | November 11, 2021 | To date | N/A |
| Wang Zhendong | Beijing Xindezhiyuan Enterprise Management Consultancy Co., Ltd. | Supervisor | August 6, 2014 | To date | N/A |
| Wang Zhendong | Beijing Offcn Xinzhiyu Network Technology Co., Ltd. | Supervisor | May 8, 2012 | To date | N/A |
| Wang Zhendong | Beijing Offcn Future Research Education Technology Co., Ltd. | Executive director and general manager | December 4, 2020 | To date | N/A |
| Wang Zhendong | Taiyuan Hi-Tech Zone Offcn Training School | President of the council | March 4, 2013 | To date | N/A |
| Wang Zhendong | Tangshan Lunan Offcn Training School | President of the council | March 1, 2013 | To date | N/A |
| Wang Zhendong | Urumqi Shayibake Offcn Training Center | Council member | January 13, 2014 | To date | N/A |
| Chen Yuqin | Shanghai Yuqinyangde Information Technology Consulting Co., Ltd. | Supervisor | March 15, 2021 | To date | N/A |
| Chen Yuqin | Hengxin Shambala Culture Co., Ltd. | Director | August 5, 2021 | To date | Yes |
| Jiang Tao | Chengdu Xinzhu Road & Bridge Machinery Co., Ltd. | Independent director | October 16, 2019 | To date | Yes |
| Jiang Tao | Southwestern University of Finance and Economics | Professor | September 1, 2008 | To date | Yes |
| He Di | Beijing Offcn Education Technology Co., Ltd | Supervisor | December 27, 2018 | To date | Yes |
| He Di | Beijing Offcn Future Education Technology Co., Ltd. | Supervisor | March 25, 2020 | To date | N/A |
| He Di | Tianjin Hexi Offcn Training School Co., Ltd. | Director | July 15, 2019 | To date | N/A |
| He Di | Yuxi Offcn Training School Co., Ltd. | Director | December 24, 2018 | To date | N/A |
| He Di | Lu’an Yazhong Real Estate Information Consulting Co., Ltd. | Supervisor | January 10, 2022 | To date | N/A |
| He Di | Lu’an Zhongke Real Estate Information Consulting Co., Ltd. | Supervisor | January 10, 2022 | To date | N/A |
| He Di | Beijing Offcn Century Education Technology Co., Ltd. | Supervisor | November 11, 2021 | To date | N/A |
| He Di | Beijing Offcn Future Research Education Technology Co., Ltd. | Supervisor | December 4, 2020 | To date | N/A |
| Zhang Xuanming | Hebei Xinmiao Tourism Development Co., Ltd | Supervisor | October 18, 2015 | To date | Yes |
| Yi Ziting | Beijing Offcn Education Technology Co., Ltd | Chairman of the Supervisory Committee | December 27, 2018 | To date | Yes |
| Li Wen | Beijing Offcn Education Technology Co., Ltd | Supervisor | December 27, 2018 | To date | Yes |
Details of penalties in the past three years from securities regulatory institutions to directors, supervisors, and seniorexecutives who are currently holding the positions in the Company and those who had resigned from the Companyduring the reporting period
√ Applicable □ Not applicable
On December 25, 2021, the Company was filed and investigated by China Securities Regulatory Commission (CSRC)on suspicion of failing to disclose related party transaction information and violating the laws and regulations ofinformation disclosure. On April 27, 2022, the Company and the relevant parties received the official Decision ofAdministrative Penalty. Due to the Company’s failure to truthfully disclose related-party relationships and related-party transactions as required, the Anhui Securities Regulatory Bureau of the CSRC decided to give a warning to andimpose a fine of RMB 2 million yuan on the Company’s Chairman of the Board of Directors Li Yongxin and DirectorShi Lei respectively, give a warning to and impose a fine of RMB 1 million yuan on Wang Zhendong, the Directorand General Manager of the Company, and give a warning to and impose a fine of RMB 0.5 million yuan on theCompany’s CFO Luo Xue and the Secretary of the Board Gui Hongzhi respectively.On August 24, 2022, the Company and corresponding parties received the Decision on Publicly Reproaching Offcn
Education Technology Co., Ltd. and Corresponding Parties issued by the Shenzhen Stock Exchange. Shenzhen StockExchange publicly condemned the Company and its chairman of the board of directors Li Yongxin, director andgeneral manager Wang Zhendong, director Shi Lei, chief financial officer Luo Xue, and board secretary Gui Hongzhifor the above-mentioned failure to truthfully disclose related-party relationships and related-party transactions asrequired.
3. Remuneration for directors, supervisors and senior executives
The decision-making procedure, determination basis and actual payment of remuneration for directors, supervisorsand senior executivesIn order to further improve the remuneration system for the Company’s directors, supervisors, and senior executives,and fully motivate the enthusiasm for work of the Company’s directors, supervisors, and senior executives, theCompany formulated the Regulations of Remuneration System of Directors, Supervisors, and Senior Executives. OnJune 27, 2022, the shareholders’ meeting reviewed and approved the Proposal on Determining the RemunerationPlan in the year of 2022 for Directors, Supervisors and Senior Executives of the Company, which further clarifiedthe remuneration plan for directors, supervisors and senior executives. The allowances for independent directors areissued quarterly. The Company does not provide additional allowances for internal directors or internal supervisors.The remuneration of the Company’s internal directors, internal supervisors and senior executives is issued accordingto the Company’s salary system.Remuneration of directors, supervisors, senior executives during the reporting period:
Unit: RMB 10 thousand yuan
| Name | Position | Gender | Age | Tenure Status | Total before-tax remuneration gained from the Company | Whether gained remuneration from the related parties of the Company |
| Li Yongxin | Chairman of the Board | Male | 47 | Incumbent | 17.75 | N/A |
| Wang Zhendong | Director, general manager | Male | 47 | Incumbent | 26.98 | N/A |
| Shi Lei | Director | Male | 47 | Incumbent | 43.79 | N/A |
| Yi Ziting | Director | Female | 49 | Incumbent | 35.7 | N/A |
| Wang Qiang | Independent director | Male | 46 | resigned | 1.00 | N/A |
| Tong Yan | Independent director | Female | 46 | resigned | 1.00 | N/A |
| Jiang Tao | Independent director | Male | 49 | Incumbent | 11.00 | N/A |
| Chen Yuqin | Independent director | Female | 58 | Incumbent | 11.00 | N/A |
| Zhang Xuanming | Independent director | Male | 45 | Incumbent | 12.00 | N/A |
| Yu Hongwei | Chairman of the Supervisory Committee | Female | 57 | Incumbent | 18.00 | N/A |
| He Di | Supervisor | Male | 46 | Incumbent | 34.82 | N/A |
| Li Wen | Supervisor | Female | 44 | Incumbent | 35.63 | N/A |
| Wang Xuejun | Deputy general manager | Male | 60 | resigned | 3.58 | N/A |
| He Youli | Deputy general manager | Male | 48 | Incumbent | 44.18 | N/A |
| Luo Xue | Chief financial officer | Male | 55 | Incumbent | 43.57 | N/A |
| Gui Hongzhi | Secretary of the Board, deputy general manager | Male | 52 | Incumbent | 33.57 | N/A |
| Total | -- | -- | -- | -- | 373.57 | -- |
Section VI. Performance of duties by directors during the reporting period
1. Board meetings during the reporting period
| Session | Convening date | Disclosure date | Resolution |
| The 25th Meeting of the 5th Board of Directors | January 12, 2022 | January 13, 2022 | For details, refer to the Announcement on Resolutions of the 25th Meeting of the 5th Board of Directors (No. 2022-002) disclosed on www.cninfo.com.cn. |
| The 1st Meeting of the 6th Board of Directors | January28, 2022 | January29, 2022 | For details, refer to the Announcement on Resolutions of the 1st Board Meeting of the 6th Board of Directors (No. 2022-013) disclosed on www.cninfo.com.cn. |
| The 2nd Meeting of the 6th Board of Directors | April 28, 2022 | April 29, 2022 | For details, refer to the Announcement on Resolutions of the 2nd Board Meeting of the 6th Board of Directors (No. 2022-042) disclosed on www.cninfo.com.cn. |
| The 3rd Meeting of the 6th Board of Directors | August 30, 2022 | — | Reviewed and approved the Full Text and Abstract of 2022 Semi-annual Report |
| The 4th Meeting of the 6th Board of Directors | October 28, 2022 | — | Reviewed and approved the Third Quarter 2022 Report of the Company |
| The 5th Meeting of the 6th Board of Directors | November 4, 2022 | November 8, 2022 | For details, refer to the Announcement on Resolutions of the 5th Board |
| Meeting of the 6th Board of Directors (No. 2022-071) disclosed on www.cninfo.com.cn. | |||
| The 6th Meeting of the 6th Board of Directors | December 16, 2022 | December 17, 2022 | For details, refer to the Announcement on Resolutions of the 6th Board Meeting of the 6th Board of Directors (No. 2022-090) disclosed on www.cninfo.com.cn. |
2. Attendance of directors at board meetings and shareholders’ meetings
| Attendance of directors at board meetings and shareholders’ meetings | |||||||
| Director | Sessions required to attend during the reporting period (times) | Attendance in person (times) | Attendance by way of telecommunication (times) | Entrusted presence (times) | Absence (times) | Non-attendance in person for two consecutive (times) | Attendance in shareholders’ meetings (times) |
| Li Yongxin | 7 | 7 | 0 | 0 | 0 | N/A | 2 |
| Wang Zhendong | 7 | 7 | 0 | 0 | 0 | N/A | 2 |
| Shi Lei | 7 | 7 | 0 | 0 | 0 | N/A | 2 |
| Yi Ziting | 7 | 7 | 0 | 0 | 0 | N/A | 2 |
| Wang Qiang | 1 | 0 | 1 | 0 | 0 | N/A | 0 |
| Tong Yan | 1 | 0 | 1 | 0 | 0 | N/A | 0 |
| Zhang Xuanming | 7 | 0 | 7 | 0 | 0 | N/A | 1 |
| Jiang Tao | 6 | 0 | 6 | 0 | 0 | N/A | 0 |
| Chen Yuqin | 6 | 0 | 6 | 0 | 0 | N/A | 1 |
Explanation of non-attendance in person for two consecutive timesNone
3. Particulars about directors objecting on relevant issues of the Company
Whether there were any objections on relevant issues of the Company from directors
□Yes √ No
During the reporting period, there were no objections from directors on relevant issues of the Company.
4. Other explanations on the performance of duties by directors
Whether relevant advice to the Company from directors were adopted
√ Yes □ No
Explanation of advice from directors to the Company being adopted or not being adoptedDuring the reporting period, the Company’s directors scrupulously exercised their rights and performed their dutiesin strict accordance with relevant regulations. They carefully reviewed the issues raised by the Board of Directorsand the professional committees and actively expressed opinions and views. With rich professional experience, theindependent directors of the Company expressed their thoughtful, rational and independent opinions on each issuethat required their judgements. They also put forward many instructive and reasonable suggestions on the Company’sdevelopment strategy and standardized operation, which played a catalytic role in scientific decision-making of theCompany. For more details, please refer to the 2022 Independent Directors’ Debriefing Report published onwww.cninfo.com on the same day as this annual report.
Section VII. Performance of duties by special committees under the Board during the reportingperiod
| Committee | Member | Times of meetings | Convening date | Contents of meetings | Important comments and suggestions put forward | Other particulars about the performance of duties | Details of objections（if any） |
| Audit Committee | Shi Lei, Jiang Tao, Chen Yuqin | 6 | January 24, 2022 | 1.Proposal on Election of the Chairman and Members of the Audit Committee of the Sixth Session of the Board of Directors 2.The Company's Internal Audit Report for Q4 2021 3.The Company's Annual Internal Audit Report for 2021 | The Company was advised to strengthen internal control to prevent operational risks. | Performing duties in strict accordance with laws and regulations | None |
| April 27, 2022 | 1. 2021 Annual Self-evaluation Report on Internal Control 2.Review on 2021 Annual Audit Report 3.Proposal on the Estimated Amount of Daily Related- | The Company was advised to enhance efforts to reduce costs and increase efficiency, maintain | Performing duties in strict accordance with | None |
Party Transactions in 2022
4.Proposal on Appointment
of the Audit Institution in2022
5.Job Evaluation of the Audit
Institution in 2021
6.Full Text and Main Body
of the 2022 First QuarterReport
7.2022 First Quarter Internal
Audit Report
refined operations,strengthen capitalplanning andcontrol, remaincautious oninvestment, andmaintain a healthyfinancial structureand cash flow tocope with complexexternalenvironmentalimpacts.
| laws and regulations | ||||
| August 18, 2022 | 1.Full Text and Abstract of 2022 Semi-annual Report 2.2022 Second Quarter Internal Audit Report | The Company was advised to balance income and costs, be profit-oriented, and optimize product structure | Performing duties in strict accordance with laws and regulations | None |
| October 20, 2022 | 1. Full Text and Main Body of 2022 Third Quarter Report 2.2022 Third Quarter Internal Audit Report | None | Performing duties in strict accordance with laws and regulations | None |
| November 2, 2022 | Proposal on the Company's controlling shareholder providing loans to the Company's wholly-owned subsidiaries | The Company was advised to actively raise funds through multi-channels to solve the current problems of temporary financial pressure. | Performing duties in strict accordance with laws and regulations | None |
| December 15, 2022 | 1. Proposal on the Company's controlling shareholder providing loans to the Company's wholly-owned subsidiaries 2.2022 Annual Internal Audit | None | Performing duties in strict accordance with laws and | None |
| Plan | regulations | ||||||
| Remuneration and Appraisal Committee | Chen Yuqin, Jiang Tao, Wang Zhendong | 2 | January 24, 2022 | Proposal on Election of the Chairman and Members of the Remuneration and Appraisal Committee of the Sixth Board of Directors | None | Performing duties in strict accordance with laws and regulations | None |
| April 25, 2022 | Proposal on the 2022 Remuneration Plan for the Company’s Directors, Supervisors and Senior Executives | The Company was advised to actively motivate employees through multiple channels to improve employees' sense of belonging and achievement | Performing duties in strict accordance with laws and regulations | None | |||
| Nomination Committee | Zhang Xuanming, Jiang Tao, Li Yongxin | 3 | January 6, 2022 | Proposal on Election of Non-Independent Director Candidates for the Sixth Board of Directors Proposal on Election of Independent Director Candidates for the Sixth Board of Directors | None | Performing duties in strict accordance with laws and regulations | None |
| January 17, 2022 | Proposal on the Election of the Chairman and Members of the Nomination Committee of the Sixth Board of Directors | None | Performing duties in strict accordance with laws and regulations | None | |||
| April 11, 2022 | Proposal on the Performance of Duties of Professional Committees under the Board of Directors | None | Performing duties in strict accordance with laws and regulations | None |
| Strategy and Investment Committee | Li Yongxin, Shi Lei and Chen Yuqin | 2 | January 17, 2022 | Proposal on the Election of the Chairman of the Strategy and Investment Committee of the Sixth Board of Directors | None | Performing duties in strict accordance with laws and regulations | None |
| April 27, 2022 | 1. .Summary of the Company's 2021 Business Condition and 2022 Business Strategy Analysis 2.Proposal on the Company's 2022 Profits Distribution | The Company was advised to actively rectify the problems that occurred in its business development over the past year, make up for the deficiencies in the management process, improve the weak parts in the budget work and fully launch the new year's business promotion plan. Measures, including comprehensive adjustment of the product structure, internal optimization by reducing cost and enhancing efficiency , accelerated online and offline integration and rapid deployment of new vocational education business, should be taken to facilitate the Company to return to the development track as soon as | Performing duties in strict accordance with laws and regulations | None |
possible.
Section VIII. Performance of duties by the Supervisory CommitteeWere there any risks in the Company according to the supervision of the Supervisory Committee during the reportingperiod?
□ Yes √ No
The Supervisory Committee raised no objection to matters under supervision during the reporting period.Section IX. Employees of the Company
1. Number of employees, role type, and educational background
| Number of current employees of the parent company at the end of the reporting period (person) | 0 |
| Number of current employees of the major subsidiaries at the end of the reporting period (person) | 22,652 |
| Total number of current employees at the end of the reporting period (person) | 22,652 |
| Total number of employees receiving remuneration from the Company during the reporting period (person) | 22,652 |
| Number of retired employees for which the parent company and major subsidiaries need to bear the expenses (person) | 0 |
| Role type | |
| Category | Number (person) |
| Management personnel | 2,337 |
| R&D staff | 1,694 |
| Teachers | 9,024 |
| Customer service staff | 2,494 |
| Marketing staff | 7,103 |
| Total | 22,652 |
| Educational background | |
| Category | Number (person) |
| Master’s degree and above | 4,363 |
| Bachelor’s degree | 16,739 |
| Postsecondary specialised college | 1,538 |
| Secondary specialised school and below | 12 |
| Total | 22,652 |
2. Remuneration policy
During the reporting period, the Company, based on the post value, set salary difference scientifically and furtherimproved the performance appraisal system of human resources. The Company regularly and comprehensivelyevaluated employees’ working skills and their recognition of corporate culture by an evaluation method based onquantitative indicators of performance and qualitative standards to ensure that both the work results and growth ofemployees were given attention to. The Company attracts and retains its core talents through a diversifiedperformance-oriented incentive mechanism, so that the core personnel can be more closely aligned with the interestsof the Company and its shareholders. In this way, the Company's long-term operating performance will be driven togrow continuously.
3. Training plan
During the reporting period, the Company continuously invested high-quality resources in optimizing the trainingsystem and enhancing the capabilities of the teaching team. Employees are well supported with knowledge resourcesand abundant learning choices to develop their talents and careers. The Company accelerated the trend of onlinelearning for all staff. By integrating online and offline resources, the Company has realized the plan of the wholecurriculum system sharing, empowering employees with more opportunities to learn and grow.In terms of training organizing, the Company mobilized human resources department both at the headquarter andbranches as well as management personnel to ensure that the staff trainings are well organized. The human resourcesdepartment at the headquarter are responsible for the “planning, research and coordination” of the Company’s overalltraining, focusing on the construction of training resources and training platform as well as the design andimplementation of key talent training projects. The human resources departments of branches are responsible forexploring the training needs of employees, providing training solutions, executing the training plans, and focusingon the daily-basis operation and training. Management personnel are responsible for employees’ ability-building,taking training of team members as part of their work tasks, so as to foster more talents for the Company.
4. Labor outsourcing
□ Applicable √ Not applicable
Section X. Profit distribution of the Company and conversion of capital reserve into share capital
The formulation, implementation and adjustment of the profits distribution policy, especially the cash dividends policy, during the
reporting period.
□ Applicable √ Not applicable
The Company was profitable during the reporting period and the parent company’s profit available for distribution to shareholders waspositive but did not propose a plan for the distribution of cash dividend.
□ Applicable √ Not applicable
Profit distribution and conversion of capital reserve into share capital during the reporting period
□ Applicable √ Not applicable
The Company plans not to distribute cash dividends or bonus shares, nor to increase share capital by convertingcapital reserve.Section XI. Implementation of the Company’s equity incentive plan, employee stock ownershipplan or other employee incentive measures
Applicable √Not applicableThere were no equity incentive plan, employee stock ownership plan or other employee incentive measures being implemented duringthe reporting period of the Company.Section XII. Establishment and implementation of the Company’s internal control system duringthe reporting period
1. The establishment and implementation of the Company’s internal controlDuring the reporting period, in accordance with the Basic Standards for Enterprise Internal Control as well as itscorresponding supporting regulations, and the Company’s Regulations of Internal Audit, based on regular supervisionand special supervision of internal control, the Company, adhering to the risk-oriented principle, continuouslyimproves and optimizes its internal control system to adapt to the ever-changing external environment and meet theinternal management requirements. The Company’s Board of Directors establishes, improves and effectivelyimplements internal control, evaluates its effectiveness, and truthfully discloses the evaluation report on internalcontrol, in accordance with the regulations of the Company’s internal control standard system; the SupervisoryCommittee supervises the Board of Directors on the establishment and implementation of internal control. TheCompany’s management personnel take responsibility for organizing and leading the regular operation of theCompany’s internal control. The Company established an internal audit department equipped with full-time auditorsand formulated internal audit-related management regulations. The internal audit department is responsible for andreports to the Audit Committee of the Board of Directors; in accordance with the requirements of national laws, rulesand regulations, the internal audit department independently and objectively exercises its powers of internal audit,
inspects and supervises the internal control of the Company and its controlled subsidiaries, conducts internal auditfor their finance and operations, provides audit suggestions,, and implements the internal control rectification.
2. Particulars about material weakness found in the Company’s internal control during the reporting period
□ Yes √ No
Section XIII. The Company’s management and control of subsidiaries during the reportingperiodNot applicableSection XIV. Self-evaluation report or audit report on internal controls
1. Self-evaluation report on internal controls
| Disclosure date of full text of self-evaluation report on internal control | April 28, 2023 | |
| Disclosure index of full text of self-evaluation report on internal control | CNINFO (www.cninfo.com.cn) Offcn Education Technology Co., Ltd. 2022 Self-evaluation Report on Internal Control | |
| Proportion of assets evaluated in total assets stated in the consolidated financial statement of the Company | 100.00% | |
| Proportion of operating income evaluated in total operating income stated in the consolidated financial statement of the Company | 100.00% | |
| Deficiency Standards | ||
| Category | Financial Report | Non-Financial Report |
| Qualitative criteria | Material Weakness: one deficiency, or a combination of deficiencies in internal control that may result in a significant deviation from the control objectives of the Company. Those with the following characteristics should be recognized as material weakness: ①Fraud of directors, supervisors and senior executives; ②Correction of misstatement in previously | Material Weakness: ①Severe violations of national laws and regulations in the Company’s operation; ②Negative news frequently disclosed by the media and the negative impact has not been eliminated; ③Serious loss of middle and senior management personnel and senior technical personnel; ④Lack or ineffectiveness of policy for major |
| issued financial statements; ③Material misstatement in current financial statements that are not detected by the Company’s internal control; ④Invalid supervision of internal control over financial reporting by the Company’s Audit Committee and internal audit department. Significant Deficiency: one deficiency, or a combination of deficiencies in internal control that is less severe than a material weakness, yet may still result in a deviation from control objectives of the Company. Controllable Deficiency: Other internal control deficiencies that do not meet the standards of material weakness or significant deficiency. | business; ⑤Rectifications are not made for the material weaknesses or significant deficiencies in the Company’s internal control. Significant Deficiency: one deficiency, or a combination of deficiencies in internal control that is less severe or has minor economic consequences than a material weakness, yet may still result in a deviation from control objectives of the Company. Controllable Deficiency: Other internal control deficiencies that do not meet the standards of material weakness or significant deficiency. | |
| Quantitative criteria | Material Weakness: Misstatements account for more than 5% of total profits. Significant Deficiency: Misstatements account for 2% to 5% (including 5%) of total profits. Controllable Deficiency: Misstatements account for less than 2% (including 2%) of total profits. | Refer to the quantitative criteria for the evaluation of internal control deficiencies in financial reports. |
| Number of material weaknesses in the financial report | 0 | |
| Number of material weaknesses in the none-financial report | 0 | |
| Number of significant deficiencies in the financial report | 0 | |
| Number of significant deficiencies in the non-financial report | 0 | |
2. Audit report on internal control
√Applicable Not applicable
| Deliberative opinions section in audit report on internal control | |
| Offcn Education maintained effective internal control related to financial reporting in all important respects on December 31, 2022 in accordance with the Basic Standards for Enterprise Internal Control and relevant regulations. | |
| Disclosure of audit report on internal control | Disclosure |
| Disclosure date of the full text of audit report on internal control | April 28, 2023 |
| Disclosure index of the full text of audit report on internal control | Offcn Education Technology Co., Ltd. 2022 Annual Audit Report on Internal Control disclosed on www.cninfo.com.cn |
| Types of opinions on audit report on internal control | standard unmodified opinion |
| Whether there are material deficiencies in non-financial reporting | No |
Whether the accounting firm issued the audit report on internal control with non-standard opinions
□Yes√No
Whether the audit report on internal control issued by the accounting firm is consistent with the self-evaluationreport of the board of directors
√Yes □No
Section XV. Special actions on self-examination and rectification of the listed Company’sgovernanceNot applicable
Chapter 5 Environmental and Social ResponsibilitiesSection I. Environmental protectionDo the listed Company and its subsidiaries belong to the major pollutant discharge units announced by the Ministryof Ecology and Environment？
□ Yes √ No
Situations of receiving administrative penalty due to environmental issues during the reporting periodNot applicableOther environmental information disclosed in reference with major pollutant discharge unitsThe Company always practices its corporate social responsibilities, complies with national and local laws andregulations on environmental protection and emission targets, conscientiously implements various environmentalprotection management regulations, and continuously promotes energy conservation, emission reduction andenvironmental protection by promoting paperless operations. At the same time, the Company also integrates andimplements the concept of environmental protection into all levels of strategic decision-making and business, andencourages its employees to carry out green volunteer activities to jointly contribute to the harmonious developmentof society. During the reporting period, the Company had no violations of environmental protection laws andregulations and no disputes over pollution accidents, and was not subject to administrative penalties for violatingrelevant environmental protection laws and regulations.Measures taken to reduce carbon emissions during the reporting period and their effects
□ Applicable √ Not applicable
Reasons of not disclosing other environmental information
□ Applicable √ Not applicable
Section II. Social Responsibilities
For details of the Company's performance of social responsibilities, please refer to the 2022 Annual Report onSocial Responsibilities of OFFCN EDU disclosed by the Company on CNINFO ( www.cninfo.com) on the sameday.
Section III. Conducts to consolidate and expand the achievements of poverty alleviation andrural revitalization
□ Applicable √ Not applicable Chapter 6 Significant EventsSection I. Fulfillment of commitments
1. Commitments that the Company’s actual controllers, shareholders, related parties, acquirers, the Companyitself and other relevant parties have fulfilled during the reporting period and have not fulfilled as of the endof the reporting period
√Applicable □ Not applicable
The commitments made by all parties involved in major asset restructuring are as follows:
| Commitment Party | Commitment Type | Main contents of commitment | Commitment time | Commitment period | Performance |
| Yaxia Industrial, Zhou Xiayun, Zhou Hui, Zhou Li, Phase-I employee stock ownership plan | Letter of commitment on lock-up period | 1. Within 36 months after the completion of the transaction (starting from the date of the listing of shares issued in this transaction), the shares of Yaxia Auto that held by the company/myself/the plan with rights and interests shall not be transferred. 2. After the completion of the transaction, the shares held by the company/myself/the plan, derived from Yaxia Auto shares due to the distribution of stock dividends and the conversion of capital reserve to share capital, shall also comply with the above-mentioned arrangement of restricted sale of shares. 3. If the China Securities Regulatory Commission (CSRC) and/or Shenzhen Stock Exchange (SSE) 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 arrangement according to the latest regulations of the CSRC and/or SSE. If violating the above commitments, the company/I/the plan will bear all losses caused to Yaxia Auto. | May 4, 2018 | Jan. 31, 2022 | Fulfilled |
| Li Yongxin | Letter of Commitment on lock-up | 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 | Apr. 27, 2018 | Jan. 31, 2022 | Fulfilled |
| period for subscription of shares | 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 shall be automatically extended for 6 months. (If dividend or bonus shares distribution, conversion of capital reserve or allotment by the listed Company occurred during the above-mentioned period, the aforementioned issue price shall be calculated based on the price adjusted by factors as ex-dividend and ex-rights, etc.) 2. As the transferee of 72,696,561 Yaxia Auto shares held by Anhui Yaxia Industrial Co., Ltd., I shall not transfer such shares within 36 months from the registration date of such shares in my securities account. 3. The aforesaid arrangement of share lock-up 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. 4. I promise to abide by the following provision: if the transaction is investigated by judiciary authorities or CSRC 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. 5. After the completion date of this transaction, my increased shares due to bonus shares distribution or conversion of capital reserve of the listed Company shall also comply with the foregoing requirements. 6. If the aforementioned lock-up period arrangement does not comply with the latest laws and regulations or the latest regulatory requirements of the securities regulatory institution, I agree to implement the arrangement in accordance with the latest laws and |
| regulations and the requirements of the securities regulatory institution. 7. After the lock-up period expires, it will be implemented in accordance with the relevant regulations of CSRC and SSE. | |||||
| Lu Zhongfang | 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 shall be automatically extended for 6 months. (If dividend or bonus shares distribution, conversion of capital reserve or allotment by the listed company occurred during the above-mentioned period, the aforementioned issue price shall be calculated based on the price adjusted by factors as ex-dividend and ex-rights, etc.) 2. The aforesaid arrangement of share lock-up 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 CSRC 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 distribution or conversion of capital reserve of the listed Company shall also comply with the foregoing requirements. 5. If the aforementioned lock-up period | April 27, 2018 | Jan 31, 2022 | Fulfilled |
| arrangement does not comply with the latest laws and regulations or the latest regulatory requirements of the securities regulatory institution, I agree to implement the arrangement in accordance with the latest laws and regulations and the requirements of the securities regulatory institution. 6. After the lock-up period expires, it will be implemented in accordance with the relevant regulations of CSRC and SSE. | |||||
| Kerui Technology Innovation | Letter of commitment on lock-up period for subscription of shares | 1. The shares of the listed Company subscribed by Kerui Technology Innovation 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 Kerui Technology Innovation shall be automatically extended for 6 months. (If dividend or bonus shares distribution, conversion of capital reserve or allotment by the listed Company occurred during the above-mentioned period, the aforementioned issue price shall be 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 CSRC 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 enterprise’s increased shares due to bonus shares distribution or conversion of capital reserve of the listed Company shall also comply with the foregoing requirements. 4. If the aforementioned lock-up period arrangement does not comply with the latest laws | July 27, 2018 | Jan. 31, 2022 | Fulfilled |
| and regulations or the latest regulatory requirements of the securities regulatory institution, the enterprise agrees to implement the arrangement in accordance with the latest laws and regulations and the requirements of the securities regulatory institution. 5. After the lock-up period expires, it will be implemented in accordance with the relevant regulations of CSRC and SSE. | |||||
| Offcn Partnership | Letter of commitment on the lock-up of shares | Within 36 months from the date of the transfer of 80,000,000 shares of Yaxia Auto held by Anhui Yaxia Industrial 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 distribution, conversion of capital reserve or allotment of shares by Yaxia Auto, shall also comply with the foregoing requirements. If the enterprise violates commitments listed above, it will bear all losses caused to Yaxia Auto. | April 27, 2018 | Jan 31, 2022 | Fulfilled |
| 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 Auto held by Anhui Yaxia Industrial Co.,Ltd. to Beijing Offcn Future Information Consulting Center (Limited Partnership), I or the enterprise 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 Auto held by Beijing Offcn Future Information Consulting Center (Limited Partnership). | July 27, 2018 | Jan 31, 2022 | Fulfilled |
| Li Yongxin, Lu Zhongfang, Wang Zhendong, Offcn Partnership | Letter of commitment on maintaining independence of the listed Company | 1. Guarantee the independence of the listed Company’s personnel (1) It is guaranteed that after the completion of this transaction, the personnel, human resources and remuneration management of the listed Company shall be completely independent from myself/Offcn Partnership, and from other related parties, such as companies, enterprises or economic organizations, controlled by myself/Offcn Partnership. (2) It is guaranteed that after the completion of this | April 27, 2018 | Long-term | Under normal implementation |
| (4) It is guaranteed that after the completion of this 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 this 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 Li Yongxin serving as a director in Kunming Wuhua Offcn training school, which is affiliated to Offcn Online, I neither hold any full-time or part-time positions nor provide consultancy at any companies or enterprises, which conducts competitive businesses with the listed Company, Offcn Ltd. and their affiliates. I also do not directly or indirectly hold any equity or shares of companies or enterprises conducting the 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 Beijing is 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 | September 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 transfer of Kunming Wuhua Offcn Training School: within 12 months | As of the end of the reporting period, Kairuier Training School in Haidian District of Beijing had been transferred to an unrelated third party. Other commitments are under normal implementation |
| signing this commitment letter, I will urge Offcn Online to cancel 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 formal promulgation and implementation of the amended Implementing Regulations of the Law on the Promotion of Private Education of the People’s Republic of China (hereinafter referred to as Implementing Regulations) and the promulgation and implementation of the supporting regulations formulated by the relevant local education authorities in accordance with the amended Implementing Regulations. 3. As of the date of signing this commitment letter, Offcn Ltd. as the organizer intends to transfer its 100% of the organizer’s rights of 33 private schools for non-academic qualifications to Li Yongxin and singed the Agreement on Transfer of Organizer’s Rights of Private Non-enterprise Schools Affiliated to Beijing Offcn Education Technology Co., Ltd. Li Yongxin is willing to entrust the transferred 33 private non-enterprise schools to Offcn Ltd. and signed the Trusteeship Agreement of Private Non-enterprise Schools. 4. After the completion of this transaction, except for the 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 or 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 or competitive businesses with the listed Company, including: (1) 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 | after the formal promulgation and implementation of the Implementing Regulations and the promulgation and implementation of the supporting regulations formulated by the relevant local education authorities in accordance with the amended Implementing Regulations. |
| 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 starting from the signing date of the commitment letter, to the time when I cease to be the actual controller of the listed Company. | |||||
| Wang Zhendong, Offcn Partnership | 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, my close relatives or Offcn Partnership, 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 Wang Zhendong serving as a director in Kairuier Training School in Haidian District of Beijing, which is 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 no longer hold the post as a director in the school), I neither hold any full-time or part-time positions nor provide consultancy at any companies or enterprises, which conducts competitive businesses with the listed Company, Offcn Ltd. and their affiliates. I also do not directly or indirectly hold any equity or shares of companies or enterprises conducting the same, similar or related businesses as the listed Company, Offcn Ltd. and its affiliates. 2. After the completion of this transaction, I/Offcn Partnership promise(s) 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, my close relatives or Offcn Partnership shall not in any way | April 27, 2018 | Long-term | Under normal implementation |
| 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 Company and its affiliates. 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 the above-mentioned commitments. | |||||
| Li Yongxin, Lu Zhongfang | Letter of Commitment on reducing and regulating related-party transactions | 1. After the completion of this transaction, 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 or 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 completion of this transaction, 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 or my close relatives, will sign related-party transaction agreements 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 this 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 or other assets under inequal | July 27, 2018 | Long-term | Under normal implementation |
| conditions or engage in any behaviors that would damage the interests of the listed Company. 4. I will urge my close relatives and other companies, enterprises and other economic organizations controlled by myself or my close relatives to fulfill the aforementioned commitments. 5. If I, my close relatives and other companies, enterprises and other economic organizations controlled by myself or my close relatives violate the above commitments, the profits 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 written notice from the listed Company, compensation shall be made in cash. 6. The commitment is valid starting from the signing date of the commitment letter, to the time when I cease to be the actual controller of Yaxia Auto or have any other related relationship with Yaxia Auto. | |||||
| Wang Zhendong, Aerospace Industry, Offcn Partnership | Letter of Commitment on reducing and regulating related-party transactions | 1. After the completion of this transaction, during the time of being the actual controller/shareholder of the listed Company, I, my close relatives, Aerospace Industry, Offcn Partnership 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 and its affiliates. 2. After the completion of this transaction, for the related-party transactions which are unavoidable or reasonable to happen with the listed Company and its affiliates, I, my close relatives, Aerospace Industry, Offcn Partnership and other companies, enterprises or economic organizations controlled by myself, my close relatives, Aerospace Industry or Offcn Partnership, will 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 and fulfilled in accordance with the relevant laws, | April 27, 2018 | Long-term | Under normal implementation |
| regulations and regulatory documents. 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 this transaction, I/Aerospace Industry/Offcn Partnership 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 or other assets underunequal conditions or engage in any behaviors that would damage the interests of the listed Company. 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 | ||
2. Should there be any profit forecast for any of the Company’s assets or projects and the current reportingperiod is still within the forecast period, the Company shall explain whether the performance of the asset orproject matches with the profit forecast and why.
□Applicable √Not applicable
Section II. The capital occupation of the listed Company for non-operating purposes by thecontrolling shareholder and its related parties
□Applicable √Not applicable
During the reporting period, there was no such situation for the Company.Section III. Illegal external guarantee
□Applicable √Not applicable
There is no illegal external guarantee in the Company during the reporting period.
Section IV. Statement of the Board of Directors on the latest "non-standard audit report"
□Applicable √Not applicable
Section V. Statement of the Board of Directors, Supervisory Committee, and independentdirectors (if any) on the accounting firm's "non-standard audit report" during the reportingperiod
□Applicable √Not applicable
Section VI. Particulars of changes in accounting policies and accounting estimates or correctionsof major accounting errors compared with the financial report of the previous year
□Applicable √Not applicable
There is no changes in accounting policies and accounting estimates or corrections of major accounting errors during the reportingperiod of the Company.Section VII. Explanation of the changes in the scope of the consolidated statement comparedwith the financial statements of the previous year
√ Applicable □ Not applicable
| Full name of subsidiary | Ratio of shareholding (%) | Reasons for changes |
| 1. Sichuan Offcn Luming Cultural Media Co., Ltd. | 100.00 | Newly established |
| 2. Beijing Offcn Shengjing Education Technology Co., Ltd | 100.00 | Newly established |
| 3. Henan Offcn Education Consulting Co., Ltd | 100.00 | Newly established |
4. Lhasa Offcn Training School Co., Ltd
| 4. Lhasa Offcn Training School Co., Ltd | 100.00 | Newly established |
| 5. Tianjin Offcn Technology Co., Ltd | 100.00 | Newly established |
| 6. Tianjin Jinnan Offcn LexueTraining School Co., Ltd | 100.00 | Newly established |
| 7. Tianjin Baodi Offcn Lexiang Training School Co., Ltd. | 100.00 | Newly established |
| 8. Tianjin Jizhou Offcn LechengTraining School Co., Ltd. | 100.00 | Newly established |
9. Nantong Sigang Huizhi Technology Co., Ltd
| 9. Nantong Sigang Huizhi Technology Co., Ltd | 51.00 | Newly established |
Section VIII. Appointment and dismissal of the CPA firmCPA firm appointed at present
| Name of the domestic CPA firm | Baker Tilly China Certified Public Accountants LLP |
| Remuneration of domestic CPA firm (RMB MillionYuan) | 1.80 |
| Consecutive years of the audit service of domestic CPA firm | 5 years |
| Name of the CPAs in domestic CPA firm | Zhou Baiming, Li Qiang |
| Consecutive years of audit service of the CPAs of domestic CPA firm | 5 consecutive years for Zhou Baiming and 2 years for Li Qiang |
Whether to reappoint another CPA firm in the current periodYes √ NoAppointment of internal control auditing CPA firms, financial consultants or sponsors
□ Applicable √ Not applicable
Section IX. Facing delisting after the disclosure of the annual report
□ Applicable √ Not applicable
Section X. Bankruptcy and reorganization related matters
□ Applicable √Not applicable
There is no such situation of bankruptcy and reorganization of the Company during the reporting period.
Section XI. Major litigation and arbitration matters
□ Applicable √Not applicable
There is no major litigation or major arbitration during the reporting period.During the reporting period, other litigation and arbitration matters of the Company and its subsidiaries areas follows:
1. During the reporting period, the amount of litigation involved in closed cases was RMB 17.8630 million yuan, andthe actual amount of judgments in effective legal documents was approximately RMB 1.8651 million yuan. Theresults of the litigation cases had no significant impact on the Company's operations;
2. At the end of the reporting period, the amount of litigation involved in unsettled cases was RMB 41.9088 millionyuan, and the amount of litigation involved in these pending cases accounted for 5.37% of the unaudited net assetsattributable to shareholders of the listed Company in 2022, which had no significant impact on the Company'soperations.
Section XII. Penalties and rectifications
√ Applicable □ Not applicable
| Name | Type | Reason | Type of investigation and punishment | Conclusion (if any) | Date of disclosure | Index of disclosure |
| Offcn Education Technology Co., Ltd. | Other | Failing to disclose related-party transaction information and violating the laws and regulations of information disclosure | Filed and investigated by China Securities Regulatory Commission (CSRC) or punished administratively | Ordered to make corrections, given a warning, and imposed a fine of RMB 4 million | Apr. 28, 2022 | The Announcement on Offcn Education Technology Co., Ltd. and the Relevant Parties’ Reception of Decision of Administrative Penalty (No. 2022-032) disclosed on www.cninfo.com.cn. |
| Li Yongxin | Actual controller | Failing to disclose related-party transaction information and violating the laws and regulations of information disclosure | Filed and investigated by China Securities Regulatory Commission (CSRC) or punished administratively | Given a warning, and imposed a fine of RMB 2 million | Apr. 28, 2022 | The Announcement on Offcn Education Technology Co., Ltd. and the Relevant Parties’ Reception of Decision of Administrative Penalty (No. 2022-032) disclosed on www.cninfo.com.cn |
| Shi Lei | Director | Failing to disclose related-party transaction information and violating the laws and regulations of information disclosure | Filed and investigated by China Securities Regulatory Commission (CSRC) or punished administratively | Given a warning, and imposed a fine of RMB 2 million | Apr. 28, 2022 | The Announcement on Offcn Education Technology Co., Ltd. and the Relevant Parties’ Reception of Decision of Administrative Penalty (No. 2022-032) disclosed on www.cninfo.com.cn |
| Wang Zhendong | Senior executive | Failing to disclose related-party transaction information | Filed and investigated by China Securities Regulatory Commission | Given a warning, and imposed a fine of RMB 1 million | Apr. 28, 2022 | The Announcement on Offcn Education Technology Co., Ltd. and the Relevant Parties’ Reception of Decision of Administrative Penalty (No. 2022-032) disclosed on |
| and violating the laws and regulations of information disclosure | (CSRC) or punished administratively | www.cninfo.com.cn. | ||||
| Gui Hongzhi | Senior executive | Failing to disclose related-party transaction information and violating the laws and regulations of information disclosure | Filed and investigated by China Securities Regulatory Commission (CSRC) or punished administratively | Given a warning, and imposed a fine of RMB 0.5 million | Apr. 28, 2022 | The Announcement on Offcn Education Technology Co., Ltd. and the Relevant Parties’ Reception of Decision of Administrative Penalty (No. 2022-032) disclosed on www.cninfo.com.cn. |
| Luo Xue | Senior executive | Failing to disclose related-party transaction information and violating the laws and regulations of information disclosure | Filed and investigated by China Securities Regulatory Commission (CSRC) or punished administratively | Given a warning, and imposed a fine of RMB 0.5 million | Apr. 28, 2022 | The Announcement on Offcn Education Technology Co., Ltd. and the Relevant Parties’ Reception of Decision of Administrative Penalty (No. 2022-032) disclosed on www.cninfo.com.cn. |
Particulars on rectification
√ Applicable □ Not applicable
On April 27, 2022, the Company and the relevant parties received the official Decision of Administrative Penaltyfrom Anhui Securities Regulatory Bureau of CSRC. In response to this administrative penalty, the Company hascompleted the rectification in strict accordance with the requirements. The Company will learn lessons, strengthenthe standardization of internal governance, strictly abide by relevant laws and regulations, and comprehensivelyimprove the level of compliance management and internal control to avoid the recurrence of similar problems.
Section XIII. Integrity of the Company and its controlling shareholders and actual controllers:
□ Applicable √Not applicable
Section XIV. Significant related-party transactions
1. Related-party transactions relevant to daily operations
√Applicable □Not applicable
| Related party | Ji'an Jingkai Lixiangxue Financial Information Service Co., Ltd. / Shanghai Beiding Network Technology Co., Ltd. | Total |
| Relationship | Enterprise controlled by the director of the Company | |
| Type of related-party transaction | Purchasing products and goods from the related party | |
| Content of related-party transaction | Commission fee | |
| Pricing principle for related-party transaction | Fair market pricing | -- |
| Price of related-party transaction | Fair market pricing | -- |
| Amount of related-party transaction (RMB 10 thousand yuan) | 7,801.04 | 7,801.04 |
| Proportion of the amount of similar transactions | 5.77% | -- |
| Approved transaction limit (RMB 10 thousand yuan) | 7,800 | 7,800 |
| Whether exceeding the approved transaction limit | Yes | -- |
| Settlement method of related-party transaction | Wire transfer | -- |
| Available market price for similar transactions | None | -- |
| Date of disclosure | April 29，2022 | -- |
| Index of disclosure | CNINFO (http://www.cninfo.com.cn) Announcement on the Estimated Limit of Daily Related-party Transactions in the Year of 2022 (No. 2022-035) | -- |
| Details of large sales returns | N/A | |
| Actual performance during the reporting period of the total amount of the daily related-party transactions estimated by categories in this period (if any) | N/A | |
| Reasons for large differences between transaction prices and market reference prices (if applicable) | N/A | |
2. Related-party transactions arising from acquisition and sale of assets or equity
□ Applicable √Not applicable
There is no related-party transaction arising from acquisition and sale of assets or equity of the Company during the reporting period.
3. Related party transactions of joint foreign investments
□ Applicable √ Not applicable
There is no related-party transaction of joint foreign investments of the Company during the reporting period.
4. Related credit and debt transactions
√ Applicable □ Not applicable
Debt payable to related parties:
| Related party | Relationship | Reason | Opening balance(RMB 10 thousand yuan) | Newly added amount in current period (RMB 10 thousand yuan) | Repayment amount in current period (RMB 10 thousand yuan) | Interest rate | Interest in current period (RMB 10 thousand yuan) | Closing balance (RMB 10 thousand yuan) |
| Lu Zhongfang | Person in concert with the actual controller | Shareholder loans | 0 | 95,924 | 0 | 0.00% | 0 | 95,924 |
| The influence of related debt on the Company’s operation results and financial status | Enhancing the liquidity of the Company’s funds. | |||||||
5. Transactions with related financial companies
□ Applicable √ Not applicable
There is no deposit, loan, credit or other financial business between the Company and its related financial companies or other relatedparties.
6. Transactions between the financial company controlled by the Company and related parties
□ Applicable √ Not applicable
There is no deposit, loan, credit or other financial business between the financial company controlled by the Company and relatedparties.
7. Other significant related-party transactions
□ Applicable √ Not applicable
There is no other significant related-party transaction in the Company during the reporting period.Section XV. Major contracts and their performance
1. Trusteeship, contracting and leasing matters
(1) Trusteeship
√Applicable □ Not applicable
Details of trusteeshipOn September 20, 2018, Offcn Ltd. and Li Yongxin signed Agreement on Transfer of Organizer’s Rights of Non-enterprise Private Schools Affiliated to Beijing Offcn Education Technology Co., Ltd.. All 100% rights of organizersas of September 20, 2018 were to be transferred to Li Yongxin. On the same day, Li Yongxin and Offcn Ltd. signedthe Trusteeship Agreement of Private Non-enterprise Schools stipulating that Li Yongxin would entrust thetransferred private non-enterprise schools to Offcn Ltd. for management. The period of trusteeship started from thedate when Li Yongxin paid all the transfer price to the date when the private non-enterprise schools’ 100% rights oforganizers were transferred to the unrelated third party or canceled (Note: within 12 months after the revisedImplementation Regulations was officially promulgated and the relevant local education authorities passed thesupporting regulations in accordance with the revised Implementation Regulations, Li Yongxin transferred 100% ofthe owner’s rights to the unrelated third party or canceled them.)Projects with trusteeship that profits or losses reached more than 10% of the total profits of the Company of thereporting period
□ Applicable √Not applicable
There was no project with trusteeship that profit or loss reached more than 10% of the total profits of the Companyduring the reporting period.
(2) Contracting
□ Applicable √Not applicable
There was no contracting of the Company during the reporting period.
(3) Leasing
□ Applicable √Not applicable
There was no leasing of the Company during the reporting period.
2. Major guarantee
□ Applicable √Not applicable
There was no major guarantee of the Company during the reporting period.
3. Particulars about entrusted cash assets
(1) Particulars about entrusted financial management
√Applicable □ Not applicable
Particulars about entrusted financial management during the reporting period
Unit: RMB 10 thousand yuan
| Type | Source of entrusted financing | Amount of entrusted financing | Undue balance | Overdue amount yet to be recovered | Impairment accrued of the overdue financial product yet to be recovered |
| Bank financial product | Self-owned fund | 10,870 | 0 | 0 | 0 |
| Total | 10,870 | 0 | 0 | 0 | |
Particulars of high-risk entrusted financial management with a large single amount, low security or poor liquidity
□ Applicable √ Not applicable
It is estimated that the principal of the entrusted financing cannot be recovered or there are other cases that may causeimpairments to the entrusted financing.
□ Applicable √Not applicable
(2) Entrusted loans
□ Applicable √Not applicable
There is no entrusted loan of the Company during the reporting period.
4. Other significant contracts
√Applicable □ Not applicable
Section XVI. Other significant events
√Applicable □ Not applicable
On December 15, 2021, the Company received the Notice of Filing (No. SR Filing 0232021010) from the CSRCfor being suspected of failing to disclose related-party transaction information and violating the laws and regulationsof information disclosure.On April 27, 2022, the Company and the relevant parties received the official Decision of Administrative Penaltyfrom the Anhui Securities Regulatory Bureau, which determines Offcn Edu, its subsidiaries Beijing Offcn EducationTechnology Co., Ltd. and Liaoning Zhongcheng Real Estate Development Co.,Ltd. constitute a related-partyrelationship with Shaanxi Guancheng Industrial Co., Ltd., Beijing Chuangsheng Construction DecorationEngineering Co., Ltd., Shanghai Beiding Network Technology Co., Ltd., Ji'an Jingkai Lixiangxue FinancialInformation Service Co., Ltd. and Liaoning Hanhui Industrial Co., Ltd.. The total amount involved in relatedtransactions was RMB 1232.395 million yuan, including RMB 196.335 million yuan in year 2019 and RMB 1036.060million yuan in year 2020, which account for 6.65% and 30.19% of the net assets of Offcn Edu in the latest periodrespectively. The Company did not disclose the above-mentioned information in accordance with relevant laws andregulations and there was a material omission of the Company’s information disclosure. A warning was given to anda fine was imposed on the Company and the relevant persons responsible for the situation, and correspondingrectification is required. Specific information is stated in the announcement (No. 2022-032) disclosed by theCompany on CNINFO (www.cninfo.com.cn) and other designated media for information disclosure.On August 24, 2022, the Company and the relevant parties received the Decision on Publicly Reproaching OffcnEducation Technology Co., Ltd. and Corresponding Parties from Shenzhen Stock Exchange. In response to theabove-mentioned failure to truthfully disclose related party relationships and transactions in accordance withregulations, the Shenzhen Stock Exchange publicly reproached the Company and its chairman Li Yongxin, directorand general manager Wang Zhendong, director Shi Lei, CFO Luo Xue, and board secretary Gui Hongzhi.
Section XVII. Significant events of the Company’s subsidiaries
□ Applicable √ Not applicable
Chapter 7 Share Changes and ShareholdersSection I. Changes in Shares
1. Changes in Shares
Unit: share(s)
| Before Change | Increase or Decrease (+ or -) | After Change | |||||||
| Number of shares | Proportion | New shares issued | Bonus shares | Conversion of equity reserves into share capital | Other | Subtotal | Number of shares | Proportion | |
| 1. Shares with trading restrictions | 4,564,776,021 | 74.01% | -3,076,550,617 | -3,076,550,617 | 1,488,225,404 | 24.13% | |||
| (1) Shares held by state | |||||||||
| (2) Shares held by state-owned legal person | |||||||||
| (3) Other shares held by domestic capital | 4,564,776,021 | 74.01% | -3,076,550,617 | -3,076,550,617 | 1,488,225,404 | 24.13% | |||
| Of which: shares held by domestic legal person | 89,117,723 | 1.44% | -89,117,723 | -89,117,723 | 0 | 0.00% | |||
| Shares held by domestic natural person | 4,475,658,298 | 72.57% | -2,987,432,894 | -2,987,432,894 | 1,488,225,404 | 24.13% | |||
| (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 | 1,602,623,368 | 25.99% | 3,076,550,617 | 3,076,550,617 | 4,679,173,985 | 75.87% | |||
| (1) RMB ordinary shares | 1,602,623,368 | 25.99% | 3,076,550,617 | 3,076,550,617 | 4,679,173,985 | 75.87% | |||
| (2) Domestic - listed shares for oversea investors | |||||||||
| (3) Foreign - listed shares for overseas investors | |||||||||
| (4) Other | |||||||||
| 3. Total number of shares | 6,167,399,389 | 100.00% | 0 | 0 | 6,167,399,389 | 100.00% | |||
Reasons for changes in shares
√Applicable □ Not applicable
Mainly due to the release of sales restrictions on part of the shares issued by the major asset restructuring and the change of keyexecutive’s lock-up shares during the reporting period
Approval of changes in shares
□ Applicable √ Not applicable
Transfer of share changes
□ Applicable √ Not applicable
The impact of share changes on financial indicators such as basic earnings per share and diluted earnings per share,net assets per share attributable to the Company’s ordinary shareholders, etc. in the most recent year and the mostrecent period
□ Applicable √ Not applicable
Other content that the Company deems necessary or required by the securities regulatory agency to disclose
□ Applicable √ Not applicable
2. Changes in shares with sales restrictions
√ Applicable □ Not applicable
Unit: share(s)
| Name of shareholder | Number of shares with sales restrictions at the beginning of the period | Number of shares with sales restrictions increased in the period | Number of shares with sales restrictions released 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 |
| Li Yongxin | 1,131,070,121 | 282,508,780 | 848,561,341 | Releasing sales restriction on shares from major assets replacement and shares issued for assets purchase; Change of key executive’s lock-up shares. | November 30, 2022 | |
| Lu Zhongfang | 2,550,549,260 | 2,550,549,260 | 0 | Releasing sales restriction on shares from major assets replacement and shares issued for assets purchase | November 2,2022 | |
| Wang Zhendong | 721,853,563 | 82,189,500 | 639,664,063 | Releasing sales restriction on shares | According to |
| from major assets replacement and shares issued for assets purchase; Change of key executive’s lock-up shares. | the relevant regulations of senior executive’s lock-up shares | |||||
| Guo Shihong | 36,092,677 | 36,092,677 | 0 | Change of key executive’s lock-up shares. | According to the relevant regulations of senior executive’s lock-up shares | |
| Zhang Yongsheng | 36,092,677 | 36,092,677 | 0 | Change of key executive’s lock-up shares. | According to the relevant regulations of senior executive’s lock-up shares | |
| Beijing Kerui Technology Innovation Investment Center (Limited Partnership) | 89,117,723 | 89,117,723 | 0 | Releasing sales restriction on shares from major assets replacement and shares issued for assets purchase. | February 11, ,2022 | |
| Total | 4,564,776,021 | 0 | 3,076,550,617 | 1,488,225,404 | — | — |
Section II. Issuance and listing of securities
1. Issuance of securities (excluding preferred shares) during the reporting period
□ Applicable √ Not applicable
2. Explanation of changes in the Company’s total shares and shareholder structure, and changes in theCompany’s asset and liability structure
□ Applicable √ Not applicable
3. Existing internal employee shares
□ Applicable √ Not applicable
Section III. Shareholders and actual controllers
1. Numbers of Shareholders and Shareholdings
Unit: Share(s)
| Total number of shareholders with ordinary shares at the end of the reporting period | 207,174 | Total number of shareholders with ordinary shares at the end of the previous month before the disclosure date of the annual report | 206,003 | Total number of preferred shareholders with voting rights restored at the end of the reporting period (if any) (See Note 8) | 0 | Total number of preferred shareholders whose voting rights have been restored at the end of the previous month before the disclosure date of the annual report (if any) (See Note 8) | 0 | ||||||||
| Shareholders with over 5% shares or top 10 shareholders | |||||||||||||||
| Name of Shareholder | Nature of shareholder | Shareholding Percentage (%) | Total shares held at the end of the reporting period | Increase/decrease of shares during the reporting period | Number of shares held with sales restrictions | Number of shares held without sales restrictions | Pledged, marked or Frozen | ||||||||
| Status of shares | Number of shares | ||||||||||||||
| Li Yongxin | Domestic natural Person | 15.77% | 972,611,336 | -158,803,785 | 848,561,341 | 124,049,995 | Pledged | 606,782,856 | |||||||
| Lu Zhongfang | Domestic natural Person | 14.94% | 921,148,498 | -1,629,400,762 | 0 | 921,148,498 | Pledged | 842,500,000 | |||||||
| Wang Zhendong | Domestic natural person | 12.34% | 760,775,418 | -92,110,000 | 639,664,063 | 121,111,355 | Pledged | 353,470,000 | |||||||
| Hunan Chasing Fund Management Co., Ltd. -- Hunan Chasing Changqin No.1 Fund Partnership | Other | 5.51% | 339,820,822 | 339,820,822 | 0 | 339,820,822 | |||||||||
| (Limited Partnership) | ||||||||
| Shanghai Tuopai Private Funds Management Co., Ltd.－Tuopai Xingfeng No. 9 Private Security Investment Fund | Other | 5.00% | 308,369,970 | 308,369,970 | 0 | 308,369,970 | ||
| Guangzhou Kangqi Asset Management Center (Limited Partnership)－Kangqi Asset Chuxin No.1 Private Security Investment Fund | Other | 5.00% | 308,369,970 | 308,369,970 | 0 | 308,369,970 | ||
| Shanghai Kaishuang Private Funds Management Co., Ltd.－Kaishuang Gongga No. 10 Private Security Investment Fund | Other | 2.58% | 159,355,594 | 159,355,594 | 0 | 159,355,594 | ||
| Hong Kong Securities | Overseas legal person | 1.26% | 77,568,205 | 52,563,619 | 0 | 77,568,205 |
| Clearing Co., Ltd. | |||||||||
| Wang Junfei | Domestic natural Person | 1.21% | 74,883,785 | 74,883,785 | 0 | 74,883,785 | |||
| Beijing Kerui Technology Innovation Investment Center (Limited Partnership) | Domestic non-state-owned legal person | 0.89% | 54,887,323 | -34,230,400 | 0 | 54,887,323 | |||
| Strategic investors or ordinary legal person become the top 10 shareholders by the placement of new shares (if any) (See Note 3) | No | ||||||||
| Description of the above-mentioned shareholders’ relationship or concerted actions | 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. 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. | ||||||||
| Explanation of the above-mentioned shareholders’entrusting/entrusted voting rights and waiver of voting rights | N/A | ||||||||
| Explanation of for the existence of a special repurchase account among the top 10 shareholders (if any) (See Note 10) | N/A | ||||||||
| Description of top 10 shareholders without sales restrictions | |||||||||
| Name of Shareholder | Number of shares without sales restrictions at the end of the reporting period | Type | |||||||
| Type | Quantities | ||||||||
| Lu Zhongfang | 921,148,498 | RMB ordinary shares | 921,148,498 | ||||||
| Hunan Chasing Fund Management Co., Ltd.-Hunan Chasing Changqin No.1 Fund Partnership (Limited Partnership) | 339,820,822 | RMB ordinary shares | 339,820,822 | ||||||
| Shanghai Tuopai Private Funds Management Co., Ltd.-Tuopai Xingfeng No. 9 Private Security Investment Fund | 308,369,970 | RMB ordinary shares | 308,369,970 | ||||||
| Guangzhou Kangqi Asset Management Center (Limited Partnership)-Kangqi Asset Chuxin No.1 Private Security Investment Fund | 308,369,970 | RMB ordinary shares | 308,369,970 |
| Shanghai Kaishuang Private Funds Management Co., Ltd.-Kaishuang Gongga No. 10 Private Security Investment Fund | 159,355,594 | RMB ordinary shares | 159,355,594 |
| Li Yongxin | 124,049,995 | RMB ordinary shares | 124,049,995 |
| Wang Zhendong | 121,111,355 | RMB ordinary shares | 121,111,355 |
| Hong Kong Central Clearing Company Limited | 77,568,205 | RMB ordinary shares | 77,568,205 |
| Wang Junfei | 74,883,785 | RMB ordinary shares | 74,883,785 |
| Beijing Kerui Technology Innovation Investment Center (Limited Partnership) | 54,887,323 | RMB ordinary shares | 54,887,323 |
Description of the relationship or concertedactions among the top 10 shareholders withoutsales restrictions, and between the top 10shareholders without sales restrictions and thetop 10 shareholders
| 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. 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 or short selling business (if any) | N/A |
Whether the Company’s top 10 ordinary shareholders and top 10 ordinary shareholders without sales restrictionsconducted agreed repurchase transactions during the reporting period
□ Yes √ No
The Company’s top 10 ordinary shareholders and top 10 ordinary shareholders without sales restrictions didn’tconduct agreed repurchase transactions during the reporting period
2. The controlling shareholders of the Company
Nature of controlling shareholders: natural person holdingType of controlling shareholders: natural person
| Name of controlling shareholder | Nationality | Whether obtained any permanent residency abroad |
| Lu Zhongfang | China | No |
| Li Yongxin | China | No |
| Major occupations and jobs | Li Yongxin is the Chairman of the Board of the Company. | |
| Particulars about controlling or holding shares of other companies listed at home and/or abroad during the reporting period | N/A | |
Change of controlling shareholder during the reporting period
□ Applicable √ Not applicable
Controlling shareholders of the Company did not change during the reporting period.
3. The actual controllers of the Company and the person acting in concert
Nature of actual controllers: domestic natural personType of actual controllers: natural person
| Name of actual controller | Relationship with the actual controller | Nationality | Whether obtained any permanent residency abroad |
| Lu Zhongfang | herself | China | No |
| Li Yongxin | himself | China | No |
| Beijing Offcn Future Information Consulting Center (Limited partnership) | Acting in concert（including agreements, relatives, or under common control） | China | No |
| Major occupations and jobs | Li Yongxin, the founder and actual controller of the Company, is the current Chairman of the Board of the Company. | ||
| Particulars about controlling shares of other companies listed at home and/or abroad in past 10 years | N/A | ||
Change of actual controller during the reporting period
□ Applicable √ Not applicable
The actual controllers of the Company did not change during the reporting period.Block diagram of the property rights and control relationship between the Company and the actual controllers
The actual controller controls the Company through trust or other asset management methods
□ Applicable √ Not applicable
4. The Company’s controlling shareholder or the largest shareholder and its concert parties have pledged 80%of the number of shares held by them
□ Applicable √ Not applicable
5. Other legal person shareholders holding more than 10% of the shares
□ Applicable √ Not applicable
6. Controlling shareholders, actual controllers, restructuring parties and other committed entities withrestricted shareholding reductions
□ Applicable √ Not applicable
Section IV. Details of implementation of share repurchase during the reporting period
Implementation progress of share repurchase
□ Applicable √ Not applicable
Implementation progress of reducing repurchased shares by means of centralized bidding
□ Applicable √ Not applicable
Chapter 8 Preferred Shares
□ Applicable √ Not applicable
There were no preferred shares during the reporting period.
Chapter 9 Corporate Bonds
□ Applicable √ Not applicable
Chapter 10 Financial StatementsSection I. AUDITOR’S REPORT
| Audit Opinion | Standard unmodified audit opinion |
| Audit Report sign-off Date | April 27, 2023 |
| Audit Institution Name | Baker Tilly China Certified Public Accountants (LLP) |
| Audit Report Number | Baker Tilly China [2023] No. 23905 |
| CPA Name | Zhou Baiming, Li Qiang |
Auditor’s Report
Baker Tilly China [2023] No. 23905
To the Shareholders of Offcn Education Technology Co.,Ltd.I. OpinionWe have audited the accompanying financial statements of Offcn Education Technology Co.,Ltd. (“Offcn Education” or “theCompany”), which comprise the consolidated and parent's balance sheets as at 31 December 2022, and the 2022 consolidated andparent's income statements, the consolidated and parent's statement of cash flows and the consolidated and parent's statements ofchanges in owners' equity for the year then ended, and the notes to the financial statements.In our opinion, the financial statements of Offcn Education present fairly, in all material respects, the consolidated and parent'sfinancial position as at 31 December 2022, and the 2022 consolidated and parent's result of operations and cash flows for the year endedin accordance with the requirements of the Accounting Standards for Business Enterprises.II. Basis of opinionWe conducted our audit in accordance with China Standards on Auditing (“CAS”). Our responsibilities under those standards arefurther described in the Auditor’s responsibilities section of our report. We are independent of Offcn Education in accordance with ChinaCode of Ethics for Certified Public Accountants (the “Code”), and we have fulfilled our other ethical responsibilities in accordance withthe Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.Ⅲ. Key Audit MattersKey audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financialstatements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and informing our opinion thereon, and we do not provide a separate opinion on these matters.
AUDITOR’S REPORT (Continued)
Baker Tilly China [2023] No. 23905
| Key Audit Matters | How our audit addressed the Key Audit Matter |
Recognition of revenue
Recognition of revenue
For example, in the notes to the financial statements"V. The Company’s Significant Accounting Policies AndAccounting Estimates (32)” and “VII. Consolidated FinancialStatement Project Notes (34)”, education and trainingincome accounted for 99.52% of the company’s operatingincome in 2022.The company's revenue mainly includes ordinary classrevenue and agreement class revenue. When the ordinaryclass face-to-face training service is completed, all thetraining fees received in advance are recognized asrevenue. Revenue from online training in ordinary classesis recognized on a straight-line basis during the validityperiod of the service provided. Non-refundable portion ofrevenue from agreement class is recognized as revenueupon completion of training services; According to theagreement, the refund part is recognized as revenue whenthe non-refundable conditions are met.In view of the significant amount of education andtraining revenue, which is the main source of company'sprofits. And the frequent occurrence of transactions, therisk of misstatement is high. Therefore, we identified thecompany's education and training revenue as a key auditmatter.
| For example, in the notes to the financial statements "V. The Company’s Significant Accounting Policies And Accounting Estimates (32)” and “VII. Consolidated Financial Statement Project Notes (34)”, education and training income accounted for 99.52% of the company’s operating income in 2022. The company's revenue mainly includes ordinary class revenue and agreement class revenue. When the ordinary class face-to-face training service is completed, all the training fees received in advance are recognized as revenue. Revenue from online training in ordinary classes is recognized on a straight-line basis during the validity period of the service provided. Non-refundable portion of revenue from agreement class is recognized as revenue upon completion of training services; According to the agreement, the refund part is recognized as revenue when the non-refundable conditions are met. In view of the significant amount of education and training revenue, which is the main source of company's profits. And the frequent occurrence of transactions, the risk of misstatement is high. Therefore, we identified the company's education and training revenue as a key audit matter. | In response to the key audit matter, we performed procedures as follows: 1.Understood and tested internal controls relating to recognition of revenue and evaluated the effectiveness of related internal controls. 2.Understood the revenue recognition policies of comparable companies in the same industry, discussed the characteristics of training business with management, checked business contracts, identify contract terms and conditions related to education and training services, and evaluated the appropriateness of revenue recognition policies. 3.Implemented substantive analysis procedures for revenue and gross profit margin during the reporting period, evaluated the overall rationality of revenue. 4.Selected samples of the revenue confirmed during the reporting period, checked the receipts, bank flow, contracts, examination announcement and refunds, and evaluated whether the relevant revenue confirmation is in line with the company's revenue recognition accounting policy. 5.For the education and training revenue items confirmed before and after the balance sheet date, selected samples, checked the supporting documents for revenue recognition, and evaluated whether they are recorded in the correct accounting period. |
AUDITOR’S REPORT (Continued)
Baker Tilly China [2023] No. 23905
Ⅳ. Other Information
Management of the Company is responsible for the other information.The other information comprises all of the informationincluded in 2022 annual report of the Company other than the financial statements and our auditor’s report thereon.Our opinion on the financial statements does not cover the other information and we do not express any form of assuranceconclusion thereon.In connection with our audit of the financial statements, our responsibility is to read the other information and,in doing so,considerwhether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwiseappears to be materially misstated.If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we arerequired to report that fact. We have nothing to report in this regard.Ⅴ. Responsibilities of Management and Those in Charge of Governance for the FinancialStatements
The management is responsible for the preparation of the financial statements that give a true and fair view in accordance withAccounting Standards for Business Enterprises and designing, implementing and maintaining internal control as the managementdetermines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due tofraud or error.
In preparing the financial statements, the management is responsible for assessing the Company’s ability to continue as a goingconcern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless themanagement either intend to liquidate Offcn Education or to cease operations or have no realistic alternative but to do so.
Those in charge of governance are responsible for overseeing the Company’s financial reporting process.AUDITOR’S REPORT (Continued)
Baker Tilly China [2023] No. 23905Ⅵ Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from materialmisstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a highlevel of assurance, but is not a guarantee that an audit conducted in accordance with CAS will always detect a material misstatementwhen it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they couldreasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.As part of an audit in accordance with CAS, we exercise professional judgement and maintain professional skepticism throughoutthe audit. We also:
1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design andperform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud mayinvolve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in thecircumstances.
3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosuresmade by the management.
4) Conclude on the appropriateness of the management’s use of the going concern basis of accounting and, based on the auditevidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’sability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’sreport to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusionsare based on the audit evidence obtained up to the date of our auditor’s report.AUDITOR’S REPORT (Continued)
Baker Tilly China [2023] No. 23905
However, future events or conditions may cause the Company to cease to continue as a going concern.
5) Evaluate the overall presentation, structure and content of the financial statements, and whether the financial statements representthe underlying transactions and events in a manner that achieves fair presentation.
6) Acquire sufficient and appropriate audit evidence based on the financial information of the Company or business activities toexpress its audit opinion on the consolidated financial statements. We are responsible for the direction, supervision, and execution of thegroup audit and assume full responsibility for the audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the auditand significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regardingindependence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on ourindependence, and where applicable, related safeguards.
From the matters communicated with those in charge of governance, we determine those matters that were of most significance inthe audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in ourauditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, wedetermine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably beexpected to outweigh the public interest benefits of such communication.
AUDITOR’S REPORT (Continued)
Baker Tilly China [2023] No. 23905
| Beijing, China 27 April,2023 | Chinese Certified Public Accountant: (Engagement partner) | Zhou Baiming |
| Chinese Certified Public Accountant: | Li Qiang |
Section II. Financial StatementsThe unit of the statement in the financial notes: RMB
1.Consolidated balance sheet
Prepared by: Offcn Education Technology Co., Ltd.
December 31, 2022
Unit: RMB
| ITEM | December 31, 2022 | January 1, 2022 |
| Current assets: | ||
| Monetary funds | 385,328,555.74 | 1,970,361,272.64 |
| Settlement reserve | ||
| Lendings | ||
| Transactional financial assets | 346,726,621.74 | |
| Derivative financial assets | ||
| Notes receivable | ||
| Accounts receivable | 37,323,682.88 | 40,374,842.27 |
| Receivables financing | ||
| Prepayments | 556,093.00 | 1,438,350.00 |
| Premium receivable | ||
| Accounts receivable reinsurance | ||
| Reserve for reinsurance Receivable contracts | ||
| Other receivables | 193,617,379.76 | 219,501,061.83 |
| Inc： Interest receivables | ||
| Dividends receivables | ||
| Buying back the sale of financial assets | ||
| Inventory | ||
| Contract assets |
| Assets held-for-sale | ||
| Non-current assets due within one year | ||
| Other current assets | 4,559,823.18 | 36,959,129.80 |
| Total current assets | 621,385,534.56 | 2,615,361,278.28 |
| Non-current assets: | ||
| Loans and advances | ||
| Debt investment | 7,058,993.55 | |
| Other debt investment | ||
| Long-term receivables | ||
| Long-term equity investment | 46,835,952.63 | 46,850,364.40 |
| Other equity investment | 121,300,000.00 | 130,400,000.00 |
| Other non-current financial assets | 27,680,000.00 | 30,260,000.00 |
| Investment property | 450,260.54 | 644,936,541.46 |
| Fixed assets | 1,970,536,339.75 | 1,770,372,338.85 |
| Construction in progress | 323,273,645.99 | 294,785,678.31 |
| Productive biological assets | ||
| Oil and gas assets | ||
| Right-of-use asset | 1,112,202,447.58 | 1,342,280,387.08 |
| Intangible assets | 1,162,266,659.34 | 866,627,549.85 |
| Development expenditure | ||
| Goodwill | 99,867,720.38 | 99,867,720.38 |
| Long-term prepaid expenses | 285,134,318.63 | 380,191,006.38 |
| Deferred tax assets | 602,280,444.37 | 424,027,271.38 |
| Other non-current assets | 1,654,201,029.49 | 1,652,164,395.78 |
| Total Non-current Assets | 7,406,028,818.70 | 7,689,822,247.42 |
| Total Assets | 8,027,414,353.26 | 10,305,183,525.70 |
| Current liabilities: | ||
| Short-term loan | 3,152,945,812.59 | |
| Borrowing from the central bank |
| Borrowings from banks and other financial institutions | ||
| Transactional financial liabilities | ||
| Derivative Financial liabilitiels | ||
| Notes payable | ||
| Accounts payable | 287,088,393.76 | 282,032,916.52 |
| Deposit received | ||
| Contract liabilities | 3,949,799,538.71 | 3,063,721,290.28 |
| Financial assets sold for repurchase | ||
| Absorbing deposits and interbank deposits | ||
| Acting trading securities | ||
| Acting underwriting securities | ||
| Payroll payable | 609,823,739.07 | 422,886,856.60 |
| Taxes payable | 9,593,498.07 | 12,566,751.84 |
| Other payable | 1,096,787,345.65 | 129,043,599.22 |
| Inc：Interest payable | ||
| Dividend payable | ||
| Fees and commissions payable | ||
| Reinsurance amounts payable | ||
| Liabilities held-for-sale | ||
| Non-current Liabilities due within one year | 578,821,921.03 | 531,876,007.31 |
| Other current liabilities | 118,495,201.91 | 91,925,853.39 |
| Total Current Liabilities | 6,650,409,638.20 | 7,686,999,087.75 |
| Non-current Liabilities: | ||
| Insurance contract reserve | ||
| Long-term loan | ||
| Bonds payable | ||
| Inc: Bonds payable_preferred stock | ||
| Bonds payable_perpetual bond | ||
| Lease liability | 508,752,253.77 | 635,691,184.87 |
| Long-term payables | ||
| Long-term salary payable | ||
| Estimated liabilities | ||
| Deferred Income | ||
| Deferred tax liability | 88,360,124.03 | 93,712,172.62 |
| Other non-current liabilities | ||
| Total Non-current Liabilities | 597,112,377.80 | 729,403,357.49 |
| Total Liabilities | 7,247,522,016.00 | 8,416,402,445.24 |
| Owners' equity: | ||
| Share capital | 103,807,623.00 | 103,807,623.00 |
| Other equity instruments | ||
| Inc: Other equity instruments_preferred stock | ||
| Other equity instruments_perpetual bond | ||
| Capital reserve | 1,225,481,049.50 | 1,225,481,049.50 |
| less: Treasury stock | ||
| Other comprehensive income | 6,375,000.00 | 13,200,000.00 |
| Special reserve | ||
| Surplus reserves | 45,000,000.00 | 45,000,000.00 |
| General risk preparation | ||
| Undistributed profits | -600,729,736.73 | 501,330,081.70 |
| Total Owners' Equity Attributable To the Parent Company | 779,933,935.77 | 1,888,818,754.20 |
| Minority shareholders' equity | -41,598.51 | -37,673.74 |
| Total Owners' Equity | 779,892,337.26 | 1,888,781,080.46 |
| Total Liabilities and Owners' Equity | 8,027,414,353.26 | 10,305,183,525.70 |
Legal representative: Wang Zhendong Person in charge of accounting: Shi Lei Head of accounting department: Luo Xue
2.Parent company balance sheet
Unit:RMB
| ITEM | December 31, 2022 | January 1, 2022 |
| Current assets: | ||
| Monetary funds | 4,549,980.47 | 59,197,879.74 |
| Transactional financial assets | 1,573,219.32 | |
| Derivative financial assets | ||
| Notes receivable | ||
| Accounts receivable | 26,484,984.35 | 28,806,097.45 |
| Receivables financing | ||
| Prepayments | ||
| Other receivables | 22,848,853.79 | 20,699,731.33 |
| Including:interest receivable | ||
| Dividend receivable | ||
| Inventory | ||
| Contract assets | ||
| Assets held-for-sale | ||
| Non-current assets due within one year | ||
| Other current assets | ||
| Total current assets | 53,883,818.61 | 110,276,927.84 |
| Non-current assets: | ||
| Debt investment | ||
| Other debt investment | ||
| Long-term receivables | ||
| Long-term equity investment | 19,190,401,583.37 | 19,190,415,995.14 |
| Other equity investment | 121,300,000.00 | 130,400,000.00 |
| Other non-current financial assets | ||
| Investment property | 363,531.57 | 370,687,463.01 |
| Fixed assets | 557,438,989.80 | 371,414,975.96 |
| Construction in progress | 72,569,103.57 | 72,569,103.57 |
| Productive biological assets | ||
| Oil and gas assets | ||
| Right-of-use assets |
| Intangible assets | 161,459,750.00 | |
| Development expenditure | ||
| Goodwill | ||
| Long-term prepaid expenses | ||
| Deferred tax assets | ||
| Other non-current assets | 1,618,411,145.38 | 1,618,391,145.38 |
| Total non-current assets | 21,721,944,103.69 | 21,753,878,683.06 |
| Total assets | 21,775,827,922.30 | 21,864,155,610.90 |
| Current liabilities: | ||
| Short-term loan | 1,201,317,569.59 | |
| Transactional financial liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | ||
| Accounts payable | 43,621,752.26 | 83,621,752.26 |
| Deposit received | ||
| Contract liabilities | ||
| Payroll payable | ||
| Taxes payable | 1,693,081.17 | 1,600,302.00 |
| Other payable | 2,533,250,496.78 | 1,307,916,006.49 |
| Including:interest payable | ||
| Dividend payable | ||
| Liabilities held-for-sale | ||
| Non-current liabilities due within one year | ||
| Other current liabilities | ||
| Total current liabilities | 2,578,565,330.21 | 2,594,455,630.34 |
| Non-current liabilities: | ||
| Long-term loan | ||
| Bonds payable | ||
| Bonds payable preferred stock | ||
| Bonds payable perpetual bond |
| Lease liability | ||
| Long-term payables | ||
| Long-term salary payable | ||
| Estimated liabilities | ||
| Deferred income | ||
| Deferred tax liability | 2,125,000.00 | 4,418,304.83 |
| Other non-current liabilities | ||
| Total non-current liabilities | 2,125,000.00 | 4,418,304.83 |
| Total Liabilities | 2,580,690,330.21 | 2,598,873,935.17 |
| Owners’equity: | ||
| Share capital | 6,167,399,389.00 | 6,167,399,389.00 |
| Other equity instruments | ||
| Other equity instruments preferred stock | ||
| Other equity instruments perpetual bond | ||
| Capital reserve | 12,775,326,370.33 | 12,775,326,370.33 |
| Less:Treasury stock | ||
| Other comprehensive income | 6,375,000.00 | 13,200,000.00 |
| Special reserve | ||
| Surplus reserves | 387,458,806.65 | 387,458,806.65 |
| Undistributed profits | -141,421,973.89 | -78,102,890.25 |
| Owners’equity | 19,195,137,592.09 | 19,265,281,675.73 |
| Liabilities and owner’s equity | 21,775,827,922.30 | 21,864,155,610.90 |
3.Consolidated income statement
Unit: RMB
| ITEM | Year 2022 | Year 2021 |
| I.Total operating income | 4,824,814,105.43 | 6,911,723,331.79 |
| Inc: Operating income | 4,824,814,105.43 | 6,911,723,331.79 |
| Interest income | ||
| Premium earned | ||
| Fee and commission income | ||
| II. Total operating costs | 6,138,728,386.78 | 9,842,898,477.96 |
| Inc: Operating costs | 2,979,787,310.55 | 4,993,717,363.58 |
| Interest expense | ||
| Fee and commission expenses | ||
| Surrender money | ||
| Net reimbursement expenditure | ||
| Withdrawal of net insurance liability contract reserves | ||
| Policyholder dividend expenses | ||
| Reinsurance expenses | ||
| Taxes and surcharges | 33,295,722.91 | 35,355,169.74 |
| Sales expenses | 1,359,096,659.05 | 2,105,098,912.06 |
| Management expenses | 935,818,353.08 | 1,315,643,022.03 |
| Research and development expenses | 592,208,850.10 | 901,469,538.57 |
| Financial expenses | 238,521,491.09 | 491,614,471.98 |
| Inc:Interest | 82,900,952.64 | 274,734,405.81 |
| Interest income | 7,965,614.53 | 58,235,304.20 |
| Add: Other income | 52,156,799.52 | 96,084,140.34 |
| Investment income (Loss is listed with "-") | 9,804,270.34 | 79,269,900.92 |
| Including: investment income from associates and joint ventures | -14,411.77 | -2,149,635.60 |
| Derecognition income of financial assets measured at amortized cost | ||
| Exchange earnings ((Loss is listed with "-") | ||
| Net exposure hedge income(Loss is listed with "-") | ||
| Fair value change income (Loss is listed with "-") | -6,026,850.74 | -21,490,322.52 |
| Expected credit loss(Loss is listed with "-") | -9,746,689.55 | -8,529,849.40 |
| Asset impairment loss(Loss is listed with "-") | ||
| Asset disposal income(Loss is listed with "-") | -9,500,665.47 | -163,075.82 |
| III. Operating profit (Loss is listed with "-") | -1,277,227,417.25 | -2,786,004,352.65 |
| Add: non-operating income | 18,141,095.89 | |
| Less: non-operating expenses | 4,778,597.36 | 1,303,782.47 |
| IV. Total profit(The total loss is listed with "-") | -1,282,006,014.61 | -2,769,167,039.23 |
| Less: Income tax expenses | -179,942,271.41 | -399,652,322.88 |
| V. Net profit (Net loss is listed with "-") | -1,102,063,743.20 | -2,369,514,716.35 |
| i. Classified by business continuity | ||
| 1.Net profit from continuing operations (Net loss is listed with "-") | -1,102,063,743.20 | -2,369,514,716.35 |
| 2.Net profit from discontinued operations (Net loss is listed with "-") | ||
| ii. Classification by ownership | ||
| 1.Net profit attributable to the owner of the parent company | -1,102,059,818.43 | -2,369,509,039.00 |
| 2.Net profit attributable to minority shareholders | -3,924.77 | -5,677.35 |
| VI. Net other comprehensive income | -6,825,000.00 | -16,800,000.00 |
| Net other comprehensive income after tax attributable to the parent company owner | -6,825,000.00 | -16,800,000.00 |
| i. Other comprehensive income that cannot be reclassified into profit or loss | -6,825,000.00 | -16,800,000.00 |
| 1.Inc: Changes from the remeasurement of the defined benefit plan | ||
| 2.Other comprehensive income that cannot be transferred to profit or loss under the equity method | ||
| 3.Changes in the fair value of other equity instruments | -6,825,000.00 | -16,800,000.00 |
| 4.Changes in fair value of the company's own credit risk | ||
| 5. Other | ||
| ii. Other comprehensive income that will be reclassified into profit or loss | ||
| 1.Other comprehensive income of convertible profit and loss under the equity method | ||
| 2.Changes in fair value of other debt investments | ||
| 3.Financial assets reclassified into other comprehensive income | ||
| 4.Other credit impairment provisions for investment of creditor's rights | ||
| 5.Effective portion of profit or loss on cash flow hedging |
| 6.Foreign currency financial statement translation difference | ||
| 7.Other | ||
| Net other comprehensive income after tax attributable to non-controlling interest | ||
| VIII. Total comprehensive income | -1,108,888,743.20 | -2,386,314,716.35 |
| Total comprehensive income attributable to owners of the parent | -1,108,884,818.43 | -2,386,309,039.00 |
| Total comprehensive income attributable to minority shareholders | -3,924.77 | -5,677.35 |
| IX. Earnings per share | ||
| Basic earnings per share | -0.18 | -0.38 |
| Diluted earnings per share | -0.18 | -0.38 |
If a business combination under the same control occurs in the current period, the net profit realized by the combined party beforethe combination is: RMB 0.00. The net profit realized by the combined party in the previous period was: RMB 0.00.Legal representative: Wang Zhendong Person in charge of accounting: Shi LeiHead of accounting department: Luo Xue
4.Parent company income statement
Unit:RMB
| ITEM | Year 2022 | Year 2021 |
| I. Total operating income | 1,483,143.55 | 14,831,488.06 |
| Inc: Operating income | 1,483,143.55 | 14,831,488.06 |
| Interest income | ||
| Premium earned | ||
| Fee and commission income | ||
| II. Total operating costs | 60,132,786.17 | 88,480,334.21 |
| Inc: Operating costs | 10,359.40 | 11,230,514.83 |
| Interest expense | ||
| Fee and commission expenses | ||
| Surrender money | ||
| Net reimbursement expenditure |
| Withdrawal of net insurance liability contract reserves | ||
| Policyholder dividend expenses | ||
| Reinsurance expenses | ||
| Taxes and surcharges | 6,221,746.23 | 4,240,824.77 |
| Sales expenses | ||
| Management expenses | 41,458,152.87 | 25,966,438.27 |
| Research and development expenses | ||
| Financial expenses | 12,442,527.67 | 47,042,556.34 |
| Inc:Interest | 13,356,255.38 | 47,157,530.56 |
| Interest income | 927,488.10 | 134,790.30 |
| Add: Other income | 2,487.65 | 138,234.55 |
| Investment income (Loss is listed with "-") | 1,719,685.26 | -836,172.91 |
| Including: investment income from associates and joint ventures | -14,411.77 | -2,174,511.83 |
| Derecognition income of financial assets measured at amortized cost | ||
| Exchange earnings ((Loss is listed with "-") | ||
| Net exposure hedge income(Loss is listed with "-") | ||
| Fair value change income (Loss is listed with "-") | -73,219.32 | 42,765.95 |
| Expected credit loss(Loss is listed with "-") | -2,336,393.54 | -1,557,086.35 |
| Asset impairment loss(Loss is listed with "-") | ||
| Asset disposal income(Loss is listed with "-") | -223,987.77 | |
| III. Operating profit (Loss is listed with "-") | -59,337,082.57 | -76,085,092.68 |
| Add: non-operating income | ||
| Less: non-operating expenses | 4,000,305.90 |
| IV. Total profit(The total loss is listed with "-") | -63,337,388.47 | -76,085,092.68 |
| Less: Income tax expenses | -18,304.83 | 20,539,842.93 |
| V. Net profit (Net loss is indicated by "-") | -63,319,083.64 | -96,624,935.61 |
| Net profit from continuing operations (Net loss is listed with "-") | -63,319,083.64 | -96,624,935.61 |
| Net profit from discontinued operations (Net loss is listed with "-") | ||
| VI. Net other comprehensive income | -6,825,000.00 | -16,800,000.00 |
| 1. Other comprehensive income that cannot be reclassified into profit or loss | -6,825,000.00 | -16,800,000.00 |
| Inc: Changes from the remeasurement of the defined benefit plan | ||
| Other comprehensive income that cannot be transferred to profit or loss under the equity method | ||
| Changes in the fair value of other equity instruments | -6,825,000.00 | -16,800,000.00 |
| Changes in fair value of the company's own credit risk | ||
| 2. Other comprehensive income that will be reclassified into profit or loss | ||
| Other comprehensive income of convertible profit and loss under the equity method | ||
| Changes in fair value of other debt investments | ||
| Financial assets reclassified into other comprehensive income | ||
| Other credit impairment provisions for investment of creditor's rights | ||
| Effective portion of profit or loss on cash flow hedging | ||
| Foreign currency financial statement translation difference |
| Other | ||
| VIII. Total comprehensive income | -70,144,083.64 | -113,424,935.61 |
| IX. Earnings per share | ||
| Basic earnings per share | ||
| Diluted earnings per share |
5.Consolidated cash flow statement
Unit: RMB
| Items | 2022 | 2021 |
| I.Cash Flows from Operating Activities: | ||
| Cash received from the sale of goods and the services | 5,878,642,804.40 | 5,172,563,759.32 |
| Net increase in customer deposits and interbank deposits | ||
| Net increase in borrowing from central bank | ||
| Net increase in funds borrow from other financial institutions | ||
| Cash received from the original insurance contract premium | ||
| Net cash received from reinsurance business | ||
| Net increase in policyholders’ deposits and investment funds | ||
| Cash charged with interest, handling fees and commissions | ||
| Net increase in funds borrowed in | ||
| Net increase in repurchase funds | ||
| Net cash received from agent buying and selling of securities | ||
| Taxes refund | ||
| Other cash received related to other business activities | 42,585,502.18 | 171,941,814.92 |
| Subtotal of cash inflow from operating activities | 5,921,228,306.58 | 5,344,505,574.24 |
| Cash paid for the purchase of goods and services | 737,440,108.29 | 1,687,330,079.68 |
| Net increase in customer loans and advances | ||
| Net increase in deposit of central bank and interbank | ||
| Cash paid for the original insurance contract |
| Net increase in borrowed funds | ||
| Cash paid for interest, handling fees and commissions | ||
| Cash paid for policy dividends | ||
| Cash paid to and for employees | 3,731,688,834.19 | 6,340,168,377.45 |
| Various taxes paid | 160,757,951.44 | 295,559,702.01 |
| Other cash paid for business activities | 504,149,454.38 | 1,119,408,964.00 |
| Subtotal of cash outflows from business activities | 5,134,036,348.30 | 9,442,467,123.14 |
| Net Cash Flow from Operating Activities | 787,191,958.28 | -4,097,961,548.90 |
| II.Cash Flows from Investing Activities: | ||
| Cash received from investment recovery | 466,570,799.16 | 8,918,329,229.00 |
| Cash received from investment income | 9,827,675.66 | 247,231,808.99 |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 3,012,387.24 | |
| Net cash received from disposal of subsidiaries and other business units | 51,000,000.00 | |
| Other cash received related to investing activities | 200,000,000.00 | |
| Subtotal of cash inflows from investing activities | 476,398,474.82 | 9,419,573,425.23 |
| Cash paid for the purchase and construction of fixed assets, intangible assets and other long-term assets | 106,763,167.69 | 1,366,834,155.42 |
| Cash paid for investment | 116,841,028.16 | 6,312,200,000.00 |
| Net increase in pledge loans | ||
| Net cash paid for aquiring subsidiaries and other business units | ||
| Other cash paid related to investing activities | ||
| Subtotal of cash outflows from investment activities | 223,604,195.85 | 7,679,034,155.42 |
| Net Cash Flow from Investing Activities | 252,794,278.97 | 1,740,539,269.81 |
| III.Cash Flows from Financing Activities: | ||
| Cash received from investment absorption | ||
| Including:cash received from subsidiaries in absorbing minority shareholders'investment | ||
| Cash received from loans | 4,569,000,000.00 | |
| Other cash received related to fundraising activities | 959,240,000.00 | |
| Sub-total of cash inflows from financing activities | 959,240,000.00 | 4,569,000,000.00 |
| Cash paid for debt repayment | 3,149,000,000.00 | 5,389,000,000.00 |
| Cash paid for dividends, profits or interest payments | 52,155,602.76 | 196,236,215.13 |
| Including:dividends and profits paid by subsidiaries to minority shareholders | ||
| Other cash paid related to financing activities | 386,990,744.68 | 606,571,985.34 |
| Subtotal of cash outflows from financing activities | 3,588,146,347.44 | 6,191,808,200.47 |
| Net Cash Flow from Financing Activities | -2,628,906,347.44 | -1,622,808,200.47 |
| IV.Effect of the changes of the exchange rate on cash and the equivalents | ||
| V.Net Increase in Cash and Cash Equivalents | -1,588,920,110.19 | -3,980,230,479.56 |
| Add: balance of cash and cash equivalents at the beginning of the period | 1,969,806,009.56 | 5,950,036,489.12 |
| VI.Balance of cash and cash equivalents at the end of the period | 380,885,899.37 | 1,969,806,009.56 |
6.Parent company cash flow statement
Unit:RMB
| ITEM | Year 2022 | Year 2021 |
| I. Cash flow from operating activities: | ||
| Cash received from the sale of goods and services | 1,572,581.17 | |
| Tax refund | ||
| Other cash received related to other business activities | 1,186,259,251.75 | 800,735,886.99 |
| Subtotal of cash inflow from operating activities | 1,187,831,832.92 | 800,735,886.99 |
| Cash paid for the purchase of goods and services | ||
| Cash paid to and for employees | ||
| Various taxes paid | 6,203,155.71 | 4,860,974.71 |
| Other cash paid for business activities | 24,725,106.92 | 1,030,790,404.92 |
| Subtotal of cash outflows from business activities | 30,928,262.63 | 1,035,651,379.63 |
| Net cash flow from operating activities | 1,156,903,570.29 | -234,915,492.64 |
| II. Cash flows from investing activities: | ||
| Cash received from investment recovery | 1,500,000.00 | 82,700,000.00 |
| Cash received from investment income | 1,734,097.03 | 1,338,338.92 |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 2,507,345.00 |
| Net cash received from disposal of subsidiaries and other business units | ||
| Other cash received related to investing activities | ||
| Subtotal of cash inflows from investment activities | 3,234,097.03 | 86,545,683.92 |
| Cash paid for the purchase and construction of fixed assets, intangible assets and other long-term assets | 20,000.00 | 55,497.58 |
| Cash paid for investment | 131,600,000.00 | |
| Net cash paid for acquiring subsidiaries and other business units | ||
| Other cash paid related to investing activities | ||
| Subtotal of cash outflows from investment activities | 20,000.00 | 131,655,497.58 |
| Net cash flows from investing activities | 3,214,097.03 | -45,109,813.66 |
| III. Cash flow from financing activities: | ||
| Cash received from investment absorption | ||
| Cash received from the loan | 1,200,000,000.00 | |
| Other cash received related to fundraising activities | ||
| Subtotal of cash inflows from financing activities | 1,200,000,000.00 | |
| Cash paid for debt repayment | 1,200,000,000.00 | 870,000,000.00 |
| Cash paid for dividends, profits or interest payments | 14,673,824.97 | 46,923,835.97 |
| Other cash paid related to financing activities | ||
| Subtotal of cash outflows from financing activities | 1,214,673,824.97 | 916,923,835.97 |
| Net cash flow from financing activities | -1,214,673,824.97 | 283,076,164.03 |
| IV. Effect of the changes of the exchange rate on cash and the equivalents | ||
| V. Net increase in cash and cash equivalents | -54,556,157.65 | 3,050,857.73 |
| Add:balance of cash and cash equivalents at the beginning of the period | 58,831,214.10 | 55,780,356.37 |
| VI. Balance of cash and cash equivalents at the end of the period | 4,275,056.45 | 58,831,214.10 |
7.Consolidated Statement of Changes in Owners' Equity
Unit: RMB
Unit: RMB
8.Statement of Changes in Owners' Equity
Unit: RMB
Unit: RMB
Section III. General Information
1. Overview of the company
Offcn Education Technology Co.,Ltd.（referred to as the “company” or “the company”）was formerly known as Yaxia AutomobileCo.,Ltd.（refered to as “Yaxia Automobile”），Yaxia Automobile ,a limited company established by Wuhu Yaxia Industrial Co., Ltd.On 30 November 30 2006, obtained the Enterprise Business license of Enterprise Legal Person NO. 3402012104768 issued by WuhuAdministration for industry and commerce. Yaxia Automobile was approved by the China Securities Regulatory Commission (referredto as the "CSRC") for the approval of the initial public offering of Wuhu Yaxia Automobile Co., Ltd. (CSRC License [2011] No. 1046)and issued 22 million RMB ordinary shares to the public and traded on the Shenzhen Stock Exchange in August 2011. The controllingshareholder is Anhui Yaxia Industrial Co., Ltd. (referred to as “Yaxia Industrial”).On 1 July 2016, the company obtained the No.91340200711040703A “Enterprise Business license of Enterprise Legal Person” issued by the Wuhu Administration for Industry andCommerce. As of 31 December 2021, the company's share capital is RMB 6,167,399,389.00.In accordance with the resolution of the third extraordinary general meeting of shareholders of Yaxia Automobile in 2018 and theresolution of the 24th meeting of the 4th Board of Directors, and approved by the China Securities Regulatory Commission's SecuritiesRegulatory Commission (2018) 1975, “On the approval of the major asset restructuring of Yaxia Automobile Co., Ltd. and the issuanceof shares to Lu Zhongfang and other assets of the approval of assets ” that Yaxia Automobile swapped all assets and liabilities (“exchange-out assets”) other than the retained assets that do not constitute business as of the date of the assessment of the benchmark for theequivalent portion (“exchange-in assets”) of 100.00% of the equity in Beijing Offcn Education Technology Co., Ltd. (referred to as"Offcn Limited") respectively held by 11 counterparts, including Li Yongxin.And pay the difference between the exchange-out assetsand the exchange-in assets by issuing shares.On 27 December 2018, Yaxia Automobile and the counterpart Yaxia Industrial signed the Confirmation of Delivery of Assets. Theclosing date of the exchange-out assets is 27 December 2018, from the date of delivery, Yaxia Automobile, the counterparty will completethe delivery obligations, regardless of whether the exchange-out assets (including but not limited to land use rights, home ownership,intellectual property rights and qualifications, permits, other intangible assets, etc.) is actually completed, the ownership of the assetsbelongs to Yaxia Industrial, and all the rights, obligations, responsibilities and risks related to the disposed assets (including contingentliabilities, hidden liabilities) are owned and undertaken by Yaxia Industrial, which has the actual control and disposal rights over theexchange-out assets, and Yaxia Automobile no longer has any actual rights. On the same day, Offcn Limited completed the registrationprocedures for industrial and commercial changes on shareholder changematters. After the completion of this alteration, YaxiaAutomobile holds a 100.00% stake in Offcn Limited, accordingly, the controlling shareholder and actual controller of the company willbe changed to Li Yongxin and Lu Zhongfang. On 2 February 2019, Yaxia Automobile changed its name and changed its scope of business.On 23 January 2019, the registration procedures for the transfer of shares of the company and the new shares of the company relatedto the restructuring transaction were completed.Unified social credit code：91340200711040703ACompany residence：Yaxia Automobile City, Yijiang North Road, Jiujiang District, Wuhu City, Anhui Province
Headquarters Address：Block B, Hanhua Century Mansion, No.23 Xueqing Road, Haidian District, BeijingThe nature of the industry：EducationCustomer nature：Mainly natural personsScope of business: technology development, technical services, technology promotion, technology transfer ,technical consultingand technology education and training (only branch to carry out this business)in the field of education and science ; offering exhibitionservices, organizing cultural and artistic exchange activities (excluding performances), conference services, and consult businessmanagement.(Projects subject to approval according to law can only carry out business activities after approval by the relevantdepartments)The financial reporting was approved by the Board of Directors of the Company on April 27, 2023.
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 thefinancial statements of the company and all subsidiaries.A subsidiary is an enterprise or entity controlled by the company.The scope ofthe consolidated financial statements is detailed in note IX (1) “Interest in subsidiaries” of this report. Changes in the scope ofconsolidated financial statements are detailed in Note VIII “Changes In The Consolidated Scope” of this report.Section IV. Basis Of Preparation Of Financial Statements
1. Basis of preparation
The financial statements are prepared on a going concern basis，according to the practical transactions，in accordance with therelevant provisions of the Accounting Standards for Business Enterprises, and based on the important accounting policies and accountingestimates described below.
2. Going concern
As of December 31, 2022,, Offcn Edu's undistributed profits amounted to RMB -600.7297 million yuan, and the total amount ofcurrent liabilities exceeded the total amount of current assets by RMB 6,029.0241 million yuan (including contract liabilities of RMB3,949.7995 million yuan and amounts owed to shareholders of RMB 959.24 million yuan). Because the Company's shareholders LiYongxin and Lu Zhongfang agreed not to collect the Company's outstanding amounts in the foreseeable future, and agreed to provideall necessary financial support for the Company's debts that need to be repaid in the foreseeable future to maintain its continued operation,this financial statement is prepared based on the assumption of going concern.
Section V. The Company’s Significant Accounting Policies And Accounting Estimates
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 latest Accounting Standardsfor Business Enterprises and its application guidelines, interpretations, and other relevant regulations (collectively referred to as"Enterprise Accounting Standards") issued by the Ministry of Finance, which truly and completely present the company's financialposition , financial performance,cash flows and other information for the year then ended.In addition, the financial report compiled by reference to the listing and disclosure requirements of the disclosure provisions of theRules for the Information Disclosure and Compilation of Companies Publicly Issuing Securities NO.15:--General Provisions forFinancial Report(Revised in 2014) of CSRC as well as the Notice on Implementation of the New Accounting Standards for ListedCompanies(Letter of the accounting department [2018] no. 453).
2. Accounting period and business cycle
The Company’s accounting period starts from 1 January and ends on 31 December.
3. Recording currency
The Company adopts Renminbi (RMB) as their recording currency.
4. Measurement attributes of the report items change and used in the current periodMeasurement attributes are adopted by the company including history cost，replacement cost，net realizable value，present value，and fair value.
5. Business combinations
5.1 The accounting treatment of business combinations involving enterprises under common controlThe company realize achieve a merger under the same control in one transaction or through step-by-step multiple transactions.Assets and liabilities obtaining from the merger of enterprise is measured according to the share of book value of consolidated financialstatements of final controlling party under the owner’s equity of combined party within combining date. The difference between thebook value of the net assets obtained from company and the book value of the consideration the combination of payment (or the aggregateface value of shares issued as consideration) is adjusted to the capital reserve. If the capital reserve is insufficient to offset, the retainedearnings shall be adjusted.
5.2 The accounting treatment of business combinations involving enterprises under uncommon control
Where the cost of combination exceeds the acquirer’s interest in the fair value of the acquiree’s identifiable net assets, the differenceis treated as an asset and recognized as goodwill, which is measured at cost on initial recognition. If the combination cost is less than theshare of identifiable fair value of net assets of acquiree, firstly, conducting the review of measurement is necessary to achieve the acquireethe identifiable assets, liabilities and the fair value of contingent liabilities as well as the combination costs. The acquiree combinationcosts after reviews are still less than the fair value of identifiable net asset, the difference will be included into the current profits andlosses.Step-by-step multiple transaction to achieve business combinations not under common control should be handled in the followingorder：
（1）Adjust the initial investment cost of long-term equity investments. If the equity held before the purchase date is accountedfor using the equity method, it is remeasured at the fair value of the equity on the purchase date, and the difference between the fair valueand its book value is included in the current investment income; Changes in other comprehensive income and other owners' equity underthe equity method shall be converted to the current income at the acquisition date, except for other comprehensive income arising fromthe net liabilities or net assets’changes of the benefit plan remeasured by the investee and. arising from changes in the fair value ofinvestment in other equity instruments held.
（2）Recognize goodwill (or the amount included in the current profit or loss). Compare the initial investment cost of the adjustedlong-term equity investment with the fair value of the identifiable net assets of the subsidiary that should be enjoyed on the purchasedate. If the former is greater than the latter, the difference is recognized as goodwill; if he former is less than the latter, and the differenceis booked into the current profit and loss.
Circumstances of disposing of equity through multiple transactions to the loss of control of subsidiaries
(1)Determine whether the various transactions in the process of step-by-step disposal of equity to the loss of control of subsidiariesbelong to the "package deal" principle
Generally transactions in stages are treatment as a package deal in accounting if the transaction terms, conditions, and economicimpact of 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 other transactions.
(2) Each transaction in the process of disposing of the equity in stages to the loss of control of the subsidiary belongs to the"package deal" accounting method
Disposal of various transactions in the equity investment of the subsidiary until the loss of control belongs to a package oftransactions, each transaction should be accounted for as a transaction that disposes of the subsidiary and loses control; however, Beforelosing he control each time, the difference between the price and the share of the subsidiary's net asset share corresponding to the disposalof the investment shall be recognized as other comprehensive income in the consolidated financial statements, and shall be transferred
to the profit and loss for the period when control is lost.In the consolidated financial statements, the remaining equity should be remeasured at its fair value on the date when control islost.The sum of the consideration obtained from the disposal of the equity and the fair value of the remaining equity, minus the differencebetween the shares of the net assets that should be continuously calculated by the atomic company since the purchase date based on theoriginal shareholding ratio, shall be included in the investment income of the period when the company loses control.. Othercomprehensive income related to the original subsidiary 's equity investment shall be converted to current investment income or retainedearnings when control is lost.
（3）Each transaction in the process of disposing of equity in steps to the loss of control of a subsidiary is not an accountingtreatment of “package deal”
If the disposal of the investment in the subsidiary does not lose control, the difference between the disposal price in the consolidatedfinancial statements and the share of the subsidiary ’s net asset to the disposal investment is included in the capital reserve (capitalpremium or equity premium). If the capital premium is insufficient to offset,the retained earnings should be adjusted.
When disposing of the loss of control over the investment in a subsidiary, in the consolidated financial statements, the remainingequity should be remeasured at its fair value on the date when control is lost. The sum of the consideration obtained from the disposalof equity and the fair value of the remaining equity minus the share of the net assets that should have been calculated by the originalsubsidiary from the date of purchase based on the original shareholding ratio is included in the investment income. Other comprehensiveincome related to the equity investment of the original subsidiary shall be converted to current investment income or retained earningswhen control is lost.
6. Preparation of consolidated financial statements
Consolidated financial statements are based on the Parent’s and its subsidiaries’ financial statements in accordance with AccountingStandards for Business Enterprises No.33 – Consolidated financial statement.
7. Classification of joint arrangement and accounting methods of joint operations
7.1 Joint venture arrangements classification and Co-operation accounting treatment
A joint arrangement refers to an arrangement jointly by two or more parties . The joint arrangement has the following characteristics:
(1) all participants are bound by the arrangement; (2) two or more participants exercise joint control over the arrangement. No singleparty shall be able to control the arrangement, and any party that has joint control over the arrangement shall be able to prevent any otherparty or combination of parties from controlling the arrangement alone.
Joint control refers to the shared control over a certain economic activity as required in the contract, and only exists when allinvestors sharing such control related to the activity have consented.
A joint arrangement is classified as either a joint operation or a joint venture. A joint operation is a joint arrangement whereby thejoint operators have rights to the assets,and obligations for the liabilities, relating to the arrangement. A joint venture is a joint
arrangement whereby the joint ventures only have the rights to the net assets under this arrangement.
7.2 Accounting treatment of joint venture arrangement
A joint operator shall recognize the following items in relation to its interest in a joint operation, and account for them inaccordance with relevant accounting standards:1) Its solely-held assets, and its share of any assets held jointly;2) Its solely-assumedliabilities, and its share of any liabilities incurred jointly;3) Its revenue from the sale of its share of the output arising from the jointoperation;4) Its share of the revenue from sale of the output by the joint operation; 5) Its solely-incurred expenses and its share of anyexpenses incurred jointly.The participants in a joint venture shall, in accordance with the Accounting Standards for Enterprises No.2 long-term equityinvestment, make accounting arrangements for the investment.
8. Criteria for the determination of cash and cash equivalents
The term "cash" of cash flow statement refers to cash on hand and deposits that are available for payment at any time. The term of“cash equivalents” refers to short-term (usually due within 3 months from the acquisition date) and highly liquid investments that arereadily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
9. Foreign currency transaction and foreign currency statement translation
9.1 Transactions denominated in foreign currencies
On initial recognition, a foreign currency amount, including share capital and capital reserves, is translated into functional currencyby applying the spot exchange rate on the date of the transaction announced by People’s Bank of China. At the balance sheet date, foreigncurrency balance comprised of foreign currency monetary items and foreign currency non-monetary items, shall be adjusted: foreigncurrency monetary items, of which the exchange difference between initial exchange rate and the spot exchange rate at the end of theperiod, shall be recognized into profit and loss for the period; exchange differences related to a specific-purpose borrowing denominatedin foreign currency for constructing an asset that qualifies for capitalization shall be capitalized before it’s ready for intended use andrecognized into cost of construction in progress; foreign currency non-monetary items measured at fair value, the difference of whichshall be recognized into profit and loss for the period as fair value changes.
9.2 Translation of financial statements denominated in foreign currencies
The assets and liabilities of the balance sheet are translated using the spot exchange rate at the balance sheet date; all items exceptfor 'undistributed profits' of the owner's equity are translated at the spot exchange rate on the transaction date. The revenue and expensesin the income statement are translated using the approximate rate of the spot exchange rate on the transaction date. Differences arisingfrom the translation of foreign currency financial statements are recognised as the 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 one party to the contractual provisions of theinstrument.All regular ways purchasing or selling of financial assets are recognized and derecognized on a trade date basis. Regular waypurchasing or selling, means that receive or deliver financial assets within the time limit stipulated by regulations or common practices,as agreed in the terms of the contract. Trade date, is the date the company promises to buy in or sell out the financial assets.
The company derecognize the financial assets(either a part, or a part of a similar group),which is writing it off the balance sheet, iffollowing conditions are met:
（1）Expiration of the right to receive cash flow from financial assets;
（2）The right to receive cash flow from financial assets has been transferred, or bear the obligation to pay all cash received tothird party in time due to “Hand-Over arrangement”; and (a) all risks and benefits of the financial assets have been transferred virtually,or (b) though not all risks and benefits of the financial assets have been transferred, but lose the 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 of financial assets,thecompany’s financial assets have initially been classified as follows: financial assets at amortized cost, and financial assets at fair valuethrough other comprehensive income,financial assets at fair value through profit or loss. Subsequent measurement of financial assetsdepends on their categories.
The company's classification of financial assets is based on the company's business model and its characteristics of cash flow.
（1）Financial assets at amortized cost
Financial assets are classified as financial assets at amortized cost when following conditions are met: the company’s businessmodel for managing financial assets targets to receive contractual cash flow; The contractual terms of the financial asset stipulate thatthe cash flow generated on a specific date is only the payment of the principal and the interest based on the outstanding principal amount.For such financial assets, using effective interest rate method and subsequently measure at amortized cost, 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 investment at fair value through other comprehensive income when following conditionsare met:the company’s business model for managing financial assets targets both the collection of contractual cash flows and the sale offinancial assets; The contractual terms of the financial asset stipulate that the cash flow generated on a specific date is only the paymentof the principal and the interest based on the outstanding principal amount. For such financial assets, subsequently measure at fair value.The discount or premium is amortized using the effective interest method and recognized as interest income or expense. Except for theimpairment loss and the exchange differences of foreign monetary financial assets are recognized as profit or loss for the period, thechanges in the fair value of such financial assets are recognized in other comprehensive income, the accumulated gains or losses istransferred to profit or loss until it’s derecognized. Interest income related to such financial assets is included in the current profit andloss.
（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 through other comprehensiveincome, and only the related dividend income is recognized in profit or loss. The accumulated gains or losses is transferred to retainedearnings until it’s derecognized.
（4）Financial assets at fair value through profit or loss
Any financial assets that are not held in one of the two business models mentioned above are measured at fair value through profitor loss.At the time of initial recognition, in order to eliminate or significantly reduce accounting mismatches, financial assets can bedesignated as financial assets at fair value through profit or loss.For such financial assets, subsequently measured at fair value, and allchanges 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 all affected financialassets.
For financial assets at fair value through profit or loss, the related transaction expense is directly recognized in current profit or lossas incurred,and other financial assets’transaction expense is included in the initial recognition amount.
10.3 Classification and measurement of financial liabilities
The company’s financial assets have initially been classified as follows: financial liabilities at amortized cost and financial liabilitiesat fair value through profit or loss.
The financial liabilities meeting any of the following conditions can be designated as the financial liabilities at fair value throughprofit and loss：（1） Such designation can eliminate or significantly reduce accounting mismatches.（2）According to corporate riskmanagement or investment strategies as stated in formal written documents, the management and performance evaluation of financialliability portfolios or combinations of financial assets and financial liabilities are based on fair value , and reported to key managementpersonnel on this 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 liabilities measured at fair valuethrough profit or loss, the related transaction expense is directly recognized in current profit or loss. The related transaction expense ofother financial liabilities is included in the initial recognition amount.
Subsequent measurement of financial liabilities depends on its categories:
（1）Financial liabilities at amortized cost
Based on amortized cost, subsequently measure it using the effective interest rate method.
（2）Financial liabilities at fair value through profit or loss
It includes financial liabilities (including derivatives that are financial liabilities) and financial liabilities that are designated at fairvalue through profit or loss.
10.4 Offsetting of financial instruments
If the following conditions are met at the same time, the net amount of the financial assets and financial liabilities offset each othershall be shown in the balance sheet: there is a legal right to offset the recognized amount, and such legal right is currentlyenforceable;Plans to liquidate the financial asset on a net basis or simultaneously liquidate the financial liability.
10.5 Impairment of financial assets
Based on expected credit losses, the Company undertakes impairment treatment and confirms loss provisions of financial assets atamortised cost, debt instrument investments at fair value through other comprehensive income and financial guarantee contracts.Creditloss refers to the difference between the cash flow of all contracts discounted at the original effective interest rate and the expected cashflow 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 at amortized costand financial assets (debt instruments) measured at fair value and whose changes are accounted for in 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 company shall measure theloss provision at the amount equivalent to the expected credit loss of the financial instrument for the entire life of the instrument; If thecredit risk of the financial instrument has not increased significantly since the initial recognition, the company shall measure the lossprovision at the amount equivalent to the expected credit loss of the financial instrument in the next 12 months. The increase or rolloveramount of the loss provision shall be recorded in the current profit and loss as an impairment loss or gain. For the company's specificassessment of credit risk, please refer to Note X of this report for details. “Risks Associated With Financial Instruments”.
The credit risk of the instrument is generally deemed to have increased significantly if the default is more than 30 days, unless thereis conclusive evidence that the credit risk of the instrument has not increased significantly since the initial recognition.
Specifically, the company divides the process of credit impairment of financial instruments without credit impairment at the timeof purchase or origination into three stages. There are different accounting treatments for the impairment of financial instruments atdifferent stages:
Stage 1: credit risk has not increased significantly since initial recognition.
For the financial instrument at this stage, the enterprise shall measure the loss provision according to the expected credit loss in thenext 12 months, and calculate the interest income according to its book balance (that is, the impairment provision is not deducted) andthe actual interest rate (if the instrument is a financial asset, the same below).
Stage 2: credit risk has increased significantly since the initial recognition, but credit impairment has not yet occurred.
For a financial instrument at this stage, the enterprise shall measure the loss provision according to the expected credit loss of theinstrument throughout its life, and calculate interest income according to its book balance and actual interest rate.
Stage 3: credit impairment occurs after initial recognition
For the financial instrument in this stage, the enterprise shall calculate the loss provision according to the expected credit loss ofthe instrument throughout its lifetime, but the calculation of interest income is different from that of the financial asset in the first two
stages. For the financial assets whose credit impairment has occurred, the enterprise shall calculate the interest income at its amortizedcost (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 enterprise shall only recognize thechanges in the expected credit loss during the whole duration after the initial recognition as loss provision, and calculate interest incomeat its 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 the balance sheetdate with the credit risk at the time of the initial recognition, but directly assumes that the credit risk of the instrument has not increasedsignificantly since the initial recognition.If the enterprise determine financial instruments, the lower the risk of default in the borrowers in the short-term ability to fulfill itsobligation to pay the contract cash flow is very strong, and even the economic situation and business environment in a long term adversechange, also will not necessarily reduce the borrower's ability to fulfill its obligation to pay the contract cash flow, then the financialinstruments can be seen as a lower credit risk.
（3）Receivables and lease receivables
The company for the accounting standards for enterprises No. 14 - revenues, excluding provisions by major financing elements(including according to the criteria does not consider no more than a year of financing elements) in the contract of receivables, thesimplified model of credit losses, always in accordance with the expected amount of credit losses throughout the duration of measuringits losses.
For receivables containing significant financing elements and lease receivables specified in the accounting standards for businessenterprises No. 21 -- leasing, the company makes an accounting policy choice and chooses to adopt a simplified model of expected creditloss, that is, to measure the loss provision according to the amount equivalent to the expected credit loss in the whole duration.
10.6 Financial asset transfer
If almost all the risks and rewards of ownership of financial assets have been transferred to the transferee, the financial assets arederecognized; if almost all the risks and rewards of ownership of the financial assets are retained, the financial assets are not derecognized.
Neither transfer nor retain almost all risks and rewards of ownership of financial assets, which are dealt with as follows: If thefinancial assets are abandoned, derecognize the financial assets and recognize the assets and liabilities; If not abandoned, recognize therelevant financial assets according to the extent to which they continue to be involved in the transferred financial assets, and recognizethe related liabilities.
If the transferred financial assets are continued to be involved by financial warranty, the assets should be recognized at lower of thebook value of the financial assets and the financial warranty amount. The financial warranty amount refers to the maximum amount ofthe consideration received that will be required to be repaid.
11. Accounts receivable
For accounts receivable, whether significant financing is involved or not, the simplified model of expected credit loss is adopted.
The Company will always measure its provision for loss based on the amount equivalent to the expected credit loss of its entire duration,and the increase or reversal amount of the provision for loss resulting therefrom is included in the profit and loss of the period as animpairment loss or gain.The company considers all reasonable and evidence-based information, including forward-looking information, to estimate theexpected credit loss of the accounts receivables individually or in combination.
When a single financial asset can evaluate the expected credit loss information at a reasonable cost, the company chooses to calculatethe credit loss individually. When a single financial asset cannot evaluate the expected credit loss information at a reasonable cost, thecompany will divide the accounts receivables into several combinations in accordance with the characteristics of credit risk, and theexpected credit loss is calculated on the basis of the combination. The basis for determining the combination is as follows:
| Combination Type | The basis for determining 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, combines thecurrent situation and the forecast of future economic conditions, and prepared a comparison table between the age of accounts receivableand the expected credit loss rate for the entire duration to calculate the expected credit loss.
12. Receivables financing
If a financial asset meets the following conditions at the same time, it is classified as a financial assets at fair value through othercomprehensive income: The company's business model for managing the financial asset is to both collect contract cash flows and sellfinancial assets; The contractual terms of the financial asset stipulate that the cash flows generated on a particular date are only paymentsof principal and interest based on the amount of outstanding principal.The company will transfer the receivables held in the form of discount or endorsement, and this type of business is more frequentand the amount involved is larger whose management business model is essentially to receive both contract cash flows and sell.Inaccordance with the relevant provisions of financial instruments. the company classifies them as financial assets that measure changesat fair value and account for changes in other comprehensive income.
13. Other receivables
The company adopts the general model of expected credit loss to deal with other receivables, as detailed in Note V (10) “FinancialInstruments”.
The company considers all reasonable and substantiated information, including forward-looking information, to estimate theexpected credit losses of other receivables individually or in combination.
When individual financial assets can expect credit losses at a reasonable cost evaluation of information, the company choose
individual credit losses, when individual financial assets not credit losses at a reasonable cost evaluation of information, the companyon the basis of credit risk characteristics could be divided into several other receivables portfolio, based on the combination of computingexpected credit losses, determine the basis of a combination is as follows:
| Type | Basis |
| Combination 1 | Amounts due from related parties |
| Combination 2 | Staff receivables, deposits, security deposits |
| Combination 3 | Receivables other than Portfolio 1, Portfolio 2 |
For other receivables divided into portfolios, the company calculates the expected credit loss through default risk exposure andexpected credit loss rate in the next 12 months or the whole duration, by referring to the historical credit loss experience and combiningthe current situation with the forecast of future economic conditions.
14. Inventory
14.1 Classification of inventories
Inventories refer to the finished goods or commodities held for sale in daily activities, goods in progress in the productionprocess, consumed materials and supplies in the production process or providing services of the Company.
14.2 Measurement of inventories transferred out
Finished goods are accounted for using the weighted average at the end of the month method upon issuance.
14.3 Basis for determining net realizable value of inventories and provision methods for decline in value of inventories.
At the balance sheet date, inventories are measured at the lower of cost and net realizable value. If the net realizable value is belowthe cost of inventories, a provision for decline in value of inventories is made. For inventories of goods directly used for sale,in thenormal production and operation process, the net realizable value is determined by the amount of the estimated selling price of theinventory less the estimated sales cost and relevant taxes and fees; for material inventories that need to be processed, in the normalproduction and operation process, the net realizable value is determined by the amount of the estimated selling price of finished productsproduced less the estimated cost to be occurred at the time of completion, the estimated selling expenses and related taxes; on the balancesheet date, in the same inventory, if some has contract price agreement, and the other has not, the net realizable value is determinedseparately and compared with its corresponding cost to determine the amount of the provision for inventory depreciation or reversal.
14.4 Inventory count system
The perpetual inventory system is maintained for stock system.
14.5 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.
15. Contract asset
1.Confirmation methods and standards of contract assets
The company presented as contract assets or contract liabilities in the statement of financial position based on the relationshipbetween performance obligations and customer payments.The right that the company are entitled to collect the consideration for havingtransferred goods or services to the client（except receivables）is presented as contract asset.
2. Determination methods and accounting treatment methods of expected credit loss of contract assets
The company adopts the simplified expected credit loss model for contract assets, regardless of whether it contains major financingcomponents, that is, the loss reserves are always measured according to the amount of expected credit losses during the entire lifetime,and the resulting increase or reversal of the loss reserves are included in the current profit and loss as an impairment loss or gain.
16. Assets held-for-sale
The company divides the corporate components（or non-current asset） that meet all of the following conditions into holding forsale:（1）Based on the usual practice of selling such assets or disposal groups in similar transactions, they can be sold immediately undercurrent conditions;（2）The sale is highly probable, a resolution has been made on a sale plan and a firm purchase commitment has beenobtained and it is expected that the sale will be completed within one year. Approvals from relevant authorities or regulatory authoritieshave been obtained in accordance with relevant regulations.
The Company adjusts the expected net salvage value held for sale to reflect the net amount of its fair value less costs to sell(notover its carrying amount). The difference between the original book value and the adjusted net residual value is included in the profit orloss of the current period as an asset impairment loss. At the same time, provision for impairment of assets held for sale was made. Forthe amount of impairment loss of assets confirmed by the disposal group held for sale, the book value of goodwill in the disposal groupshould be offset first, and then the proportion of the book value of various non-current assets measured in the disposal group accordingto the application of this standard measurement. Proportionately deducts its book value.
If the fair value of the non-current assets held for sale on the balance sheet date is less than the net value of the selling expenses,the amount of the previous write-down shall be restored and the impairment of assets recognized after being classified as held for saleshall be made. The amount of the loss is reversed and the amount reversed is included in the current profit or loss. Impairment losses onassets recognized prior to classification as held for sale shall not be reversed. If the fair value of the disposal group held for sale on thesubsequent balance sheet day is increased, the net amount after the sale expense is increased, the amount of the previously written downamount shall be restored, and shall apply to the measurement requirements of this standard after being classified as held for sale. Theimpairment loss of assets confirmed by non-current assets is reversed within the amount, and the reversed amount is included in thecurrent profit or loss. The carrying amount of the goodwill that has been eliminated and the non-current assets applicable to themeasurement of this standard will not be reversed if it is recognized before the assets are classified as held for sale. The subsequentreversal of the asset impairment loss confirmed by the disposal group held for sale shall be based on the proportion of the book value of
various non-current assets measured and applied in the disposal group in addition to goodwill, and shall increase its book valueproportionately.The company is committed to a sale plan involving loss of control of subsidiary shall classify all the assets and liabilities of thatsubsidiary held for sale in consolidated balance sheets when the above criteria are met, regardless of whether the Company retain anon-controlling interests in its former subsidiary after the sale.In the balance sheets of parent company the investment should beclassified as held for sale in full.
17. Debt investment
The Company uses the general model of expected credit losses for debt investment. For details, please refer to NoteV.(10) .“Financial Instruments”.
18. Long-term equity investment
18.1 Determination of investment costs
(1) The business combinations under common control, the combined party to pay in cash, transfers non-cash assets, assumed debtor equity securities as combined consideration, on the combining date according to the owner's equity in the combined party on the finalcontrol party's share of the book value of the consolidated financial statements as its initial investment cost. The difference betweeninitial investment cost in the long-term equity investment and book value of the paid merger consideration of the total amount of theface value of the issued shares to adjust capital reserves; if capital reserves are insufficient to write-downs, it needs to adjust the retainedearnings.
Where a business combination under the same control is realized step by step, the combination date calculated on the basis of theshareholding ratio shall enjoy the share of the book owner ’s equity of the combined party as the initial investment cost of the investment.The difference between the initial investment cost and the book value of the original long-term equity investment plus the sum of thebook values of further consideration paid for the new shares paid on the merger date is adjusted for capital reserve (capital premium orequity premium).if capital reserve insufficient to offset,then adjust retained earnings.
(2) The business combinations not under common control, in accordance with the payment of the fair value of the mergerconsideration is its initial investment cost on the acquisition date.
(3) Except for the formation of enterprise merger: if the purchase price is paid in cash, the initial investment cost shall be thepurchase price actually paid;Where equity securities are issued, the fair value of equity securities issued shall be taken as the initialinvestment cost;Where an investor invests, the initial investment cost shall be the value agreed upon in the investment contract oragreement (except where the value agreed upon in the contract or agreement is not fair).
18.2 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 cost method in theindividual financial statements of the company; Long-term equity investments with joint control or significant influence shall beaccounted for using the equity method.
Under the cost method, a long-term equity investment is measured at initial investment cost . Except for cash dividends or profitsalready declared but not yet paid that are included in the price or consideration actually paid upon acquisition of the investment,investment income is recognized in the period in accordance with the attributable share of cash dividends or profit distributions declaredby the investee,and at the same time whether long-term investment in accordance with the relevant policy considerations of the declinedvalue of asset impairment.
For checking by the equity method, the initial investment cost of the long-term equity investment is not adjusted if it is greater thanthe fair value share of the net identifiable assets of the investee in the investment; if the initial investment cost of the long-term equityinvestment is smaller than the fair value share of the net identifiable assets of the investee in the investment, the balance is charged tocurrent profit and loss and the cost of the long-term equity investment is adjusted.
When the equity method is adopted, after the acquisition of long-term equity investment, the investment profit and loss shall berecognized and the book value of long-term equity investment shall be adjusted according to the share of net profit and loss realized bythe investee that should be enjoyed or Shared. Upon confirmation of the invested entity shall be accorded to the net profits and losses ofthe share, in order to obtain the invested entity, when the fair value of the identifiable assets such as basis, according to the company'saccounting policies and accounting periods, and offset and associated enterprises and joint ventures between insider trading profits andlosses according to the shareholding calculation belongs to part of the investment enterprise (but insider trading loss belongs to the assetimpairment loss, should be a full confirmation), net income of the invested entity after adjustment for confirmation. According to theprofit or cash dividend declared to be distributed by the investee, calculate the share payable, and correspondingly reduce the book valueof the long-term equity investment. The company shall recognize the net loss incurred by the investee to the extent that the book valueof the long-term equity investment and other long-term rights and interests substantially constituting the net investment of the investeeshall be written down to zero, except where the company is obligated to bear additional losses. For the changes of owners' equity otherthan the net profit and loss of the investee, the book value of the long-term equity investment shall be adjusted and included in theowners' equity.
18.3 Determine the basis of controlling and significant influence on the invested entity
Control refers to having the power over the investee, enjoying the variable return through participating in the investee's relevantactivities, and having the ability to use the power over the investee to affect the return amount; Major influence means that the investorhas the right to participate in the decision-making of the financial and business policies of the investee, but cannot control or jointlycontrol the formulation of these policies with other parties.
18.4 Disposal of long-term equity investments
（1）Partial disposal of a long-term equity investment in a subsidiary without loss of control
If part of the long-term equity investment in the subsidiary is disposed of without losing control, the difference between the disposalprice and the book value corresponding to the disposal investment shall be recognized as the current investment income.
（2）Loss of control over a subsidiary by partial disposal of an equity investment or other reasons
If the company loses control over the subsidiary due to the disposal of equity investment or other reasons, the book value of thelong-term equity investment corresponding to the sold equity shall be carried forward, and the difference between the sale price and the
book value of the disposal long-term equity investment shall be recognized as investment income (loss); Meanwhile, the remainingequity shall be recognized as long-term equity investment or other relevant financial assets according to its book value. If the remainingequity after disposal is able 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.
18.5 Methods of impairment assessment and determining the provision for impairment loss
For the long term investment in subsidiaries, joint venture and associates, the Company reviews the long-term equity investmentsat each balance sheet date to determine whether there is any indication that they have suffered an impairment loss. If an impairmentindication exists, the recoverable amount is estimated. If such recoverable amount is less than its carrying amount, a provision forimpairment losses in respect of the deficit is recognized in profit or loss for the period.
19. Investment property
19.1 The Company’s investment properties include a land use right that is leased out; a land use right held for transfer upon capitalappreciation; and a building that is leased out.
19.2 The Company uses the cost model for subsequent measurement of investment property, and adopts a depreciation oramortization policy for the investment property, which is consistent with that for fixed assets or intangible assets. The Company reviewsthe investment properties at each balance sheet date to determine whether there is any indication that they have suffered an impairmentloss. If there is any indication that such assets may be impaired, the recoverable amounts are estimated for such assets. If the recoverableamount of an asset or an asset Company is less than its carrying amount, the deficit is accounted for as an impairment loss and isrecognized in profit or loss for the period.
20. Fixed asset
20.1 Recognition, measurement and depreciation criteria for fixed assets
Fixed assets are tangible assets that are held for use in the production or supply of goods or services, for rental to others, or foradministrative purposes, and have useful lives of more than one accounting year.
Fixed assets are initially measured at acquisition cost, and depreciated over its useful life using the straight-line method since themonth subsequent to the one in which it is ready for intended use.
20.2 Deprecation methods for each category of fixed assets
| Category | Deprecation methods | Depreciation period (years) | Residual value rate (%) | Annual depreciation rate (%) |
| Houses and buildings | Straight-line depreciation method | 20-40 | 5 | 2.38-4.75 |
| Decoration of fixed assets | Straight-line depreciation method | 4-10 | -- | 10.00-25.00 |
| Transportation equipment | Straight-line depreciation method | 4 | 5 | 23.75 |
| Electronic equipment | Straight-line depreciation method | 3-5 | 5 | 19.00-31.67 |
Category
| Category | Deprecation methods | Depreciation period (years) | Residual value rate (%) | Annual depreciation rate (%) |
| Office equipment | Straight-line depreciation method | 3-5 | 5 | 19.00-31.67 |
20.3 Impairment method of fixed assets, impairment preparation provision method
The date of balance sheet, some indications state clearly that the fixed assets conduct impairment, according to the differencebetween the book value and recoverable amount provision the corresponding impairment loss.
21. Construction in progress
21.1 Construction in progress should be transferred into fixed assets at its actual costs after it has reached the working condition forits intended use. Construction in progress that has reached the working condition but not completed, shall be transferred at its estimatedcosts. The estimated cost of construction in progress should be adjusted against the actual costs after completion of settlement, while thedepreciation already provided will not be adjusted.
21.2 The Company assesses at each balance sheet date whether there is any indication that construction in progress may be impaired.If there is any indication that such assets may be impaired, recoverable amounts are estimated for such assets.
22. Borrowing cost
22.1 Recognition criteria of capitalization
Borrowing costs are capitalized when expenditures for such asset and borrowing costs are incurred and activities relating to theacquisition, construction or production of the asset that are necessary to prepare the asset for its intended use or sale have commenced.Other borrowing costs are recognized as an expense in the period in which they are incurred.
22.2 Period of capitalization
（1）Borrowing costs directly attributable to the acquisition, construction or production of qualifying asset are capitalized whenexpenditures for such asset and borrowing costs are incurred and activities relating to the acquisition, construction or production of theasset that are necessary to prepare the asset for its intended use or sale have commenced.
（2）Capitalization of borrowing costs ceases when the qualifying asset being acquired, constructed or produced becomes readyfor its intended use or sale. 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 of more than 3 months.Capitalization is suspended until the acquisition, construction or production of the asset is resumed.
（3）Capitalization of borrowing costs ceases when the qualifying asset being acquired, constructed or produced becomes readyfor its intended use or sale，the borrowing costs stop capitalization.
22.3 Capitalization amount of borrowing costs
Where funds are borrowed under a specific-purpose borrowing, the amount of interest to be capitalized is the actual interest expense
incurred on that borrowing for the period less any bank interest earned from depositing the borrowed funds before being used on theasset or any investment income on the temporary investment of those funds. Where funds are borrowed under general-purposeborrowings, the Company determines the amount of interest to be capitalized on such borrowings by applying a capitalization rate to theweighted average of the excess of cumulative expenditures on the asset over the amounts of specific-purpose borrowings. Thecapitalization rate is the weighted average of the interest rates applicable to the general-purpose borrowings.
23. Right-of-use assets
Except for short-term leases and leases for which the underlying asset is of low value, at the commencement date of the lease, theCompany recognizes a right-of-use assets.The Company measures the right-of-use assets at cost. The cost of the right-of-use assets comprises:
23.1 The amount of the initial measurement of the lease liabilities.
23.2 Any lease payments made at or before the commencement date, less any lease incentives.
23.3 Any initial direct costs incurred by the Company.
23.4 An estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on whichit is located or restoring the underlying asset to the condition required by the terms and conditions of the lease. If the aforementionedcosts are incurred for the production of inventory, it is applicable to ASBE No.1-Inventory.
The company recognizes and measures the costs mentioned in item 4 above in accordance with the ASBE No. 13 - Contingencies.
Initial direct costs are the incremental costs incurred to achieve the lease. Incremental costs are those costs that would not have beenincurred if the enterprise had not acquired the lease.
Right-of-use assets are depreciated by the Company in accordance with the ASBE No.4 Fixed Assets. If the Company is reasonablycertain, that the lease will transfer ownership of the underlying asset to the Company by the end of the lease term, the right-of-use assetsis depreciated from the commencement date to the end of the useful life of the underlying asset. Otherwise, the right-of-use assets isdepreciated from the commencement date to the earlier of the end of the useful life of the right-of-use assets or the end of the lease term.
The Company applies ASBE No. 8 Impairment of Assets, to determine whether the right-of-use assets are impaired and performaccounting treatment to identified impairment loss.
24. Intangible assets
24.1 Intangible assets, including land use rights etc. are recognized at costs.
24.2 Intangible assets with finite useful lives are amotized in accordance with the expected realization method of the economicbenefits related to the intangible asset over its estimated useful life. If it is not possible to reliably determine the expected realizationmethod,use the straight-line method.The specific years are as follows:
Item
| Item | Useful life(Year) |
| Land use rights | 40 |
| Software use rights | 5-10 |
| Trademark rights | 10 |
24.3 The Company assesses at each balance sheet date whether there is any indication that the intangible assets with definite lifemay be impaired. If there is any indication that such assets may be impaired, recoverable amounts are estimated for such assets. If therecoverable amount of an asset or an asset group is less than its carrying amount, the deficit is accounted for as an impairment loss andis recognized in profit or loss for the period. For an intangible asset with infinite useful life, the Company reviews the useful life andamortization method at the end of the period.
24.4 Expenditure during the development phase that meets all of the following conditions at the same time is recognized asintangible asset. Expenditure during development phase that does not meet the following conditions is recognized in profit or loss forthe period.(1) It is technically feasible to complete the intangible asset so that it will be available for use or sale;(2) The Company hasthe intention to complete the intangible asset and use or sell it;(3) The Company can demonstrate the ways in which the intangible assetwill generate economic benefits, including the evidence of the existence of a market for the output of the intangible asset or the intangibleasset itself or, if it is to be used internally, the usefulness of the intangible asset;(4) The availability of adequate technical, financial andother resources to complete the development and the ability to use or sell the intangible asset; and(5) The expenditure attributable to theintangible asset during its development phase can be reliably measured.
25. Long-term asset impairment
The enterprise should judge whether there is any indication that the asset may be impaired at the balance sheet date.
The goodwill and intangible assets with an uncertain useful life resulting from a business combination should be tested forimpairment annually, regardless of whether there is any indication of impairment.
If the following signs exist, the assets may be impaired:
(1) The market price of assets fell sharply in the current period, and the decline was significantly higher than the expected declinedue to the passage of time or normal use; (2) Significant changes of the economic, technical or legal environment in which the enterpriseoperates and the market in which the assets are located will occur in the current period or in the near future, which will adversely affectthe company; (3) The market interest rate or other market investment returns have increased during the current period, which affects thecompany's discount rate for calculating the present value of the expected future cash flow of assets, leading to the recoverable amounthas been greatly reduced; (4) There is evidence that the assets have become obsolete or their entities have been damaged; (5) The assetshave been or will be idle, terminated or planned to be disposed of in advance; (6)The evidence reported by the enterprise indicates thateconomic performance of the assets has been or will be lower than expected, such as the net cash flow created by the assets or the realizedoperating profit (or loss) is far lower (or higher) than the expected amount; (7) Other indications that the asset may have signs ofimpairment.
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 asset minus the disposalcosts 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 costs incurred to makethe asset available for sale.The present value of the estimated future cash flows of the asset should be determined by discounting the amount of the assetbased on the expected future cash flow generated during the continuous use of the asset and at the time of final disposal. The presentvalue of the expected future cash flow of the asset should take into account factors 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 lower than its bookvalue, the book value of the asset should be written down to the recoverable amount, and the reduced amount should be recognized asthe asset impairment loss and included in the current profit and loss.Meanwhile, corresponding provisions for asset impairment shouldbe made.
26. Long-term prepaid expenses
Long-term prepaid expenses are recorded according to the actual amount incurred and amortized in the period of benefit or withinthe prescribed period.If the long-term deferred expense item cannot benefit the subsequent accounting period, the amortized value of theitem that has not been amortized will be transferred into the current profit and loss.
27. Contract liabilities
The company presented as contract assets or contract liabilities in the statement of financial position based on the relationshipbetween performance obligations and customer payments. The company's obligation to transfer goods or provide services to customersfor consideration received or receivable from customers is presented as contract liabilities.
28. Employee's salary
Employee salary is to point to the all forms of remuneration or compensation that Company receive services rendered by employees or giveexcept share-based payment in order to terminate the labor relationship. Employee salary includes short-term salary, severance welfare, dismissalbenefits and other long-term employee benefits. The salary that Company offered to the worker spouse, children, dependents, the deceasedemployee survivors and other beneficiaries, also belong to employee’s salary.
28.1 Short-term employee benefits
During the accounting period when the employees provide services, the company shall recognize the actual short-term compensation asliabilities and record it into the current profit and loss or the cost of related assets. Among them, non-monetary welfare is measured according tofair value.
28.2 Termination benefits
When the Company terminates the employment relationship with employees before the expiration of the employment contracts orprovides compensation as an offer to encourage employees to accept voluntary redundancy, if the Company has a formal plan fortermination of employment relationship or has made an offer for voluntary redundancy which will be implemented immediately, and theCompany cannot unilaterally withdraw from the termination plan or the redundancy offer, a provision for the compensation payablearising from the termination of employment relationship with employees is recognized with a corresponding charge to the profit or lossfor the period, and include in current profits or losses.
28.3 Defined contribution plan
Pursuant to the relevant laws and regulations of the PRC, employees of the Company participate in the social insurance systemestablished and managed by government organization. The Company makes social insurance contributions, including contributions tobasic pension insurance at the applicable benchmarks and rates stipulated by the government for the benefit of its employees. The pensioninsurance contributions are recognized as part of the cost of assets or charged to profit or loss on an accrual basis.
29. Lease liabilities
Substantial on the commencement date of the lease term, the Company recognizes the present value of the unpaid lease paymentsas lease liabilities.
The lease liabilities are initially measured at the present value of the lease payment not yet paid on the start date of the lease term.
Lease payments include the following five items:
29.1 Fixed payments and in-substance fixed payments, if there is a lease incentive, deduct the amount related to the lease incentive.
29.2 Variable lease payments that depend on an index or rate, which is determined at the time of initial measurement based on theindex or rate at the commencement date of the lease term.
29.3 Exercise price for a purchase option provided that the lessee is reasonably certain that the option shall be exercised.
29.4 Payments for exercising the option to terminate the lease provided that the lease term reflects that the lessee shall exercise theoption to terminate the lease option.
29.5 Estimated payments due based on guaranteed residual value provided by the lessee.
When calculating the present value of lease payments, the Company adopts the interest rate implicit in the lease as the discountrate; if the interest rate implicit in the lease cannot be determined, the Company adopts the incremental borrowing rate as the discountrate.
30. Estimated liabilities
30.1 The company shall recognize this obligation as contingent liability when the obligations arising from the provision of externalguarantees, litigation matters, product quality guarantees, loss contracts and other contingencies become the current obligations assumedby the company and the fulfillment of such obligations is likely to result in the outflow of economic benefits from the company and the
amount of such obligations can be reliably measured.
30.2 The company shall initially measure the provisions according to the best estimate of the expenses required to perform therelevant current obligations, and shall review the book value of the estimated liabilities on the balance sheet date.
31. Share-based payment
31.1 Categories of share-based payments
Share-based payments comprise equity-settled and cash-settled payments.
31.2 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 prices used in recentmarket transactions made by parties familiar with the situation and taking transactions voluntarily, and considering the current fair valuesand cash flows of other financial instruments that are substantially the same discount method and option pricing model.
31.3 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 in the number ofemployees entitled to equity instruments.
31.4 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 employee services are includedin related costs or expenses based on the fair value of the equity instruments on the grant date, and the capital reserve is adjustedaccordingly. Equity-settled share-based payments for services that have been completed during the waiting period or that are exercisableonly if the required performance conditions are met are exchanged for employee services. At each reporting date during the waitingperiod, the best estimate of the 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 adjusted accordingly.
For equity-settled share-based payments in exchange for services provided by other parties, if the fair value of services providedby other parties can be reliably measured, they should be measured at the fair value of the services of other parties on the acquisitiondate; if the fair values of services provided by other parties cannot be measured reliably, but for the equity instruments whose fair valuecan be reliably measured, they should be measured at the fair value of the equity instrument on the date of service acquisition andincluded in related costs or 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 included in the related costsor expenses at the fair value of the liability assumed by the company on the grant date, and the liability is increased accordingly. Cash-settled share-based payments for services that have been completed within the waiting period or that have met the required performance
conditions in exchange for employee services are based on the best estimate of the right to exercise at each balance sheet date during thewaiting period, According to the fair value of liabilities assumed by the company, the services obtained in the current period are includedin related 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 the increase in theacquisition of services in accordance with the increase in the fair value of the equity instruments; if the amendment increases the numberof equity instruments granted, the company will increase the value of the equity instruments. The fair value is correspondingly recognizedas an increase in access to services; if the company modifies the conditions of the exercisable rights in a manner that benefits employees,the company considers the modified conditions of the exercisable rights when processing the conditions of the exercisable rights.If the amendment reduces the fair value of the equity instrument granted, the company continues to recognize the amount of servicesobtained based on the fair value of the equity instrument on the grant date, without considering the decrease in the fair value of the equityinstrument; if the amendment reduces the equity granted For the number of instruments, the company will treat the reduction as thecancellation of the granted equity instruments; if the conditions of the exercisable rights are modified in a manner that is not conduciveto employees, the revised conditions 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 waiting period (exceptfor those that are cancelled because the conditions of the exercisable rights are not met), the cancellation or settlement is treated as anexpedited exercisable right and the original Amount recognized during the remaining waiting period
32. Income
32.1 Recognition of income
The company's income is mainly education and training income.
The company recognizes the income upon fulfillment of its performance obligations within the contract, that is, when the clientobtains control of the relevant goods.
32.2 The company classifies the nature of the relevant performance obligations in accordance with the relevant provisions of theincome standards to be "performance obligations performed within a specified period " or "performance obligations performed at aspecified time point ", and income recognition is carried out in accordance with the following principles.
（1）The performance obligations are to be performed within a specified period once the company meets one of the followingconditions:
① The client obtains and consumes the economic benefits while the company is fulfilling the performance obligations;
② The client can control assets under construction while the company is still in the process of fulfilling the performance obligations.
③ The asset generated while the company is in the process of performing the contract are indispensable, and the company has theright to collect partial payments for the cumulative performance obligations that have been fulfilled so far within the contract period.If the performance obligations are performed within the specified period , the company will recognize the income within this period
in accordance with the progress of the contract’s performance, however,except the performance progress cannot be reasonablydetermined. The company considers the nature of the goods and adopts the output method or input method to determine the appropriateperformance progress.
（2）If the performance obligations are performed at the specified time point , the company will recognize the income at the timewhen the client obtains control over the relevant goods.In judging whether the client has obtained control over goods or services, the company shall consider the following signs:
① The company has the current right to collect payment for the goods, that is, the customer has the current obligations to pay forthe goods.
② The company has transferred legal ownership of the goods to the customer, that is, the customer already has the legal ownershipof the goods.
③ The company has transferred physical possession of the goods to the customer, that is, the customer has taken physicalpossession of the goods .
④ The company has transferred the main risks and rewards of the ownership of the goods to the customer, that is, the customerhas obtained the main risks and rewards of the ownership of the goods.
⑤ The customer has accepted the goods.
⑥ Other signs that the customer has obtained control of the product.
The specific policy of the company's income recognition:
The company's income mainly includes ordinary class income and agreement class income. The income from face-to-face trainingof ordinary classes is recognized as income for all pre-collected training fees upon completion of training services; income from onlinetraining of ordinary classes is recognized on a straight-line basis during the effective period of service provision. The non-refundableportion of the income from the agreement class is recognized as revenue when the training service is completed; the refundable portionis recognized as revenue when the non-refundable conditions are met according to the agreement.
32.3 Measurement of income
The company shall measure revenue based on the transaction price allocated to each individual performance obligation. Whendetermining the transaction price, the company considers the influence of factors such as variable consideration, major financingcomponents in the contract, non-cash consideration, and consideration payable to customers.
（1）Variable consideration
The company determines the best estimate of the variable consideration based on the expected value or the most likely amount, butthe transaction price including the variable consideration should not exceed the amount of the accumulated recognized revenue that it isvery likely that a significant reversal not occur when the relevant uncertainty is eliminated. When an enterprise assesses whether it isvery likely that a significant reversal of accumulated recognized revenue will not occur, it should also consider the possibility of reversalof revenue and its proportion.
（2）Major financing components
When there is a significant financing component in the contract, the company shall determine the transaction price based on theamount payable in cash when the customer is assumed to obtain control of the goods. The difference between the transaction price andthe contract consideration shall be amortized using the effective interest method during the contract period.
（3）Non-cash consideration
If the customer pays a 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 cannot be reasonably estimated, the company determines thetransaction price indirectly by referring to the stand-alone selling price of the goods it promises to transfer to the customer.
（4）Consideration payable to customers
For the consideration payable to the customer, the consideration payable shall be offset by the transaction price, and the currentincome is offset at the later point when the relevant income is recognized and the customer's consideration is paid, except when thecustomer's consideration is payable to obtain other clearly distinguishable products from the customer.
If the enterprise pays the customer consideration to obtain other clearly distinguishable goods from the customer, it shall confirmthe purchased goods in a manner consistent with other purchases by the enterprise. If the consideration payable by the enterprise to thecustomer exceeds the fair value of the clearly distinguishable commodity obtained from the customer, the exceeding amount shall beoffset against the transaction price. If the fair value of the clearly distinguishable goods obtained from the customer cannot be reasonablyestimated, the enterprise shall offset the consideration payable to the customer in full from the transaction price.
33. Contract cost
Contract costs are divided into contract performance costs and contract acquisition costs.
If the cost incurred by the company to fulfill the contract meets the following conditions at the same time, it shall be recognized asan asset as the contract performance cost:
（1）The cost is directly related to a current or expected contract, including direct labor, direct materials, manufacturing expenses(or similar expenses), clearly the cost borne by the customer, and other costs incurred only due to the contract;
（2）This cost increases the company's future resources for fulfilling its performance obligations;
（3）The cost is expected to be recovered.
The incremental cost incurred by the company to obtain the contract is expected to be recovered, and recognized as an asset as thecontract acquisition cost; however, if the asset amortization does not exceed one year, it can be included in the current profit and losswhen it occurs.
Assets related to contract costs are amortized on the same basis as the recognition of the revenue of goods or services related to theasset.
If the book value of assets related to contract costs is higher than the difference between the following two items, the company will
make provision for impairment of the excess part and recognize it as an asset impairment loss:
（1）The remaining consideration expected to be obtained due to the transfer of goods or services related to the asset;
（2）Estimate the costs that will be incurred for the transfer of the related goods or services.If the aforementioned asset impairment provision is subsequently reversed, the book value of the asset after the reversal shall notexceed the book value of the asset on the date of reversal under the assumption that no impairment provision is made.
34. Government subsidy
34.1 Government grants include asset related government grants and income related government grants.
34.2 If a government grant is in the form of a transfer of a monetary asset, it is measured at the amount received or receivable. If agovernment grant is in the form of a non-monetary asset, it is measured at fair value. If the fair value cannot be reliably determined, it ismeasured at a nominal amount.
34.3 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 a reasonable andsystematic basis over the useful life of the related asset. If the relevant assets are sold, transferred, scrapped or damaged before the endof their useful lives, the undistributed balance of related deferred income will be transferred to the profit or loss of the asset disposal inthe current period.
（2）If a government grant related to income is used to compensate for the related expenses or losses in the subsequent period, itshall be recognized as deferred income and shall be recorded in the current profit or loss in which 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 different parts are separatelyaccounted for; if it is indistinguishable, the overall classification is revenue-related government subsidies.
34.4 Government grants related to the company's daily activities in accordance with the nature of the economic business are includedin other income or written down the related costs; Government grants that are unrelated to the daily activities of the company shall beincluded in non-operating income and expenditure.
35. Deferred income tax assets and the deferred income tax liabilities
35.1 According to the book value of the assets, liabilities and its tax base the difference between the (not confirmed project as assetsand liabilities of its tax base can be determined in accordance with the provisions of the tax law, the tax base and the difference betweenthe book number), according to the forecast of the asset is recovered or the applicable tax rate calculation during the debt confirmeddeferred income tax assets and deferred income tax liabilities.
35.2 Confirm the deferred income tax assets to probably get used to making the deductible temporary differences are limited to theamount of taxable income. During the balance sheet date, there is strong evidence that the future is likely to obtain sufficient taxable
income to offset the deductible temporary difference, confirm the unconfirmed deferred income tax assets in previous accounting periods.
35.3 On the balance sheet date, review the book value of the deferred income tax assets, and if during the period of the future maynot be able to obtain sufficient taxable income to offset the benefit of the deferred income tax assets, the write-downs on the book valueof the deferred income tax assets. If it is likely to obtain sufficient taxable income, return the amount of write-downs.
35.4 The Company's current income tax and deferred income tax as recorded into the profits and losses of the current income taxexpenses, or earnings, but the income tax in the followings are not included: (1) The business combination; (2) Transactions or eventsdirectly confirmed in the owner's equity.
36. Lease
36.1 Lessee
When the Company is the lessee, on the commencement date of the lease period, except for short-term leases and low-value assetleases that are selected for simplified treatment, the right-of-use assets and lease liabilities are recognized for leases.
After the commencement date of the lease period, the Company adopts the cost model for subsequent measurement of the right-of-use asset. With reference to the relevant depreciation provisions of "ASBE No. 4 - Fixed Assets", depreciation is provided for right-of-use assets. If the lessee can reasonably determine that it will obtain the ownership of the leased asset at the expiration of the lease term,it shall accrue depreciation over the remaining useful life of the leased asset. If it cannot be reasonably determined that the ownership ofthe leased asset can be obtained at the expiration of the lease term, depreciation shall be accrued in the shorter period between the leaseterm and the remaining useful life of the leased asset. The Company determines whether the right-of-use asset is impaired in accordancewith the "ASBE No. 8 - Impairment of Assets", and performs accounting treatment on the identified impairment losses.
The company calculates the interest expense of the lease liability during the lease term at a fixed interest rate and includes it in thecurrent profit and loss. According to the "ASBE No. 17 - Borrowing Expenses" and other standards that should be included in the costof relevant assets, such provisions shall apply.
36.2 Lessor
（1）Finance lease
As the lessor, on the commencement date of the lease term, the Company recognizes the finance lease receivables for the financelease, derecognizes the finance lease assets, and calculates and recognizes the interest income in each period of the lease term accordingto the fixed periodic interest rate.
（2）Operating lease
As the lessor, the Company shall, in each period of the lease term, adopt the straight-line method or other systematic and reasonablemethod to recognize the lease receipts from operating leases as rental income. Capitalize the initial direct expenses related to operatingleases, amortize them on the same basis as rental income recognition during the lease term, and include them in the current profit andloss by installments.
For the fixed assets in the operating lease assets, the company shall adopt the depreciation policy for similar assets to accrue
depreciation; for other operating lease assets, it shall use a systematic and reasonable method for amortization according to the enterpriseaccounting standards applicable to the assets. In accordance with the provisions of "ASBE No. 8 - Impairment of Assets", the companydetermines whether the operating lease assets are impaired and performs corresponding accounting treatment.
37. Major changes in accounting policies and accounting estimates
37.1. Changes in Accounting Policies
? Applicable □ Not applicable
(1) Since January 1, 2022, our company has adopted the relevant provisions of the "Interpretation of Accounting Standards forBusiness Enterprises No. 15" (FA [2021] No. 35) to adjust the amount of relevant items in the financial statements based on thecumulative impact. The changes in accounting policies have no impact on the company.
(2) Since January 1, 2022, our company has adopted the relevant provisions of the "Interpretation of Accounting Standards forBusiness Enterprises No. 16" (FA [2022] No. 31) to adjust the amount of relevant items in the financial statements based on thecumulative impact. The changes in accounting policies have no impact on the company.
37.2. Changes in Accounting Estimates
□ Applicable ? Not applicable
Section VI Taxation
1. Major categories of taxes and tax rates
| Category of tax | Basis of tax computation | Tax rate |
| Value-added tax | Taxable revenue for sales of goods and supply of services | 3%、5%、6% |
| City maintenance and construction tax | Circulation Taxes payable | 5%、7% |
| Corporate income tax | Taxable income | 15%、20%、25% |
| Education surcharge | Circulation Taxes payable | 3% |
| Local education surcharge | Circulation Taxes payable | 2% |
1.1 Value-added tax
According to the "Notice of the Ministry of Finance and the State Administration of Taxation on Comprehensively Launching thePilot Project of Changing Business Tax to Value-added Tax" (FT [2016] No. 36) and the "Ministry of Finance and State Administrationof Taxation on Clarifying the Reinsurance, Notice of the Real Estate Leasing and Non-Certificate Education Policy (FT [2016] No. 68)related provisions, the company's subsidiaries and affiliates' income from non-degree education services are subject to VAT at 3% and6% tax rates .
The company and its subsidiaries operate leased buildings and buildings in accordance with the relevant provisions of the“Statement of the State Administration of Taxation on Issuing the Interim Measures for the Administration of Value-added Tax Levy ofReal Estate Operating Leasing Services Provided by Taxpayers” (State Administration of Taxation Announcement 2016 No. 16) You canchoose to apply the simple tax calculation method and calculate the amount of VAT payable according to the 5% levy rate.
1.2 Corporate income tax
（1）The company's subsidiary, Offcn Limited Income Tax, is paid in advance by each branch at the place of registration, and thehead office is settled and paid.
（2）The company has different taxpayers with different corporate income tax rates, as detailed below：
| Name of the company | Tax rate |
| 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. Shaanxi Offcn Education Technology Co. Ltd. | 25% |
| 10. Chengdu Offcn Future Education Training School Co. Ltd. | 20% |
| 11. Lu’an Yazhong Real Estate Information Consulting Co., Ltd. | 25% |
| 12. Lu’an Zhongke Real Estate Information Consulting Co., Ltd. | 25% |
| 13. Sichuan Offcn Luming Cultural Media Co., Ltd.Sichuan Offcn Luming Cultural Media Co., Ltd. | 20% |
| 14. Zhejiang Offcn Education Technology Co., Ltd. | 25% |
| 15. Taizhou Offcn Future Enterprise Management Consulting Co., Ltd. | 20% |
| 16. Wenling Offcn Information Consulting Co., Ltd. | 20% |
| 17. Beijing Offcn Xinzhiyu Online Technology Co., Ltd. | 25% |
| 18. Hulun Buir Hailar Offcn Education Information Consulting Co., Ltd. | 20% |
| 19. Xilinhot Offcn Future Education Consulting Co., Ltd. | 20% |
| 20. Yueqing Lecheng Offcn Training Center Co., Ltd. | 20% |
| 21. Jiaozuo Offcn Future Education Service Co., Ltd. | 20% |
Name of the company
| Name of the company | Tax rate |
| 22. Xinzheng Offcn Cultural Communication Co., Ltd. | 20% |
| 23. Chongqing Jiangbei Offcn Vocational Examination Training Co., Ltd. | 25% |
| 24. Nanning Offcn Future Education Consulting Co., Ltd. | 25% |
| 25. Baiyin Offcn Future Education Consulting Co., Ltd. | 20% |
| 26. Beijing Xinde Zhiyuan Enterprise Management Consulting Co., Ltd. | 25% |
| 27. Nanjing Huiyue Hotel Management Co., Ltd. | 25% |
| 28. Shandong Kunzhong Yuhua Technology Co., Ltd.Shandong Kunzhong Real Estate Co., Ltd. | 25% |
| 29. Sanmenxia Offcn Cultural Communication Co., Ltd. | 20% |
| 30. Liaoning Offcn Academic & Cultural Exchange Co., Ltd. | 25% |
| 31. Liaoning Offcn Education Technology Co., Ltd. | 25% |
| 32. Shandong Offcn Education Technology Co., Ltd. | 20% |
| 33. Jilin Changyi Offcn Education Training School Co., Ltd. | 25% |
| 34. Yuxi Offcn Training School Co., Ltd. | 20% |
| 35. Tonghua Offcn Training School Co., Ltd. | 15% |
| 36. Hunan Lightsalt Offcn Education Technology Co., Ltd. | 20% |
| 37. Tianjin Hexi Offcn Training School Co., Ltd. | 25% |
| 38. Tianjin Jinnan Offcn Lexue Training School Co., Ltd. | 25% |
| 39. Tianjin Baodi Offcn Lexiang Training School Co., Ltd.Tianjin Baodi Offcn Lexiang Training School Co., Ltd. | 25% |
| 40. Tianjin Jizhou Offcn LechengTraining School Co., Ltd.Tianjin Jizhou Offcn Lecheng Training School Co., Ltd. | 25% |
| 41. Chengdu Offcn Education Training School Co., Ltd. | 25% |
| 42. Shandong Zhuoda Business Management Co., Ltd. | 25% |
| 43. Liaoning Zhongcheng Real Estate Development Co., Ltd. | 25% |
| 44. Wuhu Offcn Training School Co., Ltd. | 25% |
| 45. Wuhan Guoshang Human Resource Service Co., Ltd. | 25% |
| 46. Jinan Zhangqiu Offcn Training School Co., Ltd. | 25% |
| 47. Mengzi Offcn Education Training Co., Ltd. | 20% |
| 48. Beijing Offcn Technology Development Co., Ltd. | 20% |
| 49. Shanghai Offcn Education Technology Co., Ltd. | 25% |
Name of the company
| Name of the company | Tax rate |
| 50. Guangzhou Offcn Intelligence Education Technology Co., Ltd. | 20% |
| 51. Nantong Sigang Huizhi Technology Co., Ltd.Nantong Sigang Huizhi Technology Co., Ltd. | 25% |
| 52. Pingshan Offcn Education Technology Co., Ltd. | 25% |
| 53. Shandong Offcn Education Training School Co., Ltd. | 25% |
| 54. Lanzhou Offcn Education Training School Co., Ltd. | 20% |
| 55. Anshan Tiedong Offcn Education Training School Co., Ltd. | 20% |
| 56. Diqing Offcn Training School Co., Ltd. | 20% |
| 57. Dali Offcn Education Training School Co., Ltd. 58. Harbin Nangang Offcn Education Training School Co., Ltd. 59. Nujiang Offcn Training School Co., Ltd. 60. Weixi Offcn Education Training School Co., Ltd. 61. Beijing Offcn Century Education Technology Co., Ltd. 62. Beijing Offcn Shengjing Education Technology Co., Ltd. 63. Henan Offcn Education Consulting Co., Ltd. 64. Lhasa Offcn Training School Co., Ltd. 65. Tianjin Offcn Technology Co., Ltd. | 20% 20% 20% 20% 25% 20% 25% 20% 25% |
2. Policies and basis of the important tax incentives
2.1 Value-added tax
（1）According to the "Announcement of the Ministry of Finance and the State Administration of Taxation on Clarifying the VATExemption Policy for Small-scale VAT Taxpayers" (FT [2021] No. 11), in order to further support the development of small and microenterprises, from 1 April 2021 to 31 December 2022, small-scale value-added taxpayers with monthly sales of less than RMB 150,000(including the principal) are exempt from value-added tax. The company's subsidiaries and subsidiaries that meet the exemptionconditions are exempt from VAT.
（2）According to the Notice of the Ministry of Finance and the State Administration of Taxation on the Relevant Policies onDeduction of Value Added Tax for Special Equipment and Technical Maintenance Costs of Value Added Tax Control System (FT [2012]No. 15), the VAT taxpayers in 2011 for the first purchase of special equipment for the VAT tax control system (including separate ticketmachines) after December 1 (including the same below), the VAT invoice obtained from the purchase of special equipment for the VATtax control system can be used for the full amount of the VAT payable is deducted (the deduction is the total amount of price and tax),and the deduction that is insufficient can be carried forward to the next period to continue the deduction. The VAT taxpayer's technicalmaintenance fee paid after 1 December 2011 (excluding the technical maintenance fee paid before 30 November 2011) can be added tothe value of the technical maintenance fee invoice issued by the technical maintenance service unit. The full amount of the tax payable
is deductible, and those that are insufficient for deduction can be carried forward to the next period to continue the deduction. Thecompany and the qualified subsidiaries and subsidiaries should deduct the VAT payable amount in full according to the regulations.
（3）According to the "Notice of the Ministry of Finance and the State Administration of Taxation on the Relevant Policies onDeduction of Value Added Tax for Special Equipment and Technical Maintenance Costs of Value Added Tax Control System" (FT [2012]No. 15), the VAT taxpayers in 2011 for the first purchase of special equipment for the VAT tax control system (including separate ticketmachines) after December 1 (including the same below), the VAT invoice obtained from the purchase of special equipment for the VATtax control system can be used for the full amount of the VAT payable is deducted (the deduction is the total amount of price and tax),and the deduction that is insufficient can be carried forward to the next period to continue the deduction. The VAT taxpayer's technicalmaintenance fee paid after December 1, 2011 (excluding the technical maintenance fee paid before November 30, 2011) can be addedto the value of the technical maintenance fee invoice issued by the technical maintenance service unit. The full amount of the tax payableis deductible, and those that are insufficient for deduction can be carried forward to the next period to continue the deduction. TheCompany and the qualified subsidiaries and subsidiaries should deduct the VAT payable amount in full according to the regulations.
（4）In accordance with the "Announcement of the Ministry of Finance, the State Administration of Taxation and the GeneralAdministration of Customs on Relevant Policies for Deepening the Reform of Value-added Tax "(FT [2019] No. 39) and the"Announcement of the Ministry of Finance, the State Administration of Taxation on Relevant Value-added Tax Policies for Promotingthe Relief and Development of Difficult Industries in the Service Sector" (FT [2022] No. 11), from April 1, 2019 to December 31, 2022,taxpayers in the production and living service industries are allowed to deduct 10% of the input tax in accordance with the current period.The Company’s qualified subordinate branches and subsidiaries will additionally deduct the value-added tax payable according to thispreferential policy.
2.2Corporate income tax
(1) On October 21, 2020, Offcn Co., Ltd. passed the high-tech enterprise certification organized by the Beijing State TaxationBureau, Beijing Local Taxation Bureau, Beijing Finance Bureau, and Beijing Science and Technology Commission, and obtained thehigh-tech enterprise certificate numbered GR202011002730. The certificate is valid from October 21, 2020 to October 20, 2023. OffcnCo., Ltd. and its subordinate branch calculate and pay corporate income tax at a tax rate of 15%.
(2) On September 28, 2021, Tonghua Offcn Training School Co., Ltd., a subsidiary of the Company, was recognized by the JilinProvincial Taxation Bureau of the State Administration of Taxation, the Jilin Provincial Department of Finance, and the Jilin ProvincialDepartment of Science and Technology, and obtained the high-tech enterprise certificate No. GR202122000472. The certificate is validfrom September 28, 2021 to September 27, 2024. Tonghua Offcn Training School Co., Ltd. calculates and pays corporate income tax ata rate of 15%.
(3) According to the "Announcement of Ministry of Science and Technology of the State Administration of Taxation onStrengthening of Pre-tax Deduction for Scientific and Technological Innovation", (Announcement No. 28, 2022 of Ministry of Scienceand Technology, the State Administration of Taxation, Ministry of Finance), from October 1, 2022 to December 31, 2022, the enterpriseswhich apply current pre-tax deduction of R & D expenses at a rate of 75%, their pre-tax deduction will be increased to the rate of 100%.This tax incentive applies to qualified subsidiaries of the Company.
(4) According to the "Announcement of the State Administration of Taxation on Matters Concerning the Implementation of Income
Tax Preferential Policies Supporting the Development of Small and Low-profit Enterprises and Individual Industrial and CommercialHouseholds" (State Administration of Taxation Announcement [2021] No. 8 ), from January 1, 2021 to December 31, 2022, the annualtaxable income of small and low-profit enterprises does not exceed 1 million yuan, which will be included in the taxable income at areduced rate of 12.5%, and the enterprise’s income tax will be paid at the tax rate of 20%. Qualified subsidiaries of the Company applythis policy to calculate and pay corporate income tax.
2.3 Other tax incentives
Education surcharge, local education surcharge
(1) According to the "Notice of the Ministry of Finance and the State Administration of Taxation on Expanding the ExemptionScope of Government Funds" (FT [2016] No. 12), starting from February 1, 2016, the exemption scope of education surcharge, localeducation surcharge and water conservancy construction fund should be expanded from the current obligors who pay monthly taxes ormonthly sales or turnover of not more than RMB 30,000 (quarterly taxation of quarterly sales or turnover of not more than RMB 90,000)to the obligors who pay the monthly sales or turnover of not more than RMB 100,000 (the quarterly sales or turnover of the quarterlytax does not more than RMB 300,000). Subsidiaries and subsidiaries of the Company that meet the conditions for exemption areexempted from education surcharge and local education surcharge.
(2) According to the "Announcement of the State Administration of Taxation of the Ministry of Finance on Further Implementationof “Six Taxes Two Fees” Exemption Policy for SME" (FT [2022] No. 10), from January 1, 2022 to December 31, 2024, based on theactual situation and the needs of macro adjustment and control, the provincial government, autonomous district government, municipalitygovernment can reduce resource tax, city maintenance and construction tax, property tax, town land-use tax, stamp tax (securitiestransaction stamp tax not included), cultivated land use tax, education surcharge and local education surcharge within the rate of 50%from VAT small-scale taxpayers, small enterprises with little profit and individual business. Qualified subsidiaries of the Company applythis policy to calculate and pay the related taxes.
Section VII. Consolidated Financial Statement Project Notes
“The opening balance” refers to the balance on 1 January 2022 and “the closing balance” refers to the balance on 31 December2022. “The prior period” is the year of 2021 and “The current period” is the year of 2022.
1. Monetary funds
Unit: RMB
| Item | Closing balance | Opening balance |
| Cash | 35,788.65 | 62,362.45 |
| Bank balances | 379,418,940.77 | 1,756,140,584.62 |
| Other currency funds | 5,873,826.32 | 214,158,325.57 |
Item
| Item | Closing balance | Opening balance |
| Total | 385,328,555.74 | 1,970,361,272.64 |
Note: 1. Other currency funds mainly include the balance of third-party payment platforms such as POS, Tenpay and Alipay and soon
2. At the end of the period, there are mortgages, pledges, freezing, and other restricted funds. For details, please refer toNote VII (51) “Assets with restricted ownership or use rights”.
3. There were no funds deposited overseas at the end of the period.
2. Transactional financial assets
| Item | Closing balance | Opening balance |
| Financial assets classified as at fair value through profit or loss | 346,726,621.74 | |
| Including: Debt instrument investment | 346,726,621.74 | |
| Total | 346,726,621.74 |
3. Accounts receivable
3.1 Disclosure by aging
| Aging | Closing balance | Opening balance |
| Within 1 year (inclusive) | 3,245,781.30 | 23,537,021.54 |
| 1-2 years (inclusive) | 20,260,718.50 | 20,016,302.00 |
| 2-3 years (inclusive) | 20,006,930.00 | |
| Less: Provision for bad debts | 6,189,746.92 | 3,178,481.27 |
| Total | 37,323,682.88 | 40,374,842.27 |
3.2 Classified disclosure by bad debt accrual method
| Item | Closing balance | ||||
| Book balance | Bad debt provision | Book value | |||
| Amount | Proportion (%) | Amount | Proportion (%) | ||
| Accounts receivables for which bad | 43,513,429.80 | 100.00 | 6,189,746.92 | 14.22 | 37,323,682.88 |
Item
| Item | Closing balance | ||||
| Book balance | Bad debt provision | Book value | |||
| Amount | Proportion (%) | Amount | Proportion (%) | ||
| debt provision has been assessed by credit risk portfoliosTotal | |||||
| Inc:Combination2 | 3,491,219.36 | 8.02 | 187,596.90 | 5.37 | 3,303,622.46 |
| Combination3 | 40,022,210.44 | 91.98 | 6,002,150.02 | 15.00 | 34,020,060.42 |
| Total | 43,513,429.80 | 100.00 | 6,189,746.92 | -- | 37,323,682.88 |
Continued:
| Item | Opening balance | ||||
| Book balance | Bad debt provision | Book value | |||
| Amount | Proportion (%) | Amount | Proportion (%) | ||
| Accounts receivables for which bad debt provision has been assessed by credit risk portfoliosTotal | 43,553,323.54 | 100.00 | 3,178,481.27 | 7.30 | 40,374,842.27 |
| Inc:Combination2 | 3,530,335.54 | 8.11 | 176,985.38 | 5.01 | 3,353,350.16 |
| Combination3 | 40,022,988.00 | 91.89 | 3,001,495.89 | 7.50 | 37,021,492.11 |
| Total | 43,553,323.54 | 100.00 | 3,178,481.27 | -- | 40,374,842.27 |
Accounts receivables for which bad debt provision has been assessed by credit risk portfolios total：
| Item | Closing balance | ||
| Accounts Receivable | Bad debt provision | Proportion (%) | |
| Inc:Combination2 | 3,491,219.36 | 187,596.90 | 5.37 |
| Inc:Combination3 | 40,022,210.44 | 6,002,150.02 | 15.00 |
| Total | 43,513,429.80 | 6,189,746.92 | -- |
3.3 Bad debt provision
Item
| Item | Opening balance | Changes in the period | Closing balance | |||
| Provision | recovery or reversal | Write-off | Other changes | |||
| Provision for bad debts of accounts receivable | 3,178,481.27 | 3,011,265.65 | 6,189,746.92 | |||
| Total | 3,178,481.27 | 3,011,265.65 | 6,189,746.92 | |||
3.4 Top 5 accounts receivable at the end of the period
| Creditor | Nature of payment | Closing balance | Bad debt provision | Aging | Percentage of total accounts receivable(（%)） |
| Yaxia Industrial Co., Ltd. | Lease payments | 40,000,000.00 | 6,000,000.00 | 1-3 years | 91.93 |
| Customer 1 | Hotel service | 1,737,741.50 | 99,887.90 | Within 2 year | 3.99 |
| Customer 2 | Hotel service | 555,536.40 | 27,776.82 | Within 1 year | 1.28 |
| Customer 3 | Hotel service | 297,077.00 | 14,853.85 | Within 1 year | 0.68 |
| Customer 4 | Hotel service | 294,057.00 | 14,702.85 | Within 1 year | 0.68 |
| Total | 42,884,411.90 | 6,157,221.42 | 98.56 |
4. Prepayments
4.1 Disclosure by aging
| Aging | Closing balance | Opening balance | ||
| Amount | Proportion | Amount | Proportion | |
| Within 1 year (inclusive) | 556,093.00 | 100.00 | 1,438,350.00 | 100.00 |
| Total | 556,093.00 | 100.00 | 1,438,350.00 | 100.00 |
4.2 Top five entities with the largest balances of prepayments
| Creditor | Nature of payment | Closing balance | Aging | Percentage of total advances（%） | Bad debt provision |
| Nanjing Eurasian Air Passenger Transport Agent Co., Ltd | Ticket | 286,409.00 | Within 1 year | 51.50 | |
| Nanjing Tuniu International Travel Service Co., L | Ticket | 269,684.00 | Within 1 year | 48.50 |
Creditor
| Creditor | Nature of payment | Closing balance | Aging | Percentage of total advances（%） | Bad debt provision |
| Total | 556,093.00 | 100.00 |
5. Other receivables
5.1 Classified listing
| Item | Closing balance | Opening balance |
| Other receivables | 193,617,379.76 | 219,501,061.83 |
| Total | 193,617,379.76 | 219,501,061.83 |
5.2 Other receivables
5.2.1 Disclosure by aging
| Aging | Closing balance | Opening balance |
| Within 1 year (inclusive) | 11,391,834.06 | 185,478,538.64 |
| 1-2 years (inclusive) | 157,921,868.93 | 8,746,012.76 |
| 2-3 years (inclusive) | 8,193,926.78 | 11,575,869.13 |
| 3-4 years (inclusive) | 11,235,499.80 | 5,104,417.72 |
| 4-5 years (inclusive) | 4,873,679.72 | 1,769,524.36 |
| Over 5 years | 13,596,150.34 | 13,686,855.19 |
| Less: Provision for bad debts | 13,595,579.87 | 6,860,155.97 |
| Total | 193,617,379.76 | 219,501,061.83 |
5.2.2 Other receivables by nature of the payment
| Item | Closing balance | Opening balance |
| Deposits and guarantees | 191,758,631.44 | 217,158,729.61 |
| Reserve | 292,215.00 | 265,275.00 |
| Disbursement fee and other | 1,566,533.32 | 2,077,057.22 |
| Total | 193,617,379.76 | 219,501,061.83 |
5.2.3 Withdrawing process of bad debt provision
Bad debt provision
| Bad debt provision | The first stage | second stage | The third stage | Total |
| Expected credit losses in the next 12 months | Expected credit loss for the entire duration (no credit impairment loss) | Expected credit losses for the entire duration (credit impairment loss has occurred) | ||
| Balance as of 1 January 2022 | 6,860,155.97 | 6,860,155.97 | ||
| Balance of other receivables on 1 January 2022 during the current period | ||||
| ——transferred to stage 2 | ||||
| ——transferred to stage 3 | ||||
| ——transferred back stage 2 | ||||
| ——transferred back to stage 1 | ||||
| Provision during the current period | 6,735,423.90 | 6,735,423.90 | ||
| Reversal during the current period | ||||
| Resale during the current peiriod | ||||
| Write-off during the current period | ||||
| Other changes | ||||
| Balance as of 31 December 2022 | 13,595,579.87 | 13,595,579.87 |
5.2.4 Situation of bad debt provision
| Item | Opening balance | Changes in the period | Closing balance | |||
| Provision | recovery or reversal | Write-off | Other changes | |||
| Provision for bad debts of other receivables | 6,860,155.97 | 6,735,423.90 | 13,595,579.87 | |||
| Total | 6,860,155.97 | 6,735,423.90 | 13,595,579.87 | |||
5.2.5 Top 5 other receivable at the end of the period
Creditor
| Creditor | Nature of payment | Closing balance | Aging | Percentage of total other receivables (%) | Closing balance of bad debt provision |
| Beijing Construction Engineering Real Estate Co., LTD | Deposits and guarantees | 124,498,000.00 | 1-2 year | 60.08 | 12,449,800.00 |
| Beijing Huaxia Shunxin Property Management Co., Ltd | Deposits and guarantees | 25,000,000.00 | 1-2 year | 12.06 | |
| Beijing Hanhua Century Technology Co., Ltd | Deposits and guarantees | 5,908,912.31 | Within 2 year | 2.85 | |
| Shenyang Lijing Mingzhu Hotel Management Co., Ltd | Deposits and guarantees | 5,675,200.00 | Over 5 years | 2.74 | |
| Chengdu Zhongman Weiye Cultural Industry Development Co., Ltd | Deposits and guarantees | 3,660,000.00 | 3-4 years | 1.77 | |
| Total | 164,742,112.31 | 79.50 | 12,449,800.00 |
6. Other current assets
| Item | Closing balance | Opening balance |
| Prepaid expenses | 4,318,475.88 | 10,255,632.25 |
| Input tax to be deducted | 239,685.75 | |
| Pending payment | 1,661.55 | 12,833,701.81 |
| Advance tax | 13,869,795.74 | |
| Total | 4,559,823.18 | 36,959,129.80 |
7. Debt investment
| Item | Closing balance | Opening balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Time deposit | 7,058,993.55 | 7,058,993.55 | ||||
| Total | 7,058,993.55 | 7,058,993.55 | ||||
8.Long-term equity investment
| The invested entity | Opening balance | Changes for the year | Closing balance | Closing balance of provision for impairment | |||||||
| Increase | Decrease | Investment profit under equity method | Other comprehensive income adjustment | Other equity change | Cash dividends or profits announced of issuance | Provision for impairment | Others | ||||
| I.Cooperatives | |||||||||||
| Offcn Xietong (Jiaxing) Human Resources Co., Ltd. | 2,266.22 | 2,266.22 | |||||||||
| Subtotal | 2,266.22 | 2,266.22 | |||||||||
| II.Associates | |||||||||||
| Beijing Offcn Future Education Technology Co., Ltd. | 46,850,364.40 | -16,677.99 | 46,833,686.41 | ||||||||
| Subtotal | 46,850,364.40 | -16,677.99 | 46,833,686.41 | ||||||||
| Total | 46,850,364.40 | -14,411.77 | 46,835,952.63 | ||||||||
9. Other equity investment
9.1 Other equity investment
| Item | Closing balance | Opening balance |
| Shanghai Zuihuibao Network Technology Co., Ltd. | 99,600,000.00 | 103,600,000.00 |
| Anhui Ningguo Rural Commercial Bank Co., Ltd. | 21,700,000.00 | 26,800,000.00 |
| Total | 121,300,000.00 | 130,400,000.00 |
9.2 Investment in non-trading equity instruments
| Item | Recognized dividend income | Cumulative gain | Accumulated loss | Amount of other comprehensive income transferred to retained earnings | Reasons for the designation as being measured at fair value and the change included in other comprehensive income | Reasons for transferring other comprehensive income to retained earnings | |||
| Shanghai Zuihuibao Network Technology Co., Ltd. | 13,600,000.00 | Plan for long-term holding | |||||||
| Anhui Ningguo Rural Commercial Bank Co., Ltd. | 1,659,840.00 | -5,100,000.00 | Plan for long-term holding | ||||||
| Total | 1,659,840.00 | 8,500,000.00 | |||||||
10. Other non-current financial assets
| Item | Closing balance | Opening balance |
| Beijing Jinwu Venture Capital Center (Limited Partnership) | 27,680,000.00 | 30,260,000.00 |
| Total | 27,680,000.00 | 30,260,000.00 |
11. Investment property
11.1 Investment real estate measurement model
Investment real estate with cost measurement model :
Item
| Item | Houses and buildings | Land use rights | Total |
| 1.Original carrying amount | |||
| 1.1 Opening balance | 377,111,222.22 | 470,624,021.74 | 847,735,243.96 |
| 1.2 Increase in the current period | |||
| 1.3 Decrease in the current period | 376,581,430.71 | 470,624,021.74 | 847,205,452.45 |
| 1.3.1 Transferred to fixed assets | 376,581,430.71 | 376,581,430.71 | |
| 1.3.2 Transferred into intangible assets | 470,624,021.74 | 470,624,021.74 | |
| 1.4 Closing balance | 529,791.51 | 529,791.51 | |
| 2. Accumulated depreciation and amortization | |||
| 2.1 Opening balance | 59,891,662.72 | 82,709,435.86 | 142,601,098.58 |
| 2.2 Increase in the current period | 68,086.80 | 68,086.80 | |
| 2.2.1 Accrual or amortization | 68,086.80 | 68,086.80 | |
| 2.3 Decrease in the current period | 59,880,218.55 | 82,709,435.86 | 142,589,654.41 |
| 2.3.1 Transferred to fixed assets | 59,880,218.55 | 59,880,218.55 | |
| 2.3.2 Transferred into intangible assets | 82,709,435.86 | 82,709,435.86 | |
| 2.4 Closing balance | 79,530.97 | 79,530.97 | |
| 3. Provision for impairment | |||
| 3.1 Opening balance | 6,556,268.55 | 53,641,335.37 | 60,197,603.92 |
| 3.2 Increase in the current period | |||
| 3.3 Decrease in the current period | 6,556,268.55 | 53,641,335.37 | 60,197,603.92 |
| 3.3.1 Transferred to fixed assets | 6,556,268.55 | 6,556,268.55 | |
| 3.3.2 Transferred into intangible assets | 53,641,335.37 | 53,641,335.37 | |
| 3.4 Closing balance | |||
| 4.Book value | |||
| 4.1 Closing balance | 450,260.54 | 450,260.54 | |
| 4.2 Opening balance | 310,663,290.95 | 334,273,250.51 | 644,936,541.46 |
11.2 The situation of investment real estate that has not completed the property right certificate
| Item | Closing balance | Reasons for not completing the property right certificate |
| Houses and buildings | 450,260.54 | In progress |
12. Fixed assets
12.1 Presentation
| Item | Closing balance | Opening balance |
| Fixed assets | 1,970,536,339.75 | 1,770,372,338.85 |
| Total | 1,970,536,339.75 | 1,770,372,338.85 |
12.2 Fixed assets
12.2.1 Fixed assets situation
| Item | Houses and buildings | Decoration of fixed assets | Transportation equipment | Electronic equipment | Office equipment | Total |
| I.Original carrying amount | ||||||
| 1.1 Opening balance | 1,798,288,071.53 | 64,708,424.02 | 79,966,146.51 | 235,284,975.20 | 12,081,043.61 | 2,190,328,660.87 |
| 1.2 Increase in the current period | 376,581,430.71 | 1,339.81 | 50,580.00 | 181,847.29 | 376,815,197.81 | |
| 1.2.1 Purchase | 1,339.81 | 50,580.00 | 181,847.29 | 233,767.10 | ||
| 1.2.2 Investment real estate reversal | 376,581,430.71 | 376,581,430.71 | ||||
| 1.3 Decrease in the current period | 29,425.00 | 6,225.00 | 35,650.00 | |||
| 1.3.1 Disposal or scrap | 29,425.00 | 6,225.00 | 35,650.00 | |||
| 1.4 Closing balance | 2,174,869,502.24 | 64,708,424.02 | 79,967,486.32 | 235,306,130.20 | 12,256,665.90 | 2,567,108,208.68 |
| II.Accumulated depreciation | ||||||
| 2.1 Opening balance | 148,830,688.16 | 33,613,748.22 | 71,001,620.93 | 155,398,465.35 | 11,032,815.02 | 419,877,337.68 |
| 2.2 Increase in the current period | 124,702,581.77 | 9,836,387.16 | 2,090,521.87 | 33,246,751.35 | 216,903.71 | 170,093,145.86 |
| 2.2.1 Provision | 64,822,363.22 | 9,836,387.16 | 2,090,521.87 | 33,246,751.35 | 216,903.71 | 110,212,927.31 |
| 2.2.2 Investment real estate reversal | 59,880,218.55 | 59,880,218.55 | ||||
| 2.3 Decrease in the current period | 27,953.75 | 5,913.75 | 33,867.50 | |||
| 2.3.1 Disposal or scrap | 27,953.75 | 5,913.75 | 33,867.50 |
Item
| Item | Houses and buildings | Decoration of fixed assets | Transportation equipment | Electronic equipment | Office equipment | Total |
| 2.4 Closing balance | 273,533,269.93 | 43,450,135.38 | 73,092,142.80 | 188,617,262.95 | 11,243,804.98 | 589,936,616.04 |
| III. Provision for impairment | ||||||
| 3.1 Opening balance | 4,309.80 | 74,674.54 | 78,984.34 | |||
| 3.2 Increase in the current period | 6,556,268.55 | 6,556,268.55 | ||||
| 3.2.1 Provision | ||||||
| 3.2.2 Investment real estate reversal | 6,556,268.55 | 6,556,268.55 | ||||
| 3.3 Decrease in the current period | ||||||
| 3.3.1 Disposal or scrap | ||||||
| 3.4 Closing balance | 6,556,268.55 | 4,309.80 | 74,674.54 | 6,635,252.89 | ||
| IV. Book value | ||||||
| 4.1 Closing balance | 1,894,779,963.76 | 21,258,288.64 | 6,875,343.52 | 46,684,557.45 | 938,186.38 | 1,970,536,339.75 |
| 4.2 Opening balance | 1,649,457,383.37 | 31,094,675.80 | 8,964,525.58 | 79,882,200.05 | 973,554.05 | 1,770,372,338.85 |
12.2.2 The situation of fixed assets that have not completed the title certificate
| Item | Carrying amount | Reasons for not completing the property right certificate |
| Houses and buildings | 615,816,222.31 | In progress |
13. Construction in progress
13.1 Master list
| Item | Closing balance | Opening balance |
| Construction in progress | 323,273,645.99 | 294,785,678.31 |
| Total | 323,273,645.99 | 294,785,678.31 |
13.2 Construction in progress
13.2.1 Construction in progress
Item
| Item | Closing balance | Opening balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Fushun Offcn Building | 160,953,189.34 | 160,953,189.34 | 157,099,898.91 | 157,099,898.91 | ||
| Rizhao Learning City | 88,360,023.13 | 88,360,023.13 | 63,725,345.88 | 63,725,345.88 | ||
| Bozhou Yaxia 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 | ||
| Huangshan Fudi Stores | 1,391,329.95 | 1,391,329.95 | 1,391,329.95 | 1,391,329.95 | ||
| Total | 323,273,645.99 | 323,273,645.99 | 294,785,678.31 | 294,785,678.31 | ||
13.2.2 Changes in important construction projects in the current period
Continued：
| Amount injected as a proportion of budget amount (%) | Construction progress (%) | Amount of accumulated capitalized interest | Including: capitalized interest for the period | Interest capitalization rate for the period (%) | Source of funds |
| 48.77 | 48.77 | self-funds | |||
| 8.84 | 8.84 | self-funds | |||
| -- | -- |
14. Right-of-use assets
| Item | Houses and buildings | Total |
| 1.Original carrying amount |
Item
| Item | Budget amount | Opening balance | Increase in the current period | Transfer to fixed assets | Other decreases | Closing balance |
| Fushun Offcn Building | 330,000,000.00 | 157,099,898.91 | 3,853,290.43 | 160,953,189.34 | ||
| Rizhao Learning City | 1,000,000,000.00 | 63,725,345.88 | 24,634,677.25 | 88,360,023.13 | ||
| Total | 1,330,000,000.00 | 220,825,244.79 | 28,487,967.68 | 249,313,212.47 |
Item
| Item | Houses and buildings | Total |
| 1.1 Opening balance | 1,786,074,513.91 | 1,786,074,513.91 |
| 1.2 Increase in the current period | 335,810,444.38 | 335,810,444.38 |
| 1.2.1 Add a lease contract | 335,810,444.38 | 335,810,444.38 |
| 1.3 Decrease in the current period | 315,472,123.28 | 315,472,123.28 |
| 1.3.1 Lease expiry | 188,529,870.35 | 188,529,870.35 |
| 1.3.2 Expires early | 126,942,252.93 | 126,942,252.93 |
| 1.4 Closing balance | 1,806,412,835.01 | 1,806,412,835.01 |
| 2. Accumulated amortization | ||
| 1.Opening balance | 443,794,126.83 | 443,794,126.83 |
| 2.2 Increase in the current period | 494,927,273.69 | 494,927,273.69 |
| 2.2.1 Provision | 494,927,273.69 | 494,927,273.69 |
| 2.3 Decrease in the current period | 244,511,013.09 | 244,511,013.09 |
| 2.3.1 Lease expiry | 188,529,870.35 | 188,529,870.35 |
| 2.3.2 Expires early | 55,981,142.74 | 55,981,142.74 |
| 2.4 Closing balance | 694,210,387.43 | 694,210,387.43 |
| 3. Impairment provision | ||
| 3.1 Opening balance | ||
| 3.2 Increase in the current period | ||
| 3.3 Decrease in the current period | ||
| 3.4 Closing balance | ||
| 4. Book value | ||
| 4.1 Closing balance | 1,112,202,447.58 | 1,112,202,447.58 |
| 4.2 Opening balance | 1,342,280,387.08 | 1,342,280,387.08 |
15.Intangible assets
15.1 Intangible assets
| Item | Land use rights | Software use rights | Trademark rights | Total |
| 1.Original carrying amount | ||||
| 1.1 Opening balance | 910,052,741.43 | 7,774,286.02 | 7,140,521.53 | 924,967,548.98 |
| 1.2 Increase in the current period | 470,624,021.74 | 470,624,021.74 |
Item
| Item | Land use rights | Software use rights | Trademark rights | Total |
| 1.2.1 Investment real estate reversal | 470,624,021.74 | 470,624,021.74 | ||
| 1.3 Decrease in the current period | ||||
| 1.4 Closing balance | 1,380,676,763.17 | 7,774,286.02 | 7,140,521.53 | 1,395,591,570.72 |
| 2. Accumulated amortization | ||||
| 2.1 Opening balance | 50,645,032.49 | 4,516,942.00 | 3,174,913.64 | 58,336,888.13 |
| 2.2 Increase in the current period | 119,925,884.48 | 693,657.36 | 724,035.04 | 121,343,576.88 |
| 2.2.1 Provision | 37,216,448.62 | 693,657.36 | 724,035.04 | 38,634,141.02 |
| 2.2.2 Investment real estate reversal | 82,709,435.86 | 82,709,435.86 | ||
| 2.3 Decrease in the current period | ||||
| 2.4 Closing balance | 170,570,916.97 | 5,210,599.36 | 3,898,948.68 | 179,680,465.01 |
| 3. Impairment provision | ||||
| 3.1 Opening balance | 3,111.00 | 3,111.00 | ||
| 3.2 Increase in the current period | 53,641,335.37 | 53,641,335.37 | ||
| 3.2.1 Investment real estate reversal | 53,641,335.37 | 53,641,335.37 | ||
| 3.3 Decrease in the current period | ||||
| 3.4 Closing balance | 53,641,335.37 | 3,111.00 | 53,644,446.37 | |
| 4. Book value | ||||
| 4.1 Closing balance | 1,156,464,510.83 | 2,560,575.66 | 3,241,572.85 | 1,162,266,659.34 |
| 4.2 Opening balance | 859,407,708.94 | 3,254,233.02 | 3,965,607.89 | 866,627,549.85 |
15.2 Land use right without property certification held
| Item | Closing balance | Reasons for not completing the property right certificate |
| Land use rights | 226,294,737.56 | In progress |
16. Goodwill
16.1 Original book value of goodwill
| Name of the investee and item resulting in goodwill | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
Formed bybusinesscombination
| Formed by business combination | others | Dispose | others | |||
| Shandong Kunzhong Yuhua Technology 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 |
16.2 Goodwill impairment provision
None.
16.3 Relevant information of asset group or combination of asset group where goodwill is locatedThe company acquired Shandong Kunzhong Yuhua Technology Co., Ltd. in 2016, resulting in a goodwill of RMB 39,378,573.51 .The goodwill was divided into related asset groups, which consist of long-term assets, goodwill, and deferred income tax liabilities. Therecoverable amount of the asset group is determined based on the net amount of fair value minus disposal expenses.The company's acquisition of Nanjing Huiyue Hotel Management Co., Ltd. in 2018 generated goodwill of RMB 60,489,146.87.The goodwill was divided into related asset groups, which consist of long-term assets, goodwill, and deferred income tax liabilities. Therecoverable amount of the asset group is determined based on the net amount of fair value minus disposal expenses.
16.4.Goodwill impairment testing process, key parameters and confirmation method of goodwill impairment lossThe method of provision for impairment is detailed in Note V (25) Long-term asset impairment.The recoverable amount of the company's asset group including goodwill is estimated by using the net amount of the fair value ofthe asset group in which the goodwill is located less the disposal costs. As the main assets have a fair value that can be referred to in themarket, the market comparison method is used to estimate the fair value of the base date of the assets to be estimated, taking into accountdifferences in time, transaction, regional and individual factors. For other assets, combined with the actual situation of assets, the costmethod is adopted to determine the fair value of the assets to be appraised on the base date .The company entrusted an asset assessmentcompany to conduct an impairment test on goodwill. After testing, no goodwill was found to be impaired, and no provision forimpairment was made.
17. Long-term prepaid expenses
| Item | Opening balance | Increase in the period | Amortization for the period | Other reductions | Closing balance |
| Decoration expenditure | 369,131,058.86 | 3,085,277.79 | 96,032,184.33 | 276,184,152.32 |
Item
| Item | Opening balance | Increase in the period | Amortization for the period | Other reductions | Closing balance |
| Other | 11,059,947.52 | 994,500.78 | 3,104,281.99 | 8,950,166.31 | |
| Total | 380,191,006.38 | 4,079,778.57 | 99,136,466.32 | 285,134,318.63 |
18. Deferred income tax assets and Deferred income tax liabilities
18.1 Unoffset deferred income tax assets
| Item | Closing balance | Opening balance | ||
| Deductible temporary differences | Deferred tax assets | Deductible temporary differences | Deferred tax assets | |
| Provision for impairment losses of assets | 13,820,010.31 | 2,202,090.78 | 7,097,408.69 | 1,143,919.39 |
| Deductible losses | 3,995,702,357.27 | 599,355,353.59 | 2,816,982,346.58 | 422,547,351.99 |
| Changes in fair value of held-for-trading financial assets | 4,820,000.00 | 723,000.00 | 2,240,000.00 | 336,000.00 |
| Total | 4,014,342,367.58 | 602,280,444.37 | 2,826,319,755.27 | 424,027,271.38 |
18.2 Unoffset deferred income tax liabilities
| Item | Closing balance | Opening balance | ||
| Taxable temporary difference | Deferred income tax liabilities | Taxable temporary difference | Deferred income tax liabilities | |
| Appraisal and Appreciation of Consolidated Assets of Non-identical Controlled Enterprises | 344,940,496.08 | 86,235,124.03 | 355,061,963.00 | 88,765,490.76 |
| Changes in fair value of other equity instrument investments | 8,500,000.00 | 2,125,000.00 | 17,600,000.00 | 4,400,000.00 |
| Changes in fair value of financial assets held for trading | 3,446,850.74 | 546,681.86 | ||
| Total | 353,440,496.08 | 88,360,124.03 | 376,108,813.74 | 93,712,172.62 |
18.3 Unrecognized deferred income tax asset details
Item
| Item | Closing balance | Opening balance |
| Deductible losses | 341,498,222.24 | 261,754,607.89 |
| Deductible temporary difference | 3,024,087.93 | 2,801,762.22 |
| Total | 344,522,310.17 | 264,556,370.11 |
18.4 The deductible losses of unrecognized deferred income tax assets will expire in the following years
| Year | Closing balance | Opening balance |
| 2022 | 14,669,961.10 | |
| 2023 | 11,480,964.23 | 11,480,964.23 |
| 2024 | 38,853,304.84 | 38,853,304.84 |
| 2025 | 57,109,818.13 | 57,109,818.13 |
| 2026 | 125,120,829.40 | 139,640,559.59 |
| 2027 | 108,933,305.64 | |
| Total | 341,498,222.24 | 261,754,607.89 |
19. Other non-current assets
| Item | Closing balance | Opening balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Prepayment for Fixed Assets | 1,640,966,885.38 | 1,640,966,885.38 | 1,630,946,885.38 | 1,630,946,885.38 | ||
| Input tax to be deducted / to be certified | 3,378,986.11 | 3,378,986.11 | 11,962,352.40 | 11,962,352.40 | ||
| Prepaid construction payments | 8,455,158.00 | 8,455,158.00 | 8,455,158.00 | 8,455,158.00 | ||
| Investment funds | 1,400,000.00 | 1,400,000.00 | 800,000.00 | 800,000.00 | ||
| Total | 1,654,201,029.49 | 1,654,201,029.49 | 1,652,164,395.78 | 1,652,164,395.78 | ||
20. Short-term loan
Short-term loan classification
| Item | Closing balance | Opening balance |
| Credit loans | 3,152,945,812.59 |
Item
| Item | Closing balance | Opening balance |
| Total | 3,152,945,812.59 |
21. Accounts payable
List of accounts payable
| Item | Closing balance | Opening balance |
| Start class fees | 177,100,514.23 | 109,756,452.70 |
| Fixed assets | 43,112,000.00 | 83,112,000.00 |
| Market promotion fees | 29,539,866.76 | 15,623,180.88 |
| Renovation costs | 22,461,110.93 | 22,461,110.93 |
| Project payments | 14,874,901.84 | 51,080,172.01 |
| Total | 287,088,393.76 | 282,032,916.52 |
22.Contract liabilities
Summary of contract liabilities
| Item | Closing balance | Opening balance |
| Training fees received in advance | 3,949,759,013.68 | 3,063,247,467.84 |
| Other | 40,525.03 | 473,822.44 |
| Total | 3,949,799,538.71 | 3,063,721,290.28 |
23. payroll payable
23.1 List of employee salaries payable
| Item | Opening balance | Increase | Decrease | Closing balance |
| I. Short-term salary | 406,180,615.62 | 3,634,949,515.80 | 3,528,354,156.94 | 512,775,974.48 |
| II.Post-employment welfare- defined contribution plan liability | 16,666,240.98 | 282,307,507.24 | 201,925,983.63 | 97,047,764.59 |
| III. Dismissed welfare | 40,000.00 | 1,909,768.03 | 1,949,768.03 | |
| Total | 422,886,856.60 | 3,919,166,791.07 | 3,732,229,908.60 | 609,823,739.07 |
23.2 Short-term salary list
| Item | Opening balance | Increase | Decrease | Closing balance |
| I. Wages or salaries, bonuses, allowances and subsidies | 399,743,797.02 | 3,356,766,463.91 | 3,287,192,978.24 | 469,317,282.69 |
| II. Staff welfare | 2,844,461.38 | 2,844,461.38 | ||
| III. Social security contributions | 5,769,694.98 | 166,706,018.80 | 154,805,103.79 | 17,670,609.99 |
| Inc: 1.Medical insurance | 5,379,517.86 | 158,382,167.52 | 147,915,236.63 | 15,846,448.75 |
| 2. Work injury insurance | 389,970.93 | 6,274,281.73 | 4,878,138.89 | 1,786,113.77 |
| 3. Maternity insurance | 206.19 | 2,049,569.55 | 2,011,728.27 | 38,047.47 |
| IV. Housing fund | 666,882.00 | 108,565,854.92 | 83,444,655.12 | 25,788,081.80 |
| V. Labor union expenditure and employee education expenditure | 241.62 | 66,716.79 | 66,958.41 | |
| Total | 406,180,615.62 | 3,634,949,515.80 | 3,528,354,156.94 | 512,775,974.48 |
23.3 Set deposit plan listing
| Item | Opening balance | Increase | Decrease | Closing balance |
| I. Basic endowment insurance | 16,059,305.75 | 272,705,057.11 | 194,825,024.03 | 93,939,338.83 |
| II. Unemployment insurance | 606,935.23 | 9,602,450.13 | 7,100,959.60 | 3,108,425.76 |
| Total | 16,666,240.98 | 282,307,507.24 | 201,925,983.63 | 97,047,764.59 |
23.4 Dismissed welfare
| Item | Amount of current payments | Amount due but not yet paid |
| Compensation for termination of employment | 1,949,768.03 | |
| Total | 1,949,768.03 |
24. Taxes payable
| Item | Closing balance | Opening balance |
| 1. Value-added tax | 3,008,686.66 | 1,258,114.36 |
| 2. Corporate income tax | 2,161,035.51 | 7,200,408.21 |
| 3. Land use tax | 1,987,843.38 | 2,064,992.60 |
Item
| Item | Closing balance | Opening balance |
| 4. Property tax | 1,845,218.31 | 1,604,934.51 |
| 5. City maintenance and construction tax | 229,372.72 | 84,830.67 |
| 6. Education surcharge | 166,226.69 | 37,072.06 |
| 7. Withholding individual income tax | 122,182.62 | 227,163.18 |
| 8. Other | 72,932.18 | 89,236.25 |
| Total | 9,593,498.07 | 12,566,751.84 |
25. Other payable
25.1 Master list
| Item | Closing balance | Opening balance |
| Other payable | 1,096,787,345.65 | 129,043,599.22 |
| Total | 1,096,787,345.65 | 129,043,599.22 |
25.2 Other payables
| Item | Closing balance | Opening balance |
| Shareholder loans | 959,240,000.00 | |
| Daily expenses | 64,983,802.12 | 58,363,407.47 |
| Equity transfer | 61,283,300.00 | 61,283,300.00 |
| Social Security and Provident Fund | 1,790,029.54 | 683,275.40 |
| Deposit and security deposit | 285,500.00 | |
| Advances and others | 9,204,713.99 | 8,713,616.35 |
| Total | 1,096,787,345.65 | 129,043,599.22 |
26. Non-current liabilities due within one year
| Item | Closing balance | Opening balance |
| Lease liabilities due within one year | 578,821,921.03 | 531,876,007.31 |
| Total | 578,821,921.03 | 531,876,007.31 |
27. Other current liabilities
| Item | Closing balance | Opening balance |
| Value-added tax received in advance | 118,495,201.91 | 91,925,853.39 |
| Total | 118,495,201.91 | 91,925,853.39 |
28. Lease liabilities
| Item | Closing balance | Opening balance |
| Houses and buildings | 508,752,253.77 | 635,691,184.87 |
| Total | 508,752,253.77 | 635,691,184.87 |
29. Share capital
| Item | Opening balance | Changes in the current period（+、-） | Closing balance | ||||
| Issue new shares | Bonus share | Provident fund transfer to share capital | other | Total | |||
| Share capital | 103,807,623.00 | 103,807,623.00 | |||||
30. Capital reserve
| Item | Opening balance | Increase | Decrease | Closing balance |
| Equity premium | 1,225,481,049.50 | 1,225,481,049.50 | ||
| Total | 1,225,481,049.50 | 1,225,481,049.50 |
31. Other comprehensive income
| Item | Opening balance | Amount incurred in this period | Closing balance | |||||
| Pre-tax amount for the year | Less: transferred to other comprehensive income in the previous period and transferred to profit or loss in the current period | Less: transferred to other comprehensive income in the previous period and transferred to retained earnings in the current period | Less: income tax expenses | Attributable to the parent company, after tax | Attributable to minority shareholders, after tax | |||
| 1. Other comprehensive income not reclassified into gains or losses | 13,200,000.00 | -9,100,000.00 | -2,275,000.00 | -6,825,000.00 | 6,375,000.00 | |||
| Changes in the fair value of other equity instruments | 13,200,000.00 | -9,100,000.00 | -2,275,000.00 | -6,825,000.00 | 6,375,000.00 | |||
| 2. Other comprehensive income classified into gains or losses | ||||||||
| Total | 13,200,000.00 | -9,100,000.00 | -2,275,000.00 | -6,825,000.00 | 6,375,000.00 | |||
32. Surplus reserve
| Item | Opening balance | Increase | Decrease | Closing balance |
| Statutory surplus reserve | 45,000,000.00 | 45,000,000.00 | ||
| Total | 45,000,000.00 | 45,000,000.00 |
33. Undistributed profit
| Item | Amount for the current period | Amount for the prior period |
| Undistributed profits at the end of previous year | 501,330,081.70 | 2,870,839,120.70 |
| Adjusting undistributed profits at the beginning of the period(Increase +, decrease-) | ||
| Undistributed profits at the beginning of the year | 501,330,081.70 | 2,870,839,120.70 |
| Add: net profit attributable to owners of the Parent Company | -1,102,059,818.43 | -2,369,509,039.00 |
| Less: appropriation of statutory surplus reserve | ||
| Appropriation of arbitrary surplus reserves | ||
| Dividend payable for ordinary shares | ||
| Other | ||
| Undistributed profits at the end of period | -600,729,736.73 | 501,330,081.70 |
34. Operating income and operating costs
| Item | Amount for the current period | Amount for the prior period | ||
| Operating income | Operating costs | Operating income | Operating costs | |
| Prime operating income | 4,801,848,887.15 | 2,958,900,025.02 | 6,860,282,371.30 | 4,945,732,913.85 |
| Including:Education and Training | 4,801,848,887.15 | 2,958,900,025.02 | 6,860,282,371.30 | 4,945,732,913.85 |
| Other business | 22,965,218.28 | 20,887,285.53 | 51,440,960.49 | 47,984,449.73 |
| Total | 4,824,814,105.43 | 2,979,787,310.55 | 6,911,723,331.79 | 4,993,717,363.58 |
35. Taxes and surcharges
| Item | Amount for the current period | Amount for the prior period |
| Property tax | 9,723,963.25 | 7,049,854.14 |
| City maintenance and construction tax | 8,407,331.30 | 8,522,400.03 |
| Land holding tax | 8,194,807.45 | 11,321,827.24 |
| Education surcharge | 5,981,579.32 | 6,082,104.43 |
| Stamp tax | 342,515.83 | 1,767,176.26 |
| Vehicle usage tax | 192,396.26 | 206,086.78 |
| Other | 453,129.50 | 405,720.86 |
| Total | 33,295,722.91 | 35,355,169.74 |
36. Sales expenses
| Item | Amount for the current period | Amount for the prior period |
| Employee's salary | 971,517,620.77 | 1,483,858,537.49 |
| Marketing fee | 127,248,692.75 | 270,366,194.33 |
| Rent property and depreciation amortization | 218,563,006.35 | 223,882,255.51 |
| Travel expenses | 32,113,996.39 | 113,757,589.64 |
| Other | 9,653,342.79 | 13,234,335.09 |
| Total | 1,359,096,659.05 | 2,105,098,912.06 |
37. Management expenses
| Item | Amount for the current period | Amount for the prior period |
| Employee's salary | 582,274,034.60 | 895,338,308.25 |
| Rental property and depreciation amortization | 176,542,656.54 | 189,782,209.74 |
| Office expenses | 111,547,826.48 | 123,857,061.80 |
| Travel expenses | 33,446,817.68 | 67,023,692.53 |
| Welfare fee | 1,436,229.70 | 8,856,771.23 |
| Other | 30,570,788.08 | 30,784,978.48 |
| Total | 935,818,353.08 | 1,315,643,022.03 |
38. Research and development expenses
| Item | Amount for the current period | Amount for the prior period |
| Employee's salary | 533,594,904.48 | 821,900,871.61 |
| Travel expenses | 8,865,669.17 | 27,128,292.82 |
| Other | 49,748,276.45 | 52,440,374.14 |
| Total | 592,208,850.10 | 901,469,538.57 |
39. Financial expenses
| Item | Amount for the current period | Amount for the prior period |
| Interest expenses | 82,900,952.64 | 274,734,405.81 |
| Less: Interest income | 7,965,614.53 | 58,235,304.20 |
| Service Charge | 163,586,152.98 | 275,115,370.37 |
| Total | 238,521,491.09 | 491,614,471.98 |
40. Other income
| Item | Amount for the current period | Amount for the prior period |
| Stable subsidy | 23,803,190.19 | 6,034,820.96 |
| VAT exemption | 19,539,883.84 | 68,480,064.80 |
| Tax handling fee refund | 5,170,874.49 | 107,735.71 |
| Financial support | 3,000,000.00 | 20,000,000.00 |
| Rent subsidy income | 417,165.00 | 273,750.00 |
| Small financial support income | 225,686.00 | 1,187,768.87 |
| Total | 52,156,799.52 | 96,084,140.34 |
41. Investment income
| Item | Amount for the current period | Amount for the prior period |
| Investment income from Financial product | 8,152,962.12 | 56,955,660.58 |
Item
| Item | Amount for the current period | Amount for the prior period |
| Dividend income obtained during the holding period of other equity instrument investments | 1,659,840.00 | 1,327,872.00 |
| Interest income obtained during the period of debt investment holding | 5,879.99 | 23,083,807.21 |
| Long-term equity investments income under equity method | -14,411.77 | -2,149,635.60 |
| Investment income from disposal of long-term equity investments | 26,620.33 | |
| Gains arising from remeasurement of remaining equity at fair value after loss of control | 25,576.40 | |
| Total | 9,804,270.34 | 79,269,900.92 |
42. Fair value change income
| Item | Amount for the current period | Amount for the prior period |
| Tradable financial assets | -6,026,850.74 | -21,490,322.52 |
| Total | -6,026,850.74 | -21,490,322.52 |
43. Expected credit loss
| Item | Amount for the current period | Amount for the prior period |
| Accounts receivable bad debt losses | -3,011,265.65 | -2,047,094.28 |
| Other receivables bad debt | -6,735,423.90 | -6,482,755.12 |
| Total | -9,746,689.55 | -8,529,849.40 |
44. Asset disposal income
| Item | Amount for the current period | Amount for the prior period |
| Right-of-use assets | -9,500,665.47 | |
| Fixed assets | -163,075.82 | |
| Total | -9,500,665.47 | -163,075.82 |
45.Non-operating income
| Item | Amount for the current period | Amount for the prior period | Amount included in current non-recurring profit and loss |
| Liquidated damages income | 18,141,095.89 | ||
| Total | 18,141,095.89 |
46. Non-operating expenses
| Item | Amount for the current period | Amount for the prior period | Amount included in current non-recurring profit and loss |
| Forfeiture and Late Payments | 4,676,810.32 | 833,516.13 | 4,676,810.32 |
| External donation | 100,004.54 | 415,001.84 | 100,004.54 |
| Fixed assets disposal losses | 1,782.50 | 5,264.50 | 1,782.50 |
| Compensation expenses | 50,000.00 | ||
| Total | 4,778,597.36 | 1,303,782.47 | 4,778,597.36 |
47. Income tax expense
47.1 Statement of income tax expense
| Item | Amount for the current period | Amount for the prior period |
| Income tax expenses | -179,942,271.41 | -399,652,322.88 |
| Inc: Current tax expense | 1,387,950.17 | 8,133,783.70 |
| Deferred tax expense | -181,330,221.58 | -407,786,106.58 |
47.2 Accounting profit and income tax expense adjustment process
| Item | Amount for the current period | Amount for the prior period |
| Total profit | -1,282,006,014.61 | -2,769,167,039.23 |
| Income tax expenses calculated pursuant to statutory/applicable tax rate(s) | -192,300,902.19 | -415,375,055.88 |
| Impact from different tax rates applicable to subsidiaries | -6,716,410.45 | -5,079,231.58 |
| Impact from adjustment to income tax in prior periods | 594,060.35 | 604,294.24 |
Item
| Item | Amount for the current period | Amount for the prior period |
| Profit and loss attributable to joint ventures and associates | 3,602.94 | 537,408.90 |
| Impact of non-taxable income | -414,960.00 | -331,968.00 |
| Impact from non-deductible cost, expense and loss | 5,523,795.35 | 4,510,631.06 |
| Tax deduction | -6,220,931.15 | -30,794,981.36 |
| Impact from using deductible losses of previously unrecognized deferred income tax assets | -4,632,738.80 | -611,337.11 |
| The effect of deductible temporary differences or deductible losses of deferred income tax assets not recognized in the current period | 24,222,212.54 | 46,887,916.85 |
| Income tax expenses | -179,942,271.41 | -399,652,322.88 |
48. Other comprehensive income items and their income tax impact and transfer-in profit and lossSee this report for details Note “VII (31) Other comprehensive income”.
49. Items in cash flow statement
49.1 Other cash receipts relating to operating activities
| Item | Amount for the current period | Amount for the prior period |
| Other income and non-operating income | 32,199,861.80 | 45,745,171.43 |
| Interest income | 7,965,614.53 | 58,235,304.20 |
| Deposits and guarantees | 1,743,889.01 | 67,046,115.88 |
| Reserve | 30,705.91 | 120,357.15 |
| Disbursement fee and others | 645,430.93 | 794,866.26 |
| Total | 42,585,502.18 | 171,941,814.92 |
49.2 Other cash payments relating to operating activities
| Item | Amount for the current period | Amount for the prior period |
| Daily expenses | 313,445,398.41 | 701,531,709.86 |
| Service Charge | 179,480,460.40 | 218,115,370.37 |
| Deposits and guarantees | 6,305,837.79 | 197,610,304.93 |
| Reserve | 57,645.91 | 385,512.15 |
Item
| Item | Amount for the current period | Amount for the prior period |
| Non-operating expenses | 4,778,597.36 | 1,303,782.47 |
| Disbursement fee and others | 81,514.51 | 462,284.22 |
| Total | 504,149,454.38 | 1,119,408,964.00 |
49.3 Other cash receipts relating to investing activities
| Item | Amount for the current period | Amount for the prior period |
| Engineering deposit | 200,000,000.00 | |
| Total | 200,000,000.00 |
49.4 Other cash receipts relating to financing activities
| Item | Amount for the current period | Amount for the prior period |
| Shareholder loans | 959,240,000.00 | |
| Total | 959,240,000.00 |
49.5 Other cash payments relating to financing activities
| Item | Amount for the current period | Amount for the prior period |
| Cash paid to repay principal and interest on lease liability | 386,990,744.68 | 606,571,985.34 |
| Total | 386,990,744.68 | 606,571,985.34 |
50. Supplementary Information on Cash Flow Statement
50.1 Supplementary Information on Cash Flow Statement
| Additional materials | Amount for the current period | Amount for the prior period |
| 1. Reconciliation of net profit to cash flow from operating activities: | ||
| Net profit | -1,102,063,743.20 | -2,369,514,716.35 |
| Add: Provision for impairment losses of assets | ||
| Credit impairment loss | 9,746,689.55 | 8,529,849.40 |
| Depreciation of fixed assets, depletion of oil and gas assets, depreciation of bearer biological assets | 110,281,014.11 | 120,413,023.55 |
Additional materials
| Additional materials | Amount for the current period | Amount for the prior period |
| Amortization of right-of-use assets | 494,927,273.69 | 503,643,895.04 |
| Amortization of intangible assets | 35,949,732.07 | 20,823,493.07 |
| Amortization of long-term prepaid expenses | 96,032,184.33 | 66,684,829.78 |
| Losses/(gains) on disposal of fixed assets, intangible assets and other long-term asset | 9,500,665.47 | 163,075.82 |
| Losses /(gains) on write-off of fixed assets | 1,782.50 | 5,264.50 |
| Losses/(gains) on changes in fair values | 6,026,850.74 | 21,490,322.52 |
| Financial expenses/ (income) | 82,900,952.64 | 274,734,405.81 |
| Losses/(gains) arising from investments | -9,804,270.34 | -79,269,900.92 |
| Decrease /(increase) in deferred tax assets | -178,253,172.99 | -402,420,834.61 |
| Increase/(decrease) in deferred tax liabilities | -3,077,048.59 | -5,365,271.97 |
| Decrease /(increase) in inventories | ||
| Decrease /(increase) in receivables from operating activities | 52,536,061.91 | -172,950,120.86 |
| Increase/(decrease) in payables from operating activities | 1,182,486,986.39 | -2,084,928,863.68 |
| Others | ||
| Net cash flow from operating activities | 787,191,958.28 | -4,097,961,548.90 |
| 2.Significant investing and financing activities that do not involve cash flow | ||
| Conversion of debt into capital | ||
| Reclassification of current portion of convertible bonds to current liabilities | ||
| Fixed assets capitalized under finance lease | ||
| 3. Net changes in cash and cash equivalents: | ||
| Closing balance of cash | 380,885,899.37 | 1,969,806,009.56 |
| Less: Opening balance of cash | 1,969,806,009.56 | 5,950,036,489.12 |
| Add: Closing balance of cash equivalents | ||
| Less: Opening balance of cash equivalents | ||
| Net increase in cash and cash equivalents | -1,588,920,110.19 | -3,980,230,479.56 |
50.2. Composition of Cash and Cash Equivalents
Item
| Item | Closing balance | Opening balance |
| I. Cash | 380,885,899.37 | 1,969,806,009.56 |
| Including: Cash on hand | 35,788.65 | 62,362.45 |
| Bank deposits | 374,976,284.40 | 1,755,585,321.54 |
| Other monetary funds | 5,873,826.32 | 214,158,325.57 |
| II. Cash equivalents | ||
| Including: Investments in debt securities due within three months | ||
| III. Closing balance of cash and cash equivalents | 380,885,899.37 | 1,969,806,009.56 |
| Including: Cash and cash equivalents with restricted use of parent company or subsidiaries within the group | ||
51. Assets with restricted ownership or use rights
| Item | Closing balance | Reason for restriction |
| Cash and cash equivalents | 4,442,656.37 | Guaranteed deposit, Not used for a long time/Not checked, Judicial freeze |
| Total | 4,442,656.37 |
52. Government subsidy
Details of Government subsidy
| Species | Amount | Listed items | Amount included in current profit and loss |
| Financial support | 3,000,000.00 | Other income | 3,000,000.00 |
| Stable subsidy | 23,803,190.19 | Other income | 23,803,190.19 |
| Rent subsidy income | 417,165.00 | Other income | 417,165.00 |
| Small financial support income | 225,686.00 | Other income | 225,686.00 |
| Total | 27,446,041.19 | 27,446,041.19 |
Section VIII. Changes In the Scope Of Consolidation
1. Business combinations not under common control
None.
2. Business combination under the same control
None.
3. Reverse purchase
None.
4. Disposal of subsidiaries
None.
5. Changes in the scope of consolidation due to other reasons
| The name of the subsidiary | Proportion of shareholding (%) | Reason for changes |
| Sichuan Offcn Luming Cultural Media Co., Ltd. | 100.00 | New establishment |
| Beijing Offcn Shengjing Education Technology Co., Ltd. | 100.00 | New establishment |
| Henan Offcn Education Consulting Co., Ltd. | 100.00 | New establishment |
| Lhasa Offcn Training School Co., Ltd. | 100.00 | New establishment |
| Tianjin Offcn Technology Co., Ltd. | 100.00 | New establishment |
| Tianjin Jinnan Offcn LexueTraining School Co., Ltd. | 100.00 | New establishment |
| Tianjin Baodi Offcn Lexiang Training School Co., Ltd. | 100.00 | New establishment |
| Tianjin Jizhou Offcn LechengTraining School Co., Ltd. | 100.00 | New establishment |
| Nantong Sigang Huizhi Technology Co., Ltd. | 51.00 | New establishment |
6. Other
None.
Section IX. Interests In Other Entities
1. Interests in subsidiaries
1.1 Composition of the company
| Name | Principal Business Address | Place of registration | Nature of business | Proportion of shareholding（%） | Voting rights ratio（%） | Acquisition Method Direct | ||||||
| Direct | Indirect | |||||||||||
| 1.Offcn Limited | Beijing | Beijing | Service | 100.00 | 100.00 | Reverse purchase | ||||||
| 2.Wuhu Yawei Automobile Sales Service Co., Ltd. | Wuhu | Wuhu | Sales | 100.00 | 100.00 | New establishment | ||||||
| 3.Ningguo Yaxia Motor Vehicle Driver Training School (Co., Ltd.) | Ningguo | Ningguo | Service | 100.00 | 100.00 | New establishment | ||||||
| 4.Huangshan Yaxia Fudi Automobile Sales Service Co., Ltd. | Huangshan | Huangshan | Sales | 100.00 | 100.00 | New establishment | ||||||
| 5.Chaohu Yaxia Kaixuan Automobile Sales Service Co., Ltd. | Hefei | Hefei | Sales | 100.00 | 100.00 | New establishment | ||||||
| 6.Bozhou Yaxia Motor Vehicle Driver Training School Co., Ltd. | Bozhou | Bozhou | Service | 100.00 | 100.00 | New establishment | ||||||
| 7.Suzhou Bokai Automobile Sales Service Co., Ltd. | Suzhou | Suzhou | Sales | 100.00 | 100.00 | Acquisition | ||||||
| 8.Shaanxi Offcn Education Technology Co.,Ltd. | Xi'an | Xi'an | Service | 100.00 | 100.00 | New establishment | ||||||
| 9.Chengdu Offcn Future Education Technology Co.,Ltd.. | Chengdu | Chengdu | Service | 100.00 | 100.00 | New establishment | ||||||
| 10.Lu’an Yazhong Real Estate Information Consulting Co., Ltd. | Lu'an | Lu'an | Real estate | 100.00 | 100.00 | Acquisition | ||||||
| 11.Lu’an Zhongke Real Estate Information Consulting Co., Ltd. | Lu'an | Lu'an | Real estate | 100.00 | 100.00 | Acquisition | ||||||
| 12.Sichuan Offcn Luming Cultural Media Co., Ltd. | Chengdu | Chengdu | Culture, sports and | 100.00 | 100.00 | New establishment | ||||||
Name
| Name | Principal Business Address | Place of registration | Nature of business | Proportion of shareholding（%） | Voting rights ratio（%） | Acquisition Method Direct | ||||||
| Direct | Indirect | |||||||||||
| entertainment | ||||||||||||
| 13.Zhejiang Offcn Education Technology Co. Ltd. | Hangzhou | Hangzhou | Service | 100.00 | 100.00 | New establishment | ||||||
| 14.Taizhou Offcn Future Enterprise Management Consulting Co., Ltd. | Taizhou | Taizhou | Service | 100.00 | 100.00 | New establishment | ||||||
| 15.Wenling Offcn Information Consulting Co., Ltd. | Wenling | Wenling | Service | 100.00 | 100.00 | New establishment | ||||||
| 16.Beijing Offcn Xinzhiyu Network Technology Co., Ltd. | Beijing | Beijing | Service | 100.00 | 100.00 | New establishment | ||||||
| 17.Hulun Buir Hailar Offcn Education Information Consulting Co., Ltd. | Hulunbeier | Hulunbeier | Service | 100.00 | 100.00 | New establishment | ||||||
| 18.Xilinhot Offcn Future Education Consulting Co., Ltd | Xilinhaote | Xilinhaote | Service | 100.00 | 100.00 | New establishment | ||||||
| 19.Yueqing Lecheng Offcn Training Center Co., Ltd. | Yueqing | Yueqing | Service | 100.00 | 100.00 | New establishment | ||||||
| 20.Jiaozuo Offcn Future Education Service Co., Ltd. | Jiaozuo | Jiaozuo | Service | 100.00 | 100.00 | New establishment | ||||||
| 21.Xinzheng Offcn Cultural Communication Co., Ltd. | Zhengzhou | Zhengzhou | Service | 100.00 | 100.00 | New establishment | ||||||
| 22.Chongqing Jiangbei Offcn Vocational Examination Training Co., Ltd. | Chongqing | Chongqing | Service | 100.00 | 100.00 | New establishment | ||||||
| 23.Nanning Offcn Future Education Consulting Co., Ltd. | Nanning | Nanning | Service | 100.00 | 100.00 | New establishment | ||||||
| 24.Baiyin Offcn Future Education Consulting Co., Ltd. | Baiyin | Baiyin | Service | 100.00 | 100.00 | New establishment | ||||||
| 25.Beijing Xindezhiyuan Enterprise Management Consultancy Co., Ltd. | Beijing | Beijing | Service | 100.00 | 100.00 | New establishment | ||||||
| 26.Nanjing Huiyue Hotel Management Co., Ltd. | Nanjing | Nanjing | Service | 100.00 | 100.00 | Acquisition | ||||||
Name
| Name | Principal Business Address | Place of registration | Nature of business | Proportion of shareholding（%） | Voting rights ratio（%） | Acquisition Method Direct | ||||||
| Direct | Indirect | |||||||||||
| 27.Shandong Kunzhong Yuhua Technology Co., Ltd | Jinan | Jinan | Service | 100.00 | 100.00 | Acquisition | ||||||
| 28.Sanmenxia Offcn Cultural Communication Co., Ltd. | Sanmenxia | Sanmenxia | Service | 100.00 | 100.00 | New establishment | ||||||
| 29.Liaoning Offcn Academic & Cultural Exchange Co., Ltd. | Shenyang | Shenyang | Service | 100.00 | 100.00 | New establishment | ||||||
| 30.Liaoning Offcn Education Technology Co., Ltd. | Shenfuxinqu | Shenfuxinqu | Service | 100.00 | 100.00 | New establishment | ||||||
| 31.Shandong Offcn Education Technology Co., Ltd. | Qingdao | Qingdao | Service | 100.00 | 100.00 | New establishment | ||||||
| 32.Jilin Changyi Offcn Education Training School Co., Ltd. | Jilin | Jilin | Service | 100.00 | 100.00 | New establishment | ||||||
| 33.Yuxi Offcn Training School Co., Ltd. | Yuxi | Yuxi | Service | 100.00 | 100.00 | New establishment | ||||||
| 34.Tonghua Offcn Training School Co., Ltd. | Tonghua | Tonghua | Service | 100.00 | 100.00 | New establishment | ||||||
| 35.Hunan Lightsalt Offcn Education Technology Co., Ltd. | Changsha | Changsha | Service | 90.00 | 90.00 | New establishment | ||||||
| 36.Tianjin Hexi Offcn Training School Co., Ltd. | Tianjin | Tianjin | Service | 100.00 | 100.00 | New establishment | ||||||
| 37.Tianjin Jinnan Offcn Lexue Training School Co., Ltd. | Tianjin | Tianjin | Service | 100.00 | 100.00 | New establishment | ||||||
| 38.Tianjin Baodi Offcn Lexiang Training School Co., Ltd. | Tianjin | Tianjin | Service | 100.00 | 100.00 | New establishment | ||||||
| 39.Tianjin Jizhou Offcn LechengTraining School Co., Ltd. | Tianjin | Tianjin | Service | 100.00 | 100.00 | New establishment | ||||||
| 40.Chengdu Offcn Education Training School Co., Ltd. | Chengdu | Chengdu | Service | 100.00 | 100.00 | New establishment | ||||||
| 41.Shandong Zhuoda Business Management Co., Ltd. | Rizhao | Rizhao | Service | 100.00 | 100.00 | New establishment | ||||||
| 42.Liaoning Zhongcheng Real Estate | Shenfuxinqu | Shenfuxinqu | Real estate | 100.00 | 100.00 | Acquisition | ||||||
Name
| Name | Principal Business Address | Place of registration | Nature of business | Proportion of shareholding（%） | Voting rights ratio（%） | Acquisition Method Direct | ||||||
| Direct | Indirect | |||||||||||
| Development Co.,Ltd. | ||||||||||||
| 43.Wuhu Offcn Training School Co.,Ltd. | Wuhu | Wuhu | Service | 100.00 | 100.00 | New establishment | ||||||
| 44.Wuhan Guoshang Human Resource Service Co.,Ltd. | Wuhan | Wuhan | Service | 100.00 | 100.00 | New establishment | ||||||
| 45.Jinan Zhangqiu Offcn Training School Co.,Ltd. | Jinan | Jinan | Service | 100.00 | 100.00 | New establishment | ||||||
| 46.Mengzi Offcn Education Technology Co.,Ltd. | Mengzi | Mengzi | Service | 100.00 | 100.00 | New establishment | ||||||
| 47.Beijing Offcn Technology Development Co.,Ltd. | Beijing | Beijing | Service | 100.00 | 100.00 | New establishment | ||||||
| 48.Shanghai Offcn Education Technology Co.,Ltd. | Shanghai | Shanghai | Service | 100.00 | 100.00 | New establishment | ||||||
| 49.Guangzhou Offcn Intelligence Education Technology Co.,Ltd. | Guangzhou | Guangzhou | Service | 100.00 | 100.00 | New establishment | ||||||
| 50.Nantong Sigang Huizhi Technology Co., Ltd. | Nantong | Nantong | Culture, sports and entertainment | 51.00 | 51.00 | New establishment | ||||||
| 51.Pingshan Offcn Education Technology Co.,Ltd. | Shijiazhuang | Shijiazhuang | Service | 100.00 | 100.00 | New establishment | ||||||
| 52.Shandong Offcn Education Training School Co.,Ltd. | Jinan | Jinan | Service | 100.00 | 100.00 | New establishment | ||||||
| 53.Lanzhou Offcn Education Training School Co.,Ltd. | Lanzhou | Lanzhou | Service | 100.00 | 100.00 | New establishment | ||||||
| 54.Anshan Tiedong Offcn Education Training School Co., Ltd. | Anshan | Anshan | Service | 100.00 | 100.00 | New establishment | ||||||
| 55.Diqing Offcn Training School Co., Ltd. | diqingzhou | diqingzhou | Service | 100.00 | 100.00 | New establishment | ||||||
| 56.Dali Offcn Education Training School Co., Ltd. | Dali | Dali | Service | 100.00 | 100.00 | New establishment | ||||||
Name
| Name | Principal Business Address | Place of registration | Nature of business | Proportion of shareholding（%） | Voting rights ratio（%） | Acquisition Method Direct | ||||||
| Direct | Indirect | |||||||||||
| 57.Harbin Nangang Offcn Education Training School Co., Ltd. | Haerbin | Haerbin | Service | 100.00 | 100.00 | New establishment | ||||||
| 58.Nujiang Offcn Training School Co., Ltd. | Nujiangzhou | Nujiangzhou | Service | 100.00 | 100.00 | New establishment | ||||||
| 59.Weixi Offcn Education Training School Co., Ltd. | Weixixian | Weixixian | Service | 100.00 | 100.00 | New establishment | ||||||
| 60.Beijing Offcn Century Education Technology Co., Ltd. | Beijing | Beijing | Service | 100.00 | 100.00 | New establishment | ||||||
| 61.Beijing Offcn Shengjing Education Technology Co., Ltd. | Beijing | Beijing | Service | 100.00 | 100.00 | New establishment | ||||||
| 62.Henan Offcn Education Consulting Co., Ltd. | Zhengzhou | Zhengzhou | Service | 100.00 | 100.00 | New establishment | ||||||
| 63. Lhasa Offcn Training School Co., Ltd. | Lasa | Lasa | Service | 100.00 | 100.00 | New establishment | ||||||
| 64. Tianjin Offcn Technology Co., Ltd. | Tianjin | Tianjin | Service | 100.00 | 100.00 | New establishment | ||||||
1.2 Material non-wholly owned subsidiaries
None.
1.3 Main financial information in respect of material non-wholly owned subsidiaries
None.
1.4 Significant restrictions on the use of enterprise group assets and pay off debts of the enterprise groupNone.
1.5 Financial support or other support provided to structured entities included in the scope of consolidated financial statementsNone.
2. The transactions that have led to changes in the share of ownership in the subsidiary but still control thesubsidiary
None.
3. Investment subject
None.
4. Interests in joint arrangements or joint ventures
Financial summary for non-important Joint venture and associated enterprise
| Item | Ending balance / Current period | Opening balance / Last Period |
| Joint venture | ||
| Total book value of investment | 2,266.22 | |
| Amount based on share-holding ratio | 2,266.22 | |
| --Net profit | 2,266.22 | |
| --Other comprehensive income | ||
| --Total comprehensive income | ||
| Associated enterprise： | ||
| Total book value of investment | 46,833,686.41 | 46,850,364.40 |
| Amount based on share-holding ratio | -16,677.99 | -2,149,635.60 |
| --Net profit | -16,677.99 | -2,149,635.60 |
| --Other comprehensive income | ||
| --Total comprehensive income |
5. Significant joint operations
None.
6. Interests in structured entities not included in the scope of consolidated financial statements
None.
7. Other
None.
Section X. Risks Associated With Financial Instruments
The company's main financial instruments include cash and cash equivalents, financial assets held for trading, accounts receivable,other receivables, debt investments, other equity instrumens, other non-current financial assets, etc. The risks associated with thesefinancial instruments and the risk management policies adopted by the company to reduce these risks are described below. The company'smanagement manages and monitors these exposures to ensure that these risks are contained within a defined range.
Risk management objective and policy：The Company’s risk management is to strike an appropriate balance between risks andbenefits, minimize the negative impact of risks on the Company's business performance and maximize the interests of shareholders andother equity investors. Based on this risk management objective, the basic strategy of the Company's risk management is to determineand analyze various risks faced by the Company, establish an appropriate bottom line for risk tolerance, make risk management andtimely and reliably supervise various risks to control the risks within the limited scope.
The main risks caused by the Company's financial instruments are credit risk, liquidity risk and market risk.
1. Classification of financial instruments
1.1Carrying value of various financial assets
（1）31 December 2022
| Item | Financial assets measured at amortized cost | Financial assets measured at fair value through profit or loss | Financial assets measure at fair value through other comprehensive income | Total |
| Monetary funds | 385,328,555.74 | 385,328,555.74 | ||
| Accounts Receivable | 37,323,682.88 | 37,323,682.88 | ||
| Other receivables | 193,617,379.76 | 193,617,379.76 | ||
| Other current assets | 1,661.55 | 1,661.55 | ||
| Other equity investment | 121,300,000.00 | 121,300,000.00 | ||
| Other non-current financial assets | 27,680,000.00 | 27,680,000.00 |
（2）31 December 2021
Item
| Item | Financial assets measured at amortized cost | Financial assets measured at fair value through profit or loss | Financial assets measure at fair value through other comprehensive income | Total |
| Monetary funds | 1,970,361,272.64 | 1,970,361,272.64 | ||
| Financial assets held for trading | 346,726,621.74 | 346,726,621.74 | ||
| Accounts Receivable | 40,374,842.27 | 40,374,842.27 | ||
| Other receivables | 219,501,061.83 | 219,501,061.83 | ||
| Debt investment | 7,058,993.55 | 7,058,993.55 | ||
| Other current assets | 12,833,701.81 | 12,833,701.81 | ||
| Other equity investment | 130,400,000.00 | 130,400,000.00 | ||
| Other non-current financial assets | 30,260,000.00 | 30,260,000.00 |
1.2 Carrying value of various financial liabilities at the balance sheet date as follows：
（1）31 December 2022
| Item | Financial liabilities at fair value through profit or loss | Other liabilities | Total |
| Accounts payable | 287,088,393.76 | 287,088,393.76 | |
| Other payable | 1,096,787,345.65 | 1,096,787,345.65 | |
| Non-current liabilities due within one year | 578,821,921.03 | 578,821,921.03 | |
| Lease liability | 508,752,253.77 | 508,752,253.77 |
（2）31 December 2021
| Item | Financial liabilities at fair value through profit or loss | Other liabilities | Total |
| Short-term borrowings | 3,152,945,812.59 | 3,152,945,812.59 | |
| Accounts payable | 282,032,916.52 | 282,032,916.52 | |
| Other payable | 129,043,599.22 | 129,043,599.22 | |
| Non-current liabilities due within one year | 531,876,007.31 | 531,876,007.31 | |
| Lease liability | 635,691,184.87 | 635,691,184.87 |
2. Credit risk
The financial assets of the company include cash and cash equivalents, financial assets held for trading, accounts receivable, otherreceivables, etc.The credit risk of these financial assets is caused by the default of the counterparty. The maximum risk exposure is equalto the book amount of these instruments, including:
The Company's working capital is deposited in banks with high credit rating, so the credit risk of working capital is low.
The book value of accounts receivable and other receivables in the consolidated balance sheet is the biggest credit risk that thecompany may face. The company continuously monitors the balance of accounts receivable and other receivables to ensure that theoverall credit risk of the company is under control. The quantitative data of the Company's credit risk exposure arising from accountsreceivable and other receivables can be found in Note VII (3) “Accounts receivable “ and Note VII (5) “Other receivables”.
3. Liquidity risk
The company adopts the revolving liquidity plan tool to manage the risk of capital shortage. The facility considers both the maturitydate of its financial instruments and the expected cash flow generated by the company's operations.
The goal of the company is to maintain the balance between the sustainability and flexibility of financing by using a variety offinancing instruments, including bank loans and other interest-bearing loans.
When managing liquidity risks, the Company shall maintain sufficient cash and cash equivalents as deemed by the managementand monitor them to meet the Company's operational needs and reduce the impact of cash flow fluctuations.The managements monitorthe use of bank loans and ensure compliance with loan agreements.
Maturity analysis of financial liabilities based on undiscounted contract cash flow:
| Item | 31 December 2022 | |||
| Within 1 year | 1-5 years | Over 5 years | Total | |
| Accounts payable | 287,088,393.76 | 287,088,393.76 | ||
| Other payable | 1,096,787,345.65 | 1,096,787,345.65 | ||
| Non-current liabilities due within one year | 595,905,159.21 | 595,905,159.21 | ||
| Lease liability | 504,849,923.25 | 37,638,017.00 | 542,487,940.25 | |
Continued：
Item
| Item | 31 December 2021 | |||
| Within 1 year | 1-5 years | Over 5 years | Total | |
| Short-term loan | 3,152,945,812.59 | 3,152,945,812.59 | ||
| Accounts payable | 282,032,916.52 | 282,032,916.52 | ||
| Other payable | 129,043,599.22 | 129,043,599.22 | ||
| Non-current liabilities due within one year | 550,685,331.89 | 550,685,331.89 | ||
| Lease liability | 650,123,884.68 | 22,037,457.51 | 672,161,342.19 | |
4. Market risk
Market risk refers to the risk that the fair value of financial instruments or future cash flow fluctuates due to changes in marketprices.Market risk mainly includes interest rate risk and foreign currency risk.
4.1. Interest rate risk
None.
4.2. Currency risk
None.Section XI. Capital Management
The main objective of the company's capital management is to ensure the company's ability to continue operations and maintainhealthy capital ratios to support the business and maximize shareholder value.
The company manages the capital structure and adjusts it according to the economic situation and changes in the risk characteristicsof related assets.
To maintain or adjust the capital structure, the company may adjust the distribution of profits to shareholders, return capital toshareholders or issue new shares. The company is not subject to external mandatory capital requirements. There have been no changesin capital management goals, policies, or procedures in 2022 and 2021.
Section XII. Fair Value Disclosure
1. The ending fair value of assets and liabilities measured at fair value
| Item | Fair value at the end of the period | |||
| Level 1 | Level 2 | Level 3 | Total | |
| I. Continuous fair value measurement | ||||
| (I) Transaction financial asset | 27,680,000.00 | 27,680,000.00 | ||
| 1. Financial asset at fair value through profit or loss | 27,680,000.00 | 27,680,000.00 | ||
| （1）Debt instruments | 27,680,000.00 | 27,680,000.00 | ||
| （2）Equity instruments | ||||
| （3）Derivative financial assets | ||||
| 2. Designated as financial asset at fair value through profit or loss | ||||
| （1）Debt instruments | ||||
| （2）Equity instruments | ||||
| (II) Other debt investments | ||||
| (III) Other equity instruments | ||||
| (IV) Investment properties | 121,300,000.00 | 121,300,000.00 | ||
| (V) Biological assets | ||||
| Total assets measured continuously at fair value | ||||
| (VI) Transaction financial liabilities | 148,980,000.00 | 148,980,000.00 | ||
| 1. Financial liabilities at fair value through profit or loss | ||||
| Including：Issued held-for-trading bonds | ||||
| Derivative financial liabilities | ||||
| Other | ||||
| 2. Designated as financial asset at fair value through profit or loss | ||||
| Total liabilities measured continuously at fair value | ||||
| II. Non-continuous fair value measurement | ||||
| (I) Assets held for sales | ||||
| 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 continuous and non-continuous first-level fair valuemeasurement projectsNone.
3. Qualitative and quantitative information on the valuation techniques used and important parameters forcontinuous and non-continuous second-level fair value measurement projectsNone.
4. Qualitative and quantitative information on the valuation techniques used and important parameters forcontinuous and non-continuous third-level fair value measurement projects
The company's sustainable third-level fair value measurement items are mainly non-tradable equity instrument investment and debtinstrument investment.The fair value is determined by market method and liquidity discount.
5. Continuous third-level fair value measurement project, adjustment information between the opening andclosing book value and sensitivity analysis of unobservable parameters
None.
6. Continuous fair value measurement items, if conversions between various levels occurred during the currentperiod, the reasons for the conversions and the policies for determining the timing of the conversions
None.
7. Changes in valuation techniques that occurred during the period and the reasons for the changes
None.
8. The fair value of financial assets and financial liabilities not measured at fair value
None.
9. Other
None.
Section XIII. Related Party Relationships And Transactions
1. Basis of identifying related party
Parties are considered to be related if one party has the ability to control or joint control the other party or exercise significantinfluence over the other party. Parties(two or more than two) are also considered to be related if they are subject to common control,jointcontrol or significant influence from other party.
2. The controlling shareholder of the company
The company is ultimately controlled by Li yongxin and Lu zhongfang. As of 31 December 2022, their combined shareholdingaccounted for 30.71% of the company's share capital.
3. Subsidiaries of the company
The details of the subsidiaries of the company are detailed in Note IX.(1) “Interest in subsidiaries”.
4. Joint ventures and associates of the company
| Name | Principal Business Address | Place of registration | Nature of business | Proportion of shareholding（%） | Accounting treatment | |
| Direct | Indirect | |||||
| Joint ventures | ||||||
| Offcn Xietong (Jiaxing) Human Resources Co., Ltd. | Jiaxing | Jiaxing | Retail | 50.00 | Equity met hod | |
| Associates | ||||||
| Beijing Offcn Future Education Technology Co., Ltd. | Beijing | Beijing | Service | 49.00 | Equity method | |
5. Other related parties of the company
| Name | Relationship |
| Li Yongxin | The controlling shareholder |
| Lu Zhongfang | The concerted action of the actual controller |
| Wang Zhendong | The company's directors / senior managers / shareholders 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 |
| Chen Yuqin | Independent director of the company |
| Jiang Tao | Independent director of the company |
| Zhang XuanMing | Independent director of the company |
| Wang Qiang | Independent director of the company,Term from February 1,2019 to January 28,2022 |
| Tong Yan | Independent director of the company,Term from February 1,2019 to January 28,2022 |
| Yu Hongwei | Supervisor of the company |
| Li Wen | Supervisor of the company |
| He Di | Supervisor of the company |
| He Youli | Senior management of the company |
| Gui Hongzhi | Senior management of the company |
| Luo Xue | Senior management of the company |
| Wang Xuejun | Senior management of the company,Term from February 1,2019 to January 28,2022 |
| Shenyang Lijing Mingzhu Hotel Management Co., Ltd. | Enterprises controlled by the directors of the company |
| Beijing Taifu Hotel Management Co., Ltd. | Enterprises controlled by the directors of the company |
| Beijing Chuangsheng Construction Decoration Engineering Co., Ltd. | Enterprises controlled by the directors of the company |
| Shanghai Beiding Network Technology Co., Ltd. | Enterprises controlled by the directors of the company |
| Ji'an Jingkai Lixiangxue Financial Information Service Co., Ltd. | Enterprises controlled by the directors of the company |
| Shaanxi Guancheng Industrial Co., Ltd. | Enterprises controlled by the directors of the company |
Name
| Name | Relationship |
| Beijing Qianqiu Intelligence Book & Media Co., Ltd. | Actual controller |
| Beijing Haidian Offcn Training School | Actual controller |
| Beijing Haidian Baoquan Financial Training Center | Actual controller |
| Zhanjiang Xiashan Offcn Training Center | Actual controller |
| Haikou Meilan Offcn Training School | Actual controller |
| Baoding Lianchi Offcn Training School | Actual controller |
| Cangzhou Yunhe Offcn Training School | Actual controller |
| Handan Congtai Offcn Training School | Actual controller |
| Tangshan Lunan Offcn Training School | Actual controller |
| Heihe Aihui Offcn Training School | Actual controller |
| Chifeng Hongshan Offcn Training Centre | Actual controller |
| Leshan Shizhong Offcn Training School | Actual controller |
| Kiamusze Offcn Training School | Actual controller |
| Mudanjiang Xi’an Offcn Training School | Actual controller |
| Urumqi Shayibake Offcn Training Center | Actual controller |
| Yiyang Heshan Offcn Training School | Actual controller |
| Shaoyang Shuangqing Offcn Training School | Actual controller |
| Chengdu Wuhou Offcn Training School | Actual controller |
Note: This report only lists related parties that have business dealings with the company during the reporting period.
6. Related-party transaction
6.1 Related transactions for the purchase and sale of goods, provision and receipt of services
6.1.1 the table of procurement of goods/acceptance of labor services
| Related parties | Content of related party transaction | Amount for the current period | Amount for the previous period |
| Zhanjiang Xiashan Offcn Training Center | Joint school running | 340,000.00 | 320,000.00 |
| Beijing Haidian Offcn Training School | Joint school running | 280,000.00 | 450,000.00 |
Related parties
| Related parties | Content of related party transaction | Amount for the current period | Amount for the previous period |
| Baoding Lianchi Offcn Training School | Joint school running | 100,000.00 | 130,000.00 |
| Cangzhou Yunhe Offcn Training School | Joint school running | 80,000.00 | 120,000.00 |
| Handan Congtai Offcn Training School | Joint school running | 75,000.00 | 140,000.00 |
| Beijing Haidian Baoquan Financial Training Center | Joint school running | 60,000.00 | 120,000.00 |
| Mudanjiang Xi’an Offcn Training School | Joint school running | 48,500.00 | 60,500.00 |
| Leshan Shizhong Offcn Training School | Joint school running | 45,000.00 | 150,000.00 |
| Tangshan Lunan Offcn Training School | Joint school running | 40,000.00 | 140,000.00 |
| Kiamusze Offcn Training School | Joint school running | 28,500.00 | 60,500.00 |
| Chifeng Hongshan Offcn Training Centre | Joint school running | 10,000.00 | 50,000.00 |
| Heihe Aihui Offcn Training School | Joint school running | 9,000.00 | 66,500.00 |
| Chengdu Wuhou Offcn Training School | Joint school running | 280,000.00 | |
| Urumqi Shayibake Offcn Training Center | Joint school running | 208,600.00 | |
| Shaoyang Shuangqing Offcn Training School | Joint school running | 170,000.00 | |
| Yiyang Heshan Offcn Training School | Joint school running | 80,000.00 | |
| Haikou Meilan Offcn Training School | Joint school running | 20,000.00 | |
| Ji'an Jingkai Lixiangxue Financial Information Service Co., Ltd. | Fee | 78,010,378.21 | 181,824,220.00 |
| Shanghai Beiding Network Technology Co., Ltd. | Fee | 1,320,000.00 | |
| Beijing Taifu Hotel Management Co., Ltd. | Accommodation and catering services | 11,802,340.00 |
6.1.2The table of sale of goods/provision of labor services
| 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 Service | 2,647,169.74 | 3,364,150.85 |
6.2 Related fiduciary management / contracting and entrusted management / outsourcing
6.2.1 The company's entrusted management / contracting situation table:
| Trustee /Outsourcer Name | Trustee / Contractor Name | Type | Entrustment / contracting start date | Entrustment / Contract Termination Date | Custody income / contracting income pricing basis | Annually recognized custody income / contracting income |
| Li Yongxin | Offcn Limited | 33 Civil non-schools | 19 October 2018 | Long term | All reasonable returns on the entrusted assets | 28,301.89 |
| Total | 28,301.89 |
6.2.2 The company's entrusted management / contracting situation table：
None.
6.3 Related lease
6.3.1 The company as the lessor：
None.
6.3.2 The company as the lessee：
| Name of lessor | Category | Rental expense of simplified short-term leases and low-value asset leases (if applicable) | Variable lease payments that are not covered in the measurement of the lease liabilities (if applicable) | Paid rent | Interest expenses on the lease liabilities assumed | Added right-of-use assets | |||||
| Current period | Prior period | Current period | Prior period | Current period | Prior period | Current period | Prior period | Current period | Prior period | ||
| Shenyang Lijing Mingzhu Hotel Management Co., Ltd. | Operating lease | 25,030,700.00 | 25,030,700.00 | 2,026,413.28 | 8,993,436.23 | -6,499,022.41 | 136,619,924.16 | ||||
| Total | 25,030,700.00 | 25,030,700.00 | 2,026,413.28 | 8,993,436.23 | -6,499,022.41 | 136,619,924.16 | |||||
6.4 Related party guarantee
6.4.1 The company act as the guarantor
None.
6.4.2 The company is the guaranteed party
None.
6.5 Borrowing of funds from related parties
| Related parties | Amount of money | Start Date | Due Date | Illustrate |
| Dismantling | ||||
| Lu Zhongfang | 119,240,000.00 | 2022-11-4 | 2023-11-4 | |
| Lu Zhongfang | 840,000,000.00 | 2022-12-6 | 2023-12-6 | |
6.6 Related party assets transfer and debt restructuring
| Related parties | Content of related party transaction | Asset pricing basis | Amount for the current period | Amount for the previous period |
| Beijing Chuangsheng Construction Decoration Engineering Co., Ltd. | purchase assets | Agreement price | 513,815.00 | |
| Total | 513,815.00 |
6.7 Key executive compensation
| Item | Amount for the current period | Amount for the prior period |
| Key executive compensation | 3,735,559.47 | 6,120,389.56 |
6.8 Other related transactions
6.8.1 Commissioned decoration/engineering
| Related parties | Pricing basis | Amount for the current period | Amount for the prior period | ||
| Contract amount | Amount | Contract amount | Amount | ||
| Beijing Chuangsheng Construction Decoration Engineering Co., Ltd. | Agreement price | 35,458,590.00 | |||
Related parties
| Related parties | Pricing basis | Amount for the current period | Amount for the prior period | ||
| Contract amount | Amount | Contract amount | Amount | ||
| Total | 35,458,590.00 | ||||
6.8.2 Liquidated damages income
| Related parties | Amount for the current period | Amount for the prior period |
| Liaoning Hanhui Industrial Co., Ltd. | 18,141,095.89 | |
| Total | 18,141,095.89 |
7. Related party accounts receivable and payable
7.1 Accounts receivables
| Item | Related party | Closing balance | opening balance | ||
| Carrying amount | Bad debt provision | Carrying amount | Bad debt provision | ||
| Other receivable | Shenyang Lijing Mingzhu Hotel Management Co., Ltd. | 5,675,200.00 | 5,675,200.00 | ||
| Other non-current assets | Beijing Offcn Future Education Technology Co., Ltd. | 1,618,411,145.38 | 1,618,391,145.38 | ||
| Total | 1,624,086,345.38 | 1,624,066,345.38 | |||
7.2 Accounts payable
| Item | Related party | Closing balance | opening balance |
| Account payable | Shaanxi Guancheng Industrial Co., Ltd. | 43,060,000.00 | 83,060,000.00 |
| Account payable | Beijing Chuangsheng Construction Decoration Engineering Co., Ltd. | 14,506,981.00 | 59,506,981.00 |
| Other account payable | Lu Zhongfang | 959,240,000.00 | |
| Other account payable | Ji'an Jingkai Lixiangxue Financial Information Service Co., Ltd. | 14,383,404.77 | 57,000,000.00 |
| Total | 1,031,190,385.77 | 199,566,981.00 |
8. Related party commitments
None.
9. Other
None.
Section XIV. Share-based Payment
1. Overview of share-based payment
None.
2. Equity-settled share payments
None.
3. The Stock payment settled by cash
None.
4. Modification and termination of the stock payment
None.
5. Other
None.
Section XV. Contingencies and commitments
1. Important commitment
As of December 31, 2022, the Company was involved in some investors' lawsuits against the Company's liability formisrepresentation of securities. Because some litigation materials, case pleadings and other necessary information have not beencompletely handed over to the Company by Beijing Financial Court, the Company could not fully sort out the litigation amount, and
therefore could not estimate the amount of possible losses.
2. Contingencies
Significant contingencies on the balance sheet date.As of December 31, 2022, the company was involved in some cases of investors suing the company for liability disputes oversecurities misrepresentation. Because some litigation materials, case pleadings and other necessary information have not been completelyhanded over to the company by the Beijing Financial Court, the company could not fully sort out the litigation amount, and could notestimate the amount of possible losses of the company.
3. Other
None.Section XVI. Events After Balance Sheet Date
1. Significant unadjusted events
None.
2. Profit distribution
None.
3. Sales return
None.
4. Other adjustment events after balance sheet date
None.
Section XVII. Other Significant Events
1. Debt Restructuring
None.
2. Assets exchange
None.
3. Annuity plan
None.
4. Discontinued operations;
None.
5.Segment information
5.1 Report segment determining and accounting policy
The company's main production and operation activities are decided by the company, which is mainly engaged in education andtraining business. Therefore, the company is managed as an operating segment. For accounting policies, please refer to Note V to thisreport, "The Company’s Significant Accounting Policies And Accounting Estimates”.
5.2 Other information
5.2.1 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 | 4,801,848,887.15 | 6,860,282,371.30 |
| Including：Education and training | 4,801,848,887.15 | 6,860,282,371.30 |
| Other business | 22,965,218.28 | 51,440,960.49 |
| Total | 4,824,814,105.43 | 6,911,723,331.79 |
5.2.2 The total amount of foreign transaction income obtained by the enterprise from its own country and from other countries orregions.
| Area name | Amount for the current period | Amount for the prior period |
| Domestic area | 4,824,814,105.43 | 6,911,723,331.79 |
| Total | 4,824,814,105.43 | 6,911,723,331.79 |
5.2.3 The extent of dependent on its major customers.
The company's customers are relatively scattered, consisting of a large number of customers, and there is no dependence on majorcustomers.
6. Borrowing costs
The company has no capitalized borrowing costs during the reporting period.
7. Foreign currency translation
None.
8. Lease
8.1 Lessor
8.1.1 Financial leasing.
None.
8.1.2 Operating lease
Assets leased out under operating leases:
| Item | Closing balance | Opening balance |
| Land use rights | 310,663,290.95 | |
| Buildings | 450,260.54 | 334,273,250.51 |
| Total | 450,260.54 | 644,936,541.46 |
| Item | Amount |
| I.Income situation | 1,602,191.15 |
| Lease income | 1,602,191.15 |
| Income related to variable lease payments not included in lease income | |
| II.Lease income not turned into cash for five consecutive fiscal years after the balance sheet date | 3,328,000.00 |
| Year 1 | 800,000.00 |
| Year 2 | 800,000.00 |
| Year 3 | 864,000.00 |
| Year 4 | 864,000.00 |
| Year 5 | 800,000.00 |
| III.Lease income received for remaining years that is not turned into cash | 6,202,010.00 |
| Within 1 year (inclusive) |
Item
| Item | Amount |
| 1-2 years (inclusive) | 800,000.00 |
| 2-3 years (inclusive) | 800,000.00 |
| Over 3 years | 4,602,010.00 |
8.2 Lessee
The lessee shall disclose the following information related to the lease
| Item | Amount |
| Interest expense on lease liability | 34,691,162.47 |
| Short-term lease expenses included in current profit and loss | |
| Low-value asset leasing expense included in current profit and loss | |
| Variable lease payments not included in the measurement of the lease liability | |
| Income derived from sublease of right-of-use assets | |
| Total cash outflow related to lease | 386,990,744.68 |
| Gains and losses arising from sale and leaseback transactions |
9. Other significant transactions and matters that may affect investors' decision makingNone.
10. Other
None.Section XVIII. Notes Of Main Items In the Financial Statements of the Company as the Parent
1. Accounts receivable
1.1 Disclosure by aging
| Item | Closing balance | Opening balance |
| Within 1 year (inclusive) | 15,280.44 | 15,570,863.42 |
| 1-2 years (inclusive) | 15,570,863.42 | 15,570,863.56 |
Item
| Item | Closing balance | Opening balance |
| 2-3 years (inclusive) | 15,570,863.56 | |
| Less: Provision for bad debts | 4,672,023.07 | 2,335,629.53 |
| Total | 26,484,984.35 | 28,806,097.45 |
1.2 Disclosure by bad debt accrual method
| Item | Closing balance | ||||
| Book balance | Bad debt | Book value | |||
| Amount | Percentage（%） | Amount | Percentage of provision (%) | ||
| Accounts receivable with a collective bad debt provision | 31,157,007.42 | 100.00 | 4,672,023.07 | 15.00 | 26,484,984.35 |
| Combination3 | 31,157,007.42 | 100.00 | 4,672,023.07 | 15.00 | 26,484,984.35 |
| Total | 31,157,007.42 | 100.00 | 4,672,023.07 | -- | 26,484,984.35 |
Continued：
| Item | Opening balance | ||||
| Book balance | Bad debt | Book value | |||
| Amount | Percentage（%） | Amount | Percentage of provision (%) | ||
| Accounts receivable with a collective bad debt provision | 31,141,726.98 | 100.00 | 2,335,629.53 | 7.50 | 28,806,097.45 |
| Combination3 | 31,141,726.98 | 100.00 | 2,335,629.53 | 7.50 | 28,806,097.45 |
| Total | 31,141,726.98 | 100.00 | 2,335,629.53 | -- | 28,806,097.45 |
Collective bad debt provision:
| Item | Closing balance | ||
| Accounts receivables | Bad debt provision | Percentage of provision | |
| Combination3 | 31,157,007.42 | 4,672,023.07 | 15.00 |
| Total | 31,157,007.42 | 4,672,023.07 | -- |
1.3 Bad debt provision in the current period:
Item
| Item | Opening balance | Amount of change in the current period | Closing balance | |||
| Provision | Recovery or reversal | Write-off | Others | |||
| Bad debt provision for accounts receivable | 2,335,629.53 | 2,336,393.54 | 4,672,023.07 | |||
| Total | 2,335,629.53 | 2,336,393.54 | 4,672,023.07 | |||
1.4 Top five debtors with the biggest ending balances of accounts receivable
| Name | Nature | Closing balance | Provision | Age | Percentage of total accounts receivable (%) |
| Yaxia Industrial | Lease | 31,141,726.98 | 4,671,259.05 | Within 3 years | 99.95 |
| Chuzhou Xinqiao Vehicle Brokerage Services Co., Ltd. | Lease | 10,120.20 | 506.01 | Within 1 year | 0.03 |
| Chuzhou Dongfang Zhilian Logistics Co., Ltd. | Lease | 5,160.24 | 258.01 | Within 1 year | 0.02 |
| Total | 31,157,007.42 | 4,672,023.07 | -- | 100.00 |
2. Other receivables
2.1 Classified listing
| Item | Closing balance | Opening balance |
| Other receivables | 22,848,853.79 | 20,699,731.33 |
| Total | 22,848,853.79 | 20,699,731.33 |
2.2 Other receivables
2.2.1 Disclosure by aging
| Aging | Closing balance | Opening balance |
| Within 1 year (inclusive) | 2,149,122.46 | 1,758,288.04 |
| 1-2 years (inclusive) | 1,758,288.04 | 991,922.30 |
| 2-3 years (inclusive) | 991,922.30 | 17,949,520.99 |
| 3-4years (inclusive) | 17,949,520.99 |
Aging
| Aging | Closing balance | Opening balance |
| Less: Provision for bad debts | ||
| Total | 22,848,853.79 | 20,699,731.33 |
2.2.2 Other receivables by nature of the payment
| Item | Closing balance | Opening balance |
| Current account | 22,843,253.79 | 20,694,131.33 |
| Deposits and guarantees | 5,600.00 | 5,600.00 |
| Total | 22,848,853.79 | 20,699,731.33 |
2.2.3 Withdrawing process of bad debt provision
None.
2.2.4 Bad debt provision in the current period
None
2.2.5 Top 5 other receivable at the end of the period
| Creditor | Nature of payment | Closing balance | Aging | Percentage of total other receivables (%) | Bad debt provision |
| Bozhou Yaxia Motor Vehicle Driver Training School Co., Ltd | Current account | 10,702,771.11 | within 4 years | 46.84 | |
| Wuhu Yawei Automobile Sales and Service Co., Ltd | Current account | 4,079,684.08 | within 4 years | 17.86 | |
| Suzhou Bokai Automobile Sales and Service Co., Ltd | Current account | 3,953,693.27 | within 4 years | 17.30 | |
| Huangshan Yaxia Fudi Automobile Sales Service Co., Ltd. | Current account | 2,067,252.57 | within 4 years | 9.05 | |
| Lu'an Zhongke Real Estate Information Consulting Co., Ltd | Current account | 990,500.00 | within 1 year | 4.34 | |
| Total | 21,793,901.03 | 95.39 |
3. Long-term equity investments
| Item | Closing balance | Opening balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Investment in subsidiaries | 19,143,591,207.14 | 19,143,591,207.14 | 19,143,591,207.14 | 19,143,591,207.14 | ||
| Investment for associates and joint venture | 46,810,376.23 | 46,810,376.23 | 46,824,788.00 | 46,824,788.00 | ||
| Total | 19,190,401,583.37 | 19,190,401,583.37 | 19,190,415,995.14 | 19,190,415,995.14 | ||
3.1 Investment in subsidiaries
| Investee | Opening balance | Increase | Decrease | Closing balance | Provision for impairment | Impairment reserve closing balance |
| Offcn Limited | 18,500,000,000.00 | 18,500,000,000.00 | ||||
| Lu’an Zhongke Real Estate Information Consulting Co., Ltd. | 489,131,700.00 | 489,131,700.00 | ||||
| Lu’an Yazhong Real Estate Information Consulting Co., Ltd. | 72,151,600.00 | 72,151,600.00 | ||||
| Wuhu Yawei Automobile Sales Service Co., Ltd. | 23,000,000.00 | 23,000,000.00 | ||||
| Ningguo Yaxia Motor Vehicle Driver Training School (Co., Ltd.) | 17,474,782.14 | 17,474,782.14 | ||||
| Huangshan Yaxia Fudi Automobile Sales Service Co., Ltd. | 5,000,000.00 | 5,000,000.00 |
Investee
| Investee | Opening balance | Increase | Decrease | Closing balance | Provision for impairment | Impairment reserve closing balance |
| Chaohu Yaxia Kaixuan Automobile Sales Service Co., Ltd. | 5,000,000.00 | 5,000,000.00 | ||||
| Bozhou Yaxia Motor Vehicle Driver Training School Co., Ltd. | 20,000,000.00 | 20,000,000.00 | ||||
| Suzhou Bokai Automobile Sales Service Co., Ltd. | 11,833,125.00 | 11,833,125.00 | ||||
| Total | 19,143,591,207.14 | 19,143,591,207.14 |
3.2 Investment in associates and joint ventures
| The invested entity | Opening balance | Changes for the year | Closing balance | Closing balance of provision for impairment | |||||||
| Increase | Decrease | Investment profit under equity method | Other comprehensive income adjustment | Other equity change | Cash dividends or profits announced of issuance | Provision for impairment | Others | ||||
| I. Joint ventures | |||||||||||
| Offcn Xietong (Jiaxing) Human Resources Co., Ltd. | 2,266.22 | 2,266.22 | |||||||||
| subtotal | 2,266.22 | 2,266.22 | |||||||||
The investedentity
| The invested entity | Opening balance | Changes for the year | Closing balance | Closing balance of provision for impairment | |||||||
| Increase | Decrease | Investment profit under equity method | Other comprehensive income adjustment | Other equity change | Cash dividends or profits announced of issuance | Provision for impairment | Others | ||||
| II.Associates | |||||||||||
| Beijing Offcn Future Education Technology Co., Ltd. | 46,824,788.00 | -16,677.99 | 46,808,110.01 | ||||||||
| subtotal | 46,824,788.00 | -16,677.99 | 46,808,110.01 | ||||||||
| Total | 46,824,788.00 | -14,411.77 | 46,810,376.23 | ||||||||
4. Share capital
| Item | Opening balance | Changes in the current period（+、-） | Closing balance | ||||
| Issue new shares | Bonus share | Provident fund transfer to share capital | other | Total | |||
| 1. Shares with limited sale conditions | 4,564,776,021.00 | -3,076,550,617.00 | -3,076,550,617.00 | 1,488,225,404.00 | |||
| 1.1. Other domestic shares | 4,564,776,021.00 | -3,076,550,617.00 | -3,076,550,617.00 | 1,488,225,404.00 | |||
| Inc: Domestic legal person shares | 89,117,723.00 | -89,117,723.00 | -89,117,723.00 | ||||
| Domestic natural person holdings | 4,475,658,298.00 | -2,987,432,894.00 | -2,987,432,894.00 | 1,488,225,404.00 | |||
| 2. Shares in circulation without restrictions on sale | 1,602,623,368.00 | 3,076,550,617.00 | 3,076,550,617.00 | 4,679,173,985.00 | |||
| common stock | 1,602,623,368.00 | 3,076,550,617.00 | 3,076,550,617.00 | 4,679,173,985.00 | |||
| Total | 6,167,399,389.00 | 6,167,399,389.00 | |||||
5. Operating income and operating costs
| Item | Amount for the current period | Amount for the prior period | ||
| Operating income | Operating costs | Operating income | Operating costs | |
| Other businesses | 1,483,143.55 | 10,359.40 | 14,831,488.06 | 11,230,514.83 |
| Total | 1,483,143.55 | 10,359.40 | 14,831,488.06 | 11,230,514.83 |
6. Investment income
| Item | Amount for the current period | Amount for the prior period |
| Long-term equity investments income under equity method | -14,411.77 | -2,174,511.83 |
| Dividend income obtained during the holding period of other equity instrument investments | 1,659,840.00 | 1,327,872.00 |
| Investment income from Financial product | 74,257.03 | 10,466.92 |
Item
| Item | Amount for the current period | Amount for the prior period |
| Total | 1,719,685.26 | -836,172.91 |
Section XIX. Supplementary Information
1. Pursuant to the Explanatory Announcement for Information Discliosure of Companies Offering Securities to the Public No.1-Non-recurring Profit and Loss issued by China Securities Regulatory Commision,non-recurring profit and loss as follows.Breakdown of non-recurring profit and loss during the reporting period
| Breakdown of non-recurring profit and loss | Amount | Description |
| （1）Profit and loss on disposal of non current assets | -9,500,665.47 | |
| （2）Tax refunds, reductions or exemptions without approval or without formal approval documents | ||
| （3）Government subsidies included in the current profit and loss (closely related to the business of the enterprise, except for government subsidies that are fixed or quantified in accordance with national unified standards) | 27,446,041.19 | |
| （4）Capital occupation fees charged to non-financial enterprises included in the current profit and loss | ||
| （5）The company can obtain the differences when the investment cost of an enterprise's acquisition of subsidiaries, associates and joint ventures is less than the income derived from the fair value of the identifiable net assets of the investee. | ||
| （6）Non-monetary asset exchange gains and losses | ||
| （7）Profit or loss from entrusting others to invest or manage assets | 8,152,962.12 | |
| （8）Impairments for assets due to force majeure factors, such as natural disasters | ||
| （9）Debt restructuring gains and losses | ||
| （10）Enterprise restructuring costs, such as expenses for relocating employees, integration costs, etc. | ||
| （11）Gains and losses in excess of fair value resulting from transactions where the transaction price was significantly unfair | ||
| （12）Net profit or loss for the period from the beginning of the subsidiary to the business combination date resulting from a business combination under the same control. | ||
| （13）Gains and losses from contingencies unrelated to the company's normal business operations | ||
| （14）In addition to the effective hedging business related to the company's normal business operations, the holding of financial assets held for trading, derivative financial assets, financial liabilities held for trading, and changes in fair value arising from derivative financial liabilities, and disposal of financial assets held for trading, derivative finance investment income from assets, financial liabilities held for trading, derivative financial liabilities and other debt investments | -6,026,850.74 | |
| （15）Receivables and contract asset impairment reserves that are individually tested for impairment are reversed. | ||
| （16）Gains and losses from external entrusted loans |
Breakdown of non-recurring profit and loss
| Breakdown of non-recurring profit and loss | Amount | Description |
| （17）Gains and losses from changes in the fair value of investment real estate that are subsequently measured at the fair value model | ||
| （18）The impact on the current profit and loss should be adjusted in one time in accordance with the requirements of tax and accounting laws | ||
| （19）Custody fee income from entrusted operations | 28,301.89 | , |
| （20）Non-operating income and expenses other than the above | -4,778,597.36 | |
| （21）Other profit and loss items that meet the definition of non-recurring profit and loss | ||
| Total non-recurring profit and loss | 15,321,191.63 | |
| Less：Amount of income tax impact | 4,303,758.56 | |
| Non-recurring profit and loss after deducting income tax effects | 11,017,433.07 | |
| Inc：Non-recurring profit and loss attributable to owners of the parent company | 11,017,433.07 | |
| Non-recurring profit and loss attributable to minority shareholders |
2. Return on equity and earnings per share
| Profit for the reporting period | Weighted average return on net assets (%) | Earnings per share | |
| Basic earnings per share | Diluted earnings per share | ||
| Net profit attributable to ordinary shareholders of the company | -82.59 | -0.18 | -0.18 |
| Net profit attributable to ordinary shareholders of the company after deducting non-recurring gains and losses | -83.42 | -0.18 | -0.18 |